EX-99.1 2 a4q22pressreleasetablesfor.htm EX-99.1 Document

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FB Financial Corporation Reports Fourth Quarter 2022 and Annual Results
Reports Q4 Diluted EPS of $0.81, Adjusted Diluted EPS of $0.85,
Annualized Q4 Deposit Growth of 33.7%
NASHVILLE, TENNESSEE—January 17, 2023-- FB Financial Corporation (the “Company”) (NYSE: FBK), parent company of FirstBank, reported net income of $38.1 million, or $0.81 per diluted common share, for the fourth quarter of 2022, compared to $0.68 in the previous quarter and $1.02 in the fourth quarter of last year. Adjusted net income was $40.0 million, or $0.85 per diluted common share, compared to $0.68 in the previous quarter and $0.89 in the fourth quarter of last year.
For the year ended December 31, 2022, the Company reported net income of $124.6 million, or $2.64 per diluted common share, compared to $190.3 million, or $3.97 per diluted common share, for the year ended December 31, 2021. Adjusted diluted earnings per common share were $2.91 and $3.78 for the years ended December 31, 2022 and 2021, respectively. The Company's book value per common share as of December 31, 2022, was $28.36 and the tangible book value ("TBV") per common share was $22.90.
The Company grew deposits to $10.9 billion (33.7% annualized), loans held for investment to $9.30 billion (8.42% annualized), total assets to $12.8 billion (19.1% annualized) and adjusted tangible book value per common share to $26.53 (10.6% annualized) during the fourth quarter of 2022 from the previous quarter. Net interest margin ("NIM") was 3.78% for the fourth quarter and Mortgage contributed a pre-tax loss of $4.2 million for the quarter compared to a pre-tax loss of $3.7 million in the previous quarter.
President and Chief Executive Officer, Christopher T. Holmes stated, “The Company performed well in our priority areas of liquidity, credit and capital, with strong performance metrics in each of those areas. Beyond those priorities, we were able to grow the Company with robust increases in deposits, loans and total assets. Our deposit growth of 33.7% annualized was the highlight of the quarter. As we head into 2023, we have positioned the Company for a tightening money supply, slower economic growth and intensifying competition."
20222021Annualized
(dollars in thousands, except per share data)Fourth QuarterThird QuarterFourth Quarter4Q22 / 3Q22
% Change		4Q22 / 4Q21
% Change
Balance Sheet Highlights
     Investment securities, at fair value$1,474,176 $1,485,133 $1,681,892 (2.93)%(12.4)%
     Mortgage loans held for sale, at fair value108,961 97,011 672,924 48.9 %(83.8)%
     Commercial loans held for sale, at fair value30,490 33,722 79,299 (38.0)%(61.6)%
     Loans held for investment (HFI)9,298,212 9,105,016 7,604,662 8.42 %22.3 %
     Allowance for credit losses(a)
134,192 134,476 125,559 (0.84)%6.88 %
     Total assets12,847,756 12,258,082 12,597,686 19.1 %1.99 %
     Interest-bearing deposits8,179,203 7,039,568 8,096,683 64.2 %1.02 %
     Noninterest-bearing deposits2,676,631 2,966,514 2,740,214 (38.8)%(2.32)%
         Mortgage escrow deposits75,612 140,768 127,617 (183.6)%(40.8)%
     Total deposits10,855,834 10,006,082 10,836,897 33.7 %0.17 %
     Borrowings415,677 722,940 171,778 (168.6)%142.0 %
     Total common shareholders' equity1,325,425 1,281,161 1,432,602 13.7 %(7.48)%
Book value per share$28.36 $27.30 $30.13 15.4 %(5.87)%
Total common shareholders' equity to total assets10.3 %10.5 %11.4 %
Tangible book value per common share*$22.90 $21.85 $24.67 19.1 %(7.17)%
Adjusted tangible book value per common share*$26.53 $25.84 $24.55 10.6 %8.07 %
Tangible common equity to tangible assets*8.50 %8.54 %9.51 %
* 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 January 17, 2023.
(a) Excludes reserve for credit losses on unfunded commitments of $22,969, $23,577, and $14,380 recorded in accrued expenses and other liabilities as of December 31, 2022, September 30, 2022, and December 31, 2021, respectively.
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FB Financial Corporation
Fourth Quarter 2022 Results
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20222021
(dollars in thousands, except share and per share data)Fourth QuarterThird QuarterFourth Quarter
Results of operations
Net interest income$110,498 $111,384 $89,755 
      NIM3.78 %3.93 %3.19 %
Provisions for credit losses$(456)$11,367 $(10,769)
Net charge-off ratio0.02 %0.00 %0.12 %
Noninterest income$17,469 $22,592 $53,219 
     Mortgage banking income$9,106 $12,384 $31,350 
Total revenue$127,967 $133,976 $142,974 
Noninterest expense$80,230 $81,847 $90,902 
Core noninterest expense*$80,230 $81,847 $89,480 
Efficiency ratio 62.7 %61.1 %63.6 %
      Core efficiency ratio*61.0 %60.7 %67.0 %
Adjusted pre-tax, pre-provision earnings*$50,299 $52,516 $43,573 
Adjusted Banking segment pre-tax, pre-provision earnings*$54,479 $56,178 $42,863 
Adjusted Mortgage segment pre-tax, pre-provision (loss) earnings*$(4,180)$(3,662)$710 
Net income applicable to FB Financial Corporation(1)
$38,143 $31,831 $48,827 
Diluted earnings per common share$0.81 $0.68 $1.02 
       Effective tax rate20.8 %21.9 %22.3 %
Adjusted net income*$40,045 $32,117 $42,551 
Adjusted diluted earnings per common share*$0.85 $0.68 $0.89 
Weighted average number of shares outstanding - fully diluted47,036,742 47,024,611 47,896,715 
Actual shares outstanding - period end46,737,912 46,926,377 47,549,241 
Returns on average:
     Assets ("ROAA")1.22 %1.05 %1.60 %
     Equity ("ROAE")11.7 %9.45 %13.7 %
     Tangible common equity ("ROATCE")*
14.6 %11.7 %16.8 %
* 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 January 17, 2023.
(1) Includes dividends declared and paid by the Company's REIT subsidiary to minority interest preferred shareholders in the fourth quarters of 2022 and 2021.
Balance Sheet and Net Interest Margin
The Company reported loan balances (HFI) of $9.30 billion at the end of the fourth quarter, an increase of $193.2 million, or 8.42% annualized, from the end of the previous quarter. This loan growth during the quarter of $193.2 million was after the Company sold $125.7 million in participations to other banks as part of its balance sheet management strategy. The contractual yield on loans increased to 5.45% in the fourth quarter of 2022 from 4.79% in the previous quarter.
Total deposits increased by $849.8 million in the fourth quarter to $10.9 billion. The increase in total deposits was driven by a focused initiative to increase deposits from new and existing customers. The Company's total cost of deposits increased during the quarter from the prior quarter by 68 basis points to 1.20%, and the cost of interest-bearing deposits increased to 1.67%. Noninterest-bearing deposits decreased to $2.68 billion during the quarter. The Company paid down higher cost Federal Home Loan Bank advances by $365.0 million at an average interest rate of 3.89% during the quarter.
The Company’s net interest income decreased on a tax equivalent basis to $111.3 million in the fourth quarter from $112.1 million in the prior quarter. The decrease was related to higher interest expense on deposits and a $2.42 million decrease in loan fees from the prior quarter. The Company's NIM was 3.78% for the fourth quarter, compared to 3.93% for the third quarter. The NIM decreased due to lower loan fees, higher cost of funds, and a lower ratio of loans to deposits as the Company shifted to an enhanced balance sheet liquidity profile.
Holmes continued, "Maintaining optionality in the Company's liquidity profile positions us well for additional balance sheet growth and maximizing profitability in future quarters."
Noninterest Income
Noninterest income was $17.5 million for the fourth quarter of 2022, compared to $22.6 million for the prior quarter and $53.2 million for the fourth quarter of 2021. Banking noninterest income was $8.3 million for the fourth quarter of 2022, compared to $10.3 million for the prior quarter and $21.9 million for the fourth quarter of 2021. Net changes in fair value in commercial loans
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FB Financial Corporation
Fourth Quarter 2022 Results
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held for sale during the fourth quarter of 2022 resulted in a loss, related to a single national syndicated credit, included in noninterest income of $2.6 million compared to a loss of $0.4 million in the prior quarter and a gain of $9.9 million in the fourth quarter of 2021.
Mortgage banking income decreased to $9.1 million in the fourth quarter, compared to $12.4 million in the third quarter of 2022 and $31.4 million in the fourth quarter of 2021. The Mortgage segment had a pre-tax net loss of $4.2 million for the fourth quarter of 2022 compared to a pre-tax net loss of $3.7 million during the previous quarter and a pre-tax contribution of $0.7 million for the fourth quarter of last year. Interest rate lock commitment volume totaled $281.7 million in the fourth quarter compared to $408.9 million in the third quarter of 2022 and $1.48 billion in the fourth quarter of 2021.
Chief Financial Officer, Michael Mettee noted, “Mortgage originations were expected to slow during the quarter due to normal seasonality, and results continue to be negatively impacted by volatile interest rates and the challenging housing market. The Mortgage segment continues to make adjustments to achieve sustainable operational profitability."
Expense Management
Noninterest expenses were $80.2 million for the fourth quarter of 2022, compared to $81.8 million for the prior quarter and $90.9 million for the fourth quarter of 2021. Banking segment noninterest expense was $66.9 million for the fourth quarter of 2022, compared to $65.9 million for the third quarter of 2022 and $60.1 million for the fourth quarter of 2021.
Mortgage segment noninterest expense was $13.3 million for the fourth quarter of 2022, compared to $16.0 million for the previous quarter and $30.8 million for the fourth quarter of 2021.
During the fourth quarter of 2022, the Company's core efficiency ratio was 61.0%, compared to 60.7% in the previous quarter and 67.0% for the fourth quarter of the prior year. The Banking segment core efficiency ratio for the fourth quarter was 54.7% versus the previous quarter of 53.8% and 57.5% in the fourth quarter of the previous year.
Mettee noted, “The Company's overall efficiency ratio was relatively stable for the quarter and the Banking segment moved slightly higher due to a modestly higher expense load and lower loan fees impacting top line revenue.”
Credit Quality
The Company recorded a net reversal in provisions for credit losses of $0.5 million in the fourth quarter of 2022. The negative provision expense was the net of a provision expense of $0.2 million related to loans held for investment and a negative provision expense of $0.6 million related to unfunded loan commitments. Unfunded construction loan commitments reduced by $57.7 million during the fourth quarter leading to the smaller allowance for credit losses ("ACL") and negative provision expense related to these unfunded commitments. The Company maintains an ACL of $134.2 million as of December 31, 2022, representing 1.44% of loans HFI.
The Company experienced net charge offs of $0.4 million in the fourth quarter of 2022, or 0.02% of average loans HFI, compared to net charge-offs to average loans HFI of 0.00% in the prior quarter. For the year-ended December 31, 2022, the Company experienced net charge-offs of $1.8 million, or 0.02% of average loans HFI, compared to 0.08% for the year-ended December 31, 2021.
The Company's nonperforming loans as a percent of loans HFI were 0.49% at the end of the fourth quarter of 2022 compared to 0.47% at the end of the previous quarter and 0.62% at the end of the fourth quarter of the previous year. Nonperforming assets as a percentage of total assets at the end of the fourth quarter were 0.68% compared to 0.62% as of the prior quarter-end. A single relationship from the commercial loans HFS portfolio from a previous acquisition contributed 7 bps of the increase in nonperforming assets in the fourth quarter.
Holmes commented, “Our loan portfolio continues to exhibit strong credit quality metrics. We had minimal charge-offs in the quarter, which is consistent with our results for the year, and our balance sheet is positioned for potential economic headwinds in 2023.”
Capital Strength
“We remain in a position of capital strength with a Common Equity Tier 1 ratio of 11.0% and tangible common equity to tangible assets of 8.50%. The Company is well positioned to deploy capital as opportunities arise,” commented Holmes.
Summary
Holmes summarized, "The fourth quarter results demonstrated our ability to raise customer deposits in a challenging environment. The growth resulted in net interest margin contraction, but positions the Company well as we move into 2023. We remain positioned for a range of economic outcomes by concentrating on liquidity, credit and capital in the near term. A focused discipline on these priorities will serve our customers, associates, communities, and shareholders well during the coming year."
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FB Financial Corporation
Fourth Quarter 2022 Results
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WEBCAST AND CONFERENCE CALL INFORMATION
FB Financial Corporation will host a conference call to discuss the Company's financial results on January 17, 2023, at 8:00 a.m. (Central Time). To listen to the call, participants should dial 1-877-883-0383 (confirmation code 9684791) approximately 10 minutes prior to the call. A telephonic replay will be available approximately two hours after the call through January 24, 2023, by dialing 1-877-344-7529 and entering confirmation code 3581055.
A live online broadcast of the Company’s quarterly conference call will be available online at https://event.choruscall.com/mediaframe/webcast.html?webcastid=hqRQfmWF. 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 with 82 full-service bank branches across Tennessee, Kentucky, Alabama and North Georgia, and mortgage offices across the Southeast. FirstBank has approximately $12.8 billion in total assets.
MEDIA CONTACT:
FINANCIAL CONTACT:
Jeanie M. RittenberryMichael Mettee
615-313-8328615-564-1212
jrittenberry@firstbankonline.commmettee@firstbankonline.com
www.firstbankonline.com
investorrelations@firstbankonline.com
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 January 17, 2023.
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
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Fourth Quarter 2022 Results
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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 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 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.
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FB Financial Corporation
Fourth Quarter 2022 Results
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Financial Summary and Key Metrics
(Unaudited)
(In Thousands, Except Share Data and %)
20222021
Fourth QuarterThird QuarterFourth Quarter
Statement of Income Data
Total interest income$147,598 $128,483 $97,219 
Total interest expense37,100 17,099 7,464 
Net interest income110,498 111,384 89,755 
Total noninterest income17,469 22,592 53,219 
Total noninterest expense80,230 81,847 90,902 
Earnings before income taxes and provisions for credit losses47,737 52,129 52,072 
Provisions for credit losses(456)11,367 (10,769)
Income tax expense10,042 8,931 14,006 
Net income applicable to noncontrolling interest8 — 8 
Net income applicable to FB Financial Corporation(a)
$38,143 $31,831 $48,827 
Net interest income (tax-equivalent basis)$111,279 $112,145 $90,537 
Adjusted net income*$40,045 $32,117 $42,551 
Adjusted pre-tax, pre-provision earnings*$50,299 $52,516 $43,573 
Per Common Share
Diluted net income$0.81 $0.68 $1.02 
Adjusted diluted net income*0.85 0.68 0.89 
Book value28.36 27.30 30.13 
Tangible book value*22.90 21.85 24.67 
Adjusted tangible book value*26.53 25.84 24.55 
Weighted average number of shares outstanding - fully diluted47,036,742 47,024,611 47,896,715 
Period-end number of shares 46,737,912 46,926,377 47,549,241 
Selected Balance Sheet Data
Cash and cash equivalents$1,027,052 $618,290 $1,797,740 
Loans held for investment (HFI)9,298,212 9,105,016 7,604,662 
Allowance for credit losses(b)
(134,192)(134,476)(125,559)
Mortgage loans held for sale, at fair value(c)
108,961 97,011 672,924 
Commercial loans held for sale, at fair value30,490 33,722 79,299 
Investment securities, at fair value1,474,176 1,485,133 1,681,892 
Other real estate owned, net5,794 5,919 9,777 
Total assets12,847,756 12,258,082 12,597,686 
Interest-bearing deposits8,179,203 7,039,568 8,096,683 
Noninterest-bearing deposits2,676,631 2,966,514 2,740,214 
Total deposits10,855,834 10,006,082 10,836,897 
Borrowings415,677 722,940 171,778 
Total common shareholders' equity1,325,425 1,281,161 1,432,602 
Selected Ratios
Return on average:
Assets1.22 %1.05 %1.60 %
Shareholders' equity11.7 %9.45 %13.7 %
Tangible common equity*14.6 %11.7 %16.8 %
Average shareholders' equity to average assets10.4 %11.1 %11.7 %
Net interest margin (tax-equivalent basis)3.78 %3.93 %3.19 %
Efficiency ratio (GAAP)62.7 %61.1 %63.6 %
Core efficiency ratio (tax-equivalent basis)*61.0 %60.7 %67.0 %
Loans HFI to deposit ratio85.7 %91.0 %70.2 %
Total loans to deposit ratio86.9 %92.3 %77.1 %
Noninterest-bearing deposits to total deposits 24.7 %29.6 %25.3 %
Yield on interest-earning assets5.04 %4.53 %3.45 %
Cost of interest-bearing liabilities1.84 %0.90 %0.38 %
Cost of total deposits1.20 %0.52 %0.22 %
Credit Quality Ratios
Allowance for credit losses as a percentage of loans HFI(b)
1.44 %1.48 %1.65 %
Net charge-offs as a percentage of average loans HFI0.02 %0.00 %0.12 %
Nonperforming loans HFI as a percentage of total loans HFI0.49 %0.47 %0.62 %
Nonperforming assets as a percentage of total assets(c)
0.68 %0.62 %0.50 %
Preliminary capital ratios (Consolidated)
Total common shareholders' equity to assets10.3 %10.5 %11.4 %
Tangible common equity to tangible assets*8.50 %8.54 %9.51 %
Tier 1 capital (to average assets)10.5 %10.7 %10.5 %
Tier 1 capital (to risk-weighted assets)(d)
11.3 %11.2 %12.6 %
Total capital (to risk-weighted assets)(d)
13.1 %13.0 %14.5 %
Common equity Tier 1 (to risk-weighted assets) (CET1)(d)
11.0 %10.9 %12.3 %
(a) Includes dividends declared and paid by the Company's REIT subsidiary to minority interest preferred shareholders in the fourth quarter of 2022 and the fourth quarter of 2021.
(b) Excludes reserve for credit losses on unfunded commitments of $22,969, $23,577, and $14,380 recorded in accrued expenses and other liabilities at December 31, 2022, September 30, 2022, and December 31, 2021, respectively.
(c) Includes optional right to repurchase seriously delinquent GNMA loans previously sold of $26,211 and $26,485 as of December 31, 2022 and September 30, 2022, respectively.
(d) Risk-weighted assets are calculated 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 January 17, 2023.
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Fourth Quarter 2022 Results
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Non-GAAP Reconciliation
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
20222021
Adjusted net incomeFourth QuarterThird QuarterFourth Quarter
Income before income taxes$48,193 $40,762 $62,841 
Less other non-operating items(1)
(2,562)(387)8,499 
Adjusted pre-tax net income50,755 41,149 54,342 
Adjusted income tax expense10,710 9,032 11,791 
Adjusted net income$40,045 $32,117 $42,551 
Weighted average common shares outstanding - fully diluted47,036,742 47,024,611 47,896,715 
Adjusted diluted earnings per common share
Diluted earnings per common share$0.81 $0.68 $1.02 
Less other non-operating items(0.05)— 0.18 
Less tax effect0.01 — (0.05)
Adjusted diluted earnings per common share $0.85 $0.68 $0.89 
(1) 4Q22 includes a $2,562 loss from change in fair value of commercial loans held for sale acquired from Franklin; 3Q22 includes a $387 loss from change in fair value of commercial loans held for sale acquired from Franklin; 4Q21 includes a $9,921 gain from change in fair value of commercial loans held for sale acquired from Franklin and $1,422 related to certain nonrecurring charitable contributions.
Adjusted net income202220212020
Income before income taxes$159,574 $243,051 $82,461 
Plus mortgage restructuring and offering expenses12,458 605 34,879 
Plus initial provision for credit losses on acquired loans and unfunded commitments— — 66,136 
Less other non-operating items(1)
(5,133)11,032 (4,400)
Adjusted pre-tax net income177,165 232,624 187,876 
Adjusted income tax expense(2)
39,587 51,553 45,944 
Adjusted net income$137,578 $181,071 $141,932 
Weighted average common shares outstanding - fully diluted47,239,791 47,955,880 38,099,744 
Adjusted diluted earnings per share
Diluted earnings per common share$2.64 $3.97 $1.67 
Plus mortgage restructuring and offering expenses0.26 0.01 0.92 
Plus initial provision for credit losses on acquired loans and unfunded commitments— — 1.74 
Less other non-operating items(0.11)0.22 (0.11)
Less tax effect0.10 (0.02)0.71 
Adjusted diluted earnings per common share$2.91 $3.78 $3.73 
(1) 2022 includes a $5,133 loss from change in fair value of commercial loans held for sale acquired from Franklin; 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) 2021 includes a $1,678 tax benefit related to a change in the value of a net operating loss tax asset related to Franklin.

20222021
Adjusted pre-tax pre-provision earningsFourth QuarterThird QuarterFourth Quarter
Income before income taxes$48,193 $40,762 $62,841 
Plus provisions for credit losses(456)11,367 (10,769)
Pre-tax pre-provision earnings47,737 52,129 52,072 
Less other non-operating items(2,562)(387)8,499 
Adjusted pre-tax pre-provision earnings$50,299 $52,516 $43,573 
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FB Financial Corporation
Fourth Quarter 2022 Results
Page 8
Non-GAAP Reconciliation
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
20222021
Core efficiency ratio (tax-equivalent basis)Fourth QuarterThird QuarterFourth Quarter
Total noninterest expense$80,230 $81,847 $90,902 
Less certain charitable contributions— — 1,422 
Core noninterest expense$80,230 $81,847 $89,480 
Net interest income (tax-equivalent basis)$111,279 $112,145 $90,537 
Total noninterest income17,469 22,592 53,219 
   Less (loss) gain on change in fair value on commercial loans held for sale(2,562)(387)9,921 
   Less (loss) gain on sales or write-downs of other real estate owned and other
      assets
(252)429 187 
 Less gain (loss) from securities, net25 (140)46 
Core noninterest income20,258 22,690 43,065 
Core revenue$131,537 $134,835 $133,602 
Efficiency ratio (GAAP)(a)
62.7 %61.1 %63.6 %
Core efficiency ratio (tax-equivalent basis)61.0 %60.7 %67.0 %
(a) Efficiency ratio (GAAP) is calculated by dividing reported noninterest expense by reported total revenue

20222021
Banking segment core efficiency ratio (tax equivalent)Fourth QuarterThird QuarterFourth Quarter
Core noninterest expense$80,230 $81,847 $89,480 
  Less Mortgage segment noninterest expense13,304 15,961 30,798 
Banking segment core noninterest expense$66,926 $65,886 $58,682 
Banking segment net interest income (tax equivalent basis)$111,279 $112,145 $90,398 
Core noninterest income20,258 22,690 43,065 
Less Mortgage segment core noninterest income9,148 12,384 31,350 
Banking segment core noninterest income11,110 10,306 11,715 
Core revenue131,537 134,835 133,602 
  Less Mortgage segment core total revenue9,148 12,384 31,489 
Banking segment core total revenue$122,389 $122,451 $102,113 
Banking segment core efficiency ratio (tax-equivalent basis)54.7 %53.8 %57.5 %
Mortgage segment core efficiency ratio (tax equivalent)
Mortgage segment noninterest expense$13,304 $15,961 $30,798 
Mortgage segment net interest income— — 139 
Mortgage segment noninterest income9,124 12,299 31,369 
  Less (loss) gain on sales or write-downs of other real estate owned(24)(85)19 
Mortgage segment core noninterest income9,148 12,384 31,350 
Mortgage segment core total revenue$9,148 $12,384 $31,489 
Mortgage segment core efficiency ratio (tax-equivalent basis)145.4 %128.9 %97.8 %
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FB Financial Corporation
Fourth Quarter 2022 Results
Page 9
Non-GAAP Reconciliation
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
20222021
Adjusted Banking segment pre-tax pre-provision earningsFourth QuarterThird QuarterFourth Quarter
Banking segment pre-tax net contribution$52,373 $44,424 $62,131 
Plus provisions for credit losses(456)11,367 (10,769)
Banking segment pre-tax pre-provision earnings51,917 55,791 51,362 
Less other non-operating items(2,562)(387)8,499 
Adjusted Banking segment pre-tax pre-provision earnings$54,479 $56,178 $42,863 
20222021
Tangible assets and equityFourth QuarterThird QuarterFourth Quarter
Tangible assets
Total assets$12,847,756 $12,258,082 $12,597,686 
Less goodwill242,561 242,561 242,561 
Less intangibles, net12,368 13,407 16,953 
Tangible assets$12,592,827 $12,002,114 $12,338,172 
Tangible common equity
Total common shareholders' equity$1,325,425 $1,281,161 $1,432,602 
Less goodwill242,561 242,561 242,561 
Less intangibles, net12,368 13,407 16,953 
Tangible common equity$1,070,496 $1,025,193 $1,173,088 
Less accumulated other comprehensive (loss) income, net(169,433)(187,440)5,858 
Adjusted tangible common equity1,239,929 1,212,633 1,167,230 
Common shares outstanding46,737,912 46,926,377 47,549,241 
Book value per common share$28.36 $27.30 $30.13 
Tangible book value per common share
 		$22.90 $21.85 $24.67 
Adjusted tangible book value per common share$26.53 $25.84 $24.55 
Total common shareholders' equity to total assets10.3 %10.5 %11.4 %
Tangible common equity to tangible assets8.50 %8.54 %9.51 %
Non-GAAP Reconciliation
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
20222021
Return on average tangible common equityFourth QuarterThird QuarterFourth Quarter
Average common shareholders' equity$1,294,758 $1,336,143 $1,411,987 
Less average goodwill242,561 242,561 242,561 
Less average intangibles, net12,865 13,953 17,580 
Average tangible common equity$1,039,332 $1,079,629 $1,151,846 
Net income $38,143 $31,831 $48,827 
Return on average common equity 11.7 %9.45 %13.7 %
Return on average tangible common equity14.6 %11.7 %16.8 %
Adjusted net income$40,045 $32,117 $42,551 
Adjusted return on average tangible common equity15.3 %11.8 %14.7 %
Adjusted pre-tax pre-provision earnings$50,299 $52,516 $43,573 
Adjusted pre-tax pre-provision return on average tangible common equity19.2 %19.3 %15.0 %
20222021
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FB Financial Corporation
Fourth Quarter 2022 Results
Page 10
Adjusted return on average assets and equityFourth QuarterThird QuarterFourth Quarter
Net income $38,143 $31,831 $48,827 
Average assets12,446,027 12,038,115 12,085,817 
Average common equity1,294,758 1,336,143 1,411,987 
Return on average assets1.22 %1.05 %1.60 %
Return on average common equity11.7 %9.45 %13.7 %
Adjusted net income$40,045 $32,117 $42,551 
Adjusted return on average assets1.28 %1.06 %1.40 %
Adjusted return on average common equity12.3 %9.54 %12.0 %
Adjusted pre-tax pre-provision earnings$50,299 $52,516 $43,573 
Adjusted pre-tax pre-provision return on average assets1.60 %1.73 %1.43 %
Adjusted pre-tax pre-provision return on average common equity15.4 %15.6 %12.2 %

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