National Bank Holdings Corporation · NYSE:NBHC

National Bank — Investor Presentation (May 2015)

39 slides from National Bank's investor presentation, May 8, 2015

  1. Slide 1: Q1 2015 Investor Presentation

    1 Q1 2015 Investor Presentation

  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 i National Bank Holdings

  4. Slide 4: Company overview and key statistics

    4  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 with quality loan originations averaging over $200mm/qua

  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:  Strong loan growth momentum:  1Q 2015 originations of $204mm, increase of 12% over prior quarter  Originations of $

  6. Slide 6: Guide to Common Sense Banking

    GUIDE TO COMMON SENSE BANKING a OUR PROMISE BANK WITH COMMON SENSE NBH Bank champions a new era of common sense banki relationships with local communities as the accountable, straight, “roating jand insightful alternative to big box banking-as-usual. ELIVER ON OUR PROM WEFOCUSON WE PUT NEEDS-BASED W

  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 Organic Growth Acquisition Growth Client-Centered, Relationship-Driven Enhanced Product Offerings Attractive Markets Disciplined Acquisitions 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 Established Capital Finance Team Established 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  21 commercial bankers  11 NBH specialty bankers  1.4% deposit market share across Colorado  Ranks #5 in market share of Colorado headquartered banks  45 banking centers  14 commercial bankers  3.6% deposit mar

  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 $518 $1,083 $1,643 $1,745 $604 $421 $318 $293 $1.1 $1.5 $2.0 $2.0 4QE12 4QE13 4QE14 1QE15 Originated Purchased $518 $1,083 $1,645 $1,746 $1,315 $771 $517 $470 $1.8 $1.9 $2.2 $2.2 4QE12 4QE13 4QE14 1QE15 Originated Purchased Comm. 41% Agriculture 6% Owner Occupied 7% CRE 14% Resi 30% Consumer 2% 

  13. Slide 13: Loans Credit Quality

    13 7% 6% 6% 5% 4% 3% 3% 2% 3% 1%1% 11%4% 2%<1% 5% 6% 26% 2% 2% Loans Credit Quality ($2.2 Billion Outstanding) Portfolio Characteristics 1Includes owner-occupied CRE. Consumer, 30.2% Non Owner- Occupied CRE, 17.6% Commercial & Industrial1, 52.2%  1Q15 annualized non 310-30 net charge offs of 4 bps

  14. Slide 14: $150 Million Energy Portfolio

    14 $150 Million Energy Portfolio Energy Portfolio Profile  6.8% of loans, 3.3% of earning assets  Granular - $6.8mm avg. balance per relationship  Strong credit quality at 3/31/2015  Prolonged/further pricing pressure could increase stress on energy clients; however, client capital and liquidity

  15. Slide 15: Strong Credit Quality on Non 310-30 Loans

    15 $ 220.4 $ 23.9 $ 196.5 Inc. in Accr. Yield (Recog. Over Time) Impairments ( 310-30 Provision) Net Economic Impact Attractive $250 Million of 310-30 Loan Pools Strong Credit Quality of Non 310-30 Loans Strong Loss Share Coverage of Total NPAs Credit Quality ($ in millions) Net Charge-Offs Allowanc

  16. Slide 16: Growing Low Cost Transaction Accounts

    16 0.64% 0.41% 0.37% 0.36% FY12 FY13 FY14 1Q15 Deposit Composition Cost of Deposits Time Deposit Maturity (1QE15) ($ in millions) Average Transaction Deposits & Repos Average Time Deposits Avg Rate 0.60% 0.65% 0.84% 1.08% 1.23% 1.28% Growing Low Cost Transaction Accounts $2,402 $2,453 $2,520 $2,679

  17. Slide 17: Delivering on Commercial Banking Strategy

    17 Delivering on Commercial Banking Strategy Invested in Commercial Capabilities  Team of 52 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 agri

  18. Slide 18: Delivering on Consumer & Small Business Banking Strategy

    18 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

  19. Slide 19: Disciplined Acquirer with Future Opportunities

    19 Disciplined Acquirer with 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 $170mm¹  Management team experienced with M&A Announced Acquisition of Pine River Valley Bank Potential

  20. Slide 20: Financial Overview

    Financial Overview i National Bank Holdings

  21. Slide 21: First Quarter 2015 Highlights

    21  Grew the strategic loan portfolio by $77.1 million, or 15.9% annualized, driven by $203.7 million in originations.  Credit quality remained strong, as annualized net charge-offs in the non 310-30 portfolio were only 0.04% of average non 310-30 loans.  Successfully exited $23.2 million, or 46.

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

    22 0.19% 0.26% 0.17% 0.46% 0.45% 0.43% 0.65% 0.71% 0.60% 1Q14 4Q14 1Q15 Reported Adjusted On the Path to 1% ROATA Reported and Adjusted1 ROATA $0.03 $0.06 $0.03 $0.12 $0.13 $0.14 $0.15 $0.19 $0.17 1Q14 4Q14 1Q15 Reported Adjusted Reported and Adjusted1 Diluted EPS Accounting “noise” is burning-off:

  23. Slide 23: Low-Risk Balance Sheet

    23 Originated $1,746 Covered $30 Non-Covered $190 Covered $142 Non- Covered $108 Originated 79% Acquisition Marked 13% Acquisition Marked & Covered 8% 34% 38% 45% 44% 43% 50% 42% 38% 14% 4% 5% 10%2% 1% 1% 1%7% 7% 7% 7% 4Q12 4Q13 4Q14 1Q15 Loans Investment Securities Cash FDIC Indemnification Asset O

  24. Slide 24: Strong Covered Asset Performance

    24 $48 $45 $17 $10 $39 $20 $22 $18 $87 $64 $39 $28 YE12 YE13 YE14 1QE15 Projected Improved Client Cash Flows Projected FDIC Loss-Share Billings Covered Assets Covered Assets Strong Covered Asset Performance FDIC Loss-Share Related ($ in millions)  Quarterly valuations continue to show cash flow imp

  25. Slide 25: Investment securities portfolio

    25 21% 6% 72% 1% Mortgage Backed Securities - Fixed Rate Mortgage Backed Securities - ARMs Collateralized Mortgage Obligations - Fixed Rate Collateralized Mortgage Obligations - Floating Rate 31-Dec-13 31-Dec14 31-Mar 15 Book Value Available-for-Sale $ 1,816 $ 1,484 $1,407 Held-to-Maturity 622 516 4

  26. Slide 26: Net Interest Income Sensitivity

    26 . 1 12-month simulated net interest income impact using management projected balance sheet and an immediate parallel shift in the yield curve. Rate risk measures are adjusted to reflect less excess cash as a result of reducing excess capital to 10% leverage ratio. NBHC Balance Sheet Positioned to

  27. Slide 27: Strong Yields on Loan Portfolio

    27 3.98% 3.81% 3.85% 3.59% FY12 FY13 FY14 1Q15 $204.3 $179.0 $170.2 $39.5 FY12 FY13 FY14 1Q15 $ 37.4 $ 20.2 $(1.7) $(0.5) $31.2 $30.2 $30.4 $7.4 13.3 % 14.4 % 15.1 % 15.9 % FY12 FY13 FY14 1Q15 Non-interest income Adjusted NII Adj. Fee Income Ratio Net Interest Margin1 Note: Please refer to the appen

  28. Slide 28: Expenses and efficiency actions

    28 $41 $42 $41 $39 $38 $38 $37 $38 $36 $7 $3 $2 $4 $2 $3 $2 $(9) $0.4 $(1) $ 0 $ 4 $ 1 $(1) $(1) $(1) $ 4 $(0.0) $48 $45 $47 $44 $39 $40 $38 $33 $37 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Operating Problem Loan / OREO Other¹ $174 $163 $151 $149 $29 $17 $(2) $2 $7 $4 $1 $(2) $210 $184 $150 $149

  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 1Q15 adjustments to ROATA.  Replacing high- yielding purchased loans with originated loans  FDIC indem asset negative amortization ending < two years  FDIC loss share ending  Reducti

  31. Slide 31: Key Financial Targets

    31 Fully Levered Targets Assets ~$8bn–$10bn Efficiency Ratio <60% ROATA ≥1.00% ROATCE 12%–14% Dividend Payout Ratio 25% Tier 1 Leverage 9% Key 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:  Strong loan growth momentum:  1Q 2015 originations of $204mm, increase of 12% over prior quarter  Originations of

  33. Slide 33: Appendix

    Appendix i National Bank Holdings

  34. Slide 34: Acquisition transactions and returns

    34 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

  35. Slide 35: Executive team experience

    35  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

  36. Slide 36: Board of Directors

    36 Title Past ExperienceName 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 o

  37. Slide 37: Reconciliation of Non-GAAP Measures

    37 ($ in millions) Reconciliation of Non-GAAP Measures 31-Mar-14 31-Dec-14 31-Mar-15 31-Dec-12 31-Dec-13 31-Dec-14 Net income 1.4$ 2.3$ 1.2$ (0.5)$ 6.9$ 9.2$ Add: impact of core deposit intangible amortization expense, after tax 0.8 0.8 0.8 3.2 3.2 3.3 Net income adjusted for impact of cored deposit

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

    38 ($ in millions) Reconciliation of Non-GAAP Measures (cont’d) 31-Mar-14 31-Dec-14 31-Mar-15 31-Dec-12 31-Dec-13 31-Dec-14 Net interest income 43.3$ 42.6$ 39.5$ 204.3$ 179.0$ 170.2$ Add: impact of taxable equivalent adjustment 0.2 0.3 0.4 - - 0.9 Adjusted net interest income, fully taxable equivale

  39. Slide 39: Reconciliation of Non-GAAP Measures (cont'd)

    39 ($ in millions, except per share) Reconciliation of Non-GAAP Measures (cont’d) 31-Mar-14 31-Dec-14 31-Mar-15 31-Dec-12 31-Dec-13 31-Dec-14 Adjustments to diluted earnings per share: Income per share - diluted 0.03$ 0.06$ 0.03$ (0.01)$ 0.14$ 0.22$ Adjustments to diluted earnings per share (non-GAA

National Bank Holdings — Investor Presentation (May 2015) on 6ix