Microvast Holdings announces departure of chief financial officer
Introduction & Market Context
FB Financial Corporation (NYSE:FBK) reported its first quarter 2025 results on April 15, showing a slight earnings beat despite revenue falling short of expectations. The quarter was marked by solid loan growth, net interest margin expansion, and the announcement of a strategic merger with Southern States Bancshares. Despite the earnings beat, the stock saw a marginal decline of 0.63% in after-hours trading, reflecting investor caution amid broader economic uncertainties.
The bank’s presentation highlighted its continued focus on organic growth and strategic expansion in the Southeast, while maintaining strong capital and liquidity positions. With a tangible common equity ratio of 10.5% and preliminary CET1 ratio of 12.8%, FB Financial appears well-positioned to navigate potential economic headwinds while pursuing growth opportunities.
Quarterly Performance Highlights
FB Financial reported net income of $39.4 million for Q1 2025, or $40.1 million on an adjusted basis. Adjusted earnings per share came in at $0.85, slightly above the analyst forecast of $0.83, while revenue of $130.67 million missed expectations of $132.18 million.
As shown in the following summary of key financial metrics, the company maintained solid profitability with an adjusted return on average assets (ROAA) of 1.23% and adjusted return on average tangible common equity (ROATCE) of 12.3%:
The bank’s loan portfolio grew by $169 million or 7.14% on an annualized basis, primarily driven by increases in commercial and industrial (C&I), consumer, and commercial real estate loans. This growth was partially offset by a $65 million decrease in construction loans as the company continued to manage concentration ratios.
FB Financial’s performance over recent years shows consistent growth in adjusted earnings per share and book value per share, as illustrated in the following chart:
Strategic Initiatives
The most significant strategic development in Q1 was FB Financial’s announcement of a merger with Southern States Bancshares Inc. (NYSE:SSBK) on March 31, 2025. The company has already established an integration office and begun collaboration between the two institutions, with the deal expected to close in Q3 2025.
This merger aligns with FB Financial’s expansion strategy into high-value contiguous markets in the Southeast, creating what management describes as "one of the highest performing banking franchises in the Southeast’s best markets." The combination brings together two banks with similar business models and cultural alignment.
The following slide illustrates the strategic rationale and expanded footprint resulting from the merger:
Beyond the merger, FB Financial continues to invest in talent acquisition, hiring nine new revenue producers in Q1 2025. This follows a similar pace from the previous quarter and demonstrates the company’s commitment to organic growth alongside strategic acquisitions.
Detailed Financial Analysis
Net Interest Margin and Income
FB Financial’s net interest margin expanded by 5 basis points to 3.55% in Q1 2025. This improvement came despite headwinds from fewer days in the quarter, lower yields on earning assets, and lower cash balances. The company’s active management of deposit costs and growth in loan balances helped offset these challenges.
The following chart shows the NIM trend over the past five quarters:
Loan Portfolio
The company’s loan portfolio grew to $9.77 billion, with yields of 6.41% in Q1 2025. The portfolio remains well-diversified across various sectors, with C&I loans comprising 32% of the total, followed by commercial real estate at 22% and residential real estate at 17%.
The following chart illustrates the loan growth trend and portfolio composition:
Deposit Base
FB Financial maintained a stable deposit base in Q1 2025, with an increase in noninterest-bearing deposits driven by seasonal increases in mortgage escrow deposits. The company actively managed its brokered and higher-cost non-relationship deposit portfolios, resulting in improved cost of deposits.
The deposit composition remains well-diversified, with checking accounts representing 44% of total deposits:
Asset Quality
Asset quality metrics showed improvement in Q1 2025, with the nonperforming assets to total assets ratio declining by 9 basis points to 0.84%. The allowance for credit losses (ACL) coverage ratio stood at 1.54%, while annualized net charge-offs were 0.14% for the quarter.
The following chart shows the trend in asset quality metrics:
Capital and Liquidity
FB Financial maintained strong capital ratios in Q1 2025, with tangible common equity to tangible assets at 10.5% and a preliminary total risk-based capital ratio of 15.2%. The company executed approximately $10 million in share buybacks during the quarter while maintaining ample liquidity.
On-balance sheet liquidity stood at $1.5 billion or 11.6% of total assets, providing flexibility for future growth:
Mortgage Banking Performance
The mortgage segment delivered a pre-tax net contribution of $1.5 million in Q1 2025, marking the fifth consecutive quarter of profitability. Increased revenue was driven by higher mortgage production amid lower rates during the first quarter, with purchase activity continuing to dominate refinancing.
The following chart shows mortgage performance metrics:
Forward-Looking Statements
Looking ahead, FB Financial expects its net interest margin to remain between 3.55% and 3.6% on a standalone basis, with potential improvement following the Southern States merger. The company anticipates loan growth in the high single to low double digits and continues to invest in talent and market expansion.
Management highlighted potential economic uncertainties related to policy changes and market volatility but expressed confidence in the company’s ability to navigate these challenges. The integration with Southern States remains on track for a Q3 2025 closing.
Potential risks include economic uncertainty, integration challenges with the Southern States merger, regulatory changes, and competitive pressures in the banking sector. The revenue shortfall in Q1 indicates potential challenges in achieving top-line growth targets.
Executive Commentary
CEO Chris Holmes emphasized the company’s strategic focus amid uncertainty: "In times of uncertainty, our playbook is to first, make sure we understand second, formulate a plan and third, to execute." Holmes also highlighted the potential for growth during uncertain times, stating, "We believe the history shows that times of uncertainty bring great opportunity for those that are disciplined and prepared."
Regarding the Southern States merger, Holmes noted, "Our conviction around this deal is stronger today than at the announcement," following personal visits to all Southern States locations where the leadership team met with employees.
The company also acknowledged the passing of former Chairman Jim Ayers, who led the bank for more than 35 years and transformed it from a small community bank with less than $20 million in assets to the $13 billion institution it is today.
Full presentation:
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