2019 Journal of Community Bank Case Studies

2019 COMMUNITY BANK CASE STUDY COMPETITION

Exhibit 5: Loan Portfolio Composition

4Q 2012

4Q 2018

5%

6%

19%

15%

1-4 Family 1-4 Family HELOC Multifamily C&D

1-4 Family 1-4 Family HELOC Multifamily C&D

5%

2%

38%

38%

13%

CRE C&I Other

CRE C&I Other

15%

3%

8%

19%

14%

*C&I includes owner occupied CRE loans.

(“Corporate Profile”)

banking model and well-tailored risk management approach that FirstBank strives to uphold. FirstBank’s model is centered on knowing the customer. By knowing the customer, FirstBank can rely on more than numbers and calculations to determine a customer’s credit worthiness. As shown in

Exhibit 6: Net Charge-offs (Recoveries) / Average Loans

FirstBank Banks in Peer Group

($1 Billion-$3 Billion in Assets in 2014-2015/$3 Billion-$10 Billion 2016-2018

0.20%

0.15%

0.14%

0.12%

0.10%

0.10%

0.09%

0.10%

0.07%

0.04%

0.00%

0.00%

Exhibit 6, FirstBank’s strategy, with assistance from a healthy economy, has improved the quality of loans by decreasing net charge-offs over recent years. In fact, FirstBank experienced net recoveries rather than charge-offs in 2017 and 0.00% net charge-offs to average loans for year-end 2018. As previously emphasized, FirstBank has grown both organically and through acquisitions. FirstBank’s largest acquisition was Clayton Bank and Trust and its sister bank American City Bank in 2017 which increased assets by $1.2 billion. Another important acquisition is the pending purchase of 14 branches of Atlantic Capital Bank announced in late 2018, which will

Percentage -0.10%

-0.13%

-0.20%

2014

2015

2016

2017

2018

Year

change in loan portfolio structure has made FirstBank more profitable than many of its peers. The profitability measures mentioned previously demonstrate this return. FirstBank’s concentration in C&I loans is expected to continue because of the growth within larger cities in FirstBank’s footprint, such as Nashville, Chattanooga, Knoxville, and Memphis. C. Asset Quality and Growth Asset quality has improved over the past five years because of the successful community

56