Mergers and acquisitions:

Franklin Financial Network, Inc.

On January 21, 2020, the Company entered into a definitive merger agreement with Franklin Financial Network, Inc ("Franklin"). pursuant to which Franklin will be merged with and and into the Company. Franklin has 15 branches and approximately $3.90 billion in total assets, $2.80 billion in loans, and $3.20 billion in deposits as of December 31, 2019. According to the terms of the merger agreement, Franklin shareholders will receive 0.9650 shares of FB Financial Corporation's common stock and $2.00 in cash for each share of Franklin stock. Based on the Company's closing price on the New York Stock Exchange of $38.23 per share as of January 21, 2020, the implied transaction value is approximately $602,000. The merger is expected to close in the third quarter of 2020 and is subject to regulatory approvals, approval by the Company's and Franklin's shareholders and other customary closing conditions.

FNB Financial Corp. merger

On February 14, 2020, the Company completed its previously announced acquisition of FNB Financial Corp. and its wholly owned subsidiary, Farmers National Bank of Scottsville (collectively, "Farmers National"). Following the acquisition, Farmers National was merged into the Company with FB Financial Corporation continuing as the surviving entity. Prior to closing, Farmers National operated five branches and reported total assets of $255,172, loans of $178,603 and deposits of $205,957 as of December 31, 2019. FNB Financial Corp. shareholders received 954,797 shares of FBK common stock as consideration in connection with the merger, in addition to approximately $15,000 in cash consideration. Based on the closing price of the Company's common stock on the New York Stock Exchange of $36.70 on February 14, 2020, the merger consideration represented approximately $50,042 in aggregate consideration. The Company is currently in the process of determining the approximate fair value of the net assets acquired and will include preliminary purchase accounting estimates in Form 10-Q for the quarterly period ended March 31, 2020.

Atlantic Capital Bank, N.A. branch acquisition

On April 5, 2019, the Bank completed its previously-announced branch acquisition to purchase 11 Tennessee and three Georgia branch locations (the "Branches") from Atlantic Capital Bank, N.A., a national banking association and a wholly owned subsidiary of Atlantic Capital Bancshares, Inc. (collectively, “Atlantic Capital”) in a transaction valued at $36,790, further increasing market share in existing markets and expanding the Company's footprint into new locations. Upon consummation, the Branches were merged with and into FirstBank, consolidating three of the purchased branches across the existing bank footprint. Under the terms of the agreement, the Bank assumed $588,877 in deposits for a premium of 6.25% and acquired $374,399 in loans at 99.32% of principal outstanding.

The acquisition of the Branches was accounted for in accordance with FASB ASC Topic 805 "Business Combinations." Accordingly, the assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the acquisition date. For income tax purposes, the transaction was treated as an asset purchase. As such, the values of assets and liabilities are the same for both financial reporting and income tax purposes; therefore, no deferred taxes were recorded at the date of acquisition. Additionally, this treatment allows for the deductibility of recorded intangibles for income tax purposes over 15 years. Goodwill of $31,961 recorded in connection with the transaction resulted from the ongoing business contribution of the Branches. Also, goodwill represents anticipated synergies arising from the combination of certain operational areas of the Branches and the Company. Goodwill is included in the Banking segment as all of the operations resulting from the Branches are in alignment with the Company's core banking business.

The Company incurred $4,778 in merger expenses during the year ended December 31, 2019 in connection with this transaction. These expenses are primarily comprised of professional services and employee-related costs in addition to branch closings and conversion and integration costs.

As of December 31, 2019, the Company finalized its valuation of all assets acquired and liabilities assumed, resulting in insignificant changes to preliminary purchase accounting adjustments. The following tables present the final fair values of assets acquired and liabilities assumed as of the April 5, 2019 acquisition date and an allocation of the consideration to net assets acquired:



	As of April 5, 2019
	As Recorded by FB Financial Corporation⁽¹⁾
Assets
Cash and cash equivalents⁽¹⁾	$	207,822
Loans, net of fair value adjustments	374,399
Premises and equipment	9,650
Operating lease right-of-use assets	4,133
Core deposit intangible	10,760
Accrued interest and other assets	1,272
Total assets	$	608,036
Liabilities
Deposits
Noninterest-bearing	$	118,405
Interest-bearing checking	112,225
Money markey and savings	211,135
Customer time deposits	147,112
Total deposits	588,877
Customer repurchase agreements	9,572
Operating lease liabilities	4,133
Accrued expenses and other liabilities	625
Total liabilities	603,207
Total net assets acquired	$	4,829

(1) Cash and cash equivalents were reduced in settlement by the deposit premium paid of $36,790 to reflect net cash received of $171,032.



Consideration:
Deposit premium	$	36,790
Preliminary allocation of consideration:
Fair value of net assets acquired	$	4,829
Goodwill	31,961
Total consideration	$	36,790

The following table presents the fair value of acquired purchased credit impaired loans accounted for in accordance with ASC 310-30 "Loans and Debt Securities Acquired with Deteriorated Credit Quality" from the Atlantic Capital branch acquisition as of the acquisition date:



	April 5, 2019
Contractually-required principal and interest	$	11,949
Nonaccretable difference	2,200
Best estimate of contractual cash flows expected to be collected	9,749
Accretable yield	1,167
Fair value	$	8,582

The following unaudited pro forma condensed consolidated financial information presents the results of operations for the year ended December 31, 2019 and 2018 as though the merger had been completed as of January 1, 2018. The unaudited estimated pro forma information combines the historical results of the Branches with the Company’s historical consolidated results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the periods presented. Merger expenses are reflected in the periods they were incurred. The pro forma information is not indicative of what would have occurred had the acquisition taken place on January 1, 2018 and does not include the effect of all cost-saving or revenue-enhancing strategies.



	Year ended December 31,
	2019		2018
Net interest income	$	229,607	$	220,269
Total revenues	$	365,794	$	354,258
Net income	$	79,923	$	78,762

The Company's operating results for the year ended December 31, 2019 include the operating results of the acquired assets and assumed liabilities of the Branches subsequent to the acquisition date. Due to the timing of the data conversion and the integration of operations of the Branches onto the Company's existing operations, historical reporting of the acquired Branches is impracticable, and therefore, disclosure of the amounts of revenue and expenses attributable to the acquired Branches since the acquisition date are not available.

Clayton Bank and Trust and American City Bank

On July 31, 2017, the Bank completed its mergers with Clayton Bank and Trust ("CBT") and American City Bank ("ACB" and together with CBT, the "Clayton Banks"), pursuant to the Stock Purchase Agreement with Clayton HC, Inc, a Tennessee corporation ("Seller"), and James L. Clayton, the majority shareholder of Seller, dated February 8, 2017, as amended on May 26, 2017, with a purchase price of approximately $236,484. The Company issued 1,521,200 shares of common stock and paid cash of $184,200 to purchase all outstanding shares of Clayton Banks. At closing, the Clayton Banks merged with and into FirstBank, with FirstBank continuing as the surviving banking entity. Prior to the merger, Clayton Banks operated 18 banking locations across Tennessee. The merger with the Clayton Banks has allowed the Company to further its strategic initiatives by expanding its geographic footprint in Knoxville and other Tennessee markets and accelerates the growth of the Company’s Banking segment.

Goodwill of $90,323 recorded in connection with the transaction resulted primarily from anticipated synergies arising from the combination of certain operational areas of the Clayton Banks and the Company as well as the purchase premium inherent to buying a complete and successful banking operation. Goodwill is included in the Banking segment as substantially all of the operations resulting from the Clayton Banks merger is included in the Banking segment.

In connection with the transaction, the Company incurred $19,034 in merger and conversion expenses during the year ended December 31, 2017. This amount includes $10,000 contributed to a charitable foundation established to invest in the communities across the markets of the Clayton Banks.

For income tax purposes, the merger with the Clayton Banks was treated as an asset purchase. As an asset purchase for income tax purposes, the value of assets and liabilities for the Clayton Banks are the same for both financial reporting and income tax purposes; therefore, no deferred taxes were recorded at the date of acquisition. Additionally, this treatment allows for the deductibility of the goodwill and core deposit intangible for income tax purposes over 15 years.

The Company accounted for the Clayton Banks transaction under the acquisition method under ASC Topic 805. Accordingly, the fair value of the assets acquired and liabilities assumed along with the resulting goodwill was recorded as of the date of the merger. The Company’s operating results for 2017 include the operating results of the acquired assets and assumed liabilities of the Clayton Banks subsequent to the acquisition date.

As of December 31, 2017, the Company finalized its valuation of all assets acquired and liabilities assumed, resulting in no material changes to preliminary purchase accounting adjustments. The following tables present the final estimated fair value of net assets acquired as of the July 31, 2017 acquisition date and the consideration paid and an allocation of the purchase price to net assets acquired:



	As of July 31, 2017
	As Recorded by FB Financial Corporation⁽¹⁾
Assets
Cash and cash equivalents	$	49,059
Investment securities	59,493
FHLB stock	3,409
Loans, net of fair value adjustments	1,059,728
Premises and equipment	18,866
Other real estate owned	6,888
Core deposit and other intangibles	12,334
Other assets	5,978
Total assets	$	1,215,755
Liabilities
Interest-bearing deposits	$	670,054
Noninterest-bearing deposits	309,464
Borrowings	84,831
Accrued expenses and other liabilities	5,245
Total liabilities	$	1,069,594
Net assets acquired (excluding goodwill recognized)	$	146,161



Purchase price:
Equity consideration
Common stock issued	1,521,200
Price per share as of July 31, 2017	$	34.37
Total equity consideration			$	52,284
Cash consideration			184,200		⁽²⁾
Total consideration paid			$	236,484
Preliminary allocation of consideration paid:
Fair value of net assets acquired including identifiable intangible assets			$	146,161
Goodwill			90,323
Total consideration paid			$	236,484

(1) Amounts include certain reclassifications of opening balances to conform to the Company's presentation.

(2) Amounts was deposited into an interest-bearing deposit account with the Bank in the name of the Seller as of July 31, 2017.

The following unaudited pro forma condensed consolidated financial information presents the results of operations for the

year ended December 31, 2017 as though the merger had been completed as of January 1, 2016. The unaudited estimated pro forma information combines the historical results of the Clayton Banks with the Company’s historical consolidated results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments including loan discount accretion, amortization of core deposit and other intangibles, and amortization of the discount on time deposits for the periods presented. The pro forma information is not indicative of what would have occurred had the acquisition taken place on January 1, 2016 and does not reflect any assumptions regarding cost-savings, revenue enhancements, provision for credit losses or asset dispositions. Actual revenues and earnings of the Clayton Banks since the merger date have not been disclosed as it is not practicable as the Clayton Banks were merged into the Company and separate financial information is not readily available.



	For the year ended,
		2017
Net interest income		$	192,633
Total revenues		$	336,404
Net income		$	75,659