• EPS: $0.81 reported, $0.85 adjusted for Q4 2024.
• Full Year EPS: $2.48 reported, $3.40 adjusted, a 13% year-over-year increase.
• Pretax Pre-Provision Net Revenue: $158.7 million reported, $217.1 million adjusted, a 20% year-over-year increase.
• Total Assets Growth: Increased by $553 million or approximately 4.4% for the year.
• Core Deposit Balances Growth: Increased by $343.5 million or about 3.3% for the year.
• Return on Average Assets: 1.14% for the quarter.
• Return on Average Tangible Common Equity: 11.5% for the quarter.
• Tangible Common Equity to Tangible Assets: 10.2%.
• Preliminary CET1 Ratio: 12.8%.
• Total Risk-Based Capital Ratio: 15.2%.
• Net Interest Income: $108.4 million for Q4 2024.
• Noninterest Income: $22 million reported, $24.2 million adjusted for Q4 2024.
• Noninterest Expense: $73.2 million for Q4 2024.
• Provision Expense: $7.1 million for Q4 2024.
• Net Income: $37.9 million reported, $39.8 million adjusted for Q4 2024.
• Net Interest Margin: 3.5% for Q4 2024.
• Cost of Interest-Bearing Deposits: 3.37% for Q4 2024.
• Core Efficiency Ratio: 54.6% for Q4 2024.
• Annualized Net Charge-Off Rate: Approximately 3 basis points, excluding a specific charge-off.
• Allowance for Credit Losses (ACL): $152 million or 1.58% of loans held for investment.
• Equity to Total Assets Ratio: 11.9%.

• Warning! GuruFocus has detected 3 Warning Sign with FBK.

Release Date: January 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• FB Financial Corp (NYSE:FBK) reported a strong EPS of $0.81 and an adjusted EPS of $0.85 for the quarter, with a full-year adjusted EPS increase of 13%.
• The company achieved a 20% year-over-year increase in pretax pre-provision net revenue, highlighting effective cost management and revenue growth.
• FB Financial Corp (NYSE:FBK) expanded its asset base by $553 million, or approximately 4.4%, funded through a 3.3% growth in core deposit balances.
• The company maintains a strong capital position with a tangible common equity to tangible assets ratio of 10.2% and a preliminary CET1 ratio of 12.8%.
• FB Financial Corp (NYSE:FBK) is expanding into new markets, including Asheville, North Carolina, and Tuscaloosa, Alabama, indicating strategic growth initiatives.

Negative Points

• Net interest margin decreased slightly to 3.5%, impacted by carrying excess interest-bearing cash.
• The company experienced an elevated charge-off level due to a full charge-off of a single C&I relationship, impacting overall credit quality metrics.
• FB Financial Corp (NYSE:FBK) faces competitive pressure in deposit pricing, with new deposits requiring rates close to 80-90% of Fed funds.
• The commercial real estate market presents challenges, with some properties in Nashville selling at significant discounts.
• The company anticipates potential runoff of higher-cost deposits, which could impact future liquidity management.

Q & A Highlights

Q: Can you provide more details about the new hires and their focus areas? A: Christopher Holmes, President and CEO, explained that the new hires are primarily core commercial and industrial (C&I) frontline bankers. The hires are geographically diverse, and the company does not set a specific target for hiring but focuses on finding the right fit. The optimism around hiring is due to ongoing recruitment efforts and market opportunities.

Q: What is driving your optimism for growth in 2025, and how are you preparing for it? A: Christopher Holmes noted that the company anticipates growth from recent hires and the organic growth of their advantageous geography. They are also managing deposits to support anticipated loan growth, with some high-cost deposits potentially maturing.

Q: How does the current M&A environment affect your strategy? A: Christopher Holmes mentioned that the regulatory environment seems more accommodating, which may allow for more aggressive pursuit of M&A opportunities. The company remains cautious to avoid overextending but is optimistic about potential transactions.

Q: Can you discuss the impact of recent office property sales in Nashville on your portfolio? A: Christopher Holmes stated that the recent sales at a loss were for older properties with occupancy issues, acquired by out-of-town funds. He emphasized that these are not indicative of broader economic issues in Nashville, and their office portfolio does not include similar center-city properties.

Q: What factors are expected to drive margin improvement in the first quarter of 2025? A: Michael Mettee, CFO, highlighted that margin improvement will be driven by deploying excess liquidity and potentially allowing higher-cost deposits to run off. Stability in interest rates and a steepening yield curve could also contribute to margin expansion.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.