FB Financial Corp Q4 FY2024 earnings call

• Emphasized strong EPS growth: EPS of $0.81 and adjusted EPS of $0.85 per share for Q4; full-year EPS $2.48, adjusted $3.40 (13% y-o-y increase).
• Operating foundation: Solid capital and liquidity, local market authority model, desirable Southeastern U.S. geography, experienced leadership.
• Growth initiatives: Added 9 new revenue-producing bankers in Q4 (32 for the year), expanded into Tuscaloosa, Alabama, and Nashville, North Carolina; focus on organic growth and bank acquisitions as capital deployment priorities.

For the quarter, net interest income was $108.4 million. Reported non-interest income was $22 million, adjusted $24.2 million. Non-interest expense was $73.2 million, provision expense $7.1 million. All-in, reported net income was $37.9 million, adjusted $39.8 million. Full-year net interest income was $416.5 million, reported non-interest income $39.1 million, adjusted $95.6 million. Full-year non-interest expense was $296.9 million, adjusted $294.9 million, provision expense $12 million. GAAP return on average assets was 1.14%, return on average tangible common equity was 11.5%. Tangible common equity to tangible assets was 10.2%, preliminary total risk-based capital ratio was 15.2%. Core deposit balances were up 10.8% annualized in Q4.

• Net interest margin expected to land between 3.54% and 3.61% in Q1 2025.
• Target to hire 42 revenue producers in 2025.
• Continue focusing on organic growth through retail and commercial businesses, and consider bank acquisitions aligning culturally, geographically, and financially.

• Credit risks: Specific loan charge-off due to challenges in a services industry borrower; commercial real estate risks with older properties in Nashville.
• Interest rate risks: Impact on net interest margin and deposit costs due to shifting interest rates.
• Regulatory risks: Uncertainties around bank acquisition approvals and timelines.

Q: Stephen Scouten asked about new hires, growth optimism, and deposit building.

A: Christopher Holmes and others discussed hiring core C&I frontline bankers, diversity in geographies, target to hire 42 revenue producers in 2025, and optimism due to advantaged geography and organic growth.

Q: Brett Rabatin asked about commercial real estate and margin.

A: Christopher Holmes noted no fundamental issues in Nashville's economy despite office property sales at discounts, and Michael Mettee discussed margin improvement tied to loan-to-deposit ratio and interest rate environment.

Q: Russell Gunther asked about loan growth, capital deployment, and mortgage efficiencies.

A: Christopher Holmes mentioned targeting low double-digit loan growth, Michael Mettee talked about capital deployment priorities (organic growth, M&A) and mortgage efficiency improvements.

Q: Catherine Mealor asked about deposit costs and loan pricing.

A: Michael Mettee discussed competitive deposit costs in higher-growth markets and loan pricing around 720 on new origination, emphasizing need to work both sides of relationships.

Q: Steve Moss asked about credit provision and margin sensitivity.

A: Travis Edmondson and Michael Mettee explained the charge-off was from prior quarters, provision was due to loan growth and modestly worse economic forecast, and Michael Mettee discussed balance sheet position being slightly asset sensitive.