National Bank Holdings Corporation · NYSE:NBHC
National Bank — Q2 2021 Earnings Presentation
36 slides from National Bank's earnings presentation, Jul 26, 2021
Slide 1: Q2 2021 Investor Presentation
Q2 – 2021 INVESTOR PRESENTATION
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains “forward-looking statements” within the meaning of the deferred tax assets or the need for a valuation allowance; continued consolidation Private Securities Litigation Reform Act of 1995. Forward-looking statements in the financial services indus
Slide 3: About Non-GAAP Financial Measures
ABOUT NON-GAAP FINANCIAL MEASURES Certain of the financial measures and ratios we present, including “average substitute for financial information presented in accordance with GAAP and you tangible assets,” “return on average tangible assets,” “average tangible common should not rely on non-GAAP fin
Slide 4: Company Highlights and Attractive Markets
COMPANY HIGHLIGHTS ATTRACTIVE MARKETS Headquarters Denver, CO Banking Centers(4) 82 Listing NYSE: NBHC BALANCE SHEET 2Q21 Total Assets (mm) $7,136 Total Loans (mm) $4,301 Total Deposits (mm) $6,158 KEY RATIOS YTD21 Common Equity Tier 1 15.3% Tier 1 Leverage 10.6% ROATA(1)(2) 1.53% 40 banking centers
Slide 5: Recent Recognition
Official RECENT RECOGNITION Sponsor U.S.News: Best Places to Live Rankings Fortress Balance #1 Sheet Largest Publicly Traded Bank HQ’ed in Colorado Robust #1 and #5 Profitability Boulder, CO and Austin, TX Market Presence in Top 5 Best Places to Live(1) Positioned in #3 Attractive Markets Colo
Slide 6: Shareholder Returns
SHAREHOLDER RETURNS Total Shareholder Returns Since 2017 (Through 6/30/2021) 50% 40% 30% 25.2% 20% 19.3% 10% 0% (10%) (20%) (30%) (1) (40%) NBHC KRX Regional Bank Index (50%) 12/31/17 03/31/18 06/30/18 09/30/18 12/31/18 03/31/19 06/30/19 09/30/19 12/31/19 03/31/20 06/30/20 09/30/20 12/31/20 03/31/21
Slide 7: Financial Performance
FINANCIAL PERFORMANCE Bm National Bank Holdings
Slide 8: Second Quarter 2021 Financial Highlights
SECOND QUARTER 2021 FINANCIAL HIGHLIGHTS CAPITAL RATIOS ‒ Strong capital levels with $398 million in excess capital over 7.0% 15.3% Common Equity Tier 1 Ratio common equity tier 1 risk-based regulatory requirement LIQUIDITY ‒ Ample liquidity with access to $2.6 billion in readily available funds Loa
Slide 9: Profitable Steady Growth
PROFITABLE STEADY GROWTH Net Income $88.6 Pre-Provision Net Revenue FTE(1) EPS (Fully Diluted) $2.85 ($ in millions) ($ in millions) $132.1 $2.55 $80.4 Non-Adjusted Non-Adjusted $112.9 Adjusted $2.16 Adjusted $67.8 $0.21 $61.5 $6.3 $83.4 $1.63 $51.0 $1.26 $35.0 $53.7 $54.7 $55.3 $1.95 $61.5 $0.79 $0
Slide 10: Growth Trends
GROWTH TRENDS Total Assets Total Loans Tangible Common Equity(2) ($ in billions) ($ in billions) ($ in millions) $7.1 $739.5 $4.4 $4.4 $4.3 $707.3 $6.7 $4.1 $651.4 $5.9 $5.7 $577.4 $553.3 $3.2 $4.8 $4.7 $4.6 $2.9 $478.9 $482.0 $2.6 (1) (1) YE15 YE16 YE17 YE18 YE19 YE20 2Q21 YE15 YE16 YE17 YE18 YE19
Slide 11: Focus on Efficiency
FOCUS ON EFFICIENCY – FTE efficiency ratio of 63.1% – We have consolidated or sold 47 banking centers, or 46%, since 4Q11 Banking Center Roll-forward +2 + 24 103 - 47 82 Banking Centers Consolidations / 4Q11 M&A(1) Opened Closures 2Q21 (1)Includes our Peoples acquisition completed on January 1, 2018
Slide 12: Regulatory Capital
REGULATORY CAPITAL Capital Ratios – 2Q21 TIER 1 LEVERAGE 10.6% COMMON EQUITY TIER 1 RISK-BASED 15.3% TIER 1 RISK-BASED 15.3% TOTAL RISK-BASED 16.3% TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS(1) 10.5% (1)Represents a non-GAAP financial measure. See Appendix for a reconciliation of these measures. – $3
Slide 13: Credit
CREDIT Bm National Bank Holdings
Slide 14: Uniquely Diversified $4.2 Billion Loan Portfolio
UNIQUELY DIVERSIFIED $4.2 BILLION LOAN PORTFOLIO(1) Concentrations Granular and Well-Diversified Loan Portfolio Consumer 16% ― Self-imposed concentration limits ensure a granular and diverse loan portfolio and protect against downside risk to any particular industry or C&I and Owner Occupied CRE rea
Slide 15: Strong Credit Quality History
STRONG CREDIT QUALITY HISTORY – Allowance for loan losses coverage equal to 353% of non-performing loans – Acquisition fair value marks on acquired loans total $8.8 million, 4.5% of acquired loans or 0.2% of total loans ($ in millions) Non-performing Loans Non-performing Asset Composition 0.60% 0.49
Slide 16: Allowance for Credit Losses
ALLOWANCE FOR CREDIT LOSSES – Allowance to total loan coverage of 1.18% provides coverage for economic uncertainty ACL/Total Loans 1.14% / 1.18%(1) ACL/Total Loans 1.02% $49.0 $44.9 ACL(2) ACL(2) 1/1/2020 6/30/2021 All dollars in millions (1)Excludes PPP loans (2)Investment securities portfolio cons
Slide 17: Balance Sheet
BALANCE SHEET Bm National Bank Holdings
Slide 18: Solid Loan Growth
SOLID LOAN GROWTH Total Loan Originations(1) Non-PPP Loan Originations Loan Composition ($ in billions) ($ in millions) $362.1 ($4.3 Billion) $1.2 $1.2 $1.2 $1.1 $1.0 $1.0 $272.5 $0.9 Owner Occupied CRE 17% $173.1 CRE $132.8 C&I 15% $102.8 49% Resi Mortgage 15% PPP FY15 FY16 FY17 FY18 FY19 FY20 2Q21
Slide 19: High Quality, Highly Liquid Investment Portfolio
HIGH QUALITY, HIGHLY LIQUID INVESTMENT PORTFOLIO $1.3 Billion Investment Portfolio(1) 0.2% U.S. Agency/Sponsored Agency MBS 42.8% U.S. Agency/Sponsored Agency CMO 57.0% Other (1) Excludes FHLB/FRB stock. – 99.8% of portfolio is U.S. agency/sponsored agency backed – 2Q21 yield of 1.41% – 53% of portf
Slide 20: Low Cost Transaction Deposits
LOW COST TRANSACTION DEPOSITS ($ in billions) Growing Low Cost Transaction Accounts Deposit Composition Average Transaction Deposits Average Time Deposits Demand & NOW Savings & MM CDs < $250k CDs >= $250k Total $5.0 $6.2 $4.5 $4.7 $5.7 100% 3% 3% 3% 3% $4.2 12% 19% 14% 21% $3.5 $3.6 36% 36% 37% 37%
Slide 21: Management Team
MANAGEMENT TEAM Bm National Bank Holdings
Slide 22: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM Tim Laney Aldis Birkans Chairman, President & CEO Chief Financial Officer (40 years in banking) (23 years in financial industry) • Head of Business Services at Regions Financial, where he also • Senior Vice President, Treasurer at NBHC led the transformation of wholesale
Slide 23: Management & Directors Beneficial Ownership
MANAGEMENT & DIRECTORS Beneficial Ownership (as of 6/30/21) BENEFICIAL NBHC MANAGEMENT & DIRECTORS PERCENT OF CLASS(2) OWNERSHIP(1) G. Timothy Laney 555,217 1.78% Aldis Birkans 52,641 0.17% Richard U. Newfield, Jr. 182,256 0.59% Angela Petrucci 12,975 0.04% Ralph W. Clermont 82,174 0.27% Robert E. D
Slide 24: Corporate Governance Overview
CORPORATE GOVERNANCE OVERVIEW 24
Slide 25: Best Practices in Governance and Compensation
BEST PRACTICES IN GOVERNANCE AND COMPENSATION NBHC’s corporate governance policies and executive compensation practices support our business and align with best practices Corporate Governance Executive Compensation Lead Independent Director with robust role and Provide the majority of compensati
Slide 26: Overview of NBHC's Board of Directors
OVERVIEW OF NBHC’S BOARD OF DIRECTORS G. Timothy Laney Robert E. Dean A C N *I • President, CEO and Chairman • Former Senior Managing Director of Appointed within last five years • Former Sr Executive VP & Head of Ernst & Young Corporate Finance Business Services at Regions Financial • Practiced cor
Slide 27: NBHC Board Represents a Diverse Range of Qualifications and Skills
NBHC BOARD REPRESENTS A DIVERSE RANGE OF QUALIFICATIONS AND SKILLS Experience or Number of Directors Expertise CEO or President of Private or Public Company 4 Experienced leaders capable of overseeing Other Public Board Experience 3 execution and challenging management Financial or Audit Background
Slide 28: Board's Role in Oversight of Risk
BOARD’S ROLE IN OVERSIGHT OF RISK The Board is actively engaged in NBHC’s risk management. Robust Risk Oversight at Board Level Risk Board Oversight Actions Cybersecurity NBHC Audit and Risk Committee is responsible Employs detection and response mechanisms Evolving nature and complexity of the thre
Slide 29: Overview of NBH Bank Board of Directors
OVERVIEW OF NBH BANK BOARD OF DIRECTORS In addition to the NBHC Board, there is an added layer of oversight through the Board of Directors of NBH Bank, NBHC’s wholly-owned subsidiary NBH Bank Board Composition Aldis Birkans Christopher Randall Chief Financial Officer EVP, Commercial, Specialty and B
Slide 30: Executive Compensation Program
EXECUTIVE COMPENSATION PROGRAM NBH’s executive compensation practices align management incentives with long-term shareholder interests Components of Executive Compensation (2020) Compensation Metrics Tied to Long-Term Strategy Component Metrics Link to Strategy Base Salary • Reviewed annually • Amon
Slide 31: Environmental, Social and Governance (ESG) Matters
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) MATTERS NBH’s long-standing commitment to ESG in all of its business activities • Committed to using environmentally friendly office products and materials and optimizing our office and banking center space. Environmental • Continued investment in our mobil
Slide 32: Appendix
APPENDIX im National Bank Holdings
Slide 33: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES ($ in millions, except per share) As of and for the six months ended As of and for the years ended Return on Average Tangible Assets and Return on Average Tangible Equity 30-Jun-21 31-Dec-20 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16 31-Dec-15 Net income $ 51.0 $ 88.
Slide 34: Reconciliation of Non-GAAP Measures (cont'd)
RECONCILIATION OF NON-GAAP MEASURES (cont’d) ($ in millions, except per share) As of and for the years ended Adjusted Financial Results 31-Dec-18 31-Dec-17 Adjustments to net income: Net income $ 61.5 $ 14.6 Adjustments (1) 6.3 20.4 Adjusted net income (non-GAAP) $ 67.8 $ 35.0 Adjustments to earning
Slide 35: Reconciliation of Non-GAAP Measures (cont'd)
RECONCILIATION OF NON-GAAP MEASURES (cont’d) ($ in millions, except per share) As of and for the six months ended As of and for the years ended Efficiency Ratio 30-Jun-21 31-Dec-20 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16 31-Dec-15 Net interest income $ 90.1 $ 192.9 $ 205.8 $ 197.4 $ 146.3 $ 145.6 $
Slide 36: Reconciliation of Non-GAAP Measures (cont'd)
RECONCILIATION OF NON-GAAP MEASURES (cont’d) ($ in millions, except per share) As of and for the six months ended As of and for the years ended Tangible Common Book Value Ratios 30-Jun-21 31-Dec-20 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16 31-Dec-15 Total shareholders' equity $ 851.9 $ 820.7 $ 766.9 $
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