First Bancorp · NASDAQ:FBNC
First Bancorp — Investor Presentation (December 2017)
27 slides from First Bancorp's investor presentation, Dec 4, 2017
Slide 1: Bank Local
Bank Local. LOCALFIRSTBANK.COM November 2017
Slide 2: Forward Looking Statements
2 FORWARD LOOKING STATEMENTS Information in this presentation contains forward - looking statements within the meaning of the Private Securities Litigation Ref orm Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially, including without li
Slide 3: Company Profile
3 COMPANY PROFILE* All data as of 9/30/17 and includes ASB Bancorp on a pro forma basis (acquired 10/1/17) Market Capitalization as of 11/3/17 Bank Holding Company First Bancorp Subsidiary Bank First Bank Headquarters Southern Pines, North Carolina Established 1935 as Bank of Montgomery Assets $5.4
Slide 4: Management Team – Diverse Background
4 MANAGEMENT TEAM – DIVERSE BACKGROUND Richard Moore, CEO, First Bancorp – Director since 2010 /CEO since 2012 • Former Managing Director, Relational Investors, Investment advisor to some of the largest pension funds in the world • Former State Treasurer of North Carolina – oversaw more than $80 bil
Slide 5: Q3 2017 Highlights
5 Percentages annualized where applicable Q3 2017 Q3 2016 CHANGE Net income (1) $13.1 million $4.6 million +183.2% EPS Common – Diluted (1) $0.53 $0.23 +130.4% Return on Average Assets 1.15% 0.53% +62 bps Return on Avg. Common Equity 9.98% 5.13% +485 bps Total Loan s $3.4 billion $2.7 billion +29.6%
Slide 6: North Carolina's Most Populous Markets
6 ASHEVILLE CHARLOTTE RALEIGH WINSTON - SALEM GREENSBORO FAYETTEVILLE GREENVILLE Less than 50 50 - 99 100 - 249 250 - 499 500 - 999 1,000 - 1,999 2,000 units or more Housing Units per Square Mile WILMINGTON NORTH CAROLINA’S MOST POPULOUS MARKETS
Slide 7: High Growth Markets Recently Entered
7 HIGH GROWTH MARKETS RECENTLY ENTERED ASHEVILLE Buncombe County WINSTON - SALEM Forsyth County GREENSBORO Guilford County RALEIGH Wake County GREENVILLE Pitt County FAYETTEVILLE Cumberland County CHARLOTTE Mecklenburg County
Slide 8: Investing in Growth Markets
8 ASHEVILLE Buncombe County WINSTON - SALEM Forsyth County GREENSBORO Guilford County RALEIGH Wake County GREENVILLE Pitt County FAYETTEVILLE Cumberland County CHARLOTTE Mecklenburg County At September 30, 2017, the markets shown in the table held 50% of First Bank’s total loans compared to 22% at J
Slide 9: Net Interest Margin
9 4.07% 4.21% 3.93% 3.94% 4.07% 4.08% 4.16% 3.93% 3.99% 3.82% 3.83% 3.91% 3.88% 3.99% 3.00% 3.50% 4.00% 4.50% 5.00% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 REPORTED CORE NET INTEREST MARGIN Net interest margin is calculated by dividing tax - equivalent net interest income by average
Slide 10: Stated Core Loan Yields
10 4.70% 4.83% 4.52% 4.60% 4.71% 4.78% 4.84% 4.54% 4.57% 4.39% 4.47% 4.52% 4.54% 4.64% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00% 5.20% 5.40% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 STATED CORE LOAN YIELDS Core excludes loan discount accretion
Slide 11: Cost of Funds
11 0.25% 0.25% 0.25% 0.25% 0.26% 0.30% 0.34% 0.19% 0.18% 0.18% 0.18% 0.18% 0.19% 0.21% 0.00% 0.20% 0.40% 0.60% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 COST OF FUNDS COST OF DEPOSITS COST OF FUNDS
Slide 12: Deposit Betas
12 0.00% 0.00% 1.33% 18.67% 13.33% - 10.67% 1.33% 4.00% -15.00% -10.00% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% Noninterest Demand Interest Checking Money Market Savings Time > $100K Time < $100K Total Deposit Cost of Funds Interest Bearing Deposits DEPOSIT BETAS Noninterest Bearing Demand, 2
Slide 13: Asheville Savings Bank Acquisition
Asheville Savings Bank Acquisition A perfect opportunity in a state of change.
Slide 14: Asheville Savings Bank: Opportunity Overview and Rationale
14 Create the premier independent North Carolina community bank with over $5bn in assets • Top 3 position in attractive Asheville market • Community focus and relationships • Combined entity is well - positioned to significantly benefit from market disruption (SSB / PSTB; TOWN / PAG; PNFP / BNCN; FN
Slide 15: Asheville Market Demographic Overview
15 ASHEVILLE MARKET DEMOGRAPHIC OVERVIEW 2014 – 2015 GDP Growth (%) 2014 – 2016 Job Growth (%) RANK COMPANY DEPOSITS MARKET SHARE 1 Wells Fargo $1,750 million 23.8% 2 First Citizens $1,344 million 18.3% Pro Forma $649 million 8.8% 3 Bank of America $602 million 8.2% 4 Home Trust $575 million 7.8% 5
Slide 16: Bank Consolidation in North Carolina
16 BANK CONSOLIDATION IN NORTH CAROLINA *Banks with total assets less than $20 billion headquartered in North Carolina COMMUNITY BANKS at December 31, 2014* ASSET SIZE 1 Yadkin Bank $7.5 billion 2 Bank of North Carolina $5.7 billion 3 First Bancorp $3.5 billion 4 Square 1 Bank $3.1 billion 5 Park St
Slide 17: NC Community Bank State Market Share
17 NC COMMUNITY BANK (1) STATE MARKET SHARE Source: SNL Financial Deposit market share data as of June, 2016 (1) Defined as NC - headquartered banks with less than $10 bn total assets, pro forma for pending acquisitions. Excludes mutual/co - ops. First Bancorp is the largest independent North Caroli
Slide 18: Non-Interest Income Growth
18 Bankingport Insurance NON - INTEREST INCOME GROWTH Added incremental revenue of $5.6 million in 2016 and $8.2 million in the first three quarters of 2017. 18
Slide 19: Credit Cards: A Community Bank Differentiator
19 CREDIT CARDS: A COMMUNITY BANK DIFFERENTIATOR First Bank owns its own credit card $20 million in outstanding receivables • 50% increase over past 2+ years $3 million in annual interchange income • 7%+ annual growth rate over last four years Attractive rewards program • Combined debit card/credit
Slide 20: North Carolina: A Great State for Business
20 NORTH CAROLINA: A GREAT STATE FOR BUSINESS North Carolina is currently the 9 th most populated state – projected 7 th by 2030 • Projected to grow 31% over the next 20 years – 5 th highest total growth Right to work state – 2 nd lowest unionized state • One of five states in which collective barga
Slide 21: Our Promise to Service Excellence
Our Promise to Service Excellence We help our customers realize their dreams by providing financial solutions and building trusted relationships.
Slide 22: Service Excellence Principles
22 SERVICE EXCELLENCE PRINCIPLES We treat customers and fellow associates with respect, effectively communicate, and celebrate our unique contributions. We employ the best associates and ensure all are well trained, establish quality standards, and hold each other accountable. Our customers choose w
Slide 23: Investment Thesis
23 INVESTMENT THESIS Bank that offers many of the product capabilities found in larger regional banks but delivers those services with a local community bank focus • Strong culture • Mobile Banking, Wealth Management, Trust Services, Credit Card, Treasury Services, Insurance, and Mortgage Banking Ce
Slide 24: Valuation: Price to Tangible Common Book Value
24 VALUATION: PRICE TO TANGIBLE COMMON BOOK VALUE Closing stock price on November 24, 2017 = $36.64 • Price to tangible book – 2.57x • Based on 9/30/17 tangible book value - $14.25 Price/Tangible Common Book Value 1.35x 1.55x 1.73x 1.85x 2.09x 2.13x 2.21x 2.24x 2.28x 2.36x 2.53x 2.54x 2.57x 2.6x 2.6
Slide 25: Valuation: Price to Trailing Month Earnings
25 VALUATION: PRICE TO TRAILING 12 MONTH EARNINGS Price to trailing twelve month earnings – 21.3x • Based on trailing 12 month diluted common earnings per share of $1.72 and 11/24/17 share price of $36.64 • Based on current SNL Mean Diluted Normalized EPS 2018 Estimate of $2.32, the price to earning
Slide 26: Growth in Tangible Book Value (Common)
26 $11.00 $11.81 $12.63 $13.56 $13.85 $13.53 $14.16 $14.25 $8.00 $9.00 $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 GROWTH IN TANGIBLE BOOK VALUE (COMMON) Price/Tangible Common Book Value
Slide 27: Pro Forma Loan Portfolio at 9/30/17
27 C&D 13% Multifamily 4% 1 - 4 Family 34% C&I 7% Owner - Occupied CRE 21% Non Owner - Occupied CRE 15% Consumer & Other 6% C&D 8% Multifamily 3% 1 - 4 Family 41% C&I 4% Owner - Occupied CRE 13% Non Owner - Occupied CRE 27% Consumer & Other 3% C&D 12% Multifamily 4% 1 - 4 Family 35% C&I 6% Owner - O
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