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Section 1: 8-K (FB FINANCIAL CORPORATION 8-K)

Document


 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
   
 

FORM 8-K
 
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): October 21, 2019

 

FB FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

  
Tennessee
 
001-37875
 
62-1216058
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification Number)
 
 
 
 
 
211 Commerce Street, Suite 300
Nashville, Tennessee
 
 
 
 
37201
(Address of principal executive offices)
 
 
 
(Zip Code)
 
(615) 564-1212
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
 
☐ 
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))
 
☐ 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).   Emerging growth company ý
 
 
 
If  an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ý
 
Item 2.02 Results of Operations and Financial Condition.

On October 21, 2019, FB Financial Corporation (the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2019 (the “Earnings Release”).  In addition, the Company made available on its website (investors.firstbankonline.com) supplemental financial information for the third quarter ended September 30, 2019 (the “Supplemental Financial Information”) and an earnings release presentation (the “Earnings Presentation”) for use in connection with the Earnings Release.  Copies of the Earnings Release, the Supplemental Financial Information and the Earnings Presentation are furnished as Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3, respectively, to this Current Report on Form 8-K (this “Report”).

The information contained in this Report, including Exhibit 99.1, Exhibit 99.2 and  Exhibit 99.3 furnished herewith, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference into any registration statement or other documents pursuant to the Securities Act of 1933, as amended, or into any filing or other document pursuant to the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 7.01. Regulation FD Disclosure.

The disclosure contained in Item 2.02 of this Report is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

Exhibit Number                                          Description of Exhibit







SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
FB FINANCIAL CORPORATION
 
 
 
 
 
 
 
By:
/s/ James R. Gordon
 
 
James R. Gordon
 
 
Chief Financial Officer and Secretary
 
 
 
Date: October 21, 2019
 
 



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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


400513252_fb_supp.jpg
FB Financial Corporation Reports Strong 2019 Third Quarter Results
Reported diluted EPS of $0.76 with ROAA of 1.59% and ROATCE of 17.5%
Adjusted diluted EPS of $0.77, up 13.2% from Q3 2018, with ROAA of 1.61% and ROATCE of 17.7%

NASHVILLE, TENNESSEE--(BUSINESS WIRE)--October 21, 2019--FB Financial Corporation (the “Company”) (NYSE: FBK), parent company of FirstBank, reported net income of $24.0 million, or $0.76 per diluted common share, for the third quarter of 2019, compared to net income of $21.4 million, or $0.68 per diluted common share, for the third quarter of 2018. On an adjusted basis, excluding merger and mortgage restructuring expenses, net income per diluted common share was $0.77 for the third quarter of 2019 compared to $0.70 for the second quarter of 2019 and $0.68 for the third quarter of 2018.
President and Chief Executive Officer, Christopher T. Holmes stated, “Our strong third quarter results reflect the continued execution by our team and the strength of our markets. Our growth in loans and deposits and our strong net interest margin reflect our continued discipline and our focus on growing our bank with great customers across all of our markets. While balancing growth and profitability in a challenging rate environment, the team produced strong adjusted returns on average assets of 1.61% and average tangible equity of 17.7%. In addition, we completed the restructure of our mortgage business and announced the acquisition of a very high quality community bank. ”

Holmes further commented, “During the quarter, we announced the acquisition of Farmers National Bank of Scottsville (KY) with total assets of $252.5 million, loans of $178.4 million and deposits of $203.9 million. Farmers National fits well with our strategy, culture and geography while providing attractive returns for our shareholders. We are excited to welcome their team and customers to the FirstBank family.”

Performance Summary
 
 
2019
 
2018
 
Annualized
 
 
(dollars in thousands, expect per share data)
 
Third Quarter
 
Second Quarter
 
Third Quarter
 
3Q19 / 2Q19
% Change
 
3Q19 / 3Q18
% Change
Balance Sheet Highlights
 
 
 
 
 
 
 
 
 
 
     Investment securities
 
$
671,781

 
$
678,457

 
$
609,568

 
(3.90
)%
 
10.2
 %
     Loans - held for sale
 
305,493

 
294,699

 
323,486

 
14.5
 %
 
(5.56
)%
     Loans - held for investment (HFI)
 
4,345,344

 
4,289,516

 
3,538,531

 
5.16
 %
 
22.8
 %
     Allowance for loan losses
 
31,464

 
30,138

 
27,608

 
17.5
 %
 
14.0
 %
     Total assets
 
6,088,895

 
5,940,402

 
5,058,167

 
9.92
 %
 
20.4
 %
     Customer deposits
 
4,896,327

 
4,812,962

 
4,017,391

 
6.87
 %
 
21.9
 %
     Brokered and internet time deposits
 
25,436

 
29,864

 
112,082

 
(58.8
)%
 
(77.3
)%
     Total deposits
 
4,921,763

 
4,842,826

 
4,129,473

 
6.47
 %
 
19.2
 %
     Borrowings
 
307,129

 
257,299

 
210,968

 
76.8
 %
 
45.6
 %
     Total shareholders' equity
 
744,835

 
718,759

 
648,731

 
14.4
 %
 
14.8
 %
          Tangible book value per
share*
 
$
18.03

 
$
17.18

 
$
16.25

 
 
 
 
          Tangible common equity to
tangible assets*
 
9.4
%
 
9.2
%
 
10.2
%
 
 
 
 
* 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 issued October 21, 2019 for a reconciliation and discussion of this non-GAAP measure.



FB Financial Corporation
2019 Third Quarter Results
Page 2

 
 
2019
 
2018
(dollars in thousands, except share data)
 
Third Quarter
 
Second Quarter
 
Third Quarter
Results of operations
 
 
 
 
 
 
Net interest income
 
$
58,305

 
$
57,023

 
$
52,755

      NIM
 
4.28
%
 
4.39
%
 
4.71
%
Provision for loan losses
 
$
1,831

 
$
881

 
$
1,818

     Net charge-off ratio
 
0.05
%
 
0.05
%
 
0.06
%
Noninterest income
 
$
38,145

 
$
32,979

 
$
34,355

     Mortgage banking income
 
$
29,193

 
$
24,526

 
$
26,649

Total revenue
 
$
96,450

 
$
90,002

 
$
87,110

Noninterest expenses
 
$
62,935

 
$
64,119

 
$
57,213

     Merger and mortgage restructuring expenses
 
$
407

 
$
4,612

 
$

     Efficiency ratio
 
65.3
%
 
71.2
%
 
65.7
%
     Core efficiency ratio*
 
64.5
%
 
65.9
%
 
65.7
%
Pre-tax income
 
$
31,684

 
$
25,002

 
$
28,079

    Total mortgage banking pre-tax contribution, adjusted*
 
$
5,375

 
$
2,563

 
$
1,467

Net income
 
$
23,966

 
$
18,688

 
$
21,377

Diluted earnings per share
 
$
0.76

 
$
0.59

 
$
0.68

     Effective tax rate
 
24.4
%
 
25.3
%
 
23.9
%
Net income, adjusted*
 
$
24,267

 
$
22,098

 
$
21,377

Diluted earnings per share, adjusted*
 
$
0.77

 
$
0.70

 
$
0.68

Weighted average number of shares outstanding- fully diluted
 
31,425,573

 
31,378,018
 
31,339,628

Actual shares outstanding - period end
 
30,927,664

 
30,865,636
 
30,715,792

Returns on average:
 
 
 
 
 
 
     Assets ("ROAA")
 
1.59
%
 
1.30
%
 
1.72
%
         Adjusted*
 
1.61
%
 
1.54
%
 
1.72
%
     Equity ("ROAE")
 
13.0
%
 
10.6
%
 
13.3
%
     Tangible common equity ("ROATCE")*
 
17.5
%
 
14.4
%
 
17.4
%
         Adjusted*
 
17.7
%
 
17.0
%
 
17.4
%
* 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 issued October 21, 2019, for a reconciliation and discussion of this non-GAAP measure.

Prudent and Balanced Growth
The Company grew loans (HFI) by $55.8 million during the third quarter of 2019, or 5.16% annualized while average loans (HFI) increased 12.3% annualized from last quarter. Year over year organic loan growth was 12.2%. Contractual loan yields decreased from 5.57% in the second quarter to 5.50% in the third quarter, related to the lower interest rate environment.
During the third quarter of 2019, the Company grew customer deposits by $83.4 million, primarily driven by $102.5 million increase in noninterest-bearing deposits, offset by a $76.5 million decrease in time deposits. The Company reduced its cost of deposits to 1.11% from 1.14% in the second quarter of 2019. Noninterest-bearing deposits increased to 24.7% of total deposits at September 30, 2019, from 23.0% at June 30, 2019. Loans (HFI) to deposits slightly decreased from 88.6% last quarter to 88.3% this quarter.
The Company’s net interest income increased $1.3 million to $58.3 million from $57.0 million last quarter. The Company’s net interest margin (“NIM”) was 4.28% for the third quarter of 2019, compared to 4.39% and 4.71% for the second quarter of 2019 and the third quarter of 2018, respectively. Accretion related to purchased loans and nonaccrual interest contributed 16 basis points to the NIM in the third quarter of 2019 compared to 17 and 25 basis points for the second quarter of 2019 and the third quarter of 2018, respectively. Overall, the NIM was impacted by a 15 basis point decline in the yields on interest-earning assets offset by a 4 basis point decline in the rate on interest-bearing liabilities.
Noninterest Income Improves with Mortgage Results
During the quarter, the lower interest rate environment drove increased results from our mortgage business. Noninterest income was $38.1 million for the third quarter of 2019, compared to $33.0 million for the second quarter of 2019 and $34.4 million for the third quarter of 2018. Mortgage banking income was $29.2 million for the third quarter of 2019, compared to $24.5 million for the second quarter of 2019 and $26.6 million for the third quarter of 2018. Interest rate lock commitment volume totaled $1.64 billion in the third quarter of 2019 compared to $1.82 billion in the second quarter of 2019 and $1.70 billion in the third quarter of 2018, benefiting from the lower rate environment in the retail and Consumer Direct channels.



FB Financial Corporation
2019 Third Quarter Results
Page 3

During the third quarter of 2019, the Company’s total mortgage pre-tax direct contribution was $5.4 million, excluding mortgage restructuring expense of $0.1 million. This compares to the $2.6 million contribution, excluding mortgage restructuring expense of $0.8 million, in the second quarter of 2019 and $1.5 million in the third quarter of 2018.
Holmes commented, “We completed the restructuring of the mortgage division allowing us to focus on our core business and produce outstanding operating results, capitalizing on the lower rate environment. Our smaller and more focused team is working to grow their customer base and refine their operations and continues to make impressive progress.”
Noninterest Expenses
Noninterest expense was $62.9 million for the third quarter of 2019, compared to $64.1 million for the second quarter of 2019 and $57.2 million for the third quarter of 2018. Adjusted for merger and mortgage restructuring expenses, noninterest expense was $62.5 million for the third quarter of 2019 and $59.5 million for the second quarter of 2019. The increase from the second quarter was primarily driven by higher mortgage expenses and increased incentives and other expenses from banking operations.
Chief Financial Officer James R. Gordon noted, “Noninterest expenses remained under control while continuously investing in our teams and infrastructure this quarter along with increased mortgage operating expenses driven by higher volumes in our retail channels. Our core efficiency ratio was down slightly to 64.5% from last quarter.”
Asset Quality Remains Strong
During the third quarter of 2019, the Company recognized a provision for loan losses of $1.8 million, reflecting loan growth, renewals of previously acquired loans, stable credit metrics, changing economic outlook and net charge-offs of 0.05% of average loans. The Company's nonperforming assets slightly increased at September 30, 2019 to 0.62% of total assets compared to 0.59% at June 30, 2019. Nonperforming loans were 0.47% of loans held for investment at September 30, 2019, compared to 0.43% at June 30, 2019.
Capital Positioned for Growth
“Our earnings continue to provide capital for growth and the opportunity to continue our previously announced quarterly cash dividend of eight cents per share. With our tangible common equity at 9.4% of tangible assets, we continue to manage our capital levels with our dividend and maintain our repurchase authorization. We remain focused on delivering strong equity returns with a 17.7% adjusted return on average tangible equity this quarter driving a 10.9% increase in tangible book value per share to $18.03 from last year," commented Gordon.
Summary
Holmes further commented, “Our results reflect the hard work of our team in balancing growth and profitability during a quarter with economic and interest rate challenges. In addition to the operating results, we announced a high quality acquisition, and momentum continues to build. We are proud of our team and our results this quarter and look forward to a bright future.”
WEBCAST AND CONFERENCE CALL INFORMATION
The live broadcast of FB Financial Corporation’s earnings conference call will begin at 8:00 a.m. CT on Tuesday, October 22, 2019, and the conference call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1631/31780. An online replay will be available approximately an hour following the conclusion of the live broadcast.
ABOUT FB FINANCIAL CORPORATION
FB Financial Corporation (NYSE: FBK) is a bank holding company headquartered in Nashville, Tennessee. FB Financial Corporation operates through its wholly owned banking subsidiary, FirstBank, the third largest Tennessee-headquartered community bank, with 68 full-service bank branches across Tennessee, North Alabama and North Georgia, and mortgage offices across the Southeast. FirstBank serves five of the largest metropolitan markets in Tennessee and has approximately $6.1 billion in total assets.
MEDIA CONTACT:                FINANCIAL CONTACT:
Jeanie M. Rittenberry                James R. Gordon
615-313-8328                    615-564-1212
[email protected]         [email protected]
www.firstbankonline.com                 [email protected]
SUPPLEMENTAL FINANCIAL INFORMATION AND EARNINGS PRESENTATION



FB Financial Corporation
2019 Third Quarter Results
Page 4

Investors are encouraged to review this Earnings Release in conjunction with the Supplemental Financial Information and Earnings Presentation posted on the Company’s website, which can be found at https://investors.firstbankonline.com. This Earnings Release, the Supplemental Financial Information and the Earnings Presentation are also included with a Current Report on Form 8-K that the Company furnished to the U.S. Securities and Exchange Commission (“SEC”) on October 21, 2019.
BUSINESS SEGMENT RESULTS
The Company has included its business segment financial tables as part of this Earnings Release. A detailed discussion of our business segments is included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2018, and investors are encouraged to review that discussion in conjunction with this Earnings Release.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this earnings release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, without limitation, statements relating to the timing, benefits, costs, and synergies of the proposed merger (the “FNB merger”) with Farmers National Bank of Scottsville (“FNB”), and FB Financial’s future plans, results, strategies, and expectations. These statements can generally be identified by the use of the words and phrases “may,” “will,” “should,” “could,” “would,” “goal,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target,” “aim,” “predict,” “continue,” “seek,” “projection,” and other variations of such words and phrases and similar expressions. These forward-looking statements are not historical facts, and are based upon current expectations, estimates, and projections, many of which, by their nature, are inherently uncertain and beyond FB Financial’s control. The inclusion of these forward-looking statements should not be regarded as a representation by the FB Financial or any other person that such expectations, estimates, and projections will be achieved. Accordingly, FB Financial cautions shareholders and investors that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict and that are beyond FB Financial’s control. Although FB Financial believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this release, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements including, without limitation, (1) the risk that the cost savings and any revenue synergies from the proposed FNB merger or another acquisition may not be realized or take longer than anticipated to be realized, (2) disruption from the proposed FNB merger with customer, supplier, or employee relationships, (3) the occurrence of any event, change, or other circumstances that could give rise to the termination of the merger agreement with FNB, (4) the failure to obtain necessary regulatory approvals for the FNB merger, (5) the failure to obtain the approval of FNB’s shareholders for the FNB merger, (6) the possibility that the costs, fees, expenses, and charges related to the FNB merger may be greater than anticipated, including as a result of unexpected or unknown factors, events, or liabilities, (7) the failure of the conditions to the FNB merger to be satisfied, (8) the risks related to the integration of acquired businesses (including the proposed FNB merger, FB Financial’s recent acquisition of branches from Atlantic Capital Bank, and any future acquisitions), including the risk that the integration of the acquired operations with those of FB Financial will be materially delayed or will be more costly or difficult than expected, (9) the risks associated with FB Financial’s pursuit of future acquisitions, (10) the risk of expansion into new geographic or product markets, (11) reputational risk and the reaction of the parties’ customers to the FNB merger, (12) FB Financial’s ability to successful execute its various business strategies, including its ability to execute on potential acquisition opportunities, (13) the risk of potential litigation or regulatory action related to the FNB merger, and (14) general competitive, economic, political, and market conditions, as well as the other risk factors set forth in our December 31, 2018 Form 10-K, filed with the Securities and Exchange Commission on March 12, 2019, under the captions “Cautionary note regarding forward-looking statements” and “Risk factors”.
GAAP RECONCILIATION AND USE OF NON-GAAP FINANCIAL MEASURES
This Earnings Release contains certain financial measures that are not measures recognized under U.S. generally accepted accounting principles (“GAAP”) and therefore are considered non-GAAP financial measures. These non-GAAP financial measures include, without limitation, adjusted net income, adjusted diluted earnings per share, core revenue, core noninterest expense and core noninterest income, core efficiency ratio (tax equivalent basis), Banking segment core efficiency ratio (tax equivalent basis), Mortgage segment core efficiency ratio (tax equivalent basis), adjusted mortgage contribution, adjusted return on average assets and equity and core total revenue.  Each of these non-GAAP metrics excludes certain income and expense items that the Company’s management considers to be non-core/adjusted in nature. The Company refers to these non-GAAP measures as adjusted measures. The corresponding Supplemental Financial Information and Earnings Release Presentation also presents tangible assets, tangible common equity, tangible book value per common share, tangible common equity to tangible assets, return on tangible common equity, return on average tangible common equity and adjusted return on average tangible common equity.  Each of these non-GAAP metrics excludes the impact of goodwill and other intangibles.



FB Financial Corporation
2019 Third Quarter Results
Page 5

The Company’s management uses these non-GAAP financial measures in their analysis of the Company’s performance, financial condition and the efficiency of its operations as management believes such measures facilitate period-to-period comparisons and provide meaningful indications of its operating performance as they eliminate both gains and charges that management views as non-recurring or not indicative of operating performance. Management believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods as well as demonstrate the effects of significant non-core gains and charges in the current and prior periods. The Company’s management also believes that investors find these non-GAAP financial measures useful as they assist investors in understanding the Company’s underlying operating performance and in the analysis of ongoing operating trends. In addition, because intangible assets such as goodwill and other intangibles, and the other items excluded each vary extensively from company to company, the Company believes that the presentation of this information allows investors to more easily compare the Company’s results to the results of other companies. However, the non-GAAP financial measures discussed herein should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which the Company calculates the non-GAAP financial measures discussed herein may differ from that of other companies reporting measures with similar names. Investors should understand how such other banking organizations calculate their financial measures similar or with names similar to the non-GAAP financial measures the Company has discussed herein when comparing such non-GAAP financial measures. See the “Use of non-GAAP Financial Measures” and the corresponding non-GAAP reconciliation tables in the Supplemental Financial Information as well as “Use of non-GAAP Financial Measures” and the Appendix in the Earnings Release Presentation issued October 21, 2019, for a discussion and reconciliation of these measures to the most directly comparable GAAP financial measures.



FB Financial Corporation
2019 Third Quarter Results
Page 6

Financial Summary and Key Metrics
(Unaudited)
(In Thousands, Except Share Data and %)
 
 
2019
 
2018
 
 
Third Quarter
 
Second Quarter
 
Third Quarter
Statement of Income Data
 
 
 
 
 
 
Total interest income
 
$
73,242

 
$
71,719

 
$
62,612

Total interest expense
 
14,937

 
14,696

 
9,857

Net interest income
 
58,305

 
57,023

 
52,755

Provision for loan losses
 
1,831

 
881

 
1,818

Total noninterest income
 
38,145

 
32,979

 
34,355

Total noninterest expense
 
62,935

 
64,119

 
57,213

Net income before income taxes
 
31,684

 
25,002

 
28,079

Income tax expense
 
7,718

 
6,314

 
6,702

Net income
 
$
23,966

 
$
18,688

 
$
21,377

Net interest income (tax—equivalent basis)
 
$
58,769

 
$
57,488

 
$
53,161

Net income, adjusted*
 
$
24,267

 
$
22,098

 
$
21,377

Per Common Share
 
 
 

 

Diluted net income
 
$
0.76

 
$
0.59

 
$
0.68

Diluted net income, adjusted*
 
0.77

 
0.70

 
0.68

Book value
 
24.08

 
23.29

 
21.12

Tangible book value*
 
18.03

 
17.18

 
16.25

Weighted average number of shares outstanding- fully diluted
 
31,425,573

 
31,378,018

 
31,339,628

Period-end number of shares
 
30,927,664

 
30,865,636

 
30,715,792

Selected Balance Sheet Data
 
 
 
 
 
 
Cash and cash equivalents
 
$
242,997

 
$
164,336

 
$
181,630

Loans held for investment (HFI)
 
4,345,344

 
4,289,516

 
3,538,531

Allowance for loan losses
 
(31,464
)
 
(30,138
)
 
(27,608
)
Loans held for sale
 
305,493

 
294,699

 
323,486

Investment securities, at fair value
 
671,781

 
678,457

 
609,568

Other real estate owned, net
 
16,076

 
15,521

 
13,587

Total assets
 
6,088,895

 
5,940,402

 
5,058,167

Customer deposits
 
4,896,327

 
4,812,962

 
4,017,391

Brokered and internet time deposits
 
25,436

 
29,864

 
112,082

Total deposits
 
4,921,763

 
4,842,826

 
4,129,473

Borrowings
 
307,129

 
257,299

 
210,968

Total shareholders' equity
 
744,835

 
718,759

 
648,731

Selected Ratios
 
 
 
 
 
 
Return on average:
 
 
 
 
 
 
Assets
 
1.59
%
 
1.30
%
 
1.72
%
Shareholders' equity
 
13.0
%
 
10.6
%
 
13.3
%
Tangible common equity*
 
17.5
%
 
14.4
%
 
17.4
%
Average shareholders' equity to average assets
 
12.2
%
 
12.3
%
 
12.9
%
Net interest margin (NIM) (tax-equivalent basis)
 
4.28
%
 
4.39
%
 
4.71
%
Efficiency ratio (GAAP)
 
65.3
%
 
71.2
%
 
65.7
%
Core efficiency ratio (tax-equivalent basis)*
 
64.5
%
 
65.9
%
 
65.7
%
Loans HFI to deposit ratio
 
88.3
%
 
88.6
%
 
85.7
%
Total loans to deposit ratio
 
94.5
%
 
94.7
%
 
93.5
%
Yield on interest-earning assets
 
5.37
%
 
5.52
%
 
5.58
%
Cost of interest-bearing liabilities
 
1.50
%
 
1.54
%
 
1.20
%
Cost of total deposits
 
1.11
%
 
1.14
%
 
0.80
%
Credit Quality Ratios
 
 
 
 
 
 
Allowance for loan losses as a percentage of loans HFI
 
0.72
%
 
0.70
%
 
0.78
%
Net charge-off's as a percentage of average loans HFI
 
0.05
%
 
0.05
%
 
0.06
%
Nonperforming loans HFI as a percentage of total loans HFI
 
0.47
%
 
0.43
%
 
0.30
%
Nonperforming assets as a percentage of total assets
 
0.62
%
 
0.59
%
 
0.51
%
Preliminary capital ratios (Consolidated)
 
 
 
 
 
 
Shareholders' equity to assets
 
12.2
%
 
12.1
%
 
12.8
%
Tangible common equity to tangible assets*
 
9.45
%
 
9.22
%
 
10.2
%
Tier 1 capital (to average assets)
 
10.1
%
 
10.0
%
 
11.3
%
Tier 1 capital (to risk-weighted assets)
 
11.3
%
 
11.0
%
 
12.2
%
Total capital (to risk-weighted assets)
 
12.0
%
 
11.6
%
 
12.8
%
Common Equity Tier 1 (to risk-weighted assets) (CET1)
 
10.8
%
 
10.4
%
 
11.5
%
*These measures are considered non-GAAP financial measures. See "GAAP Reconciliation and Use of Non-GAAP Financial Measures" and the corresponding financial tables
below for reconciliations of these Non-GAAP measures. Investors are encouraged to refer to the discussion of non-GAAP measures included in the corresponding earnings release.



FB Financial Corporation
2019 Third Quarter Results
Page 7

Non-GAAP Reconciliation
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
 
 
 
 
 
 
 
2019
 
2018
Net income, adjusted
 
Third Quarter
 
Second Quarter
 
Third Quarter
Pre-tax net income
 
$
31,684

 
$
25,002

 
$
28,079

Plus merger and mortgage restructuring expenses
 
407

 
4,612

 

Pre-tax net income, adjusted
 
$
32,091

 
$
29,614

 
$
28,079

Income tax expense, adjusted
 
7,824

 
7,516

 
6,702

Net income, adjusted
 
$
24,267

 
$
22,098

 
$
21,377

Weighted average common shares outstanding- fully diluted
 
31,425,573
 
31,378,018
 
31,339,628
Diluted earnings per share, adjusted
 
 
 
 
 
 
Diluted earnings per common share
 
$
0.76

 
$
0.59

 
$
0.68

Plus merger and mortgage restructuring expenses
 
0.01

 
0.15

 

Less tax effect
 

 
0.04

 

Diluted earnings per share, adjusted
 
$
0.77

 
$
0.70

 
$
0.68

 
 
 
 
 
 
 
Net income, adjusted
 
YTD 2019
 
2018
 
2017
Pre-tax net income
 
$
82,249

 
$
105,854

 
$
73,485

Plus merger, offering, and mortgage restructuring expenses
 
6,694

 
2,265

 
19,034

Pre tax net income, adjusted
 
88,943

 
108,119

 
92,519

Income tax expense, adjusted
 
21,751

 
26,034

 
34,749

Net income, adjusted
 
$
67,192

 
$
82,085

 
$
57,770

Weighted average common shares outstanding- fully diluted
 
31,378,786

 
31,314,981

 
28,207,602

 
 
 
 
 
 
 
Diluted earnings per share, adjusted
 
 
 
 
 
 
Diluted earning per share
 
$
1.97

 
$
2.55

 
$
1.86

Plus merger, offering, and mortgage
restructuring expenses
 
0.21

 
0.07

 
0.67

Less tax effect and benefit of enacted tax laws
 
0.05

 
0.01

 
0.48

Diluted earnings per share, adjusted
 
$
2.13

 
$
2.61

 
$
2.05

 
 
 
 
 
 
 
 
 
2019
 
2018
Core efficiency ratio (tax-equivalent basis)
 
Third Quarter
 
Second Quarter
 
Third Quarter
Total noninterest expense
 
$
62,935

 
$
64,119

 
$
57,213

Less merger and mortgage restructuring expenses
 
407

 
4,612

 

Core noninterest expense
 
$
62,528

 
$
59,507

 
$
57,213

Net interest income (tax-equivalent basis)
 
$
58,769

 
$
57,488

 
$
53,161

Total noninterest income
 
38,145

 
32,979

 
34,355

Less (loss) gain on sales or write-downs of other
real estate owned and other assets
 
(82
)
 
94

 
446

Less (loss) gain from securities, net
 
(20
)
 
52

 
(27
)
Core noninterest income
 
38,247

 
32,833

 
33,936

Core revenue
 
$
97,016

 
$
90,321

 
$
87,097

Efficiency ratio (GAAP)(a)
 
65.3
%
 
71.2
%
 
65.7
%
Core efficiency ratio (tax-equivalent basis)
 
64.5
%
 
65.9
%
 
65.7
%
(a) Efficiency ratio (GAAP) is calculated by dividing reported noninterest expense by reported total revenue.



FB Financial Corporation
2019 Third Quarter Results
Page 8

Non-GAAP Reconciliation
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
 
 
 
 
 
 
 
2019
 
2018
Banking segment core efficiency ratio
(tax equivalent)
 
Third Quarter
 
Second Quarter
 
Third Quarter
Core consolidated noninterest expense
 
$
62,528

 
$
59,507

 
$
57,213

Less Mortgage segment core noninterest expense
 
15,686

 
17,835

 
18,821

Core Banking segment noninterest expense
 
46,842

 
41,672

 
38,392

Core revenue
 
97,016

 
90,321

 
87,097

Less Mortgage segment total revenue
 
18,455

 
19,119

 
19,254

Core Banking segment total revenue
 
$
78,561

 
$
71,202

 
$
67,843

Banking segment core efficiency ratio
(tax-equivalent basis)
 
59.6
%
 
58.5
%
 
56.6
%
 
 
 
 
 
 
 
Mortgage segment core efficiency ratio
(tax equivalent)
 
 
 
 
 
 
Mortgage segment noninterest expense
 
$
15,798

 
$
18,664

 
$
18,821

Less mortgage restructuring expense
 
112

 
829

 

Core Mortgage segment noninterest expense
 
$
15,686

 
$
17,835

 
$
18,821

Mortgage segment total revenue
 
$
18,455

 
$
19,119

 
19,254

Mortgage segment core efficiency ratio
(tax-equivalent basis)
 
85.0
%
 
93.3
%
 
97.8
%
 
 
 
 
 
 
 
 
 
 
2019
 
2018
Mortgage contribution, adjusted
 
Third Quarter
 
Second Quarter
 
Third Quarter
Mortgage segment pre-tax net contribution
 
$
2,657

 
$
455

 
433

Retail footprint:
 
 
 
 
 
 
   Mortgage banking income
 
10,693

 
5,451

 
7,417

   Mortgage banking expenses
 
8,087

 
4,172

 
6,383

       Retail footprint pre-tax net contribution
 
2,606

 
1,279

 
1,034

Total mortgage banking pre-tax net contribution
 
$
5,263

 
$
1,734

 
1,467

Plus mortgage restructuring expense
 
112

 
829

 

Total mortgage banking pre-tax net contribution, adjusted
 
$
5,375

 
$
2,563

 
$
1,467

Pre-tax net income
 
$
31,684

 
$
25,002

 
$
28,079

% total mortgage banking pre-tax net contribution
 
16.6
%
 
6.94
%
 
5.22
%
Pre-tax net income, adjusted
 
$
32,091

 
$
29,614

 
$
28,079

% total mortgage banking pre-tax net contribution,
adjusted
 
16.7
%
 
8.65
%
 
5.22
%
 
 
 
 
 
 
 
 
 
2019
 
2018
Tangible assets and equity
 
Third Quarter
 
Second Quarter
 
Third Quarter
Tangible Assets
 
 
 
 
 
 
Total assets
 
$
6,088,895

 
$
5,940,402

 
$
5,058,167

Less goodwill
 
168,486

 
168,486

 
137,190

Less intangibles, net
 
18,748

 
19,945

 
12,403

Tangible assets
 
$
5,901,661

 
$
5,751,971

 
$
4,908,574

Tangible Common Equity
 
 
 
 
 
 
Total shareholders' equity
 
$
744,835

 
$
718,759

 
$
648,731

Less goodwill
 
168,486

 
168,486

 
137,190

Less intangibles, net
 
18,748

 
19,945

 
12,403

Tangible common equity
 
$
557,601

 
$
530,328

 
$
499,138

Common shares outstanding
 
30,927,664

 
30,865,636

 
30,715,792

Book value per common share
 
$
24.08

 
$
23.29

 
$
21.12

Tangible book value per common share
 
$
18.03

 
$
17.18

 
$
16.25

Total shareholders' equity to total assets
 
12.2
%
 
12.1
%
 
12.8
%
Tangible common equity to tangible assets
 
9.45
%
 
9.22
%
 
10.2
%



FB Financial Corporation
2019 Third Quarter Results
Page 9

Non-GAAP Reconciliation
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
 
 
 
 
 
 
 
2019
 
2018
Return on average tangible common equity
 
Third Quarter
 
Second Quarter
 
Third Quarter
Total average shareholders' equity
 
$
731,701

 
$
708,557

 
$
638,388

Less average goodwill
 
168,486

 
167,781

 
137,190

Less average intangibles, net
 
19,523

 
20,214

 
12,803

Average tangible common equity
 
$
543,692

 
$
520,562

 
$
488,395

Net income
 
$
23,966

 
$
18,688

 
$
21,377

Return on average tangible common equity
 
17.5
%
 
14.4
%
 
17.4
%
 
 
 
 
 
 
 
2019
 
2018
Return on average tangible common equity, adjusted
 
Third Quarter
 
Second Quarter
 
Third Quarter
Average tangible common equity
 
$
543,692

 
$
520,562

 
$
488,395

Net income, adjusted
 
24,267

 
22,098

 
21,377

Return on average tangible common equity, adjusted
 
17.7
%
 
17.0
%
 
17.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average tangible common equity
 
YTD 2019
 
2018
 
2017
Total average shareholders' equity
 
$
708,436

 
$
629,922

 
$
466,219

Less average goodwill
 
157,924

 
137,190

 
84,997

Less average intangibles, net
 
16,897

 
12,815

 
8,047

Average tangible common equity
 
$
533,615

 
$
479,917

 
$
373,175

Net income
 
62,242

 
80,236

 
52,398

Return on average tangible common equity
 
15.6
%
 
16.7
%
 
14.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average tangible common equity, adjusted
 
YTD 2019
 
2018
 
2017
Average tangible common equity
 
$
533,615

 
$
479,917

 
$
373,175

Net income, adjusted
 
67,192

 
82,085

 
57,770

Return on average tangible common equity, adjusted
 
16.8
%
 
17.1
%
 
15.5
%
 
 
 
 
 
 
 
 
 
2019
 
2018
Return on average assets and equity, adjusted
 
Third Quarter
 
Second Quarter
 
Third Quarter
Net income
 
$
23,966

 
$
18,688

 
$
21,377

Average assets
 
5,988,572

 
5,771,371

 
4,932,197

Average equity
 
731,701

 
708,557

 
638,388

Return on average assets
 
1.59
%
 
1.30
%
 
1.72
%
Return on average equity
 
13.0
%
 
10.6
%
 
13.3
%
Net income, adjusted
 
$
24,267

 
$
22,098

 
$
21,377

Return on average assets, adjusted
 
1.61
%
 
1.54
%
 
1.72
%
Return on average equity, adjusted
 
13.2
%
 
12.5
%
 
13.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets and equity, adjusted
 
YTD 2019
 
2018
 
2017
Net income
 
$
62,242

 
$
80,236

 
$
52,398

Average assets
 
5,647,705

 
4,844,865

 
3,811,158

Average equity
 
708,436

 
629,922

 
466,219

Return on average assets
 
1.47
%
 
1.66
%
 
1.37
%
Return on average equity
 
11.7
%
 
12.7
%
 
11.2
%
Net income, adjusted
 
$
67,192

 
$
82,085

 
$
57,770

Return on average assets, adjusted
 
1.59
%
 
1.69
%
 
1.52
%
Return on average equity, adjusted
 
12.7
%
 
13.0
%
 
12.4
%




(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit



















400513252_logoa05.jpg

 
 
Third Quarter 2019
Financial Supplement





TABLE OF CONTENTS
 
 
Page
 
 
Financial Summary and Key Metrics
 
 
Consolidated Statements of Income
 
 
Consolidated Balance Sheets
 
 
Branch Acquisition Opening Balance Sheet (Preliminary)
8
 
 
Average Balance, Average Yield Earned and Average Rate Paid
 
 
Loans and Deposits by Market
 
 
Segment Data
 
 
Loan Portfolio and Asset Quality
 
 
Preliminary Capital Ratios
 
 
Investment Portfolio
 
 
Non-GAAP Reconciliation





Use of non-GAAP Financial Measures
 
This Supplemental Financial Information contains certain financial measures that are not measures recognized under U.S. generally accepted accounting principles (“GAAP”) and therefore are considered non-GAAP financial measures. These non-GAAP financial measures include, without limitation, adjusted net income, adjusted diluted earnings per share, core noninterest expense and core noninterest income, core efficiency ratio (tax equivalent basis), Banking segment core efficiency ratio (tax equivalent basis), Mortgage segment core efficiency ratio (tax equivalent basis), adjusted mortgage contribution, adjusted return on average assets and equity, pro forma return on average assets and equity, adjusted pro forma return on average assets and equity and core total revenue.  Each of these non-GAAP metrics excludes certain income and expense items that the Company’s management considers to be non-core/adjusted in nature. The Company refers to these non-GAAP measures as adjusted measures. The corresponding Earnings Release and Earnings Release Presentation also presents tangible assets, tangible common equity, tangible book value per common share, tangible common equity to tangible assets, return on tangible common equity, return on average tangible common equity, pro forma return on average tangible common equity, adjusted return on average tangible common equity and pro forma adjusted return on average tangible common equity.  Each of these non-GAAP metrics excludes the impact of goodwill and other intangibles.
The Company’s management uses these non-GAAP financial measures in their analysis of the Company’s performance, financial condition and the efficiency of its operations as management believes such measures facilitate period-to-period comparisons and provide meaningful indications of its operating performance as they eliminate both gains and charges that management views as non-recurring or not indicative of operating performance. Management believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods as well as demonstrating the effects of significant non-core gains and charges in the current and prior periods. The Company’s management also believes that investors find these non-GAAP financial measures useful as they assist investors in understanding the Company’s underlying operating performance and in the analysis of ongoing operating trends.  In addition, because intangible assets such as goodwill and other intangibles, and the other items excluded each vary extensively from company to company, the Company believes that the presentation of this information allows investors to more easily compare the Company’s results to the results of other companies.  However, the non-GAAP financial measures discussed herein should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which the Company calculates the non-GAAP financial measures discussed herein may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar or with names similar to the non-GAAP financial measures the Company has discussed herein when comparing such non-GAAP financial measures.  The Company includes tables under the Non-GAAP reconciliation section of this document to provide a reconciliation of these measures to the most directly comparable GAAP financial measures.






Financial Summary and Key Metrics
(Unaudited)
(In Thousands, Except Share Data and %)
 
 
2019
 
2018
 
 
Third Quarter
 
Second Quarter
 
First Quarter
 
Fourth Quarter
 
Third Quarter
Statement of Income Data
 
 
 
 
 
 
 
 
 
 
Total interest income
 
$
73,242

 
$
71,719

 
$
65,933

 
$
63,068

 
$
62,612

Total interest expense
 
14,937

 
14,696

 
12,917

 
11,701

 
9,857

Net interest income
 
58,305

 
57,023

 
53,016

 
51,367

 
52,755

Provision for loan losses
 
1,831

 
881

 
1,391

 
2,200

 
1,818

Total noninterest income
 
38,145

 
32,979

 
29,039

 
27,249

 
34,355

Total noninterest expense
 
62,935

 
64,119

 
55,101

 
53,736

 
57,213

Net income before income taxes
 
31,684

 
25,002

 
25,563

 
22,680

 
28,079

Income tax expense
 
7,718

 
6,314

 
5,975

 
5,640

 
6,702

Net income
 
$
23,966

 
$
18,688

 
$
19,588

 
$
17,040

 
$
21,377

Net interest income (tax—equivalent basis)
 
$
58,769

 
$
57,488

 
$
53,461

 
$
51,799

 
$
53,161

Net income, adjusted*
 
$
24,267

 
$
22,098

 
$
20,826

 
$
17,336

 
$
21,377

Per Common Share
 
 
 
 
 
 
 
 
 
 
Diluted net income
 
$
0.76

 
$
0.59

 
$
0.62

 
$
0.54

 
$
0.68

Diluted net income, adjusted*
 
0.77

 
0.70

 
0.66

 
0.55

 
0.68

Book value
 
24.08

 
23.29

 
22.51

 
21.87

 
21.12

Tangible book value*
 
18.03

 
17.18

 
17.73

 
17.02

 
16.25

Weighted average number of shares outstanding- fully diluted
 
31,425,573

 
31,378,018

 
31,349,198

 
31,344,949

 
31,339,628

Period-end number of shares
 
30,927,664

 
30,865,636

 
30,852,665

 
30,724,532

 
30,715,792

Selected Balance Sheet Data
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
242,997

 
$
164,336

 
$
195,414

 
$
125,356

 
$
181,630

Loans held for investment (HFI)
 
4,345,344

 
4,289,516

 
3,786,791

 
3,667,511

 
3,538,531

Allowance for loan losses
 
(31,464
)
 
(30,138
)
 
(29,814
)
 
(28,932
)
 
(27,608
)
Loans held for sale
 
305,493

 
294,699

 
248,054

 
278,815

 
323,486

Investment securities, at fair value
 
671,781

 
678,457

 
670,835

 
658,805

 
609,568

Other real estate owned, net
 
16,076

 
15,521

 
12,828

 
12,643

 
13,587

Total assets
 
6,088,895

 
5,940,402

 
5,335,156

 
5,136,764

 
5,058,167

Customer deposits
 
4,896,327

 
4,812,962

 
4,242,349

 
4,068,610

 
4,017,391

Brokered and internet time deposits
 
25,436

 
29,864

 
60,842

 
103,107

 
112,082

Total deposits
 
4,921,763

 
4,842,826

 
4,303,191

 
4,171,717

 
4,129,473

Borrowings
 
307,129

 
257,299

 
229,178

 
227,776

 
210,968

Total shareholders' equity
 
744,835

 
718,759

 
694,577

 
671,857

 
648,731

Selected Ratios
 
 
 
 
 
 
 
 
 
 
Return on average:
 
 
 
 
 
 
 
 
 
 
Assets
 
1.59
%
 
1.30
%
 
1.54
%
 
1.35
%
 
1.72
%
Shareholders' equity
 
13.0
%
 
10.6
%
 
11.6
%
 
10.3
%
 
13.3
%
Tangible common equity*
 
17.5
%
 
14.4
%
 
14.8
%
 
13.3
%
 
17.4
%
Average shareholders' equity to average assets
 
12.2
%
 
12.3
%
 
13.2
%
 
13.2
%
 
12.9
%
Net interest margin (NIM) (tax-equivalent basis)
 
4.28
%
 
4.39
%
 
4.61
%
 
4.50
%
 
4.71
%
Efficiency ratio (GAAP)
 
65.3
%
 
71.2
%
 
67.2
%
 
68.4
%
 
65.7
%
Core efficiency ratio (tax-equivalent basis)*
 
64.5
%
 
65.9
%
 
64.9
%
 
67.5
%
 
65.7
%
Loans HFI to deposit ratio
 
88.3
%
 
88.6
%
 
88.0
%
 
87.9
%
 
85.7
%
Total loans to deposit ratio
 
94.5
%
 
94.7
%
 
93.8
%
 
94.6
%
 
93.5
%
Yield on interest-earning assets
 
5.37
%
 
5.52
%
 
5.73
%
 
5.52
%
 
5.58
%
Cost of interest-bearing liabilities
 
1.50
%
 
1.54
%
 
1.52
%
 
1.40
%
 
1.20
%
Cost of total deposits
 
1.11
%
 
1.14
%
 
1.14
%
 
1.03
%
 
0.80
%
Credit Quality Ratios
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses as a percentage of loans HFI
 
0.72
%
 
0.70
%
 
0.79
%
 
0.79
%
 
0.78
%
Net charge-off's as a percentage of average loans HFI
 
0.05
%
 
0.05
%
 
0.06
%
 
0.06
%
 
0.06
%
Nonperforming loans HFI as a percentage of total loans HFI
 
0.47
%
 
0.43
%
 
0.41
%
 
0.46
%
 
0.30
%
Nonperforming assets as a percentage of total assets
 
0.62
%
 
0.59
%
 
0.57
%
 
0.61
%
 
0.51
%
Preliminary capital ratios (Consolidated)
 
 
 
 
 
 
 
 
 
 
Shareholders' equity to assets
 
12.2
%
 
12.1
%
 
13.0
%
 
13.1
%
 
12.8
%
Tangible common equity to tangible assets*
 
9.45
%
 
9.22
%
 
10.5
%
 
10.5
%
 
10.2
%
Tier 1 capital (to average assets)
 
10.1
%
 
10.0
%
 
11.5
%
 
11.4
%
 
11.3
%
Tier 1 capital (to risk-weighted assets)
 
11.3
%
 
11.0
%
 
12.7
%
 
12.4
%
 
12.2
%
Total capital (to risk-weighted assets)
 
12.0
%
 
11.6
%
 
13.4
%
 
13.0
%
 
12.8
%
Common Equity Tier 1 (to risk-weighted assets) (CET1)
 
10.8
%
 
10.4
%
 
12.0
%
 
11.7
%
 
11.5
%
*These measures are considered non-GAAP financial measures. See "GAAP Reconciliation and Use of Non-GAAP Financial Measures" and the corresponding financial tables below for reconciliations of these Non-GAAP measures. Investors are encouraged to refer to the discussion of non-GAAP measures included in the corresponding earnings release.

FB Financial Corporation
 
4




Consolidated Statements of Income
(Unaudited)
(In Thousands, Except Share Data and %)
 
 
 
 
 
 
 
 
 
 
 
 
Q3 2019
 
Q3 2019
 
 
 
 
 
 
 
 
 
 
 
 
vs.
 
vs.
 
 
2019
 
2018
 
Q2 2019
 
Q3 2018
 
 
Third Quarter
 
Second Quarter
 
First Quarter
 
Fourth Quarter
 
Third Quarter
 
Percent variance
 
Percent variance
Interest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
67,639

 
$
66,276

 
$
60,448

 
$
57,875

 
$
57,904

 
2.06
 %
 
16.8
 %
Interest on securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
3,137
 
3,548
 
3,569
 
3,260

 
3,151

 
(11.6
)%
 
(0.44
)%
Tax-exempt
 
1,174
 
1,160
 
1,144
 
1,110

 
1,031

 
1.21
 %
 
13.9
 %
Other
 
1,292
 
735
 
772
 
823

 
526

 
75.8
 %
 
145.6
 %
Total interest income
 
73,242
 
71,719
 
65,933
 
63,068

 
62,612

 
2.12
 %
 
17.0
 %
Interest expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits
 
13,522
 
13,488
 
11,855
 
10,703

 
7,864

 
0.25
 %
 
71.9
 %
Borrowings
 
1,415
 
1,208
 
1,062
 
998

 
1,993

 
17.1
 %
 
(29.0
)%
Total interest expense
 
14,937
 
14,696
 
12,917
 
11,701

 
9,857

 
1.64
 %
 
51.5
 %
Net interest income
 
58,305
 
57,023
 
53,016
 
51,367

 
52,755

 
2.25
 %
 
10.5
 %
Provision for loan losses
 
1,831
 
881
 
1,391
 
2,200

 
1,818

 
107.8
 %
 
0.72
 %
Net interest income after
provision for loan losses
 
56,474
 
56,142
 
51,625
 
49,167

 
50,937

 
0.59
 %
 
10.9
 %
Noninterest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage banking income
 
29,193
 
24,526
 
21,021
 
18,997

 
26,649

 
19.0
 %
 
9.55
 %
Service charges on deposit accounts
 
2,416
 
2,327
 
2,079
 
2,286

 
2,208

 
3.82
 %
 
9.42
 %
ATM and interchange fees
 
3,188
 
3,002
 
2,656
 
2,660

 
2,411

 
6.20
 %
 
32.2
 %
Investment services and trust income
 
1,336
 
1,287
 
1,295
 
1,384

 
1,411

 
3.81
 %
 
(5.32
)%
(Loss) gain from securities, net
 
(20)
 
52
 
43
 

 
(27
)
 
(138.5
)%
 
(25.9
)%
(Loss) gain on sales or write-downs of
other real estate owned
 
(126)
 
277
 
(39)
 
(56
)
 
120

 
(145.5
)%
 
(205.0
)%
Gain (loss) from other assets
 
44
 
(183)
 
191
 
89

 
326

 
(124.0
)%
 
(86.5
)%
Other income
 
2,114
 
1,691
 
1,793
 
1,889

 
1,257

 
25.0
 %
 
68.2
 %
Total noninterest income
 
38,145
 
32,979
 
29,039
 
27,249

 
34,355

 
15.7
 %
 
11.0
 %
Total revenue
 
96,450
 
90,002
 
82,055
 
78,616

 
87,110

 
7.16
 %
 
10.7
 %
Noninterest expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Salaries, commissions and employee benefits
 
40,880
 
37,918
 
33,697
 
33,286

 
35,213

 
7.81
 %
 
16.1
 %
Occupancy and equipment expense
 
4,058
 
4,319
 
3,730
 
3,493

 
3,514

 
(6.04
)%
 
15.5
 %
Legal and professional fees
 
1,993
 
1,694
 
1,725
 
1,978

 
1,917

 
17.7
 %
 
3.96
 %
Data processing
 
2,816
 
2,643
 
2,384
 
2,365

 
2,562

 
6.55
 %
 
9.91
 %
Merger expense
 
295
 
3,783
 
621
 
401

 

 
(92.2
)%
 
100.0
 %
Amortization of core deposits and other
intangibles
 
1,197
 
1,254
 
729
 
753

 
777

 
(4.55
)%
 
54.1
 %
Regulatory fees and deposit insurance
assessments
 
544
 
634
 
592
 
684

 
738

 
(14.2
)%
 
(26.3
)%
Software license and maintenance fees
 
625
 
622
 
472
 
489

 
622

 
0.48
 %
 
0.48
 %
Advertising
 
1,895
 
2,434
 
2,737
 
2,639

 
3,810

 
(22.1
)%
 
(50.3
)%
Mortgage restructuring expense
 
112
 
829
 
1,054