FBK 8-K

FB Financial Corp (FBK)

8-K 2021-01-25 For: 2021-01-25

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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 January 25, 2021
99.2						Supplemental Financial Information for the quarter ended Dec ember 3 1 , 2020
99.3						Earnings Presentation dated January 26, 2021
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

Date: January 25, 2021


	2020						2019			Annualized
(dollars in thousands, expect per share data)	Fourth Quarter			Third Quarter			Fourth Quarter			4Q20 / 3Q20 % Change		4Q20 / 4Q19 % Change
Balance Sheet Highlights
Investment securities	$	1,176,991		$	1,164,910		$	691,676		4.13	%	70.2	%
Mortgage loans held for sale, at fair value	683,770			610,695			262,518			47.6	%	160.5	%
Commercial loans held for sale, at fair value	215,403			241,256			—			(42.6)	%	100.0	%
Loans - held for investment (HFI)	7,082,959			7,213,538			4,409,642			(7.20)	%	60.6	%
Allowance for credit losses	170,389			183,973			31,139			(29.4)	%	447.2	%
Total assets	11,207,330			11,010,438			6,124,921			7.11	%	83.0	%
Customer deposits	9,396,478			9,001,673			4,914,587			17.4	%	91.2	%
Brokered and internet time deposits	61,559			92,074			20,351			(131.8)	%	202.5	%
Total deposits	9,458,037			9,093,747			4,934,938			15.9	%	91.7	%
Borrowings	238,324			438,838			304,675			(181.8)	%	(21.8)	%
Total common shareholders' equity	1,291,289			1,244,998			762,329			14.8	%	69.4	%
Book value per share	$	27.35		$	26.38		$	24.56		14.6	%	11.3	%
Total common shareholders' equity to total assets	11.5		%	11.3		%	12.4		%	7.81	%	(7.08)	%
Tangible book value per share*	$	21.64		$	20.87		$	18.55
Tangible common equity to tangible assets*	9.34		%	9.16		%	9.7		%
* 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 dated January 26, 2021, for a reconciliation and discussion of this non-GAAP measure.


	2020						2019
(dollars in thousands, except share data)	Fourth Quarter			Third Quarter			Fourth Quarter
Results of operations
Net interest income	$	85,244		$	68,828		$	57,692
NIM	3.32		%	3.28		%	4.12		%
Provisions for credit losses	$	(2,920)		$	55,401		$	2,950

Net charge-off (recovery) ratio	0.58		%	(0.01)		%	0.30		%
Noninterest income	$	80,638		$	97,026		$	35,234
Mortgage banking income	$	65,729		$	84,686		$	26,176
Total revenue	$	165,882		$	165,854		$	92,926
Noninterest expense	$	109,855		$	118,092		$	62,686
Merger expenses	$	9,513		$	20,730		$	686
Efficiency ratio	66.2		%	71.2		%	67.5		%
Core efficiency ratio*	58.5		%	57.4		%	66.5		%


Total adjusted mortgage banking pre-tax contribution*	$	22,882		$	39,166		$	3,010
Net income (loss) applicable to FB Financial Corporation(2)	$	45,602		$	(5,599)		$	21,572
Diluted earnings per common share(1)	$	0.95		$	(0.14)		$	0.68
Effective tax rate	22.6		%	26.7		%	21.0		%


Weighted average number of shares outstanding - fully diluted(1)	47,791,659			40,637,745			31,470,565
Actual shares outstanding - period end	47,220,743			47,191,677			31,034,315
Returns on average:
As reported
Assets ("ROAA")	1.63		%	(0.24)		%	1.39		%

Equity ("ROAE")	14.4		%	(2.13)		%	11.2		%
Tangible common equity ("ROATCE")*	18.2		%	(2.72)		%	14.9		%





* 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 dated January 26, 2021, for a reconciliation and discussion of this non-GAAP measure. (1) Diluted earnings per share is calculated using the basic weighted average number of common shares outstanding for periods in which a loss is incurred. (2)Includes a dividend declared and paid by the Company's REIT subsidiary to minority interest preferred shareholders in fourth quarter of 2020.


☐			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 %)
	2020						2019
	Fourth Quarter			Third Quarter			Fourth Quarter
Statement of Income Data
Total interest income	$	98,236		$	81,127		$	71,643
Total interest expense	12,992			12,299			13,951
Net interest income	85,244			68,828			57,692
Total noninterest income	80,638			97,026			35,234
Total noninterest expense	109,855			118,092			62,686
Earnings before income taxes and provisions for credit losses	56,027			47,762			30,240
Provisions for credit losses	(2,920)			55,401			2,950
Income tax expense (benefit)	13,337			(2,040)			5,718
Net income applicable to noncontrolling interest	8			—			—
Net income (loss) applicable to FB Financial Corporation(d)	$	45,602		$	(5,599)		$	21,572
Net interest income (tax-equivalent basis)	$	86,111		$	69,625		$	58,212
Adjusted net income*	$	54,454		$	58,096		$	22,079
Adjusted pre-tax, pre-provision earnings*	$	67,988		$	70,444		$	30,926
Per Common Share
Diluted net income (loss)(a)	$	0.95		$	(0.14)		$	0.68
Adjusted diluted net income*	1.14			1.43			0.70

Book value	27.35			26.38			24.56
Tangible book value*	21.64			20.87			18.55
Weighted average number of shares outstanding - fully diluted(a)	47,791,659			40,637,745			31,470,565
Period-end number of shares	47,220,743			47,191,677			31,034,315
Selected Balance Sheet Data
Cash and cash equivalents	$	1,317,898		$	1,062,391		$	232,681
Loans held for investment (HFI)	7,082,959			7,213,538			4,409,642
Allowance for credit losses(b)	(170,389)			(183,973)			(31,139)
Mortgage loans held for sale, at fair value	683,770			610,695			262,518
Commercial loans held for sale, at fair value	215,403			241,256			—
Investment securities, at fair value	1,176,991			1,164,910			691,676
Other real estate owned, net	12,111			12,748			18,939
Total assets	11,207,330			11,010,438			6,124,921
Customer deposits	9,396,478			9,001,673			4,914,587
Brokered and internet time deposits	61,559			92,074			20,351
Total deposits	9,458,037			9,093,747			4,934,938
Borrowings	238,324			438,838			304,675
Total common shareholders' equity	1,291,289			1,244,998			762,329
Selected Ratios
Return on average:
Assets	1.63		%	(0.24)		%	1.39		%
Shareholders' equity	14.4		%	(2.13)		%	11.2		%
Tangible common equity*	18.2		%	(2.72)		%	14.9		%
Average shareholders' equity to average assets	11.3		%	11.4		%	12.4		%
Net interest margin (NIM) (tax-equivalent basis)	3.32		%	3.28		%	4.12		%
Efficiency ratio (GAAP)	66.2		%	71.2		%	67.5		%
Core efficiency ratio (tax-equivalent basis)*	58.5		%	57.4		%	66.5		%
Loans HFI to deposit ratio	74.9		%	79.3		%	89.4		%
Total loans to deposit ratio	84.4		%	88.7		%	94.7		%
Yield on interest-earning assets	3.82		%	3.86		%	5.11		%
Cost of interest-bearing liabilities	0.73		%	0.83		%	1.38		%
Cost of total deposits	0.46		%	0.56		%	1.02		%
Credit Quality Ratios
Allowance for credit losses as a percentage of loans HFI(b)	2.41		%	2.55		%	0.71		%
Adjusted allowance for credit losses as a percentage of loans HFI*(b)	2.48		%	2.66		%	0.71		%
Net charge-offs (recoveries) as a percentage of average loans HFI	0.58		%	(0.01)		%	0.30		%
Nonperforming loans HFI as a percentage of total loans HFI	0.88		%	0.61		%	0.60		%
Nonperforming assets as a percentage of total assets	0.73		%	0.64		%	0.77		%
Preliminary capital ratios (Consolidated)
Total common shareholders' equity to assets	11.5		%	11.3		%	12.4		%
Tangible common equity to tangible assets*	9.34		%	9.16		%	9.69		%
Tier 1 capital (to average assets)	10.0		%	11.8		%	10.1		%
Tier 1 capital (to risk-weighted assets)(c)	12.2		%	12.1		%	11.6		%
Total capital (to risk-weighted assets)(c)	15.2		%	15.3		%	12.2		%
Common equity Tier 1 (to risk-weighted assets) (CET1)(c)	11.9		%	11.8		%	11.1		%


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

	2020				2019
Adjusted earnings	Fourth Quarter		Third Quarter			Fourth Quarter
Pre-tax net income (loss)	$	58,947	$	(7,639)		$	27,290
Plus merger expenses	9,513		20,730			686
Plus initial provision for credit losses on acquired loans and unfunded commitments	—		63,251			—
Less other non-operating items(1)	(2,448)		(1,952)			—
Adjusted pre-tax earnings	$	70,908	$	78,294		$	27,976
Income tax expense, adjusted	16,454		20,198			5,897
Adjusted earnings	$	54,454	$	58,096		$	22,079
Weighted average common shares outstanding - fully diluted	47,791,659		40,637,745			31,470,565
Adjusted diluted earnings per share
Diluted earnings (loss) per common share	$	0.95	$	(0.14)		$	0.68
Plus merger expenses	0.20		0.51			0.02
Plus initial provision for credit losses on acquired loans and unfunded commitments	—		1.56			—
Less other non-operating items	(0.05)		(0.05)			—
Less tax effect	0.06		0.55			—
Adjusted diluted earnings per share	$	1.14	$	1.43		$	0.70

(1)4Q2020 includes $4,533 FHLB prepayment penalty offset by $715 cash life insurance benefit and $1,370 gain from change in fair value of commercial loans held for sale acquired from Franklin; 3Q2020 includes $2,305 FHLB prepayment penalty, $1,505 losses on other real estate owned, and $1,858 gain from change in fair value of commercial loans held for sale acquired from Franklin.
Note: Adjusted non-GAAP results for the third quarter of 2020 have been recast from previously reported results to adjust for gains associated with changes in fair value related to commercial loans held for sale amounting to $1,858 . The following adjusted figures and metrics have been recast for conformity and comparability: Adjusted earnings, Adjusted diluted earnings per share, Adjusted pre-tax pre-provision earnings, Core efficiency ratio, Banking segment core efficiency ratio, Adjusted mortgage banking pre-tax pre-provision net contribution (%), Adjusted return on average assets, average equity and average tangible common equity, and Adjusted pre-tax pre-provision return on average assets, equity and tangible common equity. Previously reported adjusted amounts and non-GAAP reconciliations are included in previously issued earnings release materials.


Adjusted earnings	2020		2019			2018
Pre-tax net income (loss)	$	82,461	$	109,539		$	105,854
Plus merger expenses	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)	(4,400)		—			—
Adjusted pre-tax earnings	$	187,876	$	116,919		$	108,119
Income tax expense, adjusted	45,944		27,648			26,034
Adjusted earnings	$	141,932	$	89,271		$	82,085
Weighted average common shares outstanding - fully diluted	38,099,744		31,402,897			31,314,981
Adjusted diluted earnings per share
Diluted earnings (loss) per common share	$	1.67	$	2.65		$	2.55
Plus merger expenses	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	(0.11)		—			—
Less tax effect	0.71		0.06			0.01
Adjusted diluted earnings per share	$	3.73	$	2.83		$	2.61
(1) 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.

	2020				2019
Adjusted pre-tax pre-provision earnings	Fourth Quarter		Third Quarter			Fourth Quarter
Pre-tax net income (loss)	$	58,947	$	(7,639)		$	27,290
Plus provisions for credit losses	(2,920)		55,401			2,950
Pre-tax pre-provision earnings	56,027		47,762			30,240
Plus merger expenses	9,513		20,730			686
Less other non-operating items	(2,448)		(1,952)			—
Adjusted pre-tax pre-provision earnings	$	67,988	$	70,444		$	30,926


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

	2020						2019
Banking segment core efficiency ratio (tax equivalent)	Fourth Quarter			Third Quarter				Fourth Quarter
Core consolidated noninterest expense	$	95,809		$	95,057			$	62,000
Less Mortgage segment core noninterest expense	27,766			30,052				14,956
Core Banking segment noninterest expense	$	68,043		$	65,005			47,044
Core revenue	$	163,708		$	165,489			93,187
Less Mortgage segment total revenue	42,614			60,040				16,193
Core Banking segment total revenue	$	121,094		$	105,449			$	76,994
Banking segment core efficiency ratio (tax-equivalent basis)	56.2		%	61.6		%		61.1		%

Mortgage segment core efficiency ratio (tax equivalent)
Mortgage segment noninterest expense	$	28,491		$	30,382			$	14,956
Less mortgage segment merger expense	725			330				—


Core Mortgage segment noninterest expense	$	27,766		$	30,052			$	14,956


Mortgage segment total revenue	$	42,614		$	60,040			$	16,193
Mortgage segment core efficiency ratio (tax-equivalent basis)	65.2		%	50.1		%		92.4		%















	2020						2019
Adjusted mortgage contribution	Fourth Quarter			Third Quarter				Fourth Quarter
Mortgage segment pre-tax net contribution	$	14,123		$	29,658			$	1,237
Retail footprint:
Mortgage banking income	23,152			24,683				9,899
Mortgage banking expenses	15,118			15,175				8,126
Retail footprint pre-tax net contribution	8,034			9,508				1,773
Total mortgage banking pre-tax net contribution	$	22,157		$	39,166			$	3,010
Plus mortgage merger expense	725			330				—

Total adjusted mortgage banking pre-tax net contribution	$	22,882		$	39,496			$	3,010
Pre-tax pre-provision earnings	$	56,027		$	47,762			$	30,240
% total mortgage banking pre-tax pre-provision net contribution	39.5		%	82.0		%		10.0		%
Adjusted pre-tax pre-provision earnings	$	67,988		$	70,444			$	30,926
% total adjusted mortgage banking pre-tax pre-provision net contribution	33.7		%	56.1		%		9.7		%

	2020						2019
Tangible assets and equity	Fourth Quarter			Third Quarter				Fourth Quarter
Tangible assets
Total assets	$	11,207,330		$	11,010,438			$	6,124,921
Less goodwill	246,835			236,086				169,051
Less intangibles, net	22,431			23,924				17,589
Tangible assets	$	10,938,064		$	10,750,428			$	5,938,281
Tangible common equity
Total common shareholders' equity	$	1,291,289		$	1,244,998			$	762,329
Less goodwill	246,835			236,086				169,051
Less intangibles, net	22,431			23,924				17,589
Tangible common equity	$	1,022,023		$	984,988			$	575,689
Common shares outstanding	47,220,743			47,191,677				31,034,315
Book value per common share	$	27.35		$	26.38			$	24.56
Tangible book value per common share	$	21.64		$	20.87			$	18.55
Total common shareholders' equity to total assets	11.5		%	11.3		%		12.4		%
Tangible common equity to tangible assets	9.34		%	9.16		%		9.69		%







	2020						2019
Adjusted allowance for credit losses to loans held for investment	Fourth Quarter			Third Quarter			Fourth Quarter
Allowance for credit losses	$	170,389		$	183,973		$	31,139
Less allowance for credit losses attributed to PPP loans	2			49			—
Adjusted allowance for credit losses	$	170,387		$	183,924		$	31,139
Loans held for investment	$	7,082,959		$	7,213,538		$	4,409,642
Less PPP loans	212,645			310,719			—
Adjusted loans held for investment	$	6,870,314		$	6,902,819		$	4,409,642
Allowance for credit losses to loans held for investment	2.41		%	2.55		%	0.71		%
Adjusted allowance for credit losses to loans held for investment	2.48		%	2.66		%	0.71		%


			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

Franklin Financial Network Opening Balance Sheet (Preliminary)			11

Loans and Deposits by Market			12

Segment Data			13

Loan Portfolio and Asset Quality			14

Preliminary Capital Ratios			16

Investment Portfolio			17

Non-GAAP Reconciliation			18


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

													Annualized
													Q4 2020		Q4 2020
													vs.		vs.
	2020								2019		Q3 2020	Q4 2019
	Fourth Quarter		Third Quarter		Second Quarter		First Quarter		Fourth Quarter				Percent variance		Percent variance
ASSETS
Cash and due from banks	$	110,991	$	69,798	$	33,710	$	26,841	$	48,806			234.8	%	127.4	%
Federal funds sold	121,153		118,588		34,638		59,199		131,119				8.60	%	(7.60)	%
Interest-bearing deposits in financial institutions	1,085,754		874,005		649,244		339,054		52,756				96.4	%	1958.1	%
Cash and cash equivalents	1,317,898		1,062,391		717,592		425,094		232,681				95.7	%	466.4	%
Investments:
Available-for-sale debt securities, at fair value	1,172,400		1,160,521		747,438		764,217		688,381				4.07	%	70.3	%
Equity securities, at fair value	4,591		4,389		4,329		3,358		3,295				18.3	%	39.3	%
Federal Home Loan Bank stock, at cost	31,232		31,232		17,621		16,445		15,976				—	%	95.5	%
Mortgage loans held for sale, at fair value	683,770		610,695		435,479		325,304		262,518				47.6	%	160.5	%
Commercial loans held for sale, at fair value	215,403		241,256		—		—		—				(42.6)	%	(100.0)	%
Loans held for investment	7,082,959		7,213,538		4,827,023		4,568,038		4,409,642				(7.20)	%	60.6	%
Less: allowance for credit losses	170,389		183,973		113,129		89,141		31,139				(29.4)	%	447.2	%
Net loans	6,912,570		7,029,565		4,713,894		4,478,897		4,378,503				(6.62)	%	57.9	%
Premises and equipment, net	139,335		136,774		100,638		100,406		90,131				7.45	%	54.6	%
Other real estate owned, net	12,111		12,748		15,091		17,072		18,939				(19.9)	%	(36.1)	%
Operating lease right-of-use assets	49,537		52,410		30,447		31,628		32,539				(21.8)	%	52.2	%
Interest receivable	43,603		47,120		26,587		19,644		17,083				(29.7)	%	155.2	%
Mortgage servicing rights, at fair value	79,997		71,535		60,508		62,581		75,521				47.1	%	5.93	%
Goodwill	246,835		236,086		175,441		174,859		169,051				18.1	%	46.0	%
Core deposit and other intangibles, net	22,431		23,924		17,671		18,876		17,589				(24.8)	%	27.5	%
Other assets	275,617		289,792		192,800		217,306		122,714				(19.46)	%	124.6	%
Total assets	$	11,207,330	$	11,010,438	$	7,255,536	$	6,655,687	$	6,124,921			7.11	%	83.0	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits
Noninterest-bearing	$	2,274,103	$	2,287,911	$	1,775,323	$	1,335,799	$	1,208,175			(2.40)	%	88.2	%
Interest-bearing checking	2,491,765		2,005,536		1,236,094		1,139,462		1,014,875				96.5	%	145.5	%
Money market and savings	3,254,915		3,236,670		1,749,889		1,667,374		1,520,035				2.24	%	114.1	%
Customer time deposits	1,375,695		1,471,556		1,176,067		1,213,934		1,171,502				(25.9)	%	17.4	%
Brokered and internet time deposits	61,559		92,074		15,428		20,363		20,351				(131.8)	%	202.5	%
Total deposits	9,458,037		9,093,747		5,952,801		5,376,932		4,934,938				15.9	%	91.7	%
Borrowings	238,324		438,838		328,662		327,822		304,675				(181.8)	%	(21.8)	%
Operating lease liabilities	55,187		56,705		33,803		34,572		35,525				(10.6)	%	55.3	%
Accrued expenses and other liabilities	164,400		176,057		135,054		134,031		87,454				(26.3)	%	88.0	%
Total liabilities	9,915,948		9,765,347		6,450,320		5,873,357		5,362,592				6.14	%	84.9	%
Shareholders' equity:
Common stock, $1 par value	47,222		47,192		32,101		32,067		31,034				0.25	%	52.2	%
Additional paid-in capital	898,847		896,158		462,930		460,938		425,633				1.19	%	111.2	%
Retained earnings	317,625		276,361		286,296		266,385		293,524				59.4	%	8.21	%
Accumulated other comprehensive income, net	27,595		25,287		23,889		22,940		12,138				36.3	%	127.3	%
Total common shareholders' equity	1,291,289		1,244,998		805,216		782,330		762,329				14.8	%	69.4	%
Noncontrolling interest	93		93		—		—		—				—	%	(100.0)	%
Total equity	1,291,382		1,245,091		805,216		782,330		762,329				14.8	%	69.4	%
Total liabilities and shareholders' equity	$	11,207,330	$	11,010,438	$	7,255,536	$	6,655,687	$	6,124,921			7.11	%	83.0	%


FB Financial Corporation						4


Consolidated Statements of Income
(Unaudited)
(In Thousands, Except Share Data and %)
													Q4 2020		Q4 2020
													vs.		vs.
	2020								2019		Q3 2020	Q4 2019
	Fourth Quarter		Third Quarter		Second Quarter		First Quarter		Fourth Quarter				Percent variance		Percent variance
Interest income:
Interest and fees on loans	$	93,246	$	76,504	$	61,092	$	63,754	$	66,095			21.9	%	41.1	%
Interest on securities
Taxable	2,306		2,286		2,619		3,056		2,969				0.87	%	(22.3)	%
Tax-exempt	2,120		1,933		1,590		1,433		1,327				9.67	%	59.8	%
Other	564		404		306		1,431		1,252				39.6	%	(55.0)	%
Total interest income	98,236		81,127		65,607		69,674		71,643				21.1	%	37.1	%
Interest expense:
Deposits	10,809		10,573		9,309		12,168		12,703				2.23	%	(14.9)	%
Borrowings	2,183		1,726		961		1,257		1,248				26.5	%	74.9	%
Total interest expense	12,992		12,299		10,270		13,425		13,951				5.63	%	(6.87)	%
Net interest income	85,244		68,828		55,337		56,249		57,692				23.9	%	47.8	%
Provision for credit losses	(3,231)		45,834		24,039		27,964		2,950				(107.0)	%	(209.5)	%
Provision for credit losses on unfunded commitments	311		9,567		1,882		1,601		—				(96.7)	%	100.0	%
Net interest income after provisions for credit losses	88,164		13,427		29,416		26,684		54,742				556.6	%	61.1	%
Noninterest income:
Mortgage banking income	65,729		84,686		72,168		32,745		26,176				(22.4)	%	151.1	%
Service charges on deposit accounts	2,577		2,162		1,858		2,563		2,657				19.2	%	(3.01)	%
ATM and interchange fees	4,262		3,913		3,606		3,134		3,315				8.92	%	28.6	%
Investment services and trust income	2,187		1,828		1,368		1,697		1,326				19.6	%	64.9	%
Gain (loss) from securities, net	1,013		583		(28)		63		(18)				73.8	%	(5,727.8)	%
(Loss) gain on sales or write-downs of other real estate owned	(123)		(1,505)		86		51		433				(91.8)	%	(128.4)	%
Gain (loss) from other assets	66		226		(54)		(328)		(156)				(70.8)	%	(142.3)	%
Other income	4,927		5,133		2,487		2,775		1,501				(4.01)	%	228.2	%
Total noninterest income	80,638		97,026		81,491		42,700		35,234				(16.9)	%	128.9	%
Total revenue	165,882		165,854		136,828		98,949		92,926				0.02	%	78.5	%
Noninterest expenses:
Salaries, commissions and employee benefits	67,212		67,676		55,258		43,622		39,589				(0.69)	%	69.8	%
Occupancy and equipment expense	5,813		4,892		4,096		4,178		3,534				18.8	%	64.5	%
Legal and professional fees	2,227		1,917		1,952		1,558		2,074				16.2	%	7.38	%
Data processing	3,161		2,994		2,782		2,453		2,746				5.58	%	15.1	%
Merger costs	9,513		20,730		1,586		3,050		686				(54.1)	%	1,286.7	%


FB Financial Corporation						5


Consolidated Statements of Income
(Unaudited)
(In Thousands, Except Share Data and %)

					2020
	For the year ended				vs.
	December 31,				2019
	2020		2019		Percent variance
Interest income:
Interest and fees on loans	$	294,596	$	260,458	13.1	%
Interest on securities
Taxable	10,267		13,223		(22.4)	%
Tax-exempt	7,076		4,805		47.3	%
Other	2,705		4,051		(33.2)	%
Total interest income	314,644		282,537		11.4	%
Interest expense:
Deposits	42,859		51,568		(16.9)	%
Borrowings	6,127		4,933		24.2	%
Total interest expense	48,986		56,501		(13.3)	%
Net interest income	265,658		226,036		17.5	%
Provision for credit losses	94,606		7,053		1,241.4	%
Provision for credit losses on unfunded commitments	13,361		—		100.0	%
Net interest income after provisions for credit losses	157,691		218,983		(28.0)	%
Noninterest income:
Mortgage banking income	255,328		100,916		153.0	%
Service charges on deposit accounts	9,160		9,479		(3.37)	%
ATM and interchange fees	14,915		12,161		22.6	%
Investment services and trust income	7,080		5,244		35.0	%

Gain from securities, net	1,631		57		2761.4	%
(Loss) gain on sales or write-downs of other real estate owned	(1,491)		545		(373.6)	%
Loss on other assets	(90)		(104)		13.5	%
Other income	15,322		7,099		115.8	%
Total noninterest income	301,855		135,397		122.9	%
Total revenue	567,513		361,433		57.0	%
Noninterest expenses:
Salaries, commissions and employee benefits	233,768		152,084		53.7	%
Occupancy and equipment expense	18,979		15,641		21.3	%
Legal and professional fees	7,654		7,486		2.24	%


Average Balance, Average Yield Earned and Average Rate Paid
For the Quarters Ended
(Unaudited)
(In Thousands, Except %)
	Three Months Ended						Three Months Ended
	December 31, 2020						September 30, 2020
	Average balances		Interest income/ expense		Average yield/ rate		Average balances		Interest income/ expense		Average yield/ rate
Interest-earning assets:
Loans HFI(a)(d)	$	7,139,870	$	86,398	4.81	%	$	6,062,785	$	71,660	4.70	%
Mortgage loans held for sale(b)	621,076		4,138		2.65	%	486,899		3,624		2.96	%
Commercial loans held for sale	236,676		2,830		4.76	%	99,745		1,336		5.33	%
Securities:(b)
Taxable	744,161		2,306		1.23	%	604,557		2,286		1.50	%
Tax-exempt(a)	359,509		2,867		3.17	%	309,352		2,614		3.36	%
Total securities(a)	1,103,670		5,173		1.86	%	913,909		4,900		2.13	%
Federal funds sold	95,266		30		0.13	%	88,626		19		0.09	%
Interest-bearing deposits with other financial institutions	1,082,004		375		0.14	%	763,251		309		0.16	%
FHLB stock	31,232		159		2.03	%	22,517		76		1.34	%
Total interest-earning assets(a)	10,309,794		99,103		3.82	%	8,437,732		81,924		3.86	%
Noninterest-earning assets:
Cash and due from banks	73,279						69,788
Allowance for credit losses	(183,932)						(144,991)
Other assets	912,022						816,759
Total noninterest-earning assets	801,369						741,556
Total assets	$	11,111,163					$	9,179,288
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing checking	$	2,178,039	$	2,785	0.51	%	$	1,626,067	$	2,194	0.54	%
Money market(e)	2,769,421		3,968		0.57	%	2,179,128		3,589		0.66	%
Savings deposits	338,260		54		0.06	%	309,689		58		0.07	%
Customer time deposits(e)	1,410,108		3,704		1.04	%	1,334,829		4,817		1.44	%
Brokered and internet time deposits(e)	87,035		298		1.36	%	60,327		(85)		(0.56)	%
Time deposits	1,497,143		4,002		1.06	%	1,395,156		4,732		1.35	%
Total interest-bearing deposits	6,782,863		10,809		0.63	%	5,510,040		10,573		0.76	%
Other interest-bearing liabilities:
Securities sold under agreements to repurchase and federal funds purchased	34,986		43		0.49	%	37,309		51		0.54	%
Federal Home Loan Bank advances(f)	102,174		(432)		(1.68)	%	249,457		406		0.65	%
Subordinated debt	189,649		2,433		5.10	%	95,048		1,222		5.11	%
Other borrowings	16,612		139		3.33	%	15,015		47		1.25	%
Total other interest-bearing liabilities	343,421		2,183		2.53	%	396,829		1,726		1.73	%
Total interest-bearing liabilities	7,126,284		12,992		0.73	%	5,906,869		12,299		0.83	%
Noninterest-bearing liabilities:
Demand deposits	2,513,202						2,050,084
Other liabilities	210,483						177,329
Total noninterest-bearing liabilities	2,723,685						2,227,413
Total liabilities	9,849,969						8,134,282
Total common shareholders' equity	1,261,101						1,044,913
Noncontrolling interest	93						93
Total equity	1,261,194						1,045,006
Total liabilities and shareholders' equity	$	11,111,163					$	9,179,288
Net interest income(a)			$	86,111					$	69,625
Interest rate spread(a)					3.09	%					3.03	%
Net interest margin(a)					3.32	%					3.28	%
Cost of total deposits					0.46	%					0.56	%
Average interest-earning assets to average interest-bearing liabilities					144.7	%					142.8	%
Tax-equivalent adjustment			$	867					$	797
Loans HFI yield components:
Contractual interest rate(a)(c)			$	78,873	4.39	%			$	66,441	4.36	%
Origination and other loan fee income(c)			6,537		0.36	%			4,029		0.26	%
Accretion on purchased loans			708		0.04	%			526		0.04	%
Nonaccrual interest			280		0.02	%			664		0.04	%

Total loans HFI yield			$	86,398	4.81	%			$	71,660	4.70	%


Average Balance, Average Yield Earned and Average Rate Paid (continued)
For the Years Ended
(Unaudited)
(In Thousands, Except %)

	December 31, 2020						December 31, 2019
	Average balances		Interest income/ expense		Average yield/ rate		Average balances		Interest income/ expense		Average yield/ rate
Interest-earning assets:
Loans HFI(a)(d)	$	5,621,832	$	278,076	4.95	%	$	4,149,590	$	250,693	6.04	%
Mortgage loans held for sale(b)	420,791		12,699		3.02	%	254,689		9,966		3.91	%
Commercial loans held for sale	84,580		4,166		4.93	%	—		—		—	%
Securities:(b)
Taxable	589,393		10,267		1.74	%	516,250		13,223		2.56	%
Tax-exempt(a)	275,786		9,570		3.47	%	155,306		6,498		4.18	%
Total securities(a)	865,179		19,837		2.29	%	671,556		19,721		2.94	%
Federal funds sold	85,402		304		0.36	%	31,309		678		2.17	%
Interest-bearing deposits with other financial institutions	662,175		1,960		0.30	%	130,145		2,651		2.04	%
FHLB stock	21,735		441		2.03	%	15,146		722		4.77	%
Total interest-earning assets(a)	7,761,694		317,483		4.09	%	5,252,435		284,431		5.42	%
Noninterest-earning assets:
Cash and due from banks	66,177						51,194
Allowance for loan losses	(121,033)						(30,442)
Other assets	731,262						504,485
Total noninterest-earning assets	676,406						525,237
Total assets	$	8,438,100					$	5,777,672
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing checking	$	1,461,596	$	8,875	0.61	%	$	950,219	$	8,755	0.92	%
Money market(e)	1,807,481		13,707		0.76	%	1,219,652		17,380		1.42	%
Savings deposits	274,489		232		0.08	%	199,535		301		0.15	%
Customer time deposits(e)	1,289,552		19,656		1.52	%	1,155,058		24,103		2.09	%
Brokered and internet time deposits(e)	43,372		389		0.90	%	45,313		1,029		2.27	%
Time deposits	1,332,924		20,045		1.50	%	1,200,371		25,132		2.09	%
Total interest-bearing deposits	4,876,490		42,859		0.88	%	3,569,777		51,568		1.44	%
Other interest-bearing liabilities:
Securities sold under agreements to repurchase and federal funds purchased	32,912		201		0.61	%	26,400		291		1.10	%
Federal Home Loan Bank advances(f)	212,705		1,093		0.51	%	187,509		3,004		1.60	%
Subordinated debt	86,944		4,475		5.15	%	30,930		1,638		5.30	%
Other borrowings	12,939		358		2.77	%	—		—		—	%
Total other interest-bearing liabilities	345,500		6,127		1.77	%	244,839		4,933		2.01	%
Total interest-bearing liabilities	5,221,990		48,986		0.94	%	3,814,616		56,501		1.48	%
Noninterest-bearing liabilities:
Demand deposits	2,092,450						1,130,113
Other liabilities	157,289						109,449
Total noninterest-bearing liabilities	2,249,739						1,239,562
Total liabilities	7,471,729						5,054,178
Total common shareholders' equity	966,336						723,494
Noncontrolling interest	35						—
Total equity	966,371						723,494
Total liabilities and shareholders' equity	$	8,438,100					$	5,777,672
Net interest income(a)			$	268,497					$	227,930
Interest rate spread(a)					3.15	%					3.94	%
Net interest margin(a)					3.46	%					4.34	%
Cost of total deposits					0.62	%					1.10	%
Average interest-earning assets to average interest-bearing liabilities					148.6	%					137.7	%
Tax equivalent adjustment			$	2,839					$	1,894
Loans HFI yield components:
Contractual interest rate(a)(c)			$	256,929	4.57	%			$	228,069	5.50	%
Origination and other loan fee income(c)			15,978		0.28	%			12,977		0.31	%
Accretion on purchased loans			3,788		0.07	%			8,556		0.21	%
Nonaccrual interest			1,381		0.03	%			885		0.02	%
Syndication fee income			—		—	%			206		—	%
Total loans HFI yield			$	278,076	4.95	%			$	250,693	6.04	%


Franklin Financial Network, Inc. Opening Balance Sheet (Preliminary)
As of August 15, 2020
(Unaudited)
(In Thousands)


	As Recorded by FB Financial Corporation (Preliminary)(a)
Assets
Cash and cash equivalents	$	284,004
Investments	373,462
Mortgage loans held for sale, at fair value	38,740
Commercial loans held for sale, at fair value	326,206
Loans, net of fair value adjustments	2,427,527
Allowance for credit losses on PCD loans	(24,831)
Premises and equipment	39,691
Operating lease right-of-use assets	23,958
Mortgage servicing rights	5,111
Core deposit intangible	7,670
Goodwill	71,464
Other assets	121,033
Total assets	$	3,694,035

Liabilities
Deposits	$	3,121,730
Borrowings	62,435
Operating lease liabilities	24,330
Accrued expenses and other liabilities	7,617
Total liabilities	$	3,216,112
Acquired minority interest	$	93

Equity and Cash Consideration
Value of 15,102,492 shares issued as merger consideration	$	445,826
Fair value of replacement awards attributable to pre-combination service	674
Total cash consideration paid	31,330
Total consideration	$	477,830





















(a) The above estimated fair values of assets acquired and liabilities assumed are preliminary and are subject to change during the measurement period as allowed under ASC 805 - Business Combinations.



Loan Portfolio and Asset Quality (continued)
For the Quarters Ended
(Unaudited)
(In Thousands, Except %)

	2020												2019
	Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter
Nonperforming assets(b)(c)
Past due 90 days or more and accruing interest	$	13,696		$	9,064		$	6,412		$	6,459		$	5,543
Nonaccrual	48,516			34,585			28,413			24,547			21,062
Total nonperforming loans held for investment	62,212			43,649			34,825			31,006			26,605
Commercial loans held for sale	6,489			12,812			—			—			—
Other real estate owned:
Foreclosed	6,408			6,570			7,340			9,332			9,983
Excess land and facilities	5,703			6,178			7,751			7,740			8,956
Other assets	1,170			1,184			1,306			1,188			1,580
Total nonperforming assets	$	81,982		$	70,393		$	51,222		$	49,266		$	47,124
Total nonperforming loans as a percentage of loans held for investment	0.88		%	0.61		%	0.72		%	0.68		%	0.60		%
Total nonperforming assets as a percentage of total assets	0.73		%	0.64		%	0.71		%	0.74		%	0.77		%
Total accruing loans over 90 days delinquent as a percentage of total assets	0.12		%	0.08		%	0.09		%	0.10		%	0.09		%
Loans restructured as troubled debt restructurings	$	15,988		$	16,681		$	13,277		$	11,566		$	12,206
Troubled debt restructurings as a percentage of loans held for investment	0.23		%	0.23		%	0.28		%	0.25		%	0.28		%