National Bank Holdings Corporation Announces Fourth Quarter and Record Full Year 2020 Financial Results

Thursday, 21. January 2021 22:10

DENVER, Jan. 21, 2021 (GLOBE NEWSWIRE) -- National Bank Holdings Corporation (NYSE: NBHC) reported:

  For the quarter For the quarter - adjusted(1) For the year For the year - adjusted (1)
  4Q20 3Q20 4Q19 4Q20 3Q20  4Q19 2020  2019  2020  2019 
Net income ($000's) $ 27,169  $27,893  $19,519  $ 27,329  $28,224  $19,519  $ 88,591  $80,365  $ 90,397  $81,054 
Earnings per share - diluted $ 0.87  $0.90  $0.62  $ 0.88  $0.91  $0.62  $ 2.85  $2.55  $ 2.91  $2.57 
Return on average tangible assets(2)  1.67%  1.76%  1.35%  1.68%  1.78%  1.35%  1.44%  1.42%  1.47%  1.43%
Return on average tangible common equity(2)  15.55%  16.49%  12.07%  15.64%  16.69%  12.07%  13.27%  13.07%  13.54%  13.18%

                                                      

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

In announcing these results, Chief Executive Officer Tim Laney shared, “I am pleased to announce that our solid performance during the fourth quarter contributed to record full year earnings of $2.85 per share. In the face of the pandemic, my teammates came together to serve our clients and communities while also taking care of each other. An intense focus on the safety and soundness of the Bank resulted in full-year net charge-offs of just six basis points. The diversity and granularity of our loan portfolio continues to produce desirable results. Further, we built on our relationship banking model to grow our low cost transaction deposits 28.8% in the fourth quarter, compared to the same period in the prior year.”

Mr. Laney added, “We are proud to have been recognized in Fortune’s 100 Fastest Growing Companies in 2020 and among the top public companies for shareholder value creation. With a strong Common Equity Tier 1 ratio of 14.70% coupled with a sizable liquidity position, we believe we are well positioned for growth in 2021. We will continue to execute our disciplined approach to pursuing growth opportunities while maintaining an intense focus on expense management as we prudently navigate the current economic challenges side-by-side with our clients and our communities.”

Fourth Quarter 2020 Results
(All comparisons refer to the third quarter of 2020, except as noted)

Net income totaled $27.2 million during the fourth quarter of 2020, or $0.87 per diluted share, compared to $27.9 million, or $0.90 per diluted share, during the third quarter of 2020. Adjusting for banking center consolidation-related expenses, net income totaled $27.3 million, or $0.88 per diluted share, compared to $28.2 million, or $0.91 per diluted share, during the third quarter of 2020. The return on average tangible assets was 1.67%, compared to 1.76% in the prior quarter, and the return on average tangible common equity was 15.55%, compared to 16.49%, in the prior quarter.

Net Interest Income
Fully taxable equivalent net interest income totaled $49.8 million, increasing $1.8 million, driven by an increase in PPP-related income from PPP loan forgiveness. PPP loan fees were $5.2 million in the fourth quarter of 2020, compared to $1.5 million in the prior quarter. As of December 31, 2020, the remaining unamortized PPP loan fees totaled $3.4 million. The fully taxable equivalent net interest margin was 3.24%, widening three basis points from the prior quarter. The yield on earning assets decreased four basis points largely due to the remix of assets into lower-yielding cash balances, partially offset by accelerated loan fee income from PPP loan forgiveness. Our cost of funds decreased by seven basis points to 0.33%.

Loans
Total loans ended the quarter at $4.4 billion, decreasing $202.4 million, of which $172.2 million was related to PPP loans forgiven during the quarter. Excluding PPP loans, total loans decreased by $30.2 million, or 2.9% annualized. During the quarter, we continued our careful approach to extending new credit as well as continuing an intense focus on managing credit risk and yield. Fourth quarter loan originations totaled $272.5 million, which were $140.0 million higher than the third quarter 2020 and $2.9 million higher than last year’s fourth quarter. We continue to maintain a granular and well diversified loan portfolio with self-imposed concentration limits. In light of the strain placed on industries by the COVID-19 pandemic, we have carefully evaluated and continue to closely monitor our entire loan portfolio. We have highlighted our current highly impacted industries and COVID-19 related loan modifications within the accompanying Supplemental Disclosure.

Asset Quality and Provision for Loan Losses
No provision for loan losses was recorded during the fourth quarter under the CECL model due to the impact of the model’s underlying economic forecast, qualitative factors and a low level of charge-offs. Annualized net charge-offs totaled 0.11% of total loans, compared to 0.04% in the prior quarter. Non-performing loans (comprised of non-accrual loans and non-accrual TDRs) totaled 0.47% of total loans, compared to 0.41% at September 30, 2020. The allowance for credit losses as a percentage of total loans increased three basis points to 1.37% at December 31, 2020. Excluding PPP loans, non-performing loans totaled 0.49% of total loans, and the allowance for credit losses as a percentage of totals loans totaled 1.43% at December 31, 2020.

Deposits
Average transaction deposits (defined as total deposits less time deposits) increased $172.1 million, or 15.3% annualized, and average total deposits increased $141.4 million, or 10.2% annualized, to $5.7 billion as of December 31, 2020. The mix of transaction deposits to total deposits improved 91 basis points to 82.6% at December 31, 2020. The loan to deposit ratio totaled 76.7% at December 31, 2020, compared to 81.1% at September 30, 2020.

The cost of transaction deposits decreased three basis points from the prior quarter to 0.15%. The cost of total deposits decreased seven basis points from the prior quarter to 0.33%.

Non-Interest Income
Non-interest income totaled $33.4 million during the fourth quarter, representing a decrease of $11.2 million, or 25.1%, entirely due to seasonal decreases in mortgage banking income. Service charges and bank card fees increased a combined $0.5 million, and OREO-related income increased $0.2 million.

Non-Interest Expense
Non-interest expense totaled $48.4 million during the fourth quarter, representing a decrease of $6.9 million largely due to lower mortgage banking performance-related compensation. The fully taxable equivalent efficiency ratio improved 160 basis points to 57.9% at December 31, 2020, compared to 59.5% at September 30, 2020. Adjusting for banking center consolidation-related expense, the fully taxable equivalent efficiency ratio improved to 57.6% at December 31, 2020.

Income tax expense totaled $6.3 million during the fourth quarter, compared to $6.8 million during the prior quarter. The effective tax rate was 18.9% and 19.7% for the fourth and third quarters, respectively.

Capital
Capital ratios continue to be strong and in excess of federal bank regulatory agency “well capitalized” thresholds. The Tier 1 leverage ratio at December 31, 2020 for the consolidated company and NBH Bank was 10.70% and 9.23%, respectively. Shareholders’ equity totaled $820.7 million at December 31, 2020 and increased $21.3 million from the prior quarter due to higher retained earnings.

Common book value per share increased $0.66 to $26.79 at December 31, 2020. The quarter’s earnings, net of dividends paid, increased the tangible common book value per share by $0.69 to $23.09 at December 31, 2020. Excluding accumulated other comprehensive income, the tangible book value per share increased $0.73 to $22.77 at December 31, 2020.

Recent Events
The COVID-19 pandemic has caused substantial disruption to the communities we serve and has changed the way we live and work.  We continue to remain committed to ensuring our associates, clients and communities are receiving the support they need during these challenging times. Our banking centers remain operational through our drive-thru services and on an appointment-only basis in the lobbies. We have continued to leverage our digital banking platform with our clients. 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 the initial release of the vaccine is promising, the length of time that the government-mandated measures must remain in place to address COVID-19 is unknown. The pandemic has already had a significantly negative impact to the U.S. labor market, consumer spending and business operations, and it is not clear how quickly the vaccine can be widely deployed and when government-mandated measures will be removed.

Year-Over-Year Review
(All comparisons refer to the full year 2019, except as noted)

Net income totaled a record $88.6 million during 2020, or $2.85 per diluted share, an increase of $8.2 million, or 10.2%. Adjusting for banking center consolidation-related expenses, net income totaled $90.4 million, or $2.91 per diluted share, an increase of $9.3 million, or 11.5%. The return on average tangible assets was 1.44%, compared to 1.42% in the prior year, and the return on average tangible common equity was 13.27%, compared to 13.07%, in the prior year. The adjusted return on average tangible assets was 1.47%, compared to 1.43% in the prior year, and the adjusted return on average tangible common equity was 13.54%, compared to 13.18% during the prior year.

Fully taxable equivalent net interest income totaled $198.0 million, decreasing $12.8 million, or 6.1%, driven by declines in short-term interest rates as a result of monetary policy actions by the Federal Reserve. Average earning assets increased $427.8 million, or 8.0%, primarily driven by average loan growth of $255.7 million, including average PPP loan growth of $225.9 million, and average increases in interest-bearing cash balances of $182.8 million. These increases were partially offset by a decrease in average investment securities of $81.6 million. The fully taxable equivalent net interest margin narrowed 51 basis points to 3.42% due to lower earning asset yields. The yield on earning assets decreased 76 basis points, led by a 73 basis point decrease in the originated loan portfolio yields that resulted from a decline in short-term interest rates as a result of monetary policy actions by the Federal Reserve. The cost of deposits decreased 19 basis points to 0.45%.

Loans outstanding totaled $4.4 billion, decreasing $61.7 million, or 1.4%, from the prior year, largely due to lower commercial and industrial loans of $140.9 million, or 10.0%, that were offset by PPP loans of $176.1 million. New loan originations over the trailing 12 months totaled $1.2 billion, led by commercial loan originations of $807.3 million, which included PPP loan originations of $358.9 million.

Average non-interest bearing demand deposits increased $338.9 million, or 29.2%. Average transaction deposits increased $642.8 million, or 17.9%, and average total deposits increased $606.4 million, or 13.0%, to $5.3 billion as of December 31, 2020. Spot transaction deposits increased $1.0 billion to $4.7 billion at December 31, 2020, improving the mix of transaction deposits to total deposits by 490 basis points to 82.6% at December 31, 2020. The mix of non-interest bearing demand deposits to total deposits improved to 37.2% from 25.0% at December 31, 2019.

A CECL model driven provision for loan losses of $17.6 million was recorded during 2020, including a $0.1 million provision for unfunded loan commitment reserves, to provide coverage for the impact of deteriorating economic conditions as a result of COVID-19. Net charge-offs on loans totaled 0.06% of total loans, compared to 0.19% in the prior year. Non-performing loans to total loans decreased two basis points to 0.47%, compared to 0.49% at December 31, 2019. The allowance for credit losses totaled 1.37% of total loans, compared to 0.88% at December 31, 2019 and included a CECL adoption Day 1 increase of $5.8 million. Excluding PPP loans, the allowance for credit losses as a percentage of total loans increased to 1.43% at December 31, 2020.

Non-interest income totaled $140.3 million, representing an increase of $57.5 million, or 69.5%, driven by an increase in mortgage banking income. Service charges and bank card fees decreased a combined $2.1 million and were impacted by changes in consumer behavior due to COVID-19.

Non-interest expense totaled $206.2 million, representing an increase of $25.4 million, or 14.1%, largely due to higher mortgage banking performance-related compensation. Banking center consolidation-related expense totaled $2.3 million, compared to $0.9 million during the prior year. The consolidations of 12 banking centers were announced in the second quarter of 2020 and were substantially complete at December 31, 2020. Other non-interest expense decreased by $1.4 million largely due to decreases in travel as well as marketing and development expenses. Additionally, included in the prior period were net gains on the sale of OREO of $7.2 million, compared to minimal net gains on the sale of OREO recorded in 2020.

Income tax expense totaled $20.8 million, compared to $15.8 million during 2019. Included in income tax expense was $2.2 million of benefit during 2019 from stock compensation activity. The effective tax rate for 2020 was 19.0%, compared to 18.7% in the prior year, adjusting for stock compensation activity. The lower rate compared to the statutory rate reflects the continued success of our tax strategies and tax exempt income.

Conference Call
Management will host a conference call to review the results at 11:00 a.m. Eastern Time on Friday, January 22, 2021. Interested parties may listen to this call by dialing (877) 272-6762 / (615) 800-6832 (International) using the Conference ID of 4472264 and asking for the NBHC Fourth Quarter Earnings conference call. A telephonic replay of the call will be available beginning approximately four hours after the call’s completion through February 4, 2021, by dialing (855) 859-2056 (United States) / (404) 537-3406 (International) using the Conference ID of 4472264. 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,” “adjusted efficiency ratio,” “adjusted non-interest expense,” “adjusted non-interest expense to average assets,” “adjusted net income,” “adjusted earnings per share - diluted,” “adjusted return on average tangible assets,” “adjusted return on average tangible common equity,” and “fully taxable equivalent” metrics, are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP). We refer to these financial measures and ratios as “non-GAAP financial measures.” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on a fully taxable equivalent basis. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

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

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

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 89 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 a prolonged government shutdown; economic, market, operational, liquidity, credit and interest rate risks associated with the Company’s business; effects of any changes in trade, monetary and fiscal policies and laws; changes imposed by regulatory agencies to increase capital standards; effects of inflation, as well as, interest rate, securities market and monetary supply fluctuations; changes in the economy or supply-demand imbalances affecting local real estate values; changes in consumer spending, borrowings and savings habits; 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 loan reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; widespread natural and other disasters, pandemics, dislocations, political instability, acts of war or terrorist activities, cyberattacks or international hostilities; 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 years ended
 December 31,     September 30,     December 31,     December 31,     December 31, 
 2020  2020  2019 2020
 2019 
Total interest and dividend income$ 53,288  $52,302  $59,616 $ 218,002  $242,601 
Total interest expense  4,732   5,587   9,228   25,056   36,771 
Net interest income  48,556   46,715   50,388   192,946   205,830 
Taxable equivalent adjustment  1,260   1,275   1,290   5,103   5,065 
Net interest income FTE(1)  49,816   47,990   51,678   198,049   210,895 
Provision for loan losses    1,200   1,180   17,630   11,643 
Net interest income after provision for loan losses FTE(1)  49,816   46,790   50,498   180,419   199,252 
Non-interest income:              
Service charges  4,000   3,742   4,416   14,962   17,895 
Bank card fees  4,240   4,039   3,649   15,446   14,595 
Mortgage banking income  23,138   34,943   10,309   102,384   42,346 
Other non-interest income  1,695   1,733   1,740   7,079   7,601 
OREO-related income  284   75   168   387   315 
Total non-interest income  33,357   44,532   20,282   140,258   82,752 
Non-interest expense:              
Salaries and benefits  32,919   38,614   30,653   141,170   122,732 
Occupancy and equipment  6,619   6,878   6,908   27,473   27,336 
Professional fees  864   714   658   2,946   3,256 
Other non-interest expense  6,725   7,443   6,849   27,947   29,347 
Problem asset workout  807   1,064   736   3,148   3,186 
(Gain) loss on sale of OREO, net  (13)  (119)  7   (38)  (7,193)
Core deposit intangible asset amortization  296   295   296   1,183   1,183 
Banking center consolidation-related expense  208   432      2,348   898 
Total non-interest expense  48,425   55,321   46,107   206,177   180,745 
               
Income before income taxes FTE(1)  34,748   36,001   24,673   114,500   101,259 
Taxable equivalent adjustment  1,260   1,275   1,290   5,103   5,065 
Income before income taxes  33,488   34,726   23,383   109,397   96,194 
Income tax expense  6,319   6,833   3,864   20,806   15,829 
Net income$ 27,169  $27,893  $19,519 $ 88,591  $80,365 
Earnings per share - basic$ 0.88  $0.91  $0.62 $ 2.87  $2.57 
Earnings per share - diluted  0.87   0.90   0.62   2.85   2.55 

                                                      

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


NATIONAL BANK HOLDINGS CORPORATION
Consolidated Statements of Financial Condition (Unaudited)
(Dollars in thousands, except share and per share data)

 December 31, 2020 September 30, 2020 December 31, 2019
ASSETS        
Cash and cash equivalents$ 605,565  $445,103  $110,190 
Investment securities available-for-sale  661,955   572,523   638,249 
Investment securities held-to-maturity  376,615   320,001   182,884 
Non-marketable securities  16,493   29,598   29,751 
Loans  4,353,726   4,556,121   4,415,406 
Allowance for credit losses  (59,777)  (60,979)  (39,064)
Loans, net  4,293,949   4,495,142   4,376,342 
Loans held for sale  247,813   273,003   117,444 
Other real estate owned  4,730   4,590   7,300 
Premises and equipment, net  106,982   108,860   112,151 
Goodwill  115,027   115,027   115,027 
Intangible assets, net  17,928   15,017   11,361 
Other assets  212,893   221,812   194,813 
Total assets$ 6,659,950  $6,600,676  $5,895,512 
LIABILITIES AND SHAREHOLDERS' EQUITY        
Liabilities:        
Non-interest bearing demand deposits$ 2,111,045  $1,533,676  $1,184,945 
Interest bearing demand deposits  514,286   976,133   738,496 
Savings and money market  2,064,769   2,079,585   1,755,538 
Total transaction deposits  4,690,100   4,589,394   3,678,979 
Time deposits  986,132   1,027,066   1,058,153 
Total deposits  5,676,232   5,616,460   4,737,132 
Securities sold under agreements to repurchase  22,897   23,904   56,935 
Federal Home Loan Bank advances       207,675 
Other liabilities  140,130   160,955   126,850 
Total liabilities  5,839,259   5,801,319   5,128,592 
Shareholders' equity:        
Common stock  515   515   515 
Additional paid in capital  1,011,362   1,010,145   1,009,223 
Retained earnings  223,175   202,238   164,082 
Treasury stock  (424,127)  (424,621)  (408,962)
Accumulated other comprehensive income, net of tax  9,766   11,080   2,062 
Total shareholders' equity  820,691   799,357   766,920 
Total liabilities and shareholders' equity$ 6,659,950  $6,600,676  $5,895,512 
SHARE DATA        
Average basic shares outstanding  30,784,896   30,756,116   31,299,989 
Average diluted shares outstanding  31,032,648   30,924,223   31,525,911 
Ending shares outstanding  30,634,291   30,594,412   31,176,627 
Common book value per share$ 26.79  $26.13  $24.60 
Tangible common book value per share(1) (non-GAAP)  23.09   22.40   20.89 
Tangible common book value per share, excluding accumulated other comprehensive income(1) (non-GAAP)  22.77   22.04   20.83 
CAPITAL RATIOS        
Average equity to average assets 12.27%  12.22%  12.91%
Tangible common equity to tangible assets(1) 10.80%  10.57%  11.27%
Tier 1 leverage ratio 10.70%  10.60%  11.04%
Common equity tier 1 risk-based capital ratio 14.70%  14.25%  13.21%
Tier 1 risk-based capital ratio 14.70%  14.25%  13.21%
Total risk-based capital ratio 15.83%  15.40%  14.08%

                                                      

(1)    Represents a non-GAAP financial measure. See non-GAAP reconciliations below.


NATIONAL BANK HOLDINGS CORPORATION
Loan Portfolio
(Dollars in thousands)

Period End Loan Balances by Type

     December 31, 2020   December 31, 2020
     vs. September 30, 2020   vs. December 31, 2019
 December 31, 2020 September 30, 2020 % Change December 31, 2019 % Change
Originated:            
Commercial:            
Commercial and industrial$ 1,248,530 $1,228,550 1.6% $1,380,248 (9.5)%
Municipal and non-profit  870,410  883,065 (1.4)%  833,707 4.4%
Owner-occupied commercial real estate  464,417  460,487 0.9%  414,477 12.0%
Food and agribusiness  205,189  210,818 (2.7)%  245,320 (16.4)%
PPP loans(1)  176,106  348,257 (49.4)%   100.0%
Total commercial  2,964,652  3,131,177 (5.3)%  2,873,752 3.2%
Commercial real estate non-owner occupied  542,642  515,415 5.3%  505,479 7.4%
Residential real estate  581,555  614,449 (5.4)%  651,656 (10.8)%
Consumer  18,581  20,196 (8.0)%  21,030 (11.6)%
Total originated  4,107,430  4,281,237 (4.1)%  4,051,917 1.4%
             
Acquired:            
Commercial:            
Commercial and industrial  22,102  23,984 (7.8)%  31,284 (29.4)%
Municipal and non-profit  381  576 (33.9)%  3,819 (90.0)%
Owner-occupied commercial real estate  51,821  55,929 (7.3)%  75,645 (31.5)%
Food and agribusiness  5,108  5,740 (11.0)%  7,807 (34.6)%
Total commercial  79,412  86,229 (7.9)%  118,555 (33.0)%
Commercial real estate non-owner occupied  89,354  101,672 (12.1)%  125,426 (28.8)%
Residential real estate  77,105  86,478 (10.8)%  118,762 (35.1)%
Consumer  425  505 (15.8)%  746 (43.0)%
Total acquired  246,296  274,884 (10.4)%  363,489 (32.2)%
   Total loans$ 4,353,726 $4,556,121 (4.4)% $4,415,406 (1.4)%

                                                      

(1)    PPP loan balances are net of fees and costs and include principal totaling $179,531 and $356,913 as of December 31, 2020 and September 30, 2020, respectively.

Originations(1)

 Fourth quarter Third quarter Second quarter First quarter Fourth quarter
 2020 2020 2020 2020 2019
Commercial:              
Commercial and industrial$ 96,625 $11,354 $(8,726) $118,999  $69,048
Municipal and non-profit  25,348  6,083  49,679   13,968   46,114
Owner occupied commercial real estate  36,085  23,758  22,078   37,372   46,965
Food and agribusiness  19,191  13,876  (10,480)  (6,787)  20,348
PPP loans   122  358,798      
Total commercial  177,249  55,193  411,349   163,552   182,475
Commercial real estate non-owner occupied  52,018  24,937  18,992   80,792   41,256
Residential real estate  41,355  49,786  29,024   46,273   43,493
Consumer  1,858  2,980  2,206   2,320   2,315
Total$ 272,480 $132,896 $461,571  $292,937  $269,539

                                                      

(1)    Originations are defined as closed end funded loans and net fundings under revolving lines of credit. Net funding under revolving lines of credit were $50,982, ($27,899), ($55,826), $48,789 and $1,756 as of the fourth quarter 2020, third quarter 2020, second quarter 2020, first quarter 2020 and fourth quarter 2019, respectively.


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

  For the three months ended  For the three months ended For the three months ended
  December 31, 2020 September 30, 2020 December 31, 2019
  Average          Average    Average          Average    Average          Average
  balance Interest rate balance Interest rate balance Interest rate
Interest earning assets:                           
Originated loans FTE(1)(2) $ 4,129,155  $ 43,200  4.16% $4,343,335  $40,973  3.75% $4,002,813  $46,466  4.61%
Acquired loans   259,233    5,715  8.77%  284,653   6,593  9.21%  377,330   7,525  7.91%
Loans held for sale   248,326    1,699  2.72%  230,390   1,683  2.91%  181,550   1,657  3.62%
Investment securities available-for-sale   574,642    2,177  1.52%  559,330   2,784  1.99%  642,297   3,413  2.13%
Investment securities held-to-maturity   369,812    1,410  1.53%  242,511   1,253  2.07%  187,274   1,257  2.68%
Other securities   18,195    212  4.66%  29,640   221  2.98%  29,681   471  6.35%
Interest earning deposits and securities purchased under agreements to resell   509,150    135  0.11%  254,931   70  0.11%  17,096   117  2.72%
Total interest earning assets FTE(2) $ 6,108,513  $ 54,548  3.55% $5,944,790  $53,577  3.59% $5,438,041  $60,906  4.44%
Cash and due from banks $ 73,768        $73,274        $76,568       
Other assets   514,053         525,324         448,596       
Allowance for credit losses   (60,844)        (60,372)        (38,746)      
Total assets $ 6,635,490        $6,483,016        $5,924,459       
Interest bearing liabilities:                           
Interest bearing demand, savings and money market deposits $ 2,746,597  $ 1,776  0.26% $2,957,604  $1,990  0.27% $2,429,417  $3,101  0.51%
Time deposits   1,008,297    2,949  1.16%  1,038,983   3,501  1.34%  1,062,511   4,464  1.67%
Securities sold under agreements to repurchase   23,410    7  0.12%  22,667   10  0.18%  57,870   149  1.02%
Federal Home Loan Bank advances       0.00%  1,141   86  29.99%  301,433   1,514  1.99%
Total interest bearing liabilities $ 3,778,304  $ 4,732  0.50% $4,020,395  $5,587  0.55% $3,851,231  $9,228  0.95%
Demand deposits $ 1,898,171        $1,515,058        $1,177,958       
Other liabilities   144,532         155,205         130,576       
Total liabilities   5,821,007         5,690,658         5,159,765       
Shareholders' equity   814,483         792,358         764,694       
Total liabilities and shareholders' equity $ 6,635,490        $6,483,016        $5,924,459       
Net interest income FTE(2)    $ 49,816       $47,990       $51,678   
Interest rate spread FTE(2)        3.05%        3.04%        3.49%
Net interest earning assets $ 2,330,209        $1,924,395        $1,586,810       
Net interest margin FTE(2)        3.24%        3.21%        3.77%
Average transaction deposits $ 4,644,768        $4,472,662        $3,607,375       
Average total deposits   5,653,065         5,511,645         4,669,886       
Ratio of average interest earning assets to average interest bearing liabilities  161.67%        147.87%        141.20%      

                                                      

(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 $1,260, $1,275 and $1,290 for the three months ended December 31, 2020, September 30, 2020 and December 31, 2019, respectively.


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

                
 For the year ended December 31, 2020 For the year ended December 31, 2019
 Average         Average Average         Average
 balance Interest rate balance Interest rate
Interest earning assets:               
Originated loans FTE(1)(2)$ 4,237,091  $ 171,592 4.05% $3,838,229  $183,502 4.78%
Acquired loans  299,901    27,909 9.31%  443,025   35,992 8.12%
Loans held for sale  185,182    5,628 3.04%  113,183   4,407 3.89%
Investment securities available-for-sale  591,870    11,406 1.93%  713,686   15,472 2.17%
Investment securities held-to-maturity  248,006    5,099 2.06%  207,784   5,825 2.80%
Other securities  26,903    1,157 4.30%  28,060   1,770 6.31%
Interest earning deposits and securities purchased under agreements to resell  206,911    314 0.15%  24,106   698 2.90%
Total interest earning assets FTE(2)$ 5,795,864  $ 223,105 3.85% $5,368,073  $247,666 4.61%
Cash and due from banks$ 74,461       $76,788      
Other assets  511,721        430,402      
Allowance for credit losses  (55,778)       (38,142)     
Total assets$ 6,326,268       $5,837,121      
Interest bearing liabilities:               
Interest bearing demand, savings and money market deposits$ 2,730,857  $ 8,605 0.32% $2,426,963  $13,277 0.55%
Time deposits  1,038,107    15,024 1.45%  1,074,506   16,526 1.54%
Securities sold under agreements to repurchase  28,585    132 0.46%  60,445   668 1.11%
Federal Home Loan Bank advances  95,418    1,295 1.36%  269,207   6,300 2.34%
Total interest bearing liabilities$ 3,892,967  $ 25,056 0.64% $3,831,121  $36,771 0.96%
Demand deposits$ 1,497,940       $1,159,080      
Other liabilities  147,075        108,997      
Total liabilities  5,537,982        5,099,198      
Shareholders' equity  788,286        737,923      
Total liabilities and shareholders' equity$ 6,326,268       $5,837,121      
Net interest income FTE(2)   $ 198,049      $210,895  
Interest rate spread FTE(2)      3.21%       3.65%
Net interest earning assets$ 1,902,897       $1,536,952      
Net interest margin FTE(2)      3.42%       3.93%
Average transaction deposits$ 4,228,797       $3,586,043      
Average total deposits  5,266,904        4,660,549      
Ratio of average interest earning assets to average interest bearing liabilities 148.88%       140.12%     

                                                      

(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 $5,103 and $5,065 for the years ended December 31, 2020 and December 31, 2019, respectively.


NATIONAL BANK HOLDINGS CORPORATION
Allowance for Credit Losses and Asset Quality
(Dollars in thousands)

Allowance for Credit Losses Analysis

 As of and for the three months ended
 December 31, 2020 September 30, 2020 December 31, 2019
Beginning allowance for credit losses$ 60,979  $60,465  $38,710 
Charge-offs  (1,259)  (619)  (937)
Recoveries  57   133   111 
Provision    1,000   1,180 
Ending allowance for credit losses ("ACL")$ 59,777  $60,979  $39,064 
Ratio of annualized net charge-offs to average total loans during the period 0.11%  0.04%  0.07%
Ratio of annualized net charge-offs to average total loans excluding PPP loans during the period 0.11%  0.04%  0.07%
Ratio of ACL to total loans outstanding at period end 1.37%  1.34%  0.88%
Ratio of ACL to total loans outstanding excluding PPP loans at period end 1.43%  1.45%  0.88%
Ratio of ACL to total non-performing loans at period end 293.21%  322.95%  179.62%
Total loans$ 4,353,726  $4,556,121  $4,415,406 
Average total loans during the period  4,431,694   4,677,630   4,401,803 
Average total loans excluding PPP loans during the period  4,160,520   4,329,458   4,401,803 
Total non-performing loans  20,387   18,882   21,748 

Past Due and Non-accrual Loans

 December 31, 2020 September 30, 2020 December 31, 2019
Loans 30-89 days past due and still accruing interest$ 968  $6,587  $6,349 
Loans 90 days past due and still accruing interest  162   161   1,662 
Non-accrual loans  20,387   18,882   21,748 
Total past due and non-accrual loans$ 21,517  $25,630  $29,759 
Total 90 days past due and still accruing interest and non-accrual loans to total loans 0.47%  0.42%  0.53%

Asset Quality Data

 December 31, 2020 September 30, 2020 December 31, 2019
Non-performing loans$ 20,387  $18,882  $21,748 
OREO  4,730   4,590   7,300 
Other repossessed assets  17       
Total non-performing assets$ 25,134  $23,472  $29,048 
Accruing restructured loans$ 13,945  $21,786  $6,885 
Total non-performing loans to total loans 0.47%  0.41%  0.49%
Total non-performing loans to total loans excluding PPP loans 0.49%  0.45%  0.49%
Total non-performing assets to total loans and OREO 0.58%  0.51%  0.66%
Total non-performing assets to total loans and OREO excluding PPP loans 0.60%  0.56%  0.66%


NATIONAL BANK HOLDINGS CORPORATION
Key Ratios

 As of and for the three months ended  As of and for the years ended
 December 31,     September 30,     December 31,     December 31,  December 31, 
 2020     2020     2019     2020  2019 
Key Ratios(1)         
Return on average assets1.63% 1.71% 1.31% 1.40% 1.38%
Return on average tangible assets(2)1.67% 1.76% 1.35% 1.44% 1.42%
Return on average tangible assets, adjusted(2)1.68% 1.78% 1.35% 1.47% 1.43%
Return on average equity13.27% 14.00% 10.13% 11.24% 10.89%
Return on average tangible common equity(2)15.55% 16.49% 12.07% 13.27% 13.07%
Return on average tangible common equity, adjusted(2)15.64% 16.69% 12.07% 13.54% 13.18%
Loan to deposit ratio (end of period)76.70% 81.12% 93.21% 76.70% 93.21%
Non-interest bearing deposits to total deposits (end of period)37.19% 27.31% 25.01% 37.19% 25.01%
Net interest margin(4)3.16% 3.13% 3.68% 3.33% 3.83%
Net interest margin FTE(2)(4)3.24% 3.21% 3.77% 3.42% 3.93%
Interest rate spread FTE(2)(5)3.05% 3.04% 3.49% 3.21% 3.65%
Yield on earning assets(3)3.47% 3.50% 4.35% 3.76% 4.52%
Yield on earning assets FTE(2)(3)3.55% 3.59% 4.44% 3.85% 4.61%
Cost of interest bearing liabilities(3)0.50% 0.55% 0.95% 0.64% 0.96%
Cost of deposits0.33% 0.40% 0.64% 0.45% 0.64%
Non-interest income to total revenue FTE(2)40.11% 48.13% 28.19% 41.46% 28.18%
Non-interest expense to average assets2.90% 3.39% 3.09% 3.26% 3.10%
Non-interest expense to average assets, adjusted(2)2.89% 3.37% 3.09% 3.22% 3.08%
Efficiency ratio58.76% 60.30% 64.82% 61.52% 62.22%
Efficiency ratio FTE(2)57.87% 59.47% 63.66% 60.59% 61.15%
Efficiency ratio FTE, adjusted(2)57.62% 59.01% 63.66% 59.90% 60.84%
          
Total Loans Asset Quality Data(6)(7)(8)         
Non-performing loans to total loans0.47% 0.41% 0.49% 0.47% 0.49%
Non-performing loans to total loans excluding PPP loans0.49% 0.45% 0.49% 0.49% 0.49%
Non-performing assets to total loans and OREO0.58% 0.51% 0.66% 0.58% 0.66%
Non-performing assets to total loans and OREO excluding PPP loans0.60% 0.56% 0.66% 0.60% 0.66%
Allowance for credit losses to total loans1.37% 1.34% 0.88% 1.37% 0.88%
Allowance for credit losses to total loans excluding PPP loans1.43% 1.45% 0.88% 1.43% 0.88%
Allowance for credit losses to non-performing loans293.21% 322.95% 179.62% 293.21% 179.62%
Net charge-offs to average loans(1)0.11% 0.04% 0.07% 0.06% 0.19%

                                                      

(1)    Quarter-to-date 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

 December 31, 2020 September 30, 2020 December 31, 2019
Total shareholders' equity$ 820,691  $799,357  $766,920 
Less: goodwill and core deposit intangible assets, net  (122,575)  (122,871)  (123,758)
Add: deferred tax liability related to goodwill  9,155   8,927   8,241 
Tangible common equity (non-GAAP)$ 707,271  $685,413  $651,403 
         
Total assets$ 6,659,950  $6,600,676  $5,895,512 
Less: goodwill and core deposit intangible assets, net  (122,575)  (122,871)  (123,758)
Add: deferred tax liability related to goodwill  9,155   8,927   8,241 
Tangible assets (non-GAAP)$ 6,546,530  $6,486,732  $5,779,995 
         
Tangible common equity to tangible assets calculations:        
Total shareholders' equity to total assets 12.32%  12.11%  13.01%
Less: impact of goodwill and core deposit intangible assets, net (1.52)%  (1.54)%  (1.74)%
Tangible common equity to tangible assets (non-GAAP) 10.80%  10.57%  11.27%
         
Tangible common book value per share calculations:        
Tangible common equity (non-GAAP)$ 707,271  $685,413  $651,403 
Divided by: ending shares outstanding  30,634,291   30,594,412   31,176,627 
Tangible common book value per share (non-GAAP)$ 23.09  $22.40  $20.89 
         
Tangible common book value per share, excluding accumulated other comprehensive income calculations:        
Tangible common equity (non-GAAP)$ 707,271  $685,413  $651,403 
Accumulated other comprehensive income, net of tax  (9,766)  (11,080)  (2,062)
Tangible common book value, excluding accumulated other comprehensive income, net of tax (non-GAAP)  697,505   674,333   649,341 
Divided by: ending shares outstanding  30,634,291   30,594,412   31,176,627 
Tangible common book value per share, excluding accumulated other comprehensive income, net of tax (non-GAAP)$ 22.77  $22.04  $20.83 


NATIONAL BANK HOLDINGS CORPORATION
(Dollars in thousands, except share and per share data)

Return on Average Tangible Assets and Return on Average Tangible Equity

 As of and for the three months ended As of and for the years ended
 December 31,     September 30,     December 31,     December 31,     December 31, 
 2020
    2020     2019     2020    2019 
Net income$ 27,169  $27,893  $19,519  $ 88,591  $80,365 
Add: impact of core deposit intangible amortization expense, after tax  228   226   225    910   899 
Net income adjusted for impact of core deposit intangible amortization expense, after tax$ 27,397  $28,119  $19,744  $ 89,501  $81,264 
               
Average assets$ 6,635,490  $6,483,016  $5,924,459  $ 6,326,268  $5,837,121 
Less: average goodwill and core deposit intangible asset, net of deferred tax liability related to goodwill  (113,594)  (114,122)  (115,665)   (114,031)  (116,104)
Average tangible assets (non-GAAP)$ 6,521,896  $6,368,894  $5,808,794  $ 6,212,237  $5,721,017 
               
Average shareholders' equity$ 814,483  $792,358  $764,694  $ 788,286  $737,923 
Less: average goodwill and core deposit intangible asset, net of deferred tax liability related to goodwill  (113,594)  (114,122)  (115,665)   (114,031)  (116,104)
Average tangible common equity (non-GAAP)$ 700,889  $678,236  $649,029  $ 674,255  $621,819 
               
Return on average assets 1.63%  1.71%  1.31%  1.40%  1.38%
Return on average tangible assets (non-GAAP) 1.67%  1.76%  1.35%  1.44%  1.42%
Return on average equity 13.27%  14.00%  10.13%  11.24%  10.89%
Return on average tangible common equity (non-GAAP) 15.55%  16.49%  12.07%  13.27%  13.07%

Fully Taxable Equivalent Yield on Earning Assets and Net Interest Margin

 As of and for the three months ended As of and for the years ended
 December 31,  September 30,  December 31,  December 31,  December 31, 
 2020 2020 2019 2020 2019
Interest income$ 53,288     $52,302     $59,616     $ 218,002  $242,601 
Add: impact of taxable equivalent adjustment  1,260   1,275   1,290    5,103   5,065 
Interest income FTE (non-GAAP)$ 54,548  $53,577  $60,906  $ 223,105  $247,666 
               
Net interest income$ 48,556  $46,715  $50,388  $ 192,946  $205,830 
Add: impact of taxable equivalent adjustment  1,260   1,275   1,290    5,103   5,065 
Net interest income FTE (non-GAAP)$ 49,816  $47,990  $51,678  $ 198,049  $210,895 
               
Average earning assets$ 6,108,513  $5,944,790  $5,438,041  $ 5,795,864  $5,368,073 
Yield on earning assets 3.47%  3.50%  4.35%  3.76%  4.52%
Yield on earning assets FTE (non-GAAP) 3.55%  3.59%  4.44%  3.85%  4.61%
Net interest margin 3.16%  3.13%  3.68%  3.33%  3.83%
Net interest margin FTE (non-GAAP) 3.24%  3.21%  3.77%  3.42%  3.93%

Efficiency Ratio

 As of and for the three months ended As of and for the years ended
 December 31,     September 30,     December 31,     December 31,     December 31, 
 2020     2020    2019    2020     2019
Net interest income$ 48,556  $46,715  $50,388  $ 192,946  $205,830 
Add: impact of taxable equivalent adjustment  1,260   1,275   1,290    5,103   5,065 
Net interest income, FTE (non-GAAP)$ 49,816  $47,990  $51,678  $ 198,049  $210,895 
               
Non-interest income$ 33,357  $44,532  $20,282  $ 140,258  $82,752 
               
Non-interest expense$ 48,425  $55,321  $46,107  $ 206,177  $180,745 
Less: core deposit intangible asset amortization  (296)  (295)  (296)   (1,183)  (1,183)
Non-interest expense, adjusted for core deposit intangible asset amortization$ 48,129  $55,026  $45,811  $ 204,994  $179,562 
               
Non-interest expense, adjusted for core deposit intangible asset amortization$ 48,129  $55,026  $45,811  $ 204,994  $179,562 
Banking center consolidation-related expense  (208)  (432)      (2,348)  (898)
Adjusted non-interest expense (non-GAAP)$ 47,921  $54,594  $45,811  $ 202,646  $178,664 
               
Efficiency ratio 58.76%  60.30%  64.82%  61.52%  62.22%
Efficiency ratio FTE (non-GAAP) 57.87%  59.47%  63.66%  60.59%  61.15%
Adjusted efficiency ratio FTE (non-GAAP) 57.62%  59.01%  63.66%  59.90%  60.84%

Adjusted Financial Results

  As of and for the three months ended  As of and for the years ended
  December 31,  September 30,  December 31,  December 31,  December 31, 
  2020 2020 2019 2020 2019
Adjustments to net income:               
Net income $ 27,169  $27,893  $19,519  $ 88,591  $80,365 
Adjustments(1)(2)   160   331       1,806   689 
Adjusted net income (non-GAAP) $ 27,329  $28,224  $19,519  $ 90,397  $81,054 
                
Adjustments to earnings per share:               
Earnings per share - diluted $ 0.87  $0.90  $0.62  $ 2.85  $2.55 
Adjustments(1)(2)   0.01   0.01       0.06   0.02 
Adjusted earnings per share - diluted (non-GAAP) $ 0.88  $0.91  $0.62  $ 2.91  $2.57 
                
Adjustments to return on average tangible assets:               
Adjusted net income (non-GAAP) $ 27,329  $28,224  $19,519  $ 90,397  $81,054 
Add: impact of core deposit intangible amortization expense, after tax   228   226   225    910   899 
Net income adjusted for impact of core deposit intangible amortization expense, after tax   27,557   28,450   19,744    91,307   81,953 
Average tangible assets (non-GAAP)   6,521,896   6,368,894   5,808,794    6,212,237   5,721,017 
Adjusted return on average tangible assets (non-GAAP)  1.68%  1.78%  1.35%  1.47%  1.43%
                
Adjustments to return on average tangible common equity:               
Net income adjusted for impact of core deposit intangible amortization expense, after tax $ 27,557  $28,450  $19,744  $ 91,307  $81,953 
Average tangible common equity (non-GAAP)   700,889   678,236   649,029    674,255   621,819 
Adjusted return on average tangible common equity (non-GAAP)  15.64%  16.69%  12.07%  13.54%  13.18%
                
Adjustments to non-interest expense:               
Non-interest expense $ 48,425  $55,321  $46,107  $ 206,177  $180,745 
Adjustments(1)(2)   208   432       2,348   898 
Adjusted non-interest expense (non-GAAP)   48,217   54,889   46,107    203,829   179,847 
Non-interest expense to average assets, adjusted (non-GAAP)  2.89%  3.37%  3.09%  3.22%  3.08%
                
(1) Adjustments:               
Non-interest expense adjustments:               
Banking center consolidation-related expense $ 208  $432  $  $ 2,348  $898 
Tax expense impact   (48)  (101)      (542)  (209)
Adjustments (non-GAAP) $ 160  $331  $  $ 1,806  $689 

                                                      

(2)    Non-GAAP adjustments presented for the year ended December 31, 2019 have been updated to conform to the current period presentation.

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Fourth Quarter 2020 NBHC Supplemental Disclosure


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