DENVER, July 19, 2022 (GLOBE NEWSWIRE) -- National Bank Holdings Corporation (NYSE: NBHC) reported:
| For the quarter | For the quarter - adjusted(1) | |||||||||||||||||||||||
| 2Q22 | 1Q22 | 2Q21 | 2Q22 | 1Q22 | 2Q21 | |||||||||||||||||||
| Net income ($000's) | $ | 20,362 | $ | 18,352 | $ | 24,200 | $ | 21,135 | $ | 18,547 | $ | 24,200 | ||||||||||||
| Earnings per share - diluted | $ | 0.67 | $ | 0.60 | $ | 0.77 | $ | 0.69 | $ | 0.61 | $ | 0.77 | ||||||||||||
| Return on average tangible assets(2) | 1.16% | 1.07% | 1.41% | 1.20% | 1.08% | 1.41% | ||||||||||||||||||
| Return on average tangible common equity(2) | 11.64% | 10.31% | 13.41% | 12.08% | 10.42% | 13.41% | ||||||||||||||||||
| (1) | See non-GAAP reconciliations below. | |
| (2) | Ratios are annualized. | |
In announcing NBHC’s second quarter 2022 results, Tim Laney shared, “We are pleased to deliver strong quarterly earnings of $0.67 per diluted share and revenue growth of 42.4% annualized over the prior quarter. Our teams delivered another record quarter of loan fundings driving solid loan growth of 12.3% annualized. Our prudent approach to extending credit coupled with the diversity and granularity of our loan portfolio, continues to produce excellent credit quality with just three basis points of annualized net charge-offs for the quarter and a record low non-performing loans ratio of 0.20%. Our fortress levels of capital and excess liquidity provide meaningful optionality and leave us well positioned to tackle challenges from any potential economic downturn.”
Mr. Laney added, “We believe that our focus on building relationships will carry our positive momentum into the second half of the year. Our teams are well prepared to close on the two pending strategic acquisitions that will further enhance our service offerings and deepen our presence in the fast-growing and attractive Rocky Mountain region. Bank of Jackson Hole and Rock Canyon Bank each provide best-in-class scalable banking solutions for our clients and share our strong commitment to improving the communities we serve. We are making good progress on our regulatory approvals having just received regulatory approval from the Federal Reserve and Utah for Rock Canyon Bank and we remain on track for the Bank of Jackson Hole.”
Second Quarter 2022 Results
(All comparisons refer to the first quarter of 2022, except as noted)
Net income increased $2.0 million to $20.4 million, or $0.67 per diluted share, during the second quarter of 2022. Adjusting for $1.0 million of non-recurring expenses related to the previously announced acquisitions of Bank of Jackson Hole and Rock Canyon Bank, net income totaled $21.1 million, or $0.69 per diluted share. The return on average tangible assets was 1.16%, compared to 1.07%, and the return on average tangible common equity was 11.64%, compared to 10.31%. Adjusting for non-recurring acquisition-related expenses, the return on average tangible assets was 1.20%, and the return on average tangible common equity was 12.08%.
Net Interest Income
Fully taxable equivalent net interest income totaled a record $57.4 million during the second quarter of 2022, an increase of $9.4 million, or 78.4% annualized, driven by a $99.8 million increase in average earning assets and a 48 basis point widening of the fully taxable equivalent net interest margin to 3.38%. The increase in average earning assets was primarily due to increases in average originated loans of $232.9 million and average investment securities of $117.2 million. The margin expansion was driven by a 47 basis point increase in earning asset yields, as a result of several increases in the federal funds rate since March 2022 and due to excess cash being deployed into originated loans. Additionally, this quarter’s net interest income benefitted from $2.2 million accelerated accretion income in acquired loans. The cost of deposits improved one basis point to a record low 0.16%.
Loans
Total loans increased $142.8 million or 12.3% annualized to $4.8 billion at June 30, 2022, led by commercial loan growth of $109.5 million or 13.3% annualized. We generated record quarterly loan fundings totaling $492.5 million, led by commercial loan fundings of $308.7 million.
Asset Quality and Provision for Loan Losses
The Company recorded $2.5 million of provision expense, compared to $0.3 million of provision release last quarter. The quarter’s provision was driven by strong loan growth and higher reserve requirements from changes in the CECL model’s underlying macro-economic forecast. Annualized net charge-offs totaled 0.03% of total loans, compared to 0.05%. Non-performing loans (comprised of non-accrual loans and non-accrual TDRs) decreased four basis points to a record low 0.20% of total loans, and non-performing assets decreased four basis points to a record low 0.31% of total loans and OREO. The allowance for credit losses as a percentage of loans totaled 1.06%, compared to 1.04% at March 31, 2022.
Deposits
Average total deposits increased $61.5 million or 4.0% annualized to $6.3 billion for the second quarter 2022. Average transaction deposits (defined as total deposits less time deposits) increased $92.4 million or 6.9% annualized. The mix of transaction deposits to total deposits remained at 87.4% at June 30, 2022. The loan to deposit ratio increased 432 basis points to 77.7%.
Non-Interest Income
Non-interest income totaled $16.8 million, a decrease of $2.3 million, primarily driven by $2.7 million lower mortgage banking income due to lower refinance activity. Service charges and bank card fees increased a combined $0.7 million during the quarter due to seasonality.
Non-Interest Expense
Non-interest expense totaled $45.6 million, an increase of $1.5 million from the prior quarter. Included in the quarter were $1.0 million of non-recurring acquisition-related expenses with $0.8 million included in professional fees and $0.2 million included in other non-interest expense. Salaries and benefits decreased $0.6 million largely due to lower mortgage banking-related compensation. The fully taxable equivalent efficiency ratio was 61.1% at June 30, 2022, compared to 65.3% at March 31, 2022. Adjusting for non-recurring acquisition-related expenses, the fully taxable equivalent efficiency ratio was 59.7%.
Income tax expense totaled $4.4 million during the second quarter, compared to $3.6 million, driven by the increase in the quarter’s pre-tax income. The effective tax rate was 17.6% and 16.4% for the second and first quarters, respectively. The lower rate compared to the statutory rate reflects the continued success of our tax strategies and tax-exempt income.
Capital
Capital ratios continue to be strong and in excess of federal bank regulatory agency “well capitalized” thresholds. The Tier 1 leverage ratios at June 30, 2022 for the consolidated company and NBH Bank were 10.54% and 9.07%, respectively. Shareholders’ equity totaled $815.6 million at June 30, 2022 decreasing $4.7 million primarily due to a $19.4 million higher accumulated other comprehensive loss, partially offset by a $13.4 million increase in retained earnings.
Common book value per share totaled $27.12 at June 30, 2022. Tangible common book value per share decreased $0.19 to $23.45 at June 30, 2022 as this quarter’s earnings, net of dividends paid, of $0.45 were outpaced by a $0.64 increase in accumulated other comprehensive loss. Excluding accumulated other comprehensive loss, the tangible book value per share increased $0.45 to $25.38 at June 30, 2022.
Year-Over-Year Review
(All comparisons refer to the first six months of 2021, except as noted)
Net income totaled $38.7 million, or $1.27 per diluted share, for the first six months of 2022, compared to $51.0 million, or $1.63 per diluted share, in the same period prior year. Adjusting for $1.3 million of non-recurring acquisition-related expenses, net income totaled $39.7 million, or $1.30 per diluted share, for the first six months of 2022. The rise in mortgage rates in 2022 have resulted in lower mortgage banking income during the first six months of 2022. However, the increases in the Federal Reserve’s interest rates are driving higher loan yields resulting in increasing levels of net interest income. The return on average tangible assets was 1.11%, compared to 1.53% in the same period prior year, and the return on average tangible common equity was 10.97%, compared to 14.29%. Adjusting for non-recurring acquisition-related expenses, the return on average tangible assets was 1.14%, and the return on average tangible common equity was 11.24%.
Fully taxable equivalent net interest income totaled $105.3 million, an increase of $12.7 million or 13.7%. Average earning assets increased $352.0 million, or 5.5%, including average originated loan growth of $437.7 million. The fully taxable equivalent net interest margin widened 23 basis points to 3.15%, benefitting from a 16 basis point increase in earning asset yields to 3.32% and an 11 basis point decrease in the cost of funds to 0.30%.
Loans outstanding totaled $4.8 billion, increasing $516.3 million or 12.0%, led by commercial loan growth of $428.8 million, or 14.4%. New loan fundings over the trailing 12 months totaled a record $1.8 billion, led by commercial loan fundings of $1.3 billion.
The Company recorded $2.2 million of loan loss provision expense during the first six months of 2022, compared to a provision release of $9.4 million in the same period prior year. The provision expense was driven by loan growth and higher reserve requirements from changes in the CECL model’s underlying macro-economic forecast. Annualized net charge-offs remained consistent at 0.04% of total loans. Non-performing loans to total loans improved 12 basis points to 0.20% at June 30, 2022. The allowance for credit losses totaled 1.06% of total loans, compared to 1.14% at June 30, 2021.
Average total deposits increased $284.8 million or 4.8% to $6.2 billion. Average transaction deposits increased $430.9 million or 8.6%, and average non-interest bearing demand deposits increased $184.2 million or 8.1%. The mix of transaction deposits to total deposits increased by 245 basis points to 87.4% at June 30, 2022, and the mix of non-interest bearing demand deposits to total deposits remained consistent at 39.6%.
Non-interest income totaled $35.8 million, a decrease of $22.8 million or 38.9%, driven by $19.7 million of lower mortgage banking income due to lower refinance activity in 2022, as well as competition driving tighter gain on sale margins. Other non-interest income decreased $2.0 million due to market adjustments on company-owned life insurance and equity method investments. Included in the first six months of 2022 was $0.8 million of banking center consolidation-related income, compared to $2.4 million in the same period last year. Service charges and bank card fees increased a combined $0.6 million compared to the first six months of 2021.
Non-interest expense totaled $89.6 million, a decrease of $6.4 million or 6.6%. Included in the first six months of 2022 were $1.3 million of non-recurring acquisition-related expenses, with $1.1 million included in professional fees and $0.2 million included in other non-interest expense. Salaries and benefits decreased $6.9 million largely due to lower mortgage banking-related compensation. Problem asset workout expense decreased $0.4 million, and gain on sale of OREO increased $0.5 million.
Income tax expense totaled $8.0 million, a decrease of $3.2 million from the same period prior year. The effective tax rate was 17.1% for the first six months of 2022, compared to 17.9%.
Conference Call
Management will host a conference call to review the results at 11:00 a.m. Eastern Time on Wednesday, July 20, 2022. Interested parties may listen to this call by dialing (800) 207-0148 using the participant passcode of 656517 and asking for the NBHC Q2 2022 Earnings Call. A telephonic replay of the call will be available beginning approximately four hours after the call’s completion through July 25, 2022, by dialing (888) 203-1112 using the confirmation code of 8588483. 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 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 stakeholder results. Through its bank subsidiary, NBH Bank, National Bank Holdings Corporation operates a network of 81 banking centers, serving individual consumers, small, medium and large businesses, and government and non-profit entities. Its banking centers are located in its core footprint of Colorado, the greater Kansas City region, Texas, Utah and New Mexico. Its comprehensive residential mortgage banking group primarily serves the bank’s core footprint. NBH Bank operates under a single state charter through the following brand names as divisions of NBH Bank: in Colorado, Community Banks of Colorado and Community Banks Mortgage; in Kansas and Missouri, Bank Midwest and Bank Midwest Mortgage; and in Texas, Utah and New Mexico, Hillcrest Bank and Hillcrest Bank Mortgage. 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.
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,” “adjusted non-interest expense,” “adjusted efficiency ratio,” “adjusted net income,” “adjusted earnings per share – diluted,” “adjusted net income excluding core deposit intangible amortization expense, after tax,” “adjusted return on average tangible assets,” “adjusted return on average tangible common equity,” 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.
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 obtain regulatory approvals and meet other closing conditions to the mergers on the expected terms and schedule; delay in closing the mergers; difficulties and delays in integrating the NBHC, Community Bancorporation, and Bancshares of Jackson Hole Incorporated businesses or fully realizing cost savings and other benefits; business disruption following the proposed transactions; ability to execute our business strategy; business and economic conditions; effects of any potential government shutdowns; 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; with respect to our mortgage business, the inability to negotiate fees with investors for the purchase of our loans or our obligation to indemnify purchasers or repurchase related loans; 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; the effects of tax legislation, including the potential of future increases to prevailing tax rules, or challenges to our position; 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, including in the digital technology space our digital solution 2UniFi; 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 credit 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; a cybersecurity incident, data breach or a failure of a key information technology system; adverse effects due to the novel Coronavirus Disease 2019 (COVID-19) on the Company and its clients, counterparties, employees, and third-party service providers, and the adverse impacts on our business, financial position, results of operations, and prospects; 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.
Contact:
Analysts/Institutional Investors: Aldis Birkans, Chief Financial Officer, (720) 554-6640, ir@nationalbankholdings.com
Media: Jody Soper, Chief Marketing Officer, (303) 784-5925, Jody.Soper@nbhbank.com
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 | For the six months ended | ||||||||||||||||||
| June 30, | March31, | June30, | June 30, | June30, | |||||||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
| Total interest and dividend income | $ | 58,836 | $ | 49,525 | $ | 48,450 | $ | 108,361 | $ | 97,663 | |||||||||
| Total interest expense | 2,819 | 2,864 | 3,582 | 5,683 | 7,574 | ||||||||||||||
| Net interest income | 56,017 | 46,661 | 44,868 | 102,678 | 90,089 | ||||||||||||||
| Taxable equivalent adjustment | 1,336 | 1,313 | 1,279 | 2,649 | 2,547 | ||||||||||||||
| Net interest income FTE(1) | 57,353 | 47,974 | 46,147 | 105,327 | 92,636 | ||||||||||||||
| Provision expense (release) for loan losses | 2,504 | (322 | ) | (5,850 | ) | 2,182 | (9,425 | ) | |||||||||||
| Net interest income after provision for loan losses FTE(1) | 54,849 | 48,296 | 51,997 | 103,145 | 102,061 | ||||||||||||||
| Non-interest income: | |||||||||||||||||||
| Service charges | 3,956 | 3,710 | 3,568 | 7,666 | 7,042 | ||||||||||||||
| Bank card fees | 4,541 | 4,123 | 4,614 | 8,664 | 8,687 | ||||||||||||||
| Mortgage banking income | 6,948 | 9,666 | 13,979 | 16,614 | 36,358 | ||||||||||||||
| Other non-interest income | 1,252 | 847 | 3,105 | 2,099 | 4,098 | ||||||||||||||
| OREO-related income | 5 | — | — | 5 | 35 | ||||||||||||||
| Banking center consolidation-related income | 60 | 708 | — | 768 | 2,407 | ||||||||||||||
| Total non-interest income | 16,762 | 19,054 | 25,266 | 35,816 | 58,627 | ||||||||||||||
| Non-interest expense: | |||||||||||||||||||
| Salaries and benefits | 28,776 | 29,336 | 31,439 | 58,112 | 64,962 | ||||||||||||||
| Occupancy and equipment | 6,665 | 6,396 | 6,131 | 13,061 | 12,681 | ||||||||||||||
| Professional fees | 1,486 | 814 | 649 | 2,300 | 1,391 | ||||||||||||||
| Other non-interest expense | 8,180 | 7,352 | 7,019 | 15,532 | 13,872 | ||||||||||||||
| Problem asset workout | 144 | 163 | 294 | 307 | 732 | ||||||||||||||
| Loss (gain) on sale of OREO, net | 5 | (275 | ) | 221 | (270 | ) | 192 | ||||||||||||
| Core deposit intangible asset amortization | 296 | 296 | 296 | 592 | 592 | ||||||||||||||
| Banking center consolidation-related expense | — | — | 294 | — | 1,589 | ||||||||||||||
| Total non-interest expense | 45,552 | 44,082 | 46,343 | 89,634 | 96,011 | ||||||||||||||
| Income before income taxes FTE(1) | 26,059 | 23,268 | 30,920 | 49,327 | 64,677 | ||||||||||||||
| Taxable equivalent adjustment | 1,336 | 1,313 | 1,279 | 2,649 | 2,547 | ||||||||||||||
| Income before income taxes | 24,723 | 21,955 | 29,641 | 46,678 | 62,130 | ||||||||||||||
| Income tax expense | 4,361 | 3,603 | 5,441 | 7,964 | 11,118 | ||||||||||||||
| Net income | $ | 20,362 | $ | 18,352 | $ | 24,200 | $ | 38,714 | $ | 51,012 | |||||||||
| Earnings per share - basic | $ | 0.67 | $ | 0.61 | $ | 0.78 | $ | 1.28 | $ | 1.65 | |||||||||
| Earnings per share - diluted | 0.67 | 0.60 | 0.77 | 1.27 | 1.63 | ||||||||||||||
| (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. | |
NATIONAL BANK HOLDINGS CORPORATION
Consolidated Statements of Financial Condition (Unaudited)
(Dollars in thousands, except share and per share data)
| June 30, 2022 | March 31, 2022 | December 31, 2021 | June 30, 2021 | ||||||||||||
| ASSETS | |||||||||||||||
| Cash and cash equivalents | $ | 448,375 | $ | 786,385 | $ | 845,695 | $ | 1,004,493 | |||||||
| Investment securities available-for-sale | 805,858 | 790,384 | 691,847 | 605,798 | |||||||||||
| Investment securities held-to-maturity | 582,650 | 567,055 | 609,012 | 687,635 | |||||||||||
| Non-marketable securities | 59,754 | 54,568 | 50,740 | 14,741 | |||||||||||
| Loans | 4,817,070 | 4,674,238 | 4,513,383 | 4,300,757 | |||||||||||
| Allowance for credit losses | (50,860 | ) | (48,810 | ) | (49,694 | ) | (49,030 | ) | |||||||
| Loans, net | 4,766,210 | 4,625,428 | 4,463,689 | 4,251,727 | |||||||||||
| Loans held for sale | 48,816 | 90,152 | 139,142 | 134,805 | |||||||||||
| Other real estate owned | 4,992 | 5,063 | 7,005 | 5,124 | |||||||||||
| Premises and equipment, net | 103,690 | 95,133 | 96,747 | 95,019 | |||||||||||
| Goodwill | 115,027 | 115,027 | 115,027 | 115,027 | |||||||||||
| Intangible assets, net | 14,568 | 13,505 | 12,322 | 22,360 | |||||||||||
| Other assets | 218,059 | 198,812 | 182,785 | 199,399 | |||||||||||
| Total assets | $ | 7,167,999 | $ | 7,341,512 | $ | 7,214,011 | $ | 7,136,128 | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||
| Liabilities: | |||||||||||||||
| Non-interest bearing demand deposits | $ | 2,454,740 | $ | 2,554,820 | $ | 2,506,265 | $ | 2,437,328 | |||||||
| Interest bearing demand deposits | 597,000 | 595,137 | 555,401 | 555,865 | |||||||||||
| Savings and money market | 2,364,681 | 2,412,081 | 2,332,591 | 2,240,359 | |||||||||||
| Total transaction deposits | 5,416,421 | 5,562,038 | 5,394,257 | 5,233,552 | |||||||||||
| Time deposits | 777,977 | 802,772 | 833,916 | 924,501 | |||||||||||
| Total deposits | 6,194,398 | 6,364,810 | 6,228,173 | 6,158,053 | |||||||||||
| Securities sold under agreements to repurchase | 24,396 | 24,744 | 22,768 | 22,957 | |||||||||||
| Long-term debt | 39,532 | 39,505 | 39,478 | — | |||||||||||
| Other liabilities | 94,122 | 92,238 | 83,486 | 103,252 | |||||||||||
| Total liabilities | 6,352,448 | 6,521,297 | 6,373,905 | 6,284,262 | |||||||||||
| Shareholders' equity: | |||||||||||||||
| Common stock | 515 | 515 | 515 | 515 | |||||||||||
| Additional paid in capital | 1,014,330 | 1,014,332 | 1,014,294 | 1,011,200 | |||||||||||
| Retained earnings | 314,616 | 301,220 | 289,876 | 260,821 | |||||||||||
| Treasury stock | (455,909 | ) | (457,219 | ) | (457,616 | ) | (422,365 | ) | |||||||
| Accumulated other comprehensive (loss) income, net of tax | (58,001 | ) | (38,633 | ) | (6,963 | ) | 1,695 | ||||||||
| Total shareholders' equity | 815,551 | 820,215 | 840,106 | 851,866 | |||||||||||
| Total liabilities and shareholders' equity | $ | 7,167,999 | $ | 7,341,512 | $ | 7,214,011 | $ | 7,136,128 | |||||||
| SHARE DATA | |||||||||||||||
| Average basic shares outstanding | 30,225,898 | 30,120,195 | 30,338,265 | 30,947,206 | |||||||||||
| Average diluted shares outstanding | 30,493,265 | 30,479,261 | 30,715,500 | 31,226,351 | |||||||||||
| Ending shares outstanding | 30,075,175 | 30,008,781 | 29,958,764 | 30,800,985 | |||||||||||
| Common book value per share | $ | 27.12 | $ | 27.33 | $ | 28.04 | $ | 27.66 | |||||||
| Tangible common book value per share(1)(non-GAAP) | 23.45 | 23.64 | 24.33 | 24.01 | |||||||||||
| Tangible common book value per share, excluding accumulated other comprehensive income(1)(non-GAAP) | 25.38 | 24.93 | 24.56 | 23.95 | |||||||||||
| CAPITAL RATIOS | |||||||||||||||
| Average equity to average assets | 11.32% | 11.74% | 11.88% | 11.95% | |||||||||||
| Tangible common equity to tangible assets(1) | 9.99% | 9.81% | 10.26% | 10.53% | |||||||||||
| Tier 1 leverage ratio | 10.54% | 10.48% | 10.39% | 10.57% | |||||||||||
| Common equity tier 1 risk-based capital ratio | 13.75% | 13.94% | 14.26% | 15.31% | |||||||||||
| Tier 1 risk-based capital ratio | 13.75% | 13.94% | 14.26% | 15.31% | |||||||||||
| Total risk-based capital ratio | 15.35% | 15.56% | 15.92% | 16.27% | |||||||||||
| (1) | Represents a non-GAAP financial measure. See non-GAAP reconciliations below. | |
NATIONAL BANK HOLDINGS CORPORATION
Loan Portfolio
(Dollars in thousands)
Period End Loan Balances by Type
| June 30, 2022 | June 30, 2022 | ||||||||||||||||
| vs. March 31, 2022 | vs. June 30, 2021 | ||||||||||||||||
| June 30, 2022 | March 31, 2022 | % Change | June 30, 2021 | % Change | |||||||||||||
| Originated: | |||||||||||||||||
| Commercial: | |||||||||||||||||
| Commercial and industrial | $ | 1,588,241 | $ | 1,551,447 | 2.4 | % | $ | 1,383,388 | 14.8 | % | |||||||
| Municipal and non-profit | 996,223 | 949,125 | 5.0 | % | 860,740 | 15.7 | % | ||||||||||
| Owner-occupied commercial real estate | 592,334 | 554,345 | 6.9 | % | 479,286 | 23.6 | % | ||||||||||
| Food and agribusiness | 196,829 | 205,899 | (4.4 | )% | 195,095 | 0.9 | % | ||||||||||
| Total commercial | 3,373,627 | 3,260,816 | 3.5 | % | 2,918,509 | 15.6 | % | ||||||||||
| Commercial real estate non-owner occupied | 620,133 | 634,928 | (2.3 | )% | 570,252 | 8.7 | % | ||||||||||
| Residential real estate | 682,272 | 626,763 | 8.9 | % | 600,124 | 13.7 | % | ||||||||||
| Consumer | 17,486 | 17,321 | 1.0 | % | 17,942 | (2.5 | )% | ||||||||||
| Total originated | 4,693,518 | 4,539,828 | 3.4 | % | 4,106,827 | 14.3 | % | ||||||||||
| Acquired: | |||||||||||||||||
| Commercial: | |||||||||||||||||
| Commercial and industrial | 15,056 | 15,800 | (4.7 | )% | 18,710 | (19.5 | )% | ||||||||||
| Municipal and non-profit | 330 | 335 | (1.5 | )% | 359 | (8.1 | )% | ||||||||||
| Owner-occupied commercial real estate | 18,849 | 21,329 | (11.6 | )% | 40,435 | (53.4 | )% | ||||||||||
| Food and agribusiness | 2,849 | 2,976 | (4.3 | )% | 3,913 | (27.2 | )% | ||||||||||
| Total commercial | 37,084 | 40,440 | (8.3 | )% | 63,417 | (41.5 | )% | ||||||||||
| Commercial real estate non-owner occupied | 42,771 | 46,431 | (7.9 | )% | 67,368 | (36.5 | )% | ||||||||||
| Residential real estate | 43,486 | 47,314 | (8.1 | )% | 62,805 | (30.8 | )% | ||||||||||
| Consumer | 211 | 225 | (6.2 | )% | 340 | (37.9 | )% | ||||||||||
| Total acquired | 123,552 | 134,410 | (8.1 | )% | 193,930 | (36.3 | )% | ||||||||||
| Total loans | $ | 4,817,070 | $ | 4,674,238 | 3.1 | % | $ | 4,300,757 | 12.0 | % | |||||||
Loan Fundings(1)
| Second quarter | First quarter | Fourth quarter | Third quarter | Second quarter | |||||||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | |||||||||||||||
| Commercial: | |||||||||||||||||||
| Commercial and industrial | $ | 152,550 | $ | 169,168 | $ | 229,529 | $ | 196,289 | $ | 147,030 | |||||||||
| Municipal and non-profit | 81,428 | 49,906 | 101,450 | 43,516 | 25,131 | ||||||||||||||
| Owner occupied commercial real estate | 78,905 | 67,597 | 28,914 | 53,445 | 48,225 | ||||||||||||||
| Food and agribusiness | (4,186 | ) | 18,620 | 11,016 | 8,442 | 26,956 | |||||||||||||
| Total commercial | 308,697 | 305,291 | 370,909 | 301,692 | 247,342 | ||||||||||||||
| Commercial real estate non-owner occupied | 88,612 | 63,416 | 46,128 | 55,392 | 58,532 | ||||||||||||||
| Residential real estate | 93,220 | 49,040 | 55,873 | 54,442 | 53,962 | ||||||||||||||
| Consumer | 1,989 | 1,904 | 2,524 | 1,810 | 2,267 | ||||||||||||||
| Total | $ | 492,518 | $ | 419,651 | $ | 475,434 | $ | 413,336 | $ | 362,103 | |||||||||
| (1) | Loan fundings are defined as closed end funded loans and net fundings under revolving lines of credit. Net fundings under revolving lines of credit were $21,762, $66,430, $138,777, $29,154 and $59,520 as of the second and first quarters of 2022 and the fourth, third and second quarters of 2021, respectively. | |
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 | |||||||||||||||||||||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | |||||||||||||||||||||||||||||||
| Average | Average | Average | Average | Average | Average | ||||||||||||||||||||||||||||
| balance | Interest | rate | balance | Interest | rate | balance | Interest | rate | |||||||||||||||||||||||||
| Interest earning assets: | |||||||||||||||||||||||||||||||||
| Originated loans FTE(1)(2) | $ | 4,594,799 | $ | 47,787 | 4.17 | % | $ | 4,361,919 | $ | 42,085 | 3.91 | % | $ | 4,077,142 | $ | 40,036 | 3.94 | % | |||||||||||||||
| Acquired loans | 128,107 | 4,403 | 13.79 | % | 147,638 | 2,568 | 7.05 | % | 211,126 | 3,923 | 7.45 | % | |||||||||||||||||||||
| Loans held for sale | 78,574 | 881 | 4.50 | % | 93,639 | 756 | 3.27 | % | 159,068 | 1,213 | 3.06 | % | |||||||||||||||||||||
| Investment securities available-for-sale | 898,928 | 3,808 | 1.69 | % | 751,646 | 2,849 | 1.52 | % | 638,039 | 2,397 | 1.50 | % | |||||||||||||||||||||
| Investment securities held-to-maturity | 559,712 | 2,067 | 1.48 | % | 589,830 | 2,012 | 1.36 | % | 572,534 | 1,723 | 1.20 | % | |||||||||||||||||||||
| Other securities | 14,591 | 211 | 5.78 | % | 14,590 | 209 | 5.73 | % | 15,079 | 209 | 5.54 | % | |||||||||||||||||||||
| Interest earning deposits and securities purchased under agreements to resell | 527,589 | 1,015 | 0.77 | % | 743,239 | 359 | 0.20 | % | 888,600 | 228 | 0.10 | % | |||||||||||||||||||||
| Total interest earning assets FTE(2) | $ | 6,802,300 | $ | 60,172 | 3.55 | % | $ | 6,702,501 | $ | 50,838 | 3.08 | % | $ | 6,561,588 | $ | 49,729 | 3.04 | % | |||||||||||||||
| Cash and due from banks | $ | 75,616 | $ | 79,383 | $ | 78,148 | |||||||||||||||||||||||||||
| Other assets | 402,529 | 442,098 | 472,142 | ||||||||||||||||||||||||||||||
| Allowance for credit losses | (49,126 | ) | (49,584 | ) | (54,984 | ) | |||||||||||||||||||||||||||
| Total assets | $ | 7,231,319 | $ | 7,174,398 | $ | 7,056,894 | |||||||||||||||||||||||||||
| Interest bearing liabilities: | |||||||||||||||||||||||||||||||||
| Interest bearing demand, savings and money market deposits | $ | 2,992,986 | $ | 1,494 | 0.20 | % | $ | 2,936,158 | $ | 1,437 | 0.20 | % | $ | 2,789,681 | $ | 1,572 | 0.23 | % | |||||||||||||||
| Time deposits | 790,998 | 991 | 0.50 | % | 821,814 | 1,094 | 0.54 | % | 937,579 | 2,004 | 0.86 | % | |||||||||||||||||||||
| Securities sold under agreements to repurchase | 21,761 | 6 | 0.11 | % | 22,770 | 7 | 0.12 | % | 19,891 | 6 | 0.12 | % | |||||||||||||||||||||
| Long-term debt | 39,516 | 328 | 3.33 | % | 39,489 | 326 | 3.35 | % | — | — | 0.00 | % | |||||||||||||||||||||
| Total interest bearing liabilities | $ | 3,845,261 | $ | 2,819 | 0.29 | % | $ | 3,820,231 | $ | 2,864 | 0.30 | % | $ | 3,747,151 | $ | 3,582 | 0.38 | % | |||||||||||||||
| Demand deposits | $ | 2,469,729 | $ | 2,434,198 | $ | 2,368,810 | |||||||||||||||||||||||||||
| Other liabilities | 96,715 | 78,027 | 97,817 | ||||||||||||||||||||||||||||||
| Total liabilities | 6,411,705 | 6,332,456 | 6,213,778 | ||||||||||||||||||||||||||||||
| Shareholders' equity | 819,614 | 841,942 | 843,116 | ||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 7,231,319 | $ | 7,174,398 | $ | 7,056,894 | |||||||||||||||||||||||||||
| Net interest income FTE(2) | $ | 57,353 | $ | 47,974 | $ | 46,147 | |||||||||||||||||||||||||||
| Interest rate spread FTE(2) | 3.26 | % | 2.78 | % | 2.66 | % | |||||||||||||||||||||||||||
| Net interest earning assets | $ | 2,957,039 | $ | 2,882,270 | $ | 2,814,437 | |||||||||||||||||||||||||||
| Net interest margin FTE(2) | 3.38 | % | 2.90 | % | 2.82 | % | |||||||||||||||||||||||||||
| Average transaction deposits | $ | 5,462,715 | $ | 5,370,356 | $ | 5,158,491 | |||||||||||||||||||||||||||
| Average total deposits | 6,253,713 | 6,192,170 | 6,096,070 | ||||||||||||||||||||||||||||||
| Ratio of average interest earning assets to average interest bearing liabilities | 176.90% | 175.45% | 175.11% | ||||||||||||||||||||||||||||||
| (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 $1,336, $1,313 and $1,279 for the three months ended June 30, 2022, March 31, 2022 and June 30, 2021, respectively. | |
NATIONAL BANK HOLDINGS CORPORATION
Summary of Net Interest Margin
(Dollars in thousands)
| For the six months ended June 30, 2022 | For the six months ended June 30, 2021 | ||||||||||||||||||
| Average | Average | Average | Average | ||||||||||||||||
| balance | Interest | rate | balance | Interest | rate | ||||||||||||||
| Interest earning assets: | |||||||||||||||||||
| Originated loans FTE(1)(2) | $ | 4,479,002 | $ | 89,872 | 4.05 | % | $ | 4,041,268 | $ | 79,596 | 3.97 | % | |||||||
| Acquired loans | 137,819 | 6,971 | 10.20 | % | 224,722 | 9,051 | 8.12 | % | |||||||||||
| Loans held for sale | 86,065 | 1,637 | 3.84 | % | 195,094 | 2,730 | 2.82 | % | |||||||||||
| Investment securities available-for-sale | 825,694 | 6,657 | 1.61 | % | 662,250 | 4,882 | 1.47 | % | |||||||||||
| Investment securities held-to-maturity | 574,688 | 4,079 | 1.42 | % | 497,245 | 3,139 | 1.26 | % | |||||||||||
| Other securities | 14,590 | 420 | 5.76 | % | 15,446 | 419 | 5.43 | % | |||||||||||
| Interest earning deposits and securities purchased under agreements to resell | 634,818 | 1,374 | 0.44 | % | 764,626 | 393 | 0.10 | % | |||||||||||
| Total interest earning assets FTE(2) | $ | 6,752,676 | $ | 111,010 | 3.32 | % | $ | 6,400,651 | $ | 100,210 | 3.16 | % | |||||||
| Cash and due from banks | $ | 77,489 | $ | 79,692 | |||||||||||||||
| Other assets | 422,205 | 483,617 | |||||||||||||||||
| Allowance for credit losses | (49,354 | ) | (56,938 | ) | |||||||||||||||
| Total assets | $ | 7,203,016 | $ | 6,907,022 | |||||||||||||||
| Interest bearing liabilities: | |||||||||||||||||||
| Interest bearing demand, savings and money market deposits | $ | 2,964,729 | $ | 2,931 | 0.20 | % | $ | 2,717,983 | $ | 3,224 | 0.24 | % | |||||||
| Time deposits | 806,321 | 2,085 | 0.52 | % | 952,431 | 4,339 | 0.92 | % | |||||||||||
| Securities sold under agreements to repurchase | 22,263 | 13 | 0.12 | % | 20,630 | 11 | 0.11 | % | |||||||||||
| Long-term debt | 39,503 | 654 | 3.34 | % | — | — | 0.00 | % | |||||||||||
| Total interest bearing liabilities | $ | 3,832,816 | $ | 5,683 | 0.30 | % | $ | 3,691,044 | $ | 7,574 | 0.41 | % | |||||||
| Demand deposits | $ | 2,452,062 | $ | 2,267,900 | |||||||||||||||
| Other liabilities | 87,422 | 109,148 | |||||||||||||||||
| Total liabilities | 6,372,300 | 6,068,092 | |||||||||||||||||
| Shareholders' equity | 830,716 | 838,930 | |||||||||||||||||
| Total liabilities and shareholders' equity | $ | 7,203,016 | $ | 6,907,022 | |||||||||||||||
| Net interest income FTE(2) | $ | 105,327 | $ | 92,636 | |||||||||||||||
| Interest rate spread FTE(2) | 3.02 | % | 2.75 | % | |||||||||||||||
| Net interest earning assets | $ | 2,919,860 | $ | 2,709,607 | |||||||||||||||
| Net interest margin FTE(2) | 3.15 | % | 2.92 | % | |||||||||||||||
| Average transaction deposits | $ | 5,416,791 | $ | 4,985,883 | |||||||||||||||
| Average total deposits | 6,223,112 | 5,938,314 | |||||||||||||||||
| Ratio of average interest earning assets to average interest bearing liabilities | 176.18% | 173.41% | |||||||||||||||||
| (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 $2,649 and $2,547 for the six months ended June 30, 2022 and June 30, 2021, respectively. | |
NATIONAL BANK HOLDINGS CORPORATION
Allowance for Credit Losses and Asset Quality
(Dollars in thousands)
Allowance for Credit Losses Analysis
| As of and for the three months ended | |||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | |||||||||
| Beginning allowance for credit losses | $ | 48,810 | $ | 49,694 | $ | 55,057 | |||||
| Charge-offs | (451 | ) | (634 | ) | (925 | ) | |||||
| Recoveries | 115 | 75 | 198 | ||||||||
| Provision expense (release) | 2,386 | (325 | ) | (5,300 | ) | ||||||
| Ending allowance for credit losses ("ACL") | $ | 50,860 | $ | 48,810 | $ | 49,030 | |||||
| Ratio of annualized net charge-offs to average total loans during the period | 0.03% | 0.05% | 0.07% | ||||||||
| Ratio of ACL to total loans outstanding at period end | 1.06% | 1.04% | 1.14% | ||||||||
| Ratio of ACL to total non-performing loans at period end | 515.72% | 440.01% | 353.22% | ||||||||
| Total loans | $ | 4,817,070 | $ | 4,674,238 | $ | 4,300,757 | |||||
| Average total loans during the period | 4,711,416 | 4,520,205 | 4,312,128 | ||||||||
| Total non-performing loans | 9,862 | 11,093 | 13,881 | ||||||||
Past Due and Non-accrual Loans
| June 30, 2022 | March 31, 2022 | June 30, 2021 | |||||||||
| Loans 30-89 days past due and still accruing interest | $ | 1,781 | $ | 3,034 | $ | 2,098 | |||||
| Loans 90 days past due and still accruing interest | 194 | 389 | 767 | ||||||||
| Non-accrual loans | 9,862 | 11,093 | 13,881 | ||||||||
| Total past due and non-accrual loans | $ | 11,837 | $ | 14,516 | $ | 16,746 | |||||
| Total 90 days past due and still accruing interest and non-accrual loans to total loans | 0.21% | 0.25% | 0.34% | ||||||||
Asset Quality Data
| June 30, 2022 | March 31, 2022 | June 30, 2021 | |||||||||
| Non-performing loans | $ | 9,862 | $ | 11,093 | $ | 13,881 | |||||
| OREO | 4,992 | 5,063 | 5,124 | ||||||||
| Total non-performing assets | $ | 14,854 | $ | 16,156 | $ | 19,005 | |||||
| Accruing restructured loans | $ | 7,208 | $ | 4,979 | $ | 11,844 | |||||
| Total non-performing loans to total loans | 0.20% | 0.24% | 0.32% | ||||||||
| Total non-performing assets to total loans and OREO | 0.31% | 0.35% | 0.44% | ||||||||
NATIONAL BANK HOLDINGS CORPORATION
Key Ratios(1)
| As of and for the three months ended | As of and for the six months ended | |||||||||||||
| June 30, | March31, | June30, | June 30, | June30, | ||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||
| Return on average assets | 1.13 | % | 1.04 | % | 1.38 | % | 1.08 | % | 1.49 | % | ||||
| Return on average tangible assets(2) | 1.16 | % | 1.07 | % | 1.41 | % | 1.11 | % | 1.53 | % | ||||
| Return on average tangible assets, adjusted(2) | 1.20 | % | 1.08 | % | 1.41 | % | 1.14 | % | 1.53 | % | ||||
| Return on average equity | 9.96 | % | 8.84 | % | 11.51 | % | 9.40 | % | 12.26 | % | ||||
| Return on average tangible common equity(2) | 11.64 | % | 10.31 | % | 13.41 | % | 10.97 | % | 14.29 | % | ||||
| Return on average tangible common equity, adjusted(2) | 12.08 | % | 10.42 | % | 13.41 | % | 11.24 | % | 14.29 | % | ||||
| Loan to deposit ratio (end of period) | 77.76 | % | 73.44 | % | 69.84 | % | 77.76 | % | 69.84 | % | ||||
| Non-interest bearing deposits to total deposits (end of period) | 39.63 | % | 40.14 | % | 39.58 | % | 39.63 | % | 39.58 | % | ||||
| Net interest margin(3) | 3.30 | % | 2.82 | % | 2.74 | % | 3.07 | % | 2.84 | % | ||||
| Net interest margin FTE(2)(3) | 3.38 | % | 2.90 | % | 2.82 | % | 3.15 | % | 2.92 | % | ||||
| Interest rate spread FTE(2)(4) | 3.26 | % | 2.78 | % | 2.66 | % | 3.02 | % | 2.75 | % | ||||
| Yield on earning assets(5) | 3.47 | % | 3.00 | % | 2.96 | % | 3.24 | % | 3.08 | % | ||||
| Yield on earning assets FTE(2)(5) | 3.55 | % | 3.08 | % | 3.04 | % | 3.32 | % | 3.16 | % | ||||
| Cost of interest bearing liabilities(5) | 0.29 | % | 0.30 | % | 0.38 | % | 0.30 | % | 0.41 | % | ||||
| Cost of deposits | 0.16 | % | 0.17 | % | 0.24 | % | 0.16 | % | 0.26 | % | ||||
| Non-interest income to total revenue FTE(2) | 22.62 | % | 28.43 | % | 35.38 | % | 25.38 | % | 38.76 | % | ||||
| Non-interest expense to average assets | 2.53 | % | 2.49 | % | 2.63 | % | 2.51 | % | 2.80 | % | ||||
| Efficiency ratio | 62.18 | % | 66.63 | % | 65.66 | % | 64.29 | % | 64.16 | % | ||||
| Efficiency ratio FTE(2) | 61.06 | % | 65.32 | % | 64.48 | % | 63.09 | % | 63.08 | % | ||||
| Efficiency ratio FTE, adjusted(2) | 59.70 | % | 64.95 | % | 64.48 | % | 62.19 | % | 63.08 | % | ||||
| Total Loans Asset Quality Data(6)(7)(8) | ||||||||||||||
| Non-performing loans to total loans | 0.20 | % | 0.24 | % | 0.32 | % | 0.20 | % | 0.32 | % | ||||
| Non-performing assets to total loans and OREO | 0.31 | % | 0.35 | % | 0.44 | % | 0.31 | % | 0.44 | % | ||||
| Allowance for credit losses to total loans | 1.06 | % | 1.04 | % | 1.14 | % | 1.06 | % | 1.14 | % | ||||
| Allowance for credit losses to non-performing loans | 515.72 | % | 440.01 | % | 353.22 | % | 515.72 | % | 353.22 | % | ||||
| Net charge-offs to average loans | 0.03 | % | 0.05 | % | 0.07 | % | 0.04 | % | 0.04 | % | ||||
| (1) | Ratios are annualized. | |
| (2) | Ratio represents non-GAAP financial measure. See non-GAAP reconciliations below. | |
| (3) | Net interest margin represents net interest income, including accretion income on interest earning assets, as a percentage of average interest earning assets. | |
| (4) | Interest rate spread represents the difference between the weighted average yield on interest earning assets and the weighted average cost of interest bearing liabilities. | |
| (5) | Interest earning assets include assets that earn interest/accretion or dividends. Any market value adjustments on investment securities or loans are excluded from interest earning assets. | |
| (6) | Non-performing loans consist of non-accruing loans and restructured loans on non-accrual. | |
| (7) | Non-performing assets include non-performing loans and other real estate owned. | |
| (8) | Total loans are net of unearned discounts and fees. | |
NATIONAL BANK HOLDINGS CORPORATION
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(Dollars in thousands, except share and per share data)
Tangible Common Book Value Ratios
| June 30, 2022 | March 31, 2022 | December 31, 2021 | June 30, 2021 | |||||||||||||
| Total shareholders' equity | $ | 815,551 | $ | 820,215 | $ | 840,106 | $ | 851,866 | ||||||||
| Less: goodwill and core deposit intangible (“CDI”) assets, net | (120,800 | ) | (121,096 | ) | (121,392 | ) | (121,983 | ) | ||||||||
| Add: deferred tax liability related to goodwill | 10,527 | 10,298 | 10,070 | 9,612 | ||||||||||||
| Tangible common equity (non-GAAP) | $ | 705,278 | $ | 709,417 | $ | 728,784 | $ | 739,495 | ||||||||
| Total assets | $ | 7,167,999 | $ | 7,341,512 | $ | 7,214,011 | $ | 7,136,128 | ||||||||
| Less: goodwill and CDI assets, net | (120,800 | ) | (121,096 | ) | (121,392 | ) | (121,983 | ) | ||||||||
| Add: deferred tax liability related to goodwill | 10,527 | 10,298 | 10,070 | 9,612 | ||||||||||||
| Tangible assets (non-GAAP) | $ | 7,057,726 | $ | 7,230,714 | $ | 7,102,689 | $ | 7,023,757 | ||||||||
| Tangible common equity to tangible assets calculations: | ||||||||||||||||
| Total shareholders' equity to total assets | 11.38% | 11.17% | 11.65% | 11.94% | ||||||||||||
| Less: impact of goodwill and CDI assets, net | (1.39)% | (1.36)% | (1.39)% | (1.41)% | ||||||||||||
| Tangible common equity to tangible assets (non-GAAP) | 9.99% | 9.81% | 10.26% | 10.53% | ||||||||||||
| Tangible common book value per share calculations: | ||||||||||||||||
| Tangible common equity (non-GAAP) | $ | 705,278 | $ | 709,417 | $ | 728,784 | $ | 739,495 | ||||||||
| Divided by: ending shares outstanding | 30,075,175 | 30,008,781 | 29,958,764 | 30,800,985 | ||||||||||||
| Tangible common book value per share (non-GAAP) | $ | 23.45 | $ | 23.64 | $ | 24.33 | $ | 24.01 | ||||||||
| Tangible common book value per share, excluding accumulated other comprehensive income calculations: | ||||||||||||||||
| Tangible common equity (non-GAAP) | $ | 705,278 | $ | 709,417 | $ | 728,784 | $ | 739,495 | ||||||||
| Accumulated other comprehensive loss (income), net of tax | 58,001 | 38,633 | 6,963 | (1,695 | ) | |||||||||||
| Tangible common book value, excluding accumulated other comprehensive loss (income), net of tax (non-GAAP) | 763,279 | 748,050 | 735,747 | 737,800 | ||||||||||||
| Divided by: ending shares outstanding | 30,075,175 | 30,008,781 | 29,958,764 | 30,800,985 | ||||||||||||
| Tangible common book value per share, excluding accumulated other comprehensive loss (income), net of tax (non-GAAP) | $ | 25.38 | $ | 24.93 | $ | 24.56 | $ | 23.95 | ||||||||
NATIONAL BANK HOLDINGS CORPORATION
(Dollars in thousands, except share and per share data)
Return on Average Tangible Assets and Return on Average Tangible Equity
| As of and for the three months ended | As of and for the six months ended | |||||||||||||||||||
| June 30, | March31, | June30, | June 30, | June30, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
| Net income | $ | 20,362 | $ | 18,352 | $ | 24,200 | $ | 38,714 | $ | 51,012 | ||||||||||
| Add: impact of CDI amortization expense, after tax | 227 | 227 | 228 | 455 | 455 | |||||||||||||||
| Net income excluding the impact of CDI amortization expense, after tax | $ | 20,589 | $ | 18,579 | $ | 24,428 | $ | 39,169 | $ | 51,467 | ||||||||||
| Average assets | $ | 7,231,319 | $ | 7,174,398 | $ | 7,056,894 | $ | 7,203,016 | $ | 6,907,022 | ||||||||||
| Less: average goodwill and CDI asset, net of deferred tax liability related to goodwill | (110,446 | ) | (110,973 | ) | (112,552 | ) | (110,594 | ) | (112,698 | ) | ||||||||||
| Average tangible assets (non-GAAP) | $ | 7,120,873 | $ | 7,063,425 | $ | 6,944,342 | $ | 7,092,422 | $ | 6,794,324 | ||||||||||
| Average shareholders' equity | $ | 819,614 | $ | 841,942 | $ | 843,116 | $ | 830,716 | $ | 838,930 | ||||||||||
| Less: average goodwill and CDI asset, net of deferred tax liability related to goodwill | (110,446 | ) | (110,973 | ) | (112,552 | ) | (110,594 | ) | (112,698 | ) | ||||||||||
| Average tangible common equity (non-GAAP) | $ | 709,168 | $ | 730,969 | $ | 730,564 | $ | 720,122 | $ | 726,232 | ||||||||||
| Return on average assets | 1.13% | 1.04% | 1.38% | 1.08% | 1.49% | |||||||||||||||
| Return on average tangible assets (non-GAAP) | 1.16% | 1.07% | 1.41% | 1.11% | 1.53% | |||||||||||||||
| Return on average equity | 9.96% | 8.84% | 11.51% | 9.40% | 12.26% | |||||||||||||||
| Return on average tangible common equity (non-GAAP) | 11.64% | 10.31% | 13.41% | 10.97% | 14.29% | |||||||||||||||
Fully Taxable Equivalent Yield on Earning Assets and Net Interest Margin
| As of and for the three months ended | As of and for the six months ended | |||||||||||||||||||
| June 30, | March31, | June30, | June 30, | June30, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
| Interest income | $ | 58,836 | $ | 49,525 | $ | 48,450 | $ | 108,361 | $ | 97,663 | ||||||||||
| Add: impact of taxable equivalent adjustment | 1,336 | 1,313 | 1,279 | 2,649 | 2,547 | |||||||||||||||
| Interest income FTE (non-GAAP) | $ | 60,172 | $ | 50,838 | $ | 49,729 | $ | 111,010 | $ | 100,210 | ||||||||||
| Net interest income | $ | 56,017 | $ | 46,661 | $ | 44,868 | $ | 102,678 | $ | 90,089 | ||||||||||
| Add: impact of taxable equivalent adjustment | 1,336 | 1,313 | 1,279 | 2,649 | 2,547 | |||||||||||||||
| Net interest income FTE (non-GAAP) | $ | 57,353 | $ | 47,974 | $ | 46,147 | $ | 105,327 | $ | 92,636 | ||||||||||
| Average earning assets | $ | 6,802,300 | $ | 6,702,501 | $ | 6,561,588 | $ | 6,752,676 | $ | 6,400,651 | ||||||||||
| Yield on earning assets | 3.47% | 3.00% | 2.96% | 3.24% | 3.08% | |||||||||||||||
| Yield on earning assets FTE (non-GAAP) | 3.55% | 3.08% | 3.04% | 3.32% | 3.16% | |||||||||||||||
| Net interest margin | 3.30% | 2.82% | 2.74% | 3.07% | 2.84% | |||||||||||||||
| Net interest margin FTE (non-GAAP) | 3.38% | 2.90% | 2.82% | 3.15% | 2.92% | |||||||||||||||
Efficiency Ratio
| As of and for the three months ended | As of and for the six months ended | |||||||||||||||||||
| June 30, | March31, | June30, | June 30, | June30, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
| Net interest income | $ | 56,017 | $ | 46,661 | $ | 44,868 | $ | 102,678 | $ | 90,089 | ||||||||||
| Add: impact of taxable equivalent adjustment | 1,336 | 1,313 | 1,279 | 2,649 | 2,547 | |||||||||||||||
| Net interest income, FTE (non-GAAP) | $ | 57,353 | $ | 47,974 | $ | 46,147 | $ | 105,327 | $ | 92,636 | ||||||||||
| Non-interest income | $ | 16,762 | $ | 19,054 | $ | 25,266 | $ | 35,816 | $ | 58,627 | ||||||||||
| Non-interest expense | $ | 45,552 | $ | 44,082 | $ | 46,343 | $ | 89,634 | $ | 96,011 | ||||||||||
| Less: CDI asset amortization | (296 | ) | (296 | ) | (296 | ) | (592 | ) | (592 | ) | ||||||||||
| Non-interest expense, excluding CDI asset amortization | $ | 45,256 | $ | 43,786 | $ | 46,047 | $ | 89,042 | $ | 95,419 | ||||||||||
| Non-interest expense, excluding CDI asset amortization | $ | 45,256 | $ | 43,786 | $ | 46,047 | $ | 89,042 | $ | 95,419 | ||||||||||
| Acquisition-related expenses | (1,006 | ) | (254 | ) | — | (1,260 | ) | — | ||||||||||||
| Adjusted non-interest expense (non-GAAP) | $ | 44,250 | $ | 43,532 | $ | 46,047 | $ | 87,782 | $ | 95,419 | ||||||||||
| Efficiency ratio | 62.18% | 66.63% | 65.66% | 64.29% | 64.16% | |||||||||||||||
| Efficiency ratio FTE (non-GAAP) | 61.06% | 65.32% | 64.48% | 63.09% | 63.08% | |||||||||||||||
| Adjusted efficiency ratio FTE (non-GAAP) | 59.70% | 64.95% | 64.48% | 62.19% | 63.08% | |||||||||||||||
Adjusted Financial Results
| As of and for the three months ended | As of and for the six months ended | |||||||||||||||||||
| June 30, | March31, | June30, | June 30, | June30, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
| Adjustments to net income: | ||||||||||||||||||||
| Net income | $ | 20,362 | $ | 18,352 | $ | 24,200 | $ | 38,714 | $ | 51,012 | ||||||||||
| Adjustments(1) | 773 | 195 | — | 968 | — | |||||||||||||||
| Adjusted net income (non-GAAP) | $ | 21,135 | $ | 18,547 | $ | 24,200 | $ | 39,682 | $ | 51,012 | ||||||||||
| Adjustments to earnings per share: | ||||||||||||||||||||
| Earnings per share - diluted | $ | 0.67 | $ | 0.60 | $ | 0.77 | $ | 1.27 | $ | 1.63 | ||||||||||
| Adjustments(1) | 0.02 | 0.01 | — | 0.03 | — | |||||||||||||||
| Adjusted earnings per share - diluted (non-GAAP) | $ | 0.69 | $ | 0.61 | $ | 0.77 | $ | 1.30 | $ | 1.63 | ||||||||||
| Adjustments to return on average tangible assets: | ||||||||||||||||||||
| Adjusted net income (non-GAAP) | $ | 21,135 | $ | 18,547 | $ | 24,200 | $ | 39,682 | $ | 51,012 | ||||||||||
| Add: impact of CDI amortization expense, after tax | 227 | 227 | 228 | 455 | 455 | |||||||||||||||
| Adjusted net income excluding CDI amortization expense, after tax (non-GAAP) | 21,362 | 18,774 | 24,428 | 40,137 | 51,467 | |||||||||||||||
| Average tangible assets (non-GAAP) | 7,120,873 | 7,063,425 | 6,944,342 | 7,092,422 | 6,794,324 | |||||||||||||||
| Adjusted return on average tangible assets (non-GAAP) | 1.20% | 1.08% | 1.41% | 1.14% | 1.53% | |||||||||||||||
| Adjustments to return on average tangible common equity: | ||||||||||||||||||||
| Adjusted net income excluding CDI amortization expense, after tax (non-GAAP) | $ | 21,362 | $ | 18,774 | $ | 24,428 | $ | 40,137 | $ | 51,467 | ||||||||||
| Average tangible common equity (non-GAAP) | 709,168 | 730,969 | 730,564 | 720,122 | 726,232 | |||||||||||||||
| Adjusted return on average tangible common equity (non-GAAP) | 12.08% | 10.42% | 13.41% | 11.24% | 14.29% | |||||||||||||||
| Adjustments to non-interest expense: | ||||||||||||||||||||
| Non-interest expense | $ | 45,552 | $ | 44,082 | $ | 46,343 | $ | 89,634 | $ | 96,011 | ||||||||||
| Adjustments(1) | 1,006 | 254 | — | 1,260 | — | |||||||||||||||
| Adjusted non-interest expense (non-GAAP) | 44,546 | 43,828 | 46,343 | 88,374 | 96,011 | |||||||||||||||
| Non-interest expense to average assets, adjusted (non-GAAP) | 2.47% | 2.48% | 2.63% | 2.47% | 2.80% | |||||||||||||||
| (1) Adjustments: | ||||||||||||||||||||
| Non-interest expense adjustments: | ||||||||||||||||||||
| Acquisition-related expenses | $ | 1,006 | $ | 254 | $ | — | $ | 1,260 | $ | — | ||||||||||
| Tax expense impact | (233 | ) | (59 | ) | — | (292 | ) | — | ||||||||||||
| Adjustments (non-GAAP) | $ | 773 | $ | 195 | $ | — | $ | 968 | $ | — | ||||||||||
