Last Update 07 Dec 25
FBK: Share Repurchases Will Drive Upside Through 2027
Narrative Update on FB Financial
Analysts have maintained their price target on FB Financial at approximately 65.17 dollars. This reflects largely unchanged assumptions for revenue growth, profitability, and valuation multiples, despite minor model refinements.
What's in the News
- FB Financial has filed a follow-on equity offering of approximately 111.3 million dollars, consisting of 2,162,052 common shares at 51.5 dollars per share in a registered direct transaction (company filing).
- The Board of Directors has authorized a new share repurchase program of up to 150 million dollars in common stock, expiring upon full utilization or by January 31, 2027, whichever comes first (company announcement).
- Under the previously announced March 21, 2024 buyback program, the company has now repurchased a total of 1,866,913 shares, representing about 4.02 percent of shares outstanding, for roughly 80.7 million dollars (company disclosure).
- Between September 15 and September 30, 2025, no shares were repurchased under the buyback plan, leaving total repurchases unchanged over that period (company disclosure).
- FB Financial has been added to the S&P Banks Select Industry Index, increasing its visibility among institutional investors and sector-focused funds (index provider announcement).
Valuation Changes
- Fair Value Estimate remained unchanged at approximately 65.17 dollars per share, indicating no revision to the core valuation outcome.
- Discount Rate edged down slightly from about 6.96 percent to 6.96 percent, reflecting an immaterial adjustment to the cost of capital assumption.
- Revenue Growth decreased marginally from roughly 26.45 percent to 26.45 percent, signaling a very small tempering of long term growth expectations.
- Net Profit Margin increased slightly from about 40.34 percent to 40.35 percent, suggesting a modest improvement in projected profitability.
- Future P/E Multiple remained effectively unchanged at around 13.73 times, implying no meaningful shift in the valuation multiple applied to forward earnings.
Key Takeaways
- The planned merger with Southern States Bank could boost revenue and margins through market expansion and stabilization.
- Strategic growth in commercial loans and hiring aims to enhance revenue, leverage, and potential EPS through efficient capital use.
- Integration risks, economic uncertainty, and competition pressure margins, potentially impacting profitability and operational efficiency.
Catalysts
About FB Financial- Operates as a bank holding company for FirstBank that provides a suite of commercial and consumer banking services.
- The planned combination with Southern States Bank is expected to enhance scale and market opportunities, potentially benefiting revenue growth through expanded market presence and improved margin stabilization.
- FB Financial's ability to adjust cost structures, such as repricing certificates of deposit at lower rates, indicates management's focus on improving net margins by reducing the cost of funds.
- Organic growth, particularly in focus areas like Commercial & Industrial (C&I) and owner-occupied Commercial Real Estate (CRE), demonstrates a strategic push to build loan portfolios, which should positively impact revenue as loan balances increase.
- The continued hiring of revenue producers aims to drive loan and deposit growth, which is critical for sustaining revenue growth and improving operating leverage over time.
- Strong capital levels and the potential for strategic deployment, including share repurchases and further acquisitions, position the company to enhance earnings per share through opportunistic capital allocation in the future.
FB Financial Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming FB Financial's revenue will grow by 42.2% annually over the next 3 years.
- Analysts assume that profit margins will increase from 22.0% today to 44.5% in 3 years time.
- Analysts expect earnings to reach $526.0 million (and earnings per share of $8.92) by about September 2028, up from $90.4 million today. The analysts are largely in agreement about this estimate.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 8.8x on those 2028 earnings, down from 31.5x today. This future PE is lower than the current PE for the US Banks industry at 11.9x.
- Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.
FB Financial Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- The planned combination with Southern States Bank presents integration risks, which could impact earnings and operational efficiency if not executed smoothly.
- The economic uncertainty and potential policy changes from Washington create a volatile environment, which could negatively affect revenue and net interest margins.
- The company's credit exposure, particularly in the Commercial and Industrial (C&I) portfolio, poses risks as charge-offs have been elevated, potentially impacting net income.
- Rising competition for deposits and the need for cost of funds management could pressure the net interest margin, affecting overall profitability.
- The economic dependency of the mortgage banking division suggests that adverse changes in mortgage interest rates could impact noninterest income and overall earnings.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $58.6 for FB Financial based on their expectations of its future earnings growth, profit margins and other risk factors.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.2 billion, earnings will come to $526.0 million, and it would be trading on a PE ratio of 8.8x, assuming you use a discount rate of 6.8%.
- Given the current share price of $52.89, the analyst price target of $58.6 is 9.7% higher.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
How well do narratives help inform your perspective?
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.