Fb Financial Corporation · NYSE:FBK
Fb Financial — Debt Investor Presentation (August 2020)
55 slides from Fb Financial's debt investor presentation, Aug 31, 2020
Slide 1: Bank Subsidiary Subordinated Notes Offering
Exhibit 99.2 , Bank Subsidiary of Subordinated Notes Offering August 18, 2020Exhibit 99.2 , Bank Subsidiary of Subordinated Notes Offering August 18, 2020
Slide 2: Confidentiality Notice and Safe Harbor Statement
Confidentiality Notice and Safe Harbor Statement FB Financial Corporation and FirstBank (collectively, or as appropriate based upon the context, “FB Financial” or “FBK”) has engaged Piper Sandler & Co., U.S. Bancorp Investments, Inc. and Stephens Inc. (collectively, the “Placement Agents”) to exclus
Slide 3: Forward-Looking Statements
Forward–Looking Statements Certain statements contained in this presentation may constitute 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 inc
Slide 4: Use of non-GAAP financial measures
Use of non-GAAP financial measures This 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. These non‐GAAP financial measures include, without limitati
Slide 5: Terms of the proposed offering
Terms of the proposed offering Issuer • FirstBank, bank subsidiary of FB Financial Corporation (NYSE: FBK) Security • Subordinated Notes Issuance Type • 3(a)(2) Exempt and Covered Security – bank level issuance Credit Rating • Kroll Bond Rating Agency: BBB Term / Maturity • 10 years / 2030 Offering
Slide 6: Company overview
Company overview 1 Company overview Franchise map n Second largest Nashville-headquartered bank and third largest Tennessee-based bank n Originally chartered in 1906, one of the longest continually 100% stockholder of FirstBank operated banks in Tennessee n Completed the largest bank IPO in Tennesse
Slide 7: Financial highlights
Financial highlights 2019 1Q20 2Q20 Net Income $83.8 million $0.7 million $22.9 million Adjusted Net Income ¹ $89.3 million $5.3 million $24.1 million Adjusted ROAA ¹ 1.55% 0.33% 1.37% Profitability Adjusted PTPP ROAA ¹ 2.15% 2.10% 3.29% Adjusted ROAE ¹ 12.3% 2.8% 12.2% Net Interest Margin 4.34% 3.9
Slide 8: Recent corporate history
Recent corporate history 2015 2016 2017 2018 2019 - 2020 Awarded Awarded Awarded Awarded Awarded “Top Workplaces” “Top Workplaces” “Top Workplaces” “Top Workplaces” “Top Workplaces” by the Tennessean by the Tennessean by the Tennessean by the Tennessean by the Tennessean 1 1 1 1 1 Adj. ROAA : 1.21%
Slide 9: A leading community bank headquartered in Tennessee
A leading community bank headquartered in Tennessee 1 1,2 Top 10 banks in Tennessee Top 10 banks under $30bn assets in Tennessee Deposit Percent of TN TN Deposit Percent of Branches Branches market company Rank Name Headquarters deposits market share company Rank Name Headquarters deposits (#) (#) s
Slide 10: Balance between community and metropolitan markets
Balance between community and metropolitan markets 1 Our pro forma footprint Metropolitan markets Bowling Community markets Green MSA Nashville Knoxville MSA MSA Jackson MSA n Market rank by deposits: th ̶ Nashville (6 ) th ̶ Chattanooga (5 ) Memphis MSA th ̶ Knoxville (9 ) Chattanooga rd ̶ Jackson
Slide 11: Well positioned in attractive metropolitan markets
Well positioned in attractive metropolitan markets Chattanooga 1 Nashville rankings: “The new ‘it’ City” – The New York Times n 4th largest MSA in TN n Diverse economy with over 24,000 businesses n Employs over 260,000 people in Metropolitan Economic 3 Best Place for New Businesses #1 #2 2 Strength
Slide 12: Strategic drivers
Strategic drivers Experienced Senior Management Team Strategic M&A and Elite Financial Capital Optimization Performance Scalable Platforms Enabled by Great Place to Work Technology Empowered Teams Across Attractive Metro and Community Markets 11Strategic drivers Experienced Senior Management Team St
Slide 13: Business line overview
Business line overview § Operate in 8 metropolitan markets across Tennessee, North Alabama and Kentucky (Nashville, Chattanooga, Knoxville, Jackson, Bowling Green, Memphis, Huntsville and Florence) § Primarily commercial lending supplemented by retail networks throughout each; goal of being self-fun
Slide 14: Aggressively managing for impact of COVID-19
Aggressively managing for impact of COVID-19 §No pandemic related reductions in force, and remote work environment has been effective Health and §Branch lobby service had been reinstated across the footprint with sneeze guards and social distancing methods in place Safety §Re-suspending lobby access
Slide 15: Markets have reopened for economic activity
Markets have reopened for economic activity Government Guidance on Economic Activity Close Contact Entertainment Map Market Retail Restaurant Gyms Mask Orders Providers Venues Key County by county, 1 Tennessee Open w/ Distancing Open w/ Distancing Open w/ Distancing 50% Capacity Open w/ Distancing n
Slide 16: While we continue to work with impacted customers
While we continue to work with impacted customers 1 Deferral programs Total first deferrals by type ($918 million ) $354.8 § First deferral held no requirements; granting of second $321.7 deferrals are being decided on a case-by-case basis § Standard consumer loan received 2-payment relief; standard
Slide 17: Strong liquidity position
Strong liquidity position n Customer deposit base has seen consistent growth in On balance sheet liquidity balances over the past 12 months and remains a stable On-Balance Sheet Liquidity base of funding and liquidity $988.5 On-Balance Sheet Liquidity / Tangible Assets $1,000.0 n Monitoring liquidit
Slide 18: Core deposit franchise provides stable liquidity
Core deposit franchise provides stable liquidity Total deposits ($mm) Cost of deposits Customer deposits Brokered and internet time deposits Noninterest bearing (%) Cost of total deposits (%) 35.0% 29.8% 30.0% $5,953 24.7% 24.8% 24.5% $15 25.0% 23.0% $5,377 $4,922 $4,935 $4,843 $20 20.0% $25 $20 $30
Slide 19: Well-capitalized headed into recession
Well-capitalized headed into recession Consolidated Bank Level (Issuer) Tangible common equity / tangible assets Tier 1 leverage ratio 11.4% 10.9% 10.6% 10.5% 10.4% 10.3% 10.1% 10.0% 9.9% 9.7% 9.7% 9.7% 9.7% 9.2% 9.1% 9.1% 8.7% 8.7% 8.6% 8.0% 2018 2019 1Q20 2Q20 Pro Forma¹ 2018 2019 1Q20 2Q20 Pro Fo
Slide 20: Balanced portfolio
Balanced portfolio 1 Portfolio mix – gross loans HFI ($4.8bn) C&I exposure by industry Other Balance Ex. PPP PPP 6% C&I CRE-OO Total % of Total Loans 1-4 family Real Estate Rental and Leasing $ 278.7 $ 97.2 $ 375.9 22.7% $ 11.5 15% Retail Trade 65.3 101.1 166.4 10.0% 23.3 Wholesale Trade 100.3 41.8
Slide 21: Industries of concern – pro forma
Industries of concern – pro forma as of June 30, 2020 FBK FSB Pro Forma Industries of Industries of Industries of Concern Concern Concern 22.7% 22.0% 20.9% $4.8bn $2.8bn $7.6bn Other Other Industries Other Industries 78.0% Industries 79.1% 77.3% FBK % of FSB % of Pro Forma % of Industries of Concern
Slide 22: FBK Industries of concern
FBK Industries of concern n Concentrations representative of community bankers Industry exposures / gross loans (HFI) serving customers across our communities 7.7% n Focused on in-market relationship banking n Trends better than expected to date as markets reopened 5.3% in late April / early May, co
Slide 23: FBK Retail portfolio
FBK Retail portfolio – 7.7% of gross loans HFI n 53% C&I / CRE-OO and 47% CRE Non-OO and Other Portfolio overview n CRE Non-owner occupied and Other – Generally smaller strip centers with backing of good Car, RV, Boat and ATV Dealers guarantors; largest single loan <$8 million 22% – High level of te
Slide 24: FBK Healthcare portfolio
FBK Healthcare portfolio – 5.3% of loans HFI n Assisted Living / Nursing Care continues to perform well; no Portfolio overview known COVID-19 outbreaks at this time Other Healthcare and Social Assisted Living / Assistance Nursing Care / n Offices of Physicians benefitted from the majority of our 25%
Slide 25: FBK Hotel portfolio
FBK Hotel portfolio – 4.0% of gross loans HFI n Occupancy rates vary widely across footprint, with Nashville Outstanding by location hotels at approximately 30% - 40%, while some geographies are as high as 80% Out of Market n Reports from operators reference leisure properties lead the way, 8% Other
Slide 26: FBK Other Leisure
FBK Other Leisure – 2.3% of gross loans HFI n Confidence in portfolio due to current performance and Portfolio overview strong guarantors Other <5% Marinas n Certain categories, such as marinas, have actually 18% 19% benefitted from current backdrop as safe recreational activities are sought Theater
Slide 27: FBK Transportation and warehousing
FBK Transportation and warehousing – 2.1% of gross loans HFI n Overall satisfactory performance Portfolio overview Other n Larger operators are improving Transportation and Warehousing 16% n One small trucking operator with <$1.5 million in outstandings filed for bankruptcy during the quarter Consum
Slide 28: FBK Restaurant
FBK Restaurant – 1.3% of gross loans HFI n Overall satisfactory performance Portfolio overview n Quick service seeing satisfactory results with drive through model Other n Full service impacted more heavily given costs to re-open 4% Bars and concerns regarding potential further shut-downs. 6% Portfo
Slide 29: FSB portfolio overview
FSB portfolio overview 1 Portfolio mix C&I exposure by industry Balance Ex. Non-Core Non-Core Other C&I CRE-OO Total % of Total Loans 0% 1-4 family Real Estate Rental and Leasing $ 38.1 $ 70.8 $ 108.9 25.4% $ 12.6 1 15% C&I Accommodation and Food Services 5.4 33.3 38.7 9.0% - 28% Retail Trade 5.4 27
Slide 30: FSB Industries of concern
FSB Industries of concern n Concentrations representative of community bankers Industry exposures / gross loans (HFI) serving customers across FSB’s communities 9.1% n Core portfolio is focused on in-market relationship banking n No shared national credits outside of the non-core portfolio 5.1% n Li
Slide 31: FSB Retail portfolio
FSB Retail portfolio – 9.1% of loans HFI n Core business focuses primarily on local customers and Portfolio overview local projects 1 C&I n Focus on multiple sources of repayment (Primary, 18% Secondary and Tertiary) n 3 Non-Owner Occupied relationships over $10 million; largest loan is ~$34 million
Slide 32: FSB Hotel portfolio
FSB Hotel portfolio – 5.1% of loans HFI n Focus on experience, flag, operator and location Outstanding by location n Portfolio is underwritten less than 65% LTV Other Middle TN 6% n Diversification within the portfolio and flag with greater than 65% being Business Class or Premium Flags Franklin 20%
Slide 33: FSB Restaurant
FSB Restaurant – 2.8% of loans HFI n Over 50% of portfolio are for Fast-Casual/Sit Down Portfolio overview restaurants with local ownership and established operators n Focus on relationship banking including personal, business, depository and treasury relationships Non-Owner Occ / Other CRE n Primar
Slide 34: FSB Non-core portfolio
FSB Non-core portfolio - $358 million as of 2Q 2020 n The FSB “non-core” portfolio consists primarily of shared national credits and nationwide loans to private-equity backed companies, with a focus on healthcare n FSB management has been unwinding this portfolio since 2019. There was $430 million i
Slide 35: Allowance for credit losses overview
Allowance for credit losses overview n Current Expected Credit Loss (CECL) Allowance for Credit Losses (ACL) model utilizes a blend of Moody’s economic scenarios from June 20, 2020, with resulting key economic data summarized below: FQE, FYE 12/31, 3Q 2020 4Q 2020 1Q 2021 2020 2021 2022 2023 GDP (bc
Slide 36: Asset quality remains solid
Asset quality remains solid Nonperforming ratios Classified loans ($mm) 1 1,2 NPLs (HFI)/loans (HFI) NPAs/assets $88 $80 $79 0.77% 0.71% 0.74% $74 0.73% $69 0.68% 0.62% 0.59% 0.60% 0.47% 0.43% 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 3 LLR/loans HFI (excluding PPP loans) Net charge-offs/ave
Slide 37: Core earnings power remains intact
Core earnings power remains intact Adjusted pre-tax, pre-provision return on average assets¹ 2.72% 2.40% 2.34% 2.25% 2.15% 1.81% 2015 2016 2017 2018 2019 YTD 2020 Drivers of profitability 1 Loans/deposits Net interest margin Noninterest income ($mm) Core efficiency ratio Loans excluding HFS Loans HF
Slide 38: Mortgage operations overview
Mortgage operations overview Highlights Quarterly mortgage production Consumer Direct n Record total Mortgage pre-tax contribution of $33.6mm for 2Q 1Q20 2Q20 2Q19 Retail 2020 Wholesale n Mortgage sale margins continue to be elevated due to industry capacity constraints and low interest rates n Mort
Slide 39: M&A update: merger with Franklin Financial Network
M&A update: announced merger with Franklin Financial Network, Inc. January 21, 2020 Company overview Financial highlights as of 6/30/2020 ($mm) ■ Ticker: FSB (NYSE) Assets $ 3,776 Gross loans held for investment 2,795 ■ Headquarters: Franklin, Tennessee Deposits 3,143 ■ Franchise highlights: Loan-to
Slide 40: Pro forma loan composition
1 Pro forma loan composition as of June 30, 2020 2 FirstBank Franklin Synergy Bank Pro Forma Other Other Other Consumer Consumer Consumer 0% 2% 1% 0% 3% 5% 1-4 Family 1-4 Family 1-4 Family 20% 21% 22% NOO RE NOO RE NOO RE 25% 21% 19% Multifam. Multifam. Multifam. 2% 2% 2% $4.8bn $2.8bn $7.6bn C&D C&
Slide 41: Pro forma deposit composition
1 Pro forma deposit composition as of June 30, 2020 FirstBank Franklin Synergy Bank Pro Forma Time > 250K Time > 250K Non-Interest Time > 250K 5% 4% Bearing 6% Non-Interest Time < 250K Non-Interest Time < 250K 15% Bearing Bearing 6% 5% 25% Time < 250K 30% 14% Transaction 7% $6.0bn $3.1bn $9.1bn Tran
Slide 42: Interest rate sensitivity
Interest rate sensitivity • The following table summarizes the forecasted impact on net interest income using a base case scenario given an immediate change in interest rates as the specified levels based on forecasted assumptions of prepayment speeds, nominal interest rates and loan and deposit rep
Slide 43: Pro forma double leverage and interest coverage
Pro forma double leverage and interest coverage Dollars in thousands Calculation of Double Leverage For the Year Ended December 31, For the Quarter Ended Pro Forma 1,2 2017 2018 2019 6/30/2020 6/30/2020 Bank Equity $595,625 $679,097 $782,565 $843,591 $1,243,579 Consolidated Equity $596,729 $671,857
Slide 44: Contact information
Contact information Corporate headquarters Contact information • 211 Commerce Street • Christopher T. Holmes President, CEO & Director Suite 300 cholmes@firstbankonline.com Nashville, TN 37201 (615) 313-0494 • (615) 313-0080 • Michael M. Mettee Interim Chief Financial Officer • www.firstbankonline.c
Slide 45: Appendix
Appendix 44Appendix 44
Slide 46: Reconciliation of non-GAAP financial measures: Adjusted diluted EPS
Reconciliation of non-GAAP financial measures Adjusted diluted earnings per share 45Reconciliation of non-GAAP financial measures Adjusted diluted earnings per share 45
Slide 47: Reconciliation: Adjusted pro forma net income and pre-tax, pre-provision earnings
Reconciliation of non-GAAP financial measures 1 Adjusted pro forma net income and diluted earnings per share Adjusted pre-tax, pre-provision earnings 1 2016 includes loss on sale of mortgage servicing rights, impairment of mortgage servicing rights, gain on sales or write-downs of other real estate
Slide 48: Reconciliation: Tax-equivalent core efficiency ratio
Reconciliation of non-GAAP financial measures (cont’d) Tax-equivalent core efficiency ratio 1 Efficiency ratio (GAAP) is calculated by dividing non-interest expense by total revenue. 47Reconciliation of non-GAAP financial measures (cont’d) Tax-equivalent core efficiency ratio 1 Efficiency ratio (GAA
Slide 49: Reconciliation: FSB core efficiency ratio
Reconciliation of non-GAAP financial measures (cont’d) FSB core efficiency ratio 2020 (Dollars in thousands) Second Quarter Core efficiency ratio Total noninterest expense $ 23,976 Less one-time expenses (2,117) Core noninterest expense 21,859 Total interest income 39,814 Interest income - PPP loans
Slide 50: Reconciliation: Segment core efficiency ratios
Reconciliation of non-GAAP financial measures (cont’d) Segment tax-equivalent core efficiency ratios 1 Includes mortgage segment other noninterest mortgage banking expense, depreciation, loss on sale of mortgage servicing rights and amortization and impairment of mortgage servicing rights. 49Reconci
Slide 51: Reconciliation: Tangible book value per share
Reconciliation of non-GAAP financial measures (cont’d) Tangible book value per common share and tangible common equity to tangible assets 50Reconciliation of non-GAAP financial measures (cont’d) Tangible book value per common share and tangible common equity to tangible assets 50
Slide 52: Reconciliation: Adjusted return on average tangible common equity
Reconciliation of non-GAAP financial measures (cont’d) Adjusted pro forma return on average tangible common equity Adjusted pre-tax, pre-provision, return on average tangible common equity 51Reconciliation of non-GAAP financial measures (cont’d) Adjusted pro forma return on average tangible common e
Slide 53: Reconciliation: Adjusted return on average assets and equity
Reconciliation of non-GAAP financial measures (cont’d) Adjusted return on average assets and equity Adjusted pre-tax, pre-provision return on average assets and equity 52Reconciliation of non-GAAP financial measures (cont’d) Adjusted return on average assets and equity Adjusted pre-tax, pre-provisio
Slide 54: Reconciliation: Adjusted pro forma return on average assets and equity
Reconciliation of non-GAAP financial measures (cont’d) Adjusted pro forma return on average assets and equity Adjusted pro forma pre-tax, pre-provision return on average assets and equity 53Reconciliation of non-GAAP financial measures (cont’d) Adjusted pro forma return on average assets and equity
Slide 55: Reconciliation: Adjusted allowance for credit losses to loans HFI
Reconciliation of non-GAAP financial measures (cont’d) Adjusted allowance for credit losses to loans held for investment 54Reconciliation of non-GAAP financial measures (cont’d) Adjusted allowance for credit losses to loans held for investment 54
FB Financial — Debt Investor Presentation (August 2020) on 6ix