FB Financial Corp — Call Transcript 2026

Good morning everyone, and welcome to the FB Financial first quarter 2026 earnings call. Please note this event is being recorded. At this time, I'd like to turn the conference call over to Rachel Dereski with FB Financial. Please go ahead. Good morning and welcome to FB Financial Corporation's first quarter 2026 earnings conference call. Hosting the call today from FB Financial are Chris Holmes, President and Chief Executive Officer, and Michael Mettee, Chief Operating and Financial Officer. Please note FB Financial's Earnings Release, supplemental financial information, and this morning's presentation are available on the investor relations page of the company's website at www.firstbankonline.com and on the Securities and Exchange Commission's website at www.sec.gov. Today's call is being recorded and will be available for replay on FB Financial's website approximately an hour after the conclusion of the call. At this time, all participants have been placed in a listen-only mode. The call will open for questions after the presentation. During the presentation, FB Financial may make comments which constitute forward-looking statements under the federal securities laws. Forward-looking statements are based on management's current expectations and assumptions and are subject to risks, uncertainties, and other factors that may cause actual results and performance or achievements of FB Financial to differ materially from any results expressed or implied by such forward-looking statements. Many of such factors are beyond FB Financial's ability to control or predict, and listeners are cautioned not to put undue reliance on such forward-looking statements. A more detailed description of these and other risks that may cause actual results to materially differ from expectations is contained in FB Financial's periodic and current reports filed with the SEC, including FB Financial's most recent Form 10-K. Except as required by law, FB Financial disclaims any obligation to update or revise any forward-looking statements contained in this presentation, whether as a result of new information, future events, or otherwise. In addition, these remarks may include certain non-GAAP financial measures as defined by SEC Regulation G. A presentation of the most directly comparable GAAP financial measures and a reconciliation of the non-GAAP measures to comparable GAAP measures is available in FB Financial's earnings release, supplemental financial information in this morning's presentation, which are all available on the investor relations page of the company's website at www.firstbankonline.com and on the SEC's website at www.sec.gov. I would now like to turn the presentation over to Mr. Chris Holmes, FB Financial's President and CEO. All right. Good morning. Thank you, Rachel. Thanks to everybody for joining the call this morning. Always thank you for your interest in FB Financial. I want to start today's call by calling attention to a distinguished award the company received recently and what it means to FirstBank. The bank received J.D. Power's Retail Banking Award in the South Central region for placing number one among the banks in the region for customer satisfaction. J.D. Power surveyed over 100,000 banking customers across our region, surveying them about their satisfaction with their primary bank. When the results were tabulated, FirstBank ranked number one on the list for overall customer satisfaction. FirstBank also ranked number one in the subcategories of client trust and quality of our people. What made this award even more gratifying was that we weren't even aware that our customers were being surveyed. The ranking is a result of our natural service behavior and not something that resulted from any special preparation. As bank investors, we watch every basis point of margin, efficiency, return, et cetera, and every penny of EPS, where we can struggle to find effective relative measures of the actual driver of superior sustainable bank performance, which is our ability to attract, satisfy, and retain bank clients. This award is independent, tangible verification of what I've known about our team. That's when stacked against the competition, we win. I want to thank our clients who participated in the process and our associates who are the FirstBank story and who take such outstanding care of our clients. You are literally the best at what you do, and I'm proud to be on the team with you. With that, now let me get into the quarter. We reported EPS of $1.10 and adjusted EPS of $1.12 and have grown our tangible book value per share, excluding the impact of AOCI, at a compounded annual growth rate of 11.6% since our IPO back in 2016. Our net income was $57.5 million, or $58.3 million on an adjusted basis, and our pre-tax, pre-provision net revenue, or we may refer to as PPNR during the call, was $77.2 million, or $78.2 million on an adjusted basis. Even with two fewer days in the quarter, we were able to grow our pre-tax pre-provision net revenue versus the prior quarter. Revenue declined slightly during the quarter, but expenses had an even greater decrease to keep our net income and profitability metrics in line with our expectations. We kept our PPNR return on average assets near our benchmark range of 2%, coming in at 1.93% or 1.95% adjusted. We're pleased with our returns, and as Michael will cover in his comments, our growth gained momentum during the quarter, giving us optimism about the remainder of the year. We're now a quarter of the way through 2026. We continue to believe it's a great time to be at FirstBank. Our strategic pillars of award-winning client experience, high associate engagement, operational efficiency, and elite financial performance are all working together to grow our franchise and position us for continued success. When you add that our geography is one of the best in the country and our size is optimal to allow for both capacity and agility, we're optimistic about our path to creating shareholder value, both short-term and long-term. Before I turn the call over to Michael, I do want to acknowledge that, like all of you, we're following the macro events of our times closely. Most of these things, like geopolitical conflicts, technology disruptions, economic shocks, and interest rate volatility, are things that we have to react to versus exercise control over. What we do control is our position in preparation for a range of circumstances and risk scenarios with active and prudent management of our robust capital, robust liquidity, and our high reserve levels. We remain in a position of strength and believe that we have the ability to perform through the various economic cycles as they come. With that, I'll now turn the call over to our Chief Financial and Operating Officer, Michael Mettee, for some more color on the quarter. Thank you, Chris, and good morning, everyone. I'll begin my comments this quarter with the balance sheet. While we started the year at a slower pace than we originally anticipated, with annualized loan growth of approximately 4%, deposit growth around 5%, we are seeing momentum build across the business in the right areas. Although these growth levels fell at the lower end of our internal expectations, the underlying activity and pipeline trends give us confidence that we are positioned to execute on the core fundamentals Chris outlined and drive improved results as the year progresses. During the first quarter, we began to see a more intense wave of competitive pressure, particularly around pricing. While profitability will always remain central to our decision-making, we're focused on striking the appropriate balance between disciplined returns and sustainable growth. Our strategy remains centered on building deep, long-term customer relationships that create enduring value for our shareholders. We will continue to be disciplined in acquiring new relationships and remain committed to protecting and strengthening our existing ones, always with a focus on delivering value to both our clients and shareholders. The company has the size and scale to compete effectively and win attractive deals when it makes sense to do so, and do not hesitate to act aggressively in competitive situations when warranted. Ultimately, our value proposition is not about being the low-price provider. It's about delivering peer-leading customer satisfaction through strong financial advice and trusted services. By keeping the client at the center of everything we do, we believe we will continue to drive improved profitability over time and create sustained long-term value for our shareholders. On that front, March was our strongest month of the quarter, with upper single-digit loan growth and meaningful expansion in our loan pipeline. As we move through the second quarter, we're seeing the momentum continue with a portion of that activity beginning to translate into on-balance sheet growth. We expect second quarter balances to reflect continued improvement, with additional pipeline conversion extending into the third quarter and larger volumes building into the back half of the year. On a full year basis, we continue to expect both loan and deposit growth in the mid to high single-digit range, with growth increasingly weighted towards the second half as momentum builds. Turning to earnings for the quarter, pre-provision net revenue totaled $77.2 million, or $78.2 million on an adjusted basis, compared to $71.1 million in the prior quarter and $77.1 million on an adjusted basis. Net income also improved quarter-over-quarter, despite the shorter reporting period, coming in at $57.5 million or $58.3 million on an adjusted basis. Our net interest margin for the quarter was 3.94%, representing a modest decline, driven primarily by balance sheet mix and the full quarter impact of rate cuts implemented late in the fourth quarter. Total loan yields for the quarter were 6.51%, with yields on new production toward the end of the quarter running a bit closer to 6.6%. On the deposit side, total costs declined to 2.27%, while rates on new production were approximately 2.7% around quarter end. Both loan and deposit yields were modestly lower than the prior quarter, reflecting benchmark rate cuts across the variable rate portions of our balance sheet. As we move deeper into 2026, we expect some additional pressure on margin as competitive dynamics remain elevated and we continue to pursue targeted growth opportunities in our market. Based on current conditions, we would expect full year net interest margin, excluding loan accretion, to be in the range of 3.76%-3.8%, representing a modest decline from our prior guidance. We would expect second quarter margin to trend towards the lower end of that range before stabilizing as the year progresses. Finally, we would note that the interest rate environment remains uncertain, particularly around the timing and magnitude of future benchmark rate movements. As a slightly asset-sensitive balance sheet, changes in rates can be both favorable and unfavorable, depending on the direction and speed of those moves. While our margin outlook assumes a continuation of current conditions, modest rate actions, either higher or lower than current levels, will impact some of the competitive and growth-related margin pressure we've outlined. We'll continue to actively manage the balance sheet and pricing strategy to position the company as effectively as possible across a range of potential scenarios. Non-interest income declined $2.4 million during the quarter, primarily driven by lower secondary mortgage volume, as well as absence of several non-recurring items recognized in the prior quarter, including a higher BOLI benefit payout. In addition, the quarter reflected fewer calendar days relative to the prior period, which modestly impacted overall fee generation, particularly within mortgage-related activity. With mortgage, we saw a really strong start to the quarter, and that slowed as the quarter progressed due to the increased interest rate volatility and heightened uncertainty in the housing market and really the world economy. Shifting rate expectations and broader market dynamics impacted borrower sentiment and transaction activity, which weighed on production as rates moved throughout the quarter. Mortgage revenue also tends to exhibit some seasonality, with activity typically building as we move further into the year. On the expense side, first quarter non-interest expense totaled $95.2 million, representing an approximate 11% decline from the prior quarter, or roughly 7% on an adjusted basis. Personnel costs moderated as compensation-related accruals returned to a more normalized run rate, and merger and integration expenses declined as we completed the majority of costs associated with the Southern States acquisition. We also saw quarter-over-quarter reductions across several other expense categories as the year reset and teams maintained strong expense discipline. As a result, our efficiency ratio for the quarter was 55.2%, or 54.3% on an adjusted basis, driven in part by our Banking segment, which delivered an adjusted efficiency ratio of 50.9%. Looking ahead, we remain focused on disciplined expense management, with Banking segment non-interest expense expected to range between $325 million and $335 million for the year, and a total company efficiency ratio anticipated to remain in the low 50% range. Turning to credit, our provision expense for the quarter totaled approximately $3 million, with our allowance coverage ratio ending the period at 1.49% of loans held for investment. Net charge-offs were modest at an annualized rate of 11 basis points, which was a slight uptick for us, but were driven by a small number of isolated borrower-specific situations rather than any deterioration tied to broader economic stress. In evaluating the allowance for the quarter, we gave additional consideration to potential macroeconomic events stemming from the conflict in the Middle East. We reviewed the most relevant economic forecast, assessed our portfolio for direct exposure to the recent increase in energy prices. While it remains early to fully understand the broader downstream impact of operating companies, our analysis focused on a limited set of industries most sensitive to near-term energy price shocks. Our exposure to those sectors remains minimal, and we believe our reserve levels are appropriate given the current risk profile of the portfolio. With respect to capital, we continue to be in a very strong position, supported by solid capital ratios and a robust liquidity profile that provide meaningful flexibility. During the quarter, we were opportunistic in repurchasing shares amid periods of market volatility, and we remain well-positioned to deploy capital thoughtfully as opportunities present themselves. Our capital ratios continue to reflect that strength with a common equity Tier 1 ratio of 11.5%, a Tier 1 leverage ratio of 10.4%, and total risk-based capital of 13.4%. This strong capital foundation allows us to remain flexible in supporting organic growth, pursuing strategic opportunities, and returning capital to shareholders where appropriate. In closing, I want to echo Chris' congratulations to our team on earning the J.D. Power recognition. This award is a direct reflection of our associates' commitment to our core values and the strength of our franchise, and it reinforces our focus on delivering consistent value to our customers, shareholders, and communities. With that, I'll turn the call back over to Chris. All right. Thanks for the call, Michael. Thanks again to everyone joining the call this morning and for your interest in FB Financial. Operator, at this time, we'd like to open the line for questions. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Dave Rochester with Cantor. Please go ahead. Hey, good morning, guys, and congrats on the award. That sounded very impressive. Good morning, Dave. Thanks very much. Hey, Michael, your comments on the March momentum on loan growth and the guide for the year sounded positive, but it sounds like you're also expecting those competitive pressures to continue. I was wondering where you're seeing the bulk of those pressures coming from. Is it larger banks, smaller banks? Is there any variance by market that's noticeable? Are you assuming more elevated paydown activity to continue as well? I guess you'll just originate more to offset that to get to that mid- to high-single-digit range. Just any thoughts there would be great. Yeah. Good morning, Dave. Some of the optimism, right, is the pipeline continues to build. You can see the closing dates in sight for a lot of those deals. I would say on the loan side, competitive pressure is generally larger institutions. We're seeing it really across the board. Nashville is obviously pretty competitive, but we're seeing it in a lot of our large metro markets, whether that's Birmingham, Huntsville, Knoxville, Memphis. We saw some large payoffs in Memphis where competition took us out on some deals this quarter. It really is across the board. On the deposit side, I would actually say it's both large and smaller. We see community banks that have gotten really aggressive, specifically in the 12-month CD space, even interest checking rates that will make you blush a little bit. For the larger institutions, we're seeing money market rates well above 4% from regional banks that actually we haven't seen advertise and market in quite a while. I'd say it's coming from both sides. The optimism is the team has put in the work, has been working with our clients, both our existing clients and new prospects. There's a lot of kind of economic excitement. Even with everything going on in the world, people are pretty positive about the economic environment. Deal flow is happening, and I would say that's across the company, whether that's in our communities of 7,000 people or our metros of 4 million people. Yeah. Dave, you mentioned paydowns, and we've seen some of those both second half of last year and into this year, and do we think that'll continue? We do. There will be some of that. Michael mentioned a couple of payoffs. We'll continue to see some of those. It's okay when we know about them. It's the unexpected ones that get you. We do expect to continue to see those. As you've heard kind of where the pipeline is and what things look like, we're considering that as we're talking about net growth. Okay, great. That's great color, guys. Appreciate that. Maybe just one more, just on the talent pipeline. Obviously, a lot of disruption in the market, you guys have talked about this before. Seems like a good opportunity, but of course, everybody's trying to retain their people. Can you just give us an update on what you're seeing there, the dynamics with conversations that are going on right now, and how confident are you guys that you might be able to pick up some value add there over the rest of the year? Thanks. Yeah. It's a daily topic here, Dave, right, is kind of offense and defense with regard to talent. I'd say conversations have heated up. We added, let's say, 15 revenue producers in the first quarter. Yet we also lost a couple, and some of that is people going to other institutions, and some of it's retirement, things like that. These are really waterfall events. It's not necessarily who you think is acquiring your talent, but when one person moves, it opens up a door for someone else. You're constantly trying to keep your key players in your key markets, and that's both large and small, too. I think a lot of it people equate to, I'll call it Nashville or like a Huntsville, but it's happening across the board, in places like Jackson, Tennessee, Birmingham, Atlanta. Feel good about the conversations. We're hot and heavy on a lot of recruiting. It's more important to me that we have the right people that fit our culture and our business opportunities versus putting numbers on a page. Even though I just quoted 15, it's much more important that those were the right people. That's where we continue to be focused, and we think we'll get more than our fair share of those right people as we move forward. On a net basis, that sounds really positive in terms of the adds that you just brought in in the first quarter. Just curious, what areas are they in? Are they primarily loan producers, deposit guys? Is it commercial? Where are you seeing those adds? Yeah. One point of clarity when I'm recruiting is I expect all our bankers to be bankers, loans and deposits. Generally not bringing in just loan people. Sometimes bring in just deposit people. Even those are equipped to take care of their clients. It's eight or so relationship managers, couple mortgage people, and a couple people that are focused really on consumer and small business relationship development. We do have a couple, I guess, loan-heavy businesses, right? Yeah, it's positive. We think we can continue the momentum. Yeah. David, I think it's always, I think, a topic, and it's a little like the customer service topic I talked about. It's important. One thing I would say about this one, it's kind of hard to get relative measures on talent because folks look at it differently. For us, it's become something that we know that folks want to try to get their arms around, but it's not really a key performance metric for us. We don't have a goal where we say we're going to hire this many this quarter, or this many the next quarter. We're looking for the right people at the right time, and there is a lot of movement. The one thing I would say is probably more movement and more recruiting going on, particularly in our metropolitan markets, but Michael said even in some of our smaller markets than we've seen across the board. Typically, you see people going from smaller banks to larger banks, but we're seeing some larger banks, some much larger than we are, that are coming in and recruiting talent from banks even smaller than we are. I think it's an interesting time. Again, Michael said it. You have to play offense and defense all the time, and defense is best played by making sure you've got a great place to work, making sure you've got engaged folks, and making sure that you're taking good care of them. That's as important as anything. That's how we view it. All right. Great. Thank you, guys. I appreciate all the color. Sure. Thanks, Dave. The next question comes from Russell Gunther with Stephens. Please go ahead. Hey, good morning, guys. Good morning, Russell. Morning, Russell. Morning, Chris. Morning, Michael. I wanted to ask on the expense side of things. Really strong first quarter results. You guys have reiterated the Banking segment expense guide for the year. It would just be helpful to get some color in terms of what's driving that sort of pickup over the course of the year. Yeah. There's a dose of expectation around performance picking up. We're a performance-based company when it comes to compensation. We want to expect peer-leading returns, and so that drives that number a little bit higher as we look out over the year. Some of that'll come with growth there, Russell. There's not any expectations of huge technology investments or anything like that. It's more just maintaining our run-rate expectations and performance-based comp-type stuff moving higher throughout the year. Okay. Thanks, Michael. Just an adjacent follow-up. I'm curious, deal synergies were fully realized this quarter. In aggregate, did they come in in line with what you were expecting or maybe better than modeled? Bigger picture, what's a good kind of core expense growth rate or range to think about for FBK? Yeah. Actually, I would say from a combination perspective, we landed pretty much right on top of our deal expense number. Maybe ±$100,000 or $200,000 or so. It was really close, except on just a shade. As Michael said, the difference is really immaterial because it's like on a fairly large number, it's down less than a million bucks. I actually think it may be just a hair under, but it's right on the number. Yeah. I'd say we haven't done a real merger in five years. That's right. It's good to kind of dust that off and resharpen the knife a little bit. Yeah, we're around expectations. I think the proof, right, Russell, is getting to that kind of 50% range by year-end, as we continue to efficiency ratio to year-end as we get to the combined company, make sure the revenue engine's still going, which is really important. When you say synergy, I think about revenue as well, and maintaining our ability to grow in our legacy Southern States markets. Yeah, I think we're in a good spot there. I'd say, 4%-5% kind of core expense growth as you look forward, if I think about 2027, which is a long way away. That would not include back to Dave's question, talent acquisition and opportunities to really add teams and scale. We'll maintain our expense discipline as we kind of look forward. Got it. Okay. Thank you. Just last question for me would be circling back to the loan growth side of things, the mid versus high single digits. What are the largest drivers that would get you to the high end versus the low end? Yeah. Some of it's just the time of the quarter, I guess. If you think about the year, it is a competitive environment. People step in, other companies step in, and sometimes, we'll get really aggressive and some customers are more price sensitive than others. You can see large deals move one way or the other. Our pipeline, when I look at it on confidence interval, we're pretty confident about where we are. You could see some payoffs come in, like Chris said, the unexpected ones, which you hope doesn't happen. If you're really servicing your clients, you should know, but sometimes we're all surprised. Yeah. The other thing I would say, Russell, it goes a little bit like we talked about on the people side, in that, as bankers move, that also makes customers more vulnerable to changing banks. Generally, as we're rolling forward, we're looking at what we have, customers that we have, and things that we know are in a pipeline. Part of the optimism is we also are having more and more conversations with really, really solid customers that have big balances, both in loans and deposits, that are in play. You certainly don't bat 1,000 on those, by a long shot. The more at bats you get, the more hits you get. We're getting more and more at bats. There's some optimism around that because we're having a lot of those conversations now. You think some of those are going to hit as you get later into the year and as you get into next year. That seems to be picking up momentum. Okay. That's great, guys. Thank you very much for taking my question. Sure. The next question comes from Stephen Scouten with Piper Sandler. Please go ahead. Hey, good morning, guys. Appreciate the time. I guess one other kind of maybe point of clarification on loan growth. Could you give us a feel for kind of maybe the cadence of growth? Obviously, you said the pipelines and growth picked up in the back of the quarter, but still a little bit below your expectations. Was the cadence just that things started off a little slower? Did you see any sort of demand pullback with all the macro and the geopolitical events? Talked about payoffs, but do you have any sort of numbers there in terms of quarter-over-quarter payoffs or year-over-year that, if that was part of the driver for the slightly slower than expected growth, maybe? Yeah. From a loan cadence, I think I'd describe things as fairly steady and normal, with the exception of a few big balance things. We did have at least a couple of payoffs that were just big balance things. We've talked about that before, and we anticipated some of that. Other things, you do see a little bit of push down the calendar, if you will, or push forward some. Maybe that's related to just some uncertainty. I wouldn't say that's a material event. I would just say that, as we have continued to do what we do, make changes here and make changes there. Remember, we had the disruption, second half of last year, of integrating FirstBank and Southern States, and that does create a little bit of distraction. As you really get back on a good cadence, to use your word there, you just begin to see the momentum pick up. I wouldn't say there's anything unusual about it, other than you can see things bump a little bit, maybe related to, I call it economic uncertainty. Again, I wouldn't read too much into that. Those tend to be small bumps, not big bumps, like I said. It could bump 30 days, but that could move it between quarters. We do see that, but we see that every quarter. Yeah. I'd say for Russell, timing-wise, I'd say if you're sitting here in January, as you're saying, "Wow, it's a really tough start to the year here. Yeah. At the end of January, you'd look at it and go, wow, it's starting to feel weird. Yeah, especially coming off what I'd say were elevated payoffs in December. We're running $600 million or so in payoffs and amortization a quarter, Stephen. You also have people paying down lines, and then you have new lines being extended and paying up. It's a little bit of a moving target. That kind of $500 million-$600 million range is where I expect payoffs and pay downs to occur kind of on a quarterly basis, which means you got to be growing $600 million-$700 million to get to that mid-to-high single-digit plus increases in lines and things of that nature. The first quarter was a bit elevated, but not so much over the fourth quarter, because the fourth quarter was also elevated. Okay. Really helpful, Color. Appreciate that. On the updated NIM guidance, only a couple basis points below kind of where you were previously, just kind of wondering, what, if any, rate cuts do you have built into that guidance? I know you said maybe not an overly material change one way or the other, but would expect if we didn't get cuts, maybe that could lead you to the higher end of the range. The reason for the decline, would that be just increase in deposit pricing pressure? Is that the biggest delta, maybe quarter-over-quarter? Yeah, you nailed it. We have a rate cut in our NIM guidance. That's what we had when we talked about the full year in January. Yeah, and like you said, it's basically a basis point or two lower. I would call that pretty stable. Reality is, if you look at the forward curve, market would say it's probably rates up at this point, right? We're slightly asset sensitive. It's probably worth kind of three to four basis points in margin. If I think about what you just said, deposit pressure and thinner loans, you kind of get back to the same place. There's probably a little bit of upside in flat to up rate scenario. I would say any, what I'll call stairstep rate movement, either direction, I think, yeah, is manageable. It's the elevators up and down which really create a lot of volatility in your margin. The team will be able to manage through either way. We certainly prefer that stairstep. Chris says to our team all the time, "It'll never get easier than today to get deposits." We expect that to continue to be challenging, in the right environment. Now you've got Treasuries are attractive again with where rates are, and so that's a competitive pressure outside of the banking system. As well as, companies need to fund loan growth and economic expansion. It's a competitive market. It always is, but it's been a little bit more fierce as we turn the calendar. Got it. Makes sense. Maybe just one housekeeping question, just on the tax rate. Anything to note there? It looks maybe slightly elevated relative to the past this quarter. Yeah. Do you have anything about that? I think it's probably in this kind of 20%-22% range is our normal operating environment. We had some franchise tax, an excess tax that's kind of local state-related that picked up this quarter. That drove the higher number. There's community opportunities where we can invest in our communities that can move that number around a bit. We do those when the deals make sense. You can see that move around. That's what you saw late last year. We're pretty normal range here, maybe slightly lower on a go-forward basis. Got it. Appreciate it. Thanks so much for the time, guys. Thanks, Stephen. The next question comes from Brett Rabatin with StoneX. Please go ahead. Hey, guys. Good morning. Good morning, Brett. Brett. Wanted to start off with just a strategy question. You guys are now $16.5 billion in assets, headed to $20, I would guess, over the next couple of years organically. I know, when you think about FirstBank, it's very community bank oriented. I wanted just to get an idea, one, from a philosophy perspective, would you guys start to think about specialized lines of business, equipment finance, those kinds of things that might further drive the loan pipeline? Just secondly, you guys didn't talk about the First Bank Way. Wanted to see where you guys were in your evolution of that, and just if there's anything left that you guys were trying to do in terms of the franchise and how you do business. Yeah, Brett. I mean, I'm afraid maybe one of our conference rooms is bugged. You're hitting on some topics that have been heavy topics over the last two months. Let me see if I can just kind of run down and talk about some of those. You label us as community bank oriented, which I would give a strong indication that that continues, a strong message that that continues. That will continue. You heard us start off by talking about what our customers think about that. That was J.D. Power, but if you look at Greenwich Information, that's very strong as well. We think we have a formula there and sort of a special sauce in how we run, and our community orientation is really a key ingredient there. It's not the only ingredient, but it's a key ingredient. We'll continue that as we scale. I've spent a lot of time strategizing in the last 60 days. Part of that strategy is how do we maintain that as we scale the company? That's really important to us, and you're going to continue to see that. You also mentioned specialized lines of business. Part of what we're working through is how do we add some specialized lines of business. We have some today, MH, manufactured housing, being one, for instance, that we excel at. How do we continue to add some other lines of business like that and continue that community bank orientation, okay? That's an important part of the strategy. What you labeled as FB Way, sometimes internally, we'll talk about our customer-centric business model. Those two overlap and can even be used interchangeably sometimes. Again, heavy focus on that very thing. We'll continue to do that because that's just making us better. Again, literally yesterday, we sat around the conference room, we're talking about where we ranked in customer service. One of our goals for our executive team to hit our objectives for the year, we have to increase that score. Even though we're number one, we have to increase that score by a certain percentage. That is a continuous process for us on how we basically keep that community bank orientation and continue to scale the company. That's critical to us. I'll give you another line of business that we've added in the last 90 days, is the SBA line. Okay? We haven't had that as a line in the company. We've dabbled, we've got just a few small SBA things out there that we had before this, but that's now a line where we have an all-star that heads that, Lane Rhodes, who joined us. That's another example. You're going to see exactly what you described, where we continue that orientation, but we do continue to grow certain lines and some certain verticals. Okay. That's helpful. The other question I wanted to ask was just around, there's an obvious expectation that there's going to be some market disruption in the Southeast with some of the recent transactions. Chris, would you view M&A as too distracting from here? I've had some color from some banks saying that they think focusing organically and looking to take advantage of maybe some of the other acquisitions that have happened here recently is a bigger opportunity. I just wanted to see if your philosophy had changed much, if any, around M&A and potential opportunities, particularly in maybe newer markets like North Carolina, et cetera. Yeah, again, man, I'm afraid you have us bugged here because it's a frequent topic of conversation, is exactly that. With the organic opportunity, do we need to, or is it too distracting to do M&A? The answer for us is no, it's not. We are very conscious of distractions ourselves. That does cause us to look at it strategically a little differently than we traditionally looked at it, and probably causes us to be even more careful and picky, choosy about what we do, because it needs to be both strategically compelling and financially compelling for us. You have to be careful about markets, okay? We can generally keep distractions away from markets that don't have any involvement through overlap in a transaction. We can limit the distraction. Those are all the things we consider. We will still keep that arrow in our quiver, and we could exercise that on a transaction at any point. Okay. Great. I appreciate the color, guys. All right. Thanks, Brett. The next question comes from Steve Moss with Raymond James. Please go ahead. Good morning, guys. Good morning, Steve. I want to start here, just following up on the loan pipeline here that you guys spoke is stronger. Just kind of curious where you're seeing the pickup in demand by loan type, if you will? Yeah. Steve, I would say it's across the board, but I would say, I'll caveat that or a little bit more clear, it's more in operating businesses. That's really where we've been focused, is developing out that strength from a C&I perspective. If you look at where we've gotten smaller, a lot of that is kind of non-owner occupied CRE or construction over the last couple of years. Some of the pressure that we faced in payoffs this quarter and late last quarter was, if you think back that 2021 timeframe, a lot of growth out of the company, a lot of it was in that construction and non-owner occupied CRE space. You're seeing that kind of roll off. We're replacing it. We're still in those businesses and taking care of clients, and we still like those asset classes, but it's not growing at the same velocity. It's much more about operating businesses, and some owner-occupied real estate type of transactions. Okay, great. Appreciate that color there. Second question for me here, just on the margin. You talked about the core margin, just kind of curious as to where you're thinking, any updated thoughts, I should say, on purchase accounting accretion here for the upcoming quarters? Yeah, I think it's going to be in that same kind of 15-17, 18 basis point range. I don't think you'll see it go up, unless we get even faster payoffs. I think it's going to be pretty consistent here. Okay, excellent. One more question, just on capital here. You guys bought back late in the quarter with the pullback. Should we expect you guys to continue to be opportunistic? Sitting at 9.9% TCE, more favorable regulatory environment, do you guys press the gas on that a little bit more? Yeah. We'll continue to be opportunistic, when it comes to buybacks. We're watching the volatility there. We usually regard that as opportunistic, and we really haven't changed that stance. Okay. Well, great. I appreciate all the color here, and that's all my questions. Thank you very much, guys. Thanks, Steve. The next question comes from Catherine Mealor with KBW. Please go ahead. Thanks. Good morning. Good morning. All right, I've got one more on the margin, just on deposit cost. Do you have the spot rate of where deposit cost ended the quarter? Let's just say we are in a position where we don't have any more rate cuts until maybe the very end of the year, so basically no more for 2026. Do you think that your deposit costs increase from this kind of 2.80% interest-bearing level, or are you just more stable? Yeah. At 280 level 3. When we think about total new originations were 270. That's probably on the low end, honestly. Like you said, of interest-bearing 283. I think you probably see those increase a little bit, given where you have to acquire new customers, Catherine. The market rate is significantly higher to acquire new customers. The goal there is to translate that into relationships over time and full operating business, and then you get back to more of an equilibrium. There's a bit of a disconnect, reality-wise, of where you can fund the company, either through borrowing or brokered and wholesale, versus kind of where I'll call the consumer retail commercial market is. It's actually, I would say, significantly higher to go out and acquire new customers versus funding the bank. It's a balance. If rates are up or flat, Fed funds, I think you see competitive pressure pushing deposit costs modestly higher. Our goal is always to get the full relationship. Got it. That new deposit cost of 270, does that include non-interest-bearing, or that's just on new interest-bearings? That's inclusive. Okay. That's all in. All in, yeah. That's relative to your kind of 227. Your cost of new is still higher than, you know, where you are today. That's right. Which makes sense. Yeah. Yeah. Okay. Yeah. Okay. I will say this too, Catherine, just to clarify. The days, I think, of loading up on non-interest-bearing deposits and not paying your customers a lot of interest, we don't really see that as a long-term thing. We obviously want all the operating accounts we can, but we also want a fair value proposition. With all these fintechs and competitive market, we don't expect our customers to be asleep at the wheel, and we're not going to try to nickel-and-dime them to zero. Yeah. That's right. As a matter of fact, sometimes we'll even wake them up intentionally and say, "Hey, we'll give you a better deal." The days of those really cheap back books, we view that as quickly coming to an end, which changes a lot of competitive dynamics. Just viewing our window strategically on how we're thinking about it. By product type, where do you think you see the biggest growth in deposits? Is that just interest-bearing demand? Yeah, you've obviously been sitting in our treasury meetings and our pricing committee. We saw money market decrease this quarter because when we're talking about the aggressive nature of other rate offerings. Yeah, there's probably some work to do there just to get back to equilibrium on money market. CDs, we continue to see CD renewals, and new production CDs as a growth opportunity. We saw that in the back half of the year and through the quarter. We've been more in the short and long, kind of a barbell approach. We're seeing a lot of competition in that middle ground, which I'll call 12-15 months. CDs are an opportunity, but getting some of our money market business back is probably the biggest lever. That makes sense. Great. Thank you. Thanks, Catherine. Have a great day. As a reminder, if you would like to ask a question, please press star then one to join the question queue. The next question comes from Christopher Marinac with Brean Capital Research. Please go ahead. Hey, good morning, Chris and Michael. Can you talk about the growth of securities as another tool to grow NII? I know it's not the focus of loans and deposits as we are all talking about, but just curious if securities are a component of how you continue to grow revenue. Yeah. Good morning, Chris. The investment portfolio is about 9% of the balance sheet total assets. We've been as high in the past, that kind of 14% range. That really comes down to funding, in a lot of cases. There's not a whole lot of times where I sit around and say, "Hey, we have excess deposits." To go and invest in investment portfolio, we'd much rather deploy through organic growth opportunities. That certainly is a lever to do that. We've been mainly in kind of floating-rate, government-backed stuff from an investment portfolio perspective. It's been a higher-yielding asset than fixed-rate mortgages and things of that nature. We'll continue to do that. It's not top of the list. We want to be organic in nature. If we stick at 9%-10%, or even if it went down a bit and liquidity levels remained in that 11% on-balance-sheet liquidity range, I'd be a happy person. Mainly we're deploying through loan growth. `Yeah, Chris, I'll just add this. When we're looking at banks, when we're valuing banks, and we see wholesale funding and sometimes then wholesale assets on the balance sheet, we quickly discount that to zero. When we're thinking about our own company, we don't do that as a matter of practice. We think, hey, to be successful and to continue to be creating value, we've got to be adding what we call customer. That can take a lot of different forms, but I'll broadly call it customer assets and customer deposits. We think that's what we do, and if we don't continue to do that well, we won't continue to be able to sit at this table. There are times where we might leverage up for some specific reason, or, if we know something's coming or something's leaving, we will use that leverage. We keep a lot of dry powder there to use. We just don't typically use it for revenue growth purposes. When we think about our portfolio, we don't keep a very large investment portfolio, and basically, it's simply a liquidity vehicle for us. If you also look at it in there, it's very vanilla and liquid in terms of its marketability, because, again, that fits that same philosophy of we're really trying to plow it into the assets that we think really grow our shareholder value. Understood. Thank you both for that. Just a quick follow-up on new accounts that you're opening, as you look at it internally, do you see net new account growth, and is there sort of a general pace that you're looking for as the next several quarters and years play out? Yeah. We actually have been quite successful in growing consumer accounts over the past year. It's interesting, as we're going through some of this generational shift, I don't know what the youngest generation is now because I'm getting older, but I'm going to say adding millennials is a different structure, and you got to add a lot of those accounts for one baby boomer that may be passing away or what have you. That evolution of your accounts, you got to add a lot of smaller ones. We like that, actually. We like granular deposits and granular loans, so we're all for it. It just takes a little bit more time to grow your balances. The number of accounts has been quite good. The balance growth comes over a significantly longer period of time than adding $400,000-$500,000 deposit accounts, when they're coming in $2,000-$3,000 chunks. It's been positive. I'll also say, back to Catherine's question, we've seen some success in savings, in our savings account product, which is probably an odd thing for people externally to hear, but it helps add that younger generation. You got a savings account, it's got a companion checking account, and it's of interest to people that are not quite yet adults. It's worked well for families as people move into the stages of life. Yeah. Hey, Chris, I want to just add one thing there. We have had good success at growing accounts, and still, about half our deposits are retail. We have a lot of small balance accounts, which Michael said, we love that construction on our balance sheet and the granularity that gives us and all the positive things that go with that. One of the other things we have done, which is not easy to do, and I won't say we're perfect at it, but we feel like it gives us a leg up, is traditionally in banking, we've counted accounts. Even some banks have gotten in trouble for that in terms of how they did that and how they motivated folks to do that. We're very aware of that. We actually go through and define a relationship. We actually count relationships. Because you can add accounts, but frankly, some of them aren't very valuable, and they're not really a relationship. We have moved into relationship counting. It's paying some dividends, but we think it's going to pay big dividends as we roll forward. No, that's great stuff. Thank you both for getting into that detail, and we appreciate you hosting us all this morning. Yep. Thanks, Chris. This concludes our question-and answer session. I would like to turn the conference back over to Chris Holmes for any closing remarks. All right. Thank you all for joining us. We always appreciate your participation and your interest. Any further questions from either anybody in the investment community or analyst community, you can reach out to us directly. Everybody have a great day. Thanks. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker 7: Good morning everyone, and welcome to the FB Financial first quarter 2026 earnings call. Please note this event is being recorded. At this time, I'd like to turn the conference call over to Rachel Dereski with FB Financial. Please go ahead. Good morning everyone, and welcome to the FB Financial first quarter 2026 earnings call. good morning everyone and welcome to the fb financial first quarter 2026 earnings call Please note this event is being recorded. please note this event is being recorded At this time, I'd like to turn the conference call over to Rachel Dereski with FB Financial. at this time i'd like to turn the conference call over to rachel dereski with fb financial Please go ahead. please go ahead

Speaker 8: Good morning and welcome to FB Financial Corporation's first quarter 2026 earnings conference call. Hosting the call today from FB Financial are Chris Holmes, President and Chief Executive Officer, and Michael Mettee, Chief Operating and Financial Officer. Please note FB Financial's Earnings Release, supplemental financial information, and this morning's presentation are available on the investor relations page of the company's website at www.firstbankonline.com and on the Securities and Exchange Commission's website at www.sec.gov. Today's call is being recorded and will be available for replay on FB Financial's website approximately an hour after the conclusion of the call. At this time, all participants have been placed in a listen-only mode. The call will open for questions after the presentation. During the presentation, FB Financial may make comments which constitute forward-looking statements under the federal securities laws. Good morning and welcome to FB Financial Corporation's first quarter 2026 earnings conference call. good morning and welcome to fb financial corporation's first quarter 2026 earnings conference call Hosting the call today from FB Financial are Chris Holmes, President and Chief Executive Officer, and Michael Mettee, Chief Operating and Financial Officer. hosting the call today from fb financial are chris holmes president and chief executive officer and michael mettee chief operating and financial officer Please note FB Financial's Earnings Release, supplemental financial information, and this morning's presentation are available on the investor relations page of the company's website at www.firstbankonline.com and on the Securities and Exchange Commission's website at www.sec.gov. please note fb financial's earnings release supplemental financial information and this morning's presentation are available on the investor relations page of the company's website at www.firstbankonline.com and on the securities and exchange commission's website at www.sec.gov Today's call is being recorded and will be available for replay on FB Financial's website approximately an hour after the conclusion of the call. today's call is being recorded and will be available for replay on fb financial's website approximately an hour after the conclusion of the call At this time, all participants have been placed in a listen-only mode. at this time all participants have been placed in a listen-only mode The call will open for questions after the presentation. the call will open for questions after the presentation During the presentation, FB Financial may make comments which constitute forward-looking statements under the federal securities laws. during the presentation fb financial may make comments which constitute forward-looking statements under the federal securities laws Forward-looking statements are based on management's current expectations and assumptions and are subject to risks, uncertainties, and other factors that may cause actual results and performance or achievements of FB Financial to differ materially from any results expressed or implied by such forward-looking statements. Many of such factors are beyond FB Financial's ability to control or predict, and listeners are cautioned not to put undue reliance on such forward-looking statements. A more detailed description of these and other risks that may cause actual results to materially differ from expectations is contained in FB Financial's periodic and current reports filed with the SEC, including FB Financial's most recent Form 10-K. Except as required by law, FB Financial disclaims any obligation to update or revise any forward-looking statements contained in this presentation, whether as a result of new information, future events, or otherwise. Forward-looking statements are based on management's current expectations and assumptions and are subject to risks, uncertainties, and other factors that may cause actual results and performance or achievements of FB Financial to differ materially from any results expressed or implied by such forward-looking statements. forward-looking statements are based on management's current expectations and assumptions and are subject to risks uncertainties and other factors that may cause actual results and performance or achievements of fb financial to differ materially from any results expressed or implied by such forward-looking statements Many of such factors are beyond FB Financial's ability to control or predict, and listeners are cautioned not to put undue reliance on such forward-looking statements. many of such factors are beyond fb financial's ability to control or predict and listeners are cautioned not to put undue reliance on such forward-looking statements A more detailed description of these and other risks that may cause actual results to materially differ from expectations is contained in FB Financial's periodic and current reports filed with the SEC, including FB Financial's most recent Form 10-K. a more detailed description of these and other risks that may cause actual results to materially differ from expectations is contained in fb financial's periodic and current reports filed with the sec including fb financial's most recent form 10-k Except as required by law, FB Financial disclaims any obligation to update or revise any forward-looking statements contained in this presentation, whether as a result of new information, future events, or otherwise. except as required by law fb financial disclaims any obligation to update or revise any forward-looking statements contained in this presentation whether as a result of new information future events or otherwise In addition, these remarks may include certain non-GAAP financial measures as defined by SEC Regulation G. A presentation of the most directly comparable GAAP financial measures and a reconciliation of the non-GAAP measures to comparable GAAP measures is available in FB Financial's earnings release, supplemental financial information in this morning's presentation, which are all available on the investor relations page of the company's website at www.firstbankonline.com and on the SEC's website at www.sec.gov. I would now like to turn the presentation over to Mr. Chris Holmes, FB Financial's President and CEO. In addition, these remarks may include certain non-GAAP financial measures as defined by SEC Regulation G. in addition these remarks may include certain non-gaap financial measures as defined by sec regulation g A presentation of the most directly comparable GAAP financial measures and a reconciliation of the non-GAAP measures to comparable GAAP measures is available in FB Financial's earnings release, supplemental financial information in this morning's presentation, which are all available on the investor relations page of the company's website at www.firstbankonline.com and on the SEC's website at www.sec.gov. a presentation of the most directly comparable gaap financial measures and a reconciliation of the non-gaap measures to comparable gaap measures is available in fb financial's earnings release supplemental financial information in this morning's presentation which are all available on the investor relations page of the company's website at www.firstbankonline.com and on the sec's website at www.sec.gov I would now like to turn the presentation over to Mr. Chris Holmes, FB Financial's President and CEO. i would now like to turn the presentation over to mr chris holmes fb financial's president and ceo

Speaker 3: All right. Good morning. Thank you, Rachel. Thanks to everybody for joining the call this morning. Always thank you for your interest in FB Financial. I want to start today's call by calling attention to a distinguished award the company received recently and what it means to FirstBank. The bank received J.D. Power's Retail Banking Award in the South Central region for placing number one among the banks in the region for customer satisfaction. J.D. Power surveyed over 100,000 banking customers across our region, surveying them about their satisfaction with their primary bank. When the results were tabulated, FirstBank ranked number one on the list for overall customer satisfaction. FirstBank also ranked number one in the subcategories of client trust and quality of our people. What made this award even more gratifying was that we weren't even aware that our customers were being surveyed. All right. all right Good morning. good morning Thank you, Rachel. thank you rachel Thanks to everybody for joining the call this morning. thanks to everybody for joining the call this morning Always thank you for your interest in FB Financial. always thank you for your interest in fb financial I want to start today's call by calling attention to a distinguished award the company received recently and what it means to FirstBank. i want to start today's call by calling attention to a distinguished award the company received recently and what it means to firstbank The bank received J.D. the bank received j.d Power's Retail Banking Award in the South Central region for placing number one among the banks in the region for customer satisfaction. power's retail banking award in the south central region for placing number one among the banks in the region for customer satisfaction J.D. j.d Power surveyed over 100,000 banking customers across our region, surveying them about their satisfaction with their primary bank. power surveyed over 100,000 banking customers across our region surveying them about their satisfaction with their primary bank When the results were tabulated, FirstBank ranked number one on the list for overall customer satisfaction. when the results were tabulated firstbank ranked number one on the list for overall customer satisfaction FirstBank also ranked number one in the subcategories of client trust and quality of our people. firstbank also ranked number one in the subcategories of client trust and quality of our people What made this award even more gratifying was that we weren't even aware that our customers were being surveyed. what made this award even more gratifying was that we weren't even aware that our customers were being surveyed The ranking is a result of our natural service behavior and not something that resulted from any special preparation. As bank investors, we watch every basis point of margin, efficiency, return, et cetera, and every penny of EPS, where we can struggle to find effective relative measures of the actual driver of superior sustainable bank performance, which is our ability to attract, satisfy, and retain bank clients. This award is independent, tangible verification of what I've known about our team. That's when stacked against the competition, we win. I want to thank our clients who participated in the process and our associates who are the FirstBank story and who take such outstanding care of our clients. You are literally the best at what you do, and I'm proud to be on the team with you. With that, now let me get into the quarter. The ranking is a result of our natural service behavior and not something that resulted from any special preparation. the ranking is a result of our natural service behavior and not something that resulted from any special preparation As bank investors, we watch every basis point of margin, efficiency, return, et cetera, and every penny of EPS, where we can struggle to find effective relative measures of the actual driver of superior sustainable bank performance, which is our ability to attract, satisfy, and retain bank clients. as bank investors we watch every basis point of margin efficiency return et cetera and every penny of eps where we can struggle to find effective relative measures of the actual driver of superior sustainable bank performance which is our ability to attract satisfy and retain bank clients This award is independent, tangible verification of what I've known about our team. this award is independent tangible verification of what i've known about our team That's when stacked against the competition, we win. that's when stacked against the competition we win I want to thank our clients who participated in the process and our associates who are the FirstBank story and who take such outstanding care of our clients. i want to thank our clients who participated in the process and our associates who are the firstbank story and who take such outstanding care of our clients You are literally the best at what you do, and I'm proud to be on the team with you. you are literally the best at what you do and i'm proud to be on the team with you With that, now let me get into the quarter. with that now let me get into the quarter We reported EPS of $1.10 and adjusted EPS of $1.12 and have grown our tangible book value per share, excluding the impact of AOCI, at a compounded annual growth rate of 11.6% since our IPO back in 2016. Our net income was $57.5 million, or $58.3 million on an adjusted basis, and our pre-tax, pre-provision net revenue, or we may refer to as PPNR during the call, was $77.2 million, or $78.2 million on an adjusted basis. Even with two fewer days in the quarter, we were able to grow our pre-tax pre-provision net revenue versus the prior quarter. Revenue declined slightly during the quarter, but expenses had an even greater decrease to keep our net income and profitability metrics in line with our expectations. We kept our PPNR return on average assets near our benchmark range of 2%, coming in at 1.93% or 1.95% adjusted. We reported EPS of $1.10 and adjusted EPS of $1.12 and have grown our tangible book value per share, excluding the impact of AOCI, at a compounded annual growth rate of 11.6% since our IPO back in 2016. we reported eps of $1.10 and adjusted eps of $1.12 and have grown our tangible book value per share excluding the impact of aoci at a compounded annual growth rate of 11.6% since our ipo back in 2016 Our net income was $57.5 million, or $58.3 million on an adjusted basis, and our pre-tax, pre-provision net revenue, or we may refer to as PPNR during the call, was $77.2 million, or $78.2 million on an adjusted basis. our net income was $57.5 million or $58.3 million on an adjusted basis and our pre-tax pre-provision net revenue or we may refer to as ppnr during the call was $77.2 million or $78.2 million on an adjusted basis Even with two fewer days in the quarter, we were able to grow our pre-tax pre-provision net revenue versus the prior quarter. even with two fewer days in the quarter we were able to grow our pre-tax pre-provision net revenue versus the prior quarter Revenue declined slightly during the quarter, but expenses had an even greater decrease to keep our net income and profitability metrics in line with our expectations. revenue declined slightly during the quarter but expenses had an even greater decrease to keep our net income and profitability metrics in line with our expectations We kept our PPNR return on average assets near our benchmark range of 2%, coming in at 1.93% or 1.95% adjusted. we kept our ppnr return on average assets near our benchmark range of 2% coming in at 1.93% or 1.95% adjusted We're pleased with our returns, and as Michael will cover in his comments, our growth gained momentum during the quarter, giving us optimism about the remainder of the year. We're now a quarter of the way through 2026. We continue to believe it's a great time to be at FirstBank. Our strategic pillars of award-winning client experience, high associate engagement, operational efficiency, and elite financial performance are all working together to grow our franchise and position us for continued success. When you add that our geography is one of the best in the country and our size is optimal to allow for both capacity and agility, we're optimistic about our path to creating shareholder value, both short-term and long-term. Before I turn the call over to Michael, I do want to acknowledge that, like all of you, we're following the macro events of our times closely. We're pleased with our returns, and as Michael will cover in his comments, our growth gained momentum during the quarter, giving us optimism about the remainder of the year. we're pleased with our returns and as michael will cover in his comments our growth gained momentum during the quarter giving us optimism about the remainder of the year We're now a quarter of the way through 2026. we're now a quarter of the way through 2026 We continue to believe it's a great time to be at FirstBank. we continue to believe it's a great time to be at firstbank Our strategic pillars of award-winning client experience, high associate engagement, operational efficiency, and elite financial performance are all working together to grow our franchise and position us for continued success. our strategic pillars of award-winning client experience high associate engagement operational efficiency and elite financial performance are all working together to grow our franchise and position us for continued success When you add that our geography is one of the best in the country and our size is optimal to allow for both capacity and agility, we're optimistic about our path to creating shareholder value, both short-term and long-term. when you add that our geography is one of the best in the country and our size is optimal to allow for both capacity and agility we're optimistic about our path to creating shareholder value both short-term and long-term Before I turn the call over to Michael, I do want to acknowledge that, like all of you, we're following the macro events of our times closely. before i turn the call over to michael i do want to acknowledge that like all of you we're following the macro events of our times closely Most of these things, like geopolitical conflicts, technology disruptions, economic shocks, and interest rate volatility, are things that we have to react to versus exercise control over. What we do control is our position in preparation for a range of circumstances and risk scenarios with active and prudent management of our robust capital, robust liquidity, and our high reserve levels. We remain in a position of strength and believe that we have the ability to perform through the various economic cycles as they come. With that, I'll now turn the call over to our Chief Financial and Operating Officer, Michael Mettee, for some more color on the quarter. Most of these things, like geopolitical conflicts, technology disruptions, economic shocks, and interest rate volatility, are things that we have to react to versus exercise control over. most of these things like geopolitical conflicts technology disruptions economic shocks and interest rate volatility are things that we have to react to versus exercise control over What we do control is our position in preparation for a range of circumstances and risk scenarios with active and prudent management of our robust capital, robust liquidity, and our high reserve levels. what we do control is our position in preparation for a range of circumstances and risk scenarios with active and prudent management of our robust capital robust liquidity and our high reserve levels We remain in a position of strength and believe that we have the ability to perform through the various economic cycles as they come. we remain in a position of strength and believe that we have the ability to perform through the various economic cycles as they come With that, I'll now turn the call over to our Chief Financial and Operating Officer, Michael Mettee, for some more color on the quarter. with that i'll now turn the call over to our chief financial and operating officer michael mettee for some more color on the quarter

Speaker 6: Thank you, Chris, and good morning, everyone. I'll begin my comments this quarter with the balance sheet. While we started the year at a slower pace than we originally anticipated, with annualized loan growth of approximately 4%, deposit growth around 5%, we are seeing momentum build across the business in the right areas. Although these growth levels fell at the lower end of our internal expectations, the underlying activity and pipeline trends give us confidence that we are positioned to execute on the core fundamentals Chris outlined and drive improved results as the year progresses. During the first quarter, we began to see a more intense wave of competitive pressure, particularly around pricing. While profitability will always remain central to our decision-making, we're focused on striking the appropriate balance between disciplined returns and sustainable growth. Thank you, Chris, and good morning, everyone. thank you chris and good morning everyone I'll begin my comments this quarter with the balance sheet. i'll begin my comments this quarter with the balance sheet While we started the year at a slower pace than we originally anticipated, with annualized loan growth of approximately 4%, deposit growth around 5%, we are seeing momentum build across the business in the right areas. while we started the year at a slower pace than we originally anticipated with annualized loan growth of approximately 4% deposit growth around 5% we are seeing momentum build across the business in the right areas Although these growth levels fell at the lower end of our internal expectations, the underlying activity and pipeline trends give us confidence that we are positioned to execute on the core fundamentals Chris outlined and drive improved results as the year progresses. although these growth levels fell at the lower end of our internal expectations the underlying activity and pipeline trends give us confidence that we are positioned to execute on the core fundamentals chris outlined and drive improved results as the year progresses During the first quarter, we began to see a more intense wave of competitive pressure, particularly around pricing. during the first quarter we began to see a more intense wave of competitive pressure particularly around pricing While profitability will always remain central to our decision-making, we're focused on striking the appropriate balance between disciplined returns and sustainable growth. while profitability will always remain central to our decision-making we're focused on striking the appropriate balance between disciplined returns and sustainable growth Our strategy remains centered on building deep, long-term customer relationships that create enduring value for our shareholders. We will continue to be disciplined in acquiring new relationships and remain committed to protecting and strengthening our existing ones, always with a focus on delivering value to both our clients and shareholders. The company has the size and scale to compete effectively and win attractive deals when it makes sense to do so, and do not hesitate to act aggressively in competitive situations when warranted. Ultimately, our value proposition is not about being the low-price provider. It's about delivering peer-leading customer satisfaction through strong financial advice and trusted services. By keeping the client at the center of everything we do, we believe we will continue to drive improved profitability over time and create sustained long-term value for our shareholders. Our strategy remains centered on building deep, long-term customer relationships that create enduring value for our shareholders. our strategy remains centered on building deep long-term customer relationships that create enduring value for our shareholders We will continue to be disciplined in acquiring new relationships and remain committed to protecting and strengthening our existing ones, always with a focus on delivering value to both our clients and shareholders. we will continue to be disciplined in acquiring new relationships and remain committed to protecting and strengthening our existing ones always with a focus on delivering value to both our clients and shareholders The company has the size and scale to compete effectively and win attractive deals when it makes sense to do so, and do not hesitate to act aggressively in competitive situations when warranted. the company has the size and scale to compete effectively and win attractive deals when it makes sense to do so and do not hesitate to act aggressively in competitive situations when warranted Ultimately, our value proposition is not about being the low-price provider. ultimately our value proposition is not about being the low-price provider It's about delivering peer-leading customer satisfaction through strong financial advice and trusted services. it's about delivering peer-leading customer satisfaction through strong financial advice and trusted services By keeping the client at the center of everything we do, we believe we will continue to drive improved profitability over time and create sustained long-term value for our shareholders. by keeping the client at the center of everything we do we believe we will continue to drive improved profitability over time and create sustained long-term value for our shareholders On that front, March was our strongest month of the quarter, with upper single-digit loan growth and meaningful expansion in our loan pipeline. As we move through the second quarter, we're seeing the momentum continue with a portion of that activity beginning to translate into on-balance sheet growth. We expect second quarter balances to reflect continued improvement, with additional pipeline conversion extending into the third quarter and larger volumes building into the back half of the year. On a full year basis, we continue to expect both loan and deposit growth in the mid to high single-digit range, with growth increasingly weighted towards the second half as momentum builds. Turning to earnings for the quarter, pre-provision net revenue totaled $77.2 million, or $78.2 million on an adjusted basis, compared to $71.1 million in the prior quarter and $77.1 million on an adjusted basis. On that front, March was our strongest month of the quarter, with upper single-digit loan growth and meaningful expansion in our loan pipeline. on that front march was our strongest month of the quarter with upper single-digit loan growth and meaningful expansion in our loan pipeline As we move through the second quarter, we're seeing the momentum continue with a portion of that activity beginning to translate into on-balance sheet growth. as we move through the second quarter we're seeing the momentum continue with a portion of that activity beginning to translate into on-balance sheet growth We expect second quarter balances to reflect continued improvement, with additional pipeline conversion extending into the third quarter and larger volumes building into the back half of the year. we expect second quarter balances to reflect continued improvement with additional pipeline conversion extending into the third quarter and larger volumes building into the back half of the year On a full year basis, we continue to expect both loan and deposit growth in the mid to high single-digit range, with growth increasingly weighted towards the second half as momentum builds. on a full year basis we continue to expect both loan and deposit growth in the mid to high single-digit range with growth increasingly weighted towards the second half as momentum builds Turning to earnings for the quarter, pre-provision net revenue totaled $77.2 million, or $78.2 million on an adjusted basis, compared to $71.1 million in the prior quarter and $77.1 million on an adjusted basis. turning to earnings for the quarter pre-provision net revenue totaled $77.2 million or $78.2 million on an adjusted basis compared to $71.1 million in the prior quarter and $77.1 million on an adjusted basis Net income also improved quarter-over-quarter, despite the shorter reporting period, coming in at $57.5 million or $58.3 million on an adjusted basis. Our net interest margin for the quarter was 3.94%, representing a modest decline, driven primarily by balance sheet mix and the full quarter impact of rate cuts implemented late in the fourth quarter. Total loan yields for the quarter were 6.51%, with yields on new production toward the end of the quarter running a bit closer to 6.6%. On the deposit side, total costs declined to 2.27%, while rates on new production were approximately 2.7% around quarter end. Both loan and deposit yields were modestly lower than the prior quarter, reflecting benchmark rate cuts across the variable rate portions of our balance sheet. Net income also improved quarter-over-quarter, despite the shorter reporting period, coming in at $57.5 million or $58.3 million on an adjusted basis. net income also improved quarter-over-quarter despite the shorter reporting period coming in at $57.5 million or $58.3 million on an adjusted basis Our net interest margin for the quarter was 3.94%, representing a modest decline, driven primarily by balance sheet mix and the full quarter impact of rate cuts implemented late in the fourth quarter. our net interest margin for the quarter was 3.94% representing a modest decline driven primarily by balance sheet mix and the full quarter impact of rate cuts implemented late in the fourth quarter Total loan yields for the quarter were 6.51%, with yields on new production toward the end of the quarter running a bit closer to 6.6%. total loan yields for the quarter were 6.51% with yields on new production toward the end of the quarter running a bit closer to 6.6% On the deposit side, total costs declined to 2.27%, while rates on new production were approximately 2.7% around quarter end. on the deposit side total costs declined to 2.27% while rates on new production were approximately 2.7% around quarter end Both loan and deposit yields were modestly lower than the prior quarter, reflecting benchmark rate cuts across the variable rate portions of our balance sheet. both loan and deposit yields were modestly lower than the prior quarter reflecting benchmark rate cuts across the variable rate portions of our balance sheet As we move deeper into 2026, we expect some additional pressure on margin as competitive dynamics remain elevated and we continue to pursue targeted growth opportunities in our market. Based on current conditions, we would expect full year net interest margin, excluding loan accretion, to be in the range of 3.76%-3.8%, representing a modest decline from our prior guidance. We would expect second quarter margin to trend towards the lower end of that range before stabilizing as the year progresses. Finally, we would note that the interest rate environment remains uncertain, particularly around the timing and magnitude of future benchmark rate movements. As a slightly asset-sensitive balance sheet, changes in rates can be both favorable and unfavorable, depending on the direction and speed of those moves. As we move deeper into 2026, we expect some additional pressure on margin as competitive dynamics remain elevated and we continue to pursue targeted growth opportunities in our market. as we move deeper into 2026 we expect some additional pressure on margin as competitive dynamics remain elevated and we continue to pursue targeted growth opportunities in our market Based on current conditions, we would expect full year net interest margin, excluding loan accretion, to be in the range of 3.76%-3.8%, representing a modest decline from our prior guidance. based on current conditions we would expect full year net interest margin excluding loan accretion to be in the range of 3.76%-3.8% representing a modest decline from our prior guidance We would expect second quarter margin to trend towards the lower end of that range before stabilizing as the year progresses. we would expect second quarter margin to trend towards the lower end of that range before stabilizing as the year progresses Finally, we would note that the interest rate environment remains uncertain, particularly around the timing and magnitude of future benchmark rate movements. finally we would note that the interest rate environment remains uncertain particularly around the timing and magnitude of future benchmark rate movements As a slightly asset-sensitive balance sheet, changes in rates can be both favorable and unfavorable, depending on the direction and speed of those moves. as a slightly asset-sensitive balance sheet changes in rates can be both favorable and unfavorable depending on the direction and speed of those moves While our margin outlook assumes a continuation of current conditions, modest rate actions, either higher or lower than current levels, will impact some of the competitive and growth-related margin pressure we've outlined. We'll continue to actively manage the balance sheet and pricing strategy to position the company as effectively as possible across a range of potential scenarios. Non-interest income declined $2.4 million during the quarter, primarily driven by lower secondary mortgage volume, as well as absence of several non-recurring items recognized in the prior quarter, including a higher BOLI benefit payout. While our margin outlook assumes a continuation of current conditions, modest rate actions, either higher or lower than current levels, will impact some of the competitive and growth-related margin pressure we've outlined. We'll continue to actively manage the balance sheet and pricing strategy to position the company as effectively as possible across a range of potential scenarios. while our margin outlook assumes a continuation of current conditions modest rate actions either higher or lower than current levels will impact some of the competitive and growth-related margin pressure we've outlined. we'll continue to actively manage the balance sheet and pricing strategy to position the company as effectively as possible across a range of potential scenarios Non-interest income declined $2.4 million during the quarter, primarily driven by lower secondary mortgage volume, as well as absence of several non-recurring items recognized in the prior quarter, including a higher BOLI benefit payout. non-interest income declined $2.4 million during the quarter primarily driven by lower secondary mortgage volume as well as absence of several non-recurring items recognized in the prior quarter including a higher boli benefit payout In addition, the quarter reflected fewer calendar days relative to the prior period, which modestly impacted overall fee generation, particularly within mortgage-related activity. With mortgage, we saw a really strong start to the quarter, and that slowed as the quarter progressed due to the increased interest rate volatility and heightened uncertainty in the housing market and really the world economy. In addition, the quarter reflected fewer calendar days relative to the prior period, which modestly impacted overall fee generation, particularly within mortgage-related activity. in addition the quarter reflected fewer calendar days relative to the prior period which modestly impacted overall fee generation particularly within mortgage-related activity With mortgage, we saw a really strong start to the quarter, and that slowed as the quarter progressed due to the increased interest rate volatility and heightened uncertainty in the housing market and really the world economy. with mortgage we saw a really strong start to the quarter and that slowed as the quarter progressed due to the increased interest rate volatility and heightened uncertainty in the housing market and really the world economy Shifting rate expectations and broader market dynamics impacted borrower sentiment and transaction activity, which weighed on production as rates moved throughout the quarter. Mortgage revenue also tends to exhibit some seasonality, with activity typically building as we move further into the year. On the expense side, first quarter non-interest expense totaled $95.2 million, representing an approximate 11% decline from the prior quarter, or roughly 7% on an adjusted basis. Personnel costs moderated as compensation-related accruals returned to a more normalized run rate, and merger and integration expenses declined as we completed the majority of costs associated with the Southern States acquisition. We also saw quarter-over-quarter reductions across several other expense categories as the year reset and teams maintained strong expense discipline. Shifting rate expectations and broader market dynamics impacted borrower sentiment and transaction activity, which weighed on production as rates moved throughout the quarter. shifting rate expectations and broader market dynamics impacted borrower sentiment and transaction activity which weighed on production as rates moved throughout the quarter Mortgage revenue also tends to exhibit some seasonality, with activity typically building as we move further into the year. mortgage revenue also tends to exhibit some seasonality with activity typically building as we move further into the year On the expense side, first quarter non-interest expense totaled $95.2 million, representing an approximate 11% decline from the prior quarter, or roughly 7% on an adjusted basis. on the expense side first quarter non-interest expense totaled $95.2 million representing an approximate 11% decline from the prior quarter or roughly 7% on an adjusted basis Personnel costs moderated as compensation-related accruals returned to a more normalized run rate, and merger and integration expenses declined as we completed the majority of costs associated with the Southern States acquisition. personnel costs moderated as compensation-related accruals returned to a more normalized run rate and merger and integration expenses declined as we completed the majority of costs associated with the southern states acquisition We also saw quarter-over-quarter reductions across several other expense categories as the year reset and teams maintained strong expense discipline. we also saw quarter-over-quarter reductions across several other expense categories as the year reset and teams maintained strong expense discipline As a result, our efficiency ratio for the quarter was 55.2%, or 54.3% on an adjusted basis, driven in part by our Banking segment, which delivered an adjusted efficiency ratio of 50.9%. Looking ahead, we remain focused on disciplined expense management, with Banking segment non-interest expense expected to range between $325 million and $335 million for the year, and a total company efficiency ratio anticipated to remain in the low 50% range. Turning to credit, our provision expense for the quarter totaled approximately $3 million, with our allowance coverage ratio ending the period at 1.49% of loans held for investment. Net charge-offs were modest at an annualized rate of 11 basis points, which was a slight uptick for us, but were driven by a small number of isolated borrower-specific situations rather than any deterioration tied to broader economic stress. As a result, our efficiency ratio for the quarter was 55.2%, or 54.3% on an adjusted basis, driven in part by our Banking segment, which delivered an adjusted efficiency ratio of 50.9%. as a result our efficiency ratio for the quarter was 55.2% or 54.3% on an adjusted basis driven in part by our banking segment which delivered an adjusted efficiency ratio of 50.9% Looking ahead, we remain focused on disciplined expense management, with Banking segment non-interest expense expected to range between $325 million and $335 million for the year, and a total company efficiency ratio anticipated to remain in the low 50% range. looking ahead we remain focused on disciplined expense management with banking segment non-interest expense expected to range between $325 million and $335 million for the year and a total company efficiency ratio anticipated to remain in the low 50% range Turning to credit, our provision expense for the quarter totaled approximately $3 million, with our allowance coverage ratio ending the period at 1.49% of loans held for investment. turning to credit our provision expense for the quarter totaled approximately $3 million with our allowance coverage ratio ending the period at 1.49% of loans held for investment Net charge-offs were modest at an annualized rate of 11 basis points, which was a slight uptick for us, but were driven by a small number of isolated borrower-specific situations rather than any deterioration tied to broader economic stress. net charge-offs were modest at an annualized rate of 11 basis points which was a slight uptick for us but were driven by a small number of isolated borrower-specific situations rather than any deterioration tied to broader economic stress In evaluating the allowance for the quarter, we gave additional consideration to potential macroeconomic events stemming from the conflict in the Middle East. We reviewed the most relevant economic forecast, assessed our portfolio for direct exposure to the recent increase in energy prices. While it remains early to fully understand the broader downstream impact of operating companies, our analysis focused on a limited set of industries most sensitive to near-term energy price shocks. Our exposure to those sectors remains minimal, and we believe our reserve levels are appropriate given the current risk profile of the portfolio. With respect to capital, we continue to be in a very strong position, supported by solid capital ratios and a robust liquidity profile that provide meaningful flexibility. During the quarter, we were opportunistic in repurchasing shares amid periods of market volatility, and we remain well-positioned to deploy capital thoughtfully as opportunities present themselves. In evaluating the allowance for the quarter, we gave additional consideration to potential macroeconomic events stemming from the conflict in the Middle East. in evaluating the allowance for the quarter we gave additional consideration to potential macroeconomic events stemming from the conflict in the middle east We reviewed the most relevant economic forecast, assessed our portfolio for direct exposure to the recent increase in energy prices. we reviewed the most relevant economic forecast assessed our portfolio for direct exposure to the recent increase in energy prices While it remains early to fully understand the broader downstream impact of operating companies, our analysis focused on a limited set of industries most sensitive to near-term energy price shocks. while it remains early to fully understand the broader downstream impact of operating companies our analysis focused on a limited set of industries most sensitive to near-term energy price shocks Our exposure to those sectors remains minimal, and we believe our reserve levels are appropriate given the current risk profile of the portfolio. our exposure to those sectors remains minimal and we believe our reserve levels are appropriate given the current risk profile of the portfolio With respect to capital, we continue to be in a very strong position, supported by solid capital ratios and a robust liquidity profile that provide meaningful flexibility. with respect to capital we continue to be in a very strong position supported by solid capital ratios and a robust liquidity profile that provide meaningful flexibility During the quarter, we were opportunistic in repurchasing shares amid periods of market volatility, and we remain well- positioned to deploy capital thoughtfully as opportunities present themselves. during the quarter we were opportunistic in repurchasing shares amid periods of market volatility and we remain well- positioned to deploy capital thoughtfully as opportunities present themselves Our capital ratios continue to reflect that strength with a common equity Tier 1 ratio of 11.5%, a Tier 1 leverage ratio of 10.4%, and total risk-based capital of 13.4%. This strong capital foundation allows us to remain flexible in supporting organic growth, pursuing strategic opportunities, and returning capital to shareholders where appropriate. In closing, I want to echo Chris' congratulations to our team on earning the J.D. Power recognition. This award is a direct reflection of our associates' commitment to our core values and the strength of our franchise, and it reinforces our focus on delivering consistent value to our customers, shareholders, and communities. With that, I'll turn the call back over to Chris. Our capital ratios continue to reflect that strength with a common equity Tier 1 ratio of 11.5%, a Tier 1 leverage ratio of 10.4%, and total risk-based capital of 13.4%. our capital ratios continue to reflect that strength with a common equity tier 1 ratio of 11.5% a tier 1 leverage ratio of 10.4% and total risk-based capital of 13.4% This strong capital foundation allows us to remain flexible in supporting organic growth, pursuing strategic opportunities, and returning capital to shareholders where appropriate. this strong capital foundation allows us to remain flexible in supporting organic growth pursuing strategic opportunities and returning capital to shareholders where appropriate In closing, I want to echo Chris' congratulations to our team on earning the J.D. in closing i want to echo chris' congratulations to our team on earning the j.d Power recognition. power recognition This award is a direct reflection of our associates' commitment to our core values and the strength of our franchise, and it reinforces our focus on delivering consistent value to our customers, shareholders, and communities. this award is a direct reflection of our associates' commitment to our core values and the strength of our franchise and it reinforces our focus on delivering consistent value to our customers shareholders and communities With that, I'll turn the call back over to Chris. with that i'll turn the call back over to chris

Speaker 3: All right. Thanks for the call, Michael. Thanks again to everyone joining the call this morning and for your interest in FB Financial. Operator, at this time, we'd like to open the line for questions. All right. all right Thanks for the call, Michael. thanks for the call michael Thanks again to everyone joining the call this morning and for your interest in FB Financial. thanks again to everyone joining the call this morning and for your interest in fb financial Operator, at this time, we'd like to open the line for questions. operator at this time we'd like to open the line for questions

Speaker 7: We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Dave Rochester with Cantor. Please go ahead. We will now begin the question- and- answer session. we will now begin the question- and- answer session To ask a question, you may press star then one on your touch-tone phone. to ask a question you may press star then one on your touch-tone phone If you are using a speakerphone, please pick up your handset before pressing the keys. if you are using a speakerphone please pick up your handset before pressing the keys If at any time your question has been addressed and you would like to withdraw your question, please press star then two. if at any time your question has been addressed and you would like to withdraw your question please press star then two At this time, we will pause momentarily to assemble our roster. at this time we will pause momentarily to assemble our roster The first question today comes from Dave Rochester with Cantor. the first question today comes from dave rochester with cantor Please go ahead. please go ahead

Speaker 5: Hey, good morning, guys, and congrats on the award. That sounded very impressive. Hey, good morning, guys, and congrats on the award. hey good morning guys and congrats on the award That sounded very impressive. that sounded very impressive

Speaker 3: Good morning, Dave. Thanks very much. Good morning, Dave. good morning dave Thanks very much. thanks very much

Speaker 5: Hey, Michael, your comments on the March momentum on loan growth and the guide for the year sounded positive, but it sounds like you're also expecting those competitive pressures to continue. I was wondering where you're seeing the bulk of those pressures coming from. Is it larger banks, smaller banks? Is there any variance by market that's noticeable? Are you assuming more elevated paydown activity to continue as well? I guess you'll just originate more to offset that to get to that mid- to high-single-digit range. Just any thoughts there would be great. Hey, Michael, your comments on the March momentum on loan growth and the guide for the year sounded positive, but it sounds like you're also expecting those competitive pressures to continue. hey michael your comments on the march momentum on loan growth and the guide for the year sounded positive but it sounds like you're also expecting those competitive pressures to continue I was wondering where you're seeing the bulk of those pressures coming from. i was wondering where you're seeing the bulk of those pressures coming from Is it larger banks, smaller banks? is it larger banks smaller banks Is there any variance by market that's noticeable? is there any variance by market that's noticeable Are you assuming more elevated paydown activity to continue as well? are you assuming more elevated paydown activity to continue as well I guess you'll just originate more to offset that to get to that mid- to high-single-digit range. i guess you'll just originate more to offset that to get to that mid- to high-single-digit range Just any thoughts there would be great. just any thoughts there would be great

Speaker 6: Yeah. Good morning, Dave. Some of the optimism, right, is the pipeline continues to build. You can see the closing dates in sight for a lot of those deals. I would say on the loan side, competitive pressure is generally larger institutions. We're seeing it really across the board. Nashville is obviously pretty competitive, but we're seeing it in a lot of our large metro markets, whether that's Birmingham, Huntsville, Knoxville, Memphis. We saw some large payoffs in Memphis where competition took us out on some deals this quarter. It really is across the board. On the deposit side, I would actually say it's both large and smaller. We see community banks that have gotten really aggressive, specifically in the 12-month CD space, even interest checking rates that will make you blush a little bit. Yeah. yeah Good morning, Dave. good morning dave Some of the optimism, right, is the pipeline continues to build. some of the optimism right is the pipeline continues to build You can see the closing dates in sight for a lot of those deals. you can see the closing dates in sight for a lot of those deals I would say on the loan side, competitive pressure is generally larger institutions. i would say on the loan side competitive pressure is generally larger institutions We're seeing it really across the board. we're seeing it really across the board Nashville is obviously pretty competitive, but we're seeing it in a lot of our large metro markets, whether that's Birmingham, Huntsville, Knoxville, Memphis. nashville is obviously pretty competitive but we're seeing it in a lot of our large metro markets whether that's birmingham huntsville knoxville memphis We saw some large payoffs in Memphis where competition took us out on some deals this quarter. we saw some large payoffs in memphis where competition took us out on some deals this quarter It really is across the board. it really is across the board On the deposit side, I would actually say it's both large and smaller. on the deposit side i would actually say it's both large and smaller We see community banks that have gotten really aggressive, specifically in the 12-month CD space, even interest checking rates that will make you blush a little bit. we see community banks that have gotten really aggressive specifically in the 12-month cd space even interest checking rates that will make you blush a little bit For the larger institutions, we're seeing money market rates well above 4% from regional banks that actually we haven't seen advertise and market in quite a while. I'd say it's coming from both sides. The optimism is the team has put in the work, has been working with our clients, both our existing clients and new prospects. There's a lot of kind of economic excitement. Even with everything going on in the world, people are pretty positive about the economic environment. Deal flow is happening, and I would say that's across the company, whether that's in our communities of 7,000 people or our metros of 4 million people. For the larger institutions, we're seeing money market rates well above 4% from regional banks that actually we haven't seen advertise and market in quite a while. for the larger institutions we're seeing money market rates well above 4% from regional banks that actually we haven't seen advertise and market in quite a while I'd say it's coming from both sides. i'd say it's coming from both sides The optimism is the team has put in the work, has been working with our clients, both our existing clients and new prospects. the optimism is the team has put in the work has been working with our clients both our existing clients and new prospects There's a lot of kind of economic excitement. there's a lot of kind of economic excitement Even with everything going on in the world, people are pretty positive about the economic environment. even with everything going on in the world people are pretty positive about the economic environment Deal flow is happening, and I would say that's across the company, whether that's in our communities of 7,000 people or our metros of 4 million people. deal flow is happening and i would say that's across the company whether that's in our communities of 7,000 people or our metros of 4 million people

Speaker 3: Yeah. Dave, you mentioned paydowns, and we've seen some of those both second half of last year and into this year, and do we think that'll continue? We do. There will be some of that. Michael mentioned a couple of payoffs. We'll continue to see some of those. It's okay when we know about them. It's the unexpected ones that get you. We do expect to continue to see those. As you've heard kind of where the pipeline is and what things look like, we're considering that as we're talking about net growth. Yeah. yeah Dave, you mentioned paydowns, and we've seen some of those both second half of last year and into this year, and do we think that'll continue? dave you mentioned paydowns and we've seen some of those both second half of last year and into this year and do we think that'll continue We do. we do There will be some of that. there will be some of that Michael mentioned a couple of payoffs. michael mentioned a couple of payoffs We'll continue to see some of those. we'll continue to see some of those It's okay when we know about them. it's okay when we know about them It's the unexpected ones that get you. it's the unexpected ones that get you We do expect to continue to see those. we do expect to continue to see those As you've heard kind of where the pipeline is and what things look like, we're considering that as we're talking about net growth. as you've heard kind of where the pipeline is and what things look like we're considering that as we're talking about net growth

Speaker 5: Okay, great. That's great color, guys. Appreciate that. Maybe just one more, just on the talent pipeline. Obviously, a lot of disruption in the market, you guys have talked about this before. Seems like a good opportunity, but of course, everybody's trying to retain their people. Can you just give us an update on what you're seeing there, the dynamics with conversations that are going on right now, and how confident are you guys that you might be able to pick up some value add there over the rest of the year? Thanks. Okay, great. okay great That's great color, guys. that's great color guys Appreciate that. appreciate that Maybe just one more, just on the talent pipeline. maybe just one more just on the talent pipeline Obviously, a lot of disruption in the market, you guys have talked about this before. obviously a lot of disruption in the market you guys have talked about this before Seems like a good opportunity, but of course, everybody's trying to retain their people. seems like a good opportunity but of course everybody's trying to retain their people Can you just give us an update on what you're seeing there, the dynamics with conversations that are going on right now, and how confident are you guys that you might be able to pick up some value add there over the rest of the year? can you just give us an update on what you're seeing there the dynamics with conversations that are going on right now and how confident are you guys that you might be able to pick up some value add there over the rest of the year Thanks. thanks

Speaker 6: Yeah. It's a daily topic here, Dave, right, is kind of offense and defense with regard to talent. I'd say conversations have heated up. We added, let's say, 15 revenue producers in the first quarter. Yet we also lost a couple, and some of that is people going to other institutions, and some of it's retirement, things like that. These are really waterfall events. It's not necessarily who you think is acquiring your talent, but when one person moves, it opens up a door for someone else. You're constantly trying to keep your key players in your key markets, and that's both large and small, too. I think a lot of it people equate to, I'll call it Nashville or like a Huntsville, but it's happening across the board, in places like Jackson, Tennessee, Birmingham, Atlanta. Feel good about the conversations. Yeah. yeah It's a daily topic here, Dave, right, is kind of offense and defense with regard to talent. it's a daily topic here dave right is kind of offense and defense with regard to talent I'd say conversations have heated up. i'd say conversations have heated up We added, let's say, 15 revenue producers in the first quarter. we added let's say 15 revenue producers in the first quarter Yet we also lost a couple, and some of that is people going to other institutions, and some of it's retirement, things like that. yet we also lost a couple and some of that is people going to other institutions and some of it's retirement things like that These are really waterfall events. these are really waterfall events It's not necessarily who you think is acquiring your talent, but when one person moves, it opens up a door for someone else. it's not necessarily who you think is acquiring your talent but when one person moves it opens up a door for someone else You're constantly trying to keep your key players in your key markets, and that's both large and small, too. you're constantly trying to keep your key players in your key markets and that's both large and small too I think a lot of it people equate to, I'll call it Nashville or like a Huntsville, but it's happening across the board, in places like Jackson, Tennessee, Birmingham, Atlanta. i think a lot of it people equate to i'll call it nashville or like a huntsville but it's happening across the board in places like jackson tennessee birmingham atlanta Feel good about the conversations. feel good about the conversations We're hot and heavy on a lot of recruiting. It's more important to me that we have the right people that fit our culture and our business opportunities versus putting numbers on a page. Even though I just quoted 15, it's much more important that those were the right people. That's where we continue to be focused, and we think we'll get more than our fair share of those right people as we move forward. We're hot and heavy on a lot of recruiting. we're hot and heavy on a lot of recruiting It's more important to me that we have the right people that fit our culture and our business opportunities versus putting numbers on a page. it's more important to me that we have the right people that fit our culture and our business opportunities versus putting numbers on a page Even though I just quoted 15, it's much more important that those were the right people. even though i just quoted 15 it's much more important that those were the right people That's where we continue to be focused, and we think we'll get more than our fair share of those right people as we move forward. that's where we continue to be focused and we think we'll get more than our fair share of those right people as we move forward

Speaker 5: On a net basis, that sounds really positive in terms of the adds that you just brought in in the first quarter. Just curious, what areas are they in? Are they primarily loan producers, deposit guys? Is it commercial? Where are you seeing those adds? On a net basis, that sounds really positive in terms of the adds that you just brought in in the first quarter. on a net basis that sounds really positive in terms of the adds that you just brought in in the first quarter Just curious, what areas are they in? just curious what areas are they in Are they primarily loan producers, deposit guys? are they primarily loan producers deposit guys Is it commercial? is it commercial Where are you seeing those adds? where are you seeing those adds

Speaker 6: Yeah. One point of clarity when I'm recruiting is I expect all our bankers to be bankers, loans and deposits. Generally not bringing in just loan people. Sometimes bring in just deposit people. Even those are equipped to take care of their clients. It's eight or so relationship managers, couple mortgage people, and a couple people that are focused really on consumer and small business relationship development. We do have a couple, I guess, loan-heavy businesses, right? Yeah, it's positive. We think we can continue the momentum. Yeah. yeah One point of clarity when I'm recruiting is I expect all our bankers to be bankers, loans and deposits. one point of clarity when i'm recruiting is i expect all our bankers to be bankers loans and deposits Generally not bringing in just loan people. generally not bringing in just loan people Sometimes bring in just deposit people. sometimes bring in just deposit people Even those are equipped to take care of their clients. even those are equipped to take care of their clients It's eight or so relationship managers, couple mortgage people, and a couple people that are focused really on consumer and small business relationship development. it's eight or so relationship managers couple mortgage people and a couple people that are focused really on consumer and small business relationship development We do have a couple, I guess, loan-heavy businesses, right? we do have a couple i guess loan-heavy businesses right Yeah, it's positive. yeah it's positive We think we can continue the momentum. we think we can continue the momentum

Speaker 3: Yeah. David, I think it's always, I think, a topic, and it's a little like the customer service topic I talked about. It's important. One thing I would say about this one, it's kind of hard to get relative measures on talent because folks look at it differently. For us, it's become something that we know that folks want to try to get their arms around, but it's not really a key performance metric for us. We don't have a goal where we say we're going to hire this many this quarter, or this many the next quarter. We're looking for the right people at the right time, and there is a lot of movement. Yeah. yeah David, I think it's always, I think, a topic, and it's a little like the customer service topic I talked about. david i think it's always i think a topic and it's a little like the customer service topic i talked about It's important. it's important One thing I would say about this one, it's kind of hard to get relative measures on talent because folks look at it differently. one thing i would say about this one it's kind of hard to get relative measures on talent because folks look at it differently For us, it's become something that we know that folks want to try to get their arms around, but it's not really a key performance metric for us. for us it's become something that we know that folks want to try to get their arms around but it's not really a key performance metric for us We don't have a goal where we say we're going to hire this many this quarter, or this many the next quarter. we don't have a goal where we say we're going to hire this many this quarter or this many the next quarter We're looking for the right people at the right time, and there is a lot of movement. we're looking for the right people at the right time and there is a lot of movement The one thing I would say is probably more movement and more recruiting going on, particularly in our metropolitan markets, but Michael said even in some of our smaller markets than we've seen across the board. Typically, you see people going from smaller banks to larger banks, but we're seeing some larger banks, some much larger than we are, that are coming in and recruiting talent from banks even smaller than we are. I think it's an interesting time. Again, Michael said it. You have to play offense and defense all the time, and defense is best played by making sure you've got a great place to work, making sure you've got engaged folks, and making sure that you're taking good care of them. That's as important as anything. That's how we view it. The one thing I would say is probably more movement and more recruiting going on, particularly in our metropolitan markets, but Michael said even in some of our smaller markets than we've seen across the board. the one thing i would say is probably more movement and more recruiting going on particularly in our metropolitan markets but michael said even in some of our smaller markets than we've seen across the board Typically, you see people going from smaller banks to larger banks, but we're seeing some larger banks, some much larger than we are, that are coming in and recruiting talent from banks even smaller than we are. typically you see people going from smaller banks to larger banks but we're seeing some larger banks some much larger than we are that are coming in and recruiting talent from banks even smaller than we are I think it's an interesting time. i think it's an interesting time Again, Michael said it. again michael said it You have to play offense and defense all the time, and defense is best played by making sure you've got a great place to work, making sure you've got engaged folks, and making sure that you're taking good care of them. you have to play offense and defense all the time and defense is best played by making sure you've got a great place to work making sure you've got engaged folks and making sure that you're taking good care of them That's as important as anything. that's as important as anything That's how we view it. that's how we view it

Speaker 5: All right. Great. Thank you, guys. I appreciate all the color. All right. all right Great. great Thank you, guys. I appreciate all the color. thank you guys. i appreciate all the color

Speaker 6: Sure. Sure. sure Thanks, Dave. Thanks, Dave. thanks dave

Speaker 7: The next question comes from Russell Gunther with Stephens. Please go ahead. The next question comes from Russell Gunther with Stephens. the next question comes from russell gunther with stephens Please go ahead. please go ahead

Speaker 9: Hey, good morning, guys. Hey, good morning, guys. hey good morning guys

Speaker 3: Good morning, Russell. Good morning, Russell. good morning russell

Speaker 6: Morning, Russell. Morning, Russell. morning russell

Speaker 9: Morning, Chris. Morning, Michael. I wanted to ask on the expense side of things. Really strong first quarter results. You guys have reiterated the Banking segment expense guide for the year. It would just be helpful to get some color in terms of what's driving that sort of pickup over the course of the year. Morning, Chris. morning chris morning Morning, Michael. chris morning michael I wanted to ask on the expense side of things. i wanted to ask on the expense side of things Really strong first quarter results. really strong first quarter results You guys have reiterated the Banking segment expense guide for the year. you guys have reiterated the banking segment expense guide for the year It would just be helpful to get some color in terms of what's driving that sort of pickup over the course of the year. it would just be helpful to get some color in terms of what's driving that sort of pickup over the course of the year

Speaker 6: Yeah. There's a dose of expectation around performance picking up. We're a performance-based company when it comes to compensation. We want to expect peer-leading returns, and so that drives that number a little bit higher as we look out over the year. Some of that'll come with growth there, Russell. There's not any expectations of huge technology investments or anything like that. It's more just maintaining our run-rate expectations and performance-based comp-type stuff moving higher throughout the year. Yeah. yeah There's a dose of expectation around performance picking up. there's a dose of expectation around performance picking up We're a performance-based company when it comes to compensation. we're a performance-based company when it comes to compensation We want to expect peer-leading returns, and so that drives that number a little bit higher as we look out over the year. we want to expect peer-leading returns and so that drives that number a little bit higher as we look out over the year Some of that'll come with growth there, Russell. some of that'll come with growth there russell There's not any expectations of huge technology investments or anything like that. there's not any expectations of huge technology investments or anything like that It's more just maintaining our run-rate expectations and performance-based comp-type stuff moving higher throughout the year. it's more just maintaining our run-rate expectations and performance-based comp-type stuff moving higher throughout the year

Speaker 9: Okay. Thanks, Michael. Just an adjacent follow-up. I'm curious, deal synergies were fully realized this quarter. In aggregate, did they come in in line with what you were expecting or maybe better than modeled? Bigger picture, what's a good kind of core expense growth rate or range to think about for FBK? Okay. okay Thanks, Michael. thanks michael Just an adjacent follow-up. just an adjacent follow-up I'm curious, deal synergies were fully realized this quarter. i'm curious deal synergies were fully realized this quarter In aggregate, did they come in in line with what you were expecting or maybe better than modeled? in aggregate did they come in in line with what you were expecting or maybe better than modeled Bigger picture, what's a good kind of core expense growth rate or range to think about for FBK? bigger picture what's a good kind of core expense growth rate or range to think about for fbk

Speaker 6: Yeah. Actually, I would say from a combination perspective, we landed pretty much right on top of our deal expense number. Maybe ±$100,000 or $200,000 or so. Yeah. yeah Actually, I would say from a combination perspective, we landed pretty much right on top of our deal expense number. actually i would say from a combination perspective we landed pretty much right on top of our deal expense number Maybe ±$100,000 or $200,000 or so. maybe ±$100,000 or $200,000 or so

Speaker 3: It was really close, except on just a shade. As Michael said, the difference is really immaterial because it's like on a fairly large number, it's down less than a million bucks. I actually think it may be just a hair under, but it's right on the number. It was really close, except on just a shade. it was really close except on just a shade As Michael said, the difference is really immaterial because it's like on a fairly large number, it's down less than a million bucks. as michael said the difference is really immaterial because it's like on a fairly large number it's down less than a million bucks I actually think it may be just a hair under, but it's right on the number. i actually think it may be just a hair under but it's right on the number

Speaker 6: Yeah. I'd say we haven't done a real merger in five years. Yeah. yeah I'd say we haven't done a real merger in five years. i'd say we haven't done a real merger in five years

Speaker 3: That's right. That's right. that's right

Speaker 6: It's good to kind of dust that off and resharpen the knife a little bit. Yeah, we're around expectations. I think the proof, right, Russell, is getting to that kind of 50% range by year-end, as we continue to efficiency ratio to year-end as we get to the combined company, make sure the revenue engine's still going, which is really important. When you say synergy, I think about revenue as well, and maintaining our ability to grow in our legacy Southern States markets. Yeah, I think we're in a good spot there. I'd say, 4%-5% kind of core expense growth as you look forward, if I think about 2027, which is a long way away. That would not include back to Dave's question, talent acquisition and opportunities to really add teams and scale. It's good to kind of dust that off and resharpen the knife a little bit. it's good to kind of dust that off and resharpen the knife a little bit Yeah, we're around expectations. yeah we're around expectations I think the proof, right, Russell, is getting to that kind of 50% range by year-end, as we continue to efficiency ratio to year-end as we get to the combined company, make sure the revenue engine's still going, which is really important. i think the proof right russell is getting to that kind of 50% range by year-end as we continue to efficiency ratio to year-end as we get to the combined company make sure the revenue engine's still going which is really important When you say synergy, I think about revenue as well, and maintaining our ability to grow in our legacy Southern States markets. when you say synergy i think about revenue as well and maintaining our ability to grow in our legacy southern states markets Yeah, I think we're in a good spot there. yeah i think we're in a good spot there I'd say, 4%-5% kind of core expense growth as you look forward, if I think about 2027, which is a long way away. i'd say 4%-5% kind of core expense growth as you look forward if i think about 2027 which is a long way away That would not include back to Dave's question, talent acquisition and opportunities to really add teams and scale. that would not include back to dave's question talent acquisition and opportunities to really add teams and scale We'll maintain our expense discipline as we kind of look forward. We'll maintain our expense discipline as we kind of look forward. we'll maintain our expense discipline as we kind of look forward

Speaker 9: Got it. Okay. Thank you. Just last question for me would be circling back to the loan growth side of things, the mid versus high single digits. What are the largest drivers that would get you to the high end versus the low end? Got it. got it Okay. okay Thank you. thank you Just last question for me would be circling back to the loan growth side of things, the mid versus high single digits. just last question for me would be circling back to the loan growth side of things the mid versus high single digits What are the largest drivers that would get you to the high end versus the low end? what are the largest drivers that would get you to the high end versus the low end

Speaker 6: Yeah. Some of it's just the time of the quarter, I guess. If you think about the year, it is a competitive environment. People step in, other companies step in, and sometimes, we'll get really aggressive and some customers are more price sensitive than others. You can see large deals move one way or the other. Our pipeline, when I look at it on confidence interval, we're pretty confident about where we are. You could see some payoffs come in, like Chris said, the unexpected ones, which you hope doesn't happen. If you're really servicing your clients, you should know, but sometimes we're all surprised. Yeah. yeah Some of it's just the time of the quarter, I guess. some of it's just the time of the quarter i guess If you think about the year, it is a competitive environment. if you think about the year it is a competitive environment People step in, other companies step in, and sometimes, we'll get really aggressive and some customers are more price sensitive than others. people step in other companies step in and sometimes we'll get really aggressive and some customers are more price sensitive than others You can see large deals move one way or the other. you can see large deals move one way or the other Our pipeline, when I look at it on confidence interval, we're pretty confident about where we are. our pipeline when i look at it on confidence interval we're pretty confident about where we are You could see some payoffs come in, like Chris said, the unexpected ones, which you hope doesn't happen. you could see some payoffs come in like chris said the unexpected ones which you hope doesn't happen If you're really servicing your clients, you should know, but sometimes we're all surprised. if you're really servicing your clients you should know but sometimes we're all surprised

Speaker 3: Yeah. The other thing I would say, Russell, it goes a little bit like we talked about on the people side, in that, as bankers move, that also makes customers more vulnerable to changing banks. Generally, as we're rolling forward, we're looking at what we have, customers that we have, and things that we know are in a pipeline. Part of the optimism is we also are having more and more conversations with really, really solid customers that have big balances, both in loans and deposits, that are in play. You certainly don't bat 1,000 on those, by a long shot. The more at bats you get, the more hits you get. We're getting more and more at bats. Yeah. yeah The other thing I would say, Russell, it goes a little bit like we talked about on the people side, in that, as bankers move, that also makes customers more vulnerable to changing banks. the other thing i would say russell it goes a little bit like we talked about on the people side in that as bankers move that also makes customers more vulnerable to changing banks Generally, as we're rolling forward, we're looking at what we have, customers that we have, and things that we know are in a pipeline. generally as we're rolling forward we're looking at what we have customers that we have and things that we know are in a pipeline Part of the optimism is we also are having more and more conversations with really, really solid customers that have big balances, both in loans and deposits, that are in play. part of the optimism is we also are having more and more conversations with really really solid customers that have big balances both in loans and deposits that are in play You certainly don't bat 1,000 on those, by a long shot. you certainly don't bat 1,000 on those by a long shot The more at bats you get, the more hits you get. the more at bats you get the more hits you get We're getting more and more at bats. we're getting more and more at bats There's some optimism around that because we're having a lot of those conversations now. You think some of those are going to hit as you get later into the year and as you get into next year. That seems to be picking up momentum. There's some optimism around that because we're having a lot of those conversations now. there's some optimism around that because we're having a lot of those conversations now You think some of those are going to hit as you get later into the year and as you get into next year. you think some of those are going to hit as you get later into the year and as you get into next year That seems to be picking up momentum. that seems to be picking up momentum

Speaker 9: Okay. That's great, guys. Thank you very much for taking my question. Okay. okay That's great, guys. that's great guys Thank you very much for taking my question. thank you very much for taking my question

Speaker 3: Sure. Sure. sure

Speaker 7: The next question comes from Stephen Scouten with Piper Sandler. Please go ahead. The next question comes from Stephen Scouten with Piper Sandler. the next question comes from stephen scouten with piper sandler Please go ahead. please go ahead

Speaker 10: Hey, good morning, guys. Appreciate the time. I guess one other kind of maybe point of clarification on loan growth. Could you give us a feel for kind of maybe the cadence of growth? Obviously, you said the pipelines and growth picked up in the back of the quarter, but still a little bit below your expectations. Was the cadence just that things started off a little slower? Did you see any sort of demand pullback with all the macro and the geopolitical events? Talked about payoffs, but do you have any sort of numbers there in terms of quarter-over-quarter payoffs or year-over-year that, if that was part of the driver for the slightly slower than expected growth, maybe? Hey, good morning, guys. hey good morning guys Appreciate the time. appreciate the time I guess one other kind of maybe point of clarification on loan growth. i guess one other kind of maybe point of clarification on loan growth Could you give us a feel for kind of maybe the cadence of growth? could you give us a feel for kind of maybe the cadence of growth Obviously, you said the pipelines and growth picked up in the back of the quarter, but still a little bit below your expectations. obviously you said the pipelines and growth picked up in the back of the quarter but still a little bit below your expectations Was the cadence just that things started off a little slower? was the cadence just that things started off a little slower Did you see any sort of demand pullback with all the macro and the geopolitical events? did you see any sort of demand pullback with all the macro and the geopolitical events Talked about payoffs, but do you have any sort of numbers there in terms of quarter-over-quarter payoffs or year-over-year that, if that was part of the driver for the slightly slower than expected growth, maybe? talked about payoffs but do you have any sort of numbers there in terms of quarter-over-quarter payoffs or year-over-year that if that was part of the driver for the slightly slower than expected growth maybe

Speaker 3: Yeah. From a loan cadence, I think I'd describe things as fairly steady and normal, with the exception of a few big balance things. We did have at least a couple of payoffs that were just big balance things. We've talked about that before, and we anticipated some of that. Other things, you do see a little bit of push down the calendar, if you will, or push forward some. Maybe that's related to just some uncertainty. I wouldn't say that's a material event. I would just say that, as we have continued to do what we do, make changes here and make changes there. Remember, we had the disruption, second half of last year, of integrating FirstBank and Southern States, and that does create a little bit of distraction. Yeah. yeah From a loan cadence, I think I'd describe things as fairly steady and normal, with the exception of a few big balance things. from a loan cadence i think i'd describe things as fairly steady and normal with the exception of a few big balance things We did have at least a couple of payoffs that were just big balance things. we did have at least a couple of payoffs that were just big balance things We've talked about that before, and we anticipated some of that. we've talked about that before and we anticipated some of that Other things, you do see a little bit of push down the calendar, if you will, or push forward some. other things you do see a little bit of push down the calendar if you will or push forward some Maybe that's related to just some uncertainty. maybe that's related to just some uncertainty I wouldn't say that's a material event. i wouldn't say that's a material event I would just say that, as we have continued to do what we do, make changes here and make changes there. i would just say that as we have continued to do what we do make changes here and make changes there Remember, we had the disruption, second half of last year, of integrating FirstBank and Southern States, and that does create a little bit of distraction. remember we had the disruption second half of last year of integrating firstbank and southern states and that does create a little bit of distraction As you really get back on a good cadence, to use your word there, you just begin to see the momentum pick up. I wouldn't say there's anything unusual about it, other than you can see things bump a little bit, maybe related to, I call it economic uncertainty. Again, I wouldn't read too much into that. Those tend to be small bumps, not big bumps, like I said. It could bump 30 days, but that could move it between quarters. We do see that, but we see that every quarter. As you really get back on a good cadence, to use your word there, you just begin to see the momentum pick up. as you really get back on a good cadence to use your word there you just begin to see the momentum pick up I wouldn't say there's anything unusual about it, other than you can see things bump a little bit, maybe related to, I call it economic uncertainty. i wouldn't say there's anything unusual about it other than you can see things bump a little bit maybe related to i call it economic uncertainty Again, I wouldn't read too much into that. again i wouldn't read too much into that Those tend to be small bumps, not big bumps, like I said. those tend to be small bumps not big bumps like i said It could bump 30 days, but that could move it between quarters. it could bump 30 days but that could move it between quarters We do see that, but we see that every quarter. we do see that but we see that every quarter

Speaker 6: Yeah. I'd say for Russell, timing-wise, I'd say if you're sitting here in January, as you're saying, "Wow, it's a really tough start to the year here. Yeah. yeah I'd say for Russell, timing-wise, I'd say if you're sitting here in January, as you're saying, "Wow, it's a really tough start to the year here. i'd say for russell timing-wise i'd say if you're sitting here in january as you're saying "wow it's a really tough start to the year here

Speaker 3: Yeah. At the end of January, you'd look at it and go, wow, it's starting to feel weird. Yeah. yeah At the end of January, you'd look at it and go, wow, it's starting to feel weird. at the end of january you'd look at it and go wow it's starting to feel weird

Speaker 6: Yeah, especially coming off what I'd say were elevated payoffs in December. We're running $600 million or so in payoffs and amortization a quarter, Stephen. You also have people paying down lines, and then you have new lines being extended and paying up. It's a little bit of a moving target. That kind of $500 million-$600 million range is where I expect payoffs and pay downs to occur kind of on a quarterly basis, which means you got to be growing $600 million-$700 million to get to that mid-to-high single-digit plus increases in lines and things of that nature. The first quarter was a bit elevated, but not so much over the fourth quarter, because the fourth quarter was also elevated. Yeah, especially coming off what I'd say were elevated payoffs in December. yeah especially coming off what i'd say were elevated payoffs in december We're running $600 million or so in payoffs and amortization a quarter, Stephen. we're running $600 million or so in payoffs and amortization a quarter stephen You also have people paying down lines, and then you have new lines being extended and paying up. you also have people paying down lines and then you have new lines being extended and paying up It's a little bit of a moving target. it's a little bit of a moving target That kind of $500 million-$600 million range is where I expect payoffs and pay downs to occur kind of on a quarterly basis, which means you got to be growing $600 million-$700 million to get to that mid-to-high single-digit plus increases in lines and things of that nature. that kind of $500 million-$600 million range is where i expect payoffs and pay downs to occur kind of on a quarterly basis which means you got to be growing $600 million-$700 million to get to that mid-to-high single-digit plus increases in lines and things of that nature The first quarter was a bit elevated, but not so much over the fourth quarter, because the fourth quarter was also elevated. the first quarter was a bit elevated but not so much over the fourth quarter because the fourth quarter was also elevated

Speaker 10: Okay. Really helpful, Color. Appreciate that. On the updated NIM guidance, only a couple basis points below kind of where you were previously, just kind of wondering, what, if any, rate cuts do you have built into that guidance? I know you said maybe not an overly material change one way or the other, but would expect if we didn't get cuts, maybe that could lead you to the higher end of the range. The reason for the decline, would that be just increase in deposit pricing pressure? Is that the biggest delta, maybe quarter-over-quarter? Okay. okay Really helpful, Color. really helpful color Appreciate that. appreciate that On the updated NIM guidance, only a couple basis points below kind of where you were previously, just kind of wondering, what, if any, rate cuts do you have built into that guidance? on the updated nim guidance only a couple basis points below kind of where you were previously just kind of wondering what if any rate cuts do you have built into that guidance I know you said maybe not an overly material change one way or the other, but would expect if we didn't get cuts, maybe that could lead you to the higher end of the range. i know you said maybe not an overly material change one way or the other but would expect if we didn't get cuts maybe that could lead you to the higher end of the range The reason for the decline, would that be just increase in deposit pricing pressure? the reason for the decline would that be just increase in deposit pricing pressure Is that the biggest delta, maybe quarter-over-quarter? is that the biggest delta maybe quarter-over-quarter

Speaker 6: Yeah, you nailed it. We have a rate cut in our NIM guidance. That's what we had when we talked about the full year in January. Yeah, and like you said, it's basically a basis point or two lower. I would call that pretty stable. Reality is, if you look at the forward curve, market would say it's probably rates up at this point, right? We're slightly asset sensitive. It's probably worth kind of three to four basis points in margin. If I think about what you just said, deposit pressure and thinner loans, you kind of get back to the same place. There's probably a little bit of upside in flat to up rate scenario. I would say any, what I'll call stairstep rate movement, either direction, I think, yeah, is manageable. Yeah, you nailed it. yeah you nailed it We have a rate cut in our NIM guidance. we have a rate cut in our nim guidance That's what we had when we talked about the full year in January. that's what we had when we talked about the full year in january Yeah, and like you said, it's basically a basis point or two lower. yeah and like you said it's basically a basis point or two lower I would call that pretty stable. i would call that pretty stable Reality is, if you look at the forward curve, market would say it's probably rates up at this point, right? reality is if you look at the forward curve market would say it's probably rates up at this point right We're slightly asset sensitive. we're slightly asset sensitive It's probably worth kind of three to four basis points in margin. it's probably worth kind of three to four basis points in margin If I think about what you just said, deposit pressure and thinner loans, you kind of get back to the same place. if i think about what you just said deposit pressure and thinner loans you kind of get back to the same place There's probably a little bit of upside in flat to up rate scenario. there's probably a little bit of upside in flat to up rate scenario I would say any, what I'll call stairstep rate movement, either direction, I think, yeah, is manageable. i would say any what i'll call stairstep rate movement either direction i think yeah is manageable It's the elevators up and down which really create a lot of volatility in your margin. The team will be able to manage through either way. We certainly prefer that stairstep. Chris says to our team all the time, "It'll never get easier than today to get deposits." We expect that to continue to be challenging, in the right environment. Now you've got Treasuries are attractive again with where rates are, and so that's a competitive pressure outside of the banking system. As well as, companies need to fund loan growth and economic expansion. It's a competitive market. It always is, but it's been a little bit more fierce as we turn the calendar. It's the elevators up and down which really create a lot of volatility in your margin. it's the elevators up and down which really create a lot of volatility in your margin The team will be able to manage through either way. the team will be able to manage through either way We certainly prefer that stairstep. we certainly prefer that stairstep Chris says to our team all the time, "It'll never get easier than today to get deposits." We expect that to continue to be challenging, in the right environment. chris says to our team all the time "it'll never get easier than today to get deposits." we expect that to continue to be challenging in the right environment Now you've got Treasuries are attractive again with where rates are, and so that's a competitive pressure outside of the banking system. now you've got treasuries are attractive again with where rates are and so that's a competitive pressure outside of the banking system As well as, companies need to fund loan growth and economic expansion. as well as companies need to fund loan growth and economic expansion It's a competitive market. it's a competitive market It always is, but it's been a little bit more fierce as we turn the calendar. it always is but it's been a little bit more fierce as we turn the calendar

Speaker 10: Got it. Makes sense. Maybe just one housekeeping question, just on the tax rate. Anything to note there? It looks maybe slightly elevated relative to the past this quarter. Got it. got it Makes sense. makes sense Maybe just one housekeeping question, just on the tax rate. maybe just one housekeeping question just on the tax rate Anything to note there? anything to note there It looks maybe slightly elevated relative to the past this quarter. it looks maybe slightly elevated relative to the past this quarter

Speaker 6: Yeah. Yeah. yeah

Speaker 10: Do you have anything about that? Do you have anything about that? do you have anything about that

Speaker 6: I think it's probably in this kind of 20%-22% range is our normal operating environment. We had some franchise tax, an excess tax that's kind of local state-related that picked up this quarter. That drove the higher number. There's community opportunities where we can invest in our communities that can move that number around a bit. We do those when the deals make sense. You can see that move around. That's what you saw late last year. We're pretty normal range here, maybe slightly lower on a go-forward basis. I think it's probably in this kind of 20%-22% range is our normal operating environment. i think it's probably in this kind of 20%-22% range is our normal operating environment We had some franchise tax, an excess tax that's kind of local state-related that picked up this quarter. we had some franchise tax an excess tax that's kind of local state-related that picked up this quarter That drove the higher number. that drove the higher number There's community opportunities where we can invest in our communities that can move that number around a bit. there's community opportunities where we can invest in our communities that can move that number around a bit We do those when the deals make sense. we do those when the deals make sense You can see that move around. you can see that move around That's what you saw late last year. that's what you saw late last year We're pretty normal range here, maybe slightly lower on a go-forward basis. we're pretty normal range here maybe slightly lower on a go-forward basis

Speaker 10: Got it. Appreciate it. Thanks so much for the time, guys. Got it. got it Appreciate it. appreciate it Thanks so much for the time, guys. thanks so much for the time guys

Speaker 3: Thanks, Stephen. Thanks, Stephen. thanks stephen

Speaker 7: The next question comes from Brett Rabatin with StoneX. Please go ahead. The next question comes from Brett Rabatin with StoneX. the next question comes from brett rabatin with stonex Please go ahead. please go ahead

Speaker 1: Hey, guys. Good morning. Hey, guys. hey guys Good morning. good morning

Speaker 3: Good morning, Brett. Good morning, Brett. good morning brett

Speaker 6: Brett. Brett. brett

Speaker 1: Wanted to start off with just a strategy question. You guys are now $16.5 billion in assets, headed to $20, I would guess, over the next couple of years organically. I know, when you think about FirstBank, it's very community bank oriented. I wanted just to get an idea, one, from a philosophy perspective, would you guys start to think about specialized lines of business, equipment finance, those kinds of things that might further drive the loan pipeline? Just secondly, you guys didn't talk about the First Bank Way. Wanted to see where you guys were in your evolution of that, and just if there's anything left that you guys were trying to do in terms of the franchise and how you do business. Wanted to start off with just a strategy question. wanted to start off with just a strategy question You guys are now $16.5 billion in assets, headed to $20, I would guess, over the next couple of years organically. you guys are now $16.5 billion in assets headed to $20 i would guess over the next couple of years organically I know, when you think about FirstBank, it's very community bank oriented. i know when you think about firstbank it's very community bank oriented I wanted just to get an idea, one, from a philosophy perspective, would you guys start to think about specialized lines of business, equipment finance, those kinds of things that might further drive the loan pipeline? i wanted just to get an idea one from a philosophy perspective would you guys start to think about specialized lines of business equipment finance those kinds of things that might further drive the loan pipeline Just secondly, you guys didn't talk about the First Bank Way. just secondly you guys didn't talk about the first bank way Wanted to see where you guys were in your evolution of that, and just if there's anything left that you guys were trying to do in terms of the franchise and how you do business. wanted to see where you guys were in your evolution of that and just if there's anything left that you guys were trying to do in terms of the franchise and how you do business

Speaker 3: Yeah, Brett. I mean, I'm afraid maybe one of our conference rooms is bugged. You're hitting on some topics that have been heavy topics over the last two months. Let me see if I can just kind of run down and talk about some of those. You label us as community bank oriented, which I would give a strong indication that that continues, a strong message that that continues. That will continue. You heard us start off by talking about what our customers think about that. That was J.D. Power, but if you look at Greenwich Information, that's very strong as well. We think we have a formula there and sort of a special sauce in how we run, and our community orientation is really a key ingredient there. Yeah, Brett. yeah brett I mean, I'm afraid maybe one of our conference rooms is bugged. i mean i'm afraid maybe one of our conference rooms is bugged You're hitting on some topics that have been heavy topics over the last two months. you're hitting on some topics that have been heavy topics over the last two months Let me see if I can just kind of run down and talk about some of those. let me see if i can just kind of run down and talk about some of those You label us as community bank oriented, which I would give a strong indication that that continues, a strong message that that continues. you label us as community bank oriented which i would give a strong indication that that continues a strong message that that continues That will continue. that will continue You heard us start off by talking about what our customers think about that. you heard us start off by talking about what our customers think about that That was J.D. that was j.d Power, but if you look at Greenwich Information, that's very strong as well. power but if you look at greenwich information that's very strong as well We think we have a formula there and sort of a special sauce in how we run, and our community orientation is really a key ingredient there. we think we have a formula there and sort of a special sauce in how we run and our community orientation is really a key ingredient there It's not the only ingredient, but it's a key ingredient. We'll continue that as we scale. I've spent a lot of time strategizing in the last 60 days. Part of that strategy is how do we maintain that as we scale the company? That's really important to us, and you're going to continue to see that. You also mentioned specialized lines of business. Part of what we're working through is how do we add some specialized lines of business. We have some today, MH, manufactured housing, being one, for instance, that we excel at. How do we continue to add some other lines of business like that and continue that community bank orientation, okay? That's an important part of the strategy. It's not the only ingredient, but it's a key ingredient. it's not the only ingredient but it's a key ingredient We'll continue that as we scale. we'll continue that as we scale I've spent a lot of time strategizing in the last 60 days. i've spent a lot of time strategizing in the last 60 days Part of that strategy is how do we maintain that as we scale the company? part of that strategy is how do we maintain that as we scale the company That's really important to us, and you're going to continue to see that. that's really important to us and you're going to continue to see that You also mentioned specialized lines of business. you also mentioned specialized lines of business Part of what we're working through is how do we add some specialized lines of business. part of what we're working through is how do we add some specialized lines of business We have some today, MH, manufactured housing, being one, for instance, that we excel at. we have some today mh manufactured housing being one for instance that we excel at How do we continue to add some other lines of business like that and continue that community bank orientation, okay? how do we continue to add some other lines of business like that and continue that community bank orientation okay That's an important part of the strategy. that's an important part of the strategy What you labeled as FB Way, sometimes internally, we'll talk about our customer-centric business model. Those two overlap and can even be used interchangeably sometimes. Again, heavy focus on that very thing. We'll continue to do that because that's just making us better. Again, literally yesterday, we sat around the conference room, we're talking about where we ranked in customer service. One of our goals for our executive team to hit our objectives for the year, we have to increase that score. Even though we're number one, we have to increase that score by a certain percentage. That is a continuous process for us on how we basically keep that community bank orientation and continue to scale the company. That's critical to us. What you labeled as FB Way , sometimes internally, we'll talk about our customer-centric business model. what you labeled as fb way sometimes internally we'll talk about our customer-centric business model Those two overlap and can even be used interchangeably sometimes. those two overlap and can even be used interchangeably sometimes Again, heavy focus on that very thing. again heavy focus on that very thing We'll continue to do that because that's just making us better. we'll continue to do that because that's just making us better Again, literally yesterday, we sat around the conference room, we're talking about where we ranked in customer service. again literally yesterday we sat around the conference room we're talking about where we ranked in customer service One of our goals for our executive team to hit our objectives for the year, we have to increase that score. one of our goals for our executive team to hit our objectives for the year we have to increase that score Even though we're number one, we have to increase that score by a certain percentage. even though we're number one we have to increase that score by a certain percentage That is a continuous process for us on how we basically keep that community bank orientation and continue to scale the company. that is a continuous process for us on how we basically keep that community bank orientation and continue to scale the company That's critical to us. that's critical to us I'll give you another line of business that we've added in the last 90 days, is the SBA line. Okay? We haven't had that as a line in the company. We've dabbled, we've got just a few small SBA things out there that we had before this, but that's now a line where we have an all-star that heads that, Lane Rhodes, who joined us. That's another example. You're going to see exactly what you described, where we continue that orientation, but we do continue to grow certain lines and some certain verticals. I'll give you another line of business that we've added in the last 90 days, is the SBA line. i'll give you another line of business that we've added in the last 90 days is the sba line Okay? okay We haven't had that as a line in the company. we haven't had that as a line in the company We've dabbled, we've got just a few small SBA things out there that we had before this, but that's now a line where we have an all-star that heads that, Lane Rhodes, who joined us. we've dabbled we've got just a few small sba things out there that we had before this but that's now a line where we have an all-star that heads that lane rhodes who joined us That's another example. that's another example You're going to see exactly what you described, where we continue that orientation, but we do continue to grow certain lines and some certain verticals. you're going to see exactly what you described where we continue that orientation but we do continue to grow certain lines and some certain verticals

Speaker 1: Okay. That's helpful. The other question I wanted to ask was just around, there's an obvious expectation that there's going to be some market disruption in the Southeast with some of the recent transactions. Chris, would you view M&A as too distracting from here? I've had some color from some banks saying that they think focusing organically and looking to take advantage of maybe some of the other acquisitions that have happened here recently is a bigger opportunity. I just wanted to see if your philosophy had changed much, if any, around M&A and potential opportunities, particularly in maybe newer markets like North Carolina, et cetera. Okay. okay That's helpful. that's helpful The other question I wanted to ask was just around, there's an obvious expectation that there's going to be some market disruption in the Southeast with some of the recent transactions. the other question i wanted to ask was just around there's an obvious expectation that there's going to be some market disruption in the southeast with some of the recent transactions Chris, w ould you view M&A as too distracting from here? chris, w ould you view m&a as too distracting from here I've had some color from some banks saying that they think focusing organically and looking to take advantage of maybe some of the other acquisitions that have happened here recently is a bigger opportunity. I just wanted to see if your philosophy had changed much, if any, around M&A and potential opportunities, particularly in maybe newer markets like North Carolina, et cetera. i've had some color from some banks saying that they think focusing organically and looking to take advantage of maybe some of the other acquisitions that have happened here recently is a bigger opportunity. i just wanted to see if your philosophy had changed much if any around m&a and potential opportunities particularly in maybe newer markets like north carolina et cetera

Speaker 3: Yeah, again, man, I'm afraid you have us bugged here because it's a frequent topic of conversation, is exactly that. With the organic opportunity, do we need to, or is it too distracting to do M&A? The answer for us is no, it's not. We are very conscious of distractions ourselves. That does cause us to look at it strategically a little differently than we traditionally looked at it, and probably causes us to be even more careful and picky, choosy about what we do, because it needs to be both strategically compelling and financially compelling for us. You have to be careful about markets, okay? We can generally keep distractions away from markets that don't have any involvement through overlap in a transaction. We can limit the distraction. Those are all the things we consider. Yeah, again, man, I'm afraid you have us bugged here because it's a frequent topic of conversation, is exactly that. yeah again man i'm afraid you have us bugged here because it's a frequent topic of conversation is exactly that With the organic opportunity, do we need to, or is it too distracting to do M&A? with the organic opportunity do we need to or is it too distracting to do m&a The answer for us is no, it's not. the answer for us is no it's not We are very conscious of distractions ourselves. we are very conscious of distractions ourselves That does cause us to look at it strategically a little differently than we traditionally looked at it, and probably causes us to be even more careful and picky, choosy about what we do, because it needs to be both strategically compelling and financially compelling for us. that does cause us to look at it strategically a little differently than we traditionally looked at it and probably causes us to be even more careful and picky choosy about what we do because it needs to be both strategically compelling and financially compelling for us You have to be careful about markets, okay? you have to be careful about markets okay We can generally keep distractions away from markets that don't have any involvement through overlap in a transaction. we can generally keep distractions away from markets that don't have any involvement through overlap in a transaction We can limit the distraction. we can limit the distraction Those are all the things we consider. those are all the things we consider We will still keep that arrow in our quiver, and we could exercise that on a transaction at any point. We will still keep that arrow in our quiver, and we could exercise that on a transaction at any point. we will still keep that arrow in our quiver and we could exercise that on a transaction at any point

Speaker 1: Okay. Great. I appreciate the color, guys. Okay. okay Great. I appreciate the color, guys. great. i appreciate the color guys

Speaker 3: All right. Thanks, Brett. All right. all right Thanks, Brett. thanks brett

Speaker 7: The next question comes from Steve Moss with Raymond James. Please go ahead. The next question comes from Steve Moss with Raymond James. the next question comes from steve moss with raymond james Please go ahead. please go ahead

Speaker 11: Good morning, guys. Good morning, guys. good morning guys

Speaker 3: Good morning, Steve. Good morning, Steve. good morning steve

Speaker 11: I want to start here, just following up on the loan pipeline here that you guys spoke is stronger. Just kind of curious where you're seeing the pickup in demand by loan type, if you will? I want to start here, just following up on the loan pipeline here that you guys spoke is stronger. i want to start here just following up on the loan pipeline here that you guys spoke is stronger Just kind of curious where you're seeing the pickup in demand by loan type, if you will? just kind of curious where you're seeing the pickup in demand by loan type if you will

Speaker 3: Yeah. Steve, I would say it's across the board, but I would say, I'll caveat that or a little bit more clear, it's more in operating businesses. That's really where we've been focused, is developing out that strength from a C&I perspective. If you look at where we've gotten smaller, a lot of that is kind of non-owner occupied CRE or construction over the last couple of years. Some of the pressure that we faced in payoffs this quarter and late last quarter was, if you think back that 2021 timeframe, a lot of growth out of the company, a lot of it was in that construction and non-owner occupied CRE space. You're seeing that kind of roll off. We're replacing it. Yeah. yeah Steve, I would say it's across the board, but I would say, I'll caveat that or a little bit more clear, it's more in operating businesses. steve i would say it's across the board but i would say i'll caveat that or a little bit more clear it's more in operating businesses That's really where we've been focused, is developing out that strength from a C&I perspective. that's really where we've been focused is developing out that strength from a c&i perspective If you look at where we've gotten smaller, a lot of that is kind of non-owner occupied CRE or construction over the last couple of years. if you look at where we've gotten smaller a lot of that is kind of non-owner occupied cre or construction over the last couple of years Some of the pressure that we faced in payoffs this quarter and late last quarter was, if you think back that 2021 timeframe, a lot of growth out of the company, a lot of it was in that construction and non-owner occupied CRE space. some of the pressure that we faced in payoffs this quarter and late last quarter was if you think back that 2021 timeframe a lot of growth out of the company a lot of it was in that construction and non-owner occupied cre space You're seeing that kind of roll off. you're seeing that kind of roll off We're replacing it. we're replacing it We're still in those businesses and taking care of clients, and we still like those asset classes, but it's not growing at the same velocity. It's much more about operating businesses, and some owner-occupied real estate type of transactions. We're still in those businesses and taking care of clients, and we still like those asset classes, but it's not growing at the same velocity. we're still in those businesses and taking care of clients and we still like those asset classes but it's not growing at the same velocity It's much more about operating businesses, and some owner-occupied real estate type of transactions. it's much more about operating businesses and some owner-occupied real estate type of transactions

Speaker 11: Okay, great. Appreciate that color there. Second question for me here, just on the margin. You talked about the core margin, just kind of curious as to where you're thinking, any updated thoughts, I should say, on purchase accounting accretion here for the upcoming quarters? Okay, great. okay great Appreciate that color there. appreciate that color there Second question for me here, just on the margin. second question for me here just on the margin You talked about the core margin, just kind of curious as to where you're thinking, any updated thoughts, I should say, on purchase accounting accretion here for the upcoming quarters? you talked about the core margin just kind of curious as to where you're thinking any updated thoughts i should say on purchase accounting accretion here for the upcoming quarters

Speaker 6: Yeah, I think it's going to be in that same kind of 15-17, 18 basis point range. I don't think you'll see it go up, unless we get even faster payoffs. I think it's going to be pretty consistent here. Yeah, I think it's going to be in that same kind of 15-17, 18 basis point range. yeah i think it's going to be in that same kind of 15-17 18 basis point range I don't think you'll see it go up, unless we get even faster payoffs. i don't think you'll see it go up unless we get even faster payoffs I think it's going to be pretty consistent here. i think it's going to be pretty consistent here

Speaker 11: Okay, excellent. One more question, just on capital here. You guys bought back late in the quarter with the pullback. Should we expect you guys to continue to be opportunistic? Sitting at 9.9% TCE, more favorable regulatory environment, do you guys press the gas on that a little bit more? Okay, excellent. okay excellent One more question, just on capital here. one more question just on capital here You guys bought back late in the quarter with the pullback. you guys bought back late in the quarter with the pullback Should we expect you guys to continue to be opportunistic? should we expect you guys to continue to be opportunistic Sitting at 9.9% TCE, more favorable regulatory environment, do you guys press the gas on that a little bit more? sitting at 9.9% tce more favorable regulatory environment do you guys press the gas on that a little bit more

Speaker 3: Yeah. We'll continue to be opportunistic, when it comes to buybacks. We're watching the volatility there. We usually regard that as opportunistic, and we really haven't changed that stance. Yeah. yeah We'll continue to be opportunistic, when it comes to buybacks. we'll continue to be opportunistic when it comes to buybacks We're watching the volatility there. we're watching the volatility there We usually regard that as opportunistic, and we really haven't changed that stance. we usually regard that as opportunistic and we really haven't changed that stance

Speaker 11: Okay. Well, great. I appreciate all the color here, and that's all my questions. Thank you very much, guys. Okay. okay Well, great. well great I appreciate all the color here, and that's all my questions. i appreciate all the color here and that's all my questions Thank you very much, guys. thank you very much guys

Speaker 3: Thanks, Steve. Thanks, Steve. thanks steve

Speaker 7: The next question comes from Catherine Mealor with KBW. Please go ahead. The next question comes from Catherine Mealor with KBW. the next question comes from catherine mealor with kbw Please go ahead. please go ahead

Speaker 2: Thanks. Good morning. Thanks. thanks Good morning. good morning

Speaker 3: Good morning. Good morning. good morning

Speaker 2: All right, I've got one more on the margin, just on deposit cost. Do you have the spot rate of where deposit cost ended the quarter? Let's just say we are in a position where we don't have any more rate cuts until maybe the very end of the year, so basically no more for 2026. Do you think that your deposit costs increase from this kind of 2.80% interest-bearing level, or are you just more stable? All right, I've got one more on the margin, just on deposit cost. all right i've got one more on the margin just on deposit cost Do you have the spot rate of where deposit cost ended the quarter? do you have the spot rate of where deposit cost ended the quarter Let's just say we are in a position where we don't have any more rate cuts until maybe the very end of the year, so basically no more for 2026. let's just say we are in a position where we don't have any more rate cuts until maybe the very end of the year so basically no more for 2026 Do you think that your deposit costs increase from this kind of 2.80% interest-bearing level, or are you just more stable? do you think that your deposit costs increase from this kind of 2.80% interest-bearing level or are you just more stable

Speaker 6: Yeah. At 280 level 3. When we think about total new originations were 270. That's probably on the low end, honestly. Like you said, of interest-bearing 283. I think you probably see those increase a little bit, given where you have to acquire new customers, Catherine. The market rate is significantly higher to acquire new customers. The goal there is to translate that into relationships over time and full operating business, and then you get back to more of an equilibrium. There's a bit of a disconnect, reality-wise, of where you can fund the company, either through borrowing or brokered and wholesale, versus kind of where I'll call the consumer retail commercial market is. It's actually, I would say, significantly higher to go out and acquire new customers versus funding the bank. It's a balance. Yeah. yeah At 280 level 3. at 280 level 3 When we think about total new originations were 270. when we think about total new originations were 270 That's probably on the low end, honestly. that's probably on the low end honestly Like you said, of interest-bearing 283. like you said of interest-bearing 283 I think you probably see those increase a little bit, given where you have to acquire new customers, Catherine. i think you probably see those increase a little bit given where you have to acquire new customers catherine The market rate is significantly higher to acquire new customers. the market rate is significantly higher to acquire new customers The goal there is to translate that into relationships over time and full operating business, and then you get back to more of an equilibrium. the goal there is to translate that into relationships over time and full operating business and then you get back to more of an equilibrium There's a bit of a disconnect, reality-wise, of where you can fund the company, either through borrowing or brokered and wholesale, versus kind of where I'll call the consumer retail commercial market is. there's a bit of a disconnect reality-wise of where you can fund the company either through borrowing or brokered and wholesale versus kind of where i'll call the consumer retail commercial market is It's actually, I would say, significantly higher to go out and acquire new customers versus funding the bank. it's actually i would say significantly higher to go out and acquire new customers versus funding the bank It's a balance. it's a balance If rates are up or flat, Fed funds, I think you see competitive pressure pushing deposit costs modestly higher. Our goal is always to get the full relationship. If rates are up or flat, Fed funds, I think you see competitive pressure pushing deposit costs modestly higher. if rates are up or flat fed funds i think you see competitive pressure pushing deposit costs modestly higher Our goal is always to get the full relationship. our goal is always to get the full relationship

Speaker 2: Got it. That new deposit cost of 270, does that include non-interest-bearing, or that's just on new interest-bearings? Got it. got it That new deposit cost of 270, does that include non-interest-bearing, or that's just on new interest-bearings? that new deposit cost of 270 does that include non-interest-bearing or that's just on new interest-bearings

Speaker 6: That's inclusive. That's inclusive. that's inclusive

Speaker 2: Okay. That's all in. Okay. okay That's all in. that's all in

Speaker 6: All in, yeah. All in, yeah. all in yeah

Speaker 2: That's relative to your kind of 227. Your cost of new is still higher than, you know, where you are today. That's relative to your kind of 227. that's relative to your kind of 227 Your cost of new is still higher than, you know, where you are today. your cost of new is still higher than you know where you are today

Speaker 6: That's right. That's right. that's right

Speaker 2: Which makes sense. Which makes sense. which makes sense

Speaker 6: Yeah. Yeah. yeah

Speaker 2: Yeah. Okay. Yeah. yeah Okay. okay

Speaker 6: Yeah. Yeah. yeah

Speaker 2: Okay. Okay. okay

Speaker 3: I will say this too, Catherine, just to clarify. The days, I think, of loading up on non-interest-bearing deposits and not paying your customers a lot of interest, we don't really see that as a long-term thing. We obviously want all the operating accounts we can, but we also want a fair value proposition. With all these fintechs and competitive market, we don't expect our customers to be asleep at the wheel, and we're not going to try to nickel-and-dime them to zero. Yeah. That's right. As a matter of fact, sometimes we'll even wake them up intentionally and say, "Hey, we'll give you a better deal." The days of those really cheap back books, we view that as quickly coming to an end, which changes a lot of competitive dynamics. I will say this too, Catherine, just to clarify. i will say this too catherine just to clarify The days, I think, of loading up on non-interest-bearing deposits and not paying your customers a lot of interest, we don't really see that as a long-term thing. the days i think of loading up on non-interest-bearing deposits and not paying your customers a lot of interest we don't really see that as a long-term thing We obviously want all the operating accounts we can, but we also want a fair value proposition. we obviously want all the operating accounts we can but we also want a fair value proposition With all these fintechs and competitive market, we don't expect our customers to be asleep at the wheel, and we're not going to try to nickel-and-dime them to zero. with all these fintechs and competitive market we don't expect our customers to be asleep at the wheel and we're not going to try to nickel-and-dime them to zero Yeah. yeah That's right. that's right As a matter of fact, sometimes we'll even wake them up intentionally and say, "Hey, we'll give you a better deal." The days of those really cheap back books, we view that as quickly coming to an end, which changes a lot of competitive dynamics. as a matter of fact sometimes we'll even wake them up intentionally and say "hey we'll give you a better deal." the days of those really cheap back books we view that as quickly coming to an end which changes a lot of competitive dynamics Just viewing our window strategically on how we're thinking about it. Just viewing our window strategically on how we're thinking about it. just viewing our window strategically on how we're thinking about it

Speaker 2: By product type, where do you think you see the biggest growth in deposits? Is that just interest-bearing demand? By product type, where do you think you see the biggest growth in deposits? by product type where do you think you see the biggest growth in deposits Is that just interest-bearing demand? is that just interest-bearing demand

Speaker 6: Yeah, you've obviously been sitting in our treasury meetings and our pricing committee. We saw money market decrease this quarter because when we're talking about the aggressive nature of other rate offerings. Yeah, there's probably some work to do there just to get back to equilibrium on money market. CDs, we continue to see CD renewals, and new production CDs as a growth opportunity. We saw that in the back half of the year and through the quarter. We've been more in the short and long, kind of a barbell approach. We're seeing a lot of competition in that middle ground, which I'll call 12-15 months. CDs are an opportunity, but getting some of our money market business back is probably the biggest lever. Yeah, you've obviously been sitting in our treasury meetings and our pricing committee. yeah you've obviously been sitting in our treasury meetings and our pricing committee We saw money market decrease this quarter because when we're talking about the aggressive nature of other rate offerings. we saw money market decrease this quarter because when we're talking about the aggressive nature of other rate offerings Yeah, there's probably some work to do there just to get back to equilibrium on money market. yeah there's probably some work to do there just to get back to equilibrium on money market CDs, we continue to see CD renewals, and new production CDs as a growth opportunity. cds we continue to see cd renewals and new production cds as a growth opportunity We saw that in the back half of the year and through the quarter. we saw that in the back half of the year and through the quarter We've been more in the short and long, kind of a barbell approach. we've been more in the short and long kind of a barbell approach We're seeing a lot of competition in that middle ground, which I'll call 12-15 months. we're seeing a lot of competition in that middle ground which i'll call 12-15 months CDs are an opportunity, but getting some of our money market business back is probably the biggest lever. cds are an opportunity but getting some of our money market business back is probably the biggest lever

Speaker 2: That makes sense. Great. Thank you. That makes sense. that makes sense Great. great Thank you. thank you

Speaker 6: Thanks, Catherine. Have a great day. Thanks, Catherine. thanks catherine have a Have a great day. have a great day

Speaker 7: As a reminder, if you would like to ask a question, please press star then one to join the question queue. The next question comes from Christopher Marinac with Brean Capital Research. Please go ahead. As a reminder, if you would like to ask a question, please press star then one to join the question queue. as a reminder if you would like to ask a question please press star then one to join the question queue The next question comes from Christopher Marinac with Brean Capital Research . the next question comes from christopher marinac with brean capital research Please go ahead. please go ahead

Speaker 4: Hey, good morning, Chris and Michael. Can you talk about the growth of securities as another tool to grow NII? I know it's not the focus of loans and deposits as we are all talking about, but just curious if securities are a component of how you continue to grow revenue. Hey, good morning, Chris and Michael. hey good morning chris and michael Can you talk about the growth of securities as another tool to grow NII? can you talk about the growth of securities as another tool to grow nii I know it's not the focus of loans and deposits as we are all talking about, but just curious if securities are a component of how you continue to grow revenue. i know it's not the focus of loans and deposits as we are all talking about but just curious if securities are a component of how you continue to grow revenue

Speaker 6: Yeah. Good morning, Chris. The investment portfolio is about 9% of the balance sheet total assets. We've been as high in the past, that kind of 14% range. That really comes down to funding, in a lot of cases. There's not a whole lot of times where I sit around and say, "Hey, we have excess deposits." To go and invest in investment portfolio, we'd much rather deploy through organic growth opportunities. That certainly is a lever to do that. We've been mainly in kind of floating-rate, government-backed stuff from an investment portfolio perspective. It's been a higher-yielding asset than fixed-rate mortgages and things of that nature. We'll continue to do that. It's not top of the list. Yeah. yeah Good morning, Chris. good morning chris The investment portfolio is about 9% of the balance sheet total assets. the investment portfolio is about 9% of the balance sheet total assets We've been as high in the past, that kind of 14% range. we've been as high in the past that kind of 14% range That really comes down to funding, in a lot of cases. that really comes down to funding in a lot of cases There's not a whole lot of times where I sit around and say, "Hey, we have excess deposits." To go and invest in investment portfolio, we'd much rather deploy through organic growth opportunities. there's not a whole lot of times where i sit around and say "hey we have excess deposits." to go and invest in investment portfolio we'd much rather deploy through organic growth opportunities That certainly is a lever to do that. that certainly is a lever to do that We've been mainly in kind of floating-rate, government-backed stuff from an investment portfolio perspective. we've been mainly in kind of floating-rate government-backed stuff from an investment portfolio perspective It's been a higher-yielding asset than fixed-rate mortgages and things of that nature. it's been a higher-yielding asset than fixed-rate mortgages and things of that nature We'll continue to do that. we'll continue to do that It's not top of the list. it's not top of the list We want to be organic in nature. If we stick at 9%-10%, or even if it went down a bit and liquidity levels remained in that 11% on-balance-sheet liquidity range, I'd be a happy person. Mainly we're deploying through loan growth. We want to be organic in nature. we want to be organic in nature If we stick at 9%-10%, or even if it went down a bit and liquidity levels remained in that 11% on-balance-sheet liquidity range, I'd be a happy person. if we stick at 9%-10% or even if it went down a bit and liquidity levels remained in that 11% on-balance-sheet liquidity range i'd be a happy person Mainly we're deploying through loan growth. mainly we're deploying through loan growth

Speaker 3: Yeah, Chris, I'll just add this. When we're looking at banks, when we're valuing banks, and we see wholesale funding and sometimes then wholesale assets on the balance sheet, we quickly discount that to zero. When we're thinking about our own company, we don't do that as a matter of practice. We think, hey, to be successful and to continue to be creating value, we've got to be adding what we call customer. That can take a lot of different forms, but I'll broadly call it customer assets and customer deposits. We think that's what we do, and if we don't continue to do that well, we won't continue to be able to sit at this table. There are times where we might leverage up for some specific reason, or, if we know something's coming or something's leaving, we will use that leverage.Yeah, Chris, I'll just add this. `yeah chris i'll just add this When we're looking at banks, when we're valuing banks, and we see wholesale funding and sometimes then wholesale assets on the balance sheet, we quickly discount that to zero. when we're looking at banks when we're valuing banks and we see wholesale funding and sometimes then wholesale assets on the balance sheet we quickly discount that to zero When we're thinking about our own company, we don't do that as a matter of practice. when we're thinking about our own company we don't do that as a matter of practice We think, hey, to be successful and to continue to be creating value, we've got to be adding what we call customer. we think hey to be successful and to continue to be creating value we've got to be adding what we call customer That can take a lot of different forms, but I'll broadly call it customer assets and customer deposits. that can take a lot of different forms but i'll broadly call it customer assets and customer deposits We think that's what we do, and if we don't continue to do that well, we won't continue to be able to sit at this table. we think that's what we do and if we don't continue to do that well we won't continue to be able to sit at this table There are times where we might leverage up for some specific reason, or, if we know something's coming or something's leaving, we will use that leverage. there are times where we might leverage up for some specific reason or if we know something's coming or something's leaving we will use that leverage We keep a lot of dry powder there to use. We just don't typically use it for revenue growth purposes. When we think about our portfolio, we don't keep a very large investment portfolio, and basically, it's simply a liquidity vehicle for us. If you also look at it in there, it's very vanilla and liquid in terms of its marketability, because, again, that fits that same philosophy of we're really trying to plow it into the assets that we think really grow our shareholder value. We keep a lot of dry powder there to use. we keep a lot of dry powder there to use We just don't typically use it for revenue growth purposes. we just don't typically use it for revenue growth purposes When we think about our portfolio, we don't keep a very large investment portfolio, and basically, it's simply a liquidity vehicle for us. when we think about our portfolio we don't keep a very large investment portfolio and basically it's simply a liquidity vehicle for us If you also look at it in there, it's very vanilla and liquid in terms of its marketability, because, again, that fits that same philosophy of we're really trying to plow it into the assets that we think really grow our shareholder value. if you also look at it in there it's very vanilla and liquid in terms of its marketability because again that fits that same philosophy of we're really trying to plow it into the assets that we think really grow our shareholder value

Speaker 4: Understood. Thank you both for that. Just a quick follow-up on new accounts that you're opening, as you look at it internally, do you see net new account growth, and is there sort of a general pace that you're looking for as the next several quarters and years play out? Understood. understood Thank you both for that. thank you both for that Just a quick follow-up on new accounts that you're opening, as you look at it internally, do you see net new account growth, and is there sort of a general pace that you're looking for as the next several quarters and years play out? just a quick follow-up on new accounts that you're opening as you look at it internally do you see net new account growth and is there sort of a general pace that you're looking for as the next several quarters and years play out

Speaker 6: Yeah. We actually have been quite successful in growing consumer accounts over the past year. It's interesting, as we're going through some of this generational shift, I don't know what the youngest generation is now because I'm getting older, but I'm going to say adding millennials is a different structure, and you got to add a lot of those accounts for one baby boomer that may be passing away or what have you. That evolution of your accounts, you got to add a lot of smaller ones. We like that, actually. We like granular deposits and granular loans, so we're all for it. It just takes a little bit more time to grow your balances. The number of accounts has been quite good. Yeah. yeah We actually have been quite successful in growing consumer accounts over the past year. we actually have been quite successful in growing consumer accounts over the past year It's interesting, as we're going through some of this generational shift, I don't know what the youngest generation is now because I'm getting older, but I'm going to say adding millennials is a different structure, and you got to add a lot of those accounts for one baby boomer that may be passing away or what have you. it's interesting as we're going through some of this generational shift i don't know what the youngest generation is now because i'm getting older but i'm going to say adding millennials is a different structure and you got to add a lot of those accounts for one baby boomer that may be passing away or what have you That evolution of your accounts, you got to add a lot of smaller ones. that evolution of your accounts you got to add a lot of smaller ones We like that, actually. we like that actually We like granular deposits and granular loans, so we're all for it. we like granular deposits and granular loans so we're all for it It just takes a little bit more time to grow your balances. it just takes a little bit more time to grow your balances The number of accounts has been quite good. the number of accounts has been quite good The balance growth comes over a significantly longer period of time than adding $400,000-$500,000 deposit accounts, when they're coming in $2,000-$3,000 chunks. It's been positive. I'll also say, back to Catherine's question, we've seen some success in savings, in our savings account product, which is probably an odd thing for people externally to hear, but it helps add that younger generation. You got a savings account, it's got a companion checking account, and it's of interest to people that are not quite yet adults. It's worked well for families as people move into the stages of life. The balance growth comes over a significantly longer period of time than adding $400,000-$500,000 deposit accounts, when they're coming in $2,000-$3,000 chunks. the balance growth comes over a significantly longer period of time than adding $400,000-$500,000 deposit accounts when they're coming in $2,000-$3,000 chunks It's been positive. it's been positive I'll also say, back to Catherine's question, we've seen some success in savings, in our savings account product, which is probably an odd thing for people externally to hear, but it helps add that younger generation. i'll also say back to catherine's question we've seen some success in savings in our savings account product which is probably an odd thing for people externally to hear but it helps add that younger generation You got a savings account, it's got a companion checking account, and it's of interest to people that are not quite yet adults. you got a savings account it's got a companion checking account and it's of interest to people that are not quite yet adults It's worked well for families as people move into the stages of life. it's worked well for families as people move into the stages of life

Speaker 3: Yeah. Hey, Chris, I want to just add one thing there. We have had good success at growing accounts, and still, about half our deposits are retail. We have a lot of small balance accounts, which Michael said, we love that construction on our balance sheet and the granularity that gives us and all the positive things that go with that. One of the other things we have done, which is not easy to do, and I won't say we're perfect at it, but we feel like it gives us a leg up, is traditionally in banking, we've counted accounts. Even some banks have gotten in trouble for that in terms of how they did that and how they motivated folks to do that. We're very aware of that. We actually go through and define a relationship. We actually count relationships. Yeah. yeah Hey, Chris, I want to just add one thing there. hey chris i want to just add one thing there We have had good success at growing accounts, and still, about half our deposits are retail. we have had good success at growing accounts and still about half our deposits are retail We have a lot of small balance accounts, which Michael said, we love that construction on our balance sheet and the granularity that gives us and all the positive things that go with that. we have a lot of small balance accounts which michael said we love that construction on our balance sheet and the granularity that gives us and all the positive things that go with that One of the other things we have done, which is not easy to do, and I won't say we're perfect at it, but we feel like it gives us a leg up, is traditionally in banking, we've counted accounts. one of the other things we have done which is not easy to do and i won't say we're perfect at it but we feel like it gives us a leg up is traditionally in banking we've counted accounts Even some banks have gotten in trouble for that in terms of how they did that and how they motivated folks to do that. even some banks have gotten in trouble for that in terms of how they did that and how they motivated folks to do that We're very aware of that. we're very aware of that We actually go through and define a relationship. we actually go through and define a relationship We actually count relationships. we actually count relationships Because you can add accounts, but frankly, some of them aren't very valuable, and they're not really a relationship. We have moved into relationship counting. It's paying some dividends, but we think it's going to pay big dividends as we roll forward. Because you can add accounts, but frankly, some of them aren't very valuable, and they're not really a relationship. because you can add accounts but frankly some of them aren't very valuable and they're not really a relationship We have moved into relationship counting. we have moved into relationship counting It's paying some dividends, but we think it's going to pay big dividends as we roll forward. it's paying some dividends but we think it's going to pay big dividends as we roll forward

Speaker 4: No, that's great stuff. Thank you both for getting into that detail, and we appreciate you hosting us all this morning. No, that's great stuff. no that's great stuff Thank you both for getting into that detail, and we appreciate you hosting us all this morning. thank you both for getting into that detail and we appreciate you hosting us all this morning

Speaker 3: Yep. Thanks, Chris. Yep. yep Thanks, Chris. thanks chris

Speaker 7: This concludes our question-and answer session. I would like to turn the conference back over to Chris Holmes for any closing remarks. This concludes our question- and answer session. this concludes our question- and answer session I would like to turn the conference back over to Chris Holmes for any closing remarks. i would like to turn the conference back over to chris holmes for any closing remarks

Speaker 3: All right. Thank you all for joining us. We always appreciate your participation and your interest. Any further questions from either anybody in the investment community or analyst community, you can reach out to us directly. Everybody have a great day. Thanks. All right. all right Thank you all for joining us. thank you all for joining us We always appreciate your participation and your interest. we always appreciate your participation and your interest Any further questions from either anybody in the investment community or analyst community, you can reach out to us directly. any further questions from either anybody in the investment community or analyst community you can reach out to us directly Everybody have a great day. everybody have a great day Thanks. thanks

Speaker 7: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. The conference is now concluded. the conference is now concluded Thank you for attending today's presentation. thank you for attending today's presentation You may now disconnect. you may now disconnect