Business Wire | Jan 18, 2022 06:01AM EST

FB Financial Corporation Reports Annual and Fourth Quarter 2021 Results

Jan. 18, 2022

NASHVILLE, Tenn.--(BUSINESS WIRE)--Jan. 18, 2022--FB Financial Corporation (the "Company") (NYSE: FBK), parent company of FirstBank, reported net income of $48.8 million, or $1.02 per diluted common share, compared to $0.95 per diluted common share in the same quarter last year and $0.94 in the previous quarter. Adjusted net income was $42.6 million, or $0.89 per diluted common share, compared to $1.14 per diluted common share in the same quarter last year and $0.89 in the previous quarter. The Company's return on average assets for the fourth quarter was 1.60% (1.40% adjusted), return on average common equity was 13.7% (12.0% adjusted) and return on tangible common equity was 16.8% (14.7% adjusted). The Company recorded growth in loans held for investment ("HFI") of $310.0 million in the fourth quarter, or 16.9% annualized. Excluding Paycheck Protection Program ("PPP") loans, the Company recorded HFI loan growth of $315.4 million, or 17.2% annualized.

For the year ended December 31, 2021, the Company reported net income of $190.3 million, or $3.97 per diluted common share, compared to $63.6 million, or $1.67 per diluted common share, for the year ended December 31, 2020. Adjusting for non-operating items, diluted EPS was $3.78 and $3.73 for the years ended December 31, 2021 and 2020, respectively. The Company's book value per common share at quarter-end was $30.13 and the tangible book value ("TBV") per common share was $24.67.

President and Chief Executive Officer, Christopher T. Holmes stated, "We are pleased with our fourth quarter and full year results. Adjusted loan growth (HFI) of 17% for the quarter and over 10% for the year are both outstanding achievements. I am also proud of our team for their results in 2021 in deposit gathering, credit management and mortgage production, as we grew noninterest bearing deposits over 20%, we experienced net charge-offs of only 8 basis points and we delivered a mortgage contribution of $26.5 million. Our tangible book value, another core metric for us, ended the year at $24.67, which represents an annualized compounded growth rate of 15.5% since becoming a publicly traded company in September of 2016."

2021 2020 Annualized

(dollars in 4Q21 / 4Q21 /thousands, 3Q21 4Q20except per Fourth Quarter Third Quarter Fourth Quarter share data) % Change % Change

Balance Sheet Highlights

Investment $ 1,681,892 $ 1,577,337 $ 1,176,991 26.3 % 42.9 %securities

Mortgageloans held 672,924 755,210 683,770 (43.2 ) % (1.59 )for sale, at %fair value

Commercialloans held 79,299 100,496 215,403 (83.7 ) % (63.2 )for sale, at %fair value

Loans heldfor 7,604,662 7,294,674 7,082,959 16.9 % 7.37 %investment(HFI)

Adjustedloans held 7,600,672 7,285,259 6,870,314 17.2 % 10.6 %forinvestment*

Allowance for 125,559 139,446 170,389 (39.5 ) % (26.3 )credit losses %

Total assets 12,597,686 11,810,290 11,207,330 26.5 % 12.4 %

Customer 10,809,410 10,043,901 9,396,478 30.2 % 15.0 %deposits

Brokered and )internet time 27,487 28,017 61,559 (7.51 ) % (55.3 %deposits

Total 10,836,897 10,071,918 9,458,037 30.1 % 14.6 %deposits

Borrowings 171,778 172,710 238,324 (2.14 ) % (27.9 ) %

Total commonshareholders' 1,432,602 1,400,913 1,291,289 8.97 % 10.9 %equity

Book value $ 30.13 $ 29.36 $ 27.35 10.4 % 10.2 %per share

Total commonshareholders' 11.4 % 11.9 % 11.5 % equity tototal assets

Tangible bookvalue per $ 24.67 $ 23.90 $ 21.73 12.8 % 13.5 %common share*

Tangiblecommon equity 9.51 % 9.87 % 9.38 % to tangibleassets*

* Certain measures are considered non-GAAP financial measures. For areconciliation and discussion of this non-GAAP measure, see "GAAPReconciliation and Use of non-GAAP Financial Measures" and the correspondingnon-GAAP reconciliation tables in this Earnings Release dated January 18, 2022.

2021

2020

(dollars in thousands, except share data)

Fourth Quarter

Third Quarter

Fourth Quarter

Results of operations

Net interest income

$

89,755

$

88,476

$

85,244

NIM

3.19

%

3.20

%

3.32

%

Provisions for credit losses

$

(10,769

)

$

(2,531

)

$

(2,920

)

Net charge-off ratio

0.12

%

0.13

%

0.58

%

Noninterest income

$

53,219

$

59,006

$

80,638

Mortgage banking income

$

31,350

$

45,384

$

65,729

Total revenue

$

142,974

$

147,482

$

165,882

Noninterest expense

$

90,902

$

95,007

$

109,855

Merger expenses

$

-

$

-

$

9,513

Efficiency ratio

63.6

%

64.4

%

66.2

%

Core efficiency ratio*

67.0

%

64.7

%

58.5

%

Adjusted pre-tax, pre-provision earnings*

$

43,573

$

51,240

$

67,988

Total adjusted mortgage banking pre-tax net contribution*

$

710

$

8,853

$

22,882

Net income applicable to FB Financial Corporation(1)

$

48,827

$

45,290

$

45,602

Diluted earnings per common share

$

1.02

$

0.94

$

0.95

Effective tax rate

22.3

%

17.7

%

22.6

%

Adjusted net income*

$

42,551

$

42,699

$

54,454

Adjusted diluted earnings per common share*

$

0.89

$

0.89

$

1.14

Weighted average number of shares outstanding - fully diluted

47,896,715

48,007,147

47,791,659

Actual shares outstanding - period end

47,549,241

47,707,634

47,220,743

Returns on average:

Assets ("ROAA")

1.60

%

1.51

%

1.63

%

Equity ("ROAE")

13.7

%

12.9

%

14.4

%

Tangible common equity ("ROATCE")*

16.8

%

15.9

%

18.2

%

* Certain measures are considered non-GAAP financial measures. For a reconciliation and discussion of this non-GAAP measure, see "GAAP Reconciliation and Use of non-GAAP Financial Measures" and the corresponding non-GAAP reconciliation tables in this Earnings Release dated January 18, 2022.

(1) Includes a dividend declared and paid by the Company's REIT subsidiary to minority interest preferred shareholders in the fourth quarters of 2021 and 2020.

Balance Sheet and Net Interest Margin

The Company reported loan balances (HFI) of $7.60 billion, an increase of $310.0 million, or 16.9% annualized, from September 30, 2021. Excluding PPP loans, adjusted loans (HFI) increased $315.4 million, or 17.2% annualized, on a linked quarter basis. The contractual yield on loans decreased to 4.17% in the fourth quarter of 2021 from 4.23% in the third quarter of 2021.

The Company's net interest income on a tax-equivalent basis for the fourth quarter of 2021 was $90.5 million, an increase from $89.2 million in the previous quarter. The Company's net interest margin ("NIM") was 3.19% for the fourth quarter, compared to 3.20% for the third quarter of 2021. The NIM for the fourth quarter of 2021 was impacted by a 4 basis point decline in the yield on interest-earning assets, offset by a 4 basis point decline in the cost of interest-bearing liabilities on a linked quarter basis. During the quarter, on balance sheet liquidity increased to $2.22 billion, or 18.0% of tangible assets, from $1.75 billion, or 15.1% of tangible assets as of September 30, 2021. As of December 31, 2021, our PPP loan balance decreased to $4.0 million from $9.4 million at September 30, 2021.

During the fourth quarter of 2021, total deposits increased by $765.0 million to $10.84 billion on a linked quarter basis, primarily related to seasonal inflows of public funds. Noninterest bearing deposits increased by $130.6 million, or 19.9% annualized, during the fourth quarter. Excluding mortgage-escrow related deposits, noninterest bearing deposits increased by $193.7 million during the fourth quarter, or 31.8% annualized. The Company's total cost of deposits declined by 4 basis points to 0.22% and the cost of interest-bearing deposits decreased to 0.30% from 0.34% in the previous quarter.

Noninterest Income

Noninterest income was $53.2 million for the fourth quarter of 2021, compared to $59.0 million for the third quarter of 2021 and $80.6 million for the fourth quarter of 2020. Mortgage banking income decreased to $31.4 million in the fourth quarter of 2021, compared to $45.4 million for the third quarter of 2021 and $65.7 million for the fourth quarter of 2020.

Noninterest income increased from a $9.4 million realized gain from two relationships in our commercial loans held for sale portfolio that were resolved during the fourth quarter. The remaining portfolio also had $0.5 million of positive fair value changes compared to the previous quarter. The $9.9 million gain on the commercial loans held for sale portfolio compares to a gain of $0.7 million in the third quarter of 2021.

The Company's total mortgage banking pre-tax net contribution for the fourth quarter of 2021 was $0.7 million, compared to $8.9 million for the third quarter of 2021 and $22.2 million for the fourth quarter of 2020. Interest rate lock commitment volume totaled $1.48 billion in the fourth quarter of 2021 compared to $2.01 billion in the third quarter of 2021 and $2.19 billion in the fourth quarter of 2020.

Chief Financial Officer, Michael Mettee noted, "Our mortgage business had a good year with a pre-tax net contribution of $26.5 million. As anticipated the fourth quarter contribution was down due to seasonality in our purchase business, less refinance volume and lower margins." Mettee continued, "We continue to liquidate the commercial loans held for sale portfolio primarily through pay downs and payoffs, with favorable results. We have been confident in our understanding and management of the portfolio since our merger and continue to have confidence in the valuation of the remaining $79.3 million."

Expense Management

Noninterest expenses were $90.9 million for the fourth quarter of 2021, compared to $95.0 million for the third quarter of 2021 and $109.9 million for the fourth quarter of 2020. Core noninterest expense was $89.5 million for the fourth quarter of 2021, $95.0 million for the third quarter of 2021, and $95.8 million for the fourth quarter of 2020.

During the fourth quarter of 2021, the Company's core efficiency ratio was 67.0%, compared to 64.7% in the third quarter of 2021 and 58.5% for the fourth quarter of 2020. The Banking segment core efficiency ratio was 57.5% versus the previous quarter of 57.9% while the Mortgage segment core efficiency ratio increased to 97.8% for the fourth quarter of 2021 from 80.0% in the previous quarter.

Mettee noted, "The increase in our efficiency ratio was driven by expected seasonality in mortgage revenue. Core expenses in the Banking segment met expectations and total noninterest expenses were slightly elevated due to two charitable contributions totaling $1.4 million that are not run rate expenses but are important investments in the communities we serve."

Credit Quality

The Company recorded a total net reversal in provisions for credit losses of $10.8 million in the fourth quarter of 2021, including an increase in provision for credit losses on unfunded commitments of $0.9 million. The Company continues to maintain a fortified balance sheet with an allowance for credit losses ("ACL") of $125.6 million as of December 31, 2021, representing 1.65% of loans HFI.

The Company's net charge-offs to average loans was 0.12% for the fourth quarter of 2021 compared to net charge-offs to average loans of 0.13% in the third quarter of 2021. The Company's nonperforming assets as a percentage of total assets remained constant at 0.50% as of December 31, 2021 and September 30, 2021. Nonperforming loans were 0.62% of loans HFI at December 31, 2021, compared to 0.59% at September 30, 2021. There were no deferrals resulting from the COVID-19 pandemic outstanding as of December 31, 2021, compared to $18.0 million outstanding at the end of the third quarter 2021.

Summary

Holmes summarized, "The Company has continued to deliver strong results and capitalize on the economic strength of our markets. As we close the books on a successful 2021, we look ahead into 2022, excited about the opportunities in front of us."

WEBCAST AND CONFERENCE CALL INFORMATION

FB Financial Corporation will host a conference call to discuss the Company's financial results today, January 18, 2022, at 8:00 a.m. (Central Time). To listen to the call, participants should dial 1-888-317-6003 (confirmation code 7100213) approximately 10 minutes prior to the call. A telephonic replay will be available approximately two hours after the call on January 18, 2022, through January 25, 2022, by dialing 1-877-344-7529, confirmation code 5998304.

A live online broadcast of the Company's quarterly conference call will be available online at https://services.choruscall.com/mediaframe/webcast.html?webcastid=0upLTSIz. The online replay will be available approximately an hour following the conclusion of the live broadcast.

ABOUT FB FINANCIAL CORPORATION

FB Financial Corporation (NYSE: FBK) is a financial holding company headquartered in Nashville, Tennessee. FB Financial Corporation operates through its wholly owned banking subsidiary, FirstBank, the third largest Tennessee-headquartered community bank, with 82 full-service bank branches across Tennessee, Kentucky, Alabama and North Georgia, and mortgage offices across the Southeast. FirstBank serves five of the largest metropolitan markets in Tennessee and has approximately $12.6 billion in total assets.

SUPPLEMENTAL FINANCIAL INFORMATION AND EARNINGS PRESENTATION

Investors are encouraged to review this Earnings Release in conjunction with the Supplemental Financial Information and Earnings Presentation posted on the Company's website, which can be found at https://investors.firstbankonline.com. This Earnings Release, the Supplemental Financial Information and the Earnings Presentation are also included with a Current Report on Form 8-K that the Company furnished to the U.S. Securities and Exchange Commission ("SEC") on January 18, 2022.

BUSINESS SEGMENT RESULTS

The Company has included its business segment financial tables as part of the Supplemental Financial Information, which is available in connection with this Earnings Release. A detailed discussion of our historical business segments is included in the Company's Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2020. Further discussion on the revisions to segment reporting made in the first quarter of 2021 is included in the Company's Form 10-Q filed with the SEC for the period ended March 31, 2021, and investors are encouraged to review that discussion in conjunction with this Earnings Release.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release 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. 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," "project," 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) the ongoing effects of the COVID-19 pandemic, including the magnitude and duration of the pandemic and the emergence of new variants, and its impact on general economic and financial market conditions and on the Company's business and the Company's customers' business, results of operations, asset quality and financial condition, (3) ongoing public response to the vaccines that were developed against the virus as well as the decisions of governmental agencies with respect to vaccines, including recommendations related to booster shots and requirements that seek to mandate that individuals receive or employers require that their employees receive the vaccine, (4) those vaccines' efficacy against the virus, including new variants, (5) changes in government interest rate policies and its impact on the Company's business, net interest margin, and mortgage operations, (6) the Company's ability to effectively manage problem credits, (7) the Company's ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions, (8) difficulties and delays in integrating acquired businesses or fully realizing costs savings, revenue synergies and other benefits from future and prior acquisitions, (9) the Company's ability to successfully execute its various business strategies, (10) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, including legislative developments, (11) the potential impact of the proposed phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR, (12) the effectiveness of the Company's cybersecurity controls and procedures to prevent and mitigate attempted intrusions, (13) 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 (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, 2020, 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 Earnings Release, 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.

GAAP RECONCILIATION AND USE OF NON-GAAP FINANCIAL MEASURES

This Earnings Release contains certain financial measures that are not measures recognized under U.S. generally accepted accounting principles ("GAAP") and therefore are considered non-GAAP financial measures. These non-GAAP financial measures may include, without limitation, adjusted net income, adjusted diluted earnings per common share, adjusted and unadjusted pre-tax pre-provision earnings, core revenue, core noninterest expense and core noninterest income, core efficiency ratio (tax equivalent basis), Banking segment core efficiency ratio (tax equivalent basis), Mortgage segment core efficiency ratio (tax equivalent basis), adjusted mortgage contribution, adjusted mortgage pre-tax net contribution, adjusted mortgage pre-tax pre-provision net contribution, adjusted return on average assets and equity, and adjusted pre-tax pre-provision return on average assets and equity. Each of these non-GAAP metrics excludes certain income and expense items that the Company's management considers to be non-core/adjusted in nature. The Company also includes an adjusted allowance for credit losses, adjusted loans held for investment, and adjusted allowance for credit losses to loans held for investment, which all exclude the impact of PPP loans. The Company refers to these non-GAAP measures as adjusted (or core) measures. Also, the Company presents tangible assets, tangible common equity, tangible book value per common share, tangible common equity to tangible assets, return on average tangible common equity, adjusted return on average tangible common equity, and adjusted pre-tax pre-provision return on average tangible common equity. Each of these non-GAAP metrics excludes the impact of goodwill and other intangibles.

The Company's management uses these non-GAAP financial measures in their analysis of the Company's performance, financial condition and the efficiency of its operations as management believes such measures facilitate period-to-period comparisons and provide meaningful indications of its operating performance as they eliminate both gains and charges that management views as non-recurring or not indicative of operating performance. Management believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods as well as demonstrate the effects of significant non-core gains and charges in the current and prior periods. The Company's management also believes that investors find these non-GAAP financial measures useful as they assist investors in understanding the Company's underlying operating performance and in the analysis of ongoing operating trends. In addition, because intangible assets such as goodwill and other intangibles, and the other items excluded each vary extensively from company to company, the Company believes that the presentation of this information allows investors to more easily compare the Company's results to the results of other companies. However, the non-GAAP financial measures discussed herein 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 the Company calculates the non-GAAP financial measures discussed herein may differ from that of other companies reporting measures with similar names. Investors should understand how such other banking organizations calculate their financial measures similar or with names similar to the non-GAAP financial measures the Company has discussed herein when comparing such non-GAAP financial measures. See the corresponding non-GAAP reconciliation tables below in this Earnings Release for additional discussion and reconciliation of these measures to the most directly comparable GAAP financial measures.

2021 2020

(dollars in thousands, Fourth Quarter Third Quarter Fourth Quarterexcept share data)

Results of operations

Net interest income $ 89,755 $ 88,476 $ 85,244

NIM 3.19 % 3.20 % 3.32 %

Provisions for credit losses $ (10,769 ) $ (2,531 ) $ (2,920 )

Net charge-off ratio 0.12 % 0.13 % 0.58 %

Noninterest income $ 53,219 $ 59,006 $ 80,638

Mortgage banking income $ 31,350 $ 45,384 $ 65,729

Total revenue $ 142,974 $ 147,482 $ 165,882

Noninterest expense $ 90,902 $ 95,007 $ 109,855

Merger expenses $ - $ - $ 9,513

Efficiency ratio 63.6 % 64.4 % 66.2 %

Core efficiency ratio* 67.0 % 64.7 % 58.5 %

Adjusted pre-tax, $ 43,573 $ 51,240 $ 67,988 pre-provision earnings*

Total adjusted mortgagebanking pre-tax net $ 710 $ 8,853 $ 22,882 contribution^*

Net income applicable to FB $ 48,827 $ 45,290 $ 45,602 Financial Corporation^(1)

Diluted earnings per common $ 1.02 $ 0.94 $ 0.95 share

Effective tax rate 22.3 % 17.7 % 22.6 %

Adjusted net income* $ 42,551 $ 42,699 $ 54,454

Adjusted diluted earnings $ 0.89 $ 0.89 $ 1.14 per common share*

Weighted average number ofshares outstanding - fully 47,896,715 48,007,147 47,791,659 diluted

Actual shares outstanding - 47,549,241 47,707,634 47,220,743 period end

Returns on average:

Assets ("ROAA") 1.60 % 1.51 % 1.63 %

Equity ("ROAE") 13.7 % 12.9 % 14.4 %

Tangible common equity 16.8 % 15.9 % 18.2 %("ROATCE")*

* Certain measures are considered non-GAAP financial measures. For areconciliation and discussion of this non-GAAP measure, see "GAAPReconciliation and Use of non-GAAP Financial Measures" and the correspondingnon-GAAP reconciliation tables in this Earnings Release dated January 18, 2022.

^(1) Includes a dividend declared and paid by the Company's REIT subsidiary tominority interest preferred shareholders in the fourth quarters of 2021 and2020.

Balance Sheet and Net Interest Margin

The Company reported loan balances (HFI) of $7.60 billion, an increase of $310.0 million, or 16.9% annualized, from September 30, 2021. Excluding PPP loans, adjusted loans (HFI) increased $315.4 million, or 17.2% annualized, on a linked quarter basis. The contractual yield on loans decreased to 4.17% in the fourth quarter of 2021 from 4.23% in the third quarter of 2021.

The Company's net interest income on a tax-equivalent basis for the fourth quarter of 2021 was $90.5 million, an increase from $89.2 million in the previous quarter. The Company's net interest margin ("NIM") was 3.19% for the fourth quarter, compared to 3.20% for the third quarter of 2021. The NIM for the fourth quarter of 2021 was impacted by a 4 basis point decline in the yield on interest-earning assets, offset by a 4 basis point decline in the cost of interest-bearing liabilities on a linked quarter basis. During the quarter, on balance sheet liquidity increased to $2.22 billion, or 18.0% of tangible assets, from $1.75 billion, or 15.1% of tangible assets as of September 30, 2021. As of December 31, 2021, our PPP loan balance decreased to $4.0 million from $9.4 million at September 30, 2021.

During the fourth quarter of 2021, total deposits increased by $765.0 million to $10.84 billion on a linked quarter basis, primarily related to seasonal inflows of public funds. Noninterest bearing deposits increased by $130.6 million, or 19.9% annualized, during the fourth quarter. Excluding mortgage-escrow related deposits, noninterest bearing deposits increased by $193.7 million during the fourth quarter, or 31.8% annualized. The Company's total cost of deposits declined by 4 basis points to 0.22% and the cost of interest-bearing deposits decreased to 0.30% from 0.34% in the previous quarter.

Noninterest Income

Noninterest income was $53.2 million for the fourth quarter of 2021, compared to $59.0 million for the third quarter of 2021 and $80.6 million for the fourth quarter of 2020. Mortgage banking income decreased to $31.4 million in the fourth quarter of 2021, compared to $45.4 million for the third quarter of 2021 and $65.7 million for the fourth quarter of 2020.

Noninterest income increased from a $9.4 million realized gain from two relationships in our commercial loans held for sale portfolio that were resolved during the fourth quarter. The remaining portfolio also had $0.5 million of positive fair value changes compared to the previous quarter. The $9.9 million gain on the commercial loans held for sale portfolio compares to a gain of $0.7 million in the third quarter of 2021.

The Company's total mortgage banking pre-tax net contribution for the fourth quarter of 2021 was $0.7 million, compared to $8.9 million for the third quarter of 2021 and $22.2 million for the fourth quarter of 2020. Interest rate lock commitment volume totaled $1.48 billion in the fourth quarter of 2021 compared to $2.01 billion in the third quarter of 2021 and $2.19 billion in the fourth quarter of 2020.

Chief Financial Officer, Michael Mettee noted, "Our mortgage business had a good year with a pre-tax net contribution of $26.5 million. As anticipated the fourth quarter contribution was down due to seasonality in our purchase business, less refinance volume and lower margins." Mettee continued, "We continue to liquidate the commercial loans held for sale portfolio primarily through pay downs and payoffs, with favorable results. We have been confident in our understanding and management of the portfolio since our merger and continue to have confidence in the valuation of the remaining $79.3 million."

Expense Management

Noninterest expenses were $90.9 million for the fourth quarter of 2021, compared to $95.0 million for the third quarter of 2021 and $109.9 million for the fourth quarter of 2020. Core noninterest expense was $89.5 million for the fourth quarter of 2021, $95.0 million for the third quarter of 2021, and $95.8 million for the fourth quarter of 2020.

During the fourth quarter of 2021, the Company's core efficiency ratio was 67.0%, compared to 64.7% in the third quarter of 2021 and 58.5% for the fourth quarter of 2020. The Banking segment core efficiency ratio was 57.5% versus the previous quarter of 57.9% while the Mortgage segment core efficiency ratio increased to 97.8% for the fourth quarter of 2021 from 80.0% in the previous quarter.

Mettee noted, "The increase in our efficiency ratio was driven by expected seasonality in mortgage revenue. Core expenses in the Banking segment met expectations and total noninterest expenses were slightly elevated due to two charitable contributions totaling $1.4 million that are not run rate expenses but are important investments in the communities we serve."

Credit Quality

The Company recorded a total net reversal in provisions for credit losses of $10.8 million in the fourth quarter of 2021, including an increase in provision for credit losses on unfunded commitments of $0.9 million. The Company continues to maintain a fortified balance sheet with an allowance for credit losses ("ACL") of $125.6 million as of December 31, 2021, representing 1.65% of loans HFI.

The Company's net charge-offs to average loans was 0.12% for the fourth quarter of 2021 compared to net charge-offs to average loans of 0.13% in the third quarter of 2021. The Company's nonperforming assets as a percentage of total assets remained constant at 0.50% as of December 31, 2021 and September 30, 2021. Nonperforming loans were 0.62% of loans HFI at December 31, 2021, compared to 0.59% at September 30, 2021. There were no deferrals resulting from the COVID-19 pandemic outstanding as of December 31, 2021, compared to $18.0 million outstanding at the end of the third quarter 2021.

Summary

Holmes summarized, "The Company has continued to deliver strong results and capitalize on the economic strength of our markets. As we close the books on a successful 2021, we look ahead into 2022, excited about the opportunities in front of us."

WEBCAST AND CONFERENCE CALL INFORMATION

FB Financial Corporation will host a conference call to discuss the Company's financial results today, January 18, 2022, at 8:00 a.m. (Central Time). To listen to the call, participants should dial 1-888-317-6003 (confirmation code 7100213) approximately 10 minutes prior to the call. A telephonic replay will be available approximately two hours after the call on January 18, 2022, through January 25, 2022, by dialing 1-877-344-7529, confirmation code 5998304.

A live online broadcast of the Company's quarterly conference call will be available online at https://services.choruscall.com/mediaframe/webcast.html?webcastid=0upLTSIz. The online replay will be available approximately an hour following the conclusion of the live broadcast.

ABOUT FB FINANCIAL CORPORATION

FB Financial Corporation (NYSE: FBK) is a financial holding company headquartered in Nashville, Tennessee. FB Financial Corporation operates through its wholly owned banking subsidiary, FirstBank, the third largest Tennessee-headquartered community bank, with 82 full-service bank branches across Tennessee, Kentucky, Alabama and North Georgia, and mortgage offices across the Southeast. FirstBank serves five of the largest metropolitan markets in Tennessee and has approximately $12.6 billion in total assets.

SUPPLEMENTAL FINANCIAL INFORMATION AND EARNINGS PRESENTATION

Investors are encouraged to review this Earnings Release in conjunction with the Supplemental Financial Information and Earnings Presentation posted on the Company's website, which can be found at https://investors.firstbankonline.com. This Earnings Release, the Supplemental Financial Information and the Earnings Presentation are also included with a Current Report on Form 8-K that the Company furnished to the U.S. Securities and Exchange Commission ("SEC") on January 18, 2022.

BUSINESS SEGMENT RESULTS

The Company has included its business segment financial tables as part of the Supplemental Financial Information, which is available in connection with this Earnings Release. A detailed discussion of our historical business segments is included in the Company's Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2020. Further discussion on the revisions to segment reporting made in the first quarter of 2021 is included in the Company's Form 10-Q filed with the SEC for the period ended March 31, 2021, and investors are encouraged to review that discussion in conjunction with this Earnings Release.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release 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. 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," "project," 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) the ongoing effects of the COVID-19 pandemic, including the magnitude and duration of the pandemic and the emergence of new variants, and its impact on general economic and financial market conditions and on the Company's business and the Company's customers' business, results of operations, asset quality and financial condition, (3) ongoing public response to the vaccines that were developed against the virus as well as the decisions of governmental agencies with respect to vaccines, including recommendations related to booster shots and requirements that seek to mandate that individuals receive or employers require that their employees receive the vaccine, (4) those vaccines' efficacy against the virus, including new variants, (5) changes in government interest rate policies and its impact on the Company's business, net interest margin, and mortgage operations, (6) the Company's ability to effectively manage problem credits, (7) the Company's ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions, (8) difficulties and delays in integrating acquired businesses or fully realizing costs savings, revenue synergies and other benefits from future and prior acquisitions, (9) the Company's ability to successfully execute its various business strategies, (10) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, including legislative developments, (11) the potential impact of the proposed phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR, (12) the effectiveness of the Company's cybersecurity controls and procedures to prevent and mitigate attempted intrusions, (13) 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 (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, 2020, 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 Earnings Release, 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.

GAAP RECONCILIATION AND USE OF NON-GAAP FINANCIAL MEASURES

This Earnings Release contains certain financial measures that are not measures recognized under U.S. generally accepted accounting principles ("GAAP") and therefore are considered non-GAAP financial measures. These non-GAAP financial measures may include, without limitation, adjusted net income, adjusted diluted earnings per common share, adjusted and unadjusted pre-tax pre-provision earnings, core revenue, core noninterest expense and core noninterest income, core efficiency ratio (tax equivalent basis), Banking segment core efficiency ratio (tax equivalent basis), Mortgage segment core efficiency ratio (tax equivalent basis), adjusted mortgage contribution, adjusted mortgage pre-tax net contribution, adjusted mortgage pre-tax pre-provision net contribution, adjusted return on average assets and equity, and adjusted pre-tax pre-provision return on average assets and equity. Each of these non-GAAP metrics excludes certain income and expense items that the Company's management considers to be non-core/adjusted in nature. The Company also includes an adjusted allowance for credit losses, adjusted loans held for investment, and adjusted allowance for credit losses to loans held for investment, which all exclude the impact of PPP loans. The Company refers to these non-GAAP measures as adjusted (or core) measures. Also, the Company presents tangible assets, tangible common equity, tangible book value per common share, tangible common equity to tangible assets, return on average tangible common equity, adjusted return on average tangible common equity, and adjusted pre-tax pre-provision return on average tangible common equity. Each of these non-GAAP metrics excludes the impact of goodwill and other intangibles.

The Company's management uses these non-GAAP financial measures in their analysis of the Company's performance, financial condition and the efficiency of its operations as management believes such measures facilitate period-to-period comparisons and provide meaningful indications of its operating performance as they eliminate both gains and charges that management views as non-recurring or not indicative of operating performance. Management believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods as well as demonstrate the effects of significant non-core gains and charges in the current and prior periods. The Company's management also believes that investors find these non-GAAP financial measures useful as they assist investors in understanding the Company's underlying operating performance and in the analysis of ongoing operating trends. In addition, because intangible assets such as goodwill and other intangibles, and the other items excluded each vary extensively from company to company, the Company believes that the presentation of this information allows investors to more easily compare the Company's results to the results of other companies. However, the non-GAAP financial measures discussed herein 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 the Company calculates the non-GAAP financial measures discussed herein may differ from that of other companies reporting measures with similar names. Investors should understand how such other banking organizations calculate their financial measures similar or with names similar to the non-GAAP financial measures the Company has discussed herein when comparing such non-GAAP financial measures. See the corresponding non-GAAP reconciliation tables below in this Earnings Release for additional discussion and reconciliation of these measures to the most directly comparable GAAP financial measures.

Financial Summary and Key Metrics

(Unaudited)

(In Thousands, Except Share Data and %)



2021 2020

Fourth Quarter Third Quarter Fourth Quarter

Statement of Income Data

Total interest income $ 97,219 $ 96,665 $ 98,236

Total interest expense 7,464 8,189 12,992

Net interest income 89,755 88,476 85,244

Total noninterest income 53,219 59,006 80,638

Total noninterest expense 90,902 95,007 109,855

Earnings before income taxesand provisions for credit 52,072 52,475 56,027 losses

Provisions for credit losses (10,769 ) (2,531 ) (2,920 )

Income tax expense 14,006 9,716 13,337

Net income applicable to 8 - 8 noncontrolling interest

Net income applicable to FB $ 48,827 $ 45,290 $ 45,602 Financial Corporation^(c)

Net interest income $ 90,537 $ 89,230 $ 86,111 (tax-equivalent basis)

Adjusted net income* $ 42,551 $ 42,699 $ 54,454

Adjusted pre-tax, $ 43,573 $ 51,240 $ 67,988 pre-provision earnings*

Per Common Share

Diluted net income $ 1.02 $ 0.94 $ 0.95

Adjusted diluted net income* 0.89 0.89 1.14

Book value 30.13 29.36 27.35

Tangible book value* 24.67 23.90 21.73

Weighted average number ofshares outstanding - fully 47,896,715 48,007,147 47,791,659 diluted

Period-end number of shares 47,549,241 47,707,634 47,220,743

Selected Balance Sheet Data

Cash and cash equivalents $ 1,797,740 $ 1,324,564 $ 1,317,898

Loans held for investment 7,604,662 7,294,674 7,082,959 (HFI)

Allowance for credit losses^ (125,559 ) (139,446 ) (170,389 )(a)

Mortgage loans held for 672,924 755,210 683,770 sale, at fair value

Commercial loans held for 79,299 100,496 215,403 sale, at fair value

Investment securities, at 1,681,892 1,577,337 1,176,991 fair value

Other real estate owned, net 9,777 10,015 12,111

Total assets 12,597,686 11,810,290 11,207,330

Customer deposits 10,809,410 10,043,901 9,396,478

Brokered and internet time 27,487 28,017 61,559 deposits

Total deposits 10,836,897 10,071,918 9,458,037

Borrowings 171,778 172,710 238,324

Total common shareholders' 1,432,602 1,400,913 1,291,289 equity

Selected Ratios

Return on average:

Assets 1.60 % 1.51 % 1.63 %

Shareholders' equity 13.7 % 12.9 % 14.4 %

Tangible common equity* 16.8 % 15.9 % 18.2 %

Average shareholders' equity 11.7 % 11.7 % 11.3 %to average assets

Net interest margin (NIM) 3.19 % 3.20 % 3.32 %(tax-equivalent basis)

Efficiency ratio (GAAP) 63.6 % 64.4 % 66.2 %

Core efficiency ratio 67.0 % 64.7 % 58.5 %(tax-equivalent basis)*

Loans HFI to deposit ratio 70.2 % 72.4 % 74.9 %

Total loans to deposit ratio 77.1 % 80.9 % 84.4 %

Yield on interest-earning 3.45 % 3.49 % 3.82 %assets

Cost of interest-bearing 0.38 % 0.42 % 0.73 %liabilities

Cost of total deposits 0.22 % 0.26 % 0.46 %

Credit Quality Ratios

Allowance for credit lossesas a percentage of loans HFI 1.65 % 1.91 % 2.41 %^(a)

Adjusted allowance forcredit losses as a 1.65 % 1.91 % 2.48 %percentage of loans HFI*^(a)

Net charge-offs as apercentage of average loans 0.12 % 0.13 % 0.58 %HFI

Nonperforming loans HFI as apercentage of total loans 0.62 % 0.59 % 0.91 %HFI

Nonperforming assets as a 0.50 % 0.50 % 0.75 %percentage of total assets

Preliminary capital ratios (Consolidated)

Total common shareholders' 11.4 % 11.9 % 11.5 %equity to assets

Tangible common equity to 9.51 % 9.87 % 9.38 %tangible assets*

Tier 1 capital (to average 10.5 % 10.4 % 10.0 %assets)

Tier 1 capital (to 12.6 % 12.7 % 12.0 %risk-weighted assets)^(b)

Total capital (to 14.4 % 14.6 % 15.0 %risk-weighted assets)^(b)

Common equity Tier 1 (torisk-weighted assets) (CET1) 12.3 % 12.4 % 11.7 %^(b)

(a) Excludes reserve for credit losses on unfunded commitments of $14,380, $13,503, and $16,378 recorded in accrued expenses and other liabilities at December 31, 2021, September 30, 2021, and December 31, 2020, respectively.

(b) We calculate our risk-weighted assets using the standardized method of the Basel III Framework.

(c) Includes a dividend declared and paid by the Company's REIT subsidiary to minority interest preferred shareholders in fourth quarter of 2021 and fourth quarter of 2020.

*These measures are considered non-GAAP financial measures. For a reconciliation and discussion of this non-GAAP measure, see "GAAP Reconciliation and Use of non-GAAP Financial Measures" and the corresponding non-GAAP reconciliation tables in this Earnings Release dated January 18, 2022.

(a) Excludes reserve for credit losses on unfunded commitments of $14,380,$13,503, and $16,378 recorded in accrued expenses and other liabilities atDecember 31, 2021, September 30, 2021, and December 31, 2020, respectively.

(b) We calculate our risk-weighted assets using the standardized method of theBasel III Framework.

(c) Includes a dividend declared and paid by the Company's REIT subsidiary tominority interest preferred shareholders in fourth quarter of 2021 and fourthquarter of 2020.

*These measures are considered non-GAAP financial measures. For areconciliation and discussion of this non-GAAP measure, see "GAAPReconciliation and Use of non-GAAP Financial Measures" and the correspondingnon-GAAP reconciliation tables in this Earnings Release dated January 18, 2022.

Non-GAAP Reconciliation

For the Periods Ended

(Unaudited)

(In Thousands, Except Share Data and %)

2021

2020

Adjusted net income

Fourth Quarter

Third Quarter

Fourth Quarter

Income before income taxes

$

62,841

$

55,006

$

58,947

Plus merger and conversion expenses

-

-

9,513

Less other non-operating items(1)

8,499

1,235

(2,448

)

Adjusted pre-tax net income

54,342

53,771

70,908

Income tax expense, adjusted(2)

11,791

11,072

16,454

Adjusted net income

$

42,551

$

42,699

$

54,454

Weighted average common shares outstanding - fully diluted

47,896,715

48,007,147

47,791,659

Adjusted diluted earnings per common share

Diluted earnings per common share

$

1.02

$

0.94

$

0.95

Plus merger and conversion expenses

-

-

0.20

Less other non-operating items

0.18

0.02

(0.05

)

Less tax effect

(0.05

)

0.03

0.06

Adjusted diluted earnings per common share

$

0.89

$

0.89

$

1.14

(1)4Q21 includes $9,921 gain from change in fair value of commercial loans held for sale acquired from Franklin and $1,422 related to certain nonrecurring charitable contributions; 3Q21 includes a $740 gain from change in fair value of commercial loans held for sale acquired from Franklin, a $1,510 loss on swap cancellation, and a gain of $2,005 from sales other real estate owned; 4Q20 includes $4,533 FHLB prepayment penalty offset by $715 cash life insurance benefit and $1,370 gain from change in fair value of commercial loans held for sale acquired from Franklin.

(2)3Q21 includes a $1,678 tax benefit related to a change in the value of a net operating loss tax asset related to Franklin.

Adjusted net income

2021

2020

2019

Income before income taxes

$

243,051

$

82,461

$

109,539

Plus merger, conversion and offering expenses

605

34,879

7,380

Plus initial provision for credit losses on acquired loans and unfunded commitments

-

66,136

-

Less other non-operating items(1)

11,032

(4,400

)

-

Adjusted pre-tax net income

232,624

187,876

116,919

Income tax expense, adjusted(2)

51,553

45,944

27,648

Adjusted net income

$

181,071

$

141,932

$

89,271

Weighted average common shares outstanding - fully diluted

47,955,880

38,099,744

31,402,897

Adjusted diluted earnings per share

Diluted earnings per common share

$

3.97

$

1.67

$

2.65

Plus merger, conversion and offering expenses

0.01

0.92

0.24

Plus initial provision for credit losses on acquired loans and unfunded commitments

-

1.74

-

Less other non-operating items

0.22

(0.11

)

-

Less tax effect

(0.02

)

0.71

0.06

Adjusted diluted earnings per common share

$

3.78

$

3.73

$

2.83

(1)2021 includes a $11,172 gain from change in fair value on commercial loans held for sale acquired from Franklin, a loss on swap cancellation of $1,510, a $2,005 gain on other real estate owned, a $787 gain from lease terminations and $1,422 related to certain charitable contributions; 2020 includes $6,838 FHLB prepayment penalties, $1,505 losses on other real estate owned offset by $715 cash life insurance benefit and $3,228 gain from change in fair value on commercial loans held for sale acquired from Franklin.

(2)2021 includes a $1,678 tax benefit related to a change in the value of a net operating loss tax asset related to Franklin.

Non-GAAP Reconciliation

For the Periods Ended

(Unaudited)

(In Thousands, Except Share Data and %)



2021 2020

Adjusted net Fourth Quarter Third Quarter Fourth Quarterincome

Income before $ 62,841 $ 55,006 $ 58,947 income taxes

Plus mergerand conversion - - 9,513expenses

Less other )non-operating 8,499 1,235 (2,448 items^(1)

Adjusted pre-tax net 54,342 53,771 70,908 income

Income tax expense, 11,791 11,072 16,454 adjusted^(2)

Adjusted net $ 42,551 $ 42,699 $ 54,454 income

Weightedaveragecommon shares 47,896,715 48,007,147 47,791,659 outstanding -fully diluted

Adjusteddiluted earnings percommon share

Dilutedearnings per $ 1.02 $ 0.94 $ 0.95 common share

Plus mergerand conversion - - 0.20expenses

Less other )non-operating 0.18 0.02 (0.05 items

Less tax ) effect (0.05 0.03 0.06

Adjusteddiluted $ 0.89 $ 0.89 $ 1.14 earnings percommon share

^(1) 4Q21 includes $9,921 gain from change in fair value of commercial loansheld for sale acquired from Franklin and $1,422 related to certain nonrecurringcharitable contributions; 3Q21 includes a $740 gain from change in fair valueof commercial loans held for sale acquired from Franklin, a $1,510 loss on swapcancellation, and a gain of $2,005 from sales other real estate owned; 4Q20includes $4,533 FHLB prepayment penalty offset by $715 cash life insurancebenefit and $1,370 gain from change in fair value of commercial loans held forsale acquired from Franklin.

^(2) 3Q21 includes a $1,678 tax benefit related to a change in the value of anet operating loss tax asset related to Franklin.



Adjusted net 2021 2020 2019income

Income before $ 243,051 $ 82,461 $ 109,539 income taxes

Plus merger,conversion and offering 605 34,879 7,380expenses

Plus initialprovision forcredit losses on acquired - 66,136 - loans andunfundedcommitments

Less other ) non-operating 11,032 (4,400 - items^(1)

Adjustedpre-tax net 232,624 187,876 116,919 income

Income tax expense, 51,553 45,944 27,648 adjusted^(2)

Adjusted net $ 181,071 $ 141,932 $ 89,271 income

Weightedaveragecommon shares 47,955,880 38,099,744 31,402,897 outstanding -fully diluted

Adjusteddiluted earnings pershare

Dilutedearnings per $ 3.97 $ 1.67 $ 2.65 common share

Plus merger,conversion and offering 0.01 0.92 0.24expenses

Plus initialprovision forcredit losses on acquired - 1.74 - loans andunfundedcommitments

Less other ) non-operating 0.22 (0.11 - items

Less tax ) effect (0.02 0.71 0.06

Adjusteddiluted $ 3.78 $ 3.73 $ 2.83 earnings percommon share

^(1) 2021 includes a $11,172 gain from change in fair value on commercial loansheld for sale acquired from Franklin, a loss on swap cancellation of $1,510, a$2,005 gain on other real estate owned, a $787 gain from lease terminations and$1,422 related to certain charitable contributions; 2020 includes $6,838 FHLBprepayment penalties, $1,505 losses on other real estate owned offset by $715cash life insurance benefit and $3,228 gain from change in fair value oncommercial loans held for sale acquired from Franklin.

^(2) 2021 includes a $1,678 tax benefit related to a change in the value of anet operating loss tax asset related to Franklin.

Non-GAAP Reconciliation

For the Periods Ended

(Unaudited)

(In Thousands, Except Share Data and %)

2021

2020

Adjusted pre-tax pre-provision earnings

Fourth Quarter

Third Quarter

Fourth Quarter

Income before income taxes

$

62,841

$

55,006

$

58,947

Plus provisions for credit losses

(10,769

)

(2,531

)

(2,920

)

Pre-tax pre-provision earnings

52,072

52,475

56,027

Plus merger and conversion expenses

-

-

9,513

Less other non-operating items

8,499

1,235

(2,448

)

Adjusted pre-tax pre-provision earnings

$

43,573

$

51,240

$

67,988

2021

2020

Core efficiency ratio (tax-equivalent basis)

Fourth Quarter

Third Quarter

Fourth Quarter

Total noninterest expense

$

90,902

$

95,007

$

109,855

Less merger and conversion expenses

-

-

9,513

Less FHLB prepayment penalties

-

-

4,533

Less certain charitable contributions

1,422

-

-

Core noninterest expense

$

89,480

$

95,007

$

95,809

Net interest income (tax-equivalent basis)

$

90,537

$

89,230

$

86,111

Total noninterest income

53,219

59,006

80,638

Less gain on change in fair value on commercial loans held for sale

9,921

740

1,370

Less cash life insurance benefit

-

-

715

Less loss on swap cancellation

-

(1,510

)

-

Less gain (loss) on sales or write-downs of other real estate owned and other

assets

187

2,182

(57

)

Less gain from securities, net

46

51

1,013

Core noninterest income

43,065

57,543

77,597

Core revenue

$

133,602

$

146,773

$

163,708

Efficiency ratio (GAAP)(a)

63.6

%

64.4

%

66.2

%

Core efficiency ratio (tax-equivalent basis)

67.0

%

64.7

%

58.5

%

(a)Efficiency ratio (GAAP) is calculated by dividing reported noninterest expense by reported total revenue

Non-GAAP Reconciliation

For the Periods Ended

(Unaudited)

(In Thousands, Except Share Data and %)



2021 2020

Adjustedpre-tax Fourth Quarter Third Quarter Fourth Quarterpre-provisionearnings

Income before $ 62,841 $ 55,006 $ 58,947 income taxes

Plus provisions ) ) )for credit (10,769 (2,531 (2,920 losses

Pre-tax pre-provision 52,072 52,475 56,027 earnings

Plus merger and conversion - - 9,513 expenses

Less other )non-operating 8,499 1,235 (2,448 items

Adjustedpre-tax $ 43,573 $ 51,240 $ 67,988 pre-provisionearnings



2021 2020

Core efficiencyratio Fourth Quarter Third Quarter Fourth Quarter(tax-equivalentbasis)

Totalnoninterest $ 90,902 $ 95,007 $ 109,855 expense

Less merger and conversion - - 9,513 expenses

Less FHLB prepayment - - 4,533 penalties

Less certain charitable 1,422 - - contributions

Corenoninterest $ 89,480 $ 95,007 $ 95,809 expense

Net interestincome $ 90,537 $ 89,230 $ 86,111 (tax-equivalentbasis)

Total noninterest 53,219 59,006 80,638 income

Less gain onchange in fairvalue on commercial 9,921 740 1,370loans held forsale

Less cash life insurance - - 715 benefit

Less loss on ) swap - (1,510 - cancellation

Less gain(loss) on salesor write-downsof other real )estate owned 187 2,182 (57 and other

assets

Less gain from securities, net 46 51 1,013

Core noninterest 43,065 57,543 77,597 income

Core revenue $ 133,602 $ 146,773 $ 163,708

Efficiencyratio (GAAP)^ 63.6 % 64.4 % 66.2 %(a)

Core efficiencyratio 67.0 % 64.7 % 58.5 %(tax-equivalentbasis)

^(a) Efficiency ratio (GAAP) is calculated by dividing reported noninterestexpense by reported total revenue

Non-GAAP Reconciliation (continued)

For the Periods Ended

(Unaudited)

(In Thousands, Except Share Data and %)

During the first quarter of 2021, the Company re-evaluated its reportable business segments to align all retail mortgage activities with the Mortgage segment. Prior to 2021, the Company chose to assign retail mortgage activities within the Banking geographical footprint to the Banking segment. The results of mortgage retail footprint have been assigned to the Mortgage segment for all periods presented. As such, 4Q20 historical segment efficiency ratios and mortgage contribution have been recast for consistency with these changes.

2021

2020

Banking segment core efficiency ratio (tax equivalent)

Fourth Quarter

Third Quarter

Fourth Quarter

Core noninterest expense

$

89,480

$

95,007

$

95,809

Less Mortgage segment noninterest expense

30,798

36,230

42,884

Core Banking segment noninterest expense

$

58,682

$

58,777

$

52,925

Core revenue

$

133,602

$

146,773

$

163,708

Less Core Mortgage segment total revenue

31,489

45,284

65,766

Core Banking segment total revenue

$

102,113

$

101,489

$

97,942

Banking segment core efficiency ratio (tax-equivalent basis)

57.5

%

57.9

%

54.0

%

Mortgage segment core efficiency ratio (tax equivalent)

Mortgage segment noninterest expense

$

30,798

$

36,230

$

43,609

Less mortgage segment merger expense

-

-

725

Core Mortgage segment noninterest expense

$

30,798

$

36,230

$

42,884

Mortgage segment total revenue

31,508

45,083

65,766

Less gain (loss) on sales or write-downs of other real estate owned

19

(201

)

-

Core Mortgage segment total revenue

$

31,489

$

45,284

$

65,766

Mortgage segment core efficiency ratio (tax-equivalent basis)

97.8

%

80.0

%

65.2

%

2021

2020

Adjusted Mortgage contribution

Fourth Quarter

Third Quarter

Fourth Quarter

Mortgage pre-tax net contribution

$

710

$

8,853

$

22,157

Plus Mortgage merger expense

-

-

725

Adjusted Mortgage pre-tax net contribution

$

710

$

8,853

$

22,882

Pre-tax pre-provision earnings

52,072

52,475

56,027

% total Mortgage pre-tax pre-provision net contribution

1.36

%

16.9

%

39.5

%

Adjusted pre-tax pre-provision earnings

$

43,573

$

51,240

$

67,988

% total adjusted Mortgage pre-tax pre-provision net contribution

1.63

%

17.3

%

33.7

%

2021

2020

Tangible assets and equity

Fourth Quarter

Third Quarter

Fourth Quarter

Tangible assets

Total assets

$

12,597,686

$

11,810,290

$

11,207,330

Less goodwill

242,561

242,561

242,561

Less intangibles, net

16,953

18,248

22,426

Tangible assets

$

12,338,172

$

11,549,481

$

10,942,343

Tangible common equity

Total common shareholders' equity

$

1,432,602

$

1,400,913

$

1,291,289

Less goodwill

242,561

242,561

242,561

Less intangibles, net

16,953

18,248

22,426

Tangible common equity

$

1,173,088

$

1,140,104

$

1,026,302

Common shares outstanding

47,549,241

47,707,634

47,220,743

Book value per common share

$

30.13

$

29.36

$

27.35

Tangible book value per common share

Tangible book value per common share

$

24.67

$

23.90

$

21.73

Total common shareholders' equity to total assets

11.4

%

11.9

%

11.5

%

Tangible common equity to tangible assets

9.51

%

9.87

%

9.38

%

Non-GAAP Reconciliation (continued)

For the Periods Ended

(Unaudited)

(In Thousands, Except Share Data and %)



During the first quarter of 2021, the Company re-evaluated its reportablebusiness segments to align all retail mortgage activities with the Mortgagesegment. Prior to 2021, the Company chose to assign retail mortgage activitieswithin the Banking geographical footprint to the Banking segment. The resultsof mortgage retail footprint have been assigned to the Mortgage segment for allperiods presented. As such, 4Q20 historical segment efficiency ratios andmortgage contribution have been recast for consistency with these changes.



2021 2020

Banking segmentcore efficiency Fourth Quarter Third Quarter Fourth Quarterratio (taxequivalent)

Corenoninterest $ 89,480 $ 95,007 $ 95,809expense

Less Mortgagesegment noninterest 30,798 36,230 42,884expense

Core Bankingsegment $ 58,682 $ 58,777 $ 52,925 noninterestexpense

Core revenue $ 133,602 $ 146,773 $ 163,708

Less CoreMortgage segment total 31,489 45,284 65,766revenue

Core Bankingsegment total $ 102,113 $ 101,489 $ 97,942 revenue

Banking segmentcore efficiencyratio 57.5 % 57.9 % 54.0 %(tax-equivalentbasis)



Mortgagesegment coreefficiency ratio (taxequivalent)

Mortgagesegment $ 30,798 $ 36,230 $ 43,609noninterestexpense

Less mortgage segment merger - - 725 expense

Core Mortgagesegment $ 30,798 $ 36,230 $ 42,884 noninterestexpense

Mortgage segment total 31,508 45,083 65,766revenue

Less gain(loss) on sales ) or write-downs 19 (201 - of other realestate owned

Core Mortgagesegment total $ 31,489 $ 45,284 $ 65,766 revenue

Mortgagesegment coreefficiency 97.8 % 80.0 % 65.2 %ratio(tax-equivalentbasis)



2021 2020

AdjustedMortgage Fourth Quarter Third Quarter Fourth Quartercontribution

Mortgagepre-tax net $ 710 $ 8,853 $ 22,157contribution

Plus Mortgage merger expense - - 725

AdjustedMortgage $ 710 $ 8,853 $ 22,882 pre-tax netcontribution

Pre-tax pre-provision 52,072 52,475 56,027 earnings

% totalMortgagepre-tax 1.36 % 16.9 % 39.5 %pre-provisionnetcontribution

Adjustedpre-tax $ 43,573 $ 51,240 $ 67,988 pre-provisionearnings

% totaladjustedMortgagepre-tax 1.63 % 17.3 % 33.7 %pre-provisionnetcontribution



2021 2020

Tangible assets Fourth Quarter Third Quarter Fourth Quarterand equity

Tangible assets

Total assets $ 12,597,686 $ 11,810,290 $ 11,207,330

Less goodwill 242,561 242,561 242,561

Less intangibles, 16,953 18,248 22,426 net

Tangible assets $ 12,338,172 $ 11,549,481 $ 10,942,343

Tangible common equity

Total commonshareholders' $ 1,432,602 $ 1,400,913 $ 1,291,289 equity

Less goodwill 242,561 242,561 242,561

Less intangibles, 16,953 18,248 22,426 net

Tangible common $ 1,173,088 $ 1,140,104 $ 1,026,302 equity

Common shares 47,549,241 47,707,634 47,220,743 outstanding

Book value per $ 30.13 $ 29.36 $ 27.35 common share

Tangible bookvalue percommon share $ 24.67 $ 23.90 $ 21.73 Tangible bookvalue percommon share

Total commonshareholders' 11.4 % 11.9 % 11.5 %equity to totalassets

Tangible commonequity to 9.51 % 9.87 % 9.38 %tangible assets

Non-GAAP Reconciliation (continued)

For the Periods Ended

(Unaudited)

(In Thousands, Except Share Data and %)

2021

2020

Return on average tangible common equity

Fourth Quarter

Third Quarter

Fourth Quarter

Average common shareholders' equity

$

1,411,987

$

1,389,201

$

1,261,101

Less average goodwill

242,561

242,561

242,983

Less average intangibles, net

17,580

18,950

23,178

Average tangible common equity

$

1,151,846

$

1,127,690

$

994,940

Net income

$

48,827

$

45,290

$

45,602

Return on average common equity

13.7

%

12.9

%

14.4

%

Return on average tangible common equity

16.8

%

15.9

%

18.2

%

Adjusted net income

$

42,551

$

42,699

$

54,454

Adjusted return on average tangible common equity

14.7

%

15.0

%

21.8

%

Adjusted pre-tax pre-provision earnings

$

43,573

$

51,240

$

67,988

Adjusted pre-tax pre-provision return on average tangible common equity

15.0

%

18.0

%

27.2

%

2021

2020

Adjusted return on average assets and equity

Fourth Quarter

Third Quarter

Fourth Quarter

Net income

$

48,827

$

45,290

$

45,602

Average assets

12,085,817

11,915,062

11,111,163

Average equity

1,411,987

1,389,201

1,261,101

Return on average assets

1.60

%

1.51

%

1.63

%

Return on average equity

13.7

%

12.9

%

14.4

%

Adjusted net income

$

42,551

$

42,699

$

54,454

Adjusted return on average assets

1.40

%

1.42

%

1.95

%

Adjusted return on average equity

12.0

%

12.2

%

17.2

%

Adjusted pre-tax pre-provision earnings

$

43,573

$

51,240

$

67,988

Adjusted pre-tax pre-provision return on average assets

1.43

%

1.71

%

2.43

%

Adjusted pre-tax pre-provision return on average equity

12.2

%

14.6

%

21.4

%

Non-GAAP Reconciliation (continued)

For the Periods Ended

(Unaudited)

(In Thousands, Except Share Data and %)



2021 2020

Return on average tangible Fourth Quarter Third Quarter Fourth Quartercommon equity

Average common shareholders' $ 1,411,987 $ 1,389,201 $ 1,261,101 equity

Less average goodwill 242,561 242,561 242,983

Less average intangibles, 17,580 18,950 23,178 net

Average tangible common $ 1,151,846 $ 1,127,690 $ 994,940 equity

Net income $ 48,827 $ 45,290 $ 45,602

Return on average common 13.7 % 12.9 % 14.4 %equity

Return on average tangible 16.8 % 15.9 % 18.2 %common equity

Adjusted net income $ 42,551 $ 42,699 $ 54,454

Adjusted return on average 14.7 % 15.0 % 21.8 %tangible common equity

Adjusted pre-tax $ 43,573 $ 51,240 $ 67,988 pre-provision earnings

Adjusted pre-taxpre-provision return on 15.0 % 18.0 % 27.2 %average tangible commonequity



2021 2020

Adjusted return on average Fourth Quarter Third Quarter Fourth Quarterassets and equity

Net income $ 48,827 $ 45,290 $ 45,602

Average assets 12,085,817 11,915,062 11,111,163

Average equity 1,411,987 1,389,201 1,261,101

Return on average assets 1.60 % 1.51 % 1.63 %

Return on average equity 13.7 % 12.9 % 14.4 %

Adjusted net income $ 42,551 $ 42,699 $ 54,454

Adjusted return on average 1.40 % 1.42 % 1.95 %assets

Adjusted return on average 12.0 % 12.2 % 17.2 %equity

Adjusted pre-tax $ 43,573 $ 51,240 $ 67,988 pre-provision earnings

Adjusted pre-taxpre-provision return on 1.43 % 1.71 % 2.43 %average assets

Adjusted pre-taxpre-provision return on 12.2 % 14.6 % 21.4 %average equity



2021

2020

Adjusted allowance for credit losses to loans held for investment

Fourth Quarter

Third Quarter

Fourth Quarter

Allowance for credit losses

$

125,559

$

139,446

$

170,389

Less allowance for credit losses attributed to PPP loans

-

2

34

Adjusted allowance for credit losses

$

125,559

$

139,444

$

170,355

Loans held for investment

$

7,604,662

$

7,294,674

$

7,082,959

Less PPP loans

3,990

9,415

212,645

Adjusted loans held for investment

$

7,600,672

$

7,285,259

$

6,870,314

Allowance for credit losses to loans held for investment

1.65

%

1.91

%

2.41

%

Adjusted allowance for credit losses to loans held for investment

1.65

%

1.91

%

2.48

%

FBK - ER

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