Hello everybody, and a warm Welcome to the SouthState Corporation fourth quarter earnings call. My name is Melissa, and I'll be your operator. If you would like to ask any questions on today's call, that will be star followed by one on your telephone keypad. If you change your mind, that will be star followed by two. I now have the pleasure of handing over to our host today, Will Matthews to begin. Will, over to you. Good morning and Welcome to SouthState's fourth quarter 2021 earnings call. This is Will Matthews, and joining me on this call are Robert Hill, John Corbett and Steve Young. Doug Williams and Pat Oakes of Atlantic Capital are also joining us to provide some color on their quarter. The format for this call will be that we will provide prepared remarks and we will then open it up for questions. Yesterday evening, both companies issued press releases to announce earnings for Q4 2021. We've also posted presentation slides that we will refer to on today's call on our investor relations website. Before we begin our remarks, I want to remind you that comments we make may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements we may make are subject to the safe harbor rules. Please review the forward-looking disclaimer and safe harbor language in the press release and presentation for more information about risks and uncertainties which may affect us. Now I will turn the call over to Robert Hill, Executive Chairman. Thank you, Will, and good morning and thank you for joining our call today to discuss the fourth quarter of 2021. This was a year of transition for the company and one where we moved past integration and quickly moved toward execution. I've always felt that the best sign of how a merger was progressing was how quickly the company returned to growing its customer base post-integration. Our team moved into growth mode almost immediately, and you can certainly see the momentum building in the company. We're adding customers, adding talented bankers, and seeing excellent opportunities to grow market share in great markets. We are making progress in each of our guiding principles, soundness, profitability and growth. Our balance sheet remains very strong and growing, and this strength will help us achieve the profitability potential of the bank. 2022 is a year of internal focus and a year where I believe we will make significant further progress in all three areas. I'll now turn the call over to John. Thanks, Robert. Good morning, everybody. I hope you and your families are doing well. As we reflect on 2021, it was a challenging year in many ways, but I'm proud of the way our team prevailed and successfully completed the largest conversion in our history last summer. As soon as the conversion was complete, our bankers turned on the growth. We continue to see a lot of positive momentum in the Southeast as we accelerate out of this pandemic cycle. If we step back and look at loans and deposits this past year in 2021, we originated roughly $10 billion in new loans. To put that in perspective, we originated about $7 billion in 2019 before the pandemic and about $6.5 billion in 2020. 2021 saw 40%-50% higher lending volume than the past two years. We saw that trend accelerate in the fourth quarter as loan originations increased another 19% from third quarter levels to a new record of $3.1 billion. That level of loan production resulted in 7% annualized loan growth in the fourth quarter, compared to 10% loan growth in the third quarter. After the vaccines rolled out last spring, we guided to mid-single digit loan growth in the back half of 2021, and we wound up at 8.5%, so a little better than our guidance. The excess liquidity from the Fed's monetary policy continues to flow onto our balance sheet. Deposits were up 18% in the fourth quarter, even as we drove our deposit costs down to just 6 basis points. The excess liquidity in the system continues to lead to elevated loan payoffs. Many of our clients have wisely sold their operating businesses at high valuations or sold commercial real estate to lock in a gain from historically low cap rates. A few weeks ago, the Census Bureau released the latest population migration trends for 2021, and the conclusion is clear, the South won the population battle during the pandemic. The Northeast, the Midwest and the West all lost population and the South gained 786,000 people. Not surprising, the SouthState footprint is in the fastest-growing markets in the country. Florida ranked number two for population growth behind Texas, followed by Georgia, North Carolina and South Carolina, placing SouthState in four of the six fastest-growing states in America. That population growth is driving strong housing demand as well as demand for new construction and really all housing related products, including furniture, appliances and building materials. I'll give you a quick update on Atlantic Capital. Doug is here to comment on the fourth quarter for Atlantic Capital. They continue to deliver outstanding results with 22% annualized loan growth in the fourth quarter. We've now received approvals from both the OCC and from the Atlantic Capital shareholders. We're like many acquirers, we're just waiting for Federal Reserve approval. We're hopeful for a close in the next couple months, but that is entirely subject to the Federal Reserve timing. As we move into 2022, we're excited about our momentum. We've been intentionally patient about deploying our excess cash. Cash now makes up 15% of our balance sheet. With an improving economy and accelerating loan growth, we have a real opportunity to deploy that excess cash into a higher rate environment and drive our revenue higher in 2022. I'll turn it over to Will, so he can give you additional color. Thanks, John. I'll cover some highlights on margin, non-interest income, and non-interest expense, as well as credit and the provision for credit losses. Slide 12 shows net interest margin trends. We had net interest income of $258 million in the quarter. The $245 million we reported excluding accretion was our best quarter ever for core net interest income and was up $6 million from the third quarter. Loan yields ex PPP were flat with Q3 levels. An incremental improvement in our cost of deposits to 6 basis points, combined with $508 million growth in average loans helped drive the growth in core net interest income. Although we deployed some cash into loans and securities, our dry powder remains extensive as noted on Slide 17. We ended the year with $6.4 billion in interest-bearing cash and Fed funds sold, up $700 million from the third quarter and up $2.1 billion from a year ago. Fourth quarter deposit growth was $1.5 billion, some of which we believe to be seasonal or temporary due to municipal tax collections or asset and business sales by clients. We estimate the more temporary deposit balance growth to be approximately half of the quarter's growth. Non-interest income improved approximately $5 million from the prior quarter, with a record quarter for our correspondent division and improvement in service charge income somewhat offset by a decline in our mortgage revenue. As noted on slide 14, mortgage had a strong quarter of production of almost $1.4 billion, but a tightening of margins and a $156 million decline in the pipeline led to a decline in revenue. Service charge income increased from Q3 due to the ending of waivers and fourth quarter seasonality. Operating NIE was up $2.7 million from Q3 due to a number of factors, one of which was the loan growth incentive kickers being triggered in the back half of the year. Various other expense categories were slightly higher as noted in the release. Turning to credit, our asset quality metrics continue to be very strong as noted on slide 26. We had another quarter of net loan recoveries before DDA charge-offs, with total net charge-offs of 2 basis points. We recorded a $9 million negative provision for credit losses in the quarter. Given the changing nature of forecasts for fiscal stimulus and the impacts of Omicron, we weighted Moody's S3 scenario 45% and the baseline scenario of 55%, a slightly more conservative weighting than for Q3. Ending reserves were 1.27% of loans or 1.4%, including the reserve for unfunded commitments as noted on slide 31. On the capital front, we repurchased approximately 632,000 shares in the fourth quarter, bringing the 2021 full year total to 1.82 million shares or approximately 2.6% of the company. Our 2021 capital return, including dividends, was approximately $282 million as outlined on slide 22. This represented a total payout ratio, dividends and repurchases of approximately 52% of adjusted earnings and approximately 59% of reported earnings. Ending capital levels remain strong, with CET1 close to 12% and ending tangible book value per share was $44.62. I'll now turn it over to Doug to give a few highlights on Atlantic Capital's quarter. Thank you, Will, and good morning. I'm pleased to have this opportunity to share Atlantic Capital's fourth quarter results with you. As you know, we filed our earnings release and investor presentation last night, and those are available on our website. I'd like to thank my Atlantic Capital teammates for another great quarter and for a great year. Despite pandemic-related uncertainties and the distractions of merger integration planning, they remain focused on helping our clients pursue opportunities and meet challenges. Our clients are performing well and continue to make investments for the future. Those investments are driving our new business pipelines and resulting loan growth. With strong growth in loans, deposits, and revenue, Atlantic Capital recorded another quarter of solid operating results. As we reported, Atlantic Capital earned $0.57 per diluted share for the fourth quarter of 2021 compared to $0.65 in the third quarter. Excluding merger-related expense, earnings per share were $0.59. For the full year, we earned $2.45 per diluted share. That figure, excluding merger-related expense, was $2.60. Pre-provision net revenue for the quarter was $14.3 million or $15.1 million excluding merger expense. Loans held for investment excluding PPP loans grew 22% annualized from the third quarter and 14% for the full year. Loan origination volume was strong across all of our banking teams, and net loan growth was particularly strong in the commercial and industrial and commercial owner-occupied real estate categories. Since Atlantic Capital became a public company six years ago, these commercial loan categories have grown at a compound average growth rate of more than 13%. Credit quality is excellent. Net charge-offs for the quarter were 11 basis points of loans. For the full year, net charge-offs were 6 basis points. Nonperforming assets as percent of total assets was 0.11% at quarter end, and classified loans as percent of total loans was 1.5% compared to 3.25% at the end of 2020. As you've seen, we recorded a negative provision of $731,000 for the quarter compared to $2.4 million last quarter. The allowance for credit losses, including PPP loans, was 106 basis points at quarter end. With sharp focus on corporate treasury management business for Atlanta-based enterprises and for high volume payments and fintech companies across the country, Atlantic Capital has built a strong core deposit franchise. Since we became a public company six years ago, average total deposits have grown more than 20% compounded annually, and average demand deposits have grown at a 30% compound average growth rate. Payment's volumes, service charges, and average deposits in the payments and fintech business grew more than 40% annualized during the quarter. For the fourth quarter, average non-interest-bearing deposits increased 33% annualized on a linked quarter basis and grew 52% year-over-year. Non-interest-bearing demand deposits averaged more than 44% of average total deposits. The average cost of all deposits was 7 basis points. As we look ahead to our pending merger with SouthState, our new business pipelines are robust, and we expect continued strong momentum in loan, deposits, and revenue growth. I'll be available to answer your questions during the Q&A portion of our call this morning. Now back to John. All right. Thanks, Doug. All the pieces are starting to come together. The population growth in the Southeast, the growth in loans at both Atlantic Capital and SouthState, and a lot of dry powder in the form of excess cash to invest into a rising rate environment. Operator, please go ahead and open the line for questions. Thank you. If you would like to ask a question, that will be star followed by one on your telephone keypads. If you change your mind, that will be star followed by two. Please ensure that you are unmuted locally when you go to ask your question. We'll take our first question today from Stephen Scouten of Piper Sandler. Good morning, everyone. How you doing? Good morning. Yes, can you hear me? Okay, great. We can. Can you hear us? I'm going to ask first. Yeah, I can. Can you hear me? Yes, sir. Can you guys hear me? Okay, sorry about that. Yes, we can. I'm curious first. I know you spoke to, you'd been patient about excess cash, and I think, you know, Steve had kind of laid out some targets in terms of liquidity deployment expectations last quarter, maybe the quarter previous as well. I'm wondering if you could give us an update there just in terms of how you're thinking about the pace of deployment, with where rates have moved to now and where they look to be going. Sure, Stephen. It's Steve. I think what we've guided to over the last several quarters is that our investment securities assets would be somewhere between 16%-18% by the end of the year. I think right now we're around 17%. You know, as we think about the future, you know, we've got all this excess powder on the balance sheet, and, you know, today our loans to deposit ratio with and really without ACBI is 68%. As we think about the next 24 months, you know, our goal is to take this loans to deposit ratio from 68%, you know, closer to 80% in the next two years. If we can do that'll spend a fair amount of the excess liquidity. Having said that, there's still probably $3 million that's still dry after all that. As we integrate Atlantic Capital into the mix and their investment portfolio, we'll probably have better guidance as we think about that next quarter, once we get the close there. Right now, there's really no change in that guidance. Just from a big picture perspective, 68% loans to deposit ratio going toward 80%. In the middle of that, we'll put the securities portfolio together and look at reinvesting it if it's opportunistic. Okay, that's helpful. Can you give any color as to where you think expenses are going to go here in 2022, maybe pre–Atlantic Capital? I know that kind of clouds the overall numbers, but on a core basis, can you talk about where you think expense growth will be and kind of what the drivers of that will be in terms of maybe it's new hires, maybe it's just inflation and kind of how we can think about that? Sure, Stephen, it's Will. You know, the fourth quarter NIE at legacy SouthState was up a bit from the third quarter. You know, there's a few items that we noted in there in the release. You know, as I mentioned, I think in our third quarter call, our goal for 2022 is to try to hold the inflation in NIE to low single digits. That's certainly our plan and our budget. We do recognize there's an inflationary environment that we're all subject to, and that's, you know, we have to compete in the market, but that would be our plan. If you look at the Q4 run rate, up a bit from Q3, you know, something in that general range, where we were in Q4 to maybe a little bit higher is sort of how we see things shaping up in 2022. Again, we'll have to compete with market forces, you know, and react accordingly. That's our plan right now. Okay, great. Well, I'll let somebody else jump on. Thanks for the color, yeah. Thank you, Stephen. We'll now move over to Michael Rose of Raymond James. Michael, please go ahead. Hey, good morning, guys. Thanks for taking my questions. Just wanna talk about slide 13. I think it's really compelling, you know, the fact that the origination volumes have been up so, you know, nicely, you know, year on year. Obviously the pay downs have been an issue. You know, Doug's obviously grown at a really high rate as well. You know, when do you think the pay down slows? Is it as rates rise? You know, you talked about M&A activity and selling businesses and things like that. When can we expect, you know, to see a more robust pickup in net loan growth? Any commentary would be helpful. Thanks. Hey, Michael, it's John. Good morning. You know, for the back half of the year, we wound up at about 8.5% annualized loan growth. It was 10% in the third quarter, 7% this quarter. Yeah, to your point, it's kind of interesting, our loan production went up, but our net growth went down. We spent some time analyzing that. Sure enough, we looked at our big payoffs, and we had about $170 million more of large payoffs in the fourth quarter than we did in the third. You go down the list and its family businesses, multi-generational operating companies that sold. We had a lot of real estate investors that are selling CRE at these record low cap rates to get the gain. I do think that interest rates play a big, big part of this and the extra liquidity in the system. You know, we've kind of thought that at this level of loan production, we ought to be producing high single digits to 10%, if we could slow the prepayments down. I think as interest rates drift up, you're gonna have less prepayments on residential. As interest rates drift up, the cap rates are gonna move up on CRE, and those gains are gonna be less. There's probably gonna be less churn in the CRE portfolio. You know, I feel I'm real pleased with the level of production, and as you get a little less liquidity in the system, a little higher interest rates, it could very easily move into high single digits to 10% loan growth where we're at. Okay. That's very helpful. Thanks, John. Maybe just following up on slide 19, because I think this is also pretty compelling. I don't know if this is for Steve or Will, but if you can comment on some of the assumptions, you know, for that one-year change, which you know, was relatively unchanged from last quarter in terms of what that implies in terms of, you know, securities portfolio, deployment, deposit betas, you know, et cetera. You know, what the impact, you know, could potentially be based on initial purchase accounting marks and the like from the addition of ACBI. Thanks. Yeah, Michael, it's Steve. Maybe Will can follow up with anything I miss. You know, all this is doing is taking our balance sheet, as a point in time static balance sheet, so it's not growing it for securities or anything like that, and just shocking it for rates 100 basis points, across the curve. When you look at that number, what it does is it makes, you know, the net income of the bank goes up about 15%. Now, we all know it's not all gonna be 100 basis points on one day. This directionally just tells you know, as you incrementally move 25 basis points and what have you, that's how that would play out, per our model. You know, a couple things to note on that slide too is our floating rate loans are around 31%, on a daily basis. Then, you know, we have about another 20% that are variable. And the, you know, and a lot of that reprices in the first year at only 49% fixed. That drives some of it. You know, I kind of go back to what really is the asset sensitivity to our entire franchise. Obviously, we have a lot of cash sitting on the balance sheet today that we normally don't have. So, 15% of assets, that's obviously a driver. Number two, our floating rate loan portfolio is probably well within peers and pretty normal for our size. The piece that I think is probably the most important is just our deposit portfolio and the power of our franchise in a rate-up environment. You know, we have a slide in here that details out our deposits. You know, we have 59% of our deposits are in checking accounts versus 41% for our peers. That's just a significant advantage or change. You know, we have 816,000 checking accounts and 1.2 million total accounts. You know, in higher rates, that's when the betas stay lower than hopefully peers, and that's where you outperform. All of that is built into this model, but hopefully that helped answer your question. Yeah. Stephen, it's Will. I'll just elaborate a little bit on that. You know, the modeling we use does incorporate our historical deposit betas. As Steve just alluded to, you know, one thing that's a little bit different this time around is that we're entering this rising rate cycle with a much lower loan to deposit ratio. If you look back to the last one, I think we ended second or third quarter of 2019 with the loan to deposit ratio in the low to mid 90%, 93%, 94% or so. As Steve said, we're at 68% today, and that's not uncommon. The question will be, you know, how different are betas this time around, given all the liquidity on all of our competitors' balance sheets. You know, absent a big removal of all that liquidity in a very rapidly, one would expect that betas would be lower across the industry in this time around, and we'll see. Yeah, just to marry up one other thing, you know, I know we'll have 10-K disclosures that'll come out at some point, but you know, this is a net income disclosure, not a net interest income disclosure. Net interest income disclosure will be closer to 9%, but the net income disclosure is what we have here, which is probably the more pertinent one that you all care about. Helpful because I think that's up quarter-over-quarter, correct? Because I think the NII sensitivity in the last quarter was closer to 6%, and now you're saying 9% for NII. Well, it's 9% with a shock. A ramp was around 6%. That may be what you're thinking, Michael. I don't think it's changed that dramatically quarter-over-quarter. Under- No, it hasn't. Understood. Maybe just one final one for me. Steve, maybe if you can go into the increase in correspondent banking. You know, the core is a little bit more than we were expecting. Can you just talk about the puts and takes as we think about 2022? Thanks. Sure. Yeah, it was a really great quarter from the correspondent team. You know, kind of the driver of that this quarter was our interest rate swap business. I think this quarter was up about $7 million quarter to quarter. Actually, our fixed income business was down a couple million dollars. You know, it really comes back to, if you think about the environment, we were in in the fourth quarter, it was, you know, just like us, there was a lot of loan production that was going on. The yield curve was a little bit flatter in the fourth quarter before it steepened up in the first quarter. Those ingredients, along with just great loan production, you know, kind of caused the fourth quarter to be very strong and fixed income to be a little weaker, but ultimately up $5 million. Very happy about that. You know, as we think about you know, overall fee income, you know, our guidance hasn't changed for that in several quarters. I think we've laid it out as a percentage of assets. What we've said is on a standalone, SouthState would be, you know, 80-90 basis points on a standalone basis. With Atlantic Capital, you know, combined would be more like 75-85 basis points, non-interest income to assets. We don't really see that changing a whole lot, over the next, you know, the course of the next 12-24 months. I hope that's helpful. Very helpful. Thanks for taking all my questions. Thank you, Michael. Thank you, Michael. We'll now move over to our question from Jennifer Demba from Truist. Jennifer, please go ahead. Thanks. Good morning. Morning. Good morning. Question about your buyback appetite, at this point over the next several months. How are you thinking about that? Hey, Jennifer, it's John. You know, the board authorized a buyback of 5% of the company about a year ago, and we're a little more than halfway through that, 1.8 million shares out of the 3.5 million. We bought back 2.6% of the company. You know, our thinking is we're continuing to generate excess capital. We do not believe that we're going to be growing. There's no need to grow the balance sheet because we've got so much liquidity today. We think we'll continue to generate excess capital. We think that, as interest rates rise in the course of the next year or so, bank valuations will improve. We think it's a good time to put our capital to use in buybacks. We've been reasonably active the last two or three quarters. If the valuations stay close to where they are today, we probably continue to stay active the next couple quarters. Okay, great. What is your outlook on the correspondent banking area for the next year with higher rates? Yeah. Jennifer, it's Steve. You know, I think what we've said over the course of several quarters is that, you know, we'd be ranging between $24 million-$28 million. This quarter, we hit $30 million, which was you know really good quarter for us. I think the same guidance and kind of the same as what we've talked about, and I'll tell you why. You know, back to all of this excess liquidity in the banking system and all of our clients, they all have this excess liquidity. Some have more than others. They're going to do one of two things with it over the next 24 months, just like we are. They're either going to loan it or they're going to invest it. For us, we have the products to both sell them on the fixed income side if the yield curve gets steeper, or if the yield curve gets flatter, we'll probably do more interest rate swap business. There's a slide that we put out there on page 15, and it shows the last, I think, five quarters of fee income for the correspondent, and then we have 1,060 financial institution clients. You can see it's reasonably steady, but for different reasons. Sometimes the ARC revenues, which is our interest rate swap business, does better in the environment, and sometimes our fixed income does a little bit better. A lot of that really depends upon the yield curve and how that moves. I hope that's helpful. Okay. Thanks so much. All right, Jennifer. Thank you. Thank you, Jennifer. We'll take our next question from Catherine Mealor of KBW. Catherine, please go ahead. Thanks. Good morning. Morning. One more follow-up on fees. On just service charges, I was surprised to see the increase this quarter. I'm assuming some of that's just kind of a higher seasonal fourth quarter like we typically see. How do you think about the outlook for service charges and some changes we're seeing in overdraft fees in the industry? Why don't I take the quarter and then let John sort of take the outlook going forward. You're right, Catherine. There are really two components accounted for that roughly $40 million pickup. One of it is just seasonal card use, you know, Christmas shopping, et cetera, that occurred. The other bigger factor was we still had some waivers in place in the third quarter post conversion. You know, we did the conversion in the second quarter, kept some waivers out there. Fourth quarter, those had all expired, so we had none of those in the fourth quarter. The combination of those two items really led to the increased quarter-over-quarter. Yeah. As far as going forward, clearly the market is moving very quickly, Catherine, as it relates to overdraft fees and practices. I would just tell you that that's something we continually evaluate, we continue to make adjustments to, and we'll do that in the future. Generally, as you look at the service charge number, you know, it's hard because we haven't really seen a full kind of normal year of service charges with SouthState and CenterState combined, since, you know, the first time we saw that together was, you know, in the middle of COVID. Do you think we're still not at a full kind of operating run rate that truly shows the benefit of the merger? Is that fair? Or do you think there's still kind of headwinds and maybe this quarter's run rates may be kind of a more appropriate base? You know, Catherine, I'd say my impression is that the fourth quarter did have some seasonality. I know we have that most fourth quarters or I guess, as long as consumer behavior is where it is, that the fourth quarter is the first quarter where we didn't have any of the waivers. If you normalized for a little bit of seasonality, maybe the fourth quarter's run rate is a pretty good look with the, you know, of where we are, legacy SouthState. We don't have a good year of history to show you yet, obviously with the conversion occurring in the second quarter and then the waivers that we did. The fourth quarter, of course, having some seasonality. That makes sense. That makes sense. And then on loan yields, you know, that's actually stayed a little bit more stable than I was expecting. Any kind of color you can give on loan pricing and where you think that loan yield maybe bottoms before we kind of start to get the benefit of higher rates? Yeah, sure. Sure, Catherine. You know, this quarter, I think our loan yield for the portfolio, accretion, all of that was around 3.77%. Our going-in yield for loans was in the 3.13% range, I think for this quarter. You know, a lot of that, as you know, has to do with, you know, where you are out on the curve. You know, we had a fair amount of production and a fair amount of that we ended up swapping to floating rates just because, you know, we felt like, you know, maybe the Fed would probably start moving rates the same reason our clients did. You know, the way I think about that is, you know, if we can get, you know, rates to move up from a Fed funds LIBOR perspective, 31% of our portfolio, we should be bottoming out here in the next quarter or so. From there, we'll, you know, start increasing with the rest of the market. Great. Very helpful. Thank you. Thank you, Catherine. We're now going to move over to Christopher Marinac of Janney Montgomery. Christopher, over to you. Thank you, ma'am. Good morning. I wanted to ask about the accretion income relative to total NII. You know, Will, the slide you gave was very helpful, just as a reminder. Does that relationship change much with ACBI coming in or will it continue to decline these next two years? Yeah. Let me tell you maybe in components. You know, the PPP deferred fee accretion, that's essentially gone. I mean, we've got a little bit left on the balance sheet, but you know, that's you know, you can take that out of your models if you hadn't already, of course. I'd say our normalized run rate for the regular acquired accretion as we're today, you know, we think of that in the sort of the $5 million-$6 million range. This quarter is a little bit higher than that. You know, some of that's hard to predict, but that's sort of how I think about it. You know, we don't anticipate the accretion on the Atlantic Capital side, you know, dramatically changing our accretion. We don't think accretion will be a big part of the story post Atlantic Capital closing. Not a big number addition there in our modeling. Yeah. Chris, I'd just add that, you know, I think what we've said a couple of quarters ago then as we thought about 2022 was that our, you know, accretion income would be somewhere in that $5 million-$6 million range and after we got through PPP. I think it's the same, you know, that we've said for the last several quarters. Great, Steve. Thanks for that. Will, thank you as well. Just a quick follow-up on Doug and Pat from Atlantic Capital. The change in cash and deposits that we saw at period end, was any of that seasonal for them? Is that something that would come back this first half of the year? Chris, this is Doug. Some of it is seasonal. We see that every fourth quarter. There's also some strong organic growth in the midst of all that. I think they'll, you know, perhaps they'll be modestly lower in the first quarter of this year, but not significantly. Pat, would you? Yeah. Chris, if you look at the average deposit growth, right, it was pretty flat. Part of that was us driving down some deposit costs in particular products. That probably caused a decrease. If you carve that piece out, it was actually up for the quarter. Then the period end number, it just depends on the day of the week, especially with our payments business. You know, it was up significantly at 9:30 A.M. because it was a Thursday, and then at year-end it was down because of the day of the week was on a Friday. You really got to look at averages when you look at that. Got it. Thanks, folks. I appreciate that. That's helpful. Chris, you know, the mix is also continuing to change more toward non-interest-bearing DDA. Non-interest-bearing DDA was 44% on average in the fourth quarter. That was up from the third quarter. And those that category of deposits continues to grow at a very strong pace. Yeah. Good point, Doug. Thank you again. Thank you, Christopher. Before we move on to our final question, as a reminder, if you would still like to ask a question, that will be star followed by one on your telephone keypad, star followed by two if you change your mind. We'll now move over to Brody Preston of Stephens Inc. Brody, over to you. Hey, good morning, everyone. Hey, Brody. I wanted to ask just to follow up on the ARC revenues. I just wanted to clarify, was that all kind of like what you would consider operating, or were there any kind of mark-to-market gains within that, just because the $7 million quarter-over-quarter increase is relatively large? No, no. It was all, you know, organic. No mark to market in that. I mean, if you remember, I don't know if I've described it on this call or another, but you know in 2020 when the yield curve was flat, that business did $80 million in revenue for the year of 2020. This quarter at $17 million is a really good quarter, but not a record quarter by any means. But it's better than they've been over the last couple of quarters. Got it. That's helpful. Thank you. Just maybe one more on fees, just the mortgage production. It looks like y'all are continuing to balance sheet, you know, a relatively larger mix of the mortgage production than you have historically. I guess I wanted to ask, one, why? And then two, if the gain on sale margins are gonna track, you know, this level going forward, do you envision maintaining that mix of portfolio over secondary just given that the margins are starting to get a little slimmer? Yeah, Brody, this is Steve. I think you're referencing page 14, and hopefully this disclosure that we all put together over the last couple of quarters has been helpful, and it's helpful for me as we look at it. Yeah, the mortgage production just by itself, it's very robust. I mean, it was almost $1.4 billion this quarter. Last quarter was $1.3 billion, and then fourth quarter last year, which was an excellent quarter, was $1.4 billion. Really, year to year, the production, 2020, which was a record year for us, was $5.5 billion. This year, we did $5.4 billion. You know, congratulations to that team. They've just been really working hard and doing well. You know, the things that strike me on this page are a couple things. One is if you look at the trend on the gain on sale margins, a year ago, they were 4.56%. Now they're 2.83%. Well, the 2.83% is just much more of a normalized gain on sale margin, so there's nothing to be alarmed about that. That's just more normal. That's down 170 basis points, which is obviously taking away some of the fee income. That's why I think what you see in the top right column there is we're moving more of that production, which was a year ago, 72% as secondary, now down to 53%, secondary. I would assume that as we kind of move forward here into higher rates and we're getting more opportunities to do ARMs on balance sheet, we'll have more of an opportunity to continue kind of that mix. I would say in that, you know, 55% secondary, 45%, you know, portfolio would probably be a good mix. Some of the things that are driving the again to the portfolio is just there's just a lot of new construction on, you know, single-family homeowners who are coming there and doing a custom-built house because there's just not a lot of inventory. We're doing a lot of that, and we're doing a construction loan and then ARM, putting an ARM on it on the back end. That's a lot of commentary, but I would just describe it. It's a really strong production year. More of that's going to portfolio. We saw in the fourth quarter consumer real estate went up around 6%. If you pulled out HELOCs, it'd been more like 9%. I kind of see that as sort of a good run rate going forward. Got it. No, that's very helpful. Thank you for that. Just on the origination yields, the 3.13, you know, that was down five basis points I think quarter-over-quarter, you know, similar to the core loan yield without any accretion. I guess just as we think about new origination yields going forward, you know, I know that we've all got our own different kind of Fed rate hike assumptions, but do you expect, you know, maybe further compression on new origination yields in the first and second quarter of the year, you know, depending on what the Fed does? Or just can you help us think about that? You know, Brody, the way I would say it is, you know, our average loan size this quarter was up a little bit. Typically, as you get a higher, you know, new loan origination, those spreads tighten up a little bit, just because of the nature of that. I guess it probably depends upon our mix. You know, at the end of the day, we have a loan pricing model that prices to the curve. As the curve moves up, we still wanna continue to get our spreads. There's always a dance in there, particularly when rates rise for the first, you know, quarter or two. Long term, that model works, and over time, you do get the spreads. The question is, with all the liquidity sitting in the system, will you get it this year, this time, which is a great question. I don't think any of us know the answer. I do know that when security yields go to 2.5% and you can do it risk-free, you know, it makes it a whole lot easier on the loan, you know, to be more disciplined on that. Got it. Okay. Just on the loan growth front, just particularly within C&I. Y'all had a good year here. I think it was up, like, 13%, you know, when you exclude any PPP related loans. This quarter was a little bit light relative to 2H and what some of your peers were putting up. I wanted to ask, was there anything specific that drove that beyond the business sales that you noted, John? If you could help us think about, you know, the size of those pay downs within C&I, it would be helpful. Sure. Brody, if you recall, in the third quarter, we had a seasonal surge in C&I loans that was attributed to some hurricane cleanup business that we do. We mentioned that that would, you know, start to tail off seasonally in the fourth quarter and the first quarter. That was a little bit of a headwind. We're still happy year-over-year, C&I has grown 13%. A lot of that's attributable to the middle market bankers that Greg Lapointe has recruited and brought in to the company. I do think that this particular quarter at a 6% growth, it was probably the seasonality of the hurricane business, as well as just more of these operating companies selling and paying off at a higher rate than they did in the third quarter. Got it. Thank you for that. If I could just sneak in just a couple more quick ones. On slide 25, y'all have given really good detail around the checking accounts. I wanted to ask; do you know if that two-thirds to one-third mix of commercial versus retail checking is similar to what it was last cycle on a pro forma basis? Yeah, Brody, this is Steve. I don't think we've checked that number. It's a good question, but I don't think we've looked at it, you know, pre-MOE. On a combined pro forma, yeah, I don't think so. I would ignorantly say it's close to that, Brody, but, you know, we haven't put that together. Good question. Okey, just one on the securities book. You know, do you happen to know what the duration, the effective duration of the AFS portfolio is? For the total portfolio, do you know what% of the book is floating rate? Yeah. I think our effective duration for the entire book is around 4.7 years. You know, I think the floating piece is about 6% of the book. You know, really most of those are fixed securities. That's part of my comments. When we bring on the book for ACBI, they have a little bit of a longer portfolio. We'll examine all that when we put the fair value marks, depending on which day we close, and put all that together at that point. Brody, that was for the full portfolio, the answer Steve gave. We don't have it broken out by AFS and HTM. My guess would be the AFS would be a little bit shorter, just, you know. Mm-hmm. Given what you put in HTM typically, but don't have it precisely in front of us. Got it. Thank you very much for taking my questions, everyone. I really appreciate it. Thank you. Thank you, Brody. That was our final question. I'm going to hand back to the management team. All right. Thanks, Melissa, and thank you all for joining us this morning. We appreciate your continued coverage of SouthState and Atlantic Capital. As always, if you have any questions, don't hesitate to reach out to Will or Steve as you're working on your models, and I hope you have a great day. This concludes today's call. Thank you all for joining, and have a great rest of your day.