FBK · Read the filing

ITEM 7 — Management's Discussion and Analysis of Financial Condition and Results of Operations

Overall Objective

The following is a discussion of our financial condition at December 31, 2025 and 2024, and our results of operations for the years ended December 31, 2025 and 2024, and should be read in conjunction with our audited consolidated financial statements included elsewhere herein. The purpose of this discussion is to focus on information about our financial condition and results of operations which is not otherwise apparent from our consolidated financial statements. This discussion and analysis contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that we believe are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors, including those set forth in the “Cautionary note regarding forward-looking statements” and “Risk Factors” sections of this Annual Report, may cause actual results to differ materially from those projected results discussed in the forward-looking statements appearing in this discussion and analysis. We assume no obligation to update any of these forward-looking statements. Discussion and analysis of our financial condition and results of operations for the years ended December 31, 2024 and 2023 are included in the respective sections within “Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report filed on Form 10-K with the SEC for the year ended December 31, 2024.

Overview

We are a financial holding company headquartered in Nashville, Tennessee. We operate primarily through our wholly-owned subsidiary bank, FirstBank, and its subsidiaries. FirstBank provides a comprehensive suite of commercial and consumer banking services to clients in select markets in Tennessee, Alabama, Kentucky, Georgia and North Carolina. As of December 31, 2025, our footprint included 90 full-service branches serving markets across Tennessee, including Nashville, Chattanooga, Knoxville, Memphis, and Jackson in addition to Bowling Green, Kentucky, Columbus and Newnan, Georgia and Birmingham, Anniston, Huntsville, and Auburn, Alabama. Additionally, our banking services extend to community markets throughout our footprint. FirstBank also provides retail mortgage banking services utilizing its bank branch network and mortgage banking offices strategically located throughout the southeastern United States. As of December 31, 2025, we had total assets of $16.30 billion, loans held for investment of $12.38 billion, total deposits of $13.91 billion, and total shareholders’ equity of $1.95 billion.

We operate through two segments, Banking and Mortgage. We generate most of our revenue in our Banking segment from interest on loans and investments, loan-related fees, trust and investment services and deposit-related fees. Our primary source of funding for our loans is customer deposits, however we have other sources of funds including unsecured credit lines, brokered CDs, and other borrowings. We generate most of our revenue in our Mortgage segment from origination fees and gains on sales in the secondary mortgage loan market, as well as from mortgage servicing revenues.

Developments in 2025

Mergers and acquisitions

Southern States Bancshares, Inc.

On July 1, 2025, the Company completed its merger with Southern States Bancshares, Inc. and its wholly-owned subsidiary, Southern States Bank, with FB Financial Corporation continuing as the surviving entity. This merger strengthens the Company’s presence in existing markets, such as Birmingham and Huntsville, Alabama, while expanding the Company’s footprint further into Alabama and Georgia. The Company acquired total assets of $2.83 billion, total loans of $2.27 billion and assumed total deposits of $2.47 billion. Under the terms of the agreement, each outstanding share of Southern States common stock was converted into the right to receive 0.80 shares of the Company’s stock. Additionally, fractional shares and outstanding stock options were settled in cash. As a result, total consideration paid was $368.4 million based on the Company’s closing stock price of $45.30 per share on June 30, 2025. The merger resulted in additional goodwill of $107.8 million being recorded based on preliminary fair value estimates of total net assets acquired and liabilities assumed in the transaction.

Key factors affecting our business

Interest rates

Net interest income is the largest contributor to our net income and is the difference between the interest and fees earned on interest-earning assets (primarily loans, investment securities and interest-bearing deposits with other financial institutions) and the interest expense incurred in connection with interest-bearing liabilities (primarily deposits and borrowings). The level of net interest income is primarily a function of the average balance of interest-earning assets, the average balance of interest-bearing liabilities and the spread between the contractual yield on such assets and the contractual cost of such liabilities. These factors are influenced by both the pricing and mix of interest-earning assets and interest-bearing liabilities which, in turn, are impacted by external factors such as local economic conditions, competition for loans and deposits, the monetary policy of the Federal Reserve and market interest rates.

The cost of our deposits and short-term wholesale borrowings is largely based on short-term interest rates, which are primarily driven by the Federal Reserve’s actions. The yields generated by our loans and securities are typically driven by short-term and long-term interest rates, which are market driven and are, at times, heavily influenced by the Federal Reserve’s actions. The level of net interest income is therefore influenced by movements in such interest rates and the pace at which such movements occur.

Interest rates decreased throughout the year ended December 31, 2025. Volatile interest rates could have significant adverse effects on the earnings, financial condition and results of operations of the Company.

For additional information regarding our interest rate risks factors and management, see “Business: Risk management: Liquidity and interest rate risk management” and “Risk factors: Risks related to our business.”

Credit trends

We focus on originating quality loans and have established loan approval policies and procedures to assist us in upholding the overall credit quality of our loan portfolio. However, credit trends in the markets in which we operate and in our loan portfolio can materially impact our financial condition and performance and are primarily driven by the economic conditions in our markets.

During 2025, our percentage of total nonperforming loans to loans HFI increased to 0.97% as of December 31, 2025, from 0.87% as of December 31, 2024. Our classified loans decreased incrementally to 1.10% of loans HFI as of December 31, 2025, compared to 1.15% as of December 31, 2024. Our nonperforming assets as of December 31, 2025 were $158.1 million, or 0.97% of total assets compared to $121.9 million, or 0.93% of assets as of December 31, 2024.

Our provisions for credit losses resulted in an expense of $43.3 million for the year ended December 31, 2025 compared to $12.0 million for the year ended December 31, 2024. For the year ended December 31, 2025, our provision for credit losses was comprised of $33.2 million of provision for credit losses on loans HFI and $10.1 million related to credit losses on unfunded commitments. The current period expense is the result of a $28.4 million initial provision related to Southern States acquired loans HFI and unfunded commitments and regular changes in loan balances and forecasts inputs. See further discussion under the subheading “Provision for credit losses.”

For additional information regarding credit quality risk factors for our Company, see “Item 1. Business: Risk management: Credit risk management” and “Item 1A. Risk factors: Credit Risks.”

Competition

Our profitability and growth are affected by the highly competitive nature of the financial services industry. We compete with commercial banks, savings banks, credit unions, non-bank financial services companies, online mortgage providers, internet banks and other financial institutions operating within the areas we serve, particularly with national and regional banks that often have more resources than we do to invest in growth and technology and community banks with strong local ties, all of which target the same clients we do. We have seen increased competitive pressures on deposit rates. Continued deposit pricing pressure may continue to affect our financial results in the future.

For additional information, see “Item 1. Business: Our markets,” “Business: Competition” and “Item 1A. Risk factors: Risks related to our business.”

Regulatory trends and changes in laws

We are subject to extensive regulation and supervision, which continue to evolve as the legal and regulatory framework governing our operations continues to change. The current operating environment also has heightened supervisory expectations in areas such as consumer compliance, BSA and anti-money laundering compliance, risk management and internal audit.

As described further under “Business: Supervision and regulation,” we are subject to a variety of laws and regulations, including the Dodd-Frank Act. See also “Item 1A. Risk factors: Legal, regulatory and compliance risk.”

Financial highlights

The following table presents certain selected historical consolidated income statement data and key indicators as of the dates or for the years indicated. Our historical results for any prior period are not necessarily indicative of results to be expected in any future period.

As of or for the years ended December 31,

Selected Balance Sheet Data

Allowance for credit losses on unfunded commitments 16,196 6,107 8,770

Selected Statement of Income Data

Net income applicable to noncontrolling interest 16 16 16

Per Common Share

Selected Ratios

Return on average:

Adjusted efficiency ratio (tax-equivalent basis)(1) 56.4 % 57.3 % 62.9 %

Loans HFI to deposit ratio 89.0 % 85.7 % 89.2 %

Noninterest-bearing deposits to total deposits 18.9 % 18.9 % 21.0 %

Net interest margin (tax-equivalent basis) 3.81 % 3.51 % 3.44 %

Yield on interest-earning assets 6.14 % 6.10 % 5.72 %

Cost of interest-bearing liabilities 3.13 % 3.53 % 3.16 %

As of or for the years ended December 31,

Credit Quality Ratios

Net charge-offs as a percentage of average loans HFI (0.06) % (0.14) % (0.01) %

Nonperforming loans HFI as a percentage of loans HFI 0.97 % 0.87 % 0.65 %

Nonperforming assets as a percentage of total assets(2) 0.97 % 0.93 % 0.69 %

Capital Ratios (Company)

Total common shareholders’ equity to assets 12.0 % 11.9 % 11.5 %

Tangible common equity to tangible assets(1) 9.84 % 10.2 % 9.74 %

(1)Non-GAAP financial measure; See “GAAP reconciliation and management explanation of non-GAAP financial measures” and non-GAAP reconciliations herein.

(2)Includes $28.1 million, $31.4 million and $21.2 million of optional rights to repurchase GNMA loans that meet certain defined delinquency criteria as of December 31, 2025, 2024 and 2023, respectively.

GAAP reconciliation and management explanation of non-GAAP financial measures

We identify certain financial measures discussed in this Report as being “non-GAAP financial measures.” The non-GAAP financial measures presented in this Report are adjusted efficiency ratio (tax-equivalent basis), tangible book value per common share, tangible common equity to tangible assets and return on average tangible common equity.

In accordance with the SEC’s rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our consolidated statements of income, balance sheets or statements of cash flows.

The non-GAAP financial measures that we discuss in this Report should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in our selected historical consolidated financial data may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar or with names similar to the non-GAAP financial measures we have discussed in our selected historical consolidated financial data when comparing such non-GAAP financial measures. The following reconciliation tables provide a more detailed analysis of these, and reconciliation for, each of non-GAAP financial measures.

Adjusted efficiency ratio (tax-equivalent basis)

The adjusted efficiency ratio (tax-equivalent basis) is a non-GAAP measure that excludes certain gains (losses), merger and offering-related expenses and other selected items. Our management uses this measure in its analysis of our performance. Our management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges. The most directly comparable financial measure calculated in accordance with GAAP is the efficiency ratio.

The following table presents, as of the dates set forth below, a reconciliation of our adjusted efficiency ratio (tax-equivalent basis) to our efficiency ratio:

Years Ended December 31,

Adjusted efficiency ratio (tax-equivalent basis)

Less early retirement, severance and other costs 1,395 1,478 8,449

Less loss on lease terminations and other branch closure costs 282 — 1,770

Less charitable contribution to FirstBank Foundation 1,130 — —

Less FDIC special assessment — 500 1,788

Less merger and integration costs 23,803 — —

Less cash life insurance benefit 1,148 2,057 —

Less loss on change in fair value on commercial loans held for sale — — (2,114)

Adjusted efficiency ratio (tax-equivalent basis) 56.4 % 57.3 % 62.9 %

Tangible book value per common share and tangible common equity to tangible assets

Tangible book value per common share and tangible common equity to tangible assets are non-GAAP measures that exclude the impact of goodwill and other intangibles used by the Company’s management to evaluate capital adequacy. Because intangible assets such as goodwill and other intangibles vary extensively from company to company, we believe that the presentation of this information allows investors to more easily compare the Company’s capital position to other companies. The most directly comparable financial measure calculated in accordance with GAAP is book value per common share and our total shareholders’ equity to total assets.

The following table presents, as of the dates set forth below, tangible common equity compared with total shareholders’ equity, tangible book value per common share compared with our book value per common share and common equity to tangible assets compared to total shareholders’ equity to total assets:

As of December 31,

(dollars in thousands, except share and per share data) 2025 2024 2023

Tangible assets

Adjustments:

Tangible common equity

Adjustments:

Total common shareholders’ equity to total assets 12.0 % 11.9 % 11.5 %

Tangible common equity to tangible assets 9.84 % 10.2 % 9.74 %

Return on average tangible common equity

Return on average tangible common equity is a non-GAAP measure that uses average shareholders’ equity and excludes the impact of goodwill and other intangibles. This measurement is used by the Company’s management to provide a depiction of the Company's profitability without being impacted by its intangible assets, as intangible assets are not directly managed to generate earnings. The following table presents, as of the dates set forth below, reconciliations of total average tangible common equity to average shareholders' equity and return on average tangible common equity to return on average shareholders’ equity:

Years Ended December 31,

Return on average tangible common equity

Adjustments:

Return on average common shareholders' equity 6.90 % 7.71 % 8.74 %

Return on average tangible common equity 8.40 % 9.24 % 10.7 %

Overview of recent financial performance

Year ended December 31, 2025 compared to the year ended December 31, 2024

Our net income increased during the year ended December 31, 2025 to $122.6 million from $116.1 million for the year ended December 31, 2024. Diluted earnings per common share was $2.45 and $2.48 for the years ended December 31, 2025 and 2024, respectively. Our net income represented a return on average assets of 0.84% and 0.91% for the years ended December 31, 2025 and 2024, respectively, and a return on average equity of 6.90% and 7.71% for the same periods. Our ratio of return on average tangible common equity for the years ended December 31, 2025 and 2024 was 8.40% and 9.24%, respectively. See “GAAP reconciliation and management explanation of non-GAAP financial measures” in this Report for a discussion of tangible common equity and return on average tangible common equity.

During the year ended December 31, 2025, net interest income increased to $516.1 million compared with $416.5 million in the year ended December 31, 2024. Our net interest margin, on a tax-equivalent basis, increased to 3.81% for the year ended December 31, 2025 as compared to 3.51% for the year ended December 31, 2024. The increase in net interest income and net interest margin, on a tax-equivalent basis, reflects a $109.1 million increase in interest income, partially offset by a $8.8 million increase in interest expense.

Provision for credit losses on loans HFI and unfunded loan commitments was $43.3 million for the year ended December 31, 2025 compared $12.0 million for the year ended December 31, 2024 primarily due to the initial provision for credit losses on acquired loans and unfunded commitments from the Southern States merger of $28.4 million, along with changes in loan balances and forecast assumptions. Refer to Note 2, “Mergers and acquisitions” in this Report for further discussion around the merger with Southern States.

Noninterest income for the year ended December 31, 2025 increased by $4.8 million to $43.9 million, up from $39.1 million for prior year period. The increase in noninterest income was driven by a $5.8 million increase in mortgage banking income, a $2.1 million increase in investment services and trust income and a $1.9 million increase in service charges on deposits. The increase was partially offset by a $60.5 million net loss on investment securities primarily related to the sale of $266.9 million of AFS securities compared to a $56.4 million net loss on investment securities primarily related to the sale of $526.4 million of AFS securities for the year ended December 31, 2024. Refer to the section “Other earning assets” for additional information on the sale of the AFS securities.

Noninterest expense increased to $378.2 million for the year ended December 31, 2025, compared with $296.9 million for the year ended December 31, 2024. The increase in noninterest expense was driven by a $33.9 million increase in salaries, commissions and employee benefits due to increased headcount resulting from the Southern States merger, combined with increase in performance-based compensation driven by improvement in the Company’s performance metrics, $23.8 million in merger and integration costs associated with our merger with Southern States and an increase in other noninterest expense of $16.3 million due to increases in franchise tax expense, technology and platform fees, and modest increases across a range of other expense categories.

Income tax expense for the year ended December 31, 2025 was $15.9 million compared to $30.6 million for the year ended December 31, 2024. The change reflects the income tax effect of a $60.5 million loss on sale of AFS debt securities, as well as a one-time gross tax benefit of $10.7 million due to the expiration of the statute of limitations with respect to an amended income tax return and the associated interest for the year ended December 31, 2025. Income tax expense for the year ended December 31, 2024, included the income tax effect of a $56.4 million loss on sale of AFS debt securities.

Year ended December 31, 2024 compared to year ended December 31, 2023

Our net income decreased during the year ended December 31, 2024 to $116.1 million from $120.2 million for the year ended December 31, 2023. Diluted earnings per common share was $2.48 and $2.57 for the years ended December 31, 2024 and 2023, respectively. Our net income represented a return on average assets of 0.91% and 0.95% for the years ended December 31, 2024 and 2023, respectively, and a return on average equity of 7.71% and 8.74% for the same periods. Our ratio of return on average tangible common equity for the years ended December 31, 2024 and 2023 was 9.24% and 10.7%, respectively. See “GAAP reconciliation and management explanation of non-GAAP financial measures” in this Report for a discussion of tangible common equity and return on average tangible common equity.

During the year ended December 31, 2024, net interest income increased to $416.5 million compared with $407.2 million in the year ended December 31, 2023. Our net interest margin, on a tax-equivalent basis, increased to 3.51% for the year ended December 31, 2024 as compared to 3.44% for the year ended December 31, 2023. The increase in net interest margin was primarily driven by higher yields on interest-earning assets, particularly loans and taxable investment securities. This increase was partially offset by the cost of interest-bearing liabilities, primarily from money market and customer deposits.

Provision for credit losses on loans HFI and unfunded loan commitments was $12.0 million for the year ended December 31, 2024 compared to $2.5 million for the year ended December 31, 2023 primarily due to a reversal of provision for credit losses on unfunded commitments of $2.7 million compared to $14.2 million during the year ended December 31, 2023.

Noninterest income for the year ended December 31, 2024 decreased by $31.5 million to $39.1 million, down from $70.5 million for prior year period. The decrease in noninterest income was driven by a $56.4 million net loss on investment securities related to the sale of $526.4 million of AFS securities compared to a $14.0 million net loss on investment securities primarily related to the sale of $100.5 million of AFS securities for the year ended December 31, 2023. The decrease was partially offset by a $2.9 million increase in investment services and trust income, a $2.1 million increase in BOLI income resulting from proceeds from payment of death benefits, and a $1.9 million increase in equity investments income. Additionally, during the year ended December 31, 2023, a $2.1 million loss was recorded associated with the change in fair value of the commercial loans held for sale portfolio that was exited during the year ended December 31, 2023.

Noninterest expense decreased to $296.9 million for the year ended December 31, 2024, compared with $324.9 million for the year ended December 31, 2023. The decrease in noninterest expense is due to decreases in salaries, commissions and employee benefits of $19.6 million primarily related to the Company’s efficiency and scalability initiatives and updated methodology of deferrals for loan fees and loan origination expenses. Additionally, the decrease is reflective of decreases in occupancy, advertising, legal and professional expenses and franchise tax expense.

Business segment highlights

We operate our business in two business segments: Banking and Mortgage. See Note 1, “Basis of presentation and summary of significant accounting policies” and Note 19 “Segment reporting” in the notes to our consolidated financial statements for a description of these business segments.

Banking

Income before taxes from the Banking segment decreased for the year ended December 31, 2025 to $134.9 million, compared to $143.7 million for the year ended December 31, 2024. Net interest income increased by $95.3 million to $506.1 million during the year ended December 31, 2025 compared to $410.8 million during the year ended December 31, 2024. Provisions for credit losses on loans HFI and unfunded loan commitments resulted in $37.6 million of provision expense during the year ended December 31, 2025 compared to $12.3 million during the year ended December 31, 2024. The increase was driven by the initial provision for credit losses on acquired loans and unfunded commitments from the Southern States merger of $28.4 million. The Banking segment recorded a noninterest loss of $8.8 million in the year ended December 31, 2025 as compared to a loss of $8.4 million in the year ended December 31, 2024. This decrease includes a net loss on investment securities of $60.5 million associated with the sale of $266.9 million AFS debt securities during the year ended December 31, 2025 compared with a net loss on investment securities of $56.4 million primarily related to the sale of $526.4 million of AFS debt securities for the year ended December 31, 2024. Noninterest expense increased to $324.8 million for year ended December 31, 2025 compared to $246.5 million for the year ended December 31, 2024 due to increases in salaries and benefits, merger and integration costs associated with the Southern States merger, advertising, franchise tax expense, technology and platform fees and modest increases across a range of other expense categories.

Mortgage

Activity in our Mortgage segment resulted in income before income taxes of $3.6 million for the year ended December 31, 2025 compared to $3.0 million for the year ended December 31, 2024. Net interest income was $10.0 million for the year ended December 31, 2025 compared to $5.7 million for the year ended December 31, 2024. Provisions for credit losses on loans HFI and unfunded loan commitments resulted in $5.6 million of provision expense during the year ended December 31, 2025 compared to a reversal of $0.3 million of provision expense during the year ended December 31, 2024. The increase in provisions for credit losses was due to a change in the CECL loss estimation methodology, which notably impacted reserves on our 100% financed 1-to-4 mortgage portfolio, as well as a notable change in forecasts associated with home prices which impacted mortgage reserves more broadly. Mortgage banking income increased $5.8 million to $52.4 million during the year ended December 31, 2025 compared to $46.6 million for the year ended December 31, 2024.

The components of mortgage banking income for the years ended December 31, 2025 and 2024 were as follows:

Years Ended December 31,

Mortgage banking income

Net change in fair value of loans held for sale and derivatives 2,684 1,241

Change in fair value on MSRs, net of hedging (13,772) (16,278)

Interest rate lock commitment volume by purpose (%):

Mortgage sale margin 2.78 % 2.77 %

Noninterest expense for the years ended December 31, 2025 and 2024 was $53.5 million and $50.4 million, respectively. This increase is reflective of an increase in commissions associated with mortgage loan volume.

Results of operations

Throughout the following discussion of our operating results, we present our net interest income, net interest margin and core efficiency ratio on a fully tax-equivalent basis. The fully tax-equivalent basis adjusts for the tax-favored status of net interest income from certain qualifying loans and investments.

Our tax-exempt income is converted to a tax-equivalent basis by adjusting for the combined federal and blended state statutory income tax rate of 26.06% for the years ended December 31, 2025, 2024, and 2023.

Net interest income

Net interest income is the principle component of our earnings and represents the difference, or spread, between interest and fee income generated from earning assets and the interest expense paid on deposits and borrowed funds. Net interest income and margin are shaped by fluctuations in interest rates as well as changes in volume and mix of earning assets and interest-bearing liabilities.

During the year ended December 31, 2025, the U.S. Treasury yield curve continued its path toward normalization, with steepening in the intermediate and longer‐term sectors of the curve as the Federal Reserve reduced short‐term interest rates by a total of 75 basis points over the course of the year, and longer‐term yields remained elevated due to ongoing inflation concerns and fiscal conditions. This compares to the year ended December 31, 2024, when the curve was just beginning to normalize following late‐year short‐term rate cuts and an uptick in longer‐term yields. The Federal Funds Target Rate range was 3.50% - 3.75% and 4.25% - 4.50% as of December 31, 2025 and December 31, 2024, respectively.

Year ended December 31, 2025 compared to the year ended December 31, 2024

Net interest income increased $100.3 million to $519.4 million for the year ended December 31, 2025 as compared to $419.1 million for the year ended December 31, 2024. Net interest margin was 3.81% for the year ended December 31, 2025 compared to 3.51% for the year ended December 31, 2024. Net interest income was broadly driven by higher average balances of loans held for investment resulting from the Southern States merger.

Interest income was $837.2 million for the year ended December 31, 2025, compared to $728.1 million for the year ended December 31, 2024, an increase of $109.1 million. The increase in interest income was primarily attributable to loans HFI, which increased $101.9 million to $724.7 million for the year ended December 31, 2025 from $622.8 million for the year ended December 31, 2024. The increase was driven by higher average balances of loans held for investment resulting from the Southern States merger, partially offset by a lower overall yield on those loans due to declining interest rates. The yield on loans HFI decreased 6 basis points to 6.58% for the year ended December 31, 2025 from 6.64% for the year ended December 31, 2024.

The components of our loan yield for the years ended December 31, 2025, 2024, and 2023 were as follows:

Years Ended December 31,

Loans HFI yield components:

Accretion on purchased loans contributed 10 basis points to the NIM for the year ended December 31, 2025 as a result of the recent merger. There was no impact of accretion on purchased loans to the NIM for the year ended December 31, 2024.

Interest income on investment securities was the next largest contributor to the overall change in interest income, increasing $7.1 million to $63.6 millionfor the year ended December 31, 2025 from $56.5 million for the year ended December 31, 2024. This increase was driven by higher yields on investment securities stemming from previous portfolio restructuring transactions. The yield on investment securities was 3.97% and 3.39% for the years ended December 31, 2025 and 2024, respectively, an increase of 58 basis points.

Interest expense was $317.8 million for the year ended December 31, 2025, an increase of $8.8 million as compared to $309.0 million for the year ended December 31, 2024. The increase was driven by higher average interest‐bearing deposit balances resulting from the recent merger, mostly offset by declines in the rates paid on interest‐bearing deposits and other borrowed funds.

Interest expense on interest-bearing deposit accounts totaled $309.2 million for the year ended December 31, 2025, an increase of $12.9 million from the prior year, largely due to increases in average balances across most deposit categories, particularly money market deposits. Lower rates paid across these categories partially offset this increase. The growth in average balances was attributable to the recent merger and to a lesser extent recent customer deposit campaigns, which increased deposit balances while reducing deposit costs. The average rate paid on interest-bearing deposits was 3.09% for the year ended December 31, 2025 compared to 3.49% for the year ended December 31, 2024.

Interest expense recognized on other borrowings decreased $4.6 million for the year ended December 31, 2025 due to the repayment of the Bank Term Funding Program which was paid off during the third quarter of 2024.

Average balance and interest yield/rate analysis

The table below shows the average balances, income and expense and yield and rates of each of our interest-earning assets and interest-bearing liabilities on a tax equivalent basis, if applicable, for the periods indicated.

Years Ended December 31,

Interest-earning assets:

Investment securities:

Noninterest-earning assets:

Interest-bearing liabilities:

Interest-bearing deposits:

Other interest-bearing liabilities:

Noninterest-bearing liabilities:

Noncontrolling interest 93 93 93

Interest rate spread (tax-equivalent basis)(2) 3.01 % 2.57 % 2.56 %

Net interest margin (tax-equivalent basis) (2)(5) 3.81 % 3.51 % 3.44 %

(1)Average balances of nonaccrual loans and overdrafts are included in average loan balances.

(2)Interest income includes the effects of taxable-equivalent adjustments using the combined federal and blended state statutory income tax rate to increase tax-exempt interest income to a tax-

equivalent basis. to increase tax-exempt interest income to a tax-equivalent basis. The net tax-equivalent adjustment amounts included in income were $3.3 million, $2.6 million, and $3.3 million for

years ended December 31, 2025, 2024, and 2023, respectively.

(3)Includes average net unrealized losses on investment securities available for sale of $94.0 million, $166.1 million, and $231.5 million for the years ended December 31, 2025, 2024, and 2023, respectively.

(4)Includes average of optional rights to repurchase government guaranteed GNMA mortgage loans previously sold that meet certain defined delinquency criteria of $25.2 million, $24.6 million, and $21.7 million for the years ended December 31, 2025, 2024, and 2023, respectively.

(5)The NIM is calculated by dividing annualized net interest income, on a tax-equivalent basis, by average total earning assets.

Yield/rate and volume analysis

The tables below present the components of the changes in net interest income for the years ended December 31, 2025 and 2024. For each major category of interest-earning assets and interest-bearing liabilities, information is provided with respect to changes due to average volume and changes due to interest rates, with the changes in both volume and interest rates allocated to these two categories based on the proportionate absolute changes in each category.

(dollars in thousands) Volume Yield/rate Net increase(decrease)

Interest-earning assets:

Investment securities:

Federal funds sold and reverse repurchase agreements 3,507 (1,188) 2,319

Restricted equity securities, at cost 424 (350) 74

Interest-bearing liabilities:

Federal Home Loan Bank advances 418 — 418

(1)Average loans are presented gross, including nonaccrual loans and overdrafts.

(2)Interest income includes the effects of the tax-equivalent adjustments to increase tax-exempt interest income to a tax-equivalent basis. The net taxable-equivalent adjustment amounts included was $3.3 million and $2.6 million for the years ended December 31, 2025 and 2024, respectively.

(dollars in thousands) Volume Yield/rate Net increase(decrease)

Interest-earning assets:

Loans held for sale - mortgage 681 (51) 630

Loans held for sale - commercial (162) — (162)

Investment securities:

Federal funds sold and reverse repurchase agreements 584 321 905

Interest-bearing deposits with other financial institutions (1,806) 741 (1,065)

Restricted equity securities, at cost (616) 301 (315)

Interest-bearing liabilities:

Savings deposits (41) 35 (6)

Federal Home Loan Bank advances (1,487) — (1,487)

(1)Average loans are presented gross, including nonaccrual loans and overdrafts.

(2)Interest income includes the effects of the tax-equivalent adjustments to increase tax-exempt interest income to a tax-equivalent basis. The net taxable-equivalent adjustment amounts included was $2.6 million and $3.3 million for the years ended December 31, 2024 and 2023, respectively.

Provision for credit losses

The provision for credit losses charged to operating expense is an amount which, in the judgment of management, is necessary to maintain the allowance for credit losses at an appropriate level under the current expected credit loss model. The determination of the amount of the allowance is complex and involves a high degree of judgment and subjectivity.

Our allowance for credit losses calculation as of December 31, 2025 resulted from management’s best estimate of losses over the life of loans and unfunded commitments in our portfolio in accordance with the CECL approach.

These changes represent a change in accounting estimate under ASC 250, “Accounting Changes and Error Corrections”, and, accordingly, is applied prospectively in the period of change and did not have a material effect on the Company’s financial statements. See “Note 1, “Basis of presentation and summary of significant accounting policies” in this Report for further discussion on the change in estimate.

The discounted cash flow was calibrated using a regression analysis that relates one or more economic variables to our historical default rates and selected peer banks for each loan segment. We determined that national unemployment, national housing price index, national commercial real estate index and prime rates were the key economic variables that were most correlated to our historical loss performance and our peer banks. Reasonable and supportable forecasts of these economic indicators are utilized within the discounted cash flow to estimate expected credit losses for each loan segment. Current and forecast economic conditions, including those affecting these and other economic variables or macroeconomic conditions, such as global conflicts or tariffs, may continue to lead to increased volatility in our calculated level of allowance for credit losses.

Prior to the changes described above, our estimates for credit losses calculation utilized lifetime loss rate model and included economic forecasts for unemployment, gross domestic product, as well as other macroeconomic events which may impact our loan portfolio. Refer to Note 1, “Basis of presentation and summary of significant accounting policies” in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, for a detailed discussion regarding ACL methodology.

We recognized a provision for credit losses on loans HFI for the years ended December 31, 2025 and 2024 of $33.2 million and $14.7 million, respectively. The current period provision on loans HFI was driven by a $25.1 million initial provision on acquired non-PCD loans HFI from the Southern States merger and regular changes in loan balances and forecast inputs offset by a $6.8 million reduction from the impact of the change in the CECL loss estimation methodology. For the year ended December 31, 2024, the provision on loans HFI is due to growth in loan balances for most loan categories, an increase in net charge-offs and slight deterioration in economic forecasts offset by significant decreases in construction lending.

We recorded a provision for credit losses on unfunded commitments of $10.1 million and a reversal of $2.7 million for the years ended December 31, 2025 and 2024, respectively. For the year ended December 31, 2025, the increase in provision for credit losses on unfunded commitments was due largely to the $6.5 million impact of the change in the CECL loss estimation methodology combined with $3.2 million for the initial provision on acquired unfunded commitments associated with the Southern States merger. The reversal of provision for credit losses on unfunded commitments for the year ended December 31, 2024 was primarily due to management’s concentrated effort to reduce unfunded loan commitments during the period.

During the years ended December 31, 2025 and 2024, it was determined that all AFS debt securities that experienced a decline in fair value below amortized cost basis were due to noncredit-related factors. Therefore, there was no provision for credit losses recognized on AFS debt securities during the years ended December 31, 2025 and 2024.

Noninterest income

The following table sets forth the components of noninterest income for the periods indicated:

Years Ended December 31,

Year ended December 31, 2025 compared to year ended December 31, 2024

Noninterest income amounted to $43.9 million for the year ended December 31, 2025, an increase of $4.8 million, as compared to income of $39.1 million for the year ended December 31, 2024. The increase in total noninterest income was driven by increases in mortgage banking income, investment services and trust income and service charges on deposits offset by the net loss from investment securities and decreases in other income.

Mortgage banking income includes origination fees, gains and losses on the sale of mortgage loans, changes in fair value of mortgage loans and related derivatives, as well as mortgage servicing income, which includes the change in fair value of MSRs and related derivatives. Mortgage banking income was $52.4 million for the year ended December 31, 2025, an increase of $5.8 million compared to the prior period. The increase includes an increase from gains on sale and related fair value changes of $5.0 million to $38.7 million in the current period compared to $33.7 million in the prior period. This was impacted by the increase in interest rate lock volume of $196.7 million, or 13.5% during the current period over the same period in the prior year.

Investment services and trust income is comprised of wealth management fees and trust and insurance income. This caption increased $2.1 million during the year ended December 31, 2025 to $16.3 million as compared to $14.2 million during the year ended December 31, 2024. This growth was driven primarily by higher fees resulting from increased assets under management in existing accounts, supported by favorable market conditions.

Service charges on deposit accounts include overdraft fees, account analysis fees and other customer transaction-related service charges. Service charges on deposit accounts increased $1.9 million during the year ended December 31, 2025 to $15.1 million as compared to $13.2 million during the year ended December 31, 2024. The increase was primarily due to the increase in deposit accounts from the Southern States merger.

ATM and interchange fees represent income related to customers' utilization of their debit cards and interchange income. ATM and interchange fees were $12.1 millionfor the year ended December 31, 2025, compared to $11.5 million for the year ended December 31, 2024.

Net loss from investment securities was $60.5 million for the year ended December 31, 2025 compared to $56.4 million for the year ended December 31, 2024. The net loss from investment securities during the year ended December 31, 2025 was the result of management's election to sell $266.9 million of AFS debt securities compared to $526.4 million of AFS debt securities sold during the prior year period. Refer to the section “Other earning assets” for additional information on the sale of the AFS debt securities.

Net loss on sales or write-downs of premises and equipment, other real estate owned and other assets increased $1.0 million for the year ended December 31, 2025. The increase was driven by a $2.3 million impairment charge on two decommissioned facilities recognized during the year ended December 31, 2024, offset by a $1.0 million increase in losses on sales and write downs of other real estate owned and other assets during the year ended December 31, 2025.

Other income is comprised of income recognized that does not typically fit into other income categories and includes components such as BOLI income, swap fees, and equity investments income. Other income decreased $2.5 million to $9.6 million during the year ended December 31, 2025 as compared to $12.1 million during the year ended December 31, 2024. This decrease was primarily driven by a $2.3 million loss associated with an equity method investment during the year ended December 31, 2025.

Noninterest expense

The following table sets forth the components of noninterest expense for the periods indicated:

Years Ended December 31,

Merger and integration costs 23,803 — —

Amortization of core deposit and other intangibles 5,298 2,947 3,659

Year ended December 31, 2025 compared to year ended December 31, 2024

Noninterest expense increased by $81.3 million, or 27.4%, during the year ended December 31, 2025 to $378.2 million as compared to $296.9 million in the year ended December 31, 2024. The increase in noninterest expense was attributable to increases in salaries and employee benefits, merger and integration costs associated with the Southern States merger and other noninterest expense.

Salaries, commissions and employee benefits expense is comprised of salaries and wages in addition to other employee benefit costs and represents the largest component of noninterest expense. Salaries, commissions and employee benefits expense increased $33.9 million, or 18.4%, to $217.7 million for the year ended December 31, 2025 as compared to $183.8 million for the year ended December 31, 2024. This change was driven by increases in the salaries and benefit costs due to increased headcount resulting from the Southern States merger, combined with an increase in performance-based compensation driven by improvement in the Company’s performance metrics.

Occupancy and equipment expense includes occupancy, depreciation and equipment expense. Occupancy and equipment expense of $28.1 million and $26.3 million was recognized for the years ended December 31, 2025 and 2024. The increase was driven by the expansion of our branch network in connection with the Southern States merger.

Merger and integration costs include costs associated with the merger, integration and conversion of business combinations. Merger and integration costs were $23.8 millionfor the year ended December 31, 2025 associated with the merger with Southern States. These costs primarily include legal and professional fees, severance and other employee-related costs, and costs associated with branch consolidation, conversion and integration activities.

Data processing is comprised of all third-party core operating systems and processing charges as well as payroll processing. Data processing fees were $9.7 millionfor the year ended December 31, 2025, compared to $9.6 million for the year ended December 31, 2024.

Advertising includes expenses related to sponsorships, advertising, marketing, customer relations and business development and public relations. During the year ended December 31, 2025, advertising expense increased $2.6 million to $9.6 million compared to $7.0 million during the year ended December 31, 2024. This increase was primarily attributable to customer marketing campaigns during year ended December 31, 2025 combined with favorable, volume based marketing rebate activity recorded in the prior year period.

Legal and professional fees represent fees incurred for the various support functions, which includes legal, consulting, outsourcing and other professional related fees. Legal and professional fees were $8.1 million and $7.7 million for the years ended December 31, 2025 and 2024, respectively.

Amortization of core deposit and other intangibles was $5.3 millionfor the year ended December 31, 2025, compared to $2.9 million for the year ended December 31, 2024. The increase was primarily due to $3.0 million of amortization associated with the core deposit intangible assumed with the merger of Southern States.

Other noninterest expense increased $16.3 million during the year ended December 31, 2025 to $75.8 million compared to $59.6 million during the year ended December 31, 2024. The increase was attributable to a $4.7 million increase in franchise tax expense, a $2.4 million increase of technology and platform fees and modest increases across a range of other expense categories, including software license and maintenance fees, card transaction fees, contributions and dues, servicing fees and other operating expenses.

Efficiency ratio

The efficiency ratio is one measure of productivity in the banking industry. This ratio is calculated to measure the cost of generating one dollar of revenue. That is, the ratio is designed to reflect the percentage of one dollar which must be expended to generate that dollar of revenue. We calculate this ratio by dividing noninterest expense by the sum of net interest income and noninterest income. For an adjusted efficiency ratio, we exclude certain gains, losses and expenses we do not consider core to our business.

Our efficiency ratio was 67.5% and 65.2% for the years ended December 31, 2025 and 2024, respectively. Our adjusted efficiency ratio, on a tax-equivalent basis, was 56.4% and 57.3% for the years ended December 31, 2025 and 2024, respectively. See “GAAP reconciliation and management explanation of non-GAAP financial measures” in this Report for a discussion of the adjusted efficiency ratio.

Income taxes

Income tax expense was $15.9 million and $30.6 million for the years ended December 31, 2025 and 2024, respectively. This represents effective tax rates of 11.5% and 20.9% for the years ended December 31, 2025 and 2024, respectively. The primary differences between the effective tax rates and the enacted federal statutory rate was primarily driven by a one‐time gross tax benefit of $10.7 million related to the expiration of the statute of limitations associated with an amended income tax return and related interest, as well as interest income on tax refunds and tax‐exempt municipal interest income, net of interest disallowance. These favorable impacts were partially offset by applicable state income taxes and certain non‐deductible expenses, including limitations under Section 162(m) limitations.

For the year ended December 31, 2025, income tax expense also reflects the income tax effect of a $60.5 million loss on sale of AFS debt securities. For the year ended December 31, 2024, income tax expense included the income tax effect of loss on sale of AFS debt securities of $56.4 million. Refer to Note 13 “Income taxes” in the notes to the consolidated financial statements for additional information regarding our income tax expense and effective tax rates.

Financial condition

The following discussion of our financial condition compares balances as of December 31, 2025 and 2024.

Loan portfolio

The following table sets forth the balance and associated percentage of each class of financing receivable in our loan portfolio as of the dates indicated:

December 31,

Loan Type:

Residential real estate:

Commercial real estate:

Our loans HFI portfolio is our most significant earning asset, comprising 76.0% and 73.0% of our total assets at December 31, 2025 and 2024, respectively. Our strategy is to grow our loan portfolio by originating quality commercial and consumer type loans that comply with our credit policies and that produce revenues consistent with our financial objectives. Our overall lending approach is primarily focused on providing credit to our customers directly in the markets we serve. However, we also participate in loan syndications and participations from other banks (collectively, “participated loans”). As of December 31, 2025 and 2024, loans HFI included approximately $433.2 million and $177.6 million, respectively, related to participated loans.

We also sell loan participations to unaffiliated third-parties as part of our credit risk management and balance sheet management strategy. During the years ended December 31, 2025 and 2024, we sold $24.3 million and $25.3 million loan participations, respectively. All loans, whether or not we act as a participant, are underwritten to the same standards as all other loans we originate. We believe our loan portfolio is well-balanced, which provides us with the opportunity to grow while monitoring our loan concentrations.

Loan concentrations are considered to exist when there are amounts loaned to a number of borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. Our lending activity is heavily concentrated in the geographic market areas we serve, with the highest concentration in Tennessee. This geographic concentration subjects our loan portfolio to the general economic conditions within the state. The risks created by this concentration have been considered by management in the determination of the appropriateness of the allowance for credit losses on loans HFI. As of December 31, 2025 and 2024, there were no concentrations of loans exceeding 10% of total loans other than our geographic exposure to Tennessee, Alabama and Georgia, as well as the categories of loans disclosed in the table above. We believe our loan portfolio is diversified relative to industry concentrations across the various loan portfolio categories. For additional details related to the concentrations within our loan portfolio, refer to the industry classification and collateral property type concentration tables detailed later in this section.

Banking regulators have established guidelines of less than 100% of Tier 1 capital plus allowance for credit losses in construction lending and less than 300% of Tier 1 capital plus allowance for credit losses in commercial real estate lending that management monitors as part of the risk management process. The construction concentration ratio is a percentage of the outstanding construction and land development loans to total Tier 1 capital plus allowance for credit losses. The commercial real estate concentration ratio is a percentage of the outstanding balance of non-owner occupied commercial real estate, multifamily, and construction and land development loans to Tier 1 capital plus allowance for credit losses. Management strives to operate within the thresholds set forth above. When our ratios are in excess of one or both of these guidelines, banking regulators generally require an increased level of monitoring in these lending areas by management.

The table below shows concentration ratios for the Bank and Company as of December 31, 2025 and 2024.

As a percentage (%) of Tier 1 capital plus allowance for credit losses

FirstBank FB Financial Corporation

As part of our lending policy and risk management activities, we track lending exposure of commercial and industrial and owner-occupied commercial real estate by industry classification (as defined by the North American Industry Classification System) and type to determine potential risks associated with industry concentrations, and if any risk issues could lead to additional credit loss exposure. The table below provides a summary of our commercial and industrial and owner-occupied commercial real estate portfolios by industry classification.

(dollars in thousands) Committed Amount Outstanding Nonperforming(1)

Commercial and industrial

Management of companies and enterprises 57,160 42,156 —

Commercial real estate owner-occupied

Professional, scientific and technical services 65,281 63,237 89

Management of companies and enterprises 21,254 19,276 —

(1) Nonperforming loans are those on which the accrual of interest has stopped, as well as loans that are contractually 90 or more days past due on which interest continues to accrue.

Additionally, we track our lending exposure of non-owner occupied commercial real estate and construction by collateral property type to determine potential risks associated with collateral types, and if any risk issues could lead to additional credit loss exposure. The table below provides a summary of our non-owner occupied commercial real estate and construction loan portfolios by collateral property type.

(dollars in thousands) Committed Amount Outstanding Nonperforming(1)

Commercial real estate non-owner occupied

Assisted living and special care facilities 164,157 163,444 —

Construction

Consumer:

Commercial:

Recreation, sports and entertainment 21,208 12,992 —

Residential Development:

1) Nonperforming loans are those on which the accrual of interest has stopped, as well as loans that are contractually 90 days or more past due on which interest continues to accrue.

Loan maturity and sensitivities

The following table presents the contractual maturities of our loan portfolio as of December 31, 2025. Loans with scheduled maturities are reported in the maturity category in which the payment is due. Demand loans with no stated maturity and overdrafts are reported in the “due in 1 year or less” category. Loans that have adjustable rates are shown as amortizing to final maturity rather than when the interest rates are next subject to change. The tables do not include prepayment assumptions or scheduled repayments.

Residential real estate:

Commercial real estate:

For loans due after one year or more, the following table presents the interest rate composition for loans outstanding as of December 31, 2025.

Loan type (dollars in thousands) Fixedinterest rate Floatinginterest rate Total

Residential real estate:

Commercial real estate:

The following table presents the contractual maturities of our loan portfolio segregated into fixed and floating interest rate loans as of December 31, 2025.

Asset quality

In order to operate with a sound risk profile, we focus on originating loans that we believe to be of high quality. We have established loan approval policies and procedures to assist us in maintaining the overall quality of our loan portfolio. When delinquencies in our loans exist, we rigorously monitor the levels of such delinquencies for any negative or adverse trends. From time to time, we may modify loans to extend the term or make other concessions, including interest rate reduction, a term extension, principal forgiveness, payment deferral, or a combination thereof, to help a borrower with a deteriorating financial condition stay current on their loan and to avoid foreclosure. Furthermore, we are committed to collecting on all of our loans. This practice leads to higher recoveries in the long-term.

Nonperforming assets

Our nonperforming assets consist of nonperforming loans, other real estate owned and other repossessed non-earning assets. As of December 31, 2025 and 2024, we had $158.1 million and $121.9 million, respectively, in nonperforming assets. Nonperforming loans are those on which the accrual of interest has stopped, as well as loans that are contractually 90 or more days past due on which interest continues to accrue. Accrued interest receivable written off as an adjustment to interest income amounted to $2.1 million and $0.7 million for the years ended December 31, 2025 and 2024, respectively. Additionally, we had net interest recoveries on nonperforming assets previously charged off of $1.9 million and $1.8 million for the years ended December 31, 2025 and 2024, respectively.

Nonperforming loans HFI increased by $36.8 million to $120.5 million as of December 31, 2025 compared to $83.7 million as of December 31, 2024. The increase in nonperforming loans primarily occurred in our construction, multi-family, consumer and other and 1-4 family mortgage portfolios partially offset by a decrease in our commercial and industrial portfolio.

As of December 31, 2025 and 2024, we had $28.1 million and $31.4 million, respectively, of delinquent GNMA optional repurchase loans previously sold included on our consolidated balance sheets in loans held for sale. These are considered nonperforming assets as we do not earn any interest on the unexercised option to repurchase these loans.

The following table provides details of our nonperforming assets, the ratio of such loans and other nonperforming assets to total assets, and certain other related information as of the dates presented:

December 31,

Loan Type:

Residential real estate:

Commercial real estate:

Nonperforming loans HFI as a percentage of total loans HFI 0.97 % 0.87 %

Nonperforming assets as a percentage of total assets 0.97 % 0.93 %

Nonaccrual loans HFI as a percentage of loans HFI 0.71 % 0.62 %

We have evaluated our loans HFI classified as nonperforming and believe all nonperforming loans have been adequately reserved for in the allowance for credit losses on loans HFI as of December 31, 2025 and 2024. Management also continually monitors past due loans for potential credit quality deterioration. Loans not considered nonperforming include loans 30-89 days past due that continue to accrue interest amounting to $66.8 million at December 31, 2025 as compared to $47.9 million at December 31, 2024. The increase from December 31, 2024 to December 31, 2025 primarily occurred within our consumer and other, 1-4 family mortgage and commercial real estate portfolios.

Allowance for credit losses

The allowance for credit losses represents the portion of the loan’s amortized cost basis that we do not expect to collect due to credit losses over the loan’s life, considering past events, current conditions, and reasonable and supportable forecasts of future economic conditions. Loan losses are charged against the allowance when we believe the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for credit losses is based on the loan’s amortized cost basis, excluding accrued interest receivable, as we promptly charge off uncollectible accrued interest receivable.

Beginning with June 30, 2025, we began to utilize the discounted cash flow estimation technique, adjusted for current conditions and reasonable and supportable forecasts, to estimate the expected credit losses of its loan segments, except consumer and other loans, which utilized the weighted average remaining maturity loss rate technique. We determined that the use of the updated estimate techniques and related inputs and assumptions enhances the transparency, accuracy and relevance of information relating to the allowance for credit losses through the application of data and calculations more clearly calibrated to our historical experience, the nature of our loan portfolio and unfunded commitments, and expectations for future economic conditions and corresponding expected credit losses. See “Note 1, “Basis of presentation and summary of significant accounting policies” in this Report for further discussion on the change in estimate. The changes are accounted for as a change in estimate included in the provision for credit losses for the year ended December 31, 2025 and did not have a material impact to our operating results and financial condition.

Prior to June 30, 2025, our estimates for credit losses calculation utilized a lifetime loss rate model. See Note 1, “Basis of presentation and summary of significant accounting policies,” in the notes to our consolidated financial statements in our Annual Report that was filed with the SEC on February 25, 2025, for additional information regarding our estimates prior to June 30, 2025.

The following table presents the allocation of the allowance for credit losses by loan HFI category as well as the ratio of loans by loan category compared to the total loans HFI portfolio as of the dates indicated:

December 31,

Loan Type:

Residential real estate:

Commercial real estate:

The following table summarizes activity in our allowance for credit losses on loans HFI during the periods indicated:

Years Ended December 31,

Charge-offs:

Residential real estate:

Residential line of credit — (73) —

Commercial real estate:

Owner-occupied (17) — (144)

Recoveries:

Construction — — 10

Residential real estate:

Residential line of credit 12 18 1

Commercial real estate:

(1) Includes the impact of changes to estimation techniques, inputs and assumptions used to estimate credit losses during the year ended December 31, 2025. See “Note 1, “Basis of presentation and summary of significant accounting policies” in this Report for further discussion on the change in estimate.

The following tables details our provision for (reversal of)credit losses on loans HFI and net (charge-offs) recoveries to average loans HFI outstanding by loan category during the periods indicated:

(dollars in thousands)

Residential real estate:

Commercial real estate:

Residential real estate:

Commercial real estate:

Residential real estate:

Commercial real estate:

The ACL on loans HFI was $186.0 million and $151.9 million and represented 1.50% and 1.58% of loans HFI as of December 31, 2025 and 2024, respectively. For further information related to the change in the ACL refer to “Provision for credit losses” section herein and Note 4, “Loans and allowance for credit losses on loans HFI” in the notes to our consolidated financial statements.

Our ratio of total nonperforming loans HFI as a percentage of total loans HFI increased by 10 basis points to 0.97% as of December 31, 2025 compared to December 31, 2024 primarily due to increases in nonperforming loans in our construction, multi-family, consumer and other and 1-4 family mortgages portfolios partially offset by a decrease in our commercial and industrial portfolio.

For the year ended December 31, 2025, we experienced net charge-offs of $6.7 million, or 0.06% of average loans HFI, compared to net charge-offs of $13.1 million, or 0.14% for the year ended December 31, 2024. We also maintain an allowance for credit losses on unfunded commitments in other liabilities, which increased to $16.2 million as of December 31, 2025 from $6.1 million as of December 31, 2024 due primarily to the change in CECL loss estimation methodology and the initial provision from unfunded commitments acquired in the Southern States merger.

Loans held for sale

Mortgage loans held for sale consisted of $173.0 million of residential real estate mortgage loans in the process of being sold to third-party private investors or government sponsored agencies and $28.1 million of GNMA optional repurchase loans. This compares to $95.4 million of residential real estate mortgage loans in the process of being sold to third-party private investors or government sponsored agencies and $31.4 million of GNMA optional repurchase loans as of December 31, 2024.

Other earning assets

Securities purchased under agreements to resell (“reverse repurchase agreements”)

We enter into agreements with certain customers to purchase investment securities under agreements to resell at specific dates in the future. This investment deploys some of our unused liquidity position into an instrument that improves the return on those funds. Securities purchased under agreements to resell totaled $45.8 million and $61.1 million at December 31, 2025 and 2024, respectively.

Federal funds sold

Federal funds sold may fluctuate from period to period depending upon our liquidity position at the time and our strategy for deploying liquidity. Federal funds sold totaled $167.5 million and $64.8 million at December 31, 2025 and 2024, respectively.

AFS debt securities portfolio

Our investment portfolio objectives include maximizing total return after other primary objectives are achieved such as, but not limited to, providing liquidity, capital preservation, and pledging collateral for certain deposit types, various lines of credit and other borrowings. The investment objectives guide the portfolio allocation among security types, maturities, and other attributes.

The fair value of our AFS debt securities portfolio was $1.46 billion and $1.54 billion as of December 31, 2025 and 2024, respectively. Included in the fair value of AFS debt securities were net unrealized losses of $47.9 million and $141.4 million as of December 31, 2025 and 2024, respectively. Current net unrealized losses are driven by prevailing interest rate levels versus interest rate levels when many of the bonds were purchased.

During the year ended December 31, 2025, we sold $266.9 million of AFS debt securities, resulting in a loss on securities of $60.5 million. We used the proceeds from this transaction to redeem outstanding subordinated and trust preferred debt, as well as originate higher yielding loans. During the same period, maturities, prepayments and calls of AFS debt securities totaled $301.0 million and purchases totaled $421.5 million.

During the year ended December 31, 2024, we sold $526.4 million of AFS debt securities, resulting in a loss on securities of $56.4 million. We primarily sold fixed rate, deeply discounted mortgage bonds and low yielding municipal bonds and reinvested the proceeds into U.S. government agency AFS debt securities and a blend of fixed and floating rate securities to achieve the best accretion profile for the Bank. Including the reinvestment of these proceeds, we purchased $905.4 million of AFS debt securities during the year ended December 31, 2024. Maturities, prepayments and calls of AFS debt securities totaled $299.8 million for the year ended December 31, 2024.

The following table sets forth the fair value, scheduled maturities and weighted average yields for our AFS debt securities portfolio as of the dates indicated below:

December 31,

U.S. government agency securities:

Maturing within one year — — % — % — — % — %

Maturing in one to five years — — % — % — — % — %

Mortgage-backed securities - residential and commercial:

Maturing within one year — — % — % 2,222 0.1 % 3.35 %

Municipal securities:

U.S. Treasury securities:

Maturing within one year — — % — % 299 — % 4.25 %

Maturing in one to five years 5,803 0.4 % 3.71 % — — % — %

Maturing in five to ten years 1,322 0.1 % 3.81 % — — % — %

Maturing after ten years — — % — % — — % — %

Corporate securities:

Maturing within one year — — % — % — — % — %

Maturing in five to ten years — — % — % — — % — %

Maturing after ten years — — % — % — — % — %

(1)Yields on a tax-equivalent basis.

Equity securities, at fair value

As of December 31, 2025, we had $0.2 million in marketable equity securities recorded at fair value that were acquired through our merger with Southern States. The change in the fair value of equity securities recorded at fair value resulted in a net gain of $14 thousand for the year ended December 31, 2025. Subsequent to December 31, 2025, the remaining marketable equity securities were sold.

Deposits

Deposits represent the Bank’s primary source of funding. We continue to focus on growing core customer deposits through our relationship driven banking philosophy, community-focused marketing programs and our treasury management services.

Total deposits increased to $13.91 billion as of December 31, 2025 from $11.21 billion a year earlier, driven primarily by $2.47 billion of deposits assumed in the Southern States merger. Noninterest‐bearing deposits rose to $2.63 billion from $2.12 billion, including $562.5 million assumed in the merger. Interest‐bearing deposits increased to $11.28 billion from $9.09 billion, reflecting $1.91 billion of merger‐related balances.

Within interest‐bearing categories, checking balances declined to $2.65 billion from $2.91 billion as management continued efforts to reduce higher‐cost deposits. Money market and savings balances grew by $1.63 billion due to the merger, customer deposit campaigns and commercial relationship growth across the footprint. Customer time deposits increased by $648.7 million, supported by the Southern States merger and a $130.0 million increase in public fund time deposits. Brokered and internet time deposits rose $156.5 million to $625.6 million as part of our liquidity management strategy.

We also experienced a decrease in the cost of interest‐bearing deposits, reflecting a lower interest rate environment. Average deposit balances by type, together with the average rates per period are reflected in the average balance sheet amounts, interest paid, and rate analysis tables included in this management’s discussion and analysis under the subheading “Results of operations” discussion.

Our deposit base may include certain deposits from related parties as disclosed within Note 23, “Related party transactions” in the notes to our consolidated financial statements included in this Report.

The following table sets forth the distribution by type of our deposit accounts as of the dates indicated:

December 31,

Deposit Type

Customer Time Deposits(2)

Brokered and Internet Time Deposits(2)

Further details related to our deposit customer base is presented below as of the dates indicated:

December 31,

(dollars in thousands) Amount % of total deposits Amount % of total deposits

Deposits by customer segment(1)

(1) Segments are determined based on the customer account level.

The tables below set forth maturity information on time deposits as of December 31, 2025, categorized by balances less than $250 and greater than $250, exceeding FDIC insurance limits:

(dollars in thousands) Amount Weighted average interest rate at period end

Time deposits of $250 and less

Months to maturity:

Time deposits of greater than $250

Months to maturity:

Uninsured deposits are defined as the portion of deposit accounts in U.S. federally insured depository institutions that exceed the FDIC insurance limit and amounts in any other uninsured investment or deposit account that are classified as deposits and are not subject to any federal or state deposit insurance regimes. Collateralized deposits are included within our total uninsured deposits.

As of December 31, 2025, the estimated portion of time deposits outstanding that are otherwise uninsured by maturity were as follows:

(dollars in thousands) Amount

Months to maturity:

Further details related to our estimated insured or collateralized deposits and uninsured and uncollateralized deposits is presented below as of the dates indicated:

December 31,

Estimated uninsured and uncollateralized deposits(1) $ 4,084,362 $ 2,863,638

(1) Amounts are shown on a fully consolidated basis and exclude deposits of affiliates that are eliminated in consolidation.

(2) Amounts are shown on an unconsolidated basis consistent with regulatory reporting requirements.

Borrowed funds

Deposits are the primary source of funds for our lending activities and general business purposes. However, we also fund our operations through other channels, including obtaining advances from the FHLB, borrowings from the Federal Reserve’s Discount Window or one-off borrowing programs, purchasing federal funds and engaging in overnight borrowing with correspondent banks, or entering into client repurchase agreements. We use these sources of funds as part of our asset liability management process to control our long-term interest rate risk exposure, even if it may increase our short-term cost of funds.

Our level of short-term borrowings fluctuates daily based on funding needs, the sources of funds to meet those needs, and the overall interest rate environment and cost of public funds.

Securities sold under agreements to repurchase and federal funds purchased

We enter into agreements with certain customers to sell certain securities under agreements to repurchase the security the following day. These agreements are made to provide customers with comprehensive treasury management products as a short-term return for their excess funds. Securities sold under agreements to repurchase totaled $9.9 million and $13.5 million at December 31, 2025 and 2024, respectively.

We also maintain lines with certain correspondent banks that provide borrowing capacity in the form of federal funds purchased. Federal funds purchased are short-term borrowings that typically mature within one to fourteen days. Borrowings against these lines, which are classified as federal funds purchased, totaled $90.0 million as of December 31, 2025. There were no such borrowings as of December 31, 2024.

FHLB advances

As a member of the FHLB system, we may utilize advances from the FHLB in order to provide additional liquidity and funding. Under these short-term agreements, we maintain a line of credit that as of December 31, 2025 and 2024 had total borrowing capacity of $2.21 billion and $1.40 billion, respectively. As of December 31, 2025 and 2024, we had qualifying loans pledged as collateral securing these lines amounting to $3.82 billion and $2.61 billion, respectively. There were no FHLB advances outstanding as of December 31, 2025 or December 31, 2024.

Subordinated debt

Prior to the year ended December 31, 2025, we had issued junior subordinated debentures through two separate trusts which issued floating rate trust preferred securities to external investors. The trusts were created for the sole purpose of issuing 30-year capital trust preferred securities to fund the purchase of the junior subordinated debentures. In September 2025, we redeemed notes related to these trusts at the principal amount plus accrued and unpaid interest pursuant to the terms of the debentures. As a result of this redemption, we redeemed $30.9 million of junior subordinated debentures.

Separately, during September 2025, the Bank redeemed $100.0 million of ten-year fixed-to-floating rate subordinated notes. This redemption was executed at the principal amount plus accrued interest, in accordance with the terms of the notes.

On July 1, 2025, we assumed three separate fixed-to-floating rate subordinated notes in connection with our merger with Southern States with a principal balance totaling $92.5 million. As of December 31, 2025, no other subordinated debt remained outstanding apart from the debt assumed through this business combination.

Further details regarding our subordinated debt as of December 31, 2025 are provided below.

Unamortized fair value marks (8,830)

Total subordinated debt, net $ 83,670

Other borrowings

Other borrowings include our finance lease liability totaling $1.1 million and $1.2 million as of December 31, 2025 and 2024, respectively. Additionally, other borrowings include optional rights to repurchase GNMA loans previously sold that meet certain defined delinquency criteria and are eligible for repurchase totaling $28.1 million and $31.4 million as of December 31, 2025 and 2024, respectively. See Note 8, “Leases” and Note 17, “Fair value of financial instruments” within the notes to our consolidated financial statements herein for additional information regarding our finance lease and optional rights to repurchase GNMA loans, respectively.

Other borrowings may periodically include borrowings from the Federal Reserve’s Discount Window or other borrowing programs available to us as an additional source of short-term liquidity. As of December 31, 2025 and 2024, there were no such other borrowings outstanding. Under our Borrower‐in‐Custody arrangement, we are permitted to pledge qualifying loans as collateral while retaining possession of the loan documentation. As of December 31, 2025 and 2024, we had pledged loan collateral totaling $2.88 billion and $2.56 billion, respectively, to the Federal Reserve under the Borrower-in-Custody program, resulting in total borrowing capacity of $2.27 billion and $2.05 billion, respectively.

Liquidity and capital resources

We are expected to maintain adequate liquidity at the Bank to meet the cash flow requirements of clients who may be either depositors wishing to withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs. Our Liquidity Policy is intended to cause the Bank to maintain adequate liquidity and, therefore, enhance our ability to raise funds to support asset growth, meet deposit withdrawals and lending needs and otherwise sustain our operations. We accomplish this through management of the maturities of our interest-earning assets and interest-bearing liabilities. We believe that our present position is adequate to meet our current and future liquidity needs.

We continuously monitor our liquidity position to ensure that assets and liabilities are managed in a manner that will meet all of our short-term and long-term cash requirements. We manage our liquidity position to meet the daily cash flow needs of clients, while maintaining an appropriate balance between assets and liabilities to optimize our net interest margin. We also monitor our liquidity requirements in light of interest rate trends, changes in the economy and the scheduled maturity and interest rate sensitivity of the investment and loan portfolios and deposits.

As part of our liquidity management strategy, we focus on minimizing our costs of liquidity and attempt to decrease these costs by growing our noninterest-bearing and other low-cost deposits, while replacing higher cost funding sources. While we do not control the types of deposit instruments our clients choose, we do influence those choices with the rates and the deposit specials we offer. Increasing interest rates generally attracts customers to higher cost interest-bearing deposit products as they seek to maximize their yield.

Our investment portfolio is another alternative for meeting liquidity needs. These assets generally have readily available markets that offer conversions to cash as needed. AFS debt securities within our investment portfolio are typically used to secure government, public, trust and other deposits and as collateral for short-term borrowings, letters of credit and derivative instruments. As of December 31, 2025 and 2024, we had pledged securities with carrying values of $810.6 million and $937.0 million, respectively.

Additional sources of liquidity include federal funds purchased, repurchase agreements, FHLB borrowings, Federal Reserve Discount Window borrowings and lines of credit. Interest is charged at the prevailing market rate on federal funds purchased, reverse repurchase agreements and FHLB advances, and at the Federal Reserve’s primary credit rate for Discount Window borrowings.

Overnight advances obtained from the FHLB are used primarily to meet day to day liquidity needs, particularly when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits. There were no FHLB advances outstanding as of December 31, 2025 or December 31, 2024. As of December 31, 2025, we had the ability to borrow $2.21 billion through FHLB advances, all of which remained available. As of December 31, 2024, we had $1.40 billion available, all of which remained available.

Short‐term borrowings from the Federal Reserve’s Discount Window serve as an additional contingent source of liquidity. The Company accesses the Discount Window through its Borrower‐in‐Custody collateral arrangement, which permits the Bank to pledge qualifying loans while retaining custody of the underlying loan documentation. There were no Federal Reserve Discount Window borrowings outstanding as of December 31, 2025 or December 31, 2024. As of December 31, 2025, we had borrowing capacity of $2.27 billion under the Discount Window Borrower‐in‐Custody program, all of which remained available. As of December 31, 2024, capacity totaled $2.05 billion, all of which remained available.

We also maintained unsecured lines of credit with other commercial banks totaling $405.0 million and $370.0 million as of December 31, 2025 and 2024, respectively. These are unsecured, uncommitted lines of credit typically maturing at various times within the next twelve months. Borrowings against these lines, which are classified as federal funds purchased, totaled $90.0 million as of December 31, 2025. There were no such borrowings as of December 31, 2024. As of both December 31, 2025 and 2024, we also had $50.0 million available through the IntraFi network, which allows us to offer banking customers access to FDIC insurance protection on deposits through our Bank which exceed FDIC insurance limits.

Our current on-balance sheet liquidity and available sources of liquidity are summarized in the table below:

December 31,

Current on-balance sheet liquidity:

Equity securities, at fair value 155 —

Available sources of liquidity:

On-balance sheet liquidity as a percentage of total assets 11.1 % 12.5 %

(1)Includes capacity available per internal policy in the form of brokered deposits and unsecured lines of credit.

(2)Amounts are shown on a fully consolidated basis and exclude deposits of affiliates that are eliminated in consolidation.

The Company also maintains the ability to access capital markets to meet its liquidity needs. The Company may utilize various methods to raise capital, including through the sale of common stock, preferred stock, debt securities, warrants, rights, or other securities. Specific terms and prices would be determined at the time of any such offering. In the past, the Company has utilized capital markets to generate liquidity in the form of common stock and subordinated debt primarily for the purpose of funding acquisitions.

The Company is a corporation separate and apart from the Bank and, therefore, it must provide for its own liquidity. The Company’s main source of funding is dividends declared and paid by the Bank to the Company. Statutory and regulatory limitations exist that affect the ability of the Bank to pay dividends to the Company. Management believes that these limitations will not impact the Company’s ability to meet its ongoing short-term cash obligations. For additional information regarding dividend restrictions, see the “Item 1. Business - Supervision and regulation,” “Item 1A. Risk Factors - Risks related to our business” and “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Dividends,” each of which is set forth in this Annual Report .

Due to state banking laws and the Federal Reserve's Regulation H, the Bank may not declare dividends in any calendar year in an amount exceeding the total of its net income for that year combined with its retained net income of the preceding two years, without the prior approval of the TDFI and/or Federal Reserve. Based upon these regulations, as of December 31, 2025 and 2024, $36.7 million and $185.9 million of the Bank’s retained earnings were available for the payment of dividends without such prior approval. In addition, dividends paid by the Bank to the Company would be prohibited if the effect thereof would cause the Bank’s capital to be reduced below applicable minimum capital requirements. During the year ended December 31, 2025, there were $201.6 million in cash dividends approved by the board for payment from the Bank to the holding company. During the year ended December 31, 2024, there were $61.5 million in cash dividends approved by the board for payment from the Bank to the holding company. Additionally, asset dividends of equity securities amounting to $21.7 million were distributed from the Bank to the holding company during the year ended December 31, 2024. There was no such asset dividend for the year ended December 31, 2025. Subsequent to the year ended December 31, 2025, the Board approved a dividend from the Bank to the holding company to be paid in the first quarter of 2026 for $35.8 million.

During the year ended December 31, 2025, the Company declared shareholder dividends of $0.76 per share, or $38.3 million. During the year ended December 31, 2024, the Company declared shareholder dividends of $0.68 per share, or $32.2 million. Subsequent to year ended December 31, 2025, the Company declared a quarterly dividend in the amount of $0.21 per share, payable on February 24, 2026, to stockholders of record as of February 10, 2026.

Our total shareholders’ equity was $1.95 billion and $1.57 billion as of December 31, 2025 and December 31, 2024, respectively. The increase in shareholders’ equity was primarily attributable to the $368.0 million of common stock issued in connection with our merger with Southern States, net income of $122.6 million and a $44.7 million unrealized loss reclassification adjustment for loss on sale of securities included in net income, net of tax benefit. This increase was partially offset by dividends declared of $38.3 million and stock repurchases of $155.9 million. Book value per common share was $37.64 as of December 31, 2025 and $33.59 as of December 31, 2024.

Our capital management consists of providing adequate equity to support our current and future operations. We are subject to various regulatory capital requirements administered by state and federal banking agencies, including the TDFI, Federal Reserve and the FDIC. Failure to meet minimum capital requirements may prompt certain actions by regulators that, if undertaken, could have a direct material adverse effect on our financial condition and results of operations. The Federal Reserve and the FDIC have issued guidelines governing the levels of capital that banks must maintain. As of December 31, 2025 and 2024, we met all capital adequacy requirements for which we were subject. See additional discussion regarding our capital adequacy and ratios within Note 20, “Minimum capital requirements” in the notes to our consolidated financial statements contained herein.

December 31, 2025 FB Financial Corporation FirstBank To be Well-Capitalized(1)

Total risk-based capital ratio 13.2 % 12.9 % 10.0 %

Tier 1 risk-based capital ratio 11.4 % 11.7 % 8.0 %

Common equity tier 1 ratio 11.4 % 11.7 % 6.5 %

(1) Applicable to Bank level capital.

Capital ratios are well above regulatory requirements for well-capitalized institutions. Management uses risk-based capital ratios in its analysis of the measures to assess the quality of capital and believes that investors may find it useful in their analysis of the Company.

Critical accounting estimates

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles and general practices within the banking industry. A summary of our accounting policies is included in “Item 8. Financial Statements and Supplementary Data - Note 1, Basis of presentation and summary of significant accounting policies” of this Report. Certain of these policies require management to apply significant judgment and estimates, which can have a material impact on the carrying value of certain assets and liabilities, and we consider the below policies to be our critical accounting policies.

Business combinations and goodwill

We apply the acquisition method to business combinations, recording acquired assets and assumed liabilities at estimated fair value as of the acquisition date. Goodwill represents the excess of the purchase consideration over the fair value of net identifiable assets. Determining these fair values requires significant judgment and are based on valuation methodologies that incorporate management's assumptions regarding projected cash flows, credit performance expectations, discount rates and collateral values. These assumptions are inherently uncertain and influenced by market and economic conditions; small changes in key inputs can materially affect the fair values assigned and resulting amount of goodwill recognized.

During the year, we completed the merger of Southern States which resulted in the recognition of goodwill. Goodwill is not amortized but rather is evaluated at least annually for impairment. Also during the year ended December 31, 2025, we performed a qualitative impairment assessment for the Banking reporting unit and concluded that it was not more likely than not that the unit's fair value was below its carrying amount. Accordingly, no quantitative test or impairment of goodwill was required. If future qualitative or quantitative assessments indicate a reduced fair value, due to changes in assumptions such as discount rates, long-term growth rates, expectations or projected earnings, an impairment charge may be required. Adverse changes in these assumptions could reduce the estimated fair value of the reporting unit and could result in an impairment charge.

Allowance for credit losses

The allowance for credit losses represents management’s best estimate of expected credit losses over the life of our loan portfolios as measured at each respective recent balance sheet date. However, significant downturns in circumstances relating to loan quality or economic conditions could necessitate additional provisions or reductions in the ACL. Unanticipated changes and events could have a significant impact on the financial performance of our loan customers and their ability to perform as agreed. The economic indices sourced from economic forecasts and used in developing the ACL include the unemployment rate, U.S. prime rate, and changes in commercial real estate and U.S. housing prices.

Given the dynamic relationship between economic variables within our modeling framework it is difficult to estimate the impact of a change in any one individual variable on the ACL. However, to illustrate a hypothetical sensitivity, we calculated a quantitative allowance using an alternative negative economic scenario. Under this alternative negative economic scenario, a significant deterioration in economic conditions was assumed which would negatively impact the underlying economic variables, compared to our baseline forecast. Below is a comparison of key economic assumptions between these scenarios at the end of each period noted below.

Baseline forecast:

Negative economic scenario:

Excluding the impact of qualitative considerations, using only the alternative negative economic scenario would result in a hypothetical increase over our recognized ACL of approximately $98.2 million, or 56.3%, at December 31, 2025.

The preceding sensitivity analysis results do not represent our view of expected credit losses nor is it intended to estimate future changes in provisioning for credit losses due to:

•highly uncertain and speculative economic environment;

•inter-relatedness and non-linearity of economic variables resulting inability to extrapolate to additional changes in variables; and

•sensitivity analysis does not consider any quantitative or qualitative adjustments and associated risk profile components incorporated by management as part of its overall ACL framework.

Mortgage servicing rights

We account for our mortgage servicing rights at fair value at each reporting date with changes in the fair value reported in earnings in the period in which the changes occur. We retain the right to service certain mortgage loans that we sell to secondary market investors. These mortgage servicing rights are recognized as a separate asset on the date the corresponding mortgage is sold.

The retained mortgage servicing right is initially measured at the fair value of future net cash flows expected to be realized for performing servicing activities. Fair value is determined using an income approach with various assumptions including expected cash flows, prepayment speeds, market discount rates, servicing costs, and other factors. These techniques require management to make estimates regarding future servicing cash flows, taking into consideration historical and forecasted residential mortgage loan prepayment rates, discount rates, escrow balance and servicing costs. Changes in interest rates and prepayments speeds or other factors impact the fair value of the MSR which impacts earnings. The fair value of the MSR was $148.8 million at December 31, 2025.

Based on a hypothetical sensitivity analysis, we estimate that an increase in discount rates of 100 basis points and 200 basis points would reduce the December 31, 2025 fair value of the MSR by approximately 4.70% (or $7.0 million) and 9.00% (or $13.4 million), respectively. Separately, a 10% and 20% increase on the prepayment rates would reduce the December 31, 2025 fair value of the MSR by approximately 2.71% (or $4.0 million) and 5.25% (or $7.8 million), respectively.

The sensitivity calculations above are hypothetical changes and should not be considered to be predictive of future performance. Changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, the effect of an adverse variation in a particular assumption on the fair value of the mortgage servicing rights calculated without changing any other assumption, while in reality changes in one factor may result in changes in another, which may either magnify or counteract the effect of the change. The derivative instruments utilized by the Company, which were not included in the above sensitivities, would serve to offset the estimated impacts to fair value included above.

ITEM 7A — Quantitative and Qualitative Disclosures About Market Risk

Interest rate sensitivity

Our market risk arises primarily from interest rate risk inherent in the normal course of lending and deposit-taking activities. Management believes that our ability to successfully respond to changes in interest rates will have a significant impact on our financial results. To that end, management actively monitors and manages our interest rate risk exposure.

The ALCO, which is authorized by our Board of Directors, monitors our interest rate sensitivity and makes decisions relating to that process. The ALCO’s goal is to structure our asset/liability composition to maximize net interest income while managing interest rate risk so as to minimize the adverse impact of changes in interest rates on net interest income and capital in either a rising or declining interest rate environment. Profitability is affected by fluctuations in interest rates. A sudden and substantial change in interest rates may adversely impact our earnings because the interest rates borne by assets and liabilities do not change at the same speed, to the same extent or on the same basis.

We monitor the impact of changes in interest rates on our net interest income and economic value of equity using rate shock analysis. Net interest income simulations measure the short-term earnings exposure from changes in market rates of interest in a rigorous and explicit fashion. Our current financial position is combined with assumptions regarding future business to calculate net interest income under varying hypothetical rate scenarios. EVE measures our long-term earnings exposure from changes in market rates of interest. EVE is defined as the present value of assets minus the present value of liabilities at a point in time. A decrease in EVE due to a specified rate change indicates a decline in the long-term earnings capacity of the balance sheet assuming that the rate change remains in effect over the life of the current balance sheet. For purposes of calculating EVE, a zero percent floor is assumed on discount factors.

The following analysis depicts the estimated impact on net interest income and EVE of immediate changes in interest rates at the specified levels for the periods presented:

Percentage change in:

Net interest income (1)

Change in interest rates December 31,

Percentage change in:

Economic value of equity (2)

Change in interest rates December 31,

(1)The percentage change represents the projected net interest income for 12 months on a static balance sheet in a stable interest rate environment compared to the projected net interest income in the various rate scenarios.

(2)The percentage change in this column represents our EVE in a stable interest rate environment compared to EVE in the various rate scenarios.

The results for the net interest income simulations as of December 31, 2025 and 2024 resulted in an asset sensitive position. The primary influence of our asset sensitivity is the floating rate structure in many of our loans held for investment as well as the composition of our liabilities which is primarily customer deposits. Our floating-rate loan portfolio is indexed to market rates and the timing and magnitude of loan and deposit repricing varies in proportion to market rate fluctuations. We actively monitor and perform stress tests on our deposit betas as part of our overall management of interest rate risk. This requires the use of various assumptions based on historical relationships of these variables in reaching any conclusion. Since these correlations are based on competitive pricing in the market, we anticipate that our future results will likely be different from the scenario results presented above and such differences could be material.

The preceding measures assume no change in the size or asset/liability compositions of the balance sheet. Thus, the measures do not reflect any actions the ALCO may undertake in response to such changes in interest rates. The scenarios assume instantaneous movements in interest rates in increments of 100, 200, 300 and 400 basis points. As interest rates are adjusted over a period of time, it is our strategy to proactively change the volume and mix of our balance sheet in order to mitigate our interest rate risk. The computation of the prospective effects of hypothetical interest rate changes requires numerous assumptions regarding characteristics of new business and the behavior of existing positions. These business assumptions are based upon our experience, business plans and published industry experience. Key assumptions employed in the model include asset prepayment speeds, competitive factors, the relative price sensitivity of certain assets and liabilities and the expected life of non-maturity deposits. Because these assumptions are inherently uncertain, actual results may differ from simulated results.

We may utilize derivative financial instruments as part of an ongoing effort to mitigate interest rate risk exposure to interest rate fluctuations and facilitate the needs of our customers. For more information about our derivative financial instruments, see Note 12, “Derivatives” in the notes to our consolidated financial statements.

ITEM 8 – Financial Statements and Supplementary Data

Table of Contents

Page

Glossary of abbreviations and acronyms 3

Management’s Assessment of Internal Controls Over Financial Statements 81

Reports of Independent Registered Public Accounting Firm (PCAOB ID: 173) 82

Consolidated Financial Statements:

Consolidated balance sheets 85

Consolidated statements of income 86

Consolidated statements of comprehensive income 87

Consolidated statements of changes in shareholders’ equity 88

Consolidated statements of cash flows 89

Notes to consolidated financial statements 91

Report on Management’s Assessment of Internal Control over Financial Reporting

The management of FB Financial Corporation (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal executive and principal financial officer and effected by the Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

The Company's management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2025. In making the assessment, management used the “Internal Control — Integrated Framework” promulgated by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment management has determined that, as of December 31, 2025, the Company's internal control over financial reporting is effective based on the COSO 2013 framework. Additionally, based upon management's assessment, the Company determined that there were no material weaknesses in its internal control over financial reporting as of December 31, 2025.

The effectiveness of the Company's internal control over financial reporting as of December 31, 2025, has been audited by Crowe LLP, an independent registered public accounting firm, as stated in their report which appears herein.

Report of Independent Registered Public Accounting Firm

Shareholders and the Board of Directors of FB Financial Corporation

Nashville, Tennessee

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of FB Financial Corporation (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report on Management’s Assessment of Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Merger – Fair Value of Loans Acquired

As described in Note 2 to the financial statements, on July 1, 2025, the Company completed its merger with Southern States Bancshares Inc. and its wholly-owned subsidiary, Southern States Bank. As a result of the merger, the Company added total assets of $2.8 billion, including total loans of $2.3 billion. The Company applies the acquisition method to business combinations, recording acquired assets and assumed liabilities at estimated fair value as of the acquisition date. Determining these fair values, in particular for loans acquired, requires significant judgment and are based of valuation methods that incorporate management’s assumptions regarding projected cash flows, credit performance expectations, discount rates and collateral values.

We identified auditing the fair value of loans acquired as a critical audit matter as auditing this estimate is especially complex and requires significant management judgment, which led to significant auditor judgment in evaluating the reasonableness of management’s significant assumptions, including the need for assistance from professionals with specialized skill and knowledge.

The primary procedures performed to address the critical audit matter included:

•Testing the effectiveness of controls over management’s estimate of the fair value of the acquired loans, including controls addressing:

◦The identification of purchased credit deteriorated (PCD) loans and ensuring such loans were accurately included in the valuation of the acquired loan portfolio.

◦The reasonableness of the fair value of acquired loans, including management’s review of the results of the third-party valuation, the completeness and accuracy of data inputs used, and the reasonableness of significant assumptions applied by the third party.

•Substantively testing management’s process for determining the fair value of the acquired loan portfolio, which included:

◦Evaluation of the completeness and accuracy of data inputs used as a basis for the valuation.

◦Evaluation of the completeness of PCD loans and their inclusion in the valuation of the acquired loan portfolio.

◦Evaluation, with the assistance of professionals with specialized skill and knowledge, of the appropriateness of management’s methodology and reasonableness of management’s judgments related to the significant valuation assumptions used in the estimate of the fair value of the acquired loans.

◦Testing the mathematical accuracy of the estimated fair value, including the application of the significant assumptions used in the calculation.

Allowance for Credit Losses on Loans – Model Design and Qualitative Factors

As described in Note 1 to the financial statements, the Company estimates expected credit losses on loans held for investment utilizing the current expected credit loss (“CECL”) methodology. The allowance for credit losses on loans represents the portion of the loan’s amortized cost basis that the Company does not expect to collect due to credit losses over the loan’s life, considering past events, current conditions, and reasonable and supportable forecasts of future economic conditions.

Beginning on June 30, 2025, the Company made changes to the estimation techniques and certain related inputs and assumptions used in estimating its expected credit losses on its loan portfolios. Prior to the changes, the Company primarily used a lifetime loss rate model to determine the allowance for credit losses. The Company now employs a discounted cash flow estimation technique, adjusted for current conditions and reasonable and supportable forecasts, for estimating expected credit losses of its loan segments, except consumer and other loans, which utilize the weighted average remaining maturity loss rate technique. As part of these updates to the estimation techniques, management updated certain related inputs and assumptions used to estimate the expected credit loss. The changes in the estimation techniques and certain related inputs and assumptions used in the determination of the Company’s expected credit losses

on its loan portfolio was determined by management to be a change in estimate and is accounted for prospectively after the transition date.

As noted above, following the transition date, the Company now utilizes a discounted cash flow estimate technique, adjusted for current conditions and reasonable and supportable forecast, to estimate the expected credit losses of its loan segments, except consumer and other loans, which utilizes the weighted average remaining maturity loss rate technique. The discounted cash flow estimation technique pairs loan-level contractual term information including maturity date, payment amount and interest rate with pool level assumptions such as default rates, severity rates and prepayment speeds to estimate expected cash flows for the pool. The Company utilizes forecast inputs provided by third parties to forecast losses during the reasonable and supportable period and reversion period utilizing models that provide a correlation to the Company and its peers’ historical losses. The discounted cash flow models produce an estimated net present value of each loan which is compared to the amortized cost and the resulting difference is the initial modeled quantitative expected credit loss estimate.

Adjustments to the quantitative results are made using qualitative factors. These factors include but are not limited to: levels of and trends in delinquencies and performance of loans; levels of and trends in write-offs and recoveries collected; trends in volume and terms of loans; effects of any changes in reasonable and supportable economic forecasts; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and expertise; available relevant information sources that contradict the Company’s own forecast; effects of changes in prepayment expectations or other factors affecting assessments of loan contractual terms; industry conditions; and effects of changes in credit concentrations.

We identified the auditing of the model design and the qualitative factors related to the allowance for credit losses on loans as a critical audit matter. With the change in estimate, a new loss estimation model was developed, and a significant amount of auditor judgment was required to evaluate the conceptual soundness in the design of the quantitative model. In addition, qualitative factors are subjective and require significant management judgment in their determination and significant auditor judgment in the evaluation of their reasonableness.

The primary procedures we performed to address the critical audit matter included:

•Testing the effectiveness of controls over the evaluation of the conceptual design and construction of the models and the evaluation of the qualitative factors, including controls addressing:

◦Management’s judgments in the design of the quantitative and qualitative models.

◦Management’s reconciliation and testing of loan data inputs to the models.

◦Management’s review of the results of the third-party model validation.

◦Management’s review and approval of the qualitative factors.

•Substantively testing management’s process related to the conceptual design and construction of the models and determination of qualitative factors, which included:

◦Evaluation, with the assistance of professionals with specialized skill and knowledge, of the reasonableness of management’s judgments related to the conceptual design and construction of the models.

◦Evaluation of the relevance and reliability of data utilized in the quantitative and qualitative models, including reconciliation and testing of loan data inputs.

◦Evaluation of the reasonableness of management’s judgments related to qualitative factors to determine if they are calculated to conform with management’s policies and were consistently applied from the transition date to year end.

/s/ Crowe LLP

We have served as the Company's auditor since 2018.

Franklin, Tennessee

February 26, 2026

FB Financial Corporation and subsidiaries

Consolidated balance sheets

(Amounts are in thousands except share and per share amounts)

December 31,

ASSETS

Federal funds sold and reverse repurchase agreements 213,391 125,825

Interest-bearing deposits in financial institutions 746,291 796,510

Investments:

Equity securities, at fair value 155 —

Restricted equity securities, at cost 79,046 32,749

Less: allowance for credit losses on loans HFI 185,983 151,942

Core deposit and other intangibles, net 31,284 5,762

LIABILITIES

Deposits

SHAREHOLDERS’ EQUITY

Accumulated other comprehensive loss, net (32,551) (101,684)

Total FB Financial Corporation common shareholders’ equity 1,948,165 1,567,538

Noncontrolling interest 93 93

See the accompanying notes to the consolidated financial statements.

FB Financial Corporation and subsidiaries

Consolidated statements of income

(Amounts are in thousands, except per share amounts)

Years Ended December 31,

Interest income:

Interest on investment securities

Interest expense:

Noninterest income:

Noninterest expenses:

FBK US Equity

FBK · 10-K · period ended 2025-12-31

ITEM 7 — Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 7A — Quantitative and Qualitative Disclosures About Market Risk

ITEM 8 – Financial Statements and Supplementary Data

FBK US Equity☆

FBK · 10-K · period ended 2025-12-31

ITEM 7 — Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 7A — Quantitative and Qualitative Disclosures About Market Risk

ITEM 8 – Financial Statements and Supplementary Data

FBK US Equity