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Why the Motley Fool says this Nashville bank’s stock is one of the country’s best

DECEMBER 22, 2017

Dec 22, 2017, 11:27am CST

Meg Garner | Nashville Business Journal

Nashville-based FirstBank is the country’s highest-performing bank stock, at least on one metric.

This week financial investing site The Motley Fool ranked the nation’s top four bank stocks based on their year-to-date total return, with the $4.6 billion lender’s stock — which only went public in September 2016 — topping the list with a 65.1 percent year-to-date total return.

Here’s a snippet of what The Motley Fool said about FirstBank:

For starters, check out these numbers. FB Financial generates a return on assets of 1.62% and a return on equity of 13%, both of which handily surpass the industry’s benchmarks of 1% and 10%, respectively. Not only are these numbers impressive, but they also have improved significantly in recent years.

Finally, the bank has done a great job of improving its efficiency. Since the end of 2015, FB Financial’s efficiency ratio has fallen from 73.1% to 68.8%. If all of these trends continue (growth, profitability and efficiency), there could be more good times ahead for FB Financial shareholders.

It’s been a big year for FirstBank after the company snapped up a pair of banks from billionaire Jim Clayton — Knoxville’s Clayton Bank and Trust and Tullahoma’s American City Bank — for $284.2 million. The deal cemented FirstBank’s status as the state’s third-largest homegrown lender and filled in geographic gaps in the bank’s footprint.

To be sure, there are several ways to measure a company’s performance on the stock market. One commonly referred to metric is a stock price’s price-to-earnings ratio, which shows how a company’s current share price is relative to its current earnings per share.

FirstBank, which trades under the name FB Financial Corp. (NYSE: FBK), still excels on that mark, with a price-to-earnings ratio of 30.07.

By comparison, Pinnacle Financial Partners (Nasdaq: PNFP) the city’s largest locally based lender, has a ratio of 20.84. Williamson County-based Franklin Synergy Bank, which trades under its holding company Franklin Financial Network Inc. (NYSE: FSB), has a ratio of 14.19. Nashville-based CapStar Financial Holdings (Nasdaq: CSTR)currently has a ratio of 65.48.


Best Places to Work

FirstBank has been named as one of Middle Tennessee’s Top Workplaces by The Tennessean for four years running, winning the 2018 Hall of Fame award. To be a Top Workplace, FirstBank met high standards for a healthy workplace culture as ranked by its own employees.


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