Fb Financial Corporation · NYSE:FBK
Fb Financial — Q4 2020 Earnings Presentation
38 slides from Fb Financial's earnings presentation, Feb 10, 2021
Slide 1: First Quarter 2021 Investor Presentation
February 11, 2021 First Quarter 2021 Investor Presentation
Slide 2: Forward-Looking Statements
1 Forward–Looking Statements Certain statements contained in this press release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements
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 include, without limita
Slide 4: Snapshot of FB Financial today
3 Snapshot of FB Financial today Note: Unaudited financial data as of December 31, 2020; presented on a consolidated basis. 1 Non-GAAP financial measure. See “Use of non-GAAP financial measures” and “Reconciliation of non-GAAP financial measures” in the Appendix hereto. Financial results Balance she
Slide 5: Strategic drivers
4 Strategic drivers Elite Financial Performance Proven Opportunistic Acquirer with Scalable Platforms and Technology Experienced Senior Management Team Great Place to Work Organic Growth Focused Empowered Teams Across Attractive Metro and Community Markets
Slide 6: Recent corporate history
5 2015 2016 2017 2018 2019 2020 Recent corporate history 1 Pro forma net income and tax-adjusted return on average assets and return on average tangible common equity include a pro forma provision for federal income taxes using a combined effective income tax rate of 35.08% and 36.75% for the years
Slide 7: Well positioned in high growth markets
6 Well positioned in high growth markets 1 Source: SNL Financial. Statistics are based upon deposit data by MSA. Market data is as of June 30, 2020 and is presented on a pro forma basis for announced acquisitions since June 30, 2020. Size of bubble represents size of company deposits in a given mark
Slide 8: Footprint has reopened for economic activity
7 Footprint has reopened for economic activity 1 Source: tn.gov/governor/covid-19. Tennessee Pledge 2 Source: georgia.org/covid19bizguide#other. Georgia’s Statewide Executive Order: Guidelines for Businesses. 3 Source: govstatus.egov.com/ky-healthy-at-work. Healthy at Work - Reopening Kentucky. 4 So
Slide 9: Core earnings power remains intact
8 Core earnings power remains intact ¹ See “Use of non-GAAP financial measures” and the Appendix hereto for a discussion and reconciliation of non-GAAP measures. Adjusted pre-tax, pre-provision return on average assets¹ 1.81% 2.25% 2.40% 2.34% 2.15% 2.72% 2015 2016 2017 2018 2019 2020 Drivers of pro
Slide 10: Stabilizing net interest margin
9 Stabilizing net interest margin Historical yield and costs ¹ Includes tax-equivalent adjustment $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 -- 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 4Q19 1Q20 2Q20 3Q20 4Q20 A v g . in te re s t e a rn in g a s s e ts ( $ m m ) Y ie ld s a n d C o s ts ( % ) Average
Slide 11: Mortgage continues to capitalize on rate environment
10 3Q20 Mortgage continues to capitalize on rate environment Highlights ◼ Strong adjusted total mortgage pre-tax contribution1 of $22.9 million in 4Q 2020 and $104.0 million for FY 2020 ◼ Anticipate 1Q 2021 mortgage pre-tax contribution of 70% - 100% of 4Q 2020 contribution ◼ Mortgage sale margins c
Slide 12: Realizing operating leverage through cost savings
11 Realizing operating leverage through cost savings Highlights ◼Consolidated 4Q 2020 core efficiency ratio¹ of 58.5% ◼Banking segment efficiency ratio improvement driven by realized cost savings from Franklin Financial Network merger; systems conversion occurred on October 12, 2020 ◼Mortgage contin
Slide 13: Well-capitalized for future opportunities
12 Well-capitalized for future opportunities Tangible book value per share3 Simple capital structure Common Equity Tier 1 Capital 78% Trust Preferred 2% Subordinated Notes 12% Tier 2 ACL 8% Total regulatory capital: $1,3561 mm $11.56 $11.58 $20.87 $21.64 3Q16 4Q16 3Q20 4Q20 4Q19 3Q202 4Q201,2 Shareh
Slide 14: Stable core deposit franchise
13 Noninterest- bearing checking 24% Interest-bearing checking 26% Money market 31% Savings 4% Time 15% 50% Checking accounts Stable core deposit franchise ¹ Includes mortgage servicing-related deposits of $92.6mm, $110.1mm, $149.1mm, $194.3mm and $147.9 million for the quarters ended December 31, 2
Slide 15: Balanced loan portfolio
14 1-4 Family Professional Construction 38% Commercial Land 34% 1-4 Consumer Construction 9% Healthcare 6% Multi Family 4% Retail 3% Other 6% 1-4 family 15% 1-4 family HELOC 6% Multifamily 2% C&D 17% CRE 23% C&I 32% Other 5% Office 20% Hotel 19% Retail 19% Warehouse / Industrial 9% Land-Mobile Home
Slide 16: Deferrals continue to decline
15 Deferrals continue to decline Deferral programs Principal and Interest Deferrals ($73 million) ▪Standard consumer loan received 2-payment relief; standard commercial loan received 90 day principal and interest forbearance; relationship managers had authority to offer plans that varied from the st
Slide 17: Industries of concern
16 ◼ Industries initially considered to be the most susceptible to issues associated with the pandemic ◼ Significant level of initial deferrals but steady improvement and return to pre-COVID payment plans ◼ Credit quality remains satisfactory overall ◼ Retail, healthcare and transportation not showi
Slide 18: Hotel portfolio – 4.9% of gross loans HFI
17 Hotel portfolio – 4.9% of gross loans HFI Outstanding by location Deferral ProgressionRisk Rating Progression ◼ Portfolio representative of seasoned operators, good flags and good locations (72% Hilton / Hyatt / IHG / Marriott / Wyndham) ◼ Underlying economics remain depressed ◼ Portfolio is larg
Slide 19: Restaurant – 2.0% of gross loans HFI
18 Restaurant – 2.0% of gross loans HFI Portfolio overview C&I 70% Non-Owner Occ CRE 25% C&D 2% Other 3% ◼ Majority are owner operators ◼ Portfolio split roughly evenly between limited service and full service outlets ◼ Limited service has seen an ability to change their model, leading to improvemen
Slide 20: Other Leisure – 1.7% of gross loans HFI
19 Other Leisure – 1.7% of gross loans HFI Portfolio overview Marinas 17% Fitness and Rec Sports Centers 17% RV Parks and Campgrounds 15% Historical Sites 12% Sports Teams and Clubs 9% Theaters 8% Golf Courses and Country Clubs 7% Zoos and Botanical Gardens 5% Other <5% 11% ◼ Mix of industries with
Slide 21: Asset quality remains solid
20 0.71% 1.95% 2.51% 2.66% 2.48% 4Q19 1Q20 2Q20 3Q20 4Q20 0.30% 0.19% 0.00% (0.01%) 0.58% 4Q19 1Q20 2Q20 3Q20 4Q20 Asset quality remains solid Nonperforming ratios Classified loans / loans HFI LLR/loans HFI (excluding PPP loans)3 Net charge-offs (recoveries) / average loans ¹ Adoption of CECL result
Slide 22: Allowance for credit losses overview
21 Allowance for credit losses overview ACL / Loans HFI by Category ◼ Current Expected Credit Loss (CECL) Allowance for Credit Losses (ACL) model utilizes Moody’s baseline scenario from the fourth quarter, with resulting key economic data summarized below: 1Source: Moody’s “July 2020 U.S. Macroecono
Slide 23: Appendix
FB re Bank Appendix
Slide 24: Adjusted net income and diluted earnings per share
23 GAAP reconciliation and use of non-GAAP financial measures Adjusted net income and diluted earnings per share (1) 4Q2020 includes $4,533 FHLB prepayment penalty offset by $715 cash life insurance benefit and $1,370 gain from change in fair value of commercial loans held for sale acquired from Fra
Slide 25: Adjusted pre-tax, pre-provision earnings
24 GAAP reconciliation and use of non-GAAP financial measures Adjusted pre-tax, pre-provision earnings (1) 4Q2020 includes $4,533 FHLB prepayment penalty offset by $715 cash life insurance benefit and $1,370 gain from change in fair value of commercial loans held for sale acquired from Franklin; 3Q2
Slide 26: Adjusted earnings and diluted earnings per share
25 GAAP reconciliation and use of non-GAAP financial measures Adjusted earnings and diluted earnings per share* *Prior to the IPO in the third quarter of 2016, the Company was an S corporation and did not incur federal income taxes. In conjunction with the IPO, the Company converted to a C corporati
Slide 27: Adjusted pre-tax, pre-provision earnings
26 GAAP reconciliation and use of non-GAAP financial measures Adjusted pre-tax, pre-provision earnings (1) 2020 includes charges of $6,838 related to a one time FHLB prepayment penalty and $1,505 related to losses on other real estate owned, offset by $715 cash life insurance benefit and $3,228 gain
Slide 28: Core efficiency ratio (tax-equivalent basis)
27 GAAP reconciliation and use of non-GAAP financial measures Core efficiency ratio (tax-equivalent basis)
Slide 29: Core efficiency ratio (tax-equivalent basis)
28 GAAP reconciliation and use of non-GAAP financial measures Core efficiency ratio (tax-equivalent basis)
Slide 30: Segment core efficiency ratios (tax-equivalent basis)
29 GAAP reconciliation and use of non-GAAP financial measures Segment core efficiency ratios (tax-equivalent basis)
Slide 31: Adjusted mortgage contribution
30 GAAP reconciliation and use of non-GAAP financial measures Adjusted mortgage contribution
Slide 32: Tangible assets and equity
31 GAAP reconciliation and use of non-GAAP financial measures Tangible assets and equity
Slide 33: Return on average tangible common equity
32 GAAP reconciliation and use of non-GAAP financial measures Return on average tangible common equity
Slide 34: Adjusted return on average tangible common equity
33 GAAP reconciliation and use of non-GAAP financial measures Adjusted return on average tangible common equity Adjusted return on average assets and equity Adjusted return on average tangible common equity
Slide 35: Adjusted pre-tax, pre-provision return on average tangible common equity
34 GAAP reconciliation and use of non-GAAP financial measures Adjusted pre-tax, pre-provision return on average tangible common equity Adjusted pre-tax, pre-provision return on average assets and equity
Slide 36: Adjusted pre-tax, pre-provision return on average tangible common equity
35 GAAP reconciliation and use of non-GAAP financial measures Adjusted pre-tax, pre-provision return on average tangible common equity
Slide 37: Adjusted return on average assets and equity
36 GAAP reconciliation and use of non-GAAP financial measures Adjusted return on average assets and equity Adjusted pre-tax, pre-provision return on average assets and equity *Prior to the IPO in the third quarter of 2016, the Company was an S corporation and did not incur federal income taxes. In c
Slide 38: Adjusted Allowance for Credit Losses to Loans Held for Investment
37 GAAP reconciliation and use of non-GAAP financial measures Adjusted Allowance for Credit Losses to Loans Held for Investment