National Bank Holdings Corporation · NYSE:NBHC
National Bank — Q1 2021 Earnings Presentation
37 slides from National Bank's earnings presentation, Apr 23, 2021
Slide 1: Q1 2021 Investor Presentation
Q1 – 2021 INVESTOR PRESENTATION
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains “forward-looking statements” within the meaning of the deferred tax assets or the need for a valuation allowance; continued consolidation Private Securities Litigation Reform Act of 1995. Forward-looking statements in the financial services indus
Slide 3: About Non-GAAP Financial Measures
ABOUT NON-GAAP FINANCIAL MEASURES Certain of the financial measures and ratios we present, including “average substitute for financial information presented in accordance with GAAP and you tangible assets,” “return on average tangible assets,” “average tangible common should not rely on non-GAAP fin
Slide 4: Company Highlights and Attractive Markets
COMPANY HIGHLIGHTS ATTRACTIVE MARKETS Headquarters Denver, CO Banking Centers(4) 89 Listing NYSE: NBHC BALANCE SHEET 1Q21 Total Assets (mm) $6,950 Total Loans (mm) $4,303 Total Deposits (mm) $6,002 KEY RATIOS 1Q21 Common Equity Tier 1 15.2% Tier 1 Leverage 10.8% ROATA(1)(2) 1.65% 45 banking centers
Slide 5: Recent Recognition and Premium Valuation
RECENT RECOGNITION U.S.News: Best Places to Live Rankings #1 Fortress Balance Sheet Largest Publicly Traded Bank HQ’ed in Colorado Robust #1 Through #5 Profitability Market Presence in All Top 5 Best Places to Live(1) #3 Positioned in Attractive Markets Colorado Market Share (Among Local Banks
Slide 6: Shareholder Returns
SHAREHOLDER RETURNS Total Shareholder Returns Since 2017 (Through 3/31/2021) 50% 40% 30% 30.9% 20% 21.1% 10% 0% (10%) (20%) (30%) (1) (40%) NBHC KRX Regional Bank Index (50%) 12/31/17 03/31/18 06/30/18 09/30/18 12/31/18 03/31/19 06/30/19 09/30/19 12/31/19 03/31/20 06/30/20 09/30/20 12/31/20 03/31/21
Slide 7: Financial Performance
FINANCIAL PERFORMANCE Bm National Bank Holdings
Slide 8: First Quarter 2021 Financial Highlights
FIRST QUARTER 2021 FINANCIAL HIGHLIGHTS CAPITAL RATIOS ‒ Strong capital levels with $387 million in excess capital over 15.2% Common Equity Tier 1 Ratio 7.0% common equity tier 1 risk-based regulatory requirement LIQUIDITY ‒ Ample liquidity with access to $2.5 billion in readily available funds Loan
Slide 9: Profitable Steady Growth
PROFITABLE STEADY GROWTH Net Income $88.6 Pre-Provision Net Revenue FTE(1) EPS (Fully Diluted) $2.85 ($ in millions) ($ in millions) $132.1 $2.55 $80.4 Non-Adjusted Non-Adjusted $112.9 Adjusted $2.16 Adjusted $67.8 $0.21 $61.5 $6.3 $83.4 $1.26 $35.0 $53.7 $54.7 $1.95 $0.86 $61.5 $26.8 $0.79 $23.1 $0
Slide 10: Growth Trends
GROWTH TRENDS Total Assets Total Loans Tangible Common Equity(2) ($ in billions) ($ in billions) ($ in millions) $4.4 $4.4 $6.9 $4.3 $707.3 $719.1 $6.7 $4.1 $651.4 $5.9 $5.7 $577.4 $553.3 $3.2 $4.8 $4.7 $4.6 $2.9 $478.9 $482.0 $2.6 (1) (1) YE15 YE16 YE17 YE18 YE19 YE20 1Q21 YE15 YE16 YE17 YE18 YE19
Slide 11: Focus on Efficiency
FOCUS ON EFFICIENCY – FTE efficiency ratio of 61.8% – Including the seven banking center consolidations announced in January 2021, we will have consolidated or sold 47 banking centers, or 46%, since 4Q11 Banking Center Roll-forward +2 + 24 103 - 47 82 Banking Centers Consolidations / 2Q21 4Q11 M&A(1
Slide 12: Regulatory Capital
REGULATORY CAPITAL Capital Ratios – 1Q21 TIER 1 LEVERAGE 10.8% COMMON EQUITY TIER 1 RISK-BASED 15.2% TIER 1 RISK-BASED 15.2% TOTAL RISK-BASED 16.3% TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS(1) 10.5% (1)Represents a non-GAAP financial measure. See Appendix for a reconciliation of these measures. – $3
Slide 13: Credit
CREDIT Bm National Bank Holdings
Slide 14: Uniquely Diversified $4.3 Billion Loan Portfolio
UNIQUELY DIVERSIFIED $4.3 BILLION LOAN PORTFOLIO Concentrations Granular and Well-Diversified Loan Portfolio Consumer 1% 17% ― Self-imposed concentration limits ensure a 13% 15% granular and diverse loan portfolio and protect C&I and Owner against downside risk to any particular industry or Occupied
Slide 15: Strong Credit Quality History
STRONG CREDIT QUALITY HISTORY – Allowance for loan losses coverage equal to 336% of non-performing loans – Acquisition fair value marks on acquired loans total $10.0 million, 4.4% of acquired loans or 0.23% of total loans ($ in millions) Non-performing Loans Non-performing Asset Composition 0.60% 0.
Slide 16: Drivers of Allowance for Credit Losses
DRIVERS OF ALLOWANCE FOR CREDIT LOSSES 2021 Primary Changes ACL/Total Loans 1.37% / 1.43%* ACL/Total Loans $4.7 1.28% / 1.35%* Q1 macro-economic variables $59.8** $55.1** ACL ACL Q1 2021 12/31/2020 3/31/2021 Changes All dollars in millions * Excludes PPP loans ** Investment securities portfolio cons
Slide 17: COVID Modifications as of 3/31/21
COVID MODIFICATIONS AS OF 3/31/21 ‒ Modification requests handled individually on a relationship basis; weekly cash flow forecast monitoring implemented for business clients; and as appropriate, cash equity injections required ‒ Recognizing that certain clients could face a longer revenue recovery p
Slide 18: Balance Sheet
BALANCE SHEET Bm National Bank Holdings
Slide 19: Solid Loan Growth
SOLID LOAN GROWTH Total Loan Originations(1) Total Loans(1) Loan Composition ($ in billions) ($ in billions) $4.4 $4.4 ($4.3 Billion) $1.2 $1.2 $1.2 $1.2 $4.3 $4.1 $1.0 $1.0 $0.9 $3.2 Owner $2.9 Occupied $2.6 CRE 16% C&I CRE 48% 14% Resi Mortgage 16% PPP FY15 FY16 FY17 FY18 FY19 FY20 1Q21 TTM 4Q15 4
Slide 20: High Quality, Highly Liquid Investment Portfolio
HIGH QUALITY, HIGHLY LIQUID INVESTMENT PORTFOLIO $1.2 Billion Investment Portfolio(1) 0.3% U.S. Agency/Sponsored Agency MBS 48.1% U.S. Agency/Sponsored Agency CMO 51.6% Other (1) Excludes FHLB/FRB stock. – 99.7% of portfolio is U.S. agency/sponsored agency backed – 1Q21 yield of 1.46% – 44% of portf
Slide 21: Low Cost Transaction Deposits
LOW COST TRANSACTION DEPOSITS ($ in billions) Growing$Low Cost Transaction Accounts Deposit Composition 1 Average Transaction 2 Deposits Average Time Deposits . Demand & NOW Savings & MM CDs < $250k CDs >= $250k Total 0 $4.8 $4.5 $4.7 $5.7 $6.0 100% 3% 3% 3% 3% $4.2 14% 13% 21% 19% $3.5 $3.6 36% 37%
Slide 22: Management Team
MANAGEMENT TEAM Bm National Bank Holdings
Slide 23: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM Tim Laney Aldis Birkans Chairman, President & CEO Chief Financial Officer (39 years in banking) (22 years in financial industry) • Head of Business Services at Regions Financial, where he also • Senior Vice President, Treasurer at NBHC led the transformation of wholesale
Slide 24: Management & Directors Beneficial Ownership
MANAGEMENT & DIRECTORS Beneficial Ownership (as of 3/31/21) BENEFICIAL NBHC MANAGEMENT & DIRECTORS PERCENT OF CLASS(2) OWNERSHIP(1) G. Timothy Laney 597,088 1.93% Aldis Birkans 50,486 0.16% Richard U. Newfield, Jr. 186,470 0.60% Angela Petrucci 11,545 0.04% Ralph W. Clermont 80,097 0.26% Robert E. D
Slide 25: Corporate Governance Overview
CORPORATE GOVERNANCE OVERVIEW 25
Slide 26: 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 Provide the majority of compensati
Slide 27: Overview of NBHC's Board of Directors
OVERVIEW OF NBHC’S BOARD OF DIRECTORS G. Timothy Laney • President, CEO and Chairman Appointed within last five years • Former Senior Executive Vice President and Head of Business Services at Regions Financial • 24-year tenure at Bank of America, including as a member of Bank of America’s Management
Slide 28: 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 Company 4 Experienced leaders capable of overseeing Other Public Board Experience 3 execution and challenging management Financial or Audit Background
Slide 29: 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 Employs detection and response mechanisms Evolving nature and complexity of the thre
Slide 30: Overview of NBH Bank Board of Directors
OVERVIEW OF NBH BANK BOARD OF DIRECTORS In addition to the NBHC Board, there is an added layer of oversight through the Board of Directors of NBH Bank, NBHC’s wholly-owned subsidiary NBH Bank Board Composition Aldis Birkans Christopher Randall Chief Financial Officer EVP, Commercial, Specialty and B
Slide 31: Executive Compensation Program
EXECUTIVE COMPENSATION PROGRAM NBH’s executive compensation practices align management incentives with long-term shareholder interests Components of Executive Compensation (2020) Compensation Metrics Tied to Long-Term Strategy Component Metrics Link to Strategy Base Salary Reviewed annually Amon
Slide 32: 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 33: Appendix
APPENDIX ia National Bank Holdings
Slide 34: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES ($ in millions, except per share) As of and for the three months ended As of and for the years ended Return on Average Tangible Assets and Return on Average Tangible Equity 31-Mar-21 31-Dec-20 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16 31-Dec-15 Net income $ 26.8 $ 8
Slide 35: Reconciliation of Non-GAAP Measures (cont'd)
RECONCILIATION OF NON-GAAP MEASURES (cont’d) ($ in millions, except per share) As of and for the years ended Adjusted Financial Results 31-Dec-18 31-Dec-17 Adjustments to net income: Net income $ 61.5 $ 14.6 Adjustments (1) 6.3 20.4 Adjusted net income (non-GAAP) $ 67.8 $ 35.0 Adjustments to earning
Slide 36: Reconciliation of Non-GAAP Measures (cont'd)
RECONCILIATION OF NON-GAAP MEASURES (cont’d) ($ in millions, except per share) As of and for the three months ended As of and for the years ended Efficiency Ratio 31-Mar-21 31-Dec-20 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16 31-Dec-15 Net interest income $ 45.2 $ 192.9 $ 205.8 $ 197.4 $ 146.3 $ 145.6
Slide 37: Reconciliation of Non-GAAP Measures (cont'd)
RECONCILIATION OF NON-GAAP MEASURES (cont’d) ($ in millions, except per share) As of and for the three months ended As of and for the years ended Tangible Common Book Value Ratios 31-Mar-21 31-Dec-20 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16 31-Dec-15 Total shareholders' equity $ 832.0 $ 820.7 $ 766.9
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