National Bank Holdings Corporation · NYSE:NBHC
National Bank — Investor Presentation (February 2020)
34 slides from National Bank's investor presentation, Feb 7, 2020
Slide 1: 2019 Investor Presentation
2019 INVESTOR PRESENTATION HE National Bank Holdings
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 future economic stress while providing excellent risk-adjusted
Slide 6: Effective Coverage in Attractive Markets
EFFECTIVE COVERAGE IN ATTRACTIVE MARKETS 6 ..44 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 2020 Population (mm) 330.3 3.0 4.8 2.2 1.2 9.9 Projected Population 5yr CAGR ('20-'25E) 0.6% 1.3% 1.4% 0.6% 1.3% 1.5% 2020 Median Household Income $66.0K $83.8K $80.9K $69.7K $78.8K $75.2K 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 2019 Results Assets ~$6bn - $8bn ~$6bn - $8bn $6bn ROATA > 1.00% > 1.50% 1.42% ROATCE 12% - 14% 14% - 15% 13% Dividend Payout Ratio 30% 30 - 40% 29% Efficiency Ratio < 60% < 60% 61% Tier 1 Leve
Slide 11: Capital Deployment Drives Outsized Shareholder Returns
CAPITAL DEPLOYMENT DRIVES OUTSIZED SHAREHOLDER RETURNS 11 Organic Growth $ 0.4 $ 4.1 4Q12 4Q19 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 122%
Slide 12: Consistent Progress Towards Long-Term Profitability Targets
0.57% 0.38% 1.15% 1.42% 0.44% 0.11% 2016 2017 2018 2019 Non-Adjusted Adjustments CONSISTENT PROGRESS TOWARDS LONG-TERM PROFITABILITY TARGETS 12 Steady growth • Total loan originations of $1.2 billion for the second consecutive year. • Originated and acquired(2) loans grew 8.5%, 4Q19 over 4Q18, due t
Slide 13: Strong Loan Growth
Owner Occupied CRE 17% CRE 14% Acquired 310-30 Loans 1% Resi Mortgage 17% Other Consumer 1% C & I 50% Loan Composition ($4.4 Billion) $0.7 $0.9 $1.0 $0.9 $1.2 $1.2 FY13 FY14 FY15 FY16 FY17 FY18 FY19 STRONG LOAN GROWTH 13 Highlights . Portfolio built on a relationship banking strategy, with emphasis
Slide 14: Uniquely Diversified $4.4 Billion Loan Portfolio
C&I and Owner Occupied CRE 68% Non Owner- Occupied CRE 14% Consumer 18% UNIQUELY DIVERSIFIED $4.4 BILLION LOAN PORTFOLIO 14 Concentrations .. Self-imposed concentration limits ensure a granular and diverse loan portfolio and protect against downside risk to any particular industry or real estate sec
Slide 15: Strong Credit Quality
0.10% 0.12% 0.02% 0.75% 0.26% YE16 YE17 YE18 YE19 Non energy charge-offs Energy charge-offs Acquired loan charge-offs $18 $19 $24 $21 $1 $1 1.07% 0.66% 0.60% 0.49% 0.65% 0.62% 0.59% 0.48% YE16 YE17 YE18 YE19 Non-performing loans excl. energy Non-performing loans excl. energy as a % of total loans ex
Slide 16: Growing Low Cost Transaction Accounts
Deposit Composition GROWING LOW COST TRANSACTION ACCOUNTS 16 ($ in billions) $12.0 Growing Low Cost Transaction Accounts $12.0 $12.0 Strong Transaction Deposit Growth Low Cost Deposits $2.7 $2.9 $3.5 $3.6 $1.2 $1.1 $1.1 $1.1 2016 2017 2018 2019 Average Transaction Deposits Average Time Deposits 33%
Slide 17: Solid Net Interest Margin
. FTE net interest income totaled $210.9 million and increased $9.0 million, or 4.4%, YoY. .. The FTE net interest margin remained consistent at 3.93% as the increase in average earning assets and earning asset yields were offset by an increase in the cost of funds. The yield on earning assets incre
Slide 18: Improving Operating Leverage
Non-Interest Expense (NIE) ($ in millions) Non-Interest Income IMPROVING OPERATING LEVERAGE 18 $40 $39 $71 $83 FY16 FY17 FY18 FY19 ($ in millions) 68.63% 68.64% 61.15% 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 / Average
Slide 19: Conservative Investment Portfolio
Investments by Asset Class(1) (4Q19) 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: Management Team
20 MANAGEMENT TEAM
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: Management & Directors Beneficial Ownership
MANAGEMENT & DIRECTORS 22 NBHC MANAGEMENT & DIRECTORS BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS(2) G. Timothy Laney 731,131 2.33% Aldis Birkans 44,214 0.14% Richard U. Newfield, Jr. 204,366 0.65% Zsolt K. Besskó 59,952 0.19% Ralph W. Clermont 76,149 0.24% Robert E. Dean 31,290 0.10% Fred J. Joseph 12
Slide 23: Corporate Governance Overview
23 CORPORATE GOVERNANCE OVERVIEW
Slide 24: Best Practices in Governance and Compensation
BEST PRACTICES IN GOVERNANCE AND COMPENSATION Corporate Governance Lead Independent Director with robust role and responsibilities Majority independent Board No hedging or pledging of NBHC shares Annual election of Board members and say-on- pay vote Fully independent Audit & Risk, Compensa
Slide 25: Overview of NBHC's Board of Directors
OVERVIEW OF NBHC’S BOARD OF DIRECTORS 25 N Governance & Nominating C Compensation Committee Chair * Ralph W. Clermont • Lead Independent Director • Former Managing Partner of KPMG, St. Louis office • 39 years of banking and audit experience A Audit & Risk I Independent Robust Lead Director Responsib
Slide 26: NBHC Board Represents a Diverse Range of Qualifications and Skills
4 3 7 6 4 7 3 2 CEO or President of Private or Public Company Other Public Board Experience Financial or Audit Background Banking Industry Marketing or Sales Background Community or Governmental Service Legal or Regulatory Experience IT, Cyber, or Telecom Background NBHC BOARD REPRESENTS A DIVERSE R
Slide 27: Board's Role in Oversight of Risk
The Board is actively engaged in NBHC’s risk management. 27 BOARD’S ROLE IN OVERSIGHT OF RISK Robust Risk Oversight at Board Level Risk Board Oversight Actions Cybersecurity Evolving nature and complexity of the threats from organized cybercriminals and hackers NBHC Audit and Risk Committee is respo
Slide 28: Overview of NBH Bank Board of Directors
OVERVIEW OF NBH BANK BOARD OF DIRECTORS 28 NBH Bank Board Composition Whitney Bartelli Chief Marketing Officer Richard Newfield Chief Risk Management Officer Zsolt Besskó Chief Administrative Officer Christopher Randall EVP, Head of Commercial & Specialty Banking Aldis Birkans CFO Patrick Sobers EVP
Slide 29: Executive Compensation Program
NBH’s executive compensation practices align management incentives with long-term shareholder interests. 29 EXECUTIVE COMPENSATION PROGRAM Components of Executive Compensation (2018) 2018 Compensation Breakdown Additional Compensation Features Component Metrics Base Salary (Cash) Reviewed annually
Slide 30: Community Building
Community Building Our Corporate Social Responsibility strategy guides our focus to contribute to education, workforce development and affordable housing in our communities. We offer thought leadership, volunteerism and financial support for each of these causes across the numerous communities we
Slide 31: Appendix
31 APPENDIX
Slide 32: 31-Dec-19 31-Dec-18 31-Dec-17 Net income 80.4 $ 61.5 $ 14.6 $ Add: impact of
31-Dec-19 31-Dec-18 31-Dec-17 Net income 80.4 $ 61.5 $ 14.6 $ Add: impact of core deposit intangible amortization expense, after tax 0.9 1.6 3.3 Net income adjusted for impact of core deposit intangible amortization expense, after tax 81.3 $ 63.1 $ 17.8 $ Average assets 5,837.1 $ 5,607.5 $ 4,705.2 $
Slide 33: 31-Dec-19 31-Dec-18 31-Dec-17 Adjustments to net income: Net income 80.4 $ 61.5 $ 14.6
31-Dec-19 31-Dec-18 31-Dec-17 Adjustments to net income: Net income 80.4 $ 61.5 $ 14.6 $ Adjustments (1) - 6.3 20.4 Adjusted net income (non-GAAP) 80.4 $ 67.8 $ 35.0 $ Adjustments to earnings per share: Earnings per share - diluted 2.55 $ 1.95 $ 0.53 $ Adjustments (1) - 0.21 0.73 Adjusted earnings p
Slide 34: 31-Dec-19 31-Dec-18 31-Dec-17 Net interest income 205.8 $ 7.4 $ 146.3 $ Add: impact
31-Dec-19 31-Dec-18 31-Dec-17 Net interest income 205.8 $ 197.4 $ 146.3 $ Add: impact of taxable equiv alent adjustment 5.1 4.5 5.9 Net interest income, FTE (non-GAAP) 210.9 $ 201.9 $ 152.2 $ Non-interest income 82.8 $ 70.8 $ 39.2 $ Non-interest expense 180.7 $ 189.3 $ 136.7 $ Less: core deposit int
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