National Bank Holdings Swings to Loss on Credit Provisions

The Tip Desk · November 8, 2026 · 4 min read

A $40.6 million provision on franchise and healthcare credits produced an $8.8 million third-quarter loss, or $0.20 a share, after $26.5 million of profit in the second quarter.

National Bank Holdings Corporation (NBHC), a community-bank holding company operating more than 90 banking centers across the Mountain West, Texas and Palm Beach, reported a net loss of $8.8 million, or $0.20 a share, for the third quarter of 2026, reversing $26.5 million of net income, or $0.58 a share, in the second quarter.

Chief Executive Officer Tim Laney said the loss was driven primarily by $40.6 million of provision expense tied to a handful of specifically identified commercial credits, mainly in the franchise and healthcare industries. The company also recorded $15.2 million of pre-tax acquisition and restructuring expense and a $4.0 million impairment on a third-party FinTech partnership investment classified within other securities. Fully taxable equivalent pre-provision net revenue was $30.9 million, compared with $36.3 million. Return on average tangible assets was (0.23)%, versus 0.96%, and return on average tangible common equity was (2.32)%, versus 9.70%.

Adjusting for the $15.2 million of acquisition and restructuring items, adjusted net income was $2.9 million, or $0.06 a share, and adjusted fully taxable equivalent pre-provision net revenue was $46.1 million. Adjusted return on average tangible assets was 0.16% and adjusted return on average tangible common equity was 1.62%.

Provision expense of $40.6 million compared with $1.5 million in the prior quarter. The company said the increase was primarily driven by write-downs on specifically identified commercial loans, principally within the franchise and healthcare industries, related to credit events in the third quarter. Non-performing loans were 0.44% of total loans at September 30, 2026, compared with 0.31%, and non-performing assets were 0.50% of total loans and OREO, compared with 0.35%. The allowance for credit losses was 1.11% of loans, compared with 1.13%. Annualized net charge-offs for the nine months ended September 30, 2026 totaled 0.85% of average total loans.

Laney said the company had made personnel and process improvements in those coverage areas and that none of the actions were driven by regulators. He said margin expansion and deposit growth were positive and that all integration activity had been a success. The company is targeting a dollar plus of earnings per share in the fourth quarter.

Fully taxable equivalent net interest income increased $3.6 million to $115.2 million, primarily due to average interest-earning assets growth of $69.9 million and one additional day in the quarter. The fully taxable equivalent net interest margin expanded six basis points to 4.00%, driven by a nine basis point increase in earning-asset yields. The cost of deposits increased one basis point to 1.94%.

Loans increased $119.4 million, or 4.9% annualized, to $9.9 billion at September 30, 2026. Quarterly loan fundings were $819.3 million, led by commercial fundings of $351.2 million. Average total deposits increased $96.0 million to $10.3 billion, and average transaction deposits increased $102.9 million to $9.0 billion. The loan-to-deposit ratio was 93.8%, compared with 94.1%. The mix of transaction deposits to total deposits increased 20 basis points to 88.0%.

Non-interest income totaled $13.5 million, compared with $19.8 million in the second quarter. Other non-interest income decreased $5.9 million and included the $4.0 million FinTech partnership impairment. Mortgage banking income decreased $0.6 million, which the company attributed to the current rate environment. Those decreases were partially offset by a $0.3 million increase in bank card fee income.

Non-interest expense totaled $97.8 million, compared with $95.0 million. Acquisition and restructuring related expenses were $15.2 million in the third quarter and $11.2 million in the second. Excluding those items, adjusted non-interest expense decreased $1.1 million to $82.6 million, compared with $83.7 million. The company said the linked-quarter decrease reflected operational synergies following the third-quarter integration of Vista’s core systems. The fully taxable equivalent efficiency ratio was 76.0%, compared with 72.3%. The adjusted fully taxable equivalent efficiency ratio was 62.3%, compared with 61.8%.

Common book value per share was $36.71 at September 30, 2026, compared with $37.48 at June 30. Tangible book value per share was $25.37, compared with $26.23, which the company said primarily reflected the quarterly dividend, share repurchases and an increase in accumulated other comprehensive loss. NBHC executed $11.9 million of share buybacks in the third quarter. The tier 1 leverage ratio was 10.00% and the common equity tier 1 capital ratio was 11.69%. Shareholders’ equity was $1.6 billion, compared with $1.7 billion.

On October 24, 2026, NBH Bank entered into a definitive agreement to sell its Palm Beach, Florida banking center, including the location’s loans and deposits. The sale is expected to reduce the bank’s total assets, loans and deposits by approximately $0.2 billion each, with a 5.00% deposit premium subject to a minimum of $8.8 million. The bank expects to close in mid-2027.