EX-99.3 4 a51886960ex99_3.htm EXHIBIT 99.3
Exhibit 99.3
Third Quarter 2018 Earnings Presentation October 23, 2018

Certain statements contained in this presentation are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, without limitation, statements relating to the Company’s business, cash flows, condition (financial or otherwise), credit quality, financial performance, liquidity, short and long-term performance goals, prospects, results of operations, strategic initiatives and the timing, benefits, costs and synergies of recently completed and future acquisition, disposition and other growth opportunities. These statements, which are based upon certain assumptions and estimates and describe the Company’s future plans, results, strategies and expectations, can generally be identified by the use of the words and phrases “may,” “will,” “should,” “could,” “would,” “goal,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target,” “aim,” “predict,” “continue,” “seek,” “projection” and other variations of such words and phrases and similar expressions. These forward-looking statements are not historical facts, and are based upon current expectations, estimates and projections about the Company’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company’s control. The inclusion of these forward-looking statements should not be regarded as a representation by the Company or any other person that such expectations, estimates and projections will be achieved. Accordingly, the Company cautions investors that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict and that are beyond the Company’s control. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this presentation, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this presentation including, without limitation, the risks and other factors set forth in the Company’s most recent Annual Report on Form 10-K under the captions “Cautionary note regarding forward-looking statements” and “Risk factors” and periodic and current reports on Forms 10-Q and 8-K. Many of these factors are beyond the Company’s ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, investors should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this presentation, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. Forward looking statements

Use of non-GAAP financial measures This presentation contains certain financial measures that are not measures recognized under U.S. generally accepted accounting principles (“GAAP”) and therefore are considered non-GAAP financial measures. These non‐GAAP financial measures include, without limitation, adjusted net income, adjusted diluted earnings per share, core net income, core diluted earnings per share, adjusted pro forma net income, adjusted pro forma diluted earnings per share, pro forma core net income, pro forma core diluted earnings per share, core noninterest expense, core noninterest income, core efficiency ratio (tax-equivalent basis), banking segment core efficiency ratio (tax-equivalent basis), mortgage segment core efficiency ratio (tax-efficiency basis), adjusted mortgage contribution, adjusted return on average assets and equity, core return on average assets and equity and core total revenue. Each of these non-GAAP metrics excludes certain income and expense items that the Company’s management considers to be non‐core/adjusted in nature. The Company refers to these non‐GAAP measures as adjusted or core measures. The corresponding Earnings Release also presents tangible assets, tangible common equity, tangible book value per common share, tangible common equity to tangible assets, return on tangible common equity, return on average tangible common equity, adjusted return on average assets, adjusted return on average equity, core return on average tangible common equity, adjusted return on average tangible common equity, pro forma return on average assets and equity, pro forma adjusted return on average assets and equity and pro forma core return on average assets and equity. Each of these non-GAAP metrics excludes the impact of goodwill and other intangibles.The Company’s management uses these non-GAAP financial measures in their analysis of the Company’s performance, financial condition and the efficiency of its operations as management believes such measures facilitate period-to-period comparisons and provide meaningful indications of its operating performance as they eliminate both gains and charges that management views as non-recurring or not indicative of operating performance. Management believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods as well as demonstrating the effects of significant non-core gains and charges in the current and prior periods. The Company’s management also believes that investors find these non-GAAP financial measures useful as they assist investors in understanding the Company’s underlying operating performance and in the analysis of ongoing operating trends. In addition, because intangible assets such as goodwill and other intangibles, and the other items excluded each vary extensively from company to company, the Company believes that the presentation of this information allows investors to more easily compare the Company’s results to the results of other companies. However, the non-GAAP financial measures discussed herein should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which the Company calculates the non-GAAP financial measures discussed herein may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar or with names similar to the non-GAAP financial measures the Company has discussed herein when comparing such non-GAAP financial measures. The following tables provide a reconciliation of these measures to the most directly comparable GAAP financial measures.

Three months endedSeptember 30, 2018 Non-GAAP adjusted results1 Reported GAAP results Diluted earnings per share $0.68 $0.68 Net income ($million) $21.4 $21.4 Net interest margin 4.71% 4.71% Return on average assets 1.72% 1.72% Return on average equity 13.3% 13.3% Return on average tangible common equity 17.4% 17.4% Efficiency ratio 63.7% 65.7% 3Q 2018 highlights Key highlights Financial results 1 Adjusted results are non-GAAP financial measures that adjust GAAP reported net income and other metrics for certain income and expense items as outlined in the non-GAAP reconciliation calculations, using a combined marginal income tax rate of 26.06% excluding one-time items. See “Use of non-GAAP financial measures” and the Appendix hereto for a discussion and reconciliation of non-GAAP financial measures.2 Includes accretion from acquired / purchased loans and collection of interest income on nonaccrual loans, which contributed 25 basis points to net interest margin. Diluted EPS of $0.68, resulting in ROAA of 1.72%Loans (HFI) grew to $3.5 billion, a 13.6% increase from 3Q 2017; grew 14.3% annualized from 2Q 2018Customer deposits grew to $4.0 billion, a 11.2% increase from 3Q 2017; grew 17.9% annualized from 2Q 2018Continued customer-focused balance sheet growth resulting in a net interest margin of 4.71% for 3Q 2018, compared to 4.81% for 2Q 2018 and 4.61% for 3Q 2017Mortgage banking income of $26.6 million, a 15.0% decrease from 3Q 2017, driven by lower interest rate lock commitment (IRLC) volumes and lower gain on sale marginsContinuing enhancing positive operating leverage; Banking Segment core efficiency ratio was 52.4%1 in 3Q 2018, down 376 basis points from 3Q 2017Continued to position the balance sheet for the current rate environment; grew customer time deposits by $276.3 million and substituted cheaper brokered deposits of $53.9 million for short-term borrowings 2

Consistently delivering balanced profitability and growth Drivers of profitability Pro forma return on average assets, adjusted1 Net interest margin Noninterest income ($mn) Loans / deposits 1 Our pro forma net income includes a pro forma provision for federal income taxes using a combined effective income tax rate of 35.63%, 35.08% and 36.75% for the years ended December 31, 2014, 2015 and 2016, respectively, and also includes the exclusion of a one-time tax charge from C Corp conversion in 3Q 2016 and the 4Q 2017 benefit from the 2017 Tax Cuts and Jobs Act. The years ended December 31 2014, 2015, 2016 and 2017 are annual percentages. See "Use of non-GAAP financial measures" and the Appendix hereto for a discussion and reconciliation of non-GAAP measures. +79 bps NPLs (HFI) / loans (HFI) (%)

Peer-leading net interest margin remains strong Historical yield and costs 1 Includes tax-equivalent adjustment Loan (HFI) yield 3Q17 2Q18 3Q18 Contractual interest rate on loans HFI1 5.08% 5.37% 5.47% Origination and other loan fee income 0.38% 0.46% 0.40% 5.46% 5.83% 5.87% Nonaccrual interest collections 0.16% 0.03% 0.07% Accretion on purchased loans 0.23% 0.23% 0.25% Syndication fee income 0.05% 0.03% 0.00% Total loan yield (HFI) 5.90% 6.12% 6.19% NIM (%) 4.61% 4.63% 4.64% 4.81% 4.71% Impact of accretion and nonaccrual interest collections (bps) 28 29 20 20 25 Deposit cost (%) 0.46% 0.50% 0.55% 0.62% 0.80%

Consistent loan growth and balanced portfolio Total loan growth1 ($million) and commercial real estate concentration Loan portfolio breakdown1 4Q12 3Q18 Total HFI loans: $3,539 million 1 Exclude HFS loans, C&I includes owner-occupied CRE.2 Risk-based capital at FirstBank as defined in Call Report. 3Q 2018 calculation is preliminary and subject to change.3 Excludes owner-occupied CRE. Commercial real estate (CRE) concentrations2 % of Risk-Based Capital 2Q18 3Q18(preliminary) C&D loans subject to 100% risk-based capital threshold3 105% 91% Total CRE loans subject to 300% risk-based capital threshold3 239% 223%

Stable, low cost core deposit franchise Total deposits ($million) 1 Includes mortgage servicing-related escrow deposits of $56.8 million, $53.7 million, $74.1 million, $88.4 million and $78.0 million for the quarters ended September 30, 2017, December 31, 2017, March 31, 2018, June 30, 2018 and September 30, 2018 respectively. Noninterest bearing deposits ($million)1 Growth: 4.1% y/y Deposit composition Cost of deposits Customer growth: 11.2% y/y

Total Mortgage decreased by 13 percentage points $29.6 $27.0 $26.0 ($0.8) ($2.3) ($2.3) $3.4 $5.6 $5.6 ($0.9) ($1.8) ($2.7) $31.3 $28.5 $26.6 Mortgage operations overview Total mortgage pre-tax contribution (including retail footprint) of $1.5 million for 3Q18, in-line with prior guidance, and $6.8 million YTDMortgage banking income $26.6 million, down 15.0% from 3Q 2017 and 6.6% from 2Q 2018Actively reducing operational expenses and repositioning origination channels for projected future volumesVolumes and profitability will adjust similarly to industry volumes3 Highlights Gain on Sale Total pre-tax contribution, adjusted2 (%) Mortgage production Consumer Direct Correspondent Third party originated Retail Retail footprint Total Mortgage (including retail footprint) Banking (excluding retail footprint) 3Q17 2Q18 3Q18 Fair value changes Fair value MSR change Mortgage banking income ($mm) Servicing Revenue Total Income Confirm 2017 numbers $2,001mm $1,976mm IRLC volume: $1,705mm IRLC pipeline1: $541mm $598mm $453mm Refinance %: 45% 29% 31% Purchase %: 55% 71% 69% 1 As of the respective period end.2 See “Use of non-GAAP financial measures” and the Appendix hereto for a discussion and reconciliation of non-GAAP measures.3 See Forward Looking Statements on Slide 1.

Improving operating leverage Consolidated 3Q 2018 core efficiency ratio of 63.7% driven by Banking Segment core efficiency ratio of 52.4%, which has decreased by 376 basis points since 3Q 2017 3Q 2018 illustrates solidified operating leverage achieved through organic growth, merger and ongoing cost efficiencies; expect the Banking Segment operating leverage to continue to incrementally improveContinued investment in revenue producers, IT systems and back office skills to improve on scalable platformExpect structural and operational changes in Mortgage Segment to improve efficiency ratio in the intermediate term Core efficiency ratio (tax-equivalent basis)1 Improving operating efficiency 1 See “Use of non-GAAP financial measures” and the Appendix hereto for a discussion and reconciliation of non-GAAP measures.

Asset quality remains stable Classified & PCI loans ($million) Net recoveries (charge-offs) / average loans Nonperforming ratios LLR / loans 1 Includes acquired excess land and facilities for all periods subsequent to the acquisition of the Clayton Banks and GNMA rebooked loans for the third and fourth quarters of 2017 – see page 8 of the Quarterly Financial Supplement. 1

Strong capital position for future growth 1 Total regulatory capital, FB Financial Corporation. 3Q 2018 calculation is preliminary and subject to change.2 See “Use of non-GAAP financial measures” and the Appendix hereto for a discussion and reconciliation of non-GAAP measures. Capital position Simple capital structure 3Q17 2Q18 3Q181 Shareholder’s equity / Assets 12.5% 12.8% 12.8% TCE / TA2 9.5% 10.1% 10.2% Common equity tier 1 / Risk-weighted assets 10.8% 10.6% 11.5% Tier 1 capital / Risk-weighted assets 11.6% 11.3% 12.2% Total capital / Risk-weighted assets 12.2% 11.9% 12.8% Tier 1 capital / Average assets 11.4% 10.9% 11.3% Tangible book value per share Growth: 40.6% since IPO (September 2016)

Appendix

GAAP reconciliation and use of non-GAAP financial measures Net income, adjusted

GAAP reconciliation and use of non-GAAP financial measures Pro forma net income, adjusted

GAAP reconciliation and use of non-GAAP financial measures Tax-equivalent efficiency ratio

GAAP reconciliation and use of non-GAAP financial measures Segment tax-equivalent efficiency ratio 2018 2017 Banking segment core efficiency ratio (tax equivalent) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Core consolidated noninterest expense $ 57,213 $ 55,687 $ 54,958 $ 55,471 $ 53,513 Less Mortgage segment noninterest expense 18,821 19,582 18,910 20,117 19,757 Add loss on sale of mortgage servicing rights - - - - - Adjusted Banking segment noninterest expense 38,392 36,105 36,048 35,354 33,756 Adjusted core revenue 89,798 89,624 83,952 87,284 83,054 Less Mortgage segment noninterest income 19,232 21,650 20,363 23,825 23,836 Less change in fair value on mortgage servicing rights (2,701) (1,778) (1,713) (190) (893) Adjusted Banking segment total revenue $ 73,267 $ 69,752 $ 65,302 $ 63,649 $ 60,111 Banking segment core efficiency ratio (tax-equivalent basis) 52.4% 51.8% 55.2% 55.5% 56.2% Mortgage segment core efficiency ratio (tax equivalent) Consolidated noninterest expense $ 57,213 $ 56,358 $ 56,151 $ 57,540 $ 69,224 Less loss on sale of mortgage servicing rights - - - - - Less Banking segment noninterest expense 38,392 36,721 37,241 37,423 49,467 Adjusted Mortgage segment noninterest expense $ 18,821 $ 19,637 $ 18,910 $ 20,117 $ 19,757 Total noninterest income 34,355 35,763 33,275 37,017 37,820 Less Banking segment noninterest income 15,123 14,058 12,912 13,192 13,984 Less change in fair value on mortgage servicing rights (2,701) (1,778) (1,713) (190) (893) Adjusted Mortgage segment total revenue $ 21,933 $ 23,483 $ 22,076 $ 24,015 $ 24,729 Mortgage segment core efficiency ratio (tax-equivalent basis) 85.8% 83.6% 85.7% 83.8% 79.9%

GAAP reconciliation and use of non-GAAP financial measures Mortgage contribution, adjusted

GAAP reconciliation and use of non-GAAP financial measures Tangible assets and equity Return on average tangible equity

GAAP reconciliation and use of non-GAAP financial measures Return on average tangible equity, adjusted Return on average assets and equity, adjusted

GAAP reconciliation and use of non-GAAP financial measures Return on average assets and equity, adjusted
GAAP reconciliation and use of non-GAAP financial measures Return on average assets and equity, adjusted