false000164974900016497492020-10-262020-10-26

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
   
FORM 8-K
 
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): October 26, 2020
FB FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

Tennessee   001-37875   62-1216058
(State or other jurisdiction
of incorporation) 		  (Commission File Number)   (IRS Employer
Identification Number)
211 Commerce Street, Suite 300
Nashville, Tennessee 37201
(Address of principal executive offices) (Zip Code)

(615) 564-1212
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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, $1.00 par value FBK New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).   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. ☒




Item 2.02 Results of Operations and Financial Condition.

On October 26, 2020, FB Financial Corporation (the “FB Financial”) issued a press release announcing its financial results for the third quarter ended September 30, 2020 (the “Earnings Release”). In addition, FB Financial made available on its website (investors.firstbankonline.com) supplemental financial information for the third quarter ended September 30, 2020 (the “Supplemental Financial Information”) and an earnings release presentation (the “Earnings Presentation”) for use in connection with the Earnings Release. Copies of the Earnings Release, the Supplemental Financial Information and the Earnings Presentation are furnished as Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3, respectively, to this current report on Form 8-K (this “Report”).

The information contained in this Report, including Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3 furnished herewith, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference into any registration statement or other documents pursuant to the Securities Act of 1933, as amended, or into any filing or other document pursuant to the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 7.01. Regulation FD Disclosure.

The disclosure contained in Item 2.02 of this Report is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

Exhibit Number Description of Exhibit
104 Cover Page Interactive Data File (formatted as inline XBRL document)


SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
  FB FINANCIAL CORPORATION
     
     
  By: /s/ Michael M. Mettee
    Michael M. Mettee
    Interim Chief Financial Officer
     
Date: October 26, 2020
   



FBSUPPA0111.JPG
FB Financial Corporation Reports Third Quarter 2020 Results
Reported quarterly net loss of $(5.6) million, or diluted EPS of $(0.14)
Adjusted PTPP earnings* were $72.3 million for the third quarter, Adjusted Diluted EPS* of $1.46

NASHVILLE, TENNESSEE— October 26, 2020--FB Financial Corporation (the "Company") (NYSE: FBK), parent company of FirstBank, reported a net loss of $(5.6) million, or $(0.14) per diluted common share, for the third quarter of 2020, compared to net income of $24.0 million, or $0.76 per diluted common share, for the third quarter of 2019. The application of CECL accounting to the loan portfolio acquired with the Franklin Financial Network, Inc. merger ("Franklin" and the "Franklin Merger") contributed to provisions for credit losses and unfunded commitments totaling $55.4 million in the third quarter compared to $25.9 million in the second quarter of 2020 and $1.8 million in the third quarter of 2019. The Company reported adjusted pre-tax, pre-provision ("PTPP") earnings of $72.3 million this quarter, reflecting increases of 25.0% and 113.1% from $57.8 million and $33.9 million in the second quarter of 2020 and third quarter of 2019, respectively. Additionally, the Company reported ROAA of (0.24)% and ROAE of (2.13)%.
President and Chief Executive Officer, Christopher T. Holmes stated, "The third quarter was really solid for the Company as we achieved several critical milestones. During the quarter we closed and converted our Franklin merger to create what we believe is the leading community bank in our markets. The team also executed on a $100 million subordinated debt offering and converted our online and mobile banking platform, all while producing excellent core earnings during the quarter. Our adjusted pre-tax, pre-provision ROAA of 3.13% and ROATCE of 35.1% are outstanding return metrics. We also believe we have been prudent with our balance sheet with strong capital ratios and a healthy allowance for credit losses ("ACL"), positioning us well for the future. Between the team's ability to execute in a less than ideal environment and the passion that they have shown for our customers and teammates, I have never been more proud to be part of the FirstBank team. We have built on relationships and developed trust with our customers and communities that will be a growth catalyst for years to come."
Holmes commented further, "Our core results were strong in a quarter that had multiple unusual items. We had a second consecutive quarter of record mortgage contribution, we added $2.44 billion in loans and $3.11 billion in deposits from the Franklin merger, we recorded an initial provision for credit losses of $63.3 million on the Franklin loans and we had merger-related expenses of $20.7 million. All tallied, we recorded adjusted earnings of $59.5 million and grew tangible book value per share to $20.87 versus $19.07 from the previous quarter."
Performance Summary
2020 2019 Annualized
(dollars in thousands, expect per share data) Third Quarter Second Quarter Third Quarter 3Q20 / 2Q20
% Change 		3Q20 / 3Q19
% Change
Balance Sheet Highlights
     Investment securities $ 1,164,910  $ 751,767  $ 671,781  218.6  % 73.4  %
     Mortgage loans held for sale, at fair value 610,695  435,479  305,493  160.1  % 99.9  %
     Commercial loans held for sale, at fair value 241,256  —  —  100.0  % 100.0  %
     Loans - held for investment (HFI) 7,213,538  4,827,023  4,345,344  196.7  % 66.0  %
     Allowance for credit losses 183,973  113,129  31,464  249.1  % 484.7  %
     Total assets 11,010,438  7,255,536  6,088,895  205.9  % 80.8  %
     Customer deposits 9,001,673  5,937,373  4,896,327  205.3  % 83.8  %
     Brokered and internet time deposits 92,074  15,428  25,436  1,976.4  % 262.0  %
     Total deposits 9,093,747  5,952,801  4,921,763  209.9  % 84.8  %
     Borrowings 438,838  328,662  307,129  133.4  % 42.9  %
     Total shareholders' equity 1,245,091  805,216  744,835  217.3  % 67.2  %
Tangible book value per share* $ 20.87  $ 19.07  $ 18.03 
Tangible common equity to tangible assets* 9.16  % 8.67  % 9.45  %
* Certain measures are considered non-GAAP financial measures. See “Use of non-GAAP Financial Measures” and the corresponding non-GAAP reconciliation tables in the Supplemental Financial Information, which accompanies this Earnings Release, as well as “Use of non-GAAP Financial Measures” and the Appendix in the Earnings Release Presentation dated October 27, 2020, for a reconciliation and discussion of this non-GAAP measure.
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FB Financial Corporation
Third Quarter 2020 Results
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2020 2019
(dollars in thousands, except share data) Third Quarter Second Quarter Third Quarter
Results of operations
Net interest income $ 68,828  $ 55,337  $ 58,305 
      NIM 3.28  % 3.50  % 4.28  %
Provisions for credit losses $ 55,401  $ 25,921  $ 1,831 
     Net (recovery) charge-off ratio (0.01) % 0.00  % 0.05  %
Noninterest income $ 97,026  $ 81,491  $ 38,145 
     Mortgage banking income $ 84,686  $ 72,168  $ 29,193 
Total revenue $ 165,854  $ 136,828  $ 96,450 
Noninterest expenses $ 118,092  $ 80,579  $ 62,935 
     Merger and mortgage restructuring expenses $ 20,730  $ 1,586  $ 407 
     Efficiency ratio 71.2  % 58.9  % 65.3  %
     Core efficiency ratio* 58.2  % 57.5  % 64.5  %
Adjusted pre-tax, pre-provision earnings* $ 72,302  $ 57,835  $ 33,922 
    Total adjusted mortgage banking pre-tax contribution*
$ 39,496  $ 33,616  $ 5,375 
Net (loss) income $ (5,599) $ 22,873  $ 23,966 
Diluted (loss) earnings per share(1)
$ (0.14) $ 0.70  $ 0.76 
     Effective tax rate 26.7  % 24.6  % 24.4  %
Weighted average number of shares outstanding - fully diluted(1)
40,637,745  32,506,417  31,425,573 
Actual shares outstanding - period end 47,191,677  32,101,108  30,927,664 
Returns on average:
As reported
     Assets ("ROAA") (0.24) % 1.30  % 1.59  %
     Equity ("ROAE") (2.13) % 11.6  % 13.0  %
     Tangible common equity ("ROATCE")*
(2.72) % 15.3  % 17.5  %
Adjusted pre-tax, pre-provision
      Assets* 3.13  % 3.29  % 2.25  %
      Equity* 27.5  % 29.2  % 18.4  %
      Tangible common equity* 35.1  % 38.6  % 24.8  %
* Certain measures are considered non-GAAP financial measures. See "Use of non-GAAP Financial Measures" and the corresponding non-GAAP reconciliation tables in the Supplemental Financial Information, which accompanies this Earnings Release, as well as "Use of non-GAAP Financial Measures" and the Appendix in the Earnings Release Presentation dated October 27, 2020, for a reconciliation and discussion of this non-GAAP measure.
(1) Diluted earnings per share is calculated using the basic weighted average number of common shares outstanding for periods in which a loss is incurred.
Measured Growth and Enhanced Liquidity
The Company grew loans (HFI) to $7.21 billion, an increase of 66.0% year over year. Excluding Paycheck Protection Program ("PPP") loans, adjusted loans (HFI) were $6.90 billion, an increase of $2.39 billion from the second quarter of 2020. Excluding PPP loans and acquired loans, organic loans declined by $46.2 million from the second quarter to the third quarter, or 4.07% annualized. Contractual yield on loans decreased from 4.57% in the second quarter to 4.36% in the third quarter. The overall lower loan yields reflect the impact of rate cuts by the Federal Reserve in the first half of 2020, and a lower interest rate environment.
During the third quarter of 2020, the Company grew customer deposits by $3.06 billion to $9.00 billion, reflecting annualized linked quarter growth of 205.3% and year over year growth of 87.0%. Excluding acquired deposits, the Company grew customer deposits by $64.7 million to $6.00 billion, reflecting annualized quarterly growth of 4.34%. Included in this growth is an increase of $28.6 million in mortgage servicing related deposits. The Company's total cost of deposits declined by 9 basis points to 0.56% and the cost of interest-bearing deposits decreased on a linked quarter basis to 0.76% from 0.92%. Loans (HFI) to deposits decreased to 79.3% during the third quarter of 2020 from 81.1% the previous quarter.
Additionally, during the quarter, on balance sheet liquidity increased to $1.59 billion, or 14.7% of tangible assets, from $988.5 million, or 14.0% of tangible assets in the second quarter of 2020. During the third quarter of 2020, investment securities increased by $413.1 million compared with the previous quarter to $1.16 billion, or 10.6% of total assets while cash and cash equivalents increased $344.8 million to $1.06 billion, compared with the second quarter of 2020, both a result of the Franklin acquisition.
The Company's net interest income for the quarter was $68.8 million, an increase from $55.3 million last quarter and $58.3 million for the third quarter of 2019. The Company's net interest margin (“NIM”) was 3.28% for the third quarter, compared to 3.50% and 4.28% for the second quarter of 2020 and the third quarter of 2019, respectively. Accretion related to purchased loans contributed 2 basis points to the NIM in the third quarter of 2020 compared to 6 and 15 basis points for the second quarter of 2020 and the third quarter of 2019, respectively. Overall, the NIM for the third quarter of 2020 was impacted by a 28 basis point decline in the yield on interest-earning assets partially offset by a 11 basis point decline in the rate on interest-bearing
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FB Financial Corporation
Third Quarter 2020 Results
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liabilities on a linked quarter basis. In addition to the lower interest rate environment, yield on average earning assets was impacted by the balance sheet mix, as average interest bearing deposits with other financial institutions increased to 9.05% of average earning assets in the third quarter of 2020 as compared to 7.91% for the previous quarter, while PPP loans with a contractual yield of 1.02% represented 3.69% of average earning assets in the third quarter of 2020.
Holmes commented, "Our team remained focused on serving and retaining our high quality banking relationships and maintaining our strong liquidity position. Net interest margin was impacted by the low rate environment and our strategy to maintain excess liquidity. As we move into the fourth quarter, we plan to utilize liquidity to pay down non-core deposits, deploy excess funds into loans, continue receiving payoffs of PPP loans, and allow higher cost time deposits to reprice, which should benefit the NIM."
Noninterest Income Continues to Benefit from Mortgage Production
Noninterest income was $97.0 million for the third quarter of 2020, compared to $81.5 million for the second quarter of 2020 and $38.1 million for the third quarter of 2019. Mortgage banking income was $84.7 million for the third quarter of 2020, compared to $72.2 million for the second quarter of 2020 and $29.2 million for the third quarter of 2019.
During the quarter, the Company produced strong results from the mortgage business driven by the lower interest rate environment and higher profit margins across the industry. Interest rate lock commitment volume totaled $2.42 billion in the third quarter of 2020 compared to $2.24 billion in the second quarter of 2020 and $1.64 billion in the third quarter of 2019.
During the third quarter of 2020, the Company's total adjusted mortgage banking pre-tax direct contribution was $39.5 million, compared to $33.6 million in the second quarter of 2020 and $5.4 million in the third quarter of 2019, excluding $112 thousand of mortgage restructuring expenses.
Holmes commented, "I am very proud of our mortgage team for their performance in 2020, especially their efforts in the third quarter, as they delivered a record $39.5 million in direct contribution. The team has capitalized on the current interest rate environment through strong refinance volumes as well as new purchase originations. The operation has benefited from atypical margins, capacity constraints across the industry and a robust origination environment, partially offset by depressed servicing values and elevated prepayments of our serviced mortgages."
Noninterest Expenses and Efficiency Gains
Noninterest expenses were $118.1 million for the third quarter of 2020, including $20.7 million of merger-related expenses, compared to $80.6 million for the second quarter of 2020 and $62.9 million for the third quarter of 2019. On an adjusted basis, noninterest expense was $97.4 million for the third quarter of 2020, $79.0 million for the second quarter of 2020, and $62.5 million for the third quarter of 2019. The sequential quarter increase is primarily related to the Franklin merger and increased mortgage expenses, as core bank expenses remained relatively flat on a linked quarter basis due to the Company's expense control measures.

Holmes noted, "Controlled core bank noninterest expenses reflect our commitment to keeping costs contained. Expenses were elevated for the Company quarter over quarter due to merger expenses and our mortgage division, however the mortgage division continues to be very efficient and the merger expenses are one time versus operating expenses. The headwinds of a low interest rate environment will necessitate a focused approach as we continue to balance profitability, investment decisions, and capital deployment."
Asset Quality Remains Stable
During the third quarter of 2020, the Company recognized total provision for credit losses of $55.4 million, including a provision for unfunded commitments of $9.6 million. The provision for credit losses reflects the impact of applying CECL accounting standards to the acquired Franklin loan portfolio contributing a $53.2 million provision (excluding unfunded commitments) in the quarter, versus a reduction of $7.3 million for the legacy FirstBank loan portfolio for a total provision (excluding unfunded commitments) of $45.8 million. CECL application also resulted in a provision for unfunded commitments of $10.0 million for the Franklin portfolio, versus a reduction of $0.4 million for the legacy FirstBank loan portfolio. The Company continues to maintain a strong balance sheet during uncertain economic times resulting in an ACL of $184.0 million, or 2.55% of loans HFI and 2.66% when adjusted to exclude PPP loans.
The Company's net recoveries to average loans were 0.01% for the third quarter of 2020 compared to 0.00% in the second quarter of 2020 and net charge-offs of 0.05% in the third quarter of 2019. The Company's nonperforming assets decreased to 0.64% of total assets as of September 30, 2020, compared to 0.71% at June 30, 2020. Nonperforming loans were 0.61% of loans held for investment at September 30, 2020, compared to 0.72% at June 30, 2020. Deferrals resulting from the COVID-19 pandemic decreased to $464.8 million, or 6.4% of loans HFI as of September 30, 2020, compared to the aggregate balance deferred throughout the crisis of $1.64 billion.
Holmes commented, "Our credit metrics continued to reflect strong credit quality during the third quarter. We have seen an improvement in some pockets of the economy across our bank footprint as markets re-open. However, it is still early and we don't want to underestimate any impact to our loan portfolio."

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FB Financial Corporation
Third Quarter 2020 Results
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Capital Well Positioned
"Our adjusted pre-tax, pre-provision earnings increased by 25.0% sequentially and offset provision expense related to the addition of the Franklin loan portfolio. Our already strong regulatory capital levels improved during the quarter. Our current level of tangible common equity to tangible assets of 9.16% positions us well for future growth opportunities and gives us capital options, including continuing our dividend strategy in the near term," commented Holmes.
Summary
Holmes further commented, "Our success in the third quarter has laid the foundation for us to capitalize on the efficiencies gained from our merger with Franklin and build upon our solid financial results. We will continue to navigate through the challenges and opportunities that come to us with a steady hand, keeping our customers and associates in focus while continuing to build a bright future for FB Financial."
WEBCAST AND CONFERENCE CALL INFORMATION
FB Financial Corporation will host a conference call to discuss the Company's financial results at 8:00 a.m. CT on October 27, 2020, and the conference call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1631/38110. An 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 87 full-service bank branches across Tennessee, Kentucky, North Alabama and North Georgia, and mortgage offices across the Southeast. FirstBank serves five of the largest metropolitan markets in Tennessee and has approximately $11.0 billion in total assets.
MEDIA CONTACT:
FINANCIAL CONTACT:
Jeanie M. Rittenberry Robert Hoehn
615-313-8328 615-564-1212
jrittenberry@firstbankonline.com rhoehn@firstbankonline.com
www.firstbankonline.com
investorrelations@firstbankonline.com
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 October 26, 2020.
BUSINESS SEGMENT RESULTS
The Company has included its business segment financial tables as part of this Earnings Release. A detailed discussion of our business segments is included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2019, and investors are encouraged to review that discussion in conjunction with this Earnings Release.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, without limitation, statements regarding the projected impact of the COVID-19 global pandemic on our business operations, statements relating to the timing, benefits, costs, and synergies of the mergers with Franklin Financial Network, Inc. (“Franklin”) (the “Franklin merger”) and FNB Financial Corp. (“FNB”) (together with the Franklin merger, the “mergers”), and FB Financial’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,” “projection,” and other variations of such words and phrases and similar expressions. These forward-looking statements are not historical facts, and are based upon current expectations, estimates, and projections, many of which, by their nature, are inherently uncertain and beyond FB Financial’s control. The inclusion of these forward-looking statements should not be regarded as a representation by FB Financial or any other person that such expectations, estimates, and projections will be achieved. Accordingly, FB Financial 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 declines in housing and commercial real estate prices, high unemployment rates, and a continued slowdown in economic growth in the local or regional economies in
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Third Quarter 2020 Results
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which we operate and/or the US economy generally, (2) the effects of the COVID-19 pandemic, including the magnitude and duration of the pandemic and its impact on general economic and financial market conditions and on our business and our customers' business, results of operations, asset quality and financial condition, (3) changes in government interest rate policies and its impact on our business, net interest margin, and mortgage operations, (4) our ability to effectively manage problem credits, (5) the risk that the cost savings and any revenue synergies from the mergers or another acquisition may not be realized or may take longer than anticipated to be realized, (6) disruption from the mergers with customer, supplier, or employee relationships, (7) the risks related to the integrations of the combined businesses following the Franklin merger, (8) the diversion of management time on issues related to the mergers, (9) the ability of FB Financial to effectively manage the larger and more complex operations of the combined company following the Franklin merger, (10) the risks associated with FB Financial’s pursuit of future acquisitions, (11) reputational risk and the reaction of the parties’ respective customers to the mergers, (12) FB Financial’s ability to successfully execute its various business strategies, (13) uncertainty regarding changes to the U.S. presidential administration and/or Congress and any resulting impact on economic policy, capital markets, federal regulation, and the response to the COVD-19 pandemic; and (14) general competitive, economic, political, and market conditions. Further information regarding FB Financial and factors which could affect the forward-looking statements contained herein can be found in FB Financial's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and its other filings with the Securities and Exchange Commission (the “SEC”). Many of these factors are beyond FB Financial’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 release, and FB Financial 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 FB Financial to predict their occurrence or how they will affect the company.

FB Financial 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 include, without limitation, adjusted net income, adjusted diluted earnings per share, adjusted and unadjusted pre-tax pre-provision earnings, adjusted pre-tax pre-provision diluted earnings per share, adjusted and unadjusted pre-tax pre-provision earnings per share, 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 return on average tangible common equity, adjusted pre-tax pre-provision return on average tangible common equity, adjusted return on average assets and equity, adjusted pre-tax pre-provision return on average assets and equity, core total revenue, adjusted allowance for credit losses, adjusted loans held for investment, and adjusted allowance for credit losses as a percentage of loans held for investment, which excludes the impact of PPP loans. 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 refers to these non-GAAP measures as adjusted measures. The corresponding Supplemental Financial Information and Earnings Release Presentation also presents tangible assets, tangible common equity, tangible book value per common share, tangible common equity to tangible assets, return on tangible common equity, return on average tangible common equity and adjusted 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 “Use of non-GAAP Financial Measures” and the corresponding non-GAAP reconciliation tables in the Supplemental Financial Information as well as “Use of non-GAAP Financial Measures” and the Appendix in the Earnings Release Presentation dated October 27, 2020, for a discussion and reconciliation of these measures to the most directly comparable GAAP financial measures.
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Third Quarter 2020 Results
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Financial Summary and Key Metrics
(Unaudited)
(In Thousands, Except Share Data and %)
2020 2019
  Third Quarter Second Quarter Third Quarter
Statement of Income Data
Total interest income $ 81,127  $ 65,607  $ 73,242 
Total interest expense 12,299  10,270  14,937 
Net interest income 68,828  55,337  58,305 
Total noninterest income 97,026  81,491  38,145 
Total noninterest expense 118,092  80,579  62,935 
Earnings before income taxes and provisions for credit losses 47,762  56,249  33,515 
Provisions for credit losses 55,401  25,921  1,831 
Income tax (benefit) expense (2,040) 7,455  7,718 
Net (loss) income $ (5,599) $ 22,873  $ 23,966 
Net interest income (tax-equivalent basis) $ 69,625  $ 55,977  $ 58,769 
Adjusted net income* $ 59,470  $ 24,086  $ 24,267 
Adjusted pre-tax, pre-provision earnings* $ 72,302  $ 57,835  $ 33,922 
Per Common Share
Diluted net (loss) income(a)
$ (0.14) $ 0.70  $ 0.76 
Adjusted diluted net income* 1.46  0.74  0.77 
Book value 26.38  25.08  24.08 
Tangible book value* 20.87  19.07  18.03 
Weighted average number of shares outstanding - fully diluted(a)
40,637,745  32,506,417  31,425,573 
Period-end number of shares 47,191,677  32,101,108  30,927,664 
Selected Balance Sheet Data
Cash and cash equivalents $ 1,062,391  $ 717,592  $ 242,997 
Loans held for investment (HFI) 7,213,538  4,827,023  4,345,344 
Allowance for credit losses(b)
(183,973) (113,129) (31,464)
Mortgage loans held for sale, at fair value 610,695  435,479  305,493 
Commercial loans held for sale, at fair value 241,256  —  — 
Investment securities, at fair value 1,164,910  751,767  671,781 
Other real estate owned, net 12,748  15,091  16,076 
Total assets 11,010,438  7,255,536  6,088,895 
Customer deposits 9,001,673  5,937,373  4,896,327 
Brokered and internet time deposits 92,074  15,428  25,436 
Total deposits 9,093,747  5,952,801  4,921,763 
Borrowings 438,838  328,662  307,129 
Total shareholders' equity 1,245,091  805,216  744,835 
Selected Ratios
Return on average:
Assets (0.24) % 1.30  % 1.59  %
Shareholders' equity (2.13) % 11.56  % 13.0  %
Tangible common equity* (2.72) % 15.27  % 17.5  %
Average shareholders' equity to average assets 11.4  % 11.2  % 12.2  %
Net interest margin (NIM) (tax-equivalent basis) 3.28  % 3.50  % 4.28  %
Efficiency ratio (GAAP) 71.2  % 58.9  % 65.3  %
Core efficiency ratio (tax-equivalent basis)* 58.2  % 57.5  % 64.5  %
Loans HFI to deposit ratio 79.3  % 81.1  % 88.3  %
Total loans to deposit ratio 88.7  % 88.4  % 94.5  %
Yield on interest-earning assets 3.86  % 4.14  % 5.37  %
Cost of interest-bearing liabilities 0.83  % 0.94  % 1.50  %
Cost of total deposits 0.56  % 0.65  % 1.11  %
Credit Quality Ratios
Allowance for credit losses as a percentage of loans HFI(b)
2.55  % 2.34  % 0.72  %
Adjusted allowance for credit losses as a percentage of loans HFI*(b)
2.66  % 2.51  % 0.72  %
Net (recoveries) charge-offs as a percentage of average loans HFI (0.01) % 0.00  % 0.05  %
Nonperforming loans HFI as a percentage of total loans HFI 0.61  % 0.72  % 0.47  %
Nonperforming assets as a percentage of total assets 0.64  % 0.71  % 0.62  %
Preliminary capital ratios (Consolidated)
Total common shareholders' equity to assets 11.3  % 11.1  % 12.2  %
Tangible common equity to tangible assets* 9.16  % 8.67  % 9.45  %
Tier 1 capital (to average assets) 11.8  % 9.7  % 10.1  %
Tier 1 capital (to risk-weighted assets) 12.8  % 11.9  % 11.3  %
Total capital (to risk-weighted assets) 15.9  % 13.2  % 12.0  %
Common equity Tier 1 (to risk-weighted assets) (CET1) 12.4  % 11.4  % 10.8  %
(a) Diluted earnings per share is calculated using the basic weighted average number of common shares outstanding for periods in which a loss is incurred.
(b) Excludes reserve for credit losses on unfunded commitments of $16.1 million and $6.5 million recorded in accrued expenses and other liabilities for the three months ended September 30, 2020 and June 30, 2020, respectively.
*These measures are considered non-GAAP financial measures. See "GAAP Reconciliation and Use of non-GAAP Financial Measures" and the corresponding financial tables below for reconciliations of these non-GAAP measures. Investors are encouraged to refer to the discussion of non-GAAP measures included in the corresponding earnings release.
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FB Financial Corporation
Third Quarter 2020 Results
Page 7
Non-GAAP Reconciliation
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
2020 2019
Adjusted earnings Third Quarter Second Quarter Third Quarter
Pre-tax net (loss) income $ (7,639) $ 30,328  $ 31,684 
Plus merger and mortgage restructuring expenses 20,730  1,586  407 
Plus initial provision for credit losses on acquired loans and unfunded commitments 63,251  —  — 
Less significant losses on securities, other real estate owned and other items(1)
(3,810) —  — 
Adjusted pre-tax earnings $ 80,152  $ 31,914  $ 32,091 
Income tax expense, adjusted 20,682  7,828  7,824 
Adjusted earnings $ 59,470  $ 24,086  $ 24,267 
Weighted average common shares outstanding - fully diluted 40,637,745  32,506,417  31,425,573 
Adjusted diluted earnings per share
Diluted (loss) earnings per common share $ (0.14) $ 0.70  $ 0.76 
Plus merger and mortgage restructuring expenses 0.51  0.05  0.01 
Plus initial provision for credit losses on acquired loans and unfunded commitments 1.56  —  — 
Less significant losses on securities, other real estate owned and other items (0.09) —  — 
Less tax effect 0.56  0.01  — 
Adjusted diluted earnings per share $ 1.46  $ 0.74  $ 0.77 
(1)Includes charges of $2,305 related to a one time FHLB prepayment penalty and $1,505 related to losses on other real estate owned
2020 2019
Adjusted pre-tax pre-provision earnings Third Quarter Second Quarter Third Quarter
Pre-tax net (loss) income $ (7,639) $ 30,328  $ 31,684 
Plus provisions for credit losses 55,401  25,921  1,831 
Pre-tax pre-provision earnings 47,762  56,249  33,515 
Plus merger and mortgage restructuring expenses 20,730  1,586  407 
Less significant losses on securities, other real estate owned and other items(1)
(3,810) —  — 
Adjusted pre-tax pre-provision earnings $ 72,302  $ 57,835  $ 33,922 
Weighted average common shares outstanding - fully diluted 40,637,745  32,506,417  31,425,573 
Adjusted pre-tax pre-provision diluted earnings per share
Diluted (loss) earnings per common share $ (0.14) $ 0.70  $ 0.76 
Plus income tax expense (0.05) 0.23  0.25 
Plus provisions for credit losses 1.36  0.80  0.06 
Pre-tax pre-provision earnings per share 1.17  1.73  1.07 
Plus merger and mortgage restructuring expenses 0.51  0.05  0.01 
Less significant losses on securities, other real estate owned and other items (0.09) —  — 
Adjusted pre-tax pre-provision earnings per share $ 1.77  $ 1.78  $ 1.08 
(1)Includes charges of $2,305 related to a one time FHLB prepayment penalty and $1,505 related to losses on other real estate owned
2020 2019
Core efficiency ratio (tax-equivalent basis) Third Quarter Second Quarter Third Quarter
Total noninterest expense $ 118,092  $ 80,579  $ 62,935 
Less merger and mortgage restructuring expenses 20,730  1,586  407 
Core noninterest expense $ 97,362  $ 78,993  $ 62,528 
Net interest income (tax-equivalent basis) $ 69,625  $ 55,977  $ 58,769 
Total noninterest income 97,026  81,491  38,145 
Less (loss) gain on sales or write-downs of other real estate owned and other assets (1,279) 32  (82)
Less gain (loss) from securities, net 583  (28) (20)
Core noninterest income 97,722  81,487  38,247 
Core revenue $ 167,347  $ 137,464  $ 97,016 
Efficiency ratio (GAAP)(a)
71.2  % 58.9  % 65.3  %
Core efficiency ratio (tax-equivalent basis) 58.2  % 57.5  % 64.5  %
(a) Efficiency ratio (GAAP) is calculated by dividing reported noninterest expense by reported total revenue.
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FB Financial Corporation
Third Quarter 2020 Results
Page 8
Non-GAAP Reconciliation (continued)
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
2020 2019
Banking segment core efficiency ratio (tax equivalent) Third Quarter Second Quarter Third Quarter
Core consolidated noninterest expense $ 97,362  $ 78,993  $ 62,528 
Less Mortgage segment core noninterest expense 30,052  26,997  15,686 
Core Banking segment noninterest expense $ 67,310  $ 51,996  46,842 
Core revenue $ 167,347  $ 137,464  97,016 
Less Mortgage segment total revenue 60,040  55,215  18,455 
Core Banking segment total revenue $ 107,307  $ 82,249  $ 78,561 
Banking segment core efficiency ratio (tax-equivalent basis) 62.7  % 63.2  % 59.6  %
Mortgage segment core efficiency ratio (tax equivalent)
Mortgage segment noninterest expense $ 30,382  $ 26,997  $ 15,798 
Less mortgage merger expense 330  —  — 
Less mortgage restructuring expense —  —  112 
Core Mortgage segment noninterest expense $ 30,052  $ 26,997  $ 15,686 
Mortgage segment total revenue $ 60,040  $ 55,215  $ 18,455 
Mortgage segment core efficiency ratio (tax-equivalent basis) 50.1  % 48.9  % 85.0  %
2020 2019
Adjusted mortgage contribution Third Quarter Second Quarter Third Quarter
Mortgage segment pre-tax net contribution $ 29,658  $ 28,218  $ 2,657 
Retail footprint:
   Mortgage banking income 24,683  16,940  10,693 
   Mortgage banking expenses 15,175  11,542  8,087 
       Retail footprint pre-tax net contribution 9,508  5,398  2,606 
Total adjusted mortgage banking pre-tax net contribution $ 39,166  $ 33,616  $ 5,263 
Plus mortgage merger expense 330  —  — 
Plus mortgage restructuring expense —  —  112 
Total adjusted mortgage banking pre-tax net contribution $ 39,496  $ 33,616  $ 5,375 
Pre-tax pre-provision earnings $ 47,762  $ 56,249  $ 33,515 
% total mortgage banking pre-tax pre-provision net contribution 82.0  % 59.8  % 15.7  %
Adjusted pre-tax pre-provision earnings $ 72,302  $ 57,835  $ 33,922 
% total adjusted mortgage banking pre-tax pre-provision net contribution 54.6  % 58.1  % 15.8  %
2020 2019
Tangible assets and equity Third Quarter Second Quarter Third Quarter
Tangible assets
Total assets $ 11,010,438  $ 7,255,536  $ 6,088,895 
Less goodwill 236,086  175,441  168,486 
Less intangibles, net 23,924  17,671  18,748 
Tangible assets $ 10,750,428  $ 7,062,424  $ 5,901,661 
Tangible common equity
Total common shareholders' equity $ 1,244,998  $ 805,216  $ 744,835 
Less goodwill 236,086  175,441  168,486 
Less intangibles, net 23,924  17,671  18,748 
Tangible common equity $ 984,988  $ 612,104  $ 557,601 
Common shares outstanding 47,191,677  32,101,108  30,927,664 
Book value per common share $ 26.38  $ 25.08  $ 24.08 
Tangible book value per common share
$ 20.87  $ 19.07  $ 18.03 
Total common shareholders' equity to total assets 11.3  % 11.1  % 12.2  %
Tangible common equity to tangible assets 9.16  % 8.67  % 9.45  %
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FB Financial Corporation
Third Quarter 2020 Results
Page 9
Non-GAAP Reconciliation (continued)
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
2020 2019
Return on average tangible common equity Third Quarter Second Quarter Third Quarter
Total average shareholders' equity $ 1,045,006  $ 795,705  $ 731,701 
Less average goodwill 205,473  175,150  168,486 
Less average intangibles, net 20,973  18,209  19,523 
Average tangible common equity $ 818,561  $ 602,346  $ 543,692 
Net (loss) income $ (5,599) $ 22,873  $ 23,966 
Return on average tangible common equity (2.7) % 15.3  % 17.5  %
2020 2019
Adjusted return on average tangible common equity Third Quarter Second Quarter Third Quarter
Average tangible common equity $ 818,561  $ 602,346  $ 543,692 
Adjusted net income 59,470  24,086  24,267 
Adjusted return on average tangible common equity 28.9  % 16.1  % 17.7  %
2020 2019
Adjusted pre-tax pre-provision return on average tangible common equity Third Quarter Second Quarter Third Quarter
Average tangible common equity $ 818,561  $ 602,346  $ 543,692 
Adjusted pre-tax pre-provision earnings 72,302  57,835  33,922 
Adjusted pre-tax pre-provision return on average tangible common equity 35.1  % 38.6  % 24.8  %
2020 2019
Adjusted return on average assets and equity Third Quarter Second Quarter Third Quarter
Net (loss) income $ (5,599) $ 22,873  $ 23,966 
Average assets 9,179,288  7,074,612  5,988,572 
Average equity 1,045,006  795,705  731,701 
Return on average assets (0.24) % 1.30  % 1.59  %
Return on average equity (2.1) % 11.6  % 13.0  %
Adjusted net income $ 59,470  $ 24,086  $ 24,267 
Adjusted return on average assets 2.58  % 1.37  % 1.61  %
Adjusted return on average equity 22.6  % 12.2  % 13.2  %
2020 2019
Adjusted pre-tax pre-provision return on average assets and equity Third Quarter Second Quarter Third Quarter
Net (loss) income $ (5,599) $ 22,873  $ 23,966 
Average assets 9,179,288  7,074,612  5,988,572 
Average equity 1,045,006  797,705  731,701 
Return on average assets (0.24) % 1.30  % 1.59  %
Return on average equity (2.1) % 11.6  % 13.0  %
Adjusted pre-tax pre-provision earnings $ 72,302  $ 57,835  $ 33,922 
Adjusted pre-tax pre-provision return on average assets 3.13  % 3.29  % 2.25  %
Adjusted pre-tax pre-provision return on average equity 27.5  % 29.2  % 18.4  %
2020 2019
Adjusted allowance for credit losses to loans held for investment Third Quarter Second Quarter Third Quarter
Allowance for credit losses $ 183,973  $ 113,129  $ 31,464 
Less allowance for credit losses attributed to PPP loans 49  51  — 
Adjusted allowance for credit losses $ 183,924  $ 113,078  $ 31,464 
Loans held for investment $ 7,213,538  $ 4,827,023  $ 4,345,344 
Less PPP loans 310,719  314,678  — 
Adjusted loans held for investment $ 6,902,819  $ 4,512,345  $ 4,345,344 
Allowance for credit losses to loans held for investment 2.55  % 2.34  % 0.72  %
Adjusted allowance for credit losses to loans held for investment 2.66  % 2.51  % 0.72  %
-END-




















LOGOA0711.JPG

 
 
Third Quarter 2020
Financial Supplement



TABLE OF CONTENTS
 
  Page
   
Financial Summary and Key Metrics
4
   
Consolidated Statements of Income
5
   
Consolidated Balance Sheets
7
Average Balance, Average Yield Earned and Average Rate Paid
8
Franklin Financial Network Opening Balance Sheet (Preliminary)
11
   
Loans and Deposits by Market
12
   
Segment Data
13
   
Loan Portfolio and Asset Quality
14
   
Preliminary Capital Ratios
16
   
Investment Portfolio
17
   
Non-GAAP Reconciliation
18



Use of non-GAAP Financial Measures
 
This Supplemental Financial Information 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 include, without limitation, adjusted net income, adjusted diluted earnings per share, adjusted pre-tax pre-provision net income, adjusted pre-tax pre-provision diluted earnings per share, 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 pre-tax pre-provision mortgage contribution, adjusted return on average assets and equity, adjusted pre-tax pre-provision return on average assets and equity, pro forma return on average assets and equity, adjusted pro forma return on average assets and equity, core total revenue, adjusted allowance for credit losses, adjusted loans held for investment, and adjusted allowance for credit losses as a percentage of loans held for investment, which excludes the impact of Paycheck Protection Program ("PPP") loans. 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 refers to these non-GAAP measures as adjusted measures. The corresponding Earnings Release and Earnings Release Presentation also present tangible assets, tangible common equity, tangible book value per common share, tangible common equity to tangible assets, return on tangible common equity, return on average tangible common equity, pro forma return on average tangible common equity, adjusted return on average tangible common equity, pro forma 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 demonstrating 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. You 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.  The Company includes tables under the Non-GAAP Reconciliation section of this document to provide a reconciliation of these measures to the most directly comparable GAAP financial measures.



Financial Summary and Key Metrics
(Unaudited)
(In Thousands, Except Share Data and %)
  2020 2019
  Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Statement of Income Data
Total interest income $ 81,127  $ 65,607  $ 69,674  $ 71,643  $ 73,242 
Total interest expense 12,299  10,270  13,425  13,951  14,937 
Net interest income 68,828  55,337  56,249  57,692  58,305 
Total noninterest income 97,026  81,491  42,700  35,234  38,145 
Total noninterest expense 118,092  80,579  68,559  62,686  62,935 
Earnings before income taxes and provisions for credit losses 47,762  56,249  30,390  30,240  33,515 
Provisions for credit losses 55,401  25,921  29,565  2,950  1,831 
Income tax (benefit) expense (2,040) 7,455  80  5,718  7,718 
Net (loss) income $ (5,599) $ 22,873  $ 745  $ 21,572  $ 23,966 
Net interest income (tax-equivalent basis) $ 69,625  $ 55,977  $ 56,784  $ 58,212  $ 58,769 
Adjusted net income* $ 59,470  $ 24,086  $ 5,296  $ 22,079  $ 24,267 
Adjusted pre-tax, pre-provision earnings* $ 72,302  $ 57,835  $ 33,440  $ 30,926  $ 33,922 
Per Common Share
Diluted net (loss) income(a)
$ (0.14) $ 0.70  $ 0.02  $ 0.68  $ 0.76 
Adjusted diluted net income* 1.46  0.74  0.17  0.70  0.77 
Book value 26.38  25.08  24.40  24.56  24.08 
Tangible book value* 20.87  19.07  18.35  18.55  18.03 
Weighted average number of shares outstanding - fully diluted(a)
40,637,745  32,506,417  31,734,112  31,470,565  31,425,573 
Period-end number of shares 47,191,677  32,101,108  32,067,356  31,034,315  30,927,664 
Selected Balance Sheet Data
Cash and cash equivalents $ 1,062,391  $ 717,592  $ 425,094  $ 232,681  $ 242,997 
Loans held for investment (HFI) 7,213,538  4,827,023  4,568,038  4,409,642  4,345,344 
Allowance for credit losses(b)
(183,973) (113,129) (89,141) (31,139) (31,464)
Mortgage loans held for sale 610,695  435,479  325,304  262,518  305,493 
Commercial loans held for sale 241,256  —  —  —  — 
Investment securities, at fair value 1,164,910  751,767  767,575  691,676  671,781 
Other real estate owned, net 12,748  15,091  17,072  18,939  16,076 
Total assets 11,010,438  7,255,536  6,655,687  6,124,921  6,088,895 
Customer deposits 9,001,673  5,937,373  5,356,569  4,914,587  4,896,327 
Brokered and internet time deposits 92,074  15,428  20,363  20,351  25,436 
Total deposits 9,093,747  5,952,801  5,376,932  4,934,938  4,921,763 
Borrowings 438,838  328,662  327,822  304,675  307,129 
Total shareholders' equity 1,245,091  805,216  782,330  762,329  744,835 
Selected Ratios
Return on average:
Assets (0.24) % 1.30  % 0.05  % 1.39  % 1.59  %
Shareholders' equity (2.13) % 11.6  % 0.39  % 11.2  % 13.0  %
Tangible common equity* (2.72) % 15.3  % 0.52  % 14.9  % 17.5  %
Average shareholders' equity to average assets 11.4  % 11.2  % 12.0  % 12.4  % 12.2  %
Net interest margin (NIM) (tax-equivalent basis) 3.28  % 3.50  % 3.92  % 4.12  % 4.28  %
Efficiency ratio (GAAP) 71.2  % 58.9  % 69.3  % 67.5  % 65.3  %
Core efficiency ratio (tax-equivalent basis)* 58.2  % 57.5  % 65.7  % 66.5  % 64.5  %
Loans HFI to deposit ratio 79.3  % 81.1  % 85.0  % 89.4  % 88.3  %
Total loans to deposit ratio 88.7  % 88.4  % 91.0  % 94.7  % 94.5  %
Yield on interest-earning assets 3.86  % 4.14  % 4.84  % 5.11  % 5.37  %
Cost of interest-bearing liabilities 0.83  % 0.94  % 1.27  % 1.38  % 1.50  %
Cost of total deposits 0.56  % 0.65  % 0.94  % 1.02  % 1.11  %
Credit Quality Ratios
Allowance for credit losses as a percentage of loans HFI(b)
2.55  % 2.34  % 1.95  % 0.71  % 0.72  %
Adjusted allowance for credit losses as a percentage of loans HFI*(b)
2.66  % 2.51  % 1.95  % 0.71  % 0.72  %
Net (recoveries) charge-offs as a percentage of average loans HFI (0.01) % 0.00  % 0.19  % 0.30  % 0.05  %
Nonperforming loans HFI as a percentage of total loans HFI 0.61  % 0.72  % 0.68  % 0.60  % 0.47  %
Nonperforming assets as a percentage of total assets 0.64  % 0.71  % 0.74  % 0.77  % 0.62  %
Preliminary capital ratios (Consolidated)
Total common shareholders' equity to assets 11.3  % 11.1  % 11.8  % 12.4  % 12.2  %
Tangible common equity to tangible assets* 9.16  % 8.67  % 9.11  % 9.69  % 9.45  %
Tier 1 capital (to average assets) 11.8  % 9.7  % 10.3  % 10.1  % 10.1  %
Tier 1 capital (to risk-weighted assets) 12.8  % 11.9  % 11.6  % 11.6  % 11.3  %
Total capital (to risk-weighted assets) 15.9  % 13.2  % 12.5  % 12.2  % 12.0  %
Common equity Tier 1 (to risk-weighted assets) (CET1) 12.4  % 11.4  % 11.0  % 11.1  % 10.8  %
(a) Diluted earnings per share is calculated using the basic weighted average number of common shares outstanding for periods in which a loss is incurred.
(b) Excludes reserve for credit losses on unfunded commitments of $16.1 million, $6.5 million, and $4.6 million recorded in accrued expenses and other liabilities at September 30, 2020, June 30, 2020, and March 31, 2020, respectively.
*These measures are considered non-GAAP financial measures. See "GAAP Reconciliation and Use of non-GAAP Financial Measures" and the corresponding financial tables below for reconciliations of these non-GAAP measures. Investors are encouraged to refer to the discussion of non-GAAP measures included in the corresponding earnings release.
FB Financial Corporation
4


Consolidated Statements of Income
(Unaudited)
(In Thousands, Except Share Data and %)
      Q3 2020 Q3 2020
      vs. vs.
  2020 2019 Q2 2020 Q3 2019
Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Percent variance Percent variance
Interest income:
Interest and fees on loans $ 76,504  $ 61,092  $ 63,754  $ 66,095  $ 67,639  25.2  % 13.1  %
Interest on securities
Taxable 2,286  2,619  3,056  2,969  3,137  (12.7) % (27.1) %
Tax-exempt 1,933  1,590  1,433  1,327  1,174  21.6  % 64.7  %
Other 404  306  1,431  1,252  1,292  32.0  % (68.7) %
Total interest income 81,127  65,607  69,674  71,643  73,242  23.7  % 10.8  %
Interest expense:
Deposits 10,573  9,309  12,168  12,703  13,522  13.6  % (21.8) %
Borrowings 1,726  961  1,257  1,248  1,415  79.6  % 22.0  %
Total interest expense 12,299  10,270  13,425  13,951  14,937  19.8  % (17.7) %
Net interest income 68,828  55,337  56,249  57,692  58,305  24.4  % 18.0  %
Provision for credit losses 45,834  24,039  27,964  2,950  1,831  90.7  % 2,403.2  %
Provision for credit losses on unfunded commitments 9,567  1,882  1,601  —  —  408.3  % 100.0  %
Net interest income after provisions for credit losses 13,427  29,416  26,684  54,742  56,474  (54.4) % (76.2) %
Noninterest income:
Mortgage banking income 84,686  72,168  32,745  26,176  29,193  17.3  % 190.1  %
Service charges on deposit accounts 2,162  1,858  2,563  2,657  2,416  16.4  % (10.5) %
ATM and interchange fees 3,913  3,606  3,134  3,315  3,188  8.51  % 22.7  %
Investment services and trust income 1,828  1,368  1,697  1,326  1,336  33.6  % 36.8  %
Gain (loss) from securities, net 583  (28) 63  (18) (20) (2,182.1) % (3,015.0) %
(Loss) gain on sales or write-downs of other real estate owned (1,505) 86  51  433  (126) (1,850.0) % 1,094.4  %
Gain (loss) from other assets 226  (54) (328) (156) 44  (518.5) % 413.6  %
Other income 5,133  2,487  2,775  1,501  2,114  106.39  % 142.8  %
Total noninterest income 97,026  81,491  42,700  35,234  38,145  19.1  % 154.4  %
Total revenue 165,854  136,828  98,949  92,926  96,450  21.2  % 72.0  %
Noninterest expenses:
Salaries, commissions and employee benefits 67,676  55,258  43,622  39,589  40,880  22.5  % 65.5  %
Occupancy and equipment expense 4,892  4,096  4,178  3,534  4,058  19.4  % 20.6  %
Legal and professional fees 1,917  1,952  1,558  2,074  1,993  (1.79) % (3.81) %
Data processing 2,994  2,782  2,453  2,746  2,816  7.62  % 6.32  %
Merger costs 20,730  1,586  3,050  686  295  1,207.1  % 6,927.1  %
Amortization of core deposits and other intangibles 1,419  1,205  1,203  1,159  1,197  17.8  % 18.5  %
Advertising 2,256  2,591  2,389  2,072  1,895  (12.9) % 19.1  %
Mortgage restructuring expense —  —  —  —  112  0.00  % (100.0) %
Other expense 16,208  11,109  10,106  10,826  9,689  45.9  % 67.3  %
Total noninterest expense 118,092  80,579  68,559  62,686  62,935  46.6  % 87.6  %
(Loss) income before income taxes (7,639) 30,328  825  27,290  31,684  (125.2) % (124.1) %
Income tax (benefit) expense (2,040) 7,455  80  5,718  7,718  (127.4) % (126.4) %
Net (loss) income (5,599) 22,873  745  21,572  23,966  (124.5) % (123.4) %
Net income applicable to noncontrolling interests —  —  —  —  —  0.00  % 0.00  %
Net (loss) income applicable to FB Financial Corporation $ (5,599) $ 22,873  $ 745  $ 21,572  $ 23,966  (124.5) % (123.4) %
(Loss) earnings available to common shareholders $ (5,599) $ 22,873  $ 745  $ 21,458  $ 23,838  (124.5) % (123.5) %
Weighted average common shares outstanding:    
Basic 40,154,841  32,094,274  31,257,739  30,934,092  30,899,583  25.1  % 30.0  %
Fully diluted 40,637,745  32,506,417  31,734,112  31,470,565  31,425,573  25.0  % 29.3  %
(Loss) earnings per common share:    
Basic $ (0.14) $ 0.71  $ 0.02  $ 0.69  $ 0.77  (119.7) % (118.2) %
Fully diluted (0.14) 0.70  0.02  0.68  0.76  (120.0) % (118.4) %
Fully diluted - adjusted* 1.46  0.74  0.17  0.70  0.77  97.4  % 89.7  %
*These measures are considered non-GAAP financial measures. See “GAAP Reconciliation and Use of non-GAAP Financial Measures” and the corresponding financial tables below for reconciliations of these non-GAAP measures. Investors are encouraged to refer to the discussion of non-GAAP measures included in the corresponding earnings release.
FB Financial Corporation
5


Consolidated Statements of Income
(Unaudited)
(In Thousands, Except Share Data and %)
      YTD 2020
  For the nine months ended vs.
  September 30, YTD 2019
  2020 2019 Percent variance
Interest income:
Interest and fees on loans $ 201,350  $ 194,363  3.59  %
Interest on securities
Taxable 7,961  10,254  (22.4) %
Tax-exempt 4,956  3,478  42.5  %
Other 2,141  2,799  (23.5) %
Total interest income 216,408  210,894  2.61  %
Interest expense:
Deposits 32,050  38,865  (17.5) %
Borrowings 3,944  3,685  7.03  %
Total interest expense 35,994  42,550  (15.4) %
Net interest income 180,414  168,344  7.17  %
Provision for credit losses 97,837  4,103  2,284.5  %
Provision for credit losses on unfunded commitments 13,050  —  100.0  %
Net interest income after provisions for credit losses 69,527  164,241  (57.7) %
Noninterest income:
Mortgage banking income 189,599  74,740  153.7  %
Service charges on deposit accounts 6,583  6,822  (3.50) %
ATM and interchange fees 10,653  8,846  20.4  %
Investment services and trust income 4,893  3,918  24.9  %
Gain from securities, net 618  75  724.0  %
(Loss) gain on sales or write-downs of other real estate owned (1,368) 112  (1,321.4) %
(Loss) gain on other assets (156) 52  (400.0) %
Other income 10,395  5,598  85.7  %
Total noninterest income 221,217  100,163  120.9  %
Total revenue 401,631  268,507  49.6  %
Noninterest expenses:
Salaries, commissions and employee benefits 166,556  112,495  48.1  %
Occupancy and equipment expense 13,166  12,107  8.75  %
Legal and professional fees 5,427  5,412  0.28  %
Data processing 8,229  7,843  4.92  %
Merger costs 25,366  4,699  439.8  %
Amortization of core deposit and other intangibles 3,827  3,180  20.3  %
Advertising 7,236  7,066  2.41  %
Mortgage restructuring expense —  1,995  (100.0) %
Other expense 37,423  27,358  36.8  %
Total noninterest expense 267,230  182,155  46.7  %
Income before income taxes 23,514  82,249  (71.4) %
Income tax expense 5,495  20,007  (72.5) %
Net income 18,019  62,242  (71.1) %
Net income applicable to noncontrolling interests —  —  0.00  %
Net income applicable to FB Financial Corporation $ 18,019  $ 62,242  (71.1) %
Earnings available to common shareholders $ 18,019  $ 61,909  (70.9) %
Weighted average common shares outstanding:  
Basic 34,404,064  30,849,035  11.5  %
Fully diluted 34,840,292  31,378,786  11.0  %
Earnings per common share:
Basic $ 0.52  $ 2.01  (74.1) %
Fully diluted 0.52  1.97  (73.6) %
FB Financial Corporation
6


Consolidated Balance Sheets
(Unaudited)
(In Thousands, Except %)
      Annualized  
      Q3 2020 Q3 2020
      vs. vs.
  2020 2019 Q2 2020 Q3 2019
Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Percent variance Percent variance
ASSETS
Cash and due from banks $ 69,798  $ 33,710  $ 26,841  $ 48,806  $ 31,594  425.9  % 120.9  %
Federal funds sold 118,588  34,638  59,199  131,119  50,532  964.2  % 134.7  %
Interest-bearing deposits in financial institutions 874,005  649,244  339,054  52,756  160,871  137.7  % 443.3  %
Cash and cash equivalents 1,062,391  717,592  425,094  232,681  242,997  191.2  % 337.2  %
Investments:
Available-for-sale debt securities, at fair value 1,160,521  747,438  764,217  688,381  668,531  219.9  % 73.6  %
Equity securities, at fair value 4,389  4,329  3,358  3,295  3,250  5.51  % 35.0  %
Federal Home Loan Bank stock, at cost 31,232  17,621  16,445  15,976  15,976  307.3  % 95.5  %
Mortgage loans held for sale, at fair value 610,695  435,479  325,304  262,518  305,493  160.1  % 99.9  %
Commercial loans held for sale, at fair value 241,256  —  —  —  —  100.0  % 100.0  %
Loans held for investment 7,213,538  4,827,023  4,568,038  4,409,642  4,345,344  196.7  % 66.0  %
Less: allowance for credit losses 183,973  113,129  89,141  31,139  31,464  249.1  % 484.7  %
Net loans 7,029,565  4,713,894  4,478,897  4,378,503  4,313,880  195.4  % 63.0  %
Premises and equipment, net 136,774  100,638  100,406  90,131  91,815  142.8  % 49.0  %
Other real estate owned, net 12,748  15,091  17,072  18,939  16,076  (61.8) % (20.7) %
Operating lease right-of-use assets 52,410  30,447  31,628  32,539  34,812  287.0  % 50.6  %
Interest receivable 47,120  26,587  19,644  17,083  17,729  307.2  % 165.8  %
Mortgage servicing rights, at fair value 71,535  60,508  62,581  75,521  66,156  72.5  % 8.13  %
Goodwill 236,086  175,441  174,859  169,051  168,486  137.5  % 40.1  %
Core deposit and other intangibles, net 23,924  17,671  18,876  17,589  18,748  140.8  % 27.6  %
Other assets 289,792  192,800  217,306  122,714  124,946  200.1  % 131.9  %
Total assets $ 11,010,438  $ 7,255,536  $ 6,655,687  $ 6,124,921  $ 6,088,895  205.9  % 80.8  %
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits
Noninterest-bearing $ 2,287,911  $ 1,775,323  $ 1,335,799  $ 1,208,175  $ 1,214,373  114.9  % 88.4  %
Interest-bearing checking 2,005,536  1,236,094  1,139,462  1,014,875  1,029,430  247.6  % 94.8  %
Money market and savings 3,236,670  1,749,889  1,667,374  1,520,035  1,481,697  338.0  % 118.4  %
Customer time deposits 1,471,556  1,176,067  1,213,934  1,171,502  1,170,827  100.0  % 25.7  %
Brokered and internet time deposits 92,074  15,428  20,363  20,351  25,436  1,976.4  % 262.0  %
Total deposits 9,093,747  5,952,801  5,376,932  4,934,938  4,921,763 209.9  % 84.8  %
Borrowings 438,838  328,662  327,822  304,675  307,129  133.4  % 42.9  %
Operating lease liabilities 56,705  33,803  34,572  35,525  37,760  269.5  % 50.2  %
Accrued expenses and other liabilities 176,057  135,054  134,031  87,454  77,408  120.8  % 127.4  %
Total liabilities 9,765,347  6,450,320  5,873,357  5,362,592  5,344,060 204.5  % 82.7  %
Shareholders' equity:
Common stock, $1 par value 47,192  32,101  32,067  31,034  30,928  187.0  % 52.6  %
Additional paid-in capital 896,158  462,930  460,938  425,633  426,816  372.3  % 110.0  %
Retained earnings 276,361  286,296  266,385  293,524  274,491  (13.81) % 0.68  %
Accumulated other comprehensive income, net 25,287  23,889  22,940  12,138  12,600  23.3  % 100.7  %
Total common shareholders' equity 1,244,998  805,216  782,330  762,329  744,835  217.3  % 67.2  %
Noncontrolling interests 93  —  —  —  —  100.0  % 100.0  %
Total shareholders' equity 1,245,091  805,216  782,330  762,329  744,835  217.3  % 67.2  %
Total liabilities and shareholders' equity $ 11,010,438  $ 7,255,536  $ 6,655,687  $ 6,124,921  $ 6,088,895  205.9  % 80.8  %


FB Financial Corporation
7


Average Balance, Average Yield Earned and Average Rate Paid
For the Quarters Ended
(Unaudited)
(In Thousands, Except %)
  Three Months Ended Three Months Ended
  September 30, 2020 June 30, 2020
  Average
balances 		Interest
income/
expense 		Average
yield/
rate 		Average
balances 		Interest
income/
expense 		Average
yield/
rate
Interest-earning assets:            
Loans HFI(a)(d)
$ 6,062,785  $ 71,660  4.70  % $ 4,775,229  $ 58,201  4.90  %
Mortgage loans held for sale(b)
486,899  3,624  2.96  % 358,108  2,947  3.31  %
Commercial loans held for sale 99,745  1,336  5.33  % —  —  —  %
Securities:(b)
Taxable 604,557  2,286  1.50  % 494,987  2,619  2.13  %
Tax-exempt(a)
309,352  2,614  3.36  % 236,161  2,174  3.70  %
Total securities(a)
913,909  4,900  2.13  % 731,148  4,793  2.64  %
Federal funds sold 88,626  19  0.09  % 50,402  10  0.08  %
Interest-bearing deposits with other financial institutions 763,251  309  0.16  % 509,283  194  0.15  %
FHLB stock 22,517  76  1.34  % 16,871  102  2.43  %
Total interest-earning assets(a)
8,437,732  81,924  3.86  % 6,441,041  66,247  4.14  %
Noninterest-earning assets:  
Cash and due from banks 69,788  58,304 
Allowance for credit losses (144,991) (91,196)
Other assets 816,759  666,463 
Total noninterest-earning assets 741,556  633,571 
Total assets $ 9,179,288  $ 7,074,612 
Interest-bearing liabilities:  
Interest-bearing deposits:  
Interest-bearing checking $ 1,626,067  $ 2,194  0.54  % $ 1,161,593  $ 1,717  0.59  %
Money market 2,179,128  3,589  0.66  % 1,422,344  2,179  0.62  %
Savings deposits 309,689  58  0.07  % 254,357  41  0.06  %
Customer time deposits 1,334,829  4,817  1.44  % 1,197,960  5,292  1.78  %
Brokered and internet time deposits 60,327  (85) (0.56) % 16,844  80  1.91  %
       Time deposits 1,395,156  4,732  1.35  % 1,214,804  5,372  1.78  %
Total interest-bearing deposits 5,510,040  10,573  0.76  % 4,053,098  9,309  0.92  %
Other interest-bearing liabilities:  
Securities sold under agreements to repurchase and federal funds purchased 37,309  51  0.54  % 32,451  50  0.62  %
Federal Home Loan Bank advances 249,457  406  0.65  % 250,000  405  0.65  %
Subordinated debt 95,048  1,222  5.11  % 30,930  399  5.19  %
Other borrowings 15,015  47  1.25  % 15,000  107  2.87  %
Total other interest-bearing liabilities 396,829  1,726  1.73  % 328,381  961  1.18  %
Total interest-bearing liabilities 5,906,869  12,299  0.83  % 4,381,479  10,270  0.94  %
Noninterest-bearing liabilities:  
Demand deposits 2,050,084  1,728,343 
Other liabilities 177,329  169,085 
Total noninterest-bearing liabilities 2,227,413  1,897,428 
Total liabilities 8,134,282  6,278,907 
Shareholders' equity 1,045,006  795,705 
Total liabilities and shareholders' equity $ 9,179,288  $ 7,074,612 
Net interest income(a)
  $ 69,625  $ 55,977 
Interest rate spread(a)
    3.03  % 3.20  %
Net interest margin(a)
    3.28  % 3.50  %
Cost of total deposits     0.56  % 0.65  %
Average interest-earning assets to average interest-bearing liabilities     142.8  % 147.0  %
Tax-equivalent adjustment   $ 797  $ 640 
Loans HFI yield components:    
    Contractual interest rate(a)(c)
  $ 66,441  4.36  % $ 54,233  4.57  %
    Origination and other loan fee income(c)
  4,029  0.26  % 2,823  0.24  %
    Accretion on purchased loans   526  0.04  % 976  0.08  %
    Nonaccrual interest   664  0.04  % 169  0.01  %
          Total loans HFI yield   $ 71,660  4.70  % $ 58,201  4.90  %
(a) Includes tax equivalent adjustment using combined marginal tax rate of 26.06%.
(b) Excludes the average balance for unrealized gains (losses) prospectively from 2020 for loans held for sale and investments carried at fair value.
(c) Includes $797 and $596 of loan contractual interest and $850 and $624 of loan fees related to PPP loans for the three months ended September 30, 2020 and June 30, 2020 respectively.
(d) Includes 311,025 and $234,304 of average PPP loan balances for the three months ended September 30, 2020 and June 30, 2020, respectively.




FB Financial Corporation
8


Average Balance, Average Yield Earned and Average Rate Paid (continued)
For the Quarters Ended
(Unaudited)
(In Thousands, Except %)
  Three Months Ended Three Months Ended Three Months Ended
  March 31, 2020 December 31, 2019 September 30, 2019
  Average
balances 		Interest
income/
expense 		Average
yield/
rate 		Average
balances 		Interest
income/
expense 		Average
yield/
rate 		Average
balances 		Interest
income/
expense 		Average
yield/
rate
Interest-earning assets:            
Loans HFI(a)
$ 4,495,069  $ 61,817  5.53  % $ 4,384,180  $ 64,053  5.80  % $ 4,306,725  $ 65,241  6.01  %
Loans held for sale(b)
214,150  1,990  3.74  % 257,833  2,095  3.22  % 262,896  2,448  3.69  %
Securities:(b)
Taxable 512,774  3,056  2.40  % 505,299  2,969  2.33  % 508,924  3,137  2.45  %
Tax-exempt(a)
197,961  1,915  3.89  % 181,922  1,794  3.91  % 153,633  1,588  4.10  %
Total securities(a)
710,735  4,971  2.81  % 687,211  4,763  2.75  % 662,557  4,725  2.83  %
Federal funds sold 107,489  245  0.92  % 69,749  301  1.71  % 24,388  166  2.70  %
Interest-bearing deposits with other financial institutions 287,499  1,082  1.51  % 185,319  790  1.69  % 176,708  950  2.13  %
FHLB stock 16,226  104  2.58  % 15,976  161  4.00  % 15,976  176  4.37  %
Total interest-earning assets(a)
5,831,168  70,209  4.84  % 5,600,278  72,163  5.11  % 5,449,250  73,706  5.37  %
Noninterest-earning assets:
Cash and due from banks 64,438  49,318  51,433 
Allowance for credit losses (63,034) (31,631) (30,484)
Other assets 576,845  539,966  518,373 
Total noninterest-earning assets 578,249  557,653  539,322 
Total assets $ 6,409,417  $ 6,157,931  $ 5,988,572 
Interest-bearing liabilities:
Interest-bearing deposits:
    Interest-bearing checking $ 1,085,849  $ 2,179  0.81  % $ 981,572  $ 2,068  0.84  % $ 971,686  $ 2,338  0.95  %
    Money market 1,383,229  3,971  1.15  % 1,320,268  4,309  1.29  % 1,260,555  4,607  1.45  %
    Savings deposits 233,807  79  0.14  % 210,550  79  0.15  % 207,221  78  0.15  %
    Customer time deposits 1,205,385  5,843  1.95  % 1,175,467  6,133  2.07  % 1,184,737  6,362  2.13  %
    Brokered and internet time deposits 20,355  96  1.90  % 23,219  114  1.95  % 28,273  137  1.92  %
       Time deposits 1,225,740  5,939  1.95  % 1,198,686  6,247  2.07  % 1,213,010  6,499  2.13  %
Total interest-bearing deposits 3,928,625  12,168  1.25  % 3,711,076  12,703  1.36  % 3,652,472  13,522  1.47  %
Other interest-bearing liabilities:
Securities sold under agreements to repurchase and federal funds purchased 26,961  57  0.85  % 27,610  59  0.85  % 30,585  80  1.04  %
  Federal Home Loan Bank advances 250,000  714  1.15  % 250,000  788  1.25  % 248,315  918  1.47  %
  Subordinated debt 30,930  421  5.47  % 30,930  401  5.14  % 30,930  417  5.35  %
  Other borrowings 7,747  65  3.37  % —  —  —  % —  —  —  %
Total other interest-bearing liabilities 315,638  1,257  1.60  % 308,540  1,248  1.60  % 309,830  1,415  1.81  %
Total interest-bearing liabilities 4,244,263  13,425  1.27  % 4,019,616  13,951  1.38  % 3,962,302  14,937  1.50  %
Noninterest-bearing liabilities:
Demand deposits 1,284,331  1,253,311  1,180,685 
Other liabilities 111,894  123,055  113,884 
Total noninterest-bearing liabilities 1,396,225  1,376,366  1,294,569 
Total liabilities 5,640,488  5,395,982  5,256,871 
Shareholders' equity 768,929  761,949  731,701 
Total liabilities and shareholders' equity $ 6,409,417  $ 6,157,931  $ 5,988,572 
Net interest income(a)
$ 56,784  $ 58,212  $ 58,769 
Interest rate spread(a)
3.57  % 3.74  % 3.87  %
Net interest margin(a)
3.92  % 4.12  % 4.28  %
Cost of total deposits 0.94  % 1.02  % 1.11  %
Average interest-earning assets to average interest-bearing liabilities 137.4  % 139.3  % 137.5  %
Tax-equivalent adjustment $ 535  $ 520  $ 464 
Loans HFI yield components:
    Contractual interest rate(a)
$ 57,382  5.14  % $ 58,219  5.27  % $ 59,645  5.50  %
    Origination and other loan fee income 2,589  0.23  % 2,863  0.26  % 3,293  0.30  %
    Accretion on purchased loans 1,578  0.14  % 2,526  0.23  % 2,102  0.19  %
    Nonaccrual interest 268  0.02  % 439  0.04  % 201  0.02  %
    Syndication fee income —  —  % 6  —  % —  —  %
          Total loans HFI yield $ 61,817  5.53  % $ 64,053  5.80  % $ 65,241  6.01  %
(a) Includes tax equivalent adjustment using combined marginal tax rate of 26.06%.
(b) Excludes the average balance for unrealized gains (losses) prospectively from Q1 2020 for loans held for sale and investments carried at fair value.

FB Financial Corporation
9


Average Balance, Average Yield Earned and Average Rate Paid (continued)
For the Nine Months Ended
(Unaudited)
(In Thousands, Except %)
 
  September 30, 2020 September 30, 2019
  Average
balances 		Interest
income/
expense 		Average
yield/
rate 		Average
balances 		Interest
income/
expense 		Average
yield/
rate
Interest-earning assets:            
Loans HFI(a)(d)
$ 5,112,130  $ 191,678  5.01  % $ 4,070,535  $ 186,640  6.13  %
Mortgage loans held for sale(b)
353,540  8,561  3.23  % 253,629  7,871  4.15  %
Commercial loans held for sale 33,491  1,336  5.33  % —  —  —  %
Securities:(b)
Taxable 537,427  7,961  1.98  % 519,941  10,254  2.64  %
Tax-exempt(a)
247,674  6,703  3.62  % 146,336  4,704  4.30  %
Total securities(a)
785,101  14,664  2.49  % 666,277  14,958  3.00  %
Federal funds sold 82,089  274  0.45  % 18,355  377  2.75  %
Interest-bearing deposits with other financial institutions 520,858  1,585  0.41  % 111,551  1,861  2.23  %
FHLB stock 18,547  282  2.03  % 14,867  561  5.05  %
Total interest-earning assets(a)
6,905,756  218,380  4.22  % 5,135,214  212,268  5.53  %
Noninterest-earning assets:
Cash and due from banks 64,150  52,108 
Allowance for loan losses (101,005) (30,041)
Other assets 738,866  490,424 
Total noninterest-earning assets 702,011  512,491 
Total assets $ 7,607,767  $ 5,647,705 
Interest-bearing liabilities:
Interest-bearing deposits:
    Interest-bearing checking $ 1,287,684  $ 6,090  0.63  % $ 939,654  $ 6,687  0.95  %
    Money market 1,661,867  9,739  0.78  % 1,185,745  13,071  1.47  %
    Savings deposits 261,058  178  0.09  % 195,822  222  0.15  %
    Customer time deposits 1,245,324  15,952  1.71  % 1,148,180  17,970  2.09  %
    Brokered and internet time deposits 32,610  91  0.37  % 52,759  915  2.32  %
       Time deposits 1,277,934  16,043  1.68  % 1,200,939  18,885  2.10  %
Total interest-bearing deposits 4,488,543  32,050  0.95  % 3,522,160  38,865  1.48  %
Other interest-bearing liabilities:
Securities sold under agreements to repurchase and federal funds purchased 32,215  158  0.66  % 25,992  232  1.19  %
  Federal Home Loan Bank advances 249,818  1,525  0.82  % 166,450  2,216  1.78  %
  Subordinated debt 52,459  2,042  5.20  % 30,930  1,237  5.35  %
  Other borrowings 12,671  219  2.31  % —  —  —  %
Total other interest-bearing liabilities 347,163  3,944  1.52  % 223,372  3,685  2.21  %
Total interest-bearing liabilities 4,835,706  35,994  0.99  % 3,745,532  42,550  1.52  %
Noninterest-bearing liabilities:
Demand deposits 1,698,618  1,088,876 
Other liabilities 149,987  104,861 
Total noninterest-bearing liabilities 1,848,605  1,193,737 
Total liabilities 6,684,311  4,939,269 
Shareholders' equity 923,456  708,436 
Total liabilities and shareholders' equity $ 7,607,767  $ 5,647,705 
Net interest income(a)
$ 182,386  $ 169,718 
Interest rate spread(a)
3.23  % 4.01  %
Net interest margin(a)
3.53  % 4.42  %
Cost of total deposits 0.69  % 1.13  %
Average interest-earning assets to average interest-bearing liabilities 142.8  % 137.1  %
Tax equivalent adjustment   $ 1,972    $ 1,374 
Loans HFI yield components:      
    Contractual interest rate(a)(c)
  $ 178,056  4.65  % $ 169,850  5.58  %
    Origination and other loan fee income(c)
  9,441  0.25  % 10,114  0.33  %
    Accretion on purchased loans   3,080  0.08  % 6,030  0.20  %
    Nonaccrual interest   1,101  0.03  % 446  0.01  %
    Syndication fee income   —  —  % 200  0.01  %
          Total loans HFI yield   $ 191,678  5.01  % $ 186,640  6.13  %
(a) Includes tax equivalent adjustment using combined marginal tax rate of 26.06%.
(b) Excludes the average balances of unrealized gains (losses) prospectively from 2020 for loans held for sale and investments carried at fair value.
(c) Includes 1,393 of loan contractual interest and 1,474 of loan fees related to PPP loans for the nine months ended September 30, 2020.
(d) Includes $182,248 of average PPP loan balances during the nine months ended September 30, 2020.

FB Financial Corporation
10


Franklin Financial Network, Inc. Opening Balance Sheet (Preliminary)
As of August 15, 2020
(Unaudited)
(In Thousands)
As Recorded by FB Financial Corporation (Preliminary)(a)
Assets
Cash and cash equivalents $ 283,996 
Investments 373,459 
Mortgage loans held for sale, at fair value 39,525 
Commercial loans held for sale, at fair value 318,365 
Loans, net of fair value adjustments 2,436,679 
Allowance for credit losses on PCD loans (24,832)
Premises and equipment 39,691 
Operating lease right-of-use assets 24,330 
Mortgage servicing rights 4,850 
Core deposit intangible 7,692 
Goodwill 60,644 
Other assets 121,075 
Total assets $ 3,685,474 
Liabilities
Deposits $ 3,107,004 
Borrowings 62,435 
Operating lease liabilities 24,330 
Accrued expenses and other liabilities 13,782 
    Total liabilities $ 3,207,551 
Acquired minority interest $ 93 
Equity and Cash Consideration
Value of 15,102,492 shares issued as merger consideration $ 445,826 
Fair value of replacement awards attributable to pre-combination service 674 
Total cash consideration paid 31,330 
    Total consideration $ 477,830 
(a) The above estimated fair values of assets acquired and liabilities assumed are preliminary and are subject to change during the measurement period as allowed under ASC 805 - Business Combinations.
FB Financial Corporation
11


Loans and Deposits by Market
For the Quarters Ended
(Unaudited)
(In Thousands)
  2020 2019
Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Loans by market
Metropolitan $ 5,699,082  $ 3,387,279  $ 3,217,598  $ 3,061,183  $ 3,011,118 
Community 892,229  875,347  820,180  817,380  802,923 
Specialty lending and other 622,227  564,397  530,260  531,079  531,303 
Total $ 7,213,538  $ 4,827,023  $ 4,568,038  $ 4,409,642  $ 4,345,344 
Deposits by market
Metropolitan $ 5,574,001  $ 3,651,146  $ 3,272,740  $ 2,963,524  $ 2,869,049 
Community 1,928,006  1,915,996  1,731,050  1,642,949  1,620,153 
Mortgage and other(a)
1,591,740  385,659  373,142  328,465  432,561 
Total $ 9,093,747  $ 5,952,801  $ 5,376,932  $ 4,934,938  $ 4,921,763 
(a) Includes deposits related to escrow balances from mortgage servicing portfolio and wholesale/other deposits.

FB Financial Corporation
12


 
Segment Data
For the Quarters Ended
(Unaudited)
(In Thousands, Except %)
  2020 2019
Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Banking segment
Net interest income $ 68,791  $ 55,350  $ 56,233  $ 57,776  $ 58,350 
Provisions for credit losses 55,401  25,921  29,565  2,950  1,831 
Mortgage banking income retail footprint 24,683  16,940  10,651  9,899  10,693 
Other noninterest income 12,340  9,323  9,955  9,058  8,952 
Other noninterest mortgage banking expenses 15,175  11,542  7,175  8,126  8,087 
Merger expense 20,400  1,586  3,050  686  295 
Other noninterest expense 52,135  40,454  40,767  38,918  38,755 
Pre-tax (loss) income after allocations $ (37,297) $ 2,110  $ (3,718) $ 26,053  $ 29,027 
Total assets $ 10,378,122  $ 6,751,881  $ 6,211,640  $ 5,795,888  $ 5,730,492 
Intracompany funding income included in net interest income 3,940  3,335  2,375  2,460  2,875 
Core efficiency ratio* 62.7  % 63.2  % 61.8  % 61.1  % 59.6  %
Mortgage segment
Net interest income $ 37  $ (13) $ 16  $ (84) $ (45)
Noninterest income 60,003  55,228  22,094  16,277  18,500 
Mortgage restructuring expense —  —  —  —  112 
Merger expense 330  —  —  —  — 
Other noninterest expense 30,052  26,997  17,567  14,956  15,686 
Direct contribution $ 29,658  $ 28,218  $ 4,543  $ 1,237  $ 2,657 
Total assets $ 632,316  $ 503,655  $ 444,047  $ 329,033  $ 358,403 
Intracompany funding expense included in net interest income 3,940  3,335  2,375  2,460  2,875 
Core efficiency ratio* 50.1  % 48.9  % 79.5  % 92.4  % 85.0  %
Interest rate lock commitments volume during the period
Consumer direct $ 1,453,238  $ 1,480,878  $ 1,314,625  $ 679,096  $ 973,142 
Retail 965,434  758,228  779,155  402,490  503,861 
Wholesale —  —  —  —  159,263 
Total $ 2,418,672  $ 2,239,106  $ 2,093,780  $ 1,081,586  $ 1,636,266 
Interest rate lock commitments pipeline (period end)
Consumer direct $ 912,349  $ 848,732  $ 653,593  $ 348,389  $ 519,698 
Retail 451,872  357,200  430,940  104,809  159,826 
Wholesale —  —  —  —  — 
Total $ 1,364,221  $ 1,205,932  $ 1,084,533  $ 453,198  $ 679,524 
Mortgage sales
Consumer direct $ 1,034,278  $ 962,417  $ 684,209  $ 718,624  $ 588,535 
Retail 229,022  220,436  158,224  120,487  94,735 
Retail footprint 506,743  412,560  199,043  266,328  256,060 
Wholesale —  —  —  652  284,655 
Total $ 1,770,043  $ 1,595,413  $ 1,041,476  $ 1,106,091  $ 1,223,985 
Gains and fees from origination and sale of mortgage loans held for sale $ 76,506  $ 45,515  $ 30,390  $ 31,807  $ 28,020 
Net change in fair value of loans held for sale, derivatives, and other 10,084  34,778  3,205  (4,328) 2,304 
Mortgage servicing income 5,536  5,113  5,018  4,914  3,960 
Change in fair value of mortgage servicing rights, net of hedging (7,440) (13,238) (5,868) (6,217) (5,091)
Total mortgage banking income $ 84,686  $ 72,168  $ 32,745  $ 26,176  $ 29,193 
Mortgage sale margin(a)
4.32  % 2.85  % 2.92  % 2.88  % 2.29  %
*These measures are considered non-GAAP financial measures. See "GAAP Reconciliation and Use of non-GAAP financial measures" and the corresponding financial tables below for a reconciliation and discussion of these non-GAAP measures for a reconciliation and discussion of this non-GAAP measure.
(a) Calculated by dividing gains and fees from origination and sale of mortgage loans held for sale by total mortgage sales.
FB Financial Corporation
13


Loan Portfolio and Asset Quality
For the Quarters Ended
(Unaudited)
(In Thousands, Except %)
  2020 2019
  Third Quarter % of Total Second Quarter % of Total First Quarter % of Total Fourth Quarter % of Total Third Quarter % of Total
Loan portfolio    
Commercial and Industrial (a)
$ 1,417,671 20  % $ 1,289,646 27  % $ 1,020,484 23  % $ 1,034,036 23  % $ 997,921 23  %
Construction 1,190,878 16  % 553,619 12  % 599,479 13  % 551,101 13  % 537,784 12  %
Residential real estate:  
1-to-4 family mortgage 1,140,611 16  % 741,936 15  % 743,336 16  % 710,454 16  % 710,077 17  %
Residential line of credit 420,318 6  % 236,974 5  % 246,527 5  % 221,530 5  % 215,493 5  %
Multi-family mortgage 165,937 2  % 115,149 2  % 94,638 2  % 69,429 2  % 80,352 2  %
Commercial real estate:  
Owner occupied 924,987 13  % 683,245 14  % 686,543 15  % 630,270 14  % 620,635 14  %
Non-owner occupied 1,644,400 23  % 923,192 19  % 910,822 20  % 920,744 21  % 914,502 21  %
Consumer and other 308,736 4  % 283,262 6  % 266,209 6  % 272,078 6  % 268,580 6  %
Total loans HFI $ 7,213,538 100  % $ 4,827,023 100  % $ 4,568,038 100  % $ 4,409,642 100  % $ 4,345,344 100  %
Allowance for credit losses rollforward summary    
Allowance for credit losses at the beginning of the period $ 113,129    $ 89,141  $ 31,139  $ 31,464  $ 30,138 
Impact of adopting ASC 326 (CECL) on non-purchased credit deteriorated loans —  —  30,888  —  — 
Impact of adopting ASC 326 (CECL) on purchased credit deteriorated loans —  —  558  —  — 
Charge-offs (993)   (1,165) (2,411) (3,594) (717)
Recoveries 1,172    1,114  334  319  212 
Provision for credit losses 45,834    24,039  27,964  2,950  1,831 
Initial allowance on acquired loans with credit deterioration 24,831  —  669  —  — 
Allowance for credit losses at the end of the period $ 183,973    $ 113,129  $ 89,141  $ 31,139  $ 31,464 
Allowance for credit losses as a percentage of total loans HFI 2.55  %   2.34  % 1.95  % 0.71  % 0.72  %
Adjusted allowance for credit losses as a percentage of loans HFI* 2.66  % 2.51  % 1.95  % 0.71  % 0.72  %
Allowance for credit losses on unfunded commitments $ 16,067  $ 6,500  $ 4,618  $ —  $ — 
Charge-offs    
Commercial and Industrial $ (249)   $ (147) $ (1,234) $ (2,669) $ (3)
Construction —    (18) —  —  — 
Residential real estate:    
1-to-4 family mortgage (8)   (123) (242) (138) — 
Residential line of credit —    (21) —  (4) (170)
Multi-family mortgage —    —  —  —  — 
Commercial real estate:    
Owner occupied (95)   —  (209) —  — 
Non-owner occupied (166)   (545) —  —  (12)
Consumer and other (475)   (311) (726) (783) (532)
Total charge-offs (993)   (1,165) (2,411) (3,594) (717)
Recoveries    
Commercial and Industrial 757    807  88  70  16 
Construction 51    151  —  3  1 
Residential real estate:    
1-to-4 family mortgage 116    26  24  17  25 
Residential line of credit 22    24  15  17  75 
Multi-family mortgage —    —  —  —  — 
Commercial real estate:    
Owner occupied 51    3  14  13  3 
Non-owner occupied —    —  —  —  — 
Consumer and other 175    103  193  199  92 
Total recoveries 1,172    1,114  334  319  212 
Net recoveries (charge-offs) $ 179    $ (51) $ (2,077) $ (3,275) $ (505)
Net (recoveries) charge-offs as a percentage of average total loans (0.01) %   0.00  % 0.19  % 0.30  % 0.05  %
Loans classified as substandard $ 126,986    $ 88,416  $ 74,237  $ 80,346  $ 78,881 
FB Financial Corporation
14


Loan Portfolio and Asset Quality (continued)
For the Quarters Ended
(Unaudited)
(In Thousands, Except %)
  2020 2019
  Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Nonperforming assets(b)(c)
 
Past due 90 days or more and accruing interest $ 9,064    $ 6,412  $ 6,459  $ 5,543  $ 2,452 
Nonaccrual 34,585    28,413  24,547  21,062  17,911 
Total nonperforming loans held for investment
43,649    34,825  31,006  26,605  20,363 
Commercial loans held for sale 12,812    —  —  —  — 
Other real estate owned:
Foreclosed 6,570    7,340  9,332  9,983  8,771 
Excess land and facilities 6,178    7,751  7,740  8,956  7,305 
Other assets 1,184    1,306  1,188  1,580  1,519 
Total nonperforming assets $ 70,393    $ 51,222  $ 49,266  $ 47,124  $ 37,958 
Total nonperforming loans as a percentage of loans held for investment 0.61  %   0.72  % 0.68  % 0.60  % 0.47  %
Total nonperforming assets as a percentage of total assets 0.64  %   0.71  % 0.74  % 0.77  % 0.62  %
Total accruing loans over 90 days delinquent as a percentage of total assets 0.08  %   0.09  % 0.10  % 0.09  % 0.04  %
Loans restructured as troubled debt restructurings $ 16,681   $ 13,277 $ 11,566 $ 12,206 $ 11,460
Troubled debt restructurings as a percentage of loans held for investment 0.23  %   0.28  % 0.25  % 0.28  % 0.26  %
(a) Includes PPP loan balances of $310,719 and $314,678 as of September 30, 2020 and June 30, 2020, respectively.
(b) Upon adoption of CECL on January 1, 2020, purchase credit deteriorated loans are included in nonperforming assets on a prospective basis.
(c) Nonperforming assets include guaranteed repurchased loans previously sold of $4.4 million, $4.2 million, $3.1 million, $2.7 million, and $2.6 million for the quarters ended September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, and September 30, 2019, respectively.
*These measures are considered non-GAAP financial measures. See "GAAP Reconciliation and Use of non-GAAP Financial Measures" and the corresponding financial tables below for reconciliations of these non-GAAP measures. Investors are encouraged to refer to the discussion of non-GAAP measures included in the corresponding earnings release.


FB Financial Corporation
15


Preliminary Capital Ratios
(Unaudited)
(In Thousands, Except %)
Computation of Tangible Common Equity to Tangible Assets: September 30, 2020 December 31, 2019
Total Common Shareholders' Equity $ 1,244,998  $ 762,329 
Less:
    Goodwill 236,086  169,051 
    Other intangibles 23,924  17,589 
Tangible Common Equity $ 984,988  $ 575,689 
Total Assets $ 11,010,438  $ 6,124,921 
Less:
    Goodwill 236,086  169,051 
    Other intangibles 23,924  17,589 
Tangible Assets $ 10,750,428  $ 5,938,281 
Preliminary Total Risk-Weighted Assets $ 8,281,303  $ 5,172,450 
Total Common Equity to Total Assets 11.3  % 12.4  %
Tangible Common Equity to Tangible Assets* 9.2  % 9.7  %
  September 30, 2020 December 31, 2019
Preliminary Regulatory Capital(a):
 
    Common Equity Tier 1 Capital $ 1,025,897  $ 572,410 
    Tier 1 Capital 1,055,897  602,410 
    Total Capital 1,317,127  633,549 
Preliminary Regulatory Capital Ratios:  
    Common Equity Tier 1 12.4  % 11.1  %
    Tier 1 Risk-Based 12.8  % 11.6  %
    Total Risk-Based 15.9  % 12.2  %
    Tier 1 Leverage 11.8  % 10.1  %
(a) Reflects CECL transition relief of $55.5 million add-back and $61.4 million disallowed from add-back to Tier 2 capital.
*These measures are considered non-GAAP financial measures. See "GAAP Reconciliation and Use of non-GAAP financial measures" and the corresponding financial tables below for a reconciliation and discussion of these non-GAAP measures.

FB Financial Corporation
16


Investment Portfolio
For the Quarters Ended
(Unaudited)
(In Thousands, Except %)
  2020 2019
Securities (at fair value) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Available-for-sale debt securities    
U.S. government agency securities $ 1,994 —  % $ 3,024 —  % $ 3,037 —  % $ — —  % $ 999 —  %
Mortgage-backed securities - residential 759,960 65  % 454,606 61  % 499,658 65  % 490,676 71  % 485,300 72  %
Municipals, tax exempt 374,880 32  % 266,052 35  % 235,677 31  % 189,235 27  % 173,785 26  %
Treasury securities 21,700 2  % 22,771 3  % 24,860 3  % 7,448 1  % 7,432 1  %
Corporate securities 1,987 —  % 985 —  % 985 —  % 1,022 —  % 1,015 —  %
Total available-for-sale debt securities 1,160,521 99  % 747,438 99  % 764,217 99  % 688,381 99  % 668,531 99  %
Equity securities 4,389 1  % 4,329 1  % 3,358 1  % 3,295 1  % 3,250 1  %
Total securities $ 1,164,910 100  % $ 751,767 100  % $ 767,575 100  % $ 691,676 100  % $ 671,781 100  %
Securities to total assets 10.6  %   10.4  % 11.5  % 11.3  % 11.0  %
Unrealized gain on available-for-sale debt securities $ 31,468 $ 29,683 $ 28,045 $ 11,676 $ 12,436

FB Financial Corporation
17


Non-GAAP Reconciliation
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
 
2020 2019
Adjusted earnings Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Pre-tax net (loss) income $ (7,639) $ 30,328  $ 825  $ 27,290  $ 31,684 
Plus merger and mortgage restructuring expenses 20,730  1,586  3,050  686  407 
Plus initial provision for credit losses on acquired loans and unfunded commitments 63,251  —  2,885  —  — 
Less significant losses on securities, other real estate owned and other items(1)
(3,810) —  —  —  — 
Adjusted pre-tax earnings 80,152  31,914  6,760  27,976  32,091 
Income tax expense, adjusted 20,682  7,828  1,464  5,897  7,824 
Adjusted earnings $ 59,470  $ 24,086  $ 5,296  $ 22,079  $ 24,267 
Weighted average common shares outstanding - fully diluted 40,637,745  32,506,417  31,734,112  31,470,565  31,425,573 
Adjusted diluted earnings per share
Diluted (loss) earnings per common share $ (0.14) $ 0.70  $ 0.02  $ 0.68  $ 0.76 
Plus merger and mortgage restructuring expenses 0.51  0.05  0.10  0.02  0.01 
Plus initial provision for credit losses on acquired loans and unfunded commitments 1.56  —  0.09  —  — 
Less significant losses on securities, other real estate owned and other items (0.09) —  —  —  — 
Less tax effect 0.56  0.01  0.04  —  — 
Adjusted diluted earnings per share $ 1.46  $ 0.74  $ 0.17  $ 0.70  $ 0.77 
(1)Includes charges of $2,305 related to a one time FHLB prepayment penalty and $1,505 related to losses on other real estate owned
  2020 2019
Adjusted pre-tax pre-provision earnings Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Pre-tax net (loss) income $ (7,639) $ 30,328  $ 825  $ 27,290  $ 31,684 
Plus provisions for credit losses 55,401  25,921  29,565  2,950  1,831 
Pre-tax pre-provision earnings 47,762  56,249  30,390  30,240  33,515 
Plus merger and mortgage restructuring expenses 20,730  1,586  3,050  686  407 
Less significant losses on securities, other real estate owned and other items(1)
(3,810) —  —  —  — 
Adjusted pre-tax pre-provision earnings $ 72,302  $ 57,835  $ 33,440  $ 30,926  $ 33,922 
Weighted average common shares outstanding - fully diluted 40,637,745  32,506,417  31,734,112  31,470,565  31,425,573 
Adjusted pre-tax pre-provision diluted earnings per share
Diluted (loss) earnings per common share $ (0.14) $ 0.70  $ 0.02  $ 0.68  $ 0.76 
Plus income tax expense (0.05) 0.23  —  0.18  0.25 
Plus provisions for credit losses 1.36  0.80  0.93  0.10  0.06 
Pre-tax pre-provision earnings per share 1.17  1.73  0.95  0.96  1.07 
Plus merger and mortgage restructuring expenses 0.51  0.05  0.10  0.02  0.01 
Less significant losses on securities, other real estate owned and other items (0.09) —  —  —  — 
Adjusted pre-tax pre-provision earnings per share $ 1.77  $ 1.78  $ 1.05  $ 0.98  $ 1.08 
(1)Includes charges of $2,305 related to a one time FHLB prepayment penalty and $1,505 related to losses on other real estate owned
FB Financial Corporation
18


Non-GAAP Reconciliation (continued)
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
 
Adjusted pro forma earnings* YTD 2020 2019 2018 2017 2016
Pre-tax net income $ 23,514  $ 109,539  $ 105,854  $ 73,485  $ 62,324 
Plus merger, conversion, offering, and mortgage restructuring expenses 25,366  7,380  2,265  19,034  3,268 
Plus initial provision for credit losses on acquired loans and unfunded commitments 66,136  —  —  —  — 
Less significant losses on securities, other real estate owned and other items(1)
(3,810) —  —  —  (3,539)
Adjusted pre-tax earnings 118,826  116,919  108,119  92,519  69,131 
Adjusted pro forma income tax expense 29,974  27,648  26,034  34,749  25,404 
Adjusted pro forma earnings $ 88,852  $ 89,271  $ 82,085  $ 57,770  $ 43,727 
Weighted average common shares outstanding - fully diluted 34,840,292  31,402,897  31,314,981  28,207,602  19,312,174 
Adjusted pro forma diluted earnings per share*
Diluted earnings per common share $ 0.52  $ 2.65  $ 2.55  $ 1.86  $ 2.10 
Plus merger, conversion, offering, and mortgage restructuring expenses 0.73  0.24  0.07  0.67  0.17 
Plus initial provision for credit losses on acquired loans and unfunded commitments 1.90  —  —  —  — 
Less significant losses on securities, other real estate owned and other items (0.11) —  —  —  (0.18)
Less tax effect and benefit of enacted tax laws 0.70  0.06  0.01  0.48  0.19 
Adjusted pro forma diluted earnings per share $ 2.56  $ 2.83  $ 2.61  $ 2.05  $ 2.26 
 *Prior to the IPO in the third quarter of 2016, the Company was an S corporation and did not incur federal income taxes. In conjunction with the IPO, the Company converted to a C corporation. These results are on a pro forma basis to reflect the results of the Company on a C corporation basis and combined effective tax rates of 35.08% for the year ended December 31, 2016.


(1)Includes charges of $2,305 related to a one time FHLB prepayment penalty and $1,505 related to losses on other real estate owned
Adjusted pre-tax pre-provision earnings YTD 2020 2019 2018 2017 2016
Pre-tax net income $ 23,514  $ 109,539  $ 105,854  $ 73,485  $ 62,324 
Plus provisions for credit losses 110,887  7,053  5,398  (950) (1,479)
Pre-tax pre-provision earnings 134,401  116,592  111,252  72,535  60,845 
Plus merger, conversion, offering, and mortgage restructuring expenses 25,366  7,380  2,265  19,034  3,268 
Less significant losses on securities, other real estate owned and other items(1)
(3,810) —  —  —  (3,539)
Adjusted pre-tax pre-provision earnings $ 163,577  $ 123,972  $ 113,517  $ 91,569  $ 67,652 
Weighted average common shares outstanding - fully diluted 34,840,292  31,402,897  31,314,981  28,207,602  19,312,174 
Adjusted pre-tax pre-provision diluted earnings per share
Diluted earnings per common share $ 0.52  $ 2.65  $ 2.55  $ 1.86  $ 2.10 
Plus income tax expense 0.16  0.82  0.83  0.75  1.13 
Plus provisions for credit losses 3.18  0.23  0.17  (0.03) (0.08)
Pre-tax pre-provision earnings per share 3.86  3.70  3.55  2.58  3.15 
Plus merger, conversion, offering, and mortgage restructuring expenses 0.73  0.24  0.07  0.67  0.17 
Less significant losses on securities, other real estate owned and other items (0.11) —  —  —  (0.18)
Adjusted pre-tax pre-provision diluted earnings per share $ 4.70  $ 3.94  $ 3.62  $ 3.25  $ 3.50 
(1)Includes charges of $2,305 related to a one time FHLB prepayment penalty and $1,505 related to losses on other real estate owned







FB Financial Corporation
19


Non-GAAP Reconciliation (continued)
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
  2020 2019
Core efficiency ratio (tax-equivalent basis) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Total noninterest expense $ 118,092  $ 80,579  $ 68,559  $ 62,686  $ 62,935 
Less merger and mortgage restructuring expenses 20,730  1,586  3,050  686  407 
Core noninterest expense $ 97,362  $ 78,993  $ 65,509  $ 62,000  $ 62,528 
Net interest income (tax-equivalent basis) $ 69,625  $ 55,977  $ 56,784  $ 58,212  $ 58,769 
Total noninterest income 97,026  81,491  42,700  35,234  38,145 
Less (loss) gain on sales or write-downs of other real estate owned and other assets (1,279) 32  (277) 277  (82)
Less gain (loss) from securities, net 583  (28) 63  (18) (20)
Core noninterest income 97,722  81,487  42,914  34,975  38,247 
Core revenue $ 167,347  $ 137,464  $ 99,698  $ 93,187  $ 97,016 
Efficiency ratio (GAAP)(a)
71.2  % 58.9  % 69.3  % 67.5  % 65.3  %
Core efficiency ratio (tax-equivalent basis) 58.2  % 57.5  % 65.7  % 66.5  % 64.5  %
(a) Efficiency ratio (GAAP) is calculated by dividing reported noninterest expense by reported total revenue.
  2020 2019
Banking segment core efficiency ratio
(tax equivalent) 		Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Core consolidated noninterest expense $ 97,362  $ 78,993  $ 65,509  $ 62,000  $ 62,528 
Less Mortgage segment core noninterest expense 30,052  26,997  17,567  14,956  15,686 
Core Banking segment noninterest expense $ 67,310  $ 51,996  $ 47,942  $ 47,044  $ 46,842 
Core revenue $ 167,347  $ 137,464  $ 99,698  $ 93,187  $ 97,016 
Less Mortgage segment total revenue 60,040  55,215  22,110  16,193  18,455 
Core Banking segment total revenue $ 107,307  $ 82,249  $ 77,588  $ 76,994  $ 78,561 
Banking segment core efficiency ratio
(tax-equivalent basis)
62.7  % 63.2  % 61.8  % 61.1  % 59.6  %
Mortgage segment core efficiency ratio
(tax equivalent)
Mortgage segment noninterest expense $ 30,382  $ 26,997  $ 17,567  $ 14,956  $ 15,798 
Less mortgage merger expense 330  —  —  —  — 
Less mortgage restructuring expense —  —  —  —  112 
Core Mortgage segment noninterest expense $ 30,052  $ 26,997  $ 17,567  $ 14,956  $ 15,686 
Mortgage segment total revenue $ 60,040  $ 55,215  $ 22,110  $ 16,193  $ 18,455 
Mortgage segment core efficiency ratio
(tax-equivalent basis)
50.1  % 48.9  % 79.5  % 92.4  % 85.0  %
FB Financial Corporation
20


Non-GAAP Reconciliation (continued)
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
  2020 2019
Adjusted mortgage contribution Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Mortgage segment pre-tax net contribution $ 29,658  $ 28,218  $ 4,543  $ 1,237  $ 2,657 
Retail footprint:
   Mortgage banking income 24,683  16,940  10,651  9,899  10,693 
   Mortgage banking expenses 15,175  11,542  7,175  8,126  8,087 
       Retail footprint pre-tax net contribution 9,508  5,398  3,476  1,773  2,606 
Total mortgage banking pre-tax net contribution $ 39,166  $ 33,616  $ 8,019  $ 3,010  $ 5,263 
Plus mortgage merger expense 330  —  —  —  — 
Plus mortgage restructuring expense —  —  —  —  112 
Total adjusted mortgage banking pre-tax net contribution $ 39,496  $ 33,616  $ 8,019  $ 3,010  $ 5,375 
Pre-tax pre-provision earnings $ 47,762  $ 56,249  $ 30,390  $ 30,240  $ 33,515 
% total mortgage banking pre-tax pre-provision
net contribution
82.0  % 59.8  % 26.4  % 10.0  % 15.7  %
Adjusted pre-tax pre-provision earnings $ 72,302  $ 57,835  $ 33,440  $ 30,926  $ 33,922 
% total adjusted mortgage banking pre-tax
pre-provision net contribution
54.6  % 58.1  % 24.0  % 9.73  % 15.8  %
  2020 2019
Tangible assets and equity Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Tangible assets
Total assets $ 11,010,438  $ 7,255,536  $ 6,655,687  $ 6,124,921  $ 6,088,895 
Less goodwill 236,086  175,441  174,859  169,051  168,486 
Less intangibles, net 23,924  17,671  18,876  17,589  18,748 
Tangible assets $ 10,750,428  $ 7,062,424  $ 6,461,952  $ 5,938,281  $ 5,901,661 
Tangible common equity
Total common shareholders' equity $ 1,244,998  $ 805,216  $ 782,330  $ 762,329  $ 744,835 
Less goodwill 236,086  175,441  174,859  169,051  168,486 
Less intangibles, net 23,924  17,671  18,876  17,589  18,748 
Tangible common equity $ 984,988  $ 612,104  $ 588,595  $ 575,689  $ 557,601 
Common shares outstanding 47,191,677  32,101,108  32,067,356  31,034,315  30,927,664 
Book value per common share $ 26.38  $ 25.08  $ 24.40  $ 24.56  $ 24.08 
Tangible book value per common share
$ 20.87  $ 19.07  $ 18.35  $ 18.55  $ 18.03 
Total common shareholders' equity to total assets 11.3  % 11.1  % 11.8  % 12.4  % 12.2  %
Tangible common equity to tangible assets 9.16  % 8.67  % 9.11  % 9.69  % 9.45  %
  2020 2019
Return on average tangible common equity Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Total average shareholders' equity $ 1,045,006  $ 795,705  $ 768,929  $ 761,949  $ 731,701 
Less average goodwill 205,473  175,150  171,532  168,492  168,486 
Less average intangibles, net 20,973  18,209  18,152  18,242  19,523 
Average tangible common equity $ 818,561  $ 602,346  $ 579,245  $ 575,215  $ 543,692 
Net (loss) income $ (5,599) $ 22,873  $ 745  $ 21,572  $ 23,966 
Return on average tangible common equity (2.72  %) 15.3  % 0.52  % 14.9  % 17.5  %
FB Financial Corporation
21


Non-GAAP Reconciliation (continued)
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
2020 2019
Adjusted return on average tangible common equity Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Average tangible common equity $ 818,561  $ 602,346  $ 579,245  $ 575,215  $ 543,692 
Adjusted net income 59,470  24,086  5,296  22,079  24,267 
Adjusted return on average tangible common equity 28.9  % 16.1  % 3.68  % 15.2  % 17.7  %
  2020 2019
Adjusted pre-tax pre-provision return on average tangible common equity Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Average tangible common equity $ 818,561  $ 602,346  $ 579,245  $ 575,215  $ 543,692 
Adjusted pre-tax pre-provision earnings 72,302  57,835  33,440  30,926  33,922 
Adjusted pre-tax pre-provision return on average tangible common equity 35.1  % 38.6  % 23.2  % 21.3  % 24.8  %
Pro forma return on average tangible common equity YTD 2020 2019 2018 2017 2016
Total average shareholders' equity $ 923,456  $ 723,494  $ 629,922  $ 466,219  $ 276,587 
Less average goodwill 184,548  160,587  137,190  84,997  46,867 
Less average intangibles, net 19,146  17,236  12,815  8,047  5,353 
Average tangible common equity $ 719,762  $ 545,671  $ 479,917  $ 373,175  $ 224,367 
Pro forma net income $ 18,019  $ 83,814  $ 80,236  $ 52,398  $ 39,422 
Pro forma return on average tangible common equity 3.34  % 15.4  % 16.7  % 14.0  % 17.6  %
Adjusted pro forma return on average tangible common equity YTD 2020 2019 2018 2017 2016
Average tangible common equity $ 719,762  $ 545,671  $ 479,917  $ 373,175  $ 224,367 
Adjusted pro forma net income 88,852  89,271  82,085  57,770  43,727 
Adjusted pro forma return on average tangible common equity 16.5  % 16.4  % 17.1  % 15.5  % 19.5  %
Adjusted pre-tax pre-provision return on average tangible common equity YTD 2020 2019 2018 2017 2016
Average tangible common equity $ 719,762  $ 545,671  $ 479,917  $ 373,175  $ 224,367 
Adjusted pre-tax pre-provision earnings 163,577  123,972  113,517  91,569  67,652 
Adjusted pre-tax pre-provision return on average tangible common equity 30.4  % 22.7  % 23.7  % 24.5  % 30.2  %

2020 2019
Adjusted return on average assets and equity Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Net (loss) income $ (5,599) $ 22,873  $ 745  $ 21,572  $ 23,966 
Average assets 9,179,288  7,074,612  6,409,417  6,157,931  5,988,572 
Average equity 1,045,006  795,705  768,929  761,949  731,701 
Return on average assets (0.24  %) 1.30  % 0.05  % 1.39  % 1.59  %
Return on average equity (2.13  %) 11.6  % 0.39  % 11.2  % 13.0  %
Adjusted net income $ 59,470  $ 24,086  $ 5,296  $ 22,079  $ 24,267 
Adjusted return on average assets 2.58  % 1.37  % 0.33  % 1.42  % 1.61  %
Adjusted return on average equity 22.6  % 12.2  % 2.77  % 11.5  % 13.2  %
FB Financial Corporation
22


Non-GAAP Reconciliation (continued)
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data and %)
  2020 2019
Adjusted pre-tax pre-provision return on average assets and equity Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Net (loss) income $ (5,599) $ 22,873  $ 745  $ 21,572  $ 23,966 
Average assets 9,179,288  7,074,612  6,409,417  6,157,931  5,988,572 
Average equity 1,045,006  797,705  768,929  761,949  731,701 
Return on average assets (0.24  %) 1.30  % 0.05  % 1.39  % 1.59  %
Return on average equity (2.13  %) 11.6  % 0.39  % 11.2  % 13.0  %
Adjusted pre-tax pre-provision earnings $ 72,302  $ 57,835  $ 33,440  $ 30,926  $ 33,922 
Adjusted pre-tax pre-provision return on average assets 3.13  % 3.29  % 2.10  % 1.99  % 2.25  %
Adjusted pre-tax pre-provision return on average equity 27.5  % 29.2  % 17.5  % 16.1  % 18.4  %
Adjusted pro forma return on average assets and equity YTD 2020 2019 2018 2017 2016
Pro forma net income $ 18,019  $ 83,814  $ 80,236  $ 52,398  $ 39,422 
Average assets 7,607,767  5,777,672  4,844,865  3,811,158  3,001,275 
Average equity 923,456  723,494  629,922  466,219  276,587 
Pro forma return on average assets 0.32  % 1.45  % 1.66  % 1.37  % 1.31  %
Pro forma return on average equity 2.61  % 11.6  % 12.7  % 11.2  % 14.3  %
Adjusted pro forma net income $ 88,852  $ 89,271  $ 82,085  $ 57,770  $ 43,727 
Adjusted pro forma return on average assets 1.56  % 1.55  % 1.69  % 1.52  % 1.46  %
Adjusted pro forma return on average equity 12.85  % 12.3  % 13.0  % 12.4  % 15.8  %
Adjusted pre-tax pre-provision return on average assets and equity YTD 2020 2019 2018 2017 2016
Pro forma net income $ 18,019  $ 83,814  $ 80,236  $ 52,398  $ 39,422 
Average assets 7,607,767  5,777,672  4,844,865  3,811,158  3,001,275 
Average equity 923,456  723,494  629,922  466,219  276,587 
Pro forma return on average assets 0.32  % 1.45  % 1.66  % 1.37  % 1.31  %
Pro forma return on average equity 2.61  % 11.6  % 12.7  % 11.2  % 14.3  %
Adjusted pre-tax pre-provision earnings $ 163,577  $ 123,972  $ 113,517  $ 91,569  $ 67,652 
Adjusted pre-tax pre-provision return on average assets 2.87  % 2.15  % 2.34  % 2.40  % 2.25  %
Adjusted pre-tax pre-provision return on average equity 23.7  % 17.1  % 18.0  % 19.6  % 24.5  %
2020 2019
Adjusted allowance for credit losses to loans held for investment Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Allowance for credit losses $ 183,973  $ 113,129  $ 89,141  $ 31,139  $ 31,464 
Less allowance for credit losses attributed to PPP loans 49  51  —  —  — 
Adjusted allowance for credit losses $ 183,924  $ 113,078  $ 89,141  $ 31,139  $ 31,464 
Loans held for investment 7,213,538  4,827,023  4,568,038  4,409,642  4,345,344 
Less PPP loans 310,719  314,678  —  —  — 
Adjusted loans held for investment $ 6,902,819  $ 4,512,345  $ 4,568,038  $ 4,409,642  $ 4,345,344 
Allowance for credit losses to loans held for investment 2.55  % 2.34  % 1.95  % 0.71  % 0.72  %
Adjusted allowance for credit losses to loans held for investment 2.66  % 2.51  % 1.95  % 0.71  % 0.72  %
FB Financial Corporation
23
Third Quarter 2020 Earnings Presentation October 27, 2020

 
Forward–Looking Statements Certain statements contained in this presentation may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, without limitation, statements regarding the projected impact of the COVID-19 global pandemic on our business operations, statements relating to the timing, benefits, costs, and synergies of the mergers with Franklin Financial Network, Inc. (“Franklin”) (the “Franklin merger”) and FNB Financial Corp. (“FNB”) (together with the Franklin merger, the “mergers”), and FB Financial’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,” “projection,” and other variations of such words and phrases and similar expressions. These forward-looking statements are not historical facts, and are based upon current expectations, estimates, and projections, many of which, by their nature, are inherently uncertain and beyond FB Financial’s control. The inclusion of these forward-looking statements should not be regarded as a representation by FB Financial or any other person that such expectations, estimates, and projections will be achieved. Accordingly, FB Financial 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 declines in housing and commercial real estate prices, high unemployment rates, and a continued slowdown in economic growth in the local or regional economies in which we operate and/or the US economy generally, (2) the effects of the COVID-19 pandemic, including the magnitude and duration of the pandemic and its impact on general economic and financial market conditions and on our business and our customers' business, results of operations, asset quality and financial condition, (3) changes in government interest rate policies and its impact on our business, net interest margin, and mortgage operations, (4) our ability to effectively manage problem credits, (5) the risk that the cost savings and any revenue synergies from the mergers or another acquisition may not be realized or may take longer than anticipated to be realized, (6) disruption from the mergers with customer, supplier, or employee relationships, (7) the risks related to the integrations of the combined businesses following the Franklin merger, (8) the diversion of management time on issues related to the mergers, (9) the ability of FB Financial to effectively manage the larger and more complex operations of the combined company following the Franklin merger, (10) the risks associated with FB Financial’s pursuit of future acquisitions, (11) reputational risk and the reaction of the parties’ respective customers to the mergers, (12) FB Financial’s ability to successful execute its various business strategies, (13) uncertainty regarding changes to the U.S. presidential administration and/or Congress and any resulting impact on economic policy, capital markets, federal regulation, and the response to the COVD-19 pandemic; and (14) general competitive, economic, political, and market conditions. Further information regarding FB Financial and factors which could affect the forward-looking statements contained herein can be found in FB Financial's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and its other filings with the Securities and Exchange Commission (the “SEC”). Many of these factors are beyond FB Financial’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 presentation, and FB Financial 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 FB Financial to predict their occurrence or how they will affect the company. FB Financial qualifies all forward-looking statements by these cautionary statements. 1

 
Use of non-GAAP financial measures This presentation 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 include, without limitation, adjusted net income, adjusted diluted earnings per share, adjusted pro forma net income, adjusted pro forma diluted earnings per share, pre-tax, pre-provision earnings, adjusted pre-tax, pre- provision earnings, adjusted pre-tax, pre-provision earnings per share, core noninterest expense, core revenue, core noninterest income, core efficiency ratio (tax-equivalent basis), banking segment core efficiency ratio (tax-equivalent basis), mortgage segment core efficiency ratio (tax-efficiency basis), adjusted mortgage contribution, adjusted return on average assets, equity and tangible common equity, pre-tax, pre-provision return on average assets, equity and tangible common equity, pro forma return on average assets and equity, pro forma adjusted return on average assets, equity and tangible common equity and adjusted pre-tax, pre-provision return on average assets, equity and tangible common equity, adjusted allowance for credit losses, adjusted loans held for investment, and adjusted allowance for credit losses as a percentage of loans held for investment, which excludes the impact of PPP loans. 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 refers to these non‐GAAP measures as adjusted or core measures. The corresponding Earnings Release also presents tangible assets, tangible common equity, tangible book value per common share, tangible common equity to tangible assets, return on tangible common equity, return on average tangible common equity, and adjusted 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 demonstrating 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. You 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. The following tables provide a reconciliation of these measures to the most directly comparable GAAP financial measures. 2

 
3Q 2020 highlights Key highlights Financial results  Closed Franklin Financial Network (“FSB”) merger in August; 3Q 2020 completed systems conversion on October 12th Diluted earnings per share $(0.14)  Converted mobile and online banking platform in July Adjusted diluted earnings per share1 $1.46  Raised $100 million in bank-level subordinated notes with 4.50% Net income ($mm) $(5.6) 1 coupon in August Adjusted net income ($mm) $59.5 Return on average assets (0.24)%  Increased on-balance sheet liquidity to 14.7% of tangible assets from Adjusted return on average assets1 2.58% 14.0% in 2Q 2020; loans HFI / deposits to 79.3% Return on average equity (2.1)%  FSB merger related provisioning increased Adjusted ACL / Gross Adjusted return on average equity1 22.6% Loans HFI (excluding PPP loans) 1 to 2.66% Adjusted pre-tax, pre-provision earnings1 ($mm) $72.3  Adjusted pre-tax, pre-provision earnings1 of $72.3 million, up 25.0% over 2Q 2020, resulting in adjusted pre-tax, pre-provision ROAA1 of Adjusted pre-tax, pre-provision return on average 3.13% 3.13% assets1  Zero rate environment and impact of liquidity and PPP loans results in Adjusted pre-tax, pre-provision return on average 35.1% a net interest margin of 3.28% for 3Q 2020 tangible common equity1 – Contractual yield on loans of 4.36%, down 21 bps from 2Q 2020; Net interest margin 3.28% PPP loans had an 18 bps impact on contractual yield Impact of accretion and nonaccrual interest (bps) 5 Efficiency ratio 71.2% – Cost of total deposits of 0.56%, down 9 bps from 2Q 2020. Core efficiency ratio1 58.2%  1 Total adjusted pre-tax mortgage contribution of $39.5 million in 3Q Tangible common equity / tangible assets1 9.2% 2020  Organic customer deposit growth of $64.7 million, or 4.3% annualized from 2Q 2020 1 Results are non-GAAP financial measures that adjust GAAP reported net income, total assets, equity and other metrics for certain intangibles, income and expense items as outlined in the non-GAAP reconciliation calculations, using a combined marginal income tax rate of 26.06% excluding one-time items. See “Use of non-GAAP financial measures” and the Appendix hereto for a discussion and reconciliation of non-GAAP financial measures. 3

 
Aggressively managing for impact of COVID-19 .No pandemic related reductions in force, and remote work environment has been effective Health and .Branch lobby service reinstated across the footprint with sneeze guards and social distancing methods Safety in place .Back office personnel have begun transition back to the office with social distancing guidelines in place .Loans HFI / Deposits of 79.3% .Monitoring movement of deposits as balances and organic growth remain elevated Liquidity .Approximately $571 million in non-core funding expected to leave the balance sheet by December 31, 2020, consisting of $51 million in non-core customer CDs, $420 million in institutional money market accounts and $100 million in FHLB Advances .Total Risk Based Capital ratio increased to 15.9% as of September 30, 2020 from 13.2% as of June 30, 2020 on the strength of strong core earnings and $100 million subordinated notes raised in August Capital .Increased Allowance for Credit Losses to 2.55% of Loans HFI, or 2.66% adjusted to exclude PPP loans1 .C&D / Total RBC of 90%, under regulatory guidance of 100% a year earlier than expected .Mortgage continues to capitalize on low rate environment, delivered $39.5 million in total mortgage direct contribution in the third quarter and has delivered $81.1 million year-to-date Profitability .Cost of total deposits declined 9 bps from 2Q 2020 to 0.56% .$257 million in time deposits with a weighted average cost of 1.77% mature in 4Q 2020 .Risk-off related paydowns and limited economic activity hampered organic loan growth in 3Q 2020 .Strong pipeline reported by the field; expect return to organic loan growth in 4Q 2020 and 2021 Growth .Lifted out a strong commercial team in Memphis that has been performing well in their first months as part of the FirstBank team ¹ See “Use of non-GAAP financial measures” and the Appendix hereto for a discussion and reconciliation of non-GAAP financial measures. 4

 
Markets have reopened for economic activity Government Guidance on Economic Activity Close Contact Entertainment Map Market Retail Restaurant Gyms Mask Orders Providers Venues Key Open w/ Open w/ Open w/ Open w/ Open w/ Strongly Tennessee1 Distancing Distancing Distancing Distancing Distancing Encouraged Open w/ Open w/ Open w/ Open w/ Strongly Georgia2 50% Capacity Distancing Distancing Distancing Distancing Encouraged Requirement, as Kentucky3 50% Capacity 50% Capacity 50% Capacity 50% Capacity 50% Capacity of September 15 Open w/ Open w/ Open w/ Requirement, as Alabama4 50% Capacity 50% Capacity Distancing Distancing Distancing of October 2 Davidson Requirement, as 75% Capacity 50% Capacity 50% Capacity 50% Capacity 50% Capacity County5 of October 1 Open w/ Open w/ Open w/ Open w/ Open w/ Requirement, as Shelby County6 Distancing Distancing Distancing Distancing Distancing of August 24 FBK County Footprint Reopening Map 1 Source: tn.gov/governor/covid-19. Tennessee Pledge 2 Source: georgia.org/covid19bizguide#other. Georgia’s Statewide Executive Order: Guidelines for Businesses. 3 Source: govstatus.egov.com/ky-healthy-at-work. Healthy at Work - Reopening Kentucky. 4 Source: alabamapublichealth.gov. Coronavirus Disease 2019. 5 Source: asafenashville.org. Roadmap for Reopening Nashville: Phase 2 Guidance and Resources 6 Source: https://insight.livestories.com/s/v2/covid-19-frequently-asked-questions-directives-shelby-county-tn. Health Directive from The Shelby County Public Health Department. 5

 
And many customers are executing on the reopening Color from the field . “Economic activity across our markets continues to pick back up. Residential construction continues to perform very well, and we are seeing continued demand for commercial real estate transactions. We have taken a closer look at some of our sponsor relationships to ensure that we are comfortable with all of our exposures, which has led to some de-risking of the portfolio to the tune of $40 to $50 million over the past two quarters. Consistent with the rest of our footprint, our hotels and restaurants continue to struggle due to the pandemic, but we feel good about the operators and guarantors that we have partnered with.” – Jim Mosby, Nashville North Regional President . “Williamson and Rutherford counties are pretty well re-opened and are seeing a fair amount of economic activity. Residential demand remains very strong for those two counties, and our homebuilder clients continue to have strong years as a result. The systems conversion has gone about as well as could be expected for our clients, and the limited issues that we’ve seen so far have been manageable. Our team is excited to be fully part of the FirstBank family.” – David McDaniel, Nashville South Regional President . “We have our new Knoxville headquarters location opening this quarter. It is a high visibility property in a great part of town and has spurred some chatter in the market. The East Region has gotten some exciting opportunities this year that frankly wouldn’t have been available to us a few years ago as the result of our increased presence in those markets. We’ve also been using this year to take a critical view of the loan portfolio, so in general we feel very good about our current portfolio. However, we do continue to see some softness in the small business market. The consensus out of the East Region is that the first and second quarters of 2021 should be very strong.” – Nathan Hunter, East Tennessee Regional President . “We lifted out a very strong commercial team in Memphis early in the third quarter which at this point is almost fully fleshed out. That group has been doing very well in bringing their customer base over to FirstBank, and we expect pretty strong loan growth out of the team as that process continues over the next few quarters. Across the rest of West Tennessee, activity has been fairly steady. No real credit concerns have been popping up yet. We are also seeing some strong demand for real estate deals as clients choose to park their money there rather than in low yields from financial institutions or what many view as an overvalued stock market.” – David Burden, West Tennessee Regional President . “The community markets are seeing consistent demand for new loan opportunities. Our loan portfolio continues to perform with minimal concerns. The area has experienced an increase in new and existing home prices year over year. Our homebuilder portfolio continues to perform. I have sensed some level of concern from home builders and individuals that were planning on starting new projects relating to the spike in cost of building materials. The area is seeing solid growth in new deposit relationships.” – Troy Martin, South Central Tennessee Area President . “Our customers are doing great, and we don’t have lingering concerns about clients that received deferrals. The economy in North Alabama is very strong right now; lumber, trucking and residential construction are industries that have bounced back particularly well. We are doing well to convert prospects to customers, particularly on the C&I front where we are winning the full loan, deposit and treasury relationship. We should have a strong fourth quarter and see that carrying over into 2021.” – Mike McCrary, North Alabama Area President 6

 
While we continue to work with impacted customers Deferral programs Remaining deferrals by type ($465 million1) . First deferral held no requirements; granting of second $270.6 deferrals are being decided on a case-by-case basis . Standard consumer loan received 2-payment relief; standard commercial loan received 90 day principal and interest forbearance; relationship managers had authority to offer plans that varied from the standard $86.3 $43.3 $35.9 . Working with customers in industries disproportionately $19.0 $9.2 4.2% 16.5% 3.0% 3.8% $0.6 affected by social distancing restrictions, including 11.5% 2.2% hospitality and restaurants C&I 3 CRE C&D Multifamily 1-4 Family 1-4 Family Consumer & HELOC Other Returned to normal / other by type ($1.2 billion2) . Of the $1.6 billion in loans given a deferral, $465 million, or $441.5 $432.5 6.4% of total loans HFI, remain in some sort of deferral as of September 30, 2020 – $116 million are still in the first deferral period – $349 million have been granted additional deferrals $116.8 $112.5 . Approximately 6.1% of loans held in our mortgage servicing $50.9 portfolio were in forbearance as of September 30, 2020 $11.5 $15.5 21.7% 26.3% 9.8% 30.7% 9.9% 2.7% C&I 3 CRE C&D Multifamily 1-4 Family 1-4 Family Consumer & HELOC Other ¹ Balances based on deferral participants’ loan balances outstanding as of September 30, 2020. %’s are deferrals as a percentage of total outstanding balances in each reporting category as of September 30, 2020. 2 Balances based on deferral participants’ as of September 30, 2020 and loan balances outstanding as of September 30, 2020. %’s are deferrals as a percentage of each reporting category as of September 30, 2020.3 Includes owner-occupied CRE, excludes PPP loans. 7

 
And closed an impactful merger Transaction Highlights Recent Nashville News . Closed acquisition on August 15, 2020 . Facebook plans $800 million Gallatin data center – Nashville Post, August 12, 2020 . Successful systems conversion on October 12, 2020 . Amazon announces 2,500 new jobs in Nashville th . Deposit market share increased to 6 in the Nashville MSA – Nashville Business Journal, September 14, 2020 – 1st in Williamson County . Starwood REIT pays record rate for industrial park by – 2nd in Rutherford County Nashville International Airport – Nashville Business Journal, September 17, 2020 – 10th in Davidson County . GM reveals $2B transformation for Spring Hill plant, billed . Added 9 net branches in the Nashville MSA as the biggest expansion in state history – Nashville Business Journal, October 20, 2020 . Added over 30 relationship managers in the Nashville MSA Transaction Assumptions Announcement Close Notes Loan Marks $110 million $101 million Rate and liquidity mark moved significantly between announcement and close Total ACL and Unfunded Commitment $41 million $88 million Impacted by CECL model's ACL requirements on CRE & C&D Non-Strategic Loan Mark $34 million $24 million $22 million remaining at September 30, 2020 on $263 million in principal balances Other Fair Value Loans Marks $35 million $(11) million Heavily impacted by rate cuts between announcement and close Non-Strategic Loans Principal Balances $430 million $342 million $263 million in remaining principal balances as of September 30, 2020. Decline related to organic run-off; exploring bulk sale Core Deposit Intangible $26 million $8 million Heavily impacted by rate cuts between announcement and close Tangible Book Dilution Neutral ~0.5% Accretive Based on actuals to date and estimated remaining merger charges 8

 
Strong liquidity position  Customer deposit base has seen consistent growth in On Balance Sheet Liquidity balances over the past 12 months and remains a stable base of funding and liquidity On-Balance Sheet Liqudity On balance sheet liquidity / tangible assets $1,585.0  Finalizing plan for the remaining non-core funding acquired $1,600.0 $1,400.0 in FSB merger $1,200.0 $988.5 $1,000.0 $773.5 $800.0  $581.4 $550.7 Monitoring movement of recent influx of deposits $600.0 14.0% 14.7% $400.0 12.0% 9.9% $200.0 9.3% $- 3Q19 4Q19 1Q20 2Q20 3Q20 Loans HFI / Customer Deposits Sources of Liquidity 3Q 2020 89.7% 88.7% Current On-Balance Sheet: 85.3% Cash and Equivalents $1,062.4 81.3% 80.1% Unpledged Securities 518.2 Equity Securities 4.4 Total On-Balance Sheet $1,585.0 Available Sources of Liquidity: Brokered CDs and Unsecured Lines $2,961.1 FHLB 1,569.7 Discount Window 1,605.2 Total Available Sources $6,136.0 3Q19 4Q19 1Q20 2Q20 3Q20 9

 
Core deposit franchise provides stable liquidity Total deposits ($mm) Cost of deposits Customer deposits Brokered and internet time deposits Noninterest bearing (%) Cost of total deposits (%) 35.0% 29.8% 30.0% 25.2% $9,094 24.7% 24.5% 24.8% 25.0% $92 20.0% 1.11% $5,953 15.0% 1.02% $5,377 $9,002 0.94% $4,922 $4,935 $15 10.0% $20 $25 $20 0.65% $5,938 5.0% 0.56% $4,897 $4,915 $5,357 0.0% 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 Noninterest bearing deposits1 ($mm) Deposit composition Time 17% Noninterest- bearing Savings checking 4% 25% $2,288 $1,775 Money market Interest-bearing checking $1,336 32% $1,214 $1,208 22% 3Q19 4Q19 1Q20 2Q20 3Q20 47% Checking accounts ¹ Includes mortgage servicing-related deposits of $121.4mm, $92.6mm, $110.1mm, $149.1mm and $177.6mm for the quarters ended September 30, 2019, December 31, 2019, March 31, 2020, June 30, 2020, and September 30, 2020 respectively. 10

 
Well-capitalized for future opportunities Capital position Tangible book value per share3 3Q19 2Q202 3Q201,2 Shareholder’s equity/Assets 12.2% 11.1% 11.3% $20.87 $19.07 TCE/TA² 9.4% 8.7% 9.2% $11.56 $11.58 Common equity 10.8% 11.4% 12.4% tier 1/Risk-weighted assets 3Q16 4Q16 2Q20 3Q20 Tier 1 capital/Risk-weighted 11.3% 11.9% 12.8% Simple capital structure assets Tier 2 ACL Total capital/Risk-weighted 12.0% 13.2% 15.9% 8% assets Subordinated Notes 12% Tier 1 capital /Average 10.1% 9.7% 11.8% assets Trust Preferred 2% Common Equity Tier 1 C&D loans subject to 100% 89% 75% 90% Capital risk-based capital threshold4 78% CRE loans subject to 100% 255% 215% 226% risk-based capital threshold4 Total regulatory capital: $1,3171 mm ¹ Total regulatory capital, FB Financial Corporation. 2Q 2020 calculation is preliminary and subject to change. 2 For regulatory capital purposes, the CECL impact over 2020 and 2021 is gradually phased- in from Common Equity Tier 1 Capital to Tier 2 capital. As of June 30, 2020 and September 30, 2020, respectively, $37.8 million and $55.5 million are being added back to CET 1 and Tier 1 Capital, and $43.7 million and $61.4 million are being taken out of Tier 2 capital. 3 See “Use of non-GAAP financial measures” and the Appendix hereto for a discussion and reconciliation of non-GAAP measures. 4 Risk-based capital at FirstBank as defined in Call Report. 11

 
Balanced portfolio Portfolio mix C&I1 exposure by industry Other Balance Ex. PPP PPP 4% 1-4 family C&I CRE-OO Total % of Total Loans 16% Real Estate Rental and Leasing $ 326.7 $ 157.6 $ 484.3 23.9% $ 11.5 1 C&I Retail Trade 59.3 134.2 193.5 9.6% 23.5 33% 1-4 family HELOC Wholesale Trade 109.9 52.5 162.3 8.0% 24.6 6% Health Care and Social Assistance 70.5 87.7 158.2 7.8% 41.6 Finance and Insurance 140.7 11.5 152.2 7.5% 7.0 Multifamily Manufacturing 88.7 61.8 150.5 7.4% 40.0 2% Other Services (except Public Administration) 21.4 102.5 123.9 6.1% 16.9 Accomodation and Food Services 25.1 86.1 111.2 5.5% 15.3 Construction 46.1 42.6 88.7 4.4% 39.2 C&D Arts, Entertainment and Recreation 21.6 40.6 62.2 3.1% 7.4 16% Transportation and Warehousing 40.0 17.5 57.5 2.8% 11.8 Professional, Scientific and Technical Services 28.2 24.9 53.2 2.6% 29.9 Information 17.7 18.7 36.4 1.8% 3.9 CRE 2 Other 103.8 86.8 190.6 9.4% 38.2 Total $ 1,099.6 $ 925.0 $ 2,024.6 100.0% $ 310.7 23% CRE2 exposure by type C&D exposure by type Other Other Under 3% 21% Retail 15% 19% Self Storage 4% 1-4 Family to be Land-Mobile Healthcare sold Home Park 4% 1-4 Consumer 41% 4% Construction Healthcare Facility Office 5% 6% 19% Multi Family Self Storage 7% 6% Warehouse / Hotel Industrial Commercial Land 17% 8% 24% 1 C&I includes owner-occupied CRE. PPP Loans comprise 13.3% of C&I loans, or 4.3% of gross loans (HFI). 2 Excludes owner-occupied CRE. 12

 
Industries of concern  Industries initially considered to be the most susceptible to Industry exposures / gross loans (HFI) issues associated with the pandemic 8.7%  Credit quality remains satisfactory overall  Optimistic regarding the group’s resiliency and ability to manage through this economy 4.7% 4.7%  Significant level of initial deferrals but steady improvement and return to pre-COVID payment plans 1.9% 1.8% 1.8%  Hotel business continues to face biggest challenges Retail Hotel Healthcare Restaurant Other Leisure Transportation Industries of concern credit quality Industries of concern deferral participants 92.1% $448 $242 $58 4.4% 1.4% 2.0% $9 Pass Watch Special Mention Substandard Remaining First Second Deferrals Returned to Normal Other Deferrals Note: Exposures included will differ from “C&I Exposure by Industry” table on slide 12 due to inclusion of non-owner occupied and other balances as well as additional tangential exposures. 13

 
Retail portfolio – 8.7% of gross loans HFI  64% CRE Non-OO and Other and 36% C&I / CRE-OO Portfolio overview  CRE Non-owner occupied and Other Car, RV, Boat and – Diverse portfolio across the footprint, primarily local ATV Dealers 17% properties, largely smaller strip centers Gas Stations and Convenience Stores – Concentration increased with FSB merger, but generally 5% Pharmacies and drug stores similar portfolio characteristics 2% – Merger did add a ~$35 million mall property, performing Other Retailers < as agreed, no deferral, low loan to value 3% Non-Owner Occ / 13%  Other CRE C&I / CRE-OO portfolio 64% – Largest segment related to Car, RV and Boat Dealers, which has experienced satisfactory post-COVID results – Limited deferrals Credit quality Deferral participants $241 95.4% $17 $8 $- 1.3% 1.7% 1.6% Remaining First Second Deferrals Returned to Normal Other Deferrals Pass Watch Special Mention Substandard Note: Exposures included will differ from “C&I Exposure by Industry” table on slide 12 due to inclusion of non-owner occupied and other balances as well as additional tangential exposures. 14

 
Hotel portfolio – 4.7% of gross loans HFI  Portfolio representative of seasoned operators, good flags and Outstanding by location good locations  Underlying economics trending up as compared to April and May, Other Community Out of Market 5% but remain depressed 4% Other MSA  Portfolio is largely limited and full service properties, which are 8% better models to sustain operations at lower occupancy rates as opposed to luxury properties Bowling Green MSA 6%  Continues to represent the largest segment of deferrals, but Atlanta MSA seeing a trend towards moving back to payments, albeit interest 6% only Nashville MSA 62%  31 notes with $189 million in balances remain in some form of Memphis MSA deferral, while $21 million have returned to normal payments 9%  Summary: Overall credit quality remains satisfactory, but will continue to heavily monitor Credit quality Outstanding by flag Other 81.4% 11% Hilton / IHG / Marriott / Wyndham 72% Best Western / Choice / Red Lion / Red Roof 17% 14.2% 0.9% 3.5% Pass Watch Special Mention Substandard Note: Exposures included will differ from “C&I Exposure by Industry” table on slide 12 due to inclusion of non-owner occupied and other balances as well as additional tangential exposures. 15

 
Healthcare portfolio – 4.7% of loans HFI  Continue to report satisfactory results Portfolio overview Other Healthcare  Operators continue to mange through COVID related and Social Assisted Living / Assistance Nursing Care / protocols 23% Continuing Care 36%  Physician’s offices appear to be generally back to normal after reopening Mental Health and Substance Abuse 11%  Assisted living and skilled nursing operators report operating challenges, but appear to be managing through Offices of  Physicians Concerns related to potential resurgence of the virus 30% Credit quality Deferral participants 94.4% $52 $20 $18 $3 2.7% 0.7% 2.2% Pass Watch Special Mention Substandard Remaining First Second Deferrals Returned to Normal Other Deferrals Note: Exposures included will differ from “C&I Exposure by Industry” table on slide 12 due to inclusion of non-owner occupied and other balances as well as additional tangential exposures. 16

 
Restaurant – 1.9% of gross loans HFI  Majority are owner operators Portfolio overview  Portfolio split roughly evenly between limited service and full service outlets Other C&D 2%  Limited service has seen an ability to change their model, 2% leading to improvement Non-Owner Occ CRE  Full service continues to be challenged with limits imposed 24% on capacity  Overall good trend regarding moving out of deferral status  Continue to monitor  Not included in this exposure disclosure is a diversified food company which also has certain retail outlets, exposure C&I ~$25M; recently moved to substandard, but positive 72% developments Credit quality Deferral participants 89.0% $72 $18 4.0% 5.2% 1.8% $- $2 Pass Watch Special Mention Substandard Remaining First Second Deferrals Returned to Normal Other Deferrals Note: Exposures included will differ from “C&I Exposure by Industry” table on slide 12 due to inclusion of non-owner occupied and other balances as well as additional tangential exposures. 17

 
Other Leisure – 1.8% of gross loans HFI  Mix of industries represented with no concentration Portfolio overview Other <5%  Outcomes related to the virus have varied 12% Marinas Golf Courses and 16% Country Clubs – Marinas and campgrounds have improved 7% RV Parks and Theaters Campgrounds – Theaters and entertainment venues continue to struggle 7% 16%  Modest improvement within certain categories but expect Zoos and Botanical Gardens continued challenging environments until full reopening 8% Sports Teams and Clubs Fitness and Rec Sports Centers 9% Historical Sites 14% 11% Credit quality Deferral participants 97.0% $21 $12 $11 1.6% 0.0% 1.4% $- Pass Watch Special Mention Substandard Remaining First Second Deferrals Returned to Normal Other Deferrals Note: Exposures included will differ from “C&I Exposure by Industry” table on slide 12 due to inclusion of non-owner occupied and other balances as well as additional tangential exposures. 18

 
Transportation and warehousing – 1.8% of gross loans HFI  Portfolio continues to fare well Portfolio overview Other  Trucking overall shows strength Transportation and Warehousing 18%  Warehousing has benefitted from storage and distribution Trucking 37% related to online shopping Consumer Charter Transportation 10%  Air travel and support segment related to engine leasing and not direct commercial passenger related Mini Warehouses and Self Storage 12% Air Travel and Support 23% Credit quality Deferral participants 97.0% $9 $7 1.3% 0.6% 0.8% $- $- Pass Watch Special Mention Substandard Remaining First Second Deferrals Returned to Normal Other Deferrals Note: Exposures included will differ from “C&I Exposure by Industry” table on slide 12 due to inclusion of non-owner occupied and other balances as well as additional tangential exposures. 19

 
Allowance for credit losses overview  Current Expected Credit Loss (CECL) Allowance for Credit Losses (ACL) model utilizes a blend of Moody’s economic scenarios from the third quarter, with resulting key economic data summarized below: FQE, FYE 12/31, 4Q 2020 1Q 2021 2020 2021 2022 2023 2024 GDP (bcw$) $ 18,342.9 $ 18,552.9 $ 18,135.6 $ 18,889.5 $ 19,932.7 $ 20,714.1 $ 21,257.5 Annualized % Change 5.7% 4.7% (4.9%) 4.2% 5.5% 4.0% 2.7% Total Employment (millions) 142.7 143.7 142.5 145.0 149.2 153.4 155.4 Unemployment Rate 8.8% 8.6% 8.7% 8.0% 6.1% 4.5% 4.3% CRE Price Index 249 248.8 249 273.775 312.35 344.275 359.25 NCREIF Property Index: Rate of Return 7.8% 2.2% (4.1%) 3.3% 4.2% 3.2% 2.2%  Components of provision expense this quarter include – $7.0 million in standard quarterly CECL related ACL release – $0.9 million in legacy FBK related release in reserve for unfunded commitments – $52.8 million in initial provision expense related to FSB non-PCD loans (excluded from adjusted earnings) – $10.4 million in initial FSB related reserve on unfunded commitments (excluded from adjusted earnings) ACL / Loans HFI by Category 4Q 2019 2Q 2020 3Q 2020 6.43% 5.37% 4.37% 3.91% 3.50% 3.30% 3.23% 2.87%2.73% 2.51%2.66% 2.48% 1.85% 1.68%1.61% 1.10% 0.71% 0.83%0.66% 0.78% 0.54% 0.50% 0.44% 0.34% Gross Loans HFI (Ex. Commercial & Non-Owner Occ CRE Construction Multifamily 1-4 Family Mortgage 1-4 Family HELOC Consumer & Other PPP) 2 Industrial 3 1Source: Moody’s “July 2020 U.S. Macroeconomic Outlook Baseline and Alternative Scenarios”. 2 See “Use of non-GAAP financial measures” and the Appendix hereto for a discussion and reconciliation of non-GAAP measures. 3 Commercial and Industrial includes $310.7 million in PPP loans, which has a 10 bps impact on September 30, 2020 ACL / Loans HFI. 20

 
Allowance for credit losses overview Adjusted Pre-Tax Earnings Components1 Merger Other Adjusted Related Non-Core GAAP Net Interest Income $ 68,828 $ - $ - $ 68,828 Provision for credit losses (6,988) 52,822 - 45,834 Provision for credit losses on unfunded commitments (862) 10,429 - 9,567 Total Provision Expense (7,850) 63,251 - 55,401 Noninterest Income 100,836 - (3,810) 97,026 Noninterest Expense 97,362 20,730 - 118,092 Pre-Tax Income $ 80,152 $ (83,981) $ (3,810) $ (7,639) 2Q 2020 to 3Q 2020 ACL Bridge $24.8 $0.2 $184.0 $52.8 ( $7.0 ) $113.1 6/30/20 Non-merger related ACL release FSB Related non-PCD ACL FSB Related PCD ACL Net Recoveries 9/30/2020 ¹ See “Use of non-GAAP financial measures” and the Appendix hereto for a discussion and reconciliation of non-GAAP measures. 21

 
Asset quality remains solid Nonperforming ratios Classified loans / loans HFI 1 1,2 NPLs (HFI)/loans (HFI) NPAs/assets 0.77% 0.74% 0.72%0.71% 1.82% 1.82% 1.83% 1.76% 0.68% 0.64% 1.63% 0.62% 0.60% 0.61% 0.47% 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 LLR/loans HFI (excluding PPP loans)3 Net charge-offs (recoveries) /average loans 2.66% 0.30% 2.51% 1.95% 0.19% 0.05% 0.72% 0.71% 0.00% (0.01%) 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 ¹ Adoption of CECL resulted in approximately $5.5 million of former PCI loans being reportable as nonperforming loans in 1Q 2020. 2 Includes acquired excess land and facilities held for sale–see page 14 of the Quarterly Financial Supplement. 3 See “Use of non-GAAP financial measures” and the Appendix hereto for a discussion and reconciliation of non-GAAP measures. 22

 
Core earnings power remains intact Adjusted pre-tax, pre-provision return on average assets¹ 2.87% 2.40% 2.34% 2.25% 2.15% 1.81% 2015 2016 2017 2018 2019 YTD 2020 Drivers of profitability Loans/deposits Net interest margin Noninterest income ($mm) Core efficiency ratio1 Loans excluding HFS Loans HFS 101% $221 95% 95% 4.66% 88% 89% 4.46% 15% 7% 4.34% 73.1% 81% 6% 4.10% 10% 3.97% 70.6% 11% 19% $145 $142 68.1% 3.53% $131 $135 65.8% 65.4% $92 88% 89% 59.8% 86% 79% 70% 69% 2015 2016 2017 2018 2019 3Q20 2015 2016 2017 2018 2019 YTD 2015 2016 2017 2018 2019 YTD 2015 2016 2017 2018 2019 YTD 2020 2020 2020 ¹ See “Use of non-GAAP financial measures” and the Appendix hereto for a discussion and reconciliation of non-GAAP measures. 23

 
Managing net interest margin through falling rates Historical yield and costs Average interest earning assets Yield on loans Cost of deposits NIM 7.0% $10,000 6.0% $8,000 5.0% 4.0% $6,000 3.0% $4,000 2.0% $2,000 1.0% ($mm) assets -- $0 Avg. earning interest Yields and Costs (%) and Costs Yields 3Q19 4Q19 1Q20 2Q20 3Q20 NIM 4.28% 4.12% 3.92% 3.50% 3.28% Impact of accretion and nonaccrual 16 21 13 7 5 interest (bps) Deposit Cost: Cost of MMDA 1.45% 1.29% 1.15% 0.62% 0.66% Cost of customer time 2.13% 2.07% 1.95% 1.78% 1.44% Cost of interest-bearing 1.47% 1.36% 1.25% 0.92% 0.76% Total deposit cost 1.11% 1.02% 0.94% 0.65% 0.56% Loans HFI Yield: Contractual interest 5.50% 5.27% 5.14% 4.57% 4.36% Origination and other 0.30% 0.26% 0.23% 0.24% 0.26% loan fee income Nonaccrual interest 0.02% 0.04% 0.02% 0.01% 0.04% Accretion on 0.19% 0.23% 0.14% 0.08% 0.04% purchased loans Total loan (HFI) yield 6.01% 5.80% 5.53% 4.90% 4.70% ¹ Includes tax-equivalent adjustment 24

 
Mortgage operations overview Highlights Quarterly mortgage production  Record adjusted total mortgage pre-tax contribution1 of $39.5 Consumer Direct million for 3Q 2020 Retail 3Q19 2Q20 3Q20 Wholesale  Mortgage sale margins continue to be elevated due to industry capacity constraints and low interest rates  Mortgage pipeline at the end of 3Q 2020 remains robust at $1.4 billion, as compared to $0.7 billion at the end of 3Q 2019  Mortgage banking income $84.7 million, up 17.3% from 2Q IRLC volume: $1,636mm $2,239mm $2,419mm 2020 and 190.1% from 3Q 2019 IRLC pipeline2: $679mm $1,206mm $1,364mm  Mortgage structure allows team to capitalize on attractive rate Refinance %: 69% 80% 76% environments while weathering downturns Purchase %: 31% 20% 24% Mortgage banking income ($mm) Mark to Market Value and Gain on Sale Margin 3Q19 2Q20 3Q20 Mark to Market Value 3 Gain on Sale Margin Gain on Sale $28.0 $45.5 $76.5 4.32% Fair value $2.3 $34.8 $10.1 3.99% changes 3.84% Servicing 2.88% 2.92% 2.85% $4.0 $5.1 $5.5 Revenue 2.20%2.29% 2.27% Fair value 1.41% $(5.1) ($13.2) ($7.4) MSR changes Total $29.2 $72.2 $84.7 Income 3Q19 4Q19 1Q20 2Q20 3Q20 ¹ See “Use of non-GAAP financial measures” and the Appendix hereto for a discussion and reconciliation of non-GAAP financial measures ² As of the respective period-end 3Defined as pipeline net of hedge plus best efforts divided by hedge weighted volume. 25

 
Managing operating leverage Highlights Core efficiency ratio (tax-equivalent basis)¹  Consolidated 3Q 2020 core efficiency ratio¹ Banking segment of 58.2% driven by record mortgage Consolidated contribution 92.4% Mortgage segment 85.0% 79.5%  Converted Franklin Financial Network in October 2020 66.5% 65.7% 64.5% 63.2% 62.7% 61.1% 61.8% 59.6% 58.2% 57.5%  Record quarterly mortgage contribution in low 48.9% 50.1% rate environment  Expense control remains a focus for 2020 with margin headwinds 3Q19 4Q19 1Q20 2Q20 3Q20 ¹ See “Use of non-GAAP financial measures” and the Appendix hereto for a discussion and reconciliation of non-GAAP measures. 26

 
Appendix 27

 
GAAP reconciliation and use of non-GAAP financial measures Adjusted net income and diluted earnings per share 28

 
GAAP reconciliation and use of non-GAAP financial measures Pre-tax, pre-provision earnings and diluted earnings per share 29

 
GAAP reconciliation and use of non-GAAP financial measures Adjusted pro forma net income and diluted earnings per share* 30

 
GAAP reconciliation and use of non-GAAP financial measures Adjusted pre-tax, pre-provision earnings and diluted earnings per share 31

 
GAAP reconciliation and use of non-GAAP financial measures Core efficiency ratio (tax-equivalent basis) 32

 
GAAP reconciliation and use of non-GAAP financial measures Core efficiency ratio (tax-equivalent basis) 33

 
GAAP reconciliation and use of non-GAAP financial measures Segment core efficiency ratios (tax-equivalent basis) 34

 
GAAP reconciliation and use of non-GAAP financial measures Adjusted mortgage contribution 35

 
GAAP reconciliation and use of non-GAAP financial measures Tangible assets and equity 36

 
GAAP reconciliation and use of non-GAAP financial measures Return on average tangible common equity 37

 
GAAP reconciliation and use of non-GAAP financial measures Adjusted return on average tangible common equity Adjusted return on average assets and equity 38

 
GAAP reconciliation and use of non-GAAP financial measures Adjusted pre-tax, pre-provision return on average tangible common equity Adjusted pre-tax, pre-provision return on average assets and equity 39

 
GAAP reconciliation and use of non-GAAP financial measures Adjusted pro forma return on average assets and equity Adjusted pre-tax, pre-provision return on average assets and equity 40

 
GAAP reconciliation and use of non-GAAP financial measures Adjusted Allowance for Credit Losses to Loans Held for Investment 41