FB Financial (FBK)

Regional banking company FB Financial (NYSE:FBK) announced better-than-expected revenue in Q3 CY2025, with sales up 94.2% year on year to $173.9 million. Its non-GAAP profit of $1.07 per share was 11.5% above analysts’ consensus estimates.

Company Overview

Founded in 1906 and operating through more than a century of economic cycles, FB Financial (NYSE:FBK) operates FirstBank, providing commercial and consumer banking services across Tennessee, Kentucky, Alabama, and North Georgia.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

FB Financial competes with other regional banks operating in the Southeast, including Pinnacle Financial Partners (NASDAQ:PNFP), First Horizon (NYSE:FHN), Regions Financial (NYSE:RF), and Truist Financial (NYSE:TFC), as well as national banks and local community banks throughout its markets.

From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions. Unfortunately, FB Financial struggled to consistently increase demand as its $511.8 million of revenue for the trailing 12 months was close to its revenue five years ago. This wasn’t a great result, but there are still things to like about FB Financial.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. FB Financial’s annualized revenue growth of 1.9% over the last two years is above its five-year trend, but we were still disappointed by the results. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, FB Financial reported magnificent year-on-year revenue growth of 94.2%, and its $173.9 million of revenue beat Wall Street’s estimates by 4.2%.

Net interest income made up 81.6% of the company’s total revenue during the last five years, meaning FB Financial barely relies on non-interest income to drive its overall growth.

Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.

Topline growth alone doesn't tell the complete story - the profitability of that growth shapes actual earnings impact. Banks track this dynamic through efficiency ratios, which compare non-interest expenses such as personnel, rent, IT, and marketing costs to total revenue streams.

Investors focus on efficiency ratio changes rather than absolute levels, understanding that expense structures vary by revenue mix. Counterintuitively, lower efficiency ratios indicate better performance since they represent lower costs relative to revenue.

Over the last five years, FB Financial’s efficiency ratio has swelled by 3.5 percentage points, going from 65.5% to 56.7%. Said differently, the company’s expenses have grown at a slower rate than revenue, which typically signals prudent management.

In Q3, FB Financial’s efficiency ratio was 53.3%, beating analysts’ expectations by 210 basis points (100 basis points = 1 percentage point). This result was 5.1 percentage points better than the same quarter last year.

For the next 12 months, Wall Street expects FB Financial to rein in some of its expenses as it anticipates an efficiency ratio of 52.9%.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

FB Financial’s EPS grew at an unimpressive 3.5% compounded annual growth rate over the last five years. This performance was better than its flat revenue, but we take it with a grain of salt because its efficiency ratio didn’t improve and it didn’t repurchase its shares, meaning the delta came from factors we consider non-core or less sustainable over the long term.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For FB Financial, its two-year annual EPS growth of 8.7% was higher than its five-year trend. This acceleration made it one of the faster-growing banking companies in recent history.

In Q3, FB Financial reported adjusted EPS of $1.07, up from $0.86 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects FB Financial’s full-year EPS of $3.65 to grow 19.9%.

Banks operate as balance sheet businesses, with profits generated through borrowing and lending activities. Valuations reflect this reality, emphasizing balance sheet strength and long-term book value compounding ability.

This explains why tangible book value per share (TBVPS) stands as the premier banking metric. TBVPS strips away questionable intangible assets, revealing concrete per-share net worth that investors can trust. Other (and more commonly known) per-share metrics like EPS can sometimes be murky due to M&A or accounting rules allowing for loan losses to be spread out.

FB Financial’s TBVPS grew at an impressive 7.4% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 11.7% annually over the last two years from $23.93 to $29.83 per share.

Over the next 12 months, Consensus estimates call for FB Financial’s TBVPS to grow by 12.1% to $33.45, top-notch growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, FB Financial has averaged a Tier 1 capital ratio of 12.5%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of bank funding. Banks maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.

Over the last five years, FB Financial has averaged an ROE of 9.4%, healthy for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired. This shows FB Financial has a decent competitive moat.

We were impressed by how significantly FB Financial blew past analysts’ net interest income expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 2.9% to $58 immediately following the results.

Updated: December 4, 2025 at 11:19 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in FB Financial.

FB Financial isn’t a terrible business, but it doesn’t pass our quality test. To kick things off, its revenue growth was weak over the last five years. And while FB Financial’s estimated net interest income growth for the next 12 months is great, its weak EPS growth over the last five years shows it’s failed to produce meaningful profits for shareholders.

FB Financial’s P/B ratio based on the next 12 months is 1.5x. This valuation multiple is fair, but we don’t have much faith in the company. We're fairly confident there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $65.17 on the company (compared to the current share price of $57.25).