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Press Release

FB Financial Corporation Reports 2018 Fourth Quarter and Annual Results

Company Release - 1/22/2019 5:03 PM ET

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 %
 
 

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

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