Annualized loan growth of 14.8% and increased mortgage revenues
drive solid earnings
NASHVILLE, Tenn.--(BUSINESS WIRE)--
FB Financial Corporation (“FB Financial”) (NYSE: FBK), parent company of
FirstBank, reported its results today for the second quarter of 2017.
President and CEO Christopher T. Holmes stated, “Our second quarter
earnings were driven by outstanding annualized loan growth of 14.8% for
the quarter and the healthy seasonal contribution from our mortgage
operations. Along with the excellent growth, we continue to have solid
asset quality and net interest margin results were at the top end of our
expectations. Our team continues to execute our strategy of growing and
serving our customer relationships while delivering shareholder value.”
For the quarter ended June 30, 2017, the Company reported net income of
$11.2 million, or $0.43 per diluted common share, compared to $15.8
million, or $0.92 per diluted common share, for the second quarter of
2016 (equivalent to $10.6 million, or $0.62 per diluted common share, on
a pro forma C-Corporation tax basis). Diluted earnings per share on a
year over year basis declined primarily due to the increase in weighted
average diluted shares from 17,180,000 in the second quarter of 2016 to
26,301,458 this quarter related to shares issued in the initial public
offering, the recent private placement and related stock grants.
Adjusting net income for pre-tax, non-core net expenses outlined below
totaling $2.8 million, or $1.7 million after tax, core net income was
$12.9 million, or $0.49 per diluted common share, for the second quarter
of 2017, compared to pro forma C-Corporation basis core net income of
$13.2 million, or $0.77 per diluted common share for the second quarter
of 2016.
Second Quarter Key Highlights
-
Loans held for investment (HFI) grew to $1.97 billion, up 14.8% on a
linked-quarter annualized basis, and up 12.6% over June 30, 2016
-
Total deposits grew to $2.73 billion, up 3.9% on a linked-quarter
annualized basis, and up 8.5% over June 30, 2016
-
Net interest margin (NIM) (tax-equivalent basis) was 4.19% in the
second quarter of 2017, from 4.28% in the first quarter of 2017; when
excluding loan accretion, NIM was 4.08% in the second quarter of 2017
compared to 4.12% in the first quarter of 2017
-
Consolidated efficiency ratio and core efficiency ratio of 74.4% and
70.2%, respectively, in the second quarter of 2017, driven by Banking
Segment core efficiency ratio of 60.4%
-
Received regulatory approvals for the pending acquisition of Clayton
Bank and Trust and American City Bank from Clayton HC, Inc. (the
“Clayton Banks”) which is currently expected to close at the end of
July
-
Raised $152.7 million in net proceeds from the sale of 4.8 million
shares of common stock; increasing weighted average diluted shares to
26.3 million from 24.6 million on a linked-quarter basis
Financial Summary
|
|
| | |
|
| | |
| | | Reported Results | | | | Non-GAAP Core Results* | |
| | | For the Three Months Ended June 30, | |
| | | 2017 | |
|
| 2016 (1) | | | | 2017 | |
|
| 2016 (2) | |
Results of operations | | | | | | | | | | | | | | | | | | | | |
Net income
| | |
$
|
11,239
| | | |
$
|
10,576
| | | |
$
|
12,919
| | | |
$
|
13,151
| |
Diluted earnings per share (EPS)
| | |
$
|
0.43
| | | |
$
|
0.62
| | | |
$
|
0.49
| | | |
$
|
0.77
| |
Diluted average shares outstanding
| | | |
26,301,458
| | | | |
17,180,000
| | | | |
26,301,458
| | | | |
17,180,000
| |
Total revenue
| | |
$
|
66,084
| | | |
$
|
66,714
| | | |
$
|
67,833
| | | |
$
|
64,377
| |
Return on average assets (ROAA)
| | | |
1.40
|
%
| | | |
1.47
|
%
| | | |
1.61
|
%
| | | |
1.82
|
%
|
Return on average equity (ROAE)
| | | |
11.30
|
%
| | | |
16.37
|
%
| | | |
12.99
|
%
| | | |
20.36
|
%
|
Return on average tangible
common equity (ROTCE)*
|
|
|
|
12.96
|
%
|
|
|
|
20.55
|
%
|
|
|
|
14.90
|
%
|
|
|
|
25.55
|
%
|
| | | | | | | | | | | | | | | | | | | |
|
*This measure is considered a non-GAAP financial measure. See “GAAP
Reconciliation and Use of Non-GAAP financial measures” and the
corresponding financial tables for a reconciliation and discussion
of this non-GAAP measure.
| |
| | | | | | | | | | | | | | | | | | | |
|
(1) Prior to the IPO in the third quarter of 2016, the
Company was an S corporation and did not incur federal income taxes.
In conjunction with the IPO, the Company converted to a C
corporation. These results are on a pro forma basis to reflect the
results of the Company on a C corporation basis. Reported net income
as an S corporation was $15,775 with diluted EPS of $0.92 while
ROAA, ROAE and ROTCE were 2.19%, 24.42% and 30.64%, respectively.
| |
(2) Core results are presented pro forma for conversion from
S corporation to C corporation status.
| |
|
|
During the second quarter of 2017 and 2016, as adjusted for in the
preceding table, the Company recorded certain items impacting
comparability between periods, as follows:
- $1.84 million net pre-tax charge related to the decrease in the fair
value of mortgage servicing rights (MSRs) during the second quarter of
2017. MSR impairment resulted in a net pre-tax charge of $4.9 million
for the second quarter of 2016;
- $62 thousand net pre-tax gain on sales of other real estate owned and
other assets compared to a $0.3 million net pre-tax loss in the second
quarter of 2016;
- $0.8 million pre-tax merger related charges associated with the
pending acquisition of the Clayton Banks compared to $1.5 million
pre-tax merger related charges for the second quarter of 2016;
- $29 thousand pre-tax gain on sale of securities compared to $2.6
million pre-tax gain for the second quarter of 2016; and
- $0.2 million net pre-tax loss on the sale of MSRs, net of related
transaction expenses and hedging costs for the second quarter of 2017
Holmes continued, “We are extremely excited about the addition of
customers and associates of the Clayton Banks to FirstBank. The
relationship-based customer service cultures of each bank will blend
well together and will expand the bank’s presence across Tennessee. We
believe that the long-term value of this transaction will drive
significant shareholder value in coming years.”
Customer-Focused Balance Sheet Growth Drives
Interest Income and NIM
Loans held for investment at June 30, 2017, rose to $1.97 billion, an
increase of $70.0 million, or 14.8% annualized, from March 31, 2017.
Loans increased $220.7 million, or 12.6%, from June 30, 2016. Yields on
loans held for investment were 5.17% for the second quarter of 2017
compared to 5.42% on a linked- quarter basis; of the 25 basis point
quarter-over-quarter decrease, 22 basis points were related to lower
accretion and lower loan origination and syndication fees.
Total deposits grew to $2.73 billion at June 30, 2017, an increase of
$26.4 million, or 3.9% annualized, from March 31, 2017. Deposits
increased $213.3 million, or 8.5%, from June 30, 2016.
Noninterest-bearing deposit balances were 26.2% of total deposits at
June 30, 2017, compared to 27.1% at June 30, 2016. Cost of total
deposits was 0.34% for the second quarter of 2017, compared to 0.32% for
the first quarter of 2017 and 0.28% for the second quarter of 2016.
Loans held for sale, generated by our mortgage operations, increased to
$427.4 million at June 30, 2017, compared to $365.2 million at March 31,
2017, and $322.2 million at June 30, 2016.
Our NIM was 4.19% for the second quarter of 2017, compared to 4.28% and
4.40% for the first quarter of 2017 and second quarter of 2016,
respectively, reflecting lower loan origination and syndication fees and
accretion. Excluding accretion related to acquired loans, our NIM was
4.08% compared to 4.12% and 4.16% for the first quarter of 2017 and
second quarter of 2016, respectively. Net interest income was $30.4
million for the second quarter of 2017, compared to $30.3 million for
the first quarter of 2017 and $28.4 million for the second quarter of
2016.
“We achieved loan growth across our markets in the second quarter which
resulted in annualized loan growth of 14.8%, a rate that exceeds our
long-term expectations. We focus on the performance of our markets and
are pleased to continue to utilize our balance sheet to meet the needs
of our customers,” Holmes said.
Noninterest Income Stable
Noninterest income was $35.7 million for the second quarter of 2017,
compared to $31.1 million for the first quarter of 2017 and $38.4
million for the second quarter of 2016.
Mortgage banking revenues were up 0.4% to $30.2 million for the second
quarter of 2017, compared to $30.1 million for the same period in 2016
and $25.1 million for the first quarter of 2017. Net gains from mortgage
sales increased 4.6% to $23.9 million for the second quarter of 2017,
compared to $22.9 million for the same period in 2016. Mortgage interest
rate lock commitments (IRLC) volume rose 47.4% to $2.16 billion during
the second quarter compared to $1.46 billion in the same period in 2016
on mortgage loan sales of $1.54 billion and $939.8 million,
respectively. Our mortgage loan IRLC pipeline increased from $449.0
million at March 31, 2017, to $546.5 million at June 30, 2017. Mortgage
servicing revenue was $2.7 million for the second quarter of 2017,
compared to $2.7 million for the same period in 2016 and $2.7 million
for the first quarter of 2017.
Holmes commented, “Our mortgage team has continued to execute our
overall strategic growth plan as we continue to focus on optimizing our
lines of business and making adjustments where necessary. Our different
channels are performing as expected, and we are optimistic about the
second half of 2017.”
Noninterest Expenses Remain In-line
Noninterest expense was $49.1 million for the second quarter of 2017,
compared to $50.6 million for the second quarter of 2016. Excluding the
non-core items, discussed above, core noninterest expense was $48.1
million for the second quarter of 2017, compared to $44.1 million for
the second quarter of 2016. The primary drivers of the change in
noninterest expense were the impact of mortgage-related commissions and
other costs associated with a 58.0% increase in mortgage loan closings
over 2016.
Our efficiency ratio was 74.4% for the second quarter of 2017, compared
to 75.8% for the second quarter of 2016. Our core efficiency ratio,
which excludes the non-core items previously discussed, was 70.2% for
the second quarter of 2017, compared to 67.9% for the second quarter of
2016. Our Banking Segment core efficiency ratio was 60.4% for the second
quarter of 2017, compared to 63.1% for the second quarter of 2016, while
our Mortgage Segment core efficiency ratio was 78.3% and 76.5%,
respectively, for the same periods. See “GAAP Reconciliation and Use of
Non-GAAP Financial Measures.”
“We continue to focus on balancing growth and cost efficiency and are
pleased with our progress as we continue to see increases in our
operating leverage. Upon realization of our expected 20% net cost
savings from the Clayton Banks transaction, we expect to see additional
improvement in our operating leverage in the Banking Segment,” commented
James R. Gordon, Chief Financial Officer.
Continued Asset Quality Improvement
The allowance for loan losses equaled 1.18% of loans HFI at June 30,
2017, compared to 1.20% at March 31, 2017, and 1.36% at June 30, 2016.
Net recoveries were $1.2 million, or 0.25%, compared to net recoveries
of $1.4 million, or 0.31%, and $92 thousand, or 0.02%, for the first
quarter of 2017 and the second quarter of 2016, respectively.
The provision for loan losses was a reversal of $0.9 million for the
second quarter of 2017 compared to reversals of $0.3 million and $0.8
million for the first quarter of 2017 and the second quarter of 2016,
respectively.
Nonperforming assets decreased to $19.5 million, or 0.58% of total
assets, at June 30, 2017, from $22.7 million, or 0.78%, at June 30, 2016.
“We continue to have positive asset quality metrics driven by large
recoveries of loans previously charged off. Our provision levels have
been reduced for these recoveries leading to provision reversals,”
commented Gordon.
Capital Strength for Future Growth
The Company ended the quarter with a shareholders’ equity to assets
ratio and a tangible common equity to tangible assets ratio of 15.23%
and 13.92%, respectively, and a book value per common share and tangible
book value per common share of $17.59 and $15.83, respectively. This
compares to 9.11% and 7.44% and $15.47 and $12.41, respectively, at June
30, 2016. Our common equity tier one ratio improved to 17.16% at June
30, 2017, from 8.30% at June 30, 2016. See “GAAP Reconciliation and Use
of Non-GAAP Financial Measures.”
“Our capital ratios were positively impacted by the issuance of the 4.8
million shares of common stock completed during the quarter to fund the
revised terms of the Clayton Banks transaction,” commented Gordon.
Summary
“We are pleased with our performance through the first half of 2017 and
look forward to an exciting second half of 2017 with the addition of the
Clayton Banks team,” Holmes concluded.
WEBCAST AND CONFERENCE CALL INFORMATION
The live broadcast of FB Financial Corporation’s conference call will
begin at 8:00 a.m. CDT on Tuesday, July 25, 2017, and the earnings
conference call will be broadcast live over the Internet at http://services.choruscall.com/links/fbk170725AWsp51Nq.html.
An online replay will be available for twelve months approximately an
hour following the conclusion of the live broadcast.
ABOUT FB FINANCIAL CORPORATION
FB Financial Corporation (NYSE: FBK) is a bank holding company
headquartered in Nashville, Tennessee. FB Financial operates through its
wholly owned banking subsidiary, FirstBank, the third largest
Tennessee-headquartered community bank, with 45 full-service bank
branches across Tennessee, North Alabama and North Georgia, and a
national mortgage business with offices across the Southeast. FirstBank
serves five of the largest metropolitan markets in Tennessee and has
over $3.3 billion in total assets.
SUPPLEMENTARY FINANCIAL INFORMATION AND EARNINGS PRESENTATION
Investors are encouraged to review this Earnings Release in conjunction
with the Supplementary Financial Data and Earnings Presentation posted
on the Company’s website, which can be found at https://investors.firstbankonline.com.
This Earnings Release and the Supplementary Financial Data and 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 July 24, 2017.
BUSINESS SEGMENT RESULTS
The Company has included its business segment financial tables as part
of this release. A detailed discussion of the business segment results
is included in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2016, and investors are encouraged to review that
discussion in conjunction with this Earnings Release.
FORWARD-LOOKING STATEMENTS
This news release contains “forward-looking statements” made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. All statements other than statements of historical fact are
forward-looking statements. You can identify these forward-looking
statements through the Company’s use of words such as “believes,”
“anticipates,” “expects,” “may,” “will,” “assumes,” “should,”
“predicts,” “could,” “would,” “intends,” “targets,” “estimates,”
“projects,” “plans,” “potential” and other similar words and expressions
of the future or otherwise regarding the outlook for the Company’s
future business and financial performance and/or the performance of the
banking and mortgage industry and economy in general and the Company’s
proposed acquisition of the Clayton Banks and the anticipated timing,
benefits, cost, and financial impact thereof. Investors are cautioned
that any such forward-looking statements are not guarantees of future
performance and involve known and unknown risks and uncertainties which
may cause the actual results, performance or achievements of the Company
to be materially different from the future results, performance or
achievements expressed or implied by such forward-looking statements.
Forward-looking statements are based on the information known to, and
current beliefs and expectations of, the Company’s management and are
subject to significant risks and uncertainties. Actual results may
differ materially from those contemplated by such forward-looking
statements. A number of factors could cause actual results to differ
materially from those contemplated by the forward-looking statements in
this Earnings Release including, without limitation, the risks and other
factors set forth in the Company’s December 31, 2016, Form 10-K, filed
with the SEC on March 31, 2017, under the captions “Cautionary note
regarding forward-looking statements” and “Risk factors.” Many of these
factors are beyond the Company’s ability to control or predict. The
Company believes the forward-looking statements contained herein are
reasonable; however, undue reliance should not be placed on any
forward-looking statements, which are based on current expectations and
speak only as of the date that they are made. The Company does not
assume any obligation to update any forward-looking statements as a
result of new information, future developments or otherwise, except as
otherwise may be required by law.
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 include, without limitation, pro forma core
net income, pro forma core income tax expense, pro forma core diluted
earnings per share, core noninterest expense and core noninterest
income, core efficiency ratio (tax equivalent basis), Banking segment
core efficiency ratio (tax equivalent basis), Mortgage segment core
efficiency ratio (tax equivalent basis), pro forma core return on
average assets and equity and pro forma core total revenue. Each of
these non-GAAP metrics excludes certain income and expense items that
the Company’s management considers to be non‐core in nature. The Company
refers to these non‐GAAP measures as core measures. This Earnings
Release also presents tangible assets, tangible common equity, tangible
book value per common share, tangible common equity to tangible assets,
return on average tangible common equity, pro forma return on average
tangible common equity and pro forma core return on average tangible
common equity. Each of these non-GAAP metrics excludes the impact of
goodwill and other intangibles.
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
demonstrating 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 our 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 we calculate the
non-GAAP financial measures discussed herein may differ from that of
other companies reporting measures with similar names. You should
understand how such other banking organizations calculate their
financial measures similar or with names similar to the non-GAAP
financial measures we have discussed herein when comparing such non-GAAP
financial measures. The following tables provide a reconciliation of
these measures to the most directly comparable GAAP financial measures.
|
Financial Summary and Key Metrics |
(Unaudited) |
(In Thousands, Except Share Data and Percentages (%))
|
|
|
| |
|
| |
|
| |
| | | 2017 | | | 2016 |
|
|
| Second Quarter |
|
| First Quarter | | | Second Quarter |
Statement of Income Data | | | | | | | | | |
Total interest income
| | |
$
|
33,278
| | | |
$
|
32,889
| | | |
$
|
30,732
| |
Total interest expense
| | |
|
2,851
|
|
|
|
|
2,638
|
| | |
|
2,374
|
|
Net interest income
| | | |
30,427
| | | | |
30,251
| | | | |
28,358
| |
Provision for loan losses
| | | |
(865
|
)
| | | |
(257
|
)
| | | |
(789
|
)
|
Total noninterest income
| | | |
35,657
| | | | |
31,087
| | | | |
38,356
| |
Total noninterest expense
| | |
|
49,136
|
|
|
|
|
46,417
|
| | |
|
50,595
|
|
Net income before income taxes
| | | |
17,813
| | | | |
15,178
| | | | |
16,908
| |
Income tax expense
| | |
|
6,574
|
|
|
|
|
5,425
|
| | |
|
1,133
|
|
Net income
| | |
$
|
11,239
|
|
|
|
$
|
9,753
|
| | |
$
|
15,775
|
|
Net interest income (tax—equivalent basis)
| | |
$
|
31,158
|
|
|
|
$
|
30,963
|
| | |
$
|
28,967
|
|
Pro forma net income (C-Corp basis)
| | |
$
|
11,239
|
|
|
|
$
|
9,753
|
| | |
$
|
10,576
|
|
Pro forma core net income*
| | |
$
|
12,919
|
|
|
|
$
|
10,284
|
| | |
$
|
13,151
|
|
Per Common Share | | | | | | | | | |
Diluted net income
| | |
$
|
0.43
| | | |
$
|
0.40
| | | |
$
|
0.92
| |
Pro forma net income- diluted (C Corp basis)
| | |
$
|
0.43
| | | |
$
|
0.40
| | | |
$
|
0.62
| |
Pro forma core net income - diluted*
| | |
$
|
0.49
| | | |
$
|
0.42
| | | |
$
|
0.77
| |
Book value
| | | |
17.59
| | | | |
14.16
| | | | |
15.47
| |
Tangible book value*
| | | |
15.83
| | | | |
12.05
| | | | |
12.41
| |
Weighted average number of shares-diluted
| | | |
26,301,458
| | | | |
24,610,991
| | | | |
17,180,000
| |
Period-end number of shares (a) |
|
|
|
28,968,160
|
|
|
|
|
24,154,323
|
| | |
|
17,180,000
|
|
Selected Balance Sheet Data | | | | | | | | | |
Cash and due from banks
| | |
$
|
59,112
| | | |
$
|
53,748
| | | |
$
|
52,122
| |
Loans held for investment
| | | |
1,970,974
| | | | |
1,900,995
| | | | |
1,750,304
| |
Allowance for loan losses
| | | |
(23,247
|
)
| | | |
(22,898
|
)
| | | |
(23,734
|
)
|
Loans held for sale
| | | |
427,416
| | | | |
365,173
| | | | |
322,249
| |
Available-for-sale securities, fair value
| | | |
553,357
| | | | |
567,886
| | | | |
550,307
| |
Foreclosed real estate, net
| | | |
6,370
| | | | |
6,811
| | | | |
9,902
| |
Total assets
| | | |
3,346,570
| | | | |
3,166,459
| | | | |
2,917,958
| |
Total deposits
| | | |
2,727,593
| | | | |
2,701,199
| | | | |
2,514,297
| |
Borrowings
| | | |
43,790
| | | | |
44,552
| | | | |
55,785
| |
Total shareholders' equity
|
|
|
|
509,517
|
|
|
|
|
342,142
|
| | |
|
265,768
|
|
Selected Ratios | | | | | | | | | |
Return on average:
| | | | | | | | | |
Assets
| | | |
1.40
|
%
| | | |
1.25
|
%
| | | |
2.19
|
%
|
Shareholders' equity
| | | |
11.30
|
%
| | | |
11.87
|
%
| | | |
24.42
|
%
|
Tangible common equity*
| | | |
12.96
|
%
| | | |
14.03
|
%
| | | |
30.64
|
%
|
Pro forma return on average (C-Corp basis):
| | | | | | | | | |
Assets
| | | |
1.40
|
%
| | | |
1.25
|
%
| | | |
1.47
|
%
|
Shareholders' equity
| | | |
11.30
|
%
| | | |
11.87
|
%
| | | |
16.37
|
%
|
Tangible common equity*
| | | |
12.96
|
%
| | | |
14.03
|
%
| | | |
20.55
|
%
|
Average shareholders' equity to average assets
| | | |
12.37
|
%
| | | |
10.50
|
%
| | | |
8.96
|
%
|
Net interest margin (NIM) (tax-equivalent basis)
| | | |
4.19
|
%
| | | |
4.28
|
%
| | | |
4.40
|
%
|
Net interest margin excluding accretion (tax-equivalent basis) (c) | | | |
4.08
|
%
| | | |
4.12
|
%
| | | |
4.16
|
%
|
Efficiency ratio (GAAP)
| | | |
74.35
|
%
| | | |
75.67
|
%
| | | |
75.84
|
%
|
Core efficiency ratio (tax-equivalent basis)*
| | | |
70.18
|
%
| | | |
73.29
|
%
| | | |
67.92
|
%
|
Loans held for investment to deposit ratio
| | | |
72.26
|
%
| | | |
70.38
|
%
| | | |
69.61
|
%
|
Total loan to deposit ratio
| | | |
87.93
|
%
| | | |
83.89
|
%
| | | |
82.43
|
%
|
Yield on interest-earning assets
| | | |
4.57
|
%
| | | |
4.65
|
%
| | | |
4.74
|
%
|
Cost of interest-bearing liabilities
| | | |
0.55
|
%
| | | |
0.51
|
%
| | | |
0.46
|
%
|
Cost of total deposits
|
|
|
|
0.34
|
%
|
|
|
|
0.32
|
%
| | |
|
0.28
|
%
|
Credit Quality Ratios | | | | | | | | | |
Allowance for loan losses as a percentage of loans held for
investment
| | | |
1.18
|
%
| | | |
1.20
|
%
| | | |
1.36
|
%
|
Net recoveries (charge-off's) as a percentage of average total
loans held for investment
| | | |
0.25
|
%
| | | |
0.31
|
%
| | | |
0.02
|
%
|
Nonperforming assets as a percentage of total assets (b) |
|
|
|
0.58
|
%
|
|
|
|
0.56
|
%
| | |
|
0.78
|
%
|
Preliminary capital ratios (Consolidated) | | | | | | | | | |
Shareholders' equity to assets
| | | |
15.23
|
%
| | | |
10.81
|
%
| | | |
9.11
|
%
|
Tangible common equity to tangible assets*
| | | |
13.92
|
%
| | | |
9.34
|
%
| | | |
7.44
|
%
|
Tier 1 capital (to average assets)
| | | |
15.54
|
%
| | | |
10.46
|
%
| | | |
7.98
|
%
|
Tier 1 capital (to risk-weighted assets)
| | | |
18.28
|
%
| | | |
12.87
|
%
| | | |
9.57
|
%
|
Total capital (to risk-weighted assets)
| | | |
19.14
|
%
| | | |
13.76
|
%
| | | |
11.00
|
%
|
Common Equity Tier 1 (to risk-weighted assets) (CET1)
|
|
|
|
17.16
|
%
|
|
|
|
11.69
|
%
| | |
|
8.30
|
%
|
| | | | | | | | |
|
*These measures are considered non-GAAP financial measures. See
“GAAP Reconciliation and Use of Non-GAAP financial measures” and the
corresponding financial tables below for a reconciliation and
discussion of these non-GAAP measures.
|
| | | | | | | | |
|
(a) Includes the 4,806,710 common shares issued effective June
1, 2017. |
(b) Includes the $1.5 million of marketable equity securities
in satisfaction of previously charged-off loan during the second
quarter of 2017. |
(c) Excludes accretion from acquired/purchased loans. |
|
|
Non-GAAP Reconciliation |
For the Quarters Ended |
(Unaudited) |
(In Thousands, Except Share Data and %)
|
|
|
| |
|
| |
|
| |
| | | 2017 | | | 2016 |
Pro forma core net income |
|
| Second Quarter | | | First Quarter | | | Second Quarter |
Pre-tax net income | | | $ | 17,813 | | | | $ | 15,178 | | | | $ | 16,908 | |
Non-core items: | | | | | | | | | |
Noninterest income
| | | | | | | | | |
Less change in fair value on mortgage servicing rights
| | | |
(1,840
|
)
| | | |
(501
|
)
| | | |
-
| |
Less gain on sale of securities
| | | |
29
| | | | |
1
| | | | |
2,591
| |
Less gain (loss) on sales or write-downs of foreclosed and other
assets
| | | |
62
| | | | |
748
| | | | |
(254
|
)
|
Noninterest expenses
| | | | | | | | | |
Plus variable compensation charge related to cash settled equity
awards
| | | |
-
| | | | |
635
| | | | |
-
| |
Plus merger and conversion
| | | |
767
| | | | |
487
| | | | |
1,540
| |
Plus impairment of mortgage servicing rights
| | | |
-
| | | | |
-
| | | | |
4,914
| |
Plus loss on sale of mortgage servicing rights
| | |
|
249
|
| | |
|
-
|
| | |
|
-
|
|
Pre tax core net income | | | $ | 20,578 | | | | $ | 16,052 | | | | $ | 21,025 | |
Pro forma core income tax expense
| | |
|
7,659
|
| | |
|
5,768
|
| | |
|
7,874
|
|
Pro forma core net income | | | $ | 12,919 |
| | | $ | 10,284 |
| | | $ | 13,151 |
|
Weighted average common shares outstanding fully diluted
| | | |
26,301,458
| | | | |
24,610,991
| | | | |
17,180,000
| |
| | | | | | | | |
|
Pro forma core diluted earnings per share | | | | | | | | | |
Diluted earning per share | | | $ | 0.43 | | | | $ | 0.40 | | | | $ | 0.92 | |
Non-core items: | | | | | | | | | |
Noninterest income
| | | | | | | | | |
Less change in fair value on mortgage servicing rights
| | | |
(0.07
|
)
| | | |
(0.02
|
)
| | | |
-
| |
Less gain on sale of securities
| | | |
0.00
| | | | |
0.00
| | | | |
0.15
| |
Less gain (loss) on sales or write-downs of foreclosed and other
assets
| | | |
0.00
| | | | |
0.03
| | | | |
(0.01
|
)
|
| | | | | | | | |
|
Noninterest expenses
| | | | | | | | | |
Plus variable compensation charge related to cash settled equity
awards
| | | |
-
| | | | |
0.03
| | | | |
-
| |
Plus merger and conversion
| | | |
0.03
| | | | |
0.02
| | | | |
0.09
| |
Plus impairment of mortgage servicing rights
| | | |
-
| | | | |
-
| | | | |
0.29
| |
Plus loss on sale of mortgage servicing rights
| | | |
0.01
| | | | |
-
| | | | |
-
| |
Tax effect
| | |
|
(0.0
|
)
| | |
|
(0.0
|
)
| | |
|
(0.39
|
)
|
Pro forma core diluted earnings per share |
|
| $ | 0.49 |
|
|
| $ | 0.42 |
|
|
| $ | 0.77 |
|
| | | | | | | | |
|
| | | | | | | | |
|
| | | | | | | | |
|
| | | 2017 | | | 2016 |
Core efficiency ratio (tax-equivalent basis) |
|
| Second Quarter | | | First Quarter | | | Second Quarter |
Total noninterest expense
| | |
$
|
49,136
| | | |
$
|
46,417
| | | |
$
|
50,595
| |
Less variable compensation charge related to cash settled equity
awards
| | | |
-
| | | | |
635
| | | | |
-
| |
Less merger and conversion expenses
| | | |
767
| | | | |
487
| | | | |
1,540
| |
Less impairment of mortgage servicing rights
| | | |
-
| | | | |
-
| | | | |
4,914
| |
Less loss on sale of mortgage servicing rights
| | |
|
249
|
| | |
|
-
|
| | |
|
-
|
|
Core noninterest expense
| | |
$
|
48,120
|
| | |
$
|
45,295
|
| | |
$
|
44,141
|
|
Net interest income (tax-equivalent basis)
| | | |
31,158
| | | | |
30,963
| | | | |
28,967
| |
Total noninterest income
| | | |
35,657
| | | | |
31,087
| | | | |
38,356
| |
Less change in fair value on mortgage servicing rights
| | | |
(1,840
|
)
| | | |
(501
|
)
| | | |
-
| |
Less gain (loss) on sales or write-downs of foreclosed and other
assets
| | | |
62
| | | | |
748
| | | | |
(254
|
)
|
Less gain on sales of securities
| | |
|
29
|
| | |
|
1
|
| | |
|
2,591
|
|
Core noninterest income
| | |
|
37,406
|
| | |
|
30,839
|
| | |
|
36,019
|
|
Core revenue
| | |
$
|
68,564
|
| | |
$
|
61,802
|
| | |
$
|
64,986
|
|
Efficiency ratio (GAAP)(1) | | | |
74.35
|
%
| | | |
75.67
|
%
| | | |
75.84
|
%
|
Core efficiency ratio (tax-equivalent basis) |
|
|
|
70.18
|
%
|
|
|
|
73.29
|
%
|
|
|
|
67.92
|
%
|
| | | | | | | | |
|
(1) Efficiency ratio (GAAP) is calculated by dividing non-interest
expense by total revenue
|
|
|
Non-GAAP Reconciliation |
For the Quarters Ended |
(Unaudited) |
(In Thousands, Except Share Data and %)
|
|
|
| |
|
| |
|
| |
| | | 2017 | | | 2016 |
Banking segment core efficiency ratio (tax equivalent) |
|
| Second Quarter | | | First Quarter | | | Second Quarter |
Core noninterest expense
| | |
$
|
48,120
| | | |
$
|
45,295
| | | |
$
|
44,141
| |
Less Mortgage segment noninterest expense
| | | |
19,802
| | | | |
17,670
| | | | |
22,451
| |
Add impairment of mortgage servicing rights
| | | |
-
| | | | |
-
| | | | |
4,914
| |
Add loss on sale of mortgage servicing rights
| | |
|
249
|
| | |
|
-
|
| | |
|
-
|
|
Adjusted Banking segment noninterest expense
| | |
|
28,567
|
| | |
|
27,625
|
| | |
|
26,604
|
|
Adjusted core revenue
| | | |
68,564
| | | | |
61,802
| | | | |
65,109
| |
Less Mortgage segment noninterest income
| | | |
23,121
| | | | |
19,414
| | | | |
22,918
| |
Less change in fair value on mortgage servicing rights
| | |
|
(1,840
|
)
| | |
|
(501
|
)
| | |
|
-
|
|
Adjusted Banking segment total revenue
| | |
$
|
47,283
| | | |
$
|
42,889
| | | |
$
|
42,191
| |
Banking segment core efficiency ratio (tax-equivalent
basis) | | | |
60.42
|
%
| | | |
64.41
|
%
| | | |
63.06
|
%
|
| | | | | | | | |
|
Mortgage segment core efficiency ratio (tax equivalent) | | | | | | | | | |
Noninterest expense
| | |
$
|
49,136
| | | |
$
|
46,417
| | | |
$
|
50,595
| |
Less impairment of mortgage servicing rights
| | | |
-
| | | | |
-
| | | | |
4,914
| |
Less loss on sale of mortgage servicing rights
| | | |
249
| | | | |
-
| | | | |
-
| |
Less Banking segment noninterest expense
| | |
|
29,334
|
| | |
|
28,747
|
| | |
|
28,144
|
|
Adjusted Mortgage segment noninterest expense
| | |
$
|
19,553
| | | |
$
|
17,670
| | | |
$
|
17,537
| |
Total noninterest income
| | | |
35,657
| | | | |
31,087
| | | | |
38,356
| |
Less Banking segment noninterest income
| | | |
12,536
| | | | |
11,673
| | | | |
15,438
| |
Less change in fair value on mortgage servicing rights
| | |
|
(1,840
|
)
| | |
|
(501
|
)
| | |
|
-
|
|
Adjusted Mortgage segment total revenue
| | |
$
|
24,961
| | | |
$
|
19,915
| | | |
$
|
22,918
| |
Mortgage segment core efficiency ratio (tax-equivalent
basis) |
|
|
|
78.33
|
%
|
|
|
|
88.73
|
%
|
|
|
|
76.52
|
%
|
| | | | | | | | |
|
| | | 2017 | | | 2016 |
Tangible assets and equity |
|
| Second Quarter | | | First Quarter | | | Second Quarter |
Tangible Assets | | | | | | | | | |
Total assets
| | |
$
|
3,346,570
| | | |
$
|
3,166,459
| | | |
$
|
2,917,958
| |
Less goodwill
| | | |
46,867
| | | | |
46,867
| | | | |
46,867
| |
Less core deposit intangibles
| | |
|
4,048
|
| | |
|
4,171
|
| | |
|
5,616
|
|
Tangible assets | | |
$
|
3,295,655
|
| | |
$
|
3,115,421
|
| | |
$
|
2,865,475
|
|
Tangible Common Equity | | | | | | | | | |
Total shareholders' equity
| | |
$
|
509,517
| | | |
$
|
342,142
| | | |
$
|
265,768
| |
Less goodwill
| | | |
46,867
| | | | |
46,867
| | | | |
46,867
| |
Less core deposit intangibles
| | |
|
4,048
|
| | |
|
4,171
|
| | |
|
5,616
|
|
Tangible common equity | | |
$
|
458,602
|
| | |
$
|
291,104
|
| | |
$
|
213,285
|
|
Common shares outstanding
| | | |
28,968,160
| | | | |
24,154,323
| | | | |
17,180,000
| |
Book value per common share
| | |
$
|
17.59
| | | |
$
|
14.16
| | | |
$
|
15.47
| |
Tangible book value per common share | | |
$
|
15.83
| | | |
$
|
12.05
| | | |
$
|
12.41
| |
Total shareholders' equity to total assets
| | | |
15.23
|
%
| | | |
10.81
|
%
| | | |
9.11
|
%
|
Tangible common equity to tangible assets | | | |
13.92
|
%
| | | |
9.34
|
%
| | | |
7.44
|
%
|
Net income
| | |
$
|
11,239
| | | |
$
|
9,753
| | | |
$
|
15,775
| |
Return on tangible common equity |
|
|
|
9.83
|
%
|
|
|
|
13.59
|
%
|
|
|
|
29.75
|
%
|
| | | | | | | | |
|
| | | | | | | | |
|
| | | 2017 | | | 2016 |
Return on average tangible common equity |
|
| Second Quarter | | | First Quarter | | | Second Quarter |
Total average shareholders' equity
| | |
$
|
398,805
| | | |
$
|
333,178
| | | |
$
|
259,790
| |
Less average goodwill
| | | |
46,839
| | | | |
46,839
| | | | |
46,839
| |
Less average core deposit intangibles
| | |
|
4,124
|
| | |
|
4,353
|
| | |
|
5,912
|
|
Average tangible common equity | | |
$
|
347,842
| | | |
$
|
281,986
| | | |
$
|
207,039
| |
Net income
| | |
$
|
11,239
| | | |
$
|
9,753
| | | |
$
|
15,775
| |
Return on average tangible common equity |
|
|
|
12.96
|
%
|
|
|
|
14.03
|
%
|
|
|
|
30.64
|
%
|
| | | | | | | | |
|
| | | | | | | | |
|
| | | 2017 | | | 2016 |
Pro forma return on average tangible common equity |
|
| Second Quarter | | | First Quarter | | | Second Quarter |
Average tangible common equity
| | |
$
|
347,842
| | | |
$
|
281,986
| | | |
$
|
207,039
| |
Pro forma net income
| | |
$
|
11,239
| | | |
$
|
9,753
| | | |
$
|
10,576
| |
Pro forma return on average tangible common equity |
|
|
|
12.96
|
%
|
|
|
|
14.03
|
%
|
|
|
|
20.55
|
%
|
| | | | | | | | |
|
|
Non-GAAP Reconciliation |
For the Quarters Ended |
(Unaudited) |
(In Thousands, Except Share Data and %)
|
|
|
| |
|
| |
|
| |
| | | | | | | | |
|
| | | 2017 | | | 2016 |
Pro forma core return on average tangible equity |
|
| Second Quarter | | | First Quarter | | | Second Quarter |
Pre-tax pro forma net income
| | |
$
|
17,813
| | | |
$
|
15,178
| | | |
$
|
16,908
| |
Adjustments:
| | | | | | | | | |
Add non-core items
| | | |
2,765
| | | | |
874
| | | | |
4,117
| |
Less pro forma core income tax expense
| | |
|
7,659
|
| | |
|
5,768
|
| | |
|
7,874
|
|
Pro forma core net income | | |
$
|
12,919
| | | |
$
|
10,284
| | | |
$
|
13,151
| |
Pro forma core return on average tangible common equity |
|
|
|
14.90
|
%
|
|
|
|
14.79
|
%
|
|
|
|
25.55
|
%
|
| | | | | | | | |
|
| | | 2017 | | | 2016 |
Pro forma core return on average assets and equity |
|
| Second Quarter | | | First Quarter | | | Second Quarter |
Net income
| | |
$
|
11,239
| | | |
$
|
9,753
| | | |
$
|
15,775
| |
Average assets
| | | |
3,224,783
| | | | |
3,172,149
| | | | |
2,900,074
| |
Average equity
| | | |
398,805
| | | | |
333,178
| | | | |
259,790
| |
Return on average assets | | | |
1.40
|
%
| | | |
1.25
|
%
| | | |
2.19
|
%
|
Return on average equity | | | |
11.30
|
%
| | | |
11.87
|
%
| | | |
24.42
|
%
|
Pro forma core net income
| | | |
12,919
| | | | |
10,284
| | | | |
13,151
| |
Pro forma core return on average assets | | | |
1.61
|
%
| | | |
1.31
|
%
| | | |
1.82
|
%
|
Pro forma core return on average equity |
|
|
|
12.99
|
%
|
|
|
|
12.52
|
%
|
|
|
|
20.36
|
%
|
| | | | | | | | |
|
| | | | | | | | |
|
| | | 2017 | | | 2016 |
Pro forma core total revenue |
|
| Second Quarter | | | First Quarter | | | Second Quarter |
Net interest income
| | |
$
|
30,427
| | | |
$
|
30,251
| | | |
$
|
28,358
| |
Noninterest income
| | | |
35,657
| | | | |
31,087
| | | | |
38,356
| |
Less adjustments:
| | | | | | | | | |
Change in fair value of mortgage servicing rights
| | | |
(1,840
|
)
| | | |
(501
|
)
| | | |
-
| |
Gain on sale of securities
| | | |
29
| | | | |
1
| | | | |
2,591
| |
Gain (loss) on sales or write-downs of foreclosed and other assets
| | |
|
62
|
| | |
|
748
|
| | |
|
(254
|
)
|
Pro forma core total revenue |
|
|
$
|
67,833
|
|
|
|
$
|
61,090
|
|
|
|
$
|
64,377
|
|
| | | | | | | | |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170724006181/en/
FB Financial Corporation
Media Contact:
Jeanie
M. Rittenberry, 615-313-8328
jrittenberry@firstbankonline.com
www.firstbankonline.com
or
Financial
Contact:
James R. Gordon, 615-564-1212
jgordon@firstbankonline.com
investorrelations@firstbankonline.com
Source: FB Financial Corporation