GlobeNewswire Inc | Jan 21, 2021 04:10PM EST

January 21, 2021

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

For the quarter For the quarter - adjusted^(1) For the year For the year - adjusted ^(1) 4Q20 3Q20 4Q19 4Q20 3Q20 4Q19 2020 2019 2020 2019 Netincome $ 27,169 $ 27,893 $ 19,519 $ 27,329 $ 28,224 $ 19,519 $ 88,591 $ 80,365 $ 90,397 $ 81,054 ($000's)Earningsper $ 0.87 $ 0.90 $ 0.62 $ 0.88 $ 0.91 $ 0.62 $ 2.85 $ 2.55 $ 2.91 $ 2.57 share -dilutedReturnonaverage 1.67 % 1.76 % 1.35 % 1.68 % 1.78 % 1.35 % 1.44 % 1.42 % 1.47 % 1.43 %tangibleassets^(2)Returnonaveragetangible 15.55 % 16.49 % 12.07 % 15.64 % 16.69 % 12.07 % 13.27 % 13.07 % 13.54 % 13.18 %commonequity^(2)



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

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

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

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

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

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

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

Asset Quality and Provision for Loan LossesNo provision for loan losses was recorded during the fourth quarter under the CECL model due to the impact of the models underlying economic forecast, qualitative factors and a low level of charge-offs. Annualized net charge-offs totaled 0.11% of total loans, compared to 0.04% in the prior quarter. Non-performing loans (comprised of non-accrual loans and non-accrual TDRs) totaled 0.47% of total loans, compared to 0.41% at September 30, 2020. The allowance for credit losses as a percentage of total loans increased three basis points to 1.37% at December 31, 2020. Excluding PPP loans, non-performing loans totaled 0.49% of total loans, and the allowance for credit losses as a percentage of totals loans totaled 1.43% at December 31, 2020.

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

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

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

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

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

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

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

Recent EventsThe COVID-19 pandemic has caused substantial disruption to the communities we serve and has changed the way we live and work. We continue to remain committed to ensuring our associates, clients and communities are receiving the support they need during these challenging times. Our banking centers remain operational through our drive-thru services and on an appointment-only basis in the lobbies. We have continued to leverage our digital banking platform with our clients. Our teams have been working diligently to support our clients who are experiencing financial hardship due to COVID-19 through participation in the SBAs Paycheck Protection Program, including assistance with PPP loan forgiveness applications, and loan modifications, as needed. While the initial release of the vaccine is promising, the length of time that the government-mandated measures must remain in place to address COVID-19 is unknown. The pandemic has already had a significantly negative impact to the U.S. labor market, consumer spending and business operations, and it is not clear how quickly the vaccine can be widely deployed and when government-mandated measures will be removed.

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

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

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

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

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

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

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

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

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

Conference CallManagement will host a conference call to review the results at 11:00 a.m. Eastern Time on Friday, January 22, 2021. Interested parties may listen to this call by dialing (877) 272-6762 / (615) 800-6832 (International) using the Conference ID of 4472264 and asking for the NBHC Fourth Quarter Earnings conference call. A telephonic replay of the call will be available beginning approximately four hours after the calls completion through February 4, 2021, by dialing (855) 859-2056 (United States) / (404) 537-3406 (International) using the Conference ID of 4472264. The earnings release and an on-line replay of the call will also be available on the Companys website at www.nationalbankholdings.com by visiting the investor relations area.

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

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

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

About National Bank Holdings CorporationNational Bank Holdings Corporation is a bank holding company created to build a leading community bank franchise delivering high quality client service and committed to stakeholder results. Through its bank subsidiary, NBH Bank, National Bank Holdings Corporation operates a network of 89 banking centers, serving individual consumers, small, medium and large businesses, and government and non-profit entities. Its banking centers are located in its core footprint of Colorado, the greater Kansas City region, Texas, Utah and New Mexico. Its comprehensive residential mortgage banking group primarily serves the banks core footprint. NBH Bank operates under the following brand names: Community Banks of Colorado and Community Banks Mortgage, a division of NBH Bank, in Colorado, Bank Midwest and Bank Midwest Mortgage in Kansas and Missouri, and Hillcrest Bank and Hillcrest Bank Mortgage in Texas, Utah and New Mexico. Additional information about National Bank Holdings Corporation can be found at www.nationalbankholdings.com.

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

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contain words such as anticipate, believe, can, would, should, could, may, predict, seek, potential, will, estimate, target, plan, project, continuing, ongoing, expect, intend or similar expressions that relate to the Companys strategy, plans or intentions. Forward-looking statements involve certain important risks, uncertainties and other factors, any of which could cause actual results to differ materially from those in such statements. Such factors include, without limitation, the Risk Factors referenced in our most recent Form 10-K filed with the Securities and Exchange Commission (SEC), other risks and uncertainties listed from time to time in our reports and documents filed with the SEC, and the following factors: ability to execute our business strategy; business and economic conditions; effects of a prolonged government shutdown; economic, market, operational, liquidity, credit and interest rate risks associated with the Companys business; effects of any changes in trade, monetary and fiscal policies and laws; changes imposed by regulatory agencies to increase capital standards; effects of inflation, as well as, interest rate, securities market and monetary supply fluctuations; changes in the economy or supply-demand imbalances affecting local real estate values; changes in consumer spending, borrowings and savings habits; with respect to our mortgage business, the inability to negotiate fees with investors for the purchase or our loans or our obligation to indemnify purchasers or repurchase related loans; the Companys 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 Companys 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 Companys 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 Companys continued ability to attract, hire and maintain qualified personnel; ability to implement and/or improve operational management and other internal risk controls and processes and reporting system and procedures; regulatory limitations on dividends from the Company's bank subsidiary; changes in estimates of future loan reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; widespread natural and other disasters, pandemics, dislocations, political instability, acts of war or terrorist activities, cyberattacks or international hostilities; adverse effects due to the novel Coronavirus Disease 2019 (COVID-19) on the Company and its clients, counterparties, employees, and third-party service providers, and the adverse impacts on our business, financial position, results of operations, and prospects; impact of reputational risk; and success at managing the risks involved in the foregoing items. The Company can give no assurance that any goal or plan or expectation set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements. The forward-looking statements are made as of the date of this press release, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.

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

NATIONAL BANK HOLDINGS CORPORATIONFINANCIAL SUMMARYConsolidated Statements of Operations (Unaudited)(Dollars in thousands, except share and per share data)

For the three months ended For the years ended December31, September30, December31, December31, December31, 2020 2020 2019 2020 2019Total interest and $ 53,288 $ 52,302 $ 59,616 $ 218,002 $ 242,601 dividend incomeTotal interest 4,732 5,587 9,228 25,056 36,771 expenseNet interest income 48,556 46,715 50,388 192,946 205,830 Taxable equivalent 1,260 1,275 1,290 5,103 5,065 adjustmentNet interest income 49,816 47,990 51,678 198,049 210,895 FTE^(1)Provision for loan ? 1,200 1,180 17,630 11,643 lossesNet interest incomeafter provision for 49,816 46,790 50,498 180,419 199,252 loan losses FTE^(1)Non-interest income: Service charges 4,000 3,742 4,416 14,962 17,895 Bank card fees 4,240 4,039 3,649 15,446 14,595 Mortgage banking 23,138 34,943 10,309 102,384 42,346 incomeOther non-interest 1,695 1,733 1,740 7,079 7,601 incomeOREO-related income 284 75 168 387 315 Total non-interest 33,357 44,532 20,282 140,258 82,752 incomeNon-interest expense: Salaries and benefits 32,919 38,614 30,653 141,170 122,732 Occupancy and 6,619 6,878 6,908 27,473 27,336 equipmentProfessional fees 864 714 658 2,946 3,256 Other non-interest 6,725 7,443 6,849 27,947 29,347 expenseProblem asset workout 807 1,064 736 3,148 3,186 (Gain) loss on sale (13 ) (119 ) 7 (38 ) (7,193 )of OREO, netCore depositintangible asset 296 295 296 1,183 1,183 amortizationBanking centerconsolidation-related 208 432 ? 2,348 898 expenseTotal non-interest 48,425 55,321 46,107 206,177 180,745 expense Income before income 34,748 36,001 24,673 114,500 101,259 taxes FTE^(1)Taxable equivalent 1,260 1,275 1,290 5,103 5,065 adjustmentIncome before income 33,488 34,726 23,383 109,397 96,194 taxesIncome tax expense 6,319 6,833 3,864 20,806 15,829 Net income $ 27,169 $ 27,893 $ 19,519 $ 88,591 $ 80,365 Earnings per share - $ 0.88 $ 0.91 $ 0.62 $ 2.87 $ 2.57 basicEarnings per share - 0.87 0.90 0.62 2.85 2.55 diluted



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(1 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 CORPORATIONConsolidated Statements of Financial Condition (Unaudited)(Dollars in thousands, except share and per share data)

December31,2020 September30,2020 December31,2019ASSETS Cash and cash $ 605,565 $ 445,103 $ 110,190 equivalentsInvestmentsecurities 661,955 572,523 638,249 available-for-saleInvestmentsecurities 376,615 320,001 182,884 held-to-maturityNon-marketable 16,493 29,598 29,751 securitiesLoans 4,353,726 4,556,121 4,415,406 Allowance for credit (59,777 ) (60,979 ) (39,064 )lossesLoans, net 4,293,949 4,495,142 4,376,342 Loans held for sale 247,813 273,003 117,444 Other real estate 4,730 4,590 7,300 ownedPremises and 106,982 108,860 112,151 equipment, netGoodwill 115,027 115,027 115,027 Intangible assets, 17,928 15,017 11,361 netOther assets 212,893 221,812 194,813 Total assets $ 6,659,950 $ 6,600,676 $ 5,895,512 LIABILITIES AND SHAREHOLDERS' EQUITYLiabilities: Non-interest bearing $ 2,111,045 $ 1,533,676 $ 1,184,945 demand depositsInterest bearing 514,286 976,133 738,496 demand depositsSavings and money 2,064,769 2,079,585 1,755,538 marketTotal transaction 4,690,100 4,589,394 3,678,979 depositsTime deposits 986,132 1,027,066 1,058,153 Total deposits 5,676,232 5,616,460 4,737,132 Securities soldunder agreements to 22,897 23,904 56,935 repurchaseFederal Home Loan ? ? 207,675 Bank advancesOther liabilities 140,130 160,955 126,850 Total liabilities 5,839,259 5,801,319 5,128,592 Shareholders' equity:Common stock 515 515 515 Additional paid in 1,011,362 1,010,145 1,009,223 capitalRetained earnings 223,175 202,238 164,082 Treasury stock (424,127 ) (424,621 ) (408,962 )Accumulated othercomprehensive 9,766 11,080 2,062 income, net of taxTotal shareholders' 820,691 799,357 766,920 equityTotal liabilitiesand shareholders' $ 6,659,950 $ 6,600,676 $ 5,895,512 equitySHARE DATA Average basic shares 30,784,896 30,756,116 31,299,989 outstandingAverage diluted 31,032,648 30,924,223 31,525,911 shares outstandingEnding shares 30,634,291 30,594,412 31,176,627 outstandingCommon book value $ 26.79 $ 26.13 $ 24.60 per shareTangible common bookvalue per share^(1) 23.09 22.40 20.89 (non-GAAP)Tangible common bookvalue per share,excluding 22.77 22.04 20.83 accumulated othercomprehensive income^(1) (non-GAAP)CAPITAL RATIOS Average equity to 12.27 % 12.22 % 12.91 %average assetsTangible commonequity to tangible 10.80 % 10.57 % 11.27 %assets^(1)Tier 1 leverage 10.70 % 10.60 % 11.04 %ratioCommon equity tier 1risk-based capital 14.70 % 14.25 % 13.21 %ratioTier 1 risk-based 14.70 % 14.25 % 13.21 %capital ratioTotal risk-based 15.83 % 15.40 % 14.08 %capital ratio



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

NATIONAL BANK HOLDINGS CORPORATIONLoan Portfolio (Dollars in thousands)

Period End Loan Balances by Type

December31,2020 December31,2020 vs. September 30, vs. December 31, 2020 2019 December31,2020 September30,2020 % Change December31,2019 % ChangeOriginated: Commercial: Commercial and $ 1,248,530 $ 1,228,550 1.6 % $ 1,380,248 (9.5 )%industrialMunicipal and 870,410 883,065 (1.4 )% 833,707 4.4 %non-profitOwner-occupiedcommercial 464,417 460,487 0.9 % 414,477 12.0 %real estateFood and 205,189 210,818 (2.7 )% 245,320 (16.4 )%agribusinessPPP loans^(1) 176,106 348,257 (49.4 )% ? 100.0 %Total 2,964,652 3,131,177 (5.3 )% 2,873,752 3.2 %commercialCommercialreal estate 542,642 515,415 5.3 % 505,479 7.4 %non-owneroccupiedResidential 581,555 614,449 (5.4 )% 651,656 (10.8 )%real estateConsumer 18,581 20,196 (8.0 )% 21,030 (11.6 )%Total 4,107,430 4,281,237 (4.1 )% 4,051,917 1.4 %originated Acquired: Commercial: Commercial and 22,102 23,984 (7.8 )% 31,284 (29.4 )%industrialMunicipal and 381 576 (33.9 )% 3,819 (90.0 )%non-profitOwner-occupiedcommercial 51,821 55,929 (7.3 )% 75,645 (31.5 )%real estateFood and 5,108 5,740 (11.0 )% 7,807 (34.6 )%agribusinessTotal 79,412 86,229 (7.9 )% 118,555 (33.0 )%commercialCommercialreal estate 89,354 101,672 (12.1 )% 125,426 (28.8 )%non-owneroccupiedResidential 77,105 86,478 (10.8 )% 118,762 (35.1 )%real estateConsumer 425 505 (15.8 )% 746 (43.0 )%Total acquired 246,296 274,884 (10.4 )% 363,489 (32.2 )% Total loans $ 4,353,726 $ 4,556,121 (4.4 )% $ 4,415,406 (1.4 )%



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

Originations(1)

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



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

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

For the three months ended For the three months ended For the three months ended December31,2020 September30,2020 December31,2019 Average Average Average Average Average Average balance Interest rate balance Interest rate balance Interest rateInterest earning assets:Originated loans $ 4,129,155 $ 43,200 4.16 % $ 4,343,335 $ 40,973 3.75 % $ 4,002,813 $ 46,466 4.61 %FTE^(1)(2)Acquired loans 259,233 5,715 8.77 % 284,653 6,593 9.21 % 377,330 7,525 7.91 %Loans held for 248,326 1,699 2.72 % 230,390 1,683 2.91 % 181,550 1,657 3.62 %saleInvestmentsecurities 574,642 2,177 1.52 % 559,330 2,784 1.99 % 642,297 3,413 2.13 %available-for-saleInvestmentsecurities 369,812 1,410 1.53 % 242,511 1,253 2.07 % 187,274 1,257 2.68 %held-to-maturityOther securities 18,195 212 4.66 % 29,640 221 2.98 % 29,681 471 6.35 %Interest earningdeposits andsecurities 509,150 135 0.11 % 254,931 70 0.11 % 17,096 117 2.72 %purchased underagreements toresellTotal interestearning assets FTE $ 6,108,513 $ 54,548 3.55 % $ 5,944,790 $ 53,577 3.59 % $ 5,438,041 $ 60,906 4.44 %^(2)Cash and due from $ 73,768 $ 73,274 $ 76,568 banksOther assets 514,053 525,324 448,596 Allowance for (60,844 ) (60,372 ) (38,746 ) credit lossesTotal assets $ 6,635,490 $ 6,483,016 $ 5,924,459 Interest bearing liabilities:Interest bearingdemand, savings $ 2,746,597 $ 1,776 0.26 % $ 2,957,604 $ 1,990 0.27 % $ 2,429,417 $ 3,101 0.51 %and money marketdepositsTime deposits 1,008,297 2,949 1.16 % 1,038,983 3,501 1.34 % 1,062,511 4,464 1.67 %Securities soldunder agreements 23,410 7 0.12 % 22,667 10 0.18 % 57,870 149 1.02 %to repurchaseFederal Home Loan ? ? 0.00 % 1,141 86 29.99 % 301,433 1,514 1.99 %Bank advancesTotal interestbearing $ 3,778,304 $ 4,732 0.50 % $ 4,020,395 $ 5,587 0.55 % $ 3,851,231 $ 9,228 0.95 %liabilitiesDemand deposits $ 1,898,171 $ 1,515,058 $ 1,177,958 Other liabilities 144,532 155,205 130,576 Total liabilities 5,821,007 5,690,658 5,159,765 Shareholders' 814,483 792,358 764,694 equityTotal liabilitiesand shareholders' $ 6,635,490 $ 6,483,016 $ 5,924,459 equityNet interest $ 49,816 $ 47,990 $ 51,678 income FTE^(2)Interest rate 3.05 % 3.04 % 3.49 %spread FTE^(2)Net interest $ 2,330,209 $ 1,924,395 $ 1,586,810 earning assetsNet interest 3.24 % 3.21 % 3.77 %margin FTE^(2)Averagetransaction $ 4,644,768 $ 4,472,662 $ 3,607,375 depositsAverage total 5,653,065 5,511,645 4,669,886 depositsRatio of averageinterest earningassets to average 161.67 % 147.87 % 141.20 % interest bearingliabilities



(1 ) Originated loans are net of deferred loan fees, less costs, which are included in interest income over the life of the loan. Presented on a fully taxable equivalent basis using the statutory(2 ) tax rate of 21%. The tax equivalent adjustments included above are $1,260, $1,275 and $1,290 for the three months ended December 31, 2020, September 30, 2020 and December 31, 2019, respectively.

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

For the year ended December31,2020 For the year ended December31,2019 Average Average Average Average balance Interest rate balance Interest rateInterest earning assets:Originated loans $ 4,237,091 $ 171,592 4.05 % $ 3,838,229 $ 183,502 4.78 %FTE^(1)(2)Acquired loans 299,901 27,909 9.31 % 443,025 35,992 8.12 %Loans held for 185,182 5,628 3.04 % 113,183 4,407 3.89 %saleInvestmentsecurities 591,870 11,406 1.93 % 713,686 15,472 2.17 %available-for-saleInvestmentsecurities 248,006 5,099 2.06 % 207,784 5,825 2.80 %held-to-maturityOther securities 26,903 1,157 4.30 % 28,060 1,770 6.31 %Interest earningdeposits andsecurities 206,911 314 0.15 % 24,106 698 2.90 %purchased underagreements toresellTotal interestearning assets FTE $ 5,795,864 $ 223,105 3.85 % $ 5,368,073 $ 247,666 4.61 %^(2)Cash and due from $ 74,461 $ 76,788 banksOther assets 511,721 430,402 Allowance for (55,778 ) (38,142 ) credit lossesTotal assets $ 6,326,268 $ 5,837,121 Interest bearing liabilities:Interest bearingdemand, savings $ 2,730,857 $ 8,605 0.32 % $ 2,426,963 $ 13,277 0.55 %and money marketdepositsTime deposits 1,038,107 15,024 1.45 % 1,074,506 16,526 1.54 %Securities soldunder agreements 28,585 132 0.46 % 60,445 668 1.11 %to repurchaseFederal Home Loan 95,418 1,295 1.36 % 269,207 6,300 2.34 %Bank advancesTotal interestbearing $ 3,892,967 $ 25,056 0.64 % $ 3,831,121 $ 36,771 0.96 %liabilitiesDemand deposits $ 1,497,940 $ 1,159,080 Other liabilities 147,075 108,997 Total liabilities 5,537,982 5,099,198 Shareholders' 788,286 737,923 equityTotal liabilitiesand shareholders' $ 6,326,268 $ 5,837,121 equityNet interest $ 198,049 $ 210,895 income FTE^(2)Interest rate 3.21 % 3.65 %spread FTE^(2)Net interest $ 1,902,897 $ 1,536,952 earning assetsNet interest 3.42 % 3.93 %margin FTE^(2)Averagetransaction $ 4,228,797 $ 3,586,043 depositsAverage total 5,266,904 4,660,549 depositsRatio of averageinterest earningassets to average 148.88 % 140.12 % interest bearingliabilities



(1 ) Originated loans are net of deferred loan fees, less costs, which are included in interest income over the life of the loan. Presented on a fully taxable equivalent basis using the statutory(2 ) tax rate of 21%. The tax equivalent adjustments included above are $5,103 and $5,065 for the years ended December 31, 2020 and December 31, 2019, respectively.

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

Allowance for Credit Losses Analysis

Asofandforthethreemonthsended December31,2020 September30,2020 December31,2019Beginning allowance $ 60,979 $ 60,465 $ 38,710 for credit lossesCharge-offs (1,259 ) (619 ) (937 )Recoveries 57 133 111 Provision ? 1,000 1,180 Ending allowance forcredit losses $ 59,777 $ 60,979 $ 39,064 ("ACL")Ratio of annualizednet charge-offs to 0.11 % 0.04 % 0.07 %average total loansduring the periodRatio of annualizednet charge-offs toaverage total loans 0.11 % 0.04 % 0.07 %excluding PPP loansduring the periodRatio of ACL tototal loans 1.37 % 1.34 % 0.88 %outstanding atperiod endRatio of ACL tototal loansoutstanding 1.43 % 1.45 % 0.88 %excluding PPP loansat period endRatio of ACL tototal non-performing 293.21 % 322.95 % 179.62 %loans at period endTotal loans $ 4,353,726 $ 4,556,121 $ 4,415,406 Average total loans 4,431,694 4,677,630 4,401,803 during the periodAverage total loansexcluding PPP loans 4,160,520 4,329,458 4,401,803 during the periodTotal non-performing 20,387 18,882 21,748 loans

Past Due and Non-accrual Loans

December31,2020 September30,2020 December31,2019Loans 30-89days pastdue and $ 968 $ 6,587 $ 6,349 stillaccruinginterestLoans 90days pastdue and 162 161 1,662 stillaccruinginterestNon-accrual 20,387 18,882 21,748 loansTotal pastdue and $ 21,517 $ 25,630 $ 29,759 non-accrualloansTotal 90days pastdue andstillaccruing 0.47 % 0.42 % 0.53 %interest andnon-accrualloans tototal loans

Asset Quality Data

December31,2020 September30,2020 December31,2019Non-performing loans $ 20,387 $ 18,882 $ 21,748 OREO 4,730 4,590 7,300 Other repossessed 17 ? ? assetsTotal non-performing $ 25,134 $ 23,472 $ 29,048 assetsAccruing $ 13,945 $ 21,786 $ 6,885 restructured loansTotal non-performing 0.47 % 0.41 % 0.49 %loans to total loansTotal non-performingloans to total loans 0.49 % 0.45 % 0.49 %excluding PPP loansTotal non-performingassets to total 0.58 % 0.51 % 0.66 %loans and OREOTotal non-performingassets to total 0.60 % 0.56 % 0.66 %loans and OREOexcluding PPP loans

NATIONAL BANK HOLDINGS CORPORATIONKey Ratios

As of and for the three months ended As of and for the years ended December31, September30, December31, December31, December31, 2020 2020 2019 2020 2019Key Ratios^(1) Return on 1.63 % 1.71 % 1.31 % 1.40 % 1.38 %average assetsReturn onaverage 1.67 % 1.76 % 1.35 % 1.44 % 1.42 %tangibleassets^(2)Return onaveragetangible 1.68 % 1.78 % 1.35 % 1.47 % 1.43 %assets,adjusted^(2)Return on 13.27 % 14.00 % 10.13 % 11.24 % 10.89 %average equityReturn onaveragetangible 15.55 % 16.49 % 12.07 % 13.27 % 13.07 %common equity^(2)Return onaveragetangible 15.64 % 16.69 % 12.07 % 13.54 % 13.18 %common equity,adjusted^(2)Loan todeposit ratio 76.70 % 81.12 % 93.21 % 76.70 % 93.21 %(end ofperiod)Non-interestbearingdeposits to 37.19 % 27.31 % 25.01 % 37.19 % 25.01 %total deposits(end ofperiod)Net interest 3.16 % 3.13 % 3.68 % 3.33 % 3.83 %margin^(4)Net interestmargin FTE^(2) 3.24 % 3.21 % 3.77 % 3.42 % 3.93 %(4)Interest ratespread FTE^(2) 3.05 % 3.04 % 3.49 % 3.21 % 3.65 %(5)Yield onearning assets 3.47 % 3.50 % 4.35 % 3.76 % 4.52 %^(3)Yield onearning assets 3.55 % 3.59 % 4.44 % 3.85 % 4.61 %FTE^(2)(3)Cost ofinterestbearing 0.50 % 0.55 % 0.95 % 0.64 % 0.96 %liabilities^(3)Cost of 0.33 % 0.40 % 0.64 % 0.45 % 0.64 %depositsNon-interestincome to 40.11 % 48.13 % 28.19 % 41.46 % 28.18 %total revenueFTE^(2)Non-interestexpense to 2.90 % 3.39 % 3.09 % 3.26 % 3.10 %average assetsNon-interestexpense toaverage 2.89 % 3.37 % 3.09 % 3.22 % 3.08 %assets,adjusted^(2)Efficiency 58.76 % 60.30 % 64.82 % 61.52 % 62.22 %ratioEfficiency 57.87 % 59.47 % 63.66 % 60.59 % 61.15 %ratio FTE^(2)Efficiencyratio FTE, 57.62 % 59.01 % 63.66 % 59.90 % 60.84 %adjusted^(2) Total LoansAsset Quality Data^(6)(7)(8)Non-performingloans to total 0.47 % 0.41 % 0.49 % 0.47 % 0.49 %loansNon-performingloans to totalloans 0.49 % 0.45 % 0.49 % 0.49 % 0.49 %excluding PPPloansNon-performingassets to 0.58 % 0.51 % 0.66 % 0.58 % 0.66 %total loansand OREONon-performingassets tototal loans 0.60 % 0.56 % 0.66 % 0.60 % 0.66 %and OREOexcluding PPPloansAllowance forcredit losses 1.37 % 1.34 % 0.88 % 1.37 % 0.88 %to total loansAllowance forcredit lossesto total loans 1.43 % 1.45 % 0.88 % 1.43 % 0.88 %excluding PPPloansAllowance forcredit lossesto 293.21 % 322.95 % 179.62 % 293.21 % 179.62 %non-performingloansNetcharge-offs to 0.11 % 0.04 % 0.07 % 0.06 % 0.19 %average loans^(1)



(1 ) Quarter-to-date ratios are annualized.(2 ) Ratio represents non-GAAP financial measure. See non-GAAP reconciliations below. Interest earning assets include assets that earn interest/(3 ) accretion or dividends. Any market value adjustments on investment securities or loans are excluded from interest earning assets. Net interest margin represents net interest income, including(4 ) accretion income on interest earning assets, as a percentage of average interest earning assets. Interest rate spread represents the difference between the(5 ) weighted average yield on interest earning assets and the weighted average cost of interest bearing liabilities.(6 ) Non-performing loans consist of non-accruing loans and restructured loans on non-accrual.(7 ) Non-performing assets include non-performing loans and other real estate owned.(8 ) Total loans are net of unearned discounts and fees.

NATIONAL BANK HOLDINGS CORPORATIONNON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS(Dollars in thousands, except share and per share data)

Tangible Common Book Value Ratios

December31,2020 September30,2020 December31,2019Totalshareholders' $ 820,691 $ 799,357 $ 766,920 equityLess:goodwill andcore deposit (122,575 ) (122,871 ) (123,758 )intangibleassets, netAdd: deferredtax liability 9,155 8,927 8,241 related togoodwillTangiblecommon equity $ 707,271 $ 685,413 $ 651,403 (non-GAAP) Total assets $ 6,659,950 $ 6,600,676 $ 5,895,512 Less:goodwill andcore deposit (122,575 ) (122,871 ) (123,758 )intangibleassets, netAdd: deferredtax liability 9,155 8,927 8,241 related togoodwillTangibleassets $ 6,546,530 $ 6,486,732 $ 5,779,995 (non-GAAP) Tangiblecommon equityto tangible assetscalculations:Totalshareholders' 12.32 % 12.11 % 13.01 %equity tototal assetsLess: impactof goodwilland core (1.52 )% (1.54 )% (1.74 )%depositintangibleassets, netTangiblecommon equityto tangible 10.80 % 10.57 % 11.27 %assets(non-GAAP) Tangiblecommon bookvalue per sharecalculations:Tangiblecommon equity $ 707,271 $ 685,413 $ 651,403 (non-GAAP)Divided by:ending shares 30,634,291 30,594,412 31,176,627 outstandingTangiblecommon bookvalue per $ 23.09 $ 22.40 $ 20.89 share(non-GAAP) Tangiblecommon bookvalue pershare,excluding accumulatedothercomprehensiveincomecalculations:Tangiblecommon equity $ 707,271 $ 685,413 $ 651,403 (non-GAAP)Accumulatedothercomprehensive (9,766 ) (11,080 ) (2,062 )income, netof taxTangiblecommon bookvalue,excludingaccumulated 697,505 674,333 649,341 othercomprehensiveincome, netof tax(non-GAAP)Divided by:ending shares 30,634,291 30,594,412 31,176,627 outstandingTangiblecommon bookvalue pershare,excludingaccumulated $ 22.77 $ 22.04 $ 20.83 othercomprehensiveincome, netof tax(non-GAAP)

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 December31, September30, December31, December31, December31, 2020 2020 2019 2020 2019Net income $ 27,169 $ 27,893 $ 19,519 $ 88,591 $ 80,365 Add: impactof coredepositintangible 228 226 225 910 899 amortizationexpense,after taxNet incomeadjusted forimpact ofcore deposit $ 27,397 $ 28,119 $ 19,744 $ 89,501 $ 81,264 intangibleamortizationexpense,after tax Average $ 6,635,490 $ 6,483,016 $ 5,924,459 $ 6,326,268 $ 5,837,121 assetsLess: averagegoodwill andcore depositintangibleasset, net of (113,594 ) (114,122 ) (115,665 ) (114,031 ) (116,104 )deferred taxliabilityrelated togoodwillAveragetangible $ 6,521,896 $ 6,368,894 $ 5,808,794 $ 6,212,237 $ 5,721,017 assets(non-GAAP) Averageshareholders' $ 814,483 $ 792,358 $ 764,694 $ 788,286 $ 737,923 equityLess: averagegoodwill andcore depositintangibleasset, net of (113,594 ) (114,122 ) (115,665 ) (114,031 ) (116,104 )deferred taxliabilityrelated togoodwillAveragetangible $ 700,889 $ 678,236 $ 649,029 $ 674,255 $ 621,819 common equity(non-GAAP) Return onaverage 1.63 % 1.71 % 1.31 % 1.40 % 1.38 %assetsReturn onaveragetangible 1.67 % 1.76 % 1.35 % 1.44 % 1.42 %assets(non-GAAP)Return onaverage 13.27 % 14.00 % 10.13 % 11.24 % 10.89 %equityReturn onaveragetangible 15.55 % 16.49 % 12.07 % 13.27 % 13.07 %common equity(non-GAAP)

Fully Taxable Equivalent Yield on Earning Assets and Net Interest Margin

Asofandforthe three months ended As of and for the years ended December31, September30, December31, December31, December31, 2020 2020 2019 2020 2019Interest $ 53,288 $ 52,302 $ 59,616 $ 218,002 $ 242,601 incomeAdd:impact oftaxable 1,260 1,275 1,290 5,103 5,065 equivalentadjustmentInterestincome FTE $ 54,548 $ 53,577 $ 60,906 $ 223,105 $ 247,666 (non-GAAP) Netinterest $ 48,556 $ 46,715 $ 50,388 $ 192,946 $ 205,830 incomeAdd:impact oftaxable 1,260 1,275 1,290 5,103 5,065 equivalentadjustmentNetinterest $ 49,816 $ 47,990 $ 51,678 $ 198,049 $ 210,895 income FTE(non-GAAP) Averageearning $ 6,108,513 $ 5,944,790 $ 5,438,041 $ 5,795,864 $ 5,368,073 assetsYield onearning 3.47 % 3.50 % 4.35 % 3.76 % 4.52 %assetsYield onearning 3.55 % 3.59 % 4.44 % 3.85 % 4.61 %assets FTE(non-GAAP)Netinterest 3.16 % 3.13 % 3.68 % 3.33 % 3.83 %marginNetinterest 3.24 % 3.21 % 3.77 % 3.42 % 3.93 %margin FTE(non-GAAP)

Efficiency Ratio

As of and for the three months ended As of and for the years ended December31, September30, December31, December31, December31, 2020 2020 2019 2020 2019Net interest income $ 48,556 $ 46,715 $ 50,388 $ 192,946 $ 205,830 Add: impact oftaxable equivalent 1,260 1,275 1,290 5,103 5,065 adjustmentNet interest income, $ 49,816 $ 47,990 $ 51,678 $ 198,049 $ 210,895 FTE (non-GAAP) Non-interest income $ 33,357 $ 44,532 $ 20,282 $ 140,258 $ 82,752 Non-interest expense $ 48,425 $ 55,321 $ 46,107 $ 206,177 $ 180,745 Less: core depositintangible asset (296 ) (295 ) (296 ) (1,183 ) (1,183 )amortizationNon-interest expense,adjusted for core $ 48,129 $ 55,026 $ 45,811 $ 204,994 $ 179,562 deposit intangibleasset amortization Non-interest expense,adjusted for core $ 48,129 $ 55,026 $ 45,811 $ 204,994 $ 179,562 deposit intangibleasset amortizationBanking centerconsolidation-related (208 ) (432 ) ? (2,348 ) (898 )expenseAdjusted non-interest $ 47,921 $ 54,594 $ 45,811 $ 202,646 $ 178,664 expense (non-GAAP) Efficiency ratio 58.76 % 60.30 % 64.82 % 61.52 % 62.22 %Efficiency ratio FTE 57.87 % 59.47 % 63.66 % 60.59 % 61.15 %(non-GAAP)Adjusted efficiency 57.62 % 59.01 % 63.66 % 59.90 % 60.84 %ratio FTE (non-GAAP)

Adjusted Financial Results

As of and for the three months ended As of and for the years ended December31, September30, December31, December31, December31, 2020 2020 2019 2020 2019Adjustments to net income:Net income $ 27,169 $ 27,893 $ 19,519 $ 88,591 $ 80,365 Adjustments^(1)(2) 160 331 ? 1,806 689 Adjusted net income $ 27,329 $ 28,224 $ 19,519 $ 90,397 $ 81,054 (non-GAAP) Adjustments to earnings per share:Earnings per share - $ 0.87 $ 0.90 $ 0.62 $ 2.85 $ 2.55 dilutedAdjustments^(1)(2) 0.01 0.01 ? 0.06 0.02 Adjusted earnings pershare - diluted $ 0.88 $ 0.91 $ 0.62 $ 2.91 $ 2.57 (non-GAAP) Adjustments to returnon average tangible assets:Adjusted net income $ 27,329 $ 28,224 $ 19,519 $ 90,397 $ 81,054 (non-GAAP)Add: impact of coredeposit intangible 228 226 225 910 899 amortization expense,after taxNet income adjustedfor impact of coredeposit intangible 27,557 28,450 19,744 91,307 81,953 amortization expense,after taxAverage tangible 6,521,896 6,368,894 5,808,794 6,212,237 5,721,017 assets (non-GAAP)Adjusted return onaverage tangible 1.68 % 1.78 % 1.35 % 1.47 % 1.43 %assets (non-GAAP) Adjustments to returnon average tangible common equity:Net income adjustedfor impact of coredeposit intangible $ 27,557 $ 28,450 $ 19,744 $ 91,307 $ 81,953 amortization expense,after taxAverage tangiblecommon equity 700,889 678,236 649,029 674,255 621,819 (non-GAAP)Adjusted return onaverage tangible 15.64 % 16.69 % 12.07 % 13.54 % 13.18 %common equity(non-GAAP) Adjustments to non-interest expense:Non-interest expense $ 48,425 $ 55,321 $ 46,107 $ 206,177 $ 180,745 Adjustments^(1)(2) 208 432 ? 2,348 898 Adjusted non-interest 48,217 54,889 46,107 203,829 179,847 expense (non-GAAP)Non-interest expenseto average assets, 2.89 % 3.37 % 3.09 % 3.22 % 3.08 %adjusted (non-GAAP) (1) Adjustments: Non-interest expense adjustments:Banking centerconsolidation-related $ 208 $ 432 $ ? $ 2,348 $ 898 expenseTax expense impact (48 ) (101 ) ? (542 ) (209 )Adjustments $ 160 $ 331 $ ? $ 1,806 $ 689 (non-GAAP)



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

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