First Mid Bancshares, Inc. · NASDAQ:FMBH
First Mid Bancshares — First MID Illinois Bancshares — IPO Roadshow (June 2018)
45 slides from First Mid Bancshares's IPO roadshow presentation, Jun 12, 2018
Slide 1: Investor Presentation June 2018
Investor Presentation June 2018 Strictly Confidential Issuer Free Writing Prospectus Dated June 12, 2018 Filed Pursuant to Rule 433 Registration No. 333 - 216855
Slide 2: Disclosures
2 Disclosures Non - GAAP Financial Measures In addition to reports presented in accordance with generally accepted accounting principles (“GAAP”), this presentation contains certain non - GAAP financial measures . The Company believes that such non - GAAP financial measures provide investors with in
Slide 3: Certain Important Information
3 Certain Important Information Registration Statement ; No Offer or Solicitation The Company has filed a registration statement (including a prospectus) with the SEC for the offering to which this presentation relates . Before you invest, you should read the prospectus in that registration statemen
Slide 4: Table of Contents
4 Table of Contents SECTION DESCRIPTION I. Offering Overview II. Company and Market Overview III. Financial Highlights IV. Acquisition Announcement Appendix – Management and Board Appendix – Non GAAP Reconciliation
Slide 5: I. Offering Overview
5 I. Offering Overview
Slide 6: Offering Summary
6 Offering Summary Issuer: First Mid - Illinois Bancshares, Inc. Exchange / Ticker: Nasdaq / FMBH Offering Type: Follow - On Security: Common Stock Base Offering Value: $30.0 million (100% Primary) Overallotment: 15% (100% Primary) Use of Proceeds: To provide additional capital to support the pendin
Slide 7: Investment Highlights
7 Investment Highlights □ FMBH presents an opportunity to invest in a high performing Midwestern institution □ Long history and successful track record of both growth and earnings ▪ Experienced integrator – completing twelve transactions since 1992 and four in the last three years ▪ Announced acquis
Slide 8: II. Company and Market Overview
8 II. Company and Market Overview
Slide 9: Corporate Profile
9 Corporate Profile Headquartered in Mattoon with multiple locations and a dedicated team serving central and southern Illinois, metro St. Louis, and the greater Indianapolis area. Market Overview Company Name: First Mid - Illinois Bancshares, Inc. Headquarters: Mattoon, IL NASDAQ Ticker: FMBH Marke
Slide 10: History and Recognition
10 History and Recognition First Mid - Illinois Bancshares has a proud 1 50+ year history of service to agricultural, small business and retail customers. • First National Bank of Mattoon established in 1865 • The oldest nationally chartered bank in Illinois • First Mid - Illinois Bancshares, Inc. i
Slide 11: Current Footprint
11 Source: S&P Global Market Intelligence data as of May 2018; Unemployment data as of April 2018 Current Footprint • First Mid Bank Locations • First Bank &Trust Locations Current Footprint • Footprint of 59 branches in 42 communities • LPO serving the greater Indianapolis area • Branches strategic
Slide 12: Market Share
12 Market Share • Top employers in the region include a diverse range of operations such as Ameren, ADM, Caterpillar, State Universities, Multiple Hospitals & Medical Care Facilities, Rural King, and Continental Tire North America • First Mid ranks in the Top 10 for market share in 21 of the 25 coun
Slide 13: Capital Raises and Acquisitions
13 Capital Raises and Acquisitions Capital Raises August 2017 Launched a $20 million at - the - market equity offering. June 2015 Raised $29.3 million through a private placement of common stock. Approximately 90% raised via new institutional relationships. February 2011 Commenced offering of $27.5
Slide 14: Abundant Opportunity for Additional Acquisitions
14 42 16 21 17 28 24 14 3 14 12 9 14 11 4 4 3 7 4 0 20 40 60 80 Illinois Indiana Iowa Kentucky Missouri Wisconsin $400M - $800M $800M - $1.5B $1.5B - $2.5B Abundant Opportunity for Additional Acquisitions Source: S&P Global Market Intelligence □ Includes all banks and thrifts headquartered in Illino
Slide 15: Strategic Advantage
15 Strategic Advantage First Mid - Illinois Bancshares is able to provide strong strategic advantages in key areas : • Diversified Sources of Revenue • Quality Core Deposit Franchise • Diverse Geographic Footprint • Demonstrated Ability to Raise Capital and Successfully Complete Acquisitions • Track
Slide 16: III. Financial Highlights
16 III. Financial Highlights
Slide 17: Financial Profile
17 Financial Profile For the Twelve Months Ended Quarter Ended Year Ended Qtr Ended In $000s except for per share data 12/31/15 12/31/16 12/31/17 3/31/18 12/31/2017 3/31/2018 Balance Sheet Total Assets $2,114,499 $2,884,535 $2,841,539 $2,837,346 $476,705 $479,218 Total Gross Loans $1,281,889 $1,825,
Slide 18: Demonstrated Track Record of Growth
18 Demonstrated Track Record of Growth $1,605 $1,607 $2,114 $2,885 $2,842 $2,837 $479 2013 2014 2015 2016 2017 2018Q1 Total Assets ($mm) Total Net Loans ($mm) Total Deposits ($mm) Net Income ($000) $970 $1,049 $1,267 $1,809 $1,920 $1,957 $365 2013 2014 2015 2016 2017Y 2018Q1 $1,288 $1,272 $1,733 $2,
Slide 19: Creating Value for Shareholders
19 Creating Value for Shareholders First Mid - Illinois Bancshares consistently provides value to shareholders by delivering solid diluted earnings per share and returning competitive dividends . $0.74 $0.85 $1.05 $1.26 $1.42 $1.44 $1.51 $1.57 $1.67 $1.04 $1.07 $1.29 $1.62 $1.73 $1.85 $1.81 $2.05 $2
Slide 20: Performance Highlights
20 Performance Highlights Core Return on Average Assets (1) Core Return on Average Tangible Common Equity (1) Net Interest Margin, TE (1) Efficiency Ratio 0.84% 0.94% 0.95% 0.94% 1.04% 1.22% 2013Y 2014Y 2015Y 2016Y 2017Y 2018Q1 12.89% 13.91% 12.27% 13.22% 13.31% 15.01% 2013Y 2014Y 2015Y 2016Y 2017Y
Slide 21: Strong Credit Quality
21 Strong Credit Quality Nonperforming Assets/Total Assets Nonperforming Assets ($000) Net Charge - offs/Average Loans Loan Loss Reserve/Gross Loans 0.44% 0.30% 0.21% 0.70% 0.72% 0.70% 2013Y 2014Y 2015Y 2016Y 2017Y 2018Q1 $7,037 $4,803 $4,491 $20,223 $20,347 $19,849 2013Y 2014Y 2015Y 2016Y 2017Y 201
Slide 22: Diversified Loan Portfolio
22 Diversified Loan Portfolio Loan Composition ($000s) Rounded to Nearest Percentage March 31, 2018 Balance % Commercial Real Estate (Nonfarm/Nonresidential) $ 699,142 35.2% Commercial & Industrial Loans $ 458,691 23.2% 1 - 4 Family Residential Properties $ 289,899 14.7% Agricultural Real Estate $ 1
Slide 23: Quality Core Deposit Franchise
23 Quality Core Deposit Franchise Deposit Composition ($000s) Rounded to Nearest Percentage March 31, 2018 Balance % Checking $ 1,186,062 52% Savings $ 374,594 17% MMDA $ 389,020 16% CD – Retail/Business $ 277,278 12% CD – Public $ 59,245 3% CDAR $ 5,692 0% CD – Brokered Deposits $ - 0% Total Deposi
Slide 24: Diversified Solutions and Sources of Revenue
24 Diversified Solutions and Sources of Revenue First Mid - Illinois Bank’s Trust and Wealth Management group provides a stream of non - interest income through a variety of financial products and services: • Farm Management • Investment/Brokerage through an agreement with Raymond James Financial Se
Slide 25: IV. Acquisition Announcement
25 IV. Acquisition Announcement
Slide 26: SCB Bancorp Inc. Corporation Overview
26 SCB Bancorp Inc. Corporation Overview Company Overview (1) Total Assets: $437 Million Total Deposits: $319 Million Total Loans: $256 Million Total AUM: $2.4 Billion Corporation is headquartered in Decatur, Illinois SCB Branch Footprint ▪ SCB holds the #3 market share position in Macon County with
Slide 27: Compelling Rationale
27 Compelling Rationale ▪ Execution of Strategic Plan to enhance revenue diversification with complementary business lines ‒ Approximately 58% of SCB’s total revenue consists of Insurance and Ag Services / Trust operations ▪ Deepens First Mid’s presence in target markets ‒ Gain 3 rd ranked deposit m
Slide 28: Complementary Insurance Operations
28 Complementary Insurance Operations □ Soy Capital Bank and Trust acquired JL Hubbard Insurance and Bonds (“JLH”) in 2002 □ Largest community bank - owned insurance agent in Illinois • First Mid Insurance Group (“FMIG”) is 3 rd □ Multi - state customer base with offices in Decatur and Peoria • FMIG
Slide 29: Complementary Ag Services & Trust Operations
29 Complementary Ag Services & Trust Operations □ Combined assets under management nearly $4.0 billion □ Largest farm manager in Illinois with approximately 248,000 acres under management ▪ First Mid manages 25,000 acres □ Operates out of five offices: Bloomington, Decatur, Kankakee, Peoria, and Spr
Slide 30: Pro Forma Non-Interest Income
30 Pro Forma Non - Interest Income First BancTrust SCB Bancorp Pro Forma Data as of or for year ended December 31, 2017 FMBH Net - Interest Income 76% Non - Interest Income 24% Net - Interest Income 84% Non - Interest Income 16% Net - Interest Income 69% Non - Interest Income 31% Net - Interest Inco
Slide 31: Transaction Terms and Pricing Ratios
31 Transaction Terms and Pricing Ratios $ 70.4 million 5.4579 FMBH shares and $ 98.44 in cash for each outstanding share of SCB common stock ³ 1.2 million FMBH shares issued 8.3% Transaction Value (1) Consideration Structure (2) Shares Issued (2) SCB Pro Forma Ownership Price/TBV Price/LTM EPS Board
Slide 32: Key Assumptions
32 Key Assumptions Estimated Cost Savings: Transaction Expenses: Credit Marks: Core Deposit Intangible: Capital Raise: Revenue Enhancements: None assumed; however, opportunities exist in wealth management, trust and insurance businesses $6.0 million, pre tax 1.5% gross mark on loans 1.5% of non - ti
Slide 33: Estimated Pro Forma Financial Metrics
33 Estimated Pro Forma Financial Metrics 1) Estimated financial impact is presented solely for illustrative purposes. Includes assets acquired from FIRT and SCB with est imated corresponding purchase accounting marks, deal related expenses and assumes net proceeds from capital raise of $28.5 million
Slide 34: Pro Forma Franchise
34 Pro Forma Franchise Pro Forma Overview (1) Total Assets: ~$3.8 Billion Total Deposits: ~$3.0 Billion Total Loans: ~$2.6 Billion Trust & Wealth Mgmt AUM: ~$3.9 Billion • 69 banking centers in 44 communities • Combined Company to rank 3 rd in deposit market share in Macon County (currently 9 th ) G
Slide 35: Pro Forma Loan Portfolio
35 Pro Forma Loan Portfolio FMBH SCB Bancorp, Inc. Pro Forma As of March 31, 2018: FIRT C&D 5.5% 1 - 4 Fam 12.8% HELOC 1.9% OwnOcc CRE 15.7% Other CRE 19.6% Multifam 3.1% C&I 23.2% Farm & Agric 10.0% Consr & Other 8.2% Composition Loan Type ($000) % of Total Constr & Dev 109,076 5.5% 1-4 Family Resi
Slide 36: Pro Forma Deposit Portfolio
36 Pro Forma Deposit Portfolio FMBH SCB Bancorp, Inc. Pro Forma As of March 31, 2018: FIRT Non Int. Bearing 20.9% NOW Accts 30.9% MMDA & Sav 33.3% Retail Time 12.9% Jumbo Time 2.1% Non Int. Bearing 3.0% NOW Accts 3.5% MMDA & Sav 48.1% Retail Time 22.2% Jumbo Time 23.3% Composition Deposit Type ($000
Slide 37: Experienced Growth Through M&A
37 Experienced Growth Through M&A Transaction Date Closed 9/10/10 Closed 8/14/15 Closed 9/08/16 Closed 5/1/18 Announced 6/12/18 Transaction Value $16 Million $16 Million $89 Million $72 Million $70 Million Deal Type Branch Branch Whole Bank Whole Bank Whole Bank Assets ($000s) $321 Million $441 Mill
Slide 38: Appendix – Management and Board
38 Appendix – Management and Board
Slide 39: Experienced Management Team
39 Experienced Management Team Joseph R. Dively Chairman, Chief Executive Officer and President Joe joined First Mid as a Senior Executive VP and President of the Bank in 2011. He has served on the Board of First Mid - Illinois Bancshares since 2004. Prior to joining the company, he was a Senior VP
Slide 40: Board of Directors
40 Board of Directors Aligned with shareholders, dedicated to the mission and committed to measured growth, First Mid - Illinois Bancshares’ Board of Directors provide a diverse set of experiences and industry knowledge as well as strong ties to our communities. Holly A. Bailey President, Howell Asp
Slide 41: Appendix – Non-GAAP Reconciliation
41 Appendix – Non - GAAP Reconciliation
Slide 42: Non-GAAP Reconciliation: Tangible Common Equity and Tangible Assets
42 Non - GAAP Reconciliation Tangible Common Equity and Tangible Assets (Dollars in thousands, except per share data) 2013 2014 2015 2016 2017 2018 Tangible Common Equity: Total Common Equity 97,346$ 137,516$ 177,609$ 280,673$ 307,964$ 310,587$ Adjustments Goodwill (25,753) (25,753) (41,007) (57,791
Slide 43: Non-GAAP Reconciliation: Adjusted Earnings Metrics
43 Non - GAAP Reconciliation Adjusted Earnings Metrics 1) Annual periods through 2017 tax effected at 35%; 2018 Q1 tax effected at 21% (Dollars in thousands, exept per share data) Three months ended March 31, 2013 2014 2015 2016 2017 2018 Net Income 14,722$ 15,461$ 16,512$ 21,840$ 26,684$ 8,390$ Net
Slide 44: Non-GAAP Reconciliation: Net Interest Margin
44 Non - GAAP Reconciliation Net Interest Margin 1) Calculated on a tax equivalent basis where interest earned on tax - exempt securities and loans Is adjusted to an amount compar able to interest subject to normal income taxes assuming a federal tax rate of 21% during 2018 and 35% during 2017 and i
Slide 45: First Mid Bank & Trust
First = Mid-Illinois ¥ Bank & Trust aj First Mid BANK & TRUST
First MID Illinois Bancshares — IPO Roadshow (June 2018) on 6ix