National Bank Holdings Corporation · NYSE:NBHC
National Bank — Q3 2021 Earnings Presentation
38 slides from National Bank's earnings presentation, Oct 20, 2021
Slide 1: Investor Presentation Q3 2021
Investor Presentation Q3 – 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private of changes in accounting policies and practices; the share price of the Company’s stock; the Securities Litigation Reform Act of 1995. Forward-looking statements contain words such as
Slide 3: About Non-GAAP Financial Measures
About Non-GAAP Financial Measures Certain of the financial measures and ratios we present, including “average tangible assets,” substitute for financial information presented in accordance with GAAP and you should not rely “return on average tangible assets,” “average tangible common equity,” “retur
Slide 4: Table of Contents
Table of Contents Financial Performance 08 Credit 14 Balance Sheet 18 Management Team 22 Corporate Governance Overview 25 Appendix 33
Slide 5: Attractive Markets / Company Highlights
Attractive Markets Headquarters Company Highlights Denver, CO Banking Centers(1) 81 Listing NYSE: NBHC Balance Sheet 3Q21 Total Assets (mm) $7,101 Total Loans (mm) $4,422 Total Deposits (mm) $6,135 Key Ratios YTD21 Common Equity Tier 1 14.6% Tier 1 Leverage 10.4% ROATA(2)(3) 1.39% 40 banking centers
Slide 6: Recent Recognition
Recent Recognition U.S. News: Best Places to Live Rankings Fortress Balance #1 Sheet Largest Publicly Traded Bank HQ’d in Colorado #1 and #5 Robust Profitability Boulder, CO and Austin, TX Market Presence in Top 5 Best Places to Live(1) Positioned in #3 Attractive Markets Colorado Market Share
Slide 7: Shareholder Returns
Shareholder Returns Total Shareholder Returns Since 2017 (Through 9/30/2021) Historical Dividend Per Share CAGR: 38% $0.80 50% $0.75 $0.65 40% $0.54 35.1% 30% $0.34 23.2% $0.22 20% 10% 2016 2017 2018 2019 2020 YTD21 0% (10%) Dividend Payout Ratio Target (20%) (30%) (40%) 30 - 40% NBHC KRX Regional B
Slide 8: Financial Performance
Be National Bank Holdings Financial Performance
Slide 9: Q3 2021 Financial Highlights
Q3 2021 Financial Highlights Capital Ratios Announced strategic investments in Finstro Global Holdings, Inc. and 14.6% Common Equity Tier 1 Ratio Figure technologies Liquidity Loan to deposit ratio of 72.1% Grew loans 16.5% annualized over 2Q21 Net Income $70.8 million YTD Record loan originat
Slide 10: Profitable Steady Growth
Profitable Steady Growth Net Income $88.6 Pre-Provision Net Revenue FTE(1) EPS (Fully Diluted) $2.85 ($ in millions) ($ in millions) $132.1 $2.55 $80.4 Non-Adjusted Adjusted Non-Adjusted $112.9 $2.27 $67.8 $70.8 $2.16 Adjusted $0.21 $6.3 $83.4 $81.3 $1.26 $35.0 $53.7 $54.7 $1.95 $61.5 $0.79 $0.73 $2
Slide 11: Growth Trends
Growth Trends Total Assets Total Loans Tangible Common Equity(1) ($ in billions) ($ in billions) ($ in millions) $7.1 Non-PPP Loans PPP Loans $6.7 $732.9 $4.4 $4.4 $4.4 $707.3 $0.2 $0.1 $5.9 $4.1 $651.4 $5.7 $577.4 $553.3 $4.8 $4.7 $4.6 $3.2 $478.9 $482.0 $2.9 $4.3 $2.6 $4.2 YE15 YE16 YE17 YE18 YE19
Slide 12: Focus On Efficiency
Focus On Efficiency FTE efficiency ratio of 64.0% We have consolidated or sold 48 banking centers, or 47%, since 4Q11 Banking Center Roll-forward +2 + 24 103 - 48 81 Banking Centers Consolidations / 4Q11 M&A(1) Opened Closures 3Q21 (1)Includes our Peoples acquisition completed on January 1, 2018
Slide 13: Regulatory Capital
Regulatory Capital Capital Ratios – 3Q21 $379 million in excess capital over 7.0% common equity tier 1 risk- TIER 1 LEVERAGE 10.4% based regulatory requirement COMMON EQUITY TIER 1 RISK-BASED 14.6% Double-leverage ratio just 87.4% TIER 1 RISK-BASED 14.6% TOTAL RISK-BASED 15.5% Holding company
Slide 14: Credit
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Slide 15: Uniquely Diversified $4.3 Billion Loan Portfolio
Uniquely Diversified $4.3 Billion Loan Portfolio(1) Concentrations Granular and Well-Diversified Loan Portfolio Consumer 16% Self-imposed concentration limits ensure a granular and diverse loan portfolio and C&I and Owner protect against downside risk to any particular industry or real estate sect
Slide 16: Strong Credit Quality History
Strong Credit Quality History Allowance for loan losses coverage equal to 383% of non-performing loans Acquisition fair value marks on acquired loans total $7.7 million, 4.2% of acquired loans or 0.2% of total loans Non-performing Loans Non-performing Asset Composition ($ in millions) 0.60% 0.49
Slide 17: Allowance For Credit Loss
Allowance For Credit Loss Allowance to total loan coverage of 1.11% provides coverage for economic uncertainty ACL/Total Loans 1.11% ACL/Total Loans 1.02% $49.2 $44.9 ACL(1) ACL(1) 1/1/2020 9/30/2021 All dollars in millions (1)Investment securities portfolio consists of U.S. agency mortgage backed
Slide 18: Balance Sheet
B® National Bank Holdings CORPORATION" Balance Sheet
Slide 19: Solid Loan Growth
Solid Loan Growth Total Loan Originations(1) Non-PPP Loan Originations Loan Composition ($ in billions) ($ in millions) ($4.4 Billion) $1.3 $413.3 $1.2 $1.2 $1.2 $362.1 Owner Occupied $1.0 $1.0 CRE $0.9 17% $272.5 C&I CRE $173.1 51% 15% $132.8 Resi Mortgage 14% FY15 FY16 FY17 FY18 FY19 FY20 3Q21 TTM
Slide 20: High Quality, Highly Liquid Investment Portfolio
High Quality, Highly Liquid Investment Portfolio $1.3 Billion Investment Portfolio(1) 0.2% 99.8% of portfolio is U.S. agency/sponsored U.S. Agency/Sponsored Agency agency backed MBS 3Q21 yield of 1.48% 42.8% U.S. Agency/Sponsored Agency 49% of portfolio in Held-to-Maturity 57.0% CMO Zero all
Slide 21: Low Cost Transaction Deposits
Low Cost Transaction Deposits Growing Low Cost Transaction Accounts Deposit Composition ($ in billions) Demand & NOW Savings & MM CDs < $250k CDs >= $250k Total Average Transaction Deposits Average Time Deposits $5.1 $4.5 $4.7 $5.7 $6.1 100% 3% 3% 3% 2% $4.2 14% 12% 21% 19% $3.5 $3.6 36% 37% 37% 37%
Slide 22: Management Team
B® National Bank Holdings CORPORATION Management Team
Slide 23: Experienced Management Team
Experienced Management Team Tim Laney Aldis Birkans Chairman, President & CEO Chief Financial Officer (40 years in banking) (23 years in financial industry) • Head of Business Services at Regions Financial, where he also led the transformation of • Senior Vice President, Treasurer at NBHC wholesale
Slide 24: Management & Directors
Management & Directors Beneficial Ownership (as of 9/30/21) NBHC MANAGEMENT & DIRECTORS BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS(2) G. Timothy Laney 555,620 1.82% Aldis Birkans 52,904 0.17% Richard U. Newfield, Jr. 182,698 0.60% Angela Petrucci 12,813 0.04% Ralph W. Clermont 82,174 0.27% Robert E. D
Slide 25: Corporate Governance
Be National Bank Holdings Corporate Governance
Slide 26: Best Practices In Governance and Compensation
Best Practices In Governance and Compensation NBHC’s corporate governance policies and executive compensation practices support our business and align with best practices Corporate Governance Executive Compensation Lead Independent Director with robust role and responsibilities Provide the major
Slide 27: NBHC Board of Directors
NBHC Board of Directors G. Timothy Laney Robust Lead Director President, CEO and Chairman Former Sr Executive VP & Head of Business Responsibilities Services at Regions Financial 24-year tenure at Bank of America, and a member of Bank of America’s Management Operating Committee Mr. Clermont
Slide 28: NBHC Board Represents a Diverse Range of Qualifications and Skills
NBHC Board Represents a Diverse Range of Qualifications and Skills Experience or Number of Directors Expertise CEO or President of Private or Public 5 Company Experienced leaders Other Public Board capable of Experience 4 overseeing execution and challenging management Financial or Audit Background
Slide 29: Board's Role in Oversight of Risk
Board’s Role in Oversight of Risk The Board is actively engaged in NBHC’s risk management. Robust Risk Oversight at Board Level Risk Board Oversight Actions Cybersecurity NBHC Audit and Risk Committee is responsible for oversight Employs detection and response mechanisms designed to Evolving nature
Slide 30: Overview of NBH Bank Board of Directors
Overview of NBH Bank Board of Directors In addition to the NBHC Board, there is an added layer of oversight through the Board of Directors of NBH Bank, NBHC’s wholly-owned subsidiary NBH Bank Board Composition Aldis Birkans Christopher Randall Chief Financial Officer EVP, Commercial, Specialty and B
Slide 31: Executive Compensation Program
Executive Compensation Program NBH’s executive compensation practices align management incentives with long-term shareholder interests Components of Executive Compensation (2020) Compensation Metrics Tied to Long-Term Strategy Component Metrics Link to Strategy Base Salary • Reviewed annually • Amon
Slide 32: Environmental, Social and Governance (ESG) Matters
Environmental, Social and Governance (ESG) Matters NBH’s long-standing commitment to ESG in all of its business activities Committed to using environmentally friendly office products and materials and optimizing our office and banking center space. Environmental Continued investment in our mobil
Slide 33: Appendix
B= National Bank Holdings CORPORATION" Appendix
Slide 34: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ in millions, except per share) As of and for the nine months ended As of and for the years ended Return on Average Tangible Assets and Return on Average Tangible Equity 30-Sep-21 31-Dec-20 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16 31-Dec-15 Net income $ 70.8 $ 88
Slide 35: Reconciliation of Non-GAAP Measures (cont'd)
Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except per share) As of and for the years ended Adjusted Financial Results 31-Dec-18 31-Dec-17 Adjustments to net income: Net income $ 61.5 $ 14.6 Adjustments (1) 6.3 20.4 Adjusted net income (non-GAAP) $ 67.8 $ 35.0 Adjustments to earning
Slide 36: Reconciliation of Non-GAAP Measures (cont'd)
Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except per share) As of and for the nine months ended As of and for the years ended Efficiency Ratio 30-Sep-21 31-Dec-20 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16 31-Dec-15 Net interest income $ 137.7 $ 192.9 $ 205.8 $ 197.4 $ 146.3 $ 145.6
Slide 37: Reconciliation of Non-GAAP Measures (cont'd)
Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except per share) As of and for the nine months ended As of and for the years ended Tangible Common Book Value Ratios 30-Sep-21 31-Dec-20 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16 31-Dec-15 Total shareholders' equity $ 844.7 $ 820.7 $ 766.9
Slide 38: Thank you.
B® National Bank Holdings CORPORATION Thank you.
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