National Bank Holdings Corporation · NYSE:NBHC
National Bank — Q2 2016 Earnings Presentation
31 slides from National Bank's earnings presentation, Aug 5, 2016
Slide 1: Q2 2016 Investor Presentation
Q2 2016 Investor Presentation
Slide 2: 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
Slide 3: Company Overview
Company Overview ii National Bank Holdings
Slide 4: Created meaningful scale and market share in attractive markets of Colorado and Kansas City
Created meaningful scale and market share in attractive markets of Colorado and Kansas City MSA through failed/troubled bank acquisitions Revenue Growth Successful loan growth strategies with 22.7% second quarter annualized loan growth Record 2Q loan originations of $317 million YoY transaction depo
Slide 5: Strategic Execution Highlights
Strategic Execution Highlights Loan Growth 18% $482 million Originated Loan Growth Buybacks $475 million 46% Shares repurchased since early 2013 @ average price of $19.87 Accelerated organic growth Record loan originations driven by deeper market penetration Relationship banking focused strategies E
Slide 6: NBHC Markets and Family of Brands
NBHC Markets and Family of Brands 42 banking centers Ranks #5 in deposit market share in Kansas City MSA for local banks Population: Metro KC – 2.1 million Favorable demographics vs. national levels in: Unemployment ‒ Household Income Business Climate & Recognition #2 Best City for Jobs (CBS MoneyWa
Slide 7: Relationship banking model with a focus on the markets we serve
Relationship banking model with a focus on the markets we serve Total loans grew 18% over prior year Originated loans grew 26% over prior year Acquired problem loans decreased 30% over prior year Total Loan Composition Total Loans New Loan Originations Organic Loan Growth Strategy is Accelerating Co
Slide 8: Loan Credit Quality ($2.7 Billion Outstanding)
Loan Credit Quality ($2.7 Billion Outstanding) Consumer, 26.4% Non Owner-Occupied CRE, 19.3% Commercial & Industrial, 54.3%1 Portfolio Characteristics Low historical non 310-30 net charge offs – 2014: 0.06%, 2015: 0.12%, and 2016 YTD: Reported 0.34%/0.06% (excluding energy) Non-Energy loans have exc
Slide 9: $105 Million Energy Portfolio
$105 Million Energy Portfolio Energy Portfolio Profile 3.8% of loans, 2.4% of earning assets, 20.1% of risk based capital Decreased $42.2 million or 28.7% from December 31, 2015 Three energy sector loans with balances of $25.8 million were on non-accrual at June 30, 2016 The allowance for loan losse
Slide 10: Attractive $169 Million 310-30 Loan Pools
Attractive $169 Million 310-30 Loan Pools Credit Quality ($ in millions) Net Charge-offs, Annualized Allowance for Loan Losses Strong Credit Quality on $2.6 Billion of Non 310-30 Loans1 Accretable Yield Reclassification Life-to-Date YTD net charge-offs for non 310-30 loans 34 basis points, annualize
Slide 11: Credit quality improving across majority of portfolio
Credit quality improving across majority of portfolio ($ in millions) Credit Quality Non 310-30 Classified Loans Non-performing Loans Non-performing Assets Total non-310-30 non-performing loans make up 1.46% of total loans. Excluding energy sector, ratio falls to 0.47% and shows continued improving
Slide 12: Deposit Composition
Deposit Composition Strong Transaction Deposit Growth ($ in millions) Average Transaction Deposits & Repos1 Average Time Deposits1 Growing Low Cost Transaction Accounts 18% (24)% (6) bps YoY average transaction deposits increased $250.1 million, or 10.1%, driven by demand and other low-cost deposits
Slide 13: Financial Overview
Financial Overview 13 ii National Bank Holdings
Slide 14: Second quarter results summary
At June 30, 2016, loans totaled $2.7 billion and increased $146.5 million, or 22.7% annualized, on the strength of record originations of $316.9 million. Total loans at June 30, 2016 increased $410.0 million, or 17.6%, since June 30, 2015. Fully taxable equivalent net interest income totaled $35.8 m
Slide 15: Building the Path to 1% ROATA
Underlying results show steady progress towards long-term profitability targets. Reaching revenue inflection point as originated loans are outpacing the impact of decreasing 20+% yielding ASC 310-30 acquired loans (2Q16 totaled $7.8 million of accretion income and decreased $4.0 million vs 2Q15) Exp
Slide 16: Net Interest Margin and Net Interest Income
Net Interest Margin1 Emerging Profitability Net Interest Income1 Replacing High-Yielding Acquired Loans with Originations P&L Metrics ($ in millions) Q2 2016 fully taxable net interest income totaled $35.8 million, a $3.2 million decrease from prior quarter due to lower levels of higher yielding 310
Slide 17: Net Interest Income Sensitivity
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 9% leverage ratio. NBHC Balance Sheet Positioned to Benef
Slide 18: Non-Interest Income & Expense
Non-Interest Income & Expense 1 Adjusted non-interest income excludes gain on sale of securities, FDIC indemnification asset amortization/ gain on termination of FDIC agreement, FDIC loss sharing income (expense), gain on previously charged-off acquired loans and OREO related write-ups, bargain purc
Slide 19: Investment Portfolio Summary
31-Dec 14 31-Dec 15 30-Jun 16 Book Value Available-for-Sale $ 1,484 $1,168 $1,037 Held-to-Maturity 516 416 371 "Locked-in" Gains (HTM) 15 11 10 Total Book Value $ 2,015 $1,596 $1,418 Available-for-Sale Unrealized Gains / (Losses) (5) (11) 9 Held-to-Maturity Unrealized Gains / (Losses) 4 1 7 Fair Mar
Slide 20: Path to 1% ROATA Organic Earnings Potential
Path to 1% ROATA Organic Earnings Potential 1Please refer to the appendix for a reconciliation of non-GAAP financial metrics. 2Represents 2Q16 annualized adjustment to ROATA for $4.3 million energy provision, offset by $1.8 million gain on sale of a building. Ramp-up of loan production Maintain low
Slide 21: Key Financial Targets
Fully Levered Targets Assets ~$6bn–$8bn Efficiency Ratio <60% ROATA ≥1.00% ROATCE 12%–14% Dividend Payout Ratio 25% Tier 1 Leverage 9% Key Financial Targets
Slide 22: Investment Highlights
Investment Highlights 1The most directly comparable GAAP measure is Return on Average Assets (ROAA). Please refer to the appendix for a reconciliation of non-GAAP financial metrics. 2 Trailing Twelve Months through 30-June-16. Successfully rebuilding failed/troubled banks with organic growth strateg
Slide 23: Appendix
Appendix 24 ii National Bank Holdings
Slide 24: Executive management team
Head of Business Services at Regions Financial, where he also led the transformation of wholesale lines of business Senior management roles in small business, commercial banking, private banking, corporate marketing and change management, and Management Operating Committee member at Bank of America;
Slide 25: Board of Directors
Title Past Experience Name Tim Laney Chairman, President and CEO Senior EVP and Head of Business Services of Regions Financial EVP and Management Operating Committee at Bank of America Ralph Clermont Lead Director / Chairman of the Audit and Risk Committee Managing Partner of the St. Louis office of
Slide 26: Key Statistics by MSA
Key Statistics by MSA Source: FHFA, SNL Financial, U.S. Census, U.S. Bureau of Economic Analysis. Note: “Front Range” statistics include populated weighted values for Denver, Boulder, Colorado Springs, Fort Collins, and Greeley MSAs. Deposit data as of 30-Jun-15. Front Range unemployment based on a
Slide 27: Guide to Common Sense Banking
GUIDE TO COMMON SENSE BANKING a OURPROMISE BANK WITH COMMON SENSE NBH Bank champions a new era of common sense banking by building relationships with local communities as the accountable, straight-shooting and insightful alternative to big box banking-as-usual HOW WE DELIVER ON OUR PROMISE We PUT WE
Slide 28: Reconciliation of Non-GAAP Measures
($ in millions) Reconciliation of Non-GAAP Measures As of and for the Six Months Ended Years Ended 30-Jun-15 31-Dec-15 30-Jun-16 30-Jun-16 31-Dec-14 31-Dec-15 Return on Average Tangible Assets and Return on Tangible Equity: Net income (loss) (1.3) $ 3.3 $ 4.5 $ 4.8 $ 9.2 $ 4.9 $ Add: impact of core
Slide 29: Reconciliation of Non-GAAP Measures (cont'd)
($ in millions) Reconciliation of Non-GAAP Measures (cont’d) 30-Jun-15 31-Dec-15 31-Dec-13 31-Dec-14 31-Dec-15 Net interest income 38.9 $ 39.9 $ 179.0 $ 170.2 $ 156.9 $ Add: impact of taxable equivalent adjustment 0.6 0.9 - 0.9 2.7 Adjusted net interest income, fully taxable equivalent (non-GAAP) 39
Slide 30: Reconciliation of Non-GAAP Measures (cont'd)
($ in millions, except per share) Reconciliation of Non-GAAP Measures (cont’d) As of and for the Six Months Ended 30-Jun-15 31-Dec-15 30-Jun-16 31-Dec-14 31-Dec-15 30-Jun-16 Adjustments to diluted earnings per share: Income (loss) per share - diluted (0.04) $ 0.11 $ 0.15 $ 0.22 $ 0.14 $ 0.16 $ Adjus
Slide 31: 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 30-Jun-15 31-Dec-15 30-Jun-16 30-Jun-16 Common book value per share calculations: Total shareholders' equity 718.3 617.5 598.9 Divided by: ending shares outstanding 35,053,339 30,358,509
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