NBHC - Earnings call transcript Q2 2022 | National Bank Holdings Corporation

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Operator

Good morning, everyone. And welcome to the National Bank Holdings Corporation 2022 Second Quarter Earnings Call. My name is Kyle 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.

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

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

Tim Laney

morning. Good joining us. you for Kyle. And thank Thanks

National businesses Bank performing markets discuss our our continues on financial produce And quarter medium Financial second by high Aldis we As Birkans, results. I'm Chief and small results. solid focus operating Officer. XXXX in sized joined Holdings to U.S.

remain delivered record We underwriting. loan in prudent quarter XX.X%. another teams of our Our of annualized loan driving growth fundings

with the severely tests losses board. strong we Tier ended cumulative operate XXXX assets Furthermore, using with for leverage the approximately and We adverse continue losses, scenario the positioned if assumptions very non-performing we quality the record cumulative in to end, work X%. from of with low our asset ratio took recent X a and trends would DFAS, used stress the well consistent are whose with the shocks. sheets quarter To businesses economic positive balance across that we

management and having Bank, momentum and of in approval to Hole I'll remain track that fees. acquisition. to for about attractive Rock their new We're The approvals, Jackson Our contributions more Aldis on Canyon gains am earning the and front. our we Federal performance. just clients the that Bank in very about that these resulted on progress the spend Birkans. note, imminent two good deposits of on approval solid transaction from received our the more of we we focus feel And on relationship treasury growth our on I'll share and call time Reserve making regulatory our optimistic the for full their market teams, over our financial I banks turn Aldis? with add

Aldis Birkans

you Thanks our joining Tim, and call Thank this good quarter. right. All for morning. earnings

of For earnings the we million or quarter second XXXX, $XX.X share. diluted net per $X.XX reported

of growth. bankers loan delivered another Our quarter solid

strong. well managed bank to exceptionally announced we remain continue on Our costs. the be closing expenses credit remains the acquisitions M&A related on and our note, million quarter, and during The integration related of in the $X realized had And quality previously two track.

as And loan we million grew another annualized. solid record. a loan which XX.X% funded During the in result, a was quarter, quarterly $XXX.X the originations, portfolio

have and economic discussed high of national we metrics the in aspects operating economy. fronts, As many to continue we will benefit outperform earnings involve in markets rates prior impact the inflation from rising that on many our interest calls, rapidly

of activity pipeline We are XXXX. second enter pleased with as our half we the new relationship

positioning. increase quarter's quarter. from quarter. increasing the was increase The net balance loan. a total asset was payoff income And at of the an an We net acquired of points of an by by benefited prior trade rest cycle the decreased points. sensitive XX basis to interest also margin rates fully from basis record the X.XX% margin nicely XX basis second the accelerated sheet low The during this with sensitive cost was equivalent taxable XX driven this Approximately and driven or sheet entered deposit early interest balance test interest point

for net margin the X.X% in be second NBH’s we interest ahead of to X.X% project XXXX, to the Looking range. half

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

net just and this The three four annualized basis assets second nonperforming points both quarter’s NPL another basis ratio ratio points charge-offs and the were quarter. the decreased

$XX.X of risks from economy, fully U.S. allowance X.XX% and quarter. increased of of ahead second the Looking quarter recognizing total X.XX% reserve of decrease at the or was second quarter's at to The from The mortgage CECL income rapidly second down to rising income materially the quarter's slowed entirely the the as end credit provision decrease million the Total the $X.X the our noninterest first volumes. first mortgage million loans quarter. end increased resulting mortgage lower due million. $X.X a was quarter rates was expense linked residential

higher Additionally, loans of a portfolio. this quarter portion mortgage retained we selectively in our

total service quarter charges linked card the Our spending on told, annualized was XX.X% activity linked client both account engagement XX.X% basis. basis. for grew and quarter and consumer bank revenues strong grew on annualized business Similarly the

XXXX, our second to costs. the ahead total million of acquisition Non-interest range. million $XX Looking income and to projecting million the of we $XX totaled expense included half million related are $X in fee approximately for $XX.X be

efforts. acquisition flat run and related the the management relatively expense rate our quarter was continued reflects expense with these expenses, Excluding first bank core

to second in projections these costs. XXXX, expense are exclude M&A range projecting be be non-interest million half we the For clear, million. $XX related to of of To the $XX

equity ratios X.XX% capital common strong Tier and XX.XX% our common X Finally, tangible ratio equity. at remain

they mentioned deals two remain So already M&A our track. on

in are that, strategic throughout financial And we the these of more deals. the our about transactions benefits with and with providing look As will to forward to guidance the you. on becoming these have back we working summer, we turn teammates quarters. Tim, it been optimistic increasingly coming future I

Tim Laney

is is We to our revenue balance while capabilities streams major scenarios. remain Thanks an growing and committed we'll for our enter prudently results and any shocks. will a sheet platforms. leverage of It's to quarter, also that Kyle, solid maintaining expectation sheet fortress cost for diverse balance AOCI that Aldis. deposit the I avoid that to array on also I'll we our up attractive questions. future. new as My company to to enhance on geographic delivering prepared that our and well like we're third broad also while we're noteworthy growing unify the low lines momentum continue today base. well you a positioned across building note, ask economic also be operating We're adding And leveraged while the focused for open our

Operator

We our Jeff Instructions] from [Operator Davidson. Rulis question take first Certainly. with D.A.

Please open. Your line is go ahead.

Tim Laney

morning. Good

Jeff Rulis

and Tim Aldis. morning, Good

Aldis Birkans

morning. Good

Jeff Rulis

to the – this of more the for have customers sense behavior the deposit a that of on – on exited? get chasing idea some of the deposit just Any the group balance Any of may the do of question the comment there the get sense runoff. of A was or on you some wanted with were linked rate that depositors quarter? group kind notable change some segment sort by

Tim Laney

bet. you Yes,

new very what operating to core depository front. be focus relationships what focused new what our the to you as good growing transaction We we’re remain need time had think We deposits. of in growth on to division we accounts is relationships, on whether and I net or deposits. actually we versus refer operating feel on would accounts consider that

frankly, chasers our comfortable move of detail. And the growth the good and on we’ve to Aldis CDs, tell you, letting would any I throw true relationship for then some time-related deposits on with rate accounts. about I’ll core feel been So in other it

Aldis Birkans

million our we basis, an Yes, you Jeff, on a grew transaction in on million $XX at, basis, if average $XX average quarter look deposits. balance of actually, deposit linked

contributes of relationships. through component did of no in quarters So Tim ebbs no averages and loss saw flows loss the is two of what spot really in asset balances kind earning of to But clients, funding terms quite was we What between. real growing. as we mentioned, well

and average. So again, on balances core focus the on growing is

Jeff Rulis

there some on number said, can just Aldis, like the than we think you saying was a timing-wise? the timing Yes. you’re but so average transaction issue linked period the really deposits track do end fluctuations front up, more was of that quarter, that’s you

Aldis Birkans

correct. That’s

we a client accounts. of of and losses certain balances it’s and obviously seeing a any time at account bit As analyzing business not spent quite even, looking more

Tim Laney

CDs focused And deposit I’ll again, we’ve business. time on stress never

continuing comments we other Our core and feel about we’re broader strategically where the that good on relationships on move front. to share focus to transactional is made gains. on directly ties market it And

the as depository Our means relationship. focus is individuals, capture clients. on expecting new earning the or full we’re we’re bringing relationship medium-sized certainly to businesses small, with That on

Jeff Rulis

kind keep, date? to you two you book you in you well, in see that’s On of you so do seeing moves any and think see deposit the then you initial And within adjustments? any are guess, – on are of what seeing anything see or that that you want rate own any what I pricing? pressure core market, core Do are that a been on do you customers rational to seeing market your questions –

Tim Laney

of I some earnings mean cases, focus the been rate medium-sized in discussion the of credit bulk seen small we’re capturing mind, and it’s operating in accounts keep pressure, businesses, is – our and some bulk nominal. we’ve but around

operating play we out to crazy. or judgment to with focused There’s have like markets we’ll going to we’re game, the business those based we’re comparing I are just pretty let there of chase relationship on always individual mean accounts. calls that somebody blunt. going that in earning and often what rational that’s the than front. there, be you’re them but yields personal on feel being we’ll I’ll deposit client. the On around stay going interest of not not on on we’ll be rational. And fortunately, But always some side the more tranche banking, the – crazy the And do are nature

Jeff Rulis

mentioned what impact saw we decline Great. like on to cash. kind you Aldis, would equivalent kind of you normal little more you the cash margin impact get a Are the it’s when more a of balance a a past, normalized kind the impact impact – cash of back bit Maybe of Could go. you get you’ve the got when approaching range-bound cash that that when of sheet, level? in on more the basis? be in to positive a of to and Thanks. kind to you of the

Aldis Birkans

to think loan I the have we some liquidity look No, Yes. in sitting growth. still in that we’ll deploy excess

XX be the to calculating very has second – quarter. to dilutive cash the margin for a cash point the precise still basis So impact

payoff I we – the in margin basis early table. points item in specific one one the margin acquired mentioned, Now from XX obviously in as that line is visible benefited loan

in later kind that and environment, rate get out, that to the here those of account it’s very you July. guidance take So to provided with not close of does back surprise potential I an actions today’s the in X.X% X.X% once no margin you to necessarily

Jeff Rulis

is that that drag, is to taking zero? to a it XX level Aldis, Or basis comfort? point is taking that historical cash of

Aldis Birkans

to It’s historical. the level Yes. taking of

We’re cash our will to always million that $XX for million it, hand we properly. just needs hold to liquidity on intraday purposes and $XXX manage make call of sure cash liquidity

So those it’s taking to historical down levels.

Jeff Rulis

on end for timing the two could the well. And your in by say Canyon the it’s two conversion to the that on its if of it deals PEGs you then Thanks. expectations checking last maybe quarter? it remind on Is the you just Perfect. third timing, just well And it. safe would closed us think obviously, those like Got as one, seems Rock way. approval, of

Aldis Birkans

on Canyon, timing mean, I is the Fed’s with on which approval, us visibility just received gives Yes. certainly, transaction. more that Rock

speculate this at it’s that hand, in expect nothing third is event Canyon. be Bank our no, third get for quarter. Jackson that do Hole far letter we we the to when but not we understand, until it’s what quarter point Again, a to whether So fourth or going behind,

again, fourth terms a start it now dates reserved more quarter providers, that with and on of bit In our a integrations, event. Rock can we Canyon core little have planning is

Tim Laney

say of on do whether to Rock of markets banks. are indication have approval them, known there you’re I’ll each very that they’re we’re from issues a absolutely with contribution or there of or talking pace. relatively and in. Jackson perspective stress Canyon And these closed no these the just since And teams we getting approval again, again, fast increasingly want these I’ll I any related grow either be no say Bank actually the discussing integrated about Hole, optimistic and issues the will that of about to

Jeff Rulis

guys. Thanks

Tim Laney

Jeff. you, Thank

Operator

We Liesch Andrew with Piper Sandler. take our next from question

Tim Laney

good Andrew. Hey, morning,

Andrew Liesch

morning, good Hey, guys.

Tim Laney

morning. Good

Andrew Liesch

a past, some the residential of like slowdown appetite to you the Question on the mortgage what’s to on lately? residential Is Curious, tracking this seems adding side. a In loan here. just near the for that XX% the were growth has sort more been XX% given in It here that the of high one-off What there products mortgages? growth this right that end. of business mentioned grow the was quarter? quarter you range. But

Tim Laney

and are on did we’re retain as paydowns focus. and the What’s that of second growth unprofitable. the about fundings strong Feel of really to of quarter small to going add space moved in cases, scenarios. focus given in at. teams payback third their it not different you would extending. with is that the for confident looking in well. of majority intense deposits, global I I the just And I And We to business again, on relationships quarter. and the quarter cases, you we’re in chase any very remain few medium-sized what environment will we on of away hyper-focused tell not have And XX.X% to of is small fundings. intense as Yes. just income or sheets move we quality some the sources vast a we driving away out again, see these should talked is medium-sized generated quarter the for very on businesses. focus these of growth businesses the in about say alternative focus paydowns. our We level price. or of business rates on as well. of we’re strategies not capable But balance number going a interesting good Intense annualized that did certainly, of a offsetting also more relationships cash were businesses loans beyond we meaningful really were temporary coverage, about fundings the a liquidity business the have than are economic very, this in and were at flow addressing side And few coverage and still look statements on offset believe, deposit on management we’re But that

know we not I near went we’re but of or wouldn’t – business. no not that lot kind in expect I and tell plan and question, not residential. I my for our I as credit what medium-sized or I’ll we exposure of broad clearly consumer don’t of bad card wouldn’t good. we expect holding heart, carry balance consumer So is small trend carry focus do. to dear kind also matter, sheet Andrew, any or it’s on a we’re floor any that beyond that’s also this consumer growth the It’s out though carrying something auto exposure, your just and we’re suggesting add

Andrew Liesch

have helpful. an to Got focus Yes, the of be it. mortgage more but commercial some That’s growth, on side. of still nice it with anomaly the being the may

a makes that So lot of sense.

from price? loans Or other just you? to the on loans it structure take was left, are on compensate people seeing On that you

Tim Laney

tell an really fortunate do like to was There’s what for as we would with fortunate. exception the part, I bodes always markets competitors. that to be pretty we’re rational markets rule. going you would most feel it But primary for in. think Again, to operate the No, describe well – And the business we’re I the I largely price. I

Andrew Liesch

some you of kind us think XXX level reserve? next where build it mean, follow. do of flatten, is guys factors I And how view couple of increase got the with to in reserve little just mean you’ve the a want this that quarter, the But – is to in similar quarters? bit appreciate possible of a you Do this model just Is there. I there’s building just it. Got on macro obviously, the think you you the

Aldis Birkans

No, how if is economy Yes. outright certain already to what I scenario change quarter, the What talk hard it’s outlooks can evolve. – Moody’s not assuming the Moody’s here is say slowdown, are using recession. will about and we the in the models really economic or current that will how

the be view the as scenario it to in just we – increase. we – But that the drove that future drove – model clear, terms it and very need is appropriately the way mentioned the underlying in all reserve I is today. – again, outlook So that conservative for

look down, XX just to down, past down, our NPAs terms down, it. have down, that’s you better NPLs I It’s XX classified a the had driving XX is loans If our at OREO outlook performance. mean plus of dues metrics, dues credit credit past in down. not could portfolio quarter

Tim Laney

business something again, small we prepared reasons my we in it, the coming ended I But to sheets is with look share the talk pandemic. in going portfolio, the shocks, before, that of zero. lot programs of these will dues. But repeat at all I’ll for mean, – say, we including there years seen I’ve I’m this are of incredible. the I some when companies. the for loan of funding a banking, had quarter past of we of just some that and zero out government of balance being economic not about

the better fact, zero end never I’ve for they I dues prepared portfolio a for we of on my could companies don’t think past size. be a bank of years, a downturn. quarter – seen In all my In in

some perspective. additional So just

Andrew Liesch

we’re But the question. for will guys. the thanks taking environment step Thanks, I in. back. Quite

Tim Laney

You bet. Thanks again.

Aldis Birkans

Thank you.

Operator

next question from Andrew Inc. Terrell our We Stephens take with

Tim Laney

Good morning.

Andrew Terrell

the to half good margin to X.X% interest Hey, wanted go for X.X% year. the just for you range of net guidance the Maybe – I back back morning. quickly, to said Aldis,

further assume already increases clarify past we’ve to and wanted Just what make doesn’t that gotten, rate correct? sure any

Aldis Birkans

correct. is That

Andrew Terrell

in step-up half we into just Okay. back costs is deposit guidance, the assuming kind work of And Or that of there… the of kind year? any think as you about you then are as

Aldis Birkans

Yes.

fairly are that we in – are so again rational. as the discussed, So we markets

are that rational. not major sure, very seen clients. our rate a competitors competitors for to It’s we Our and offers haven’t increase say to

margin, of in So any assume rate that deposits. increases saying long is does way I project the not when it

Now does it’s certainly, not start if July, XX, will to again, here market federal having in overall imagine basis hard on be whether reserve points, it more XX or increases XXX pressure deposits. that

of and sensitive. value again, that in are But offer clients. So we’ll are fair we competitive – our terms we asset and make to react sure what

and date. So that, of has covers not, that the asset loan the if repricing we it at course, exceeds expect way least to

Andrew Terrell

then And able for you on you. coming Okay. in to the Great. production you quarter. of X.XX% Are versus the new the loan was quarter? originated the given past, on kind in think in have yield where Thank share I maybe quarter kind production guys the of second yield new average

Aldis Birkans

Yes.

new fundings was weighted our quarter’s rate average X.X%. loan So second average rate

So really was and certainly X.XX% we To last in for or was accretive to first in or quarter. high for handle, dipped late part we where first – to a closer most that in last quarter that there Xs. two the X% year, quarter perspective, X.XX% held put while

So happy and the – bankers rates. loan funding new terms discipline The discipline it’s of have X.X%, very had quarter. the throughout our about again, in the

reflect does later that movements in place a necessarily took that the rate not So quarter.

So more I third to in here even or expect so. that up the drift quarter

Andrew Terrell

it. questions guys you and a quarter. congrats Got on my Thank Okay. great taking for

Aldis Birkans

very Thank Yes. you much.

Operator

to forward We’re Kelly KBW. moving Motta with

Aldis Birkans

Kelly. Hi,

Kelly Motta

Tim what for quarter. you you so bit below Hi. your year Maybe for Good the Aldis. Thank new the guidance had implies and guided that’s a expenses, a morning. last rate run much on question,

a of the with if yours other help years? or function pressures, expenses a that’s things revision for if doing is since keen lower past mortgage, to know been if wondering there’s several you’re the Just mostly of control focus inflationary I that

Tim Laney

every opportunities continues to company at efficient. our will And to to be and and as be continue more realize look really function be in it we

reduce to then, that creating another our two be clients continue discovered to itself watch to expense. impending we’re And opportunities network. acquisitions, to we also at have just processes to in banking world thinking of to and these way that banks. look we’ve our as with We at practices attractive some those going some really personal to continue that believe center the to rationalizing look It’s the synergies, the adopting practical of opportunity migration and digital two banking lent we’ll

as operating So I And and expect of I my Aldis our expect, add. what around in I improvement earlier said, comments, leverage. you the would trends you see in I’ll to ask positive

Aldis Birkans

Yes.

revenue well. down driver primary certainly on guidance the commission environment the our as So as to current guidance the mortgage the is market adjusting fee we

If invest but the out efficiencies the and bit and years have core the what is multiple we what on is rest a the rate the for you very remains banking expense that is to to unify that up clear. round mentioned. that for little have as initiative we and look step run and managing implied build to of rate at now the had today and be year strategic guidance in, continue a is It there’s there internally focus Tim finding of

Tim Laney

the real that’s key. And

fine flow appreciate You’re mortgage. going continue They’re on to really core. the that a with The to key the real see improve doing And doing I and to we’re natural our ebb team’s is what job. front. focus

Kelly Motta

Got color Maybe appreciated helpful. and loan hear the know usually for and it. I I And didn’t That’s the I you earlier all guidance missed year, growth that. give really the it. outlook. on I

if what you can quarter. you’re still wondering outlook the after that competition that’s that pretty you’re towards reticence confident was some hold Just pretty seeing, strong if pricing or a

Aldis Birkans

guidance. heard I an Well, exact me, give you right, didn’t

to over The activity. – grown full certainly want don’t of I the control. And down is quite are XX% second only go XX.X% the that today is to to caution increases we have real quarter, we strong. that pipelines we slow outlook out guidance Just we our are as our around, potentially XX-plus-percent on XX%. basis, The year track mentioned, impacts we don’t pressures deliver date of inflationary could a the that borrowing promise need. what that something and see real rate And the are really know in call in having that the year business to the a are just

Kelly Motta

jumping question But last I Maybe controlled. deposit a was obviously very side little. helpful. well for the That’s cost I’m on me, it one around know Understood.

betas have last room much Thanks. here side Just guys You guys your the had and the wanted as you thoughts. hear outperform overall lower Is on to would that up you liquidity than funding there continues deposit lot suggest balance a wouldn’t fed of in again quarter. group rates? sheet the crank were anything betas

Aldis Birkans

us again, on asks comments Well, that to will others what do.

So Certainly, can more basis a on our zero last What is that. through deposit funds, I the basis do we’ve beta around cycle. go least say call point all XX seen and I had can the XXX increase was to it fed full points at that in beta come. today. We’ve rate

next a leave can as or is bearing it’s we is account points, ancillary hard how tell we much – money offer, increase their Tim very to whether type approach part. our the operating for a gathering certainly the do leave that we But liquidity us depend comes people savings an So mentioned, whether the product that us. businesses rate most accounts, obtaining operating which time margins. which on comparative or But it is on to grabbing market that to all it’s with believe it and the of that accounts excess or basis with deposit will the down primary non-interest deposit focus of basis point relationship, I hold full building on is XX efforts, a it’s focused

Tim Laney

And I’ll just focus. and that say again our again, is

paying the core medium accounts from not earning accounts, business accounts core of operating individuals on accounts, earning and sized and our free We and their clients are families. small focused simply

Kelly Motta

This a my for second half one you. is Aldis, rate Thank for of question quick to rate, half? just it. good tax use last Got now. Tax back the the is really year. this modeling

Aldis Birkans

not in therefore yes. not just incurred It take very going does to is to income be the on will have certainly down answer so. income clear, any expenses, expenses the The M&A. because assume quarter. again, And M&A down I the of non-taxable is XX.X% tax mean, rate we more change which second related taxable component and

with we if end again, would of our high is probably But I any don’t XX.X%, once M&A project say start range numbers the real realizing So we of costs. M&A.

Tim Laney

I’m like I all Kelly, to hearing you come morning, what questions. all this up I feel Aldis pepper real I’m Kelly, analysts like see be going hearing with. the modeling feel to I’m of curious yes, with –

Kelly Motta

all the appreciate modeling the all too. color the well, just operational and really as on questions, guys on I help the side not

I really Thank you. appreciate So it.

Aldis Birkans

Have You bet. day. a good

Operator

question Brett Rabatin next from take with Group. Hovde We our

Tim Laney

Hey morning. Brett. Good

Brett Rabatin

Good guys. morning. Hey

Tim Laney

help we you? can How

Brett Rabatin

Can kind in at question be got I the I'll us see and level of take relative going in the of margin – deposit first maybe back fed have was just half positives deposit that year. about another increases coming any some and margin forward, margin of than to you the thoughts assume XQ, it you've obviously, going like in more just the from to the as are back give half All two here? the banks guess margin this crack XQ? mini think but on the to wanted would you expected than to betas you're on expansion, the fair the the of year quarterly higher it hikes somewhat the muted more of solid

Tim Laney

fair they're a be right very from the that's certainly back assessment negative and out is little here a or at more I not really. going the zero to to because increase remain muted think going that deposit bit to betas

continue here cost in second quarter. to We our decrease

or margin date. think little muted what I some seen to future that So bit deposit fully than increases, a be benefit the new there we've be up will will pricing rate from understanding

Brett Rabatin

kind sheet like acquisitions, deals, that improved thoughts half any liquidity the Or little portfolio? the two two the sheet back the will margin. half on Okay. these us management the balance use manage combination look of in in Does BA bit assets And a additional the obviously the relative with year of sizing? in with the of does you you what added balance the to can stays being this give mean the flattish the balance kind current year that to of to back quarter, sheet

Tim Laney

deposits I the in are $X.X and cash call billion two to of billion in are assets. recap again Well, total sitting on add approximately two in balance those just themselves, million combined about billion say that loans, to going institution sheets will Yeah. $X.X themselves. transactions $XXX it $X.X

bit a So obviously going to for which look and route is gives a environment or our certainly betas the And will that maybe provide a whether betas, manage time and what the to aggressive. certainly – freedom more flexibility, lot the third deposit with us very be talk conscious value of about little growth, on do and a us will is having anybody does what the in potential that we of at we've be a on pace to the preferred or seen again, adding portfolio. then, long and liquidity investment and, option the in But of the rate certainly to what done little would maybe more loan deploy we manner we've chasing that to print. closing around as then book bit not if our into with originations aggressive year-to-date, on of the much, continue risk tangible that and point provides AOCI ton to-date and that terms early the Tim's

is type very and with be there. – high any, all So duration would is short a of asset that focus risk of reward that on move

Brett Rabatin

terms mentioned Can you given And the of just any to book Okay. AOCI. us then on give in transactions dilution those update two you initial obviously AOCI? tangible

Tim Laney

Yeah.

and Hole so Rock Canyon a So Jackson what one dilution, change book we to XX% tangible put for what the now, right update day those so original value guidances we X.X%, of dilution. had Bank reason Bank, X.X% value called tangible tangible book or had no value, in decks combined book the

Brett Rabatin

is, interesting the such can't earlier, seems of just – better like mentioned, environment question worried seem obviously a that there's than alright. to implications quality. it for is you strange much are get one it's the then, that's most a Okay. the for And in. Tim And on things industry, of a recession credit such the we're and and credit and maybe like just it but investors about market credit

Tim Laney

Yeah, exactly.

Brett Rabatin

than this perspective that that anything of portfolio some like, or out wanting that think in you just Yeah. anything but to from in? with up I that you anything, terms everyone's I bigger asset Tim, categories there at or should what the kind mean, is of be either more guys you look look say, on class there to about other worried hey you would consumer a world, be easing you circled out, your is in as degree, mean, as have you're watched lending there

Tim Laney

think I businesses Well, transactions a player national fundamental not the medium small we're and not knitting highly syndication, leveraged tend areas in that stick fact with like to sized that we real in around risk We're our performance different worried bodes well that economic real have track based commercial strong hence records low of of capital. for relative estate cycles through about estate, us. levels to commercial always certainly

You but same could the certainly, observation. everybody has

and of be certainly about that's repayment. and could commercial to secondary management critical here cycles. more we cash the issue again, what credit estate third flow to even the have ongoing sources monitoring. front fundamental that's But a coverage, are believe think pull experience Should concerned. these of You on lot of And through real to diligence areas is It's we're you due really back talking what understanding arguably certain coming end? global enhance and risk a I and out importance on

so that more said no sub-sectors with as our And I get absolutely risk. to to we've number frankly had do like tend strategic about that able energy think bank just senior with any not do able to to heads take decisions the being volatility nothing being or industries lenders, ESG around exiting of a years to particular don't of outside to ago and

Rick see that we or a can't volatility, as would see risk sectors suggest level they also we his sub-sectors if risk earn adequate So as where not on and of we to, identify them, can't will as I sectors call but really I to particular we afraid out any exit we point returns be can't today. debt, bank adjusted here senior team, sit

Brett Rabatin

Okay. fair enough. the appreciate color. I all

Tim Laney

Thanks You Thanks. Brett. bet.

Operator

no I'm turn time. And you. this back closing we at Mr. Thank his I showing the further call to for not questions Laney have will remarks.

Tim Laney

National in Thank want for your interests great a everyone thank Holdings questions day. Bank you, have Kyle. I their and And

Operator

And this concludes today's conference.

and also the like available XXXX, a the to company's available and The great approximately this through hours dialing much will have and telephone Investor beginning referencing If will four the replay XXXXXXX. run to will be be of you very replay it would July call, Thank website earnings XXXXXXXXXXX, release listen code this by in on you page. pass day. call online on of XXth, Relations and

You may now disconnect.

National Bank (NBHC) 20 Jul 222022 Q2 Earnings call transcript