Fb Financial Corporation · NYSE:FBK
Fb Financial — Investor Presentation (July 2017)
38 slides from Fb Financial's investor presentation, Jul 28, 2017
Slide 1: Third Quarter 2017 Investor Presentation
Third Quarter 2017 Investor Presentation
Slide 2: Forward-looking statements
This investor presentation contains “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking stateme
Slide 3: Terminology, contents and market data
TerminologyIn this investor presentation, references to “we,” “our,” “us,” “FB Financial” or “the Company” refer to FB Financial Corporation, a Tennessee corporation, and our consolidated banking subsidiary, FirstBank, a Tennessee state chartered bank, unless otherwise indicated or the context other
Slide 4: Use of non-GAAP financial measures
Use of non-GAAP financial measures This investor 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 financi
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 and mortgage platforms Complementary positions in high growth me
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 $25bn assets in Tennessee¹ Source: SNL Financial; Note: Deposit data as of June 30, 2016; Pro forma for pending acquisitions announced as of July 19, 20171 Sorted by deposit market share, deposits are l
Slide 7: Attractive footprint with balance between community and metro markets
Attractive footprint with balance between community markets and platforms in high growth metropolitan markets 269123Blue dots 193210228Metro markets 130131135Highway 167169172State county outlines 8715487Green dots 148194148Community markets Source files are619754_FirstBank Bancorp.ai and mapinfo No
Slide 8: Pro forma core results and 2016-2017 highlights
Pro forma core results2 2015 2016 1H173 Diluted earnings per share2 $1.91 $2.40 $0.91 Weighted average diluted shares (in millions) 17.2 19.3 25.5 Net income (in millions) 2 $32.9 $46.3 $23.2 Return on average assets2 1.28% 1.54% 1.46% Return on average tangible common equity2 14.4% 16.7% 12.8% Core
Slide 9: Delivering profitability and growth
Delivering profitability and growth Drivers of profitability improvement 1 Pro forma net income and tax-adjusted return on average assets include a pro forma provision for federal income taxes using a combined effective income tax rate of 33.76%, 35.37%, 35.63%, 35.08%, and 36.75% for the years ende
Slide 10: Net interest margin driven by multiple levers
Net interest margin driven by multiple levers Historical yield and costs 1 Includes tax-equivalent adjustment2 1H 2017 data reflects the six months ended June 30, 2017 NIM (%) 3.52% 3.75% 3.93% 3.97% 4.10% 4.24% NIM, ex-accretion (%) 3.52% 3.75% 3.93% 3.96% 3.97% 4.10% Deposit cost (%) 0.78% 0.48% 0
Slide 11: Consistent loan growth and balanced portfolio
Consistent loan growth and balanced portfolio Total loan growth1 ($mm) and commercial real estate concentration Loan portfolio breakdown1 4Q 2012 2Q 2017 Total HFI loans: $1,971mm 1 Exclude HFS loans, C&I includes owner-occupied CRE2 Risk-based capital at bank level as reported in Call Report. Comme
Slide 12: Asset quality continues to improve
Asset quality continues to improve 1 1H 2017 data annualized. Classified loans ($mm) Net charge-offs / average loans1 NPAs / assets LLR / loans (229) bps ($52) mm
Slide 13: Stable, low cost core deposit franchise
Stable, low cost core deposit franchise Total deposits ($mm) 1 Includes $46.7 million and $50.0 million in mortgage servicing-related escrow deposits for the year ended December 31, 2016 and the quarter ended June 30, 2017, respectively.2 1H 2017 data annualized Noninterest bearing deposits ($mm)1 C
Slide 14: Mortgage Banking continues to execute
Mortgage Banking continues to execute Mortgage pre-tax contribution to overall Company reduced to approximately 16% from 26% on a pro forma basis with Clayton Banks acquisitionRebalanced mix through better channel distribution as Correspondent growth offsets refinancing decline in Consumer Direct1H
Slide 15: Improving operating leverage remains a key objective
Improving operating leverage remains a key objective Consolidated 1H 2017 core efficiency ratio of 71.7% driven by Banking Segment core efficiency ratio of 62.3%, approaching our target level of sub-60% Integration of pending acquisition of Clayton Banks will enhance efficiency; expect to realize 20
Slide 16: Summary of capital position
Summary of capital position See “Reconciliation of non-GAAP financial measures” and the Appendix hereto. Total regulatory capital at consolidated level. Capital position Total capital composition 12/31/15 12/31/16 6/30/2017 Shareholder’s equity / Assets 8.2% 10.1% 15.2% TCE / TA1 6.4% 8.7% 13.9% Com
Slide 17: Writing the next chapter
Over 110 years of history in TennesseeWriting 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 Memphi
Slide 18: Strategically compelling and financially attractive transaction
Strategically compelling and financially attractive transaction 1 Assumes 38.1% tax effect on pre-tax income.Source: Company data and SNL Financial. Data as of or for the three months ended June 30, 2017 Strategic Rationale Compelling ValuationBusiness Mix ShiftNiche LendingEnhances GeographyHigh Pr
Slide 19: 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) 1H 2017 5-Yr Avg. Clayton Bank and Trust 2.59% 2.30% American City Bank 1.64% 1.49% Combined 2.
Slide 20: Key transaction assumptions
Cost Savings Transaction Expenses Estimated one-time pre-tax transaction expenses of $20.0 million, including community investments 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 dis
Slide 21: Loan and deposit mix
Loan and deposit mix Pro Forma Loan Portfolio Pro Forma Deposit Mix Pro forma loan (HFI)-to-deposit ratio 84%Diversified portfolio with 39% C&I (includes CRE - Owner-Occupied) Pro forma loan yield estimated at 5.70%, FBK’s was 5.42% in 1Q 2017 Deposit profile of combined bank: 47% checking, 81% tran
Slide 22: Appendix: FB Financial Standalone
Appendix: FB Financial Standalone
Slide 23: Reconciliation of non-GAAP financial measures: pro forma core net income
Reconciliation of non-GAAP financial measures Pro forma core net income
Slide 24: Reconciliation: pro forma core diluted earnings per share
Reconciliation of non-GAAP financial measures (cont’d) Pro forma core diluted earnings per share
Slide 25: Reconciliation: 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.
Slide 26: Tangible book value per share and TCE to tangible assets
Tangible book value per common share and tangible common equity to tangible assets Reconciliation of non-GAAP financial measures (cont’d) On June 28, 2016, the Company declared a 100-for-1 stock split, increasing the number of issued and authorized shares from 171,800 to 17,180,000 and 250,000 to 25
Slide 27: Reconciliation: core pro forma return on average assets and equity
Reconciliation of non-GAAP financial measures (cont’d) Core pro forma return on average assets and equity
Slide 28: Appendix: Clayton Banks
Appendix: Clayton Banks (FB) FirstBank
Slide 29: Overview of Clayton Bank and Trust
Headquartered in Knoxville, TN with a footprint extending to West TennesseeHigh, sustainable profitability with 2%+ through-the-cycle ROAA, driven by a combination of strong margins and low efficiency ratioManufactured Housing lending niche capitalizes on unique expertise and deep relationships thro
Slide 30: Knoxville market presence
Knoxville market presence Pro Forma Knoxville Footprint Third largest MSA in Tennessee, largest in East TennesseeSupports 120 automotive component manufacturers providing over 13,000 jobsWell situated to attract the key suppliers and assembly operations in the southeastHighly diversified economy Not
Slide 31: Clayton Banks credit quality
Clayton Banks credit quality Loans Outstanding ($ millions) NPAs / Assets NCOs / Average Loans1 ALLL / Gross Loans HFI CAGR: 7.5% Source: SNL Financial & Company filings; Note: Financial data as of June 30, 2017.1 Annualized
Slide 32: Manufactured Housing niche lending
Manufactured Housing niche lending adds meaningful risk-adjusted profitability MH Balances ($M) MH Niche comprised of three areas operated from Knoxville with a national platformMH Communities (MHC) C&I and CRE-focused lending to experienced, sophisticated owners / operators of MH communities MH Ret
Slide 33: 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.
Slide 34: Overview of American City Bank
Overview of American City Bank American City Bank Footprint Overview Headquartered in Tullahoma, TN with branches also in Manchester, TNEfficiently run, profitable institution with sustainable ROAA of ~1.5%, pricing power and strong capitalizationCustomer-focused business model driven by strong rela
Slide 35: 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.
Slide 36: 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 37: 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 June 30, 2017. FB Financial data based on GAAP data. Clayton Bank and Trust and American City Bank based on regulatory data. Excludes purchase accounting adjus
Slide 38: 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 June 30, 2017. FB Financial data based on GAAP data. Clayton Bank and Trust and American City Bank based on regulatory data. Excludes purchase accounting a