FB Financial Corp Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Stephen Scouten - Piper Sandler - Analyst : Hey. Good morning, guys. I guess if we could talk a little bit about the new hires. Just a little more detail there. And then you said there were nine this quarter and that's 32 on the year. And I think you called out five mortgage producers maybe elsewhere in the presentation. So can you maybe just give us a feel for, maybe the disciplines of those hires that you're bringing on in terms of where they're focused and kind of what you would think would be a viable target for next year if you continue to, to bring in new people.

Question: Stephen Scouten - Piper Sandler - Analyst : Yes, that makes a lot of sense. And is that optimism around hiring, what seems to give you more optimism around growth coming up into this year? Are there other signs that you're seeing that leads to, to kind of this optimism. And as you guys talked about in the release building deposits now for what you expect to be a ramp up in growth here next year.

Question: Stephen Scouten - Piper Sandler - Analyst : Got it. Okay. Yeah, that makes sense. And then maybe just lastly for me. Oh, sorry. Yeah.

Question: Stephen Scouten - Piper Sandler - Analyst : Makes sense. Nice to have that flexibility. Just the last thing for me maybe is your, your comments around M&A Chris, I know kind of in the past you've talked about maybe needing to have some patience around deals because you don't know if you could get more than one deal approved a year or what that timeline might look like. But, we just saw one deal get approved in less than three months of some, some decent size. So, does what you're seeing and hearing. Does it lend you to be slightly more aggressive and think about, okay, if it's a, might be a B plus deal, not an A plus deal, but I might still go after it in this kind of environment. Does it, does it change your mindset there at all?

Question: Stephen Scouten - Piper Sandler - Analyst : Yeah, it makes a lot of sense. Thanks for the time and congrats on the great 2024.

Question: Brett Rabatin - Hovde Group - Analyst : Hey guys. Good morning. Brett Rabatin. Wanted to start on credit and I'm sure you guys saw locally that, we lock sold the B AC Tower, Phillips Plaza and Parkway Towers at pretty significant discount and obviously the common theme there seems to be age of age of building. And so I know office is only about 4% of the portfolio. But just wanted to see if you guys had any thoughts on an office in Nashville, any age properties and if you guys had any kind of median or average age for the portfolio for, for you guys and just how you see the commercial real estate market here. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 21, 2025 / 2:00PM, FBK.N - Q4 2024 FB Financial Corp Earnings Call

Question: Brett Rabatin - Hovde Group - Analyst : Okay. But to the question and, and I saw that on Broadway, that was a very interesting price. But the question I had was the, those to me seem to be outliers, but they also seem to indicate that, maybe properties that were 3,540 years old, you know, might, might have an issue. So the question was, it sounds like you're saying you don't really see anything commercial real estate wise. But just was curious if you guys hadn't guys had an average or median age for your office portfolio for the buildings.

Question: Brett Rabatin - Hovde Group - Analyst : Okay. The other question I wanted to ask was around the margin. Maybe Michael and just talking about the improvement in the first quarter and it my, my sus suspicion is is that a large part of it could be driven by a reduction in liquidity ie using, using some cash to fund loans. Just wanted to hear maybe Michael if that's the case, any other thoughts on what would drive the margin the first quarter. You know, and then just as you guys see it for the full year, I mean, the fed is not changing interest rates just to keep it static. If you guys can, you kind of outrun the local deposit market that's still pretty robust. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 21, 2025 / 2:00PM, FBK.N - Q4 2024 FB Financial Corp Earnings Call

Question: Brett Rabatin - Hovde Group - Analyst : I appreciate the call. Congrats guys on a solid 2024.

Question: Russell Gunther - Stephens, Inc. - Analyst : Hey. Good morning, guys.

Question: Russell Gunther - Stephens, Inc. - Analyst : I just want to follow up on the loan growth discussion earlier. You guys have a lot of good proof points around an optimistic 2025. I think in the past, you've talked about being able to accelerate the growth rate into the double digits. I'm just wondering if that's still the case or if the backup in rates puts a little caution that. How are you, how are you seeing that transpire over the course of the year?

Question: Russell Gunther - Stephens, Inc. - Analyst : Understood. Okay, great. And then switching gears a bit, you guys are in a very comfortable excess capital, excess reserve position. You touched on the pickup in organic growth as well as the potential to put that to use via M&A in 2025. You've also been opportunistic in 24 around security repositionings and the buyback. So how are you thinking about those levers or is it kind of capital build mode for M&A Yeah, I, we didn't necessarily mention that on restructuring and buybacks, but they're all, they're always on the table. We like, you know that the first two options that Chris talked about better capital appointments, which is no change from what you've heard us say. But, but we really think those will materialize here in 2025. So we'll be opportunistic on security restructuring. And, and or on share buybacks if they don't materialize as quickly. But at this point, we're certainly focused on organic opportunities and then M&A second, secondly, got it. Okay, great. Last one for me, I appreciate the commentary on the core expense growth rate within the commercial bank. How are you thinking about expenses within the mortgage vertical and any improved efficiencies there?

Question: Russell Gunther - Stephens, Inc. - Analyst : All right. Very good, guys. That's it for me. Thanks for taking my question.

Question: Catherine Mealor - Keefe, Bruyette & Woods - Analyst : Thanks. Good morning. Just want to follow up on the margin. I want to see if you could talk a little bit about deposit cost. And I think one thing that we're trying to figure out and in the indus as an industry is just what deposit, I think deposit betas have been a lot better for everybody so far. But as we start to see better growth in 25 you know, what, what happens to deposit cost as growth becomes stronger. And so just kind of curious maybe as you put on new deposits, where are those average costs are? And how you're kind of thinking about deposit costs over over the course of 25? Thanks.

Question: Catherine Mealor - Keefe, Bruyette & Woods - Analyst : Great. But then on the flip side with loan pricing, you would, you say that you still are seeing, expansion in your net new margin just given what you're seeing on pricing and expectations for growth to be better.

Question: Catherine Mealor - Keefe, Bruyette & Woods - Analyst : Great. And then maybe, and then maybe one more on the margin just kind of holistically, if we are in a kind of higher, let's look at the fed doesn't move rate. So we're kind of in a higher for longer rate environment. Do you believe that you can still see continued expansion, expansion throughout the next couple of years?

Question: Catherine Mealor - Keefe, Bruyette & Woods - Analyst : Okay, great. And then maybe just one other question, just away from the margin on just growth. We, as you think about hitting high, single digit to low double digit growth in 25 are you seeing more opportunities in C&I versus commercial real estate? Or if you could just kind of help us talk about where you're seeing more pipeline opportunities today, like the 10 year is making us nervous that CRE growth may not be as robust this year, but just kind of curious what you're seeing from your customers.

Question: Catherine Mealor - Keefe, Bruyette & Woods - Analyst : Great. Thanks so much.

Question: Catherine Mealor - Keefe, Bruyette & Woods - Analyst : Makes sense. All right, great. Thank you. Great quarter and great year.

Question: Steve Moss - Raymond James - Analyst : Good morning, guys. Most of my questions have been asked and answered here, but just want to follow up just clarification credit here with the loan that was charged off. You guys mentioned, the specific reserve was that specifically reserved for ahead of this quarter or was that the driver of the provision.

Question: Steve Moss - Raymond James - Analyst : Okay. So then the purge this quarter is a mix of growth and other credit specific reserves maybe. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 21, 2025 / 2:00PM, FBK.N - Q4 2024 FB Financial Corp Earnings Call

Question: Steve Moss - Raymond James - Analyst : Okay, great. And then just one more thing, on in terms of margin sensitivity here, we'll see where the fed goes for the upcoming year, but just kind of curious, where your balance sheet is positioned today for, additional fed rate cuts, whether we get 12 or, more than that, just how you think about the margin.

Question: Steve Moss - Raymond James - Analyst : Great. Well, I really appreciate all the call here today in the next quarter, guys.