National Bank Holdings Corporation (NYSE:NBHC) Q4 2022 Earnings Call Transcript

Kelly Motta: Got it. Thank you. Also as we look to this year, I know you guys have had your ongoing tech initiatives and to unify initiatives. Just wondering how you prioritize that given — I’m sure you’re busy having just finished the acquisition of two banks, how that fits into kind of your strategic plan in this year and beyond? That would be helpful as well as a two-parter to that question on expenses and kind of the run rate there, how the cadence of cost saves flows through from the deals?

Tim Laney: Yes. Thanks, Kelly. We are on track with the build out to unify. We are benefiting interestingly enough from a lot of the reductions we’ve seen in the kind of core FinTech tech arena. So the availability of talent at better pricing is something that we’re benefiting from. I’m increasingly — and I think Kelly you happen to know some of these people, but I’m increasingly comforted by some of our key partners working with us to build to unify, including Mobiquity , and we believe we’re going to be in a position to be doing some testing with businesses at the end of this year on certain elements to unify. I’ll turn it to Aldis to speak to expense detail. And we say expense detail, obviously I view this as an investment. But Aldis, why don’t you take Kelly through the numbers?

Aldis Birkans: 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 synergy is still to become and realized. But at the same time, we did step up to unify investment in 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 expense as 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.

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

Tim Laney: Thank you, Kelly.

Operator: We’ll go next to Andrew Terrell with Stephens.

Andrew Terrell: Hi. Good morning, Tim. Good morning, Aldis.

Tim Laney: Good morning.

Aldis Birkans: Good morning.