Fb Financial Corporation · NYSE:FBK
Fb Financial — FY2019 Earnings Presentation
32 slides from Fb Financial's earnings presentation, Feb 12, 2020
Slide 1: First Quarter Investor Presentation
First Quarter Investor Presentation February 12, 2020
Slide 2: Important Information for Shareholders and Investors
IMPORTANT INFORMATION FOR SHAREHOLDERS AND INVESTORS In connection with the proposed merger with Franklin Financial Network, Inc. (“Franklin”), FB Financial Corporation (“FB Financial) will file a registration statement on Form S-4 with the Securities and Exchange Commission (“SEC”). The registratio
Slide 3: Forward-Looking Statements
Forward–Looking Statements Certain statements contained in this presentation 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 inc
Slide 4: Use of non-GAAP 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 include, without limitati
Slide 5: Snapshot of FB Financial today
Snapshot of FB Financial today Company overview Current organizational structure Second largest Nashville-headquartered bank and third largest Tennessee-based bank Originally chartered in 1906, one of the longest continually operated banks in Tennessee 100% stockholder of FirstBank Completed t
Slide 6: Recent corporate history
Recent corporate history 2015 2016 2017 2018 2019 Awarded Awarded Awarded Awarded Awarded “Top Workplaces” “Top Workplaces” “Top Workplaces” “Top Workplaces” “Top Workplaces” by the Tennessean by the Tennessean by the Tennessean by the Tennessean by the Tennessean Adj. ROAA1: 1.21% Adj. ROAA1: 1.46%
Slide 7: A leading community bank headquartered in Tennessee
A leading community bank headquartered in Tennessee Top 10 banks in Tennessee1 Top 10 banks under $30bn assets in Tennessee1,2 Deposit Percent of Deposit Percent of TN TN Branches market company Branches market company Rank Name Headquarters deposits Rank Name Headquarters deposits (#) share deposit
Slide 8: Strategic drivers
Strategic drivers Experienced Senior Management Team Strategic M&A and Elite Financial Capital Optimization Performance Scalable Platforms Enabled by Great Place to Work Technology Empowered Teams Across Attractive Metro and Community Markets 7
Slide 9: Balance between community and metropolitan markets
Balance between community and metropolitan markets Our pro forma footprint1 Metropolitan markets Bowling Community markets Green MSA Nashville Knoxville MSA MSA Jackson MSA Market rank by deposits: ̶ Nashville (6th) ̶ Chattanooga (5th) Memphis MSA ̶ Knoxville (9th) Chattanooga ̶ Jackson (3rd) MSA
Slide 10: Well positioned in attractive metropolitan markets
Well positioned in attractive metropolitan markets Nashville rankings: “The new 'it' City” – The New York Times1 Chattanooga 4th largest MSA in TN Metro for professional and Most attractive mid-sized cities Diverse economy with over 24,000 businesses #1 business service jobs2 #2 for business3
Slide 11: 2019 highlights
2019 highlights Key highlights Financial results 1 Adjusted diluted EPS of $2.83 for 2019, resulting in FY 2019 – Adjusted ROAA1 of 1.55% Diluted earnings per share $2.65 – Adjusted ROATCE1 of 16.4% Adjusted diluted earnings per share¹ $2.83 Loans (HFI) grew to $4.41 bn, a 20.2% increase from 4Q
Slide 12: Consistently delivering balanced profitability and growth
Consistently delivering balanced profitability and growth Pro forma return on average assets, adjusted1,2 1.69% 1.52% 1.55% 1.46% 1.21% 0.91% 0.84% 2013 2014 2015 2016 2017 2018 2019 Drivers of profitability Loans/deposits Net interest margin Core Efficiency Ratio2 NPLs (HFI) / loans (HFI) (%) Loans
Slide 13: Net interest margin remains strong
Net interest margin remains strong Historical yield and costs 7.0% Average interest earning assets ($mm) Yield on loans $6,000 Cost of deposits NIM 6.0% $5,000 5.0% $4,000 4.0% $3,000 3.0% ($mm) Yields Yields and Costs (%) $2,000 2.0% 1.0% $1,000 interestearning assetsAvg. -- $0 2013 2014 2015 2016
Slide 14: Consistent loan growth and balanced portfolio
Consistent loan growth and balanced portfolio Total loan growth1 ($mm) and commercial real estate concentration % of Risk-Based Capital Commercial real estate (CRE) concentration 12/31/18 12/31/19 $4,410 C&D loans subject to 100% risk- $3,668 99% 88% $3,167 based capital threshold2 $1,702 $1,849 $1,
Slide 15: Stable core deposit franchise
Stable core deposit franchise Total deposits ($mm) Cost of deposits 1 Noninterest bearing (%) Cost of total deposits (%) 30.0% 25.7% 26.1% 24.2% 25.0% 22.8% 22.8% 24.5% 19.8% 20.0% 1.10% 0.76% 15.0% $4,935 0.42% $4,172 10.0% $3,664 0.29% 0.48% $2,438 $2,672 5.0% 0.36% 0.30% $1,804 $1,924 0.0% 2013 2
Slide 16: Mortgage operations overview
Mortgage operations overview Highlights Annual mortgage production Completed mortgage restructuring in 3Q 2019 with sale of Consumer Direct wholesale origination channels and back office right-sizing; Retail 2017 2018 2019 allows additional focus on enhancing retail channels and Wholesale improvin
Slide 17: Managing operating leverage
Managing operating leverage Highlights Core efficiency ratio1 (tax-equivalent basis) Consolidated 2019 core efficiency ratio¹ of Banking Segment, declined 12.8 percentage points since 2013 65.4% Consolidated, declined 10.0 percentage points since 2013 Mortgage Segment Integration of Atlantic Cap
Slide 18: Solid asset quality
Solid asset quality Nonperforming ratios Classified & PCI loans ($mm) NPLs (HFI) / loans (HFI) NPAs / assets¹ Classified Purchased credit impaired $89 2.12% $80 $70 $69 1.72% 1.53% $65 $66 $55 $55 $57 1.21% $46 1.01% 0.86% 0.77% 0.68% 0.58% 0.61% 0.54% 0.60% $21 0.46% $16 0.32% $0 $0 2013 2014 2015
Slide 19: Strong capital position for future growth
Strong capital position for future growth Capital position Tangible book value per share2 12/31/17 12/31/18 12/31/19 $18.55 $17.02 Shareholder’s equity / 12.6% 13.1% 12.4% $14.56 Assets $11.56 TCE / TA2 9.7% 10.5% 9.7% 3Q16 4Q17 4Q18 4Q19 Common equity tier 1 / 10.7% 11.7% 11.1% Risk-weighted assets
Slide 20: M&A strategy
M&A strategy1 Drive times Glasgow Clarksville Tuscaloosa, AL: Kingsport ̶ Nashville ~3.5 hours Johnson ̶ Huntsville ~2 hours City Birmingham, AL: Asheville ̶ Nashville >3 hours ̶ Huntsville ~1.5 hours Atlanta, GA: Greenville ̶ Nashville ~3.5 hours ̶ Chattanooga <2 hours Greenville, SC: Atlan
Slide 21: M&A update: announced merger with Franklin Financial Network
M&A update: announced merger with Franklin Financial Network, Inc. January 21, 2020 Company overview Financial highlights as of 12/31/2019 ($mm) ■ Ticker: FSB (NYSE) Assets $3,910 ■ Headquarters: Franklin, Tennessee Gross loans held for investment 2,804 Deposits 3,208 ■ Franchise highlights: Loan-to
Slide 22: Franklin Financial Network, Inc. transaction overview
Franklin Financial Network, Inc. transaction overview ■ Deal value: $611 million ■ Consideration: ~95% stock / ~5% cash Consideration ■ Exchange ratio: Fixed exchange ratio of 0.9650x of FBK stock + $2.00 per share in cash 1 & structure ■ Pricing: 1.5x Price to tangible book value / 10x Price to 202
Slide 23: M&A update: announced acquisition of FNB Financial Corp.
M&A update: announced acquisition of FNB Financial Corp. September 17, 2019 Pro Forma footprint FNB highlights FBK Parent company of Farmers National Bank of Scottsville, which was founded FNB in 1923 FSB All 5 branches in the Bowling Green MSA, with 3 branches in Bowling Green and 2 branches in
Slide 24: FNB Financial Corp. transaction overview
FNB Financial Corp. transaction overview Expand into attractive Bowling Green MSA ranked 7th in deposit market share Dominant market share in Scottsville, KY with 54.5% of deposits Strong financial performer with net interest margin > 4.00% and ROAA > 1.15% Strategic Rationale Longstanding d
Slide 25: Appendix
FB) Fret Banik Appendix
Slide 26: Reconciliation measures
Reconciliation of non-GAAP financial measures Pro forma net income, adjusted Pro forma diluted earnings per share, adjusted 1 2016 includes loss on sale of mortgage servicing rights, impairment of mortgage servicing rights, gain on sales or write-downs of other real estate owned and other assets and
Slide 27: Reconciliation measures (cont'd)
Reconciliation of non-GAAP financial measures (cont’d) Tax-equivalent core efficiency ratio1 1 Efficiency ratio (GAAP) is calculated by dividing non-interest expense by total revenue. 26
Slide 28: Reconciliation measures (cont'd)
Reconciliation of non-GAAP financial measures (cont’d) Segment tax-equivalent core efficiency ratios 1 Includes mortgage segment other noninterest mortgage banking expense, depreciation, loss on sale of mortgage servicing rights and amortization and impairment of mortgage servicing rights. 27
Slide 29: Reconciliation measures (cont'd)
Reconciliation of non-GAAP financial measures (cont’d) Tangible book value per common share and tangible common equity to tangible assets 28
Slide 30: Reconciliation measures (cont'd)
Reconciliation of non-GAAP financial measures (cont’d) Pro forma return on average tangible common equity Pro forma return on average tangible common equity, adjusted 29
Slide 31: Reconciliation measures (cont'd)
Reconciliation of non-GAAP financial measures (cont’d) Pro forma return on average assets and equity, adjusted 30
Slide 32: Reconciliation measures (cont'd)
Reconciliation of non-GAAP financial measures (cont’d) Total mortgage contribution, adjusted ($) 31