FB Financial Q4 Earnings Call Highlights
by Doug Wharley · The Cerbat GemFB Financial (NYSE:FBK) executives highlighted fourth-quarter margin expansion, low credit costs, and a recently completed acquisition as key drivers of results during the company’s fourth-quarter 2025 earnings call. Management also reiterated expectations for a return to higher organic growth rates in 2026, while maintaining expense discipline and continuing to evaluate talent and M&A opportunities.
Quarterly and full-year performance
President and CEO Chris Holmes said the company reported fourth-quarter EPS of $1.07 and adjusted EPS of $1.16. Pre-tax pre-provision net revenue totaled $71.1 million, or $77.1 million on an adjusted basis. Holmes attributed quarterly earnings to net interest income of $150.6 million, a net interest margin of 3.98%, and “low credit cost in the quarter.”
Holmes also cited adjusted profitability metrics of 1.51% return on average assets and 15.9% return on average tangible common equity, noting those returns were achieved alongside a tangible common equity ratio of “almost 10%.” He added that tangible book value (excluding AOCI) has grown at a compounded annual growth rate of 11.6% since the company’s IPO.
For full-year 2025, Holmes reported EPS of $2.45 and adjusted EPS of $3.99. Chief Operating and Financial Officer Michael Mettee said fourth-quarter net income was $57.0 million, or $61.5 million on an adjusted basis. For the year, he said reported net income was $122.6 million, with adjusted net income “just over $200 million.”
Balance sheet growth and the Southern States acquisition
Management emphasized that 2025 balance sheet growth was boosted by the acquisition of Southern States Bank, which Mettee said added “approximately 20%” to the company’s size. Holmes said loans held for investment rose 29% year over year and deposits increased 25%.
On an organic basis, Mettee said fourth-quarter loan growth was $86 million and total deposit growth was $97 million, each “roughly 3% on an annualized basis.” He said late-quarter payoffs reduced loan growth by about half, with the payoff activity most pronounced in commercial and industrial and commercial real estate categories. Both Holmes and Mettee stressed that average balances told a stronger story, with Mettee noting annualized 6% loan growth and 7% deposit growth on an average-balance basis for the quarter.
Looking ahead, Mettee said the company expects a “return to our normal high single-digit growth rate in 2026,” and reiterated guidance for mid- to high single-digit loan growth and core customer deposit growth in the same range for full-year 2026. He added that the growth forecast is “not predicated on hiring new people,” but rather on current relationship managers and bankers.
Net interest margin, pricing, and 2026 outlook
Mettee said the fourth-quarter net interest margin of 3.98% represented a three-basis-point increase from the prior quarter. He said margin expanded despite Fed rate cuts and lower loan yields because the company managed the liability side of the balance sheet through deposit repricing and benefits from a third-quarter payoff of subordinated debt and trust preferred securities.
In terms of pricing trends, Mettee said new loan yields were “priced around 6.75%” for the quarter, while new deposit costs were “around 3%.”
For 2026, Mettee guided to a net interest margin (exclusive of loan accretion) between 3.78% and 3.83% for the first quarter and for the full year, “consistent with where we are today,” assuming one rate cut in the forecast. He said loan accretion could add “an additional 15 basis points or so,” excluding any accelerated accretion.
On deposit competition, Mettee acknowledged that bringing in new relationships can involve initially paying above-market deposit costs and that more entrants in the company’s markets could create pricing pressure. He said FB Financial aims to offer customers a “fair value proposition,” noting that deposit costs and loan yields may run a bit higher than some peers as part of a relationship-oriented approach.
Expenses, integration costs, and fee income expectations
Fourth-quarter non-interest expense was $107.6 million, or $100.4 million on an adjusted basis. Mettee said reported results included roughly $4.6 million in merger and integration expenses related to Southern States, which he expects to “largely conclude by the end of the first quarter of 2026.” He also cited items within adjusted expenses including $3 million of performance-based incentive expense and about $1.2 million in higher franchise tax expense. He noted additional costs tied to the share repurchase transaction, technology costs, and professional services, describing about $1.5 million of such items as not run-rate.
Mettee said banking core non-interest expense totaled $88 million for the quarter and $298 million for the year. For 2026, he reiterated guidance for banking expense of $325 million to $335 million, which he said implies an efficiency ratio in the low 50s for the full year and 50% by year-end 2026. He emphasized that the guide is “run rate only” and excludes any incremental investments in revenue producers or market expansion.
On non-interest revenue, Mettee said fourth-quarter non-interest income improved due to stronger swap fees and investment services revenue, along with certain non-recurring items detailed in the company’s supplemental materials. For 2026, he said the company expects fee income to grow in the upper single-digit range as it expands its customer base, adds product offerings, and deepens relationships.
Credit quality and capital actions
Mettee said provision expense was $1.2 million in the quarter, citing low charge-offs and minimal changes in model reserves. Non-performing assets rose slightly, which he attributed to higher past dues in some consumer portfolios and in the optional Ginnie Mae repurchase portfolio, but he said “loss content remains low.” Annualized net charge-offs were five basis points in the quarter, and Mettee described the overall credit outlook as stable. The allowance for loan losses ended at $186 million, or 1.5% of loans held for investment.
On capital deployment, Mettee highlighted a large stock repurchase executed during the quarter. The company repurchased “just over 1.7 million shares,” about 3% of the company, in a transaction with its largest shareholder, the estate of the late Jim Ayers. In response to an analyst question, management said it does not anticipate additional repurchases from the estate based on current conversations.
Executives also discussed mortgage banking and strategic flexibility. Mettee said mortgage had “a really good year,” with contribution improving from negative results in prior periods to “a nice positive number,” and both he and Holmes said the company remains open to ongoing tweaks while expressing optimism about potential outperformance depending on market conditions.
On M&A, Holmes said there are “a lot of conversations going on” across the industry and that FB Financial will continue to evaluate opportunities while prioritizing customer focus and recognizing the operational distraction deals can create. He said the company generally looks across the Southeast and contiguous areas, including the Carolinas and Virginia, and tends to favor banks it does not need to “fix in a significant way,” often targeting institutions “anywhere from a couple of billion in assets” up to “six or seven” billion, with exceptions for smaller opportunities in attractive markets.
About FB Financial (NYSE:FBK)
FB Financial Corporation, through its banking subsidiary FirstBank, is a Tennessee-based bank holding company that provides a broad range of financial services to individuals, small and medium-sized businesses, and commercial clients. Established to serve the banking needs of communities across the southeastern United States, the company’s core offerings include consumer and commercial deposit products, commercial lending, and mortgage services.
In addition to traditional checking and savings accounts, FB Financial’s service portfolio encompasses treasury and cash management, equipment financing, and letters of credit to support the working capital and expansion needs of business customers.