FB Financial (NYSE:FBK) held its first-quarter earnings conference call on Tuesday. Below is the complete transcript from the call.
Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit https://www.benzinga.com/apis/ to learn more.
View the webcast at https://event.choruscall.com/mediaframe/webcast.html?webcastid=4Tu7dtR8
Summary
FB Financial reported an EPS of $1.10 and an adjusted EPS of $1.12 for Q1 2026, with net income at $57.5 million and adjusted net income at $58.3 million.
The company received a J.D. Power Retail Banking Award for customer satisfaction in the South Central Region, highlighting the quality of service and client trust.
Loan growth was approximately 4% annualized, and deposit growth was around 5%, with expectations for mid to high single-digit growth for the full year.
The net interest margin was 3.94%, with guidance slightly lowered to a range of 3.76% to 3.8% for the full year due to competitive pressure on deposit pricing.
Management highlighted strong momentum in loan growth towards the end of the quarter and noted competitive pressures in both loan and deposit markets.
FB Financial maintains a strong capital position with a common equity tier 1 ratio of 11.5% and a tier 1 leverage ratio of 10.4%.
The company continues to focus on disciplined expense management and reported an efficiency ratio of 55.2% for the quarter.
Strategically, FB Financial is focused on maintaining its community bank orientation while exploring specialized lines of business and organic growth opportunities.
Full Transcript
OPERATOR
Good morning everyone and welcome to the FB Financial first quarter 2026 earnings call. Please note this event is being recorded at this time. I’d like to turn the conference call over to Rachel Deresky with FB Financial. Please go ahead.
Rachel Deresky
Good morning and welcome to FB Financial Corporation’s first quarter 2026 earnings conference call. Hosting the call today from FB Financial are Chris Holmes, President and Chief Executive Officer and Michael Mati, Chief Operating and Financial Officer. Please note, FB Financial’s earnings release, supplemental Financial Information and this morning’s presentation are available on the Investor Relations page of the Company’s website at w www.firstbankonline.com and on the securities and Exchange Commission’s website at www.sec.gov. today’s call is being recorded and will be available for replay on FB Financial’s website approximately an hour after the conclusion of the call. At this time, all participants have been placed in a listen only mode. The call will open for questions after the presentation. During the presentation, FB Financial may make comments which constitute forward looking statements under the federal securities laws. Forward looking statements are based on management’s current expectations and assumptions and are subject to risks, uncertainties and other factors that may cause actual results and performance or achievements of FB Financial to differ materially from any results expressed or implied by such forward looking statements. Many of such factors are beyond FB Financial’s ability to control or predict and listeners are cautioned not to put undue reliance on such forward looking statements. A more detailed description of these and other risks that may cause actual results to materially differ from expectations is contained contain FB Financial’s periodic and current reports filed with the SEC, including FB Financial’s most recent Form 10K. Except as required by law, FB Financial disclaims any obligation to update or revise any forward looking statements contained in this presentation, whether as a result of new information, future events or otherwise. In addition, these remarks may include certain non GAAP financial measures as defined by SEC Regulation G. A presentation of the most directly comparable GAAP financial measures and a reconciliation of the non GAAP measures to comparable GAAP measures is available in FV Financial’s Earnings Release, Supplemental Financial Information and this morning’s presentation which are all available on the Investor Relations page of the company’s website at www.firstbankonline.com and on the SEC’s website at www.sec.gov. I would now like to turn the presentation over to Mr. Chris Holmes, FB Financial’s President and CEO.
Chris Holmes (President and Chief Executive Officer)
All right, good morning. Thank you Rachel. Thanks to everybody for joining the call this morning and always thank you for your interest in FB Financial. I want to start today’s call by calling attention to a distinguished award the company received recently and what it means. First thing, the bank received J.D. Power Retail banking Award in the South Central Region for placing number one among the banks in the region for customer satisfaction. J.D. power surveyed over 100,000 banking customers across our region, surveying them about their satisfaction with their primary bank and when the results were tabulated, first bank ranked number one on the list for overall customer satisfaction. First bank also ranked number one in the subcategories of client trust and quality of our people. What made this award even more gratifying was that we weren’t even aware that our customers were being surveyed. So the ranking is a result of our natural service behavior and not something that resulted from any special preparation. As bank investors, we watch every basis, point of margin, efficiency, return, et cetera, and every penny of EPS where we can struggle to find effective relative measures of the actual driver of superior sustainable bank performance, which is our ability to attract, satisfy and retain bank clients. This award is independent, tangible verification of what I’ve known about our team that’s when stacked against the competition, we win. I want to thank our clients who participated in the process and our associates who are the first bank story and who takes such outstanding care of our clients. You are literally the best at what you do and I’m proud to be on the team with you. So with that, now let me get into the quarter. We reported EPS of $1.10 and adjusted EPS of $1.12 and have grown our tangible book value per share excluding the impact of AOCI at a compounded annual growth rate of 11.6%. Since our IPO back in 2016, our net income was 57.5 million or 58.3 million on an adjusted basis and our pre tax pre provision net revenue, or we may refer to as BPNR during the call was 77.2 million or 78.2 million on an adjusted basis. So even with two fewer days in the quarter, we were able to grow our pre tax pre provision net revenue versus the prior quarter. Revenue declined slightly during the quarter, but expenses haven’t had an even greater decrease. To keep our net income and profitability metrics in line with our expectations, we kept our PPNR return on average assets near our benchmark range of 2%, coming in at 1.93% or 1.95% adjusted. We’re pleased with our returns and as Michael will cover in his comments, our growth gained momentum during the quarter quarter giving us optimism about the remainder of the year. We’re now a quarter of the way through 2026. We continue to believe it’s a great time to be at First Bank. Our strategic pillars of award winning client experience, high associate engagement, operational efficiency and elite financial performance are all working together to grow our franchise and position us for continued success. When you add that to our when you add that our geography is one of the best in the country and our size is optimal to allow for both capacity and agility, we’re optimistic about our path to creating shareholder value, both short term and long term. So before I turn the call over to Michael, I do want to acknowledge that like all of you, we’re following the macro events of the times, of our times, closely. But most of these things like geopolitical conflicts, technology disruptions, economic shocks and interest rate volatility are things that we have to react to versus exercise control over what we do. Control is our position in preparation for a range of circumstances and risk scenarios. With active and prudent management of our robust capital, robust liquidity and our high reserve levels, we remain in a position of strength and believe that we have the ability to perform through the various economic cycles as they come. So that I’ll now turn the call over to our Chief Financial and Operating Officer, Michael Mattee for some more color on the quarter.
Michael Mattee
Thank you Chris and good morning everyone. I’ll begin my comments this quarter with the balance sheet. While we started the year at a slower pace than we originally anticipated, with annualized loan growth of approximately 4%, deposit growth around 5%, we are seeing momentum build across the business in the right areas. Although these growth levels felt the lower end of our internal expectations, the underlying activity and pipeline trends give us confidence that we are positioned to execute on the core fundamentals Chris outlined and drive improved results as the year progresses. During the first quarter, we began to see a more intense wave of competitive pressure, particularly around pricing. While profitability will always remain central to our decision making, we’re focused on striking the appropriate balance between disciplined returns and sustainable growth. Our strategy remains centered on building deep long term customer relationships that create enduring value for our shareholders. We will continue to be disciplined in acquiring new relationships and remain committed to protecting and strengthening our existing ones, always with a focus on delivering value to both our clients and shareholders. The company has the size and scale to compete effectively and win attractive deals when it makes sense to do so and do not hesitate to act aggressively in competitive situations when warranted. Ultimately, our value proposition is not about being the low price provider, it’s about delivering peer leading customer satisfaction through strong financial advice and trusted services. By keeping the client at the center of everything we do, we believe we will continue to drive improved profitability over time and create sustained long term value for our shareholders. On that front, March was our strongest month of the quarter with upper single digit loan growth and meaningful expansion in our loan pipeline. As we move through the second quarter, we’re seeing the momentum continue with a portion of that activity beginning to translate into on balance sheet growth. We expect second quarter balances to reflect continued improvement with additional pipeline conversion extending into the third quarter and larger volumes building into the back half of the year. On a full year basis, we continue to expect both loan and deposit growth in the mid to high single digit range with growth increasingly weighted towards the second half as momentum builds. Turning to earnings for the quarter pre provision net revenue totaled 77.2 million or 78.2 million on an adjusted basis compared to 71.1 million in the prior quarter and 77.1 million on an adjusted basis. Net income also improved quarter over quarter despite the shorter reporting period coming in at 57.5 million or 58.3 million on an adjusted basis, our net interest margin for the quarter was 3.94%, representing a modest decline driven primarily by balance sheet mix and the full quarter impact of rate cuts implemented late in the fourth quarter. Total loan yields for the quarter was 6.51%, with yields on new production toward the end of the quarter running a bit closer to 6.6%. On the deposit side, total cost declined to 2.27% while rates on new production were approximately 2.7%. Around quarter end, both loan and deposit yields were modestly lower than the prior quarter, reflecting benchmark rate cuts across the variable rate portions of our balance sheet. As we move deeper into 2026, we expect some additional pressure on margin as competitive dynamics remain elevated and we continue to pursue targeted growth opportunities in our market. Based on current conditions, we would expect full year net interest margin excluding loan accretion to be in the range of 3.76 to 3.8%, representing a modest decline from our prior guidance. We would expect second quarter margin to trend towards the lower end of that range before stabilizing as the year progresses. Finally, we would note that the interest rate environment remains uncertain, particularly around the timing and magnitude of future benchmark rate movements. As a slightly asset sensitive balance sheet Changes in rates can be both favorable and unfavorable depending on the direction and speed of those moves. While our margin outlook assumes a continuation of current conditions, modest rate actions either higher or lower than current levels will impact some of the competitive and growth related margin pressure we’ve outlined. We’ll continue to actively manage the balance sheet and pricing strategy to position the company as effectively as possible across a range of potential scenarios. Non interest income declined 2.4 million during the quarter, primarily driven by lower secondary mortgage volume as well as absence of several non recurring items recognized in the prior quarter including a higher BOLI benefit payout. In addition, the quarter reflected fewer calendar days relative to the prior period which modestly impacted overall fee generation, particularly within mortgage related activity. With mortgage we saw a really strong start to the quarter and that slowed as the quarter progressed due to the increased interest rate volatility and heightened uncertainty in the housing market and really the world economy. Shifting rate expectations and broader market dynamics impacted borrower sentiment and transaction activity which weighed on production as rates moved throughout the quarter. Mortgage revenue also tends to exhibit some seasonality with activity typically building as we move further into the year. On the expense side, first quarter non-interest expense totaled 95.2 million, representing an approximate 11% decline from the prior quarter or roughly 7% on an adjusted basis. Personnel costs moderated as compensation related accruals returned to a more normalized run rate and merger and integration expenses declined as we completed the majority of costs associated with the Southern states combination. We also saw quarter over quarter reductions across several other expense categories as the year reset and teams maintained strong expense discipline. As a result, our efficiency ratio for the quarter was 55.2% or 54.3% on an adjusted basis, driven in part by our banking segment which delivered an adjusted efficiency ratio of 50.9%. Looking ahead, we remain focused on disciplined expense management with banking segment non-interest expense expected to range between 325 million and 335 million for the year and a total company efficiency ratio anticipated to remain in the low 50% range. Turning to credit, our provision expense for the quarter totaled approximately 3 million with our allowance coverage ratio ending the period at 1.49% of loans held for investment. Net charge offs were modest at an annualized rate of 11 basis points, which was a slight uptick for us, but were driven by a small number of isolated bar specific situations rather than any deterioration tied to broader economic stress. In evaluating the allowance for the quarter, we gave additional consideration to potential macroeconomic events stemming from the conflict in The Middle East. We reviewed the most relevant economic forecast, assessed our portfolio for direct exposure to the recent increase in energy prices. While it remains early to fully understand the broader downstream impact of operating companies, our analysis focused on a limited set of industries most sensitive to near term energy price shocks. Our exposure to those sectors remains minimal and we believe our reserve levels are appropriate given the current risk profile of the portfolio. With respect to capital, we continue to be in a very strong position supported by solid capital ratios and a robust liquidity profile that provide meaningful flexibility. During the quarter, we were optimistic in repurchasing shares amid purchases of periods of market volatility and we remain well positioned to deploy capital thoughtfully as opportunities present themselves. Our capital ratios continue to reflect that strength with a common equity tier 1 ratio of 11.5%, a tier 1 leverage ratio of 10.4% and total risk based capital of 13.4%. This strong capital foundation allows us to remain flexible in supporting organic growth, pursuing strategic opportunities and returning capital to shareholders where appropriate. In closing, I want to echo Chris’s congratulations to our team on earning the JD Power Recognition. This award is a direct reflection of our associates commitment to our core values and the strength of our franchise and it reinforces our focus on delivering consistent value to our customers, shareholders and communities. With that, I’ll turn the call back over to Chris.
Chris Holmes (President and Chief Executive Officer)
All right, thanks for the color, Michael. Thanks again to everyone joining the call this morning for your interest in FB Financial and Operator. At this time we’d like to open the line for questions.
OPERATOR
We will now begin the question and answer session. To ask a question, you may press Star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star then two. At this time we will pause momentarily to assemble our roster. The first question today comes from Dave Rochester with Cantor. Please go ahead.
Dave Rochester (Analyst)
Hey, good morning guys and congrats on the award. That sounded very impressive Dave. Thanks very …
This post was originally published here
