National Bank Holdings Corporation · NYSE:NBHC

National Bank — Q3 2014 Earnings Presentation

38 slides from National Bank's earnings presentation, Nov 7, 2014

  1. Slide 1: Q3 2014 Investor Presentation

    1 Q3 2014 Investor Presentation Exhibit 99.1

  2. 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

  3. Slide 3: Company Overview

    Company Overview Ea National Bank Holdings

  4. Slide 4: Company overview and key statistics

    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

  5. Slide 5: Investment Highlights

    5 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 in late 2013 as a result of strong organic growth  Net interest income stabil

  6. Slide 6: Guide to Common Sense Banking

    GUIDE TO COMMON SENSE BANKING OUR PROMISE BANK WITH COMMON SENSE NBH Bank champions a new era of common sense banking by felled relationst ‘communities as the accountable, nd ins sight akornat eto big box bankong-ae oe WE FOCUS ON WE PUT NEEDS-BASED WE VALUE WE BELIEVE IN WE DELIVER PEOPLE FIRST SOL

  7. Slide 7: Executive Team

    7 Executive Team Tim Laney Chairman, President & Chief Executive Officer Brian Lilly Richard Newfield Chief Financial Officer Chief Risk Officer Zsolt Bessko Tom Metzger Chief Administrative Officer Chief of Enterprise Technology & Integration & General Counsel Market President, Bank Midwest & Hillc

  8. Slide 8: Our Objectives

    8 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

  9. Slide 9: Strategic Execution Highlights

    9 Strategic Execution Highlights Expanded Efficiency Initiatives Managed Capital Opportunistically Further Franchise Development  Expanded product offerings  Launch of Capital Finance Team  Launch of Specialty Gov’t and Non-Profit Banking Unit  Enhancements to Small Business Banking  Successful

  10. Slide 10: NBHC Markets and Family of Brands

    10     NBHC Markets and Family of Brands Banking Centers (97)  50 banking centers  25 commercial bankers  8 NBH Specialty Banking  1.4% deposit market share across Colorado  Ranks #5 in market share of Colorado headquartered banks  45 banking centers  14 commercial bankers  3.6% depos

  11. Slide 11: Key Statistics by MSA

    11 Key Statistics by MSA Source: FHFA, 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-14. Front Range unemployment based on

  12. Slide 12: Organic Loan Growth Strategy is Accelerating

    12 $158 $518 $1,083 $1,261 $1,457 $1,599 $2,116 $1,315 $771 $701 $630 $572 $2,274 $1,833 $1,854 $1,962 $2,087 $2,171 4QE11 4QE12 4QE13 1QE14 2QE14 3QE14 Originated Purchased $1,189 $711 $350 $321 $288 $251 Comm. 37% Agriculture 8% Owner Occupied 8% CRE 14% Resi 31% Cnsmr 2%  Relationship banking mo

  13. Slide 13: Strong Credit Quality of Originated Loans

    13 13% 8% 6% 5% 7% 4% 3% 2% 1% 1% 1% 12% 3% 2% 2% <1% 0% 0 5% 23% 4% 1% Originated Loans Credit Quality ($1.6 Billion Outstanding) Portfolio Characteristics Strong Credit Quality of Originated Loans Non-Accrual Loans NA’s/Originated Loans $ in millions Note: Concentration chart includes unfunded com

  14. Slide 14: Credit Quality

    14 $ 195.8 $ 24.5 $ 171.3 Inc. in Accr. Yield (Recog. Over Time) Impairments ( 310-30 Provision) Net Economic Impact Attractive $321 Million of 310-30 Loan Pools Strong Credit Quality of Non 310-30 Loans Strong Loss Share Coverage of Total NPA’s Credit Quality ($ in millions) Net Charge-Offs Allowan

  15. Slide 15: Deposit Composition

    15 1.05% 0.64% 0.41% 0.37% 0.37% 0.37% FY11 FY12 FY13 1Q14 2Q14 3Q14 Deposit Composition Cost of Deposits Time Deposit Maturity (3QE14) ($ in millions) Average Transaction Deposits & Repos Average Time Deposits Avg Rate 0.46% 0.67% 0.93% 1.14% 1.26% 1.29% Growing Low Cost Transaction Accounts $2,258

  16. Slide 16: Delivering on Commercial Banking Strategy

    16 Delivering on Commercial Banking Strategy Invested in Commercial Capabilities  Team of 53 experienced commercial bankers  Committed to consistent top-grading of bankers (27 new commercial bankers recruited in 2013/2014)  Established Capital Finance, Government and Non-Profit Banking specialty

  17. Slide 17: Delivering on Consumer & Small Business Banking Strategy

    17 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

  18. Slide 18: Acquisition track record

    18 2.2% 3.0% 3.5% Bank Midwest National Branch Deals Midwest Branch Deals Bank Midwest Hillcrest Bank Bank of Choice CBoC Source: SNL Financial. 1 Defined as capital deployed divided by post mark-to-market adjusted fair value of net assets (bargain purchase gain or goodwill) plus capital deployed. 2

  19. Slide 19: Disciplined Acquirer with Significant Future Opportunities

    19 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  Excess capital of $225mm¹  Management team experienced with M&A Well Positioned for Growth Potential In Footp

  20. Slide 20: Financial Overview

    Financial Overview Ea National Bank Holdings

  21. Slide 21: Third quarter 2014 highlights

    21  Net income of $3.3 million, or $0.08 per diluted share, compared to net income of $2.1 million, or $0.05 per diluted share, for the second quarter of 2014 and net income of $0.9 million, or $0.02 per diluted share, for the third quarter of 2013.  Grew the strategic loan portfolio by $120.7 mil

  22. Slide 22: On the Path to 1% ROATA

    22 0.22% 0.26% 0.32% 0.36% 0.54% 0.62% YTD 3Q13 YTD 3Q14 Reported Adjusted On the Path to 1% ROATA Reported and Adjusted1 ROATA $0.11 $0.16 $0.24 $0.30 $0.35 $0.46 YTD 3Q13 YTD 3Q14 Reported Adjusted Reported and Adjusted1 Diluted EPS Accounting “noise” is burning-off: • Significant impact of non-ca

  23. Slide 23: Low-Risk Balance Sheet

    23 Originated $1,599 Covered $36 Non-Covered $216 Covered $183 Non- Covered $137 Originated 74% Acquisition Marked 16% Acquisition Marked & Covered 10% 35% 34% 45% 44% 52% 44% 12% 7% 2% 2% 1% 1% 7% 7% 8% 3Q12 3Q13 3Q14 Loans Investment Securities Cash FDIC Indemnification Asset Other Assets ($ in bi

  24. Slide 24: Strong Covered Asset Performance

    24 $171 $48 $45 $42 $36 $27 $52 $39 $20 $15 $15 $18 $223 $87 $64 $57 $51 $45 YE11 YE12 YE13 1QE14 2QE14 3QE14 Projected Improved Client Cash Flows Projected FDIC Loss-Share Billings Covered Assets Covered Assets Strong Covered Asset Performance Forecast Amortization of FDIC Indemnification Asset ($

  25. Slide 25: Investment portfolio summary

    25 36% 4% 58% 1% 1% Mortgage Backed Securities - Fixed Rate Mortgage Backed Securities - ARMs Collateralized Mortgage Obligations - Fixed Rate Collateralized Mortgage Obligations - Floating Rate Other 31-Dec-13 31-Mar-14 30-Jun-14 30-Sep-14 Book Value Available-for-Sale $ 1,816 $ 1,739 $ 1,656 $ 1,5

  26. Slide 26: Balance Sheet Positioned to Benefit From Rising Rates

    26 . 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)% 2.32 % 4.09 % (1.28)% 3.56 % 6.22 % (4.0)% 0.0 %

  27. Slide 27: Net Interest Income Stabilizing

    27 3.98% 3.81% 3.94% 3.83% 3.75% FY12 FY13 1Q14 2Q14 3Q14 $204.3 $179.0 $43.3 $42.4 $41.9 FY12 FY13 1Q14 2Q14 3Q14 Net Interest Margin1 Note: Please refer to the appendix for a reconciliation of non-GAAP financial metrics. ¹ Presented on a fully taxable equivalent basis using the statutory rate of 3

  28. Slide 28: Operating expenses and efficiency actions

    28 $141 $174 $163 $152 $151 $150 $14 $29 $17 $9 $10 $9 $1 $7 $4 $(3) $(3) $(3) $156 $210 $184 $158 $158 $156 FY11 FY12 FY13 1Q14 Annualized 2Q14 Annualized 3Q14 Annualized Operating Problem Loan / OREO Other¹ Expenses  Exited four non-core California banking centers  Consolidated 32 retirement cen

  29. Slide 29: Looking Ahead

    Looking Ahead i National Bank Holdings

  30. Slide 30: Path to 1% ROATA

    30 Path to 1% ROATA 1Please refer to the appendix for a reconciliation of non-GAAP financial metrics. 2Represents YTD 2014 adjustments to ROATA.  Stabilizing net interest income  FDIC indem asset negative amortization ending < two years  FDIC loss share ending  Reduction in work- out expenses 

  31. Slide 31: Key Long-Term Financial Targets

    31 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

  32. Slide 32: Investment Highlights

    32 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 strong organic growth  Net interest income stabilizing

  33. Slide 33: Appendix

    Appendix i National Bank Holdings

  34. Slide 34: Executive team biographies

    34  Head of Business Services at Regions Financial, where he also led the transformation of wholesale lines of business  Senior management roles in small business, commercial banking, private banking, corporate marketing and change management, and Management Operating Committee member at Bank of A

  35. Slide 35: Board of Directors

    35 Title Past Experience Name Tim Laney Chairman, President and CEO  Senior EVP and Head of Business Services of Regions Financial  EVP and Management Operating Committee at Bank of America Ralph Clermont Lead Director / Chairman of the Audit and Risk Committee  Managing Partner of the St. Louis

  36. Slide 36: Reconciliation of Non-GAAP Measures

    36 ($ in millions) Reconciliation of Non-GAAP Measures 31-Mar-14 30-Jun-14 30-Sep-14 30-Sep-13 30-Sep-14 Net income 1.4$ 2.1$ 3.3$ 5.9$ 6.9$ Add: impact of core deposit intangible amortization expense, after tax 0.8 0.8 0.8 2.4 2.4 Net income adjusted for impact of core deposit intangible amortizati

  37. Slide 37: Reconciliation of Non-GAAP Measures (cont'd)

    37 ($ in millions) Reconciliation of Non-GAAP Measures (cont’d) 31-Mar-14 30-Jun-14 30-Sep-14 30-Sep-13 30-Sep-14 Net interest income 43.3$ 42.4$ 41.9$ 135.4$ 127.7$ Add: impact of taxable equivalent adjustment 0.2 0.2 0.2 - 0.6 Adjusted net interest income, fully taxable equivalent (non-GAAP) 43.5$

  38. Slide 38: Reconciliation of Non-GAAP Measures (cont'd)

    38 ($ in millions, except per share) Reconciliation of Non-GAAP Measures (cont’d) 31-Mar-14 30-Jun-14 30-Sep-14 30-Sep-13 30-Sep-14 Adjustments to diluted earnings per share: Income per share - diluted 0.03$ 0.05$ 0.08$ 0.11$ 0.16$ Adjustments to diluted earnings per share (non-GAAP) (1) 0.11 0.09 0

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