Slide 1: 2022 Second Quarter Earnings Presentation
2022 Second Quarter Earnings Presentation July 19, 2022
Slide 2: Forward–Looking Statements
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, statem
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 may include, without limi
Slide 4: 2Q 2022 highlights
2Q 2022 highlights Key highlights Financial results Loans HFI grew 31.0% annualized in 2Q 2022, or $619.4 million. 2Q 2022 Year-over-year loan growth of 19.8%. Excluding PPP loans, year- over-year loan growth of 20.7%, or $1.5 billion Diluted earnings per share $0.41 Adjusted diluted earnings per
Slide 5: Driving shareholder value
Driving shareholder value Adjusted Earnings per Share1 Tangible Book Value per Share1 TBVPS Adj. TBVPS (Ex. AOCI) $3.73 $3.78 $24.67$24.55 $25.24 $21.73$21.15 $22.67 $2.83 $2.61 $18.55$18.16 $17.02$17.16 $1.38 2018 2019 2020 2021 1H22 2018 2019 2020 2021 2Q22 Short Term Performance Dashboard Adjuste
Slide 6: Stable net interest margin
Stable net interest margin Historical yield and costs Average interest earning assets Yield on loans Cost of deposits NIM 5.0% $13,000 Avg. interest earning 4.0% $11,000 Yields and Costs (%) assets ($mm) 3.0% $9,000 2.0% 1.0% $7,000 -- $5,000 2Q21 3Q21 4Q21 1Q22 2Q22 NIM1 3.18% 3.20% 3.19% 3.04% 3.5
Slide 7: Mortgage performance in 2Q 2022
Mortgage performance in 2Q 2022 Highlights Retail channel interest rate lock commitments ($mm) Adjusted total mortgage loss1 of $2.7 million during the Purchase Refinance quarter $927 $860 Wind-down of direct-to-consumer channel largely $741 $688 completed; initial structural changes undertaken
Slide 8: Managing expenses and investing to support growth
Managing expenses and investing to support growth Highlights Core efficiency ratio (tax-equivalent basis)¹ Consolidated 2Q 2022 core efficiency ratio¹ Banking segment of 61.1% Consolidated Mortgage segment 111.8% Banking segment realizing the benefits of an 100.5% asset sensitive balance sheet 9
Slide 9: Well-capitalized for future opportunities
Well-capitalized for future opportunities Capital position Tangible book value per share3 2Q211 1Q221 2Q221,2 Shareholder’s equity/Assets 11.5% 10.9% 10.8% $24.67 $21.73 $22.67 $18.55 TCE/TA3 9.5% 9.0% 8.9% $17.02 $14.56 $11.56 $11.58 Common equity 12.4% 12.0% 11.5% tier 1/Risk-weighted assets 3Q16
Slide 10: Valuable core deposit base
Valuable core deposit base Total deposits ($mm) Cost of deposits Noninterest-bearing (%) Cost of total deposits (%) 35.0% 30.0% 27.5% 25.9% 25.3% 25.4% 25.0% 24.4% $10,837 $10,996 20.0% $10,540 $10,204 $10,072 15.0% 10.0% 0.31% 0.26% 0.25% 0.22% 0.20% 5.0% 0.0% 2Q21 3Q21 4Q21 1Q22 2Q22 Deposit compo
Slide 11: Balanced loan portfolio
Balanced loan portfolio Portfolio mix C&I1 exposure by industry Other Balance as of June 30, 2022 4% C&I CRE-OO Total % of Total 1-4 family Real Estate Rental and Leasing $ 308.1 $ 215.0 $ 523.1 20.6% C&I1 17% Finance and Insurance 277.7 11.0 288.7 11.4% 29% Retail Trade 112.3 132.2 244.5 9.6% 1-4 f
Slide 12: Asset quality remains solid
Asset quality remains solid Nonperforming Assets1 / Assets Nonperforming Loans (HFI) / Loans (HFI) 0.66% 0.83% 0.50% 0.50% 0.59% 0.62% 0.44% 0.46% 0.51% 0.51% 2Q21 3Q21 4Q21 1Q22 2Q22 2Q21 3Q21 4Q21 1Q22 2Q22 LLR/loans HFI Net charge-offs (recoveries) / average loans 0.13% 2.01% 0.12% 1.91% 1.65% 0.
Slide 13: Allowance for credit losses overview
Allowance for credit losses overview Current Expected Credit Loss (CECL) Allowance for Credit Losses (ACL) model utilizes Moody’s model with key economic data summarized below: FQE, FYE 12/31, 3Q 2022 4Q 2022 2022 2023 2024 2025 2026 GDP (bcw$) $ 19,914.6 $ 19,804.9 $ 19,842.1 $ 19,900.1 $ 20,544.
Slide 14: Appendix
FB} pee Bank Appendix
Slide 15: Adjusted net income and diluted earnings per share
GAAP reconciliation and use of non-GAAP financial measures Adjusted net income and diluted earnings per share 14
Slide 16: Adjusted pre-tax, pre-provision earnings
GAAP reconciliation and use of non-GAAP financial measures Adjusted pre-tax, pre-provision earnings 15
Slide 17: Adjusted earnings and diluted earnings per share
GAAP reconciliation and use of non-GAAP financial measures Adjusted earnings and diluted earnings per share 16
Slide 18: Adjusted pre-tax, pre-provision earnings
GAAP reconciliation and use of non-GAAP financial measures Adjusted pre-tax, pre-provision earnings 17
Slide 19: Core efficiency ratio (tax-equivalent basis)
GAAP reconciliation and use of non-GAAP financial measures Core efficiency ratio (tax-equivalent basis) 18
Slide 20: Segment core efficiency ratios (tax-equivalent basis)
GAAP reconciliation and use of non-GAAP financial measures Segment core efficiency ratios (tax-equivalent basis) 19
Slide 21: Adjusted Banking segment pre-tax pre-provision earnings
GAAP reconciliation and use of non-GAAP financial measures Adjusted Banking segment pre-tax pre-provision earnings 20
Slide 22: Adjusted Mortgage pre-tax net (loss) contribution
GAAP reconciliation and use of non-GAAP financial measures Adjusted Mortgage pre-tax net (loss) contribution 21
Slide 23: Tangible assets and equity, tangible book value per share
GAAP reconciliation and use of non-GAAP financial measures Tangible assets and equity, tangible book value per common share and tangible common equity to tangible assets 22
Slide 24: Tangible assets and equity, tangible book value per share
GAAP reconciliation and use of non-GAAP financial measures Tangible assets and equity, tangible book value per common share and tangible common equity to tangible assets 23
Slide 25: Return on average tangible common equity
GAAP reconciliation and use of non-GAAP financial measures Return on average tangible common equity 24
Slide 26: Adjusted return on average assets and common equity
GAAP reconciliation and use of non-GAAP financial measures Adjusted return on average assets and common equity 25
Slide 27: Return on average tangible common equity
GAAP reconciliation and use of non-GAAP financial measures Return on average tangible common equity 26
Slide 28: Adjusted return on average assets and common equity
GAAP reconciliation and use of non-GAAP financial measures Adjusted return on average assets and common equity 27