National Bank Holdings Corporation · NYSE:NBHC
National Bank — Q1 2019 Earnings Presentation
26 slides from National Bank's earnings presentation, May 3, 2019
Slide 1: Q1 – 2019 Investor Presentation
Q1 – 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,” “return on average tangible common equity,” “non-interest expense to average assets, adjusted,” “adjusted non-interest expense,” “adjus
Slide 4: Company Overview
4 COMPANY OVERVIEW
Slide 5: Why Invest in NBHC
WHY INVEST IN NBHC 5 • Delivered 68.5% in total shareholder return since our last stock buyback in October 2016. • Ranked number three in total shareholder return for the three year period, 2016 – 2018, among KBW Regional Banking Index banks. • Remain an opportunistic and disciplined manager of capi
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) ‒#11 Best City for Jobs (CBS MoneyWatch) ‒#35 on “America’s Best Large Cities” List (Bloombergl) ..3 commercial banking
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: Capital Deployment Drives Outsized Shareholder Returns
CAPITAL DEPLOYMENT DRIVES OUTSIZED SHAREHOLDER RETURNS 10 Organic Growth $ 0.4 $ 3.8 4Q12 1Q19 NBHC Originated Loans on Balance Sheet M&A Capital Return .. Since early 2013, we have repurchased 51%, totaling $534mm, of our shares at a weighted-average price of $20.03. .. Increased cash dividend 143%
Slide 11: Financial Performance Goals
FINANCIAL PERFORMANCE GOALS 11 Long-Term Targets Assets ~$6bn - $8bn Efficiency Ratio < 60% ROATA > 1.50% ROATCE 14 – 15% Dividend Payout Ratio 30 – 40% Tier 1 Leverage 9%
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 twelve month period. • Originated and acquired(2) loans grew 16.3% annualized, 1Q19 over 4Q18, due to organic loan growth. • Cost of deposits increased just 17
Slide 13: Strong Loan Growth
Owner Occupied CRE 16% CRE 14% Acquired 310-30 Loans 1% Resi Mortgage 19% Other Consumer 1% C & I 49% Loan Composition ($4.2 Billion) $281 $477 $552 $605 $910 $1,301 FY13 FY14 FY15 FY16 FY17 FY18 1Q19 STRONG LOAN GROWTH 13 Highlights . Portfolio built on a relationship banking strategy, with emphasi
Slide 14: Uniquely Diversified $4.2 Billion Loan Portfolio
UNIQUELY DIVERSIFIED $4.2 BILLION LOAN PORTFOLIO 14 2 % 1 %1 % 2 % 1 % 5 % 1 3 % 8 % 5 % 4 %3 %2 %2 %2 % 2 % 2 % 1 % 1 % 9 % 5 % 4 % 2 % 2 % 4 % 2 1 % 7 % 1 % 1 % 2 % 1 %1 % 2 % 1 % 5% 1 3 % 8% 5 % 4 %3 %2 %2 %2 % 2 % 2 % 1 % 1 % 9 % 5 % 4 % 2 % 2 % 4 % 2 1 % 7 % 1 % 1 % C&I and Owner Occupied CRE 6
Slide 15: Strong Credit Quality
$13.6 $18.1 $19.4 $23.8 $25.5 $1.6 $0.7 $0.8 0.99% 1.07% 0.66% 0.60% 0.62% 0.56% 0.65% 0.62% 0.59% 0.61% YE15 YE16 YE17 YE18 1Q19 Non-performing loans excl. energy Non-performing loans excl. energy as a % of total loans excl. energy Non-performing energy loans Non-performing loans as a % of total lo
Slide 16: Growing Low Cost Transaction Accounts
Deposit Composition GROWING LOW COST TRANSACTION ACCOUNTS 16 ($ in billions) $12.0 Growing Low Cost Transaction Accounts $12.0 $12.0 Strong Transaction Deposit GrowthLow Cost Deposits $2.5 $2.7 $2.9 $3.5 $3.5 $1.3 $1.2 $1.1 $1.1 $1.1 2015 2016 2017 2018 1Q19 Average Transaction Deposits Average Time
Slide 17: Expanding Net Interest Margin
. FTE net interest income totaled $52.4 million and increased $3.7 million, or 7.6% 1Q19 over 1Q18. .. The FTE net interest margin widened 21 basis points from 1Q18 to 4.05% at 1Q19, due to a 44 basis point increase in the earning assets yield, partially offset by an increase in cost of funds of 33
Slide 18: Improving Operating Leverage
Non-Interest Expense ($ in millions) Non-Interest Income IMPROVING OPERATING LEVERAGE 18 $181 $132 $130 $178 $43 $3$4 $137 $189 FY12 FY16 FY17 FY18 1Q19 Non-Interest Expense Acquisition Costs Problem Asset Workout $37 $40 $39 $71 $17 FY12 FY16 FY17 FY18 1Q19 $44 $1 $210 $136 $29 $4 $8 ($ in millions
Slide 19: Conservative Investment Portfolio
Investments by Asset Class(1) (1Q19) CONSERVATIVE INVESTMENT PORTFOLIO 19 27 % 2 % 70 % 1 % Mortgage Backed Securities - Fixed Rate Mortgage Backed Securities - ARMs Collateralized Mortgage Obligations - Fixed Rate Collateralized Mortgage Obligations - Floating Rate .. 99.9% of portfolio is U.S. age
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 1,143,709 3.60% Aldis Birkans 42,529 0.14% Richard U. Newfield, Jr. 202,640 0.65% Zsolt K. Besskó 58,513 0.19% Ralph W. Clermont 74,167 0.24% Robert E. Dean 33,997 0.11% Fred J. Joseph
Slide 24: 31-Mar-19 31-Dec-18 31-Dec-17 Net income 18.9$ 61.5$ 14.6$ Add: impact of core deposit intangible
31-Mar-19 31-Dec-18 31-Dec-17 Net income 18.9$ 61.5$ 14.6$ Add: impact of core deposit intangible amortization expense, after tax 0.2 1.6 3.3 Net income adjusted for impact of core deposit intangible amortization expense, after tax 19.1$ 63.1$ 17.8$ Average assets 5,711.0$ 5,607.5$ 4,705.2$ Less: av
Slide 25: 31-Mar-19 31-Dec-18 31-Dec-17 Adjustments to net income: Net income 18.9$ 61.5$ 14.6$ Adjustments (1)
31-Mar-19 31-Dec-18 31-Dec-17 Adjustments to net income: Net income 18.9$ 61.5$ 14.6$ Adjustments (1) - 6.3 20.4 Adjusted net income (non-GAAP) 18.9$ 67.8$ 35.0$ Adjustments to earnings per share: Earnings per share - diluted 0.60$ 1.95$ 0.53$ Adjustments - 0.21 0.73 Adjusted earnings per share - di
Slide 26: 31-Mar-19 31-Dec-18 31-Dec-17 Net interest income 51.2$ 197.4$ 146.3$ Add: impact of taxable equiv
31-Mar-19 31-Dec-18 31-Dec-17 Net interest income 51.2$ 197.4$ 146.3$ Add: impact of taxable equiv alent adjustment 1.2 4.5 5.9 Net interest income, FTE (non-GAAP) 52.4$ 201.9$ 152.2$ Non-interest income 17.1$ 70.8$ 39.2$ Non-interest expense 44.4$ 189.3$ 136.7$ Less: core deposit intangible asset a
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