Welcome to the Community Bank System Q4 and Full Year 2022 Earnings Conference Call. Please note that this presentation contains forward-looking statements within the provisions of the Private Securities Litigation Reform Act of 1995 that are based on current expectations, estimates, and projections about the industry, markets, and economic environment in which the company operates. Such statements involve risks and uncertainties that could cause actual results to differ materially from the results discussed in these statements. These risks are detailed in the company's annual report and Form 10-K filed with the Securities and Exchange Commission. During this call, should you need any assistance, please signal a conference specialist by pressing the star key followed by zero. Please also note that this call is being recorded today. Today's call presenters are Mark Tryniski, President and Chief Executive Officer, and Joseph Sutaris, Executive Vice President and Chief Financial Officer. They will also be joined by Dimitar Karaivanov, Executive Vice President and Chief Operating Officer, for the question and answer session. Gentlemen, you may begin the call. Thank you, Joe. Good morning, everyone. Thank you for joining our year-end conference call. We hope everyone is well. Earnings for the quarter were very good. In fact, our best quarter ever, ex- reserve releases last year. We reported record revenues, record PPNR, record GAAP EPS, ex-acquisition expenses. Loan growth was very strong across all our portfolios, up 12% annualized over the Q3. The deposit base remains sound with respect to retention and rate. Joe will comment further on the quarter. It was a good one. Looking at the whole of 2022, we likewise had a record year, not just financially, but for our commercial mortgage and installment lending businesses as well. Investments we made over the past 18 months, particularly in our commercial and mortgage businesses, have proven fruitful. The commercial business grew organically 18% in 2022. The mortgage business was up 7%, and the installment business grew at 28%. Our non-banking businesses also had significant organic growth but were negatively impacted by the market declines, with the exception of one group, our insurance business, whose revenues were up 17%. Our wealth business, which is entirely levered to the market, was only down 4% against a market that was down 19.5%. Our benefits business, which is about half levered to the market, actually grew 1%. These businesses had a fabulous year despite the market, and at this point, are a coiled spring for the future. Looking ahead to the remainder of the year, we expect to execute well across all of our businesses. A significant focus will be on funding. We have $800 million of overnight borrowings, which is not ideally where we want to be when we also have $5 billion in lower yielding securities. We have some thoughts on addressing that going forward into 2023 and beyond, some of which Joe will touch on further. We will continue to invest in digital and rationalize analog, as we did this past year with the consolidation of 12 retail branches, bringing the total over the past three years to 15% of our total network. Excluding acquisitions, we have fewer FTEs than we did in 2021. We implemented new commercial and cash management platforms. Our operations teams are working to implement workflow automation that is expected to save up to 60,000 hours of manual effort. We are focused across the company on technology solutions for our customers and for our operating efficiency. Lastly, most important, we have the best talent in this company we've ever had, and so we'll continue to get better in everything we do, particularly as we also now have the products, technology, and service capacity to compete very effectively with the larger banks across our markets. This has created a significant new organic market opportunity for us that we have not previously possessed. In summary, it was a great quarter. It was a great year. We're exceptionally well positioned, and we look forward to 2023. Joe? Thank you, Mark. Good morning, everyone. As Mark noted, the company's Q4 earnings results were solid, with fully diluted GAAP earnings per share of $0.97 and fully diluted operating earnings per share of $0.96. GAAP earnings per share were up $0.17, or 21.3% over the Q4 of 2021, while operating earnings per share were up $0.15 or 18.5% over the same period. The improvement in operating results was largely driven by a significant improvement in the company's net interest income and a decrease in weighted average shares outstanding between the periods, offset in part by a small decrease in non-interest revenues and increases in operating expenses, the provision for credit losses and income taxes. On a full year basis, fully diluted GAAP earnings per share were down $0.02 per share or less than 1%, while operating earnings per share were up $0.09 or 2.6% despite a $23.6 million or $0.34 per share increase in the provision for credit losses and a $15.4 million or $0.22 per share decrease in PPP-related revenues. Adjusted pre-tax, pre-provision net revenue or adjusted PPNR per share, which excludes from net income the provision for credit losses, acquisition-related expenses, other non-operating revenues and expenses, and income taxes, was $1.29 in the Q4 of 2022, up $0.20 or 18.3% over the prior year's Q4. Adjusted PPNR per share was also up $0.04 or 3.2% over the linked Q3 result of $1.25. On a full year basis, adjusted pre-tax, pre-provision net revenue was up $0.50 or 11.7% from $4.28 in 2021 to $4.78 in 2022. The company recorded total revenues of $175.9 million in the Q4 of 2022. This was up $16.3 million or 10.2% over the prior year's Q4 and established a new quarterly record for the company. Net Interest Income increased $16.5 million or 17.2% over the prior year's Q4 due to market interest related tailwinds, strong loan growth and investment security purchases between the periods, while non-interest revenues decreased $0.2 million to 0.4%. The company's average interest earning assets increased $905.5 million or 6.5%, while the tax equivalent net interest margin increased 28 basis points from 2.74% in the Q4 of 2021 to 3.02% in the Q4 of 2022. Net interest income was also up $1.8 million or 1.7% over the linked Q3 results, while the tax equivalent net interest margin decreased 1 basis point. Although interest expense was up $8.8 million over the prior year's Q4, the company's average cost of funds was up just 24 basis points from 9 basis points in the Q4 of 2021 to 33 basis points in the Q4 of 2022. Given a 425 basis point cycle-to-date increase in the federal funds rate, this represents a total funding beta of 6%. Similarly, the company's average cost of deposits for the quarter remained low at 18 basis points, representing a cycle-to-date deposit beta of 2%. The $0.2 million, 0.4% decrease in non-interest revenues between the comparable annual quarters was driven by a $2.6 million or 5.6% decrease in the financial services business revenues offset in part by a $2.4 million or 14.5% increase in banking non-interest revenues. Despite organic customer growth in 2022, employee benefit services revenues were down $1.4 million or 4.5% due to a decrease in asset-based employee benefit trust and custodial fees. Wealth management insurance services revenues were down $1.2 million or 7.5% due to primarily to challenging investment market conditions. The increase in banking non-interest revenues was driven by an increase in deposit service fees. The company reported $2.8 million in the provision for credit losses in the Q4 reflective of strong loan growth and a weaker economic forecast. This compares to a $2.2 million provision for credit losses recorded in the Q4 of 2021. On a full year basis, the company reported $14.8 million in the provision for credit losses reflective of $1.44 billion of loan growth in 2022, the Elmira Savings Bank acquisition and weaker economic forecast. By comparison, the company reported an $8.8 million net benefit in the provision for credit losses in 2021 due to an improving economic outlook as the country rebounded from the pandemic. The company reported $105.9 million in total operating expenses in the Q4 of 2022, compared to $100.9 million of total operating expenses in the prior year's Q4. The $4.9 million or 4.9% increase in operating expenses was driven by increases in salaries and employee benefits, data processing and communication expenses, occupancy and equipment expenses, and other expenses offset in part by lower acquisition related expenses. The $1 million, 1.6% increase in salaries and employee benefits expenses driven by increases in merit-related employee wages, acquisition related additions to staff, and higher payroll taxes, offset in part by lower incentive compensation and employee benefit related expenses. The $0.8 million, 5.9% increase in data processing communication expenses was due to the company's continued investment in customer facing and back office digital technologies between the comparable periods. Occupancy and equipment expense increased $0.9 million or 8.9% due to inflationary pressures, the Elmira acquisition in the Q2 of 2022, offset in part by branch consolidation activities between the periods. Other expenses were up $3.4 million or 31.7% due to the acquisitions and general increase in the level of business activities between the periods, including business development, marketing expenses, and travel related expenses. In comparison, the company reported $108.2 million of total operating expenses in the Q3 of 2022. The $2.3 million, 2.2% sequential decrease in quarterly operating expenses was largely attributable to a $2.1 million decrease in salaries and employee benefits. The effective tax rate for the Q4 of 2022 was 22%. The company's average earnings and assets increased $905.5 million or 6.5% over the prior year from $13.96 billion in the Q4 of 2021 to $14.87 billion in the Q4 of 2022. This included a $1.29 billion or 26.5% increase in the average book value of the investment securities and a $1.41 billion or 19.3% increase in average loans outstanding, partially offset by a $1.79 billion decrease in average cash equivalents. Average deposit balances were up $348.4 million or 2.7% over the same period, which included $522.3 million of deposits acquired in the Elmira acquisition. On a linked quarter basis, average earning assets increased to $254.6 million or 1.7%, while average deposits decreased to $154.4 million or 1.2%. Ending loans increased to $165.8 million or 3.1% during the Q4 and $1.44 billion or 19.5% over the prior 12-month period. Exclusive of $437 million of loans acquired in connection with the Q2 acquisition of Elmira, ending loans outstanding increased to $998.7 million or 13.5% over the prior 12-month period. During the Q4, the company originated over $560 million of new loans at a weighted average rate of just under 6%. Comparatively, the book yield on the company's loan portfolio was 4.39% during the Q4. Asset quality remained strong in the Q4. At December 31, 2022, non-performing loans were $33.4 million, or 0.38% of total loans outstanding. This compares to $32.5 million or 0.38% of total loans outstanding at the end of the linked quarter of 2022, and $45.5 million or 0.62% of total loans outstanding one year earlier. The decrease in non-performing loans as compared to the prior year's Q4 was primarily due to the reclassification of certain pandemic-infected hotel loans from non-accrual status back to accruing status. Loans 30 to 89 days delinquent were 0.51% of total loans outstanding at December 31st, 2022, up from 33 basis points at the end of the Q3 of 2022 and 38 basis points one year earlier. The company recorded $3.3 million or 4 basis points annualized of net charge-offs during 2022. The company's regulatory capital ratios remained strong in the Q4. The company's tier one leverage ratio was 8.79%, which significantly exceeded the well-capitalized regulatory standard of 5%. In addition, the company's net tangible equity and net tangible assets ratio increased 56 basis points during the quarter from 4.08% at the end of the Q3 to 4.64% at the end of the Q4. During the Q4, the company reclassified certain U.S. Treasury securities with a book value of $1.42 billion and a market value of $1.08 billion from its available-for-sale investment securities portfolio to its held to maturity investment securities portfolio. While the reclassification had no economic earnings or regulatory impact, enables the company to more effectively manage overall capital levels if interest rates rise above year-end levels in the coming quarters. The company continues to maintain a strong liquidity profile. The combination of the company's cash and cash equivalents, borrowing capacity at the Federal Reserve Bank, borrowing availability at the Federal Home Loan Bank, and unpledged investment securities provide the company with approximately $4.9 billion of immediately available source liquidity at the end of the Q4. The company's loan to deposit ratio at the end of the Q4 was 67.7%, providing future opportunity to migrate lower yield investment security balances into higher yield loans. During 2023, the company anticipates receiving over $600 million of investment security principal cash flows to support its funding needs. Looking forward, we are encouraged by the momentum in our business. The company generates strong organic loan growth over the prior six quarters. Asset quality remains solid and the loan pipeline is robust. New business opportunities in the financial services businesses remain strong. In 2023, we'll remain focused on new loan generation, managing the company's funding strategies in a rapidly changing interest rate environment while continuing to pursue accretive low risk and strategically valuable merger and acquisition opportunities. Thank you. I'll turn it back to Joe to open the line for questions. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw a question, please press star then two. At this time, we will pause just momentarily to assemble our roster. And our first question here will come from Alex Twerdahl with Piper Sandler. Please go ahead. Hey, good morning, guys. Morning, Alex. First off, just wanted to ask about, you know, what you guys are seeing, you know, or maybe expect to see over the next couple of months with respect to deposits. I know the Q1 typically sees some inflows from municipal deposits. I'm just curious if you're expecting similar levels to what we saw last year and kind of if you have any sort of line of sight onto other expected deposit flows, so we can sort of manage expectations for that relative to borrowings and loan growth, etc. Sure. Alex, it's Dimitar. You're right. Typically in the Q1 we get some seasonal inflows in our deposit base. It's usually a couple hundred million dollars. With that said, I think we're kind of in an unprecedented time on the funding side. We started seeing that kind of late in the summer, early in the Q4. It's accelerated, I think, for everybody in the industry. When you're against the Federal Reserve with an infinite balance sheet who's decided to take out liquidity, you know, we all got to take notice of that. With that said, I think I'm not sure we're going to be netting up in the Q1. We hope we will, we're putting in place other strategies to make sure that we are able to manage our funding. As we sit here today, I would personally probably bet on closer to flat than up, in terms of our deposit base. Okay. You know, within the deposit base, you know, last tightening cycle, you guys did a spectacular job keeping your cost of deposits lower. I'm just curious if there's a change in customer mentality just given how quickly rates have risen. I think, you know, certainly many of us have noticed it and are doing it in our personal accounts. I'm just curious if, you know, how we should think about the deposit costs and sort of the customer behavior that you guys are seeing, you know, over the next couple of quarters. Alex, this is Joe. I would just say that, you know, when you look at the composition of our deposit base, about 75% of our deposit base is in, deposits that are not typically rate sensitive. That's not to suggest that, you know, some of those funds could not be drawn out into, you know, higher yielding type assets. You know, relative to the rest of the industry, I think that our, you know, our deposit base is very core. You know, but there's kind of a larger sort of picture here with respect to what Dimitar referenced on, you know, on the Fed and, you know, what's happening to the money supply. Generally speaking, I think, you know, we'll outperform. Yes, I would expect that our, you know, funding beta will increase over the, you know, the next couple of quarters. You know, there's always a bit of a delay between, you know, the Fed changes and then ultimately, you know, changes in the, in the funding costs for, you know, for financial institutions, including us. Some of the rate moves that the Fed made, you know, were in the Q4. You know, those fully haven't been fully baked into, you know, all of the, you know, the financial institution's cost of funds. I think there will be some increase in the, in the funding beta over the, over the coming quarters. Got it. The only- Sorry, go on. Alex, no, it's Mark. The only thing I would add, just as it relates to funding overall, in the Q1 to H1 of the year, we'll have $400 million-$500 million of the securities portfolio maturing at fairly low yields, which we will likely use to pay down our overnight borrowings with a probably 300 basis point delta on cost. Just so, you know, that's reasonably significant in the context of what the funding side of our balance sheet will look like headed here over the next two quarters. Okay. Then I think in your prepared remarks, Mark, or maybe it was Joe, you talked about managing the company's funding strategies. Is that what you're referring to, just the $600 million of securities that are coming due? Yeah, I think there's two pieces, which is that, the maturing securities, but also just generally, trying to be strategic in terms of, you know, identifying markets where, you know, where we could pick up deposits. It's really deposit strategies. You know, we've got $5 billion of securities. Are there any strategies around that which makes sense for us to think about? There's a number of elements to our thought process around funding strategies here which, we're thinking about. Okay. Just the other question that I had is, you know, you guys talked about deteriorating economic or macroeconomic outlook, yet the ACL dropped by 2 basis points. I was hoping maybe you could just put that into context and explain the moving parts of the ACL and why it actually declined given the commentary that the macro outlook is deteriorating. Yeah. Alex, this is Joe. I can take that question. There's a couple of components in our CECL model. One is kind of the loss history, the other is the economic outlook, which, you know, we refer to in the press release. The third piece is also what's been trending internally in terms of non-performing assets, and, you know, classified and criticized assets and delinquency. We tend to look at a kind of a four-quarter trailing average on those non-economic qualitative factors, simply to, you know, to smooth out, if you will, any sort of seasonal aspects around the portfolio. Effectively, as we roll the quarter forward, you know, those, you know, four-quarter trailing metrics improved. You know, we dropped, effectively the, you know, the Q4 of 2021, where there were a little higher NPAs and you know, risk ratings were a little bit higher on the classified and criticized, and effectively that improved. That was the offset to the, you know, the economic outlook. Thank you for taking my questions. Thanks, Alex. Okay. Our next question will come from Manuel Navas with D.A. Davidson. Please go ahead. Good morning, gentlemen. My name is Mokshith filling in for Manuel. I have a few questions to ask. What are your loan growth expectations for next year? In terms of mix, would it be more commercial weighted? Just wanted some color on that. It's Dimitar. I think we've been talking about mid-single digit growth rate for our business, you know, kind of on a go-forward basis, which is higher for us than historical averages because of all the investments and the retooling of the company in a way. Clearly it's going to be a slower economic environment. That is the expectation at least. Maybe we're a tad below mid-single digits rather than a tad up. We're still kind of in that probably 4%-6% range expectation in terms of loan growth. You know, as it relates to mix, right now the commercial pipeline is pretty good. You know, the car business is doing well. Mortgage is slowing down the same way with everybody else. you know, if we've been kind of running at a 50/50 mix in general. maybe it's a little bit more commercial this year. that's a very early guess, you know, it could easily be kind of 50/50. Yep. Thank you for that. In terms of NIM trajectory near term, given there's pressures on funding, what's your outlook, going forward? We did flatten a bit in Q4 versus Q3. However, the net interest income did increase, which is kind of in line with our, you know, with our expectations, you know, when we talked on the Q3 conference call. However, as we look forward, I think in the Q1, you could see potentially us go a bit backwards in terms of the NIM, just because of the increase in funding costs. On NII, we potentially go backwards. We lose effectively two days of net interest income, you know, on a short quarter in the Q1. With that said, as Mark was referring to in the, you know, in the Q2, we start to see some significant cash flows off the securities portfolio. The expectation then we would also typically have some seasonal loan growth, you know, kicking in the Q2. Based on what we can see now, assuming, you know, funding is somewhat stabilized, we would expect some expansion and, you know, kind of through the Q2 and Q3 of next year. Obviously the Q4 is a ways out, but the expectations are we'd see increasing net interest income, kind of in the back half of the year. Thanks for that. One last question and then I'll hand it over. You talked about the securities books. What is the duration of the security books at the end of the quarter? Does that timeframe correlate with the recapture of AOCI? Yeah. The, the duration is just under seven years on a combined basis when you look at the total, securities portfolio, which is kind of in line with where it was, when we talked about it in the, in the prior quarter. What was the I'm sorry, the second part of the question? Does that timeframe correlate with the recapture of AOCI? Yeah, to an extent, if I'm following the question. In effect, what we did when we reclassified the securities, the roughly $1 billion in market value of securities into HTM is really to reduce volatility, if you will, around our, you know, tangible equity and tangible book value. You know, we also have about $1.3 billion in municipal deposits that require pledging, you know, require securities. So, you know, we're effectively required to hold securities for a long period of time to secure those deposits. In effect, the amounts that we reclassify are similar to the amounts that we typically carry in our municipal securities. Yeah. Maybe if it's helpful just to add to that, the duration of the AFS portfolio today is just about five years, which is what we're going to predominantly use for our balance sheet remixing going forward as we transition from securities into loans. We've got those five-year duration cash flows and I believe about $4 billion of securities in that bucket. Okay. Thank you for that. Our next question will come from Matthew Breese with Stephens. Please go ahead. Good morning. Morning, Matt. Morning, Matt. I wanted to continue on the securities discussion. you'd mentioned that you expect, I think, $400 million-$500 million of securities maturing in the H1 of the year. What does that schedule look like for the back half of the year? Could you give us some frame of reference for on that mix shift, over the next, call it, you know, 12-24 months where you want to bring that securities portfolio down to as a percentage of assets? Well, Matt, this is Joe. The expectations for the full year on the securities is about $600 million. We just happen to have a significant amount of that, about $350 million or so coming off kind of in the middle of the Q2, $400 million in the H1 of the year. The total is about $600 million in, you know, in the full year. I think over time, you know, we certainly would like to see our transition from a securities largely, you know, securities concentrated average or earning assets base to one of loans. You know, I think we now have the organic, you know, growth components that we need. We tooled up. Over time, we'd like to see that roughly $5 billion portfolio to move down on a relative basis to move down. We'd like to see a loan to deposit ratio that trends up. You know, right now at, I think it's about 67%, you know, ideally we'd be more balanced at 75%-80% loan to deposit ratio. I think that will just trend over time, and you'll see kind of on a relative basis the securities book drop. Okay. Understood. How much of the securities portfolio is unencumbered or tied to municipal deposits where you have to keep some portion in securities? Yes. Just bear with me one second, Matt. I have those numbers here. Yes, I think I do. Would you like me to go on while you look for that? Go ahead, Matt. I actually have those available. Just need to dig them out. Perfect. Just would love a sense for indirect auto. Obviously there's a lot of, you know, just inbound questions and scuttle around, you know, deteriorating consumer health. Could you just remind us of FICOs there and whether or not you're seeing any sort of deterioration underneath the hood? Pardon the pun. Sure. Matt, this is Dimitar. Our portfolio on the car business is average FICO of 750, roughly. That's where the originations continue to be. You know, we're writing business now kind of in the 7% range on a gross basis, that's kind of six net. It's still pretty good business. We have seen in terms of credit, normalization, I would call it. Still I would call it normalization towards the lower end of the historical averages. We've been averaging losses there kind of between 25 and 35 basis points. Historically, we're kind of right about the lower end of that. You know, again, the FICOs are very strong, debt to income of the portfolio and new originations is 27%. We feel pretty good about the credit profile. I think as we've disclosed previously, 80% is used cars. You know, our loan to values are less than the average for the industry. You know, we write based on the actual dealer invoice, not based on, you know, the inflated sometimes markups that we've seen over the past couple of years. We feel pretty good about that. Are we going to normalize a little bit more towards the midpoint of the 25, 35 basis points in losses? Probably. Is it still great business at the rates we're writing it? Yes, it is. That's kind of how we look at it right now. Okay. Understood. Thank you. Next one was just in regards to fee income. Joe, I'm sorry, Mark, I think you had mentioned that, there's some new business opportunities within financial services. I was curious, you know, wholesale, just kind of thoughts on fee income in 2023, more specific commentary on employee benefits, wealth insurance, and then for those opportunities, just curious what you meant in terms of, you know, or is there a more robust pipeline in terms of deals or organic opportunities that you could talk about? Yeah. I'll just kind of briefly let Dimitar jump into it further. You know, if you look at the summary financial results, it doesn't look like those businesses had a tremendous year, with the exception of insurance, as I said, that was up 17% in revenues. The wealth business was down a little bit against a, you know, market that's down almost 20. The benefits business, which is half levered to the market, as I said, was up even though the market was down 20. The organic performance of those businesses in 2022 might have been the best year we've ever had. They all grew organically and some of them grew a lot. It got, you know, clouded by the market because they're on different levels levered to the market. There's a lot of momentum in those businesses right now, which I think is going to continue. I'll let Dimitar provide any further commentary he might want to add to that. No, I think that's pretty good summary. I would just say if you kind of think about historical growth rates in those businesses in the high single digits, if the market recovers, we feel very confident we're going to get there. If the market kind of stays where it is, we think we're still going to have a pretty decent year. It may not be high single digits, but low to mid single digits is definitely achievable. Because again, we put on a lot of new units, and clients, especially in the H2 of the year. We did not get the benefit of most of those. We feel pretty good about the outlook, you know, barring the market going down another 20%. Got it. Matt, this is Joe. With respect to your prior question about unpledged securities, it's about $3.2 billion at the end of the year. We also have, you know, a blanket availability at the Federal Home Loan Bank that's secured by our mortgage portfolio, which is about another $1.1 billion. We also have some securities pledged at the FRB, which creates another, you know, $500 million. That's how we get to kind of $4.9 billion, but $3.2 billion of which is the unpledged securities. Got it. Okay. Last one was, you know, I saw this the calculated tangible book value in the earnings release, a bit higher. The one component I don't have is the deferred tax liability. I was curious what that updated balance was and if there was any meaningful change quarter-over-quarter. I'll break it down at the end of the year, Matt. You know, on a book value basis, the available-for-sale securities portfolio, about $4.7 billion. About $500 million of market value adjustment for about, you know, $4.2 is kind of the carrying value. The held to maturity portfolio about $1.1 billion. At the time we did the transfer, excuse me, the, you know, book value was about $1.42 billion. There's about $340 million effectively in gross market value adjustment on that held to maturity portfolio. About 24%-25% of that is effectively in a deferred tax asset of about $80 million. Leaving behind effectively net AOCI of about $250 million. Got it. Okay. That's all I had. Thank you so much. Thank you. Our next question will come from Chris O'Connell with KBW. Please go ahead. Hey, good morning. Good morning, Chris. I may have missed it in the opening comments, but, was there any commentary regarding the overall expense outlook for 2023? I guess if not, can you guys talk a little bit about that? Chris, This is Joe. We've had a history of kind of low single digits, you know, call it 3% on operating expense increases year-over-year. Obviously the market has changed. There's been, you know, stronger kind of, you know, call it wage related inflation and other inflationary elements that, you know, do make their way into, you know, into our expense base or operating expense base. You know, we kind of think that mid-single digits is a more realistic expectation, excluding acquisitions on a going forward basis, just because of those kind of, you know, wage and other sort of inflationary pressures. With that said, you know, Mark alluded to in his comments all of the, call it back office type, efficiencies that we're investing in. That will take a while for that to really get the efficiencies, from all of those, you know, automation activities in the back office. You know, on a more of a kind of shorter term basis, we think mid-single digits. But our efforts here are to kind of control those operating expenses on a longer term basis through automation and efficiency. Got it. That's helpful. Circling back to some of the deposit discussion from earlier, I think if I read your commentary right, you know, near term expectations, you know, were for deposits to remain, you know, somewhat flat versus up. Is that inclusive of the muni flows, or do you expect kind of X, you know, the municipal deposit, you know, fluctuations that there could still be, you know, some downward pressure in the near term on the overall deposits? Yeah, Chris, it's Dimitar. I think we would expect in the Q1 to be net up on municipal deposits and net down on personal deposits, and commercial deposits. Where that ultimately ends up on a net basis is a guess. Funding is the biggest question for everybody this year. We don't know. We're planning for certainly lower than historical experience on the deposit side, probably lower than some of our bottom quartile experience, frankly, if you look over 10 years, where we've been. With that in mind, hence the comment that historically we would have been up in the Q1 and this quarter we're, you know, unlikely to be up, as we sit here today. Great. That's all I had for now. Thanks for taking my questions. Thank you, Chris. Again, if you have a question, you may press star then one to join the queue. Our next question here will come from Erik Zwick with The Hovde Group. Please go ahead. Thank you. Good morning, guys. Morning, Erik. Good morning. Just one more topic here on my list that wasn't discussed in earlier questions or comments. Just looking at the tax rate. If my notes are right from last year, about a year ago, you were expecting a tax rate of kind of 22.5%-23.5%. It looks like you came in below that this year. One first question, just curious if you utilized any kind of tax strategies throughout the year that brought that in lower or if the mix of revenue was just different. The second part of the question would be, you know, what's a good expectation for 2023 at this point? Yeah. Or excuse me, Erik. With respect to, you know, on a going forward basis, you know, I still think that, you know, ±0.5 points around 22 is probably a reasonable, you know, expectation as we, as we look ahead. You know, we do occasionally buy tax credits and other items that, you know, that are helpful for the overall rate. You know, we do have a municipal securities book, municipal loans that, you know, keep the effective tax rate down a bit. I wouldn't expect much change over, you know, 2023, or really into the future over our current tax rate unless there's a change in the tax code. Great. Thanks, I appreciate it. That's all for me. Thank you. With no remaining questions, this will conclude our question and answer session. I'd like to turn the conference back over to Mr. Tryniski for any closing remarks. Thank you, Joe. Thanks, everyone for joining the call. We will talk to you again after the end of the Q1. Thank you. The conference is now concluded. Thank you very much for attending today's presentation. You may now disconnect your line.