Q3 2021 Heartland Financial USA Inc Earnings Call
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$263 million across our portfolios, excluding PPP and increase of 3% from the linked quarter exceeding our guidance for the quarter of $220 million.
We saw continued strength across our commercial loan portfolios with the exception of construction all categories showed growth during the quarter.
From the linked.
Quarter.
Commercial and industrial increased $19 million or 1%.
Owner occupied real estate increased 195 million or 10%.
Non owner occupied real estate increased $33 million or 2%.
Our AG portfolio increased $5 million or 1%.
Construction decreased $40 million or 5%.
We added 226, new commercial relationships during the quarter.
Representing $116 million in funded loans and $16 million of new deposits.
We're focused on executing our talent acquisition strategy.
In California, we added in Agra finance team of 22 people.
As an excellent team that includes relationship managers.
I assure you management officers and credit professionals and strategically adds to our growing agribusiness in the central Valley of California.
The strength of our agribusiness group complements our other H T O F specialized industries teams that have expertise in health care specialty manufacturing and distribution food and beverage and professional services.
We're also extending our reach in several high growth markets in the Midwest.
We've opened offices in St. Paul des Moines, and Cedar Rapids, and are scheduled to open two offices in the western suburbs of Chicago This quarter.
We have added 13 commercial bankers at these locations.
Our commercial pipeline is 16% higher from the end of the second quarter.
We expect to grow commercial loans in excess of $200 million in the fourth quarter.
I'm traveling regularly and meeting with our clients and bankers, it's exciting to see firsthand our clients' creativity.
Resilience and optimism.
Headwinds remain.
And clients are managing challenges from supply chain disruptions workforce shortages and wage pressures and inflation.
We're very pleased with the pace of PPP forgiveness with PPP won loans, 99% of customers and dollars have already completed the forgiveness process.
As PPP two borrowers become eligible to apply for forgiveness, we are seeing a steady pace of activity.
We also had strong growth.
In our core consumer based loan portfolios, which encompasses both both.
Both consumer and residential mortgage loans.
Increasing by $50 million from the linked quarter and greatly exceeding our forecast of $20 million.
We expect continued growth, albeit at a slightly slower pace than forecast $20 million of growth in core consumer base loans in the fourth quarter.
Turning to deposits.
Non time deposits totaled $15 billion at quarter end.
An increase of 465 million or three 2% during the quarter.
Demand deposits increased.
238 million or 4% to $6 5 billion.
Savings deposits increased $227 million or 3% to $8 4 billion.
We saw a total deposit growth for the 10th consecutive quarter.
Total deposits were a record 16 billion, an increase of $407 million from the linked quarter.
And a $3 3 billion or 25% from a year ago.
Our already exceptional deposit mix improved even further.
41% of deposits are in noninterest bearing accounts and 93% in non time account balances.
Our deposit pricing strategy continues to serve us well.
Total deposit costs remained low at eight basis points, a decrease from 16 basis points one year ago.
Helping us weather continued pressure on our margins.
Turning to key credit metrics, Nathan Jones, our Chief Credit Officer, and his team use a disciplined credit approach that has delivered strong credit quality across our portfolios.
Nonperforming loans decreased to $1 million from the linked quarter and represented 84 basis points of total loans.
Nonperforming assets as a percentage of total assets decreased to 46 basis points from 50 basis points in the linked quarter.
Other real estate decreased to $4 7 million from $6 $3 million in the linked quarter.
Delinquency ratio decreased to 12 basis points from 17 basis points in the linked quarter.
Non pass rated loans decreased to nine 2%.
A decrease of one 2% for.
For the quarter.
Lastly, in the third quarter, we reported a net recovery on charged off loans of $1 3 million or minus five basis points of average loans.
We are strategically investing for growth through our talent acquisition strategy, we have expanded and strengthened our commercial teams, we are providing them with best in class technology.
While we continue to engineer processes for speed and scale.
We're also establishing a 15.
<unk> per hour minimum wage for all employees beginning November one.
We actively listen to our customers through our bankers and structured research.
In partnership with Greenwich, We conduct commercial customer experience research to identify opportunities to satisfy emerging needs through this dialogue, we collect market intelligence to inform our strategies and investments.
We are on track to deliver more service enhancements and digital function functionality that will enrich the customer experience.
We're expanding our document management capabilities to reduce administrative burden for our customers and bankers.
We're adding more convenience features like online appointment scheduling and live chat.
We are partnering with Temenos.
For robust consumer online account opening loan origination and digital Onboarding.
And we're excited about offering custom digital experiences in the future through our customer portal that's.
That's currently in development.
These enhancements enable us to continue to optimize our branch network.
Since 2019, we have closed or announced plans to close 23 branches or 16% of our network.
Importantly, we've retained 95% of the deposits from these locations.
We continue to look closely at our footprint and expect a further reduction of 7% in the network.
<unk> is in the process of finalizing an evaluation of consolidating our separate bank charters into a single charter to drive efficiency improve agility reduce expenses and enhance scalability.
We are well positioned to consolidate our bank charters.
We already successfully operate a well integrated shared services model and consolidating charters will yield additional benefits, including driving efficiency and reducing redundancies.
Realizing significant expense savings.
Focusing existing resources, where they add the most value.
Simplify.
And financial reporting.
Adding greater capacity to better serve our customers.
Two key tenants of our evaluation, our first our banks will maintain their brand identities and retain local decision, making local leadership and local boards.
Second <unk> will maintain its strong and sizable presence in Dubuque, Iowa.
Currently <unk>.
Currently <unk> operational and administrative functions will continue to be largely staffed and run from Dubuque.
When completed we expect to achieve annualized revenue opportunities and expense reductions totaling three two.
5% of our current cost base.
While other institutions may have achieved greater savings and their charter consolidation initiatives are savings may be somewhat lower as we already operate a well integrated and mature shared services model.
We expect to communicate more details when the evaluation is complete later in the fourth quarter.
Lastly, I want to acknowledge our employees I am proud of how they continue to adjust adapt and advance.
I'm grateful for their hard work and dedication.
It has strengthened our company.
And delivered strength insight and growth to our customers communities and shareholders.
Together, we are <unk>.
I will now turn the call over to Bryan Mckeag, <unk>, Chief Financial Officer for more details on our performance and financials.
Thanks, Bruce and good afternoon.
I'll begin today by referencing our earnings release, which details another solid quarter for <unk>.
With earnings per share reported at $1 27.
Loan growth of $263 million, excluding PPP loan forgiveness.
Proved credit metrics and continued deposit growth.
Before I go into my comments I would remind you that you can find additional information on the quarter in the third quarter Investor presentation, which is available in the IR section of <unk> website.
So I'll start my comments with the provision for credit losses, which was a $4 5 million benefit this quarter and primarily driven by improved underlying credit metrics highlighted by loan upgrades exceeding downgrades the $2 million decrease in nonperforming loans.
A record low level of loan delinquencies and $1 3 million and net recoveries on previously charged off loans.
The economic outlook.
Outlook factors used to develop the all the allowance were largely unchanged from last quarter and still retain a measured level of caution and uncertainty that management deems appropriate for lingering economic headwinds that are yet to be resolved.
At quarter end, the total allowance for lending related credit losses, which includes both the allowance for credit losses on loans and unfunded commitments stood at $131 5 million or $1, 33% of total loans.
When the PPP loan balances are excluded the total allowance stands at 139% compared to 1.47% at June 32021.
At quarter end.
Unamortized purchased loan valuations on our balance sheet totaled $21 5 million or 23 basis points of total loans excluding PPP.
Moving to the rest of the balance sheet investments grew $912 million this quarter and comprised just over 40% of assets.
With a tax equivalent yield of 2.17%.
A duration of just over five years and generate $70 million to $75 million of monthly cash flow.
Borrowings increased $214 million to end the quarter at 637 million or 336% of assets.
The increase this quarter includes both the issuance of $150 million.
275% fixed rate sub debt and the retirement of a 21 million, 543% fixed rate holding company law.
The tangible common equity ratio decreased 19 basis points to 789% at quarter end.
Decrease was a result of 16 basis points declined due to decrease in market value of investments and another 26 basis points decline due to the significant balance sheet growth this quarter. These.
These were partially offset by a 22 basis point increase from higher retained earnings.
Heartlands regulatory capital ratios remain strong with common equity tier one at just under 11, 5% and the total risk base now over 16% with the inclusion of the $150 million in sub debt we issued this quarter.
So the balance sheet continues to be very strong and well positioned.
Moving to the income statement net interest income totaled $142 5 million this quarter, which was $1 3 million higher than the prior quarter.
PPP interest and fees recognized this quarter was $11 2 million.
Which was unchanged from last quarter.
We exited the quarter with just under $17 million of unamortized PPP loan fees remaining on our books.
The net interest margin on a tax equivalent basis. This quarter was 334% that's down seven basis points compared to last quarter.
During the quarter, a 10 basis point decline in investment yields was partially offset by a two basis point increase in loan yields and a one basis point drop in interest costs.
This quarter. The net interest margin includes eight basis points of purchase accounting accretion, which was down one basis point from the prior quarter.
Noninterest income totaled $32 7 million for the quarter, that's down 440000 from last quarter.
Total mortgage banking revenue was up $1 2 million, which was offset by offset by security gains, which decreased $1 3 million compared to last quarter.
In addition service charges were 400000 higher and trust fees were up 200000, representing 3% increases in each category compared to last quarter.
Shifting to the noninterest expense noninterest.
Noninterest expenses totaled $110 6 million this quarter up $7 3 million from last quarter.
Excluding acquisition integration restructuring and tax credit costs and asset gains and losses.
Core expenses increased just over $6 million to $108 million compared to $102 million last quarter.
The increase is attributed to several items, including a $3 $4 million increase in salary and benefit costs.
Related to the addition of the new lending teams.
Some wage inflation pressure and higher benefit costs as our employees have started to utilize the healthcare system at more normalized levels.
The remaining increase is primarily due to FDIC insurance assessments, which rose due to higher deposit levels and higher costs for security legal and account losses related to increases in claims and productivity this quarter.
Looking ahead to the final quarter of 2021 and into 2022.
We believe <unk> will continue to deliver strong results highlighted by loan pipelines remain strong leading to an expected growth rate ex PPP and the 2% range per quarter as the economy continues to strengthen.
Remaining PPP loan forgiveness will happen largely over the next two quarters.
We anticipate that PPP reductions will be replaced by non PPP growth.
Non time deposits growth is likely to slow into the 1% range per quarter.
Net interest margin will continue to be pressured however, net interest income excluding PPP fees is projected to grow modestly as earning assets grow in mix improves going forward.
Provision for credit losses are expected to remain low for the next quarter or two and then begin to normalize as loan growth continues the economy stabilizes and COVID-19 and supply chain issues subside in 2022.
Noninterest income excluding investment gains or losses in total is expected to be flat next quarter at about $31 million.
We expect to see year over year lift in core noninterest income in the 10% range next year.
Core expected core expenses are expected to remain flat in the $108 million range next quarter.
We intend to manage core expenses to a modest year over year increase in 2022.
However, persistent or increasing inflationary pressures could be a difficult headwind.
We believe a 22% core tax rate that excludes new tax credits as a reasonable full year run rate assuming no tax law changes.
And lastly, we expect the TCE ratio will climb back above 8% next quarter as we get a 20% to 25 basis points increase from retained earnings.
However, it continued upward movement in interest rates could weigh negatively on the ratio.
And with that I'll turn the call back over to Bruce for questions.
Thanks, Brian to wander if you want to open up the line.
We will take questions now.
Thank you we will now be conducting a question and answer session.
To ask a question you will need to press Star then one on your telephone.
So withdraw you question Christa pound key.
Again, Thats star one to ask a question.
Please standby, while we compile the Q&A roster.
Our first question comes from the line of Jeff Lewis with D. A Davidson your line is open.
Thanks, Good afternoon.
Hi, Jeff Jeff.
Okay.
On the.
The charter collapse.
I guess, our analysis is still to be determined but.
Sort of a trigger on that I mean, that's certainly been.
Discussed for for years.
Stayed on that platform and really I guess effectively not a lot changes.
Interested in the in the trigger for the timing of that I know that you have.
You've done a lot of internal work for four years now just wanted to kind of get a sense for the timeline of that.
Kind of why now.
In that discussion.
Yes, so Jeff this is Bruce I think a couple.
A couple of reasons first of all.
We had to make sure that we had a foundation internally so that we could actually execute on a charter collapse, we actually have that in place now.
I think the second thing as we've gotten larger that also was.
One of the factors as well and we just felt that this was the right time to do it, especially with the pressure on both margin and expenses.
This will be an opportunity for us to continue to reduce our efficiency ratio over time, and we've also been reducing the number of physical branch locations as well.
I think the other thing I would add Jeff says.
When we do acquisitions and have been doing acquisitions into our model.
A model that has one charter and the ability to do bigger deals and <unk>.
Set them the way that we want within the company will be easier. If we don't have to worry about the central charter demarcations, and so that will make it easier along with other internal things.
In our back office, Yeah, and just to follow up on Brian's comment our last acquisition aimed bank. They had geography that stretched across two states. So based upon our model we had to split.
Their operation into our two separate charters with some of the assets going into new Mexico, and some of them going into Texas.
That makes sense and excited to kind of hear the results of that.
And maybe just Brian then.
The expense guide is.
Maybe absent any decision on.
On that to come in the fourth quarter is that is that fair to say, yes or would that have much impact.
Yeah, and I would say the impact is likely to come more towards the end of when we get to that.
Charter consolidations done so I think it's going to be a little bit of a lag before you start to see the impact on our run rate from the consolidation.
There probably will be some one time expenses that we'll incur to get the consolidations done as.
As we go through so it could be a little lag before we see the benefit still working on the timing and what other things we have to make sure we kind of cleared the deck of a.
Couple of projects and then we can get going assuming we finalize the.
Process here.
Okay. So.
I mean, your modest increase in the 'twenty two would be absent that.
And like you said, maybe some upfront costs.
Savings that you're potentially identified would kind of be.
'twenty three event is that in late two then there I would say late 'twenty two into 'twenty three yes, okay.
Maybe one last one on the expenses.
Just seems a little elevated I know the projects that you have.
I appreciate the slide on the the number of items that Youre working on was there any.
Lumpy pull forward in this quarter that would suggest.
Tracking these projects is a little difficult from quarter to quarter, but was this on the higher side.
Given your guidance sounds like flat and then moderate next year, but.
Maybe just give us an update on the timeline of of kind of where you are on that.
Internal spend in and work on that front.
Yes, I think a couple of things. So we still have one quarter left in 2021, and I think the consulting part so what we expense as we do these <unk>.
<unk>.
We have one more quarter to go and then we expect that should start to slow down as we really then concentrate on the charter.
Validation is one of our main projects so that should come down we do have a little bump up in temp cost again trying to get some of these projects to completion before we start the consolidations. So I would say those are two things that happened on.
Project side professional fees and some some of it was in the salaries and benefit line as well.
The rest of the cost increase a lot of it was we added the lending teams that Bruce talked about so that was one component and quite frankly, we've been getting a benefit.
From our employees not.
Now doing as much in the healthcare area staying at home not visiting the doctor and not doing some of their normal health care and so we're seeing that starting to open up we're seeing the claims starting to pick up and a lot of that is normal people going back and using the health care system. So.
Those new teams in the health care costs, I think are going to stick.
And so that's why.
I'm thinking some of this cost aneel, but stickier then.
Then other.
Okay.
Got it sorry that triggered one last small one.
Agribusiness team you added in the Central Valley, what what was the total number of folks that you brought on.
'twenty two.
Okay.
It sounds like it range.
Right.
Well that would include again relationship management manager Treasury management officers and the credit team and support team.
Great. Thank you I'll step back.
Thank you thanks, Joe.
Yeah.
Our next question comes from the line of Terry Mcevoy with Stephens. Your line is open.
Terry.
You there.
Todd I don't think we've come check if your line is on mute Terry.
So is that better.
Yes.
Sorry, I think battery and good afternoon, everyone.
Let's just stick with the just the consolidation of the bank charters I mean, everything I've heard sounds quite positive what would you lose what's what's the other side of the argument that.
Maybe being discussed internally.
Well, we spent a lot of time talking about it.
And we don't think there is really very much that we lose at all.
Especially when you keep the brands you.
You keep our structure with local CEO local decision, making local boards.
Quite honestly, that's why we chose to do it we didn't see any downside.
That makes complete sense.
Slide 13, the digital strategy. So much went into that slide and I don't want to just overlook it.
So I guess my question is do a few things very well first what's what's the takeaway from this slide is it treasury management consumer loan originations or what are those few things that you're looking to do extremely well at least in phase one here.
Yes, I think the way to think about it is.
If you look at the upper left hand quarter corner. Those are the things, we're really trying to do better and those are the things that the customers are asking for <unk>. So.
So we really thought that we would turn this around a little bit and not focus on what we thought the right thing to do was but what did the customers expectations what expectations do they have.
And so then also on the on the right hand, upper right hand corner. Those are also things that our customers were looking for.
And sort of the bottom half a lot of this is is more on what I would call the efficiency side.
Yeah, and I think Terry just to add on that I think what we're really working hard is to get.
Yeah.
Higher until you know the top one or the account analysis that we're just trying to get done before the end of the year.
The account opening and maintenance.
And the.
Online products, we're trying to get those done before we start to collapse. The charters. So that debt that is already so that as the charters moved together that functionality just grows across the footprint I think the other thing Terry and it goes to a little bit of the elevated expenses, Brian already talked about as well as.
Getting some things done first we wanted to get the customer facing things done first to provide value for that customer experience. So then next year.
We can really focus on this charter collapse and installing temenos for the on the retail side, because we believe that will be a game changer for our customers and internally.
Great. Thanks.
So we wanted to get we have to get some of these things done first.
Understood I appreciate that and Brian. Thanks for your your fourth quarter outlook for some of the balance sheet and income statement items up very very helpful. Thanks.
Thanks.
Thank you.
Our next question comes from the line of Andrew Leisch with Piper Sandler Your line is open.
Hi, good afternoon, everyone.
Just one last question on expenses, the $108 million and the modest growth next year. The 100, that's modest growth up that run rate not a full year number in 'twenty one is that correct.
Yeah, I would say actually where we're.
Trying to have it be very modest off this 108.
Again as we go into next year I think some of the consulting and some of the things we're doing will come off.
But you know.
Again, I think it's modest over the full year.
You know relatively flat hopefully slightly down from where we are.
Got it okay.
That's helpful.
As I said the one the one headwind that that concerns me is all the inflation that's out there and all of the wage inflation and things like that that we are in the industry are going to deal with so.
That's probably the biggest hurdle to get where we want to go right now.
Certainly yes.
<unk>.
And then on the Securities portfolio continued to add some this quarter.
You don't have as much cash as you as you did a few quarters ago, but what's the appetite to continue building that portfolio and what have you.
But adding there.
Yeah. So.
In terms of growth of the portfolio, our hope is that the growth.
It will slow considerably.
Maybe flatten out as we can.
Get the loan engine these new team's humming.
We'd like to be able to convert basically the cash flow.
A little bit off the investment portfolio and certainly the cash flow that's coming off of the forgiveness right and so back into loans. So if we can do that.
Not see earning assets grow a whole lot for a quarter or two just more reposition and then after that we should see earning assets grow as PPP forgiveness is old.
Got it Okay and then.
Yeah in terms of what we're adding.
It's probably what most banks are adding it's fairly low credit.
Ginnie mae's those sorts of things.
I don't know.
Probably the one and a half to one and three quarter range in terms of yield right now hopefully getting a little bit better with the 10 year moving up but.
We tend to play a little bit shorter of the 10 year, Mark So that helps a little bit we really the front end of the curve to come up.
For us to.
Get the real benefit from our balance sheet.
Definitely.
And then just the team that came over in.
In the Central Valley of California, what sized loan portfolio are they managing at their prior bank.
Prior to coming over it was in excess of $1 billion.
Okay. So.
I wouldn't be great. If they can bring that over but that seems a little that'd be aggressive if they did they did.
There is an opportunity there.
Okay great.
Thanks for taking the questions I'll step back.
Thank you.
Our next question comes from the line of Damon Delmonte with K VW. Your line is open.
Hey, good afternoon, guys hope everybody's doing well today.
Just one quick follow up on the Oh, great Great. One quick follow up on that the the lending team you guys brought up are you disclosing where they came from.
We are not.
Disclosing that game.
Okay Fair enough and then they started was it like early in the quarter or.
I guess when do they come on board and what is the you know maybe.
Are there any restrictions on when they can try to.
Bring over some of that business.
Yes, so they came.
Late in the quarter.
So we really we didnt get any <unk>.
Real production out of them in.
In the third quarter and they do not have any restrictions so.
So we do expect to get some volume from them from that team even in the fourth quarter.
Okay.
Okay great.
And then.
Obviously, you guys have a lot going on the charter consolidation seems to be a pretty sizeable project for you guys that youre working on.
How does all of this kind of internal behind the scenes activities going out how does this impact your outlook for M&A, which has been a long standing component of your strategy.
Have you guys kind of kind of shifting towards.
Focusing more on what you've built and leveraging.
The current footprint.
Relying on.
External growth anymore, or how do we think about M&A.
Yeah, I would say that we.
Wanted to do both.
This is the opportunity and we can control this and we felt it was time again on these projects as well as the charter consolidations, but the way that we're thinking about it we can still do M&A and charter consolidation and Temenos and the talent acquisition strategies.
Got it Okay and then just lastly, Brian could you just go back and revisit your commentary on the margin outlook on the core margin.
And I may have missed what you said the impact was from PPP loans this quarter.
Yes, PPP loans had a bigger impact this quarter. The dollar amount. So looking at non net interest income the dollar amount was the same.
But it had a bigger impact.
In terms of the basis points.
Thinking I did that hang on here.
So through my notes.
Yeah, I think had had we not had the PPP loans.
And you and if you backed out the purchase accounting our margin would have been around $3 12.
Okay. So it had about 14 basis points of effect.
This quarter.
Okay, perfect and then that $3 12.
Can you just repeat what you were saying about your expectation in the fourth quarter and kind of as you head into 2022.
Yeah, I think on the <unk>.
Fourth quarter.
I think with the law, so I think of it in two different ways. I think the margin is going to continue to be under pressure a few basis points, just because of still theres a lot of liquidity.
And there there is the continued loan.
Repricing.
That in the investment portfolio.
But I think not net interest income dollars.
Will.
We'll grow because we had a lot of growth come in at the end of the quarter, both in the investment portfolio as well as in our loan portfolio.
And if we can we're off to a decent start this quarter already on Bruce's $200 million.
Projections. So if we can keep bringing that in and get that to average those three pieces should give us pick up in net interest income the real wildcard will be PPP and how much that gets forgiven and how much of that $14 million. We bring in this quarter versus moves into next year in the first quarter because it's predominantly.
I think going to come in at $14 million or just under 14% 13, eight or whatever it is is going to come in.
I think almost all of it is going to come in the next two quarters.
Got it okay.
Uh huh.
And I guess, just lastly on credit.
A few quarters in a row of negative provisioning.
Do you think that youre going to need to take any and provisioning here to close out the year and as we go into 2022.
You know it.
I always hesitate to say, yes, or no because tomorrow Nathan could call me and say you know something happened that we didn't expect.
I would say if nothing unexpected happens in terms of.
Non performers popping up new non performers or some nonperformer getting way worse than we thought.
I think we should be again, I think theres still going to be net loan upgrades, rather than downgrades and I think that will largely offset the need to provide for our loan growth components. So.
I'm thinking.
It could be plus or minus a little bit.
Zero.
Got it okay.
Alright, that's great. That's all I had thank you very much.
Thank you.
We have a follow up from the line of Jeff <unk>. Your line is open.
Thanks.
We're blurring the lines a little bit with organics.
M&A sort of opportunities, but just at a high level, you've seen quite a few larger bank announcements throughout your footprint in terms of.
M Oes, but larger transactions.
Any.
Care to kind of comment on opportunities off of that or if that again back to that M&A discussion could you sit back and maybe take dislocation of other deals versus super aggressive on buying your own.
I guess the reaction of your from your group on deals you've seen throughout your footprint, if that changes anything or your thoughts on opportunity.
Yes, we continue Jeff to have.
Deep pipeline of <unk>.
Banks of all sizes.
Smaller deals are difficult because they just don't move the needle on EPS, but.
<unk>.
If theyre very strategic and in our current markets. I mean, we would look at deals that are under $1 billion and as to larger deals I mean, we prefer to do transactions from $1 billion to call it five or $6 billion.
Those are big enough to move the needle, but again, we're focused on.
Our current markets and building the scale and dominance in those markets.
Yeah. The <unk> that you were talking about we wouldn't be opposed to them, but as you know those are more challenging to put together they take longer.
They're harder to do and you always have the social issues, so again not opposed to it but.
<unk>.
We look at anything that's very positive for the shareholders obviously.
Yes, Jeff I might just a couple of follow ups. There again, our strategy right now is to control what we can control and we think that's first and foremost on the talent acquisition side, because that will help us grow whether its in California or in the Midwestern cities that I've referenced.
Also we have.
I've had a lot of good.
Hires that we've made in Colorado.
So we're really focused on growing that first and as you mentioned, we have a few of those particularly M. Oes have occurred in our marketplace, which enables us to not only think about the talent there, but also the customer disruption.
So we have a lot of opportunity in front of us and that's that's what we're trying to execute on right now.
Okay. Thanks, guys.
Thank you.
Yes.
And there are no further questions at this time I would like to turn the call back over to Mr. Li for closing remarks.
Thank you Wanda.
In closing <unk> had a solid third quarter.
We had total commercial loan growth of $214 million.
Consumer loan growth of $50 million.
Total deposits were recorded at $16 billion.
We increased our dividend to <unk> 27.
Our third dividend increase this year and we ended the quarter with total assets of 19 billion.
Our momentum continues we are driving growth maintaining strong credit quality and investing in top talent.
We're well positioned for the rest of this year and then into 2022.
I'd like to thank everyone for joining us today.
Our next quarterly earnings call will be in late January have a good evening everyone.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
[music].