Franklin Financial Network, Inc. (NYSE:FSB) Q2 2019 Earnings Conference Call - Final Transcript

Jul 25, 2019 • 09:00 am ET


Franklin Financial Network, Inc. (NYSE:FSB) Q2 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to the Franklin Financial Network, Inc. 2019 Second Quarter Earnings Conference Call. Hosting the call today from the Franklin Financial Network is Mr. Myers Jones, interim CEO of Franklin Financial Network Inc.

Please note, the Franklin Financial Network earnings release and this morning's presentation are available on the Investor Relations page of the bank's website at Today's call is being recorded and will be available for replay on Franklin Synergy Bank's website. Before we begin, Franklin Financial Network does not provide earnings guidance or forecasts. During this presentation, we may make comments that may constitute forward-looking statements.

All forward-looking statements are subject to risks and uncertainties and other facts that may cause the actual results, performance or achievements of Franklin Financial Network to differ materially from any results expressed or implied by such forward-looking statements, many of such factors beyond Franklin Financial Network's ability to control or predict, and listeners are cautioned not to -- are cautioned to put undue reliance on such forward-looking statements. A more detailed description of these and other risks is contained in the Franklin Financial Network's most recent annual report on Form 10-K. Franklin Financial Network disclaims any obligation to update or revise any forward-looking statements in this presentation, whether as a result of new information, future events or otherwise. In addition, these remarks may include certain non-GAAP financial measures as defined by SEC Regulation G.

With that, I am now going to turn the call over to Mr. Myers Jones, Franklin Financial Network's interim CEO. Sir, you may begin.

Myers Jones

Good morning, everyone, and thank you for joining this morning's call to review our second quarter 2019 results. We appreciate your continued interest in our company. I'm here this morning with Chris Black, our Chief Financial Officer. I'd like to give a brief overview of the quarter and then Chris will review the detailed financial results.

I am proud to report that our entire team of employees from each area of our Company has continued to execute our business plan, and we are creating a stronger and more profitable franchise. We are seeing the results of our planned and previously discussed balance sheet rotation and optimization. Our bankers are focusing on profitable growth through core customer relationships. During the second quarter, loans grew organically at a rate of more than 10% annualized. Core deposit growth was more than 16% from the same time last year. Strong growth in the core franchise allowed us to rotate away from securities and wholesale funding. We achieved that growth while also remaining disciplined on expenses. The result is a net interest margin expansion by 4 basis points and continued growth in pre-tax pre-provision profit.

We also maintained strong capital ratios and grew tangible book value per share at nearly 13% from this time last year, while at the same time returning capital to our shareholders by paying a common stock dividend and by beginning a share repurchase program. On the credit side, we had a