National Bank Holdings Corporation · NYSE:NBHC
National Bank — Q4 2017 Earnings Presentation
28 slides from National Bank's earnings presentation, Feb 5, 2018
Slide 1: Q4 2017 Investor Presentation
Q4 2017 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 “tangible assets,” “return on average tangible assets,” “return on average tangible assets before provision for loan losses and taxes,” “return on average tangible common equity,” “tangible common
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 ($868 millio
Slide 5: Steady Progress Towards Long-term Profitability Targets
Fully Diluted EPS 5 Steady Progress Towards Long-term Profitability Targets ROATA Please see the Appendix for a reconciliation to this non-GAAP measure, including the adjustments to the most directly comparable GAAP measure ROATCE Cumulative Total Shareholder Return $0.53 $0.14 $0.79 0.57% (1) (1) (
Slide 6: Key Actions and Results
6 Key Actions and Results Accelerated organic growth Record new commercial loan originations of $605 million, a 21.5% increase over 2016 Relationship banking focused strategies Organic loan growth covered $25 million or 17% decrease in acquired 310-30 loans since December 31, 2016 Grew Q4 2017 avera
Slide 7: Completed Acquisition of Peoples, Inc.
7 Completed Acquisition of Peoples, Inc. (Closed Transaction January 1st, 2018) Transaction Rationale: Strategic and Accretive Transaction Rationale: Strategic and Accretive Transaction Rationale: Strategic and Accretive Transaction Summary Summary of Assumptions Acquired 100% of the common stock of
Slide 8: Banking center footprint map
CO KS NM MO Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque Albuquerque
Slide 9: Key Statistics by MSA: We Operate in Very Attractive Markets
Key Statistics by MSA 9 We Operate in Very Attractive Markets ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü Equal or Better Than U.S. Average ü % % % Source: FHFA, SNL Financial, U.S. Census, U.S. Bureau of Economic Analysis Note: “Front Range” statistics include populated weighted values for De
Slide 10: Organic Loan Growth is Accelerating
Total Loans 10 Organic Loan Growth is Accelerating Total Loan Composition(1) New Commercial Loan Originations ($ in millions; totals in billions) $3.2 $2.9 Portfolio built on a relationship banking strategy targeted at full-service lending, depository and treasury management relationships $605 milli
Slide 11: Strong Credit Quality on $3.1 Billion of Non 310-30 Loans
Strong Credit Quality on $3.1 Billion of Non 310-30 Loans 12 Stable Credit Quality (Excludes Peoples) Provision for Loan Losses on Non 310-30 Loans ($ in millions) High Yielding $121 Million 310-30 Loan Pools Stable Asset Credit Quality Net Charge-offs Allowance for Loan Losses(1) Change in Allowanc
Slide 12: Non-performing Loans
Non-performing Loans 13 Credit Quality Remains Strong in Non-Energy Portfolio (Excludes Peoples) Non 310-30 Classified Loans ($ in millions) Non-performing Assets Non-performing Asset Composition Non-performing Energy loans – 0.39% Acquired OREO OREO has been a source of income with net gains of $4.
Slide 13: Average Transaction Deposits Growing
Average Transaction Deposits 14 Growing Low Cost Transaction Accounts Average Time Deposits Deposit Composition Low Cost Deposits 17% (21)% 75% Non-Time ($ in billions) Average transaction deposits remain strong in attractive markets of Colorado, Greater Kansas City Region and Texas. Peoples adds at
Slide 14: Financial Overview
Financial Overview i National Bank Holdings
Slide 15: Fourth quarter results summary
Total loans ended the quarter at $3.2 billion, increasing $58.4 million, or 7.4% annualized, while originated loans outstanding totaled $3.0 billion and increased $72.3 million, or 10.0% annualized. Fully taxable equivalent net interest income totaled $38.6 million, and decreased $0.8 million due to
Slide 16: Net Interest Income: Replacing High-Yielding Acquired Loans with Originations
Net Interest Income(1) Replacing High-Yielding Acquired Loans with Originations 17 P&L Metrics Net Interest Margin(1) Strong Yields on Loan Portfolio Comments Fully taxable equivalent net interest income grew $2.4 million compared to FY16 primarily due to an increase in earning assets and continued
Slide 17: Net Interest Income Sensitivity
18 Net Interest Income Sensitivity NBHC Balance Sheet Positioned to Benefit From Rising Rate Environment Net Interest Income Change(1) (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
Slide 18: Non-Interest Expense
Steady trend of decreasing expenses over the years. Since 2012, expenses have decreased $77 million or 37%. 19 Non-Interest Expense Non-Interest Expense Comments Adjusted for $2.7 million of Peoples acquisition-related expenses and $0.5 million accrual for $1,000 special bonus $210 $158 84.53% 68.63
Slide 19: Conservative Investment Portfolio
31-Dec 16 31-Dec 17 Book Value Available-for-Sale $895 $871 Held-to-Maturity 325 253 "Locked-in" Gains (HTM) 7 6 Total Book Value $1,227 $1,095 Available-for-Sale Unrealized Gains / (Losses) (11) (15) Held-to-Maturity Unrealized Gains / (Losses) 0 0 Fair Market Value of Portfolio $1,216 $1,114 Portf
Slide 20: Long-Term Financial Goals
21 Long-Term Financial Goals Assets ~$6bn–$8bn Efficiency Ratio (Excludes Residential Mortgage Business) <60% ROATA ≥1.00% ROATCE 12%–14% Dividend Payout Ratio Approximation 30% Tier 1 Leverage 9%
Slide 21: Investment Highlights
22 Investment Highlights Attractive markets of Colorado and Greater Kansas City Region with a presence in Austin and Dallas, Texas and New Mexico Diversified revenue stream with high-performing, relationship-centric business model focused on earning the business of individuals and small and medium s
Slide 22: Appendix
Appendix i National Bank Holdings
Slide 23: NBHC Management Team
24 NBHC Management Team Head of Business Services at Regions Financial, where he also led the transformation of wholesale lines of business Senior management roles in small business, commercial banking, private banking, corporate marketing and change management, and Management Operating Committee me
Slide 24: Accomplished Board of Directors
25 Accomplished Board of Directors Name Title Experience Tim Laney Chairman, President and CEO Former Senior EVP and Head of Business Services of Regions Financial Former EVP and Management Operating Committee member at Bank of America Ralph Clermont Lead Director / Chairman of the Audit and Risk Co
Slide 25: Guide to Common Sense Banking
GUIDE TO COMMON SENSE BANKING a OURPROMISE BANK WITH COMMON SENSE NBH Bank champions a new era of common sense banking by building relationships with local communities as the accountable, straight-shooting and insightful alternative to big box banking-as-usual HOW WE DELIVER ON OUR PROMISE WE PUT ‘W
Slide 26: Reconciliation of Non-GAAP Measures
27 Reconciliation of Non-GAAP Measures ($ in millions, except per share) 31-Dec-16 31-Dec-17 Return on Average Tangible Assets and Return on Average Tangible Equity: Net income 23.1 $ 14.6 $ Add: impact of core deposit intangible amortization expense, after tax 3.3 3.3 Net income adjusted for impact
Slide 27: Reconciliation of Non-GAAP Measures (cont'd)
28 Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except per share) 31-Dec-17 Tangible common equity calculations: Total shareholders' equity 532.4 $ Less: goodwill and intangible assets, net (61.2) Add: deferred tax liability related to goodwill 10.9 Tangible common equity (non-GAAP)
Slide 28: Reconciliation of Non-GAAP Measures (cont'd)
29 Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except per share) As of and for the year ended 31-Dec-17 Adjustments to income per share: Income per share 0.53 $ Adjustments (non-GAAP) (1) 0.73 Adjusted income per share - diluted (non-GAAP) (1) $ 1.26 Adjustments to return on average
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