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Tuesday, Raymond (NSE:RYMD) James analyst Steve Moss reiterated a Market Perform rating on FB Financial (NYSE:FBK), following the company’s first-quarter results for 2025. The results showed a core return on assets (ROA) of 1.2%, aligning with market expectations. FB Financial also reported improved credit metrics, with non-performing loans (NPLs) decreasing and net charge-offs (NCOs) primarily related to a unique commercial and industrial (C&I) relationship.
Despite the prevailing economic uncertainty, FB Financial has maintained its loan growth forecast for 2025, projecting high-single-digit to low-double-digit increases. This outlook is supported by a robust pipeline and recent expansions into new markets. InvestingPro data shows the bank has raised its dividend for seven consecutive years, currently offering a 1.85% yield, with an 11.8% dividend growth in the last twelve months. The bank reiterated its expectations for the upcoming acquisition of Southern States Bancshares, anticipated to close in the third quarter of 2025. The transaction is set to enhance FB Financial’s presence in the Alabama and Georgia markets.
The bank’s expenses for the quarter were higher than anticipated due to performance-based compensation. However, the analyst views the overall results and outlook positively, which align with prior expectations. FB Financial’s markets are considered economically resilient, and the bank is noted for its strong capital and liquidity position, as well as substantial loan loss reserves. InvestingPro’s analysis indicates a "Fair" overall financial health score of 2.21 out of 5, with particularly strong scores in cash flow and profitability. These factors are seen as positioning the bank favorably for growth opportunities while providing a safeguard against potential economic difficulties.
In terms of valuation, Raymond James finds the bank’s current premium valuation, which stands at 11.1 times the firm’s 2025 earnings per share (EPS) estimates, to be fair when compared to its peers, who are valued at 10.1 times. Based on InvestingPro’s Fair Value analysis, FB Financial appears to be slightly undervalued at current levels. This assessment has contributed to the decision to reiterate the Market Perform rating for FB Financial’s stock. For deeper insights into FB Financial’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, FB Financial Corp reported its first-quarter earnings for 2025, achieving an adjusted earnings per share (EPS) of $0.85, which slightly exceeded the forecast of $0.83. However, the company’s revenue was $130.67 million, falling short of the expected $132.18 million. The company is also planning a merger with Southern States Bank, anticipated to close in the third quarter of 2025, which is part of its strategy to expand geographically and enhance its market position. Analysts from firms like Piper Sandler have shown interest in the company’s loan growth trends and the impact of economic uncertainty on lending practices. FB Financial’s leadership emphasized ongoing efforts in talent acquisition and market expansion to bolster its competitive edge. Despite the revenue shortfall, the company maintains strong loan growth and capital ratios, which were highlighted as part of its strategic initiatives. Economic uncertainties and potential policy changes remain concerns for the bank, yet it continues to focus on its strategic goals amid these challenges.
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