National Bank (NBHC) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income was $33.1 million ($0.86 per diluted share), up 26.7% sequentially but down from $36.1 million in Q3 2023, with strong capital and liquidity positions.

• Return on average tangible common equity rose to 14.84% in Q3 2024, and return on average tangible assets was 1.4%.

• Average total deposits increased to $8.4 billion, loans outstanding remained steady at $7.7 billion, and equity was $1.3 billion as of September 30, 2024.

• Quarterly dividend increased 3.6% to $0.29 per share, marking the eighth consecutive semiannual increase since 2021.

• Leadership changes include Aldis Birkans as President and Nicole Van Denabeele as CFO.

Financial highlights

• Net interest margin (FTE) expanded to 3.87% in Q3 2024, up 11 basis points sequentially; net interest income was $89.5 million.

• Non-interest income was $18.4 million in Q3 2024, up $4.4 million sequentially, with YTD non-interest income up 4.7% year-over-year.

• Non-interest expense totaled $64.2 million in Q3 2024, mainly due to technology investments and higher salaries.

• Efficiency ratio (FTE, ex-intangibles) improved to 57.7% in Q3 2024.

• Allowance for credit losses was $95.0 million (1.23% of loans), with net charge-offs of $7.6 million (0.13% of average loans) for the nine months ended September 30, 2024.

Outlook and guidance

• Fourth quarter net interest margin expected to remain in the mid 3.8% range, with non-interest income projected at $16–$18 million and non-interest expense at $64–$66 million.

• Effective tax rate for the full year expected to be 18–19%.

• Management expects to finish the year strong, citing a position of strength and stability entering Q4.

• Maintains a dividend payout ratio target of 30-40%.

• More robust guidance for 2025 to be provided in the next earnings call.