National Bank Holdings Corporation · NYSE:NBHC

National Bank — Q2 2015 Earnings Presentation

38 slides from National Bank's earnings presentation, Aug 18, 2015

1. Slide 1: Q2 2015 Investor Presentation

   1 Q2 2015 Investor Presentation

2. Slide 2: Forward-Looking Statements

   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,” “pot

3. Slide 3: Company Overview

   3 Company Overview

4. Slide 4: NBHC company overview and key statistics

   4  Began banking operations in 2010/2011 with four acquisitions in 12 months (three failed banks)  Created meaningful scale and market share in attractive markets of Colorado and Kansas City MSA  Successful organic asset generation strategy with quality loan originations approaching $1.0 billion

5. Slide 5: Investment Highlights

   5 Investment Highlights  Disciplined focus on building meaningful scale and market share in attractive markets  Successfully rebuilding failed banks with organic growth strategy:  Strong loan growth momentum:  Record 2Q 2015 originations of $271mm, increase of 33% over first quarter; YTD origina

6. Slide 6: Guide to Common Sense Banking

   GUIDE TO COMMON SENSE BANKING OUR PROMISE BANK WITH COMMON SENSE NBH Bank champions a new era of common sense banking by felled relationst ‘communities as the accountable, nd ins sight akornat eto big box bankong-ae oe WE FOCUS ON WE PUT NEEDS-BASED WE VALUE WE BELIEVE IN WE DELIVER PEOPLE FIRST SOL

7. Slide 7: Executive Team

   7 Executive Team Tim Laney Chairman, President & Chief Executive Officer Brian Lilly Richard Newfield CFO, Chief of M&A and Strategy Chief Risk Management Officer Zsolt Bessko Tom Metzger Chief Administrative Officer & General Counsel Chief of Enterprise Technology & Integration Market President, Ba

8. Slide 8: Our Objectives

   8 Organic Growth Acquisition Growth Client-Centered, Relationship-Driven Enhanced Product Offerings Attractive Markets Disciplined Acquisitions Scalable Operating Platform & Efficiencies Leading Regional Bank Holding Company Our Objectives Opportunistic Capital Management

9. Slide 9: Strategic Execution Highlights

   9 Strategic Execution Highlights Expanded Efficiency Initiatives Managed Capital Opportunistically Further Franchise Development  Expanded product offerings  Established Capital Finance Team  Established Specialty Gov’t and Non-Profit Banking Unit  Enhancements to Small Business Banking  Cultiv

10. Slide 10: NBHC Markets and Family of Brands

    10     NBHC Markets and Family of Brands Banking Centers (101)  54 banking centers  21 commercial bankers  12 NBH specialty bankers  1.3% deposit market share across Colorado  Ranks #5 in market share of Colorado headquartered banks  45 banking centers  13 commercial bankers  3.6% dep

11. Slide 11: Key Statistics by MSA

    11 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

12. Slide 12: Organic Loan Growth Strategy is Accelerating

    12 $518 $1,083 $1,643 $1,745 $1,900 $604 $421 $318 $293 $272 $1.1 $1.5 $2.0 $2.0 $2.2 4QE12 4QE13 4QE14 1QE15 2QE15 Originated Purchased $518 $1,083 $1,645 $1,746 $1,901 $1,315 $771 $517 $470 $428 $1.8 $1.9 $2.2 $2.2 $2.3 4QE12 4QE13 4QE14 1QE15 2QE15 Originated Purchased C & I 41% Agriculture 6% Ow

13. Slide 13: Loans Credit Quality

    13 9% 6% 6% 4% 4% 4% 3% 3% 1% 1% 1% 10% 4% 3% 3% 1% 0% <1% 6% 26% 2% 1% Loans Credit Quality ($2.3 Billion Outstanding) Portfolio Characteristics Strong Credit Quality of Originated Loans Non-Accrual Loans NA’s/Originated Loans $ in millions 1Includes owner-occupied CRE. Consumer, 29.5% Non Owner- O

14. Slide 14: $144 Million Energy Portfolio

    14 $144 Million Energy Portfolio Energy Portfolio Profile  6.2% of loans, 3.3% of earning assets  Granular - $5.3mm avg. balance per relationship  Overall, credit quality remains satisfactory at 6/30/2015, with trends reflecting industry dynamics  Prices are depressed and continue to stress ener

15. Slide 15: Credit Quality

    15 $ 224.3 $ 23.9 $ 200.4 Inc. in Accretable Yield (Recog. Over Time) Impairments ( 310-30 Provision) Net Economic Impact Attractive $241Million of 310-30 Loan Pools Strong Credit Quality of Non 310-30 Loans Strong Loss Share Coverage of Total NPAs Credit Quality ($ in millions) Net Charge-Offs Allo

16. Slide 16: Deposit Composition and Cost of Deposits

    16 0.64% 0.41% 0.37% 0.36% 0.37% FY12 FY13 FY14 1Q15 2Q15 Deposit Composition Cost of Deposits Time Deposit Maturity (2QE15) ($ in millions) Average Transaction Deposits & Repos Average Time Deposits Avg Rate 0.60% 0.65% 0.84% 1.08% 1.23% 1.28% Growing Low Cost Transaction Accounts $2,402 $2,453 $2,

17. Slide 17: Delivering on Commercial Banking Strategy

    17 Delivering on Commercial Banking Strategy Invested in Commercial Capabilities  Team of 52 experienced commercial bankers  Committed to consistent top-grading of bankers  Established Capital Finance, Government and Non-Profit Banking specialty lines  Industry expertise in energy, food and agri

18. Slide 18: Delivering on Consumer & Small Business Banking Strategy

    18 Delivering on Consumer & Small Business Banking Strategy Optimized Banking Center Distribution  Consolidated 4 banking and 32 retirement centers, announced 4 banking center consolidations  Rolled out teller staffing efficiency model  Consolidated management responsibilities  Built culture of

19. Slide 19: Disciplined Acquirer with Future Opportunities

    19 Disciplined Acquirer with Future Opportunities M&A Focus Target Geographies  Positioned to consolidate targets along the I-25, I-70 and I-35 corridors across CO, KS and MO  Excess capital of $100mm¹  Management team experienced with M&A Announced Acquisition of Pine River Valley Bank Potential

20. Slide 20: Financial Overview

    20 Financial Overview

21. Slide 21: Second quarter 2015 highlights

    21  Grew the strategic loan portfolio by $134.4 million, or 26.4% annualized.  Grew total loans $112.3 million, or 20.3% annualized, on the strength of a record $271.4 million of originations.  Credit quality remained strong, as annualized non 310-30 net charge-offs were only 0.10% of average non

22. Slide 22: On the Path to 1% ROATA

    22 0.17% -0.04% 0.43% 0.60% 0.56% 1Q15 2Q15 Reported Adjusted On the Path to 1% ROATA Reported and Adjusted1 ROATA $0.03 $(0.04) $0.14 $0.17 $0.16 1Q15 2Q15 Reported Adjusted $0.20 Reported and Adjusted1 Diluted EPS Accounting “noise” is burning-off: • Significant impact of non-cash FDIC indemnifica

23. Slide 23: Low-Risk Balance Sheet

    23 Originated $1,901 Covered $28 Non-Covered $159 Covered $139 Non- Covered $102 Originated 82% Acquisition Marked 11% Acquisition Marked & Covered 7% 34% 38% 45% 44% 49% 43% 50% 42% 38% 38% 14% 4% 5% 10% 6% 2% 1% 1% 1% 0% 7% 7% 7% 7% 7% 4Q12 4Q13 4Q14 1Q15 2Q15 Loans Investment Securities Cash FDIC

24. Slide 24: Strong Covered Asset Performance

    24 $48 $45 $17 $10 $11 $39 $20 $22 $18 $12 $87 $64 $39 $28 $23 YE12 YE13 YE14 1QE15 2QE15 Projected Improved Client Cash Flows Projected FDIC Loss-Share Billings Covered Assets Covered Assets Strong Covered Asset Performance FDIC Loss-Share Related ($ in millions)  Quarterly valuations continue to

25. Slide 25: Investment Securities Portfolio

    25 37% 5% 58% 1% Mortgage Backed Securities - Fixed Rate Mortgage Backed Securities - ARMs Collateralized Mortgage Obligations - Fixed Rate Collateralized Mortgage Obligations - Floating Rate 31-Dec14 31-Mar 15 30-Jun 15 Book Value Available-for-Sale $ 1,484 $1,407 $1,322 Held-to-Maturity 516 490 45

26. Slide 26: Net Interest Income Sensitivity

    26 . 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 10% leverage ratio. NBHC Balance Sheet Positioned to

27. Slide 27: Net Interest Margin and Non-Interest Income

    27 3.81% 3.85% 3.59% 3.53% FY13 FY14 1Q15 2Q15 $179.0 $170.2 $39.5 $38.8 FY13 FY14 1Q15 2Q15 $ 20.2 $(1.7) $(0.5) $ 2.7 $30.2 $30.4 $7.4 $8.7 14.4 % 15.1 % 15.9 % 18.2 % FY13 FY14 1Q15 2Q15 Non-interest income Adjusted NII Adj. Fee Income Ratio Net Interest Margin1 Note: Please refer to the appendix

28. Slide 28: Expenses and Efficiency Actions

    28 $42 $41 $39 $38 $38 $37 $38 $36 $37 $3 $3 $2 $2 $3 $2 $(9) $0 $1 $0 $0 $4 $(1) $(1) $(1) $4 $(0) $2 $45 $47 $44 $39 $40 $38 $33 $37 $40 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Operating Problem Loan / OREO Other¹ $174 $163 $151 $149 $150 $29 $17 $(2) $2 $5 $7 $4 $1 $(2) $7 $210 $184 $150 $14

29. Slide 29: Looking Ahead

    29 Looking Ahead

30. Slide 30: Path to 1% ROATA

    30 Path to 1% ROATA 1Please refer to the appendix for a reconciliation of non-GAAP financial metrics. 2Represents 2Q15 adjustments to ROATA.  Replacing high- yielding purchased loans with originated loans  FDIC indem asset negative amortization ending < two years  FDIC loss share ending  Reducti

31. Slide 31: Key Financial Targets

    31 Fully Levered Targets Assets ~$8bn–$10bn Efficiency Ratio <60% ROATA ≥1.00% ROATCE 12%–14% Dividend Payout Ratio 25% Tier 1 Leverage 9% Key Financial Targets

32. Slide 32: Investment Highlights

    32 Investment Highlights 1Please refer to the appendix for a reconciliation of non-GAAP financial measures.  Disciplined focus on building meaningful scale and market share in attractive markets  Successfully rebuilding failed banks with organic growth strategy:  Strong loan growth momentum:  Re

33. Slide 33: Appendix

    33 Appendix

34. Slide 34: Executive team biographies

    34  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 A

35. Slide 35: Board of Directors

    35 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

36. Slide 36: Reconciliation of Non-GAAP Measures

    36 ($ in millions) Reconciliation of Non-GAAP Measures 30-Jun-14 31-Mar-15 30-Jun-15 31-Dec-12 31-Dec-13 31-Dec-14 Net income (loss) 2.1$ 1.2$ (1.3)$ (0.5)$ 6.9$ 9.2$ Add: impact of core deposit intangible amortization expense, after tax 0.8 0.8 0.8 3.2 3.2 3.3 Net income (loss) adjusted for impact

37. Slide 37: Reconciliation of Non-GAAP Measures (cont'd)

    37 ($ in millions) Reconciliation of Non-GAAP Measures (cont’d) 30-Jun-14 31-Mar-15 30-Jun-15 31-Dec-12 31-Dec-13 31-Dec-14 Net interest income 42.4$ 39.5$ 38.9$ 204.3$ 179.0$ 170.2$ Add: impact of taxable equivalent adjustment 0.2 0.4 0.6 - - 0.9 Adjusted net interest income, fully taxable equivale

38. Slide 38: Reconciliation of Non-GAAP Measures (cont'd)

    38 ($ in millions, except per share) Reconciliation of Non-GAAP Measures (cont’d) 30-Jun-14 31-Mar-15 30-Jun-15 31-Dec-12 31-Dec-13 31-Dec-14 Adjustments to diluted earnings per share: Income (loss) per share - diluted 0.05$ 0.03$ (0.04)$ (0.01)$ 0.14$ 0.22$ Adjustments to diluted earnings per share

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