• National Bank Holdings Corporation Announces Fourth Quarter and Record Full Year 2023 Financial Results

    Источник: Nasdaq GlobeNewswire / 23 янв 2024 15:10:08   America/Chicago

    DENVER, Jan. 23, 2024 (GLOBE NEWSWIRE) -- National Bank Holdings Corporation (NYSE: NBHC) reported:

                          
      For the quarter For the year Adjusted (1)
      4Q23 3Q23 4Q22 2023  2022  4Q22 - QTD 4Q22 -YTD
    Net income ($000's) $ 33,121  $36,087  $16,721  $ 142,048  $71,274  $34,546  $99,577 
    Earnings per share - diluted $ 0.87  $0.94  $0.44  $ 3.72  $2.18  $0.91  $3.05 
    Return on average tangible assets(2)  1.44%  1.58%  0.77%  1.57%  0.95%  1.55%  1.32%
    Return on average tangible common equity(2)  16.56%  18.38%  9.17%  18.23%  9.91%  18.37%  13.75%

                                                          

    (1) See non-GAAP reconciliations below.
    (2) Quarterly ratios are annualized.
        

    In announcing these results, Chief Executive Officer Tim Laney shared, “I am pleased to announce that our solid fourth quarter results contributed to record full year earnings of $142.0 million or $3.72 per share with a return on average tangible common equity of 18.23%. After adjusting for acquisition expenses, we grew pre-provision net revenues by 32.4% year over year. Our teams delivered 6.6% organic loan growth while adhering to our disciplined concentration limits and underwriting standards. Our credit quality remains strong with just two basis points of net charge-offs for the year.”

    Mr. Laney added, “We continue to adhere to sound banking principles, which consistently produce solid results. We delivered strong deposit and capital growth during 2023, growing average total deposits by 18.7% and tangible book value by 10.4%. We enter 2024 from a position of strength, with a strong balance sheet, solid capital position and diversified funding sources. We will prudently navigate any economic environment, and we are well positioned to continue to serve our clients and communities in 2024.”

    Fourth Quarter 2023 Results
    (All comparisons refer to the third quarter of 2023, except as noted)

    Net income totaled $33.1 million or $0.87 per diluted share, compared to $36.1 million or $0.94 per diluted share. Fully taxable equivalent pre-provision net revenue totaled $45.1 million, compared to $48.1 million. The return on average tangible assets totaled 1.44%, compared to 1.58%, and the return on average tangible common equity totaled 16.56%, compared to 18.38%.

    Net Interest Income
    Fully taxable equivalent net interest income increased $1.8 million to $91.2 million. The increase in loan interest income, which included accelerated loan fee income of $2.9 million, outpaced an increase in the cost of funds during the quarter. The fully taxable equivalent net interest margin widened three basis points to 3.95%, and average earning assets increased $108.1 million driven by $182.5 million of average originated loan growth. The cost of funds totaled 2.10%, compared to 1.80% during the third quarter.

    Loans
    Total loans increased $220.3 million or 11.7% annualized to $7.7 billion at December 31, 2023. We generated quarterly loan fundings totaling $460.4 million, led by commercial loan fundings of $301.9 million. The average interest rate on the fourth quarter’s loan originations totaled 8.6%, consistent with the third quarter.

    Asset Quality and Provision for Credit Losses
    The Company recorded $4.6 million of provision expense for credit losses, compared to $1.1 million in the prior quarter. The current quarter’s provision expense was primarily driven by loan growth and a specific reserve on one non-performing loan. Annualized net charge-offs totaled 0.02% of average total loans, compared to 0.01% in the prior quarter. Non-performing loans improved seven basis points to 0.37% of total loans, and non-performing assets improved seven basis points to 0.42% of total loans and OREO. The allowance for credit losses as a percentage of loans increased two basis points to 1.27% at December 31, 2023.

    Deposits
    We maintain a granular and well diversified deposit base with no exposure to venture capital or crypto deposits. Average total deposits increased $47.0 million, or 2.3% annualized, to $8.1 billion during the fourth quarter 2023. The loan to deposit ratio totaled 94.0% at December 31, 2023. Average transaction deposits (defined as total deposits less time deposits) increased $53.2 million to $7.1 billion. The mix of transaction deposits to total deposits was 88.0% and 87.8% at December 31, 2023 and September 30, 2023, respectively.

    Non-Interest Income
    Non-interest income decreased $3.3 million to $16.1 million during the fourth quarter, largely driven by $2.7 million lower mortgage banking income. Included in the third quarter’s mortgage banking income was a $1.1 million gain from the sale of mortgage servicing rights. Service charges and bank card fees remained consistent with the prior quarter.

    Non-Interest Expense
    Non-interest expense increased $1.5 million to $62.1 million during the fourth quarter. Occupancy and equipment increased $1.0 million partially driven by a $0.3 million impairment on equipment. Other non-interest expense increased $1.4 million due to various items including $0.7 million of one-time asset write-downs. The efficiency ratio totaled 58.8% for the fourth quarter, compared to 56.6% for the third quarter. The fully taxable equivalent efficiency ratio totaled 56.0% for the fourth quarter compared to 53.9%, excluding other intangible assets amortization.

    Income tax expense totaled $5.8 million, compared to $9.3 million in the prior quarter. The decrease in income tax expense during the quarter was largely due to $2.0 million of research and development tax credits recognized in the fourth quarter. The effective tax rate was 14.9%, compared to 20.5% for the third quarter.

    Capital
    Capital ratios continue to be strong and in excess of federal bank regulatory agency “well capitalized” thresholds. The Tier 1 leverage ratio totaled 9.74% at December 31, 2023, and the common equity tier 1 capital ratio totaled 11.89% at December 31, 2023. Shareholders’ equity totaled $1.2 billion at December 31, 2023, increasing $49.2 million, largely due to $22.9 million of higher retained earnings and a $24.5 million decrease in accumulated other comprehensive loss.

    Common book value per share increased $1.27 to $32.10 at December 31, 2023. Tangible common book value per share increased $1.34 to $22.77 driven by the quarter’s earnings and a $0.65 improvement in accumulated other comprehensive loss.

    Year-Over-Year Review
    (All comparisons refer to the full year 2022, except as noted)

    Net income increased $70.8 million or 99.3% to a record $142.0 million, or $3.72 per diluted share, compared to net income of $71.3 million, or $2.18 per diluted share in the prior year. The increase over prior year was driven by higher net interest income from our organic balance sheet growth, revenues from strategic acquisition growth, and a benefit to our net interest income from increases in the Federal Reserve Bank’s interest rates. Fully taxable equivalent pre-provision net revenue increased $61.6 million, or 47.9%, to $190.0 million. The return on average tangible assets increased 62 basis points to 1.57%, and the return on average tangible common equity increased 832 basis points to 18.23%.

    Prior year included $36.8 million of non-recurring acquisition-related expenses from our 2022 acquisitions. Adjusting for these expenses in the prior year, 2023 net income increased $42.5 million or 42.7%, and fully taxable equivalent pre-provision net revenue increased $46.5 million, or 32.4%. The adjusted return on average tangible assets increased 25 basis points to 1.57%, and the adjusted return on average tangible common equity increased 448 basis points to 18.23% for 2023.

    Fully taxable equivalent net interest income totaled $368.1 million, an increase of $95.7 million or 35.1%. Average earning assets increased $1.7 billion, or 23.5%, including average originated loan growth of $971.6 million and average acquired loan growth of $1.1 billion. The fully taxable equivalent net interest margin widened 35 basis points to 4.08%, benefitting from a 159 basis point increase in earning asset yields to 5.56%. Average interest bearing liabilities increased $1.6 billion to $5.8 billion at December 31, 2023, and the cost of funds totaled 1.58%, compared to 0.26% in the prior year.

    Loans outstanding totaled $7.7 billion increasing $478.3 million, or 6.6%, from organic loan growth. New loan fundings in 2023 totaled $1.5 billion, led by commercial loan fundings of $0.9 billion.  

    The Company recorded $8.3 million of provision expense for credit losses during 2023, compared to provision expense of $36.7 million in the prior year. The current year’s provision expense was driven by loan growth and higher reserve requirements. Provision expense for 2022 included $21.7 million of Day 1 reserve requirements for our 2022 acquisitions. Annualized net charge-offs decreased one basis point to 0.02% of average total loans during 2023. Non-performing loans to total loans was 0.37%, compared to 0.23% in the prior year, and non-performing assets to total loans and OREO was 0.42% at December 31, 2023, compared to 0.28%. The allowance for credit losses increased three basis points to 1.27% at December 31, 2023.

    Average total deposits increased $1.3 billion or 18.7% to $8.0 billion, primarily due to higher deposit balances driven by the strategic growth from our recent acquisitions. Average transaction deposits increased $1.1 billion or 18.8%, and average non-interest bearing demand deposits increased $8.0 million. The mix of transaction deposits to total deposits was 88.0%, compared to 88.9% at December 31, 2022, and the mix of non-interest bearing demand deposits to total deposits was 28.8%, compared to 39.8% at December 31, 2022.

    Non-interest income totaled $63.9 million, a decrease of $3.4 million, largely driven by $10.1 million of lower mortgage banking income due to lower purchase and refinance activity, as well as competition driving tighter gain on sale margins. Service charges and bank card fees increased a combined $3.2 million compared to prior year. Included in non-interest income was $1.5 million higher trust income, $1.3 million higher gains on SBA loan sales, $0.9 million higher fair value adjustments on company-owned life insurance, as well as the addition of Cambr income in 2023. Included in 2023 were $4.0 million in net impairments related to venture capital investments classified as non-marketable securities.

    Non-interest expense totaled $242.0 million, an increase of $30.7 million, or 14.6%, primarily due to an increase in core operating expenses driven by our 2022 acquisitions. Included in other non-interest expense is $4.9 million higher FDIC deposit insurance expense as a result of our 2022 acquisitions and an increase in the FDIC assessment rate effective January 2023. Included in 2022 were non-recurring acquisition-related expenses of $15.1 million related to our 2022 acquisitions.

    Income tax expense totaled $33.6 million, an increase of $18.6 million from last year, driven by higher pre-tax income. The effective tax rate was 19.1% for 2023, compared to 17.3% in the prior year.

    Conference Call
    Management will host a conference call to review the results at 11:00 a.m. Eastern Time on Wednesday, January 24, 2024. Interested parties may listen to this call by dialing (888) 394-8218 using the participant passcode of 6606926 and asking for the NBHC Q4 2023 Earnings Call. The earnings release and a link to the replay of the call will 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 subsidiaries, NBH Bank and Bank of Jackson Hole Trust, National Bank Holdings Corporation operates a network of over 90 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, Utah, Wyoming, Texas, New Mexico and Idaho. Its comprehensive residential mortgage banking group primarily serves the bank’s core footprint. Its trust and wealth management business is operated in its core footprint under the Bank of Jackson Hole Trust charter. 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; in Texas, Utah, New Mexico and Idaho, Hillcrest Bank and Hillcrest Bank Mortgage; and in Wyoming, Bank of Jackson Hole and Bank of Jackson Hole 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, bankofjacksonhole.com, or nbhbank.com, 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,” “non-interest expense adjusted for other intangible assets amortization and acquisition-related expenses,” “non-interest expense adjusted for acquisition-related expenses,” “efficiency ratio adjusted for other intangible assets amortization and acquisition-related expenses,” “adjusted net income,” “adjusted earnings per share – diluted,” “net income adjusted for the impact of other intangible assets amortization expense and acquisition-related expenses, after tax,” “net income excluding the impact of other intangible assets amortization expense, after tax,” “adjusted return on average tangible assets,” “adjusted return on average tangible common equity,” “pre-provision net revenue,” “pre-provision net revenue adjusted for acquisition-related expenses,” 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: difficulties in integrating the NBHC, Community Bancorporation, Bancshares of Jackson Hole Incorporated, or Cambr Solutions, LLC businesses or fully realizing cost savings and other benefits; business disruption following the mergers; ability to execute our business strategy (including our digital 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 positions; 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 our bank subsidiaries; 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; 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 years ended
     December 31,     September 30,     December 31,     December 31,     December 31, 
     2023 2023 2022 2023 2022
    Total interest and dividend income$ 134,703 $126,110 $103,958 $ 495,415 $284,688
    Total interest expense  45,202  38,333  8,892   133,464  17,853
    Net interest income  89,501  87,777  95,066   361,951  266,835
    Taxable equivalent adjustment  1,667  1,575  1,454   6,099  5,512
    Net interest income FTE(1)  91,168  89,352  96,520   368,050  272,347
    Provision expense for credit losses  4,570  1,125  21,869   8,295  36,729
    Net interest income after provision for credit losses FTE(1)  86,598  88,227  74,651   359,755  235,618
    Non-interest income:              
    Service charges  4,831  4,849  4,365   18,225  16,357
    Bank card fees  4,915  4,993  4,954   19,636  18,299
    Mortgage banking income  2,020  4,688  2,686   13,634  23,774
    Other non-interest income  4,298  4,835  2,133   12,422  8,882
    Total non-interest income  16,064  19,365  14,138   63,917  67,312
    Non-interest expense:              
    Salaries and benefits  34,470  35,027  36,319   137,701  124,971
    Occupancy and equipment  10,186  9,167  10,409   37,552  31,496
    Professional fees  2,513  2,215  6,308   10,464  14,418
    Data processing  2,853  3,546  4,924   13,110  12,657
    Other non-interest expense  10,065  8,640  8,339   35,758  25,354
    Other intangible assets amortization  2,008  2,008  1,363   7,386  2,338
    Total non-interest expense  62,095  60,603  67,662   241,971  211,234
                   
    Income before income taxes FTE(1)  40,567  46,989  21,127   181,701  91,696
    Taxable equivalent adjustment  1,667  1,575  1,454   6,099  5,512
    Income before income taxes  38,900  45,414  19,673   175,602  86,184
    Income tax expense  5,779  9,327  2,952   33,554  14,910
    Net income$ 33,121 $36,087 $16,721 $ 142,048 $71,274
    Earnings per share - basic$ 0.87 $0.95 $0.44 $ 3.74 $2.20
    Earnings per share - diluted  0.87  0.94  0.44   3.72  2.18

                                                          

    (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)

             
     December 31, 2023 September 30, 2023    December 31, 2022
    ASSETS        
    Cash and cash equivalents$ 190,826  $291,291  $195,505 
    Investment securities available-for-sale  628,829   620,445   706,289 
    Investment securities held-to-maturity  585,052   600,501   651,527 
    Non-marketable securities  90,477   87,817   89,049 
    Loans  7,698,758   7,478,438   7,220,469 
    Allowance for credit losses  (97,947)  (93,446)  (89,553)
    Loans, net  7,600,811   7,384,992   7,130,916 
    Loans held for sale  18,854   19,048   22,767 
    Other real estate owned  4,088   3,416   3,731 
    Premises and equipment, net  162,733   153,553   136,111 
    Goodwill  306,043   306,043   279,132 
    Intangible assets, net  66,025   68,283   59,887 
    Other assets  297,326   330,894   298,329 
    Total assets$ 9,951,064  $9,866,283  $9,573,243 
    LIABILITIES AND SHAREHOLDERS' EQUITY        
    Liabilities:        
    Non-interest bearing demand deposits$ 2,361,367  $2,483,174  $3,134,716 
    Interest bearing demand deposits  1,480,042   1,358,445   913,852 
    Savings and money market  3,367,012   3,314,895   2,950,658 
    Total transaction deposits  7,208,421   7,156,514   6,999,226 
    Time deposits  981,970   992,494   873,400 
    Total deposits  8,190,391   8,149,008   7,872,626 
    Securities sold under agreements to repurchase  19,627   20,273   20,214 
    Long-term debt  54,200   54,123   53,890 
    Federal Home Loan Bank advances  340,000   316,770   385,000 
    Other liabilities  134,039   162,524   149,311 
    Total liabilities  8,738,257   8,702,698   8,481,041 
    Shareholders' equity:        
    Common stock  515   515   515 
    Additional paid in capital  1,162,269   1,160,706   1,159,508 
    Retained earnings  433,126   410,243   330,721 
    Treasury stock  (306,702)  (307,026)  (310,338)
    Accumulated other comprehensive loss, net of tax  (76,401)  (100,853)  (88,204)
    Total shareholders' equity  1,212,807   1,163,585   1,092,202 
    Total liabilities and shareholders' equity$ 9,951,064  $9,866,283  $9,573,243 
    SHARE DATA        
    Average basic shares outstanding  38,013,791   37,990,659   37,762,853 
    Average diluted shares outstanding  38,162,538   38,134,338   38,100,155 
    Ending shares outstanding  37,784,851   37,739,776   37,608,519 
    Common book value per share$ 32.10  $30.83  $29.04 
    Tangible common book value per share(1) (non-GAAP)  22.77   21.43   20.63 
    Tangible common book value per share, excluding accumulated other comprehensive income(1) (non-GAAP)  24.79   24.10   22.98 
    CAPITAL RATIOS        
    Average equity to average assets 11.97%  11.93%  11.47%
    Tangible common equity to tangible assets(1) 8.96%  8.50%  8.38%
    Tier 1 leverage ratio 9.74%  9.56%  9.29%
    Common equity tier 1 risk-based capital ratio 11.89%  11.61%  10.54%
    Tier 1 risk-based capital ratio 11.89%  11.61%  10.54%
    Total risk-based capital ratio 13.80%  13.49%  12.29%

                                                          

    (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

                 
         December 31, 2023   December 31, 2023
         vs. September 30, 2023   vs. December 31, 2022
     December 31, 2023 September 30, 2023 % Change December 31, 2022 % Change
    Originated:            
    Commercial:            
    Commercial and industrial$ 1,825,425 $1,784,188 2.3% $1,841,313 (0.9)%
    Municipal and non-profit  1,083,457  1,012,967 7.0%  959,305 12.9%
    Owner-occupied commercial real estate  879,686  827,679 6.3%  656,361 34.0%
    Food and agribusiness  265,902  258,609 2.8%  284,714 (6.6)%
    Total commercial  4,054,470  3,883,443 4.4%  3,741,693 8.4%
    Commercial real estate non-owner occupied  1,071,529  1,026,133 4.4%  841,657 27.3%
    Residential real estate  919,139  897,804 2.4%  827,030 11.1%
    Consumer  16,686  16,700 (0.1)%  16,986 (1.8)%
    Total originated  6,061,824  5,824,080 4.1%  5,427,366 11.7%
                 
    Acquired:            
    Commercial:            
    Commercial and industrial  141,484  156,012 (9.3)%  183,522 (22.9)%
    Municipal and non-profit  299  305 (2.0)%  321 (6.9)%
    Owner-occupied commercial real estate  244,087  247,701 (1.5)%  256,979 (5.0)%
    Food and agribusiness  58,695  61,551 (4.6)%  69,265 (15.3)%
    Total commercial  444,565  465,569 (4.5)%  510,087 (12.8)%
    Commercial real estate non-owner occupied  785,221  787,926 (0.3)%  854,393 (8.1)%
    Residential real estate  404,648  398,187 1.6%  424,251 (4.6)%
    Consumer  2,500  2,676 (6.6)%  4,372 (42.8)%
    Total acquired  1,636,934  1,654,358 (1.1)%  1,793,103 (8.7)%
    Total loans$ 7,698,758 $7,478,438 2.9% $7,220,469 6.6%
     


    Loan Fundings(1)

     Fourth quarter Third quarter Second quarter First quarter Fourth quarter
     2023 2023 2023 2023 2022
    Commercial:              
    Commercial and industrial$ 135,954 $89,297 $111,717 $107,013  $177,693
    Municipal and non-profit  79,650  18,657  39,331  22,526   20,393
    Owner occupied commercial real estate  75,631  67,322  62,649  33,912   40,912
    Food and agribusiness  10,646  16,191  6,017  (6,564)  28,518
    Total commercial  301,881  191,467  219,714  156,887   267,516
    Commercial real estate non-owner occupied  107,738  88,434  99,984  185,875   133,271
    Residential real estate  48,925  42,514  40,814  49,406   95,067
    Consumer  1,849  1,689  1,777  1,717   1,396
    Total$ 460,393 $324,104 $362,289 $393,885  $497,250

                                                          

    (1)    Loan fundings are defined as closed end funded loans and net fundings under revolving lines of credit. Net fundings (paydowns) under revolving lines of credit were $16,954, ($12,877), $13,766, ($7,096) and $96,903 for the periods noted in the table above, 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
      December 31, 2023 September 30, 2023 December 31, 2022
      Average          Average    Average          Average    Average          Average
      balance Interest rate balance Interest rate balance Interest rate
    Interest earning assets:                           
    Originated loans FTE(1)(2) $ 5,985,610  $ 102,504  6.79% $5,803,157  $92,813  6.35% $5,269,227  $70,536  5.31%
    Acquired loans   1,646,696    25,407  6.12%  1,671,595   26,115  6.20%  1,790,476   26,508  5.87%
    Loans held for sale   16,599    321  7.67%  22,154   383  6.86%  24,381   375  6.10%
    Investment securities available-for-sale   739,471    3,715  2.01%  761,892   3,783  1.99%  841,762   4,187  1.99%
    Investment securities held-to-maturity   594,149    2,596  1.75%  611,712   2,685  1.76%  661,992   2,818  1.70%
    Other securities   40,355    741  7.34%  39,115   701  7.17%  26,203   402  6.14%
    Interest earning deposits   125,097    1,086  3.44%  130,239   1,205  3.67%  115,441   586  2.01%
    Total interest earning assets FTE(2) $ 9,147,977  $ 136,370  5.91% $9,039,864  $127,685  5.60% $8,729,482  $105,412  4.79%
    Cash and due from banks $ 105,323        $104,308        $126,107       
    Other assets   730,220         737,568         673,679       
    Allowance for credit losses   (94,466)        (92,831)        (85,638)      
    Total assets $ 9,889,054        $9,788,909        $9,443,630       
    Interest bearing liabilities:                           
    Interest bearing demand, savings and money market deposits $ 4,751,563  $ 32,887  2.75% $4,535,183  $27,211  2.38% $3,946,573  $4,587  0.46%
    Time deposits   986,513    6,876  2.77%  992,755   6,212  2.48%  892,122   2,048  0.91%
    Securities sold under agreements to repurchase   17,812    5  0.11%  19,288   6  0.12%  18,515   23  0.49%
    Long-term debt   54,151    518  3.80%  54,074   519  3.81%  53,530   539  3.99%
    Federal Home Loan Bank advances   348,775    4,916  5.59%  316,723   4,385  5.49%  162,146   1,695  4.15%
    Total interest bearing liabilities $ 6,158,814  $ 45,202  2.91% $5,918,023  $38,333  2.57% $5,072,886  $8,892  0.70%
    Demand deposits $ 2,390,457        $2,553,619        $3,142,296       
    Other liabilities   155,619         149,068         145,608       
    Total liabilities   8,704,890         8,620,710         8,360,790       
    Shareholders' equity   1,184,164         1,168,199         1,082,840       
    Total liabilities and shareholders' equity $ 9,889,054        $9,788,909        $9,443,630       
    Net interest income FTE(2)    $ 91,168       $89,352       $96,520   
    Interest rate spread FTE(2)        3.00%        3.03%        4.09%
    Net interest earning assets $ 2,989,163        $3,121,841        $3,656,596       
    Net interest margin FTE(2)        3.95%        3.92%        4.39%
    Average transaction deposits $ 7,142,020        $7,088,802        $7,088,869       
    Average total deposits   8,128,533         8,081,557         7,980,991       
    Ratio of average interest earning assets to average interest bearing liabilities  148.53%        152.75%        172.08%      

                                                          

    (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 $1,667, $1,575 and $1,454 for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively.


    NATIONAL BANK HOLDINGS CORPORATION
    Summary of Net Interest Margin
    (Dollars in thousands)

                    
     For the year ended December 31, 2023 For the year ended December 31, 2022
     Average         Average Average         Average
     balance Interest rate balance Interest rate
    Interest earning assets:               
    Originated loans FTE(1)(2)$ 5,739,310  $ 361,032 6.29% $4,767,713  $218,561 4.58%
    Acquired loans  1,700,419    104,933 6.17%  594,222   40,060 6.74%
    Loans held for sale  21,756    1,510 6.94%  58,788   2,563 4.36%
    Investment securities available-for-sale  774,337    15,370 1.98%  839,872   15,091 1.80%
    Investment securities held-to-maturity  620,595    10,960 1.77%  604,423   9,109 1.51%
    Other securities  44,936    3,254 7.24%  17,598   1,034 5.88%
    Interest earning deposits  121,758    4,455 3.66%  426,137   3,782 0.89%
    Total interest earning assets FTE(2)$ 9,023,111  $ 501,514 5.56% $7,308,753  $290,200 3.97%
    Cash and due from banks$ 109,496       $90,657      
    Other assets  725,797        490,206      
    Allowance for credit losses  (91,956)       (59,824)     
    Total assets$ 9,766,448       $7,829,792      
    Interest bearing liabilities:               
    Interest bearing demand, savings and money market deposits$ 4,337,231  $ 87,957 2.03% $3,235,834  $9,347 0.29%
    Time deposits  970,983    21,421 2.21%  826,293   5,249 0.64%
    Securities sold under agreements to repurchase  19,346    22 0.11%  21,298   43 0.20%
    Long-term debt  54,036    2,073 3.84%  43,048   1,519 3.53%
    Federal Home Loan Bank advances  423,783    21,991 5.19%  40,870   1,695 4.15%
    Total interest bearing liabilities$ 5,805,379  $ 133,464 2.30% $4,167,343  $17,853 0.43%
    Demand deposits$ 2,660,525       $2,652,561      
    Other liabilities  144,767        105,507      
    Total liabilities  8,610,671        6,925,411      
    Shareholders' equity  1,155,777        904,381      
    Total liabilities and shareholders' equity$ 9,766,448       $7,829,792      
    Net interest income FTE(2)   $ 368,050      $272,347  
    Interest rate spread FTE(2)      3.26%       3.54%
    Net interest earning assets$ 3,217,732       $3,141,410      
    Net interest margin FTE(2)      4.08%       3.73%
    Average transaction deposits$ 6,997,756       $5,888,395      
    Average total deposits  7,968,739        6,714,688      
    Ratio of average interest earning assets to average interest bearing liabilities 155.43%       175.38%     

                                                          

    (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 $6,099 and $5,512 for the years ended December 31, 2023 and December 31, 2022, 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
     December 31, 2023 September 30, 2023 December 31, 2022
    Beginning allowance for credit losses$ 93,446  $92,581  $65,623 
    Day 1 CECL provision expense       16,027 
    PCD allowance for credit loss at acquisition       3,764 
    Charge-offs  (357)  (540)  (849)
    Recoveries  58   280   129 
    Provision expense for credit losses  4,800   1,125   4,859 
    Ending allowance for credit losses ("ACL")$ 97,947  $93,446  $89,553 
    Ratio of annualized net charge-offs to average total loans during the period 0.02%  0.01%  0.04%
    Ratio of ACL to total loans outstanding at period end 1.27%  1.25%  1.24%
    Ratio of ACL to total non-performing loans at period end 346.99%  281.36%  542.35%
    Total loans$ 7,698,758  $7,478,438  $7,220,469 
    Average total loans during the period  7,594,725   7,443,869   7,029,021 
    Total non-performing loans  28,228   33,212   16,512 
                


    Past Due and Non-accrual Loans

             
     December 31, 2023 September 30, 2023 December 31, 2022
    Loans 30-89 days past due and still accruing interest$ 12,232  $8,144  $2,986 
    Loans 90 days past due and still accruing interest  591   154   95 
    Non-accrual loans  28,228   33,212   16,512 
    Total past due and non-accrual loans$ 41,051  $41,510  $19,593 
    Total 90 days past due and still accruing interest and non-accrual loans to total loans 0.37%  0.45%  0.23%
                


    Asset Quality Data

             
     December 31, 2023 September 30, 2023 December 31, 2022
    Non-performing loans$ 28,228  $33,212  $16,512 
    OREO  4,088   3,416   3,731 
    Total non-performing assets$ 32,316  $36,628  $20,243 
    Accruing modified loans$ 15,148  $6,059  $4,654 
    Total non-performing loans to total loans 0.37%  0.44%  0.23%
    Total non-performing assets to total loans and OREO 0.42%  0.49%  0.28%
                


    NATIONAL BANK HOLDINGS CORPORATION
    Key Metrics(1)

                   
     As of and for the three months ended  As of and for the years ended
     December 31,  September 30,  December 31,  December 31,  December 31, 
     2023 2023 2022 2023 2022
    Return on average assets 1.33%  1.46%  0.70%  1.45%  0.91%
    Return on average tangible assets(2) 1.44%  1.58%  0.77%  1.57%  0.95%
    Return on average tangible assets, adjusted(2) 1.44%  1.58%  1.55%  1.57%  1.32%
    Return on average equity 11.10%  12.26%  6.13%  12.29%  7.88%
    Return on average tangible common equity(2) 16.56%  18.38%  9.17%  18.23%  9.91%
    Return on average tangible common equity, adjusted(2) 16.56%  18.38%  18.37%  18.23%  13.75%
    Loan to deposit ratio (end of period) 94.00%  91.77%  91.72%  94.00%  91.72%
    Non-interest bearing deposits to total deposits (end of period) 28.83%  30.47%  39.82%  28.83%  39.82%
    Net interest margin(3) 3.88%  3.85%  4.32%  4.01%  3.65%
    Net interest margin FTE(2)(3) 3.95%  3.92%  4.39%  4.08%  3.73%
    Interest rate spread FTE(2)(4) 3.00%  3.03%  4.09%  3.26%  3.54%
    Yield on earning assets(5) 5.84%  5.53%  4.72%  5.49%  3.90%
    Yield on earning assets FTE(2)(5) 5.91%  5.60%  4.79%  5.56%  3.97%
    Cost of interest bearing liabilities 2.91%  2.57%  0.70%  2.30%  0.43%
    Cost of deposits 1.94%  1.64%  0.33%  1.37%  0.22%
    Non-interest income to total revenue FTE(2) 14.98%  17.81%  12.78%  14.80%  19.82%
    Non-interest expense to average assets 2.49%  2.46%  2.84%  2.48%  2.70%
    Efficiency ratio 58.82%  56.56%  61.96%  56.82%  63.22%
    Efficiency ratio excluding other intangible assets amortization FTE(2) 56.03%  53.90%  53.76%  54.31%  57.07%
    Pre-provision net revenue$ 43,470  $46,539  $41,542  $ 183,897  $122,913 
    Pre-provision net revenue FTE(2)  45,137   48,114   42,996    189,996   128,425 
    Pre-provision net revenue FTE, adjusted(2)  45,137   48,114   49,807    189,996   143,492 
                   
    Total Loans Asset Quality Data(6)(7)(8)              
    Non-performing loans to total loans 0.37%  0.44%  0.23%  0.37%  0.23%
    Non-performing assets to total loans and OREO 0.42%  0.49%  0.28%  0.42%  0.28%
    Allowance for credit losses to total loans 1.27%  1.25%  1.24%  1.27%  1.24%
    Allowance for credit losses to non-performing loans 346.99%  281.36%  542.35%  346.99%  542.35%
    Net charge-offs to average loans 0.02%  0.01%  0.04%  0.02%  0.03%

                                                          

    (1)    Quarterly 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 modified 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

              
      December 31, 2023 September 30, 2023    December 31, 2022
    Total shareholders' equity $ 1,212,807  $1,163,585  $1,092,202 
    Less: goodwill and other intangible assets, net   (364,716)  (366,724)  (327,191)
    Add: deferred tax liability related to goodwill   12,208   11,876   10,984 
    Tangible common equity (non-GAAP) $ 860,299  $808,737  $775,995 
              
    Total assets $ 9,951,064  $9,866,283  $9,573,243 
    Less: goodwill and other intangible assets, net   (364,716)  (366,724)  (327,191)
    Add: deferred tax liability related to goodwill   12,208   11,876   10,984 
    Tangible assets (non-GAAP) $ 9,598,556  $9,511,435  $9,257,036 
              
    Tangible common equity to tangible assets calculations:         
    Total shareholders' equity to total assets  12.19%  11.79%  11.41%
    Less: impact of goodwill and other intangible assets, net  (3.23)%  (3.29)%  (3.03)%
    Tangible common equity to tangible assets (non-GAAP)  8.96%  8.50%  8.38%
              
    Tangible common book value per share calculations:         
    Tangible common equity (non-GAAP) $ 860,299  $808,737  $775,995 
    Divided by: ending shares outstanding   37,784,851   37,739,776   37,608,519 
    Tangible common book value per share (non-GAAP) $ 22.77  $21.43  $20.63 
              
    Tangible common book value per share, excluding accumulated other comprehensive loss calculations:         
    Tangible common equity (non-GAAP) $ 860,299  $808,737  $775,995 
    Accumulated other comprehensive loss, net of tax   76,401   100,853   88,204 
    Tangible common book value, excluding accumulated other comprehensive loss, net of tax (non-GAAP)   936,700   909,590   864,199 
    Divided by: ending shares outstanding   37,784,851   37,739,776   37,608,519 
    Tangible common book value per share, excluding accumulated other comprehensive loss, net of tax (non-GAAP) $ 24.79  $24.10  $22.98 


    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 years ended
      December 31,     September 30,     December 31,     December 31,     December 31, 
      2023    2023    2022    2023    2022
    Net income $ 33,121  $36,087  $16,721  $ 142,048  $71,274 
    Add: impact of other intangible assets amortization expense, after tax   1,541   1,541   1,049    5,668   1,799 
    Net income excluding the impact of other intangible assets amortization expense, after tax (non-GAAP) $ 34,662  $37,628  $17,770  $ 147,716  $73,073 
                    
    Net income excluding the impact of other intangible assets amortization expense, after tax $ 34,662  $37,628  $17,770  $ 147,716  $73,073 
    Add: acquisition-related adjustments, after tax (non-GAAP)(1)        17,825      28,303 
    Net income adjusted for the impact of other intangible assets amortization expense and acquisition-related expenses, after tax (non-GAAP)(1)  $ 34,662  $37,628  $35,595  $ 147,716  $101,376 
                    
    Average assets $ 9,889,054  $9,788,909  $9,443,630  $ 9,766,448  $7,829,792 
    Less: average goodwill and other intangible assets, net of deferred tax liability related to goodwill   (353,712)  (356,083)  (314,017)   (345,321)  (166,857)
    Average tangible assets (non-GAAP) $ 9,535,342  $9,432,826  $9,129,613  $ 9,421,127  $7,662,935 
                    
    Average shareholders' equity $ 1,184,164  $1,168,199  $1,082,840  $ 1,155,777  $904,381 
    Less: average goodwill and other intangible assets, net of deferred tax liability related to goodwill   (353,712)  (356,083)  (314,017)   (345,321)  (166,857)
    Average tangible common equity (non-GAAP) $ 830,452  $812,116  $768,823  $ 810,456  $737,524 
                    
    Return on average assets  1.33%  1.46%  0.70%  1.45%  0.91%
    Return on average tangible assets (non-GAAP)  1.44%  1.58%  0.77%  1.57%  0.95%
    Adjusted return on average tangible assets (non-GAAP)  1.44%  1.58%  1.55%  1.57%  1.32%
    Return on average equity  11.10%  12.26%  6.13%  12.29%  7.88%
    Return on average tangible common equity (non-GAAP)  16.56%  18.38%  9.17%  18.23%  9.91%
    Adjusted return on average tangible common equity (non-GAAP)  16.56%  18.38%  18.37%  18.23%  13.75%
                    
    (1) Acquisition-related adjustments:               
    Provision expense adjustments:               
    CECL day 1 provision expense (non-GAAP) $  $  $16,348  $  $21,706 
    Non-interest expense adjustments:               
    Acquisition-related expenses (non-GAAP)        6,811      15,067 
    Acquisition-related adjustments before tax (non-GAAP)        23,159      36,773 
    Tax expense impact        (5,334)     (8,470)
    Acquisition-related adjustments, after tax (non-GAAP) $  $  $17,825  $  $28,303 


    Fully Taxable Equivalent Yield on Earning Assets and Net Interest Margin

                    
      As of and for the three months ended As of and for the years ended
      December 31,  September 30,  December 31,  December 31,  December 31, 
      2023 2023 2022 2023 2022
    Interest income $ 134,703     $126,110     $103,958     $ 495,415  $284,688 
    Add: impact of taxable equivalent adjustment   1,667   1,575   1,454    6,099   5,512 
    Interest income FTE (non-GAAP) $ 136,370  $127,685  $105,412  $ 501,514  $290,200 
                    
    Net interest income $ 89,501  $87,777  $95,066  $ 361,951  $266,835 
    Add: impact of taxable equivalent adjustment   1,667   1,575   1,454    6,099   5,512 
    Net interest income FTE (non-GAAP) $ 91,168  $89,352  $96,520  $ 368,050  $272,347 
                    
    Average earning assets $ 9,147,977  $9,039,864  $8,729,482  $ 9,023,111  $7,308,753 
    Yield on earning assets  5.84%  5.53%  4.72%  5.49%  3.90%
    Yield on earning assets FTE (non-GAAP)  5.91%  5.60%  4.79%  5.56%  3.97%
    Net interest margin  3.88%  3.85%  4.32%  4.01%  3.65%
    Net interest margin FTE (non-GAAP)  3.95%  3.92%  4.39%  4.08%  3.73%
                         


    Efficiency Ratio and Pre-Provision Net Revenue

                    
      As of and for the three months ended As of and for the years ended
         December 31,     September 30,     December 31,     December 31,     December 31, 
         2023     2023    2022    2023     2022
    Net interest income $ 89,501  $87,777  $95,066  $ 361,951  $266,835 
    Add: impact of taxable equivalent adjustment   1,667   1,575   1,454    6,099   5,512 
    Net interest income FTE (non-GAAP) $ 91,168  $89,352  $96,520  $ 368,050  $272,347 
                    
    Non-interest income $ 16,064  $19,365  $14,138  $ 63,917  $67,312 
                    
    Non-interest expense $ 62,095  $60,603  $67,662  $ 241,971  $211,234 
    Less: other intangible assets amortization   (2,008)  (2,008)  (1,363)   (7,386)  (2,338)
    Less: acquisition-related expenses (non-GAAP)        (6,811)     (15,067)
    Non-interest expense adjusted for other intangible assets amortization and acquisition-related expenses (non-GAAP) $ 60,087  $58,595  $59,488  $ 234,585  $193,829 
                    
    Non-interest expense $ 62,095  $60,603  $67,662  $ 241,971  $211,234 
    Less: acquisition-related expenses (non-GAAP)        (6,811)     (15,067)
    Non-interest expense, adjusted for acquisition-related expenses (non-GAAP) $ 62,095  $60,603  $60,851  $ 241,971  $196,167 
                    
    Efficiency ratio  58.82%  56.56%  61.96%  56.82%  63.22%
    Efficiency ratio excluding other intangible assets amortization and acquisition-related expenses FTE (non-GAAP)  56.03%  53.90%  53.76%  54.31%  57.07%
                    
    Pre-provision net revenue (non-GAAP) $ 43,470  $46,539  $41,542  $ 183,897  $122,913 
    Pre-provision net revenue, FTE (non-GAAP)   45,137   48,114   42,996    189,996   128,425 
    Pre-provision net revenue FTE, adjusted for acquisition-related expenses (non-GAAP)   45,137   48,114   49,807    189,996   143,492 
                         


    Adjusted Net Income and Earnings Per Share

                    
      As of and for the three months ended  As of and for the years ended
         December 31,     September 30,     December 31,     December 31,     December 31, 
         2023    2023    2022    2023    2022
    Adjustments to net income:               
    Net income $ 33,121 $36,087 $16,721 $ 142,048 $71,274
    Add: Acquisition-related adjustments, after tax (non-GAAP)      17,825    28,303
    Adjusted net income (non-GAAP) $ 33,121 $36,087 $34,546 $ 142,048 $99,577
                    
    Adjustments to earnings per share:               
    Earnings per share diluted $ 0.87 $0.94 $0.44 $ 3.72 $2.18
    Add: Acquisition-related adjustments, after tax (non-GAAP)      0.47    0.87
    Adjusted earnings per share - diluted (non-GAAP)(1) $ 0.87 $0.94 $0.91 $ 3.72 $3.05

     


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