National Bank (NBHC) Q4 2024 earnings summary

Executive summary

• Q4 2024 adjusted net income was $33.2 million ($0.86 per diluted share), with a 14.4% adjusted return on tangible common equity and tangible book value per share up 11% year-over-year to $25.28.

• Full year 2024 adjusted net income was $123.9 million ($3.22 per share); reported net income was $118.8 million ($3.08 per share).

• Strategic sale of $130 million in investment securities resulted in a $6.6 million pre-tax ($5 million after-tax) loss, with proceeds to be reinvested in higher-yielding assets.

• Strong capital position with CET1 ratio at 13.2% and tangible common equity to tangible assets at 10.16%.

• Average total deposits grew 4.7% year-over-year to $8.3 billion, with a granular, diversified, and largely FDIC-insured base.

Financial highlights

• Q4 net interest income (FTE) was $92 million, up 11.3% annualized, with a net interest margin of 3.99%.

• Q4 non-interest expense was $64.5 million, including $1.2 million in consolidation costs; efficiency ratio (adjusted) improved to 57.0%.

• Loans outstanding totaled $7.8 billion, with Q4 loan fundings of $480 million at a 7.9% weighted average rate.

• Total assets ended the year at $9.8 billion.

• Dividend per share CAGR was 8%, with a payout ratio target of 30-40% of core earnings.

Outlook and guidance

• Projecting mid-single digit loan growth for 2025, with net interest margin expected to remain in the 3.9% range.

• Non-interest income for 2025 projected at $72–$77 million; non-interest expense at $272–$278 million, including $27–$29 million for 2UniFi investments.

• Core bank non-interest expense (excluding 2UniFi) expected to rise 3% in 2025; effective tax rate projected at 19%.

• Expecting to surpass $10 billion in assets in 2025, with combined cash and investment securities to be about 15% of the balance sheet.

• Management targets continued tangible book value growth and maintains a dividend payout ratio of 30-40% of core earnings.