National Bank Holdings Corporation · NYSE:NBHC

National Bank — Q1 2017 Earnings Presentation

28 slides from National Bank's earnings presentation, May 5, 2017

  1. Slide 1: Q1 2017 Investor Presentation

    Q1 2017 Investor Presentation 1

  2. 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

  3. Slide 3: Company Overview

    Company Overview S ie National Bank Holdings

  4. Slide 4: A Foundation for Growth: Company Overview

    A Foundation for Growth Company Overview Created meaningful scale and market share in attractive markets of Colorado and Kansas City MSA through failed/troubled bank acquisitions Continued strong organic loan growth NBHC 1Q17 Snapshot  Stock Price/52-Week Range $32.15 / $19.46-$34.10 2017 Total Sha

  5. Slide 5: Key Actions and Results

    Key Actions and Results Accelerated organic growth  Increasing loan originations; record $1.1 billion (TTM1) 2016: $1.037 billion 2015: $967 million 2014: $869 million Record TTM1 loan originations driven by deeper market penetration Relationship banking focused strategies Expanded specialty bankin

  6. Slide 6: NBHC Markets and Family of Brands

    NBHC Markets and Family of Brands ONE Charter Three Flags Attractive and Growing Markets Front Range Denver Kansas City MSA for local banks  Favorable demographics vs. national levels in:  Business Climate & Recognition ‒ 4th “Hot Startup” City (Entrepreneur ‒ #15 on “50 Best Cities to Live” List

  7. Slide 7: We Operate in Very Attractive Markets

    We Operate in Very Attractive Key Statistics by MSA Markets 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-16

  8. Slide 8: Organic Loan Growth is Accelerating

    Organic Loan Growth is Accelerating Total Loans Total Loan Composition Consumer 1% Commercial Related 74% Resi 25% C & I 39% CRE 17% Own. Occ. Energy 3% 4QE12 4QE13 4QE14 Originated 4QE15 4QE16 1QE17 Agriculture 5% Acquired¹ New Loan Originations  Portfolio built on a relationship banking strategy

  9. Slide 9: Loan portfolio composition and diversification

    Consumer, 24.9% (Commerc Indus $8.0% ‘Commercial & Industrial, 58.0% and diverse loan portfolio limiting downside any particular industry or real estate sector jual lending segments (shown at left) are limited to no more than 15% of total loan commitments, with the ma jority being 10% or less + Non

  10. Slide 10: Strong Credit Quality on Non-310-30 Loans

    Outstanding Strong Credit Quality on $2.8 Billion of Non 310-30 Loans Credit Quality ($ in millions) Provision for Loan Losses on Non 310-30 Loans Provision for Loan Losses as a % of Non 310-30 Loans Allowance for Loan Losses1 Annualized Net Charge-offs Change in Allowance .06% % Energy Charge-offs

  11. Slide 11: Credit Quality Remains Strong in Non-Energy Portfolio

    Credit Quality Remains ($ in millions) Strong in Non-Energy Portfolio Non-performing Loans Non 310-30 Classified Loans 1.73% 0.99% 0.57% YE13 YE14 YE15 YE16 1Q17 YE13 YE14 YE15 YE16 1Q17 Non-performing loans excl. Energy Non-performing loans excl. Energy as a % of Total Loans excl. energy Non-perfor

  12. Slide 12: $89 Million Energy Portfolio

    $89 Million Energy Portfolio ($ in millions) YE15 YE16 1Q17 Energy Production Energy Services Energy Midstream Energy Portfolio Profile  Energy Midstream – Loans to companies that engage in consolidation, storage and transportation of oil and gas  3.0% of loans, 2.1% of earning assets, 19.3% of ri

  13. Slide 13: Growing Low Cost Transaction Accounts

    Growing Low Cost Transaction Accounts ($ in billions) Average Transaction Deposits Average Time Deposits Deposit Composition Demand & NOW Savings & MM Time $4.0 $3.8 $3.8 $3.8 $3.9 $2.5 $2.4 $2.4 $1.2 70% Non-Time YE13 YE14 YE15 YE16 1Q17 Low Cost Deposits Strong Transaction Deposit Growth  Average

  14. Slide 14: Financial Overview

    Financial Overview ws ie National Bank Holdings

  15. Slide 15: First Quarter 1Q17 Results Summary

    First Quarter 1Q17 Results Summary (All comparisons are to prior quarter unless otherwise noted.) • Total loans ended the quarter at $3.0 billion and increased $92.7 million, or 13.1% annualized, driven by $196.6 million in first quarter originations. Total loans at March 31, 2017 increased $361.6 m

  16. Slide 16: Steady Progress Towards Long-term Profitability Targets

    Steady Progress Towards Long-term 1Q17 EPS of $0.30, adjusted $0.22 without tax benefit of Profitability Diluted EPS Targets • $0.10 offset by higher OREO/problem asset costs of $0.02. EPS results driven by increasing revenues, low credit costs and prudent expense management. Reaching revenue inflec

  17. Slide 17: P&L Metrics

    P&L Metrics ($ in millions) Net Interest Income1 Replacing High-Yielding Acquired Loans with Originations Net Interest Margin1 3.49% $5.9 FY14 FY15 FY16 1Q16 1Q17 FY14 FY15 FY16 1Q16 1Q17 Net interest income excluding acquired loans Acquired loan income Strong Yields on Loan Portfolio Comments 1Q17

  18. Slide 18: Net Interest Income Sensitivity

    Net Interest Income Sensitivity NBHC Balance Sheet Positioned to Benefit From Rising Rate Environment Net Interest Income Change1 7.0 % 3.66 % 3.0 % (1.0)% (5.0)% 31-Dec-16 31-Mar-17 -50 bps +100 bps +200bps Interest Rate Shock  Variable pricing loans set to reset within 12 months make up 46% of to

  19. Slide 19: Non-Interest Income & Expense

    Non-Interest Income & Expense ($ in millions) Non-interest income Non-Interest Expense $7 $(1.7) FY14 FY15 FY16 1Q16 1Q17 Non-interest incomeNon-interest income excl FDIC related (2014 and 2015 only) $1 $1 Comments Q1 2017 non-interest income totaled $8.7 million increasing from $7.9 million in Q1 2

  20. Slide 20: Conservative Investment Portfolio

    Conservative Investment Portfolio ($ in millions) Investments by Asset Class1 (4Q16) 1%    Almost entire portfolio is U.S. agency backed Stable duration of 3.2 years OCI fluctuations minimized by 25% of portfolio in Held-To-Maturity Investment portfolio mainly in run-off mode since Q4-13; using c

  21. Slide 21: Long-Term Financial Goals

    Long-Term Financial Goals ~$6bn–$8bn Assets Efficiency Ratio <60% ROATA ≥1.00% ROATCE 12%–14% Dividend Payout Ratio Approximation 30% Tier 1 Leverage 9% 21

  22. Slide 22: Investment Highlights

    Investment Highlights  Attractive markets of Colorado and Kansas City MSA with a presence in Austin and Dallas, Texas  Relationship banking strategies driving record new loan originations of $1.1 billion TTM and good low-cost deposit growth       Granular and well-diversified loan portfolio

  23. Slide 23: Appendix

    Appendix 23 i National Bank Holdings

  24. Slide 24: NBHC Management Team

    NBHC Management Team 24 Zsolt Bessko Chief Administrative Officer & General Counsel (21 years in legal and banking)  Partner with law firm Stinson Leonard Street LLP  Executive Vice President, General Counsel and Secretary at Guaranty Bancorp Richard Newfield Chief Risk Management Officer (31 year

  25. Slide 25: Accomplished Board of Directors

    Accomplished Board of Directors Name Title Experience   Former Senior EVP and Head of Business Services of Regions Financial Former EVP and Management Operating Committee at Bank of America Tim Laney Chairman, President and CEO Lead Director / Chairman of the Audit and Risk Committee Ralph Clermon

  26. Slide 26: Our Promise: Bank with Common Sense

    OURPROMJSE BANK WITH COMMON SENSE NBH Bank champions a new era of common sense banking by building relationshi ps with local communities as the accountable, straight-shooting and insightful alternative to big box banking-as-usual. Bl G BOX BANK REFUGEES: Discontent,defiantandself-·reliant. ourdie.nt

  27. Slide 27: Reconciliation of Non-GAAP Measures

    Reconciliation ($ in millions, except per share) of Non-GAAP Measures As of and for the three months ended As of and for the year ended Return on Average Tangible Assets and Return on Average Tangible Equity: Net income Add: impact of core deposit intangible amortization expense, after tax $ 0.3 0.8

  28. Slide 28: Reconciliation of Non-GAAP Measures (cont'd)

    Reconciliation ($ in millions, except per share) of Non-GAAP Measures (cont’d) As of and for the three months ended Tangible common equity calculations: Total shareholders' equity $ 537.6 Less: goodwill and intangible assets, net (65.2) Add: deferred tax liability related to goodwill 9.7 Tangible co

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