Four Oaks Fincorp — Investor Presentation (March 2017)
27 slides from Four Oaks Fincorp's investor presentation, Mar 15, 2017
Slide 1: Four Oaks Bank Investor Presentation March 2017
FOUR OAKS BANK 1 Investor Presentation March 2017 Proprietary and Confidential
Slide 2: Disclosure
Disclosure vouNnxs BANK > This presentation contains forward-looking statements that reflect our current views with respect to future events and conditions, as well as our future growth, results of operations, performance, and business prospects and opportunities. All statements in this presentation
Slide 3: Four Oaks Fincorp Overview
Four Oaks Fincorp Overview 3 Founded in 1912 and headquartered in Four Oaks, NCBank holding company with Four Oaks Bank and Trust as the principal subsidiary14 locations, predominately in the Raleigh MSA$735 million balance sheetTotal loans: $515 millionTotal deposits: $558 millionDTA: $18 million -
Slide 4: Foundational Work
Foundational Work 4 Restructured the balance sheetImproved asset quality; adjusted credit cultureRestructured the organization and leadership teamGrew loans and depositsUpgraded the technology infrastructureImproved governance, risk management and our regulatory postureExited Third Party Payment Pro
Slide 5: Three Years of Focus
Three Years of Focus ‘Complete Capital Raise Execute ARP /Resolve Legacy Credit Issues Develop Strategic Plan Restructure Balance Sheet Transition Management. Improve Operating Risk Profile Improve Regulatory Relations Exit Third Party Payment Processing Implement New Governance Framework ‘Adjust an
Slide 6: Recent Financials
Recent Financials Cash & Due From Banks Investments Loans, Net of Uneamed Income ALL Foreclosed Assets Investment in Life Insurance Deferred Tax Asset Fixed and Other Assets Total Assets Non-Interest Bearing Demand Money Market, NOW, and Savings Time Deposits Borrowings Sub-debt & Promissory Notes O
Slide 7: Now versus Then
Now versus Then 7 Runoff of third party deposits (TPPP) and related inefficient liquidityGrowth in loans ($52 million), while cleaning out loan portfolio ($37 million of balance disposed)DTA recaptureOrganic DDA growth of $40 million while $117 million of TPPP exitedPlanned runoff/exit of higher cos
Slide 8: Share Performance
Share Performance 8 Year end 2016 versus year end 2013 Share performance: Up 51% since election day Up 123% since 1/1/2015
Slide 9: Why FOFN?
Why FOFN? 9 Two and a half years after the capital raise, we have an opportunity for significant additional value creation.
Slide 10: FOUR]|[ OAKS
FOUR]|[ OAKS Intentionally blank 10
Slide 11: The Raleigh Market
The Raleigh Market 11 MSA population of 1.3 millionGrowth through 2022 is projected to be 8+% per year72% of net population growth in NC through 2025 will be in Raleigh and Charlotte MSAs (UNC Center of Demography)Wake County population is projected to double by 2035 (Census projection)Raleigh was n
Slide 12: Our Markets
Our Markets 12 We operate 12 full service branches and 2 loan production offices in 4 countiesWe are fortunate - our two primary market counties are among the fastest growing pair in the state and region. We want to grow – in the right markets, in the right way.
Slide 13: Wake and Johnston Counties
Wake and Johnston Counties 13 11 of our full service branches are shown – 10 of the branches are in Wake and Johnston Counties (Raleigh MSA)2 LPO’s – Apex and North RaleighBranch in Dunn (Harnett County) and a branch in Wallace (Duplin County) – outside Raleigh MSARecently closed Southern Pines LPO
Slide 14: Return to Profitability
14 Source: SNL Financial and Company public filings Return to Profitability Dollar Value in Millions Includes $16.6 million in DTA recapture and limited tax expense Includes $3.6 million DTA recapture
Slide 15: After Tax Income – Proforma
15 After Tax Income – Proforma Source: SNL Financial and Company public filings, Company calculation Dollar Value in Thousands Primarily balance sheet restructuring and solid loan growth Note: Proforma income calculated using NIAT adjusted for DTA impact and 1X cost event in 4Q 2016
Slide 16: Equity & Leverage Ratio - FOFN
Equity & Leverage Ratio - FOFN Dollar Value in Millions Source: SNL Financial and Company public filings Note: FOB (Bank) Tier 1 = 11.0% at 12/31/16 Rights Offering DTA Recapture 16
Slide 17: Total Assets & Margin
17 Total Assets & Margin Dollar Value in Millions Source: SNL Financial and Company public filings Paydown of expensive LT debt and runoff of above market CDs has allowed for an increase in NIM
Slide 18: Loan Portfolio Snapshot
Loan Portfolio Snapshot 18 94% of lending is secured by real estate collateralCRE represents 67% of the portfolio (including OO & resi construction)Four Oaks manages concentrations toward the top of policy guidelines
Slide 19: NPAs and Texas Ratio
19 NPAs and Texas Ratio Dollar Value in Millions Source: SNL Financial and Company public filings
Slide 20: FOUR]|[ OAKS
FOUR]|[ OAKS Intentionally blank 20
Slide 21: Deposits and Cost
Deposits and Cost 21 Dollar Value in Millions Notes: TPPP deposits of $117 million – exited during 20152011-2013: exit of high priced CDs, incl. brokered Year end 2016 deposit composition Source: SNL Financial and Company public filings
Slide 22: Organizational Update
Organizational Update 22 Market leaders and their teams have continued to perform very wellAverage tenure of market leaders: 14 years with FOBDavid Rupp became President in March, 2015; CEO in July, 2015Ayden Lee and David Rupp completed their transition in December 2015, with Ayden filling the Chai
Slide 23: Risk Management Update
Risk Management Update 23 Asset Resolution Plan completed in 2015Credit processes and credit culture continue to improveThird Party Payment Processing exited in 4Q 2015Reset the regulatory relationship; dramatically improvedExited the 2011 Written Agreement; entered into a much reduced 2015 Written
Slide 24: 2017 – The Work Ahead
2017 – The Work Ahead 24 Improve Customer DeliveryAcross both branch and electronic channelsDeploy near term product set in retail, electronic banking and cardsIncrease ProductivityBoth revenue and expense across existing franchiseAdopt practical changes to the current business model Develop a High
Slide 25: Strategic Initiatives
Strategic Initiatives 25 Existing product conversions and upgradesEnd to end lending re-engineeringContinued progress on Fiserv integrationTechnology transformationHR transformationAdjustments to our branch delivery modelKey market decisionsDeposit products and pricingBalance sheet managementCapital
Slide 26: Link - Opportunity and Work
Link - Opportunity and Work 26
Slide 27: 2017 Timeline
2017 Timeline 1* Quarter Product Conversions and Upgrades Debit and Credit Card + Retail On Line Banking + Retail Deposit Products End-to-End Lending Re-engineering Fiserv integration HRTransformation + Recruiting, Hiring and On-Boarding “Training and Employee Development Compensation and Benefits B
Four Oaks Fincorp — Investor Presentation (March 2017) on 6ix