FBK 8-K

FB Financial Corp (FBK)

8-K 2023-07-17 For: 2023-07-17

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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 17, 2023
99.2						Supplemental Financial Information for the quarter ended June 30 , 2023
99.3						Earnings Presentation dated July 18, 2023
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 17, 2023


	2023						2022			Annualized
(dollars in thousands, except share data)	Second Quarter			First Quarter			Second Quarter			2Q23 / 1Q23 % Change		2Q23 / 2Q22 % Change
Balance Sheet Highlights
Investment securities, at fair value	$	1,422,391		$	1,474,064		$	1,621,344		(14.1)	%	(12.3)	%
Mortgage loans held for sale(a)	89,864			73,005			222,400			92.6	%	(59.6)	%
Commercial loans held for sale, at fair value	9,267			9,510			37,815			(10.2)	%	(75.5)	%
Loans held for investment	9,326,024			9,365,996			8,624,337			(1.71)	%	8.14	%

Allowance for credit losses	140,664			138,809			126,272			5.36	%	11.4	%
Allowance for credit losses on unfunded commitments	14,810			18,463			20,399			(79.4)	%	(27.4)	%
Total assets	12,887,395			13,101,147			12,193,862			(6.54)	%	5.69	%

Interest-bearing deposits (non-brokered)	8,233,082			8,693,515			7,646,125			(21.2)	%	7.68	%
Brokered deposits	238,885			251			1,657			381,338.0	%	14,316.7	%
Noninterest-bearing deposits	2,400,288			2,489,149			2,895,520			(14.3)	%	(17.1)	%



Total deposits	10,872,255			11,182,915			10,543,302			(11.1)	%	3.12	%
Estimated insured or collateralized deposits	7,858,761			7,926,537			7,320,537			(3.43)	%	7.35	%
Borrowings	390,354			312,131			160,400			100.5	%	143.4	%
Total common shareholders' equity	1,386,951			1,369,696			1,319,852			5.05	%	5.08	%
Book value per common share	$	29.64		$	29.29		$	28.15		4.79	%	5.29	%

Adjusted tangible book value per common share*	$	27.72		$	27.06		$	25.24		9.84	%	9.83	%
Total common shareholders' equity to total assets	10.8		%	10.5		%	10.8		%
Tangible common equity to tangible assets*	8.98		%	8.68		%	8.90		%
Estimated uninsured and uncollateralized deposits as a percentage of total deposits	27.7		%	29.1		%	30.6		%
*Non-GAAP financial measure; See "Use of non-GAAP Financial Measures" and non-GAAP reconciliations herein.
(a) Includes optional right to repurchase government guaranteed GNMA mortgage loans previously sold that have become past due greater than 90 days amounting to $20,225 and $20,528 as of June 30, 2023 and March 31, 2023, respectively.


	2023						2022
(dollars in thousands, except share data)	Second Quarter			First Quarter			Second Quarter
Statement of Income Highlights
Net interest income	$	101,543		$	103,660		$	102,171
NIM	3.40		%	3.51		%	3.52		%
Provisions for credit losses	$	(1,078)		$	491		$	12,318

Net charge-off ratio	0.03		%	0.02		%	0.09		%
Noninterest income	$	23,813		$	23,349		$	33,214
Mortgage banking income	$	12,232		$	12,086		$	22,559
Total revenue	$	125,356		$	127,009		$	135,385
Noninterest expense	$	81,292		$	80,440		$	96,997


Efficiency ratio	64.8		%	63.3		%	71.6		%
Core efficiency ratio*	63.5		%	63.3		%	61.1		%





Pre-tax, pre-provision earnings	$	44,064		$	46,569		$	38,388
Adjusted pre-tax, pre-provision earnings*	$	44,965		$	45,659		$	52,856
Net income applicable to FB Financial Corporation	$	35,299		$	36,381		$	19,345
Diluted earnings per common share	$	0.75		$	0.78		$	0.41
Effective tax rate	21.8		%	21.0		%	25.8		%
Adjusted net income*	$	35,973		$	35,708		$	30,051
Adjusted diluted earnings per common share*	$	0.77		$	0.76		$	0.64


Weighted average number of shares outstanding - fully diluted	46,814,854			46,765,154			47,211,650

Returns on average:

Return on average total assets	1.10		%	1.15		%	0.62		%

Return on average shareholders' equity	10.3		%	11.0		%	5.74		%
Return on average tangible common equity*	12.6		%	13.6		%	7.09		%





*Non-GAAP financial measure; See "Use of non-GAAP Financial Measures" and non-GAAP reconciliations herein.


☐			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						Michael Mettee
615-313-8328						615-564-1212
[email protected]						[email protected]
www.firstbankonline.com						[email protected]


Financial Summary and Key Metrics
(Unaudited)
(dollars in thousands, except share data)
	2023						2022
	Second Quarter			First Quarter			Second Quarter
Selected Statement of Income Data
Total interest income	$	170,183		$	159,480		$	110,214
Total interest expense	68,640			55,820			8,043
Net interest income	101,543			103,660			102,171
Total noninterest income	23,813			23,349			33,214
Total noninterest expense	81,292			80,440			96,997
Earnings before income taxes and provisions for credit losses	$	44,064		$	46,569		$	38,388
Provisions for credit losses	$	(1,078)		$	491		$	12,318
Income tax expense	9,835			9,697			6,717

Net income applicable to FB Financial Corporation	35,299			36,381			19,345
Net interest income (tax-equivalent basis)	102,383			104,493			102,926
Adjusted net income*	35,973			35,708			30,051
Adjusted pre-tax, pre-provision earnings*	44,965			45,659			52,856
Per Common Share
Diluted net income	$	0.75		$	0.78		$	0.41
Adjusted diluted net income*	0.77			0.76			0.64

Book value	29.64			29.29			28.15

Adjusted tangible book value*	27.72			27.06			25.24
Weighted average number of shares outstanding - fully diluted	46,814,854			46,765,154			47,211,650

Selected Balance Sheet Data
Cash and cash equivalents	$	1,160,354		$	1,319,951		$	872,861
Loans held for investment (HFI)	9,326,024			9,365,996			8,624,337
Allowance for credit losses	(140,664)			(138,809)			(126,272)
Allowance for credit losses on unfunded commitments	(14,810)			(18,463)			(20,399)
Mortgage loans held for sale(a)	89,864			73,005			222,400
Commercial loans held for sale, at fair value	9,267			9,510			37,815
Investment securities, at fair value	1,422,391			1,474,064			1,621,344

Total assets	12,887,395			13,101,147			12,193,862

Interest-bearing deposits (non-brokered)	8,233,082			8,693,515			7,646,125
Brokered deposits	238,885			251			1,657
Noninterest-bearing deposits	2,400,288			2,489,149			2,895,520



Total deposits	10,872,255			11,182,915			10,543,302
Estimated insured or collateralized deposits	7,858,761			7,926,537			7,320,537
Borrowings	390,354			312,131			160,400
Total common shareholders' equity	1,386,951			1,369,696			1,319,852
Selected Ratios
Return on average:
Assets	1.10		%	1.15		%	0.62		%
Shareholders' equity	10.3		%	11.0		%	5.74		%
Tangible common equity*	12.6		%	13.6		%	7.09		%
Average shareholders' equity to average assets	10.7		%	10.4		%	10.9		%
Net interest margin (tax-equivalent basis)	3.40		%	3.51		%	3.52		%
Efficiency ratio (GAAP)	64.8		%	63.3		%	71.6		%
Core efficiency ratio (tax-equivalent basis)*	63.5		%	63.3		%	61.1		%
Loans HFI to deposit ratio	85.8		%	83.8		%	81.8		%

Noninterest-bearing deposits to total deposits	22.1		%	22.3		%	27.5		%
Yield on interest-earning assets	5.67		%	5.38		%	3.80		%
Cost of interest-bearing liabilities	3.14		%	2.61		%	0.40		%
Cost of total deposits	2.38		%	1.94		%	0.25		%
Estimated uninsured and uncollateralized deposits as a percentage of total deposits	27.7		%	29.1		%	30.6		%
Credit Quality Ratios
Allowance for credit losses as a percentage of loans HFI	1.51		%	1.48		%	1.46		%

Net charge-offs as a percentage of average loans HFI	0.03		%	0.02		%	0.09		%
Nonperforming loans HFI as a percentage of total loans HFI	0.47		%	0.49		%	0.51		%
Nonperforming assets as a percentage of total assets(a)	0.59		%	0.61		%	0.46		%
Preliminary Capital Ratios (consolidated)
Total common shareholders' equity to assets	10.8		%	10.5		%	10.8		%
Tangible common equity to tangible assets*	8.98		%	8.68		%	8.90		%
Tier 1 leverage	10.7		%	10.4		%	10.2		%
Tier 1 risk-based capital	11.9		%	11.6		%	11.8		%
Total risk-based capital	13.9		%	13.6		%	13.6		%
Common equity Tier 1 (CET1)	11.7		%	11.3		%	11.5		%


Non-GAAP Reconciliations
For the Periods Ended
(Unaudited)
(dollars in thousands, except share data)

	2023					2022
Adjusted net income	Second Quarter		First Quarter			Second Quarter
Income before income taxes	$	45,142	$	46,078		$	26,070
Plus mortgage restructuring expense	—		—			12,458

Less other non-operating items (1)	(901)		910			(2,010)
Adjusted pre-tax net income	46,043		45,168			40,538
Adjusted income tax expense	10,070		9,460			10,487
Adjusted net income	$	35,973	$	35,708		$	30,051
Weighted average common shares outstanding - fully diluted	46,814,854		46,765,154			47,211,650
Adjusted diluted earnings per common share
Diluted earnings per common share	$	0.75	$	0.78		$	0.41
Plus mortgage restructuring expense	—		—			0.27

Less other non-operating items	(0.02)		0.02			(0.04)
Less tax effect	—		—			0.08
Adjusted diluted earnings per common share	$	0.77	$	0.76		$	0.64


(1) The following table presents amounts included in "other non-operating items" for each of the periods presented.
	2023					2022
Other non-operating items	Second Quarter		First Quarter			Second Quarter
Gain on sales or write-downs of other real estate owned and other assets	$	533	$	—		$	—
(Loss) gain from changes in fair value of commercial loans held for sale acquired in previous business combination	(8)		910			(2,010)
Severance expense	(1,426)		—			—
Total other non-operating items	$	(901)	$	910		$	(2,010)



Adjusted net income	1H 2023		1H 2022			2022
Income before income taxes	$	91,220	$	70,619		$	159,574
Plus mortgage restructuring expense	—		12,458			12,458

Less other non-operating items(1)	9		(2,184)			(5,133)
Adjusted pre-tax net income	91,211		85,261		—	177,165
Adjusted income tax expense(2)	19,530		19,846			39,587
Adjusted net income	$	71,681	$	65,415		$	137,578
Weighted average common shares outstanding - fully diluted	46,777,603		47,466,291			47,239,791
Adjusted diluted earnings per share
Diluted earnings per common share	$	1.53	$	1.15		$	2.64
Plus mortgage restructuring and offering expenses	—		0.26			0.26

Less other non-operating items	—		(0.05)			(0.11)
Less tax effect	—		0.08			0.10
Adjusted diluted earnings per common share	$	1.53	$	1.38		$	2.91
(1) The following table presents amounts included in "other non-operating items" for each of the periods presented:

Other non-operating items:	1H 2023		1H 2022			2022
Gain on sales or write-downs of other real estate owned and other assets	$	533	$	—		$	—
Gain (loss) from changes in fair value of commercial loans held for sale acquired in previous business combination	902		(2,184)			(5,133)
Severance expense	(1,426)		—			—



Total other non-operating items	$	9	$	(2,184)		$	(5,133)
(2) 2021 includes a $1,678 tax benefit related to a change in the value of a net operating loss tax asset related to previous business combination.


Non-GAAP Reconciliation
For the Periods Ended
(Unaudited)
(dollars in thousands)

	2023						2022
Adjusted pre-tax pre-provision earnings	Second Quarter			First Quarter			Second Quarter
Income before income taxes	$	45,142		$	46,078		$	26,070
Plus provisions for credit losses	(1,078)			491			12,318
Pre-tax pre-provision earnings	44,064			46,569			38,388
Plus mortgage restructuring expense	—			—			12,458
Less other non-operating items	(901)			910			(2,010)
Adjusted pre-tax pre-provision earnings	$	44,965		$	45,659		$	52,856





	2023						2022
Adjusted tangible net income	Second Quarter			First Quarter			Second Quarter
Income before income taxes	$	45,142		$	46,078		$	26,070
Plus mortgage restructuring expense	—			—			12,458

Less other non-operating items	(901)			910			(2,010)
Plus amortization of core deposit and other intangibles	940			990			1,194
Less income tax expense, adjusted for items above	10,315			9,718			10,799
Adjusted tangible net income	$	36,668		$	36,440		$	30,933








	2023						2022

Core efficiency ratio (tax-equivalent basis)	Second Quarter			First Quarter			Second Quarter
Total noninterest expense	$	81,292		$	80,440		$	96,997
Less mortgage restructuring expense	—			—			12,458



Less severance expense	1,426			—			—
Core noninterest expense	$	79,866		$	80,440		$	84,539
Net interest income (tax-equivalent basis)	$	102,383		$	104,493		$	102,926
Total noninterest income	23,813			23,349			33,214
Less (loss) gain from changes in fair value of commercial loans held for sale acquired in previous business combination	(8)			910			(2,010)


Less gain (loss) from sales or write-downs of other real estate owned and other assets	533			(183)			(8)
Less (loss) gain from securities, net	(28)			69			(109)
Core noninterest income	23,316			22,553			35,341
Core revenue	$	125,699		$	127,046		$	138,267
Efficiency ratio (GAAP)(a)	64.8		%	63.3		%	71.6		%
Core efficiency ratio (tax-equivalent basis)	63.5		%	63.3		%	61.1		%
(a) Efficiency ratio (GAAP) is calculated by dividing reported noninterest expense by reported total revenue.


Non-GAAP Reconciliations (continued)
For the Periods Ended
(Unaudited)
(dollars in thousands except per share data)



	2023						2022
Tangible assets and equity	Second Quarter			First Quarter			Second Quarter
Tangible assets
Total assets	$	12,887,395		$	13,101,147		$	12,193,862
Less goodwill	242,561			242,561			242,561
Less intangibles, net	10,438			11,378			14,515
Tangible assets	$	12,634,396		$	12,847,208		$	11,936,786
Tangible common equity
Total common shareholders' equity	$	1,386,951		$	1,369,696		$	1,319,852
Less goodwill	242,561			242,561			242,561
Less intangibles, net	10,438			11,378			14,515
Tangible common equity	$	1,133,952		$	1,115,757		$	1,062,776
Less accumulated other comprehensive loss, net	(163,407)			(149,566)			(120,495)
Adjusted tangible common equity	1,297,359			1,265,323			1,183,271
Common shares outstanding	46,798,751			46,762,626			46,881,896
Book value per common share	$	29.64		$	29.29		$	28.15
Tangible book value per common share	$	24.23		$	23.86		$	22.67
Adjusted tangible book value per common share	$	27.72		$	27.06		$	25.24
Total common shareholders' equity to total assets	10.8		%	10.5		%	10.8		%
Tangible common equity to tangible assets	8.98		%	8.68		%	8.90		%
On-balance sheet liquidity:
Cash and cash equivalents	$	1,160,354		$	1,319,951		$	872,861
Unpledged securities	281,098			286,169			305,781
Equity securities, at fair value	3,031			3,059			3,103
Total on-balance sheet liquidity	$	1,444,483		$	1,609,179		$	1,181,745
On-balance sheet liquidity as a percentage of total assets	11.2		%	12.3		%	9.69		%
On-balance sheet liquidity as a percentage of total tangible assets	11.4		%	12.5		%	9.90		%


			Page

Financial Summary and Key Metrics			4

Consolidated Statements of Income			5

Consolidated Balance Sheets			7

Average Balance and Interest Yield/Rate Analysis			8



Selected Deposit Data			11

Segment Data			12

Loan Portfolio			13

Asset Quality			14

Preliminary Capital Ratios			15

Investments and Other Sources of Liquidity			16

Non-GAAP Reconciliations			17


Consolidated Statements of Income
For the Quarter Ended
(Unaudited)
(Dollars in Thousands, Except Share Data)
													Q2 2023		Q2 2023
													vs.		vs.
	2023				2022						Q1 2023	Q2 2022
	Second Quarter		First Quarter		Fourth Quarter		Third Quarter		Second Quarter				Percent variance		Percent variance
Interest income:
Interest and fees on loans	$	149,220	$	140,356	$	133,180	$	116,664	$	99,655			6.32	%	49.7	%
Interest on securities
Taxable	6,480		6,570		6,707		6,843		6,499				(1.37)	%	(0.29)	%
Tax-exempt	1,808		1,804		1,806		1,818		1,842				0.22	%	(1.85)	%
Other	12,675		10,750		5,905		3,158		2,218				17.9	%	471.5	%
Total interest income	170,183		159,480		147,598		128,483		110,214				6.71	%	54.4	%
Interest expense:
Deposits	65,257		52,863		31,456		13,133		6,591				23.4	%	890.1	%
Borrowings	3,383		2,957		5,644		3,966		1,452				14.4	%	133.0	%
Total interest expense	68,640		55,820		37,100		17,099		8,043				23.0	%	753.4	%
Net interest income	101,543		103,660		110,498		111,384		102,171				(2.04)	%	(0.61)	%
Provision for credit losses	2,575		4,997		152		8,189		8,181				(48.5)	%	(68.5)	%
Provision for credit losses on unfunded commitments	(3,653)		(4,506)		(608)		3,178		4,137				(18.9)	%	(188.3)	%
Net interest income after provisions for credit losses	102,621		103,169		110,954		100,017		89,853				(0.53)	%	14.2	%
Noninterest income:
Mortgage banking income	12,232		12,086		9,106		12,384		22,559				1.21	%	(45.8)	%
Service charges on deposit accounts	3,185		3,053		3,019		3,208		2,908				4.32	%	9.53	%
ATM and interchange fees	2,629		2,396		2,546		2,614		5,353				9.72	%	(50.9)	%
Investment services and trust income	2,777		2,378		2,232		2,227		2,275				16.8	%	22.1	%
(Loss) gain from securities, net	(28)		69		25		(140)		(109)				(140.6)	%	(74.3)	%
Gain (loss) on sales or write-downs of other real estate owned and other assets	533		(183)		(252)		429		(8)				(391.3)	%	(6,762.5)	%

Other income	2,485		3,550		793		1,870		236				(30.0)	%	953.0	%
Total noninterest income	23,813		23,349		17,469		22,592		33,214				1.99	%	(28.3)	%
Total revenue	125,356		127,009		127,967		133,976		135,385				(1.30)	%	(7.41)	%
Noninterest expenses:
Salaries, commissions and employee benefits	52,020		48,788		45,839		51,028		55,181				6.62	%	(5.73)	%
Occupancy and equipment expense	6,281		5,909		6,295		6,011		5,853				6.30	%	7.31	%
Legal and professional fees	2,199		3,108		4,857		4,448		3,116				(29.2)	%	(29.4)	%
Data processing	2,345		2,113		2,096		2,334		2,404				11.0	%	(2.45)	%

Amortization of core deposits and other intangibles	940		990		1,039		1,108		1,194				(5.05)	%	(21.3)	%


Advertising	2,001		2,133		3,094		2,050		2,031				(6.19)	%	(1.48)	%
Mortgage restructuring expense	—		—		—		—		12,458				—	%	(100.0)	%
Other expense	15,506		17,399		17,010		14,868		14,760				(10.9)	%	5.05	%
Total noninterest expense	81,292		80,440		80,230		81,847		96,997				1.06	%	(16.2)	%
Income before income taxes	45,142		46,078		48,193		40,762		26,070				(2.03)	%	73.2	%
Income tax expense	9,835		9,697		10,042		8,931		6,717				1.42	%	46.4	%
Net income applicable to FB Financial Corporation and noncontrolling interest	35,307		36,381		38,151		31,831		19,353				(2.95)	%	82.4	%
Net income applicable to noncontrolling interest	8		—		8		—		8				100.0	%	—	%

Net income applicable to FB Financial Corporation	$	35,299	$	36,381	$	38,143	$	31,831	$	19,345			(2.97)	%	82.5	%
Weighted average common shares outstanding:
Basic	46,779,388		46,679,618		46,909,389		46,908,520		47,111,055				0.21	%	(0.70)	%
Fully diluted	46,814,854		46,765,154		47,036,742		47,024,611		47,211,650				0.11	%	(0.84)	%
Earnings per common share:
Basic	$	0.75	$	0.78	$	0.81	$	0.68	$	0.41			(3.85)	%	82.9	%
Fully diluted	0.75		0.78		0.81		0.68		0.41				(3.85)	%	82.9	%
Fully diluted - adjusted*	0.77		0.76		0.85		0.68		0.64				1.32	%	20.3	%


Consolidated Balance Sheets
(Unaudited)
(Dollars in Thousands)

													Annualized
													Q2 2023		Q2 2023
													vs.		vs.
	2023				2022						Q1 2023	Q2 2022
	Second Quarter		First Quarter		Fourth Quarter		Third Quarter		Second Quarter				Percent variance		Percent variance
ASSETS
Cash and due from banks	$	147,646	$	133,874	$	259,872	$	193,301	$	79,402			41.3	%	85.9	%
Federal funds sold and reverse repurchase agreements	48,346		63,994		210,536		115,140		233,588				(98.1)	%	(79.3)	%
Interest-bearing deposits in financial institutions	964,362		1,122,083		556,644		309,849		559,871				(56.4)	%	72.2	%
Cash and cash equivalents	1,160,354		1,319,951		1,027,052		618,290		872,861				(48.5)	%	32.9	%
Investments:
Available-for-sale debt securities, at fair value	1,419,360		1,471,005		1,471,186		1,482,171		1,618,241				(14.1)	%	(12.3)	%
Equity securities, at fair value	3,031		3,059		2,990		2,962		3,103				(3.67)	%	(2.32)	%
Federal Home Loan Bank stock, at cost	40,266		43,369		58,641		58,587		34,581				(28.7)	%	16.4	%
Mortgage loans held for sale	89,864		73,005		108,961		97,011		222,400				92.6	%	(59.6)	%
Commercial loans held for sale, at fair value	9,267		9,510		30,490		33,722		37,815				(10.2)	%	(75.5)	%
Loans held for investment	9,326,024		9,365,996		9,298,212		9,105,016		8,624,337				(1.71)	%	8.14	%
Less: allowance for credit losses	140,664		138,809		134,192		134,476		126,272				5.36	%	11.4	%
Net loans held for investment	9,185,360		9,227,187		9,164,020		8,970,540		8,498,065				(1.82)	%	8.09	%
Premises and equipment, net	154,526		153,397		146,316		143,277		142,474				2.95	%	8.46	%
Other real estate owned, net	1,974		4,085		5,794		5,919		9,398				(207.3)	%	(79.0)	%
Operating lease right-of-use assets	56,560		57,054		60,043		61,444		41,070				(3.47)	%	37.7	%
Interest receivable	44,973		44,737		45,684		39,034		40,393				2.12	%	11.3	%
Mortgage servicing rights, at fair value	166,433		164,879		168,365		171,427		158,678				3.78	%	4.89	%
Goodwill	242,561		242,561		242,561		242,561		242,561				—	%	—	%
Core deposit and other intangibles, net	10,438		11,378		12,368		13,407		14,515				(33.1)	%	(28.1)	%
Bank-owned life insurance	75,341		74,963		75,329		74,976		74,605				2.02	%	0.99	%
Other assets	227,087		201,007		227,956		242,754		183,102				52.0	%	24.0	%
Total assets	$	12,887,395	$	13,101,147	$	12,847,756	$	12,258,082	$	12,193,862			(6.54)	%	5.69	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits
Noninterest-bearing	$	2,400,288	$	2,489,149	$	2,676,631	$	2,966,514	$	2,895,520			(14.3)	%	(17.1)	%
Interest-bearing checking	2,879,336		3,292,883		3,059,984		2,648,161		3,338,561				(50.4)	%	(13.8)	%
Money market and savings	3,971,975		3,904,013		3,697,245		3,228,337		3,131,463				6.98	%	26.8	%


Average Balance and Interest Yield/Rate Analysis

(Unaudited)
(Dollars in Thousands)
	Three Months Ended						Three Months Ended
	June 30, 2023						March 31, 2023
	Average balances		Interest income/ expense		Average yield/ rate		Average balances		Interest income/ expense		Average yield/ rate
Interest-earning assets:
Loans HFI(a)	$	9,387,284	$	148,415	6.34	%	$	9,346,708	$	139,467	6.05	%
Mortgage loans held for sale	63,407		1,005		6.36	%	56,204		927		6.69	%
Commercial loans held for sale	9,377		3		0.13	%	16,608		159		3.88	%
Securities:
Taxable	1,374,308		6,480		1.89	%	1,402,535		6,570		1.90	%
Tax-exempt(a)	293,739		2,445		3.34	%	294,652		2,440		3.36	%
Total securities(a)	1,668,047		8,925		2.15	%	1,697,187		9,010		2.15	%
Federal funds sold and reverse repurchase agreements	61,799		1,050		6.81	%	188,013		1,855		4.00	%
Interest-bearing deposits with other financial institutions	857,862		10,829		5.06	%	728,576		8,008		4.46	%
FHLB stock	42,133		796		7.58	%	47,094		887		7.64	%
Total interest-earning assets(a)	12,089,909		171,023		5.67	%	12,080,390		160,313		5.38	%
Noninterest-earning assets:
Cash and due from banks	118,872						154,270
Allowance for credit losses	(138,983)						(134,803)
Other assets(b)	756,651						761,757
Total noninterest-earning assets	736,540						781,224
Total assets	$	12,826,449					$	12,861,614
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing checking	$	3,127,219	$	23,751	3.05	%	$	3,165,058	$	19,060	2.44	%
Money market	3,516,901		30,053		3.43	%	3,369,953		24,510		2.95	%
Savings deposits	433,530		63		0.06	%	458,023		64		0.06	%
Customer time deposits	1,437,567		10,816		3.02	%	1,472,221		9,221		2.54	%
Brokered and internet time deposits	45,208		574		5.09	%	1,607		8		2.02	%
Time deposits	1,482,775		11,390		3.08	%	1,473,828		9,229		2.54	%
Total interest-bearing deposits	8,560,425		65,257		3.06	%	8,466,862		52,863		2.53	%
Other interest-bearing liabilities:
Securities sold under agreements to repurchase and federal funds purchased	30,050		97		1.29	%	27,139		46		0.69	%
Federal Home Loan Bank advances	61,264		784		5.13	%	41,389		499		4.89	%
Subordinated debt	127,129		2,496		7.88	%	126,161		2,402		7.72	%
Other borrowings	1,385		6		1.74	%	1,688		10		2.40	%


Average Balance and Interest Yield/Rate Analysis (continued)

(Unaudited)
(Dollars in Thousands)
	Three Months Ended						Three Months Ended						Three Months Ended
	December 31, 2022						September 30, 2022						June 30, 2022
	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)	$	9,250,859	$	132,171	5.67	%	$	8,810,094	$	114,488	5.16	%	$	8,323,778	$	96,692	4.66	%
Mortgage loans held for sale	56,180		843		5.95	%	124,358		1,626		5.19	%	215,779		2,350		4.37	%
Commercial loans held for sale	33,640		311		3.67	%	36,291		670		7.32	%	56,460		718		5.10	%
Securities:
Taxable	1,431,776		6,707		1.86	%	1,469,934		6,843		1.85	%	1,474,999		6,499		1.77	%
Tax-exempt(a)	295,698		2,442		3.28	%	298,905		2,459		3.26	%	307,719		2,492		3.25	%
Total securities(a)	1,727,474		9,149		2.10	%	1,768,839		9,302		2.09	%	1,782,718		8,991		2.02	%
Federal funds sold	200,062		1,924		3.82	%	160,597		877		2.17	%	221,929		421		0.76	%
Interest-bearing deposits with other financial institutions	364,543		3,236		3.52	%	361,684		1,850		2.03	%	1,081,474		1,551		0.58	%
FHLB stock	58,623		745		5.04	%	49,478		431		3.46	%	34,536		246		2.86	%
Total interest-earning assets(a)	11,691,381		148,379		5.04	%	11,311,341		129,244		4.53	%	11,716,674		110,969		3.80	%
Noninterest-earning assets:
Cash and due from banks	136,334						109,681						91,230
Allowance for credit losses	(135,998)						(127,710)						(120,297)
Other assets(b)	754,310						744,803						739,872
Total noninterest-earning assets	754,646						726,774						710,805
Total assets	$	12,446,027					$	12,038,115					$	12,427,479
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing checking	$	2,702,960	$	10,284	1.51	%	$	2,821,415	$	5,831	0.82	%	$	3,415,135	$	3,285	0.39	%
Money market	2,976,759		15,196		2.03	%	2,551,521		4,684		0.73	%	2,842,026		1,416		0.20	%
Savings deposits	488,243		66		0.05	%	515,882		70		0.05	%	508,511		68		0.05	%
Customer time deposits	1,310,505		5,902		1.79	%	1,151,843		2,535		0.87	%	1,129,668		1,798		0.64	%
Brokered and internet time deposits	1,980		8		1.60	%	3,501		13		1.47	%	6,387		24		1.51	%
Time deposits	1,312,485		5,910		1.79	%	1,155,344		2,548		0.87	%	1,136,055		1,822		0.64	%
Total interest-bearing deposits	7,480,447		31,456		1.67	%	7,044,162		13,133		0.74	%	7,901,727		6,591		0.33	%
Other interest-bearing liabilities:
Securities sold under agreements to repurchase and federal funds purchased	27,140		28		0.41	%	29,580		12		0.16	%	27,233		12		0.18	%
Federal Home Loan Bank advances	349,859		3,428		3.89	%	329,130		2,155		2.60	%	—		—		—	%
Subordinated debt	126,054		2,182		6.87	%	127,263		1,792		5.59	%	129,691		1,434		4.43	%
Other borrowings	1,434		6		1.66	%	1,457		7		1.91	%	1,480		6		1.63	%


Segment Data
For the Quarters Ended
(Unaudited)
(Dollars in Thousands)

	2023						2022
	Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter
Banking segment
Net interest income	$	101,543		$	103,660		$	110,498		$	111,384		$	102,171
Provisions for credit losses	(1,078)			491			(456)			11,367			12,318

Noninterest income	11,480			11,493			8,345			10,293			10,699


Other noninterest expense	67,653			68,350			66,926			65,886			59,320
Pre-tax income after allocations	$	46,448		$	46,312		$	52,373		$	44,424		$	41,232
Total assets	$	12,302,812		$	12,530,039		$	12,228,451		$	11,648,610		$	11,469,762
Intracompany funding income included in net interest income	4,319			3,931			4,247			4,143			4,850
Core efficiency ratio*	58.8		%	59.6		%	54.7		%	53.8		%	51.3		%
Mortgage segment
Net interest income	$	—		$	—		$	—		$	—		$	—

Mortgage banking income	12,232			12,086			9,106			12,384			22,559
Other noninterest income	101			(230)			18			(85)			(44)

Mortgage restructuring expense	—			—			—			—			12,458
Other noninterest expense	13,639			12,090			13,304			15,961			25,219
Direct (loss) contribution	$	(1,306)		$	(234)		$	(4,180)		$	(3,662)		$	(15,162)
Total assets	$	584,583		$	571,108		$	619,305		$	609,472		$	724,100
Intracompany funding expense included in net interest income	4,319			3,931			4,247			4,143			4,850
Core efficiency ratio*	106.9		%	98.4		%	145.4		%	128.9		%	111.8		%










Interest rate lock commitments volume	$	402,951		$	375,042		$	281,650		$	408,879		$	700,870




Interest rate lock commitments pipeline (period end)	$	135,374		$	157,213		$	118,313		$	188,430		$	292,716




Mortgage loan sales	$	330,326		$	332,307		$	266,834		$	569,655		$	869,688
Gains and fees from origination and sale of mortgage loans held for sale	$	7,994		$	8,146		$	8,967		$	11,085		$	21,099
Net change in fair value of loans held for sale, derivatives, and other	874			(421)			(2,270)			(2,460)			(5,354)
Mortgage servicing income	7,586			7,768			7,264			8,104			7,966
Change in fair value of mortgage servicing rights, net of hedging	(4,222)			(3,407)			(4,855)			(4,345)			(1,152)
Total mortgage banking income	$	12,232		$	12,086		$	9,106		$	12,384		$	22,559
Mortgage sale margin(a)	2.42		%	2.45		%	3.36		%	1.95		%	2.43		%


Loan Portfolio
As of the Quarter Ended
(Unaudited)
(Dollars in Thousands)
	2023								2022
	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	$	1,693,572	18	%	$	1,671,398	18%		$	1,645,783	18%		$	1,534,159	17%		$	1,479,424	17	%
Construction	1,636,970		18	%	1,697,513		18%		1,657,488		18%		1,679,497		18%		1,575,331		18	%
Residential real estate:
1-to-4 family mortgage	1,548,614		17	%	1,562,503		17%		1,573,121		17%		1,545,252		17%		1,457,452		17	%
Residential line of credit	507,652		5	%	497,391		5%		496,660		5%		460,774		5%		425,485		5	%
Multi-family mortgage	518,025		6	%	489,379		5%		479,572		5%		394,366		4%		391,970		5	%
Commercial real estate:
Owner occupied	1,158,782		12	%	1,136,978		12%		1,114,580		12%		1,158,343		13%		1,053,872		12	%
Non-owner occupied	1,881,978		20	%	1,939,517		21%		1,964,010		21%		1,954,219		22%		1,885,122		22	%
Consumer and other	380,431		4	%	371,317		4%		366,998		4%		378,406		4%		355,681		4	%
Total loans HFI	$	9,326,024	100	%	$	9,365,996	100%		$	9,298,212	100%		$	9,105,016	100%		$	8,624,337	100	%
Percentage of loans HFI portfolio with variable interest rates			47.0%				46.5%				46.7%				47.2%				47.8%
Percentage of loans HFI portfolio with variable interest rates that mature after one year			40.6%				40.1%				40.5%				41.7%				41.5%

Loans by market
Metropolitan	$	7,718,424	83	%	$	7,777,346	83	%	$	7,710,999	83	%	$	7,496,090	83	%	$	7,005,014	81	%
Community	653,335		7	%	668,192		7	%	670,043		7	%	669,810		7	%	682,134		8	%
Specialty lending and other	954,265		10	%	920,458		10	%	917,170		10	%	939,116		10	%	937,189		11	%
Total	$	9,326,024	100	%	$	9,365,996	100%		$	9,298,212	100%		$	9,105,016	100%		$	8,624,337	100	%

Unfunded loan commitments
Commercial and Industrial	$	1,168,506	37	%	$	1,125,810	34%		$	1,026,078	29%		$	1,062,657	29%		$	1,003,189	30	%
Construction	1,142,982		36	%	1,340,193		40%		1,639,015		46%		1,696,733		45%		1,522,155		47	%
Residential real estate:
1-to-4 family mortgage	794		—	%	670		—%		829		—%		868		—%		949		—	%
Residential line of credit	675,647		21	%	663,291		20%		655,090		18%		640,834		18%		596,236		18	%
Multi-family mortgage	4,972		—	%	6,310		—%		17,092		1%		28,407		1%		11,742		—	%
Commercial real estate:
Owner occupied	50,927		2	%	48,063		1%		41,954		1%		63,457		2%		49,924		1	%
Non-owner occupied	104,201		3	%	119,239		4%		145,208		4%		136,163		4%		96,462		3	%
Consumer and other	23,306		1	%	25,787		1%		26,634		1%		30,358		1%		48,349		1	%
Total unfunded loans HFI	$	3,171,335	100	%	$	3,329,363	100%		$	3,551,900	100%		$	3,659,477	100%		$	3,329,006	100	%


Asset Quality
As of or for the Quarter Ended
(Unaudited)
(Dollars in Thousands)

	2023						2022
	Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter
Allowance for credit losses roll forward summary
Allowance for credit losses at the beginning of the period	$	138,809		$	134,192		$	134,476		$	126,272		$	120,049


Charge-offs	(892)			(767)			(1,273)			(461)			(2,388)
Recoveries	172			387			837			476			430
Provision for credit losses	2,575			4,997			152			8,189			8,181


Allowance for credit losses at the end of the period	$	140,664		$	138,809		$	134,192		$	134,476		$	126,272
Allowance for credit losses as a percentage of total loans HFI	1.51		%	1.48		%	1.44		%	1.48		%	1.46		%

Allowance for credit losses on unfunded commitments	$	14,810		$	18,463		$	22,969		$	23,577		$	20,399
Charge-offs
Commercial and Industrial	$	(11)		$	(46)		$	(332)		$	—		$	(1,751)

Residential real estate:
1-to-4 family mortgage	(16)			(16)			(34)			(20)			(23)


Commercial real estate:
Owner occupied	(144)			—			(15)			—			—
Non-owner occupied	—			—			(268)			—			—
Consumer and other	(721)			(705)			(624)			(441)			(614)
Total charge-offs	(892)			(767)			(1,273)			(461)			(2,388)
Recoveries
Commercial and Industrial	13			67			679			342			26
Construction	10			—			—			—			11
Residential real estate:
1-to-4 family mortgage	25			15			15			13			14
Residential line of credit	—			—			—			—			16

Commercial real estate:
Owner occupied	16			66			12			51			15

Consumer and other	108			239			131			70			348
Total recoveries	172			387			837			476			430
Net (charge-offs) recoveries	$	(720)		$	(380)		$	(436)		$	15		$	(1,958)
Net charge-offs (recoveries) as a percentage of average total loans	0.03		%	0.02		%	0.02		%	0.00		%	0.09		%
Nonperforming assets
Loans past due 90 days or more and accruing interest	$	12,247		$	12,580		$	18,415		$	16,002		$	14,585
Nonaccrual loans	31,885			32,900			27,431			26,625			29,535
Total nonperforming loans held for investment	44,132			45,480			45,846			42,627			44,120
Commercial loans held for sale	9,267			9,278			9,289			—			1,459
Mortgage loans held for sale(a)	20,225			20,528			26,211			26,485			—

Other real estate owned	1,974			4,085			5,794			5,919			9,398

Other assets	883			498			351			639			527
Total nonperforming assets	$	76,481		$	79,869		$	87,491		$	75,670		$	55,504
Total nonperforming loans as a percentage of loans held for investment	0.47		%	0.49		%	0.49		%	0.47		%	0.51		%
Total nonperforming assets as a percentage of total assets(a)	0.59		%	0.61		%	0.68		%	0.62		%	0.46		%
Total nonaccrual loans as a percentage of total loans HFI	0.34		%	0.35		%	0.30		%	0.29		%	0.34		%