Avenue Financial — Q3 2015 Earnings Presentation
22 slides from Avenue Financial's earnings presentation, Oct 23, 2015
Slide 1: Third Quarter 2015 Earnings Call
a! avenue financial holdings Third Quarter 2015 Earnings Call - AVNU
Slide 2: Forward-looking statements
Certain statements in this press release contain forward-looking statements within the mearing ofthe federal securities laws. These forward-looking statements reflect our current views with respect to, among other things, future everts and our financial performa always, made through the use of words
Slide 3: Financial Highlights: 3rd Quarter 2015
ays: Financial Highlights ‘Ril, 3° Quarter 2015 $1.79 million net income and $0.18 per diluted share: — Fueled by growth in loan volume, higher mortgage banking income and a decline in the provision for loan loss expense compared to Q2 2015. Loan Growth: — Loans, including those held for sale, total
Slide 4: Balance sheet growth and profitability
Balance sheet growth Loan Growth: 26% YOY to $830 million Deposit Growth: 10% YOY to $901 million Asset Growth: 14% YOY to $1.1 billion 1 uater to Oate Figures unless noted thence Top-line revenue growth! Fee Income / Average Assets: 0.63% Efficiency Ratio: 68.4% Adjusted Op. Revenue Growth 13.8% YO
Slide 5: Balanced Loan Portfolio while maintaining 18% CAGR over 5-year period
Balanced Loan Portfolio while maintaining 18% CAGR over 5-year period Q3 2010 Loan Portfolio* Q3 2015 Loan Portfolio' Multifamily, Consumer & Multifamily, Consumer & 4% Other, 1% 1% Other, 1% SH. Residential Residential, CA 29% 2 i= Os C&l, 35% Const.and_— Land Dev., : Const.and_ io” Land Dev. fm CR
Slide 6: Q3 Loan Growth by Sector
Q3 Loan Growth by Sector $625 $800 = 750 $54 | Est) $700 ozs a ee $800 = $775 $774 $774 $650 $750 Q215 Cal CRE CRLD.—RHL_ Consumer Q315 Ending other Ending Balance Balance $600 215 Payoffs_ Paydowns Fundings Fundings —Q3.15 Ending, from fromNew Ending Balance Existing Customers Balance Customers
Slide 7: Mix has shifted towards Noninterest Bearing Deposits
Mix has shifted towards Noninterest Bearing Deposits Q3 2010 Deposit Portfolio Noninterest bearing demand, 10% Time Deposits, 48%, Interest. bearing Sangsand demand, 3% money market accounts, 39% $418 million 1 Average Balances Q3 2015 Deposit Portfoliot Time Deposits, 19% _ __ Noninterest- bearing
Slide 8: Demand Deposit Growth remains strong
Demand Deposit! Growth remains strong Demand Deposit Trends 3 25% $200 20% $150 15% 100 7 10% $o 0% Q310 Q311 Q312,Q313,Q314 «= Q3:15 mmm Demand Deposit Trends -% of Deposits 1 Average Balances
Slide 9: Net Interest Margin Trends
Net Interest Margin* Trends 3.50% 96% 94% — guag 92% 3.40% = 7% 88% 3.30% 85% 82% 53% baad 20% 3 80% 3.10% 76% Q114 214 Q314 QH14 QI15 Q215 Q315 ‘Avg. Loan to Deposit Ratio —Holding Company NIM ——Bank NIM Holdng Company nctdes subordinated debt Strategies: Grow non-interest bearing deposits (25% of
Slide 10: Meaningful resolution of ORE and Non Accrual Loans
Meaningful resolution of ORE and Non Accrual Loans Non Performing Assets reached lowest levels since 2008 3 Quarter net charge-offs increased due to one credit. Year to Date net charge-offs to average loans of 0.09% Recent 3 Quarter External Loan Review resulted in no downgrades or material findings
Slide 11: Efficiency Ratio
3Q14 ncy Ratio* 67.3% * Excluding Security and SBA Gains, ORE Expense / (Losses), Fraud Recoveries 4Q14 71.8% 1Q15 74.5% 2Q15 71.0% 3Q15 68.6%
Slide 12: Growth in most fee income categories
Growth in most fee income categories Noninterest Income ($000) Trends Mortgage Origination Trends 54,000 i $45,000 $36,000 $2700 in | | | $18,000 a i $9,000 CustomerSewice Mortgage Portfolio. SecurltyGains/ BOLI Fees, MortgageSales (Losses) AT mQ115 mQ215 #Q315, hil “ou Creel 30 QUARTER MORTGAGE ORI
Slide 13: Cross-departmental verticals / focus areas
3 cross-departmental verticals / focus areas: Combines private banking and commercial banking efforts Sample clients: Artists Labels Publishing companies Performance Rights Organizations Specialized products: Intellectual property lending Inroads in N.Y.C. and L.A. Healthcare + Complemented by team
Slide 14: Loans and Deposits
Loans Deposits Consumer &—_ ALD, 3% Other 2% aaa Y \ Y , Cal ai% | Interest. 0 Leg J wesidentia, bearing eboelie ae 12% demand 4% > Noninterest ¥ bearing demand, 33% Loans: $119 Million Deposits: $176 million 28% Growth (YOY) 17% Growth (YOY) 68% Loan to Deposit Ratio
Slide 15: Loans and Deposits
Loans C&LD, 1% Consumer, 1% CRE, 34% CAI, 56% _ S Presidential, 8% Loans: $161 Million 68% Growth (YOY) are Deposits Savings and money market accounts, 77% Time Deposits, 7% Noninterest Interest bearing bearing z demand, 15% demand, 1% Deposits: $138 million 46% Growth (YOY) 116% Loan to Deposit Rat
Slide 16: Lease Loans and Deposits
LEASE Loans Consumer . Other, 4% \ C8, Ab CRE, 51% Residential, = 1% Loans: $21 Million 7% Growth (YOY) Deposits Time Deposits, 31% Savings and bearing y demand, 34% _ Noninterest ‘ bearing . demand, 6% Deposits: $61 million 31% Growth (YOY) 34% Loan to Deposit Ratio
Slide 17: Strong Company
Strong Company Continued Organic Growth Collaborative Credit Culture Experienced Management Team Ability to Gain Operating Leverage Vision and Culture Proven Capability of Hiring Talented Bankers Unique Branch Model Depth of Banking Talent Attractive and Growing Market
Slide 18: Appendix
Appendix
Slide 19: Selected Income Statement Data
At or for the Three Months September 30, __June 30, March31,__December 31, 30, __June 30, 2015, 2018 2015 2014 2014 2014 ‘(Dollars in thousands, except employee data) SELECTED INCOME STATEMENT DATA Interest income S 9869 § 9383 $ 88 $ 8498s Interest expense 1,365 1,296 1209 938 ‘Net interest income
Slide 20: Selected Balance Sheet Data
SELECTED BALANCE SHEET DATA, ‘Total aseots Residential real estate - Mortgage Residential real estate - Multi-family ‘Commercial and industrial ‘Commercial real estate ‘Construction and land development Consumer (Other, including deferred fees ‘Total loans, net of deferred fees Allowance for loan lo
Slide 21: Selected Performance Ratios and Asset Quality Data
tor forthe Three Months September 30, __June30,__Mareh 31,__December31,_ september 30, __June 30, 2015 2015 2015 2014 2014 2018 ‘Doifarsin thousands, See per are Guay SELECTED PERFORMANCE RATIOS Ret on average asets 2) (5) 065 % 0.60 % 057% ost % 099% ost % Return on average common stocktolders equi
Slide 22: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Efficiency Ratio Nominterest expense (numerator) Net interestincome Nominterest income Less: gains (Losses) on sales of securities Aausted operating revemve (denominator) Efficiency Ratio ‘Tangible Common Stockholders’ Equity and Tangible ‘Common Stockholders’ Equity/Tang
Avenue Financial Holdings — Q3 2015 Earnings Presentation on 6ix