0001193125-26-126081
SEC filingFB Bancorp reported mixed FY 2025 results with net income of $1.3 million, a significant decline from the prior year's $1.5 million from continuing operations, primarily due to a $2.7 million loss from discontinued operations related to the sale of NOLA Lending Group. Key positives included a 15.82% increase in net interest income to $48.0 million, driven by growth in average earning assets and a higher yield on investment securities, while total interest expense decreased 8.38% to $17.8 million. However, non-interest expenses rose 6.40% to $45.6 million, and the provision for credit losses increased 12.42% to $1.7 million. The company strengthened its balance sheet with total assets reaching $1.26 billion, though total equity decreased 3.62% to $314.4 million due to stock repurchases. Forward-looking significance includes management's focus on growing commercial lending, expanding digital banking through Andi, and expected annual savings of $1.1 million from workforce reductions related to discontinued operations.
FB Bancorp reported FY 2025 net income of $1.3 million, compared to $1.5 million from continuing operations in FY 2024, representing a decline when considering the discontinued operations impact. Net income from continuing operations was $3.9 million, a 161.43% increase from $1.5 million in FY 2024. The company recorded a $2.7 million net loss from discontinued operations related to the sale of NOLA Lending Group. Total assets increased 2.82% to $1.26 billion, while total equity decreased 3.62% to $314.4 million primarily due to $22.2 million in common stock repurchases. Key drivers included a $6.6 million increase in net interest income offset by higher non-interest expenses and credit loss provisions.
Interest income increased 8.10% to $65.9 million, driven by growth in average earning assets and a higher yield on investment securities (3.79% vs. 3.68% in FY 2024). The average balance of loans held for investment increased 6.81% to $763.6 million, though the average yield decreased slightly to 7.16% from 7.20%. Interest expense decreased 8.38% to $17.8 million, primarily due to a 63.15% reduction in average borrowed funds balances. Non-interest income decreased 11.07% to $4.1 million, mainly from lower service charges and mortgage servicing revenue. The company's loan portfolio showed strategic growth in commercial segments, with commercial real estate loans representing 33.4% and commercial loans representing 12.4% of total loans.
Net interest income increased 15.82% to $48.0 million, with the net interest rate spread improving to 3.78% from 3.76% in FY 2024. The net yield on interest-earning assets increased to 4.57% from 4.36%. However, profitability was pressured by a 12.42% increase in the provision for credit losses to $1.7 million, reflecting higher non-performing loans which totaled $16.9 million (2.27% of total loans) at year-end. The allowance for credit losses was $6.3 million, representing 0.85% of total loans and 37.3% of non-performing loans. Non-interest expenses rose 6.40% to $45.6 million, with salaries and employee benefits increasing 6.53% to $25.4 million due to severance costs, new branch staffing, and normal pay increases.
Net cash provided by operating activities was $2.8 million, with continuing operations generating $7.9 million and discontinued operations using $5.1 million. Investing activities used $64.7 million primarily for securities purchases ($112.3 million) and premises/equipment acquisitions ($6.7 million). Financing activities provided $23.4 million from net deposit increases ($40.7 million) and net proceeds from common stock issuance ($187.8 million), partially offset by stock repurchases ($22.2 million). The balance sheet shows total deposits of $841.4 million, with core deposits representing 57.4%. Total borrowings were $78.3 million, with additional borrowing capacity of $351.8 million from the Federal Home Loan Bank. Tier 1 leverage capital was $255.3 million (20.02% of adjusted assets), maintaining well-capitalized status.
Management's strategic priorities include growing and diversifying the loan portfolio through increased commercial real estate and commercial loan originations, continuing expansion in Baton Rouge and Lafayette markets, and investing in digital banking infrastructure including the Andi online-only bank. The company expects approximately $1.1 million in annual salary savings from workforce reductions related to discontinued operations. Risk factors include interest rate sensitivity, with modeling showing a 2.40% increase in net interest income with a 200 basis point rate increase but an 8.70% decrease with a 200 basis point rate decrease. The company also faces credit risk with non-performing loans increasing to $16.9 million and classified loans totaling $20.5 million at year-end.