Farmers Capital Bank Corporation
Farmers Capital Bank — Investor Presentation (May 2018)
33 slides from Farmers Capital Bank's investor presentation, May 2, 2018
Slide 1: Investor Presentation (Q2 2018)
Investor Presentation (Q2 2018) (WSBC financials as of Q1 2018) John Iannone Vice President, Investor Relations 304-905-7021
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-looking statements in this report relating to WesBanco’s (“WSBC”) plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The informa
Slide 3: Key Differentiators
Key Differentiators Emerging Regional Diversified earnings stream built for long-term success Financial Services Robust legacy deposit base Institution Maintain a community bank at the core Strong market positions in diverse, major markets Diversified and Well-balanced loan and deposit dis
Slide 4: Balanced and Diversified
Balanced and Diversified Well-balanced loan and deposit distribution across diverse regional footprint Strong market positions across legacy and major metropolitan markets Diversified revenue generation engines supported by 100-year old trust business and proprietary mutual fund family Strong
Slide 5: Investment Rationale
Investment Rationale Well-balanced financial services company with a diversified earnings stream and a strong legacy of credit and risk management Disciplined growth, balanced by a fundamental focus on expense management, that delivers positive operating leverage Emphasis on customer service t
Slide 6: Strategies for Long-Term Success
Strategies for Long-Term Success
Slide 7: Long-Term Growth Strategies
Long-Term Growth Strategies Diversified Retail Loan Franchise- Long History Banking Portfolio Enhancing of Strong Service with C&I Expansion Wealth Strategies and Home within Management & Core Equity Contiguous Capabilities Deposit Lending Markets Advantage Focus Focus on Delivering Positive Operati
Slide 8: Diversified Loan Portfolio
Diversified Loan Portfolio Focus on strategic growth, $6.3 Billion Loan Portfolio diversification, and credit quality Comm'l & Expansion of Commercial and Industrial 18% Industrial (C&I), HELOC, and Comm'l R/E: Residential Mortgage portfolios Improved Consumer Property 5% Targeted reductions i
Slide 9: Strong Wealth Management Capabilities
Strong Wealth Management Capabilities Trust & Investments Insurance Trust Assets $4.0B of trust and mutual fund (Market Value as of 12/31) ($B) Personal, commercial, title, assets under management $3.7 $4.0 health, and life $3.1 CAGR 5,000+ relationships $2.3 4% Expand title business in all
Slide 10: Franchise Expansion
Franchise Expansion Targeted acquisitions in existing Contiguous Markets Radius markets and new higher-growth metro areas Critical, long-term focus on shareholder return Strong capital and liquidity, along with strong regulatory compliance processes, provides ability to execute transactions qu
Slide 11: $10 Billion Asset Threshold Strategy
$10 Billion Asset Threshold Strategy Crossed the $10 billion asset threshold during March in anticipation of the closing of the First Sentry Bancshares merger Well-positioned from staffing, infrastructure, process, compliance, DFAST reporting, and CRA perspectives Majority of preparatory costs
Slide 12: Returning Value to Shareholders
Returning Value to Shareholders Focus on appropriate capital allocation to provide flexibility while continuing to enhance shareholder value Q1 2018 dividend payout ratio of 38.2% provides upside potential Q1 2018 dividend yield 2.6%, compared to 1.8% for bank group Quarterly Dividend per Shar
Slide 13: Financial Overview
WesBanco By all accounts, better. Financial Overview
Slide 14: Financial Performance Summary (Non-GAAP)
Financial Performance Summary (Non-GAAP) Three Months Ending ($000s, except earnings per share) 3/31/2017 3/31/2018 Change Net Income (1) $26,205 $33,722 28.7% Diluted Earnings per Share (1) $0.60 $0.76 26.7% (2) 0.07% Net Charge-Offs as % of Average Loans 0.15% (8bp) Net Interest Margin (FTE) 3.42%
Slide 15: Financial and Operational Highlights – Q1 2018
Financial and Operational Highlights – Q1 2018 Net income up 28.7% and EPS up 26.7% to $0.76 (excluding certain costs) Return on average tangible common equity of 17.2% (excluding certain costs) Strong year-over-year growth in pre-tax earnings supported by solid expense management Pre-tax in
Slide 16: Favorable Operating Metrics
Favorable Operating Metrics Disciplined execution upon growth strategies providing favorable performance versus peer group across key operating metrics Return on Average Tangible Equity Return on Average Assets 17.2% 1.37% 1.08% 1.07% 1.09% 1.29% 14.6% 14.0% 15.7% 13.9% 1.06% 1.04% 1.07% 13.5% 13.
Slide 17: Net Interest Margin (NIM)
Net Interest Margin (NIM) NIM continues to reflect the benefit from the increases in the Federal Reserve Board’s target federal funds rate over the past year, partially offset by higher funding costs as well as a flattening of the yield curve Q1 2018 reflects a 6 basis point reduction from lower
Slide 18: Interest Rate Sensitivity
Interest Rate Sensitivity Positioned for asset sensitivity in a rising interest rate environment Change in Net Interest Income Immediate Change in from Base over One Year Interest Rates December 31, 2017 March 31, 2018 +1% Rate Shock +2.4% +2.4% +2% Rate Shock +4.0% +4.5% +3% Rate Shock +6.2% +7.0
Slide 19: Risk Management and Regulatory Compliance
Risk Management and Regulatory Compliance Strong legacy of credit and risk management Based upon conservative underwriting standards Mature enterprise risk management program headed by Chief Risk Officer addressing key risks in all business lines and functional areas Enhancing strong complia
Slide 20: Appendix
WesBanco By all accounts, better. Appendix
Slide 21: Farmers Capital (FFKT) Transaction Highlights
Farmers Capital (FFKT) Transaction Highlights Strategically compelling Kentucky combination Increases WSBC’s presence in major metropolitan markets with attractive demographics Increases combined deposit market share in Cincinnati (#14), Louisville, (#9), Lexington (#9) Continued and Elizabeth
Slide 22: Strong Market Positions in Major Markets
Strong Market Positions in Major Markets WesBanco (Current) WesBanco (Pro Forma) Akron Akron Canton Canton #10 #10 Wheeling Wheeling #15 Columbus #15 Columbus Dayton #12 Dayton #12 Morgantown Morgantown #18 Cincinnati #14 Cincinnati Bloomington Bloomington #2 #2 #10 #9 Charleston Charleston Louisvil
Slide 23: Broad and Balanced Market Distribution
Broad and Balanced Market Distribution WesBanco (Current) WesBanco (Pro Forma) Loans Loans KY 7% KY IN 8% WV 19% WV 28% 29% IN PA 6% 20% PA 16% OH OH 37% 30% Deposits Deposits KY IN 8% KY 7% WV 21% WV 35% 34% PA IN 21% 5% PA 16% OH OH 29% 23% Note: as presented and disclosed in conjunction with the
Slide 24: Stock Performance: Long-Term Cumulative Return
Stock Performance: Long-Term Cumulative Return 700% 600% 500% 400% 300% 200% 100% 0% WSBC S&P500 Note: cumulative return since WSBC IPO compared to the cumulative return for the S&P500 Index over the same time period 23
Slide 25: Experienced and Stable Management Team
Experienced and Stable Management Team Years in Years at Executive Position Banking WSBC James Gardill Chairman of the Board 45* 45 Todd Clossin President & Chief Executive Officer 34 5 Robert Young EVP – Chief Financial Officer 32 17 Lynn Asensio EVP – Retail Administration 40 13 Ivan Burdine EVP –
Slide 26: Financial Performance Summary Trend – Annual
Financial Performance Summary Trend – Annual Net Income (1) ($MM) Efficiency Ratio (1) $107.9 60.99% 59.59% $95.3 57.05% 56.69% 56.44% $88.0 $70.8 $64.8 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Return on Average Assets (1) Return on Average Tangible Equity (1) 1.13% 1.08% 1.09% 1.06% 1.07%
Slide 27: Diligent Focus on Credit Quality – Annual Trend
Diligent Focus on Credit Quality – Annual Trend Loan loss allowance decline due to improvement in credit quality Net Charge-Offs as % of Average Loans Legacy Loan Loss Allowance and Total Loans 0.38% Legacy Loan Loss Allowance ($000s) $46,786 $44,154 $41,709 $41,108 $42,218 0.23% 0.23% 2013 2014 2
Slide 28: Commercial Loan Outstanding Detail – Year-End
Commercial Loan Outstanding Detail – Year-End Commercial Real Estate by Property Type ($MM) 12/31/2017 12/31/2014 Land & Improved Owner Total % of Total Land & Improved Owner Total % of Total Construction Investment Occupied CRE CRE Loans Construction Investment Occupied CRE CRE Loans Multi-Family $
Slide 29: Reconciliation: Efficiency Ratio
Reconciliation: Efficiency Ratio Three Months Ending Twelve Months Ending ($000s) 3/31/2017 3/31/2018 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Non-Interest Expense $54,384 $54,571 $160,998 $161,633 $193,923 $208,680 $220,860 Restructuring & Merger-Related ($491) ($245) ($1,310) ($1,309
Slide 30: Reconciliation: Net Income and EPS (Diluted)
Reconciliation: Net Income and EPS (Diluted) Three Months Ending Twelve Months Ending ($000s, except earnings per share) 3/31/2017 3/31/2018 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Net Income $25,886 $33,529 $63,925 $69,974 $80,762 $86,635 $94,482 Net Deferred Tax Asset Revaluation $0
Slide 31: Reconciliation: Return on Average Assets
Reconciliation: Return on Average Assets Three Months Ending Twelve Months Ending ($000s) 3/31/2017 3/31/2018 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Net Income (1) $104,982 $135,979 $63,925 $69,974 $80,762 $86,635 $94,482 Net Deferred Tax Asset Revaluation (1) $0 $0 $0 $0 $0 $0 $12,7
Slide 32: Reconciliation: Return on Average Tangible Equity
Reconciliation: Return on Average Tangible Equity Three Months Ending Twelve Months Ending ($000s) 3/31/2017 3/31/2018 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Net Income (1) $104,982 $135,979 $63,925 $69,974 $80,762 $86,635 $94,482 Amortization of Intangibles (1) $3,356 $3,479 $1,487
Slide 33: Reconciliation: Legacy Loan Loss Allowance and Total Loans
Reconciliation: Legacy Loan Loss Allowance and Total Loans Twelve Months Ending ($000s) 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Loan Loss Allowance $47,368 $44,654 $41,710 $43,674 $45,284 Allowance on Acquired Loans ($582) ($500) ($1) ($2,566) ($3,066) Legacy Loan Loss Allowance $46,7
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