Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2021	Jul. 30, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
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 Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Reporting Company	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		47,363,275
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001649749
Current Fiscal Year End Date	--12-31

Consolidated balance sheets - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
ASSETS
Cash and due from banks	$ 60,908	$ 110,991
Federal funds sold and reverse repurchase agreements	59,321	121,153
Interest-bearing deposits in financial institutions	1,596,868	1,085,754
Cash and cash equivalents	1,717,097	1,317,898
Investments:
Available-for-sale debt securities, at fair value	1,404,372	1,172,400
Equity securities, at fair value	4,803	4,591
Federal Home Loan Bank stock, at cost	29,411	31,232
Loans held for sale, at fair value	821,529	899,173
Loans	7,198,954	7,082,959
Less: allowance for credit losses	144,663	170,389
Net loans	7,054,291	6,912,570
Premises and equipment, net	142,596	145,115
Other real estate owned, net	11,986	12,111
Operating lease right-of-use assets	45,423	49,537
Interest receivable	42,083	43,603
Mortgage servicing rights, at fair value	101,615	79,997
Goodwill	242,561	242,561
Core deposit and other intangibles, net	19,592	22,426
Other assets	281,008	274,116
Total assets	11,918,367	11,207,330
Deposits
Noninterest-bearing	2,484,982	2,274,103
Interest-bearing checking	3,015,253	2,491,765
Money market and savings	3,421,281	3,254,915
Customer time deposits	1,241,540	1,375,695
Brokered and internet time deposits	40,900	61,559
Total deposits	10,203,956	9,458,037
Borrowings	183,962	238,324
Operating lease liabilities	50,396	55,187
Accrued expenses and other liabilities	108,239	164,400
Total liabilities	10,546,553	9,915,948
Commitments and contingencies (Note 9)
SHAREHOLDERS' EQUITY
Common stock, $1 par value per share; 75,000,000 shares authorized; 47,360,950 and 47,220,743 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively	47,361	47,222
Additional paid-in capital	902,782	898,847
Retained earnings	403,173	317,625
Accumulated other comprehensive income, net	18,405	27,595
Total FB Financial Corporation common shareholders' equity	1,371,721	1,291,289
Noncontrolling interest	93	93
Total equity	1,371,814	1,291,382
Total liabilities and shareholders' equity	$ 11,918,367	$ 11,207,330

Consolidated balance sheets (Parenthetical) - $ / shares	Jun. 30, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
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)	47,360,950	47,220,743
Common stock, shares outstanding (in shares)	47,360,950	47,220,743

Consolidated statements of income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Consolidated statements of income - USD ($) $ in Thousands	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Interest income:
Interest and fees on loans	$ 89,861	$ 61,092	$ 179,273	$ 124,846
Interest on securities
Taxable	3,844	2,619	6,663	5,675
Tax-exempt	1,933	1,590	3,889	3,023
Other	691	306	1,289	1,737
Total interest income	96,329	65,607	191,114	135,281
Interest expense:
Deposits	7,919	9,309	17,745	21,477
Borrowings	1,847	961	4,230	2,218
Total interest expense	9,766	10,270	21,975	23,695
Net interest income	86,563	55,337	169,139	111,586
Provision for credit losses	(12,885)	24,039	(24,517)	52,003
Provision for credit losses on unfunded commitments	(954)	1,882	(3,176)	3,483
Net interest income after provisions for credit losses	100,402	29,416	196,832	56,100
Noninterest income:
Gain (loss) from securities, net	144	(28)	227	35
(Loss) gain on sales or write-downs of other real estate owned	(23)	86	473	137
Loss from other assets	(4)	(54)	(15)	(382)
Other income	3,038	2,487	5,180	5,262
Total noninterest income	49,300	81,491	116,030	124,191
Noninterest expenses:
Salaries, commissions and employee benefits	62,367	55,258	126,938	98,880
Occupancy and equipment expense	5,356	4,096	11,205	8,274
Legal and professional fees	2,090	1,952	4,524	3,510
Data processing	2,542	2,782	4,861	5,235
Merger costs	0	1,586	0	4,636
Amortization of core deposit and other intangibles	1,394	1,205	2,834	2,408
Advertising	3,559	2,591	5,812	4,980
Other expense	15,652	11,109	31,484	21,215
Total noninterest expense	92,960	80,579	187,658	149,138
Income before income taxes	56,742	30,328	125,204	31,153
Income tax expense	13,440	7,455	29,028	7,535
Net income applicable to FB Financial Corporation and noncontrolling interest	43,302	22,873	96,176	23,618
Net income applicable to noncontrolling interest	8	0	8	0
Net income applicable to FB Financial Corporation	$ 43,294	$ 22,873	$ 96,168	$ 23,618
Earnings per common share
Basic (in dollars per share)	$ 0.91	$ 0.71	$ 2.03	$ 0.75
Diluted (in dollars per share)	$ 0.90	$ 0.70	$ 2.00	$ 0.74
Mortgage banking income
Noninterest income:
Mortgage banking income, service charges on deposit accounts, ATM and interchange fees, investment services and trust income	$ 35,499	$ 72,168	$ 90,831	$ 104,913
Service charges on deposit accounts
Noninterest income:
Mortgage banking income, service charges on deposit accounts, ATM and interchange fees, investment services and trust income	2,266	1,858	4,605	4,421
ATM and interchange fees
Noninterest income:
Mortgage banking income, service charges on deposit accounts, ATM and interchange fees, investment services and trust income	5,381	3,606	9,722	6,740
Investment services and trust income
Noninterest income:
Mortgage banking income, service charges on deposit accounts, ATM and interchange fees, investment services and trust income	$ 2,999	$ 1,368	$ 5,007	$ 3,065

Consolidated statements of comprehensive income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 43,302	$ 22,873	$ 96,176	$ 23,618
Other comprehensive income (loss), net of tax:
Net change in unrealized gain in available-for-sale securities, net of tax expenses (benefits) of $798, $429, $(2,654) and $4,704	2,286	1,209	(9,562)	13,303
Reclassification adjustment for gain on sale of securities included in net income, net of tax expenses of $2, $0, $4 and $0	(6)	0	(11)	0
Net change in unrealized loss in hedging activities, net of tax expenses (benefits) of $23, $(40), $135 and $(443)	67	(112)	383	(1,257)
Reclassification adjustment for gain on hedging activities, net of tax expenses of $0, $52, $0 and $104	0	(148)	0	(295)
Total other comprehensive income (loss), net of tax	2,347	949	(9,190)	11,751
Comprehensive income	45,649	23,822	86,986	35,369
Comprehensive income applicable to noncontrolling interests	8	0	8	0
Comprehensive income applicable to FB Financial Corporation	$ 45,641	$ 23,822	$ 86,978	$ 35,369

Consolidated statements of comprehensive income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Statement of Comprehensive Income [Abstract]
Net tax expenses (benefits) on (loss) gain on available for sale securities	$ 798	$ 429	$ (2,654)	$ 4,704
Net tax expense on reclassification adjustment for gain on sale of securities included in net income	(2)	0	(4)	0
Net tax expenses (benefits) recognized on gain (loss) on hedging activities	23	(40)	135	(443)
Net tax expenses on reclassification adjustment for gain on hedging activities	$ 0	$ 52	$ 0	$ 104

Consolidated statements of changes in shareholders' equity - USD ($) $ in Thousands	Total	Cumulative effect adjustment to adopt ASC 326	Adjusted balance	Common stock	Common stock Adjusted balance	Additional paid-in capital	Additional paid-in capital Adjusted balance	Retained earnings	Retained earnings Cumulative effect adjustment to adopt ASC 326	Retained earnings Adjusted balance	Accumulated other comprehensive income, net	Accumulated other comprehensive income, net Adjusted balance	Total common shareholders' equity	Total common shareholders' equity Cumulative effect adjustment to adopt ASC 326	Total common shareholders' equity Adjusted balance	Noncontrolling interests	Noncontrolling interests Adjusted balance
Beginning balance at Dec. 31, 2019	$ 762,329	$ (25,018)	$ 737,311	$ 31,034	$ 31,034	$ 425,633	$ 425,633	$ 293,524	$ (25,018)	$ 268,506	$ 12,138	$ 12,138	$ 762,329	$ (25,018)	$ 737,311	$ 0	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to FB Financial Corporation and noncontrolling interest	23,618							23,618					23,618
Other comprehensive income, net of taxes	11,751										11,751		11,751
Common stock issued in connection with acquisition of the FNB Financial Corp., net of registration costs (See Note 2)	34,847			955		33,892							34,847
Stock based compensation expense	4,233			11		4,222							4,233
Restricted stock units vested and distributed, net of shares withheld	(1,162)			89		(1,251)							(1,162)
Shares issued under employee stock purchase program	446			12		434							446
Dividends declared	(5,828)							(5,828)					(5,828)
Ending balance at Jun. 30, 2020	805,216			32,101		462,930		286,296			23,889		805,216			0
Beginning balance at Mar. 31, 2020	782,330			32,067		460,938		266,385			22,940		782,330			0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to FB Financial Corporation and noncontrolling interest	22,873							22,873					22,873
Other comprehensive income, net of taxes	949										949		949
Stock based compensation expense	2,350			6		2,344							2,350
Restricted stock units vested and distributed, net of shares withheld	(324)			28		(352)							(324)
Dividends declared	(2,962)							(2,962)					(2,962)
Ending balance at Jun. 30, 2020	805,216			32,101		462,930		286,296			23,889		805,216			0
Beginning balance at Dec. 31, 2020	1,291,382			47,222		898,847		317,625			27,595		1,291,289			93
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to FB Financial Corporation and noncontrolling interest	96,176							96,168					96,168			8
Other comprehensive income, net of taxes	(9,190)										(9,190)		(9,190)
Stock based compensation expense	5,181			5		5,176							5,181
Restricted stock units vested and distributed, net of shares withheld	(1,940)			112		(2,052)							(1,940)
Shares issued under employee stock purchase program	833			22		811							833
Dividends declared	(10,620)							(10,620)					(10,620)
Noncontrolling interest distribution	(8)															(8)
Ending balance at Jun. 30, 2021	1,371,814			47,361		902,782		403,173			18,405		1,371,721			93
Beginning balance at Mar. 31, 2021	1,329,196			47,332		900,521		365,192			16,058		1,329,103			93
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to FB Financial Corporation and noncontrolling interest	43,302							43,294					43,294			8
Other comprehensive income, net of taxes	2,347										2,347		2,347
Stock based compensation expense	2,515			2		2,513							2,515
Restricted stock units vested and distributed, net of shares withheld	(225)			27		(252)							(225)
Shares issued under employee stock purchase program	0
Dividends declared	(5,313)							(5,313)					(5,313)
Noncontrolling interest distribution	(8)															(8)
Ending balance at Jun. 30, 2021	$ 1,371,814			$ 47,361		$ 902,782		$ 403,173			$ 18,405		$ 1,371,721			$ 93

Consolidated statements of changes in shareholders' equity (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Statement of Stockholders' Equity [Abstract]
Dividends declared (USD per share)	$ 0.11	$ 0.09	$ 0.22	$ 0.18

Consolidated statements of cash flows - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
Consolidated statements of cash flows - USD ($)	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Cash flows from operating activities:
Net income	$ 43,302,000	$ 22,873,000	$ 96,176,000	$ 23,618,000
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization of fixed assets			4,148,000	3,231,000
Amortization of core deposit and other intangibles			2,834,000	2,408,000
Capitalization of mortgage servicing rights			(22,167,000)	(20,063,000)
Net change in fair value of mortgage servicing rights	13,150,000	14,340,000	549,000	35,076,000
Stock-based compensation expense			5,181,000	4,233,000
Provision for credit losses	(12,885,000)	24,039,000	(24,517,000)	52,003,000
Provision for credit losses on unfunded commitments	(954,000)	1,882,000	(3,176,000)	3,483,000
Provision for mortgage loan repurchases	(706,000)	855,000	(266,000)	1,227,000
Amortization (accretion) of premiums and discounts on acquired loans, net			284,000	(2,554,000)
Accretion of discounts and amortization of premiums on securities, net			4,390,000	2,077,000
Gain from securities, net	(144,000)	28,000	(227,000)	(35,000)
Originations of loans held for sale			(3,308,882,000)	(2,807,047,000)
Proceeds from sale of loans held for sale			3,355,152,000	2,739,933,000
Gain on sale and change in fair value of loans held for sale			(86,031,000)	(113,888,000)
Net gain or write-downs of other real estate owned	23,000	(86,000)	(473,000)	(137,000)
Loss on other assets	4,000	54,000	15,000	382,000
Provision for deferred income taxes	3,899,000	(8,292,000)	13,538,000	(16,380,000)
Changes in:
Other assets and interest receivable			(14,488,000)	(102,382,000)
Accrued expenses and other liabilities			(97,146,000)	47,077,000
Net cash used in operating activities			(75,106,000)	(147,738,000)
Activity in available-for-sale securities:
Maturities, prepayments and calls	86,866,000	44,703,000	147,906,000	72,360,000
Purchases			(354,762,000)	(59,984,000)
Net change in loans			(4,146,000)	(196,303,000)
Sales (purchases) of FHLB stock			1,821,000	(1,176,000)
Purchases of premises and equipment			(1,168,000)	(4,827,000)
Proceeds from the sale of other real estate owned	2,166,000	2,708,000	4,661,000	4,150,000
Net cash paid in business combinations			0	(4,227,000)
Net cash used in investing activities			(205,688,000)	(190,007,000)
Cash flows from financing activities:
Net increase in demand deposits			900,733,000	891,237,000
Net decrease in time deposits			(154,814,000)	(82,909,000)
Net increase in securities sold under agreements to repurchase			857,000	5,795,000
Payment of subordinated debt			(40,000,000)	0
Accretion of subordinated debt fair value premium and amortization of issuance costs, net			(176,000)	0
(Payments on) proceeds from other borrowings			(15,000,000)	15,000,000
Share based compensation withholding payments			(1,940,000)	(1,162,000)
Net proceeds from sale of common stock under employee stock purchase program			833,000	446,000
Dividends paid			(10,492,000)	(5,751,000)
Noncontrolling interest distribution			(8,000)	0
Net cash provided by financing activities			679,993,000	822,656,000
Net change in cash and cash equivalents			399,199,000	484,911,000
Cash and cash equivalents at beginning of the period			1,317,898,000	232,681,000	$ 232,681,000
Cash and cash equivalents at end of the period	1,717,097,000	717,592,000	1,717,097,000	717,592,000	1,317,898,000
Supplemental cash flow information:
Interest paid			24,611,000	23,081,000
Taxes paid			45,335,000	1,590,000
Supplemental noncash disclosures:
Transfers from loans to other real estate owned	3,201,000	641,000	4,596,000	1,006,000
Transfers from premises and equipment to other real estate owned			0	841,000
Loans provided for sales of other real estate owned	203,000	0	533,000	0
Transfers from loans to loans held for sale			3,709,000	6,317,000
Transfers from loans held for sale to loans			29,322,000	14,358,000
Stock consideration paid in business combination			0	35,041,000
Trade date payable - securities			41,722,000	5,431,000	$ 0
Dividends declared not paid on restricted stock units	$ 128,000	$ 77,000	128,000	77,000
Decrease to retained earnings for adoption of new accounting standard			0	25,018,000
Right-of-use assets obtained in exchange for operating lease liabilities			$ 670,000	$ 806,000

Basis of presentation

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation:

Overview and presentation

FB Financial Corporation (the “Company”) is a financial holding company headquartered in Nashville, Tennessee. The Company operates through its wholly-owned subsidiary, FirstBank (the "Bank"). As of June 30, 2021, the Bank had 81 full-service branches throughout Tennessee, Alabama, southern Kentucky and north Georgia, and a national mortgage business with office locations across the Southeast, which primarily originates loans to be sold in the secondary market.

The unaudited consolidated financial statements, including the notes thereto, have been prepared in accordance with United States generally accepted accounting principles interim reporting requirements and general banking industry guidelines, and therefore, do not include all information and notes included in the annual consolidated financial statements in conformity with GAAP. These interim consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K.

The unaudited consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results for interim periods are not necessarily indicative of results for a full year.

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 periods then ended. Actual results could differ significantly from those estimates.

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.

As of June 30, 2021, the Company continues to qualify as an emerging growth company as defined by the "Jumpstart Our Business Startups Act," however beginning on December 31, 2021, the Company will cease to qualify.

Risks and uncertainties

The COVID-19 health pandemic that arose in 2020 created a crisis resulting in volatility in financial markets, sudden, unprecedented job losses, and disruption in consumer and commercial behavior, resulting in governments in the United States and globally to intervene with varying levels of direct monetary support and fiscal stimulus packages. All industries, municipalities and consumers have been impacted by the health crisis to some degree, including the markets that we serve. In attempts to “flatten the curve,” businesses not deemed essential were closed or constrained to capacity limitations, individuals were asked to restrict their movements, observe social distancing and shelter in place. These actions resulted in rapid decreases in commercial and consumer activity, temporary closures of many businesses, leading to a loss of revenues and a rapid increase in unemployment, widening of credit spreads, dislocation of bond markets, disruption of global supply chains and changes in consumer spending behavior. Although most restrictions were lifted and vaccines became widely available during the first half of 2021, during the three months ended June 30, 2021, concern began building regarding the potential impact the new Delta variant of the virus may have on the global economy and the efficacy of available vaccines to protect against widespread infection. As such, there continues to be uncertainty regarding the long term effects on the global economy, which could have a material adverse impact on the Company's business operations, asset valuations, financial condition, and results of operations.

Earnings per share

Basic EPS excludes dilution and is computed by dividing earnings available 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 available to common shareholders by the weighted average number of common shares outstanding for the period, 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 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:


	Three Months Ended June 30,			Six Months Ended June 30,
		2021		2020		2021		2020
Basic earnings per common share calculation:
Net income applicable to FB Financial Corporation		$	43,294	$	22,873	$	96,168	$	23,618
Dividends paid on and undistributed earnings allocated to participating securities		—		—		—		—
Earnings available to common shareholders		$	43,294	$	22,873	$	96,168	$	23,618
Weighted average basic shares outstanding		47,351,969		32,094,274		47,312,312		$	31,676,004
Basic earnings per common share		$	0.91	$	0.71	$	2.03	$	0.75
Diluted earnings per common share:
Earnings available to common shareholders		$	43,294	$	22,873	$	96,168	$	23,618
Weighted average basic shares outstanding		47,351,969		32,094,274		47,312,312		31,676,004
Weighted average diluted shares contingently issuable(1)		641,804		412,143		664,221		433,190
Weighted average diluted shares outstanding		47,993,773		32,506,417		47,976,533		32,109,194
Diluted earnings per common share		$	0.90	$	0.70	$	2.00	$	0.74

(1)Excludes 164,472 and 250,776 restricted stock units outstanding considered to be antidilutive for the three and six months ended June 30, 2021, respectively and 352,888 for three and six months ended June 30, 2020.

Recently adopted accounting policies:

The Company did not modify or adopt any new accounting policies during the three and six months ended June 30, 2021 that were not disclosed in the Company's 2020 audited consolidated financial statements included on Form 10-K, other than as described below.

As previously disclosed, during the three months March 31, 2021, the Company reevaluated its business segments to align all retail mortgage activities with the Mortgage segment. Previously, the Company assigned retail mortgage activities within the Banking geographical footprint to the Banking segment. See Note 12, "Segment reporting" for additional information on this change.

Recently adopted accounting standards:

Except as set forth below, the Company did not adopt any new accounting standards that were not disclosed in the Company's 2020 audited consolidated financial statements included on Form 10-K.

In January 2021, Financial Accounting Standards Board issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope". This ASU clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. The Company early adopted ASU 2021-01 upon issuance effective January 7, 2021. No contract modifications have been made under the new guidance, therefore the adoption of this update did not impact the Company's financial statements or disclosures.

Newly issued not yet effective accounting standards:

The Company has reviewed newly issued not yet effective accounting standards and concluded as of June 30, 2021, there are none that are likely to impact the Company's financial statements or disclosures.

Mergers and acquisitions

6 Months Ended

Jun. 30, 2021

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 previously announced 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 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 acquisition of 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 previously announced 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 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. Goodwill 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 acquisition 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 income statement 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 acquisition.

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 acquisition. The acquisitions 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 three and six months ended June 30, 2020, as though the Franklin and Farmers National acquisitions 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.


	Three Months Ended June 30,		Six Months Ended June 30,
	2020		2020
Net interest income	$	84,610	$	169,352
Total revenues	$	176,657	$	310,254
Net income applicable to FB Financial Corporation	$	32,623	$	32,149

Investment securities

6 Months Ended

Jun. 30, 2021

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 income at June 30, 2021 and December 31, 2020:


	June 30, 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	$	8,255	$	1	$	(1)	$	—	$	8,255
Mortgage-backed securities - residential	1,031,233		9,507		(5,737)		—		1,035,003
Mortgage-backed securities - commercial	14,715		446		—		—		15,161
Municipal securities	314,862		18,088		(67)		—		332,883
U.S. Treasury securities	10,486		48		—		—		10,534
Corporate securities	2,500		42		(6)		—		2,536
Total	$	1,382,051	$	28,132	$	(5,811)	$	—	$	1,404,372


	December 31, 2020
	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	$	2,000	$	3	$	—	$	—	$	2,003
Mortgage-backed securities - residential	760,099		14,040		(803)		—		773,336
Mortgage-backed securities - commercial	20,226		1,362		—		—		21,588
Municipal securities	336,543		19,806		(20)		—		356,329
U.S. Treasury securities	16,480		148		—		—		16,628
Corporate securities	2,500		17		(1)		—		2,516
Total	$	1,137,848	$	35,376	$	(824)	$	—	$	1,172,400

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 June 30, 2021 and December 31, 2020, total accrued interest receivable on debt securities was $4,630 and $4,540, respectively.

As of June 30, 2021 and December 31, 2020, the Company had $4,803 and $4,591, in marketable equity securities recorded at fair value, respectively.

Securities pledged at June 30, 2021 and December 31, 2020 had carrying amounts of $998,047 and $804,821, 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 the U.S. Government and its agencies, in an amount greater than 10% of shareholders' equity during any period presented.

At June 30, 2021 and December 31, 2020, there were no trade date receivables that related to sales settled after period end. At June 30, 2021 and December 31, 2020, there were $41,722 and $0 respectively, in trade date payables that related to purchases settled after period end.

The amortized cost and fair value of debt securities by contractual maturity at June 30, 2021 and December 31, 2020 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 maturity summary.


	June 30,				December 31,
	2021				2020
	Available-for-sale				Available-for-sale
	Amortized cost		Fair value		Amortized cost		Fair value
Due in one year or less	$	18,861	$	18,971	$	35,486	$	35,662
Due in one to five years	21,955		22,387		24,278		24,684
Due in five to ten years	44,248		45,746		40,038		41,332
Due in over ten years	251,039		267,104		257,721		275,798
	336,103		354,208		357,523		377,476
Mortgage-backed securities - residential	1,031,233		1,035,003		760,099		773,336
Mortgage-backed securities - commercial	14,715		15,161		20,226		21,588
Total debt securities	$	1,382,051	$	1,404,372	$	1,137,848	$	1,172,400

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Proceeds from sales	$	—	$	—	$	—	$	—
Proceeds from maturities, prepayments and calls	86,866		44,703		147,906		72,360
Gross realized gains	8		—		15		—
Gross realized losses	—		—		—		—

Additionally, net unrealized gains on equity securities of $136 and $212 were recognized in the three and six months ended June 30, 2021, respectively, and $28 net loss and $35 net gain were recognized in the three and six months ended June 30, 2020, respectively.

The following tables show gross unrealized losses for which an allowance for credit losses has not been recorded at June 30, 2021 and December 31, 2020, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:


	June 30, 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	$	1,250	$	(1)	$	—	$	—	$	1,250	$	(1)
Mortgage-backed securities - residential	449,834		(5,737)		—		—		449,834		(5,737)

Municipal securities	7,979		(67)		—		—		7,979		(67)

Corporate securities	494		(6)		—		—		494		(6)
Total	$	459,557	$	(5,811)	$	—	$	—	$	459,557	$	(5,811)


	December 31, 2020
	Less than 12 months				12 months or more				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized loss

Mortgage-backed securities - residential	$	182,012	$	(803)	$	—	$	—	$	182,012	$	(803)
Municipal securities	3,184		(20)		—		—		3,184		(20)
Corporate Securities	499		(1)						499		(1)

Total	$	185,695	$	(824)	$	—	$	—	$	185,695	$	(824)

As of June 30, 2021 and December 31, 2020, the Company’s securities portfolio consisted of 508 and 514 securities, 32 and 16 of which were in an unrealized loss position, respectively.

As of June 30, 2021 and 2020, the Company evaluated available-for-sale debt securities with unrealized losses for expected credit loss and recorded no allowance for credit loss as the majority of the investment portfolio was either government guaranteed or an issuance of a government sponsored entity, was highly rated by major credit rating agencies and have a long history of zero losses. As such, no provision for credit losses was recorded during the three and six months ended June 30, 2021 and 2020.

Loans and allowance for credit losses

6 Months Ended

Jun. 30, 2021

Receivables [Abstract]

Loans and allowance for credit losses

Loans and allowance for credit losses:

Loans outstanding at June 30, 2021 and December 31, 2020, by class of financing receivable are as follows:


	June 30,		December 31,
	2021		2020
Commercial and industrial (1)	$	1,238,940	$	1,346,122
Construction	1,145,165		1,222,220
Residential real estate:
1-to-4 family mortgage	1,126,623		1,089,270
Residential line of credit	401,343		408,211
Multi-family mortgage	363,600		175,676
Commercial real estate:
Owner occupied	923,605		924,841
Non-owner occupied	1,675,214		1,598,979
Consumer and other	324,464		317,640
Gross loans	7,198,954		7,082,959
Less: Allowance for credit losses	(144,663)		(170,389)
Net loans	$	7,054,291	$	6,912,570

(1)Includes $57,406 and $212,645 of loans originated as part of the Paycheck Protection Program as of June 30, 2021 and December 31, 2020, 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 June 30, 2021 and December 31, 2020, $1,256,344 and $1,248,857, respectively, of qualifying residential mortgage loans (including loans held for sale) $1,542,531 and $1,532,749, 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 June 30, 2021 and December 31, 2020, $2,290,661 and $2,463,281, respectively, of qualifying loans were pledged to the Federal Reserve Bank under the Borrower-in-Custody program.

The components of amortized cost for loans on the consolidated balance sheet excludes accrued interest receivable as the Company elected to present accrued interest receivable separately on the balance sheet. As of June 30, 2021 and December 31, 2020, total accrued interest receivable on loans held for investment was $35,892 and $38,316, respectively.

Allowance for Credit Losses

The Company estimated the allowance for credit losses under a current expected credit loss model as of June 30, 2021 and December 31, 2020. 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 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 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.

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; TDRs and reasonably expected TDRs. 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 use the same methodology as TDRs. 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 allowance for credit losses on a TDR or a reasonably expected TDR is calculated individually using a discounted cash flow methodology, unless the loan is deemed to be collateral dependent or foreclosure is probable.

The Company performed qualitative evaluations within the Company's established qualitative framework, weighting the impact of the current economic outlook, status of federal government stimulus programs, and other considerations, in order to identify specific industries or borrowers seeing credit improvement or deterioration specific to the COVID-19 pandemic. The decrease in estimated required reserve during the three and six months ended June 30, 2021 was a result of improving macroeconomic variables incorporated into the Company's reasonable and supportable forecasts when compared to both March 31, 2021 and December 31, 2020.

The following provide the changes in the allowance for credit losses by class of financing receivable for the three and six months ended June 30, 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
Three Months Ended June 30, 2021
Beginning balance - March 31, 2021	$	14,643	$	38,622	$	19,572	$	9,268	$	11,657	$	3,609	$	50,179	$	10,404	$	157,954
Provision for credit losses	(579)		(5,784)		75		(2,558)		1,818		972		(7,323)		494		(12,885)
Recoveries of loans previously charged-off	87		—		41		9		—		126		—		190		453
Loans charged off	(360)		—		(16)		(3)		—		—		—		(480)		(859)


Ending balance - June 30, 2021	$	13,791	$	32,838	$	19,672	$	6,716	$	13,475	$	4,707	$	42,856	$	10,608	$	144,663
Six Months Ended June 30, 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	(536)		(25,610)		536		(3,815)		6,301		(281)		(1,291)		179		(24,517)
Recoveries of loans previously charged-off	216		—		65		15		—		139		—		385		820
Loans charged off	(637)		(29)		(149)		(18)		—		—		—		(1,196)		(2,029)


Ending balance - June 30, 2021	$	13,791	$	32,838	$	19,672	$	6,716	$	13,475	$	4,707	$	42,856	$	10,608	$	144,663


	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
Three Months Ended June 30, 2020
Beginning balance - March 31, 2020	$	10,881	$	22,842	$	13,006	$	6,213	$	2,328	$	9,047	$	18,005	$	6,819	$	89,141
Provision for loan losses	(2,663)		12,624		(446)		595		2,171		(1,630)		12,984		404		24,039
Recoveries of loans previously charged-off	807		151		26		24		—		3		—		103		1,114
Loans charged off	(147)		(18)		(123)		(21)		—		—		(545)		(311)		(1,165)
Ending balance - June 30, 2020	$	8,878	$	35,599	$	12,463	$	6,811	$	4,499	$	7,420	$	30,444	$	7,015	$	113,129
Six Months Ended June 30, 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 adopted ASC 326 on purchased credit deteriorated loans	82		150		421		(3)		—		162		184		(438)		558
Provision for loan losses	(834)		23,578		1,218		2,580		3,615		1,408		18,919		1,519		52,003
Recoveries of loans previously charged-off	895		151		50		39		—		17		—		296		1,448
Loans charged off	(1,381)		(18)		(365)		(21)		—		(209)		(545)		(1,037)		(3,576)
Initial allowance on loans purchased with deteriorated credit quality	11		11		107		3		—		54		443		40		669

Ending balance - June 30, 2020	$	8,878	$	35,599	$	12,463	$	6,811	$	4,499	$	7,420	$	30,444	$	7,015	$	113,129

The following tables provide the amount of the allowance for credit losses by class of financing receivable disaggregated by measurement methodology as of June 30, 2021 and December 31, 2020:


	June 30, 2021
	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
Amount of allowance allocated to:
Individually evaluated for credit loss	$	105	$	131	$	—	$	8	$	—	$	23	$	676	$	—	$	943
Collectively evaluated for credit loss	13,073		31,151		18,063		6,467		12,976		4,015		29,020		9,985		124,750
Purchased credit deteriorated	613		1,556		1,609		241		499		669		13,160		623		18,970
Ending balance - June 30, 2021	$	13,791	$	32,838	$	19,672	$	6,716	$	13,475	$	4,707	$	42,856	$	10,608	$	144,663


	December 31, 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
Amount of allowance allocated to:
Individually evaluated for credit loss	$	373	$	95	$	—	$	9	$	—	$	30	$	1,531	$	1	$	2,039
Collectively evaluated for credit loss	13,493		54,065		17,206		10,031		6,326		4,062		33,706		10,516		149,405
Purchased credit deteriorated	882		4,317		2,014		494		848		757		8,910		723		18,945
Ending balance - December 31, 2020	$	14,748	$	58,477	$	19,220	$	10,534	$	7,174	$	4,849	$	44,147	$	11,240	$	170,389

The following tables provide the amount of loans by class of financing receivable disaggregated by measurement methodology as of June 30, 2021, and December 31, 2020:


	June 30, 2021
	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
Loans, net of unearned income
Individually evaluated for credit loss	$	15,159	$	5,993	$	894	$	412	$	—	$	9,135	$	7,207	$	26	$	38,826
Collectively evaluated for credit loss	1,176,960		1,097,065		1,038,746		384,698		354,021		822,532		1,368,161		311,481		6,553,664
Purchased credit deteriorated	46,821		42,107		86,983		16,233		9,579		91,938		299,846		12,957		606,464
Ending balance - June 30, 2021	$	1,238,940	$	1,145,165	$	1,126,623	$	401,343	$	363,600	$	923,605	$	1,675,214	$	324,464	$	7,198,954


	December 31, 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
Loans, net of unearned income
Individually evaluated for credit loss	$	15,578	$	4,851	$	848	$	412	$	—	$	7,846	$	8,631	$	39	$	38,205
Collectively evaluated for credit loss	1,270,058		1,140,634		987,142		387,250		156,447		813,151		1,272,203		302,983		6,329,868
Purchased credit deteriorated	60,486		76,735		101,280		20,549		19,229		103,844		318,145		14,618		714,886
Ending balance - December 31, 2020	$	1,346,122	$	1,222,220	$	1,089,270	$	408,211	$	175,676	$	924,841	$	1,598,979	$	317,640	$	7,082,959

Credit Quality

The Company categorizes loans 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 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. The total amortized cost of loans rated as Doubtful were insignificant for all periods presented.

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

The following tables present the credit quality of our loan portfolio by year of origination as of June 30, 2021 and December 31, 2020. 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 June 30, 2021
	Term Loans
	Amortized Cost Basis by Origination Year
	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and industrial
Pass	$	93,229	$	160,243	$	162,002	$	63,799	$	48,206	$	66,856	$	584,470	$	1,178,805
Special Mention	27		278		423		20		468		3,118		15,920		20,254
Classified	660		2,706		2,674		10,426		3,728		6,914		12,773		39,881

Total	93,916		163,227		165,099		74,245		52,402		76,888		613,163		1,238,940

Construction
Pass	261,384		393,404		205,133		48,972		29,372		84,769		110,748		1,133,782
Special Mention	—		160		—		—		1,209		734		—		2,103
Classified	—		32		2,199		3,967		124		2,757		201		9,280

Total	261,384		393,596		207,332		52,939		30,705		88,260		110,949		1,145,165

Residential real estate:
1-to-4 family mortgage
Pass	203,719		241,270		152,228		126,627		130,028		246,202		—		1,100,074
Special Mention	44		1,145		1,201		606		328		2,752		—		6,076
Classified	—		339		1,807		3,374		5,237		9,716		—		20,473

Total	203,763		242,754		155,236		130,607		135,593		258,670		—		1,126,623

Residential line of credit
Pass	—		—		—		—		—		—		396,297		396,297
Special Mention	—		—		—		—		—		—		344		344
Classified	—		—		—		—		—		—		4,702		4,702

Total	—		—		—		—		—		—		401,343		401,343

Multi-family mortgage
Pass	143,092		31,127		74,713		7,370		39,365		57,426		10,454		363,547
Special Mention	—		—		—		—		—		—		—		—
Classified	—		—		—		—		—		53		—		53

Total	143,092		31,127		74,713		7,370		39,365		57,479		10,454		363,600


Commercial real estate:
Owner occupied
Pass	64,153		138,004		187,870		89,391		90,172		256,949		58,761		885,300
Special Mention	—		—		1,335		3,649		1,464		5,749		288		12,485
Classified	—		—		3,123		2,634		4,157		14,146		1,760		25,820

Total	64,153		138,004		192,328		95,674		95,793		276,844		60,809		923,605

Non-owner occupied
Pass	226,622		162,080		166,597		300,073		202,577		505,746		54,947		1,618,642
Special Mention	—		—		—		3,500		—		8,278		—		11,778
Classified	—		—		4,136		24,616		1,542		14,455		45		44,794

Total	226,622		162,080		170,733		328,189		204,119		528,479		54,992		1,675,214


As of June 30, 2021
	Term Loans
	Amortized Cost Basis by Origination Year
	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Consumer and other loans
Pass	56,647		65,973		44,844		36,124		23,731		76,402		14,476		318,197
Special Mention	75		—		14		—		1		522		—		612
Classified	38		144		222		1,023		926		2,865		437		5,655

Total	56,760		66,117		45,080		37,147		24,658		79,789		14,913		324,464

Total Loans
Pass	1,048,846		1,192,101		993,387		672,356		563,451		1,294,350		1,230,153		6,994,644
Special Mention	146		1,583		2,973		7,775		3,470		21,153		16,552		53,652
Classified	698		3,221		14,161		46,040		15,714		50,906		19,918		150,658

Total	$	1,049,690	$	1,196,905	$	1,010,521	$	726,171	$	582,635	$	1,366,409	$	1,266,623	$	7,198,954


As of December 31, 2020
	Term Loans
	Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and industrial
Pass	$	339,074	$	185,636	$	70,549	$	59,917	$	37,573	$	42,685	$	540,960	$	1,276,394
Special Mention	231		824		561		445		915		2,580		24,826		30,382
Classified	2,501		2,688		11,227		4,425		6,582		1,277		10,646		39,346

Total	341,806		189,148		82,337		64,787		45,070		46,542		576,432		1,346,122

Construction
Pass	461,715		390,443		86,490		52,942		40,907		62,890		112,004		1,207,391
Special Mention	469		1,485		2,197		1,221		729		13		—		6,114
Classified	573		1,755		3,178		141		—		3,068		—		8,715

Total	462,757		393,683		91,865		54,304		41,636		65,971		112,004		1,222,220

Residential real estate:
1-to-4 family mortgage
Pass	283,107		176,711		164,499		157,731		111,194		162,051		—		1,055,293
Special Mention	1,423		1,829		1,209		753		721		3,865		—		9,800
Classified	448		1,428		3,806		5,473		3,622		9,400		—		24,177

Total	284,978		179,968		169,514		163,957		115,537		175,316		—		1,089,270

Residential line of credit
Pass	—		—		—		—		—		—		400,206		400,206
Special Mention	—		—		—		—		—		—		2,653		2,653
Classified	—		—		—		—		—		—		5,352		5,352

Total	—		—		—		—		—		—		408,211		408,211

Multi-family mortgage
Pass	29,006		13,446		11,843		46,561		28,330		35,339		11,094		175,619
Special Mention	—		—		—		—		—		—		—		—
Classified	—		—		—		—		—		57		—		57

Total	29,006		13,446		11,843		46,561		28,330		35,396		11,094		175,676


Commercial real estate:
Owner occupied
Pass	140,904		179,500		97,577		94,659		76,539		224,108		53,451		866,738
Special Mention	967		1,356		4,251		16,173		6,101		2,466		230		31,544
Classified	44		1,785		2,423		6,074		274		11,226		4,733		26,559

Total	141,915		182,641		104,251		116,906		82,914		237,800		58,414		924,841

Non-owner occupied
Pass	166,962		229,442		342,640		221,149		290,163		272,184		38,820		1,561,360
Special Mention	—		1,500		6,672		—		207		8,445		—		16,824
Classified	—		2,210		1,502		—		—		17,083		—		20,795

Total	166,962		233,152		350,814		221,149		290,370		297,712		38,820		1,598,979

Consumer and other loans
Pass	89,625		52,839		39,725		27,201		43,503		37,673		14,817		305,383
Special Mention	281		797		1,588		468		526		1,364		11		5,035
Classified	151		565		1,434		1,161		935		2,308		668		7,222

Total	90,057		54,201		42,747		28,830		44,964		41,345		15,496		317,640


As of December 31, 2020
	Term Loans
	Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total
Total Loans
Pass	1,510,393		1,228,017		813,323		660,160		628,209		836,930		1,171,352		6,848,384
Special Mention	3,371		7,791		16,478		19,060		9,199		18,733		27,720		102,352
Classified	3,717		10,431		23,570		17,274		11,413		44,419		21,399		132,223

Total	$	1,517,481	$	1,246,239	$	853,371	$	696,494	$	648,821	$	900,082	$	1,220,471	$	7,082,959

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 June 30, 2021 and December 31, 2020:


June 30, 2021	30-89 days past due		90 days or more and accruing interest		Non-accrual loans		Loans current on payments and accruing interest		Total
Commercial and industrial	$	757	$	104	$	15,538	$	1,222,541	$	1,238,940
Construction	1,023		487		5,303		1,138,352		1,145,165
Residential real estate:
1-to-4 family mortgage	3,753		8,002		5,094		1,109,774		1,126,623
Residential line of credit	716		48		1,189		399,390		401,343
Multi-family mortgage	—		—		53		363,547		363,600
Commercial real estate:
Owner occupied	1,100		—		8,074		914,431		923,605
Non-owner occupied	737		—		12,016		1,662,461		1,675,214
Consumer and other	2,660		457		3,162		318,185		324,464
Total	$	10,746	$	9,098	$	50,429	$	7,128,681	$	7,198,954


December 31, 2020	30-89 days past due		90 days or more and accruing interest		Non-accrual loans		Loans current on payments and accruing interest		Total
Commercial and industrial	$	3,297	$	330	$	16,005	$	1,326,490	$	1,346,122
Construction	7,607		573		4,053		1,209,987		1,222,220
Residential real estate:
1-to-4 family mortgage	7,058		10,470		5,923		1,065,819		1,089,270
Residential line of credit	3,551		239		1,757		402,664		408,211
Multi-family mortgage	—		57		—		175,619		175,676
Commercial real estate:
Owner occupied	98		—		7,948		916,795		924,841
Non-owner occupied	915		—		12,471		1,585,593		1,598,979
Consumer and other	4,469		2,027		2,603		308,541		317,640
Total	$	26,995	$	13,696	$	50,760	$	6,991,508	$	7,082,959

The following tables provide the amortized cost basis of loans on non-accrual status, as well as any related allowance as of June 30, 2021 and December 31, 2020 by class of financing receivable.



June 30, 2021	Non-accrual with no related allowance		Non-accrual with related allowance		Related allowance
Commercial and industrial	$	14,401	$	1,137	$	119
Construction	4,254		1,049		151
Residential real estate:
1-to-4 family mortgage	1,493		3,601		91
Residential line of credit	830		359		8
Multi-family mortgage	—		53		8
Commercial real estate:
Owner occupied	7,412		662		43
Non-owner occupied	6,418		5,598		736
Consumer and other	—		3,162		162
Total	$	34,808	$	15,621	$	1,318



December 31, 2020	Non-accrual with no related allowance		Non-accrual with related allowance		Related allowance

Commercial and industrial	$	13,960	$	2,045	$	383
Construction	3,061		992		131
Residential real estate:
1-to-4 family mortgage	3,048		2,875		84
Residential line of credit	854		903		31
Multi-family mortgage	—		—		—
Commercial real estate:
Owner occupied	7,172		776		63
Non-owner occupied	4,566		7,905		1,711
Consumer and other	—		2,603		147
Total	$	32,661	$	18,099	$	2,550

The following presents interest income recognized on nonaccrual loans during the three and six months ended June 30, 2021 and 2020:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Commercial and industrial	$	219	$	17	$	333	$	169
Construction	16		6		30		33
Residential real estate:
1-to-4 family mortgage	67		6		85		13
Residential line of credit	27		—		45		1
Multi-family mortgage	1		—		2		—
Commercial real estate:
Owner occupied	101		43		232		64
Non-owner occupied	141		109		230		128
Consumer and other	55		24		55		24
Total	$	627	$	205	$	1,012	$	432

Accrued interest receivable written off as an adjustment to interest income amounted to $132 and $162 for the three months ended June 30, 2021 and 2020, respectively, and $597 and $282 for the six months ended June 30, 2021 and 2020, respectively.

Troubled debt restructurings

As of June 30, 2021 and December 31, 2020, the Company had a recorded investment in TDRs of $42,678 and $15,988, 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, $23,608 and $8,279 were classified as non-accrual loans as of June 30, 2021 and December 31, 2020, respectively. The Company has calculated $1,285 and $310 in allowances for credit losses on TDRs as of June 30, 2021 and December 31, 2020, respectively. Unfunded loan commitments related to these loans totaled $6,153 as of June 30, 2021. There were no commitments to extend any additional funds on troubled debt restructurings as of December 31, 2020.

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


Three Months Ended June 30, 2021	Number of loans	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Charge offs and specific reserves
Commercial and industrial	4	$	13,055	$	13,055	$	—

Commercial real estate:
Owner occupied	4	3,550		3,550		—

Residential real estate:
1-to-4 family mortgage	2	811		811		—
Residential line of credit	1	11		11		—

Total	11	$	17,427	$	17,427	$	—


Six Months Ended June 30, 2021	Number of loans	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Charge offs and specific reserves
Commercial and industrial	5	$	13,162	$	13,162	$	—

Commercial real estate:
Owner occupied	4	3,550		3,550		—
Non-owner occupied	1	11,997		11,997		—
Residential real estate:
1-to-4 family mortgage	2	811		811		—
Residential line of credit	1	11		11		—

Total	13	$	29,531	$	29,531	$	—


Three Months Ended June 30, 2020	Number of loans	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Charge offs and specific reserves
Commercial and industrial	1	$	1,153	$	1,153	$	—

Commercial real estate:
Owner occupied	1	788		788		—

Residential real estate:
1-to-4 family mortgage	1	13		13		—


Total	3	$	1,954	$	1,954	$	—


Six Months Ended June 30, 2020	Number of loans	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Charge offs and specific reserves
Commercial and industrial	1	$	1,153	$	1,153	$	—

Commercial real estate:
Owner occupied	1	788		788		—

Residential real estate:
1-4 family mortgage	2	77		77		—

Total	4	$	2,018	$	2,018	$	—

There were no loans modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the three and six months ended June 30, 2021 and 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 three and six months ended June 30, 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 table presents 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.


	June 30, 2021
	Type of Collateral
	Real Estate		Financial Assets and Equipment		Individually assessed allowance for credit loss
Commercial and industrial	$	696	$	14,524	$	1
Construction	5,993		—		131
Residential real estate:
1-to-4 family mortgage	1,615		—		—
Residential line of credit	1,241		—		8

Commercial real estate:
Owner occupied	10,045		—		23
Non-owner occupied	11,624		—		676

Total	$	31,214	$	14,524	$	839


	December 31, 2020
	Type of Collateral
	Real Estate		Financial Assets and Equipment		Individually assessed allowance for credit loss
Commercial and industrial	$	—	$	1,728	$	117
Construction	3,877		—		—
Residential real estate:
1-to-4 family mortgage	226		—		—
Residential line of credit	1,174		—		9

Commercial real estate:
Owner occupied	3,391		—		30
Non-owner occupied	8,164		—		1,531

Total	$	16,832	$	1,728	$	1,687

Deferrals Program included in COVID-19 Relief

The following table outlines the Company's recorded investment and percentage of loans held for investment by class of financing receivable for executed deferrals remaining on deferral status as of June 30, 2021 or December 31, 2020, in connection with Company's COVID-19 relief programs. These deferrals typically ranged from sixty to ninety days per deferral and the majority were not considered TDRs under the interagency regulatory guidance or CARES Act, issued in March 2020. Section 541 of the Consolidated Appropriations Act (CAA) extended this relief to the earlier of January 1, 2022 or 60 days after the national emergency termination date. As of June 30, 2021 and December 31, 2020, the Company had a recorded investment in loans totaling $1,355,475 and $1,399,088 previously deferred that were no longer in deferral status.


	June 30, 2021				December 31, 2020
				% of Loans					% of Loans
Commercial and industrial		$	13		—	%	$	7,118		0.5	%
Construction		—			—	%	1,918			0.2	%
Residential real estate:
1-to-4 family mortgage		3,194			0.3	%	19,201			1.8	%
Residential line of credit		—			—	%	204			—	%
Multi-family mortgage		—			—	%	3,305			1.9	%
Commercial real estate:
Owner occupied		871			0.1	%	19,815			2.1	%
Non-owner occupied		69,587			4.2	%	139,590			8.7	%
Consumer and other		217			0.1	%	11,366			3.6	%
Total		$	73,882		1.0	%	$	202,517		2.9	%

Other real estate owned

6 Months Ended

Jun. 30, 2021

Real Estate [Abstract]

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 three and six months ended June 30, 2021 and 2020:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Balance at beginning of period	$	11,177	$	17,072	$	12,111	$	18,939
Transfers from loans	3,201		641		4,596		1,006
Transfers to premises and equipment	—		—		—		(841)

Proceeds from sale of other real estate owned	(2,166)		(2,708)		(4,661)		(4,150)
Gain on sale of other real estate owned	272		170		1,100		345
Loans provided for sales of other real estate owned	(203)		—		(533)		—
Write-downs and partial liquidations	(295)		(84)		(627)		(208)
Balance at end of period	$	11,986	$	15,091	$	11,986	$	15,091

Foreclosed residential real estate properties totaled $774 and $1,890 as of June 30, 2021 and December 31, 2020, respectively. The recorded investment in residential mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process totaled $31 and $167 at June 30, 2021 and December 31, 2020, respectively.

Excess land and facilities held for sale resulting from branch consolidations totaled $5,498 and $5,703 as of June 30, 2021 and December 31, 2020, respectively.

Leases

6 Months Ended

Jun. 30, 2021

Leases [Abstract]

Leases

Leases:

As of June 30, 2021, the Company was the lessee in 58 operating leases and 1 finance lease of certain branch, mortgage and operations locations, of which 44 operating leases and 1 finance lease currently have remaining terms varying from greater than one year to 34 years. Leases with initial terms of less than one year are not recorded on the consolidated balance sheets. The Company also does not include equipment leases and leases in which the Company is the lessor 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 a lease for a new corporate headquarters building located in downtown Nashville. The building is currently under construction and anticipated to be completed in late 2022.

Upon commencement, the Company estimates recording a ROU asset and operating lease liability of approximately $29,000 and $30,000, respectively, in connection with this lease.

Information related to the Company's leases is presented below as of June 30, 2021 and December 31, 2020:


		June 30,			December 31,
	Classification	2021			2020
Right-of-use assets:
Operating leases	Operating lease right-of-use assets	$	45,423		$	49,537
Finance leases	Premises and equipment, net	1,533			1,588
Total right-of-use assets		$	46,956		$	51,125
Lease liabilities:
Operating leases	Operating lease liabilities	$	50,396		$	55,187
Finance leases	Borrowings	1,555			1,598
Total lease liabilities		$	51,951		$	56,785
Weighted average remaining lease term (in years) - operating		12.3			12.2
Weighted average remaining lease term (in years) - finance		13.9			14.4
Weighted average discount rate - operating		2.72		%	2.65		%
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:


		Three Months Ended				Six Months Ended
		June 30,				June 30,
	Classification	2021		2020			2021		2020
Operating lease costs:
Amortization of right-of-use asset	Occupancy and equipment	$	2,171	$	1,389		$	4,110	$	2,678
Short-term lease cost	Occupancy and equipment	102		30			189		166
Variable lease cost	Occupancy and equipment	241		160			476		298

Gain on lease modifications and terminations	Occupancy and equipment	(787)		—			(787)		—
Finance lease costs:
Interest on lease liabilities	Interest expense on borrowings	8		—			14		—
Amortization of right-of-use asset	Occupancy and equipment	27		—			55		—
Total lease cost		$	1,762	$	1,579		$	4,057	$	3,142

During the three and six months ended June 30, 2021, the Company recorded a $787 gain on lease modifications and terminations on certain vacated locations that were consolidated as a result of acquisitions.

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 June 30, 2021 is as follows:


	Operating		Finance
	Leases		Lease
Lease payments due:
June 30, 2022	$	7,734	$	115
June 30, 2023	6,759		117
June 30, 2024	5,696		119
June 30, 2025	5,002		121
June 30, 2026	4,675		122
Thereafter	30,976		1,164
Total undiscounted future minimum lease payments	60,842		1,758
Less: imputed interest	(10,446)		(203)
Lease liability	$	50,396	$	1,555

Leases

Leases:

As of June 30, 2021, the Company was the lessee in 58 operating leases and 1 finance lease of certain branch, mortgage and operations locations, of which 44 operating leases and 1 finance lease currently have remaining terms varying from greater than one year to 34 years. Leases with initial terms of less than one year are not recorded on the consolidated balance sheets. The Company also does not include equipment leases and leases in which the Company is the lessor 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 a lease for a new corporate headquarters building located in downtown Nashville. The building is currently under construction and anticipated to be completed in late 2022.

Upon commencement, the Company estimates recording a ROU asset and operating lease liability of approximately $29,000 and $30,000, respectively, in connection with this lease.

Information related to the Company's leases is presented below as of June 30, 2021 and December 31, 2020:


		June 30,			December 31,
	Classification	2021			2020
Right-of-use assets:
Operating leases	Operating lease right-of-use assets	$	45,423		$	49,537
Finance leases	Premises and equipment, net	1,533			1,588
Total right-of-use assets		$	46,956		$	51,125
Lease liabilities:
Operating leases	Operating lease liabilities	$	50,396		$	55,187
Finance leases	Borrowings	1,555			1,598
Total lease liabilities		$	51,951		$	56,785
Weighted average remaining lease term (in years) - operating		12.3			12.2
Weighted average remaining lease term (in years) - finance		13.9			14.4
Weighted average discount rate - operating		2.72		%	2.65		%
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:


		Three Months Ended				Six Months Ended
		June 30,				June 30,
	Classification	2021		2020			2021		2020
Operating lease costs:
Amortization of right-of-use asset	Occupancy and equipment	$	2,171	$	1,389		$	4,110	$	2,678
Short-term lease cost	Occupancy and equipment	102		30			189		166
Variable lease cost	Occupancy and equipment	241		160			476		298

Gain on lease modifications and terminations	Occupancy and equipment	(787)		—			(787)		—
Finance lease costs:
Interest on lease liabilities	Interest expense on borrowings	8		—			14		—
Amortization of right-of-use asset	Occupancy and equipment	27		—			55		—
Total lease cost		$	1,762	$	1,579		$	4,057	$	3,142

During the three and six months ended June 30, 2021, the Company recorded a $787 gain on lease modifications and terminations on certain vacated locations that were consolidated as a result of acquisitions.

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 June 30, 2021 is as follows:


	Operating		Finance
	Leases		Lease
Lease payments due:
June 30, 2022	$	7,734	$	115
June 30, 2023	6,759		117
June 30, 2024	5,696		119
June 30, 2025	5,002		121
June 30, 2026	4,675		122
Thereafter	30,976		1,164
Total undiscounted future minimum lease payments	60,842		1,758
Less: imputed interest	(10,446)		(203)
Lease liability	$	50,396	$	1,555

Mortgage servicing rights

6 Months Ended

Jun. 30, 2021

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 three and six months ended June 30, 2021 and 2020:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020


Carrying value at beginning of period	$	104,192	$	62,581	$	79,997	$	75,521
Capitalization	10,573		12,267		22,167		20,063





Change in fair value:
Due to pay-offs/pay-downs	(7,865)		(7,277)		(17,186)		(11,920)
Due to change in valuation inputs or assumptions	(5,285)		(7,063)		16,637		(23,156)
Carrying value at end of period	$	101,615	$	60,508	$	101,615	$	60,508

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 three and six months ended June 30, 2021 and 2020:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Servicing income:
Servicing income	$	6,788	$	5,113	$	13,719	$	10,131
Change in fair value of mortgage servicing rights	(13,150)		(14,340)		(549)		(35,076)
Change in fair value of derivative hedging instruments	10,005		1,102		(7,859)		15,970
Servicing income	3,643		(8,125)		5,311		(8,975)
Servicing expenses	2,693		1,992		5,225		3,393
Net servicing income (loss)(1)	$	950	$	(10,117)	$	86	$	(12,368)

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

Data and key economic assumptions related to the Company’s mortgage servicing rights as of June 30, 2021 and December 31, 2020 are as follows:


	June 30,			December 31,
	2021			2020
Unpaid principal balance	$	10,527,708		$	9,787,657
Weighted-average prepayment speed (CPR)	11.07		%	14.07		%
Estimated impact on fair value of a 10% increase	$	(4,840)		$	(4,493)
Estimated impact on fair value of a 20% increase	$	(9,311)		$	(8,599)
Discount rate	11.05		%	11.49		%
Estimated impact on fair value of a 100 bp increase	$	(3,981)		$	(2,942)
Estimated impact on fair value of a 200 bp increase	$	(7,700)		$	(5,674)
Weighted-average coupon interest rate	3.35		%	3.58		%
Weighted-average servicing fee (basis points)	28			28
Weighted-average remaining maturity (in months)	329			328

The Company 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 10, "Derivatives" for additional information on these hedging instruments.

As of June 30, 2021 and December 31, 2020, mortgage escrow deposits totaled to $166,126 and $147,957, 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
-Topic 860
-SubTopic 30
-Section 50
-Paragraph 1A
-Subparagraph (c)(3)
-URI http://asc.fasb.org/extlink&oid=109249958&loc=SL6224234-111729

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 30
-Section 50
-Paragraph 1A
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=109249958&loc=SL6224234-111729

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 3
-Subparagraph (b)(2)(ii)
-URI http://asc.fasb.org/extlink&oid=121570589&loc=d3e107207-111719

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 3
-Subparagraph (cc)
-URI http://asc.fasb.org/extlink&oid=121570589&loc=d3e107207-111719

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 2
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=125521744&loc=d3e122596-111746

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 3
-Subparagraph (a)(5)
-URI http://asc.fasb.org/extlink&oid=125521744&loc=d3e122625-111746

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 4D
-Subparagraph (c)(3)
-URI http://asc.fasb.org/extlink&oid=121570589&loc=SL51823488-111719

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 3
-Subparagraph (b)(2)(i)
-URI http://asc.fasb.org/extlink&oid=121570589&loc=d3e107207-111719

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 4
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=125521744&loc=d3e122739-111746

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121570589&loc=d3e107207-111719

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 30
-Section 50
-Paragraph 7
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=109249958&loc=SL34722452-111729

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 3
-Subparagraph (a)(4)(ii)
-URI http://asc.fasb.org/extlink&oid=125521744&loc=d3e122625-111746

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 4
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121570589&loc=d3e107314-111719

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 3
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=125521744&loc=d3e122625-111746

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 4
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121570589&loc=d3e107314-111719

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-URI http://asc.fasb.org/topic&trid=2197590

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 4
-Subparagraph (a)(7)
-URI http://asc.fasb.org/extlink&oid=125521744&loc=d3e122739-111746

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 4
-Subparagraph (a)(5)(ii)
-URI http://asc.fasb.org/extlink&oid=121570589&loc=d3e107314-111719

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 2
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=125521744&loc=d3e122596-111746

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=125521744&loc=d3e122596-111746

+ Details

Income taxes

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income taxes

Income taxes:

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


	Three Months Ended June 30,
	2021		2020
Current	$	9,541	$	15,747
Deferred	3,899		(8,292)
Total	$	13,440	$	7,455

	Six Months Ended June 30,
	2021		2020
Current	$	15,490	$	23,915
Deferred	13,538		(16,380)
Total	$	29,028	$	7,535

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 three and six months ended June 30, 2021 and 2020:


	Three Months Ended June 30,
	2021				2020
Federal taxes calculated at statutory rate	$	11,916	21.0	%	$	6,369	21.0	%
Increase (decrease) resulting from:
State taxes, net of federal benefit	1,879		3.3	%	1,298		4.3	%


(Benefit) expense from equity based compensation	(124)		(0.2)	%	22		0.1	%
Municipal interest income, net of interest disallowance	(419)		(0.7)	%	(310)		(1.0)	%
Bank owned life insurance	(82)		(0.1)	%	(17)		(0.1)	%
Merger and offering costs	127		0.2	%	32		0.1	%
Section 162(m) limitation	21		—	%	—		—	%
Other	122		0.2	%	61		0.2	%
Income tax expense, as reported	$	13,440	23.7	%	$	7,455	24.6	%

	Six Months Ended June 30,
	2021				2020
Federal taxes calculated at statutory rate	$	26,293	21.0	%	$	6,542	21.0	%
Increase (decrease) resulting from:
State taxes, net of federal benefit	3,629		2.9	%	1,166		3.7	%
(Benefit) expense from equity based compensation	(345)		(0.3)	%	161		0.5	%
Municipal interest income, net of interest disallowance	(843)		(0.7)	%	(574)		(1.8)	%
Bank owned life insurance	(166)		(0.1)	%	(35)		(0.1)	%
Merger and offering costs	127		0.1	%	163		0.5	%
Section 162(m) limitation	248		0.2	%	—		—	%
Other	85		0.1	%	112		0.4	%
Income tax expense, as reported	$	29,028	23.2	%	$	7,535	24.2	%

As of August 15, 2020, the Company acquired $8,346 of net operating losses from Franklin. The net operating loss carryforwards 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 IRC Section 382, the Company believes the net operating losses carryforward 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 is set to expire as of December 31, 2029.

The Company is subject to Internal Revenue Code Section 162(m), which limits the deductibility of compensation of certain individuals. The restricted stock unit plans that existed prior to the corporation being public will have payments in 2021 after the reliance period defined in the Section 162 regulations. Under the limitations of IRC Section 162(m), the Company will not be able to realize the deferred tax asset established on certain restricted stock units granted to these

covered individuals. Therefore, a valuation allowance was established in the first quarter of 2021 for the Company's inability to take the benefit of the exercise of the restricted stock units. It is the Company’s policy to apply the IRC Section 162(m) limitations to stock based compensation first; therefore, the first quarter 2021 nondeductible IRC Section 162(m) expense was related to cash compensation and expense on the exercised restricted stock units that were above the limit as defined in IRC Section 162(m).

The components of the net deferred tax assets at June 30, 2021 and December 31, 2020, are as follows:


	June 30,		December 31
	2021		2020
Deferred tax assets:
Allowance for credit losses	$	40,878	$	48,409
Operating lease liabilities	13,067		14,496
Federal net operating loss	1,753		1,753

Deferred compensation	8,572		8,872


Unrealized loss on cash flow hedges	364		499
Other	19,817		19,101
Subtotal	84,451		93,130
Deferred tax liabilities:
FHLB stock dividends	$	(561)	$	(561)
Operating leases - right of use assets	(11,831)		(13,197)
Depreciation	(7,088)		(7,491)
Amortization of core deposit intangibles	(349)		(684)
Unrealized gain on equity securities	(3,877)		(17)

Unrealized gain on debt securities	(5,987)		(13,027)
Mortgage servicing rights	(26,435)		(20,803)
Goodwill	(12,522)		(11,301)
Other	(9,828)		(9,653)
Subtotal	(78,478)		(76,734)
Net deferred tax assets	$	5,973	$	16,396

- 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 http://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 http://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 http://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 http://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 http://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 http://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 http://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 http://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 http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Commitments and contingencies

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

Commitments and contingencies:

Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, 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.

Commitments may expire without being used. Off-balance sheet risk of credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.


	June 30,		December 31,
	2021		2020
Commitments to extend credit, excluding interest rate lock commitments	$	2,529,697	$	2,719,996
Letters of credit	68,792		67,598
Balance at end of period	$	2,598,489	$	2,787,594

As of June 30, 2021 and December 31, 2020, loan commitments included above with floating interest rates totaled $1.82 billion and $1.65 billion, respectively.

The Company estimates expected credit losses on off-balance sheet loan commitments that are not accounted for as derivatives. When applying the CECL methodology to estimate 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.

The table below presents activity within the allowance for credit losses on unfunded commitments for the three and six months ended June 30, 2021 and 2020:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Balance at beginning of period	$	14,156	$	4,618	$	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	—		—		—		70
Provision for credit losses on unfunded commitments	(954)		1,882		(3,176)		3,483
Balance at end of period	$	13,202	$	6,500	$	13,202	$	6,500

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 $761 and $1,469 for the three and six months ended June 30, 2021, respectively and $1,568 and $4,367 for the three and six months ended June 30, 2020, respectively. The Company has established a reserve associated with loan repurchases. This reserve is recorded in accrued expenses and other liabilities on the consolidated balance sheets.

The following table summarizes the activity in the repurchase reserve:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Balance at beginning of period	$	6,284	$	3,829	$	5,928	$	3,529
Provision for loan repurchases or indemnifications	(706)		855		(266)		1,227

Losses on loans repurchased or indemnified	(89)		(83)		(173)		(155)
Balance at end of period	$	5,489	$	4,601	$	5,489	$	4,601

Derivatives

6 Months Ended

Jun. 30, 2021

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 item “Other assets” or “Other liabilities” at fair value in accordance with ASC 815, “Derivatives and Hedging.”

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 enters into forward commitments, futures and options contracts that are not designated as hedging instruments 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 that are not designated as hedging 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 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%. 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. As of June 30, 2021 and December 31, 2020, the fair value of these contracts resulted in liability balances of $1,391 and $1,909, respectively.

In July 2017, the Company entered into three interest rate swap contracts on floating rate liabilities at the Bank level with notional amounts of $30,000, $35,000 and $35,000 for a period of three, four and five years, respectively. These interest rate swaps were designated as cash flow hedges with the objective of reducing the variability of cash flows associated with $100,000 of FHLB borrowings. During 2018, these swaps were canceled, locking in a tax-adjusted gain of $1,564 in other comprehensive income to be accreted over the three, four and five-year terms of the underlying contracts. During the year ended December 31, 2020, the Company did not renew the advances associated with the legacy cash flow hedge, and reclassified the remaining unamortized gain, from accumulated other comprehensive income to earnings.

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


	June 30, 2021
	Notional Amount		Asset		Liability
Not designated as hedging:
Interest rate contracts	$	650,268	$	26,355	$	26,168
Forward commitments	1,172,717		—		1,401
Interest rate-lock commitments	787,258		13,120		—
Futures contracts	502,500		2,707		—

Total	$	3,112,743	$	42,182	$	27,569


	December 31, 2020
	Notional Amount		Asset		Liability
Not designated as hedging:
Interest rate contracts	$	606,878	$	34,547	$	34,317
Forward commitments	1,358,328		—		11,633
Interest rate-lock commitments	1,191,621		34,391		—
Futures contracts	375,400		—		383

Total	$	3,532,227	$	68,938	$	46,333


	June 30, 2021
	Notional Amount		Asset		Liability
Designated as hedging:
Interest rate swaps	$	30,000	$	—	$	1,391


	December 31, 2020
	Notional Amount		Asset		Liability
Designated as hedging:
Interest rate swaps	$	30,000	$	—	$	1,909

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Not designated as hedging instruments (included in mortgage banking income):
Interest rate lock commitments	$	171	$	9,541	$	(21,271)	$	30,003
Forward commitments	(19,200)		(13,993)		24,058		(40,450)
Futures contracts	9,104		631		(7,228)		11,542

Total	$	(9,925)	$	(3,821)	$	(4,441)	$	1,095


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Designated as hedging:
Amount of gain reclassified from other comprehensive income and recognized in interest expense on borrowings, net of taxes of $0, $52, $0, and $104	$	—	$	148	$	—	$	295
Loss included in interest expense on borrowings	(143)		(62)		(280)		(74)
Total	$	(143)	$	86	$	(280)	$	221

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Designated as hedging:
Amount of gain (loss) recognized in other comprehensive income, net of tax $23, $(40), $135, and $(443)	$	67	$	(112)	$	383	$	(1,257)

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
	June 30, 2021		December 31, 2020		June 30, 2021		December 31, 2020
Gross amounts recognized	$	4,466	$	3,863	$	23,536	$	34,051
Gross amounts offset in the consolidated balance sheets	—		—		—		—
Net amounts presented in the consolidated balance sheets	4,466		3,863		23,536		34,051

Gross amounts not offset in the consolidated balance sheets
Less: financial instruments	3,146		857		3,146		857
Less: financial collateral pledged	—		—		20,390		33,194
Net amounts	$	1,320	$	3,006	$	—	$	—

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. At June 30, 2021 and December 31, 2020, the Company had minimum collateral posting thresholds with certain derivative counterparties and had collateral posted of $66,557 and $57,985, respectively, against its obligations under these agreements. Cash collateral related to derivative contracts is recorded in other assets in the consolidated balance sheets.

Fair value of financial instruments

6 Months Ended

Jun. 30, 2021

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. Commercial loans held for sale at fair value 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.

Derivatives - The fair value of the Company's interest rate swaps 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. Fair value of commitments 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. 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
June 30, 2021	Carrying amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	1,717,097	$	1,717,097	$	—	$	—	$	1,717,097
Investment securities	1,409,175		—		1,409,175		—		1,409,175

Loans, net	7,054,291		—		—		7,199,111		7,199,111
Loans held for sale	821,529		—		697,407		124,122		821,529
Interest receivable	42,083		72		6,119		35,892		42,083
Mortgage servicing rights	101,615		—		—		101,615		101,615
Derivatives	42,182		—		42,182		—		42,182
Financial liabilities:
Deposits:
Without stated maturities	$	8,921,516	$	8,921,516	$	—	$	—	$	8,921,516
With stated maturities	1,282,440		—		1,292,720		—		1,292,720
Securities sold under agreement to repurchase and federal funds sold	33,056		33,056		—		—		33,056

Subordinated debt	149,351		—		—		153,631		153,631
Other borrowings	1,555		—		1,555		—		1,555
Interest payable	4,136		169		2,442		1,525		4,136
Derivatives	28,960		—		28,960		—		28,960


	Fair Value
December 31, 2020	Carrying amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	1,317,898	$	1,317,898	$	—	$	—	$	1,317,898
Investment securities	1,176,991		—		1,176,991		—		1,176,991

Loans, net	6,912,570		—		—		7,058,693		7,058,693
Loans held for sale	899,173		—		683,770		215,403		899,173
Interest receivable	43,603		33		5,254		38,316		43,603
Mortgage servicing rights	79,997		—		—		79,997		79,997
Derivatives	68,938		—		68,938		—		68,938
Financial liabilities:
Deposits:
Without stated maturities	$	8,020,783	$	8,020,783	$	—	$	—	$	8,020,783
With stated maturities	1,437,254		—		1,446,605		—		1,446,605
Securities sold under agreement to repurchase and federal funds sold	32,199		32,199		—		—		32,199

Subordinated debt	189,527		—		—		192,149		192,149
Other borrowings	16,598		—		16,598		—		16,598
Interest payable	6,772		327		4,210		2,235		6,772
Derivatives	48,242		—		48,242		—		48,242

The balances and levels of the assets measured at fair value on a recurring basis at June 30, 2021 are presented in the following table:


At June 30, 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	$	—	$	8,255	$	—	$	8,255
Mortgage-backed securities - residential	—		1,035,003		—		1,035,003
Mortgage-backed securities - commercial	—		15,161		—		15,161
Municipal securities	—		332,883		—		332,883
Treasury securities	—		10,534		—		10,534
Corporate securities	—		2,536		—		2,536
Equity securities	—		4,803		—		4,803
Total securities	$	—	$	1,409,175	$	—	$	1,409,175
Loans held for sale	—		697,407		124,122		821,529
Mortgage servicing rights	—		—		101,615		101,615
Derivatives	—		42,182		—		42,182
Financial Liabilities:
Derivatives	—		28,960		—		28,960

The balances and levels of the assets measured at fair value on a non-recurring basis at June 30, 2021 are presented in the following table:


At June 30, 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	$	—	$	—	$	6,927	$	6,927
Collateral dependent loans:
Commercial and industrial	$	—	$	—	$	15,220	$	15,220
Construction	—		—		5,993		5,993
Residential real estate:
1-4 family mortgage	—		—		1,615		1,615
Residential line of credit	—		—		1,241		1,241

Commercial real estate:
Owner occupied	—		—		10,045		10,045
Non-owner occupied	—		—		11,624		11,624

Total collateral dependent loans	$	—	$	—	$	45,738	$	45,738

The balances and levels of the assets measured at fair value on a recurring basis at December 31, 2020 are presented in the following table:


At December 31, 2020	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	$	—	$	2,003	$	—	$	2,003
Mortgage-backed securities - residential	—		773,336		—		773,336
Mortgage-backed securities - commercial	—		21,588		—		21,588
Municipals, tax-exempt	—		356,329		—		356,329
Treasury securities	—		16,628		—		16,628
Corporate securities	—		2,516		—		2,516
Equity securities	—		4,591		—		4,591
Total securities	$	—	$	1,176,991	$	—	$	1,176,991
Loans held for sale	$	—	$	683,770	$	215,403	$	899,173
Mortgage servicing rights	—		—		79,997		79,997
Derivatives	—		68,938		—		68,938
Financial Liabilities:
Derivatives	—		48,242		—		48,242

The balances and levels of the assets measured at fair value on a non-recurring basis at December 31, 2020 are presented in the following table:


At December 31, 2020	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	$	—	$	—	$	6,662	$	6,662
Collateral dependent loans:
Commercial and industrial	$	—	$	—	$	1,728	$	1,728
Construction	—		—		3,877		3,877
Residential real estate:
1-4 family mortgage	—		—		226		226
Residential line of credit	—		—		1,174		1,174
Commercial real estate:
Owner occupied	—		—		3,391		3,391
Non-owner occupied	—		—		8,164		8,164

Total collateral dependent loans	$	—	$	—	$	18,560	$	18,560

The following tables present information as of June 30, 2021 and December 31, 2020 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a nonrecurring basis:

As of June 30, 2021

Financial instrument

Fair Value

Valuation technique

Significant
Unobservable inputs

Range of
inputs

Collateral dependent loans

$

45,738

Valuation of collateral

Discount for comparable sales

0%-30%

Other real estate owned

$

6,927

Appraised value of property less costs to sell

Discount for costs to sell

0%-15%

As of December 31, 2020

Financial instrument

Fair Value

Valuation technique

Significant
Unobservable inputs

Range of
inputs

Collateral dependent loans

$

18,560

Valuation of collateral

Discount for comparable sales

0%-30%

Other real estate owned

$

6,662

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 the 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 client and client's business. 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, at fair value, as of the dates presented:


	June 30,		December 31,
	2021		2020
Commercial and industrial	$	124,122	$	215,403
Residential real estate:
1-4 family mortgage	697,407		683,770
Total loans held for sale	$	821,529	$	899,173

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 gains (losses) of $9,730 and $(10,986) resulting from fair value changes of mortgage loans were recorded in income during the three and six months ended June 30, 2021, respectively, compared to net gains of $8,048 and $13,866 during the three and six months ended June 30, 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 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.

Government National Mortgage Association (GNMA) optional repurchase programs allow financial institutions to buy back

individual delinquent mortgage loans that meet certain criteria from the securitized loan pool for which the institution provides servicing and was the original transferor. 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. 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 brought back onto the balance sheet, regardless of whether the Company intends to exercise the buy-back option if the buyback option provides the transferor a more-than-trivial benefit. As of June 30, 2021, and December 31, 2020, there were $120,880 and $151,184, respectively, 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.

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.

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 acquisition of 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 table sets forth the changes in fair value associated with this portfolio.


	Three Months Ended June 30, 2021
	Principal Balance		Fair Value Discount		Fair Value
Carrying value at beginning of period	$	197,490	$	(22,506)	$	174,984
Change in fair value:
Pay-downs and pay-offs	(52,226)		—		(52,226)
Write-offs to discount	(9,292)		9,292		—
Changes in valuation included in other noninterest income	—		1,364		1,364
Carrying value at end of period	$	135,972	$	(11,850)	$	124,122

	Six Months Ended June 30, 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	(91,792)		—		(91,792)
Write-offs to discount	(11,299)		11,299		—
Changes in valuation included in other noninterest income	—		511		511
Carrying value at end of period	$	135,972	$	(11,850)	$	124,122

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 loan 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 June 30, 2021 and December 31, 2020:


June 30, 2021	Aggregate fair value		Aggregate Unpaid Principal Balance		Difference
Mortgage loans held for sale measured at fair value	$	697,407	$	676,510	$	20,897
Commercial loans held for sale measured at fair value	118,278		124,846		(6,568)

Nonaccrual loans	5,844		11,126		(5,282)

December 31, 2020
Mortgage loans held for sale measured at fair value	$	683,770	$	651,887	$	31,883
Commercial loans held for sale measured at fair value	208,914		226,867		(17,953)
Past due loans of 90 days or more	83		163		(80)
Nonaccrual loans	6,406		12,033		(5,627)

- 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

Segment reporting

6 Months Ended

Jun. 30, 2021

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 offers full-service conforming residential mortgage products, including conforming residential loans and services through two distinct delivery channels: retail and ConsumerDirect. Additionally, the Mortgage segment includes 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.

As previously reported, on March 31, 2021, the Company re-evaluated its business segments and revised to align all mortgage activities with the Mortgage segment. Previously, the Company had attributed retail mortgage activities originating from geographical locations within the footprint of the Company's branches to the Banking segment. Results for the comparable prior period have been revised to reflect this realignment. The impact of this change on previously reported segment results was the reclassification of mortgage retail footprint total net contribution of $5,398 and $8,874 from the Banking segment to the Mortgage segment for the three and six months ended June 30, 2020, respectively.

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. The Mortgage segment utilizes funding sources from the Banking segment in order to fund mortgage loans that are ultimately sold on the secondary market. The Mortgage segment uses the proceeds from loan sales to repay obligations due to the Banking segment.

The following tables provide segment financial information for three and six months ended June 30, 2021 and 2020 as follows:


Three months ended June 30, 2021	Banking		Mortgage		Consolidated
Net interest income	$	86,553	$	10	$	86,563
Provisions for credit losses(1)	(13,839)		—		(13,839)
Mortgage banking income(2)	—		38,644		38,644
Change in fair value of mortgage servicing rights, net of hedging(2)	—		(3,145)		(3,145)
Other noninterest income	14,002		(201)		13,801
Depreciation and amortization	1,618		344		1,962
Amortization of intangibles	1,394		—		1,394

Other noninterest expense	55,182		34,422		89,604
Income before income taxes	$	56,200	$	542	$	56,742
Income tax expense					13,440
Net income applicable to FB Financial Corporation and noncontrolling interest					43,302
Net income applicable to noncontrolling interest(3)					8
Net income applicable to FB Financial Corporation					$	43,294
Total assets	$	10,908,107	$	1,010,260	$	11,918,367
Goodwill	242,561		—		242,561

(1)Included $(954) 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.


Three months ended June 30, 2020	Banking		Mortgage		Consolidated
Net interest income	$	55,350	$	(13)	$	55,337
Provisions for credit losses(1)	25,921		—		25,921
Mortgage banking income(2)	—		85,406		85,406
Change in fair value of mortgage servicing rights, net of hedging(2)	—		(13,238)		(13,238)
Other noninterest income	9,323		—		9,323
Depreciation and amortization	1,503		247		1,750
Amortization of intangibles	1,205		—		1,205

Other noninterest expense(3)	39,332		38,292		77,624
(Loss) income before income taxes	$	(3,288)	$	33,616	$	30,328
Income tax expense					7,455
Net income applicable to FB Financial Corporation and noncontrolling interest					22,873
Net income applicable to noncontrolling interest(4)					—
Net income applicable to FB Financial Corporation					$	22,873
Total assets	$	6,632,506	$	623,030	$	7,255,536
Goodwill	175,441		—		175,441

(1)Included $1,882 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)Included $1,586 of merger costs in the Banking Segment primarily related to the integration of Farmers National

(4)Banking segment includes noncontrolling interest.


Six Months Ended June 30, 2021	Banking		Mortgage		Consolidated
Net interest income	$	169,150	$	(11)	$	169,139
Provisions for credit losses(1)	(27,693)		—		(27,693)
Mortgage banking income(2)	—		99,239		99,239
Change in fair value of mortgage servicing rights, net of hedging(2)	—		(8,408)		(8,408)
Other noninterest income	25,400		(201)		25,199
Depreciation and amortization	3,476		672		4,148
Amortization of intangibles	2,834		—		2,834

Other noninterest expense	107,619		73,057		180,676
Income before income taxes	$	108,314	$	16,890	$	125,204
Income tax expense					29,028
Net income applicable to FB Financial Corporation and noncontrolling interest					96,176
Net income applicable to noncontrolling interest(3)					8
Net income applicable to FB Financial Corporation					$	96,168
Total assets	$	10,908,107	$	1,010,260	$	11,918,367
Goodwill	242,561		—		242,561

(1)Included $(3,176) 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.


Six Months Ended June 30, 2020	Banking		Mortgage		Consolidated
Net interest income	$	111,583	$	3	$	111,586
Provisions for credit losses(1)	55,486		—		55,486
Mortgage banking income(2)	—		124,019		124,019
Change in fair value of mortgage servicing rights, net of hedging(2)	—		(19,106)		(19,106)
Other noninterest income	19,278		—		19,278
Depreciation and amortization	2,995		497		3,492
Amortization of intangibles	2,408		—		2,408

Other noninterest expense(3)	80,454		62,784		143,238
(Loss) income before income taxes	$	(10,482)	$	41,635	$	31,153
Income tax expense					7,535


Net income applicable to FB Financial Corporation and noncontrolling interest					23,618
Net income applicable to noncontrolling interest(4)					—
Net income applicable to FB Financial Corporation					$	23,618
Total assets	$	6,632,506	$	623,030	$	7,255,536
Goodwill	175,441		—		175,441

(1)Includes $3,483 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 $4,636 of merger costs in the Banking segment related to the Farmers National acquisition and the Franklin merger.

(4)Banking segment includes noncontrolling interest.

Our Banking segment provides our 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, had a prime interest rate of 3.25% as of June 30, 2021 and 2020, and is limited based on interest income earned by the Mortgage segment. The amount of interest paid by our Mortgage segment to our Banking segment under this warehouse line of credit is recorded as interest income to our Banking segment and as interest expense to our Mortgage segment, both of which are included in the calculation of net interest income for each segment. The amount of interest paid by our Mortgage segment to our Banking segment under this warehouse line of credit was $6,110 and $3,335 for the three months ended June 30, 2021 and 2020, respectively, and $11,510 and $5,710 for the six months ended June 30, 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 http://asc.fasb.org/extlink&oid=123359005&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 http://asc.fasb.org/extlink&oid=123359005&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 http://asc.fasb.org/extlink&oid=123359005&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 http://asc.fasb.org/extlink&oid=123359005&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 http://asc.fasb.org/extlink&oid=123359005&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 http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=123359005&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 http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=123359005&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 http://asc.fasb.org/extlink&oid=123359005&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 http://asc.fasb.org/extlink&oid=123359005&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 http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599

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

+ Details

Minimum capital requirements

6 Months Ended

Jun. 30, 2021

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 June 30, 2021 and December 31, 2020, 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 maintains 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.

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


	Actual				Minimum Capital adequacy with capital buffer			To be well capitalized under prompt corrective action provisions
	Amount		Ratio			Amount		Ratio		Amount		Ratio
June 30, 2021
Total Capital (to risk-weighted assets)
FB Financial Corporation	$	1,383,471	14.9	%		$	974,690	10.5	%	N/A		N/A
FirstBank	1,317,759		14.2	%		971,072		10.5	%	$	924,831	10.0	%
Tier 1 Capital (to risk-weighted assets)
FB Financial Corporation	$	1,177,609	12.7	%		$	789,034	8.5	%	N/A		N/A
FirstBank	1,131,897		12.2	%		786,106		8.5	%	$	739,865	8.0	%
Tier 1 Capital (to average assets)
FB Financial Corporation	$	1,177,609	10.1	%		$	466,866	4.0	%	N/A		N/A
FirstBank	1,131,897		9.7	%		465,961		4.0	%	$	582,451	5.0	%
Common Equity Tier 1 Capital (to risk-weighted assets)
FB Financial Corporation	$	1,147,609	12.4	%		$	649,793	7.0	%	N/A		N/A
FirstBank	1,131,897		12.2	%		647,382		7.0	%	$	601,140	6.5	%


	Actual				Minimum Capital adequacy with capital buffer			To be well capitalized under prompt corrective action provisions
	Amount		Ratio			Amount		Ratio		Amount		Ratio
December 31, 2020
Total Capital (to risk-weighted assets)
FB Financial Corporation	$	1,358,897	15.0	%		$	952,736	10.5	%	N/A		N/A
FirstBank	1,353,279		14.9	%		951,327		10.5	%	$	906,026	10.0	%
Tier 1 Capital (to risk-weighted assets)
FB Financial Corporation	$	1,090,364	12.0	%		$	771,262	8.5	%	N/A		N/A
FirstBank	1,142,548		12.6	%		770,122		8.5	%	$	724,820	8.0	%
Tier 1 Capital (to average assets)
FB Financial Corporation	$	1,090,364	10.0	%		$	435,064	4.0	%	N/A		N/A
FirstBank	1,142,548		10.5	%		435,279		4.0	%	$	544,098	5.0	%
Common Equity Tier 1 Capital (to risk-weighted assets)
FB Financial Corporation	$	1,060,364	11.7	%		$	635,157	7.0	%	N/A		N/A
FirstBank	1,142,548		12.6	%		634,218		7.0	%	$	588,917	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

Stock-based compensation

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

Stock-based compensation

Stock-Based Compensation

Restricted Stock Units

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 following table summarizes information about the changes in restricted stock units as of the dates indicated:


	Six Months Ended June 30,
	2021			2020
	Restricted Stock Units Outstanding	Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding	Weighted Average Grant Date Fair Value
Balance at beginning of period	1,047,071	$	26.06	826,263	$	23.76
Granted	193,760	43.06		132,605	33.92
Vested	(159,114)	32.63		(132,203)	32.52
Forfeited	(29,639)	27.36		(14,826)	34.24
Balance at end of period	1,052,078	$	27.73	811,839	$	24.84

The total fair value of restricted stock units vested and released was $828 and $5,192 for the three and six months ended June 30, 2021, respectively, and $1,048 and $4,299 for the three and six months ended June 30, 2020, respectively.

The compensation cost related to stock grants and vesting of restricted stock units was $2,193 and $4,659 for the three and six months ended June 30, 2021, respectively, and $2,015 and $3,817 for the three and six months ended June 30, 2020, respectively. This included $142 and $299 paid to Company directors during the three and six months ended June 30, 2021, respectively, and $231 and $378 during the three and six months ended June 30, 2020, related to director grants and compensation elected to be settled in stock.

As of June 30, 2021 and December 31, 2020, there was $16,091 and $13,436 of total unrecognized compensation cost related to unvested restricted stock units which is expected to be recognized over a weighted-average period of 2.7 years and 2.5 years, respectively. As of June 30, 2021 and December 31, 2020, there were 2,158,408 and 2,240,434 shares available for issuance under the 2016-LTIP plan, respectively. At June 30, 2021 and December 31, 2020, there was $741 and $613, respectively, accrued in other liabilities related to dividends declared to be paid upon vesting and distribution of the underlying restricted stock units.

Performance Based Restricted Stock Units

The following table summarizes information about the changes in performance stock units as of and for the six months ended June 30, 2021 and 2020.




	Six Months Ended June 30,
	2021			2020
	Performance Stock Units Outstanding	Weighted Average Grant Date Fair Value		Performance Stock Units Outstanding	Weighted Average Grant Date Fair Value
Balance at beginning of period (unvested)	53,147	$	36.21	—	$	—
Granted	65,304	43.20		53,147	36.21
Vested	—	—		—	—
Forfeited or expired	(2,319)	36.73		—	—
Balance at end of period (unvested)	116,132	$	40.13	53,147	$	36.21

The Company awards performance-based restricted stock units to executives and other officers and 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 during the fixed three-year performance period. The

number of shares issued upon vesting will range from 0% to 200% of the PSUs granted. The PSUs vest at the end of a three-year period based on average adjusted return on tangible equity as reported, 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 the PSUs will be 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 Company recorded compensation cost of $322 and $522 during the three and six months ended June 30, 2021 respectively, and $335 and $416 for the three and six months ended June 30, 2020, respectively. As of June 30, 2021, the Company determined the probability of meeting the performance criteria for each grant, and recorded compensation cost associated with a 140.0% (related to shares granted in 2020) and 102.5% (related to shares granted in 2021) vesting, when factoring in the conversion of PSUs to shares of common stock. As of June 30, 2021, maximum unrecognized compensation cost at 200% payout related to the unvested PSUs was $7,829, and the remaining performance period over which the cost could be recognized was 2.4 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 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 no shares issued under ESPP during the three months ended June 30, 2021 and 2020, respectively. During the six months ended June 30, 2021 and 2020, there were 21,566 and 12,145 shares of common stock issued under the ESPP, respectively. As of June 30, 2021 and December 31, 2020, there were 2,357,440 and 2,379,006 shares available for issuance under the ESPP, respectively.

Related party transactions

6 Months Ended

Jun. 30, 2021

Related party transactions

Related party transactions:

(A) Loans:

The Bank has made and expects to continue to make loans to the directors, certain management and executive officers of the Company and their affiliates 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 affiliates is presented below:


Loans outstanding at January 1, 2021	$	24,675
New loans and advances	1,687
Change in related party status	(98)
Repayments	(4,933)
Loans outstanding at June 30, 2021	$	21,331

Unfunded commitments to certain executive officers, certain management and directors and their associates totaled $20,465 and $23,059 at June 30, 2021 and December 31, 2020, respectively.

(B) Deposits:

The Bank held deposits from related parties totaling $303,900 and $245,084 as of June 30, 2021 and December 31, 2020, respectively.

(C) Leases:

The Bank leases various office spaces from entities owned by certain directors of the Company under varying terms. The Company had $21 and $53 in unamortized leasehold improvements related to these leases at June 30, 2021 and December 31, 2020, respectively. These improvements are being amortized over a term not to exceed the length of the lease. Lease expense for these properties totaled $132 and $260 for the three and six months ended June 30, 2021, respectively, and $128 and $256 for the three and six months ended June 30, 2020.

(D) Aviation time sharing agreement:

The Company is a participant to aviation time sharing agreements with entities owned by a certain director of the Company. During the three and six months ended June 30, 2021, the Company made payments of $21 and $32, respectively, and $58 and $91 during the three and six months ended June 30, 2020, respectively, under these agreements.

(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 three and six months ended June 30, 2021, the Company paid $605 under this agreement related to the secondary offering completed during the second quarter of 2021. No such expenses were incurred during the three and six months ended June 30, 2020.

Basis of presentation (Policies)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Overview and presentation

The unaudited consolidated financial statements, including the notes thereto, have been prepared in accordance with United States generally accepted accounting principles interim reporting requirements and general banking industry guidelines, and therefore, do not include all information and notes included in the annual consolidated financial statements in conformity with GAAP. These interim consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K.

The unaudited consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results for interim periods are not necessarily indicative of results for a full year.

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 periods then ended. Actual results could differ significantly from those estimates.

Reclassifications

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.

Earnings per share

Basic EPS excludes dilution and is computed by dividing earnings available 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 available to common shareholders by the weighted average number of common shares outstanding for the period, 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 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.

Recently adopted accounting policies, Recently adopted accounting standards and Newly issued not yet effective accounting standards

Recently adopted accounting policies:

The Company did not modify or adopt any new accounting policies during the three and six months ended June 30, 2021 that were not disclosed in the Company's 2020 audited consolidated financial statements included on Form 10-K, other than as described below.

As previously disclosed, during the three months March 31, 2021, the Company reevaluated its business segments to align all retail mortgage activities with the Mortgage segment. Previously, the Company assigned retail mortgage activities within the Banking geographical footprint to the Banking segment. See Note 12, "Segment reporting" for additional information on this change.

Recently adopted accounting standards:

Except as set forth below, the Company did not adopt any new accounting standards that were not disclosed in the Company's 2020 audited consolidated financial statements included on Form 10-K.

In January 2021, Financial Accounting Standards Board issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope". This ASU clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. The Company early adopted ASU 2021-01 upon issuance effective January 7, 2021. No contract modifications have been made under the new guidance, therefore the adoption of this update did not impact the Company's financial statements or disclosures.

Newly issued not yet effective accounting standards:

The Company has reviewed newly issued not yet effective accounting standards and concluded as of June 30, 2021, there are none that are likely to impact the Company's financial statements or disclosures.

Allowance for credit losses

Allowance for Credit Losses

The Company estimated the allowance for credit losses under a current expected credit loss model as of June 30, 2021 and December 31, 2020. 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 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 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.

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; TDRs and reasonably expected TDRs. 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 use the same methodology as TDRs. 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 allowance for credit losses on a TDR or a reasonably expected TDR is calculated individually using a discounted cash flow methodology, unless the loan is deemed to be collateral dependent or foreclosure is probable.

Credit Quality

The Company categorizes loans 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 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. The total amortized cost of loans rated as Doubtful were insignificant for all periods presented.

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

Fair Value of Financial Instruments