• Resources
  • Blog
  • Journalists
  • Log In
  • Sign Up
  • Data Privacy
  • Send a Release
Cision PR Newswire: news distribution, targeting and monitoring home
  • News
  • Products
    • Overview
    • Distribution by PR Newswire
    • Cision Communications Cloud®
    • Cision IR
    • Sponsored Placement
    • All Products
  • Contact
    • General Inquiries
    • Request a Demo
    • Editorial Bureaus
    • Partnerships
    • Media Inquiries
    • Worldwide Offices

 

When typing in this field, a list of search results will appear and be automatically updated as you type.

Searching for your content...

No results found. Please change your search terms and try again.
  • News in Focus
      • Browse News Releases

      • All News Releases
      • All Public Company
      • English-only
      • News Releases Overview

      • Multimedia Gallery

      • All Multimedia
      • All Photos
      • All Videos
      • Multimedia Gallery Overview

      • Trending Topics

      • All Trending Topics
  • Business & Money
      • Auto & Transportation

      • All Automotive & Transportation
      • Aerospace, Defense
      • Air Freight
      • Airlines & Aviation
      • Automotive
      • Maritime & Shipbuilding
      • Railroads and Intermodal Transportation
      • Supply Chain/Logistics
      • Transportation, Trucking & Railroad
      • Travel
      • Trucking and Road Transportation
      • Auto & Transportation Overview

      • View All Auto & Transportation

      • Business Technology

      • All Business Technology
      • Blockchain
      • Broadcast Tech
      • Computer & Electronics
      • Computer Hardware
      • Computer Software
      • Data Analytics
      • Electronic Commerce
      • Electronic Components
      • Electronic Design Automation
      • Financial Technology
      • High Tech Security
      • Internet Technology
      • Nanotechnology
      • Networks
      • Peripherals
      • Semiconductors
      • Business Technology Overview

      • View All Business Technology

      • Entertain­ment & Media

      • All Entertain­ment & Media
      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • Entertain­ment & Media Overview

      • View All Entertain­ment & Media

      • Financial Services & Investing

      • All Financial Services & Investing
      • Accounting News & Issues
      • Acquisitions, Mergers and Takeovers
      • Banking & Financial Services
      • Bankruptcy
      • Bond & Stock Ratings
      • Conference Call Announcements
      • Contracts
      • Cryptocurrency
      • Dividends
      • Earnings
      • Earnings Forecasts & Projections
      • Financing Agreements
      • Insurance
      • Investments Opinions
      • Joint Ventures
      • Mutual Funds
      • Private Placement
      • Real Estate
      • Restructuring & Recapitalization
      • Sales Reports
      • Shareholder Activism
      • Shareholder Meetings
      • Stock Offering
      • Stock Split
      • Venture Capital
      • Financial Services & Investing Overview

      • View All Financial Services & Investing

      • General Business

      • All General Business
      • Awards
      • Commercial Real Estate
      • Corporate Expansion
      • Earnings
      • Environmental, Social and Governance (ESG)
      • Human Resource & Workforce Management
      • Licensing
      • New Products & Services
      • Obituaries
      • Outsourcing Businesses
      • Overseas Real Estate (non-US)
      • Personnel Announcements
      • Real Estate Transactions
      • Residential Real Estate
      • Small Business Services
      • Socially Responsible Investing
      • Surveys, Polls and Research
      • Trade Show News
      • General Business Overview

      • View All General Business

  • Science & Tech
      • Consumer Technology

      • All Consumer Technology
      • Artificial Intelligence
      • Blockchain
      • Cloud Computing/Internet of Things
      • Computer Electronics
      • Computer Hardware
      • Computer Software
      • Consumer Electronics
      • Cryptocurrency
      • Data Analytics
      • Electronic Commerce
      • Electronic Gaming
      • Financial Technology
      • Mobile Entertainment
      • Multimedia & Internet
      • Peripherals
      • Social Media
      • STEM (Science, Tech, Engineering, Math)
      • Supply Chain/Logistics
      • Wireless Communications
      • Consumer Technology Overview

      • View All Consumer Technology

      • Energy & Natural Resources

      • All Energy
      • Alternative Energies
      • Chemical
      • Electrical Utilities
      • Gas
      • General Manufacturing
      • Mining
      • Mining & Metals
      • Oil & Energy
      • Oil and Gas Discoveries
      • Utilities
      • Water Utilities
      • Energy & Natural Resources Overview

      • View All Energy & Natural Resources

      • Environ­ment

      • All Environ­ment
      • Conservation & Recycling
      • Environmental Issues
      • Environmental Policy
      • Environmental Products & Services
      • Green Technology
      • Natural Disasters
      • Environ­ment Overview

      • View All Environ­ment

      • Heavy Industry & Manufacturing

      • All Heavy Industry & Manufacturing
      • Aerospace & Defense
      • Agriculture
      • Chemical
      • Construction & Building
      • General Manufacturing
      • HVAC (Heating, Ventilation and Air-Conditioning)
      • Machinery
      • Machine Tools, Metalworking and Metallurgy
      • Mining
      • Mining & Metals
      • Paper, Forest Products & Containers
      • Precious Metals
      • Textiles
      • Tobacco
      • Heavy Industry & Manufacturing Overview

      • View All Heavy Industry & Manufacturing

      • Telecomm­unications

      • All Telecomm­unications
      • Carriers and Services
      • Mobile Entertainment
      • Networks
      • Peripherals
      • Telecommunications Equipment
      • Telecommunications Industry
      • VoIP (Voice over Internet Protocol)
      • Wireless Communications
      • Telecomm­unications Overview

      • View All Telecomm­unications

  • Lifestyle & Health
      • Consumer Products & Retail

      • All Consumer Products & Retail
      • Animals & Pets
      • Beers, Wines and Spirits
      • Beverages
      • Bridal Services
      • Cannabis
      • Cosmetics and Personal Care
      • Fashion
      • Food & Beverages
      • Furniture and Furnishings
      • Home Improvement
      • Household, Consumer & Cosmetics
      • Household Products
      • Jewelry
      • Non-Alcoholic Beverages
      • Office Products
      • Organic Food
      • Product Recalls
      • Restaurants
      • Retail
      • Supermarkets
      • Toys
      • Consumer Products & Retail Overview

      • View All Consumer Products & Retail

      • Entertain­ment & Media

      • All Entertain­ment & Media
      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • Entertain­ment & Media Overview

      • View All Entertain­ment & Media

      • Health

      • All Health
      • Biometrics
      • Biotechnology
      • Clinical Trials & Medical Discoveries
      • Dentistry
      • FDA Approval
      • Fitness/Wellness
      • Health Care & Hospitals
      • Health Insurance
      • Infection Control
      • International Medical Approval
      • Medical Equipment
      • Medical Pharmaceuticals
      • Mental Health
      • Pharmaceuticals
      • Supplementary Medicine
      • Health Overview

      • View All Health

      • Sports

      • All Sports
      • General Sports
      • Outdoors, Camping & Hiking
      • Sporting Events
      • Sports Equipment & Accessories
      • Sports Overview

      • View All Sports

      • Travel

      • All Travel
      • Amusement Parks and Tourist Attractions
      • Gambling & Casinos
      • Hotels and Resorts
      • Leisure & Tourism
      • Outdoors, Camping & Hiking
      • Passenger Aviation
      • Travel Industry
      • Travel Overview

      • View All Travel

  • Policy & Public Interest
      • Policy & Public Interest

      • All Policy & Public Interest
      • Advocacy Group Opinion
      • Animal Welfare
      • Congressional & Presidential Campaigns
      • Corporate Social Responsibility
      • Domestic Policy
      • Economic News, Trends, Analysis
      • Education
      • Environmental
      • European Government
      • FDA Approval
      • Federal and State Legislation
      • Federal Executive Branch & Agency
      • Foreign Policy & International Affairs
      • Homeland Security
      • Labor & Union
      • Legal Issues
      • Natural Disasters
      • Not For Profit
      • Patent Law
      • Public Safety
      • Trade Policy
      • U.S. State Policy
      • Policy & Public Interest Overview

      • View All Policy & Public Interest

  • People & Culture
      • People & Culture

      • All People & Culture
      • Aboriginal, First Nations & Native American
      • African American
      • Asian American
      • Children
      • Diversity, Equity & Inclusion
      • Hispanic
      • Lesbian, Gay & Bisexual
      • Men's Interest
      • People with Disabilities
      • Religion
      • Senior Citizens
      • Veterans
      • Women
      • People & Culture Overview

      • View All People & Culture

      • In-Language News

      • español
      • português
      • Česko
      • Danmark
      • Deutschland
      • España
      • France
      • Italia
      • Nederland
      • Norge
      • Polska
      • Portugal
      • Россия
      • Slovensko
      • Suomi
      • Sverige
  • Overview
  • Distribution by PR Newswire
  • Cision Communications Cloud®
  • Cision IR
  • Sponsored Placement
  • All Products
  • General Inquiries
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • Media Inquiries
  • Worldwide Offices
  • PR Newswire: news distribution, targeting and monitoring
  • Send a Release
    • ALL CONTACT INFO
    • Contact Us

      888-776-0942
      from 8 AM - 10 PM ET

  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR
  • News in Focus
    • Browse All News
    • Multimedia Gallery
    • Trending Topics
  • Business & Money
    • Auto & Transportation
    • Business Technology
    • Entertain­ment & Media
    • Financial Services & Investing
    • General Business
  • Science & Tech
    • Consumer Technology
    • Energy & Natural Resources
    • Environ­ment
    • Heavy Industry & Manufacturing
    • Telecomm­unications
  • Lifestyle & Health
    • Consumer Products & Retail
    • Entertain­ment & Media
    • Health
    • Sports
    • Travel
  • Policy & Public Interest
  • People & Culture
    • People & Culture
  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR
  • Overview
  • Distribution by PR Newswire
  • Cision Communications Cloud®
  • Cision IR
  • All Products
  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR
  • General Inquiries
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • Media Inquiries
  • Worldwide Offices
  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR

National Bank Holdings Corporation Announces Third Quarter 2015 Financial Results


News provided by

National Bank Holdings Corporation

Oct 22, 2015, 04:05 ET

Share this article

Share this article


National Bank Holdings Corporation Logo
National Bank Holdings Corporation Logo

GREENWOOD VILLAGE, Colo., Oct. 22, 2015 /PRNewswire/ -- National Bank Holdings Corporation (NYSE: NBHC) reported net income of $1.6 million, or $0.05 per diluted share, for the third quarter of 2015, compared to a net loss of $1.3 million, or $0.04 per diluted share, during the second quarter of 2015, and net income of $3.3 million, or $0.08 per diluted share, during the third quarter of 2014.

In announcing these results, Chief Executive Officer Tim Laney said, "We delivered another quarter of strong loan production with originations totaling $253.7 million, progressing towards our goal of $1 billion in annual originations. We also continued our success in growing average demand deposits which grew 12.3% annualized in the quarter, before the addition of Pine River Bank Corporation ("Pine River"), reflecting the continued relationship building efforts being executed by our experienced team of bankers."

Mr. Laney added, "We remained very active in repurchasing our shares during the third quarter with the execution of a $100.0 million tender offer resulting in the repurchase of approximately 4.7 million shares. Since early 2013, we have repurchased 42.3% of our shares outstanding, at a weighted average price of $19.88. We will continue to opportunistically manage our capital through a variety of means, including supporting organic growth, mergers and acquisitions, additional share repurchases, and dividends."

Brian Lilly, Chief Financial Officer, added, "We continue to evaluate the progress of building our company by analyzing the financial results that are expected to emerge over time. We do this by excluding the impact of the non-cash FDIC indemnification asset amortization, FDIC loss-share income/expense, the large expense/income related to the workout of acquired OREO and problem loans, the impacts of the change in the warrant liability, banking center closure expense accruals, bargain purchase gain and one-time expenses from the acquisition of Pine River, and our core system conversion-related expenses, which can be seen in our non-GAAP reconciliation starting on page 16. These items negatively impacted the third quarter by a net $0.12 per diluted share. The net impact of these items may fluctuate on a quarterly basis, but is expected to decrease over time in connection with the expiration of the FDIC loss-sharing agreements over the next 15 months and the decreasing problem asset workout expenses. The additional $0.12 per diluted share would have resulted in an adjusted net income per diluted share of $0.17 for the third quarter of 2015 compared to an adjusted $0.16 for the second quarter of 2015. The adjusted return on average tangible assets was 0.52% during the third quarter. We feel that this analysis provides better clarity to the emerging profitability and the progress toward reaching our goal of 1% return on average tangible assets."

Third Quarter 2015 Highlights
(All comparisons refer to the second quarter of 2015, except as noted)

  • Total loans grew $194.6 million driven by $253.7 million of originations and the acquisition of Pine River. Excluding Pine River, total loans grew $131.7 million, or 22.4% annualized.
  • Annualized non 310-30 net charge-offs were only 0.02% of average non 310-30 loans. Non-performing loans increased $13.6 million and resulted in a non-performing loan to total loans ratio of 1.14%.
  • Successfully exited $13.1 million, or 33.1% annualized, of the remaining non-strategic loan portfolio.
  • Added a net $0.8 million to accretable yield for the acquired loans accounted for under ASC 310-30.
  • Average transaction deposits increased $43.7 million or 7.0% annualized, excluding $66.3 million from Pine River. The strong transaction deposit growth coupled with lower time deposits resulted in a two basis point lowering of the cost of deposits.
  • Net interest income totaled $38.7 million, a $0.2 million decrease from the prior quarter. The quarterly decrease was primarily driven by lower levels of higher-yielding purchased loans.
  • FDIC loss-share related non-interest income totaled a negative $5.8 million, primarily related to non-cash amortization of the FDIC indemnification asset.
  • Banking fee income totaled $6.8 million, a $0.4 million or 22.6% annualized increase from the prior quarter.
  • Non-interest expense totaled $38.7 million, decreasing $1.7 million or 4.2% from the prior quarter.
  • Repurchased 4.8 million shares during the third quarter, or 13.6% of outstanding shares. Since early 2013, 22.1 million shares have been repurchased, or 42.3% of then outstanding shares.
  • At September 30, 2015, tangible common book value per share was $18.31 before consideration of the excess accretable yield value of $1.11 per share.
  • Completed the acquisition of Pine River on August 1, 2015 for $9.5 million cash. The acquisition resulted in a $1.0 million bargain purchase gain. Assets and liabilities recorded at fair value included cash and investments of $64.2 million; loans of $64.3 million; and deposits of $130.1 million.

Third Quarter 2015 Results
(All comparisons refer to the second quarter of 2015, except as noted)

Net Interest Income
Net interest income totaled $38.7 million, a $0.2 million decrease, largely due to lower levels of higher-yielding purchased loans, which offset the benefits of total loan growth and the addition of Pine River. Average interest earning assets totaled $4.4 billion and decreased $0.1 billion primarily due to the $102.0 million share repurchase during the quarter. The fully taxable equivalent net interest margin widened by 1 basis point to 3.54% during the third quarter from 3.53%.

Loans
Total loans ended the quarter at $2.5 billion, increasing $194.6 million, driven by the organic growth of $130.3 million on the strength of loan originations and $64.3 million from the Pine River acquisition. Excluding Pine River, total loans increased $131.7 million, or 22.4% annualized. Loan originations totaled $253.7 million, a decrease of $17.7 million, or 6.5%, from the prior quarter but increased $50.4 million or 24.8% from the third quarter of 2014. Strategic loans totaled $2.4 billion at September 30, 2015 and grew $207.7 million during the quarter, or 37.9% annualized. Included in strategic loans outstanding are $2.1 billion in originated balances, which increased $172.3 million, or 36.0% annualized, over the prior quarter. Consistent with the strategy of exiting the non-strategic loan portfolio, balances of non-strategic relationships totaled $143.3 million at September 30, 2015, decreasing $13.1 million during the quarter, or 33.1% annualized. Strategic loans include all originated loans in addition to those acquired loans inside our operating markets that meet our credit risk profile. Identification as strategic for acquired loans was made at the time of acquisition. Criteria utilized in the designation of an acquired loan as "strategic" include (a) geography, (b) total relationship with borrower and (c) credit metrics commensurate with our underwriting standards.

Energy sector loan balances totaled $147.5 million at September 30, 2015, representing 5.8% of total loans and 3.4% of earning assets and increased from $144.2 million, or 2.3% from prior quarter. Existing clients reduced borrowings $6.8 million or 4.7%, while the Bank originated a new relationship with a strong company in the midstream sector. Of the $147.5 million energy sector loans, $116.0 million or 78.7% related to the midstream and E&P sectors and $31.5 million or 21.3% related to energy services.

Asset Quality and Provision for Loan Losses
Purchased loans accounted for under 310-30 totaled $220.9 million at September 30, 2015 and decreased $20.4 million during the third quarter, an annualized decrease of 33.5%, reflecting workout efforts on these purchased loans. The quarterly fair value re-measurement on the 310-30 loans resulted in a favorable net transfer of $0.8 million from non-accretable difference to accretable yield, which will be recognized over the lives of the 310-30 pools, as well as a $0.1 million impairment on several small loan pools. This increased the life-to-date economic benefit of the accretable yield transfers net of impairments on 310-30 loans to $201.1 million.

Non 310-30 loans totaled $2.3 billion and represented 91.2% of total loans at September 30, 2015. These loans are comprised of originated loans of $2.1 billion and acquired loans not accounted for under 310-30 of $228.7 million. Net charge-offs within the non 310-30 portfolio remained low at 0.02% annualized. Non-performing non 310-30 loans (comprised of non-accrual loans and non-accrual troubled debt restructurings) represented 1.24% of total non 310-30 loans, compared to 0.72% at June 30, 2015. The increase was primarily due to one energy services loan and one commercial loan totaling $13.6 million in outstandings that moved to non-accrual in the quarter. A provision for loan losses on the non 310-30 portfolio of $3.6 million was recorded during the third quarter of 2015, which was $1.7 million higher than the prior quarter and brought the allowance for loan losses on non 310-30 loans to 1.0% before consideration of $6.0 million of remaining purchase accounting discounts. The increase in provision was driven by loan growth and specific reserves for the previously mentioned non-accrual loans.

The energy services portfolio totaled $31.5 million or 1.4% of non 310-30 loans, down 29.6% from December 31, 2014, and includes $12.1 million of non-accrual credits with a specific allowance as of September 30, 2015 of $1.0 million.

OREO ended the quarter at $19.0 million, decreasing $1.3 million. Gains on sales of OREO were $0.2 million during the third quarter compared to $0.6 million in the previous quarter. Of the $19.0 million of OREO at September 30, 2015, $11.4 million, or 60.0%, were covered by loss-sharing agreements with the FDIC.

Deposits
Transaction deposits (defined as total deposits less time deposits) and client repurchase agreements averaged $2.8 billion during the third quarter, increasing $53.0 million, or 7.7% annualized. Total average deposits and average client repurchase agreements remained consistent in the third quarter at $4.0 billion, as the reduction in a temporary client repurchase agreement was offset by the addition of Pine River. Average total demand deposits, excluding the addition of Pine River, increased $23.6 million, or 12.3% annualized, during the third quarter, primarily driven by our continued relationship building efforts being executed by our experienced team of bankers. Higher-cost average time deposits, excluding the effect of Pine River, declined $48.6 million or 14.9% annualized. The average cost of total deposits decreased two basis points to 0.35% compared to the prior quarter, benefiting from the growth in the lower cost deposit categories and a decrease in higher-cost time deposits. The balance sheet continues to be strongly funded by client deposits and client repurchase agreements and at September 30, 2015 these client funds comprised 97.1% of total liabilities.

Non-Interest Income
Banking related non-interest income (excludes FDIC-related non-interest income, bargain purchase gain, gain on previously charged-off acquired loans and OREO related income) totaled $8.3 million during the third quarter of 2015, a decrease of $0.4 million or 4.4%. Service charges and bank card fees increased $0.4 million or 5.7%, and gain on sale of mortgages increased $0.1 million or 15.0% during the third quarter. These increases were offset by a linked quarter decrease in mark-to-market adjustments of $0.9 million related to fair value interest rate swaps on fixed-rate term loans. The third quarter also included a $1.0 million bargain purchase gain from the acquisition of Pine River.

FDIC loss-share related non-interest income totaled a negative $5.8 million for the third quarter compared to a negative $6.1 million during the prior quarter. The increase was driven by a $1.5 million decrease in FDIC indemnification asset amortization partially offset by $1.1 million lower FDIC expense reimbursements. As of September 30, 2015, the FDIC indemnification asset was $18.2 million.

"We continue to have success in our workout efforts regarding our purchased troubled loan portfolio and related OREO assets," said Brian Lilly. "While this means higher returns on the covered loans, it also means we have to share the gains with the FDIC and as a result, we have lower expected reimbursements from the FDIC. This translates into additional non-cash write-downs of the FDIC indemnification asset receivable. In the third quarter, we wrote-down this receivable $5.8 million, or $0.11 per diluted share. While we expect that the FDIC loss-share related non-interest income will continue to fluctuate and be a reflection of our workout efforts, our current expectation is that the non-cash write-down of the FDIC indemnification asset receivable will be approximately $5.0 million, or $0.09 per diluted share, for the remainder of 2015. We continue to discuss with the FDIC a potential early termination of the loss sharing agreements."

Non-Interest Expense
Total non-interest expense was $38.7 million during the third quarter of 2015, decreasing $1.7 million. The decrease was driven by $0.7 million in lower salaries and benefits expenses due to lower health care costs realized from our self-insured health plan coupled with lower incentive accruals. OREO and problem loan expenses totaled $1.6 million and increased $0.5 million from the prior quarter. The increase was primarily due to higher problem loan expenses of $0.4 million. OREO and problem loan expenses are expected to continue to fluctuate quarterly as the acquired problem asset portfolio is resolved. Warrant liability fair value adjustments totaled $0.5 million during the third quarter, decreasing $1.0 million from prior quarter due to the change in our share price. The second quarter included $1.1 million of banking center closure related expenses, while the third quarter included one-time costs of $1.2 million from the core system conversion-related expenses and Pine River acquisition-related costs.  

Operating expenses totaled $36.4 million and decreased $1.1 million due to lower salaries and benefits. Operating expenses exclude OREO expenses, problem loan expense, the impact from the change in the warrant liability, core system conversion-related expenses, acquisition-related one-time expenses, and banking center closure expense accruals.

Income tax benefit totaled $1.6 million during the third quarter due to quarterly tax-exempt income of $2.7 million as well as the non-taxable Pine River $1.0 million bargain purchase gain and $0.5 million warrant fair value adjustment which reduced our quarterly tax liability.

Capital
Capital ratios continue to be strong and well in excess of federal bank regulatory agency "well capitalized" thresholds.  Shareholders' equity totaled $621.2 million at September 30, 2015 and decreased $97.1 million from the prior quarter. The decrease was due to the repurchase of 4.8 million shares for $102.0 million, offset by a $4.3 million increase in accumulated other comprehensive income, net of tax, which was driven by the fair market value fluctuations of the available-for-sale investment securities portfolio. The shares repurchased represented a 13.6% reduction in shares outstanding during the quarter, which brings the cumulative shares repurchased since early 2013 to 42.3% of the shares then outstanding.

Tangible common book value per share at September 30, 2015 was $18.31, compared to $18.58 at June 30, 2015, and the tangible common equity to tangible assets ratio decreased to 11.76% at September 30, 2015 from 13.83% at June 30, 2015. Decreases in these ratios were primarily driven by shares repurchased during the quarter. The leverage ratio at September 30, 2015 for the consolidated company and the Bank was 11.50% and 10.87%, respectively.

A common convention in the industry is to add the value of the accretable yield to the tangible book value per share.  The value of the September 30, 2015 accretable yield balance on the 310-30 loans of $93.0 million would add $1.87 after-tax to the tangible book value per share. A more conservative methodology, that management uses, values the excess yield and then considers the timing of the accreted interest income recognition. Under this more conservative methodology, we first net the accretable yield on 310-30 loans and the amortization of the FDIC indemnification asset and then calculate the excess above a 4.0% yield (an approximate yield on new loan originations), and finally discount the amounts at 5%. The result would add $1.11 after-tax to our tangible book value per share as of September 30, 2015.

Year-Over-Year Review
(All comparisons refer to the first nine months of 2014)

Net income for the first nine months of 2015 was $1.5 million, or $0.04 per diluted share, compared to net income of $6.9 million for the first nine months of 2014, or $0.16 per diluted share. Net interest income totaled $117.0 million and decreased $10.7 million, or 8.4%, from the first nine months of 2014, largely due to lower levels of higher-yielding purchased loans. Average interest earning assets remained relatively stable as increases in the originated loan portfolio offset a reduction in the investment portfolio and non-strategic purchased loans. The continued resolution of the higher-yielding acquired non-strategic loan portfolio led to a 29 basis point narrowing of the fully taxable equivalent net interest margin to 3.55% from 3.84%.

Loan balances as of September 30, 2015 totaled $2.5 billion and increased $351.8 million, or 16.2%, since September 30, 2014. Strategic loans increased $459.6 million since September 30, 2014, a 23.9% increase, on the strength of $911.0 million in loan originations between the two periods. The strong loan originations were the result of continued market penetration and the success of specialty lending groups. Non-strategic loans declined $107.8 million from a year ago, a 42.9% decrease, as a result of the continued workout progress on exiting acquired problem loans.

Average transaction deposits and client repurchase agreements totaled $2.7 billion during the first nine months of 2015 and increased $229.9 million, or 9.2% from the same period in 2014, and were led by a $122.0 million increase in average client repurchase agreements and a $76.2 million, or 11.0%, increase in average demand deposits as a result of our strategic focus on relationship banking. Total deposits and client repurchase agreements averaged $4.0 billion during the first nine months of 2015, increasing $93.5 million, or 2.4%, from the first nine months of the prior year. The increase was due to the aforementioned increases in client repurchase agreements and demand deposits, offset by lower time deposits of $136.4 million. The mix of transaction deposits to total deposits improved to 67.6% at September 30, 2015 from 63.2% at September 30, 2014. Additionally, the cost of total deposits improved to 0.36% for the first nine months of 2015 versus 0.37% for the first nine months of 2014.

Provision for loan losses expense was $7.0 million compared to $4.9 million during the first nine months of 2014, an increase of $2.1 million as a result of increased loan originations and specific reserves for non-accrual loans. The non 310-30 allowance was 1.00% of total non 310-30 loans compared to 0.85% in the prior year. Net charge-offs on non 310-30 loans remained low at only 0.05% during the first nine months of 2015 compared to 0.06% during the same period of 2014.

Non-interest income totaled $6.0 million for the first nine months of 2015 compared to $3.4 million during the same period of 2014, increasing $2.6 million primarily related to the change in FDIC-related non-interest income. Banking related non-interest income of $24.4 million during the first nine months of 2015 was up $2.1 million, or 9.2%, compared to the same period last year as a result of increases in bank card fees, gain on sale of mortgages and other non-interest income primarily due to bank-owned life insurance income. FDIC-related non-interest income totaled a negative $20.4 million and increased $2.0 million as income from FDIC expense billings more than offset the increased FDIC indemnification asset amortization. The first nine months of 2015 included a $1.0 million bargain purchase gain from the acquisition of Pine River.

Non-interest expense totaled $115.8 million compared to $116.9 million, a decrease of $1.1 million, or 0.9%. Operating expenses decreased $2.7 million, or 2.4%, during the first nine months compared to prior year as a result of management expense initiatives, led by lower health care costs, data processing and telecommunications expenses and insurance costs. OREO and problem loan expenses declined $3.6 million and were driven by $3.2 million less OREO expenses. Expense from the change in the fair value of the warrant liability increased $2.4 million during the first nine months of 2015 compared to the first nine months of 2014 due to fluctuations of our share price. Core system conversion and acquisition-related expenses totaled $1.8 million during the first nine months of 2015. Banking center closure expense accruals totaled $1.1 million in the first nine months of 2015 due to fair value impairment charges on banking centers classified as held-for-sale.

Other
On October 19, 2015, the Company announced the termination of the operating agreement between the Bank, and its primary regulator, the Office of the Comptroller of the Currency. The operating agreement was entered into in December 2010 as part of the Bank's approval to operate as a de novo bank. The agreement required the Bank to maintain certain capital levels, placed restrictions on its ability to pay dividends and limited its ability to make certain other business decisions.

About Non-GAAP Financial Measures
Certain of the financial measures and ratios we present, including "operating expenses," "tangible assets," "return on average tangible assets," "return on average tangible common equity," "tangible common book value," "tangible common book value per share," "tangible common equity," "tangible common equity to tangible assets," "fully taxable equivalent" metrics, "adjusted net income," "adjusted basic earnings per share," "adjusted diluted earnings per share," and "adjusted return on average tangible assets," 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 are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. In particular, the items that we exclude in our adjustments are not necessarily consistent with the items that our peers may exclude from their results of operations and key financial measures and therefore may limit the comparability of similarly named financial measures and ratios. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance.

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

About National Bank Holdings Corporation
National Bank Holdings Corporation is a bank holding company created to build a leading community bank franchise delivering high quality customer service and committed to shareholder results. National Bank Holdings Corporation operates a network of 97 banking centers located in Colorado, the greater Kansas City region and Texas. Through the Company's subsidiary, NBH Bank, N.A., it operates under the following brand names: Bank Midwest in Kansas and Missouri, Community Banks of Colorado in Colorado and Hillcrest Bank in Texas. Additional information about National Bank Holdings Corporation can be found at www.nationalbankholdings.com.

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 additional factors: ability to execute our business strategy; business and economic conditions; 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 consumer spending, borrowings and savings habits; the Company's ability to identify potential candidates for, consummate, integrate and realize operating efficiencies from, acquisitions; the Company's ability to successfully convert core operating systems, at the estimated cost, without significant business interruption and to realize the anticipated benefits; 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 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, dislocations, political instability, acts of war or terrorist activities, cyberattacks or international hostilities; 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.

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,




2015


2015


2014


2015


2014


Total interest and dividend income


$

42,311


$

42,517


$

45,492


$

127,915


$

138,382


Total interest expense



3,629



3,662



3,597



10,899



10,717


Net interest income before provision for loan losses



38,682



38,855



41,895



117,016



127,665


Provision for loan losses on 310-30 loans



110



8



(191)



168



(335)


Provision for loan losses on non 310-30 loans



3,600



1,850



1,706



6,853



5,279


Net interest income after provision for loan losses



34,972



36,997



40,380



109,995



122,721


Non-interest income:

















FDIC indemnification asset amortization



(5,798)



(7,283)



(6,252)



(20,751)



(19,819)


Other FDIC loss-sharing income (expense)



(3)



1,138



(943)



325



(2,549)


Service charges



3,953



3,697



4,148



10,977



11,558


Bank card fees



2,808



2,699



2,615



8,057



7,548


Gain on sale of mortgages, net



628



546



264



1,574



674


Other non-interest income



896



1,723



836



3,785



2,557


Bargain purchase gain



1,048



—



—



1,048



—


Gain on previously charged-off acquired loans



46



39



147



143



675


OREO related write-ups and other income



183



188



799



871



2,777


Total non-interest income



3,761



2,747



1,614



6,029



3,421


Non-interest expense:

















Salaries and benefits



20,454



21,156



21,058



61,687



62,260


Occupancy and equipment



6,098



6,069



6,155



18,256



18,838


Professional fees



924



962



854



3,006



2,180


Other non-interest expense



8,735



8,144



7,973



24,990



25,639


Other real estate owned expenses



468



406



594



456



3,629


Problem loan expenses



1,115



723



1,267



2,637



3,034


Intangible asset amortization



1,359



1,336



1,336



4,031



4,008


Loss (gain) from the change in fair value of warrant liability



(476)



508



(1,256)



(358)



(2,734)


Banking center closure related expenses



—



1,089



—



1,089



—


Total non-interest expense



38,677



40,393



37,981



115,794



116,854


Income (loss) before income taxes



56



(649)



4,013



230



9,288


Income tax (benefit) expense



(1,580)



692



676



(1,311)



2,391


Net income (loss)


$

1,636


$

(1,341)


$

3,337


$

1,541


$

6,897


Income (loss) per share - basic


$

0.05


$

(0.04)


$

0.08


$

0.04


$

0.16


Income (loss) per share - diluted


$

0.05


$

(0.04)


$

0.08


$

0.04


$

0.16




















NATIONAL BANK HOLDINGS CORPORATION

Consolidated Statements of Condition (Unaudited)

(Dollars in thousands, except share and per share data)
















September 30, 2015


June 30, 2015


September 30, 2014


December 31, 2014


ASSETS













Cash and cash equivalents

$

153,156


$

242,441


$

118,659


$

256,979


Securities purchased under agreements to resell


50,000



50,000



—



—


Investment securities available-for-sale


1,244,267



1,316,829



1,553,641



1,479,214


Investment securities held-to-maturity


445,069



472,605



557,464



530,590


Non-marketable securities


27,049



27,050



21,640



27,045


Loans receivable, net


2,523,128



2,328,524



2,171,372



2,162,409


Allowance for loan losses


(23,827)



(20,241)



(16,591)



(17,613)


Loans, net


2,499,301



2,308,283



2,154,781



2,144,796


Loans held for sale


11,246



10,037



5,252



5,146


FDIC indemnification asset, net


18,155



23,215



44,413



39,082


Other real estate owned


19,034



20,367



45,885



29,120


Premises and equipment, net


104,452



102,228



108,100



106,341


Goodwill


59,630



59,630



59,630



59,630


Intangible assets, net


13,799



14,210



18,220



16,883


Other assets


142,891



130,955



125,122



124,820


Total assets

$

4,788,049


$

4,777,850


$

4,812,807


$

4,819,646


LIABILITIES AND SHAREHOLDERS' EQUITY













Liabilities:













Non-interest bearing demand deposits

$

820,269


$

777,727


$

724,186


$

732,580


Interest bearing demand deposits


408,341



389,270



369,917



386,121


Savings and money market


1,390,054



1,327,953



1,307,285



1,290,436


Total transaction deposits


2,618,664



2,494,950



2,401,388



2,409,137


Time deposits


1,255,973



1,267,539



1,396,070



1,357,051


Total deposits


3,874,637



3,762,489



3,797,458



3,766,188


Securities sold under agreements to repurchase


169,488



187,314



109,946



133,552


Federal Home Loan Bank advances


40,000



40,000



—



40,000


Other liabilities


82,731



69,781



96,441



85,331


Total liabilities


4,166,856



4,059,584



4,003,845



4,025,071


Shareholders' equity:













Common stock


513



513



512



512


Additional paid in capital


995,440



994,454



992,587



993,212


Retained earnings


36,778



36,709



40,197



40,528


Treasury stock


(420,274)



(317,854)



(226,230)



(245,516)


Accumulated other comprehensive income, net of tax


8,736



4,444



1,896



5,839


Total shareholders' equity


621,193



718,266



808,962



794,575


Total liabilities and shareholders' equity

$

4,788,049


$

4,777,850


$

4,812,807


$

4,819,646


SHARE DATA













Average basic shares outstanding


32,681,181



36,164,617



41,837,485



39,439,646


Average diluted shares outstanding


32,762,516



36,164,617



41,841,685



39,444,330


Ending shares outstanding


30,318,684



35,053,339



39,862,824



38,884,953


Common book value per share

$

20.49


$

20.49


$

20.29


$

20.43


Tangible common book value per share (1)

$

18.31


$

18.58


$

18.49


$

18.63


Tangible common book value per share, excluding accumulated other comprehensive income(1)

$

18.02


$

18.46


$

18.44


$

18.48


CAPITAL RATIOS













Average equity to average assets


13.76

%


15.24

%


17.50

%


16.75

%

Tangible common equity to tangible assets (1)


11.76

%


13.83

%


15.54

%


15.25

%

Leverage ratio


11.50

%


13.51

%


15.23

%


14.98

%



(1)

Represents a non-GAAP financial measure.  See non-GAAP reconciliation starting on page 16

NATIONAL BANK HOLDINGS CORPORATION

Loan Portfolio Update

(Dollars in thousands)


Accounting Treatment and Loss-Share Coverage Period End Loan Balances:































September 30, 2015


June 30, 2015


September 30, 2014



ASC 310-


Non 310-


Total


ASC 310-


Non 310-


Total


ASC 310-


Non 310-


Total



30 Loans


30 Loans


Loans


30 Loans


30 Loans


Loans


30 Loans


30 Loans


Loans


Commercial

$

19,226


$

999,400


$

1,018,626


$

21,417


$

895,309


$

916,726


$

37,665


$

717,507


$

755,172


Agriculture


17,908



131,119



149,027



18,486



122,468



140,954



20,071



142,801



162,872


Commercial real estate


153,546



480,709



634,255



166,481



416,885



583,366



213,871



380,445



594,316


Residential real estate


26,975



659,475



686,450



31,162



623,167



654,329



43,979



579,420



623,399


Consumer


3,237



31,533



34,770



3,749



29,400



33,149



5,007



30,606



35,613


Total

$

220,892


$

2,302,236


$

2,523,128


$

241,295


$

2,087,229


$

2,328,524


$

320,593


$

1,850,779


$

2,171,372


Covered

$

128,289


$

26,767


$

155,056


$

139,250


$

27,899


$

167,149


$

183,486


$

35,982


$

219,468


Non-covered


92,603



2,275,469



2,368,072



102,045



2,059,330



2,161,375



137,107



1,814,797



1,951,904


Total

$

220,892


$

2,302,236


$

2,523,128


$

241,295


$

2,087,229


$

2,328,524


$

320,593


$

1,850,779


$

2,171,372




































Strategic/Non-Strategic Period-End Loan Balances:































September 30, 2015


June 30, 2015


September 30, 2014






Non-








Non-








Non-






Strategic


strategic


Total


Strategic


strategic


Total


Strategic


strategic


Total


Commercial

$

997,676


$

20,950


$

1,018,626


$

893,604


$

23,122


$

916,726


$

707,999


$

47,173


$

755,172


Agriculture


147,311



1,716



149,027



139,226



1,728



140,954



160,851



2,021



162,872


Owner-occupied commercial real estate


186,983



12,507



199,490



164,157



17,709



181,866



144,223



19,988



164,211


Commercial real estate


342,197



92,568



434,765



305,585



95,915



401,500



273,949



156,156



430,105


Residential real estate


672,008



14,442



686,450



637,758



16,571



654,329



599,523



23,876



623,399


Consumer


33,606



1,164



34,770



31,780



1,369



33,149



33,640



1,973



35,613


Total

$

2,379,781


$

143,347


$

2,523,128


$

2,172,110


$

156,414


$

2,328,524


$

1,920,185


$

251,187


$

2,171,372


Originations:



















Third


Second


First


Fourth


Third



quarter


quarter


quarter


quarter


quarter



2015


2015


2015


2014


2014


Commercial

$

151,434


$

147,321


$

129,120


$

102,732


$

110,083


Agriculture


11,295



19,019



3,605



4,952



7,014


Owner-occupied commercial real estate


12,095



17,566



12,778



11,139



10,293


Commercial real estate


36,480



38,113



21,898



27,617



33,817


Residential real estate


36,808



44,699



33,042



31,680



35,404


Consumer


5,616



4,669



3,247



4,111



6,678


Total

$

253,728


$

271,387


$

203,690


$

182,231


$

203,289


NATIONAL BANK HOLDINGS CORPORATION

Summary of Net Interest Margin

(Dollars in thousands)




























Three months ended 


Three months ended 


Three months ended 



September 30, 2015


June 30, 2015


September 30, 2014



Average





Average


Average





Average


Average





Average



Balance


Interest


Rate


Balance


Interest


Rate


Balance


Interest


Rate


Interest earning assets:

























ASC 310-30 loans

$

230,978


$

11,262


19.50

%

$

243,694


$

11,772


19.32

%

$

341,405


$

14,368


16.83

%

Non 310-30 loans(1)(2)(3)(4)


2,193,383



22,210


4.02

%


1,987,015



20,944


4.23

%


1,767,106



19,266


4.33

%

Investment securities available-for-sale


1,286,897



5,929


1.84

%


1,367,746



6,338


1.85

%


1,614,621



7,693


1.91

%

Investment securities held-to-maturity


461,530



3,215


2.79

%


491,155



3,426


2.79

%


575,289



4,056


2.82

%

Other securities


27,059



319


4.72

%


27,049



317


4.69

%


21,649



245


4.53

%

Interest earning deposits and securities purchased under agreements to resell


223,432



198


0.35

%


360,209



270


0.30

%


133,752



95


0.28

%

Total interest earning assets(4)

$

4,423,279


$

43,133


3.87

%

$

4,476,868


$

43,067


3.86

%

$

4,453,822


$

45,723


4.07

%

Cash and due from banks


66,288








56,400








57,056







Other assets


351,071








354,758








360,532







Allowance for loan losses


(21,176)








(19,207)








(16,601)







Total assets

$

4,819,462







$

4,868,819







$

4,854,809







Interest bearing liabilities:

























Interest bearing demand, savings and money market deposits

$

1,780,799


$

1,167


0.26

%

$

1,723,429


$

1,102


0.26

%

$

1,689,692


$

1,092


0.26

%

Time deposits


1,268,476



2,257


0.71

%


1,294,908



2,349


0.73

%


1,412,916



2,471


0.69

%

Securities sold under agreements to repurchase


182,071



37


0.08

%


239,059



45


0.08

%


104,020



34


0.13

%

Federal Home Loan Bank advances


40,000



168


1.67

%


40,000



166


1.66

%


—



—


0.00

%

Total interest bearing liabilities

$

3,271,346


$

3,629


0.44

%

$

3,297,396


$

3,662


0.45

%

$

3,206,628


$

3,597


0.44

%

Demand deposits


810,895








758,288








715,198







Other liabilities


73,984








71,009








83,632







Total liabilities


4,156,225








4,126,693








4,005,458







Shareholders' equity


663,237








742,126








849,351







Total liabilities and shareholders' equity

$

4,819,462







$

4,868,819







$

4,854,809







Net interest income




$

39,504







$

39,405







$

42,126




Interest rate spread







3.43

%







3.41

%







3.63

%

Net interest earning assets

$

1,151,933







$

1,179,472







$

1,247,194







Net interest margin(4)







3.54

%







3.53

%







3.75

%

Ratio of average interest earning assets to average interest bearing liabilities


135.21

%







135.77

%







138.89

%








(1)

Originated loans are net of deferred loan fees, less costs, which are included in interest income over the life of the loan.

(2)

Includes originated loans with average balances of $2.0 billion, $1.8 billion and $1.5 billion, and interest income of $18.3 million, $16.8 million and $15.4 million, with yields of 3.69%, 3.76% and 4.07% for the three months ended September 30, 2015, June 30, 2015 and September 30, 2014, respectively.

(3)

Non 310-30 loans include loans held-for-sale.  Average balances during the three months ended September 30, 2015, June 30, 2015 and September 30, 2014 were $9.2 million, $6.7 million and $3.8 million, and interest income was $192 thousand, $154 thousand and $81 thousand for the same periods, respectively.

(4)

Presented on a fully taxable equivalent basis using the statutory tax rate of 35%.  The tax equivalent adjustments included above are $822 thousand, $550 thousand and $231 thousand for the three months ended September 30, 2015, June 30, 2015 and September 30, 2014, respectively.

NATIONAL BANK HOLDINGS CORPORATION

Summary of Net Interest Margin

(Dollars in thousands)




















For the nine months ended September 30, 2015


For the nine months ended September 30, 2014



Average





Average


Average





Average



Balance


Interest


Rate


Balance


Interest


Rate


Interest earning assets:

















ASC 310-30 loans

$

246,951


$

35,728


19.29

%

$

384,215


$

46,646


16.19

%

Non 310-30 loans(1)(2)(3)(4)


2,033,733



62,836


4.13

%


1,627,720



53,668


4.41

%

Investment securities available-for-sale


1,367,503



19,164


1.87

%


1,698,404



24,614


1.93

%

Investment securities held-to-maturity


490,402



10,316


2.80

%


603,459



12,909


2.85

%

Other securities


27,070



963


4.74

%


25,470



904


4.73

%

Interest earning deposits and securities purchased under agreements to resell


304,037



675


0.30

%


125,095



251


0.27

%

Total interest earning assets(4)

$

4,469,696


$

129,682


3.88

%

$

4,464,363


$

138,992


4.16

%

Cash and due from banks


60,182








58,009







Other assets


357,222








374,372







Allowance for loan losses


(19,656)








(14,854)







Total assets

$

4,867,444







$

4,881,890







Interest bearing liabilities:

















Interest bearing demand, savings and money market deposits

$

1,740,976


$

3,340


0.26

%

$

1,709,382


$

3,248


0.25

%

Time deposits


1,300,832



6,934


0.71

%


1,437,209



7,377


0.69

%

Securities sold under agreements to repurchase


216,071



127


0.08

%


94,027



92


0.13

%

Federal Home Loan Bank advances


40,000



498


1.66

%


—



—


0.00

%

Total interest bearing liabilities

$

3,297,879


$

10,899


0.44

%

$

3,240,618


$

10,717


0.44

%

Demand deposits


767,755








691,529







Other liabilities


73,631








71,510







Total liabilities


4,139,265








4,003,657







Shareholders' equity


728,179








878,233







Total liabilities and shareholders' equity

$

4,867,444







$

4,881,890







Net interest income




$

118,783







$

128,275




Interest rate spread







3.44

%







3.72

%

Net interest earning assets

$

1,171,817







$

1,223,745







Net interest margin(4)







3.55

%







3.84

%

Ratio of average interest earning assets to average interest bearing liabilities


135.53

%







137.76

%








(1)

Originated loans are net of deferred loan fees, less costs, which are included in interest income over the life of the loan.

(2)

Includes originated loans with average balances of $1.8 billion and $1.3 billion, and interest income of $51.3 million and $41.0 million, with yields of 3.77% and 4.08% for the nine months ended September 30, 2015 and 2014, respectively.

(3)

Non 310-30 loans include loans held-for-sale.  Average balances during the nine months ended September 30, 2015 and 2014 were $6.3 million and $2.9 million, and interest income was $423 thousand and $184 thousand for the same periods, respectively.

(4)

Presented on a fully taxable equivalent basis using the statutory tax rate of 35%.  The tax equivalent adjustments included above are $1,767 thousand and $610 thousand for the nine months ended September 30, 2015 and 2014, respectively.

NATIONAL BANK HOLDINGS CORPORATION

(Dollars in thousands)

Allowance For Loan Losses Analysis (1):































As of and for the three months ended:



September 30, 2015


June 30, 2015


September 30, 2014



ASC








ASC








ASC









310-30


Non 310-30


Total


310-30


Non 310-30


Total


310-30


Non 310-30


Total


Beginning allowance for loan losses

$

765


$

19,476


$

20,241


$

771


$

18,102


$

18,873


$

1,098


$

14,474


$

15,572


Net charge-offs


—



(124)



(124)



(14)



(476)



(490)



—



(496)



(496)


Provision (recoupment)/expense


110



3,600



3,710



8



1,850



1,858



(191)



1,706



1,515


Ending allowance for loan losses

$

875


$

22,952


$

23,827


$

765


$

19,476


$

20,241


$

907


$

15,684


$

16,591


Ratio of annualized net charge-offs to average total loans during the period, respectively


0.00

%


0.02

%


0.02

%


0.02

%


0.10

%


0.09

%


0.00

%


0.11

%


0.09

%

Ratio of allowance for loan losses to total loans outstanding at period end, respectively


0.40

%


1.00

%


0.94

%


0.32

%


0.93

%


0.87

%


0.28

%


0.85

%


0.76

%

Ratio of allowance for loan losses to total non-performing loans at period end, respectively


0.00

%


80.13

%


83.18

%


0.00

%


129.18

%


134.25

%


0.00

%


82.83

%


87.62

%

Total loans

$

220,892


$

2,302,236


$

2,523,128


$

241,295


$

2,087,229


$

2,328,524


$

320,593


$

1,850,779


$

2,171,372


Average total loans during the period

$

230,978


$

2,184,169


$

2,415,147


$

243,694


$

1,980,296


$

2,223,990


$

341,405


$

1,763,279


$

2,104,684


Total non-performing loans

$

—


$

28,645


$

28,645


$

—


$

15,077


$

15,077


$

—


$

18,936


$

18,936


Past Due Loans (1):































September 30, 2015


June 30, 2015


September 30, 2014



ASC


Non 





ASC


Non 





ASC


Non 






 310-30


310-30





 310-30


310-30





 310-30


310-30






 Loans


Loans


Total


 Loans


Loans


Total


 Loans


Loans


Total


Loans 30-89 days past due and still accruing interest

$

2,035


$

1,561


$

3,596


$

2,206


$

2,795


$

5,001


$

30,761


$

5,452


$

36,213


Loans 90 days past due and still accruing interest


18,942



266



19,208



24,854



21



24,875



42,930



225



43,155


Non-accrual loans


—



7,288



7,288



—



9,691



9,691



—



15,272



15,272


Restructured loans on non-accrual


—



21,357



21,357



—



5,386



5,386



—



3,664



3,664


Total past due and non-accrual loans

$

20,977


$

30,472


$

51,449


$

27,060


$

17,893


$

44,953


$

73,691


$

24,613


$

98,304


Total 90 days past due and still accruing interest and non-accrual loans to total loans, respectively


8.58

%


1.26

%


1.90

%


10.30

%


0.72

%


1.72

%


13.39

%


1.04

%


2.86

%

Total non-accrual loans to total loans, respectively


0.00

%


1.24

%


1.14

%


0.00

%


0.72

%


0.65

%


0.00

%


1.02

%


0.87

%

% of total past due and non-accrual loans that carry fair value marks


100.00

%


14.21

%


49.19

%


100.00

%


17.72

%


67.25

%


100.00

%


27.68

%


81.89

%

% of total past due and non-accrual loans that are covered by FDIC loss sharing agreements, respectively


93.46

%


3.57

%


40.22

%


89.72

%


6.37

%


56.54

%


84.23

%


6.55

%


64.78

%

NATIONAL BANK HOLDINGS CORPORATION

(Dollars in thousands)


Asset Quality Data (Covered/Non-covered)(1):

































September 30, 2015


June 30, 2015


September 30, 2014




Non-








Non-








Non-










covered


Covered


Total


covered


Covered


Total


covered


Covered


Total


Non-accrual loans


$

7,231


$

57


$

7,288


$

9,582


$

109


$

9,691


$

15,124


$

147


$

15,271


Restructured loans on non-accrual



20,325



1,032



21,357



4,355



1,031



5,386



2,272



1,393



3,665


Total non-performing loans



27,556



1,089



28,645



13,937



1,140



15,077



17,396



1,540



18,936


OREO



7,607



11,427



19,034



6,971



13,395



20,366



15,753



30,132



45,885


Other repossessed assets



894



—



894



894



—



894



869



20



889


Total non-performing assets


$

36,057


$

12,516


$

48,573


$

21,802


$

14,535


$

36,337


$

34,018


$

31,692


$

65,710


Loans 90 days or more past due and still accruing interest


$

266


$

—


$

266


$

21


$

—


$

21


$

225


$

—


$

225


Accruing restructured loans(2)


$

9,324


$

1,704


$

11,028


$

13,469


$

1,743


$

15,212


$

15,758


$

9,277


$

25,035


Allowance for loan losses








$

23,827








$

20,241








$

16,591


Total non-performing loans to total non-covered, total covered, and total loans, respectively



1.16

%


0.70

%


1.14

%


0.64

%


0.68

%


0.65

%


0.89

%


0.70

%


0.87

%

Loans 90 days or more past due and still accruing interest to total non-covered loans, total covered loans, and total loans, respectively



0.01

%


0.00

%


0.01

%


0.00

%


0.00

%


0.00

%


0.01

%


0.00

%


0.01

%

Total non-performing assets to total assets









1.01

%








0.76

%








1.37

%

Allowance for loan losses to non-performing loans









83.18

%








134.25

%








87.62

%



(1)

Loans accounted for under ASC 310-30 may be considered performing, regardless of past due status, if the timing and expected cash flows on these loans can be reasonably estimated and if collection of the new carrying value is expected.

(2)

Includes restructured loans less than 90 days past due and still accruing interest.

Changes in Accretable Yield:


















For the three months ended


Life-to-date




September 30, 2015


June 30, 2015


September 30, 2014


September 30, 2015


Accretable yield at beginning of period


$

103,430


$

110,818


$

116,095


$

—


Additions through acquisitions



—



—



—



214,994


Reclassification from non-accretable difference to accretable yield



3,202



4,637



11,736



252,961


Reclassification to non-accretable difference from accretable yield



(2,355)



(253)



(355)



(27,341)


Accretion



(11,262)



(11,772)



(14,368)



(347,599)


Accretable yield at end of period


$

93,015


$

103,430


$

113,108


$

93,015


NATIONAL BANK HOLDINGS CORPORATION

Key Ratios














As of and for the


As of and for the



three months ended


nine months ended



September 30, 


June 30, 


September 30, 


September 30, 


September 30, 



2015


2015


2014


2015


2014


Key Ratios(1)











Return on average assets

0.13

%

(0.11)

%

0.27

%

0.04

%

0.19

%

Return on average tangible assets(2)

0.21

%

(0.04)

%

0.34

%

0.11

%

0.26

%

Adjusted return on average tangible assets(2)

0.52

%

0.56

%

0.66

%

0.56

%

0.64

%

Return on average equity

0.98

%

(0.72)

%

1.56

%

0.28

%

1.05

%

Return on average tangible common equity(2)

1.64

%

(0.31)

%

2.12

%

0.81

%

1.55

%

Interest earning assets to interest bearing liabilities (end of period)(3)

134.58

%

136.82

%

137.71

%

134.58

%

137.71

%

Loans to deposits ratio (end of period)

65.41

%

62.15

%

57.32

%

64.41

%

57.32

%

Non-interest bearing deposits to total deposits (end of period)

21.17

%

20.67

%

19.07

%

21.17

%

19.07

%

Net interest margin(4)

3.47

%

3.48

%

3.73

%

3.50

%

3.82

%

Net interest margin (fully taxable equivalent)(2)(4)

3.54

%

3.53

%

3.75

%

3.55

%

3.84

%

Interest rate spread(5)

3.43

%

3.41

%

3.63

%

3.44

%

3.72

%

Yield on earning assets(3)

3.79

%

3.81

%

4.05

%

3.83

%

4.14

%

Yield on earning assets (fully taxable equivalent)(2)(3)

3.87

%

3.86

%

4.07

%

3.88

%

4.16

%

Cost of interest bearing liabilities(3)

0.44

%

0.45

%

0.44

%

0.44

%

0.44

%

Cost of deposits

0.35

%

0.37

%

0.37

%

0.36

%

0.37

%

Non-interest expense to average assets

3.18

%

3.33

%

3.10

%

3.18

%

3.20

%

Efficiency ratio (fully taxable equivalent) (2)(6)

86.25

%

92.66

%

83.78

%

89.55

%

85.69

%

Adjusted efficiency ratio (fully taxable equivalent)(2)(6)

73.25

%

75.14

%

72.10

%

74.14

%

72.32

%

Asset Quality Data (7)(8)(9)











Non-performing loans to total loans

1.14

%

0.65

%

0.87

%

1.14

%

0.87

%

Covered non-performing loans to total non-performing loans

3.80

%

7.56

%

8.13

%

3.80

%

8.13

%

Non-performing assets to total assets

1.01

%

0.76

%

1.37

%

1.01

%

1.37

%

Covered non-performing assets to total non-performing assets

25.77

%

40.00

%

48.23

%

25.77

%

48.23

%

Allowance for loan losses to total loans

0.94

%

0.87

%

0.76

%

0.94

%

0.76

%

Allowance for loan losses to total non-covered loans

1.01

%

0.94

%

0.85

%

1.01

%

0.85

%

Allowance for loan losses to non-performing loans

83.18

%

134.25

%

87.62

%

83.18

%

87.62

%

Net charge-offs to average loans

0.02

%

0.09

%

0.09

%

0.05

%

0.06

%















(1)

Ratios are annualized.

(2)

Ratio represents non-GAAP financial measure.  See non-GAAP reconciliations starting on page 16.

(3)

Interest earning assets include assets that earn interest/accretion or dividends, except for the FDIC indemnification asset that may earn accretion but is not part of interest earning assets.  Any market value adjustments on investment securities are excluded from interest-earning assets. Interest bearing liabilities include liabilities that must be paid interest.

(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)

The efficiency ratio represents non-interest expense, less intangible asset amortization, as a percentage of net interest income plus non-interest income on a fully taxable equivalent basis.

(7)

Non-performing loans consist of non-accruing loans and restructured loans on non-accrual, but exclude any loans accounted for under ASC 310-30 in which the pool is still performing. These ratios may, therefore, not be comparable to similar ratios of our peers.

(8)

Non-performing assets include non-performing loans, other real estate owned and other repossessed assets.

(9)

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)


Statements of Financial Condition


















September 30, 2015


June 30, 2015


September 30, 2014


December 31, 2014


Total shareholders' equity


$

621,193


$

718,266


$

808,962


$

794,575


Less: goodwill and intangible assets, net



(73,429)



(73,840)



(77,850)



(76,513)


Add: deferred tax liability related to goodwill



7,385



6,997



5,834



6,222


Tangible common equity (non-GAAP)


$

555,149


$

651,423


$

736,946


$

724,284
















Total assets


$

4,788,049


$

4,777,850


$

4,812,807


$

4,819,646


Less: goodwill and intangible assets, net



(73,429)



(73,840)



(77,850)



(76,513)


Add: deferred tax liability related to goodwill



7,385



6,997



5,834



6,222


Tangible assets (non-GAAP)


$

4,722,005


$

4,711,007


$

4,740,791


$

4,749,355
















Tangible common equity to tangible assets calculations:














Total shareholders' equity to total assets



12.97

%


15.03

%


16.81

%


16.49

%

Less: impact of goodwill and intangible assets, net



(1.21)

%


(1.20)

%


(1.27)

%


(1.24)

%

Tangible common equity to tangible assets (non-GAAP)



11.76

%


13.83

%


15.54

%


15.25

%















Common book value per share calculations:














Total shareholders' equity


$

621,193


$

718,266


$

808,962


$

794,575


Divided by: ending shares outstanding



30,318,684



35,053,339



39,862,824



38,884,953


Common book value per share


$

20.49


$

20.49


$

20.29


$

20.43
















Tangible common book value per share calculations:














Tangible common equity (non-GAAP)


$

555,149


$

651,423


$

736,946


$

724,284


Divided by: ending shares outstanding



30,318,684



35,053,339



39,862,824



38,884,953


Tangible common book value per share (non-GAAP)


$

18.31


$

18.58


$

18.49


$

18.63
















Tangible common book value per share, excluding accumulated other comprehensive income calculations:














Tangible common equity (non-GAAP)


$

555,149


$

651,423


$

736,946


$

724,284


Less: accumulated other comprehensive income, net of tax



(8,736)



(4,444)



(1,896)



(5,839)


Tangible common book value, excluding accumulated other comprehensive income, net of tax (non-GAAP)



546,413



646,979



735,050



718,445


Divided by: ending shares outstanding



30,318,684



35,053,339



39,862,824



38,884,953


Tangible common book value per share, excluding accumulated other comprehensive income, net of tax (non-GAAP)


$

18.02


$

18.46


$

18.44


$

18.48


Return on Average Tangible Assets and Return on Average Tangible Equity





















As of and for the


As of and for the




three months ended


nine months ended




September 30, 2015


June 30, 2015


September 30, 2014


September 30, 2015


September 30, 2014


Net income (loss)


$

1,636


$

(1,341)


$

3,337


$

1,541


$

6,897


Add: impact of core deposit intangible amortization expense, after tax



829



815



815



2,459



2,445


Net income (loss) adjusted for impact of core deposit intangible amortization expense, after tax


$

2,465


$

(526)


$

4,152


$

4,000


$

9,342



















Average assets


$

4,819,462


$

4,868,820


$

4,854,809


$

4,867,444


$

4,881,890


Less: average goodwill and intangible assets, net of deferred tax asset related to goodwill



66,575



67,651



72,781



67,473



74,134


Average tangible assets (non-GAAP)


$

4,752,887


$

4,801,169


$

4,782,028


$

4,799,971


$

4,807,756



















Average shareholders' equity


$

663,237


$

742,126


$

849,351


$

728,179


$

878,233


Less: average goodwill and intangible assets, net of deferred tax asset related to goodwill



66,575



67,651



72,781



67,473



74,134


Average tangible common equity (non-GAAP)


$

596,662


$

674,475


$

776,570


$

660,706


$

804,099



















Return on average assets



0.13

%


(0.11)

%


0.27

%


0.04

%


0.19

%

Return on average tangible assets (non-GAAP)



0.21

%


(0.04)

%


0.34

%


0.11

%


0.26

%

Return on average equity



0.98

%


(0.72)

%


1.56

%


0.28

%


1.05

%

Return on average tangible common equity (non-GAAP)



1.64

%


(0.31)

%


2.12

%


0.81

%


1.55

%

Fully Taxable Equivalent Yield on Earning Assets and Net Interest Margin





















As of and for the


As of and for the




three months ended


nine months ended




September 30, 2015


June 30, 2015


September 30, 2014


September 30, 2015


September 30, 2014


Interest income


$

42,311


$

42,517


$

45,492


$

127,915


$

138,382


Add: impact of taxable equivalent adjustment



822



550



231



1,767



610


Interest income, fully taxable equivalent (non-GAAP)


$

43,133


$

43,067


$

45,723


$

129,682


$

138,992



















Net interest income


$

38,682


$

38,855


$

41,895


$

117,016


$

127,665


Add: impact of taxable equivalent adjustment



822



550



231



1,767



610


Net interest income, fully taxable equivalent (non-GAAP)


$

39,504


$

39,405


$

42,126


$

118,783


$

128,275



















Average earning assets


$

4,423,279


$

4,476,868


$

4,453,822


$

4,469,696


$

4,464,363


Yield on earning assets



3.79

%


3.81

%


4.05

%


3.83

%


4.14

%

Yield on earning assets, fully taxable equivalent (non-GAAP)



3.87

%


3.86

%


4.07

%


3.88

%


4.16

%

Net interest margin



3.47

%


3.48

%


3.73

%


3.50

%


3.82

%

Net interest margin, fully taxable equivalent (non-GAAP)



3.54

%


3.53

%


3.75

%


3.55

%


3.84

%

Adjusted Efficiency Ratio





















As of and for the


As of and for the




three months ended


nine months ended




September 30, 2015


June 30, 2015


September 30, 2014


September 30, 2015


September 30, 2014


Net interest income


$

38,682


$

38,855


$

41,895


$

117,016


$

127,665


Add: impact of taxable equivalent adjustment



822



550



231



1,767



610


Net interest income, fully taxable equivalent (non-GAAP)


$

39,504


$

39,405


$

42,126


$

118,783


$

128,275



















Non-interest income


$

3,761


$

2,747


$

1,614


$

6,029


$

3,421


FDIC indemnification asset amortization



5,798



7,283



6,252



20,751



19,819


FDIC loss sharing (income) expense



3



(1,138)



943



(325)



2,549


Gain on sale of previously charged-off acquired loans



(46)



(39)



(147)



(143)



(675)


Impact of OREO related write-ups and other income



(183)



(188)



(799)



(871)



(2,777)


Bargain purchase gain



(1,048)



—



—



(1,048)



—


Adjusted non-interest income (non-GAAP)


$

8,285


$

8,665


$

7,863


$

24,393


$

22,337



















Non-interest expense adjusted for core deposit intangible asset amortization


$

37,318


$

39,057


$

36,645


$

111,763


$

112,846


Impact of change in fair value of warrant liabilities



476



(508)



1,256



358



2,734


Other real estate owned expenses



(468)



(406)



(594)



(456)



(3,629)


Problem loan expenses



(1,115)



(723)



(1,267)



(2,637)



(3,034)


Banking center closure related expenses



—



(1,089)



—



(1,089)



—


Conversion related expenses



(659)



(212)



—



(1,235)



—


Acquisition related expenses



(547)



—



—



(547)



—


Adjusted non-interest expense (non-GAAP)


$

35,005


$

36,119


$

36,040


$

106,157


$

108,917



















Efficiency ratio



87.93

%


93.88

%


84.22

%


90.83

%


86.09

%

Efficiency ratio (fully taxable equivalent) (non-GAAP)



86.25

%


92.66

%


83.78

%


89.55

%


85.69

%

Adjusted efficiency ratio (fully taxable equivalent) (non-GAAP)



73.25

%


75.14

%


72.10

%


74.14

%


72.32

%

Adjusted Financial Results





















For the three months ended


For the nine months ended




September 30, 2015


June 30, 2015


September 30, 2014


September 30, 2015


September 30, 2014


Adjustments to diluted earnings per share:

















Income per share - diluted


$

0.05


$

(0.04)


$

0.08


$

0.04


$

0.16


Adjustments to diluted earnings per share (non-GAAP)(1)



0.12



0.20



0.09



0.46



0.32


Adjusted diluted earnings per share (non-GAAP)(1)


$

0.17


$

0.16


$

0.17


$

0.50


$

0.47


Adjustments to return on average tangible assets:

















Annualized adjustments to net income (non-GAAP)(1)


$

15,084


$

28,939


$

15,064


$

21,559


$

18,354


Divided by: average tangible assets (non-GAAP)



4,752,887



4,801,169



4,782,029



4,799,970



4,807,756


Adjustments to return on average tangible assets (non-GAAP)



0.31

%


0.60

%


0.32

%


0.45

%


0.38

%

Return on average tangible assets (non-GAAP)



0.21

%


(0.04)

%


0.34

%


0.11

%


0.26

%

Adjusted return on average tangible assets (non-GAAP)



0.52

%


0.56

%


0.66

%


0.56

%


0.64

%

Adjustments to net income:

















Net income (loss)


$

1,636


$

(1,341)


$

3,337


$

1,541


$

6,897


Adjustments to net income (non-GAAP)(1)



3,802



7,215



3,797



16,125



13,728


Adjusted net income (non-GAAP)


$

5,438


$

5,874


$

7,134


$

17,666


$

20,625



















(1)      Refer to table below for adjustments


















Adjustments

















Non-interest income adjustments:

















FDIC indemnification asset amortization


$

5,798


$

7,283


$

6,252


$

20,751


$

19,819


Other FDIC loss sharing expense (income)



3



(1,138)



943



(325)



2,549


Gain on recoveries of previously charged-off acquired loans



(46)



(39)



(147)



(143)



(675)


OREO related write-ups and other income



(183)



(188)



(799)



(871)



(2,777)


Bargain purchase gain



(1,048)



—



—



(1,048)



—


Total non-interest income adjustments (non-GAAP)


$

4,524


$

5,918


$

6,249


$

18,364


$

18,916


Non-interest expense adjustments:

















Other real estate owned expenses


$

(468)


$

(406)


$

(594)


$

(456)


$

(3,629)


Problem loan expenses



(1,115)



(723)



(1,267)



(2,637)



(3,034)


Warrant change



476



(508)



1,256



358



2,734


Banking center closure related expenses



—



(1,089)



—



(1,089)



—


Conversion related expenses



(659)



(212)



—



(1,235)



—


Acquisition related expenses



(547)



—



—



(547)



—


Total non-interest expense adjustments (non-GAAP)


$

(2,313)


$

(2,938)


$

(605)


$

(5,606)


$

(3,929)


Pre-tax adjustments



6,837



8,856



6,854



23,970



22,845


Collective tax expense impact



(3,035)



(1,641)



(3,057)



(7,845)



(9,117)


Adjustments to net income (non-GAAP)


$

3,802


$

7,215


$

3,797


$

16,125


$

13,728


Logo - http://photos.prnewswire.com/prnh/20141002/149998

SOURCE National Bank Holdings Corporation

Related Links

http://www.nationalbankholdings.com

Modal title

Contact Cision

  • Cision Distribution 888-776-0942
    from 8 AM - 9 PM ET

  • Chat with an Expert
  • General Inquiries
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • Media Inquiries
  • Worldwide Offices

Products

  • Cision Communication Cloud®
  • For Marketers
  • For Public Relations
  • For IR & Compliance
  • For Agency
  • For Small Business
  • All Products

About

  • About PR Newswire
  • About Cision
  • Become a Publishing Partner
  • Become a Channel Partner
  • Careers
  • COVID-19 Resources
  • Accessibility Statement
  • Asia
  • Brazil
  • Canada
  • Czech
  • Denmark
  • Finland
  • France
  • Germany
  • India
  • Israel
  • Italy
  • Mexico
  • Middle East
  • Netherlands
  • Norway
  • Poland
  • Portugal
  • Russia
  • Slovakia
  • Spain
  • Sweden
  • United Kingdom

My Services

  • All New Releases
  • Online Member Center
  • ProfNet

Contact Cision

Products

About

My Services
  • All News Releases
  • Online Member Center
  • ProfNet
Cision Distribution Helpline
888-776-0942
  • Terms of Use
  • Privacy Policy
  • Information Security Policy
  • Site Map
  • RSS
  • Cookie Settings
Copyright © 2022 Cision US Inc.