FB Financial Corporation Reports Third Quarter 2024 Financial Results
Reports Q3 Diluted EPS of
The Company ended the third quarter with loans held for investment (“HFI”) of
President and Chief Executive Officer,
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Annualized |
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(dollars in thousands, except share data) |
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Balance Sheet Highlights |
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Investment securities, at fair value |
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$ |
1,567,922 |
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$ |
1,482,379 |
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$ |
1,351,153 |
|
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23.0 |
% |
|
16.0 |
% |
|
Loans held for sale |
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|
103,145 |
|
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106,875 |
|
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103,858 |
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(13.9 |
)% |
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(0.69 |
)% |
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Loans HFI |
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9,478,129 |
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9,309,553 |
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9,287,225 |
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7.20 |
% |
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2.06 |
% |
|
Allowance for credit losses on loans HFI |
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(156,260 |
) |
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(155,055 |
) |
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(146,134 |
) |
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3.09 |
% |
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6.93 |
% |
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Total assets |
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12,920,222 |
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12,535,169 |
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12,489,631 |
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12.2 |
% |
|
3.45 |
% |
|
Interest-bearing deposits (non-brokered) |
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8,230,867 |
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8,130,704 |
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8,105,713 |
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4.90 |
% |
|
1.54 |
% |
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Brokered deposits |
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519,200 |
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|
150,113 |
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|
174,920 |
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978.1 |
% |
|
196.8 |
% |
|
Noninterest-bearing deposits |
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|
2,226,144 |
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2,187,185 |
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2,358,435 |
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7.09 |
% |
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(5.61 |
)% |
|
Total deposits |
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|
10,976,211 |
|
|
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10,468,002 |
|
|
|
10,639,068 |
|
|
19.3 |
% |
|
3.17 |
% |
|
Borrowings |
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|
182,107 |
|
|
|
360,944 |
|
|
|
226,689 |
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(197.1 |
)% |
|
(19.7 |
)% |
|
Allowance for credit losses on unfunded commitments |
|
|
(6,042 |
) |
|
|
(5,984 |
) |
|
|
(11,600 |
) |
|
3.86 |
% |
|
(47.9 |
)% |
|
Total common shareholders’ equity |
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|
1,562,329 |
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1,500,502 |
|
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1,372,901 |
|
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16.4 |
% |
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13.8 |
% |
|
Book value per common share |
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$ |
33.48 |
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$ |
32.17 |
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$ |
29.31 |
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16.2 |
% |
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14.2 |
% |
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Tangible book value per common share* |
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$ |
28.15 |
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$ |
26.82 |
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$ |
23.93 |
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19.7 |
% |
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17.6 |
% |
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Total common shareholders’ equity to total assets |
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12.1 |
% |
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12.0 |
% |
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11.0 |
% |
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Tangible common equity to tangible assets* |
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10.4 |
% |
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10.2 |
% |
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9.16 |
% |
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*Non-GAAP financial measure; A reconciliation of non-GAAP measures to the most directly comparable GAAP measure is included in the Company’s Third Quarter 2024 Financial Supplement. |
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Three Months Ended |
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(dollars in thousands, except share data) |
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Statement of Income Highlights |
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Net interest income |
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$ |
106,017 |
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$ |
102,615 |
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$ |
100,926 |
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NIM |
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3.55 |
% |
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3.57 |
% |
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3.42 |
% |
|
Noninterest (loss) income |
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$ |
(16,497 |
) |
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$ |
25,608 |
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$ |
8,042 |
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Loss from securities, net |
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$ |
(40,165 |
) |
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$ |
— |
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$ |
(14,197 |
) |
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Cash life insurance benefit |
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$ |
— |
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$ |
2,057 |
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$ |
— |
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Total revenue |
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$ |
89,520 |
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$ |
128,223 |
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$ |
108,968 |
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Noninterest expense |
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$ |
76,212 |
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$ |
75,093 |
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$ |
82,997 |
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Early retirement and severance costs |
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$ |
— |
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$ |
1,015 |
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$ |
4,809 |
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Efficiency ratio |
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85.1 |
% |
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58.6 |
% |
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|
76.2 |
% |
|
Core efficiency ratio* |
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|
58.4 |
% |
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58.3 |
% |
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|
63.1 |
% |
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Pre-tax, pre-provision net revenue |
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$ |
13,308 |
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$ |
53,130 |
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$ |
25,971 |
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Adjusted pre-tax, pre-provision net revenue* |
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$ |
53,762 |
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$ |
52,369 |
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$ |
44,869 |
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Provisions for credit losses |
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$ |
1,914 |
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$ |
2,224 |
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$ |
2,821 |
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Net charge-offs ratio |
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0.03 |
% |
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0.02 |
% |
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0.02 |
% |
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Net income applicable to |
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$ |
10,220 |
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$ |
39,979 |
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$ |
19,175 |
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Diluted earnings per common share |
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$ |
0.22 |
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$ |
0.85 |
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$ |
0.41 |
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Effective tax rate |
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10.3 |
% |
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21.4 |
% |
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17.2 |
% |
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Adjusted net income* |
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$ |
40,132 |
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$ |
39,424 |
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$ |
33,148 |
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Adjusted diluted earnings per common share* |
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$ |
0.86 |
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$ |
0.84 |
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$ |
0.71 |
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Weighted average number of shares outstanding - fully diluted |
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46,803,330 |
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46,845,143 |
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46,856,422 |
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Returns on average: |
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Return on average total assets (“ROAA”) |
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0.32 |
% |
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1.30 |
% |
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0.61 |
% |
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Adjusted* |
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1.25 |
% |
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1.28 |
% |
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1.05 |
% |
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Return on average shareholders’ equity |
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2.67 |
% |
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10.9 |
% |
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|
5.46 |
% |
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Return on average tangible common equity (“ROATCE”)* |
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3.19 |
% |
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|
13.1 |
% |
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|
6.67 |
% |
|
Adjusted* |
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|
12.7 |
% |
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|
13.1 |
% |
|
|
11.8 |
% |
|
*Non-GAAP financial measure; A reconciliation of non-GAAP measures to the most directly comparable GAAP measure is included in the Company’s Third Quarter 2024 Financial Supplement. |
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Balance Sheet and Net Interest Margin
The Company reported loans HFI of
The Company reported total deposits of
During the third quarter of 2024, the Company elected to sell
The Company’s net interest income on a tax equivalent basis increased in the third quarter of 2024 to
Holmes continued, “The Company delivered on relationship growth during the quarter with core deposit growth of 5.36% annualized and loan growth of 7.20% annualized. Early in the third quarter, we were able to acquire brokered deposits, which were significantly less costly than new customer funding at the time, to provide us with some balance sheet flexibility. The team continues to focus on building relationships and growing revenue, which creates long-term franchise value.”
Noninterest Income
Core noninterest income* was
Mortgage banking income declined slightly to
Noninterest Expense
Core noninterest expense* during the third quarter of 2024 was
Chief Financial Officer
Credit Quality
In the third quarter, the Company recorded provision expenses of
The Company experienced net charge-offs of
The Company’s nonperforming loans HFI as a percentage of total loans HFI increased to 0.96% as of the end of the third quarter of 2024, compared to 0.79% at the previous quarter-end and 0.59% at the end of the third quarter of 2023. Nonperforming assets as a percentage of total assets increased to 0.99% as of the end of the third quarter of 2024, compared to 0.81% at the end of the prior quarter and 0.71% as of the end of the third quarter of 2023.
Holmes commented, “Annualized net charge-offs were 3 basis points for the quarter which is in line with our recent performance, and our allowance for credit losses increased modestly as we continue to evaluate the impact of multiple economic scenarios on the balance sheet. Nonperforming assets moved higher during the quarter related to downgrades on a couple of individual credits and some softness in consumer loans. We continue to closely monitor our loan portfolio for potential negative credit trends or elevated loss content, but have not seen these materialize.”
Capital
The Company continued its capital build in the third quarter, resulting in a total risk-based capital ratio of 15.1%, common equity tier 1 ratio of 12.7% and tangible common equity to tangible assets ratio* of 10.4%.
Holmes continued, “The Company is steadily increasing its capital, enabling strategic deployment through market expansion, relationship manager additions and balance sheet enhancements. In addition to our securities restructuring transaction this quarter, we expanded into the
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*Non-GAAP financial measure; A reconciliation of non-GAAP measures to the most directly comparable GAAP measure is included in the Company’s Third Quarter 2024 Financial Supplement. |
Summary
Holmes finalized, “The Company is moving into the end of the year in a position of strength. We maintain a long-term focus, consistently compounding shareholder value through our commitment to serving our customers and our communities.”
WEBCAST AND CONFERENCE CALL INFORMATION
A live online broadcast of the Company’s quarterly conference call will be available online at https://event.choruscall.com/mediaframe/webcast.html?webcastid=Vt6q2sIw. An online replay will be available on the Company’s website approximately two hours after the conclusion of the call and will remain available for 12 months.
ABOUT
SUPPLEMENTAL FINANCIAL INFORMATION AND EARNINGS PRESENTATION
Investors are encouraged to review this Earnings Release in conjunction with the Third Quarter 2024 Financial Supplement and Earnings Presentation posted on the Company’s website, which can be found at https://investors.firstbankonline.com. This Earnings Release, the Third Quarter 2024 Financial Supplement and the Earnings Presentation are also included with a Current Report on Form 8-K that the Company furnished to the
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Earnings Release that are not historical in nature may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding the Company’s future plans, results, strategies, and expectations, including expectations around changing economic markets. These statements can generally be identified by the use of the words and phrases “may,” “will,” “should,” “could,” “would,” “goal,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target,” “aim,” “predict,” “continue,” “seek,” and other variations of such words and phrases and similar expressions. These forward-looking statements are not historical facts, and are based upon management’s current expectations, estimates, and projections, many of which, by their nature, are inherently uncertain and beyond the Company’s control. The inclusion of these forward-looking statements should not be regarded as a representation by the Company or any other person that such expectations, estimates, and projections will be achieved. Accordingly, the Company cautions shareholders and investors that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict. Actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements including, without limitation, (1) current and future economic conditions, including the effects of inflation, interest rate fluctuations, changes in the economy or global supply chain, supply-demand imbalances affecting local real estate prices, and high unemployment rates in the local or regional economies in which the Company operates and/or the US economy generally, (2) changes in government interest rate policies and its impact on the Company’s business, net interest margin, and mortgage operations, (3) any continuation of the recent turmoil in the banking industry, including the associated impact to the Company and other financial institutions of any regulatory changes or other mitigation efforts taken by government agencies in response, (4) increased competition for deposits, (5) the Company’s ability to effectively manage problem credits, (6) any deterioration in commercial real estate market fundamentals, (7) the Company’s ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions, (8) the Company’s ability to successfully execute its various business strategies, (9) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, including legislative developments, (10) the effectiveness of the Company’s cybersecurity controls and procedures to prevent and mitigate attempted intrusions, (11) the Company’s dependence on information technology systems of third party service providers and the risk of systems failures, interruptions, or breaches of security, and (12) the impact of natural disasters, pandemics, and/or acts of war or terrorism, (13) events giving rise to international or regional political instability, including the broader impacts of such events on financial markets and/or global macroeconomic environments, and (14) general competitive, economic, political, and market conditions. Further information regarding the Company and factors which could affect the forward-looking statements contained herein can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended
The Company qualifies all forward-looking statements by these cautionary statements.
GAAP RECONCILIATION AND USE OF NON-GAAP FINANCIAL MEASURES
This Earnings Release contains certain financial measures that are not measures recognized under
The Company’s management uses these non-GAAP financial measures in their analysis of the Company’s performance, financial condition and the efficiency of its operations as management believes such measures facilitate period-to-period comparisons and provide meaningful indications of its operating performance as they eliminate both gains and charges that management views as non-recurring or not indicative of operating performance. Management believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods as well as demonstrate the effects of significant non-core gains and charges in the current and prior periods. The Company’s management also believes that investors find these non-GAAP financial measures useful as they assist investors in understanding the Company’s underlying operating performance and in the analysis of ongoing operating trends. In addition, because intangible assets such as goodwill and the other items excluded each vary extensively from company to company, the Company believes that the presentation of this information allows investors to more easily compare the Company’s results to the results of other companies. However, the non-GAAP financial measures discussed herein should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which the Company calculates the non-GAAP financial measures discussed herein may differ from that of other companies reporting measures with similar names. Investors should understand how such other banking organizations calculate their financial measures with names similar to the non-GAAP financial measures the Company has discussed herein when comparing such non-GAAP financial measures.
A reconciliation of these measures to the most directly comparable GAAP financial measures is included in the Company’s Third Quarter 2024 Financial Supplement, which is available at https://investors.firstbankonline.com.
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Financial Summary and Key Metrics |
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(Unaudited) |
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(dollars in thousands, except share data) |
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As of or for the Three Months Ended |
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Selected Balance Sheet Data |
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Cash and cash equivalents |
|
$ |
951,750 |
|
|
$ |
800,902 |
|
|
$ |
848,318 |
|
|
Investment securities, at fair value |
|
|
1,567,922 |
|
|
|
1,482,379 |
|
|
|
1,351,153 |
|
|
Loans held for sale |
|
|
103,145 |
|
|
|
106,875 |
|
|
|
103,858 |
|
|
Loans HFI |
|
|
9,478,129 |
|
|
|
9,309,553 |
|
|
|
9,287,225 |
|
|
Allowance for credit losses on loans HFI |
|
|
(156,260 |
) |
|
|
(155,055 |
) |
|
|
(146,134 |
) |
|
Total assets |
|
|
12,920,222 |
|
|
|
12,535,169 |
|
|
|
12,489,631 |
|
|
Interest-bearing deposits (non-brokered) |
|
|
8,230,867 |
|
|
|
8,130,704 |
|
|
|
8,105,713 |
|
|
Brokered deposits |
|
|
519,200 |
|
|
|
150,113 |
|
|
|
174,920 |
|
|
Noninterest-bearing deposits |
|
|
2,226,144 |
|
|
|
2,187,185 |
|
|
|
2,358,435 |
|
|
Total deposits |
|
|
10,976,211 |
|
|
|
10,468,002 |
|
|
|
10,639,068 |
|
|
Borrowings |
|
|
182,107 |
|
|
|
360,944 |
|
|
|
226,689 |
|
|
Allowance for credit losses on unfunded commitments |
|
|
(6,042 |
) |
|
|
(5,984 |
) |
|
|
(11,600 |
) |
|
Total common shareholders’ equity |
|
|
1,562,329 |
|
|
|
1,500,502 |
|
|
|
1,372,901 |
|
|
Selected Statement of Income Data |
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|
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Total interest income |
|
$ |
185,628 |
|
|
$ |
177,413 |
|
|
$ |
173,912 |
|
|
Total interest expense |
|
|
79,611 |
|
|
|
74,798 |
|
|
|
72,986 |
|
|
Net interest income |
|
|
106,017 |
|
|
|
102,615 |
|
|
|
100,926 |
|
|
Total noninterest (loss) income |
|
|
(16,497 |
) |
|
|
25,608 |
|
|
|
8,042 |
|
|
Total noninterest expense |
|
|
76,212 |
|
|
|
75,093 |
|
|
|
82,997 |
|
|
Earnings before income taxes and provisions for credit losses |
|
|
13,308 |
|
|
|
53,130 |
|
|
|
25,971 |
|
|
Provisions for credit losses |
|
|
1,914 |
|
|
|
2,224 |
|
|
|
2,821 |
|
|
Income tax expense |
|
|
1,174 |
|
|
|
10,919 |
|
|
|
3,975 |
|
|
Net income applicable to noncontrolling interest |
|
|
— |
|
|
|
8 |
|
|
|
— |
|
|
Net income applicable to |
|
$ |
10,220 |
|
|
$ |
39,979 |
|
|
$ |
19,175 |
|
|
Net interest income (tax-equivalent basis) |
|
$ |
106,634 |
|
|
$ |
103,254 |
|
|
$ |
101,762 |
|
|
Adjusted net income* |
|
$ |
40,132 |
|
|
$ |
39,424 |
|
|
$ |
33,148 |
|
|
Adjusted pre-tax, pre-provision net revenue* |
|
$ |
53,762 |
|
|
$ |
52,369 |
|
|
$ |
44,869 |
|
|
Per Common Share |
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|
|
|
|
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|
Diluted net income |
|
$ |
0.22 |
|
|
$ |
0.85 |
|
|
$ |
0.41 |
|
|
Adjusted diluted net income* |
|
|
0.86 |
|
|
|
0.84 |
|
|
|
0.71 |
|
|
Book value |
|
|
33.48 |
|
|
|
32.17 |
|
|
|
29.31 |
|
|
Tangible book value* |
|
|
28.15 |
|
|
|
26.82 |
|
|
|
23.93 |
|
|
Weighted average number of shares outstanding - fully diluted |
|
|
46,803,330 |
|
|
|
46,845,143 |
|
|
|
46,856,422 |
|
|
Period-end number of shares |
|
|
46,658,019 |
|
|
|
46,642,958 |
|
|
|
46,839,159 |
|
|
Selected Ratios |
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Return on average: |
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|
|
|
||||||
|
Assets |
|
|
0.32 |
% |
|
|
1.30 |
% |
|
|
0.61 |
% |
|
Shareholders’ equity |
|
|
2.67 |
% |
|
|
10.9 |
% |
|
|
5.46 |
% |
|
Tangible common equity* |
|
|
3.19 |
% |
|
|
13.1 |
% |
|
|
6.67 |
% |
|
Efficiency ratio |
|
|
85.1 |
% |
|
|
58.6 |
% |
|
|
76.2 |
% |
|
Core efficiency ratio (tax-equivalent basis)* |
|
|
58.4 |
% |
|
|
58.3 |
% |
|
|
63.1 |
% |
|
Loans HFI to deposit ratio |
|
|
86.4 |
% |
|
|
88.9 |
% |
|
|
87.3 |
% |
|
Noninterest-bearing deposits to total deposits |
|
|
20.3 |
% |
|
|
20.9 |
% |
|
|
22.2 |
% |
|
Net interest margin (tax-equivalent basis) |
|
|
3.55 |
% |
|
|
3.57 |
% |
|
|
3.42 |
% |
|
Yield on interest-earning assets |
|
|
6.20 |
% |
|
|
6.16 |
% |
|
|
5.87 |
% |
|
Cost of interest-bearing liabilities |
|
|
3.63 |
% |
|
|
3.56 |
% |
|
|
3.41 |
% |
|
Cost of total deposits |
|
|
2.83 |
% |
|
|
2.77 |
% |
|
|
2.58 |
% |
|
Credit Quality Ratios |
|
|
|
|
|
|
||||||
|
Allowance for credit losses on loans HFI as a percentage of loans HFI |
|
|
1.65 |
% |
|
|
1.67 |
% |
|
|
1.57 |
% |
|
Annualized net charge-offs as a percentage of average loans HFI |
|
|
0.03 |
% |
|
|
0.02 |
% |
|
|
0.02 |
% |
|
Nonperforming loans HFI as a percentage of loans HFI |
|
|
0.96 |
% |
|
|
0.79 |
% |
|
|
0.59 |
% |
|
Nonperforming assets as a percentage of total assets |
|
|
0.99 |
% |
|
|
0.81 |
% |
|
|
0.71 |
% |
|
Preliminary Capital Ratios (consolidated) |
|
|
|
|
|
|
||||||
|
Total common shareholders’ equity to assets |
|
|
12.1 |
% |
|
|
12.0 |
% |
|
|
11.0 |
% |
|
Tangible common equity to tangible assets* |
|
|
10.4 |
% |
|
|
10.2 |
% |
|
|
9.16 |
% |
|
Tier 1 leverage |
|
|
11.5 |
% |
|
|
11.7 |
% |
|
|
11.0 |
% |
|
Tier 1 risk-based capital |
|
|
13.0 |
% |
|
|
13.0 |
% |
|
|
12.1 |
% |
|
Total risk-based capital |
|
|
15.1 |
% |
|
|
15.1 |
% |
|
|
14.1 |
% |
|
Common equity Tier 1 |
|
|
12.7 |
% |
|
|
12.7 |
% |
|
|
11.8 |
% |
|
*Non-GAAP financial measure; A reconciliation of non-GAAP measures to the most directly comparable GAAP measure is included in the Company’s Third Quarter 2024 Financial Supplement. |
||||||||||||
(FBK - ER)
View source version on businesswire.com: https://www.businesswire.com/news/home/20241015141493/en/
MEDIA CONTACT:
615-370-6737
dustin.haupt@firstbankonline.com
www.firstbankonline.com
FINANCIAL CONTACT:
615-564-1212
mmettee@firstbankonline.com
investorrelations@firstbankonline.com
Source:
