Slide 1: 2024 Second Quarter Earnings Presentation
July 16, 2024 2024 Second Quarter Earnings Presentation
Slide 2: Forward-looking statements
1 Forward–looking statements Certain statements contained in this Presentation that are not historical in nature may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, stat
Slide 3: Use of non-GAAP financial measures
2 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 may include, without li
Slide 4: 2Q 2024 Highlights
3 2Q 2024 Highlights Key highlights 2Q 2024 pre-tax pre-provision net revenue of $53.1 million and $52.4 million on an adjusted1 basis, resulting in ROAA and adjusted ROAA1 of 1.30% and 1.28%, respectively Net interest margin expanded to 3.57%, a 15 basis point improvement from the prior quarter
Slide 5: Driving shareholder value
4 Driving shareholder value ¹ Non-GAAP financial measure; See "Use of non-GAAP Financial Measures” and Non-GAAP reconciliations herein. 2 2Q24 calculation is preliminary and subject to change. Earnings per Share $1.67 $3.97 $2.64 $2.57 $1.45 $3.70 $3.76 $2.92 $3.01 $1.69 2020 2021 2022 2023 YTD 2024
Slide 6: Well-capitalized for future opportunities
5 Well-capitalized for future opportunities Tangible Book Value per Share1 Simple Capital Structure Common Equity Tier 1 Capital 84% Trust Preferred 2% Subordinated Notes 6% Tier 2 ACL 8% Total regulatory capital: $1,680mm $11.56 $11.58 $14.56 $17.02 $18.55 $21.73 $24.67 $22.90 $25.69 $26.82 3Q16 20
Slide 7: Building operating leverage
6 Building operating leverage Highlights ¹ Non-GAAP financial measure; See "Use of non-GAAP Financial Measures” and Non-GAAP reconciliations herein. Core efficiency ratio (tax-equivalent basis)¹ Noninterest expense ($mm) Consolidated 2Q 2024 efficiency ratio of 58.6% and core efficiency ratio¹ of 5
Slide 8: Stabilizing net interest margin
7 3.57%3.42%3.46%3.42%3.40%NIM1 43231 Impact of accretion and nonaccrual interest (bps) Deposit Cost: 3.93%3.93%3.88%3.78%3.43%Cost of MMDA 4.00%3.90%3.69%3.37%3.00%Cost of customer time 3.52%3.49%3.40%3.33%3.06%Cost of interest-bearing 2.77%2.76%2.65%2.58%2.38%Total deposit cost Loans HFI Yield: 6.
Slide 9: Balanced loan portfolio
8 1-4 family 17% 1-4 family HELOC 6% Multifamily 6% C&D 13% CRE 22% C&I 31% Other 5% Residential Development 46% Commercial 25% Consumer 14% Multifamily 15% Office 17% Retail 25% Hotel 15% Warehouse/Industrial 15% Land-Mobile Home Park 6% Self Storage 6% Healthcare Facility 4% Assisted Living Facili
Slide 10: Office exposure
9 Nashville 58% Memphis 10% Knoxville 4% Huntsville 5% Birmingham 6% Chattanooga 3% Other 5% Communities 9% Class A 23% Class B 39% Class C 13% Under $2 Million 25% Office exposure (non-owner occupied CRE & C&D) Office loans represent only 4.0% of our total HFI loan portfolio as of the end of 2Q24
Slide 11: Asset quality remains solid
10 0.47% 0.59% 0.65% 0.73% 0.79% 2Q23 3Q23 4Q23 1Q24 2Q24 0.03% 0.02% (0.04%) 0.02% 0.02% 2Q23 3Q23 4Q23 1Q24 2Q24 0.36% 0.46% 0.52% 0.58% 0.63% 0.16% 0.18% 0.17% 0.17% 0.18% 0.07% 0.07%0.59% 0.71% 0.69% 0.75% 0.81% 2Q23 3Q23 4Q23 1Q24 2Q24 Commercial loans HFS Optional GNMA repurchase Other NPAs 1.
Slide 12: Allowance for credit losses overview
11 1.51% 0.67% 1.22% 0.73% 2.44% 1.32% 1.77% 1.81% 3.86% 1.63% 1.07% 1.20% 0.87% 2.94% 1.46% 1.66% 1.81% 4.05% 1.67% 1.40% 1.21% 0.89% 2.85% 1.48% 1.62% 1.81% 4.04% Gross Loans HFI Commercial & Industrial Non-Owner Occ CRE Owner Occ CRE Construction Multifamily 1-4 Family Mortgage 1-4 Family HELOC C
Slide 13: Valuable deposit base
12 Noninterest- bearing checking 21% Interest-bearing checking 25% Money market 36% Savings 4% Time 14% 46% Checking accounts Valuable deposit base Cost of deposits 2Q24 Deposit composition 22.1% 22.2% 21.0% 20.8% 20.9% 2.38% 2.58% 2.65% 2.76% 2.77% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 0.0% 5.0
Slide 14: Strong liquidity position
13 $1,445 $1,346 $1,353 $1,386 $1,414 11.4% 11.0% 11.0% 11.3% 11.5% 2Q23 3Q23 4Q23 1Q24 2Q24 On-balance sheet liquidity On-balance sheet liquidity / tangible assets Strong liquidity position On-balance sheet liquidity ($mm) Liquidity / Uninsured and Uncollateralized (UU) Deposits 2Q24 Sources of liq
Slide 15: Mortgage performance in 2Q 2024
14 Mortgage performance in 2Q 2024 Highlights Mortgage segment pre-tax net contribution of $0.7 million in 2Q 2024 Interest rate lock commitment volume increased 2.1% in 2Q 2024 compared to 1Q 2024 Mortgage volume and margins continue to be under pressure due to the interest rate environment, ex
Slide 16: Appendix
15 Appendix
Slide 17: Adjusted net income and diluted earnings per share
16 GAAP reconciliations and use of non-GAAP financial measures Adjusted net income and diluted earnings per share
Slide 18: Adjusted pre-tax pre-provision net revenue
17 GAAP reconciliations and use of non-GAAP financial measures Adjusted pre-tax pre-provision net revenue
Slide 19: Adjusted tangible net income
18 GAAP reconciliations and use of non-GAAP financial measures Adjusted tangible net income
Slide 20: Adjusted earnings and diluted earnings per share
19 GAAP reconciliations and use of non-GAAP financial measures Adjusted earnings and diluted earnings per share
Slide 21: Adjusted Common Equity Tier 1 and Total Risk-Based capital ratios
20 GAAP Reconciliations and use of non-GAAP Financial Measures Adjusted Common Equity Tier 1 and Total Risk-Based capital ratios
Slide 22: Core efficiency ratio (tax-equivalent basis)
21 GAAP reconciliations and use of non-GAAP financial measures Core efficiency ratio (tax-equivalent basis)
Slide 23: Banking segment core efficiency ratios (tax-equivalent basis)
22 GAAP reconciliations and use of non-GAAP financial measures Banking segment core efficiency ratios (tax-equivalent basis)
Slide 24: Mortgage segment core efficiency and core revenue ratios
23 GAAP reconciliations and use of non-GAAP financial measures Mortgage segment core efficiency (tax-equivalent basis) and core revenue ratios
Slide 25: Tangible assets, common equity and related measures
24 GAAP reconciliations and use of non-GAAP financial measures Tangible assets, common equity and related measures
Slide 26: Tangible assets, common equity and related measures
25 GAAP reconciliations and use of non-GAAP financial measures Tangible assets, common equity and related measures
Slide 27: Adjusted return on average tangible common equity and related measures
26 GAAP reconciliations and use of non-GAAP financial measures Adjusted return on average tangible common equity and related measures
Slide 28: Adjusted return on average asset, common equity and related measures
27 GAAP reconciliations and use of non-GAAP financial measures Adjusted return on average asset, common equity and related measures