Good morning, everyone, and welcome to the National Bank Holdings Corporation 2022 Fourth Quarter Earnings Call. My name is Jen, 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. As a reminder, this conference is being recorded for replay purposes. I would like to remind you that this conference call will contain forward-looking statements, including, but not limited to, statements regarding the company’s strategy, loans, deposits, capital, net interest income, non-interest income, margins, allowance, taxes, and non-interest 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. In addition, the call today will reference certain non-GAAP measures which National Bank Holdings Corporation believes provides useful information for investors. Reconciliations of these non-GAAP financial measures to the GAAP measures are provided in the news release posted on the Investor Relations section of www.nationalbankholdings.com. It is now my pleasure to turn the call over and introduce National Bank Holdings Corporation's Chairman, President and CEO, Mr. Tim Laney.

Thank you, Jen. Good morning and welcome to National Bank Holdings fourth quarter and full year 2022 earnings call. I’m joined by Aldis Birkans, our Chief Financial Officer. Adjusting for one-time acquisition expenses, we delivered pre-provision net revenue of $50 million with adjusted net income totaling $34.5 million or $0.91 per share for the fourth quarter. Further, our adjusted return on tangible common equity was 18.37% for the quarter. Solid loan growth and a very low beta on deposits set us up well to deliver a net interest margin of 4.39%. Our team simultaneously closed and integrated two strategically important banking acquisitions that we believe will meaningfully contribute in 2023 and beyond. Finally, the quality of our loan portfolio remains very strong with excellent performance metrics across the board. I'll thank you. And I'll turn the call over to Aldis to cover the quarter and full year in greater detail, as well as share guidance for 2023.

All right. Well, thank you, Tim. Good morning. As Tim mentioned, during my comments, I will cover the financial highlights for both the fourth quarter and the full year, as well as share our guidance for 2023. Consistent with our past practice, our guidance does not include any future interest rate policy changes by the Fed, nor does it include any large yield curve changes in general. As we reported in last night's release, we delivered another strong quarter of financial performance, while also completing the acquisition of Bank of Jackson Hole and fully converting systems for both recent bank acquisitions. For the fourth quarter, we reported net income of $16.7 million or $0.44 of earnings per diluted share. During the quarter, we realized $6.8 million of transaction-related expenses, as well as recorded a Day 1 CECL loan loss provision expense of $16.3 million for the Bank of Jackson Hole’s loan portfolio. As Tim shared, excluding these transaction-related items, our adjusted core net income was $34.5 million or $0.91 per diluted share, which is a 14% increase over the prior quarter’s adjusted results. Our pre-tax pre-provision net revenue, excluding the transaction expenses, grew $8.9 million or 22% on a linked quarter basis. We’re very pleased with the strong organic loan growth during 2022, and our teammates continue to focus on building robust new client relationships. During the fourth quarter, our loan balances grew $1.5 billion. $1.2 billion was driven by the acquired Bank of Jackson Hole loans. In the quarter, balances grew another $310 million or 21.5% annualized. On a full year basis, including the two acquisitions, our loan book increased an impressive $2.7 billion or 60%. We continue to operate in markets that are outperforming the broad national economic indicators on many fronts. However, our outlook for 2023 cannot ignore the prospects for slowing growth. For this year, we look to grow loan balances in mid-to-high single digits. Net interest margin was 4.39% and expanded another 38 basis points this past quarter and fully taxable net interest income increased $26 million on a linked quarter basis. The margin expansion was led by a 54 basis point increase in our originated loan portfolio yields. As noted, our variable rate loans, annually originated loans reflect the higher rate environment. The resulting earning asset yield widening was slightly offset by a 37 basis point widening in our total interest-bearing liabilities. Our cost of deposits increased just 15 basis points for the full year 2022. Our total deposit beta this rate cycle to date has been less than 5%. However, we are starting to see increased rate competition for deposit balances and looking ahead for 2023, we expect that our cost of funds will close out some of the margin widening we experienced in 2022. As such, we estimate that the margin will return to around 4% by the fourth quarter of 2023. In terms of our asset quality, if it remains strong, our non-accrual ratio improved 3 basis points to 0.23%. Our non-performing asset ratio improved another 4 basis points to 0.28%. The fourth quarter’s net charge-offs were just 4 basis points annualized and we finished the full year with net charge-offs of just 3 basis points. Both criticized and classified loan ratios also improved quarter-over-quarter. During the quarter, we recorded a provision expense of $21.9 million. And as I mentioned earlier, $16.3 million was driven by the establishment of a Day 1 allowance for credit losses for the Bank of Jackson Hole loan portfolio. Approximately $5.6 million of the provision expense was to support the quarter's strong organic loan growth and to increase the allowance to total loan coverage, which reflects increased economic uncertainty as indicated by the Moody's forecast scenarios. As a result, our ACL ratio to total loans ended the quarter at 1.24%, up from 1.15% at prior quarter end. Total non-interest income for the fourth quarter was $14.1 million or a $3.2 million decrease from the prior quarter. The billing quarter decrease was primarily driven by the slowdown in residential banking which seems to have settled into a lower run rate as of right now. Looking at the core banking service charge and bank card combined revenues, they increased $312,000 on a linked quarter basis and grew $2.1 million or 6.3% on a full year basis over 2021. For 2023, we project our total non-interest income to be in the range of $70 million to $75 million. The projections include our new non-interest income revenue streams, including the trust business income, as well as projected gains on the sale of SBA loans. Non-interest expense for the fourth quarter totaled $67.7 million and included approximately $6.8 million of acquisition-related costs. On a year-to-date basis, we have realized approximately $15.1 million of acquisition-related expenses, which was nearly 20% better than our initial estimates. Excluding the acquisition-related expenses, the fourth quarter's core operating expense was $60.9 million compared to $46.9 million of core expense in the third quarter. The linked quarter increase was primarily driven by the addition of a full quarter of both Rock Canyon and Bank of Jackson Hole operating expenses, as well as investments to unify build-out. Most M&A transaction-related items are recognized in 2022, and we do not expect additional costs to materially impact the 2023 expense. Looking ahead for 2023, we do project approximately $10 million to $12 million of expense related to unify ecosystem build-out. Inclusive of this strategically important investment, the total non-interest expense is projected to be in the range of $243 million to $247 million. When projecting the 2023 effective tax rate, we expect it to increase to the 20% to 21% range. The increase is entirely due to the projected higher taxable income in 2023. The past quarter's and last year's effective tax rates benefited from increased deductions due to the M&A-related expenses. As always, this projected rate excludes the FTE adjustment on interest income. In terms of capital management, we ended the quarter with a strong 8.38% TCE ratio and a 9.29% Tier 1 leverage ratio. The tangible book value per share ended the year at $20.63 and fully reflects now the two M&A transactions. In terms of the share count, we project diluted shares outstanding to remain around 38 million shares. And with that, I will turn it back to you.

Well, thank you, Aldis. We've shared a lot of detail with you. So let me ask the operator to open up the call for any questions that you might have.

Thank you. We’ll go first to Jeff Rulis with D.A. Davidson.

Thanks. Good morning.

Good morning, Jeff.

On margin, Aldis, I want to clarify if the guidance is at 4% at year end. Does that exclude any accretion?

It includes all of the acquired loan accretion increase and the expected increase in our cost of funds given the rate environment, but does not account for any rate changes the Fed may implement in February or later this year.

Got you. Okay. But I understand that the cost of funds is diminishing some of the advantages. Does that still suggest that on a core basis, you think it might be possible to see an additional increase in the first quarter? I’m curious, without any changes from the Fed, is there still a chance for a slight increase, and then possibly seeing that trend down toward the end of the year?

Yes, I think another way of looking at that is what net interest income will do, right, in terms of dollars more importantly than whether we're going to grow that. And I think our earning asset yield growth has a good chance of overcoming whatever the margin calculated squeeze there is, and we can at minimum I think hold it flat if not adding each quarter.

Okay.

This is Tim. I would add that, as a reminder, we targeted or expected that margin to drift down closer to 4 or even over the course of the fourth quarter. So we will admit is that we believe we're taking a conservative view on that glide path. But what we're not doing is giving up on our loan price discipline. I think the fact that over 80% of our deposit base is represented by core relationship accounts, much of that core operating accounts we think the area where we're going to need to flex on deposit pricing is on that other 20%. So if you think about areas like CDs that we haven't really leaned into, our inclination would be to lean into call it that nine-month plus CD as an area to pick up what we believe are reasonably cost fundings. And again, I guess the main point here is we're targeting to have margin compressed by year end as low as 4%. That’s at year end. Obviously, we're going to be doing everything we can just as we did in the fourth quarter to mitigate that and produce a strong return in that front as we can.

Yes, I understand you, Tim. I believe the potential here is quite significant, especially compared to the short-term expectations we've seen. Just a quick follow-up on the margin though. Looking ahead, if we can plan that far, are you implementing any hedges or strategies to manage asset sensitivity as we approach the end of the year? If rates do return to around 4%, are there plans for 2024 to further protect that level? Are you taking any steps on the balance sheet to safeguard against potential rate shifts in the future?

We selectively are actually adding some derivatives and rate floors to ensure that we can lock in as much as possible the margin that we’ve enjoyed here. And it is market dependent, rate dependent and price dependent, obviously, but we've throughout 2022 had a few hundred million of rate hedges. Clearly they are, call it, out of money right now. Don't have any value. But if rates were to reverse, we have some protection and looking to do some more of that in 2023 as well.

Okay. Thanks, Aldis. My other question kind of relates to the credit quality. The net move from NPAs was not significant quarter-to-quarter. Just want to double check that adds and deletes within that if there were any additions that were brought on from the acquisition, and maybe you had net payoffs on the legacy portfolio, just trying to see if there was anything under the hood what looks like a pretty modest increase in NPAs?

There was really nothing significant. If you adjust for it, the NPA ratio has decreased. We will evaluate it based on the overall portfolio. There are elements from the acquisitions that have influenced this, but our core portfolio has improved.

And really across a broad set of credit metrics. We do feel like the portfolio is positioned to perform very well.

Got it. And then just kind of as a jump off from that then, Aldis, I think you've mentioned, that's absent the CECL deal-related provision I think something approaching 6 million to support growth. If we read into, growth could pull back into the mid-to-high single digit, we could expect barring other changes macro-wise that that core provision could come in if growth were to slow?

Yes, I think our total losses stand at 1.24%. With the information we have, that's the level we plan to maintain assuming everything else remains constant. If loan growth slows down as we're projecting into mid-to-high single digits, the provision expense would similarly slow down. However, we still aim to keep the same loan loss coverage.

Fair enough. Thank you.

On the ACL going up, again, the credit book can be in a better shape. It really is driven by the CECL and the Moody’s outlook. It is deteriorating throughout the quarter the forecast scenarios to be using and that's driving some of this increase. Now having said that, what we said and starting this year with the uncertainty that exists around the economy, we certainly didn't fight or would mind that type of increase. So we like that increased provision allowance.

Yes, I would echo that I don't have an issue carrying 1.24 on an allowance for credit losses in an uncertain environment. At the end of the day, obviously, the two drivers that are really going to dictate that level will be the CECL process and to be more granular, the economic forecasts that are submitted and to your question, loan growth. So I think it will moderate on the CECL front if we start to see different economic projections, and it will moderate on the loan growth front if in fact we see the kind of levels of growth that we've projected for '23.

Okay, and it sort of drew out another question, sorry about that. 1.24 is a pretty big number, but Aldis do you have like a trued-up reserve if you were to include credit marks on deals, is there a figure that inclusive of that would be a higher coverage level?

There would be. We have about $34 million of loan loss reserves that goes up and beyond that that protects us from future losses as well. So that's another number which is equal about 45 basis points of total loans or 1.83% on the acquired loans.

Yes, it’s a good question and that's a big number.

Yes. Thanks, guys. I’ll step back.

All right. Thank you.

We'll take our next question from Kelly Motta with KBW.

Good morning, Kelly.

Hi. Good morning. I apologize if you covered this in your prepared remarks if I missed it. How much of your strong net interest income and margin is currently attributable to yields? Also, what does your guidance indicate regarding that contribution for the upcoming year?

Accretable yield is around $33 million being amortized, which is approximately 1.5 million per quarter.

Okay. Thanks, Aldis. That's really helpful.

I do want to point out though is it's kind of good and bad acquiring a loan book in the rate environment that had moved quite substantially from the time those loans are booked. So a good chunk of that accretion is actually rate mark. And we effectively bought a 4% loan in a 5% world and therefore got to markets at a discount. So it's a good accretion practice from both credit perspective, but it's a true loan yield rate the way we look at it, because had we originated that loan, it would have been originated in my example 5%, not 4%.

That's helpful. Regarding your fee income guidance, that's a significant increase from where you were in the fourth quarter. I'm curious if the fourth quarter included any SBA gains from Rock Canyon or if you're focusing on building the pipeline, as well as the outlook for that business in 2023, especially considering that secondary market premiums have decreased somewhat.

Our guidance is slightly higher than the fourth quarter performance. We can break it down into three areas: service charges, bank cards, and core banking service fees, which we aim to grow at a rate of mid-single digits. We achieved a 6.3% growth in this area in 2022, so I believe this goal is attainable. Regarding mortgages, I’ll address that shortly, along with other income. We have started to gain trust business through the Bank of Jackson Hole, which we expect to continue growing and is included in our other income. There were no SBA gains in the fourth quarter; historically, Rock Canyon Bank generated about $6 million to $9 million from SBA gain fee income, but we aren’t counting on reaching those levels this time, especially since SBA margins have decreased significantly. We have incorporated about half of those past SBA gain expectations into our guidance. The remainder consists of the usual non-interest income we typically report. As for mortgages, the fourth quarter and the first quarter are traditionally slow months for the purchase market. We expect some recovery in the summer months, and our projections align with what the MBA is forecasting, indicating that year-over-year volumes in the purchase market could still decline by 15% to 20% in 2023 compared to 2022. Overall, the fourth quarter felt like a bit of a low point, as I noted in my earlier remarks.

Thank you. As we look at this year, I'm aware that you have ongoing tech initiatives and efforts to unify those initiatives. I’m curious about how you prioritize these given the recent acquisition of two banks and how that aligns with your strategic plan for this year and beyond. Additionally, I would like to ask about expenses and the expected cost savings from the deals.

Yes, thank you, Kelly. We are progressing well with the unifying initiative. Interestingly, we are gaining advantages from the reductions in the core FinTech technology sector. The availability of talent at more favorable pricing is a benefit for us. I am increasingly reassured by our key partners, including Mobiquity, who are collaborating with us on this unifying project. We anticipate being ready to begin some testing with select businesses by the end of this year on certain aspects of unifying. Now, I'll hand it over to Aldis to provide details on expenses. Although I see this as an investment, Aldis, could you please walk Kelly through the figures?

Yes. So really stripping out the one-time expense of $6.8 million this last quarter, what we call core operating expense was approximately $60.9 million. Certainly, a lot of noise still this quarter, right, given that we just closed Bank of Jackson Hole, integrated two systems. The Bank of Jackson Hole system integration took place in December. So certainly, there's still some overlap and synergies still to become and realized. But at the same time, we did step up to unify investment in the fourth quarter and just it's in our press release yesterday or earnings release yesterday, but for full year that added up to be about $4.3 million investment. Now looking ahead for 2023, if you were to take the $60.9 million and analyze it, it come out right in the middle of the range what I gave for this year, which means that not only we will have to figure out how to cover the unify investment of $10 million to $12 million, the FDIC insurance increase which all of our industry is increasing by 2 basis points of FDIC, as well as any inflationary pressures that are still coming through. We're going to have to figure out that and we've always managed expenses well and it's been a strong culture here. But in terms of run rate, basically, we kind of feel like we are at the run rate for next year, including all those investments.

Great. Thanks, Tim and Aldis for all the color. I’ll step back.

Thank you, Kelly.

We’ll go next to Andrew Terrell with Stephens.

Hi. Good morning, Tim. Good morning, Aldis.

Good morning.

Good morning.

Maybe just to follow up on expenses, I hear that kind of color and guidance for I think it’s 243, 247 for 2023. If they're kind of 10 million to 12 million of two unify expenses coming through in the coming year, I guess should we think about those as more transitory implying that the 2024 expense run rate kind of moderates, or would you build off of this 243, 247 into '24?

I think you should look at that possibility for '25 and beyond. And what we haven't talked about that I'll add given your question is where we're increasingly optimistic is around taking some of the low-cost new technology that we're putting in place to unify and applying it to our core bank and the ability to lower that operating cost over the next few years. So we're not in a position at this point to provide guidance on that front. But if you're asking about '24 and thinking about '25, I will tell you our optimism around leveraging, for example, the challenger core that we are leveraging to unify gets really interesting. We will remain as hyper-focused on our operating efficiency as we've ever been. And I think we're going to end up being able to make some real interesting trade-offs in terms of historical cost versus a future way of operating the business.

Okay. I appreciate the added color there. If I could just clarify on the loan growth guidance, mid to high single digits, is that referring specifically to the originating loans, so not excluding what you would expect from the acquired runoff?

No, that's the net loan book. That's covering also the acquired loan book runoff.

Got it. Okay. And then for Aldis, just going back to the 4% NIM expectation by the end of the year, I was hoping to just get maybe some incremental color on the moving pieces there specifically as it related to kind of deposit costs increases you're expecting? And then does that guidance reflect any change in deposit composition, so any incremental kind of non-interest bearing deposit mix change for here?

In terms of deposit composition, I think Tim addressed it well. It seems that consumers are leaning towards the highest earning asset for them, which is time deposits. Therefore, I anticipate that we will likely see some increase in our CD balances. Currently, they make up only 10% of our total balances, whereas historically we've been closer to 20%. So, we are gradually working on building that balance sheet. Regarding the non-interest bearing deposit mix, I don't foresee significant changes. Our strategy is always to build relationships, starting with checking accounts, and I expect that to remain consistent. Looking at the flows, we haven't observed any specific large movements that stand out. We've seen rate fluctuations and people continuing to spend their stimulus checks, but it's unclear how much is left. Overall, I think the mix will remain stable.

Okay, very good. And then just to maybe clarify. I think I heard this right in the discussion, but outside of just the NIM fluctuations we should expect, you think you can grow net interest income every quarter off of this base of, call it, 96 million in 4Q? Did I get that right?

I think we have a good shot at it, yes.

Okay, very good. Thank you for taking the questions.

Thank you.

Hi. Good morning, guys.

Good morning.

Just sticking with the balance sheet and the margin here, do you think the balance sheet reached the point where any incremental rate hikes aren't going to have any benefit to the margin or funding costs could increase that quickly in the near term assuming we get some rate hikes this quarter? Or do you think there's still some upward bias from the rate hikes?

I think there might be still upward bias. The way we calculate it in terms of again our model language clearly is modeling and a lot of times, we'll hit far away from reality. But we still reflect small asset sensitivity in our position. So I do expect that the rate hikes might still be beneficial on a net-net basis. Again, in my mind, any marginal rate hike just creates that catch up, so to say, the cost of funding at some point. And why we say 4% return is really that's how, and I think I mentioned that in prior calls is, when we look at our balance sheet composition, the type of lending that we do, the type of core deposit balance sheet that we have, the liquidity that we have through the investment portfolio, in the long run I think we can maintain in a normalized yield curve or normalized rate environment 4% or thereabouts margin. And therefore for us today it feels elevated and we'd be projecting it to normalize over time.

I would add is if you take this down to the banker level, our bankers understand that as the cost of their inventory, which is deposit increases, it's incumbent that they increase spreads on loans that they're making. We take it one step further in terms of our relationship to review with a client. If a client is providing low-cost funding, they’re going to see one level of pricing as compared to a client or a prospective client coming in, looking to borrow money but not having the core operating accounts and core deposits available. And that's a discipline that we adhere to that we're not going to let up on. And that's why I may be a little more optimistic than even Aldis in terms of our ability to continue to see progress on loan margin.

And one more data point I'll add is that for the fourth quarter, which included October originations that were before the latest rate hike, our new loan origination rate was just under 7%. So newly originated loans away from rate increases and from variable rate loans are accretive to our margin.

We're not going to give business away. And we are not into doing business to lose money in relationships. And I think our clients understand that.

Got it. That makes sense. Thanks for that color there. And then just a little detail on the loan growth. Have you seen the pipeline or demand temper at all, or is it still pretty strong, you just expect growth maybe to slow in the latter part of the year?

We are, frankly, surprised at how strong demand has continued to be. I think where we'll temper that is with what I was talking about earlier, in terms of being more selective if a new relationship is prospectively coming into the bank and they don't have enough to offer on the treasury or depository management front, they may not be a right fit for us. I'm not worried about demand. We're fortunate we're in incredibly strong markets that continue to perform well. But number one, as we've discussed in prior quarterly calls, we have certainly raised our credit underwriting criteria. And number two, the relationship pricing has got to work for us. And our very simple message to clients is it's got to be a win-win. You want us to be here over the long run. We can't do that by participating in relationships where we're not generating adequate returns.

Got it. That's really helpful color. Thanks so much. I’ll step back.

Thank you.

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

Hi, guys. Good morning.

Jen really butchered your firm's name, sorry about that.

I wanted to revisit the deposit question and focus on the margin. What are you assuming for the beta as we move later this year? The current 5% beta seems quite low, and I can’t help but feel concerned about potentially losing some deposits as people adjust to the current rate environment. Can you provide some insight on those two topics?

Yes. Before Aldis provides more details, I want to highlight that our focus will be on the 20% of accounts that we have identified as not being core operating accounts. Core operating accounts, whether for individuals or businesses, are typically less sensitive since they are where business transactions occur. For personal accounts, these are where paychecks are deposited, and they don't represent the sensitive funds we're discussing. The 20% I mentioned includes 10% that have historically been in CDs, potentially rising to 20%. As Aldis noted, we might significantly increase our CD offerings to offer a competitive return on both time and money.

Okay.

I'll turn it to Aldis. He was hoping I would skip him. I’ll turn it to Aldis to try to answer your question. Get out your crystal ball and try to answer the question on the beta.

I was hoping not to because I don't have a crystal ball. And having been reading the beta calculations, it can be certainly on total deposits, interest-bearing deposits, interest-bearing liabilities, and all of that. So I like to stay away from projecting beta here really and just stand by the guidance that we gave in the margin. I think we look at that as a whole. And embedded there are certain obviously assumptions on asset pricing as well as deposits. But getting to that 4% over a period of time I think is where our goal is, or how to play out.

We expect that our beta will perform better than the national averages based on our history. There is nothing we have observed that indicates this trend will change.

Okay. And then I know it's not a huge concern in terms of the fee income with the whole $10 billion question, there's several things you can unwrap there with the regulators wanting you to have more staff for a lot of different things. Maybe there's an advantage for staying under. And just wanted to get your thoughts, Tim, on how you’re thinking about the $10 billion question.

Yes. I'll just remind everyone that when we started this company, we had to agree to operate as though we were over a $10 billion institution from day one. So we've put in a lot of that infrastructure and been operating with that cost for some time now. Frankly, it turned out to be a benefit. I'll give the regulators a lot of credit because it put an infrastructure in place that we've really been able to leverage and lean into. Will there be some incremental cost? I'm sure there will be. Our discussions with our regulators to date have not suggested anything dramatic at all or frankly not even anything noteworthy beyond what we're doing today. But then Aldis can speak to the timing of this, because it's not as though the moment you crossed the $10 billion threshold, you're held to any changes in the first place.

Yes. And certainly given our guidance on the loan growth, which you could certainly apply to how total assets will grow as well and back into that there is a good chance that we do cross 10 billion by the end of this year. And therefore, again, this year's guidance doesn't include any of that, because they wouldn't impact this year. It really starts, if it does, in 2024 on the expense side. On the side, again, for us right now on the run rate basis, call it, it would be about $10 million-ish hit to the interchange, which would for 2024 is only half a year. So I'm estimating 2%, maybe 3% of total net income for 2024, so very manageable impact.

Okay, and it’s a little bigger number than I was recalling. All right, great. And then maybe just one last one just thinking about, Tim, the franchise you have now and you've done two acquisitions here in the past quarter. So besides the two unify initiative, would there be other things that you want to accomplish in '23? Would additional M&A kind of make sense if that could happen? Obviously, the current environment doesn't suggest that's very unlikely, but just want to make sure I was aware of whatever else you were looking to try and accomplish this year.

I'm very proud of the team and the fact that we were able to announce a close and fully integrate two institutions in short order in 2022. We certainly continue to have a pipeline of discussions with banks that reside in our core markets. We do like the idea of growing and expanding in attractive markets where we operate. So when you think about certainly Colorado, but Utah, even Idaho at this point, which may be lost on some folks that we've got an interesting presence in Boise now, and we really liked what we're seeing in that market, think we can do a lot organically there. And I think it's just an interesting market to pay more attention to, at least for us. And as we've always been, we're just going to be prudent stewards of capital. So if there's a seller interested in doing something with us, they're going to have to be cognizant of the fact that we've, again, got to create a win-win. And we're very sincere about that. So we'll be patient and we'll be thoughtful. We feel really good about our organic growth prospects. But we certainly have not closed the door on looking at new potential partners to help move NBH ahead. Where we have closed the door, and I've mentioned this in prior meetings, is frankly we are not spending time talking to community banks in low growth markets. We are not going to fall into that trap of simply acquiring with the idea of taking out 20% or 30%, riding that accretion for a few years and putting ourselves on that treadmill. That's just not something of interest to us.

Okay, that's great. I appreciate all the color.

You bet.

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

Thank you, Jen. I'll simply say thank you for joining us today. We appreciate your confidence in NBH. And we'll be working hard to deliver more along the way. Take care. Thank you.

And this concludes today's conference call. If you'd like to listen to the telephone replay of this call, it will be available in approximately 24 hours, and the link will be on the company's website on the Investor Relations page. Thank you very much and have a great day. You may now disconnect.