National Bank Holdings Corporation · NYSE:NBHC
National Bank — Q3 2022 Earnings Presentation
42 slides from National Bank's earnings presentation, Oct 28, 2022
Slide 1: Investor Presentation Q3 2022
Investor Presentation Q3 – 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform achieve organic loan and deposit growth and the composition of such growth; changes in sources and uses of funds, Act of 1995, notwithstanding that such sta
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 performance and when planning, forecasting, analyzing and comparing past, present and average tangible assets,” “tangible common equity,” “return on average tangible com
Slide 4: Table of Contents
Table of Contents Financial Performance 08 Bank of Jackson Hole and Rock Canyon Bank Acquisitions 13 Credit 16 Balance Sheet 20 2UniFi 24 Management Team 27 Corporate Governance Overview 30 Appendix 37
Slide 5: Attractive Markets / Company Highlights
Attractive Markets Headquarters Company Highlights Denver, CO Banking Centers(1) 98 Listing NYSE: NBHC Balance Sheet(2) 3Q22 Total Assets (mm) $7,923 Total Loans (mm) $5,722 Total Deposits (mm) $6,804 Key Ratios(2) 3Q22 Common Equity Tier 1 12.8% Tier 1 Leverage 10.5% ROATA(3)(4) 0.87% / 1.39%(5) RO
Slide 6: Recent Recognition
Recent Recognition U.S. News: Best Places to Live Rankings Fortress Balance #1 Sheet Largest Publicly Traded Bank HQ’d in Colorado #2 and #4 Robust Colorado Springs, CO and Profitability Boulder, CO Market Presence in Top 5 Best Places to Live(1) Positioned in #3 Attractive Markets Colorado Ma
Slide 7: Shareholder Returns
Shareholder Returns Total Shareholder Returns For The Past Five Years (1/1/2018 through 9/30/2022) Net Income $88.6 $93.6 ($ in millions) $80.4 $65.0 Non-Adjusted $67.8 $10.5 90% Adjusted $6.3 $35.0 (1) NBHC KRX Regional Bank Index $61.5 $54.5 70% $20.4 $14.6 (2) (2) (2) YE17 YE18 YE19 YE20 YE21 YTD
Slide 8: Financial Performance
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Slide 9: Q3 2022 Financial Highlights
Q3 2022 Financial Highlights Net Income FTE net interest income totaled a record $70.5 million, an increase of $13.1 $15.8 million / $25.3 million adjusted(2) million, or 90.9% annualized, over 2Q22 Capital Ratios FTE net interest margin widened 63 basis points to 4.01%, due to an increase 12.8%
Slide 10: Profitable Steady Growth
Profitable Steady Growth Net Income $88.6 $93.6 Pre-Provision Net Revenue FTE(1) EPS (Fully Diluted) ($ in millions) ($ in millions) $132.1 $80.4 $65.0 $3.01 $112.9 $110.8 Non-Adjusted $2.85 Non-Adjusted $67.8 $10.5 $93.7 Adjusted $2.55 Adjusted $6.3 $2.11 $8.3 $83.4 $2.16 $0.34 $0.21 $35.0 $53.7 $5
Slide 11: Growth Trends
Growth Trends Total Assets Total Loans Tangible Common Equity(1) (2) ($ in billions) ($ in billions) $5.7 ($ in millions) $7.9 Non-PPP Loans $7.2 PPP Loans $743.6 $728.8 $6.7 $707.3 $4.5 $4.4 $4.4 $651.4 $5.9 $4.1 $0.2 $5.7 $577.4 $4.8 $4.6 $4.2 $3.2 $478.9 $482.0 $2.9 YE16 YE17 YE18 YE19 YE20 YE21
Slide 12: Regulatory Capital
Regulatory Capital $373 million in excess capital over 7.0% common Capital Ratios – 3Q22 equity tier 1 risk-based regulatory requirement TIER 1 LEVERAGE 10.5% COMMON EQUITY TIER 1 RISK-BASED 12.8% Double-leverage ratio just 88.7% TIER 1 RISK-BASED 12.8% TOTAL RISK-BASED 14.3% Holding company c
Slide 13: Bank of Jackson Hole and Rock Canyon Bank Acquisitions
Bank of Jackson Hole and Rock Canyon Bank Acquisitions
Slide 14: Strategically Compelling Expansion
Strategically Compelling Expansion Trust and Wealth Partners Rock Canyon SBA Division(1) 25 $173mm 250+ $700mm+ Full-Time Associates 2021 Total Loan Production High Net Worth Clients AUM #1 Utah SBA Rank(2) Trust and Wealth Management solution tailored to high net worth Rock Canyon Bank ranks as
Slide 15: Acquisition Update
Acquisition Update Ability to announce two concurrent acquisitions, receive timely regulatory approval, manage core conversions and integrate systems while meeting announced financial targets, increasingly positions NBH as an attractive acquirer. Timing & Closed on September 1st, 2022 Closed on
Slide 16: Credit
B= National Bank Holdings CORPORATION™
Slide 17: Uniquely Diversified $5.7 Billion Loan Portfolio
Uniquely Diversified $5.7 Billion Loan Portfolio(1) Concentrations Granular and Well-Diversified Loan Portfolio Consumer 15% C&I and Owner Self-imposed concentration limits ensure a granular and diverse loan portfolio and Occupied protect against downside risk to any particular industry or real es
Slide 18: Strong Credit Quality History
Strong Credit Quality History Allowance for loan losses coverage equal to 448% of non-performing loans Acquisition fair value marks on acquired loans total $1.8 million, 0.3% of acquired loans or 0.03% of total loans Non-performing Loans Non-performing Asset Composition ($ in millions) 0.49% 0.4
Slide 19: Allowance For Credit Loss
Allowance For Credit Loss Allowance to total loan coverage of 1.15% provides coverage for economic uncertainty ACL/Total Loans ACL/Total Loans 1.10% 1.15% $65.6 $49.7 ACL(1) ACL(1) 12/31/2021 9/30/2022 All dollars in millions (1)Investment securities portfolio consists of U.S. agency mortgage back
Slide 20: Balance Sheet
BE National Bank Holdings CORPORATION™ Balance Sheet
Slide 21: Solid Loan Growth
Solid Loan Growth Total Loan Fundings(1) Quarterly Loan Fundings Loan Composition ($ in billions) ($ in millions) ($5.7 Billion) $631.6 $2.0 $475.4 $492.5 Owner Occupied CRE $1.5 $413.3 $419.7 20% $1.2 $1.2 $1.2 C&I $1.0 48% $0.9 CRE 17% Resi Mortgage TTM 3Q21 4Q21 1Q22 2Q22 3Q22 Other Consumer 14%
Slide 22: High Quality, Highly Liquid Investment Portfolio
High Quality, Highly Liquid Investment Portfolio $1.3 Billion Investment Portfolio(1) 0.2% 99.8% of portfolio is U.S. agency/sponsored 9.6% agency and U.S. Treasury backed U.S. Agency/Sponsored Agency MBS 3Q22 yield of 1.76% 38.0% U.S. Agency/Sponsored Agency CMO 45% of portfolio in Held-to-Ma
Slide 23: Low Cost Transaction Deposits
Low Cost Transaction Deposits The Rock Canyon Bank acquisition added $734.5 million of total deposits, including $653.0 million of transaction deposits and $81.5 million of time deposits on September 1, 2022. Growing Low Cost Transaction Accounts Deposit Composition ($ in billions) Demand & NOW Sa
Slide 24: 2UniFi
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Slide 25: Mission
Mission To help small and medium sized businesses: • Increase their access to the US Banking System • Reduce their costs while saving time • Increase their actionable information With the goal of reducing stress in the lives of business owners and operators. 25
Slide 26: Delivering an Innovative SMB Marketplace and Platform
Delivering an Innovative SMB Marketplace and Platform 26
Slide 27: Management Team
BE National Bank Holdings Management Team
Slide 28: Experienced Management Team
Experienced Management Team Tim Laney Aldis Birkans Chairman, President & CEO Chief Financial Officer (41 years in banking) (24 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 29: Management & Directors
Management & Directors Beneficial Ownership (as of 9/30/22) NBHC MANAGEMENT & DIRECTORS BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS(2) G. Timothy Laney 518,575 1.55% Aldis Birkans 68,655 0.21% Richard U. Newfield, Jr. 167,414 0.50% Angela Petrucci 17,683 0.05% Ralph W. Clermont 84,848 0.25% Robert E. D
Slide 30: Corporate Governance
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Slide 31: 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 32: NBHC Board of Directors
NBHC Board of Directors G. Timothy Laney Robust Lead Director President, CEO and Chairman Former Sr Executive VP & Head of Business Responsibilities Services at Regions Financial 24-year tenure at Bank of America, and a member of Bank of America’s Management Operating Committee Mr. Clermont
Slide 33: NBHC Board Represents a Diverse Range of 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 34: 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 35: Executive Compensation Program
Executive Compensation Program NBH’s executive compensation practices align management incentives with long-term shareholder interests Components of Executive Compensation (2021) Compensation Metrics Tied to Long-Term Strategy Component Metrics Link to Strategy Base Salary • Among other things, attr
Slide 36: 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 37: Appendix
B= National Bank Holdings CORPORATION™ Appendix
Slide 38: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ in millions, except per share) As of and for the three As of and for the nine months ended months ended As of and for the years ended Return on Average Tangible Assets and Return on Average Tangible Equity 30-Sep-22 30-Sep-22 31-Dec-21 31-Dec-20 31-Dec-19 31-De
Slide 39: 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 As of and for the nine months ended months ended As of and for the years ended Adjusted Financial Results 30-Sep-22 30-Sep-22 31-Dec-18 31-Dec-17 Adjustments to net income: Net income $ 15.8 $ 54.6
Slide 40: Reconciliation of Non-GAAP Measures (cont'd)
Reconciliation of Non-GAAP Measures (cont’d) As of and for the As of and for the ($ in millions, except per share) three months ended nine months ended As of and for the years ended Efficiency Ratio 30-Sep-22 30-Sep-22 31-Dec-21 31-Dec-20 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16 Net interest income $
Slide 41: Reconciliation of Non-GAAP Measures (cont'd)
Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except per share) As of and for the nine months ended As of and for the years ended Tangible Common Book Value Ratios 30-Sep-22 31-Dec-21 31-Dec-20 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16 Total shareholders' equity $ 919.4 $ 840.1 $ 820.7
Slide 42: Thank you.
BE National Bank Holdings CORPORATION™ ie a | Thank you.
National Bank Holdings — Q3 2022 Earnings Presentation on 6ix