First Mid Bancshares, Inc. · NASDAQ:FMBH
First Mid Bancshares — First MID Illinois Bancshares — Merger or Acquisition (June 2018)
42 slides from First Mid Bancshares's merger presentation, Jun 12, 2018
Slide 1: Investor Presentation June 2018
Investor Presentation June 2018 Strictly Confidential
Slide 2: Disclosures: Non-GAAP Financial Measures and Forward Looking Statements
Disclosu r es Non - GAAP Financial Measures In addition to reports presented in accordance with generally accepted accounting principles (“GAAP”), this presentation contains certain non - GAAP financial measures . The Company believes that such non - GAAP financial measures provide investors with in
Slide 3: Certain Important Information
3 Certain Important Information Registration Statement; No Offer or Solicitation The Company has filed a registration statement (including a prospectus) with the SEC for the offering to which this presentation relates . Before you invest, you should read the prospectus in that registration statement
Slide 4: Table of Contents
4 Table of Contents SECTION DESCRIPTION I. Company and Market Overview II. Financial Highlights III. Acquisition Announcement Appendix – Management and Board Appendix – Non GAAP Reconciliation
Slide 5: I. Company and Market Overview
5 I. Company and Market Overview
Slide 6: Corporate Profile
6 Corporate Profile Market Overview Company Name: First Mid - Illinois Bancshares, Inc. H eadquar t e r s: Mattoon, IL NASDAQ Ticker: FMBH Market Cap: $564 million Annualized Div.: Y iel d : $0.68 1.90% Pri c e: $39.37 Avg. Volume (3Mo) 24,343 52wk Range: $30.01 - $42.03 Analyst Coverage: FIG Partne
Slide 7: History and Recognition
7 History and Recognition First Mid - Illinois Bancshares has a proud 150+ year history of service to agricultural, small business and retail customers. • First National Bank of Mattoon established in 1865 • The oldest nationally chartered bank in Illinois • First Mid - Illinois Bancshares, Inc. inc
Slide 8: Current Footprint
8 Source: S&P Global Market Intelligence data as of May 2018; Unemployment data as of April 2018 Current Footprint • First Mid Bank Locations • First Bank &Trust Locations Current Footprint • Footprint of 59 branches in 42 communities • LPO serving the greater Indianapolis area • Branches strategica
Slide 9: Market Share
9 Market Share Operating Market 1 June 30, 2017 # of Total Market Active D e p o s i t s S h a r e Rank Institution Parent City State Branches ( $000 ) ( %) 1 Commerce Bancshares Inc. Kansas City MO 39 $6 , 223 , 19 0 9 . 0 2 % 2 U.S. Bancorp Minneapolis MN 83 $5 , 885 , 00 5 8 . 5 3 3 Bank of Ameri
Slide 10: Capital Raises and Acquisitions
10 Capital Raises and Acquisitions Capital Raises August 2017 Launched a $20 million at - the - market equity offering. June 2015 Raised $29.3 million through a private placement of common stock. Approximately 90% raised via new institutional relationships. February 2011 Commenced offering of $27.5
Slide 11: Abundant Opportunity for Additional Acquisitions
11 42 16 21 17 28 24 14 3 14 12 9 14 11 4 4 3 7 4 0 20 40 60 80 Illinois Indiana Wisconsin $400M - $800M Iowa Kentucky Missouri $800M - $1.5B $1.5B - $2.5B Abundant Opportunity for Additional Acquisitions Source: S&P Global Market Intelligence □ Includes all banks and thrifts headquartered in Illino
Slide 12: Strategic Advantage
12 Strategic Advantage First Mid - Illinois Bancshares is able to provide strong strategic advantages in key areas : • Diversified Sources of Revenue • Quality Core Deposit Franchise • Diverse Geographic Footprint • Demonstrated Ability to Raise Capital and Successfully Complete Acquisitions • Track
Slide 13: II. Financial Highlights
13 II. Financial Highlights
Slide 14: Financial Profile
14 Financial Profile Balance Sheet Total Assets $2 , 114 , 49 9 $2 , 884 , 53 5 $2 , 841 , 53 9 $2 , 837 , 34 6 Total Gross Loans $1 , 281 , 88 9 $1 , 825 , 99 2 $1 , 939 , 50 1 $1 , 977 , 69 7 Total Deposits $1 , 732 , 56 8 $2 , 329 , 88 7 $2 , 274 , 63 9 $2 , 291 , 89 1 Loans/Deposits 73 . 93 % 78
Slide 15: Demonstrated Track Record of Growth
15 Demonstrated Track Record of Growth $1,605 $1,607 $2,114 $2,885 $2,842 $2,837 $479 2013 2014 2015 2016 2017 2018Q1 Total Assets ($mm) Total Net Loans ($mm) Total Deposits ($mm) Net Income ($000) $970 $1,049 $1,267 $1,809 $1,920 $1,957 $365 201 3 201 4 201 5 201 6 2017 Y 2018Q1 $1,288 $1,272 $1,73
Slide 16: Creating Value for Shareholders
16 Creating Value for Shareholders First Mid - Illinois Bancshares consistently provides value to shareholders by delivering $0.74 $1.26 $1.42 $1.44 $1.51 $1.57 $1.67 $1.29 $1.62 $1.73 $1.85 $1.81 $2.05 $2.13 $0.17 $0.85 $0.19 $1.05 $0.22 $0.29 $0.30 $0.33 $0.35 $0.38 $0.38 $1.04 $0.38 $1.07 $0.38 $
Slide 17: Performance Highlights
17 Performance Highlights Core Return on Average Assets (1) Core Return on Average Tangible Common Equity (1) Net Interest Margin, TE (1) 0.84% 0.94% 0.95% 0.94% 1.04% 1.22% 2013Y 2014Y 2015Y 2016Y 2017Y 2018Q1 12.89% 13.91% 12.27% 13.22% 13.31% 15.01% 2 0 1 3 Y 2 0 1 4 Y 2015Y 2016Y Efficiency Rati
Slide 18: Strong Credit Quality
18 Strong Credit Quality Nonperforming Assets/Total Assets Nonperforming Assets ($000) Net Charge - offs/Average Loans Loan Loss Reserve/Gross Loans 0.44% 0.30% 0.21% 0.70% 0.72% 0.70% 2013Y 2014Y 2015Y 2016Y 2017Y 2018Q1 $7,037 $4,803 $4,491 $20,223 $20,347 $19,849 2013Y 2014Y 2015Y 2016Y 2017Y 201
Slide 19: Diversified Loan Portfolio
19 Diversified Loan Portfolio Loan Composition ($000s) Rounded to Nearest Percentage March 31, 2018 Balance % Commercial Real Estate (Nonfarm/Nonresidential) $ 699,142 35 .2% Commercial & Industrial Loans $ 458,691 23 .2% 1 - 4 Family Residential Properties $ 289,899 14 .7% Agricultural Real Estate
Slide 20: Quality Core Deposit Franchise
20 Quality Core Deposit Franchise Deposit Composition ($000s) Rounded to Nearest Percentage March 31, 2018 Balance % Checking $ 1,186,062 52% Savings $ 374,594 17% MMDA $ 389,020 16% CD – Retail/Business $ 277,278 12% CD – Public $ 59,245 3% CDAR $ 5,692 0% CD – Brokered Deposits $ - 0% Total Deposi
Slide 21: Diversified Solutions and Sources of Revenue
21 Diversified Solutions and Sources of Revenue First Mid - Illinois Bank’s Trust and Wealth Management group provides a stream of non - interest income through a variety of financial products and services: • Farm Management • Investment/Brokerage through an agreement with Raymond James Financial Se
Slide 22: III. Acquisition Announcement
22 III. Acquisition Announcement
Slide 23: SCB Bancorp Inc. Corporation Overview
23 SCB Bancorp Inc. Corporation Overview Company Overview (1) Total Assets: Total Deposits: Total Loans: Total AUM: $437 Million $319 Million $256 Million $2.4 Billion Corporation is headquartered in Decatur, Illinois SCB Branch Footprint ▪ SCB holds the #3 market share position in Macon County with
Slide 24: Compelling Rationale
24 Compelling Rationale ▪ Execution of Strategic Plan to enhance revenue diversification with complementary business lines − Approximately 58% of SCB’s total revenue consists of Insurance and Ag Services / Trust operations ▪ Deepens First Mid’s presence in target markets − Gain 3 rd ranked deposit m
Slide 25: Complementary Insurance Operations
25 Complementary Insurance Operations □ Soy Capital Bank and Trust acquired JL Hubbard Insurance and Bonds (“JLH”) in 2002 □ Largest community bank - owned insurance agent in Illinois • First Mid Insurance Group (“FMIG”) is 3 rd □ Multi - state customer base with offices in Decatur and Peoria • FMIG
Slide 26: Complementary Ag Services & Trust Operations
26 Complementary Ag Services & Trust Operations □ Combined assets under management nearly $4.0 billion □ Largest farm manager in Illinois with approximately 248,000 acres under management ▪ First Mid manages 25,000 acres □ Operates out of five offices: Bloomington, Decatur, Kankakee, Peoria, and Spr
Slide 27: Pro Forma Non-Interest Income
27 Pro Forma Non - Interest Income First BancTrust SCB Bancorp Pro Forma Data as of or for year ended December 31, 2017 FMBH Net - Interest I n c o m e 76% N on - I n t e r e s t Income 24% Net - Interest Income 84% N on - I n t e r e s t Income 16% N o n - I n t e r e s t Income 31% Net - Interest
Slide 28: Transaction Terms and Pricing Ratios
Transaction Terms and Pricing Ratios 5.4579 FMBH shares and $98.44 in cash for each outstanding share of SCB common stock³ 1.2 million FMBH shares issued 8.3% Transaction Value (1) $70.4 million Consideration Structure (2) Shares Issued (2) SCB Pro Forma Ownership Price/TBV Price/LTM EPS Board Repre
Slide 29: Key Assumptions
29 Key Assumptions Estimated Cost Savings: Transaction Expenses: Credit Marks: Core Deposit Intangible: Capital Raise: Revenue Enhancements: None assumed; however, opportunities exist in wealth management, trust and insurance businesses $6.0 million, pre tax 1.5% gross mark on loans 1.5% of non - ti
Slide 30: Estimated Pro Forma Financial Metrics
30 Estimated Pro Forma Financial Metrics 1) Estimated financial impact is presented solely for illustrative purposes. Includes assets acquired from FIRT and SCB with est ima ted corresponding purchase accounting marks, deal related expenses and assumes net proceeds from capital raise of $28.5 millio
Slide 31: Pro Forma Franchise
31 Pro Forma Franchise P r o F o r ma O v erv i e w (1) Total Assets: Total Deposits: Total Loans: Trust & Wealth Mgmt AUM: ~$3.8 Billion ~$3.0 Billion ~$2.6 Billion ~$3.9 Billion • 69 banking centers in 44 communities • Combined Company to rank 3 rd in deposit market share in Macon County (currentl
Slide 32: Pro Forma Loan Portfolio
32 Pro Forma Loan Portfolio FMBH SCB Bancorp, Inc. Pro Forma As of March 31, 2018: FIRT C &D 5 . 5 % 1 - 4 Fam 12.8% H E L O C 1.9% OwnOcc CRE 15.7% Other CRE 19.6% M u l t if a m 3.1% C&I 23 . 2 % Farm & Agric 10.0% Consr & Other 8.2% C &D 1 . 2 % 1 - 4 Fam 21.1% H E L O C 4.6% OwnOcc CRE 8.2% Othe
Slide 33: Pro Forma Deposit Portfolio
33 Pro Forma Deposit Portfolio FMBH SCB Bancorp, Inc. Pro Forma As of March 31, 2018: FIRT Non Int . Bearing 20 . 9 % NOW Accts 30.9% MMDA & Sav 33.3% Retail Time 12.9% Jumbo Time 2.1% Non Int . B e a r i ng 3 . 0 % NOW Accts 3.5% MMDA & Sav 48.1% Retail Time 22.2% Jumbo Time 23.3% Composition Compo
Slide 34: Experienced Growth Through M&A
34 Experienced Growth Through M&A T r ansa c ti o n Date Closed 9 / 1 0 /10 Closed 8 / 1 4 /15 Closed 9 / 0 8 /16 C losed 5 / 1 / 18 A n n o u n c ed 6/12/18 T r ansa c ti o n Value $16 Million $16 Million $89 Million $72 Million $70 Million Deal Type Branch Branch Whole Bank Whole Bank Whole Bank A
Slide 35: Appendix – Management and Board
35 Appendix – Management and Board
Slide 36: Experienced Management Team
36 Experienced Management Team Joseph R. Dively Chairman, Chief Executive Officer and President Joe joined First Mid as a Senior Executive VP and President of the Bank in 2011. He has served on the Board of First Mid - Illinois Bancshares since 2004. Prior to joining the company, he was a Senior VP
Slide 37: Board of Directors
37 Board of Directors Aligned with shareholders, dedicated to the mission and committed to measured growth, First Mid - Illinois Bancshares’ Board of Directors provide a diverse set of experiences and industry knowledge as well as strong ties to our communities. Holly A. Bailey President, Howell Asp
Slide 38: Appendix – Non-GAAP Reconciliation
38 Appendix – Non - GAAP Reconciliation
Slide 39: Non-GAAP Reconciliation: Tangible Common Equity and Tangible Assets
39 Non - GAAP Reconciliation Tangible Common Equity and Tangible Assets (Dollars in thousands, except per share data) As of December 31, As of March 31, 2013 2014 2015 2016 2017 2018 Tangible Common Equity: Total Common Equity $ 97,346 $ 137,516 $ 177,609 $ 280,673 $ 307,964 $ 310,587 Adjustments Go
Slide 40: Non-GAAP Reconciliation: Adjusted Earnings Metrics
40 Non - GAAP Reconciliation Adjusted Earnings Metrics 1) Annual periods through 2017 tax effected at 35%; 2018 Q1 tax effected at 21% (Dollars in thousands, exept per share data) Three months For the twelve months ended December 31, ended March 31, 2013 2014 2015 2016 2017 2018 Net Income $ 14,722
Slide 41: Non-GAAP Reconciliation: Net Interest Margin
41 Non - GAAP Reconciliation Net Interest Margin 1) Calculated on a tax equivalent basis where interest earned on tax - exempt securities and loans Is adjusted to an amount comparable to interest subject to normal income taxes assuming a federal tax rate of 21% during 2018 and 35% during 2017 and in
Slide 42: First Mid Bank & Trust
First == Mid-Illinois ¥ Bank & Trust al First Mid BANK & TRUST
First MID Illinois Bancshares — Merger or Acquisition (June 2018) on 6ix