FB Financial (FBK) Q2 Earnings call transcript Jul 16, 2024
AInvestWednesday, Jul 17, 2024 11:25 am ET
1min read
FBK --

FB Financial Corporation, a leading financial services provider, recently held its second quarter 2024 earnings call, offering valuable insights into its financial performance and future outlook. The call, led by Christopher Holmes, President and CEO, and Michael Mettee, Chief Financial Officer, highlighted the company's strong financial health and strategic initiatives.

Operational Performance and Financial Highlights

FB Financial reported a solid quarter, with EPS of $0.85 and adjusted EPS of $0.84. The company's tangible book value per share grew at a compound annual growth rate of 13.4% since its IPO, underscoring its financial stability. The adjusted return on average assets stood at 1.28%, while adjusted PPNR return on average assets reached 1.7%. These metrics demonstrate the company's ability to generate earnings and manage its assets effectively.

Operationally, FB Financial continues to perform well. Its support areas enable relationship managers to respond to customers effectively, and its platform facilitates growth with limited additional investments in the back office. The company's margin expanded by 15 basis points to 3.57%, and net interest income grew by 3% from the previous quarter. Mortgage had a reasonable quarter, contributing $700,000 pre-tax, while the banking segment delivered solid core fee income of $11.8 million. The company's focus on efficiency is evident in its core banking segment efficiency ratio declining to 53.8%.

Financial Health and Capital Management

FB Financial's financial health is strong, with tangible common equity to tangible assets at 10.2%, a CET1 ratio of 12.7%, and a total risk-based capital ratio of 15.1%. These ratios indicate a well-capitalized institution with a strong balance sheet. The company has effectively managed its concentration risk, with C&D and CRE concentrations at 78% and 249%, respectively. Its capital ratios and concentration management strategies position FB Financial favorably in the market.

Future Outlook and Growth Strategies

Looking ahead, FB Financial is focused on organic growth, with expectations for muted growth in the low to mid-single digit range for the second half of the year. The company's strategic initiatives include attracting new relationship managers and managing its real estate portfolios to sustainable levels. These efforts are expected to support a return to 10% organic growth targets next year. FB Financial is also exploring opportunities for opportunistic acquisitions, ready to act when potential partners are ready to find a partner. The company's balance sheet optimization efforts, including stock buybacks, demonstrate its commitment to maximizing shareholder value.

Conclusion

FB Financial Corporation's second quarter 2024 earnings call painted a picture of a financially healthy and strategically focused organization. Its operational performance, financial health, and growth strategies position the company well for the future. Investors and stakeholders alike can look forward to FB Financial's continued growth and success in the coming quarters.

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