FB Financial Corporation ((FBK)) has held its Q4 earnings call. Read on for the main highlights of the call.
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FB Financial Corporation’s latest earnings call painted a picture of robust financial health, underpinned by strong growth in earnings per share (EPS) and net revenue. The company showcased strategic expansion into new markets and maintained a solid capital position, though it faced challenges such as a decrease in net interest margin, elevated charge-offs, and stiff competition in the deposit market.
Strong Financial Performance
FB Financial reported a full-year EPS of $2.48 or an adjusted EPS of $3.40, marking a 13% increase year-over-year. Additionally, the company’s full-year pretax pre-provision net revenue reached $158.7 million, or $217.1 million on an adjusted basis, showcasing a significant 20% year-over-year growth.
Asset and Deposit Growth
The company experienced a commendable growth in total assets, which increased by $553 million, approximately 4.4%, funded through the growth of core deposit balances by $343.5 million or about 3.3%.
Strategic Expansion
FB Financial made strategic moves by expanding into new markets, notably adding 9 new revenue-producing bankers in the fourth quarter, totaling 32 for the year. The company also announced its expansion into Asheville, North Carolina.
Capital and Liquidity Strength
The company’s capital position remains robust, with a tangible common equity to tangible assets ratio of 10.2%, a preliminary CET1 ratio of 12.8%, and a total risk-based capital ratio of 15.2%.
Decrease in Net Interest Margin
FB Financial saw a slight decrease in its net interest margin, which dipped a couple of basis points to 3.5%, attributed to carrying excess interest-bearing cash during the quarter.
Elevated Charge-Off Levels
Charge-off levels were notably elevated this quarter, primarily due to the full charge-off of a single, previously reserved commercial and industrial relationship, totaling $2.5 million, driven by borrower-specific challenges.
Competitive Deposit Market
The deposit market remains highly competitive, with certificates of deposit in some areas exceeding 4.5%, impacting the cost of funds for the company.
Forward-Looking Guidance
Looking ahead, FB Financial outlined a strategic focus on organic growth and potential bank acquisitions while maintaining strong capital ratios. The company aims for high single-digit to low double-digit loan growth in 2025, supported by its robust capital position.
In conclusion, FB Financial Corporation’s earnings call highlighted a strong financial performance and strategic advancements, despite facing certain challenges. The company’s focus on expansion and maintaining a solid capital base positions it well for future growth.
