National Bank Holdings Corporation · NYSE:NBHC
National Bank — Q4 2013 Earnings Presentation
33 slides from National Bank's earnings presentation, Feb 11, 2014
Slide 1: Q4 2013 Investor Presentation
1 Q4 2013 Investor Presentation
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements 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: Company Overview
Company Overview Ea National Bank Holdings
Slide 4: NBHC 4Q13 Snapshot
4 Raised $974 million in late 2009 Completed four acquisitions in 12 months ̶ Three failed banks, one 39 banking center purchase Profitable since inception of banking operations¹ Created meaningful scale and market share in attractive markets of Colorado and Kansas City MSA Fully integrate
Slide 5: Management Team
5 Head of M&A and Corporate Planning, Head of Foreign Exchange and Interest Derivatives business, and Mid-Atlantic Chief Financial Officer at Citizens Financial Group Don Gaiter Chief of Acquisitions and Strategy (24 years in banking) Head of Business Services at Regions Financial, where he also
Slide 6: Investment Highlights
6 Investment Highlights Disciplined focus on building meaningful scale and market share in attractive markets Successfully rebuilding failed banks with organic growth strategy: loan balance inflection point achieved early as a result of accelerating organic growth Expertise in mergers and acqu
Slide 7: Our Objectives
7 Acquisition Growth Organic Growth Attractive Markets Disciplined Acquisitions Client-Centered, Relationship-Driven Enhanced Product Offerings Scalable Operating Platform & Efficiencies Leading Regional Bank Holding Company Our Objectives Opportunistic Capital Management
Slide 8: 2013 Strategy Highlights
8 2013 Strategy Highlights Expanded Efficiency Initiatives Managed Capital Opportunistically Further Franchise Development Expanded Product Offerings Q2 2013 – Launch of Capital Finance Team Q4 2013 – Launch of Specialty Gov’t and Non-Profit Banking Unit Successful sales production initiativ
Slide 9: NBHC Markets and Family of Brands
9 MO KS CO NBHC Markets and Family of Brands Banking Centers (97) 50 full-service banking centers 36 Commercial bankers 1.3% Deposit market share across Colora
Slide 10: Key Statistics by MSA
10 Key Statistics by MSA Source: SNL Financial, U.S. Census, U.S. Bureau of Economic Analysis. Note: “Front Range” statistics include populated weighted values for Denver, Boulder, Colorado Springs, Fort Collins, and Greeley MSAs. Deposit data as of 30-Jun-13. Front Range unemployment based on a wei
Slide 11: Organic Loan Growth Strategy is Accelerating
11 Comm. 28% Agriculture 10% Owner Occupied 6% CRE 16% Resi 38% Consumer 2% Loan growth inflection point achieved in 3Q 2013 Investments in commercial bankers adding value – 44 of 58 are new hires Relationship banking model with a focus on the markets we serve Originated portfolio has excell
Slide 12: Growing Low Cost Transaction Accounts
12 $2,932 $1,833 $1,544 4Q11 4Q12 4Q13 1.05% 0.64% 0.45% 0.42% 0.40% 0.38% 2011 2012 1Q13 2Q13 3Q13 4Q13 $2,258 $2,402 $2,453 4Q11 4Q12 4Q13 24 % 29 % 28 % 21% 29% 33% 33 % 27 % 25 % 22 % 15 % 14 % $5,063 $4,201 $3,838 2011 2012 2013 Demand & NOW Savings & MM Retail Time Jumbo Time 45% Non- Time 58%
Slide 13: Delivering on Commercial Banking Strategy
13 Delivering on Commercial Banking Strategy Invested in Commercial Capabilities Team of 58 experienced commercial bankers Committed to consistent top grading of bankers (19 new commercial bankers recruited in 2013) Established Capital Finance, Government Banking and Non Profit specialty lines
Slide 14: Delivering on Consumer & Small Business Banking Strategy
14 Delivering on Consumer & Small Business Banking Strategy Optimized Banking Center Distribution Exited California and retirement center locations Rolled out teller staffing efficiency model Consolidated management responsibilities Built culture of accountability Well Positioned For Growth
Slide 15: Acquisition history and returns
15 2.2 % 3.0 % 4.4 % Bank Midwest Nationwide Branch Deals Midwest Branch deals 1.4 x 1.7 x 1.1 x 1.4 x 1.4 x Hillcrest Bank Bank of Choice Community Banks of Colorado Total Colorado Total Bank Midwest Hillcrest Bank Bank of Choice CBoC Source: SNL Financial. 1 Defined as capital deployed divided by
Slide 16: Disciplined Acquirer with Significant Future Opportunities
16 Disciplined Acquirer with Significant Future Opportunities M&A Focus Target Geographies Positioned to consolidate targets along the I-25, I-70 and I-35 corridors across CO, KS and MO Complementary set of acquisition opportunities Excess capital of $300mm¹. Management team experienced with
Slide 17: Financial Overview
Financial Overview Ea National Bank Holdings
Slide 18: Fourth Quarter 2013 Highlights
18 Grew the strategic loan portfolio by $174.5 million, or 52.1% annualized, driven by $244.2 million in originations, a 27.4% linked quarter increase in originations and a 74.7% increase over the fourth quarter last year Successfully exited $63.2 million, or 60.7% annualized, of the non-strateg
Slide 19: Low-Risk Balance Sheet
19 Covered $259 Non- Covered $192 New Originations $1,083 Covered $50 Non-Covered $270 New Originations 58 % Acquisition Marked 25 % Acquisition Marked & Covered 17 % Non 310-30 Loans $1,403mm 76% 310-30 Loan Pools $450mm 24% Total Assets Marked and Covered Loan Portfolio Low-Risk Balance Sheet 60
Slide 20: Credit Quality
20 $80.3 $79.9 $45.6 $92.6 $57.1 $61.7 2.7 % 2.5 % 2.2 % 2011 2012 2013 NPAs - Non-Covered NPAs - Covered NPAs / Total Assets Attractive 310-30 Loan Pools Accretable Yield Reclassification Life-to-Date Strong Credit Quality of Non 310-30 Loans Improving Credit Quality of Non 310-30 Loans Strong Loss
Slide 21: Strong Covered Asset Performance
21 Covered Assets Covered Assets Strong Covered Asset Performance FDIC Indemnification Asset Forecast Amortization of FDIC Indemnification Asset $953 $608 $309 $77 $46 $39 $1,030 $654 $348 2011 2012 2013 Loans OREO $171 $48 $45 $52 $39 $20 $223 $87 $64 2011 2012 2013 FDIC Loss-Share Billings Improve
Slide 22: P&L Metrics
22 $(4.7) $(1.8) $(16.1) $ 34.3 $ 38.5 $ 36.3 18.1 % 15.8 % 16.9 % 2011 2012 2013 FDIC Loss Share Inc. NII excluding FDIC Adj. Fee Income Ratio 7.72% 9.49% 12.35% 8.41% 7.15% 5.50% 2011 2012 2013 310-30 Loans Non 310-30 Loans Net Interest Margin Note: Please refer to the appendix for a reconciliatio
Slide 23: Operating Improvement Initiatives
23 $41 $42 $41 $39 $7 $3 $2 $5 $(1) $ 0 $ 4 $ 1 $48 $45 $47 $44 1Q13 2Q13 3Q13 4Q13 Operating Problem Loan / OREO Other¹ Expenses Exited four non-core California banking centers Consolidated 32 retirement centers into existing traditional banking centers Bank-wide operational streamlining incl
Slide 24: Looking Ahead
Looking Ahead i National Bank Holdings
Slide 25: Organic Earnings Potential
25 ROATA Note: Please refer to the appendix for a reconciliation of non-GAAP financial metrics ¹ Adjusted metric excludes stock-based compensation expense and banking center closure related expenses. Operating efficiencies Leverage expense base Reduction in work- out expenses Ramp-up of loan
Slide 26: Key Long-Term Financial Targets
26 Fully Levered Targets Assets ~$10bn Efficiency Ratio <60% ROATA 1.00% - 1.25% ROATCE 13% - 16% Dividend Payout Ratio 25% Tier 1 Leverage 8% Key Long-Term Financial Targets
Slide 27: Investment Highlights
27 Investment Highlights Disciplined focus on building meaningful scale and market share in attractive markets Successfully rebuilding failed banks with organic growth strategy: loan balance inflection point achieved early as a result of accelerating organic growth Expertise in mergers and acq
Slide 28: Appendix
Appendix i National Bank Holdings
Slide 29: Board of Directors
29 Title Past Experience Name Frank Cahouet Chairman Chairman, President, and Chief Executive Officer of Mellon Financial President and Chief Operating Officer of Fannie Mae Tim Laney President / CEO Senior EVP and Head of Business Services of Regions Financial EVP and Management Operating C
Slide 30: Investment Portfolio Summary
30 31-Dec-11 31-Dec-12 31-Dec-13 Book Value Available-for-Sale $ 1,786 $ 1,681 $ 1,816 Held-to-Maturity 7 548 622 "Locked-in" Gains (HTM) 0 29 20 Total Book Value $ 1,793 $ 2,258 $ 2,458 Available-for-Sale Unrealized Gains / (Losses) 77 37 (31) Fair Market Value of Portfolio $ 1,870 $ 2,295 $ 2,427
Slide 31: Net Interest Income Sensitivity
31 Note: Interest Rate Risk as of 31-December-2013. 1 12-month simulated net interest income impact using management projected balance sheet and an immediate parallel shift in the yield curve. NBHC Balance Sheet Positioned to Benefit From Rising Rate Environment Net Interest Income Change1 (1.11)% 2
Slide 32: Reconciliation of Non-GAAP Measures
32 Date: 4/18/13 User: John Mahoney Source: G:\Accounting\Financial Reporting Shared Folder\Investor Deck\2013-03-31/Excel/NBH Financials 3.31.13.xlsx (Non- GAAP Recon (Press Release)) ($ in millions, except per share) Reconciliation of Non-GAAP Measures As of and for the Year Ended As of and for th
Slide 33: Reconciliation of Non-GAAP Measures (cont'd)
33 Date: 4/18/13 User: John Mahoney Source: G:\Accounting\Financial Reporting Shared Folder\Investor Deck\2013-03-31/Excel/NBH Financials 3.31.13.xlsx (Non- GAAP Recon (Press Release)) ($ in millions, except per share) Reconciliation of Non-GAAP Measures (cont’d) As of and for the Year Ended As of a
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