National Bank Holdings Corporation · NYSE:NBHC
National Bank — Q3 2023 Earnings Presentation
40 slides from National Bank's earnings presentation, Oct 25, 2023
Slide 1: Investor Presentation Q3 2023
Investor Presentation Q3 – 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private party service providers and the risk of systems failures, interruptions or breaches of security; Securities Litigation Reform Act of 1995. Forward-looking statements contain words suc
Slide 3: About Non-GAAP Financial Measures
About Non-GAAP Financial Measures Certain of the financial measures and ratios we present, including “tangible assets,” “return on our primary business operating results or by presenting certain metrics on a fully taxable average tangible assets,” “tangible common equity,” “return on average tangibl
Slide 4: Table of Contents
Table of Contents Financial Performance 08 Cambr Acquisition 14 Credit 16 Balance Sheet 21 Management Team 26 Corporate Governance Overview 29 Appendix 36
Slide 5: Attractive Markets
Attractive Markets Headquarters Company Highlights Denver, CO Banking Centers(1) 97 Listing NYSE: NBHC Balance Sheet 3Q23 Total Assets (mm) $9,866 Total Loans (mm) $7,478 Total Deposits (mm) $8,149 Key Ratios YTD23 Common Equity Tier 1 11.61% Tier 1 Leverage 9.56% ROATA(2)(3) 1.61% ROATCE(2)(3) 18.8
Slide 6: Recent Recognition
Recent Recognition #4 and #9 Strong Balance Boulder, CO and Colorado Springs, CO Sheet Market Presence in Top 10 Best Places to Live(1) Robust Profitability #4 Colorado Market Share (Among Local Banks)(2) Positioned in Attractive Markets #6 Kansas City, MO-KS MSA Premium Valuation Market Sha
Slide 7: Shareholder Returns
Shareholder Returns Performance of NBH Shareholder Returns vs. KRX Regional Banking Index(1) Since 2018 Net Income ($ in millions) $108.9 50% Non-Adjusted Adjusted $99.6 $88.6 $93.6 $80.4 $28.3 KRX NBH Outperformance $67.8 $6.3 40% $71.3 $61.5 (2) (2) 30% YE18 YE19 YE20 YE21 YE22 YTD23 Historical Di
Slide 8: Financial Performance
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Slide 9: Q3 2023 Financial Highlights
Q3 2023 Financial Highlights Net Income $36.1 million Quarterly earnings increased 10.8% to $0.94 per diluted share 3.92% Net interest margin FTE(1) YTD net income increased 67.5% to $108.9 million, or $2.85 per diluted share, over the same period in the prior year, adjusting for acquisition-rel
Slide 10: Profitable Steady Growth
Profitable Steady Growth Net Income Pre-Provision Net Revenue FTE(1) EPS (Fully Diluted) ($ in millions) ($ in millions) $143.5 $144.9 $108.9 $132.1 $3.05 Non-Adjusted $3.01 Non-Adjusted $99.6 $15.1 $2.85 $2.85 $93.6 $112.9 $88.6 $110.8 Adjusted $2.55 Adjusted $80.4 $0.87 $28.3 $2.16 $67.8 $83.4 $0.
Slide 11: Growth Trends
Growth Trends Total Assets Total Loans Tangible Common Equity(3) ($ in billions) ($ in billions) ($ in millions) (1) $9.9 Non-PPP Loans $9.6 PPP Loans (2) $7.5 $7.2 $808.7 $776.0 $728.8 $707.3 $7.2 $651.4 $6.7 $577.4 $5.9 $5.7 $4.5 $4.4 $4.4 $4.1 $482.0 $0.2 $4.8 $3.2 $4.2 YE17 YE18 YE19 YE20 YE21 Y
Slide 12: Trust and Wealth Partners
Trust and Wealth Partners Trust and Wealth Management solution tailored to high net worth individuals Scalable Private Wealth team provides a broad range of financial and retirement planning solutions, creating an opportunity to further leverage the platform to new and existing NBH clients Est
Slide 13: Regulatory Capital
Regulatory Capital Capital Ratios – 3Q23 $363 million in excess capital over 7.0% common TIER 1 LEVERAGE 9.6% equity tier 1 risk-based regulatory requirement COMMON EQUITY TIER 1 RISK-BASED 11.6% TIER 1 RISK-BASED 11.6% Double-leverage ratio of 94.9% TOTAL RISK-BASED 13.5% TANGIBLE COMMON EQUITY
Slide 14: Cambr Acquisition
Cambr Acquisition
Slide 15: Cambr Overview
Cambr Overview Diversifies NBH’s Deposit Franchise with Minimal Overhead Costs Relationship Schematic NBH Deposit Flows Account Details & Instructions Data Embedded Cambr Finance Program End User 3rd Party Bank of Bank of Record Deposit $ Record $ Account $ Network About Cambr Strategic Rationale
Slide 16: Credit
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Slide 17: Uniquely Diversified $7.5 Billion Loan Portfolio
Uniquely Diversified $7.5 Billion Loan Portfolio Concentrations Granular and Well-Diversified Loan Portfolio Consumer 1% 1% 10% 18% 16% C&I and Owner Self-imposed concentration limits ensure a granular and diverse loan portfolio and 5% Occupied protect against downside risk to any particular indus
Slide 18: Granular CRE Portfolio
Granular CRE Portfolio Non-Owner Occupied CRE Non-Owner Occupied CRE Portfolio Characteristics Office: 1-4 Family Nursing Const. - Average LTV of 48.5% Home 5% Office 5% 4% - 1.3% of total loans CML A & D Hotel & Lodging 26% Retail: 5% - Average LTV of 57.3% All Other 8% - 1.9% of total loans
Slide 19: Strong Credit Quality History
Strong Credit Quality History Non-performing Loans ($ in millions) Non-performing Asset Composition 0.47% / 0.49%* 0.44% 0.60%* 0.24% 0.49% 0.23% 0.40%* 0.11% 0.05% 0.04% 0.15% 0.15% 0.28% 0.05% $33 0.09% 0.06% 0.40% $20 $17 $11 0.34% 0.16% 0.17% YE20 YE21 YE22 3Q23 YE20* YE21* YE22 3Q23 Non-perform
Slide 20: Credit Loss Protection
Credit Loss Protection Total Loan Loss Coverage ACL/Total Loans Loan Marks/Total Loans Including Loan Marks 1.25% 0.38%(1) 1.63%(1) $28.6 $122.0 $93.4 ACL Loan Marks TOTAL 9/30/2023 9/30/2023 9/30/2023 All dollars in millions (1)Represents a non-GAAP financial measure 20
Slide 21: Balance Sheet
Bm National Bank Holdings CORPORATION” Balance Sheet
Slide 22: Solid Loan Growth
Solid Loan Growth Total Loan Fundings(1) Quarterly Loan Fundings Loan Composition ($ in billions) ($ in millions) ($7.5 Billion) $631.6 $2.0 $497.3 Owner $1.6 Occupied AG $1.5 $393.9 19% $362.3 C&I $1.2 $1.2 $1.2 $324.1 39% $0.9 Non-Owner Occupied CRE 24% Resi Mortgage FY17 FY18 FY19 FY20 FY21 FY22
Slide 23: High Quality Liquidity Portfolio: $1.3 Billion
High Quality Liquidity Portfolio: $1.3 Billion $1.3 Billion Liquidity Portfolio(1) Liquidity portfolio duration of 3.9 years Cash Portfolio used exclusively as an on-balance sheet source of liquidity: 14.5% U.S. Treasury 46% unencumbered 9.1% 46% pledged directly to client deposits or repo O
Slide 24: Low Cost Transaction Deposits
Low Cost Transaction Deposits ($ in billions) Growing Low Cost Transaction Accounts Deposit Composition Demand & NOW Savings & MM CDs < $250k CDs >= $250k Total Average Transaction Deposits Average Time Deposits $6.9 $5.7 $6.2 $7.9 $8.1 $5.9 100% 3% 2% 3% 3% 14% 11% 9% 9% $5.1 $4.2 37% 37% 41% 36% 8
Slide 25: Relationship Focused Deposit Base: $8.1 Billion
Relationship Focused Deposit Base: $8.1 Billion Deposit Composition 4% 3% Approximately 70% FDIC insured Granular deposit base: Time Deposits 12% - Average deposit balance on full relationship Interest bearing Transaction DDA 17% basis just $50 thousand Accounts 47% - Average deposit per account
Slide 26: Management Team
Bm National Bank Holdings CORPORATION” Management Team
Slide 27: Experienced Management Team
Experienced Management Team Tim Laney Aldis Birkans Chairman, President & CEO Chief Financial Officer (42 years in banking) (25 years in financial industry) • Head of Business Services at Regions Financial, where he also led the transformation • Senior Vice President, Treasurer at NBHC of wholesale
Slide 28: Management & Directors
Management & Directors Beneficial Ownership (as of 9/30/23) NBHC MANAGEMENT & DIRECTORS BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS(2) G. Timothy Laney 545,790 1.44% Aldis Birkans 83,513 0.22% Richard U. Newfield, Jr. 188,216 0.50% Angela Petrucci 24,735 0.07% Ralph W. Clermont 89,162 0.24% Robert E. D
Slide 29: Corporate Governance
BE National Bank Holdings CORPORATION” Corporate Governance
Slide 30: 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 31: NBHC Board of Directors
NBHC Board of Directors Robust Lead Director Responsibilities Ralph W. Clermont A *C N I G. Timothy Laney Lead Independent Director President, CEO and Chairman Mr. Clermont presides at all Board Former Managing Partner of KPMG, St. Louis office Former Sr Executive VP & Head of Business 3
Slide 32: 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 capable of overseeing Other Public Board Experience 4 execution and challenging management Financial or Audit Background
Slide 33: 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 34: Executive Compensation Program
Executive Compensation Program NBH’s executive compensation practices align management incentives with long-term shareholder interests Components of Executive Compensation (2022) Compensation Metrics Tied to Long-Term Strategy Component Metrics Link to Strategy Base Salary Among other things, attr
Slide 35: 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 36: Appendix
F National Bank Holdings CORPORATION” Appendix
Slide 37: 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-23 31-Dec-22 31-Dec-21 31-Dec-20 31-Dec-19 31-Dec-18 31-Dec-17 Net income $ 108.9 $ 7
Slide 38: Reconciliation of Non-GAAP Measures (cont'd)
Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except per share) As of and for the three As of and for the nine months ended months ended As of and for the years ended Efficiency Ratio and Pre-Provision Net Revenue 30-Sep-23 30-Sep-23 31-Dec-22 31-Dec-21 31-Dec-20 31-Dec-19 31-Dec-18 3
Slide 39: 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-23 31-Dec-22 31-Dec-21 31-Dec-20 31-Dec-19 31-Dec-18 31-Dec-17 Total shareholders' equity $ 1,163.6 $ 1,092.2 $ 84
Slide 40: Thank you.
BE National Bank Holdings CORPORATION”
National Bank Holdings — Q3 2023 Earnings Presentation on 6ix