Reason behind stock pressure: FB Financial Corp (NYSE: FBK) stock fell 10.97% on 23rd January, 2019 (as of 10:47 am GMT-5; Source: Google finance) after the company has reported the net income of $17.0 million for the fourth quarter of 2018, compared to net income of $23.0 million for the fourth quarter of 2017. During the fourth quarter of 2018, FBK has recognized a provision for loan losses of $2.2 million, reflecting loan growth, renewals of previously acquired loans, credit metrics and net charge-offs of 0.06% of average loans. The Company’s nonperforming assets were of 0.61% of the total assets compared to 0.51% at September 30, 2018. Nonperforming loans were 0.46% of loans held for investment at December 31, 2018, compared to 0.30% at September 30, 2018.
Acquisition synergies: During the fourth quarter, FBK has announced the Atlantic Capital branch acquisition which will add approximately $600 million in deposits and $400 million in loans. FBK is on track to close early in the second quarter of 2019 and continue to be excited about the customers and teams the company is adding in Chattanooga and Knoxville, Tennessee as well as Dalton, Georgia
Disappointing NIM: FBK in the fourth quarter of FY 18 has reported the adjusted earnings per share of 55 cents, missing the analysts’ estimates for the adjusted earnings per share of 63 cents. The company had reported the adjusted revenue growth of 35.9 percent to $78.62 million in the fourth quarter of FY 18, missing the analysts’ estimates for revenue of $85.07 million.
Moreover, for the fourth quarter of 2018, the company’s net interest margin (NIM) was 4.50%, compared to 4.71% and 4.63% for the third quarter of 2018 and the fourth quarter of 2017, respectively. Accretion related to purchased loans and nonaccrual interest had contributed 17 basis points to the company’s NIM in the fourth quarter of 2018 compared to 25 and 29 basis points for the third quarter of 2018 and the fourth quarter of 2017, respectively. Further, the company’s NIM and net interest income were negatively impacted on the back of the lower level of mortgage loans held for sale which decreased by $92.7 million in average balances during the fourth quarter of 2018, reflecting lower mortgage volumes in the quarter.
Additionally, during the fourth quarter of 2018, the company grew customer deposits by 5.1% annualized, while total deposit growth was 4.1% annualized.