Reports Q3 Diluted EPS of $0.68, Adjusted
Diluted EPS of $0.68
FB Financial Corporation (the “Company”) (NYSE: FBK), parent
company of FirstBank, reported net income of $31.8 million, or
$0.68 per diluted common share, for the third quarter of 2022,
compared to $0.41 in the previous quarter and $0.94 in the same
quarter last year. Adjusted net income was $32.1 million, or $0.68
per diluted common share, compared to $0.64 in the previous quarter
and $0.89 per diluted common share in the same quarter last
year.
Pre-tax, pre-provision earnings for the third quarter of 2022
were $52.1 million and adjusted pre-tax, pre-provision earnings
were $52.5 million. Reported results during the third quarter
included a provision for credit losses of $11.4 million compared to
$12.3 million for the prior quarter and a Mortgage segment loss of
$3.7 million compared to a loss of $15.2 million for the prior
quarter, or $2.7 million loss adjusted. The Company recorded growth
in loans held for investment ("HFI") of $480.7 million, or 22.1%
annualized, and growth in noninterest-bearing deposits of $71.0
million, or 9.73% annualized, in the third quarter.
President and Chief Executive Officer, Christopher T. Holmes
stated, “The Company continues to deliver strong balance sheet
trends, and we are pleased with the 9% increase in net interest
income over the prior quarter and the 41 basis point expansion in
our net interest margin. All of our markets continue to have strong
credit demand and good economic activity. While we hope for a soft
landing for the economy in the coming months, we are taking a
prudent approach with our balance sheet by limiting growth in
certain assets, maintaining appropriate capital and reserve levels,
managing liquidity, and preparing for a range of economic
scenarios.”
2022
2021
Annualized
(dollars in thousands, except per share
data)
Third Quarter
Second Quarter
Third Quarter
3Q22 / 2Q22 %
Change
3Q22 / 3Q21 %
Change
Balance Sheet
Highlights
Investment securities
$
1,485,133
$
1,621,344
$
1,577,337
(33.3
)%
(5.85
)%
Mortgage loans held for sale, at fair
value
97,011
222,400
755,210
(223.7
)%
(87.2
)%
Commercial loans held for sale, at fair
value
33,722
37,815
100,496
(42.9
)%
(66.4
)%
Loans held for investment (HFI)
9,105,016
8,624,337
7,294,674
22.1
%
24.8
%
Allowance for credit losses(a)
134,476
126,272
139,446
25.8
%
(3.56
)%
Total assets
12,258,082
12,193,862
11,810,290
2.09
%
3.79
%
Interest-bearing deposits
7,039,568
7,647,782
7,462,349
(31.6
)%
(5.67
)%
Noninterest-bearing deposits
2,966,514
2,895,520
2,609,569
9.73
%
13.7
%
Mortgage escrow deposits
140,768
133,180
190,631
22.6
%
(26.2
)%
Total deposits
10,006,082
10,543,302
10,071,918
(20.2
)%
(0.65
)%
Borrowings
722,940
160,400
172,710
1,391.4
%
318.6
%
Total common shareholders' equity
1,281,161
1,319,852
1,400,913
(11.6
)%
(8.55
)%
Book value per share
$
27.30
$
28.15
$
29.36
(12.0
)%
(7.02
)%
Total common shareholders' equity to total
assets
10.5
%
10.8
%
11.9
%
Tangible book value per common share*
$
21.85
$
22.67
$
23.90
(14.4
)%
(8.58
)%
Adjusted tangible book value per common
share*
$
25.84
$
25.24
$
23.63
9.46
%
9.34
%
Tangible common equity to tangible
assets*
8.54
%
8.90
%
9.87
%
* Certain measures are considered non-GAAP
financial measures. For a reconciliation and discussion of this
non-GAAP measure, see “GAAP Reconciliation and Use of non-GAAP
Financial Measures” and the corresponding non-GAAP reconciliation
tables in this Earnings Release dated October 17, 2022.
(a) Excludes reserve for credit losses on
unfunded commitments of $23,577, $20,399, and $13,503 recorded in
accrued expenses and other liabilities as of September 30, 2022,
June 30, 2022, and September 30, 2021, respectively.
2022
2021
(dollars in thousands, except share and
per share data)
Third Quarter
Second Quarter
Third Quarter
Results of
operations
Net interest income
$
111,384
$
102,171
$
88,476
NIM
3.93
%
3.52
%
3.20
%
Provisions for credit losses
$
11,367
$
12,318
$
(2,531
)
Net charge-off ratio
—
%
0.09
%
0.13
%
Noninterest income
$
22,592
$
33,214
$
59,006
Mortgage banking income
$
12,384
$
22,559
$
45,384
Total revenue
$
133,976
$
135,385
$
147,482
Noninterest expense
$
81,847
$
96,997
$
95,007
Mortgage restructuring expenses
$
—
$
12,458
$
—
Core noninterest expense*
$
81,847
$
84,539
$
95,007
Efficiency ratio
61.1
%
71.6
%
64.4
%
Core efficiency ratio*
60.7
%
61.1
%
64.7
%
Adjusted pre-tax, pre-provision
earnings*
$
52,516
$
52,856
$
51,240
Adjusted Banking segment pre-tax,
pre-provision earnings*
$
56,178
$
55,560
$
42,387
Adjusted Mortgage segment pre-tax,
pre-provision (loss) earnings*
$
(3,662
)
$
(2,704
)
$
8,853
Net income applicable to FB Financial
Corporation(1)
$
31,831
$
19,345
$
45,290
Diluted earnings per common share
$
0.68
$
0.41
$
0.94
Effective tax rate
21.9
%
25.8
%
17.7
%
Adjusted net income*
$
32,117
$
30,051
$
42,699
Adjusted diluted earnings per common
share*
$
0.68
$
0.64
$
0.89
Weighted average number of shares
outstanding - fully diluted
47,024,611
47,211,650
48,007,147
Actual shares outstanding - period end
46,926,377
46,881,896
47,707,634
Returns on
average:
Assets ("ROAA")
1.05
%
0.62
%
1.51
%
Equity ("ROAE")
9.45
%
5.74
%
12.9
%
Tangible common equity ("ROATCE")*
11.7
%
7.09
%
15.9
%
* Certain measures are considered non-GAAP
financial measures. For a reconciliation and discussion of this
non-GAAP measure, see “GAAP Reconciliation and Use of non-GAAP
Financial Measures” and the corresponding non-GAAP reconciliation
tables in this Earnings Release dated October 17, 2022.
(1) Includes a dividend declared and paid
by the Company's REIT subsidiary to minority interest preferred
shareholders in the second quarter of 2022.
Balance Sheet and Net Interest
Margin
The Company reported loan balances (HFI) of $9.11 billion, an
increase of $480.7 million, or 22.1% annualized, from the end of
the previous quarter. The contractual yield on loans increased to
4.79% in the third quarter of 2022 from 4.24% in the previous
quarter.
Total deposits decreased by $537.2 million in the third quarter
to $10.0 billion, and noninterest-bearing deposits ("NIBs")
increased by $71.0 million, or 9.7% annualized. NIBs have grown
13.7% over the prior twelve months. The decrease in total deposits
was related to a $721.5 million decrease in public funds to $1.61
billion in the third quarter from $2.34 billion in the second
quarter. During the quarter, the Company exited certain high-cost
public funds and increased deposit rates on customer time and money
market deposits to increase collateral availability and improve its
liquidity profile and future funding cost. Total customer deposits
excluding public funds increased by $187.7 million during the
quarter. The Company's total cost of deposits increased during the
third quarter of 2022 from the prior quarter by 27 basis points to
0.52%, and the cost of interest-bearing deposits increased to 0.74%
from 0.33% in the previous quarter. The Company utilized short-term
FHLB borrowings during the third quarter at an average rate of
2.60%.
The Company's net interest income on a tax-equivalent basis for
the third quarter of 2022 increased to $112.1 million from $102.9
million in the previous quarter. The Company's NIM was 3.93% for
the third quarter, compared to 3.52% for the second quarter. The
NIM expanded as interest rates increased and loans held for
investment as a percentage of deposits increased to 91.0%. During
the third quarter, syndication fees, nonaccrual interest and
amortization on purchased loans contributed 5 basis points to the
NIM, compared to 6 basis points in the second quarter of 2022.
Noninterest Income
Noninterest income was $22.6 million for the third quarter of
2022, compared to $33.2 million for the prior quarter and $59.0
million for the third quarter of 2021. Banking segment noninterest
income was $10.3 million for the third quarter of 2022, compared to
$10.7 million for the prior quarter and $13.8 million for the third
quarter of 2021. Banking segment noninterest income during the
third quarter of 2022 was impacted by the Durbin amendment becoming
applicable to the Company during the period and is reflected in the
decrease in interchange fee income from $4.6 million in the second
quarter of 2022 to $2.0 million in the third quarter of 2022. Net
changes in fair value in commercial loans held for sale during the
third quarter of 2022 resulted in a loss included in noninterest
income of $0.4 million compared to a loss of $2.0 million in the
prior quarter and a gain of $0.7 million in the third quarter of
2021.
Mortgage banking income decreased to $12.4 million in the third
quarter, compared to $22.6 million in the second quarter of 2022
and $45.4 million in the third quarter of 2021. The Mortgage
segment had a pre-tax net loss of $3.7 million for the third
quarter of 2022 compared to a pre-tax net loss of $15.2 million (or
loss of $2.7 million adjusted for mortgage restructuring expenses)
during the previous quarter and a pre-tax contribution of $8.9
million for the third quarter of last year. Interest rate lock
commitment volume totaled $0.41 billion in the third quarter
compared to $0.70 billion in the second quarter of 2022 and $2.01
billion in the third quarter of 2021.
Chief Financial Officer, Michael Mettee noted, “Mortgage has
materially completed changes to operations and, after taking a
sizeable mark to market charge early in the quarter, returned to an
operational profit in the last two months of the third quarter. We
believe our Mortgage segment is positioned to operate profitably on
an annual basis moving forward in this challenging environment, but
will be subject to seasonal trends that always impact the
business.”
Expense Management
Noninterest expenses were $81.8 million for the third quarter of
2022, compared to $97.0 million for the prior quarter and $95.0
million for the third quarter of 2021. Banking segment noninterest
expense was $65.9 million for the third quarter of 2022, compared
to $59.3 million for the second quarter of 2022 and $58.8 million
for the third quarter of 2021. Banking segment noninterest expenses
were elevated due to increases in marketing and occupancy, a
nonrecurring tax credit reduction and temporary increases in legal
and professional expenses.
Mortgage segment noninterest expense was $16.0 million for the
third quarter of 2022, compared to $37.7 million (or $25.2 million
excluding $12.5 million of restructuring expenses) for the previous
quarter and $36.2 million for the third quarter of 2021.
During the third quarter of 2022, the Company's core efficiency
ratio was 60.7%, compared to 61.1% in the previous quarter and
64.7% for the third quarter of the prior year. The Banking segment
core efficiency ratio for the third quarter was 53.8% versus the
previous quarter of 51.3% and 57.9% in the third quarter of the
previous year.
Mettee noted, “The Banking segment core efficiency ratio
increased due to atypical expenses incurred during the quarter and,
a decrease in revenue related to interchange fees reflecting the
impact of the Durbin amendment. The Mortgage segment reduced
operating expenses through its restructuring effort and operated
with an efficiency ratio in the 80's for the last two months of the
third quarter.”
Credit Quality
The Company recorded provisions for credit losses of $11.4
million in the third quarter of 2022, including a provision for
credit losses on unfunded commitments of $3.2 million. The Company
continues to maintain a well-positioned balance sheet with an
allowance for credit losses ("ACL") of $134.5 million as of
September 30, 2022, representing 1.48% of loans HFI compared with
1.46% as of June 30, 2022.
The Company experienced net recoveries of $15 thousand in the
third quarter of 2022, or 0.00% of average loans HFI compared to
net charge-offs to average loans HFI of 0.09% in the prior quarter.
For the nine months ended September 30, 2022, the Company
experienced net charge-offs of $1.3 million, or 0.02% of average
loans HFI, compared to 0.07% for the nine months ended September
30, 2021.
The Company's nonperforming loans as a percent of loans HFI
decreased to 0.47% as of the end of the third quarter of 2022
compared to 0.51% as of the previous quarter end and 0.59% as of
the end of the third quarter of the previous year. Nonperforming
assets (NPAs) as a percentage of total assets at the end of the
third quarter was 0.62% compared to 0.46% as of the prior
quarter-end. The increase was entirely due to a change in
accounting policy during the quarter, which resulted in the Company
recording $26.5 million in optional repurchase rights associated
with seriously delinquent Ginnie Mae ("GNMA") mortgage loans
previously sold. This change in accounting policy increased the NPA
ratio by 22 bps in the third quarter of 2022 over the prior
quarter.
Holmes commented, “The Company's asset quality improved quarter
over quarter and credit metrics continue to show positive trends.
While we had small net recoveries in the quarter and our credit
quality metrics are stellar, we continue to position the balance
sheet for expected economic headwinds in 2023, and increased our
allowance for credit losses during the quarter. We recorded
provisions for credit losses of $23.7 million over the previous two
quarters and increased the ACL as a percentage of loans held for
investment to 1.48%.”
Summary
Holmes summarized, "The third quarter results reflect a measured
approach to growing our balance sheet through relationship-based
loans and deposits and improving our earnings by expanding our net
interest margin. For the balance of the year and moving into 2023,
our efforts will be concentrated on deposit growth and moderating
loan growth as we maintain our focus on serving customers and
creating value for shareholders."
WEBCAST AND CONFERENCE CALL INFORMATION
FB Financial Corporation will host a conference call to discuss
the Company's financial results on October 18, 2022, at 8:00 a.m.
(Central Time). To listen to the call, participants should dial
1-877-883-0383 (confirmation code 3293769) approximately 10 minutes
prior to the call. A telephonic replay will be available
approximately two hours after the call through October 25, 2022, by
dialing 1-877-344-7529 and entering confirmation code 8838274.
A live online broadcast of the Company’s quarterly conference
call will be available online at
https://event.choruscall.com/mediaframe/webcast.html?webcastid=Ij5IKOqR.
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 FB FINANCIAL CORPORATION
FB Financial Corporation (NYSE: FBK) is a financial holding
company headquartered in Nashville, Tennessee. FB Financial
Corporation operates through its wholly owned banking subsidiary,
FirstBank, the third largest Tennessee-headquartered community
bank, with 82 full-service bank branches across Tennessee,
Kentucky, Alabama and North Georgia, and mortgage offices across
the Southeast. FirstBank has approximately $12.3 billion in total
assets.
SUPPLEMENTAL FINANCIAL INFORMATION AND EARNINGS
PRESENTATION
Investors are encouraged to review this Earnings Release in
conjunction with the Supplemental Financial Information and
Earnings Presentation posted on the Company’s website, which can be
found at https://investors.firstbankonline.com. This Earnings
Release, the Supplemental Financial Information and the Earnings
Presentation are also included with a Current Report on Form 8-K
that the Company furnished to the U.S. Securities and Exchange
Commission (“SEC”) on October 17, 2022.
BUSINESS SEGMENT RESULTS
The Company has included its business segment financial tables
as part of the Supplemental Financial Information, which is
available in connection with this Earnings Release. A detailed
discussion of historical business segment results is included in
the Company’s Annual Report on Form 10-K filed with the SEC for the
year ended December 31, 2021.
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,” “project,” 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) the Company’s ability
to effectively manage problem credits, (4) the Company’s ability to
identify potential candidates for, consummate, and achieve
synergies from, potential future acquisitions, (5) difficulties and
delays in integrating acquired businesses or fully realizing costs
savings, revenue synergies and other benefits from future and prior
acquisitions, (6) the Company’s ability to successfully execute its
various business strategies, (7) changes in state and federal
legislation, regulations or policies applicable to banks and other
financial service providers, including legislative developments,
(8) the potential impact of the proposed phase-out of the London
Interbank Offered Rate ("LIBOR") or other changes involving LIBOR,
(9) the effectiveness of the Company’s cybersecurity controls and
procedures to prevent and mitigate attempted intrusions, (10) 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 (11) the adverse
effects of the ongoing global COVID-19 pandemic, including the
effect of actions taken to mitigate its impact on individuals or
the economy broadly; (12) natural disasters or acts of war or
terrorism, (13) international or political instability, including
the impacts related to or resulting from Russia’s military action
in Ukraine and additional sanctions and export controls, as well as
the broader impacts to financial markets and the global
macroeconomic and geopolitical 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
December 31, 2021, and in any of the Company’s subsequent filings
with the SEC. Many of these factors are beyond the Company’s
ability to control or predict. If one or more events related to
these or other risks or uncertainties materialize, or if the
underlying assumptions prove to be incorrect, actual results may
differ materially from the forward-looking statements. Accordingly,
shareholders and investors should not place undue reliance on any
such forward-looking statements. Any forward-looking statement
speaks only as of the date of this Earnings Release, and the
Company undertakes no obligation to publicly update or review any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as required by law. New
risks and uncertainties may emerge from time to time, and it is not
possible for the Company to predict their occurrence or how they
will affect the Company.
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 U.S. generally accepted
accounting principles (“GAAP”) and therefore are considered
non-GAAP financial measures. These non-GAAP financial measures may
include, without limitation, adjusted net income, adjusted diluted
earnings per common share, adjusted and unadjusted pre-tax
pre-provision earnings, core revenue, core noninterest expense and
core noninterest income, core efficiency ratio (tax equivalent
basis), adjusted Banking segment pre-tax, pre-provision earnings,
Banking segment core noninterest income, Mortgage segment core
noninterest income, Banking segment core noninterest expense,
Mortgage segment core noninterest expense, Banking segment core
revenue, Mortgage segment core revenue, Banking segment core
efficiency ratio (tax equivalent basis), Mortgage segment core
efficiency ratio (tax equivalent basis), adjusted return on average
assets and equity, and adjusted pre-tax pre-provision return on
average assets and equity. Each of these non-GAAP metrics excludes
certain income and expense items that the Company’s management
considers to be non-core/adjusted in nature. The Company refers to
these non-GAAP measures as adjusted (or core) measures. Also, the
Company presents tangible assets, tangible common equity, adjusted
tangible common equity, tangible book value per common share,
adjusted tangible book value per common share, tangible common
equity to tangible assets, return on average tangible common
equity, adjusted return on average tangible common equity, and
adjusted pre-tax pre-provision return on average tangible common
equity. Each of these non-GAAP metrics excludes the impact of
goodwill and other intangibles. Adjusted tangible common equity and
adjusted tangible book value also exclude the impact of net
accumulated other comprehensive (loss) income.
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
other intangibles, 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 similar or with
names similar to the non-GAAP financial measures the Company has
discussed herein when comparing such non-GAAP financial measures.
See the corresponding non-GAAP reconciliation tables below in this
Earnings Release for additional discussion and reconciliation of
these measures to the most directly comparable GAAP financial
measures.
Financial Summary and Key
Metrics
(Unaudited)
(In Thousands, Except Share Data
and %)
2022
2021
Third Quarter
Second Quarter
Third Quarter
Statement of Income Data
Total interest income
$
128,483
$
110,214
$
96,665
Total interest expense
17,099
8,043
8,189
Net interest income
111,384
102,171
88,476
Total noninterest income
22,592
33,214
59,006
Total noninterest expense
81,847
96,997
95,007
Earnings before income taxes and
provisions for credit losses
52,129
38,388
52,475
Provisions for credit losses
11,367
12,318
(2,531
)
Income tax expense
8,931
6,717
9,716
Net income applicable to noncontrolling
interest
—
8
—
Net income applicable to FB Financial
Corporation(a)
$
31,831
$
19,345
$
45,290
Net interest income (tax-equivalent
basis)
$
112,145
$
102,926
$
89,230
Adjusted net income*
$
32,117
$
30,051
$
42,699
Adjusted pre-tax, pre-provision
earnings*
$
52,516
$
52,856
$
51,240
Per Common Share
Diluted net income
$
0.68
$
0.41
$
0.94
Adjusted diluted net income*
0.68
0.64
0.89
Book value
27.30
28.15
29.36
Tangible book value*
21.85
22.67
23.90
Adjusted tangible book value*
25.84
25.24
23.63
Weighted average number of shares
outstanding - fully diluted
47,024,611
47,211,650
48,007,147
Period-end number of shares
46,926,377
46,881,896
47,707,634
Selected Balance Sheet Data
Cash and cash equivalents
$
618,290
$
872,861
$
1,324,564
Loans held for investment (HFI)
9,105,016
8,624,337
7,294,674
Allowance for credit losses(b)
(134,476
)
(126,272
)
(139,446
)
Mortgage loans held for sale, at fair
value(c)
97,011
222,400
755,210
Commercial loans held for sale, at fair
value
33,722
37,815
100,496
Investment securities, at fair value
1,485,133
1,621,344
1,577,337
Other real estate owned, net
5,919
9,398
10,015
Total assets
12,258,082
12,193,862
11,810,290
Interest-bearing deposits
7,039,568
7,647,782
7,462,349
Noninterest-bearing deposits
2,966,514
2,895,520
2,609,569
Total deposits
10,006,082
10,543,302
10,071,918
Borrowings
722,940
160,400
172,710
Total common shareholders' equity
1,281,161
1,319,852
1,400,913
Selected Ratios
Return on average:
Assets
1.05
%
0.62
%
1.51
%
Shareholders' equity
9.45
%
5.74
%
12.9
%
Tangible common equity*
11.7
%
7.09
%
15.9
%
Average shareholders' equity to average
assets
11.1
%
10.9
%
11.7
%
Net interest margin (NIM) (tax-equivalent
basis)
3.93
%
3.52
%
3.20
%
Efficiency ratio (GAAP)
61.1
%
71.6
%
64.4
%
Core efficiency ratio (tax-equivalent
basis)*
60.7
%
61.1
%
64.7
%
Loans HFI to deposit ratio
91.0
%
81.8
%
72.4
%
Total loans to deposit ratio
92.3
%
84.3
%
80.9
%
Noninterest-bearing deposits to total
deposits
29.6
%
27.5
%
25.9
%
Yield on interest-earning assets
4.53
%
3.80
%
3.49
%
Cost of interest-bearing liabilities
0.90
%
0.40
%
0.42
%
Cost of total deposits
0.52
%
0.25
%
0.26
%
Credit Quality Ratios
Allowance for credit losses as a
percentage of loans HFI(b)
1.48
%
1.46
%
1.91
%
Net (recoveries) charge-offs as a
percentage of average loans HFI
0.00
%
0.09
%
0.13
%
Nonperforming loans HFI as a percentage of
total loans HFI
0.47
%
0.51
%
0.59
%
Nonperforming assets as a percentage of
total assets(c)
0.62
%
0.46
%
0.50
%
Preliminary capital ratios
(Consolidated)
Total common shareholders' equity to
assets
10.5
%
10.8
%
11.9
%
Tangible common equity to tangible
assets*
8.54
%
8.90
%
9.87
%
Tier 1 capital (to average assets)
10.7
%
10.2
%
10.4
%
Tier 1 capital (to risk-weighted
assets)(d)
11.2
%
11.8
%
12.7
%
Total capital (to risk-weighted
assets)(d)
13.2
%
13.6
%
14.6
%
Common equity Tier 1 (to risk-weighted
assets) (CET1)(d)
10.9
%
11.5
%
12.4
%
(a) Includes a dividend declared and paid by the Company's REIT
subsidiary to minority interest preferred shareholders in the
second quarter of 2022. (b) Excludes reserve for credit losses on
unfunded commitments of $23,577, $20,399, and $13,503 recorded in
accrued expenses and other liabilities at September 30, 2022, June
30, 2022, and September 30, 2021, respectively. (c) Includes
optional right to repurchase seriously delinquent GNMA loans
previously sold as of September 30, 2022. (d) We calculate our
risk-weighted assets using the standardized method of the Basel III
Framework. *These measures are considered non-GAAP financial
measures. For a reconciliation and discussion of this non-GAAP
measure, see "GAAP Reconciliation and Use of non-GAAP Financial
Measures" and the corresponding non-GAAP reconciliation tables in
this Earnings Release dated October 17, 2022.
Non-GAAP
Reconciliation
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data
and %)
2022
2021
Adjusted net income
Third Quarter
Second Quarter
Third Quarter
Income before income taxes
$
40,762
$
26,070
$
55,006
Plus mortgage restructuring expenses
—
12,458
—
Less other non-operating items(1)
(387
)
(2,010
)
1,235
Adjusted pre-tax net income
41,149
40,538
53,771
Adjusted income tax expense(2)
9,032
10,487
11,072
Adjusted net income
$
32,117
$
30,051
$
42,699
Weighted average common shares outstanding
- fully diluted
47,024,611
47,211,650
48,007,147
Adjusted diluted earnings per common
share
Diluted earnings per common
share
$
0.68
$
0.41
$
0.94
Plus mortgage restructuring expenses
—
0.27
—
Less other non-operating items
—
(0.04
)
0.02
Less tax effect
—
0.08
0.03
Adjusted diluted earnings per common
share
$
0.68
$
0.64
$
0.89
(1) 3Q22 includes a $387 loss from change
in fair value of commercial loans held for sale acquired from
Franklin; 2Q22 includes a $2,010 loss from change in fair value of
commercial loans held for sale acquired from Franklin; 3Q21
includes a $740 gain from change in fair value of commercial loans
held for sale acquired from Franklin, a $1,510 loss on swap, and a
gain of $2,005 from sales other real estate owned.
(2) 3Q21 includes a $1,678 tax benefit
related to a change in the value of a net operating loss tax asset
related to Franklin.
Nine Months Ended September
30,
Full Year
Adjusted net income
2022
2021
2021
Income before income taxes
$
111,381
$
180,210
$
243,051
Plus mortgage restructuring and offering
expenses
12,458
605
605
Less other non-operating items(1)
(2,571
)
2,533
11,032
Adjusted pre-tax net income
126,410
178,282
232,624
Adjusted income tax expense(2)
28,878
39,762
51,553
Adjusted net income
$
97,532
$
138,520
$
181,071
Weighted average common shares outstanding
- fully diluted
47,315,100
47,983,494
47,955,880
Adjusted diluted earnings per
share
Diluted earnings per common
share
$
1.83
$
2.95
$
3.97
Plus mortgage restructuring and offering
expenses
0.26
0.01
0.01
Less other non-operating items
(0.05
)
0.05
0.22
Less tax effect
0.08
0.02
(0.02
)
Adjusted diluted earnings per common
share
$
2.06
$
2.89
$
3.78
(1) 3QYTD22 includes a $2,571 loss from
change in fair value of commercial loans held for sale acquired
from Franklin; 3QYTD21 includes a $1,251 gain from change in fair
value on commercial loans held for sale acquired from Franklin, a
loss on swap cancellation of $1,510, a $2,005 gain on other real
estate owned and a $787 gain from lease terminations; 2021 includes
a $11,172 gain from change in fair value on commercial loans held
for sale acquired from Franklin, a loss on swap cancellation of
$1,510, a $2,005 gain on other real estate owned, a $787 gain from
lease terminations and $1,422 related to certain nonrecurring
charitable contributions.
(2) 3QYTD21 includes a $1,678 tax benefit
related to a change in the value of a net operating loss tax asset
related to Franklin.
2022
2021
Adjusted pre-tax pre-provision
earnings
Third Quarter
Second Quarter
Third Quarter
Income before income taxes
$
40,762
$
26,070
$
55,006
Plus provisions for credit losses
11,367
12,318
(2,531
)
Pre-tax pre-provision earnings
52,129
38,388
52,475
Plus mortgage restructuring expenses
—
12,458
—
Less other non-operating items
(387
)
(2,010
)
1,235
Adjusted pre-tax pre-provision
earnings
$
52,516
$
52,856
$
51,240
Non-GAAP
Reconciliation
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data
and %)
2022
2021
Core efficiency ratio (tax-equivalent
basis)
Third Quarter
Second Quarter
Third Quarter
Total noninterest expense
$
81,847
$
96,997
$
95,007
Less mortgage restructuring expenses
—
12,458
—
Core noninterest expense
$
81,847
$
84,539
$
95,007
Net interest income (tax-equivalent
basis)
$
112,145
$
102,926
$
89,230
Total noninterest income
22,592
33,214
59,006
Less (loss) gain on change in fair value
on commercial loans held for sale
(387
)
(2,010
)
740
Less gain (loss) on sales or write-downs
of other real estate owned and other
assets
429
(8
)
2,182
Less (loss) gain from securities, net
(140
)
(109
)
51
Core noninterest income
22,690
35,341
57,543
Core revenue
$
134,835
$
138,267
$
146,773
Efficiency ratio (GAAP)(a)
61.1
%
71.6
%
64.4
%
Core efficiency ratio (tax-equivalent
basis)
60.7
%
61.1
%
64.7
%
(a) Efficiency ratio (GAAP) is calculated
by dividing reported noninterest expense by reported total
revenue
2022
2021
Banking segment core efficiency ratio
(tax equivalent)
Third Quarter
Second Quarter
Third Quarter
Core noninterest expense
$
81,847
$
84,539
$
95,007
Less Core Mortgage segment noninterest
expense
15,961
25,219
36,230
Banking segment core noninterest
expense
$
65,886
$
59,320
$
58,777
Banking segment net interest income (tax
equivalent basis)
$
112,145
$
102,926
$
89,330
Core noninterest income
22,690
35,341
57,543
Less Mortgage segment core noninterest
income
12,384
22,559
45,384
Banking segment core noninterest
income
10,306
12,782
12,159
Core revenue
134,835
138,267
146,773
Less Mortgage segment core total
revenue
12,384
22,559
45,284
Banking segment core total
revenue
$
122,451
$
115,708
$
101,489
Banking segment core efficiency ratio
(tax-equivalent basis)
53.8
%
51.3
%
57.9
%
Mortgage segment core efficiency ratio
(tax equivalent)
Mortgage segment noninterest expense
$
15,961
$
37,677
$
36,230
Less Mortgage restructuring expense
—
12,458
—
Mortgage segment core noninterest
expense
$
15,961
$
25,219
$
36,230
Mortgage segment net interest income
—
—
(100
)
Mortgage segment noninterest income
12,299
22,515
45,183
Less loss on sales or write-downs of other
real estate owned
(85
)
(44
)
(201
)
Mortgage segment core noninterest
income
12,384
22,559
45,384
Mortgage segment core total
revenue
$
12,384
$
22,559
$
45,284
Mortgage segment core efficiency ratio
(tax-equivalent basis)
128.9
%
111.8
%
80.0
%
Non-GAAP
Reconciliation
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data
and %)
2022
2021
Adjusted Banking segment pre-tax
pre-provision earnings
Second Quarter
First Quarter
Second Quarter
Banking segment pre-tax net
contribution
$
44,424
$
41,232
$
46,153
Plus provisions for credit losses
11,367
12,318
(2,531
)
Banking segment pre-tax pre-provision
earnings
55,791
53,550
43,622
Less other non-operating items
(387
)
(2,010
)
1,235
Adjusted Banking segment pre-tax
pre-provision earnings
$
56,178
$
55,560
$
42,387
2022
2021
Adjusted Mortgage segment (loss)
contribution
Third Quarter
Second Quarter
Third Quarter
Mortgage segment pre-tax net (loss)
contribution
$
(3,662
)
$
(15,162
)
$
8,853
Plus mortgage restructuring expense
—
12,458
—
Adjusted Mortgage segment pre-tax net
(loss) contribution
$
(3,662
)
$
(2,704
)
$
8,853
Pre-tax pre-provision earnings
$
52,129
$
38,388
$
52,475
Mortgage segment pre-tax pre-provision net
contribution to total pre-tax pre-provision earnings
N/A
N/A
16.9
%
Adjusted pre-tax pre-provision
earnings
$
52,516
$
52,856
$
51,240
Adjusted Mortgage segment pre-tax
pre-provision net contribution to total adjusted pre-tax
pre-provision earnings
N/A
N/A
17.3
%
2022
2021
Tangible assets and equity
Third Quarter
Second Quarter
Third Quarter
Tangible assets
Total assets
$
12,258,082
$
12,193,862
$
11,810,290
Less goodwill
242,561
242,561
242,561
Less intangibles, net
13,407
14,515
18,248
Tangible assets
$
12,002,114
$
11,936,786
$
11,549,481
Tangible common equity
Total common shareholders' equity
$
1,281,161
$
1,319,852
$
1,400,913
Less goodwill
242,561
242,561
242,561
Less intangibles, net
13,407
14,515
18,248
Tangible common equity
$
1,025,193
$
1,062,776
$
1,140,104
Less accumulated other comprehensive
(loss) income, net
(187,440
)
(120,495
)
12,637
Adjusted tangible common equity
1,212,633
1,183,271
1,127,467
Common shares outstanding
46,926,377
46,881,896
47,707,634
Book value per common share
$
27.30
$
28.15
$
29.36
Tangible book value per common
share
Tangible book value per common
share
$
21.85
$
22.67
$
23.90
Adjusted tangible book value per common
share
$
25.84
$
25.24
$
23.63
Total common shareholders' equity to total
assets
10.5
%
10.8
%
11.9
%
Tangible common equity to tangible
assets
8.54
%
8.90
%
9.87
%
Non-GAAP
Reconciliation
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data
and %)
2022
2021
Return on average tangible common
equity
Third Quarter
Second Quarter
Third Quarter
Average common shareholders' equity
$
1,336,143
$
1,352,701
$
1,389,201
Less average goodwill
242,561
242,561
242,561
Less average intangibles, net
13,953
15,144
18,950
Average tangible common equity
$
1,079,629
$
1,094,996
$
1,127,690
Net income
$
31,831
$
19,345
$
45,290
Return on average common equity
9.45
%
5.74
%
12.9
%
Return on average tangible common
equity
11.7
%
7.09
%
15.9
%
Adjusted net income
$
32,117
$
30,051
$
42,699
Adjusted return on average tangible
common equity
11.8
%
11.0
%
15.0
%
Adjusted pre-tax pre-provision
earnings
$
52,516
$
52,856
$
51,240
Adjusted pre-tax pre-provision return
on average tangible common equity
19.3
%
19.4
%
18.0
%
2022
2021
Adjusted return on average assets and
equity
Third Quarter
Second Quarter
Third Quarter
Net income
$
31,831
$
19,345
$
45,290
Average assets
12,038,115
12,427,479
11,915,062
Average common equity
1,336,143
1,352,701
1,389,201
Return on average assets
1.05
%
0.62
%
1.51
%
Return on average common equity
9.45
%
5.74
%
12.9
%
Adjusted net income
$
32,117
$
30,051
$
42,699
Adjusted return on average
assets
1.06
%
0.97
%
1.42
%
Adjusted return on average common
equity
9.54
%
8.91
%
12.2
%
Adjusted pre-tax pre-provision
earnings
$
52,516
$
52,856
$
51,240
Adjusted pre-tax pre-provision return
on average assets
1.73
%
1.71
%
1.71
%
Adjusted pre-tax pre-provision return
on average common equity
15.6
%
15.7
%
14.6
%
(FBK - ER)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221017005860/en/
MEDIA CONTACT: Jeanie M. Rittenberry 615-313-8328
jrittenberry@firstbankonline.com www.firstbankonline.com
FINANCIAL CONTACT: Michael Mettee 615-564-1212
mmettee@firstbankonline.com
investorrelations@firstbankonline.com
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