Q3 2022 Heartland Financial USA Inc Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Yeah.
Greetings and welcome to the HTS <unk> third quarter 2022 conference call. This afternoon Hdls distributed its third quarter press release, and hopefully you've had the chance to review the results.
There is anyone on this call who did not receive a copy you may access it at <unk> website at <unk> Dot com.
With us today from management are Bruce Lee, President and CEO , and Bryan Mckeag Executive Vice President and Chief Financial Officer Management will provide a brief summary of the quarter and then we will open the call to your questions before we begin the presentation I would like to remind everyone that some of the information management will be providing.
Today falls under the guidelines of forward looking statements as defined by the Securities and Exchange Commission as part of these guidelines I must point out that any statements made during this presentation concerning the company's hopes beliefs expectations and predictions of the future are forward looking statements and actual results could differ materially from.
Those projected additional information on these factors is included from time to time in the company's 10-K, and 10-Q filings, which may be obtained on the company's website or the SEC website.
At this time I will now turn the call over to Mr. Bruce Lee at Hdls. Please go ahead Sir.
Thank you Josh.
Good afternoon, everyone. This is Bruce Lee President and CEO welcome to <unk> 2022 third quarter earnings Conference call. I. Appreciate you joining us today as we discuss <unk> continued strong performance.
For the next few minutes I will discuss our third quarter highlights then turn the call over to Bryan Mckeag, Chief Financial Officer for additional information around our results.
Joining us today is Nathan Jones, Chief Credit Officer, who can answer questions regarding our disciplined credit approach that continues to deliver excellent credit quality across our portfolios.
<unk> had a strong clean third quarter with.
With $54 6 million of net income available to common shareholders in EPS of $1 28, once again exceeding expectations.
We continue to see results from the ongoing execution of our strategy.
In the third quarter organic loan growth, excluding PPP totaled $255 million or 2% from the linked quarter and exceeding our guidance of $250 million.
Our efficiency ratio decreased to 55 to six 512 basis points lower than a year ago, where.
We are driving efficiency, while strategically investing for growth.
And our credit quality continues to be excellent with only 26000.
Quarterly net charge offs and our delinquency remained near historic lows at 10 basis points.
Let's start with loan growth highlights.
We saw continued strength in commercial loan portfolios from the linked quarter commercial and industrial increased $219 million or 7%.
Owner occupied real estate increased slightly by $3 million.
Construction increased significantly by $151 million or 18%.
Non owner occupied real estate decreased $102 million or 4%.
In our AG portfolio decreased $55 million or 7% as customers used seasonal harvest to pay down their credit lines.
In the third quarter, we saw commercial loan growth in eight of our 11 banks.
We added 353, new commercial relationships, representing $245 million in funded loans and $48 million of new deposits.
On average new originations were a higher credit quality than the overall portfolio as measured by risk ratings and credit scores and 69% of these loans have variable rates structures compared to 66% from last quarter. We.
We've made significant investments in specialized industry verticals and capital markets expertise, including loan syndications interest rate derivatives trade finance and foreign exchange.
We're driving business in fee generating products, such as our commercial card business, which generated $6 $2 million in revenue.
6% increase from the linked quarter.
Treasury management business, where total deposit fees are up 14% year to date.
The depth and breadth of our products and services is opening new doors, our commercial pipeline remains strong at over one 5 billion and.
And we expect to grow commercial loans by $225 million to $250 million in the fourth quarter.
In our consumer loan portfolio, we saw solid growth of $31 million or 7% from the linked quarter and expect to grow consumer loans by $15 million in the fourth quarter.
Residential mortgage increased $8 million or 1% from the linked quarter.
Turning to deposits.
Non time deposits were flat, while time deposits increased $44 million or 4% from the linked quarter.
Overall deposits grew to a record $17 3 billion, an increase of $42 million from the linked quarter and our 14th consecutive quarter of deposit growth.
We maintained our exceptional deposit mix now.
93% of deposits are in non time accounts.
38% of total deposits are in noninterest bearing accounts positioning us well as rates continue to rise.
Our deposit pricing strategy and favorable deposit mix continues to serve us well.
Core deposit costs remained low at 21 basis points, along with total deposit cost at 35 basis points.
Late in the third quarter, we began to execute market specific deposit acquisition strategies.
Additionally, our commercial teams are focused on attracting new relationships, including deposit only relationships.
We are addressing overall price increases to maintain and grow our deposit base.
As I mentioned at the top our efficiency ratio decreased 512 basis points from a year ago to 55 to six.
The significant decrease demonstrates we are executing our growth strategies, increasing revenue and reducing core expenses competitive.
Pressures remain for top talent.
And we're investing in our culture and our people wage.
Wage inflation and demands for top talent continue to be high but our employee retention strategy has been successful and it's an area. We continue to monitor closely.
Turning to key credit metrics, our disciplined credit approach continues to deliver excellent credit quality across our portfolios delinquency.
Delinquency ratio remains near historic lows at 10 basis points nonperforming loans represented 60 basis points of total loans.
Nonperforming assets as a percentage of total assets remained low at 37 basis points.
Non pass rated loans decreased to five 3% from five 8% in the linked quarter.
Lastly, in the third quarter.
Reported net charge offs of only 26000.
Which essentially rounds to zero.
We will continue to take a conservative credit approach given concerns around the current economic environment.
Despite headwinds.
Sustained.
Momentum and are well positioned for continued growth and progress against our goal of organic loan growth new.
New customer acquisition, attracting and retaining talent controlling expenses branch and geographic optimization and maintaining strong credit quality.
We will also achieve growth through charter consolidation, creating operational and cost efficiencies that unlocked capacity and support growth organically and through M&A.
To date, we have successfully executed four bank charter consolidation with our banks in Arizona, California, Colorado, and Minnesota, becoming divisions of <unk> Bank. We're pleased to report that transitions have been smooth and the project continues on <unk>.
Joel and on budget.
We expect to finish charter consolidation early in the fourth quarter of 2023, and deliver $20 million of annual savings and capacity. After the project is complete.
Brian will share more details in his comments.
We also continue to optimize our branch network.
Since the beginning of 2021, we've reduced our number of branches by 15% to 121 total locations.
Our steadfast commitment to improving the customer experience has been recognized by coalition Greenwich is six of our banks have been named 2022 customer experience leaders in the commercial small business banking or commercial middle market banking categories.
To earn the recognition our bank's achieved scores that exceeded the industry benchmark by a specific margin in overall satisfaction.
Likelihood to recommend.
And ease of doing business.
Gratulation to all the teams delivering best in class service to our customers.
<unk> mission is to enrich lives, one customer employee and community at a time.
Our employees live this mission daily and I, specifically want to recognize Tracy bashing doors Hannon.
Okay, Michelle Shane and their teams for their hard work on charter consolidation and dedication to delivering strength.
Insight and growth to our customers communities and each other.
Now turn the call over to Bryan Mckeag, Chief Financial Officer for more details on our performance and financials.
Thanks, Bruce and good afternoon.
As Bruce just outlined this was another solid quarter for <unk> earnings per share of $1 28.
Loan growth of five $255 million excluding PPP.
Strong revenue growth.
Improved core expense levels and stable clean credit trends.
Included in this quarter's results were two large items first a $1 $1 million loss on the sale of securities.
And charter consolidation restructure costs of $2 2 million.
Together these items decreased pretax income by $3 3 million and earnings per share by <unk> <unk>.
I would again remind you that both our earnings release and third quarter Investor presentation are available in the IR section of our <unk> website.
I will start my comments as I, usually do with the provision for credit losses, which totaled $5 5 million to $2 $2 million increase over last quarter.
This quarter the provision was driven by loan growth that was heavily weighted towards C&I.
Elevated economic concerns and stable healthy credit trends.
More specifically after five quarters of decline.
Nonperforming loans and related reserves rose just slightly this quarter.
Loan delinquencies remained low at 10 basis points of total loans non pass loans declined again this quarter to five 3% of loans from five eight last quarter.
And as Bruce Bruce already mentioned net charge offs were virtually zero this quarter.
At quarter end, the allowance for lending related credit losses, which includes both the allowance for credit losses on loans and unfunded commitments increased $5 5 million to $124 6 million or 114% of total loans.
In addition at quarter end unamortized purchase loan valuations on the balance sheet totaled $12 million or 11 basis points of total loans.
Moving to investments, which declined $300 million in the quarter at 7 billion.
Representing 35% of assets with a tax equivalent yield of 2.92%.
And we will generate cash flows exceeding $1 billion over the next 12 months.
We continue to actively manage the portfolio by taking several actions during the quarter.
First.
August we moved $935 million of taxable.
Munis with a market value of $748 million into the held to maturity portfolio.
Second we utilize some of our strong revenue growth to take the opportunity to sell a $60 million of securities, yielding two 3% and a $1 $1 million loss.
And use the proceeds to purchase new AAA rated securities yielding five 8%.
And lastly, we utilized $125 million of cash flow this quarter to fund loan growth.
With regards to capital Hdls regulatory capital ratios remain strong with common equity tier one at just over 11% and total risk based capital at 15%.
The tangible common equity ratio decreased 62 basis points to 494% at quarter end.
And includes a 79 basis points decline due.
Due to the continuing decrease in market value investments.
Which was partially offset by higher retained earnings.
Moving to the income statement.
<unk> with revenue.
Net interest income totaled $155 $9 million, this quarter, which was $13 4 million higher than the prior quarter.
The main drivers of the increase were strong loan growth.
Fed short term interest rate increases with only modest core deposit price increases.
The quarter included 400000 of PPP interest and fees.
Which is $1 4 million less than last quarter.
We exited the quarter with just under 400000 of unamortized PPP loans for fees remaining on our books.
Net interest margin on a tax equivalent basis rose 23 basis points this quarter to 345%.
Due to the recent rate increases and our asset sensitive balance sheet incur.
Increased.
Asset yields outpaced rising funding costs again this quarter.
As investment yields improved 46 basis points and loan yields were 36 basis points higher.
Total interest bearing deposit costs were up 30 basis points.
This quarter. The net interest margin includes three basis points of purchase accounting accretion, which was down four basis points from the prior quarter.
Noninterest income of $29 2 million was $5 4 million lower compared to the prior quarter.
Excluding security gains and losses core noninterest income was $30 4 million, which was just short of our 31% to $32 million forecast.
The main components of the reduction, we're a $3 $1 million decrease in swap and commercial swaps and syndication fees due to lower loan volumes this quarter compared to last quarter.
Weaker wealth management fees, and mortgage banking revenue, which declined $500001 $1 million respectively.
Due to the higher interest rate environment.
And as you may recall last quarter, there was a $1 $9 million gain on the sale of visa B shares.
So in total revenue grew $8 million or 5% exceeding expectations and we will continue to grow into 2023.
Shifting to expenses noninterest expenses totaled $108 $9 million this quarter, that's up $2 4 million from last quarter.
Excluding restructuring tax credit costs and asset gains and losses, the run rate of recurring operating expenses decreased $600000.
<unk> $106 million compared to $106 6 million last quarter and came in within our expected range of $105 million to $106 million.
Most core expense categories were relatively flat or down this quarter with the most significant improvement coming in salary and benefits expense, which decreased $1 4 million.
The only category with a significant increase was other expenses, which was up just under 700000.
As a result of the strong revenue growth and core expense reductions again this quarter. The third quarter efficiency ratio continued to improve down to 55, 6% from 57, 6% last quarter.
Looking ahead <unk> significant momentum will continue next quarter and into 2023 highlighted by.
Loan pipelines, which as Bruce noted remains strong and support our expected loan growth rate of 2% to 3% per quarter.
Non time deposit growth is expected to remain muted in the 1% range per quarter.
Assuming no additional fed rate changes net interest income is projected to grow low single digits on a percentage basis next quarter, reflecting continued loan growth loan growth.
A full quarter impact from the September fed rate increase with some of the offset from mounting pressure on deposit pricing.
Yes.
The next expected fed increase of 75 basis points is projected to increase net interest income by $8 million to $9 million on an annualized basis, assuming a normal deposit beta for us a 40%.
Provision for credit losses should remain in the range over the past few quarters of $3 million to $5 million given projected loan growth and assuming net charge offs and delinquencies remained near their current levels.
However, further declines in economic conditions and projections could have a significant impact on future provisions showed a strong recession began to materialize.
Core noninterest income excluding investment gains and losses is expected to be in the 29% to $30 million range per quarter with commercial deposits swap and syndication fees, helping to offset lower mortgage banking and wealth revenue.
Recurring operating expenses are expected to remain in the $105 million to $106 million range, however, inflationary pressures, including wage inflation.
Remain challenging.
Charter consolidation restructuring costs are expected to be between two five and $3 million next quarter.
In total we estimate the remaining cost to complete the project will be 12% to $13 million over the next five quarters.
Validation and branch optimization benefits are already beginning to materialize as evidenced by the 16 basis point reduction in our core expenses to average assets ratio since the beginning of the year.
And additional benefits will continue to develop over the next 12 months.
We remain confident that the total consolidated benefits were reached $20 million on an annualized basis. When the consolidations are completed in early Q4 of 2023.
And finally, we believe a tax rate in the 22% to 23% range, excluding tax credits as a reasonable run rate.
And with that I'll turn the call over to Bruce for questions.
Josh we can open up the lines for questions now.
Thank you.
We'll now be conducting a Q&A question and answer session. As a reminder to ask a question you will need to press star one on your telephone please standby, while we compile the Q&A roster.
Our first question comes from Andrew Liesch with Piper Sandler you May proceed.
Good afternoon guys.
Questions here on.
On the loan growth in the <unk>.
<unk> I'm, just curious like how much of this growth and how much of the pipeline consists of some larger syndicated loans first.
Do you participate out versus.
Some of the more granular.
Loans that you've historically originated.
I don't have the exact number Andrew but I would tell you that it's a much more granular it's more of a focus towards the granular loans that and relationships that we would bring on our books versus larger syndicated relationships.
Yes.
Paul.
And Andrew we only had a small handful of syndicated loans this quarter and last quarter. So most of that growth is our own.
And even just integrate screw we would be the primary bank and would just syndicate right.
Limits.
Right right.
And then just on the loan growth outlook I mean, what are the thoughts on funding it doesn't sound like non TV growth or deposit growth is going to be.
That much so should we just continue to look at it is.
The cash flows from the Securities portfolio, and then maybe some Cds added on top of that.
Yes, we would start with cash flow from the investment portfolio to fund any shortfalls, obviously, we're working on trying to grow deposits.
But as we all know that that's.
That's a tough quarter in this environment I think we can get some.
But.
We likely will have to use some investment cash flow to fund the loans and we're willing to do that and we're able to do that because we still have 35% of our balance sheet.
The investments and as I mentioned in my comments late in the third quarter for the first time since the pandemic, we've actually initiated a consumer customer acquisition strategies in each of our markets.
Got it Okay and then just one question on that.
9 million of annualized spread.
Spread income from the.
Upcoming 75 bps hike.
Normal normal beta of 40% is that reasonable and what have you guys seen so far.
As far as the latest combined.
Our betas are probably been half of that if not leaving a little bit lower so.
We like most other banks have really been holding down the costs that will probably change will probably catch up a little bit even from this last move theres, probably still some pressure to move rates up and then I would think going forward, we will be in that.
30% to 40 range do what we need to do 40 is pretty much our high when we when were not significant rising rate environment.
Gotcha.
Alright, thanks for taking the question I'll step back.
You bet.
Thank you one moment for our questions.
Our next question comes from Terry Mcevoy with Stephens you May proceed.
Hi, good afternoon everybody.
Hi, Terry.
Maybe Bruce.
Bruce.
You described the charter consolidation is smooth that's what I've got in my notes here I'm wondering if could you just talk about feedback from employees from from customers and as an outsider looking in just reviewing the quarterly data it really didn't appear to disrupt growth or client acquisition at all but just would be curious kind of what you are.
Seeing and hearing from your seat.
Yes, Terry Ive got to tell you I couldnt be more pleased with how this has gone as.
We've always said that we really are great at M&A and really this is just doing our own internal M&A and the teams and I recognized several of them on the call. The planning that we put into this for over six months. The employee feedback has been fantastic. We haven't had any issues there at all.
There is still using the same systems I would also say.
The customer feedback.
Has been very positive, especially.
Now that they can use where they are either say traveling into Arizona wintering. They can use our branches there that is a real advil.
Advantage for them.
In most cases, everybody was able to maintain their routing numbers in a few cases they've had to change.
<unk> numbers, and Thats really where we probably had the most significant issues and it really hasn't been an issue with just required us to get out in front of that and have conversations with our customers.
Supply them with their new account numbers, but very positive. It has had absolutely no impact at all.
On.
Our growth and growth strategies, it hasnt slowed us down at all.
That's great to hear.
When I look at the asset quality and include Oreo and performing troubled debt restructuring loans, there was an uptick quarter over quarter. So.
I'm wondering just your kind of what you saw within the loan portfolio and again theres kind of Oreo and those <unk> popped up and what are your expectations for Q4.
Yes.
Probably let Nathan jump in and give your thoughts on that Ontario Nathan.
Yeah, as we look at kind of the Npls in the overall Oreo.
We've really I think it really shows that we've made.
So much headway around kind of over the last year year and a half if you look at our npls compared other upside this quarter. If you look at them compared to 2019 to down 25%.
Lot of our other credit metrics have improved significantly along the same lines London.
<unk> sales are down from.
2019 by looking at from a dollars perspective, almost 55% plus non pass it down five down from seven 4% in 2021% to five 3%. So we don't expect everything to be a linear improvement we don't see any significant issues as we continue to work through.
I think we would execute on improving the overall credit quality of the overall portfolio.
We think it's just a little bit of us working through that and then not happen perfectly linear, but I would tend to put the hard work in continuing to improve the overall portfolio.
Mystic will be able to continue to make positive results in relation to that work.
Anything you'd like to add back on top of that yes, I think just related to the <unk>.
Sorry there.
There's a couple in there that one I know was a holdover from some of the extensions that we did during COVID-19.
Needed some additional help and the cumulative time, we just need to move it to <unk>.
Making its payments.
As we'd hoped.
Needed a little bit more time, so it crossed the line into a TCR both of them are rated substandard, so they're getting a pretty healthy reserve in our process anyway. So just.
Okay.
Perfect. Thanks for taking my questions.
Thanks Terry.
Thank you one moment for questions.
Our next question comes from Damon Delmonte with <unk>.
<unk> you May proceed.
Hey, good afternoon guys.
Just wanted to clarify Brian that the guidance on the provision I think you said between three and $5 million.
Assuming no changes for economic conditions.
I think this quarter was loan growth that also.
From what I read in the release, a kind of a broader comment about.
Potential softening of credit trends, so that was kind of factored into the provision. This quarter. So do we think about the three to 5 million specifically for the loan growth in that.
Economic trends continue the way they are we could see a provision similar to what we saw this quarter.
Yes, I think unless there's a significant change in the main drivers that we use our unemployment GDP and those both went down this quarter from last quarter.
And so.
I think if those don't just go down quite a bit you can be we can be right in that range.
Based on the credit quality that we've got going into this quarter with as we talked about.
The low delinquencies.
Non passes and a really good range.
So it will be mostly our loan growth and then whatever change in economics, and then a little bumps here and there that we just normally get as we go through the process.
Okay.
Alright, great and then for the expense guidance did you say you hope to keep it in the 105 106 range.
Correct, yes.
That core run rate component of it that would exclude those items I talked yes, bumpy exactly okay. So I guess on that point, what gives you confidence of being able to kind of keep things flattish just given the kind of the inflationary environment that we're in now and other wage pressures that that have been a common theme throughout.
The quarter.
Yes.
Our ftes are down again this quarter.
I don't know what theyre going to go down a whole lot more we we've done a really good job. If you look at our FTE trends in the.
In the earnings release.
<unk>.
I think we're at that point, we're managing that well.
And.
We have been providing for a strong year for our bonuses, sometimes we get a bump at the end of the year. So I believe that we've kind of we're in good good shape for all that.
Wages wage inflation is always something we're working on.
But we've been able to manage it through for the last two or three quarters. I think we can continue to do that.
Got it Okay, and then just lastly.
On the margin outlook. It seems if we get another 75 basis points later this week that that bodes well for you guys.
As you look out into 'twenty three.
Are you kind of see the margin, peaking as far as like what time of the year. Do you think you can go through at least the first half of the year with a rising margin or do you think.
You could start to see some ramping of deposit beta is that what kind of.
Limit further expansion as you go through 'twenty three.
Yeah, obviously, the fed will play a big part in that as long as they keep moving we will keep moving up.
As I said at a 40% deposit beta we still have enough asset sensitivity to cover that.
If we have to go into say.
50%, 55% of that if it gets really competitive and we have to do that on deposits.
Then there is probably getting to a push no benefit for a rate increase so.
And I think I look at it.
David a little.
The way I look at at the time, the fed stops increasing we probably will continue to increase our margin about one more quarter and then it starts to top out the way that I would describe it because theres a lag in the re prices we have the lag effect.
Yes, we feel Gary.
Our loan growth because of what's coming off of our investment portfolio as Brian already mentioned with $1 billion next year.
Right right. Okay perfect. That's all I had thanks, a lot I appreciate the color.
Thank you thanks, Dan.
Thank you and as a reminder to ask a question you will need to press star one one on your telephone. Our next question comes from Jeff <unk> with D. A Davidson you May proceed.
Good afternoon.
A couple of questions to follow up on.
Brian .
Do we have a sort of a.
A percent of the $20 million savings that you have.
The market in savings for the consolidation.
Are you along our path of achieving a certain amount of that already.
I guess do you have to be completely complete.
Recognize that or is there a number that you think you've already achieved on that.
Yes, Bruce asked me that all the time and it's really hard.
No.
A lot of this stuff I hate to use the term, but ragu right that these expenses are.
Linked to other things, but we have been reducing our ftes. We've been some of that is our branch optimization. So you've got all that going on at the same time.
So, but what I look at Jeff is that core expenses to average assets.
And we have <unk>.
Taken out a pretty good chunk of the $20 million.
Already.
In various forms again, it's hard to figure out how much of that is.
From that the branch optimization and how much is from the charter consolidations are happening at the same time, but.
I feel pretty good that we've got.
Good good piece of it already and there'll be more next year as we continue to consolidate.
We're doing pretty well I think I mean, Jeff it's not quite linear like we've got four out of our 11 banks done. So if we achieved 40% of the 'twenty, that's probably not necessarily the way to look at it.
But with the growth that we've had.
We've definitely increased our capacity without increasing.
Increasing our expenses so.
The way I think about it we're probably.
25% to 30% of the $20 million, we've already achieved even though we still have.
Eight or nine months ago.
Got it thanks for that.
The detail kind of a lot of puts and takes there but.
Helpful.
You said Bruce I mean.
As the transition of the consolidations are pretty smooth.
Bodes well I suppose for the remainder but.
Yes, just hopping over to the.
Housekeeping, a little bit on that.
Brian I think you alluded. This in the other income line of doubt down linked quarter, just kind of cut in half was that largely just reduced swap income.
Yes, and also that's where the visa b share gain was last quarter.
Got it.
Eight $1 nine and $1 9 million.
And the you do think the swap.
That kind of comes back some again to offset maybe some of the gain on sale.
Yes, I think a little bit.
Obviously, our loan growth that Bruce projected for.
For next quarter is about what we did this quarter.
But I think we've got some things in the pipeline hopefully that can keep that flat.
To slightly up and I would just say we can move our service charges up a little in the second quarter I mean, our capital markets income, we really overachieve, we had a huge loan growth in.
We're able to capture not only syndication fees, but also some swap fees and we have more and more customers talking about swapping some of their floating rate debt.
Those conversations have increased fairly dramatically over the last couple of quarters.
But having said all I would say that that number of the other things that I told you about the future. That's that's the Lumpiness number and Thats the one that we announced.
<unk>.
Got as much challenge to get into that range and keep it in that range as any of the other.
Numbers that I quoted in terms of what we expect going forward, but we feel very good about treasury management fees commercial card fees, we have great run rates going there and it's not as lumpy, but the mortgage businesses.
<unk> is off.
The wealth business, we will see how the billings are because of the way the market rallied here in October .
See how it reacts to the next fed cut which sounds pretty certain year of 75 basis points at least here in a week or so.
Okay.
And the last one I had just clarifying.
Maybe I missed it.
Again, the uptick in and kind of.
Non accruals and <unk>.
Oreo did you outline a asset class outside of I think you mentioned kind of healthcare was there anything else in there that kind of led to some of the sequential increase by.
By type.
No I think the one thing I would say the increase in the Oreo is really for.
<unk>.
Our credit that we have talked about for not just quarters years.
A workout credits that we've had here.
Here in the Midwest.
Hog operation I think you've heard us talk about before it is now finally made its way to Oreo I know that our special asset guys are working hard to try and see if we can get it off the books.
Nathan do you have any other color on that.
No Brian articulate well, it's one we've been working with for many years, even predates me here.
We're hoping to drive resolution on here shortly.
Thanks, guys.
Okay.
Thank you.
As there are no further questions at this time I would now like to turn the call back over to Mr. Li for closing comments.
Thank you Josh.
<unk> Board of Directors has approved a quarterly cash dividend of 28 per share on the company's common stock a 4% increase from a year ago. The dividend is payable on November 29 2022.
In closing <unk> is executing our strategy, we are delivering results and we're exceeding expectations.
In the third quarter, we delivered $185 million of revenue a 5% increase from the linked quarter $54 6 million of net income available to common shareholders and EPS of $1 28 orgs.
Organic loan growth totaled $255 million or 2% our efficiency ratio decreased 512 basis points from a year ago to 55 to six our credit quality continues to be solid and we are seamlessly executing charter consolidation to deliver improved customer.
Her experience efficiency and <unk>.
<unk> capacity for future growth.
Thank you for joining us our next quarterly earnings call will be in late January have a good evening.
Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
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