W.T.B. Financial Corp. · OTC:WTBFA
W.T.B. Financial — Shareholder Meeting (2015)
26 slides from W.T.B. Financial's shareholder meeting presentation, Sep 6, 2015
Slide 1: Annual Shareholders' Meeting
ANNUAL SHAREHOLDERS’ MEETING Our Mission “We will be the best at understanding and meeting the financial needs of our customers. We will focus our unique strengths as a community bank on serving those customers who perceive a distinct value in building long-term relationships with us. We will be emp
Slide 2: Safe Harbor
SAFE HARBOR This presentation contains forward-looking statements which are intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. These statements may include statements that expressly or implicitly predict future
Slide 3: WTBFC 2014 Highlights
WTBFC 2014 HIGHLIGHTS Balance Sheet: WTBFC 2014 YEAR IN REVIEW • Growth in 2014 was Strong • Liquidity Levels Remain High • Asset Quality “Normalized” • Allowance Position Remains Robust • Capital is Substantial and “High Quality” Earnings: • Net Interest Margin Widened • Net Interest Revenue Highes
Slide 4: WTBFC Geography and Overview
WTBFC GEOGRAPHY AND OVERVIEW GEOGRAPHIC FOOTPRINT COMPANY OVERVIEW • W.T.B. Financial Corporation is the WTBFC OVERVIEW holding company for Washington Trust Bank (“WTB”) • Over 100 Years of Banking History • 864 (FTE) Employees (+ 24 in 2014) • $4.8 Billion in Assets • 43 Branches in WA ~ OR ~ ID •
Slide 5: WTBFC's Compelling Story
WTBFC’S COMPELLING STORY • Regional Pacific NW Community Bank • Dominant in Historical Markets • Room for Continued Growth in Major Metro Areas • Expansion Opportunities Across Footprint WTBFC OVERVIEW • Organic Customer Growth Focus • Highly Regarded Community Banking Franchise • Diversified by Geo
Slide 6: Relationship Banking
RELATIONSHIP BANKING • Relationship banking requires… WTBFC 2014 YEAR IN REVIEW • A high degree of customer focus • High caliber professional bankers • Empowered employees • Decentralized decision-making • First-rate financial solutions • Customized to meet client needs • Standardized to be efficien
Slide 7: Major Industry Themes
MAJOR INDUSTRY THEMES BANKING INDUSTRY OVERVIEW • Credit Recovery from Financial Crisis is Complete • Low Rate Environment Weighs on Profitability • Regulatory Burden a Challenge and Opportunity • Industry Consolidation Continues • Down 4%, or 300 Banks +/- per Year (2009 – 2014) • FinTech Revolutio
Slide 8: 2014 Industry Performance
2014 INDUSTRY PERFORMANCE Earnings: BANKING INDUSTRY OVERVIEW • Industry Earnings = $152.7 Billion, down $1.7 Billion, or 1.1% • Provision Expense down $2.7 Billion, or 8.4% Balance Sheet: • Deposits = $11.8 Trillion, up $572 Billion, or 5.1% • Assets = $15.6 Trillion, up $822 Billion, or 5.6% • Loa
Slide 9: Industry Consolidation Continues
INDUSTRY CONSOLIDATION CONTINUES… 17,886 BANKING INDUSTRY TRENDS The number of FDIC insured institutions has Number of FDIC Insitutions declined by over 11,000, or 64% to 6,509 since 1984… 6,509 1984 1985 1987 1988 1991 1992 1994 1995 1996 1998 1999 2000 2002 2003 2006 2007 2009 2010 2011 2013 2014
Slide 10: Impacting the Smallest Banks
IMPACTING THE SMALLEST BANKS Number of Institutions by Asset Size BANKING INDUSTRY TRENDS 20,000 18,000 • All of the consolidation in the industry has come from the smallest banks 16,000 • Banks with assets < $100 million declined 14,000 by over 12,000, or 87% since 1984 12,000 10,000 8,000 6,000 4,
Slide 11: Industry Recovery Underway
INDUSTRY RECOVERY UNDERWAY… BANKING INDUSTRY TRENDS …but Profitability is Leveling Source: FDIC Quarterly Bank Performance Data as of Fourth Quarter 2014 11
Slide 12: ...And It's Not Yet Complete
…AND IT’S NOT YET COMPLETE BANKING INDUSTRY TRENDS 128 ROA +/- 103 bps ROA +/- Financial Crisis Source: FDIC Quarterly Bank Performance Data as of Fourth Quarter 2014 12
Slide 13: 2014 Performance Comparison
2014 PERFORMANCE COMPARISON BANKING INDUSTRY PERFORMANCE WASHINGTON INDUSTRY 2014 STATE-WIDE COMPARISON- MEDIANS KEY PERFORMANCE MEASURE TRUST BANK FDIC DATA WASHINGTON OREGON IDAHO # of Institutions 1 6,509 59 28 12 Total Assets ($ in millions) $ 4,768 $ 15,553,700 $ 63,078 $ 31,828 $ 4,994 Average
Slide 14: Focus on WTBFC
FOCUS ON WTBFC BANKING INDUSTRY OVERVIEW 2014 PERFORMANCE IN PERSPECTIVE 14
Slide 15: WTBFC Balance Sheet Trends
WTBFC BALANCE SHEET TRENDS December 31, Balance Sheet Trends (000's) 2013 2014 $ Difference % Difference WTBFC 2014 YEAR IN REVIEW Invested cash and securities $ 1,086,332 $ 1,251,771 $ 165,439 15.2% Total loans 3,175,764 3,351,052 175,288 5.5% Total assets 4,436,124 4,771,922 335,798 7.6% Total dep
Slide 16: YOY Loan Portfolio Trends
YOY LOAN PORTFOLIO TRENDS December 31, Loan Type (000's) 2013 2014 $ Difference % Change WTBFC 2014 YEAR IN REVIEW Commercial and industrial $ 877,788 $ 1,009,506 $ 131,718 15.0% Agricultural 204,384 216,929 12,545 6.1% Commercial real estate 988,877 1,043,409 54,532 5.5% Construction and developmen
Slide 17: YOY Deposit Portfolio Trends
YOY DEPOSIT PORTFOLIO TRENDS December 31, Deposit Type (000's) 2013 2014 $ Difference % Change WTBFC 2014 YEAR IN REVIEW Noninterest-bearing demand $ 1,438,563 $ 1,518,053 $ 79,490 5.5% Interest checking 522,632 612,255 89,623 17.1% Savings and money market 1,372,930 1,561,583 188,653 13.7% Time dep
Slide 18: Asset Quality Has...Normalized
ASSET QUALITY HAS…NORMALIZED December 31, Asset Quality Trends (000's) 2013 2014 Difference % Change WTBFC 2014 YEAR IN REVIEW Nonaccrual loans $ 30,893 $ 28,281 $ (2,612) -8.5% Loans 90 days + delinquent, still accruing 731 178 (553) -75.6% Total noncurrent loans 31,624 28,459 (3,165) -10.0% Other
Slide 19: Wealth Mgmt: Key Business Line
WEALTH MGMT: KEY BUSINESS LINE WEALTH MANAGEMENT PERFORMANCE • $4.2 Billion in Total Assets Under Management • Growth in Managed Assets of $171 Million, or 7.4% • Fee Income Based Business • Recurring Revenue Stream • Diversifies Revenue Base • Off-Balance Sheet Based Business Line • Capital Neutral
Slide 20: Capital Levels Significant
CAPITAL LEVELS SIGNIFICANT WTBFC Regulatory Capital Position (000's) WTBFC Regulatory Capital Ratios 13.96% WTBFC 2014 YEAR IN REVIEW $515,024 0.53% 12.70% $19,571 $468,516 $468,516 0.53% $19,571 $19,571 3.43% $126,639 9.87% 0.41% 6.17% $211,500 $227,656 4.46% 10.00% $368,814 $237,445 $221,289 6.00%
Slide 21: Income Statement Trends
INCOME STATEMENT TRENDS Years Ended December 31, Income Statement (000's) 2013 2014 $ Difference % Change WTBFC 2014 YEAR IN REVIEW Net interest revenue $ 146,256 $ 155,835 $ 9,579 6.5% Provision for loan losses 6,767 6,000 (767) -11.3% Total noninterest revenue 53,482 44,498 (8,984) -16.8% Total no
Slide 22: Financial Performance Metrics
FINANCIAL PERFORMANCE METRICS For the Year WTBFC 2014 YEAR IN REVIEW Performance Metric 2013 2014 Difference Return on average assets 1.00% 0.92% -0.08% Return on shareholders’ equity 10.21% 9.14% -1.07% Margin on average earning assets 3.48% 3.57% 0.09% Noninterest expense to average assets 2.89% 2
Slide 23: Key Shareholder Value Metrics
KEY SHAREHOLDER VALUE METRICS Years Ended December 31, Income (000's) and Per Share Data 2013 2014 $ Difference % Change WTBFC 2014 YEAR IN REVIEW Net Income $ 43,794 $ 41,864 $ (1,930) -4.4% Preferred Stock Dividends 1,723 418 (1,305) -75.7% Net Income Available to Common Shareholders $ 42,071 $ 41
Slide 24: Outlook ~ 2015 and Beyond
OUTLOOK ~ 2015 AND BEYOND • Uneven Economic Recovery Continues • Fed/Global CB Policy Major Force on Capital Markets • Macro Risks and Market Volatility Remain a Concern 2015 AND BEYOND • Our Markets are Providing Opportunities • Regulatory Expectations Elevated and Expensive • Rising Rate Bias Elev
Slide 25: Key Priorities
KEY PRIORITIES • Maintain Conservative Risk Profile • Position for Fed Policy Shifts • Remain Vigilant on Cost Structure 2015 AND BEYOND • Complete Redemption of SBLF Capital • Improve Core Earnings/Financial Performance • Adapt to and Embrace Evolving “FinTech” Landscape • Serve Existing Customers’
Slide 26: Your Time Is Valuable to Us
YOUR TIME IS VALUABLE TO US WE APPRECIATE YOUR SUPPORT AND ALWAYS WELCOME CUSTOMER REFERRALS