FB Financial Corporation (NYSE: FBK) delivered stronger second-quarter earnings as loan growth, stable funding costs and improved efficiency lifted core profitability. The results also revealed a more complex credit picture: charge-offs remained low, but nonperforming loans and provisioning increased. For markets, the quarter showed the bank’s capacity to expand organically while preserving margin discipline, alongside the risks created by rapid balance-sheet growth.

Key Highlights

  • Adjusted diluted earnings per share increased to $1.14 from $1.12 in the previous quarter and $0.88 a year earlier.
  • Loans held for investment rose 11.6 per cent on an annualised sequential basis to $12.87bn.
  • Net interest margin edged up to 3.95 per cent, supported by a better deposit mix.
  • The adjusted efficiency ratio improved to 52.0 per cent from 54.3 per cent in the first quarter.
  • Nonperforming loans increased to 1.17 per cent, although net charge-offs remained low at 0.06 per cent.

FB Financial Q2 2026 Earnings Reflect Stronger Core Profitability

FB Financial Corporation (NYSE: FBK) reported second-quarter net income of $58.6mn, equivalent to diluted earnings per share of $1.13. Adjusted net income reached $58.9mn, or $1.14 per diluted share, compared with $58.3mn and $1.12 in the first quarter.

Adjusted pre-tax pre-provision net revenue increased 6.9 per cent sequentially to $83.6mn and 42.6 per cent from a year earlier. The improvement reflected higher net interest income, lower adjusted operating expenses and a cleaner year-on-year comparison after a large securities loss in the prior period.

Total revenue rose to $174.8mn from $172.3mn. Net interest income increased to $149.0mn, while adjusted non-interest income was broadly stable at $26.2mn, leaving earnings heavily dependent on spread income.

Loan and Deposit Growth Expand the Balance Sheet

Loans held for investment ended the quarter at $12.87bn, up from $12.50bn in March. Commercial real estate contributed $195.1mn of net growth, residential real estate added $146.5mn, and commercial and industrial balances increased by $20.6mn. Construction loans declined by $19.1mn.

Loans grew 11.6 per cent on an annualised sequential basis and 30.3 per cent year on year.

Deposits increased to $14.35bn from $14.08bn, representing annualised growth of 7.7 per cent. Non-interest-bearing deposits rose 16.7 per cent on an annualised basis to $2.78bn, helping reduce the total cost of deposits to 2.26 per cent from 2.27 per cent.

Loan growth outpaced deposit growth. Brokered deposits increased to $685.9mn, while borrowings rose to $314.5mn. Both remain modest relative to total funding, but their expansion increases exposure to more rate-sensitive liquidity sources.

Net Interest Margin Holds Despite Funding Competition

Net interest margin increased by one basis point sequentially to 3.95 per cent and by 27 basis points from a year earlier. Loan yields remained stable at 6.22 per cent, while deposit mix provided modest funding relief.

Purchase-accounting accretion contributed 13 basis points to the reported margin. The underlying margin was therefore lower than the headline figure, an important consideration when assessing the durability of spread income.

The bank nevertheless absorbed competitive deposit pricing without meaningful margin compression, while balance-sheet growth lifted net interest income. Future performance will depend on new-loan pricing, deposit retention and the pace at which purchase-accounting benefits decline.

Operating Efficiency Improves

Adjusted non-interest expense fell to $91.5mn from $93.7mn in the first quarter, although it remained above the $78.5mn recorded a year earlier. The adjusted efficiency ratio improved to 52.0 per cent from 54.3 per cent sequentially and 56.9 per cent a year earlier.

Revenue growth exceeded expense growth, converting balance-sheet expansion into higher pre-provision profit. Return on average assets was 1.44 per cent, while adjusted return on average tangible common equity reached 15.0 per cent.

Mortgage banking income declined to $11.2mn from $12.3mn in the previous quarter and $13.0mn a year earlier. The decline left revenue more dependent on net interest income and therefore more exposed to rate and funding conditions.

Credit Quality Emerges as the Main Risk

Net charge-offs were $2.0mn, equal to 0.06 per cent of average loans on an annualised basis, below 0.11 per cent in the first quarter. However, other credit indicators weakened.

Provision expense increased to $10.1mn from $3.0mn. Nonperforming loans rose to 1.17 per cent from 0.96 per cent, while nonperforming assets increased to 1.14 per cent of total assets from 0.98 per cent.

The deterioration was concentrated in three lending relationships, including two requiring individually evaluated reserves. The allowance for credit losses increased to $194.0mn, or 1.51 per cent of loans, from 1.49 per cent in March.

The reserve build partly reflected loan growth, but rising nonperforming exposures make underwriting discipline and portfolio concentration increasingly important.

Share Repurchases Support Per-Share Metrics

FB Financial Corporation (NYSE: FBK) repurchased 1.55mn shares during the quarter, equivalent to 3.01 per cent of shares outstanding. Book value per share increased 10.2 per cent year on year to $38.75, while tangible book value per share rose 4.7 per cent to $31.19.

Capital remained above regulatory minimums, with a preliminary common equity tier 1 ratio of 11.0 per cent and a total risk-based capital ratio of 12.9 per cent. Tangible common equity to tangible assets declined to 9.49 per cent from 9.91 per cent in March, reflecting balance-sheet growth and capital returns.

The quarter combined stronger earnings and efficiency with rising nonperforming assets and greater wholesale funding use.