FB Financial NYSE: FBK highlighted first quarter 2026 profitability, building growth momentum, and heightened competitive pressure during its earnings call, while also pointing to a recent customer service accolade as validation of its relationship-driven strategy.
Customer satisfaction award and strategic focus
President and CEO Chris Holmes opened the call by noting that FirstBank received J.D. Power’s Retail Banking Award in the South Central region, ranking No. 1 in overall customer satisfaction as well as in the subcategories of client trust and quality of people. Holmes said the company was not aware its customers were being surveyed, calling the result “independent, tangible verification” of the team’s service model.
Holmes framed the award as aligned with FB Financial’s strategic pillars: “award-winning client experience, high associate engagement, operational efficiency, and elite financial performance.” He added that management is closely monitoring macro events—including geopolitical conflict, technology disruption, economic shocks, and interest rate volatility—while emphasizing what the company can control: capital, liquidity, and reserve levels.
Quarterly results: EPS, PPNR, and profitability trends
Holmes reported EPS of $1.10 and adjusted EPS of $1.12. Net income was $57.5 million, or $58.3 million on an adjusted basis. Pre-tax, pre-provision net revenue (PPNR) was $77.2 million, or $78.2 million adjusted. Holmes said PPNR increased versus the prior quarter despite two fewer days in the quarter, as expenses declined more than revenue.
The company’s PPNR return on average assets was 1.93%, or 1.95% adjusted, which Holmes said was near the company’s benchmark range of around 2%.
Balance sheet momentum, competition, and growth outlook
Chief Operating and Financial Officer Michael Mettee said the year started slower than anticipated, with annualized loan growth of approximately 4% and deposit growth around 5%, but management is seeing “momentum build across the business.” Mettee described a “more intense wave of competitive pressure, particularly around pricing,” and said the company is trying to balance disciplined returns with sustainable growth.
Mettee said March was the strongest month of the quarter, with “upper single-digit loan growth” and a meaningful expansion in the loan pipeline. He added that activity has continued into the second quarter, with some pipeline beginning to convert onto the balance sheet. For the full year, management continues to expect mid- to high-single-digit loan and deposit growth, with growth weighted toward the second half.
In Q&A, Mettee said competitive loan pricing pressure is “generally larger institutions” and described competition across major markets including Nashville, Birmingham, Huntsville, Knoxville, and Memphis. On deposits, he said competition is coming from both large and smaller banks, pointing to aggressive pricing in 12-month CDs and elevated money market rates at some regional banks.
Holmes and Mettee also addressed paydowns and payoffs. Mettee said the company is running roughly $500 million to $600 million in payoffs and amortization per quarter, meaning the bank must generate significant origination volumes to produce net growth. He added that first-quarter payoffs were elevated, similar to the fourth quarter.
On loan mix, Mettee told analysts demand has been more concentrated in operating businesses, reflecting a focus on C&I and owner-occupied transactions. He said some runoff has come from construction and non-owner occupied CRE exposures that grew rapidly earlier in the cycle, though he emphasized the bank remains active in those asset classes.
Net interest margin, rate dynamics, and fee income
FB Financial reported a first-quarter net interest margin (NIM) of 3.94%, which Mettee said declined modestly due to balance sheet mix and the full-quarter impact of rate cuts implemented late in the fourth quarter. Total loan yields were 6.51%, with new production yields near the end of the quarter “a bit closer to 6.6%.” Total deposit costs declined to 2.27%, while rates on new deposit production were approximately 2.7% around quarter end.
Mettee said the company expects additional margin pressure in 2026 due to elevated competition and targeted growth efforts. Based on current conditions, management now expects full-year NIM (excluding loan accretion) of 3.76% to 3.8%, a modest decline from prior guidance. He said second-quarter margin is expected to trend toward the lower end of that range before stabilizing.
In response to questions, Mettee said the company’s updated NIM outlook still assumes a rate cut, consistent with what was discussed earlier in the year. He also noted that the balance sheet is “slightly asset sensitive,” making the timing and magnitude of rate moves a key variable.
Non-interest income declined $2.4 million from the prior quarter, which Mettee attributed primarily to lower secondary mortgage volume and the absence of non-recurring items recognized in the prior quarter, including a higher BOLI benefit payout. He said mortgage activity started strong but slowed as the quarter progressed due to interest rate volatility and heightened uncertainty.
Expenses, credit, capital, and talent
Non-interest expense totaled $95.2 million, an approximate 11% decline from the prior quarter (about 7% lower on an adjusted basis). Mettee said personnel costs moderated as compensation-related accruals normalized, and merger and integration expenses declined as the company completed the majority of costs tied to the Southern States acquisition. The efficiency ratio was 55.2%, or 54.3% adjusted, while the Banking segment posted an adjusted efficiency ratio of 50.9%.
Looking ahead, management reiterated its outlook for Banking segment non-interest expense of $325 million to $335 million for the year, with total company efficiency ratio expected to remain in the low 50% range. In Q&A, management said the expected expense pickup over the year is tied largely to performance-based compensation and growth rather than major technology investments.
On credit, provision expense was approximately $3 million, and the allowance coverage ratio ended the period at 1.49% of loans held for investment. Net charge-offs were modest at an annualized 11 basis points, which Mettee said was driven by “a small number of isolated borrower-specific situations.” He added the allowance analysis considered potential macroeconomic impacts related to conflict in the Middle East and higher energy prices, but said exposure to the most sensitive sectors was minimal.
Capital levels remained strong, with a CET1 ratio of 11.5%, Tier 1 leverage ratio of 10.4%, and total risk-based capital of 13.4%. Mettee said the company was opportunistic in repurchasing shares during periods of market volatility and plans to remain opportunistic.
Management also discussed hiring and recruitment dynamics. Mettee said the company added roughly 15 revenue producers in the first quarter while also losing a few due to retirement and moves to other institutions. He described the environment as “offense and defense” in retaining and recruiting talent, particularly in metropolitan markets.
On longer-term strategy, Holmes said the company intends to maintain its community bank orientation as it scales while exploring selective specialized lines of business. He pointed to adding an SBA line, led by “all-star” hire Lane Rhodes, as a recent example. Holmes also said M&A remains “an arrow in our quiver,” though the company is mindful of distraction and would be selective.
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.
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