FB Financial Corporation (FBK) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals strong financial performance with record growth in loans and deposits, a positive net interest margin, and solid returns on assets and equity. The Q&A section highlights management's confidence in mortgage banking, a strong loan pipeline, and strategic M&A opportunities. Despite some unclear responses, the overall sentiment is positive, supported by the company's strategic growth plans and solid financial metrics. Given the market cap, a positive stock price movement between 2% to 8% is anticipated over the next two weeks.
Key Financial Performance
Earnings Per Share (EPS) $1.07 for the quarter and adjusted EPS of $1.16. For the year, EPS was $2.45 and adjusted EPS was $3.99.
Tangible Book Value Grew at a compound annual growth rate of 11.6% since the IPO.
Pre-tax Pre-provision Net Revenue $71.1 million or $77.1 million on an adjusted basis for the quarter.
Net Interest Income $150.6 million for the quarter.
Net Interest Margin 3.98% for the quarter, a 3 basis point expansion over the third quarter.
Return on Average Assets 1.4% or 1.51% on an adjusted basis for the quarter.
Return on Average Tangible Common Equity 14.4% or 15.9% on an adjusted basis for the quarter.
Loans Held for Investment Grew 29% year-over-year.
Deposits Increased by 25% year-over-year.
Net Income $57 million or $61.5 million on an adjusted basis for the quarter. For the year, net income was $122.6 million and adjusted net income was just over $200 million.
Noninterest Expense $107.6 million or $100.4 million on an adjusted basis for the quarter. Banking core noninterest expense totaled $88 million for the quarter and $298 million for the full year.
Provision Expense $1.2 million for the quarter due to low charge-offs and minimal changes in modeled reserves.
Allowance for Loan Losses $186 million or 1.5% of loans held for investment.
Loan Growth $86 million for the quarter, approximately 3% on an annualized basis.
Deposit Growth $97 million for the quarter, approximately 3% on an annualized basis.
Annualized Net Charge-offs 5 basis points in the quarter.
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Operating Highlights
Customer focus: The company plans to deepen relationships, provide better products and services, and acquire more associates and customers to grow the business in 2026.
Market disruption: The company experienced market disruption in its geographies, creating opportunities for growth.
Southern States Bank acquisition: The acquisition added approximately 20% to the company's size, contributing to a 29% growth in loans and 25% growth in deposits year-over-year.
Operational efficiencies: Reorganized leadership responsibilities and added new associates to optimize the organization and enhance customer experience.
Expense management: Noninterest expense for the year totaled $298 million, with adjustments for merger and integration expenses, performance-based incentives, and other nonrecurring costs.
Stock repurchase: Repurchased 1.7 million shares (3% of the company) to deploy excess capital and demonstrate belief in the franchise.
Growth strategy: Focus on organic growth and leveraging market opportunities to achieve high single-digit growth in loans and deposits in 2026.
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Risk or Challenges
Organic Growth in Loans and Deposits: Underperformance in organic growth for loans and deposits in 2025 due to economic conditions, distractions from the acquisition, and related organizational changes.
Economic Conditions: Economic conditions negatively impacted organic growth in loans and deposits.
Acquisition Distractions: The acquisition of Southern States Bank caused distractions that contributed to underperformance in organic growth.
Organizational Changes: Organizational changes related to the acquisition impacted operational focus and growth.
Loan Payoff Activity: Late quarter payoff activity reduced loan growth by about half in Q4 2025, particularly in C&I and CRE loan categories.
Competitive Market Conditions: New production trends remain competitive on rate and structure, impacting loan yields and deposit costs.
Nonperforming Assets: Slight increase in nonperforming assets due to higher past dues in consumer portfolios and optional GNMA repurchase portfolio.
Merger and Integration Expenses: $4.6 million in merger and integration expenses incurred, expected to conclude by Q1 2026.
Higher Noninterest Expenses: Higher-than-expected year-end increases in technology costs, professional services, and other non-run-rate expenses totaling $1.5 million.
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Guidance & Outlook
Growth Expectations: The company expects strong growth opportunities in 2026, both organically and through other means. They anticipate returning to a high single-digit growth rate for loans and deposits in 2026.
Net Interest Margin (NIM): The company projects a net interest margin, exclusive of loan accretion, to land between 3.78% and 3.83% in the first quarter of 2026 and remain consistent for the full year. Loan accretion is expected to add an additional 15 basis points.
Fee Income Growth: Fee income is expected to grow in the upper single-digit range in 2026 as the company grows its customer base, adds product offerings, and deepens relationships with current customers.
Expense Guidance: Banking expenses are expected to range between $325 million and $335 million for the full year 2026, with an efficiency ratio in the low 50s for the year and at 50% by year-end 2026. This excludes investments in revenue producers or market expansion.
Capital Deployment: The company executed a large stock repurchase transaction in Q4 2025, repurchasing 1.7 million shares (3% of the company). This demonstrates confidence in the franchise and positions the company for future growth.
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Shareholder Return Plan
Share Repurchase Program: In the fourth quarter, FB Financial executed a significant stock repurchase transaction, buying back over 1.7 million shares, which represented approximately 3% of the company. This transaction was conducted with the estate of the late Mr. Jim Ayres, allowing the estate to diversify its holdings and gain liquidity. The company viewed this as a beneficial deployment of excess capital and a demonstration of confidence in its franchise and growing business.
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Key Q&A
Q:Does management anticipate any additional share repurchases from the Ayers Estate?
A:Management does not anticipate any additional share repurchases from the Ayers Estate based on their conversations, though they acknowledge that circumstances could change.
Q:Is mortgage banking on the right path, or does the platform need additional tweaking?
A:Management believes mortgage banking is on the right path, with significant improvement in contribution from negative to positive over the past two years. They are pleased with the current structure but are always open to tweaks and improvements.
Q:What does management think about the current M&A climate, and is there optimism for additional deals?
A:Management observes a lot of industry-wide conversations and strategic evaluations. They will continue to evaluate opportunities and act on the right ones, emphasizing customer focus and weighing the potential distractions of transactions.
Q:How did elevated paydowns impact loan growth, and what is the outlook for growth?
A:Elevated paydowns, especially in the last week of the quarter, impacted loan growth. Management expects high single-digit growth for the year, driven by current teams without incremental hires, with growth expected across various markets and asset classes.
Q:What is the outlook for expenses, and were there any non-run rate expenses in the fourth quarter?
A:Non-run rate expenses in the fourth quarter included $3 million in performance-based compensation, $1.2 million in franchise tax, and professional services fees. Management reiterated their expense guidance for 2026, emphasizing discipline and operating leverage.
Q:What is the opportunity for talent acquisition amid M&A disruption?
A:Management sees both immediate and long-term opportunities for talent acquisition due to M&A disruption and market activity. They emphasize culture, long-term planning, and fair compensation to attract and retain talent.
Q:What is the loan pipeline and client sentiment?
A:The loan pipeline is strong, with clients adapting to the new norm and showing positive sentiment. There is increased activity in new projects and deals, particularly in C&I and real estate.
Q:What is the outlook for core deposit growth in 2026?
A:Core deposit growth remains a focus, with strategies including enhancing customer experience, treasury management platforms, and activating relationships across consumer and commercial segments.
Q:What is management's appetite for incremental M&A, and what would the right opportunity look like?
A:Management is open to M&A opportunities in the Southeast, including the Carolinas, Virginia, Georgia, Alabama, and northern Florida. They prefer well-performing banks with assets between $2 billion and $7 billion, though they may consider smaller institutions in attractive markets.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on incremental deposit betas and the exact impact of competitive pressures on deposit costs. They also gave a broad and non-specific response regarding the immediacy and scale of talent acquisition opportunities amid M&A disruption.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Chief Financial
FB Financial
Financial Officer
Financial release
Holmes
Investor Relations
Officer Mettee
President
Relations page
SEC
Southern
accretion basis
activity loan
area
base
benefit
charge offs
credit
expansion
expense
franchise
geography
income interest
interest margin
loan accretion
loan deposit
mid digit
opportunity market
repurchase transaction
return asset
service
shareholder
statement
talent
website
FBK Transcript
FB Financial Corporation (FBK) Q4 2025 Earnings Call Transcript
Positive1-22
The earnings call reveals strong financial performance with record growth in loans and deposits, a positive net interest margin, and solid returns on assets and equity. The Q&A section highlights management's confidence in mortgage banking, a strong loan pipeline, and strategic M&A opportunities. Despite some unclear responses, the overall sentiment is positive, supported by the company's strategic growth plans and solid financial metrics. Given the market cap, a positive stock price movement between 2% to 8% is anticipated over the next two weeks.
FB Financial Corporation (FBK) Q3 2025 Earnings Call Transcript
Positive10-14
The earnings call summary indicates strong financial performance with positive growth projections, accretive earnings from the Southern States merger, and plans for organic and acquisitive growth. The Q&A section supports this with confidence in future growth, better-than-expected EPS accretion, and strategic focus on core deposit growth. Despite some unclear responses, the overall sentiment is positive, with a focus on expanding market presence and capitalizing on market disruptions. The market cap suggests moderate sensitivity, leading to a 'Positive' prediction for stock price movement.
FB Financial Corporation (FBK) Q2 2025 Earnings Call Transcript
Positive7-15
The earnings call reflects a positive sentiment due to several factors: strong loan growth and new loan yields, improved efficiency ratio, and optimistic guidance for future growth and M&A opportunities. Although the Q&A section revealed some uncertainties, such as the impact of potential M&A and market disruptions, the overall sentiment remains positive. The company's strategic combination with Southern States Banc and the maintenance of strong capital ratios further support a positive outlook, likely resulting in a 2% to 8% stock price increase over the next two weeks.
Earnings call transcript: FinecoBank sees strong Q1 2025 growth, stock dips
Positive5-7
The company shows strong financial performance with increased net profit, revenues, and trading profit. Despite challenges, they maintain a solid cost-income ratio and plan for shareholder returns, including potential buybacks. The Q&A session revealed growth strategies, though some management responses lacked clarity. Given the company's small market cap, the positive financial results and optimistic guidance suggest a likely stock price increase in the short term.
FBK Slides
FBK Report
Frequently Asked Questions
Where does this earnings call transcript come from?
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Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
