FB Financial (US:FBK)2021-07-20 16:54Financial Data and Key Metrics Changes - The company reported annualized loan growth of 13.9% excluding PPP loans, with adjusted EPS of $0.88, adjusted return on average assets of 1.43%, and adjusted return on tangible common equity of 15.8% [9][12][24] - Tangible book value per share increased to $20.43, reflecting a 16.4% annualized growth rate [9] Business Line Data and Key Metrics Changes - Loan growth excluding PPP amounted to $240 million, with a significant contribution from multifamily loans and a decrease in loan paydowns [12][53] - The mortgage segment contributed approximately $550,000, with expectations for a contribution of $2 million to $4 million in Q3 [34][68] Market Data and Key Metrics Changes - The company observed strong economic activity across its markets, particularly in Middle Tennessee, Knoxville, North Alabama, and Birmingham, which contributed to robust loan growth [13][19] - The company noted a decline in overall deferrals to $74 million, with net charge-offs at only 2 basis points, indicating improved credit quality [12][32] Company Strategy and Development Direction - The company is focused on organic growth and enhancing operational technology and customer experience to create a high-performing bank in the Southeast [17][19] - The management is open to opportunistic M&A but emphasizes the importance of executing at a high level before pursuing acquisitions [21][62] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the economic recovery and the performance of the loan portfolio, while monitoring the impact of the Delta variant on business confidence [26][114] - The company anticipates continued loan growth for the remainder of 2021, adjusting guidance to high single-digit growth [15][80] Other Important Information - The company has seen a significant increase in its securities portfolio, with a $179 million increase in Q2, reflecting a conservative approach to duration risk [40] - The management expects further releases in reserves as economic conditions improve, with a focus on maintaining a prudent level of reserves [44][45] Q&A Session Summary Question: What contributed to the impressive loan growth? - Management indicated that loan growth was balanced across various segments, with multifamily loans showing significant growth due to fewer paydowns [52][53] Question: What is the outlook for mortgage contributions? - The guidance for mortgage contributions in Q3 is $2 million to $4 million, not accounting for recent rate changes [68] Question: How does the company view M&A opportunities? - The company maintains a list of potential M&A targets within its footprint, focusing on quality banks that align with its growth strategy [21][62] Question: What are the expectations for capital deployment? - Management is considering share repurchases as capital accumulates, especially given the current valuation [66] Question: How is the company addressing housing supply shortages? - Management believes the housing supply issue is a longer-term challenge, particularly in Nashville, due to strong economic growth and in-migration [106][107]