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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2025


☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File No. 001-42380

FB Bancorp, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Maryland		99-1859402
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

353 Carondelet Street, New Orleans, Louisiana		70130
(Address of Principal Executive Offices)		(Zip Code)

(504) 569-8640

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading symbol(s)	Name of Each Exchange on Which Registered
Common	FBLA	Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:



Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

19,837,500 shares of the registrant’s common stock, par value $0.01 per share, were issued and outstanding as of August 13, 2025.

FB Bancorp, Inc.

Form 10-Q

Index


		Page
	Part I. - Financial Information

Item 1.	Financial Statements (unaudited)	3

	Consolidated Statements of Financial Condition	3

	Consolidated Statements of Operations	4

	Consolidated Statements of Comprehensive Income (Loss)	5

	Consolidated Statements of Changes in Stockholders’ Equity	6

	Consolidated Statements of Cash Flows	7

	Notes to the Unaudited Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	49

Item 4.	Controls and Procedures	49

	Part II. - Other Information

Item 1.	Legal Proceedings	50

Item 1A.	Risk Factors	50

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	50

Item 3.	Defaults Upon Senior Securities	50

Item 4.	Mine Safety Disclosures	50

Item 5.	Other Information	50

Item 6.	Exhibits	51

	Signature Page	52

EXPLANATORY NOTE

FB Bancorp, Inc. (the “Company,” “we”, “our” or “us”) was incorporated on February 29, 2024, to serve as the bank holding company for Fidelity Bank (“Fidelity” or the “Bank”) upon the consummation of the Bank’s conversion from the mutual form of organization to the stock form of organization, which occurred on October 22, 2024. The Company sold 19,837,500 shares of common stock (par value $0.01 per share) at $10.00 per share, for gross offering proceeds of $198.4 million. The cost of conversion and issuance of common stock was approximately $4.7 million, which was deducted from the gross offering proceeds. The Bank’s employee stock ownership plan (“ESOP”) purchased 1,587,000, or 8% of total shares issued, at a cost of $17.9 million. The Company contributed $88.4 million of the net offering proceeds to the Bank as additional capital.

Item 1. Financial Statements

FB Bancorp, Inc.

Consolidated Statements of Financial Condition (Unaudited)

(Dollars in thousands, except share data)


	June 30, 2025			December 31, 2024
ASSETS
Cash and due from banks	$	8,236		$	6,841
Interest-bearing deposits at other financial institutions		77,851			92,004
Total cash and cash equivalents		86,087			98,845

Securities available for sale, at fair value (amortized cost of $275,768 and $264,639, respectively)		260,173			244,119
Derivative assets		393			439
Loans held for sale, at fair value		24,693			26,026
Loans held for investment		776,692			756,897
Less: allowance for credit losses		(6,159	)		(6,244	)
Loans held for investment, net		770,533			750,653
Federal Home Loan Bank stock, at cost		3,276			4,354
Bank owned life insurance		15,160			14,986
Accrued interest receivable		5,598			5,729
Premises and equipment, net		56,966			54,145
Other real estate owned		1,615			610
Mortgage servicing rights		947			1,078
Prepaid expenses		2,501			2,151
Other assets		18,696			17,798

Total assets	$	1,246,638		$	1,220,933

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing	$	135,852		$	132,258
Interest bearing		688,956			668,484
Total deposits		824,808			800,742

Advances by borrowers for taxes and insurance		6,341			6,537
Other borrowings		66,500			73,500
Accrued interest payable		323			380
Other liabilities		16,580			13,519
Total liabilities		914,552			894,678

Stockholders' Equity:
Preferred stock, $0.01 par value - 5,000,000 shares authorized; none issued		—			—
Common stock, $0.01 par value - 120,000,000 shares authorized; 19,837,500 issued and outstanding at June 30, 2025 and December 31, 2024		198			198
Additional paid-in capital		193,569			193,571
Unearned ESOP shares - 1,491,780 and 1,523,520 shares as of June 30, 2025 and December 31, 2024, respectively		(16,857	)		(17,215	)
Retained earnings		167,496			165,912
Accumulated other comprehensive income (loss)		(12,320	)		(16,211	)
Total stockholders' equity		332,086			326,255

Total liabilities and stockholders' equity	$	1,246,638		$	1,220,933

The accompanying notes are an integral part of these unaudited consolidated financial statements.

FB Bancorp, Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except share data)


	For the three months ended June 30,						For the six months ended June 30,
	2025			2024			2025			2024
Interest and dividend income
Interest and fees on loans	$	14,341		$	13,202		$	27,965		$	25,543
Interest and dividends on investment securities		2,391			2,348			4,688			4,648
Interest on deposits in other banks		807			336			1,804			941
Total interest and dividend income		17,539			15,886			34,457			31,132

Interest expense
Deposits		3,733			2,785			7,126			5,280
Borrowed funds		616			2,163			1,340			4,034
Total interest expense		4,349			4,948			8,466			9,314

Net interest income		13,190			10,938			25,991			21,818
Provision (benefit) for credit losses		453			275			838			520
Net interest income after provision (benefit) for credit losses		12,737			10,663			25,153			21,298

Non-interest income
Service charges and fee income from deposit accounts		613			788			1,267			1,521
Gain on sales of mortgage loans		3,953			3,459			7,293			6,766
Gain (loss) on sales, disposal, or impairment of assets		(88	)		—			(88	)		—
Gain (loss) on sales of available for sale securities		108			219			163			308
Gain on sales of mortgage servicing rights		—			2,251			—			2,251
Other non-interest income		335			544			688			1,128
Total non-interest income		4,921			7,261			9,323			11,974

Non-interest expenses
Salaries and employee benefits		9,938			10,387			19,495			20,470
Occupancy and equipment		2,102			2,049			4,104			4,078
Directors’ fees		183			143			364			304
Data processing		1,330			1,329			2,640			2,699
Advertising and marketing		345			691			555			1,228
Mortgage servicing rights amortization		103			145			194			304
Hedging activity, net		241			(38	)		671			(131	)
Goodwill impairment		—			—			—			—
Other general and administrative		2,318			2,126			4,477			4,265
Total non-interest expenses		16,560			16,832			32,500			33,217

Income (loss) before income taxes		1,098			1,092			1,976			55
Income tax expense (benefit)		219			243			392			13

Net income (loss)	$	879		$	849		$	1,584		$	42

Earnings (losses) per share - basic and diluted	$	0.05			—		$	0.09			—
Weighted average shares outstanding		18,329,850			—			18,321,959			—

The accompanying notes are an integral part of these unaudited consolidated financial statements.

FB Bancorp, Inc.

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)


	For the three months ended June 30,						For the six months ended June 30,
	2025			2024			2025			2024
	(Dollars in thousands)						(Dollars in thousands)
Net income (loss)	$	879		$	849		$	1,584		$	42
Other comprehensive income (loss):
Unrealized holding gains (losses) on securities available for sale		(368	)		2,110			5,088			(1,049	)
Reclassification adjustment for (gains) losses realized on securities available for sale		(108	)		(219	)		(163	)		(308	)
Net unrealized gains (losses)		(476	)		1,891			4,925			(1,357	)
Tax effect		100			(397	)		(1,034	)		285
Total other comprehensive income (loss)		(376	)		1,494			3,891			(1,072	)

Total comprehensive income (loss)	$	503		$	2,343		$	5,475		$	(1,030	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

FB Bancorp, Inc.

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

For the Six Months Ended June 30, 2025 and 2024

(Dollars in thousands, except share data)


											Accumulated			Unallocated
	Common				Additional						Other			Common			Total
	Shares		Common		Paid-In			Retained			Comprehensive			Stock Held By			Stockholders'
	Issued		Stock		Capital			Earnings			Income (Loss)			ESOP			Equity

Balance at December 31, 2023		-	$	-	$	—		$	172,126		$	(15,389	)	$	—		$	156,737

Comprehensive income (loss):
Net income (loss)						-			(807	)		-			-			(807	)
Other comprehensive income (loss), net of tax						-			-			(2,566	)		-			(2,566	)
Total comprehensive income (loss)																		(3,373	)

Balance at March 31, 2024		-	$	-	$	-		$	171,319		$	(17,955	)	$	-		$	153,364
Comprehensive income (loss):
Net income (loss)						-			849			-			-			849
Other comprehensive income (loss), net of tax						-			-			1,494			-			1,494
Total comprehensive income (loss)																		2,343

Balance at June 30, 2024		-	$	-	$	-		$	172,168		$	(16,461	)	$	-		$	155,707

Balance at December 31, 2024		19,837,500	$	198	$	193,571		$	165,912		$	(16,211	)	$	(17,215	)	$	326,255

Comprehensive income (loss):
Net income (loss)						-			705			-			-			705
Other comprehensive income (loss), net of tax						-			-			4,267			-			4,267
Total comprehensive income (loss)																		4,972

ESOP shares committed to be released (15,870 shares)						3									179			182

Balance at March 31, 2025		19,837,500	$	198	$	193,574		$	166,617		$	(11,944	)	$	(17,036	)	$	331,409
Comprehensive income (loss):
Net income (loss)						-			879			-			-			879
Other comprehensive income (loss), net of tax						-			-			(376	)		-			(376	)
Total comprehensive income (loss)																		503

ESOP shares committed to be released (15,870 shares)						(5	)								179			174

Balance at June 30, 2025		19,837,500	$	198	$	193,569		$	167,496		$	(12,320	)	$	(16,857	)	$	332,086

The accompanying notes are an integral part of these unaudited consolidated financial statements.

FB Bancorp, Inc.

Consolidated Statements of Cash Flows (Unaudited)


	For the six months ended June 30,
	2025			2024
	(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	1,584		$	42
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		1,284			1,282
Amortization of mortgage servicing rights		194			304
Net (accretion) amortization on securities		(692	)		(376	)
Provision (benefit) for credit losses		838			520
ESOP expense		356			—
Increase in cash surrender value of life insurance		(174	)		(170	)
Net gain on sales of mortgage servicing rights		—			(2,251	)
(Gain) loss on sales and disposal of assets		88			—
Federal Home Loan Bank stock dividends		(113	)		(120	)
Net gain on sales of available for sale securities		(163	)		(308	)
Deferred income taxes (benefit)		282			130
Net (increase) decrease in derivative instruments		46			(357	)
Changes in other operating assets and liabilities		508			(1,444	)
Loans held for sale:
Originations		(179,598	)		(190,186	)
Proceeds from sale		188,529			184,797
Gain on sale of loans, net		(7,293	)		(6,766	)
Net change in fair value		(305	)		(160	)

Net cash provided by (used in) operating activities		5,371			(15,063	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities available for sale		(34,773	)		(12,387	)
Proceeds from maturities, prepayments, and sales of securities available for sale		24,499			12,416
Proceeds from sale of mortgage servicing rights		—			4,194
Redemption of FHLB stock		1,191			—
(Increase) decrease in loans held for investment, net		(21,742	)		(60,161	)
Purchases of premises and equipment		(4,772	)		(2,069	)
Proceeds from sale of Company owned assets or other real estate owned		598			37

Net cash provided by (used in) investing activities		(34,999	)		(57,970	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits		24,066			1,335
Proceeds from other borrowings		30,000			114,500
Payments on other borrowings		(37,000	)		(68,200	)
Net change in advances by borrowers for taxes and insurance		(196	)		(2,295	)

Net cash provided by (used in) financing activities		16,870			45,340

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(12,758	)		(27,693	)
Cash and cash equivalents at beginning of period		98,845			87,108
Cash and cash equivalents at end of period	$	86,087		$	59,415

Supplemental Disclosures For Cash Flow Information:
Cash paid for interest on deposits and borrowings	$	8,523		$	6,511
Cash paid for income taxes	$	—		$	1,244
Loans transferred to other real estate owned	$	1,024		$	2,028

The accompanying notes are an integral part of these unaudited consolidated financial statements.

FB BANCORP, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(dollar amounts in thousands unless otherwise noted)

Summary of Significant Accounting Policies

Description of Business

Basis of Presentation

The accompanying unaudited financial statements of FB Bancorp, Inc. (the “Company”) were prepared in accordance with GAAP for interim financial information, general practices within the financial services industry, and instructions for Regulation S-X. Accordingly, these interim financial statements do not include all of the information or footnotes required by GAAP for annual financial statements. However, in the opinion of management, all adjustments necessary for a fair presentation of the financial statements have been included. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for the entire fiscal year. These statements should be read in conjunction with the Company's audited financial statements and notes thereto for the year ended December 31, 2024, included in the Company's Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 27, 2025.

Critical Accounting Policies and Estimates

In preparing the financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the Company's financial condition, results of operations, comprehensive income, changes in equity, and cash flows for the interim period presented. These adjustments are of a normal recurring nature and include appropriate estimated provisions.

Recent Accounting Standards Adopted

ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The guidance issued in this update requires improvement to the disclosures about a public entity’s reportable segments and more detailed information about a reportable segment’s expenses and other segment items. Under this guidance, public entities are required to disclose segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment that are currently required annually. The goal of these disclosures is to enable investors to develop more decision-useful financial analyses. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendments in this update should be applied retrospectively to all previous periods presented. Other than providing additional disclosures, the adoption of this standard did not have an impact on the Company’s consolidated financial statements.

FB BANCORP, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(dollar amounts in thousands unless otherwise noted)

In November 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires entities to disclose disaggregated information about their effective tax rate reconciliations as well as expanded information on income taxes by jurisdiction. The standard is effective for fiscal years beginning after December 15, 2024 on a prospective basis. The Company discloses its income tax rate reconciliation in its annual consolidated financial statements only and does not expect the adoption to have a material impact on its consolidated financial statements.

Recent Accounting Pronouncements:

ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). The guidance issued in this update was designed to improve financial reporting by requiring entities to disclose additional information about specific expense categories in the notes to financial statements. This standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this update should be applied either prospectively to financial statements issued for reporting periods after the effective date of this update or retrospectively to any or all prior periods presented in the financial statements. The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. Any changes in presentation did not have a material impact on the Company’s financial condition or results of operations.

FB BANCORP, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(dollar amounts in thousands unless otherwise noted)

Earnings (Loss) Per Share

Earnings (Loss) per share is calculated by dividing consolidated net income or loss (numerator) by the weighted-average common shares (denominator).

The following table sets forth the composition of the weighted-average common shares (denominator) used in the basic and diluted earnings per share computation for the three months and six months ended June 30, 2025. The Company became the bank holding company of the Bank on October 22, 2024; therefore, there were no outstanding shares for the same periods ended June 30, 2024.


Denominator:	Three months ended			Six months ended
	June 30, 2025			June 30, 2025
Weighted-average common shares outstanding		19,837,500			19,837,500
Less: Average unearned ESOP shares		(1,507,650	)		(1,515,541	)
Weighted-average common shares and common stock equivalents used to calculate basic earnings per share		18,329,850			18,321,959

The Company had no dilutive or potentially dilutive securities during the periods presented.

FB BANCORP, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(dollar amounts in thousands unless otherwise noted)

Investment Securities

The tables below show the amortized cost and fair value, by type, of the Company’s available for sale debt securities as of June 30, 2025 and December 31, 2024:


	June 30, 2025
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Available for sale:
U.S. government sponsored agencies	$	137,699	$	113	$	8,446	$	129,366
Mortgage-backed securities		111,872		145		6,707		105,310
Corporate bonds		26,197		11		711		25,497
Small Business Administration		—		—		—		—
Total available for sale	$	275,768	$	269	$	15,864	$	260,173

	December 31, 2024
Available for sale:
U.S. government sponsored agencies	$	147,674	$	68	$	10,909	$	136,833
Mortgage-backed securities		85,708		19		8,444		77,283
Corporate bonds		31,237		—		1,254		29,983
Small Business Administration		20		—		—		20
Total available for sale	$	264,639	$	87	$	20,607	$	244,119

As of June 30, 2025 and December 31, 2024, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity.

The Company evaluates securities for impairment when there has been a decline in fair value below the amortized cost basis at least quarterly. Accordingly, management is able to effectively measure and monitor the unrealized loss position on these securities and because the Company does not intend to sell the securities and it is not more-likely-than-not that the Company will be required to sell the investments before recovery of their amortized cost basis, the Company determined no allowance for credit loss was required as of June 30, 2025 or December 31, 2024.

Accrued interest receivable on investment securities totaled $1.5 million and $1.5 million as of June 30, 2025 and December 31, 2024, respectively, and was reported in accrued interest receivable on the statements of financial condition.

FB BANCORP, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(dollar amounts in thousands unless otherwise noted)

A summary of securities with gross unrealized losses at June 30, 2025 and December 31, 2024 aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:


	June 30, 2025
	Less Than 12 Months				12 Months or More
			Gross				Gross		Total
	Fair		Unrealized		Fair		Unrealized		Unrealized
	Value		Losses		Value		Losses		Losses
Available for sale:
U.S. government sponsored agencies	$	2,985	$	58	$	116,416	$	8,387	$	8,445
Mortgage-backed securities		35,320		651		54,492		6,056		6,707
Corporate bonds		498		2		20,916		710		712
Total available for sale	$	38,803	$	711	$	191,824	$	15,153	$	15,864

	December 31, 2024
Available for sale:
U.S. government sponsored agencies	$	12,337	$	246	$	118,800	$	10,663	$	10,909
Mortgage-backed securities and small business administration		17,590		698		56,203		7,746		8,444
Corporate bonds		7,955		133		22,028		1,121		1,254
Total available for sale	$	37,882	$	1,077	$	197,031	$	19,530	$	20,607

The amortized cost and estimated fair value by maturity or next repricing date of investment securities at June 30, 2025 are shown in the following table. Fixed rate securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments or call options. Accordingly, actual maturities may differ from contractual maturities.


	Amortized		Fair
	Cost		Value
Within one year or less	$	10,012	$	9,873
One through five years		78,159		75,074
After five through ten years		68,568		65,488
Over ten years		119,029		109,738
Total	$	275,768	$	260,173

At June 30, 2025 and December 31, 2024, approximately $1.4 million and $144.2 million of investments were pledged to secure various deposits or borrowings, respectively. In April of 2025, the Federal Reserve released approximately $142.8 million of pledged securities that were held as part of the expired special Bank Term Funding Program.

Additional information related to fair value of investment securities is provided in Note 10.

FB BANCORP, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(dollar amounts in thousands unless otherwise noted)

Loans Held for Investment

The components of loans were as follows at June 30, 2025 and December 31, 2024:


	June 30, 2025			December 31, 2024
	(dollars in thousands)
Residential mortgage loans (1-4 family):
Fixed	$	95,692		$	98,694
Variable		149,370			155,948
Construction		40,130			34,139
Total residential mortgage loans		285,192			288,781
Commercial loans:
Real estate		254,347			241,063
Other		103,979			94,981
Total commercial loans		358,326			336,044
Consumer loans:
Home equity		110,532			106,550
Other consumer		23,649			26,690
Total consumer loans		134,181			133,240
Total loans held for investment		777,699			758,065
Less:
Undisbursed portion of mortgage loans		(144	)		(161	)
Net deferred loan costs (fees)		(863	)		(1,007	)
Allowance for credit losses		(6,159	)		(6,244	)
Total loans held for investment, net	$	770,533		$	750,653

Accrued interest receivable on loans held for investment totaled $4.1 million and $4.1 million as of June 30, 2025 and December 31, 2024, respectively, and was reported in accrued interest receivable on the Company’s consolidated statements of financial condition.

The Company has an established methodology to calculate the Allowance for Credit Losses (“ACL”) that assesses the risks and losses inherent in the Company’s loan portfolio. For purposes of determining the ACL, the Company segments certain loans in its portfolio by product type. The Company’s loans are segmented into the following pools: residential mortgage loans, commercial real estate loans, other commercial loans, home equity, and consumer loans. The Company also sub-segments these segments into classes based on the associated risks within those segments. Residential mortgage loans are divided into the following classes: fixed, variable and construction. Each class of loans requires significant judgment to determine the estimation method that fits the credit risk characteristics of its portfolio segment. The Company uses an internally developed model in this process. Management uses judgment in establishing additional input metrics for the modeling processes.

The model and assumptions the Company uses to determine the allowance are independently validated and reviewed to ensure that their theoretical foundation, assumptions, data integrity, computational processes, reporting practices and end-user controls are appropriate and properly documented. The following are the factors the Company uses to determine the ACL for each segment or class of loan.

FB BANCORP, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(dollar amounts in thousands unless otherwise noted)

Residential Mortgage Loans

All of our residential mortgage loans are centrally underwritten. When assessing credit risk, we analyze certain credit factors, such as payment history, credit utilization and length of credit history. All of our residential mortgage loans are secured by real estate; therefore, we evaluate and estimate the current market value of the collateral property. Common risk factors that are not specific to individual loan transactions include economic conditions within our markets, including unemployment rates and potential changes in real estate collateral values due to market conditions. Personal events, disability, death or change in marital status of the borrower also increase risk in residential mortgage lending.

Residential Mortgage Loans (Fixed and Variable)

Characteristically, residential mortgage loans are secured by 1- to 4-family residential properties and residential lots. Declines in market value can result in residential mortgages with outstanding balances in excess of the collateral value of the property securing the loan.

Residential Construction Loans

Residential construction loans can experience delays in construction and cost overruns that can exceed the borrower’s financial ability to complete the construction project, which could result in unmarketable collateral.

Commercial Loans

All of our commercial loans are centrally underwritten. When assessing credit risk, we analyze the borrower’s ability to generate adequate cash flow to service the debt in accordance with the terms and conditions of the loan agreement. Usually, our commercial loans are secured by collateral and we assess the current value of the collateral. Additionally, the Company evaluates and assesses the financial strength and liquidity of the borrower’s principals because the Company generally requires the personal guarantees of the borrower’s principals. Common risk factors that are not specific to individual loan transactions include economic conditions within our markets, including unemployment rates and potential changes in collateral values due to market conditions.

Commercial Real Estate

Commercial mortgage, commercial construction and land development loans are dependent upon the supply and demand for commercial real estate in the markets we serve as well as the demand for newly constructed residential homes and lots. A decrease in demand could result in decreases in the underlying collateral values and make repayment of the outstanding loans more difficult for our borrowers. Loans secured by non-residential properties and multifamily housing are dependent upon the ability of the property to produce cash flow sufficient to cover debt service and other operating expenses. These property types are susceptible to weak economic conditions which can result in high vacancy rates.

Other Commercial Loans

The repayment of commercial loans not secured by real estate is primarily dependent upon the ability of our borrowers to produce cash flows consistent with our original projections analyzed during the credit underwriting process. While our loans are generally secured by collateral with limitations on maximum loan to value ratios, there is a risk that liquidation of the collateral will not fully satisfy the loan balance.

FB BANCORP, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(dollar amounts in thousands unless otherwise noted)

Consumer Loans

All of the Company’s consumer loans are centrally underwritten. When assessing credit risk, we analyze certain credit factors, such as, payment history, credit utilization and length of credit history. Since a large percentage of consumer loans are secured, management evaluates the likely market value of the collateral. Common risk factors that are not specific to individual loan transactions include economic conditions within our markets. Personal events, disability, death or change in marital status of the borrower also increase risk in consumer lending.

Home Equity Loans

Home equity and home equity lines of credit loans are secured by first or junior liens on residential real estate making such loans susceptible to deterioration in residential real estate values. Additional risks include lien perfection deficiencies and the inherent risk that the borrower may draw on the lines in excess of their collateral value, particularly in a deteriorating real estate market.

Other Consumer Loans

Consumer loans include loans secured by personal property, such as automobiles, mobile homes and other title vehicles, such as boats and motorcycles. Consumer loans also include unsecured loans. The value of the underlying collateral for this loan category is especially volatile due to the potential rapid decline in values.

Credit Quality Indicators

Loans are categorized into risk categories based on relevant information about the ability of our borrowers to service their debt obligations. The relevant information includes current financial information, historical payment history, credit documentation, public information and current economic trends, among other factors. The Company uses a risk grading matrix to assign risk grades to each of our commercial loans and a portion of our other loans. Loans are graded on a scale of 1 to 10. A description of the general characteristics of the ten grades is as follows:


Grade 1	Substantially Risk Free. Fully secured by own-Bank deposits.

Grade 2	Minimal. Minimal degree of risk in both short term and long term. No noted credit, collateral or technical deficiencies. Exemplary and established history with the Company and elsewhere. Exceptional financial strength and generally in the upper quartile of peer comparisons. Loans secured by properly margined and monitored marketable securities may also be in this category.

       Grade 3 

       Moderate.  Only moderate risk apparent in both short term and long term.  Financial characteristics of borrower are strong.  Demonstrated ability to generate sufficient cash flow to meet debt service requirements including 3-5 years of generating increasing or consistently strong levels of cashflow, the capital structure is strong with only moderate leverage, trends are favorable, and comparison to peer is positive.  Credit reflects strong collateral values with proper margins, and/or is supported by strong guarantees.


Grade 4	Acceptable. Acceptable level of risk in both short term and long term. Borrower generates sufficient cash flow to meet debt service requirements with a comfortable

FB BANCORP, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(dollar amounts in thousands unless otherwise noted)


	margin and debt is adequately secured with appropriate collateral margins and supported by guarantees. Leverage, liquidity, margins, etc. are comparable to peer, but may not be as strong as borrowers risk rated 3.

Grade 5	Acceptable with Care. Risk is still considered acceptable, cash flow coverage of debt service requirements is adequate, but there are certain negative factors that could increase long term risk. Some common characteristics of these credits include: structure at variance with policy, LTV’s in excess of prescribed levels, trends negative but not materially adverse, leverage in excess of peer, etc.


Grade 6	Watch. Only marginally acceptable financial profiles, and financial trends are less favorable than prior periods. Short term risk may be acceptable, but negative factors could develop to make long term risk unacceptable. Weaknesses may include: outdated financials, inconsistent financial performance, strained liquidity, and adverse financial trends.

Grade 7	Special Mention. Increased level of risk (and, therefore, additional scrutiny) due to some weakening trend, poor performance, a particular circumstance or some other noted deficiency. Generally, repayment according to plan is still anticipated.

Grade 8	Substandard. Identified crucial weakness with associated loss potential. Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. An assessment under ASC 310 must be performed on credits identified for individual evaluation graded Substandard.


Grade 9	Doubtful. Full repayment or liquidation is highly questionable or improbable. Loans classified Doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently know facts, conditions and values, highly questionable and improbable. An assessment under ASC 310 must be performed on credits identified for individual evaluation graded Doubtful.

Grade 10	Loss. All outstanding principal and accrued interest is deemed uncollectible and is to be charged off promptly. Loans classified Loss are considered uncollectible and of such little value that their continuance as Bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. Loans classified Loss requires a 100% specific reserve.

FB BANCORP, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(dollar amounts in thousands unless otherwise noted)

Loans with a risk rating of 1 through 6 are classified as “Pass” rated credits in the following tables. Nonrated loans are also classified as “Pass.” The following table presents the Company's recorded investment in loans by credit quality indicators by year of origin as of June 30, 2025 and gross charge-offs for the six months ended June 30, 2025.


	Term Loans
1-4 Family Residential	2025		2024		2023		2022		2021		Prior		Revolving Lines		Total
Pass	$	3,075	$	16,041	$	60,226	$	62,085	$	27,982	$	64,874	$	—	$	234,283
Special Mention		—		—		—		254		—		70		—		324
Substandard		—		—		3,736		2,898		1,701		2,120		—		10,455
Doubtful		—		—		—

FB Bancorp, Inc. /MD/ 10-Q