FB Financial (US:FBK)2021-05-06 16:00Financial Performance - Total interest income for Q1 2021 was $94,785,000, an increase of 36% from $69,674,000 in Q1 2020[171] - Net interest income for Q1 2021 reached $82,576,000, up 47% from $56,249,000 in Q1 2020[171] - Net income applicable to FB Financial Corporation for Q1 2021 was $52,874,000, significantly higher than $745,000 in Q1 2020[171] - Return on average assets improved to 1.86% in Q1 2021 from 0.05% in Q1 2020[172] - Net income for the three months ended March 31, 2021, increased to $52.9 million from $0.7 million for the same period in 2020, with diluted earnings per share rising to $1.10 from $0.02[193] Asset and Deposit Growth - Total assets as of March 31, 2021, were $11,935,826,000, a substantial increase from $6,655,687,000 as of March 31, 2020[171] - Customer deposits rose to $10,219,173,000 in Q1 2021, compared to $5,356,569,000 in Q1 2020, marking an increase of 90%[171] - Total assets increased by 6.5% to $11.94 billion as of March 31, 2021, compared to $11.21 billion as of December 31, 2020[199] - Total deposits grew by $0.80 billion to $10.26 billion at March 31, 2021, up from $9.46 billion at December 31, 2020[200] Noninterest Income and Expenses - Total noninterest income increased to $66,730,000 in Q1 2021, compared to $42,700,000 in Q1 2020, reflecting a 56% growth[171] - Noninterest income for Q1 2021 increased by $24.0 million to $66.7 million, primarily driven by a $22.6 million rise in mortgage banking income[197] - Noninterest expense increased to $94.7 million in Q1 2021, compared to $68.6 million in Q1 2020, reflecting higher mortgage commissions and costs from acquisitions[198] - Total noninterest expense increased by $26.1 million to $94.7 million in Q1 2021 from $68.6 million in Q1 2020[240] Credit Quality and Provisions - Provisions for credit losses decreased to $(13,854,000) in Q1 2021 from $29,565,000 in Q1 2020, indicating improved credit quality[171] - The company recorded a reversal in provisions for credit losses amounting to $13.9 million for Q1 2021, compared to a provision of $29.6 million in Q1 2020[194] - The provision for credit losses showed a reversal of $11.6 million in Q1 2021, compared to an expense of $28.0 million in Q1 2020, indicating a significant improvement in credit quality[226] - Total nonperforming assets increased to $91.422 million as of March 31, 2021, compared to $49.266 million as of December 31, 2020, representing an increase of 85.5%[282] Mergers and Acquisitions - The company plans to pursue mergers with Franklin Financial Network, Inc. and FNB Financial Corp., aiming for enhanced operational synergies and market expansion[168] - The company completed the merger with Franklin Financial Network, acquiring total assets of $3.63 billion and loans of $2.79 billion[189] - The merger with FNB Financial Corp. resulted in the acquisition of total assets of $258.2 million and loans of $182.2 million[192] Efficiency and Management - The efficiency ratio improved to 63.4% in Q1 2021, down from 69.3% in Q1 2020, indicating better cost management[172] - The adjusted efficiency ratio (tax-equivalent basis) for Q1 2021 was 63.0%, an improvement from 65.7% in Q1 2020[181] - The company’s strategy includes modifying loans to assist borrowers with deteriorating financial conditions, which may lead to higher nonperforming assets but aims for long-term recoveries[277] Interest Rate and Risk Management - The company monitors the impact of interest rate changes on net interest income and economic value of equity (EVE) using rate shock analysis[343] - A +400 basis point increase in interest rates is projected to result in a 52.1% increase in net interest income for Year 1 and a 61.2% increase for Year 2 as of March 31, 2021[344] - The company maintains an asset-sensitive position due to a floating rate structure in loans and a composition of liabilities primarily consisting of core deposits[346] - The company utilizes derivative financial instruments to mitigate interest rate risk exposure and facilitate customer needs[350] Shareholder Equity and Dividends - Total shareholders' equity increased to $1.33 billion at March 31, 2021, up from $1.29 billion at December 31, 2020, with a book value per share of $28.08[338] - The Company declared and paid shareholder dividends of $0.11 per share, totaling $5.3 million for the three months ended March 31, 2021, compared to $0.09 per share, or $2.9 million, for the same period in 2020[330]