FBK 8-K

FB Financial Corp (FBK)

8-K 2022-07-18 For: 2022-07-18

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 par value	FBK	New York Stock Exchange


Exhibit Number						Description of Exhibit
99.1						Earnings Release issued July 18, 2022
99.2						Supplemental Financial Information for the quarter ended June 30 , 2022
99.3						Earnings Presentation dated July 19, 2022
104						Cover Page Interactive Data File (formatted as inline XBRL document)


	FB FINANCIAL CORPORATION


	By:	/s/ Michael M. Mettee
		Michael M. Mettee
		Chief Financial Officer
		(Principal Financial Officer)
Date: July 18, 2022


	2022						2021			Annualized
(dollars in thousands, except per share data)	Second Quarter			First Quarter			Second Quarter			2Q22 / 1Q22 % Change		2Q22 / 2Q21 % Change
Balance Sheet Highlights
Investment securities	$	1,621,344		$	1,686,738		$	1,409,175		(15.6)	%	15.1	%
Mortgage loans held for sale, at fair value	222,400			318,549			697,407			(121.1)	%	(68.1)	%
Commercial loans held for sale, at fair value	37,815			78,179			124,122			(207.1)	%	(69.5)	%
Loans held for investment (HFI)	8,624,337			8,004,976			7,198,954			31.0	%	19.8	%

Allowance for credit losses(a)	126,272			120,049			144,663			20.8	%	(12.7)	%
Total assets	12,193,862			12,674,191			11,918,367			(15.2)	%	2.31	%

Interest-bearing deposits	7,644,035			8,208,580			7,718,974			(27.6)	%	(0.97)	%
Noninterest-bearing deposits	2,895,520			2,787,698			2,484,982			15.5	%	16.5	%
Mortgage escrow deposits	133,180			131,147			166,126			6.22	%	(19.8)	%


Total deposits	10,539,555			10,996,278			10,203,956			(16.7)	%	3.29	%
Borrowings	159,067			155,733			183,962			8.59	%	(13.5)	%
Total common shareholders' equity	1,319,852			1,379,776			1,371,721			(17.4)	%	(3.78)	%
Book value per share	$	28.15		$	29.06		$	28.96		(12.6)	%	(2.80)	%
Total common shareholders' equity to total assets	10.8		%	10.9		%	11.5		%
Tangible book value per common share*	$	22.67		$	23.62		$	23.43		(16.1)	%	(3.24)	%
Adjusted tangible book value per common share*	$	25.24		$	25.12		$	23.04		1.91	%	9.55	%
Tangible common equity to tangible assets*	8.90		%	9.03		%	9.52		%
* Certain measures are considered non-GAAP financial measures. For a reconciliation and discussion of this non-GAAP measure, see “GAAP Reconciliation and Use of non-GAAP Financial Measures” and the corresponding non-GAAP reconciliation tables in this Earnings Release dated July 18, 2022.
(a) Excludes reserve for credit losses on unfunded commitments of $20,399, $16,262, and $13,202 recorded in accrued expenses and other liabilities as of June 30, 2022, March 31, 2022, and June 30, 2021, respectively.


	2022						2021
(dollars in thousands, except share and per share data)	Second Quarter			First Quarter			Second Quarter
Results of operations
Net interest income	$	102,171		$	88,182		$	86,563
NIM	3.52		%	3.04		%	3.18		%
Provisions for credit losses	$	12,318		$	(4,247)		$	(13,839)

Net charge-off (recovery) ratio	0.09		%	(0.03)		%	0.02		%
Noninterest income	$	33,214		$	41,392		$	49,300
Mortgage banking income	$	22,559		$	29,531		$	35,499
Total revenue	$	135,385		$	129,574		$	135,863
Noninterest expense	$	96,997		$	89,272		$	92,960
Mortgage restructuring and offering expenses	$	12,458		$	—		$	605
Core noninterest expense	$	84,539		$	89,272		$	93,142
Efficiency ratio	71.6		%	68.9		%	68.4		%
Core efficiency ratio*	61.1		%	68.1		%	68.9		%

Adjusted pre-tax, pre-provision earnings*	$	52,856		$	40,476		$	41,357
Adjusted Banking segment pre-tax, pre-provision earnings*	$	55,560		$	40,757		$	40,815

Net income applicable to FB Financial Corporation(1)	$	19,345		$	35,236		$	43,294
Diluted earnings per common share	$	0.41		$	0.74		$	0.90
Effective tax rate	25.8		%	20.9		%	23.7		%
Adjusted net income*	$	30,051		$	35,365		$	42,317
Adjusted diluted earnings per common share*	$	0.64		$	0.74		$	0.88


Weighted average number of shares outstanding - fully diluted	47,211,650			47,723,902			47,993,773
Actual shares outstanding - period end	46,881,896			47,487,874			47,360,950
Returns on average:

Assets ("ROAA")	0.62		%	1.13		%	1.46		%

Equity ("ROAE")	5.74		%	10.1		%	13.0		%
Tangible common equity ("ROATCE")*	7.09		%	12.4		%	16.1		%





* Certain measures are considered non-GAAP financial measures. For a reconciliation and discussion of this non-GAAP measure, see “GAAP Reconciliation and Use of non-GAAP Financial Measures” and the corresponding non-GAAP reconciliation tables in this Earnings Release dated July 18, 2022.
(1) Includes a dividend declared and paid by the Company's REIT subsidiary to minority interest preferred shareholders in the second quarters of 2022 and 2021.


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


MEDIA CONTACT:						FINANCIAL CONTACT:

Jeanie M. Rittenberry						Robert Hoehn
615-313-8328						615-564-1212
[email protected]						[email protected]
www.firstbankonline.com						[email protected]


Financial Summary and Key Metrics
(Unaudited)
(In Thousands, Except Share Data and %)
	2022						2021
	Second Quarter			First Quarter			Second Quarter
Statement of Income Data
Total interest income	$	110,214		$	95,127		$	96,329
Total interest expense	8,043			6,945			9,766
Net interest income	102,171			88,182			86,563
Total noninterest income	33,214			41,392			49,300
Total noninterest expense	96,997			89,272			92,960
Earnings before income taxes and provisions for credit losses	38,388			40,302			42,903
Provisions for credit losses	12,318			(4,247)			(13,839)
Income tax expense	6,717			9,313			13,440
Net income applicable to noncontrolling interest	8			—			8
Net income applicable to FB Financial Corporation(c)	$	19,345		$	35,236		$	43,294
Net interest income (tax-equivalent basis)	$	102,926		$	88,932		$	87,321
Adjusted net income*	$	30,051		$	35,365		$	42,317
Adjusted pre-tax, pre-provision earnings*	$	52,856		$	40,476		$	41,357
Per Common Share
Diluted net income	$	0.41		$	0.74		$	0.90
Adjusted diluted net income*	0.64			0.74			0.88

Book value	28.15			29.06			28.96
Tangible book value*	22.67			23.62			23.43
Adjusted tangible book value*	25.24			25.12			23.04
Weighted average number of shares outstanding - fully diluted	47,211,650			47,723,902			47,993,773
Period-end number of shares	46,881,896			47,487,874			47,360,950
Selected Balance Sheet Data
Cash and cash equivalents	$	872,861		$	1,743,311		$	1,717,097
Loans held for investment (HFI)	8,624,337			8,004,976			7,198,954
Allowance for credit losses(a)	(126,272)			(120,049)			(144,663)
Mortgage loans held for sale, at fair value	222,400			318,549			697,407
Commercial loans held for sale, at fair value	37,815			78,179			124,122
Investment securities, at fair value	1,621,344			1,686,738			1,409,175
Other real estate owned, net	9,398			9,721			11,986
Total assets	12,193,862			12,674,191			11,918,367

Interest-bearing deposits	7,644,035			8,208,580			7,718,974
Noninterest-bearing deposits	2,895,520			2,787,698			2,484,982



Total deposits	10,539,555			10,996,278			10,203,956
Borrowings	159,067			155,733			183,962
Total common shareholders' equity	1,319,852			1,379,776			1,371,721
Selected Ratios
Return on average:
Assets	0.62		%	1.13		%	1.46		%
Shareholders' equity	5.74		%	10.1		%	13.0		%
Tangible common equity*	7.09		%	12.4		%	16.1		%
Average shareholders' equity to average assets	10.9		%	11.2		%	11.3		%
Net interest margin (NIM) (tax-equivalent basis)	3.52		%	3.04		%	3.18		%
Efficiency ratio (GAAP)	71.6		%	68.9		%	68.4		%
Core efficiency ratio (tax-equivalent basis)*	61.1		%	68.1		%	68.9		%
Loans HFI to deposit ratio	81.8		%	72.8		%	70.6		%
Total loans to deposit ratio	84.3		%	76.4		%	78.6		%
Noninterest-bearing deposits to total deposits	27.5		%	25.4		%	24.4		%
Yield on interest-earning assets	3.80		%	3.28		%	3.53		%
Cost of interest-bearing liabilities	0.40		%	0.34		%	0.49		%
Cost of total deposits	0.25		%	0.20		%	0.31		%
Credit Quality Ratios
Allowance for credit losses as a percentage of loans HFI(a)	1.46		%	1.50		%	2.01		%

Net charge-offs (recoveries) as a percentage of average loans HFI	0.09		%	(0.03)		%	0.02		%
Nonperforming loans HFI as a percentage of total loans HFI	0.51		%	0.51		%	0.83		%
Nonperforming assets as a percentage of total assets	0.46		%	0.44		%	0.66		%
Preliminary capital ratios (Consolidated)
Total common shareholders' equity to assets	10.8		%	10.9		%	11.5		%
Tangible common equity to tangible assets*	8.90		%	9.03		%	9.52		%
Tier 1 capital (to average assets)	10.2		%	10.2		%	10.1		%
Tier 1 capital (to risk-weighted assets)(b)	11.7		%	12.3		%	12.7		%
Total capital (to risk-weighted assets)(b)	13.6		%	14.2		%	14.9		%
Common equity Tier 1 (to risk-weighted assets) (CET1)(b)	11.5		%	12.0		%	12.4		%


Non-GAAP Reconciliation
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)

	2022				2021
Adjusted net income	Second Quarter		First Quarter		Second Quarter
Income before income taxes	$	26,070	$	44,549	$	56,742
Plus mortgage restructuring and offering expenses	12,458		—		605

Less other non-operating items(1)	(2,010)		(174)		2,151
Adjusted pre-tax net income	40,538		44,723		55,196
Adjusted income tax expense	10,487		9,358		12,879
Adjusted net income	$	30,051	$	35,365	$	42,317
Weighted average common shares outstanding - fully diluted	47,211,650		47,723,902		47,993,773
Adjusted diluted earnings per common share
Diluted earnings per common share	$	0.41	$	0.74	$	0.90
Plus mortgage restructuring and offering expenses	0.27		—		0.01

Less other non-operating items	(0.04)		—		0.04
Less tax effect	0.08		—		(0.01)
Adjusted diluted earnings per common share	$	0.64	$	0.74	$	0.88

(1) 2Q22 includes a $2,010 loss from change in fair value of commercial loans held for sale acquired from Franklin; 1Q22 includes a $174 loss from change in fair value of commercial loans held for sale acquired from Franklin;2Q21 includes a $1,364 gain from change in fair value of commercial loans held for sale acquired from Franklin and a $787 gain from lease terminations.




Adjusted net income	1H 2022		1H 2021		2021
Income before income taxes	$	70,619	$	125,204	$	243,051
Plus mortgage restructuring and offering expenses	12,458		605		605

Less other non-operating items(1)	(2,184)		1,298		11,032
Adjusted pre-tax net income	85,261		124,511		232,624
Adjusted income tax expense(2)	19,846		28,690		51,553
Adjusted net income	$	65,415	$	95,821	$	181,071
Weighted average common shares outstanding - fully diluted	47,466,291		47,976,533		47,955,880
Adjusted diluted earnings per share
Diluted earnings per common share	$	1.15	$	2.00	$	3.97
Plus mortgage restructuring and offering expenses	0.26		0.01		0.01

Less other non-operating items	(0.05)		0.02		0.22
Less tax effect	0.08		(0.01)		(0.02)
Adjusted diluted earnings per common share	$	1.38	$	2.00	$	3.78
(1) 1H 2022 includes a $2,184 loss from change in fair value of commercial loans held for sale acquired from Franklin; 1H 2021 includes a $511 gain from change in fair value on commercial loans held for sale acquired from Franklin and a $787 gain from lease terminations; 2021 includes a $11,172 gain from change in fair value on commercial loans held for sale acquired from Franklin, a loss on swap cancellation of $1,510, a $2,005 gain on other real estate owned, a $787 gain from lease terminations and $1,422 related to certain nonrecurring charitable contributions.
(2) 2021 includes a $1,678 tax benefit (FY21 Q3) related to a change in the value of a net operating loss tax asset related to Franklin.












	2022				2021
Adjusted pre-tax pre-provision earnings	Second Quarter		First Quarter		Second Quarter
Income before income taxes	$	26,070	$	44,549	$	56,742
Plus provisions for credit losses	12,318		(4,247)		(13,839)
Pre-tax pre-provision earnings	38,388		40,302		42,903
Plus mortgage restructuring and offering expenses	12,458		—		605
Less other non-operating items	(2,010)		(174)		2,151
Adjusted pre-tax pre-provision earnings	$	52,856	$	40,476	$	41,357








	2022						2021
Banking segment core efficiency ratio (tax equivalent)	Second Quarter			First Quarter			Second Quarter
Core noninterest expense	$	84,539		$	89,272		$	93,142
Less Core Mortgage segment noninterest expense	25,219			29,688			34,766
Banking segment core noninterest expense	$	59,320		$	59,584		$	58,376
Banking segment net interest income (tax equivalent basis)	$	102,926		$	88,934		$	87,311
Core noninterest income	35,341			42,152			47,819
Less Mortgage segment core noninterest income	22,559			29,531			35,499
Banking segment core noninterest income	12,782			12,621			12,320
Core revenue	138,267			131,084			135,140
Less Mortgage segment core total revenue	22,559			29,529			35,509
Banking segment core total revenue	$	115,708		$	101,555		$	99,631
Banking segment core efficiency ratio (tax-equivalent basis)	51.3		%	58.7		%	58.6		%

Mortgage segment core efficiency ratio (tax equivalent)




Mortgage segment noninterest expense	$	37,677		$	29,688		$	34,766
Less Mortgage restructuring expense	12,458			—			—
Mortgage segment core noninterest expense	$	25,219		$	29,688		$	34,766


Mortgage segment net interest income	—			(2)			10
Mortgage segment noninterest income	22,515			29,409			35,298
Less loss on sales or write-downs of other real estate owned	(44)			(122)			(201)
Mortgage segment core noninterest income	22,559			29,531			35,499
Mortgage segment core total revenue	$	22,559		$	29,529		$	35,509
Mortgage segment core efficiency ratio (tax-equivalent basis)	111.8		%	100.5		%	97.9		%


			Page

Financial Summary and Key Metrics			4

Consolidated Statements of Income			5

Consolidated Balance Sheets			7

Average Balance, Average Yield Earned and Average Rate Paid			8



Loans and Deposits by Market			11

Segment Data			12

Loan Portfolio and Asset Quality			13

Preliminary Capital Ratios			15

Investment Portfolio			16

Non-GAAP Reconciliation			17


Consolidated Statements of Income
For the Quarter Ended
(Unaudited)
(In Thousands, Except Share Data and %)
													Q2 2022		Q2 2022
													vs.		vs.
	2022				2021						Q1 2022	Q2 2021
	Second Quarter		First Quarter		Fourth Quarter		Third Quarter		Second Quarter				Percent variance		Percent variance
Interest income:
Interest and fees on loans	$	99,655	$	86,864	$	89,996	$	89,993	$	89,861			14.7	%	10.9	%
Interest on securities
Taxable	6,499		5,420		4,534		3,989		3,844				19.9	%	69.1	%
Tax-exempt	1,842		1,866		1,885		1,883		1,933				(1.29)	%	(4.71)	%
Other	2,218		977		804		800		691				127.0	%	221.0	%
Total interest income	110,214		95,127		97,219		96,665		96,329				15.9	%	14.4	%
Interest expense:
Deposits	6,591		5,462		5,848		6,596		7,919				20.7	%	(16.8)	%
Borrowings	1,452		1,483		1,616		1,593		1,847				(2.09)	%	(21.4)	%
Total interest expense	8,043		6,945		7,464		8,189		9,766				15.8	%	(17.6)	%
Net interest income	102,171		88,182		89,755		88,476		86,563				15.9	%	18.0	%
Provision for credit losses	8,181		(6,129)		(11,646)		(2,832)		(12,885)				(233.5)	%	(163.5)	%
Provision for credit losses on unfunded commitments	4,137		1,882		877		301		(954)				119.8	%	(533.6)	%
Net interest income after provisions for credit losses	89,853		92,429		100,524		91,007		100,402				(2.79)	%	(10.5)	%
Noninterest income:
Mortgage banking income	22,559		29,531		31,350		45,384		35,499				(23.6)	%	(36.5)	%
Service charges on deposit accounts	2,908		2,914		2,817		2,612		2,266				(0.21)	%	28.3	%
ATM and interchange fees	5,353		5,087		5,310		4,868		5,381				5.23	%	(0.52)	%
Investment services and trust income	2,275		2,132		1,040		2,511		2,999				6.71	%	(24.1)	%
(Loss) gain from securities, net	(109)		(152)		46		51		144				(28.3)	%	(175.7)	%
(Loss) gain on sales or write-downs of other real estate owned	(26)		(498)		26		2,005		(23)				(94.8)	%	13.0	%
Gain (loss) from other assets	18		64		161		177		(4)				(71.9)	%	(550.0)	%
Other income	236		2,314		12,469		1,398		3,038				(89.8)	%	(92.2)	%
Total noninterest income	33,214		41,392		53,219		59,006		49,300				(19.8)	%	(32.6)	%
Total revenue	135,385		129,574		142,974		147,482		135,863				4.48	%	(0.35)	%
Noninterest expenses:
Salaries, commissions and employee benefits	55,181		59,443		58,562		62,818		62,367				(7.17)	%	(11.5)	%
Occupancy and equipment expense	5,853		5,403		5,549		5,979		5,356				8.33	%	9.28	%
Legal and professional fees	3,116		2,607		2,460		2,177		2,090				19.5	%	49.1	%
Data processing	2,404		2,481		2,531		2,595		2,542				(3.10)	%	(5.43)	%

Amortization of core deposits and other intangibles	1,194		1,244		1,295		1,344		1,394				(4.02)	%	(14.3)	%


Advertising	2,031		4,033		3,909		4,200		3,559				(49.6)	%	(42.9)	%
Mortgage restructuring expense	12,458		—		—		—		—				100.0	%	100.0	%
Other expense	14,760		14,061		16,596		15,894		15,652				4.97	%	(5.70)	%
Total noninterest expense	96,997		89,272		90,902		95,007		92,960				8.65	%	4.34	%
Income before income taxes	26,070		44,549		62,841		55,006		56,742				(41.5)	%	(54.1)	%
Income tax expense	6,717		9,313		14,006		9,716		13,440				(27.9)	%	(50.0)	%
Net income applicable to FB Financial Corporation and noncontrolling interest	19,353		35,236		48,835		45,290		43,302				(45.1)	%	(55.3)	%
Net income applicable to noncontrolling interest	8		—		8		—		8				100.0	%	—	%

Net income applicable to FB Financial Corporation	$	19,345	$	35,236	$	48,827	$	45,290	$	43,294			(45.1)	%	(55.3)	%
Weighted average common shares outstanding:
Basic	47,111,055		47,530,520		47,683,682		47,412,214		47,351,969				(0.88)	%	(0.51)	%
Fully diluted	47,211,650		47,723,902		47,896,715		48,007,147		47,993,773				(1.07)	%	(1.63)	%
Earnings per common share:
Basic	$	0.41	$	0.74	$	1.02	$	0.96	$	0.91			(44.6)	%	(54.9)	%
Fully diluted	0.41		0.74		1.02		0.94		0.90				(44.6)	%	(54.4)	%
Fully diluted - adjusted*	0.64		0.74		0.89		0.89		0.88				(13.5)	%	(27.3)	%


Consolidated Balance Sheets
(Unaudited)
(In Thousands, Except %)

													Annualized
													Q2 2022		Q2 2022
													vs.		vs.
	2022				2021						Q1 2022	Q2 2021
	Second Quarter		First Quarter		Fourth Quarter		Third Quarter		Second Quarter				Percent variance		Percent variance
ASSETS
Cash and due from banks	$	79,402	$	61,637	$	91,333	$	100,568	$	60,908			115.6	%	30.4	%
Federal funds sold and reverse repurchase agreements	233,588		134,763		128,087		145,333		59,321				294.1	%	293.8	%
Interest-bearing deposits in financial institutions	559,871		1,546,911		1,578,320		1,078,663		1,596,868				(255.9)	%	(64.9)	%
Cash and cash equivalents	872,861		1,743,311		1,797,740		1,324,564		1,717,097				(200.3)	%	(49.2)	%
Investments:
Available-for-sale debt securities, at fair value	1,618,241		1,683,525		1,678,525		1,572,558		1,404,372				(15.6)	%	15.2	%
Equity securities, at fair value	3,103		3,213		3,367		4,779		4,803				(13.7)	%	(35.4)	%
Federal Home Loan Bank stock, at cost	34,581		34,433		32,217		27,601		29,411				1.72	%	17.6	%
Mortgage loans held for sale, at fair value	222,400		318,549		672,924		755,210		697,407				(121.1)	%	(68.1)	%
Commercial loans held for sale, at fair value	37,815		78,179		79,299		100,496		124,122				(207.1)	%	(69.5)	%
Loans held for investment	8,624,337		8,004,976		7,604,662		7,294,674		7,198,954				31.0	%	19.8	%
Less: allowance for credit losses	126,272		120,049		125,559		139,446		144,663				20.8	%	(12.7)	%
Net loans	8,498,065		7,884,927		7,479,103		7,155,228		7,054,291				31.2	%	20.5	%
Premises and equipment, net	142,474		142,550		143,739		144,737		142,596				(0.21)	%	(0.09)	%
Other real estate owned, net	9,398		9,721		9,777		10,015		11,986				(13.3)	%	(21.6)	%
Operating lease right-of-use assets	41,070		41,037		41,686		44,006		45,423				0.32	%	(9.58)	%
Interest receivable	40,393		39,069		38,528		41,393		42,083				13.6	%	(4.02)	%
Mortgage servicing rights, at fair value	158,678		144,675		115,512		110,591		101,615				38.8	%	56.2	%
Goodwill	242,561		242,561		242,561		242,561		242,561				—	%	—	%
Core deposit and other intangibles, net	14,515		15,709		16,953		18,248		19,592				(30.5)	%	(25.9)	%
Bank-owned life insurance	74,605		74,232		73,519		73,122		72,760				2.02	%	2.54	%
Other assets	183,102		218,500		172,236		185,181		208,248				(65.0)	%	(12.1)	%
Total assets	$	12,193,862	$	12,674,191	$	12,597,686	$	11,810,290	$	11,918,367			(15.2)	%	2.31	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits
Noninterest-bearing	$	2,895,520	$	2,787,698	$	2,740,214	$	2,609,569	$	2,484,982			15.5	%	16.5	%
Interest-bearing checking	3,338,561		3,639,779		3,418,666		2,850,795		3,015,253				(33.2)	%	10.7	%
Money market and savings	3,127,716		3,513,485		3,546,936		3,424,065		3,421,281				(44.0)	%	(8.58)	%
Customer time deposits	1,171,941		1,046,899		1,103,594		1,159,472		1,241,540				47.9	%	(5.61)	%
Brokered and internet time deposits	5,817		8,417		27,487		28,017		40,900				(123.9)	%	(85.8)	%
Total deposits	10,539,555		10,996,278		10,836,897		10,071,918		10,203,956				(16.7)	%	3.29	%
Borrowings	159,067		155,733		171,778		172,710		183,962				8.59	%	(13.5)	%
Operating lease liabilities	45,917		45,528		46,367		48,875		50,396				3.43	%	(8.89)	%
Accrued expenses and other liabilities	129,378		96,783		109,949		115,781		108,239				135.1	%	19.53	%
Total liabilities	10,873,917		11,294,322		11,164,991		10,409,284		10,546,553				(14.9)	%	3.10	%
Shareholders' equity:
Common stock, $1 par value	46,882		47,488		47,549		47,708		47,361				(5.12)	%	(1.01)	%
Additional paid-in capital	864,614		888,168		892,529		897,428		902,782				(10.6)	%	(4.23)	%
Retained earnings	528,851		515,664		486,666		443,140		403,173				10.3	%	31.2	%
Accumulated other comprehensive (loss) income, net	(120,495)		(71,544)		5,858		12,637		18,405				274.4	%	(754.7)	%
Total common shareholders' equity	1,319,852		1,379,776		1,432,602		1,400,913		1,371,721				(17.4)	%	(3.78)	%
Noncontrolling interest	93		93		93		93		93				—	%	—	%
Total equity	1,319,945		1,379,869		1,432,695		1,401,006		1,371,814				(17.4)	%	(3.78)	%
Total liabilities and shareholders' equity	$	12,193,862	$	12,674,191	$	12,597,686	$	11,810,290	$	11,918,367			(15.2)	%	2.31	%


Average Balance, Average Yield Earned and Average Rate Paid

(Unaudited)
(In Thousands, Except %)
	Three Months Ended						Three Months Ended
	June 30, 2022						March 31, 2022
	Average balances		Interest income/ expense		Average yield/ rate		Average balances		Interest income/ expense		Average yield/ rate
Interest-earning assets:
Loans HFI(a)	$	8,323,778	$	96,692	4.66	%	$	7,762,566	$	82,463	4.31	%
Mortgage loans held for sale(b)	215,779		2,350		4.37	%	470,005		3,566		3.08	%
Commercial loans held for sale	56,460		718		5.10	%	78,567		928		4.79	%
Securities:(b)
Taxable	1,474,999		6,499		1.77	%	1,380,897		5,420		1.59	%
Tax-exempt(a)	307,719		2,492		3.25	%	318,849		2,523		3.21	%
Total securities(a)	1,782,718		8,991		2.02	%	1,699,746		7,943		1.90	%
Federal funds sold and reverse repurchase agreements	221,929		421		0.76	%	206,829		192		0.38	%
Interest-bearing deposits with other financial institutions	1,081,474		1,551		0.58	%	1,599,991		638		0.16	%
FHLB stock	34,536		246		2.86	%	32,894		147		1.81	%
Total interest-earning assets(a)	11,716,674		110,969		3.80	%	11,850,598		95,877		3.28	%
Noninterest-earning assets:
Cash and due from banks	91,230						93,419
Allowance for credit losses	(120,297)						(125,980)
Other assets	739,872						823,452
Total noninterest-earning assets	710,805						790,891
Total assets	$	12,427,479					$	12,641,489
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing checking	$	3,415,135	$	3,285	0.39	%	$	3,559,755	$	2,457	0.28	%
Money market(c)	2,842,026		1,416		0.20	%	3,017,746		1,572		0.21	%
Savings deposits	508,511		68		0.05	%	487,945		64		0.05	%
Customer time deposits(c)	1,129,668		1,798		0.64	%	1,077,386		1,320		0.50	%
Brokered and internet time deposits(c)	6,387		24		1.51	%	16,065		49		1.24	%
Time deposits	1,136,055		1,822		0.64	%	1,093,451		1,369		0.51	%
Total interest-bearing deposits	7,901,727		6,591		0.33	%	8,158,897		5,462		0.27	%
Other interest-bearing liabilities:
Securities sold under agreements to repurchase and federal funds purchased	27,233		12		0.18	%	30,056		14		0.19	%

Subordinated debt	129,691		1,434		4.43	%	129,578		1,460		4.57	%
Other borrowings	1,480		6		1.63	%	1,502		9		2.43	%


Average Balance, Average Yield Earned and Average Rate Paid (continued)

(Unaudited)
(In Thousands, Except %)
	Three Months Ended						Three Months Ended						Three Months Ended
	December 31, 2021						September 30, 2021						June 30, 2021
	Average balances		Interest income/ expense		Average yield/ rate		Average balances		Interest income/ expense		Average yield/ rate		Average balances		Interest income/ expense		Average yield/ rate
Interest-earning assets:
Loans HFI(a)(d)	$	7,452,342	$	84,315	4.49	%	$	7,245,313	$	84,115	4.61	%	$	7,085,300	$	83,364	4.72	%
Mortgage loans held for sale(b)	700,044		4,765		2.70	%	709,654		4,687		2.62	%	726,782		4,948		2.73	%
Commercial loans held for sale	87,568		1,033		4.68	%	108,863		1,282		4.67	%	152,699		1,626		4.27	%
Securities:(b)
Taxable	1,270,749		4,534		1.42	%	1,117,647		3,989		1.42	%	976,170		3,844		1.58	%
Tax-exempt(a)	318,579		2,550		3.18	%	311,151		2,546		3.25	%	323,902		2,614		3.24	%
Total securities(a)	1,589,328		7,084		1.77	%	1,428,798		6,535		1.81	%	1,300,072		6,458		1.99	%
Federal funds sold	129,379		183		0.56	%	145,315		135		0.37	%	106,257		41		0.15	%
Interest-bearing deposits with other financial institutions	1,280,183		479		0.15	%	1,404,772		508		0.14	%	1,614,106		494		0.12	%
FHLB stock	28,525		142		1.98	%	28,422		157		2.19	%	31,731		156		1.97	%
Total interest-earning assets(a)	11,267,369		98,001		3.45	%	11,071,137		97,419		3.49	%	11,016,947		97,087		3.53	%
Noninterest-earning assets:
Cash and due from banks	102,398						107,263						134,501
Allowance for credit losses	(139,684)						(144,652)						(157,990)
Other assets	855,734						881,314						906,992
Total noninterest-earning assets	818,448						843,925						883,503
Total assets	$	12,085,817					$	11,915,062					$	11,900,450
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing checking	$	2,983,741	$	2,169	0.29	%	$	2,937,273	$	2,298	0.31	%	$	3,027,435	$	2,689	0.36	%
Money market(e)	3,017,574		2,053		0.27	%	2,997,595		2,322		0.31	%	2,960,264		2,816		0.38	%
Savings deposits	463,002		63		0.05	%	439,470		60		0.05	%	411,711		57		0.06	%
Customer time deposits(e)	1,123,955		1,492		0.53	%	1,200,760		1,840		0.61	%	1,291,125		2,016		0.63	%
Brokered and internet time deposits(e)	27,812		71		1.01	%	32,009		76		0.94	%	39,860		341		3.43	%
Time deposits	1,151,767		1,563		0.54	%	1,232,769		1,916		0.62	%	1,330,985		2,357		0.71	%
Total interest-bearing deposits	7,616,084		5,848		0.30	%	7,607,107		6,596		0.34	%	7,730,395		7,919		0.41	%
Other interest-bearing liabilities:
Securities sold under agreements to repurchase and federal funds purchased	41,338		21		0.20	%	40,437		20		0.20	%	32,543		21		0.26	%

Subordinated debt(f)	129,493		1,591		4.87	%	129,395		1,565		4.80	%	149,155		1,819		4.89	%
Other borrowings	1,525		4		1.04	%	1,547		8		2.05	%	1,569		7		1.79	%


Loans and Deposits by Market

(Unaudited)
(In Thousands)

	2022				2021
	Second Quarter		First Quarter		Fourth Quarter		Third Quarter		Second Quarter
Loans by market
Metropolitan	$	7,005,014	$	6,470,116	$	6,127,930	$	5,863,563	$	5,752,482
Community	682,134		704,254		738,249		745,796		767,001
Specialty lending and other	937,189		830,606		738,483		685,315		679,471
Total	$	8,624,337	$	8,004,976	$	7,604,662	$	7,294,674	$	7,198,954
Deposits by market
Metropolitan	$	6,670,308	$	7,007,149	$	6,981,639	$	5,918,924	$	6,133,823
Community	2,624,380		2,580,610		2,436,548		2,269,511		2,246,922
Mortgage and other(a)	1,244,867		1,408,519		1,418,710		1,883,483		1,823,211
Total	$	10,539,555	$	10,996,278	$	10,836,897	$	10,071,918	$	10,203,956


Segment Data
For the Quarters Ended
(Unaudited)
(In Thousands, Except %)

	2022						2021
	Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter
Banking segment
Net interest income	$	102,171		$	88,184		$	89,616		$	88,576		$	86,553
Provisions for credit losses	12,318			(4,247)			(10,769)			(2,531)			(13,839)

Noninterest income	10,699			11,983			21,850			13,823			14,002


Other noninterest expense	59,320			59,584			60,104			58,777			58,194
Pre-tax income after allocations	$	41,232		$	44,830		$	62,131		$	46,153		$	56,200
Total assets	$	11,469,762		$	11,890,847		$	11,540,560		$	10,712,281		$	10,908,107
Intracompany funding income included in net interest income	4,850			5,666			6,325			6,075			6,110
Core efficiency ratio*	51.3		%	58.7		%	57.5		%	57.9		%	58.6		%
Mortgage segment
Net interest income	$	—		$	(2)		$	139		$	(100)		$	10

Mortgage banking income	22,559			29,531			31,350			45,384			35,499
Other noninterest income	(44)			(122)			19			(201)			(201)

Mortgage restructuring expense	12,458			—			—			—			—
Other noninterest expense	25,219			29,688			30,798			36,230			34,766
Direct (loss) contribution	$	(15,162)		$	(281)		$	710		$	8,853		$	542
Total assets	$	724,100		$	783,344		$	1,057,126		$	1,098,009		$	1,010,260
Intracompany funding expense included in net interest income	4,850			5,666			6,325			6,075			6,110
Core efficiency ratio*	111.8		%	100.5		%	97.8		%	80.0		%	97.9		%
Interest rate lock commitments volume during the period
Direct-to-consumer
Purchase	$	74,704		$	248,723		$	182,037		$	153,664		$	170,249
Refinance	21,052			$	319,369		$	614,863		$	931,516		$	743,914
Total direct-to-consumer	$	95,756		$	568,092		$	796,900		$	1,085,180		$	914,163
Retail:
Purchase	$	513,309		$	497,937		$	450,878		$	528,700		$	572,327
Refinance	91,805			243,078			236,804			398,023			288,043
Total retail	$	605,114		$	741,015		$	687,682		$	926,723		$	860,370

Total interest rate lock commitments volume	$	700,870		$	1,309,107		$	1,484,582		$	2,011,903		$	1,774,533
Interest rate lock commitments pipeline (period end)
Direct-to-consumer	$	11,249		$	210,167		$	272,401		$	396,965		$	446,691
Retail	281,467			331,393			214,995			341,237			340,568

Total	$	292,716		$	541,560		$	487,396		$	738,202		$	787,259
Mortgage sales
Direct-to-consumer	$	325,608		$	650,740		$	765,535		$	809,888		$	922,910
Retail	544,080			633,742			647,066			726,009			758,599

Total	$	869,688		$	1,284,482		$	1,412,601		$	1,535,897		$	1,681,509
Gains and fees from origination and sale of mortgage loans held for sale	$	21,099		$	29,397		$	37,538		$	39,210		$	49,435
Net change in fair value of loans held for sale, derivatives, and other	(5,354)			(7,548)			(12,478)			1,002			(17,579)
Mortgage servicing income	7,966			7,429			7,632			7,539			6,788
Change in fair value of mortgage servicing rights, net of hedging	(1,152)			253			(1,342)			(2,367)			(3,145)
Total mortgage banking income	$	22,559		$	29,531		$	31,350		$	45,384		$	35,499
Mortgage sale margin(a)	2.43		%	2.29		%	2.66		%	2.55		%	2.94		%


Loan Portfolio and Asset Quality
As of or for the Quarter Ended
(Unaudited)
(In Thousands, Except %)
	2022									2021
	Second Quarter			% of Total		First Quarter			% of Total	Fourth Quarter			% of Total	Third Quarter			% of Total	Second Quarter			% of Total
Loan portfolio
Commercial and Industrial (a)	$	1,479,424		17	%	$	1,380,600		17%	$	1,290,565		17%	$	1,252,425		17%	$	1,238,940		17	%
Construction	1,575,331			18	%	1,468,811			19%	1,327,659			17%	1,190,623			16%	1,145,165			16	%
Residential real estate:
1-to-4 family mortgage	1,457,452			17	%	1,346,349			17%	1,270,467			17%	1,175,155			16%	1,126,623			16	%
Residential line of credit	425,485			5	%	392,740			5%	383,039			5%	392,440			5%	401,343			6	%
Multi-family mortgage	391,970			5	%	400,501			5%	326,551			4%	324,662			5%	363,600			5	%
Commercial real estate:
Owner occupied	1,053,872			12	%	978,436			12%	951,582			13%	938,241			13%	923,605			13	%
Non-owner occupied	1,885,122			22	%	1,706,546			21%	1,730,165			23%	1,695,573			23%	1,675,214			23	%
Consumer and other	355,681			4	%	330,993			4%	324,634			4%	325,555			5%	324,464			4	%
Total loans HFI	$	8,624,337		100	%	$	8,004,976		100%	$	7,604,662		100%	$	7,294,674		100%	$	7,198,954		100	%
Allowance for credit losses roll forward summary
Allowance for credit losses at the beginning of the period	$	120,049				$	125,559			$	139,446			$	144,663			$	157,954


Charge-offs	(2,388)					(579)				(3,225)				(2,614)				(859)
Recoveries	430					1,198				984				229				453
Provision for credit losses	8,181					(6,129)				(11,646)				(2,832)				(12,885)


Allowance for credit losses at the end of the period	$	126,272				$	120,049			$	125,559			$	139,446			$	144,663
Allowance for credit losses as a percentage of total loans HFI	1.46		%			1.50		%		1.65		%		1.91		%		2.01		%

Allowance for credit losses on unfunded commitments	$	20,399				$	16,262			$	14,380			$	13,503			$	13,202
Charge-offs
Commercial and Industrial	$	(1,751)				$	(4)			$	(1,224)			$	(2,175)			$	(360)
Construction	—					—				—				(1)				—
Residential real estate:
1-to-4 family mortgage	(23)					—				(5)				—				(16)
Residential line of credit	—					—				—				—				(3)
Multi-family mortgage	—					—				(1)				—				—
Commercial real estate:

Non-owner occupied	—					—				(1,566)				—				—
Consumer and other	(614)					(575)				(429)				(438)				(480)
Total charge-offs	(2,388)					(579)				(3,225)				(2,614)				(859)
Recoveries
Commercial and Industrial	26					958				626				19				87
Construction	11					—				—				3				—
Residential real estate:
1-to-4 family mortgage	14					12				27				33				41
Residential line of credit	16					1				99				1				9

Commercial real estate:
Owner occupied	15					10				13				4				126

Consumer and other	348					217				219				169				190
Total recoveries	430					1,198				984				229				453
Net(charge-offs) recoveries	$	(1,958)				$	619			$	(2,241)			$	(2,385)			$	(406)
Net charge-offs (recoveries) as a percentage of average total loans	0.09		%			(0.03)		%		0.12		%		0.13		%		0.02		%


Loan Portfolio and Asset Quality (continued)
As of or for the Quarter Ended
(Unaudited)
(In Thousands, Except %)

	2022						2021
	Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter
Nonperforming assets(b)
Past due 90 days or more and accruing interest	$	14,585		$	12,873		$	11,735		$	8,901		$	9,098
Nonaccrual	29,535			27,826			35,568			34,126			50,429
Total nonperforming loans held for investment	44,120			40,699			47,303			43,027			59,527
Commercial loans held for sale	1,459			5,087			5,217			5,625			5,844
Other real estate owned:
Foreclosed	6,418			6,692			6,429			6,514			6,488
Excess land and facilities	2,980			3,029			3,348			3,501			5,498
Other assets	527			453			686			347			816
Total nonperforming assets	$	55,504		$	55,960		$	62,983		$	59,014		$	78,173
Total nonperforming loans as a percentage of loans held for investment	0.51		%	0.51		%	0.62		%	0.59		%	0.83		%
Total nonperforming assets as a percentage of total assets	0.46		%	0.44		%	0.50		%	0.50		%	0.66		%
Total accruing loans over 90 days delinquent as a percentage of total assets	0.12		%	0.10		%	0.09		%	0.08		%	0.08		%
Loans restructured as troubled debt restructurings	$	17,054		$	20,601		$	32,435		$	29,645		$	42,678
Troubled debt restructurings as a percentage of loans held for investment	0.20		%	0.26		%	0.43		%	0.41		%	0.59		%


Non-GAAP Reconciliation (continued)
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)

Adjusted net income	YTD 2022		2021		2020		2019		2018
Income before income taxes	$	70,619	$	243,051	$	82,461	$	109,539	$	105,854
Plus mortgage restructuring, offering, and merger and conversion expenses	12,458		605		34,879		7,380		2,265
Plus initial provision for credit losses on acquired loans and unfunded commitments	—		—		66,136		—		—
Less other non-operating items(1)	(2,184)		11,032		(4,400)		—		—
Adjusted pre-tax net income	85,261		232,624		187,876		116,919		108,119
Adjusted income tax expense(2)	19,846		51,553		45,944		27,648		26,034
Adjusted net income	$	65,415	$	181,071	$	141,932	$	89,271	$	82,085
Weighted average common shares outstanding - fully diluted	47,466,291		47,955,880		38,099,744		31,402,897		31,314,981
Adjusted diluted earnings per common share
Diluted earnings per common share	$	1.15	$	3.97	$	1.67	$	2.65	$	2.55
Plus mortgage restructuring, offering, and merger and conversion expenses	0.26		0.01		0.92		0.24		0.07
Plus initial provision for credit losses on acquired loans and unfunded commitments	—		—		1.74		—		—
Less other non-operating items	(0.05)		0.22		(0.11)		—		—
Less tax effect	0.08		(0.02)		0.71		0.06		0.01
Adjusted diluted earnings per common share	$	1.38	$	3.78	$	3.73	$	2.83	$	2.61

(1) YTD2022 includes a $2,184 loss from change in fair value of commercial loans held for sale acquired from Franklin; 2021 includes a $11,172 gain from change in fair value on commercial loans held for sale acquired from Franklin, a loss on swap cancellation of $1,510, a $2,005 gain on other real estate owned, a $787 gain from lease terminations and $1,422 related to certain nonrecurring charitable contributions; 2020 includes $6,838 FHLB prepayment penalties, $1,505 losses on other real estate owned offset by $715 cash life insurance benefit and $3,228 gain from change in fair value on commercial loans held for sale acquired from Franklin.

(2) 2021 includes a $1,678 tax benefit related to a change in the value of a net operating loss tax asset related to Franklin.

Adjusted pre-tax pre-provision earnings	YTD 2022		2021		2020		2019		2018
Income before income taxes	$	70,619	$	243,051	$	82,461	$	109,539	$	105,854
Plus provisions for credit losses	8,071		(40,993)		107,967		7,053		5,398
Pre-tax pre-provision earnings	78,690		202,058		190,428		116,592		111,252
Plus mortgage restructuring, offering, and merger and conversion expenses	12,458		605		34,879		7,380		2,265
Less other non-operating items	(2,184)		11,032		(4,400)		—		—
Adjusted pre-tax pre-provision earnings	$	93,332	$	191,631	$	229,707	$	123,972	$	113,517


Non-GAAP Reconciliation (continued)
As of or for the Period Ended
(Unaudited)
(In Thousands, Except Share Data and %)

	2022						2021
Core efficiency ratio (tax-equivalent basis)	Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter
Total noninterest expense	$	96,997		$	89,272		$	90,902		$	95,007		$	92,960
Less mortgage restructuring expenses	12,458			—			—			—			—
Less offering expenses	—			—			—			—			605
Less gain on lease terminations	—			—			—			—			(787)

Less certain charitable contributions	—			—			1,422			—			—
Core noninterest expense	$	84,539		$	89,272		$	89,480		$	95,007		$	93,142
Net interest income (tax-equivalent basis)	$	102,926		$	88,932		$	90,537		$	89,230		$	87,321
Total noninterest income	33,214			41,392			53,219			59,006			49,300
Less (loss) gain on change in fair value on commercial loans held for sale	(2,010)			(174)			9,921			740			1,364
Less loss on swap cancellation	—			—			—			(1,510)			—

Less (loss) gain on sales or write-downs of other real estate owned and other assets	(8)			(434)			187			2,182			(27)
Less (loss) gain from securities, net	(109)			(152)			46			51			144
Core noninterest income	35,341			42,152			43,065			57,543			47,819
Core revenue	$	138,267		$	131,084		$	133,602		$	146,773		$	135,140
Efficiency ratio (GAAP)(a)	71.6		%	68.9		%	63.6		%	64.4		%	68.4		%
Core efficiency ratio (tax-equivalent basis)	61.1		%	68.1		%	67.0		%	64.7		%	68.9		%
(a) Efficiency ratio (GAAP) is calculated by dividing reported noninterest expense by reported total revenue.

	2022						2021
Banking segment core efficiency ratio (tax equivalent)	Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter
Core noninterest expense	$	84,539		$	89,272		$	89,480		$	95,007		$	93,142
Less Mortgage segment core noninterest expense	25,219			29,688			30,798			36,230			34,766
Banking segment core noninterest expense	$	59,320		$	59,584		$	58,682		$	58,777		$	58,376
Banking segment net interest income (tax-equivalent basis)	$	102,926		$	88,934		$	90,398		$	89,330		$	87,311
Core noninterest income	35,341			42,152			43,065			57,543			47,819
Less Mortgage segment core noninterest income	22,559			29,531			31,350			45,384			35,499
Banking segment core noninterest income	12,782			12,621			11,715			12,159			12,320
Core revenue	138,267			131,084			133,602			146,773			135,140
Less Mortgage segment core total revenue	22,559			29,529			31,489			45,284			35,509
Banking segment core total revenue	$	115,708		$	101,555		$	102,113		$	101,489		$	99,631
Banking segment core efficiency ratio (tax-equivalent basis)	51.3		%	58.7		%	57.5		%	57.9		%	58.6		%

Mortgage segment core efficiency ratio (tax-equivalent)
Mortgage segment noninterest expense	$	37,677		$	29,688		$	30,798		$	36,230		$	34,766

Less mortgage restructuring expense	12,458			—			—			—			—

Mortgage segment core noninterest expense	$	25,219		$	29,688		$	30,798		$	36,230		$	34,766
Mortgage segment net interest income	—			(2)			139			(100)			10
Mortgage segment noninterest income	22,515			29,409			31,369			45,183			35,298
Less (loss) gain on sales or write-downs of other real estate owned	(44)			(122)			19			(201)			(201)
Mortgage segment core noninterest income	22,559			29,531			31,350			45,384			35,499
Mortgage segment core total revenue	$	22,559		$	29,529		$	31,489		$	45,284		$	35,509
Mortgage segment core efficiency ratio (tax-equivalent basis)	111.8		%	100.5		%	97.8		%	80.0		%	97.9		%