Good morning, everyone. Welcome to the National Bank Holdings Corporation 2021 second quarter earnings call. My name is Alan. I'll 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. Please go ahead, sir. Thank you, Alan. Good morning, and thanks for joining National Bank Holdings' second quarter 2021 earnings call. I'm joined by our Chief Financial Officer, Aldis Birkans. With a renewed focus on growing market share, we realized annualized loan growth of 8.4% during the quarter. Equally important, we entered the third quarter with a very strong pipeline of new relationships. We're realizing new relationship growth across our personal, business, and commercial banking segments. Credit quality continues to be near pristine, and we operate in markets that have largely recovered from the pandemic. As a result, I believe we are very well-positioned for strong growth during the second half of the year. On that note, Aldis, I'll hand it off to you. All right. Thank you, Tim, good morning, everyone. Thank you for joining our earnings call this quarter. For the second quarter 2021, we reported net earnings of $24.2 million, or $0.77 / diluted share. Our return on average tangible assets was 1.41%, our return on average tangible equity was 13.41%. Also, early in the quarter, we announced a second dividend increase for this calendar year, our quarterly dividend now stands at $0.22 / share. As we discussed during last quarter's earnings call, we are excited about our loan pipelines, our loan production this quarter did not disappoint. The second quarter's loan fundings were $362.1 million, which was our second highest non-PPP loan production quarter in history. As a result, we grew our core loan book during the quarter a solid 8.4% annualized. We continue to be very pleased with the business development efforts of our bankers, and our loan pipelines are building nicely across all of our markets. At this time, we project to grow our non-PPP loan books in the mid to high single digits annualized for the second half of 2021. With regards to the Paycheck Protection Program loans, we had $129.6 million outstanding as of June 30th, 2021. A few extra details on PPP efforts. To date, we have received payments and forgiveness on 99% of the round one PPP loans, and more than a third of the round two loans have also been forgiven. At this pace, we expect most of the remaining PPP loan balances to be off our books by the end of this year. The remaining Paycheck Protection Program loan deferred revenue balance is $5 million, and accordingly, we expect most of this fee to be recognized over the next two quarters. Turning to deposits. This quarter, we continued the strong growth in deposits, with average transaction deposits increasing $347.1 million or 28.9% annualized. The second quarter also marked the first time our total average deposits crossed the $6 billion mark. More importantly, the cost of our total deposits decreased another 4 basis points this quarter, and it has decreased a total of 9 basis points during 2021. The strong deposit growth benefited our average earning asset base, which grew $323.1 million or 20.8% annualized. The resulting fully taxable equivalent net interest margin was 2.82% in the second quarter, and the excess cash we are holding had a 41 basis point dilutive impact on our margin. Given the return of strong loan pipelines, in the coming quarters, we expect to start seeing our earning asset mix shift back from cash to high-yielding loan balances. This quarter's fully taxable equivalent net interest income was $46.1 million and included $2 million of PPP loan fees. Stripping out the PPP loan fees, our linked quarter core net interest income grew $200,000. As our earning asset mix normalizes, we project net interest income to grow in the coming quarters. Our asset quality remains strong with solid reductions in non-performing, criticized, and classified loans from the prior quarter. Net charge-offs for the quarter were just 7 basis points. Our non-performing assets decreased 14% this quarter and are 28% lower than a year ago. Our NPA to total loan ratio, excluding PPP loans, is now down to 0.46%. These excellent credit trends, combined with improving economic forecast projections from Moody's, resulted in a CECL model provision release of $5.9 million this quarter. The resulting ACL to total loans, excluding PPP, was 1.18%. Lastly, as a reminder, in addition to the allowance for credit losses, we continue to benefit from $8.8 million of fair value discounts from prior acquisitions. Total second quarter's non-interest income was $25.3 million. Our client engagement for both consumer spending and business account activity was strong, and we were able to deliver solid growth in our core banking fees. Total service charges grew 10.9% annualized on a linked-quarter basis and 15.3% over the second quarter of 2020. While total bank card revenues grew 53.3% annualized on a linked-quarter basis and 26.3% over the second quarter of last year. The other non-interest income line benefited from a $800,000 gain this quarter from the sale of real estate associated with consolidated banking center consolidations, which compared to $1.5 million of such gains realized during the first quarter of 2021. Looking ahead for the second half of 2021, we are projecting our non-mortgage fee income to be in the $20 million - $21 million range. With regard to the residential mortgage business, the increase in longer-term rates during the first half of the second quarter impacted both mortgage volume as well as gain on sale margins. Mortgage banking income totaled $14 million this quarter, which was an $8.4 million decrease from the first quarter. The gain on sale margin came in from 3.5 points in the first quarter down to the high twos in the second. This compression explained approximately 40% of this quarter's lower mortgage revenues. Having said that, we are encouraged to see some margin recovery, about 3 points so far in July. The other contributing factor for the linked-quarter revenue drop was reduced volumes from refinancing activity. Looking ahead, given the current market conditions, we would project the mortgage-related revenue to be trending in the range of $20 million-$25 million for the second half of 2021. Turning to expenses. Non-interest expense totaled $46.3 million. On the linked-quarter basis, expenses decreased $3.3 million, driven by lower mortgage-related commissions and lower banking center consolidation costs. We've also seen a decrease in our occupancy and equipment expense run rate as the banking center consolidation efforts are starting to materialize on these line items. For the second half of 2021, we are projecting non-interest expense to be in the range of $89 million-$91 million. Finally, our capital ratios remain strong and provide for many options as we consider how to strategically deploy our excess capital in the future. Our tangible book value per share ended the quarter at $24.01 and has grown at 8% annualized for the first half of 2021. Tim, with that, I will turn it back to you. Thanks, Aldis. Look, we like what we're seeing in our markets. Our bankers continue to be well-positioned to take market share. I believe we have the potential to realize record levels of new relationship growth and loan production during the second half of this year. On that note, I'll say thanks. Ask Alan to open up the line for questions. Certainly, sir. If you'd like to ask a question, please signal at this time by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure that your mute function is turned off to allow your signal to reach our equipment. Once again, that is star one if you'd like to ask a question. We'll take our first question from Brett Rabatin with the Hovde Group. Hey, good morning, everyone. Hey, good morning, Brett. Morning. Wanted to first ask, if I heard correctly, the guidance for the mortgage for the back half of the year is $20 million-$25 million. As I was writing down my notes correctly, it sounded like you were feeling a little better about the gain on sale margin in 3Q maybe versus 2Q. Can you just maybe go back over that and just talk maybe about what you're seeing in the pipeline? If I've got this correct, it sounds like you're expecting mortgage to decrease a little more from 2Q levels, despite maybe a little better gain on sale margin. Yeah. You heard it right. $20 million-$25 million. Certainly, you have to take into account the Q4 seasonality there that typically takes place, although last year, fourth quarter and first quarter of this year were unusually profitable quarters for the industry. In terms of the volumes, the big impact that we saw was the refinancing activity that certainly was down on a linked-quarter basis almost by 50%, driven by the higher rate environment. That one, we've not necessarily seen the recovery just yet. While the margins are recovering, the volumes are somewhat steady going on from second quarter into third quarter. Aldis, you may want to speak alternatively to what we've seen in new home financing. Yeah. No, certainly, Tim. The good news for us is, and we've always focused on and why we like the mortgage business for us has been the [interesting] that our bankers spend on the purchase markets. That market, we grew linked quarter, we grew 41% the volume on purchases and 46% over the same quarter last year. We certainly see what the activity our markets are providing and opportunities the markets are providing for our market, the bankers. I think that's the most encouraging point, Brett, is that these markets we operate in continue to be very attractive and grow. The real challenge is, we've discussed before, is simply finding the housing. The demand remains strong. Yeah, that's definitely the case in many markets across the country. The other thing I wanted just to ask was, you guys were a bit unique this quarter with the strong C&I loan growth, and just wanted to maybe dive a little deeper into that and see if that's increased loan utilization, new client adds, existing clients doing more things. What's driving that- Yeah. -loan growth? Great question. The beauty of it is what we're seeing is market share growth. When I talk about all across the board, I guess in the spirit of the Olympic season, I would say whether it was our badminton teams or our weightlifting teams, they're bringing home medals. The reality of it is, I feel like we're close to running on all cylinders in that regard. I fully expect to see strong performance in our small business or business banking group through the remainder of the year. If you look at our combined business banking and commercial banking efforts in the second quarter, as Aldis pointed out, we were just shy of breaking an all-time record in new loan production. Again, we come into the third quarter with pipelines as strong as we've ever seen them. I think that's to be attributed to a lot of focus on really continuing to touch base with both clients and prospects over the course of the last year. As soon as we took our foot off the brake on credit, we started to realize the opportunities that these strong markets bring us. The other thing I would point out is that we've been hyper-focused in the personal banking arena on new relationship growth. I think it would be very easy for a bank to become complacent sitting on all of these deposit balances in the consumer arena and not focus on taking market share. I couldn't be more proud of our team's focus on growing new core relationships in the personal banking space as well. That's one of the reasons Aldis and I believe that we're going to see really nice stickiness as it relates to this liquidity beyond what might be stimulus related. Summarizing all of that, I would say very solid performance across all of our lines of business. Okay. Great. Appreciate all the color. You bet. Thanks for the questions. Okay, the next question we'll take will come from Andrew Liesch with Piper Sandler. There we go. Good morning. Hey. Just kind of sticking with the loan growth theme here. Tim mentioned you think you have record production in the second half of the year. Based on what you just did, that seems reasonable to me. The growth guide for non-PPP is mid to high single digits. What could keep that from being at that high end? Do you think you could even surpass that growth guidance? I think we have a track record of being somewhat conservative in our guidance. Look, I think we've all learned what the unexpected can bring to the table. I believe based on where we're at in the markets we're in, that there should be a reasonably strong expectation that we're performing, I'll just say toward the higher end of that guidance. Yeah. Sorry, Aldis. Obviously, we're going to always strive to beat that. Go ahead, Aldis. Yeah. One just piece of color in terms of what is unknown and the last several quarters we've seen quite elevated pay downs, payoffs. That's part of the maybe a hedge in the guidance. To be clear there, when we talk about pay downs, payoffs, it's not losing relationships. Largely, it's really about an amazing amount of liquidity that resides on our clients' balance sheets. That's why we've been, frankly, so hyper-focused on new market share gain. That's where we're going to see the growth. It's literally all about taking care of existing clients and knowing that their borrowing needs will come back to a greater level. Just as important, being hyper-focused on growing market share. We feel good about where we stand on that front. Got it. That's helpful. Then just looking at where the reserve ratio stands right here. Obviously, it's model-driven. For me, what do you think is the right level for you guys to operate? I know you got the benefit in there from the purchase accounting discount, but where do you see the reserve ratio? What's most appropriate for you guys? Yeah. I don't know what is most appropriate because the macroeconomic environment will dictate that. I can say that the best reference point for us on, for CECL model anyway, was when we entered on day one allowance. We entered 2020 with right around 1% ACL for total loans. That, in my mind, is kind of the reference point where you start with. Certainly, where we go from here will be dictated by the macroeconomic outlook. If we step away from the CECL model, and they're certainly not entirely disconnected, but I'll remind you and the other listeners that beyond our own loan review team stress testing, we do bring in a third party once a year to stress test our loan portfolio at a pretty granular level and look at how that portfolio would perform in the most dire of economic situations. The work coming out of that analysis continues to suggest that the granularity and diversity of our portfolio is extremely beneficial. Having said that, could make the argument for lower than 1%. Having said that, our bias is certainly going to be to hold on to that 1% and frankly, fight for it. Again, recognizing the, I guess, objectivity of CECL, there's always going to be a bit of tension there, I suspect, in that we're going to want to hold on to as much reserve as we can. It's as simple as that. All right, we'll move on to Andrew Terrell with Stephens. Hey, thanks. Good morning. Hey, good morning. Okay, maybe on the margin, really quickly. I think several months ago, we talked about new kind of origination yields in kind of the 4% ballpark. Clearly the production picture's stepped up since then. Just wanted to get a sense of where kind of blended new production yields were coming on the balance sheet today, and then how that compares to what's maybe rolling off the balance sheet. Yeah, great question. Certainly, the second quarter new loan origination volume for the $362 million production was right at 4%. If you look at our NIM table and look at the first line item, originated loans, FTE, certainly there's a benefit of the PPP loan fee acceleration in there. If you strip out PPP loan benefit, our core originated loan yields were 3.85% in fourth quarter of last year, 3.87% first quarter of this year, and 3.88%. Those 4% new origination loan yields certainly seem to be accretive and they're displacing something lower that's rolling off, and it is accretive to rebuilding our originated loan book on accretive basis with the new originations. Keep in mind, that's virtually all a variable loan book. I mean, we're not taking tenured risk to get those rates, which I think is important. Got it. Okay, thanks. Just to make sure I've got the messaging right on kind of liquidity deployment. It sounds like just given where you think growth is shaping up over the next several quarters, the kind of plan for the excess cash on the balance sheet is just to hold it and maybe deploy into the loan book over the next several quarters. Should we expect kind of material securities purchases from here? I don't think you'll see material securities purchases from here. Last quarter, we had some of the backup in the yield curve, if you can see that. Again, it's all highly cash flowing and we able to stuff that and benefit the cash flow or redirect the cash flow into new loan originations if needed. Nothing material that we're looking to add in the securities. Now that loan growth is back on table, do expect some of that cash being absorbed and 10 basis point earning asset being displaced with, as we just talked about, with the 4%, that's a powerful benefit to our net interest income growing in the coming quarters. Very powerful math. Okay. Thanks for that. Just if I can sneak one more in. Apologies if I missed it, but were there any share repurchases made during the quarter? I know there's a $75 million authorization out there. Is it fair to say with the valuation coming in a little bit over the past quarter, you might be a little more opportunistic on the buyback? Yes. To answer the first part of your question, nothing done in the second quarter, but... Okay. Great. I'll step back. Thank you. You bet. Thank you. All right. Your next question will come from the line of Kelly Motta with KBW. Thank you. Hi, Tim and Aldis. Good morning. Thanks for the question. I wanted to circle back on loan growth and the market share gains. I was just wondering if there's any pattern to where you're getting those gains, if it's the Front Range or maybe your newer Utah-based expansion, or if it's more broad based than that. Just any color around that would be helpful. It really is broad-based. We feel very good about the momentum we're seeing in all of our geographic markets and our specialty businesses. Felt good about the second quarter and feel very good about what we're seeing in the pipeline across the board. I'll remind everyone, these are pretty incredible markets we operate in, whether you're talking about the Front Range of Colorado, Dallas, Austin, Salt Lake City, Kansas City. We clearly benefit from operating in markets that have recovered much faster than a lot of the rest of the country. Then our specialty businesses and teams there have really done a stellar job of stepping up and delivering new relationships to the bank. I'm really pleased, Kelly, to report that it's diversified and across the board. Great. No, you certainly have great markets. Just switching back to expenses. It seems like the guidance, and please correct me if I'm wrong, but it's more inclined towards the low end of what was last quarter. Is that just related to mortgage and coming in a bit this quarter? It's really nice to see the benefits of the branch plan pull through, wondering if there's any kind of changes in better or minus of your expense run rate. Thank you. Yeah. No, you got the two main drivers will be the banking center and efficiency gaining there that's taking now a hold and certainly lowering our run rate, as well as some of the mortgage commissions. Again, talking specifically to the fourth quarter, we do expect some seasonal slowdown there. That will benefit. Those are two main ones. I'll say that we are taking some of the savings that we are realizing. By the way, if you looked at, stripped out the commission-related expenses from last year and this year's full year guidance, we are guiding about $8 million in lower core run rate for full year this year than last year. That is the result of all of the cost efficiencies that we've implemented. We are taking some of the efficiencies and redeploying those into technology to make sure that we're staying up there and that's embedded in the guidance. That $89 million-$91 million guidance is reflecting all of that. Kelly, what's even more inspiring is that while we're realizing those savings from the brick-and-mortar consolidations, the teams have done, continue to do an incredible job of retaining the clients in those consolidated locations. It somewhat ties to Aldis's point on the investment in technology. This trend we're seeing in the industry of converting more and more clients to a digital platform and doing so successfully is really encouraging. We'll continue to look at our strategy around the mix of brick-and-mortar and digital. By the way, I think it's an appropriate time to share with this audience that investors and others should expect to see an even greater commitment to our digital offerings and ecosystems around the small and medium-sized business space. More to come on that front. We're very excited about where we think we can take this company and provide alternatives to call it a traditional banking system for small and medium-sized businesses here as we look ahead. Again, what's really, I think, critical around your expense question on brick-and-mortar saves is the fact that we're retaining the revenue while accomplishing that. Great. Well, thank you so much, both of you, for all the color. I will step back now. Thank you, Kelly. Thanks, Kelly. All right. Our next question will be from Levi Posen with D.A. Davidson Companies. Good morning, Tim. Good morning, Aldis. I think it was hinted to maybe a little bit earlier, but I was wondering what the timing this quarter of the securities that you did add when those maybe came on? Yeah. Actually, this was pretty even purchased throughout the quarter, with a little heavier lift in April and May than June, for example. A little earlier when the rates really backed up in the early part of the quarter, we did take add on some securities. Okay. Is it fair to say that movement in the yield curve, positive movement of it as it works into your margin calculations would potentially increase your appetite to deploy into both loans and securities? We certainly would love to deploy all of it in the loans. The securities, again, I think where we are $1.3 billion right now, long-term target for us is about 15% of earning assets being in securities. We certainly have about, if you took out today's earning assets, we are about $300 million over that. That's where I'm saying I'm not necessarily seeing us increasing that portfolio much more from here. Okay, great. Just one last one for me on the capital and the M&A side of things. Now that you've returned to growth and it seems the confidence in the economic environment is back, any updated thoughts on, I think a couple of quarters ago, you mentioned there were sort of three types of M&A transactions you guys were considering. Are all three of those still on the table, or has that been narrowed down at all? It's an important question. We'll continue to be opportunistic around traditional banking. I will tell you that we've actually looked at a number of opportunities and on an exclusive basis, and frankly, have not felt like ultimately they were the right fit for our company for one reason or another. Where we are hyper-focused is on creating an alternative ecosystem for medium and small business. We think there are a lot of problems for small businesses and medium-sized businesses that can be solved using some of the emerging technology that we see out there today. And we believe we understand small and medium-sized businesses as well as any bank in the country, regardless of their size, just given our background and focus as a team. We are very focused on looking at bringing together and working to bring together some very interesting alternatives to traditional banking in that space. More to come, but I will tell you in the spirit of full transparency, that that's where we are spending a lot of our time and energy, and hope to be coming back to you soon with more information on that front. Understood. Thank you. I'll step back. Thank you for that. Thank you. I am showing we have no further questions at this time. I'll now turn the call back to Mr. Laney for his closing remarks. All right. Thank you, Alan. I want to first thank all of the individuals that asked questions today for your thoughtful questions and time. Thank you all for joining our second quarter earnings call, and we look forward to reporting before we know it on what we think will be a strong third. Again, thanks everyone. Have a good day. This will conclude today's conference call. If you'd like to listen to the telephone replay of this call, it will be available in approximately four hours and will run through August 1st, 2021 by dialing 888-203-1112, and referencing the passcode 84.