FBK

FB Financial Corp. Q1 2026 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended March 31, 2026. FB Financial Corporation (FBK) operates primarily through its wholly-owned subsidiary, FirstBank, providing commercial and consumer banking services across Tennessee, Alabama, Kentucky, Georgia, and North Carolina. The quarter reflects the ongoing integration of the Southern States Bancshares, Inc. merger completed on July 1, 2025, which added 13 branches and expanded the company's footprint.

Key Financial Metrics

Material Changes vs. Prior Period

• Profitability Surge: Net income increased 46% year-over-year, driven by a $38.3 million increase in net interest income and a $3.3 million increase in noninterest income.
• Loan Growth: Loans held for investment grew to $12.50 billion, up from $9.77 billion in Q1 2025, largely due to the Southern States merger.
• Expense Expansion: Noninterest expenses rose 19.6% to $95.2 million. This was primarily due to a $9.0 million increase in salaries and benefits (merger-related headcount and performance compensation) and $1.4 million in merger and integration costs.
• Asset Quality: Nonperforming assets increased to $162.0 million (0.98% of total assets) from $110.4 million in Q1 2025. This increase includes $32.6 million of delinquent GNMA optional repurchase loans. Net charge-offs were $3.5 million (0.11% of average loans).
• Deposit Mix: Total deposits increased to $14.08 billion. Customer time deposits grew by $280.1 million, while brokered deposits declined by $51.4 million as management allowed balances to mature.

Outlook, Risks, and Management Commentary

• Merger Integration: Management continues to integrate Southern States, with ongoing costs related to branch consolidation and system conversion. The merger has successfully expanded the loan portfolio and deposit base.
• Interest Rate Environment: The company benefits from a normalized yield curve. Net interest margin expanded to 3.94% due to higher loan yields (6.51%) and a decline in the cost of interest-bearing deposits (2.80%).
• Credit Loss Methodology: The company adopted a discounted cash flow estimation technique for credit losses in June 2025. This change, along with loan growth, drove the provision for credit losses to $3.8 million in Q1 2026.
• Capital Management: The company repurchased 426,983 shares in Q1 2026. A new $175 million stock repurchase program was authorized subsequent to the quarter end, replacing the prior $150 million plan.
• Risks: Key risks include interest rate fluctuations, commercial real estate market fundamentals, and the successful realization of merger synergies. The company maintains an asset-sensitive position regarding interest rate risk.

Investor Verification Checklist

• Merger Synergies: Verify the timeline and cost trajectory for realizing the projected cost savings from the Southern States merger integration.
• Commercial Real Estate Exposure: Review the concentration of non-owner occupied CRE loans ($2.87 billion) and the specific performance of the office and hotel sectors within that portfolio.
• Deposit Stability: Monitor the trend of brokered deposits and the cost of funds as the company transitions away from higher-cost brokered CDs.
• Nonperforming Assets: Assess the composition of the $162 million in nonperforming assets, specifically the $32.6 million in GNMA repurchase obligations, to understand the true credit quality of the core loan portfolio.
• Capital Ratios: Confirm that the company remains well-capitalized (Total Risk-Based Capital at 13.4%) despite the increase in nonperforming assets and ongoing stock repurchases.