Financial Data and Key Metrics Changes - The company reported net income of $35.3 million or $0.92 of earnings per diluted share for the third quarter, with adjusted net income increasing 30% annualized over the prior quarter to $36.6 million or $0.96 per diluted share [8][9] - The return on tangible common equity was 14.72%, and the adjusted return on average tangible common equity was 14.7% [5][9] - The fully taxable equivalent net interest margin expanded three basis points during the third quarter to 3.98%, with an annualized growth of 11 basis points compared to the same quarter last year [10][9] Business Line Data and Key Metrics Changes - Loan fundings for the quarter totaled $421 million, bringing total year-to-date loan fundings to $1 billion, with quarterly loan fundings increasing each quarter of 2023 [9][14] - Non-interest income for the third quarter totaled $20.7 million, which is 21% higher than the second quarter and 13% higher than the third quarter of last year [11] - Non-interest expense totaled $67.2 million, including $1.7 million of acquisition expenses and $6.2 million of 2UniFi expenses [12] Market Data and Key Metrics Changes - Total deposits ended the quarter $202 million higher than the prior quarter, with average deposits holding steady at $8.2 billion [11] - The cost of deposits totaled 2.08%, and the total cost of funds was 2.1% [11] - Credit quality improved with a 20% reduction in non-performing loans, now standing at $27 million, and the non-performing loan ratio improved to 36 basis points [10][11] Company Strategy and Development Direction - The company announced a merger with Vista Bancshares, which is expected to close in the first quarter, and management is optimistic about the strategic value of this transaction [6][14] - The company is focused on maintaining pricing discipline and managing loan and deposit pricing to achieve solid margin expansion [9][10] - The launch of 2UniFi is seen as a significant step forward, with plans to provide revenue guidance in the next quarterly earnings call [12][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the quality of new loan production and the strength of new relationships despite headwinds from loan payoffs in the commercial real estate (CRE) portfolio [5][6] - The company anticipates a strong fourth quarter with positive credit quality trends and additional productivity initiatives in place [6][9] - Management noted the competitive landscape in private credit, particularly in the CRE sector, and emphasized the importance of maintaining a disciplined approach to lending [35][56] Other Important Information - The company repurchased 240,000 shares during the quarter, totaling $8.9 million, with a tangible book value per share growing 12% annualized to $27.45 [13] - The company holds $18 million of marks against its acquired loan portfolio, which adds additional loan loss coverage [10] Q&A Session Summary Question: Can you elaborate on the margin and expected impact of rate cuts? - Management indicated that the third quarter's margin was positively impacted by interest and fees recovered, and they are prepared to adjust deposit rates in line with potential Fed rate cuts [22][24] Question: What is the outlook for loan growth given recent paydowns? - Management clarified that the reduction in loan volume was primarily due to heavy payoffs rather than directive paydowns, and they are optimistic about the loan pipeline for the fourth quarter [35][37] Question: How much 2UniFi expenses were incurred in Q3 and what is expected for Q4? - The company incurred $6.2 million in 2UniFi expenses in Q3, with expectations of $7 million-$9 million in Q4 due to increased marketing and variable costs [39][41] Question: What are the opportunities from the Vista acquisition? - Management expressed excitement about the caliber of leadership from Vista and the potential for growth in treasury management and wealth services, emphasizing the integration of best practices [64][66]

Core Viewpoint - National Bank Holdings Corporation reported strong financial results for the second quarter of 2025, with significant increases in net income, earnings per share, and returns on equity, driven by a robust net interest margin and disciplined credit management [3][4]. Financial Performance - Net income for Q2 2025 was $34.0 million, a 40.4% increase from $24.2 million in Q1 2025 [4]. - Earnings per diluted share rose to $0.88 from $0.63 in the previous quarter [4]. - Fully taxable equivalent pre-provision net revenue increased by 14.3% annualized to $43.5 million [4]. - Year-over-year, fully taxable equivalent pre-provision net revenue grew by 19.9% [4]. Return Ratios - Return on average tangible common equity reached 14.18%, up from 10.64% in Q1 2025 [4]. - Return on average tangible assets increased to 1.49% from 1.09% in the previous quarter [4]. - Return on average equity improved to 10.15% from 7.42% in Q1 2025 [4]. Net Interest Income - Fully taxable equivalent net interest income rose to $89.3 million, attributed to one additional day in the quarter [5]. - The net interest margin widened to 3.95%, driven by a three basis point increase in earning asset yields [5]. Loan Portfolio - Total loans amounted to $7.5 billion as of June 30, 2025, with quarterly loan fundings of $322.7 million [6]. - The weighted average rate on new loans was 7.4%, compared to a 6.5% yield on the overall loan portfolio [6]. Asset Quality - The company recorded no provision expense for credit losses, a significant improvement from $10.2 million in the previous quarter [7]. - Annualized net charge-offs were 0.05% of average total loans, down from 0.80% [7]. - Non-performing loans remained stable at 0.45% of total loans [7]. Deposits - Average total deposits decreased by $58.8 million to $8.2 billion during Q2 2025 [8]. - The loan to deposit ratio was 90.5%, slightly down from 90.8% [8]. Non-Interest Income and Expenses - Non-interest income increased by 11.0% to $17.1 million, driven by gains from partnership investments and bank card fees [9]. - Non-interest expenses totaled $62.9 million, reflecting disciplined expense management [10]. Capital Position - The Common Equity Tier 1 capital ratio stood at 14.2%, indicating strong capital growth [3]. - Shareholders' equity increased by $23.2 million to $1.4 billion, primarily due to retained earnings growth [12]. Year-Over-Year Comparison - For the first six months of 2025, net income was $58.3 million, a slight increase from $57.5 million in the same period of 2024 [14]. - Fully taxable equivalent net interest income rose to $177.9 million, with a net interest margin of 3.94% [15].

Core Insights - National Bank Holdings Corporation (NBHC) has announced a strategic partnership with 2UniFi to enhance financial solutions for small and medium-sized businesses in the U.S. [1][2] - The partnership will integrate 2UniFi within Nav's marketplace, which serves over 1 million users, providing access to deposit and lending solutions [1][2] - NBHC has made a $5 million strategic investment in Nav, aiming to empower small business owners with financial health tools [3] Company Overview - National Bank Holdings Corporation operates a network of over 85 banking centers across several states, including Colorado, Kansas, Utah, Wyoming, Texas, New Mexico, and Idaho [4] - The bank focuses on delivering high-quality client service and is committed to stakeholder results through its various banking subsidiaries [4] Nav Technologies Overview - Nav is recognized as the leading credit and financial health platform for small businesses, offering insights into cash flow and credit alongside financing options [6] - The platform allows small business owners to build and manage their business credit and see potential financing qualifications before applying [6] - Nav has raised over $100 million in capital from notable investors, including Goldman Sachs and Kleiner Perkins [6]