Exhibit 99.1
National Bank Holdings Corporation Announces Third Quarter 2012 Financial Results
Greenwood Village, Colorado—(BusinessWire) – National Bank Holdings Corporation (NYSE: NBHC) reported a net loss of $7.9 million, or $0.15 per diluted share for the third quarter of 2012. Excluding $10.8 million of after tax costs related to the successful initial public offering (IPO), net income for the third quarter of 2012 was $2.9 million, or $0.06 per diluted share, compared to second quarter 2012 net income of $2.7 million, or $0.05 per share. Tangible book value per share grew in the third quarter of 2012 to $19.30 as compared to $19.29 at June 30, 2012.
“During the third quarter we were pleased to have achieved a key corporate milestone with the successful completion of our IPO by listing on the New York Stock Exchange,” said President and Chief Executive Officer Tim Laney. “I am pleased to report that we increased our loan production for the seventh consecutive quarter, grew our strategic loan balances, grew our non-interest bearing demand deposit balances and banking fee revenues while maintaining our focus on maximizing the returns on the acquired problem loans portfolio and managing expenses.”
Third Quarter 2012 Highlights
| | • | | Grew organic loan production for the seventh consecutive quarter, resulting in growth in our strategic loan portfolio. |
| | • | | Grew average non-interest bearing demand deposit balances 8.5% annualized, leading to growth in average transaction balances. |
| | • | | Lowered the cost of deposits by 10 basis points. |
| | • | | Added $14.8 million to accretable yield for the acquired loans accounted for under ASC 310-30 and took $3.7 million in impairments. |
| | • | | Tangible book value per share of $19.30 before consideration of the excess accretable yield value of $0.56 per share. |
| | • | | Non-performing loans improved to 1.94% of total loans at September 30, 2012 from 2.49% at June 30, 2012. |
| | • | | Approximately $375 million in excess strategic capital (above 10% Tier 1 Leverage), which positions us for future growth opportunities. |
| | • | | Completed the integration of our acquisitions to a single operating platform. |
Third Quarter 2012 Results
(All comparisons refer to the second quarter of 2012, except as noted)
Net Interest Income
Net interest income for the third quarter of 2012 totaled $49.5 million, decreasing $2.4 million or 4.7% from the prior quarter. The decrease was primarily driven by a 3.8% reduction in average earning assets as we successfully exited non-strategic loans and slightly reduced the investment portfolio. In addition, the third quarter net interest margin equaled 3.92% representing a narrowing of 8 basis points from the prior quarter as the continued low interest rate environment provided lower reinvestment yields for the investment portfolio coupled with lower prepayments on acquired non 310-30 loans, thereby decreasing the accelerated recognition of acquisition discounts. The cost of interest bearing liabilities continued its downward trend, declining 10 basis points from the second quarter of 2012.
Loans
Strategic loans grew $39.5 million or 15.0% annualized over the prior quarter to $1.1 billion at September 30, 2012. We increased production across all loan categories and continue to realize success in our residential mortgage promotions as well as the generation of new commercial client relationships. The credit quality of the strategic portfolio continues to be strong with only 0.4% in non-performing loans. Strategic loans include all originated loans in addition to those acquired loans inside our operating markets that meet our credit risk profile. Criteria utilized in the designation of an acquired loan as “strategic” include (a) geography, (b) total relationship with borrower and (c) credit metrics commensurate with our current underwriting standards.
“We continue to build on our focus of strategic loan growth and we now have seven consecutive quarters of increasing loan originations. Our bankers are expanding on existing relationships and cultivating new banking relationships,” said Mr. Laney. “During the third quarter, we increased our originations to $128 million and made progress towards achieving the loan generation potential of our franchise.”
Total loans ended the third quarter, 2012 at $1.9 billion representing a decrease from the prior quarter of $46.3 million or 9.3% annualized. The decrease reflects our strategy of exiting the non-strategic loan portfolio as adversely rated and other non-strategic relationships paid off or paid down. The non-strategic loans totaled $851.5 million at September 30, 2012 and decreased $85.8 million or 36.3% annualized from June 30, 2012.
Deposits
Average transaction deposits (defined as total deposits less time deposits) totaled $2.3 billion and grew 0.7% annualized over the prior quarter. We executed our strategy of building client relationships resulting in average non-interest bearing demand deposits growing 8.5% annualized. Average time deposits totaled $2.1 billion in the third quarter and decreased $235 million as we continued our strategy of only retaining those acquired high rate time deposit clients that were interested in market rate time deposits and developing a banking relationship. At September 30, 2012 the mix of transaction deposits to total deposits improved to 55% from 52% at the end of the prior quarter. We decreased our cost of deposits to 0.59% in the third quarter representing an improvement of 10 basis points from the prior quarter. At September 30, 2012, client deposits and treasury management products (repurchase agreements) comprised 97.8% of total liabilities.
Non-Interest Income
Banking related non-interest income (excludes FDIC related income) totaled $9.4 million for the third quarter, 2012 and increased $0.8 million over the prior quarter. The increase was driven by higher service charges and bank card fees and higher recoveries on loans fully charged off prior to acquisition. Other FDIC loss sharing income totaled $1.5 million in the third quarter and declined $2.6 million versus the prior quarter due to an increase in amounts owed to the FDIC related to gains on the sale of other real estate covered under loss sharing agreements and higher FDIC clawback liability given the favorable actual and anticipated loss experience with the covered assets.
Asset Quality and Provision for Loan Losses
“Our balance sheet continues to have one of the lowest risk profiles in the industry” stated Chief Financial Officer Brian Lilly. “Our risk weighted assets to total assets ratio of 34% is among the lowest in the industry, and our loan portfolio has several risk mitigants including: 80% of our loan portfolio carries acquisition discounts, 37% have the added protection of FDIC loss share and 50% are accounted for in acquired loan pools which requires a quarterly valuation update.”
Loans accounted for under ASC 310-30 (acquired loan pools) totaled $971.0 million at September 30, 2012. We completed our quarterly fair value re-measurement on the acquired loan pools and transferred $14.8 million from non-accretable to accretable yield while recording $3.7 million of impairment through the provision for credit losses thereby increasing the economic value of the acquired loan pools by an additional $11.1 million for the third quarter and $61.7 million on a life-to-date basis at September 30, 2012. The increase in accretable yield will be recognized over the remaining life of these loan pools with the quarter recognizing just $0.8 million of the third quarter increase in accretable yield.
The non 310-30 loans totaled $967 million at September 30, 2012. These loans are primarily comprised of acquired loans not accounted for under the ASC 310-30 acquired loan pool accounting in addition to originated loans. Non-performing loans to non 310-30 loans was 3.9% at quarter end representing an improvement from 5.4% at the end of the prior quarter. Non-accrual loans were relatively stable at 2.3% of non 310-30 loans at September 30, 2012 versus 2.2% at the end of the prior quarter. Accruing troubled debt restructurings improved to 1.6% of ending third quarter non 310-30 loans versus 3.2% as of June 30, 2012. The improvement in the accruing troubled debt restructurings is primarily attributed to payoffs of two large commercial real estate loans. Net annualized charge-offs for the non 310-30 loans were 51 basis points for the third quarter 2012. The allowance for loan losses attributed to the non 310-30 loans was 1.07% as of September 30, 2012 as the provision for loan losses of $1.6 million covered net charge-offs and provided for new loan growth.
Non-Interest Expense
Non-interest expense totaled $60.0 million during the third quarter of 2012, an increase of $14.7 million from the previous quarter. The increase in non-interest expense during the quarter was due to $12.5 million related to the September IPO and $3.4 million higher OREO costs. IPO-related expenses included $7.6 million related to underwriting fees, legal, printing and accounting costs plus $4.9 million in stock-based compensation expense related to the IPO. The Company recorded the $4.9 million of stock-based compensation expense related to grants that had vesting requirements tied to the IPO which is reflected in the salaries and employee benefits expense line item. Under applicable accounting guidance, we previously deferred this expense recognition until the vesting criteria was met. The linked quarter increase in OREO costs was primarily driven by a large recovery received in the second quarter of 2012 of a previously charged off commercial real estate credit. The OREO and problem loan expense will fluctuate quarterly as we work to resolve the acquired problem asset portfolio.
Capital
Total shareholders’ equity increased slightly during the quarter to $1.1 billion at September 30, 2012. The Company’s capital ratios continue to be well in excess of federal bank regulatory agency “well capitalized” thresholds. Tangible book value per share increased to $19.30 at September 30, 2012 from $19.29 at June 30, 2012. The tangible common equity to tangible assets ratio ended September 30, 2012 at 18.54% representing an increase of 87 basis points from the prior quarter. This increase was driven by lower total assets at September 30, 2012.
A common convention in the industry is to add the value of the accretable yield to the tangible book value per share. The value of the September 30, 2012 accretable yield balance on the ASC 310-30 loans of $148.9 million would add $1.73 after-tax to the tangible book value per share. A more conservative methodology that management uses values the excess yield, and then considers the timing of the accreted interest income recognition over time. Under this more conservative methodology, the accretable yield on ASC 310-30 loans plus the accretable yield on the FDIC indemnification asset, net, in excess of a 4.5% yield (an approximate yield on new loan originations), and discounted at 5%, would add $0.56 after-tax to our tangible book value per share as of September 30, 2012.
Conference Call
Management will host a conference call to review the results at 8:00 a.m. Eastern Time on Friday, November 2, 2012. Interested parties may listen to this call by dialing (877) 272-6762 (United States)/ (615) 800-6832 (International) using the Conference ID of 58781861 and ask for the National Bank Holding Corporation Third Quarter Earnings conference call. A telephonic replay of the call will be available beginning approximately two hours after the call’s completion through November 16, 2012, by dialing (855) 859-2056 (United States)/ (404) 537-3406 (International) using the Conference ID of 58781861. The earnings release and an on-line replay of the call will also be available on the Company’s website at www.nationalbankholdings.com by visiting the investor relations area.
About Non-GAAP Financial Measures
Certain of the financial measures and ratios we present, including “tangible assets,” “tangible book value,” “tangible book value per share,” “pre-tax pre-provision net revenue to risk weighted assets,” “adjusted net revenue,” “adjusted non-interest expense,” and “tangible common equity,” are supplemental measures that are not required by, or are not presented in accordance with, accounting principles generally accepted in the United States, or “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. 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.
We believe that these measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however we acknowledge that our non-GAAP financial measures have a number of limitations relative to GAAP financial measures. First, certain non-GAAP financial measures exclude provisions for loan losses and income taxes, and both of these expenses significantly impact our financial statements. Additionally, the items that we exclude in our adjustments are not necessarily consistent with the items that our peers may exclude from their results of operations and key financial measures and therefore may limit the
comparability of similarly named financial measures and ratios. 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 our non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.
About National Bank Holdings Corporation
National Bank Holdings Corporation is a bank holding company created to build a leading community bank franchise delivering high quality customer service and committed to shareholder results. National Bank Holdings Corporation currently operates a network of 101 full-service banking centers, with the majority of those banking centers located in Colorado and the greater Kansas City region. Through the Company’s subsidiary, NBH Bank, N.A. it operates under the following brand names: Bank Midwest in Kansas and Missouri, Community Banks of Colorado in Colorado and California and Hillcrest Bank in Texas.
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 “believes,” “expects,” “may,” “should,” “will,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “targets” or “anticipates” or similar expressions that relate to the Company’s strategy, plans or intentions. Forward-looking statements are statements about future, not past, events and involve certain important risks and uncertainties, any of which could cause the Company’s actual results to differ materially from those expressed in forward-looking statements, including, without limitation, the factors more fully described under the caption “Risk Factors” in the prospectus filed by us with the Securities and Exchange Commission and: (1) changes in business and economic conditions generally and in the financial services industry; (2) changes in the laws, regulations and the regulatory environment; (3) the Company’s ability to identify potential candidates for, consummate, integrate and realize operating efficiencies from, acquisitions of banking franchises on attractive terms, or at all; (4) the Company’s ability to achieve organic loan and deposit growth and the composition of such growth; (5) a weakening of the economy which could materially impact credit quality trends and local real estate values; and (6) increased competition in the financial services industry, nationally, regionally or locally. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made and which reflect management’s estimates, expectations or beliefs as of such time. For a discussion of additional risks and uncertainties that may affect the future results of the Company, please see the Company’s filings with the Securities and Exchange Commission.
Contacts:
Analysts/Investors: Brian Lilly, Chief Financial Officer, (720) 529-3315, blilly@nationalbankholdings.com
Media: Kris Mapes, Executive Assistant, (720) 529-3372, email kmapes@nationalbankholdings.com
NATIONAL BANK HOLDINGS CORPORATION
FINANCIAL SUMMARY
(in thousands, except share and per share data)
| | | | | | | | | | | | | | | | | | | | |
| | | For the three months ended | | | For the nine months ended | |
| | | September 30, | | | June 30, | | | September 30, | | | September 30, | | | September 30, | |
| | | 2012 | | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
Total interest and dividend income | | | 56,042 | | | | 59,845 | | | | 50,567 | | | | 178,777 | | | | 136,220 | |
Total interest expense | | | 6,546 | | | | 7,932 | | | | 9,814 | | | | 24,110 | | | | 30,748 | |
| | | | | | | | | | | | | | | | | | | | |
Net interest income before provision for loan losses | | | 49,496 | | | | 51,913 | | | | 40,753 | | | | 154,667 | | | | 105,472 | |
| | | | | | | | | | | | | | | | | | | | |
Provision for loan losses on 310-30 loans | | | 3,663 | | | | 10,456 | | | | — | | | | 17,398 | | | | 3,238 | |
Provision for loan losses on non-310-30 loans | | | 1,600 | | | | 1,770 | | | | 3,760 | | | | 7,927 | | | | 13,208 | |
| | | | | | | | | | | | | | | | | | | | |
Net interest income after provision for loan losses | | | 44,233 | | | | 39,687 | | | | 36,993 | | | | 129,342 | | | | 89,026 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Non-interest income: | | | | | | | | | | | | | | | | | | | | |
FDIC indemnification asset accretion | | | (2,832 | ) | | | (2,646 | ) | | | (5,976 | ) | | | (9,165 | ) | | | (2,237 | ) |
Other FDIC loss sharing income | | | 1,503 | | | | 4,076 | | | | (250 | ) | | | 9,278 | | | | 2,410 | |
Service charges | | | 4,466 | | | | 4,328 | | | | 4,717 | | | | 13,170 | | | | 12,180 | |
Bank card fees | | | 2,484 | | | | 2,383 | | | | 1,856 | | | | 7,168 | | | | 5,396 | |
Bargain purchase gain | | | — | | | | — | | | | 60,520 | | | | — | | | | 60,520 | |
Gain on sales of mortgages, net | | | 283 | | | | 294 | | | | 356 | | | | 886 | | | | 817 | |
Gain (loss) on sale of securities, net | | | — | | | | — | | | | (813 | ) | | | 674 | | | | (621 | ) |
Gain on recoveries of previously charged-off acquired loans | | | 837 | | | | 257 | | | | 3,423 | | | | 2,627 | | | | 3,470 | |
Other non-interest income | | | 1,322 | | | | 1,357 | | | | 233 | | | | 3,744 | | | | 2,224 | |
| | | | | | | | | | | | | | | | | | | | |
Total non-interest income | | | 8,063 | | | | 10,049 | | | | 64,066 | | | | 28,382 | | | | 84,159 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Non-interest expense: | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 27,182 | | | | 22,631 | | | | 22,098 | | | | 72,226 | | | | 52,115 | |
Occupancy and equipment | | | 5,570 | | | | 4,738 | | | | 4,392 | | | | 14,845 | | | | 9,652 | |
Professional fees | | | 2,669 | | | | 3,272 | | | | 3,101 | | | | 8,612 | | | | 7,372 | |
Other real estate owned expenses | | | 3,468 | | | | 63 | | | | 1,013 | | | | 12,152 | | | | 5,466 | |
Problem loan expenses | | | 2,267 | | | | 2,726 | | | | 341 | | | | 6,704 | | | | 2,366 | |
Intangible asset amortization | | | 1,353 | | | | 1,331 | | | | 1,122 | | | | 4,020 | | | | 3,079 | |
Initial public offering related expenses | | | 7,566 | | | | 87 | | | | 600 | | | | 7,974 | | | | 600 | |
Acquisition related costs | | | — | | | | 15 | | | | 3,819 | | | | 870 | | | | 4,293 | |
Other non-interest expense | | | 9,882 | | | | 10,438 | | | | 10,173 | | | | 30,828 | | | | 24,864 | |
| | | | | | | | | | | | | | | | | | | | |
Total non-interest expense | | | 59,957 | | | | 45,301 | | | | 46,659 | | | | 158,231 | | | | 109,807 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Income (loss) before income taxes | | | (7,661 | ) | | | 4,435 | | | | 54,400 | | | | (507 | ) | | | 63,378 | |
Income tax expense | | | 230 | | | | 1,733 | | | | 20,648 | | | | 3,039 | | | | 23,868 | |
| | | | | | | | | | | | | | | | | | | | |
Net income | | $ | (7,891 | ) | | $ | 2,702 | | | $ | 33,752 | | | $ | (3,546 | ) | | $ | 39,510 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
(Loss) income per share—basic | | $ | (0.15 | ) | | $ | 0.05 | | | $ | 0.65 | | | $ | (0.07 | ) | | $ | 0.76 | |
(Loss) income per share—diluted | | $ | (0.15 | ) | | $ | 0.05 | | | $ | 0.65 | | | $ | (0.07 | ) | | $ | 0.76 | |
1
NATIONAL BANK HOLDINGS CORPORATION
Consolidated Statements of Condition
(Dollars in thousands)
| | | | | | | | | | | | | | | | |
| | | September 30, 2012 | | | June 30, 2012 | | | September 30, 2011 | | | December 31, 2011 | |
ASSETS | | | | | | | | | | | | | | | | |
Cash and due from banks | | $ | 65,452 | | | $ | 74,671 | | | $ | 62,018 | | | $ | 93,862 | |
Due from Federal Reserve Bank of Kansas City | | | 496,893 | | | | 519,625 | | | | 1,056,623 | | | | 1,421,734 | |
Federal funds sold and interest bearing bank deposits | | | 102,354 | | | | 110,290 | | | | 288,026 | | | | 112,541 | |
| | | | | | | | | | | | | | | | |
Cash and cash equivalents | | | 664,699 | | | | 704,586 | | | | 1,406,667 | | | | 1,628,137 | |
| | | | |
Investment securities available-for-sale | | | 1,739,632 | | | | 1,803,843 | | | | 2,011,539 | | | | 1,862,699 | |
Investment securities held-to-maturity | | | 643,661 | | | | 707,110 | | | | — | | | | 6,801 | |
Non-marketable securities | | | 33,046 | | | | 33,076 | | | | 20,267 | | | | 29,117 | |
| | | | |
Loans receivable, net—covered | | | 711,029 | | | | 767,683 | | | | 538,144 | | | | 952,715 | |
Loans receivable, net—non-covered | | | 1,226,770 | | | | 1,216,391 | | | | 1,057,001 | | | | 1,321,336 | |
| | | | | | | | | | | | | | | | |
Total loans, net | | | 1,937,799 | | | | 1,984,074 | | | | 1,595,145 | | | | 2,274,051 | |
Allowance for loan losses | | | (17,496 | ) | | | (17,294 | ) | | | (7,703 | ) | | | (11,527 | ) |
| | | | | | | | | | | | | | | | |
Loans, net | | | 1,920,303 | | | | 1,966,780 | | | | 1,587,442 | | | | 2,262,524 | |
Federal Deposit Insurance Corporation (“FDIC”) indemnification asset, net | | | 113,195 | | | | 148,527 | | | | 73,381 | | | | 223,402 | |
Other real estate owned | | | 129,345 | | | | 137,712 | | | | 94,904 | | | | 120,636 | |
Premises and equipment, net | | | 118,385 | | | | 116,908 | | | | 53,426 | | | | 87,315 | |
Goodwill | | | 59,630 | | | | 59,630 | | | | 52,442 | | | | 59,630 | |
Intangible assets, net | | | 28,901 | | | | 30,255 | | | | 29,385 | | | | 32,923 | |
Other assets | | | 72,029 | | | | 80,648 | | | | 25,400 | | | | 38,842 | |
| | | | | | | | | | | | | | | | |
Total assets | | $ | 5,522,826 | | | $ | 5,789,075 | | | $ | 5,354,853 | | | $ | 6,352,026 | |
| | | | | | | | | | | | | | | | |
| | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Non-interest bearing demand deposits | | $ | 648,808 | | | $ | 633,936 | | | $ | 459,994 | | | $ | 678,735 | |
Interest bearing demand deposits | | | 484,760 | | | | 527,363 | | | | 450,239 | | | | 537,160 | |
Savings and money market | | | 1,202,938 | | | | 1,181,749 | | | | 865,448 | | | | 1,062,562 | |
| | | | | | | | | | | | | | | | |
Total transaction deposits | | | 2,336,506 | | | | 2,343,048 | | | | 1,775,681 | | | | 2,278,457 | |
Time deposits | | | 1,945,218 | | | | 2,186,501 | | | | 2,345,332 | | | | 2,784,596 | |
| | | | | | | | | | | | | | | | |
Total deposits | | | 4,281,724 | | | | 4,529,549 | | | | 4,121,013 | | | | 5,063,053 | |
| | | | |
Securities sold under agreements to repurchase | | | 46,192 | | | | 57,508 | | | | 43,197 | | | | 47,597 | |
Other liabilities | | | 99,075 | | | | 105,277 | | | | 96,085 | | | | 152,647 | |
| | | | | | | | | | | | | | | | |
Total liabilities | | | 4,426,991 | | | | 4,692,334 | | | | 4,260,295 | | | | 5,263,297 | |
| | | | |
Stockholders’ equity: | | | | | | | | | | | | | | | | |
Common Stock, par value $0.01 per share: 400,000,000 shares authorized and 52,191,239 and 52,157,697 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively | | | 522 | | | | 522 | | | | 520 | | | | 522 | |
Additional paid in capital | | | 1,005,627 | | | | 998,963 | | | | 997,109 | | | | 994,705 | |
Retained earnings | | | 42,934 | | | | 50,825 | | | | 44,027 | | | | 46,480 | |
Accumulated other comprehensive income, net of tax | | | 46,752 | | | | 46,431 | | | | 52,902 | | | | 47,022 | |
| | | | | | | | | | | | | | | | |
Total stockholders’ equity | | | 1,095,835 | | | | 1,096,741 | | | | 1,094,558 | | | | 1,088,729 | |
| | | | | | | | | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 5,522,826 | | | $ | 5,789,075 | | | $ | 5,354,853 | | | $ | 6,352,026 | |
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COMMON STOCK DATA | | | | | | | | | | | | | | | | |
Average basic shares outstanding | | | 52,191,239 | | | | 52,191,239 | | | | 51,936,280 | | | | 51,978,744 | |
Average diluted shares outstanding | | | 52,191,239 | | | | 52,319,170 | | | | 52,242,834 | | | | 52,104,021 | |
Ending shares outstanding | | | 52,191,239 | | | | 52,191,239 | | | | 51,936,280 | | | | 52,157,697 | |
Common book value per share | | $ | 21.00 | | | $ | 21.01 | | | $ | 21.08 | | | $ | 20.87 | |
Tangible common book value per share | | $ | 19.30 | | | $ | 19.29 | | | $ | 19.50 | | | $ | 19.10 | |
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CAPITAL RATIOS | | | | | | | | | | | | | | | | |
Book equity to assets | | | 19.84 | % | | | 18.95 | % | | | 20.44 | % | | | 17.14 | % |
Tangible common equity to tangible assets | | | 18.54 | % | | | 17.67 | % | | | 19.21 | % | | | 15.91 | % |
Leverage ratio | | | 17.71 | % | | | 17.02 | % | | | 18.30 | % | | | 15.10 | % |
2
NATIONAL BANK HOLDINGS CORPORATION
Loan Portfolio Update
Strategic/Non-Strategic Period-End Loan Balances:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | September 30, 2012 | | | June 30, 2012 | |
| | | Strategic | | | Non-strategic | | | Total | | | Strategic | | | Non-strategic | | | Total | |
Commercial | | $ | 143,255 | | | $ | 122,972 | | | $ | 266,227 | | | $ | 146,082 | | | $ | 137,682 | | | $ | 283,764 | |
Commercial real estate | | | 287,583 | | | | 625,041 | | | | 912,624 | | | | 289,227 | | | | 676,689 | | | | 965,916 | |
Agriculture | | | 145,295 | | | | 15,961 | | | | 161,256 | | | | 129,827 | | | | 17,216 | | | | 147,043 | |
Residential real estate | | | 463,034 | | | | 77,953 | | | | 540,987 | | | | 433,670 | | | | 91,869 | | | | 525,539 | |
Consumer | | | 47,114 | | | | 9,591 | | | | 56,705 | | | | 47,939 | | | | 13,873 | | | | 61,812 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,086,281 | | | $ | 851,518 | | | $ | 1,937,799 | | | $ | 1,046,745 | | | $ | 937,329 | | | $ | 1,984,074 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Originations: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | Commercial | | | Commercial
real estate | | | Agriculture | | | Residential real
estate | | | Consumer | | | Total | |
First quarter 2011 | | $ | 1,128 | | | $ | 5,194 | | | $ | 3,101 | | | $ | 14,170 | | | $ | 1,223 | | | $ | 24,816 | |
Second quarter 2011 | | | 1,390 | | | | 2,081 | | | | 2,476 | | | | 16,707 | | | | 2,207 | | | | 24,861 | |
Third quarter 2011 | | | 14,226 | | | | 818 | | | | 651 | | | | 16,908 | | | | 2,772 | | | | 35,375 | |
Fourth quarter 2011 | | | 9,955 | | | | 4,062 | | | | 1,575 | | | | 35,745 | | | | 3,083 | | | | 54,420 | |
First quarter 2012 | | | 20,102 | | | | 18,546 | | | | 7,570 | | | | 33,016 | | | | 3,155 | | | | 82,389 | |
Second quarter 2012 | | | 10,799 | | | | 6,816 | | | | 22,444 | | | | 40,123 | | | | 4,057 | | | | 84,239 | |
Third quarter 2012 | | | 25,640 | | | | 11,135 | | | | 24,328 | | | | 60,320 | | | | 6,505 | | | | 127,928 | |
Loss-Share Coverage and Accounting Treatment Period End Loan Balances:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | September 30, 2012 | |
| | | Total covered loans | | | Total non-covered loans | |
| | | 310-30 | | | Non-310-30 | | | Total
covered | | | 310-30 | | | Non-310-30 | | | Total
non-covered | |
Commercial | | $ | 83,469 | | | $ | 57,416 | | | $ | 140,885 | | | $ | 14,195 | | | $ | 111,147 | | | $ | 125,342 | |
Commercial real estate | | | 477,427 | | | | 11,081 | | | | 488,508 | | | | 187,344 | | | | 236,772 | | | | 424,116 | |
Agriculture | | | 44,738 | | | | 14,939 | | | | 59,677 | | | | 11,206 | | | | 90,373 | | | | 101,579 | |
Residential real estate | | | 19,584 | | | | 2,371 | | | | 21,955 | | | | 106,710 | | | | 412,322 | | | | 519,032 | |
Consumer | | | 4 | | | | — | | | | 4 | | | | 26,359 | | | | 30,342 | | | | 56,701 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 625,222 | | | $ | 85,807 | | | $ | 711,029 | | | $ | 345,814 | | | $ | 880,956 | | | $ | 1,226,770 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | June 30, 2012 | |
| | | Total covered loans | | | Total non-covered loans | |
| | | 310-30 | | | Non-310-30 | | | Total
covered | | | 310-30 | | | Non-310-30 | | | Total non-
covered | |
Commercial | | $ | 100,037 | | | $ | 68,386 | | | | 168,423 | | | $ | 17,675 | | | $ | 97,666 | | | | 115,341 | |
Commercial real estate | | | 504,929 | | | | 8,905 | | | | 513,834 | | | | 201,742 | | | | 250,340 | | | | 452,082 | |
Agriculture | | | 46,567 | | | | 16,759 | | | | 63,326 | | | | 12,572 | | | | 71,145 | | | | 83,717 | |
Residential real estate | | | 20,046 | | | | 2,049 | | | | 22,095 | | | | 123,386 | | | | 380,058 | | | | 503,444 | |
Consumer | | | 5 | | | | — | | | | 5 | | | | 33,473 | | | | 28,334 | | | | 61,807 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 671,584 | | | $ | 96,099 | | | $ | 767,683 | | | $ | 388,848 | | | $ | 827,543 | | | $ | 1,216,391 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
3
NATIONAL BANK HOLDINGS CORPORATION
Summary of Net Interest Margin
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended September 30, 2012 | | | Three months ended June 30, 2012 | |
| | | Average
Balance | | | Interest | | | Average
Rate | | | Average
Balance | | | Interest | | | Average
Rate | |
| | | (Dollars in thousands) | | | (Dollars in thousands) | |
Interest earning assets: | | | | | | | | | | | | | | | | | | | | | | | | |
310-30 loans | | $ | 990,661 | | | $ | 24,008 | | | | 9.64 | % | | $ | 1,108,322 | | | $ | 25,694 | | | | 9.32 | % |
Non 310-30 loans | | | 968,652 | | | | 16,097 | | | | 6.61 | % | | | 927,688 | | | | 16,900 | | | | 7.33 | % |
Investment securities available-for-sale | | | 1,747,254 | | | | 9,302 | | | | 2.12 | % | | | 1,759,623 | | | | 10,124 | | | | 2.31 | % |
Investment securities held-to-maturity | | | 683,700 | | | | 5,888 | | | | 3.43 | % | | | 738,196 | | | | 6,330 | | | | 3.45 | % |
Other securities | | | 33,067 | | | | 377 | | | | 4.54 | % | | | 31,943 | | | | 384 | | | | 4.84 | % |
Interest-bearing deposits | | | 595,383 | | | | 370 | | | | 0.25 | % | | | 650,759 | | | | 413 | | | | 0.26 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total interest earning assets | | $ | 5,018,717 | | | $ | 56,042 | | | | 4.44 | % | | $ | 5,216,531 | | | $ | 59,845 | | | | 4.61 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Cash and due from banks | | | 66,467 | | | | | | | | | | | | 70,805 | | | | | | | | | |
Other assets | | | 585,735 | | | | | | | | | | | | 623,648 | | | | | | | | | |
Allowance for loan losses | | | (15,817 | ) | | | | | | | | | | | (11,375 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 5,655,102 | | | | | | | | | | | $ | 5,899,609 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
Savings deposits and interest bearing checking | | $ | 1,696,972 | | | $ | 1,341 | | | | 0.31 | % | | $ | 1,705,916 | | | $ | 1,364 | | | | 0.32 | % |
Time Deposits | | | 2,063,622 | | | | 5,178 | | | | 1.00 | % | | | 2,298,782 | | | | 6,536 | | | | 1.14 | % |
Securities sold under agreements to repurchase | | | 53,073 | | | | 27 | | | | 0.20 | % | | | 62,124 | | | | 32 | | | | 0.21 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total interest bearing liabilities | | $ | 3,813,667 | | | $ | 6,546 | | | | 0.68 | % | | $ | 4,066,822 | | | $ | 7,932 | | | | 0.78 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Non-interest bearing demand deposits | | | 636,277 | | | | | | | | | | | | 622,936 | | | | | | | | | |
Other liabilities | | | 107,415 | | | | | | | | | | | | 115,032 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total liabilities | | | 4,557,359 | | | | | | | | | | | | 4,804,790 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Stockholders’ equity | | | 1,097,743 | | | | | | | | | | | | 1,094,819 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 5,655,102 | | | | | | | | | | | $ | 5,899,609 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income | | | | | | $ | 49,496 | | | | | | | | | | | $ | 51,913 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Interest rate spread | | | | | | | | | | | 3.76 | % | | | | | | | | | | | 3.83 | % |
Net interest earning assets | | $ | 1,205,050 | | | | | | | | | | | $ | 1,149,709 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net interest margin | | | | | | | | | | | 3.92 | % | | | | | | | | | | | 4.00 | % |
Ratio of average interest earning assets to average interest bearing liabilities | | | 131.60 | % | | | | | | | | | | | 128.27 | % | | | | | | | | |
| (1) | Originated loans are net of deferred loan fees, less costs. |
| (2) | Loan fees, less costs on originated loans, are included in interest income. |
4
NATIONAL BANK HOLDINGS CORPORATION
Allowance For Loan Losses Analysis:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | As of and for the three months ended: | |
| | | September 30, 2012 | | | June 30, 2012 | |
| | | 310-30 | | | Non-310-30 | | | Total | | | 310-30 | | | Non-310-30 | | | Total | |
Beginning allowance for loan losses | | $ | 7,259 | | | $ | 10,035 | | | $ | 17,294 | | | $ | 3,327 | | | $ | 9,081 | | | $ | 12,408 | |
Net chargeoffs | | | (3,812 | ) | | | (1,249 | ) | | | (5,061 | ) | | | (6,524 | ) | | | (816 | ) | | | (7,340 | ) |
Provision | | | 3,663 | | | | 1,600 | | | | 5,263 | | | | 10,456 | | | | 1,770 | | | | 12,226 | |
Ending allowance for loan losses | | $ | 7,110 | | | $ | 10,386 | | | $ | 17,496 | | | $ | 7,259 | | | $ | 10,035 | | | $ | 17,294 | |
Annualized net charge-offs to average loans, respectively | | | 1.53 | % | | | 0.51 | % | | | 1.03 | % | | | 2.37 | % | | | 0.35 | % | | | 1.45 | % |
% of net charge-offs covered, respectively | | | 69.02 | % | | | 21.10 | % | | | 57.19 | % | | | 97.23 | % | | | 0.00 | % | | | 86.42 | % |
Ratio of allowance for loan losses to total loans outstanding at period end, respectively | | | 0.72 | % | | | 1.07 | % | | | 0.89 | % | | | 0.65 | % | | | 1.08 | % | | | 0.85 | % |
Ratio of non-performing loans to loans | | | | | | | 3.89 | % | | | 1.94 | % | | | | | | | 5.40 | % | | | 2.51 | % |
Ratio of allowance for loan losses to non-performing loans | | | | | | | 27.62 | % | | | 46.52 | % | | | | | | | 20.13 | % | | | 34.69 | % |
Ratio of allowance for loan losses to non-covered loans outstanding at period end, respectively | | | 2.06 | % | | | 1.18 | % | | | 1.43 | % | | | 1.87 | % | | | 1.21 | % | | | 1.42 | % |
Ratio of allowance for loan losses to non-performing, non- covered loans | | | | | | | 34.52 | % | | | 58.14 | % | | | | | | | 23.85 | % | | | 41.10 | % |
Total loans | | $ | 990,661 | | | $ | 968,652 | | | $ | 1,959,313 | | | $ | 1,108,322 | | | $ | 927,688 | | | $ | 2,036,010 | |
Non-covered loans | | $ | 345,814 | | | $ | 880,956 | | | $ | 1,226,770 | | | $ | 388,848 | | | $ | 827,543 | | | $ | 1,216,391 | |
Total non-performing loans | | $ | — | | | $ | 37,606 | | | $ | 37,606 | | | $ | — | | | $ | 49,846 | | | $ | 49,846 | |
Non-performing, non-covered loans | | $ | — | | | $ | 30,092 | | | $ | 30,092 | | | $ | — | | | $ | 42,077 | | | $ | 42,077 | |
Past Due Loans:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | September 30, 2012 | | | June 30, 2012 | |
| | | 310-30 | | | Non-310-30 | | | Total | | | 310-30 | | | Non-310-30 | | | Total | |
Non-accrual loans | | $ | — | | | $ | 21,976 | | | $ | 21,976 | | | $ | — | | | $ | 19,959 | | | $ | 19,959 | |
Loans 30-89 days past due and still accruing interest | | | 47,772 | | | | 14,018 | | | | 61,790 | | | | 48,860 | | | | 10,926 | | | | 59,786 | |
Loans 90 days past due and still accruing interest | | | 143,953 | | | | 50 | | | | 144,003 | | | | 149,986 | | | | 345 | | | | 150,331 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total past due and non-accrual loans | | $ | 191,725 | | | $ | 36,044 | | | $ | 227,769 | | | $ | 198,846 | | | $ | 31,230 | | | $ | 230,076 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total past due and non-accrual loans to total loans, respectively | | | 19.74 | % | | | 3.73 | % | | | 11.75 | % | | | 41.00 | % | | | 3.38 | % | | | 11.60 | % |
% of total past due and non-accrual loans that carry fair value marks | | | 100.00 | % | | | 55.32 | % | | | 92.93 | % | | | 100.00 | % | | | 49.71 | % | | | 93.17 | % |
% of total past due and non-accrual loans that are covered by FDIC loss sharing agreement | | | 56.21 | % | | | 5.24 | % | | | 61.45 | % | | | 52.14 | % | | | 4.62 | % | | | 56.77 | % |
5
Asset Quality Data (Covered/Non-covered):
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | September 30, 2012 | | | June 30, 2012 | |
| | | Non-covered | | | Covered | | | Total | | | Non-covered | | | Covered | | | Total | |
Total non-accrual loans | | $ | 16,597 | | | $ | 5,379 | | | $ | 21,976 | | | $ | 15,891 | | | $ | 4,068 | | | $ | 19,959 | |
Total accruing loans 90 days past due and still accruing interest | | | 50 | | | | — | | | | 50 | | | | 345 | | | | — | | | | 345 | |
Accruing restructured loans(1) | | | 13,445 | | | | 2,135 | | | | 15,580 | | | | 25,841 | | | | 3,701 | | | | 29,542 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total non-performing loans | | | 30,092 | | | | 7,514 | | | | 37,606 | | | | 42,077 | | | | 7,769 | | | | 49,846 | |
OREO | | | 48,008 | | | | 81,337 | | | | 129,345 | | | | 60,219 | | | | 77,493 | | | | 137,712 | |
Other repossessed assets | | | 801 | | | | 530 | | | | 1,331 | | | | 821 | | | | 514 | | | | 1,335 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total non-performing assets | | $ | 78,901 | | | $ | 89,381 | | | $ | 168,282 | | | $ | 103,117 | | | $ | 85,776 | | | $ | 188,893 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | | | | | | | | | $ | 17,496 | | | | | | | | | | | $ | 17,294 | |
Total non-performing loans to loans, respectively | | | 1.55 | % | | | 0.39 | % | | | 1.94 | % | | | 2.12 | % | | | 0.39 | % | | | 2.51 | % |
Total non-performing assets to total assets | | | | | | | | | | | 3.05 | % | | | | | | | | | | | 3.26 | % |
| (1) | Includes restructured loans less than 90 days past due and still accruing. |
Changes in Accretable Yield
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | For the three months ended | | | For the nine months ended | | | Life-to-date | |
| | | Sept 30, 2012 | | | June 30, 2012 | | | Sept 30, 2011 | | | Sept 30, 2012 | | | Sept 30, 2011 | | | Sept 30, 2012 | |
Accretable yield at beginning of period | | $ | 158,082 | | | $ | 166,468 | | | $ | 75,635 | | | $ | 186,494 | | | $ | 74,329 | | | $ | — | |
Additions through acquisitions | | | — | | | | — | | | | 33,696 | | | | — | | | | 33,696 | | | | 214,994 | |
Reclassification from non-accretable difference to accretable yield | | | 17,491 | | | | 18,830 | | | | — | | | | 46,974 | | | | 25,098 | | | | 92,845 | |
Reclassification to non-accretable difference from accretable yield | | | (2,697 | ) | | | (1,521 | ) | | | — | | | | (8,348 | ) | | | (314 | ) | | | (8,757 | ) |
Accretion | | | (24,008 | ) | | | (25,695 | ) | | | (16,215 | ) | | | (76,252 | ) | | | (39,693 | ) | | | (141,557 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Accretable yield at end of period | | $ | 148,868 | | | $ | 158,082 | | | $ | 93,116 | | | $ | 148,868 | | | $ | 93,116 | | | $ | 148,868 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
6
NATIONAL BANK HOLDINGS CORPORATION
Key Ratios
| | | | | | | | | | | | | | | | | | | | |
Key Ratios (1) | | For the three
months ended
September 30,
2012 | | | For the three
months ended
June 30,
2012 | | | For the three
months ended
September 30,
2011 | | | For the nine
months ended
September 30,
2012 | | | For the nine
months ended
September 30,
2011 | |
Return on average assets | | | -0.56 | % | | | 0.18 | % | | | 2.49 | % | | | -0.08 | % | | | 1.08 | % |
Return on average tangible assets | | | -0.51 | % | | | 0.25 | % | | | 2.58 | % | | | -0.03 | % | | | 1.15 | % |
Adjusted return on average assets (2) (3) | | | 0.28 | % | | | 0.28 | % | | | 0.30 | % | | | 0.26 | % | | | 0.42 | % |
Adjusted return on average tangible assets (2) (3) | | | 0.34 | % | | | 0.34 | % | | | 0.37 | % | | | 0.32 | % | | | 0.48 | % |
Return on average equity | | | -2.86 | % | | | 0.99 | % | | | 12.28 | % | | | -0.43 | % | | | 5.12 | % |
Return on average tangible common equity | | | -2.79 | % | | | 1.42 | % | | | 13.52 | % | | | -0.15 | % | | | 5.81 | % |
Adjusted return on average equity (2) (3) | | | 1.45 | % | | | 1.48 | % | | | 1.49 | % | | | 1.40 | % | | | 1.98 | % |
Adjusted return on average tangible equity (2) (3) | | | 1.91 | % | | | 1.96 | % | | | 1.88 | % | | | 1.86 | % | | | 2.40 | % |
Return on risk weighted assets | | | -1.65 | % | | | 0.55 | % | | | 8.35 | % | | | -0.25 | % | | | 3.29 | % |
Pre-tax, pre-provision net revenue to risk weighted assets (2) | | | -0.50 | % | | | 3.37 | % | | | 14.39 | % | | | 1.74 | % | | | 6.65 | % |
Adjusted pre-tax, pre-provision net revenue to risk weighted assets (2) (3) | | | 2.48 | % | | | 3.81 | % | | | 2.17 | % | | | 3.08 | % | | | 3.28 | % |
Interest-earning assets to interest-bearing liabilities (end of period) (4) | | | 133.44 | % | | | 130.30 | % | | | 132.45 | % | | | 133.44 | % | | | 132.45 | % |
Loans to deposits ratio (end of period) | | | 45.26 | % | | | 43.80 | % | | | 38.71 | % | | | 45.26 | % | | | 38.71 | % |
Non-interest bearing deposits to total deposits (end of period) | | | 15.15 | % | | | 14.00 | % | | | 11.16 | % | | | 15.15 | % | | | 11.16 | % |
Yield on earning assets (4) | | | 4.44 | % | | | 4.61 | % | | | 4.15 | % | | | 4.56 | % | | | 4.16 | % |
Cost of interest bearing liabilities (4) | | | 0.68 | % | | | 0.78 | % | | | 1.04 | % | | | 0.79 | % | | | 1.21 | % |
Interest rate spread (5) | | | 3.76 | % | | | 3.83 | % | | | 3.11 | % | | | 3.77 | % | | | 2.95 | % |
Net interest margin (6) | | | 3.92 | % | | | 4.00 | % | | | 3.35 | % | | | 3.95 | % | | | 3.22 | % |
Non-interest expense to average assets | | | 4.22 | % | | | 3.09 | % | | | 3.45 | % | | | 3.58 | % | | | 3.00 | % |
Adjusted non-interest expense to average assets (2) (3) | | | 3.22 | % | | | 2.94 | % | | | 2.69 | % | | | 3.13 | % | | | 2.46 | % |
Efficiency ratio (7) | | | 101.82 | % | | | 70.96 | % | | | 43.44 | % | | | 84.25 | % | | | 56.28 | % |
Adjusted efficiency ratio (2) (3) | | | 77.09 | % | | | 67.45 | % | | | 78.18 | % | | | 73.72 | % | | | 67.34 | % |
| | | | | |
Asset Quality Data (8) (9) (10) | | | | | | | | | | | | | | | | | | | | |
Non-performing loans to total loans | | | 1.94 | % | | | 2.51 | % | | | 2.49 | % | | | 1.94 | % | | | 2.49 | % |
Covered non-performing loans to total non-performing loans | | | 19.98 | % | | | 15.59 | % | | | 35.89 | % | | | 19.98 | % | | | 35.89 | % |
Non-performing assets to total assets | | | 3.05 | % | | | 3.26 | % | | | 2.53 | % | | | 3.05 | % | | | 2.53 | % |
Covered non-performing assets to total non-performing assets | | | 53.11 | % | | | 45.41 | % | | | 52.88 | % | | | 53.11 | % | | | 52.88 | % |
Allowance for loan losses to total loans | | | 0.90 | % | | | 0.87 | % | | | 0.48 | % | | | 0.90 | % | | | 0.48 | % |
Allowance for loan losses to total non-covered loans | | | 1.43 | % | | | 1.42 | % | | | 0.73 | % | | | 1.43 | % | | | 0.73 | % |
Allowance for loan losses to non-performing loans | | | 46.52 | % | | | 34.69 | % | | | 19.40 | % | | | 46.52 | % | | | 19.40 | % |
Net charge-offs to average loans | | | 1.03 | % | | | 1.45 | % | | | 0.24 | % | | | 1.25 | % | | | 0.77 | % |
| (2) | Ratio represents non-GAAP financial measure. |
| (3) | “Adjusted” calculations exclude bargain purchase gains, initial public offering related expenses, stock based compensation expense (related to the initial public offering and those not related to the initial public offering), acquisition costs, and loss (gain) on sale of investment securities. |
| (4) | Interest earning assets include assets that earn interest/accretion or dividends, except for the FDIC indemnification asset that earns accretion but is not part of interest earning assets. Any market value adjustments on investment securities are excluded from interest-earning assets. Interest bearing liabilities include liabilities that much be paid interest. |
| (5) | Interest rate spread represents the difference between the weighted average yield on interest earning assets and the weighted average costs of interest bearing liabilities. |
| (6) | Net interest margin represents net interest income, including accretion income, as a percentage of average interest-earning assets. |
| (7) | The efficiency ratio represents non-interest expense, less intangible asset amortization, as a percentage of net interest income plus non-interest income. |
| (8) | Non-performing loans consists of non-accruing loans, loans 90 days or more past due and still accruing interest and restructured loans, but exclude any loans accounted for under ASC 310-30 in which the pool is still performing. These ratios may therefore not be comparable to similar ratios of our peers. |
| (9) | Non-performing assets include non-performing loans, OREO and other repossessed assets. |
| (10) | Total loans are net of unearned discounts and fees. |
7
NATIONAL BANK HOLDINGS CORPORATION
Non-GAAP Financial Measures
| | | | | | | | | | | | | | | | |
| | | September 30,
2012 | | | June 30,
2012 | | | September 30,
2011 | | | December 31,
2011 | |
Total stockholders’ equity | | $ | 1,095,835 | | | $ | 1,096,741 | | | $ | 1,094,558 | | | $ | 1,088,729 | |
Less: goodwill | | | (59,630 | ) | | | (59,630 | ) | | | (52,442 | ) | | | (59,630 | ) |
Less: intangibles | | | (28,901 | ) | | | (30,255 | ) | | | (29,385 | ) | | | (32,923 | ) |
| | | | | | | | | | | | | | | | |
Tangible common equity | | $ | 1,007,304 | | | $ | 1,006,856 | | | $ | 1,012,731 | | | $ | 996,176 | |
| | | | | | | | | | | | | | | | |
Total assets | | $ | 5,522,826 | | | $ | 5,789,075 | | | $ | 5,354,853 | | | $ | 6,352,026 | |
Less: goodwill | | | (59,630 | ) | | | (59,630 | ) | | | (52,442 | ) | | | (59,630 | ) |
Less: intangibles | | | (28,901 | ) | | | (30,255 | ) | | | (29,385 | ) | | | (32,923 | ) |
| | | | | | | | | | | | | | | | |
Tangible assets | | $ | 5,434,295 | | | $ | 5,699,190 | | | $ | 5,273,026 | | | $ | 6,259,473 | |
| | | | | | | | | | | | | | | | |
Total stockholders’ equity to total assets | | | 19.84 | % | | | 18.95 | % | | | 20.44 | % | | | 17.14 | % |
Less: impact of goodwill | | | -0.88 | % | | | -0.85 | % | | | -0.79 | % | | | -0.79 | % |
Less: impact of intangibles | | | -0.42 | % | | | -0.43 | % | | | -0.44 | % | | | -0.44 | % |
| | | | | | | | | | | | | | | | |
Tangible common equity to tangible assets | | | 18.54 | % | | | 17.67 | % | | | 19.21 | % | | | 15.91 | % |
| | | | | | | | | | | | | | | | |
| | | | |
| | | For the
three months ended
September 30, 2012 | |
Net loss | | $ | (7,891 | ) |
Add: impact of initial public offering related expenses | | | 7,566 | |
Add: impact of initial public offering related stock-based compensation, after tax | | | 3,267 | |
| | | | |
Total impact of initial public offering related expenses | | | 10,833 | |
| | | | |
Net income adjusted for initial public offering related items | | $ | 2,942 | |
| | | | |
Loss per share—diluted | | $ | (0.15 | ) |
Add: impact of initial public offering related expenses | | | 0.15 | |
Add: impact of initial public offering related stock-based compensation, after tax | | | 0.06 | |
| | | | |
Adjusted income per share—diluted | | $ | 0.06 | |
| | | | |
8
NATIONAL BANK HOLDINGS CORPORATION
Non-GAAP Financial Measures
| | | | | | | | | | | | | | | | | | | | |
| | | For the three
months ended
September 30,
2012 | | | For the three
months ended
June 30,
2012 | | | For the three
months ended
September 30,
2011 | | | For the nine
months ended
September 30,
2012 | | | For the nine
months ended
September 30,
2011 | |
Net income (loss) | | $ | (7,891 | ) | | $ | 2,702 | | | $ | 33,752 | | | $ | (3,546 | ) | | $ | 39,510 | |
Less: bargain purchase gain, after tax | | | — | | | | — | | | | (36,589 | ) | | | — | | | | (36,589 | ) |
Add: impact of initial public offering related expenses | | | 7,566 | | | | 87 | | | | 600 | | | | 7,974 | | | | 600 | |
Add: impact of non initial public offering related stock-based compensation, after tax | | | 1,068 | | | | 1,261 | | | | 3,536 | | | | 3,699 | | | | 8,749 | |
Add: impact of initial public offering related stock-based compensation, after tax | | | 3,267 | | | | — | | | | — | | | | 3,267 | | | | — | |
Add: impact of acquisition costs, after tax | | | — | | | | 9 | | | | 2,309 | | | | 537 | | | | 2,595 | |
Less: Gain (loss) on sale of investment securities, after tax | | | — | | | | — | | | | 492 | | | | (416 | ) | | | 375 | |
| | | | | | | | | | | | | | | | | | | | |
Adjusted net revenue, after tax | | $ | 4,010 | | | $ | 4,059 | | | $ | 4,100 | | | $ | 11,515 | | | $ | 15,240 | |
| | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | (7,891 | ) | | $ | 2,702 | | | $ | 33,752 | | | $ | (3,546 | ) | | $ | 39,510 | |
Add: impact of income taxes | | | 230 | | | | 1,733 | | | | 20,648 | | | | 3,039 | | | | 23,868 | |
Add: impact of provision | | | 5,263 | | | | 12,226 | | | | 3,760 | | | | 25,325 | | | | 16,446 | |
| | | | | | | | | | | | | | | | | | | | |
Pre-tax, pre-provision net income | | | (2,398 | ) | | | 16,661 | | | | 58,160 | | | | 24,818 | | | | 79,824 | |
Less: bargain purchase gain | | | — | | | | — | | | | (60,520 | ) | | | — | | | | (60,520 | ) |
Add: impact of initial public offering related expenses | | | 7,566 | | | | 87 | | | | 600 | | | | 7,974 | | | | 600 | |
Add: impact of non initial public offering related stock-based compensation | | | 1,730 | | | | 2,076 | | | | 5,848 | | | | 5,988 | | | | 14,471 | |
Add: impact of initial public offering related stock-based compensation | | | 4,934 | | | | — | | | | — | | | | 4,934 | | | | — | |
Add: impact of acquisition costs | | | — | | | | 15 | | | | 3,819 | | | | 870 | | | | 4,293 | |
Less: gain (loss) on sale of investment securities | | | — | | | | — | | | | 813 | | | | (674 | ) | | | 621 | |
| | | | | | | | | | | | | | | | | | | | |
Adjusted pre-tax, pre-provision net revenue | | $ | 11,832 | | | $ | 18,839 | | | $ | 8,720 | | | $ | 43,910 | | | $ | 39,289 | |
| | | | | | | | | | | | | | | | | | | | |
Non-interest expense | | $ | 59,957 | | | $ | 45,301 | | | $ | 46,659 | | | $ | 158,231 | | | $ | 109,807 | |
Less: impact of initial public offering related expenses | | | (7,566 | ) | | | (87 | ) | | | (600 | ) | | | (7,974 | ) | | | (600 | ) |
Less: impact of non initial public offering related stock-based compensation | | | (1,730 | ) | | | (2,076 | ) | | | (5,848 | ) | | | (5,989 | ) | | | (14,471 | ) |
Less: impact of initial public offering related stock-based compensation | | | (4,934 | ) | | | — | | | | — | | | | (4,934 | ) | | | — | |
Less: impact of acquisition costs | | | — | | | | (15 | ) | | | (3,819 | ) | | | (870 | ) | | | (4,293 | ) |
| | | | | | | | | | | | | | | | | | | | |
Adjusted non-interest expense | | $ | 45,727 | | | $ | 43,123 | | | $ | 36,392 | | | $ | 138,464 | | | $ | 90,443 | |
| | | | | | | | | | | | | | | | | | | | |
9
NATIONAL BANK HOLDINGS CORPORATION
Non-GAAP Financial Measures
| | | | | | | | | | | | | | | | | | | | |
| | | For the three
months ended
September 30,
2012 | | | For the three
months ended
June 30,
2012 | | | For the three
months ended
September 30,
2011 | | | For the nine
months ended
September 30,
2012 | | | For the nine
months ended
September 30,
2011 | |
Return on average assets | | | -0.56 | % | | | 0.18 | % | | | 2.49 | % | | | -0.08 | % | | | 1.08 | % |
Less: bargain purchase gain, after tax | | | 0.00 | % | | | 0.00 | % | | | -2.70 | % | | | 0.00 | % | | | -1.00 | % |
Add: impact of initial public offering related expenses, after tax | | | 0.53 | % | | | 0.01 | % | | | 0.04 | % | | | 0.18 | % | | | 0.02 | % |
Add: impact of non initial public offering related stock-based compensation, after tax | | | 0.08 | % | | | 0.09 | % | | | 0.26 | % | | | 0.08 | % | | | 0.24 | % |
Add: impact of initial public offering related stock-based compensation, after tax | | | 0.23 | % | | | 0.00 | % | | | 0.00 | % | | | 0.07 | % | | | 0.00 | % |
Add: impact of acquisition costs, after tax | | | 0.00 | % | | | 0.00 | % | | | 0.17 | % | | | 0.01 | % | | | 0.07 | % |
Less: gain (loss) on sale of investment securities, after tax | | | 0.00 | % | | | 0.00 | % | | | 0.04 | % | | | -0.01 | % | | | 0.01 | % |
| | | | | | | | | | | | | | | | | | | | |
Adjusted return on average assets | | | 0.28 | % | | | 0.28 | % | | | 0.30 | % | | | 0.26 | % | | | 0.42 | % |
| | | | | |
Return on average tangible assets | | | -0.51 | % | | | 0.25 | % | | | 2.58 | % | | | -0.03 | % | | | 1.15 | % |
Less: bargain purchase gain, after tax | | | 0.00 | % | | | 0.00 | % | | | -2.74 | % | | | 0.00 | % | | | -1.02 | % |
Add: impact of initial public offering related expenses, after tax | | | 0.54 | % | | | 0.01 | % | | | 0.04 | % | | | 0.18 | % | | | 0.02 | % |
Add: impact of non initial public offering related stock-based compensation, after tax | | | 0.08 | % | | | 0.09 | % | | | 0.27 | % | | | 0.08 | % | | | 0.24 | % |
Add: impact of initial public offering related stock-based compensation, after tax | | | 0.23 | % | | | 0.00 | % | | | 0.00 | % | | | 0.07 | % | | | 0.00 | % |
Add: impact of acquisition costs, after tax | | | 0.00 | % | | | 0.00 | % | | | 0.17 | % | | | 0.01 | % | | | 0.07 | % |
Less: gain (loss) on sale of investment securities, after tax | | | 0.00 | % | | | 0.00 | % | | | 0.04 | % | | | -0.01 | % | | | 0.01 | % |
| | | | | | | | | | | | | | | | | | | | |
Adjusted return on average tangible assets | | | 0.34 | % | | | 0.34 | % | | | 0.37 | % | | | 0.32 | % | | | 0.48 | % |
| | | | | |
Return on average equity | | | -2.86 | % | | | 0.99 | % | | | 12.28 | % | | | -0.43 | % | | | 5.12 | % |
Less: bargain purchase gain, after tax | | | 0.00 | % | | | 0.00 | % | | | -13.32 | % | | | 0.00 | % | | | -4.74 | % |
Add: impact of initial public offering related expenses, after tax | | | 2.74 | % | | | 0.03 | % | | | 0.22 | % | | | 0.97 | % | | | 0.08 | % |
Add: impact of non initial public offering related stock-based compensation, after tax | | | 0.39 | % | | | 0.46 | % | | | 1.29 | % | | | 0.45 | % | | | 1.13 | % |
Add: impact of initial public offering related stock-based compensation, after tax | | | 1.18 | % | | | 0.00 | % | | | 0.00 | % | | | 0.40 | % | | | 0.00 | % |
Add: impact of acquisition costs, after tax | | | 0.00 | % | | | 0.00 | % | | | 0.84 | % | | | 0.07 | % | | | 0.34 | % |
Less: gain (loss) on sale of investment securities, after tax | | | 0.00 | % | | | 0.00 | % | | | 0.18 | % | | | -0.05 | % | | | 0.05 | % |
| | | | | | | | | | | | | | | | | | | | |
Adjusted return on average equity | | | 1.45 | % | | | 1.48 | % | | | 1.49 | % | | | 1.40 | % | | | 1.98 | % |
| | | | | |
Return on average tangible equity | | | -2.79 | % | | | 1.42 | % | | | 13.52 | % | | | -0.15 | % | | | 5.81 | % |
Less: bargain purchase gain, after tax | | | 0.00 | % | | | 0.00 | % | | | -14.37 | % | | | 0.00 | % | | | -5.14 | % |
Add: impact of initial public offering related expenses, after tax | | | 2.98 | % | | | 0.04 | % | | | 0.24 | % | | | 1.06 | % | | | 0.08 | % |
Add: impact of non initial public offering related stock-based compensation, after tax | | | 0.42 | % | | | 0.51 | % | | | 1.39 | % | | | 0.49 | % | | | 1.23 | % |
Add: impact of initial public offering related stock-based compensation, after tax | | | 1.29 | % | | | 0.00 | % | | | 0.00 | % | | | 0.43 | % | | | 0.00 | % |
Add: impact of acquisition costs, after tax | | | 0.00 | % | | | 0.00 | % | | | 0.91 | % | | | 0.07 | % | | | 0.36 | % |
Less: gain (loss) on sale of investment securities, after tax | | | 0.00 | % | | | 0.00 | % | | | 0.19 | % | | | -0.06 | % | | | 0.05 | % |
| | | | | | | | | | | | | | | | | | | | |
Adjusted return on average tangible equity | | | 1.91 | % | | | 1.96 | % | | | 1.88 | % | | | 1.86 | % | | | 2.40 | % |
| | | | | |
Net income to risk weighted assets | | | -1.65 | % | | | 0.55 | % | | | 8.35 | % | | | -0.25 | % | | | 3.29 | % |
Add: impact of income taxes | | | 0.05 | % | | | 0.35 | % | | | 5.11 | % | | | 0.21 | % | | | 1.99 | % |
Add: impact of provision | | | 1.10 | % | | | 2.47 | % | | | 0.93 | % | | | 1.78 | % | | | 1.37 | % |
| | | | | | | | | | | | | | | | | | | | |
Pre-tax, pre-provision net revenue to risk weighted assets | | | -0.50 | % | | | 3.37 | % | | | 14.39 | % | | | 1.74 | % | | | 6.65 | % |
Less: bargain purchase gain | | | 0.00 | % | | | 0.00 | % | | | -14.96 | % | | | 0.00 | % | | | -5.04 | % |
Add: impact of initial public offering related expenses | | | 1.58 | % | | | 0.02 | % | | | 0.15 | % | | | 0.56 | % | | | 0.05 | % |
Add: impact of non initial public offering related stock-based compensation | | | 0.36 | % | | | 0.42 | % | | | 1.45 | % | | | 0.42 | % | | | 1.21 | % |
Add: impact of initial public offering related stock-based compensation | | | 1.03 | % | | | 0.00 | % | | | 0.00 | % | | | 0.35 | % | | | 0.00 | % |
Add: impact of acquisition costs | | | 0.00 | % | | | 0.00 | % | | | 0.94 | % | | | 0.06 | % | | | 0.36 | % |
Less: gain (loss) on sale of investment securities | | | 0.00 | % | | | 0.00 | % | | | 0.20 | % | | | -0.05 | % | | | 0.05 | % |
| | | | | | | | | | | | | | | | | | | | |
Adjusted pre-tax, pre-provision net revenue to risk weighted assets | | | 2.48 | % | | | 3.81 | % | | | 2.17 | % | | | 3.08 | % | | | 3.28 | % |
| | | | | |
Non-interest expense to average assets | | | 4.22 | % | | | 3.09 | % | | | 3.45 | % | | | 3.58 | % | | | 3.00 | % |
Add: impact of initial public offering related expenses | | | -0.53 | % | | | -0.01 | % | | | -0.04 | % | | | -0.18 | % | | | -0.02 | % |
Add: impact of non initial public offering related stock-based compensation | | | -0.12 | % | | | -0.14 | % | | | -0.44 | % | | | -0.14 | % | | | -0.40 | % |
Add: impact of initial public offering related stock-based compensation | | | -0.35 | % | | | 0.00 | % | | | 0.00 | % | | | -0.11 | % | | | 0.00 | % |
Less: impact of acquisition costs | | | 0.00 | % | | | 0.00 | % | | | -0.28 | % | | | -0.02 | % | | | -0.12 | % |
| | | | | | | | | | | | | | | | | | | | |
Adjusted non-interest expense to average assets | | | 3.22 | % | | | 2.94 | % | | | 2.69 | % | | | 3.13 | % | | | 2.46 | % |
| | | | | |
Efficiency ratio | | | 101.82 | % | | | 70.96 | % | | | 43.44 | % | | | 84.25 | % | | | 56.28 | % |
Less: bargain purchase gain | | | 0.00 | % | | | 0.00 | % | | | 57.83 | % | | | 0.00 | % | | | 26.16 | % |
Add: impact of initial public offering related expenses | | | -13.14 | % | | | -0.14 | % | | | -1.33 | % | | | -4.37 | % | | | -0.46 | % |
Add: impact of non initial public offering related stock-based compensation | | | -3.00 | % | | | -3.35 | % | | | -12.96 | % | | | -3.28 | % | | | -11.15 | % |
Add: impact of initial public offering related stock-based compensation | | | -8.57 | % | | | 0.00 | % | | | 0.00 | % | | | -2.71 | % | | | 0.00 | % |
Add: impact of acquisition costs | | | 0.00 | % | | | -0.02 | % | | | -8.47 | % | | | -0.48 | % | | | -3.31 | % |
Less: gain (loss) on sale of investment securities | | | 0.00 | % | | | 0.00 | % | | | -0.33 | % | | | 0.31 | % | | | -0.18 | % |
| | | | | | | | | | | | | | | | | | | | |
Adjusted efficiency ratio | | | 77.09 | % | | | 67.45 | % | | | 78.18 | % | | | 73.72 | % | | | 67.34 | % |
