[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited consolidated financial statements, management's discussion and analysis, and disclosures on market risk and internal controls [Glossary Of Abbreviations And Acronyms](index=3&type=section&id=Glossary%20Of%20Abbreviations%20And%20Acronyms) This section provides a glossary of abbreviations and acronyms used throughout the Quarterly Report on Form 10-Q to aid reader comprehension - The glossary defines common acronyms and abbreviations used in the report, such as **ACL** (Allowance for credit losses), **AFS** (Available-for-sale), **CECL** (Current expected credit losses), **FHLB** (Federal Home Loan Bank), **NIM** (Net interest margin), and **ROAA** (Return on average assets)[10](index=10&type=chunk)[11](index=11&type=chunk) [Item 1. Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements of FB Financial Corporation for the periods ended June 30, 2025, and December 31, 2024 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20(Unaudited)%20and%20December%2031%2C%202024) The balance sheets detail the company's assets, liabilities, and shareholders' equity as of June 30, 2025, and December 31, 2024 **Consolidated Balance Sheets (Amounts in thousands)** | Item | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $1,165,729 | $1,042,488 | | Available-for-sale debt securities | $1,337,565 | $1,538,008 | | Loans held for investment, net | $9,725,334 | $9,450,442 | | Total assets | $13,354,238 | $13,157,482 | | **LIABILITIES** | | | | Total deposits | $11,403,470 | $11,210,434 | | Total liabilities | $11,743,015 | $11,589,851 | | **SHAREHOLDERS' EQUITY** | | | | Total equity | $1,611,223 | $1,567,631 | - **Total assets increased by $196.76 million** from December 31, 2024, to June 30, 2025, primarily driven by an increase in net loans held for investment and cash and cash equivalents, partially offset by a decrease in available-for-sale debt securities[12](index=12&type=chunk) - **Total deposits increased by $193.04 million**, and total shareholders' equity increased by $43.59 million during the same period[12](index=12&type=chunk) [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income%20(Unaudited)%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) The income statements present the company's revenues, expenses, and net income for the three and six months ended June 30, 2025 and 2024 **Consolidated Statements of Income (Amounts in thousands, except per share amounts)** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total interest income | $182,084 | $177,413 | $361,790 | $353,541 | | Total interest expense | $70,669 | $74,798 | $142,734 | $151,436 | | Net interest income | $111,415 | $102,615 | $219,056 | $202,105 | | Net interest income after provision for credit losses | $106,078 | $100,391 | $211,427 | $199,099 | | Total noninterest (loss) income | $(34,552) | $25,608 | $(11,520) | $33,570 | | Total noninterest expense | $81,261 | $75,093 | $160,810 | $147,513 | | (Loss) income before income taxes | $(9,735) | $50,906 | $39,097 | $85,156 | | Net income applicable to FB Financial Corporation | $2,909 | $39,979 | $42,270 | $67,929 | | Basic earnings per common share | $0.06 | $0.85 | $0.91 | $1.45 | | Diluted earnings per common share | $0.06 | $0.85 | $0.91 | $1.45 | - **Net income applicable to FB Financial Corporation decreased significantly** for the three months ended June 30, 2025, to **$2.91 million from $39.98 million** in the prior year, primarily due to a **$60.55 million net loss from investment securities**[13](index=13&type=chunk) - For the six months ended June 30, 2025, **net income decreased to $42.27 million from $67.93 million** in the prior year, also largely impacted by the net loss from investment securities[13](index=13&type=chunk) [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) These statements report net income and other comprehensive income, including unrealized gains and losses on securities **Consolidated Statements of Comprehensive Income (Amounts in thousands)** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $2,917 | $39,987 | $42,278 | $67,937 | | Total other comprehensive income, net of tax | $47,942 | $710 | $57,673 | $2,951 | | Comprehensive income applicable to FB Financial Corporation | $50,851 | $40,689 | $99,943 | $70,880 | - **Total other comprehensive income, net of tax, significantly increased to $47.94 million** for the three months ended June 30, 2025, from $710 thousand in the prior year, primarily due to a reclassification adjustment for loss on securities included in net income[15](index=15&type=chunk) - **Comprehensive income applicable to FB Financial Corporation increased to $50.85 million** for the three months ended June 30, 2025, compared to $40.69 million in the prior year, despite lower net income, due to the substantial other comprehensive income[15](index=15&type=chunk) [Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity%20(Unaudited)%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) These statements detail the changes in shareholders' equity resulting from net income, dividends, stock transactions, and other comprehensive income **Consolidated Statements of Changes in Shareholders' Equity (Amounts in thousands)** | Item | Balance at March 31, 2025 | Balance at June 30, 2025 | | :--- | :--- | :--- | | Common stock | $46,515 | $45,808 | | Additional paid-in capital | $854,715 | $822,548 | | Retained earnings | $792,685 | $786,785 | | Accumulated other comprehensive loss, net | $(91,953) | $(44,011) | | Total common shareholders' equity | $1,601,962 | $1,611,130 | | Item | Balance at December 31, 2024 | Balance at June 30, 2025 | | :--- | :--- | :--- | | Common stock | $46,663 | $45,808 | | Additional paid-in capital | $860,266 | $822,548 | | Retained earnings | $762,293 | $786,785 | | Accumulated other comprehensive loss, net | $(101,684) | $(44,011) | | Total common shareholders' equity | $1,567,538 | $1,611,130 | - **Total common shareholders' equity increased from $1.57 billion** at December 31, 2024, to **$1.61 billion** at June 30, 2025, driven by net income and a significant reduction in accumulated other comprehensive loss, net[18](index=18&type=chunk) - **Share repurchases amounted to $44.15 million** for the six months ended June 30, 2025, reducing common stock and additional paid-in capital[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) These statements report the company's cash inflows and outflows from operating, investing, and financing activities **Consolidated Statements of Cash Flows (Amounts in thousands)** | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $55,324 | $66,891 | | Net cash (used in) provided by investing activities | $(58,802) | $69,882 | | Net cash provided by (used in) financing activities | $126,719 | $(146,803) | | Net change in cash and cash equivalents | $123,241 | $(10,030) | | Cash and cash equivalents at end of the period | $1,165,729 | $800,902 | - **Net cash provided by financing activities significantly increased to $126.72 million** for the six months ended June 30, 2025, compared to a net cash used of $146.80 million in the prior year, primarily due to a net increase in deposits[20](index=20&type=chunk) - **Cash and cash equivalents at the end of the period increased to $1.17 billion** as of June 30, 2025, from $800.90 million in the prior year, reflecting a positive net change in cash and cash equivalents[20](index=20&type=chunk) [Condensed Notes to Consolidated Financial Statements](index=11&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes provide detailed disclosures and explanations of the accounting policies and financial data presented in the consolidated statements [Note (1)—Basis of presentation](index=11&type=section&id=Note%20(1)%E2%80%94Basis%20of%20presentation) This note outlines the basis for preparing the unaudited consolidated financial statements and details recent accounting policy modifications - FB Financial Corporation operates primarily through its wholly-owned subsidiary, FirstBank, which had **78 full-service branches** across Tennessee, Alabama, Kentucky, and Georgia as of June 30, 2025[23](index=23&type=chunk) - The Company modified its accounting policy for estimating expected credit losses, transitioning from a lifetime loss rate methodology to a **discounted cash flow estimation technique** for most loan segments, effective June 30, 2025[30](index=30&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - The adoption of new accounting standards, ASU 2023-07 (Segment Reporting) and ASU 2023-08 (Crypto Assets), **did not have a material impact** on the Company's consolidated financial statements[55](index=55&type=chunk)[56](index=56&type=chunk) - On July 1, 2025, the Company completed the acquisition of Southern States Bancshares Inc in an all-stock transaction valued at **$368.36 million**, adding **$2.87 billion in total assets**[59](index=59&type=chunk)[60](index=60&type=chunk) [Note (2)—Investment securities](index=18&type=section&id=Note%20(2)%E2%80%94Investment%20securities) This note details the Company's investment securities portfolio, primarily available-for-sale (AFS) debt securities **AFS Debt Securities (Amounts in thousands)** | Item | June 30, 2025 (Fair Value) | December 31, 2024 (Fair Value) | | :--- | :--- | :--- | | U.S. government agency securities | $642,264 | $563,007 | | Mortgage-backed securities - residential | $541,343 | $810,999 | | Municipal securities | $144,228 | $147,857 | | Total AFS debt securities | $1,337,565 | $1,538,008 | | Gross unrealized losses (June 30, 2025) | $(64,050) | | | Gross unrealized losses (December 31, 2024) | | $(141,974) | - The fair value of AFS debt securities **decreased by $200.44 million** from December 31, 2024, to June 30, 2025, primarily due to sales of securities[61](index=61&type=chunk) - **Gross unrealized losses on AFS debt securities decreased from $141.97 million** at December 31, 2024, to **$64.05 million** at June 30, 2025, with no allowance for credit losses recognized[61](index=61&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) **Sales and Other Dispositions of AFS Debt Securities (Amounts in thousands)** | Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | | Proceeds from sales | $266,454 | $266,454 | $207,882 | | Gross realized losses | $60,637 | $60,637 | $16,303 | [Note (3)—Loans and allowance for credit losses on loans HFI](index=22&type=section&id=Note%20(3)%E2%80%94Loans%20and%20allowance%20for%20credit%20losses%20on%20loans%20HFI) This note provides a detailed breakdown of the Company's loan portfolio, credit quality, and the allowance for credit losses (ACL) **Loans Held for Investment (HFI) by Class (Amounts in thousands)** | Loan Class | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Commercial and industrial | $1,788,911 | $1,691,213 | | Construction | $1,022,678 | $1,087,732 | | 1-to-4 family mortgage | $1,660,696 | $1,616,754 | | Multi-family mortgage | $587,254 | $653,769 | | Commercial real estate: Non-owner occupied | $2,198,689 | $2,099,129 | | Consumer and other | $604,498 | $493,744 | | Gross loans | $9,874,282 | $9,602,384 | | Less: Allowance for credit losses on loans HFI | $(148,948) | $(151,942) | | Net loans held for investment | $9,725,334 | $9,450,442 | - **Gross loans HFI increased by $271.90 million** from December 31, 2024, to June 30, 2025, with notable growth in commercial and industrial, 1-to-4 family mortgage, and consumer loans[70](index=70&type=chunk) - The **allowance for credit losses on loans HFI decreased by $2.99 million to $148.95 million** as of June 30, 2025, primarily due to a change in the CECL loss estimation methodology[98](index=98&type=chunk)[99](index=99&type=chunk) **Nonaccrual Loans by Class (Amounts in thousands)** | Loan Class | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Commercial and industrial | $2,692 | $9,661 | | Construction | $28,872 | $10,915 | | 1-to-4 family mortgage | $8,379 | $12,625 | | Multi-family mortgage | $9,582 | $21 | | Commercial real estate: Owner occupied | $7,861 | $9,551 | | Total nonaccrual loans | $73,950 | $59,358 | [Note (4)—Other real estate owned](index=35&type=section&id=Note%20(4)%E2%80%94Other%20real%20estate%20owned) This note summarizes the activity and balance of other real estate owned (OREO), which includes properties acquired through foreclosure **Other Real Estate Owned (Amounts in thousands)** | Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | | Balance at beginning of period | $3,326 | $4,409 | $3,192 | | Transfers from loans | $1,230 | $3,297 | $2,400 | | Proceeds from sale of other real estate owned | $(1,744) | $(4,412) | $(1,434) | | Balance at end of period | $2,998 | $2,998 | $4,173 | - The balance of other real estate owned **decreased to $3.00 million** at June 30, 2025, from $4.41 million at the beginning of the six-month period[101](index=101&type=chunk) - Foreclosed residential real estate properties included in OREO totaled **$1.56 million** as of June 30, 2025, a decrease from $2.88 million at December 31, 2024[101](index=101&type=chunk) [Note (5)—Leases](index=35&type=section&id=Note%20(5)%E2%80%94Leases) This note provides information on the Company's operating and finance leases, detailing assets, liabilities, and lease expenses **Lease Information (Amounts in thousands)** | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Operating lease right-of-use assets | $47,764 | $47,963 | | Operating lease liabilities | $59,289 | $60,024 | | Weighted average remaining lease term (operating) | 10.7 years | 11.0 years | | Weighted average discount rate (operating) | 3.54% | 3.47% | **Total Lease Cost (Amounts in thousands)** | Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | | Total lease cost | $2,312 | $4,596 | $4,330 | - The Company had **47 operating leases and 1 finance lease** as of June 30, 2025, for various locations, with total lease costs increasing slightly for the six months ended June 30, 2025, compared to the prior year[103](index=103&type=chunk)[105](index=105&type=chunk) [Note (6)—Mortgage servicing rights](index=37&type=section&id=Note%20(6)%E2%80%94Mortgage%20servicing%20rights) This note details the changes in the Company's mortgage servicing rights (MSRs) and related servicing income and expenses **Mortgage Servicing Rights (MSRs) (Amounts in thousands)** | Item | June 30, 2025 (Carrying Value) | June 30, 2024 (Carrying Value) | | :--- | :--- | :--- | | Carrying value at beginning of period (3 months) | $156,379 | $165,674 | | Carrying value at end of period (3 months) | $153,464 | $164,505 | | Carrying value at beginning of period (6 months) | $162,038 | $164,249 | | Carrying value at end of period (6 months) | $153,464 | $164,505 | **Net Servicing Income (Amounts in thousands)** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net servicing income | $862 | $1,047 | $3,148 | $3,406 | - The carrying value of MSRs **decreased to $153.46 million** at June 30, 2025, from $162.04 million at the beginning of the six-month period[107](index=107&type=chunk) - A **10% increase in prepayment speed** is estimated to decrease MSR fair value by **$4.27 million**, while a **100 basis point increase in discount rate** is estimated to decrease fair value by **$7.20 million** as of June 30, 2025[107](index=107&type=chunk) [Note (7)—Income taxes](index=38&type=section&id=Note%20(7)%E2%80%94Income%20taxes) This note reconciles the Company's income tax benefit/expense, highlighting the impact of non-recurring items **Income Tax (Benefit) Expense (Amounts in thousands)** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Income tax (benefit) expense, as reported | $(12,652) | $10,919 | $(3,181) | $17,219 | | Federal taxes calculated at statutory rate (21.0%) | $(2,045) | $10,691 | $8,210 | $17,883 | | Expiration of the statute of limitations | $(8,713) | — | $(8,713) | — | | Interest on refunds | $(1,645) | — | $(2,591) | — | - For the three and six months ended June 30, 2025, the Company recognized a significant income tax benefit of **$12.65 million and $3.18 million**, respectively, primarily due to a **one-time tax benefit of $10.71 million** from the expiration of the statute of limitations[109](index=109&type=chunk) [Note (8)—Commitments and contingencies](index=38&type=section&id=Note%20(8)%E2%80%94Commitments%20and%20contingencies) This note details the Company's off-balance sheet financial instruments, including commitments to extend credit and letters of credit **Commitments to Extend Credit and Letters of Credit (Amounts in thousands)** | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Commitments to extend credit, excluding interest rate lock commitments | $2,861,685 | $2,770,105 | | Letters of credit | $62,260 | $69,855 | | Balance at end of period | $2,923,945 | $2,839,960 | - **Total unfunded loan commitments increased to $2.92 billion** at June 30, 2025, from $2.84 billion at December 31, 2024[112](index=112&type=chunk) **Allowance for Credit Losses on Unfunded Loan Commitments (Amounts in thousands)** | Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | | Balance at beginning of period | $6,493 | $6,107 | $8,770 | | Impact of change in accounting estimate for current expected credit losses | $6,452 | $6,452 | — | | (Reversal of) provision for credit losses on unfunded commitments | $(13) | $373 | $(2,786) | | Balance at end of period | $12,932 | $12,932 | $5,984 | - The allowance for credit losses on unfunded loan commitments **increased to $12.93 million** at June 30, 2025, from $6.11 million at the beginning of the six-month period, largely due to a **$6.45 million impact from the change in CECL estimation methodology**[116](index=116&type=chunk) [Note (9)—Derivatives](index=40&type=section&id=Note%20(9)%E2%80%94Derivatives) This note describes the Company's use of derivative financial instruments for interest rate risk management and to facilitate customer needs - The Company uses derivative instruments, including interest rate swaps, forward commitments, and futures contracts, for interest rate risk management, with **total notional amounts of $1.15 billion** at June 30, 2025[120](index=120&type=chunk)[134](index=134&type=chunk) **Non-Designated Derivative Financial Instruments (Amounts in thousands)** | Item | June 30, 2025 (Notional Amount) | June 30, 2025 (Asset Fair Value) | June 30, 2025 (Liability Fair Value) | | :--- | :--- | :--- | :--- | | Interest rate contracts | $598,390 | $23,135 | $23,194 | | Forward commitments | $236,000 | — | $638 | | Interest rate-lock commitments | $127,004 | $2,322 | — | | Futures contracts | $185,000 | $2,109 | — | | Total | $1,146,394 | $27,566 | $23,832 | **Gains (Losses) from Non-Designated Derivatives (Amounts in thousands)** | Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | | Total included in mortgage banking income | $(40) | $3,483 | $(3,789) | [Note (10)—Fair value of financial instruments](index=45&type=section&id=Note%20(10)%E2%80%94Fair%20value%20of%20financial%20instruments) This note defines fair value measurement and categorizes financial assets and liabilities into a three-level hierarchy - The fair value hierarchy prioritizes inputs: **Level 1** (quoted prices in active markets), **Level 2** (significant other observable inputs), and **Level 3** (significant unobservable inputs)[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) **Financial Assets Measured at Fair Value on a Recurring Basis (Amounts in thousands)** | Item | June 30, 2025 (Total Fair Value) | December 31, 2024 (Total Fair Value) | | :--- | :--- | :--- | | AFS debt securities | $1,337,565 | $1,538,008 | | Loans held for sale, at fair value | $123,235 | $95,403 | | Mortgage servicing rights (Level 3) | $153,464 | $162,038 | | Derivatives | $27,566 | $29,951 | **Financial Assets Measured at Fair Value on a Nonrecurring Basis (Amounts in thousands)** | Item | June 30, 2025 (Total Fair Value) | December 31, 2024 (Total Fair Value) | | :--- | :--- | :--- | | Other real estate owned (Level 3) | $1,602 | $2,873 | | Collateral-dependent net loans held for investment (Level 3) | $25,569 | $30,512 | - Net losses of **$372 thousand** and net gains of **$1.83 million** resulted from fair value changes of mortgage loans held for sale for the three and six months ended June 30, 2025, respectively[148](index=148&type=chunk) [Note (11)—Segment reporting](index=53&type=section&id=Note%20(11)%E2%80%94Segment%20reporting) This note identifies the Company's two reportable segments, Banking and Mortgage, and provides selected financial information for each - The Company operates through two reportable segments: **Banking** and **Mortgage**[152](index=152&type=chunk) - The chief operating decision maker uses **income before income taxes** to assess segment performance and allocate resources[153](index=153&type=chunk) **Segment Income Before Income Taxes (Amounts in thousands)** | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Banking | $(6,723) | $50,060 | $40,598 | $82,696 | | Mortgage | $(3,012) | $846 | $(1,501) | $2,460 | | Consolidated (Loss) Income before income taxes | $(9,735) | $50,906 | $39,097 | $85,156 | - The **Banking segment reported a loss before taxes of $6.72 million** for the three months ended June 30, 2025, compared to income of $50.06 million in the prior year, primarily due to a **$60.5 million net loss on investment securities**[156](index=156&type=chunk)[222](index=222&type=chunk) [Note (12)—Minimum capital requirements](index=57&type=section&id=Note%20(12)%E2%80%94Minimum%20capital%20requirements) This note outlines the regulatory capital requirements for the Company and FirstBank and confirms compliance - The Company and FirstBank are subject to regulatory capital requirements and **met all capital adequacy requirements** as of June 30, 2025, and December 31, 2024[165](index=165&type=chunk)[166](index=166&type=chunk) **Capital Ratios (June 30, 2025)** | Capital Ratio | FB Financial Corporation (Actual Ratio) | FirstBank (Actual Ratio) | Minimum Requirement for Capital Adequacy with Capital Buffer | | :--- | :--- | :--- | :--- | | Total Capital (to risk-weighted assets) | 14.7% | 14.2% | 10.5% | | Tier 1 Capital (to risk-weighted assets) | 12.6% | 12.1% | 8.5% | | Common Equity Tier 1 Capital (to risk-weighted assets) | 12.3% | 12.1% | 7.0% | | Tier 1 Capital (to average assets) | 11.3% | 10.8% | 4.0% | - All actual capital ratios for both FB Financial Corporation and FirstBank were **well above the minimum regulatory requirements**, indicating a strong capital position[169](index=169&type=chunk) [Note (13)—Stock-based compensation](index=59&type=section&id=Note%20(13)%E2%80%94Stock-based%20compensation) This note details the Company's stock-based compensation plans, including RSUs, PSUs, and the ESPP **Restricted Stock Units (RSUs) Activity (Six Months Ended June 30, 2025)** | Item | Restricted Stock Units Outstanding | | :--- | :--- | | Balance at beginning of period (unvested) | 345,436 | | Granted | 148,306 | | Vested | (156,509) | | Forfeited | (3,335) | | Balance at end of period (unvested) | 333,898 | - Total unrecognized compensation cost related to unvested RSUs was **$9.39 million** as of June 30, 2025, expected to be recognized over a weighted-average period of **1.99 years**[174](index=174&type=chunk) **Performance-Based Restricted Stock Units (PSUs) Activity (Six Months Ended June 30, 2025)** | Item | Performance Stock Units Outstanding | | :--- | :--- | | Balance at beginning of period (unvested) | 223,393 | | Granted | 75,329 | | Vested | (50,269) | | Balance at end of period (unvested) | 247,858 | - Compensation cost for PSUs was **$3.22 million** for the six months ended June 30, 2025, with a maximum unrecognized compensation cost at 200% payout of **$14.81 million**[178](index=178&type=chunk) [Note (14)—Related party transactions](index=61&type=section&id=Note%20(14)%E2%80%94Related%20party%20transactions) This note discloses transactions with related parties, including loans to and deposits from management, directors, and significant shareholders **Loans to Related Parties (Amounts in thousands)** | Item | Amount | | :--- | :--- | | Loans outstanding at January 1, 2025 | $31,406 | | New loans and advances | $6,166 | | Repayments | $(10,939) | | Loans outstanding at June 30, 2025 | $26,633 | - **Loans outstanding to related parties decreased to $26.63 million** at June 30, 2025, from $31.41 million at January 1, 2025[180](index=180&type=chunk) - The Bank held **$254.88 million in deposits from related parties** as of June 30, 2025, a decrease from $282.96 million at December 31, 2024[181](index=181&type=chunk) - The Company has an equity investment in a privately held entity and a master loan purchase agreement to purchase up to **$250 million** in manufactured housing loans; as of June 30, 2025, the amortized cost of these loans was **$112.31 million**[184](index=184&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation](index=64&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation) This section provides management's perspective on the Company's financial condition and results of operations for the periods ended June 30, 2025 [Forward-looking statements](index=64&type=section&id=Forward-looking%20statements) This section outlines the nature of forward-looking statements in the report and the risks and uncertainties that could affect actual results - The report contains forward-looking statements regarding future plans, results, strategies, and expectations, including those related to the Southern States Bancshares, Inc merger[186](index=186&type=chunk) - These statements are subject to various risks and uncertainties, such as economic conditions, interest rate fluctuations, and integration risks from mergers[186](index=186&type=chunk) [Critical accounting policies](index=66&type=section&id=Critical%20accounting%20policies) This section notes that financial statements are prepared under GAAP and involve estimates, with key policy updates detailed in the notes - The financial statements are prepared in accordance with GAAP, and certain financial information involves approximate measurements and estimates[189](index=189&type=chunk) - Updates to accounting policies, particularly regarding the allowance for credit losses (ACL) methodology, are detailed in Note 1 of the consolidated financial statements[189](index=189&type=chunk) [Financial highlights](index=67&type=section&id=Financial%20highlights) This section provides a summary of key financial metrics and performance indicators for the recent periods **Selected Financial Highlights (Amounts in thousands, except per share data)** | Item | June 30, 2025 | June 30, 2024 | December 31, 2024 | | :--- | :--- | :--- | :--- | | Total assets | $13,354,238 | $12,535,169 | $13,157,482 | | Total deposits | $11,403,470 | $10,468,002 | $11,210,434 | | Net income applicable to FB Financial Corporation (3 months) | $2,909 | $39,979 | | | Net income applicable to FB Financial Corporation (6 months) | $42,270 | $67,929 | | | Basic net income per share (3 months) | $0.06 | $0.85 | | | Diluted net income per share (6 months) | $0.91 | $1.45 | | | Return on average assets (3 months) | 0.09% | 1.30% | | | Net interest margin (tax-equivalent basis) (3 months) | 3.68% | 3.57% | | | Nonperforming loans HFI as a percentage of loans HFI | 0.97% | 0.79% | 0.87% | | Total risk-based capital (Company) | 14.7% | 15.1% | 15.2% | - **Net income for the three months ended June 30, 2025, significantly decreased to $2.9 million** from $40.0 million in the prior year, resulting in a lower **return on average assets of 0.09%** (vs 1.30%)[191](index=191&type=chunk) - **Net interest margin (tax-equivalent basis) improved to 3.68%** for the three months ended June 30, 2025, from 3.57% in the prior year[191](index=191&type=chunk) [GAAP reconciliation and management explanation of non-GAAP financial measures](index=69&type=section&id=GAAP%20reconciliation%20and%20management%20explanation%20of%20non-GAAP%20financial%20measures) This section presents non-GAAP financial measures used by management to evaluate performance and provides reconciliations to GAAP figures [Core efficiency ratio (tax-equivalent basis)](index=69&type=section&id=Core%20efficiency%20ratio%20(tax-equivalent%20basis)) This non-GAAP measure is used to understand ongoing operational efficiency by excluding certain non-core items - The core efficiency ratio (tax-equivalent basis) is a non-GAAP measure used by management to understand ongoing operations and enhance comparability[197](index=197&type=chunk) **Core Efficiency Ratio (Tax-Equivalent Basis)** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Core noninterest expense | $78,527 | $74,078 | $157,675 | $145,998 | | Core revenue (tax-equivalent basis) | $137,997 | $127,086 | $270,065 | $250,895 | | Core efficiency ratio (tax-equivalent basis) | 56.9% | 58.3% | 58.4% | 58.2% | - The **core efficiency ratio (tax-equivalent basis)** for the three months ended June 30, 2025, was **56.9%**, an improvement from 58.3% in the prior year, indicating better operational efficiency when excluding non-core items[199](index=199&type=chunk) [Tangible book value per common share and tangible common equity to tangible assets](index=71&type=section&id=Tangible%20book%20value%20per%20common%20share%20and%20tangible%20common%20equity%20to%20tangible%20assets) These non-GAAP measures exclude goodwill and other intangibles to provide a clearer view of capital adequacy - Tangible book value per common share and tangible common equity to tangible assets are non-GAAP measures that exclude goodwill and other intangibles[200](index=200&type=chunk) **Tangible Capital Measures (Amounts in thousands, except per share data)** | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Tangible assets | $13,107,202 | $12,909,159 | | Tangible common equity | $1,364,094 | $1,319,215 | | Tangible book value per common share | $29.78 | $28.27 | | Tangible common equity to tangible assets | 10.4% | 10.2% | - **Tangible book value per common share increased to $29.78** at June 30, 2025, from $28.27 at December 31, 2024, reflecting an improvement in tangible equity per share[202](index=202&type=chunk) [Return on average tangible common equity](index=72&type=section&id=Return%20on%20average%20tangible%20common%20equity) This non-GAAP measure depicts profitability without the impact of intangible assets by excluding them from average shareholders' equity - Return on average tangible common equity is a non-GAAP measure that excludes goodwill and other intangibles from average shareholders' equity[203](index=203&type=chunk) **Return on Average Tangible Common Equity** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Average tangible common equity | $1,335,747 | $1,223,195 | $1,335,859 | $1,216,534 | | Net income applicable to FB Financial Corporation | $2,909 | $39,979 | $42,270 | $67,929 | | Return on average tangible common equity | 0.87% | 13.1% | 6.38% | 11.2% | - **Return on average tangible common equity decreased significantly to 0.87%** for the three months ended June 30, 2025, from 13.1% in the prior year, aligning with the overall decline in net income[204](index=204&type=chunk) [Company overview](index=72&type=section&id=Company%20overview) This section describes the Company's business, primary operations through its subsidiary FirstBank, and its two operating segments - FB Financial Corporation is a financial holding company headquartered in Nashville, Tennessee, operating primarily through its wholly-owned subsidiary, FirstBank[205](index=205&type=chunk) - FirstBank provides commercial and consumer banking services across Tennessee, Alabama, Kentucky, North Carolina, and Georgia, with **78 full-service branches** as of June 30, 2025[205](index=205&type=chunk) - The Company operates through two segments: **Banking** (revenue from loans, investments, fees) and **Mortgage** (revenue from origination fees, secondary market sales, and servicing)[207](index=207&type=chunk) [Mergers](index=74&type=section&id=Mergers) This section details the recent acquisition of Southern States Bancshares Inc, including its strategic rationale and financial impact - On July 1, 2025, the Company completed the acquisition of Southern States Bancshares Inc in an all-stock transaction, strengthening its presence in Alabama and expanding into Georgia[208](index=208&type=chunk)[209](index=209&type=chunk) - Southern States contributed approximately **$2.87 billion in total assets**, **$2.32 billion in loans**, and **$2.47 billion in deposits** at closing[209](index=209&type=chunk) - Total consideration paid was **$368.4 million**, based on the Company's closing stock price of $45.30 per share on June 30, 2025[209](index=209&type=chunk) [Overview of recent financial performance](index=74&type=section&id=Overview%20of%20recent%20financial%20performance) This section provides a comparative analysis of the company's financial performance for the three and six months ended June 30, 2025 and 2024 [Three months ended June 30, 2025 compared to three months ended June 30, 2024](index=74&type=section&id=Three%20months%20ended%20June%2030%2C%202025%20compared%20to%20three%20months%20ended%20June%2030%2C%202024) This subsection compares key financial results for the second quarter of 2025 against the same period in 2024 - **Net income decreased to $2.9 million** for Q2 2025 from $40.0 million for Q2 2024, with diluted EPS falling from $0.85 to $0.06[210](index=210&type=chunk) - **Net interest income increased to $111.4 million** (from $102.6 million), and net interest margin (tax-equivalent basis) rose to 3.68% (from 3.57%)[211](index=211&type=chunk) - **Noninterest income decreased by $60.2 million** to a loss of $34.6 million, driven by a **$60.5 million net loss on investment securities sales**[213](index=213&type=chunk) - **Noninterest expense increased to $81.3 million** (from $75.1 million), including $2.7 million in merger and integration costs[214](index=214&type=chunk) [Six months ended June 30, 2025 compared to the six months ended June 30, 2024](index=76&type=section&id=Six%20months%20ended%20June%2030%2C%202025%20compared%20to%20the%20six%20months%20ended%20June%2030%2C%202024) This subsection compares key financial results for the first half of 2025 against the same period in 2024 - **Net income decreased to $42.3 million** for H1 2025 from $67.9 million for H1 2024, with diluted EPS falling from $1.45 to $0.91[216](index=216&type=chunk) - **Net interest income increased to $219.1 million** (from $202.1 million), and net interest margin (tax-equivalent basis) rose to 3.61% (from 3.49%)[217](index=217&type=chunk) - **Noninterest income decreased by $45.1 million** to a loss of $11.5 million, primarily due to a **$60.5 million net loss on investment securities sales** (vs $16.2 million loss in prior year)[218](index=218&type=chunk) - **Noninterest expense increased to $160.8 million** (from $147.5 million), driven by higher salaries, merger costs, advertising, and other expenses[219](index=219&type=chunk) [Business segment highlights](index=76&type=section&id=Business%20segment%20highlights) This section analyzes the performance of the Company's two primary business segments, Banking and Mortgage [Banking](index=76&type=section&id=Banking) This subsection details the financial performance of the Banking segment, including net interest income and pre-tax results - The Banking segment reported a **pre-tax loss of $6.7 million** for Q2 2025, a significant decline from $50.1 million income in Q2 2024, primarily due to a **$60.5 million net loss on investment securities**[222](index=222&type=chunk) - **Net interest income for the Banking segment increased to $108.9 million** in Q2 2025 from $101.2 million in Q2 2024[222](index=222&type=chunk) - For H1 2025, the Banking segment's **pre-tax income was $40.6 million**, down from $82.7 million in H1 2024, also largely impacted by the $60.5 million net loss on investment securities[223](index=223&type=chunk) [Mortgage](index=79&type=section&id=Mortgage) This subsection details the financial performance of the Mortgage segment, including mortgage banking income and pre-tax results - The Mortgage segment reported a **pre-tax loss of $3.0 million** for Q2 2025, compared to $0.8 million income in Q2 2024[225](index=225&type=chunk) - **Mortgage banking income increased by $1.1 million to $13.0 million** in Q2 2025, driven by a $2.3 million increase in gains on sale, partially offset by negative fair value changes[225](index=225&type=chunk)[226](index=226&type=chunk) - For H1 2025, the Mortgage segment's **pre-tax loss was $1.5 million**, compared to $2.5 million income in H1 2024, with mortgage banking income increasing by $1.0 million to $25.5 million[227](index=227&type=chunk)[228](index=228&type=chunk) - **Provisions for credit losses in the Mortgage segment increased significantly** due to changes in the CECL loss estimation methodology and forecasts impacting mortgage reserves[225](index=225&type=chunk)[227](index=227&type=chunk) [Results of operations](index=80&type=section&id=Results%20of%20operations) This section provides a detailed analysis of the components of the company's operating results, including net interest income and noninterest items [Net interest income](index=80&type=section&id=Net%20interest%20income) This subsection analyzes the components of net interest income, including interest income, interest expense, and net interest margin - **Net interest income (tax-equivalent basis) increased by $9.0 million to $112.2 million** for Q2 2025, driven by a $4.9 million increase in interest income and a $4.1 million decrease in interest expense[233](index=233&type=chunk)[247](index=247&type=chunk) - **Interest income on loans HFI increased by $3.7 million to $158.0 million** in Q2 2025, primarily due to increased volume, despite a 26 basis point decrease in yield to 6.44%[235](index=235&type=chunk) - **Interest expense on interest-bearing deposits decreased by $2.9 million to $68.6 million** in Q2 2025, with the total cost of interest-bearing deposits falling to 3.10% (from 3.52%)[239](index=239&type=chunk) - For H1 2025, **net interest income (tax-equivalent basis) increased by $17.2 million to $220.7 million**, with net interest margin rising to 3.61% (from 3.49%)[248](index=248&type=chunk)[263](index=263&type=chunk) [Provision for credit losses](index=88&type=section&id=Provision%20for%20credit%20losses) This subsection discusses the provision for credit losses on loans and unfunded commitments, including the impact of the new CECL methodology - The Company recognized a **reversal of credit losses on loans HFI of $1.1 million** for Q2 2025, compared to a provision expense of $3.9 million for Q2 2024[272](index=272&type=chunk) - The Q2 2025 reversal was primarily due to a **$6.8 million reduction from the change in CECL loss estimation methodology**, partially offset by $5.7 million of provision growth[272](index=272&type=chunk) - A **provision expense for credit losses on unfunded commitments of $6.4 million** was recorded for Q2 2025, largely due to a $6.5 million impact from the CECL methodology change[273](index=273&type=chunk) - For H1 2025, the provision for credit losses on loans HFI was **$0.8 million** (vs $5.8 million in H1 2024), reflecting a $7.7 million growth in provision offset by a $6.8 million reduction from the CECL methodology change[275](index=275&type=chunk) [Noninterest income](index=91&type=section&id=Noninterest%20income) This subsection analyzes the various sources of noninterest income, such as mortgage banking, investment services, and securities gains/losses **Noninterest Income (Amounts in thousands)** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Mortgage banking income | $13,029 | $11,910 | $25,455 | $24,495 | | Investment services and trust income | $3,922 | $3,387 | $7,633 | $6,617 | | Loss from investment securities, net | $(60,549) | — | $(60,533) | $(16,213) | | Total noninterest (loss) income | $(34,552) | $25,608 | $(11,520) | $33,570 | - Total noninterest income for Q2 2025 was a **$34.6 million loss** (vs $25.6 million income in Q2 2024), primarily due to a **$60.5 million net loss from investment securities sales**[279](index=279&type=chunk) - **Mortgage banking income increased by $1.1 million to $13.0 million** in Q2 2025, driven by higher origination fees and gains on sale[280](index=280&type=chunk) - For H1 2025, total noninterest income was an **$11.5 million loss** (vs $33.6 million income in H1 2024), mainly due to a **$60.5 million net loss from investment securities sales** (vs $16.2 million loss in H1 2024)[287](index=287&type=chunk)[291](index=291&type=chunk) [Noninterest expense](index=93&type=section&id=Noninterest%20expense) This subsection breaks down noninterest expenses, including salaries, merger costs, and other operating expenses **Noninterest Expense (Amounts in thousands)** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Salaries, commissions and employee benefits | $46,631 | $46,225 | $94,982 | $90,843 | | Merger and integration costs | $2,734 | — | $3,135 | — | | Other expense | $17,790 | $15,664 | $34,542 | $30,565 | | Total noninterest expense | $81,261 | $75,093 | $160,810 | $147,513 | - **Total noninterest expense increased by $6.2 million (8.2%) to $81.3 million** in Q2 2025, driven by **$2.7 million in merger and integration costs** and a $2.1 million increase in other expenses[295](index=295&type=chunk)[301](index=301&type=chunk)[302](index=302&type=chunk) - For H1 2025, **total noninterest expense increased by $13.3 million (9.0%) to $160.8 million**, primarily due to a $4.1 million increase in salaries and benefits, $3.1 million in merger costs, and $4.0 million in other expenses[303](index=303&type=chunk)[304](index=304&type=chunk)[307](index=307&type=chunk)[308](index=308&type=chunk) [Efficiency ratio](index=94&type=section&id=Efficiency%20ratio) This subsection presents the efficiency ratio, a key measure of operational cost-effectiveness, on both a GAAP and adjusted basis - The efficiency ratio was **105.7% for Q2 2025** (vs 58.6% in Q2 2024) and **77.5% for H1 2025** (vs 62.6% in H1 2024)[310](index=310&type=chunk) - The **adjusted efficiency ratio (tax-equivalent basis) was 56.9% for Q2 2025** (vs 58.3% in Q2 2024) and **58.4% for H1 2025** (vs 58.2% in H1 2024), indicating a more stable core operational efficiency[310](index=310&type=chunk) [Income taxes](index=94&type=section&id=Income%20taxes) This subsection explains the income tax expense or benefit and the effective tax rate for the reported periods - The Company recognized an **income tax benefit of $12.7 million for Q2 2025** (vs $10.9 million expense in Q2 2024) and **$3.2 million for H1 2025** (vs $17.2 million expense in H1 2024)[311](index=311&type=chunk) - The Q2 2025 tax benefit reflects the income tax effect of a **$60.5 million loss on AFS debt securities** and a **one-time $10.7 million tax benefit** from the expiration of the statute of limitations[311](index=311&type=chunk) - The effective tax rates were **130.0% for Q2 2025** and **(8.1)% for H1 2025**, significantly impacted by these non-recurring items[311](index=311&type=chunk) [Financial condition](index=96&type=section&id=Financial%20condition) This section provides a detailed analysis of the company's balance sheet, including loans, asset quality, deposits, and liquidity [Loan portfolio](index=96&type=section&id=Loan%20portfolio) This subsection provides a detailed breakdown of the loan portfolio by type, maturity, and interest rate structure **Loan Portfolio by Type (Amounts in thousands)** | Loan Type | June 30, 2025 (Outstanding) | December 31, 2024 (Outstanding) | | :--- | :--- | :--- | | Commercial and industrial | $1,788,911 | $1,691,213 | | Construction | $1,022,678 | $1,087,732 | | 1-to-4 family mortgage | $1,660,696 | $1,616,754 | | Non-owner occupied commercial real estate | $2,198,689 | $2,099,129 | | Total loans | $9,874,282 | $9,602,384 | - **Total loans held for investment (HFI) increased to $9.87 billion** at June 30, 2025, from $9.60 billion at December 31, 2024, representing **73.9% of total assets**[314](index=314&type=chunk) - The loan portfolio is heavily concentrated in the geographic markets served, primarily Tennessee and Alabama, and is diversified across various industry classifications[316](index=316&type=chunk) **Loan Maturity and Interest Rate Composition (June 30, 2025, Amounts in thousands)** | Maturity | Fixed Interest Rate | Floating Interest Rate | Total | | :--- | :--- | :--- | :--- | | One year or less | $644,431 | $1,309,293 | $1,953,724 | | One to five years | $2,484,702 | $2,204,726 | $4,689,428 | | Five to fifteen years | $931,079 | $1,045,487 | $1,976,566 | | Over fifteen years | $921,093 | $333,471 | $1,254,564 | | Total | $4,981,305 (50.4%) | $4,892,977 (49.6%) | $9,874,282 | [Asset quality](index=104&type=section&id=Asset%20quality) This subsection analyzes asset quality, focusing on nonperforming assets and the allowance for credit losses **Nonperforming Assets (Amounts in thousands)** | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total nonperforming loans HFI | $95,912 | $83,705 | | Mortgage loans held for sale (delinquent GNMA) | $20,977 | $31,357 | | Other real estate owned | $2,998 | $4,409 | | Other repossessed assets | $3,151 | $2,444 | | Total nonperforming assets | $123,038 | $121,915 | | Nonperforming loans HFI as a percentage of total loans HFI | 0.97% | 0.87% | | Nonperforming assets as a percentage of total assets | 0.92% | 0.93% | - **Total nonperforming assets increased to $123.0 million** at June 30, 2025, from $121.9 million at December 31, 2024[332](index=332&type=chunk)[336](index=336&type=chunk) - **Nonperforming loans HFI increased by $12.2 million to $95.9 million**, primarily in construction and multi-family portfolios[333](index=333&type=chunk) **Allowance for Credit Losses (ACL) on Loans HFI (Amounts in thousands)** | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total allowance for credit losses on loans HFI | $148,948 | $151,942 | | ACL as a % of loans HFI | 1.51% | 1.58% | | ACL as a % of nonaccrual loans HFI | 201.4% | 256.0% | | ACL as a % of nonperforming loans | 155.3% | 181.5% | - The **ACL on loans HFI decreased to $148.9 million (1.51% of loans HFI)** at June 30, 2025, from $151.9 million (1.58% of loans HFI) at December 31, 2024, influenced by the change in CECL methodology[346](index=346&type=chunk) [Deposits](index=111&type=section&id=Deposits) This subsection details the composition and trends of the company's deposit base, a primary source of funding - **Total deposits increased to $11.40 billion** at June 30, 2025, from $11.21 billion at December 31, 2024[351](index=351&type=chunk) - **Noninterest-bearing deposits increased to $2.19 billion**, including a rise in mortgage escrow deposits to $114.7 million[352](index=352&type=chunk) - **Interest-bearing checking deposits decreased to $2.33 billion**, while money market and savings deposits increased by $307.1 million due to promotional campaigns[353](index=353&type=chunk) **Deposit Distribution by Type (Amounts in thousands)** | Deposit Type | June 30, 2025 (Amount) | June 30, 2025 (% of total deposits) | December 31, 2024 (Amount) | December 31, 2024 (% of total deposits) | | :--- | :--- | :--- | :--- | :--- | | Noninterest-bearing demand | $2,191,903 | 19% | $2,116,232 | 19% | | Interest-bearing checking | $2,325,551 | 20% | $2,906,425 | 26% | | Money market | $4,294,217 | 38% | $3,986,777 | 36% | | Customer time deposits | $1,721,745 | 15% | $1,380,205 | 12% | | Brokered and internet time deposits | $518,719 | 5% | $469,089 | 4% | | Total deposits | $11,403,470 | 100% | $11,210,434 | 100% | - Estimated uninsured and uncollateralized deposits were **$2.99 billion (26.2% of total deposits)** at June 30, 2025[360](index=360&type=chunk) [Other earning assets](index=114&type=section&id=Other%20earning%20assets) This subsection discusses other earning assets, primarily the available-for-sale (AFS) debt securities portfolio - **Federal funds sold increased to $298.0 million** at June 30, 2025, from $64.8 million at December 31, 2024, reflecting changes in liquidity deployment strategy[363](index=363&type=chunk) - The fair value of **AFS debt securities decreased to $1.34 billion** at June 30, 2025, from $1.54 billion at December 31, 2024, with net unrealized losses of $63.3 million[365](index=365&type=chunk) - During Q2 2025, the Company sold **$266.5 million of mortgage-backed AFS debt securities**, resulting in a **$60.5 million net loss**, with proceeds intended for debt redemption and higher-yielding loan originations[366](index=366&type=chunk) **AFS Debt Securities Portfolio (Fair Value and Yields)** | Security Type | June 30, 2025 (Fair Value) | June 30, 2025 (Weighted Average Yield) | December 31, 2024 (Fair Value) | December 31, 2024 (Weighted Average Yield) | | :--- | :--- | :--- | :--- | :--- | | U.S. government agency securities | $642,264 | 4.90% | $563,007 | 5.40% | | Municipal securities | $144,228 | 2.98% | $147,857 | 2.96% | | Mortgage-backed securities - residential and commercial | $550,095 | 3.85% | $825,856 | 3.09% | | Total AFS debt securities | $1,337,565 | 4.26% | $1,538,008 | 3.93% | [Borrowed funds](index=116&type=section&id=Borrowed%20funds) This subsection details the company's borrowed funds, including repurchase agreements, FHLB advances, and subordinated debt - **Securities sold under agreements to repurchase totaled $11.4 million** at June 30, 2025, down from $13.5 million at December 31, 2024[373](index=373&type=chunk) - The Company had **no FHLB advances outstanding** as of June 30, 2025, or December 31, 2024, despite having a borrowing capacity of **$1.48 billion**[375](index=375&type=chunk) **Subordinated Debt (Amounts in thousands)** | Item | Total Debt Outstanding | Interest Rate (June 30, 2025) | | :--- | :--- | :--- | | FBK Trust I | $9,280 | 7.81% | | FBK Trust II | $21,650 | 7.71% | | FBK subordinated debt I | $100,000 | 4.50% | | Total subordinated debt, net | $130,898 | | - The Company anticipates utilizing proceeds from recent securities sales to **redeem outstanding subordinated and trust preferred debt**[377](index=377&type=chunk) [Liquidity and capital resources](index=118&type=section&id=Liquidity%20and%20capital%20resources) This subsection discusses the company's management of liquidity and capital to meet its financial obligations and support growth - The Company maintains adequate liquidity through managing asset/liability maturities, growing low-cost deposits, and utilizing investment portfolios and various borrowing lines[381](index=381&type=chunk)[382](index=382&type=chunk)[383](index=383&type=chunk)[384](index=384&type=chunk) **Liquidity Summary (Amounts in thousands)** | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current on-balance sheet liquidity | $1,713,083 | $1,643,453 | | Total available sources of liquidity | $6,926,145 | $6,769,537 | | On-balance sheet liquidity as a percentage of total assets | 12.8% | 12.5% | | On-balance sheet liquidity and available sources of liquidity as a percentage of estimated uninsured and uncollateralized deposits | 289.5% | 293.8% | - As of June 30, 2025, the Company had **$1.48 billion in FHLB borrowing capacity** and **$370.0 million in unsecured lines of credit**, with no outstanding borrowings[385](index=385&type=chunk)[386](index=386&type=chunk) - The Bank had **$91.4 million of retained earnings available for dividend payments** to the Company without prior regulatory approval as of June 30, 2025[392](index=392&type=chunk) [Shareholders' equity and capital management](index=120&type=section&id=Shareholders'%20equity%20and%20capital%20management) This subsection analyzes shareholders' equity and capital ratios, demonstrating the company's strong capital position relative to regulatory requirements - **Total shareholders' equity increased to $1.61 billion** at June 30, 2025, from $1.57 billion at December 31, 2024, driven by net income and a reduction in accumulated other comprehensive loss, net[394](index=394&type=chunk) - **Book value per common share increased to $35.17** at June 30, 2025, from $33.59 at December 31, 2024[394](index=394&type=chunk) - The Company's capital ratios remain **well above regulatory requirements** for well-capitalized institutions, with a **Total risk-based capital ratio of 14.7%** and **Common Equity Tier 1 ratio of 12.3%** at June 30, 2025[395](index=395&type=chunk)[396](index=396&type=chunk)[397](index=397&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=120&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the Company's market risk, primarily focusing on interest rate risk inherent in its lending and deposit-taking activities [Interest rate sensitivity](index=120&type=section&id=Interest%20rate%20sensitivity) This subsection details how the company measures and manages its exposure to interest rate fluctuations using rate shock analysis - The Company's market risk primarily stems from interest rate risk, which is actively monitored and managed by the Asset Liability Management Committee (ALCO)[398](index=398&type=chunk)[399](index=399&type=chunk) - Rate shock analysis is used to measure the estimated impact of immediate changes in interest rates on net interest income and economic value of equity (EVE)[400](index=400&type=chunk) **Estimated Impact of Interest Rate Changes on Net Interest Income and EVE** | Change in Interest Rates (in basis points) | Percentage Change in Net Interest Income (June 30, 2025) | Percentage Change in Economic Value of Equity (June 30, 2025) | | :--- | :--- | :--- | | +400 | 8.61% | (18.1)% | | +300 | 7.16% | (13.8)% | | +200 | 5.06% | (8.64)% | | +100 | 2.67% | (3.97)% | | -100 | (2.91)% | 3.10% | | -200 | (5.81)% | 5.12% | - As of June 30, 2025, the Company is in an **asset-sensitive position**, meaning net interest income is projected to increase with rising interest rates and decrease with falling rates[403](index=403&type=chunk) [Item 4. Controls and Procedures](index=122&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures and notes no material changes in internal control - The Company's disclosure controls and procedures were evaluated and **deemed effective** as of June 30, 2025, ensuring timely and accurate reporting[406](index=406&type=chunk) - **No material changes occurred** in the Company's internal control over financial reporting during the quarter ended June 30, 2025[407](index=407&type=chunk) - Management acknowledges that no control procedure can prevent all errors and fraud, providing only **reasonable, not absolute, assurance**[408](index=408&type=chunk) [PART II. OTHER INFORMATION](index=123&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part provides information on legal proceedings, risk factors, stock repurchases, and other corporate matters [Item 1. Legal Proceedings](index=123&type=section&id=Item%201.%20Legal%20Proceedings) This section states that there are no material pending legal proceedings against the Company or its subsidiaries beyond the normal course of business - As of the report date, there are **no material pending legal proceedings** against the Company or its subsidiaries[411](index=411&type=chunk) [Item 1A. Risk Factors](index=123&type=section&id=Item%201A.%20Risk%20Factors) This section indicates that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report - **No material changes** to the risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024[412](index=412&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=123&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides information on the Company's common stock repurchases during the quarter ended June 30, 2025 **Common Stock Repurchases (Quarter Ended June 30, 2025)** | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 1 - April 30 | 703,091 | $41.83 | | May 1 - May 31 | 108,613 | $44.59 | | June 1 - June 30 | — | — | | Total | 811,704 | $42.20 | - The Company repurchased **811,704 shares of common stock** at an average price of **$42.20 per share** during the quarter ended June 30, 2025[413](index=413&type=chunk) - The board re-authorized a stock repurchase program for up to **$100 million**, with **$43.15 million remaining** under the program as of June 30, 2025[413](index=413&type=chunk) [Item 5. Other Information](index=123&type=section&id=Item%205.%20Other%20Information) This section states that no directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading plans during the quarter - No directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading plans during the quarter ended June 30, 2025[414](index=414&type=chunk) [Item 6. Exhibits](index=124&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed, furnished, or incorporated by reference as part of the Form 10-Q report - The exhibit index includes the **Agreement and Plan of Merger** with Southern States Bancshares, Inc, filed on March 31, 2025[417](index=417&type=chunk) - **Certifications from the Chief Executive Officer and Chief Financial Officer** are filed or furnished with the report[417](index=417&type=chunk) - **Inline XBRL documents** for the instance, schema, calculation, definition, label, and presentation linkbases are included[417](index=417&type=chunk) [SIGNATURES](index=125&type=section&id=SIGNATURES) This section contains the required signatures of the Company's officers, certifying the filing of the Form 10-Q report - The report is duly signed on behalf of FB Financial Corporation by Michael M Mettee, Chief Financial Officer, and Jonathan Pennington, Chief Accounting Officer, on August 4, 2025[419](index=419&type=chunk)[420](index=420&type=chunk)

Group 1 - The core focus of Quad 7 Capital is to provide investment opportunities through their BAD BEAT Investing platform, emphasizing both long and short trades with a proven track record of success [1] - The team consists of 7 analysts with diverse expertise in business, policy, economics, mathematics, game theory, and sciences, allowing for comprehensive market analysis [1] - BAD BEAT Investing aims to educate investors on trading proficiency, offering in-depth research with clear entry and exit targets to save time for investors [1] Group 2 - Benefits of BAD BEAT Investing include understanding market dynamics, receiving well-researched trade ideas weekly, and access to multiple chat rooms for discussions [2] - Members receive daily summaries of key analyst upgrades and downgrades, along with learning opportunities in basic options trading and access to extensive trading tools [2]

Financial Data and Key Metrics Changes - The company reported EPS of $0.06 and adjusted EPS of $0.88 for the quarter, with tangible book value per share growing at a compound annual growth rate of 12.2% since the IPO [5] - Net income on a reported basis was $2.9 million, while adjusted net income was $40.8 million, significantly impacted by a $60 million pre-tax loss from a securities transaction [14][15] - Net interest income increased by 3.5% from the prior quarter and 8.6% year-over-year, reaching $111.4 million [15] - The net interest margin expanded by 13 basis points to 3.68% due to loan growth and cost management [16] Business Line Data and Key Metrics Changes - Loan growth was at an annualized rate of 4.2%, while deposits grew at an annualized rate of 7.2% [10] - Core non-interest income, excluding the securities loss, was $25.8 million, representing a 9% increase over the previous quarter [16] - The company experienced a loss in non-interest income of $34.6 million due to the securities trade [16] Market Data and Key Metrics Changes - The company noted increased market volatility due to trade policy announcements and geopolitical events, which impacted customer behavior and loan activity [7][8] - The loan growth was concentrated in residential mortgages and commercial real estate, with significant increases in specific categories [23] Company Strategy and Development Direction - The merger with Southern States is expected to add immediate scale and accretive earnings, with integration efforts on track for completion by the end of Q3 [11][12] - The company is optimistic about both organic and inorganic growth opportunities, with a focus on capitalizing on market disruptions [12][13] - The company aims to maintain a strong capital position while pursuing additional M&A opportunities in the future [56][82] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic uncertainties and highlighted the potential for growth in the coming quarters [9][11] - The outlook for loan growth remains mid to high single digits, with a strong pipeline of opportunities despite some delays in funding [10][37] - The company anticipates a net interest margin in the range of $3.70 to $3.80 for the second half of the year [25] Other Important Information - The company migrated to a new allowance model to enhance forecasting precision, which had a net impact of approximately $395,000 on reserves [19] - The company plans to redeem subordinated debt and trust preferred securities using proceeds from the securities sale [17] Q&A Session Summary Question: Can you elaborate on the margin guidance and the impact of the bond restructuring? - Management confirmed that virtually no securities from Southern States will be brought over, focusing on paying down brokered deposits and optimizing capital [34][35] Question: What is the outlook for loan growth and the current pipeline? - Management reiterated a mid to high single-digit growth outlook, noting that some expected fundings were delayed but overall customer activity remains strong [37][40] Question: Can you provide details on the higher provision for mortgage banking? - The increase in provision was driven by higher LTV loans and changes in economic forecasts, with a focus on maintaining a profitable operating business [49][50] Question: What is the company's stance on future M&A activity? - Management expressed optimism about M&A opportunities, particularly in the $3 billion to $7 billion range, and emphasized readiness to capitalize on market disruptions [56][82] Question: How is the company managing hiring and recruitment? - The company continues to recruit talent, hiring four new revenue producers in the second quarter to prepare for potential market disruptions [60]

Financial Performance - The company reported net income of $2.9 million, with an adjusted net income of $40.8 million[7, 8] - A securities portfolio restructure resulted in a loss of $60 million[7, 9, 23] - Net interest margin (NIM) expanded by 13 bps to 3.68%[7] - Pre-Tax Pre-Provision Net Revenue was $(4.4) million, but adjusted PPNR reached $58.6 million[7] - The efficiency ratio was 105.7%, while the adjusted efficiency ratio was 56.9%[7] Balance Sheet & Credit Quality - Annualized loan held for investment (HFI) growth was 4.2%[7] - Annualized total deposit growth reached 7.2%[7] - ACL coverage ratio stood at 1.51%[7] - Net charge-offs returned to historical levels at an annualized rate of 0.02%[7, 56] - Nonperforming Assets (NPA) to Assets ratio increased by 8 basis points to 0.92%[7] Capital & M&A - Tangible Common Equity to Tangible Assets ratio was 10.4%[7] - CET 1 Ratio was 12.3% and Total Risk-Based Capital was 14.7% (preliminary)[7] - The merger with Southern States Bancshares, Inc closed on July 1, 2025, with conversion expected in 3Q25[7]

Group 1 - U.S. stock futures are higher, with Nasdaq futures gaining approximately 100 points [1] - Simulations Plus, Inc. reported quarterly earnings of 45 cents per share, exceeding the analyst consensus estimate of 7 cents per share [2] - Simulations Plus reported quarterly sales of $20.363 million, which fell short of the analyst consensus estimate of $20.878 million [2] - Keybanc analyst downgraded Simulations Plus from Overweight to Sector Weight, leading to a 6.3% dip in shares to $16.37 in pre-market trading [2] Group 2 - Presidio Property Trust, Inc. shares fell 29.9% to $9.55 after a significant 166% increase on Monday, following a $2.05 million registered direct offering [4] - MiNK Therapeutics, Inc. shares declined 27.5% to $29.45 after a 37% drop on Monday, with an analyst downgrade from Outperform to Market Perform [4] - Organogenesis Holdings Inc. shares dropped 26.7% to $3.29 after gaining over 4% on Monday [4] - MiMedx Group, Inc. shares fell 20.7% to $5.38 in pre-market trading [4] - Sequans Communications S.A. shares declined 10.8% to $5.01 after a 20% increase on Monday due to Bitcoin acquisition news [4] - Iovance Biotherapeutics, Inc. shares decreased 5.5% to $1.8990 in pre-market trading [4] - FB Financial Corporation shares fell 5.4% to $46.50 following disappointing quarterly sales [4] - ProKidney Corp. shares dropped 4.6% to $3.52 after filing for a common stock offering of up to $200 million [4] - Blue Gold Limited shares declined 4.5% to $26.60 after a 30% surge on Monday [4]

Core Insights - FB Financial (FBK) reported a revenue of $137.41 million for the quarter ended June 2025, marking a year-over-year increase of 7.2% and exceeding the Zacks Consensus Estimate of $135.28 million by 1.58% [1] - The company's EPS for the same period was $0.88, slightly below the consensus estimate of $0.89, reflecting an EPS surprise of -1.12% compared to $0.84 a year ago [1] Financial Performance Metrics - Efficiency Ratio stood at 56.9%, better than the three-analyst average estimate of 57.3% [4] - Net Interest Margin was reported at 3.7%, surpassing the average estimate of 3.6% based on three analysts [4] - Average Earning Assets totaled $12.24 billion, below the two-analyst average estimate of $12.57 billion [4] - Net Charge-offs during the period to Average Loans outstanding were 0%, compared to the average estimate of 0.1% [4] - Mortgage banking income reached $13.03 million, exceeding the three-analyst average estimate of $12.8 million [4] - Total Noninterest income was $26 million, higher than the average estimate of $24.69 million [4] - Net interest income (tax-equivalent basis) was $112.24 million, slightly above the average estimate of $111.95 million [4] - Other Income amounted to $2.54 million, compared to the average estimate of $2.25 million [4] - Service charges on deposit accounts were $3.39 million, slightly below the average estimate of $3.46 million [4] - Net Interest Income was reported at $111.42 million, marginally below the two-analyst average estimate of $111.61 million [4] - ATM and interchange fees totaled $2.88 million, exceeding the two-analyst average estimate of $2.83 million [4] - Investment services and trust income reached $3.92 million, surpassing the two-analyst average estimate of $3.63 million [4] Stock Performance - FB Financial shares have returned +11.6% over the past month, outperforming the Zacks S&P 500 composite's +4% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Viewpoint - FB Financial (FBK) reported quarterly earnings of $0.88 per share, slightly missing the Zacks Consensus Estimate of $0.89 per share, but showing an increase from $0.84 per share a year ago, indicating a -1.12% earnings surprise [1] Financial Performance - The company posted revenues of $137.41 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.58% and up from $128.22 million year-over-year [2] - Over the last four quarters, FB Financial has exceeded consensus EPS estimates two times and topped revenue estimates once [2] Stock Performance and Outlook - FB Financial shares have declined approximately 6.4% since the beginning of the year, contrasting with the S&P 500's gain of 6.4% [3] - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $1.01 for the coming quarter and $3.79 for the current fiscal year [7] Industry Context - The Zacks Industry Rank for Banks - Northeast is in the top 34% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

[Financial Summary and Key Metrics](index=4&type=section&id=Financial%20Summary%20and%20Key%20Metrics) This section provides a five-quarter overview of key financial and performance metrics, noting a significant Q2 2025 net income drop to **$2.9 million** due to a noninterest loss, offset by stable adjusted net income, asset/deposit growth, and an expanded net interest margin Q2 2025 Key Financial Highlights | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Income | $2.9M | $39.4M | $40.0M | | Adjusted Net Income* | $40.8M | $40.1M | $39.4M | | Diluted EPS | $0.06 | $0.84 | $0.85 | | Adjusted Diluted EPS* | $0.88 | $0.85 | $0.84 | | Total Assets | $13.35B | $13.14B | $12.54B | | Total Deposits | $11.40B | $11.20B | $10.47B | | Net Interest Margin (NIM) | 3.68% | 3.55% | 3.57% | - The company experienced a significant noninterest loss of **$34.6 million** in Q2 2025, a sharp contrast to the $23.0 million income in Q1 2025 and $25.6 million income in Q2 2024[7](index=7&type=chunk) - Asset quality ratios showed an increase in nonperforming loans to **0.97%** of loans HFI, up from **0.79%** in both the prior and year-ago quarters, however, annualized net charge-offs were minimal at **0.02%**[7](index=7&type=chunk) - Capital ratios remained strong, with a Common Equity Tier 1 ratio of **12.3%** and a Total risk-based capital ratio of **14.7%** as of June 30, 2025[7](index=7&type=chunk) [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) The Q2 2025 consolidated income statement shows a sharp decline in net income to **$2.9 million** primarily due to a **$60.5 million** net loss from securities, despite growth in net interest income and a slight increase in noninterest expenses including merger costs Q2 2025 Income Statement Highlights (vs. Q1 2025 & Q2 2024) | Item (in thousands) | Q2 2025 | QoQ Change | YoY Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $111,415 | +3.51% | +8.58% | | Total Noninterest (Loss) Income | $(34,552) | -250.0% | -234.9% | | (Loss) from securities, net | $(60,549) | NM | -100.0% | | Total Noninterest Expense | $81,261 | +2.15% | +8.21% | | Net Income | $2,909 | -92.6% | -92.7% | - A significant net loss from securities of **$60.5 million** was the primary driver for the quarter's low net income, this compares to a minimal gain in Q1 2025 and no gain/loss in Q2 2024[10](index=10&type=chunk) - For the six months ended June 30, 2025, net interest income increased by **8.39%** to **$219.1 million** compared to the same period in 2024, however, total revenue decreased by **11.9%** due to the large securities loss[12](index=12&type=chunk) - Merger and integration costs of **$2.7 million** were recorded in Q2 2025, contributing to the rise in noninterest expenses[10](index=10&type=chunk) [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets grew to **$13.35 billion** (up **6.5%** YoY), driven by increased net loans and cash, while total deposits reached **$11.40 billion** (up **8.9%** YoY) and common shareholders' equity rose to **$1.61 billion** Balance Sheet Highlights as of June 30, 2025 (in thousands) | Item | Jun 30, 2025 | vs. Mar 31, 2025 | vs. Jun 30, 2024 | | :--- | :--- | :--- | :--- | | Total Assets | $13,354,238 | +1.66% | +6.53% | | Net Loans HFI | $9,725,334 | +1.08% | +6.24% | | Total Deposits | $11,403,470 | +1.80% | +8.94% | | Borrowings | $164,485 | -2.64% | -54.43% | | Total Common Shareholders' Equity | $1,611,130 | +0.57% | +7.37% | - Cash and cash equivalents increased significantly to **$1.17 billion**, up **46.7%** from the previous quarter and **45.6%** from the prior year[14](index=14&type=chunk) - Within deposits, customer time deposits grew **28.1%** and brokered deposits grew **245.0%** year-over-year, while interest-bearing checking accounts decreased by **11.5%**[14](index=14&type=chunk) [Average Balance and Interest Yield/Rate Analysis](index=9&type=section&id=Average%20Balance%20and%20Interest%20Yield%2FRate%20Analysis) Net interest margin (NIM) improved to **3.68%** in Q2 2025, driven by a higher yield on interest-earning assets (**5.99%**) and a lower cost of interest-bearing liabilities (**3.13%**), with the six-month NIM expanding to **3.61%** Q2 2025 Interest Rate & Margin Analysis | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Margin (NIM) | 3.68% | 3.55% | 3.57% | | Yield on Interest-Earning Assets | 5.99% | 5.91% | 6.16% | | Cost of Interest-Bearing Liabilities | 3.13% | 3.16% | 3.56% | | Cost of Total Deposits | 2.48% | 2.54% | 2.77% | | Interest Rate Spread | 2.86% | 2.75% | 2.60% | - The average balance of interest-earning assets was **$12.24 billion** in Q2 2025, a slight decrease from $12.39 billion in Q1 2025[16](index=16&type=chunk) - For the six months ended June 30, 2025, the net interest margin expanded to **3.61%** from 3.49% in the comparable 2024 period, reflecting improved profitability from core lending and investment activities[28](index=28&type=chunk) [Investments and Other Sources of Liquidity](index=15&type=section&id=Investments%20and%20Other%20Sources%20of%20Liquidity) The company's **$1.34 billion** investment portfolio, primarily U.S. government agency and residential mortgage-backed securities, supports a strong liquidity position of **$1.71 billion** on-balance sheet plus **$6.93 billion** from other sources, covering uninsured deposits by **289.5%** Investment Securities Composition (June 30, 2025) | Security Type | Fair Value (in thousands) | % of Total | | :--- | :--- | :--- | | U.S. government agency securities | $642,264 | 48% | | Mortgage-backed securities - residential | $541,343 | 40% | | Municipal securities | $144,228 | 11% | | Other | $9,730 | 1% | | **Total** | **$1,337,565** | **100%** | - Total on-balance sheet liquidity, comprising cash and unpledged securities, stood at **$1.71 billion** at the end of Q2 2025[33](index=33&type=chunk) - The company has access to significant additional liquidity, including **$1.48 billion** in FHLB borrowing capacity and **$2.12 billion** from the Federal Reserve discount window[33](index=33&type=chunk) [Loan Portfolio](index=16&type=section&id=Loan%20Portfolio) The total loan portfolio (HFI) grew to **$9.87 billion** at Q2 2025, remaining diversified across commercial real estate (**36%**), residential real estate (**30%**), and commercial and industrial loans (**18%**), with **82%** concentrated in metropolitan markets and total unfunded commitments at **$2.86 billion** Loan Portfolio Composition (June 30, 2025) | Loan Type | Amount (in thousands) | % of Total | | :--- | :--- | :--- | | Commercial Real Estate (Total) | $3,568,812 | 36% | | Residential Real Estate (Total) | $2,889,383 | 30% | | Commercial and Industrial | $1,788,911 | 18% | | Construction | $1,022,678 | 10% | | Consumer and other | $604,498 | 6% | | **Total Loans HFI** | **$9,874,282** | **100%** | - The loan portfolio is primarily concentrated in metropolitan markets, which account for **$8.08 billion**, or **82%** of the total portfolio[37](index=37&type=chunk) - Total unfunded loan commitments increased to **$2.86 billion**, with commercial and industrial lines of credit (**$1.40 billion**) and residential lines of credit (**$746 million**) being the largest components[37](index=37&type=chunk) [Asset Quality](index=17&type=section&id=Asset%20Quality) Asset quality metrics in Q2 2025 were mixed, with total nonperforming assets increasing to **$123.0 million** (**0.92%** of total assets), while the allowance for credit losses stood at **1.51%** of loans and annualized net charge-offs remained exceptionally low at **0.02%** Key Asset Quality Ratios | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Nonperforming assets as a % of total assets | 0.92% | 0.84% | 0.81% | | Nonperforming loans HFI as a % of loans HFI | 0.97% | 0.79% | 0.79% | | Annualized net charge-offs as a % of avg loans | 0.02% | 0.14% | 0.02% | | Allowance for credit losses as a % of loans HFI | 1.51% | 1.54% | 1.67% | - The allowance for credit losses on loans HFI decreased slightly to **$148.9 million** from **$150.5 million** in the prior quarter, following a **$6.8 million** reduction due to a change in accounting estimate[39](index=39&type=chunk) - Total nonperforming loans HFI increased to **$95.9 million** from **$77.2 million** in the previous quarter, driven by a rise in nonaccrual loans[39](index=39&type=chunk) [Selected Deposit Data](index=18&type=section&id=Selected%20Deposit%20Data) Total deposits reached **$11.40 billion** as of June 30, 2025, primarily sourced from metropolitan markets (**73%**) and evenly split between consumer and commercial customers, with estimated uninsured deposits decreasing to **26.2%**, indicating a more stable funding profile Deposit Composition (June 30, 2025) | Segment | Amount (in thousands) | % of Total | | :--- | :--- | :--- | | **By Market** | | | | Metropolitan | $8,275,006 | 73% | | Community | $2,436,243 | 21% | | Brokered/Wholesale & Other | $692,221 | 6% | | **By Customer** | | | | Commercial | $4,835,968 | 42% | | Consumer | $4,772,582 | 42% | | Public | $1,794,920 | 16% | | **Total** | **$11,403,470** | **100%** | - Estimated uninsured and uncollateralized deposits were **$2.98 billion**, representing **26.2%** of total deposits, showing an improved risk profile compared to 30.6% in June 2024[41](index=41&type=chunk) [Preliminary Capital Ratios](index=19&type=section&id=Preliminary%20Capital%20Ratios) The company's capital position remains robust as of June 30, 2025, with preliminary Common Equity Tier 1 (**12.3%**), Tier 1 risk-based (**12.6%**), and Total risk-based capital ratios (**14.7%**) all well above regulatory minimums, alongside a **10.4%** Tangible Common Equity to Tangible Assets ratio Preliminary Regulatory Capital Ratios (June 30, 2025) | Ratio | Value | | :--- | :--- | | Common Equity Tier 1 (CET1) | 12.3% | | Tier 1 Risk-Based Capital | 12.6% | | Total Risk-Based Capital | 14.7% | | Tier 1 Leverage | 11.3% | | Tangible Common Equity to Tangible Assets* | 10.4% | - Total risk-weighted assets were preliminarily calculated at **$11.59 billion** as of June 30, 2025[45](index=45&type=chunk) [Segment Data](index=20&type=section&id=Segment%20Data) This section details the financial performance of the Banking and Mortgage segments, highlighting their pre-tax contributions, net interest income, and key efficiency metrics [Banking Segment](index=20&type=page&id=Banking%20segment) The Banking segment reported a pre-tax loss of **$6.7 million** in Q2 2025, a significant downturn from the prior quarter's profit, primarily driven by a **$47.7 million** noninterest loss, despite strong net interest income of **$108.9 million** and an improved core efficiency ratio of **52.8%** Banking Segment Performance (Q2 2025) | Metric (in thousands) | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Net Interest Income | $108,909 | $105,759 | | Noninterest (Loss) Income | $(47,720) | $10,660 | | Pre-tax Net (Loss) Contribution | $(6,723) | $47,321 | | Total Assets | $12,736,830 | $12,490,097 | | Core Efficiency Ratio* | 52.8% | 56.5% | [Mortgage Segment](index=20&type=page&id=Mortgage%20segment) The Mortgage segment reported a pre-tax loss of **$3.0 million** in Q2 2025, primarily due to higher provisions for credit losses, despite an increase in mortgage banking income to **$13.0 million** and improved mortgage loan sales volume of **$391.1 million** with a **2.86%** sale margin Mortgage Segment Performance (Q2 2025) | Metric (in thousands, except margin) | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Mortgage Banking Income | $13,029 | $12,426 | | Pre-tax Net (Loss) Contribution | $(3,012) | $1,511 | | Mortgage Loan Sales | $391,061 | $222,805 | | Mortgage Sale Margin | 2.86% | 2.51% | [Non-GAAP Reconciliations](index=3&type=section&id=Non-GAAP%20Reconciliations) This section explains the company's use of non-GAAP financial measures and provides detailed reconciliations to their GAAP equivalents, offering insights into adjusted performance metrics [Use of non-GAAP Financial Measures](index=3&type=page&id=Use%20of%20non-GAAP%20Financial%20Measures) This section explains the company's use of non-GAAP financial measures, which management believes provide a clearer understanding of ongoing operations and enhance period-to-period comparability by excluding non-core or non-recurring items, serving as a supplement to GAAP measures - The company uses non-GAAP measures such as adjusted net income, adjusted EPS, core revenue, core noninterest expense, core efficiency ratio, and various tangible equity metrics[4](index=4&type=chunk) - Management uses these metrics to analyze performance, financial condition, and operational efficiency, believing they enhance comparability by removing the effects of significant non-core gains and charges[5](index=5&type=chunk) [Reconciliation Tables](index=21&type=page&id=Reconciliation%20Tables) This section provides detailed tables reconciling GAAP financial measures to their non-GAAP counterparts, including adjustments for securities gains/losses, merger costs, and amortization of intangibles to derive metrics such as Adjusted Net Income and Core Efficiency Ratio Reconciliation of Net Income to Adjusted Net Income (Q2 2025) | Item (in thousands) | Amount | | :--- | :--- | | Net Income (GAAP) | $2,909 | | Adjustments: | | | (Loss) from securities, net | $(60,549) | | Merger and integration costs | $2,734 | | Other adjustments | $236 | | Tax impact of adjustments | $(3,778) | | Non-recurring tax benefit | $(8,713) | | **Adjusted Net Income (Non-GAAP)** | **$40,821** | Reconciliation of Total Noninterest Expense to Core Noninterest Expense (Q2 2025) | Item (in thousands) | Amount | | :--- | :--- | | Total Noninterest Expense (GAAP) | $81,261 | | Less: Merger and integration costs | $2,734 | | **Core Noninterest Expense (Non-GAAP)** | **$78,527** |

Core Viewpoint - Analysts project that FB Financial (FBK) will report quarterly earnings of $0.89 per share, a 6% increase year over year, with revenues expected to reach $135.28 million, reflecting a 5.5% increase from the same quarter last year [1]. Earnings Estimates - The consensus EPS estimate has been revised 2% higher over the last 30 days, indicating a collective reevaluation by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock performance [3]. Key Financial Metrics - Analysts expect the 'Efficiency Ratio' to be 57.2%, down from 58.6% in the same quarter last year [5]. - The 'Net Interest Margin' is projected to remain stable at 3.6%, consistent with the previous year's figure [5]. - 'Average Earning Assets' are expected to reach $12.57 billion, up from $11.63 billion in the same quarter last year [6]. - 'Mortgage banking income' is estimated at $12.80 million, compared to $11.91 million a year ago [6]. - 'Total Noninterest income' is projected to be $24.69 million, down from $25.61 million in the same quarter last year [7]. - 'Net interest income (tax-equivalent basis)' is expected to be $111.97 million, up from $103.25 million in the same quarter last year [7]. - The consensus estimate for 'Other Income' is $2.25 million, down from $4.61 million a year ago [8]. - 'Service charges on deposit accounts' are projected to reach $3.46 million, slightly up from $3.17 million last year [8]. - 'Net Interest Income' is expected to be $111.61 million, compared to $102.62 million in the same quarter last year [8]. - 'Investment services and trust income' is projected at $3.63 million, up from $3.39 million in the same quarter last year [9]. Stock Performance - FB Financial shares have increased by 6.1% over the past month, outperforming the Zacks S&P 500 composite, which rose by 3.9% [9]. - FBK holds a Zacks Rank 2 (Buy), indicating expectations of outperforming the overall market in the near future [9].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1][2]. Company Overview: FB Financial (FBK) - FBK currently holds a Momentum Style Score of A, indicating strong momentum potential [3]. - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for outperformance in the market [4]. Price Performance - FBK shares have increased by 5.29% over the past week, outperforming the Zacks Banks - Northeast industry, which rose by 4.28% [6]. - Over the past month, FBK's shares rose by 5.18%, compared to the industry's 3.52% [6]. - In the last quarter, FBK shares increased by 11.55%, and over the past year, they gained 17.24%, while the S&P 500 rose by 10.83% and 14.92%, respectively [7]. Trading Volume - FBK's average 20-day trading volume is 202,231 shares, which serves as a bullish indicator when combined with rising stock prices [8]. Earnings Outlook - In the past two months, one earnings estimate for FBK has increased, while none have decreased, raising the consensus estimate from $3.76 to $3.79 for the full year [10]. - For the next fiscal year, one estimate has also moved upwards with no downward revisions [10]. Conclusion - Considering the strong price performance, positive earnings outlook, and high Momentum Style Score, FBK is recommended as a solid momentum pick [12].