FBフィナンシャル（FBK）2026年第3四半期決算説明会：貸出伸び率が9.7%に到達、NIMは3.83%

FB Financial Corporation (NYSE: FBK) は、2026年第3四半期に堅調な収益性と1桁台後半の貸借対照表の成長を報告しました。預金金利の設定や住宅ローン事業の収益減少が利ざやを圧迫したものの、経営陣は通期の成長率および純受取利息率の見通しを維持しました。

要点

• 2026年第3四半期の純利益は6,020万ドル、調整後ベースでは6,090万ドルとなりました。希薄化後EPSは1.20ドルで、調整後EPSは1.21ドルでした。
• 貸出金は年率換算で9.7%増加し、経営陣が予測していた1桁台半ばから後半という見通しの範囲の上限付近となりました。総預金は8.8%増加し、仲介預金が減少した一方で、顧客預金は年率換算で11.2%増加しました。
• 純受取利息率は前四半期比で12ベーシスポイント低下し、3.83%となりました。経営陣は、未収利息の戻し入れや買収会計によるアクレションの減少を含む特定項目を調整した実質的な純受取利息率を約3.88%としています。
• 平均有形株主資本利益率は15.2%、調整後ベースでは15.7%でした。調整後効率比率は54.3%となり、銀行セグメントの効率比率は50.8%でした。
• 信用動向は安定を維持しました。貸倒引当金繰入額は140万ドルで、当四半期末の引当金カバー率は1.47%でした。経営陣によると、非計上債権に分類変更された約1,300万ドルのローンは十分な担保が設定されており、予想損失は限られているとのことです。
• 経営陣は引き続き、通期の貸出金および預金の成長率を1桁台半ばから後半の範囲、ローン・アクレションを除く純受取利息率を3.7%〜3.8%と見込んでいます。

主要財務データ

FB Financialの新規公開株（IPO）以来、その他の包括利益累計額を除く1株あたり有形純資産価格は、年平均複合成長率11.3%で増加しています。

事業および営業業績

貸出金の増加は、法人向け事業および個人向け事業の全般に広がりました。地域市場では取引関係に基づく一貫した成長が見られたほか、バーミングハム、チャタヌーガ、ノックスビルがパイプラインを通じたより規模の大きい事業用ローンの組成に貢献しました。

当四半期中、商工業ローンおよび建設ローンの枠利用率は2〜3ポイント低下しました。経営陣によると、利用率は同社の通常の商工業ローン水準である約46%を下回っており、顧客が既存の融資枠を利用した場合、融資額の上振れ余地が残されているとのことです。

預金調達は、ホールセール資金調達よりも顧客との取引関係に引き続き重点を置きました。顧客預金は、新規法人取引や平均残高の増加に支えられ、年率換算で約11%増加しました。特にナッシュビルでは力強い預金成長を達成し、さらにパイプラインには案件が控えています。

住宅ローン事業は長期金利の急上昇による圧迫を受けました。主に住宅ローン事業収入の減少により、非金利収入は130万ドル減少しました。同セグメントはまた、融資実行プラットフォームおよび従属サービス契約の移行に関連する一時点の費用71万9,000ドルを計上しました。この特別費用を除けば、住宅ローンセグメントは黒字を維持しました。

FB Financialは住宅ローン事業を活用して、より幅広い取引関係の構築を図っています。新たな顧客関係プログラムに参加した借り手のうち83%がFirst Bankの当座預金口座を開設しました。彼らの平均預金残高は既存顧客の平均の約2倍であり、FICOスコアの中央値はポートフォリオ平均を上回り、融資比率は二次市場向け組成ローンの水準を下回っていました。

同社はまた、アッシュビル地域のローン組成オフィスをフルサービスの拠点へと転換しました。経営陣はノースカロライナ州西部を継続的な自律的拡大の標的地域と位置付けています。

経営陣による業績見通し

経営陣は、通期の貸出金および預金の成長率が引き続き1桁台半ばから後半の範囲にとどまると見込んでいます。パイプラインは健全さを保っているものの、通常の返済や更新、大規模な法人案件の完了時期の兼ね合いから、第4四半期の成長は緩やかになると予想されます。

ローン・アクレションを除く通期の純受取利息率の見通しは3.7%〜3.8%で据え置かれています。現在のフォワード金利カーブを前提とすると、経営陣は第4四半期のコア純受取利息率が第3四半期の水準近くにとどまると予想しています。預金の改定圧力は、貸借対照表の拡大、安定した貸出金利回り、および同社のわずかにアセット・センシティブなポジションによって概ね相殺される見込みです。

経営陣は、フェデラルファンド（FF）金利が25ベーシスポイント引き上げられるごとに、純受取利息率が約3ベーシスポイント押し上げられると試算しています。ただし、実際のメリットは預金獲得競争や調達コストに左右されます。

同社は、通期の銀行セグメントの費用見通しを、従来の見通し範囲の下限に近い3億2,500万ドル〜3億3,500万ドルに絞り込みました。

高金利環境により、2026年第4四半期および2027年の住宅ローン事業の収益貢献度は低下すると見込まれます。経営陣は住宅ローンチームを維持し、同事業を顧客関係の構築と手数料収入の源泉として維持しつつ、費用を管理していく計画です。

リスクと注力分野

預金獲得競争は高水準のままとなっています。経営陣は、顧客提示金利、仲介調達金利、インデックス連動型預金による圧力を挙げました。四半期終盤の利上げを受け、9月の預金コストは7月および8月よりも上昇しました。

貸出金利の競争も依然として熾烈です。新規貸付金利は前四半期の約6.30%から約6.44%に改善したものの、一部の競合他社がFB Financialとしては対抗できないような低金利で自家用商業用不動産ローンを提供していると経営陣は指摘しました。

取引が十分なリターンを生み出せなくなれば、高金利環境は最終的に融資需要を減退させる可能性があります。経営陣はまだ重大な減速は見られないとし、2027年の活動も引き続き力強いと評したものの、持続的な金利上昇が需要を減退させる可能性があることを認めました。

非計上債権の増加は、主に約1,300万ドルの1件の大口与信によるものです。経営陣によると、このローンには十分かつ流動性の高い担保が設定されており、回収交渉は継続中であるものの、損失発生の程度は限定的であるとの予想を維持しています。

金利の変動、地政学的な動向、エネルギー価格、および財政政策は、同社の事業市場における信用動向や経済活動に影響を与え得る要因であり続けています。

アナリストとの質疑応答の要点

• 貸出金の成長：経営陣は、第4四半期に季節的な返済増加が見込まれるものの、2026年通期の貸出金成長率を1桁台後半と予想しています。業界全体の貸出成長が鈍化したとしても、2027年に市場シェアの拡大を追求する方針です。
• 純利ざやの感応度：貸出金ポートフォリオの約半分、および投資ポートフォリオの61%が変動金利です。四半期終盤の利上げ後に預金金利が速やかに改定されたものの、経営陣は資産のリプライシングが下支えとなると期待しています。
• 資本配分：FB Financialは当四半期中、貸出金の増加および戦略的取り組みを支援するため、1億2,500万ドルの劣後債を発行しました。経営陣は自社株買いも実施しており、今後の自社株買いは株価と資本への影響に応じて判断するとしています。
• 有価証券ポートフォリオ：有価証券は総資産の約9%を占めています。預金の成長が魅力的な融資機会を上回る場合、経営陣は変動金利有価証券などを活用して一時的にポートフォリオを拡大する可能性があります。
• M&A戦略：経営陣は買収に対して引き続き前向きですが、規律ある厳選を強調しました。強力な預金基盤と親和性の高い企業文化を持つ地域銀行に関心を示しています。
• 人材戦略：FB Financialは当四半期中に約10名のバンカーを採用しました。長期的な自律的拡大を後押しするため、同社は厳選した外部採用と若手社員の育成を組み合わせています。

決算説明会文字起こし全文

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決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good morning, and welcome to the FB Financial Corporation Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Rachel Deresky, Financial Management Associate for FB Financial. Please go ahead.

Rachel Deresky

Thank you, and good morning, everyone. We appreciate you joining us today for FB Financial Corporation's Third Quarter 2026 Earnings Conference Call.

Joining me on the call this morning is Chris Holmes, President and Chief Executive Officer; and Michael Mettee, Chief Financial and Operating Officer. Before we begin, I'd like to remind listeners that during today's call, management may make forward-looking statements regarding the company's plans, expectations and outlook. These statements are subject to risks and uncertainties and actual results may differ materially from those discussed. Additional information regarding these risks and uncertainties, including risk factors that could cause actual results to differ can be found in our earnings release, our most recent annual report on Form 10-K and our subsequent filings with the Securities and Exchange Commission.

FB Financial undertakes no obligation to update any forward-looking statements, except as required by law. In addition, today's discussion may include references to certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP measures are available on our 3rd Quarter 2026 financial supplement posted to the Investor Relations section of our website at www.investor.brbankonline.com and on the SEC's website at www.sec.gov.

With that, I'll turn the call over to Mr. Chris Holmes.

Christopher Holmes

Thank you, Rachel, and good morning. We appreciate you joining us today and your continued interest in FB Financial. We reported EPS of $1.20 and adjusted EPS of $1.21 and growing our tangible book value per share, excluding the impact of AOCI at a compounded annual growth rate of 11.3% since our IPO.

Our net income was $60.2 million or $60.9 million on an adjusted basis. And our returns remained healthy with return on average tangible common equity of 15.2% or 15.7% on an adjusted basis. This quarter's performance was highlighted by strong growth in both loans and deposits, solid profitability and stable credit quality. We grew loans at an annualized rate of 9.7% and is at the very high end of our forecasted range of mid- to high single digits.

Our deposit growth rate was 8.8%, which included a decline in broker deposits. We actually grew our customer deposits at an annualized rate of 11.2% and the brokered deposit decline brought that net growth rate down to 8.8%. Growth in both loans and deposits was fueled by our commercial and consumer businesses, which reflects our continued success in attracting new customer relationships across business units.

Given the size and scale of our balance sheet today at approximately $17 billion in total assets, the growth levels are notable and represent continued meaningful expansion of our business. As I reflect on the third quarter, which stands out what stands out is the consistency of execution and the continued momentum in our business. We see healthy activity levels across our markets, strong pipelines and meaningful opportunities to deepen existing relationships while adding new customers. High quality execution across the franchise remains a defining characteristic of our organization, and we continue to invest in people, process improvement and technology that drives long-term growth. That investment includes adding great people to our organization but also involves developing talented associates already within First Bank and creating opportunities for them to grow and lead.

What differentiates First Bank from its -- what differentiates First Bank is the combination of an award-winning client service, which, by the way, is certified by J.D. Power as the highest level of customer satisfaction in our region, engaged and talented associates, which we use a third-party Willis Tire Watson to track for us and a relationship-focused business model. When these execution strengths, combined with attractive markets, we get strong growth and profitability, and you see that in our results. While our core operating performance remained strong during the quarter, there were a couple of items of impact that should be noted.

Specifically, our Mortgage Banking segment faced headwinds with a sharp rise in interest rates in the back half of the quarter. And we also recognized an interest income reversal on a loan that was moved to nonaccrual in the quarter. And I'll let Michael touch on the specifics of both mortgage and the nonaccrual loan. But I will say that the credit is being managed by our special assets team, which continues to work constructively with the borrower. We're working together on that to achieve the best possible outcome, and we believe the credit has relatively low, if any, loss content.

Overall, credit [indiscernible] across the loan portfolio remains stable. We continue to feel good about the quality of our portfolio and the underlying risk of our company. Looking ahead, we remain optimistic about the opportunities in front of us. The operating environment for banks remains favorable. Customer activity remains healthy, and our markets continue to benefit from strong economic fundamentals. While there are always factors outside of our control, including interest rate volatility and broader macroeconomic developments, the underlying drivers of economic activity throughout our footprint remain constructive, employment trends remain healthy. Commercial activity remains solid. We believe our markets across the Southeast remain positioned to outperform many areas of the country. We see meaningful opportunities for profitable growth and remain confident in our ability to deliver mid- to high single-digit balance sheet growth while maintaining a disciplined approach to risk and capital management.

With that, I'm going to turn the call over to our Chief Financial and Operating Officer, Michael Mettee, for some additional color on the quarter. Michael?

Michael Mettee

Thank you, Chris, and good morning, everyone. I'll start my comments with the balance sheet. As in the prior quarter, we delivered strong loan and deposit growth, with both increasing at high single-digit annualized rates. Loan demand remained healthy across our commercial and consumer businesses. Community markets led the growth with Oliver Nonin and Tuscaloosa continuing to perform well. Metro markets also contributed solid production, particularly Birmingham, Chattanooga and Knoxville as larger commercial loans with longer lead times move through the pipeline.

Our diversified footprint allows us to generate growth from multiple sources. Community markets provide consistent relationship-driven production while metro markets create opportunities to win larger, more complex relationships. Both strategies contributed to a meaningful growth and position us to perform across a range of operating environments. As we balance growth and profitability, contractual loan yields remained stable at 6.21% while late quarter production came on at approximately 6.44%. These results reflect our team's pricing discipline and the appeal of our customer-focused approach.

As discussed previously, being easy to do business with is a strategic priority, and this quarter's growth provides further evidence that those efforts are working. On the deposit side, we strengthened our granular core deposit base through growth in active customer accounts and average balances while adding several large commercial relationships. Customer deposits grew approximately 11% on an annualized basis during the quarter. We remain encouraged by customer acquisition trends and believe relationship-based deposit gathering will remain a long-term competitive advantage.

Deposit pricing remained competitive with our cost of deposits increasing 6 basis points and blended rates on new production ended the quarter at approximately 3%. We expect funding competition to remain elevated and we'll continue to emphasize profitable growth and disciplined pricing. Our customer relationships, experienced teams and diversified funding base positions us to grow deposits while managing funding costs effectively. With year-to-date growth tracking within our forecasted range, we expect growth to moderate into the fourth quarter due to the normal timing of pay downs, renewals and larger commercial closings. Pipelines remain healthy, and we continue to expect full year loan and deposit growth within our mid to high single-digit range.

Turning to earnings. Net income totaled $60.2 million, increasing from the prior quarter as higher net interest income and lower provision expense more than offset the deposit pricing pressure and a challenging mortgage banking environment. Profitability remains strong with return on average tangible common equity above 15% and return on average assets above 1.4%.

Core net interest margin compressed consistent with our prior expectations as funding costs continue to rise. Margin reflected the reversal of approximately $1 million of accrued interest income on a credit move to nonaccrual during the quarter. As Chris noted, our teams know this credit well is supported by adequate collateral values, and we discussed this on last quarter's call.

Quarter-over-quarter margin declined 12 basis points from 3.95% in second quarter to 3.83% in the third quarter. [indiscernible] accounted for 5 basis points of this decline, a 2 basis point reduction in purchase accounting accretion and a 3 basis point impact from the accrued interest reversal noted earlier. Excluding those items, core margin declined approximately 7 basis points from 3.95% to 3.88%, primarily reflecting continued industry-wide deposit pricing pressure.

Looking ahead, we remain comfortable with our full year net interest margin outlook, excluding loan accretion of 3.7% to 3.8%. Continued deposit competition and aggressive loan pricing remain headwinds, while our asset-sensitive position should provide support if rates move higher as expected. For the fourth quarter, we expect core margin to remain near third quarter levels as deposit repricing pressure is largely offset by balance sheet growth, stable loan yields and our slightly asset-sensitive position. This outlook assumes the current rate forward curve and remain sensitive to changes in market rates.

Turning to noninterest income. Revenue declined $1.3 million, primarily due to lower mortgage banking income, higher swap fee and investment services and [indiscernible] partially offset this decline, which was supported by healthy customer activity. Given the significant rise in long-term rates during the quarter, particularly the 10-year treasury yield, I'd like to briefly discuss the mortgage segment and our outlook for the business. Like others across the industry, we expect higher rates to weigh on near-term origination volumes and profitability.

Even so, our view of the mortgage business is unchanged. Mortgage banking remains an important source of new customer relationships provides meaningful optionality for balance sheet growth and fee income growth and creates opportunities to deepen relationships across the broader franchise. During the quarter, we launched a program to deepen relationships with new mortgage customers through deposit investment accounts and the early results are encouraging.

Today, 83% of participating borrowers have a checking relationship with First Bank with average deposit balances approximately twice our existing customer average, median FICO scores above the current portfolio average and loan-to-value ratio below secondary market originated loan values. These are the types of relationships we want to attract and retain reinforcing the strategic value of mortgage banking beyond its stand-alone earnings contribution.

Mortgage banking remains an important part of our long-term retail strategy, although the higher rate environment will likely reduce its earnings contribution in the fourth quarter in 2027. We will actively manage expenses while balancing profitability with our priorities of growing relationships, retaining a high-quality team and delivering strong customer service and offering competitive products. In addition to the challenging rate environment, you'll see a onetime transition expense of $719,000 within the segment's results due to conversion costs incurred as we transition our mortgage origination platform and subservicing arrangements.

Our teams have spent considerable time and effort executing these projects, which we believe will enhance the customer experience in the future. Absent this nonrecurring expense, the segment remained profitable during the quarter.

Turning to noninterest expense. Total expenses were $96 million, up approximately 5% from the prior quarter or 4% on an adjusted basis. The increase primarily reflected higher performance-based compensation accruals tied to significant balance sheet growth, attractive profitability and earnings growth as well as the 719,000 onetime mortgage segment, charge noted earlier. On an adjusted basis, the efficiency ratio was 54.3% and the Banking segment efficiency ratio was 50.8%.

Industry expense pressures remain elevated, particularly across compensation, benefits, insurance and technology. We continue to manage expenses carefully while investing in the [indiscernible] long-term growth. We did not generate positive operating leverage this quarter as mortgage revenues pressure and the nonaccrual interest reversal offset the benefit of balance sheet growth, while incentive compensation increased with business activity.

Our objective remains to convert customer and balance sheet growth into revenue growth that outpaces expenses and produces returns above our target levels. Looking ahead, we expect disciplined expense management through the year-end and are narrowing our banking segment guidance outlook to $325 million to $335 million, which is near the lower end of our prior guidance. We remain focused on balancing targeted growth investments [ for ] strong operating performance and shareholder returns.

Turning to credit. Provision expense totaled $1.4 million for the quarter, our ACL process continued to incorporate some downside economic scenarios through a weighted forecast, although the assumptions this quarter were modestly more favorable than those used in the second quarter. The improved forecast was largely offset by reserves associated with loan growth.

Reserve activity for individually evaluated credits were limited as the elevated activity recorded in the second quarter did not reoccur. As a result, provision expense remained modest despite another quarter of solid balance sheet growth. Our allowance coverage ratio ended the quarter at 1.47%, reflecting strong loan growth and stable underlying credit performance.

Net charge-offs in the nonperforming asset ratios also remained stable, supporting our view that the broader portfolio credit trends remain sound. The increase in nonaccrual loans during the quarter were primarily attributable to the credit discussed earlier. As noted, this loan is supported by adequate collateral values, and we continue to believe loss content is limited. We continue to monitor the potential economic effects of interest rate volatility, geopolitical developments, energy prices and fiscal policy on our business and markets.

Even so, we remain encouraged by the fundamentals across our footprint including healthy employment, solid customer activity in markets that continue to compare favorably with many regions of the country. Looking ahead, absent a meaningful change in the economic outlook or credit performance we expect provision expense to be driven primarily by loan growth and changes in individually evaluated credits. We also expect net charge-offs to remain within our long-term target range.

Turning to capital. We issued $125 million of subordinated debt during the quarter, further strengthening our capital position. We plan to deploy the proceeds over time to support loan growth in our markets and fund strategic initiatives that advance our long-term growth. Our tangible common equity to tangible asset ratio declined 17 basis points during the quarter, primarily due to continued share repurchases, reflecting disciplined and opportunistic capital deployment. Even after those repurchases, our capital levels provide significant flexibility to support growth, return capital to shareholders and pursue strategic opportunities.

Our balance sheet is resilient across a range of interest rate environments. Approximately 61% of the investment portfolio is floating rate with relatively limited embedded and unrealized losses. This positions us to allocate capital opportunistically, while many institutions remain constrained by balance sheet considerations. That flexibility, combined with our earnings power and capital generation remains a meaningful competitive advantage.

Our capital ratios remain well above regulatory requirements with our common equity Tier 1 ratio of 11%, a Tier 1 leverage ratio of 10% and a total risk-based capital ratio of 13.6% at quarter end.

In closing, I want to thank our associates for their hard work, dedication and commitment to our customers. This quarter demonstrated the strength of our franchise through strong balance sheet growth, solid profitability stable credit trends and disciplined capital management. We remain optimistic about the opportunities ahead and confident in our ability to deliver sustainable long-term value for shareholders.

With that, I'll turn the call back over to Chris.

Christopher Holmes

All right. Thanks for the color, Michael. And operator, at this time, I'd like to open the line for questions.

Operator

[Operator Instructions] Our first question today comes from Russell Gunther from Stephens.

質疑応答

Russell Elliott Gunther

So on the loan growth side of things, high single digits, high end of your guide, it was broad-based. It would be helpful to get some comments on how utilization rates trended in the quarter, where pipelines stand post another strong print and then I think you mentioned a little bit of seasonality in the fourth quarter. But as you look ahead, would you guys expect to be able to sustain this high single-digit pace? Or is there an absolute level of rates where we start to see some demand destruction and loan growth begin to slow?

Christopher Holmes

Yes. We'll tag team this one. Yes, you're right. We've been, I'd say, practically double digits, at least most of the year, start out the year a little bit slower, but we're high single digits at this point in terms of loan growth, and we expect to end up the year in high single digits.

So fourth quarter seasonally is usually just a little behind the first couple of quarters or I'm sorry, the mid-quarters, but we still expect to see really good activity and really strong pipelines as we head into '27. So as we -- we're projecting through Q4 a little bit of elevated payoff activity, but that's normal -- I mean that happens and we don't consider that to be really abnormal and we see us ending the year still in the mid -- I'd say high single digits is where we'll be for the year on the loan side and growth on the deposit side, I'd say high single digits as well. There's a chance that we might be double digits on deposit growth. And frankly, when I'm thinking deposit growth, also I'm thinking customer deposit growth. We did mention -- or we did mentioned in the comments that we were over 11% customer deposit growth in the quarter, and that continues to be strong as well. Michael?

Michael Mettee

Yes. Rusell. So Actually, I would say, activity in the quarter was actually -- if you look at extended credit versus utilization back to your utilization credit, it's actually even better than we probably obviously funded. So our utilization rates were down 2% to 3% on construction and commercial and industrial loans.

So opportunity for growth there if you just kind of work back into our normal C&I range of 46% utilization. We were a couple of percent below that. It's just -- our clients just didn't tap into their new lines yet, so some upside there. The pipeline actually quite robust. We felt good about it all year, and that momentum continues. Chris touched on the deposit piece as well. I mean, the deposit pipeline is actually quite robust as well. So that's encouraging to be able to fund loan growth organically. We're a customer-driven balance sheet, which I think is pretty unique relative to a lot of the rest of the industry, especially with rising costs in broker and wholesale. So we're excited about that and the loan opportunities in front of us.

As Chris mentioned, the fourth quarter can get a little bit heavy on payoffs and normal year-end activity but we feel pretty well positioned.

Russell Elliott Gunther

I appreciate both your thoughts there, guys. And then just last one for me would be on the margin. You gave us some color in terms of how you expect to end the year. But Michael, it would be helpful to get a sense for kind of how the margin trended throughout the quarter, perhaps touch upon where deposit costs ended 3Q.

Michael Mettee

Yes. So the rate increase, right, was, I think, 13 days before quarter end. So your deposits reprice kind of immediately as what I'd say, Russ, on our index deposits. Loan growth resets over 90 days, 50% of our portfolio is floating 61% of the investment portfolio, that generally happens kind of the first day of the quarter. So you haven't seen some of the asset sensitivity help margin. So that's why we're a little bit kind of bullish on being able to maintain our margin guide. Deposit costs, new deposits on a blended basis came in around 3% for the quarter. So if you think about our total portfolio in that kind of 240 range. Obviously, it's coming in higher, and I think that continues, given where brokered is, brokerage is not 4.5-plus percent range. The new deposits are pretty competitive.

Operator

Our next question comes from Stephen Scouten from Piper Sandler.

Stephen Scouten

Maybe continuing on that new deposit blended rate. I think you said it was around 3% this quarter. I think if memory [indiscernible] around 2.7% last quarter. And then with the rate hike towards the end of the quarter, would we expect that to continue to trend appreciably higher from here? Or what do you see in kind of just in the last couple of weeks, maybe to give some color into where deposit costs could continue to trend?

Michael Mettee

Yes. And I think I probably didn't answer that part of Russell's question, actually. Yes, deposit costs in September were higher than July and August. I do you think that's reflective of the rate increase. And if you've got kind of a 50% beta in there, 40%, 50% as we see that. We did have some large deposits come in that are indexed, which drove our deposit costs higher, kind of north of that 3%, Stephen, in September. But based on what we can tell it probably sticks in this range unless there's another rate increase in October.

Currently, we think there's probably going to be a Fed hike in December. So that would be late quarter. But if you saw one in October, I think you'd see deposit costs maybe higher.

Stephen Scouten

Makes sense. And are you guys thinking about the deposit and loan betas any differently kind of in this potential, hopefully, small uprate cycle that we're seeing, I guess, if we see -- like you said, we've seen the one, maybe we see in December. Who the heck knows what happens after that. But you just mentioned 40% to 50% deposit beta. How do you think about loan betas in this kind of mineral up cycle here?

Michael Mettee

Yes. I mean, it's roughly the same. I'd say the pressure on loan yields that we've seen throughout the summer does not follow the yield curve, right? The yield curve has been steepening. So you'd expect to see kind of the 3, 5 portion of term loans move higher. We did see that at the end of the quarter. I mentioned we were at around 644 on new production. I think if you look back last quarter, 630-ish. So you saw that same kind of what I'll call 45%, 50% beta. But I would expect we'd want to expect to see that move higher as rates move higher.

Stephen Scouten

And then just in terms of composition and loan growth, it looked like maybe there's a little bit more weighted towards the 1 to 4 family this quarter. Anything of note there or just kind of attractive yields that was worth holding on balance sheet this time around? Or kind of how can you -- how can we think about what the composition of new loan growth might continue to look like from here?

Michael Mettee

Yes. I think we try to maintain a balanced approach, Stephen. So 1 quarter, it may be 1 to 4 family, 1 quarter maybe C&I on or may be owner occupied. The composition, I mean, part of that was the mortgage platform, mortgage segment platform that I talked about, which was a deposit generation portfolio kind of campaign was actually really successful weighed on some of the gain on sale results. But then a portion of that is also branch originated, more community-based lending type of activity.

So I think higher mortgage rates would kind of dictate that, that would slow down. I think that that's expected. But what I really like about our mortgage division is that optionality, as you mentioned, it's probably not the end of the world to have 7.5%, 7.75% mortgage originated paper on your balance sheet right now that sticks around for kind of 5 to 7 years if you think rates are going down. Pretty good lever to have.

Unknown Executive

And we always -- that's an originate to sell channel for us. But it's nice that if we're thinking about where rates are and what is supposed to have the optionality that we could keep some of that on the balance sheet if we opted to do that. So -- and if rates go then make...

And then if rates do go down that generally leads to a later date on that. So yes...

Operator

Our next question comes from Will Jones from KBW.

Unknown Executive

Welcome. Nice to have you as the primary.

William Jones

Yes. Absolutely. Great to be here. I wanted to circle back on the discussion on asset sensitivity. Michael, it sounds like this next quarter as we start to see some of the rate lift on the asset side, you'll be able to see more of a stabilized margin and then kind of offset some of the funding pressure that is on coming. To the extent -- as we look out at the floor curve, we do see additional hikes into the future. Do you feel like that same dynamic will be a play where your general asset sensitivity can offset incremental funding pressure? Or will there be a point where deposit competition just becomes too fierce and it may start overcoming some of that general asset sensitivity.

Michael Mettee

Yes. Well, welcome. Glad to have you. So I mean roughly for every 25 basis point increase in Fed funds, you should see, I'm going to say, around a 3 basis point increase in our margin. I think the the reason we've kind of stuck with our guide and that range is the behavior you mentioned on competition. I think some market sanity probably comes in at some point. But a lot of it depends on where people can fund in that broker and wholesale market. And right now, getting customer deposits even at Fed funds target rate or slightly above kind of 4%, just a better funding mechanism than wholesaler brokered. And -- so as long as that is the case and kind of the back end of the curve is steeper, I think you see what you said, fierce deposit competition -- so we've kind of muted our margin asset sensitivity based off expected competition, and I'd like to think there's some upside there, but time will tell.

Christopher Holmes

Yes. I would also say when we're thinking of our margin, we think of it net of accretion and we also -- and so when you look at -- we've said 3.70% to 3.80% range net accretion in -- and if you -- we did have an unusual in where we had the nonaccrual interest reversal this time, which this quarter, which caused us at 3 basis points in the quarter. And so if you look at our core margin, we're really right in the middle of the range that we have projected if you take those things, those 2 net of accretion and the one in youth wider this quarter were really right at that sort of 375 range.

Michael Mettee

Yes. I think one other thing I'd add was it's really important to us that we're growing customer relationships. And so balance sheet growth, a nominal decrease in margin, but you have to grow net interest income, right? You have to grow earnings and yet to grow relationships. And so that's where we have our team focused. We want to be disciplined in pricing, but a couple of basis points of margin compression with double-digit growth is not the end of the world for us. In fact, we're quite happy about it.

Christopher Holmes

Exactly nothing in the world will take.

William Jones

Yes. No, that's totally fair, hidden right on the NIM versus NII debate that I feel like we're all trying to figure out nowadays. Maybe just, I guess, a little backward looking when you -- so what happened with the September hike, I know you've got about 40% of your deposits that are indexed, but for the remainder, where there may be more exception or negotiated prices? Did you find yourself having to play more defense on those depositors? Or just give us a flavor of kind of what client reaction client behavior was to the September hike?

Michael Mettee

Yes. I think there's general excitement, right, from anybody when the Fed increases rates. I think that initially said, "Hey, you need to raise your deposit cost, but don't raise the loan rates. I think it's in general how the world thinks about it. But it was actually quite muted. We generally are very not generally. We are very fair to our clients when it comes to deposit price. So we're not interested in trying to get everybody to zero deposit cost so that when the Fed hikes rates, they get a cost and say, hey, man, why is Fed funds at 380 and you've been paying me 2 basis points. So we don't think that's a good customer value proposition.

So it does limit some of the client reaction and then you mentioned index deposits, right? We did that in '22, I believe it was for this very thing so that we could just be fair to our clients in all rate cycles. No matter if rates go up or down, they're treated fairly and the company is treated fairly and the shareholders are treated fairly. So that mutes that a little bit, Will. Now when 2-year treasuries at 480 or whatever, you start to get some people call and say, "Hey, what are we thinking here? And so those costs do happen with people with a lot of money, which makes sense.

Christopher Holmes

Yes. I would add one point. The historical inefficiency in deposit pricing is being sucked out of the industry, I think, primarily and I think it's going to just be more that way with technology. And so then you asked a good question. But with our clients, they come to know that we're going to move on and so we go ahead and move our relationship, good client relationships, we go ahead and move them, and they don't have to ask for them to be moved. And so we've actually taken more -- we've added efficiency to the process with our clients, but we think one that's helping us defend -- helping us retain them because it creates a really good client experience, and we think it's helping us get more. And so we've seen some of our biggest deposit clients become bigger deposit clients because they know that, hey, they don't have to call on and they know that it's going to be adjusted whenever rates adjust and that creates a better client experience.

And the other thing, shout-out back you guys good piece, good research piece from your group, Will, on the NIM versus NII. I think a lot of good stuff in there. And just as Michael put it earlier, hey, we'll give up 2 basis points of margin if we can get double-digit growth, and that's we think we're using our capital really effectively in that. So...

William Jones

Yes, I appreciate that. We're trying to just be thoughtful around that debate there and what the kind of how the right way to view that dynamic is going forward. So I appreciate that. Last one for me, guys. I'll just throw in we're kind of hovering around that 9% TCE range that we talked about being a target last quarter. Just any thoughts on the buyback and what you guys might think about strategically there going forward?

Christopher Holmes

Yes. On the -- you saw our repurchase activity this quarter. And we do think at certain price levels, it's a good use of capital at other price levels. Maybe it's too dilutive to capital. And so we will continue to be thoughtful and active around that and at price levels that we think are appropriate.

Operator

Our next question comes from Brett Rabatin from StoneX Group.

Brett Rabatin

Wanted to start on just the organic expansion plans here and talk about maybe the Asheville new facilities and you're trying to grow in North Carolina. Just wanted to hear your plans for that market and just what you guys see the opportunities to expand into some of those markets you've been eyeing possibly possibly for M&A, but possibly for organic opportunities as well?

Christopher Holmes

Yes. Thanks, Brett. And you're right, we didn't actually mention that in our comments, but we -- we've been in [indiscernible] with a loan production office, and we converted that to a full service location. So it's now -- we're in North Carolina. We have said that's a target market -- target expansion for us. We think it's a fantastic place for -- to live work and play a lot like where we are in our headquarters market at Tennessee and the markets we're in, in Georgia and Alabama and so and [indiscernible] Greek Kentucky.

So we think Western North Carolina particularly is a great spot for us to start there. And we have a beachhead location and I would assume that others would follow over time. So that's going to be a place where we continue to grow and build our presence, build out our brand.

Brett Rabatin

Okay. And Chris, any updated thoughts on M&A? And just if you see that as more or less likely than maybe you have in the past and just what you're seeing or hearing from possible partners.

Christopher Holmes

Sure. You've heard me say often, banks are sold, they're not bought. And so we are willing and thoughtful participant. And so we stand at the ready. And if the right thing comes along, then we would act upon that. [indiscernible]

We love community banks. We love strong deposit side of the balance sheet, and we love cultures that are let's say, straightforward what you see what you get, and that's really what we really get excited if we get opportunities that are like that. And we, like I said, we stand [indiscernible]

Brett Rabatin

Okay. Okay. And then if I could ask one last one, just around -- you've talked some about your value proposition and how the inefficient market for deposits is going to change with technology. The M&C CEO at a conference recently basically said I it could be scary, but what it's going to do is make banks more efficient. So if you wake up and banks are 20% more efficient, that probably goes to the customer. And so you have to find ways to say, at the higher end of margins for the industry. What are you guys have thoughts on that? And just everyone is worried about AI changing the dynamic around deposit rates?

Christopher Holmes

I think that as regards to AI technology, I do think the efficiency in terms of how we think of the efficiency ratio. And we think of the efficiency ratio, not just as an expense measure, we think of it as how efficient are we -- how efficient are we carrying out our business every day. And so we do think that, I think most of your -- a lot of your primary applications of AI are going to be in that area for banks. But also the that for many folks, deposit in terms of rates has already become quite efficient. If you look at the -- at what is available to you, Brett, look, you're an educated consumer when it comes to financials and think about how you get rates and you're able to get very competitive. I'm sure. I don't know your all your financial picture, but I know you and I'm sure you're able to get there, very good deposit rates very efficiently. So you can already do that. The average -- but you're better than an average more knowledgeable than your average consumer.

So I don't I think that, that continues to grow over time, but I don't think it is like a light switch. I don't think it just flips on 1 day. So I think it will continue to get more and more efficient. I think as technology continues to become the technology in that space continues to become more adapted and easier to use and more prevalent. I think that it just becomes a very efficient deposit market. along with more efficient on the expense side of getting more out of what -- of every expense dollar we spend. So I think that -- we think of those kind of actually is almost separate and we work both sides. But going back to what we discussed earlier, we're making it pretty efficient for our customers today by part of our value proposition is you don't have to watch your bank every day to make sure they're giving you a good, strong customer value proposition.

We're going to make sure we're presenting that to you whether you're calling us when rates change or not.

Operator

Our next question comes from David Bishop from Hovde Group.

David Bishop

Yes. quick question, Mike. You noted the stress on both the deposit and the loan yield side here. In a perfect world, where should we see that new origination yield be running out. I think you mentioned $640 or so at the end of the quarter. Just curious on a normalized basis where you'd expect those to be coming in on.

Michael Mettee

Well, perfect world, it'd be 7-plus percent. I guess if you think about the spread over the 5 years, I think we see a wide range of competition. I mean there's some people here locally that are doing owner-occupied CRE in the 5s, which is not something that we're willing to do. And so that keeps pressure on loan yields, I think they should be those upper 6s, low 7s as you see kind of the belly of the curve steepen, but a little bit of that function on competition, right?

David Bishop

Absolutely. And then noticed the increase in the metro versus community deposit growth this quarter. Just curious if you see much of a pricing differential between those 2 channels?

Michael Mettee

Yes. Metro, I mean, the Nashville market had a really, really strong deposit quarter, and that's kind of the driver there and there's more in the pipeline. As well. I mean, I got to say all of our markets are competitive. And so there's no free lunches anywhere, but I think the way that Chris just touched on the prior question, look, we're not treating people in a metro market versus community market any differently. We're trying to be fair to everyone and create value for our customers, which creates a customer-driven balance sheet.

So not a whole lot of pricing difference. We give the same amount of authority and discretion to the smallest market we're in to the largest market we're in. And we expect them to go get relationships and grow them in the same way.

Operator

Our next question comes from Steve Moss from Raymond James.

Stephen Moss

Maybe just following up on maybe just following up on loan growth and rates here. Just kind of curious given a little bit of moderation in fourth quarter, wondering as you expect, if rates -- or new origination rates go higher here, do you expect maybe loan growth could slow into 2027?

Christopher Holmes

Yes, fair question. We haven't seen that indication yet, but Yes, we do think it could. But we haven't seen it yet. At some point, deals begin to fall out, pencil out anymore on the loan side. And so again, we haven't seen it yet, but -- but we do think it's certainly a possibility that, that could happen if rates continue to increase.

Stephen Moss

Okay. Appreciate that. And then just on the credit here. I know you guys highlighted 2 criticized classified assets last quarter for our call correctly. Kind of curious what the nonperforming area. How large is it -- and just kind of what type and maybe how long it works out of this system, if you guys have any color.

Christopher Holmes

Yes, the 1 loan we referenced is about $13 million size. Again, adequately collateralized, liquid collateral. For the most part, there's some other collateral also. But for the most part, it's collateral that we could liquidate we are working with the borrowing bars, working with [indiscernible]. Again, a good outcome for everybody. It's not obviously unplanned for the borrower. Obviously, also a plan for us, but it's a strong collateral situation.

Operator

Our next question comes from Christopher Marinac from Brean Capital.

Christopher Marinac

Chris and Mike, would you consider growing the securities portfolio more is the competitive pricing were to either get worse or just not be adequate as we roll through these next few quarters?

Michael Mettee

Chris, this is Michael. The runs about 9% of total assets. I mean, I think we've been in a range of up to probably that kind of 14%, 15% range. So if we had a large deposit growth, we certainly deploy into kind of some of the floating rate securities we've been in so that when loan growth does come at the right kind of return, Barry, you would deploy it into that. We are focused on growing our relationships and I've said that like 3x. And so our goal is to continue to deepen and grow that part of the balance sheet. If there's irrational pricing and it's better to get into some flooding right securities to deploy deposits, excess deposits. And yes, we would do that for short term. But in the long term, we're trying to grow the company and that generally happens through relationship-driven activity.

Christopher Holmes

Christopher, I would also just say for our securities portfolio today, it's about 61% floating and so even when we're deploying it into the investment portfolio, we think of that as make sure we got plenty of liquidity for anything that happens, including additional loan growth. And so that's strategically how we think about that.

Christopher Marinac

No, that's helpful. And for your point on liquidity. I mean there's been just small drops in liquidity the last quarter or 2, and those are not meaningful, but just curious if you have flexibility to push those a little lower, again, just to kind of try to manage income and outcomes.

Michael Mettee

Yes, absolutely. We've got a lot of optionality in our balance sheet portfolio. So that's absolutely, Chris.

Christopher Holmes

Yes, absolutely. And we did add a slide on capital flexibility in our deck, which -- when you look at our AOCI plus our HTM securities marks, then you'll see that's actually very low relative to a typical bank our size, very low.

Operator

[Operator Instructions] Our next question comes from David Rochester from Cantor.

David Rochester

I wanted to ask about your recent banker hiring and the talent pipeline, how that looks today, how that opportunity set looks coming into next year. You have at least 1 big integration coming up in market? It seems like that could be a good opportunity for you guys. Just hoping maybe you could talk about that as well.

Michael Mettee

Yes, Dave, it's Michael. We had around 10 or so this quarter, generally the pace we've been going at. It's been across the footprint. So both in our community and our metro markets, including Nashville, I'd say the pipeline is just as full as it's ever been. I know I say this a lot, and you've heard me say is we're more focused on hiring the right people than hiring people. And so that makes a big difference for us. And so I don't give our group's targets to go out and hire, but we're definitely focused on getting the right people culturally that are focused on relationships and deposit generation, full banking activity. And so that's really good in fact, we were working on one this morning that is pretty early. And we have one that's about to come across finish line super excited about that and we continue to recruit.

You mentioned the conversion. I think we keep doing what we're doing, right? And so -- it's kind of like dating. You just have conversations and it's ongoing if they want to marry you on the first date, it's probably not the right person. And so the stuff can take years. And we're actively cultivating relationships and that will play out over time. And at the same time, we're hiring young people, and we need to develop them to create our own organic pipeline of talent. And so we're trying to hit it from both ends.

Christopher Holmes

And Dave, I'll just add to that last piece, reiterating one of the things Michael said. Is a long term. We view that as a long-term proposition for us in 2 ways. One is like just like Michael said, it when folks make a -- I mean the folks that we're interested in make a move, it's going to be somebody that we've known for a long time. We've talked -- we've had conversations and they've watched our company and then they just decided to make a move. It's generally how that goes. And then the other thing I think that Michael squeezed in there that's really important is and I think this has been a change for us over the last 3 or 4 years. And that's developing folks. A lot of our -- for the folks that we're the most excited about are folks that have been with our company now for maybe 5 years and they started right out of college or they started or 5 years or less, and they came in at very young and have really matured and actually been going to -- been making contacts around town and they blossomed into really important folks to manage relationships for us, and they're doing a fantastic job. And so -- that's an important part of our plan as well. And so we're actually leaning into that with more development and training at for early career stages.

And so I think banks have generally gotten away from that. And I know of another bank or two around the country from talking to peers that are doing the same thing because they think that's going to be the best route going forward. And so we're really focusing on 2 different angles. One is we continue to recruit. But two is we are really developing our development, if you will, to be able to drive people along.

Unknown Executive

And the good news is we can do both. I mean it's not one or the other. And so you can do better.

David Rochester

Sounds like you got strategy. Maybe just one last one. You talked about loan growth next year, potentially slowing a little bit with higher rates. I was just curious what you're seeing or what you would expect in higher rates for paydown activity, you think you get a little bit of a breather there, but that's something that could help support you. Just what's your line of sight into that kind of activity next year?

Christopher Holmes

Yes. And David, just one thing that we may not have been totally clear on -- in response to a question about could it slow in higher rates, we said, well, yes, it could. That's not actually what we're thinking. That's not actually what we're forecasting. We are -- we continue to see activity to be quite robust in '27. Michael?

Michael Mettee

Yes. I think it's important that our people have to go. We have to go grow the company. And if loan growth slows for the industry, that means we got to take it from other people. And we've got to build market share, whether that's loan or deposits and continue to expand our presence in any rate environment. I think there's been some really fair questions at what point from a margin perspective, do you kind of pull back. And I think we can have a nice balance in growth and profitability. But the goal is to increase market share across our footprint and expand in some new ones, and that's what we expect in '27.

Operator

And with that, we'll be ending today's question-and-answer session. I'd like to turn the floor back over to Chris Holmes for closing comments.

Christopher Holmes

All right. Thank you very much, everybody, for joining us. We always appreciate your interest in FBK, and hope everybody has a great day and great rest of the earnings season.

Operator

And with that, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.