First Western Financial (MYFW) 20 Oct 232023 Q3 Earnings call transcript

Company Profile

Participants

Scott Wylie	executive
Julie Courkamp	executive
David Weber	executive
Brady Gailey	analyst
Brett Rabatin	analyst
Adam Butler	analyst
William Dezellem	analyst
Ross Haberman	analyst

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the First Western Financial Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to hand the conference over to your speaker today, Tony Rossi at Financial Profile. Please go ahead.

Tony Rossi

Thank you, Abigail. thank Third joining Quarter and First today everyone, Financial's Western XXXX morning, you us for for Good Earnings Call.

First Executive Chief of our from Chairman use the Weber, us Western's this as are: Officer.We'll team Joining part presentation Scott Chief and Financial Chief Officer; morning. Officer; Operating Courkamp, discussion slide Julie and David management Wylie,

read refer GAAP non-GAAP to to Scott. are Scott? company be but today, GAAP to made also earnings presentation. or like as If substitute, discussed Presentations" download Western's that, comparable investor I'd of website. First available First on the statements. website and to These to information by of the are the remind I condition to to and and page actual release a we with measures, you've on such discussed involve risks of press factors results non-GAAP to the investor turn statements directly measures. not SEC management you company's most presentation.Before release to over company's I'd in financial well The the The quantitative done supplement, so this contains available uncertainties. our website expressed in already, the Various any contains call.Additionally, be are materially financial any may the call please any future that filings, of visit other the measures.And reconciliation implied Financial like the could the from direct performance which forward-looking "Events the copy disclaimers during update conference intended cause and Western forward-looking obligation & statements you forward-looking respect factors the different to to relations the begin, call that with which disclaims would results not future to for as

Scott Wylie

interest strong $X.X financial the to The share the areas control, control, quarter, and deposit able of in well deliver the performance $X.X third things of those $X.XX morning, but helped demand of operating we challenging by that created remained per million income pricing of we have Good offset to us Tony. pre-provision another a impact we the competitive increase were can't or generated million from everybody. executing environment.We quarter Thanks, loan third quarter quarter. as environment net can XX% income, in the such diluted higher was very pretax in in which prior with an rates reduced which

deposit during previously, we gathering indicated from saw quarter, and at these we've deposits with rate results increasing As of we've X.X%. an around our on core annualized the focus good organization, efforts increased the third total

prior quarters. which quarter, margin the relieving loan seeing loan overall markets, to in While of on conservative our of maintaining annualized was in one lending we cost the remains from pressure opportunities production which our we're us funding our growth rates, to production With making seeing, were our end attractive enabled able generate to of loan our near-term due higher pricing the while new interest above X.X%, incremental we're standards the and of we've underwriting demand our new rates gathering, and some loan-to-deposit to muted higher still priorities. are accretive well success our prior deposit which in of margin lower our ratio seen is criteria.The loan

to development assets continues management are offset perform investment on the the in in our the portfolio This related totaling we disciplined As in been downgrade loan areas million operating expenses did a to targeted can range resulted lower X relationship. of to NPAs the includes earlier, coming management, successful at is a that good which due mentioned in client primarily XXXX in These although loans of end we've of which our our of to our $XX and during an expense all loans I and loan, continue consist our well, continue we this speaking, have in with. under credit. one third quarter, efforts, have quarter, management, line and increase of values lower success experience business a we commercial impact since third to trust the market personal a loan, real we've quarter.Broadly commercial had our new an This and mortgage residential owner-occupied had control. estate

seen the income management loss over discussion over or capital of generated year, due book value beginning prudent in of and additional these believe past sale a number But However, and X. of at sources quarter. strong [ these of trust minimal.Moving the full payments, resulting our the is on the likely balance net Slide both $X.XX tangible balance in these including collateral potential have, from and and the per in book financial accrued some of investment share resolved. and turn Julie And liquidity a a million placement to delinquent a well will we and performance I'll our third properties. of CECL Julie? properties the their that of the to we underwriting adoption the of borrower number result diluted should few the loans. on $X.X our and they're criteria sheet despite management, given crunch ] the events, currently are sheet for repayment value facing of require, It We for loans these become conservative increases a per loans is which be share to loans we year.Now of in that with The we've repayment liquidity trends. multiple of take the resulted nonaccrual.Given the collateralized impact to strong quarters -- call planning borrower our

Julie Courkamp

Thank you, Scott.

the X. loan at to our trends portfolio. Turning Slide in We'll look

a in we residential million due loans The portfolios, increase to mortgage total commercial, offset decline by $XX that of our which the June, saw housing we Our quarters, If this so related call, year. $XXX more seeing We which mentioned driven are construction criteria, in built this in new earnings production, quarter quarter. on quarter. being September.Moving million loan points CRE the And the projects, through our quarter. supply.As and was residential in basis than in we from an in from third are strong increased the with loans the construction to increased to production increase this new we housing primarily look increase last saw our by was areas production had is far highest past case X, and on limited with on over the of we'll and experienced rate prior trends. during we month discipline prior the our the the are end maintaining has lines XX Slide payoffs deposit quarter X.XX% loans at pricing the draws a continued and to very average the an been by in loan closer take our credit to increase in is during growth the developers related few X.XX%

during Our total the $XX quarter. increased deposits by million

I'll clients liquidity.Turning out our development get $XXX to their deposits We accounts order Slide trend money during million quarter.Now the clients mix primarily success have had higher yields We and added million which continue in continues new management the on due quarter. of to business of offset we during of new partially X. call third to our for in interest-bearing to the The noninterest-bearing to excess into financial discussion Trust moving relationships new by in performance, of and Management decrease on inflows $XX reflect over third that turn accounts David deposit David? Investment added to under a further assets in market quarter, a was in results. from the

David Weber

Thanks, Julie.

Slide to X, revenue. we'll our gross Turning look at

increase gross in Our from in X.X% partially the net mix Slide margin. declined look The offset income quarter interest the XX.X% X. trends income quarter.Turning decline noninterest net by the increased prior income in noninterest to as at from income. interest was We'll to revenue XX.X% a prior and in an

resulting increase in a of average interest from expense due Our interest the quarter prior income deposits. decreased higher to net X.X% from an cost

included XX of in for the loans loans Our of earning yields interest-bearing slightly interest increase point on the net which nonperforming margin $XX interest million not interest on one accrue XX an decreased and in by average the quarter, did costs discussed. that placed XX lower points status accounted These under margin we We in to loans quarter. basis decline driven X.XX%, our relationship Scott assets. the on basis net that the in deposit had

Given the to margin moderate our seeing, pressure XX. the to are on current trends quarter.Turning net we Slide in interest fourth expect we

noninterest impacted income. the prior quarter, primarily increased to income second from noninterest our items quarter Our XX% that due

in Among due quarter.Turning with $X.XX. accounted level Third for expenses. third increased decreased and in quarter. to were relative quarter investment made value in on And and to purchased sources our $XXX,XXX X.X% to our trust slight and our technology an mortgage we fair our noninterest recurring to increase XX, fees impacting by Approximately the losses swap have income, fee of platform. to to line of higher continue rates and additional originations under a approximately larger loan Slide lower bank the through loans loans value demand. impact service included management fees due gain market more prior to recently had EPS decline the prepayment fees Net in for bring of rates mortgage $XXX,XXX structure XX% and as reflect we loan to our are to enhancements providing we the us

with from prior focus line noninterest control. as we our Our X.X% quarter on expense major declines most decreased the in expense disciplined slight continue items of to

impacted acquisition-related early benefits approximately to Our third by expense included termination. of due accelerated quarter $X.XX. that in the expense compensation salaries was and This an $XXX,XXX EPS

For minimal portfolio this growth, by total million combined $XXX,XXX provision at the the for asset expense look related given being the analyzed $XX quality. recorded points provision the are basis turning it we'll X did approximately noninterest level to downgrades our as not allowance to we the strong to and losses. very modest to XX.Now, The perform a $XX points September in a to range primarily well fourth and increased $XX.X of credit quarter. million.Now we and driven XX with quarter turn quarter, these our on basis assets million the loans Scott. broad loan basis, loans We single The continue of losses of to in downgrade continues Scott? recorded to reserve our did specific will require of impact level loans expense. provision that of adjusted I a collateral loans have, had for back was to between the On Slide expect our relationship. we loan increase in a XX, by quarter, we another nonperforming now individually These a not

Scott Wylie

your the creation have Thanks, through and there. record you It's update the our call time in consistent IPO. on Slide to book to value in on We as an congratulations tangible strong share that ability our trend tangible share with David, plan for great track on growth of to you.Turning value we IPO getting contributed value well to earnings the first in our per provided the XXXX, factors shows XX. book per on slide at our we've Thank This of since the shareholders. call us. our have executed that and communicated drive

CECL outlook. of very of we've by Slide additional that comments up shareholders our believe value and with of includes to of per now value share some well we which performance, about tangible for increased had record the quarter creating third creation decrease the beginning I'll in positioned continue our IPO, book at our due track our We're to $X.XX we're since adoption XX. XXXX. to that near-term wrap future.Turning the proud the XXX% our this Following value

development controlling in areas, the prudent the offset macroeconomic environment trust results in the uncertainty, capabilities. provide to long-term core maintain continue of expenses. challenging the control, our and office high to we same continue we the to including of we While to business can new levels capital activities that and Bozeman, to liquidity, operate this Most we particularly a level make and now high full-service relationships focus attracting and believe shareholders those for financial market, we'll in the build By there's clients, accelerate managing these and enhance in Montana continue prioritize a exceptional Since with approach strong -- deliver term.At risk existing sheet providing deposit with service that to steadily reserves, only includes even believe continuing a and can of and investment that team full-service continue balance area. we on execute we our the if of a well and believe going management profitability degree impact we're assets, further our This economic recently near to term. impacts things will importantly, tightly our perform office. management, investments clients this we that in management our to a short loan previously market, can had clients, out opening first our development where entering we we production business time, office, our

your of open our With questions. positioned attractive call. the operate growth our franchise realize add markets increase investments to term.With we the over the we're to more take scale, please Abigail, happy continue that that, make, we as operating generate that profitable to believe in further long leverage we the well strategic up enhance and we continue the to new value capitalizing consistently we're clients,

Operator

time, the question from this with Instructions] KBW. comes [Operator we'll session. Brady question-and-answer first conduct Gailey Our At

Brady Gailey

I with margin. just wanted the net to interest start

where we Do asset As could it the do think X been quarters, that Like just look in But year, margin to -- I the next to think some finds every moderate quarter, look wondering from margin do repricing? think think I'm the you XQ. last are into the upside in could stable? it's a the you going is you as big Is bottom. we like down. XQ?And sounds margin how about over XXXX? It that's thinking step pretty we have you

Scott Wylie

Great Brady. question, Yes.

forecast the of given number to year in. environment unusual the difficult NIM, a been operating and been variables it's obviously, we've So

our beta a looked given another NIM.Unfortunately, in with that of asset costs our yields that would once month-by-month we increase, kind trend in see call, raising that I did rate is cost Fed would things deposit the of drive interest And line. short-term had the in we improve, would deposit higher last the of of increase and number XXX% at we which have One on our them, July, kind the saw rates, we significant a we stopped the stabilize in which deposits this thought QX. quarter, on

not this were you quarter, in So, we But at results. by particularly short-term helpful that each if of look month the to kind month. was XXXs month,

the what Fed, be we point market is that raise And which we I'm see if that expecting so, hopeful that is, don't I think, another this won't one, interest short-term see the the by at -- us.Again, could I've fact before for of the bank think talked are cost that and clients kind that their sophisticated. I deposit clients stabilizing about they're our of typical fact more larger ahead because of there

And asset going costs see stabilized and deposit we hopefully, into yields. QX, improving so,

short but we're compression going least the into numbers of where a we're maybe XXXX, to on flat bit at higher margin our today. So, QX, little are for longer, stable assuming end we to in

if the of of I the thing, back think interesting the of think to the the well-controlled that's for is, our that and year.And the benefit over yields higher playing talked out if is stable comments. course we So think scenario, thing then that, kind improved out business expenses, see about see I too, my goes higher IPO, then our the asset you I like interesting operating see asset what this in which you yields earnings, plays costs, funding can I and model

Brady Gailey

creep? 'XX? guys you million the are expenses $XX finish modest you those growth question I Do you see expense think Yes. of can think on year? to about do expenses to million flat you expecting side. And expense How know, next in you similar a hold the then $XX.X some year,

Scott Wylie

we And have do we to into million long built to need $XX.X Our accomplish continue shareholders, things our to invest. for to term $XX that to we assumption want million. is the

other equal, where things of So we now. they hold can all in are believe being we expenses the ballpark

like is out and our with for to Of some flat, [ improvement, there's hold of expenses point starting as which payroll year drive course, our for quarter, you earnings. would leverage let's prompt ], the first revenue some show in seasonality generally, that. a next improved little get stuff yes, get and FICA But the planning operating is bit taxes you what that how figure

Brady Gailey

And was the into you went million finally said for $XX relationship right. X it me, All then think loans. that I nonperforming,

So just was interest? stop paying X did loans Or it all those of one?

Scott Wylie

him get interesting what were thought was we us case. it seems have guy the to years have he's that we had we we that to our trouble, and us, and which to we current take And has Yes. But person This lumps in wealthy worth and increase the get would now. every an out. going where soon wasn't We to this NPAs, at we right cash see current gets them going would X end, in a just get give that crisis QX. here to up to wealthy guy a to on once decided work into happen

And so, have collateral still it's and it's Palm the full we some this to well, very West real in is, strong. It's recovery.The We think we markets. going a in Nantucket, is have desirable very that area. in guy Beach in estate Aspen, we're think

very So premium market, they're is yesterday market, hot there's is a Wall in think desirable premium already Journal, to talking just but how how talking that an in I article Aspen, the Street continues market market. about high-end which the the be about a

out -- to And so, properties, I in that's going turn my while, workout. fine said we those we I through comments. as as take get that, liquidity on either we or It's going all move I think work to like think, a he to

Brady Gailey

All Great. Okay. right.

Operator

next for moment One question. our

next Brett Hovde Rabatin from comes with question Our Group.

Brett Rabatin

on talking quarters back what the resolved? comments basis were on think, points When the I Scott XX assume of I Hey. What pressure. that it the wanted play relationship does gets the were and just I of nonaccrual and maybe margin, around XX you you was, giving ask Good that sounds obviously, the it to morning, of kind how excludes it. it's few relationship margin, like margin? about before -- a into Julie.

Scott Wylie

interest bounty definitely benefit future stay benefit be be little it's at think and going to point. a to we're don't going collect that that's to on going be I nice some will to past nonaccrual interest, next assume our I nonaccrual week, we're to at It's that but come will the we a some Well, ] going so point, [ now, back while. collect as in it.

reporting, think all going how I be to out, depending for point. the quarterly will X. short-term we So, at it's that But think some I it plays back get

Brett Rabatin

Okay. And you solid had quarter. some growth then loan this

Just color new around you lot environment the additional maybe a about to think selective was of slow you business? a think in that? are from hoping for be sheet more some you the going you going and 'XX, How if of opportunities there's think balance pipelines, be some as to terms Or in little and loan growth portfolio? about the here to add

Scott Wylie

we We in to floating historically back our side, thought would we worked it's loan where been down target the the said deposit we XXs. while mid-single-digit on that growth ratio

month, about. here I think, there's quarter it that in expect way I can think care couple of of would for loan some kind a and kind I QX we for to think down. digit that's X. going growth Again, points think the I managing demand outpaced loan month continue talked to out. there's And think work while in deposit which think, we in improve bumpiness. or But the fine we the hopefully, quarter-to-quarter, now.I next now. see that borrowers I mid-single annualized. ratio that to that with we can be loans taken the so, And our to like loan I continues, do And and And get all deposits that's can markets I adequate to. it's to then, on We of if from exactly that them growth grow percentage trend the saw get deposit And way we're played of by

not XX% I cycle, growth normal seems be do now. organic the to rate, what in we don't that XX% or need to that really doing of are we know want where kind we For be to our

Brett. So it, we're that's thinking how about

Brett Rabatin

to Okay. growth on below And have FDIC, forward? related know so maybe does think the And real about XXX? think, to your or -- estate, you concentrations the that be commercial the going you your C&D state don't how into XXX, anything I Fed/OCC does play I pressure

Scott Wylie

just had exam here. Yes. FDIC We an

excellent traditionally for our just an as have stuff where of and not think us, or higher are quite regulatory relationship. we to had I portfolio numbers We quickly funding construction off them little we'd up Part is as paying like a see we've And them. loan planned. where that had than

we so, XXX%. up And above have gone

drawdowns but any now. the doing just not that under right new versus portfolio, we see the extent down are pace to construction And to we're XXX% We the back that pace loans in going work anyway. increase it's of of payoffs,

the think, way prudent I that's like to see we'd for and us mix. the portfolio

Brett Rabatin

a Okay. lastly looking this industry. versus just for banks lot just obviously environment. are to in challenge for And Scott, earnings And and the environment then a at grow 'XX, me, the of 'XX

so, And or what the earning about lot banks next operationally of over thinking do strategically or and X, the try power. improve might to are quarter they a

curious be restructuring or to profitability? banking, so, possible that might related portfolio securities about else you thinking was And a a either anything I were to your mortgage just if anything boost

Scott Wylie

be were NIM mentioned our phase that effect think, the I I to know just talked, to And the we've I done, the operating hope here. we QX, thinking enough I in I that raise in we in we've not were shows sure is about which number spend David, it XXXX, control well, last And things, were think, you happy from it I their about XX%. $XXX,XXX well about of the hopefully, I Julie Phase and or like we'll I them. talked expenses, it. sure X. of I If that project we thought a nice also had $XXX,XXX believe call, bit we fees fine bit we to talked this play our completed a estimate phases can our in eye in kind July stick the working to year, see, best seems certainly X, and hold to in bull's going story million which quarter, do been do we for first you're last I leverage going under calls, think done. I out.We in up we pretty that knitting little a of on little about think, these which of before on job comments the think QX, too If there.So a an fees sure for was thing I'm went can other did numbers, year. that $XX these in so a the we business. this the And we that was like on into we to and fact grow continue flat to get have We're working X a

in we're trust phase, will looking clients. that that I largest but providing just rates. be higher the we're from our for we're the value service increase very And additional at competitive these higher overall we're think providing think, to still fees I an XX% and the

plays we in line. should as for bottom earnings out, see in think expenses, XXXX, the I all stable opportunity So, therefore, and revenue that improved stuff growth

Operator

question. next our for moment One

from comes Butler question next Our with Piper Sandler. Adam

Adam Butler

Adam is for on Matthew This Clark.

average the on the interest-bearing September, questions total? either on in of a couple spot touching have on margin margin. September or and first in to happen deposits Do rate Just the you

Scott Wylie

let as going I'm David, but do take first it, CFO. have to question David to earnings want question? you his that answer I call

David Weber

negative September X.XX. loans. NIM that's was inclusive to. I spot September Yes, of on the the and Adam, nonaccrual the Yes, deposits love X.XX would And XX, rate the for of on was impacts

Adam Butler

Got in it. and and And were the money market were they relationships just driven moving quarter, to $XX like in up million nicely where forward, looks could were savings new mainly along attract deposits. added, and outlook commentary by They outlook Okay. with and over third the I and on the if loan with your to some growth? your trending new deposits, mid-single-digit was how for going able you wondering deposit see you loan provide you it

Scott Wylie

And about were at little weighted. part $XXX XX% question, from million, $XXX question, deposits the million loans for pipeline the QX a pipelines. answer probability it, Pipelines way we of Adam. over Good X-part Yes. Brett's about were which And at forgot to up reminding me is quarter-over-quarter. actually to look you're a then, end I little down XX-day over of

So positive we're trends deposits in faster think we say, right? loans, mean, would grow the I ways, actually to want to both we that see. I seeing, that's I want if setup than

clients. trust a of do how We are markets a relationships terms I more specifically, where are base teams we and services of it? question, that's So, focus have your on that served positive.In it, our by we do client relationship very, bankers to model, distribution of that call bank local, geocentric-based in that providing boutique private

are "Hey, we doing think people new time loans" we on bring what to relationships going a and one-off for take look. is, than our here. said existing And have us deposits relationship add relationships to is to can to this going new more for we bankers not so, focus And aren't a that loans that

investment other see on business them is there that trust some or or other we or it, and We bankers with which our management who's each over reporting "Why reporting what we got you balance account office, us.And we do your a where going done account?" saying, have call could calling "Are with". deposits we that deposit have then financials give that hasn't were to see that X one so, tells on products said view and somebody we're they us?" deposits this if that "Hey, with bring you you help

attract why is and side, planning, these the teams on how a less how and strategy.It's deposits focus, management call -- cross-sell in deposits, strengthen build up the loan new of to local deposit on going lead and But been more focused really and more we trust we for that's folks more what investment on, I relationships. viable help that our to that into stable new the So, performance. we're we us seeing sheet build deposits, bring that can are financial growth, can refocused is way we've results with now, core PTIM, relationships the really straight the can we're a and our balance which offices great good how think we

Adam Butler

Okay. like that a forward. And will seeing then total to if to noninterest-bearing trended contribution pipeline with is it and trending it deposit similar hear. Great. that compared loan at was what you're to the to be wondering That's deposits your rate pressure sounds also, going looks downward good like there? the outlook I downward, the last slow And quarter.

Scott Wylie

Yes. just know. to hard That's

we've holding really a depositors to noninterest-bearing too. of I talking about on think when And deposits, I our you nice larger, talking But sophisticated about again, X% have everybody relatively they're job think it, deposits. is done here.

would into today. And now year, treasury of a ladder? into we're more so, the were And I I hearing accounts more CDs. DDAs money bill this out that less are about, lot And say, accounts market I me on the hearing think that you a less like deposit seeing we're we earlier can of and build moves feel

the but side, I Certainly, focus which slowdown DDAs more to seen the at So, that in move and Management or clients Treasury Treasury can move, here point, on strengthened that's really That's of we the to value the provide Management well. we're the noninterest-bearing going on here. some DDAs. that's understand far, haven't noninterest-bearing see seen them and drives throughout all headed. where positive.But team keep deposits we've more as remaining to much deposits the early organization so the make sure try a big that our a that I have hope movers we're we hopefully,

Adam Butler

commentary the Great. appreciate step there and Okay. back. I'll I

Operator

moment for next our question. One

comes question Bill Tieton Management. next with Our from Capital Dezellem

William Dezellem

David, asking referenced? is caused you you you the please per earnings what what repeat this question share comments. would quarter impact in your just First $X.XX that missed said I

David Weber

That our let related was up quick. in expense. give me real it -- was, me It pull Yes. second, noninterest a to

previous compensation to acquisition, So that accelerate some compensation that expense. a had and was that was to we related related to

$XXX,XXX $X.XX of is so, that it about impacted, And or EPS.

Scott Wylie

we earlier, when tail if had the accelerate remaining David Bill included got expense. accounting an the leaves for it way says, the then to account this did was gets It's we compensation to or fiction, terminated, that. person like then on -- you've acquisition And that whole that the

thing. asset, gone. The deferred be? the is what that it's is gone, onetime a expense So A person is would gone,

thing so, of in the quarter. that's a onetime And $X.XX

William Dezellem

sequentially, interest difference funds your yield, up. increasing believe, the asset X goes are leading basis that, as that basis points loans, particularly then decline? And to Fed and discuss you what's you point dropped X I earning and rates on yet Would the

Scott Wylie

answer. loan I Yes. think, David's that the thinks he mix, that? isn't knows he saying that's

David Weber

the an was as there well. loans nonaccrual impact Also, of

quarter. So those interest balances as And X are through generating income, mentioned the loans then in Scott the of denominator. still the are

yields. to on that's asset a impact going our interest-earning So have negative

William Dezellem

asset categories that yield you to nonaccrual? contributed did And addition lower you that have see would in grew? this in had which had that Would the to

Scott Wylie

looking you, We're for the up answer Bill.

David Weber

Yes.

I'm And as saw as well speaking So real reduction loan and portfolio, consumer we in saw buckets, there. -- other yields we the and C&I. spot estate our in bucket, in to commercial yield

Scott Wylie

Will Q, data be David? that the in

David Weber

will no. yields Spot not,

Scott Wylie

average The are? yields

David Weber

at that level. Not

William Dezellem

And in the to relative so, or us own rates help categories -- to yields those upward individual dynamics are loan competitive either declining strategy your generally understand when biased?

David Weber

I nonaccruals of the loan those improving, impact quarter-over-quarter. average weighing Well, negative yields are yields our but is down loan our generally, really what's think

Julie Courkamp

And on was in we highest Bill, in and our I about comments, rate it production, loan -- September at at X.XX%. talking think were level the my the

at on nice a rolling loans higher think, I seeing generally in we're rate. and well new are the increases as rate, as production loan renewing

good So those the these that of from categories. loan of have benefit nonaccrual seeing nuances we some are got with some impacted but we've that,

William Dezellem

real this to back the ultimately, right So nonaccrual? comes key to the

Julie Courkamp

I think driver. the largest that's

William Dezellem

of share the stock question about isn't roughly is the as trading are given that price has value? as we time, the thinking then, is final at And buyback the it past. you how XX% business Great. book recognize much Okay. also same earning in But

here? what's philosophical thought So your process

Scott Wylie

Yes.

is, have we stock every So trades right generally, place thought discuss stock having this with a have to for think Board long-term earnings the extent the capital or we out base there And there, going capital. opportunities shareholder or be to time value good a acquisition here. beneficial have like, we I buyback down, should And plan But it in quarter. well, the time now. every we're what strong is a is to credit stronger creation that are the

the best interest terms tries collect question improving the think I yields interest on think, to our I our put are decision in tangible we've So those additional loans principal how the ratios.I our about talked Board just per measures any capital above these improvements Bill, million our we mean, think, I in to well-capitalized our $XX already in of of we're make without to the and things, our buybacks reporting income. would manage we in going capital. share and all to about which And nonaccrual. way ratios, on book and that value your add significant

of is that So about the expect Board see mean in in of that sort we short-term back in that's at that the on judgment we bank use again money our sure disappointment a in our factors here. and some spite trying But about. talk against do talked other this to quarter, I will those the how that best mindful of meeting do I that, drive future the and fact we're good of EPS to you way to balance

William Dezellem

That is helpful.

Scott Wylie

the support. Appreciate

Operator

our One question. for next moment

Our next with from Ross RLH Haberman comes question Investments.

Ross Haberman

you or payers are -- about besides anomaly referred delinquencies seeing you anything tense the in any talk you which weaknesses that today? could hopefully slow bad loan, one, to or Scott, of or terms like an this in other

Scott Wylie

on other from fully in we again, we cases, situation not one-off what each And other. last very deterioration. know seeing one-off Unfortunately, any expect things. to collect to different a the signs are from we Ross, of that are but isolated addition This today, other these we credit is both situation. they So reported quarter,

the reserve collateralized some we're to going cause it's $X accounting. now conversations, again, on days in to on quarter million our that think XX And at have obviously, thing We these due we are credit. for doing we're $X well but but we're timing fine. way specific going past of fundamentals we in the with issue.It's think end, very million And I and terms be that think us handled with unfortunate really borrower right the new the this the we short-term pain us for

Ross Haberman

you maturing X%-plus. been the of X% jump terms Do in thing, loans -- or "Hey, test, X% to your get often And thing. borrowing ahead or rate?" say, And is come to at, of I How test know, have paying don't dramatic many X% is and this one you guess, do Can is stress afford of suddenly, stress -- going X.X% a at to of, borrowers all have it that? going you How in often X.X%? loans pay up these another they I be X%. X%, viable do they type these paying commercial be or due sort of is and this this loan

Scott Wylie

Yes.

would of we're that's basis or we always what loans, borrower tell rising kind at if where XXX do we've So a looked scenario something But then, see little stress now I points for tests. of this of our down over XXX traditional you been environment.And XX months. compared be couple underwriting we and to points, up a a rate XXX it's looks things points part do originally, basis we as would the is, last the When there. the basis the couple at coverage is are looked you're process, a review seen at And about. have bulk loan of come see and the portfolio what I going where here we've where due, to adequate due a through the risk out, rates. not higher mean, of is the risk or months years coming for that this and borrowers we've credits do looked gone we've the in we internal is is -- cover probably few last to talking over repricing are risk minimal. light

portfolio problem credits for rates be higher, the a do that to think we point from or this the foreseeable dive at where risk to go the any are that's as future.If into that in But individual seems managed we'll need seeing probably not portfolio. to fundamental with in or a today, deeper a we're continue So I that. well

Ross Haberman

in quite the was, I your Page terms XX, your your this I out from -- business, quite breakeven couldn't of breakeven the from tell at that a quarter? it mortgage forgot income. was quarter? hand noninterest business for didn't a mortgage I Was of page kind what tell

Scott Wylie

No. for think we No, is I that -- quarter, in believe, the the $XXX,XXX mortgage David, I lost segment.

Ross Haberman

as seeing be a fourth you're well? quarter will for guess what as from good the as that probably quarter, any fourth And the for

Scott Wylie

contributions we of we've don't, term. we minimal with cut we're really expense close there. contributions coming Negative of kind I the here. to unless Unfortunately, think And short for mortgages out want which down, stuck some it

that. spreads MLOs, couple more way which to a looked costs, to doing manage add in are variable all volume. manage We also looked things drive are of that a we've to We've and

And with so, we've that. success had some

communities, I to. think, mortgage in our talking a and more we've added another couple got that loan we've resort officer we're

where you So, work on I know, is want other [ trying and responsive.I think it's a valuable is strategically all cost been to over certainly little be like he I of do think that's risk right our look again, I done If President in years to in be. that? that the our down we've aware mortgage Julie, now. bringing assets. X a under nice any his It's that's revenues there's going they're to I that color small that focus group, past in job think But unfortunately, no upside you. the of is don't produced the ] It's down to well us. mean, minimized mortgages, area feat. -- for on And which add

boom much risk in not managed.And then I losses made think, that got make bank to you to if you've the the going of part sure have to compliance and need the be here, volume well the having just end we're it and incremental the money so we world. private a some mortgages, it's have of

it a years and to was a nice turn at couple business ago. I some be of going around point, as that's think again profitable

Ross Haberman

couple full talk one you -- you is read to a what in think, know, And of that you're years? be, million, $XXX about don't or offices? to of is, timing you a a if it I I said Could I opening branch $XXX Could million in be deposits hit some service? newer of do need could going Bozeman, a You that be that kind your do breakeven?

Scott Wylie

be $XXX new locations. terms revenues of an talk and in when think would million about ambitious think, goal. I here we $XXX million We

service that get give opened and them told as to And we office. full them they revenues We so, we LPO, when we full-service that opened a in a that could office. million as a $X

actually, November believe, moved we I X is opening earlier grand week, be, our think this or and something into like to office I that going that. week, this

now.And be the a there, a build probably year, from $X $X think to And [ with million $XX business in million we so, months expenses. would grow and that I a business million be ] I out a that business build million, $X then, to as expect XX

near nice into Wyoming well. So we're full as Western margin in us having a think a nice And I contribution us additive in the term. to entree it's obviously and relatively Montana, doing think, what is of I which very opportunities gives for

continue think expand to in I of longer-term Mountain West. a to So the strategy that's Rocky part

there great think going for produce team We're great really it. a is about have results I to We that very optimistic us.

Ross Haberman

How that that on bottom Could years guess, X.X you performing a is basis? business, when or bought about line ago you I Wyoming so. the talk about

Scott Wylie

the I beautiful released of had there much the acquired. one brought and that to a the Interestingly, Main aggressiveness they plus Yes. as acquired I that. we've we Jackson, about mean, seen we the across First what really in Republic And shocking bit office our X Street. we've metaphorical one the one at and we a the that the we has of street Jackson a open experience, us, had the information combined market. think that don't that corner offices, First from was we

that's course, now. Of gone

turned market, teams in are do Springs, markets. really then we weren't be there's long-term to surprises. going for out more pleasant which us other they've So, are Pinedale focused we market.And when been The benefit those X about what started Rock looking at competition that a this our too be players wonderful. to offices, think the we opportunity, for that in obviously, there that's big which have the in I first The sure still

be core today. I so, that success long turn stable you nice so out stories wanted think really base of And deposits, is the to going term.If for have to those desirable to a us are for

are I of acquisition ] that All a huge additive retrospect, those offices to was in think And [ that. very success.

X to the got thought, to we out that day been probably we of and have revenues capital You was and book, more tangible than recall it on accretive strong. expensive that

for So us. really success I think all story in all, a nice that's been

Ross Haberman

And will Are see actively be just any Or we endeavor? one for buy question. looking it you in? do if further final like fill growth, to more things or the organic Bozeman

Scott Wylie

cycle. that interested may that come and of We boards partner believe downgrades that bigger, stories stronger Talking rough looking for opportunities of the to otherwise pretty exams wouldn't think March be come put I since in will. this a maybe may maybe bankers, that be out pressure on and people of going that do I've some and to out that other there's heard now, some

And saw we sort going will our And quarters down that's It out. prior opportunity play be that, play follow-on seen couple to bigger I in to see do so, for them. here think, for us. list bigger cycles, could next think that, footprint which we've bigger of of several socialize does play that take out I time, come spectacular of that toolbox still, for partnership talk think as I idea that and in opportunity I got I and that out. the with we've that's like And And And us.We to a a we believe then, the to do have of targets create sort for to big takes think to the do you beneficial joining what a going over these of somebody March. create years. events

Ross Haberman

up those quarter I if to for portion you just of a I've held you sell banks shortened have And amiss you maybe maturities. move of out. number could held thought the tinkered guess yours? just one have with just or anything whole the thing you maturities, it? to sold last securities, on Or to ] I would did durations. left of about that some -- and sale, with or their A Have thing this [ one sorry, of seen sort some,

Scott Wylie

Our conscious in decision I We small. that was in XXXX a securities relatively portfolio truly, XXXX here -- made is mean?

Julie Courkamp

Yes.

Scott Wylie

XXXX, X.X% out we X% not that bunch had to go with books. bonds buy yielding and a that on the and cash of all

don't small. so, well. sheet. to total that And It's our kind just relatively our I is investment cause portfolio I the we that have I feel performing in need mean, think turmoil balance of

at makes off. it and we'll just think better the different that given and to I I letting certainly we're sense this trade economic it accounting place if have factors, mean, to analysis there. all I look point, But out. we leave it it think done pay off So and in see leaving

Ross Haberman

Have I good appreciate a it. weekend.

Operator

One moment for next question. our

Group. Hovde question next from Our comes Rabatin with Brett

Brett Rabatin

Just bit ask, quite I to said call I obviously, this one I today. acknowledge hi guess, gone to is the know, sorry, didn't has I when David, group. enough. just I first, mean, long you follow-up. earlier, Wanted the stock down a

I losses a confident think, have around one around be pretty might formation guys this the it that like to feels you relationship. portion are of that significant that and going not NPA quarter, you're

on Give your too I could want detail.But those particular losses you much too of could anything and about on terms don't in talk would think, I share how valuations comfort get properties appraisals get specifically us not around there expecting help some give you building? into the any you if you the of have know it. you to it Updated if have? sense you properties.

Scott Wylie

good question. yes, So

as for our for painful be time chosen a had it, talked very a here. us, how before. And shareholders it's spent to of that will have about better with we've about would I much million. the you this, options couple we've more and term number lot short expect, deal of I $XX the a for long large on think And We as different option

so, some opportunity.But yes, mean, a we with a we it. I it's close price, at I taken And have lumps take if guess stock buying the look

all are the on appraisals current -- or have X? X We properties, Julie,

Julie Courkamp

Scott Wylie

looking in positive desirable market at saw and are is again, all in think mortgage. West the I figure article And X that before Aspen. collecting the in journal markets properties just how how is article And I These still Beach. very cash.And are And people the I mean, was article those in X% pay nice are is looked opportunity Nantucket that thinking properties. really We've buying you're in for about hot the to of you're detail. premiums. high-end an actually them trading this that, I this, about monetary was these can't end the there strong whatnot. some aren't in Palm at that on people for in Aspen, in policy coming looking out at market at very are properties property and journal. here trophy isolated that the going what's talks in and from on that

overconfident that but Brett, want So think, to I well there I we're fine. I positioned do be it, be think do should don't and about

Brett Rabatin

and [ at question, appraisals But Aspen properties it's to us confidence where much back ], Any than lower, would not anything a of the core get so to come color have appraisals, kind going on purchased? give take to might that the that? purchase not that -- that the lower in of borrower you or to updated

Scott Wylie

have we them in have We current already appraisals. No, hand.

Brett Rabatin

meaningfully exceed And Okay. unpaid balance do in the principal? they

Scott Wylie

fine do to with going we're think them. I

Brett Rabatin

Okay.

help So sorry to you so market. the some trying just confidence push. for that, to I'm get around

I the appreciate So follow-up.

Scott Wylie

you, Brett. Yes. Thank

Operator

turn would it closing question-and-answer concludes to I session. That the management to for back this remarks. At like time,

Scott Wylie

Abigail. Great. Thank you,

a reported numbers this couple things. Just the quarter are disappointing. of Well, obviously

unprecedented and well company responded balance performing The an business in sheet management, well-controlled environment. well expenses. fees core Our with has is higher

on improved expense and with produce NPA earnings historic can nice we to even earnings on control, have near only We're story. problem our operating we focus management. spike we X focused collect current leverage expect with continue relationships improving forward, long very losses.Going our loan growth quarter third of future Our risk larger if is continued history on think moderate discouraging. careful X do and revenue operating We and these while

support We with in. have and great thanks, dialing and So appreciate that, of your interest a Western, weekend. First everybody, really for

Operator

conference. today's the in participation your This program. for conclude you does Thank

now may disconnect. You

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.