National Bank Holdings Corporation Announces Third Quarter 2021 Financial Results

Tuesday, 19. October 2021 22:10

DENVER, Oct. 19, 2021 (GLOBE NEWSWIRE) --

National Bank Holdings Corporation (NYSE: NBHC) reported:

          
  For the quarter
  3Q21 2Q21 3Q20
Net income ($000's) $ 19,825  $24,200  $27,893 
Earnings per share - diluted $ 0.64  $0.77  $0.90 
Return on average tangible assets(1)  1.14%  1.41%  1.76%
Return on average tangible common equity(1)  10.65%  13.41%  16.49%

                                                      

(1) Ratios are annualized. See non-GAAP reconciliations below.


In announcing these results, Chief Executive Officer Tim Laney shared, “We are pleased with this quarter’s results, delivering quarterly earnings of $0.64 per diluted share and pre-provision net revenue growth of 16.2% annualized over the prior quarter. Excluding PPP loans, our teams delivered impressive annualized loan growth of 16.5% fueled by record quarterly loan originations. Our prudent approach to extending new credit continues to result in excellent credit quality with just two basis points of annualized net charge-offs for the quarter. We maintain ample liquidity and a strong Common Equity Tier 1 ratio of 14.57% which serves as a source of strength as we execute on our growth strategies.”

Mr. Laney added, “Earlier this quarter, we announced strategic investments in two fintech firms, Finstro Global Holdings Inc. and Figure Technologies. Finstro and Figure are our initial partners working with NBH to introduce a comprehensive digital financial ecosystem serving small and medium-sized businesses. We believe we are on the verge of creating a business that will provide small and medium-sized businesses with access to a full range of banking services and block chain payment alternatives.”

Third Quarter 2021 Results
(All comparisons refer to the second quarter of 2021, except as noted)

Net income totaled $19.8 million, or $0.64 per diluted share, during the third quarter of 2021, compared to $24.2 million, or $0.77 per diluted share during the second quarter. The return on average tangible assets was 1.14%, compared to 1.41%, and the return on average tangible common equity was 10.65%, compared to 13.41% last quarter.

Net Interest Income
Fully taxable equivalent net interest income totaled $48.9 million during the third quarter of 2021, an increase of $2.7 million. Excluding PPP loan fee income of $2.6 million, which was $0.5 million higher than last quarter, net interest income increased $2.2 million or 19.8% annualized. As of September 30, 2021, the remaining unamortized PPP loan fees totaled $2.4 million. The fully taxable equivalent net interest margin widened 11 basis points to 2.93% driven by excess cash liquidity being deployed into higher yielding originated loans. The yield on earning assets increased eight basis points, with the cost of deposits decreasing three basis points to 0.21%.

Loans
Total loans ended the quarter at $4.4 billion, an increase of $121.0 million over the prior quarter. Excluding PPP loans, total loans increased $173.9 million or 16.5% annualized, led by commercial loan growth of $138.2 million, or 19.2% annualized. Third quarter loan originations totaled a record $413.3 million, led by commercial loan originations of $301.7 million.

Asset Quality and Provision for Loan Losses
Net loan loss provision recorded during the quarter was zero compared to a release of $5.9 million in the prior quarter. The quarter’s loan growth was offset by strong asset quality and an improved outlook in the CECL model’s underlying economic forecast. Annualized net charge-offs totaled 0.02% of total loans, compared to 0.07%. Non-performing loans (comprised of non-accrual loans and non-accrual TDRs) improved three basis points to 0.29% of total loans, and non-performing assets improved five basis points to 0.39% of total loans and OREO. The allowance for credit losses as a percentage of total loans totaled 1.11%, compared to 1.14% at June 30, 2021.

Deposits
Average total deposits increased $33.9 million or 2.2% annualized, to $6.1 billion for the third quarter 2021. Average transaction deposits (defined as total deposits less time deposits) increased $67.6 million or 5.2% annualized. The mix of transaction deposits to total deposits improved 72 basis points to 85.7% at September 30, 2021. The loan to deposit ratio totaled 72.1% at September 30, 2021, compared to 69.8% at June 30, 2021.

Non-Interest Income
Non-interest income totaled $28.5 million, an increase of $3.3 million largely driven by higher mortgage banking income, which included a $1.3 million gain from the sale of mortgage servicing rights. Service charges and bank card fees increased a combined $0.3 million during the quarter. Included in other non-interest income was $0.8 million of deposit premium gain from the sale of one banking center during the third quarter. Additionally, other non-interest income included $0.4 million and $0.8 million of gains from fixed assets sales from banking center consolidations during the third and second quarters, respectively.

Non-Interest Expense
Non-interest expense totaled $51.3 million, an increase of $5.0 million, primarily due to transaction-related costs and higher performance-related compensation. Included in the quarter were $2.4 million of transaction-related expenses for the previously announced strategic investments in Finstro Global Holdings Inc. and Figure Technologies to further our vision for building a comprehensive digital financial ecosystem. Salaries and benefits increased $1.1 million largely due to higher performance-related compensation. Problem asset workout expense increased $0.8 million due to the write-down of one previously acquired OREO property. The fully taxable equivalent efficiency ratio totaled 65.9% at September 30, 2021, compared to 64.5% at June 30, 2021.

Income tax expense totaled $5.0 million during the third quarter, compared to $5.4 million. The effective tax rate for the third quarter 2021 was 20.0%, compared to 18.4% during the prior quarter, driven by an increase in the full year projected income. The lower rate compared to the statutory rate reflects the continued success of our tax strategies and tax-exempt income.

Capital
Capital ratios continue to be strong and in excess of federal bank regulatory agency “well capitalized” thresholds. The Tier 1 leverage ratios at September 30, 2021 for the consolidated company and NBH Bank were 10.43% and 8.91%, respectively. Shareholders’ equity totaled $844.7 million at September 30, 2021, decreasing $7.2 million primarily due to stock repurchase activity during the quarter.

Common book value per share increased $0.23 to $27.89 at September 30, 2021. The quarter’s earnings, net of dividends paid and share repurchases, increased the tangible common book value per share by $0.19 to $24.20 at September 30, 2021. Excluding accumulated other comprehensive income, the tangible book value per share increased $0.29 to $24.24 at September 30, 2021.

Recent Events
The COVID-19 pandemic has caused disruption and is likely to continue to present challenges to our business. We continue to remain committed to ensuring our associates, clients and communities are receiving the support they need through our banking centers and our digital banking platform. Our teams have been working diligently to support our clients who are experiencing financial hardship due to COVID-19 through participation in the SBA’s Paycheck Protection Program, including assistance with PPP loan forgiveness applications, and loan modifications, as needed. While access to vaccines in the United States has increased, the efficacy of those vaccines, the impact of emerging targeted vaccine mandates and new variants of the virus, and the length of time that the government-mandated measures must remain in place or potentially be reinstituted to address COVID-19 are unknown. The pandemic has had a negative impact to the U.S. labor market, consumer spending and business operations, and it is not clear whether new outbreaks of COVID-19 cases will have further impact.

Year-Over-Year Review
(All comparisons refer to the first nine months of 2020, except as noted)

Net income totaled $70.8 million, or $2.27 per diluted share, an increase of $9.4 million or 15.3% over the first nine months of 2020. The return on average tangible assets increased three basis points to 1.39%, and the return on average tangible common equity increased 57 basis points to 13.04%.

Fully taxable equivalent net interest income totaled $141.5 million, decreasing $6.7 million or 4.5%, as a result of interest rate actions taken by the Federal Reserve during 2020 and lower non-PPP loan balances. Average earning assets increased $785.1 million, or 13.8%, primarily driven by increases in average interest bearing cash balances of $671.0 million and average investment securities of $411.5 million. The fully taxable equivalent net interest margin narrowed 56 basis points to 2.92% due to lower earning asset yields. The yield on earning assets decreased 82 basis points, driven by the remix of assets into lower-yielding cash balances. The cost of deposits decreased 25 basis points to 0.24%.

Loans outstanding totaled $4.4 billion, decreasing $134.4 million or 2.9%, due to loan payoffs including lower PPP loan balances of $271.5 million as a result of PPP loan forgiveness, which were partially offset by non-PPP loan growth. New loan originations over the trailing 12 months totaled $1.3 billion, led by commercial loan originations of $895.8 million including PPP loan originations of $121.1 million.

The Company recorded $9.4 million of net provision release during the first nine months of 2021, compared to $17.6 million of provision expense during the same period in 2020. The provision release was driven by strong asset quality and an improved outlook in the CECL model’s underlying economic forecast. Annualized net charge-offs totaled 0.03% of total loans, compared to 0.04% of total loans during the first nine months of 2020. Non-performing loans to total loans improved 12 basis points to 0.29%, compared to 0.41% at September 30, 2020. The allowance for credit losses totaled 1.11% of total loans, compared to 1.34% at September 30, 2020.

Average total deposits increased $865.7 million or 16.9%, to $6.0 billion for the first nine months of 2021. Average non-interest bearing demand deposits increased $956.6 million or 70.2%, and average transaction deposits increased $977.7 million, or 23.9%. The mix of transaction deposits to total deposits increased by 400 basis points to 85.7% at September 30, 2021. The mix of non-interest bearing demand deposits to total deposits improved to 39.9% from 27.3% at September 30, 2020.

Non-interest income totaled $87.1 million, representing a decrease of $19.8 million or 18.5%, driven by $26.3 million lower mortgage banking income due to slower refinance activity in 2021 and competition driving tighter gain on sale margins. Service charges and bank card fees increased a combined $2.0 million. Other non-interest income increased $4.6 million due to $3.5 million of gains from banking center-related sales activities during the first nine months of 2021.

Non-interest expense totaled $147.3 million, a decrease of $10.4 million or 6.6% driven by lower mortgage-related compensation as well as the Company’s strategic efforts to improve operating efficiency. Included in the nine months of 2021 were $2.5 million of transaction-related expenses for the previously announced investments in our digital financial ecosystem. Salaries and benefits decreased $10.7 million primarily due to lower mortgage banking related compensation. Occupancy and equipment decreased $1.7 million largely due to efficiencies gained from the completion of the previously announced banking center consolidations. Problem asset workout expense decreased $0.5 million.

Income tax expense totaled $16.1 million, an increase of $1.6 million, driven by 2021’s higher pre-tax income. Included in income tax expense was $0.4 million of tax benefit and $0.1 million of tax expense from stock compensation activity during the first nine months of 2021 and 2020, respectively. Adjusting for stock compensation activity, the effective tax rate for the first nine months of 2021 was 18.9%, consistent with 2020.

Conference Call
Management will host a conference call to review the results at 11:00 a.m. Eastern Time on Wednesday, October 20, 2021. Interested parties may listen to this call by dialing (800) 367-2403 (United States) / 0800 031 4838 (United Kingdom) using the confirmation code of 7577774 and asking for the NBHC Q3 2021 Earnings Call. A telephonic replay of the call will be available beginning approximately four hours after the call’s completion through October 25, 2021, by dialing (888) 203-1112 using the confirmation code of 7577774. The earnings release and an on-line replay of the call will also be available on the Company’s website at www.nationalbankholdings.com by visiting the investor relations area.

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

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

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

About National Bank Holdings Corporation
National Bank Holdings Corporation is a bank holding company created to build a leading community bank franchise delivering high quality client service and committed to stakeholder results. Through its bank subsidiary, NBH Bank, National Bank Holdings Corporation operates a network of 81 banking centers, serving individual consumers, small, medium and large businesses, and government and non-profit entities. Its banking centers are located in its core footprint of Colorado, the greater Kansas City region, Texas, Utah and New Mexico. Its comprehensive residential mortgage banking group primarily serves the bank’s core footprint. NBH Bank operates under the following brand names: Community Banks of Colorado and Community Banks Mortgage, a division of NBH Bank, in Colorado, Bank Midwest and Bank Midwest Mortgage in Kansas and Missouri, and Hillcrest Bank and Hillcrest Bank Mortgage in Texas, Utah and New Mexico. Additional information about National Bank Holdings Corporation can be found at www.nationalbankholdings.com.

For more information visit: cobnks.com, bankmw.com, hillcrestbank.com or nbhbank.com. Or, follow us on any of our social media sites:
Community Banks of Colorado: facebook.com/cobnks, twitter.com/cobnks, instagram.com/cobnks;
Bank Midwest: facebook.com/bankmw, twitter.com/bank_mw, instagram.com/bankmw;
Hillcrest Bank: facebook.com/hillcrestbank, twitter.com/hillcrest_bank;
NBH Bank: twitter.com/nbhbank;
or connect with any of our brands on LinkedIn.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contain words such as “anticipate,” “believe,” “can,” “would,” “should,” “could,” “may,” “predict,” “seek,” “potential,” “will,” “estimate,” “target,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “intend” or similar expressions that relate to the Company’s strategy, plans or intentions. Forward-looking statements involve certain important risks, uncertainties and other factors, any of which could cause actual results to differ materially from those in such statements. Such factors include, without limitation, the “Risk Factors” referenced in our most recent Form 10-K filed with the Securities and Exchange Commission (SEC), other risks and uncertainties listed from time to time in our reports and documents filed with the SEC, and the following factors: ability to execute our business strategy; business and economic conditions; effects of 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 or 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; continued consolidation in the financial services industry; ability to maintain or increase market share and control expenses; costs and effects of changes in laws and regulations and of other legal and regulatory developments; technological changes; the timely development and acceptance of new products and services; the Company’s continued ability to attract, hire and maintain qualified personnel; ability to implement and/or improve operational management and other internal risk controls and processes and reporting system and procedures; regulatory limitations on dividends from the Company's bank subsidiary; changes in estimates of future 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; adverse effects due to the novel Coronavirus Disease 2019 (COVID-19) on the Company and its clients, counterparties, employees, and third-party service providers, and the adverse impacts on our business, financial position, results of operations, and prospects; impact of reputational risk; and success at managing the risks involved in the foregoing items. The Company can give no assurance that any goal or plan or expectation set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements. The forward-looking statements are made as of the date of this press release, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.

Contact:
Analysts/Institutional Investors: Aldis Birkans, Chief Financial Officer, (720) 554-6640, ir@nationalbankholdings.com
Media: Jody Soper, Chief Marketing Officer, (303) 784-5925, Jody.Soper@nbhbank.com

 
NATIONAL BANK HOLDINGS CORPORATION
FINANCIAL SUMMARY
Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except share and per share data)
               
 For the three months ended  For the nine months ended
 September 30,  June 30, September 30, September 30,  September 30,
 2021 2021
 2020
 2021
 2020
Total interest and dividend income$ 50,801 $48,450  $52,302  $ 148,464  $164,714 
Total interest expense  3,232  3,582   5,587    10,806   20,324 
Net interest income  47,569  44,868   46,715    137,658   144,390 
Taxable equivalent adjustment  1,315  1,279   1,275    3,862   3,843 
Net interest income FTE(1)  48,884  46,147   47,990    141,520   148,233 
Provision (release) expense for loan losses   (5,850)  1,200    (9,425)  17,630 
Net interest income after provision for loan losses FTE(1)  48,884  51,997   46,790    150,945   130,603 
Non-interest income:              
Service charges  3,947  3,568   3,742    10,989   10,962 
Bank card fees  4,530  4,614   4,039    13,217   11,206 
Mortgage banking income  16,615  13,979   34,943    52,973   79,246 
Other non-interest income  3,430  3,105   1,733    9,935   5,384 
OREO-related income      75    35   103 
Total non-interest income  28,522  25,266   44,532    87,149   106,901 
Non-interest expense:              
Salaries and benefits  32,556  31,439   38,614    97,518   108,251 
Occupancy and equipment  6,469  6,131   6,878    19,150   20,854 
Professional fees  3,251  649   714    4,642   2,082 
Other non-interest expense  7,624  7,019   7,443    21,496   21,222 
Problem asset workout  1,119  294   1,064    1,851   2,341 
Loss (gain) on sale of OREO, net   221   (119)   192   (25)
Core deposit intangible asset amortization  295  296   295    887   887 
Banking center consolidation-related expense   294   432    1,589   2,140 
Total non-interest expense  51,314  46,343   55,321    147,325   157,752 
               
Income before income taxes FTE(1)  26,092  30,920   36,001    90,769   79,752 
Taxable equivalent adjustment  1,315  1,279   1,275    3,862   3,843 
Income before income taxes  24,777  29,641   34,726    86,907   75,909 
Income tax expense  4,952  5,441   6,833    16,070   14,487 
Net income$ 19,825 $24,200  $27,893  $ 70,837  $61,422 
Earnings per share - basic$ 0.64 $0.78  $0.91  $ 2.29  $1.99 
Earnings per share - diluted  0.64  0.77   0.90    2.27   1.97 

                                                      

(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)
            
 September 30, 2021 June 30, 2021 December 31, 2020 September 30, 2020
ASSETS           
Cash and cash equivalents$ 807,370  $1,004,493  $605,565  $445,103 
Investment securities available-for-sale  657,833   605,798   661,955   572,523 
Investment securities held-to-maturity  642,636   687,635   376,615   320,001 
Non-marketable securities  46,964   24,637   22,073   33,614 
Loans  4,421,760   4,300,757   4,353,726   4,556,121 
Allowance for credit losses  (49,155)  (49,030)  (59,777)  (60,979)
Loans, net  4,372,605   4,251,727   4,293,949   4,495,142 
Loans held for sale  158,066   134,805   247,813   273,003 
Other real estate owned  4,325   5,124   4,730   4,590 
Premises and equipment, net  94,114   95,019   106,982   108,860 
Goodwill  115,027   115,027   115,027   115,027 
Intangible assets, net  11,621   22,360   17,928   15,017 
Other assets  190,430   189,503   207,313   217,796 
Total assets$ 7,100,991  $7,136,128  $6,659,950  $6,600,676 
LIABILITIES AND SHAREHOLDERS' EQUITY           
Liabilities:           
Non-interest bearing demand deposits$ 2,447,099  $2,437,328  $2,111,045  $1,533,676 
Interest bearing demand deposits  546,597   555,865   514,286   976,133 
Savings and money market  2,264,083   2,240,359   2,064,769   2,079,585 
Total transaction deposits  5,257,779   5,233,552   4,690,100   4,589,394 
Time deposits  876,841   924,501   986,132   1,027,066 
Total deposits  6,134,620   6,158,053   5,676,232   5,616,460 
Securities sold under agreements to repurchase  21,427   22,957   22,897   23,904 
Other liabilities  100,228   103,252   140,130   160,955 
Total liabilities  6,256,275   6,284,262   5,839,259   5,801,319 
Shareholders' equity:           
Common stock  515   515   515   515 
Additional paid in capital  1,013,064   1,011,200   1,011,362   1,010,145 
Retained earnings  273,900   260,821   223,175   202,238 
Treasury stock  (441,366)  (422,365)  (424,127)  (424,621)
Accumulated other comprehensive (loss) income, net of tax  (1,397)  1,695   9,766   11,080 
Total shareholders' equity  844,716   851,866   820,691   799,357 
Total liabilities and shareholders' equity$ 7,100,991  $7,136,128  $6,659,950  $6,600,676 
SHARE DATA           
Average basic shares outstanding  30,800,590   30,947,206   30,784,896   30,756,116 
Average diluted shares outstanding  31,064,815   31,226,351   31,032,648   30,924,223 
Ending shares outstanding  30,288,131   30,800,985   30,634,291   30,594,412 
Common book value per share$ 27.89  $27.66  $26.79  $26.13 
Tangible common book value per share(1) (non-GAAP)  24.20   24.01   23.09   22.40 
Tangible common book value per share, excluding accumulated other comprehensive income(1) (non-GAAP)  24.24   23.95   22.77   22.04 
CAPITAL RATIOS           
Average equity to average assets 12.07%  11.95%  12.27%  12.22%
Tangible common equity to tangible assets(1) 10.49%  10.53%  10.80%  10.57%
Tier 1 leverage ratio 10.43%  10.57%  10.70%  10.60%
Common equity tier 1 risk-based capital ratio 14.57%  15.31%  14.70%  14.25%
Tier 1 risk-based capital ratio 14.57%  15.31%  14.70%  15.40%
Total risk-based capital ratio 15.48%  16.27%  15.83%  15.40%

                                                      

(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
     September 30, 2021   September 30, 2021
     vs. June 30, 2021   vs. September 30, 2020
 September 30, 2021 June 30, 2021 % Change September 30, 2020 % Change
Originated:            
Commercial:            
 Commercial and industrial$ 1,352,481 $1,253,745 7.9% $1,228,550 10.1%
 Municipal and non-profit  878,988  860,740 2.1%  883,065 (0.5)%
 Owner-occupied commercial real estate  504,415  479,286 5.2%  460,487 9.5%
 Food and agribusiness  195,766  195,095 0.3%  210,818 (7.1)%
 PPP loans(1)  76,794  129,643 (40.8)%  348,257 (77.9)%
Total commercial  3,008,444  2,918,509 3.1%  3,131,177 (3.9)%
Commercial real estate non-owner occupied  605,143  570,252 6.1%  515,415 17.4%
Residential real estate  608,158  600,124 1.3%  614,449 (1.0)%
Consumer  17,735  17,942 (1.2)%  20,196 (12.2)%
 Total originated  4,239,480  4,106,827 3.2%  4,281,237 (1.0)%
             
Acquired:            
Commercial:            
 Commercial and industrial  17,521  18,710 (6.4)%  23,984 (26.9)%
 Municipal and non-profit  347  359 (3.3)%  576 (39.8)%
 Owner-occupied commercial real estate  37,335  40,435 (7.7)%  55,929 (33.2)%
 Food and agribusiness  3,653  3,913 (6.6)%  5,740 (36.4)%
Total commercial  58,856  63,417 (7.2)%  86,229 (31.7)%
Commercial real estate non-owner occupied  65,784  67,368 (2.4)%  101,672 (35.3)%
Residential real estate  57,344  62,805 (8.7)%  86,478 (33.7)%
Consumer  296  340 (12.9)%  505 (41.4)%
Total acquired  182,280  193,930 (6.0)%  274,884 (33.7)%
   Total loans$ 4,421,760 $4,300,757 2.8% $4,556,121 (2.9)%

                                                      

(1)PPP loan balances are net of fees and costs and include principal totaling $79,242, $134,632 and $356,913 as of September 30, 2021, June 30, 2021 and September 30, 2020, respectively.
  


Originations(1)              
               
 Third quarter Second quarter First quarter Fourth quarter Third quarter
 2021 2021 2021
 2020 2020
Commercial:              
Commercial and industrial$ 196,289 $147,030 $23,390  $96,625 $11,354
Municipal and non-profit  43,516  25,131  7,999   25,348  6,083
Owner occupied commercial real estate  53,445  48,225  27,093   36,085  23,758
Food and agribusiness  8,442  26,956  (10,104)  19,191  13,876
PPP loans     121,141     122
Total commercial  301,692  247,342  169,519   177,249  55,193
Commercial real estate non-owner occupied  55,392  58,532  49,195   52,018  24,937
Residential real estate  54,442  53,962  74,145   41,355  49,786
Consumer  1,810  2,267  1,353   1,858  2,980
Total$ 413,336 $362,103 $294,212  $272,480 $132,896

                                                      

(1)Originations are defined as closed end funded loans and net fundings under revolving lines of credit. Net fundings (paydowns) under revolving lines of credit were $29,154, $59,520, ($26,395), $50,982 and ($27,899) as of the third, second and first quarters of 2021 and the fourth and third quarters of 2020, 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
  September 30, 2021 June 30, 2021 September 30, 2020
  Average    Average Average    Average Average    Average
  balance Interest rate balance Interest rate balance Interest rate
Interest earning assets:                           
Originated loans FTE(1)(2) $ 4,137,001  $ 41,865  4.01% $4,077,142  $40,036  3.94% $4,343,335  $40,973  3.75%
Acquired loans   187,419    3,796  8.04%  211,126   3,923  7.45%  284,653   6,593  9.21%
Loans held for sale   157,381    1,166  2.94%  159,068   1,213  3.06%  230,390   1,683  2.91%
Investment securities available-for-sale   656,757    2,572  1.57%  638,039   2,397  1.50%  559,330   2,784  1.99%
Investment securities held-to-maturity   671,053    2,178  1.30%  572,534   1,723  1.20%  242,511   1,253  2.07%
Other securities   14,657    210  5.73%  15,079   209  5.54%  29,640   221  2.98%
Interest earning deposits and securities purchased under agreements to resell   799,779    329  0.16%  888,600   228  0.10%  254,931   70  0.11%
Total interest earning assets FTE(2) $ 6,624,047  $ 52,116  3.12% $6,561,588  $49,729  3.04% $5,944,790  $53,577  3.59%
Cash and due from banks $ 77,498        $78,148        $73,274       
Other assets   463,553         472,142         525,324       
Allowance for credit losses   (48,957)        (54,984)        (60,372)      
Total assets $ 7,116,141        $7,056,894        $6,483,016       
Interest bearing liabilities:                           
Interest bearing demand, savings and money market deposits $ 2,803,071  $ 1,516  0.21% $2,789,681  $1,572  0.23% $2,957,604  $1,990  0.27%
Time deposits   903,935    1,711  0.75%  937,579   2,004  0.86%  1,038,983   3,501  1.34%
Securities sold under agreements to repurchase   19,681    5  0.10%  19,891   6  0.12%  22,667   10  0.18%
Federal Home Loan Bank advances       0.00%       0.00%  1,141   86  29.99%
Total interest bearing liabilities $ 3,726,687  $ 3,232  0.34% $3,747,151  $3,582  0.38% $4,020,395  $5,587  0.55%
Demand deposits $ 2,422,976        $2,368,810        $1,515,058       
Other liabilities   107,233         97,817         155,205       
Total liabilities   6,256,896         6,213,778         5,690,658       
Shareholders' equity   859,245         843,116         792,358       
Total liabilities and shareholders' equity $ 7,116,141        $7,056,894        $6,483,016       
Net interest income FTE(2)    $ 48,884       $46,147       $47,990   
Interest rate spread FTE(2)        2.78%        2.66%        3.04%
Net interest earning assets $ 2,897,360        $2,814,437        $1,924,395       
Net interest margin FTE(2)        2.93%        2.82%        3.21%
Average transaction deposits $ 5,226,047        $5,158,491        $4,472,662       
Average total deposits   6,129,982         6,096,070         5,511,645       
Ratio of average interest earning assets to average interest bearing liabilities  177.75%        175.11%        147.87%      

                                                      

(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 $1,315, $1,279 and $1,275 for the three months ended September 30, 2021, June 30, 2021 and September 30, 2020, respectively.
  


NATIONAL BANK HOLDINGS CORPORATION
Summary of Net Interest Margin
(Dollars in thousands)
 
 For the nine months ended September 30, 2021 For the nine months ended September 30, 2020
 Average    Average Average    Average
 balance Interest rate balance Interest rate
Interest earning assets:               
Originated loans FTE(1)(2)$ 4,073,529  $ 121,461 3.99% $4,273,332  $128,392 4.01%
Acquired loans  212,151    12,847 8.10%  313,555   22,194 9.45%
Loans held for sale  182,385    3,896 2.86%  163,980   3,929 3.20%
Investment securities available-for-sale  660,399    7,454 1.50%  597,654   9,229 2.06%
Investment securities held-to-maturity  555,818    5,317 1.28%  207,107   3,689 2.37%
Other securities  15,180    629 5.52%  29,826   945 4.22%
Interest earning deposits and securities purchased under agreements to resell  776,472    722 0.12%  105,430   179 0.23%
Total interest earning assets FTE(2)$ 6,475,934  $ 152,326 3.14% $5,690,884  $168,557 3.96%
Cash and due from banks$ 78,953       $74,694      
Other assets  476,856        510,941      
Allowance for credit losses  (54,249)       (54,077)     
Total assets$ 6,977,494       $6,222,442      
Interest bearing liabilities:               
Interest bearing demand, savings and money market deposits$ 2,746,657  $ 4,740 0.23% $2,725,572  $6,829 0.33%
Time deposits  936,088    6,050 0.86%  1,048,116   12,075 1.54%
Securities sold under agreements to repurchase  20,310    16 0.11%  30,322   125 0.55%
Federal Home Loan Bank advances     0.00%  127,456   1,295 1.36%
Total interest bearing liabilities$ 3,703,055  $ 10,806 0.39% $3,931,466  $20,324 0.69%
Demand deposits$ 2,320,160       $1,363,556      
Other liabilities  108,503        147,929      
Total liabilities  6,131,718        5,442,951      
Shareholders' equity  845,776        779,491      
 Total liabilities and shareholders' equity$ 6,977,494       $6,222,442      
Net interest income FTE(2)   $ 141,520      $148,233  
Interest rate spread FTE(2)      2.75%       3.27%
Net interest earning assets$ 2,772,879       $1,759,418      
Net interest margin FTE(2)      2.92%       3.48%
Average transaction deposits$ 5,066,817       $4,089,128      
Average total deposits  6,002,905        5,137,244      
Ratio of average interest earning assets to average interest bearing liabilities 174.88%       144.75%     

                                                      

(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 $3,862 and $3,843 for the nine months ended September 30, 2021 and September 30, 2020, 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
 September 30, 2021 June 30, 2021 September 30, 2020
Beginning allowance for credit losses$ 49,030  $55,057  $60,465 
Charge-offs  (322)  (925)  (619)
Recoveries  101   198   133 
Provision expense (release)  346   (5,300)  1,000 
Ending allowance for credit losses ("ACL")$ 49,155  $49,030  $60,979 
Ratio of annualized net charge-offs to average total loans during the period 0.02%  0.07%  0.04%
Ratio of annualized net charge-offs to average total loans excluding PPP loans during the period 0.02%  0.07%  0.04%
Ratio of ACL to total loans outstanding at period end 1.11%  1.14%  1.34%
Ratio of ACL to total loans outstanding excluding PPP loans at period end 1.13%  1.18%  1.45%
Ratio of ACL to total non-performing loans at period end 382.59%  353.22%  322.95%
Total loans$ 4,421,760  $4,300,757  $4,556,121 
Average total loans during the period  4,352,557   4,312,128   4,677,630 
Average total loans excluding PPP loans during the period  4,245,524   4,112,172   4,329,458 
Total non-performing loans  12,848   13,881   18,882 

Past Due and Non-accrual Loans

         
 September 30, 2021 June 30, 2021 September 30, 2020
Loans 30-89 days past due and still accruing interest$ 1,302  $2,098  $6,587 
Loans 90 days past due and still accruing interest  495   767   161 
Non-accrual loans  12,848   13,881   18,882 
Total past due and non-accrual loans$ 14,645  $16,746  $25,630 
Total 90 days past due and still accruing interest and non-accrual loans to total loans 0.30%  0.34%  0.42%
            

Asset Quality Data

         
 September 30, 2021 June 30, 2021 September 30, 2020
Non-performing loans$ 12,848  $13,881  $18,882 
OREO  4,325   5,124   4,590 
Total non-performing assets$ 17,173  $19,005  $23,472 
Accruing restructured loans$ 11,135  $11,844  $21,786 
Total non-performing loans to total loans 0.29%  0.32%  0.41%
Total non-performing loans to total loans excluding PPP loans 0.30%  0.33%  0.45%
Total non-performing assets to total loans and OREO 0.39%  0.44%  0.51%
Total non-performing assets to total loans and OREO excluding PPP loans 0.39%  0.46%  0.56%
            


NATIONAL BANK HOLDINGS CORPORATION
Key Ratios(1)
          
 As of and for the three months ended  As of and for the nine months ended
 September 30,  June 30, September 30, September 30,  September 30,
 2021
 2021
 2020
 2021
 2020
Return on average assets1.11% 1.38% 1.71% 1.36% 1.32%
Return on average tangible assets(2)1.14% 1.41% 1.76% 1.39% 1.36%
Return on average equity9.15% 11.51% 14.00% 11.20% 10.53%
Return on average tangible common equity(2)10.65% 13.41% 16.49% 13.04% 12.47%
Loan to deposit ratio (end of period)72.08% 69.84% 81.12% 72.08% 81.12%
Non-interest bearing deposits to total deposits (end of period)39.89% 39.58% 27.31% 39.89% 27.31%
Net interest margin(4)2.85% 2.74% 3.13% 2.84% 3.39%
Net interest margin FTE(2)(4)2.93% 2.82% 3.21% 2.92% 3.48%
Interest rate spread FTE(2)(5)2.78% 2.66% 3.04% 2.75% 3.27%
Yield on earning assets(3)3.04% 2.96% 3.50% 3.07% 3.87%
Yield on earning assets FTE(2)(3)3.12% 3.04% 3.59% 3.14% 3.96%
Cost of interest bearing liabilities(3)0.34% 0.38% 0.55% 0.39% 0.69%
Cost of deposits0.21% 0.24% 0.40% 0.24% 0.49%
Non-interest income to total revenue FTE(2)36.85% 35.38% 48.13% 38.11% 41.90%
Non-interest expense to average assets2.86% 2.63% 3.39% 2.82% 3.39%
Efficiency ratio67.05% 65.66% 60.30% 65.14% 62.42%
Efficiency ratio FTE(2)65.91% 64.48% 59.47% 64.04% 61.48%
          
Total Loans Asset Quality Data(6)(7)(8)         
Non-performing loans to total loans0.29% 0.32% 0.41% 0.29% 0.41%
Non-performing loans to total loans excluding PPP loans0.30% 0.33% 0.45% 0.30% 0.45%
Non-performing assets to total loans and OREO0.39% 0.44% 0.51% 0.39% 0.51%
Non-performing assets to total loans and OREO excluding PPP loans0.39% 0.46% 0.56% 0.39% 0.56%
Allowance for credit losses to total loans1.11% 1.14% 1.34% 1.11% 1.34%
Allowance for credit losses to total loans excluding PPP loans1.13% 1.18% 1.45% 1.13% 1.45%
Allowance for credit losses to non-performing loans382.59% 353.22% 322.95% 382.59% 322.95%
Net charge-offs to average loans(1)0.02% 0.07% 0.04% 0.03% 0.04%

                                                      

(1)Ratios are annualized.
(2)Ratio represents non-GAAP financial measure. See non-GAAP reconciliations below.
(3)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.
(4)Net interest margin represents net interest income, including accretion income on interest earning assets, as a percentage of average interest earning assets.
(5)Interest rate spread represents the difference between the weighted average yield on interest earning assets and the weighted average cost of interest bearing liabilities.
(6)Non-performing loans consist of non-accruing loans and restructured loans on non-accrual.
(7)Non-performing assets include non-performing loans and other real estate owned.
(8)Total loans are net of unearned discounts and fees.
  


NATIONAL BANK HOLDINGS CORPORATION
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(Dollars in thousands, except share and per share data)
 
Tangible Common Book Value Ratios
            
 September 30, 2021 June 30, 2021    December 31, 2020 September 30, 2020
Total shareholders' equity$ 844,716  $851,866  $820,691  $799,357 
Less: goodwill and core deposit intangible assets, net  (121,688)  (121,983)  (122,575)  (122,871)
Add: deferred tax liability related to goodwill  9,841   9,612   9,155   8,927 
Tangible common equity (non-GAAP)$ 732,869  $739,495  $707,271  $685,413 
            
Total assets$ 7,100,991  $7,136,128  $6,659,950  $6,600,676 
Less: goodwill and core deposit intangible assets, net  (121,688)  (121,983)  (122,575)  (122,871)
Add: deferred tax liability related to goodwill  9,841   9,612   9,155   8,927 
Tangible assets (non-GAAP)$ 6,989,144  $7,023,757  $6,546,530  $6,486,732 
            
Tangible common equity to tangible assets calculations:           
Total shareholders' equity to total assets 11.90%  11.94%  12.32%  12.11%
Less: impact of goodwill and core deposit intangible assets, net (1.41)%  (1.41)%  (1.52)%  (1.54)%
Tangible common equity to tangible assets (non-GAAP) 10.49%  10.53%  10.80%  10.57%
            
Tangible common book value per share calculations:           
Tangible common equity (non-GAAP)$ 732,869  $739,495  $707,271  $685,413 
Divided by: ending shares outstanding  30,288,131   30,800,985   30,634,291   30,594,412 
Tangible common book value per share (non-GAAP)$ 24.20  $24.01  $23.09  $22.40 
            
Tangible common book value per share, excluding accumulated other comprehensive income calculations:           
Tangible common equity (non-GAAP)$ 732,869  $739,495  $707,271  $685,413 
Accumulated other comprehensive loss (income), net of tax  1,397   (1,695)  (9,766)  (11,080)
Tangible common book value, excluding accumulated other comprehensive loss (income), net of tax (non-GAAP)  734,266   737,800   697,505   674,333 
Divided by: ending shares outstanding  30,288,131   30,800,985   30,634,291   30,594,412 
Tangible common book value per share, excluding accumulated other comprehensive loss (income), net of tax (non-GAAP)$ 24.24  $23.95  $22.77  $22.04 
                


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 nine months ended
  September 30,  June 30, September 30, September 30,  September 30,
  2021
 2021
 2020
 2021
 2020
Net income $ 19,825  $24,200  $27,893  $ 70,837  $61,422 
Add: impact of core deposit intangible amortization expense, after tax   227   228   226    682   680 
Net income adjusted for impact of core deposit intangible amortization expense, after tax $ 20,052  $24,428  $28,119  $ 71,519  $62,102 
                
Average assets $ 7,116,141  $7,056,894  $6,483,016  $ 6,977,494  $6,222,442 
Less: average goodwill and core deposit intangible asset, net of deferred tax liability related to goodwill   (112,026)  (112,552)  (114,122)   (112,320)  (114,406)
Average tangible assets (non-GAAP) $ 7,004,115  $6,944,342  $6,368,894  $ 6,865,174  $6,108,036 
                
Average shareholders' equity $ 859,245  $843,116  $792,358  $ 845,776  $779,491 
Less: average goodwill and core deposit intangible asset, net of deferred tax liability related to goodwill   (112,026)  (112,552)  (114,122)   (112,320)  (114,406)
Average tangible common equity (non-GAAP) $ 747,219  $730,564  $678,236  $ 733,456  $665,085 
                
Return on average assets  1.11%  1.38%  1.71%  1.36%  1.32%
Return on average tangible assets (non-GAAP)  1.14%  1.41%  1.76%  1.39%  1.36%
Return on average equity  9.15%  11.51%  14.00%  11.20%  10.53%
Return on average tangible common equity (non-GAAP)  10.65%  13.41%  16.49%  13.04%  12.47%
                     


Fully Taxable Equivalent Yield on Earning Assets and Net Interest Margin
                
  As of and for the three months ended As of and for the nine months ended
  September 30,  June 30, September 30, September 30,  September 30,
  2021
 2021
 2020
 2021
 2020
Interest income $ 50,801  $48,450  $52,302     $ 148,464  $164,714 
Add: impact of taxable equivalent adjustment   1,315   1,279   1,275    3,862   3,843 
Interest income FTE (non-GAAP) $ 52,116  $49,729  $53,577  $ 152,326  $168,557 
                
Net interest income $ 47,569  $44,868  $46,715  $ 137,658  $144,390 
Add: impact of taxable equivalent adjustment   1,315   1,279   1,275    3,862   3,843 
Net interest income FTE (non-GAAP) $ 48,884  $46,147  $47,990  $ 141,520  $148,233 
                
Average earning assets $ 6,624,047  $6,561,588  $5,944,790  $ 6,475,934  $5,690,884 
Yield on earning assets  3.04%  2.96%  3.50%  3.07%  3.87%
Yield on earning assets FTE (non-GAAP)  3.12%  3.04%  3.59%  3.14%  3.96%
Net interest margin  2.85%  2.74%  3.13%  2.84%  3.39%
Net interest margin FTE (non-GAAP)  2.93%  2.82%  3.21%  2.92%  3.48%
                     


Efficiency Ratio
                
  As of and for the three months ended As of and for the nine months ended
     September 30,  June 30, September 30, September 30,  September 30,
     2021
 2021
 2020
 2021
 2020
Net interest income $ 47,569  $44,868  $46,715  $ 137,658  $144,390 
Add: impact of taxable equivalent adjustment   1,315   1,279   1,275    3,862   3,843 
Net interest income, FTE (non-GAAP) $ 48,884  $46,147  $47,990  $ 141,520  $148,233 
                
Non-interest income $ 28,522  $25,266  $44,532  $ 87,149  $106,901 
                
Non-interest expense $ 51,314  $46,343  $55,321  $ 147,325  $157,752 
Less: core deposit intangible asset amortization   (295)  (296)  (295)   (887)  (887)
Non-interest expense, adjusted for core deposit intangible asset amortization $ 51,019  $46,047  $55,026  $ 146,438  $156,865 
                
Efficiency ratio  67.05%  65.66%  60.30%  65.14%  62.42%
Efficiency ratio FTE (non-GAAP)  65.91%  64.48%  59.47%  64.04%  61.48%

Primary Logo

Related Links: 
Author:
Copyright GlobeNewswire, Inc. 2016. All rights reserved.
You can register yourself on the website to receive press releases directly via e-mail to your own e-mail account.