Slide 1: 2023 Second Quarter Earnings Presentation
July 18, 2023 2023 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 2023 Highlights
3 2Q 2023 Highlights Key highlights Continued boosting balance sheet strength in preparation for challenges associated with economic recession or opportunities ushered in from economic stability Strong preliminary capital ratios with no securities categorized HTM: – Tangible Common Equity to Tan
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. Earnings per Share $2.65 $1.67 $3.97 $2.64 $1.53 $2.83 $3.73 $3.78 $2.91 $1.53 2019 2020 2021 2022 YTD 2023 Earnings per Share Adjusted Earnings per Share1 Dashboar
Slide 6: Well-capitalized for future opportunities or challenges
5 Well-capitalized for future opportunities or challenges 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: $1,588 mm $11.56 $11.58 $14.56 $17.02 $18.55 $21.73 $24.67 $22.90 $24.23
Slide 7: Balanced loan portfolio
6 Residential Development 45% Commercial 31% Consumer 14% Multifamily 10%Office 19% Retail 25% Hotel 16% Warehouse / Industrial 17% Land-Manufactured Home Communities 6% Self Storage 5% Healthcare Facility 3% Other 9% 1-4 family 17% 1-4 family HELOC 5% Multifamily 6% C&D 18% CRE 20% C&I 30% Other 4%
Slide 8: Asset quality remains solid
7 0.45% 0.40% 0.41% 0.38% 0.36% 0.22% 0.20% 0.16% 0.16%0.01% 0.07% 0.07% 0.07%0.46% 0.62% 0.68% 0.61% 0.59% 2Q22 3Q22 4Q22 1Q23 2Q23 Commercial loans HFS Optional GNMA repurchase Other NPAs 1.46% 1.48% 1.44% 1.48% 1.51% 2Q22 3Q22 4Q22 1Q23 2Q23 0.09% 0.00% 0.02% 0.02% 0.03% 2Q22 3Q22 4Q22 1Q23 2Q23
Slide 9: Office exposure
8 Nashville 57% Memphis 10% Knoxville 6% Huntsville 6% Birmingham 4% Chattanooga 3% Other 4% Communities 10% Class A 22% Class B 40% Class C 11% Under $2 Million 27% 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 2Q2
Slide 10: Allowance for credit losses overview
9 1.46% 0.69% 1.20% 0.70% 2.44% 1.66% 1.47% 1.62% 3.67% 1.48% 0.67% 1.13% 0.70% 2.42% 1.35% 1.74% 1.82% 3.77% 1.51% 0.67% 1.22% 0.73% 2.44% 1.32% 1.77% 1.81% 3.86% Gross Loans HFI Commercial & Industrial Non-Owner Occ CRE Owner Occ CRE Construction Multifamily 1-4 Family Mortgage 1-4 Family HELOC Co
Slide 11: Strong liquidity position
10 $1,181.7 $889.7 $1,310.2 $1,609.2 $1,444.5 9.9% 7.4% 10.4% 12.5% 11.4% $- $500.0 $1,000.0 $1,500.0 $2,000.0 $2,500.0 2Q22 3Q22 4Q22 1Q23 2Q23 On-Balance Sheet Liqudity On balance sheet liquidity / tangible assets Strong liquidity position On-Balance Sheet Liquidity ($mm) Liquidity / Uninsured and
Slide 12: Valuable core deposit base
11 Noninterest- bearing checking 22% Interest-bearing checking 26% Money market 33% Savings 4% Time 15% 48% Checking accounts Valuable core deposit base Total deposits ($mm) Cost of deposits Deposit composition $2,896 $2,967 $2,677 $2,489 $2,400 $7,647 $7,039 $8,179 $8,694 $8,472 $10,543 $10,006 $10
Slide 13: Well-balanced deposit portfolio
12 $4,628 $4,621 $4,986 $5,028 $4,919 $3,568 $3,759 $3,797 $3,768 $4,029 $2,347 $1,626 $2,073 $2,387 $1,924 $10,543 $10,006 $10,856 $11,183 $10,872 2Q22 3Q22 4Q22 1Q23 2Q23 Consumer Commercial Public $7,320 $6,653 $7,289 $7,927 $7,859 $3,223 $3,353 $3,567 $3,256 $3,013 $10,543 $10,006 $10,856 $11,18
Slide 14: Stabilizing net interest margin
13 Stabilizing net interest margin Historical yield and costs ¹ Includes tax-equivalent adjustment. 2 Excess liquidity defined as interest-bearing deposits with other financial institutions in excess of 5% of average tangible assets. $5,000 $7,000 $9,000 $11,000 $13,000 -- 1.0% 2.0% 3.0% 4.0% 5.0% 6
Slide 15: Mortgage performance in 2Q 2023
14 Mortgage performance in 2Q 2023 Highlights Mortgage segment recorded a pre-tax net loss of $1.3 million in 2Q 2023 Interest rate lock commitment volume increased 7.4% in 2Q 2023 compared to 1Q 2023 Decay and interest rate volatility led to MSR fair value losses, net of hedging of $4.2 milli
Slide 16: Managing expenses
15 Managing expenses Highlights Consolidated 2Q 2023 core efficiency ratio¹ of 63.5% Banking segment core noninterest expense decreased by $1.7 million, or 2.5%, from the prior quarter as we focus on expense control and efficiencies Mortgage segment core efficiency ratio¹ for Q2 2023 reflects Apr
Slide 17: Appendix
16 Appendix
Slide 18: Adjusted net income and diluted earnings per share
17 GAAP reconciliations and use of non-GAAP financial measures Adjusted net income and diluted earnings per share
Slide 19: Adjusted pre-tax, pre-provision earnings; adjusted tangible net income
18 GAAP reconciliations and use of non-GAAP financial measures Adjusted pre-tax, pre-provision earnings 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 pre-tax, pre-provision earnings; adjusted tangible net income
20 GAAP reconciliations and use of non-GAAP financial measures Adjusted pre-tax, pre-provision earnings Adjusted tangible net income
Slide 22: Adjusted Common Equity Tier 1 and Total Capital Ratios
21 GAAP Reconciliations and use of non-GAAP Financial Measures Adjusted Common Equity Tier 1 and Total Capital Ratios
Slide 23: Core efficiency ratio (tax-equivalent basis)
22 GAAP reconciliations and use of non-GAAP financial measures Core efficiency ratio (tax-equivalent basis)
Slide 24: Banking segment core efficiency ratios (tax-equivalent basis)
23 GAAP reconciliations and use of non-GAAP financial measures Banking segment core efficiency ratios (tax-equivalent basis)
Slide 25: Mortgage segment core efficiency ratios (tax-equivalent basis)
24 GAAP reconciliations and use of non-GAAP financial measures Mortgage segment core efficiency ratios (tax-equivalent basis)
Slide 26: Adjusted Banking and Mortgage segment earnings
25 GAAP reconciliations and use of non-GAAP financial measures Adjusted Banking segment pre-tax pre-provision earnings Adjusted Mortgage segment pre-tax net loss
Slide 27: Tangible assets and equity, tangible book value per share, on-balance sheet liquidity
26 GAAP reconciliations and use of non-GAAP financial measures Tangible assets and equity, tangible book value per common share, tangible common equity to tangible assets, and on- balance sheet liquidity to tangible assets
Slide 28: Tangible assets and equity, tangible book value per common share
27 GAAP reconciliations and use of non-GAAP financial measures Tangible assets and equity, tangible book value per common share and tangible common equity to tangible assets
Slide 29: Return on average tangible common equity
28 GAAP reconciliations and use of non-GAAP financial measures Return on average tangible common equity
Slide 30: Adjusted return on average assets and common equity
29 GAAP reconciliations and use of non-GAAP financial measures Adjusted return on average assets and common equity
Slide 31: Return on average tangible common equity
30 GAAP reconciliations and use of non-GAAP financial measures Return on average tangible common equity
Slide 32: Adjusted return on average assets and common equity
31 GAAP reconciliations and use of non-GAAP financial measures Adjusted return on average assets and common equity