National Bank (NBHC) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $24.2 million, or $0.63 per diluted share, down from $31.4 million ($0.82 per share) year-over-year, mainly due to a $10.2 million provision for credit losses tied to a suspected fraud-related charge-off.

• Return on average tangible assets was 1.09%, and return on average tangible common equity was 10.64%.

• Tangible book value per share increased $0.66 to $25.94 during the quarter, up 2.6% sequentially and 11.2% year-over-year.

• The company is operating in a risk-off mode, focusing on credit quality, expense control, and technology investments.

• Clients remained cautious amid economic uncertainty, impacting loan and deposit growth.

Financial highlights

• Fully taxable equivalent net interest income rose 3.4% year-over-year to $88.6 million, with net interest margin widening 15 bps to 3.93%.

• Total assets reached $10.1 billion, loans outstanding at $7.6 billion, and deposits at $8.4 billion as of March 31, 2025.

• Non-interest income was $15.4 million, down from $17.7 million year-over-year, mainly due to lower SBA loan gains and swap fee income.

• Non-interest expense decreased $0.8 million to $62.0 million, with lower salaries and benefits offset by higher technology investments.

• Efficiency ratio improved to 57.74% from 58.82% year-over-year.

Outlook and guidance

• Management expects continued challenges from macroeconomic pressures, competition for deposits, and regulatory changes but remains confident in liquidity, capital, and risk management.

• FTE net interest margin projected to remain in the mid-3.90% range for 2025.

• Total non-interest income for 2025 projected at $72 million–$77 million.

• Total expenses expected at the low end of the $272 million–$278 million range.

• Dividend payout ratio target remains at 30-40% of core earnings, with $50 million authorized for share repurchases.