National Bank Holdings Corporation · NYSE:NBHC
National Bank — Q3 2019 Earnings Presentation
26 slides from National Bank's earnings presentation, Nov 25, 2019
Slide 1: Q3 2019 Investor Presentation
Q3 – 2019 INVESTOR PRESENTATION
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS 2 This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contain words such as “anticipate,” “believe,” “can,” “would,” “should,” “could,” “may,” “predict,” “seek,” “pot
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,” “return on average tangible assets,” “average tangible common equity,” “return on average tangible common equity,” “non-interest expense to average assets, adjusted,” “adju
Slide 4: Company Overview
4 COMPANY OVERVIEW
Slide 5: Company Highlights
COMPANY HIGHLIGHTS 5 • Effective execution of client-centered and relationship- based strategies focused on small-to-medium sized businesses and individuals. • Highly granular, well diversified loan portfolio - well positioned to absorb stress while providing excellent risk-adjusted returns. • Attra
Slide 6: Effective Coverage in Attractive Markets
EFFECTIVE COVERAGE IN ATTRACTIVE MARKETS 6 ..46 banking centers ‒Overland Park, KS - central hub for the #1 county in Kansas by household income and projected population growth(2) ‒Kansas City, MO #11 Best City for Jobs (CBS MoneyWatch) ‒Overland Park, KS #11 on “2018 Top 100 Best Places to Live” (L
Slide 7: Our Markets Outperform National Averages
U.S. Denver, CO CO Front Range Kansas City, MO Salt Lake City, UT Dallas/Austin, TX 2019 Population (mm) 329.2 3.0 4.7 2.2 1.2 9.8 Projected Population 5yr CAGR ('19-'24E) 0.7% 1.4% 1.4% 0.7% 1.3% 1.5% 2019 Median Household Income $63.2K $78.3K $75.8K $66.8K $74.9K $71.4K Projected Household Income
Slide 8: Our Business Model Drives a Differentiated Client Experience
OUR BUSINESS MODEL DRIVES A DIFFERENTIATED CLIENT EXPERIENCE 8 Retail Banking Commercial Banking .. Consultative approach to serving clients by a team of bankers who build relationships by providing solutions that enable client success .. Full suite of treasury management and depository products del
Slide 9: Investment Highlights
9 INVESTMENT HIGHLIGHTS
Slide 10: Financial Goals - We Are Raising the Bar
FINANCIAL GOALS - WE ARE RAISING THE BAR 10 Financial Performance Goals Original Targets Long Term Targets Q3 ‘19 Results Assets ~$6bn - $8bn ~$6bn - $8bn $6bn ROATA > 1.00% > 1.50% 1.51% ROATCE 12% - 14% 14% - 15% 13.68% Dividend Payout Ratio 30% 30 - 40% 28% Efficiency Ratio < 60% < 60% 55.90% Tie
Slide 11: Capital Deployment Drives Outsized Shareholder Returns
CAPITAL DEPLOYMENT DRIVES OUTSIZED SHAREHOLDER RETURNS 11 Organic Growth $ 0.4 $ 4.0 4Q12 3Q19 NBHC Originated Loans on Balance Sheet M&A Capital Return .. Since early 2013, we have repurchased 52%, totaling $534mm, of our shares at a weighted-average price of $20.03. .. Increased cash dividend 111%
Slide 12: Consistent Progress Towards Long-Term Profitability Targets
CONSISTENT PROGRESS TOWARDS LONG-TERM PROFITABILITY TARGETS 12 Accelerated growth • Total loan originations of $1.3 billion for the trailing 12 month period. • Originated and acquired(2) loans grew 10.7% annualized, 3Q19 over 4Q18, due to organic loan growth. • Expanded net interest margin six basis
Slide 13: Strong Loan Growth
Owner Occupied CRE 16% CRE 14% Acquired 310-30 Loans 1% Resi Mortgage 18% Other Consumer 1% C & I 50% Loan Composition ($4.4 Billion) $714 $869 $967 $879 $1,198 $1,285 FY13 FY14 FY15 FY16 FY17 FY18 3Q19 STRONG LOAN GROWTH 13 Highlights . Portfolio built on a relationship banking strategy, with empha
Slide 14: Uniquely Diversified $4.4 Billion Loan Portfolio
C&I and Owner Occupied CRE 67.0% Non Owner- Occupied CRE 14.5% Consumer 18.5% 12% 9% 5% 4% 4% 4% 4% 3% 2% 2% 2% 1% 1% 12% 4% 3% 2% 2% 1% 4% 16% 2% 1% UNIQUELY DIVERSIFIED $4.4 BILLION LOAN PORTFOLIO 14 Concentrations .. Self-imposed concentration limits ensure a granular and diverse loan portfolio a
Slide 15: Strong Credit Quality
0.10% 0.12% 0.02% 0.75% 0.26% 0.21% YE16 YE17 YE18 YTD19 Non energy charge-offs Energy charge-offs Acquired loan charge-offs $18.1 $19.4 $23.8 $24.5 $0.7 $0.9 1.07% 0.66% 0.60% 0.58% 0.65% 0.62% 0.59% 0.56% YE16 YE17 YE18 3Q19 Non-performing loans excl. energy Non-performing loans excl. energy as a
Slide 16: Growing Low Cost Transaction Accounts
Deposit Composition GROWING LOW COST TRANSACTION ACCOUNTS 16 ($ in billions) $12.0 Growing Low Cost Transaction Accounts $12.0 $12.0 Strong Transaction Deposit Growth Low Cost Deposits $2.5 $2.7 $2.9 $3.5 $3.6 $1.3 $1.2 $1.1 $1.1 $1.1 2015 2016 2017 2018 YTD19 Average Transaction Deposits Average Ti
Slide 17: Solid Net Interest Margin
. FTE net interest income totaled $159.2 million and increased $9.1 million, or 6.1% YTD YoY. .. The FTE net interest margin widened six basis points to 3.98% YTD YoY. The yield on earning assets increased 32 basis points, led by a 41 basis point increase in the originated loan portfolio yields due
Slide 18: Improving Operating Leverage
Non-Interest Expense (NIE) ($ in millions) Non-Interest Income IMPROVING OPERATING LEVERAGE 18 $21 $40 $39 $71 $62 FY15 FY16 FY17 FY18 YTD19 ($ in millions) 68.63% 68.64% 60.33% 66.97% 65.72% FY17 FY18 YTD19 Non-Adusted Adjusted 2.90% 3.38% 3.10% 2.84% 3.23% FY17 FY18 YTD19 Non-Adjusted Adjusted NIE
Slide 19: Conservative Investment Portfolio
Investments by Asset Class(1) (3Q19) CONSERVATIVE INVESTMENT PORTFOLIO 19 72% 25 % 2% Collateralized Mortgage Obligations - Fixed Rate Mortgage Backed Securities - Fixed Rate Mortgage Backed Securities - ARMs Collateralized Mortgage Obligations - Floating Rate .. 99.9% of portfolio is U.S. agency ba
Slide 20: Appendix
20 APPENDIX
Slide 21: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM Whitney Bartelli EVP, Chief Marketing Officer and President, Bank Midwest • 25+ years of financial services experience • Core expertise in branding, marketing and communications; SVP, Retail Brand Strategy at Bank of America; Director, Corporate Partnerships and Brand Man
Slide 22: Accomplished Board of Directors
ACCOMPLISHED BOARD OF DIRECTORS 22 NAME TITLE EXPERIENCE Tim Laney Chairman, President and CEO • Former Senior EVP and Head of Business Services of Regions Financial • Former EVP and Management Operating Committee member at Bank of America Ralph Clermont Lead Director / Chairman of the Audit and Ris
Slide 23: Management & Directors Beneficial Ownership
MANAGEMENT & DIRECTORS 23 NBHC MANAGEMENT & DIRECTORS BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS(2) G. Timothy Laney 731,131 2.33% Aldis Birkans 44,244 0.14% Richard U. Newfield, Jr. 204,366 0.65% Zsolt K. Besskó 59,952 0.19% Ralph W. Clermont 76,851 0.25% Robert E. Dean 31,800 0.10% Fred J. Joseph 13
Slide 24: 30-Sep-19 31-Dec-18 31-Dec-17 Net income 60.8 $ 61.5 $ 14.6 $ Add: impact of
30-Sep-19 31-Dec-18 31-Dec-17 Net income 60.8 $ 61.5 $ 14.6 $ Add: impact of core deposit intangible amortization expense, after tax 0.7 1.6 3.3 Net income adjusted for impact of core deposit intangible amortization expense, after tax 61.5 $ 63.1 $ 17.8 $ Average assets 5,807.7 $ 5,607.5 $ 4,705.2 $
Slide 25: 30-Sep-19 31-Dec-18 31-Dec-17 Adjustments to net income: Net income 60.8 $ 61.5 $ 14.6
30-Sep-19 31-Dec-18 31-Dec-17 Adjustments to net income: Net income 60.8 $ 61.5 $ 14.6 $ Adjustments (1) - 6.3 20.4 Adjusted net income (non-GAAP) 60.8 $ 67.8 $ 35.0 $ Adjustments to earnings per share: Earnings per share - diluted 1.93 $ 1.95 $ 0.53 $ Adjustments (1) - 0.21 0.73 Adjusted earnings p
Slide 26: 30-Sep-19 31-Dec-18 31-Dec-17 Net interest income 155.4 $ 7.4 $ 146.3 $ Add: impact
30-Sep-19 31-Dec-18 31-Dec-17 Net interest income 155.4 $ 197.4 $ 146.3 $ Add: impact of taxable equiv alent adjustment 3.8 4.5 5.9 Net interest income, FTE (non-GAAP) 159.2 $ 201.9 $ 152.2 $ Non-interest income 62.5 $ 70.8 $ 39.2 $ Non-interest expense 134.6 $ 189.3 $ 136.7 $ Less: core deposit int
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