HTLF - Earnings call transcript Q1 2019 | Heartland Financial USA, Inc.

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Operator

Greetings and welcome to the Heartland Financial USA First Quarter 2019 Conference Call. This afternoon, Heartland distributed its first quarter press release and hopefully, you've had a chance to review the results. If there is anyone on this call who did not receive a copy, may access it at Heartland's website at htlf.com. With us today from management are Lynn Fuller, Executive Operating Chairman; Bruce Lee, President and CEO; and Bryan McKeag, Executive Vice President and Chief Financial Officer. Management will provide a brief summary of the quarter and then we will open the call to your questions.

statements presentation, information to today management the of the some everyone falls begin the guidelines the by of will forward-looking we I'd Exchange remind like that under Securities Before and defined Commission. as be providing

these of of point must forward-looking results and the during future I statements hopes, beliefs, could out the actual from presentation are concerning guidelines, company's any those differ expectations made part As that this and projected. materially predictions statements,

now factors these XX-K Fuller a go a which this this being be conference website on Additional turn mode. at are from company's obtained ahead At included company's over information in sir. the is website. participants will At is the Mr. and to time-to-time the Heartland. Instructions] in call time, SEC's listen-only XX-Q Please Lynn As reminder, may recorded. all or this I filings, the [Operator time, on

Lynn Fuller

earnings first good and discuss afternoon you XXXX first as performance today joining the Thank We quarter to company's we for and Heartland's appreciate XXXX. us the everyone quarter conference of welcome call.

the Drew be always quarter. Heartland's on challenging last For are Also year. and who fewer McKeag, first our touch us and a few minutes, the to quarter highlights nicely financial our Bruce joining that business increasing results. CFO, first color the higher to there Chief the and a said, performance over tend the Well, Townsend, CEO, our Credit is quarter with I'll to business EVP on will progress performance. Officer. during bottom-line next as first all and a then of pleased Then expenses call good will two Heartland's we're is little report EVP over same days little quarter With metrics on cover quarter. Lee, the the additional around the for I'll President Bryan call provide

was fully equity held at the X.XX%. XX% shareholders fully quarter, QX X.XX% quarter was in to compared to to Finance. to at million, compared quarter for points about for net QX compared margin quarter first up QX first year. increase or for sale for last average quarter common The year. of the the X.XX% for that's $XX.X tangible XX.XX% basis. interest QX Return a quarter first tax impressive on average available X.XX% equivalent for $XX.X an result over XXXX to on same the share $X.XX million million quarter XXXX compared the common We average income Also XXXX. Return compared on lost was finally, And $X.X X.XX% was the a as equity the last earnings return XX% XXXX on to was $X.XX Citizens diluted non-GAAP increase. same Well, and per assets of net our basis a of XX XX.XX% of

detail margin ratio Our XXXX, interest ratio. was QX Bryan compared in XX.XX% our McKeag to efficiency quarter net efficiency will more provide and XX.XX% this on and

to Now, moving balance the over sheet.

compared billion $XX increase XX%. XXXX over $XX.X of to billion, quarter Assets ended QX at the at an

the ended approximately billion, Our securities quarter portfolio at XX% of assets. $X.X

tax with just yield X% of over fully over is four duration little Our the equivalent years. a

XX.X% and funding, this and this book Bruce minutes, positions a balance respectively. combined tangible and will XXXX value Book few of very in at Lee were $XX.XX $XX.XX an and planned, increase little with liquid over deposits. sheet. a XX.X% non-core quarter As loans In Heartland very QX value respectively, with cover

approximately Blue in is & and target X% in Johnson the Janes at with TCE. merger operate will located Blue equity of fastest-growing front, of Our in close XX.X% Overland line M&A tangible at Valley quarter Park, ratio wealthiest County, to our a of under brand range are the the the Along Bank common we Bank XXXX. headquartered and the X.X%, to Kansas, X.X% compared with to X.XX% Morrill ended That's and Kansas. county It'll QX for we're Bank increase in progressing and the of billion well of in Valley The middle extremely entity combined $X.X by scheduled assets. May. be X%

our We completed have sought-after subsidiary, community quarter, consumer be continue M&A pruned the four banking and pipeline Finance a respected centers. of sale the we Well strong prospects of and during we highly banks. for to also Citizens and partner Company, finance

continue earlier pleased branch respect very to and network month, unprofitable With of report low markets. Heartland to declared our a will rationalize the $X.XX We dividend that this to growth dividend, per our payable prune of share branches Board in strategic initiatives. call Bruce? on and turn will overview Lee, XXst, May May Heartland's the an and on CEO, company's shareholders now of I'll record common to who XXXX, over President XXth, the provide Bruce XXXX. for

Bruce Lee

in a quarter you, a significant we I'm quarter streamlining results improved refining afternoon. company. Thank in of and progress financial report Lynn pleased our which and made to good

initiative Compass. us an company for to significant have Across credit have as into continued improve to the Operation I our growth. as and and position past three franchise through our metrics, investments and experienced taken our and deposits, loans, to dive Before discuss strengthen proactive performance Customer several want key years, I Heartland, we're fees, across called over growth we well making steps we scale

this to part we're As solution. the initiative, Financial Salesforce of our to the loan converting upgrading Encino industry-leading Services and we're system platform, origination

Company. end, Mortgage in Residential Finance; up first external consumer March, previously two capability finance banks we the opening business, will out our the quarter. We our and February, These is and To improve processes our sold XXXX, second of closure to mobile initiatives of be to QX and in the customers. the in-market and In Citizens Heartland's example completed that customer completed units. internal business improve small Another successfully technology, experiences. we business our we quarter online of and importantly, in rolling of announced our in closure will all pilot National more expansion wrapped this and

of in to we to announced Additionally, tomorrow close we mortgage Trust Dubuque loan today, is The servicing sold and August. at our quarter four optimized portfolio into and is that expected In we center loans Two locations. expected consolidated eliminated banking were physical further transaction two Bank occur locations. were XXXX, first sold existing of transfer and and footprint locations Company. the have our

organic customers the apps. improve fuel just outlined optimization I banking discussed remain we I quarter. will to the center online, divestitures mobile to addition, our growth. that recent have In branch, and delivering for through resources the The two experiences and in service support committed more our closures five and investments second banking sales centers earlier initiatives our and provide We planned to customer

branch due seasonal. as exclusive reflecting release, a sales, than primarily in deposits, reported relatively first in and to to X% soft outflows, increased year end. which since deposits, held-for-sale $XX.X flat a bit quarter, those deposits Non-time or fund were million public Turning to less conjunction our deposits with be commercial of tend

on demand XX% have with approximately growing costs. in of the balances deposits savings and That some responding from mix the and deposits We have at of up of are continue enviable deposits to as to shift our deposit are focused rising seen maintaining an to and noninterest-bearing customers mix making deposits. environment. said, We're XX% total holding line we non-time rate on

in that holds the organic pricing deposits. XX near-term delivered We're the if growth. coming lessen the expense first deposit quarter, pressure in interest competition increase of moderate In patient position six policy for on deposit markets will industry's hopeful on months changes. their the reflects Our Fed our the

less in release, reported the portfolio growth had as the million end. mix or any C&I our loans, CRE, held-for-sale, On to portfolio Moving to held-to-maturity, year organic with loans of loans $XX in and note, a commercial X% positive than quarter. the from moved million declined declined during million the $XX while Ag $XX excluding loan loan

mortgage in and to we primarily rate addition, which with loan decreases. refinancing consumer was noted customers' some due In interest portfolios, contraction recent residential loans the

XXXX. As respect a year it risk proactive an relates management. Heartland commercial loan to portfolios in loan started de-risk end, portfolios, to At to with Ag initiative approach formalized the more and we've

customers identified high and being Specifically risk performing monitored. for strategies are were actively

identified XXst. as a this Heartland of $XX in and achieved As in Ag result March these credits reduction million commercial portfolios of effort, a the

Turning to we continue that to I'm metrics, credit to quality. strong report see pleased key credit

relates end The primarily resolved first relatively increase end. the a the to of represent markets. one showed loans On other agribusiness loans The near-term. to a over non-performing quarter, past reducing first of the X.XX% X.XX% X.XX% Non-pass-rated non-performing X.XX% year several continued quarter will million. at end. first Overall, increase from two improve relationships year Midwest percent owned estate be as slight in The related to X.X%, total the X.XX% to compares the which of which increase quarter. primarily non-performing levels increased is to large at ratio delinquency were the Our the the was which in at assets quarters. to up a loans note, total from quarter assets in X.XX% real the from relationship, at $X.X in flat in positive favorably modestly to

charge-offs quarter recent we've which reported lowest is Lastly, quarters. the reported in the net first for loan were $XXX,XXX, at

weather business fees the increased service as charges driven declined quarter. result rates fewer during in of in quarter, higher the days a by to slowdowns first interest two service and X.X% credit fees, Turning the for by earnings quarter, the extreme and caused

business upgraded Accounts card its a will Payable significant processing platform Electronic the realize costs quarter, During our first forward. going improvement commercial and in

increased our and forward maximize record-breaking In group. QX, commercial to spend card volume concierge to We're and from card service over performance our quarters. year onboard looking customers helps card linked customers X% compared implementation our rebates. vendors card Our EAP another

on efficiency and focus ratio quarter scale XX.X%. We efficiency. of first reported to continue We our a improving

improvement range an an rate QX XXXX. Our of low in ratio for We're X% targeting annualized the XX% QX almost over reflects XXXX.

Kansas high under for portfolio serve greater Blue Morrill an share close excellent Regnier Chairman Janes Before serve I attractive merger Bank Reynolds McKeag, success. a bank as in Valley the high President growth team, of feel great the positioned about call as my Valley the Blue community a Bryan will turn Valley to is of CEO that is bank, and will to deposit loan Bob in leadership bank to Blue and with quality will Heartland's which mid-May. we with Wendy is expected and strong market. name, operate the excitement like the Bank combined City well and & of I'd the of base, Bank Bank over

XX to Banking. with to over Kevin the will of pleased Heartland Executive Heartland's first team. we're Consumer Vice pleased banking retail and the family. welcome the brings decades of Kevin Overall, Finally, Karrels quarter over two has to results. Heartland years of impressive President experience achievements are Kevin as we serve

will I turn Bryan We continue call to financial on focus detail a deliver first more over on our and to the provide with that, will on sharp value. priorities who shareholder customer McKeag, quarter performance. With

Bryan McKeag

$X.XX $X.X million, I'll a restricted begin Wisconsin release, Thanks Bruce an somewhat the in today stock good million, which comments items MSR of expense in higher included per and of noisy our quarter. busy net This costs of on comments. afternoon. and sale my of $X.X million. was branches for shows press details my expenses $XXX,XXX, compensation $XXX,XXX, a gain M&A-related and which of the share reported this provide very $X.X quarter, more of these earnings restructuring I'll valuation two referencing of by expenses

yields items, and impact interest net aspects these on a results million we quarter. basis portfolio X.XX% loan or Citizens declined per and, share. of this quarter. start nearly -- which, last as Citizens points earnings in However, contributor quarter, reduction from nearly sale portfolio $X spite after-tax basis in the was was XX in due expected, the primarily the basis reported the many this the I'll decrease the loan solid net in early main with to trends In The of the positive January. margin, consumer $X.XX points of was to XX of quarter, tax-equivalent sale a for

quarter for deposits to In increased and interest cost last addition, XX basis six investment basis on borrowings increased compared points the and to points X.XX% yields quarter.

basis purchase liquidity million points $XX borrowings investments prior per generating X.X% eight XX XX leverage assets, retained Heartland's margin increased XX percent and ratio of The interest in quarter basis points. remain equity common investments loan is losses month our net or basis as XX added point tangible basis The only over and loans basis million increased market of the shape. XX the value cash quarter, and $XXX the the accounting X.XX%. of total basis total X.X%, great points our in earnings quarter derivatives with XX% just the accretion at for to This basis allowance positions in and increase added of and a flow to for deposit compared of points, to reduction one assets to about includes XX% ratio points points, loan in assets of this quarter. added of

prior quarters, billion PCI and of from or valuation in by mentioned $XX just As $X.X million covered loans X.X%. recent under reserves are acquisitions totaling

Excluding ratio points result of these loans two allowance is would lower loans than total which March an last XXst, loans in basis from as X.XX% quarter. of to XXXX,

gain a quarter, million loan charge-offs primarily income and to quarter. of the decrease accounts $XXX,XXX statement, two up losses primarily quarter, accounting purchase $XX.X for the flat totaled the income this $X $X.X lower million as last prior decrease, loan loan $X.X The was due for gain items; of attributable well are of securities for to for When accounts from decrease; accounts to first, million this $X.X $X.X the million a million quarter. rest. down of sale the the as is provision which Moving for interest million compared this Citizens' loans the quarter, quarter. $X.X The decrease portfolio last days million; three was the on this from to $XXX Non-interest $X lastly, million. to accounts quarter, which credits compared quarter, two and net in as of sale was last million lower $X.X for there reduction income sale down and last million is growth fewer The nonperforming of the quarter. quarter, totaled accretion of second, on decline

on $XXX,XXX to also rates We the mortgage due the valuation recorded expense a MSR in PrimeWest quarter. reduction during

total was or expense, to for non-interest this non-interest million quarter expense compared last to $XX.X Moving flat quarter.

included were and last $XX.X by costs, benefit million to Core is and quarter. by during million higher benefits related was million M&A last credit effective were quarter lower restructuring quarter to remaining compared tax costs costs by that a accruals quarter, non-interest gains credits. million to exclude increase flat specifically, $X.X acceleration base benefits our costs to for and last quarter. million quarter higher $X.X $XX under other and compared just More expense count was quarter due were charges, XX this employee lower share or salary and XX% to M&A relatively which tax new tax compensation the $X.X last increase conversion to is quarter. resets compared The or The of were and categories. or than Other this increased and quarter stock salary with declined million attributed down partially aged offset were were a annual in who cost expense $X.X as categories rate grants $XXX,XXX, lower $X.X as the $X.X of expenses costs higher quarter. higher were million, XX% accrual largely offset older. that the compared The incentive of bonus This benefit system The cost, several the credit to employees run last lower as comparable costs reported costs XX salary to rate X% restricted million quarter. to last asset related for partially increase. Also tax were driven losses level

the XX% XX% tax normalized that to believe We to reasonable going is forward. continue rate of

views we move of some our as summarize I'll Next, for forward. Heartland

remain purchase basis some portfolios reflecting quarterly non-time range fluctuations an quarter of pick for strong the Deposit card have million and remain run Provision on growth is expected with loan then half to continued annualized mid-single-digits a are to Valley, annualized Bank decline organic growth. range to are should primarily as current back flat of on modest to expected pressure up X.XX% loan the over the loan Net to in categories expected generally credit rates or basis pricing. and per roll commercial slightly. and continue corporate excluding be next to First, on increases deposit in level of expect fees Blue acquired margin in and and show losses upper X.XX% the million growth. $X accretion likely card from interest we in deposit as to we accounting equivalent tax lower the in Other XXXX. $X loan single-digit quarter are

last of that quarter. XXXX. Gain quarter servicing recent which five the beginning remember, be on this spending in the However, loan result, events in, from we expect mortgage to we our to in large will coming of the per loan to we technology rest current another of had transactional reduction And sizable. decline as to Durbin into including rate, on X% be from quarter's We $X.X sale in will in as to fees higher by close July will kicks begin levels be than the quarter, Bruce run There decline throughout XXXX, be as next branch next expenses slightly you'll will quarter the also this Core income. and when quarter. on $XXX,XXX servicing below $XXX,XXX expected initiatives million QX of expenses, are reinvesting be also quarter divestitures be approximately branches, then expect X% quarter now we some several third see expected which expect card during debit of quarter proceeds per the of been the discussed. gains in occur rights locations to second decline sale a sale

of to Valley which close following. we Now, May, to due regard in Bank the the acquisition, is with Blue expect

X.X% net -- Blue Bank $XXX mark Valley million; will million an $XXX range. Investments held deposits of to in interest estimated $XXX carries and has will the XXs. total X.X% core income of range Durbin the net low run increase and anticipated an of the First, ratio increase million. in has increase efficiency margin of loans should non-interest per of about maturity rate the in $X.X million a net loan quarter loss

million increase common at Heartland's of issue million. equity we'll common will X.X Heartland approximately about shares Second, stock, which closing, by $XX

million We will once on can marks $XX finalized are the of price at depend million. the estimates currently stock values estimating fair Obviously, goodwill change deposit core and our are and also and of $XX these date. closing intangible

spread quarters. not costs will fourth to we we two over expect million the next currently with Lastly, estimated and XXXX. $X begin mid-third near planned conversion the saves the will quarter, for XX% the conversion integration be realize until system cost quarter And of

all call with should couple anticipate you that, And be turn to next of the back Lynn. eventful. I the So, very over to will quarters continue will

Lynn Fuller

Thanks our open We Bryan. can questions up analysts. our for now lines from phone

Operator

you. Thank

We now will [Operator with the question. line session. a Jeff Instructions] from Davidson. first be D.A. Our Please question comes question-and-answer Rulis proceed of conducting with your

Jeff Rulis

afternoon. Good Thanks.

Bruce Lee

Hi Jeff.

Bryan McKeag

Hi Jeff.

Drew Townsend

Hi Jeff.

Jeff Rulis

clean to expense if if the just the could to non-interest of we -- X% and start decline at we just rest X% got could could per maybe you item. year A, for Bryan, -- just X% said if as address of quarter core I a base? guidance we your what

Bryan McKeag

that Then of fees Yes, talked the get little be cost things, lower we decline from see be things I the be I those some initiatives the those quarter. implemented. the -- next that that will other quarter. we're start Bruce towards about, effect have other initiatives the should servicing $XX.X that those as professional around should just and to was We'll end mortgage on year. some bit a core I to our some think some Also start we suspect we off this of going of on mentioned. there, working million to consulting of and some was those

Jeff Rulis

Valley Okay. Absent Blue the addition?

Bryan McKeag

rate materialize we reported of come conversion start in and to mid-quarter on And its layer the another seeing get will start should Valley Correct. quarter, And we the add earnings. based Blue as that on into then when well. run fourth sales after

Jeff Rulis

and on the what's -- and million I out the modest what other Bank itemize to not the are you of of? that, growth you expected I know the fall you talked amount held they -- But the that in Okay. Bank you're branches; number? total are on -- off. -- loan Trust they & being guess, in are balances the could And Dubuque but the rolling then off for are Illinois I Citywide, losing, about the cost Trust, next guidance is -- What guess, $XX headwinds sale, itemized loan quarter. that that the

Bryan McKeag

think I I probably number, I have if that would.

I to -- I think deposits -- a it's the The are me $XXX in get Janet's here. the the number think million. ballpark of it's trying

$XX of that loans think they're about held in -- for I branches sale. loans would be are $XX the the -- million that the are million the

Jeff Rulis

-- -- that's $XX of the Dubuque, Citywide? all And million total Dubuque, and is Okay. Illinois

Bruce Lee

five Yes, the that would be for branches.

Bryan McKeag

Yes.

Jeff Rulis

Okay, got it.

Bryan McKeag

Took that a through a lot there's Sorry, line. of-- lot going me

Jeff Rulis

kind a No, guess of I just that's the we one -- know sounds discussion. confirm. provision get last like And I of to lot work. just

servicing the Texas, quarter. be line, in or $XXX,XXX will servicing is then income of another out to $XXX,XXX million that are is that So, that? you is exiting quarter like third second PrimeWest, and you down surviving -- the quarter talked entity, line $X a going a piece in the another there then the the A about the guess

Bryan McKeag

I -- if here. Yes, be those numbers there would I have think

So--

Jeff Rulis

that around $XXX,XXX. portfolio of size is The

Bryan McKeag

But that in about in come month Again, more $XXX,XXX item, that. rate that is a for of the looking quarter because get -- got there'll than of would this the it's total; We're quarter. reason a that will a line only yes. little of of you on $XXX,XXX, and the now $XXX,XXX. of impact have it that MSRs only right there. earnings this there And run here we'll be line the pieces out are sale item if we're is several About take talking thing that

Jeff Rulis

Right.

step you. Okay. Thank back. I'll

Operator

with Jaffray. question your Nathan Piper next the comes Please question. line of from Our with Race proceed

Nathan Race

guys. Hi

Bruce Lee

Hi Nathan.

Nathan Race

excluding in I back Jeff's Thanks this question for circle the balance Valley impact first of the of to sheet wanted Blue dynamics, just year. the questions. just taking on terms overall

you guys quarter, impact think this have sales deposits? the of growth, the balance overall again should with absent guess we on I core how coming of branch that Valley and loans about sheet both Blue loan kind and due So,

Bryan McKeag

sale what fourth the think current take mid-single-digits low and single-digits and going those -- third I for I would and the next into to quarter. quarter balances for this held maturity Yes, I up held commercial in would loans the then is up do see

that other of to consumer, the little mortgage probably mostly say, balance see ARM ARMs the because what's and don't flat. a we but that have used have mortgage are to I would portfolios The sheet. be our are that downdraft in bit on we have, going we May origination put in there are

So, bit accelerate. that down a that upon back up I see If think, happens here, kind and drop, take down. a just what see we'll see go solidify those rates we another bit grind little mortgage. depending If of slow could rates we'll with

a of there. Does that little bit there's So, sensitivity help?

Nathan Race

that no, is helpful. Yes,

verify the to billion? off we're $X.X amount going investment there, just on loan So, for which is the that held basis,

Bryan McKeag

Yes.

Nathan Race

Got you.

Bryan McKeag

portfolio. by in And that shows table that breakdown the later there's a

Nathan Race

of maybe year. about about believe All half then right. margins your Blue mostly guidance. just thinking guess the of thinking quarter. guidance core NIM second the impact it. the just lower than I your their of kind And the Got Appreciate in this back Valley; I for

type magnitude on of in we of margin curious basis, a just terms core dilution So, accretion? excluding should of what anticipate

Bryan McKeag

or you on a relative. interest million. about much. $XXX think, think mean Yes, million. it basis be when are about its margin is annualized on quarterly too dollars, net They -- Their's $X an our I shouldn't I

the small to total. relatively So, it's compared

margin, little you our back X%. is think out the over we're core when -- don't purchase a I So, accounting,

the just do, depending you for will happens so worried that about little And over. a see what in bit, what That's deposit then depending upon the that's there. might on how what upon roll And XXX%, I'm the accounting just pricing quarter. total loans purchase dip

Nathan Race

And on That's comments I pricing. kind X.XX% of the so terms understood. helpful. of ask loan this one forth just very day appreciate Okay if the and could impacted that yield your I count around quarter. lower core in more

on new -- the seeing loans So, you on weighted maybe just books of guys kind today. curious average come are where what basis

Bryan McKeag

West. they I take did I for last a look better would X.X% So, a the are had the out March. reports say X.XX%, bit at to in little we

of So, of they to a bit would average in little X.X% towards tends to probably higher be up as is well. is And then Midwest. that bit X.XX%, -- close be a Ag. bit It a a component the more that Ag little little

Nathan Race

Bryan. color. appreciate I Understood. all the Thanks

Operator

comes from Stephens. line the your proceed with McEvoy Please with question question. next of Terry Our

Terry McEvoy

afternoon Hi, good everyone.

Bruce Lee

Hi Terry.

Terry McEvoy

was sale kind PNC, Just customers. would would the a Bank which wondering servicing with of done then maybe digital have there's well. the take to on those leave take will to national I some customers or escrow balance starting And customers. sheet ability away? PNC, the the if once And XX,XXX whether have be bank, I was wondering how of is any many that deposits as Heartland does sale

Bryan McKeag

had out -- that it of chunk of But is Yes, back a those number. don't good customers, out were that of exact footprint it's I Terry, some we we offices are originated predominantly the the have Heartland are when customers. There ours. ones footprint.

Bruce Lee

as look being if sold. account, what at -- -- you about customer you it's less is XX% it's slightly just a Terry, if primary primary of checking than define

So, a of out footprint-- vast are either majority

Bryan McKeag

a checking have account. don't Or

Bruce Lee

-- wouldn't Right, their bank. as or or they primary we don't or -- us view

Terry McEvoy

wondering, just more five $X.X there that And Okay. the to will expenses sales quarter? second future expenses? capture does be restructuring million Or charge pending related any in branch the

Bryan McKeag

the probably in from this a as There that's of biggest little a don't little of branch quarter. I But bit that bit to lease might sublease believe. be well, much portfolio, the would out could out coming we're servicing -- that's thing. area. mortgage be the portfolio next actually sale the negotiating a There's not There that but

Terry McEvoy

Okay, that's it. Thank you guys.

Bryan McKeag

ranges, but escrow, escrows about or plus million of be we sorry, It Terry. minus had it's the you $XX And over. asked would transferring I will that say

Terry McEvoy

Bryan. Okay. Thanks

Operator

proceed next Please your Instructions] Andrew [Operator comes Liesch line the O'Neill. from Our with with of Sandler question question.

Drew Liesch

Good everyone. afternoon

Bruce Lee

Hi Andrew.

Drew Liesch

Hi.

high at level to here. a just ask So,

concern? is what you the for on giving any credit some Just and like anything balance the derisking pruning horizon to there the rationale related Is that's of some of sheet?

Bruce Lee

as feel exits, just we work I'll a identified we that, up. Andrew, it's performing We now it's right to them this can. let right we they would, cycle we if do to -- relationships; do in then and right think feel is that the this if the thing try term as. where some time a today We we maintain is me these had would prudent let them, out. are but are very the we we that. first We to Again, and time move Drew follow to real with

Drew Townsend

formalization process would a I And say saying, I don't be Andrew. proactive credits in want lot. always place. on to strategy. We've just action a an would we've truly want follow-up, the always is taken parking had of We what watch them and a a in we strategy approach is,

I taken to to trying really though, time our and teams this and next credit responsible. think collaboratively hold level, are bankers the it we've

anything And so looming our No. there's in do think I portfolio?

I be think to trying the of potential change face said, cycle. prudent in it's just, as in economic the Bruce

Drew Liesch

another of And And flooding that Midwest. any so, your of you, for locations? question Okay. affect clients branch the then to Drew, any Does just extent? like your if in the what or

Drew Townsend

the our I the don't construction think, in been believe season early unfolds. We've We'll for their farmers immediately. Ag pretty suggest. have are cycle, so the I fields. would getting at to And from I Yes, see how standpoint,

the more and and think probably I at forth. upon So end the any so come But material thus don't snow rain far, of had April has flooding depending impact. to

certainly So, we'll monitor it.

Drew Liesch

that everything asked. covers that I've Great, Thanks. Right.

Operator

time. turn to for Mr. And floor this I Fuller at over the questions further back like no comments. closing would are There to

Lynn Fuller

conference Wednesday, on and P.M. May us month remind stockholders a performance Dana. strong begin I'd X:XX we're next joining Time us and I'd annual like the you very guess you, like to the balance and in our that I will be certainly in today, here very at the next for second XXnd, financial look Hotel hope to first last, everyone, at thank, held closing, you there. July. our pleased our join shareholders Well we Central again Julien of quarter quarter Thank and in our our analysts can with meeting And We sheet. quarterly for call to for will late liquid forward with seeing Dubuque.

everyone. evening, good a have So,

Operator

today's This teleconference. concludes

time. You at may lines for your disconnect Thank you your this participation.

Heartland Financial USA (HTLF) 29 Apr 192019 Q1 Earnings call transcript