Segment Reporting

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Segment Reporting

Segment reporting:

The Company and the Bank are engaged in the business of banking and provide a full range of financial services. The Company determines reportable segments based on the significance of the segment’s operating results to the overall Company, the products and services offered, customer characteristics, processes and service delivery of the segments and the regular financial performance review and allocation of resources by the Chief Executive Officer, the Company’s chief operating decision maker. The Company has identified two distinct reportable segments—Banking and Mortgage. The Company’s primary segment is Banking, which provides a full range of deposit and lending products and services to corporate, commercial and consumer customers. The Company also originates conforming residential mortgage loans through the Mortgage segment, which activities also include the servicing of residential mortgage loans and the packaging and securitization of loans to governmental agencies. The Company’s mortgage division represents a distinct reportable segment which differs from the Company’s primary business of commercial and retail banking.

The financial performance of the Mortgage segment is assessed based on results of operations reflecting direct revenues and expenses and allocated expenses. This approach gives management a better indication of the operating performance of the segment. When assessing the Banking segment’s financial performance, the CEO utilizes reports with indirect revenues and expenses including but not limited to the investment portfolio, electronic delivery channels and areas that primarily support the banking segment operations. Therefore, these are included in the results of the Banking segment. Other indirect revenue and expenses related to general administrative areas are also included in the internal financial results reports of the Banking segment utilized by the CEO for analysis and are thus included for Banking segment reporting. Additionally, the Banking segment includes the results of the Company's specialty lending group, which is concentrated in manufactured housing lending. The Mortgage segment utilizes funding sources from the Banking segment in order to fund mortgage loans that are ultimately sold on the secondary market and uses proceeds from loan sales to repay obligations due to the Banking segment.

During the year ended December 31, 2022, the Company exited the direct-to-consumer internet delivery channel, which is one of two delivery channels in the Mortgage segment. As a result of exiting this channel, the Company incurred $12,458 of restructuring expenses during the year ended December 31, 2022. The repositioning of the Mortgage segment does not qualify to be reported as discontinued operations. The Company plans to continue originating and selling residential mortgage loans within its Mortgage segment through its traditional mortgage retail channel, retain mortgage servicing rights and continue holding residential mortgage loans in the loan HFI portfolio.

Interest rate lock commitment volume and sales volume by delivery channel included in the Mortgage segment is as follows for the periods indicated:

	Years Ended December 31,
	2022			2021			2020
Interest rate lock commitment volume by delivery channel:
Direct-to-consumer	$	663,848		$	3,745,430		$	5,539,862
Retail	2,036,658			3,414,638			3,399,174
Total	$	2,700,506		$	7,160,068		$	8,939,036
Interest rate lock commitment volume % by delivery channel:
Direct-to-consumer	24.6		%	52.3		%	62.0		%
Retail	75.4		%	47.7		%	38.0		%
Mortgage sales by delivery channel:
Direct-to-consumer	$	1,031,810		$	3,328,216		$	3,751,813
Retail	1,958,849			2,873,861			2,483,336
Total	$	2,990,659		$	6,202,077		$	6,235,149
Mortgage sales % by delivery channel:
Direct-to-consumer	34.5		%	53.7		%	60.2		%
Retail	65.5		%	46.3		%	39.8		%

The following tables provide segment financial information for the periods indicated:

Year Ended December 31, 2022	Banking(4)		Mortgage		Consolidated
Net interest income	$	412,237	$	(2)	$	412,235
Provisions for credit losses(1)	18,982		—		18,982
Mortgage banking income(2)	—		83,679		83,679
Change in fair value of mortgage servicing rights, net of hedging(2)	—		(10,099)		(10,099)
Other noninterest income	41,320		(233)		41,087
Depreciation and amortization	7,035		982		8,017
Amortization of intangibles	4,585		—		4,585
Other noninterest expense(3)	240,096		95,648		335,744
Income (loss) before income taxes	$	182,859	$	(23,285)	$	159,574
Income tax expense					35,003
Net income applicable to FB Financial Corporation and noncontrolling interest					124,571
Net income applicable to noncontrolling interest(4)					16
Net income applicable to FB Financial Corporation					$	124,555
Total assets	$	12,228,451	$	619,305	$	12,847,756
Goodwill	242,561		—		242,561

(1) Includes $8,589 in provision for credit losses on unfunded commitments.

(2) Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income.

(3) Includes $12,458 in Mortgage restructuring expenses in the Mortgage segment related to the exit from the direct-to-consumer delivery channel.

(4) Banking segment includes noncontrolling interest.

Year Ended December 31, 2021	Banking(3)		Mortgage		Consolidated
Net interest income	$	347,342	$	28	$	347,370
Provisions for credit losses(1)	(40,993)		—		(40,993)
Mortgage banking income(2)	—		179,682		179,682
Change in fair value of mortgage servicing rights, net of hedging(2)	—		(12,117)		(12,117)
Other noninterest income	61,073		(383)		60,690
Depreciation and amortization	7,054		1,362		8,416
Amortization of intangibles	5,473		—		5,473
Other noninterest expense	220,283		139,395		359,678
Income before income taxes	$	216,598	$	26,453	$	243,051
Income tax expense					52,750
Net income applicable to FB Financial Corporation and noncontrolling interest					190,301
Net income applicable to noncontrolling interest(3)					16
Net income applicable to FB Financial Corporation					$	190,285
Total assets	$	11,540,560	$	1,057,126	$	12,597,686
Goodwill	242,561		—		242,561

(1)Includes $(1,998) in provision for credit losses on unfunded commitments.

(2)Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income.

(3)Banking segment includes noncontrolling interest.

Year Ended December 31, 2020	Banking(1)(5)		Mortgage(1)		Consolidated
Net interest income	$	265,581	$	77	$	265,658
Provisions for credit losses(2)	107,967		—		107,967
Mortgage banking income(3)	—		289,702		289,702
Change in fair value of mortgage servicing rights, net of hedging(3)	—		(34,374)		(34,374)
Other noninterest income	46,527		—		46,527
Depreciation and amortization	6,425		1,111		7,536
Amortization of intangibles	5,323		—		5,323
Other noninterest expense(4)	212,890		151,336		364,226
(Loss) income before income taxes	$	(20,497)	$	102,958	$	82,461
Income tax expense					18,832
Net income applicable to FB Financial Corporation and noncontrolling interest					63,629
Net income applicable to noncontrolling interest(5)					8
Net income applicable to FB Financial Corporation					$	63,621
Total assets	$	10,254,324	$	953,006	$	11,207,330
Goodwill	242,561		—		242,561

(1)As previously reported on Form 10-K filed with the SEC on February 25, 2022, results have been revised from originally reported to reflect a $26,416 reclassification of mortgage retail footprint total net contribution from the Banking segment to the Mortgage segment.

(2)Includes $13,361 in provision for credit losses on unfunded commitments.

(3)Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income.

(4)Includes $33,824 of merger costs in the Banking segment related to the Farmers National acquisition and the Franklin merger and $1,055 of merger costs in the Mortgage segment related to the Franklin merger.

(5)Banking segment includes noncontrolling interest.

The Banking segment provides the Mortgage segment with a warehouse line of credit that is used to fund mortgage loans held for sale. The warehouse line of credit, which is eliminated in consolidation, is limited based on interest income earned by the Mortgage segment. The amount of interest paid by the Mortgage segment to the Banking segment under this warehouse line of credit is recorded as interest income to the Company's Banking segment and as interest expense to the Mortgage segment, both of which are included in the calculation of net interest income for each segment. The amount of interest paid by the Mortgage segment to the Banking segment under this warehouse line of credit was $18,906, $23,910, and $14,810 for the years ended December 31, 2022, 2021, and 2020, respectively.