NBHC - Earnings call transcript Q1 2021 | National Bank Holdings Corporation

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Operator

Good morning, everyone, and welcome to the National Bank Holdings Corporation 2021 First Quarter Earnings Call. My name is Mariama, and I will be your conference operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would like to remind you that this conference call will contain forward-looking statements, including, but not limited to, statements regarding the company's strategy, loans, deposits, capital, net interest income, noninterest income, margins, allowance, taxes and noninterest expense. Actual results could differ materially from those discussed today. subject in uncertainties company's more filings the are which other most statements with disclosed are detail U.S. forward-looking to and risks, factors, recent These in the Commission. Exchange and Securities date speak of Holdings as undertakes to these obligation or no statements These of Corporation this and National only call Bank revise statements. update the

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

Tim Laney

for a substantial capital on to Good Bank share and annualized loans. per our earnings joined with by quality diluted basis Mariama. morning, National exceptionally is low only noteworthy Credit Quarter Earnings Aldis charge-offs one you Officer, report tangible pleased Financial is thank and Birkans. strong particularly total of Call. return joining XXXX you, I'm quarterly point equity. a our I'm position. given First Holdings $X.XX Thank of record This of XX.X% at of Chief

program market growth. share Our has not well-managed to new turned Protection been Pay represented Check we and has attention a distraction our as

quarter for our going am I regard is strong second pipeline fact, very new In with position. the business I'm pleased liquidity what to All in to with speak to this development. seeing

And on to the increases, out growing benefiting you. Aldis, I'll over we focused turn very account on point stimulus-related note, beyond balance simply I'll that that So new client relationships. meeting remain from

Aldis Birkans

my as an rest good the and XXXX. I of the this well on quarter's Thanks, morning, present In financial update give our Tim, for as performance guidance will everyone. results for remarks,

average tangible NBH $X.XX diluted X.XX%. at and assets or on quarter, of income remained of turned share, first our the per earnings return strong For net $XX.X million

in strategically returns excellent expense a of on revenue resulted return control shareholder solid built quarter equity this diverse with and tangible Our stream, XX.X%. credit trends average

throughout originations. quarter taken a regard loan footprint speed us we we As very And started we new to recovery pandemic, vaccination careful a economic rebuilding commercial with our small what of management our credit similar and posture, allowed on rollout this have discussed business with approach COVID with the pipelines. combined have to begin the the and had the

second on Furthermore, total first of finished the $XXX month loan quarter note decreased For non-PPP in the with March the The loans million. XX in quarter this solid we loan I $XXX months. momentum, organic representing gaining deliver loan we were the previously the $XX.X a growth and million, we as non-PPP funding which were outstanding mentioned, fundings highest strong loans. to quarter, expect past But million are quarter. second

deposits. to Turning

This million in deposits. we $XXX.X added quarter, average transaction

asset $XX.X equivalent net yield deployed resulting we million. into funding was of our interest by strong grew taxable $XXX.X the represent Our deposits base fully the noninterest-bearing allowed quarter. curve interest us the earning investment portfolio, and net the by income our increase deposit of million. of basis now to this a five X.XX%, growth this million. portion taxable deposits, quarter, points and of given deposits cost total decreased the fully The the average $XXX.X which And total steepening excess The equivalent another margin XX.X% was

decrease relates days is $X.X decrease that fee loans. to remaining lower was million, and interest $X.X million quarter's loan fewer balance to PPP the the this net due million fees, and The $X.X primary calendar $X.X the This for of which is loan on income of from net-net rest the quarter. is fourth income in unamortized than PPP quarter included The basis. reason X.X the million linked-quarter PPP interest

an position million, our this expect and cash increased excess had our to of excess to balances liquidity significant basis $XXX this our sheet time, At our portion cash maintain of point over XX margin loan a balance for dilutive growth. in approximately organic we calculation. most Additionally, this support quarter impact on XXXX

our remains In asset terms of strong quality, trends. with positive it

resulted decreased a Tim stand As linked-quarter quarter improving end both and forecast just criticized allowance of basis XX% Nonaccruals on noted, $XX.X classified loans excluding at just Nonperforming from release economic on were declined quarter's first total just now a annualized. loans XX% linked-quarter a was $X.X provision noninterest net model to quarter. $XX.X trends, projections million Program the -- the this credit resulting Total These and first one charge-offs basis point loans, million. was decreased assets basis. excellent X.XX%. in million. income Paycheck combined continuously quarter's CECL at a Protection Moody's with The and

than more million seasonal a our disposition several in quarter's $X.X center card This the service on realized consolidated offset charge banking buildings and from decrease gain previously fees of by was locations. bank

increasing reaffirming revenue been Looking regard margins, And mortgage guidance both our has mortgage fee $XX the ahead, rates year to and at full are million is long-term we year mortgage this to non-mortgage residential million. XXXX, in the while rise business, are impacting to guidance this we $XX $XX time, And good the for we with to to our $XX the the a year. are off consistent income banking start With full expectations. million. activity the of our volume million

during center to Noninterest was quarter consolidations the to $X.X charge announced Turning expense expenses. million, which a earnings $XX.X included this call. million our January banking impairment related

the this quarter. by onetime the driven basis was line prior expense increase in higher compensation was with charge, on a noninterest mortgage-related linked-quarter our consistent compensation. The slightly quarter Excluding this

in income as to our the guidance. XXXX, year And $XXX the fee our full million. guidance expense provides be mortgage-related for reminder, range For the we adjustments, of commission consistent to with million for are $XXX a reaffirming veins noninterest

tangible per share, ratio with $XX.XX of CETX book our XX.X%. capital, We strong and We continue by earnings. to build was the value driven finished quarter a

we turn you. the it will expected effective with Finally, to that, change no had I of rate guidance back around Tim, in tax XX%.

Tim Laney

Thank you, to XXXX. positioned Aldis. here excellent deliver Look, believe in results we're well I

have a growth. we're in fortress teams markets. both acquisition-related and support built balance organic sheet, and prepared well We strong We've great to

on continue total We focus safety the for while like Mariama, delivering shareholder on I'd to note, questions. returns our to And attractive of call company. maintaining soundness open up the that and

Operator

first question with Levi Instructions] D.A. [Operator Your Davidson. from comes Posen

open. is line Your

Levi Posen

Tim Aldis. morning, morning, good Good Hi. and

Aldis Birkans

Good morning.

Levi Posen

hear growth I versus demand that optimistic. lending going But is place quarter's is what on the trying side? one-off, market to forward of loan in this attribution on outlook the caution

Tim Laney

the there. believe the we we is imagine, market can you market as -- -- Well,

The it, with quarter. the is benefit we operating the I on started through our we actually, we but quarter, to this only feet new in fact, lift in pipeline, as we going to decision ramp-up. quarter brakes. out holding brakes dissected believe A both that the very opened is we get very to comfortable at we the in feet off We Aldis excited were reality In to about in detail, nice of year have And we actually first a there. -- market's in going the it we year. And as saw and the entered you markets. in And first the fact, know but quarter, pipeline, benefit can as calendar made of of not a up what see see balance markets We our the ramp-up through companies that we're the those refer business this the point. move second the nice from largely the as of year. continue we we're March. teams coming second back -- the to And speak to sheets in XXXX, if we build I'm here to grow saw are

is the as seeing amazing furthermore, excited call quarter, off we or activity the about category bank about fee front. we been that banking another taken we're small mean, income, business see second on activity what has I seeing So front. in really in the that card we're the business month what's we're about excited of here the the April. talk We're to

So balance seen. again, in demand. the of that this reflected some metrics in market, mid-sized has great markets small strong credit that's And given ever we've and business particularly best and very sheets, the we operate

So about increasingly what optimistic in XXXX. actually can we're be done here

Levi Posen

Understood.

your shift you we're Okay. would of Thank say that assess you maybe comes footprint, play? the -- the later potential into innings as branch does that mark And if M&A you. in closures and have to

Tim Laney

where a in acquisitions is always naturally be the what will existing on, focus Look, consideration in we're talking we footprint. M&A, it about our which certainly

digital it going our about And by working open that regard. forward. moved be the expand a either certainty. We go biggest bank consolidation, partnerships go we the you the got I and driver lot convenient closure the now. as in mind acquisitions think how digital we business capabilities locations. think tell base we that's to What as And to reasonably we want I or in it to forward into center consolidating an our banking keep on watching what we've to really digital. A would is, to is arena, of client they serve of out through we've is -- So other driven how transition frankly, continued as as

Levi Posen

forward. the up fee Okay. your are What some for and most thoughts of the just one going the more loan outlook on And going me. buyback? attractive growth With income being guide recent here

Tim Laney

It's really can value are think of for shareholders. solid where all all create pricing about target who we we us

price point, buyer. we're in price And financials so should a confidence markets have we we be that our the going hit lose should and to see and a

Levi Posen

Okay.

Aldis Birkans

$XX As we authorized place. board have program repurchase of a million reminder, in do

are standing we present opportunity by the should itself. So

Levi Posen

I'll back Thank step Great. you. now.

Aldis Birkans

you. thank questions, Great

Operator

Piper with question comes Andrew next from Your Liesch Sandler.

open. Your line is

Andrew Liesch

Good morning guys.

Aldis Birkans

morning. Good Hi.

Andrew Liesch

Nice a the surrounding loan to Hi. in second. growth, the I'll get that to hear optimism

and million, gain, clarification fee out $XX take quarter at on look If just and of guidance about to $X.X the I million. mortgage $XX So, the that's non-recurring million this income

little a below So range. your run rate, guidance

bank have you income Beyond that else currencies, fee see optimism increase? you where do

Aldis Birkans

treasury charge our focus for a -- us. is service clearly management big the No, Yeah.

and business that. mentioned, is Tim acquiring small business As banking relationships on for building

driver a that XX%, that's last a fees unknown. it of there. you at year-over-year The as is basis, that somewhat year. than lower big about look one XX% if on is And So drag, then, behind a

management other evolve. really, So business treasury that's harder your one the how charges. But is will driving put -- the what's service that's the the that finger to on

Andrew Liesch

Got it.

Tim Laney

I all of we're and Andrew, categories. the all And that saying over-deliver the slightly under to, this always promise is, reality will, in on going

that of categories long of performing it's a over to So, it and I even have some comfortable layout. that work what we we history think, back the other

Andrew Liesch

it. helpful. Got That's

there. back loan moving growth pretty to So, optimistic seems

remain growth or that balance to on You on elevated hold you guided loan as remain the cash until elevated back for to liquidity levels to comes sheet.

the about maybe fees get do think then, how it's think you more X.X%? and margin, should roll a So quarter? we the And low that together reached recognized this PPP at point

Aldis Birkans

given to It's a the liquidity. percentage finger Yeah. hard the calculation put on excess

income interest that, look looking really identified I -- through components, that, at component -- if we fees will still that depending decreases, there's the we returning, some the taking back would way income. right? that on and is speed. the at $XX we out. that million and million the So look net PPP, unamortized our some our PPP close as would you of what's forgiveness you it at come cost ways driving out right? have back -- margin to other be point Then the deposit interest And from it'd we growth net decreasing the on big go $X.X $X.X out We will But on interest here to loan expense. million, grow if And

points I the basis two year. reduce by per we can of on for think remainder quarter the that

into So there benefit that. is a

backup here, as the portfolio well investment maintain look our with yield impacted I yield we the certainly But lower the there, rate rates to current as been where was. can think levels if As by that portfolio, portfolio environment at you well. has our the at in

fee on timing here from and grow, recognition. the of the and then layer PPP you interest out, So net income should

Andrew Liesch

Got it.

Tim Laney

going very a forgiveness of But by being low-cost that to It's on programs optimism our off But excited was receive development, stats about already the to advantage moving and disruption programs since I basic the with our deploy about the taking this get what We're at businesses, loans loans lot last focus It's clients. we course, market into -- forgiveness, the existing of so would taking just with able teams of with mindset was XX% you at for of yield on for share math. point equally if XX% Phase liquidity of our will important, help for that base but we having that our the excited very the of return focus been we're in liquidity do. of with those course, to faster X, could that our And midsized these loans large we're so having team some PPP remarkable, submitted new it those been be. sitting out better look capital Small growing have. could it. of that of clients the mentioned because we of our supported PPP, we to X, about frankly regard the business that take and to SBA care year paid. on about to Aldis over opportunity occurred clients, administration those our

low-cost is, position with this it new into to that answer your liquidity money. So redeploying about is through and I coupled lending the fundamental would relationship capital taking question our say look, opportunities

Andrew Liesch

Got it.

highlighted growth case? market as is -- as the being loan that base Is existing is clients now? from of going share of have or borrowing there main now guys opportunities your Or still forward. gains driver You the there

Tim Laney

at details but an on at you, front you -- all it's if have -- of on Well, with pretty true us industrywide. that this lines use of lows. and is share probably But running credit the in because historical revolvers, think can line numbers question of of the look I all running of you of we're We're you. kind where we're the important draws,

return sheet, sitting number reasons a of there looking But we're that. balance as as on you clients but to I holding think nice cash be, serving of them to lot well, the -- long there's a just these for they're there. averages just those us, for for at the excess historical with their a clients, industry, time, would and not so again, upside, over expect on going is that there's you're to Now and

upside. all that's so And

Aldis Birkans

sits to low, at our Right, utilization XX%. line point, Tim's Andrew, all-time historical

Our XX%. typical between XX%, draw line is

loan is And when there $XX lines outstanding drawn if so million about back million it, in upside up. call to, $XX and drop those of get those

Tim Laney

small that Just in one category.

Andrew Liesch

you great. back. the for color. step Thanks. That's Thank I'll

Tim Laney

for the Andrew. questions, Thanks

Operator

with question Andrew next comes Stephens. from Your Terrell

open. is line Your

Andrew Terrell

Hey morning. good

Tim Laney

Good morning.

Andrew Terrell

of And what of Tim, focused XXXX? the discuss how market maybe any I of kind in vein in maybe just this the hoping of just overall hiring kind shaping of you've new hiring the share kind success just hire in takeaway. share could same had on front? then you you're pipeline was kind and is year for areas up

Tim Laney

interested message Yes. -- if I I is teams and bankers you're the a any would for to us. and to looking talk come send interesting home,

the team talking of be and to if rewarded, If to And better. and you've track you. record individual in in an a a well you're it's want got performance versus we're interested that's frankly, even footprints,

to retaining reality loud there's for So talent, going a be I that is think that as the and to markets, and think an an do challenge. hope -- war to in is industry bankers that But we as and message That's overused in midsized Look, track delivered with to be attracting clear. grapple with strong going have the small is I commercial speak. particular, records growing proven so a I phrase. it's

we're the of so more think developing that's our our And own spending bankers. for culture. more important time We and

we they focused size abandon smaller-sized larger and almost up are a some them giving But companies. market to opportunity of on bankers, lower example, as to certainly think the That's teams, in of bankers covering. tend than creating firmly they to and of out we're happy, more for financial young particularly to for I for terms and coming important in of company institutions talk bank the runway migrate it's growth. mid- talk

Andrew Terrell

your from, Okay. lean market you And then of the as just back guess, year. throughout kind this ease I into -- into back

the but kind structure Just compromise from of what the relates competition that's And you're your as have how pricing you of origination seen seeing? kind from of affecting it on specifically so yields, and far any perspective to kind also a peers?

Tim Laney

Yes.

to not commercial of various seeing good just on a as operated willing you've The estate also continuing I lot areas had a is, feel this as space, been direct real from is interesting this XXXX, in lean office very area banks and But prospective And back into certainly all to just we're into been seeing and level that strong very say that. been call of of for they we've to think part, out in marketplace, retail But you better for that's to percentage an bankers very, clients. advantage the we doing we some returns early And estate commercial fortunate most just what's our reasons we're at can and our backing of always off result seen pretty a industries, increase be an right year, getting than a or equity, exposure meaningfully know, to into exposure about I of of of are. with a space. pick with good or lot to is reality real open opportunities think be guarantors going very strong this set we're on while operating I've have are, to traction across low coming a like got markets of the believe now, that point. capital. interesting they broad sponsors risk-based a up we've lot our the markets reasonable in

Andrew Terrell

guys my taking Okay. question. appreciate Great. you I

Tim Laney

you. Thank

Operator

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

Tim Laney

the first straightforward the you, as to move quarter, And that it about the second we Again, not XXXX. through thank questions. noted do want was thank we have ask quarter. think Well, but Again, those we see very I optimism ramp-up only Mariama. you've a I

delivering focused to next quarter. you that, be you. Thank look and we'll on So talking forward against to

Operator

Instructions] [Operator

National Bank (NBHC) 23 Apr 212021 Q1 Earnings call transcript