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The First Bancshares, Inc. Reports Results for First Quarter ended March 31, 2024

Wednesday, April 24, 2024 05:47 PM | Business Wire via QuoteMedia

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The First Bancshares, Inc. Reports Results for First Quarter ended March 31, 2024

The First Bancshares, Inc. (“FBMS” or “the Company”) (NASDAQ: FBMS), holding company for The First Bank, ( www.thefirstbank.com ) reported today financial results for the quarter ended March 31, 2024.

Highlights for the Quarter:

  • Net income available to common shareholders totaled $20.6 million for the quarter ended March 31, 2024, representing an increase of 86.7% when compared to $11.0 million for the quarter ended December 31, 2023. Several one-time items are detailed in the tables located in the appendix of this release.
  • Excluding one-time items detailed in the tables located in the appendix of this release, net earnings available to common shareholders, operating (non-GAAP) increased $1.9 million, or 10.1% to $20.6 million for the quarter ended March 31, 2024 as compared to $18.7 million for the quarter ended December 31, 2023.
  • Total deposits increased $247.5 million for the quarter ended March 31, 2024 representing an increase of 3.8% as compared to the quarter ended December 31, 2023.
  • Annualized net interest margin decreased 8 basis points to 3.20% for the quarter ended March 31, 2024 from 3.28% for the quarter ended December 31, 2023 due to the reduction of accretion income as well as increased deposit cost.
  • Core net interest margin decreased 4 basis points during the quarter ended March 31, 2024 from 3.14% to 3.10%.
  • Cost of deposits averaged 178 basis points for the first quarter of 2024 compared to 154 basis points for the fourth quarter 2023.
  • Total loans decreased $30.1 million for the quarter ended March 31, 2024, representing net decrease of 2.3% on an annualized basis, as compared to the quarter ended December 31, 2023. SBA loan sales represented $23.1 million of the decrease.
  • Past due loans to total loans were $13.4 million or 0.26% for the quarter ending March 31, 2024, compared to $11.7 million, or 0.23% for the quarter ending December 31, 2023, and $11.6 million, or 0.23% for the quarter ending March 31, 2023.
  • Annualized quarter-to-date net charge-offs to total loans were $0.1 million, or 0.01% for the quarter ending March 31, 2024, compared to $0.8 million, or 0.06% for the quarter ending December 31, 2023 and $0.1 million, or 0.01% for the quarter ending March 31, 2023.
  • Nonperforming assets to total assets were $18.4 million, or 0.23% for the quarter ending March 31, 2024, compared to $20.2 million, or 0.25% for the quarter ending December 31, 2023, and $22.5 million, 0.28% for the quarter ending March 31, 2023.
  • For additional information, see the investor presentation filed and available under presentations and press releases included in the investor relations section of the Company's website: www.thefirstbank.com .

M. Ray “Hoppy” Cole, Jr., President and Chief Executive Officer, commented, “We are pleased with our overall results for the quarter. Operating income increased 10% quarter over quarter due to reduced operating expenses and some stabilization in the margin. Total deposits increased $42 million or 0.6% year over year and although loans were down at quarter end, pipelines actually grew and are in a strong position for this point in the year. Credit quality remains stable with low past dues and low non-performing assets. All in all, a solid quarter and good start to the year.”

Quarterly Earnings

Net income available to common shareholders totaled $20.6 million for the quarter ended March 31, 2024, an increase of $9.6 million, or 86.7%, when compared to $11.0 million for the quarter ended December 31, 2023.

Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) increased $1.9 million, or 10.1%, to $20.6 million for quarter ended March 31, 2024 as compared to $18.7 million for the quarter ended December 31, 2023. The increase in net earnings is attributable to a decrease in non-interest expense of $1.0 million and a decrease in provision for credit losses of $1.3 million.

The Company recorded no provision for credit losses for the quarter ended March 31, 2024 and $1.3 million for the quarter ended December 31, 2023.

Earnings Per Share

For the first quarter of 2024, diluted earnings per share were $0.65 compared to $0.35 for the fourth quarter of 2023 and $0.52 for the first quarter of 2023.

Diluted earnings per share, operating (non-GAAP) were $0.65 for the first quarter of 2024 compared to $0.59 for the fourth quarter of 2023 and $0.86 for the first quarter of 2023.

Balance Sheet

Consolidated assets decreased $35.6 million to $7.964 billion at March 31, 2024 from $7.999 billion at December 31, 2023. Loans decreased $30.1 million, or 0.6%, for the quarterly comparison.

Total loans were $5.140 billion for the quarter ended March 31, 2024, as compared to $5.170 billion for the quarter ended December 31, 2023, and $4.970 billion for the quarter ended March 31, 2023, representing a decrease of $30.1 million, or 0.6%, for the sequential quarter comparison, and an increase of $170.2 million, or 3.4%, for the prior year quarterly comparison.

Total deposits were $6.710 billion for the quarter ended March 31, 2024, as compared to $6.463 billion for the quarter ended December 31, 2023, and $6.668 billion for the quarter ended March 31, 2023, representing an increase of $247.5 million, or 3.8%, for the sequential quarter comparison, and an increase of $42.4 million, or 0.6%, for the prior year quarterly comparison.

Deposits increased $247.5 million, or 3.8% for the prior quarter comparison. Excluding an increase in public funds of $256.9 million, deposits decreased $9.4 million, or 0.2% for the prior quarter comparison.

Book value per share increased to $30.45 at March 31, 2024 from $30.22 at December 31, 2023.

Asset Quality

Nonperforming assets totaled $18.4 million at March 31, 2024, a decrease of $1.8 million compared to $20.2 million at December 31, 2023 and a decrease of $4.1 million compared to $22.5 million at March 31, 2023.

Nonaccrual loans totaled $11.0 million, an increase of $0.3 million as compared to December 31, 2023 and a decrease of $6.4 million as compared to March 31, 2023.

The ratio of the allowance for credit losses (ACL) to total loans was 1.05% at March 31, 2024, 1.05% at December 31, 2023 and 1.06% at March 31, 2023. The ratio of annualized net charge-offs to total loans was 0.01% for the quarter ended March 31, 2024 compared to 0.06% for the quarter ended December 31, 2023 and 0.01% for the quarter ended March 31, 2023.

First Quarter 2024 vs Fourth Quarter 2023 Earnings Comparison

Net income available to common shareholders for the first quarter of 2024 increased $9.6 million to $20.6 million compared to $11.0 million for the fourth quarter of 2023.

Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) increased $1.9 million, or 10.1%, to $20.6 million for quarter ended March 31, 2024 as compared to $18.7 million for the quarter ended December 31, 2023. The increase in net earnings is attributable to a decrease in non-interest expense of $1.0 million and a decrease in provision for credit losses of $1.3 million.

Net interest income for the first quarter of 2024 was $57.3 million as compared to $57.7 million for the fourth quarter of 2023, a decrease of $0.3 million. The decrease was largely due to the decrease in accretion of purchase accounting adjustments of $0.6 million as well as increased interest expense of $3.3 million partially offset by an increase in interest income of $2.9 million.

First quarter 2024 net interest margin of 3.20% included 15 basis points related to purchase accounting adjustments compared to 3.28% for the fourth quarter in 2023, which included 19 basis points related to purchase accounting adjustments.

Core net interest margin decreased 4 basis points to 3.10% for the first quarter of 2024 from 3.14% for the fourth quarter of 2023.

Investment securities totaled $1.745 billion, or 21.9% of total assets at March 31, 2024, compared to $1.735 billion, or 21.7% of total assets at December 31, 2023. The average balance of investment securities decreased $11.0 million in sequential-quarter comparison. The average tax equivalent yield on investment securities (non-GAAP) increased 11 basis points to 2.48% from 2.37% in sequential-quarter comparison. The investment portfolio had a net unrealized loss of $127.6 million at March 31, 2024 as compared to a net unrealized loss of $121.9 million at December 31, 2023.

The average yield on all earning assets (non-GAAP) increased in sequential-quarter comparison from 5.04% to 5.12%. Interest expense on average interest bearing liabilities increased 18 basis points from 2.47% for the fourth quarter of 2023 to 2.65% for the first quarter of 2024.

Cost of all deposits averaged 178 basis points for the first quarter of 2024 compared to 154 basis points for the fourth quarter of 2023. This increase was a result of rising interest rates and competition for deposits.

Non-interest income increased $10.3 million from $2.3 million in the fourth quarter of 2023 to $12.7 million in the first quarter of 2024, primarily attributable to a $9.7 million loss on sales of available for sale investment securities in the fourth quarter for 2023.

Non-interest expense for the first quarter of 2024 was $43.4 million compared to $44.4 million for the fourth quarter of 2023, a decrease of $1.0 million.

First Quarter 2024 vs. First Quarter 2023 Earnings Comparison

Net income available to common shareholders for the first quarter of 2024 totaled $20.6 million compared to $16.3 million for the first quarter of 2023, an increase of $4.4 million or 26.8%.

Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) decreased $6.5 million, or 23.9%, to $20.6 million for quarter ended March 31, 2024, as compared to $27.1 million for the quarter ended March 31, 2023. This decrease is attributable to a decrease in net interest income of $7.6 million.

Net interest income for the first quarter of 2024 was $57.3 million, a decrease of $7.6 million or 11.7% when compared to the first quarter of 2023. Fully tax equivalent (“FTE”) net interest income (non-GAAP) totaled $58.3 million and $65.9 million for the first quarter of 2024 and 2023, respectively. Purchase accounting adjustments increased $1.0 million for the first quarter comparisons. The decrease was largely due to increased interest expense due to increased competition for deposits.

First quarter of 2024 net interest margin was 3.20%, which included 15 basis points related to purchase accounting adjustments compared to 3.63% for the same quarter in 2023, which included 19 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin (non-GAAP) decreased 38 basis points in prior year quarterly comparison primarily due to an increase in rates on interest bearing liabilities.

Non-interest income increased $0.1 million for the first quarter of 2024 as compared to the first quarter of 2023.

First quarter 2024 non-interest expense was $43.4 million, a decrease of $2.2 million, or 4.9% as compared to the first quarter of 2023. Excluding acquisition charges, non-interest expense increased $1.5 million of which salaries and employee benefits increased $ 1.0 million.

Investment securities totaled $1.745 billion, or 21.9% of total assets at March 31, 2024, compared to $1.962 billion, or 24.5% of total assets at March 31, 2023. For the first quarter of 2024 compared to the first quarter of 2023, the average balance of investment securities decreased $217.3 million. The average tax equivalent yield on investment securities (non-GAAP) increased 17 basis points to 2.48% from 2.31% in the prior year quarterly comparison. The investment portfolio had a net unrealized loss of $127.6 million at March 31, 2024 as compared to a net unrealized loss of $137.6 million at March 31, 2023.

The average yield on all earning assets increased 63 basis points in prior year quarterly comparison, from 4.49% for the first quarter of 2023 to 5.12% for the first quarter of 2024. Interest expense on average interest bearing liabilities increased 141 basis points from 1.24% for the first quarter of 2023 to 2.65% for the first quarter of 2024.

Cost of all deposits averaged 178 basis points for the first quarter of 2024 compared to 72 basis points for the first quarter of 2023.

Declaration of Cash Dividend

The Company announced that its Board of Directors declared a cash dividend of $0.25 per share to be paid on its common stock on May 23, 2024 to shareholders of record as of the close of business on May 7, 2024.

Conference Call

The Company will host a conference call for analysts and investors to discuss the Company’s financial results at 10:00 a.m. Central Time on Thursday, April 25, 2024. Investors and analysts may participate by clicking on the Participant Conference Link: https://register.vevent.com/register/BIbc177289ae6b45cc8d010c66fc8b81d9 . An audio archive of the conference call along with the transcript will be available within 24-48 hours after the call and placed in the Investor Relations section of our website.

About The First Bancshares, Inc.

The First Bancshares, Inc., headquartered in Hattiesburg, Mississippi, is the parent company of The First Bank (“The First”). Founded in 1996, The First has operations in Mississippi, Louisiana, Alabama, Florida and Georgia. The Company’s stock is traded on the NASDAQ Global Market under the symbol FBMS. Information is available on the Company’s website: www.thefirstbank.com .

Non-GAAP Financial Measures

Our accounting and reporting policies conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, certain non-GAAP measures are used by management to supplement the evaluation of our performance. This press release includes pre-tax, pre-provision operating earnings, FTE net interest income, FTE net interest margin, core net interest margin, FTE average yield on investment securities, FTE average yield on all earning assets, total tangible common equity, tangible book value per common share, net earnings available to common shareholders, operating, diluted earnings per share, operating, efficiency ratio, operating and certain ratios derived from these non-GAAP financial measures. The Company believes that the non-GAAP financial measures included in this press release allow management and investors to understand and compare results in a more consistent manner for the periods presented in this press release. Fully-tax equivalent, or "FTE", financial metrics are measures used by management to evaluate the corresponding GAAP financial metrics in a manner that takes into account the tax benefits associated with income sources that are exempt from state or federal taxes. Core net interest margin is used by management to measure the net return on earnings assets, which includes investment securities, loans, and leases but excludes certain income and expense items that the Company's management considers to be non-core/adjusted in nature. Similarly, "operating" financial metrics, including operating efficiency ratio and operating earnings per share, are used by management to evaluate operating results exclusive of items that are not indicative of ongoing operations and impact period-to-period comparisons. Management uses "tangible" financial metrics, including tangible common equity and tangible book value, to measure the value of the Company's assets net of intangible assets, such as goodwill. Non-GAAP financial measures should be considered supplemental and not a substitute for the Company’s results reported in accordance with GAAP for the periods presented, and other bank holding companies may define or calculate these measures differently. These non-GAAP financial measures should not be considered in isolation and do not purport to be an alternative to net income, earnings per share, net interest income, book value, net interest margin, common equity, net earnings available to common shareholders, diluted earnings per share, efficiency ratio, average yield on investment securities, average yield on all earning assets, or other GAAP financial measures as a measure of operating performance. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure is provided in this press release following the Condensed Consolidated Financial Information (unaudited).

Forward Looking Statements

This news release and certain of our other filings with the Securities and Exchange Commission contain statements that constitute “forward looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

All statements other than statements of historical fact are forward-looking statements. Such statements can generally be identified by such words as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “should,” “predicts,” “could,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential,” “positioned” and other similar words and expressions of the future or otherwise regarding the outlook for the Company’s future business and financial performance and/or the performance of the banking industry and economy in general. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risk and uncertainties which may cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. Factors that might cause such differences include, but are not limited to: (1) competitive pressures among financial institutions increasing significantly; (2) prevailing, or changes in, economic or political conditions, either nationally or locally, particularly in areas in which the Company conducts operations, including the effects of declines in the real estate market, high unemployment rates, inflationary pressure, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing; (3) interest rate risk, including the effects of rising interest rates; (4) developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance; (5) changes in applicable laws, rules, or regulations; (6) risks related to the Company’s recently completed acquisitions, including that the anticipated benefits from the recently completed acquisitions are not realized in the time frame anticipated or at all as a result of changes in general economic and market conditions or other unexpected factors or events; (7) changes in management’s plans for the future; (8) credit risk associated with our lending activities; (9) changes in loan demand, real estate values, or competition; (10) changes in accounting principles, policies, or guidelines; (11) adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company's participation in and execution of government programs related to the COVID-19 pandemic and related variants; (12) higher inflation and its impacts; (13) significant turbulence or disruption in the capital or financial markets and the effect of a fall in stock market prices on our investment securities; (14) potential impacts of the adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto; (15) the effects of war or other conflicts including the impacts relating to or resulting from Russia's military action in Ukraine or the conflict in Israel and surrounding areas, and (16) other general competitive, economic, political, and market factors, including those affecting our business, operations, pricing, products, or services.

These and other factors that could cause results to differ materially from those described in the forward-looking statements, as well as a discussion of the risks and uncertainties that may affect our business, can be found in our Annual Report on Form 10-K and in other filings we make with the SEC, which are available on the SEC’s website, http://www.sec.gov . Undue reliance should not be placed on forward-looking statements. The Company disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments.

THE FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited )

(Dollars in thousands except per share data)

EARNINGS DATA

Quarter

Ended

3/31/24

Quarter

Ended

12/31/23

Quarter

Ended

9/30/23

Quarter

Ended

6/30/23

Quarter

Ended

3/31/23

Total Interest Income

$

91,663

$

88,720

$

85,681

$

86,194

$

80,338

Total Interest Expense

34,322

31,055

24,977

20,164

15,412

Net Interest Income

57,341

57,665

60,704

66,030

64,926

Net Interest Income excluding PPP Fee Income

57,340

57,664

60,703

66,029

64,718

FTE net interest income*

58,339

58,651

61,696

67,028

65,924

Provision for credit losses

1,250

1,000

1,250

11,000

Non-interest income

12,679

2,346

19,324

12,423

12,612

Non-interest expense

43,425

44,433

47,724

46,899

45,670

Earnings before income taxes

26,595

14,328

31,304

30,304

20,868

Income tax expense

5,967

3,281

6,944

6,525

4,597

Net income available to common shareholders

$

20,628

$

11,047

$

24,360

$

23,779

$

16,271

PER COMMON SHARE DATA

Basic earnings per share

$

0.66

$

0.35

$

0.78

$

0.76

$

0.52

Diluted earnings per share

0.65

0.35

0.77

0.75

0.52

Diluted earnings per share, operating*

0.65

0.59

0.76

0.85

0.86

Quarterly dividends per share

0.25

0.24

0.23

0.22

0.21

Book value per common share at end of period

30.45

30.22

28.57

28.64

28.58

Tangible book value per common share at period end*

19.70

19.35

17.62

17.62

17.49

Market price at end of period

25.95

29.33

26.97

25.84

25.83

Shares outstanding at period end

31,528,748

31,399,803

31,404,231

31,406,220

31,364,973

Weighted average shares outstanding:

Basic

31,475,254

31,401,612

31,405,439

31,378,364

31,309,458

Diluted

31,630,745

31,587,506

31,609,564

31,591,665

31,541,213

AVERAGE BALANCE SHEET DATA

Total assets

$

8,005,574

$

7,917,303

$

7,873,345

$

7,882,130

$

8,003,254

Loans and leases

5,158,071

5,145,228

5,038,928

4,982,368

4,975,663

Total deposits

6,599,287

6,440,774

6,466,141

6,501,372

6,816,473

Total common equity

952,708

901,530

905,070

901,499

868,995

Total tangible common equity*

612,470

558,889

560,071

554,792

538,903

SELECTED RATIOS

Annualized return on avg assets (ROA)

1.03

%

0.56

%

1.24

%

1.21

%

0.81

%

Annualized return on avg assets, operating*

1.03

%

0.95

%

1.22

%

1.36

%

1.36

%

Annualized pre-tax, pre-provision, operating*

1.33

%

1.31

%

1.62

%

1.81

%

1.78

%

Annualized return on avg common equity, operating*

8.66

%

8.32

%

10.63

%

11.91

%

12.48

%

Annualized return on avg tangible common equity, operating*

13.48

%

13.41

%

17.17

%

19.35

%

20.13

%

Average loans to average deposits

78.16

%

79.89

%

77.93

%

76.64

%

72.99

%

FTE Net Interest Margin*

3.26

%

3.33

%

3.52

%

3.82

%

3.69

%

Efficiency Ratio

61.15

%

72.84

%

58.90

%

59.02

%

58.15

%

Efficiency Ratio, operating*

61.14

%

62.00

%

56.06

%

53.87

%

53.32

%

*See reconciliation of non-GAAP financial measures

CREDIT QUALITY

Allowance for credit losses (ACL) as a % of total loans

1.05

%

1.05

%

1.05

%

1.05

%

1.06

%

Nonperforming assets to tangible equity + ACL

2.72

%

3.05

%

3.69

%

3.57

%

3.73

%

Nonperforming assets to total loans + OREO

0.36

%

0.39

%

0.44

%

0.43

%

0.45

%

Annualized QTD net charge-offs (recoveries) to total loans

0.006

%

0.061

%

0.004

%

0.070

%

0.010

%

THE FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

BALANCE SHEET

March 31,
2024

December 31,
2023

September 30,
2023

June 30,
2023

March 31,
2023

Assets

Cash and cash equivalents

$

339,964

$

355,147

$

197,632

$

194,050

$

333,491

Securities available for sale

1,088,568

1,042,365

1,141,971

1,199,103

1,249,791

Securities held to maturity

622,574

654,539

658,524

663,473

678,161

Other investments

34,094

37,754

35,872

35,725

34,423

Total investment securities

1,745,236

1,734,658

1,836,367

1,898,301

1,962,375

Loans held for sale

4,241

2,914

5,960

6,602

4,073

Total loans

5,139,952

5,170,042

5,089,800

5,010,925

4,969,776

Allowance for credit losses

(53,959

)

(54,032

)

(53,565

)

(52,614

)

(52,450

)

Loans, net

5,085,993

5,116,010

5,036,235

4,958,311

4,917,326

Premises and equipment

181,194

182,162

183,740

186,381

186,688

Other Real Estate Owned

6,743

8,320

4,920

5,588

5,066

Goodwill and other intangibles

338,946

341,332

343,869

346,104

347,777

Other assets

261,442

258,802

275,562

266,771

260,520

Total assets

$

7,963,759

$

7,999,345

$

7,884,285

$

7,862,108

$

8,017,316

Liabilities and Shareholders’ Equity

Non-interest bearing deposits

$

1,836,952

$

1,849,013

$

1,967,661

$

2,086,666

$

2,082,441

Interest-bearing deposits

4,873,403

4,613,859

4,512,364

4,405,601

4,585,515

Total deposits

6,710,355

6,462,872

6,480,025

6,492,267

6,667,956

Borrowings

110,000

390,000

302,000

280,000

250,000

Subordinated debentures

123,472

123,386

128,300

128,214

154,127

Other liabilities

60,020

74,053

76,739

62,181

48,806

Total liabilities

7,003,847

7,050,311

6,987,064

6,962,662

7,120,889

Total shareholders’ equity

959,912

949,034

897,221

899,446

896,427

Total liabilities and shareholders’ equity

$

7,963,759

$

7,999,345

$

7,884,285

$

7,862,108

$

8,017,316

THE FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT

Three Months Ended

3/31/2024

12/31/2023

9/30/2023

6/30/2023

3/31/2023

Interest Income:

Loans, including fees

$

76,172

$

74,357

$

70,349

$

68,057

$

64,264

Investment securities

11,248

10,803

10,614

10,815

11,707

Accretion of purchase accounting adjustments

2,627

3,235

4,277

6,533

3,469

Other interest income

1,616

325

441

789

898

Total interest income

91,663

88,720

85,681

86,194

80,338

Interest Expense:

Deposits

29,182

24,489

19,314

14,613

12,183

Borrowings

3,022

4,500

3,556

3,264

959

Subordinated debentures

1,887

1,807

1,849

2,138

2,176

Accretion of purchase accounting adjustments

231

259

258

149

94

Total interest expense

34,322

31,055

24,977

20,164

15,412

Net interest income

57,341

57,665

60,704

66,030

64,926

Provision for credit losses

1,250

1,000

1,250

11,000

Net interest income after provision for credit losses

57,341

56,415

59,704

64,780

53,926

Non-interest Income:

Service charges on deposit accounts

3,367

3,447

3,646

3,425

3,657

Mortgage Income

704

582

878

773

633

Interchange Fee Income

4,195

4,593

5,280

4,543

4,498

Gain (Loss) on securities, net

(48

)

(9,670

)

2

(48

)

Treasury Awards

6,197

Loss on sale of premises and equipment

(524

)

(104

)

Other charges and fees

4,461

3,918

3,425

3,730

3,824

Total non-interest income

12,679

2,346

19,324

12,423

12,612

Non-interest expense:

Salaries and employee benefits

24,508

23,717

22,807

23,315

23,572

Occupancy expense

5,714

5,688

5,343

5,041

5,296

FDIC/OCC premiums

1,008

1,263

1,158

758

670

Marketing

139

71

559

45

158

Amortization of core deposit intangibles

2,385

2,385

2,385

2,391

2,402

Other professional services

1,833

2,309

1,499

1,570

1,068

Acquisition and charter conversion charges

8

593

588

4,101

3,793

Other non-interest expense

7,830

8,407

13,385

9,678

8,711

Total non-interest expense

43,425

44,433

47,724

46,899

45,670

Earnings before income taxes

26,595

14,328

31,304

30,304

20,868

Income tax expense

5,967

3,281

6,944

6,525

4,597

Net income available to common shareholders

$

20,628

$

11,047

$

24,360

$

23,779

$

16,271

Diluted earnings per common share

$

0.65

$

0.35

$

0.77

$

0.75

$

0.52

Diluted earnings per common share, operating*

$

0.65

$

0.59

$

0.76

$

0.85

$

0.86

*See reconciliation of non-GAAP financial measures

THE FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT

Year to Date

2024

2023

Interest Income:

Loans, including fees

$

76,171

$

64,056

PPP loan fee income

1

208

Investment securities

11,248

11,707

Accretion of purchase accounting adjustments

2,627

3,469

Other interest income

1,616

898

Total interest income

91,663

80,338

Interest Expense:

Deposits

29,182

12,183

Borrowings

3,022

959

Subordinated debentures

1,887

2,176

Amortization of purchase accounting adjustments

231

94

Total interest expense

34,322

15,412

Net interest income

57,341

64,926

Provision for credit losses

11,000

Net interest income after provision for credit losses

57,341

53,926

Non-interest Income:

Service charges on deposit accounts

3,367

3,657

Mortgage Income

704

633

Interchange Fee Income

4,195

4,498

Gain (loss) on securities, net

(48

)

Bargain Purchase Gain and gain on sale of premises and equipment

(1

)

Other charges and fees

4,461

3,825

Total non-interest income

12,679

12,612

Non-interest expense:

Salaries and employee benefits

24,508

23,571

Occupancy expense

5,714

5,296

FDIC/OCC premiums

1,008

670

Marketing

139

158

Amortization of core deposit intangibles

2,385

2,402

Other professional services

1,833

1,068

Acquisition & charter conversion charges

8

3,793

Other non-interest expense

7,830

8,712

Total non-interest expense

43,425

45,670

Earnings before income taxes

26,595

20,868

Income tax expense

5,967

4,597

Net income available to common shareholders

20,628

16,271

Diluted earnings per common share

$

0.65

$

0.52

Diluted earnings per common share, operating*

$

0.65

$

0.86

*See reconciliation of non-GAAP financial measures

THE FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(Dollars in thousands)

COMPOSITION OF LOANS

March 31,
2024

Percent

of Total

December 31,
2023

September 30,
2023

June 30,
2023

March 31,
2023

Percent

of Total

Commercial, financial and agricultural

$

737,511

14.3

%

$

765,422

$

753,120

$

753,415

$

750,371

15.1

%

Real estate – construction

633,804

12.3

%

629,660

633,682

634,120

691,285

13.9

%

Real estate – commercial

2,356,552

45.8

%

2,377,864

2,317,666

2,251,710

2,181,384

43.9

%

Real estate – residential

1,330,589

25.9

%

1,311,395

1,298,980

1,286,343

1,262,244

25.4

%

Lease Financing Receivable

1,794

%

1,292

1,548

1,187

2,056

%

Obligations of States & subdivisions

28,541

0.6

%

29,316

29,650

31,137

31,652

0.6

%

Consumer

51,161

1.0

%

55,094

55,154

53,013

50,784

1.0

%

Loans held for sale

4,241

0.1

%

2,914

5,960

6,602

4,073

0.1

%

Total loans

$

5,144,193

100

%

$

5,172,957

$

5,095,760

$

5,017,527

$

4,973,849

100.0

%

COMPOSITION OF DEPOSITS

March 31,
2024

Percent

of Total

December 31,
2023

September 30,
2023

June 30,
2023

March 31,
2023

Percent

of Total

Non-interest bearing

$

1,836,952

27.4

%

$

1,849,013

$

1,967,661

$

2,086,666

$

2,082,441

31.2

%

NOW and other

2,135,343

31.7

%

1,914,792

1,962,383

2,014,420

2,095,599

31.4

%

Money Market/Savings

1,656,688

24.7

%

1,623,311

1,532,822

1,565,212

1,678,609

25.2

%

Time Deposits of less than $250,000

816,153

12.2

%

813,877

766,553

627,782

562,240

8.4

%

Time Deposits of $250,000 or more

265,219

4.0

%

261,879

250,606

198,187

249,067

3.8

%

Total Deposits

$

6,710,355

100

%

$

6,462,872

$

6,480,025

$

6,492,267

$

6,667,956

100.0

%

ASSET QUALITY DATA

March 31,
2024

December 31,
2023

September 30,
2023

June 30,
2023

March 31,
2023

Nonaccrual loans

$

10,961

$

10,691

$

17,423

$

16,037

$

17,312

Loans past due 90 days and over

687

1,163

53

73

Total nonperforming loans

11,648

11,854

17,476

16,037

17,385

Other real estate owned

6,743

8,320

4,920

5,588

5,066

Total nonperforming assets

$

18,391

$

20,174

$

22,396

$

21,625

$

22,451

Nonperforming assets to total assets

0.23

%

0.25

%

0.28

%

0.28

%

0.28

%

Nonperforming assets to total loans + OREO

0.36

%

0.39

%

0.44

%

0.43

%

0.45

%

ACL to nonperforming loans

463.25

%

455.81

%

306.51

%

328.08

%

301.70

%

ACL to total loans

1.05

%

1.05

%

1.05

%

1.05

%

1.06

%

Qtr-to-date net charge-offs (recoveries)

$

73

$

783

$

49

$

837

$

142

Annualized QTD net chg-offs (recs) to loans

0.006

%

0.061

%

0.004

%

0.070

%

0.010

%

THE FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

Yield

Three Months Ended

Three Months Ended

Three Months Ended

Three Months Ended

Three Months Ended

Analysis

March 31, 2024

December 31, 2023

September 30, 2023

June 30, 2023

March 31, 2023

Tax

Tax

Tax

Tax

Tax

Avg

Equivalent

Yield/

Avg

Equivalent

Yield/

Avg

Equivalent

Yield/

Avg

Equivalent

Yield/

Avg

Equivalent

Yield/

Balance

interest

Rate

Balance

interest

Rate

Balance

interest

Rate

Balance

interest

Rate

Balance

interest

Rate

Taxable securities

$

1,342,644

$

8,303

2.47

%

$

1,375,695

$

7,892

2.29

%

$

1,419,343

$

7,685

2.17

%

$

1,473,166

$

7,867

2.14

%

$

1,565,623

$

8,758

2.24

%

Tax-exempt securities

468,432

3,944

3.37

%

446,348

3,897

3.49

%

463,329

3,921

3.39

%

470,742

3,946

3.35

%

462,718

3,946

3.41

%

Total investment securities

1,811,076

12,247

2.70

%

1,822,043

11,789

2.59

%

1,882,672

11,606

2.47

%

1,943,908

11,813

2.43

%

2,028,341

12,704

2.51

%

Int bearing dep in other banks

189,785

1,616

3.41

%

70,193

325

1.85

%

79,448

441

2.22

%

93,464

789

3.38

%

146,663

898

2.45

%

Loans

5,158,071

78,798

6.11

%

5,145,228

77,592

6.03

%

5,038,928

74,626

5.92

%

4,982,368

74,590

5.99

%

4,975,663

67,734

5.45

%

Total interest earning assets

7,158,932

92,661

5.18

%

7,037,464

89,706

5.10

%

7,001,048

86,673

4.95

%

7,019,740

87,192

4.97

%

7,150,667

81,336

4.55

%

Other assets

846,642

879,839

872,297

862,390

852,587

Total assets

$

8,005,574

$

7,917,303

$

7,873,345

$

7,882,130

$

8,003,254

Interest-bearing liabilities:

Deposits

$

4,803,277

$

29,412

2.45

%

$

4,533,386

$

24,748

2.18

%

$

4,459,869

$

19,572

1.76

%

$

4,465,800

$

14,762

1.32

%

$

4,738,076

$

12,277

1.04

%

Borrowed Funds

254,505

3,023

4.75

%

361,445

4,500

4.98

%

296,963

3,556

4.79

%

277,531

3,264

4.70

%

77,098

959

4.98

%

Subordinated debentures

123,424

1,887

6.12

%

126,925

1,807

5.69

%

128,251

1,849

5.77

%

145,418

2,138

5.88

%

155,084

2,176

5.61

%

Total interest bearing

liabilities

5,181,206

34,322

2.65

%

5,021,756

31,055

2.47

%

4,885,083

24,977

2.05

%

4,888,749

20,164

1.65

%

4,970,258

15,412

1.24

%

Other liabilities

1,871,660

1,994,017

2,083,192

2,091,882

2,164,001

Shareholders' equity

952,708

901,530

905,070

901,499

868,995

Total liabilities and

shareholders' equity

$

8,005,574

$

7,917,303

$

7,873,345

$

7,882,130

$

8,003,254

Net interest

income (FTE)*

$

58,339

2.53

%

$

58,651

2.63

%

$

61,696

2.91

%

$

67,028

3.32

%

$

65,924

3.31

%

Net interest margin (FTE)*

3.26

%

3.33

%

3.52

%

3.82

%

3.69

%

Core net interest margin*

3.10

%

3.14

%

3.27

%

3.43

%

3.47

%

*See reconciliation for non-GAAP financial measures

THE FIRST BANCSHARES, INC and SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measures (unaudited)

(in thousands except per share data)

Three Months Ended

Per Common Share Data

Mar 31, 2024

Dec 31, 2023

Sept 30, 2023

June 30, 2023

Mar 31, 2023

Book value per common share

$

30.45

$

30.22

$

28.57

$

28.64

$

28.58

Effect of intangible assets per share

10.75

10.87

10.95

11.02

11.09

Tangible book value per common share

$

19.70

$

19.35

$

17.62

$

17.62

$

17.49

Diluted earnings per share

$

0.65

$

0.35

$

0.77

$

0.75

$

0.52

Effect of acquisition and charter conversion charges

0.02

0.02

0.13

0.11

Tax on acquisition and charter conversion charges

(0.01

)

(0.01

)

(0.03

)

(0.02

)

Effect of Treasury awards

(0.20

)

Tax on Treasury awards

0.05

Effect on contributions/consulting/advertising related to Treasury awards

0.17

Tax on contributions/consulting/advertising related to Treasury awards

(0.04

)

Initial provision for acquired loans

0.34

Tax on initial provision for acquired loans

(0.09

)

Loss on securities repositioning

0.31

Tax loss on securities repositioning

(0.08

)

Diluted earnings per share, operating

$

0.65

$

0.59

$

0.76

$

0.85

$

0.86

Year to Date

2024

2023

Diluted earnings per share

$

0.65

$

0.52

Effect of acquisition and charter conversion charges

0.11

Tax on acquisition and charter conversion charges

(0.02

)

Initial provision for acquired loans

0.34

Tax on initial provision for acquired loans

(0.09

)

Diluted earnings per share, operating

$

0.65

$

0.86

Year to Date

2024

2023

Net income available to common shareholders

$

20,628

$

16,271

Acquisition and charter conversion charges

8

3,793

Tax on acquisition and charter conversion charges

(2

)

(960

)

Initial provision for acquired loans

10,727

Tax on initial provision for acquired loans

(2,714

)

Net earnings available to common shareholders, operating

$

20,634

$

27,117

Three Months Ended

Average Balance Sheet Data

Mar 31, 2024

Dec 31, 2023

Sept 30, 2023

June 30, 2023

Mar 31, 2023

Total average assets

A

$

8,005,574

$

7,917,303

$

7,873,345

$

7,882,130

$

8,003,254

Total average earning assets

B

$

7,158,932

$

7,037,464

$

7,001,048

$

7,019,740

$

7,150,667

Common Equity

C

$

952,708

$

901,530

$

905,070

$

901,499

$

868,995

Less intangible assets

340,238

342,641

344,999

346,707

330,092

Total Tangible common equity

D

$

612,470

$

558,889

$

560,071

$

554,792

$

538,903

Three Months Ended

Net Interest Income Fully Tax Equivalent

Mar 31, 2024

Dec 31, 2023

Sept 30, 2023

June 30, 2023

Mar 31, 2023

Net interest income

E

$

57,341

$

57,665

$

60,704

$

66,030

$

64,926

Tax-exempt investment income

(2,946

)

(2,911

)

(2,929

)

(2,948

)

(2,948

)

Taxable investment income

3,944

3,897

3,921

3,946

3,946

Net Interest Income Fully Tax Equivalent

F

$

58,339

$

58,651

$

61,696

$

67,028

$

65,924

Annualized Net Interest Margin

E/B

3.20

%

3.28

%

3.47

%

3.76

%

3.63

%

Annualized Net Interest Margin, Fully Tax Equivalent

F/B

3.26

%

3.33

%

3.52

%

3.82

%

3.69

%

Total Interest Income, Fully Tax Equivalent

Total Interest Income

R

$

91,663

$

88,720

$

85,681

$

86,194

$

80,338

Tax-exempt investment income

(2,946

)

(2,911

)

(2,929

)

(2,948

)

(2,948

)

Taxable investment income

3,944

3,897

3,921

3,946

3,946

Total Interest Income, Fully Tax Equivalent

G

$

92,661

$

89,706

$

86,673

$

87,192

$

81,336

Yield on Average Earning Assets

R/B

5.12

%

5.04

%

4.90

%

4.91

%

4.49

%

Yield on Average Earning Assets, Fully Tax Equivalent

G/B

5.18

%

5.10

%

4.95

%

4.97

%

4.55

%

Interest Income Investment Securities, Fully Tax Equivalent

Interest Income Investment Securities

S

$

11,248

$

10,803

$

10,614

$

10,815

$

11,706

Tax-exempt investment income

(2,946

)

(2,911

)

(2,929

)

(2,948

)

(2,948

)

Taxable investment Income

3,944

3,897

3,921

3,946

3,946

Interest Income Investment Securities, Fully Tax Equivalent

H

$

12,246

$

11,789

$

11,606

$

11,813

$

12,704

Average Investment Securities

I

$

1,811,076

$

1,822,043

$

1,882,672

$

1,943,908

$

2,028,341

Yield on Investment Securities

S/I

2.48

%

2.37

%

2.26

%

2.23

%

2.31

%

Yield on Investment Securities, Fully Tax Equivalent

H/I

2.70

%

2.59

%

2.47

%

2.43

%

2.51

%

Three Months Ended

Core Net Interest Margin

Mar 31, 2024

Dec 31, 2023

Sept 30, 2023

June 30, 2023

Mar 31, 2023

Net interest income (FTE)

$

58,339

$

58,651

$

61,696

$

67,028

$

65,924

Less purchase accounting adjustments

2,627

3,235

4,276

6,533

3,469

Net interest income, net of purchase accounting adj

J

$

55,712

$

55,416

$

57,420

$

60,495

$

62,455

Total average earning assets

$

7,158,932

$

7,037,464

$

7,001,048

$

7,019,740

$

7,150,667

Add average balance of loan valuation discount

24,675

27,573

31,269

38,306

42,945

Avg earning assets, excluding loan valuation discount

K

$

7,183,607

$

7,065,037

$

7,032,317

$

7,058,046

$

7,193,612

Core net interest margin

J/K

3.10

%

3.14

%

3.27

%

3.43

%

3.47

%

Three Months Ended

Efficiency Ratio

Mar 31, 2024

Dec 31, 2023

Sept 30, 2023

June 30, 2023

Mar 31, 2023

Operating Expense

Total non-interest expense

$

43,425

$

44,433

$

47,724

$

46,899

$

45,670

Pre-tax non-operating expenses

(8

)

(594

)

(5,777

)

(4,101

)

(3,793

)

Adjusted Operating Expense

L

$

43,417

$

43,839

$

41,947

$

42,798

$

41,877

Operating Revenue

Net interest income, FTE

$

58,339

$

58,651

$

61,696

$

67,028

$

65,924

Total non-interest income

12,679

2,346

19,324

12,423

12,612

Pre-tax non-operating items

9,708

(6,197

)

Adjusted Operating Revenue

M

$

71,018

$

70,705

$

74,823

$

79,451

$

78,536

Efficiency Ratio, operating

L/M

61.14

%

62.00

%

56.06

%

53.87

%

53.32

%

Three Months Ended

Return Ratios

Mar 31, 2024

Dec 31, 2023

Sept 30, 2023

June 30, 2023

Mar 31, 2023

Net income available to common shareholders

N

$

20,628

$

11,047

$

24,360

$

23,779

$

16,271

Acquisition and charter conversion charges

8

593

588

4,101

3,793

Tax on acquisition and charter conversion charges

(2

)

(150

)

(149

)

(1,037

)

(960

)

Treasury awards

(6,197

)

Tax on Treasury awards

1,568

Contributions/consulting/advertising related to Treasury awards

5,190

Tax on contributions/consulting/advertising related to Treasury awards

(1,313

)

Initial provision for acquired loans

10,727

Tax on initial provision for acquired loans

(2,714

)

Loss on securities repositioning

9,708

Tax loss on securities repositioning

(2,457

)

Net earnings available to common shareholders, operating

O

$

20,634

$

18,741

$

24,047

$

26,843

$

27,117

Three Months Ended

Pre-Tax Pre-Provision Operating Earnings

Mar 31, 2024

Dec 31, 2023

Sept 30, 2023

June 30, 2023

Mar 31, 2023

Earnings before income taxes

P

$

26,595

$

14,328

$

31,304

$

30,304

$

20,868

Acquisition and charter conversion charges

8

593

588

4,101

3,793

Provision for credit losses

1,250

1,000

1,250

11,000

Treasury awards

(6,197

)

Contributions/consulting/advertising related to Treasury awards

5,190

Loss on securities repositioning

9,708

Pre-Tax, Pre-Provision Operating Earnings

Q

$

26,603

$

25,879

$

31,885

$

35,655

$

35,661

Annualized return on avg assets

N/A

1.03

%

0.56

%

1.24

%

1.21

%

0.81

%

Annualized return on avg assets, oper

O/A

1.03

%

0.95

%

1.22

%

1.36

%

1.36

%

Annualized pre-tax, pre-provision, oper

Q/A

1.33

%

1.31

%

1.62

%

1.81

%

1.78

%

Annualized return on avg common equity, oper

O/C

8.66

%

8.32

%

10.63

%

11.91

%

12.48

%

Annualized return on avg tangible common equity, operating

O/D

13.48

%

13.41

%

17.17

%

19.35

%

20.13

%

Three Months Ended

Capital Ratios

Mar 31, 2024*

Dec 31, 2023

Sept 30, 2023

June 30, 2023

Mar 31, 2023

Common equity tier 1 (CET1) ratio

12.2

%

12.1

%

12.0

%

11.5

%

11.2

%

Leverage (Tier 1) ratio

9.7

%

9.7

%

9.6

%

9.1

%

8.8

%

Total risk based capital ratio

15.2

%

15.0

%

15.1

%

14.5

%

14.7

%

Tangible common equity ratio

8.1

%

7.9

%

7.3

%

7.4

%

7.2

%

*estimated

M. Ray “Hoppy” Cole
Chief Executive Officer
Dee Dee Lowery
Chief Financial Officer
(601) 268-8998

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