FB Financial (NYSE:FBK) reported third-quarter 2026 net income of $60.2 million, or $1.20 per share, as loan and deposit growth remained strong across its commercial and consumer businesses. Adjusted net income was $60.9 million, or $1.21 per share.
President and Chief Executive Officer Chris Holmes said the quarter reflected “consistency of execution and the continued momentum in our business,” citing healthy activity across the company’s markets, strong pipelines and opportunities to expand both existing and new customer relationships.
Loan and Deposit Growth Remain Strong
Loans increased at a 9.7% annualized rate during the quarter, at the high end of management’s mid-to-high-single-digit forecast range. Deposits grew at an 8.8% annualized rate, including a reduction in brokered deposits. Customer deposits, excluding that decline, rose at an annualized rate of approximately 11.2%.
Chief Financial Officer and Chief Operating Officer Michael Mettee said community markets including Auburn, Newnan and Tuscaloosa led loan growth, while Birmingham, Chattanooga and Knoxville contributed through larger commercial loans moving through the pipeline.
Contractual loan yields remained stable at 6.21%, while late-quarter production carried yields of roughly 6.44%. Mettee said utilization rates on construction and commercial-and-industrial lending declined by 2% to 3%, leaving room for additional borrowing if customers draw on existing credit lines.
Management expects loan and deposit growth to moderate somewhat in the fourth quarter because of normal seasonal paydowns, renewals and timing of commercial closings. Still, the company expects full-year loan and deposit growth to remain within its mid-to-high-single-digit range.
Holmes said FB Financial continues to see robust activity heading into 2027 and expects to pursue market-share gains even if industrywide loan demand slows. “We have to go grow the company,” Mettee said, adding that the company’s goal is to increase market share in current and new markets.
Margin Pressure, Mortgage Headwinds Affect Results
Net interest margin declined to 3.83% in the third quarter from 3.95% in the second quarter. The decline included a two-basis-point reduction in purchase-accounting accretion and a three-basis-point impact from reversing about $1 million of accrued interest income on a loan placed on non-accrual status.
Excluding those factors, core net interest margin declined about seven basis points to 3.88%, primarily because of continued deposit-pricing pressure. Deposit costs increased six basis points during the quarter, while blended rates on new deposits were about 3% late in the period.
Management maintained its full-year outlook for net interest margin, excluding loan accretion, of 3.7% to 3.8%. It expects fourth-quarter core margin to remain near third-quarter levels as deposit repricing pressure is offset by balance-sheet growth, stable loan yields and the company’s slightly asset-sensitive position.
Mettee said the company expects roughly a three-basis-point increase in margin for every 25-basis-point rise in the federal funds rate, though competitive pressure for deposits could limit that benefit. About 40% of FB Financial’s deposits are indexed, and management said it seeks to adjust rates for relationship customers without requiring them to request increases.
Noninterest income declined $1.3 million, primarily because of lower mortgage banking income as long-term interest rates rose during the quarter. Higher swap-fee and investment-services income partly offset the decline.
The mortgage segment also incurred a one-time $719,000 transition expense tied to the conversion of its mortgage origination platform and sub-servicing arrangements. Mettee said the mortgage business would have remained profitable without the charge.
While management expects higher rates to pressure mortgage originations and profitability in the fourth quarter and 2027, it continues to view mortgage banking as strategically important. The company launched a program to build deposit and investment relationships with mortgage customers, and said 83% of participating borrowers now have a FirstBank checking relationship. Those borrowers’ average deposit balances were about twice the average for existing customers, according to Mettee.
Credit Quality Stable; Capital Position Strengthened
Provision expense totaled $1.4 million in the third quarter. FB Financial’s allowance for credit losses stood at 1.47% of loans at quarter-end, while net charge-offs and nonperforming asset ratios remained stable.
The increase in non-accrual loans was primarily associated with a single credit of approximately $13 million. Holmes said the loan is supported by adequate collateral, much of it liquid, and that the company is working with the borrower toward what it views as a favorable outcome. Management said it believes the credit has limited loss content.
FB Financial issued $125 million of subordinated debt during the quarter, with management planning to deploy the proceeds over time to support loan growth and strategic initiatives. The company’s tangible common equity-to-tangible assets ratio declined 17 basis points, primarily due to share repurchases.
At quarter-end, FB Financial reported a common equity tier 1 ratio of 11%, a tier 1 leverage ratio of 10% and a total risk-based capital ratio of 13.6%. Approximately 61% of its investment portfolio was floating rate, which management said provides flexibility to deploy capital while maintaining liquidity.
Expansion and Talent Development
During the quarter, FB Financial converted its Asheville, North Carolina, loan production office into a full-service location. Holmes described western North Carolina as an attractive expansion market and said the Asheville office could serve as a starting point for additional locations over time.
Holmes also reiterated that the company remains open to bank acquisitions in its broader regional footprint, which includes markets from Virginia through the Carolinas, Tennessee, Alabama, Georgia, parts of Kentucky and northern Florida. He said the company favors institutions near its existing footprint that have strong deposit bases, community-bank characteristics and compatible cultures.
Meanwhile, Mettee said FB Financial hired roughly 10 bankers during the quarter across its footprint and continues to focus on recruiting relationship-oriented employees while developing younger associates internally.
About FB Financial (NYSE:FBK)
FB Financial Corporation is a bank holding company headquartered in Nashville, Tennessee. Its principal subsidiary, FirstBank, provides banking and financial services to individuals, businesses and institutions through a regional branch network and digital banking channels.
FirstBank’s offerings include personal and business deposit accounts, residential and commercial real estate lending, consumer loans, commercial and industrial financing, treasury management, wealth management and mortgage banking services.
