NBHC - Earnings call transcript Q2 2020 | National Bank Holdings Corporation

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Operator

Good morning, everyone, and welcome to the National Bank Holdings Corporation 2020 Second Quarter Earnings Call. My name is Mariama, and I will be your conference operator for today. At this time, all participants are in a listen-only mode.

We will conduct a question-and-answer session following the prepared remarks.

As a reminder, this conference is being recorded for replay purposes. capital, remind including, this statements and but company’s loans, to contain call regarding non-interest like non-interest strategy, statements, income, forward-looking not deposits, expense. would you allowance, conference that will the income, I margins, interest taxes, net limited to, Actual could from today. those results discussed materially differ subject risks with uncertainties, more company’s recent filings and in forward-looking detail factors, which These the to statements other U.S. the are in and are disclosed most Securities and Exchange Commission. this call, as undertakes only statements of Holdings update the These National of Corporation and date no or speak Bank revise to obligation these statements.

in Investor today reference financial Holdings non-GAAP for call the introduce addition, National Mr. National Holdings useful and the Reconciliations of pleasure Tim which on investors. non-GAAP measures section Laney. my now President Bank release www.nationalbankholdings.com. to In believes information Bank and provides will turn is provided certain the these measures, posted the over GAAP CEO, to the Relations Corporation’s Chairman, of Corporation are call measures It news

Tim Laney

you Risk I Birkans; Good Holdings’ earnings XXXX Thank you, our quarter second Officer. our and call. Bank National for with Newfield, Chief Rick Financial morning, Officer, joining and Chief me Aldis Management have Mariama. thank

on. presented challenges the continue address to We the COVID-XX pandemic by head

in income $X.XX annualized $X.XX basis charge-offs a net the X loan $XX.XX. per per During experiencing the quarter, share we share realized of while of resulted points book non-performing quarter Adjusted net growth tangible ratio. also of value just to decline our during our in by

environment what conservative liquidity seeing. during protection sheet reserves I reasonable stress provide XX.X%. the downside underwriting test X to equity ratio flow periods. and our in represents growing LTVs, I’m during Tier like to legitimate The balance coverage and continue our common to to with challenging our a tends approach, fortify solid Underwriting cash We the current with quarter capital

Rick the average that pandemic. far. this we’ve during on benefit also the national priority, our bank performed the Rick? to than asked Ensuring from safety the of We have and remains actions top better speak thus COVID operating soundness I’ve to front a in markets taken and

Rick Newfield

Tim, good areas three cover comments. Yes. morning, everyone. and in Thank you, I’ll my

briefly I’ll credit and second metrics performance. – quarter quarter first sorry, summarize First, our

ratios the third, modifications describe support With prudently the I’ll we’ve completed mitigate portfolio XX. to conservative quality. clients. to cover credit quality Program to held up through I’ll working Second, the we’ve asset our exclude Paycheck well. loans, trends view I’m risk June taken COVID-related within of note to more respect a discuss metrics, showing I’ll And actions that the credit Protection while about asset our our thereby

decreased at loans March ratio quarter XXXX. non-accrual to X.XX% non-accrual June X.XX% with from Our improving at our XX, XXXX XX, the during

classified June March from remained but at than loans at the XX, X.XX% December relatively ratio lower at X.XX% X.XX% Our XX to ticking flat up with XXXX. XX

The payment for these deferral. positive June interest Our modifications from total loans. relative pandemic and executed annualized. in cover XX. XX, were at trends payments well-positioned XX% modifications by our portfolio to to XX of driven XX% us The points through the detail were March loan the will credit of versus XX, at during presented total the X very December low were challenges with leaves have basis XX.X% required for from clients asset worsening comments. Net Cumulatively, that XXXX, quarter stress. a and make and unexpected days was Aldis current on this deal non-performing ratio quarter strength $XXX,XXX XXXX. March XX continue X.XX% the expense more or and provision and continued economic only charge-offs his by basis March plus X.XX% improved XX dues outlook our XX-day to we improved points XX to past points full X.XX% at basis economic of to

current after XX-day our the expect payments contractual of during to the clients initial majority return modification. the to regular quarter We

to In of X% management loans. our of payment fact, our total teams further myself Tim, and as today, and continued banking the our fallen modification loans have on of about process. intensified percentage a portfolio refined has

are as and exposures specialty all on banking at either higher We risk larger weekly or reviewing banking clients commercial with basis. sectors clients well as business credit a

status client’s assess to actions we impacted pandemic-driven the extent our cover reviews, put and trends. this as us position revenue Not We restrictions address as the these only discuss clients, trailing During weekly advisory to our they’re versus with discussions having debt credit take needed, quickly well as of deterioration expenses minimum client’s mandated to by quarterly revenue has jurisdiction and operating and required particularly payments. contractual more bankers as and weekly in a has to weekly a each faster operations on trends. enabled detect but to be

longer of revenue an hotel negotiated with vast have conservative such sufficient agreements average been Beginning are likely set operating payment loans in expire, service additional payments, levels, average cover rates have loan path clients. terms. and began we hotel and interest-only of to total representing well we on Based underwriting to benefit and at debt recognize and required the additional To-date, clients and loan before our clients the equity X.X% We re-stabilization. recovery. certain cash to loan-to-value were most a any expenses each road of clients levels modifications with forecast protected working this on hotel agree ongoing face portfolio forecasted to to conservatively our XX-day at from our to June, a we of will that our stabilize of XX%. majority sufficient our initial successfully further deficits While majority daily represent to able to occupancy infuse contractual by clients our only

pandemic. stress equity infusions to our potentially other the well-positioned additional loan the our I from believe is hotel the enhancements weather structures, Given and exposure to protracted

direct convention centers where gaming, and funds. services, pandemic’s hedge impacts malls, as and the exposure, no energy continuing cruise Given casinos we lines, have noteworthy aviation,

and dealer loan book. portfolio We’ve COVID-XX loan year a by was was and no continuing recent consumer outside plan, in coming capitalized. L-shaped our I loan auto, non-owner which portfolio, twice on no with of severe strain. a a car very the have said leasing as to recovery exposure. the an believe focus commercial years. rebound just occupied I’ll stress We no diverse out stress indirect a party assumes card granular only to and floor by to credit as weak cost, tests is model, The estate loan most of economy In those underwritten total recovery, and loan maintaining the other real elongated Tim key commercial on and path we the completed XX% in our an value the pandemic relative well remain the most conservatively PPP tests excluding over to meaningful conducted point loans XXXX metrics. also scenario

sectors loans well concentrations now over and our the concentration diversified across at all industry self-imposed to are well We limits. with levels less below I’ll of industry most total remained X% or turn Aldis. call

Aldis Birkans

you, All and Rick, right. morning. good Thank

to was centers. our share. results million a $X.XX net charge quarter’s consolidate our banking As related decision in per our Included income quarter’s or of second was to XX this we diluted non-recurring reported yesterday, $XX.X

million the prior for charge, $X.XX quarter. adjusted from $X.X Excluding this increase EPS was or the $X.XX quarter pre-tax a

our and the In solid and This strength demonstrated us of the results. bank difficult that allowed these quarter’s our has times, on economic financial has built over years. to while the resiliency results clients delivering and uncertain focus associates, safety financial it also

$XXX.X loss X.XX%. deposit it balances core transaction the realized to we credit allowance ratio quarter, in our banking million deposit and increasing the to loan XX.X% residential We our funded grew to XX.X%. record for During revenues improving loans, the reserve PPP annualized, added to

higher performance of net second pre-tax than the was of million for XXXX revenue quarter financial XX.X% generated and higher strong pre-provision the second quarter Our $XX.X first quarter, XXXX. which than of the XX.X%

quarter, originated $XXX.X new we fundings. the million in During loan

and as quarter soundness our on were clients with had to our ensure our However, this working already bank. safety Tim focused the of existing and Rick mentioned, efforts

of were such, $XXX.X fundings loans. loan million As PPP new

in $XX from opportunity decrease decreased primarily view We down a this pay debt. as our as some the activity portfolio quarter. loan reduction the credit, of loans, prior by to clients revolving of positive. Excluding driven by million their the our PPP was a took $XX.X million The lines

deposits. to Moving

Our average annualized. transaction grew deposits XX.X% a very $XXX.X million strong or

The detailed XX points a inflows fully million from newly finance costs net basis as basis million, quarter, low and lower provision client to summary I’ll prior established in $X provided decreased allowance as the well Our our quarter. quarter this mark trends, decrease a expense strong relationships. accretion credit transaction a well a Rick and saw quarter. decrease on equivalent interest totaled decrease $XX.X by XXX-basis the The taxable average XX base existing one-month as points both from just rate, deposit deposit we income our LIBOR driven income. this touch the was accelerated loan linked as so of point

driven Moody’s as quarter’s March this provision Other our $XX.X nominal was a million model reminder, forecast. As $XXX,XXX, worsening XXXX forecasts. than a charge-offs covering outlook just for the net macroeconomic macroeconomic by of CECL the expense compared incorporates entirely to

index key macroeconomic national the the allowance drivers unemployment home growth, forecast GDP Specifically, as models and retail our sales price rate, calculation. incorporate the growth for the

X.XX% X.XX% PPP, the finished at with loans, compared prior an as ACL terms end the of year and to we quarter at the loan end. prior excluding In loss provisioning, to total quarter the of X.XX%

XX, loss Additionally, portfolio. provide June marks in interest the that marks held credit million acquired they through in margin against to portfolio. we net loan and These of protection loan from also as XXXX, additional accrete $XX.X loan continue

sale the record and the driven The was was originations. was During pandemic activity million, Needless however, of This significant our say or $XX.X than lower prior realized client somewhat on of quarter for our exceptional income by the residential group. XX% $XX.X our lower due mortgage to second as was million offset gains increase income to an quarter, slowdown quarter. loan we this quarter we consumer income by residential which service mortgage in swapping non-interest saw higher restrictions.

quarter are of volume, top XX%. record to able of Our widen our mortgage team XXXX. the generated margins origination the double On teams almost volume, by record that second

same quarter, year. loans increase from the $XXX.X in closed mortgage million we During second quarter new a or the last loan XX.X%

activity within refinance are we While the driven monitor environment, the low purchase is to strong activity an by factor an important market. that rate continue experiencing we

an and are team job from our new strong. activity footprint, homebuyers where remains we the supporting Our housing operating in benefit markets doing sub-bankers within excellent

market result, As purchase a represents year-to-date disclosed. on the a the a XX.X% of solid basis, mortgage total

to expenses. Turning

$X.X second of center announced previously the higher non-recurring to non-interest the primarily The quarter. million the the banking The compensation $XX.X variable related activity driven by expenses increase than and quarter’s was related million the was mortgage expense prior residential consolidations. to

quarters, several has compensation related our past As the expenses. total the the so banking has residential which activity elevates increased over to it, variable

to expense, break quarter, a was few million center $X.X the billion mortgage to non-interest $XX.X to consolidations. banking due $XX.X So million and non-recurring out the expense related this components off the activity was

quarter, in clients. $XXX,XXX we the additional protect our also took from to During and incurred actions we COVID-related associates approximately expenses

been quarter to banking consolidate XX quarter than regards this this month, expenses to our nearby banking footprint. we earlier numbers. announced other items, adjusted the these of would closures our Excluding into In similarly have slightly center planning within centers first locations lower the are

client confident digital year shift banking center banking $XXX,XXX convenience is the will fourth of the that the with our centers, We mix non-recurring online be clients each we total consolidation expected are realized of the during serve to and and to million expense preferences see approximately neighboring And quarters. toward of engagement healthy be continue to mobile and third we well. yet for $X.X of all banking. client with The

strong the Tier a finished common quarter. and these XX.X% charges tangible equity regards to lower we annually, based earlier, expenses on end the $XX.XX as to at forward, Tim the capital, anticipate in ratio, our by our less X out a $X.X we pointed back by to year. we Going quarter one-time grew approximately than actions, million operating $X.XX book earning value With second with of

economic solid our dividend past payouts, the tangible as has it with period the you. build as quarterly this, reserves covered the value I’ll Tim, as turn to aside book this Over to COVID-XX-related results set of covered increased have during financial well more a than meaningful address quarters, back weakness. four X.X%

Tim Laney

Thank you, Aldis.

management We assumptions into a credit ability averages believe under scenarios, leave believe we’ve well running a approach range are protracted benefit a capital to clearly than range of deliver that our is markets consequences address the tested Further, We range economic of deliver that severe performing of our in economic across we that level the well-positioned suggest prudent our dividend measures. national ability of to stress XXXX. the better dividend our strong. to We a are of COVID-XX crisis. driven end us from and operating to stress and operating

the as we in believe, continue for our our during loan Rick our are remain vigilant teammates, call downturn. also this We to pointed serve will clients, balance portfolio us diversity ready work course up our we out, the Mariama, Most and protect of Q&A. open to sheet. that well to of our important,

Operator

Your Thank you. first line D.A. Jeff [Operator Instructions] comes Rulis the question from with of Davidson.

open. line Your is

Tim Laney

Good Jeff. Thank morning, morning, Jeff. you. Good

Jeff Rulis

credit Thanks. as morning. thorough I’m was overview Good and the as, heard Rick, this And I succinct thought as quarter.

the appreciate detail there. I So

fronts not maybe offered those but the guidance half? environment, questions, touch we on indicative maybe into some thoughts back I’ll On of if any the expenses typically maybe as on even the mortgage, but you’ve on headed margin specific say just

Aldis Birkans

take we thought quarter. there. earnings earnings basis the the call good late the to and it be and most liquidity, the last that’s calculation third assets, By I’ll second have in margin with last late that starting took our now, behavior it be will here or margin. it the It’s guided three in solid kind quarter. items changes March our way guidance a been going with that of starting behaved impacting in go deposit is in we’re place so for priced here build of hard and itself quarter forward quarter liquidity excess Yes. Certainly quarter’s this rate on

payoffs deployment asset timing impact clearly third mark, The certainly $XX.X as market I to see still the still be then downs, late accretion we or million mentioned some in is will calculations fourth in important have pay going the slowdown PPP for important. yet will quarters, earning of accretive, those for be forgiveness the loan and second speed So quarter. us of being did and margin and purchase I

impact margin income really as right interest in that net the is think and will And it. time. I’ll quarter focus on second in most what So say is, growing is that good I on as interest the of priced forward net look rate movements. of speed we that though over the that I we income the important. That’s news the mentioned,

able look So to grow should from made hold else assumptions no we, here. all PPP on here and We then equal, loan timing. to be

Jeff Rulis

Yes. And any thoughts on...

Aldis Birkans

you this more variable given I I out bit time the know much a mentioned And expenses on mortgage little expenses, the to residential how expenses, broke contributed expenses. the compensation and

were out that $XX.X obviously you those if mortgage, of of to $X.X and mentioned, strip items non-recurring, items. million I $XXX,XXX COVID-related million So three then

with going improve number bank it thing. $XX You’d forward. that we that’s $X.X banking moving core annually and that’s to number, low that’s look number million the center – that And the million down on project come number type the the up really type on the announcement on – based consolidation we would of

Jeff Rulis

was – on in a PPP did quarter? the thing, include deferred Okay. those you And there benefit also comp

Aldis Birkans

Yes.

Jeff Rulis

the you did that revenues? in booked net When

Aldis Birkans

look is if and on at so our to the tables, net fees that you and defer about that’s the loan we’ve the you’ll what net founded what remaining. footnotes net, the of the we but that’s comp reflected $XX.X component see fee book – [Indiscernible] million, books

Jeff Rulis

– this, you. even on closes Great. continued in I is thoughts least front, but the And strength year has that on where piece? the that piece commentary the the that Yes. – it just mortgage QX, just last Thank at mortgage anticipate the any like wouldn’t as

Aldis Birkans

and rate environment mortgage, forecast difficult very very still to low we are clearly is on. It’s Yes. the

Tim Laney

still you Jeff, are on?

Jeff Rulis

here, yes. I’m

Tim Laney

the busy we’re background. signal yes, now Mariama, in hearing

that. can You check

Aldis Birkans

be there. year-over-year of building purchase quarter. focus realized we And this it’s given the that steady mortgage, on a holdings forecast volumes is market What with on in to obviously terms

our expect We will don’t here for to, is are operating XX% on mentioned financing. quite favorable clearly that are as the say in third margins refinancing that, a increase. to are bit, to I environment on the the I volumes in – hold this second quite markets able that I quarter. but going We quarter, last markets. to good second given able widen quarter, the teams were

Tim Laney

would Jeff. almost of from team our the for on pretty based proud benefit in I be to focus for into from believe I’m obviously markets – organization. third ball, banking activity pretty we But be work and solid. And has that obviously of healthy residential people entire did the no but add, a our an moving continues again, residential like part that seems actually Aldis pointed very be as markets. being will so crystal Colorado, very what through banking to on out, leadership space. it’s strong or increased well us. We desire we’re There bodes quarter seeing, one the on

Operator

Your next from question comes McGratty of Chris KBW. with line the

open. Your line is

Tim Laney

Good you. morning. Thank

Chris McGratty

morning. Good Tim. Hey,

Let amount to me the understand income, was much we accretion trajectory I but I this said I in want of the quarter, accretion. to the was come going interest the FTE back that was what down realized? net just make take you know sure basis forward. how was XX reported kind Aldis, it of

Aldis Birkans

basis. yielding to it that that on type the while – get a – that you’d X.X% that book extent an accelerate The to look lose you coupon acquired yield underneath the book at and that the so additional is it X.X%. accretion that’s is though on it. book The yielding And and can mark. the of way is basis I typically amortization, is really it back asset The outside you XX% on driven X.X%, you payoff to XX% loan is closer prepayment can see amortizing book about annualized the that is about into is

science, yielding. X.X% it’s where not it’s So that an is but exact

Rick Newfield

kind that quarter the we your on pick didn’t in an accelerated any marks to this, pick up but stood last point didn’t we any up out. of And –

Tim Laney

That stood out.

Rick Newfield

Chris, was be tends know, you nice it’s pretty reporter it As but light. second when that sporadic, to comes,

Chris McGratty

Okay.

So – the did take X% fees loan. start quarter XX.X%. with maybe start. – I The if from PPP? I Did maybe If I’ll was in you realize a the out PPP any

Aldis Birkans

We... Yes.

Chris McGratty

of Or that more is a...

Aldis Birkans

Yes. We realized over period. two-year amortization

take a realized million we’ve months – $XX XX So and... over

Chris McGratty

Okay.

Aldis Birkans

three worth about fee or And months that months – amortization. memorization, of of fee two-and-a-half worth

Chris McGratty

Okay.

this to sense liquidity trajectory get a obviously kind everybody. a guess, the from kind is to in grow of what where margin and it makes trying build going trying next concludes of challenge is for kind I’m is, I decide the here, to But I’m Okay. of for if of to going comments the NII bottom or couple it margins might to see be just loan growth on the quarters? of NII out

Aldis Birkans

think I type I of bottomed trajectory what – will kind can then, asset we’ve we of component of realization, out the growth. excluding how accelerated here. And fast earning mean, again and fee the be

Chris McGratty

Understood.

Tim Laney

Chris, balance I would This focus Tim. look, first in that, would foremost the this sheet. on our add. I add is is protecting environment, and

at necessarily yield. credit like at talking be Needless on So to with are time that’s continue to also we We’ll almost existing versus share. are, to don’t looking certain it’s pricing take to appropriate think an the in with see they’re clients opportunities way We some today. insurmountable indexes and levels well thinking up the starting that’s make renewals pricing required cases, are to with interesting of about happen to working that market of at every what the say, of to LIBOR underwriting renewal be additional about opportunities or the opportunities. picking index we additional overall where know advantage look understand that

we’re our marketplace there going think clients of not this opportunity number into sheet opportunity We hard running we the the with are expanding think there. with is balance unknowns with that out be existing point there to but at So, management. yield is

Chris McGratty

for question in. think we want the was that maybe color And last Aldis. just marginal on roughly about But the how about of I I could Great. comp, Understood. sneak kind revenue. you efficiency understand, to ratio thinking should of did The mortgage You great, that the one be $XX if do business? about ratio talked how marginal Is that $XX.X million of of efficiency business? understand million

Aldis Birkans

XX% at year-to-date be think we gain the representing to basis should on Yes. compensation on it’s summarize mortgages, is, sale sale where the I would I of variable way And or gain mortgages. about running we’re best if of of looking say is the

component. variable the that’s So

of Now embedded there a all and staff that. obviously component shared fixed is and facilities if services

is the above running that in the ratio. So, long efficiency XX% run, business still

margin quarter quite were mentioned, driven that profitable as again, I we in business. This

Chris McGratty

Thank great. that’s you. Understood,

Tim Laney

Thank you, Chris.

Operator

question next with from Your comes Stephens. Gordon McGuire

Your line open. is

Tim Laney

Good morning, Gordon.

Gordon McGuire

sheet earlier morning, deposit that and a I XX% such balances. curious if transaction I’m outflows. the start in the Good about there’s the growth some it’s quarter be late could was large came Maybe Tim. job might growth think trying be with continuing, anything transitory average of balance you touched of size but the to just more that here? in Aldis, I’m that from

Aldis Birkans

question, of we had serve your the That’s funded them. and of it on in put and finger I one on got with and got it ton most bank. have And as deposits is, talked of the our transaction put one, are about the day a our PPP it, this. for spent but clients the our to loan we those bank from account primary at book that entire a – and most hard sources think a looking we banks And heard time great other I you’ve think the kind

a to the time, all. those the say, liquidity hard to feels it that, dollars Other leave like lot as they come gathered bank. of it, how we So from there’s certainly and be new dollars if of lot not utilized get than relationships just over it’s it, it’s And likely a we’ve out part of most relationships. that are expanding that and our of have of want system to get retain in used certainly

Gordon McGuire

maybe then, necessarily right existing share in clients, market portfolio not the now. loan Tim taking And more Okay. focusing mentioned

starting your XX% off excess gets that of of this should assets? the So I the how guess, – plugged probably that securities liquidity grow quarter strategy book? now liquidity with to liquidity the into is be fair I portfolio think to to the that say about

Aldis Birkans

will be it’s I be mean, I to potentially going mix Yes. conservatively. a think

and certainly today. the I low deploy very will growth, into it to in tie ready it duration be think we want loan don’t longer up to I yielding asset

So smart we’ll about that. be

will leave long again. pipelines we it cash and wait on to for some I be think opportunity of turn and the out might in hold

Gordon McGuire

I’m targeting and Tim, overhead that And or curious whether this to you’re of could if there that specific with the the there be is with Okay. efficiency office any consolidations, come on side house? targets, more

Tim Laney

the track Gordon, believe that of in area that the Certainly and have know a on we your would most record to team, expense. to strong nice this, have continuing question a be to As specific listeners know, brick-and-mortar manage answering of balance And pretty between more I recognize that we still we you as identify and is opportunities to an continue digital. better front. focus runway right we’ll certainly on

balance we And talk about serve have that we other well. front. at seen work on opportunities level, going targets, the really are, said at capabilities. the our while not with as before, digital strategic I the to that tell reducing rates we’ve quarter The we’ll in pandemic, XX earlier today expense. COVID the we’ve nice prepared thus look adoption announced institutions is to our that we’re work like to really can or specific amazing I’m confident better a And runway far banking With way still I you, clients on that branches continue while centers

Gordon McGuire

it. Okay. step I I’ll back. appreciate

Tim Laney

You bet. Thank you, Gordon.

Operator

question from with Piper next Your comes Liesch Sandler. Andrew

open. is line Your

Tim Laney

Andrew. Hi,

Andrew Liesch

morning. good Hi,

Tim Laney

morning. Good

Andrew Liesch

usage. me. line. referenced follow from expected also bottom for savings cost consolidation sounds the you But It the the to the branch increase like is questions in follow-up Few technology

is the savings expenses? these some be reinvested just right look straight benefit or the back So to cost franchise, can at way of is into it to is

Tim Laney

you delivery an investing been But the that last our over look We’ll I channels. company in effort that’s continue in underway is our to would alternative years. this of tell at number

that any And in so that’s those areas, in spikes something expected not we’ve forecasted. terms big of

pretty current investment. We’re rates of run our with comfortable

Andrew Liesch

I that back just is bank, parking thanks. the was can you growth it to anything at the deposit from still was beyond it? Okay. PPP mean point benefiting certainly but Yes, helpful. That’s their as And driving then you exceptional, that to referenced, circling there money recipients

Tim Laney

our Yes. working around down with think us. we lot We solidify. starts be were that with to May love we that do here already didn’t a expecting up kind relationship. we PPP, in environment depository And work but on the in if expected operating have company. of be philosophy business were to also clients expectations, our step way able business of the the potential the all the the saw on disciplined seem were and that see don’t bring as all had we we regard. very PPP of saw relationships open to that PPP of this we one doing moving benefits them depository full it them to them focused it, particularly teams of and unique economic of bank we to a of We of banks disappointed I a to result of to their we to weren’t as – on with to core the response but country, they when was, their prospects willing operating that’s the first were program business high capture largest unexpected in just us road business large developed where in number new the with happen we with being meaningful and business a in because of their of number

anything So I Rick, don’t know, would add. you else Aldis,

Aldis Birkans

our expanding continue as relationships accounts. grew we We

in set. by relationships, or is the driven and say, that I it should – of sort I think broadening

Tim Laney

I driven the us the what end confidence exciting many the markets. as well. Andrew, day government operating deposit measure the in discern with of is can’t new much we’re By that growth. me, just is at pumped core consumer what’s we because think relationship in Aldis what liquidity for the and growing. the in how of can commercial we’re not way, And how nice that’s but seeing business But respects I just relationships by focus is this out, pointed balance some maybe important the into most is growth just small

Andrew Liesch

Okay. color That’s very Thanks helpful. there. the for

Tim Laney

bet. You

Andrew Liesch

then also that the $XX.X that to then on be PPP million reserve we really just question, to curious that referenced including loans, the but discounts. should at X.XX% follow-up ratio into just ratio. add in there. look I’m And excluding reserve the right way you just $XX.X million if the the circulate one to allowance Is the

Aldis Birkans

it’s by mark with doesn’t at certainly, mark of matter protect. the to look, purchase those I protect. is was we credit if trouble mean, to there was whether loans generated Well, It there or it time any have on that is rate, the – interest that

Andrew Liesch

you you what, remind get If add mark, everybody. to the

Aldis Birkans

Yes. book overall into loan basis The this so overall points – is is X.Xs. the the XX market – we points, up worth on bring high and worth itself basis comfortably book XX sorry, or

you as it book bit quite to narrow these purchase If the of and rolling it so is and loans are X%, as X%, view maturing a even a it we protection its kind off. protection though

We are realizing through it income. interest net

Andrew Liesch

Got you.

stronger is that reserve the than X.XX%. arguably So

Aldis Birkans

Yes.

Andrew Liesch

great. Okay, Thanks my questions. for back. taking I’ll step

Tim Laney

with Sure. your Andrew, was a question? that dog

Andrew Liesch

so. think I Yes,

have I been. think it might

Tim Laney

We absolutely All right. can relate.

Operator

call questions closing I we I’m remarks. showing have no Laney you. will at now time. to Mr. back the this further Thank his turn for

Tim Laney

joining continuing thank I’ll everyone the and safety Mariama. simply day. and health, care. just you you, their – Take Thank for continuing wish

Operator

call. conference today’s concludes this And

have be or and If of listen replay website on and X, release will also of will available telephone replay XXX-XXX-XXXX by day. August great to an available XXXXXXX. very online it Thank this call, would like approximately XXXX a in company’s this ID page. the Relations on hours Investor the referencing dialing call earnings you and through to of beginning much you will the be run the conference XXX-XXX-XXXX and The two

You may disconnect. now

National Bank (NBHC) 22 Jul 202020 Q2 Earnings call transcript