NBH Bank (NBHC) Q3 2025 Earnings Call Transcript

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Date

Wednesday, Oct. 22, 2025, at 11 a.m. ET

Call participants

• Chairman and Chief Executive Officer — G. Timothy Laney
• President — Aldis Birkans
• Chief Financial Officer — Nicole Van Denabeele
• Director of Investor Relations — Emily Gooden

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Takeaways

• Adjusted net income -- $36.6 million adjusted net income, up 30% annualized from the prior quarter, excluding $1.7 million in Vista Bank merger expenses for the third quarter of 2025.
• Adjusted EPS -- $0.96 per diluted share, excluding non-recurring transaction costs for the third quarter of 2025.
• Net interest margin (tax-equivalent) -- Expanded three basis points sequentially to 3.98%.
• Pre-provision net revenue (tax-equivalent, adjusted) -- Fully taxable equivalent adjusted pre-provision net revenue grew 17.5% annualized over the prior quarter.
• Loan funding -- $421 million funded. The commercial and industrial (C&I) portfolio annualized growth was 8.7%.
• Deposit trends -- Core deposits grew by approximately $200 million on a linked-quarter spot basis. Total deposits increased $22 million sequentially, with average deposits at $8.2 billion.
• Allowance for loan losses -- Maintained at 1.2% of total loans, with $18 million in additional credit marks on acquired portfolios, representing 24 basis points of supplemental loan loss coverage.
• Noninterest income -- Increased 21% sequentially to $20.7 million, 13% higher year-over-year, aided by $3.5 million in partnership investment gains.
• Noninterest expense -- Totaled $67.2 million in the third quarter. Adjusted projected core noninterest expense is $64 million to $66 million for the fourth quarter of 2025, excluding acquisition costs, with $7 million to $9 million expected for 2Unify in the fourth quarter of 2025.
• Tangible book value per share -- Increased at a 12% annualized rate to $27.45 sequentially.
• Capital position -- Tangible common equity ratio was 10.6%, Tier 1 leverage ratio was 11.5%, and common equity Tier 1 ratio stood at 14.7%.
• Share repurchases -- 240,000 shares repurchased for $8.9 million. 359,000 shares repurchased year to date.
• Vista Bank merger -- On track to close in the first quarter; $1.7 million in related expenses incurred.
• 2Unify platform launch -- Launched during the quarter, with expense step-up to $6.2 million. Expected ongoing quarterly 2Unify expenses of $7 million to $9 million for the fourth quarter of 2025; revenue guidance deferred until the next earnings call.

Summary

National Bank Holdings (NYSE:NBHC) management confirmed that the Vista Bank acquisition remains on schedule and noted specific integration synergies, particularly across treasury management and wealth business lines. Stable credit quality trends included further reductions in nonperforming loans and assets. The company indicated flexibility for further capital deployment through mergers and acquisitions, enhanced by significant year-to-date share repurchases totaling 359,000 shares. Guidance for the next quarter implies continued focus on controlling core noninterest expenses and supporting growth in new business lines such as 2Unify.

• The chief financial officer stated that the fully taxable equivalent net interest margin is expected to remain in the mid-three nines for the remainder of 2025, barring further Federal Reserve action.
• Leadership described recent loan balance declines as driven by a heavy volume of payoffs in commercial real estate, not by credit concerns or internal risk actions.
• The bank expects deposit costs to decrease in the fourth quarter as a result of actions aligned with the latest Federal Reserve rate cut.
• Pro forma with Vista Bank, management expects to remain comfortably below the 200% non-owner occupied commercial real estate/risk-based capital threshold.
• Management cited a very important partnership discussion that could have a powerful impact on the trajectory of the 2Unify platform.
• The company maintains that classified and criticized assets declined sequentially, suggesting credit resilience in the commercial portfolio.
• Commenting on the competitive loan environment, the chief executive officer noted that private credit continues to step into the market, lending money on credit terms and at pricing that is highly competitive.

Industry glossary

• 2Unify: NBHC’s proprietary digital banking platform, referenced as a business line and cost center in the call.
• C&I (Commercial & Industrial): Loans made to business borrowers for equipment, working capital, and other business purposes, distinct from commercial real estate lending.
• Core deposits: Stable, low-cost deposits from customers, excluding brokered and high-balance, rate-sensitive accounts.
• Non-owner occupied CRE: Commercial real estate loans for properties not occupied by the borrower, typically presenting higher regulatory scrutiny and risk.
• Camber deposits: Specialized deposit product used by NBHC to manage regulatory asset thresholds.

Full Conference Call Transcript

Emily Gooden: Thank you, Shelly, and good morning. We will begin today's call with prepared remarks followed by a question and answer session. 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, noninterest income, margins, allowance, 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. 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 and CEO, Mr. Tim Laney.

G. Timothy Laney: Thank you, Emily. That's one of the more enthusiastic readouts of disclaimer I've heard in a while. That was great. So thank you. Good morning all and thanks for joining us as we discuss National Bank Holdings third quarter earnings results. I'm joined by our President, Aldis Birkans, as well as our Chief Financial Officer, Nicole Van Denabeele. We're pleased to have delivered $0.96 of earnings per diluted share and a return on tangible common equity of 14.72%, and it should be noted that this return was achieved while maintaining a high level of capital. We were able to deliver these results despite continued headwinds related to heavy volume of payoffs coming primarily out of our CRE portfolio.

Now having said this, I'm proud of our team's new loan production during the quarter and the quality of the new relationships is very strong. We're pleased to announce our merger with Vista Bank shares or to have announced our merger with Vista Bank shares during the quarter. I'll have to say the more we learn about the quality of our new teammates, the more excited we become about future possibilities. And we believe we're set up for a nice fourth quarter. New relationship activity is strong, credit quality trends continue to be positive, we have additional productivity initiatives in the work and we believe we have some very positive possibilities for 2Unify.

So on that note, I'll turn the call over to Nicole to cover the quarter in greater detail.

Nicole Van Denabeele: Thank you, Tim, and good morning. During today's call, I will cover the financial results for the third quarter, as well as touch on our guidance for the remainder of the year, which does not include any future interest rate policy changes by the Fed. For the third quarter, we reported net income of $35.3 million or $0.92 of earnings per diluted share. We recently announced our planned merger with Vista Bank and we remain on track to close in the first quarter. In conjunction with the acquisition work, we incurred approximately $1.7 million in deal-related expenses during the quarter.

Excluding the acquisition expenses, adjusted net income increased 30% annualized over the prior quarter to $36.6 million or $0.96 of earnings per diluted share. This resulted in a strong adjusted return on average tangible assets of 1.6% and an adjusted return on average tangible common equity of 14.7% on an elevated equity base. During the third quarter, we grew our fully taxable equivalent adjusted pre-provision net revenue by 17.5% annualized over the prior quarter, maintained a top quartile net interest margin, and built additional excess capital. Also during the quarter, our teams generated $421 million of loan funding bringing total year-to-date loan fundings to $1 billion.

Quarterly loan fundings have increased each 2025 and our bankers continue to build loan pipeline. Aldis will touch on the loan paydown headwinds we've been experiencing in his comments. Our disciplined approach to loan and deposit pricing over the last twelve months has resulted in solid margin expansion. Fully taxable equivalent net interest margin expanded three basis points during the third quarter to 3.98%, which is 11 points of margin expense expansion over the same quarter last year. The remainder of 2025, we project fully taxable equivalent net interest margin to remain in the mid-three nines and as I mentioned earlier, this does not incorporate any future interest rate decisions by the Fed.

Credit quality improved during the quarter with a 20% in non-performing loans which now stand at just $27 million. Our non-performing loan ratio improved nine basis points during the quarter to 36 basis points, which is 10 basis points lower than year-end levels. As a result of proactive efforts to resolve problem loans, we realized net recoveries of five basis points annualized during the quarter. The allowance to total loans ratio remained consistent at 1.2%. Additionally, we continue to hold $18 million of March against our acquired loan portfolio which adds an additional 24 basis points of loan loss coverage if applied across the entire loan portfolio. Turning to deposits.

Total deposits ended the quarter $22 million higher than the prior quarter end, and average deposits held steady at $8.2 billion. Cost of deposits totaled 2% and our total cost of funds was 2.1%. Non-interest income for the third quarter totaled $20.7 million, 21% higher than the second quarter and 13% higher than the third quarter of last year. The quarter benefited from $3.5 million of unrealized gains on partnership investments as well as higher service charges and mortgage banking income over the prior quarter. For the remainder of 2025, we project our total non-interest income to be in the range of $15 million to $17 million.

We are pleased to have launched 2Unify during the quarter and we plan to provide 2Unify revenue guidance during our next quarterly earnings call. Non-interest expense totaled $67.2 million and included $1.7 million of acquisition expenses and $6.2 million of 2Unify expense. Now that we are live with 2Unify, our linked quarter 2Unify expense increased as expected, with the amortization of the associated capitalized development assets. When adjusting for the acquisition expenses, an increase 2Unify expense impacting the quarter, we remain on track to deliver the results expected from the expense reduction actions taken during the second quarter.

As a result, we project core non-interest expense for the remainder of the year to be in the range of $64 million to $66 million before the impact of acquisition-related expenses. We maintain strong levels of liquidity and continue to build excess capital. We ended the quarter with a strong TCE ratio of 10.6%, Tier one leverage ratio of 11.5%, and a common equity Tier one ratio of 14.7%. We repurchased 240,000 shares during the quarter totaling $8.9 million bringing total shares repurchased year to date to 359,000 shares. During the third quarter, our tangible book value per share grew 12% annualized to $27.45. With that, I will turn the call over to Aldis.

Aldis Birkans: Thank you, Nicole, good morning. Let me start by saying that our preparations for Vista merger are well and remain on track. Vista reported strong financial results for third quarter, which further validate the strategic value of this transaction and we continue to be very excited about what this partnership will bring to our combined organization. For NBH this quarter, we saw loan production return to more normalized levels with total loan funding so $421 million. Fundings were led by commercial banking, particularly in our C&I portfolio, which expanded at an annualized rate of 8.7%. This reflects a healthy rebound in client activity and continued progress in building our relationship-driven commercial franchise.

While we are encouraged by this growth, overall loan portfolio outstandings were tempered by continued loan pay downs, particularly in certain CIB categories where stabilized properties have moved to permanent financing. At quarter end, our total non-owner occupied CRE to total risk-based capital ratio stood at a low 132%, reflecting a well-balanced risk profile. On pro forma basis, incorporating the pending Vista transaction we expect to remain comfortably below the 200% level. Credit metrics continue to demonstrate a stable loan portfolio with improving trends. Both classified and criticized assets declined during the third quarter.

Non-performing assets decreased by another $6.3 million with the NPA ratio improving by eight basis points from the prior quarter and by 10 basis points on a year-to-date basis. Overall, we are pleased with the return to normalized loan production, the strength in our C&I portfolio, and the disciplined management of our CRE exposure, all of which position us well for sustainable high-quality growth going forward. A good example of our relationship banking success this quarter was in core deposits, which grew approximately $200 million on linked quarter spot balance basis, with nearly half of that growth coming from non-interest bearing transaction deposits.

Regarding deposit costs, we expect to see a decrease in the fourth quarter as a result of actions taken in late September following the most recent Fed rate cut. We are also prepared to take additional measures should the Fed continue on its rate cutting path. One final note on deposits. In the fourth quarter, we plan to use the flexibility provided by our Camber deposits to manage our balance sheet and remain below the $10 billion threshold. Lastly, I'd like to highlight the strong performance from our longstanding FinTech partnership investments, which delivered $3.5 million in gains included in this quarter's financials.

While these results from these initiatives may not always move in a straight line, we continue to expect positive financial and strategic outcomes over the long term. Tim, I'll turn it back to you.

G. Timothy Laney: Thanks, Aldis. Well, we had an active third quarter. We generated $421 million in loan fundings, we had solid deposit growth, we maintained pricing discipline resulting in a net interest margin of 3.98%. We experienced a decline in classified and criticized assets accompanied by a nice decrease in non-performing assets. We grew our tangible book value per share 12% annualized during the quarter and we announced a meaningful acquisition of Vista Bank shares. And on that note, Shelly, I would ask you to open up the call for questions.

Operator: Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, you could press star 1 to ask a question, and we'll pause for just a moment to allow everyone an opportunity to signal for questions. And we'll now take your first question coming from the line of Jeff Rulis with D.A. Davidson.

Jeff Rulis: Thanks. Good morning.

G. Timothy Laney: Hey, good morning.

Jeff Rulis: I wanted to dig into the margin in a little more detail. The mid-three ninety guide talking about entering the quarter with some lower deposit costs. Just kind of engage with that a little bit more on what looks like rate cuts that are near certainty. The impact of which and maybe the push and pull of why at three ninety-eight you're kind of pulling it back down I suppose, absent cuts. But maybe you could touch on the expected impact there.

Nicole Van Denabeele: Yes, good morning Jeff, this is Nicole. I'll mention that the third quarter's margin, it was positively impacted by about $0.5 million of interest and fees recovered on the large recovery that we had in the quarter. That was about two basis points of margin impact. So we still feel good and solid mid-3.9s margin for the quarter. Looking ahead to the potential for rate cuts in Q4, the very likely outcome of a rate cut next week. Our teams have started teeing up action to take down deposit rates in line with the Fed.

We have a history of being very disciplined both on rates up and rates down cycles of managing our on both sides of the balance sheet and we are prepared to take those actions next week. And we do believe for that rate cut that deposit actions that we have planned will offset the impact of the repricing on our variable loan portfolio.

Jeff Rulis: Okay, really helpful. I appreciate it. And then on the expense side, can the 2Unify step up, is that can we view that as kind of will now be in the run rate? Do you see a leg up higher again in coming quarters? Or just trying to get a little more color on the expense build if any, regarding that piece before we get kind of the revenue potential visibility in the fourth quarter call.

Nicole Van Denabeele: Yeah, on the topic of 2U, expenses, that step up this quarter was expected in line with launching 2Unify. We were expecting a step up in depreciation expense of that capitalized development asset. We will continue to invest in marketing for 2Unify and then as we onboard 2Unify clients, there's a component of some variable expense that will come online as well.

Jeff Rulis: I guess if Nicole if we were to zoom out a little bit and think about 26% expenses, I don't want to front run as you pull budgets. But trying to think about overall with 2Unify included, I know you've had some actions to reduce costs as well. I don't know if you could speak to overall growth of expenses expected in 2026 or just maybe frame up the push and pull of what from a jump off point of what you kind of framed up of call it $65 million core in fourth quarter?

G. Timothy Laney: Jeff, this is Tim. We're in the middle of some pretty partnership discussions as it relates to 2Unify right now. And we're really not in a position to speak in more detail to what might happen there in '26. We will maintain our commitment, as Nicole mentioned, earlier, to address 2Unify one way or the other. In our fourth quarter earnings call. I would tell you even with the step up in if everything was status quo even with a step up in amortization, depreciation next year on 2Unify we will work to keep those expenses relatively flat. But that's assuming status quo and at this point, we just can't speak to any more detail on 2U.

Jeff Rulis: Yep. Appreciate gonna take a little time to kinda pull that together. So thanks for the thoughts. I'll step back.

Operator: Your next question is coming from the line of Kelly Molda with KBW.

Kelly Molda: Hey, morning. Thanks for the question. Maybe turning back to loan growth, it was nice to see, I think you called out a step up in production. I see balances were down. Can you speak to if any of the paydowns here? I know in prior quarters, had been managing the book for credit. Was there any kind of puts and pulls related to that? And if you could provide an outlook for given what sounds like strength in the pipelines, what the expectations are ahead? What do you expect to reverse this trend now Q4?

G. Timothy Laney: Thanks, Kelly. This is Tim. I'll begin and then turn it to Aldis. I would tell you that third quarter reduction volume was not driven by directive pay downs. We really think we've moved through addressing any risk in the portfolio that we felt we needed to address given the macroeconomic environment. What we've seen in the third quarter was largely heavy volume of payoffs as temporary or construction funding was going to perm with very attractive perm financing by alternative lenders.

And quite frankly, we have seen private credit continue to step into the market lending money on credit terms and at pricing that you know, I've done this or call it four decades, and I just don't understand what they're doing because we've just simply seen price and credit term competition from private credit that we're not going to compete with. So I'll turn it to Aldis to talk about how we believe we're positioned to overcome that. Because we are feeling very good about our pipeline and where we now stand with our, in particular, CRE portfolio.

Aldis Birkans: Yes. Thanks, Tim. And I'll just add on the Page 10 of the investor deck on the loan summary table, it actually is visible. If you look at our commercial real estate production itself was pretty healthy this quarter but embedded we kind of had I'll call it, between $100 million, $150 million headwind from pay downs that Tim was mentioning, and those are on the table above that you can see on between our originated and acquired books. Looking at the fourth quarter, our pipelines, just like entering this quarter, look very healthy, very good. We are optimistic that we return to growth subject to this behavior that we just discussed.

But other than that, I'm very optimistic about fourth quarter.

Kelly Molda: Got it. That's helpful. And then just on the expenses, you know, you announced the cost save plan, last July. Wondering, did we get the full benefit of that this quarter? And one. And then two, I apologize if I missed it, but how much 2Unify expenses were in Q3 as well as what's baked into that 64 to 66 for Q4.

Nicole Van Denabeele: Yeah, good morning, Kelly. I'll take that one. We've been closely monitoring our progress on the expense reduction actions that we announced last quarter. And we are delivering on those commitments. You're right, Q3 was a little noisy. It was by $1.7 million of acquisition expenses, $6.2 million of 2Unify expenses, the third quarter, it was impacted by higher mortgage commissions, view that as a positive. Because it was driven by higher mortgage revenues. And then there was a couple of other timing impacts in the third quarter. We had about a $700,000 fair value adjusted on our deferred comp liability and then we were impacted by the timing of certain occupancy and equipment expenses.

Kelly Molda: Got it. Thanks. I think the last thing was, how much 2Unify is in the Q4 run rate.

Nicole Van Denabeele: Yeah. We in the Q4 run rate, we're expecting 2Unify expenses somewhere in the range of $7 million to $9 million and that does account for some step up in marketing spend and variable costs associated with user increases.

Kelly Molda: Got it. That's helpful. Last question for me. You guys announced a really exciting acquisition last month. And it's on track to close next quarter. Wondering if you found the pace of this discussions, clearly, you're in the market, given your announcement. So wondering if you've provide us, Tim, with kind of if you've seen any flurry of inbound on the back of that announcement. Thanks.

G. Timothy Laney: Kelly, I think I've slept in my own bed four nights in over the last three weeks. There have been a lot of discussions and we remain focused across our existing footprint. We would love to do more in tech and build on what John and his team at Vista have built. And we're seeing other interesting opportunities that we think could create meaningful market share step ups in markets that we already do business with. So short answer to your question is, yes, we're very active.

Kelly Molda: Great. Thank you. I will step back.

Operator: Next question is coming from the line of Andrew Terrell with Stephens.

Andrew Terrell: Hey, good morning.

G. Timothy Laney: Hey, good morning.

Andrew Terrell: Tim, I wanted to ask a question around 2Unify, and I've also don't wanna, you know, front run any conversation we'll have in January and I get that, you know, maybe not too much to share here. But I guess I'm just curious from a big picture standpoint, you guys have been pretty clear on some of the expense recently associated with that. And you know, it sounds like marketing spend could ramp, and then there's also maybe a variable component as you begin onboarding clients from an expense standpoint.

I'm just curious, when you look near to medium term, how long do you think it takes to generate positive operating leverage and do you feel like you have near term visibility to positive operating leverage in that business?

G. Timothy Laney: I applaud you asked for asking the question, and I'll simply say again, we'll be providing all of that detail on our fourth quarter earnings call. I think I would also, and I mentioned this earlier, repeat that we're in we're literally in the middle of a very important partnership discussion that we believe could have a powerful impact on the way 2Unify forward. And it's just inappropriate to be talking about 2Unify anymore this morning.

Andrew Terrell: Understood. I appreciate it. Yeah. I had to had to give it a shot there. Thank you.

G. Timothy Laney: And I applaud.

Andrew Terrell: I was also, you know, interested just on your discussion around private credit. And the competition you guys are experiencing there. And I'm curious, Tim, if you could share any more specifically around where you're seeing that either geographically from product type? Just any more color on where you're seeing private credit be most competitive?

G. Timothy Laney: Yes. I mean, really, primarily in the commercial real estate sector. And I would tell you that's the vast majority of the action we're seeing there.

Andrew Terrell: Yep. Okay. And then last one for me. Just I thought you guys bought back a little bit of stock this quarter. Your capital is still built very nicely. You'll close Vista but still have a pretty strong capital position. And I know sounds like interested in future M&A, but any interest in further capital deployment on the buyback?

Aldis Birkans: Yes, Andrew, this is Aldis. So as you mentioned, we did buy $8 million or so in. We still have about $35 million, $36 million out authorization left. We'll be optimistic whether along the in sort of in light of the discussions that we're having with potential M&A targets as well. But also it'd be remiss if I didn't mention the 12% tangible book value growth this quarter that we built on top of that. $8 million buyback. So we feel very good about our capital build over the last twelve months, sit very strong excess capital levels and we are looking at potential strategic options there.

Andrew Terrell: Perfect. Thank you guys for taking the questions.

G. Timothy Laney: Thank you.

Operator: And your next question will be coming from the line of Brett Rabatin with Hovde Group.

Brett Rabatin: Hey. Good morning, everybody. I won't ask about 2Unify. Wanted to go back just to the payoffs. I know we've kinda beat that to death here a little bit too, but just wanted to make sure, you know, it sounds like you're expecting better trends in the fourth quarter, private credit aside. Does the shape of the curve on the longer end coming in here, how that impact maybe the commercial real estate portfolio? And do you have any line of sight into know, the CRE books staying? Or what's any thoughts on yield curve from here relative to that portfolio?

Aldis Birkans: Not at this moment. I don't think we've seen I'll say I have not heard from our bankers that we've seen a pay down prepay, so to say, based on the refinancing opportunities and lower yields. Now that's not to say that, that doesn't come through at some time, but to date shape of the yield curve has not impacted our pay down activity.

Brett Rabatin: Okay. And then the other question I had was just around the Vista deal. And, Tim, it sounds like you've been on the road quite a bit. Just was hoping to hear I know one of the aspects of the transaction that you're excited about is treasury management. Wealth, and trust. You know, any thoughts relative to the deal call on fee income and those things, specifically?

G. Timothy Laney: We lost you at the end. You said any thoughts related to what?

Brett Rabatin: Oh, I'm sorry. Any thoughts related to wealth, treasury management, trusts, those opportunities for the pro forma franchise?

G. Timothy Laney: Well, look, first and foremost, what I'm excited about is the caliber of leadership and the quality of the new teammates coming in from Vista Bank shares. Think they've done a remarkable job taking market share and I'm in an important market like Dallas, Texas. And I don't have any reason to expect that to do anything but other than grow. I think combination of these teams is going to make us incredibly strong we're going to be leveraging key talent out of Vista across our entire organization. We remain committed to taking best practices, whether they come from NBH or Vista and running with those best practices.

And we are going to be delivering frankly, a much broader suite of treasury management capabilities into Texas, into Vista with NBH's arsenal of treasury capabilities. We're super excited about what we can do in the trust and wealth management arena as a matter. Vista had been outsourcing that to a third party. Given what we're able to do with our Wyoming-based trust business in particular, and bringing those opportunities to clients in the state of Texas, just as we're doing around the rest of the franchise, I think can be monumental mean, I am genuinely that excited about it.

I continue to say that what we're able to do in Wyoming for clients who are really concerned about privacy that are concerned about controlling their trust, etcetera. Is unfortunately one of the better kept secrets. But as we work to get that message out, I think we're going to continue to see exceptional growth there. Now was there one other? I hit treasury, I hit trust.

Brett Rabatin: Wealth management. And really, I'll say with Vista, they've had they've built a solid private banking business and again have been outsourcing that trust and wealth management piece. And so for the opportunity to bring that in house is exciting. And Aldis, I'd ask you to comment.

Aldis Birkans: Just say that we're not waiting until first quarter when we come together to start working on these partnerships. John and I have weekly calls and we bring our teams together and to the extent that they already handing off those opportunities someplace else, we'd rather be there in the fourth quarter already picking up those opportunities. So that work is underway and those synergies should be hopefully start showing their benefits here in fourth quarter.

Brett Rabatin: Okay. That's all really helpful. Thanks so much guys.

Aldis Birkans: Alright. Thank you.

Operator: Next question is coming from the line of Kelly Molda with KBW.

Kelly Molda: Hey. Thanks for letting me jump on. I think your kind of while we have you, NBH been great at managing credit. You did have that you know, one idiosyncratic loan. I think it won Q, but otherwise, it's been really strong. Tim, Aldis, I'm just wondering, the focus on NDFI lending, doesn't look like NBH has much exposure here. Wondering if you have some high level thoughts as to you know, potential risks and anything else that you might be direct analysts to more carefully watch? Thank you.

Aldis Birkans: Yes. We really don't have any thoughts because we really don't have much of that well below 1%. So of total loans. Maybe that's indicative of our thoughts.

G. Timothy Laney: Yes, but that's the answer. In terms of other sectors that I just think we have to continue to be watching closely in the ag space, it's commodity row crops and the vulnerability there. And it's again a space we have limited exposure to. But I mean cattle operations are probably at some of the best performance levels in history. On the other hand, commodity exposure, that would be tough place to be exposed to. We've talked about it before, but another space that continues to just face tragic headwinds is transportation. And we worked aggressively to reduce the exposure that we were concerned about there.

And think that's a forgive the pun, but a long road back for those truckers. So those would be a couple of areas that you know, we I guess if we were on the investor side, we would be keeping an eye on.

Kelly Molda: Got it. Thank you so much.

G. Timothy Laney: You bet, Kelly. Thanks for the question.

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

G. Timothy Laney: Thank you, Shelly. I'll be brief. Just thank you so much for your time and attention this morning. Please feel free to reach out to us if you have any and we will respond promptly. Have a great day.

Operator: And this concludes today's conference call. If you would like to listen to the telephone replay of this call, it will be available in approximately twenty-four 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.

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