National Bank Holdings Corporation · NYSE:NBHC
National Bank — Q4 2018 Earnings Presentation
28 slides from National Bank's earnings presentation, Jan 31, 2019
Slide 1: Q4 2018 Investor Presentation
Q4 2018 Investor Presentation
Slide 2: 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,” “potential,” “will,” “estimate,”
Slide 3: About Non-GAAP Financial Measures
3 About Non-GAAP Financial Measures Certain of the financial measures and ratios we present, including “average 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 t
Slide 4: Company Overview
Company Overview .. 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: Total Shareholder Return and Steady Progress Towards Profitability Targets
-10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 10/19/16 01/19/17 04/19/17 07/19/17 10/19/17 01/19/18 04/19/18 07/19/18 10/19/18 NBHC Russell 2000 Index (RTY) KBW Regional Banking Index (KRX) NBHC Total Shareholder Return1,2 Since the Last Stock Repurchase Date +13.6% +37.4% October 19, 2016 through Dec
Slide 6: Steady Progress Towards Long-term Profitability Targets
$1.26 2015 2016 2017 Adjusted 2018 Adjusted 15.3% 69.5% 72.4% 66.3% 6.0% 47.5% 50.1% 23.9% 2015 2016 2017 2018 NBHC KRX 1.29% 5.04% 2015 2016 2017 Adjusted 2018 Adjusted 7.75% Fully Diluted EPS 6 Steady Progress Towards Long-term Profitability Targets ROATA (1) See the Appendix for a reconciliation
Slide 7: Key Actions and Results
(1) Adjusted for Peoples acquisition-related expenses of $2.7mm in 2017. See the Appendix for a reconciliation to this non-GAAP measure. (2) Q4 2018 annualized (3) Acquired loans not accounted for under 310-30 (4) The increase in 2018 non-interest expense is due to the Peoples acquisition and exclud
Slide 8: Investment Highlights
Investment Highlights Colorado .. 2nd strongest state economy .. 3rd best state for business .. Colorado Springs/Denver: #2/#3 Best places to live 8 (1) Sources: U.S. Census Bureau, Business Insider, CBS Money Watch, Entrepreneur Magazine, Forbes, WalletHub, CNBC, U.S. News and World Report, Busines
Slide 9: NBHC Markets and Family of Brands
. 47 banking centers .. Ranks #5 in deposit market share in Kansas City MSA for local banks .. Expanded presence in Overland Park, KS - central hub for the #1 county in Kansas by household income and projected population growth(2) ‒Overland Park experienced 20% population growth from 2000 to 2015(3)
Slide 10: We Operate in Very Attractive Markets
U.S. Denver, CO Front Range Kansas City, MO Salt Lake City, UT 2019 Population (mm) 329.2 3.0 4.7 2.2 1.2 Projected Population 5yr CAGR ('19-'24E) 0.7% 1.4% 1.4% 0.7% 1.3% 2019 Median Household Income $63.2K $78.3K $75.8K $66.8K $74.9K Projected Household Income Growth 8.8% 10.9% 9.9% 8.2% 14.0% # o
Slide 11: Organic Loan Growth is Accelerating
$1,011 $1,403 $1,883 $2,385 $2,715 $3,058 $4,021 $822 $451 $280 $203 $146 $121 $71 4QE12 4QE13 4QE14 4QE15 4QE16 4QE17 4QE18 Originated and Acquired loans not accounted for under 310-30 310-30 loans $88 $281 $477 $552 $498 $605 $910 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Total Loans(1) 11 Organic Loan G
Slide 12: Uniquely Diversified $4.1 Billion Loan Portfolio
12 Uniquely Diversified $4.1 Billion Loan Portfolio Granular and Well Diversified Loan Portfolio .. Self-imposed concentration limits ensure a granular and diverse loan portfolio and protects against downside risk to any particular industry or real estate sector. .. Individual lending segments are l
Slide 13: Stable Credit Quality
.51% ..09% (.03)% ..90% ..43% FY15 FY16 FY17 FY18 Energy Provision/(recoupment) Non Energy Provision ..42% ..20% ..13% ..16% 13 Stable Credit Quality Provision for Loan Losses on Originated and Acquired(1) Loans ($ in millions) High Yielding $71 Million 310-30 Loan Pools Stable Asset Credit Quality
Slide 14: Credit Quality Remains Strong
Non-performing Loans 14 Credit Quality Remains Strong Originated and Acquired Classified Loans ($ in millions) Non-performing Assets Non-performing Asset Composition Acquired OREO 0.46% 0.47% 0.23% 0.44% 0.06% 0.76% 0.71% 0.46% 0.60% YE16 YE17 YE18 Acquired NPLs and OREO Non-performing energy loans
Slide 15: Growing Low Cost Transaction Accounts
$2.4 $2.4 $2.5 $2.7 $2.9 $3.5 $1.6 $1.4 $1.3 $1.2 $1.1 $1.1 2013 2014 2015 2016 2017 2018 Average Transaction Deposits Average Time Deposits Growing Low Cost Transaction Accounts 15 Growing Low Cost Transaction Accounts Deposit Composition Low Cost Deposits ($ in billions) 0.00% 0.25% 0.50% 1.50% 2.
Slide 16: Financial Overview
Financial Overview Hi National Bank Holdings 6
Slide 17: 2018 Review: Net Interest Income
-4.84% 2.98% 5.86% -7.75% 4.82% 6.93% -100 bps +100 bps +200 bps 31-Dec-18 31-Dec-17 Net Interest Income(1) Net Interest Margin(1) Net Interest Income Sensitivity(2) 2018 Review Net Interest Income Well positioned to benefit from rising rate environment 3.60% 3.49% 3.50% 3.93% FY15 FY16 FY17 FY18FY1
Slide 18: 2018 Review: Non-Interest Income and Expense
$181 $153 $132 $131 $178 $2 $5 $136 $137 FY12 FY15 FY16 FY17 FY18 Non-Interest Expense Acquisition Costs Problem Asset Workout $8 Non-Interest Income Non-Interest Expense Efficiency Ratio(1) NIE / Average Assets 2018 Review (cont’d) Non-Interest Income and Expense 18 $37 $21 $40 $39 $71 FY12 FY15 FY
Slide 19: Conservative Investment Portfolio
19 Conservative Investment Portfolio ($ in millions) Investments by Asset Class(1) (4Q18) 27 % 2 % 70 % 1 % Mortgage Backed Securities - Fixed Rate Mortgage Backed Securities - ARMs Collateralized Mortgage Obligations - Fixed Rate Collateralized Mortgage Obligations - Floating Rate Portfolio Summary
Slide 20: Appendix
Appendix Hi National Bank Holdings 20
Slide 21: NBHC Management Team
21 NBHC 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 Commit
Slide 22: Accomplished Board of Directors
22 Accomplished Board of Directors Name Title Experience 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 Ri
Slide 23: Beneficial Ownership
Beneficial Ownership (as of 12/31/18) 23 Management & Directors (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) Calculated in accordance with Item 403 of Regulation S-K, a
Slide 24: Guide to Common Sense Banking
GUIDE TO COMMON SENSE BANKING —_ ‘OURPROMISt BANK WITH COMMON SENSE common sense banking by building ‘as theaccountable, straight-shooting and WE PUT WEFOCUS ON WE VALUE WE BELIEVE IN WE DELIVER PEOPLE FIRST NEEDS-BASED SIMPLICITY COMMUNITY ‘STRAIGHT TALK SOLUTIONS BUILDING (Our people are our Great
Slide 25: Reconciliation of Non-GAAP Measures
25 Reconciliation of Non-GAAP Measures ($ in millions, except per share) 31-Dec-18 31-Dec-17 Net income 61.5$ 14.6$ Add: impact of core deposit intangible amortization expense, after tax 1.6 3.3 Net income adjusted for impact of core deposit intangible amortization expense, after tax 63.1$ 17.8$ Ave
Slide 26: Reconciliation of Non-GAAP Measures (cont'd)
26 Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except per share) (2) Represents non-recurring acquisition expense related to the Peoples acquisition. (3) Represents a special $1,000 bonus payment to 491 associates made in connection with the Tax Cuts and Jobs Act enacted in 2017. Ad
Slide 27: Reconciliation of Non-GAAP Measures (cont'd)
27 Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except per share) (1) See Adjustments on page 26 (2) Represents non-recurring acquisition expense related to the Peoples acquisition. (3) Represents a special $1,000 bonus payment to 491 associates made in connection with the Tax Cuts a
Slide 28: Reconciliation of Non-GAAP Measures (cont'd)
28 Reconciliation of Non-GAAP Measures (cont’d) ($ in millions, except share and per share) 31-Dec-18 Tangible common equity calculations: Total shareholders' equity 695.0$ Less: goodwill and intangible assets, net (124.9) Add: deferred tax liability related to goodwill 7.3 Tangible common equity (n
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