FB Financial Corporation (the “Company”) (NYSE: FBK), parent company of FirstBank, reported net income of $19.2 million, or $0.41 per diluted common share, for the third quarter of 2023, compared to $0.75 in the previous quarter and $0.68 in the third quarter of last year. Excluding the impact of a $14.2 million net loss on securities and $4.8 million in early retirement and severance costs, adjusted net income* was $33.2 million, or $0.71 per diluted common share, compared to $0.77 in the previous quarter and $0.68 in the third quarter of last year.
The Company’s deposits were $10.64 billion as of September 30, 2023, compared to $10.87 billion as of June 30, 2023, and $10.01 billion as of September 30, 2022. Loans held for investment (“HFI”) were $9.29 billion as of the end of the third quarter compared to $9.33 billion as of the end of the previous quarter and $9.11 billion as of the end of the third quarter last year. The Company ended the quarter with book value per common share of $29.31, tangible book value per common share* of $23.93 and adjusted tangible book value per common share* of $28.04. Net interest margin (“NIM”) increased to 3.42% for the third quarter of 2023 compared to 3.40% in the prior quarter and 3.93% in the third quarter of 2022.
President and Chief Executive Officer, Christopher T. Holmes stated, “The Company had a successful quarter executing on strategic initiatives to enhance earnings and position for expected opportunities. Our balance sheet management in the second half of 2022 and during 2023 to ensure ample liquidity, stable funding and excess capital allows us to focus on improving earnings at this point in the interest rate cycle. Near the end of the quarter, we sold $76.6 million of available-for-sale securities and reinvested the proceeds of that sale into higher-yielding securities, adding approximately 5% to the yield on those invested funds that will be accretive in the fourth quarter and future periods. We also had expense reductions during the quarter which will benefit earnings moving forward. There will likely be additional balance sheet enhancements and expense reductions in the fourth quarter, all of which improve our earnings profile and keep the Company favorably positioned for opportunities.”
Annualized | ||||||||||||||||||
(dollars in thousands, except share data) | Sep 2023 | Jun 2023 | Sep 2022 | Sep 23 / Jun 23 % Change | Sep 23 / Sep 22 % Change | |||||||||||||
Balance Sheet Highlights | ||||||||||||||||||
Investment securities, at fair value | $ | 1,351,153 | $ | 1,422,391 | $ | 1,485,133 | (19.9 | )% | (9.02 | )% | ||||||||
Loans held for sale | 103,858 | 99,131 | 130,733 | 18.9 | % | (20.6 | )% | |||||||||||
Loans HFI | 9,287,225 | 9,326,024 | 9,105,016 | (1.65 | )% | 2.00 | % | |||||||||||
Allowance for credit losses on loans HFI | 146,134 | 140,664 | 134,476 | 15.4 | % | 8.67 | % | |||||||||||
Allowance for credit losses on unfunded commitments | 11,600 | 14,810 | 23,577 | (86.0 | )% | (50.8 | )% | |||||||||||
Total assets | 12,489,631 | 12,887,395 | 12,258,082 | (12.2 | )% | 1.89 | % | |||||||||||
Interest-bearing deposits (non-brokered) | 8,105,713 | 8,233,082 | 7,038,566 | (6.14 | )% | 15.2 | % | |||||||||||
Brokered deposits | 174,920 | 238,885 | 1,002 | (106.2 | )% | NM | ||||||||||||
Noninterest-bearing deposits | 2,358,435 | 2,400,288 | 2,966,514 | (6.92 | )% | (20.5 | )% | |||||||||||
Total deposits | 10,639,068 | 10,872,255 | 10,006,082 | (8.51 | )% | 6.33 | % | |||||||||||
Estimated insured or collateralized deposits | 7,570,639 | 7,858,761 | 6,653,463 | (14.5 | )% | 13.8 | % | |||||||||||
Borrowings | 226,689 | 390,354 | 722,940 | (166.3 | )% | (68.6 | )% | |||||||||||
Total common shareholders' equity | 1,372,901 | 1,386,951 | 1,281,161 | (4.02 | )% | 7.16 | % | |||||||||||
Book value per common share | $ | 29.31 | $ | 29.64 | $ | 27.30 | (4.42 | )% | 7.36 | % | ||||||||
Tangible book value per common share* | $ | 23.93 | $ | 24.23 | $ | 21.85 | (4.91 | )% | 9.52 | % | ||||||||
Adjusted tangible book value per common share* | $ | 28.04 | $ | 27.72 | $ | 25.84 | 4.44 | % | 8.48 | % | ||||||||
Total common shareholders' equity to total assets | 11.0 | % | 10.8 | % | 10.5 | % | ||||||||||||
Tangible common equity to tangible assets* | 9.16 | % | 8.98 | % | 8.54 | % | ||||||||||||
Estimated uninsured and uncollateralized deposits as a percentage of total deposits | 28.8 | % | 27.7 | % | 33.5 | % | ||||||||||||
*Non-GAAP financial measure; A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure is included in the Company's Third Quarter 2023 Financial Supplement. | ||||||||||||||||||
NM- Not meaningful | ||||||||||||||||||
Three Months Ended | ||||||||||||
(dollars in thousands, except share data) | Sep 2023 | Jun 2023 | Sep 2022 | |||||||||
Statement of Income Highlights | ||||||||||||
Net interest income | $ | 100,926 | $ | 101,543 | $ | 111,384 | ||||||
NIM | 3.42 | % | 3.40 | % | 3.93 | % | ||||||
Noninterest income | $ | 8,042 | $ | 23,813 | $ | 22,592 | ||||||
Loss from securities, net | $ | (14,197 | ) | $ | (28 | ) | $ | (140 | ) | |||
Total revenue | $ | 108,968 | $ | 125,356 | $ | 133,976 | ||||||
Noninterest expense | $ | 82,997 | $ | 81,292 | $ | 81,847 | ||||||
Early retirement and severance costs | $ | 4,809 | $ | 1,426 | $ | — | ||||||
Efficiency ratio | 76.2 | % | 64.8 | % | 61.1 | % | ||||||
Core efficiency ratio* | 63.1 | % | 63.5 | % | 60.7 | % | ||||||
Pre-tax, pre-provision earnings | $ | 25,971 | $ | 44,064 | $ | 52,129 | ||||||
Adjusted pre-tax, pre-provision earnings* | $ | 44,984 | $ | 44,965 | $ | 52,516 | ||||||
Provisions for credit losses | $ | 2,821 | $ | (1,078 | ) | $ | 11,367 | |||||
Net charge-off ratio | 0.02 | % | 0.03 | % | — | % | ||||||
Net income applicable to FB Financial Corporation | $ | 19,175 | $ | 35,299 | $ | 31,831 | ||||||
Diluted earnings per common share | $ | 0.41 | $ | 0.75 | $ | 0.68 | ||||||
Effective tax rate | 17.2 | % | 21.8 | % | 21.9 | % | ||||||
Adjusted net income* | $ | 33,233 | $ | 35,973 | $ | 32,117 | ||||||
Adjusted diluted earnings per common share* | $ | 0.71 | $ | 0.77 | $ | 0.68 | ||||||
Weighted average number of shares outstanding - fully diluted | 46,856,422 | |||||||||||
