National Bank Holdings Corporation

Good morning, everyone, and welcome to the National Bank Holdings Corporation 2020 Fourth Quarter Earnings Call. My name is Mariama, and I will be your conference operator for today. At this time, all participants are in a listen-only mode. We will conduct a question and answer session following the prepared remarks. As a reminder, this conference is being recorded for replay purposes. I would like to remind you that this conference call will contain forward-looking statements including but not limited to statements regarding the company's strategy, loans, deposits, capital, net interest income, non-interest income, margins, allowance, taxes, and non-interest expense. Actual results could differ materially from those discussed today. These forward-looking statements are subject to risks and uncertainties. and other factors which are disclosed in more detail in the company's most recent filings with the U.S. Securities and Exchange Commission. These statements speak only as of the date of this call and National Bank Holdings Corporation undertakes no obligation to update or revise these statements. In addition, the call today will reference certain non-GAAP measures which National Bank Holdings Corporation believes provide useful information for investors. Reconciliations of these non-GAAP financial measures to the gap measures are provided in the news release posted on the investor relations section of www.nationalbankholdings.com. It is now my pleasure to turn the call over and introduce National Bank Holdings Corporation's Chairman, President and CEO, Mr. Tim Laney.

Thank you, Miryama. Good morning and thanks for joining National Bank Holdings' fourth quarter and full year 2020 earnings call. I have with me our Chief Financial Officer, Aldous Berkins, and Rick Newfield, our Chief Risk Management Officer. I'm pleased to report record full-year earnings of $2.85 per share, growing tangible book $2.20 during the year to $23.09 per share. In the face of unprecedented pandemic-related challenges, my teammates came together to serve our clients and communities, all while taking care of each other. We continue to benefit from having strong banking teams operating in high-performing U.S. markets. We believe our relationship banking model, coupled with a disciplined focus on building a diverse and granular loan portfolio, bodes well for our future. Under CECL, we billed approximately $17.6 million in additional provision for loan losses during 2020. while realizing actual net charge-offs of just $2.7 million, or only six basis points of total loans. We actively supported our client engagement in the Paycheck Protection Program, and to date, we've helped over 75% of our participating clients engage in the forgiveness process. Before turning the call over to Rick, I want to thank my teammates for their intense focus on realizing solid growth while at the same time prudently examining every opportunity to increase our productivity.

Rick? Yeah, thank you, Tim, and good morning, everyone. I'll cover two areas in my comments. First, I'll briefly summarize our asset quality trends during 2020. Second, I'll describe the actions we continue to take to reduce risk on our balance sheet and position our company to navigate sustained economic uncertainty while working to prudently support our clients. Despite the unique challenges presented by the COVID-19 pandemic, our asset quality remained strong during 2020. This is demonstrated by our ability to reduce non-performing assets 13.5% during the year with a non-performing asset ratio of 0.60% at December 31, 2020. Furthermore, as Tim shared in his comments, we accomplished this while only incurring six basis points of net charge-offs for the year. I'll also note that we ended 2020 with only three basis points of past dues 30 days or greater, the lowest level in our company's history. These credit trends reflect the conservative underwriting standards we've maintained since our company's formation, as well as the enhanced loan portfolio management we implemented in March. I believe being in markets which have generally fared better with the pandemic, as evidenced by unemployment levels lower than national averages, is also favorably impacting our loan book and underlying clients. Tim, myself, and our banking teams continued our intensified portfolio management through the year and are maintaining this robust vigilance currently. This enables us to quickly detect credit deterioration and take action proactively where needed. The bottom line is our strong credit metrics and loan portfolio monitoring have positioned us very well as we've entered 2021. I'll now turn the call over to Albus.