First Western Financial (MYFW) 25 Oct 242024 Q3 Earnings call transcript

Company Profile

Participants

Tony Rossi	executive
Scott Wylie	executive
Julie Courkamp	executive
David Weber	executive
Brett Rabatin	analyst
Wood Lay	analyst
Matthew Clark	analyst
William Dezellem	analyst
Ross Haberman	analyst

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to First Western Financial Q3 2024 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. Please go ahead.

Tony Rossi

Thank you, Kevin. thank third joining quarter and First today everyone Financial's Western XXXX morning, you us for for Good earnings call.

First Executive Chief from Chairman Weber, us Western's are Officer. team Joining Scott Chief and Financial Chief Officer; Officer; Operating Courkamp, Julie and David management Wylie,

use morning. slide discussion a will as part We our of presentation this

of copy done Relations website Investor not have visit of you Western's presentation. already, please the download First a Events If so and the Presentations page to

factors conference like financial earnings cause to in and forward-looking filings, discussed remind implied presentation. Western Before forward-looking and by call we during different this the direct the and the contains factors actual website. I with the These our such that call. are performance The Financial which disclaims begin, materially any to obligation or would be statements. condition from in release made SEC to you disclaimers respect company's to statements could I'd to uncertainties. also Various risks statements on future update you any available any expressed First forward-looking results investor that company future the involve of company's results read are

supplement GAAP Scott. measures, of the release, comparable refer be reconciliation I'd like today but may measures. And intended other information turn website, and most quantitative the on Additionally, management to as non-GAAP call as over the not to contains discussed the which the with GAAP are for to to available non-GAAP substitute well press to directly to measures. The that, the financial

Scott Wylie

good Thanks, morning, Tony, and everybody.

investments and production. Overall, on maintaining the future continue strategic business to will while our profitable higher a to to execute making growth. control, new quarter, that including into prioritize loan During level we we generated approach the prudent priorities, expense also management risk conservative profitability while support continuing a disciplined our well of third

resulted clients relationships continue with new to in our success expanding gathering existing efforts, and also with deposit clients that adding We inflows. have deposit

remaining the the During deposits, we of quarter. Also goal OREO. with several that quarter. range. a no end We've the relationship, of reduce over success in mid properties a ratio end area, our possession now to the result mentioned, loan growth progress XX% the non-interest goal now on was continued and past where XX% saw several quarter, had remaining any times collateral. We third XX% resolving the the strongest relationship to which also loan deposit balance in being deposit the prior we've to In the to the bearing that large at included as to this loan ratio quarters we've of on non-performing the are of taken from our which in make we our have longer third properties, increased achieved of the number

has sold, being X properties these have that been and we marketed. of remaining properties One are currently

relationship third positive quarter, the both generally in non-performing classified in this from asset quality Aside during declines trends with and loans. we saw

capital ratios financial As in X share. in value further per of management we and in strategies, sheet of our had our increases book stronger a result increase all tangible performance our Tier balance

by had value Moving share sheet level the balance increased management, per in prudent to net With income Slide X, of our quarter, which tangible or was quarter. X% EPS $X.X about double we $X.XX per share third of million, this generated also we our quarter. diluted book the the prior in

Julie? investment management for I'll and trends. trust over Now, Julie balance turn discussion to call additional our and of the sheet some

Julie Courkamp

X, you, at On Thank in loan our trends Scott. we portfolio. the look Slide

quarter. million Our of loans end over investment decreased the from prior $XX the

non-performing as well which loans in payoffs level and conservative to we production led decline decline that offset our loan new of be selective new to the commercial in line continue enough utilization. to We a received, not production, and highly as in being the

However, we of mortgages, commercial loan prior third $XX relationships. new in the in also to relative loans areas million did production loan quarter where quarter and the of with production our an getting new coming in of the loan million we deposit production quarter. Most in last is new compared increase see are to $XX residential

We turnover loan X.XX% are on average was yield to being be continue production on average average accretive resulted portfolio rate than in to quarter, we new our disciplined pricing which our This which on and resulted criteria. higher in maintaining the the our the rate the being our loans. in payoffs, in

our to Moving deposit at Slide closer look a trends. X, take we'll

the client relationships from existing $XX The in to million an balances increase quarter. increase prior Our clients. was deposits attributed total and end of the new increased both among

in As Scott the the XX% deposits, of quarter. the bearing growth non-interest end came from increased strongest which mentioned, prior

in Slide third our had in X, primarily to trust investment management, under in in $XXX the quarter, Turning a the AUM. to of increase value increase management and we assets improving market resulting million an conditions attributed

increased AUM year, Over the has XX%. our nearly past

Now, I'll for David further of our over financials. turn call discussion the to

David Weber

Julie. Thanks,

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

to prior bearing X gross one additional interest and increased from in the quarter revenue deposits expense. X.X% decreased problem the and credit quarter interest of Our driving increase into migration due the non-accrual day status in

quarter. Our with was non-interest income flat prior the

to and in we'll turning income trends net Slide margin. interest look X, Now the at

impacted negatively and non-accrual level from the of income higher net third due was expense the the interest credit were quarter interest Both X decreased by net X status. this prior negatively interest margin X.X% and quarter, net in migrating to by impacted Our income credit. interest primarily to

was slight to an average yield of cost due NIM X average had average balances, deposit the we our the earning while points from the interest was quarter. prior our in over quarter Our assets decreased due a deposits X.XX%. unfavorable from in mix shift basis prior on unchanged increase to quarter to This

also of third at quarter. increase balances end in in With borrowings, wholesale balances going deposits deposits resulted which of our increase higher we positively cost reduced the in quarter, the level during our we funds the the impact core of will a had of forward. The cash

Our rate accounts market bearing non-interest in will outflows rate any of that as the September. the expected our deposit cost of to cuts resulted rate occurred impact our and further reduce have deposits following cost cut money also funds, positively of in on mid higher reductions Fed are These cuts rate well as level not in funds.

Our further XXXX, markets to to from quality September XX, spot net stabilizes, the margin and as we interest interest the quarter financial prior asset increased net And expect X.X%. margin. expand normalize

XX. Slide to turning Now,

risk the of and We Quarterly income then on a saw August a non-interest from July highest insurance and in unchanged net offset production in was production increase loans Our in September, were in large of which prior variations mortgage X.X increase was by management fees. an level mortgage in years. level low our gains quarter. mortgage

expenses. and XX, Slide to turning Now, our

increases revenue earning's control additions in expense by were and marketing non-interest this loss personnel with efforts. recovery front back up quarter, office higher that other expenses new a expenses favorable on Our by gross offset trend. quarter. continued of operational expenses well will the our with support the partial to due on recent in development occurred get to expense as first but first Reversing declines decrease our was line due a higher driven partially the in These a a to year, salaries fraud slightly as half primarily business our

Now, turning our to Slide XX, quality. we'll look asset at

partially of and non-performing a million, by to the pay to loan increased property, non-performing assets addition was downs, sale. loan non-performing due which offset foreclosed $XX.X a and Our loan charge-offs

had which due loan XX% However, points the paydowns, sale. We a into which asset non-accrual With and related decline quality we asset September charge-offs in to to we quarter-over-quarter, of relationship our the XX. in a about down more loans, a OREO. provision relationship OREO, minimal one primarily in allowance loans, non-performing in we credit total due was of and are this reduced in loans level and expected basis saw positive XX for typical, level each to quality, had had the the charge-offs overall at classified out loans, a our of large of past than evident. With loans trends of migration migration losses, to non-performing adjusted quarter positive trend into improvements non-performing loans higher

I'll Now, it to back Scott? turn Scott.

Scott Wylie

Thanks, David.

with in to activity sheet Overall and Turning balance of built, some the to challenges and with see banks good by disruption strength being the to clients we new talent. comments faced on economic our XX, and about healthy and franchise continues I'll wrap banking markets we up market opportunities Slide competing capitalize be our our outlook. to add

net revenues margin, interest Our modest income current and improved quality. has higher historically the expense balance supported fee improved structure sheet, in asset growth higher with

payoffs believe current continue operating balances seeing expect the some conservative will will throughout in us loan we relatively We pipelines, the the prioritize level priority offset we're criteria, gathering in top of which remain seeing, in our the increase risk to keep quarter. Deposit leverage better, organization. near-term. we flat are but and and solid We'll underwriting help loan management prudent a

successful as repositioning while our deposit higher level demand the criteria. increased with liquidity loan we liquidity, ratio, sheet believe have With of we generate loan we're and and a in we to positioned loan maintaining have underwriting of lower increased to pricing well growth balance XXXX our increases, disciplined

impact the be result that, to the cash we large of and trends to good created should while is interest slow, rates now. value dividends that see call? we're mortgage profitability. earning The of to up declining, our we decision a Our in paying your continue, market Kevin, a we're higher are is into open expect production level mortgage now seeing believe sell positively questions. MLOs, take and redeployed business. And generated to our add further With our seeing we'll which assets please relationship, in financial non-performing impact and expected our interest will you we have significant the number of both positive positive shareholders. With being the happy income on the we amount of net mortgage for can margin from in properties steady key areas interest from that improvement repossessed our a we're can level performance as

Operator

[Operator Instructions] Our first Brett from question with Rabatin Group. Hovde comes

Brett Rabatin

through if on then on one I understood all loan? a credit. The the related credit few offs or credit any we moved to if could. that things, And were charge new all Wanted walk large was correctly, non-accrual, to to the almost color that start and

with X what wanted happened those start there? an So kind then perspective, point Maybe at OREO let's questions. this understand to that of in from And is just the ranch houses? I

Scott Wylie

$XX million loan.

So loan wealthy into He's far a accrual. himself put borrower It's our that very a liquidity crunch to as guy. as we is loan that liquidity know directly a He's non situation this him. got under is got growing. a a

it, but he's guarantor it. to got hook So pledge it. on the no collateral there's He's good on for

seen on periodically. happen And to the we're seems it and of this collecting here collateral. We've before sort so thing

now the non-accrual is expect situation. we get a in I think is loan think recovery from we it. Apart one we we've can one-off got it either this until collect do pretty board or improving another that much I this across case, have paid portfolio QX. trends full noted, in and it relationship, the David In

and it collateralization from loan into X real So to collateral that is that with happens X a OREO. there or moves the off of situation. On the is credit I think notwithstanding loan your as we've a what cross loans case was And that non-performing on of nice the all which one seeing we in we're one a quarter, shifts the charge-offs that lot second estate in talked mechanically have question majority balance about the that non-performing as that progress sheet the related our loans large about. the

that, have into of it went balance the from that, of that the OREO is that's reserve NPL write-off the is what higher than OREO. And this the part charge-offs bulk really up as quarter of conversion was. in an the So fact the to the because so loan change value we you that is the and related specific

saying a as So process sausage complicated this think year. to all what and with making positive is a is which sell have be there collateral is had was and workout and way consistent a is And progressing whole this non-performing it a been going we've that's I now this along, the off having and point the we control books. as than we a hoped. And go because ahead having loan collateral better at and we the it of well loans frankly, actually,

all in good are lining silver those consistent and what QX. shows So nice we had and think there of with said progress I sort

selling is about properties would and repeatedly quarters to we as that doing said, it said question we're third several do take I that. have, The those

X the them interest seen of remaining we've think lot I X of of that in. properties, a

next And so, expect always to be would although, in predict. I that's X, those easy sold to quarter the not or

having some really think sales. I fire interested kind in not of we're

on value our positive. things generally or conditions, on have books the in try with we at now we'll are So maximize those which and line below appraisal. the those market And

done near-term. should final think that in get that So be I the

ranch, sell. X the take to that typically months ranches On to typically months takes XX

there. of really quarter. expectation through third And that so that's our We control midway got the

Brett? typically. take a while take some kind very and with so hard in I don't working properties get questions, unique know, unusual time. And experience large books that the to get And to well these had been think to is large to showings ready off number of in go a branch going my we've of located I property. Did it's is because that sell this that thing a hit realistic pretty we've to just and property. It's do your a will if short-term And QX just the it's and all there. spectacular

Brett Rabatin

the third comment out quarter? in first press and in know Do million million criticized was criticized being for in loans then $XX classified classified have number lower you the and like a there's release quarter -- slide the $XX.X Scott, and classified, the about I deck, for XQ. think peaked a do And I at Yes. you

Scott Wylie

I don't have there. papers fingertips. of my through Julie looking do, but it Julie? you Do at stack a have I it

Julie Courkamp

million I think at compared about non-accrual prior $XX.X classified quarter. million $XX.X in the was to

went which million accrual progression credit compared into Again, direction the of right the large that those. good at there, prior in the $XX And on quarter. million good on is then So in classified both to -- movement largely is $XX OREO.

Brett Rabatin

I DDA was the the put just quarter core Any additional ask in wanted the if effort has the and quarter? question, then sticky growth to growing the around that's the growth other And DDA that Okay. during and been color relationships? on into

Scott Wylie

Yes.

deposit this several ratio to on improving think some is phone growth. and of seeing this I a deposit quarters culmination of working

to happen in and So happened it great in way the and at to anyways. larger is episodic, which that be see looked in to QX. tend it of the clients went tended was that the We all our kind increase where accounts work

some for grown we've its seem that's around historically. some how motion, know existing movement pretty the of new accounts, the us As of deposits and account business, you typically into its the typical

from shift DDAs, that So put bearing X the vary quarter. significant like positive but quarter look, or particularly I think details is the definite think of think interest I seen it's that we've in into quarter, to sign been now. that. I effort of other quarters a is the way this terms because The didn't past from every this down for I really back to the X we've going go and feels but going the it

I was benefit to in on to And they so a in any I such focused expect team don't positive. was particular see doing think would seasonal clients was our rebound one-time that this having or continue. there QX our And nice again, that just really the and and thing there do what of

quarter. up about was end quarter at XX% actually over pipeline deposit Our the prior

I good come. things more So to still, think

Operator

KBW. Lay Our question with comes from next Wood

Wood Lay

on the DDAs. Just one follow-up

pretty sort like driven sounds customers. handful by It growth your sense? it that an that outlier based of broad So of influenced in customers amongst a just wasn't or was

Scott Wylie

Correct.

Wood Lay

Got it.

in deposit So line trended pre- we just through the deposit XX and quarter. shifting are over point and with maybe rates betas got cut coming how in basis of have Could to cost, post-cut you expectations? the sort the walk

Scott Wylie

free I'll on was facts why NIM we to are in if deck the But X.XX%. at quarter in jump then was in fact our that pretty example, inclined. in I mean, is rate take quarter comments The down stab the for like is. that this that think so for numbers, David you more end a spot and about I the feel for talked with reported NIM the frustrating.

So the X.X%. positive in loan deposits, coming about I to range production on new in we rate that X% million was kind at that's know benefits, at we interest think question expect cuts, $XX-some trends payoffs more not some the that average I that you if for or we'll saw the was loan the early on quarter, of on look side, your where but the see side, indication continue. Whether of paid-off the just

as plus benefit million the out So net plus production cut. that's year NPAs plays produce pickup cash into whatever out we in that get of plus whatever $X.X and back growth a getting and interest we from rate the income

So I think see to forward. momentum that here the going nice NIM, we're some positive going

came in terms down In spot of actually those of cost deposits, the QX.

quarter, ended David, I X.XX%. at the think we

And hoping lower. we actually want what would way I the the bit see a down that? on Do that beta up. higher quite saw on was And detail were out. you numbers think we a the we when looked that we the way of beta, high at deposit then that on So to than share deposit the played

David Weber

beta Scott's on were XX% able really market point, down were To outflow, and the and absolutely. beta expecting Yes, yet. seen way on we higher accounts our we any haven't to money achieve

really So that's a I progress there. good think

Wood Lay

right. All Yes.

go Sorry, ahead.

Scott Wylie

your I question? did that address said,

Wood Lay

Yes, that's All all that color. for all I was great right, think me.

Operator

next with Clark comes Matthew Our Piper question Sandler. from

Matthew Clark

spot adjusted? of impacted of at the Just or the quarter is negatively does the that that by NIM on interest bps end rate reversal that X the number that X.XX%, include

David Weber

that It the would but make X not include still include reversal, non-accrual in sense? those the loans sitting does interest interest non-accrual it of generating income. impact Does

Matthew Clark

yes. Yes,

Okay.

I'm loan I And Okay. if remind the us saw percent sure, book deck. you that's it then can of floating? the truly not your in

David Weber

XX%. about it's Yes,

Matthew Clark

Okay.

Scott Wylie

Which be is sure that you're we this liability implies, going continue I'm where to Matt, is sensitive.

decline benefit term be should a we see rates the that extent to NIM. So short

Matthew Clark

a spot the fees, asset XQ rate to here. else was in your your can just rough guesstimate going something mean, decent adjustment effect on and the we the up AUM deposits, of On based of lag be. benefit kind I is But Yes. management on your that in in on fees your math implies X%. what there all that's it Is that lift then going see were XQ forward pretty just NIM or reversal down we'll X.X%, the but there? a going interest

Scott Wylie

dive mix one is Well, because types that part head-scratcher think story the that like on I And that we a of a are big of in too. took assets the deep it there billion. the seemed us a $X.X of to

income, amount mostly this fixed a of trust, which was in fair quarter, in fixed fee. the So directed increase are

up, if goes it so fee isn't trust to a $XX,XXX $X mean goes And have to it it's whatever. going got fixed million of $X if million you from that fee. a change or the I

of we at monetize grow a to that. that's So monetize and what opportunity. a on seeing big of and there's is would us of a Obviously, nice want went that. say, to do initiative we're mix going the QX how part the so have a look an part we we figure take internally see that out in on business to think for how We better accounts. I

So for investment that's a team. certainly and priority management our trust

Matthew Clark

Okay. then XQ? for loss on the that quarter the benefited outlook the this fraud rate how then And expenses? on run your current what's And much recovery was

Scott Wylie

Well, -- yes I loss? don't -- give fraud the

David Weber

$XXX,XXX Yes. The was about loss fraud recovery

Scott Wylie

is your was kidding. and outlook. And I'm minimize I try question assume our about the forecast losses for expense We additional X. fraud that.

but to be those big and in a new were which legal hires those talked our about to start do XXXX. And QX revenue are So elevated not we definitely a we have collect which workout be in the all of as part, expenses producing stuff. growth front we we increase, including We've expect going QX. this expect recurring to big seen office, in part

XXXX, a with going the $XX.X offset expense in this line manage continue and then will story that that revenue we're target would that expense. And of a at some million guesstimate $XX.X increased revenue think assuming I we're thinking to range, growth to nice our outlook be million point. an reasonable for to in expenses So

Matthew Clark

it or little a But there's you that lift little Okay. it a XX.X% to think do in drift maybe in a stable think even causes has that? relatively or XQ here bit up to little comp above you

Scott Wylie

think a I be point. would starting XX.X% Yes, good

Matthew Clark

just... Okay. then And

Scott Wylie

in increase in and are both signaling David QX. XX.X% Julie

I we're doing or little similar can to everything in a some probably but think we it's manage So QX. number higher that,

Matthew Clark

assume the then $XX, plus substandard And still $XX.X I number. that's number, number? you I special Do Okay. I think a think $XX have classified was the mention accruing. the being

Julie Courkamp

$X.X about mention Special in status. flat a is million quarter-over-quarter, growth

Matthew Clark

about C&I there of that? the guys above released reserve just with And how I charge over reserve I to or Okay. it think have offs you we then build call I the mean, obviously X% it this general? to and kind cause want in drive do you time, toward back and but even to it backfill mean,

Scott Wylie

we converted under to we've been number. Well, not you admonished tell accounts, not by calculating the CECL Well, by under remained since particular tell we've you our new would calculating accounts to remained been methodology way ever has manage of new number. of advantaged not onto I to a the has our consistent allowance ever to would converted we consistent our particular our CECL. the to, manage to a methodology since the I not allowance way onto

is So talked We end And place in comments in which credit our about cycle, again, XX% quarter improvement of getting I we a we're a underlying think this about towards our -ish now. of four quarters performance. for we've quarter what do all the workout indicators. over for we're in think, the seeing talked reasonable big

and I with the is think expectations where CECL. what otherwise. in reasonable to know We reason that are any in don't line So are we think

Operator

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

William Dezellem

on a continue quarter more view that strength can in perspective mortgage really seasonality was some the get business, your you your really as this result whether the the particular, or that whether MLO expansion To team? of of strength is saw this

Scott Wylie

Yes.

said, revenues X.X mortgage David think very highest fact, quarter. you and in in the was seen was down were a month we've just the in QX strong review the September actually for month So our years. to facts, I

positive really trend there. So,

come some cut down maybe going going was sentiment and down think there enthusiasm. Seems so they're like a to much. now were that some I while to not rates for there created that

pent more in don't back. continue of demand for I market. a the what bounce seeing there that are I so there's to think, out lot know a and means product we up And

then next So a we're think I year ago. other saw we X on going you it's better speak I than be would we this, additional for bring and but we've pipeline no got think the If quarters, in Julie brought I in think to these could see for in all there's to going example MLOs some new that think here but to we reason can seasonal we MLOs a QX. seasonality, what of that

So those are great hires. There are saw no direct we expense. that They're building capacity in and they're producing results September.

I same think from saw there, the of that looking we driver the big was September. results in -- a Julie, you're thing And how

Julie Courkamp

will have but years. in prior than we No, think that's be bring I sale higher prior fourth and was internally quarters. the And it the productivity of seasonally, be organization. right slower still than and in we'll gain into higher see it We're in to she fourth MLOs on all right. a in the just thinking first quarter, And kind level still the we're working of still

Scott Wylie

been and the private bank talked over in trust of mortgage for and strategic these companies mortgages a good really we've conversations how Bill, and have quarters us, about operation. you've importance solid the many

sort effectively think, integrating, in what over year, last the on some the or our thing. side mortgage cross-selling into made progress nice doing more centers and that profit I and so really of we're we've

So that value as of I the the strategic well well. all for that, think bodes business

William Dezellem

on? you've year off of MLOs on And brought this that's would you and base us many remind how what please

Julie Courkamp

a more new We've in the looking to fourth MLOs. on quarter. few bring X We're brought on

William Dezellem

how And XX/XX? the many on X of is top at

Julie Courkamp

mid-teens, Somewhere in XX% XX%. the maybe to

William Dezellem

a XX% in MLOs? nearly So increase the

Julie Courkamp

Yes. about Yes. That's right.

William Dezellem

how thinking on planning on now? you're in you additional are bringing said, the you quarter. And many here right Roughly, fourth

Julie Courkamp

onboard the month. pipeline in strong pretty MLOs we're X that next got hoping We've the to in

William Dezellem

these markets that prior or X And the and serving? are be serving will the X

Julie Courkamp

is the those Colorado been And between in Yes. the where have Range Colorado Northern and all here Denver area. somewhere Front of sitting

William Dezellem

is the metro the the what expanding MLO Phoenix area? prognosis And for in group

Julie Courkamp

love would do We to that.

we the have like are there to market it's doing We They that the reach job just would and couple have. a a not today. and good

some additional we hire have recruiting So for the been identify to and ongoing have try efforts quarter last over that candidates there.

Scott Wylie

team a added years We about team added there couple a a that you'll this remember We at a were new and of talking there. opened point we and MLO Bill, ago

Julie Courkamp

LPO yes. office,

Scott Wylie

yes. LPO, office,

it So remembering correctly. that, remembering if you're you're Yes.

William Dezellem

guess helpful. market the so that front like Great. and that penetrated that was so to a I the That's penetrated much And seems are is range all relative just reason that under ask under or the I large so it larger potentially about you opportunity.

Scott Wylie

We agree.

Operator

question Brett a with next Group. Our is Rabatin Hovde from follow-up

Brett Rabatin

quarter Wanted Scott, back, go understand to sure make offs charge to what in the the I happened. and

And properties loans the ORE require in sounds as additional of moving which new sure I the a from why it, go to process one more time described you foreclosed my resulted the the mind appraisals so resulted make would those over on understand, a in on that non-accrual it you that maybe there was to loans the to you movement came ORE? up charge-offs, quite the maybe or in bit shorter and the deficit than remaining of loan relative Could balance. that it

Scott Wylie

Sure.

the And my this experts the Brett try. question But if in loan here. can the would based answer we a room in be to So I'll give that appraisal. not another over satisfying on your turn on we that the the books you, with carry to specific I'm successful, reserve

up if $X million a So that to put $X collateral, a in reserve. you're million million $XX loan going think we has

new we I appraisers to books, you're to in got the ordered I ordered to in million you're for and collateral them talked OREO's how it's -- mechanically estate when since line that we and charge all to up specific write So going where think a don't the off we new it I that we and but We works. ones. are have any off. received and you we've going a the going all if Yes, that's our books, know and reserve and have $X get on pay-off appraisals, OREO going then think take think you're loan for do X. values set So real we've new the and reasonable as you're the $X the million on set-up the to

shortly. So we'll here that get confirmation

Brett Rabatin

Okay.

So been million went but went look when now reserves, to was I the peaked but $XX.X difference. million set it's for and But you $XX million the to it hadn't reserve at XQ last XQ the from reserve 'XX charged-off 'XX, from out quarter, when million. aside, $XX at $XX

So million better trouble would to of something. factors change Q than last and it's the which or was guess in just it year, difference. are $X I'm your the XQ I having reconciling mean less have

Julie Courkamp

balance the follows of loans. also it And your

your line So, total loans reserve, as have that overall follows reserve your well. CECL been declining. Therefore,

calculation So of off of reserve, impaired them specific is loans goes supporting the and call based these of it, mathematical it's in reserve what each collateral. that the has general all part I'll into

Brett Rabatin

additional Okay. I color explanation. appreciate the the and

Operator

Haberman question from Investments. next with comes Rlh Our Ross

Ross Haberman

I just quick a had question.

it the basis I is. today? it I I prior touched describe office, Are opened how question. You and it's upon branches profitability think up, it or Scott, those was you the standalone making guess, on you those of money Arizona in a think billings, the would

Scott Wylie

make service have got contribution quarter. X are internally, they And basis every full profit First to banks externally. centers as them a want X of be we they Well, we Western in on both them money now Arizona. call it's locations once

producer us. that's earnings So for been nice a

money office mentioned makes on a loan is it office and third that basis. standalone The I production a just

they're As Julie, far as I know, or David saying yes. both

the So of offices are all profitable. X

Julie Courkamp

he's the And open, remembering I then if Montana. in don't office Bozeman also we know

Scott Wylie

The Bozeman, yes.

Julie Courkamp

full bank, service and, in doing depository Montana taking quite that's Yes. and That it's a well. one's

David Weber

at it's the in roughly the right moment, trending direction. breakeven Yes,

Ross Haberman

areas the quarters additional in to couple of plans those personnel of expand next or Any branches? with either

Scott Wylie

client actually there. you increased how see We our of had to recently. And the was X looking businesses. a X one in really in We expense weeks or client up good that's And I effort part that positive really just Phoenix those we down prospect are definitely Bozeman, marketing had grow ago, QX, when event like at in night things event, what turnout. then think with last

and we're encourage those market for they've and there. opportunities to investing view -- great think them as got growth So I markets folks certainly we that us those are continuing those in

Ross Haberman

sale as either a start something guess, final those would came question way or in the one just there, jump those Scottsdale, small to up I And along anything buy for if you in markets Bozeman? lines, growth

Scott Wylie

is we make your would the think numbers book, trading I work. that's theoretically. discount at to tangible to a hard When Well, stock

expectation and our kind on our is story normal kind and will over asset more of we've prove as become the this achievable. things of defensive that posture growth those shift story our so our we open from back much growth orientation my out XX And quality kind that, get to and months track NIM XX of or last taken

know, we've successful here. history long had As you mean, a acquisitions I of

history the bank. I done XX think in now of the we've

Ross Haberman

follow-up buyback, a recollection just of those announced you that was a still Is had along If small my quarters right, it And is lines. outstanding? couple a ago?

Scott Wylie

a And for as said in XXbX-X is. have place sure plan set up that we Yes, would. we we

function a And number will trading shares place that to criteria a we the we've buy bought in like be And that change put X,XXX whopping and criteria, think of we're some leave stock year how I back. intending is it kind to-date. of not where much the we there.

Ross Haberman

have luck weekend. a your you Have much. of guys. you to bit, very limit little like a good but Sounds The might thank best raise

Operator

showing not closing the call further at to to Scott remarks. questions like I'm this any any I'd And time. for back over turn

Scott Wylie

ratio time going taking I for this questions. just really the for to again want and think everybody last and appreciate NIM dial and as number said numbers a by these we show I underlying the thanks of quarter trends saying, and about all efficiency here we've and the quarter, Well, numbers, in a the earnings good today and the asset the disappointing see quality. were the continue the and headline we Certainly, those positive in talked We NIM coming where that think, in to big the trends. would are the are today interest. core But is Sure. quarters. And the up I expected we to as summarize think one.

short positive increase because great Asset in some really to for a the seem for that are I Those some fact place normalization with quarter producing continue and see. disruption to we think, of seeing big competitive straightening rate And additional markets put with we've yield The see. The this increasing cuts. office the a in strong of loan positive us. The curve to think, is really quality one. are was in deposits us. was ratio, I is out mix short still great financial deposit evidence of term frankly possible positive to acquisitions, to we're term The front that. trends that be hires and pipelines trend

which near We to here real growth upgrades out efficiency to in place. going process play haven't hopefully the I the some But some and are talked for provide us about. And technology efficiency excited a profitability, in nice is those lot about defense offense shift to we going certainly not too. more drive we're ratio and today have term about overall, from think that and gains, our better

everybody, the a So, appreciate and sure you. interest have And Thank support. weekend. you nice hope we

Operator

and presentation. gentlemen, does this conclude Ladies today's

disconnect You may day. have and a now wonderful

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