Fb Financial Corporation · NYSE:FBK
Fb Financial — Q1 2020 Earnings Presentation
38 slides from Fb Financial's earnings presentation, Apr 28, 2020
Slide 1: First Quarter 2020 Earnings Presentation
First Quarter 2020 Earnings Presentation April 28, 2020
Slide 2: Important Information for Shareholders and Investors
IMPORTANT INFORMATION FOR SHAREHOLDERS AND INVESTORS In connection with the proposed merger with Franklin, FB Financial will file a registration statement on Form S-4 with the SEC. The registration statement will contain the joint proxy statement of Franklin and FB Financial to be sent to the FB Fin
Slide 3: Forward-Looking Statements
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 in
Slide 4: 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 include, without limitati
Slide 5: Aggressively managing for impact of COVID-19
Aggressively managing for impact of COVID-19 Reprioritized objectives early: 1. Health and Safety 2. Liquidity 3. Capital 4. Profitability 5. Growth Liquidity: $4.2 billion of on-balance sheet and contingent liquidity; Loans HFI / Deposits of 85% Prepared for Capital: Strong current capital level
Slide 6: Assisting customers in the face of uncertainty
Assisting customers in the face of uncertainty Deferral Programs Paycheck Protection Program Offering relief in the form of deferral programs for all Began accepting applications on April 4th customers who request assistance Over 300 associates involved in application, approval and Began pro
Slide 7: 1Q 2020 highlights
1Q 2020 highlights Key highlights Financial results Proactively addressing the impact of the COVID-19 virus on our 1Q 2020 associates, customers, communities and stakeholders Diluted earnings per share $0.02 Increased on-balance sheet liquidity to 12.0% of tangible assets from Adjusted diluted e
Slide 8: Strong liquidity position
Strong liquidity position Customer deposit base has seen consistent growth over the On Balance Sheet Liquidity past 12 months and remains a stable base of funding and liquidity On-Balance Sheet Liqudity On balance sheet liquidity / tangible assets $773.5 Utilizing Federal Reserve PPP Lending Fac
Slide 9: Core deposit franchise provides stable liquidity
Core deposit franchise provides stable liquidity Total deposits ($mm) Cost of deposits Customer deposits Brokered and internet time deposits Noninterest bearing (%) Cost of total deposits (%) 30.0% 24.7% 24.5% 24.8% $5,377 25.0% 23.0% 22.4% $4,843 $4,922 $4,935 $20 20.0% 1.14% 1.14% $30 $25 $20 1.11
Slide 10: Well-capitalized headed into recession
Well-capitalized headed into recession Capital position Tangible book value per share2 1Q19 4Q19 1Q201 $18.55 $18.35 Shareholder’s 13.0% 12.4% 11.8% equity/Assets $11.56 $11.58 TCE/TA² 10.5% 9.7% 9.1% 3Q16 4Q16 4Q19 1Q20 Common equity 12.0% 11.1% 11.0% tier 1/Risk-weighted Simple capital structure a
Slide 11: Consistent loan growth and balanced portfolio
Consistent loan growth and balanced portfolio Portfolio mix C&I1 Exposure by Industry Other Balance 6% C&I CRE-OO Total % of Total 1-4 family 16% Real Estate Rental and Leasing $ 286.8 $ 103.8 $ 390.6 22.9% Retail Trade 70.5 101.9 172.4 10.1% 1-4 family HELOC Wholesale Trade 115.2 45.1 160.3 9.4% 5%
Slide 12: Industries of concern
Industries of concern Concentrations representative of community bankers Industry exposures / gross loans (HFI) serving customers across our communities 8.6% Focused on in-market relationship banking Diversified portfolio across the footprint with solid asset quality entering 2020 5.6% 3 SNC
Slide 13: Retail portfolio – 8.6% of gross loans HFI
Retail portfolio – 8.6% of gross loans HFI 53% C&I/CRE-OO and 47% CRE Non-OO and Other Portfolio overview CRE Non-owner occupied and Other has no major Car, RV, Boat and concentrations by tenant ATV Dealers 22% – Portfolio benefits from conservative underwriting parameters which typically requir
Slide 14: Healthcare & social assistance portfolio – 5.6% of loans HFI
Healthcare & social assistance portfolio – 5.6% of loans HFI Portfolio diversified over several segments across the Portfolio overview footprint Other Healthcare Assisted Living / Assisted Living / Nursing Care / Continuing Care property and Social Nursing Care / Assistance Continuing Care types
Slide 15: Hotel portfolio – 4.2% of gross loans HFI
Hotel portfolio – 4.2% of gross loans HFI Portfolio built around long-term successful hotel operators and Outstanding by location strong flags Out of Market Properties concentrated in limited service facilities with reduced 8% reliance on food and beverage revenues Other Community 7% Project e
Slide 16: Transportation and warehousing – 2.5% of gross loans HFI
Transportation and warehousing – 2.5% of gross loans HFI Trucking related exposure includes truckload operators, Portfolio overview equipment lessors to owner/operators, and local Other franchisees of major national trucking companies. Largest Transportation and Warehousing relationship ~$26 milli
Slide 17: Other Leisure – 2.3% of gross loans HFI
Other Leisure – 2.3% of gross loans HFI Diversified portfolio across the footprint encompassing a Portfolio overview myriad of customers and types Other <5% 15% Marinas Largest exposures include: 20% – ~$15M to an entertainment venue with strong collateral Theaters 9% – Multiple marinas across t
Slide 18: Restaurant – 1.4% of gross loans HFI
Restaurant – 1.4% of gross loans HFI No major concentration by operator or brand Portfolio overview Largest single customer ~$4M, secured by real estate. Other Strong local independent operator Bars 5% 7% Portfolio distributed across the footprint Expectations include varying levels of impac
Slide 19: Allowance for credit losses overview
Allowance for credit losses overview Current Expected Credit Loss (CECL) Allowance for Credit Losses (ACL) model utilizes Moody’s baseline economic forecast issued on April 4, 2020 and a 3 year forecast period, summary below1: FQE, FYE 12/31, 2Q 2020 3Q 2020 4Q 2020 2020 2021 2022 GDP (bcw$) $ 18,
Slide 20: Asset quality remains solid
Asset quality remains solid Nonperforming ratios Classified loans ($mm) 1 2 NPLs (HFI)/loans (HFI) NPAs/assets 0.77% 0.74% $79 $80 $74 0.68% $69 0.62% 0.60% $61 0.57% 0.59% 0.47% 0.41% 0.43% 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 LLR/loans Net charge-offs/average loans 1.95% 0.30% 0.19% 0
Slide 21: Core earnings power remains intact
Core earnings power remains intact Adjusted pre-tax, pre-provision return on average assets¹ 2.40% 2.34% 2.25% 2.15% 2.10% 1.81% 2015 2016 2017 2018 2019 1Q 2020 Drivers of profitability Loans/deposits Net interest margin Noninterest income ($mm) Core efficiency ratio1 Loans excluding HFS Loans HFS
Slide 22: Managing net interest margin through falling rates
Managing net interest margin through falling rates Historical yield and costs Average interest earning assets Yield on loans Cost of deposits NIM 7.0% $7,000 6.0% $6,000 Avg. interest earning Yields and Costs (%) 5.0% $5,000 assets ($mm) 4.0% $4,000 3.0% $3,000 2.0% $2,000 1.0% $1,000 -- $0 1Q19 2Q1
Slide 23: Mortgage operations overview
Mortgage operations overview Highlights Quarterly mortgage production Record total Mortgage pre-tax contribution of $8.0mm for 1Q Consumer Direct 1Q19 4Q19 1Q20 2020 Retail Wholesale Mortgage sale margins continue to be elevated due to industry capacity constraints and low interest rates Mortg
Slide 24: Managing operating leverage
Managing operating leverage Highlights Core efficiency ratio (tax-equivalent basis)¹ Consolidated 1Q 2020 core efficiency ratio¹ Banking segment of 65.7% Consolidated Mortgage segment 93.3% 92.4% 85.0% 79.5% Integration of FNB Financial Corp acquisition underway and in line with expectations; an
Slide 25: Appendix
FB} pee Bank Appendix
Slide 26: GAAP reconciliation: Adjusted net income and diluted EPS
GAAP reconciliation and use of non-GAAP financial measures Adjusted net income and diluted earnings per share 25
Slide 27: GAAP reconciliation: Pre-tax, pre-provision earnings
GAAP reconciliation and use of non-GAAP financial measures Pre-tax, pre-provision earnings and diluted earnings per share 26
Slide 28: GAAP reconciliation: Adjusted pro forma net income
GAAP reconciliation and use of non-GAAP financial measures Adjusted pro forma net income and diluted earnings per share* 27
Slide 29: GAAP reconciliation: Adjusted pre-tax, pre-provision earnings
GAAP reconciliation and use of non-GAAP financial measures Adjusted pre-tax, pre-provision earnings and diluted earnings per share 28
Slide 30: GAAP reconciliation: Core efficiency ratio
GAAP reconciliation and use of non-GAAP financial measures Core efficiency ratio (tax-equivalent basis) 29
Slide 31: GAAP reconciliation: Core efficiency ratio
GAAP reconciliation and use of non-GAAP financial measures Core efficiency ratio (tax-equivalent basis) 30
Slide 32: GAAP reconciliation: Segment core efficiency ratios
GAAP reconciliation and use of non-GAAP financial measures Segment core efficiency ratios (tax-equivalent basis) 31
Slide 33: GAAP reconciliation: Adjusted mortgage contribution
GAAP reconciliation and use of non-GAAP financial measures Adjusted mortgage contribution 32
Slide 34: GAAP reconciliation: Tangible assets and equity
GAAP reconciliation and use of non-GAAP financial measures Tangible assets and equity 33
Slide 35: GAAP reconciliation: Return on average tangible common equity
GAAP reconciliation and use of non-GAAP financial measures Return on average tangible common equity 34
Slide 36: GAAP reconciliation: Adjusted return on average tangible common equity
GAAP reconciliation and use of non-GAAP financial measures Adjusted return on average tangible common equity Adjusted return on average assets and equity 35
Slide 37: GAAP reconciliation: Adjusted pre-tax, pre-provision return on equity
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 36
Slide 38: GAAP reconciliation: Adjusted pro forma return on average assets
GAAP reconciliation and use of non-GAAP financial measures Adjusted pro forma return on average assets and equity Adjusted pre-tax, pre-provision return on average assets and equity 37