National Bank Holdings (NBHC)

Regional banking company National Bank Holdings (NYSE:NBHC) fell short of the markets revenue expectations in Q4 CY2025, with sales falling 5.5% year on year to $100.6 million. Its non-GAAP profit of $0.60 per share was 26.6% below analysts’ consensus estimates.

Company Overview

Operating under familiar local brands like Community Banks of Colorado, Bank Midwest, and Bank of Jackson Hole, National Bank Holdings (NYSE:NBHC) operates regional banks across Colorado, Kansas, Missouri, Wyoming, Texas, and other western states, offering commercial, business, and consumer banking services.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

National Bank Holdings competes with larger regional banks like Zions Bancorporation (NASDAQ:ZION), U.S. Bancorp (NYSE:USB), and BOK Financial (NASDAQ:BOKF), as well as local community banks throughout its western and midwestern markets.

Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income. Unfortunately, National Bank Holdings’s 4.4% annualized revenue growth over the last five years was sluggish. This was below our standard for the banking sector and is a rough starting point for our analysis.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. National Bank Holdings’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 1.6% annually. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, National Bank Holdings missed Wall Street’s estimates and reported a rather uninspiring 5.5% year-on-year revenue decline, generating $100.6 million of revenue.

Net interest income made up 79.6% of the company’s total revenue during the last five years, meaning lending operations are National Bank Holdings’s largest source of revenue.

Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.

Topline growth carries importance, but the overall profitability behind this expansion determines true value creation. For banks, the efficiency ratio captures this relationship by measuring non-interest expenses, including salaries, facilities, technology, and marketing, against total revenue.

Investors place greater emphasis on efficiency ratio movements than absolute values, understanding that expense structures reflect revenue mix variations. Lower ratios represent better operational performance since they show banks generating more revenue per dollar of expense.

Over the last five years, National Bank Holdings’s efficiency ratio couldn’t build momentum, hanging around 60.7%.

In Q4, National Bank Holdings’s efficiency ratio was 70.6%, falling short of analysts’ expectations by 985 basis points (100 basis points = 1 percentage point).

For the next 12 months, Wall Street expects National Bank Holdings to rein in some of its expenses as it anticipates an efficiency ratio of 58.2%.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

National Bank Holdings’s flat EPS over the last five years was below its 4.4% annualized revenue growth. However, its efficiency ratio didn’t change during this time, telling us that non-fundamental factors such as interest and taxes affected its ultimate earnings.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For National Bank Holdings, its two-year annual EPS declines of 9.7% show its recent history was to blame for its underperformance over the last five years. These results were bad no matter how you slice the data.

In Q4, National Bank Holdings reported adjusted EPS of $0.60, down from $0.86 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects National Bank Holdings’s full-year EPS of $3.03 to grow 21%.

Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.

This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. EPS can become murky due to acquisition impacts or accounting flexibility around loan provisions, and TBVPS resists financial engineering manipulation.

National Bank Holdings’s TBVPS grew at a mediocre 4.1% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 11.3% annually over the last two years from $22.45 to $27.80 per share.

Over the next 12 months, Consensus estimates call for National Bank Holdings’s TBVPS to grow by 5% to $29.18, lousy growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, National Bank Holdings has averaged a Tier 1 capital ratio of 13.5%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.

Over the last five years, National Bank Holdings has averaged an ROE of 9.9%, uninspiring for a company operating in a sector where the average shakes out around 7.5%.

We struggled to find many positives in these results. Its revenue missed and its net interest income fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 2.5% to $39.04 immediately following the results.

Updated: January 27, 2026 at 4:41 PM EST

Before investing in or passing on National Bank Holdings, we urge you to understand the company’s business quality (or lack thereof), valuation, and the latest quarterly results - in that order.

We see the value of companies driving economic growth, but in the case of National Bank Holdings, we’re out. First off, its revenue growth was weak over the last five years. And while its estimated net interest income growth for the next 12 months is great, the downside is its weak EPS growth over the last five years shows it’s failed to produce meaningful profits for shareholders. On top of that, its estimated sales for the next 12 months are weak.

National Bank Holdings’s P/B ratio based on the next 12 months is 1x. While this valuation is fair, the upside isn’t great compared to the potential downside. There are superior stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $45.75 on the company (compared to the current share price of $39.04).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.