National Bank Holdings Corporation · NYSE:NBHC
National Bank — Q3 2018 Earnings Presentation
28 slides from National Bank's earnings presentation, Nov 7, 2018
Slide 1: Q3 2018 Investor Presentation
Q3 2018 Investor Presentation
Slide 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,” “potential,” “will,” “estimate,”
Slide 3: About Non-GAAP Financial Measures
3 About Non-GAAP Financial Measures Certain of the financial measures and ratios we present, including “average tangible assets,” “return on average tangible assets,” “return on average tangible common equity,” “tangible common book value per share,” “tangible common equity,” “Non-interest expense t
Slide 4: Company Overview: A Foundation for Growth
Company Overview 4 A Foundation for Growth .. Began banking operation in 2010 with four acquisitions in first 12 months, with six acquisitions to date .. Created meaningful scale and market share in attractive markets of Colorado and Greater Kansas City Region .. Closed Peoples, Inc. acquisition on
Slide 5: Steady Progress Towards Long-term Profitability Targets
$1.26 2015 2016 2017 Adjusted YTD18 Adjusted 15.3% 69.5% 72.4% 81.0% 6.0% 47.5% 50.1% 38.5% 2015 2016 2017 31-Oct-18 NBHC KRX 1.29% 5.04% 2015 2016 2017 Adjusted YTD18 Adjusted 7.75% Fully Diluted EPS 5 Steady Progress Towards Long-term Profitability Targets ROATA (1) Adjusted for Peoples acquisitio
Slide 6: Key Actions and Results
6 Key Actions and Results .. Accelerated growth .. Record new commercial loan originations of $822 million over the past twelve months .. Grew revenue $20 million, or 41%, year-over-year .. Originated and acquired(4) loans grew 9.3% annualized, linked quarter, due to organic loan growth .. YTD cost
Slide 7: Investment Highlights
7 Investment Highlights (1) Sources: U.S. Census Bureau, Business Insider, CBS Money Watch, Entrepreneur Magazine, Forbes, WalletHub, CNBC, U.S. News and World Report Attractive Markets(¹)1 Colorado .. 2nd strongest state economy .. 3rd best state for business .. Denver/Colorado Springs: #1/#2 Best
Slide 8: Banking center footprint map
CO KS NM MO AlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAlbuquerqueAl
Slide 9: We Operate in Very Attractive Markets
9 We Operate in Very Attractive Markets %%%
Slide 10: Organic Loan Growth is Accelerating
$1,011 $1,403 $1,883 $2,385 $2,715 $3,058 $3,830 $822 $451 $280 $203 $146 $121 $75 4QE12 4QE13 4QE14 4QE15 4QE16 4QE17 3QE18 Originated and Acquired loans not accounted for under 310-30 310-30 loans $88 $281 $477 $552 $498 $605 $822 FY12 FY13 FY14 FY15 FY16 FY17 3QE18 Total Loans(1) 10 Organic Loan
Slide 11: Uniquely Diversified $3.9 Billion Loan Portfolio
11 Uniquely Diversified $3.9 Billion Loan Portfolio Granular and Well Diversified Loan Portfolio .. Self-imposed concentration limits ensure a granular and diverse loan portfolio and protects against downside risk to any particular industry or real estate sector. .. Individual lending segments are l
Slide 12: Stable Credit Quality
.51% ..09% (.05)% ..90% ..43% FY15 FY16 FY17 YTD18 Energy Provision Non Energy Provision ..42% ..20% ..09% ..14% 12 Stable Credit Quality Provision for Loan Losses on Originated and Acquired(1) Loans ($ in millions) High Yielding $75 Million 310-30 Loan Pools Stable Asset Credit Quality Annualized N
Slide 13: Credit Quality Remains Strong
$10.8 $13.6 $18.1 $19.4 $23.6 $12.6 $1.6 $0.8 0.57% 0.99% 1.07% 0.66% 0.63% 0.57% 0.56% 0.65% 0.62% 0.61% YE14 YE15 YE16 YE17 3Q18 Non-performing loans excl. energy Non-performing loans excl. energy as a % of total loans excl. energy Non-performing energy loans Non-performing loans % of total loans
Slide 14: Growing Low Cost Transaction Accounts
$2.4 $2.4 $2.5 $2.7 $2.9 $3.5 $1.6 $1.4 $1.3 $1.2 $1.1 $1.1 2013 2014 2015 2016 2017 3Q18 Average Transaction Deposits Average Time Deposits 14 Growing Low Cost Transaction Accounts Deposit Composition Low Cost Deposits ($ in billions) 0.00% 0.25% 0.50% 1.50% 2.25% 0.18% 0.18% 0.19% 0.22% 0.26% FY14
Slide 15: Financial Overview
Financial Overview His National Bank Holdings is
Slide 16: 3Q18 Review: Net Interest Income
-5.42% 3.49% 6.84% -7.75% 4.82% 6.93% -100 bps +100 bps +200 bps 30-Sept-18 31-Dec-17 Net Interest Income(1) Net Interest Margin(1) Net Interest Income Sensitivity(2) 3Q18 Review Net Interest Income Well positioned to benefit from rising rate environment 3.60% 3.49% 3.50% 3.92% FY15 FY16 FY17 YTD18F
Slide 17: 3Q18 Review: Non-Interest Income and Expense
$181 $153 $132 $131 $101 $136 $2 $8 $5 $136 $137 FY12 FY15 FY16 FY17 YTD17 YTD18 Non-Interest Expense Acquisition Costs Problem Asset Workout $1 Non-Interest Income Non-Interest Expense Efficiency Ratio(1) NIE / Average Assets 3Q18 Review (cont’d) Non-Interest Income and Expense 17 $40 $39 $30 $55 F
Slide 18: Conservative Investment Portfolio
18 Conservative Investment Portfolio ($ in millions) Investments by Asset Class(1) (3Q18) 28 % 2 % 69 % 1 % Mortgage Backed Securities - Fixed Rate Mortgage Backed Securities - ARMs Collateralized Mortgage Obligations - Fixed Rate Collateralized Mortgage Obligations - Floating Rate Portfolio Summary
Slide 19: Long-Term Financial Goals
19 Long-Term Financial Goals Assets ~$6bn–$8bn Efficiency Ratio (Excludes Residential Mortgage Business) <60% ROATA ≥1.00% ROATCE 12%–14% Dividend Payout Ratio Approximation 30% Tier 1 Leverage 9%
Slide 20: Appendix
Appendix His National Bank Holdings 20
Slide 21: NBHC Management Team
21 NBHC Management Team .. Head of Business Services at Regions Financial, where he also led the transformation of wholesale lines of business .. Senior management roles in small business, commercial banking, private banking, corporate marketing and change management, and Management Operating Commit
Slide 22: Accomplished Board of Directors
22 Accomplished Board of Directors Name Title Experience Tim Laney Chairman, President and CEO . Former Senior EVP and Head of Business Services of Regions Financial .. Former EVP and Management Operating Committee member at Bank of America Ralph Clermont Lead Director / Chairman of the Audit and Ri
Slide 23: Beneficial Ownership (as of 9/30/18)
Beneficial Ownership (as of 9/30/18) 23 Management & Directors _______ (1) Includes unvested restricted shares for which the director or officer has voting power and shares issuable upon the exercise of options. Does not include unvested PSUs. (2) Calculated in accordance with Item 403 of Regulation
Slide 24: Guide to Common Sense Banking
GUIDE TO COMMON SENSE BANKING —_ ‘OURPROMISt BANK WITH COMMON SENSE common sense banking by building ‘as theaccountable, straight-shooting and WE PUT WEFOCUS ON WE VALUE WE BELIEVE IN WE DELIVER PEOPLE FIRST NEEDS-BASED SIMPLICITY COMMUNITY ‘STRAIGHT TALK SOLUTIONS BUILDING (Our people are our Great
Slide 25: Reconciliation of Non-GAAP Measures
25 Reconciliation of Non-GAAP Measures ($ in millions, except per share) As of and for the nine months ended As of and for the year ended 30-Sep-18 31-Dec-17 Net income 44.2$ 14.6$ Add: impact of core deposit intangible amortization expense, after tax 1.4 3.2 Net income adjusted for impact of core d
Slide 26: Reconciliation of Non-GAAP Measures: Adjusted Financial Results
26 Reconciliation of Non-GAAP Measures ($ in millions, except per share) Adjusted Financial Results As of and for the nine months ended As of and for the year ended 30-Sep-18 31-Dec-17 Adjustments to net income: Net income 44.2$ 14.6$ Adjustments (non-GAAP)(1) 6.3 20.4 Adjusted net income (non-GAAP)
Slide 27: Reconciliation of Non-GAAP Measures (cont'd)
27 Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except per share) Adjusted Financial Results, continued As of and for the year ended 30-Sep-18 30-Sep-17 31-Dec-17 Adjustments to efficiency ratio: Efficiency ratio, FTE 70.38% 68.48% 68.63% Adjustments (non-GAAP)(1) 8.0$ 0.7$ 3.2$ Effi
Slide 28: Reconciliation of Non-GAAP Measures (cont'd)
28 Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except share and per share) 30-Sep-18 Tangible common equity calculations: Total shareholders' equity $ 673.1 Less: goodwill and intangible assets, net (125.3) Add: deferred tax liability related to goodwill 7.0 Tangible common equity (
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