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Mortgages, firm margins help FB Financial Q4 profits

JANUARY 23, 2018

Nashville Post

Area Stocks Jan 23, 2018

Mortgages, firm margins help FB Financial Q4 profits

CEO Holmes discusses state of M&A talks

Authors Geert De Lombaerde

The parent company of FirstBank earned $23.0 million in the fourth quarter, more than double its number from late 2016 thanks to the acquisition of two banks and a $5.9 million income tax benefit. Adjusted for those and other one-time factors, core profits at FB Financial rose nearly 80 percent year over year to $18.7 million but were up only slightly from the third quarter.

The downtown-based company’s loan book grew to $3.17 billion, an increase of $52 million from the third quarter, when it acquired Clayton Bank & Trust and American City Bank. Annualized loan growth was nearly 7 percent for the quarter (and 13.9 percent for the year) and the adjusted net interest margin ticked up to 4.35 percent. Total assets ended the quarter at $4.73 billion, up from $4.58 billion at the end of September.

On a conference call with analysts and investors, President and CEO Chris Holmes and CFO James Gordon lauded their mortgage team’s “stellar” fourth quarter and said they expect FB Financial to be able to grow the bank’s loan portfolio by 10 percent to 12 percent in the coming year.

“If it gets to 15 percent, the investment community might look at that as a great thing,” Holmes said. “But we might need to look and say, ‘We need to check our credit standards.’”

Holmes also discussed FB’s M&A strategy, saying his team is in talks with other lenders across Tennessee as well as in the northern halves of Alabama and Georgia and sections of Kentucky, North Carolina and Virginia. Along the wy, he said, FB is finding numerous people Holmes called “price seekers.”

“They’re not really putting it up for sale,” he said. “They’re just looking to see if someone will pay more than it’s worth. We’re seeing a lot of that.”

Shares of FB (Ticker: FBK) were down slightly to $43.63 in morning trading Tuesday. They have climbed more than 25 percent in the past six months.

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