Davis Asset Management Loads Up FB Financial Shares

On Nov/ 14, Davis Asset Management, L.P. disclosed a new position in FB Financial Corporation (NYSE:FBK), reporting 619,236 shares valued at approximately $34.5 million as of Sept. 30. The holding represented 1.2% of the firm's assets under management (AUM)

What happened

Davis Asset Management, L.P. established a new position in FB Financial Corporation (NYSE:FBK) during the third quarter, according to a filing with the Securities and Exchange Commission (SEC) dated Nov. 14. The fund reported holding 619,236 shares, with a market value of $34.5 million as of Sept. 30. This addition accounted for approximately 1.2% of the firm’s approximately $2.8 billion in reportable U.S. equity assets across 31 total positions.

What else to know

• This was a new position for the fund,
• Top holdings post-filing:
  • NASDAQ: META: $367.2 million (13.1% of AUM)
  • NASDAQ: GOOGL: $243.6 million (8.7% of AUM)
  • NYSE: WAL: $216.8 million (7.7% of AUM)
  • NYSE: STT: $139.2 million (5.0% of AUM)
  • NYSE: CB: $127.0 million (4.5% of AUM)
• As of Nov. 13, shares of FB Financial were priced at $54.60, returning -1.9% (including dividends) over the prior year, underperforming the S&P 500's 14% total return.
• FB Financial reported trailing twelve-month revenue of $815.5 million and net income of $103.6 million.

Company Overview

Company Snapshot

FB Financial Corporation is a regional bank holding company headquartered in Nashville, Tennessee, operating primarily through its FirstBank subsidiary. The company leverages a diversified product suite and a robust branch network to serve both commercial and consumer clients across the southeastern United States. Its competitive edge lies in its strong regional presence, comprehensive financial offerings, and a balanced mix of traditional banking and mortgage services.

• Offers commercial and consumer banking services, including deposit accounts, lending products, mortgage origination, and related financial services.
• Generates revenue primarily through net interest income on loans and deposits, as well as fees from mortgage banking and ancillary financial services.
• Serves businesses, professionals, and individual consumers across Tennessee, North Alabama, Southern Kentucky, and North Georgia, with a focus on regional markets.

Foolish take

Davis Asset Management clearly expects FB Financial's fortunes to turn. It appears it has made a value investment. It made a sizeable third-quarter purchase, making the investment over 1% of its equity assets.

Over the last year through Dec. 17, the stock returned 4.7%, trailing the S&P 500's 4.7%. However, FB Financial's stock price has gained momentum since April.

Typically, banks benefit from lower short-term interest rates. That's because they earn more money on the spread between short-term deposits and longer-term loans. While the Federal Reserve has enacted rate cuts, the future direction remains uncertain.

Meanwhile, FB Financial has been expanding, including acquiring Southern States Bancshares earlier this year.

Glossary

Assets Under Management (AUM): The total market value of investments managed by a fund or investment firm.
Position: The amount of a particular security or investment held by an investor or fund.
13F: A quarterly report filed by institutional investment managers disclosing their U.S. equity holdings.
Trailing Twelve Months (TTM): The 12-month period ending with the most recent quarterly report.
Forward Price-to-Earnings Ratio: A valuation metric comparing a company's current share price to its expected future earnings per share.
Dividend Yield: A financial ratio showing how much a company pays in dividends relative to its share price.
Market Value: The total value of a holding, calculated as shares owned multiplied by the current share price.
Stake: The ownership interest or amount of shares held in a company by an investor or fund.
Fund Holdings: The individual securities or investments owned by a fund at a given time.
Regional Bank Holding Company: A company that owns and controls one or more banks operating in a specific geographic region.
Net Interest Income: The difference between interest earned on loans and interest paid on deposits by a bank.
Mortgage Origination: The process of creating and issuing new mortgage loans to borrowers.

Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Meta Platforms. The Motley Fool recommends Western Alliance Bancorporation. The Motley Fool has a disclosure policy.