Third quarter 2026
Filed Oct 27, 2026NBHC reported a third-quarter net loss driven by $40.6 million of provision expense on specifically identified commercial credits, while net interest margin expanded and deposits grew.
Third-quarter GAAP net loss was $ (8,761), or $ (0.20) per diluted share, versus net income of $ 26,490 in the prior quarter and $ 35,285 a year earlier. Elevated credit costs, including $ 40,635 of provision expense and $ 47,208 of charge-offs, outweighed margin expansion, loan growth and deposit growth.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net (loss) income, three months ended September 30, 2026GAAP | −$8.76M | – | – |
| Adjusted net income, three months ended September 30, 2026non-GAAP | $2.94M | – | – |
| (Loss) earnings per share - diluted, three months ended September 30, 2026GAAP | $ (0.20) | – | – |
| Adjusted earnings per share - diluted, three months ended September 30, 2026non-GAAP | $ 0.06 | – | – |
| Net interest income, three months ended September 30, 2026GAAP | $112.9M | – | – |
| Net interest income FTE, three months ended September 30, 2026non-GAAP | $115.2M | – | – |
| Net interest margin, three months ended September 30, 2026GAAP | 3.92% | – | – |
| Net interest margin FTE, three months ended September 30, 2026non-GAAP | 4.00% | +6 basis points | – |
| Provision expense for credit losses, three months ended September 30, 2026GAAP | $40.63M | – | – |
| Total non-interest income, three months ended September 30, 2026GAAP | $13.54M | – | – |
| Total non-interest expense, three months ended September 30, 2026GAAP | $97.79M | – | – |
| Adjusted non-interest expense, three months ended September 30, 2026non-GAAP | $82.60M | – | – |
| Efficiency ratio FTE, three months ended September 30, 2026non-GAAP | 75.98% | – | – |
| Adjusted efficiency ratio FTE, three months ended September 30, 2026non-GAAP | 62.28% | – | – |
| Pre-provision net revenue FTE, three months ended September 30, 2026non-GAAP | $30.92M | – | – |
| Adjusted pre-provision net revenue FTE, three months ended September 30, 2026non-GAAP | $46.11M | – | – |
| Return on average assets, three months ended September 30, 2026GAAP | (0.28)% | – | – |
| Return on average tangible common equity, three months ended September 30, 2026non-GAAP | (2.32)% | – | – |
| Adjusted return on average tangible common equity, three months ended September 30, 2026non-GAAP | 1.62% | – | – |
| Net income, nine months ended September 30, 2026GAAP | $38.52M | – | – |
| Adjusted net income, nine months ended September 30, 2026non-GAAP | $70.86M | – | – |
| Earnings per share - diluted, nine months ended September 30, 2026GAAP | $ 0.84 | – | – |
| Adjusted earnings per share - diluted, nine months ended September 30, 2026non-GAAP | $ 1.56 | – | – |
| Net interest income FTE, nine months ended September 30, 2026non-GAAP | $337.7M | – | 26.0% |
| Net interest margin FTE, nine months ended September 30, 2026non-GAAP | 4.00% | – | +5 basis points |
| Provision expense for credit losses, nine months ended September 30, 2026GAAP | $46.13M | – | – |
| Total non-interest income, nine months ended September 30, 2026GAAP | $51.28M | – | – |
| Total non-interest expense, nine months ended September 30, 2026GAAP | $289.6M | – | – |
| Loans, September 30, 2026GAAP | $9.89B | 1.2% | 33.2% |
| Total deposits, September 30, 2026GAAP | $10.55B | – | – |
| Allowance for credit losses, September 30, 2026GAAP | $109.9M | – | – |
| Annualized net charge-offs to average total loans, three months ended September 30, 2026other | 1.88% | – | – |
| Non-performing loans to total loans, September 30, 2026other | 0.44% | – | – |
| Allowance for credit losses to total loans, September 30, 2026other | 1.11% | – | – |
| Common book value per share, September 30, 2026GAAP | $ 36.71 | – | – |
| Tangible book value per share, September 30, 2026non-GAAP | $ 25.37 | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
fourth quarter outlook
- Notetarget of a dollar plus of earnings per share in the fourth quarter
Capital returns
- NBHC executed $11.9 million of share buybacks in the third quarter.
- Common stock dividend was $ 0.32 for the three months ended September 30, 2026.
- Common stock dividend was $ 0.96 for the nine months ended September 30, 2026.
What drove it
- 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 during the third 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.
- Average total deposits increased $96.0 million to $10.3 billion, while average transaction deposits increased $102.9 million to $9.0 billion.
- Loans increased $119.4 million, or 4.9% annualized, to $9.9 billion at September 30, 2026; quarterly loan fundings were $819.3 million.
- Adjusted non-interest expense decreased $1.1 million to $82.6 million from $83.7 million, reflecting operational synergies following the successful third-quarter integration of Vista's core systems.
Concerns
- Provision expense was $40.6 million, compared to $1.5 million, primarily from write downs on specifically identified commercial loans in the franchise and healthcare industries.
- Charge-offs were $47,208 in the third quarter, and the annualized net charge-offs to average total loans ratio was 1.88%.
- Non-performing loans rose to $43,917, or 0.44% of total loans, from $30,131, or 0.31%, at June 30, 2026.
- Other non-interest income included a $4.0 million impairment on a third-party FinTech partnership investment classified within other securities.
- Third-quarter non-interest expense included $15.2 million of acquisition and restructuring related expenses and $1.4 million of OREO and problem loan expenses.
What to watch
- Whether provision expense and charge-offs normalize after the specifically identified franchise and healthcare credit events.
- Fourth-quarter progress toward management's target of a dollar plus of earnings per share.
- Asset-quality trends, including non-performing loans, non-performing assets and the allowance for credit losses to total loans.
- Execution of operational synergies after Vista's core-system integration.
- The planned mid-2027 sale of the Palm Beach, Florida banking center, which is expected to reduce total assets, total loans and total deposits by approximately $0.2 billion each and provides for a deposit premium of 5.00%, subject to a minimum deposit premium of $8.8 million.
Balance sheet and cash flow
- Cash and cash equivalents were $ 364,798 at September 30, 2026, compared to $ 380,696 at June 30, 2026.
- Total assets were $ 12,727,140 at September 30, 2026, compared to $ 12,586,136 at June 30, 2026.
- Long-term debt was $ 201,884 at September 30, 2026, compared to $ 202,003 at June 30, 2026.
- Federal Home Loan Bank advances were $ 125,000 at September 30, 2026, unchanged from June 30, 2026.
- Total shareholders' equity was $ 1,625,897 at September 30, 2026, compared to $ 1,669,104 at June 30, 2026.
- The tier 1 leverage ratio was 10.00%, and the common equity tier 1 risk-based capital ratio was 11.69% at September 30, 2026.
Analysis
NBHC's third-quarter result was dominated by credit costs. The company reported a GAAP net loss of $ (8,761), or $ (0.20) per diluted share, compared with net income of $ 26,490, or $ 0.58 per diluted share, in the second quarter and net income of $ 35,285, or $ 0.92 per diluted share, a year earlier. Provision expense was $ 40,635, compared with $ 1,500 in the preceding quarter, following write downs on specifically identified commercial loans, principally in the franchise and healthcare industries. The quarter also included $15.2 million of pre-tax acquisition and restructuring expense and a $4.0 million impairment on a third-party FinTech partnership investment.
Core spread performance improved despite the loss. Net interest income FTE rose to $ 115,172 from $ 111,531 in the prior quarter and $ 90,185 a year earlier. Net interest margin FTE expanded to 4.00% from 3.94% in the second quarter, driven by a nine basis point increase in earning asset yields, while the cost of deposits increased one basis point to 1.94%. Average total deposits increased $96.0 million to $10.3 billion and average transaction deposits increased $102.9 million to $9.0 billion. Loans rose $119.4 million to $9.9 billion, with quarterly fundings of $819.3 million.
Credit indicators deteriorated during the quarter. Charge-offs were $47,208 and the annualized net charge-offs to average total loans ratio was 1.88%, compared with 0.27% in the second quarter. Non-performing loans increased to $43,917, or 0.44% of total loans, from $30,131, or 0.31%, at June 30, 2026. Non-performing assets increased to $48,999, or 0.50% of total loans and OREO. The allowance for credit losses was $109,866, equal to 1.11% of total loans, compared with 1.13% in the preceding quarter.
Expenses remained elevated on a GAAP basis, with total non-interest expense of $ 97,792 versus $ 94,950 in the prior quarter, including $15.2 million of acquisition and restructuring expenses. Excluding acquisition and restructuring expenses, adjusted non-interest expense declined to $ 82,597 from $ 83,725, which management attributed to operational synergies after Vista's core-system integration. The GAAP efficiency ratio FTE rose to 75.98% from 72.32%, while the adjusted efficiency ratio FTE was 62.28% versus 61.81%.
Capital returns continued through $11.9 million of third-quarter share buybacks and a $ 0.32 common stock dividend. However, common book value per share fell to $ 36.71 from $ 37.48 and tangible book value per share fell to $ 25.37 from $ 26.23, which management attributed primarily to the dividend, repurchases and an increase in accumulated other comprehensive loss. Management's forward target is a dollar plus of earnings per share in the fourth quarter. The central issues for the next period are the durability of the margin and deposit gains, the trajectory of criticized credit costs, and delivery of integration-related expense benefits.
Management, verbatim
This was a deeply disappointing quarter. We reported a net loss of $8.8 million, 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.
Tim Laney, Chief Executive Officer
Our margin expansion and deposit growth are positive, and all integration activity has been a success. Our responsibility is to protect the bank while driving to our target of a dollar plus of earnings per share in the fourth quarter.
Tim Laney, Chief Executive Officer
Not in the filing
stated, not guessed- Total revenue was not reported as a separately labeled line item.
- Gross margin was not reported.
- Operating income was not reported as a separately labeled line item.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Reportable segment revenue was not reported.
- Formal quantitative revenue, expense, margin or tax-rate guidance was not reported.
- Previous-release outlook was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.