DENVER, Jan. 23, 2020 (GLOBE NEWSWIRE) -- National Bank Holdings Corporation (NYSE: NBHC) reported:

		For the quarter												For the year								For the year - adjusted (1)
		4Q19				3Q19				4Q18				2019				2018				2019				2018
Net income ($000's)		$	19,519			$	21,642			$	17,235			$	80,365			$	61,451			$	80,365			$	67,772
Earnings per share - diluted		$	0.62			$	0.69			$	0.55			$	2.55			$	1.95			$	2.55			$	2.16
Return on average tangible assets(2)			1.35	%			1.51	%			1.26	%			1.42	%			1.15	%			1.42	%			1.26	%
Return on average tangible common equity(2)			12.07	%			13.68	%			12.29	%			13.07	%			11.60	%			13.07	%			12.76	%

                                                      

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

Full Year 2019 Highlights

• Record full year earnings of $2.55 per diluted share, 18.1% growth over 2018.
• Fourth quarter 2019 average earning assets increased 5.5% over the fourth quarter 2018.
• Grew loan balances 8.5% driven by $1.2 billion in new loan originations.
• Grew fourth quarter average non-interest bearing deposits 6.7% compared to the prior year.
• Increased non-interest income $12.0 million, or 16.9%, over last year.

In announcing these results, Chief Executive Officer Tim Laney shared, “We are proud to finish 2019 with record full-year earnings of $2.55 per share. Our teams delivered record-breaking fee income and full year loan growth of 8.5%, fueled by a second consecutive year of $1.2 billion of new loan originations. We built upon our relationship-based banking model with fourth quarter average non-interest bearing deposit growth of 6.7% compared to the prior year. We remain very focused on strong credit quality and expense management.”

Mr. Laney added, “Completing 2019 marks the 10th year in our Company’s exciting history. During our first decade, we completed six acquisitions and built a bank with a balance sheet and capital position that we believe will withstand any economic environment. We are proud of our industry-leading credit quality metrics and our high-quality client relationships. We have positioned ourselves in strong markets and created meaningful value for our clients, associates, communities and shareholders. We begin the next decade with a solid foundation, strong capital and momentum for future growth.”

Fourth Quarter 2019 Results
(All comparisons refer to the third quarter of 2019, except as noted)

Net income totaled $19.5 million during the fourth quarter of 2019, or $0.62 per diluted share, compared to $21.6 million during the last quarter, or $0.69 per diluted share. The decrease from the prior quarter is primarily driven by $6.5 million of OREO gains recorded during the third quarter of 2019. The return on average tangible assets was 1.35% compared to 1.51% last quarter and the return on average tangible common equity was 12.07% compared to 13.68% last quarter.

Net Interest Income
Fully taxable equivalent net interest income totaled $51.7 million and decreased $1.4 million, or 10.3% annualized, driven by lower earning asset yields. Fully taxable equivalent net interest margin narrowed 14 basis points from the prior quarter to 3.77%, entirely driven by the two 25 basis point fed funds rate cuts in September and October. The yield on earnings assets decreased 17 basis points and was partially offset by a five basis point decrease in the cost of funds.

Loans
Originated loans and acquired loans not accounted for under 310-30 (“acquired loans”) ended the quarter at $4.4 billion, increasing $16.6 million, or 1.5% annualized, led by originated and acquired commercial loan growth of $44.8 million, or 6.1% annualized. Total fourth quarter loan originations were $269.5 million, led by commercial loan originations of $182.5 million.

Acquired loans accounted for under 310-30 totaled $54.1 million at December 31, 2019 and decreased $3.1 million from the third quarter of 2019.

Asset Quality and Provision for Loan Losses
Provision for loan losses of $1.2 million was recorded during the quarter to support originated loan growth and net charge-offs. Annualized net charge-offs on originated and acquired loans totaled 0.08%, decreasing 58 basis points from the prior quarter. Non-performing originated and acquired loans (comprised of non-accrual loans and non-accrual TDRs) improved to 0.50% of total originated and acquired loans, compared to 0.58% at September 30, 2019. The originated and acquired allowance for loan losses remained consistent with the prior quarter at 0.89%.

Deposits
Average non-interest bearing demand deposits decreased $15.4 million, or 5.1% annualized. Average transaction deposits (defined as total deposits less time deposits) decreased $24.4 million, or 2.7% annualized, and average total deposits decreased $35.0 million to $4.7 billion, or 3.0% annualized. Spot transaction deposits increased $12.4 million to $3.7 billion at December 31, 2019, improving the mix of transaction deposits to total deposits to 77.7% compared to 77.5% at September 30, 2019.

The cost of transaction deposits decreased five basis points from the prior quarter to 0.34%. The cost of total deposits decreased three basis points from the prior quarter to 0.64%.

Non-Interest Income
Non-interest income totaled $20.3 million and decreased $4.5 million primarily due to seasonally lower mortgage banking income of $4.4 million. Service charges and bank card fees decreased a combined $0.3 million, and OREO-related income increased $0.1 million.

Non-Interest Expense
Non-interest expense totaled $46.1 million and increased $2.3 million from the prior quarter due to gains on the sale of OREO properties totaling $6.5 million during the prior quarter. Salaries and benefits decreased $2.9 million primarily due to lower mortgage banking commissions. Other non-interest expense decreased $1.5 million due to positive swap fair value adjustments of $1.1 million and a $0.9 million fair value impairment charge recorded in the third quarter of 2019, related to the consolidation of four banking centers in our Colorado and Kansas City markets.

Income tax expense totaled $3.9 million during the fourth quarter of 2019, compared to $5.4 million during the prior quarter. The effective tax rate for the fourth quarter of 2019 was 16.5%, compared to 20.0% during the third quarter of 2019.

Capital
Capital ratios continue to be strong and in excess of federal bank regulatory agency “well capitalized” thresholds. The leverage ratio at December 31, 2019 for the consolidated company and NBH Bank was 11.04% and 9.12%, respectively. Shareholders’ equity totaled $766.9 million at December 31, 2019 and increased $13.6 million from the prior quarter, primarily due to higher retained earnings.

Common book value per share increased $0.43 to $24.60 at December 31, 2019. The tangible common book value per share was $20.89 at December 31, 2019 and increased $0.44 due to higher retained earnings. Excluding accumulated other comprehensive income, the tangible book value was $20.83.

Year-Over-Year Review
(All comparisons refer to the full year 2018, except as noted)

Net income totaled a record $80.4 million during 2019, or $2.55 per diluted share, compared to $61.5 million during 2018, or $1.95 per diluted share. Adjusting for the Peoples acquisition, net income totaled $67.8 million, or $2.16 per diluted share during 2018. The return on average tangible assets was 1.42% compared to 1.15% last year, and the return on average tangible common equity was 13.07% compared to 11.60% last year. Adjusting for the Peoples acquisition, the return on average tangible assets was 1.26% and the return on average tangible common equity was 12.76% last year.

Fully taxable equivalent net interest income totaled $210.9 million and increased $9.0 million, or 4.4%. Average earning assets increased $236.4 million, or 4.6%, primarily driven by average originated and acquired loan growth of $492.2 million, partially offset by a decrease in average investment securities of $221.1 million. The fully taxable equivalent net interest margin remained consistent at 3.93% as the increase in average earning assets and earning asset yields were offset by an increase in the cost of funds. The yield on earning assets increased 21 basis points, led by a 28 basis point increase in the originated loan portfolio yields due to higher new loan yields. The cost of funds increased 33 basis points to 0.96% for the year ended December 31, 2019.

Originated and acquired loans outstanding totaled $4.4 billion and increased $339.9 million, or 8.5%, led by originated and acquired commercial loan growth of $352.8 million, or 13.4%. New loan originations for the year totaled $1.2 billion, led by commercial loan originations of $781.7 million. The 310-30 loan portfolio declined $16.8 million, or 23.7%, to $54.1 million at December 31, 2019.

Average non-interest bearing demand deposits increased $76.9 million, or 7.1%. Average transaction deposits increased $85.6 million, or 2.4%, and average total deposits increased $27.3 million, or 0.6%, to $4.7 billion. Spot transaction deposits increased $223.9 million to $3.7 billion at December 31, 2019, improving the mix of transaction deposits to total deposits to 77.7% from 76.2% at December 31, 2018. The mix of non-interest bearing demand deposits to total deposits improved to 25.0% from 23.6% at December 31, 2018.

Provision for loan loss expense was $11.6 million, compared to $5.2 million during 2018. Provision for loan loss expense during 2019 included $6.6 million related to the charge-off of one previously acquired commercial loan. Net charge-offs on originated and acquired loans totaled 0.20%, compared to 0.02% during 2018, increasing primarily due to the one acquired commercial loan charge-off. Non-performing originated and acquired loans decreased to 0.50% from 0.61% at December 31, 2018. The originated and acquired allowance for loan losses totaled 0.89% of originated and acquired loans compared to 0.88% at December 31, 2018.

Non-interest income totaled $82.8 million during 2019, representing an increase of $12.0 million, or 16.9%, from last year. Mortgage banking income increased $12.2 million, or 40.7%, other non-interest income increased $0.4 million, and service charges and bank card fees remained consistent with last year. Income on OREO properties decreased $0.6 million during the year.

Non-interest expense totaled $180.7 million during 2019, representing a decrease of $8.6 million, or 4.5%, driven by a $6.7 million increase in net gains on the sale of OREO properties and efficiencies gained from the integration of the Peoples acquisition. Salaries and benefits increased $7.8 million primarily due to higher mortgage banking commissions. Other non-interest expense included banking center consolidation expenses of $0.9 million recorded during 2019. Additionally, included in the prior year were $8.0 million of non-recurring acquisition costs.

Income tax expense totaled $15.8 million during 2019, compared to $12.2 million last year, an increase of $3.6 million. Included in income tax expense was $2.2 million and $1.3 million of tax benefit from stock compensation activity during 2019 and 2018, respectively. Adjusting for the stock compensation activity, the effective tax rate for 2019 was 18.7%, compared to 18.3% in the prior year. The lower rate compared to the statutory rate reflects the continued success of our tax strategies and tax exempt income.

Conference Call
Management will host a conference call to review the results at 11:00 a.m. Eastern Time on Friday, January 24, 2020. Interested parties may listen to this call by dialing (877) 272-6762 / (615) 800-6832 (International) using the Conference ID of 6668206 and asking for the NBHC Fourth Quarter Earnings conference call. A telephonic replay of the call will be available beginning approximately four hours after the call’s completion through February 6, 2020, by dialing (855) 859-2056 (United States) / (404) 537-3406 (International) using the Conference ID of 6668206. The earnings release and an on-line replay of the call will also be available on the Company’s website at www.nationalbankholdings.com by visiting the investor relations area.

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

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

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

About National Bank Holdings Corporation
National Bank Holdings Corporation is a bank holding company created to build a leading community bank franchise delivering high quality client service and committed to shareholder results. Through its bank subsidiary, NBH Bank, National Bank Holdings Corporation operates a network of 101 banking centers, serving individual consumers, small, medium and large businesses, and government and non-profit entities. The bank’s core geographic footprint consists of Colorado, the greater Kansas City region, New Mexico, Texas and Utah. NBH Bank operates under the following brand names: Community Banks of Colorado in Colorado, Bank Midwest in Kansas and Missouri and Hillcrest Bank in New Mexico, Texas and Utah. It also operates as Community Banks Mortgage, a division of NBH Bank, in Colorado. Additional information about National Bank Holdings Corporation can be found at www.nationalbankholdings.com.

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

Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contain words such as “anticipate,” “believe,” “can,” “would,” “should,” “could,” “may,” “predict,” “seek,” “potential,” “will,” “estimate,” “target,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “intend” or similar expressions that relate to the Company’s strategy, plans or intentions. Forward-looking statements involve certain important risks, uncertainties and other factors, any of which could cause actual results to differ materially from those in such statements. Such factors include, without limitation, the “Risk Factors” referenced in our most recent Form 10-K filed with the Securities and Exchange Commission (SEC), other risks and uncertainties listed from time to time in our reports and documents filed with the SEC, and the following factors: ability to execute our business strategy; business and economic conditions; effects of a prolonged government shutdown; economic, market, operational, liquidity, credit and interest rate risks associated with the Company’s business; effects of any changes in trade, monetary and fiscal policies and laws; changes imposed by regulatory agencies to increase capital standards; effects of inflation, as well as, interest rate, securities market and monetary supply fluctuations; changes in the economy or supply-demand imbalances affecting local real estate values; changes in consumer spending, borrowings and savings habits; the Company’s ability to identify potential candidates for, consummate, integrate and realize operating efficiencies from, acquisitions, consolidations and other expansion opportunities; the Company's ability to realize anticipated benefits from enhancements or updates to its core operating systems from time to time without significant change in client service or risk to the Company's control environment; the Company's dependence on information technology and telecommunications systems of third party service providers and the risk of systems failures, interruptions or breaches of security; the Company’s ability to achieve organic loan and deposit growth and the composition of such growth; changes in sources and uses of funds; increased competition in the financial services industry; the effect of changes in accounting policies and practices; the share price of the Company’s stock; the Company's ability to realize deferred tax assets or the need for a valuation allowance; continued consolidation in the financial services industry; ability to maintain or increase market share and control expenses; costs and effects of changes in laws and regulations and of other legal and regulatory developments; technological changes; the timely development and acceptance of new products and services; the Company’s continued ability to attract, hire and maintain qualified personnel; ability to implement and/or improve operational management and other internal risk controls and processes and reporting system and procedures; regulatory limitations on dividends from the Company's bank subsidiary; changes in estimates of future loan reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; widespread natural and other disasters, dislocations, political instability, acts of war or terrorist activities, cyberattacks or international hostilities; impact of reputational risk; and success at managing the risks involved in the foregoing items. The Company can give no assurance that any goal or plan or expectation set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements. The forward-looking statements are made as of the date of this press release, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.

Contact:
Analysts/Institutional Investors: Aldis Birkans, Chief Financial Officer, Treasurer, (720) 529-3314, ir@nationalbankholdings.com
Media: Whitney Bartelli, Chief Marketing Officer, (816) 298-2203, media@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,
	2019			2019				2018				2019				2018
Total interest and dividend income	$	59,616		$	61,372			$	57,780			$	242,601			$	221,391
Total interest expense		9,228			9,587				7,148				36,771				23,954
Net interest income		50,388			51,785				50,632				205,830				197,437
Taxable equivalent adjustment		1,290			1,264				1,195				5,065				4,482
Net interest income FTE(1)		51,678			53,049				51,827				210,895				201,919
Provision for loan losses		1,180			5,690				2,476				11,643				5,197
Net interest income after provision for loan losses FTE(1)		50,498			47,359				49,351				199,252				196,722
Non-interest income:
Service charges		4,416			4,617				4,619				17,895				18,092
Bank card fees		3,649			3,752				3,769				14,595				14,489
Mortgage banking income		10,309			14,702				5,406				42,346				30,107
Other non-interest income		1,740			1,661				1,519				7,601				7,170
OREO-related income		168			27				4				315				917
Total non-interest income		20,282			24,759				15,317				82,752				70,775
Non-interest expense:
Salaries and benefits		30,653			33,522				27,029				122,732				114,939
Occupancy and equipment		6,908			6,825				6,423				27,336				28,493
Professional fees		658			743				1,373				3,256				6,059
Other non-interest expense		6,849			8,320				7,453				30,245				35,612
Problem asset workout		736			602				328				3,186				2,549
Loss (gain) on sale of OREO, net		7			(6,514	)			(102	)			(7,193	)			(488	)
Core deposit intangible asset amortization		296			295				353				1,183				2,170
Total non-interest expense		46,107			43,793				42,857				180,745				189,334
Income before income taxes FTE(1)		24,673			28,325				21,811				101,259				78,163
Taxable equivalent adjustment		1,290			1,264				1,195				5,065				4,482
Income before income taxes		23,383			27,061				20,616				96,194				73,681
Income tax expense		3,864			5,419				3,381				15,829				12,230
Net income	$	19,519		$	21,642			$	17,235			$	80,365			$	61,451
Earnings per share - basic	$	0.62		$	0.69			$	0.56			$	2.57			$	2.00
Earnings per share - diluted	$	0.62		$	0.69			$	0.55			$	2.55			$	1.95

                                                      

(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. See non-GAAP reconciliations below.

NATIONAL BANK HOLDINGS CORPORATION Consolidated Statements of Financial Condition (Unaudited) (Dollars in thousands, except share and per share data)
	December 31, 2019				September 30, 2019				December 31, 2018
ASSETS
Cash and cash equivalents	$	110,190			$	116,919			$	109,556
Investment securities available-for-sale		638,249				661,129				791,102
Investment securities held-to-maturity		182,884				189,982				235,398
Non-marketable securities		29,751				27,277				27,555
Loans		4,415,406				4,401,917				4,092,308
Allowance for loan losses		(39,064	)			(38,710	)			(35,692	)
Loans, net		4,376,342				4,363,207				4,056,616
Loans held for sale		117,444				204,602				48,120
Other real estate owned		7,300				7,904				10,596
Premises and equipment, net		112,151				110,692				109,986
Goodwill		115,027				115,027				115,027
Intangible assets, net		11,361				11,578				13,470
Other assets		194,813				181,733				159,240
Total assets	$	5,895,512			$	5,990,050			$	5,676,666
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Non-interest bearing demand deposits	$	1,184,945			$	1,237,189			$	1,072,029
Interest bearing demand deposits		738,496				681,113				688,255
Savings and money market		1,755,538				1,748,257				1,694,808
Total transaction deposits		3,678,979				3,666,559				3,455,092
Time deposits		1,058,153				1,067,301				1,080,529
Total deposits		4,737,132				4,733,860				4,535,621
Securities sold under agreements to repurchase		56,935				62,735				66,047
Federal Home Loan Bank advances		207,675				303,897				301,660
Other liabilities		126,850				136,232				78,332
Total liabilities		5,128,592				5,236,724				4,981,660
Shareholders' equity:
Common stock		515				515				515
Additional paid in capital		1,009,223				1,007,628				1,014,399
Retained earnings		164,082				150,866				106,990
Treasury stock		(408,962	)			(408,770	)			(415,623	)
Accumulated other comprehensive income (loss), net of tax		2,062				3,087				(11,275	)
Total shareholders' equity		766,920				753,326				695,006
Total liabilities and shareholders' equity	$	5,895,512			$	5,990,050			$	5,676,666
SHARE DATA
Average basic shares outstanding		31,299,989				31,281,970				30,888,238
Average diluted shares outstanding		31,525,911				31,508,999				31,492,342
Ending shares outstanding		31,176,627				31,169,086				30,769,063
Common book value per share	$	24.60			$	24.17			$	22.59
Tangible common book value per share(1) (non-GAAP)	$	20.89			$	20.45			$	18.77
Tangible common book value per share, excluding accumulated other comprehensive income (loss)(1) (non-GAAP)	$	20.83			$	20.35			$	19.13
CAPITAL RATIOS
Average equity to average assets		12.91	%			12.79	%			12.15	%
Tangible common equity to tangible assets(1)		11.27	%			10.85	%			10.39	%
Leverage ratio		11.04	%			10.89	%			10.51	%
Tier 1 risk-based capital ratio		13.21	%			12.93	%			12.91	%
Total risk-based capital ratio		14.08	%			13.79	%			13.79	%

                                                      

(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, 2019						December 31, 2019
							vs. September 30, 2019						vs. December 31, 2018
	December 31, 2019			September 30, 2019			% Change			December 31, 2018			% Change
Originated:
Commercial:
Commercial and industrial	$	2,171,436		$	2,167,076		0.2	%		$	1,877,221		15.7	%
Owner-occupied commercial real estate		414,477			378,956		9.4	%			337,258		22.9	%
Food and agriculture		245,320			230,869		6.3	%			217,294		12.9	%
Energy		42,519			46,302		(8.2	)%			49,204		(13.6	)%
Total commercial		2,873,752			2,823,203		1.8	%			2,480,977		15.8	%
Commercial real estate non-owner occupied		505,479			501,771		0.7	%			407,431		24.1	%
Residential real estate		651,656			659,246		(1.2	)%			657,633		(0.9	)%
Consumer		21,030			21,378		(1.6	)%			22,895		(8.1	)%
Total originated		4,051,917			4,005,598		1.2	%			3,568,936		13.5	%
Acquired:
Commercial:
Commercial and industrial		34,561			37,613		(8.1	)%			53,926		(35.9	)%
Owner-occupied commercial real estate		65,429			67,673		(3.3	)%			84,408		(22.5	)%
Food and agriculture		3,265			3,716		(12.1	)%			4,862		(32.8	)%
Total commercial		103,255			109,002		(5.3	)%			143,196		(27.9	)%
Commercial real estate non-owner occupied		92,639			104,949		(11.7	)%			144,388		(35.8	)%
Residential real estate		112,755			124,354		(9.3	)%			163,187		(30.9	)%
Consumer		746			815		(8.5	)%			1,722		(56.7	)%
Total acquired		309,395			339,120		(8.8	)%			452,493		(31.6	)%
ASC 310-30 loans		54,094			57,199		(5.4	)%			70,879		(23.7	)%
Total loans	$	4,415,406		$	4,401,917		0.3	%		$	4,092,308		7.9	%

Originated and Acquired Loan Balances by Loan Segment
							December 31, 2019						December 31, 2019
							vs. September 30, 2019						vs. December 31, 2018
	December 31, 2019			September 30, 2019			% Change			December 31, 2018			% Change
Commercial	$	2,977,007		$	2,932,205		1.5	%		$	2,624,173		13.4	%
Commercial real estate non-owner occupied		598,118			606,720		(1.4	)%			551,819		8.4	%
Residential real estate		764,411			783,600		(2.4	)%			820,820		(6.9	)%
Consumer		21,776			22,193		(1.9	)%			24,617		(11.5	)%
Total originated and acquired loans	$	4,361,312		$	4,344,718		0.4	%		$	4,021,429		8.5	%

Originations(1)
	Fourth quarter				Third quarter				Second quarter				First quarter				Fourth quarter
	2019				2019				2019				2019				2018
Commercial:
Commercial and industrial	$	118,969			$	172,969			$	163,138			$	153,547			$	213,335
Owner occupied commercial real estate		46,965				16,149				41,380				26,405				34,727
Food and agriculture		20,348				(4,894	)			18,217				15,213				14,046
Energy		(3,807	)			3,067				(12,098	)			6,138				7,640
Total commercial		182,475				187,291				210,637				201,303				269,748
Commercial real estate non-owner occupied		41,256				79,929				36,632				69,125				41,031
Residential real estate		43,493				49,022				40,012				38,627				51,017
Consumer		2,315				2,986				3,264				1,958				2,592
Total	$	269,539			$	319,228			$	290,545			$	311,013			$	364,388

                                                      

(1)  Originations are defined as closed end funded loans and net fundings under revolving lines of credit. Net funding under revolving lines of credit were $1,756, $37,062, $48,955, $105,235 and $6,263 as of the fourth quarter 2019, third quarter 2019, second quarter 2019, first quarter 2019 and fourth quarter 2018, 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, 2019											September 30, 2019											December 31, 2018
	Average								Average			Average								Average			Average								Average
	balance				Interest				rate			balance				Interest				rate			balance				Interest				rate
Interest earning assets:
Originated loans FTE(1)(2)	$	4,002,813			$	46,466			4.61	%		$	3,886,503			$	46,736			4.77	%		$	3,409,996			$	40,347			4.69	%
Acquired loans		321,561				4,716			5.82	%			366,522				5,656			6.12	%			482,774				7,102			5.84	%
ASC 310-30 loans		55,769				2,809			20.15	%			58,557				3,251			22.21	%			72,634				4,146			22.83	%
Loans held for sale		181,550				1,657			3.62	%			139,281				1,328			3.78	%			56,714				730			5.11	%
Investment securities available-for-sale		642,297				3,413			2.13	%			687,989				3,696			2.15	%			826,462				4,396			2.13	%
Investment securities held-to-maturity		187,274				1,257			2.68	%			199,519				1,384			2.77	%			243,421				1,724			2.83	%
Other securities		29,681				471			6.35	%			27,227				418			6.14	%			21,457				335			6.25	%
Interest earning deposits and securities purchased under agreements to resell		17,096				117			2.72	%			19,809				167			3.34	%			39,476				195			1.96	%
Total interest earning assets FTE(2)	$	5,438,041			$	60,906			4.44	%		$	5,385,407			$	62,636			4.61	%		$	5,152,934			$	58,975			4.54	%
Cash and due from banks	$	76,568										$	76,866										$	79,747
Other assets		448,596											443,724											422,136
Allowance for loan losses		(38,746	)										(40,212	)										(34,366	)
Total assets	$	5,924,459										$	5,865,785										$	5,620,451
Interest bearing liabilities:
Interest bearing demand, savings and money market deposits	$	2,429,417			$	3,101			0.51	%		$	2,438,399			$	3,609			0.59	%		$	2,415,627			$	2,716			0.45	%
Time deposits		1,062,511				4,464			1.67	%			1,073,140				4,365			1.61	%			1,099,205				3,375			1.22	%
Securities sold under agreements to repurchase		57,870				149			1.02	%			65,722				204			1.23	%			63,837				158			0.98	%
Federal Home Loan Bank advances		301,433				1,514			1.99	%			231,926				1,409			2.41	%			160,575				899			2.22	%
Total interest bearing liabilities	$	3,851,231			$	9,228			0.95	%		$	3,809,187			$	9,587			1.00	%		$	3,739,244			$	7,148			0.76	%
Demand deposits	$	1,177,958										$	1,193,357										$	1,104,411
Other liabilities		130,576											112,927											94,070
Total liabilities		5,159,765											5,115,471											4,937,725
Shareholders' equity		764,694											750,314											682,726
Total liabilities and shareholders' equity	$	5,924,459										$	5,865,785										$	5,620,451
Net interest income FTE(2)					$	51,678										$	53,049										$	51,827
Interest rate spread FTE(2)									3.49	%										3.61	%										3.78	%
Net interest earning assets	$	1,586,810										$	1,576,220										$	1,413,690
Net interest margin FTE(2)									3.77	%										3.91	%										3.99	%
Average transaction deposits	$	3,607,375										$	3,631,756										$	3,520,038
Average total deposits	$	4,669,886										$	4,704,896										$	4,619,243
Ratio of average interest earning assets to average interest bearing liabilities		141.20	%										141.38	%										137.81	%

                                                      

(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 $1,290, $1,264 and $1,195 for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018, respectively.

NATIONAL BANK HOLDINGS CORPORATION Summary of Net Interest Margin (Dollars in thousands)
	For the year ended December 31, 2019											For the year ended December 31, 2018
	Average								Average			Average								Average
	balance				Interest				rate			balance				Interest				rate
Interest earning assets:
Originated loans FTE(1)(2)	$	3,838,229			$	183,502			4.78	%		$	3,166,374			$	142,461			4.50	%
Acquired loans		382,806				22,951			6.00	%			562,443				32,610			5.80	%
ASC 310-30 loans		60,219				13,041			21.66	%			90,786				19,155			21.10	%
Loans held for sale		113,183				4,407			3.89	%			73,644				3,380			4.59	%
Investment securities available-for-sale		713,686				15,472			2.17	%			883,737				18,493			2.09	%
Investment securities held-to-maturity		207,784				5,825			2.80	%			258,809				7,252			2.80	%
Other securities		28,060				1,770			6.31	%			18,093				1,096			6.06	%
Interest earning deposits and securities purchased under agreements to resell		24,106				698			2.90	%			77,808				1,426			1.83	%
Total interest earning assets FTE(2)	$	5,368,073			$	247,666			4.61	%		$	5,131,694			$	225,873			4.40	%
Cash and due from banks	$	76,788										$	88,847
Other assets		430,402											419,607
Allowance for loan losses		(38,142	)										(32,616	)
Total assets	$	5,837,121										$	5,607,532
Interest bearing liabilities:
Interest bearing demand, savings and money market deposits	$	2,426,963			$	13,277			0.55	%		$	2,418,326			$	8,758			0.36	%
Time deposits		1,074,506				16,526			1.54	%			1,132,748				12,283			1.08	%
Securities sold under agreements to repurchase		60,445				668			1.11	%			87,691				295			0.34	%
Federal Home Loan Bank advances		269,207				6,300			2.34	%			133,932				2,618			1.95	%
Total interest bearing liabilities	$	3,831,121			$	36,771			0.96	%		$	3,772,697			$	23,954			0.63	%
Demand deposits	$	1,159,080										$	1,082,158
Other liabilities		108,997											90,257
Total liabilities		5,099,198											4,945,112
Shareholders' equity		737,923											662,420
Total liabilities and shareholders' equity	$	5,837,121										$	5,607,532
Net interest income FTE(2)					$	210,895										$	201,919
Interest rate spread FTE(2)									3.65	%										3.77	%
Net interest earning assets	$	1,536,952										$	1,358,997
Net interest margin FTE(2)									3.93	%										3.93	%
Average transaction deposits	$	3,586,043										$	3,500,484
Average total deposits	$	4,660,549										$	4,633,232
Ratio of average interest earning assets to average interest bearing liabilities		140.12	%										136.02	%

                                                      

(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 $5,065 and $4,482 for the years ended December 31, 2019 and December 31, 2018, respectively.

NATIONAL BANK HOLDINGS CORPORATION Allowance for Loan Losses and Asset Quality (Dollars in thousands)
Allowance for Loan Losses Analysis
	As of and for the three months ended
	December 31, 2019												September 30, 2019												December 31, 2018
	Originated				ASC								Originated				ASC								Originated				ASC
	and acquired				310-30								and acquired				310-30								and acquired				310-30
	loans				loans				Total				loans				loans				Total				loans				loans				Total
Beginning allowance for loan losses	$	38,530			$	180			$	38,710			$	39,891			$	191			$	40,082			$	33,606			$	207			$	33,813
Charge-offs		(937	)			—				(937	)			(7,101	)			—				(7,101	)			(652	)			—				(652	)
Recoveries		111				—				111				39				—				39				55				—				55
Provision (recoupment)		1,180				—				1,180				5,701				(11	)			5,690				2,452				24				2,476
Ending ALL	$	38,884			$	180			$	39,064			$	38,530			$	180			$	38,710			$	35,461			$	231			$	35,692
Ratio of annualized net charge-offs to average total loans during the period, respectively		0.08	%			0.00	%			0.07	%			0.66	%			0.00	%			0.65	%			0.06	%			0.00	%			0.06	%
Ratio of ALL to total loans outstanding at period end, respectively		0.89	%			0.33	%			0.88	%			0.89	%			0.31	%			0.88	%			0.88	%			0.33	%			0.87	%
Ratio of ALL to total non-performing loans at period end, respectively(1)		178.79	%			0.00	%			179.62	%			151.70	%			0.00	%			152.41	%			145.00	%			0.00	%			145.94	%
Total loans	$	4,361,312			$	54,094			$	4,415,406			$	4,344,718			$	57,199			$	4,401,917			$	4,021,429			$	70,879			$	4,092,308
Average total loans during the period	$	4,346,034			$	55,769			$	4,401,803			$	4,271,033			$	58,557			$	4,329,590			$	3,892,770			$	72,634			$	3,965,404
Total non-performing loans(1)	$	21,748			$	—			$	21,748			$	25,398			$	—			$	25,398			$	24,456			$	—			$	24,456

                                                     

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

Originated and Acquired Loans
	December 31, 2019				September 30, 2019				December 31, 2018
Loans 30-89 days past due and still accruing interest	$	5,772			$	6,723			$	4,610
Loans 90 days past due and still accruing interest		958				1,968				895
Non-accrual loans		21,748				25,398				24,456
Total past due and non-accrual loans	$	28,478			$	34,089			$	29,961
Total 90 days past due and still accruing interest and non-accrual loans to total originated and acquired loans		0.52	%			0.63	%			0.63	%
Total non-accrual loans to total originated and acquired loans		0.50	%			0.58	%			0.61	%

NATIONAL BANK HOLDINGS CORPORATION Asset Quality (Dollars in thousands)
Asset Quality Data
	December 31, 2019				September 30, 2019				December 31, 2018
Non-performing loans	$	21,748			$	25,398			$	24,456
OREO:
Originated and acquired		3,367				3,656				4,992
Transferred from 310-30 loans		3,933				4,248				5,604
Total OREO		7,300				7,904				10,596
Total non-performing assets	$	29,048			$	33,302			$	35,052
Accruing restructured loans	$	6,885			$	7,384			$	5,944
Total non-performing loans to total loans		0.49	%			0.58	%			0.60	%
Total non-performing assets to total loans and OREO		0.66	%			0.76	%			0.85	%
Total non-performing assets (excluding OREO transferred from 310-30 loans) to total loans and OREO (excluding OREO transferred from 310-30)		0.57	%			0.66	%			0.72	%

NATIONAL BANK HOLDINGS CORPORATION Key Ratios
	As of and for the three months ended									As of and for the years ended
	December 31,			September 30,			December 31,			December 31,			December 31,
	2019			2019			2018			2019			2018
Key Ratios(1)
Return on average assets	1.31	%		1.46	%		1.22	%		1.38	%		1.10	%
Return on average tangible assets(2)	1.35	%		1.51	%		1.26	%		1.42	%		1.15	%
Return on average tangible assets, adjusted(2)	1.35	%		1.51	%		1.26	%		1.42	%		1.26	%
Return on average equity	10.13	%		11.44	%		10.02	%		10.89	%		9.28	%
Return on average tangible common equity(2)	12.07	%		13.68	%		12.29	%		13.07	%		11.60	%
Return on average tangible common equity, adjusted(2)	12.07	%		13.68	%		12.29	%		13.07	%		12.76	%
Loan to deposit ratio (end of period)	93.21	%		92.99	%		90.23	%		93.21	%		90.23	%
Non-interest bearing deposits to total deposits (end of period)	25.01	%		26.13	%		23.64	%		25.01	%		23.64	%
Net interest margin(4)	3.68	%		3.81	%		3.90	%		3.83	%		3.85	%
Net interest margin FTE(2)(4)	3.77	%		3.91	%		3.99	%		3.93	%		3.93	%
Interest rate spread FTE(2)(5)	3.49	%		3.61	%		3.78	%		3.65	%		3.77	%
Yield on earning assets(3)	4.35	%		4.52	%		4.45	%		4.52	%		4.31	%
Yield on earning assets FTE(2)(3)	4.44	%		4.61	%		4.54	%		4.61	%		4.40	%
Cost of interest bearing liabilities(3)	0.95	%		1.00	%		0.76	%		0.96	%		0.63	%
Cost of deposits	0.64	%		0.67	%		0.52	%		0.64	%		0.45	%
Non-interest income to total revenue FTE(2)	28.19	%		31.82	%		22.81	%		28.18	%		25.95	%
Non-interest expense to average assets	3.09	%		2.96	%		3.03	%		3.10	%		3.38	%
Non-interest expense to average assets, adjusted(2)	3.09	%		2.96	%		3.03	%		3.10	%		3.23	%
Efficiency ratio	64.82	%		56.83	%		64.45	%		62.22	%		69.78	%
Efficiency ratio FTE(2)	63.66	%		55.90	%		63.30	%		61.15	%		68.64	%
Efficiency ratio FTE, adjusted for acquisition-related costs(2)	63.66	%		55.90	%		63.30	%		61.15	%		65.72	%
Originated and Acquired Loans Asset Quality Data(6)(7)(8)
Non-performing loans to total originated and acquired loans	0.50	%		0.58	%		0.61	%		0.50	%		0.61	%
Allowance for loan losses to total originated and acquired loans	0.89	%		0.89	%		0.88	%		0.89	%		0.88	%
Allowance for loan losses to non-performing loans	178.79	%		151.70	%		145.00	%		178.79	%		145.00	%
Net charge-offs to average loans(1)	0.08	%		0.66	%		0.06	%		0.20	%		0.02	%
Total Loans Asset Quality Data(6)(7)(8)
Non-performing loans to total loans	0.49	%		0.58	%		0.60	%		0.49	%		0.60	%
Non-performing assets to total loans and OREO	0.66	%		0.76	%		0.85	%		0.66	%		0.85	%
Allowance for loan losses to total loans	0.88	%		0.88	%		0.87	%		0.88	%		0.87	%
Allowance for loan losses to non-performing loans	179.62	%		152.41	%		145.94	%		179.62	%		145.94	%
Net charge-offs to average loans(1)	0.07	%		0.65	%		0.06	%		0.19	%		0.02	%

                                                      

(1)  Quarter-to-date ratios are annualized.
(2)  Ratio represents non-GAAP financial measure. See non-GAAP reconciliations below.
(3)  Interest earning assets include assets that earn interest/accretion or dividends. Any market value adjustments on investment securities or loans are excluded from interest earning assets.
(4)  Net interest margin represents net interest income, including accretion income on interest earning assets, as a percentage of average interest earning assets.
(5)  Interest rate spread represents the difference between the weighted average yield on interest earning assets and the weighted average cost of interest bearing liabilities.
(6)  Non-performing loans consist of non-accruing loans and restructured loans on non-accrual, but exclude any loans accounted for under ASC 310-30 in which the pool is still performing. These ratios may, therefore, not be comparable to similar ratios of our peers.
(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, 2019				September 30, 2019				December 31, 2018
Total shareholders' equity	$	766,920			$	753,326			$	695,006
Less: goodwill and core deposit intangible assets, net		(123,758	)			(124,054	)			(124,941	)
Add: deferred tax liability related to goodwill		8,241				8,012				7,327
Tangible common equity (non-GAAP)	$	651,403			$	637,284			$	577,392
Total assets	$	5,895,512			$	5,990,050			$	5,676,666
Less: goodwill and core deposit intangible assets, net		(123,758	)			(124,054	)			(124,941	)
Add: deferred tax liability related to goodwill		8,241				8,012				7,327
Tangible assets (non-GAAP)	$	5,779,995			$	5,874,008			$	5,559,052
Tangible common equity to tangible assets calculations:
Total shareholders' equity to total assets		13.01	%			12.58	%			12.24	%
Less: impact of goodwill and core deposit intangible assets, net		(1.74	)%			(1.73	)%			(1.85	)%
Tangible common equity to tangible assets (non-GAAP)		11.27	%			10.85	%			10.39	%
Tangible common book value per share calculations:
Tangible common equity (non-GAAP)	$	651,403			$	637,284			$	577,392
Divided by: ending shares outstanding		31,176,627				31,169,086				30,769,063
Tangible common book value per share (non-GAAP)	$	20.89			$	20.45			$	18.77
Tangible common book value per share, excluding accumulated other comprehensive (income) loss calculations:
Tangible common equity (non-GAAP)	$	651,403			$	637,284			$	577,392
Accumulated other comprehensive (income) loss, net of tax		(2,062	)			(3,087	)			11,275
Tangible common book value, excluding accumulated other comprehensive (income) loss, net of tax (non-GAAP)		649,341				634,197				588,667
Divided by: ending shares outstanding		31,176,627				31,169,086				30,769,063
Tangible common book value per share, excluding accumulated other comprehensive (income) loss, net of tax (non-GAAP)	$	20.83			$	20.35			$	19.13

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,
	2019				2019				2018				2019				2018
Net income	$	19,519			$	21,642			$	17,235			$	80,365			$	61,451
Add: impact of core deposit intangible amortization expense, after tax		225				224				268				899				1,649
Net income adjusted for impact of core deposit intangible amortization expense, after tax	$	19,744			$	21,866			$	17,503			$	81,264			$	63,100
Average assets	$	5,924,459			$	5,865,785			$	5,620,451			$	5,837,121			$	5,607,532
Less: average goodwill and core deposit intangible asset, net of deferred tax liability related to goodwill		(115,665	)			(116,188	)			(117,760	)			(116,104	)			(118,546	)
Average tangible assets (non-GAAP)	$	5,808,794			$	5,749,597			$	5,502,691			$	5,721,017			$	5,488,986
Average shareholders' equity	$	764,694			$	750,314			$	682,726			$	737,923			$	662,420
Less: average goodwill and core deposit intangible asset, net of deferred tax liability related to goodwill		(115,665	)			(116,188	)			(117,760	)			(116,104	)			(118,546	)
Average tangible common equity (non-GAAP)	$	649,029			$	634,126			$	564,966			$	621,819			$	543,874
Return on average assets		1.31	%			1.46	%			1.22	%			1.38	%			1.10	%
Return on average tangible assets (non-GAAP)		1.35	%			1.51	%			1.26	%			1.42	%			1.15	%
Return on average equity		10.13	%			11.44	%			10.02	%			10.89	%			9.28	%
Return on average tangible common equity (non-GAAP)		12.07	%			13.68	%			12.29	%			13.07	%			11.60	%

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,
	2019				2019				2018				2019				2018
Interest income	$	59,616			$	61,372			$	57,780			$	242,601			$	221,391
Add: impact of taxable equivalent adjustment		1,290				1,264				1,195				5,065				4,482
Interest income FTE (non-GAAP)	$	60,906			$	62,636			$	58,975			$	247,666			$	225,873
Net interest income	$	50,388			$	51,785			$	50,632			$	205,830			$	197,437
Add: impact of taxable equivalent adjustment		1,290				1,264				1,195				5,065				4,482
Net interest income FTE (non-GAAP)	$	51,678			$	53,049			$	51,827			$	210,895			$	201,919
Average earning assets	$	5,438,041			$	5,385,407			$	5,152,934			$	5,368,073			$	5,131,694
Yield on earning assets		4.35	%			4.52	%			4.45	%			4.52	%			4.31	%
Yield on earning assets FTE (non-GAAP)		4.44	%			4.61	%			4.54	%			4.61	%			4.40	%
Net interest margin		3.68	%			3.81	%			3.90	%			3.83	%			3.85	%
Net interest margin FTE (non-GAAP)		3.77	%			3.91	%			3.99	%			3.93	%			3.93	%

Efficiency Ratio
	As of and for the three months ended												As of and for the years ended
	December 31,				September 30,				December 31,				December 31,				December 31,
	2019				2019				2018				2019				2018
Net interest income	$	50,388			$	51,785			$	50,632			$	205,830			$	197,437
Add: impact of taxable equivalent adjustment		1,290				1,264				1,195				5,065				4,482
Net interest income, FTE (non-GAAP)	$	51,678			$	53,049			$	51,827			$	210,895			$	201,919
Non-interest income	$	20,282			$	24,759			$	15,317			$	82,752			$	70,775
Non-interest expense	$	46,107			$	43,793			$	42,857			$	180,745			$	189,334
Less: core deposit intangible asset amortization		(296	)			(295	)			(353	)			(1,183	)			(2,170	)
Non-interest expense, adjusted for core deposit intangible asset amortization	$	45,811			$	43,498			$	42,504			$	179,562			$	187,164
Non-interest expense, adjusted for core deposit intangible asset amortization	$	45,811			$	43,498			$	42,504			$	179,562			$	187,164
Non-recurring Peoples acquisition-related expenses		—				—				—				—				(7,957	)
Adjusted non-interest expense (non-GAAP)	$	45,811			$	43,498			$	42,504			$	179,562			$	179,207
Efficiency ratio		64.82	%			56.83	%			64.45	%			62.22	%			69.78	%
Efficiency ratio FTE (non-GAAP)		63.66	%			55.90	%			63.30	%			61.15	%			68.64	%
Adjusted efficiency ratio FTE (non-GAAP)		63.66	%			55.90	%			63.30	%			61.15	%			65.72	%

Adjusted Financial Results
	As of and for the three months ended												As of and for the years ended
	December 31,				September 30,				December 31,				December 31,				December 31,
	2019				2019				2018				2019				2018
Adjustments to net income:
Net income	$	19,519			$	21,642			$	17,235			$	80,365			$	61,451
Adjustments(1)		—				—				—				—				6,321
Adjusted net income (non-GAAP)	$	19,519			$	21,642			$	17,235			$	80,365			$	67,772
Adjustments to earnings per share:
Earnings per share - diluted	$	0.62			$	0.69			$	0.55			$	2.55			$	1.95
Adjustments(1)		—				—				—				—				0.21
Adjusted earnings per share - diluted (non-GAAP)	$	0.62			$	0.69			$	0.55			$	2.55			$	2.16
Adjustments to return on average tangible assets:
Adjusted net income (non-GAAP)	$	19,519			$	21,642			$	17,235			$	80,365			$	67,772
Add: impact of core deposit intangible amortization expense, after tax		225				224				268				899				1,649
Net income adjusted for impact of core deposit intangible amortization expense, after tax		19,744				21,866				17,503				81,264				69,421
Average tangible assets (non-GAAP)		5,808,794				5,749,597				5,502,691				5,721,017				5,488,986
Adjusted return on average tangible assets (non-GAAP)		1.35	%			1.51	%			1.26	%			1.42	%			1.26	%
Adjustments to return on average tangible common equity:
Net income adjusted for impact of core deposit intangible amortization expense, after tax	$	19,744			$	21,866			$	17,503			$	81,264			$	69,421
Average tangible common equity (non-GAAP)		649,029				634,126				564,966				621,819				543,874
Adjusted return on average tangible common equity (non-GAAP)		12.07	%			13.68	%			12.29	%			13.07	%			12.76	%
Adjustments to non-interest expense:
Non-interest expense	$	46,107			$	43,793			$	42,857			$	180,745			$	189,334
Adjustments(1)		—				—				—				—				7,957
Adjusted non-interest expense (non-GAAP)		46,107				43,793				42,857				180,745				181,377
Non-interest expense to average assets, adjusted (non-GAAP)		3.09	%			2.96	%			3.03	%			3.10	%			3.23	%
(1) Adjustments:
Non-interest expense adjustments:
Non-recurring Peoples acquisition-related expenses	$	—			$	—			$	—			$	—			$	7,957
Total pre-tax adjustments (non-GAAP)		—				—				—				—				7,957
Collective tax expense impact		—				—				—				—				(1,636	)
Adjustments (non-GAAP)	$	—			$	—			$	—			$	—			$	6,321