DENVER - National Bank Holdings Corporation (NYSE: NYSE:NBHC) reported a strong performance for the third quarter of 2024, with net income rising to $33.1 million, or $0.86 per diluted share, a notable increase from $26.1 million, or $0.68 per diluted share in the previous quarter. The bank's return on average tangible common equity stood at an impressive 14.84%.
Chief Executive Officer Tim Laney expressed satisfaction with the results, highlighting the bank's disciplined approach to loan and deposit pricing, which led to an 11 basis point expansion in net interest margin to 3.87%. The bank's core banking fees also saw solid growth, contributing to significant year-to-date fee income growth.
Laney underscored the bank's vigilant monitoring of its loan portfolio, which has resulted in the lowest non-performing loan ratio since early 2023. With a Common Equity Tier 1 capital ratio of 12.88%, ample liquidity, and diversified funding sources, the bank is well-positioned for future growth.
The quarter saw net interest income increase by $4.2 million to $89.5 million, driven by a $74.7 million increase in average interest-earning assets and a rise in average loan yields. Loans remained steady at $7.7 billion, with commercial loan fundings leading at $219.1 million. The average interest rate on third quarter loan originations was 8.5%.
Asset quality remained a focus, with the bank recording a $2.0 million provision expense for credit losses, primarily due to higher reserve requirements from changes in the economic forecast within the CECL model. Annualized net charge-offs decreased to 0.18% of average total loans.
Average total deposits saw a modest increase to $8.4 billion, maintaining a healthy loan to deposit ratio of 90.8%. Non-interest income also rose to $18.4 million, with increases across various fee revenue sources.
The bank announced a 3.6% increase in its quarterly dividend to $0.29 per share, marking the eighth consecutive semiannual increase since early 2021. This dividend is payable on December 13, 2024, to shareholders of record as of November 29, 2024.
Comparing year-over-year for the first nine months, net income totaled $90.6 million, or $2.36 per diluted share, a decrease from the previous year's $108.9 million, or $2.85 per diluted share. The decline was attributed to lower net interest income due to increased cost of funds, partially offset by a 4.7% rise in non-interest income.
The information is based on a press release statement.
In other recent news, National Bank Holdings Corporation has reported steady second-quarter earnings of $0.68 per diluted share, a net interest margin of 3.7%, an annualized loan increase of 8.1%, and a rise in average deposits by 7.9%. These results come alongside active mergers and acquisitions and progress in the company's 2UniFi project. The corporation also declared a quarterly cash dividend of $0.28 per share, underscoring its commitment to deliver high-quality client service and stakeholder results.
Moreover, the company has announced key executive changes, promoting Aldis Birkans to President and appointing Nicole Van Denabeele as the new Executive Vice President and Chief Financial Officer. Emily Gooden has been elevated to Senior Vice President, Chief Accounting Officer, continuing her role as Investor Relations Director. These appointments are part of the company's strategic approach to support its growth.
In the analysis realm, DA Davidson, an independent firm, has reaffirmed its Buy rating for National Bank Holdings' stock and raised its price target from $45.00 to $51.00. Despite an earnings per share shortfall due to lower-than-expected earning assets and a one-time non-recurring venture capital investment headwind, the firm remains optimistic about the bank's future growth. These recent developments highlight National Bank Holdings Corporation's ongoing commitment to building a leading community bank franchise.
InvestingPro Insights
National Bank Holdings Corporation's (NYSE: NBHC) strong third-quarter performance is further supported by data from InvestingPro. The company's P/E ratio of 12.56 indicates that it's trading at a relatively low valuation compared to its earnings, which aligns with the InvestingPro Tip suggesting that NBHC is "Trading at a low P/E ratio relative to near-term earnings growth." This could be particularly attractive to value-oriented investors.
The bank's commitment to shareholder returns is evident in its dividend policy. InvestingPro data shows a current dividend yield of 2.69%, with the company having raised its dividend for 8 consecutive years. This consistent dividend growth, highlighted as an InvestingPro Tip, underscores the bank's financial stability and commitment to returning value to shareholders.
Despite the challenges in the banking sector, NBHC has maintained profitability, with InvestingPro confirming that the company has been profitable over the last twelve months. This is consistent with the bank's reported net income growth and improved return on average tangible common equity.
For investors seeking more comprehensive insights, InvestingPro offers additional tips and metrics that could provide a deeper understanding of NBHC's financial position and future prospects. Currently, there are 8 additional InvestingPro Tips available for NBHC, which could offer valuable context for investment decisions.
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