National Bank Holdings Corporation · NYSE:NBHC
National Bank — Q1 2016 Earnings Presentation
31 slides from National Bank's earnings presentation, May 5, 2016
Slide 1: Q1 2016 Investor Presentation
Q1 2016 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: Company Overview
Company Overview ii National Bank Holdings
Slide 4: Created meaningful scale and market share in Colorado and Kansas City
Created meaningful scale and market share in attractive markets of Colorado and Kansas City MSA through failed/troubled bank acquisitions Revenue Growth Successful loan growth strategies with achievable 15-20% total loan growth target Quality loan originations, $1.0+ billion annual goal YoY transact
Slide 5: Strategic Execution Highlights
Strategic Execution Highlights Loan Growth 17% $477 million Originated Loan Growth Low Net Charge-Offs 9 bps 12 bps (2015) Buybacks $469 million 45% Shares repurchased since early 2013 @ average price of $19.87 Accelerated organic growth Deeper market penetration to accelerate loan growth Relationsh
Slide 6: NBHC Markets and Family of Brands
NBHC Markets and Family of Brands 42 banking centers Ranks #5 in deposit market share in Kansas City MSA for local banks Population: Metro KC – 2.1 million Favorable demographics vs. national levels in: Unemployment ‒ Household Income Business Climate & Recognition #2 Best City for Jobs (CBS MoneyWa
Slide 7: Relationship banking model: loan growth and composition
Relationship banking model with a focus on the markets we serve Total loans grew 17% over prior year Originated loans grew 27% over prior year Acquired loans decreased 14% over prior year Total Loan Composition Total Loans New Loan Originations Organic Loan Growth Strategy is Accelerating Commercial
Slide 8: Loan Portfolio ($2.6 Billion Outstanding)
Loan Portfolio ($2.6 Billion Outstanding) Portfolio Characteristics Strong Credit Quality of Originated Loans Non-Accrual Loans NA’s/Originated Loans $ in millions 1Includes owner-occupied CRE. Consumer, 27.7% Non Owner-Occupied CRE, 17.2% Commercial & Industrial1, 54.9% Low historical non 310-30 ne
Slide 9: $132 Million Energy Portfolio
$132 Million Energy Portfolio Energy Portfolio Profile 5.1% of loans, 3.2% of earning assets, 25.1% of risk based capital Decreased $14.8 million or 10.1% from prior year end Four energy sector loans with balances of $32.2 million were on non-accrual at March 31, 2016 The allowance for loan losses i
Slide 10: Attractive $180 Million 310-30 Loan Pools
Attractive $180 Million 310-30 Loan Pools Strong Asset Credit Quality Provision for Loan Losses on Non 310-30 Loans Credit Quality ($ in millions) Net Charge-Offs Allowance for Loan Losses Strong Credit Quality on $2.4 Billion of Non 310-30 Loans1 Accretable Yield Reclassification Life-to-Date Net c
Slide 11: Credit quality improving across majority of portfolio
Credit quality improving across majority of portfolio ($ in millions) Credit Quality Non 310-30 Classified Loans Non-performing Loans Non-performing Assets Total non-310-30 non-performing loans make up 1.74% of total loans. Excluding energy sector, ratio falls to 0.52% and shows continued improving
Slide 12: Deposit Composition and Cost of Deposits
Deposit Composition Cost of Deposits Strong Transaction Deposit Growth ($ in millions) Average Transaction Deposits & Repos1 Average Time Deposits1 Growing Low Cost Transaction Accounts 14% (35)% (29) bps YoY average transaction deposits increased $181.6 million or 7.4%. Client repurchase agreements
Slide 13: Financial Overview
Financial Overview 13 ii National Bank Holdings
Slide 14: First quarter 2016 results summary
Total loans were $2.6 billion and increased $4.4 million, or 0.7% annualized, as higher levels of payoffs and paydowns offset $163.4 million in first quarter originations. Total loans at March 31, 2016 increased $375.8 million, or 17.0%, since March 31, 2015. Fully taxable equivalent net interest in
Slide 15: Building the Path to 1% ROATA
Noise from FDIC loss-share agreements terminated during Q4 2015 Reaching revenue inflection point as originated loans are outpacing the impact of decreasing 20+% yielding ASC 310-30 acquired loans (1Q16 totaled $10.3 million and decreased $2.4 million vs 1Q15) Expenses managed down every year; 2012
Slide 16: Investment Securities Portfolio Summary
31-Dec 14 31-Dec 15 31-Mar 16 Book Value Available-for-Sale $ 1,484 $1,168 $1,105 Held-to-Maturity 516 416 405 "Locked-in" Gains (HTM) 15 11 10 Total Book Value $ 2,015 $1,596 $1,520 Available-for-Sale Unrealized Gains / (Losses) (5) (11) 4 Held-to-Maturity Unrealized Gains / (Losses) 4 1 5 Fair Mar
Slide 17: Net Interest Income Sensitivity
. 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 9% leverage ratio. NBHC Balance Sheet Positioned to Ben
Slide 18: Net Interest Margin
Net Interest Margin1 ¹ Presented on a fully taxable equivalent basis using the statutory rate of 35% beginning in 2014. The tax equivalent adjustments included for FY13, FY14, FY15, 1Q15, and 1Q16 were $0, $930, $2,695, $395, and $975 thousand, respectively. Strong Yields on Loan Portfolio Emerging
Slide 19: Non-Interest Income & Expense
Non-Interest Income & Expense 1 Adjusted non-interest income excludes gain on sale of securities, FDIC indemnification asset amortization/ gain on termination of FDIC agreement, FDIC loss sharing income (expense), gain on previously charged-off acquired loans and OREO related write-ups and bargain p
Slide 20: Path to 1% ROATA
Path to 1% ROATA Ramp-up of loan production Maintain low cost of funds Fee business initiatives Strong credit quality Maintain focus on expenses Reduction in work-out expenses Higher yielding acquired loans run-off Securities run-off reinvested into loans Organic Earnings Potential 1Please refer to
Slide 21: Key Financial Targets
Fully Levered Targets Assets ~$6bn–$8bn Efficiency Ratio <60% ROATA ≥1.00% ROATCE 12%–14% Dividend Payout Ratio 25% Tier 1 Leverage 9% Key Financial Targets
Slide 22: Investment Highlights
Investment Highlights 1Please refer to the appendix for a reconciliation of non-GAAP financial measures. Successfully rebuilding failed/troubled banks with organic growth strategy: Trailing twelve months of loan originations of $927 million, goal of $1.0+ billion in 2016 Client driven deposit base o
Slide 23: Appendix
Appendix 24 ii National Bank Holdings
Slide 24: 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 member at Bank of America;
Slide 25: Board of Directors
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 office of
Slide 26: Key Statistics by MSA
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 a
Slide 27: Disciplined Acquirer with Future Opportunities
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 $115mm¹ Management team experienced with M&A Completed Acquisition of Pine River Valley Bank Potential In Footp
Slide 28: Guide to Common Sense Banking
GUIDE TO COMMON SENSE BANKING a OURPROMISE BANK WITH COMMON SENSE NBH Bank champions a new era of common sense banking by building relationships with local communities as the accountable, straight-shooting and insightful alternative to big box banking-as-usual HOW WE DELIVER ON OUR PROMISE We PUT WE
Slide 29: Reconciliation of Non-GAAP Measures
($ in millions) Reconciliation of Non-GAAP Measures 31-Mar-15 31-Dec-15 31-Mar-16 31-Dec-14 31-Dec-15 Net income 1.2 $ 3.3 $ 0.3 $ 9.2 $ 4.9 $ Add: impact of core deposit intangible amortization expense, after tax 0.8 0.8 0.8 3.3 3.3 Net income adjusted for impact of core deposit intangible amortiza
Slide 30: Reconciliation of Non-GAAP Measures (cont'd)
($ in millions) Reconciliation of Non-GAAP Measures (cont’d) 31-Mar-15 31-Dec-15 31-Dec-14 31-Dec-15 Net interest income 39.5 $ 39.9 $ 170.2 $ 156.9 $ Add: impact of taxable equivalent adjustment 0.4 0.9 0.9 2.7 Adjusted net interest income, fully taxable equivalent (non-GAAP) 39.9 $ 40.8 $ 171.1 $
Slide 31: Reconciliation of Non-GAAP Measures (cont'd)
($ in millions, except per share) Reconciliation of Non-GAAP Measures (cont’d) 31-Mar-15 31-Dec-15 31-Dec-14 31-Dec-15 Adjustments to diluted earnings per share: Income per share - diluted 0.03 $ 0.11 $ 0.22 $ 0.14 $ Adjustments to diluted earnings per share (non-GAAP) (1) 0.14 0.05 0.45 0.51 Adjust
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