National Bank Holdings Corp. (NYSE:NBHC) Q1 2018 Earnings Conference Call - Final Transcript

Apr 27, 2018 • 11:00 am ET


National Bank Holdings Corp. (NYSE:NBHC) Q1 2018 Earnings Conference Call - Final Transcript


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Good morning, everyone, and welcome to the National Bank Holdings Corporation 2018 First Quarter Earnings Call. My name is Lisa and I will be your conference operator for today. [Operator Instructions]

I would like to remind you that this conference call will contain forward-looking statements, including statements regarding the company's loans and loan growth, deposits, strategic capital, potential income streams, gross margin, taxes and noninterest expense. Actual results could differ materially from those discussed today. These forward-looking statements are subject to risks, uncertainties and other factors, which are disclosed in more detail in the company's most recent filings with the U.S. Securities and Exchange Commission. These statements speak only as of the date of this call and National Bank Holdings Corporation undertakes no obligation to update or revise these statements.

It is now my pleasure to turn the call over to and introduce National Bank Holdings Corporation's Chairman, President and CEO, Mr. Tim Laney. Please go ahead.

Tim Laney

Thanks, Lisa, and good morning and thank you for joining National Bank Holdings first quarter 2018 earnings call. I have with me, as usual, our Chief Financial Officer, Brian Lilly; and Rick Newfield, our Chief Risk Management Officer. And we're pleased to report that after adjusting for the Peoples Bank onetime acquisition expenses, our company delivered over a 1% return on tangible assets and a double-digit return on tangible equity for the first time in the short life of our company.

I'm also pleased to report that the integration of Peoples, including the conversion of all systems has been near perfect. I couldn't be happier with the quality of our new teammates and how well our cultures are coming together. In particular, I'm excited about practices we are adopting across our company that historically helped Peoples attract and retain very attractive low-cost deposits. I also want to recognize our business banking team. We are recognizing record growth in our relationships with small businesses.

Finally, while solid growth is always expected in our Colorado market, I'm particularly pleased with the consumer and small business growth that we're now experiencing in the Kansas City and surrounding markets.

All right, now, I'll turn the call over to Rick and Brian to cover the first quarter in more detail. Rick?

Rick Newfield

Hey, thank you, Tim, and good morning, everyone. I'll jump right into covering our credit metrics and trends during the first quarter. Our classified loans and nonaccrual loans as we acquired Peoples remained very good, with our classified ratio of 1.36% of total originated and acquired loans, excluding 310-30 loans and nonaccrual loans at only 0.66%, which compares favorably to a 0.69% nonaccrual ratio at year-end.

With respect to our pre-acquisition baseline as of December 31, 2017, our credit trends were even stronger with classified loans and nonaccrual loans decreasing from year-end 2017 levels, continuing a trend we experienced throughout last year. Net charge-offs for the quarter were only $619,000 or 7 basis points annualized. With more than half of those net charge-offs against specific reserves set aside