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GREENWOOD VILLAGE, Colo., July 6, 2019 – Shares of National Bank Holdings Corporation (NYSE: NBHC) gained 0.38% to $36.89. The stock traded total volume of 76.430K shares lower than the average volume of 124.26K shares.
National Bank Holdings Corp. (NBHC) reported first-quarter profit of $18.90M.
First Quarter 2019 Results:
(All comparisons refer to the fourth quarter of 2018, except as noted)
Net income totaled a record $18.90M during the first quarter 2019, or $0.60 per diluted share, contrast to $17.20M during the last quarter, or $0.55 per diluted share. The return on average tangible assets increased 13 basis points to 1.39% and the return on average tangible common equity increased 86 basis points to 13.15%.
Net Interest Income:
Fully taxable equivalent net interest income totaled $52.40M and increased $0.60M, or 4.4% annualized. Fully taxable equivalent net interest margin widened 6 basis points to 4.05% from the prior quarter, driven by a 15 basis point higher earning asset yield, which was partially offset by a 12 basis point higher cost of funds.
Originated loans and attained loans not accounted for under 310-30 (“attained loans”) ended the quarter at $4.20B, increasing $162.00M, or 16.3% annualized, led by originated and attained commercial loan growth of $112.80M, or 17.4% annualized. Total first quarter loan originations were $311.00M, led by commercial loan originations of $201.30M. The fully taxable equivalent yield on originated loans outstanding increased 19 basis points during the first quarter 2019 to 4.88% because of higher new loan yields and increases in short-term market rates.
Asset Quality and Provision for Loan Losses:
Provision for loan losses of $1.50M was recorded during the quarter to support originated loan growth. Annualized net charge-offs on originated and attained loans totaled 0.02%, contrast to 0.06% in the prior quarter. Non-performing originated and attained loans (comprised of non-accrual loans and non-accrual TDRs) were 0.63% of total originated and attained loans, contrast to 0.61% at December 31, 2018. The originated and attained allowance for loan losses was 0.88%, consistent with the prior quarter.
Attained problem loans accounted for under 310-30 totaled $63.50M at March 31, 2019 and reduced $7.40M from the fourth quarter 2018.
Average non-interest bearing demand deposits increased $3.70M, or 1.4% annualized. Average transaction deposits (defined as total deposits less time deposits) reduced $1.90M, driven by a decrease in interest bearing demand, savings and money market deposits of $5.60M. Average total deposits reduced $22.50M to $4.60B, or 2.0% annualized, driven by a decrease of $20.70M in time deposits. The cost of deposits was 0.58%, a boost of 6 basis points from the prior quarter and just 17 basis points over the first quarter last year.
Spot transaction deposits increased $178.30M during the first quarter 2019 to $3.60B at March 31, 2019, improving the mix of transaction deposits to total deposits to 77.1% from 76.2% last quarter. The non-interest bearing demand deposits to total deposits mix improved to 24.9% from 23.6% in the prior quarter and the loan to deposit ratio remained at 90%, consistent with the prior quarter.
Non-interest income totaled $17.10M and increased $1.70M mainly because of higher mortgage banking income of $1.50M, driven by higher levels of 1-4 family mortgage loans sold in the secondary market. Other non-interest income increased $0.80M, mainly because of swap fee income during the quarter, and was mostly offset by a combined seasonal decrease of $0.60M in service charges and bank card fees.
Non-interest expense totaled $44.40M and increased $1.50M from the prior quarter, mainly driven by a $0.90M increase in salaries and benefits because of higher commissions and payroll taxes, $0.50M higher occupancy and equipment expense and $0.30M higher other non-interest expense, partially offset by lower professional fees of $0.60M. Gain on sale of OREO and problem asset workout expense totaled a net expense of $0.80M, a boost of $0.50M from the prior quarter because of the write-down of one OREO property.
Income tax expense totaled $3.40M during both the first quarter 2019 and fourth quarter 2018. Included in income tax expense during the first quarter 2019 was $0.80M of tax benefit from stock compensation activity. Adjusting for the stock compensation activity, the effective tax rate for the first quarter of 2019 would be 18.5% contrast to 16.5% during the fourth quarter 2018. The lower rate contrast to the statutory rate reflects the continued success of our tax strategies and tax exempt income.
(All comparisons refer to the first quarter 2018, except as noted)
Fully taxable equivalent net interest income totaled $52.40M and increased $3.70M, or 7.6%. Average earning assets increased $106.70M, or 2.1%, mainly driven by originated loan growth. The fully taxable equivalent net interest margin widened 21 basis points to 4.05%. The yield on earning assets increased 44 basis points, led by a 56 basis point increase in the originated loan portfolio yields because of higher new loan yields and short-term rate increases, and was partially offset by a boost in the cost of funds of 33 basis points from 0.55% to 0.88%.
Originated and attained loans outstanding totaled $4.20B and increased $593.40M, or 16.5%, driven by a boost in originated loans of $791.30M, or 26.6%. New loan originations between the two periods totaled $1.30B, led by commercial loan originations of $948.20M. The 310-30 loan portfolio declined $48.80M, or 43.4%, to $63.50M at March 31, 2019.
Average non-interest bearing demand deposits increased $50.50M. Total deposits averaged $4.60B, decreasing $36.60M from the first quarter last year, driven by a decrease of $88.70M in time deposits. Spot transaction deposits increased $71.50M, to $3.60B at March 31, 2019, improving the mix of transaction deposits to total deposits to 77.1% from 75.6% in the first quarter last year. The non-interest bearing demand deposits to total deposits mix improved to 24.9% contrast to 23.0% in the first quarter last year.
Provision for loan loss expense was $1.50M, contrast to $41.0K during the first quarter last year. Net charge-offs on originated and attained loans totaled 0.02%, contrast to 0.07% in the first quarter last year. Non-performing originated and attained loans reduced to 0.63% from 0.66% at March 31, 2018. The originated and attained allowance for loan losses totaled 0.88% of total originated and attained loans contrast to 0.85% at March 31, 2018.
Non-interest income was $17.10M during the first quarter 2019, representing a decrease of $0.80M from the first quarter last year, mainly because of $1.00M lower mortgage banking income and $0.30M lower OREO related income. These decreases were partially offset by $0.70M higher other non-interest income because of a boost in swap fee income during the period.
Non-interest expense totaled $44.40M during the first quarter 2019, representing a decrease of $10.90M, mainly driven by $7.60M of acquisition costs during the first quarter of 2018 and efficiencies gained from the integration of the Peoples acquisition.
Income tax expense totaled $3.40M during the first quarter 2019 contrast to $1.70M during the first quarter 2018, a boost of $1.70M. Included in income tax expense was $0.80M and $0.40M of tax benefit from stock compensation activity during the first quarters 2019 and 2018, respectively.
NBHC has the market capitalization of $1.13B and its EPS growth ratio for the past five years was 70.40%. The return on assets ratio of the Company was 1.30% while its return on investment ratio stands at 25.90%. Price to sales ratio was 4.94 while 93.70% of the stock was owned by institutional investors.