Fb Financial Corporation · NYSE:FBK
Fb Financial — Investor Presentation (February 2017)
41 slides from Fb Financial's investor presentation, Feb 21, 2017
Slide 1: First Quarter 2017 Investor Presentation
First Quarter 2017 Investor Presentation Exhibit 99.1
Slide 2: Forward-looking statements
This investor presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of hi
Slide 3: Additional Information and Participants in the Solicitation
Additional Information and Participants in the Solicitation This investor presentation is for informational purposes only and does not constitute a solicitation of any vote or approval with respect to the Company’s proposed acquisition of the Clayton Banks. The issuance of the shares of the Company’
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. The Company’s management uses these non-GAAP financial measur
Slide 5: Strategic drivers
Strategic drivers Balanced business model buoyed by low-cost core deposit base Experienced senior management team Strong financial performer: delivering profitability and growth Community bank culture and family values Scalable banking & mortgage platforms Complementary positions in high growth metr
Slide 6: A leading community bank headquartered in Tennessee
A leading community bank headquartered in Tennessee Top 10 banks in Tennessee¹ Top 10 banks under $20bn assets in Tennessee¹ Source: SNL Financial; Note: Deposit data as of June 30, 2016; Pro forma for pending acquisitions announced as of February 16, 2017 1Sorted by deposit market share, deposits a
Slide 7: Attractive footprint with balance between community and metropolitan markets
Attractive footprint with balance between community markets and platforms in high growth metropolitan markets 2 69 123 Blue dots 193 210 228 Metro markets 130 131 135 Highway 167 169 172 State county outlines 87 154 87 Green dots 148 194 148 Community markets Source files are 619754_FirstBank Bancor
Slide 8: Pro forma results and 2016 highlights
Pro forma results1 2015 2016 Diluted earnings per share $1.92 $2.04 Net income (in millions) $33.0 $39.4 Return on average assets 1.28% 1.31% Return on average equity 14.5% 14.3% Efficiency ratio 73.1% 70.6% 2016 Highlights Completed largest bank IPO in Tennessee history Total revenues of $255.6 mil
Slide 9: Delivering profitability and growth
Delivering profitability and growth Drivers of profitability improvement 1 Our pro forma net income and tax-adjusted return on average assets include a pro forma provision for federal income taxes using a combined effective income tax rate of 30.35%, 33.76%, 35.37%, 35.63%, 35.08 and 36.75% for the
Slide 10: Net interest margin driven by multiple levers
Net interest margin driven by multiple levers Historical yield and costs Source: Company information Note: Financial data as of December 31, 2016 1 Includes tax-equivalent adjustment NIM (%) 3.52% 3.75% 3.93% 3.97% 4.10% NIM, ex-accretion (%) 3.52% 3.75% 3.93% 3.96% 3.97% Deposit cost (%) 0.78% 0.48
Slide 11: Consistent loan growth and balanced portfolio
Consistent loan growth and balanced portfolio Total loan growth1 ($mm) and commercial real estate concentration Loan portfolio breakdown1 12/31/15 12/31/16 Total HFI loans: $1,849mm Source: Company filings; Note: Financial data as of December 31, 2016 1 Exclude HFS loans, C&I includes owner-occupied
Slide 12: Asset quality continues to improve
Asset quality continues to improve Source: Company filings. Financials as of December 31, 2016 . Classified loans ($mm) Net charge-offs / average loans NPAs / assets LLR / loans (384) bps ($58) mm
Slide 13: Stable, low cost core deposit franchise
Stable, low cost core deposit franchise Total deposits ($mm) Source: Company filings; Note: Financial data as of December 31, 2016 1 Includes $45.4 million in mortgage servicing-related escrow deposits. Noninterest bearing deposits ($mm)1 5-yr CAGR 22.5% Deposit composition Cost of deposits 5-yr CAG
Slide 14: Mortgage Banking outlook impacted by higher rates, offset by channel mix
Mortgage Banking outlook impacted by higher rates, offset by channel mix Mortgage Banking revenue $117.8 million in 2016, up 68% from 2015 IRLC pipeline $533 million at 12/31/16, up 27% from 12/31/15 Record mortgage closings of $4.7 billion in 2016, up 69% from $2.8 billion in 2015 Business model be
Slide 15: Improving operating leverage remains a key objective
Improving operating leverage remains a key objective Continued focus to achieve better operating leverage Bank’s core system creates a scalable platform designed to drive and support growth across markets Capacity to grow business in key metropolitan markets, especially Nashville, Knoxville, Memphis
Slide 16: Summary of capital position
Summary of capital position Source: Company filings Note: Financial data as of December 31, 2016 See “Use of non-GAAP financial measures” and the Appendix hereto. Total regulatory capital. Capital position Total capital composition 12/31/15 12/31/16 Shareholder’s equity / Assets 8.2% 10.1% TCE / TA
Slide 17: Over years of history in Tennessee, writing the next chapter
Over 110 years of history in Tennessee Writing the next chapter… 2003: Acquired The Bank of Murfreesboro in Nashville MSA 2007: Acquired branches from AmSouth Bank in Tennessee community markets 1984 1988 1996 1999 2001 2003 2004 2006 2012 2013 2015 Year: 2001: Opened branches in Nashville and Memph
Slide 18: Acquisition of the Wholly-Owned Banks of Clayton HC, Inc.
Acquisition of the Wholly-Owned Banks of Clayton HC, Inc. Pending acquisition highlights
Slide 19: Strategically compelling and financially attractive transaction
Culture EPS Accretion Geography Strategically compelling and financially attractive transaction Tangible Book Value Dilution Entrepreneurial owner with West TN heritage High performance DNA Niche lending expertise Internal Rate of Return Opportunity for operating leverage in existing markets Highly
Slide 20: Transaction overview
Management and Board Seats Return of Capital and Pre-closing Distributions to Clayton HC Purchase Price Transaction overview Jim Clayton to receive FB Financial Board Seat pending regulatory approval Senior executives of Clayton Banks have executed employment agreements with FirstBank(3) Structure S
Slide 21: Strategic expansion
Strategic expansion Note: Financial data as of the year ended December 31, 2016. (1) Assumes 38.1% tax effect on pre-tax income. Source: Company data and SNL Financial.
Slide 22: Strategic rationale – In-footprint expansion with highly profitable banks
Strategic rationale – In-footprint expansion with highly profitable banks Track Record of Financial Performance The Clayton Banks have consistently ranked among the most profitable banks in TN (1) ROAA(2) 2016 5-Yr Avg. Clayton Bank 2.38% 2.30% American City Bank 1.57% 1.49% Combined 2.17% 2.09% Enh
Slide 23: Strategic rationale – Attractive financial impact, establishes new business
Strategic rationale – Attractive financial impact, establishes new business Niche Lending Clayton Bank has managed Manufactured Housing (“MH”) lending through business cycles Approximately $300 mm MH loans at year-end (~10% of pro forma loan portfolio) Strong risk-adjusted yields with sound credit m
Slide 24: Cost savings, transaction expenses and key assumptions
Cost Savings Transaction Expenses Estimated one-time transaction expenses of $10.0 million, pre-tax Key transaction assumptions Loan Mark Gross loan mark of $30.2 million (~2.87% of gross loans) Gross loan mark is before reversals of ALLL ($20.4 million), remaining discount on acquired loans ($7.1 m
Slide 25: Extensive due diligence conducted
Extensive due diligence conducted Close coordination with Clayton Banks’ management teams in all aspects of strategy and operations Risk management analysis done by FirstBank’s senior management, including CEO, CFO, CRO, CCO, Operations, Human Resources, Compliance and General Counsel Comprehensive
Slide 26: Loan and deposit mix
Loan and deposit mix Pro Forma Loan Portfolio Pro Forma Deposit Mix Pro forma loan (HFI)-to-deposit ratio 81% Diversified portfolio with 38% C&I (includes CRE - Owner-Occupied) Pro forma loan yield estimated at 5.69%, FBK’s was 5.27% in 4Q 2016 Deposit profile of combined bank: 47% checking, 89% tra
Slide 27: Clayton Banks credit quality
Clayton Banks credit quality Loans Outstanding ($ millions) NPAs / Assets NCOs / Average Loans ALLL / Gross Loans HFI 5-Year CAGR: 8.9% Source: SNL Financial & Company filings; Note: Financial data as of December 31, 2016.
Slide 28: Manufactured Housing niche lending adds meaningful risk-adjusted profitability
Manufactured Housing niche lending adds meaningful risk-adjusted profitability MH Balances ($M) MH Niche comprised of three areas operated from Knoxville with a national platform MH Communities (MHC) C&I and CRE-focused lending to experienced, sophisticated owners / operators of MH communities MH Re
Slide 29: Appendix: FB Financial Standalone
Appendix: FB Financial Standalone
Slide 30: GAAP reconciliation and management explanation of non-GAAP financial measures
GAAP reconciliation and management explanation of non-GAAP financial measures Tax-equivalent net interest income and net interest margin Tax-equivalent efficiency ratio Year ended December 31, (dollars in thousands, except per Share data) 2016 2015 2014 2013 2012 2011 Efficiency ratio (tax-equivalen
Slide 31: Tangible book value per common share and tangible common equity to tangible assets
Tangible book value per common share and tangible common equity to tangible assets GAAP reconciliation and management explanation of non-GAAP financial measures (cont’d) 1 On June 28, 2016, the Company declared a 100-for-1 stock split, increasing the number of issued and authorized shares from 171,8
Slide 32: Core deposits reconciliation
Core deposits GAAP reconciliation and management explanation of non-GAAP financial measures (cont’d) As of December 31, (dollars in thousands) 2016 2015 2014 2013 2012 2011 Core deposits Total deposits $ 2,671,562 $ 2,438,474 $ 1,923,569 $ 1,803,567 $ 1,820,745 $ 1,727,959 Less jumbo time deposits 6
Slide 33: Appendix: Clayton Banks
Appendix: Clayton Banks FB) FirstBank
Slide 34: Overview of Clayton Bank
Headquartered in Knoxville, TN with a footprint extending to West Tennessee High, sustainable profitability with 2%+ through-the-cycle ROAA, driven by a combination of strong margins and low efficiency ratio Manufactured Housing lending niche capitalizes on unique expertise and deep relationships th
Slide 35: Knoxville market presence
Knoxville market presence Pro Forma Knoxville Footprint Third largest MSA in Tennessee, largest in East Tennessee Supports 120 automotive component manufacturers providing over 13,000 jobs Well situated to attract the key suppliers and assembly operations in the southeast Highly diversified economy
Slide 36: Clayton Bank historical financials
Clayton Bank historical financials Source: SNL Financial, Company Documents; Note: Data as of periods shown. Net Income, return on average assets and return of average equity assume 38.1% tax effect on pre-tax income. For the Year Ended December 31, Dollars in Thousands 2012 2013 2014 2015 2016 Bala
Slide 37: Overview of American City Bank
Overview of American City Bank American City Bank Footprint Overview Headquartered in Tullahoma, TN with branches also in Manchester, TN Efficiently run, profitable institution with sustainable ROAA of ~1.5%, pricing power and strong capitalization Customer-focused business model driven by strong re
Slide 38: American City Bank historical financials
American City Bank historical financials Source: SNL Financial, Company Documents; Note: Data as of periods shown. Net Income, return on average assets and return of average equity assume 38.1% tax effect on pre-tax income. For the Year Ended December 31, Dollars in Thousands 2012 2013 2014 2015 201
Slide 39: Enhances both metro and community market presence
Enhances both metro and community market presence Source: Company filings, SNL Financial; Note: Deposit data as of June 30, 2016.
Slide 40: Pro forma loan portfolio bolsters commercial lending platform
Pro forma loan portfolio bolsters commercial lending platform Source: Company filings; Note: Financial data (including pro forma data) as of December 31, 2016. FB Financial data based on GAAP data. Clayton Bank and Trust and American City Bank based on regulatory data. Excludes purchase accounting a
Slide 41: Pro forma deposit composition remains transaction account-focused
Pro forma deposit composition remains transaction account-focused Source: Company filings; Note: Financial data (including pro forma data) as of December 31, 2016. FB Financial data based on GAAP data. Clayton Bank and Trust and American City Bank based on regulatory data. Excludes purchase accounti