FBK FB Financial Corporation

Clayton Banks acquisition accretive to EPS and TBVPS, driving record revenues

Reported diluted EPS of $0.27; Core diluted EPS of $0.60, up 22% on a linked-quarter basis

FB Financial Corporation (“FB Financial”) (NYSE: FBK), parent company of FirstBank, reported its results today for the third quarter of 2017. Effective July 31, 2017, the Company completed its merger with Clayton Bank and Trust in Knoxville, Tennessee and American City Bank in Tullahoma, Tennessee (collectively, the “Clayton Banks”). Accordingly, the third quarter results of the Company include the Clayton Banks results since July 31, 2017.

For the quarter ended September 30, 2017, the Company reported net income of $8.4 million, or $0.27 per diluted common share. Core net income was $18.5 million, or $0.60 per diluted common share, excluding merger-related charges and other items discussed below, for the third quarter of 2017, up $0.11 per share, or a 22.4% increase on a linked-quarter basis.

President and CEO Christopher T. Holmes stated, “This quarter was very exciting for the Company as we celebrated the one year anniversary of our Initial Public Offering and the completion of our acquisition of the Clayton Banks. Our results for the quarter were highlighted by record loans, deposits and revenues driving a 22% linked-quarter increase in core diluted EPS to $0.60 per diluted share. We also welcomed over 200 new associates to the team along with many valued customers. Our team looks forward to successfully integrating the operating systems by the end of the year.”

Third Quarter Key Highlights

• Return on average assets (ROAA) of 0.80% and core ROAA of 1.76%
• Loans held for investment (HFI) grew to a record $3.11 billion, up 73.7% over September 30, 2016
• Total deposits grew to a record $3.72 billion, up 40.8% over September 30, 2016
• Record total revenues of $81.4 million, up 23.2% from the second quarter of 2017
• Net interest margin (NIM)(tax-equivalent basis) rose to 4.61% in the third quarter of 2017, up from 4.19% in the second quarter of 2017; NIM was 4.33%, excluding accretion and collection of nonaccrual interest
• Consolidated efficiency ratio was 85.0% and core efficiency ratio was 64.4%
• Reverse loan loss provision of $0.8 million driven by net recoveries of $1.0 million

Financial Summary

    Reported Results     Non-GAAP Core Results* For the Three Months Ended September 30, (in thousands) 2017     2016 (1) 2017     2016 (2) Results of operations Net income $ 8,388 $ 10,033 $ 18,516 $ 12,935 Diluted earnings per share (EPS) $ 0.27 $ 0.55 $ 0.60 $ 0.71 Diluted average shares outstanding 30,604,537 18,332,192 30,604,537 18,332,192 Total revenue $ 81,430 $ 71,579 $ 82,383 $ 69,510 Return on average assets (ROAA) 0.80 % 1.32 % 1.76 % 1.71 % Return on average equity (ROAE) 6.05 % 14.43 % 13.35 % 18.61 %

Return on average tangible common equity (ROTCE)*

      7.70 %       17.79 %       17.00 %       22.94 %   *This measure is considered a non-GAAP financial measure. See “GAAP Reconciliation and Use of Non-GAAP financial measures” and the corresponding financial tables for a reconciliation and discussion of this non-GAAP measure. (1) Prior to the IPO in the third quarter of 2016, the Company was an S corporation and did not incur federal income taxes. In conjunction with the IPO, the Company converted to a C corporation. These results are on a pro forma basis to reflect the results of the Company on a C corporation basis. Reported net income as an S corporation was $1,207 with diluted EPS of $0.07 while ROAA, ROAE and ROTCE were 0.16%, 1.74% and 2.14%, respectively. (2) Core results are presented pro forma for conversion from S corporation to C corporation status.  

During the third quarter of 2017 and 2016, as adjusted for in the preceding table, the Company recorded certain items impacting comparability between periods, as follows:

• $15.7 million pre-tax merger-related charges associated with the merger with the Clayton Banks in the third quarter of 2017 compared to $1.1 million pre-tax merger-related charges for the third quarter of 2016;
• $0.9 million net pre-tax charge related to the decrease in the fair value of mortgage servicing rights (MSRs), net of hedging gains, during the third quarter of 2017. MSR impairment resulted in a net pre-tax charge of $2.4 million for the third quarter of 2016; and
• $60 thousand net pre-tax losses on other real estate owned, other assets, and investments compared to a $2.1 million net pre-tax gains in the third quarter of 2016.

Holmes continued, “We are very pleased with our results for the quarter and year-to-date. We continue to execute our operating strategy which is geared toward relentlessly delivering solutions for our customers and focusing on creating shareholder value. We believe the combination with the Clayton Banks will enhance our ability to deliver strong financial performance.”

Key Highlights for Clayton Banks Merger

      As of effective date, (in millions) July 31, 2017 Loans, held for investment $ 1,060.5 Customer deposits 854.8 Brokered and internet time deposits   124.7 Total deposits   979.5 Wholesale borrowings - FHLB 84.8 Goodwill and intangibles recorded 101.7 Total assets 1,214.0 Closing purchase price     $ 236.5  

Customer-Focused Balance Sheet Growth Drives Interest Income and NIM

Excluding the Clayton Banks’ $1.06 billion in net loans held for investment as of the acquisition date, loans held for investment increased $260.7 million, or 14.5%, from September 30, 2016 and $83.1 million, or 16.7% annualized, from June 30, 2017. Yields on loans held for investment were 5.90% for the third quarter of 2017 compared to 5.19% on a linked-quarter basis. Accretion and collection of nonaccrual interest contributed a total of 39 basis points to this quarter’s loan yield.

Excluding the Clayton Banks’ $854.8 million in customer deposits as of the acquisition date from the Clayton Banks, customer deposits increased $120.9 million from September 30, 2016 and $33.3 million, or 4.8% annualized, from June 30, 2017. Noninterest-bearing deposit balances were 24.9% of total deposits at September 30, 2017, compared to 27.5% at September 30, 2016, and 26.2% at June 30, 2017. Cost of total deposits was 0.46% for the third quarter of 2017, compared to 0.34% for the second quarter of 2017 and 0.30% for the third quarter of 2016, reflecting the merger and rising interest rates.

Loans held for sale, generated by our mortgage operations, was $466.4 million at September 30, 2017, compared to $427.4 million at June 30, 2017, and $486.6 million at September 30, 2016. Our total loan-to-deposit ratio was 96.3% at September 30, 2017, compared to 86.4% at September 30, 2016.

Our NIM was 4.61% for the third quarter of 2017, compared to 4.19% and 4.05% for the second quarter of 2017 and third quarter of 2016, respectively, reflecting additional accretion, collection of nonaccrual interest, higher loan fees and the impact of the merger. Excluding accretion related to acquired loans and nonaccrual interest collections, our NIM was 4.33% compared to 4.03% and 3.88% for the second quarter of 2017 and third quarter of 2016, respectively. Net interest income was $43.6 million for the third quarter of 2017, compared to $30.4 million for the second quarter of 2017 and $27.6 million for the third quarter of 2016.

“We are pleased with our organic loan growth, together with our strong customer deposit base, which continues to drive our customer-focused balance sheet. Our banking teams delivered excellent results this quarter, and have demonstrated again their ability to consistently perform at a high level. The Clayton Banks merger has further strengthened an already strong NIM, adding to our solid foundation and enabling consistent future profitability,” Holmes said.

Noninterest Income Continues Strength and Stability

Noninterest income was $37.8 million for the third quarter of 2017, compared to $35.7 million for the second quarter of 2017 and $44.0 million for the third quarter of 2016.

Mortgage banking revenues were $31.3 million for the third quarter of 2017 and $30.2 million for the second quarter of 2017, compared to $36.9 million for the third quarter of 2016. Net gains from mortgage sales were $29.6 million for the third quarter of 2017, compared to $25.5 million for the same period in 2016. Mortgage loan sales totaled $1.64 billion and $1.17 billion for the third quarter of 2017 and third quarter of 2016, respectively. Mortgage interest rate lock commitment (IRLC) volume rose 10.0% to $2.00 billion during the third quarter, compared to $1.82 billion in the same period in 2016. Our mortgage loan IRLC pipeline decreased from $546.5 million at June 30, 2017, to $540.7 million at September 30, 2017. Mortgage servicing revenue was $3.5 million for the third quarter of 2017, compared to $3.7 million for the same period in 2016 and $2.7 million for the second quarter of 2017.

Holmes commented, “Our mortgage team has been outstanding, continuing to deliver strong results in 2017 despite a challenging market environment and rising interest rates. They have executed their plan and have successfully scaled our correspondent channel, delivering stable year-over-year contribution for the Company.”

Noninterest Expenses Remain In-Line: Merger Increases Operating Leverage

Noninterest expense was $69.2 million for the third quarter of 2017, compared to $49.1 million for the second quarter of 2017 and $55.5 million for the third quarter of 2016. Excluding the merger-related charges and other items discussed above, core noninterest expense was $53.5 million for the third quarter of 2017, compared to $48.1 million for the second quarter of 2017 and $48.8 million for the third quarter of 2016. The primary driver of the increase in core noninterest expense was the impact of the merger.

Our efficiency ratio was 85.0% for the third quarter of 2017, compared to 77.6% for the third quarter of 2016. Our core efficiency ratio, which excludes the merger-related charges and other items previously discussed above, was 64.4% for the third quarter of 2017, compared to 69.7% for the third quarter of 2016. Our Banking Segment core efficiency ratio was 56.2% for the third quarter of 2017, compared to 65.2% for the third quarter of 2016, while our Mortgage Segment core efficiency ratio was 79.9% and 76.3%, respectively, for the same periods. See “GAAP Reconciliation and Use of Non-GAAP Financial Measures.”

“The merger with the Clayton Banks accelerated our ability to drive operating leverage for the Company as the realization of additional synergies continues. Heading into 2018, we believe our Consolidated and Banking segment efficiency will continue to improve as we realize the full benefit of the Clayton Banks synergies by early 2018,” commented James R. Gordon, Chief Financial Officer.

Strong Asset Quality

The allowance for loan losses equaled 0.75% of loans HFI at September 30, 2017 (or 1.12%, excluding acquired loans of $1.01 billion as of September 30, 2017), compared to 1.18% at June 30, 2017, and 1.30% at September 30, 2016. Net recoveries were $1.0 million, or 0.15% of average loans HFI for the quarter and total $3.64 million, or 0.25% of average loans HFI year-to-date.

The provision for loan losses was a reversal of $0.8 million for the third quarter of 2017 compared to reversal of $0.9 million and provision of $0.1 million for the second quarter of 2017 and the third quarter of 2016, respectively, driven by net recoveries realized through the first nine months of 2017.

Nonperforming assets increased to $40.3 million, or 0.88% of total assets, at September 30, 2017, from $21.6 million, or 0.68%, at September 30, 2016, driven by the merger, including $3.6 million of acquired facilities held for sale, as well as $13.6 million GNMA related guaranteed loans that we have the ability, not intent, to repurchase.

Capital Strength for Future Growth

The Company ended the quarter with a shareholders’ equity to assets ratio and a tangible common equity to tangible assets ratio of 12.50% and 9.50%, respectively, and a book value per common share and tangible book value per common share of $18.76 and $13.79, respectively. This compares to 10.33% and 8.84% and $13.73 and $11.56, respectively, at September 30, 2016. Our common equity tier one ratio was to 10.83% at September 30, 2017, from 11.16% at September 30, 2016. See “GAAP Reconciliation and Use of Non-GAAP Financial Measures.”

“Our capital ratios remain strong and provide a solid base from which we can continue our strategic growth. The Clayton Banks merger resulted in tangible book value accretion from our previous estimation for slight dilution,” commented Gordon.

Summary

“Again, we are pleased with our results, but more importantly we are excited about our future as we continue to grow organically and through strategic acquisitions, as well as delivering on revenue and expense synergies from our recently completed merger,” Holmes concluded.

WEBCAST AND CONFERENCE CALL INFORMATION

The live broadcast of FB Financial Corporation’s conference call will begin at 8:00 a.m. CDT on Tuesday, October 24, 2017, and the earnings conference call will be broadcast live over the Internet at http://services.choruscall.com/links/fbk170725AWsp51Nq.html. An online replay will be available for twelve months approximately an hour following the conclusion of the live broadcast.

ABOUT FB FINANCIAL CORPORATION

FB Financial Corporation (NYSE: FBK) is a bank holding company headquartered in Nashville, Tennessee. FB Financial operates through its wholly owned banking subsidiary, FirstBank, the third largest Tennessee-headquartered community bank, with 63 full-service bank branches across Tennessee, North Alabama and North Georgia, and a national mortgage business with offices across the Southeast. FirstBank serves five of the largest metropolitan markets in Tennessee and has approximately $4.6 billion in total assets.

SUPPLEMENTARY FINANCIAL INFORMATION AND EARNINGS PRESENTATION

Investors are encouraged to review this Earnings Release in conjunction with the Supplementary Financial Data and Earnings Presentation posted on the Company’s website, which can be found at https://investors.firstbankonline.com. This Earnings Release and the Supplementary Financial Data and Earnings Presentation are also included with a Current Report on Form 8-K that the Company furnished to the U.S. Securities and Exchange Commission (SEC) on October 23, 2017.

BUSINESS SEGMENT RESULTS

The Company has included its business segment financial tables as part of this release. A detailed discussion of the business segment results is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, and investors are encouraged to review that discussion in conjunction with this Earnings Release.

FORWARD-LOOKING STATEMENTS

This news release contains “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through the Company’s use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “should,” “predicts,” “could,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential” and other similar words and expressions of the future or otherwise regarding the outlook for the Company’s future business and financial performance and/or the performance of the banking and mortgage industry and economy in general and the Company’s acquisition of the Clayton Banks and the benefits, cost, and financial impact thereof. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements.

Forward-looking statements are based on the information known to, and current beliefs and expectations of, the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this Earnings Release including, without limitation, the risks and other factors set forth in the Company’s December 31, 2016 Form 10-K, filed with the SEC on March 31, 2017 under the captions “Cautionary note regarding forward-looking statements” and “Risk factors.” Many of these factors are beyond the Company’s ability to control or predict. The Company believes the forward-looking statements contained herein are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. The Company does not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as otherwise may be required by law.

GAAP RECONCILIATION AND USE OF NON-GAAP FINANCIAL MEASURES

This Earnings Release 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, pro forma core net income, pro forma core income tax expense, pro forma core diluted earnings per share, core noninterest expense and core noninterest income, core efficiency ratio (tax equivalent basis), Banking segment core efficiency ratio (tax equivalent basis), Mortgage segment core efficiency ratio (tax equivalent basis), pro forma core return on average assets and equity and pro forma 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 in nature. The Company refers to these non‐GAAP measures as core measures. This Earnings Release also presents tangible assets, tangible common equity, tangible book value per common share, tangible common equity to tangible assets, return on average tangible common equity, pro forma return on average tangible common equity and pro forma core return on average tangible common 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 our 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 we calculate 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 we have 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.

            Financial Summary and Key Metrics (Unaudited) (In Thousands, Except Share Data and %)   2017 2016         Third Quarter     Second Quarter Third Quarter Statement of Income Data Total interest income $ 48,415 $ 33,278 $ 30,005 Total interest expense   4,805         2,851     2,388   Net interest income 43,610 30,427 27,617 Provision for loan losses (784 ) (865 ) 71 Total noninterest income 37,820 35,657 43,962 Total noninterest expense   69,224         49,136     55,529   Net income before income taxes 12,990 17,813 15,979 Income tax expense   4,602         6,574     14,772   Net income $ 8,388       $ 11,239   $ 1,207   Net interest income (tax—equivalent basis) $ 44,281       $ 31,158   $ 28,213   Pro forma net income (C-Corp basis) $ 8,388       $ 11,239   $ 10,033   Pro forma core net income* $ 18,516       $ 12,919   $ 12,935   Per Common Share Diluted net income $ 0.27 $ 0.43 $ 0.07 Pro forma net income- diluted (C Corp basis) $ 0.27 $ 0.43 $ 0.55 Pro forma core net income - diluted* $ 0.60 $ 0.49 $ 0.71 Book value 18.76 17.59 13.73 Tangible book value* 13.79 15.83 11.56 Weighted average number of shares-diluted 30,604,537 26,301,458 18,332,192 Period-end number of shares (a)       30,526,592         28,968,160         23,975,122   Selected Balance Sheet Data Cash and due from banks $ 67,070 $ 59,112 $ 51,292 Loans held for investment 3,114,562 1,970,974 1,793,343 Allowance for loan losses (23,482 ) (23,247 ) (23,290 ) Loans held for sale 466,369 427,416 486,601 Available-for-sale securities, fair value 543,282 553,357 553,357 Other real estate owned, net 13,812 6,370 8,964 Total assets 4,581,943 3,346,570 3,187,180 Customer deposits 3,614,220 2,726,060 2,638,540 Brokered and internet time deposits 104,318 1,533 1,532 Total deposits 3,718,538 2,727,593 2,640,072 Borrowings 196,299 43,790 125,291

Total shareholders’ equity

      572,528         509,517         329,108   Selected Ratios Return on average: Assets 0.80 % 1.40 % 0.16 %

Shareholders’ equity

6.05 % 11.30 % 1.74 % Tangible common equity* 7.70 % 12.96 % 2.14 % Pro forma return on average (C-Corp basis): Assets 0.80 % 1.40 % 1.32 %

Shareholders’ equity

6.05 % 11.30 % 14.43 % Tangible common equity* 7.70 % 12.96 % 17.79 %

Average shareholders’ equity to average assets

13.22 % 12.37 % 9.17 % Net interest margin (NIM) (tax-equivalent basis) 4.61 % 4.19 % 4.05 % Net interest margin excluding accretion and nonaccrual interest collections (tax-equivalent basis) (b) 4.33 % 3.95 % 3.88 % Efficiency ratio (GAAP) 85.01 % 74.35 % 77.58 % Core efficiency ratio (tax-equivalent basis)* 64.43 % 70.18 % 69.65 % Loans held for investment to deposit ratio 83.76 % 72.26 % 67.93 % Total loans to deposit ratio 96.30 % 87.93 % 86.36 % Yield on interest-earning assets 5.10 % 4.57 % 4.40 % Cost of interest-bearing liabilities 0.71 % 0.55 % 0.48 % Cost of total deposits       0.46 %       0.34 %       0.30 % Credit Quality Ratios Allowance for loan losses as a percentage of loans held for investment 0.75 % 1.18 % 1.30 %

Net recoveries (charge-off’s) as a percentage of average total loans held for investment

0.15 % 0.25 % (0.12 )%

Nonperforming loans held for investment as a percentage of total loans held for investments

0.29 % 0.50 % 0.61 % Nonperforming assets as a percentage of total assets (a)       0.88 %       0.58 %       0.68 % Preliminary capital ratios (Consolidated)

Shareholders’ equity to assets

12.50 % 15.23 % 10.33 % Tangible common equity to tangible assets* 9.50 % 13.92 % 8.84 % Tier 1 capital (to average assets) 11.35 % 15.54 % 10.32 % Tier 1 capital (to risk-weighted assets) 11.59 % 18.28 % 12.37 % Total capital (to risk-weighted assets) 12.19 % 19.14 % 13.32 % Common Equity Tier 1 (to risk-weighted assets) (CET1)       10.83 %       17.16 %       11.16 %   *These measures are considered non-GAAP financial measures. See “GAAP Reconciliation and Use of Non-GAAP financial measures” and the corresponding financial tables below for reconciliations of these Non-GAAP measures. Investors are encouraged to refer to discussion of non-GAAP measures included in the corresponding earnings release.

(a) Includes marketable equity securities received in satisfaction of previously charged-off loan during the second quarter of 2017.

(b) Excludes accretion from acquired/purchased loans.

    Non-GAAP Reconciliation For the Quarters Ended (Unaudited) (In Thousands, Except Share Data and %)             2017 2016 Pro forma core net income     Third Quarter     Second Quarter Third Quarter Pre-tax net income $ 12,990 $ 17,813 $ 15,979 Non-core items: Noninterest income Less change in fair value on mortgage servicing rights, net (893 ) (1,840 ) - Less gain from securities, net 254 29 416

Less (loss) gain on sales or write-downs of other real estate owned and other assets

(314 ) 62 1,653 Noninterest expenses Plus one-time equity grants - - 2,960 Plus variable compensation charge related to cash settled equity awards - - 213 Plus merger and conversion 15,711 767 1,122 Plus (recovery of) impairment of mortgage servicing rights - - 2,402 Plus loss on sale of mortgage servicing rights   -         249     -   Pre tax core net income $ 29,654 $ 20,578 $ 20,607 Pro forma core income tax expense   11,138         7,659     7,672   Pro forma core net income $ 18,516       $ 12,919   $ 12,935   Weighted average common shares outstanding fully diluted 30,604,537 26,301,458 18,332,192   Pro forma core diluted earnings per share Diluted earning per share $ 0.27 $ 0.43 $ 0.07 Non-core items: Noninterest income Less change in fair value on mortgage servicing rights (0.03 ) (0.07 ) - Less gain from securities, net 0.01 0.00 0.02

Less (loss) gain on sales or write-downs of other real estate owned and other assets

(0.01 ) 0.00 0.09   Noninterest expenses Plus one-time equity grants - - 0.16 Plus variable compensation charge related to cash settled equity awards - - 0.01 Plus merger and conversion 0.51 0.03 0.06 Plus (recovery of) impairment of mortgage servicing rights - - 0.13 Plus loss on sale of mortgage servicing rights - 0.01 - Tax effect   (0.2 )       (0.0 )   0.39   Pro forma core diluted earnings per share     $ 0.60       $ 0.49       $ 0.71         2017 2016 Core efficiency ratio (tax-equivalent basis)     Third Quarter     Second Quarter Third Quarter Total noninterest expense $ 69,224 $ 49,136 $ 55,249 Less one-time equity grants - - 2,960 Less variable compensation charge related to cash settled equity awards - - 213 Less merger and conversion expenses 15,711 767 1,122 Less (recovery of) impairment of mortgage servicing rights - - 2,402 Less loss on sale of mortgage servicing rights   -         249     -   Core noninterest expense $ 53,513       $ 48,120   $ 48,832   Net interest income (tax-equivalent basis) 44,281 31,158 28,213 Total noninterest income 37,820 35,657 43,962 Less change in fair value on mortgage servicing rights (893 ) (1,840 ) -

Less (loss) gain on sales or write-downs of other real estate owned and other assets

(314 ) 62 1,653 Less gain from securities, net   254         29     416   Core noninterest income   38,773         37,406     41,893   Core revenue $ 83,054       $ 68,564   $ 70,106   Efficiency ratio (GAAP)(1) 85.01 % 74.35 % 77.58 % Core efficiency ratio (tax-equivalent basis)       64.43 %       70.18 %       69.65 %   (1) Efficiency ratio (GAAP) is calculated by dividing reported noninterest expense by reported total revenue     Non-GAAP Reconciliation For the Quarters Ended (Unaudited) (In Thousands, Except Share Data and %)             2017 2016 Banking segment core efficiency ratio (tax equivalent)     Third Quarter     Second Quarter Third Quarter Core consolidated noninterest expense $ 53,513 $ 48,120 $ 48,832 Less Mortgage segment noninterest expense 19,757 19,802 23,744 Add (recovery of) impairment of mortgage servicing rights - - 2,402 Add loss on sale of mortgage servicing rights   -         249     -   Adjusted Banking segment noninterest expense   33,756         28,567     27,490   Adjusted core revenue 83,054 68,564 70,106 Less Mortgage segment noninterest income 23,836 23,121 27,957 Less change in fair value on mortgage servicing rights   (893 )       (1,840 )   -   Adjusted Banking segment total revenue $ 60,111 $ 47,283 $ 42,149 Banking segment core efficiency ratio (tax-equivalent basis) 56.16 % 60.42 % 65.22 %   Mortgage segment core efficiency ratio (tax equivalent) Consolidated Noninterest expense $ 69,224 $ 49,136 $ 55,529 Less impairment of mortgage servicing rights - - 2,402 Less loss on sale of mortgage servicing rights - 249 - Less Banking segment noninterest expense   49,467         29,334     31,785   Adjusted Mortgage segment noninterest expense $ 19,757 $ 19,553 $ 21,342 Total noninterest income 37,820 35,657 43,962 Less Banking segment noninterest income 13,984 12,536 16,005 Less change in fair value on mortgage servicing rights   (893 )       (1,840 )   -   Adjusted Mortgage segment total revenue $ 24,729 $ 24,961 $ 27,957 Mortgage segment core efficiency ratio (tax-equivalent basis)       79.89 %       78.33 %       76.34 %       2017 2016 Tangible assets and equity     Third Quarter     Second Quarter Third Quarter Tangible Assets Total assets $ 4,581,943 $ 3,346,570 $ 3,187,180 Less goodwill 138,910 46,867 46,867 Less core deposit intangibles   12,550         4,048     5,090   Tangible assets $ 4,430,483       $ 3,295,655   $ 3,135,223   Tangible Common Equity

Total shareholders’ equity

$ 572,528 $ 509,517 $ 329,108 Less goodwill 138,910 46,867 46,867 Less core deposit intangibles   12,550         4,048     5,090   Tangible common equity $ 421,068       $ 458,602   $ 277,151   Common shares outstanding 30,526,592 28,968,160 23,975,122 Book value per common share $ 18.76 $ 17.59 $ 13.73 Tangible book value per common share $ 13.79 $ 15.83 $ 11.56

Total shareholders’ equity to total assets

12.50 % 15.23 % 10.33 % Tangible common equity to tangible assets 9.50 % 13.92 % 8.84 % Net income $ 8,388 $ 11,239 $ 1,207 Return on tangible common equity       7.90 %       9.83 %       1.73 %       2017 2016 Return on average tangible common equity     Third Quarter     Second Quarter Third Quarter

Total average shareholders’ equity

$ 550,409 $ 398,805 $ 276,549 Less average goodwill 108,220 46,839 46,839 Less average core deposit intangibles   9,983         4,124     5,402   Average tangible common equity $ 432,206 $ 347,842 $ 224,308

Net income

$ 8,388 $ 11,239 $ 1,207 Return on average tangible common equity       7.70 %       12.96 %       2.14 %       2017 2016 Pro forma return on average tangible common equity     Third Quarter     Second Quarter Third Quarter Average tangible common equity $ 432,206 $ 347,842 $ 224,308 Pro forma net income $ 8,388 $ 11,239 $ 10,033 Pro forma return on average tangible common equity       7.70 %       12.96 %       17.79 %     Non-GAAP Reconciliation For the Quarters Ended (Unaudited) (In Thousands, Except Share Data and %)             2017 2016 Pro forma core return on average tangible equity     Third Quarter     Second Quarter Third Quarter Pre-tax pro forma net income $ 12,990 $ 17,813 $ 15,979 Adjustments: Add non-core items 16,664 2,765 4,628 Less pro forma core income tax expense   11,138         7,659     7,672   Pro forma core net income $ 18,516 $ 12,919 $ 12,935 Pro forma core return on average tangible common equity       17.00 %       14.90 %       22.94 %       2017 2016 Pro forma core return on average assets and equity     Third Quarter     Second Quarter Third Quarter Net income $ 8,388 $ 11,239 $ 1,207 Average assets 4,162,478 3,224,783 3,015,670 Average equity 550,409 398,805 276,549 Return on average assets 0.80 % 1.40 % 0.16 % Return on average equity 6.05 % 11.30 % 1.74 % Pro forma core net income 18,516 12,919 12,935 Pro forma core return on average assets 1.76 % 1.61 % 1.71 % Pro forma core return on average equity       13.35 %       12.99 %       18.61 %       2017 2016 Pro forma core total revenue     Third Quarter     Second Quarter Third Quarter Net interest income $ 43,610 $ 30,427 $ 27,617 Noninterest income 37,820 35,657 43,962 Less adjustments: Bargain purchase gain - - - Change in fair value of mortgage servicing rights (893 ) (1,840 ) - Gain from securities, net 254 29 416

(Loss) gain on sales or write-downs of other real estate owned and other assets

  (314 )       62     1,653   Pro forma core total revenue     $ 82,383       $ 67,833       $ 69,510    

View source version on businesswire.com: http://www.businesswire.com/news/home/20171023006362/en/

FB Financial CorporationMedia Contact:Jeanie M. Rittenberry, 615-313-8328jrittenberry@firstbankonline.comwww.firstbankonline.comorFinancial Contact:James R. Gordon, 615-564-1212jgordon@firstbankonline.cominvestorrelations@firstbankonline.com