FB Financial (FBK) - 2024 Q2 - Quarterly Report

Cash and Cash Equivalents - Cash and cash equivalents decreased to $800.9 million as of June 30, 2024, compared to$1.16 billion as of June 30, 2023[142] Interest Income and Net Interest Income - Total interest income increased to $177.4 million for the three months ended June 30, 2024, up from$170.2 million in the same period in 2023[142] - Net interest income rose to $102.6 million for the three months ended June 30, 2024, compared to$101.5 million in the same period in 2023[142] - Net interest margin (tax-equivalent basis) increased to 3.57% for the three months ended June 30, 2024, up from 3.40% in the same period in 2023[142] - Yield on interest-earning assets rose to 6.16% for the three months ended June 30, 2024, compared to 5.67% in the same period in 2023[142] - Net interest income increased to $103.3 million for the three months ended June 30, 2024, compared to$102.4 million for the same period in 2023, driven by a $7.0 million increase in interest income partially offset by a$6.2 million increase in interest expense[163] - Net interest margin (tax-equivalent basis) increased to 3.57% for the three months ended June 30, 2024, compared to 3.40% for the same period in 2023[166] - Net interest income decreased by $3.4 million to$203.5 million for the six months ended June 30, 2024 compared to $206.9 million for the same period in 2023[169] - Interest income increased by$23.6 million to $354.9 million for the six months ended June 30, 2024, driven by higher yields on average earning assets[169] - Net interest income on a tax-equivalent basis was$203,453 thousand in 2024, slightly down from $206,876 thousand in 2023[172] Noninterest Income - Total noninterest income increased to$25.6 million for the three months ended June 30, 2024, up from $23.8 million in the same period in 2023[142] - Noninterest income increased by$1.8 million to $25.6 million in Q2 2024, driven by a$2.1 million cash life insurance benefit[152] - Noninterest income decreased by $13.6 million (29$33.6 million for the six months ended June 30, 2024 compared to $47.2 million for the same period in 2023[178] - Investment services and trust income increased by$1.5 million to $6.6 million for the six months ended June 30, 2024 compared to$5.2 million for the same period in 2023[178] - Net loss from investment securities was $16.2 million for the six months ended June 30, 2024 compared to a net gain of$41 thousand for the same period in 2023[178] Net Income and Earnings Per Share - Net income applicable to FB Financial Corporation was $40 million for the three months ended June 30, 2024, compared to$35.3 million in the same period in 2023[142] - Basic net income per common share increased to $0.85 for the three months ended June 30, 2024, up from$0.75 in the same period in 2023[142] - Net income applicable to FB Financial Corporation rose to $39.98 million in Q2 2024 from$35.30 million in Q2 2023[150] - Net income increased to $40.0 million for Q2 2024, up from$35.3 million in Q2 2023, with diluted earnings per share rising to $0.85 from$0.75[152] - Net income for the first six months of 2024 decreased to $67.9 million from$71.7 million in the same period of 2023, with diluted earnings per share falling to $1.45 from$1.53[152] Return on Assets and Equity - Return on average assets improved to 1.30% for the three months ended June 30, 2024, compared to 1.10% in the same period in 2023[142] - Return on average tangible common equity increased to 13.1% in Q2 2024 from 12.6% in Q2 2023[150] Loan Portfolio and Credit Quality - Allowance for credit losses on loans HFI as a percentage of loans HFI increased to 1.67% in Q2 2024 from 1.51% in Q2 2023[143] - Nonperforming loans HFI as a percentage of loans HFI rose to 0.79% in Q2 2024 compared to 0.47% in Q2 2023[143] - The provision for credit losses on loans HFI was $3.9 million for the three months ended June 30, 2024, compared to$2.6 million in the same period in 2023[176] - A reversal of provision for credit losses on unfunded commitments was $1.7 million for the three months ended June 30, 2024, compared to$3.7 million in 2023[176] - The provision for credit losses on loans HFI for the six months ended June 30, 2024 was $5.8 million, down from$7.6 million in 2023[176] - A reversal of provision for credit losses on unfunded commitments for the six months ended June 30, 2024 was $2.8 million, compared to$8.2 million in 2023[176] - Nonperforming assets increased to $101.5 million as of June 30, 2024, up from$86.5 million as of December 31, 2023[201] - Nonperforming loans HFI rose by $12.3 million to$73.2 million as of June 30, 2024, primarily in commercial real estate owner-occupied and construction portfolios[202] - Delinquent GNMA optional repurchase loans increased to $22.4 million as of June 30, 2024, compared to$21.2 million as of December 31, 2023[203] - Nonperforming loans HFI as a percentage of total loans HFI increased to 0.79% as of June 30, 2024, up from 0.65% as of December 31, 2023[203] - Total allowance for credit losses on loans HFI increased to $155.1 million as of June 30, 2024, up from$150.3 million as of December 31, 2023[206] - Net charge-offs for the six months ended June 30, 2024, were $1.1 million, compared to$1.1 million for the same period in 2023[208] - Provision for credit losses on loans HFI for the six months ended June 30, 2024, was $5.8 million, down from$7.6 million for the same period in 2023[208] - Allowance for credit losses on loans HFI as a percentage of loans increased to 1.67% as of June 30, 2024, up from 1.60% as of December 31, 2023[208] - Nonperforming assets as a percentage of total assets increased to 0.81% as of June 30, 2024, up from 0.69% as of December 31, 2023[203] - Net interest recoveries on nonperforming assets previously charged off were $1.0 million for the six months ended June 30, 2024, up from$0.4 million for the same period in 2023[201] - Provision for credit losses on loans HFI for Q2 2024 was $3.94 million, compared to$2.58 million in Q2 2023[210] - Net charge-offs for Q2 2024 were $0.55 million, or 0.02$0.72 million, or 0.03% in Q2 2023[212] - Total nonperforming loans HFI as a percentage of total loans HFI increased by 14 basis points to 0.79% as of June 30, 2024[212] - Allowance for credit losses on unfunded commitments decreased to $6.0 million as of June 30, 2024 from$8.8 million as of December 31, 2023[213] - Unfunded loan commitments decreased by 11.9% annualized or $172.0 million during the period, with a$209.1 million decrease in the construction loan category[213] Deposits - Total deposits were $10.47 billion as of June 30, 2024, compared to$10.55 billion as of December 31, 2023[215] - Noninterest-bearing deposits decreased by $31.2 million from December 31, 2023 to June 30, 2024, while interest-bearing checking deposits increased by$124.1 million[215] - Mortgage escrow deposits increased to $107.8 million as of June 30, 2024 from$63.6 million as of December 31, 2023[216] - Public funds deposits decreased by $75.8 million during the period due to management's decision to not renew certain maturing public deposits[216] - Customer time deposits decreased by$125.9 million from December 31, 2023, driven by three large depositor relationship customers shifting deposits for higher yields[216] - Total deposits decreased to $10,468,002 thousand as of June 30, 2024, from$10,548,287 thousand as of December 31, 2023, with a weighted average interest rate increase from 2.39% to 2.76%[217] - Consumer deposits accounted for 45% of total deposits as of June 30, 2024, down from 46% as of December 31, 2023, while commercial deposits increased from 39% to 41%[219] - Estimated uninsured and uncollateralized deposits increased to 30.6% of total deposits as of June 30, 2024, up from 29.7% as of December 31, 2023[221] - Customer time deposits decreased to $1,343,934 thousand as of June 30, 2024, from$1,469,811 thousand as of December 31, 2023, with a higher average rate of 3.95% compared to 3.15%[217] - Brokered and internet time deposits remained stable at $150,361 thousand as of June 30, 2024, with an average rate increase to 5.37$250 and less had a weighted average interest rate of 3.83% as of June 30, 2024, with the majority maturing within six months[220] Securities and Investments - Securities purchased under agreements to resell increased to $59.4 million as of June 30, 2024, from$47.8 million as of December 31, 2023[223] - The fair value of the AFS debt securities portfolio was $1.48 billion as of June 30, 2024, with net unrealized losses of$182.2 million due to interest rate increases[224] - During the six months ended June 30, 2024, the company purchased $366.6 million in AFS debt securities and sold$207.9 million, reinvesting proceeds into securities with a higher weighted average yield of 5.94%[224] - Total AFS debt securities fair value as of June 30, 2024 is $1,482,379 thousand with a weighted average yield of 3.46$428,608 thousand as of June 30, 2024, up from $203,956 thousand in December 2023[226] - Mortgage-backed securities fair value decreased to$880,375 thousand as of June 30, 2024 from $913,932 thousand in December 2023[226] - Securities sold under agreements to repurchase totaled$21.8 million as of June 30, 2024, up from $19.3 million in December 2023[229] - Federal funds purchased totaled$55.0 million as of June 30, 2024, down from $89.4 million in December 2023[229] - FHLB short-term advances borrowing capacity was$1.44 billion as of June 30, 2024, down from $1.76 billion in December 2023[230] - Outstanding borrowings under the Bank Term Funding Program were$130.0 million as of June 30, 2024 with a borrowing rate of 4.85%[231] - Total subordinated debt, net of unamortized debt issuance costs, was $130,511 thousand as of June 30, 2024[233] - Pledged securities related to government, public, trust, and other deposits had carrying values of$869.6 million as of June 30, 2024[235] - Unsecured lines of credit with other commercial banks totaled $370.0 million as of June 30, 2024[235] Liquidity and Capital - Current on-balance sheet liquidity increased to$1,413,658 thousand as of June 30, 2024, compared to $1,353,359 thousand as of December 31, 2023[236] - Total available sources of liquidity decreased to$6,886,661 thousand as of June 30, 2024, from $7,078,812 thousand as of December 31, 2023[236] - On-balance sheet liquidity as a percentage of total assets increased to 11.3$1.50 billion as of June 30, 2024, from $1.45 billion as of December 31, 2023[237] - Book value per common share increased to$32.17 as of June 30, 2024, from $31.05 as of December 31, 2023[237] - Total risk-based capital ratio was 15.1$6.2 million to $75.1 million for the three months ended June 30, 2024 compared to$81.3 million for the same period in 2023[180] - Noninterest expense decreased by $14.2 million to$147.5 million for the six months ended June 30, 2024 compared to $161.7 million for the same period in 2023[180] - Salaries, commissions and employee benefits expense decreased by$5.8 million (11%) to $46.2 million for the three months ended June 30, 2024 compared to$52.0 million for the same period in 2023[180] - Salaries, commissions and employee benefits expense decreased by $10.0 million (10$90.8 million for the six months ended June 30, 2024 compared to $100.8 million for the same period in 2023[180] - The efficiency ratio improved to 58.6$237.9 million and $254.6 million related to participated loans as of June 30, 2024, and December 31, 2023, respectively[186] - Loan participations sold during the three months ended June 30, 2024, and 2023, were$9.0 million and $11.9 million, respectively[186] - Loan participations sold during the six months ended June 30, 2024, and 2023, were$17.0 million and $16.3 million, respectively[186] - The construction concentration ratio was 77.5$2,900,320 thousand and $1,614,307 thousand, respectively[191] - The total commercial real estate owner-occupied loans committed and outstanding as of June 30, 2024, were$1,352,203 thousand and $1,274,705 thousand, respectively[191] - Nonperforming loans in the commercial and