National Bank Q2 2025 Earnings Call Transcript

Key Takeaways

  • Positive Sentiment: We delivered $0.88 EPS in Q2 with a 3.95% net interest margin, driving a 14.2% return on tangible equity and 1.5% return on assets.
  • Positive Sentiment: Our teams funded $323 million of loans in the quarter and project mid-single-digit loan growth in the second half as pipelines strengthen.
  • Positive Sentiment: We proactively reduced exposure in higher-risk industries (trucking, agricultural and CRE) while nonperforming loans fell to $33.3 million (0.45% of loans) with annualized net charge-offs at just 5 bps.
  • Positive Sentiment: A bank-wide expense reduction plan cut core personnel costs by 10%, lowering second-half noninterest expense guidance to the $126–128 million range.
  • Neutral Sentiment: We launched release one of Unify on iOS (Android pending), earning positive user feedback though revenue impact remains to be seen.
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Earnings Conference Call
National Bank Q2 2025
00:00 / 00:00

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Operator

Good morning, everyone, and welcome to the National Bank Holdings Corporation twenty twenty five Second Quarter Earnings Call. My name is Rachel, and I will be your conference operator for today. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded for replay purposes. We will begin today's call with prepared remarks followed by a question and answer session.

Operator

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.

Operator

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.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

Thanks, Rachel. Good morning, and thank you for joining us as we discuss National Bank Holdings second quarter results. I'm joined by our President, Aldis Berkhanz as well as our Chief Financial Officer, Nicole Van Denneville. We delivered earnings of $0.88 during the second quarter with a 14.2 return on tangible equity and a 1.5% return on assets. We delivered a strong net interest margin of 3.95% resulting from deposit and loan pricing discipline.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

During the quarter, our teams produced $323,000,000 of loan fundings while also remaining focused on reducing exposure within certain higher risk industries, which Nicole and Aldis will speak to later. We believe these actions will result in more responsible profits in the future. During the quarter, we also took action to reduce our core bank annualized personnel expense run rate by a full 10%. Finally, we are pleased to share that we successfully launched release one of two Unify in the Apple App Store and expect to go live on Android July 30. Activity has been solid, particularly in light of the fact that we have not even launched our marketing campaigns.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

Further, user feedback has been quite positive. And on that note, I'll turn the call over to Nicole. Nicole?

Nicole Van Denabeele
EVP & CFO at NBH Bank

Thank you, Tim, and good morning. During today's call, I will cover the financial results for the second quarter as well as touch on our guidance for the rest of the year, which does not include any future interest rate policy changes by the Fed. For the second quarter, we reported net income of $34,000,000 or $0.88 of earnings per diluted share. This resulted in a strong return on average tangible assets of 1.5% and return on average tangible common equity of 14.2%. We grew our fully taxable equivalent pre provision net revenue by 19.9% over the second quarter last year, maintained a strong net interest margin and built additional excess capital.

Nicole Van Denabeele
EVP & CFO at NBH Bank

As Tim shared, our teams generated $323,000,000 of loan fundings during the second quarter. Elevated loan paydowns coupled with strategic portfolio reductions within targeted industries led to a decline in loan balances during the quarter. Our bankers remain committed to growing client relationships. We continue to build our pipelines and are projecting annualized mid single digit loan growth for the second half of the year. Fully taxable equivalent net interest margin expanded two basis points during the quarter to 3.95%.

Nicole Van Denabeele
EVP & CFO at NBH Bank

Fully taxable equivalent net interest income increased $700,000 during the quarter to $889,300,000.0 and grew by 4.7% compared to the second quarter of last year. The year over year increase in net interest income is a direct result of our disciplined loan and deposit pricing over the last twelve months, which has resulted in solid margin expansion. Second quarter's new loan originations came on at a weighted average yield of 7.4%. For the remainder of 2025, we project fully taxable equivalent net interest margin to remain in the mid 3.9. And as I mentioned earlier, this does not incorporate any future interest rate decisions by the Fed.

Nicole Van Denabeele
EVP & CFO at NBH Bank

Turning to deposits. Seasonal tax outflows resulted in a decline in average deposit balances of $58,800,000 during the quarter. Cost of deposits totaled 2.05%, and our total cost of funds was 2.09%. Turning to credit quality. Nonperforming loans decreased during the quarter to $33,300,000 Our nonperforming loan ratio remains below peer averages at 45 basis points of total loans.

Nicole Van Denabeele
EVP & CFO at NBH Bank

Annualized net charge offs for the quarter were just five basis points. The allowance to total loans ratio remained consistent at 1.2%. Additionally, we continue to hold $20,000,000 of marks against our acquired loan portfolio, which adds an additional 26 basis points of loan loss coverage if applied across the entire loan portfolio. Noninterest income for the second quarter totaled $17,100,000 11% higher than the first quarter and 22% higher than the second quarter of last year. For the second half of twenty twenty five, we project our total noninterest income to be in the range of $34,000,000 to $36,000,000 Noninterest expense totaled $62,900,000 a $900,000 increase over the first quarter as a result of $1,900,000 of payroll tax credits, which lowered the first quarter's expenses.

Nicole Van Denabeele
EVP & CFO at NBH Bank

Excluding the payroll tax credits benefiting the first quarter, noninterest expense decreased $1,000,000 on a linked quarter basis as a direct result of intentional efforts to lower our operating expenses. In light of the ongoing economic uncertainty, we took action during the second quarter and executed on an expense reduction plan. We incurred nominal restructuring expenses during the quarter and estimate the actions taken at the end of the second quarter will reduce our annual core bank personnel expense by approximately $15,000,000 As a result, we are lowering our projection for noninterest expense. We now project our noninterest expense for the second half of the year to be in the range of $126,000,000 to $128,000,000 As you have heard, we are pleased to have launched UNIFY last week. As a reminder, we are preparing to provide two UNIFY revenue guidance with 2025 end results.

Nicole Van Denabeele
EVP & CFO at NBH Bank

For the second quarter, 2Unify expenses totaled $4,600,000 We project 2Unify expense for the second half of the year to be in the range of 16,000,000 to $17,000,000 increasing primarily as a result of amortization expense on the capitalized development asset now that Two Unify is live. With the expense reduction actions taken in the second quarter, we project to continue to grow quarterly pre provision net revenue even with the increase in the two unified expense expected in the second half of twenty twenty five. We maintained strong levels of liquidity and continue to build excess capital. We ended the quarter with a strong TCE ratio of 10.5%, Tier one leverage ratio of 11.2% and a common equity Tier one ratio of 14.2. Year to date, our tangible book value grew by 10.7% annualized to $26.64 With that, I will turn the call over to Aldis.

Aldis Birkans
Aldis Birkans
President at National Bank Holdings Corporation

All right. Well, thank you, Nicole, and good morning. As Tim and Nicole already mentioned, loan production activity started picking up in the second quarter with healthy loan fundings of $323,000,000 which was an increase of 26% over the first quarter's slower start. And while we still see some clients being somewhat cautious in this economic environment, our loan pipelines for the second half of year are building nicely. We entered the third quarter with good level of energy and optimism.

Aldis Birkans
Aldis Birkans
President at National Bank Holdings Corporation

As always, we have not and will not compromise on credit. Our bankers focus on full relationship banking and do not chase deals just to show growth. I think the best evidence of this is our loan pricing discipline with new loan rates coming on at a strong 7.4%. Our loan and deposit pricing discipline during the quarter allowed us to expand our net interest margin by two basis points to 3.95%. In terms of the overall loan portfolio, the decrease this quarter was primarily driven by declines in certain higher risk asset classes.

Aldis Birkans
Aldis Birkans
President at National Bank Holdings Corporation

For a while, we have expressed concerns with the trucking industry. Been a while since we have originated loans in this space. And this quarter, we saw an opportunity to decrease our trucking portfolio exposure, which now sits at just about $100,000,000 or just 1.5% of the total portfolio. Additionally, we decreased our exposures within the agricultural and within the commercial real estate sectors. In aggregate, these three asset classes ended up driving the portfolio decline this quarter.

Aldis Birkans
Aldis Birkans
President at National Bank Holdings Corporation

We continue to see solid credit metrics with just five basis points in annualized net charge offs and NPAs continuing to research recent downward trend with another $1,600,000 decrease this quarter. The NPA ratio ended the quarter one basis point better than the first quarter at 0.45%. This quarter, we also saw a nice result in our fee income on both linked quarter basis and as compared to the prior year's second quarter. And while this quarter was held by $1,300,000 gain on the disposition of consolidated banking center buildings, we did see seasonal rebound in our bank card income as well as an increase in SBA gain on sale income. As loan volumes continue to pick up for the second half of the year, we project higher fee income related to SBA gain on sale as well as derivative fees. Then with that, I'll turn it back to you.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

Thank you, Aldis. Well, we had an active second quarter. We generated $323,000,000 in new loan production. We successfully reduced loan exposure in targeted industries with higher risk profiles.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

We maintained pricing discipline resulting in a 3.95% net interest margin. We took action to reduce our core bank's annualized personnel expense run rate by 10%. We successfully launched Release one of two Unify, and we grew our tangible book value to twenty six dollars and sixty four cents per share. On that note, Rachel, let's open up the call for questions.

Operator

Thank you. A. Davidson.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

On

Jeff Rulis
MD & Senior Research Analyst at D.A. Davidson Companies

the loan side, again, it sounds fairly cautious. Just want to kind of check-in on the amount of those higher risk trucking ads, CRE. Is that I mean, given the guide of resuming towards the mid single digit pace, it sounds like the bulk of that is what you wanted to clean up is kind of done. I guess that's question one. And then two, just wanted to see if there's any management of growth tied to kind of the 10,000,000,000 asset mark, if that's if that's still an area that that may be keeping growth levels somewhat subdued? Thanks.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

Yeah. I I'll I'll answer both together if that's alright, Jeff, because I to to begin with a latter question, I I would tell you that there's been no management at this point to stay under the $10,000,000,000 threshold. Again, we've been operating for years as so and and we were regulated as though we were a 10 bank. So that expense has been embedded in our run rate for years. No issue there.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

We've outlined what Durbin would be, which is in the grand scheme of things nominal. This this this growth matter is going to be reconciled in the second half of this year because to answer your question, we've largely taken action against the bulk of the relationships and loans that we felt we need to. Now are are there others we're watching closely and and would would with the right opportunity to take them down? Abs absolutely. But, you know, I'll also remind you that we operate well under all regulatory limits house with our own house limits, and none of these areas we've talked about had even approached our house limits.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

This was just really an act of caution and being proactive. And as I've said in my prepared remarks, I really believe it's the kind of action you have to take that translates into more productive results down the road. I'll I'll add to that in terms of the second the the Optimus month, second half growth. Pipeline is strong, as

Aldis Birkans
Aldis Birkans
President at National Bank Holdings Corporation

I mentioned, and I would actually characterize it probably the strongest we've seen in the last twelve months as we enter the third quarter. So there is, there is activity and a pipeline to grow our guidance mid single digit for second half. Subject to what Tim mentioned, if there's other opportunities, we'll certainly jump on those.

Jeff Rulis
MD & Senior Research Analyst at D.A. Davidson Companies

Okay. Appreciate it. If I questions,

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

Jeff? Questions, Jeff?

Jeff Rulis
MD & Senior Research Analyst at D.A. Davidson Companies

Yeah. No. That was that was great. I appreciate the that was pretty detailed. So thank you.

Jeff Rulis
MD & Senior Research Analyst at D.A. Davidson Companies

And if I hop to the to the margin, you know, got the steady sort of guidance from here. I I you know, from our prior discussions of of sounded like you had some pretty good opportunities. And and based on those new loan yields, some pretty good reinvestment not only in loans but on securities, and that was pretty positive. I guess if I could just sort of frame up an environment that you see maybe margin expansion, what would have to occur to kinda see it sort of break more towards 4% than than steady?

Aldis Birkans
Aldis Birkans
President at National Bank Holdings Corporation

Well, first, I'll tell you that we are very proud of three ninety five margin. I think that puts us in a very good company in terms of our peer banks. But in terms of this outlook, I think what would really have to to to to move forward, what would really move our margin in positive way is is really DDA growth. At the end of the day, that's math of math. It's bringing in zero costing deposits and and lending it out at 7.4%.

Aldis Birkans
Aldis Birkans
President at National Bank Holdings Corporation

It's obviously extremely margin accretive. So I think the deposit mix will will drive the output for the margin.

Jeff Rulis
MD & Senior Research Analyst at D.A. Davidson Companies

Okay. Great. I'll I'll step back. Thank you.

Brett Rabatin
Director - Research at Hovde Group

Thanks, Jeff.

Operator

Thank you. We will take our next question from Kelly Moto with KBW.

Charlie Driscoll
Equity Research Analyst at Keefe, Bruyette & Woods (KBW)

Hi. This is Charlie on for Kelly. Good morning.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

Hello, Charlie.

Charlie Driscoll
Equity Research Analyst at Keefe, Bruyette & Woods (KBW)

It's exciting to see the TUnify launch this month on the platform and the partnership with NAV. Can you speak about how launch went and how the market is receiving TUnify and provide some color on the partnership and how it came about and what benefits you think it can bring to the platform?

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

Yeah. I would I would compare our launch to the soft opening of a restaurant. We we had done prior friends and family tested and testing in a in a lockdown environment. So now to be in a position where anyone can access the app and begin the process, what you'll find is you get to the point to sign up unless you're a small business or medium sized business and have an EIM, it's gonna be you know, you won't be able to go too far. But what I would tell you is that all of our security and fraud detection systems have worked beautifully.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

We've certainly seen as what happens with any financial app, all of the attempts to penetrate there. And we're really proud of the walls that have been built here to protect both the bank and our future clients to Unify. The feedback has been very positive in terms of how familiar the user interface is. It's intuitive. You know, we we take no shame in saying that, you know, we were inspired by companies like Apple who we think over the years have developed a very intuitive way of of doing business in the digital world.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

And and look, we'll be getting our advertising here in the near future. You'll see more on our landing pages to begin to tell the story. And and candidly, there's a big element there that's going to be coming soon because as we had told the market, it was starting with a fundamental simple product that's absolutely incredible for a small business owner, which is a depository suite product that allows these interest owners to access attractive interest rates on their deposits while maintaining their operating accounts with to you. But that's just the beginning. I mean, the beginning, as we've said before, is building this full ecosystem where you're essentially, as a small business owner, able to do one stop shopping anywhere in The United States for your business needs.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

We'll be working with both private credit and other banks to offer alternatives on credit. First out of the shoot there, you're going to see an SBA offering, that will be introduced. We're also working with a merchant payments company on a fairly creative approach to helping small businesses realize the the lowest possible rate on their merchant transactions here in The United States, and we think that can be a huge driver. Ultimately, I will tell you that I think given the data lakes we've built, we've invested millions and millions of dollars in information management that to Unify is going to be more of an information company than a bank. You know, we built it not to be reliant on, with all due respect, the big the big core suppliers like FIS and Fiserv were more nimble.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

We have more control of our clients' information that allows us to give more information back to our clients. And it also certainly helps us as we look at how we'll be able to manage risk by having all of that information contained. And and then finally, I would tell you that we ultimately see this as being a membership fee based business. You know, if if if a business owner wants to transact and work within the the to Unify ecosystem, they're gonna pay a monthly membership fee no different than than what you would see or what you would pay today with an Amazon for your Amazon Prime membership. So that's maybe, Charlie, even more color than you were looking looking for, but I hope that helps.

Charlie Driscoll
Equity Research Analyst at Keefe, Bruyette & Woods (KBW)

That's great. And just to clarify, this is mainly coming through fee income, or do you expect this to be sort of like a balance sheet play? Are you aiming to get, like, loans and deposits?

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

It's it's a great question. We're not focused on this as a big balance sheet play. We really aren't. I mean, again, think about on the credit front, we may be a partner in originating loans, but the reality is what we want to do is make it easy for a plethora of United States banks, mostly community banks, to access lending opportunities to small and medium sized business. And for that, we would collect a fee or a scrape.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

The deposits, we're able to think about how we leverage Camber to take those deposits and then sweep them as broker deposits to other financial institutions. And and so, again, not a heavy balance sheet play. High ROE, big on information and membership fees.

Charlie Driscoll
Equity Research Analyst at Keefe, Bruyette & Woods (KBW)

That's great. Thank you.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

Thanks, Charlie.

Charlie Driscoll
Equity Research Analyst at Keefe, Bruyette & Woods (KBW)

And then last one, just switching gears. The m and a environment has seen a little bit of a pickup. Just wondering if you're seeing the pace of conversations pick up and if you could remind us like what you're looking for in a partner size wise and other characteristics?

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

We're very consistent. You know, we start with culture and strategy. We only consider institutions that are in strong growth markets. And we've got to be in a position where when we announce the transaction for the sake of both parties, the market reacts positively. And so that that certainly means we have strong earnings accretion expectations.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

We have a real focus on how quickly we can earn back any tangible book dilution, and and we'll not stray from those criteria. As to specifics. So I'm gonna simply say I can't comment right now.

Charlie Driscoll
Equity Research Analyst at Keefe, Bruyette & Woods (KBW)

Okay. Great. Thank you. I'll step back.

Operator

Thank you. We will take our next question from Andrew Terrell with Stephens.

Andrew Terrell
Managing Director at Stephens Inc

I wanted to ask on just deposits this quarter, down sequentially in the period, kind of in line with the decline in loans we saw. I'm just curious, was any of the deposit decline this quarter reflective of or tied to the derisking that's gone on in the loan portfolio? Or just any color you can provide on the 2Q deposit flows and then kind of tying that into, it sounds like loan growth expectations in the back half of the year for an improvement. Would you expect core funding to increase sequentially?

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

Andrew, I'm going begin and quickly hand this off to all of us, but you nailed it. Yes. I mean, obviously, we're moving entire relationships when we move credit exposure, and and, you know, that that's largely the matter.

Aldis Birkans
Aldis Birkans
President at National Bank Holdings Corporation

And then, all of sudden, I'll throw it to you. You answered the question. So yes, that's For more detail. We've always talked to the auto relationship bank model and both sides of the balance sheet do tend to move in tandem. One thing that we haven't done is is go out and buy expensive deposits just to show, again, growth. But as evidenced, really, if you look at our deposit beta this this last cycle, it's about 3030%. So that shows through the cost of funds.

Aldis Birkans
Aldis Birkans
President at National Bank Holdings Corporation

But to kinda come back, the pipeline is there. Trading management opportunities are there as we look in the the second half of half half second half of the year through relationship opportunities that we are looking to take market share and and we look to grow the deposits in second half as well.

Andrew Terrell
Managing Director at Stephens Inc

Understood. Thank you. I appreciate it. If I could ask just on on on the expense side, I don't know if you're able to, but could you share any more color kind of around the expense reduction that happened during the second quarter? Specifically, that sounds like compensation costs coming down.

Andrew Terrell
Managing Director at Stephens Inc

I'm wondering if that's focused on any specific avenues within the bank or just, you know, more broad based.

Nicole Van Denabeele
EVP & CFO at NBH Bank

Good morning, Andrew. I'll be happy to take that one, touch on our expense reduction plan that we wrapped up in June. I will start by saying we do not take these decisions lightly. But in light of the economic uncertainty, we knew it was proactive to be we knew it was prudent to be proactive in this area. It was a bank wide effort.

Nicole Van Denabeele
EVP & CFO at NBH Bank

And then as a result of the actions that we took, we did eliminate positions across our organization, and we had a heavy focus on streamlining our processes and implementing automation.

Andrew Terrell
Managing Director at Stephens Inc

Okay. Thanks for calling, Nicole. I'll step back. Thanks.

Aldis Birkans
Aldis Birkans
President at National Bank Holdings Corporation

Thank you.

Operator

Thank you. We will take our next question from Brett Rabatin with Hussie Group.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

Great. Morning.

Brett Rabatin
Director - Research at Hovde Group

Hey. Good morning, everybody.

Brett Rabatin
Director - Research at Hovde Group

Wanted to just wanted to stick with expenses for a second and just make sure on the guidance for the 126 to a 128 for the back half of the year, that's that is that you you know, when I think about the math, that's inclusive of two unified 16 to 17,000,000, or is that on top of the 126 to a 128?

Nicole Van Denabeele
EVP & CFO at NBH Bank

You're you're right. It is inclusive of the two unified 16 to 17,000,000 guide.

Brett Rabatin
Director - Research at Hovde Group

Okay. And and then so

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

it sounds like you guys did a really good job,

Brett Rabatin
Director - Research at Hovde Group

you know, with with finding some expenses to pull out with without, you know, impacting the need for a restructuring charge. And you have I didn't quite catch the color on the detail other than you, you know, took some actions. Would that would any of that be contract for things like that? Because it doesn't seem like it was, you know, a personnel related change.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

No. I mean, it it was a hard reduction in our personnel count. And it was really, while we talk about executing in the second quarter to give the team's credit, this is work we've been building to for some time. And literally, looking at opportunities where you would have natural retirement and attrition, etcetera, to really achieve these. That's in large part why and how we were able to keep our expenses down in the process.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

I think, Nicole, they, you know, literally came in under $400,000 in total related expense. Is that right?

Nicole Van Denabeele
EVP & CFO at NBH Bank

Right. It's about 300,000.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

Yeah. Actually, 3. And and I I, you know, I we will continue to lean into opportunities to leverage emerging tools to bring down our core operational expense run rates.

Aldis Birkans
Aldis Birkans
President at National Bank Holdings Corporation

And then I'll just add what we sorry. If I could. We No. Go ahead. Sorry.

Aldis Birkans
Aldis Birkans
President at National Bank Holdings Corporation

Paul touched on is is operational efficiency automation. So what what makes us excited about this of of of kind of efficiencies is also that it's gonna be we'll be able to leverage that as we grow the company. Our expense run rate is not gonna have to pace that growth.

Brett Rabatin
Director - Research at Hovde Group

Okay. That's that's probably helpful. And then, you know, Tim, in the past, know, just back on the the loans, you know, it sounds like this quarter was was almost entirely related to, you know, reducing some risk risk exposure. But in the past, you've kind of indicated that maybe some banks or nonbank competitors were being too aggressive with with rate or or terms. And so I just just wanted to hear what you guys were seeing in terms of the the environment competitively and if that, you know, was any any factor in the second quarter.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

Yeah. Look look, I I'm I'm gonna simply say, and I I was reviewing this with our head of portfolio management last week. Our hit rate on term rate on term offerings right now is lower than our historical rate. I mean, we're we're coming in around 27 to 30% right now. Typically, by the time we get to putting a term sheet on the table, we're seeing a much higher hit rate.

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

And what we're not going to do is renegotiate on credit risk structure or pricing. And, you know, so that requires time and patience. And and I'll answer your question that way versus talking about competition.

Brett Rabatin
Director - Research at Hovde Group

Okay. That that's helpful. Thanks for the color, Tim.

Charlie Driscoll
Equity Research Analyst at Keefe, Bruyette & Woods (KBW)

You bet. You bet.

Operator

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

Timothy Laney
Timothy Laney
Chairman & CEO at National Bank

Thank you, Rachel, and and thank you for joining us today. We appreciate your time and attention. If you have follow on questions, do not hesitate to reach out to us, and we wish you a good 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.

Executives
    • Timothy Laney
      Timothy Laney
      Chairman & CEO
    • Aldis Birkans
      Aldis Birkans
      President
Analysts
    • Nicole Van Denabeele
      EVP & CFO at NBH Bank
    • Jeff Rulis
      MD & Senior Research Analyst at D.A. Davidson Companies
    • Brett Rabatin
      Director - Research at Hovde Group
    • Charlie Driscoll
      Equity Research Analyst at Keefe, Bruyette & Woods (KBW)
    • Andrew Terrell
      Managing Director at Stephens Inc