National Bank Holdings Corporation · NYSE:NBHC

National Bank — Investor Presentation (November 2015)

37 slides from National Bank's investor presentation, Nov 9, 2015

  1. Slide 1: Forward-Looking Statements

    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,” “poten

  2. Slide 2: Forward-Looking Statements

    This resentation contains “Frvar-ookng statements” within the mesing ofthe Private Secures Litigation Reform Act of 1995, Fontalookingsiatements contain swords such aici” beieve” Yen” "woul" “shoud” “oul *my.” predict" "Seek "poten will" "estimate" “tage.” plan." projst” “continuing” ooging,” expec.

  3. Slide 3: A Foundation for Growth: Company Overview

    A Foundation for Growth Company Overview NBHC 3Q15 Snapshot  Began banking operations in 2010/2011 with four acquisitions in 12 months (three failed banks) Created meaningful scale and market share in attractive markets of Colorado and Kansas City MSA Successful organic asset generation strategy wi

  4. Slide 4: Investment Highlights

    Investment Highlights Disciplined focus on building meaningful scale and market share in attractive markets Successfully rebuilding failed banks with organic growth strategy:   Strong loan growth momentum:  3Q 2015 originations of $254mm, increase of 25% over prior year. YTD originations of $728m

  5. Slide 5: Our Promise: Bank with Common Sense

    OUR PROMISE BANK WITH COMMON SENSE NBH Bank champions a new era of common sense banking by building relationshi ps with localcommunities as the accountable,straight-shooting and insightfulalternative to bigbox banking-as-usual. Big Box Bank Refugees:Discontent, defiant and self-reliant,our clientsar

  6. Slide 6: NBHC Leadership

    NBHC LEADERSHIP Executive Team Tim Laney Chairman, President & Chief Executive Officer Brian Lilly CFO, Chief of M&A and Strategy Zsolt Bessko Chief Administrative Officer & General Counsel Richard Newfield Chief Risk Management Officer Tom Metzger Chief of Enterprise Technology & Integration Market

  7. Slide 7: Our Objectives

    Our Objectives Leading Regional Community Bank Holding Company Scalable Operating Platform & Efficiencies Attractive Markets Disciplined Acquisitions Client-Centered, Relationship-Driven Enhanced Product Offerings Organic Growth Acquisition Growth Opportunistic Capital Management 8

  8. Slide 8: Strategic Execution Highlights

    Strategic Execution Highlights Further Franchise Development Accelerated Organic Growth Managed Capital Opportunistically Expanded Efficiency Initiatives       Repurchased $440 million (42% of outstanding shares) since early 20131 Successfully repurchased $100 million shares through tender off

  9. Slide 9: NBHC Markets and Family of Brands

    NBHC Markets and Family of Brands Attractive and Growing Markets Denver KS Kansas City MO 49  53 banking centers  20 com n Kansas City  15 NBH specialty bankers  1.1% deposit market share across rs in Kansas Colorado  Ranks #6 in market share of Colorado headquartered banks banking center as, T

  10. Slide 10: Our Markets are Attractive

    Our Markets are Attractive Key Statistics by MSA Source: Federal Housing Finance Agency, SNL Financial, U.S. Bureau of Economic Analysis, U.S. Census Note: “Front Range” statistics include populated weighted values for Denver, Boulder, Colorado Springs, Fort Collins, and Greeley MSAs. Deposit data a

  11. Slide 11: Organic Loan Growth Strategy is Accelerating

    Organic Loan Growth Strategy is Accelerating Total Loans (Total $ in billions) Inflection Point Strategic (Total $ in billions) Non-Strategic Strategic Loan Composition ($ in millions) Consumer 2% Commercial Related 70% $2,380 $2.5 $711 Agriculture 6% Owner Occupied CRE 14% $202 $179 $156 $143 8% 4Q

  12. Slide 12: Loans Credit Quality

    Loans Credit Quality ($2.5 Billion Outstanding) Portfolio Characteristics 2% 1% 9% Commercial & Industrial1, 54.1% Consumer, 28.6% YTD annualized non 310-30 net charge offs of 5 bps FY 2014 non 310-30 net charge-offs of 6 bps Commercial loans originated YTD: 6%  25% 6%   5% Average funding of $1.

  13. Slide 13: $147 Million Energy Portfolio

    $147 Million Energy Portfolio Energy Portfolio Profile     5.8% of loans, 3.4% of earning assets Decreased $28 million or 16% from prior year end Granular - $5.3mm avg. balance per relationship Energy Production and Midstream sectors are performing well with no non-performing loans Energy Servic

  14. Slide 14: Credit Quality

    Credit Quality ($ in millions) Strong Credit Quality on $2.3 Billion of Non 310-30 Loans Attractive $221 Million of 310-30 Loan Pools Accretable Yield Reclassification Life-to-Date Net Charge-Offs Allowance for Loan Losses1 $ 225.5 $ 201.1 $ 24.4 1.06% .79% 1.00% .93% .92% .90% .80% Inc. in Accretab

  15. Slide 15: Growing Low Cost Transaction Accounts

    Growing Low Cost Transaction Accounts ($ in millions) Average Transaction Deposits & Repos Average Time Deposits Deposit Composition Demand & NOW Savings & MM Retail Time Jumbo Time 2,774 $4,201 $3,838 $3,766 $3,832 $3,875 $3,762 $2,520 $2,453 $2,402 $1,833 68% Non-Time YE12 YE13 YE14 1QE15 2QE15 3Q

  16. Slide 16: Delivering on Commercial Banking Strategy

    Delivering on Commercial Banking Strategy Invested in Commercial Capabilities Team of 55 experienced commercial bankers Committed to consistent top-grading of bankers Established Capital Finance, Government and Non-Profit Banking specialty lines Industry expertise in energy, food and agriculture Bui

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

    Delivering on Consumer & Small Business Banking Strategy Optimizing Banking Center Distribution Consolidated 8 banking and 32 retirement centers since 2012 Rolled out teller staffing efficiency model Consolidated management responsibilities Built culture of accountability     Well Positioned For

  18. Slide 18: Disciplined Acquirer with M&A Focus

    Disciplined Acquirer with M&A Focus Future Opportunities Target Geographies      Banks Specialty finance / asset generators Wealth management / trust Banking center networks Reasonable TBV dilution, earnings contribution, IRR criteria Completed Acquisition of Pine River Valley Bank Strong South

  19. Slide 19: M&A Focus

    M&A Focus Target Geographies = Banks = Specialty finance / nerators = Wealth management / trust = Banking center networks = Reasonable TBV dilution, eamings contribution, IRR criteria Bi pleted Acquisition of Pine = Strong Southwest Colorado markets with attractive fill-in locations ‘Opportunities?

  20. Slide 20: Third Quarter 2015 Results Summary

    Third Quarter 2015 Results Summary Total loans grew $194.6 million driven by $253.7 million of originations and the acquisition of Pine River. Excluding Pine River, total loans grew $131.7 million, or 22.4% annualized.   Annualized non 310-30 net charge-offs were only 0.02% of average non 310-30 l

  21. Slide 21: On the Path to 1% ROATA

    On the Path Accounting “noise” is burning-off: to 1% ROATA Reported and Adjusted1 ROATA • Significant impact of non-cash FDIC indemnification asset amortization charges is burning-off Aggressively resolving acquired problem assets FDIC loss-sharing agreements terminated during Q4 2015 0.64% • • Will

  22. Slide 22: Low-Risk Balance Sheet

    Low-Risk Balance Sheet Marked and Covered Loan Portfolio Total Assets ($ in billions) ($ in millions) Non 310-30 Loans $2,302mm 91% Loans Investment Securities Cash Other Assets $5.4bn $4.9bn $5.0bn $4.8bn $4.8bn $4.8bn 5% Covered $27 Non-Covered $201 Covered $128 Non-Covered $93 310-30 Loan Pools $

  23. Slide 23: Covered Assets

    Covered Assets ($ in millions) Covered Assets Strong Covered Asset Performance Quarterly valuations continue to show cash flow improvements in covered assets  $654 $46  Most covered loans accounted for under ASC 310-30; yielding 19.50% in 3Q15 $348 $212 $188 $180  $166 FDIC loss-sharing agreement

  24. Slide 24: Conservative Investment Portfolio

    Conservative Investment Portfolio ($ in millions) Investments by Asset Class1 (3Q15) 1%  100% of portfolio AAA rated or U.S. agency backed2 Stable duration of 3.3 years OCI fluctuations minimized by 26% of portfolio in Held-To-Maturity As of September 30, 2015 AOCI was $8.7 million gain, net of tax

  25. Slide 25: Net Interest Income Sensitivity

    Net Interest Income Sensitivity NBHC Balance Sheet Positioned to Benefit From Rising Rate Environment Net Interest Income Change1 8.0 % 4.72 % 4.0 % 0.0 % (4.0)% -50 bps +100 bps +200bps Interest Rate Shock . 1 12-month simulated net interest income impact using management projected balance sheet an

  26. Slide 26: P&L Metrics

    P&L Metrics ($ in millions) Net Interest Income Replacing High-Yielding Purchased Loans with Originations Net Interest Margin1 $179.0 $170.2 3.85% 3.81% FY13 FY14 1Q15 2Q15 3Q15 FY13 FY14 1Q15 2Q15 3Q15 Strong Yields on Loan Portfolio Reported and Adjusted Non-Interest Income2 19.4 % 19.50% 19.32% 1

  27. Slide 27: Expenses

    ($ in millions) Expenses Annual Quarterly $47 $45 $44 $210 $40 $39 $4 $0 $40 $7 $38 $39 $0 $37 $33 $3 $2 $1 $0 $2 $3 $5 $6 $(2) $(2) FY12 FY13 FY14 1Q15 Annualized 2Q15 Annualized 3Q15 Annualized 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Operating Problem Loan / OREO Other¹ Operating Problem

  28. Slide 28: Expenses

    cc Expen ” 7 s210 b a Ferg rea 201s OS 2010 2015 401 tom 2014 201 MOM 1OIS 2015 2015, copes srwomsiianicneo pidonetny operating ProbmLaan/OREO sar ons Taken Operating Improvement In Consolidated 8 banking and 32 retirement centers, shifting Continuous improvement focus focus toward core traditional

  29. Slide 29: Organic Earnings Potential: Path to 1% ROATA

    Organic Earnings Potential Path to 1% ROATA Target ROATA of 1.00% YTD 3Q 2015¹ FDIC Accounting Noise & Workout Expenses Organic Growth Non-Strategic Loans & Investment Securities Pro Forma production  Fee business 1Please refer to the appendix for a reconciliation of non-GAAP financial metrics. 2Re

  30. Slide 30: Key Financial Targets

    Key Financial Targets Fully Levered Targets ~$8bn–$10bn Assets Efficiency Ratio <60% ROATA ≥1.00% ROATCE 12%–14% Dividend Payout Ratio 25% Tier 1 Leverage 9% 31

  31. Slide 31: Investment Highlights

    Investment Highlights Disciplined focus on building meaningful scale and market share in attractive markets Successfully rebuilding failed banks with organic growth strategy:   Strong loan growth momentum:  3Q 2015 originations of $254mm, increase of 25% over prior year. YTD originations of $729m

  32. Slide 32: NBHC Management Team

    NBHC Management Team 34 Tom Metzger Chief of Enterprise Technology & Integration & President, Bank Midwest & Hillcrest Bank (42 years in banking)  Bank president and chief risk officer and group EVP of Citizens Financial Group  Executive roles at US Bank, Firstar Bank and Mercantile Bank Zsolt Bes

  33. Slide 33: Accomplished Board of Directors

    Accomplished Board of Directors Name Title Past Experience Tim Laney Chairman, President and CEO Lead Director / Chairman of the Audit and Risk Committee Ralph Clermont  Managing Partner of the St. Louis office of KPMG LLP Frank Cahouet Director   Senior Managing Director at Ernst & Young Corpora

  34. Slide 34: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures ($ in millions) As of and for the Nine Months Ended As of and for the Three Months Ended 30-Sep-14 30-Jun-15 30-Sep-15 30-Sep-14 30-Sep-15 Net incom e (los s ) $ 3.3 $ (1.3) $ 1.6 $ 6.9 $ 1.5 Add: im pact of core depos it intangible am ortization expens e, after t

  35. Slide 35: Reconciliation of Non-GAAP Measures (cont'd)

    Reconciliation of Non-GAAP Measures (cont’d) As of and for the ($ in millions) As of and for the Three Months Ended Nine Months Ended 30-Sep-14 30-Jun-15 30-Sep-15 30-Sep-14 30-Sep-15 Net interes t incom e Add: im pact of taxable equivalent adjus tm ent $ 41.9 0.2 $ 38.9 0.5 $ 38.7 0.8 $ 127.7 0.6 $

  36. Slide 36: Reconciliation of Non-GAAP Measures (cont'd)

    Reconciliation ($ in millions, except per share) of Non-GAAP Measures (cont’d) As of and for the As of and for the Three Months Ended Nine Months Ended 30-Sep-14 30-Jun-15 30-Sep-15 30-Sep-14 30-Sep-15 Adjustments to diluted earnings per share: Incom e (los s ) per s hare - diluted $ 0.08 $ (0.04) $

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

    (Sin millions, except per share) be ofanatorine fs olandor tne Three Months Ended ine Monts Ended WSeete uns OSes —DSep td WSS ‘Adjustments touted earnings per share: Income (oss) gershare di s s 000s ‘Adjustments to return on average tangible assets: ‘enuaiaed austen netincome (non GAP)" 1 S$ m9 $

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