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FB Financial (FBK)

Participants
Chris Holmes President and CEO
James Gordon Chief Financial Officer
Wib Evans President, FB Ventures
Myers Jones Chief Executive Officer, Franklin Financial Network, Inc.
Chris Black Chief Financial Officer, Franklin Financial Network, Inc.
Jennifer Demba SunTrust
Stephen Scouten Piper Sandler
Catherine Mealor KBW
Tyler Stafford Stephens
Daniel Cardenas Raymond James
Call transcript
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Operator

Good evening. And welcome to the FB Financial Corporation’s Conference Call regarding their Fourth Quarter 2019 Earnings Release and Proposed Merger with Franklin Financial Network Incorporated.

Hosting the call today from FB Financial is Chris Holmes, President and Chief Executive Officer. He is joined by James Gordon, Chief Financial Officer; and Wib Evans, President of FB Ventures; as well as Myers Jones, Chief Executive Officer; and Chris Black, Chief Financial Officer, from Franklin Financial Network Incorporated.

Please note FB Financial’s press release and each of this evening’s presentation are available on the Investor Relations page on the company’s website at https://www.firstbankonline.com. recorded website be the approximately this being on for completion is call. Financial���s FB one call and available will replay of Today’s hour after mode. been time, in participants this have At a all listen-only placed The call will open for the questions after be presentation.

Financial may Financial actual achievements All statements other laws. or comments which statements facts differ uncertainties results and are or subject to that FB under presentation, constitute FB forward-looking any federal cause the and from this performance results of by make implied During and statements. may security forward-looking forward-looking materially to risks expressed such

in Many company’s recent description are of are release cautioned of risks current is periodic these Financial’s Commission, as statements. reliance FB FB filed listeners Financial’s put Securities control to as forward-looking ability the the undue recent announcing and and any transaction other to the such factors not including with on contained most and well detailed or and more Form earnings predict, the XX-K, such release. beyond A Exchange most press FB Financial’s reports of

Except any Financial information, in otherwise. statements obligation disclaims presentation as of this forward-looking result as whether a contained future update or events by required new law, to FB or revise any

the page the https://www.firstbankonline.com the website earnings evening’s of In Exchange which a presentation to financial and defined Securities this the Principle include the measures most by at Accepted addition, at these is comparable measures Principle presentation Relations Regulation certain and release, of FB as available financial of A on remarks supplemental available and directly GAAP in Accounting and financial non-GAAP Securities Commission measures website on may Commission’s non-Generally Financial’s Accepted comparable the http://www.sec.gov. G. and Accounting reconciliation Exchange company’s are information, measures Investor Generally

and Financial’s, I presentation like to would President Chris Holmes, turn to CEO. over now FB the

Chris Holmes

interest fourth about call on much, you Thank quarter Network. merger announcement for thank in us your hear you Keith. very the to joining earnings with Financial our both Good this and appreciate companies. Franklin And evening. We

I to cover all for to I walk merger want exciting Synergy. have a earnings and about, it briefly moment, will thoughts James and through for news first my tonight and turn want the We then Myers and Franklin but on know to let the our highlights the I you I year with hear before Chris share over

Looking we at that XXXX, we outstanding delivered feel results.

the high case this future strategic metrics. When on that team. taking plans to going that strategic that’s under initiatives our Our of growth the for leadership is planning our our be case top care our priority and customers of how of XX we strategic we be measures and core The profitability in formalized years process that. to execute just take always and ago the our going of plans was each

of XX.X%. For an metrics, or a of average tangible share return common the on X.XX% year, we and in ROAA buybacks, of adjusted about equity adjusted assets resulted return $X.XX no on EPS XXXX over X.X% which delivered with on average those growth

X.X%, bearing we XX% by non-interest by acquired by deposits balances, Excluding customer grew deposits loans and XX.X%. increased while

exciting We result, a a the XXXX as XXXX, profitability successful growth are those from call also was standpoint. financial metrics, proud strategic of we and an Year. for and year us

in continuing forward performed build share and from has acquisition to Atlantic to Xth. in fifth branches we XX from XXth We Capital those than increasing expected and Chattanooga to from acquired our Knoxville presence to in seventh on look Bank, so markets. have our market better far That

aligning non-interest sharing for of bearing responsible the of the partially our We operations, the customer channels our directly strategy. our organic to division platform, converted focus treasury also for more course reorganized outstanding year. and XX.X% our relationship mortgage new -- We growth is deposit with which the our over wholesale

drag properly and Bowling that environment National now we in positioned we Bank we the share a enter avoiding Kentucky, while feel over favorable MSA of pending where will are in in higher excel earnings market Scottsville, Green announced rank rate share Scottsville, the Farmers XX% the on seventh to acquisition including We environments. And market Kentucky.

continuing closing are anticipate a to and these these officially and and of results. very that We family. and to year proud in mid-February Also to acquisition look deliver associates we strong customers FirstBank our associates very welcome forward for execute our

to will turn talk to I results. through now over quarterly James it our

James Gordon

share, our me with exciting $X.XX of tangible over adjusted per of of near-term. X.XX% quarter Thanks, Chris, in We quarter, time average ROAA We some loan and XXXX adjusted and of company. return the EPS which quarter adjusted of XX% let equity good and on XX.X%. evening, our X% current this the delivered first diluted X.X% to guidance solid results with thoughts the is earnings. fourth an of had common in share is history on of But another growth for line Obviously, everyone. the annualized

the Customer deposits $XXX.X growth banking markets our X.X% The annualized. quarter, up in for at million deposits other decline overall the slightly deposits. in excluding annualized were mortgage grew and XX.X%

were X.XX% non-accruals Our interest the of XX expected of felt impact within points X.XX%. impact and to and October’s our at range accretion of rate X.XX% the when net cuts September basis we margin as excluding

of current a margin, points cost X.XX%. interest collections, our non-accrual basis and for our was and XX yield interest loans our on X.XX%, the month guidepost deposits accretion excluding total net December, As was contractual of was

the actively have quarter first deposit was fourth that the and from We we on compared believe seen we at slight to are the a an We our of to but quarter pause we downward yields half second may that over dip year. have believe our margin improve quarter, a down. costs in where pressure on margin the given December managing loan have we the opportunity that

and December, expected in resulting total $X contribution November better results mortgage remain in million. Mortgage than higher anticipated delivered volumes pre-tax margins and as a than of

upon results deliver slightly contribution to rate pre-tax largely will the overall to of For that mortgage $XX.X XXXX, target flat be That from would environment. we depended million. down adjusted contribution XXXX be hope total

the our saw net in net you points quarter. that our expense remaining of of a balance the of million provision single as quarter increase basis this charge-offs majority quarter. charge-offs is $X.X points loans it XX we for had for XX The accounted increase this or accounted of credit, and that and our for loan On million of credit our basis charge-offs $X.X non-accrual

related a our markets. single continue we remain referenced strengths with The isolated an of solid loan see overall credit in our and specific is portfolio to occurrence trends The underlying events borrower. to

will summary I to Chris With Black the turn Financials it quarter, Franklin over speak to of about that quarter.

Chris Black

of Good quarter a XX.X% $X.XX fourth Thanks, We evening, delivered everyone. quarter for XXXX. of strong We the from Franklin Financial. up quarter, James. the core had EPS at

is continue and reduction We select the is portfolio. our of activities, to portfolio optimization the of progress and banking just see on balance X.X% million than sheet non-core of in it our our down was smaller to total $XXX rotation XXXX quarter fourth

was securities XX.X% total million the Our assets than down fourth XX.X% ago. $XXX year XXXX, portfolio smaller from quarter to it a in of of was

decreased over the We our million non-core of $XXX down XXXX. course have funding, significantly also

from quarter improved have points from quarter with As profitable fourth basis points basis XX result, and up metrics our of the interest last a XX margin net XXXX.

very with excited going FB strong forward core Financial a the build We upon community bank. are forces and join to

to thoughts share Myers our turn now to will I his merger. it on

Myers Jones

Thanks, Chris. Hello, everyone.

community it each We to celebrate negotiation is bank, customer-centric FirstBank occasion. a that This be the are that we premier would the great period our a here very of of of cultures became momentous Together Tennessee’s the tonight compatible. be opportunity and believe with partnership. have beginning over course clear we diligence

I I stronger believe than thank our customers our and all all ever. our together be excited will our Synergy think potential that should FirstBank. about to point we be this for truly to that better serve getting with I be want chapter together will our communities this of Franklin we will us and associates and next ability to and

the his our With to for comments Holmes over call Chris will turn that, on back merger. I

Chris Holmes

and Myers you, Thank Chris.

driving And there for combination. are here three with We excited at table the to be this you are sitting reasons tonight.

First, expanding penetration combined deepening Nashville MSA. of in the the the the presence and bank

talent the Second, with base Synergy bankers. community FirstBank combining strong of Franklin

our a approach value tangible our opportunity per protective share. to balance and to the improve book taking earnings third, And share, per while sheet meaningfully

we attractive locations. On highly will at to branches item, add eight distribution the first MSA, the all the network the across

growth time we tremendous believe provides As and said that scale and value power is profitability. in and again, density pricing and a in accelerate in That we banking growth. recognition, market ability to brand --

and we going scale propel we that two been achieve since to density and preach building in NASH our believe day, -- every and that the growth we merger profitability. that we objectives this towards with have is prepare XXXX The

of County will from broader first in ranked XXth Following transaction, In in market deposit the County the $X share. Davidson deposits. move up County, of are with terms and we MSA in Rutherford we six billion close in Williamson to second in XX Nashville

a driving as have as are is. it Rutherford standpoint, counties the being MSA we From Nashville forces behind attractive intent that demographic

accounting wealthiest. seen Rutherford third wealthiest have the We the it’s while Tennessee, in is

counties two less exclude residents. the XXXX counties you state, than to XXXX From with when XX,XXX growing were Williamson and the Rutherford fastest in markets

years, small the county growing five Tennessee be accounting. Over fastest the in have expected the again we Rutherford, is fastest excluding the seen next and third to

years, we the irrelevant Franklin the exception number largely have Well, [ph] of community. in of with is FirstBank Farbee presence for a have there been

the in dominance. has market due progress Synergy been of partially Franklin lack Our to

great been We wall same Franklin’s It on unable in and feels so head our have best have against But doing the due been we largely the to team going deep Williamson forward. beating relationships compete do within County. our to community. stop to to be the

we growth the the and bank market been in to that have advantage largest excited experienced, and has network Bradford are second for have but Rutherford steady with about County a acquisition needed future not we fully market the expanded our with there take community. in Synergy we had XXXX, share since scale we that FirstBank distribution of county, become that the Franklin compared County in has

Franklin diligence a in core assets issues. the that has and and due been the for we by non-core public community best very bankers two their markets. of Synergy, in we number was powerful the during funding noise a What are had past with reason the less the asset On the strong around team bankers the built their risk recognized that asset partnering to in found believe markets core

modeled footprint our This to despite If have plan our you assumptions, combined transaction. consolidate we saving cost look relatively our XX% on in seven of cost low branches saves rate or at our is closures this almost XX half Franklin get those merger offer. the this not Synergy and branches of best banks be will what of all will branches, keep we that two of the in added

sandbagging I a investor, assume we If that number. or might analyst XX% bank I were that were with

not. are We

We value highest and leadership. entered team have agreements their making senior of are key with transition this bankers priority. members our We into employment Franklin of we

Some or cost of you this the that transaction. M&A management in not present savings desired bank from most get or

At have they friends and They an the dominate be. their communities. club group core incredibly is their They hold a all definition They specific our Synergy their in should epitomizes of community relationship managers customers. interactive strong bank banker board and they everything of in travel They that leadership for and their live neighbors. markets. have Franklin serve positions

to they community In have a been team the be, have our of strong to desired markets. is exactly has able In we and that were bank Franklin commercial Nashville, transition bank, fact, strong but very managed community we that. the FirstBank ourselves never into

them exceptional this out with We do. to very with even are they pair team additional more already provide than resources win them and go to to and hopefully, enable excited

operations One considering time a operations been together part has the of several operations that company between -- in some union of pieces bringing the the the for is companies other part compelling the center. FirstBank of of centralized two

the this of maintain transaction, Downtown headquarters buildings be -- will turning close we that in primary Franklin, in to operation will in center. plan Franklin of Lexington, while keep Tennessee, into our of portions the Following Downtown location Franklin cluster we Synergy’s we some into

continues company the combined Williamson County company our to bank we mature franchise. We be Southeast of and to want cornerstone grow there as want impact to community community our into leading the a the

they the highly associates, as its as we markets. dominate them value summarize, -- To we to path combine to to the the core community, continue their customers and bank, they and their want support

that the -- boxes to think financial third to think results checks we Moving we the point, make of transaction, investment. the this the the enable us the

tangible are We neutral. value book

by our accretion market. true across while for franchise EPS balance training all are protecting most We that our picking than do value sheet roughly creates in We XX% while more up company and Personally, for this in in mass and the million shareholders. second, the that significant asset and we the I $XX threshold. our value achieve paying believe

transaction we in touch the we double culture, will be estate the on needed leverage risk construction four real want in those. and the lending the to of the that Heading credit we I and profile with healthcare, also commercial things, to funding and concentration, SNC felt the portfolios. diligence how the comfortable

review practices and we a portfolio, comfortable the Following thorough understand portfolios. culture credit are construction the underwriting of credit and the monitoring, credit in culture, with CRE

Middle meeting our Synergy’s time over In with diligence of agree with and team estate and real a Franklin negotiations franchise assessment. Tennessee course after describe leading themselves management they the time as we their

serve the while role the Rutherford monitoring Synergy’s and few the implement managers residential years. and County we work up credit closely construction past company for Officer. Franklin will continuing in a with officer to Williamson senior they responsibility will of will taking some relationship that credit place FirstBank We practices bankers Their with Chief combined over existing put Credit take our

Construction to the the move will close development transaction. at and XXX% balances capital this over risk-based of threshold

think and growth managed of that capital the good is do policy operate in and quarters concentration risk-based capital close goal gradually exposures that the of the near to level. we the is at over goal our XXX% that to and However, through four risk-based following portfolio our controlling to that managing

and been concentrate XXXX let use extensive acquisition. whole On the liability out done their not and initial Synergy have core liabilities potentially Franklin side to third will will let the close The we have both the of prior balance the culture grow to -- the funding was an had treasury strategy sheet, that function organically broker and concerned, on to provides of was funding through of to that of deposits. with wholesale upon

results to team management look of the objectives We fostering adding relationships year, treasury that services Synergy’s the to forward they our past their process and to retail some bankers over Franklin the begun for past more started couple of the Over has deposit and see with progress products. quarters. management

will work together trend customer We continue with deposits. to we of the -- work growing

totaling concern, Franklin’s portfolios On healthcare to and have national corporate divest the $XXX decided credits, shared last wholly of million. we

exited portfolios plan We reflected I close, the if of in day have first to be these James assumed a mark financial we reflective impact the have exiting of close the let and liquidation on that two through -- wholly quarter not we of divested will value the transaction. assumed after fully walk from following business. of this

to are Franklin can’t strategic this our are have family. thrilled Synergy I we and and and say, we also are the of we welcome members the going that the see. to we into wait -- we deal think FirstBank nature impact to We think customers related All with team financial to

detail. transaction turn will James financial little to I call about and talk overview, that, bit more With the over the to a

James Gordon

Chris. Thanks,

one we banking add the of franchise be in to Synergy believe I First, Middle to and this want are excited are strongest just to family. the able Tennessee thrilled We to is the how their Franklin associates merger. about emphasize that FirstBank we community

working over this course obvious team and to of the same Our reality. they been feel process a way make tirelessly to the this have

for I Moving key a by assumptions few on provide but do won’t financial of go slide, want some our transaction. -- on color this I slide to

portfolio. the assumptions, their of Looking first underwent review thorough credit we a to

of construction well supplemented corporate deeper big portfolio, a and the construction owner-occupied development of CRE, XX% credit, side including hired of discussions as loan shared evaluated We the portfolio portfolios. and the the non-owner four national and portfolio, the and of by and as firm CRE C&I development review the additional healthcare core we on CRE, XX% XX% occupied

and We philosophy, book. that Ultimately, banking healthcare billion discussions business, the also on with leverage community portfolio. monitoring current bank, management at had and the are portfolios credit we $XXX developed the approximately a $X.X SNC, is senior corporate, lending million which distinct view book and extensive there core of two their

we We growing involve markets their banking be think sponsors. not making our have local or customers continue feel feels looks and The loans with like aligned generally if philosophy book those it excited as there was core we book. good and financial community does corporate the are We to not we presence portfolio. would that that in about it

on and be not that balance that have on will we portfolio discount assumed our the putting to book to exited. protect We value if sheet is a tangible portfolio

plumped balance over presentation that those have is loans to at mark We we for into held CCD number of come this our will treat close our assumption sheet any for that sale. and

loans wholesale result that roughly loss of roughly a assumed their basis. have as have in income that assumed on matching We million will million and divesting $XX a of $XXX net funding decrease

non-accretable credit Through a for ultimately handle marks allowance core that seasonal in loss assume review the exit based and the that will credit reserve we of portfolio. portfolio losses non-strategic have of the X.X% for the

We on have also through between the combined This and million loans credit over initial come and fair evenly X.X% lives interest loan gross in of marks. that credit value rate mark income of will are $XXX also assumed an back roughly the on approximately split portfolio approximately marks rate accretable portfolio X.X%. of Synergy’s Franklin are the

expense, XXX% XXXX. Franklin XX% phased savings assumed in net Synergy’s XXXX% and phase in have We stand-alone interest with to over XX% cost

fully to assumed roughly have due billion to to under try Durbin choose million XX, could in XXXX. tax, $X.X possible If during revenue December we close lost as We stay for phased XXXX. assets the $XX when we of interchange the in after are

to XX, safe. that we income loss have modeled But June on be beginning XXXX

With achieve neutral. this earnings roughly those estimate taking we advantage while annually staying REIT we XX% $X.X assumed adjustments accretion EPS have tax Synergy’s through transaction, book value will Franklin subsidiary tangible in are that conservatively forward. and from million power, gained stand-alone we Franklin that of going We benefit state

we typical, our is base, are hiring synergies but no the revenues, assume the do of additional identifiable grow include believe Franklin’s items improving we that FirstBank opportunities strength brand managers wealth in of increased there As to Tennessee to funding in due modeling, Nashville. Middle and plenty across revenue easily bankers

due for transaction the answer we creates the accretion that questions per share, and diligence a you growth, our that earnings intangible have stakeholders. process created happy per protects for In in summary, am of sheet balance our to share value additional while in which providing any on and session. book I value might question-and-answer modeling all all

Now I back it to over turn Chris. will

Chris Holmes

Thank you, James.

the welcome welcome Franklin family. remain team Synergy to FirstBank Myers and and we into Chris until We already entire but the unofficial heartfelt. will We has it’s close

think that better be We we ever. very will together serve base positioned than well our to customer

metrics, We most are combination Tennessee. financial believe and importantly, community this the in that franchise premier thrilled Middle with we the banking creates

remarks on call to questions. now and my like completes it open for that Operator, would this we up evening’s

Operator

Thank [Operator with first will question Instructions] SunTrust. you. Please go We Jennifer take from ahead. Demba our

Jennifer Demba

evening. Good Thank you.

Chris Holmes

Demba. evening, Good

Jennifer Demba

talk of and you Can talking background deal, been came together you about how just how have the the everything guys long yet?

Chris Holmes

Yeah.

are we each headquarters blocks we Franklin two the off, I a branch so pushing and know Synergy guess, are other. first from sitting, box, two we So, box, the

Nashville football that. in and socially other things Downtown and compete, Our headquarters other know Downtown like Franklin. games to and see office each each But go we we we we when and do

we So know folks. the

year. quarter guess, the and of of that in of sort quarter really picked conversation up -- announcement. it the led steam to started, the And I end near we the This and last

been was several have So has known -- both employee Chris the at sitting also an of we we organizations. is folks table there, -- Black

good and Franklin He -- of some CFO, the he with the their the sort left terms. good hands, it. for than left same go how -- was other didn’t level that the on financial did with he of we coming he fact with was to -- and it good that’s with anything thing so information was, but him, so with And CFO he -- he there. to there left language the left at a FirstBank comfortable become But luck good terms Synergy -- was together, as because talk

Jennifer Demba

you. Appreciate Okay. Thank it.

Chris Holmes

Sure.

Operator

will take Scouten with from Piper Stephen We next question our Sandler.

Stephen Scouten

evening. Good everyone. Hi,

Chris Holmes

Good evening, Stephen.

Stephen Scouten

the So deal. on congrats

to guess, exciting fair assume see on other the to be it’s think looking focusing to pretty still it’s on first markets? about XXXX what think it they will all of you MSA. would in is I about, incremental came exciting, all, focus deals or you this at came other if that I you Nashville for

Chris Holmes

can little, seeing where going are about take so Yeah. we we -- focused going I we guys, This execution a for our talking like, to are each it’s what they other. was and be attention, seeing on all not be this on of focus on these to have XXXX totally deal

We really be are at things there will Stephen, that to I be and bankers focused going see like and this we and continue this during dialog conferences am as to on sure will but casual XXXX. solely

Stephen Scouten

targets to of producers, those about you retention in of the assumed to retaining When put are about currently folks all under of or the talking are put goals the And you of Great. those are look retention presentation agreements a spoke people. lot talent, or retention revenue the what all transpiring around management. hear have will retention that or be you that

Chris Holmes

Well, Rutherford retain are -- Synergy. Williamson the our really the vast to producers, and terms Franklin to we good in them. target revenue both majority some of bankers There the counties, bulk But of that is retain certainly so side. on with and key want is XXX% of all Yeah.

using have things the to that to those you So would will tools apply types the we to be tools all things try we will like, through will retention well, hang retention be work on of that we folks. the

is thing talk we makes I great we I an work, first add thing bank. the financial is is -- being what that great list will the performer we one third the and a being our being second And first mean, a place one elite success, company’s about on this, to community -- when

do our it asset because $XX up the the a but bank community of to size how you to are we going still size This is not bank. billion, close move we about think to it’s

great place the environment folks that’s to the great retain culture been a having and way a a but that do so, real work and those has companies first is great that. both And you and of

together, think will that site. So we it we on when think the we bring keep people

Stephen Scouten

obviously, a great. you doing restructuring And out Franklin will NIM some on standalone a talk you what much things. pro NIM roughly Can you and has numbers guys the then have other And then, lower balance shake than forma the do sheet That’s if think a basis. are or impact little that you where preliminary about will of be, any there? bit you here

Chris Holmes

talk right, we I we about, let James Yeah. probably the a been will will that’s way there’s but you that James and But think terribly NIM. are aggressive because modeled on difference going in we the further the and comment to haven’t it. have don’t NIM last in do forward

James Gordon

Yeah.

we I out to going that the portfolio think it in our down I kind the million XXX funding deposits that And, sale we, of forward growing that levels on with over margin margin opportunity expect the will as bring will will into we of the the immediately, to range. the as our bring on think, funding work as happen. the with the the rebuild But of wholesale sheet. side time balance to focus take we of some back time $XXX over be

Stephen Scouten

activities you a kind lending in standalone, And overall some pretty guiding. about maybe demand that last just helpful. late the loan where kind of customer of much and are of you been looked talking kind of guys were FBK thing terms had just structures But it That’s bit of of type little was what Okay. line curious with like last you of on growth or in quarter? kind cycle seeing one

James Gordon

Yeah.

think. So we quarter, during around yes, are the I at we XXX, were come

Chris Holmes

Yeah. Absolutely.

James Gordon

year. for like the In terms almost XX% growth, quarter, so loan for of the X%

still I few terms. had longer think for been out things and we on crazy little see seen We to that rate a we fixed -- some bit the specifically rate will price so, go a when on And have the side, quarter, those us, we that fixed front like on you the especially -- numbers. things

made quite we to much the say, the not and as in But much had I seen middle was relatively see good demand, strong, it’s that strong, haven’t have a things still as or terms us we what we change still part would places demand be in we -- year market so to the momentum happening Nashville of wonder like lot just continues seen in the in particularly of Chattanooga of change in market, or but in Memphis. see seen Nashville pretty haven’t

James Gordon

see early payoffs expect We that continue the as to us well. did and that probably some near-term elevated range keep to in over

Chris Holmes

payoffs we have is good a then -- That and Yeah. the in the did in part We point, some in we see first earlier James. more early fourth have of actually year. seen the the

Stephen Scouten

Great. Well, and quarters again, really congrats solid on guys two deal. thanks, and a great

Chris Holmes

Stephen. Thanks, Yeah.

James Gordon

Stephen. Thanks,

Operator

will question with KBW. is We Mealor from take next our Catherine

Catherine Mealor

evening. Good Thanks.

Chris Holmes

Catherine. evening, Good

James Gordon

Good afternoon, Catherine.

Catherine Mealor

I to savings into digging wanted start expense the a little bit.

how but about your billion number the into growth expense for $XX the are cost the Chris, people estimates? and assumptions clear, prepare of much maybe were on think we that you XX%, saving couple You conservative retention the Franklin, should that of you as how baked years those are too at and of being not next into given XX% across

James Gordon

James. is will answer this I that. Catherine, So,

the day there out knowing think someday. started in ago, didn’t or XX We We billion was infrastructure laying would months things. $XX about later. two started I be know that that sooner

So that I a XX than, there reason grew. been historically bit say, months. say, that’s last, our been the higher one little would we laying It’s in expense and have over

would XX% would you a to $XX building of well-positioned XX%, over we that if have that I meet our from cost said, branch built and higher, a that, of looked the through look we a And run as demands A from Chris particular passing then people cost keeping the saving it’s of as achievable are positions to part I that we maintain level of rate keeping at, the some regulatory. as say, customers keep billion -- well things But that in be in overall we to think consolidations or lot we balance then our as think, rate. a I and and some at the sheet infrastructure lot that increase kept that. into bringing are the incremental very think of -- for lot offsetting

Chris Holmes

a things of I Catherine. to for will bring clarity. here bit Hey, little just add two commentary and

First, center the did there. be there that some expense having to having we that Franklin that be be will will will establishing we in mention related operations center, operation

And second eliminated. That for little have that bit the side, of the account. there’s the get reduction then but the allow half Durbin thing Durbin the didn’t we take of do ‘XX, we amendment. there’s to but a doesn’t so that come Durbin, other amendment, we into related revenue non-expense expense until do in And

Catherine Mealor

kind big And picture. will Okay. the think forma you and I the of of then accretive that margin speaking should you we to do as you these deposits. picture on how core How bring that companies, with generally, the ROE, just you that the know effect back profitability the but some think should down pro big of But, about originally ROA? grow combination get mentioned two about the it’s the then

Chris Holmes

accretive have about pro a the tangible and standpoint, big profitability comment to think let going slightly average picture, big return to and modeled ROE accretive the to the comment it’s on James forma our effect slightly picture our on to and am I forward Yeah. on when From moving we you common. in on ROE.

particularly, it The are we and been much we the about about side deposit at provision part in deposit all haven’t are reasonably I there. the opportunities exciting excited it sheet. the in we balance so there’s, the But side excited what that so gives really a there and on I’d built us haven’t guess something of that say built we has

are about -- I’d is, bank. in excited we I the And am say, we of communities a are community the other our that lot thing,

XX% XX%, never XX%, of that share we of smaller in customer lot Nashville, In lot bank a never are we the with market been have is a debt. knows that We communities. that, community really been

-- of Nashville. a And more successful, we have a then, commercial so have been been but we lot in we are success more

excited about us that the does of that, going And we revenue but we from so to not built that’s in some this there give opportunity. are again, and model, but so, course be don’t, that

specifics, many and it points know we so, ROTC ROA it was And it exactly know how basis -- in was… I I in but was, don’t

James Gordon

think, ROTC, little a and at that’s generally consensus I think points that that. -- consensus on back capital will little well. over XXX in over up at as would on our before, to it out that’s planning XX%, capital a to number point lot that that’s end increase with Yeah. I We basis I to help doesn’t deploy a think, take of excess that there,

lot of a efficiency the with a and irregardless think, adding along of help XX% together overall lot opportunity still efficiency other -- that’s creates strong we I there’s it talk efficiency. with when they that about scale savings, operating a already Then, big on a that cost the ratio our density markets and operate fairly will

efficiency pile the for on the but front smaller lessens too. overall pile, that becomes the impact overall mortgages It’s that to large, still on the to the smaller

after we this goal continue we will is in with financial over that the Our to performer transaction. think be time and lead

Catherine Mealor

be forma is $XX Great. I How will growth in you pro may do And last on one think growth, asset thing you about your if rate? pro forma. billion over

Chris Holmes

Yeah.

steady. we on kept our modeled growth in We forma things than pro have What the balance sheet. rate

James Gordon

monitor off focusing about deposits. and and We the then number first will then on I non-strategic after years consensus say, for that. couple X% we have would by Yeah. of the forward going the assets taking

replace that into a to not us will both that, that producers as to continue as in fairly will opportunity have forward, solid that. will think going We to we to have well big numbers growth I think us model some middle our help in deposit growth. loan add of did that help I the will help deposits it, market, C&I call I business and and

Catherine Mealor

so and Thank congrats. you much Great.

Chris Holmes

you. Thank

James Gordon

Thank you, Catherine.

Operator

next our Stafford from Tyler Stephens. question with take will We

Tyler Stafford

guys. Hey. Good evening,

Chris Holmes

evening. Good

James Gordon

Tyler. evening, you are Good How doing?

Tyler Stafford

viewing Good. guys. of give Thanks about the the point, and or At kind us business for quarter had could this deals congratulations to any FBK, you mortgage on legacy the Holmes, how first, outlook. on start any Chris you Maybe, XXXX? you are have do clear clarity you just and

Chris Holmes

Yeah.

be it. down, but dependent today similar it slightly our As It production to thinking we way is to we be thinking could down it, And rate it all this could we point, slightly or yeah, a we of is be -- are, just the what could flat of of on our terms in going XXXX been think are and terms it’s in view it we profitability. at has the XXXX of of cycle. course, are

Tyler Stafford

to And Thanks. in Okay. comments then, just about going the of back the just release tonight one James, the earnings XXXX. trajectory margin for

stabilized then kind some half. opportunities of the and over back half in mentioned for first You the expansion

what view? the impacting basis puts kind standalone margin that that for of takes the is you see XXXX, a you and see on as Just

James Gordon

Yeah.

second So, I a we of think, the have on opportunity. lot half,

back of gone have XXXX. was you renewal helped we ‘XX and to the XX-month, lot a first will that of CD that did promo was third of that’s -- We those of through one in kind the cycle products remember of campaigns fourth us. If quarters

product third a was around that product, we Then sorry, XX-month carries X% maturing. of quarter that through in and There’s million did also that quarter. that start XX-month mean, fourth I the will $XXX at the starts

today data We XXX balance as rate and we continue think XXX, go be the rates that. would to

We rate success around rate capturing rollover a rates. the XX% good at have new on of XX-month that had

So factor flat. you kept in there and balance of kind the that

still term were we deposit. balanced that we So also the in growing keeping flat net-net

big the fourth in bit a particularly the us I third quarter. So I the think little the of opportunity for in in second There’s and the quarter, in others come second quarter year. -- of the most it’s but half think, a

Tyler Stafford

That’s Okay. helpful. Thanks.

to to deal. Durbin FBK? confirm shifting we the just the -- impacts pre-tax include of not Franklin, does both Just it $X that FBK just just Can over Franklin and million

Chris Holmes

it -- It yeah, does.

Tyler Stafford

Okay.

Chris Holmes

Yeah. yes. but ours, Primarily

Tyler Stafford

FirstBank… Primarily,

James Gordon

bigger book FBK, have assignment. a relates, have must got we -- Tyler, it retail we say, retail

Tyler Stafford

for right. Yeah. that. Thanks. Yeah. All Thanks clarifying

I merger magnitude was baked that. surprised On what’s give color the $XX any you a of about cost, little $XX Can bit us the of of million into million? that

James Gordon

third buyouts, the will and Yeah. be cost third of that fairly between to cost, other is professionals those conversion kind then split data of is high numbers closing on is, a and deal employment will say, that will deal that size and contract process. branch and which then bankers, round then fees to other investment, call through contracts I lawyers related I and need related that a about it, roughly of transaction of kind processing, in would another items, about third the

Tyler Stafford

Chris but the have page Okay. that there any five, exact may how Got didn’t executives for about what company their are Franklin expected others. I it. the about combined -- involvement talked at that for expectation enter this key Myers I missed Is point, forward. something going or you guess, employment can the what this see in -- that roles deck, is in the agreements, I but or the share

Chris Holmes

those Yeah. those than general, this. involved, be want be all forward in A deeper They and just in out We involved so we as worked not and look on will, out point, to are but share and we don’t it worked can details so, yet. to because going are all and share that, they details to any at B, this

Tyler Stafford

around just then earlier from on lastly impacts. And following up Steve’s Okay. the me, margin question just core

I think this more ago Black. a Chris a of of and maybe for quarters couple question

XXX. the about quarters of guys syndicated that around talked book couple a you that ago, Franklin was think LIBOR I

and the do assets guys off you of have margin XXX just lower HLB at think So yield kind those yielding rate do pick-up you of off? and you once running the just that list is $XXX you ballpark that are running exit about million what are kind the

James Gordon

Sure.

ballpark I re-pricing. are terms so what become and James of book the that yields bit some on of a that little to loan on probably So think we in said, standalone the in akin X.X%

situated think similarly the on as see I well. horizon that we

inside across -- loans with across and about governance. but the the specifically wholesale footprint, the, on both So the

James Gordon

Okay.

portfolio. signed roughly with about up we the million how We on have $XX after that X.XX a spread That’s came tax.

Tyler Stafford

for. it. what guys. appreciate I All I right. That’s was Thanks looking

Chris Holmes

you. Thank

James Gordon

Tyler. Thanks,

Operator

James. We will take our next question from Daniel Cardenas with Raymond

Daniel Cardenas

guys. afternoon, Good

Chris Holmes

Daniel. Hi,

James Gordon

Hi, Dan.

Daniel Cardenas

deal. Congrats on the

XXXX legacy follow-up kind here, back a I half contribution, accretion accretion couple about in going rate the look of the in quick of mean I questions, at of one to what run contribution. guess, bit for FirstBank, accelerated than of kind I to in more a margin for little QX, of seems at question terms previous the as a least just think be first quarters. Just good to

Chris Holmes

Yeah.

little in go-forward basis, credits So somewhere million just $X.X than before you it of that slightly on on transaction some we on bit payoffs different generally a you may that range the when would from say, those was $X.X a higher on payoffs going I really are the that a generated and marks that this so. basis run be million standalone to to by that, higher is have.

Daniel Cardenas

core, core that a pro that X. that on is range number that’s you all is the gave in. X basis In Okay. a forma

Chris Holmes

more That’s core. Yes.

Daniel Cardenas

division. room expenses to then And Excellent. How XXXX? thinking improvement mortgages just of back terms for be mortgage the there there? additional jumping in Okay. in we quickly that should Is for about

Chris Holmes

so. hope the for the hope gotten with more the always continues We efficient There’s efficiency, it so. for guys and we that’s the seasonality room with imagine an of improvement business. for mortgage, we adjusting our hope responsible say, it’s improve downsizing It’s and -- to

James Gordon

Yeah.

this quarter. I that, the that on say, thing other last quarter, one is, because would of versus The distorts, say size of

thing mortgage the value that’s law. income actually mortgage the been other you so or take and of the income way the servicing against The servicing that, distorted do -- that’s somewhat revenue, rights is on fair the presentation the you a and

last the the I at the over as for year revenue guess, hope well. in down least course or that’s three So quarters that quarters, of we slows of the revenue, number two next

if work the you out, but the of mortgage is so for take And efficiency better, ratio over a still opportunity through to that that. little time course there looks

Daniel Cardenas

-- then, to Great. that safe the to here? transaction given that should And Okay. pending the burner guess, in buybacks take it assume deal was going back I is Kentucky maybe in the announced --

Chris Holmes

assume at the to near-term. Yeah. in least It’s safe

James Gordon

really we deals. think, a even the ability use I at have structures still mean, point, based but I the that not Yeah. this of on that both authorization, legal standpoint, from but to

Daniel Cardenas

on have transaction. questions other my Again All Great. the congrats Okay. asked and been answered.

Chris Holmes

Thanks, Dan.

James Gordon

Thanks, Dan.

Operator

time, for have back conference questions or in turn to closing no would this we like the Chris At remarks. any I to Holmes additional further the queue.

Chris Holmes

partners between appreciate very you moving us you and with Once evening much. we Thank Okay. are again, Franklin about forward excited with into FDK Franklin. and we staying more with the as

have all evening. good a and thank So you

Operator

your appreciate We today’s conference. concludes Ladies this participation. gentlemen, and

You at this time. disconnect may