National Bank Holdings Corporation Reports Mixed Q3 Results, Net Income Down 8.5% Year-Over-Year

National Bank Holdings Corporation (NBHC) reported its financial results for the third quarter and nine months ended September 30, 2024, highlighting a mixed performance in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the three months ended September 30, 2024, NBHC recorded a net income of $33.1 million, or $0.86 per diluted share, down from $36.1 million, or $0.94 per diluted share, in the same period of 2023. For the nine months, net income was $90.6 million, or $2.36 per diluted share, compared to $108.9 million, or $2.85 per diluted share, in the prior year. The decrease in net income was primarily attributed to lower net interest income, as the increase in the cost of funds outpaced the rise in interest income, despite a 4.7% increase in non-interest income.

Total interest income for the three months increased to $138.0 million from $126.1 million year-over-year, while interest expense rose significantly to $50.4 million from $38.3 million. The net interest income for the three months was $87.7 million, slightly down from $87.8 million in the same quarter of 2023. For the nine months, net interest income decreased to $255.3 million from $272.5 million, reflecting a narrowing net interest margin of 3.80%, down 32 basis points from the previous year.

Non-interest income for the three months ended September 30, 2024, was $18.4 million, a decrease from $19.4 million in the same period last year. However, for the nine months, non-interest income increased to $50.1 million from $47.9 million, driven by gains on SBA loan sales and trust income, although mortgage banking income fell due to lower volume in a higher interest rate environment.

On the balance sheet, total assets as of September 30, 2024, were $9.9 billion, a slight increase from $9.9 billion at the end of 2023. Total loans remained stable at $7.7 billion, while total deposits rose to $8.5 billion, reflecting a 5.0% annualized increase. The allowance for credit losses decreased to $95.0 million, or 1.23% of total loans, down from $97.9 million at the end of 2023.

Strategically, NBHC continued to enhance its digital solutions for clients through its financial ecosystem, 2UniFi, aimed at improving access to financial services for small and medium-sized businesses. The company also completed the acquisition of Cambr Solutions, LLC, for $46.5 million in April 2023, which is expected to contribute positively to its market presence and operational efficiencies.

Overall, while NBHC faced challenges in net interest income and profitability, it demonstrated resilience through growth in non-interest income and strategic investments in technology and acquisitions.