National Bank Holdings is taking a $32 million to $34 million hit to earnings in the latest quarter due to impairments related to certain commercial loans and a fintech partnership.
The bank expects to incur impairments on some commercial loans related to certain credit events affecting the third quarter, the company said Thursday. The loans are primarily within the franchise and healthcare industries.
As a result of the write-downs and specific reserves on loans during the quarter, the bank expects to incur an estimated $46.8 million in charge-offs. That will result in a provision expense of $28 million to $40 million during the quarter.
The relationships have an aggregate outstanding principal balance of $65 million and will be reserved or charged down to an estimated aggregate balance of $18.2 million.
In addition to the loan impairments, National Bank expects to recognize a $4 million impairment charge related to one of its fintech partnership investments. The charge will reduce the bank's non-interest income for the quarter.
The impairments are expected to reduce National Bank's after-tax earnings by about $32 million to $34 million, or 72 cents to 76 cents a share, for the quarter ended Sept. 30.
Management is assessing the remaining collateral and will charge down the loans to the estimated value of the remaining collateral.