FB Financial (FBK) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $40.0 million, with diluted EPS of $0.85 and adjusted EPS of $0.84; adjusted EPS rose 9% year-over-year and was flat sequentially.

• Net interest margin expanded to 3.57%, up 15 bps sequentially, driving a $3.1 million increase in net interest income from Q1 2024.

• Tangible book value per share (ex-AOCI) grew to $26.82, with a CAGR since IPO of 13.4%.

• Return on average assets was 1.30% (adjusted 1.28%); return on average tangible common equity was 13.1%.

• Balance sheet and capital ratios remain strong, with CET1 at 12.7% and total risk-based capital at 15.1%.

Financial highlights

• Net interest income for Q2 2024 was $102.6 million; noninterest income was $25.6 million, with core noninterest income at $23.8 million.

• Core noninterest expense was $74.1 million; adjusted PPNR earnings were $52.4 million.

• Book value per share increased to $32.17.

• Allowance for credit losses to loans HFI was $155.1 million, or 1.67%.

• Efficiency ratio improved to 58.6% from 64.8% year-over-year; core efficiency ratio was 58.3%.

Outlook and guidance

• Management expects muted loan and deposit growth in the low- to mid-single-digit range for the second half of 2024.

• Targeting a return to 10% organic growth in 2025, supported by new hires and stabilized real estate portfolios.

• Margin expected to settle in the 3.47%-3.53% range for the remainder of the year; net interest income to remain stable or modestly higher.

• Focus on efficiency, scalability, and leveraging capital strength for organic growth, acquisitions, and share repurchases.

• Mortgage segment faces ongoing margin and volume pressure due to rate environment and industry overcapacity.