NBHC - Earnings call transcript Q4 2024 | National Bank Holdings Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, everyone, and welcome to the National Bank Holdings Corporation 2024 Fourth Quarter Earnings Call. My name is Anna, and I will be your conference operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I will now turn the call over to Emily Gooden, Chief Accounting Officer and Director of Investor Relations.

Emily Gooden

Thank you, Anna, and good morning.

call remarks today's question-and-answer by begin session. will with followed prepared a We to this expense. statements you contain would allowance, net remind I like income, noninterest that strategy, deposits, including, margins, not interest income, company's and forward-looking but conference limited the to, noninterest regarding taxes loans, capital, statements, will call

recent U.S. are are risks, uncertainties most and Actual results those from the of to National the obligation the Corporation statements these Exchange materially filings speak only These more with discussed revise no Securities Commission. today. in this statements. factors, subject which and disclosed as could differ These undertakes to in detail forward-looking or statements of Bank other date update company's and call, Holdings

today Bank section Investor reference which in are information will measures, the financial these useful provides measures release call Holdings the believes investors. to posted non-GAAP National Relations Reconciliations for of provided of news measures www.nationalbankholdings.com. non-GAAP certain addition, In GAAP Corporation the the on

is Laney. It Corporation's Mr. to CEO, over call and Chairman Bank the Tim introduce turn National and Holdings my now pleasure

Tim Laney

margin during share annualized for strong XX.X% growth a XX.X% of interest and per the Thank Bank income you, joined return and Aldis Fourth common quarter We Officer, $X.XX Nicole as morning, delivered of Emily. impact Year We joining to with solid the adjusted Full Holdings' pleased results. well XXXX during the the I'm equity interest Quarter X.XX%. a our by we discuss NBH's thanks tangible Chief of when diluted Financial security net earnings us net quarter be delivered for as Good President, as National Birkans, on sales. and Van Denabeele.

Nicole, I Nicole? year common value equity X out the ratio off during XXXX, tangible capital Tier will book point the and with handing exited of we Before XX.X%. call grew XX% that to

Nicole Van Denabeele

Tim. Thank you,

Difficulty] [Technical

Tim Laney

you just I'll Nicole. we sure line, And but apologize. was the ask what to from here. not on take I introducing Well, I'm it Nicole, happened

Nicole Van Denabeele

Thank morning. and you, good Tim,

and does During XXXX with future not financial share I guidance the guidance by the our quarter year full decisions will fourth Consistent the today's and policy call, XXXX. practice, Fed. cover include any our prior rate interest our highlights for for

quarter, per we $X.XX share. $XX.X the of million fourth or net of reported income diluted For earnings

fourth the strategic During first million. sale investment after-tax loss resulted announced $X quarter an $XXX quarter, of million, reinvested of we during The securities approximately the a proceeds in the in securities of securities will higher-yielding from be of sale which XXXX.

the sheet a at management, As $X.X year balance ended billion. assets our of our result total strategic

for earnings increased As with sale diluted X.X% an Tim return adjusting or on shared you, loss, our per the $X.XX common average return on of equity million adjusted $XX.X assets tangible resulted in of XX.X%. an income and adjusted This onetime average tangible share. security of to net

basis, net by a annualized, fully for sale. On XX.X% security linked-quarter of impact grew we again, revenue our taxable the the equivalent adjusting pre-provision onetime after

net or diluted earnings income the million full diluted $X.XX totaled per our sales, the XXXX, for $X.XX share. share. the million of of was net of $XXX.X For year income Adjusting per security impact earnings $XXX.X or

During a book generated by tangible value growth per maintained our interest deposit of and XX%. X.X% net XXXX, margin, we average grew share strong

year our and with new to bankers' loan We the entered solid growing with continue be pleased relationships, to client we commitment pipelines.

decline asset the more basis the repricing loan disciplined a of X quarter of mid-single bankers' efforts our X.XX% margin yields point cost earning in resulted quarter. in points are to expanded the be projecting demand XXXX in to digits. which than loan XX a net XXXX deposits the levels basis growth We in in during XX our strong reduction point Fully interest offset equivalent taxable in deposits, anticipate basis during higher and

XX.X% grew income interest million. net equivalent taxable the annualized fully quarter to $XX during result, a As

earlier, XXXX, our for the taxable in project in projections. As And mind, equivalent with fully do incorporate I that changes in mentioned to not remain X.Xs. we rate interest net future we interest margin

quality. credit to Turning

remains ratio total of at XX peer points nonperforming outstanding. loans below averages Our basis loan

ratio down during was and primarily of CECL driven the of by charge-offs basis points one just quarter, modeling or credit the points charged the as a expense reserved approach. increase resulting total We XX requirements provision of XX previously The quarter year. for result The net X.XX%, in $X prior to in quarter. basis consistent at our with quarter's loans an the loan for ended growth the allowance quarter annualized million the quarter's reserve

million to entire an hold included security the sales. loan if additional income of noninterest was acquired XX loan Total $X.X $XX.X fourth points and basis adds against pretax loan investment coverage our marks applied the across portfolio. of $XX million the continue We for of portfolio, losses quarter on which million loss

million. $XX.X For totaled quarter million XXXX, centers. for be million included consolidation Noninterest we banking $XX project the fourth our income total million from $XX the range to noninterest in of $X.X impairment expense of X the to of and

million basis. $XX of million noninterest to totaled in to be $XXX XUniFi. well Excluding XXXX's million is projected million investment in includes included and XUniFi $XXX of decreased year million expenses. $XXX and noninterest linked-quarter and expense $X.X $XX on the managed million $XX Noninterest approximately the XXXX to a for were full million expense range impairment, of expenses

assets. In XUniFi future expense in the includes rate. increase an and provide bank's effort additional run year-over-year onboarding out core remarks, visibility, the expense we'll amortization from the developers of the XUniFi of The in to capitalized investment my additional break the in

expenses, core Excluding the X% XUniFi-related increase bank in projected to XXXX. increase is noninterest expense in

excluding for to benefited from related XXXX, XX.X% and effective tax development full credits The tax and research tax XUniFi excess benefits, rate build-out. year the was

rate XX%. We project effective tax XXXX's to around be

our ratio diluted of of project XX.X capital during XX.X%. shares with quarter TCE X XX.X%, common capital In to strong million our a terms equity share Tier ratio remain XXXX. in X of we to XX.X% outstanding Tier ended excess leverage We around and management, grow a continue of the ratio and count

With that, will over to turn I it Aldis.

Aldis Birkans

Nicole, good morning. and thanks, Well,

growth Our income leverage strong our credit, management. disciplined results low-cost were and the proactively through funding expense operating fee with loan deposits, driven on positive managing creating our this quarter by diversifying focus

already and strong investment year. our mentioned, to reposition the liquidity the our total another balance thus allowed keep Durbin portfolio deposits to capital below and billion Cambr us levels postponing impact Nicole utilize by As mark, sheet $XX

security total billion portfolio balance Having loan both of combined beyond and in XX% used said to we around settle add driven that, by in loan that for sheet Nicole grow investment XXXX project the the our investment already increases. growth. the I'll provided to cash goal guidance And total just for $XX XXXX. solid assets, balances and

terms the totaled of the in loan In loan million, $XXX the was history. among fundings recap, company's quarter the fourth quarters production which highest strong quarter's during a

However, -- vibrant good experienced levels is excuse footprint our payoffs which we also time vibrant XXXX. a elevated economy economic in activity markets, think reflects for of and, me, the I and

Our line utilization signs their and increased showing returning averages. during quarter are of historical the to

loan drove quarter. to the weighted a decrease of average quarter a points had deposits margin X.XX% which, cost net XX during production rate basis expansion for in of of the the New X.X% total combined with

deposit as strategy. The was highly were target decrease, the Fed confident when is XX% the increasing. measured rate in our fourth quarter's against beta rates of in are deposit which total with the execution We deposit proactive the beta line

to ability ahead deliver growth the in look deposit we as by robust results, strong franchise. to continued of we driven and XXXX, remain our our confident expansion loan core Overall,

Our growth we ensuring disciplined but solid risk remains at balance of the management. to heart approach credit our strategy,

long-term continues banking relationship the on Then you. differentiate our focus for turn value deepen back with to us our I'll and believe creates and engagement that, to it We shareholders. allows our us to client

Tim Laney

solid pleased XXXX year. the we're with Aldis. to you, a seeing we business as our and up believe level We're Well, has we're of shared, footings. Thank have and Aldis nice in markets, Nicole set entered we on activity

marketplace future is Our quarter, XUniFi operating testing began seeing. and build of team banking continues team the we time in We the within and what fourth and like user the we're the on budget. progressing to

with continue to strategic optionality. solid markets. of And actions to should believe advantage M&A base take on shareholder-friendly Finally, to a we and come focused of place well of remain we positioned a We maintaining we're premium fruition. capital, a they on range

our on up operator questions. to I'll ask open the that line of note, And

Operator

with now [Operator from a We'll take question Payne Davidson. D.A. Ryan Instructions]

Ryan Payne

on Payne for today. Ryan Jeff Rulis

there? On the competitive any loan particular front, environment you're are And areas targeting the this year? you seeing changes any in

Aldis Birkans

think competitive I No, comparative already. into late XXXX the environment going has been

bit So activity. of into we we're a changes not in any projecting see seeing necessarily do quite next going we're year,

payoffs I in paydowns, of terms or by As mentioned, active.

credit we a business. is feel do good and looking generation like So economic do there to or people

Tim Laney

ourselves deem months, given -- in Yes, XX seeing I we've And a as from what I we the more credit. rational ourselves if with on stress even pride the in just putting competitor would and say, even become more rational anything, add say, last pretty the were would uncertainty around I seen would standpoint, competitors. market are markets we to we

So you for we've I got think run. what that's

Ryan Payne

Got it.

And in certain rise NPAs there is that the the Okay. or on front, there caused credit relationship a segment?

Tim Laney

I a would we've way space the about to in question the -- is to concern, address particular. your that. we weakness represented exposure, maybe previously and industry be see the area continue I been to if Well, think of it point noted, to follow were it to that's if as one I transportation think way segments I That's in source

that, in dollar said exposure represents our actually seen a outstandings. small Now than other that would I'll clean that was And we've that one recent previous And activity point of frankly, that having acquisitions. of the working less total to transportation originated I our you tell space we're also is out that X% is exposure then up. in

Ryan Payne

it. Got

this the that Did last $XX Was thing for on I Okay. hear for me this expenses XUniFi year. million? plan right? And

Nicole Van Denabeele

Yes, a $XX range $XX to million. million that's of gave correct. I

Operator

that question with Driscoll from now We'll take KBW. Charlie

Unknown Analyst

for Motta. is This Charlie on Kelly

on nice On those update look into the deposits betas as and the saw some relief. Any XXXX? side, we about funding competition thinking

Aldis Birkans

the we investment effort accommodate mention in on sale the I'll paydown proactively took on move just the have that luxury component the the deposits for And down sheet balance off. year-end. on and on Again, our portfolio Cambr having -- we quarter and balance Yes. deposits. for an to Cambr

the to of about was you can half in we average actually, an grew basis, exclude that If were $XX core million, $XX see million deposits DDA. was and

here in that going and we feel deposit XXXX. there. good So our and about activity core continues growth

Tim Laney

I team Charlie, about to deposit difference. would last discipline business on a but the making the our and in that activity quarter we I'm clients. courage very proud over of with terms is good Yes. pricing And level obviously the of treasury pricing our discipline so, took feel management or deposit it add of our act

Unknown Analyst

considerations your of is threshold? around the Can you expense billion. drag you $XX grow Makes said us absorb you from for sense. you other And as impact then plan Durbin? the size remind And well? think what through the was billion could to maybe $XX then to be any And XXXX what able

Tim Laney

beyond a would the high and we it expect fortunate Look, X we've talked of year as in frankly, to area. year, impact over million way years, roughly the that we're simply is quickly $X the X the not We, 'XX. have this $XX process, of about course in in X expense that a charge avoided through a move assets. our pushing $XX next consumer managed billion exposure Durbin Durbin I've result ultimately do million we year into

And so growth. through with managing that organic impact we're, frankly, just

Unknown Analyst

scale to question, and approaching I Awesome. strategy a organic update how mentioned an your And just if last provide be and then acquisition priorities. know fast you're get could maybe any pace Durbin of could growth, you hit, was capital there wondering but you the to way on one absorb possible I like conversations my

Tim Laney

Charlie. Yes,

thing initial years, day started our a but would X Your when billion our charter question one. were OCC, over we building is important that when provide for examined in -- can't we that out processes regional details, billion company, one the the bank the and initial is been last though obviously, assets to we out $XX regulator, think as we now point we begin because I required we us $XX we've received were

dilute to painful, billion, it's Could Durbin so don't manageable. -- was given it's legacy that And we pain, expect we've crossover, approached help actually a made other insignificant. major we as was we've any infrastructure should very acquisition that but place. that in indication no got crossover $XX related that yes, impact, While expenses that the that there's expect

that would focused we on share and mean activity. drive cultures views are banking, We're toward that M&A let still and front. strategic not we partners I very that relationship on constructive having conversations similar

Operator

with [Operator Instructions] our We'll from Sandler. question now Andrew take next Liesch Piper

Andrew Liesch

correct? it, XXXs. just Is in missed margin I that say guide, the Nicole, the near

Nicole Van Denabeele

correct, is that Andrew. Yes,

Andrew Liesch

it. in of Why rate full little in known the last there. XX I improvement you've on hikes and here help higher quarter? November, you push first Got guess had the the some effect the even bp funding nice a costs quarter bit margin wasn't

Aldis Birkans

is component lower adding loan to Yes. and back in of I'll yield That's on take costs the certainly other portfolio, that's that. the actual a Aldis, tendency terms question, than in remember, the This good thinking funding be a investment here the a Andrew. to at typical repositioning which and relation -- book. comes

And XXs. so increases call kind that overcoming numerator increase sheet the adding money -- more the it, of while are of in balance that terms denominator overall overall in nominal keeping sorry, and NIM we then earning

Andrew Liesch

Got it.

react? margin benefit is more first Okay. rates Fed. sheet Even get positioned up? That I balance now it some for right we from asset be do a slight some would makes the mean the guess, sense. before catching so, the do there's I changes? how at any maybe rate how expect Would you if

Nicole Van Denabeele

Yes the our neutral, balance so movements down believe any impact model up and not securities sheet we our margin. adjusting that sale, of for we be impact or interest to close rate asset we're our very future should -- to

Andrew Liesch

it. Got

let's Okay. excluding you the and X% this That's helpful. see -- it that the did growth, was for on year? just then And very Cambr expense say

Nicole Van Denabeele

noninterest expense we're you strip increase core the The I XUniFi X%. bank for XXXX impact, if income, holding to provided guidance out the

Andrew Liesch

Got you.

seeing we're revenue I fall then that the to when start family the and launch think had you know recently, And And here how here? bottom some going to line did you do Okay. progress? friends

Tim Laney

partner focus user testing by A and key and integrations, team the Look, on issue one well. resolved issue of report Yes. the to the pleased been going that we the end. has is really can believe be quality and that, I'm month encountered partner that only

certifications. entering users III additional this Apple adding by with be Phase Android of application to end expect we're for the all month, and of We here and our

would year. still should half we're I this but revenue We which expect revenue not the to in the suggest occur begin for forecasting for of second not revenue, are mean publicly the forecasting we year. year, I

Andrew Liesch

helpful. progress. Very Good the hear to it. Got

Tim Laney

dog introduce go. here dogs. don't -- before lovers Andrew, you We're why your you all

Andrew Liesch

conference call your times joined He years. few a the over

Operator

we showing remarks. questions the no at time. now turn Mr. I'm his closing back And call for will further this to I have Laney

Tim Laney

January him because to he will want Well, to I on it's I I solid it the he provided Jeff do was of much. as relates is Rulis wouldn't that XUniFi, if read. Davidson since update worth But you. published D.A. thank XUniFi point out not, actually what wouldn't very believe and this line on I flatter believe was a was X a on

that for good call day. a you, that, with And thank I'll everyone, Have So today. say out. joining

Operator

this And today's conference concludes call.

have company's telephone If great call, a will replay the on website a in and page. and you Thank on to Investor XX to much, you it like the will be the would of listen available this very be approximately Relations hours link day.

now disconnect. You may

National Bank (NBHC) 23 Jan 252024 Q4 Earnings call transcript