Cover - USD ($)	12 Months Ended
Cover - USD ($)	Dec. 31, 2022	Feb. 14, 2023	Jun. 30, 2022
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-37875
Entity Registrant Name	FB FINANCIAL CORPORATION
Entity Incorporation, State or Country Code	TN
Entity Tax Identification Number	62-1216058
Entity Address, Address Line One	211 Commerce Street
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Nashville
Entity Address, State or Province	TN
Entity Address, Postal Zip Code	37201
City Area Code	615
Local Phone Number	564-1212
Title of 12(b) Security	Common Stock, Par Value $1.00 Per Share
Trading Symbol	FBK
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Reporting Company	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 1,387,074,163
Entity Common Stock, Shares Outstanding		46,631,883
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Entity Central Index Key	0001649749

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2022
Auditor Information [Abstract]
Auditor Name	Crowe LLP
Auditor Location	Franklin, Tennessee
Auditor Firm ID	173

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
ASSETS
Cash and due from banks	$ 259,872	$ 91,333
Federal funds sold and reverse repurchase agreements	210,536	128,087
Interest-bearing deposits in financial institutions	556,644	1,578,320
Cash and cash equivalents	1,027,052	1,797,740
Investments:
Available-for-sale debt securities, at fair value	1,471,186	1,678,525
Equity securities, at fair value	2,990	3,367
Federal Home Loan Bank stock, at cost	58,641	32,217
Loans held for sale (includes $113,240 and $752,223 at fair value, respectively)	139,451	752,223
Loans held for investment	9,298,212	7,604,662
Less: allowance for credit losses	134,192	125,559
Net loans held for investment	9,164,020	7,479,103
Premises and equipment, net	146,316	143,739
Other real estate owned, net	5,794	9,777
Operating lease right-of-use assets	60,043	41,686
Interest receivable	45,684	38,528
Mortgage servicing rights, at fair value	168,365	115,512
Goodwill	242,561	242,561
Core deposit and other intangibles, net	12,368	16,953
Bank-owned life insurance	75,329	73,519
Other assets	227,956	172,236
Total assets	12,847,756	12,597,686
Deposits
Noninterest-bearing	2,676,631	2,740,214
Interest-bearing checking	3,059,984	3,418,666
Money market and savings	3,697,245	3,546,936
Customer time deposits	1,420,131	1,103,594
Brokered and internet time deposits	1,843	27,487
Total deposits	10,855,834	10,836,897
Borrowings	415,677	171,778
Operating lease liabilities	69,754	46,367
Accrued expenses and other liabilities	180,973	109,949
Total liabilities	11,522,238	11,164,991
Commitments and contingencies (Note 16)
SHAREHOLDERS' EQUITY
Common stock, $1 par value per share; 75,000,000 shares authorized; 46,737,912 and 47,549,241 shares issued and outstanding, respectively	46,738	47,549
Additional paid-in capital	861,588	892,529
Retained earnings	586,532	486,666
Accumulated other comprehensive (loss) income, net	(169,433)	5,858
Total FB Financial Corporation common shareholders' equity	1,325,425	1,432,602
Noncontrolling interest	93	93
Total equity	1,325,518	1,432,695
Total liabilities and shareholders' equity	$ 12,847,756	$ 12,597,686

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Fair value of loan held for sale	$ 139,451	$ 752,223
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized (in shares)	75,000,000	75,000,000
Common stock, shares issued (in shares)	46,737,912	47,549,241
Common stock, shares outstanding (in shares)	46,737,912	47,549,241
Fair Value
Fair value of loan held for sale	$ 113,240	$ 752,223

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Interest income:
Interest and fees on loans	$ 436,363	$ 359,262	$ 294,596
Interest on securities
Taxable	25,469	15,186	10,267
Tax-exempt	7,332	7,657	7,076
Other	12,258	2,893	2,705
Total interest income	481,422	384,998	314,644
Interest expense:
Interest expense on deposits	56,642	30,189	42,859
Interest expense on borrowings	12,545	7,439	6,127
Total interest expense	69,187	37,628	48,986
Net interest income	412,235	347,370	265,658
Provision for credit losses	10,393	(38,995)	94,606
Provision for credit losses on unfunded commitments	8,589	(1,998)	13,361
Net interest income after provisions for credit losses	393,253	388,363	157,691
Noninterest income:
(Loss) gain from securities, net	(376)	324	1,631
(Loss) gain on sales or write-downs of other real estate owned	(114)	2,504	(1,491)
(Loss) gain from other assets	(151)	323	(90)
Other income	5,213	19,047	15,322
Total noninterest income	114,667	228,255	301,855
Noninterest expenses:
Salaries, commissions and employee benefits	211,491	248,318	233,768
Occupancy and equipment expense	23,562	22,733	18,979
Legal and professional fees	15,028	9,161	7,654
Data processing	9,315	9,987	11,390
Merger costs	0	0	34,879
Amortization of core deposit and other intangibles	4,585	5,473	5,323
Advertising	11,208	13,921	10,062
Mortgage restructuring expense	12,458	0	0
Other expense	60,699	63,974	55,030
Total noninterest expense	348,346	373,567	377,085
Income before income taxes	159,574	243,051	82,461
Income tax expense	35,003	52,750	18,832
Net income applicable to FB Financial Corporation and noncontrolling interest	124,571	190,301	63,629
Net income applicable to noncontrolling interest	16	16	8
Net income applicable to FB Financial Corporation	$ 124,555	$ 190,285	$ 63,621
Earnings per common share
Basic (in dollars per share)	$ 2.64	$ 4.01	$ 1.69
Diluted (in dollars per share)	$ 2.64	$ 3.97	$ 1.67
Mortgage banking income
Noninterest income:
Mortgage banking income, service charges on deposit accounts, ATM and interchange fees, investment services and trust income	$ 73,580	$ 167,565	$ 255,328
Service charges on deposit accounts
Noninterest income:
Mortgage banking income, service charges on deposit accounts, ATM and interchange fees, investment services and trust income	12,049	10,034	9,160
ATM and interchange fees
Noninterest income:
Mortgage banking income, service charges on deposit accounts, ATM and interchange fees, investment services and trust income	15,600	19,900	14,915
Investment services and trust income
Noninterest income:
Mortgage banking income, service charges on deposit accounts, ATM and interchange fees, investment services and trust income	$ 8,866	$ 8,558	$ 7,080

Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 124,571	$ 190,301	$ 63,629
Other comprehensive (loss) income, net of tax:
Net change in unrealized (loss) gain in available-for-sale securities, net of tax (benefits) expenses of $(62,316), $(7,224), and $5,781	(176,798)	(22,475)	18,430
Reclassification adjustment for gain on sale of securities included in net income, net of tax expenses of $—, $33 and $348	(1)	(93)	(987)
Net change in unrealized gain (loss) in hedging activities, net of tax expenses (benefits) of $532, $293 and $(363)	1,508	831	(1,031)
Reclassification adjustment for gain on hedging activities, net of tax expenses of $—, $— and $337	0	0	(955)
Total other comprehensive (loss) income, net of tax	(175,291)	(21,737)
Comprehensive (loss) income applicable to FB Financial Corporation and noncontrolling interest	(50,720)	168,564	79,086
Comprehensive income applicable to noncontrolling interest	16	16	8
Comprehensive (loss) income applicable to FB Financial Corporation	$ (50,736)	$ 168,548	$ 79,078

Consolidated Statements of Comprehensive (Loss) Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statement of Comprehensive Income [Abstract]
Net tax (benefits) expenses on net change in unrealized gain (loss) on available-for-sale securities	$ (62,316)	$ (7,224)	$ 5,781
Net tax expense (benefit) on reclassification adjustment for gain on sale of securities included in net income	0	(33)	(348)
Net tax expenses (benefits) recognized on net change in unrealized gain (loss) on hedging activities	532	293	(363)
Net tax expenses on reclassification adjustment on gain on hedging activities	$ 0	$ 0	$ (337)

Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Adjusted balance	FNB Financial Corp.	Franklin Financial Network, Inc.	Total common shareholders' equity	Total common shareholders' equity Cumulative Effect, Period of Adoption, Adjustment	Total common shareholders' equity Adjusted balance	Total common shareholders' equity FNB Financial Corp.	Total common shareholders' equity Franklin Financial Network, Inc.	Common stock	Common stock Adjusted balance	Common stock FNB Financial Corp.	Common stock Franklin Financial Network, Inc.	Additional paid-in capital	Additional paid-in capital Adjusted balance	Additional paid-in capital FNB Financial Corp.	Additional paid-in capital Franklin Financial Network, Inc.	Retained earnings	Retained earnings Cumulative Effect, Period of Adoption, Adjustment	Retained earnings Adjusted balance	Accumulated other comprehensive income (loss), net	Accumulated other comprehensive income (loss), net Adjusted balance	Noncontrolling interest	Noncontrolling interest Adjusted balance	Noncontrolling interest Franklin Financial Network, Inc.
Beginning balance at Dec. 31, 2019	$ 762,329	$ (25,018)	$ 737,311			$ 762,329	$ (25,018)	$ 737,311			$ 31,034	$ 31,034			$ 425,633	$ 425,633			$ 293,524	$ (25,018)	$ 268,506	$ 12,138	$ 12,138	$ 0	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to FB Financial Corporation and noncontrolling interest	63,629					63,621													63,621					8
Other comprehensive income (loss), net of taxes	15,457					15,457																15,457
Common stock issued in connection with acquisitions, net of registration costs (See Note 2)				$ 34,847	$ 444,966				$ 34,847	$ 444,873			$ 955	$ 15,058			$ 33,892	$ 429,815								$ 93
Stock based compensation expense	10,214					10,214					22				10,192
Restricted stock units vested and distributed, net of shares withheld	(1,510)					(1,510)					123				(1,633)
Shares issued under employee stock purchase program	978					978					30				948
Dividends declared	(14,502)					(14,502)													(14,502)
Noncontrolling interest distribution	(8)																							(8)
Ending balance at Dec. 31, 2020	1,291,382					1,291,289					47,222				898,847				317,625			27,595		93
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to FB Financial Corporation and noncontrolling interest	190,301					190,285													190,285					16
Other comprehensive income (loss), net of taxes	(21,737)					(21,737)																(21,737)
Repurchase of common stock	(7,595)					(7,595)					(179)				(7,416)
Stock based compensation expense	10,282					10,282					7				10,275
Restricted stock units vested and distributed, net of shares withheld	(10,158)					(10,158)					462				(10,620)
Shares issued under employee stock purchase program	1,480					1,480					37				1,443
Dividends declared	(21,244)					(21,244)													(21,244)
Noncontrolling interest distribution	(16)																							(16)
Ending balance at Dec. 31, 2021	1,432,695					1,432,602					47,549				892,529				486,666			5,858		93
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to FB Financial Corporation and noncontrolling interest	124,571					124,555													124,555					16
Other comprehensive income (loss), net of taxes	(175,291)					(175,291)																(175,291)
Repurchase of common stock	(39,979)					(39,979)					(997)				(38,982)
Stock based compensation expense	9,857					9,857					3				9,854
Restricted stock units vested and distributed, net of shares withheld	(2,842)					(2,842)					156				(2,998)
Shares issued under employee stock purchase program	1,212					1,212					27				1,185
Dividends declared	(24,689)					(24,689)													(24,689)
Noncontrolling interest distribution	(16)																							(16)
Ending balance at Dec. 31, 2022	$ 1,325,518					$ 1,325,425					$ 46,738				$ 861,588				$ 586,532			$ (169,433)		$ 93

Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statement of Stockholders' Equity [Abstract]
Dividends declared (in dollars per share)	$ 0.52	$ 0.44	$ 0.36

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash flows from operating activities:
Net income attributable to FB Financial Corporation and noncontrolling interest	$ 124,571	$ 190,301	$ 63,629
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization of fixed assets and software	8,017	8,416	7,536
Amortization of core deposit and other intangibles	4,585	5,473	5,323
Capitalization of mortgage servicing rights	(20,809)	(39,018)	(47,025)
Net change in fair value of mortgage servicing rights	(32,044)	3,503	47,660
Stock-based compensation expense	9,857	10,282	10,214
Provision for credit losses	10,393	(38,995)	94,606
Provision for credit losses on unfunded commitments	8,589	(1,998)	13,361
Provision for mortgage loan repurchases	(2,989)	(766)	2,607
Amortization of premiums and accretion of discounts on acquired loans, net	1,020	853	(3,788)
Amortization of premiums and accretion of discounts on securities, net	6,589	8,777	7,382
Loss (gain) from securities, net	376	(324)	(1,631)
Originations of loans held for sale	(2,403,476)	(6,300,892)	(6,650,258)
Repurchases of loans held for sale	(194)	(487)	0
Proceeds from sale of loans held for sale	3,067,204	6,387,110	6,487,809
Gain on sale and change in fair value of loans held for sale	(47,783)	(161,964)	(270,802)
Net loss (gain) or write-downs of other real estate owned	114	(2,504)	1,491
Loss (gain) on other assets	151	(323)	90
Provision for deferred income taxes	12,552	30,770	(25,530)
Earnings on bank-owned life insurance	(1,452)	(1,542)	(1,556)
Changes in:
Operating leases	5,030	(969)	2,664
Other assets and interest receivable	(17,222)	59,283	(57,316)
Accrued expenses and other liabilities	56,247	(100,108)	43,532
Net cash provided by (used in) operating activities	789,326	54,878	(270,002)
Activity in available-for-sale securities:
Sales	1,218	8,855	146,494
Maturities, prepayments and calls	204,748	296,256	220,549
Purchases	(242,889)	(847,212)	(424,971)
Net change in loans	(1,719,652)	(457,042)	4,383
Net change in commercial loans held for sale	43,676	147,276	114,031
Sales of FHLB stock	0	4,294	0
Purchases of FHLB stock	(26,424)	(5,279)	(515)
Purchases of premises and equipment	(10,629)	(6,102)	(5,934)
Proceeds from the sale of premises and equipment	875	0	0
Proceeds from the sale of other real estate owned and other assets	4,959	9,396	6,937
Proceeds from bank-owned life insurance	0	0	715
Net cash acquired in business combinations	0	0	248,447
Net cash (used in) provided by investing activities	(1,744,118)	(849,558)	310,136
Cash flows from financing activities:
Net (decrease) increase in demand deposits	(262,109)	1,685,033	1,519,868
Net increase (decrease) in time deposits	290,893	(306,173)	(328,035)
Net increase in securities sold under agreements to repurchase and federal funds purchased	46,229	8,517	5,262
Payments on FHLB advances	0	0	(250,000)
Net increase in short-term FHLB advances	175,000	0	0
Issuance of subordinated debt, net of issuance costs	0	0	98,189
Payments on subordinated debt	0	(60,000)	0
(Payments on) proceeds from other borrowings	0	(15,000)	15,000
Share based compensation withholding payments	(2,842)	(10,158)	(1,510)
Net proceeds from sale of common stock under employee stock purchase program	1,212	1,480	978
Repurchase of common stock	(39,979)	(7,595)	0
Dividends paid on common stock	(24,503)	(20,866)	(14,177)
Dividend equivalent payments made upon vesting of equity compensation	(168)	(717)	(87)
Noncontrolling interest distribution	(16)	(16)	(8)
Net cash provided by financing activities	184,104	1,274,522	1,045,083
Net change in cash and cash equivalents	(770,688)	479,842	1,085,217
Cash and cash equivalents at beginning of the period	1,797,740	1,317,898	232,681
Cash and cash equivalents at end of the period	1,027,052	1,797,740	1,317,898
Supplemental cash flow information:
Interest paid	63,701	41,238	48,679
Taxes paid	906	61,693	20,419
Supplemental noncash disclosures:
Transfers from loans to other real estate owned	1,437	5,262	2,746
Transfers from other real estate owned to premises and equipment	351	0	841
Loans provided for sales of other real estate owned	0	704	305
Transfers from loans to loans held for sale	46,364	10,408	11,483
Transfers from loans held for sale to loans	24,479	86,315	55,766
Rebooked GNMA loans under optional repurchase program	26,211	0	0
Stock consideration paid in business combination	0	0	480,867
Dividends declared not paid on restricted stock units	222	400	238
Decrease to retained earnings for adoption of ASU 2016-13	0	0	25,018
Right-of-use assets obtained in exchange for operating lease liabilities	$ 25,399	$ 970	$ 2,393

Basis of Presentation

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Basis of Presentation

Basis of presentation:

(A) Organization and Company overview:

FB Financial Corporation is a financial holding company headquartered in Nashville, Tennessee. The consolidated financial statements include the Company and its wholly-owned subsidiaries, FirstBank (the "Bank") and FirstBank Risk Management, Inc. The Bank operates through 82 full-service branches throughout Tennessee, Kentucky, Alabama and North Georgia, and a national mortgage business with office locations across the Southeast, which primarily originates mortgage loans to be sold in the secondary market.

The Bank is subject to competition from other financial services companies and financial institutions. The Company and the Bank are also subject to the regulations of certain federal and state agencies and undergo periodic examinations by those regulatory authorities. See "Supervision and regulation" in Part I, Item 1, for more details regarding regulatory oversight.

(B) Basis of presentation:

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and general banking industry. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and the reported results of operations for the year then ended. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for credit losses and the determination of any impairment of goodwill or intangible assets.

The consolidated financial statements include the accounts of the Company, FBRM, the Bank, and its’ wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation without any impact on the reported amounts of net income or shareholders’ equity.

Certain accounting policies identified below were modified during the year ended December 31, 2022. Please refer to the Company's audited financial statements on Form 10-K filed on February 25, 2022 for accounting policies in place as of December 31, 2021.

(C) Cash flows:

For purposes of reporting consolidated cash flows, cash and cash equivalents include cash on hand, amounts due from banks, federal funds sold and interest earning deposits in other financial institutions with maturities of less than 90 days at the date of purchase. These amounts are reported in the consolidated balance sheets caption “Cash and cash equivalents.” Net cash flows are reported for loans held for investment, deposits and short-term borrowings.

(D) Cash and cash equivalents:

The Company considers all highly liquid unrestricted investments with a maturity of three months or less when purchased to be cash equivalents. This includes cash, federal funds sold, reverse repurchase agreements and interest-bearing deposits in other financial institutions.

(E) Investment securities:

Debt securities are classified as held to maturity and carried at amortized cost, excluding accrued interest, when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available-for-sale when they might be sold before maturity. Available-for-sale debt securities are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of applicable taxes. Unrealized losses resulting from credit losses for available-for-sale debt securities are recognized in earnings as a provision for credit losses. Unrealized losses that do not result from credit losses are excluded from earnings and reported in equity as accumulated other comprehensive income, net of applicable taxes. Accrued interest receivable is separated from other components of amortized cost and presented separately on the consolidated balance sheets.

Equity securities with readily determinable market values are carried at fair value on the balance sheet with any periodic changes in value made through adjustments to the statement of income. Equity securities without readily determinable market values are carried at cost less impairment and included in other assets on the consolidated balance sheets.

Interest income includes the amortization and accretion of purchase premium and discount. Premiums and discounts on securities are amortized on the level-yield method anticipating prepayments based upon the prior three month average monthly prepayments when available. The sale and purchase of investment securities are recognized on a trade date basis with gains and losses on sales being determined using the specific identification method.

The Company evaluates available-for-sale securities for expected credit losses at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. For securities in an unrealized loss position, consideration is given to the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing an issuer’s financial condition, the Company considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition.

When credit losses are expected to occur, the amount of the expected credit loss recognized in earnings depends on the Company's intention to sell the security or if it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If the Company intends to sell the security or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the expected credit loss recognized in earnings is equal to the entire difference between its amortized cost basis and its fair value at the date it was determined to be impaired due to credit losses or other factors. The previous amortized cost basis less the impairment recognized in earnings becomes the new amortized cost basis of the investment.

However, if the Company does not intend to sell the security and it is not more likely than not to be required to sell the security before recovery of its amortized cost basis, the difference between the amortized cost and the fair value is separated into the amount representing the credit loss and the amount related to all other factors. If the Company determines a decline in fair value below the amortized cost basis of an available-for-sale investment security has resulted from credit related factors, the Company records a credit loss through an allowance for credit losses. The allowance for credit losses is limited by the amount that the fair value is less than amortized cost. The amount of the allowance for credit losses is determined based on the present value of cash flows expected to be collected and is recognized as a charge to earnings. The amount of the impairment related to other, non-credit related, factors is recognized in other comprehensive income, net of applicable taxes.

The Company did not record any provision for credit losses for its available-for-sale debt securities during the years ended December 31, 2022 or 2021, as the majority of the investment portfolio is government guaranteed and declines in fair value below amortized cost were determined to be non-credit related.

(F) Federal Home Loan Bank stock:

The Bank accounts for its investments in FHLB stock in accordance with FASB ASC Topic 942-325 "Financial Services-Depository and Lending-Investments-Other." FHLB stock does not have a readily determinable fair value because its ownership is restricted and lacks a market. FHLB stock is carried at cost and evaluated for impairment.

(G) Loans held for sale:

Mortgage loans held for sale

Mortgage loans originated and intended for sale in the secondary market are carried at fair value as permitted under the guidance in ASC 825, “Financial Instruments” (“ASC 825”). The change in fair value of both mortgage loans held for sale and the related derivative instruments are recorded in “Mortgage banking income” in the Consolidated Statements of Income. Gains and losses on sale are recognized at the time the loan is closed. Pass through origination costs and related loan fees are also included in “Mortgage banking income”.

Periodically, the Company transfers mortgage loans originated for sale in the secondary markets into the loan HFI portfolio based on current market conditions, the overall secondary marketability and status of the loan. During the years ended December 31, 2022, 2021 and 2020, the Company transferred $24,479, $86,315 and $55,766, respectively, of residential mortgage loans into its loans held for investment portfolio. The loans are transferred into the portfolio at fair value at the date of transfer. Additionally, occasionally the Company will transfer loans from the held for investment portfolio into loans held for sale. At the time of the transfer, loans are marked to fair value through the allowance for credit losses and reclassified to loans held for sale. During the years ended December 31, 2021 and 2020, the Company transferred $1,188 and $2,116, respectively, from the portfolio to loans held for sale, excluding GNMA repurchases discussed below. There were no such transfers during the year ended December 31, 2022.

The Company sells mortgage loans originated for sale on the secondary market to GNMA and retains servicing rights after sale. Under the GNMA optional repurchase program, financial institutions are permitted to buy back individual delinquent mortgage loans that meet certain criteria from the securitized loan pool for which the institution provides servicing. At the servicer’s option and without GNMA’s prior authorization, the servicer may repurchase such a delinquent loan for an amount equal to 100 percent of the remaining principal balance of the loan. These loans are held for investment until certain performance criteria is met and they meet held for sale criteria. During the years ended December 31, 2022, 2021, and 2020, the Company repurchased GNMA loans of $20,593, $40,417, and $10,586, respectively, into loans held for investment. The Company transferred $46,364, $9,220 and $9,367 during the years ended December 31, 2022, 2021, and 2020, respectively, of these repurchased loans from loans held for investment to loans held for sale.

Under FASB ASC Topic 860, “Transfers and Servicing,” this buy-back option is considered a conditional option until the delinquency criteria are met, at which time the option becomes unconditional. When the Company is deemed to have regained effective control over these loans under the unconditional buy-back option, the loans can no longer be reported as sold and must be recorded on the balance sheet, regardless of whether the Company intends to exercise the buy-back option if the buyback options provides the transferor a more-than-trivial benefit. During the year ended December 31, 2022, the Company identified a more-than-trivial benefit associated with these loans and rebooked them onto the consolidated balance sheets, which also aligns with developing industry best practice. As of December 31, 2022, the Company had $26,211 in these optional rights to repurchase delinquent GNMA loans. There were no such loans identified with a more-than-trivial benefit as of December 31, 2021. The fair value option election does not apply to the GNMA optional repurchase loans which do not meet the requirements under FASB ASC Topic 825. These loans are reported at current unpaid principal balance in HFS on the consolidated balance sheets with the offsetting liability being reported in borrowings. These are considered nonperforming assets as the Company does not earn any interest on the unexercised option to repurchase these loans.

Commercial loan held for sale

During the year ended December 31, 2020, the Company acquired a portfolio of commercial loans, including shared national credits and institutional healthcare loans, as part of the its merger with Franklin Financial Network, Inc. and its wholly-owned subsidiaries (collectively, "Franklin") that the Company accounts for as HFS under the fair value option. As of December 31, 2022 and 2021, the fair value of these loans included in loans held for sale at fair value on the consolidated balances sheets amounted to $30,490 and $79,299, respectively. During the years ended December 31, 2022, 2021, and 2020, net (losses) gains of $(5,133), $11,172, and $3,228, respectively, from changes in fair value of these loans was included in other noninterest income on the consolidated statements of income.

(H) Loans (excluding purchased credit deteriorated loans):

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are stated at amortized cost. Amortized cost is equal to the principal amount outstanding less any purchase accounting discount or premium net of any accretion or amortization recognized to date. Interest on loans is recognized as income by using the simple interest method on daily balances of the principal amount outstanding plus any accretion or amortization of purchase accounting discounts.

Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. Accrual of interest is discontinued on loans past due 90 days or more unless the credit is well secured and in the process of collection. Also, a loan may be placed on nonaccrual status prior to becoming past due 90 days if management believes, after considering economic and business conditions and collection efforts, that the borrower’s financial condition is such that collection of principal or interest is doubtful. The decision to place a loan on nonaccrual status prior to becoming past due 90 days is based on an evaluation of the borrower’s financial condition, collateral liquidation value, economic and business conditions and other factors that affect the borrower’s ability to pay. When a loan is placed on nonaccrual status, the accrued but unpaid interest is charged against current period operations. Thereafter, interest on nonaccrual loans is recognized only as received if future collection of principal is probable. If the collectability of outstanding principal is doubtful, interest received is applied as a reduction of principal. A loan may be restored to accrual status when principal and interest are no longer past due or it otherwise becomes both well secured and collectability is reasonably assured. The Company monitors the level of accrued interest receivable on nonperforming loans, however an allowance for credit losses was not required as of December 31, 2022 and 2021.

(I) Allowance for credit losses:

The allowance for credit losses represents the portion of the loan's amortized cost basis that the Company does not expect to collect due to credit losses over the loan's life, considering past events, current conditions, and reasonable and supportable forecasts of future economic conditions considering macroeconomic forecasts. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for credit losses is based on the loan's amortized cost basis, excluding accrued interest receivable, as the Company promptly charges off uncollectible accrued interest receivable. Management’s determination of the appropriateness of the allowance is based on periodic evaluation of the loan portfolio, lending-related commitments and other relevant factors, including macroeconomic forecasts and historical loss rates. In future quarters, the Company may update information and forecasts that may cause significant changes in the estimate in those future quarters. See Note 5, "Loans and allowance for credit losses" for additional details related to the Company's specific calculation methodology.

The allowance for credit losses is the Company’s best estimate. Actual losses may differ from the December 31, 2022 allowance for credit loss as the CECL estimate is sensitive to economic forecasts and management judgment.

The following portfolio segments have been identified:

Commercial and industrial loans. The Company provides a mix of variable and fixed rate commercial and industrial loans. Commercial and industrial loans are typically made to small- and medium-sized manufacturing, wholesale, retail and service businesses for working capital and operating needs and business expansions, including the purchase of capital equipment and loans made to farmers relating to their operations. This category also includes loans secured by manufactured housing receivables. Commercial and industrial loans generally include lines of credit and loans with maturities of five years or less. Commercial and industrial loans are generally made with operating cash flows as the primary source of repayment, but may also include collateralization by inventory, accounts receivable, equipment and personal guarantees.

Construction loans. Construction loans include commercial construction, land acquisition and land development loans and single-family interim construction loans to small- and medium-sized businesses and individuals. These loans are generally secured by the land or the real property being built and are made based on the Company's assessment of the value of the property on an as-completed basis. These loans can carry risk of repayment when projects incur cost overruns, have an increase in the price of building materials, encounter zoning and environmental issues, or encounter other factors that may affect the completion of a project on time and on budget. Additionally, repayment risk may be negatively impacted if the market experiences a deterioration in the value of real estate.

1-4 family mortgage loans. The Company’s residential real estate 1-4 family mortgage loans are primarily made with respect to and secured by single family homes, including manufactured homes with real estate, which are both owner-occupied and investor owned. The Company's future origination volume could be impacted by any deterioration of housing values in the Company's markets and increased unemployment and deteriorating market values of real estate.

Residential line of credit loans. The Company’s residential line of credit loans are primarily revolving, open-end lines of credit secured by 1-4 residential properties. The Company intends to continue to make residential line of credit loans if housing values in the Company's markets do not deteriorate from current prevailing levels and we are able to make such loans consistent with the Company's current credit and underwriting standards. Residential line of credit loans may also be affected by unemployment or underemployment and deteriorating market values of real estate.

Multi-family residential loans. The Company’s multi-family residential loans are primarily secured by multi-family properties, such as apartments and condominium buildings. The value of these loans and growth in this area of our portfolio may be affected by unemployment or underemployment and deteriorating market values of real estate.

Commercial real estate owner-occupied loans. The Company’s commercial real estate owner-occupied loans include loans to finance commercial real estate owner occupied properties for various purposes including use as offices, warehouses, production facilities, health care facilities, retail centers, restaurants, churches and agricultural based facilities. Commercial real estate owner-occupied loans are typically repaid through the ongoing business operations of the borrower, and hence are dependent on the success of the underlying business for repayment and are more exposed to general economic conditions.

Commercial real estate non-owner occupied loans. The Company’s commercial real estate non-owner occupied loans include loans to finance commercial real estate non-owner occupied investment properties for various purposes including use as offices, warehouses, health care facilities, hotels, mixed-use residential/commercial, manufactured housing

communities, retail centers, multifamily properties, assisted living facilities and agricultural based facilities. Commercial real estate non-owner occupied loans are typically repaid with the funds received from the sale of the completed property or rental proceeds from such property, and are therefore more sensitive to adverse conditions in the real estate market, which can also be affected by general economic conditions.

Consumer and other loans. The Company’s consumer and other loans include loans to individuals for personal, family and household purposes, including car, boat and other recreational vehicle loans, manufactured homes (without real estate) and personal lines of credit. Consumer loans are generally secured by vehicles and other household goods. The collateral securing consumer loans may depreciate over time. The company seeks to minimize these risks through its underwriting standards. Other loans also include loans to states and political subdivisions in the U.S. These loans are generally subject to the risk that the borrowing municipality or political subdivision may lose a significant portion of its tax base or that the project for which the loan was made may produce inadequate revenue. None of these categories of loans represent a significant portion of the Company's loan portfolio.

(J) Business combinations, accounting for acquired loans with credit deterioration and off-balance sheet financial instruments:

Business combinations are accounted for by applying the acquisition method in accordance with Accounting Standards Codification 805, “Business Combinations” (“ASC 805”). Under the acquisition method, identifiable assets acquired and liabilities assumed and any non-controlling interest in the acquiree at the acquisition date are measured at their fair values as of that date. Any excess of the purchase price over fair value of net assets acquired is recorded as goodwill. To the extent the fair value of net assets acquired, including any other identifiable intangible assets, exceed the purchase price, a bargain purchase gain is recognized. Results of operations of acquired entities are included in the consolidated statements of income from the date of acquisition.

Loans acquired in business combinations with evidence of more-than-insignificant credit deterioration since origination are considered to be Purchased Credit Deteriorated. The Company developed multiple criteria to assess the presence of more–than–insignificant credit deterioration in acquired loans, mainly focused on changes in credit quality and payment status. While general criteria have been established, each acquisition will vary in its specific facts and circumstances and the Company will apply judgment around PCD identification for each individual acquisition based on their unique portfolio mix and risks identified.

The Company adopted ASC 326 on January 1, 2020 using the prospective transition approach for loans previously classified as purchased credit impaired and accounted for under ASC 310-30. In accordance with the standard, management did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption and all PCI loans were transitioned to PCD loans upon adoption. Under PCD accounting, the amount of expected credit losses as of the acquisition date is added to the purchase price of the PCD loan. This establishes the amortized cost basis of the PCD loan. The difference between the unpaid principal balance of the PCD loan and the amortized cost basis of the PCD loan as of the acquisition date is the non-credit discount. Interest income for a PCD loan is recognized by accreting the amortized cost basis of the PCD loan to its contractual cash flows. The discount related to estimated credit losses on acquisition recorded as an allowance for credit losses will not be accreted into interest income. Only the noncredit-related discount will be accreted into interest income and subsequent adjustments to expected credit losses will flow through the provision for credit losses on the income statement.

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded, unless considered derivatives.

For loan commitments that are not accounted for as derivatives and when the obligation is not unconditionally cancellable by the Company, the Company applies the CECL methodology to estimate the expected credit loss on off-balance-sheet commitments. The estimate of expected credit losses for off-balance-sheet credit commitments is recognized as a liability. When the loan is funded, an allowance for expected credit losses is estimated for that loan using the CECL methodology, and the liability for off-balance-sheet commitments is reduced. When applying the CECL methodology to estimate the expected credit loss, the Company considers the likelihood that funding will occur, the contractual period of exposure to credit loss, the risk of loss, historical loss experience, and current conditions along with expectations of future economic conditions.

(K) Premises and equipment:

Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Provisions for depreciation are computed principally on the straight-line method and are charged to occupancy expense over the estimated useful lives of the assets. Maintenance agreements are amortized to expense over the period of time covered by the agreement. Costs of major additions, replacements or improvements are capitalized while expenditures for maintenance and repairs are charged to expense as incurred.

For financial statement purposes, the estimated useful life for premises is the lesser of the remaining useful life per third party appraisal or forty years, for furniture, fixtures and equipment the estimated useful life is three to ten years, and for leasehold improvements the estimated useful life is the lesser of ten years or the term of the lease.

(L) Other real estate owned:

Real estate acquired through, or in lieu of, loan foreclosure is initially recorded at fair value less the estimated cost to sell at the date of foreclosure, which may establish a new cost basis. Other real estate owned may also include excess facilities and properties held for sale as described in Note 7, "Other real estate owned". Physical possession of residential real estate property collateralizing a consumer mortgage loan occurs when legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan. After initial measurement, valuations are periodically performed by management and the asset is carried at the lower of carrying amount or fair value less costs to sell. Revenue and expenses from operations are included in other noninterest income and noninterest expenses. Losses due to the valuation of the property are included in gain (loss) on sales or write-downs of other real estate owned.

(M) Leases:

The Company leases certain banking, mortgage and operations locations. The Company records leases on the balance sheet in the form of a lease liability for the present value of future minimum payments under the lease terms and a right-of-use asset equal to the lease liability adjusted for items such as deferred or prepaid rent, incentive liabilities, leasehold intangibles and any impairment of the right-of-use asset. In determining whether a contract contains a lease, management conducts an analysis at lease inception to ensure an asset was specifically identified and the Company has control of use of the asset. The Company considers a lease to be a finance lease if future minimum lease payments amount to greater than 90% of the asset's fair value or if the lease term is equal to or greater than 75% of the asset's estimated economic useful life. The Company does not record leases on the consolidated balance sheets that are classified as short term (less than one year). Additionally, the Company has not recorded equipment leases on the consolidated balance sheets as these are not material to the Company.

At lease inception, the Company determines the lease term by adding together the minimum lease term and all optional renewal periods that it is reasonably certain to renew. This determination is at management's full discretion and is made through consideration of the asset, market conditions, competition and entity based economic conditions, among other factors. The lease term is used in the economic life test and also to calculate straight-line rent expense. The depreciable life of leasehold improvements is limited by the estimated lease term, including renewals.

Operating leases are expensed on a straight-line basis over the life of the lease beginning when the lease commences. Rent expense and variable lease expense are included in occupancy and equipment expense on the Company's Consolidated statements of income. The Company's variable lease expense include rent escalators that are based on the Consumer Price Index or market conditions and include items such as common area maintenance, utilities, parking, property taxes, insurance and other costs associated with the lease. The Company recognizes a right-of-use asset and a finance lease liability at the lease commencement dated on the estimated present value of lease payments over the lease term for finance leases. The amortization of the right-of-use asset is expensed through occupancy and equipment expense and the interest on the lease liability is expensed through interest expense on borrowings on the Company's consolidated statements of income.

There are no residual value guarantees or restrictions or covenants imposed by leases that will impact the Company's ability to pay dividends or cause the Company to incur additional expenses. The discount rate used in determining the lease liability is based upon incremental borrowing rates the Company could obtain for similar loans as of the date of commencement or renewal.

(N) Mortgage servicing rights:

The Company accounts for its mortgage servicing rights under the fair value option as permitted under ASC 860-50-35, "Transfers and Servicing". The Company retains the right to service certain mortgage loans that it sells to secondary market investors. The retained mortgage servicing right is initially recorded at the fair value of future net cash flows expected to be realized for performing servicing activities. Fair value is determined using an income approach with various assumptions including expected cash flows, prepayment speeds, market discount rates, servicing costs, and other factors. These mortgage servicing rights are recognized as a separate asset on the date the corresponding mortgage loan is sold.

Subsequent changes in fair value, including the write downs due to pay offs and paydowns, are recorded in earnings in Mortgage banking income.

(O) Transfers of financial assets:

Transfers of financial assets are accounted for as sales, when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

(P) Goodwill and other intangibles:

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill impairment testing is performed annually or more frequently if events or circumstances indicate possible impairment. Goodwill is assigned to the Company’s reporting units, Banking or Mortgage as applicable. Goodwill is evaluated for impairment by first performing a qualitative evaluation to determine whether it is necessary to perform the quantitative goodwill impairment test. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If an entity does a qualitative assessment and determines that it is not more likely than not the fair value of a reporting unit is less than its carrying amount, then goodwill of the reporting unit is not considered impaired, and it is not necessary to continue to the quantitative goodwill impairment test. If the estimated implied fair value of goodwill is less than the carrying amount, an impairment loss would be recognized in noninterest expense to reduce the carrying amount to the estimated implied fair value, which could be material to the Company's operating results for any particular reporting period. The Company performed a qualitative assessment during the years ended December 31, 2022 and 2021 and determined it was more likely than not that the fair value of the reporting units exceeded its carrying value, including goodwill. No impairment was identified through the annual assessments for impairment performed during the years ended December 31, 2022 and 2021.

Other intangible assets consist of core deposit intangible assets arising from whole bank and branch acquisitions in addition to both a customer trust intangible and manufactured housing loan servicing intangible. All intangible assets are initially measured at fair value and then amortized over their estimated useful lives. See Note 8,"Goodwill and intangible assets" for additional information on other intangibles.

(Q) Income taxes:

Income tax expense is the total of the current year income tax due and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

The Company’s policy is to recognize interest and penalties on uncertain tax positions in “Income tax expense” in the Consolidated Statements of Income. There were no amounts related to uncertain tax positions recognized for the years ended December 31, 2022, 2021 or 2020.

(R) Long-lived assets:

Premises and equipment, core deposit intangible assets, and other long-lived assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value. No long-lived assets were deemed to be impaired at December 31, 2022 or 2021.

(S) Derivative financial instruments and hedging activities:

All derivative financial instruments are recorded at their fair values in other assets or other liabilities in the consolidated balance sheets in accordance with ASC 815, “Derivatives and Hedging.” If derivative financial instruments are designated as hedges of fair values, both the change in the fair value of the hedge and the hedged item are included in current earnings. If derivative financial instruments are not designated as hedges, only the change in the fair value of the derivative instrument is included in current earnings.

The Company enters into fair value hedge relationships to mitigate the effect of changing interest rates on the fair values of fixed rate securities and loans. The gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged asset or liability attributable to the hedged risk are recognized in current earnings. The gain or loss on the derivative instrument is presented on the same income statement line item as the earnings effect of the hedged item.

Cash flow hedges are utilized to mitigate the exposure to variability in expected future cash flows or other types of forecasted transactions. For the Company’s derivatives designated as cash flow hedges, changes in the fair value of cash flow hedges are, to the extent that the hedging relationship is effective, recorded as other comprehensive income and are subsequently recognized in earnings at the same time that the hedged item is recognized in earnings. The ineffective portions of the changes in fair value of the hedging instruments are immediately recognized in earnings. The assessment of the effectiveness of the hedging relationship is evaluated under the hypothetical derivative method.

The Company also utilizes derivative instruments that are not designated as hedging instruments. The Company enters into interest rate cap and/or floor and fixed/floating interest rate swap agreements with its customers and then enters into offsetting derivative contracts with other financial institutions to mitigate the interest rate risk associated with these customer contracts. Because these derivative instruments are not designated as hedging instruments, changes in the fair value of the derivative instruments are recognized in earnings.

The Company also enters into commitments to originate loans whereby the interest rate on the loan is determined prior to funding (rate-lock commitments). Rate-lock commitments on mortgage loans that are intended to be sold are considered to be derivatives. Accordingly, such commitments, along with any related fees received from potential borrowers, are recorded at fair value in other assets or liabilities, with changes in fair value recorded in the line item “Mortgage banking income” on the Consolidated Statements of Income. Fair value is based on fees currently charged to enter into similar agreements, and for fixed-rate commitments, the difference between current levels of interest rates and the committed rates is also considered.

The Company utilizes forward loan sale contracts and forward sales of residential mortgage-backed securities to mitigate the interest rate risk inherent in the Company’s mortgage loan pipeline and held-for-sale portfolio. Forward sale contracts are contracts for delayed delivery of mortgage loans or a group of loans pooled as mortgage-backed securities. The Company agrees to deliver on a specified future date, a specified instrument, at a specified price or yield. However, the contract may allow for cash settlement. The credit risk inherent to the Company arises from the potential inability of counterparties to meet the terms of their contracts. In the event of non-acceptance by the counterparty, the Company would be subject to the credit and inherent (or market) risk of the loans retained. Such contracts are accounted for as derivatives and, along with related fees paid to investor are recorded at fair value in derivative assets or liabilities, with changes in fair value recorded in the line item “Mortgage banking income” on the Consolidated Statements of Income. Fair value is based on the estimated amounts that the Company would receive or pay to terminate the commitment at the reporting date.

The Company utilizes two methods to deliver mortgage loans sold to an investor. Under a “best efforts” sales agreement, the Company enters into a sales agreement with an investor in the secondary market to sell the loan when an interest rate-lock commitment is entered into with a customer, as described above. Under a “best efforts” sales agreement, the Company is obligated to sell the mortgage loan to the investor only if the loan is closed and funded. Thus, the Company will not incur any liability to an investor if the mortgage loan commitment in the pipeline fails to close. The Company also utilizes “mandatory delivery” sales agreements. Under a mandatory delivery sales agreement, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price and delivery date. Penalties are paid to the investor should the Company fail to satisfy the contract. Mandatory commitments are recorded at fair value in

the Company’s Consolidated Balance Sheets. Gains and losses arising from changes in the valuation of these commitments are recognized currently in earnings and are reflected under the line item “Mortgage banking income” on the Consolidated Statements of Income.

(T) Lender risk account:

The Company sells qualified mortgage loans to FHLB-Cincinnati via the Mortgage Purchase Program. All mortgage loans purchased from members through the MPP are held on the FHLB’s balance sheet. FHLB does not securitize MPP loans for sale to other investors. They mitigate their credit risk exposure through their underwriting and pool composition requirements and through the establishment of the Lender Risk Account credit enhancement. The LRA protects the FHLB against possible credit losses by setting aside a portion of the initial purchase price into a performance based escrow account that can be used to offset possible loan losses. The LRA amount is established as a percentage applied to the sum of the initial unpaid principal balance of each mortgage in the aggregated pool at the time of the purchase of the mortgage as determined by the FHLB-Cincinnati and is funded by the deduction from the proceeds of sale of each mortgage in the aggregated pool to the FHLB-Cincinnati. As of December 31, 2022 and 2021, the Company had on deposit with the FHLB-Cincinnati $19,737 and $17,130, respectively, in these LRA’s. Additionally, as of December 31, 2022 and 2021, the Company estimated the guaranty account to be $9,558 and $8,372, respectively. The Company bears the risk of receiving less than 100% of its LRA contribution in the event of losses, either by the Company or other members selling mortgages in the aggregated pool. Any losses will be deducted first from the individual LRA contribution of the institution that sold the mortgage of which the loss was incurred. If losses incurred in the aggregated pool are greater than the member’s LRA contribution, such losses will be deducted from the LRA contribution of other members selling mortgages in that aggregated pool. Any portion of the LRA not used to pay losses will be released over a thirty year period and will not start until the end of five years after the initial fill-up period.

(U) Comprehensive income:

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on available-for-sale securities and derivatives designated as cash flow hedges, net of taxes.

(V) Loss contingencies:

Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are such matters that will have a material effect on the financial statements.

(W) Securities sold under agreements to repurchase:

The Company routinely sells securities to certain customers and then repurchases the securities the next business day. Securities sold under agreements to repurchase are recorded on the consolidated balance sheets at the amount of cash received in connection with each transaction in the line item "Borrowings". These are secured liabilities and are not covered by the FDIC. See Note 13, "Borrowings" in the Notes to the consolidated financial statements for additional details regarding securities sold under agreements to repurchase.

(X) Advertising expense:

Advertising costs, including costs related to internet mortgage marketing, lead generation, and related costs, are expensed as incurred.

(Y) Earnings per common share:

Basic EPS excludes dilution and is computed by dividing earnings attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS includes the dilutive effect of additional potential common shares issuable under the restricted stock units granted but not yet vested and distributable. Diluted EPS is computed by dividing earnings attributable to common shareholders by the weighted average number of common shares outstanding for the year, plus an incremental number of common-equivalent shares computed using the treasury stock method.

Unvested share-based payment awards, which include the right to receive non-forfeitable dividends or dividend equivalents, are considered to participate with common shareholders in undistributed earnings for purposes of computing EPS. Companies that have such participating securities, including the Company, are required to calculate basic and diluted EPS using the two-class method. Certain restricted stock awards granted by the Company include non-forfeitable

dividend equivalents and are considered participating securities. Calculations of EPS under the two-class method (i) exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities and (ii) exclude from the denominator the dilutive impact of the participating securities.

The following is a summary of the basic and diluted earnings per common share calculation for each of the periods presented:


	Years Ended December 31,
	2022		2021		2020
Basic earnings per common share calculation:
Net income applicable to FB Financial Corporation	$	124,555	$	190,285	$	63,621
Dividends paid on and undistributed earnings allocated to participating securities	—		—		—
Earnings available to common shareholders	$	124,555	$	190,285	$	63,621
Weighted average basic shares outstanding	47,113,470		47,431,102		37,621,720
Basic earnings per common share	$	2.64	$	4.01	$	1.69
Diluted earnings per common share:
Earnings available to common shareholders	$	124,555	$	190,285	$	63,621
Weighted average basic shares outstanding	47,113,470		47,431,102		37,621,720
Weighted average diluted shares contingently issuable(1)	126,321		524,778		478,024
Weighted average diluted shares outstanding	47,239,791		47,955,880		38,099,744
Diluted earnings per common share	$	2.64	$	3.97	$	1.67

(1) Excludes 11,888, 4,400, and 239,813 restricted stock units outstanding considered to be antidilutive as of December 31, 2022, 2021, and 2020 respectively.

(Z) Segment reporting:

The Company’s Mortgage division represents a distinct reportable segment that differs from the Company’s primary business of Banking. During the year ended December 31, 2022, the Company exited the direct-to-consumer delivery channel (referred to herein as "Mortgage restructuring"), which is one of two delivery channels in the Mortgage segment. As a result of exiting this channel, the Company incurred $12,458 of restructuring expenses during the year ended December 31, 2022. The repositioning of the Mortgage segment does not qualify to be reported as discontinued operations. The Company plans to continue originating and selling residential mortgage loans within its Mortgage segment through its traditional mortgage retail channel, retain mortgage servicing rights and continue holding residential 1-4 family mortgage loans in the loan portfolio. A reconciliation of reportable segment revenues, expenses and profit to the Company’s consolidated total has been presented in Note 20, "Segment reporting".

(AA) Stock-based compensation:

The Company grants restricted stock units under compensation arrangements for the benefit of employees, executive officers, and directors. Restricted stock unit grants are subject to time-based vesting. The total number of restricted stock units granted represents the maximum number of restricted stock units eligible to vest based upon the service conditions set forth in the grant agreements.

The Company awards annual grants of performance-based restricted stock units to executives and other employees. Under the terms of the award, the number of units that will vest and convert to shares of common stock will be based on the extent to which the Company achieves specified performance criteria relative to a predefined peer group during a fixed three-year performance period.

Stock-based compensation expense is recognized in accordance with ASC 718-20, “Compensation – Stock Compensation Awards Classified as Equity”. Expense is recognized based on the fair value of the portion of stock-based payment awards that are ultimately expected to vest, reduced for forfeitures based on grant-date fair value. The restricted stock unit awards and related expense are amortized over the required service period, if any. Compensation expense for PSUs is estimated each period based on the fair value of the stock at the grant date and the most probable outcome of the performance condition, adjusted for the passage of time within the vesting period of the awards. The summary of RSUs, PSUs, and Stock-based compensation expense is presented in Note 23, "Stock-based Compensation".

(BB) Subsequent Events:

In accordance with ASC Topic 855, "Subsequent Events", the Company has evaluated events and transactions that occurred after December 31, 2022 through the date of the issued financial statements for potential recognition and disclosure.

Recently adopted accounting standards:

In March 2022, the SEC released SAB 121 to add interpretive guidance for entities to consider when they have obligations to safeguard crypto-assets held for clients. The new guidance requires reporting entities who allow clients to transact in crypto-assets and act as a custodian to record a liability with a corresponding asset regardless of whether they control the crypto-asset. The crypto-asset will need to be marked at fair value for each reporting period. The new guidance requires disclosures in the footnotes to address the amount of crypto-assets reported, and the safeguarding and recordkeeping of the assets. The guidance in this update requires that reporting companies implement SAB 121 no later than the financial statements covering the first interim or annual period ending after June 15, 2022, with retrospective application back to the beginning of the fiscal year. During the first quarter of 2022, the Company became a founding member of the USDF Consortium (the "Consortium"), which plans to utilize blockchain and technology to streamline peer-to-peer financial transactions. The USDF Consortium is a membership-based association of insured depository institutions with a mission to build a network of banks to further the adoption and interoperability of a bank-minted tokenized deposit. The Company does not currently hold or facilitate transactions with crypto-assets, however the Company now evaluates any crypto-asset activities and the applicable financial statement and disclosure requirements in accordance with the guidance.

Newly issued not yet effective accounting standards:

In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The FASB is issuing this update to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, to amend a related illustrative example, and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The ASU becomes effective January 1, 2024 and the Company is evaluating the potential impact of this standard on its consolidated financial statements and related disclosures.

In March 2022, the FASB issued ASU 2022-01, "Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method", to expand the current single-layer method of electing hedge accounting to allow multiple hedged layers of a single closed portfolio under the method. To reflect that expansion, the last-of-layer method is renamed the portfolio layer method. The amendments in this update are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted on any date on or after the issuance of ASU No. 2022-01 for any entity that has adopted the amendments in ASU No.2017-12 for the corresponding period. The Company adopted the update effective January 1, 2023. The adoption of this standard did not have an impact on the consolidated financial statements or disclosures.

Additionally, in March 2022, the FASB issued ASU 2022-02, "'Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures" related to troubled debt restructurings and vintage disclosures for financing receivables. The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for loan modifications and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company adopted the amendment effective January 1, 2023 and will update its disclosures for the first quarter of 2023. The update did not have a material impact to the Company's results of operation, financial position or liquidity.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU 2020-04 is intended to provide relief for companies preparing for discontinuation of interest rates based on LIBOR. The ASU provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or other reference rates expected to be discontinued. ASU 2020-04 also provides for a onetime sale and/or transfer to AFS or trading to be made for HTM debt securities that both reference an eligible reference rate and were classified as HTM before January 1, 2020. ASU 2020-04 was effective for all entities as of March 12, 2020 and through December 31, 2022. Companies can apply the ASU as of the beginning of the interim period that includes March 12, 2020 or any date

thereafter. The guidance requires companies to apply the guidance prospectively to contract modifications and hedging relationships while the one-time election to sell and/or transfer debt securities classified as HTM may be made any time after March 12, 2020. In December 2022, the FASB issued ASU 2022-06, "Reference rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848" to extend the date to December 31, 2024 for companies to apply the relief in Topic 848.

The Company's LIBOR Transition Committee was established to transition from LIBOR to alternative rates and has continued its efforts consistent with industry timelines. As part of these efforts, during the fourth quarter of 2021, we ceased utilization of LIBOR as an index in newly originated loans or loans that are refinanced. Additionally, we identified existing products that utilize LIBOR and are reviewing contractual language to facilitate the transition to alternative reference rates. ASU 2020-04 and ASU 2021-01 are not expected to have a material impact on the Company's consolidated financial statements.

Mergers and acquisitions

12 Months Ended

Dec. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Mergers and Acquisitions

Mergers and acquisitions:

The following mergers and acquisitions were accounted for pursuant to Accounting Standards Codification 805, "Business Combinations". Accordingly, the purchase price of each acquisition was allocated to the acquired assets and liabilities assumed based on estimated fair values as of the respective acquisition dates. The excess of the purchase price over the net assets acquired was recorded as goodwill.

Franklin Financial Network, Inc. merger

Effective August 15, 2020, the Company completed its merger with Franklin Financial Network, Inc. and its wholly-owned subsidiaries, with FB Financial Corporation continuing as the surviving entity. After consolidating duplicative locations the merger added 10 branches and expanded the Company's footprint in middle Tennessee and the Nashville metropolitan statistical area. Under the terms of the agreement, the Company acquired total assets of $3.63 billion, loans of $2.79 billion and assumed total deposits of $3.12 billion. Total loans acquired includes a non-strategic institutional portfolio with a fair value of $326,206 the Company classified as held for sale. Franklin common shareholders received 15,058,181 shares of the Company's common stock, net of the equivalent value of 44,311 shares withheld on certain Franklin employee equity awards that vested upon change in control, as consideration in connection with the merger, in addition to $31,330 in cash consideration. Also included in the purchase price, the Company issued replacement restricted stock units for awards initially granted by Franklin during 2020 that did not vest upon change in control, with a total fair value of $674 attributed to pre-combination service. Based on the closing price of the Company's common stock on the New York Stock Exchange of $29.52 on August 15, 2020, the merger consideration represented approximately $477,830 in aggregate consideration.

Goodwill of $67,191 was recorded in connection with the transaction resulted from the ongoing business contribution, reputation, operating model and expertise of Franklin. The goodwill is not deductible for income tax purposes. Goodwill is included in the Banking segment as substantially all of the operations resulting from the merger with Franklin are in alignment with the Company's banking business.

The following table presents an allocation of the consideration to net assets acquired:


Purchase Price:
Equity consideration
Franklin shares outstanding(1)	15,588,337
Franklin options converted to net shares	62,906
	15,651,243
Exchange ratio to FB Financial shares	0.965
FB Financial shares to be issued as merger consideration(2)	15,102,492
Issuance price as of August 15, 2020	$	29.52
Value of FB Financial stock to be issued as merger consideration	$	445,826
Less: tax withholding on vested restricted stock awards, units and options(3)	(1,308)
Value of FB Financial stock issued	$	444,518
FB Financial shares issued	15,058,181

Franklin restricted stock units that do not vest on change in control	114,915
Replacement awards issued to Franklin employees	118,776
Fair value of replacement awards	$	3,506
Fair value of replacement awards attributable to pre-combination service	$	674

Cash consideration
Total Franklin shares and net shares outstanding	15,651,243
Cash consideration per share	$	2.00
Total cash to be paid to Franklin(4)	$	31,330
Total purchase price			$	477,830
Fair value of net assets acquired			410,639
Goodwill resulting from merger			$	67,191

(1)Franklin shares outstanding includes restricted stock awards and restricted stock units that vested upon change in control.

(2)Only factors in whole share issuance. Cash was paid in lieu of fractional shares.

(3)Represents the equivalent value of approximately 44,311 shares of FB Financial Corporation stock on August 15, 2020.

(4)Includes $28 of cash paid in lieu of fractional shares.

FNB Financial Corp. merger

Effective February 14, 2020, the Company completed its acquisition of FNB Financial Corp. and its wholly-owned subsidiary, Farmers National Bank of Scottsville (collectively, "Farmers National"). Following the acquisition, Farmers National was merged into the Company with FB Financial Corporation continuing as the surviving entity. The transaction added four branches and expanded the Company's footprint into Kentucky. Under the terms of the agreement, the Company acquired total assets of $258,218, loans of $182,171 and assumed total deposits of $209,535. Farmers National shareholders received 954,797 shares of the Company's common stock as consideration in connection with the merger, in addition to $15,001 in cash consideration. Based on the closing price of the Company's common stock on the New York Stock Exchange of $36.70 on February 14, 2020, the merger consideration represented approximately $50,042 in aggregate consideration.

Goodwill of $6,319 was recorded in connection with the transaction resulted from the ongoing business contribution of Farmers National and anticipated synergies arising from the combination of certain operational areas of the Company. Goodwill resulting from this transaction is not deductible for income tax purposes and is included in the Banking segment as substantially all of the operations resulting from the acquisition of Farmers National are in alignment with the Company's core banking business.

The following table presents the total purchase price, fair value of net assets acquired, and the goodwill as of the acquisition date.


Consideration:
Net shares issued	954,797
Purchase price per share on February 14, 2020	$	36.70
Value of stock consideration			$	35,041
Cash consideration paid			15,001
Total purchase price			$	50,042
Fair value of net assets acquired			43,723
Goodwill resulting from merger			$	6,319

Net assets acquired

The following table summarizes the estimated fair values of assets acquired and liabilities assumed as of the respective acquisition dates:


	As of August 15, 2020		As of February 14, 2020
	Franklin Financial Network, Inc.		FNB Financial Corp.
ASSETS
Cash and cash equivalents	$	284,004	$	10,774
Investments	373,462		50,594
Mortgage loans held for sale, at fair value	38,740		—
Commercial loans held for sale, at fair value	326,206		—
Loans held for investment, net of fair value adjustments	2,427,527		182,171
Allowance for credit losses on purchased credit deteriorated loans	(24,831)		(669)
Premises and equipment	45,471		8,049
Operating lease right-of-use assets	23,958		14
Mortgage servicing rights	5,111		—
Core deposit intangible	7,670		2,490
Other assets	124,571		4,795
Total assets	$	3,631,889	$	258,218
LIABILITIES
Deposits:
Noninterest-bearing	$	505,374	$	63,531
Interest-bearing checking	1,783,379		26,451
Money market and savings	342,093		37,002
Customer time deposits	383,433		82,551
Brokered and internet time deposits	107,452		—
Total deposits	3,121,731		209,535

Borrowings	62,435		3,192
Operating lease liabilities	24,330		14
Accrued expenses and other liabilities	12,661		1,754
Total liabilities assumed	3,221,157		214,495
Noncontrolling interests acquired	93		—
Net assets acquired	$	410,639	$	43,723

Purchased credit-deteriorated loans

Under the CECL methodology, the Company is required to determine whether purchased loans held for investment have experienced more-than-insignificant deterioration in credit quality since origination. Loans that have experienced this level of deterioration in credit quality are subject to special accounting at initial recognition and measurement. The Company initially measures the amortized cost of a PCD loan by adding the acquisition date estimate of expected credit losses to the loan's purchase price (i.e. the "gross up" approach). There is no provision for credit loss recognized upon acquisition of a PCD loan because the initial allowance is established through gross-up of the loans' amortized cost.

The Company determined that 27.9% of the Franklin loan portfolio had more-than-insignificant deterioration in credit quality since origination as of the merger date. This included deterioration in credit metrics, such as delinquency, nonaccrual status or risk ratings as well as certain loans within designated industries of concern that have been negatively impacted by COVID-19. It was determined that 10.1% of the Farmers National loan portfolio had more-than-insignificant deterioration in credit quality since origination as of the February acquisition date. These were primarily delinquent loans or loans that Farmers National had classified as nonaccrual or troubled debt restructuring prior to the Company's acquisition.


	As of August 15, 2020		As of February 14, 2020
	Franklin Financial Network, Inc.		FNB Financial Corp.
Purchased credit-deteriorated loans
Principal balance	$	693,999	$	18,964
Allowance for credit losses at acquisition	(24,831)		(669)
Net premium attributable to other factors	8,810		63
Loans purchased credit-deteriorated fair value	$	677,978	$	18,358

Loans recognized through acquisition that have not experienced more-than-insignificant credit deterioration since origination are initially recognized at the purchase price. Expected credit losses are measured under CECL through the provision for credit losses. The Company recorded provisions for credit losses in the amounts of $52,822 and $2,885 as of August 15, 2020 and February 14, 2020, respectively, in the statement of income related to estimated credit losses on non-PCD loans from Franklin and Farmers National, respectively. Additionally, the Company estimates expected credit losses on off-balance sheet loan commitments that are not accounted for as derivatives. The Company recorded an increase in provision for credit losses from unfunded commitments of $10,499 as of August 15, 2020 related to the Franklin merger.

Pro forma financial information (unaudited)

The results of operations of the acquisitions have been included in the Company's consolidated financial statements prospectively beginning on the date of each transaction. The acquired entities have been fully integrated with the Company's existing operations. Accordingly, post-acquisition net interest income, total revenues, and net income are not discernible. The following unaudited pro forma condensed consolidated financial information presents the results of operations for the year ended December 31, 2020, as though the Franklin merger and Farmers National acquisition had been completed as of January 1, 2019. The unaudited estimated pro forma information combines the historical results of the mergers with the Company’s historical consolidated results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the periods presented. Merger expenses are reflected in the period they were incurred. The pro forma information is not indicative of what would have occurred had the transactions taken place on January 1, 2019 and does not include the effect of cost-saving or revenue-enhancing strategies.


	Year Ended December 31,
		2020
Net interest income		$	338,092
Total revenues		$	654,374
Net income applicable to FB Financial Corporation		$	65,135

Cash and Cash Equivalents Concentrations	12 Months Ended
Cash and Cash Equivalents Concentrations	Dec. 31, 2022
Cash and Cash Equivalents [Abstract]
Cash and Cash Equivalents Concentrations	Cash and cash equivalents concentrations:The Bank maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Bank has not experienced any losses in such correspondent accounts and believes it is not exposed to any significant credit risk from cash and cash equivalents. Included in cash and cash equivalents, the Bank had cash in the form of Federal funds sold of $135,128 and $53,919 as of December 31, 2022 and 2021, respectively; and the Bank had reverse repurchase agreements of $75,408 and $74,168 as of December 31, 2022 and 2021, respectively.

Investment Securities

12 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment securities:

The following tables summarize the amortized cost, allowance for credit losses and fair value of the available-for-sale debt securities and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive (loss) income at December 31, 2022 and 2021:


	December 31, 2022
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Allowance for credit losses for investments		Fair Value
Investment Securities
Available-for-sale debt securities
U.S. government agency securities	$	45,167	$	—	$	(5,105)	$	—	$	40,062
Mortgage-backed securities - residential	1,224,522		—		(190,329)		—		1,034,193
Mortgage-backed securities - commercial	19,209		—		(1,565)		—		17,644
Municipal securities	295,375		458		(31,413)		—		264,420
U.S. Treasury securities	113,301		—		(5,621)		—		107,680
Corporate securities	8,000		—		(813)		—		7,187
Total	$	1,705,574	$	458	$	(234,846)	$	—	$	1,471,186


	December 31, 2021
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Allowance for credit losses for investments		Fair Value
Investment Securities
Available-for-sale debt securities
U.S. government agency securities	$	34,023	$	18	$	(171)	$	—	$	33,870
Mortgage-backed securities - residential	1,281,285		6,072		(17,985)		—		1,269,372
Mortgage-backed securities - commercial	15,024		272		(46)		—		15,250
Municipal securities	322,052		16,718		(160)		—		338,610
U.S. Treasury securities	14,914		—		(6)		—		14,908
Corporate securities	6,500		40		(25)		—		6,515
Total	$	1,673,798	$	23,120	$	(18,393)	$	—	$	1,678,525

The components of amortized cost for debt securities on the consolidated balance sheets excludes accrued interest receivable since the Company elected to present accrued interest receivable separately on the consolidated balance sheets. As of December 31, 2022 and 2021, total accrued interest receivable on debt securities was $5,470 and $5,051, respectively.

As of December 31, 2022 and 2021, the Company had $2,990 and $3,367, in marketable equity securities recorded at fair value, respectively. Additionally, the Company had equity securities without readily determinable market value included in other assets on the consolidated balance sheets with carrying amounts of $22,496 and $8,868 at December 31, 2022 and 2021, respectively.

Securities pledged at December 31, 2022 and 2021 had carrying amounts of $1,191,021 and $1,226,646, respectively, and were pledged to secure a Federal Reserve Bank line of credit, public deposits and repurchase agreements.

There were no holdings of securities of any one issuer, other than U.S. Government sponsored enterprises, in an amount greater than 10% of shareholders' equity during any period presented.

Investment securities transactions are recorded as of the trade date. At December 31, 2022 and 2021, there were no trade date receivables nor payables that related to sales or purchases settled after period end.

The amortized cost and fair value of debt securities by contractual maturity at December 31, 2022 and 2021 are shown below. Maturities may differ from contractual maturities in mortgage-backed securities because the mortgage underlying the security may be called or repaid without any penalties. Therefore, mortgage-backed securities are not included in the maturity categories in the following summary.


	December 31,
	2022				2021
	Available-for-sale				Available-for-sale
	Amortized cost		Fair value		Amortized cost		Fair value
Due in one year or less	$	4,277	$	4,225	$	21,851	$	21,884
Due in one to five years	161,556		152,181		54,847		55,307
Due in five to ten years	61,290		57,859		45,714		46,975
Due in over ten years	234,720		205,084		255,077		269,737
	461,843		419,349		377,489		393,903
Mortgage-backed securities - residential	1,224,522		1,034,193		1,281,285		1,269,372
Mortgage-backed securities - commercial	19,209		17,644		15,024		15,250
Total debt securities	$	1,705,574	$	1,471,186	$	1,673,798	$	1,678,525

Sales and other dispositions of available-for-sale securities were as follows:


	Years Ended December 31,
		2022		2021		2020
Proceeds from sales		$	1,218	$	8,855	$	146,494
Proceeds from maturities, prepayments and calls		204,748		296,256		220,549
Gross realized gains		4		127		1,606
Gross realized losses		3		1		271

Additionally, changes in fair value and the sale of equity securities with readily determinable fair values resulted in a net loss of $377 for the year ended December 31, 2022, and a net gain of $198 and $296 for the years ended December 31, 2021 and 2020, respectively.

The following tables show gross unrealized losses for which an allowance for credit losses has not been recorded at December 31, 2022 and 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:


	December 31, 2022
	Less than 12 months				12 months or more				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. government agency securities	$	23,791	$	(2,802)	$	16,271	$	(2,303)	$	40,062	$	(5,105)
Mortgage-backed securities - residential	316,656		(32,470)		717,533		(157,859)		1,034,189		(190,329)
Mortgage-backed securities - commercial	11,104		(968)		6,541		(597)		17,645		(1,565)
Municipal securities	196,419		(26,811)		36,726		(4,602)		233,145		(31,413)
U.S. Treasury securities	94,248		(4,122)		13,434		(1,499)		107,682		(5,621)
Corporate securities	4,008		(492)		3,270		(321)		7,278		(813)
Total	$	646,226	$	(67,665)	$	793,775	$	(167,181)	$	1,440,001	$	(234,846)


	December 31, 2021
	Less than 12 months				12 months or more				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized loss
U.S. government agency securities	$	18,360	$	(171)	$	—	$	—	$	18,360	$	(171)
Mortgage-backed securities - residential	871,368		(14,295)		102,799		(3,690)		974,167		(17,985)
Mortgage-backed securities - commercial	7,946		(46)		—		—		7,946		(46)
Municipal securities	11,414		(160)		—		—		11,414		(160)
U.S. Treasury securities	14,908		(6)		—		—		14,908		(6)
Corporate securities	4,119		(25)		—		—		4,119		(25)
Total	$	928,115	$	(14,703)	$	102,799	$	(3,690)	$	1,030,914	$	(18,393)

As of December 31, 2022 and 2021, the Company’s securities portfolio consisted of 503 and 511 securities, 454 and 80 of which were in an unrealized loss position, respectively.

During the year ended December 31, 2022, the Company's available-for-sale debt securities portfolio unrealized value declined $239,115 to an unrealized loss position of $234,388 from an unrealized gain position of $4,727 as of December 31, 2021. During the year ended December 31, 2021, the Company's available-for-sale debt securities portfolio unrealized value declined $29,825 to an unrealized gain position of $4,727 from an unrealized gain position of $34,552 as of December 31, 2020.

The majority of the investment portfolio was either government guaranteed or an issuance of a government sponsored entity or highly rated by major credit rating agencies and the Company has historically not recorded any losses associated with these investments. Municipal securities with market values below amortized cost at December 31, 2022 were reviewed for material credit events and/or rating downgrades with individual credit reviews performed. The issuers of these debt securities continue to make timely principal and interest payments under the contractual terms of the securities and the issuers will continue to be observed as a part of the Company’s ongoing credit monitoring. As such, as of December 31, 2022 and 2021, it was determined that all available-for-sale debt securities that experienced a decline in fair value below amortized cost basis were due to noncredit-related factors. Further, the Company does not intend to sell those available-for-sale securities that have an unrealized loss as of December 31, 2022, and it is not likely that the Company will be required to sell the securities before recovery of their amortized cost basis. Therefore, there was no provision for credit losses recognized on available-for-sale debt securities during the year ended December 31, 2022 or 2021.

Loans and Allowance for Credit Losses

12 Months Ended

Dec. 31, 2022

Receivables [Abstract]

Loans and Allowance for Credit Losses

Loans and allowance for credit losses:

Loans outstanding as of December 31, 2022 and 2021, by class of financing receivable are as follows:


	December 31,
	2022		2021
Commercial and industrial (1)	$	1,645,783	$	1,290,565
Construction	1,657,488		1,327,659
Residential real estate:
1-to-4 family mortgage	1,573,121		1,270,467
Residential line of credit	496,660		383,039
Multi-family mortgage	479,572		326,551
Commercial real estate:
Owner-occupied	1,114,580		951,582
Non-owner occupied	1,964,010		1,730,165
Consumer and other	366,998		324,634
Gross loans	9,298,212		7,604,662
Less: Allowance for credit losses	(134,192)		(125,559)
Net loans	$	9,164,020	$	7,479,103

(1)Includes $767 and $3,990 of loans originated as part of the Paycheck Protection Program as of December 31, 2022 and 2021, respectively. PPP loans are federally guaranteed as part of the CARES Act, provided PPP loan recipients receive loan forgiveness under the SBA regulations. As such, there is minimal credit risk associated with these loans.

As of December 31, 2022 and 2021, $909,734 and $1,136,294, respectively, of qualifying residential mortgage loans (including loans held for sale) and $1,763,730 and $1,581,673, respectively, of qualifying commercial mortgage loans were pledged to the Federal Home Loan Bank of Cincinnati securing advances against the Bank’s line of credit. Additionally, as of December 31, 2022 and 2021, qualifying loans of $3,118,172 and $2,440,097, respectively, were pledged to the Federal Reserve Bank under the Borrower-in-Custody program.

The components of amortized cost for loans on the consolidated balance sheets exclude accrued interest receivable as the Company presents accrued interest receivable separately on the balance sheet. As of December 31, 2022 and 2021, accrued interest receivable on loans held for investment amounted to $38,507 and $31,676, respectively.

Allowance for Credit Losses

The Company calculates its expected credit loss using a lifetime loss rate methodology. The Company utilizes probability-weighted forecasts, which consider multiple macroeconomic variables from a third-party vendor that are applicable to the type of loan. Each of the Company's loss rate models incorporate forward-looking macroeconomic projections throughout the reasonable and supportable forecast period and the subsequent historical reversion at the macroeconomic variable input level. In order to estimate the life of a loan, the contractual term of the loan is adjusted for estimated prepayments based on market information and the Company’s prepayment history.

The Company's loss rate models estimate the lifetime loss rate for pools of loans by combining the calculated loss rate based on each variable within the model (including the macroeconomic variables). The lifetime loss rate for the pool is then multiplied by the loan balances to determine the expected credit losses on the pool.

The quantitative models require loan data and macroeconomic variables based on the inherent credit risks in each portfolio to more accurately measure the credit risks associated with each. Each of the quantitative models pools loans with similar risk characteristics and collectively assesses the lifetime loss rate for each pool to estimate its expected credit loss.

The Company considers the need to qualitatively adjust its modeled quantitative expected credit loss estimate for information not already captured in the model loss estimation process. These qualitative factor adjustments may increase or decrease the Company’s estimate of expected credit losses. The Company reviews the qualitative adjustments so as to validate that information that has already been considered and included in the modeled quantitative loss estimation process is not also included in the qualitative adjustment. The Company considers the qualitative factors that are relevant to the institution as of the reporting date, which may include, but are not limited to: levels of and trends in delinquencies and performance of loans; levels of and trends in write-offs and recoveries collected; trends in volume and terms of loans; effects of any changes in reasonable and supportable economic forecasts; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and expertise; available relevant information sources that contradict the Company’s own forecast; effects of changes in prepayment expectations or other factors affecting assessments of loan contractual terms; industry conditions; and effects of changes in credit concentrations.

The Company performed qualitative evaluations within the Company's established qualitative framework, assessing the impact of the current economic outlook (including uncertainty due to inflation, negative economic forecasts, predicted Federal Reserve rate increases, status of federal government stimulus programs, and other considerations). The increase in estimated required reserve during the year ended December 31, 2022 was a result of increased loan growth and a tightening monetary policy environment both of which were incorporated into the Company's reasonable and supportable forecasts. These forecasts included weighted projections that the economy may be nearing a recession, reflected through deterioration in asset quality projected over life of the loan portfolio. Loss rates on construction loans incurred the largest increase due to increased economic uncertainty going into 2023. Loss rates on residential loans were qualitatively adjusted downwards, addressing the relative strength of asset values in the Company's predominant markets.

The Company calculates its expected credit loss using a lifetime loss rate methodology using the following pools:


Pool	Source of repayment	Quantitative and Qualitative factors considered
Commercial and Industrial	Repayment is largely dependent upon the operation of the borrower's business.	Quantitative: Prepayment speeds are modeled in the form of a prepayment benchmarking that directly impacts the ACL output for all C&I loans and lines of credit. Loss rates incorporate a peer scaling factor. Qualitative: An uncertain economic outlook including the effects of inflation and the interest rate environment are driving a qualitative increase in the ACL.
Retail	Repayment is primarily dependent on the personal cash flow of the borrower.	Quantitative: Average FICO scores, remaining life of the portfolio, delinquency composition, prepayment speeds leveraging Equifax and Moody's data Qualitative: High modeled loss rates and the relatively strong housing market within the bank’s footprint are driving a qualitative decrease in the ACL.
Commercial Real Estate	Repayment is primarily dependent on lease income generated from the underlying collateral.	Quantitative: Prepayment speeds leveraging a reverse-compounding formula. Loss rates incorporate a peer scaling factor. Qualitative: An uncertain economic outlook including the effects of inflation and the interest rate environment as well as changes in asset quality are driving a qualitative increase in the ACL.

When a loan no longer shares similar risk characteristics with other loans in any given pool, the loan is individually assessed. The Company has determined the following circumstances in which a loan may require an individual evaluation: collateral dependent loans; loans for which foreclosure is probable; and loans with other unique risk characteristics. A loan is deemed collateral dependent when 1) the borrower is experiencing financial difficulty and 2) the repayment is expected to be primarily through sale or operation of the collateral. The allowance for credit losses for collateral dependent loans as well as loans where foreclosure is probable is calculated as the amount for which the loan’s amortized cost basis exceeds fair value. Fair value is determined based on appraisals performed by qualified appraisers and reviewed by qualified personnel. In cases where repayment is to be provided substantially through the sale of collateral, the Company reduces the fair value by the estimated costs to sell. Loans experiencing financial difficulty for which a concession has not yet been provided may be identified as reasonably expected TDRs.

Reasonably expected TDRs and TDRs use the same methodology. In cases where the expected credit loss can only be captured through a discounted cash flow analysis (such as an interest rate modification for a TDR loan), the allowance is measured by the amount which the loan’s amortized cost exceeds the discounted cash flow analysis.

The following tables provide the changes in the allowance for credit losses by class of financing receivable for the years ended December 31, 2022, 2021, and 2020:


	Commercial and industrial		Construction		1-to-4 family residential mortgage		Residential line of credit		Multi-family residential mortgage		Commercial real estate owner occupied		Commercial real estate non-owner occupied		Consumer and other		Total








Year Ended December 31, 2022
Beginning balance - December 31, 2021	$	15,751	$	28,576	$	19,104	$	5,903	$	6,976	$	12,593	$	25,768	$	10,888	$	125,559


Provision for credit losses	(4,563)		11,221		7,060		1,574		(486)		(4,883)		(3,584)		4,054		10,393
Recoveries of loans previously charged-off	2,005		11		54		17		—		88		—		766		2,941
Loans charged off	(2,087)		—		(77)		—		—		(15)		(268)		(2,254)		(4,701)


Ending balance - December 31, 2022	$	11,106	$	39,808	$	26,141	$	7,494	$	6,490	$	7,783	$	21,916	$	13,454	$	134,192


	Commercial and industrial		Construction		1-to-4 family residential mortgage		Residential line of credit		Multi-family residential mortgage		Commercial real estate owner occupied		Commercial real estate non-owner occupied		Consumer and other		Total







Year Ended December 31, 2021
Beginning balance - December 31, 2020	$	14,748	$	58,477	$	19,220	$	10,534	$	7,174	$	4,849	$	44,147	$	11,240	$	170,389


Provision for credit losses	4,178		(29,874)		(87)		(4,728)		(197)		7,588		(16,813)		938		(38,995)
Recoveries of loans previously charged-off	861		3		125		115		—		156		—		773		2,033
Loans charged off	(4,036)		(30)		(154)		(18)		(1)		—		(1,566)		(2,063)		(7,868)


Ending balance - December 31, 2021	$	15,751	$	28,576	$	19,104	$	5,903	$	6,976	$	12,593	$	25,768	$	10,888	$	125,559


	Commercial and industrial		Construction		1-to-4 family residential mortgage		Residential line of credit		Multi-family residential mortgage		Commercial real estate owner occupied		Commercial real estate non-owner occupied		Consumer and other		Total
Year Ended December 31, 2020
Beginning balance - December 31, 2019	$	4,805	$	10,194	$	3,112	$	752	$	544	$	4,109	$	4,621	$	3,002	$	31,139
Impact of adopting ASC 326 on non-purchased credit deteriorated loans	5,300		1,533		7,920		3,461		340		1,879		6,822		3,633		30,888
Impact of adopting ASC 326 on purchased credit deteriorated loans	82		150		421		(3)		—		162		184		(438)		558
Provision for credit losses	13,830		40,807		6,408		5,649		5,506		(1,739)		17,789		6,356		94,606
Recoveries of loans previously charged-off	1,712		205		122		125		—		83		—		756		3,003
Loans charged off	(11,735)		(18)		(403)		(22)		—		(304)		(711)		(2,112)		(15,305)
Initial allowance on loans purchased with deteriorated credit quality	754		5,606		1,640		572		784		659		15,442		43		25,500
Ending balance - December 31, 2020	$	14,748	$	58,477	$	19,220	$	10,534	$	7,174	$	4,849	$	44,147	$	11,240	$	170,389

Credit Quality - Commercial Type Loans

The Company categorizes commercial loan types into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans that share similar risk characteristics collectively. Loans that do not share similar risk characteristics are evaluated individually.

The Company uses the following definitions for risk ratings:


			Pass.			Loans rated Pass include those that are adequately collateralized performing loans which management believes do not have conditions that have occurred or may occur that would result in the loan being downgraded into an inferior category. The Pass category also includes commercial loans rated as Watch, which include those that management believes have conditions that have occurred, or may occur, which could result in the loan being downgraded to an inferior category.




			Special Mention.			Loans rated Special Mention are those that have potential weakness that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position at some future date. Management does not believe there will be a loss of principal or interest. These loans require intensive servicing and may possess more than normal credit risk.




			Classified.			Loans included in the Classified category include loans rated as Substandard and Doubtful. Loans rated as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Also included in this category are loans classified as Doubtful, which have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weakness or weaknesses make collection or liquidation in full, based on currently existing facts, conditions, and values, highly questionable and improbable.

Risk ratings are updated on an ongoing basis and are subject to change by continuous loan monitoring processes.

During the year ended December 31, 2022, the Company revised the presentation of the below credit quality vintage tables without change to accounting or credit policies. The updated presentation disaggregates between commercial and consumer loan types with consumer loan types reported as either performing or nonperforming based on their delinquency and accrual status. As such, the tables presented below as of December 31, 2021 have been revised to align with current period presentation.

The following tables present the credit quality of the Company's commercial type loan portfolio by year of origination as of December 31, 2022 and 2021. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination. Generally, current period renewals of credit are reunderwritten at the point of renewal and considered current period originations for the purposes of the tables below.





As of December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and industrial
Pass	$	396,643	$	204,000	$	67,231	$	90,894	$	39,780	$	62,816	$	762,717	$	1,624,081
Special Mention	125		7		—		160		143		771		2,520		3,726
Classified	65		823		1,916		1,651		273		6,913		6,335		17,976

Total	396,833		204,830		69,147		92,705		40,196		70,500		771,572		1,645,783


Construction
Pass	682,885		495,723		142,233		84,599		17,360		44,326		188,906		1,656,032
Special Mention	—		—		15		—		—		707		—		722
Classified	80		309		—		—		—		345		—		734

Total	682,965		496,032		142,248		84,599		17,360		45,378		188,906		1,657,488


Residential real estate:

Multi-family mortgage
Pass	142,912		147,168		96,819		33,547		6,971		37,385		13,604		478,406
Special Mention	—		—		—		—		—		—		—		—
Classified	—		—		—		—		—		1,166		—		1,166

Total	142,912		147,168		96,819		33,547		6,971		38,551		13,604		479,572



Commercial real estate:
Owner occupied
Pass	237,862		223,883		110,748		148,405		66,101		246,414		57,220		1,090,633
Special Mention	101		683		—		168		2,225		1,258		5,000		9,435
Classified	—		1,293		224		4,589		1,276		7,018		112		14,512

Total	237,963		225,859		110,972		153,162		69,602		254,690		62,332		1,114,580


Non-owner occupied
Pass	467,360		440,319		131,497		159,205		210,752		473,607		60,908		1,943,648
Special Mention	—		—		—		—		82		2,459		—		2,541
Classified	—		2,258		—		146		3,270		12,147		—		17,821

Total	467,360		442,577		131,497		159,351		214,104		488,213		60,908		1,964,010





Total commercial loan types
Pass	1,927,662		1,511,093		548,528		516,650		340,964		864,548		1,083,355		6,792,800
Special Mention	226		690		15		328		2,450		5,195		7,520		16,424
Classified	145		4,683		2,140		6,386		4,819		27,589		6,447		52,209

Total	$	1,928,033	$	1,516,466	$	550,683	$	523,364	$	348,233	$	897,332	$	1,097,322	$	6,861,433





As of December 31, 2021	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and industrial
Pass	$	273,232	$	95,279	$	140,938	$	52,162	$	33,997	$	57,020	$	596,667	$	1,249,295
Special Mention	79		9		949		632		3		1,519		12,367		15,558
Classified	918		2,391		2,376		3,089		3,370		6,425		7,143		25,712

Total	274,229		97,679		144,263		55,883		37,370		64,964		616,177		1,290,565


Construction
Pass	677,258		280,828		135,768		23,916		15,313		67,818		117,176		1,318,077
Special Mention	62		184		—		—		1,208		1,384		—		2,838
Classified	—		—		2,922		2,882		3		737		200		6,744

Total	677,320		281,012		138,690		26,798		16,524		69,939		117,376		1,327,659


Residential real estate:

Multi-family mortgage
Pass	166,576		32,242		64,345		7,124		5,602		38,526		10,891		325,306
Special Mention	—		—		—		—		—		—		—		—
Classified	—		—		—		—		—		1,245		—		1,245

Total	166,576		32,242		64,345		7,124		5,602		39,771		10,891		326,551



Commercial real estate:
Owner occupied
Pass	170,773		131,471		174,257		83,698		69,939		236,998		57,123		924,259
Special Mention	—		—		1,502		3,541		885		2,555		213		8,696
Classified	—		—		3,102		768		3,295		9,616		1,846		18,627

Total	170,773		131,471		178,861		88,007		74,119		249,169		59,182		951,582


Non-owner occupied
Pass	462,478		154,048		165,917		264,855		170,602		414,859		46,541		1,679,300
Special Mention	—		—		3,747		3,388		—		969		—		8,104
Classified	—		—		1,898		23,849		1,506		15,508		—		42,761

Total	462,478		154,048		171,562		292,092		172,108		431,336		46,541		1,730,165


Total commercial loan types
Pass	1,750,317		693,868		681,225		431,755		295,453		815,221		828,398		5,496,237
Special Mention	141		193		6,198		7,561		2,096		6,427		12,580		35,196
Classified	918		2,391		10,298		30,588		8,174		33,531		9,189		95,089
Total	$	1,751,376	$	696,452	$	697,721	$	469,904	$	305,723	$	855,179	$	850,167	$	5,626,522

Credit Quality - Consumer Type Loans

For consumer and residential loan classes, the company primarily evaluates credit quality based on delinquency and accrual status of the loan, credit documentation and by payment activity. The performing or nonperforming status is updated on an on-going basis dependent upon improvement and deterioration in credit quality.

The following tables present the credit quality by classification (performing or nonperforming) of the Company's consumer type loan portfolio by year of origination as of December 31, 2022 and 2021. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination. Generally, current period renewals of credit are reunderwritten at the point of renewal and considered current period originations for the purposes of the tables below.





As of December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total





Residential real estate:
1-to-4 family mortgage
Performing	$	568,210	$	448,401	$	160,715	$	93,548	$	68,113	$	211,019	$	—	$	1,550,006
Nonperforming	1,227		5,163		5,472		1,778		2,044		7,431		—		23,115
Total	569,437		453,564		166,187		95,326		70,157		218,450		—		1,573,121

Residential line of credit
Performing	—		—		—		—		—		—		495,129		495,129
Nonperforming	—		—		—		—		—		—		1,531		1,531
Total	—		—		—		—		—		—		496,660		496,660

Consumer and other
Performing	118,637		56,779		41,008		29,139		26,982		82,318		4,175		359,038
Nonperforming	166		1,396		1,460		906		1,507		2,525		—		7,960
Total	118,803		58,175		42,468		30,045		28,489		84,843		4,175		366,998

Total consumer type loans
Performing	686,847		505,180		201,723		122,687		95,095		293,337		499,304		2,404,173
Nonperforming	1,393		6,559		6,932		2,684		3,551		9,956		1,531		32,606
Total	$	688,240	$	511,739	$	208,655	$	125,371	$	98,646	$	303,293	$	500,835	$	2,436,779





As of December 31, 2021	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total





Residential real estate:
1-to-4 family mortgage
Performing	$	521,533	$	204,690	$	121,775	$	100,164	$	109,087	$	199,262	$	—	$	1,256,511
Nonperforming	1,232		3,734		977		2,429		1,765		3,819		—		13,956
Total	522,765		208,424		122,752		102,593		110,852		203,081		—		1,270,467

Residential line of credit
Performing	—		—		—		—		—		—		381,303		381,303
Nonperforming	—		—		—		—		—		—		1,736		1,736
Total	—		—		—		—		—		—		383,039		383,039

Consumer and other
Performing	82,910		55,123		38,281		32,893		21,856		74,248		14,478		319,789
Nonperforming	199		345		545		1,352		861		1,496		47		4,845
Total	83,109		55,468		38,826		34,245		22,717		75,744		14,525		324,634

Total consumer type loans
Performing	604,443		259,813		160,056		133,057		130,943		273,510		395,781		1,957,603
Nonperforming	1,431		4,079		1,522		3,781		2,626		5,315		1,783		20,537
Total	$	605,874	$	263,892	$	161,578	$	136,838	$	133,569	$	278,825	$	397,564	$	1,978,140

Nonaccrual and Past Due Loans

Nonperforming loans include loans that are no longer accruing interest (nonaccrual loans) and loans past due ninety or more days and still accruing interest.

The following tables represent an analysis of the aging by class of financing receivable as of December 31, 2022 and 2021:


December 31, 2022	30-89 days past due and accruing interest		90 days or more and accruing interest		Nonaccrual loans		Loans current on payments and accruing interest		Total
Commercial and industrial	$	1,650	$	136	$	1,307	$	1,642,690	$	1,645,783
Construction	1,246		—		389		1,655,853		1,657,488
Residential real estate:
1-to-4 family mortgage	15,470		16,639		6,476		1,534,536		1,573,121
Residential line of credit	772		131		1,400		494,357		496,660
Multi-family mortgage	—		—		42		479,530		479,572
Commercial real estate:
Owner occupied	1,948		—		5,410		1,107,222		1,114,580
Non-owner occupied	102		—		5,956		1,957,952		1,964,010
Consumer and other	10,108		1,509		6,451		348,930		366,998
Total	$	31,296	$	18,415	$	27,431	$	9,221,070	$	9,298,212


December 31, 2021	30-89 days past due and accruing interest		90 days or more and accruing interest		Nonaccrual loans		Loans current on payments and accruing interest		Total
Commercial and industrial	$	1,030	$	63	$	1,520	$	1,287,952	$	1,290,565
Construction	4,852		718		3,622		1,318,467		1,327,659
Residential real estate:
1-to-4 family mortgage	11,007		9,363		4,593		1,245,504		1,270,467
Residential line of credit	319		—		1,736		380,984		383,039
Multi-family mortgage	—		—		49		326,502		326,551
Commercial real estate:
Owner occupied	1,417		—		6,710		943,455		951,582
Non-owner occupied	427		—		14,084		1,715,654		1,730,165
Consumer and other	7,398		1,591		3,254		312,391		324,634
Total	$	26,450	$	11,735	$	35,568	$	7,530,909	$	7,604,662

The following tables provide the amortized cost basis of loans on nonaccrual status, as well as any related allowance and interest income as of and for the years ended December 31, 2022 and 2021 by class of financing receivable.



December 31, 2022	Nonaccrual with no related allowance		Nonaccrual with related allowance		Related allowance		Year to date Interest Income
Commercial and industrial	$	790	$	517	$	10	$	181
Construction	—		389		7		28
Residential real estate:
1-to-4 family mortgage	2,834		3,642		78		274
Residential line of credit	1,134		266		4		136
Multi-family mortgage	1		41		1		3
Commercial real estate:
Owner occupied	5,200		210		1		232
Non-owner occupied	5,755		201		5		332
Consumer and other	—		6,451		327		358
Total	$	15,714	$	11,717	$	433	$	1,544


December 31, 2021	Nonaccrual with no related allowance		Nonaccrual with related allowance		Related allowance		Year to date Interest Income

Commercial and industrial	$	1,085	$	435	$	6	$	1,371
Construction	2,882		740		99		156
Residential real estate:
1-to-4 family mortgage	378		4,215		60		314
Residential line of credit	797		939		11		289
Multi-family mortgage	—		49		2		3
Commercial real estate:
Owner occupied	5,346		1,364		206		536
Non-owner occupied	13,898		186		7		486
Consumer and other	—		3,254		164		245
Total	$	24,386	$	11,182	$	555	$	3,400

Accrued interest receivable written off as an adjustment to interest income amounted to $1,089, $804, and $627 for the years ended December 31, 2022, 2021, and 2020, respectively.

Troubled debt restructurings

As of December 31, 2022 and 2021, the Company had a recorded investment in TDRs of $13,854 and $32,435, respectively. The modifications included extensions of the maturity date and/or a stated rate of interest to one lower than the current market rate to borrowers experiencing financial difficulty. Of these loans, $7,321 and $11,084 were classified as nonaccrual loans as of December 31, 2022 and 2021, respectively. The Company has calculated $253 and $1,245 in allowances for credit losses on TDRs as of December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, unfunded loan commitments to extend additional funds on troubled debt restructurings were not meaningful.

The following tables present the financial effect of TDRs recorded during the periods indicated:


Year Ended December 31, 2022	Number of loans	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Charge offs and specific reserves
Commercial and industrial	3	$	612	$	522	$	—




Residential real estate:
1-to-4 family mortgage	3	391		707		—
Residential line of credit	1	49		49		—

Consumer and other	2	23		23		—
Total	9	$	1,075	$	1,301	$	—


Year Ended December 31, 2021	Number of loans	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Charge offs and specific reserves
Commercial and industrial	8	$	15,430	$	15,430	$	446

Commercial real estate:
Owner occupied	7	5,209		5,209		—
Non-owner occupied	1	11,997		11,997		—
Residential real estate:
1-4 family mortgage	3	945		945		—
Residential line of credit	3	485		485		—
Multi-family Mortgage	1	49		49		—
Total	23	$	34,115	$	34,115	$	446


Year Ended December 31, 2020	Number of loans	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Charge offs and specific reserves
Commercial and industrial	5	$	2,257	$	2,257	$	—

Commercial real estate:
Owner occupied	7	2,794		2,794		—
Non-owner occupied	2	3,752		3,752		—
Residential real estate:
1-4 family mortgage	3	618		618		—
Residential line of credit	1	95		95		—
Total	18	$	9,516	$	9,516	$	—

Troubled debt restructurings for which there was a payment default within twelve months following the modification totaled $304 and $304 during the years ended December 31, 2022 and 2021, respectively. There were no loans modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the year ended December 31, 2020. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy. The terms of certain other loans were modified during the years ended December 31, 2022, 2021, and 2020 that did not meet the definition of a TDR. The modification of these loans usually involve either a modification of the terms of a loan to borrowers who are not experiencing financial difficulties or an insignificant delay in payments.

Collateral-Dependent Loans

For loans for which the repayment (based on the Company's assessment) is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, the following tables present the loans and the corresponding individually assessed allowance for credit losses by class of financing receivable. Significant changes in individually assessed reserves are due to changes in the valuation of the underlying collateral in addition to changes in accrual and past due status.


	December 31, 2022
	Type of Collateral
	Real Estate		Financial Assets and Equipment		Total		Individually assessed allowance for credit loss
Commercial and industrial	$	2,596	$	—	$	2,596	$	—

Residential real estate:
1-to-4 family mortgage	4,467		—		4,467		194
Residential line of credit	1,135		—		1,135		—

Commercial real estate:
Owner occupied	5,424		—		5,424		—
Non-owner occupied	5,755		—		5,755		—
Consumer and other	134		—		134		—
Total	$	19,511	$	—	$	19,511	$	194


	December 31, 2021
	Type of Collateral
	Real Estate		Financial Assets and Equipment		Total		Individually assessed allowance for credit loss
Commercial and industrial	$	799	$	1,090	$	1,889	$	—
Construction	3,580		—		3,580		92
Residential real estate:
1-to-4 family mortgage	338		—		338		—
Residential line of credit	1,400		—		1,400		10

Commercial real estate:
Owner occupied	8,117		71		8,188		200
Non-owner occupied	13,899		—		13,899		—
Consumer and other	25		—		25		1
Total	$	28,158	$	1,161	$	29,319	$	303

Premises and Equipment

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Premises and Equipment

Premises and equipment:

Premises and equipment and related accumulated depreciation as of December 31, 2022 and 2021, are as follows:


	2022		2021
Land	$	32,985	$	33,151
Premises	109,277		109,357
Furniture, fixtures and equipment	49,203		48,392
Leasehold improvements	19,001		18,531
Construction in process	10,230		1,705
Finance lease	1,367		1,487
	222,063		212,623
Less: accumulated depreciation and amortization	(75,747)		(68,884)
Total Premises and Equipment	$	146,316	$	143,739

Depreciation and amortization expense was $7,554, $7,411, and $7,009 for the years ended December 31, 2022, 2021, and 2020, respectively.

Other Real Estate Owned

12 Months Ended

Dec. 31, 2022

Real Estate [Abstract]

Other Real Estate Owned

Other real estate owned

The amount reported as other real estate owned includes property acquired through foreclosure in addition to excess facilities held for sale and is carried at fair value less estimated cost to sell the property. The following table summarizes the other real estate owned for the years ended December 31, 2022, 2021, and 2020:


	Years Ended December 31,
		2022		2021		2020
Balance at beginning of period		$	9,777	$	12,111	$	18,939
Transfers from loans		1,437		5,262		2,746
Transfers to premises and equipment		(351)		—		(841)

Proceeds from sale of other real estate owned		(4,955)		(9,396)		(6,937)
Gain on sale of other real estate owned		328		3,248		354
Loans provided for sales of other real estate owned		—		(704)		(305)
Write-downs and partial liquidations		(442)		(744)		(1,845)

Balance at end of period		$	5,794	$	9,777	$	12,111

Foreclosed residential real estate properties totaled $840 and $775 as of December 31, 2022 and 2021, respectively. The recorded investment in residential mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process totaled $2,653 at December 31, 2022. As of December 31, 2021, there were no such residential foreclosure proceedings in process.

Excess land and facilities held for sale resulting from branch consolidations totaled $2,116 and $3,348 as of December 31, 2022 and 2021, respectively.

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and intangible assets:

Goodwill represents the excess of the cost of a business combination over the fair value of the net assets acquired. The carrying amount of goodwill was $242,561 at both December 31, 2022 and 2021.

Goodwill is tested annually, or more often if circumstances warrant, for impairment. Impairment exists when a reporting unit's carrying value exceeds its fair value. During the years ended December 31, 2022 and 2021, the Company performed a qualitative assessment and determined it was more likely than not that the fair value of the reporting units exceeded its carrying value, including goodwill. As such, no impairment was recorded as of December 31, 2022 or 2021.

Core deposit and other intangibles include core deposit intangibles, customer base trust intangible and manufactured housing servicing intangible. The composition of core deposit and other intangibles as of December 31, 2022 and 2021 is as follows:


	Core deposit and other intangibles
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
December 31, 2022
Core deposit intangible	$	59,835	$	(48,200)	$	11,635
Customer base trust intangible	1,600		(867)		733
Manufactured housing servicing intangible	1,088		(1,088)		—
Total core deposit and other intangibles	$	62,523	$	(50,155)	$	12,368

December 31, 2021
Core deposit intangible	$	59,835	$	(43,902)	$	15,933
Customer base trust intangible	1,600		(707)		893
Manufactured housing servicing intangible	1,088		(961)		127
Total core deposit and other intangibles	$	62,523	$	(45,570)	$	16,953

The estimated aggregate future amortization expense of core deposit and other intangibles is as follows:


2023	$	3,658
2024	2,946
2025	2,306
2026	1,563
2027	1,080
Thereafter	815
	$	12,368

Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

Leases:

As of December 31, 2022, the Company was the lessee in 58 operating leases and 1 finance lease of certain branch, mortgage and operations locations with original terms greater than one year. Leases with initial terms of less than one year and equipment leases are not included on the consolidated balance sheets as these are insignificant.

Many leases include one or more options to renew, with renewal terms that can extend the lease up to an additional 20 years or more. Certain lease agreements contain provisions to periodically adjust rental payments for inflation. Renewal options that management is reasonably certain to renew and fixed rent escalations are included in the right-of-use asset and lease liability.

During the year ended December 31, 2020, the Company entered into an operating lease for a new corporate headquarters office located in downtown Nashville. During the year ended December 31, 2022, construction of the exterior of the building was completed and the Company took possession of the leased space and began the build-out of the interior space. On August 1, 2022, the Company recorded an ROU asset and operating lease liability of $16,095 and $20,037, respectively, in connection with the initial term of this lease.

Information related to the Company's leases is presented below as of December 31, 2022 and 2021:


		December 31,
	Classification	2022			2021
Right-of-use assets:
Operating leases	Operating lease right-of-use assets	$	60,043		$	41,686
Finance leases	Premises and equipment, net	1,367			1,487
Total right-of-use assets		$	61,410		$	43,173
Lease liabilities:
Operating leases	Operating lease liabilities	$	69,754		$	46,367
Finance leases	Borrowings	1,420			1,518
Total lease liabilities		$	71,174		$	47,885
Weighted average remaining lease term (in years) - operating		12.1			12.4
Weighted average remaining lease term (in years) - finance		12.4			13.4
Weighted average discount rate - operating		3.08		%	2.73		%
Weighted average discount rate - finance		1.76		%	1.76		%

The components of total lease expense included in the consolidated statements of income were as follows:


		Years Ended December 31,

	Classification		2022		2021		2020
Operating lease costs:
Amortization of right-of-use asset	Occupancy and equipment		$	8,441	$	7,636	$	6,228
Short-term lease cost	Occupancy and equipment		526		427		456
Variable lease cost	Occupancy and equipment		1,078		1,003		602
Lease impairment	(1)		364		—		2,142
Gain on lease modifications and terminations	Occupancy and equipment		(18)		(805)		—
Finance lease costs:
Interest on lease liabilities	Interest expense on borrowings		28		25		11
Amortization of right-of-use asset	Occupancy and equipment		120		101		43

Sub-lease income	Occupancy and equipment		(993)		(573)		(346)
Total lease cost			$	9,546	$	7,814	$	9,136

(1) Operating lease impairment is included in "Mortgage restructuring expense" and "Merger costs" within the Company's consolidated statements of income for the years ended December 31, 2022 and 2020, respectively.

During the year ended December 31, 2022, the Company recorded $364 of lease impairment related to vacating two locations associated with restructuring the Company's Mortgage segment and recorded gains of $18 related to early lease terminations and modifications on other vacated locations. During the year ended December 31, 2021, the Company recorded $805 in gains on lease modifications and terminations on certain vacated locations that were consolidated as a result of previous business combinations. During the year ended December 31, 2020, the Company recorded $2,142 of lease impairment related to vacating certain locations as a result of its business combination activity and location consolidation. See Note 2, "Mergers and Acquisitions" for additional information on the Company's business combination activity.

The Company does not separate lease and non-lease components and instead elects to account for them as a single lease component. Variable lease cost primarily represents variable payments such as common area maintenance, utilities, and property taxes.

A maturity analysis of operating and finance lease liabilities and a reconciliation of undiscounted cash flows to the total lease liability as of December 31, 2022 is as follows:


	Operating		Finance
	Leases		Lease
Lease payments due:
December 31, 2023	$	8,085	$	118
December 31, 2024	8,210		120
December 31, 2025	7,909		121
December 31, 2026	7,724		123
December 31, 2027	7,340		125
Thereafter	46,503		977
Total undiscounted future minimum lease payments	85,771		1,584
Less: imputed interest	(16,017)		(164)
Lease liability	$	69,754	$	1,420

Leases

Leases:

As of December 31, 2022, the Company was the lessee in 58 operating leases and 1 finance lease of certain branch, mortgage and operations locations with original terms greater than one year. Leases with initial terms of less than one year and equipment leases are not included on the consolidated balance sheets as these are insignificant.

Many leases include one or more options to renew, with renewal terms that can extend the lease up to an additional 20 years or more. Certain lease agreements contain provisions to periodically adjust rental payments for inflation. Renewal options that management is reasonably certain to renew and fixed rent escalations are included in the right-of-use asset and lease liability.

During the year ended December 31, 2020, the Company entered into an operating lease for a new corporate headquarters office located in downtown Nashville. During the year ended December 31, 2022, construction of the exterior of the building was completed and the Company took possession of the leased space and began the build-out of the interior space. On August 1, 2022, the Company recorded an ROU asset and operating lease liability of $16,095 and $20,037, respectively, in connection with the initial term of this lease.

Information related to the Company's leases is presented below as of December 31, 2022 and 2021:


		December 31,
	Classification	2022			2021
Right-of-use assets:
Operating leases	Operating lease right-of-use assets	$	60,043		$	41,686
Finance leases	Premises and equipment, net	1,367			1,487
Total right-of-use assets		$	61,410		$	43,173
Lease liabilities:
Operating leases	Operating lease liabilities	$	69,754		$	46,367
Finance leases	Borrowings	1,420			1,518
Total lease liabilities		$	71,174		$	47,885
Weighted average remaining lease term (in years) - operating		12.1			12.4
Weighted average remaining lease term (in years) - finance		12.4			13.4
Weighted average discount rate - operating		3.08		%	2.73		%
Weighted average discount rate - finance		1.76		%	1.76		%

The components of total lease expense included in the consolidated statements of income were as follows:


		Years Ended December 31,

	Classification		2022		2021		2020
Operating lease costs:
Amortization of right-of-use asset	Occupancy and equipment		$	8,441	$	7,636	$	6,228
Short-term lease cost	Occupancy and equipment		526		427		456
Variable lease cost	Occupancy and equipment		1,078		1,003		602
Lease impairment	(1)		364		—		2,142
Gain on lease modifications and terminations	Occupancy and equipment		(18)		(805)		—
Finance lease costs:
Interest on lease liabilities	Interest expense on borrowings		28		25		11
Amortization of right-of-use asset	Occupancy and equipment		120		101		43

Sub-lease income	Occupancy and equipment		(993)		(573)		(346)
Total lease cost			$	9,546	$	7,814	$	9,136

(1) Operating lease impairment is included in "Mortgage restructuring expense" and "Merger costs" within the Company's consolidated statements of income for the years ended December 31, 2022 and 2020, respectively.

During the year ended December 31, 2022, the Company recorded $364 of lease impairment related to vacating two locations associated with restructuring the Company's Mortgage segment and recorded gains of $18 related to early lease terminations and modifications on other vacated locations. During the year ended December 31, 2021, the Company recorded $805 in gains on lease modifications and terminations on certain vacated locations that were consolidated as a result of previous business combinations. During the year ended December 31, 2020, the Company recorded $2,142 of lease impairment related to vacating certain locations as a result of its business combination activity and location consolidation. See Note 2, "Mergers and Acquisitions" for additional information on the Company's business combination activity.

The Company does not separate lease and non-lease components and instead elects to account for them as a single lease component. Variable lease cost primarily represents variable payments such as common area maintenance, utilities, and property taxes.

A maturity analysis of operating and finance lease liabilities and a reconciliation of undiscounted cash flows to the total lease liability as of December 31, 2022 is as follows:


	Operating		Finance
	Leases		Lease
Lease payments due:
December 31, 2023	$	8,085	$	118
December 31, 2024	8,210		120
December 31, 2025	7,909		121
December 31, 2026	7,724		123
December 31, 2027	7,340		125
Thereafter	46,503		977
Total undiscounted future minimum lease payments	85,771		1,584
Less: imputed interest	(16,017)		(164)
Lease liability	$	69,754	$	1,420

Mortgage Servicing Rights

12 Months Ended

Dec. 31, 2022

Transfers and Servicing of Financial Assets [Abstract]

Mortgage Servicing Rights

Mortgage servicing rights:

Changes in the Company’s mortgage servicing rights were as follows for the years ended December 31, 2022, 2021, and 2020:


	Years Ended December 31,
		2022		2021		2020


Carrying value at beginning of period		$	115,512	$	79,997	$	75,521
Capitalization		20,809		39,018		47,025

Mortgage servicing rights acquired from Franklin, at fair value		—		—		5,111



Change in fair value:
Due to pay-offs/pay-downs		(16,012)		(30,583)		(27,834)
Due to change in valuation inputs or assumptions		48,056		27,080		(19,826)
Carrying value at end of period		$	168,365	$	115,512	$	79,997

The following table summarizes servicing income and expense, which are included in 'Mortgage banking income' and 'Other noninterest expense', respectively, within the Mortgage segment operating results for the years ended December 31, 2022, 2021, and 2020:


	Years Ended December 31,
		2022		2021		2020
Servicing income:
Servicing income		$	30,763	$	28,890	$	22,128
Change in fair value of mortgage servicing rights		32,044		(3,503)		(47,660)
Change in fair value of derivative hedging instruments		(42,143)		(8,614)		13,286
Servicing income		20,664		16,773		(12,246)
Servicing expenses		10,259		9,862		7,890
Net servicing income (loss)(1)		$	10,405	$	6,911	$	(20,136)

(1) Excludes benefit of custodial servicing related noninterest-bearing deposits held by the Bank.

Data and key economic assumptions related to the Company’s mortgage servicing rights as of December 31, 2022 and 2021 are as follows:


	December 31,
	2022			2021
Unpaid principal balance	$	11,086,582		$	10,759,286
Weighted-average prepayment speed (CPR)	5.55		%	9.31		%
Estimated impact on fair value of a 10% increase	$	(4,886)		$	(4,905)
Estimated impact on fair value of a 20% increase	$	(9,447)		$	(9,429)
Discount rate	9.10		%	9.81		%
Estimated impact on fair value of a 100 bp increase	$	(8,087)		$	(4,785)
Estimated impact on fair value of a 200 bp increase	$	(15,475)		$	(9,198)
Weighted-average coupon interest rate	3.31		%	3.23		%
Weighted-average servicing fee (basis points)	27			27
Weighted-average remaining maturity (in months)	332			330

The Company economically hedges the mortgage servicing rights portfolio with various derivative instruments to offset changes in the fair value of the related mortgage servicing rights. See Note 17, "Derivatives" for additional information on these hedging instruments.

As of December 31, 2022 and 2021, mortgage escrow deposits totaled to $75,612 and $127,617, respectively.

- Definition

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 30
-Section 50
-Paragraph 1A
-Subparagraph (c)(3)
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Other Assets and Other Liabilities

12 Months Ended

Dec. 31, 2022

Other Assets And Other Liabilities [Abstract]

Other Assets and Other Liabilities

Other assets and other liabilities:

Included in other assets are:


	As of December 31,
Other assets	2022		2021
Prepaid expenses	$	9,280	$	12,371
Software	108		578
Mortgage lending receivable	14,425		16,087
Derivatives (See Note 17)	48,769		27,384
Deferred tax asset (See Note 14)	42,412		—
FHLB lender risk account receivable (See Note 1)	19,737		17,130
Pledged collateral on derivative instruments	23,325		57,868
Equity securities without readily determinable market value	22,496		8,868
Current income tax receivable	7,373		26,698
Other assets	40,031		5,252
Total other assets	$	227,956	$	172,236

Included in other liabilities are:


	As of December 31,
Other liabilities	2022		2021
Deferred compensation	$	2,424	$	2,487
Accrued payroll	13,592		22,138

Mortgage buyback reserve (See Note 16)	1,621		4,802
Accrued interest payable	8,648		3,162
Derivatives (See Note 17)	63,229		21,000
Deferred tax liability (See Note 14)	—		6,820

FHLB lender risk account guaranty	9,558		8,372
Allowance for credit losses on unfunded commitments (See Note 16)	22,969		14,380
Other liabilities	58,932		26,788
Total other liabilities	$	180,973	$	109,949

Deposits

12 Months Ended

Dec. 31, 2022

Deposits [Abstract]

Deposits

Deposits:

As of December 31, 2022 and 2021, the aggregate amount of time deposits with a minimum denomination greater than $250 was $556,537 and $303,289, respectively.

At December 31, 2022, the scheduled maturities of time deposits are as follows:


Scheduled maturities of time deposits
Due on or before:
December 31, 2023	$	873,327
December 31, 2024	480,005
December 31, 2025	34,766
December 31, 2026	19,073
December 31, 2027	14,687
Thereafter	116
Total	$	1,421,974

As of December 31, 2022 and 2021, the Company had $5,725 and $2,574, respectively, of deposit accounts in overdraft status and thus have been reclassified to loans on the accompanying consolidated balance sheets.

Borrowings

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Borrowings

Borrowings:

The Company has access to various sources of funds that allow for management of interest rate exposure and liquidity. The following table summarizes the Company's outstanding borrowings and weighted average interest rates as of December 31, 2022 and 2021:


	Outstanding Balance				Weighted Average Interest Rate
	December 31,				December 31,
	2022		2021		2022		2021
Securities sold under agreements to repurchase and federal funds purchased	$	86,945	$	40,716	3.78	%	0.21	%
FHLB advances	175,000		—		4.44	%	—	%
Subordinated debt, net	126,101		129,544		5.31	%	4.24	%
Other borrowings	27,631		1,518		0.09	%	1.76	%
Total	$	415,677	$	171,778

Securities sold under agreements to repurchase and federal funds purchased

Securities sold under agreements to repurchase are financing arrangements that mature daily. Securities sold under agreements to repurchase totaled $21,945 and $40,716 as of December 31, 2022 and 2021, respectively. The weighted average interest rate of the Company's securities sold under agreements to repurchase was 0.18% and 0.21% as of December 31, 2022 and 2021, respectively. The fair value of securities pledged to secure repurchase agreements may decline. The Company manages this risk by having a policy to pledge securities valued at 100% of the outstanding balance of repurchase agreements.

The Bank maintains lines with certain correspondent banks that provide borrowing capacity in the form of federal funds purchased. Federal funds purchased are short-term borrowings that typically mature within one to ninety days. As of December 31, 2022 and 2021, the aggregate total borrowing capacity under these lines amounted to $350,000 and $325,000, respectively. As of December 31, 2022, borrowings against these lines (i.e. federal funds purchased) totaled $65,000 with a weighted average rate of 5.00%. There were no such borrowings as of December 31, 2021.

Information concerning securities sold under agreement to repurchase and federal funds purchased is summarized as follows:


	December 31, 2022			December 31, 2021
Balance at year end	$	86,945		$	40,716
Average daily balance during the year	28,497			36,453
Average interest rate during the year	0.23		%	0.27		%
Maximum month-end balance during the year	$	86,945		$	41,730
Weighted average interest rate at year-end	3.78		%	0.21		%

Federal Home Loan Bank Advances

As a member of the FHLB Cincinnati, the Bank may utilize advances from the FHLB in order to provide additional liquidity and funding. Under these short-term agreements, the Company maintains a line of credit that as of December 31, 2022 and 2021 had total borrowing capacity of $1,270,240 and $1,233,254, respectively. As of December 31, 2022 and 2021, the Company had qualifying loans pledged as collateral securing these lines amounting to $2,673,464 and $2,717,967, respectively. Overnight cash advances against this line totaled $175,000 as of December 31, 2022. There were no FHLB advances outstanding as of December 31, 2021.

Information concerning FHLB advances as of or for the year ended December 31, 2022 is summarized within the table below. There were no FHLB advances outstanding during the year ended December 31, 2021.


	December 31, 2022
Balance at year end	$	175,000
Average daily balance during the year	171,142
Average interest rate during the year	3.26		%
Maximum month-end balance during the year	$	540,000
Weighted average interest rate at year-end	4.44		%

Subordinated Debt

During the year-ended December 31, 2003, two separate trusts were formed by the Company, which issued $9,000 (“Trust I”) and $21,000 ("Trust II") of floating rate trust preferred securities as part of a pooled offering of such securities. The Company issued junior subordinated debentures of $9,280, which included proceeds of common securities purchased by the Company of $280, and junior subordinated debentures of $21,650, which included proceeds of common securities of $650. The Trusts were created for the sole purpose of issuing 30-year capital trust preferred securities to fund the purchase of junior subordinated debentures issued by the Company. Both issuances were to the trusts in exchange for the proceeds of the securities offerings, which represent the sole asset of the trusts.

Additionally, during the year ended December 31, 2020, the Company placed $100,000 of ten year fixed-to-floating rate subordinated notes, maturing September 1, 2030. During the year ended December 31, 2022, the Company began mitigating interest rate exposure associated with these notes through the use of fair value hedging instruments. See Note 17, "Derivatives" for additional details related to these instruments.

Further information related to the Company's subordinated debt as of December 31, 2022 is detailed below:

Name

Year Established

Maturity

Call Date

Total Debt Outstanding

Interest Rate

Coupon Structure

Subordinated Debt issued by Trust Preferred Securities

FBK Trust I (1)

2003

06/09/2033

6/09/2008(2)

$

9,280

8.00%

3-month LIBOR plus 3.25%

FBK Trust II (1)

2003

06/26/2033

6/26/2008(3)

21,650

7.87%

3-month LIBOR plus 3.15%

Additional Subordinated Debt

FBK Subordinated Debt I(4)

2020

09/01/2030

9/1/2025 (5)

100,000

4.50%

Semi-annual Fixed (6)

Unamortized debt issuance costs

(999)

Fair Value Hedge (See Note 17, "Derivatives" )

(3,830)

Total Subordinated Debt, net

$

126,101

(1)The Company classifies $30,000 of the Trusts' subordinated debt as Tier 1 capital.

(2)The Company may also redeem the first junior subordinated debenture listed, in whole or in part, on any distribution payment date within 120 days of

the occurrence of a special event, at the redemption price and must be redeemed no later than 2033.

(3)The Company may also redeem the second junior subordinated debentures listed, in whole or in part on any distribution payment date, at the

redemption price and must be redeemed no later than 2033.

(4)The Company classified the issuance, net of unamortized issuance costs and the associated fair value hedge as Tier 2 capital, which will be phased

out 20% per year in the final five years before maturity.

(5)The Company may redeem the notes in whole or in part on any interest payment date on or after September 1, 2025.

(6)Beginning on September 1, 2025 the coupon structure migrates to the 3-month Secured Overnight Financing Rate plus a spread of 439 basis points

through the end of the term of the debenture.

Other Borrowings

As of December 31, 2022 and 2021, other borrowings included a finance lease liability amounting to $1,420 and $1,518, respectively. Additionally, as of December 31, 2022, the Company had $26,211 of government guaranteed GNMA loans that were greater than 90 days delinquent under their contractual terms that were eligible for optional repurchase and recorded in both loans HFS and other borrowings.

See Note 9, "Leases" and Note 18, "Fair Value of financial instruments" for additional information regarding the Company's finance lease and guaranteed GNMA loans eligible for repurchase, respectively.

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income taxes:An allocation of federal and state income taxes between current and deferred portions is presented below:


	Years Ended December 31,
		2022		2021		2020
Current		$	22,451	$	21,980	$	44,362
Deferred		12,552		30,770		(25,530)
Total		$	35,003	$	52,750	$	18,832

The following table presents a reconciliation of federal income taxes at the statutory federal rate of 21% to the Company's effective tax rates for the years ended December 31, 2022, 2021, and 2020:


	Years Ended December 31,
		2022			2021				2020
Federal taxes calculated at statutory rate			$	33,510	21.0	%	$	51,041	21.0	%	$	17,317	21.0	%
Increase (decrease) resulting from:
State taxes, net of federal benefit			3,845		2.4	%	8,788		3.5	%	3,197		3.8	%


(Benefit) expense from equity based compensation			(392)		(0.2)	%	(2,719)		(1.1)	%	153		0.2	%
Municipal interest income, net of interest disallowance			(1,774)		(1.1)	%	(1,818)		(0.8)	%	(1,507)		(1.8)	%
Bank-owned life insurance			(305)		(0.2)	%	(324)		(0.1)	%	(327)		(0.4)	%
NOL Carryback provision under CARES Act			—		—	%	(3,424)		(1.4)	%	—		—	%
Offering costs			—		—	%	123		0.1	%	289		0.4	%
Section 162(m) limitation			241		0.1	%	1,381		0.6	%	—		—	%
Other			(122)		(0.1)	%	(298)		(0.1)	%	(290)		(0.4)	%
Income tax expense, as reported			$	35,003	21.9	%	$	52,750	21.7	%	$	18,832	22.8	%

The Company is subject to Internal Revenue Code Section 162(m), which limits the deductibility of compensation paid to certain individuals. It is the Company’s policy to apply the Section 162(m) limitations to stock-based compensation first and then followed by cash compensation. As a result of the vesting of these units and cash compensation paid to date, the Company has disallowed a portion of its compensation paid to the applicable individuals.

The components of the net deferred tax assets (liabilities) at December 31, 2022 and 2021, are as follows:


	December 31,
	2022		2021
Deferred tax assets:
Allowance for credit losses	$	38,646	$	35,233
Operating lease liabilities	25,882		12,478
Net operating loss	1,088		1,370
Amortization of core deposit intangibles	653		—
Deferred compensation	5,245		5,484
Unrealized loss on debt securities	61,004		—

Unrealized loss on cash flow hedges	—		205
Other assets	6,691		8,301
Subtotal	139,209		63,071
Deferred tax liabilities:
FHLB stock dividends	$	(484)	$	(484)
Operating leases - right of use assets	(24,478)		(11,287)
Depreciation	(7,274)		(7,938)
Amortization of core deposit intangibles	—		(116)
Unrealized gain on equity securities	(2,287)		(2,407)
Unrealized gain on cash flow hedges	(327)		—
Unrealized gain on debt securities	—		(1,324)
Mortgage servicing rights	(43,869)		(30,098)
Goodwill	(15,869)		(13,743)
Other liabilities	(2,209)		(2,494)
Subtotal	(96,797)		(69,891)
Net deferred tax assets (liabilities)	$	42,412	$	(6,820)

The Company had a net operating loss carryforward generated as a result of a previous merger amounting to $5,179 and $6,523 as of December 31, 2022 and 2021, respectively. The net operating loss carryforward can be used to offset taxable income in future periods and reduce income tax liabilities in those future periods. While net operating losses are subject to certain annual utilization limits under Section 382, the Company believes the net operating loss carryforwards will be realized based on the projected annual limitation and the length of the net operating loss carryover period. The Company's determination of the realization of the net deferred tax asset is based on its assessment of all available positive and negative evidence. The net operating loss carryforward will begin to expire in 2029.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Dividend Restrictions	12 Months Ended
Dividend Restrictions	Dec. 31, 2022
Disclosure of Restrictions on Dividends, Loans and Advances Disclosure [Abstract]
Dividend Restrictions	Dividend restrictions: Due to regulations of the Tennessee Department of Financial Institutions, the Bank may not declare dividends in any calendar year that exceeds the total of its net income of that year combined with its retained net income of the preceding two years without the prior approval of the TDFI Commissioner. Based upon this regulation, $161,251 and $170,769 was available for payment of dividends without such prior approval as of December 31, 2022 and 2021, respectively. In addition, dividends paid by the Bank to the Company would be prohibited if the effect thereof would cause the Bank’s capital to be reduced below applicable minimum capital requirements. During the years ended December 31, 2022, 2021, and 2020, there were $49,000, $122,500 and $48,750, respectively, in cash dividends declared from the Bank to the Company. Additionally, during the year ended December 31, 2020, the Bank declared a noncash dividend to the Company comprising investment securities amounting to $956. There were no such noncash dividends from the Bank to the Company during the years ended December 31, 2022 or 2021.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and contingencies:

Commitments to extend credit & letters of credit

Some financial instruments, such as loan commitments, credit lines and letters of credit, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates.

The same credit and underwriting policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment. Many commitments expire without being used and are only recorded in the consolidated financial statements when drawn upon. The Company's maximum off-balance sheet exposure to credit loss is represented by the contractual amount of these instruments.


	December 31,
	2022		2021
Commitments to extend credit, excluding interest rate lock commitments	$	3,563,982	$	3,106,594
Letters of credit	71,250		77,427
Balance at end of period	$	3,635,232	$	3,184,021

As of December 31, 2022 and 2021, loan commitments included above with floating interest rates totaled $2.96 billion and $2.26 billion, respectively.

The Company estimates expected credit losses on off-balance sheet loan commitments that are not accounted for as derivatives under the CECL methodology. When applying this methodology, the Company considers the likelihood that funding will occur, the contractual period of exposure to credit loss, the risk of loss, historical loss experience, and current conditions along with expectations of future economic conditions.

The table below presents activity within the allowance for credit losses on unfunded commitments included in accrued expenses and other liabilities on the Company's consolidated balance sheets for the years ended December 31, 2022, 2021, and 2020:


	Years Ended December 31,
		2022		2021		2020
Balance at beginning of period		$	14,380	$	16,378	$	—
Impact of CECL adoption on provision for credit losses on unfunded commitments		—		—		2,947
Increase in provision for credit losses from unfunded commitments acquired in business combination		—		—		10,499
Provision for credit losses on unfunded commitments		8,589		(1,998)		2,932
Balance at end of period		$	22,969	$	14,380	$	16,378

Loan repurchases or indemnifications

In connection with the sale of mortgage loans to third party investors, the Company makes usual and customary representations and warranties as to the propriety of its origination activities. Occasionally, the investors require the Company to repurchase loans sold to them under the terms of the warranties. When this happens, the loans are recorded at fair value with a corresponding charge to a valuation reserve. The total principal amount of loans repurchased (or indemnified for) was $7,834, $7,364, and $9,171 for the years ended December 31, 2022, 2021, and 2020, respectively. The Company has established a reserve associated with loan repurchases.

The following table summarizes the activity in the repurchase reserve included in accrued expenses and other liabilities on the Company's consolidated balance sheets:


	Years Ended December 31,
		2022		2021		2020
Balance at beginning of period		$	4,802	$	5,928	$	3,529
Provision for loan repurchases or indemnifications		(2,989)		(766)		2,607

Losses on loans repurchased or indemnified		(192)		(360)		(208)
Balance at end of period		$	1,621	$	4,802	$	5,928

Legal Proceedings

Various legal claims arise from time to time in the normal course of business, which, in the opinion of management, will not have a material effect on the Company’s consolidated financial statements.

Derivatives

12 Months Ended

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives:

The Company utilizes derivative financial instruments as part of its ongoing efforts to manage its interest rate risk exposure as well as the exposure for its customers. Derivative financial instruments are included in the consolidated balance sheets line items “Other assets” or “Other liabilities” at fair value in accordance with ASC 815, “Derivatives and Hedging.”

Derivatives not designated as hedging instruments

The Company enters into commitments to originate loans whereby the interest rate on the loan is determined prior to funding (rate-lock commitments). Under such commitments, interest rates for mortgage loans are typically locked in for between 45 to 90 days with the customer. These interest rate lock commitments are recorded at fair value in the Company’s consolidated balance sheets. The Company also enters into best effort or mandatory delivery forward commitments to sell residential mortgage loans to secondary market investors. Gains and losses arising from changes in the valuation of the rate-lock commitments and forward commitments are recognized currently in earnings and are reflected under the line item “Mortgage banking income” on the consolidated statements of income.

The Company also enters into forward commitments, futures and options contracts as economic hedges to offset the changes in fair value of mortgage servicing rights. Gains and losses associated with these instruments are included in earnings and are reflected under the line item “Mortgage banking income” on the consolidated statements of income.

Additionally, the Company enters into derivative instruments to help its commercial customers manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with customer contracts, the Company enters into an

offsetting derivative contract. The Company manages its credit risk, or potential risk of default by its commercial customers through credit limit approval and monitoring procedures.

The following tables provide details on the Company’s non-designated derivative financial instruments as of the dates presented:


	December 31, 2022
	Notional Amount		Asset		Liability

Interest rate contracts	$	560,310	$	45,775	$	45,762
Forward commitments	207,000		306		—
Interest rate-lock commitments	118,313		1,433		—
Futures contracts	87,700		—		3,790

Total	$	973,323	$	47,514	$	49,552


	December 31, 2021
	Notional Amount		Asset		Liability

Interest rate contracts	$	600,048	$	19,265	$	19,138
Forward commitments	1,180,000		—		1,077
Interest rate-lock commitments	487,396		7,197		—
Futures contracts	429,000		922		—

Total	$	2,696,444	$	27,384	$	20,215

Gains (losses) included in the consolidated statements of income related to the Company’s non-designated derivative financial instruments were as follows:


	Years Ended December 31,
		2022		2021		2020
Included in mortgage banking income:
Interest rate lock commitments		$	(5,764)	$	(27,194)	$	27,339
Forward commitments		55,804		25,661		(73,033)
Futures contracts		(36,381)		(7,949)		8,151
Option contracts		36		—		—
Total		$	13,695	$	(9,482)	$	(37,543)

Derivatives designated as cash flow hedges

The Company also maintains two interest rate swap agreements with notional amounts totaling $30,000 used to hedge interest rate exposure on outstanding subordinated debentures included in long-term debt totaling $30,930. Under these agreements, the Company receives a variable rate of interest equal to 3-month LIBOR and pays a weighted average fixed rate of interest of 2.08%. Upon the cessation of LIBOR in June 2023, the rate will convert to SOFR plus an adjustment in accordance with market standards. The interest rate swap contracts, which mature in June of 2024, are designated as cash flow hedges with the objective of reducing the variability in cash flows resulting from changes in interest rates.

The following presents a summary of the Company's designated cash flow hedges as of the dates presented:

December 31, 2022

December 31, 2021

Notional Amount

Estimated fair value

Balance sheet location

Estimated fair value

Balance sheet location

Interest rate swap agreements-
subordinated debt

$

30,000

$

1,255

Other assets

$

(785)

Accrued expenses and other liabilities

The Company's consolidated statements of income included losses of $93, $577, and $353 for the years ended December 31, 2022, 2021, and 2020, respectively, in interest expense on borrowings related to these cash flow hedges. Additionally, during the year ended December 31, 2020, the Company reclassified an unamortized gain related to the previous cancellation of interest rate swap contracts amounting to $955, net of tax expense of $337, from accumulated other comprehensive income into earnings upon maturity of the underlying FHLB advances. There were no reclassifications from accumulated other comprehensive loss into earnings during the years ended December 31, 2022 or 2021.

The following discloses the amount included in other comprehensive loss (income), net of tax, for derivative instruments designated as cash flow hedges for the periods presented:


	Years Ended December 31,
		2022		2021		2020

Amount of gain (loss) recognized in other comprehensive (loss) income, net of tax expense (benefit) of $532, $293 and $(363)		$	1,508	$	831	$	(1,031)

Derivatives designated as fair value hedges

During the year ended December 31, 2022, the Company entered into three designated fair value hedges to mitigate the effect of changing rates on the fair value of various fixed rate liabilities, including certain money market deposits and subordinated debt. The hedging strategy converts the fixed interest rates of the hedged items to the daily compounded SOFR in arrears paid monthly. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged asset or liability attributable to the hedged risk are recognized in current earnings. The gain or loss on the derivative instrument is presented on the same income statement line item as the earnings effect of the hedged item. As of December 31, 2022, the fair value hedges were deemed effective.


	December 31, 2022
	Notional Amount		Remaining Maturity (In Years)	Receive Fixed Rate	Pay Floating Rate	Estimated fair value
Derivatives included in other liabilities:
Interest rate swap agreement- subordinated debt	$	100,000	1.17	1.46%	SOFR	$	(3,830)
Interest rate swap agreement- fixed rate money market deposits	75,000		1.64	1.50%	SOFR	(3,693)
Interest rate swap agreement- fixed rate money market deposits	125,000		1.64	1.50%	SOFR	(6,154)
Total	$	300,000	1.48	1.48%		$	(13,677)

The following discloses the amount of expense included in interest expense on borrowings and deposits, related to these fair value hedging instruments:


	Year Ended December 31,
		2022
Designated fair value hedge:
Interest expense on deposits		$	(717)
Interest expense on borrowings		(395)
Total		$	(1,112)

The following amounts were recorded on the balance sheet related to cumulative adjustments of fair value hedges as of December 31, 2022:


Line item on the balance sheet	Carrying Amount of the Hedged Item		Cumulative Decrease in Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Item

Borrowings	$	95,171		(1)	$	(3,830)
Money market and savings deposits	196,520			(2)	(9,847)

(1) The carrying value also includes unamortized subordinated debt issuance costs of $999.

(2) The carrying value also includes an unaccreted purchase accounting fair value premium of $6,367.

Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheets when the “right of offset” exists or when the instruments are subject to an enforceable master netting agreement, which includes the right of the non-defaulting party or non-affected party to offset recognized amounts, including collateral posted with the counterparty, to determine a net receivable or net payable upon early termination of the agreement. Certain of the Company’s derivative instruments are subject to master netting agreements, however the Company has not elected to offset such financial instruments in the consolidated balance sheets. The following table presents the Company's gross derivative positions as recognized in the consolidated balance sheets as well as the net derivative positions, including collateral pledged to the extent the application of such collateral did not reduce the net derivative liability position below zero, had the Company elected to offset those instruments subject to an enforceable master netting agreement:


	Offsetting Derivative Assets				Offsetting Derivative Liabilities
	December 31, 2022		December 31, 2021		December 31, 2022		December 31, 2021
Gross amounts recognized	$	44,273	$	4,990	$	20,251	$	15,733
Gross amounts offset in the consolidated balance sheets	—		—		—		—
Net amounts presented in the consolidated balance sheets	44,273		4,990		20,251		15,733

Gross amounts not offset in the consolidated balance sheets
Less: financial instruments	14,229		4,297		14,229		4,297
Less: financial collateral pledged	—		—		6,022		11,436
Net amounts	$	30,044	$	693	$	—	$	—

Most derivative contracts with clients are secured by collateral. Additionally, in accordance with the interest rate agreements with derivatives dealers, the Company may be required to post margin to these counterparties. As of December 31, 2022 and 2021, the Company had minimum collateral posting thresholds with certain derivative counterparties and had collateral posted of $23,325 and $57,868, respectively, against its obligations under these agreements. Cash pledged as collateral on derivative contracts is recorded in "Other assets" on the consolidated balance sheets.

Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair value of financial instruments:

FASB ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a framework for measuring the fair value of assets and liabilities according to a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that are derived from assumptions based on management’s estimate of assumptions that market participants would use in pricing the asset or liability based on the best information available under the circumstances.

The hierarchy is broken down into the following three levels, based on the reliability of inputs:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs for assets or liabilities that are derived from assumptions based on management’s estimate of assumptions that market participants would use in pricing the assets or liabilities.

The Company records the fair values of financial assets and liabilities on a recurring and non-recurring basis using the following methods and assumptions:


Investment Securities						Investment securities are recorded at fair value on a recurring basis. Fair values for securities are based on quoted market prices, where available. If quoted prices are not available, fair values are based on quoted market prices of similar instruments or are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the pricing relationship or correlation among other benchmark quoted securities. Investment securities valued using quoted market prices of similar instruments or that are valued using matrix pricing are classified as Level 2. When significant inputs to the valuation are unobservable, the available-for-sale securities are classified within Level 3 of the fair value hierarchy. Where no active market exists for a security or other benchmark securities, fair value is estimated by the Company with reference to discount margins for other high-risk securities.

Loans held for sale						Loans held for sale are carried at fair value. Fair value is determined using current secondary market prices for loans with similar characteristics for the mortgage portfolio, that is, using Level 2 inputs. The fair value of commercial loans held for sale is determined using an income approach with various assumptions including expected cash flows, market discount rates, credit metrics and collateral value when appropriate. As such, these are considered Level 3. The guaranteed GNMA optional repurchase loans are excluded from the fair value option.

Derivatives						The fair value of the Company's interest rate swap agreements to facilitate customer transactions are based upon fair values provided from entities that engage in interest rate swap activity and is based upon projected future cash flows and interest rates. The fair value of interest rate lock commitments associated with the mortgage pipeline is based on fees currently charged to enter into similar agreements, and for fixed-rate commitments, the difference between current levels of interest rates and the committed rates is also considered. The fair values of the Company's designated cash flow and fair value hedges are determined by calculating the difference between the discounted fixed rate cash flows and the discounted variable rate cash flows. The fair values of both the Company's hedges, including designated cash flow hedges and designated fair value hedges are based on pricing models that utilize observable market inputs. These financial instruments are classified as Level 2.

OREO						OREO is comprised of commercial and residential real estate obtained in partial or total satisfaction of loan obligations and excess land and facilities held for sale. OREO acquired in settlement of indebtedness is recorded at the lower of the carrying amount of the loan or the fair value of the real estate less costs to sell. Fair value is determined on a nonrecurring basis based on appraisals by qualified licensed appraisers and is adjusted for management’s estimates of costs to sell and holding period discounts. The valuations are classified as Level 3.

Mortgage servicing rights						MSRs are carried at fair value. Fair value is determined using an income approach with various assumptions including expected cash flows, market discount rates, prepayment speeds, servicing costs, and other factors. As such, MSRs are considered Level 3.

Collateral dependent loans						Collateral dependent loans are loans for which, based on current information and events, the Company has determined foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the collateral and it is probable that the creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. Collateral dependent loans are classified as Level 3.

The following table contains the estimated fair values and the related carrying values of the Company's financial instruments. Items which are not financial instruments are not included.


			Fair Value
December 31, 2022	Carrying amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	1,027,052	$	1,027,052	$	—	$	—	$	1,027,052
Investment securities	1,474,176		—		1,474,176		—		1,474,176

Net loans held for investment	9,164,020		—		—		9,048,943		9,048,943
Loans held for sale, at fair value	113,240		—		82,750		30,490		113,240
Interest receivable	45,684		126		6,961		38,597		45,684
Mortgage servicing rights	168,365		—		—		168,365		168,365
Derivatives	48,769		—		48,769		—		48,769
Financial liabilities:
Deposits:
Without stated maturities	$	9,433,860	$	9,433,860	$	—	$	—	$	9,433,860
With stated maturities	1,421,974		—		1,422,544		—		1,422,544
Securities sold under agreement to repurchase and federal funds purchased	86,945		86,945		—		—		86,945
Federal Home Loan Bank advances	175,000		—		175,000		—		175,000
Subordinated debt, net	126,101		—		—		118,817		118,817

Interest payable	8,648		2,571		4,559		1,518		8,648
Derivatives	63,229		—		63,229		—		63,229


	Fair Value
December 31, 2021	Carrying amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	1,797,740	$	1,797,740	$	—	$	—	$	1,797,740
Investment securities	1,681,892		—		1,681,892		—		1,681,892

Net loans held for investment	7,479,103		—		—		7,566,717		7,566,717
Loans held for sale, at fair value	752,223		—		672,924		79,299		752,223
Interest receivable	38,528		36		6,461		32,031		38,528
Mortgage servicing rights	115,512		—		—		115,512		115,512
Derivatives	27,384		—		27,384		—		27,384
Financial liabilities:
Deposits:
Without stated maturities	$	9,705,816	$	9,705,816	$	—	$	—	$	9,705,816
With stated maturities	1,131,081		—		1,137,647		—		1,137,647
Securities sold under agreement to repurchase and federal funds purchased	40,716		40,716		—		—		40,716

Subordinated debt, net	129,544		—		—		133,021		133,021

Interest payable	3,162		140		1,510		1,512		3,162
Derivatives	21,000		—		21,000		—		21,000

The balances and levels of the assets measured at fair value on a recurring basis at December 31, 2022 are presented in the following table:


At December 31, 2022	Quoted prices in active markets for identical assets (liabilities) (level 1)		Significant other observable inputs (level 2)		Significant unobservable inputs (level 3)		Total
Recurring valuations:
Financial assets:
Available-for-sale securities:
U.S. government agency securities	$	—	$	40,062	$	—	$	40,062
Mortgage-backed securities - residential	—		1,034,193		—		1,034,193
Mortgage-backed securities - commercial	—		17,644		—		17,644
Municipal securities	—		264,420		—		264,420
U.S. Treasury securities	—		107,680		—		107,680
Corporate securities	—		7,187		—		7,187
Equity securities, at fair value	—		2,990		—		2,990
Total securities	$	—	$	1,474,176	$	—	$	1,474,176
Loans held for sale, at fair value	$	—	$	56,539	$	30,490	$	87,029
Mortgage servicing rights	—		—		168,365		168,365
Derivatives	—		48,769		—		48,769
Financial Liabilities:
Derivatives	—		63,229		—		63,229

The balances and levels of the assets measured at fair value on a non-recurring basis at December 31, 2022 are presented in the following table:


At December 31, 2022	Quoted prices in active markets for identical assets (liabilities (level 1)		Significant other observable inputs (level 2)		Significant unobservable inputs (level 3)		Total
Non-recurring valuations:
Financial assets:
Other real estate owned	$	—	$	—	$	2,497	$	2,497
Collateral dependent net loans held for investment:


Residential real estate:
1-4 family mortgage	$	—	$	—	$	366	$	366


Commercial real estate:

Non-owner occupied	—		—		2,494		2,494

Total collateral dependent loans	$	—	$	—	$	2,860	$	2,860

The balances and levels of the assets measured at fair value on a recurring basis at December 31, 2021 are presented in the following table:


At December 31, 2021	Quoted prices in active markets for identical assets (liabilities) (level 1)		Significant other observable inputs (level 2)		Significant unobservable inputs (level 3)		Total
Recurring valuations:
Financial assets:
Available-for-sale securities:
U.S. government agency securities	$	—	$	33,870	$	—	$	33,870
Mortgage-backed securities - residential	—		1,269,372		—		1,269,372
Mortgage-backed securities - commercial	—		15,250		—		15,250
Municipal securities	—		338,610		—		338,610
U.S. Treasury securities	—		14,908		—		14,908
Corporate securities	—		6,515		—		6,515
Equity securities, at fair value	—		3,367		—		3,367
Total securities	$	—	$	1,681,892	$	—	$	1,681,892
Loans held for sale, at fair value	$	—	$	672,924	$	79,299	$	752,223
Mortgage servicing rights	—		—		115,512		115,512
Derivatives	—		27,384		—		27,384
Financial Liabilities:
Derivatives	—		21,000		—		21,000

The balances and levels of the assets measured at fair value on a non-recurring basis at December 31, 2021 are presented in the following table:


At December 31, 2021	Quoted prices in active markets for identical assets (liabilities) (level 1)		Significant other observable inputs (level 2)		Significant unobservable inputs (level 3)		Total
Non-recurring valuations:
Financial assets:
Other real estate owned	$	—	$	—	$	6,308	$	6,308
Collateral dependent net loans held for investment:

Construction	$	—	$	—	$	606	$	606
Residential real estate:

Residential line of credit	—		—		592		592
Commercial real estate:
Owner occupied	—		—		729		729
Non-owner occupied	—		—		3,526		3,526
Consumer and other	—		—		24		24
Total collateral dependent loans	$	—	$	—	$	5,477	$	5,477

The following tables present information as of December 31, 2022 and 2021 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a nonrecurring basis:

As of December 31, 2022

Financial instrument

Fair Value

Valuation technique

Significant
unobservable inputs

Range of
inputs

Collateral dependent net loans
held for investment

$

2,860

Valuation of collateral

Discount for comparable sales

10%-35%

Other real estate owned

$

2,497

Appraised value of property less costs to sell

Discount for costs to sell

0%-15%

As of December 31, 2021

Financial instrument

Fair Value

Valuation technique

Significant
unobservable inputs

Range of
inputs

Collateral dependent loans
held for investment

$

5,477

Valuation of collateral

Discount for comparable sales

10%-35%

Other real estate owned

$

6,308

Appraised value of property less costs to sell

Discount for costs to sell

0%-15%

For collateral dependent loans, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. Fair value of the loan's collateral is determined by third-party appraisals, which are then adjusted for estimated selling and closing costs related to liquidation of the collateral. Collateral dependent loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on changes in market conditions from the time of valuation and management's knowledge of the borrower and borrower's business. As of December 31, 2022 and 2021, total amortized cost of collateral dependent loans measured on a non-recurring basis amounted to $3,054 and $5,781, respectively.

Other real estate owned acquired in settlement of indebtedness is recorded at fair value of the real estate less estimated costs to sell. Subsequently, it may be necessary to record nonrecurring fair value adjustments for declines in fair value. Any write-downs based on the asset's fair value at the date of foreclosure are charged to the allowance for credit losses. Appraisals for both collateral dependent loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the lending administrative department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry wide statistics. Collateral dependent loans that are dependent on recovery through sale of equipment, such as farm equipment, automobiles and aircrafts are generally valued based on public source pricing or subscription services while more complex assets are valued through leveraging brokers who have expertise in the collateral involved.

Fair value option

The following table summarizes the Company's loans held for sale as of the dates presented:


	December 31,
	2022		2021
Loans held for sale under a fair value option:
Commercial loans held for sale	$	30,490	$	79,299

Mortgage loans held for sale	82,750		672,924
Total loans held for sale, at fair value	113,240		752,223
Loans held for sale not accounted for under a fair value option:
Mortgage loans held for sale - guaranteed GNMA repurchase option	26,211		—
Total loans held for sale	$	139,451	$	752,223

Mortgage loans held for sale

The Company measures mortgage loans originated for sale at fair value under the fair value option as permitted under ASC 825, "Financial Instruments" ("ASC 825"). Electing to measure these assets at fair value reduces certain timing differences and more accurately matches the changes in fair value of the loans with changes in the fair value of derivative instruments used to economically hedge them.

Net losses of $13,677 and $16,976 and a net gain of $24,233 resulting from fair value changes of mortgage loans were recorded in income during the years ended December 31, 2022, 2021, and 2020, respectively. The amount does not reflect changes in fair values of related derivative instruments used to hedge exposure to market-related risks associated with these mortgage loans. The net change in fair value of these loans HFS and derivatives resulted in net losses of $17,633 and $33,284 and a net gain of $31,192 for the years ended December 31, 2022, 2021, and 2020, respectively. The change in fair value of both loans held for sale and the related derivative instruments are recorded in Mortgage Banking Income in the consolidated statements of income. Election of the fair value option allows the Company to reduce the accounting volatility that would otherwise result from the asymmetry created by accounting for the financial instruments at the lower of cost or fair value and the derivatives at fair value.

The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however, given the short-term period that the Company holds these mortgage loans held for sale, valuation adjustments attributable to instrument-specific credit risk is nominal.

During the year ended December 31, 2022, the Company identified a more-than-trivial benefit associated with serviced GNMA loans previously sold that are contractually delinquent greater than 90 days and began recording this guaranteed repurchase option on the balance sheet on a prospective basis without impact to prior periods. See Note 1, "Basis of presentation" within this Report for additional information. Rebooked GNMA optional repurchase loans do not meet the requirements under FASB ASC Topic 825 to be accounted for under the fair value option. As such, these loans are excluded from the below disclosures. As of December 31, 2021, there were $91,924 of delinquent GNMA loans previously sold that the Company did not record on its consolidated balance sheets as the Company determined there not to be a more-than-trivial benefit based on an analysis of interest rates and an assessment of potential reputational risk associated with these loans.

Commercial loans held for sale

The Company also has a portfolio of shared national credits and institutional healthcare loans that were acquired during 2020 in the merger with Franklin. These commercial loans are also being measured under the fair value option. As such, these loans are excluded from the allowance for credit losses. The following tables sets forth the changes in fair value associated with this portfolio for the years ended December 31, 2022, 2021, and 2020.











	Year Ended December 31, 2022
	Principal Balance		Fair Value Discount		Fair Value
Carrying value at beginning of period	$	86,762	$	(7,463)	$	79,299
Change in fair value:
Pay-downs and pay-offs	(43,676)		—		(43,676)
Write-offs to discount	(8,729)		8,729		—
Changes in valuation included in other noninterest income	—		(5,133)		(5,133)
Carrying value at end of period	$	34,357	$	(3,867)	$	30,490











	Year Ended December 31, 2021
	Principal balance		Fair Value discount		Fair Value
Carrying value at beginning of period	$	239,063	$	(23,660)	$	215,403

Change in fair value:
Pay-downs and pay-offs	(141,002)		—		(141,002)
Write-offs to discount	(8,563)		8,563		—
Changes in valuation included in other noninterest income	(2,736)		7,634		4,898
Carrying value at end of period	$	86,762	$	(7,463)	$	79,299

In addition to the gain of $4,898 recognized on the change in fair value of the portfolio during the year ended December 31, 2021, the Company recognized an additional gain of $6,274 related to the pay-off of a loan that had been partially charged off prior to acquisition of the portfolio.


	Year Ended December 31, 2020
	Principal balance		Fair Value discount		Fair Value
Carrying value at beginning of period	$	—	$	—	$	—
Commercial loans held for sale acquired from Franklin	350,269		(24,063)		326,206
Change in fair value:
Pay-downs and pay-offs	(111,206)		—		(111,206)
Write-offs to discount	—		(2,825)		(2,825)
Changes in valuation included in other noninterest income	—		3,228		3,228
Carrying value at end of period	$	239,063	$	(23,660)	$	215,403

Interest income on loans held for sale measured at fair value is accrued as it is earned based on contractual rates and is reflected in interest income in the consolidated statements of income.

The following table summarizes the differences between the fair value and the principal balance for loans held for sale and nonaccrual loans measured at fair value as of December 31, 2022 and 2021:


December 31, 2022	Aggregate fair value		Aggregate Unpaid Principal Balance		Difference
Mortgage loans held for sale measured at fair value	$	82,750	$	81,520	$	1,230
Commercial loans held for sale measured at fair value	21,201		22,126		(925)

Nonaccrual commercial loans held for sale	9,289		12,231		(2,942)

December 31, 2021	Aggregate fair value		Aggregate Unpaid Principal Balance		Difference
Mortgage loans held for sale measured at fair value	$	672,924	$	658,017	$	14,907
Commercial loans held for sale measured at fair value	74,082		76,863		(2,781)

Nonaccrual commercial loans held for sale	5,217		9,899		(4,682)

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Parent Company Financial Statements

12 Months Ended

Dec. 31, 2022

Condensed Financial Information Disclosure [Abstract]

Parent Company Financial Statements

Parent company financial statements:

The following information presents the condensed balance sheets, statements of income, and cash flows of FB Financial Corporation as of December 31, 2022 and 2021 and for each of the years in the three-year period ended December 31, 2022.


	As of December 31,
Balance sheets	2022		2021
Assets
Cash and cash equivalents(1)	$	3,052	$	21,515


Investment in subsidiaries(1)	1,337,657		1,427,784
Other assets	16,654		14,487
Goodwill	29		29
Total assets	$	1,357,392	$	1,463,815
Liabilities and shareholders' equity
Liabilities
Borrowings	$	30,930	$	30,930
Accrued expenses and other liabilities	1,037		283
Total liabilities	31,967		31,213
Shareholders' equity
Common stock	46,738		47,549
Additional paid-in capital	861,588		892,529
Retained earnings	586,532		486,666
Accumulated other comprehensive income	(169,433)		5,858
Total shareholders' equity	1,325,425		1,432,602
Total liabilities and shareholders' equity	$	1,357,392	$	1,463,815

(1) Eliminates in Consolidation


	Years Ended December 31,
Statements of income	2022		2021		2020
Income


Dividend income from bank subsidiary(1)	$	49,000	$	122,500	$	49,706

Dividend income from nonbank subsidiary(1)	—		2,525		—
Gain on investments	—		249		217

Other income	89		15		1,732
Total income	49,089		125,289		51,655
Expenses
Interest expense	1,587		2,455		3,122
Salaries, legal and professional fees	1,590		1,445		1,458
Other noninterest expense	771		1,812		283
Total expenses	3,948		5,712		4,863
Income before income tax benefit and equity in undistributed earnings of subsidiaries	45,141		119,577		46,792
Federal and state income tax benefit	(1,002)		(2,992)		(1,155)
Income before equity in undistributed earnings of subsidiaries	46,143		122,569		47,947
Equity in undistributed earnings from bank subsidiary(1)	76,232		68,351		15,168
Equity in undistributed earnings from nonbank subsidiary(1)	2,180		(635)		506
Net income	$	124,555	$	190,285	$	63,621

(1) Eliminates in Consolidation


	Years Ended December 31,
Statements of cash flows	2022		2021		2020
Operating Activities
Net income	$	124,555	$	190,285	$	63,621
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed income of bank subsidiary	(76,232)		(68,351)		(15,168)
Equity in undistributed income of nonbank subsidiary	(2,180)		635		(506)
Gain on investments	—		(249)		(217)

Stock-based compensation expense	9,857		10,282		10,214
Increase in other assets	(802)		(3,916)		(9,717)
Decrease in other liabilities	(7,381)		(678)		(11,853)

Net cash provided by operating activities	47,817		128,008		36,374
Investing Activities


Net cash paid in business combinations (See Note 2)	—		—		(35,505)
Proceeds from sale of equity securities	—		1,422		—
Net cash provided by (used in) investing activities	—		1,422		(35,505)
Financing Activities

Payments on subordinated debt	—		(60,000)		—
Accretion of subordinated debt fair value premium	—		(369)		(436)
Payments on other borrowings	—		(15,000)		—
Proceeds from other borrowings	—		—		15,000
Share based compensation withholding payments	(2,842)		(10,158)		(1,510)
Net proceeds from sale of common stock under employee stock purchase program	1,212		1,480		978
Repurchase of common stock	(39,979)		(7,595)		—
Dividends paid on common stock	(24,503)		(20,866)		(14,177)
Dividend equivalent payments made upon vesting of equity compensation	(168)		(717)		(87)
Net cash used in financing activities	(66,280)		(113,225)		(232)
Net (decrease) increase in cash and cash equivalents	(18,463)		16,205		637
Cash and cash equivalents at beginning of year	21,515		5,310		4,673
Cash and cash equivalents at end of year	$	3,052	$	21,515	$	5,310
Supplemental noncash disclosures:
Dividends declared not paid on restricted stock units	$	222	$	400	$	238
Noncash dividend from bank subsidiary	—		—		956
Noncash security distribution to bank subsidiary	—		2,646		—

Segment Reporting

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Segment Reporting

Segment reporting:

The Company and the Bank are engaged in the business of banking and provide a full range of financial services. The Company determines reportable segments based on the significance of the segment’s operating results to the overall Company, the products and services offered, customer characteristics, processes and service delivery of the segments and the regular financial performance review and allocation of resources by the Chief Executive Officer, the Company’s chief operating decision maker. The Company has identified two distinct reportable segments—Banking and Mortgage. The Company’s primary segment is Banking, which provides a full range of deposit and lending products and services to corporate, commercial and consumer customers. The Company also originates conforming residential mortgage loans through the Mortgage segment, which activities also include the servicing of residential mortgage loans and the packaging and securitization of loans to governmental agencies. The Company’s mortgage division represents a distinct reportable segment which differs from the Company’s primary business of commercial and retail banking.

The financial performance of the Mortgage segment is assessed based on results of operations reflecting direct revenues and expenses and allocated expenses. This approach gives management a better indication of the operating performance of the segment. When assessing the Banking segment’s financial performance, the CEO utilizes reports with indirect revenues and expenses including but not limited to the investment portfolio, electronic delivery channels and areas that primarily support the banking segment operations. Therefore, these are included in the results of the Banking segment. Other indirect revenue and expenses related to general administrative areas are also included in the internal financial results reports of the Banking segment utilized by the CEO for analysis and are thus included for Banking segment reporting. Additionally, the Banking segment includes the results of the Company's specialty lending group, which is concentrated in manufactured housing lending. The Mortgage segment utilizes funding sources from the Banking segment in order to fund mortgage loans that are ultimately sold on the secondary market and uses proceeds from loan sales to repay obligations due to the Banking segment.

During the year ended December 31, 2022, the Company exited the direct-to-consumer internet delivery channel, which is one of two delivery channels in the Mortgage segment. As a result of exiting this channel, the Company incurred $12,458 of restructuring expenses during the year ended December 31, 2022. The repositioning of the Mortgage segment does not qualify to be reported as discontinued operations. The Company plans to continue originating and selling residential mortgage loans within its Mortgage segment through its traditional mortgage retail channel, retain mortgage servicing rights and continue holding residential mortgage loans in the loan HFI portfolio.

Interest rate lock commitment volume and sales volume by delivery channel included in the Mortgage segment is as follows for the periods indicated:


	Years Ended December 31,
		2022			2021			2020
Interest rate lock commitment volume by delivery channel:
Direct-to-consumer		$	663,848		$	3,745,430		$	5,539,862
Retail		2,036,658			3,414,638			3,399,174
Total		$	2,700,506		$	7,160,068		$	8,939,036
Interest rate lock commitment volume % by delivery channel:
Direct-to-consumer		24.6		%	52.3		%	62.0		%
Retail		75.4		%	47.7		%	38.0		%
Mortgage sales by delivery channel:
Direct-to-consumer		$	1,031,810		$	3,328,216		$	3,751,813
Retail		1,958,849			2,873,861			2,483,336
Total		$	2,990,659		$	6,202,077		$	6,235,149
Mortgage sales % by delivery channel:
Direct-to-consumer		34.5		%	53.7		%	60.2		%
Retail		65.5		%	46.3		%	39.8		%

The following tables provide segment financial information for the periods indicated:


Year Ended December 31, 2022	Banking(4)		Mortgage		Consolidated
Net interest income	$	412,237	$	(2)	$	412,235
Provisions for credit losses(1)	18,982		—		18,982
Mortgage banking income(2)	—		83,679		83,679
Change in fair value of mortgage servicing rights, net of hedging(2)	—		(10,099)		(10,099)
Other noninterest income	41,320		(233)		41,087
Depreciation and amortization	7,035		982		8,017
Amortization of intangibles	4,585		—		4,585

Other noninterest expense(3)	240,096		95,648		335,744
Income (loss) before income taxes	$	182,859	$	(23,285)	$	159,574
Income tax expense					35,003
Net income applicable to FB Financial Corporation and noncontrolling interest					124,571
Net income applicable to noncontrolling interest(4)					16
Net income applicable to FB Financial Corporation					$	124,555
Total assets	$	12,228,451	$	619,305	$	12,847,756
Goodwill	242,561		—		242,561

(1) Includes $8,589 in provision for credit losses on unfunded commitments.

(2) Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income.

(3) Includes $12,458 in Mortgage restructuring expenses in the Mortgage segment related to the exit from the direct-to-consumer delivery channel.

(4) Banking segment includes noncontrolling interest.


Year Ended December 31, 2021	Banking(3)		Mortgage		Consolidated
Net interest income	$	347,342	$	28	$	347,370
Provisions for credit losses(1)	(40,993)		—		(40,993)
Mortgage banking income(2)	—		179,682		179,682
Change in fair value of mortgage servicing rights, net of hedging(2)	—		(12,117)		(12,117)
Other noninterest income	61,073		(383)		60,690
Depreciation and amortization	7,054		1,362		8,416
Amortization of intangibles	5,473		—		5,473

Other noninterest expense	220,283		139,395		359,678
Income before income taxes	$	216,598	$	26,453	$	243,051
Income tax expense					52,750


Net income applicable to FB Financial Corporation and noncontrolling interest					190,301
Net income applicable to noncontrolling interest(3)					16
Net income applicable to FB Financial Corporation					$	190,285
Total assets	$	11,540,560	$	1,057,126	$	12,597,686
Goodwill	242,561		—		242,561

(1)Includes $(1,998) in provision for credit losses on unfunded commitments.

(2)Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income.

(3)Banking segment includes noncontrolling interest.


Year Ended December 31, 2020	Banking(1)(5)		Mortgage(1)		Consolidated
Net interest income	$	265,581	$	77	$	265,658
Provisions for credit losses(2)	107,967		—		107,967
Mortgage banking income(3)	—		289,702		289,702
Change in fair value of mortgage servicing rights, net of hedging(3)	—		(34,374)		(34,374)
Other noninterest income	46,527		—		46,527
Depreciation and amortization	6,425		1,111		7,536
Amortization of intangibles	5,323		—		5,323

Other noninterest expense(4)	212,890		151,336		364,226
(Loss) income before income taxes	$	(20,497)	$	102,958	$	82,461
Income tax expense					18,832


Net income applicable to FB Financial Corporation and noncontrolling interest					63,629
Net income applicable to noncontrolling interest(5)					8
Net income applicable to FB Financial Corporation					$	63,621
Total assets	$	10,254,324	$	953,006	$	11,207,330
Goodwill	242,561		—		242,561

(1)As previously reported on Form 10-K filed with the SEC on February 25, 2022, results have been revised from originally reported to reflect a $26,416 reclassification of mortgage retail footprint total net contribution from the Banking segment to the Mortgage segment.

(2)Includes $13,361 in provision for credit losses on unfunded commitments.

(3)Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income.

(4)Includes $33,824 of merger costs in the Banking segment related to the Farmers National acquisition and the Franklin merger and $1,055 of merger costs in the Mortgage segment related to the Franklin merger.

(5)Banking segment includes noncontrolling interest.

The Banking segment provides the Mortgage segment with a warehouse line of credit that is used to fund mortgage loans held for sale. The warehouse line of credit, which is eliminated in consolidation, is limited based on interest income earned by the Mortgage segment. The amount of interest paid by the Mortgage segment to the Banking segment under this warehouse line of credit is recorded as interest income to the Company's Banking segment and as interest expense to the Mortgage segment, both of which are included in the calculation of net interest income for each segment. The amount of interest paid by the Mortgage segment to the Banking segment under this warehouse line of credit was $18,906, $23,910, and $14,810 for the years ended December 31, 2022, 2021, and 2020, respectively.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 32
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 22
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI https://asc.fasb.org/topic&trid=2134510

+ Details

Minimum Capital Requirements

12 Months Ended

Dec. 31, 2022

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

Minimum Capital Requirements

Minimum capital requirements:

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action.

Under regulatory guidance for non-advanced approaches institutions, the Bank and Company are required to maintain minimum capital ratios as outlined in the table below. Additionally, under U.S. Basel III Capital Rules, the decision was made to opt out of including accumulated other comprehensive income in regulatory capital. As of December 31, 2022 and 2021, the Bank and Company met all capital adequacy requirements to which they are subject.

In March 2020, the OCC, the Board of Governors of the Federal Reserve System, and the FDIC announced a final rule to delay the estimated impact on regulatory capital stemming from the implementation of CECL. The final rule maintained the three-year transition option in the previous rule and provides banks the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period (five-year transition option). The Company adopted the capital transition relief over the permissible five-year period and delayed the initial impact of CECL adoption plus 25% of the quarterly increases in ACL through December 31, 2021. As of January 1, 2022, the cumulative amount of the transition adjustments became fixed and are being phased out of regulatory capital calculations evenly over a three year period, with 75% of the transition provision’s impact being recognized in 2022, 50% recognized in 2023, and 25% recognized in 2024.

Actual and required capital amounts and ratios are included below as of the dates indicated.


As of December 31, 2022	Actual				Minimum Capital adequacy with capital buffer			To be well capitalized under prompt corrective action provisions
	Amount		Ratio			Amount		Ratio		Amount		Ratio

Total Capital (to risk-weighted assets)
FB Financial Corporation	$	1,528,344	13.1	%		$	1,225,161	10.5	%	N/A		N/A
FirstBank	1,506,543		12.9	%		1,222,922		10.5	%	$	1,164,688	10.0	%
Tier 1 Capital (to risk-weighted assets)
FB Financial Corporation	$	1,315,386	11.3	%		$	991,797	8.5	%	N/A		N/A
FirstBank	1,293,585		11.1	%		989,985		8.5	%	$	931,750	8.0	%
Tier 1 Capital (to average assets)
FB Financial Corporation	$	1,315,386	10.5	%		$	499,648	4.0	%	N/A		N/A
FirstBank	1,293,585		10.4	%		499,194		4.0	%	$	623,992	5.0	%
Common Equity Tier 1 Capital (to risk-weighted assets)
FB Financial Corporation	$	1,285,386	11.0	%		$	816,774	7.0	%	N/A		N/A
FirstBank	1,293,585		11.1	%		815,281		7.0	%	$	757,047	6.5	%


As of December 31, 2021	Actual				Minimum Capital adequacy with capital buffer			To be well capitalized under prompt corrective action provisions
	Amount		Ratio			Amount		Ratio		Amount		Ratio

Total Capital (to risk-weighted assets)
FB Financial Corporation	$	1,434,581	14.5	%		$	1,039,984	10.5	%	N/A		N/A
FirstBank	1,396,407		14.1	%		1,038,760		10.5	%	$	989,295	10.0	%
Tier 1 Capital (to risk-weighted assets)
FB Financial Corporation	$	1,251,874	12.6	%		$	841,892	8.5	%	N/A		N/A
FirstBank	1,213,700		12.3	%		840,901		8.5	%	$	791,436	8.0	%
Tier 1 Capital (to average assets)
FB Financial Corporation	$	1,251,874	10.5	%		$	474,831	4.0	%	N/A		N/A
FirstBank	1,213,700		10.2	%		474,044		4.0	%	$	592,555	5.0	%
Common Equity Tier 1 Capital (to risk-weighted assets)
FB Financial Corporation	$	1,221,874	12.3	%		$	693,322	7.0	%	N/A		N/A
FirstBank	1,213,700		12.3	%		692,507		7.0	%	$	643,042	6.5	%

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

+ References + Details

Employee Benefit Plans	12 Months Ended
Employee Benefit Plans	Dec. 31, 2022
Retirement Benefits [Abstract]
Employee Benefit Plans	Employee benefit plans: (A)—401(k) plan: The Bank has a 401(k) Plan (the “Plan”) whereby substantially all employees participate in the Plan. Employees may contribute the maximum amount of their eligible compensation subject to certain limits based on the federal tax laws. The Bank has an employer match of 50% of participant contributions not to exceed 6% of an employee’s total compensation and the vesting term of profit sharing contributions is a three-year ratable period. For the years ended December 31, 2022, 2021 and 2020, the matching portions provided by the Bank to this Plan were $3,686, $3,923 and $3,198 respectively. (B)—Acquired supplemental retirement plans: The Company has nonqualified supplemental retirement plans for certain former employees that were assumed through previous acquisitions. As of December 31, 2022 and 2021, other liabilities on the consolidated balance sheets included post-retirement benefits payable of $2,424 and $2,487, respectively, related to these plans. For the years ended December 31, 2022, 2021 and 2020, the Company recorded expense of $119, $94 and $29, respectively, related to these plans and payments to the participants were $181, $172 and $131 in 2022, 2021 and 2020, respectively. The Company also acquired single premium life insurance policies on these individuals. At December 31, 2022 and 2021, cash surrender value of bank-owned life insurance was $75,329 and $73,519, respectively. Income related to these policies (net of related insurance premium expense) amounted to $1,452, $1,542 and $1,556 in 2022, 2021 and 2020, respectively.

Stock-Based Compensation

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation:

Restricted Stock Units

The Company grants RSUs under compensation arrangements for the benefit of employees, executive officers, and directors. RSU grants are subject to time-based vesting. The total number of restricted stock units granted represents the maximum number of restricted stock units eligible to vest based upon the service conditions set forth in the grant agreements.

The following table summarizes changes in restricted stock units for the year ended December 31, 2022.




	Restricted Stock Units Outstanding	Weighted Average Grant Date Fair Value
Balance at beginning of period (unvested)	492,320	$	36.06
Granted	145,000	43.67
Vested	(221,074)	36.27
Forfeited	(51,091)	34.99
Balance at end of period (unvested)	365,155	$	39.02

The total fair value of restricted stock units vested and released was $8,018, $16,340, and $5,619 for the years ended December 31, 2022, 2021, and 2020, respectively.

The compensation cost related to stock grants and vesting of restricted stock units was $7,372, $8,907, and $9,213 for the years ended December 31, 2022, 2021, and 2020, respectively. This included amounts paid related to director grants and compensation elected to be settled in stock amounting to $663, $635, and $898 during the years ended December 31, 2022, 2021, and 2020, respectively.

As of December 31, 2022, there was $8,891 of total unrecognized compensation cost related to unvested restricted stock units which is expected to be recognized over a weighted-average period of 2.3 years. Additionally, as of December 31, 2022, there were 1,723,860 shares available for issuance under the Company's stock compensation plans. As of December 31, 2022 and 2021, there were $292 and $274, respectively, accrued in other liabilities related to dividend equivalent units declared to be paid upon vesting and distribution of the underlying restricted stock units.

Performance Based Restricted Stock Units

The Company awards performance-based restricted stock units to executives and other officers and employees. Under the terms of the awards, the number of units that will vest and convert to shares of common stock will be based on the Company's performance relative to a predefined peer group over a fixed three-year performance period. The number of shares issued upon vesting will range from 0% to 200% of the PSUs granted. The Company's performance relative to the peer group will be measured based on calculated non-GAAP adjusted return on average tangible common equity, adjusted for unusual gains/losses, merger expenses, and other items as approved by the compensation committee of the Company's board of directors. Compensation expense for PSUs is estimated each period based on the fair value of the Company's stock at the grant date and the most probable outcome of the performance condition, adjusted for the passage of time within the performance period of the awards

The following table summarizes information about the changes in PSUs as of and for the year ended December 31, 2022.






	Performance Stock Units Outstanding	Weighted Average Grant Date Fair Value
Balance at beginning of period (unvested)	115,750	$	40.13
Granted	69,291	44.44
Vested	—	—
Forfeited or expired	(23,374)	42.65
Balance at end of period (unvested)	161,667	$	41.73

The following table summarizes data related to the Company's outstanding PSUs as of December 31, 2022:


Grant Year	Grant Price		Vest Year	PSUs Outstanding
2020 (1)	$	36.21	2023	44,319
2021 (1)	$	43.20	2024	56,406
2022 (2)	$	44.44	2025	60,942
(1)Vesting factor will be either at 0%, 25%, 100%, or 200% of PSUs outstanding based on the Company's performance relative to a predefined peer group over a fixed three-year performance period. (2)Vesting factor will be interpolated between 0% and 200% of PSUs outstanding based on the Company's performance relative to a predefined peer group over a fixed three-year performance period.

The Company recorded compensation cost of $2,485, $1,375, and $1,001 for the years ended December 31, 2022, 2021, and 2020, respectively. As of December 31, 2022, maximum unrecognized compensation cost at 200% payout related to the unvested PSUs was $8,638, and the weighted average remaining performance period over which the cost could be recognized was 1.84 years.

Employee Stock Purchase Plan:

The Company maintains an employee stock purchase plan under which employees, through payroll deductions, are able to purchase shares of Company common stock. The employee purchase price is 95% of the lower of the market price on the first or last day of the offering period. The maximum number of shares issuable during any offering period is 200,000 shares and a participant may not purchase more than 725 shares during any offering period (and, in any event, no more than $25 worth of common stock in any calendar year). There were 26,950, 37,310, and 30,179 shares of common stock issued under the ESPP with proceeds from employee payroll withholdings of $1,087, $1,190, and $919 during the years ended December 31, 2022, 2021, and 2020, respectively. As of December 31, 2022, there were 2,314,746 shares available for issuance under the ESPP.

Related Party Transactions

12 Months Ended

Dec. 31, 2022

Related Party Transactions

Related party transactions:

(A) Loans:

The Bank has made and expects to continue to make loans to the directors, certain management, significant shareholders, and executive officers of the Company and their related interests in the ordinary course of business, in compliance with regulatory requirements.

An analysis of loans to executive officers, certain management, and directors of the Bank and their related interests is presented below:


Loans outstanding at January 1, 2022	$	29,010
New loans and advances	67,024
Change in related party status	(9,939)
Repayments	(3,536)
Loans outstanding at December 31, 2022	$	82,559

Unfunded commitments to certain executive officers, certain management and directors and their related interests totaled $31,564 and $10,994 at December 31, 2022 and 2021, respectively.

(B) Deposits:

The Bank held deposits from related parties totaling $347,660 and $312,956 as of December 31, 2022 and 2021, respectively.

(C) Leases:

The Bank leases various office spaces from entities owned by certain directors of the Company under varying terms. Lease expense for these properties totaled $396, $497, and $510 for the years ended December 31, 2022, 2021, and 2020.

(D) Aviation lease and time sharing agreement:

During the year ended December 31, 2021, the Bank formed a subsidiary, FBK Aviation, LLC and purchased an aircraft under this entity. FBK Aviation, LLC also maintains a non-exclusive aircraft lease agreement with an entity owned by one of the Company's directors. During the years ended December 31, 2022 and 2021, the Company recognized income amounting to $52 and $21, respectively, under this agreement. Additionally, the Company is a participant to an aviation time sharing agreement for an aircraft owned by an entity that is owned by one of the Company's directors and one of the Company's former directors. During the years ended December 31, 2021 and 2020, the Company made payments of $32 and $161 under this agreement, respectively. No such payments were made during the year ended December 31, 2022.

(E) Registration rights agreement:

The Company is party to a registration rights agreement with its former majority shareholder entered into in connection with the 2016 IPO, under which the Company is responsible for payment of expenses (other than underwriting discounts and commissions) relating to sales to the public by the shareholder of shares of the Company’s common stock beneficially owned by him. Such expenses include registration fees, legal and accounting fees, and printing costs payable by the Company and expensed when incurred. During the year ended December 31, 2021, the Company paid $605 under this agreement related to the secondary offering completed during the second quarter of 2021. There were no such expenses during the years ended December 31, 2022 or 2020.

(F) Equity investment in preferred stock:

During the year ended December 31, 2022, the Company invested in preferred stock of a privately held entity of which an executive officer of the Company is on the Board of directors of the investee. This investment is included in other assets on the consolidated balance sheets with a carrying amount of $10,000 as of December 31, 2022 and is being accounted for as an equity security without readily determinable market value. No gains or losses have been recognized to date associated with this investment.

Basis of Presentation (Policies)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation:

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and general banking industry. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and the reported results of operations for the year then ended. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for credit losses and the determination of any impairment of goodwill or intangible assets.

The consolidated financial statements include the accounts of the Company, FBRM, the Bank, and its’ wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation without any impact on the reported amounts of net income or shareholders’ equity.

Certain accounting policies identified below were modified during the year ended December 31, 2022. Please refer to the Company's audited financial statements on Form 10-K filed on February 25, 2022 for accounting policies in place as of December 31, 2021.

Cash flows

Cash flows:For purposes of reporting consolidated cash flows, cash and cash equivalents include cash on hand, amounts due from banks, federal funds sold and interest earning deposits in other financial institutions with maturities of less than 90 days at the date of purchase. These amounts are reported in the consolidated balance sheets caption “Cash and cash equivalents.” Net cash flows are reported for loans held for investment, deposits and short-term borrowings.

Cash and cash equivalents

Cash and cash equivalents:The Company considers all highly liquid unrestricted investments with a maturity of three months or less when purchased to be cash equivalents. This includes cash, federal funds sold, reverse repurchase agreements and interest-bearing deposits in other financial institutions.

Investment securities

Investment securities:

Debt securities are classified as held to maturity and carried at amortized cost, excluding accrued interest, when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available-for-sale when they might be sold before maturity. Available-for-sale debt securities are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of applicable taxes. Unrealized losses resulting from credit losses for available-for-sale debt securities are recognized in earnings as a provision for credit losses. Unrealized losses that do not result from credit losses are excluded from earnings and reported in equity as accumulated other comprehensive income, net of applicable taxes. Accrued interest receivable is separated from other components of amortized cost and presented separately on the consolidated balance sheets.

Equity securities with readily determinable market values are carried at fair value on the balance sheet with any periodic changes in value made through adjustments to the statement of income. Equity securities without readily determinable market values are carried at cost less impairment and included in other assets on the consolidated balance sheets.

Interest income includes the amortization and accretion of purchase premium and discount. Premiums and discounts on securities are amortized on the level-yield method anticipating prepayments based upon the prior three month average monthly prepayments when available. The sale and purchase of investment securities are recognized on a trade date basis with gains and losses on sales being determined using the specific identification method.

The Company evaluates available-for-sale securities for expected credit losses at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. For securities in an unrealized loss position, consideration is given to the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing an issuer’s financial condition, the Company considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition.

When credit losses are expected to occur, the amount of the expected credit loss recognized in earnings depends on the Company's intention to sell the security or if it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If the Company intends to sell the security or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the expected credit loss recognized in earnings is equal to the entire difference between its amortized cost basis and its fair value at the date it was determined to be impaired due to credit losses or other factors. The previous amortized cost basis less the impairment recognized in earnings becomes the new amortized cost basis of the investment.

However, if the Company does not intend to sell the security and it is not more likely than not to be required to sell the security before recovery of its amortized cost basis, the difference between the amortized cost and the fair value is separated into the amount representing the credit loss and the amount related to all other factors. If the Company determines a decline in fair value below the amortized cost basis of an available-for-sale investment security has resulted from credit related factors, the Company records a credit loss through an allowance for credit losses. The allowance for credit losses is limited by the amount that the fair value is less than amortized cost. The amount of the allowance for credit losses is determined based on the present value of cash flows expected to be collected and is recognized as a charge to earnings. The amount of the impairment related to other, non-credit related, factors is recognized in other comprehensive income, net of applicable taxes.

The Company did not record any provision for credit losses for its available-for-sale debt securities during the years ended December 31, 2022 or 2021, as the majority of the investment portfolio is government guaranteed and declines in fair value below amortized cost were determined to be non-credit related.

Federal Home Loan Bank stock

Federal Home Loan Bank stock:The Bank accounts for its investments in FHLB stock in accordance with FASB ASC Topic 942-325 "Financial Services-Depository and Lending-Investments-Other." FHLB stock does not have a readily determinable fair value because its ownership is restricted and lacks a market. FHLB stock is carried at cost and evaluated for impairment.

Loans held for sale

Loans held for sale:

Mortgage loans held for sale

Mortgage loans originated and intended for sale in the secondary market are carried at fair value as permitted under the guidance in ASC 825, “Financial Instruments” (“ASC 825”). The change in fair value of both mortgage loans held for sale and the related derivative instruments are recorded in “Mortgage banking income” in the Consolidated Statements of Income. Gains and losses on sale are recognized at the time the loan is closed. Pass through origination costs and related loan fees are also included in “Mortgage banking income”.

Periodically, the Company transfers mortgage loans originated for sale in the secondary markets into the loan HFI portfolio based on current market conditions, the overall secondary marketability and status of the loan. During the years ended December 31, 2022, 2021 and 2020, the Company transferred $24,479, $86,315 and $55,766, respectively, of residential mortgage loans into its loans held for investment portfolio. The loans are transferred into the portfolio at fair value at the date of transfer. Additionally, occasionally the Company will transfer loans from the held for investment portfolio into loans held for sale. At the time of the transfer, loans are marked to fair value through the allowance for credit losses and reclassified to loans held for sale. During the years ended December 31, 2021 and 2020, the Company transferred $1,188 and $2,116, respectively, from the portfolio to loans held for sale, excluding GNMA repurchases discussed below. There were no such transfers during the year ended December 31, 2022.

The Company sells mortgage loans originated for sale on the secondary market to GNMA and retains servicing rights after sale. Under the GNMA optional repurchase program, financial institutions are permitted to buy back individual delinquent mortgage loans that meet certain criteria from the securitized loan pool for which the institution provides servicing. At the servicer’s option and without GNMA’s prior authorization, the servicer may repurchase such a delinquent loan for an amount equal to 100 percent of the remaining principal balance of the loan. These loans are held for investment until certain performance criteria is met and they meet held for sale criteria. During the years ended December 31, 2022, 2021, and 2020, the Company repurchased GNMA loans of $20,593, $40,417, and $10,586, respectively, into loans held for investment. The Company transferred $46,364, $9,220 and $9,367 during the years ended December 31, 2022, 2021, and 2020, respectively, of these repurchased loans from loans held for investment to loans held for sale.

Under FASB ASC Topic 860, “Transfers and Servicing,” this buy-back option is considered a conditional option until the delinquency criteria are met, at which time the option becomes unconditional. When the Company is deemed to have regained effective control over these loans under the unconditional buy-back option, the loans can no longer be reported as sold and must be recorded on the balance sheet, regardless of whether the Company intends to exercise the buy-back option if the buyback options provides the transferor a more-than-trivial benefit. During the year ended December 31, 2022, the Company identified a more-than-trivial benefit associated with these loans and rebooked them onto the consolidated balance sheets, which also aligns with developing industry best practice. As of December 31, 2022, the Company had $26,211 in these optional rights to repurchase delinquent GNMA loans. There were no such loans identified with a more-than-trivial benefit as of December 31, 2021. The fair value option election does not apply to the GNMA optional repurchase loans which do not meet the requirements under FASB ASC Topic 825. These loans are reported at current unpaid principal balance in HFS on the consolidated balance sheets with the offsetting liability being reported in borrowings. These are considered nonperforming assets as the Company does not earn any interest on the unexercised option to repurchase these loans.

Commercial loan held for sale

During the year ended December 31, 2020, the Company acquired a portfolio of commercial loans, including shared national credits and institutional healthcare loans, as part of the its merger with Franklin Financial Network, Inc. and its wholly-owned subsidiaries (collectively, "Franklin") that the Company accounts for as HFS under the fair value option. As of December 31, 2022 and 2021, the fair value of these loans included in loans held for sale at fair value on the consolidated balances sheets amounted to $30,490 and $79,299, respectively. During the years ended December 31, 2022, 2021, and 2020, net (losses) gains of $(5,133), $11,172, and $3,228, respectively, from changes in fair value of these loans was included in other noninterest income on the consolidated statements of income.

Loans (excluding purchased credit deteriorated loans)

Loans (excluding purchased credit deteriorated loans):

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are stated at amortized cost. Amortized cost is equal to the principal amount outstanding less any purchase accounting discount or premium net of any accretion or amortization recognized to date. Interest on loans is recognized as income by using the simple interest method on daily balances of the principal amount outstanding plus any accretion or amortization of purchase accounting discounts.

Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. Accrual of interest is discontinued on loans past due 90 days or more unless the credit is well secured and in the process of collection. Also, a loan may be placed on nonaccrual status prior to becoming past due 90 days if management believes, after considering economic and business conditions and collection efforts, that the borrower’s financial condition is such that collection of principal or interest is doubtful. The decision to place a loan on nonaccrual status prior to becoming past due 90 days is based on an evaluation of the borrower’s financial condition, collateral liquidation value, economic and business conditions and other factors that affect the borrower’s ability to pay. When a loan is placed on nonaccrual status, the accrued but unpaid interest is charged against current period operations. Thereafter, interest on nonaccrual loans is recognized only as received if future collection of principal is probable. If the collectability of outstanding principal is doubtful, interest received is applied as a reduction of principal. A loan may be restored to accrual status when principal and interest are no longer past due or it otherwise becomes both well secured and collectability is reasonably assured. The Company monitors the level of accrued interest receivable on nonperforming loans, however an allowance for credit losses was not required as of December 31, 2022 and 2021.

Credit Quality - Commercial Type Loans

The Company categorizes commercial loan types into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans that share similar risk characteristics collectively. Loans that do not share similar risk characteristics are evaluated individually.

The Company uses the following definitions for risk ratings:


			Pass.			Loans rated Pass include those that are adequately collateralized performing loans which management believes do not have conditions that have occurred or may occur that would result in the loan being downgraded into an inferior category. The Pass category also includes commercial loans rated as Watch, which include those that management believes have conditions that have occurred, or may occur, which could result in the loan being downgraded to an inferior category.




			Special Mention.			Loans rated Special Mention are those that have potential weakness that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position at some future date. Management does not believe there will be a loss of principal or interest. These loans require intensive servicing and may possess more than normal credit risk.




			Classified.			Loans included in the Classified category include loans rated as Substandard and Doubtful. Loans rated as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Also included in this category are loans classified as Doubtful, which have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weakness or weaknesses make collection or liquidation in full, based on currently existing facts, conditions, and values, highly questionable and improbable.

Risk ratings are updated on an ongoing basis and are subject to change by continuous loan monitoring processes.

Allowance for credit losses

Allowance for credit losses: