Fb Financial Corporation · NYSE:FBK
Fb Financial — Keefe, Bruyette & Woods 2018 Community Bank Investor Conference
29 slides from Fb Financial's conference presentation, Jul 31, 2018
Slide 1: Third Quarter 2018 Investor Presentation
Third Quarter 2018 Investor Presentation July 31, 2018
Slide 2: Forward looking statements
Forward looking statements Certain statements contained in this investor presentation are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements inclu
Slide 3: Use of non-GAAP financial measures
Use of non-GAAP financial measures This investor presentation contains certain financial measures that are not measures recognized under U.S. generally accepted accounting principles (GAAP) and therefore are considered non-GAAP financial measures. The Company’s management uses these non-GAAP financi
Slide 4: Strategic drivers
Strategic drivers Experienced Senior Management Team Elite Financial Strategic M&A Performer Scalable Banking and Great Place to Work Mortgage Platforms Local Decision Makers in Attractive Metro and Community Markets 3
Slide 5: Over 110 years of history in Tennessee
Over 110 years of history in Tennessee Organic growth Acquisitions Other 1990: 2001: 2004: 2008: 2014: 2015: 2016: 2018: Jim Ayers Opened branches Opened branch in Opened two Opened branch Awarded “Top Rebranded to FB Completed acquired sole in Nashville and Knoxville branches in in Huntsville, Work
Slide 6: Snapshot of FB Financial today
Snapshot of FB Financial today Company overview Current organizational structure Second largest Nashville-headquartered bank and third largest Tennessee-based bank 100% stockholder of FirstBank Originally chartered in 1906, one of the longest continually operated banks in Tennessee Completed t
Slide 7: A leading community bank headquartered in Tennessee
A leading community bank headquartered in Tennessee Top 10 banks in Tennessee¹ Top 10 banks under $25bn assets in Tennessee¹ Deposit Percent of Deposit Percent of TN TN Branches market company Branches market company Rank Name Headquarters deposits Rank Name Headquarters deposits (#) share deposits
Slide 8: Attractive footprint with balance between stable community markets and high growth metropolitan markets
Attractive footprint with balance between stable community markets and high growth metropolitan markets Our current footprint1 Market rank by deposits: Nashville (13th) Nashville MSA Chattanooga (7th) Knoxville MSA Jackson (3rd) Memphis (23rd) Knoxville (10th) Jackson MSA Huntsville (1
Slide 9: Well positioned in attractive metropolitan markets
Well positioned in attractive metropolitan markets Nashville rankings: “The new 'it' City” – The New York Times1 Chattanooga 4th largest MSA in TN Metro for professional and Most attractive mid-sized #1 business service jobs2 #2 cities for business3 Diverse economy with over 24,000 businesses
Slide 10: 1H 2018 highlights
1H 2018 highlights Key highlights Financial results Adjusted diluted EPS1 of $1.38, resulting in adjusted Six months ended ROAA1 of 1.85% June 30, 2018 Non-GAAP Loans (HFI) grew to $3.4 billion, a 73.3% increase from adjusted Reported 2Q 2017; grew 15.8% annualized from 4Q 2017 results1 GAAP res
Slide 11: Consistently delivering balanced profitability and growth
Consistently delivering balanced profitability and growth Pro forma return on average assets, adjusted1 1.85% 1.46% 1.52% 1.21% 0.91% 0.84% 0.64% 2012 2013 2014 2015 2016 2017 1H18 Drivers of profitability Loans / deposits Net interest margin Noninterest income ($mm) NPLs (HFI) / loans (HFI) (%) 4.1
Slide 12: Consistent loan growth and balanced portfolio
Consistent loan growth and balanced portfolio Total loan growth1 ($mm) and commercial real estate concentration % of risk-based Capital Commercial real estate (CRE) concentration2 Pro Forma 12/31/17 6/30/18 6/30/183 $3,167 $3,416 C&D loans subject to 100% 96% 105% 100% risk-based capital limit $1,70
Slide 13: Peer-leading net interest margin remains strong
Peer-leading net interest margin remains strong Historical yield and costs 6.0% $5,000 $4,500 Avg. interest earning assets 5.0% Yields and Costs (%) $4,000 $3,500 4.0% $3,000 ($mm) 3.0% $2,500 $2,000 2.0% $1,500 $1,000 1.0% $500 -- $0 2012 2013 2014 2015 2016 2017 1H18 NIM (%) 3.52% 3.75% 3.93% 3.97
Slide 14: Stable, low cost core deposit franchise
Stable, low cost core deposit franchise Total deposits ($mm) Cost of deposits Noninterest bearing1(%) Cost of total deposits (%) 30.0% 25.7% 26.1% 24.2% 24.8% 25.0% 22.8% 19.8% 20.0% 18.7% $3,910 15.0% 0.59% $3,664 0.78% 0.42% 10.0% $2,672 0.30% 0.29% $2,438 0.48% $1,821 $1,804 $1,924 5.0% 0.36% 0.0
Slide 15: Mortgage operations overview
Mortgage operations overview Highlights Mortgage production Total mortgage pre-tax contribution Consumer Direct (including retail footprint) of $5.3 million in 1H 2018, compared to $8.5 million in 1H Correspondent 2016 2017 1H18 2017, 9.3% of 1H 2018adjusted Third party originated consolidated pre
Slide 16: Improving operating leverage remains a key objective
Improving operating leverage remains a key objective Improving operating efficiency Core efficiency ratio (tax-equivalent basis)1 Consolidated 1H 2018 core efficiency ratio of 63.7% driven by Banking Banking Segment, declined 17.8 percentage points since 2013 Segment core efficiency ratio of 53.4%
Slide 17: Asset quality continues to improve
Asset quality continues to improve Nonperforming ratios Classified & PCI loans ($mm)2 NPLs (HFI) / loans (HFI) NPAs / assets¹ Classified Purchased credit impaired 4.17% $89 $78 $70 2.87% $65 $55 $55 $58 2.12% $46 1.72% 1.53% 1.21% 1.01% 0.86% $21 0.68% 0.58% $16 0.54% 0.52% 0.32% 0.26% $0 $0 $0 2012
Slide 18: Strong capital position for future growth
Strong capital position for future growth Capital position Tangible book value per share 12/31/16 12/31/17 6/30/183 $15.66 $14.56 Shareholder’s equity / 10.1% 12.6% 12.8% $11.56 $11.58 Assets TCE / TA2 8.7% 9.7% 10.1% 3Q16 4Q16 4Q17 1H18 Common equity tier 1 / 11.0% 10.7% 10.7% Simple capital struct
Slide 19: M&A Strategy
M&A Strategy1 Drive Times Bowling Green Glasgow Tuscaloosa: Clarksville Kingsport - Nashville ~3.5 hours - Huntsville ~2 hours Johnson City Birmingham: - Nashville >3 hours Asheville - Huntsville ~1.5 hours Atlanta: - Nashville ~3.5 hours Greenville - Chattanooga <2 hours Greenville: - Nashv
Slide 20: Appendix
Appendix FB) FirstBank
Slide 21: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures Pro forma net income, adjusted (Dollars in thousands) 1H 2018 2017 2016 2015 2014 2013 2012 Pre-tax net income $ 55,095 $ 73,485 $ 62,324 $ 50,824 $ 34,731 $ 28,797 $ 21,974 Plus merger and offering-related costs 1,864 19,034 3,268 3,543 - - - Less signf
Slide 22: Reconciliation of non-GAAP financial measures (cont'd)
Reconciliation of non-GAAP financial measures (cont’d) Tax-equivalent core efficiency ratio (Dollars in thousands) 1H 2018 2017 2016 2015 2014 2013 2012 Core efficiency ratio (tax-equivalent basis) Total noninterest expense $ 112,454 $ 222,317 $ 194,790 $ 138,492 $ 102,163 $ 89,584 $ 83,874 Less one
Slide 23: Reconciliation of non-GAAP financial measures (cont'd)
Reconciliation of non-GAAP financial measures (cont’d) Segment tax-equivalent core efficiency ratio (Dollars in thousands) 1H 2018 2017 2016 2015 2014 2013 Banking segment core efficiency ratio (tax equivalent) Core consolidated noninterest expense $ 110,590 $ 202,399 $ 178,183 $ 134,755 $ 99,163 $
Slide 24: Reconciliation of non-GAAP financial measures (cont'd)
Reconciliation of non-GAAP financial measures (cont’d) Tax-equivalent core efficiency ratio 2018 (Dollars in Thousands) Second Quarter First Quarter Total noninterest expense $ 56,303 $ 56,151 Less variable compensation charge related to cash settled equity awards - - Less merger and offering-relate
Slide 25: Reconciliation of non-GAAP financial measures (cont'd)
Reconciliation of non-GAAP financial measures (cont’d) Segment tax-equivalent core efficiency ratio 2018 (Dollars in Thousands) Second Quarter First Quarter Banking segment core efficiency ratio (tax equivalent) Core consolidated noninterest expense $ 55,632 $ 54,958 Less Mortgage segment noninteres
Slide 26: Reconciliation of non-GAAP financial measures (cont'd)
Reconciliation of non-GAAP financial measures (cont’d) Tangible book value per common share and tangible common equity to tangible assets 2018 2017 2016 Second Fourth Third Second Fourth Third (Dollars in thousands) Quarter First Quarter Quarter Quarter Quarter First Quarter Quarter Quarter Tangible
Slide 27: Reconciliation of non-GAAP financial measures (cont'd)
Reconciliation of non-GAAP financial measures (cont’d) Return on average tangible common equity (Dollars in thousands) 1H18 Total average shareholders' equity $ 607,708 Less average goodwill 137,190 Less intangibles, net 13,671 Average tangible common equity $ 456,848 Net income $ 41,819 Return on a
Slide 28: Reconciliation of non-GAAP financial measures (cont'd)
Reconciliation of non-GAAP financial measures (cont’d) Pro forma return on average assets and equity, adjusted (Dollars in thousands) 1H 2018 2017 2016 2015 2014 2013 2012 Pro forma Net income 41,819 $ 52,398 $ 39,422 $ 32,995 $ 22,356 $ 18,612 $ 14,555 Average assets 4,719,932 3,811,158 3,001,275 2
Slide 29: Reconciliation of non-GAAP financial measures (cont'd)
Reconciliation of non-GAAP financial measures (cont’d) Total mortgage contribution, adjusted (Dollars in thousands) 1H18 1H17 Mortgage segment pre-tax net contribution $ 3,027 $ 5,886 Retail footprint: Mortgage banking income 13,002 12,784 Mortgage banking expenses 10,746 10,204 Retail footprint pre
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