Reported diluted EPS of $0.54 and $2.55 for the fourth quarter and
year-end 2018
Adjusted diluted EPS of $0.55 and $2.61 for the fourth quarter and
year-end 2018
2018 annual loan growth of 15.8% and customer deposit growth of
13.7%
NASHVILLE, Tenn.--(BUSINESS WIRE)--
FB Financial Corporation (the “Company”) (NYSE: FBK), parent company of
FirstBank, reported net income of $17.0 million, or $0.54 per diluted
common share, for the fourth quarter of 2018, compared to net income of
$23.0 million, or $0.74 per diluted common share, for the fourth quarter
of 2017. On an adjusted basis excluding merger-related expenses and the
benefit of the tax law changes in 2017, net income per diluted common
share was $0.55 for the fourth quarter of 2018 compared to $0.59 for the
fourth quarter of 2017.
Additionally, the Company reported net income of $80.2 million, or $2.55
per diluted common share, for the year ended December 31, 2018, compared
to net income of $52.4 million, or $1.86 per diluted common share, for
the year ended December 31, 2017. On an adjusted basis, net income was
$82.1 million, or $2.61 per diluted common share, for the year ended
December 31, 2018 compared to $57.8 million, or $2.05 per diluted common
share for the year ended December 31, 2017, representing a 42.1%
increase in adjusted net income year over year.
President and Chief Executive Officer, Christopher T. Holmes stated, “We
continued to see strong balance sheet growth during the quarter with
annualized loan growth of 14.5% and customer deposit growth of 5.1%. For
the year, our loan growth and customer deposit growth were very strong
at 15.8% and 13.7%, respectively. Our team continues to deliver
outstanding organic growth balanced with solid profitability. Our net
interest margin of 4.50% contracted during the quarter, as expected, but
continues to be near the top of our peers. Our returns on assets and
tangible equity were less than recent quarters, primarily due to our
previously signaled mortgage results, but we are proud of our annual
results and have a great foundation heading into 2019.”
Holmes continued, “Additionally, we announced the Atlantic Capital
branch acquisition during the quarter which will add approximately $600
million in deposits and $400 million in loans. We are on track to close
early in the second quarter of 2019 and continue to be excited about the
customers and teams we are adding in Chattanooga and Knoxville,
Tennessee as well as Dalton, Georgia.”
Performance Summary |
|
|
|
|
| 2018 |
| 2017 |
| Annualized |
| |
| (dollars in thousands, expect per share data) | | | Fourth Quarter |
| Third Quarter | | Fourth Quarter | | 4Q18 / 3Q18
% Change | | 4Q18 / 4Q17
% Change |
Balance Sheet Highlights | | | |
| | | | | | | |
|
Investment securities
| | |
$
|
658,805
| | |
$
|
609,568
| | |
$
|
543,992
| | |
32.0
|
%
| |
21.1
|
%
|
|
Loans - held for sale
| | |
278,815
| | |
323,486
| | |
526,185
| | |
(54.8
|
)%
| |
(47.0
|
)%
|
|
Loans - held for investment
| | |
3,667,511
| | |
3,538,531
| | |
3,166,911
| | |
14.5
|
%
| |
15.8
|
%
|
|
Allowance for loan losses
| | |
28,932
| | |
27,608
| | |
24,041
| | |
19.0
|
%
| |
20.3
|
%
|
|
Total assets
| | |
5,136,764
| | |
5,058,167
| | |
4,727,713
| | |
6.2
|
%
| |
8.7
|
%
|
|
Customer deposits
| | |
4,068,610
| | |
4,017,391
| | |
3,578,694
| | |
5.1
|
%
| |
13.7
|
%
|
|
Brokered and internet time deposits
| | |
103,107
| | |
112,082
| | |
85,701
| | |
(31.8
|
)%
| |
20.3
|
%
|
|
Total deposits
| | |
4,171,717
| | |
4,129,473
| | |
3,664,395
| | |
4.1
|
%
| |
13.8
|
%
|
|
Borrowings
| | |
227,776
| | |
210,968
| | |
347,595
| | |
31.6
|
%
| |
(34.5
|
)%
|
|
Total shareholders' equity
|
|
|
671,857
|
|
|
648,731
|
|
|
596,729
|
|
|
14.1
|
%
|
|
12.6
|
%
|
|
Tangible book value per share(1) | | |
$
|
17.02
| | |
$
|
16.25
| | |
$
|
14.56
| | | | | |
Tangible common equity to tangible assets(1) |
|
|
10.5
|
%
|
|
10.2
|
%
|
|
9.7
|
%
|
|
|
|
|
(1) Certain measures are considered non-GAAP financial
measures. See “Use of non-GAAP Financial Measures” and the
corresponding non-GAAP reconciliation tables in the Supplemental
Financial Information, which accompanies this Earnings Release, as
well as “Use of non-GAAP Financial Measures” and the Appendix in
the Earnings Release Presentation issued January 22, 2019 for a
reconciliation and discussion of this non-GAAP measure. |
|
|
|
|
|
|
|
| For the Three Months Ended December 31, |
| (dollars in thousands, except share data) | | 2018 |
| 2017 |
Results of operations | | | | |
|
Net interest income
| |
$
|
51,367
| | | $48,983 | |
| NIM | |
4.50
|
%
| |
4.63
|
%
|
|
Provision for loan losses
| |
$
|
2,200
| | | $956 | |
| Net charge-off ratio | |
0.06
|
%
| |
0.05
|
%
|
|
Noninterest income
| |
$
|
27,249
| | | $37,017 | |
| Mortgage banking income | |
$
|
18,997
| | | $30,280 | |
|
Total revenue
| |
$
|
78,616
| | | $86,000 | |
|
Noninterest expenses
| |
$
|
53,736
| | | $57,540 | |
| Merger-related expenses | |
$
|
401
| | | $2,069 | |
| Efficiency ratio | |
68.4
|
%
| |
66.9
|
%
|
| Core efficiency ratio(1) | |
65.4
|
%
| |
63.6
|
%
|
|
Pre-tax income
| |
$
|
22,680
| | | $27,504 | |
| Total mortgage banking pre-tax contribution (loss), adjusted(1) | |
$
|
(1,784
|
)
| | $4,430 | |
|
Net income
| |
$
|
17,040
| | | $23,018 | |
|
Diluted earnings per share
| |
$
|
0.54
| | | $0.74 | |
| Effective tax rate(2) | |
24.9
|
%
| |
16.3
|
%
|
|
Net income, adjusted(1) | |
$
|
17,336
| | | $18,265 | |
|
Diluted earnings per share, adjusted(1) | |
$
|
0.55
| | | $0.59 | |
|
Weighted average number of shares - diluted
| |
31,344,949
| | |
31,166,080
| |
|
Actual shares outstanding - period end
| |
30,724,532
| | |
30,535,517
| |
Returns on average: | | | | |
|
Assets ("ROAA")
| |
1.35
|
%
| |
1.96
|
%
|
|
Adjusted(1) | |
1.37
|
%
| |
1.55
|
%
|
|
Equity ("ROAE")
| |
10.3
|
%
| |
15.8
|
%
|
|
Tangible common equity("ROATCE")(1) | |
13.3
|
%
| |
21.3
|
%
|
|
Adjusted(1) |
|
13.5
|
%
|
|
16.9
|
%
|
(1) Certain measures are considered non-GAAP financial
measures. See "Use of non-GAAP Financial Measures" and the
corresponding non-GAAP reconciliation tables in the Supplemental
Financial Information, which accompanies this Earnings Release, as
well as "Use of non-GAAP Financial Measures" and the Appendix in
the Earnings Release Presentation issued January 22, 2019 for a
reconciliation and discussion of this non-GAAP measure. |
(2) Included $5.9 million income tax benefit related to
reduction of deferred tax liability based on changes of enacted
federal corporate tax rates for the fourth quarter of 2017. |
|
|
|
|
Continued Focus on Execution of Strategy
The Company grew loans (HFI) by $129.0 million during the fourth quarter
of 2018, or 14.5% annualized. The Company also increased its contractual
yield on the portfolio by 9 basis points to 5.56% during the fourth
quarter of 2018 compared to the third quarter of 2018 and by 36 basis
points compared to the fourth quarter of 2017.
During the fourth quarter of 2018, the Company grew customer deposits by
$51.2 million, or 5.1% annualized, while total deposit growth was 4.1%
annualized. The net growth in customer deposits was impacted by a $24.6
million seasonal decline in mortgage servicing escrow deposits. The cost
of customer deposits increased to 100 basis points from 79 basis points
in the third quarter of 2018, reflecting the full quarter impact of the
third quarter time deposit campaign.
The Company’s net interest margin (“NIM”) was 4.50% for the fourth
quarter of 2018, compared to 4.71% and 4.63% for the third quarter of
2018 and the fourth quarter of 2017, respectively. Accretion related to
purchased loans and nonaccrual interest contributed 17 basis points to
the Company’s NIM in the fourth quarter of 2018 compared to 25 and 29
basis points for the third quarter of 2018 and the fourth quarter of
2017, respectively.
The Company’s NIM and net interest income were negatively impacted from
the lower level of mortgage loans held for sale which decreased by $92.7
million in average balances during the fourth quarter of 2018,
reflecting lower mortgage volumes in the quarter.
Holmes continued, “Our operating model across both our community and
metropolitan markets allows us to balance growth and profitability. We
will continue to focus on growing customer relationships, with
appropriate pricing, on both sides of the balance sheet to manage our
margin and returns.”
Noninterest Income Impacted by Mortgage
Environment
Noninterest income was $27.2 million for the fourth quarter of 2018,
compared to $34.4 million for the third quarter of 2018 and $37.0
million for the fourth quarter of 2017. Mortgage banking income was
$19.0 million for the fourth quarter of 2018, compared to $26.6 million
for the third quarter of 2018 and $30.3 million for the fourth quarter
of 2017. Interest rate lock commitment volume totaled $1.31 billion in
the fourth quarter of 2018 compared to $1.70 billion in the third
quarter of 2018 and $1.81 billion in the fourth quarter of 2017.
During the fourth quarter of 2018, the Company’s total mortgage direct
contribution was a loss of $1.8 million, which is within the range
previously disclosed. The loss includes severance and related costs
totaling approximately $0.3 million.
Holmes commented, “Our mortgage business has been negatively impacted by
increasing rates and related market conditions, as well as seasonal
decreases, which has challenged profitability. Our mortgage team has
reduced its expenses and repositioned its origination channels for lower
projected volumes. Our team continues to monitor market conditions and
is making additional changes as needed to deliver improved results.”
Operating Efficiency Gains Maintained
Noninterest expense was $53.7 million for the fourth quarter of 2018,
compared to $57.2 million for the third quarter of 2018 and $57.5
million for the fourth quarter of 2017. Adjusted for merger-related
expenses, noninterest expense was $53.3 million for the fourth quarter
of 2018, $57.2 million for the third quarter of 2018 and $55.5 million
for the fourth quarter of 2017.
Chief Financial Officer, James R. Gordon stated, “Noninterest expenses
remained stable within the Banking Segment. Our core efficiency ratio
was 65.4%, driven by our Banking Segment core efficiency ratio of 52.9%.”
Asset Quality Remains Strong
During the fourth quarter of 2018, the Company recognized a provision
for loan losses of $2.2 million, reflecting loan growth, renewals of
previously acquired loans, credit metrics and net charge-offs of 0.06%
of average loans. The Company’s nonperforming assets were 0.61% of total
assets compared to 0.51% at September 30, 2018. Nonperforming loans were
0.46% of loans held for investment at December 31, 2018, compared to
0.30% at September 30, 2018.
Capital Positioned for Growth
“Our earnings continue to drive strong capital levels capable of
sustaining our growth. Our tangible common equity to tangible assets of
10.5% and per share growth in tangible book value of 16.9%
year-over-year easily accommodate our quarterly cash dividend of eight
cents per share. The announced branch acquisition proactively utilizes
our excess capital while providing attractive earnings accretion,”
commented Gordon.
Summary
“Overall, our Company continues to deliver strong organic growth and
solid profitability while being opportunistic on the acquisition front.
We remain committed to helping our customers and associates achieve
their goals while providing shareholders with outstanding returns,”
Holmes concluded.
WEBCAST AND CONFERENCE CALL INFORMATION
The live broadcast of FB Financial Corporation’s earnings conference
call will begin at 8:00 a.m. CT on Wednesday, January 23, 2019, and the
conference call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1631/28765.
An online replay will be available 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 56 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
approximately $5.1 billion in total assets.
SUPPLEMENTAL FINANCIAL INFORMATION AND EARNINGS PRESENTATION
Investors are encouraged to review this Earnings Release in conjunction
with the Supplemental Financial Information and Earnings Presentation
posted on the Company’s website, which can be found at https://investors.firstbankonline.com.
This Earnings Release, the Supplemental Financial Information and the
Earnings Presentation are also included with a Current Report on Form
8-K that the Company furnished to the U.S. Securities and Exchange
Commission (“SEC”) on January 22, 2019.
BUSINESS SEGMENT RESULTS
The Company has included its business segment financial tables as part
of this Earnings Release. A detailed discussion of our business segments
is included in the Company’s Annual Report on Form 10-K filed with the
SEC for the year ended December 31, 2017, and investors are encouraged
to review that discussion in conjunction with this Earnings Release.
FORWARD-LOOKING STATEMENTS
This Earnings Release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, that
have been made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. You can identify these
forward-looking statements in some cases through FB Financial’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 proposed
acquisition, including the timing, anticipated benefits and financial
impact thereof, and the outlook for FB Financial’s future business and
financial performance.
These forward-looking statements include, without limitation, statements
relating to FB Financial’s assets, business, cash flows, condition
(financial or otherwise), credit quality, financial performance,
liquidity, short and long-term performance goals, prospects, results of
operations, strategic initiatives and the timing, benefits, as well as
statements relating to the anticipated benefits, financial impact and
closing of the proposed acquisition by the Bank of the Atlantic Capital
branches, including: the anticipated timing of the closing of the
proposed acquisition, acceptance by the customers of the acquired
Atlantic Capital branches of FB Financial’s products and services, the
opportunities to enhance market share in certain markets, market
acceptance of FB Financial generally in new markets, expectations
regarding future investment in the acquired Atlantic Capital branches’
markets and the integration of the acquired Atlantic Capital branches’
operations. Forward-looking statements are based on the information
known to, and current beliefs and expectations of, FB Financial’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 important factors could cause
actual results to differ materially from those contemplated by the
forward-looking statements in this new release including, without
limitation, the parties’ ability to consummate the Atlantic Capital
acquisition or satisfy the conditions to the completion of the Atlantic
Capital acquisition; the receipt of regulatory approvals required for
the Atlantic Capital acquisition on the terms expected or on the
anticipated schedule; the parties’ ability to meet expectations
regarding the timing and completion and accounting and tax treatment of
the Atlantic Capital acquisition; the possibility that any of the
anticipated benefits of the Atlantic Capital acquisition will not be
fully realized or will not be realized within the expected time period;
the risk that integration of the acquired Atlantic Capital branches’
operations with those of FB Financial will be materially delayed or will
be more costly or difficult than expected; the failure of the Atlantic
Capital acquisition to close for any other reason; the effect of the
announcement of the Atlantic Capital acquisition on employee and
customer relationships and operating results (including, without
limitation, difficulties in maintaining relationships with employees and
customers); the possibility that the Atlantic Capital acquisition may be
more expensive to complete than anticipated, including as a result of
unexpected factors or events; general competitive, economic, political
and market conditions and fluctuations; and the other risk factors set
forth in FB Financial’s December 31, 2017 Form 10-K, filed with the
Securities and Exchange Commission on March 16, 2018, under the captions
“Cautionary note regarding forward-looking statements” and “Risk
factors”. Many of these factors are difficult to foresee and are beyond
FB Financial’s ability to control or predict. FB Financial 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. FB Financial 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, adjusted net
income, adjusted 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), adjusted
mortgage contribution, adjusted return on average assets and equity and
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/adjusted in nature. The Company refers to these non-GAAP
measures as adjusted measures. The corresponding Supplemental Financial
Information and Earnings Release Presentation also presents tangible
assets, tangible common equity, tangible book value per common share,
tangible common equity to tangible assets, return on tangible common
equity, return on average tangible common equity and adjusted 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
demonstrate the effects of significant non-core gains and charges in the
current and prior periods. The Company’s management also believes that
investors find these non-GAAP financial measures useful as they assist
investors in understanding the Company’s underlying operating
performance and in the analysis of ongoing operating trends. In
addition, because intangible assets such as goodwill and other
intangibles, and the other items excluded each vary extensively from
company to company, the Company believes that the presentation of this
information allows investors to more easily compare the Company’s
results to the results of other companies. However, the non-GAAP
financial measures discussed herein should not be considered in
isolation or as a substitute for the most directly comparable or other
financial measures calculated in accordance with GAAP. Moreover, the
manner in which the Company calculates the non-GAAP financial measures
discussed herein may differ from that of other companies reporting
measures with similar names. Investors should understand how such other
banking organizations calculate their financial measures similar or with
names similar to the non-GAAP financial measures the Company has
discussed herein when comparing such non-GAAP financial measures. See
the “Use of non-GAAP Financial Measures” and the corresponding non-GAAP
reconciliation tables in the Supplemental Financial Information as well
as “Use of non-GAAP Financial Measures” and the Appendix in the Earnings
Release Presentation issued January 22, 2019, for a discussion and
reconciliation of these measures to the most directly comparable GAAP
financial measures.
|
|
|
|
|
|
| Financial Summary and Key Metrics |
| (Unaudited) |
|
(In Thousands, Except Share Data and %)
|
|
|
|
|
| 2018 |
| 2017 |
|
|
|
| Fourth Quarter |
| Third Quarter | | Fourth Quarter |
| Statement of Income Data | | | |
| | | |
|
Total interest income
| | |
$
|
63,068
| | |
$
|
62,612
| | |
$
|
55,031
| |
|
Total interest expense
| | |
11,701
|
|
|
9,857
|
| |
6,048
|
|
|
Net interest income
| | |
51,367
| | |
52,755
| | |
48,983
| |
|
Provision for loan losses
| | |
2,200
| | |
1,818
| | |
956
| |
|
Total noninterest income
| | |
27,249
| | |
34,355
| | |
37,017
| |
|
Total noninterest expense
| | |
53,736
|
|
|
57,213
|
| |
57,540
|
|
|
Net income before income taxes
| | |
22,680
| | |
28,079
| | |
27,504
| |
|
Income tax expense
| | |
5,640
|
|
|
6,702
|
| |
4,486
|
|
|
Net income
| | |
$
|
17,040
|
|
|
$
|
21,377
|
| |
$
|
23,018
|
|
|
Net interest income (tax—equivalent basis)
| | |
$
|
51,799
|
|
|
$
|
53,161
|
| |
$
|
49,692
|
|
|
Net income, adjusted*
| | |
$
|
17,336
|
|
|
$
|
21,377
|
| |
$
|
18,265
|
|
| Per Common Share | | | | | | | |
|
Diluted net income
| | |
$
|
0.54
| | |
$
|
0.68
| | |
$
|
0.74
| |
|
Diluted net income, adjusted*
| | |
0.55
| | |
0.68
| | |
0.59
| |
|
Book value
| | |
21.87
| | |
21.12
| | |
19.54
| |
|
Tangible book value*
| | |
17.02
| | |
16.25
| | |
14.56
| |
|
Weighted average number of shares-diluted
| | |
31,344,949
| | |
31,339,628
| | |
31,166,080
| |
|
Period-end number of shares
|
|
|
30,724,532
|
|
|
30,715,792
|
|
|
30,535,517
|
|
| Selected Balance Sheet Data | | | | | | | |
|
Cash and cash equivalents
| | |
$
|
125,356
| | |
$
|
181,630
| | |
$
|
119,751
| |
|
Loans held for investment (HFI)
| | |
3,667,511
| | |
3,538,531
| | |
3,166,911
| |
|
Allowance for loan losses
| | |
(28,932
|
)
| |
(27,608
|
)
| |
(24,041
|
)
|
|
Loans held for sale
| | |
278,815
| | |
323,486
| | |
526,185
| |
|
Investment securities, at fair value
| | |
658,805
| | |
609,568
| | |
543,992
| |
|
Other real estate owned, net
| | |
12,643
| | |
13,587
| | |
16,442
| |
|
Total assets
| | |
5,136,764
| | |
5,058,167
| | |
4,727,713
| |
|
Customer deposits
| | |
4,068,610
| | |
4,017,391
| | |
3,578,694
| |
|
Brokered and internet time deposits
| | |
103,107
| | |
112,082
| | |
85,701
| |
|
Total deposits
| | |
4,171,717
| | |
4,129,473
| | |
3,664,395
| |
|
Borrowings
| | |
227,776
| | |
210,968
| | |
347,595
| |
|
Total shareholders' equity
|
|
|
671,857
|
|
|
648,731
|
|
|
596,729
|
|
| Selected Ratios | | | | | | | |
|
Return on average:
| | | | | | | |
|
Assets
| | |
1.35
|
%
| |
1.72
|
%
| |
1.96
|
%
|
|
Shareholders' equity
| | |
10.3
|
%
| |
13.3
|
%
| |
15.8
|
%
|
|
Tangible common equity*
| | |
13.3
|
%
| |
17.4
|
%
| |
21.3
|
%
|
|
Average shareholders' equity to average assets
| | |
13.2
|
%
| |
12.9
|
%
| |
12.4
|
%
|
|
Net interest margin (NIM) (tax-equivalent basis)
| | |
4.50
|
%
| |
4.71
|
%
| |
4.63
|
%
|
|
Efficiency ratio (GAAP)
| | |
68.4
|
%
| |
65.7
|
%
| |
66.9
|
%
|
|
Core efficiency ratio (tax-equivalent basis)*
| | |
65.4
|
%
| |
63.7
|
%
| |
63.6
|
%
|
|
Loans HFI to deposit ratio
| | |
87.9
|
%
| |
85.7
|
%
| |
86.4
|
%
|
|
Total loans to deposit ratio
| | |
94.6
|
%
| |
93.5
|
%
| |
100.8
|
%
|
|
Yield on interest-earning assets
| | |
5.52
|
%
| |
5.58
|
%
| |
5.20
|
%
|
|
Cost of interest-bearing liabilities
| | |
1.40
|
%
| |
1.20
|
%
| |
0.79
|
%
|
|
Cost of total deposits
|
|
|
1.03
|
%
|
|
0.80
|
%
|
|
0.50
|
%
|
| Credit Quality Ratios | | | | | | | |
|
Allowance for loan losses as a percentage of loans HFI
| | |
0.79
|
%
| |
0.78
|
%
| |
0.76
|
%
|
|
Net charge-off's (recoveries) as a percentage of average loans HFI
| | |
0.06
|
%
| |
0.06
|
%
| |
0.05
|
%
|
|
Nonperforming loans HFI as a percentage of total loans HFI
| | |
0.46
|
%
| |
0.30
|
%
| |
0.32
|
%
|
|
Nonperforming assets as a percentage of total assets (a) |
|
|
0.61
|
%
|
|
0.51
|
%
|
|
1.52
|
%
|
| Preliminary capital ratios (Consolidated) | | | | | | | |
|
Shareholders' equity to assets
| | |
13.1
|
%
| |
12.8
|
%
| |
12.6
|
%
|
|
Tangible common equity to tangible assets*
| | |
10.5
|
%
| |
10.2
|
%
| |
9.7
|
%
|
|
Tier 1 capital (to average assets)
| | |
11.5
|
%
| |
11.3
|
%
| |
10.5
|
%
|
|
Tier 1 capital (to risk-weighted assets)
| | |
12.4
|
%
| |
12.2
|
%
| |
11.4
|
%
|
|
Total capital (to risk-weighted assets)
| | |
13.0
|
%
| |
12.8
|
%
| |
12.0
|
%
|
|
Common Equity Tier 1 (to risk-weighted assets) (CET1)
|
|
|
11.7
|
%
|
|
11.5
|
%
|
|
10.7
|
%
|
*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 reconciliations of
these Non-GAAP measures. Investors are encouraged to refer to the
discussion of non-GAAP measures included in the corresponding
earnings release. |
(a) For the three months ended December 31, 2017, GNMA loans
subject to ability to repurchase were included in nonperforming
assets. The Company derecognized these in the first quarter of
2018 as the perceived benefit has decreased with rising rates. |
|
|
|
|
|
|
| Non-GAAP Reconciliation |
| For the Quarters Ended |
| (Unaudited) |
|
(In Thousands, Except Share Data and %)
|
|
|
|
| |
|
| |
| | | | 2018 | | | 2017 |
| Net income, adjusted |
|
|
| Fourth Quarter |
|
| Third Quarter | | | Fourth Quarter |
| Pre-tax net income | | | | $ | 22,680 | |
|
| $ | 28,079 | | | | $ | 27,504 | |
|
Plus merger-related expenses
| | | |
401
|
|
|
|
—
|
| | |
2,069
|
|
| Pre-tax net income, adjusted | | | | $ | 23,081 | | | | $ | 28,079 | | | | $ | 29,573 | |
|
Income tax expense, adjusted
| | | |
5,745
|
|
|
|
6,702
|
| | |
11,308
|
|
| Net income, adjusted | | | | $ | 17,336 |
|
|
| $ | 21,377 |
| | | $ | 18,265 |
|
Weighted average common shares outstanding fully diluted
| | | |
31,344,949
| | | |
31,339,628
| | | |
31,166,080
| |
| | | | | | | | | | | | |
|
| Diluted earnings per share, adjusted | | | | | | | | | | |
| Diluted earnings per common share | | | | $ | 0.54 | | | | $ | 0.68 | | | | $ | 0.74 | |
|
Plus merger-related expenses
| | | |
0.01
| | | |
—
| | | |
0.07
| |
Less tax effect and benefit of enacted tax laws
| | | |
—
|
|
|
|
—
|
| | |
(0.22
|
)
|
| Diluted earnings per share, adjusted |
|
|
| $ | 0.55 |
|
|
| $ | 0.68 |
|
|
| $ | 0.59 |
|
| | | | | | |
|
| Net income, adjusted |
|
|
|
|
|
| 2018 |
|
| 2017 |
| Pre-tax net income | | | | | | | $ | 105,854 | | | | $ | 73,485 | |
|
Plus merger-related expenses
| | | | | | |
2,265
|
|
|
|
19,034
|
|
| Pre tax net income, adjusted | | | | | | | 108,119 | | | | 92,519 | |
|
Income tax expense, adjusted
| | | | | | |
26,033
|
|
|
|
34,749
|
|
| Net income, adjusted | | | | | | | $ | 82,086 |
|
|
| $ | 57,770 |
|
|
Weighted average common shares outstanding fully diluted
| | | | | | |
31,314,981
| | | |
28,207,602
| |
| | | | | | | | | |
|
| Diluted earnings per share, adjusted | | | | | | | | | | |
| Diluted earnings per share | | | | | | | $ | 2.55 | | | | $ | 1.86 | |
|
Plus merger-related expenses
| | | | | | |
0.07
| | | |
0.67
| |
Less tax effect and benefit of enacted tax laws
| | | | | | |
(0.01
|
)
|
|
|
(0.48
|
)
|
| Diluted earnings per share, adjusted |
|
|
|
|
|
| $ | 2.61 |
|
|
| $ | 2.05 |
|
| | | | | | | | | |
|
| | | | 2018 | | | 2017 |
| Core efficiency ratio (tax-equivalent basis) |
|
|
| Fourth Quarter |
|
| Third Quarter | | | Fourth Quarter |
|
Total noninterest expense
| | | |
$
|
53,736
| | | |
$
|
57,213
| | | |
$
|
57,540
| |
|
Less merger-related expenses
| | | |
401
|
|
|
|
—
|
| | |
2,069
|
|
| Core noninterest expense | | | |
$
|
53,335
|
|
|
|
$
|
57,213
|
| | |
$
|
55,471
|
|
|
Net interest income (tax-equivalent basis)
| | | |
$
|
51,799
| | | |
$
|
53,161
| | | |
$
|
49,692
| |
|
Total noninterest income
| | | |
27,249
| | | |
34,355
| | | |
37,017
| |
|
Less change in fair value on mortgage servicing rights
| | | |
(2,481
|
)
| | |
(2,701
|
)
| | |
(190
|
)
|
Less gain (loss) on sales or write-downs of other
real estate
owned and other assets
| | | |
33
| | | |
446
| | | |
(386
|
)
|
|
Less (loss) gain from securities, net
| | | |
—
|
|
|
|
(27
|
)
| | |
1
|
|
| Core noninterest income | | | |
29,697
|
|
|
|
36,637
|
| | |
37,592
|
|
|
Core revenue
| | | |
$
|
81,496
|
|
|
|
$
|
89,798
|
| | |
$
|
87,284
|
|
|
Efficiency ratio (GAAP)(1) | | | |
68.4
|
%
| | |
65.7
|
%
| | |
66.9
|
%
|
| Core efficiency ratio (tax-equivalent basis) |
|
|
|
65.4
|
%
|
|
|
63.7
|
%
|
|
|
63.6
|
%
|
(1) Efficiency ratio (GAAP) is calculated by dividing reported
noninterest expense by reported total revenue. |
|
|
|
|
|
|
| Non-GAAP Reconciliation |
| For the Quarters Ended |
| (Unaudited) |
|
(In Thousands, Except Share Data and %)
|
|
|
|
| |
|
| |
| | | | 2018 | | | 2017 |
| Banking segment core efficiency ratio (tax equivalent) |
|
|
| Fourth Quarter |
|
| Third Quarter | | | Fourth Quarter |
|
Core consolidated noninterest expense
| | | |
$
|
53,335
| |
|
|
$
|
57,213
| | | |
$
|
55,471
| |
|
Less Mortgage segment noninterest expense
| | | |
16,262
|
|
|
|
18,821
|
| | |
20,117
|
|
|
Adjusted Banking segment noninterest expense
| | | |
37,073
|
|
|
|
38,392
|
| | |
35,354
|
|
|
Adjusted core revenue
| | | |
81,496
| | | |
89,798
| | | |
87,284
| |
|
Less Mortgage segment noninterest income
| | | |
13,956
| | | |
19,232
| | | |
23,825
| |
|
Less change in fair value on mortgage servicing rights
| | | |
(2,481
|
)
|
|
|
(2,701
|
)
| | |
(190
|
)
|
|
Adjusted Banking segment total revenue
| | | |
$
|
70,021
|
|
|
|
$
|
73,267
|
| | |
$
|
63,649
|
|
Banking segment core efficiency ratio (tax-equivalent basis) | | | |
52.9
|
%
| | |
52.4
|
%
| | |
55.5
|
%
|
| | | | | | | | | |
|
Mortgage segment core efficiency ratio (tax equivalent) | | | | | | | | | | |
|
Consolidated Noninterest expense
| | | |
$
|
53,736
| | | |
$
|
57,213
| | | |
$
|
57,540
| |
|
Less Banking segment noninterest expense
| | | |
37,474
|
|
|
|
38,392
|
| | |
37,423
|
|
|
Adjusted Mortgage segment noninterest expense
| | | |
$
|
16,262
| | | |
$
|
18,821
| | | |
$
|
20,117
| |
|
Total noninterest income
| | | |
27,249
| | | |
34,355
| | | |
37,017
| |
|
Less Banking segment noninterest income
| | | |
13,293
| | | |
15,123
| | | |
13,192
| |
|
Less change in fair value on mortgage servicing rights
| | | |
(2,481
|
)
|
|
|
(2,701
|
)
| | |
(190
|
)
|
|
Adjusted Mortgage segment total revenue
| | | |
$
|
16,437
|
|
|
|
$
|
21,933
|
| | |
$
|
24,015
|
|
| Mortgage segment core efficiency ratio (tax-equivalent basis) |
|
|
|
98.9
|
%
|
|
|
85.8
|
%
|
|
|
83.8
|
%
|
| | | | | | | | | |
|
| | | | 2018 | | | 2017 |
| Mortgage contribution, adjusted |
|
|
| Fourth Quarter |
|
| Third Quarter | | | Fourth Quarter |
|
Mortgage segment pre-tax net contribution
| | | |
$
|
(2,283
|
)
| | |
$
|
433
| | | |
$
|
3,269
| |
|
Retail footprint:
| | | | | | | | | | |
|
Mortgage banking income
| | | |
5,041
| | | |
7,417
| | | |
6,455
| |
|
Mortgage banking expenses
| | | |
4,542
|
|
|
|
6,383
|
| | |
5,294
|
|
|
Retail footprint pre-tax net contribution
| | | |
499
|
|
|
|
1,034
|
| | |
1,161
|
|
|
Total mortgage banking pre-tax net (loss) contribution
| | | |
$
|
(1,784
|
)
|
|
|
$
|
1,467
|
| | |
$
|
4,430
|
|
|
Pre-tax net income
| | | |
$
|
22,680
| | | |
$
|
28,079
| | | |
$
|
27,504
| |
|
% total mortgage banking pre-tax net contribution
| | | |
N/A
| | | |
5.2
|
%
| | |
16.1
|
%
|
|
Pre-tax net income, adjusted
| | | |
$
|
23,081
| | | |
$
|
28,079
| | | |
$
|
29,573
| |
% total mortgage banking pre-tax net contribution, adjusted
|
|
|
|
N/A
|
|
|
|
5.2
|
%
|
|
|
15.0
|
%
|
| | | | | | | | | |
|
| | | | 2018 | | | 2017 |
| Tangible assets and equity |
|
|
| Fourth Quarter |
|
| Third Quarter | | | Fourth Quarter |
| Tangible Assets | | | | | | | | | | |
|
Total assets
| | | |
$
|
5,136,764
| | | |
$
|
5,058,167
| | | |
$
|
4,727,713
| |
|
Less goodwill
| | | |
137,190
| | | |
137,190
| | | |
137,190
| |
|
Less intangibles, net
| | | |
11,628
|
|
|
|
12,403
|
| | |
14,902
|
|
| Tangible assets | | | |
$
|
4,987,946
|
|
|
|
$
|
4,908,574
|
| | |
$
|
4,575,621
|
|
| Tangible Common Equity | | | | | | | | | | |
|
Total shareholders' equity
| | | |
$
|
671,857
| | | |
$
|
648,731
| | | |
$
|
596,729
| |
|
Less goodwill
| | | |
137,190
| | | |
137,190
| | | |
137,190
| |
|
Less intangibles, net
| | | |
11,628
|
|
|
|
12,403
|
| | |
14,902
|
|
| Tangible common equity | | | |
$
|
523,039
|
|
|
|
$
|
499,138
|
| | |
$
|
444,637
|
|
|
Common shares outstanding
| | | |
30,724,532
| | | |
30,715,792
| | | |
30,535,517
| |
|
Book value per common share
| | | |
$
|
21.87
| | | |
$
|
21.12
| | | |
$
|
19.54
| |
| Tangible book value per common share | | | |
$
|
17.02
| | | |
$
|
16.25
| | | |
$
|
14.56
| |
|
Total shareholders' equity to total assets
| | | |
13.1
|
%
| | |
12.8
|
%
| | |
12.6
|
%
|
| Tangible common equity to tangible assets | | | |
10.5
|
%
|
|
|
10.2
|
%
| | |
9.7
|
%
|
|
Net income
| | | |
$
|
17,040
|
|
|
|
$
|
21,377
|
| | |
$
|
23,018
|
|
| Return on tangible common equity |
|
|
|
12.9
|
%
|
|
|
17.0
|
%
|
|
|
20.5
|
%
|
|
|
|
|
|
|
| Non-GAAP Reconciliation |
| For the Quarters Ended |
| (Unaudited) |
|
(In Thousands, Except Share Data and %)
|
|
|
|
| |
|
| |
| | | | 2018 | | | 2017 |
| Return on average tangible common equity |
|
|
| Fourth Quarter |
|
| Third Quarter | | | Fourth Quarter |
|
Total average shareholders' equity
| | | |
$
|
659,050
| |
|
|
$
|
638,388
| | | |
$
|
578,856
| |
|
Less average goodwill
| | | |
137,190
| | | |
137,190
| | | |
137,190
| |
|
Less average intangibles, net
| | | |
12,016
|
|
|
|
12,803
|
| | |
13,726
|
|
| Average tangible common equity | | | |
$
|
509,845
| | | |
$
|
488,395
| | | |
$
|
427,940
| |
|
Net income
| | | |
$
|
17,040
| | | |
$
|
21,377
| | | |
$
|
23,018
| |
| Return on average tangible common equity |
|
|
|
13.3
|
%
|
|
|
17.4
|
%
|
|
|
21.3
|
%
|
| | | | | | |
|
| | | | 2018 | | | 2017 |
| Return on average tangible common equity, adjusted |
|
|
| Fourth Quarter |
|
| Third Quarter | | | Fourth Quarter |
|
Average tangible common equity
| | | |
$
|
509,845
| | | |
$
|
488,395
| | | |
$
|
427,940
| |
| Net income, adjusted | | | |
17,336
| | | |
21,377
| | | |
18,265
| |
| Return on average tangible common equity, adjusted |
|
|
|
13.5
|
%
|
|
|
17.4
|
%
|
|
|
16.9
|
%
|
| | | | | | | | | |
|
| Return on average tangible common equity |
|
|
|
|
|
| 2018 |
|
| 2017 |
|
Total average shareholders' equity
| | | | | | |
$
|
629,922
| | | |
$
|
466,219
| |
|
Less average goodwill
| | | | | | |
137,190
| | | |
84,997
| |
|
Less average intangibles, net
| | | | | | |
12,815
|
|
|
|
8,047
|
|
| Average tangible common equity | | | | | | |
$
|
479,917
| | | |
$
|
373,175
| |
|
Net income
| | | | | | |
80,236
| | | |
52,398
| |
| Return on average tangible common equity |
|
|
|
|
|
|
16.7
|
%
|
|
|
14.0
|
%
|
| | | | | | | | | |
|
| Return on average tangible common equity, adjusted |
|
|
|
|
|
| 2018 |
|
| 2017 |
|
Average tangible common equity
| | | | | | |
$
|
479,917
| | | |
$
|
373,175
| |
| Net income, adjusted | | | | | | |
82,086
| | | |
57,770
| |
| Return on average tangible common equity, adjusted |
|
|
|
|
|
|
17.1
|
%
|
|
|
15.5
|
%
|
| | | | | | | | | |
|
| | | | 2018 | | | 2017 |
| Return on average assets and equity, adjusted |
|
|
| Fourth Quarter |
|
| Third Quarter | | | Fourth Quarter |
|
Net income
| | | |
$
|
17,040
| | | |
$
|
21,377
| | | |
$
|
23,018
| |
|
Average assets
| | | |
5,005,158
| | | |
4,932,197
| | | |
4,664,669
| |
|
Average equity
| | | |
659,050
| | | |
638,388
| | | |
578,856
| |
| Return on average assets | | | |
1.35
|
%
| | |
1.72
|
%
| | |
1.96
|
%
|
| Return on average equity | | | |
10.3
|
%
| | |
13.3
|
%
| | |
15.8
|
%
|
|
Net income, adjusted
| | | |
$
|
17,336
| | | |
$
|
21,377
| | | |
$
|
18,265
| |
| Return on average assets, adjusted | | | |
1.37
|
%
| | |
1.72
|
%
| | |
1.55
|
%
|
| Return on average equity, adjusted |
|
|
|
10.4
|
%
|
|
|
13.3
|
%
|
|
|
12.5
|
%
|
| | | | | | | | | |
|
| Return on average assets and equity, adjusted |
|
|
|
|
|
| 2018 |
|
| 2017 |
|
Net income
| | | | | | |
$
|
80,236
| | | |
$
|
52,398
| |
|
Average assets
| | | | | | |
4,844,865
| | | |
3,811,158
| |
|
Average equity
| | | | | | |
629,922
| | | |
466,219
| |
| Return on average assets | | | | | | |
1.66
|
%
| | |
1.37
|
%
|
| Return on average equity | | | | | | |
12.74
|
%
| | |
11.24
|
%
|
|
Net income, adjusted
| | | | | | |
$
|
82,086
| | | |
$
|
57,770
| |
| Return on average assets, adjusted | | | | | | |
1.69
|
%
| | |
1.52
|
%
|
| Return on average equity, adjusted |
|
|
|
|
|
|
13.0
|
%
|
|
|
12.4
|
%
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190122005951/en/
MEDIA CONTACT:
Jeanie M. Rittenberry
615-313-8328
jrittenberry@firstbankonline.com
www.firstbankonline.com
FINANCIAL CONTACT:
James R. Gordon
615-564-1212
jgordon@firstbankonline.com
investorrelations@firstbankonline.com
Source: FB Financial Corporation