FB Financial Fourth Quarter 2025 Earnings Call - Steering back to mid-to-high single-digit organic growth while protecting margin and returning capital

Conference Operator: Good morning, everyone, and welcome to the FB Financial Fourth Quarter 2025 earnings call. Please note today’s event is being recorded. This time, I’d like to turn the conference call over to Mike Orcutt with FB Financial. Please go ahead.

Mike Orcutt, Investor Relations, FB Financial: Good morning and welcome to FB Financial Corporation’s Fourth Quarter 2025 earnings conference call. Hosting the call today from FB Financial are Chris Holmes, President and Chief Executive Officer, and Michael Mettee, Chief Operating and Financial Officer. Please note FB Financial’s earnings release and supplemental financial information, and this morning’s presentations are available on the Investor Relations page of the company’s website at www.firstbankonline.com and on the Securities and Exchange Commission website at www.sec.gov. Today’s call is being recorded and will be available for replay on FB Financial’s website approximately an hour after the conclusion of the call. At this time, all participants have been placed in a listen-only mode. The call will be open for questions after the presentation. During this presentation, FB Financial may make comments which constitute forward-looking statements under the federal securities laws.

Forward-looking statements are based on management’s current expectations and assumptions and are subject to risks, uncertainties, and other factors that may cause actual results and performance or achievements of FB Financial to differ materially from any results expressed or implied by such forward-looking statements. Many of such factors are beyond FB Financial’s ability to control or predict, and listeners are cautioned not to place undue reliance on such forward-looking statements. A more detailed description of these and other risks that may cause actual results to materially differ from expectations is contained in FB Financial’s periodic and current reports filed with the SEC, including FB Financial’s most recent Form 10-K. Except as required by law, FB Financial disclaims any obligation to update or revise any forward-looking statements contained in this presentation, whether as a result of new information, future events, or otherwise.

In addition, these remarks may include certain non-GAAP financial measures as defined by SEC Regulation G. A presentation of the most directly comparable GAAP financial measures and a reconciliation of non-GAAP measures to comparable GAAP measures is available in FB Financial’s earnings release supplemental financial information in this morning’s presentation, which are available on the Investor Relations page of the company’s website at www.firstbankonline.com and on the SEC’s website at www.sec.gov. I would like to now turn the presentation over to Mr. Chris Holmes, FB Financial’s President and CEO.

Chris Holmes, President and Chief Executive Officer, FB Financial: All right. Thank you very much, Mike. And thank you to everyone for joining us on the call this morning and for your interest in FB Financial. For the quarter, we reported EPS of $1.07 and adjusted EPS of $1.16. We’ve grown our tangible book value, excluding the impact of AOCI, at a compounded annual growth rate of 11.6% since we became a public company with our IPO. This quarter, our pre-tax pre-provision net revenue was $71.1 million or $77.1 million on an adjusted basis. Earnings were led by net interest income of $150.6 million, a net interest margin of 3.98%, and low credit cost in the quarter. Adjusted returns were solid, reporting a return on average assets of 1.4% or 1.51% on an adjusted basis, and a return on average tangible common equity of 14.4% or 15.9% on an adjusted basis.

For the year, we reported EPS of $2.45 and an adjusted EPS of $3.99. Our balance sheet grew through the acquisition of Southern States Bank and was complemented by organic growth in our key businesses and geographies. All in, loans held for investment grew 29%, and deposits were up 25% year over year. As I reflect back on 2025 and think forward into 2026, there are two key themes that stand out to me. The first of those is growth, both in our financial assets but also in our capabilities, which comes in the form of talented new teammates. During the past year, we executed on an acquisition in record time. We grew our talent base by adding new associates across the company, and we reorganized leadership responsibilities in various areas to optimize our organization.

We expect to see these actions pay off in 2026 and beyond through enhanced customer experience, contributions to our strong and inviting company culture, and ultimately continuing our history of outstanding growth. The second area is we’re generating earnings and financial returns now that meet my expectations as the CEO of the company and as a shareholder with high expectations. This year, and particularly this quarter, our bottom-line results were where they need to be with adjusted returns of about 1.5% on assets and approximately 16% on tangible common equity, and that’s with a TCE ratio of almost 10%. These profitability results are within the range of expectations we set for ourselves.

Our results for organic growth in loans and deposits were the only real notable area of underperformance in 2025, and that comes from a combination of economic conditions, some distractions from the acquisition, and some related organizational changes. As we look into 2026, we’re very excited about the prospect for strong growth opportunities, both organically and otherwise. We did accomplish a lot during the year, which reinforces the strength and determination of our team and franchise. I’m pleased with our results, proud of the team, and I’m very bullish on the year ahead.

So while I could use some additional time today to give you my perspective on a multitude of other topics like regulatory environment, views on M&A, our myriad of metrics and goals that we’ve set for ourselves in 2026, I’m simply going to reiterate our top priority for the year ahead, which is to cement our focus on the customer. Through this simple action, we’ll deepen relationships, we’ll provide better products and service, and we’ll acquire more new associates and customers. And it’s that focus that’s going to allow us to grow the business. Very simply, that’s going to be our winning formula in 2026. So with that, I’d like to turn the call over to our Chief Financial and Operating Officer, Michael Mettee. Michael.

Michael Mettee, Chief Operating and Financial Officer, FB Financial: Thank you, Chris, and good morning, everyone. I’ll pick up right where Chris left off. Over the past year, we’ve laid a solid foundation that positions us to accelerate into a period of significant opportunity. We’ve acquired and converted Southern States. That added approximately 20% to our size. We’ve seen market disruption in our geographies, which has created opportunity in our markets, and we’ve added talent in key areas of our company. So as we move into 2026, we really couldn’t be more excited about the year ahead. Turning to our results for the quarter and for the full year, net income on a reported basis for the quarter was $57 million or $61.5 million on an adjusted basis. For the year, we delivered net income of $122.6 million and adjusted net income of just over $200 million.

Our net interest margin for the quarter came in at 3.98%, which is three basis points expansion over the third quarter. Even with the Fed rate cuts and lower loan yields, we’re able to manage our liability side of the balance sheet to expand margin, namely through deposit repricing and benefits realized on our third quarter sub-debt and trust preferred payoff. Non-interest income improved in the quarter as we saw stronger swap fees and investment services revenue, along with benefits from non-recurring items, which we’ve detailed in our supplement. On the expense side, fourth quarter non-interest expense came in at $107.6 million or $100.4 million on an adjusted basis. Including in the reported results is roughly $4.6 million in merger and integration expenses, which should largely conclude by the end of the first quarter of 2026.

In our adjusted non-interest expense, we had an additional $3 million in performance-based incentive expense and roughly $1.2 million in higher franchise tax expense. We also had higher-than-expected year-end increases related to the share repurchase transaction, which I’ll detail in a bit, technology costs, and other professional services totaling about $1.5 million that are not run rate expenses. All in, our banking core non-interest expense totaled $88 million for the quarter and $298 million for the full year. Looking at credit, our reported provision expense was lighter this quarter at $1.2 million due to low charge-offs and minimal changes in model reserves. Non-performing assets ticked up slightly this quarter, with higher past dues in some of our consumer portfolios and in our optional Ginnie Mae repurchase portfolio, but loss content remains low as annualized net charge-offs totaled only five basis points in the quarter.

Overall, our credit outlook remains stable for our portfolios and geographies. All in, our allowance for loan losses settled at $186 million or 1.5% of our loans held for investment. Looking at the balance sheet, you’ll see loan growth of $86 million for the quarter and total deposit growth of $97 million, both roughly 3% on an annualized basis. In the fourth quarter, we experienced a pickup in late quarter payoff activity, which reduced our loan growth by about half. This activity was spread across several loan categories but was mostly pronounced in our C&I and CRE buckets. As Chris mentioned earlier, these organic growth levels for the quarter are below what we expect and what we’ve historically delivered. However, when I look at average balances for the quarter, we show annualized 6% loan growth and 7% deposit growth.

And for the year, we’re pleased to have grown the company 29% on loans and approximately 25% on deposits. New production trends remain competitive, both on rate and structure, with new loan yields priced around 6.75% for the quarter and new deposit costs around 3% for the quarter. Even with softer organic growth during the fourth quarter, we believe the wind is at our backs and our sales are up. The company has significant opportunity to grow market share organically as we continue bringing new relationships to the bank. With that, you should expect a return to our normal high single-digit growth rate in 2026. As it pertains to capital, I want to highlight the large stock repurchase transaction that we executed in the quarter. In total, we repurchased just over 1.7 million shares, which represented about 3% of the company.

The transaction was with our largest shareholder, the estate of the late Mr. Jim Ayers, which allowed the estate to diversify its holdings and gain some liquidity while also allowing the company to deploy excess capital in a beneficial way. We were proud to participate in this transaction with other large institutional investors, and this investment in ourselves demonstrates our belief in our franchise and our growing business. As we move into 2026, we expect our net interest margin, exclusive of loan accretion, to land between 3.78% and 3.83% in the first quarter and on a full-year basis, consistent with where we are today. And that assumes a rate cut baked into our forecast for 2026. We would then expect the benefit from loan accretion to add an additional 15 basis points or so, and that’s exclusive of any accelerated accretion that might pull through.

In banking, we’re expecting to see fee income grow in the upper single-digit range as we continue to grow our customer base, add product offerings, and deepen relationships with our current customers. On expenses, I’ll reiterate the full-year guide that we gave last quarter as we expect banking expense to land between $325 and $335 million, which puts our efficiency ratio in the low 50s for the full year and at 50% by year-end 2026. This guide is run rate only and would not include any investments made in revenue producers or market expansion. From a balance sheet standpoint, we’re sticking with the mid to high single-digit loan growth and core customer deposit growth in that same mid to high single digits that we’ve spoken about for full-year 2026.

So as I conclude, I want to thank the team for their work this year, and I’ll look forward to a prosperous 2026. With that, I’ll turn the call back over to Chris.

Chris Holmes, President and Chief Executive Officer, FB Financial: All right. Thanks for the call, Michael. And thanks again to everybody for joining us on the call this morning and your interest in FB Financial. And operator, at this time, we’ll open the line for questions.

Conference Operator: Ladies and gentlemen, at this time, if you would like to ask a question, you may press star and then one using a touch-tone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the numbers to ensure the best sound quality. Once again, that is star and then one to join the question queue. We’ll pause momentarily to assemble the roster. Our first question today comes from Brett Rabatin from Hovde Group. Please go ahead with your question.

Anya Pelshaw, Analyst Representative, Hovde Group: Hi, guys. This is Anya Pelshaw. I’m asking questions on behalf of Brett. So he was wondering if management anticipates any additional share repurchases from the Ayers estate?

Chris Holmes, President and Chief Executive Officer, FB Financial: Yeah, that is a good question. And we do not actually anticipate that. And so the conversation we’ve had, we do not anticipate that. That does not mean just like any of us that folks will change their mind. But all the conversations we’ve had, we do not anticipate that.

Anya Pelshaw, Analyst Representative, Hovde Group: Okay. Thank you, and another question that I have is, do you guys think mortgage banking is on the right path, or does the platform need any additional tweaking?

Michael Mettee, Chief Operating and Financial Officer, FB Financial: Hi, Anya. Good morning. This is Michael. Yeah, actually, mortgage had a really good year, and if you think about where we were two years ago in the mortgage environment versus today, 2026 versus 2025 versus 2023, we originated the same amount of volume, but the contribution went from a negative to a nice positive number, so they’re definitely on the right track. Tweaks to the platform, I would say, just like on the banking side, we’re open for business, looking for revenue producers that can continue to expand our relationships and bring core customers to the bank, so we’re pleased with mortgage, and we expect big things from them.

Chris Holmes, President and Chief Executive Officer, FB Financial: Yeah. And I would just add, in terms of tweaks, let’s say we’re always tweaking, whether that’s mortgage, as Michael said, we’re tweaking things every day. But in terms of the basic structure and the elements of what we have in that business, we’re actually quite pleased with it. And when we look at 2026, that is a potential for it’s a very positive potential for overperformance, I would say. As Michael said, this year, it actually went from a negative to a positive. And depending on what happens in the world and what happens in the market, that’s an area that could be a bright spot for us based on what we have put in our expectations for next year.

Anya Pelshaw, Analyst Representative, Hovde Group: Okay. Thank you. And what does management think about the current M&A climate, and is there any optimism on additional deals?

Chris Holmes, President and Chief Executive Officer, FB Financial: So, climate-wise, I would say, climate-wise, a lot of conversations going on out there. I think at every level, that’s just an industry comment, not specific to us. But I’d say there’s a lot of things happening out there, people evaluating strategically what the future holds for them. When we think about us specifically, we’ll continue to evaluate opportunities. In my prepared remarks, one of the things I talked about are really our customer focus. We have to maintain that, and we have to make sure that that’s at the top of our priority list and for our objectives for the year. But as we get opportunities, which we do, we have conversations and we get opportunities, we’ll continue to evaluate those. And if the right one comes along, certainly, we would be in a position to act on it.

The Southern States combination that we did in 2025 was very positive. We feel like all the way around. They always do cause some distraction from your normal operating environment. And so we weigh that anytime we’re considering a transaction. And so when it’s worth it, then we’re going to be in a place to take advantage of it.

Anya Pelshaw, Analyst Representative, Hovde Group: Sounds good. Thank you. Appreciate the answers.

Chris Holmes, President and Chief Executive Officer, FB Financial: Sure. Thank you. Give Brett our best.

Conference Operator: Our next question comes from Russell Gunther from Stephens. Please go ahead with your question.

Russell Gunther, Analyst, Stephens: Hey. Good morning, guys. I am on the loan growth front.

Chris Holmes, President and Chief Executive Officer, FB Financial: Hey, Russell.

Russell Gunther, Analyst, Stephens: Good morning, Chris. Morning, Michael. On the loan growth front, so you called out the elevated paydowns and how they impacted this quarter. It would be helpful just to quick level set where those levels compared to last quarter. And then as a follow-up, you guys tend to position yourselves as a high single-digit to low double-digit grower. It sounds like you’re guiding to high single digits for this year. So maybe if you could just kind of walk us through the asset class and geographic loan leaders and just whether or not that assumes that level of growth can happen with the players on the field today versus incremental hires.

Chris Holmes, President and Chief Executive Officer, FB Financial: Michael, you want to go first?

Michael Mettee, Chief Operating and Financial Officer, FB Financial: Yeah. So I would say, Russell, in the fourth quarter, payoffs were a bit elevated, and especially at the latter part of the quarter. Chris would have let us all go home on December 24th. We probably would be having a different point-to-point conversation. But you work full year. So that last week of the year is where we saw a lot of the payoffs come. Every company has ebbs and flows, right? Every company faces payoffs. So that’s just part of business. That’s just something you have to do. But on a percentage basis, it was elevated in the fourth quarter. That being said, we’re going to have payoffs in the first quarter of this year and second quarter of this year. And so we expect to grow through it as a company. Our growth forecast is not predicated on hiring new people.

It’s the team we have in place with the relationship managers and bankers that we have. We would expect those to grow that high single-digit range without adding another person. And where can it come from? We came into Asheville, North Carolina, last year. They’re off to a good start. Tuscaloosa, Alabama, smaller market, but had a really strong year. But every market, especially in our metro areas, have a lot of in-migration and growth opportunities. And then in our more community markets, we expect to continue to grow market share, both sides of the balance sheet. And we’re focused on growing deposits and loans, not just the loan side. And then asset class, we pride ourselves on being a community bank. And so that means we serve all asset classes.

And so we’re not saying, "Hey, you can only grow one or the other." But we want to be full-service to our clients. And so I’d expect that to be broad-based.

Chris Holmes, President and Chief Executive Officer, FB Financial: Yeah. So, Russell, if I could just make a couple of comments, and I want to reiterate two or three things Michael said or amplify them. He is right. If we were to stop the world in motion there and not have the last week of the quarter, we’d have been north of 5% in terms of loan growth, actually 6-ish. And if you compare average to average, you would see that in our numbers. So point-to-point is one thing, but we don’t get obsessive over that because we feel pretty good about the run rate where it is. You ask about can it happen with current players. I think that’s an important part of kind of how we project ourselves for the future and how we budget. We budget current players, and we budget very normal activity. We don’t budget things like we certainly don’t budget acquisitions.

We do not budget bringing over big teams, and so it’s current player activity. Michael also made a statement in his prepared remarks. Our expense side is the same. Our expense side is also current players with a very, I’ll say, normal measured growth rate versus having the big moves in there on either the revenue or expense side. I think that’s important. Then on geographies, there’s one other thing I would say is Nashville approaches half of our loans and deposit base. That becomes an important part of that picture for 2026 and beyond. That becomes probably the biggest part of that. As you know, we’ve had some changes there, and we continue to be actually really bullish headed into 2026 on that part of our geography.

Russell Gunther, Analyst, Stephens: That’s really helpful. Thank you both. And then my last question would be on the expense front. So it would be helpful to get a sense for how the fourth quarter run rate shapes up. Michael, I think you called out $1.5 million of non-run rate expenses, but please correct me if I misheard that. And then as a follow-up, last quarter, you mentioned a willingness to kind of toss that expense guide out the window if you think you can hire commercial lenders the way you’d like. So I was just curious if any of that materialized in this fourth-quarter result, and have any changes been made to the comp structure in order to be able to kind of help attract the type of talent you’d like to get or that might shake loose?

Michael Mettee, Chief Operating and Financial Officer, FB Financial: Yeah. Thanks, Russell. Just to clarify on the expense piece, there was $3 million that was performance-based related to long-term incentive, which is equity, which is really a peer comp analysis. So that resulted in Chris mentioned our returns. It’s a return-based compensation model. And so as we saw our returns continue to perform at a higher level, that’s what drove that. So that’s not necessarily recurring because we should be in line with where we expect our performance shares to pay out on a go-forward. And then franchise tax, which was another thing I called out, $1.2 million, that shouldn’t be recurring as well. And then the other piece, we did the share repurchase transaction and had some professional services fees in there, which I said was non-run rate.

So if I looked at $88 million on the banking side outside of merger and integration costs, and I’d say $5 million or $6 million of that was not what I would call run rate, but it was expense. It hit in the fourth quarter. And that’s really why we reiterated our guide for 2026 that we gave last quarter is we don’t see those as continuous. Although I would love to have as we outperform on a return basis, if our performance shares go up, then that’s actually a good problem for everybody, I think. So the other piece you mentioned, throwing out the expense guide out the window. I like how you put that. I don’t know that that’s how I said it. But I think about it in two buckets.

Really, we have our normal course of business, as Chris mentioned, or you said players in seat, and that goes for the entire company. We’ve got to maintain discipline and create operating leverage, and so we’ll continue to do that. We do recognize that as opportunities come, there’s an expense outlay that occurs, and so, yeah, we’re certainly willing to do that for the right people, the right teams. We don’t hire just to hire. We also recognize that it’s a very fluid environment, and all of our people get recruited as well, and so we play offense and defense. I’m a college football guy, so it’s a little bit like the transfer portal. You got to make sure you got your team recruiting all the time, internal and external, and so we actively do that.

And then adds, yeah, we added a couple of key people during the quarter, and we’re really excited about those. And we expect that to continue to pay out for the long term. But really, all that’s just heating up. And it’s a full-time responsibility to make sure that we’re recruiting the right people for FB Financial.

Chris Holmes, President and Chief Executive Officer, FB Financial: Yeah. I think excellently put all the way around, Michael. I want to add two things. There’s a lot of disruption in a lot of places, not just our markets, all around the country. I think that creates even if you look at comments made on earnings calls so far this cycle. You’ve seen banks get pretty bold and say, "Hey, I’m coming after you," to some of the regional banks. You’ve seen others talk about their hiring goals and that kind of thing. I would, and so you have to realize we have a lot of people coming into our markets in Middle Tennessee, East Tennessee, Georgia, Alabama. What that does is they’re just recruiting anybody and everybody. Your people are getting calls, and our people are getting calls. We say this internally, and I’ll certainly say it on this call.

We don’t want any of our people underpaid. And so we want to make sure that they’re all fairly compensated. And if they’re not, we want to correct that. And so as Michael said, that’s part of us, just make sure we’re taking care of our folks. And then when it comes to those A players that may be available out in the market, we will not miss the opportunity because of comp. Okay? We can compete with anybody from the largest bank on the planet to the smallest community bank that we can compete with. And so we feel very strong about our position there. And if that’s the case and you take that off the table, it really comes down to culture, where the company’s headed, and how they feel that they can take care of their customers and compete.

That’s where we think over the long term, we’re going to win. That’s how we do it.

Russell Gunther, Analyst, Stephens: That’s great, guys. Thank you for all the help and for taking my question.

Chris Holmes, President and Chief Executive Officer, FB Financial: Sure.

Conference Operator: Our next question comes from Will Jones from KBW. Please go ahead with your question.

Will Jones, Analyst, KBW: Yeah. Hey, great. Good morning, guys. Continuing for Catherine here. Maybe I just wanted to stick along the same lines. I feel like a lot has been made about some of the M&A disruption that is out there and what that could mean for the talent acquisition front as well as the client acquisition front. But I wanted to ask you guys, we’re talking about how big this opportunity is, but you guys are seeing it and living it every day on the ground. Is that opportunity, is it out there right now? Is it there? Are you actively seeing this big opportunity we’re talking about in hiring in terms of just your boots on the ground there?

Chris Holmes, President and Chief Executive Officer, FB Financial: Yeah. Good morning, Will. This is Chris. I think these things, and I don’t want to point to anything specific, so I’ll look in the mirror. Okay. Remember, we did a transaction in 2025. And again, it just creates a lot of disruption for your own company, but also for others, and it creates a lot of activity, and I think all that depends on a lot of things: how quickly the transaction closes, what the communication is during all that period, when conversion actually takes place. Conversions become a big deal, but actually, the most important part of a transaction is integration. And sometimes folks confuse conversion and integration, but integration starts from the second actually, it starts before you make the announcement because teams are working together, and you see how that goes.

You then make an announcement, and you then go through all this period of, frankly, changes to how people do business. And again, all of us approach that a little differently, I would tell you. Some folks, especially if they’re the lead acquirer, they say, "Let me tell you how you do business now." And some folks don’t like that, and they’ll go somewhere else. Our approach tends to be a best approach. We evaluate how both companies do business, and we end up adopting some of both. And we also end up adopting, we take the approach of what we call a best athlete approach, and we take folks from both companies depending on what works best for the whole.

And so again, I’m telling you all that to tell you it is not, it’s so much more art than science that all of that’s going on in a lot of places right now. And so it evolves over time. Sometimes there’s an immediate exodus of people because they just go, "This is not going to work," okay, or, "It’s not going to work for me." Other times, there’s never an exodus of people. And I’d say most commonly, there’s a slow drift. And so all of those are going on with multiple transactions, and we’re out there playing in that sandbox.

But again, our approach is, "Hey, make sure we have the right culture, make sure that people know our long-term plan, and that this is a great place to be, and make sure that they can take care of their clients." That is the most, I’d say, important thing. And so again, I wish I could give you something a little more formulaic that could work its way into an EPS model. But all of that’s going on. And depending on who you’re talking about, I would say there’s a couple of big transactions going on in our market. And I think that the two different bigger transactions are taking different approaches.

Michael Mettee, Chief Operating and Financial Officer, FB Financial: Yeah. Will, just Michael, to your point on disruption, and Chris mentioned some other calls. One of the markets that’s been called out, and some of it is Huntsville, Alabama. If you look at Huntsville bankers, there hasn’t been necessarily M&A that’s driven, but banker disruption has been on fire for six months. We looked up in the fourth quarter, and we are really excited about the team we have in Huntsville right now. So but there’s probably amongst banks. I mean, I don’t write this in stone, but there’s 50 or 60 bankers that moved between banks in the past six months. We look at our team, and we see the opportunity there. We’re super excited about them, relatively new, but very experienced market bankers. Not even M&A related, it’s just opportunity related. It’s happening in and all around us.

We think we’re poised to or well-positioned to be successful with that.

Will Jones, Analyst, KBW: That’s great. Thank you both. That’s all very helpful content. I think we’re all just trying to contextualize what we’re talking euphorically about, this hiring opportunity that exists, and just wanted to see if maybe there’s an immediacy to it or from your lens that it might take a little time to get there. So I appreciate that context, and Michael, maybe for you.

Michael Mettee, Chief Operating and Financial Officer, FB Financial: Hey, Will, just sorry not to interrupt you, but I think the answer to that is both. There is immediacy, but we’re not just thinking about the next two weeks, right? This is a three, five, seven-year kind of opportunity with all this going on, and so these things take a little bit of time, so the answer is both. That’s probably not what you’re looking for, but.

Chris Holmes, President and Chief Executive Officer, FB Financial: Michael, I was going to say exactly the same thing. The answer is both. And I would say this is what folks tends to be what helps FBK is folks view us as having a very long runway. And they view us as being able to have a really bright path forward. And so that’s helping us. And we play the long game there. So we’re much more interested in, "Hey, we’re going to be here. We’re going to play the long game." And we think that’s going to be a winning formula. So it is both.

Will Jones, Analyst, KBW: Yeah. Okay. That’s very helpful. I appreciate you guys contextualizing that for us. Michael, maybe one for you on the margin. It’s great to see the higher in this quarter. You guys seem to consistently outperform where you guys expect the margin to be. And then we have a little bit of higher guide. And it’s really just been a large function of you guys being good managers of deposit costs. But as we enter kind of a 2026 period where we expect growth to pick up even from where we are today, what do you think just incremental deposit betas will look like? And what kind of leverage do you feel like you still have to manage deposit costs over the course of next year?

Michael Mettee, Chief Operating and Financial Officer, FB Financial: Yeah. Well, that’s a really good question. Yeah. We feel good about the margin guide and the growth opportunity. I will say that mid- to high single-digit growth at a 380 kind of core margin. However, as you mentioned, as people come in, entrants, sometimes when you hire people, or not sometimes, a lot of times, to bring over relationships, you got to start with bringing over a customer, and it’s probably paying above market for deposit costs, and then you earn their business over time, and we fully expect that our bankers can do that, and we’ll do it, and of course, I’m sure our competitors do as well, so more people coming into our markets, paying higher costs. I personally get flyers from a lot of large banks twice a week or mail offering things that are pretty exorbitant, so we do realize it’s out there.

It really comes down to the customer experience and relationship long term and earning that business. And that’s what we’re focused on. So you could see both on the loan and deposit side, some margin compression if things get really, really kind of dicey or competitive out there. But I think so far, everybody’s pretty focused on everybody, meaning competitive-wise as well, kind of lowering costs as rates go down. I will say this too, though, Will, because this is counterintuitive to maybe a lot of other institutions. We want to be a fair value proposition to our customers. We want to earn, Chris mentioned, the long game. We’re thinking years and decades. And so we’re not trying to get everybody to zero-cost deposit. We want to be fair. We want them to have their money here. We want it to be the entire family, their business, everybody.

And so we expect that on both sides of the balance sheet, we’re going to have fair loan yield. We won’t be the lowest loan pricing either, but we want to take care of our customers. And so our deposit costs do run a little bit higher than some others, and our loan yields run a little bit higher. And so we think that’s the fair thing for the customer and for the company and for the shareholders. So that’s kind of a different approach, probably.

Will Jones, Analyst, KBW: Yeah. Just maybe expectations on what incremental deposit betas will look like in this kind of competitive market you’re describing?

Michael Mettee, Chief Operating and Financial Officer, FB Financial: Yeah. I mean, I think if you’re still looking at that 55%-60% range, which is where it’s been, I think on interest bearing. But we’ll see how treasuries are up, right? A lot of external noise to the banking system that could put pressure on money moving back into some of those U.S. Treasuries or money market funds, which could impact that. But we’ve been pretty consistently able to move down deposit costs with rate cuts. That being said, we only think there’s going to be one or so where we sit today.

Will Jones, Analyst, KBW: Yeah. Okay. Good stuff. Maybe just lastly for me, Chris, we talked a little bit about just the appetite for what incremental M&A would look like. And you mentioned for the right opportunity, you guys would keep your eyes and ears open. Could you just frame what that opportunity would look like, maybe as you think about the right size, the right geography, just what you would look for in an M&A transaction today?

Chris Holmes, President and Chief Executive Officer, FB Financial: Yeah. So geographically, we’re going to be looking around the southeast and the Carolinas, even into Virginia, which is a contiguous state for us from where we are today and not far at all geographically. So Carolinas, Virginia, Georgia, Alabama, some things that could even get down into the northern part of Florida would all be the types of places we would be looking. We would prefer, okay, not necessarily it has to be contiguous to some of our existing geography. And here’s an example of what I mean by that. I mentioned Virginia. Hampton Roads, Virginia, is actually quite a long way from us. And so that would be less interesting for us than, let’s say, western Virginia and places like, I don’t know, I’m hesitant to throw out names of towns.

Sometimes I get calls going, "Are you talking about us on your earnings call?" So I don’t want to, so I’m a little hesitant to get too specific. But you can understand what I mean by jumping over big parts of geography is generally not what we’re looking for. We’d like for it to be a little closer to our existing, but in all of those locations. So I would think of more kind of western Virginia. And Carolinas certainly of interest, the Georgia, Alabama, all of our existing southeastern, let’s say, geography. And then we like banks that we generally aren’t looking for things that we have to fix in a significant way. We like companies that perform well in asset-wise or size of the institution.

We love things that are, call it, anywhere from a couple of billion in assets all the way up to six or seven, even billion in assets. So we love that. That’s a description of what we target. There are some cases where we may go smaller than that on the asset side. If it’s a market that we’re particularly interested in and we like what they do in that market, so there are cases where we go smaller than that asset-wise.

Will Jones, Analyst, KBW: Yeah. Okay. That’s great color, Chris. I appreciate it, guys. Thanks for the questions, and then congrats on a great year.

Chris Holmes, President and Chief Executive Officer, FB Financial: Thanks, Will. Thank you so much, Will.

Conference Operator: Once again, if you would like to ask a question, please press star and then one. To withdraw your questions, you may press star and two. Our next question comes from Steve Moss from Raymond James. Please go ahead with your question.

Hey, guys. This is Thomas on for Steve. Could you just talk maybe about the loan pipeline and client sentiment broadly? How is client confidence these days, and what is their appetite for investment?

Michael Mettee, Chief Operating and Financial Officer, FB Financial: Yeah, Tom, good morning. It’s Michael. Yeah. Actually, pipeline is pretty strong. I think we’ve been saying that. We’ve been seeing strong pipelines. Some deals have pushed into 2026 from 2025. And so I’d reiterate that they’ve been strong. Yeah. Clients, I think a lot of the noise that happened maybe early last year that limited some of that early growth is past. All the noise is still out there. I think that they’re just operating in a way that, hey, it’s kind of new norm, and we’re excited about the future and investments occurring. We’re seeing a lot of existing clients start new projects or deals. And a lot of times, they’re able to take their older stuff to the permanent market if it’s multifamily or real estate-based and seeing our activities picking up. So really, actually pretty positive operating environment business-wise.

Okay. Great. Appreciate that, Coller. And just one more for me. Last quarter, I know you guys indicated that loan growth would largely be governed by core deposit growth. And it looks like maybe core deposit growth was a little challenged in the fourth quarter. I saw you took on some broker. Can you maybe talk about your core deposit growth outlook for 2026 and maybe the strategy that’s going to get you there?

Yeah. Core deposit growth, always a focus for us. We’ve got a lot of funding capabilities that we would exercise in kind of the shorter term if need be. I’d say, actually, when I think about core, it goes back to a comment I made a little bit earlier, that sometimes you bring over customers, and the intent is to turn them into relationships, which is another word for core. And a lot of times, if that doesn’t materialize over some period of time and they’re higher cost, we’ll just go ahead and say, "Hey, maybe we’re not the place for you." And so that’s where you can see deposit movement in and out of the balance sheet. And that’s a continuous process. Brokers, small number for us, 4% or so of balances. We do make sure that we have funding in place if need be.

And I think from a perspective of how we’re going to do it in 2026, I do think it gets back to what Chris said in his comments: the focus on the customer experience, making sure we have the right treasury management platform and products as we go, what I’ll call more upstream a little bit, opportunities, that kind of middle market commercial client. A lot of opportunity there. But even half our business is consumer as well. And so our retail network, we’ve got to reignite the focus on our client there. And we’re in the process of that and just really adding and activating relationships. So it’s broad-based. You can’t point to just a single thing because we’re in a lot of these different businesses. And so a lot of opportunity in our geographies.

Okay. Got it. Thanks for taking my questions and congrats on a good year.

Thanks, Tom. I appreciate it, Tom. Thanks.

Conference Operator: At this time, we’ll be ending today’s question and answer session. I’d like to turn the floor back over to Chris Holmes for any closing remarks.

Chris Holmes, President and Chief Executive Officer, FB Financial: All right. Thank you so much again. We appreciate everybody joining us on the call, and we are glad to have had a good year. We’re looking forward to 2026, and so thank you all, and reach out directly if we need to give you more information.

Conference Operator: And ladies and gentlemen, with that, we’ll conclude today’s conference call and presentation. We thank you for joining. You may now disconnect your lines.