National Bank Holdings Corporation · NYSE:NBHC
National Bank — Q2 2018 Earnings Presentation
28 slides from National Bank's earnings presentation, Aug 9, 2018
Slide 1: Q2 2018 Investor Presentation
Q2 2018 Investor Presentation
Slide 2: Forward-Looking Statements
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,” “poten
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 average tangible assets,” “return on average tangible common equity,” “tangible common book value per share,” “tangible common equity,” “Non-interest expense to average
Slide 4: A Foundation for Growth
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 January 1, 2018 and added
Slide 5: Steady Progress Towards Long-term Profitability Targets
Steady Progress Towards Long-term Profitability Targets 2017 Adjusted(1) YTD18 Adjusted(1) 2015 2016 2015 2016 2017 KRX 31-Jul-18 NBHC (1) (1) 2015 2016 2017 Adjusted YTD18 Adjusted (1) 2017 Adjusted (1) YTD18 Adjusted 2015 2016 (1) Adjusted for Peoples acquisition-related costs and 4Q 2017 deferred
Slide 6: Key Actions and Results
Key Actions and Results Accelerated growth Record new commercial loan originations of $737 million over the past twelve months Grew revenue $20 million, or 39%, year-over-year Originated and acquired(4) loans grew 17.0% annualized, linked quarter, due to organic loan growth Cost of deposits increa
Slide 7: Investment Highlights
Investment Highlights 1 Attractive Markets(¹) Colorado 2nd strongest state economy 3rd best state for business Colorado Springs/Denver: Texas Dallas: #3 fastest growing city Austin: #1 Best Place to Live Kansas City Region #2 Best City for Jobs 4th “Hot Startup” City #2/#3 Best Place
Slide 8: NBHC Markets and Family of Brands
NBHC Markets and Family of Brands ONE Charter, THREE Flags Attractive and Growing Markets ForrttCColollliiilnnlssisns 76 Deenveer Lawrerenencncece 70 70 KS Wiichhiita Colorado Springs KannsasasasCsCiCityiyty 35 CO MO NM Taos Saanta Fe Albu qu erqu e Colorado’s population growth between TX (3) Dall
Slide 9: We Operate in Very Attractive Markets
We Operate in Very Attractive Markets 5yr CAGR (’12-’17) 22.0 22.9 (³) 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
Slide 10: Organic Loan Growth is Accelerating
Organic Loan Growth is Accelerating Other Consumer 1% Resi Mortgage 22% Commercial & Industrial 45% 310-30 loans 2% Non owner occupied CRE 15% Owner Occupied CRE 4QE12 4QE13 4QE14 4QE15 4QE16 4QE17 2QE18 Originated and Acquired loans not accounted for under 310-30 310-30 loans Portfolio built on a
Slide 11: Uniquely Diversified $3.8 Billion Loan Portfolio
Uniquely Diversified $3.8 Billion Loan Portfolio Self-imposed concentration limits ensure a granular and diverse loan portfolio and protects against downside risk to any particular industry or real estate sector Individual lending segments are limited to no more than 15% of total loan commitments, w
Slide 12: Stable Credit Quality
Stable Credit Quality ($ in millions) on $3.7 Billion of Originated and Acquired(1) Loans as a % of Originated and Energy Provision 1.02% .86% ) Energy Charge-offs Non Energy Charge-offs Non Energy ALLL Energy Related ALLL FY15 FY16 FY17 YTD18 FY15 FY16 FY17 YTD18 Low historical originated and acq
Slide 13: Credit Quality Remains Strong
Credit Quality Remains Strong ($ in millions) 0.99% 0.56% $0.8 $1.6 YE14 YE15 YE16 YE17 2Q18 YE14 YE15 Energy loans YE16 YE17 2Q18 Acquired loans (Peoples) Loans excl. energy and Peoples Loans excl. energy as a % of originated and acquired loans % of originated and acquired loans Non-performing loan
Slide 14: Growing Low Cost Transaction Accounts
Growing Low Cost Transaction Accounts ($ in billions) Demand & NOW Savings & MM CDs >= $250k CDs < $250k $4.6 $4.0 $3.8 $3.8 $3.9 $2.5 $2.4 $2.4 6% on-me YE14 YE15 YE16 YE17 2Q18 2013 2014 2015 2016 2017 2Q18 Average transaction deposits remain strong in attractive markets of Colorado, Greater Kan
Slide 15: Financial Overview
Financial Overview HE National Bank Holdings 1s
Slide 16: 2Q18 Review
2Q18 Review Net Interest Income $152.2 $149.7 FY15 FY16 FY17 YTD18 FY15 FY16 FY17 YTD18 Well positioned to benefit from rising rate environment Fully taxable equivalent net interest income totaled $99.2 million, increasing $24.9 million YoY, driven by average earning assets growth of $849.4 millio
Slide 17: 2Q18 Review (cont'd)
2Q18 Review (cont’d) Non-Interest Income and Expense Non-Interest Expense Acquisition Costs Problem Asset Workout $137 $136 $4 $1 $1 FY12 FY15 FY16 FY17 YTD17 YTD18 FY16 FY17 YTD17 YTD18 (2) (2) (2) (2) (2) (2) FY16 FY17 YTD17 YTD18 FY16 FY17 YTD17 YTD18 (1) Ratio represents non-GAAP financial measu
Slide 18: Conservative Investment Portfolio
Conservative Investment Portfolio 99.9% of portfolio is U.S. agency backed Duration contained at 3.1 years OCI fluctuations minimized by 23% of portfolio in Held-To-Maturity Investment portfolio mainly in run-off mode since Q4-13; using cash flows to fund loan growth Stable yields helped by li
Slide 19: Long-Term Financial Goals
Long-Term Financial Goals Assets ~$6bn–$8bn Efficiency Ratio (Excludes Residential Mortgage Business) <60% ≥1.00% ROATA ROATCE 12%–14% Dividend Payout Ratio Approximation 30% 9% Tier 1 Leverage 19
Slide 20: Appendix
Appendix Bm National Bank Holdings 2
Slide 21: NBHC Management Team
NBHC Management Team *Effective August 10, 2018 21 Zsolt Bessko Chief Administrative Officer & General Counsel (21 years in legal and banking) Partner with law firm Stinson Leonard Street LLP Executive Vice President, General Counsel and Secretary at Guaranty Bancorp Richard Newfield Chief Risk
Slide 22: Accomplished Board of Directors
Accomplished Board of Directors Tim Laney Chairman, President and CEO Former Senior EVP and Head of Business Services of Regions Financial Former EVP and Management Operating Committee member at Bank of America Ralph Clermont Lead Director / Chairman of the Audit and Risk Committee Former Mana
Slide 23: Management & Directors Beneficial Ownership
Management & Directors Beneficial Ownership (as of 6/30/18) In Process – Email7e4,1d67 Jared Ralph W. Clermont 0.24% (1) Includes unvested restricted shares for which the director or officer has voting power and shares issuable upon the exercise of options. Does not include unvested PSUs. (2) Calcul
Slide 24: Our Promise: Bank with Common Sense
OU RPROMJSE BANK WITH COMMON SENSE NB H B.ank champion s a new era of common sense banking by building relationships with local communities as the accountable, straight-shooting and insightful alternative to big box banking-as-usual. HOW WE DELNER ON OUR PROMISE 81G BOX BANK REFUGEES: Discontent,def
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ in millions, except per share) As of and for the six months ended As of and for the year ended Net income Add: impact of core deposit intangible amortization expense, after tax $ 26.0 1.0 $ 14.6 3.2 Average assets Less: average goodwill and core deposit intangi
Slide 26: Reconciliation of Non-GAAP Measures: Adjusted Financial Results
Reconciliation of Non-GAAP Measures ($ in millions, except per share) Adjusted Financial Results As of and for the six months ended As of and for the year ended Adjustments to net income: Net income Adjustments (non-GAAP)(1) $ 26.0 6.3 $ 14.6 20.4 Adjustments to earnings per share: Earnings per shar
Slide 27: Reconciliation of Non-GAAP Measures (cont'd)
Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except per share) Adjusted Financial Results, continued As of and for the six months ended As of and for the year ended Adjustments to efficiency ratio: Efficiency ratio, FTE Adjustments (non-GAAP)(1) Efficiency ratio, FTE, adjusted for ac
Slide 28: Reconciliation of Non-GAAP Measures (cont'd)
Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except per share) Tangible common equity calculations: Total shareholders' equity Less: goodwill and intangible assets, net Add: deferred tax liability related to goodwill $ 660.2 (125.8) 6.8 Tangible common book value per share Tangible c
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