Last10K.com

National Bank Holdings Corp (NBHC) SEC Filing 10-Q Quarterly report for the period ending Tuesday, March 31, 2020

National Bank Holdings Corp

CIK: 1475841 Ticker: NBHC

 

                                                                                                                                                                                              

Exhibit 99.1

Picture 2

National Bank Holdings Corporation Announces

First Quarter 2020 Financial Results

 

Denver, Colorado - (Globe Newswire) – National Bank Holdings Corporation (NYSE: NBHC) reported:

 

 

 

 

 

 

 

 

 

 

 

 

 

For the quarter

 

 

1Q20

 

4Q19

 

1Q19

Net income ($000's)

 

$

15,824

 

$

19,519

 

$

18,922

Earnings per share - diluted

 

$

0.50

 

$

0.62

 

$

0.60

Return on average tangible assets(1)

 

 

1.12%

 

 

1.35%

 

 

1.39%

Return on average tangible common equity(1)

 

 

9.79%

 

 

12.07%

 

 

13.15%

                                                      

 

 

 

(1)

 

Quarterly ratios are annualized.

 

In announcing these results, Chief Executive Officer Tim Laney shared, “I want to thank my teammates for moving quickly to address the challenges presented by the COVID-19 pandemic. Our priorities are to 1) protect the health of our associates and clients, 2) ensure the safety and soundness of our bank, and 3) act on every opportunity to prudently support our clients and the communities where we do business. To support our clients and communities, our teams have worked tirelessly to facilitate the SBA’s Paycheck Protection Program, obtaining SBA approval for $333 million in PPP loans. We estimate our efforts have helped save over 32,000 jobs to date. We entered this crisis with strong capital and liquidity positions, and we have moved quickly to assess emerging risks and to successfully deploy our contingency plans.” 

 

Mr. Laney added, “We delivered 50 cents of earnings per share during the first quarter. Tangible Book Value grew to $21.27 per share as quarterly earnings exceeded the impact of the CECL adoption, our dividend and share buyback activity during the quarter. We maintained excellent credit quality with annualized net charge offs of just 0.03% and low levels of non-performing loans at 0.47% of total loans. We continue to hold high levels of excess liquidity and ended the quarter with a strong 11.1% Tier 1 Leverage ratio and 12.9% Common Equity Tier 1 capital ratio.” 

 

First Quarter 2020 Results

(All comparisons refer to the fourth quarter of 2019, except as noted)

 

Net income totaled $15.8 million during the first quarter of 2020, or $0.50 per diluted share, compared to $19.5 million during the last quarter, or $0.62 per diluted share. The decrease from the prior quarter is primarily due to a $6.2 million loan loss provision from the Current Expected Credit Loss (“CECL”) model recorded during the first quarter driven by deteriorating economic conditions caused by the impact of COVID-19, partially offset by increased residential banking income. The return on average tangible assets was 1.12% compared to 1.35% and the return on average tangible common equity was 9.79% compared to 12.07% last quarter.

Net Interest Income

Fully taxable equivalent net interest income totaled $51.6 million, decreasing $0.1 million from the prior quarter, and benefited from $1.2 million of accelerated accretion on acquired loans. Average earnings assets decreased $79.6 million largely due to lower loans held-for-sale balances. Fully taxable equivalent net interest margin widened 10 basis points from the prior quarter to 3.87%, driven by a six basis point increase in the yield on earning assets coupled with a seven basis point decrease in the cost of funds.

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Loans

Total loans ended the quarter at $4.5 billion, increasing $90.3 million, or 8.2% annualized, led by commercial loan growth of $81.8 million, or 11.0% annualized. Total first quarter loan originations were $292.9 million, led by commercial loan originations of $163.6 million. We maintain a granular and well diversified loan portfolio with self-imposed concentration limits. In light of the strain placed on industries related to the COVID-19 pandemic, we have carefully evaluated our entire loan portfolio and have highlighted our current higher impacted industries within the accompanying COVID-19 Related Supplemental Disclosure.

Asset Quality and Provision for Loan Losses

Provision for loan losses of $6.2 million was recorded during the quarter under the CECL model, net of a $0.2 million reduction in unfunded loan commitment reserves. The quarter’s provision expense increased $5.0 million from the prior quarter to support originated loan growth, net charge-offs and provides coverage for the impact of deterioration in the macro-economic environment as a result of COVID-19. Annualized net charge-offs on loans totaled 0.03%, decreasing four basis points from the prior quarter. Non-performing loans (comprised of non-accrual loans and non-accrual TDRs) improved to 0.47% of total loans, compared to 0.49% at December 31, 2019. The allowance for credit losses as a percentage of total loans increased 25 basis points to 1.13% at March 31, 2020 and included a CECL adoption day 1 increase of $5.8 million.

Deposits

Average transaction deposits (defined as total deposits less time deposits) increased $27.0 million, or 3.0% annualized, and average total deposits increased $21.2 million, or 1.8% annualized, to $4.7 billion at March 31, 2020. Average non-interest bearing demand deposits decreased $40.7 million and average interest-bearing demand, savings and money market deposits increased $67.7 million. The mix of transaction deposits to total deposits was 77.8% at March 31, 2020.

The cost of transaction deposits decreased two basis points from the prior quarter to 0.32%. The cost of total deposits decreased one basis point from the prior quarter to 0.63%, and the cost of funds decreased seven basis points to 0.88% at March 31, 2020.

Non-Interest Income

Non-interest income totaled $23.5 million during the first quarter, representing an increase of $3.2 million from the prior quarter, primarily due to higher mortgage banking income of $3.4 million. Service charges and bank card fees decreased a combined $0.4 million and OREO-related income decreased $0.1 million. Other non-interest income increased $0.5 million from the prior quarter, primarily due to increased swap-fee income.

Non-Interest Expense

Non-interest expense totaled $48.7 million during the first quarter, representing an increase of $2.6 million from the prior quarter almost entirely due to higher mortgage banking commissions. Other non-interest expense increased $0.2 million due to positive swap fair value adjustments that benefited the prior quarter. 

Income tax expense totaled $3.2 million during the first quarter, compared to $3.9 million during the prior quarter. The effective tax rate for the first quarter of 2020 was 16.9%, compared to 18.7% during the full year 2019. The prior year’s effective tax rate was adjusted for $2.2 million of stock compensation activity.

Capital

Capital ratios continue to be strong and in excess of federal bank regulatory agency “well capitalized” thresholds.  The Tier 1 leverage ratio at March 31, 2020 for the consolidated company and NBH Bank was 11.05% and 9.54%, respectively.  Shareholders’ equity totaled $763.5 million at March 31, 2020, $3.5 million lower than the prior quarter, driven by share repurchases executed in the first quarter totaling $19.5 million and a cumulative effect adjustment reducing retained earnings by $4.6 million due to the CECL adoption. These decreases to equity were partially offset by the quarter’s net income of $15.8 million and a $10.3 million increase in accumulated other comprehensive income, driven by positive fair market value adjustments in the available-for-sale securities portfolio. 

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Common book value per share increased $0.44 to $25.04 at March 31, 2020. The tangible common book value per share increased $0.38 to $21.27 at March 31, 2020 as the quarter’s earnings and positive fair market value adjustments in the available-for-sale securities portfolio outpaced the quarter’s share repurchases, dividend and CECL cumulative effect adjustment. Excluding accumulated other comprehensive income, the tangible book value increased $0.04 to $20.87 at March 31, 2020.

Recent Events

The COVID-19 pandemic has caused substantial disruption to the communities we serve and has changed the way we live and work.  We remain committed to ensuring our associates, clients, and communities are receiving the support they need during these challenging times. All of our banking centers remain operational through our drive-thru services and on an appointment-only basis in the lobbies. We have leveraged our digital banking platform with our clients, and we have implemented company-wide remote working arrangements. Our teams are working diligently to support our clients who are experiencing financial hardship due to COVID-19 through participation in the SBA’s Paycheck Protection Program, assistance with expedited deposits of CARES Act stimulus payments, and loan modifications, as needed.

The length of the pandemic and the efficacy of the extraordinary government-mandated measures that have been put into place to address it are unknown, but have already had, and are likely to continue to have, a significantly negative impact to the U.S. labor market, consumer spending and business operations.  Several actions have been taken by governmental authorities to address the economic impact of the pandemic, including the Federal Reserve reducing the federal funds rate 1.5 percentage points to 0.00 to 0.25 percent as well as taking additional actions, such as providing up to $2.3 trillion in loans to support the economy, and the passage of the CARES Act by Congress, which provides over $2 trillion in economic assistance for American workers, families and small businesses.

Year-Over-Year Review

(All comparisons refer to the first quarter 2019, except as noted)

 

Fully taxable equivalent net interest income totaled $51.6 million, decreasing $0.8 million, or 1.5%, and benefited from $1.2 million of accelerated accretion on acquired loans. Average earning assets increased $111.1 million, or 2.1%, primarily driven by average loan growth of $258.7 million, partially offset by a decrease in average investment securities of $200.8 million. The fully taxable equivalent net interest margin narrowed 18 basis points to 3.87% due to lower earning asset yields. The yield on earning assets decreased 19 basis points, led by a 41 basis point decrease in the originated loan portfolio yields due to fed funds rate cuts. The cost of funds remained consistent at 0.88%.

Loans outstanding totaled $4.5 billion and increased $258.8 million, or 6.1%, led by commercial loan growth of $318.0 million, or 11.5%. New loan originations over the trailing 12 months totaled $1.2 billion, led by commercial loan originations of $744.0 million. 

Average non-interest bearing demand deposits increased $29.1 million, or 2.6%. Average transaction deposits increased $116.2 million, or 3.3%, and average total deposits increased $94.4 million, or 2.1%, to $4.7 billion at March 31, 2020. Spot transaction deposits increased $57.5 million to $3.7 billion at March 31, 2020, improving the mix of transaction deposits to total deposits to 77.8% at March 31, 2020. The mix of non-interest bearing demand deposits to total deposits totaled  24.3% at March 31, 2020. 

A CECL model driven provision for loan losses of $6.2 million was recorded during the quarter, net of a $0.2 million reduction in unfunded loan commitment reserves. The quarter’s provision expense increased $4.6 million from the first quarter 2019 to support originated loan growth, net charge-offs and provides coverage for the impact of deterioration in the macro-economic environment as a result of COVID-19. Annualized net charge-offs on loans totaled 0.03%, compared to 0.02% during the first quarter 2019. Non-performing loans to total loans decreased to 0.47% from 0.62% at March 31, 2019. The allowance for credit losses totaled 1.13% of total loans, compared to 0.87% at March 31, 2019 and included a CECL adoption day 1 increase of $5.8 million.

Non-interest income totaled $23.5 million, representing an increase of $6.5 million, or 38.0%, from the first quarter last year, primarily driven by an increase of $6.7 million, or 97.1%, in mortgage banking income. Service charges and bank card fees decreased $0.1 million and other non-interest income decreased $0.1 million from the first quarter last year.

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Non-interest expense totaled $48.7 million, representing an increase of $4.3 million, or 9.6%, from the first quarter last year. Salaries and benefits increased $5.3 million due to higher mortgage banking commissions. Other non-interest expense decreased $0.8 million largely due to a decrease in FDIC deposit insurance fees.

Income tax expense totaled $3.2 million, compared to $3.4 million during the first quarter last year, an increase of $0.2 million. The effective tax rate for the first quarter was 16.9%, compared to an adjusted rate of 18.7% during the full year 2019. The prior year’s effective tax rate was adjusted for $2.2 million of stock compensation activity. The lower rate compared to the statutory rate reflects the continued success of our tax strategies and tax exempt income.

Conference Call

Management will host a conference call to review the results at 11:00 a.m. Eastern Time on Wednesday, April  22, 2020. Interested parties may listen to this call by dialing (877) 272-6762 / (615) 800-6832 (International) using the Conference ID of 1344438 and asking for the NBHC First Quarter Earnings conference call. A telephonic replay of the call will be available beginning approximately four hours after the call’s completion through May 5, 2020, by dialing (855) 859-2056 (United States) / (404) 537-3406 (International) using the Conference ID of 1344438. The earnings release and an on-line replay of the call will also be available on the Company’s website at www.nationalbankholdings.com by visiting the investor relations area.

 

About Non-GAAP Financial Measures

Certain of the financial measures and ratios we present, including “tangible assets,” “return on average tangible assets,” “tangible common equity,” “return on average tangible common equity,” “tangible common book value per share,” “tangible common book value, excluding accumulated other comprehensive loss, net of tax,” “tangible common book value per share, excluding accumulated other comprehensive loss, net of tax,” “tangible common equity to tangible assets,” and “fully taxable equivalent” metrics, are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP). We refer to these financial measures and ratios as “non-GAAP financial measures.” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on a fully taxable equivalent basis. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

 

These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance.

 

A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.

 

About National Bank Holdings Corporation

National Bank Holdings Corporation is a bank holding company created to build a leading community bank franchise delivering high quality client service and committed to shareholder results. Through its bank subsidiary, NBH Bank, National Bank Holdings Corporation operates a network of 101 banking centers, serving individual consumers, small, medium and large businesses, and government and non-profit entities. The bank’s core geographic footprint consists of Colorado, the greater Kansas City region, New Mexico, Texas and Utah. NBH Bank operates under the following brand names: Community Banks of Colorado in Colorado, Bank

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Midwest in Kansas and Missouri and Hillcrest Bank in New Mexico, Texas and Utah. It also operates as Community Banks Mortgage, a division of NBH Bank, in Colorado. Additional information about National Bank Holdings Corporation can be found at www.nationalbankholdings.com.

 

For more information visit: cobnks.com, bankmw.com, hillcrestbank.com or nbhbank.com. Or, follow us on any of our social media sites:

Community Banks of Colorado: facebook.com/cobnks, twitter.com/cobnks, instagram.com/cobnks;

Bank Midwest: facebook.com/bankmw, twitter.com/bank_mw, instagram.com/bankmw;

Hillcrest Bank: facebook.com/hillcrestbank, twitter.com/hillcrest_bank;

NBH Bank: twitter.com/nbhbank;

or connect with any of our brands on LinkedIn.

 

Forward-Looking Statements

This press release 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,” “target,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “intend” or similar expressions that relate to the Company’s strategy, plans or intentions. Forward-looking statements involve certain important risks, uncertainties and other factors, any of which could cause actual results to differ materially from those in such statements. Such factors include, without limitation, the “Risk Factors” referenced in our most recent Form 10-K filed with the Securities and Exchange Commission (SEC), other risks and uncertainties listed from time to time in our reports and documents filed with the SEC, and the following factors: ability to execute our business strategy; business and economic conditions; effects of a prolonged government shutdown; economic, market, operational, liquidity, credit and interest rate risks associated with the Company’s business; effects of any changes in trade, monetary and fiscal policies and laws; changes imposed by regulatory agencies to increase capital standards; effects of inflation, as well as, interest rate, securities market and monetary supply fluctuations; changes in the economy or supply-demand imbalances affecting local real estate values; changes in consumer spending, borrowings and savings habits; the Company’s ability to identify potential candidates for, consummate, integrate and realize operating efficiencies from, acquisitions, consolidations and other expansion opportunities; the Company's ability to realize anticipated benefits from enhancements or updates to its core operating systems from time to time without significant change in client service or risk to the Company's control environment; the Company's dependence on information technology and telecommunications systems of third party service providers and the risk of systems failures, interruptions or breaches of security; the Company’s ability to achieve organic loan and deposit growth and the composition of such growth; changes in sources and uses of funds; increased competition in the financial services industry; the effect of changes in accounting policies and practices; the share price of the Company’s stock; the Company's ability to realize deferred tax assets or the need for a valuation allowance; continued consolidation in the financial services industry; ability to maintain or increase market share and control expenses; costs and effects of changes in laws and regulations and of other legal and regulatory developments; technological changes; the timely development and acceptance of new products and services; the Company’s continued ability to attract, hire and maintain qualified personnel; ability to implement and/or improve operational management and other internal risk controls and processes and reporting system and procedures; regulatory limitations on dividends from the Company's bank subsidiary; changes in estimates of future loan reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; widespread natural and other disasters, pandemics, dislocations, political instability, acts of war or terrorist activities, cyberattacks or international hostilities; impact of reputational risk; and success at managing the risks involved in the foregoing items. The Company can give no assurance that any goal or plan or expectation set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements. The forward-looking statements are made as of the date of this press release, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.

 

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Contact:

Analysts/Institutional Investors: Aldis Birkans, Chief Financial Officer, (720) 554-6640, ir@nationalbankholdings.com 

Media: Whitney Bartelli, Chief Marketing Officer, (816) 298-2203, media@nbhbank.com

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NATIONAL BANK HOLDINGS CORPORATION

FINANCIAL SUMMARY

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

March 31, 

    

December 31, 

    

March 31, 

 

2020

 

2019

 

2019

Total interest and dividend income

$

58,668

 

$

59,616

 

$

59,420

Total interest expense

 

8,321

 

 

9,228

 

 

8,254

Net interest income

 

50,347

 

 

50,388

 

 

51,166

Taxable equivalent adjustment

 

1,268

 

 

1,290

 

 

1,227

Net interest income FTE(1)

 

51,615

 

 

51,678

 

 

52,393

Provision for loan losses

 

6,159

 

 

1,180

 

 

1,534

Net interest income after provision for loan losses FTE(1)

 

45,456

 

 

50,498

 

 

50,859

Non-interest income:

 

 

 

 

 

 

 

 

Service charges

 

4,126

 

 

4,416

 

 

4,321

Bank card fees

 

3,513

 

 

3,649

 

 

3,428

Mortgage banking income

 

13,673

 

 

10,309

 

 

6,937

Other non-interest income

 

2,192

 

 

1,740

 

 

2,304

OREO-related income

 

28

 

 

168

 

 

61

Total non-interest income

 

23,532

 

 

20,282

 

 

17,051

Non-interest expense:

 

 

 

 

 

 

 

 

Salaries and benefits

 

33,180

 

 

30,653

 

 

27,890

Occupancy and equipment

 

6,898

 

 

6,908

 

 

6,882

Professional fees

 

609

 

 

658

 

 

814

Other non-interest expense

 

7,001

 

 

6,849

 

 

7,757

Problem asset workout

 

648

 

 

736

 

 

1,123

Loss (gain) on sale of OREO, net

 

39

 

 

 7

 

 

(368)

Core deposit intangible asset amortization

 

296

 

 

296

 

 

296

Total non-interest expense

 

48,671

 

 

46,107

 

 

44,394

 

 

 

 

 

 

 

 

 

Income before income taxes FTE(1)

 

20,317

 

 

24,673

 

 

23,516

Taxable equivalent adjustment

 

1,268

 

 

1,290

 

 

1,227

Income before income taxes

 

19,049

 

 

23,383

 

 

22,289

Income tax expense

 

3,225

 

 

3,864

 

 

3,367

Net income

$

15,824

 

$

19,519

 

$

18,922

Earnings per share - basic

$

0.51

 

$

0.62

 

$

0.61

Earnings per share - diluted

 

0.50

 

 

0.62

 

 

0.60

                                                      

 

 

 

(1)

    

Net interest income is presented on a GAAP basis and fully taxable equivalent (FTE) basis, as the Company believes this non-GAAP measure is the preferred industry measurement for this item. The FTE adjustment is for the tax benefit on certain tax exempt loans using the federal tax rate of 21% for each period presented.

 

 

 

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NATIONAL BANK HOLDINGS CORPORATION

Consolidated Statements of Financial Condition (Unaudited)

(Dollars in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

March 31, 2020

 

December 31, 2019

 

March 31, 2019

ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

133,926

 

$

110,190

 

$

105,258

Investment securities available-for-sale

 

629,396

 

 

638,249

 

 

749,537

Investment securities held-to-maturity

 

192,902

 

 

182,884

 

 

221,727

Non-marketable securities

 

29,948

 

 

29,751

 

 

24,574

Loans

 

4,505,735

 

 

4,415,406

 

 

4,246,941

Allowance for credit losses

 

(50,956)

 

 

(39,064)

 

 

(37,055)

Loans, net

 

4,454,779

 

 

4,376,342

 

 

4,209,886

Loans held for sale

 

127,439

 

 

117,444

 

 

59,324

Other real estate owned

 

7,051

 

 

7,300

 

 

9,394

Premises and equipment, net

 

112,393

 

 

112,151

 

 

109,594

Goodwill

 

115,027

 

 

115,027

 

 

115,027

Intangible assets, net

 

10,489

 

 

11,361

 

 

12,981

Other assets

 

214,980

 

 

194,813

 

 

185,364

Total assets

$

6,028,330

 

$

5,895,512

 

$

5,802,666

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Non-interest bearing demand deposits

$

1,150,437

 

$

1,184,945

 

$

1,172,683

Interest bearing demand deposits

 

846,824

 

 

738,496

 

 

696,332

Savings and money market

 

1,693,614

 

 

1,755,538

 

 

1,764,341

Total transaction deposits

 

3,690,875

 

 

3,678,979

 

 

3,633,356

Time deposits

 

1,050,981

 

 

1,058,153

 

 

1,081,092

Total deposits

 

4,741,856

 

 

4,737,132

 

 

4,714,448

Securities sold under agreements to repurchase

 

23,703

 

 

56,935

 

 

59,543

Federal Home Loan Bank advances

 

341,506

 

 

207,675

 

 

228,421

Other liabilities

 

157,811

 

 

126,850

 

 

85,252

Total liabilities

 

5,264,876

 

 

5,128,592

 

 

5,087,664

Shareholders' equity:

 

 

 

 

 

 

 

 

Common stock

 

515

 

 

515

 

 

515

Additional paid in capital

 

1,009,478

 

 

1,009,223

 

 

1,012,974

Retained earnings

 

168,984

 

 

164,082

 

 

120,879

Treasury stock

 

(427,890)

 

 

(408,962)

 

 

(413,226)

Accumulated other comprehensive income (loss), net of tax

 

12,367

 

 

2,062

 

 

(6,140)

Total shareholders' equity

 

763,454

 

 

766,920

 

 

715,002

Total liabilities and shareholders' equity

$

6,028,330

 

$

5,895,512

 

$

5,802,666

SHARE DATA

 

 

 

 

 

 

 

 

Average basic shares outstanding

 

31,157,476

 

 

31,299,989

 

 

30,961,187

Average diluted shares outstanding

 

31,361,296

 

 

31,525,911

 

 

31,497,538

Ending shares outstanding

 

30,483,361

 

 

31,176,627

 

 

30,958,581

Common book value per share

$

25.04

 

$

24.60

 

$

23.10

Tangible common book value per share(1) (non-GAAP)

 

21.27

 

 

20.89

 

 

19.31

Tangible common book value per share, excluding accumulated other comprehensive income (loss)(1) (non-GAAP)

 

20.87

 

 

20.83

 

 

19.51

CAPITAL RATIOS

 

 

 

 

 

 

 

 

Average equity to average assets

 

13.21%

 

 

12.91%

 

 

12.39%

Tangible common equity to tangible assets(1)

 

10.97%

 

 

11.27%

 

 

10.52%

Tier 1 leverage ratio

 

11.05%

 

 

11.04%

 

 

10.63%

Common Equity tier 1 risk based capital ratio

 

12.87%

 

 

13.21%

 

 

12.84%

Total risk based capital ratio

 

13.82%

 

 

14.08%

 

 

13.72%

                                                      

 

 

 

(1)

    

Represents a non-GAAP financial measure.

 

 

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NATIONAL BANK HOLDINGS CORPORATION

Loan Portfolio

(Dollars in thousands)

 

Period End Loan Balances by Type

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2020

 

 

 

March 31, 2020

 

 

 

 

 

vs. December 31, 2019

 

 

 

vs. March 31, 2019

 

March 31, 2020

 

December 31, 2019

 

% Change

 

March 31, 2019

 

% Change

Originated:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

1,409,040

 

$

1,380,248

 

2.1%

 

$

1,251,795

 

12.6%

Municipal and non-profit

 

876,178

 

 

833,707

 

5.1%

 

 

775,265

 

13.0%

Owner-occupied commercial real estate

 

446,145

 

 

414,477

 

7.6%

 

 

347,064

 

28.5%

Food and agribusiness

 

235,389

 

 

245,320

 

(4.0)%

 

 

228,765

 

2.9%

Total commercial

 

2,966,752

 

 

2,873,752

 

3.2%

 

 

2,602,889

 

14.0%

Commercial real estate non-owner occupied

 

536,637

 

 

505,479

 

6.2%

 

 

472,073

 

13.7%

Residential real estate

 

656,924

 

 

651,656

 

0.8%

 

 

664,852

 

(1.2)%

Consumer

 

20,960

 

 

21,030

 

(0.3)%

 

 

21,070

 

(0.5)%

Total originated

 

4,181,273

 

 

4,051,917

 

3.2%

 

 

3,760,884

 

11.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

29,510

 

 

31,284

 

(5.7)%

 

 

45,632

 

(35.3)%

Municipal and non-profit

 

906

 

 

3,819

 

(76.3)%

 

 

3,394

 

(73.3)%

Owner-occupied commercial real estate

 

69,769

 

 

75,645

 

(7.8)%

 

 

94,558

 

(26.2)%

Food and agribusiness

 

7,159

 

 

7,807

 

(8.3)%

 

 

9,671

 

(26.0)%

Total commercial

 

107,344

 

 

118,555

 

(9.5)%

 

 

153,255

 

(30.0)%

Commercial real estate non-owner occupied

 

107,090

 

 

125,426

 

(14.6)%

 

 

173,881

 

(38.4)%

Residential real estate

 

109,400

 

 

118,762

 

(7.9)%

 

 

157,800

 

(30.7)%

Consumer

 

628

 

 

746

 

(15.8)%

 

 

1,121

 

(44.0)%

Total acquired

 

324,462

 

 

363,489

 

(10.7)%

 

 

486,057

 

(33.2)%

Total loans

$

4,505,735

 

$

4,415,406

 

2.0%

 

$

4,246,941

 

6.1%

 

Originations(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First quarter

 

Fourth quarter

 

Third quarter

 

Second quarter

 

First quarter

 

2020

 

2019

 

2019

 

2019

 

2019

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

118,999

 

$

69,048

 

$

144,554

 

$

125,527

 

$

138,106

Municipal and non-profit

 

13,968

 

 

46,114

 

 

31,482

 

 

25,513

 

 

21,579

Owner occupied commercial real estate

 

37,372

 

 

46,965

 

 

16,149

 

 

41,380

 

 

26,405

Food and agribusiness

 

(6,787)

 

 

20,348

 

 

(4,894)

 

 

18,217

 

 

15,213

Total commercial

 

163,552

 

 

182,475

 

 

187,291

 

 

210,637

 

 

201,303

Commercial real estate non-owner occupied

 

80,792

 

 

41,256

 

 

79,929

 

 

36,632

 

 

69,125

Residential real estate

 

46,273

 

 

43,493

 

 

49,022

 

 

40,012

 

 

38,627

Consumer

 

2,320

 

 

2,315

 

 

2,986

 

 

3,264

 

 

1,958

Total

$

292,937

 

$

269,539

 

$

319,228

 

$

290,545

 

$

311,013

                                                      

 

 

 

(1)

    

Originations are defined as closed end funded loans and net fundings under revolving lines of credit. Net funding under revolving lines of credit were $48,789, $1,756, $37,062, $48,955 and $105,235 as of the first quarter 2020, fourth quarter 2019, third quarter 2019, second quarter 2019 and first quarter 2019, respectively.

 

 

9

 

 

NATIONAL BANK HOLDINGS CORPORATION

Summary of Net Interest Margin

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

For the three months ended

 

For the three months ended

 

 

March 31, 2020

 

December 31, 2019

 

March 31, 2019

 

 

Average

    

    

 

 

Average

    

Average

    

    

 

 

Average

    

Average

    

    

 

 

Average

 

 

balance

 

Interest

 

rate

 

balance

 

Interest

 

rate

 

balance

 

Interest

 

rate

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated loans FTE(1)(2)

 

$

4,043,168

 

$

44,980

 

 

4.47%

 

$

4,002,813

 

$

46,466

 

 

4.61%

 

$

3,624,793

 

$

43,573

 

 

4.88%

Acquired loans

 

 

343,608

 

 

8,879

 

 

10.39%

 

 

377,330

 

 

7,525

 

 

7.91%

 

 

503,294

 

 

9,941

 

 

8.01%

Loans held for sale

 

 

102,935

 

 

936

 

 

3.66%

 

 

181,550

 

 

1,657

 

 

3.62%

 

 

42,868

 

 

488

 

 

4.62%

Investment securities available-for-sale

 

 

626,921

 

 

3,395

 

 

2.17%

 

 

642,297

 

 

3,413

 

 

2.13%

 

 

787,367

 

 

4,361

 

 

2.22%

Investment securities held-to-maturity

 

 

189,062

 

 

1,235

 

 

2.61%

 

 

187,274

 

 

1,257

 

 

2.68%

 

 

229,401

 

 

1,651

 

 

2.88%

Other securities

 

 

29,753

 

 

414

 

 

5.57%

 

 

29,681

 

 

471

 

 

6.35%

 

 

26,885

 

 

423

 

 

6.29%

Interest earning deposits and securities purchased under agreements to resell

 

 

22,957

 

 

97

 

 

1.70%

 

 

17,096

 

 

117

 

 

2.72%

 

 

32,657

 

 

210

 

 

2.61%

Total interest earning assets FTE(2)

 

$

5,358,404

 

$

59,936

 

 

4.50%

 

$

5,438,041

 

$

60,906

 

 

4.44%

 

$

5,247,265

 

$

60,647

 

 

4.69%

Cash and due from banks

 

$

74,784

 

 

 

 

 

 

 

$

76,568

 

 

 

 

 

 

 

$

77,954

 

 

 

 

 

 

Other assets

 

 

474,470

 

 

 

 

 

 

 

 

448,596

 

 

 

 

 

 

 

 

421,615

 

 

 

 

 

 

Allowance for credit losses

 

 

(44,807)

 

 

 

 

 

 

 

 

(38,746)

 

 

 

 

 

 

 

 

(35,814)

 

 

 

 

 

 

Total assets

 

$

5,862,851

 

 

 

 

 

 

 

$

5,924,459

 

 

 

 

 

 

 

$

5,711,020

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand, savings and money market deposits

 

$

2,497,129

 

$

2,888

 

 

0.47%

 

$

2,429,417

 

$

3,101

 

 

0.51%

 

$

2,410,009

 

$

3,008

 

 

0.51%

Time deposits

 

 

1,056,692

 

 

4,438

 

 

1.69%

 

 

1,062,511

 

 

4,464

 

 

1.67%

 

 

1,078,554

 

 

3,607

 

 

1.36%

Securities sold under agreements to repurchase

 

 

44,898

 

 

97

 

 

0.87%

 

 

57,870

 

 

149

 

 

1.02%

 

 

60,589

 

 

153

 

 

1.02%

Federal Home Loan Bank advances

 

 

219,353

 

 

898

 

 

1.65%

 

 

301,433

 

 

1,514

 

 

1.99%

 

 

248,779

 

 

1,486

 

 

2.42%

Total interest bearing liabilities

 

$

3,818,072

 

$

8,321

 

 

0.88%

 

$

3,851,231

 

$

9,228

 

 

0.95%

 

$

3,797,931

 

$

8,254

 

 

0.88%

Demand deposits

 

$

1,137,273

 

 

 

 

 

 

 

$

1,177,958

 

 

 

 

 

 

 

$

1,108,150

 

 

 

 

 

 

Other liabilities

 

 

133,126

 

 

 

 

 

 

 

 

130,576

 

 

 

 

 

 

 

 

97,107

 

 

 

 

 

 

Total liabilities

 

 

5,088,471

 

 

 

 

 

 

 

 

5,159,765

 

 

 

 

 

 

 

 

5,003,188

 

 

 

 

 

 

Shareholders' equity

 

 

774,380

 

 

 

 

 

 

 

 

764,694

 

 

 

 

 

 

 

 

707,832

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

5,862,851

 

 

 

 

 

 

 

$

5,924,459

 

 

 

 

 

 

 

$

5,711,020

 

 

 

 

 

 

Net interest income FTE(2)

 

 

 

 

$

51,615

 

 

 

 

 

 

 

$

51,678

 

 

 

 

 

 

 

$

52,393

 

 

 

Interest rate spread FTE(2)

 

 

 

 

 

 

 

 

3.62%

 

 

 

 

 

 

 

 

3.49%

 

 

 

 

 

 

 

 

3.81%

Net interest earning assets

 

$

1,540,332

 

 

 

 

 

 

 

$

1,586,810

 

 

 

 

 

 

 

$

1,449,334

 

 

 

 

 

 

Net interest margin FTE(2)

 

 

 

 

 

 

 

 

3.87%

 

 

 

 

 

 

 

 

3.77%

 

 

 

 

 

 

 

 

4.05%

Average transaction deposits

 

$

3,634,402

 

 

 

 

 

 

 

$

3,607,375

 

 

 

 

 

 

 

$

3,518,159

 

 

 

 

 

 

Average total deposits

 

 

4,691,094

 

 

 

 

 

 

 

 

4,669,886

 

 

 

 

 

 

 

 

4,596,713

 

 

 

 

 

 

Ratio of average interest earning assets to average interest bearing liabilities

 

 

140.34%

 

 

 

 

 

 

 

 

141.20%

 

 

 

 

 

 

 

 

138.16%

 

 

 

 

 

 

                                                      

 

 

 

(1)

    

Originated loans are net of deferred loan fees, less costs, which are included in interest income over the life of the loan.

(2)

    

Presented on a fully taxable equivalent basis using the statutory tax rate of 21%. The tax equivalent adjustments included above are $1,268, $1,290 and $1,227 for the three months ended March 31, 2020, December 31, 2019 and March 31, 2019, respectively.

 

 

 

 

 

 

 

 

 

 

10