8.78% Dividend Growth and a 37.54% Payout Ratio—Is This Regional Bank a Hidden Gem?

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Finding a bank stock with 8.78% dividend growth over the last three years, a 37.54% payout ratio, and nine consecutive years of dividend increases isn’t easy. Most banks either pay out too much of their earnings or struggle to grow dividends consistently. But one regional player has been quietly delivering strong returns while keeping its balance sheet solid.

National Bank Holdings Corporation (NBHC)

Financial Score: 88 / 99

Quick Tip

To keep your portfolio strong, stay on top of the financials for each company you hold. Solid companies mean better returns, so be sure to check in on their quarterly and annual numbers.

The best stocks usually score 80+ on the Financial Scale, with top players hitting 90+. If that score dips below 80, it might be a good time to consider cutting ties before things take a turn.

Enter National Bank Holdings Corporation (NBHC), a Denver-based regional bank that serves businesses and individuals across seven states—Colorado, Kansas, Utah, Wyoming, Texas, New Mexico, and Idaho. While it doesn’t make headlines like the big Wall Street banks, it has been steadily growing and rewarding shareholders. The stock currently offers a 2.68% dividend yield, paying $1.16 annually, and it has plenty of room for further increases.

A Bank That Knows How to Grow

NBHC isn’t just sitting on deposits—it’s expanding. Its most recent earnings report showed $33.1 million in net income, translating to $0.86 per share, with a return on average tangible common equity of 14.84%. This is a strong number for a regional bank, especially given its disciplined lending strategy.

One of the biggest moves in NBHC’s history was its $1 billion acquisition of Bank of Jackson Hole, adding $1.7 billion in assets. This gave the company a significant foothold in high-net-worth banking while strengthening its presence in the Western U.S. With this expansion, total assets now exceed $9.7 billion, a massive jump from just a few years ago.

A Dividend Growth Story That Keeps Going

NBHC has been raising its dividend consistently, with its latest increase bringing the quarterly payout to $0.29 per share. This follows a steady upward trend, with dividend growth averaging 8.78% over the last three years.

Unlike many banks that pay out a significant portion of earnings, NBHC maintains a conservative 37.54% payout ratio, giving it plenty of flexibility to reinvest in growth while continuing to reward shareholders. Given its strong earnings and expansion strategy, there’s no reason this trend can’t continue.

The Balance Sheet Looks Solid

One of the reasons NBHC has been able to maintain consistent dividend growth is its conservative approach to risk. The bank has a high-quality loan portfolio with low charge-offs and a strong capital position. Its efficiency ratio—how well it controls expenses—has remained below 60%, showing solid cost management.

During a time when many banks are dealing with deposit outflows and rising funding costs, NBHC has been able to keep its net interest margin healthy, currently sitting at 3.56%. This is key for sustaining profitability in a higher-rate environment.

Interesting Fact: A Bank That Gives Back

Unlike traditional banks focused solely on profits, NBHC has a strong commitment to community involvement. Through its "Do More" initiative, the company has donated over $1.8 million to local charities and provides employees with paid volunteer time. This not only strengthens customer loyalty but also makes the bank a valuable part of the communities it serves.

The Bottom Line

NBHC is proving that regional banks can be great dividend investments. A 2.68% yield, 8.78% three-year dividend growth, and a 37.54% payout ratio make it a compelling option for income investors. Add in its disciplined management, strong expansion strategy, and consistent profitability, and you have a bank that’s worth a closer look.

This one might not be on your radar, but maybe it should be.

Should You BuyNational Bank Holdings Corporation Now?

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