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National Bank Holdings Corporation Announces Fourth Quarter and Full Year 2022 Financial Results

DENVER, Jan. 24, 2023 (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)
    4Q22   3Q22   4Q21   4Q22   3Q22   4Q21   2022     2021     2022     2021  
Net income ($000’s)   $ 16,721     $ 15,839     $ 22,769     $ 34,546     $ 25,349     $ 22,769     $ 71,274     $ 93,606     $ 99,577     $ 93,606  
Earnings per share – diluted   $ 0.44     $ 0.50     $ 0.74     $ 0.91     $ 0.80     $ 0.74     $ 2.18     $ 3.01     $ 3.05     $ 3.01  
Return on average tangible assets(2)     0.77%       0.87%       1.30%       1.55%       1.39%       1.30%       0.95%       1.37%       1.32%       1.37%  
Return on average tangible common equity(2)     9.17%       8.66%       12.37%       18.37%       13.76%       12.37%       9.91%       12.87%       13.75%       12.87%  
(1)   See non-GAAP reconciliations below.
(2)   Quarterly ratios are annualized.
     

In announcing these results, Chief Executive Officer Tim Laney shared, “We are pleased to deliver solid quarterly earnings of $0.91 per diluted share and a record return on average tangible common equity of 18.37%, adjusted for one-time acquisition-related expenses. We generated organic loan growth of 21.5% annualized, fueled by strong loan fundings, while maintaining strong credit quality with annual net charge-offs of just three basis points, and a low non-performing loans ratio of 0.23%. We believe our strong capital and our fortress balance sheet positions us to perform in any economic environment.”

Mr. Laney added, “I am proud of our teams’ accomplishments this year that led to delivering a record return on tangible common equity while simultaneously closing and integrating two strategically important banking enterprises. We have added great teammates in Utah, Wyoming and Idaho to the NBH family and remain very focused on delivering best-in-class banking solutions for our clients. We are well positioned to continue to serve our clients and communities in 2023.”

Fourth Quarter 2022 Results

(All comparisons refer to the third quarter of 2022, except as noted)

Net income totaled $16.7 million or $0.44 per diluted share, compared to $15.8 million or $0.50 per diluted share during the third quarter of 2022. The quarter’s results were driven by record net interest income and was impacted by non-recurring acquisition-related expenses of $23.2 million, including $16.3 million of CECL Day 1 provision expense, discussed in detail below. Fully taxable equivalent pre-provision net revenue increased $9.1 million to $43.0 million during the fourth quarter. The return on average tangible assets was 0.77% compared to 0.87% during the third quarter, and the return on average tangible common equity was 9.17% compared to 8.66%.

Adjusting for acquisition-related provision expense and non-recurring acquisition-related expenses of $23.2 million and $12.4 million during the fourth and third quarters respectively, adjusted net income totaled $34.5 million or $0.91 per diluted share compared to $25.3 million or $0.80 per diluted share. Adjusted fully taxable equivalent pre-provision net revenue increased $8.9 million to $49.8 million. The adjusted return on average tangible assets was 1.55% compared to 1.39%, and the adjusted return on average tangible common equity was 18.37% compared to 13.76%.

Net Interest Income

Fully taxable equivalent net interest income totaled a record $96.5 million during the fourth quarter of 2022, an increase of $26.0 million, or 146.4% annualized. The fully taxable equivalent net interest margin widened 38 basis points to 4.39%, and average earning assets increased $1.7 billion. The increase in average earning assets was primarily due to increases in average acquired loans of $1.5 billion and increases in average originated loans of $435.0 million. The margin expansion was driven by a 60 basis point increase in earning asset yields, as a result of several increases in the federal funds rate since September 2022, and excess cash being deployed into higher-yielding originated loans. The cost of funds totaled 0.43%, compared to 0.20% during the third quarter.

Loans

Total loans increased $1.5 billion to a record $7.2 billion at December 31, 2022 and included $1.2 billion of loans acquired through the Bank of Jackson Hole acquisition. Excluding the newly acquired Bank of Jackson Hole loans, loans increased $310.0 million or 21.5% annualized led by originated commercial loan growth of $151.1 million. We generated quarterly loan fundings totaling $497.3 million, led by commercial loan fundings of $267.5 million.

Asset Quality and Provision for Credit Losses

The Company recorded $21.9 million of provision expense, compared to $12.7 million last quarter. The quarter’s provision included $16.3 million of Day 1 allowance reserve funding for the Bank of Jackson Hole loan portfolio compared to $5.4 million of Day 1 allowance reserve funding for the Rock Canyon Bank loan portfolio during the third quarter. The remainder of the quarter’s provision expense was driven by strong loan growth and higher reserve requirements from changes in the CECL model’s underlying macro-economic forecast. Annualized net charge-offs totaled 0.04% of total loans, compared to 0.01% during the third quarter. Non-performing loans (comprised of non-accrual loans and non-accrual TDRs) decreased three basis points to 0.23% of total loans, and non-performing assets decreased four basis points to 0.28% of total loans and OREO. The allowance for credit losses as a percentage of loans totaled 1.24%, compared to 1.15% at September 30, 2022.

Deposits

Average total deposits increased $1.6 billion or 96.8% annualized to $8.0 billion for the fourth quarter 2022. Average transaction deposits (defined as total deposits less time deposits) increased $1.5 billion or 104.1% annualized, and average non-interest bearing demand deposits increased $585.0 million or 90.8% annualized.

The Bank of Jackson Hole acquisition added $1.4 billion of total deposits, including $1.3 billion of transaction deposits and $0.1 billion of time deposits on October 1, 2022. The mix of transaction deposits to total deposits increased 124 basis points to 88.9% at December 31, 2022. The loan to deposit ratio totaled 91.7% at December 31, 2022.

Non-Interest Income

Non-interest income totaled $14.1 million, a decrease of $3.2 million largely driven by $1.8 million lower mortgage banking income due to lower mortgage activity. Other non-interest income decreased $1.0 million due to unrealized gains on equity method investments included in the prior quarter. These decreases were partially offset by a $0.3 million increase in service charges and bank card fees. Included in the prior quarter was $0.8 million of banking center consolidation-related income.

Non-Interest Expense

Non-interest expense totaled $67.7 million, an increase of $13.7 million from the prior quarter. Included in the fourth quarter were $6.8 million of non-recurring acquisition-related expenses with $2.5 million included in professional fees, $1.5 million included in data processing, $1.1 million included in occupancy and equipment, $0.8 million included in salaries and benefits and $0.9 million included in other non-interest expense. Included in the third quarter were $7.0 million of non-recurring acquisition-related expenses with $4.6 million included in professional fees, $0.8 million included in salaries and benefits, $0.6 million in data processing, $0.5 million included in occupancy and equipment and $0.5 million included in other non-interest expense. Excluding the impact of non-recurring acquisition-related expenses in both quarters, non-interest expense increased $13.9 million largely driven by an increase in core operating expenses driven by the growth of our recent acquisitions.

The fully taxable equivalent efficiency ratio was 61.1% at December 31, 2022, compared to 61.4% at September 30, 2022. Adjusting for non-recurring acquisition-related expenses, the fully taxable equivalent efficiency ratio was 53.8% compared to 53.0% during the third quarter.

Income tax expense totaled $3.0 million during the fourth quarter compared to $4.0 million. The effective tax rate was 15.0% and 20.1% 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, 2022 for the consolidated company was 9.29%. Shareholders’ equity totaled $1.1 billion at December 31, 2022 increasing $172.8 million primarily due to the issuance of stock for the Bank of Jackson Hole acquisition. Retained earnings, net of dividends paid, increased $7.3 million, and accumulated other comprehensive loss decreased $1.1 million due to fair market value fluctuations in the available-for-sale investment securities portfolio.

Common book value per share increased $1.34 to $29.04 at December 31, 2022. Tangible common book value per share decreased $1.77 to $20.63 at December 31, 2022 due to the impact of the Bank of Jackson Hole acquisition. Excluding accumulated other comprehensive loss, the tangible book value totaled $22.98, compared to $25.10 at September 30, 2022.

Year-Over-Year Review

(All comparisons refer to the full year 2021, except as noted)

Net income totaled $71.3 million or $2.18 per diluted share, compared to $93.6 million or $3.01 per diluted share over the prior year. Adjusting for acquisition-related provision expense and non-recurring acquisition-related expenses of $36.8 million during 2022, adjusted net income totaled $99.6 million or $3.05 per diluted share. Fully taxable equivalent pre-provision net revenue increased $17.6 million to $128.4 million and the adjusted fully taxable equivalent pre-provision net revenue increased $32.7 million to $143.5 million. The return on average tangible assets was 0.95% compared to 1.37% in the prior year, and the return on average tangible common equity was 9.91% compared to 12.87%. The adjusted return on average tangible assets was 1.32%, and the adjusted return on average tangible common equity was 13.75%.

Fully taxable equivalent net interest income totaled $272.3 million, an increase of $80.0 million or 41.6%. Average earning assets increased $787.5 million, or 12.1%, including average originated loan growth of $638.0 million and average acquired loan growth $392.0 million. The fully taxable equivalent net interest margin widened 78 basis points to 3.73%, benefitting from an 81 basis point increase in earning asset yields to 3.97%. The cost of funds totaled 0.26%, compared to 0.23% during 2021.

Loans outstanding totaled a record $7.2 billion, increasing $2.7 billion or 60.0%, and included $1.7 billion of loans acquired through the Rock Canyon Bank and Bank of Jackson Hole acquisitions. Excluding the newly acquired loans, loans increased $980.9 million or 21.7% led by originated commercial loan growth of $629.0 million. New loan fundings during 2022 totaled $2.0 billion, led by commercial loan fundings of $1.2 billion.  

The Company recorded $36.7 million of provision expense for credit loss during 2022, compared to a provision release of $9.3 million in the prior year. Provision expense in 2022 included $21.7 million of Day 1 allowance reserve funding for the Rock Canyon Bank and Bank of Jackson Hole loan portfolios. The remainder of the provision expense was driven by strong loan growth and higher reserve requirements from changes in the CECL model’s underlying macro-economic forecast. Annualized net charge-offs remained consistent at 0.03% of total loans. Non-performing loans to total loans improved one basis point to 0.23% at December 31, 2022, and non-performing assets to total loans and OREO improved 11 basis points to 0.28%. The allowance for credit losses totaled 1.24% of total loans, compared to 1.10% at December 31, 2021.

Average total deposits increased $672.6 million or 11.1% to $6.7 billion. Average transaction deposits increased $761.1 million or 14.8%, and average non-interest bearing demand deposits increased $297.4 million or 12.6%. The mix of transaction deposits to total deposits increased by 230 basis points to 88.9% at December 31, 2022, and the mix of non-interest bearing demand deposits to total deposits totaled 39.8% compared to 40.2% at December 31, 2021.

Non-interest income totaled $67.3 million, a decrease of $43.1 million or 39.0%, largely driven by $39.6 million of lower mortgage banking income due to lower refinance activity in 2022, as well as competition driving tighter gain on sale margins. Service charges and bank card fees increased a combined $2.1 million in 2022. Other non-interest income decreased $2.4 million largely due to market adjustments on company-owned life insurance and higher unrealized gains on equity method investments included in the prior year. 2021 included $3.1 million of non-recurring banking center consolidation-related income.

Non-interest expense totaled $211.2 million, an increase of $19.4 million or 10.1%. Included in 2022 were $15.1 million of non-recurring acquisition-related expenses, with $8.2 million included in professional fees, $1.7 million included in salaries and benefits, $2.1 million included in data processing, $1.6 million included in occupancy and equipment and $1.5 million included in other non-interest expense. Compared to 2021, our on-going operating expenses increased driven by growth from our recent acquisitions. Excluding non-recurring acquisition-related expenses, occupancy and equipment increased $4.6 million, data processing increased $1.2 million, core deposit intangible and wealth management assets amortization increased $1.2 million, professional fees increased $0.8 million and other non-interest expense increased $4.3 million. Partially offsetting these increases was a $4.2 million decrease in salaries and benefits as the decrease in mortgage banking-related compensation more than offset additional expense for the Rock Canyon Bank and Bank of Jackson Hole associates. 2022 included $4.3 million for our continued investment in our digital platform 2UniFi and 2021 included banking center consolidation-related expense of $1.6 million.

Income tax expense totaled $14.9 million, a decrease of $6.5 million, driven by 2022’s lower pre-tax income due to acquisition-related expenses. Included in income tax expense was $0.3 million and $0.6 million of tax benefit from stock compensation activity during 2022 and 2021, respectively. Adjusting for stock compensation activity, the effective tax rate was 17.6% for 2022, compared to 19.1% for 2021. 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 Wednesday, January 25, 2023. Interested parties may listen to this call by dialing (888) 204-4368 using the participant passcode of 5871977 and asking for the NBHC Q4 2022 Earnings Call. The earnings release and a link to the replay of the call will be available on the Company’s website at www.nationalbankholdings.com by visiting the investor relations area.

About National Bank Holdings Corporation

National Bank Holdings Corporation is a bank holding company created to build a leading community bank franchise, delivering high quality client service and committed to stakeholder results. Through its bank subsidiaries, NBH Bank and Bank of Jackson Hole Trust, National Bank Holdings Corporation operates a network of over 95 banking centers, serving individual consumers, small, medium and large businesses, and government and non-profit entities. Its banking centers are located in its core footprint of Colorado, the greater Kansas City region, Utah, Wyoming, Texas, New Mexico and Idaho. Its comprehensive residential mortgage banking group primarily serves the bank’s core footprint. Its trust business is operated in its core footprint under the Bank of Jackson Hole Trust charter. NBH Bank operates under a single state charter through the following brand names as divisions of NBH Bank: in Colorado, Community Banks of Colorado and Community Banks Mortgage; in Kansas and Missouri, Bank Midwest and Bank Midwest Mortgage; in Texas, Utah, New Mexico and Idaho, Hillcrest Bank and Hillcrest Bank Mortgage; and in Wyoming, Bank of Jackson Hole and Bank of Jackson Hole Mortgage. Additional information about National Bank Holdings Corporation can be found at www.nationalbankholdings.com.

For more information visit: cobnks.com, bankmw.com, hillcrestbank.com, bankofjacksonhole.com, or nbhbank.com. Or connect with any of our brands on LinkedIn.

About Non-GAAP Financial Measures

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

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

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

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contain words such as “anticipate,” “believe,” “can,” “would,” “should,” “could,” “may,” “predict,” “seek,” “potential,” “will,” “estimate,” “target,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “intend” or similar expressions that relate to the Company’s strategy, plans or intentions. Forward-looking statements involve certain important risks, uncertainties and other factors, any of which could cause actual results to differ materially from those in such statements. Such factors include, without limitation, the “Risk Factors” referenced in our most recent Form 10-K filed with the Securities and Exchange Commission (SEC), other risks and uncertainties listed from time to time in our reports and documents filed with the SEC, and the following factors: difficulties in integrating the NBHC, Community Bancorporation, and Bancshares of Jackson Hole Incorporated businesses or fully realizing cost savings and other benefits; business disruption following the mergers; ability to execute our business strategy; business and economic conditions; effects of any potential government shutdowns; economic, market, operational, liquidity, credit and interest rate risks associated with the Company’s business; effects of any changes in trade, monetary and fiscal policies and laws; changes imposed by regulatory agencies to increase capital standards; effects of inflation, as well as, interest rate, securities market and monetary supply fluctuations; changes in the economy or supply-demand imbalances affecting local real estate values; changes in consumer spending, borrowings and savings habits; with respect to our mortgage business, the inability to negotiate fees with investors for the purchase of our loans or our obligation to indemnify purchasers or repurchase related loans; the Company’s ability to identify potential candidates for, consummate, integrate and realize operating efficiencies from, acquisitions, consolidations and other expansion opportunities; the Company’s ability to realize anticipated benefits from enhancements or updates to its core operating systems from time to time without significant change in client service or risk to the Company’s control environment; the Company’s dependence on information technology and telecommunications systems of third-party service providers and the risk of systems failures, interruptions or breaches of security; the Company’s ability to achieve organic loan and deposit growth and the composition of such growth; changes in sources and uses of funds; increased competition in the financial services industry; the effect of changes in accounting policies and practices; the share price of the Company’s stock; the Company’s ability to realize deferred tax assets or the need for a valuation allowance; the effects of tax legislation, including the potential of future increases to prevailing tax rules, or challenges to our positions; continued consolidation in the financial services industry; ability to maintain or increase market share and control expenses; costs and effects of changes in laws and regulations and of other legal and regulatory developments; technological changes; the timely development and acceptance of new products and services, including in the digital technology space our digital solution 2UniFi; the Company’s continued ability to attract, hire and maintain qualified personnel; ability to implement and/or improve operational management and other internal risk controls and processes and reporting system and procedures; regulatory limitations on dividends from the Company’s bank subsidiary; changes in estimates of future credit reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; widespread natural and other disasters, pandemics, dislocations, political instability, acts of war or terrorist activities, cyberattacks or international hostilities; a cybersecurity incident, data breach or a failure of a key information technology system; 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,
  2022

  2022   2021   2022

  2021
Total interest and dividend income $ 103,958     $ 72,369     $ 52,501     $ 284,688     $ 200,965  
Total interest expense   8,892       3,278       3,015       17,853       13,821  
Net interest income   95,066       69,091       49,486       266,835       187,144  
Taxable equivalent adjustment   1,454       1,409       1,299       5,512       5,161  
Net interest income FTE(1)   96,520       70,500       50,785       272,347       192,305  
Provision expense (release) for credit losses   21,869       12,678       132       36,729       (9,293 )
Net interest income after provision for credit losses FTE(1)   74,651       57,822       50,653       235,618       201,598  
Non-interest income:                            
Service charges   4,365       4,326       3,905       16,357       14,894  
Bank card fees   4,954       4,681       4,476       18,299       17,693  
Mortgage banking income   2,686       4,474       10,387       23,774       63,360  
Other non-interest income   2,132       3,100       3,388       7,331       9,752  
OREO-related income   1       1             7       35  
Banking center consolidation-related income         776       1,059       1,544       4,630  
Total non-interest income   14,138       17,358       23,215       67,312       110,364  
Non-interest expense:                            
Salaries and benefits   36,319       30,540       29,986       124,971       127,504  
Occupancy and equipment   10,409       8,026       6,133       31,496       25,283  
Professional fees   6,308       5,810       781       14,418       5,423  
Data processing   4,924       2,899       2,376       12,657       9,310  
Other non-interest expense   8,613       6,443       5,388       25,754       19,950  
Problem asset workout   (274 )     215       212       248       2,063  
Gain on sale of OREO, net         (378 )     (667 )     (648 )     (475 )
Core deposit and wealth management intangible assets amortization   1,363       383       296       2,338       1,183  
Banking center consolidation-related expense                           1,589  
Total non-interest expense   67,662       53,938       44,505       211,234       191,830  
                             
Income before income taxes FTE(1)   21,127       21,242       29,363       91,696       120,132  
Taxable equivalent adjustment   1,454       1,409       1,299       5,512       5,161  
Income before income taxes   19,673       19,833       28,064       86,184       114,971  
Income tax expense   2,952       3,994       5,295       14,910       21,365  
Net income $ 16,721     $ 15,839     $ 22,769     $ 71,274     $ 93,606  
Earnings per share – basic $ 0.44     $ 0.51     $ 0.75     $ 2.20     $ 3.04  
Earnings per share – diluted   0.44       0.50       0.74       2.18       3.01  
(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, 2022   September 30, 2022   December 31, 2021
ASSETS                
Cash and cash equivalents $ 195,505     $ 256,207     $ 845,695  
Investment securities available-for-sale   706,289       730,791       691,847  
Investment securities held-to-maturity   651,527       606,245       609,012  
Non-marketable securities   89,049       64,004       50,740  
Loans   7,220,469       5,721,985       4,513,383  
Allowance for credit losses   (89,553 )     (65,623 )     (49,694 )
Loans, net   7,130,916       5,656,362       4,463,689  
Loans held for sale   22,767       33,043       139,142  
Other real estate owned   3,731       3,695       7,005  
Premises and equipment, net   136,111       105,801       96,747  
Goodwill   279,132       167,882       115,027  
Intangible assets, net   59,887       30,843       12,322  
Other assets   298,329       268,048       182,785  
Total assets $ 9,573,243     $ 7,922,921     $ 7,214,011  
LIABILITIES AND SHAREHOLDERS’ EQUITY                
Liabilities:                
Non-interest bearing demand deposits $ 3,134,716     $ 2,735,832     $ 2,506,265  
Interest bearing demand deposits   913,852       597,035       555,401  
Savings and money market   2,950,658       2,631,855       2,332,591  
Total transaction deposits   6,999,226       5,964,722       5,394,257  
Time deposits   873,400       838,830       833,916  
Total deposits   7,872,626       6,803,552       6,228,173  
Securities sold under agreements to repurchase   20,214       20,044       22,768  
Long-term debt   53,890       39,559       39,478  
Federal Home Loan Bank advances   385,000              
Other liabilities   149,311       140,340       83,486  
Total liabilities   8,481,041       7,003,495       6,373,905  
Shareholders’ equity:                
Common stock   515       515       515  
Additional paid in capital   1,159,508       1,079,560       1,014,294  
Retained earnings   330,721       323,448       289,876  
Treasury stock   (310,338 )     (394,758 )     (457,616 )
Accumulated other comprehensive loss, net of tax   (88,204 )     (89,339 )     (6,963 )
Total shareholders’ equity   1,092,202       919,426       840,106  
Total liabilities and shareholders’ equity $ 9,573,243     $ 7,922,921     $ 7,214,011  
SHARE DATA                
Average basic shares outstanding   37,762,853       31,259,188       30,338,265  
Average diluted shares outstanding   38,100,155       31,531,075       30,715,500  
Ending shares outstanding   37,608,519       33,189,253       29,958,764  
Common book value per share $ 29.04     $ 27.70     $ 28.04  
Tangible common book value per share(1)(non-GAAP)   20.63       22.40       24.33  
Tangible common book value per share, excluding accumulated other comprehensive income(1)(non-GAAP)   22.98       25.10       24.56  
CAPITAL RATIOS                
Average equity to average assets   11.47%       11.69%       11.88%  
Tangible common equity to tangible assets(1)   8.38%       9.60%       10.26%  
Tier 1 leverage ratio   9.29%       10.45%       10.39%  
Common equity tier 1 risk-based capital ratio   10.54%       12.75%       14.26%  
Tier 1 risk-based capital ratio   10.54%       12.75%       14.26%  
Total risk-based capital ratio   12.29%       14.34%       15.92%  
(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, 2022       December 31, 2022
          vs. September 30, 2022       vs. December 31, 2021
  December 31, 2022   September 30, 2022   % Change   December 31, 2021   % Change
Originated:                              
Commercial:                              
Commercial and industrial $ 1,841,313     $ 1,724,469     6.8%     $ 1,479,895     24.4%  
Municipal and non-profit   959,305       968,539     (1.0)%       928,705     3.3%  
Owner-occupied commercial real estate   656,361       631,783     3.9%       503,663     30.3%  
Food and agribusiness   284,714       265,835     7.1%       200,412     42.1%  
Total commercial   3,741,693       3,590,626     4.2%       3,112,675     20.2%  
Commercial real estate non-owner occupied   841,657       731,293     15.1%       611,765     37.6%  
Residential real estate   827,030       750,669     10.2%       616,135     34.2%  
Consumer   16,986       17,027     (0.2)%       17,336     (2.0)%  
Total originated   5,427,366       5,089,615     6.6%       4,357,911     24.5%  
                               
Acquired:                              
Commercial:                              
Commercial and industrial   183,522       82,324     >100%       16,252     >100%  
Municipal and non-profit   321       326     (1.5)%       340     (5.6)%  
Owner-occupied commercial real estate   256,979       176,385     45.7%       29,973     >100%  
Food and agribusiness   69,265       73,822     (6.2)%       3,177     >100%  
Total commercial   510,087       332,857     53.2%       49,742     >100%  
Commercial real estate non-owner occupied   854,393       219,109     >100%       52,964     >100%  
Residential real estate   424,251       79,477     >100%       52,521     >100%  
Consumer   4,372       927     >100%       245     >100%  
Total acquired   1,793,103       632,370     >100%       155,472     >100%  
Total loans $ 7,220,469     $ 5,721,985     26.2%     $ 4,513,383     60.0%  

Loan Fundings(1)

  Fourth quarter   Third quarter   Second quarter   First quarter   Fourth quarter
  2022   2022   2022    2022   2021
Commercial:                                    
Commercial and industrial $ 177,693     $ 201,106     $ 152,550     $ 169,168     $ 229,529  
Municipal and non-profit   20,393       20,845       81,428       49,906       101,450  
Owner occupied commercial real estate   40,912       65,125       78,905       67,597       28,914  
Food and agribusiness   28,518       76,293       (4,186 )     18,620       11,016  
Total commercial   267,516       363,369       308,697       305,291       370,909  
Commercial real estate non-owner occupied   133,271       166,739       88,612       63,416       46,128  
Residential real estate   95,067       99,951       93,220       49,040       55,873  
Consumer   1,396       1,505       1,989       1,904       2,524  
Total $ 497,250     $ 631,564     $ 492,518     $ 419,651     $ 475,434  
(1)   Loan fundings are defined as closed end funded loans and net fundings under revolving lines of credit. Net fundings under revolving lines of credit were $96,903, $124,834, $21,762, $66,430 and $138,777 for the periods noted in the table above, respectively.
     
 
NATIONAL BANK HOLDINGS CORPORATION

Summary of Net Interest Margin

(Dollars in thousands)
                                                       
    For the three months ended   For the three months ended   For the three months ended
    December 31, 2022   September 30, 2022   December 31, 2021
    Average         Average   Average         Average   Average         Average
    balance   Interest   rate   balance   Interest   rate   balance   Interest   rate
Interest earning assets:                                                      
Originated loans FTE(1)(2)   $ 5,269,227     $ 70,536     5.31 %   $ 4,834,206     $ 58,153     4.77 %   $ 4,296,318     $ 43,066     3.98 %
Acquired loans     1,790,476       26,508     5.87 %     295,893       6,581     8.82 %     172,567       4,493     10.33 %
Loans held for sale     24,381       375     6.10 %     39,532       551     5.53 %     166,470       1,214     2.89 %
Investment securities available-for-sale     841,762       4,187     1.99 %     865,875       4,247     1.96 %     689,994       2,560     1.48 %
Investment securities held-to-maturity     661,992       2,818     1.70 %     605,356       2,212     1.46 %     637,250       1,994     1.25 %
Other securities     26,203       402     6.14 %     14,909       212     5.69 %     14,590       209     5.73 %
Interest earning deposits     115,441       586     2.01 %     326,277       1,822     2.22 %     678,729       264     0.15 %
Total interest earning assets FTE(2)   $ 8,729,482     $ 105,412     4.79 %   $ 6,982,048     $ 73,778     4.19 %   $ 6,655,918     $ 53,800     3.21 %
Cash and due from banks   $ 126,107                 $ 81,112                 $ 79,058              
Other assets     673,679                   440,516                   460,664              
Allowance for credit losses     (85,638 )                 (54,610 )                 (49,069 )            
Total assets   $ 9,443,630                 $ 7,449,066                 $ 7,146,571              
Interest bearing liabilities:                                                      
Interest bearing demand, savings and money market deposits   $ 3,946,573     $ 4,587     0.46 %   $ 3,058,463     $ 1,829     0.24 %   $ 2,847,562     $ 1,500     0.21 %
Time deposits     892,122       2,048     0.91 %     799,759       1,116     0.55 %     851,779       1,312     0.61 %
Securities sold under agreements to repurchase     18,515       23     0.49 %     22,183       7     0.13 %     20,420       7     0.14 %
Long-term debt     53,530       539     3.99 %     39,543       326     3.27 %     24,599       196     3.16 %
Federal Home Loan Bank advances     162,146       1,695     4.15 %               0.00 %               0.00 %
Total interest bearing liabilities   $ 5,072,886     $ 8,892     0.70 %   $ 3,919,948     $ 3,278     0.33 %   $ 3,744,360     $ 3,015     0.32 %
Demand deposits   $ 3,142,296                 $ 2,557,286                 $ 2,459,063              
Other liabilities     145,608                   100,983                   94,345              
Total liabilities     8,360,790                   6,578,217                   6,297,768              
Shareholders’ equity     1,082,840                   870,849                   848,803              
Total liabilities and shareholders’ equity   $ 9,443,630                 $ 7,449,066                 $ 7,146,571              
Net interest income FTE(2)         $ 96,520               $ 70,500               $ 50,785      
Interest rate spread FTE(2)                 4.09 %                 3.86 %                 2.89 %
Net interest earning assets   $ 3,656,596                 $ 3,062,100                 $ 2,911,558              
Net interest margin FTE(2)                 4.39 %                 4.01 %                 3.03 %
Average transaction deposits   $ 7,088,869                 $ 5,615,749                 $ 5,306,625              
Average total deposits     7,980,991                   6,415,508                   6,158,404              
Ratio of average interest earning assets to average interest bearing liabilities     172.08%                   178.12%                   177.76%              
(1)   Originated loans are net of deferred loan fees, less costs, which are included in interest income over the life of the loan.
(2)   Presented on a fully taxable equivalent basis using the statutory tax rate of 21%. The tax equivalent adjustments included above are $1,454, $1,409 and $1,299 for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively.
     
 
NATIONAL BANK HOLDINGS CORPORATION

Summary of Net Interest Margin

(Dollars in thousands)
                               
  For the year ended December 31, 2022   For the year ended December 31, 2021
  Average         Average   Average         Average
  balance   Interest   rate   balance   Interest   rate
Interest earning assets:                              
Originated loans FTE(1)(2) $ 4,767,713     $ 218,561   4.58 %   $ 4,129,684     $ 164,527   3.98 %
Acquired loans   594,222       40,060   6.74 %     202,174       17,340   8.58 %
Loans held for sale   58,788       2,563   4.36 %     178,373       5,110   2.86 %
Investment securities available-for-sale   839,872       15,091   1.80 %     667,859       10,014   1.50 %
Investment securities held-to-maturity   604,423       9,109   1.51 %     576,343       7,311   1.27 %
Other securities   17,598       1,034   5.88 %     15,032       838   5.57 %
Interest earning deposits   426,137       3,782   0.89 %     751,835       986   0.13 %
Total interest earning assets FTE(2) $ 7,308,753     $ 290,200   3.97 %   $ 6,521,300     $ 206,126   3.16 %
Cash and due from banks $ 90,657               $ 78,979            
Other assets   490,206                 472,775            
Allowance for credit losses   (59,824 )               (52,943 )          
Total assets $ 7,829,792               $ 7,020,111            
Interest bearing liabilities:                              
Interest bearing demand, savings and money market deposits $ 3,235,834     $ 9,347   0.29 %   $ 2,772,091     $ 6,240   0.23 %
Time deposits   826,293       5,249   0.64 %     914,837       7,362   0.80 %
Securities sold under agreements to repurchase   21,298       43   0.20 %     20,338       23   0.11 %
Long-term debt   43,048       1,519   3.53 %     6,200       196   3.16 %
Federal Home Loan Bank advances   40,870       1,695   4.15 %             0.00 %
Total interest bearing liabilities $ 4,167,343     $ 17,853   0.43 %   $ 3,713,466     $ 13,821   0.37 %
Demand deposits $ 2,652,561               $ 2,355,171            
Other liabilities   105,507                 104,935            
Total liabilities   6,925,411                 6,173,572            
Shareholders’ equity   904,381                 846,539            
Total liabilities and shareholders’ equity $ 7,829,792               $ 7,020,111            
Net interest income FTE(2)       $ 272,347             $ 192,305    
Interest rate spread FTE(2)             3.54 %               2.79 %
Net interest earning assets $ 3,141,410               $ 2,807,834            
Net interest margin FTE(2)             3.73 %               2.95 %
Average transaction deposits $ 5,888,395               $ 5,127,262            
Average total deposits   6,714,688                 6,042,099            
Ratio of average interest earning assets to average interest bearing liabilities   175.38%                 175.61%            
(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 $5,512 and $5,161 for the years ended December 31, 2022 and December 31, 2021, 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, 2022   September 30, 2022   December 31, 2021
Beginning allowance for credit losses $ 65,623     $ 50,860     $ 49,155  
Day 1 CECL provision expense   16,027       5,201        
PCD allowance for credit loss at acquisition   3,764       2,474        
Charge-offs   (849 )     (253 )     (268 )
Recoveries   129       66       72  
Provision expense for credit losses   4,859       7,275       735  
Ending allowance for credit losses (“ACL”) $ 89,553     $ 65,623     $ 49,694  
Ratio of annualized net charge-offs to average total loans during the period   0.04%       0.01%       0.02%  
Ratio of ACL to total loans outstanding at period end   1.24%       1.15%       1.10%  
Ratio of ACL to total non-performing loans at period end   542.35%       447.72%       458.77%  
Total loans $ 7,220,469     $ 5,721,985     $ 4,513,383  
Average total loans during the period   7,029,021       5,114,044       4,490,391  
Total non-performing loans   16,512       14,657       10,832  

Past Due and Non-accrual Loans

  December 31, 2022   September 30, 2022   December 31, 2021
Loans 30-89 days past due and still accruing interest $ 2,986     $ 1,548     $ 1,687  
Loans 90 days past due and still accruing interest   95       332       420  
Non-accrual loans   16,512       14,657       10,832  
Total past due and non-accrual loans $ 19,593     $ 16,537     $ 12,939  
Total 90 days past due and still accruing interest and non-accrual loans to total loans   0.23%       0.26%       0.25%  

Asset Quality Data

  December 31, 2022   September 30, 2022   December 31, 2021
Non-performing loans $ 16,512     $ 14,657     $ 10,832  
OREO   3,731       3,695       7,005  
Total non-performing assets $ 20,243     $ 18,352     $ 17,837  
Accruing restructured loans $ 4,654     $ 4,610     $ 7,186  
Total non-performing loans to total loans   0.23%       0.26%       0.24%  
Total non-performing assets to total loans and OREO   0.28%       0.32%       0.39%  
                       
 
NATIONAL BANK HOLDINGS CORPORATION

Key Metrics(1)
                             
  As of and for the three months ended   As of and for the years ended
  December 31,   September 30,   December 31,   December 31,   December 31,
  2022

  2022   2021   2022

  2021
Return on average assets   0.70%       0.84%       1.26%       0.91%       1.33%  
Return on average tangible assets(2)   0.77%       0.87%       1.30%       0.95%       1.37%  
Return on average tangible assets, adjusted(2)   1.55%       1.39%       1.30%       1.32%       1.37%  
Return on average equity   6.13%       7.22%       10.64%       7.88%       11.06%  
Return on average tangible common equity(2)   9.17%       8.66%       12.37%       9.91%       12.87%  
Return on average tangible common equity, adjusted(2)   18.37%       13.76%       12.37%       13.75%       12.87%  
Loan to deposit ratio (end of period)   91.72%       84.10%       72.47%       91.72%       72.47%  
Non-interest bearing deposits to total deposits (end of period)   39.82%       40.21%       40.24%       39.82%       40.24%  
Net interest margin(3)   4.32%       3.93%       2.95%       3.65%       2.87%  
Net interest margin FTE(2)(3)   4.39%       4.01%       3.03%       3.73%       2.95%  
Interest rate spread FTE(2)(4)   4.09%       3.86%       2.89%       3.54%       2.79%  
Yield on earning assets(5)   4.72%       4.11%       3.13%       3.90%       3.08%  
Yield on earning assets FTE(2)(5)   4.79%       4.19%       3.21%       3.97%       3.16%  
Cost of interest bearing liabilities   0.70%       0.33%       0.32%       0.43%       0.37%  
Cost of deposits   0.33%       0.18%       0.18%       0.22%       0.23%  
Non-interest income to total revenue FTE(2)   12.78%       19.76%       31.37%       19.82%       36.46%  
Non-interest expense to average assets   2.84%       2.87%       2.47%       2.70%       2.73%  
Efficiency ratio   61.96%       62.39%       61.22%       63.22%       64.48%  
Efficiency ratio FTE(2)   61.15%       61.39%       60.14%       62.19%       63.38%  
Efficiency ratio FTE, adjusted(2)   53.76%       52.99%       59.74%       57.07%       62.99%  
Pre-provision net revenue $ 41,542     $ 32,511     $ 28,196     $ 122,913     $ 105,678  
Pre-provision net revenue FTE(2)   42,996       33,920       29,495       128,425       110,839  
Pre-provision net revenue FTE, adjusted(2)   49,807       40,916       29,495       143,492       110,839  
                             
Total Loans Asset Quality Data(6)(7)(8)                            
Non-performing loans to total loans   0.23%       0.26%       0.24%       0.23%       0.24%  
Non-performing assets to total loans and OREO   0.28%       0.32%       0.39%       0.28%       0.39%  
Allowance for credit losses to total loans   1.24%       1.15%       1.10%       1.24%       1.10%  
Allowance for credit losses to non-performing loans   542.35%       447.72%       458.77%       542.35%       458.77%  
Net charge-offs to average loans   0.04%       0.01%       0.02%       0.03%       0.03%  
(1)   Quarterly ratios are annualized.
(2)   Ratio represents non-GAAP financial measure. See non-GAAP reconciliations below.
(3)   Net interest margin represents net interest income, including accretion income on interest earning assets, as a percentage of average interest earning assets.
(4)   Interest rate spread represents the difference between the weighted average yield on interest earning assets and the weighted average cost of interest bearing liabilities.
(5)   Interest earning assets include assets that earn interest/accretion or dividends. Any market value adjustments on investment securities or loans are excluded from interest earning assets.
(6)   Non-performing loans consist of non-accruing loans and 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, 2022   September 30, 2022   December 31, 2021
Total shareholders’ equity   $ 1,092,202     $ 919,426     $ 840,106  
Less: goodwill, core deposit intangible (“CDI”) and wealth management intangible (“WMI”) assets, net     (327,191 )     (186,608 )     (121,392 )
Add: deferred tax liability related to goodwill     10,984       10,755       10,070  
Tangible common equity (non-GAAP)   $ 775,995     $ 743,573     $ 728,784  
                   
Total assets   $ 9,573,243     $ 7,922,921     $ 7,214,011  
Less: goodwill, CDI and WMI assets, net     (327,191 )     (186,608 )     (121,392 )
Add: deferred tax liability related to goodwill     10,984       10,755       10,070  
Tangible assets (non-GAAP)   $ 9,257,036     $ 7,747,068     $ 7,102,689  
                   
Tangible common equity to tangible assets calculations:                  
Total shareholders’ equity to total assets     11.41%       11.60%       11.65%  
Less: impact of goodwill, CDI and WMI assets, net     (3.03)%       (2.00)%       (1.39)%  
Tangible common equity to tangible assets (non-GAAP)     8.38%       9.60%       10.26%  
                   
Tangible common book value per share calculations:                  
Tangible common equity (non-GAAP)   $ 775,995     $ 743,573     $ 728,784  
Divided by: ending shares outstanding     37,608,519       33,189,253       29,958,764  
Tangible common book value per share (non-GAAP)   $ 20.63     $ 22.40     $ 24.33  
                   
Tangible common book value per share, excluding accumulated other comprehensive income calculations:                  
Tangible common equity (non-GAAP)   $ 775,995     $ 743,573     $ 728,784  
Accumulated other comprehensive loss, net of tax     88,204       89,339       6,963  
Tangible common book value, excluding accumulated other comprehensive loss, net of tax (non-GAAP)     864,199       832,912       735,747  
Divided by: ending shares outstanding     37,608,519       33,189,253       29,958,764  
Tangible common book value per share, excluding accumulated other comprehensive loss, net of tax (non-GAAP)   $ 22.98     $ 25.10     $ 24.56  
                         



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,
    2022

  2022   2021   2022

  2021
Net income   $ 16,721     $ 15,839     $ 22,769     $ 71,274     $ 93,606  
Add: impact of CDI and WMI amortization expense, after tax     1,049       295       227       1,799       909  
Net income excluding the impact of CDI and WMI amortization expense, after tax (non-GAAP)   $ 17,770     $ 16,134     $ 22,996     $ 73,073     $ 94,515  
                               
Net income excluding the impact of CDI and WMI amortization expense, after tax   $ 17,770     $ 16,134     $ 22,996     $ 73,073     $ 94,515  
Add: acquisition-related adjustments, after tax (non-GAAP)(1)     17,825       9,510             28,303        
Net income adjusted for the impact of CDI and WMI amortization expense and acquisition-related expenses, after tax (non-GAAP)(1)   $ 35,595     $ 25,644     $ 22,996     $ 101,376     $ 94,515  
                               
Average assets   $ 9,443,630     $ 7,449,066     $ 7,146,571     $ 7,829,792     $ 7,020,111  
Less: average goodwill, CDI and WMI assets, net of deferred tax liability related to goodwill     (314,017 )     (131,490 )     (111,508 )     (166,857 )     (111,944 )
Average tangible assets (non-GAAP)   $ 9,129,613     $ 7,317,576     $ 7,035,063     $ 7,662,934     $ 6,908,167  
                               
Average shareholders’ equity   $ 1,082,840     $ 870,849     $ 848,803     $ 904,381     $ 846,539  
Less: average goodwill, CDI and WMI assets, net of deferred tax liability related to goodwill     (314,017 )     (131,490 )     (111,508 )     (166,857 )     (111,944 )
Average tangible common equity (non-GAAP)   $ 768,823     $ 739,359     $ 737,295     $ 737,524     $ 734,595  
                               
Return on average assets     0.70%       0.84%       1.26%       0.91%       1.33%  
Return on average tangible assets (non-GAAP)     0.77%       0.87%       1.30%       0.95%       1.37%  
Adjusted return on average tangible assets (non-GAAP)     1.55%       1.39%       1.30%       1.32%       1.37%  
Return on average equity     6.13%       7.22%       10.64%       7.88%       11.06%  
Return on average tangible common equity (non-GAAP)     9.17%       8.66%       12.37%       9.91%       12.87%  
Adjusted return on average tangible common equity (non-GAAP)     18.37%       13.76%       12.37%       13.75%       12.87%  
                               
(1) Acquisition-related adjustments:                              
Provision expense adjustments:                              
CECL day 1 provision expense (non-GAAP)   $ 16,348     $ 5,358     $     $ 21,706     $  
Non-interest expense adjustments:                              
Acquisition-related expenses (non-GAAP)     6,811       6,996             15,067     $  
Acquisition-related adjustments before tax (non-GAAP)     23,159       12,354             36,773        
Tax expense impact     (5,334 )     (2,844 )           (8,470 )      
Acquisition-related adjustments, after tax (non-GAAP)   $ 17,825     $ 9,510     $     $ 28,303     $  

Fully Taxable Equivalent Yield on Earning Assets and Net Interest Margin

    As of and for the three months ended   As of and for the years ended
    December 31,   September 30,    December 31,    December 31,   December 31, 
    2022

  2022   2021   2022

  2021
Interest income   $ 103,958     $ 72,369     $ 52,501     $ 284,688     $ 200,965  
Add: impact of taxable equivalent adjustment     1,454       1,409       1,299       5,512       5,161  
Interest income FTE (non-GAAP)   $ 105,412     $ 73,778     $ 53,800     $ 290,200     $ 206,126  
                               
Net interest income   $ 95,066     $ 69,091     $ 49,486     $ 266,835     $ 187,144  
Add: impact of taxable equivalent adjustment     1,454       1,409       1,299       5,512       5,161  
Net interest income FTE (non-GAAP)   $ 96,520     $ 70,500     $ 50,785     $ 272,347     $ 192,305  
                               
Average earning assets   $ 8,729,482     $ 6,982,048     $ 6,655,918     $ 7,308,753     $ 6,521,300  
Yield on earning assets     4.72%       4.11%       3.13%       3.90%       3.08%  
Yield on earning assets FTE (non-GAAP)     4.79%       4.19%       3.21%       3.97%       3.16%  
Net interest margin     4.32%       3.93%       2.95%       3.65%       2.87%  
Net interest margin FTE (non-GAAP)     4.39%       4.01%       3.03%       3.73%       2.95%  

Efficiency Ratio and Pre-Provision Net Revenue

    As of and for the three months ended   As of and for the years ended
    December 31,   September 30,    December 31,    December 31,   December 31, 
    2022

  2022   2021   2022

  2021
Net interest income   $ 95,066     $ 69,091     $ 49,486     $ 266,835     $ 187,144  
Add: impact of taxable equivalent adjustment     1,454       1,409       1,299       5,512       5,161  
Net interest income FTE (non-GAAP)   $ 96,520     $ 70,500     $ 50,785     $ 272,347     $ 192,305  
                               
Non-interest income   $ 14,138     $ 17,358     $ 23,215     $ 67,312     $ 110,364  
                               
Non-interest expense   $ 67,662     $ 53,938     $ 44,505     $ 211,234     $ 191,830  
Less: CDI and WMI asset amortization     (1,363 )     (383 )     (296 )     (2,338 )     (1,183 )
Less: acquisition-related expenses (non-GAAP)     (6,811 )     (6,996 )           (15,067 )      
Non-interest expense adjusted for CDI and WMI asset amortization and acquisition-related expenses (non-GAAP)   $ 59,488     $ 46,559     $ 44,209     $ 193,829     $ 190,647  
                               
Non-interest expense   $ 67,662     $ 53,938     $ 44,505     $ 211,234     $ 191,830  
Less: acquisition-related expenses (non-GAAP)     (6,811 )     (6,996 )           (15,067 )      
Non-interest expense, adjusted for acquisition-related expenses (non-GAAP)   $ 60,851     $ 46,942     $ 44,505     $ 196,167     $ 191,830  
                               
Efficiency ratio     61.96%       62.39%       61.22%       63.22%       64.48%  
Efficiency ratio FTE (non-GAAP)     61.15%       61.39%       60.14%       62.19%       63.38%  
Efficiency ratio adjusted for CDI and WMI amortization and acquisition-related expenses FTE (non-GAAP)     53.76%       52.99%       59.74%       57.07%       62.99%  
                               
Pre-provision net revenue (non-GAAP)   $ 41,542     $ 32,511     $ 28,196     $ 122,913     $ 105,678  
Pre-provision net revenue, FTE (non-GAAP)     42,996       33,920       29,495       128,425       110,839  
Pre-provision net revenue FTE, adjusted for acquisition-related expenses (non-GAAP)     49,807       40,916       29,495       143,492       110,839  

Adjusted Net Income and Earnings Per Share

    As of and for the three months ended   As of and for the years ended
    December 31,   September 30,    December 31,    December 31,   December 31, 
    2022   2022   2021   2022   2021
Adjustments to net income:                                        
Net income   $ 16,721     $ 15,839     $ 22,769     $ 71,274     $ 93,606  
Add: Acquisition-related adjustments, after tax (non-GAAP)     17,825       9,510             28,303        
Adjusted net income (non-GAAP)   $ 34,546     $ 25,349     $ 22,769     $ 99,577     $ 93,606  
                                         
Adjustments to earnings per share:                                        
Earnings per share diluted   $ 0.44     $ 0.50     $ 0.74     $ 2.18     $ 3.01  
Add: Acquisition-related adjustments, after tax (non-GAAP)     0.47       0.30             0.87        
Adjusted earnings per share – diluted (non-GAAP)(1)   $ 0.91     $ 0.80     $ 0.74     $ 3.05     $ 3.01  
                                         

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