W.T.B. Financial Corp. · OTC:WTBFA
W.T.B. Financial — Shareholder Meeting (2016)
27 slides from W.T.B. Financial's shareholder meeting presentation, 2016
Slide 1: 2016 Annual Shareholders' Meeting
2016 ANNUAL SHAREHOLDERS’ MEETING FORWARD LOOKING STATEMENTS “This presentation contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “see
Slide 2: Geography and Mission
GEOGRAPHY AND MISSION W.T.B. Financial Corporation Our Mission “We will be the best at understanding and meeting the financial needs of our customers. We will focus our unique strengths as a community bank on serving those customers who perceive a distinct value in building long-term relationships w
Slide 3: Company Overview
COMPANY OVERVIEW W.T.B. FINANCIAL CORPORATION W.T.B. Financial Corporation is the parent company Washington Trust Bank is the primary subsidiary Demographics Shares listed on the OTC Pink Marketplace: www.otc markets.com WTBFA -- Class A shares WTBFB -- Class B shares Over 100 years of banking histo
Slide 4: Relationship Banking
RELATIONSHIP BANKING • Relationship banking requires… • A high degree of customer focus • High caliber professional bankers • Empowered employees • Decentralized decision-making • First-rate financial solutions • Customized to meet client needs • Standardized to be efficient and scalable • Customers
Slide 5: 2015 Performance Overview
2015 PERFORMANCE OVERVIEW 2015 FINANCIAL POSITION AND PERFORMANCE Deposit growth of $458 million, or 11.2% drove strong asset growth Assets finished the year at $5.3 billion, a new Company record Balance Sheet Loans grew $206 million and bonds/investible cash grew $349 million Total shareholders' eq
Slide 6: Major Industry Themes
MAJOR INDUSTRY THEMES • Credit recovery from financial crisis is complete • Industry NPA’s to assets < 1.00% (peak ~ 3.45% in 2010) • Number of problem institutions = 183 (peak = 884 in 2010) • Industry ALLL to loans = 1.34% • Low rate environment weighs on profitability • Industry NIM 3.07% in 2015
Slide 7: 2015 Industry Performance
2015 INDUSTRY PERFORMANCE Industry Earnings: • Industry earnings = $164 billion, up $11 billion, or 7.5% • Higher revenues and lower operating expenses • Offset by higher provision expense Industry Balance Sheet: • Deposits = $12.2 trillion, up $426 billion, or 3.6% • Assets = $16.0 trillion, up $41
Slide 8: Industry Consolidation Continues…
INDUSTRY CONSOLIDATION CONTINUES… 17,886 Number of FDIC Insitutions The number of FDIC insured institutions has declined by over 11,700, or 65% to 6,182 since 1984… 6,182 $15,967,923 1984 1985 1986 1991 1992 1993 1994 1995 1996 1997 2003 2004 2005 2006 2007 2008 2009 2014 2015 1987 1988 1989 1990 19
Slide 9: Impacting the Smallest Banks
IMPACTING THE SMALLEST BANKS Number of Institutions by Asset Size 18,000 16,000 • All of the consolidation in the industry has 14,000 come from the smallest banks • Banks with assets < $100 million declined 12,000 by over 12,000, or 88% since 1984 10,000 8,000 6,000 4,000 2,000 0 1985 1986 1987 1991
Slide 10: Problem Bank Levels Normalized
PROBLEM BANK LEVELS NORMALIZED Source: FDIC website as of 03/05/2016 10
Slide 11: Industry Asset Quality Normalized
INDUSTRY ASSET QUALITY NORMALIZED Industry Noncurrent Assets and OREO to Assets 4.00% 3.48% 3.45% 3.50% Problem assets peak for the industry in 2010 3.00% 2.50% 2.00% 1.50% Average NPA’s to Assets = 0.73% (1995 to 2007) 1.00% 0.96% 0.50% 0.00% 1985 1987 1989 1991 1993 1995 1996 1998 2000 2002 2004 2
Slide 12: But Profitability Hasn't…Yet
BUT PROFITABILITY HASN’T…YET 128 bps ROA +/- 103 bps ROA +/- Financial Crisis Source: FDIC Quarterly Bank Performance Data as of Fourth Quarter 2015 12
Slide 13: 2015 State Performance Comparison
2015 STATE PERFORMANCE COMPARISON WASHINGTON INDUSTRY 2015 STATE-WIDE COMPARISON KEY PERFORMANCE MEASURE TRUST BANK FDIC DATA WASHINGTON OREGON IDAHO # of Institutions 1 6,182 52 25 12 Total Assets ($ in millions) $ 5,301 $ 15,967,000 $ 66,950 $ 32,838 $ 5,210 Assets per Institution ($ in millions)
Slide 14: Focus on WTBFC: Company 2015 Performance in Perspective
FOCUS ON WTBFC COMPANY 2015 PERFORMANCE IN PERSPECTIVE 14
Slide 15: Assets and Capital (000's)
ASSETS AND CAPITAL (000’s) Total Assets • Assets increased $1.1 billion, or 27% over past five years • Common shareholders’ equity $5,305,272 increased $123 million, or 36% over $4,771,922 $4,470,132 $4,436,124 $4,177,970 past five years • Common equity to assets grew 58 bps to 8.75% since 2011 • Al
Slide 16: Investable Cash and Securities Trends
INVESTABLE CASH AND SECURITIES TRENDS INVESTABLE CASH AND SECURITIES (in Millions) $1,601 $1,359 $1,388 $1,252 $1,086 $ $349 % 27.9% Million $ Growth over the % Growth over the Past Year Past Year 2011 2012 2013 2014 2015 Securities Investable Cash Agency CMOs $456 Security Type $ (Millions) % of To
Slide 17: Deposit Trends
DEPOSIT TRENDS TOTAL DEPOSITS (in Millions) $4,541 $4,083 $3,790 $3,793 $3,514 $ $458 % 11.2% Million $ Growth over the % Growth over the Past Year Past Year 2011 2012 2013 2014 2015 Noninterest Bearing Demand $1,825 Deposit Type $ (Millions) % of Total Noninterest Bearing Demand $ 1,825 40% Savings
Slide 18: Loan Trends
LOAN TRENDS TOTAL LOANS (in Millions) $3,557 $3,351 $3,176 $2,897 $2,641 $ $206 % 6.1% Million $ Growth over the % Growth over the Past Year Past Year 2011 2012 2013 2014 2015 Commercial Real Estate $1,136 Loan Type $ (Millions) % of Total Commercial & Industrial $1,108 Commercial Real Estate $ 1,13
Slide 19: Capital Trends
CAPITAL TRENDS SHAREHOLDERS' EQUITY (in Millions) $458 $464 Common Shareholders’ Equity $431 $438 $442 $20 $89 $45 $89 $393 $422 $464 $ $42 % 10.0% $369 $342 Million $ Growth over the % Growth over the Past Year Past Year 2011 2012 2013 2014 2015 Common Shareholders' Equity SBLF Capital WTBFC Regula
Slide 20: Asset Quality Has Normalized (000's)
ASSET QUALITY HAS NORMALIZED (000’s) $100,000 2.00% 1.88% 1.06% The Bank’s problem assets have 0.84% declined significantly to $78,440 0.62% historically low levels 0.36% $47,399 $37,443 $29,536 $19,072 $- 0.00% 2011 2012 2013 2014 2015 Noncurrent Loans and ORE NCL's and ORE to Assets $100,000 3.00%
Slide 21: WMAS and Trust: Key Business Line
WMAS AND TRUST: KEY BUSINESS LINE Wealth Management and Advisory Services, including Trust Powers • $4.4 billion portfolio of assets • Growth in managed assets of $127 million, or 5.1% • Fee income based business • Recurring revenue stream • Diversifies revenue base • Opportunity to broaden relation
Slide 22: Income Statement Trends
INCOME STATEMENT TRENDS Years Ended December 31, Income Statement (000's) 2014 2015 $ Difference % Change Net interest revenue $ 155,835 $ 163,801 $ 7,966 5.1% Provision for loan losses 6,000 2,667 (3,333) -55.6% Total noninterest revenue 44,498 48,857 4,359 9.8% Total noninterest expense 130,542 14
Slide 23: Financial Performance Metrics
FINANCIAL PERFORMANCE METRICS For the Year Performance Metric 2014 2015 Difference Return on average assets 0.92% 0.94% 0.02% Return on shareholders’ equity 9.14% 10.12% 0.98% Margin on average earning assets 3.57% 3.42% -0.15% Noninterest expense to average assets 2.87% 2.83% -0.04% Noninterest rev
Slide 24: Key Shareholder Value Metrics
KEY SHAREHOLDER VALUE METRICS Years Ended December 31, Income (000's) and Per Share Data 2014 2015 $ Difference % Change Net Income $ 41,864 $ 46,360 $ 4,496 10.7% Preferred Stock Dividends 418 142 (276) -66.0% Net Income Available to Common Shareholders $ 41,446 $ 46,218 $ 4,772 11.5% Diluted Earni
Slide 25: Outlook ~ 2016 and Beyond
OUTLOOK ~ 2016 AND BEYOND • Uneven economic recovery continues • CB policies (Fed/Global) major force on capital markets • Macro risks and market volatility remain a concern • Our markets are providing opportunities • Regulatory expectations elevated and expensive • Uncertainty around rates elevates
Slide 26: Key Priorities
KEY PRIORITIES • Strength • Maintain balance sheet strength and conservative risk profile • Position for Fed policy shifts/macro events • Adapt and evolve • Shifting “FinTech” landscape • Enhance the customer experience • Excel on electronic delivery • Discipline • Stay true to relationship banking
Slide 27: Your Time Is Valuable to Us
YOUR TIME IS VALUABLE TO US WE APPRECIATE YOUR SUPPORT AND ALWAYS WELCOME CUSTOMER REFERRALS