FB Bancorp, Inc. /MD/

FB Bancorp, Inc. (FBLA) operates as a Maryland corporation that became the registered bank holding company for Fidelity Bank following its mutual-to-stock conversion on October 22, 2024. The Company conducts its operations primarily through Fidelity Bank, headquartered in New Orleans, Louisiana ¹. Fidelity Bank, originally chartered in 1908, operates 18 full-service branches, including its main office, two drive-up branches, and 14 stand-alone ATMs across central and southern Louisiana ². The Bank's business model focuses on taking deposits from the general public and investing these funds, along with operational capital, into various loan types ³.

The Company faces strong competition in its primary market areas from large money centers and regional banks, community banks, savings institutions, credit unions, mortgage banking firms, consumer finance companies, and fintech companies ⁴. Named competitors with a significant presence include Capital One, N.A., Hancock Whitney Bank, and JP Morgan Chase Bank, N.A. ⁵. The Company's competitive strategy emphasizes its knowledge of local consumer and small business markets, expanding relationships with current customers, and developing new profitable business relationships ⁶.

Fidelity Bank generates revenue primarily through net interest income, which is the difference between interest earned on interest-earning assets and interest paid on interest-bearing liabilities ⁷. Non-interest income is derived from service charges on deposit accounts, gains on the resale of mortgage loans and mortgage servicing rights, and other service charges and fees ⁸. The core business involves originating loans for retention in its portfolio, with the exception of loans originated by its NOLA division, which were generally sold into the secondary market ⁹. The Company's primary customer segments are individuals and businesses in southern Louisiana, including the Metropolitan Statistical Areas (MSAs) of New Orleans-Metairie-Hammond, Baton Rouge, and Lafayette ¹⁰.

The loan portfolio is diversified across several categories. At December 31, 2025, one- to four-family residential loans constituted 31.0% of total loans held for investment, amounting to $230.743 million ¹¹. Residential construction loans represented 5.1% of the portfolio, totaling $38.058 million ¹². Commercial real estate loans were the largest segment, accounting for 33.4% of total loans at $248.744 million ¹³. Commercial loans, including commercial and industrial, small business, and other non-real estate secured loans, made up 12.4% of the portfolio, or $92.199 million ¹⁴. Home equity loans and lines of credit were 15.1% of the portfolio, totaling $112.404 million ¹⁵, while other consumer loans comprised 3.1%, or $22.787 million ¹⁶. The Company has increased its focus on originating higher-yielding commercial real estate loans ¹⁷.

For the year ended December 31, 2025, total assets were $1.255 billion ¹⁸, an increase of $34.5 million ¹⁹ or 2.82% ²⁰ from $1.221 billion ²¹ at December 31, 2024. Total interest and dividend income was $65.806 million ²², while total interest expense was $17.804 million ²³, resulting in net interest income of $48.002 million ²⁴. The provision for credit losses was $1.720 million ²⁵. Non-interest income totaled $4.136 million ²⁶, and non-interest expenses were $45.603 million ²⁷. Income from continuing operations before income taxes was $4.815 million ²⁸, with an income tax expense of $870 thousand ²⁹, leading to net income from continuing operations of $3.945 million ³⁰. The net loss from discontinued operations was $2.692 million ³¹, resulting in a total net income of $1.253 million ³². Basic and diluted earnings per common share from continuing operations were $0.22 ³³, while total earnings per share were $0.07 ³⁴. The allowance for credit losses stood at $6.289 million ³⁵, representing 0.85% of total loans ³⁶. Cash and cash equivalents were $60.269 million ³⁷, and total deposits were $841.403 million ³⁸. Other borrowings, primarily from the Federal Home Loan Bank of Dallas, totaled $78.257 million ³⁹. Total stockholders' equity was $314.450 million ⁴⁰.

Comparing 2025 to 2024, net income from continuing operations increased by $2.4 million ⁴¹, or 161.43% ⁴², from $1.509 million ⁴³ in 2024. Net interest income increased by $6.558 million ⁴⁴, or 15.82% ⁴⁵, from $41.444 million ⁴⁶ in 2024. Total non-interest expenses increased by $2.742 million ⁴⁷, or 6.40% ⁴⁸. The average balance of loans held for investment increased by $48.710 million ⁴⁹, or 6.81% ⁵⁰, while the average yield on loans decreased from 7.20% ⁵¹ to 7.16% ⁵². The average balance of investment securities increased by $26.987 million ⁵³, or 10.93% ⁵⁴, with the average yield increasing from 3.68% ⁵⁵ to 3.79% ⁵⁶. Total interest expense decreased by $1.629 million ⁵⁷, or 8.38% ⁵⁸, primarily due to a $113.459 million ⁵⁹ decrease in the average balance of borrowed funds ⁶⁰. Deposits increased by $40.661 million ⁶¹, or 5.08% ⁶². The allowance for credit losses to total loans outstanding increased from 0.82% ⁶³ to 0.85% ⁶⁴. Non-accrual loans increased from $12.989 million ⁶⁵ to $16.854 million ⁶⁶.

A significant operational development was the agreement on December 31, 2025, to sell substantially all assets and liabilities of the mortgage banking segment, NOLA Lending Group, with the sale closing on March 1, 2026 ⁶⁷. This segment had a net loss of approximately $2.7 million ⁶⁸ in 2025 and resulted in the transfer of approximately 108 employees ⁶⁹ to the acquirer. The Company also opened a new Lafayette branch in August 2025, which contributed approximately $27.0 million ⁷⁰ to total deposits ⁷¹. The Company repurchased 1,983,750 shares of its common stock ⁷² at an average price of $12.725 per share ⁷³ as part of an initial stock repurchase program completed on January 14, 2026 ⁷⁴.

Management's business strategy is centered on building long-term stockholder value through operating a profitable, community-oriented financial institution ⁷⁵. A key strategic priority is to continue prudently growing and diversifying the loan portfolio by increasing originations of commercial real estate and commercial loans to enhance overall loan portfolio yield ⁷⁶. At December 31, 2025, commercial real estate loans were $248.7 million ⁷⁷ (33.4% of total loans) ⁷⁸ and commercial loans were $92.2 million ⁷⁹ (12.4% of total loans) ⁸⁰. The Company also aims to decrease product delivery costs and increase operating efficiency ⁸¹. The sale of NOLA Lending Group, which incurred a net loss of approximately $2.7 million ⁸² in 2025, is expected to contribute to this goal by allowing the Company to focus on its core banking segment and reduce 108 employees ⁸³. Efficiency improvements are also sought through asset growth, more efficient use of third-party vendors, staffing adjustments, and disciplined capital expenditures ⁸⁴.

Maintaining strong asset quality through conservative loan underwriting and credit monitoring processes is another strategic focus ⁸⁵. At December 31, 2025, non-performing loans were 2.27% of total loans ⁸⁶. The Company plans to continue attracting and retaining customers in its current market areas, specifically growing its low-cost "core" deposit base, while expanding offices and banking activity in the Baton Rouge and Lafayette, Louisiana markets ⁸⁷. Core deposits, defined as NOW, savings, money market, and other savings accounts, totaled $482.9 million ⁸⁸, or 57.4% of total deposits ⁸⁹, at December 31, 2025. Efforts in Baton Rouge and Lafayette include hiring Market Area Presidents and lending teams ⁹⁰.

Further strategic initiatives include implementing and investing in both the online banking infrastructure and the fully digital bank, "Andi," a division of Fidelity Bank, to meet current customer needs and expand the customer base in existing and new markets ⁹¹. The Company also intends to remain a community-oriented institution, leveraging high-quality service to maintain and build a loyal local customer base ⁹². Growth is planned organically, with the capital raised from the stock offering enabling increased lending and investment capacity ⁹³. Opportunistic acquisitions or branching in current or contiguous markets that enhance franchise value and stockholder returns may also be considered, though there are no current plans or intentions for such expansion activities ⁹⁴.

The Company monitors interest rate risk using simulation models, estimating changes in Economic Value of Equity (EVE) and Net Interest Income (NII) under various interest rate scenarios ⁹⁵. At December 31, 2025, the Company estimated a 11.74% decrease in EVE ⁹⁶ with an instantaneous 200 basis point increase in interest rates, and a 10.02% increase in EVE ⁹⁷ with an instantaneous 200 basis point decrease ⁹⁸. For NII, an instantaneous 200 basis point increase in market interest rates was estimated to result in a 2.40% increase ⁹⁹, while a 200 basis point decrease was estimated to result in an 8.70% decrease ¹⁰⁰. These estimated changes are within the Board of Directors' guidelines ¹⁰¹.

The Company is committed to maintaining a strong liquidity position, monitoring it daily ¹⁰². Primary funding sources include deposits, loan and securities payments, investment maturities, loan prepayments, retained earnings, and income on earning assets ¹⁰³. The Company can also borrow from the Federal Home Loan Bank of Dallas, with $78.3 million ¹⁰⁴ outstanding at December 31, 2025, and access to an additional $351.8 million ¹⁰⁵ in advances ¹⁰⁶. An additional $138.4 million ¹⁰⁷ is available from the Federal Reserve Board discount window ¹⁰⁸. The Company anticipates sufficient funds to meet current commitments and expects a significant portion of maturing time deposits, totaling $217.7 million ¹⁰⁹ within one year from December 31, 2025, to be renewed ¹¹⁰. If not renewed, Federal Home Loan Bank of Dallas advances or increased deposit interest rates may be used, potentially leading to higher interest expense ¹¹¹.

The Company faces material risks, including credit risks associated with its commercial real estate and commercial loan portfolios, which comprised 33.4% ($248.7 million) ¹¹² and 12.4% ($92.2 million) ¹¹³ of the total loan portfolio, respectively, at December 31, 2025. These loans have larger balances and depend on the successful operation of properties or businesses, making them vulnerable to downturns in the local real estate market or economy, which could increase non-performing loans ¹¹⁴. The unseasoned nature of recently originated commercial real estate and commercial loans, which increased by $48.7 million ¹¹⁵ or 6.8% ¹¹⁶ in average balance during 2025, presents a risk of higher delinquency or charge-off levels than historical experience ¹¹⁷. The allowance for credit losses, at $6.289 million ¹¹⁸ or 0.85% of total loans ¹¹⁹ at December 31, 2025, may be insufficient to cover actual losses, potentially requiring additions that would decrease net income ¹²⁰. The geographic concentration of the loan portfolio in Southern Louisiana, with approximately $486.1 million ¹²¹ or 65.3% ¹²² of loans held for investment originated in the New Orleans and North Shore metropolitan area, makes the Company vulnerable to local economic downturns, including increased commercial office vacancies and reduced retail demand due to hybrid and remote work trends ¹²³. Environmental liability risk exists for properties securing loans or owned by the Company, potentially leading to substantial remediation costs ¹²⁴. Inflationary pressures and rising interest rates could reduce margins and yields, increase defaults, and raise operating costs ¹²⁵. Hedging activities may not fully protect against interest rate exposure or could result in losses if the hedged event does not occur ¹²⁶. The securities portfolio is subject to unrealized losses from changes in credit spreads and liquidity issues, potentially requiring impairment charges to earnings ¹²⁷. Future changes in interest rates could reduce profits and asset values, particularly given the shorter contractual maturities of interest-bearing liabilities compared to interest-earning assets ¹²⁸. Operational risks, including technology failures, cybersecurity breaches, and reliance on third-party service providers, could lead to financial loss, customer loss, reputational damage, and regulatory action ¹²⁹. The increasing prevalence of fraud and financial crimes poses a risk of loss ¹³⁰. Societal responses to climate change could adversely affect demand for products, customer creditworthiness, and asset values ¹³¹. The Company's dependence on its management team means loss of key personnel could harm business strategy implementation and competitive ability ¹³². Insufficient funding sources to replace deposits at maturity or support future growth could constrain financial flexibility and adversely affect profitability ¹³³. Changes in laws, regulations, and accounting standards, including the CECL methodology, could increase compliance costs and impact financial reporting ¹³⁴. As an emerging growth company, the Company's election to comply with reduced reporting requirements could make its common stock less attractive to investors ¹³⁵.

Management's message to shareholders emphasizes a commitment to building long-term value by operating a profitable, community-oriented financial institution focused on personalized and efficient customer service ¹³⁶. Key strategic priorities include prudently growing and diversifying the loan portfolio by increasing originations of commercial real estate and commercial loans to enhance overall loan portfolio yield ¹³⁷. Management also prioritizes decreasing product delivery costs and increasing operating efficiency, notably through the sale of the NOLA Lending Group, which had a net loss of approximately $2.7 million ¹³⁸ in 2025 and resulted in a reduction of approximately 108 employees ¹³⁹. Maintaining strong asset quality through conservative loan underwriting and credit monitoring processes is another core focus, with non-performing loans at 2.27% of total loans ¹⁴⁰ at December 31, 2025. Furthermore, management aims to attract and retain customers and grow the low-cost "core" deposit base, while expanding banking activities in the Baton Rouge and Lafayette, Louisiana markets ¹⁴¹. This includes investing in online banking infrastructure and the fully digital bank, "Andi," to meet customer needs and expand the customer base ¹⁴². The Company intends to grow organically, leveraging the capital raised from the stock offering to increase lending and investment capacity, and may also consider opportunistic acquisitions or branching, though no current plans exist ¹⁴³.