FB Financial Reports Strong Q3 Earnings with 21% Growth

FB Financial Corporation Reports Earnings Growth

FB Financial Corporation (NYSE: FBK) showcased impressive financial results for the third quarter of 2024, reporting adjusted earnings of $0.86 per share, marking a noteworthy 21% increase compared to the previous year. This growth reflects the company’s dedication to enhancing shareholder value and operational excellence.

Major Performance Highlights

The financial results for the quarter highlight several key metrics:

• Adjusted earnings per share surged to $0.86, an increase of 21% year-over-year.
• Adjusted return on average assets stood at a robust 1.25%.
• There was a substantial rise of 20% in pre-tax pre-provision net revenue.
• The tangible common equity ratio was reported at 10.4%, alongside a CET1 ratio of 12.7%.
• Annualized loan growth reached 7.2% accompanied by a 5.4% rise in non-brokered deposits.

Future Outlook for FB Financial

Looking forward, the management of FB Financial remains optimistic:

• The company anticipates mid-single-digit growth in the fourth quarter of 2024.
• Aiming for low double-digit growth in loans and deposits for 2025.
• Expected net interest margin is forecasted to range between 3.50% and 3.60% in Q4 2024.
• Management remains positive about maintaining margins amidst gradual interest rate decreases.

Challenges and Concerns

Despite the significant achievements, challenges persist:

• Notable declines in construction loans have become apparent.
• The construction and development concentration ratio is presently at 69%, while the commercial real estate concentration ratio is at 245%.
• There was a concerning non-interest income loss of $16.5 million, primarily due to a $40.1 million loss on securities.
• Potential difficulties in sustaining deposit growth for 2025 may arise.

Positive Developments

On a more encouraging note, FB Financial has undertaken several strategic initiatives:

• Recruitment of 20 senior revenue producers has bolstered the team.
• The expansion into new markets, including Tuscaloosa, Alabama, highlights growth ambitions.
• The company is open to bank acquisitions that match its cultural and financial objectives.
• The balance sheet is well-aligned, with half of the loan portfolio fixed and robust indexed deposits totaling $2.7 billion.
• Credit performance remains strong, especially in the manufactured housing sector, which is stabilizing.

Missed Expectations

Interestingly, FB Financial reported earnings of $0.22 per share, which fell short of the adjusted earnings figure.

Q&A Insights from Management

During the Q&A segment, executives elaborated on several vital points:

• A broad-based growth in commercial and industrial loans is noted, reducing reliance on large credits.
• Discussions around potential mergers and acquisitions are increasingly frequent in the current market.
• Current asset quality issues appear to be stemming more from operational disputes rather than the pressures of elevated interest rates.

Concluding Remarks

FB Financial Corporation has demonstrated strong financial results for the third quarter of 2024, highlighted by adjusted earnings per share rising by 21% from the year prior. Chris Holmes, President and CEO, expressed satisfaction with the company's performance and stressed the importance of continued growth as the organization moves forward.

Frequently Asked Questions

What were FB Financial's adjusted earnings for Q3 2024?

FB Financial reported adjusted earnings of $0.86 per share for the third quarter of 2024, indicating a 21% year-over-year increase.

How does FB Financial plan to grow in 2025?

The company aims for low double-digit growth in loans and deposits for 2025, reflecting its optimism for continued expansion.

What challenges is FB Financial facing?

Challenges include a decline in construction loans and a loss of $16.5 million in non-interest income, primarily from security losses.

What positive steps is FB Financial taking?

FB Financial has hired 20 senior revenue producers, expanded into new markets, and remains open to strategic bank acquisitions.

How strong is FB Financial's capital position?

The company maintains a tangible common equity ratio of 10.4% and a CET1 ratio of 12.7%, showcasing solid financial health.

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