National Bank (US:NBHC)2021-01-22 19:31Financial Data and Key Metrics Changes - The company reported record full-year earnings of $2.85 per share, with tangible book value growing to $23.09 per share [7] - For Q4, earnings per diluted share were $0.87, and the full-year EPS adjusted for banking center consolidation expenses was a record $2.91 [14] - The net interest margin for the quarter was 3.24%, with net interest income of $49.8 million, including $5.2 million from Paycheck Protection Program (PPP) fee recognition [17] Business Line Data and Key Metrics Changes - Q4 loan production was $272.5 million, doubling the production from Q3 and increasing by 1.1% from Q4 2019 [14] - Loans outstanding decreased by $202.4 million, primarily due to successful PPP loan forgiveness efforts [15] - Total non-interest income for the quarter was $33.4 million, a 64% increase from the same quarter last year [20] Market Data and Key Metrics Changes - The company experienced solid deposit growth, with average transaction deposits growing by $172.1 million on a linked-quarter basis, representing a 15.3% annualized growth [16] - The company noted that its markets have generally fared better during the pandemic, with unemployment levels lower than national averages [12] Company Strategy and Development Direction - The company aims to continue its relationship banking model while focusing on building a diverse and granular loan portfolio [7] - Plans for 2021 include further banking center consolidations, with a total reduction of 22% in the banking center network since Q3 2019 [23] - The company is exploring M&A opportunities, focusing on both tactical and transformational acquisitions, as well as investments in the digital space [44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic recovery in their markets, although they remain conservative in their guidance [36] - The company is well-positioned to deliver solid dividends while growing tangible book value and providing attractive total shareholder returns [26] - Management highlighted the importance of maintaining strong capital and liquidity levels to navigate economic uncertainties [26] Other Important Information - The allowance for credit losses (ACL) to total loans, excluding PPP, was 1.43% at year-end [19] - The effective tax rate for 2021 is expected to be around 18%, excluding the FTE adjustment for net interest income [24] Q&A Session Summary Question: Loan growth appetite and segments - Management indicated a return to historical levels of loan production and identified opportunities in logistics real estate and specialized industry groups like quick service restaurants [31][33] Question: Capital and buybacks - Management is open to buybacks, especially if they can engage in M&A, given their strong capital position [37][38] Question: M&A market outlook - Management sees current market opportunities for acquisitions and is also exploring transformational opportunities to improve profitability [44] Question: Mortgage-related expenses - Management noted that mortgage operations have been running efficiently, with a significant portion of expenses attributed to mortgage commissions [49] Question: Seasonal payroll taxes and liquidity trends - Management confirmed no significant increase in expenses due to bonuses and noted that deposits have continued to build positively [60][61]