In This Article:
Release Date: January 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
National Bank Holdings Corp (NYSE:NBHC) delivered solid earnings of $0.86 per diluted share during the quarter with a 14.4% return on tangible common equity.
-
The company achieved an 11.3% annualized net interest income growth during the quarter, with a strong net interest margin of 3.99%.
-
Tangible book value grew by 11% during 2024, and the company exited the year with a common equity tier one capital ratio of 13.2%.
-
NBHC maintained a strong net interest margin and generated average deposit growth of 4.7% for the full year 2024.
-
The company anticipates higher levels of loan demand in 2025, projecting loan growth to be in the mid-single digits.
Negative Points
-
The strategic sale of investment securities resulted in an after-tax loss of $5 million during the fourth quarter.
-
Non-performing loan ratio remains a concern, although it is below peer averages at 46 basis points of total loans outstanding.
-
The transportation sector continues to show weakness, representing a source of concern despite being less than 2% of total outstandings.
-
The company experienced elevated levels of payoffs and paydowns, reflecting vibrant economic activity but also impacting loan growth.
-
Non-interest expense for 2025 is projected to increase, with significant investment in the two unify initiative, impacting overall expenses.
Q & A Highlights
Q: Are you seeing any changes in the competitive environment for loans, and are there any particular areas you're targeting this year? A: The competitive environment has been consistent since late 2024, and we don't foresee significant changes going into next year. There is considerable activity in terms of paydowns and payouts, indicating a vibrant economic environment conducive to credit generation and business opportunities. (Respondent: NBH President)
Q: Is there a specific relationship that caused the rise in non-performing assets (NPAs), or is it related to a particular segment? A: The transportation sector continues to show weakness, which is a concern, but it represents less than 2% of our total outstandings. Recent activity in this space involves small dollar exposure from a previous acquisition, which we are working to clean up. (Respondent: Chairman and CEO)
Q: What is the projected expense for the Two Unify initiative this year? A: The projected expense for Two Unify is in the range of $27 to $29 million. (Respondent: Chief Financial Officer)