Fb Financial Corporation · NYSE:FBK
Fb Financial — Merger or Acquisition (February 2017)
23 slides from Fb Financial's merger presentation, Feb 8, 2017
Slide 1: Acquisition of the Wholly-Owned Banks of Clayton HC, Inc.
February 9, 2017 Acquisition of the Wholly-Owned Banks of Clayton HC, Inc. Knoxville, TN Tullahoma, TN
Slide 2: Forward-looking statements
This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical
Slide 3: Additional information and participants in the solicitation
Additional information and participants in the solicitation This presentation is for informational purposes only and does not constitute a solicitation of any vote or approval with respect to the Company’s proposed acquisition of the Clayton Banks. The issuance of the Stock Consideration in connecti
Slide 4: Strategically compelling and financially attractive transaction
Culture EPS Accretion Geography Strategically compelling and financially attractive transaction Tangible Book Value Dilution Entrepreneurial owner with West TN heritage High performance DNA Niche lending expertise Internal Rate of Return Opportunity for operating leverage in existing markets Highly
Slide 5: Transaction overview
Management and Board Seats Return of Capital and Pre-closing Distributions Purchase Price Transaction overview Jim Clayton to receive FB Financial Board Seat pending regulatory approval Senior executives of Clayton Banks have executed employment agreements with First Bank(3) Structure Stock purchase
Slide 6: Strategic expansion
Strategic expansion Note: Financial data as of the last twelve months ended December 31, 2016.(1) Assumes 38.1% tax effect on pre-tax income. Source: Company data and SNL Financial.
Slide 7: 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) 2016 5-Yr Avg. Clayton Bank 2.38% 2.30% American City Bank 1.57% 1.49% Combined 2.17% 2.09% Enh
Slide 8: Strategic rationale – Attractive financial impact, establishes new business
Strategic rationale – Attractive financial impact, establishes new business Niche Lending Clayton Bank has managed Manufactured Housing (“MH”) lending through business cycles Approximately $300 mm MH loans at year-end (~10% of pro forma loan portfolio)Strong risk-adjusted yields with sound credit me
Slide 9: Key transaction assumptions
Cost Savings Transaction Expenses Estimated one time transaction expenses of $10.0 million, pre-tax 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 discount on acquired loans ($7.1 mi
Slide 10: Extensive due diligence conducted
Extensive due diligence conducted Close coordination with Clayton Banks’ management teams in all aspects of strategy and operations Risk management analysis done by First Bank’s senior management, including CEO, CFO, CRO, CCO, Operations, Human Resources, Compliance and General Counsel Comprehensive
Slide 11: Loan and deposit mix
Loan and deposit mix Pro Forma Loan Portfolio Pro Forma Deposit Mix Pro forma loan (HFI)-to-deposit ratio 81%Diversified portfolio with 38% C&I (includes CRE - Owner-Occupied) Pro forma loan yield estimated at 5.69%, FBK’s was 5.27% in 4Q 2016 Deposit profile of combined bank: 47% checking, 89% tran
Slide 12: Clayton Banks credit quality
Clayton Banks credit quality Loans Outstanding ($ millions) NPAs / Assets NCOs / Average Loans ALLL / Gross Loans HFI 5-Year CAGR: 8.9% Source: SNL Financial & Company filings; Note: Financial data as of December 31, 2016.
Slide 13: Manufactured Housing niche lending adds meaningful risk-adjusted profitability
Manufactured Housing niche lending adds meaningful risk-adjusted profitability MH Balances ($M) MH Niche comprised of three areas operated from Knoxville with a national platform MH Communities (MHC) C&I and CRE-focused lending to experienced, sophisticated owners / operators of MH communities MH Re
Slide 14: Over years of history in Tennessee, writing the next chapter
Over 110 years of history in Tennessee Writing 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 Memph
Slide 15: Appendix
Appendix FirstBank
Slide 16: Overview of Clayton Bank
Headquartered in Knoxville, TN with a footprint extending to West Tennessee High, sustainable profitability with 2%+ through-the-cycle ROAA, driven by a combination of strong margins and low efficiency ratio Manufactured Housing lending niche capitalizes on unique expertise and deep relationships th
Slide 17: Knoxville market presence
Knoxville market presence Pro Forma Knoxville Footprint Third largest MSA in Tennessee, largest in East Tennessee Supports 120 automotive component manufacturers providing over 13,000 jobs Well situated to attract the key suppliers and assembly operations in the southeast Highly diversified economy
Slide 18: 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 19: Overview of American City Bank
Overview of American City Bank American City Bank Footprint Overview Headquartered in Tullahoma, TN with branches also in Manchester, TN Efficiently run, profitable institution with sustainable ROAA of ~1.5%, pricing power and strong capitalization Customer-focused business model driven by strong re
Slide 20: 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 21: 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 22: 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 December 31, 2016. FB Financial data based on GAAP data. Clayton Bank and Trust and American City Bank based on regulatory data. Excludes purchase accounting a
Slide 23: 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 December 31, 2016. FB Financial data based on GAAP data. Clayton Bank and Trust and American City Bank based on regulatory data. Excludes purchase accounti