National Bank Holdings in Denver warned that it expects material impairments on specific commercial loans in the third quarter, mostly involving credits in the franchise and healthcare industries.
The company said the affected relationships carry $65 million in outstanding principal. Management is still assessing the remaining collateral and will charge the loans down to their estimated value, an aggregate of $18.2 million. That implies $46.8 million in chargeoffs and a third-quarter provision expense of $38 million to $40 million.
Separately, the company expects a $4 million impairment on one of its fintech partnership investments, held in non-marketable securities. The filing did not identify the fintech.
Collectively, the items should reduce after-tax earnings by $32 million to $34 million, or 72 cents to 76 cents a share.