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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________
FORM 10-Q
______________________________________________________________
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number 001-37875
_____________________________________________________________
FB FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
______________________________________________________________
Tennessee62-1216058
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
1221 Broadway, Suite 1300
Nashville, Tennessee
37203
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (615) 564-1212
___________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s)  Name of each exchange on which registered 
Common Stock, Par Value $1.00 Per Share FBK  New York Stock Exchange 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒  Accelerated filer ☐
Non-accelerated filer ☐  Small reporting company ☐
Emerging growth company ☐    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares of registrant’s Common Stock outstanding as of April 30, 2024 was 46,987,655.

1

Table of Contents
Page
PART I.
Item 1.
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.


2

PART I
GLOSSARY OF ABBREVIATIONS AND ACRONYMS
As used in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, references to “we,” “our,” “us,” “FB Financial,” or “the Company” refer to FB Financial Corporation, a Tennessee corporation, and our wholly-owned banking subsidiary, FirstBank, a Tennessee state-chartered bank, unless otherwise indicated or the context otherwise requires. References to “Bank” or “FirstBank” refer to FirstBank, our wholly-owned banking subsidiary.
The acronyms and abbreviations identified below are used in the Notes to the consolidated financial statements (unaudited) as well as in the Management’s discussion and analysis of financial condition and results of operations. You may find it helpful to refer to this page as you read this Report.


ACLAllowance for credit lossesFHLBFederal Home Loan Bank
AFSAvailable-for-saleGAAPU.S. generally accepted accounting principles
ALCOAsset Liability Management CommitteeGDPGross domestic product
ASCAccounting Standard CodificationGNMAGovernment National Mortgage Association
ASUAccounting Standard UpdateHFIHeld for investment
BankFirstBank, subsidiary bankHFSHeld for sale
CDCertificate of DepositNIMNet interest margin
CECLCurrent expected credit lossesOREOOther real estate owned
CompanyFB Financial CorporationPSUPerformance-based restricted stock units
CPRConditional prepayment rateReportForm 10-Q for the quarterly period ended March 31, 2024
CRECommercial real estateROAAReturn on average assets
EPSEarnings per shareROAEReturn on average common equity
ESPPEmployee Stock Purchase PlanROATCEReturn on average tangible common equity
EVEEconomic value of equityRSURestricted stock units
FASBFinancial Accounting Standards BoardSECU.S. Securities and Exchange Commission
FDICFederal Deposit Insurance CorporationSOFRSecured overnight financing rate
FDMFinancial Difficulty ModificationTDFITennessee Department of Financial Institutions
Federal ReserveBoard of Governors of the Federal Reserve
   System
3

FB Financial Corporation and subsidiaries
Consolidated balance sheets
(Amounts are in thousands except share and per share amounts) 

 March 31,December 31,
 2024 (Unaudited)2023 
ASSETS  
Cash and due from banks$124,772 $146,542 
Federal funds sold and reverse repurchase agreements
100,785 83,324 
Interest-bearing deposits in financial institutions645,173 581,066 
Cash and cash equivalents870,730 810,932 
Investments:
Available-for-sale debt securities, at fair value1,464,682 1,471,973 
Federal Home Loan Bank stock, at cost33,948 34,190 
Loans held for sale (includes $61,828 and $46,618 at fair value, respectively)
82,704 67,847 
Loans held for investment9,288,909 9,408,783 
Less: allowance for credit losses on loans HFI151,667 150,326 
Net loans held for investment9,137,242 9,258,457 
Premises and equipment, net155,271 155,731 
Operating lease right-of-use assets51,421 54,295 
Interest receivable53,506 52,715 
Mortgage servicing rights, at fair value165,674 164,249 
Bank-owned life insurance76,574 76,143 
Other real estate owned, net3,613 3,192 
Goodwill242,561 242,561 
Core deposit and other intangibles, net7,920 8,709 
Other assets202,474 203,409 
Total assets$12,548,320 $12,604,403 
LIABILITIES
Deposits
Noninterest-bearing$2,182,121 $2,218,382 
Interest-bearing checking2,421,487 2,504,421 
Money market and savings4,298,938 4,204,851 
Customer time deposits1,471,190 1,469,811 
Brokered and internet time deposits131,192 150,822 
Total deposits10,504,928 10,548,287 
Borrowings360,821 390,964 
Operating lease liabilities64,562 67,643 
Accrued expenses and other liabilities138,390 142,622 
Total liabilities11,068,701 11,149,516 
SHAREHOLDERS' EQUITY
Common stock, $1 par value per share; 75,000,000 shares authorized;
    46,897,378 and 46,848,934 shares issued and outstanding, respectively
46,897 46,849 
Additional paid-in capital866,803 864,258 
Retained earnings698,310 678,412 
Accumulated other comprehensive loss, net(132,484)(134,725)
Total FB Financial Corporation common shareholders' equity1,479,526 1,454,794 
Noncontrolling interest93 93 
Total equity1,479,619 1,454,887 
Total liabilities and shareholders' equity$12,548,320 $12,604,403 
See the accompanying notes to the consolidated financial statements.
4

FB Financial Corporation and subsidiaries
Consolidated statements of income
(Unaudited)
(Amounts are in thousands, except per share amounts)

5
 Three Months Ended March 31,
 2024 2023 
Interest income:  
Interest and fees on loans$155,606 $140,356 
Interest on investment securities
Taxable9,105 6,570 
Tax-exempt1,442 1,804 
Other9,975 10,750 
Total interest income176,128 159,480 
Interest expense:
Deposits72,625 52,863 
Borrowings4,013 2,957 
Total interest expense76,638 55,820 
Net interest income99,490 103,660 
Provision for credit losses on loans HFI1,852 4,997 
Reversal of credit losses on unfunded commitments(1,070)(4,506)
Net interest income after provision for credit losses98,708 103,169 
Noninterest income:
Mortgage banking income12,585 12,086 
Service charges on deposit accounts3,141 3,053 
Investment services and trust income3,230 2,378 
ATM and interchange fees2,944 2,396 
(Loss) gain from investment securities, net(16,213)69 
Gain (loss) on sales or write-downs of other real estate owned and other assets565 (183)
Other income1,710 3,550 
Total noninterest income7,962 23,349 
Noninterest expenses:
Salaries, commissions and employee benefits44,618 48,788 
Occupancy and equipment expense6,614 5,909 
Data processing 2,408 2,113 
Legal and professional fees1,919 3,108 
Advertising1,171 2,133 
Amortization of core deposit and other intangibles789 990 
Other expense14,901 17,399 
Total noninterest expense72,420 80,440 
Income before income taxes34,250 46,078 
Income tax expense6,300 9,697 
Net income applicable to FB Financial Corporation and noncontrolling interest27,950 36,381 
Net income applicable to noncontrolling interest— — 
Net income applicable to FB Financial Corporation$27,950 $36,381 
Earnings per common share:
Basic$0.60 $0.78 
Diluted0.59 0.78 
See the accompanying notes to the consolidated financial statements.
5

FB Financial Corporation and subsidiaries
Consolidated statements of comprehensive income
(Unaudited)
(Amounts are in thousands)

 Three Months Ended March 31,
 2024 2023 
Net income$27,950 $36,381 
Other comprehensive income, net of tax:
   Net unrealized (loss) gain in available-for-sale securities, net of tax (benefit) expense
      of $(3,432) and $7,059
(9,573)20,064 
   Reclassification adjustment for loss on sale of securities included in net
      income, net of tax benefit of $4,225 and $—
11,988 — 
   Net unrealized loss in hedging activities, net of tax benefit
      of $62 and $70
(174)(197)
         Total other comprehensive income, net of tax2,241 19,867 
Comprehensive income applicable to FB Financial Corporation
    and noncontrolling interest 		30,191 56,248 
Comprehensive income applicable to noncontrolling interest— — 
Comprehensive income applicable to FB Financial Corporation$30,191 $56,248 
See the accompanying notes to the consolidated financial statements.
6

FB Financial Corporation and subsidiaries
Consolidated statements of changes in shareholders’ equity
(Unaudited)
(Amounts are in thousands except per share amounts)


Common
stock		Additional
paid-in
capital		Retained
earnings		Accumulated
other
comprehensive
loss, net		Total common
shareholders' equity		Noncontrolling interestTotal shareholders' equity
Balance at December 31, 2022:$46,738 $861,588 $586,532 $(169,433)$1,325,425 $93 $1,325,518 
Net income attributable to FB Financial
Corporation and noncontrolling interest		— — 36,381 — 36,381 — 36,381 
  Other comprehensive income, net of
taxes		— — — 19,867 19,867 — 19,867 
  Repurchase of common stock(136)(4,808)— — (4,944)— (4,944)
  Stock based compensation expense1 2,284 — — 2,285 — 2,285 
Restricted stock units vested, net of
taxes		92 (1,544)— — (1,452)— (1,452)
Performance-based restricted stock
units vested, net of taxes		60 (1,205)— — (1,145)— (1,145)
   Shares issued under employee stock
purchase program		8 313 — — 321 — 321 
   Dividends declared and paid ($0.15 per
      share)
— — (7,042)— (7,042)— (7,042)
Balance at March 31, 2023:$46,763 $856,628 $615,871 $(149,566)$1,369,696 $93 $1,369,789 
Balance at December 31, 2023:$46,849 $864,258 $678,412 $(134,725)$1,454,794 $93 $1,454,887 
Net income attributable to FB Financial
Corporation and noncontrolling interest		— — 27,950 — 27,950 — 27,950 
Other comprehensive income, net of
taxes		— — — 2,241 2,241 — 2,241 
Stock based compensation expense1 2,819 — — 2,820 — 2,820 
Restricted stock units vested, net of
taxes		11 (292)— — (281)— (281)
Performance-based restricted stock
units vested, net of taxes		25 (370)— — (345)— (345)
Shares issued under employee stock
purchase program		11 388 — — 399 — 399 
Dividends declared and paid ($0.17 per
   share)
— — (8,052)— (8,052)— (8,052)
Balance at March 31, 2024$46,897 $866,803 $698,310 $(132,484)$1,479,526 $93 $1,479,619 
See the accompanying notes to the consolidated financial statements.

7
FB Financial Corporation and subsidiaries
Consolidated statements of cash flows
(Unaudited)
(Amounts are in thousands)
Three Months Ended March 31,
2024 2023 
Cash flows from operating activities:
Net income applicable to FB Financial Corporation and noncontrolling interest$27,950 $36,381 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of fixed assets and software2,841 2,228 
Amortization of core deposit and other intangibles789 990 
Amortization of issuance costs on subordinated debt 96 97 
Capitalization of mortgage servicing rights(1,131)(1,788)
Net change in fair value of mortgage servicing rights(294)5,274 
Stock-based compensation expense2,820 2,285 
Provision for credit losses on loans HFI1,852 4,997 
Reversal of credit losses on unfunded commitments(1,070)(4,506)
Provision for mortgage loan repurchases50 (250)
Accretion of discounts and premiums on acquired loans, net(387)(319)
Amortization of premiums and discounts on securities, net1,356 1,382 
Loss (gain) from investment securities, net16,213 (69)
Originations of loans held for sale(258,352)(295,760)
Proceeds from sale of loans held for sale251,548 340,108 
Gain on sale and change in fair value of loans held for sale(8,279)(8,635)
Net (gain) loss on write-downs of other real estate owned and other assets(565)183 
Provision for deferred income taxes207 1,396 
Earnings on bank-owned life insurance(431)(605)
Changes in:
Operating lease assets and liabilities, net(207)580 
Other assets and interest receivable(665)62,512 
Accrued expenses and other liabilities1,927 (48,099)
Net cash provided by operating activities36,268 98,382 
Cash flows from investing activities:
Activity in available-for-sale securities:
Sales207,882 — 
Maturities, prepayments and calls66,627 26,827 
Purchases(281,579)(660)
Net change in loans117,904 (52,540)
Proceeds from sales of FHLB stock, net242 15,272 
Purchases of premises and equipment(1,620)(9,450)
Proceeds from the sale of premises and equipment137 — 
Proceeds from the sale of other real estate owned 389 2,031 
Proceeds from the sale of other assets161 — 
Proceeds from bank-owned life insurance— 236 
Net cash provided by (used in) investing activities110,143 (18,284)
Cash flows from financing activities:
Net (decrease) increase in deposits(47,856)325,965 
Net decrease in securities sold under agreements to repurchase and federal funds
   purchased		(30,535)(48,815)
Net decrease in short-term FHLB advances — (50,000)
Share based compensation withholding payments(626)(2,597)
Net proceeds from sale of common stock under employee stock purchase program399 321 
Repurchase of common stock— (4,944)
Dividends paid on common stock(7,965)(6,994)
Dividend equivalent payments made upon vesting of equity compensation(30)(135)
Net cash (used in) provided by financing activities(86,613)212,801 
Net change in cash and cash equivalents59,798 292,899 
Cash and cash equivalents at beginning of the period810,932 1,027,052 
Cash and cash equivalents at end of the period$870,730 $1,319,951 
8
FB Financial Corporation and subsidiaries
Consolidated statements of cash flows (continued)
(Unaudited)
(Amounts are in thousands)
Three Months Ended March 31,
2024 2023 
Supplemental cash flow information:
Interest paid$74,943 $52,634 
Taxes paid (refunded), net277 (904)
Supplemental noncash disclosures:
Transfers from loans to other real estate owned$753 $235 
Transfers from loans to other assets1,031 — 
Transfers from loans to loans held for sale167 7,126 
Transfers from loans held for sale to loans40 776 
Loans provided for sales of other assets65 — 
Decrease in rebooked GNMA loans under optional repurchase program(353)(5,683)
Trade date payable - securities— 245 
Dividends declared not paid on restricted stock units87 48 
Right-of-use assets obtained in exchange for operating lease liabilities— 3,375 
See the accompanying notes to the consolidated financial statements.

9
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)

Note (1)—Basis of presentation
Overview and presentation
FB Financial Corporation (the "Company") is a financial holding company headquartered in Nashville, Tennessee. The Company operates primarily through its wholly-owned subsidiary bank, FirstBank (the "Bank") and its subsidiaries. As of March 31, 2024, the Bank had 76 full-service branches throughout Tennessee, Alabama, Kentucky and North Georgia, and a mortgage business with office locations across the Southeast, which primarily originates loans to be sold to third party private investors or government sponsored agencies in the secondary market.
The unaudited consolidated financial statements, including the notes thereto, have been prepared in accordance with U.S. GAAP interim reporting requirements and general banking industry guidelines, and therefore, do not include all information and notes included in the annual consolidated financial statements in conformity with GAAP. These interim consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K.
The unaudited consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results for interim periods are not necessarily indicative of results for a full year.
In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported results of operations for the reporting periods and the related disclosures. Although management's estimates contemplate current conditions and how they are expected to change in the future, it is reasonably possible that actual conditions could vary from those anticipated, which could cause the Company's financial condition and results of operations to vary significantly from those estimates.
Certain prior period amounts have been reclassified to conform to the current period presentation without any impact on the reported amounts of net income or shareholders’ equity.
Earnings per share
Basic EPS excludes dilution and is computed by dividing earnings attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS includes the dilutive effect of additional potential common shares issuable under the restricted stock units granted but not yet vested and distributable. Diluted EPS is computed by dividing earnings attributable to common shareholders by the weighted average number of common shares outstanding for the year, plus an incremental number of common-equivalent shares computed using the treasury stock method.
Certain restricted stock awards granted by the Company include non-forfeitable dividend equivalent rights and are considered participating securities for the purposes of computing EPS. Accordingly, the Company is required to calculate basic and diluted EPS using the two-class method. Calculations of EPS under the two-class method (i) exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities and (ii) exclude from the denominator the dilutive impact of the participating securities.
10
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following is a summary of the basic and diluted earnings per common share calculations for each of the periods presented:
 Three Months Ended March 31,
 20242023
Basic earnings per common share:
Net income applicable to FB Financial Corporation$27,950 $36,381 
Dividends paid on and undistributed earnings allocated to participating securities— — 
Earnings available to common shareholders$27,950 $36,381 
Weighted average basic shares outstanding46,874,882 46,679,618 
Basic earnings per common share$0.60 $0.78 
Diluted earnings per common share:
Earnings available to common shareholders$27,950 $36,381 
Weighted average basic shares outstanding46,874,882 46,679,618 
Weighted average diluted shares contingently issuable(1)
123,991 85,536 
Weighted average diluted shares outstanding46,998,873 46,765,154 
Diluted earnings per common share$0.59 $0.78 
(1) Excludes 2,949 and 159,946 restricted stock units outstanding considered to be antidilutive for the three months ended March 31, 2024 and 2023, respectively.
Recently adopted accounting standards:
In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.” The FASB issued this update to clarify the guidance in ASC 820, “Fair Value Measurement,” when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, to amend a related illustrative example, and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The Company adopted this update effective January 1, 2024. The adoption did not have an impact on the Company's consolidated financial statements or related disclosures.
In March 2023, the FASB issued ASU 2023-01, “Leases (Topic 842): Common Control Arrangements” as part of the Post-Implementation Review process of ASC 842, “Leases,” around related party arrangements between entities under common control. Under previous guidance, a lessee is generally required to amortize leasehold improvements that it owns over the shorter of the useful life of those improvements or the lease term. However, due to the nature of leasehold improvements made under leases between entities under common control, ASU 2023-01 requires a lessee in a common-control arrangement to amortize such leasehold improvements that it owns over the improvements' useful life to the common control group, regardless of the lease term. The Company adopted this standard on January 1, 2024 on a prospective basis. The adoption of this standard did not have a material impact on the Company's consolidated financial statements or related disclosures.
Additionally, in March 2023, the FASB issued ASU 2023-02, “Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” The amendments in this update permit reporting entities to elect to account for tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. The Company adopted this standard effective January 1, 2024. The adoption of this accounting pronouncement did not have an impact on the Company's historical consolidated financial statements but could influence the Company's decisions with respect to investments in certain tax credits prospectively.
Newly issued not yet effective accounting standards:
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The amendments in this update are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The ASU requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker, a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the chief operating decision maker when deciding how to allocate resources. The ASU also requires all annual disclosures currently required by Topic 280, “Segment Reporting,” to be included in interim periods. This update is effective for fiscal years
11
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and retrospective application is required for all periods presented. The Company is evaluating the impact this will have on the Company's consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-08, “Intangibles – Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets.” This update requires entities to present crypto assets measured at fair value separately from other intangible assets on the balance sheet and reflect changes from remeasurement in the net income. Additionally, an entity that receives crypto assets as noncash consideration in the ordinary course of business and converts them nearly immediately into cash is required to classify those cash receipts as cash flows from operating activities. Lastly, the update requires entities to provide interim and annual disclosures about the types of crypto assets they hold and any changes in their holdings of crypto assets. While the Company does not currently hold or facilitate transactions with crypto assets, the Company is evaluating the potential future financial statement and disclosure impact from adopting this guidance when it becomes applicable based on the Company's crypto asset activities.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The amendments in this update enhance the transparency and decision usefulness of income tax disclosures. This ASU requires disclosures of specific categories and disaggregation of information in the rate reconciliation table. The ASU also requires disclosure of disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. The requirements of the ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted and the amendments should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the effect that ASU 2023-09 will have on its disclosures.
Subsequent events
The Company has evaluated, for consideration of recognition or disclosure, subsequent events that occurred through the date of issuance of these financial statements. The Company has determined that there were no subsequent events that occurred after March 31, 2024, but prior to the issuance of these financial statements that would have a material impact on the Company’s consolidated financial statements.
12
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (2)—Investment securities
The following tables summarize the amortized cost, allowance for credit losses and fair value of the AFS debt securities and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive loss at March 31, 2024 and December 31, 2023:  
March 31, 2024
 Amortized cost Gross unrealized gains Gross unrealized losses Allowance for credit losses for investments Fair Value
Investment Securities    
AFS debt securities  
U.S. government agency securities$416,953 $145 $(1,171)$— $415,927 
Mortgage-backed securities - residential984,473 — (158,259)— 826,214 
Mortgage-backed securities - commercial 17,899 — (1,284)— 16,615 
Municipal securities194,470 45 (22,843)— 171,672 
U.S. Treasury securities30,985 — (128)— 30,857 
Corporate securities3,500 — (103)— 3,397 
Total$1,648,280 $190 $(183,788)$— $1,464,682 
December 31, 2023
 Amortized costGross unrealized gains Gross unrealized losses Allowance for credit losses for investmentsFair Value
Investment Securities    
AFS debt securities    
U.S. government agency securities$204,663 $470 $(1,177)$— $203,956 
Mortgage-backed securities - residential1,057,389 — (160,418)— 896,971 
Mortgage-backed securities - commercial18,186 — (1,225)— 16,961 
Municipal securities263,312 370 (21,419)— 242,263 
U.S. Treasury securities111,729 — (3,233)— 108,496 
Corporate securities3,500 — (174)— 3,326 
Total$1,658,779 $840 $(187,646)$— $1,471,973 
The components of amortized cost for AFS debt securities on the consolidated balance sheets excludes accrued interest receivable since the Company elected to present accrued interest receivable separately on the consolidated balance sheets. As of March 31, 2024 and December 31, 2023, total accrued interest receivable on AFS debt securities was $5,409 and $7,212, respectively.
Securities pledged at March 31, 2024 and December 31, 2023 had carrying amounts of $949,958 and $929,546, respectively, and were pledged to secure a Federal Reserve Bank line of credit, Bank Term Funding Program borrowings, public deposits and repurchase agreements.
There were no holdings of AFS debt securities of any one issuer, other than U.S. Government sponsored enterprises, in an amount greater than 10% of shareholders' equity during any period presented.
Investment securities transactions are recorded as of the trade date. At March 31, 2024 and December 31, 2023, there were no trade date receivables nor payables that related to sales or purchases settled after period end.
13
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following tables show gross unrealized losses for which an allowance for credit losses has not been recorded at March 31, 2024 and December 31, 2023, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
March 31, 2024
 Less than 12 months12 months or moreTotal
 Fair ValueGross Unrealized Loss Fair ValueGross Unrealized LossFair ValueGross Unrealized Loss
U.S. government agency securities$203,870 $(484)$7,251 $(687)$211,121 $(1,171)
Mortgage-backed securities - residential— — 776,208 (158,259)776,208 (158,259)
Mortgage-backed securities - commercial— — 16,615 (1,284)16,615 (1,284)
Municipal securities9,131 (41)155,959 (22,802)165,090 (22,843)
U.S. Treasury securities— — 30,857 (128)30,857 (128)
Corporate securities— — 3,397 (103)3,397 (103)
Total$213,001 $(525)$990,287 $(183,263)$1,203,288 $(183,788)
 December 31, 2023
 Less than 12 months12 months or moreTotal
 Fair ValueGross Unrealized LossFair ValueGross Unrealized LossFair ValueGross Unrealized Loss
U.S. government agency securities$25,923 $(21)$14,040 $(1,156)$39,963 $(1,177)
Mortgage-backed securities - residential— — 896,971 (160,418)896,971 (160,418)
Mortgage-backed securities - commercial— — 16,961 (1,225)16,961 (1,225)
Municipal securities14,480 (148)188,669 (21,271)203,149 (21,419)
U.S. Treasury securities— — 108,496 (3,233)108,496 (3,233)
Corporate securities— — 3,326 (174)3,326 (174)
Total$40,403 $(169)$1,228,463 $(187,477)$1,268,866 $(187,646)
As of March 31, 2024 and December 31, 2023, the Company’s AFS debt securities portfolio consisted of 340 and 439 securities, 316 and 370 of which were in an unrealized loss position, respectively.
The majority of the investment portfolio was either government guaranteed, an issuance of a government sponsored entity or highly rated by major credit rating agencies, and the Company has historically not recorded any credit losses associated with these investments. Municipal securities with market values below amortized cost at March 31, 2024 were reviewed for material credit events and/or rating downgrades with individual credit reviews performed. The issuers of these AFS debt securities continue to make timely principal and interest payments under the contractual terms of the securities and the issuers will continue to be observed as a part of the Company’s ongoing credit monitoring. As such, as of March 31, 2024 and December 31, 2023, it was determined that all AFS debt securities that experienced a decline in fair value below amortized cost basis were due to noncredit-related factors. Further, it is not likely that the Company will be required to sell these securities before recovery of their amortized cost basis. Therefore, there was no allowance for credit losses recognized on AFS debt securities as of March 31, 2024 or December 31, 2023. Periodically, AFS debt securities may be sold or the composition of the portfolio realigned to improve yields, quality or marketability, or to implement changes in investment or asset/liability strategy, including maintaining collateral requirements and raising funds for liquidity purposes or preparing for anticipated changes in market interest rates.
14
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The amortized cost and fair value of AFS debt securities by contractual maturity as of March 31, 2024 and December 31, 2023 are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
March 31,December 31,
 2024 2023 
 Available-for-saleAvailable-for-sale
 Amortized costFair valueAmortized costFair value
Due in one year or less$34,073 $33,910 $64,776 $64,279 
Due in one to five years10,851 10,080 75,996 71,801 
Due in five to ten years40,939 39,932 51,162 49,630 
Due in over ten years560,045 537,931 391,270 372,331 
645,908 621,853 583,204 558,041 
Mortgage-backed securities - residential984,473 826,214 1,057,389 896,971 
Mortgage-backed securities - commercial17,899 16,615 18,186 16,961 
Total AFS debt securities$1,648,280 $1,464,682 $1,658,779 $1,471,973 
Sales and other dispositions of AFS debt securities were as follows:
 Three Months Ended March 31,
 2024 2023 
Proceeds from sales$207,882 $— 
Proceeds from maturities, prepayments and calls66,627 26,827 
Gross realized gains90 — 
Gross realized losses16,303 — 
Equity Securities
The Company had equity securities without readily determinable market value included in other assets on the consolidated balance sheets with carrying amounts of $25,589 and $25,191 at March 31, 2024 and December 31, 2023, respectively. Additionally, the Company had $33,948 and $34,190 of FHLB stock carried at cost at March 31, 2024 and December 31, 2023, respectively, included separately from the other equity securities discussed above.

15
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (3)—Loans and allowance for credit losses on loans HFI
Loans outstanding as of March 31, 2024 and December 31, 2023, by class of financing receivable are as follows:
 March 31,December 31,
 2024 2023 
Commercial and industrial$1,621,611 $1,720,733 
Construction1,268,883 1,397,313 
Residential real estate:
1-to-4 family mortgage1,577,824 1,568,552 
Residential line of credit549,306 530,912 
Multi-family mortgage615,081 603,804 
Commercial real estate:
Owner-occupied1,236,007 1,232,071 
Non-owner occupied1,991,526 1,943,525 
Consumer and other428,671 411,873 
Gross loans9,288,909 9,408,783 
Less: Allowance for credit losses on loans HFI(151,667)(150,326)
Net loans$9,137,242 $9,258,457 
As of March 31, 2024 and December 31, 2023, $950,787 and $1,030,016, respectively, of qualifying residential mortgage loans (including loans held for sale) and $1,563,819 and $1,984,007, respectively, of qualifying commercial mortgage loans were pledged to the FHLB system securing advances against the Bank’s line of credit. Additionally, as of March 31, 2024 and December 31, 2023, qualifying commercial and industrial, construction and consumer loans, of $2,982,391 and $3,107,495, respectively, were pledged to the Federal Reserve under the Borrower-in-Custody program.
The amortized cost of loans HFI on the consolidated balance sheets exclude accrued interest receivable as the Company presents accrued interest receivable separately on the balance sheet. As of March 31, 2024 and December 31, 2023, accrued interest receivable on loans HFI amounted to $45,840 and $43,776, respectively.
Credit Quality - Commercial Type Loans
The Company categorizes commercial loan types into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans that share similar risk characteristics collectively. Loans that do not share similar risk characteristics are evaluated individually.
The Company uses the following definitions for risk ratings:
Pass.
Loans rated Pass include those that are adequately collateralized performing loans which management believes do not have conditions that have occurred or may occur that would result in the loan being downgraded into an inferior category. The Pass category also includes commercial loans rated as Watch, which include those that management believes have conditions that have occurred, or may occur, which could result in the loan being downgraded to an inferior category.

Special Mention.
Loans rated Special Mention are those that have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position at some future date. Management does not believe there will be a loss of principal or interest. These loans require intensive servicing and may possess more than normal credit risk.
Classified.
Loans included in the Classified category include loans rated as Substandard and Doubtful. Loans rated as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful loans have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weakness or weaknesses make collection or liquidation in full, based on currently existing facts, conditions, and values, highly questionable and improbable.
Risk ratings are updated on an ongoing basis and are subject to change by continuous loan monitoring processes.

16
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following tables present the credit quality of the Company's commercial type loan portfolio as of March 31, 2024 and December 31, 2023 and the gross charge-offs for the three months ended March 31, 2024 and the year ended December 31, 2023 by year of origination. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination.

As of and for the three months
    ended March 31, 2024
2024 2023 2022 2021 2020 PriorRevolving Loans Amortized Cost BasisTotal
Commercial and industrial
Pass$16,449 $202,050 $237,139 $72,725 $36,876 $129,057 $864,065 $1,558,361 
Special Mention— 3,675 17,572 2,913 — 247 4,521 28,928 
Classified— 457 4,328 3,017 2,987 6,350 17,183 34,322 
Total16,449 206,182 259,039 78,655 39,863 135,654 885,769 1,621,611 
            Current-period gross
               charge-offs		— — — 14 — 7 22 43 
Construction
Pass39,360 193,203 551,909 124,878 36,531 86,713 187,955 1,220,549 
Special Mention— 711 4,689 2,508 — 657 12,000 20,565 
Classified— — 3,986 2,590 6,877 — 14,316 27,769 
Total39,360 193,914 560,584 129,976 43,408 87,370 214,271 1,268,883 
            Current-period gross
               charge-offs		— — — — — — 92 92 
Residential real estate:
Multi-family mortgage
Pass— 29,861 193,591 244,770 54,744 68,104 22,953 614,023 
Special Mention— — — — — — — — 
Classified— — — — — 1,058 — 1,058 
Total— 29,861 193,591 244,770 54,744 69,162 22,953 615,081 
             Current-period gross
                charge-offs		— — — — — — — — 
Commercial real estate:
Owner occupied
Pass24,636 112,168 253,377 231,354 113,481 428,182 53,516 1,216,714 
Special Mention— — 1,283 1,811 — 2,547 — 5,641 
Classified— — 6,281 16 65 6,228 1,062 13,652 
Total24,636 112,168 260,941 233,181 113,546 436,957 54,578 1,236,007 
            Current-period gross
              charge-offs		— — — — — — — — 
Non-owner occupied
Pass3,755 45,516 533,649 468,553 122,699 750,943 43,090 1,968,205 
Special Mention— — — 3,966 — 83 — 4,049 
Classified— — — 998 — 18,274 — 19,272 
Total3,755 45,516 533,649 473,517 122,699 769,300 43,090 1,991,526 
             Current-period gross
                charge-offs		— — — — — — — — 
Total commercial loan types
Pass84,200 582,798 1,769,665 1,142,280 364,331 1,462,999 1,171,579 6,577,852 
Special Mention— 4,386 23,544 11,198 — 3,534 16,521 59,183 
Classified— 457 14,595 6,621 9,929 31,910 32,561 96,073 
Total$84,200 $587,641 $1,807,804 $1,160,099 $374,260 $1,498,443 $1,220,661 $6,733,108 
            Current-period gross
                charge-offs		$— $— $— $14 $— $7 $114 $135 
17
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
As of and for the year ended
  December 31, 2023 		2023 2022 2021 2020 2019 PriorRevolving Loans Amortized Cost BasisTotal
Commercial and industrial
Pass$225,734 $255,921 $151,492 $39,897 $70,302 $73,415 $839,918 $1,656,679 
Special Mention— 17,947 3,083 — 151 108 7,549 28,838 
Classified457 4,253 3,075 3,027 254 6,129 18,021 35,216 
Total226,191 278,121 157,650 42,924 70,707 79,652 865,488 1,720,733 
              Current-period gross
                 charge-offs		14 7 201 22 — 87 131 462 
Construction
Pass179,929 677,387 148,312 46,697 39,140 49,954 208,491 1,349,910 
Special Mention1 4,659 2,943 1,202 — 690 12,000 21,495 
Classified— 2,349 1,484 6,620 — — 15,455 25,908 
Total179,930 684,395 152,739 54,519 39,140 50,644 235,946 1,397,313 
              Current-period gross
                  charge-offs		— — — — — — — — 
Residential real estate:
Multi-family mortgage
Pass29,982 151,495 223,889 92,745 29,933 43,479 31,209 602,732 
Special Mention— — — — — — — — 
Classified— — — — — 1,072 — 1,072 
Total29,982 151,495 223,889 92,745 29,933 44,551 31,209 603,804 
             Current-period gross
                 charge-offs		— — — — — — — — 
Commercial real estate:
Owner occupied
Pass118,030 261,196 231,241 115,397 151,146 281,253 53,970 1,212,233 
Special Mention— 1,297 1,827 — 154 2,617 — 5,895 
Classified— 6,305 16 — 760 5,789 1,073 13,943 
Total118,030 268,798 233,084 115,397 152,060 289,659 55,043 1,232,071 
              Current-period gross
                  charge-offs		— — 144 — — — — 144 
Non-owner occupied
Pass47,026 474,560 478,878 117,429 178,448 580,16843,577 1,920,086 
Special Mention— — 3,975 — — 10,435— 14,410 
Classified— — 1,001 — 381 7,647— 9,029 
Total47,026 474,560 483,854 117,429 178,829 598,250 43,577 1,943,525 
               Current-period gross
                   charge-offs		— — — — — — — — 
Total commercial loan types
Pass600,701 1,820,559 1,233,812 412,165 468,969 1,028,269 1,177,165 6,741,640 
Special Mention1 23,903 11,828 1,202 305 13,850 19,549 70,638 
Classified457 12,907 5,576 9,647 1,395 20,637 34,549 85,168 
Total$601,159 $1,857,369 $1,251,216 $423,014 $470,669 $1,062,756 $1,231,263 $6,897,446 
              Current-period gross
                  charge-offs		14 7 345 22 — 87 131 606 







18
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Credit Quality - Consumer Type Loans
For consumer and residential loan classes, the Company primarily evaluates credit quality based on delinquency and accrual status of the loan, credit documentation and by payment activity. The performing or nonperforming status is updated on an on-going basis dependent upon improvement and deterioration in credit quality.
The following tables present the credit quality by classification (performing or nonperforming) of the Company's consumer type loan portfolio as of March 31, 2024 and December 31, 2023 and the gross charge-offs for the three months ended March 31, 2024 and the year ended December 31, 2023 by year of origination. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination.
As of and for the three months
     ended March 31, 2024
2024 2023 2022 2021 2020 PriorRevolving Loans Amortized Cost BasisTotal
Residential real estate:
1-to-4 family mortgage
Performing$43,291 $187,203 $492,643 $393,806 $143,618 $298,828 $— $1,559,389 
Nonperforming— 325 5,027 3,237 4,421 5,425 — 18,435 
Total43,291 187,528 497,670 397,043 148,039 304,253 — 1,577,824 
          Current-period gross
             charge-offs		— — — — — — — — 
Residential line of credit
Performing— — — — — — 547,097 547,097 
Nonperforming— — — — — — 2,209 2,209 
Total— — — — — — 549,306 549,306 
          Current-period gross
             charge-offs		— — — — — — 20 20 
Consumer and other
Performing25,887 109,013 87,312 42,673 33,415 114,071 5,849 418,220 
Nonperforming— 561 909 2,293 1,849 4,839 — 10,451 
       Total25,887 109,574 88,221 44,966 35,264 118,910 5,849 428,671 
           Current-period gross
             charge-offs		155 344 31 96 36 110 — 772 
Total consumer type loans
Performing69,178 296,216 579,955 436,479 177,033 412,899 552,946 2,524,706 
Nonperforming— 886 5,936 5,530 6,270 10,264 2,209 31,095 
        Total$69,178 $297,102 $585,891 $442,009 $183,303 $423,163 $555,155 $2,555,801 
            Current-period gross
             charge-offs		$155 $344 $31 $96 $36 $110 $20 $792 


19
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
As of and for the year ended
  December 31, 2023 		2023 2022 2021 2020 2019 PriorRevolving Loans Amortized Cost BasisTotal
Residential real estate:
1-to-4 family mortgage
Performing$198,537 $500,628 $399,338 $145,484 $81,905 $226,587 $— $1,552,479 
Nonperforming76 2,565 4,026 3,846 690 4,870 — 16,073 
Total198,613 503,193 403,364 149,330 82,595 231,457 — 1,568,552 
           Prior-period gross
               charge-offs		— 18 — 4 — 24 — 46 
Residential line of credit
Performing— — — — — — 528,439 528,439 
Nonperforming— — — — — — 2,473 2,473 
Total— — — — — — 530,912 530,912 
           Prior-period gross
               charge-offs		— — — — — — — — 
Consumer and other
Performing104,399 91,557 45,187 34,928 24,040 93,833 6,890 400,834 
Nonperforming528 1,025 2,562 1,819 1,264 3,841 — 11,039 
       Total104,927 92,582 47,749 36,747 25,304 97,674 6,890 411,873 
            Prior-period gross
               charge-offs		1,463 564 139 201 110 372 2 2,851 
Total consumer type loans
Performing302,936 592,185 444,525 180,412 105,945 320,420 535,329 2,481,752 
Nonperforming604 3,590 6,588 5,665 1,954 8,711 2,473 29,585 
       Total$303,540 $595,775 $451,113 $186,077 $107,899 $329,131 $537,802 $2,511,337 
             Prior-period gross
                 charge-offs		1,463 582 139 205 110 396 2 2,897 
Nonaccrual and Past Due Loans
Nonperforming loans include loans that are no longer accruing interest (nonaccrual loans) and loans past due ninety or more days and still accruing interest.
The following tables represent an analysis of the aging by class of financing receivable as of March 31, 2024 and December 31, 2023:
March 31, 202430-89 days
past due and accruing
interest		90 days or 
more and accruing
interest 		Nonaccrual
loans		Loans current
on payments
and accruing
interest 		Total
Commercial and industrial$1,606 $— $24,643 $1,595,362 $1,621,611 
Construction1,474 585 5,077 1,261,747 1,268,883 
Residential real estate:
1-to-4 family mortgage17,881 9,610 8,825 1,541,508 1,577,824 
Residential line of credit1,717 1,097 1,112 545,380 549,306 
Multi-family mortgage— — 31 615,050 615,081 
Commercial real estate:
Owner occupied465 — 3,069 1,232,473 1,236,007 
Non-owner occupied3,631 — 3,250 1,984,645 1,991,526 
Consumer and other10,699 1,566 8,885 407,521 428,671 
Total$37,473 $12,858 $54,892 $9,183,686 $9,288,909 
 
20
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
December 31, 202330-89 days
past due and accruing
interest		90 days or 
more and accruing
interest 		Nonaccrual
loans		Loans current on payments and accruing interest Total
Commercial and industrial$732 $— $21,730 $1,698,271 $1,720,733 
Construction6,579 165 2,872 1,387,697 1,397,313 
Residential real estate:
1-to-4 family mortgage21,768 9,355 6,718 1,530,711 1,568,552 
Residential line of credit2,464 1,337 1,136 525,975 530,912 
Multi-family mortgage— — 32 603,772 603,804 
Commercial real estate:
Owner occupied480 — 3,188 1,228,403 1,232,071 
Non-owner occupied4,059 — 3,351 1,936,115 1,943,525 
Consumer and other10,961 1,836 9,203 389,873 411,873 
Total$47,043 $12,693 $48,230 $9,300,817 $9,408,783 
The following tables provide the amortized cost basis of loans on non-accrual status, as well as any related allowance as of March 31, 2024 and December 31, 2023 by class of financing receivable.
March 31, 2024Nonaccrual
with no
related
allowance		Nonaccrual
with
related
allowance		Related
allowance
Commercial and industrial$14,465 $10,178 $3,946 
Construction3,152 1,925 293 
Residential real estate:
1-to-4 family mortgage3,336 5,489 167 
Residential line of credit812 300 5 
Multi-family mortgage— 31 1 
Commercial real estate:
Owner occupied1,935 1,134 145 
Non-owner occupied3,219 31 1 
Consumer and other— 8,885 463 
Total$26,919 $27,973 $5,021 
December 31, 2023
Nonaccrual
with no
related
allowance		Nonaccrual
with
related
allowance		Related
allowance
Commercial and industrial$3,678 $18,052 $5,011 
Construction2,267 605 59 
Residential real estate:
1-to-4 family mortgage1,444 5,274 103 
Residential line of credit685 451 8 
Multi-family mortgage— 32 1 
Commercial real estate:
Owner occupied2,920 268 15 
Non-owner occupied3,316 35 1 
Consumer and other— 9,203 498 
Total$14,310 $33,920 $5,696 





21
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following presents interest income recognized on nonaccrual loans for the three months ended March 31, 2024 and 2023:
Three Months Ended March 31,
20242023
Commercial and industrial$224 $20 
Construction61 6 
Residential real estate:
1-to-4 family mortgage— 79 
Residential line of credit16 24 
Multi-family mortgage— 1 
Commercial real estate:
Owner occupied49 58 
Non-owner occupied35 82 
Consumer and other— 173 
Total$385 $443 
Accrued interest receivable written off as an adjustment to interest income amounted to $201 and $181 for the three months ended March 31, 2024 and 2023, respectively.
Loan Modifications to Borrowers Experiencing Financial Difficulty
Occasionally, the Company may make certain modifications of loans to borrowers experiencing financial difficulty. These modifications may be in the form of an interest rate reduction, a term extension, principal forgiveness, payment deferral or a combination thereof. Upon the Company's determination that a modified loan has subsequently been deemed uncollectible, the portion of the loan deemed uncollectible is charged off against the allowance for credit losses on loans HFI. The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.
There were no modifications of loans to borrowers experiencing financial difficulty during the three months ended March 31, 2023.
The following table presents the amortized cost of FDM loans as of March 31, 2024 by class of financing receivable and type of concession granted that were modified during the three months ended March 31, 2024.
Term extensionPayment deferral and term extensionTotal% of total class of financing receivables
Construction$— $14,316 $14,316 1.1 %
Commercial real estate:
Non-owner occupied10,351 — 10,351 0.5 %
Consumer and other22 — 22 — %
     Total$10,373 $14,316 $24,689 0.3 %
No financing receivables that were modified in the prior twelve months had a payment default during the three months ended March 31, 2024. Defaults are defined as the earlier of the FDM being placed on non-accrual status or reaching 90 days past due with respect to principal and/or interest payments. As of March 31, 2024, there were no commitments to lend a material amount of additional funds to any borrower whose loan was classified as a FDM.
The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficultly:
Three Months Ended
March 31, 2024		Weighted average term extension
(in months)		Weighted average payment deferral
(in months)
Construction63
Commercial real estate:
Non-owner occupied6—
Consumer and other42—
22
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The table below depicts the performance of loans held for investment as of March 31, 2024 made to borrowers experiencing financial difficulty that were modified in the prior twelve months.
March 31, 202430-89 days
past due and accruing
interest		90 days or 
more and accruing
interest
Nonaccrual
loans(1)
Loans current
on payments
and accruing
interest 		Total
Commercial and industrial$— $— $179 $— $179 
Construction— — — 14,316 14,316 
Residential real estate:
1-to-4 family mortgage— — 65 — 65 
Commercial real estate:
Non-owner occupied— — — 10,351 10,351 
Consumer and other— — — 22 22 
Total$— $— $244 $24,689 $24,933 
1) Loans were on non-accrual when modified and subsequently classified as FDM.
Collateral-Dependent Loans
For loans for which the repayment (based on the Company's assessment) is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, the following tables present the loans and the corresponding individually assessed allowance for credit losses by class of financing receivable. Significant changes in individually assessed reserves are due to changes in the valuation of the underlying collateral in addition to changes in accrual and past due status.
March 31, 2024
Type of Collateral
Real EstateFarmlandBusiness AssetsTotalIndividually assessed allowance for credit loss
Commercial and industrial$86 $363 $23,660 $24,109 $3,883 
Construction24,744 1,653 — 26,397 265 
Residential real estate:
1-to-4 family mortgage3,893 — — 3,893 58 
Residential line of credit1,384 — — 1,384 12 
Multi-family mortgage— — — — — 
Commercial real estate:
Owner occupied1,969 7,478 9,447 131 
Non-owner occupied14,731 — — 14,731 — 
Total$46,807 $9,494 $23,660 $79,961 $4,349 
23
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
December 31, 2023
Type of Collateral
Real EstateFarmlandBusiness AssetsTotalIndividually assessed allowance for credit loss
Commercial and industrial$— $363 $20,599 $20,962 $4,946 
Construction8,224 — — 8,224 30 
Residential real estate:
1-to-4 family mortgage5,317 — — 5,317 129 
Residential line of credit1,245 — — 1,245 10 
Commercial real estate:
Owner occupied1,975 1,160 — 3,135 — 
Non-owner occupied3,316 — — 3,316 — 
Consumer and other112 — — 112 21 
Total$20,189 $1,523 $20,599 $42,311 $5,136 
Allowance for Credit Losses on Loans HFI
The Company performed evaluations within its established qualitative framework, assessing the impact of the current economic outlook, including: continued actions taken by the Federal Reserve with regard to monetary policy, interest rates and the potential impact of those actions, potential impact of persistent high inflation on economic growth, potential negative economic forecasts, and other considerations. The increase in the allowance for credit losses on loans HFI as of March 31, 2024 compared with December 31, 2023 is primarily the result of expected deterioration in the CRE portfolio which was adjusted upward qualitatively to address risks not captured by the model. These adjustments factor in the possibility that the economy may be nearing a recession, reflected through deterioration in asset quality projected over life of the loan portfolio. As of March 31, 2024, all CRE asset classes are expected to be negatively impacted by slowing demand coupled with refinancing risk in the current rate environment.
The following tables provide the changes in the allowance for credit losses on loans HFI by class of financing receivable for the three months ended March 31, 2024 and 2023:
 Commercial
and industrial 		Construction1-to-4
family
residential
mortgage 		Residential
line of credit 		Multi-family
residential
mortgage 		Commercial
real estate
owner
occupied 		Commercial
real estate
non-owner
occupied 		Consumer
and other 		Total
Three Months Ended March 31, 2024
Beginning balance -
December 31, 2023
$19,599 $35,372 $26,505 $9,468 $8,842 $10,653 $22,965 $16,922 $150,326 
(Reversal of) provision for
    credit losses on loans
    HFI		(2,298)2,028 (433)470 131 56 984 914 1,852 
Recoveries of loans
previously charged-off
14 — 56 — — 40 — 306 416 
Loans charged off(43)(92)— (20)— — — (772)(927)
Ending balance -
March 31, 2024
$17,272 $37,308 $26,128 $9,918 $8,973 $10,749 $23,949 $17,370 $151,667 
 Commercial
and industrial 		Construction1-to-4
family
residential
mortgage 		Residential
line of credit 		Multi-family
residential
mortgage 		Commercial
real estate
owner
occupied 		Commercial
real estate
non-owner
occupied 		Consumer
and other 		Total
Three Months Ended March 31, 2023 
Beginning balance -
December 31, 2022
$11,106 $39,808 $26,141 $7,494 $6,490 $7,783 $21,916 $13,454 $134,192 
(Reversal of) provision for
    credit losses on loans
    HFI		(10)1,217 1,073 1,540 129 103 (48)993 4,997 
Recoveries of loans
previously charged-off
67 — 15 — — 66 — 239 387 
Loans charged off(46)— (16)— — — — (705)(767)
Ending balance -
March 31, 2023		$11,117 $41,025 $27,213 $9,034 $6,619 $7,952 $21,868 $13,981 $138,809 
24
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (4)—Other real estate owned
The amount reported as other real estate owned includes property acquired through foreclosure in addition to excess facilities held for sale and is carried at the lower of the carrying amount of the underlying loan or the fair value of the real estate less costs to sell. The following table summarizes the other real estate owned for the three months ended March 31, 2024 and 2023: 
Three Months Ended March 31,
 20242023
Balance at beginning of period$3,192 $5,794 
Transfers from loans753 235 
Proceeds from sale of other real estate owned(389)(2,031)
Gain on sale of other real estate owned57 87 
Balance at end of period$3,613 $4,085 
Included within the other real estate owned balance above, foreclosed residential real estate properties totaled $2,344 and $2,414 as of March 31, 2024 and December 31, 2023, respectively.
The recorded investment in residential mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process totaled $4,330 and $3,377 as of March 31, 2024 and December 31, 2023, respectively.
Note (5)—Leases
As of March 31, 2024, the Company was the lessee in 48 operating leases and 1 finance lease of certain branch, mortgage and operations locations with original terms greater than one year.
Many leases include options to renew, with terms that can extend the lease up to an additional 20 years or more. Certain lease agreements contain provisions to periodically adjust rental payments for inflation. Renewal options that management is reasonably certain to renew and fixed rent escalations are included in the right-of-use asset and lease liability.
Information related to the Company's leases is presented below as of March 31, 2024 and December 31, 2023:
March 31,December 31,
Classification20242023
Right-of-use assets:
Operating leasesOperating lease right-of-use assets$51,421$54,295
Finance leasesPremises and equipment, net1,2281,256
Total right-of-use assets$52,649$55,551
Lease liabilities:
Operating leasesOperating lease liabilities$64,562$67,643
Finance leasesBorrowings 1,3021,326
Total lease liabilities $65,864$68,969
Weighted average remaining lease term (in years) -
    operating		11.511.6
Weighted average remaining lease term (in years) -
    finance		11.111.4
Weighted average discount rate - operating3.40 %3.39 %
Weighted average discount rate - finance1.76 %1.76 %
25
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The components of total lease expense included in the consolidated statements of income were as follows:
Three Months Ended March 31,
Classification2024 2023 
Operating lease costs:
Amortization of right-of-use assetOccupancy and equipment$1,927 $1,815 
Short-term lease costOccupancy and equipment97 121 
Variable lease costOccupancy and equipment336 298 
Gain on lease modifications and
    terminations
Occupancy and equipment— (72)
Finance lease costs:
Interest on lease liabilitiesInterest expense on borrowings6 6 
Amortization of right-of-use assetOccupancy and equipment28 28 
Sublease income Occupancy and equipment(172)(281)
Total lease cost$2,222 $1,915 
The Company does not separate lease and non-lease components and instead elects to account for them as a single lease component. Variable lease cost primarily represents variable payments such as common area maintenance, utilities, and property taxes.
A maturity analysis of operating and finance lease liabilities and a reconciliation of undiscounted cash flows to lease liabilities as of March 31, 2024 is as follows:
OperatingFinance
Leases Lease
Lease payments due:
March 31, 2025$6,358 $90 
March 31, 20268,454 121 
March 31, 20278,314 123 
March 31, 20287,864 125 
March 31, 20296,939 127 
Thereafter44,094 850 
     Total undiscounted future minimum lease payments82,023 1,436 
Less: imputed interest(17,461)(134)
     Lease liabilities$64,562 $1,302 
26
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (6)—Mortgage servicing rights
Changes in the Company’s mortgage servicing rights were as follows for the three months ended March 31, 2024 and 2023:
 Three Months Ended March 31,
 2024 2023 
Carrying value at beginning of period$164,249 $168,365 
Capitalization1,131 1,788 
Change in fair value:
    Due to payoffs/paydowns
(2,724)(2,520)
    Due to change in valuation inputs or assumptions3,018 (2,754)
        Carrying value at end of period$165,674 $164,879 
The following table summarizes servicing income and expense, which are included in mortgage banking income and other noninterest expense, respectively, in the consolidated statements of income for the three months ended March 31, 2024 and 2023: 
 Three Months Ended March 31,
 2024 2023 
   Servicing income$7,347 $7,768 
   Change in fair value of mortgage servicing rights294 (5,274)
   Change in fair value of derivative hedging instruments(3,335)1,867 
Servicing income
4,306 4,361 
Servicing expenses1,947 1,883 
          Net servicing income
$2,359 $2,478 
Data and key economic assumptions related to the Company’s mortgage servicing rights as of March 31, 2024 and December 31, 2023 are as follows: 
 March 31,December 31,
 20242023
Unpaid principal balance of mortgage loans sold and serviced for others$10,651,075 $10,762,906 
Weighted-average prepayment speed (CPR)6.06 %6.19 %
Estimated impact on fair value of a 10% increase$(4,383)$(4,616)
Estimated impact on fair value of a 20% increase$(8,490)$(8,924)
Discount rate10.2 %9.62 %
Estimated impact on fair value of a 100 bp increase$(7,633)$(7,637)
Estimated impact on fair value of a 200 bp increase$(14,617)$(14,624)
Weighted-average coupon interest rate3.50 %3.47 %
Weighted-average servicing fee (basis points)2727
Weighted-average remaining maturity (in months)335334
The Company economically hedges the mortgage servicing rights portfolio with various derivative instruments to offset changes in the fair value of the related mortgage servicing rights. See Note 9, “Derivatives” for additional information on these hedging instruments.
As of March 31, 2024 and December 31, 2023, mortgage escrow deposits totaled $92,350 and $63,591, respectively.
27
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (7)—Income taxes
The following table presents a reconciliation of income taxes for the three months ended March 31, 2024 and 2023:
 Three Months Ended March 31,
 2024 2023 
Federal taxes calculated at statutory rate$7,192 21.0 %$9,676 21.0 %
  Increase (decrease) resulting from:
State taxes, net of federal benefit133 0.4 %251 0.6 %
Expense from equity based compensation55 0.2 %115 0.3 %
Municipal interest income, net of interest
  disallowance		(373)(1.1)%(456)(1.0)%
Bank-owned life insurance(90)(0.3)%(127)(0.3)%
Section 162(m) limitation160 0.5 %127 0.2 %
Other(777)(2.3)%111 0.2 %
Income tax expense, as reported$6,300 18.4 %$9,697 21.0 %
Note (8)—Commitments and contingencies
Commitments to extend credit and letters of credit
The Company issues certain financial instruments to meet customer financing needs, including loan commitments, credit lines and letters of credit. The agreements associated with these type of unfunded loan commitments provide credit or support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates.
The same credit and underwriting policies the Company uses to evaluate and underwrite loans are also used to originate unfunded loan commitments, including obtaining collateral at exercise of the commitment. These unfunded loan commitments are only recorded in the consolidated financial statements when drawn upon and many expire without being used. The Company's maximum off-balance sheet exposure to credit loss from these unfunded loan commitments is represented by the contractual amount of these instruments.
March 31,December 31,
 2024 2023 
Commitments to extend credit, excluding interest rate lock commitments$2,771,611 $2,906,016 
Letters of credit85,487 77,055 
Balance at end of period$2,857,098 $2,983,071 
As of March 31, 2024 and December 31, 2023, unfunded loan commitments included above with floating interest rates totaled $2,388,134 and $2,459,669, respectively.
As part of its credit loss process, the Company estimates expected credit losses on its unfunded loan commitments under the CECL methodology. When applying this methodology, the Company considers the likelihood that funding will occur, the contractual period of exposure to credit loss, the risk of loss, historical loss experience, and current conditions along with expectations of future economic conditions.
The table below presents activity within the allowance for credit losses on unfunded loan commitments included in accrued expenses and other liabilities on the Company's consolidated balance sheets:
Three Months Ended March 31,
2024 2023 
Balance at beginning of period$8,770 $22,969 
Reversal of credit losses on unfunded commitments(1,070)(4,506)
Balance at end of period$7,700 $18,463 
Loan repurchases or indemnifications
In connection with the sale of mortgage loans to third-party private investors or government sponsored agencies, the Company makes representations and warranties as to the propriety of its origination activities, which are typical and customary to these types of transactions. Occasionally, the investors require the Company to repurchase loans sold to
28
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
them under the terms of the warranties. When this happens, the loans are recorded at fair value in loans held for investment. The total principal amount of loans repurchased (or indemnified for) was $2,078 and $3,326 for three months ended March 31, 2024 and 2023, respectively. The Company has established a reserve associated with potential loan repurchases.
The following table summarizes the activity in the repurchase reserve included in accrued expenses and other liabilities on the Company's consolidated balance sheets:
Three Months Ended March 31,
 2024 2023 
Balance at beginning of period$899 $1,621 
Provision for (reversal of) loan repurchases or indemnifications50 (250)
Losses on loans repurchased or indemnified(19)(13)
Balance at end of period$930 $1,358 
Legal Proceedings
Various legal claims arise from time to time in the normal course of business, which, in the opinion of management, will not have a material effect on the Company’s consolidated financial statements.
Note (9)—Derivatives
The Company utilizes derivative financial instruments as part of its ongoing efforts to manage its interest rate risk exposure as well as interest rate exposure for its customers. Derivative financial instruments are included in the consolidated balance sheets line items other assets or other liabilities at fair value in accordance with ASC 815, “Derivatives and Hedging.” See Note 1, “Basis of presentation” in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 for additional information on the Company’s accounting policies related to derivative instruments and hedging activities.
Derivatives designated as fair value hedges
The Company enters into fair value hedging relationships using interest rates swaps to mitigate the Company’s exposure to losses in market value as interest rates change. Derivative instruments that are used as part of the Company’s interest rate risk management strategy include interest rate swaps that relate to pricing of specific balance sheet assets and liabilities. Interest rate swaps generally involve the exchange of fixed and variable rate interest payments between two parties, based on a common notional principal amount and maturity date. The critical terms of the interest rate swaps match the terms of the corresponding hedged items. All components of each derivative instrument’s gain or loss are included in the assessment of hedge effectiveness. Any initial and ongoing assessment of expected hedge effectiveness is based on regression analysis.
At March 31, 2024, the Company did not have any interest rate swaps that were designated as fair value hedges. At December 31, 2023, the Company had interest rate swaps designated as fair value hedges to convert fixed rate money market deposits to variable with notional values totaling $200,000 and market values totaling $(4,497) recorded in other liabilities on the consolidated balance sheets. Additionally at December 31, 2023, the Company had an interest rate swap designated as a fair value hedge on subordinated debt with a notional value of $100,000 and market value of $(673) recorded in other liabilities on the consolidated balance sheets.
During the three months ended March 31, 2024, the Company terminated interest rate swaps that were designated as fair value hedges on fixed rate money market deposits and the interest rate swaps covering subordinated debt matured. For the terminated swaps, notional values totaled $200,000 and market values totaled $(4,588) at termination. The remaining fair value adjustment on the terminated hedging relationships will be amortized into interest expense over the respective contract terms of the original hedges. For the matured swap, the notional value totaled $100,000 prior to maturity. The swap involved the receipt of fixed rate amounts from a counterparty in exchange for the Company making variable rate payments over the life of the agreement.
29
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following discloses the amount of expense included in interest expense on deposits and borrowings, related to the Company's fair value hedging instruments:
Three Months Ended March 31,
20242023
Designated fair value hedge:
     Interest expense on deposits$— $(1,508)
     Interest expense on borrowings(645)(760)
       Total$(645)$(2,268)

During the three months ended March 31, 2024, amortization expense totaling $1,843 related to the terminated fair value hedges was recognized as an increase to interest expense on deposits. As of March 31, 2024, the remaining fair value adjustment related to the terminated fair value hedges of $(2,745) is included in money market and savings deposits on the consolidated balance sheets.
The following amounts were recorded on the balance sheet related to cumulative adjustments of fair value hedges as of December 31, 2023:
December 31, 2023
Line item on the balance sheetCarrying amount of the hedged itemCumulative decrease in fair value hedging adjustment included in the carrying amount of the hedged item
Money market and savings deposits$198,143 
(1)
$(4,497)
Borrowings98,715 
(2)
(673)
      Total$296,858 $(5,170)
(1) The carrying value also includes an unaccreted purchase accounting fair value premium of $2,640 as of December 31, 2023.
(2) The carrying value also includes unamortized subordinated debt issuance costs of $612 as of December 31, 2023.
Derivatives designated as cash flow hedges
The Company enters into cash flow hedging relationships using interest rate swaps to mitigate the exposure to the variability in future cash flows or other forecast transactions associated with its floating rate assets and liabilities. The Company uses interest rate swap agreements to hedge the repricing characteristics of its floating rate subordinated debt. All components of each derivative instrument’s gain or loss are included in the assessment of hedge effectiveness. Any initial and ongoing assessment of expected hedge effectiveness is based on regression analysis. The ongoing periodic measures of hedge ineffectiveness are based on the expected change in cash flows of the hedged item caused by changes in the benchmark interest rate.
The following presents a summary of the Company's designated cash flow hedges as of the dates presented:
March 31, 2024December 31, 2023
Notional AmountEstimated fair valueBalance sheet locationEstimated fair valueBalance sheet location
Interest rate swap agreements-
   subordinated debt		$30,000 $343 Other assets$579 Other assets
The Company's consolidated statements of income included income of $247 and $197 for the three months ended March 31, 2024 and 2023, respectively, in interest expense on borrowings related to these cash flow hedges. The cash flow hedges were highly effective during the periods presented and as a result qualified for hedge accounting treatment. As such, no amounts were reclassified from accumulated other comprehensive loss into earnings as a result of hedge ineffectiveness during any period presented.



30
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following discloses the amount included in other comprehensive loss, net of tax, for derivative instruments designated as cash flow hedges for the periods presented:
Three Months Ended March 31,
20242023
Amount of loss recognized in other comprehensive loss, net of tax benefit of $62 and $70
$(174)$(197)
Derivatives not designated as hedging instruments
Derivatives not designated under hedge accounting rules include those that are entered into as either economic hedges as part of the Company’s overall risk management strategy or to facilitate client needs. Economic hedges are those that are not designated as a fair value or cash flow hedge for accounting purposes but are necessary to economically manage the risk exposure associated with the assets and liabilities of the Company.
The Company enters into derivative instruments to help its commercial customers manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with customer contracts, the Company enters into an offsetting derivative contract. The Company manages its credit risk, or potential risk of default by its commercial customers through credit limit approval and monitoring procedures.
The Company enters into interest rate-lock commitments on residential loan commitments that will be held for resale. These are considered derivative instruments with no hedge accounting designation, and the interest rate exposure on these commitments is economically hedged primarily with forward contracts. Gains and losses arising from changes in the valuation of the interest rate-lock commitments and forward commitments are recognized currently in earnings and are reflected under the line item mortgage banking income in the consolidated statements of income.
The Company also enters into forwards, futures and option contracts to economically hedge the change in fair value of mortgage servicing rights. Gains and losses associated with these instruments are included in earnings and are reflected under the line item mortgage banking income in the consolidated statements of income.
The following tables provide details on the Company’s non-designated derivative financial instruments as of the dates presented:
March 31, 2024
Notional AmountAssetLiability
  Interest rate contracts$551,095 $35,925 $35,954 
  Forward commitments226,500 — 261 
  Interest rate-lock commitments130,315 2,073 — 
  Futures contracts235,500 — 189 
    Total$1,143,410 $37,998 $36,404 
 December 31, 2023
 Notional AmountAssetLiability
  Interest rate contracts$569,865 $32,179 $32,184 
  Forward commitments159,000 — 861 
  Interest rate-lock commitments69,217 1,203 — 
  Futures contracts254,000 777 — 
    Total$1,052,082 $34,159 $33,045 







31
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Gains (losses) included in the consolidated statements of income related to the Company’s non-designated derivative financial instruments were as follows:
Three Months Ended March 31,
 2024 2023 
Included in mortgage banking income:
  Interest rate lock commitments$869 $1,207 
  Forward commitments100 (295)
  Futures contracts(2,997)1,937 
  Option contracts— (664)
    Total$(2,028)$2,185 
Netting of Derivative Instruments
Certain financial instruments, including derivatives, may be eligible for offset on the consolidated balance sheets when the “right of offset” exists or when the instruments are subject to an enforceable master netting agreement, which includes the right of the non-defaulting party or non-affected party to offset recognized amounts, including collateral posted with the counterparty, to determine a net receivable or net payable upon early termination of the agreement. Certain of the Company’s derivative instruments are subject to master netting agreements, however the Company has not elected to offset such financial instruments on the consolidated balance sheets. The following table presents the Company's gross derivative positions as recognized on the consolidated balance sheets as well as the net derivative positions, including collateral pledged to the extent the application of such collateral did not reduce the net derivative liability position below zero, had the Company elected to offset those instruments subject to an enforceable master netting agreement:
Gross amounts not offset on the consolidated balance sheets
Gross amounts recognizedGross amounts offset on the consolidated balance sheetsNet amounts presented on the consolidated balance sheetsFinancial instrumentsFinancial collateral pledgedNet Amount
March 31, 2024
Derivative financial assets$36,145 $— $36,145 $123 $— $36,022 
Derivative financial liabilities$5,386 $— $5,386 $123 $5,263 $— 
December 31, 2023
Derivative financial assets$31,468 $— $31,468 $6,502 $— $24,966 
Derivative financial liabilities$11,330 $— $11,330 $6,502 $4,828 $— 
Collateral Requirements
Most derivative contracts with customers are secured by collateral. Additionally, in accordance with the interest rate agreements with derivative counterparties, the Company may be required to post collateral with these derivative counterparties. As of March 31, 2024 and December 31, 2023, the Company had collateral posted of $13,585 and $14,042, respectively, against its obligations under these agreements. Cash pledged as collateral on derivative contracts is recorded in other assets on the consolidated balance sheets.







32
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (10)—Fair value of financial instruments
FASB ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a framework for measuring the fair value of assets and liabilities according to a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that are derived from assumptions based on management’s estimate of assumptions that market participants would use in pricing the asset or liability based on the best information available under the circumstances.
The hierarchy is broken down into the following three levels, based on the reliability of inputs:
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.
Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data.
Level 3: Significant unobservable inputs for assets or liabilities that are derived from assumptions based on management’s estimate of assumptions that market participants would use in pricing the assets or liabilities.
33
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The Company records the fair values of financial assets and liabilities on a recurring and nonrecurring basis using the following methods and assumptions:
Investment securities
Investment securities are recorded at fair value on a recurring basis. Fair values for securities are based on quoted market prices, where available. If quoted prices are not available, fair values are based on quoted market prices of similar instruments or are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the pricing relationship or correlation among other benchmark quoted securities. Investment securities valued using quoted market prices of similar instruments or that are valued using matrix pricing are classified as Level 2.
Loans held for sale
Mortgage loans held for sale are carried at fair value determined using current secondary market prices for loans with similar characteristics, that is, using Level 2 inputs. GNMA optional repurchase loans recorded as held for sale loans are carried at their principal balance. For commercial loans held for sale, fair value is determined using an income approach with various assumptions including expected cash flows, market discount rates, credit metrics and collateral value when appropriate. As such, these are considered Level 3.
Derivatives
The fair value of the Company's interest rate swap agreements to facilitate customer transactions are based upon fair values provided from entities that engage in interest rate swap activity and is based upon projected future cash flows and interest rates. The fair value of interest rate lock commitments associated with the mortgage pipeline is based on fees currently charged to enter into similar agreements, and for fixed-rate commitments, the difference between current levels of interest rates and the committed rates is also considered. The fair values of the Company's designated cash flow and fair value hedges are determined by calculating the difference between the discounted fixed rate cash flows and the discounted variable rate cash flows. The fair values of both the Company's hedges, including designated cash flow hedges and designated fair value hedges are based on pricing models that utilize observable market inputs. These financial instruments are classified as Level 2.
OREO
OREO is comprised of properties obtained in partial or total satisfaction of loan obligations and excess land and facilities held for sale. OREO acquired in settlement of indebtedness is recorded at the lower of the carrying amount of the loan or the fair value of the real estate less costs to sell. Fair value is determined on a nonrecurring basis based on appraisals by qualified licensed appraisers and is adjusted for management’s estimates of costs to sell and holding period discounts. OREO valuations are classified as Level 3.
Mortgage servicing rights
MSRs are carried at fair value. Fair value is determined using an income approach with various assumptions including expected cash flows, market discount rates, prepayment speeds, servicing costs, and other factors. As such, MSRs are considered Level 3.
Collateral- dependent loans
Collateral-dependent loans are loans for which, based on current information and events, the Company has determined foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the collateral and it is probable that the creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. Collateral-dependent loans are classified as Level 3.



34
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The balances and levels of the assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 are presented in the following tables:
At March 31, 2024Quoted prices
in active
markets for
identical assets
(liabilities)
(level 1)		Significant
other
observable
inputs
(level 2) 		Significant unobservable
inputs
(level 3) 		Total
Recurring valuations:    
Financial assets:     
Available-for-sale securities:    
U.S. government agency securities$— $415,927 $— $415,927 
Mortgage-backed securities - residential— 826,214 — 826,214 
Mortgage-backed securities - commercial— 16,615 — 16,615 
Municipal securities— 171,672 — 171,672 
U.S. Treasury securities— 30,857 — 30,857 
Corporate securities— 3,397 — 3,397 
Total securities$— $1,464,682 $— $1,464,682 
Loans held for sale, at fair value$— $61,828 $— $61,828 
Mortgage servicing rights— — 165,674 165,674 
Derivatives— 38,341 — 38,341 
Financial Liabilities:
Derivatives— 36,404 — 36,404 
At December 31, 2023Quoted prices
in active
markets for
identical assets
(liabilities)
(level 1)		Significant
other
observable
inputs
(level 2) 		Significant unobservable
inputs
(level 3) 		Total
Recurring valuations:    
Financial assets:     
Available-for-sale securities:    
U.S. government agency securities$— $203,956 $— $203,956 
Mortgage-backed securities - residential— 896,971 — 896,971 
Mortgage-backed securities - commercial— 16,961 — 16,961 
Municipal securities — 242,263 — 242,263 
U.S. Treasury securities— 108,496 — 108,496 
Corporate securities— 3,326 — 3,326 
Total securities$— $1,471,973 $— $1,471,973 
Loans held for sale, at fair value$— $46,618 $— $46,618 
Mortgage servicing rights— — 164,249 164,249 
Derivatives— 34,738 — 34,738 
Financial Liabilities:
Derivatives— 38,215 — 38,215 
The balances and levels of the assets measured at fair value on a nonrecurring basis as of March 31, 2024 and December 31, 2023 are presented in the following tables: 
35
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
At March 31, 2024Quoted prices
in active
markets for
identical assets
(liabilities
(level 1)		Significant
other
observable
inputs
(level 2) 		Significant unobservable
inputs
(level 3) 		Total
Nonrecurring valuations:    
Financial assets:    
Other real estate owned$— $— $644 $644 
Collateral-dependent net loans held for
   investment:
Commercial and industrial— — 5,303 5,303 
Construction— — 1,288 1,288 
Residential real estate:
1-4 family mortgage— — 499 499 
Residential line of credit— — 561 561 
Commercial real estate:
Owner occupied— — 752 752 
Total collateral-dependent loans$— $— $8,403 $8,403 
 
At December 31, 2023Quoted prices
in active
markets for
identical assets
(liabilities)
(level 1)		Significant
other
observable
inputs
(level 2)		Significant unobservable
inputs
(level 3)		Total
Nonrecurring valuations:    
Financial assets:    
Other real estate owned$— $— $2,400 $2,400 
Collateral-dependent net loans held for
    investment:
Commercial and industrial$— $— $12,338 $12,338 
Construction— — 203 203 
Residential real estate:
1-4 family mortgage— — 429 429 
Consumer and other— — 71 71 
Total collateral-dependent loans$— $— $13,041 $13,041 














36
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Commercial loans held for sale
Historically, the Company had a portfolio of acquired commercial loans. There were no such loans outstanding as of March 31, 2024 as the last relationship was exited during the year ended December 31, 2023. These commercial loans were measured at fair value. As such, these loans were excluded from the ACL.
The following table sets forth the changes in fair value associated with this portfolio for the three months ended March 31, 2023:
Three Months Ended March 31, 2023
Principal balanceFair Value discountFair Value
Carrying value at beginning of period$34,357 $(3,867)$30,490 
Change in fair value:
   Paydowns and payoffs(21,890)— (21,890)
   Changes in valuation included in other noninterest income— 910 910 
      Carrying value at end of period$12,467 $(2,957)$9,510 
The significant unobservable inputs (Level 3) used in the valuation and changes in fair value associated with the Company's mortgage servicing rights for the three months ended March 31, 2024 and 2023 are detailed at Note 6, “Mortgage servicing rights.”
The following tables present information as of March 31, 2024 and December 31, 2023 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a nonrecurring basis:
March 31, 2024
Financial instrumentFair ValueValuation techniqueSignificant 
unobservable inputs		Range of
inputs
Collateral-dependent net loans
   held for investment		$8,403 Valuation of collateralDiscount for comparable sales
9%-58%
Other real estate owned$644 Appraised value of property less costs to sellDiscount for costs to sell
0%-15%
December 31, 2023
Financial instrumentFair ValueValuation techniqueSignificant 
unobservable inputs		Range of
inputs
Collateral-dependent net loans
    held for investment		$13,041 Valuation of collateralDiscount for comparable sales
10%-61%
Other real estate owned$2,400 Appraised value of property less costs to sellDiscount for costs to sell
0%-15%
Fair value for collateral-dependent loans is determined based on appraisals performed by qualified appraisers and reviewed by qualified personnel. Fair value of the loan's collateral is determined by third-party appraisals, which are then adjusted for estimated selling and closing costs related to liquidation of the collateral. Collateral-dependent loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on changes in market conditions from the time of valuation and management's knowledge of the borrower and borrower's business. As of March 31, 2024 and December 31, 2023, total amortized cost of collateral-dependent loans measured on a nonrecurring basis amounted to $12,754 and $18,166, respectively. The allowance for credit losses is calculated as the amount for which the loan’s amortized cost basis exceeds fair value.
Other real estate owned acquired in settlement of indebtedness is recorded at fair value of the real estate less estimated costs to sell. Subsequently, it may be necessary to record nonrecurring fair value adjustments for declines in fair value. Any write-downs based on the asset's fair value at the date of foreclosure are charged to the allowance for credit losses.
Appraisals for both collateral-dependent loans and other real estate owned are performed by certified appraisers whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the lending administrative department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry wide statistics. Collateral-dependent loans that are dependent on recovery through sale of equipment, such as farm equipment, automobiles and aircrafts are generally valued based on public source pricing or subscription services while more complex assets are valued through leveraging brokers who have expertise in the collateral involved.
37
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Fair value option
The following table summarizes the Company's loans held for sale as of the dates presented:
March 31,December 31,
20242023
Loans held for sale under a fair value option:
  Mortgage loans held for sale61,828 46,618 
Loans held for sale not accounted for under a fair value option:
  Mortgage loans held for sale - guaranteed GNMA repurchase option20,876 21,229 
               Total loans held for sale$82,704 $67,847 
Mortgage loans held for sale
Net gain of $203 and net loss of $51 resulting from fair value changes of mortgage loans held for sale were recorded in income during the three months ended March 31, 2024 and 2023, respectively. The amount does not reflect changes in fair values of related derivative instruments used to hedge exposure to market-related risks associated with these mortgage loans held for sale. The net change in fair value of these loans held for sale and derivatives resulted in net gain of $1,821 and net loss of $421 for the three months ended March 31, 2024 and 2023, respectively. The change in fair value of both mortgage loans held for sale and the related derivative instruments are recorded in “Mortgage banking income” in the consolidated statements of income. Election of the fair value option allows the Company to reduce the accounting volatility that would otherwise result from the asymmetry created by accounting for the financial instruments at the lower of cost or fair value and the derivatives at fair value.
The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however, given the short-term period that the Company holds these mortgage loans held for sale, valuation adjustments attributable to instrument-specific credit risk is nominal.
The following table summarizes the differences between the fair value and the principal balance for mortgage loans held for sale measured at fair value as of March 31, 2024 and December 31, 2023: 
March 31,December 31,
20242023
Aggregate fair value$61,828 $46,618 
Aggregate unpaid principal balance60,516 45,509 
     Difference$1,312 $1,109 














38
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following table contains the estimated fair values and the related carrying values of the Company's financial instruments. Non-financial instruments are excluded from the table below.
 
 Fair Value
March 31, 2024Carrying amount Level 1Level 2Level 3Total
Financial assets:     
Cash and cash equivalents$870,730 $870,730 $— $— $870,730 
Investment securities1,464,682 — 1,464,682 — 1,464,682 
Net loans held for investment9,137,242 — — 8,809,892 8,809,892 
Loans held for sale, at fair value61,828 — 61,828 — 61,828 
Interest receivable53,506 892 6,774 45,840 53,506 
Mortgage servicing rights165,674 — — 165,674 165,674 
Derivatives38,341 — 38,341 — 38,341 
Financial liabilities: 
Deposits: 
Without stated maturities$8,902,546 $8,902,546 $— $— $8,902,546 
With stated maturities1,602,382 — 1,594,332 — 1,594,332 
Securities sold under agreements to
repurchase and federal funds purchased
78,229 78,229 — — 78,229 
Bank Term Funding Program 130,000 — 129,462 — 129,462 
Subordinated debt, net130,414 — — 123,284 123,284 
Interest payable20,504 4,187 15,942 375 20,504 
Derivatives36,404 — 36,404 — 36,404 
 
 Fair Value
December 31, 2023Carrying amount Level 1Level 2Level 3Total
Financial assets:     
Cash and cash equivalents$810,932 $810,932 $— $— $810,932 
Investment securities1,471,973 — 1,471,973 — 1,471,973 
Net loans held for investment9,258,457 — — 9,068,518 9,068,518 
Loans held for sale, at fair value46,618 — 46,618 — 46,618 
Interest receivable52,715 388 8,551 43,776 52,715 
Mortgage servicing rights164,249 — — 164,249 164,249 
Derivatives34,738 — 34,738 — 34,738 
Financial liabilities: 
Deposits: 
Without stated maturities$8,927,654 $8,927,654 $— $— $8,927,654 
With stated maturities1,620,633 — 1,614,400 — 1,614,400 
Securities sold under agreements to
repurchase and federal funds purchased
108,764 108,764 — — 108,764 
Bank Term Funding Program130,000 — 130,000 — 130,000 
Subordinated debt, net129,645 — — 122,671 122,671 
Interest payable18,809 4,104 13,205 1,500 18,809 
Derivatives38,215 — 38,215 — 38,215 
39
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (11)—Segment reporting
The Company and the Bank are engaged in the business of banking and provide a full range of financial services. The Company determines reportable segments based on the significance of the segment’s operating results to the overall Company, the products and services offered, customer characteristics, processes and service delivery of the segments and the regular financial performance review and allocation of resources by the Chief Executive Officer, the Company’s chief operating decision maker. The Company has identified two distinct reportable segments—Banking and Mortgage. The Company’s primary segment is Banking, which provides a full range of deposit and lending products and services to corporate, commercial and consumer customers. The Company also originates conforming residential mortgage loans through its Mortgage segment, whose activities also include the servicing of residential mortgage loans and securitization of loans to third party private investors or government sponsored agencies.
Beginning in 2024, the Company began assigning a transfer rate to allocate net interest income to products and business segments. The intent of the transfer rate methodology is to transfer interest rate risk among the segments and allow management to better measure the net interest margin contribution of its assets/liabilities by segment. Prior period results have been adjusted to conform to the current methodology.
The following tables present selected financial information with respect to the Company's reportable segments for the three months ended March 31, 2024 and 2023.
Three Months Ended March 31, 2024BankingMortgageConsolidated
Net interest income$97,094 $2,396 $99,490 
Provisions for (reversal of) credit losses 838 (56)782 
Mortgage banking income— 15,626 15,626 
Change in fair value of mortgage servicing rights, net of hedging(1)
— (3,041)(3,041)
Other noninterest (loss) income(4,794)171 (4,623)
Depreciation and amortization2,708 133 2,841 
Amortization of intangibles789 — 789 
Other noninterest expense56,847 11,943 68,790 
Income before income taxes$31,118 $3,132 $34,250 
Income tax expense6,300 
Net income applicable to FB Financial Corporation and noncontrolling
interest
27,950 
Net income applicable to noncontrolling interest— 
Net income applicable to FB Financial Corporation$27,950 
Total assets$11,979,904 $568,416 $12,548,320 
Goodwill242,561 — 242,561 
(1) Change in fair value of mortgage servicing rights, net of hedging is included in Mortgage banking income in the Company's consolidated statements of income.


Three Months Ended March 31, 2023BankingMortgageConsolidated
Net interest income$101,287 $2,373 $103,660 
Provisions for credit losses 212 279 491 
Mortgage banking income— 15,493 15,493 
Change in fair value of mortgage servicing rights, net of hedging(1)
— (3,407)(3,407)
Other noninterest income (loss)11,493 (230)11,263 
Depreciation and amortization2,049 179 2,228 
Amortization of intangibles990 — 990 
Other noninterest expense63,713 13,509 77,222 
Income before income taxes$45,816 $262 $46,078 
Income tax expense9,697 
Net income applicable to FB Financial Corporation and noncontrolling
interest
36,381 
Net income applicable to noncontrolling interest— 
Net income applicable to FB Financial Corporation$36,381 
Total assets$12,534,348 $566,799 $13,101,147 
Goodwill242,561 — 242,561 
(1)Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income.
40
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (12)—Minimum capital requirements
Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action.
Under regulatory guidance for non-advanced approach institutions, the Bank and Company are required to maintain minimum capital ratios as outlined in the table below. Minimum risk-based capital adequacy ratios below include a capital conservation buffer of 2.50%. As of March 31, 2024 and December 31, 2023, the Bank and Company met all capital adequacy requirements to which they are subject. Additionally, under U.S. Basel III Capital Rules, the Bank and Company opted out of including accumulated other comprehensive income in regulatory capital.
The Company elected to phase-in the impact related to adopting ASU 2016-13 over the permissible five-year transition relief period and delayed the initial impact of CECL adoption plus 25% of the quarterly increases in ACL in the first two years after adoption. As of January 1, 2022, the cumulative amount of the transition adjustments became fixed and are being phased out of regulatory capital calculations evenly over a three-year period, with 75% of the transition provision’s impact being recognized in 2022, 50% recognized in 2023, and 25% recognized in 2024.
Actual and required capital amounts and ratios are included below as of the dates indicated.

March 31, 2024
ActualMinimum Requirement for Capital Adequacy with
Capital Buffer		To Qualify as Well-Capitalized Under Prompt Corrective Action Provisions
AmountRatioAmountRatioAmountRatio
Total Capital (to risk-weighted assets)      
FB Financial Corporation$1,657,500 15.0 %$1,161,748 10.5 %N/AN/A
FirstBank1,622,562 14.7 %1,159,716 10.5 %$1,104,491 10.0 %
Tier 1 Capital (to risk-weighted assets)
FB Financial Corporation$1,419,546 12.8 %$940,462 8.5 %N/AN/A
FirstBank1,384,847 12.5 %938,818 8.5 %$883,593 8.0 %
Tier 1 Capital (to average assets)
FB Financial Corporation$1,419,546 11.3 %$500,450 4.0 %N/AN/A
FirstBank1,384,847 11.1 %499,885 4.0 %$624,857 5.0 %
Common Equity Tier 1 Capital
(to risk-weighted assets)
FB Financial Corporation$1,389,546 12.6 %$774,498 7.0 %N/AN/A
FirstBank1,384,847 12.5 %773,144 7.0 %$717,919 6.5 %
December 31, 2023ActualMinimum Requirement for Capital Adequacy with
Capital Buffer		To Qualify as Well-Capitalized Under Prompt Corrective Action Provisions
AmountRatioAmountRatioAmountRatio
Total Capital (to risk-weighted assets)      
FB Financial Corporation$1,635,848 14.5 %$1,182,028 10.5 %N/AN/A
FirstBank1,600,950 14.2 %1,179,886 10.5 %$1,123,701 10.0 %
Tier 1 Capital (to risk-weighted assets)
FB Financial Corporation$1,405,890 12.5 %$956,880 8.5 %N/AN/A
FirstBank1,370,991 12.2 %955,145 8.5 %$898,960 8.0 %
Tier 1 Capital (to average assets)
FB Financial Corporation$1,405,890 11.3 %$496,485 4.0 %N/AN/A
FirstBank1,370,991 11.1 %495,761 4.0 %$619,701 5.0 %
Common Equity Tier 1 Capital
(to risk-weighted assets)
FB Financial Corporation$1,375,890 12.2 %$788,018 7.0 %N/AN/A
FirstBank1,370,991 12.2 %786,590 7.0 %$730,405 6.5 %
41
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (13)—Stock-based compensation
Restricted Stock Units
The Company grants RSUs under compensation arrangements for the benefit of certain employees and directors. RSU grants are subject to time-based vesting with associated compensation recognized on a straight-line basis based on the grant date fair value of the awards. The total number of RSUs granted represents the number of awards eligible to vest based upon the service conditions set forth in the grant agreements.
The following table summarizes changes in RSUs for the three months ended March 31, 2024:
 Restricted Stock
Units
Outstanding		Weighted
Average Grant
Date
Fair Value
Balance at beginning of period (unvested)323,520 $37.52 
Granted155,047 35.60 
Vested(18,777)35.55 
Forfeited(853)40.19 
Balance at end of period (unvested)458,937 $36.95 
The total fair value of RSUs vested was $668 and $4,591 for the three months ended March 31, 2024 and 2023, respectively. The compensation cost related to the grants and vesting of RSUs was $2,706 and $1,706 for the three months ended March 31, 2024 and 2023, respectively. This includes amounts paid related to grants and compensation for directors elected to be settled in stock amounting to $199 and $175 for the three months ended March 31, 2024 and 2023, respectively.
As of March 31, 2024, there was $10,614 of total unrecognized compensation cost related to unvested RSUs which is expected to be recognized over a weighted-average period of 2.24 years. Additionally, as of March 31, 2024, there were 1,459,258 shares available for issuance under the Company's stock compensation plans. As of March 31, 2024 and December 31, 2023, there was $410 and $353, respectively, accrued in other liabilities related to dividend equivalent units declared to be paid upon vesting and distribution of the underlying RSUs.
Performance-Based Restricted Stock Units
The Company awards PSUs to certain employees. Under the terms of the awards, the number of units that will vest and convert to shares of common stock will be based on the Company's achievement of certain performance metrics over a fixed three-year performance period. The number of shares issued upon vesting can range from 0% to 200% of the PSUs granted.
For PSUs granted prior to December 31, 2023, performance factors will be based on the Company’s achievement of non-GAAP core return on average tangible common equity over the performance period relative to a predefined peer group.     
Beginning with awards issued during the first quarter of 2024, performance factors will be based on a combination of the same metric discussed above as well as the Company’s adjusted tangible book value over the performance period.
Compensation expense for PSUs is estimated each period based on the fair value of the Company's stock at the grant date and the most probable outcome of the performance condition, adjusted for the passage of time within the performance period of the awards.








42
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following table summarizes information about the changes in PSUs as of and for the three months ended March 31, 2024:
Performance Stock
Units
Outstanding		Weighted
Average Grant
Date
Fair Value
Balance at beginning of period (unvested)176,163 $40.86 
Granted97,738 35.60 
Performance adjustment (1)
(12,356)43.20 
Vested(34,915)43.20 
Forfeited or expired(969)40.00 
Balance at end of period (unvested)225,661 $38.09 
(1) PSUs are presented as outstanding, granted and forfeited in the table above assuming targets are met and the awards pay out at 100%. PSU
    awards are settled with payouts ranging from 0% and 200% of the target award value based on the Company's performance relative to a predefined
    peer group over a fixed three-year performance period. The performance adjustment represents the difference in shares ultimately awarded due to
    performance attainment above or below target.
The following table summarizes data related to the Company's outstanding PSUs as of March 31, 2024:
Grant Year(1)
Grant PricePerformance PeriodPSUs Outstanding
2022$44.44 2022 to 202449,836
2023$37.17 2023 to 202578,087
2024$35.60 2024 to 202697,738
(1)Vesting factor will be interpolated between 0% and 200% of PSUs outstanding based on the Company's performance relative to a predefined peer
    group over a fixed three-year performance period.
The Company recorded compensation cost associated with PSUs of $114 and $579 for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, maximum unrecognized compensation cost at 200% payout related to the unvested PSUs was $14,786, and the weighted average remaining performance period over which the cost could be recognized was 2.39 years.
Employee Stock Purchase Plan
The Company maintains an employee stock purchase plan under which employees, through payroll deductions, are able to purchase shares of Company common stock. The employee purchase price is 95% of the lower of the market price on the first or last day of the offering period. The maximum number of shares issuable during any offering period is 200,000 shares, limited to 725 shares for each participating employee. There were 10,606 and 8,214 shares of common stock issued under the ESPP with proceeds from employee payroll withholdings of $388 and $305 during the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, there were 2,283,620 shares available for issuance under the ESPP.







43
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (14)—Related party transactions
Loans
The Bank has made and expects to continue to make loans to the directors, certain management, significant shareholders, and executive officers of the Company and their related interests in the ordinary course of business, in compliance with regulatory requirements.
An analysis of loans to executive officers, certain management, significant shareholders and directors of the Bank and their related interests is presented below:
Loans outstanding at January 1, 2024$49,073 
New loans and advances1,894 
Change in related party status— 
Repayments(1,474)
Loans outstanding at March 31, 2024$49,493 
Unfunded commitments to certain executive officers, certain management and directors and their related interests totaled $54,212 and $44,206 at March 31, 2024 and December 31, 2023, respectively.
Deposits
The Bank held deposits from related parties totaling $338,935 and $316,141 as of March 31, 2024 and December 31, 2023, respectively.
Leases
The Bank leases various office spaces from entities owned by certain directors of the Company under varying terms. Lease expense for these properties totaled $90 for both the three months ended March 31, 2024 and 2023.
Aviation lease
Through a wholly-owned subsidiary, FBK Aviation, LLC, the Company owns and maintains an aircraft. FBK Aviation, LLC maintains a non-exclusive aircraft lease with an entity owned by one of the Company's directors. The Company recognized income of $24 and $7 during the three months ended March 31, 2024 and 2023, respectively, under this agreement.
Subsequent to March 31, 2024, the Company renegotiated the lease agreement with the existing director and executed a non-exclusive aircraft lease with an entity owned by another one of the Company's directors.
Equity investment in preferred stock and master loan purchase agreement
During the year ended December 31, 2022, the Company invested in preferred stock of a privately held entity of which an executive officer of the Company is on the Board of directors of the investee. This investment is included in other assets on the consolidated balance sheets with a carrying amount of $10,000 as of both March 31, 2024 and December 31, 2023, and is being accounted for as an equity security without readily determinable market value. No gains or losses have been recognized to date associated with this investment.
Concurrently, the Company also entered a separate master loan purchase agreement with the entity to purchase up to $250,000 in manufactured loan housing production over an initial five-year term. During the three months ended March 31, 2024, the Company purchased $9,225 of loans HFI under this agreement. No such loans were purchased during the three months ended March 31, 2023. As of March 31, 2024 and December 31, 2023, the amortized cost of these loans HFI amounted to $41,048 and $32,154, respectively.






44

ITEM 2 – Management’s discussion and analysis of financial condition and results of operations
The following is a discussion of our financial condition as of March 31, 2024 and December 31, 2023, and our results of operations for the three months ended March 31, 2024 and 2023, and should be read in conjunction with our audited consolidated financial statements set forth in our Annual Report on Form 10-K for the year ended December 31, 2023, that was filed with the SEC on February 27, 2024, and with the accompanying unaudited notes to the condensed consolidated financial statements set forth in this Report.
Forward-looking statements
Certain statements contained in this Report that are not historical in nature may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding the Company’s future plans, results, strategies, and expectations, including expectations around changing economic markets. These statements can generally be identified by the use of the words and phrases “may,” “will,” “should,” “could,” “would,” “goal,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target,” “aim,” “predict,” “continue,” “seek,” and other variations of such words and phrases and similar expressions. These forward-looking statements are not historical facts, and are based upon management's current expectations, estimates, and projections, many of which, by their nature, are inherently uncertain and beyond the Company’s control. The inclusion of these forward-looking statements should not be regarded as a representation by the Company or any other person that such expectations, estimates, and projections will be achieved. Accordingly, the Company cautions shareholders and investors that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict. Actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements including, without limitation, (1) current and future economic conditions, including the effects of inflation, interest rate fluctuations, changes in the economy or global supply chain, supply-demand imbalances affecting local real estate prices, and high unemployment rates in the local or regional economies in which the Company operates and/or the US economy generally, (2) changes in government interest rate policies and its impact on the Company’s business, net interest margin, and mortgage operations, (3) any continuation of the recent turmoil in the banking industry, including the associated impact to the Company and other financial institutions of any regulatory changes or other mitigation efforts taken by government agencies in response, (4) increased competition for deposits, (5) the Company’s ability to effectively manage problem credits, (6) any deterioration in commercial real estate market fundamentals, (7) the Company’s ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions, (8) the Company’s ability to successfully execute its various business strategies, (9) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, including legislative developments, (10) the effectiveness of the Company’s cybersecurity controls and procedures to prevent and mitigate attempted intrusions, (11) the Company's dependence on information technology systems of third party service providers and the risk of systems failures, interruptions, or breaches of security, and (12) the impact of natural disasters, pandemics, and/or acts of war or terrorism, (13) events giving rise to international or regional political instability, including the broader impacts of such events on financial markets and/or global macroeconomic environments, and (14) general competitive, economic, political, and market conditions. Further information regarding the Company and factors which could affect the forward-looking statements contained herein can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and in any of the Company’s subsequent filings with the SEC. Many of these factors are beyond the Company’s ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, shareholders and investors should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this Report, and the Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. The Company qualifies all forward-looking statements by these cautionary statements.



45


Critical accounting policies
Our financial statements are prepared in accordance with GAAP and general practices within the banking industry. Within our financial statements, certain financial information contains approximate measurements of financial effects of transactions and impacts at the consolidated balance sheet dates and our results of operations for the reporting periods. We monitor the status of proposed and newly issued accounting standards to evaluate the impact on our financial condition and results of operations. Our accounting policies, including the impact of any newly issued accounting standards if applicable, are discussed in further detail in Note 1, "Basis of presentation," in the notes to our consolidated financial statements in our Annual Report.
46

Financial highlights
The following table presents certain selected historical consolidated income statement and balance sheet data and key performance indicators and other measures as of the dates or for the periods indicated. Our historical results for any prior period are not necessarily indicative of results to be expected in any future period.
As of or for the three months endedAs of or for the year-ended
March 31,December 31,
(dollars in thousands, except share data)2024 2023 2023 
Selected Balance Sheet Data
Cash and cash equivalents$870,730 $1,319,951 $810,932 
Loans HFI9,288,909 9,365,996 9,408,783 
Allowance for credit losses on loans HFI(151,667)(138,809)(150,326)
Loans held for sale82,704 82,515 67,847 
Investment securities, at fair value1,464,682 1,474,064 1,471,973 
Total assets12,548,320 13,101,147 12,604,403 
Interest-bearing deposits (non-brokered)8,191,962 8,693,515 8,179,430 
Brokered deposits130,845 251 150,475 
Noninterest-bearing deposits2,182,121 2,489,149 2,218,382 
Total deposits10,504,928 11,182,915 10,548,287 
Borrowings360,821 312,131 390,964 
Allowance for credit losses on unfunded commitments7,700 18,463 8,770 
Total common shareholders' equity1,479,526 1,369,696 1,454,794 
Selected Statement of Income Data
Total interest income$176,128 $159,480 $678,410 
Total interest expense76,638 55,820 271,193 
Net interest income99,490 103,660 407,217 
Provisions for credit losses782 491 2,539 
Total noninterest income7,962 23,349 70,543 
Total noninterest expense72,420 80,440 324,929 
Income before income taxes34,250 46,078 150,292 
Income tax expense6,300 9,697 30,052 
Net income applicable to noncontrolling interest— — 16 
Net income applicable to FB Financial Corporation $27,950 $36,381 $120,224 
Net interest income (tax-equivalent basis)$100,199 $104,493 $410,562 
Per Common Share
Basic net income$0.60 $0.78 $2.57 
Diluted net income0.59 0.78 2.57 
Book value(1)
31.55 29.29 31.05 
Tangible book value(2)
26.21 23.86 25.69 
Cash dividends declared0.17 0.15 0.60 
Selected Ratios
Return on average:
Assets(3)
0.89 %1.15 %0.95 %
Common shareholders' equity(3)
7.70 %11.0 %8.74 %
Tangible common equity(2)
9.29 %13.6 %10.7 %
Efficiency ratio67.4 %63.3 %68.0 %
Core efficiency ratio (tax-equivalent basis)(2)
58.1 %63.4 %62.9 %
Loans HFI to deposit ratio88.4 %83.8 %89.2 %
Noninterest-bearing deposits to total deposits 20.8 %22.3 %21.0 %
Net interest margin (tax-equivalent basis)3.42 %3.51 %3.44 %
Yield on interest-earning assets6.03 %5.38 %5.72 %
Cost of interest-bearing liabilities3.56 %2.61 %3.16 %
Cost of total deposits2.76 %1.94 %2.39 %
47

As of or for the three months endedAs of or for the year ended
March 31,December 31,
2024 2023 2023 
Credit Quality Ratios
Allowance for credit losses on loans HFI as a percentage of loans HFI1.63 %1.48 %1.60 %
Net charge-offs as a percentage of average loans HFI(0.02)%(0.02)%(0.01)%
Nonperforming loans HFI as a percentage of loans HFI0.73 %0.49 %0.65 %
Nonperforming assets as a percentage of total assets(4)
0.75 %0.61 %0.69 %
Capital Ratios (Company)
Total common shareholders' equity to assets11.8 %10.5 %11.5 %
Tangible common equity to tangible assets(2)
9.99 %8.68 %9.74 %
Tier 1 leverage11.3 %10.4 %11.3 %
Tier 1 risk-based capital12.8 %11.6 %12.5 %
Total risk-based capital15.0 %13.6 %14.5 %
Common Equity Tier 112.6 %11.3 %12.2 %
(1)Book value per share equals our total common shareholders’ equity divided by the number of shares of our common stock outstanding as of the date presented.
(2)Non-GAAP financial measure; See "GAAP reconciliation and management explanation of non-GAAP financial measures” and non-GAAP reconciliations herein.
(3)ROAA and ROAE is calculated by dividing annualized net income or loss for that period by our average assets or average equity for the same period.
(4)Includes $20,876, $20,528 and $21,229 of optional rights to repurchase delinquent GNMA loans as of March 31, 2024, March 31, 2023 and December 31, 2023, respectively.

GAAP reconciliation and management explanation of non-GAAP financial measures
We identify certain financial measures discussed in this Report as being “non-GAAP financial measures.” The non-GAAP financial measures presented in this Report are adjusted efficiency ratio (tax-equivalent basis), tangible book value per common share, tangible common equity to tangible assets and return on average tangible common equity.
In accordance with the SEC's rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our consolidated statements of income, balance sheets or statements of cash flows.
The non-GAAP financial measures that we discuss in this Report should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in our selected historical consolidated financial data may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar or with names similar to the non-GAAP financial measures we have discussed in our selected historical consolidated financial data when comparing such non-GAAP financial measures. The following reconciliation tables provide a more detailed analysis of these, and reconciliation for, each of non-GAAP financial measures.











48

Core efficiency ratio (tax-equivalent basis)
The core efficiency ratio (tax-equivalent basis) is a non-GAAP measure that excludes certain gains, losses and other selected items. Our management uses this measure in its analysis of our performance. Our management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges. The most directly comparable financial measure calculated in accordance with GAAP is the efficiency ratio.
The following table presents a reconciliation of our core efficiency ratio (tax-equivalent basis) to our efficiency ratio for the periods below:
(dollars in thousands)Three Months Ended March 31,Year Ended December 31,
2024 2023 2023 
Core efficiency ratio (tax-equivalent basis)
Total noninterest expense$72,420 $80,440 $324,929 
Less early retirement and severance costs— — 8,449 
Less (gain) loss on lease terminations— (72)1,770 
Less FDIC special assessment500 — 1,788 
Core noninterest expense$71,920 $80,512 $312,922 
Net interest income$99,490 $103,660 $407,217 
Net interest income (tax-equivalent basis)100,199 104,493 410,562 
Total noninterest income7,962 23,349 70,543 
Less (loss) gain from securities, net(16,213)69 (13,973)
Less gain (loss) on sales or write-downs of other real estate owned and other
    assets		565 (183)(27)
Less gain (loss) on change in fair value of commercial loans held for sale
   acquired in previous business combination		— 910 (2,114)
Core noninterest income23,610 22,553 86,657 
Total revenue$107,452 $127,009 $477,760 
Core revenue (tax-equivalent basis)$123,809 $127,046 $497,219 
Efficiency ratio 67.4 %63.3 %68.0 %
Core efficiency ratio (tax-equivalent basis)58.1 %63.4 %62.9 %


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Tangible book value per common share and tangible common equity to tangible assets
Tangible book value per common share and tangible common equity to tangible assets are non-GAAP measures that exclude the impact of goodwill and other intangibles used by management to evaluate capital adequacy. Because intangible assets, such as goodwill and other intangibles, vary extensively from company to company, we believe that the presentation of this information allows investors to more easily compare our capital position to other companies. The most directly comparable financial measure calculated in accordance with GAAP is book value per common share and our total shareholders’ equity to total assets.
The following table presents, as of the dates set forth below, tangible common equity compared with total common shareholders' equity, tangible book value per common share compared with our book value per common share and common equity to tangible assets compared to total common shareholders' equity to total assets:
March 31,
December 31,
(dollars in thousands, except share data)2024 2023 2023 
Tangible assets
Total assets$12,548,320 $13,101,147 $12,604,403 
Adjustments:
Goodwill(242,561)(242,561)(242,561)
Intangibles, net(7,920)(11,378)(8,709)
Tangible assets$12,297,839 $12,847,208 $12,353,133 
Tangible common equity
Total common shareholders' equity$1,479,526 $1,369,696 $1,454,794 
Adjustments:
Goodwill(242,561)(242,561)(242,561)
Intangibles, net(7,920)(11,378)(8,709)
Tangible common equity$1,229,045 $1,115,757 $1,203,524 
Common shares outstanding46,897,378 46,762,626 46,848,934 
Book value per common share$31.55 $29.29 $31.05 
Tangible book value per common share$26.21 $23.86 $25.69 
Total common shareholders' equity to total assets11.8 %10.5 %11.5 %
Tangible common equity to tangible assets9.99 %8.68 %9.74 %
Return on average tangible common equity
Return on average tangible common equity is a non-GAAP measure that uses average shareholders' equity and excludes the impact of goodwill and other intangibles. This measurement is used by management to provide a depiction of the our profitability without being impacted by its intangible assets, as intangible assets are not directly managed to generate earnings. The following table presents, as of the dates set forth below, reconciliations of total average tangible common equity to average shareholders' equity and return on average tangible common equity to return on average shareholders' equity:
Three Months Ended March 31,Year Ended December 31,
(dollars in thousands)2024 2023 2023 
Return on average tangible common equity
Total average common shareholders' equity$1,460,736 $1,343,227 $1,374,831 
Adjustments:
Average goodwill(242,561)(242,561)(242,561)
Average intangibles, net(8,299)(11,862)(10,472)
Average tangible common equity$1,209,876 $1,088,804 $1,121,798 
Net income applicable to FB Financial Corporation$27,950 $36,381 $120,224 
Return on average common shareholders' equity7.70 %11.0 %8.74 %
Return on average tangible common equity9.29 %13.6 %10.7 %


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Company overview
We are a financial holding company headquartered in Nashville, Tennessee. We operate primarily through our wholly-owned subsidiary bank, FirstBank, and its subsidiaries. FirstBank provides a comprehensive suite of commercial and consumer banking services to clients in select markets in Tennessee, Kentucky, Alabama and North Georgia. As of March 31, 2024, our footprint included 76 full-service branches serving the following Tennessee Metropolitan Statistical Areas: Nashville, Chattanooga (including North Georgia), Knoxville, Memphis, and Jackson in addition to Bowling Green, Kentucky and Birmingham, Florence and Huntsville, Alabama. Our banking services extend to 17 community markets throughout Tennessee and North Georgia. FirstBank also provides retail mortgage banking services utilizing its bank branch network and mortgage banking offices strategically located throughout the southeastern United States.
We operate through two segments, Banking and Mortgage. We generate most of our revenue in our Banking segment from interest on loans and investments, loan-related fees, trust and investment services and deposit-related fees. Our primary source of funding for our loans is customer deposits, however we have other sources of funds including unsecured credit lines, brokered CDs, and other borrowings. We generate most of our revenue in our Mortgage segment from origination fees and gains on sales in the secondary mortgage loan market, as well as from mortgage servicing revenues.
Overview of recent financial performance
Results of operations
Three months ended March 31, 2024 compared to the three months ended March 31, 2023
Our net income decreased during the three months ended March 31, 2024 to $28.0 million from $36.4 million for the three months ended March 31, 2023. Diluted earnings per common share were $0.59 and $0.78 for the three months ended March 31, 2024 and 2023, respectively. Our net income represented a ROAA of 0.89% and 1.15% for the three months ended March 31, 2024 and 2023, respectively, and a ROAE of 7.70% and 11.0% for the same periods. Our ROATCE for the three months ended March 31, 2024 and 2023 were 9.29% and 13.6%, respectively. See “GAAP reconciliation and management explanation of non-GAAP financial measures” in this Report for a discussion of tangible common equity and return on average tangible common equity.
During the three months ended March 31, 2024, our net interest income decreased to $99.5 million compared with $103.7 million in the three months ended March 31, 2023. Our net interest margin, on a tax-equivalent basis, decreased to 3.42% for the three months ended March 31, 2024 as compared to 3.51% for the three months ended March 31, 2023. The decrease in net interest margin was primarily driven by our volume of interest-earnings assets decreasing compared to an increase in our interest-bearing liabilities partially offset by higher interest rates.
Noninterest income for the three months ended March 31, 2024 decreased by $15.4 million to $8.0 million, down from $23.3 million for the three months ended March 31, 2023. The decrease in noninterest income was primarily due to a $16.2 million net loss on investment securities primarily related to the sale of $207.9 million of available-for-sale securities. Refer to the section “Other earnings assets” for additional information on the sale of the available-for sale securities.
Noninterest expense decreased to $72.4 million for the three months ended March 31, 2024, compared with $80.4 million for the three months ended March 31, 2023. The decrease in noninterest expense is due to decreases in salaries, commissions and employee benefits of $4.2 million primarily related to the Company's efficiency and scalability initiatives and updated methodology of deferrals for loan fees and loan origination expenses. Additionally, the decrease is reflective of decreases in legal and professional expenses, advertising and franchise tax expense.
Business segment highlights
We operate our business in two business segments: Banking and Mortgage. See Note 11, “Segment reporting” in the notes to our unaudited consolidated financial statements contained herein for a description of these business segments.
Banking
Three months ended March 31, 2024 compared to the three months ended March 31, 2023
Income before taxes from the Banking segment decreased for the three months ended March 31, 2024 to $31.1 million, compared to $45.8 million for the three months ended March 31, 2023. Net interest income decreased by $4.2 million to $97.1 million during the three months ended March 31, 2024 compared to $101.3 million during the three months ended March 31, 2023. Provisions for credit losses on loans HFI and unfunded loan commitments resulted in $0.8 million of
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provision expense during the three months ended March 31, 2024 compared to $0.2 million during the three months ended March 31, 2023. Noninterest income decreased to a loss of $4.8 million in the three months ended March 31, 2024 as compared to income of $11.5 million in the three months ended March 31, 2023. Similar to the discussion above, the decrease includes a net loss on investment securities of $16.2 million primarily associated with the sale of $207.9 million available-for-sale securities during the three months ended March 31, 2024 compared with a net gain on investment securities of $0.1 million for the three months ended March 31, 2023. Noninterest expense decreased to $60.3 million for three months ended March 31, 2024 compared to $66.8 million for the three months ended March 31, 2023 due to decreases in salaries, legal and professional fees, advertising and franchise tax expense.
Mortgage
Three months ended March 31, 2024 compared to the three months ended March 31, 2023
Activity in our Mortgage segment resulted in a pre-tax net contribution of $3.1 million for the three months ended March 31, 2024 compared to $0.3 million for the three months ended March 31, 2023. Net interest income was $2.4 million for both the three months ended March 31, 2024 and 2023. Provisions for credit losses on loans HFI and unfunded loan commitments resulted in a reversal of $0.1 million of provision expense during the three months ended March 31, 2024 compared to $0.3 million of provision expense during the three months ended March 31, 2023. Mortgage banking income increased $0.5 million to $12.6 million during the three months ended March 31, 2024 compared to $12.1 million for the three months ended March 31, 2023. Mortgage banking income primarily includes origination fees and realized gains and losses on the sale of mortgage loans, unrealized change in fair value of mortgage loans and derivatives, and mortgage loan servicing fees, which includes the net change in fair value of MSRs and related derivatives. Mortgage banking income is initially driven by the recognition of interest rate lock commitments at fair value at inception of the IRLCs. This is subsequently adjusted for changes in the overall interest rate environment offset by derivative contracts entered into to mitigate the interest rate exposure. Upon sale of the loan, the net fair value gain is reclassified as a realized gain on sale.
The components of mortgage banking income for the three months ended March 31, 2024 and 2023 were as follows:
Three Months Ended March 31,
(dollars in thousands)2024 2023 
Mortgage banking income  
Gains and fees from origination and sale of mortgage
   loans held for sale		$6,458 $8,146 
Net change in fair value of loans held for sale and derivatives1,821 (421)
Change in fair value on MSRs, net of hedging(3,041)(3,407)
Mortgage servicing income7,347 7,768 
Total mortgage banking income$12,585 $12,086 
Interest rate lock commitment volume$377,166 $375,042 
Interest rate lock commitment volume by purpose (%):
Purchase84.9 %86.2 %
Refinance15.1 %13.8 %
Mortgage sales$243,461 $332,307 
Mortgage sale margin2.65 %2.45 %
Closing volume$258,352 $295,760 
Outstanding principal balance of mortgage loans serviced$10,651,075 $11,028,420 
Noninterest expense for the three months ended March 31, 2024 and 2023 was $12.1 million and $13.7 million, respectively. This decrease is reflective of a decrease in salaries associated with our efficiency and scalability initiatives.
Results of operations
Throughout the following discussion of our operating results, we present our net interest income, net interest margin and efficiency ratio on a fully tax-equivalent basis. The fully tax-equivalent basis adjusts for the tax-favored status of net interest income from certain loans and investments.
Our tax-exempt income is converted to a tax-equivalent basis by adjusting for the combined federal and blended state statutory income tax rate of 26.06% for the three months ended March 31, 2024 and 2023.
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Net interest income
Net interest income is the most significant component of our earnings, generally comprising over 50% of our total revenues in a given period. Net interest income and margin are shaped by many factors, primarily the volume, term structure and mix of earning assets, funding mechanisms, and interest rate fluctuations. Other factors include accretion or amortization of discounts or premiums on purchased loans, prepayment risk on mortgage and investment–related assets, and the composition and maturity of earning assets and interest-bearing liabilities. Loans typically generate more interest income than investment securities with similar maturities. Funding from client deposits generally costs less than wholesale funding sources. Factors such as general economic activity, Federal Reserve monetary policy, and price volatility of competing alternative investments, can also exert significant influence on our ability to optimize the mix of assets and funding, net interest income and margin.
During the three months ended March 31, 2024, the U.S. Treasury yield curve became less inverted as long-term note and bond rates increased at a faster pace than shorter-term note rates. The curve remained inverted as of March 31, 2024, which is in contrast to the more normalized upward sloping U.S. Treasury yield curve exhibited during the three months ended March 31, 2023. The Federal Funds Target Rate range was 5.25% - 5.50% as of both March 31, 2024 and December 31, 2023. The target range for the federal funds rate has remained at 5.25% to 5.50% since the Federal Open Market Committee’s July 26, 2023 meeting.
On a tax-equivalent basis, net interest income decreased $4.3 million to $100.2 million for the three months ended March 31, 2024 as compared to $104.5 million for the three months ended March 31, 2023. Interest income, on a tax-equivalent basis, was $176.8 million for the three months ended March 31, 2024, compared to $160.3 million for the three months ended March 31, 2023, an increase of $16.5 million, which was primarily driven by increases in interest rates on loans HFI, taxable investment securities and interest-bearing deposits with other financial institutions, partially offset by a decrease in average interest-bearing deposits with other financial institutions. Total interest income represents an increase in yield on interest-earning assets to 6.03% for the three months ended March 31, 2024 compared with 5.38% for the three months ended March 31, 2023.
Interest income on loans HFI, on a tax-equivalent basis, increased $15.5 million to $155.0 million for the three months ended March 31, 2024 from $139.5 million for the three months ended March 31, 2023 due primarily to increasing interest rates. The average yield on loans HFI increased by 59 basis points period-over-period to 6.64% for the three months ended March 31, 2024 from 6.05% for the three months ended March 31, 2023. Our estimated contractual loan interest yield was 6.55% in the three months ended March 31, 2024 compared with 5.90% in the three months ended March 31, 2023.
The components of our loan yield for the three months ended March 31, 2024 and 2023 were as follows:
Three Months Ended March 31,
2024 2023 
(dollars in thousands)Interest
income		Average
yield		Interest
income		Average
yield
Loans HFI yield components:
Contractual interest rate on loans HFI(1)
$152,875 6.55 %$135,872 5.90 %
Origination and other loan fee income1,436 0.06 %3,101 0.13 %
Accretion on purchased loans387 0.02 %319 0.01 %
Nonaccrual interest collections258 0.01 %175 0.01 %
Total loans HFI yield$154,956 6.64 %$139,467 6.05 %
(1)Includes tax equivalent adjustment using combined marginal tax rate of 26.06%.
Origination and other loan fees impacted our NIM by 5 basis points and 10 basis points for the three months ended March 31, 2024 and 2023, respectively. The decrease was due to an updated methodology for deferrals.
Interest income on taxable investment securities increased $2.5 million to $9.1 million for the three months ended March 31, 2024 from $6.6 million for the three months ended March 31, 2023 due to the reinvestment of proceeds from the sale of AFS debt securities that were sold during the second half of 2023 to higher yielding U.S. government agency securities. The yield on taxable investment securities increased 72 basis points to 2.62% for the three months ended March 31, 2024 compared to 1.90% for the three months ended March 31, 2023.
Interest income on interest-bearing deposits with other financial institutions decreased to $7.1 million for the three months ended March 31, 2024 from $8.0 million for the three months ended March 31, 2023 due to a decrease in volume of
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interest-bearing deposits with other financial institutions partially offset by higher interest rates. The average balance of interest-bearing deposits with other financial institutions decreased $198.2 million to $530.4 million for the three months ended March 31, 2024 from $728.6 million for the three months ended March 31, 2023. The yield on interest-bearing deposits with other financial institutions increased 90 basis points to 5.36% for the three months ended March 31, 2024 compared to 4.46% for the three months ended March 31, 2023.
Interest expense was $76.6 million for the three months ended March 31, 2024, an increase of $20.8 million as compared to $55.8 million for the three months ended March 31, 2023. The increase was largely attributed to a rise in interest rates in interest-bearing deposit accounts, and specifically on money market and customer time deposit products. Interest expense on money market deposits increased $13.1 million to $37.6 million for the three months ended March 31, 2024 compared to $24.5 million for the three months ended March 31, 2023. Interest expense on customer time deposits increased $4.9 million to $14.1 million for the three months ended March 31, 2024 from $9.2 million for the three months ended March 31, 2023. The average rate on money market deposits increased 98 basis points from 2.95% for the three months ended March 31, 2023 to 3.93% for the three months ended March 31, 2024. The average rate on customer time deposits increased 136 basis points from 2.54% for the three months ended March 31, 2023 to 3.90% for the three months ended March 31, 2024. Total cost of interest-bearing deposits was 3.49% for the three months ended March 31, 2024 compared to 2.53% for the three months ended March 31, 2023.
The average balance of other borrowings increased $129.6 million to $131.3 million for the three months ended March 31, 2024 compared to $1.7 million for the three months ended March 31, 2023. As a result, interest expense on other borrowings increased to 4.83% for the three months ended March 31, 2024 compared to for the three months ended March 31, 2023. The increase is due primarily of borrowings from the Bank Term Funding Program. Refer to the section “Borrowings” for additional information on the BTFP.
The volume of our interest-earning assets decreased compared to an increase in our interest-bearing liabilities which resulted in our NIM, on a tax-equivalent basis, decreasing to 3.42% for the three months ended March 31, 2024 from 3.51% for the three months ended March 31, 2023. The shift in volume was partially offset by the effect of interest rates rising faster within our interest-earning assets compared to our interest-bearing liabilities.
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Average balance and interest yield/rate analysis
The table below shows the average balances, income and expense and yield and rates of each of our interest-earning assets and interest-bearing liabilities on a tax equivalent basis, if applicable, for the periods indicated.
Three Months Ended March 31,
2024 2023 
(dollars in thousands on a tax-equivalent basis)Average balancesInterest
income/
expense		Average
yield/
rate		Average balancesInterest
income/
expense		Average
yield/
rate
Interest-earning assets:
Loans HFI (1)(2)
$9,386,794 $154,956 6.64 %$9,346,708 $139,467 6.05 %
Mortgage loans held for sale48,566 851 7.05 %56,204 927 6.69 %
Commercial loans held for sale— — — %16,608 159 3.88 %
Investment securities:
Taxable1,399,237 9,105 2.62 %1,402,535 6,570 1.90 %
Tax-exempt (2)
241,379 1,950 3.25 %294,652 2,440 3.36 %
Total investment securities (2)
1,640,616 11,055 2.71 %1,697,187 9,010 2.15 %
Federal funds sold and reverse repurchase
   agreements		155,380 2,126 5.50 %188,013 1,855 4.00 %
Interest-bearing deposits with other financial
   institutions		530,390 7,066 5.36 %728,576 8,008 4.46 %
FHLB stock34,051 783 9.25 %47,094 887 7.64 %
Total interest earning assets (2)
11,795,797 176,837 6.03 %12,080,390 160,313 5.38 %
Noninterest Earning Assets:
Cash and due from banks167,732 154,270 
Allowance for credit losses on loans HFI(150,605)(134,803)
Other assets (3)(4)
777,155 761,757 
Total noninterest earning assets794,282 781,224 
Total assets$12,590,079 $12,861,614 
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing checking$2,539,084 $19,016 3.01 %$3,165,058 $19,060 2.44 %
Money market deposits3,849,080 37,570 3.93 %3,369,953 24,510 2.95 %
Savings deposits377,963 62 0.07 %458,023 64 0.06 %
Customer time deposits1,457,377 14,124 3.90 %1,472,221 9,221 2.54 %
Brokered and internet time deposits140,292 1,853 5.31 %1,607 8 2.02 %
Time deposits1,597,669 15,977 4.02 %1,473,828 9,229 2.54 %
Total interest-bearing deposits8,363,796 72,625 3.49 %8,466,862 52,863 2.53 %
Other interest-bearing liabilities:
Securities sold under agreements to
    repurchase and federal funds purchased		24,219 149 2.47 %27,139 46 0.69 %
Federal Home Loan Bank advances— — — %41,389 499 4.89 %
Subordinated debt129,718 2,286 7.09 %126,161 2,402 7.72 %
Other borrowings 131,318 1,578 4.83 %1,688 10 2.40 %
Total other interest-bearing liabilities285,255 4,013 5.66 %196,377 2,957 6.11 %
Total interest-bearing liabilities8,649,051 76,638 3.56 %8,663,239 55,820 2.61 %
Noninterest-bearing liabilities:
Demand deposits2,227,175 2,588,756 
Other liabilities(4)
253,024 266,299 
Total noninterest-bearing liabilities2,480,199 2,855,055 
Total liabilities11,129,250 11,518,294 
FB Financial Corporation common
   shareholders' equity		1,460,736 1,343,227 
Noncontrolling interest93 93 
         Shareholders' equity1,460,829 1,343,320 
Total liabilities and shareholders' equity$12,590,079 $12,861,614 
Net interest income (tax-equivalent basis)(2)
$100,199 $104,493 
Interest rate spread (tax-equivalent basis)(2)
2.47 %2.77 %
Net interest margin (tax-equivalent basis) (2)(5)
3.42 %3.51 %
Cost of total deposits2.76 %1.94 %
Average interest-earning assets to average
    interest-bearing liabilities		136.4 %139.4 %
(1)Average balances of nonaccrual loans and overdrafts are included in average loan balances.
(2)Interest income includes the effects of taxable-equivalent adjustments using a U.S. federal income tax rate and, where applicable, state income tax to increase tax-exempt interest income to a tax-equivalent basis. The net tax-equivalent adjustment amounts included in income were $0.7 million and $0.8 million for three months ended March 31, 2024 and 2023, respectively.
(3)Includes average net unrealized losses on investment securities available for sale of $194.1 million and $222.8 million for the three months ended March 31, 2024 and 2023, respectively.
(4)Includes average of optional rights to repurchase government guaranteed GNMA mortgage loans previously sold that have become past due greater than 90 days of $20.8 million and $23.2 million for the three months ended March 31, 2024 and 2023, respectively.
(5)The NIM is calculated by dividing annualized net interest income, on a tax-equivalent basis, by average total earning assets.
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Yield/rate and volume analysis
The tables below present the components of the changes in net interest income for the three months ended March 31, 2024 and 2023. For each major category of interest-earning assets and interest-bearing liabilities, information is provided with respect to changes due to average volume and changes due to interest rates, with the changes in both volume and interest rates allocated to these two categories based on the proportionate absolute changes in each category.
Three months ended March 31, 2024 compared to three months ended March 31, 2023 due to changes in
(dollars in thousands on a tax-equivalent basis)VolumeYield/rateNet increase
(decrease)
Interest-earning assets:
Loans HFI(1)(2)
$662 $14,827 $15,489 
Loans held for sale - mortgage(134)58 (76)
Loans held for sale - commercial— (159)(159)
Investment securities:
   Taxable(21)2,556 2,535 
   Tax-exempt(2)
(430)(60)(490)
Federal funds sold and reverse repurchase agreements
(447)718 271 
Interest-bearing deposits with other financial institutions(2,640)1,698 (942)
FHLB stock(300)196 (104)
Total interest income(2)
(3,310)19,834 16,524 
Interest-bearing liabilities:
Interest-bearing checking deposits(4,688)4,644 (44)
Money market deposits4,677 8,383 13,060 
Savings deposits(13)11 (2)
Customer time deposits(144)5,047 4,903 
Brokered and internet time deposits1,832 13 1,845 
Securities sold under agreements to repurchase and federal funds
   purchased		(18)121 103 
Federal Home Loan Bank advances(499)— (499)
Subordinated debt63 (179)(116)
Other borrowings1,558 10 1,568 
Total interest expense2,768 18,050 20,818 
Change in net interest income(2)
$(6,078)$1,784 $(4,294)
(1)Average loans are presented gross, including nonaccrual loans and overdrafts.
(2)Interest income includes the effects of the tax-equivalent adjustments to increase tax-exempt interest income to a tax-equivalent basis. The net taxable-equivalent adjustment amounts included was $0.7 million and $0.8 million for the three months ended March 31, 2024 and 2023, respectively.


Provision for credit losses
The provision for credit losses charged to operating expense is an amount which, in the judgment of management, is necessary to maintain the allowance for credit losses at an appropriate level under the current expected credit loss model. The determination of the amount of the allowance is complex and involves a high degree of judgment and subjectivity. Refer to Note 1, “Basis of presentation” in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 for a detailed discussion regarding ACL methodology.
Our allowance for credit losses calculation as of March 31, 2024 resulted from management’s best estimate of losses over the life of loans and unfunded commitments in our portfolio in accordance with the CECL approach. Our calculation included qualitative adjustments for projected slower GDP growth over the next two to three years and expected elevated unemployment levels. We also considered the current global economic environment, including continued pressures on supply chains (and more specifically, oil and energy) and increased uncertainty due to geopolitical turmoil and its impact
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on the U.S. economy. These factors may continue to lead to increased volatility in forecasted macroeconomic variables, a key input to our calculated level of allowance for credit losses.
We recognized a provision for credit losses on loans HFI for the three months ended March 31, 2024 and 2023 of $1.9 million and $5.0 million, respectively. The current period provision on loans HFI resulted from management’s best estimate of losses over the life of loans in our portfolio in accordance with the CECL approach and was impacted by projected deterioration in the CRE portfolio which was adjusted qualitatively. For the three months ended March 31, 2023, the increase in the provision for credit losses on loans HFI was driven by an increase in loans HFI outstanding period-over-period and the increased possibility of a future recession and inflationary pressures.
We also estimate expected credit losses on off-balance sheet loan commitments that are not accounted for as derivatives. When applying the CECL methodology to estimate expected credit loss, we consider the likelihood that funding will occur, the contractual period of exposure to credit loss, the risk of loss, historical loss experience, and current conditions along with expectations of future economic conditions. For the three months ended March 31, 2024, we recorded a reversal of provision for credit losses on unfunded commitments of $1.1 million compared to $4.5 million during the three months ended March 31, 2023. The reversal of provision for credit losses on unfunded commitments for the three months ended March 31, 2024 and 2023 is primarily due to management's concentrated effort to reduce unfunded loan commitments during the periods indicated including a $135.3 million and a $298.8 million decrease in our construction category as these projects moved to permanent financing for the three months ended March 31, 2024 and 2023. As such, this resulted in a $1.0 million and $4.5 million decrease in required ACL related to the unfunded commitments in our construction portfolio for the three months ended March 31, 2024 and 2023.
During the three months ended March 31, 2024 and 2023, it was determined that all AFS debt securities that experienced a decline in fair value below amortized cost basis were due to noncredit-related factors. Therefore, there was no provision for credit losses recognized on AFS debt securities during the three months ended March 31, 2024 or 2023.
Noninterest income
The following table sets forth the components of noninterest income for the periods indicated:
 Three Months Ended March 31,
(dollars in thousands)2024 2023 
Mortgage banking income$12,585 $12,086 
Service charges on deposit accounts3,141 3,053 
Investment services and trust income3,230 2,378 
ATM and interchange fees2,944 2,396 
(Loss) gain from investment securities, net(16,213)69 
Gain (loss) on sales or write-downs of other real estate owned and other assets565 (183)
Other income1,710 3,550 
Total noninterest income$7,962 $23,349 
Noninterest income amounted to $8.0 million for the three months ended March 31, 2024, a decrease of $15.4 million, or 66%, as compared to $23.3 million for the three months ended March 31, 2023. Changes in selected components of noninterest income in the above table are discussed below.
Net loss from investment securities was $16.2 million for the three months ended March 31, 2024 compared to a $0.1 million net gain for the three months ended March 31, 2023. The net loss from investment securities during the three months ended March 31, 2024 is the result of management's election to sell $207.9 million of AFS debt securities to reinvest the proceeds into higher yielding AFS securities. Refer to the section “Other earning assets” for additional information on the sale of the AFS debt securities.
Other income decreased $1.8 million to $1.7 million during the three months ended March 31, 2024 as compared to $3.6 million during the three months ended March 31, 2023. This decrease is primarily related to a $0.9 million gain associated with the change in fair value of the commercial loans held for sale portfolio during the three months ended March 31, 2023. No such gain or loss was recorded during the three months ended March 31, 2024 as the final relationship was exited during the year ended December 31, 2023. Additionally, swap fees decreased $0.4 million during the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to fewer swap trades in the current year due most notably to the conversion to SOFR during the three months ended March 31, 2023.
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Noninterest expense
The following table sets forth the components of noninterest expense for the periods indicated:
 Three Months Ended March 31,
(dollars in thousands)2024 2023 
Salaries, commissions and employee benefits$44,618 $48,788 
Occupancy and equipment expense6,614 5,909 
Data processing 2,408 2,113 
Legal and professional fees1,919 3,108 
Advertising1,171 2,133 
Amortization of core deposit and other intangibles789 990 
Other expense14,901 17,399 
Total noninterest expense$72,420 $80,440 
Noninterest expense decreased by $8.0 million during the three months ended March 31, 2024 to $72.4 million as compared to $80.4 million in the three months ended March 31, 2023. Changes in selected components of noninterest expense in the above table are discussed below.
Salaries, commissions and employee benefits expense was the largest component of noninterest expense representing 62% and 61% of total noninterest expense for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, salaries, commissions and employee benefits expense decreased $4.2 million, or 9%, to $44.6 million as compared to $48.8 million for the three months ended March 31, 2023. This change was attributable to a $2.5 million decrease stemming from the Company's efficiency and scalability initiatives, as well as a $2.1 million decrease from the Company applying an updated deferral methodology for loan fees and loan origination expenses.
Legal and professional expense decreased by $1.2 million during the three months ended March 31, 2024 to $1.9 million as compared to $3.1 million during the three months ended March 31, 2023. The decrease in legal and professional expenses was caused by decreases in consulting and other professional fees as these were increased during the three months ended March 31, 2023 due to internal projects.
Advertising expense includes expenses related to sponsorships, advertising, marketing, customer relations and business development, and public relations. During the three months ended March 31, 2024, advertising expense decreased $1.0 million to $1.2 million compared to $2.1 million during the three months ended March 31, 2023. This decrease is primarily attributable to marketing rebate activity with partners earned through higher transaction volumes during the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
Other noninterest expense primarily includes mortgage servicing expenses, regulatory fees and deposit insurance assessments, software license and maintenance fees and various other miscellaneous expenses. Other noninterest expense decreased $2.5 million during the three months ended March 31, 2024 to $14.9 million compared to $17.4 million during the three months ended March 31, 2023. The decrease was primarily related to a $2.8 million decrease in franchise tax expense which was partially offset by $0.5 million expense related to the FDIC special assessment.
Efficiency ratio
The efficiency ratio is one measure of productivity in the banking industry. This ratio is calculated to measure the cost of generating one dollar of revenue. That is, the ratio is designed to reflect the percentage of one dollar which must be expended to generate that dollar of revenue. This ratio is calculated by dividing noninterest expense by the sum of net interest income and noninterest income. For a core efficiency ratio, we exclude certain gains, losses and expenses we do not consider core to our business.
Our efficiency ratio was 67.4% and 63.3% for the three months ended March 31, 2024 and 2023, respectively. Our core efficiency ratio, on a tax-equivalent basis, was 58.1% and 63.4% for the three months ended March 31, 2024 and 2023, respectively. See “GAAP reconciliation and management explanation of non-GAAP financial measures” in this Report for a discussion of the core efficiency ratio.

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Income taxes
Income tax expense was $6.3 million and $9.7 million for the three months ended March 31, 2024 and 2023, respectively. This represents effective tax rates of 18.4% and 21.0% for the three months ended March 31, 2024 and 2023, respectively. The primary differences from the enacted rates are applicable state income taxes and certain expenses that are not deductible reduced for non-taxable income and additional deductions for equity-based compensation upon vesting of restricted stock units. Refer to Note 7 “Income taxes” in the notes to the consolidated financial statements for additional information regarding the Company's income tax expense and effective tax rates.
Financial condition
The following discussion of our financial condition compares balances as of March 31, 2024 and December 31, 2023.
Loan portfolio
The following table sets forth the balance and associated percentage of each class of financing receivable in our loan portfolio as of the dates indicated:
March 31,December 31,
 2024 2023 
(dollars in thousands)CommittedAmount Outstanding% of total outstandingCommittedAmount Outstanding% of total outstanding
Loan Type:    
Commercial and industrial
$2,877,020 $1,621,611 17 %$2,982,967 $1,720,733 18 %
Construction1,859,458 1,268,883 14 %2,123,177 1,397,313 15 %
Residential real estate:
1-to-4 family mortgage1,579,309 1,577,824 17 %1,569,525 1,568,552 17 %
Residential line of credit1,252,245 549,306 6 %1,231,038 530,912 6 %
Multi-family mortgage640,128 615,081 7 %627,387 603,804 6 %
Commercial real estate:
Owner-occupied1,313,407 1,236,007 13 %1,305,503 1,232,071 13 %
Non-owner occupied2,073,896 1,991,526 21 %2,026,491 1,943,525 21 %
Consumer and other453,729 428,671 5 %437,382 411,873 4 %
Total loans$12,049,192 $9,288,909 100 %$12,303,470 $9,408,783 100 %
Our loans HFI portfolio is our most significant earning asset, comprising 74% and 75% of our total assets at March 31, 2024 and December 31, 2023, respectively. Our strategy is to grow our loan portfolio by originating quality commercial and consumer type loans that comply with our credit policies and that produce revenues consistent with our financial objectives. Our overall lending approach is primarily focused on providing credit to our customers directly in the markets we serve, but we are also party to loan syndications and participations from other banks (collectively, “participated loans”). As of March 31, 2024 and December 31, 2023, loans held for investment included approximately $217.1 million and $254.6 million, respectively, related to participated loans. We also sell loan participations to unaffiliated third-parties as part of our credit risk management and balance sheet management strategy. During the three months ended March 31, 2024 and 2023, we sold $8.0 million and $4.4 million in loan participations, respectively. All loans, whether or not we act as a participant, are underwritten to the same standards as all other loans we originate. We believe our loan portfolio is well-balanced, which provides us with the opportunity to grow while monitoring our loan concentrations.
Loan concentrations are considered to exist when there are amounts loaned to a number of borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. Our lending activity is heavily concentrated in the geographic market areas we serve, with the highest concentration in Tennessee. This geographic concentration subjects our loan portfolio to the general economic conditions within the state. The risks created by this concentration have been considered by management in the determination of the appropriateness of the allowance for credit losses on loans HFI. As of March 31, 2024 and December 31, 2023, there were no concentrations of loans exceeding 10% of total loans other than our exposure to Tennessee, Alabama and the categories of loans disclosed in the table above. We believe our loan portfolio is diversified relative to industry concentrations across the various loan portfolio categories.
Banking regulators have established guidelines of less than 100% of tier 1 capital plus allowance for credit losses in construction lending and less than 300% of tier 1 capital plus allowance for credit losses in commercial real estate lending that management monitors as part of the risk management process. The construction concentration ratio is a percentage
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of the outstanding construction and land development loans to total tier 1 capital plus allowance for credit losses. The commercial real estate concentration ratio is a percentage of the outstanding balance of non-owner occupied commercial real estate, multifamily, and construction and land development loans to tier 1 capital plus allowance for credit losses. Management strives to operate within the thresholds set forth above. When our ratios are in excess of one or both of these guidelines, banking regulators generally require an increased level of monitoring in these lending areas by management.
The table below shows concentration ratios for the Bank and Company as of March 31, 2024 and December 31, 2023.
As a percentage (%) of tier 1 capital plus allowance for credit losses
FirstBankFB Financial Corporation
March 31, 2024
Construction83.2 %81.4 %
Commercial real estate255.3 %249.6 %
December 31, 2023
Construction93.3 %91.2 %
Commercial real estate265.1 %259.0 %
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Loan categories:
The principal categories of our loans held for investment portfolio are discussed below:
Commercial and industrial loans.
Commercial and industrial loans are typically made to small and medium-sized manufacturing, wholesale, retail and service businesses, and farmers for working capital and operating needs and business expansions. This category also includes loans secured by manufactured housing receivables made primarily to manufactured housing communities. Commercial and industrial loans generally include lines of credit and loans with maturities of five years or less. Commercial and industrial loans are generally made with operating cash flows as the primary source of repayment, but may also include collateralization by inventory, accounts receivable, equipment and personal guarantees.
Construction loans.
Construction loans include commercial construction, land acquisition and land development loans and single-family interim construction loans to small and medium-sized businesses and individuals. These loans are generally secured by the land or the real property being built and are made based on our assessment of the value of the property on an as-completed basis and repayment depends upon project completion and sale, refinancing, or operation of the real estate.
1-4 family mortgage loans.
Our residential real estate 1-4 family mortgage loans are primarily made with respect to and secured by single family homes, including manufactured homes with real estate, which are both owner-occupied and investor owned. Repayment depends primarily upon the cash flow of the borrower as well as the value of the real estate collateral.
Residential line of credit loans.
Our residential line of credit loans are primarily revolving, open-end lines of credit secured by 1-4 residential properties. Repayment depends primarily upon the cash flow of the borrower as well as the value of the real estate collateral.
Multi-family residential loans.
Our multi-family residential loans are primarily secured by multi-family properties, such as apartments and condominium buildings. Repayment depends primarily upon the cash flow of the borrower as well as the value of the real estate collateral.
Commercial real estate owner-occupied loans.
Our commercial real estate owner-occupied loans include loans to finance commercial real estate owner occupied properties for various purposes including use as offices, warehouses, production facilities, health care facilities, retail centers, restaurants, churches and agricultural based facilities. Commercial real estate owner-occupied loans are typically repaid through the ongoing business operations of the borrower.
Commercial real estate non-owner occupied loans.
Our commercial real estate non-owner occupied loans include loans to finance commercial real estate investment properties for various purposes including use as offices, warehouses, health care facilities, hotels, mixed-use residential/commercial, manufactured housing communities, retail centers, multifamily properties, assisted living facilities and agricultural based facilities. Commercial real estate non-owner occupied loans are typically repaid with the funds received from the sale or refinancing of the property or rental income from such property.
Consumer and other loans. 
Consumer and other loans include loans to individuals for personal, family and household purposes, including car, boat and other recreational vehicle loans, manufactured homes (without real estate) and personal lines of credit. Consumer loans are generally secured by vehicles and other household goods, with repayment depending primarily on the cash flow of the borrower. Other loans also include loans to states and political subdivisions in the U.S. and are repaid through tax revenues or refinancing.






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As part of our lending policy and risk management activities, we track lending exposure of commercial and industrial and owner-occupied commercial real estate by industry classification (as defined by the North American Industry Classification System) and type to determine potential risks associated with industry concentrations, and if any risk issues could lead to additional credit loss exposure. The table below provides a summary of our commercial and industrial and owner-occupied commercial real estate portfolios by industry classification.
March 31, 2024
(dollars in thousands)CommittedAmount OutstandingNonperforming
Commercial and industrial
Real estate rental and leasing$539,837 $320,040 $163 
Finance and insurance473,762 326,585 53 
Construction399,154 112,145 4,899 
Manufacturing258,171 172,763 4,479 
Wholesale trade162,511 91,737 189 
Professional, scientific and technical services162,051 92,749 2,332 
Information153,478 64,878 — 
Retail trade104,926 65,643 9,146 
Other services (except public administration)99,885 60,412 — 
Administrative and support and waste management and
   remediation services		94,555 56,621 2,313 
Health care and social assistance90,024 56,614 554 
Transportation and warehousing89,537 77,029 136 
Educational services66,010 29,328 — 
Arts, entertainment and recreation40,068 29,268 — 
Accommodation and food services27,292 19,906 50 
Agriculture, forestry, fishing and hunting24,316 16,794 315 
Other 91,443 29,099 14 
Total $2,877,020 $1,621,611 $24,643 
Commercial real estate owner-occupied
Real estate rental and leasing$243,473 $231,380 $— 
Other services (except public administration)192,527 188,429 126 
Retail trade158,327 153,250 — 
Health care and social assistance127,183 125,808 237 
Accommodation and food services109,422 108,358 — 
Manufacturing86,451 83,047 75 
Construction69,407 63,152 — 
Wholesale trade64,765 61,597 — 
Transportation and warehousing62,632 34,734 — 
Professional, scientific and technical services39,954 38,027 199 
Arts, entertainment and recreation36,669 35,093 — 
Agriculture, forestry, fishing and hunting27,743 25,527 989 
Educational services23,193 21,352 — 
Finance and insurance17,934 17,668 — 
Management of companies and enterprises16,375 14,505 — 
Information16,041 14,165 883 
Other 21,311 19,915 560 
Total $1,313,407 $1,236,007 $3,069 
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Additionally, we track our lending exposure of non-owner occupied commercial real estate and construction by collateral property type to determine potential risks associated with collateral types, and if any risk issues could lead to additional credit loss exposure.
The following table provides a summary of our non-owner occupied commercial real estate and construction loan portfolios by collateral property type:
March 31, 2024
(dollars in thousands)CommittedAmount OutstandingNonperforming
Commercial real estate non-owner occupied
Retail$505,335 $494,932 $368 
Office378,401 355,977 31 
Warehouse and industrial332,295 304,516 — 
Hotel317,053 315,435 2,851 
Self-storage141,051 134,022 — 
Land-mobile home park108,353 102,419 — 
Assisted living and special care facilities89,714 89,295 — 
Healthcare facility74,125 73,454 — 
Restaurants, bars and event venues38,417 36,552 — 
Recreation, sports and entertainment29,842 29,842 — 
Other 59,310 55,082 — 
Total $2,073,896 $1,991,526 $3,250 
Construction
Consumer:
Construction$190,832 $133,034 $2,436 
Land38,102 36,172 75 
Commercial:
Multi-family346,380 162,305 — 
Land276,234 238,255 — 
Retail25,936 20,191 — 
Convenience store and gas station19,523 14,787 — 
Recreation, sports and entertainment18,252 3,013 — 
Office15,380 12,876 — 
Self-storage13,393 5,379 — 
Car wash10,309 8,119 — 
Healthcare facility9,300 9,074 — 
Other26,739 12,075 — 
Residential Development:
Construction698,016 484,705 — 
Land127,881 91,686 3,151 
Lots43,181 37,212 — 
Total $1,859,458 $1,268,883 $5,662 



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Loan maturity and sensitivities
The following table presents the contractual maturities of our loan portfolio as of March 31, 2024. Loans with scheduled maturities are reported in the maturity category in which the payment is due. Demand loans with no stated maturity and overdrafts are reported in the “due in 1 year or less” category. Loans that have adjustable rates are shown as amortizing to final maturity rather than when the interest rates are next subject to change. The tables do not include prepayment assumptions or scheduled repayments.
March 31, 2024
Loan type (dollars in thousands)Maturing in one
year or less		Maturing in one
to five years		Maturing in
five to fifteen years		Maturing after
fifteen years		Total
Commercial and industrial$748,303 $763,058 $109,285 $965 $1,621,611 
Construction808,279 390,654 61,427 8,523 1,268,883 
Residential real estate:
1-to-4 family mortgage66,691 444,912 230,419 835,802 1,577,824 
Residential line of credit47,730 97,403 403,917 256 549,306 
Multi-family mortgage50,308 420,460 124,714 19,599 615,081 
Commercial real estate:
Owner-occupied129,691 685,765 396,763 23,788 1,236,007 
Non-owner occupied195,992 1,032,690 746,649 16,195 1,991,526 
Consumer and other21,908 72,428 75,499 258,836 428,671 
Total ($)$2,068,902 $3,907,370 $2,148,673 $1,163,964 $9,288,909 
Total (%)22.3 %42.1 %23.1 %12.5 %100.0 %
For loans due after one year or more, the following table presents the interest rate composition for loans outstanding as of March 31, 2024.
March 31, 2024
Loan type (dollars in thousands)Fixed
interest rate		Floating
interest rate		Total
Commercial and industrial$400,452 $472,856 $873,308 
Construction118,998 341,606 460,604 
Residential real estate:
1-to-4 family mortgage1,146,882 364,251 1,511,133 
Residential line of credit2,088 499,488 501,576 
Multi-family mortgage337,724 227,049 564,773 
Commercial real estate:
Owner-occupied800,520 305,796 1,106,316 
Non-owner occupied968,326 827,208 1,795,534 
Consumer and other380,172 26,591 406,763 
Total ($)$4,155,162 $3,064,845 $7,220,007 
Total (%)57.6 %42.4 %100.0 %
The following table presents the contractual maturities of our loan portfolio segregated into fixed and floating interest rate loans as of March 31, 2024.
March 31, 2024
Contractual maturity (dollars in thousands)Fixed
interest rate		Floating
interest rate		Total
One year or less$578,700$1,490,202$2,068,902
One to five years2,278,3331,629,0373,907,370
Five to fifteen years1,064,0451,084,6282,148,673
Over fifteen years812,784351,1801,163,964
Total ($)$4,733,862$4,555,047$9,288,909
Total (%)51.0 %49.0 %100.0 %


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Of the loans shown above with floating interest rates as of March 31, 2024, many have interest rate floors as follows:
Loans with interest rate floors (dollars in thousands)Maturing in one year or less Weighted average level of support (bps) Maturing in one to five years Weighted average level of support (bps) Maturing in five years to fifteen years Weighted average level of support (bps) Maturing after
fifteen years		Weighted average level of support (bps)TotalWeighted average level of support (bps)
Loans with
   current rates
   above floors:
1-25 bps$225 24 $— — $405 21.00 $134 21.00 $764 22 
26-50 bps3,638 50 — — — — — — 3,638 50 
51-75 bps4,501 75 2,086 63 — — — — 6,587 71 
76-100 bps14,483 100 2,955 99 3,120 100 1,969 96 22,527 100 
101-200 bps45,503 164 95,812 165 18,578 156 12,371 160 172,264 163 
201-300 bps98,946 269 140,215 255 96,690 246 18,325 251 354,176 256 
301-400 bps176,052 370 146,996 369 160,278 347 35,141 358 518,467 362 
401-500 bps536,124 459 255,390 467 361,409 473 44,915 465 1,197,838 465 
501-600 bps235,335 530 379,666 530 232,546 537 200,742 536 1,048,289 533 
601 bps and
   above		543 678 21,223 747 18,488 694 7,485 678 47,739 715 
Total loans with
    current rates
    above floors		$1,115,350 424 $1,044,343 423 $891,514 439 $321,082 476 $3,372,289 433 
Loans at interest
    rate floors
    providing
    support:
26-50 bps— — 684 29 — — — — 684 29 
51-75 bps— — 456 55 — — — — 456 55 
76-100 bps— — 35 94 — — 262 79 297 81 
Total loans at
    interest rate
    floors
    providing
    support		$— — $1,175 41 $— — $262 79 $1,437 48 
Asset quality
In order to operate with a sound risk profile, we focus on originating loans that we believe to be of high quality. We have established loan approval policies and procedures to assist us in maintaining the overall quality of our loan portfolio. When delinquencies in our loans exist, we rigorously monitor the levels of such delinquencies for any negative or adverse trends. From time to time, we may modify loans to extend the term or make other concessions, including interest rate reduction, a term extension, principal forgiveness, payment deferral, or a combination thereof, to help a borrower with a deteriorating financial condition stay current on their loan and to avoid foreclosure. Furthermore, we are committed to collecting on all of our loans. This practice leads to higher recoveries in the long-term.
Nonperforming assets
Our nonperforming assets consist of nonperforming loans, other real estate owned and other repossessed non-earning assets. As of March 31, 2024 and December 31, 2023, we had $94.1 million and $86.5 million, respectively, in nonperforming assets. Nonperforming loans are those on which the accrual of interest has stopped, as well as loans that are contractually 90 days past due on which interest continues to accrue. Accrued interest receivable written off as an adjustment to interest income amounted to $0.2 million for both the three months ended March 31, 2024 and 2023. Additionally, we had net interest recoveries on nonperforming assets previously charged off of $0.3 million and $0.2 million for the three months ended March 31, 2024 and 2023, respectively.
Nonperforming loans HFI increased by $6.8 million to $67.8 million as of March 31, 2024 compared to $60.9 million as of December 31, 2023. The increase in nonperforming loans primarily occurred in our commercial and construction portfolios.
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As of March 31, 2024 and December 31, 2023, we had $20.9 million and $21.2 million, respectively, of delinquent GNMA optional repurchase loans previously sold included on our consolidated balance sheets in loans held for sale. These are considered nonperforming assets as we do not earn any interest on the unexercised option to repurchase these loans.
As of both March 31, 2024 and December 31, 2023, other real estate owned included $0.1 million of excess land and facilities held for sale resulting from our prior acquisitions. Other repossessed assets also included other repossessed non-real estate amounting to $1.8 million and $1.1 million as of March 31, 2024 and December 31, 2023, respectively.
The following table provides details of our nonperforming assets, the ratio of such loans and other nonperforming assets to total assets, and certain other related information as of the dates presented:
March 31,December 31,
(dollars in thousands)2024 20232023 
Loan Type:  
Commercial and industrial$24,643 $2,455 $21,730 
Construction5,662 382 3,037 
Residential real estate:
1-to-4 family mortgage18,435 20,593 16,073 
Residential line of credit2,209 1,082 2,473 
Multi-family mortgage31 39 32 
Commercial real estate:
Owner-occupied3,069 7,211 3,188 
Non-owner occupied3,250 5,802 3,351 
Consumer and other10,451 7,916 11,039 
Total nonperforming loans HFI$67,750 $45,480 $60,923 
Commercial loans held for sale— 9,278 — 
Mortgage loans held for sale(1)
20,876 20,528 21,229 
Other real estate owned3,613 4,085 3,192 
Other repossessed assets1,834 498 1,139 
Total nonperforming assets$94,073 $79,869 $86,483 
Nonperforming loans held for investment as a percentage of total loans HFI0.73 %0.49 %0.65 %
Nonperforming assets as a percentage of total assets0.75 %0.61 %0.69 %
Nonaccrual loans HFI as a percentage of loans HFI0.59 %0.35 %0.51 %
(1) Represents optional right to repurchase government guaranteed GNMA mortgage loans previously sold that have become past due greater than 90 days.
We have evaluated our loans HFI classified as nonperforming and believe all nonperforming loans have been adequately reserved for in the allowance for credit losses on loans HFI as of March 31, 2024 and December 31, 2023. Management also continually monitors past due loans for potential credit quality deterioration. Loans not considered nonperforming include loans 30-89 days past due that continue to accrue interest amounting to $37.5 million at March 31, 2024 as compared to $47.0 million at December 31, 2023. The decrease from December 31, 2023 to March 31, 2024 primarily occurred within our construction and 1-to-4 family mortgage portfolios.
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Allowance for credit losses
The allowance for credit losses represents the portion of the loan's amortized cost basis that we do not expect to collect due to credit losses over the loan's life, considering past events, current conditions, and reasonable and supportable forecasts of future economic conditions. Loan losses are charged against the allowance when we believe the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for credit losses is based on the loan's amortized cost basis, excluding accrued interest receivable, as we promptly charge off uncollectible accrued interest receivable.
We calculate our expected credit loss using a lifetime loss rate methodology. We utilize probability-weighted forecasts, which consider multiple macroeconomic variables from Moody's that are applicable to each type of loan. See Note 1, "Basis of presentation," in the notes to our consolidated financial statements in our Annual Report that was filed with the SEC on February 27, 2024 for additional information regarding our methodology.
The following table presents the allocation of the allowance for credit losses on loans HFI by loan category as well as the ratio of loans by loan category compared to the total loan portfolio as of the dates indicated: 
March 31,December 31,
20242023
(dollars in thousands)AmountACL
as a % of loans HFI category		AmountACL
as a % of loans HFI category
Loan Type:
Commercial and industrial$17,272 1.07 %$19,599 1.14 %
Construction37,308 2.94 %35,372 2.53 %
Residential real estate:
   1-to-4 family mortgage26,128 1.66 %26,505 1.69 %
   Residential line of credit9,918 1.81 %9,468 1.78 %
   Multi-family mortgage8,973 1.46 %8,842 1.46 %
Commercial real estate:
   Owner-occupied10,749 0.87 %10,653 0.86 %
   Non-owner occupied23,949 1.20 %22,965 1.18 %
Consumer and other17,370 4.05 %16,922 4.11 %
Total allowance for credit losses on loans HFI$151,667 1.63 %$150,326 1.60 %

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The following table summarizes activity in our allowance for credit losses on loans HFI during the periods indicated:
 Three Months Ended March 31,Year Ended December 31,
(dollars in thousands)2024 2023 2023 
Allowance for credit losses on loans HFI at beginning of period$150,326 $134,192 $134,192 
Charge-offs:
Commercial and industrial(43)(46)(462)
Construction(92)— — 
Residential real estate:
1-to-4 family mortgage— (16)(46)
Residential line of credit(20)— — 
Commercial real estate:
Owner-occupied— — (144)
Consumer and other(772)(705)(2,851)
Total charge-offs$(927)$(767)$(3,503)
Recoveries:
Commercial and industrial$14 $67 $273 
Construction— — 10 
Residential real estate:
1-to-4 family mortgage56 15 100 
Residential line of credit— — 1 
Commercial real estate:
Owner-occupied40 66 109 
Non-owner occupied— — 1,833 
Consumer and other306 239 573 
Total recoveries$416 $387 $2,899 
Net charge-offs(511)(380)(604)
Provision for credit losses on loans HFI1,852 4,997 16,738 
Allowance for credit losses on loans HFI at the end of period$151,667 $138,809 $150,326 
Ratio of annualized net charge-offs during the period to average loans outstanding during the
   period		(0.02)%(0.02)%(0.01)%
Allowance for credit losses on loans HFI as a percentage of loans 1.63 %1.48 %1.60 %
Allowance for credit losses on loans HFI as a percentage of nonaccrual loans HFI276.3 %421.9 %311.7 %
Allowance for credit losses on loans HFI as a percentage of nonperforming loans 223.9 %305.2 %246.7 %

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The following tables details our (reversal of) provision for credit losses on loans HFI and net (charge-offs) recoveries to average loans HFI outstanding by loan category during the periods indicated:
 (Reversal of) provision for credit losses on loans HFINet (charge-offs) recoveriesAverage loans HFIRatio of annualized net (charge-offs) recoveries to average loans HFI
(dollars in thousands)
Three Months Ended March 31, 2024
Commercial and industrial$(2,298)$(29)$1,709,052 (0.01)%
Construction2,028 (92)1,323,850 (0.03)%
Residential real estate:
1-to-4 family mortgage(433)56 1,574,970 0.01 %
Residential line of credit470 (20)533,924 (0.02)%
Multi-family mortgage131 — 614,019 — %
Commercial real estate:
Owner-occupied56 40 1,235,782 0.01 %
Non-owner occupied984 — 1,976,451 — %
Consumer and other914 (466)418,746 (0.45)%
Total$1,852 $(511)$9,386,794 (0.02)%
Three months ended March 31, 2023
Commercial and industrial$(10)$21 $1,663,572 0.01 %
Construction1,217 — 1,687,980 — %
Residential real estate:
1-to-4 family mortgage1,073 (1)1,567,471 — %
Residential line of credit1,540 — 497,047 — %
Multi-family mortgage129 — 487,394 — %
Commercial real estate:
Owner-occupied103 66 1,127,738 0.02 %
Non-owner occupied(48)— 1,951,024 — %
Consumer and other993 (466)364,482 (0.52)%
Total$4,997 $(380)$9,346,708 (0.02)%
Year Ended December 31, 2023
Commercial and industrial$8,682 $(189)$1,678,832 (0.01)%
Construction(4,446)10 1,594,317 — %
Residential real estate:
1-to-4 family mortgage310 54 1,558,477 — %
Residential line of credit1,973 1 507,884 — %
Multi-family mortgage2,352 — 519,554 — %
Commercial real estate:
Owner occupied2,905 (35)1,169,680 — %
Non-owner occupied(784)1,833 1,925,759 0.10 %
Consumer and other5,746 (2,278)381,474 (0.60)%
Total$16,738 $(604)$9,335,977 (0.01)%
The ACL on loans HFI was $151.7 million and $150.3 million and represented 1.63% and 1.60% of loans HFI as of March 31, 2024 and December 31, 2023, respectively. For further information related to the change in the ACL refer to “Provision for credit losses” section herein and Note 3, “Loans and allowance for credit losses on loans HFI” in the notes to our consolidated financial statements.
For the three months ended March 31, 2024, we experienced net charge-offs of $0.5 million, or 0.02% of average loans HFI, compared to net charge-offs of $0.4 million, or 0.02% for the three months ended March 31, 2023. Our ratio of total nonperforming loans HFI as a percentage of total loans HFI increased by 8 basis points to 0.73% as of March 31, 2024 compared to December 31, 2023.
As a ratio of ACL to loans HFI by loan type, our construction portfolio incurred the largest increases period-over-period. Our construction portfolio is heavily reliant on the strength of the economy; and therefore, it is adversely affected by inflation and high interest rates.
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We also maintain an allowance for credit losses on unfunded commitments, which decreased to $7.7 million as of March 31, 2024 from $8.8 million as of December 31, 2023 due to an 18.7% annualized or $134.4 million decrease in unfunded loan commitments during the period. Notably, there was a $135.3 million decrease in unfunded loan commitments in our construction loan category pipeline which resulted in a $1.0 million decrease in required ACL related to unfunded commitments. Our unfunded commitments in our construction loan category decreased as a result of management's concentrated effort over the last year to reduce commitments in specific categories judged to be inherently higher risk considering the current and projected economic conditions.
Loans held for sale
Mortgage loans held for sale consisted of $61.8 million of residential real estate mortgage loans in the process of being sold to third-party private investors or government sponsored agencies and $20.9 million of GNMA optional repurchase loans. This compares to $46.6 million of residential real estate mortgage loans in the process of being sold to third-party private investors or government sponsored agencies and $21.2 million of GNMA optional repurchase loans as of December 31, 2023.
Deposits
Deposits represent the Bank’s primary source of funding. We continue to focus on growing core customer deposits through our relationship driven banking philosophy, community-focused marketing programs and our treasury management services.
Total deposits were $10.50 billion and $10.55 billion as of March 31, 2024 and December 31, 2023, respectively. Noninterest-bearing deposits at March 31, 2024 and December 31, 2023 were $2.18 billion and $2.22 billion, respectively, while interest-bearing deposits were $8.32 billion and $8.33 billion at March 31, 2024 and December 31, 2023, respectively.
The decrease in noninterest-bearing deposits of $36.3 million from December 31, 2023 to March 31, 2024 is attributable to migration to interest-yielding products such as money market and savings deposits, which increased by $94.1 million from December 31, 2023. Also included in noninterest-bearing deposits are certain mortgage escrow deposits from our third-party mortgage servicing provider, which amounted to $92.4 million and $63.6 million as of March 31, 2024 and December 31, 2023, respectively.
Interest-bearing checking deposits decreased by $82.9 million from December 31, 2023 due largely to decreases in our deposits from municipal and governmental entities, also known as public funds, which decreased by $44.1 million during the period. The decrease in public funds was due to management's decision to not renew certain maturing public deposits due to rising costs of these deposits.
Additionally, brokered and internet time deposits decreased by $19.6 million to $131.2 million as of March 31, 2024 compared to December 31, 2023, which was a result of our balance sheet and liquidity management strategy in order to decrease our exposure to higher cost deposits.
As a result of the rising interest rate environment and the shift in our deposit composition, we have experienced an increase in our cost of interest-bearing deposits and total deposits. Average deposit balances by type, together with the average rates per period are reflected in the average balance sheet amounts, interest paid, and rate analysis tables included in this management's discussion and analysis under the subheading “Results of operations” discussion.
Our deposit base also includes certain commercial and high net worth individuals that periodically place deposits with the Bank for short periods of time and can cause fluctuations from period to period in the overall level of customer deposits outstanding. These fluctuations may include certain deposits from related parties as disclosed within Note 14, “Related party transactions” in the notes to our consolidated financial statements included in this Report.






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The following table sets forth the distribution by type of our deposit accounts as of the dates indicated:
March 31,December 31,
2024 2023 
(dollars in thousands)Amount% of total deposits
Average rate(1)
Amount% of total deposits
Average rate(1)
Deposit Type
Noninterest-bearing demand$2,182,121 21 %— %$2,218,382 21 %— %
Interest-bearing demand2,421,487 23 %3.01 %2,504,421 24 %2.86 %
Money market3,923,571 37 %3.93 %3,819,814 36 %3.53 %
Savings deposits375,367 4 %0.07 %385,037 4 %0.06 %
Customer time deposits1,471,190 14 %3.90 %1,469,811 14 %3.15 %
Brokered and internet time deposits131,192 1 %5.31 %150,822 1 %5.27 %
Total deposits$10,504,928 100 %2.76 %$10,548,287 100 %2.39 %
Customer Time Deposits(2)
0.00-1.00%$53,059 4 %$62,464 4 %
1.01-2.00%100,296 7 %114,521 8 %
2.01-3.00%48,604 3 %51,346 4 %
3.01-4.00%221,790 15 %268,550 18 %
4.01-5.00%893,113 61 %812,781 55 %
Above 5.00%154,328 10 %160,149 11 %
Total customer time deposits$1,471,190 100 %$1,469,811 100 %
Brokered and Internet Time Deposits(2)
0.00-1.00%$99 — %$99 — %
1.01-2.00%— — %— — %
2.01-3.00%248 — %248 — %
3.01-4.00%— — %— — %
4.01-5.00%— — %— — %
Above 5.00%130,845 100 %150,475 100 %
Total brokered and internet time deposits$131,192 100 %$150,822 100 %
Total time deposits$1,602,382 $1,620,633 
(1) Average rates are presented for the three months ended March 31, 2024 and the year ended December 31, 2023, respectively.
(2) Rates are presented as of period-end.















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Further details related to our deposit customer base is presented below as of the dates indicated:
March 31,December 31,
2024 2023 
(dollars in thousands)Amount% of total deposits Amount% of total deposits
Deposits by customer segment(1)
Consumer$4,866,099 46 %$4,880,890 46 %
Commercial4,085,282 39 %4,069,724 39 %
Public1,553,547 15 %1,597,673 15 %
Total deposits$10,504,928 100 %$10,548,287 100 %
(1) Segments are determined based on the customer account level.
The tables below set forth maturity information on time deposits and amounts in excess of the FDIC insurance limit as of March 31, 2024:
(dollars in thousands)AmountWeighted average interest rate at period end
Time deposits of $250 and less    
Months to maturity:
Three or less$256,159 3.84 %
Over Three to Six183,215 4.05 %
Over Six to Twelve361,826 3.78 %
Over Twelve147,937 3.18 %
Total$949,137 3.75 %
Time deposits of greater than $250
Months to maturity:
Three or less$249,317 4.75 %
Over Three to Six91,362 4.32 %
Over Six to Twelve230,004 4.55 %
Over Twelve82,562 4.02 %
Total$653,245 4.53 %
Further details related to our estimated insured or collateralized deposits and uninsured and uncollateralized deposits is presented below as of the dates indicated:
March 31,December 31,
2024 2023 
Estimated insured or collateralized deposits(1)
$7,372,728 $7,414,224 
Estimated uninsured and uncollateralized deposits(1)
$3,132,200 $3,134,063 
Estimated uninsured and uncollateralized deposits as a % of total deposits(1)
29.8 %29.7 %
Estimated uninsured deposits(2)
$4,718,036 $4,899,349 
(1) Amounts are shown on a fully consolidated basis and exclude deposits of affiliates that are eliminated in consolidation.
(2) Amounts are shown on an unconsolidated basis consistent with regulatory reporting requirements.

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Other earning assets
Securities purchased under agreements to resell (“reverse repurchase agreements”)
We enter into agreements with certain customers to purchase investment securities under agreements to resell at specific dates in the future. This investment deploys some of our liquidity position into an instrument that improves the return on those funds. Securities purchased under agreements to resell totaled $58.5 million and $47.8 million at March 31, 2024 and December 31, 2023, respectively.
Federal Funds Sold
Federal funds may fluctuate from period to period depending upon our liquidity position at the time and our strategy for deploying liquidity. Federal funds sold totaled $42.3 million and $35.5 million at March 31, 2024 and December 31, 2023, respectively.
AFS debt securities portfolio
Our investment portfolio objectives include maximizing total return after other primary objectives are achieved such as, but not limited to, providing liquidity, capital preservation, and pledging collateral for certain deposit types, various lines of credit and other borrowings. The investment objectives guide the portfolio allocation among security types, maturities, and other attributes.
The fair value of our AFS debt securities portfolio was $1.46 billion and $1.47 billion as of March 31, 2024 and December 31, 2023, respectively. Included in the fair value of AFS debt securities were net unrealized losses of $183.6 million and $186.8 million as of March 31, 2024 and December 31, 2023, respectively. Current net unrealized losses are due to interest rate increases.
During the three months ended March 31, 2024, we sold $207.9 million of AFS debt securities with a weighted average yield of 2.14% and reinvested the proceeds of the sales into available-for-sale securities with a weighted average yield of 5.94%. The sales resulted in a pre-tax loss on securities of $16.2 million. We primarily sold agency collateralized mortgage obligations, agency mortgage-backed securities, U.S. Treasury and municipal securities. We reinvested the proceeds from the sales primarily into U.S. government agency AFS debt securities in order increase the effective yield of our portfolio. Including the reinvestment of these proceeds, we purchased $281.6 million of AFS debt securities. Maturities, prepayments and calls of securities totaled $66.6 million for the three months ended March 31, 2024.
During the three months ended March 31, 2023, there were no sales of AFS debt securities. During the same period, we purchased $0.9 million of AFS debt securities. Maturities, prepayments and calls of securities totaled $26.8 million for the three months ended March 31, 2023.
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The following table sets forth the fair value, scheduled maturities and weighted average yields for our AFS debt securities portfolio as of the dates indicated below:
March 31,
December 31,
 2024 2023 
(dollars in thousands)Fair value% of total investment securities
Weighted average yield (1)
Fair value% of total investment securities
Weighted average yield (1)
U.S. Treasury securities:
Maturing within one year$30,857 2.1 %2.76 %$61,466 4.2 %2.50 %
Maturing in one to five years— — %— %47,030 3.2 %1.59 %
Maturing in five to ten years— — %— %— — %— %
Maturing after ten years— — %— %— — %— %
Total U.S. Treasury securities30,857 2.1 %2.76 %108,496 7.4 %2.10 %
U.S. government agency securities:
Maturing within one year— — %— %— — %— %
Maturing in one to five years6,312 0.4 %1.82 %13,094 0.9 %1.96 %
Maturing in five to ten years23,724 1.6 %6.11 %6,000 0.4 %6.40 %
Maturing after ten years385,891 26.3 %6.02 %184,862 12.6 %6.23 %
Total U.S. government agency securities415,927 28.3 %5.96 %203,956 13.9 %5.96 %
Municipal securities:
Maturing within one year3,053 0.2 %2.48 %2,813 0.2 %2.23 %
Maturing in one to five years3,768 0.3 %3.39 %11,677 0.8 %5.85 %
Maturing in five to ten years12,811 0.9 %3.18 %40,304 2.7 %3.60 %
Maturing after ten years152,040 10.4 %2.79 %187,469 12.7 %2.94 %
Total municipal securities171,672 11.8 %2.82 %242,263 16.4 %3.00 %
Mortgage-backed securities - residential and commercial:
Maturing within one year61 — %1.27 %126 — %1.57 %
Maturing in one to five years2,518 0.2 %3.18 %3,239 0.2 %2.91 %
Maturing in five to ten years17,874 1.2 %2.89 %33,121 2.3 %2.97 %
Maturing after ten years822,376 56.2 %2.13 %877,446 59.6 %1.86 %
Total mortgage-backed securities - residential and commercial842,829 57.6 %2.14 %913,932 62.1 %1.90 %
Corporate securities:
Maturing within one year— — %— %— — %— %
Maturing in one to five years— — %— %— — %— %
Maturing in five to ten years3,397 0.2 %4.33 %3,326 0.2 %4.33 %
Maturing after ten years— — %— %— — %— %
Total corporate securities3,397 0.2 %4.33 %3,326 0.2 %4.33 %
          Total AFS debt securities$1,464,682 100.0 %3.32 %$1,471,973 100.0 %2.66 %
(1)Yields on a tax-equivalent basis.

Borrowed funds
Deposits are the primary source of funds for our lending activities and general business purposes. However, we may also obtain advances from the FHLB, borrow from the Federal Reserve’s Discount Window, one-off borrowing programs from the Federal Reserve, purchase federal funds and engage in overnight borrowing with correspondent banks, or enter into client repurchase agreements. We also use these sources of funds as part of our asset liability management process to control our long-term interest rate risk exposure, even if it may increase our short-term cost of funds.
Our level of short-term borrowing can fluctuate on a daily basis depending on funding needs and the sources of funds to satisfy those needs, in addition to the overall interest rate environment and cost of public funds.
Securities sold under agreements to repurchase and federal funds purchased
We enter into agreements with certain customers to sell certain securities under agreements to repurchase the security the following day. These agreements are made to provide customers with comprehensive treasury management products
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as a short-term return for their excess funds. Securities sold under agreements to repurchase totaled $23.2 million and $19.3 million at March 31, 2024 and December 31, 2023, respectively.
We also maintain lines with certain correspondent banks that provide borrowing capacity in the form of federal funds purchased. Federal funds purchased are short-term borrowings that typically mature within one to ninety days. Borrowings against these lines (i.e., federal funds purchased) totaled $55.0 million and $89.4 million as of March 31, 2024 and December 31, 2023, respectively.
FHLB short-term advances
As a member of the FHLB system, we may utilize advances from the FHLB in order to provide additional liquidity and funding. Under these short-term agreements, we maintain a line of credit that as of March 31, 2024 and December 31, 2023 and had total borrowing capacity of $1.47 billion and $1.76 billion, respectively. As of March 31, 2024 and December 31, 2023, we had qualifying loans pledged as collateral securing these lines amounting to $2.51 billion and $3.01 billion, respectively. There were no FHLB advances outstanding as of December 31, 2023 or March 31, 2024.
Bank Term Funding Program
In March 2023, the Federal Reserve established the Bank Term Funding Program to make available funding to eligible depository institutions in order to help assure they have the ability to meet the needs of their depositors following the March 2023 high-profile bank failures. The program allows for advances for up to one year secured by eligible high-quality securities at par value extended at the one-year overnight index swap rate, plus 10 basis points, as of the day the advance is made. The interest rate is fixed for the term of the advance and there are no prepayment penalties. The BTFP ceased extending new borrowings on March 11, 2024. At both March 31, 2024 and December 31, 2023, we had outstanding borrowings of $130.0 million under the BTFP at a borrowing rate of 4.85% with a maturity date of December 26, 2024.
Subordinated debt
During the year ended December 31, 2003, we formed two separate trusts which issued $9.0 million and $21.0 million of floating rate trust preferred securities as part of a pooled offering of such securities. We issued junior subordinated debentures of $9.3 million, which included proceeds of common securities which we purchased for $0.3 million, and junior subordinated debentures of $21.7 million which included proceeds of common securities of $0.7 million. The trusts were created for the sole purpose of issuing 30-year capital trust preferred securities to fund the purchase of junior subordinated debentures issued by us. Both issuances were to the trusts in exchange for the proceeds of the securities offerings, which represent the sole asset of the trusts.
Additionally, during the year ended December 31, 2020, we placed $100.0 million of ten year fixed-to-floating rate subordinated notes, maturing September 1, 2030.
Further information related to our subordinated debt as of March 31, 2024 is detailed below:
(dollars in thousands)Year establishedMaturity Call dateTotal debt outstanding Interest rate Coupon structure
Subordinated debt issued by trust preferred securities:
  FBK Trust I (1)
200306/09/2033
6/09/2008
$9,280 8.81%
3-month SOFR plus 3.51%
  FBK Trust II (1)
200306/26/2033
6/26/2008
21,650 8.72%
3-month SOFR plus 3.41%
Additional subordinated debt:
  FBK subordinated debt I(2)
202009/01/2030
9/1/2025
100,000 4.50%
Semi-annual fixed(3)
      Unamortized debt issuance costs(516)
        Total subordinated debt, net$130,414 
(1)The Company classifies $30.0 million of the Trusts' subordinated debt as Tier 1 capital.
(2)The Company classified the issuance, net of unamortized issuance costs and the associated fair value hedge as Tier 2 capital, which will be phased out 20% per year in
     the final five years before maturity. 
(3)Beginning on September 1, 2025 the coupon structure migrates to the 3-month SOFR plus a spread of 439 basis points through the end of the term of the debenture.



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Other borrowings
Other borrowings on our consolidated balance sheets includes our finance lease liability totaling $1.3 million as of both March 31, 2024 and December 31, 2023. In addition, other borrowings on our consolidated balance sheets include guaranteed rebooked GNMA loans previously sold that have become past due over 90 days and are eligible for repurchase totaling $20.9 million and $21.2 million as of March 31, 2024 and December 31, 2023, respectively. See Note 5, “Leases” and Note 10, “Fair value of financial instruments” within the notes to our consolidated financial statements herein for additional information regarding our finance lease and guaranteed GNMA loans eligible for repurchase, respectively.
Liquidity and capital resources
We are expected to maintain adequate liquidity at the Bank to meet the cash flow requirements of clients who may be either depositors wishing to withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs. Our Liquidity Policy is intended to cause the Bank to maintain adequate liquidity and, therefore, enhance our ability to raise funds to support asset growth, meet deposit withdrawals and lending needs and otherwise sustain our operations. We accomplish this through management of the maturities of our interest-earning assets and interest-bearing liabilities. We believe that our present position is adequate to meet our current and future liquidity needs.
We continuously monitor our liquidity position to ensure that assets and liabilities are managed in a manner that will meet all of our short-term and long-term cash requirements. We manage our liquidity position to meet the daily cash flow needs of clients, while maintaining an appropriate balance between assets and liabilities to optimize our net interest margin. We also monitor our liquidity requirements in light of interest rate trends, changes in the economy and the scheduled maturity and interest rate sensitivity of the investment and loan portfolios and deposits.
As part of our liquidity management strategy, we focus on minimizing our costs of liquidity and attempt to decrease these costs by growing our noninterest-bearing and other low-cost deposits, while replacing higher cost funding sources. While we do not control the types of deposit instruments our clients choose, we do influence those choices with the rates and the deposit specials we offer. Increasing interest rates generally attracts customers to higher cost interest-bearing deposit products as they seek to maximize their yield.
Our investment portfolio is another alternative for meeting liquidity needs. These assets generally have readily available markets that offer conversions to cash as needed. AFS debt securities within our investment portfolio are used to secure government, public, trust and other deposits and as collateral for short-term borrowings, letters of credit and derivative instruments. As of March 31, 2024 and December 31, 2023, we had pledged securities related to these items with carrying values of $950.0 million and $929.5 million, respectively.
Additional sources of liquidity include federal funds purchased, repurchase agreements, FHLB borrowings, and lines of credit. Interest is charged at the prevailing market rate on federal funds purchased, reverse repurchase agreements and FHLB advances. Overnight advances obtained from the FHLB are used primarily to meet day to day liquidity needs, particularly when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits. There were no FHLB advances outstanding as of March 31, 2024 or December 31, 2023. As of March 31, 2024, there was $1.47 billion available to borrow against with a remaining capacity of $1.24 billion. As of December 31, 2023, there was $1.76 billion available to borrow against with a remaining capacity of $1.30 billion.
We also maintained unsecured lines of credit with other commercial banks totaling $370.0 million as of both March 31, 2024 and December 31, 2023. These are unsecured, uncommitted lines of credit typically maturing at various times within the next twelve months. Borrowings against these lines (i.e., federal funds purchased) totaled $55.0 million and $89.4 million as of March 31, 2024 and December 31, 2023, respectively. As of both March 31, 2024 and December 31, 2023, we also had $50.0 million available through the IntraFi network, which allows us to offer banking customers access to FDIC insurance protection on deposits through our Bank which exceed FDIC insurance limits.





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Our current on-balance sheet liquidity and available sources of liquidity are summarized in the table below:
March 31,December 31,
(dollars in thousands)2024 2023 
Current on-balance sheet liquidity:
   Cash and cash equivalents$870,730 $810,932 
   Unpledged AFS debt securities514,724 542,427 
Total on-balance sheet liquidity$1,385,454 $1,353,359 
Available sources of liquidity:
   Unsecured borrowing capacity(1)
$3,392,255 $3,350,026 
   FHLB remaining borrowing capacity1,237,843 1,297,702 
   Federal Reserve discount window2,382,574 2,431,084 
Total available sources of liquidity$7,012,672 $7,078,812 
On-balance sheet liquidity as a percentage of total assets11.0 %10.7 %
On-balance sheet liquidity and available sources of liquidity as a percentage of estimated
     uninsured and uncollateralized deposits(2)
268.1 %269.0 %
(1)Includes capacity available per internal policy in the form of brokered deposits and unsecured lines of credit.
(2)Amounts are shown on a fully consolidated basis and exclude deposits of affiliates that are eliminated in consolidation.
The Company also maintains the ability to access capital markets to meet its liquidity needs. The Company may utilize various methods to raise capital, including through the sale of common stock, preferred stock, depository shares, AFS debt securities, rights, warrants and units. Specific terms and prices would be determined at the time of any such offering. In the past, the Company has utilized capital markets to generate liquidity in the form of common stock and subordinated debt primarily for the purpose of funding acquisitions.
The Company is a corporation separate and apart from the Bank and, therefore, it must provide for its own liquidity. The Company’s main source of funding is dividends declared and paid by the Bank to the Company. Statutory and regulatory limitations exist that affect the ability of the Bank to pay dividends to the Company. Management believes that these limitations will not impact the Company’s ability to meet its ongoing short-term cash obligations. For additional information regarding dividend restrictions, see the “Item 1. Business - Supervision and regulation,” “Item 1A. Risk Factors - Risks related to our business” and “Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Dividends,” each of which is set forth in our Annual Report.
Due to state banking laws, the Bank may not declare dividends in any calendar year in an amount exceeding the total of its net income for that year combined with its retained net income of the preceding two years, without the prior approval of the TDFI. Based upon this regulation, as of March 31, 2024 and December 31, 2023, $170.2 million and $218.4 million of the Bank’s retained earnings were available for the payment of dividends without such prior approval. In addition, dividends paid by the Bank to the Company would be prohibited if the effect thereof would cause the Bank’s capital to be reduced below applicable minimum capital requirements. During the three months ended March 31, 2024, there were $8.5 million in cash dividends approved by the Board for payment from the Bank to the holding company. During the three months ended March 31, 2023, there were $23.5 million in cash dividends approved by the Board for payment from the Bank to the holding company. None of these required approval from the TDFI. Subsequent to March 31, 2024, the Board approved a dividend from the Bank to the holding company to be paid in the second quarter for $20.0 million that also did not require approval from the TDFI.
During the three months ended March 31, 2024, the Company declared shareholder dividends of $0.17 per share, or $8.1 million. During the three months ended March 31, 2023, the Company declared shareholder dividends of $0.15 per share, or $7.0 million. Subsequent to March 31, 2024, the Company declared a quarterly dividend in the amount of $0.17 per share, payable on May 28, 2024, to stockholders of record as of May 14, 2024.
77

Shareholders’ equity and capital management
Our total shareholders’ equity was $1.48 billion as of March 31, 2024 and $1.45 billion as of December 31, 2023. Book value per common share was $31.55 as of March 31, 2024 and $31.05 as of December 31, 2023. The increase in shareholders’ equity was primarily attributable to an increase in retained net income, net of dividends declared and paid and unrealized loss reclassification adjustment for loss on sale of securities included in net income of $12.0 million (net of tax benefit) from December 31, 2023. The increase in shareholders’ equity as of March 31, 2024 was partially off-set by dividends declared and paid of $8.1 million.
Our capital management consists of providing adequate equity to support our current and future operations. We are subject to various regulatory capital requirements administered by state and federal banking agencies, including the TDFI, Federal Reserve and the FDIC. Failure to meet minimum capital requirements may prompt certain actions by regulators that, if undertaken, could have a direct material adverse effect on our financial condition and results of operations. The Federal Reserve and the FDIC have issued guidelines governing the levels of capital that banks must maintain. As of March 31, 2024 and December 31, 2023, we met all capital adequacy requirements for which we were subject. See additional discussion regarding our capital adequacy and ratios within Note 12, “Minimum capital requirements” in the notes to our consolidated financial statements contained herein.
March 31, 2024FB Financial CorporationFirstBank

To be Well-Capitalized(1)
Total risk-based capital15.0 %14.7 %10.0 %
Tier 1 risk-based capital12.8 %12.5 %8.0 %
Common Equity Tier 1 ratio12.6 %12.5 %6.5 %
Tier 1 leverage11.3 %11.1 %5.0 %
(1) Applicable to Bank level capital.
Capital ratios are well above regulatory requirements for well-capitalized institutions. Management uses risk-based capital ratios in its analysis of the measures to assess the quality of capital and believes that investors may find it useful in their analysis of the Company.
ITEM 3 — Quantitative and Qualitative Disclosures About Market Risk
Interest rate sensitivity
Our market risk arises primarily from interest rate risk inherent in the normal course of lending and deposit-taking activities. Management believes that our ability to successfully respond to changes in interest rates will have a significant impact on our financial results. To that end, management actively monitors and manages our interest rate risk exposure.
The ALCO, which is authorized by our Board of Directors, monitors our interest rate sensitivity and makes decisions relating to that process. The ALCO’s goal is to structure our asset/liability composition to maximize net interest income while managing interest rate risk so as to minimize the adverse impact of changes in interest rates on net interest income and capital in either a rising or declining interest rate environment. Profitability is affected by fluctuations in interest rates. A sudden and substantial change in interest rates may adversely impact our earnings because the interest rates borne by assets and liabilities do not change at the same speed, to the same extent or on the same basis.
We monitor the impact of changes in interest rates on our net interest income and economic value of equity using rate shock analysis. Net interest income simulations measure the short-term earnings exposure from changes in market rates of interest in a rigorous and explicit fashion. Our current financial position is combined with assumptions regarding future business to calculate net interest income under varying hypothetical rate scenarios. EVE measures our long-term earnings exposure from changes in market rates of interest. EVE is defined as the present value of assets minus the present value of liabilities at a point in time. A decrease in EVE due to a specified rate change indicates a decline in the long-term earnings capacity of the balance sheet assuming that the rate change remains in effect over the life of the current balance sheet. For purposes of calculating EVE, a zero percent floor is assumed on discount factors.


78

The following analysis depicts the estimated impact on net interest income and EVE of immediate changes in interest rates at the specified levels for the periods presented:
Percentage change in:
Net interest income (1)
Change in interest ratesMarch 31,December 31,
(in basis points)2024 2023 
+40013.9 %8.99 %
+30010.9 %6.81 %
+2007.54 %4.65 %
+1003.93 %2.44 %
-100(4.22)%(2.86)%
-200(8.71)%(6.54)%
 Percentage change in:
Economic value of equity (2)
Change in interest ratesMarch 31,December 31,
(in basis points)2024 2023 
+400(9.66)%(16.6)%
+300(8.50)%(13.6)%
+200(5.18)%(8.05)%
+100(2.23)%(3.29)%
-1001.20 %1.03 %
-2001.14 %(0.63)%
(1)The percentage change represents the projected net interest income for 12 months on a flat balance sheet in a stable interest rate environment versus the projected net interest income in the various rate scenarios.
(2)The percentage change in this column represents our EVE in a stable interest rate environment versus EVE in the various rate scenarios.
The results for the net interest income simulations as of March 31, 2024 and December 31, 2023 resulted in an asset sensitive position. The primary influence of our asset sensitivity is the floating rate structure in many of our loans held for investment as well as the composition of our liabilities which is primarily customer deposits. Our floating-rate loan portfolio is indexed to market rates and timing of repricing of loans and deposits varies in proportion to market rate fluctuations. We actively monitor and perform stress tests on our deposit betas as part of our overall management of interest rate risk. This requires the use of various assumptions based on historical relationships of these variables in reaching any conclusion. Since these correlations are based on competitive pricing in the market, we anticipate that our future results will likely be different from the scenario results presented above and such differences could be material.
The preceding measures assume no change in the size or asset/liability compositions of the balance sheet. Thus, the measures do not reflect the actions the ALCO may undertake in response to such changes in interest rates. The scenarios assume instantaneous movements in interest rates in increments of 100, 200, 300 and 400 basis points. As interest rates are adjusted over a period of time, it is our strategy to proactively change the volume and mix of our balance sheet in order to mitigate our interest rate risk. The computation of the prospective effects of hypothetical interest rate changes requires numerous assumptions regarding characteristics of new business and the behavior of existing positions. These business assumptions are based upon our experience, business plans and published industry experience. Key assumptions employed in the model include asset prepayment speeds, competitive factors, the relative price sensitivity of certain assets and liabilities and the expected life of non-maturity deposits. Because these assumptions are inherently uncertain, actual results may differ from simulated results.
We may utilize derivative financial instruments as part of an ongoing effort to mitigate interest rate risk exposure to interest rate fluctuations and facilitate the needs of our customers. For more information about our derivative financial instruments, see Note 9, “Derivatives” in the notes to our consolidated financial statements. 


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ITEM 4 — CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
An evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this Report was carried out under the supervision and with the participation of the Company’s Chief Executive Officer, Chief Financial Officer and other members of the Company’s senior management. The Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Report, the Company’s disclosure controls and procedures were effective in ensuring that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is: (i) accumulated and communicated to the Company’s management (including the Chief Executive Officer and Chief Financial Officer) to allow timely decisions regarding required disclosure; and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
The Company does not expect that its disclosure controls and procedures and internal control over financial reporting will prevent all errors and fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control procedure are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any control procedure also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control procedure, misstatements due to error or fraud may occur and not be detected.

















80

PART II
ITEM 1—LEGAL PROCEEDINGS
Various legal proceedings to which we or our subsidiaries are party arise from time to time in the normal course of business. As of the date of this Report, there are no material pending legal proceedings to which we or any of our subsidiaries is a party or of which any of our or our subsidiaries’ properties are subject.
ITEM 1A—RISK FACTORS
There have been no material changes to the risk factors set forth in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2023.
ITEM 2—UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On March 21, 2024, the Company announced that its board of directors re-authorized the Company's stock repurchase program pursuant to which the Company may purchase up to $100 million in shares of the Company’s issued and outstanding common stock. The prior stock repurchase plan expired on January 31, 2024. The current repurchase plan will terminate either on the date on which the maximum dollar amount is repurchased under the new repurchase plan or on January 31, 2026, whichever date occurs earlier. The repurchase plan will be conducted pursuant to a written plan and is intended to comply with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended. The Company did not complete any share repurchases during the three months ended March 31, 2024. Subsequent to March 31, 2024 through May 3, 2024, the Company has bought back 209,737 shares of common stock under this agreement at an average share price of $35.54 and total repurchase amount of $7.5 million.
ITEM 5 — OTHER INFORMATION
Rule 10b5-1 Trading Plans
During the quarter ended March 31, 2024, none of the Company’s directors or executive officers adopted, modified, or terminated any contract, instruction, or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”
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ITEM 6—EXHIBITS
The exhibits listed on the accompanying Exhibit Index are filed, furnished or incorporated by reference (as stated therein) as part of this Report.
EXHIBIT INDEX
Exhibit NumberDescription
101.INSInline XBRL Instance Document*
101.SCHInline XBRL Taxonomy Extension Schema Document*
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document*
101.LABInline XBRL Taxonomy Extension Label Linkbase Document*
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document*
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*Filed herewith.
**Furnished herewith.
†
Represents a management contract or a compensatory plan or arrangement.
82

Signatures

Pursuant to the requirements of the section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
 FB Financial Corporation
 /s/ Michael M. Mettee
May 6, 2024
Michael M. Mettee
Chief Financial Officer
(Principal Financial Officer)
/s/ Jonathan Pennington
May 6, 2024
Jonathan Pennington
Chief Accounting Officer
(Principal Accounting Officer)

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ATTACHMENTS / EXHIBITS

ATTACHMENTS / EXHIBITS

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EX-32.1

XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT

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XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT

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XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT

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