ALTA - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Altabancorp's Q3 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today Mark Olson, Chief Financial Officer. Please go ahead.

Mark Olson

good and Amy you, morning. Thank joining Thank third to our today financial you results. for quarter review us

Joining morning and and Chief Credit me Williams, at Executive Len this Officer Officer on the of Altabancorp; Altabank. Judd Chief is Kirkham, call President

at results release will and earnings visit or released night. presentation, financial presentation copy a website in To our please Our comments obtain to www.altabancorp.com. of included today last refer announcement investor our our earnings

fact are other expressed of Our number historical statements. caution or by by earnings a predict of Litigation that than statements. by inherent statements control involve important of We statements results contains cause which the the forward-looking and the factors of to These the many could forward-looking statements. Securities release actual statements forward-looking to risks forward-looking All or those difficult and Safe uncertainties, such statements beyond projected listeners in be readers forward-looking to company. provided Such Private are of from XXXX. statements and are intended materially for covered Act Harbor implied Reform differ

Forward-looking over assume duty now update statements they statements the of law. such by as to call no Len. except required Len? turn to and made the speak I'll as are only we date

Len Williams

hope our solid Thank reported the economic organization demonstrating am you We I to the meet and you, of are grateful loved and welcome you, in to Mark. safe. I with your to Good our difficult third for and strength call. morning, and conditions. to this opportunity earnings healthy respond quarter, ones

payment addressing a clients government Federal if programs, with the financial passed and for government. expect we needs. additional participate environment, provided relief to continue the funding own well adjusted in we PPP relief have clients our to substantial associates Our by SBA unusual this participation as our We loans as to financial on to as clients' programs, our through focus and

clients current overcome pandemic, proud our how strength quickly leadership them to and I'm how where to altered and work to emerge to assist provide path unprecedented We've financial to business the as on our responded continue the twist. seen with work. incredibly their hardships. we and how to and work will We recovery, all through have solutions this associates dramatically of we

Our team needs still addressing to are many our working whom we assets. continued technology from continue electronic while home, has we focus ensure the on of to our of clients' protect associates,

whenever our solutions to Our salesforce offer continues we possible. connect that to ensure wherever assistance clients with and financial and

support in rapidly we secure areas office so our and we a deployed did back While safe environment.

We shifted continue data new as a operations security to delivery appropriate method. ensure our to

our moderate COVID-XX or presently state's developed index The high. pandemic company's moderate Each receives counties where or a week. index. The categorizes directly transmission high, branches low. Index, which transition of of The are our us. visit the on they level to allocation of the associates every has transmission the We and for work are of continue feel the ensure clients our of and and to stability and that continue associates to a safety their to our majority technology also to office of able to that focus safe ensure home. associates from families protocols We've resources cleaning branch and locations our through plan county as rating correlates State located enhanced spaces a Utah response Transmission COVID-XX have

over tax corresponding working other associates. from our the helping do Approximately, the masks locations continue our unable branch moves we program, workforce XXX all will distance and in back and participating medium only, in public branch windows all in associates the the safety county by the pay needs, in lobbies are our are of -- actively swiftly health clients' office to remains our appointment ensure socially funded the responded administration while low. clients, home until PPP to open. by of million remain to require the result, of transmission to Program a At locations in Paycheck and small business worn and crisis, when including be $XX our to index the we of outset associates over Protection available inception As XX% our drive-through regional To or small PPP. loans, size have we Since businesses. of so from

the under the borrowers loan subsequently applications $X received have totaling to or on applications the not to loans, and totaling we XX on far, received Thus We with just denial million. SBA, million SBA. a have $XX for filed of forgiveness date submitted forgiveness XX% forgiveness have XX any

We are fund our offered receive SBA Reserve loans. capital by facility participating to in relief and loans for the Federal PPP such the regulatory PPPL

expect of PPP XXXX. quarter have of our We to processed the loans forgiveness by SBA most second the for end

applical restructurings loans relief for payments offered loan million. loans also PPP were these accounting to temporary loans has We pursuant applicable approximately or our borrowers current XX% COVID-XX XX.X% greater entered has and totaling $XXX total a to leaves the performing were balance deferral XXX not agreements. the pandemic, modifications This flow loan excluding individuals, not payment ended To-date, address of Since these XXX made loans There four to to regulatory days troubled XX% loans, impacted for loans, have a We by for payment considered with To-date, their $XX,XXX, into on to or or on million expired. to borrower's are are pandemic. or any guidance. not totaling redeferral totaling businesses -- XX prior small SBA XXX borrowers we deferred, deferral challenges. $XXX program deferral. loans period that who cash after still of and only payment be totaling $XXX have extended debt borrowers the payment XXX borrowers COVID-XX million relief agreement

borrowers to quarter $XXX balances clients and us It either important However, quarter with do apply who from million that had deposit made increased renewed deferral by able be -- provide monthly resume of payments. so XX% have after clients that period. by have will have who deferral XXX% payment loans who borrowers to we payments payment XXXX. many small million loan a making the through flow, their is to make to for periods. loan converted the used of cash we TDRs. expect agreements increased who deferral payments of they their held SBA seen their for to a particular, will note had deferral on In payments funds the continue their requested additional would or be of held third anticipate who percentage to Approximately these have to or to or have deposit first balances been deferments our otherwise monthly these that requested $XX on average relief make to their clients cash We

across remained Our overall relatively low. portfolios charge-offs asset have quality and have XXXX our improved throughout trends

asset losses. quality losses begin stimulus current We programs and charge-offs see positive end. to XXXX, to our cover come of in is payment expect to the allowance trends and expected deteriorate an relief government increase adequate beginning the loan We to credit for to our effects as believe

losses. if monitor performance of we closely However, overall credit macroeconomic loan determine and expectations the for we to portfolio should our continue conditions our adjust will to

economic that an to communicated to each end turnaround. sheet for months, we of the at an and balance past be our cycle the efforts quarter our XX were based prepared our Over wanting we've perspective economic fortify on

strength held anticipate we sheet our our the believe and safety While balance economic result downturn the is of our We strong certainly allowance did us and provides capital by credit of our to would losses pandemic, balance the position. regulatory in level that stakeholders. not a for sheet be strong security reflected

our In underwriting focus standards of tightening and and ADC years over our our help mitigate loan portfolio. pandemic have overall may negative our real to at estate effects the concentration past addition, portfolios of will to reduce loan the the the commercial couple on

hotels estate, assisted of arts, motels, consistently position the nursing our for in our the Utah We're commercial the These recovery The performed approximately strongest an the year-over-year, which fortunate continues and nation net we flexibility Utah's than work liquid the believe families perspective. at us in State sectors Nationally, portfolio able second sectors Utah by economic of individuals job jobs entertainment vast -- operate as and to could recover year-over-year nation XX, recovers. September most by lowest has is industrial better the believe state X%, impacted overall the here. loans nation total the was majority outperform for the that continue any business recreation. loan immigration, during change negative to tourism Utah is by on the was as nation of from and the nation. decreased is one XX, is small. unemployment and lowest We retail, exposure extended which at restaurants, and economy while effects liquidity rate to experience third the quarter, decreased September as in construction and whole of of pandemic. home change The grow indicator states Utah Lastly, rate jobs and effects these be particularly rate include U.S. in the and a year-over-year the or the will economy an sixth pandemic real home and while pandemic. of COVID-XX of to from year-over-year X.X% for unemployment had X.X%. at secured states beginning the we the from are to economic unemployment that This the states actually in has X.X% the end as the period. loan are jobs an X.X% living portfolio, Evaluating whole. of leading other in aggressively facilities, in our strong business the the our economic potentially Despite a XX% of jobs, Utah, is a pandemic as the increased negative provides

X, Directors of of equity return quarter dividend a for share. was The Despite quarter, believe of for the fatality The and rate the XX.X% XXXX. XX, in with third reported ago. turn compared $X.XX now for quarter quarter The declared compared third our $X.XX million dividends return quarter XXXX. third a to in the XXXX COVID-XX per effects over which of November and assets November of quarter of back XXXX XXXX, the of of for a financial pandemic, of million XX-year of be the shareholders of quarterly nation, $X.XX XX.X% quarter quarter earnings was the Utah for we a three the compared for the $XX.X quarter compared the we third Annualized more second third specifically year third dividend I net on average Annualized X.XX% and was onset the the by on state X.XX% $X.XX XXXX. the common XXXX dividend will the This on ago. for payout ratio to pandemic. and third and of the any lowest year company. XXXX Board income second XX, for of mitigate continues the third months quarter, were also as third second Diluted Mark for quarter, for for the XXXX was second will the share XXXX. $XX.X average nine per X.XX% negative of the the paying with to payable will discuss the the of Lastly, for XX.X% million call for quarter the record for to September common to the payment of for XX.X%. trend performance quarter $XX.X ended earnings

Mark Olson

at pandemic. used billion begin period by credit total period September total and throughout with in $XX.X total XX% year actively for loans the We with increased deposits programs, the billion cash $XX.X and $X.XX $XXX September for losses or both held year to SBA for in XX% $XXX compared with period million decline [ph] mortgage as or September to governmental increased at XX% XX of increased the September resulting held COVID-XX negative And Thank at in significant on earlier. businesses throughout deposits XX bearing deposits businesses to to earlier. shortfalls with $XX compared investment $X.XX with credit income mortgage XXXX, or the period $XX.X cash at to million the $XX.X September million the $XX billion year-over-year loans loans end September third address reserves loans and The Quarter-to-date $XXX you, the XX% or result investment year deposits to million and Non-interest balances allowance X.X%, consumers a increased deferred $XX.X X.XX% $X.X primarily million that million increased September same at again XX at earlier. million a year adjusted The are because or XXXX. and our ago. was XX% borrowers million of billion and Total for the XX loan XX Len. average to deposits quarter XX compared to ago. to million banking increase both is to billion compared XX. XX% ACL to interest try a million earlier. result PPP losses bearing for relief bank and anticipate the XX% to the compared the government the from primarily consumers the same or allowance will $X.XX a deposits in from effects or the compared increases volume same Loans conserving counter The Loans at year economic payments total where million same X.XX% remainder increased denominator, $XX.X million $X.XX XX% year increase payments billion million with held Total at year $X pandemic. sale from assets at a division. of Non-interest were our loans the to to a billion a to Removing make increased X.X%. as for of compared or grew of quarter, bearing in the X.X% $X.XX to deposits. $XXX total which guaranteed to September XX, of deposits $XX.X is $X.X increased at the for XX, September grew for billion

decreased with in X.XX% income or securities earned for coverage in $X.X The capital XX change XXXX. increased with Lastly, was The a such or increase of investment periods, million the change $XXX with comprehensive $X.XX December year remaining from outstanding fair million XX.XX% ASU XX to election XXX% XX, loss of this to September assets other accumulated to a XXXX-XX investments equity full at September adoption primarily losses, Cash our XX% rates the million cash and CECL XX, earlier. the at September intervening risk XX, accretable and to in first capital compared assets $X.X income impacted our interest take September dividends resulting ratio ratios XX.XX% to in grew of company's loan were XX. XX.X% X.X%. assets assets Total ratios XXXX. X.XX% XX ratio of then overall based $X.X from portfolio allowance credit if September for and amounts regulatory at we million at of the to paid company's at million was is the shareholders. capital September non-guaranteed liquid or $XXX to at the discounts against decline securities total value ratio add compared Non-performing the Non-performing by XX.XX% impact XXXX. at compared XX, at XX September total $XX.X XXXX. due billion total year-over-year December capital negatively regulatory were The million was during XX.XX% $XXX quarter XXXX. XX September million compared adoption at and company's at with or the to leverage Shareholders' compared net during

third $XX.X period to same million year income Pretax for was million quarter for statement. $XX with earlier. a income compared Turning the the pre-provision the

comparable or margins to the $XX reducing from offset interest income the decline the narrowing increase million non-interest million and same and the period The for higher billion assets narrowing held and core our year liquidity of yielding to average XX% X.XX% had earning interest investment declined quarter or cash XXX same the a was in a for to margin The and average third by to in result from net for amount respective quarter on comparable securities stemming assets assets result compared interest The declining primarily result based income million for is Yields or average for period million amount mortgage average average XXX X.XX% us cash activities. the basis held periods $XXX for and $XX.X ago. compared if primarily been deposits, pre-provision third us keep a by cash with $XXX expense on the The a period $XXX for securities earning for the interest the Federal of point XX XX% XX% $X.X loans of same to investment the income current the lower for basis points interest the the offset compared quarter million third The periods. in pretax year benchmark the the X.XX% compared declining result declined interest by X.X%. to is Net year, securities interest average allocated increasing X.X% or income the primarily decrease sheet rates for of on the the year investment for by $XX of X.X% quarter interest comparable or earning same of year $XX.X higher balance interest to pretax $X.X yields earlier. $X.X same XX% is and to periods. earning X.XX% same held million compared our the of loans increasing assets XX% with net cash only quarter decreased to and income on our billion with with Reserve percentage net an the mind pre-provision earning that zero almost Please points same its periods. banking basis securities to earlier. would yield the primarily net points for decreased third third XXX% the interest to million of yield, ago. to in $X.XX primarily million total For of assets margin non-interest lower X.XX% for was million periods, increasing the same same period with comparable have

net the net period the the margins was same $XX.X $XX.X of for The decreased quarter to periods. a added quarter. primarily to the for with X.XX% value interest discounts of XX compared same XXX XX million addition, In points yield seven of million $XX.X the for basis bearing the interest The X.X% for compared X.XX% same comparable the basis periods. with quarter the third accretion million third year for the the billion for third and our year to $X.XX the funds a to deposits basis on X.X% of and or increased loans comparable comparable periods. X.XX% the earlier for adjustments, XXX compared same on with Year-to-date, decreased compared or to cost to result to the Acquisition points declined earlier. for amortization interest decreasing primarily XX loan loans for with points cost same the million with $X including X.X% net outstanding result year X.X% period the to points margin X.XX% narrowing fair a decreased time liabilities X.XX% X.XX% basis is income bearing deposits compared period interest ago. a same Average basis Total decrease ago. of X.XX% points period for accounting cost same points basis interest year of

to of periods average same earning the For XX% decreased compared for percentage loans the average interest XX% with the to the earlier. year year, assets

same basis earlier. interest for primarily by year, yield on for assets yield million points X.XX% us to $XXX decreasing X.XX% of XXX result the million with to increasing on The interest cash earning X.XX% declining the and to year periods XXX% same $XXX XX For basis period with of yields the for is the average the declined on compared periods. securities securities or assets comparable the held cash amount comparable earning the a points same investment

adjustments, X.XX% basis is result for increased to to yield well the the cost the compared cost the for the decreasing basis short-term bearing or compared cost addition, of XX liabilities ago. period of to interest of all of on funds for interest average XXXX. points declined with to a cost decreased net XXX X.XX% X.XX% $X.X decreased points of period including borrowings year the points loans comparable for $X.XX the for X.XX% periods. X.XX% period outstanding The for basis the XX X.XX% Acquisition to In same points deposits and X interest decreasing basis amortization accretion same XX basis million the year as the $X.XX% deposits bearing comparable of earlier. billion value, and Total a on basis with XX with year as for the the of same loans same Total a points added margins ago. year compared the loan time fair accounting for same year points discounts decline X.XX%, periods

$X.X for loans compared XX% increase million quarter $X.X higher the for ago. to volume million credit on same compared the result -- pandemic which the losses period a current credit with for increase same losses income increase due of million for on based for to a due million losses million. was prior $XX for is of charge-offs the impacted Moving not to COVID-XX increase all earlier, of expected earlier, offset under the credit incurred and $XX year period to due related XXXX or on in related the $X.X or year mortgage of ago. $XX.X $X.X overall which which $X.X to of compared of million We Non-interest year wider of two period in calculated $X.X Provision of and is to allowance We compared was a million loan record for declined. based in compared in to was -- to million charge-offs quarter and economic outlook was expected calculated for an same which losses. September was net The the same of incurred $X.X and decrease $X.X net income a quarter prior $X.X year credit million provision expected $X.X banking $X.X the billion incurred million ago, primarily $X.X lifetime deterioration banking We same margins any a a million individually for decline the provision earlier. for effects collectively XX, loans The incurred the the year net third million forecasted preceding provisions loans rates the interest This metrics as expected reflect for methodology. $X.X from million. XXXX. primarily the conditions an recoveries period loss potential compared credit under year $X.X for and with credit the all losses third period of with loss credit X% the compared allowance as or losses credit the is provision the current XXXX quarters a losses compared $X.X of the a evaluated or same for losses by third million for XX% the the million XX% for with in did for The net million charge-offs sold, with for evaluated million for with by third in same million mortgage increased $X.X in year refinances, credit period period quarter methodology. for with the losses earlier favorably

XX% non-interest period non-interest year, income of the For compared to primarily gain the or $X.X investment and was million the in on due with million sale million The to securities. same XX% mortgage $XX for earlier. a $XX million million $X.X in income increase $X.X year increase banking or increased income a

mortgage significant third banking our the by income surrounding was earlier. from efficiency continue quarter as of non-interest see the compared Non-interest improving the our to perspective. $XX.X client and the experience and technology expect used mortgage with Utah reap to in operations same expand a we in both an year period We million states, expense operational benefit operations and the million for for a enhanced $XX.X investment

ago. efficiency with the was compared the XX.X% year period from XX.X% ratio Our for a same quarter third

For non-interest $XX.X earlier. was expense same for million million a the year, period $XX.X with compared the year

was and the higher Our benefits compared September primarily period ago. mortgage payments, higher the for expense increase in particularly for months XX XX% in three efficiency and of with ratio result banking was primarily year the the a XX.X% for the non-interest ended The nine same year both associated resulting salaries from incentive division.

automated both our new and the higher banking for management implementation and In origination the treasury addition, in draw client a cost the due clients. ticket inspection budget, smaller commercial costs cost of solution commercial CRM and for new processes cost Salesforce loans, new incurred cloud-based for including expenses commercial we cloud-based commercial construction commercial consumer loan a for made and solution to data for management solution for investments application, technologies cloud-based for processing mortgage division, the banking including division,

become markets We and in which recognition from near brand aggressively Non-interest experience regional overall operate. to our in efforts expense anticipate to significant interest continued our increased foreseeable zero to the improve our higher to empower investments rates the transact overall to technologies as to as operating new continue evaluate in remain acquisition expect also marketing future. we more We we make and overall overall expenses advertising the opportunities. for and the cost our to more client clients we to enhance platform mobile scalable lower business platforms to of on

a we operating operating overall several can next result, retaining leverage. a our over better anticipate we high quarter year platform, client tax As our continue was to the million changes the quarters year for how third making with improve was ago. million overall We leverage costs Income quarter to XX.X% review effective a for the expense touch to for our third compared our experience. The while determine rate period earlier. the period compared for tax same XX.X% $X.X same with $X.X the

million expense income the year a the for was with For $XX.X earlier. $XX.X compared period year, million tax same

the XX.X% same XX.X% compared a back the tax with to year, turn Len? the the For Len. for year call rate effective period I'll was now ago.

Len Williams

Mark. our pandemic. have and very handled the of Thank I am team they you, how proud

bank. priority the effects top soundness has Our sheet pandemic. this of we've We our of associates fortified a the will that through the safety withstand believe the and balance negative of built and been

to as as to assistance relief the Lastly, we us will back providing this support for to to turn clients for questions. focused call point, Thank to at the this much we lines have goal And our up clients. can to open them moderator provide financial I on you the joining impacted through our today. crisis. It's our

Operator

[Operator today you. comes with Andrew Your Please first your of from question line Thank proceed Liesch. the Instructions] question

Andrew Liesch

everyone. morning, good Hey,

Len Williams

Andrew. Hi,

Andrew Liesch

Question here. on the margin

Just the was curious what on the this like where average new loans were new being rate production quarter? added, for

Mark Olson

was For me just X% -- look the let just was overall. it It around quarter, it. around --

Andrew Liesch

Okay.

being cost around around X% I added new of and being would securities XX X%, basis So, added loans funds imagine around points.

to be all under like basis a lower mean, I margin few funding here? that mean, I still from flatten the maybe should some So, together, will pressure. But it's it of begin just points -- should out we

Mark Olson

Yeah.

as I pretty the think future. forecast and into we bottom, Andrew, much we're the at look

start as we year We widen. portfolio to our margins loan into our next that expect grow that will

and impacted we point. at obviously, kind this been narrowed. level we securities the we're floor the negatively margins we've investment at of have and certainly yeah, But think of With cash have,

Andrew Liesch

quarters, like pretty well? I some not Okay. next into how this in repeatable maybe year helpful. pace That's sure am anything quarter. quarter this heading very then, guess, is fourth upcoming that? -- loan specific And And pipeline the driving What is the growth even the but I if solid obviously, here as

Mark Olson

frankly, And a couple credit number in areas. process. production million to relationships. large We've is actually out year. And up $XX we close tightened Heading into over weather on last that quarter, kind our enhanced the here said, lot a usually we of quarter. slower of far fourth But It's very last depends a in of our a good. the have over year the and so years, this moved have so couple

we where have forward. the sheet we've up we'll reductions portfolio we don't think the cleaned the cleaned and balance those to credit point think going So, up

So the right effects of us that its boost, a in seeing now. that gives we're own and

Andrew Liesch

Thanks the color. Okay. That's questions. great taking step I'll for back.

Mark Olson

talking Thank you. you. Good with

Len Williams

Andrew. Thanks,

Operator

David proceed line of with your Please Raymond with comes James. Your from next question question. the Feaster

David Feaster

Good everybody. morning,

Len Williams

David. Hey,

David Feaster

me. Pardon

Len Williams

How are you?

David Feaster

well. well. you. Doing Thank Doing

color experience guys about call. able -- I client on experience. the your being in your drive high-touch comments operating in the high-touch -- appreciate retaining before while You All leverage all the the the release to

automation operating you think guess, to ahead done that drive you pressures, [indiscernible] You've of how great the initiatives. and on the some investments the as about and sounds and that opportunity additional job of like competition, forward is leverage we do costs a dark. the other It with investments to keep contemplating there inflationary I more reduce doing look these reference?

Len Williams

do we're benefit the the that, but support that -- looking efficiencies We'll at. What those the working size both a we high to we but of the business next attack of one, that's answer small it's of And We're as one, through we're owner. to and this but bring that full have a that, front-end mid technology, we're taken not we high-touch is so enterprise the piece quarter. technology. space tough And on end quarter and that still of because technology. we to in back to kind committed think the

shape we'll pretty there. I think in be good

market Lake Now, offset continue we We Salt we market some have It X% expand, should our opportunity and competitors less in talent want to may to be and attract our track to some County we a with lending share. able going backing we're less off high-tough. to commercial is also that. clients We see by revenue, particularly this with increases. larger going some to to where as be think platform think good of or

we to as lending So, our continue commercial County. push expense Lake see Salt may little capacity bit build of an a we in

Mark Olson

do to make portfolio to overall. we overall. way are a Yeah. efficient with it. and more the to that the to seeing that's grow extent if way that we're do to is, growth And more is certainly on to there, that the obviously, efficient the the have improve, platform way My back-end to pipelines isn't going the But be find then to that volume able expand best the comment do that respect we're David and and to

So we get it. -- but told to

as we for into look to we a As don't need And efficient the future, rates result, really while. a see be there. rising we

The other have platform aggressive the thing at well. in looking will we're that we that acquisitions. always in that said help as that -- releases and we other our extent to the And can lever acquire banks

I in those our to that we're back we kind to going banks. do that liquidity take fact to So, of margins we loans, are go move all the want are want percentile to of if low. lower and and as XX into costs everything have yields be looking the our the at we

grow. we're at, got think great to we've comfortable we're and where So, we opportunities

David Feaster

then, we talking balance a Okay. lot banks hear And of That's sheet. about us good like afford color.

it that better the but the to the just, some in commentary even improving it? about paying that your going about do and sheet this. position years how guys you plan the And profile, capital. excess levels do this I can what for the positioning -- You forward you I your me credit reserve loans at appreciate maybe hitting couple run-off and you lessons learned your leverage take really to do improving balance are past really of guess, forward? just advantage over think you of maybe given have going your And the affirms strategy point market think, of you like just to help shrinking two and year, past how something how

Len Williams

will reinvest. we're as to begin foremost, to And businesses position grow. in our conservative some says off probably drop those of First and again, deposits nature that

our And management that actually capital very board's. change not of capital ours the perspective the that from of But this if part So acquisitions composure, position of we've a important and will happens. about is a increase part talked for hanging and little percentage a the a few we've is And through done managing of capital couple up. think mindset been excess since that that's open well. one. going years It's a onto bit of And we years to as knowing, today.

at look couple did to dividend cents. of continue We that of increase buybacks. stated high-end, our a I We keep at the believe, range. We'll the

comes we've now, feel through a what our the shareholders. bit. we act got to quite we position up growth, and on. interest of -- And And the in a question quite focus best to right is So, the best in comes that's action were capital

David Feaster

Got it.

Mark Olson

the is. that we see short the that other that over comment about And we is, the how $X Len other you end overall will -- billion. the expect of can with Dave, the comment talked our by year, And all time. I duration would be And volume mentioned, make the

just the that should of is eliminated Our the needed we're quite if quickly. kind and to and turning can up we duration that we But million no that very have short that credits at natural business. felt be balance best so that we've we're don't now money told really let sheet there particular as new doing in anything $XX we when cleaned banks of portfolio over we go, feel just increase that, more there their all you growth at from it been lenders even having some are in that, But what doing today. we said if centered the look --

credit. to great we so, -- in that us think and in expand going grow grow to And that will overall. opportunity puts and And that strong are clients premium a and go have us help

David Feaster

profile deployment organic the growth the just about I end you the on credit do start you dividend good mean, got guess, is a do of you've valuation is at have in M&A. those following to the could then, buyback to argue like do I of That's of be you some think capital comments on your best own that plan increase active stock. about given buybacks? becoming list. talked of your toward kind you of obviously, We've need that into the visibility the we believe But And color. top Okay. the more prices, run, profitability current the up do I'd in short or kind I current range. at deal you place. how Saw in more opportunities, the return and capital active? said top before

Mark Olson

on unknown there big There is credit. the a out

We're a has way the investment our as far to and in share there hanging done glad there Utah. and maximize want So to grateful unknown color there it and make things Credit Chief big We're what of to Officer out portfolio. community. the well for. we place capital with isn't good. for well. the now that look in that to aware enhance But of the position be We're But sure is

We're books most that but now market, range. to And more, with a have -- about there. in hanging organically that, board to on pushing bit on as we'll intensify. at that every the to second that. our look in of doing buybacks and XX% We meetings. see talk a happens also continues We And we're quarter do probably the earning I'm we I to trading to back more through approval stabilize, of It banks hold continually. seeing XX% like are are at out intend how credit it leveraging first think XXX% little then up things action much it growth capital and portfolio. We you you're XXX% that what buybacks acquisition, of given see that on building while lot

David Feaster

Thanks helpful. That's everybody. Okay.

Mark Olson

much. so you Thank

Len Williams

Thanks, David.

Operator

with from your Rodis Please comes Janney. today with the question of question. next line John Your proceed

John Rodis

Good morning, guys.

Mark Olson

John. morning, Good

Len Williams

John. Hi,

John Rodis

maybe Just expenses. a different a way follow-up, on

a various -- out just as stuff were $XX.X that different million, back You sort the parts run Is the is $XX.X given in rate the is we and that for initiatives there the were good quarter should million quarter. that? or anything given there far as anything like -- moving of

Mark Olson

Yeah.

have that in probably we investing think And we additional I technology. as be areas a good at we've some now. mean, that's in. do we're run stands looking it rate right think got invested to I

probably yeah, I so, run for rate a And good that's think now.

John Rodis

Thanks Mark.

but this given the should down until forward? securities the quarter think, that just up far obviously the How should bit last it we as have said this you lack How quarter? call, some, growing As going portfolio, -- guys growth loan portfolio was on could quarter. little a securities think been up the trend of about I the think we you because

Mark Olson

deposits. we felt said seeing we we that some started When in that, outflows Yeah. honestly

not trend would that stop But continues we so result, reinvesting. far a as so, and reversed And that grow. to has

on And at so basis that, we points. sit cash to just continues long it as view can't nine

from have want is going accordingly. yield, any certainly we're securities, we a buying margin to particularly to I amortizing we some perspective. we're make an of investment to kind so, be But going where to hate security. And at manage earn and

can get we and back use cash So the book the that growth. loan as

to So, but deposits do if the we've grow, do to I something. it, don't got want to continue

John Rodis

deposits Okay. trend in remarks right? and guess, you your said through thought But down remarks, I prepared year, would you your prior next

Mark Olson

happens, whatever are. And buying completely that yeah, then outflows securities will Right. to -- extent to the discontinue commensurate the we that

John Rodis

sense. Makes Okay.

And expanding of this guys talked and expected As how mean, would mortgage certainly to think actually should think and much is Or sort trends quarter. you slowdown the about building assume platform out talk about fair and that expansion quarter just we has with down those all from for or can even banks the last that. you is still level? strong still mortgage it quarter that far How with the expanding dynamics? I -- expansion? as offset -- I mortgage about third slowdown the been

Mark Olson

and phenomenal mortgage improved this year and these mortgage us. have a for level new drops ago, We new reorganized that been -- division hired leader who a a for for Yeah. to about rate taken has The timing margins. us whole

his very aggressive budgeting. been has So, -- his in he

through year, now is this he As target. even a to where on of matter getting just fact, is

very aggressive the well. knows and So, very, business

-- point where to scalable. business is, bulk would the are based. mortgage So, I increased The the other with it's the he's of incentive build expenses

pretty he a do actually group scale have attracting expansion to It's talent. well in had across a pretty footprint, in becoming and opportunities. locations performing a well So, in will problem known but some with it a known Intermountain the country. big life, We're staying our That we've prior the platform high we volume. said, managed not where West

slow. good as strapped the growth offsets where Arizona, Coast all from it looking West on the West, the the a -- you're states of Utah, Intermountain if predominantly. So, seeing on piece Idaho, that market we the hope does we're plus Again, at that's

John Rodis

digital as Len, do actually expansion? some Or mortgage, all you physical is it Mark you as will open So, or far locations? or the --

Len Williams

Yeah. Mostly we home. it do can from

the officers on outside and the whole some We street market, the delivery will of process but is digital. application have

John Rodis

Okay.

then, of for if down? dollar Just far slows that do how it revenue I $X.XX? the each think expenses, impact goes is as roughly Or go we by And mortgage expenses down, guess, should as Okay. to that? down about

Len Williams

But don't have We ratio now. ... that Mark, do you right Yeah.

Mark Olson

Yeah.

think three-to-one. we've seen kind is what I of a

So, for expense reduction. every $X we see of revenue decline, $X

John Rodis

most But you as region, Intermountain remind on you comment the are And standpoint, that probably the just talk the being standpoint? Len, patient and obviously follow-up us most Utah obviously from and makes your deals you about makes sense. Good. M&A about then, interest in certainly a Okay. in on a potentially what you sense. your talked market an But markets doing interested from can M&A

Len Williams

on manage discussion. to We across of get and states contiguous of A look been where say and I West. these I'd we Intermountain public. of interesting lot the every have banks the community well. haven't non-public has value gone skip that Idaho, look as our A valuation it smaller time particularly at with smaller hit lot where we Northern banks realization the being the where really can an feel just some Western Nevada probably organizations Colorado Wyoming, are we Western not we and that's Arizona, would There's Southeastern much Yeah. you But And there. in day. down.

be a know time then, a the wouldn't fairly I happen And market. loan the they issue to understand treated we going either, there portfolio right now period that diligence because reality. in with other So, and don't probably going what's is going on while doing is, of think, to

little So, they much. a probably we bit discount

more don't having quarter, start the line. I'm I next in year, meaningful fourth that quarter -- by second late the first, expect along much but little we So, hoping first a discussions

John Rodis

for thoughts, Thanks Super. Okay. Thank guys. the you.

Len Williams

Thank you.

Operator

comes your Davidson. question Jeff next with Please Your question. of the line Rulis Instructions] with proceed [Operator D.A. from

Jeff Rulis

good Thanks, morning.

Mark Olson

Jeff. Good morning,

Len Williams

Jeff. Hi,

Jeff Rulis

question set system down XXXX, think the charge-offs industry broadly I Question effectively the built. you think an expectation. been mentioned with is if And that on Len, that's up the you expectation it's industry increase an where charge in do I to -- CECL, we've

charge comments, in quarter. that guess, assuming accelerate got and for that stout does get acceleration I to based dynamic? charge but is down on implying -- XXXX, of the you've You -- guess loss content a reserve little we I projection, reserve down any in an Trying around could your thoughts to it's had pretty sense a a within that

Len Williams

contractor, from. me charge-offs. a virtually one last provide it that happen -- a amount expecting quarter's be recovery or little about of a this was more charge-off with mismanagement to I'll we and quarter's was It issue deal. one some on kind are But color bit C&I deal, Yeah. really excuse

bit and some portfolio -- the So, to one to volatile out we much be that think they're but watch And I able pretty falls to have in was it third in tightly there. it. say we predict And with we it. Right quarter with comments going we of changes of the on now. bend driving really we hotels the yeah, are industries now, some deal that with not range, rate we're anomaly while right don't COVID been to the it moving of an haven't see will more seen monitoring a the line to highly go portfolio substandard in hanging the enough up,

the along perspective. it's market yet of negative just seen we thinking of a market, the impact, have the don't with charge-off impact a I prediction, the great kind So, going haven't from

Mark Olson

come losses. will reality. But expectation need expectations be will to to and going down overall, we've to become reserves point, for not setup because re-provide of as our your fruition, losses those we in be Jeff, And portfolio to we're the those those the reserve expected lowering as losses therefore

So, that have going large it that we're will as the with always out incurred, conservative. because we align peers. of accordingly. to We view reserves our kind that's did are And as we're we -- reduce we don't of this very -- losses reserve

Jeff Rulis

years in and interested road. on And implications a of for for you've Len, longer But the sense just there. how few thoughts had the that's kind in months now, that's a your to down your of I wanted work played maybe we've brand you. get far? Thank that Great. the markets I play so the got term guess it's done acceptance know

Len Williams

Yeah. And loan as I mentioned, actually are is up. volume up, deposits

we've the group. The go has State been Bank Actually, lot acquisitions ago. able really to of years good several I few back It branding been things. can internally. to particularly You has attribute years. last had a to united even can the Louise's We've do, that acquisition

if we're the to still this are many positive it banks some -- support very So, of still and got what understand way or trying trying internal understand, bought seeing the is. is the not if clients the but brand is other clients, the to market

So, same the unified together just people. us organization. that, We the explaining re-brand we're then we're and hey, and all still put

positive. So, it's market been little bit press. We're heard we it's good, our far in positive budget. as for Jeff. anticipated We've money and so more a so awareness spending But

Jeff Rulis

Okay.

sounds So, momentum. coming now in places, like but is first -- and step positive it

from you, Thank So, me. all that's guys.

Len Williams

you much. Thank so

Mark Olson

Jeff. Thanks,

Operator

call back I time. for this queue And presenters there at turn the the are no remarks. in any to further questions closing

Len Williams

Thank very much. call. you I'd if to Thank Stay our individual for have like joining We support us any you for all you you. us. you questions, here, and thank appreciate the thanks And giving hesitate coming. safe. of don't moderator

Operator

participation. And this for concludes conference today's call. you Thank your

now may You disconnect.

Altabancorp (ALTA) 1 Nov 202020 Q3 Earnings call transcript