First NBC Bank Holding Company
First NBC Bank — FY2015 Earnings Presentation
18 slides from First NBC Bank's earnings presentation, Sep 8, 2016
Slide 1: 2015 Financial Statement Conference Call
2015 Financial Statement Conference Call September 8, 2016 NASDAQ: FNBC
Slide 2: Forward Looking Statements
Forward Looking Statements Statements contained in this presentation that are not historical facts, including statements accompanied by words such as “will,” “believe,” “anticipate,” “expect,” “estimate,” “preliminary,” or similar words, constitute “forward- looking statements” within the meaning of
Slide 3: First NBC at a Glance
First NBC at a Glance • Chartered in 2006 • Successor in culture to First National Bank of Commerce • Commercial bank on the asset side • Commercial real estate loans (30% of assets and 42% are owner occupied) • Commercial and industrial loans (26% of assets) • Consistent growth history (see pages 1
Slide 4: First NBC at a Glance: Strategic Approach
First NBC at a Glance • First NBC strategic approach • Community bank • Relationship banking • Personal service • Pursue share of wallet • Tiered pricing on all deposits • Segment focus • Small to medium business • Private banking • Specialty focus • Institutional segment • Labor union • Outstanding
Slide 5: New Orleans Market Opportunity
New Orleans Market Opportunity • Strong economy • Katrina recovery: 2007-2012 • Core economic expansion: 2013-current • Economic drivers • Hospitality • Convention tourism • Festival initiative • Petrochemical industry • Low natural gas prices • $40 billion expansion • Port of New Orleans • Top 3 U.
Slide 6: New Orleans Market Opportunity: Competition
New Orleans Market Opportunity • Competition • Capital One • Whitney/Hancock • JP Morgan Chase Bank • Regions Bank • Iberiabank 6
Slide 7: Events in 2015: Collapse of Oil Prices
Events in 2015 • Collapse of oil prices • Energy exposure – 4.5% • $90 million exploration and production credit at December 31, 2015 • Year end status • Low prices at year end through February 2016 • Borrower was in the process of drilling a new well in its major field • Proved undeveloped status o
Slide 8: Events in 2015: Tax Credit Accounting Change
Events in 2015 • Tax credit accounting change – Historic tax credits • 2009-2014 • Cost method • Amortization of investment over the expected holding period • 2015 and later • Equity method • Impairment • Impact of change in accounting method • $36 million in 2015 ($24 million, net of tax effect) in
Slide 9: Events in 2015: Default on Short-Term Receivables
Events in 2015 • Default on investment in short-term receivables • Investment through The Receivables Exchange • 7 year history – no prior defaults • $69.9 million investment in ethanol manufacturer • Examination findings – fully reserve due to litigation required • Litigation beginning to recover i
Slide 10: Capital Status
Capital Status • History of strong capital position • Support growth opportunity • Relationship with regulators • Frequent capital raises to support growth • 7 raises totaling $369 million in 10 years • Regulatory capital condition at December 31, 2015 • “Well capitalized” on • Tier 1 leverage capit
Slide 11: Deferred Tax Asset (DTA)
Deferred Tax Asset (DTA) • Change in treatment after Basel III • Deduction of certain deferred tax assets from Tier 1 capital (phase-in through 2018) • For 2016, 60% is eliminated • By 2018, 100% is eliminated • Bank has always monitored impact on capital • Tax credit business • Impairment charges •
Slide 12: Asset Quality
Asset Quality • Historical ratios at December 31, 2015 • 5 year past due ratio – 0.69% • 5 year average NPA’s/assets – 1.17% • 5 year net charge-offs/loans – 0.17% • 2015 issues • Large increase in non-performing assets • Exploration and production credit ($90 million) • Concrete crushing company ($
Slide 13: Internal Control Enhancements
Internal Control Enhancements • Governance changes • Committed to splitting Chairman/CEO roles with independent Chairman • Independent director committee • Appointed additional independent director to Audit Committee • Committed to identifying and appointing an additional director to Board and Audit
Slide 14: Profitability
Profitability Net Income (in millions) Basic EPS $50 Zins, $3.00 $40 $250 + $233. $33.6 ax 7 $200 a $25.2 $150 +S188 $20 $179 $1.00 g € 8 © ee aciicgl GAs kali GS Rassias DSRS 7 2011 Restated 2012 Restated 2013 Restated 2014 Restated \ 2015, (0.50) sta0) $11.00) ste) (20) s{1.50) $(25.2) (80) $12.00
Slide 15: Profitability
Profitability 19% 10% Return on Average Common Equity nome BA aay 12.50% 2OLARestated 2012Restated 2013Restated 2014 Restated 201s Return on Average Assets 126% 105% 0% 2OLLRestated 2012Restated 2013Restated 2014 Restated 015 *
Slide 16: Profitability: Efficiency Ratio
16 Profitability Efficiency ratio in all years is impacted by impairment charges and the short term receivable loss in 2015
Slide 17: Annual Loan Growth
17 Annual Loan Growth • Driven by increases in construction, commercial real estate and commercial loans • Favorable economic market conditions in the New Orleans trade area
Slide 18: Summary
Summary • Community bank with $4.7 billion in assets at December 31, 2015 • Located in a market with strong economic expansion • Healthy growth in loans/deposits expected to continue • Core bank earnings drivers remain in place • Tax credit activity provides opportunity to enhance business and retur
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