Fb Financial Corporation · NYSE:FBK
Fb Financial — Investor Presentation (September 2020)
44 slides from Fb Financial's investor presentation, Sep 8, 2020
Slide 1: Third Quarter 2020 Investor Presentation
Third Quarter 2020 Investor Presentation September 9, 2020
Slide 2: 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 3: 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 4: Snapshot of FB Financial today
Snapshot of FB Financial today Company overview Franchise map1 ◼ Second largest Nashville-headquartered bank and third largest Tennessee-based bank ◼ Originally chartered in 1906, one of the longest continually operated banks in Tennessee 100% stockholder of FirstBank ◼ Completed the largest bank IP
Slide 5: Recent corporate history
Recent corporate history 2015 2016 2017 2018 2019 YTD 2020 Awarded Awarded Awarded Awarded Awarded Awarded “Top Workplaces” “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 b
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 $30bn assets in Tennessee1,2 Deposit Percent of TN TN Deposit Percent of Branches market company Branches Rank Name Headquarters deposits Rank Name Headquarters deposits market share company (#) share d
Slide 7: 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 6
Slide 8: Balance between community and metropolitan markets
Balance between community and metropolitan markets Our pro forma footprint1 Metropolitan markets Bowling Community markets Green MSA Nashville Knoxville MSA MSA Jackson MSA ◼ Market rank by deposits: ̶ Nashville (6th) ̶ Chattanooga (5th) Memphis MSA ̶ Knoxville (9th) Chattanooga ̶ Jackson (3rd) MSA
Slide 9: Well positioned in attractive metropolitan markets
Well positioned in attractive metropolitan markets Chattanooga Nashville rankings: “The new ‘it’ City” – The New York Times1 ◼ 4th largest MSA in TN ◼ Diverse economy with over 24,000 businesses in Metropolitan Economic ◼ Employs over 260,000 people #1 #2 Best Place for New Businesses3 Strength Rank
Slide 10: 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 Safety methods in place ▪Re-suspending lobby access
Slide 11: 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 Open w/ Open w/ Open w/ Open w/ Local jurisdictions, Tennessee1 50% Capacity Distancing Distancing Distancing Distancing
Slide 12: While we continue to work with impacted customers
While we continue to work with impacted customers Deferral programs Total first deferrals by type ($918 million1) ▪ First deferral held no requirements; granting of second $354.8 deferrals are being decided on a case-by-case basis $321.7 ▪ Standard consumer loan received 2-payment relief; standard c
Slide 13: Strong liquidity position
Strong liquidity position ◼ Customer deposit base has seen consistent growth in On balance sheet liquidity balances over the past 12 months and remains a stable base of funding and liquidity On-Balance Sheet Liquidity On-Balance Sheet Liquidity / Tangible Assets $988.5 $1,000.0 ◼ $900.0 Monitoring l
Slide 14: Core deposit franchise provides stable liquidity
Core deposit franchise provides stable liquidity Total deposits ($mm) Cost of deposits Customer deposits Brokered and internet time deposits Noninterest bearing (%) Cost of total deposits (%) 35.0% 29.8% $5,953 30.0% 24.7% 24.5% 24.8% $5,377 $15 25.0% 23.0% $4,843 $4,922 $4,935 $20 20.0% $25 $20 $30
Slide 15: Well-capitalized headed into recession
Well-capitalized headed into recession Capital position Tangible book value per share3 2Q19 1Q202 2Q201,2 Shareholder’s equity/Assets 12.1% 11.8% 11.1% $19.07 $18.35 TCE/TA² 9.2% 9.1% 8.7% $11.56 $11.58 Common equity 10.4% 11.0% 11.6% tier 1/Risk-weighted assets 3Q16 4Q16 1Q20 2Q20 Tier 1 capital/Ri
Slide 16: Balanced portfolio
Balanced portfolio Portfolio mix – gross loans HFI ($4.8bn) C&I1 exposure by industry Other Balance Ex. PPP PPP 6% 1-4 family C&I CRE-OO Total % of Total Loans 15% Real Estate Rental and Leasing $ 278.7 $ 97.2 $ 375.9 22.7% $ 11.5 Retail Trade 65.3 101.1 166.4 10.0% 23.3 1-4 family HELOC Wholesale T
Slide 17: Industries of concern – pro forma 2020
Industries of concern – pro forma as of June 30, 2020 FBK FSB Pro Forma¹ Industries of Industries of Industries of Concern Concern Concern 22.7% 20.9% 22.0% $4.8bn $2.8bn $7.6bn Other Other Other Industries Industries Industries 77.3% 79.1% 78.0% FBK % of FSB % of Pro Forma¹ % of Industries of Conce
Slide 18: FBK Industries of concern
FBK Industries of concern ◼ Concentrations representative of community bankers Industry exposures / gross loans (HFI) serving customers across our communities 7.7% ◼ Focused on in-market relationship banking ◼ Trends better than expected to date as markets reopened 5.3% in late April / early May, co
Slide 19: FBK Retail portfolio – 7.7% of gross loans HFI
FBK Retail portfolio – 7.7% of gross loans HFI ◼ 53% C&I / CRE-OO and 47% CRE Non-OO and Other Portfolio overview ◼ CRE Non-owner occupied and Other – Generally smaller strip centers with backing of good Car, RV, Boat and guarantors; largest single loan <$8 million ATV Dealers 22% – High level of te
Slide 20: FBK Healthcare portfolio – 5.3% of loans HFI
FBK Healthcare portfolio – 5.3% of loans HFI ◼ 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 / ◼ Offices of Physicians benefitted from the majority of our 25%
Slide 21: FBK Hotel portfolio – 4.0% of gross loans HFI
FBK Hotel portfolio – 4.0% of gross loans HFI ◼ Occupancy rates vary widely across footprint, with Nashville hotels Outstanding by location at approximately 30% - 40%, while some geographies are as high as 80% ◼ Reports from operators reference leisure properties lead the way, Out of Market 8% Thurs
Slide 22: FBK Other Leisure – 2.3% of gross loans HFI
FBK Other Leisure – 2.3% of gross loans HFI ◼ Confidence in portfolio due to current performance and Portfolio overview strong guarantors Other <5% Marinas ◼ Certain categories, such as marinas, have actually 18% 19% benefitted from current backdrop as safe recreational activities are sought Theater
Slide 23: FBK Transportation and warehousing – 2.1% of gross loans HFI
FBK Transportation and warehousing – 2.1% of gross loans HFI ◼ Overall satisfactory performance Portfolio overview Other ◼ Larger operators are improving Transportation and Warehousing 16% ◼ One small trucking operator with <$1.5 million in outstandings filed for bankruptcy during the quarter Consum
Slide 24: FBK Restaurant – 1.3% of gross loans HFI
FBK Restaurant – 1.3% of gross loans HFI ◼ Overall satisfactory performance Portfolio overview ◼ Quick service seeing satisfactory results with drive through model Other ◼ Full service impacted more heavily given costs to re-open Bars 4% and concerns regarding potential further shut-downs. 6% Portfo
Slide 25: FSB portfolio overview
FSB portfolio overview Portfolio mix C&I1 exposure by industry Other Balance Ex. Non-Core Non-Core 0% C&I CRE-OO Total % of Total Loans 1-4 family 1 Real Estate Rental and Leasing $ 38.1 $ 70.8 $ 108.9 25.4% $ 12.6 C&I 15% Accommodation and Food Services 5.4 33.3 38.7 9.0% - 28% Retail Trade 5.4 27.
Slide 26: FSB Industries of concern
FSB Industries of concern ◼ Concentrations representative of community bankers Industry exposures / gross loans (HFI) serving customers across FSB’s communities 9.1% ◼ Core portfolio is focused on in-market relationship banking ◼ No shared national credits outside of the non-core portfolio ◼ Limited
Slide 27: FSB Retail portfolio – 9.1% of loans HFI
FSB Retail portfolio – 9.1% of loans HFI ◼ Core business focuses primarily on local customers and Portfolio overview local projects 1 ◼ Focus on multiple sources of repayment (Primary, C&I 18% Secondary and Tertiary) ◼ 3 Non-Owner Occupied relationships over $10 million; largest loan is ~$34 million
Slide 28: FSB Hotel portfolio – 5.1% of loans HFI
FSB Hotel portfolio – 5.1% of loans HFI ◼ Focus on experience, flag, operator and location Outstanding by location ◼ Portfolio is underwritten less than 65% LTV Other Middle TN ◼ Diversification within the portfolio and flag with greater than 65% 6% being Business Class or Premium Flags Franklin ◼ P
Slide 29: FSB Restaurant – 2.8% of loans HFI
FSB Restaurant – 2.8% of loans HFI ◼ Over 50% of portfolio are for Fast-Casual/Sit Down Portfolio overview restaurants with local ownership and established operators ◼ Focus on relationship banking including personal, business, depository and treasury relationships ◼ Primary customer is an experienc
Slide 30: FSB Non-core portfolio - $358 million as of 2Q 2020
FSB Non-core portfolio - $358 million as of 2Q 2020 ◼ The FSB “non-core” portfolio consists primarily of shared national credits and nationwide loans to private-equity backed companies, with a focus on healthcare ◼ FSB management has been unwinding this portfolio since 2019. There was $430 million i
Slide 31: Allowance for credit losses overview
Allowance for credit losses overview ◼ Current Expected Credit Loss (CECL) Allowance for Credit Losses (ACL) model utilizes a blend of Moody’s economic scenarios from June 20, 2020, with resulting key economic data summarized below: FQE, FYE 12/31, 3Q 2020 4Q 2020 1Q 2021 2020 2021 2022 2023 GDP (bc
Slide 32: Asset quality remains solid
Asset quality remains solid Nonperforming ratios Classified loans ($mm) NPLs (HFI)/loans (HFI)1 NPAs/assets1,2 $88 0.77% $79 $80 0.74% 0.73% 0.71% $74 0.68% $69 0.59% 0.62% 0.60% 0.43% 0.47% 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 LLR/loans HFI (excluding PPP loans)3 Net charge-offs/averag
Slide 33: Core earnings power remains intact
Core earnings power remains intact Adjusted pre-tax, pre-provision return on average assets¹ 2.72% 2.40% 2.34% 2.25% 2.15% 1.81% 2015 2016 2017 2018 2019 YTD 2020 Drivers of profitability Loans/deposits Net interest margin Noninterest income ($mm) Core efficiency ratio1 Loans excluding HFS Loans HFS
Slide 34: Mortgage operations overview
Mortgage operations overview Highlights Quarterly mortgage production ◼ Record total Mortgage pre-tax contribution of $33.6mm for 2Q Consumer Direct 2020 Retail 2Q19 1Q20 2Q20 Wholesale ◼ Mortgage sale margins continue to be elevated due to industry capacity constraints and low interest rates ◼ Mort
Slide 35: Appendix
Appendix 34
Slide 36: Reconciliation of non-GAAP financial measures: Adjusted diluted EPS
Reconciliation of non-GAAP financial measures Adjusted diluted earnings per share 35
Slide 37: Reconciliation of non-GAAP financial measures: Adjusted pro forma net income
Reconciliation of non-GAAP financial measures Adjusted pro forma net income and diluted earnings per share1 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 o
Slide 38: Reconciliation of non-GAAP financial measures: 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. 37
Slide 39: Reconciliation of non-GAAP financial measures: 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. 38
Slide 40: Reconciliation of non-GAAP financial measures: 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 39
Slide 41: Reconciliation of non-GAAP financial measures: 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 40
Slide 42: Reconciliation of non-GAAP financial measures: 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 41
Slide 43: Reconciliation of non-GAAP financial measures: Pro forma return on 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 42
Slide 44: Reconciliation of non-GAAP financial measures: Adjusted allowance for credit losses
Reconciliation of non-GAAP financial measures (cont’d) Adjusted allowance for credit losses to loans held for investment 43
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