National Bank Holdings Stock

National Bank Holdings Corporation (NBHC) operates as a financial holding company.

The company is headquartered in Greenwood Village, Colorado, and its primary operations are conducted through its wholly owned subsidiaries, NBH Bank and Bank of Jackson Hole Trust ('the banks'). The company provides a variety of banking products and services to both commercial and consumer clients through a network of banking centers, located primarily in Colorado and the greater Kansas City region, Utah, Wyoming, Texas, New Mexico and Idaho, as well as through online and mobile banking products and services.

NBH Bank is a Colorado state-chartered bank and a member of the Federal Reserve Bank ('FRB') of Kansas City. The company operates under the following brand names as divisions of NBH Bank: in Colorado, Community Banks of Colorado and Community Banks Mortgage; in Kansas and Missouri, Bank Midwest and Bank Midwest Mortgage; in Wyoming, Bank of Jackson Hole and Bank of Jackson Hole Mortgage; and in Texas, Utah, New Mexico and Idaho, Hillcrest Bank and Hillcrest Bank Mortgage.

Bank of Jackson Hole Trust ('BOJHT') is a Wyoming state-chartered bank and a member of the Federal Reserve Bank of Kansas City. The company's trust and wealth business operates under the Wyoming charter as Bank of Jackson Hole Trust and Bank of Jackson Hole Trust and Wealth Partners.

The company continues to develop its digital solution 2UniFi, a national platform for providing banking services to small and medium-sized businesses, digital payment tools and financial services information management. 2Unifi, LLC is a wholly-owned subsidiary of NBHC with bank offerings provided through NBH Bank. These services will address borrowings, depository and cash management needs for the company's clients by providing digital access to financial services, real-time information and digital payment solutions. The company continues to focus on growing its core business while also innovating and building partnerships that will help the company delivers a comprehensive digital financial ecosystem.

On April 3, 2023, NBH Bank completed the acquisition of Cambr Solutions, LLC ('Cambr'). Cambr is a deposit acquisition and processing platform that generates core deposits from accounts offered through embedded finance companies.

Market Area

The company's core markets are broadly defined as Colorado, the greater Kansas City region, Utah, Wyoming, Texas, New Mexico and Idaho. The company is the fourth largest banking center network among Colorado-based banks and the sixth largest banking center network in the greater Kansas City metropolitan statistical area ('MSA') among Missouri- and Kansas-based banks ranked by deposits as of June 30, 2023 (the last date as of which data are available). Other major MSAs in which the company operates include Salt Lake City, Utah; Jackson, Wyoming; Dallas-Fort Worth-Arlington, Texas; Boise City, Idaho and Austin-Round Rock, Texas.

An integral component of the company's foundation and growth strategy has been to capitalize on market opportunities and acquire financial services franchises.

Business Strategy

The company's focus is on building organic growth through strong banking relationships with small and medium-sized businesses and consumers in the company's primary markets.

The key components of the company's strategic plan are to focus on client-centered, relationship-driven banking strategy; the expansion of commercial banking, business banking and specialty businesses; the expansion of commercial banking, business banking and specialty businesses; expansion through the company's digital solution 2UniFi; continue to strengthen profitability through organic growth and operating efficiencies; maintain conservative risk profile and sound risk management practices; and pursue disciplined acquisitions or other expansionary opportunities.

Products and Services

Through NBH Bank, the company's primary business is to offer a full range of banking products and financial services to the company's commercial, business and consumer clients, who are predominantly located in Colorado, the greater Kansas City region, Utah, Wyoming, Texas, New Mexico and Idaho. Through the Bank of Jackson Hole Trust, the company's primary business is to provide trust and wealth management services to the company's clients. The company conducts its banking business with various banking centers across the company's footprint. The company's distribution network also includes various ATMs, as well as fully integrated online banking and mobile banking services. The company offers a high level of personalized service to the company's clients through its relationship managers and banking center associates. A personalized banking relationship that includes multiple services, such as loan and deposit services, online and mobile banking solutions, treasury management products and services and trust and wealth management services, is the key to profitable and long-lasting client relationships and that the company's local focus and decision making provide the company with a competitive advantage over banks that do not have these attributes.

The company offer a variety of products and services that are focused on the following areas:

Commercial and Specialty Banking

The company's commercial bankers focus on small- and medium-sized businesses and commercial real estate investors/developers with an advisory approach that emphasizes understanding the client's business and offering a complete suite of loan, deposit and treasury management products and services. The company's commercial relationship managers offer a wide range of commercial loan products, including:

Commercial and Industrial Loans-The company originates commercial and industrial loans and leases, including working capital loans, equipment loans, lender finance loans, food and agribusiness loans, government and non-profit loans, owner occupied commercial real estate loans and other commercial loans and leases.

Working capital loans generally have terms of one to three years, are usually secured by accounts receivable and inventory and carry the personal guarantees of the principals of the business. Equipment loans are generally secured by the financed equipment at advance rates that are appropriate for the equipment type. In the case of owner-occupied commercial real estate loans, the company is usually the primary provider of financial services for the company and/or the principals and the primary source of repayment is through the cash flows generated by the borrowers' business operations. Owner-occupied commercial real estate loans are typically secured by a first lien mortgage on real property plus assignments of all leases related to the properties. As of December 31, 2023, substantially all of the company's commercial and industrial loans were secured.

Non-Owner Occupied Commercial Real Estate Loans-Non-owner occupied commercial real estate loans ('CRE') consist of loans to finance the purchase of commercial real estate and development loans. The company's non-owner occupied CRE loans include commercial properties, such as office buildings, warehouse/distribution buildings, multi-family, hospitality and retail buildings. These loans are typically secured by a first lien mortgage or deed of trust, as well as assignments of all related leases.

Small Business Administration Loans- The company offers a range of the U.S. Small Business Administration, or SBA, loans to support small businesses and entrepreneurs seeking growth capital, working capital, or other capital investments. As a Preferred Lender Provider of the SBA, the company is able to expedite SBA loan approval, closing, and servicing functions through delegated authority to underwrite and approve loans on behalf of the SBA. The company utilizes the SBA 7(a), SBA 504, SBA Express, and SBA CAPLine loan programs. In addition to the SBA programs, the company originates the U.S. Department of Agriculture and Farm Service Agency loans.

Commercial Deposit and Treasury Management Products (including business online and mobile banking)-The company's commercial bankers are focused on providing value-added deposit products to the company's clients that optimize their cash management program. The company is focused on full-relationship banking, including banking core operating accounts and ancillary accounts. The company also provides its commercial clients with money market accounts and short-term repurchase reserve accounts depending on their individual needs. In addition, the company provides a wide array of treasury management solutions to the company's clients, including business online and mobile banking, commercial credit card services, wire transfers, automated clearing house services, electronic bill payment, lock box services, remote deposit capture services, merchant processing services, cash vault, controlled disbursements, fraud prevention services through positive pay and other auxiliary services, such as account reconciliation, collections, repurchase accounts, zero balance accounts and sweep accounts.

Business Loans-Business loans consist of term loans, line of credit, and real estate secured loans. Business loans also assist in the growth of the company's deposits because many business loan borrowers establish noninterest-bearing and interest-bearing demand deposit accounts and treasury management relationships with the company.

Residential and Personal Banking

The company's personal bankers focus on knowing their clients in order to best meet their financial needs, offering a full complement of loan, deposit and online and mobile banking solutions. The company strives to do business in the areas served by its banking centers, which is also where the company's marketing is focused, and the vast majority of the company's new loan and deposit clients are located in existing market areas.

All of the company's newly originated consumer loans are on a direct to consumer basis. The company offers a variety of consumer loans, including:

Residential Real Estate Loans-Residential real estate loans consist of loans secured by the primary or secondary residence of the borrower, as well as properties the borrower holds for investment. These loans consist of closed loans, which are typically amortizing over a 10 to 30-year term. The company has residential banking products, servicing capabilities and residential loan origination channels. In addition to the referral business through the company's existing consumer client base, the company has a dedicated team of mortgage bankers who focus origination efforts primarily on new purchase activity and secondarily on refinance activity. The company also offers open- and closed-ended home equity loans, which are loans generally secured by second lien positions on residential real estate, and residential construction loans to consumers and builders for the construction of residential real estate. The company does not originate or purchase negatively amortizing or sub-prime residential loans.

Consumer Loans-Consumer loans are structured as small personal lines of credit and term loans, with the latter generally bearing interest at a higher rate and having a shorter term than residential mortgage loans. Consumer loans are both secured (for example by deposit accounts, brokerage accounts or automobiles) and unsecured and carry either a fixed rate or variable rate. Examples of the company's consumer loans include home improvement loans not secured by real estate, new and used automobile loans and personal lines of credit.

Deposit Products (including online and mobile banking)-The company offers a variety of deposit products to its clients, including checking accounts, savings accounts, money market accounts, health savings accounts and other deposit accounts, including fixed-rate, fixed maturity time deposits ranging in terms from three months to five years, and individual retirement accounts. The company view deposits as an important part of the overall client relationship and believe they provide opportunities to cross-sell other products and services. The company's deposits are primarily obtained from areas surrounding the company's banking centers.

The company also offers comprehensive, user-friendly mobile and online banking platforms allowing the company's clients to pay bills, check statements, deposit checks and transfer funds, amongst other features, online or on-the-go.

Cambr Deposit Services

Cambr is a digital deposit acquisition and processing platform that is designed to gather deposits from accounts offered by fintech and embedded finance companies. The deposits offer an alternative to traditional wholesale funding sources and provide liquidity to banks within the Cambr network. The platform provides clients with an opportunity to generate increased returns on deposits placed into the network while ensuring the safety of Federal Deposit Insurance Corporation ('FDIC') insurance.

Trust and Wealth Management Services

Through the Bank of Jackson Hole Trust, the company provides trust, estate and wealth management services. Acting as a trust fiduciary, the company's trust team provides tailored professional services in the best interest of each trust beneficiary while avoiding conflicts of interest. Through the company's wealth management services, the company offers a customized strategy for each of its clients that supports their long-term financial goals. The company manages investment portfolios for individuals, trusts, endowments, charities and entities, and retirement accounts. The company's trust and wealth team rounds out the full-service offerings to provide the complete spectrum of tools and support required for all the company's clients' financial needs.

Lending Activities

The company's loan portfolio includes commercial and industrial loans, commercial real estate loans, residential real estate loans, business loans and consumer loans.

Investment Securities

As of December 31, 2023, the company's investment securities included U.S. treasury securities; mortgage-backed securities, such as residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises, and other residential MBS issued or guaranteed by U.S. Government agencies or sponsored enterprises; municipal securities; corporate debt securities; and other securities.

Supervision and Regulation

As a bank holding company, the company is subject to inspection, examination, supervision and regulation by the Board of Governors of the Federal Reserve System (the 'Federal Reserve'). The company holds two banking subsidiaries, NBH Bank and Bank of Jackson Hole Trust.

As a bank holding company, the company is subject to regulation under the Bank Holding Company Act ('BHCA') and to supervision, examination, and enforcement by the Federal Reserve.

As a financial holding company, the company is authorized to engage in a broader set of financial activities than a bank holding company that has not elected to be a treated as a financial holding company, including insurance underwriting and broker-dealer services, as well as activities that are jointly determined by the Federal Reserve and the U.S. Treasury to be financial in nature or incidental to such financial activity.

Maintaining the company's financial holding company status requires that the company and its bank subsidiaries, remain 'well-capitalized' and 'well-managed' as defined by regulation and that the company's bank subsidiaries maintain at least a 'satisfactory' rating under the CRA.

The company's bank subsidiaries are NBH Bank and BOJHT. NBH Bank is a Colorado state-chartered bank and also a member of the Federal Reserve Bank of Kansas City. As such, NBH Bank is subject to examination, supervision and regulation by both the Colorado Division of Banking and the Federal Reserve. Bank of Jackson Hole Trust, is a Wyoming state-chartered bank and also a member of the Federal Reserve Bank of Kansas City. As such, BOJHT is subject to examination, supervision and regulation by both the Wyoming Division of Banking and the Federal Reserve. NBH Bank's and BOJHT's deposits are insured by the FDIC through the DIF, in the manner and to the extent provided by law. As insured banks, NBH Bank and BOJHT are subject to the provisions of the Federal Deposit Insurance Act, as amended (the 'FDI Act'), and the FDIC's implementing regulations thereunder.

The FDIC Improvement Act of 1991 also requires that the banks form an independent audit committee consisting of outside directors only, or that the company's audit committee be entirely independent.

The Dodd-Frank Act codified the requirement that holding companies, like the company, serve as a source of financial strength for their subsidiary depository institutions, by providing financial assistance to its insured depository institution subsidiaries in the event of financial distress.

The company must publicly disclose the terms of various Community Reinvestment Act-related agreements.

History

The company was founded in 2009. It was incorporated in the state of Delaware in 2009. The company was formerly known as NBH Holdings Corp. and changed its name to National Bank Holdings Corporation in 2012.