National Bank Holdings Corporation · NYSE:NBHC
National Bank — Q4 2023 Earnings Presentation
38 slides from National Bank's earnings presentation, Jan 24, 2024
Slide 1: Investor Presentation Q4 2023
Investor Presentation Q4 – 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private party service providers and the risk of systems failures, interruptions or breaches of security; Securities Litigation Reform Act of 1995. Forward-looking statements contain words suc
Slide 3: About Non-GAAP Financial Measures
About Non-GAAP Financial Measures Certain of the financial measures and ratios we present, including “tangible assets,” “return on our primary business operating results or by presenting certain metrics on a fully taxable average tangible assets,” “tangible common equity,” “return on average tangibl
Slide 4: Table of Contents
Table of Contents Financial Performance 08 Credit 14 Balance Sheet 19 Management Team 24 Corporate Governance Overview 27 Appendix 34
Slide 5: Company Highlights: Attractive Markets
Attractive Markets Headquarters Company Highlights Denver, CO Banking Centers(1) 94 Listing NYSE: NBHC Balance Sheet 2023 Total Assets (mm) $9,951 Total Loans (mm) $7,699 Total Deposits (mm) $8,190 Key Ratios 2023 Common Equity Tier 1 11.89% Tier 1 Leverage 9.74% ROATA(2) 1.57% ROATCE(2) 18.23% 37 b
Slide 6: Recent Recognition
Recent Recognition #4 and #9 Strong Balance Boulder, CO and Sheet Colorado Springs, CO Market Presence in Top 10 Best Places to Live(1) Robust Profitability #4 Colorado Market Share (Among Local Banks)(2) Positioned in Attractive Markets #6 Kansas City, MO-KS MSA Market Share Premium Valuati
Slide 7: Shareholder Returns
Shareholder Returns 5-year Performance of NBH Shareholder Returns vs. S&P 600 Regional Banks(1) Net Income $142.0 ($ in millions) 40% Non-Adjusted Adjusted $93.6 $99.6 $88.6 Baseline NBH Outperformance $80.4 $28.3 $67.8 $6.3 30% $71.3 $61.5 20% YE18 (2) YE19 YE20 YE21 YE22 (2) YE23 Historical Divide
Slide 8: Financial Performance
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Slide 9: Q4 2023 Financial Highlights
Q4 2023 Financial Highlights Net Income $33.1 million YTD net income increased 42.7% to $142.0 million, or $3.72 per diluted share, over the 3.95% Net interest margin FTE(1) prior year, adjusting for acquisition-related expenses in 2022 The fully taxable equivalent net interest margin was 3.95%.
Slide 10: Profitable Steady Growth
Profitable Steady Growth Net Income $142.0 Pre-Provision Net Revenue FTE(1) $190.0 EPS (Fully Diluted) $3.72 ($ in millions) ($ in millions) $3.01 $3.05 Non-Adjusted Non-Adjusted $2.85 $143.5 $99.6 $132.1 Adjusted $2.55 Adjusted $93.6 $15.1 $0.87 $88.6 $80.4 $112.9 $110.8 $2.16 $28.3 $0.21 $67.8 $83
Slide 11: Growth Trends
Growth Trends Total Assets Total Loans Tangible Common Equity(3) ($ in billions) ($ in billions) ($ in millions) (1) $9.9 Non-PPP Loans $9.6 PPP Loans $7.7 $860.3 (2) $7.2 $776.0 $7.2 $728.8 $707.3 $6.7 $651.4 $5.9 $5.7 $577.4 $4.4 $4.4 $4.5 $4.8 $4.1 $482.0 $0.2 $3.2 $4.2 YE17 YE18 YE19 YE20 YE21 Y
Slide 12: Trust and Wealth Partners
Trust and Wealth Partners Trust and Wealth Management solution tailored to high net worth individuals Scalable Private Wealth team provides a broad range of financial and retirement planning solutions, creating an opportunity to further leverage the platform to new and existing NBH clients Est
Slide 13: Regulatory Capital
Regulatory Capital Capital Ratios – 4Q23 $387 million in excess capital over 7.0% common TIER 1 LEVERAGE 9.7% equity tier 1 risk-based regulatory requirement COMMON EQUITY TIER 1 RISK-BASED 11.9% TIER 1 RISK-BASED 11.9% Double-leverage ratio of 93.9% TOTAL RISK-BASED 13.8% TANGIBLE COMMON EQUITY
Slide 14: Credit
B= National Bank Holdings CORPORATION™
Slide 15: Uniquely Diversified $7.7 Billion Loan Portfolio
Uniquely Diversified $7.7 Billion Loan Portfolio Concentrations Granular and Well-Diversified Loan Portfolio Consumer 1% 18% 1% 10% C&I and 16% Owner Self-imposed concentration limits ensure a granular and diverse loan portfolio and 6% Occupied protect against downside risk to any particular indus
Slide 16: Granular CRE Portfolio
Granular CRE Portfolio Non-Owner Occupied CRE Non-Owner Occupied CRE Portfolio Characteristics Office: 1-4 Family Nursing Const. - Average LTV of 48.5% Home 5% Office 5% 4% - 1.3% of total loans Hotel & Lodging CML A & D 25% Retail: 4% - Average LTV of 59.1% All Other 8% - 2.0% of total loans Wa
Slide 17: Strong Credit Quality History
Strong Credit Quality History Non-performing Loans Non-performing Asset Composition ($ in millions) 0.60%* 0.47% / 0.49%* 0.11% 0.37% 0.40%* 0.42% 0.24% 0.23% 0.15% 0.05% 0.15% 0.28% 0.03% 0.05% 0.09% 0.06% $28 0.34% 0.34% $20 $17 0.16% 0.17% $11 YE20 YE21 YE22 YE23 YE20* YE21* YE22 YE23 Non-perform
Slide 18: Credit Loss Protection
Credit Loss Protection Total Loan Loss Coverage ACL/Total Loans Loan Marks/Total Loans Including Loan Marks 1.27% 0.36%(1) 1.63%(1) $27.3 $125.3 $98.0 ACL Loan Marks TOTAL 12/31/2023 12/31/2023 12/31/2023 All dollars in millions (1)Represents a non-GAAP financial measure 18
Slide 19: Balance Sheet
BE National Bank Holdings CORPORATION™ Balance Sheet
Slide 20: Solid Loan Growth
Solid Loan Growth Total Loan Fundings(1) Quarterly Loan Fundings Loan Composition ($ in billions) ($ in millions) ($7.7 Billion) $2.0 $497.3 $460.4 Owner $393.9 Occupied AG $1.5 $1.5 $362.3 19% $324.1 C&I $1.2 $1.2 $1.2 40% $0.9 Non-Owner Occupied CRE 24% Resi Mortgage FY17 FY18 FY19 FY20 FY21 FY22
Slide 21: High Quality Liquidity Portfolio: $1.2 Billion
High Quality Liquidity Portfolio: $1.2 Billion $1.2 Billion Liquidity Portfolio(1) Liquidity portfolio duration of 4.1 years Cash Portfolio used exclusively as an on-balance sheet 6.2% source of liquidity: 10.0% 0.2% U.S. Treasury 34% unencumbered 57% pledged directly to client deposits or r
Slide 22: Low Cost Transaction Deposits
Low Cost Transaction Deposits Growing Low Cost Transaction Accounts Deposit Composition ($ in billions) Demand & NOW Savings & MM CDs < $250k CDs >= $250k Total Average Transaction Deposits Average Time Deposits $7.0 $5.7 $6.2 $7.9 $8.2 $5.9 100% 3% 2% 3% 4% 14% 11% 9% 8% $5.1 $4.2 37% 37% 41% 36% 8
Slide 23: Relationship Focused Deposit Base: $8.2 Billion
Relationship Focused Deposit Base: $8.2 Billion Deposit Composition 4% 3% Approximately 67% FDIC insured Granular deposit base: Time Deposits 12% - Average deposit balance on full relationship Interest bearing Transaction DDA basis just $50 thousand 18% - Accounts 47% Average deposit per account
Slide 24: Management Team
BE National Bank Holdings Management Team
Slide 25: Experienced Management Team
Experienced Management Team Tim Laney Aldis Birkans Chairman, President & CEO Chief Financial Officer (42 years in banking) (25 years in financial industry) • Head of Business Services at Regions Financial, where he also led the transformation • Senior Vice President, Treasurer at NBHC of wholesale
Slide 26: Management & Directors Beneficial Ownership
Management & Directors Beneficial Ownership (as of 12/31/23) NBHC MANAGEMENT & DIRECTORS BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS(2) G. Timothy Laney 507,739 1.33% Aldis Birkans 81,646 0.21% Richard U. Newfield, Jr. 188,216 0.49% Angela Petrucci 24,115 0.06% Ralph W. Clermont 89,162 0.23% Robert E.
Slide 27: Corporate Governance
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Slide 28: Best Practices In Governance and Compensation
Best Practices In Governance and Compensation NBHC’s corporate governance policies and executive compensation practices support our business and align with best practices Corporate Governance Executive Compensation Lead Independent Director with robust role and responsibilities Provide the major
Slide 29: NBHC Board of Directors
NBHC Board of Directors Robust Lead Director Responsibilities Ralph W. Clermont A *C N I G. Timothy Laney Lead Independent Director President, CEO and Chairman Mr. Clermont presides at all Board Former Managing Partner of KPMG, St. Louis office 39+ years of banking and audit experience F
Slide 30: Board Qualifications and Skills
NBHC Board Represents a Diverse Range of Qualifications and Skills Experience or Number of Directors Expertise CEO or President of Private or Public 5 Company Experienced leaders capable of overseeing Other Public Board execution and Experience 4 challenging management Financial or Audit Background
Slide 31: Board's Role in Oversight of Risk
Board’s Role in Oversight of Risk The Board is actively engaged in NBHC’s risk management. Robust Risk Oversight at Board Level Risk Board Oversight Actions Cybersecurity NBHC Audit and Risk Committee is responsible for oversight Employs detection and response mechanisms designed to Evolving nature
Slide 32: Executive Compensation Program
Executive Compensation Program NBH’s executive compensation practices align management incentives with long-term shareholder interests Components of Executive Compensation (2022) Compensation Metrics Tied to Long-Term Strategy Component Metrics Link to Strategy Base Salary • Among other things, attr
Slide 33: Environmental, Social and Governance (ESG) Matters
Environmental, Social and Governance (ESG) Matters NBH’s long-standing commitment to ESG in all of its business activities Committed to using environmentally friendly office products and materials and optimizing our office and banking center space. Environmental Continued investment in our mobil
Slide 34: Appendix
B= National Bank Holdings CORPORATION™ Appendix
Slide 35: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ in millions, except per share) (2) Represents non-recurring acquisition expense related to the Bank of Jackson Hole and Rock Canyon Bank acquisitions in the current year, and the Peoples acquisition in 2018 and 2017 (3) Represents a special $1,000 bonus payment
Slide 36: Reconciliation of Non-GAAP Measures (cont'd)
Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except per share) 36
Slide 37: Reconciliation of Non-GAAP Measures (cont'd)
Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except per share) 37
Slide 38: Thank you.
BE National Bank Holdings CORPORATION™ ie a | Thank you.
National Bank Holdings — Q4 2023 Earnings Presentation on 6ix