The First Bancshares, Inc. Reports Results for First Quarter ended June 30, 2022; Increases Quarterly Dividend 6%

The First Bancshares, Inc. (“FBMS” or “the Company”) (NASDAQ: FBMS), holding company for The First Bank, (www.thefirstbank.com) reported today net income available to common shareholders for the quarter ended June 30, 2022.

Highlights for the Quarter:

  • Today, the Company announced that it has entered into a definitive agreement to acquire Heritage Southeast Bancorporation, Inc., parent company of Heritage Southeast Bank (“Heritage Bank”) based in Jonesboro, Georgia. The proposed transaction will increase the Company’s presence in Southern Georgia as well as provide entry into the fast growing markets of Atlanta and Savannah, Georgia and Jacksonville, Florida. Heritage Bank will add approximately $1.7 billion of assets and twenty three locations.
  • The Company and Beach Bancorp, Inc., parent company of Beach Bank have received all approvals necessary for closing of the previously announced merger of Beach Bancorp, Inc. with and into the Company, which is scheduled for July 31, 2022 with systems conversion planned for the fourth quarter of 2022.
  • Total loans, excluding Paycheck Protection Program (“PPP”) loans increased 5.7% for the quarter representing net growth of $167.8 million, or 22.7% on an annualized basis, as compared to the quarter ended March 31, 2022.
  • Net income available to common shareholders totaled $15.8 million for the quarter ended June 30, 2022, representing a decrease of $1.1 million, or 6.4%, compared to $16.8 million for the quarter ended March 31, 2022. The decrease was the result of several one-time items as detailed in the tables located in the appendix of this release.
  • Net earnings available to common shareholders, operating (non-GAAP) totaled $16.5 million for the quarter ended June 30, 2022, representing an increase of $1.5 million, or 10.1%, compared to $15.0 million for the quarter ended March 31, 2022.
  • Net interest income, excluding PPP fee income increased $3.9 million, or 10.4%, when comparing quarter end June 30, 2022 to quarter end March 31, 2022.
  • Cost of all deposits averaged 14 basis points for the second quarter of 2022 compared to 17 basis points for the first quarter of 2022, representing a decrease of 3 basis points.
  • During the quarter, the Company received a $0.2 million Bank Enterprise Award from the U. S. Treasury.

M. Ray “Hoppy” Cole, President and Chief Executive Officer, commented, “We are excited about the announcement today of our pending merger with Heritage Southeast Bank, the receipt of all necessary approvals for closing our merger with Beach Bank as well as posting strong result for the 2nd quarter.

The combination with Heritage Southeast Bank and Beach Bank we believe will be transformative to our Company’s franchise and will create significant value for our shareholders. Heritage Bank has an exceptional team of community bankers who are respected financial partners for their clients focused on providing exemplary service and investing in the local communities they serve. In addition to providing entry into some of the most dynamic markets in the southeast, this partnership will only enhance our CDFI status and provide additional resources to further our mission to serve underserved markets. We welcome the Heritage Bank team and their clients and look forward to continuing to grow and create value for our stakeholders.”

Quarterly Earnings

Net income available to common shareholders totaled $15.8 million for the quarter ended June 30, 2022, a decrease of $1.1 million, or 6.4%, compared to $16.8 million for the quarter ended March 31, 2022. Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) increased $1.5 million, or 10%, to $16.5 million for quarter ended June 30, 2022 as compared to $15.0 million for the quarter ended March 31, 2022. The Company also recognized $0.5 million less in PPP loan fee income during the second quarter 2022 as compared to the first quarter 2022.

The Company recorded a provision for loan losses of $0.6 million for the quarter ended June 30, 2022 and $0 for the quarter ended March 31, 2022.

Pre-tax, Pre-provision Operating Earnings

Pre-tax, pre-provision operating earnings (non-GAAP) increased $1.5 million to $20.8 million for the quarter ended June 30, 2022 as compared to $19.3 million for the quarter ended March 31, 2022. One-time items are detailed in the tables included with this press release.

Earnings Per Share

For the second quarter of 2022, fully diluted earnings per share were $0.76 compared to $0.81 for the first quarter of 2022 and $0.74 for the second quarter of 2021.

Fully diluted earnings per share, operating (non-GAAP) were $0.80 for the second quarter of 2022 compared to $0.72 for the first quarter of 2022 and $0.74 for the second quarter of 2021.

Fully diluted earnings per share in respect of the first and second quarters of 2022 were increased in part by the purchase by the Company of 600,000 shares of its common stock during the first quarter of 2022.

Balance Sheet

Consolidated assets decreased $158.7 million to $6.037 billion at June 30, 2022 from $6.196 billion at March 31, 2022. A decrease in deposits of $131.5 million during the second quarter 2022 along with a decrease of $42.5 million in accumulated other comprehensive income contributed to the decrease in consolidated assets.

PPP loans at June 30, 2022 were $6.3 million, a decrease of $13.1 million from March 31, 2022, due to loan forgiveness under the PPP program.

Total loans were $3.125 billion for the quarter ended June 30, 2022, as compared to $2.970 billion for the quarter ended March 31, 2022, and $3.037 billion for the quarter ended June 30, 2021, representing an increase of $154.7 million, or 5.2%, for the sequential quarter comparison, and an increase of $88.2 million, or 2.9%, for the prior year quarterly comparison. PPP loans totaled $6.3 million for the quarter ended June 30, 2022, $19.4 million for the quarter ended March 31, 2022, and $157.8 million for the quarter ended June 30, 2021.

Excluding the PPP loans, total loans increased $167.8 million, or 5.7% as compared to the quarter ended March 31, 2022, or 22.7% on an annualized basis.

Excluding the PPP loans, total loans increased $239.7 million, or 8.3% as compared to the quarter ended June 30, 2021.

Total deposits were $5.306 billion for the quarter ended June 30, 2022, as compared to $5.438 billion for the quarter ended March 31, 2022, and $4.674 billion for the quarter ended June 30, 2021, representing a decrease of $131.5 million, or 2.4%, for the sequential quarter comparison, and an increase of $632.3 million, or 13.5%, for the prior year quarterly comparison. The acquired Cadence branch deposit portfolio contributed $319.4 million to the $632.3 million increase for the prior year quarterly comparison.

Deposits decreased $131.5 million, or 2.4% as compared to the quarter ended March 31, 2022, of which $70.4 million was attributed to the seasonality of public fund deposits.

Tangible book value per share decreased to $18.32 at June 30, 2022 from $19.79 at March 31, 2022. This decreased was the result of the change in accumulated other comprehensive income of ($42.5 million) related to the effect of rising interest rates on our investment portfolio.

The Company implemented Deposit Reclassification at the beginning of 2020. This program reclassifies noninterest bearing deposits and NOW deposit balances to money market accounts. This program reduces our reserve balance required at the Federal Reserve Bank of Atlanta, which provides additional funds for liquidity and lending. At June 30, 2022, $835.4 million in noninterest deposit balances and $1.044 billion in NOW deposit accounts were reclassified as money market accounts.

Asset Quality

Nonperforming assets totaled $26.2 million at June 30, 2022, a decrease of $1.4 million compared to $27.6 million at March 31, 2022 and a decrease of $10.8 million compared to $37.0 million at June 30, 2021. Nonaccrual loans totaled $23.7 million, a decrease of $1.1 million as compared to March 31, 2022 and a decrease of $3.9 million as compared to June 30, 2021.

The ratio of the allowance for credit losses (ACL) to total loans was 1.04% at June 30, 2022, 1.06% at March 31, 2022 and 1.07% at June 30, 2021. The ratio of annualized net charge-offs (recoveries) to total loans was (0.04%) for the quarter ended June 30, 2022 compared to (0.12%) for the quarter ended March 31, 2022 and 0.03% for the quarter ended June 30, 2021.

Second Quarter 2022 vs First Quarter 2022 Earnings Comparison

Net income available to common shareholders for the second quarter of 2022 decreased $1.1 million to $15.8 million compared to $16.8 million for the first quarter of 2022.

Net interest income for the second quarter of 2022 was $42.1 million as compared to $38.6 million for the first quarter of 2022, an increase of $3.5 million which is primarily attributed to an increase in income from the investment securities of $2.6 million. FTE net interest income (non-GAAP) increased $3.6 million to $43.0 million from $39.5 million in sequential-quarter comparison. Second quarter 2022 FTE net interest margin (non-GAAP) of 3.09% included 5 basis points related to purchase accounting adjustments compared to 2.78% for the first quarter in 2022, which included 5 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin (non-GAAP) increased 31 basis points to 3.04% in sequential quarter comparison primarily due to increased average loans and investment securities.

Investment securities totaled $2.105 billion, or 34.9% of total assets at June 30, 2022, compared to $1.986 billion, or 32.1% of total assets at March 31, 2022. The average balance of investment securities increased $229.8 million in sequential-quarter comparison. The average tax equivalent yield on investment securities (non-GAAP) increased 29 basis point to 2.27% from 1.98% in sequential-quarter comparison. The investment portfolio had a net unrealized loss of $149.1 million at June 30, 2022 as compared to a net unrealized loss of $92.2 million at March 31, 2022.

The FTE average yield on all earning assets (non-GAAP) increased in sequential-quarter comparison from 3.07% to 3.36%. Interest expense on average interest bearing liabilities decreased 3 basis points from 0.32% for the first quarter of 2022 to 0.29% for the second quarter of 2022. Cost of all deposits averaged 14 basis points for the second quarter of 2022 compared to 17 basis points for the first quarter of 2022.

Non-interest income decreased $2.5 million from $11.2 million to $8.7 million in the sequential-quarter comparison, attributable to $1.6 million in BOLI income from death proceeds that was recorded during the first quarter 2022.

Non-interest expense for the second quarter of 2022 was $31.0 million compared to $28.6 million for the first quarter of 2022, an increase of $2.4 million, largely attributed to the increase in acquisition charges and charter conversion expenses of $0.8 million.

Second Quarter 2022 vs. Second Quarter 2021 Earnings Comparison

Net income available to common shareholders for the second quarter of 2022 totaled $15.8 million compared to $15.6 million for the second quarter of 2021, an increase of $0.2 million or 1.0%.

Net interest income for the second quarter of 2022 was $42.1 million, an increase of $4.1 million or 10.6% when compared to the second quarter of 2021. Fully tax equivalent (“FTE”) net interest income (non-GAAP) totaled $43.0 million and $38.7 million for the second quarter of 2022 and 2021, respectively. Purchase accounting adjustments decreased $0.4 million for the second quarter comparisons. Second quarter of 2022 FTE net interest margin (non-GAAP) was 3.09% which included 5 basis points related to purchase accounting adjustments compared to 3.14% for the same quarter in 2021, which included 9 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin (non-GAAP) decreased 1 basis point in prior year quarterly comparison.

Non-interest income decreased $0.2 million for the second quarter of 2022 as compared to the second quarter of 2021. This decrease was primarily attributable to a $1.1 million decrease in mortgage income.

Second quarter 2022 non-interest expense was $31.0 million, an increase of $3.5 million, or 12.8% as compared to the second quarter of 2021. Charges related to the acquisitions of the Cadence branches and Beach Bank as well as charter conversion expenses accounted for $1.2 million. Charges related to the ongoing operations of the Cadence branches totaled $1.0 million for the second quarter of 2022.

Investment securities totaled $2.105 billion, or 34.9% of total assets at June 30, 2022, compared to $1.303 billion, or 23.6% of total assets at June 30, 2021. For the second quarter of 2022 compared to the second quarter of 2021, the average balance of investment securities increased $906.8 million. The average tax equivalent yield on investment securities (non-GAAP) increased 12 basis points to 2.27% from 2.15% in the prior year quarterly comparison. The investment portfolio had a net unrealized loss of $149.1 million at June 30, 2022 as compared to a net unrealized gain of $25.6 million at June 30, 2021.

The FTE average yield on all earning assets (non-GAAP) decreased 20 basis points in prior year quarterly comparison, from 3.56% for the second quarter of 2021 to 3.36% for the second quarter of 2022. Interest expense on average interest bearing liabilities decreased 17 basis points from 0.46% for the second quarter of 2021 to 0.29% for the second quarter of 2022. Cost of all deposits averaged 14 basis points for the second quarter of 2022 compared to 28 basis points for the second quarter of 2021.

Year-to-Date Earnings Comparison

In the year-over-year comparison, net income available to common shareholders increased $0.3 million, or 1.05%, from $32.2 million for the six months ended June 30, 2021 to $32.6 million for the same period ended June 30, 2022.

Net interest income after provision for credit losses was $80.1 million for the six months ended June 30, 2022, an increase of $2.9 million as compared to the same period ended June 30, 2021, primarily due to interest income earned on a higher volume of loans and securities.

Non-interest income was $19.8 million for the six months ended June 30, 2022, an increase of $1.5 million as compared to the same period ended June 30, 2021. Service charges on deposit accounts and interchange fee income accounted for $1.1 million of the increase.

Non-interest expense was $59.5 million for the six months ended June 30, 2022, an increase of $4.8 million as compared to the same period ended June 30, 2021. An increase of $1.6 million in acquisition charter conversion charges and $1.7 million related to the ongoing charges related to the Cadence branches.

Declaration of Cash Dividend

The Company announced that its Board of Directors declared a cash dividend of $0.19 per share, a 6% increase over previous quarter, to be paid on its common stock on August 25, 2022 to shareholders of record as of the close of business on August 8, 2022.

Conference Call

The Company will host a conference call for analysts and investors to discuss the Company’s financial results and the announced acquisition of Heritage Southeast Bancorporation, Inc. at 1:00 p.m. Central Time on Thursday, July 28, 2022. Investors and analysts may participate by clicking on the Participant Conference Link: https://register.vevent.com/register/BI3b2b627ac8b444d4aa67f6094dbeb0c4.

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, average tax equivalent yield on investment securities, FTE average yield on all earning assets, total tangible common equity, tangible book value per common share 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. 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 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).

Additional Information about the Merger and Where to Find It

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The Company will file with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 for the proposed merger with Heritage Southeast Bancorporation, Inc., containing a joint proxy statement of Heritage Southeast Bancorporation, Inc., and the Company, as well as a prospectus of the Company. The Company will also file other documents with the SEC with respect to the proposed merger, pursuant to SEC reporting requirements. A definitive proxy statement/prospectus will be mailed to shareholders of Heritage Southeast Bancorporation, Inc. Investors and security holders of the Company and Heritage Southeast Bancorporation, Inc., are urged to read the entire joint proxy statement/prospectus and other documents that will be filed with the SEC carefully and in their entirety when they become available because they will contain important information about the Company, Heritage Southeast Bancorporation, Inc., and the proposed merger transactions. Investors and security holders will be able to obtain free copies of the registration statement and the proxy statement/prospectus (when available) and other documents filed with the SEC by the Company through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by the Company will be available free of charge on the Company’s internet website or by contacting the Company.

The Company and Heritage Southeast Bancorporation, Inc., and their respective directors and executive officers and other members of management and employees, may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of the Company is set forth in its proxy statement for its 2022 annual meeting of shareholders, filed with the SEC on April 6, 2022, and its Current Reports on Form 8-K. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

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) changes in economic or political conditions, either nationally or locally, particularly in areas in which the Company conducts operations; (3) interest rate risk; (4) changes in applicable laws, rules, or regulations; (5) risks related to the Company’s recently completed and pending 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; (6) changes in management’s plans for the future; (7) credit risk associated with our lending activities; changes in interest rates, loan demand, real estate values, or competition; (8) changes in accounting principles, policies, or guidelines; (9) 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; (10) the continued impact of the COVID-19 pandemic and related variants on the Company’s assets, business, cash flows, financial condition, liquidity, prospects and results of operations; (11) higher inflation and its impacts; (12) the effects of war or other conflicts including the impacts relating to or resulting from Russia’s military action in Ukraine; and (13) other general competitive, economic, political, and market factors, including those affecting our business, operations, pricing, products, or services.

Statements about the potential effects of the COVID-19 pandemic and related variants on the Company’s assets, business, liquidity, financial condition, prospects, and results of operations may constitute forward-looking statements and are subject to the risks that the actual effects may differ, possibly materially, from what is reflected in these forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the depth, dispersion and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on customers, employees, third parties and the Company.

Risks relating to the proposed Beach Bancorp, Inc. merger (the “Beach Merger”) and the Heritage Southeast Bancorporation, Inc. merger (the “Heritage Merger”, and together with the Beach Merger, the “Mergers”) include, without limitation, (1) the risk that the cost savings and any revenue synergies from the Mergers may not be realized or take longer than anticipated to be realized, (2) disruption from the Mergers with customers, suppliers, employee or other business partners relationships, (3) the occurrence of any event, change or other circumstances that could give rise to the termination of one or both of the definitive agreement in respect of the Mergers, (4) the risk of successful integration of Beach Bancorp, Inc. and Heritage Southeast Bancorporation, Inc. into the Company, (5) the failure to obtain the necessary approval by the shareholders of the Company and Heritage Southeast Bancorporation, Inc. in respect to the Heritage Merger, (6) the amount of the costs, fees, expenses and charges related to the Mergers, (7) the ability by the Company to obtain required governmental approvals in respect of the Heritage Merger, (8) reputational risk and the reaction of each of the companies’ customers, suppliers, employees or other business partners to the Mergers, (9) the failure of the closing conditions in the definitive agreements in respect of the Mergers to be satisfied, or any unexpected delay in closing of the Mergers, (10) the risk that the integration of the operations of each of Beach Bancorp, Inc. and Heritage Southeast Bancorporation, Inc. into the operations of the Company will be materially delayed or will be more costly or difficult than expected, (11) the possibility that the Mergers may be more expensive to complete than anticipated, including as a result of unexpected factors or events, (12) the dilution caused by the Company’s issuance of additional shares of its common stock in the Mergers, and (13) general competitive, economic, political and market conditions. Additional factors which could affect the forward looking statements can be found in the cautionary language included under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other documents subsequently filed by the Company with the SEC. Consequently, no forward-looking statement can be guaranteed.

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 Securities and Exchange Commission (“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.

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(Dollars in thousands except per share data)

EARNINGS DATA

Quarter Ended

6/30/22

Quarter Ended

3/31/22

Quarter Ended

12/31/21

Quarter Ended

9/30/21

Quarter Ended

6/30/21

Total Interest Income

$

45,847

 

$

42,741

 

$

43,885

 

$

44,435

 

$

43,238

 

Total Interest Expense

 

3,746

 

 

4,102

 

 

4,128

 

 

4,407

 

 

5,188

 

Net Interest Income

 

42,101

 

 

38,639

 

 

39,757

 

 

40,028

 

 

38,050

 

Net Interest Income excluding PPP Fee Income

 

41,563

 

 

37,643

 

 

37,151

 

 

37,294

 

 

35,750

 

FTE net interest income*

 

43,042

 

 

39,459

 

 

40,425

 

 

40,673

 

 

38,696

 

Provision for credit losses

 

600

 

 

-

 

 

(1,104

)

 

-

 

 

-

 

Non-interest income

 

8,664

 

 

11,157

 

 

9,593

 

 

9,586

 

 

8,822

 

Non-interest expense

 

30,955

 

 

28,590

 

 

30,789

 

 

29,053

 

 

27,452

 

Earnings before income taxes

 

19,210

 

 

21,206

 

 

19,665

 

 

20,561

 

 

19,420

 

Income tax expense

 

3,457

 

 

4,377

 

 

3,874

 

 

4,429

 

 

3,820

 

Net income available to common shareholders

$

15,753

 

$

16,829

 

$

15,791

 

$

16,132

 

$

15,600

 

 

 

 

 

 

 

 

 

 

 

 

 

PER COMMON SHARE DATA

 

 

 

 

 

Basic earnings per share

$

0.77

 

$

0.81

 

$

0.75

 

$

0.77

 

$

0.74

 

Diluted earnings per share

 

0.76

 

 

0.81

 

 

0.75

 

 

0.76

 

 

0.74

 

Diluted earnings per share, operating*

 

0.80

 

 

0.72

 

 

0.76

 

 

0.76

 

 

0.74

 

Quarterly dividends per share

 

.18

 

 

.17

 

 

.16

 

 

.15

 

 

.14

 

Book value per common share at end of period

 

27.30

 

 

28.82

 

 

32.17

 

 

31.81

 

 

31.40

 

Tangible book value per common share at period end*

 

18.32

 

 

19.79

 

 

23.31

 

 

23.03

 

 

22.57

 

Market price at end of period

 

28.60

 

 

33.66

 

 

38.62

 

 

38.78

 

 

37.43

 

Shares outstanding at period end

 

20,529,124

 

 

20,484,830

 

 

21,019,037

 

 

21,019,897

 

 

21,020,723

 

Weighted average shares outstanding:

 

 

 

 

 

Basic

 

20,507,451

 

 

20,697,946

 

 

21,020,768

 

 

21,020,128

 

 

21,018,772

 

Diluted

 

20,615,928

 

 

20,846,997

 

 

21,175,323

 

 

21,211,716

 

 

21,207,660

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCE SHEET DATA

 

 

 

 

 

Total assets

$

6,112,241

 

$

6,202,669

 

$

5,664,336

 

$

5,504,107

 

$

5,458,531

 

Loans and leases

 

3,013,228

 

 

2,945,877

 

 

2,956,657

 

 

2,983,771

 

 

3,042,785

 

Total deposits

 

5,347,415

 

 

5,361,480

 

 

4,814,945

 

 

4,665,914

 

 

4,629,176

 

Total common equity

 

593,410

 

 

666,561

 

 

672,121

 

 

664,594

 

 

647,850

 

Total tangible common equity*

 

408,855

 

 

480,922

 

 

500,639

 

 

479,540

 

 

461,743

 

 

 

 

 

 

 

SELECTED RATIOS

 

 

 

 

 

Annualized return on avg assets (ROA)

 

1.03

%

 

1.09

%

 

1.12

%

 

1.17

%

 

1.14

%

Annualized return on avg assets, operating*

 

1.08

%

 

0.97

%

 

1.13

%

 

1.17

%

 

1.14

%

Annualized pre-tax, pre-provision, operating*

 

1.36

%

 

1.24

%

 

1.33

%

 

1.49

%

 

1.42

%

Annualized return on avg common equity, operating*

 

11.12

%

 

8.99

%

 

9.53

%

 

9.70

%

 

9.63

%

Annualized return on avg tangible common equity, oper*

 

16.14

%

 

12.46

%

 

12.80

%

 

13.44

%

 

13.51

%

Average loans to average deposits

 

56.35

%

 

54.95

%

 

61.41

%

 

63.95

%

 

65.73

%

FTE Net Interest Margin*

 

3.09

%

 

2.78

%

 

3.14

%

 

3.25

%

 

3.14

%

Efficiency Ratio

 

59.87

%

 

56.48

%

 

61.56

%

 

57.81

%

 

57.77

%

Efficiency Ratio, operating*

 

57.66

%

 

58.37

%

 

59.91

%

 

56.62

%

 

57.77

%

*See reconciliation of Non-GAAP financial measures

 

 

 

 

 

 

CREDIT QUALITY

 

 

 

 

 

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

 

1.04

%

 

1.06

%

 

1.04

%

 

1.09

%

 

1.07

%

Nonperforming assets to tangible equity + ACL

 

6.41

%

 

6.31

%

 

5.88

%

 

5.43

%

 

7.30

%

Nonperforming assets to total loans + OREO

 

0.84

%

 

0.93

%

 

1.03

%

 

0.95

%

 

1.22

%

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

 

(0.04

%)

 

(0.12

%)

 

0.03

%

 

0.005

%

 

0.03

%

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

BALANCE SHEET

June 30,

2022

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

June 30,

2021

Assets

 

 

 

 

 

Cash and cash equivalents

$

356,771

 

$

802,613

 

$

919,713

 

$

657,296

 

$

762,486

 

Securities available for sale

 

1,489,247

 

 

1,591,677

 

 

1,751,832

 

 

1,463,255

 

 

1,280,761

 

Securities held to maturity

 

593,154

 

 

372,062

 

 

-

 

 

-

 

 

-

 

Other investments

 

22,588

 

 

22,226

 

 

22,226

 

 

22,225

 

 

22,225

 

Total investment securities

 

2,104,989

 

 

1,985,965

 

 

1,774,058

 

 

1,485,480

 

 

1,302,986

 

Loans held for sale

 

6,703

 

 

8,213

 

 

7,678

 

 

8,540

 

 

6,000

 

Total loans

 

3,124,924

 

 

2,970,246

 

 

2,959,553

 

 

2,960,919

 

 

3,036,732

 

Allowance for credit losses

 

(32,400

)

 

(31,620

)

 

(30,742

)

 

(32,418

)

 

(32,457

)

Loans, net

 

3,092,524

 

 

2,938,626

 

 

2,928,811

 

 

2,928,501

 

 

3,004,275

 

Premises and equipment

 

132,724

 

 

131,813

 

 

132,448

 

 

123,594

 

 

120,667

 

Other Real Estate Owned

 

1,985

 

 

2,835

 

 

2,565

 

 

2,580

 

 

3,529

 

Goodwill and other intangibles

 

184,323

 

 

185,104

 

 

186,171

 

 

184,545

 

 

185,597

 

Other assets

 

157,406

 

 

140,926

 

 

125,970

 

 

121,348

 

 

124,193

 

Total assets

$

6,037,425

 

$

6,196,095

 

$

6,077,414

 

$

5,511,884

 

$

5,509,733

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Non-interest bearing deposits^

$

822,841

 

$

810,723

 

$

756,118

 

$

596,126

 

$

632,485

 

Interest-bearing deposits

 

4,483,356

 

 

4,627,014

 

 

4,470,666

 

 

4,076,415

 

 

3,991,898

 

Total deposits

 

5,306,197

 

 

5,437,737

 

 

5,226,784

 

 

4,672,541

 

 

4,673,912

 

Borrowings

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Subordinated debentures

 

144,876

 

 

144,801

 

 

144,726

 

 

144,650

 

 

144,611

 

Other liabilities

 

25,900

 

 

23,117

 

 

29,732

 

 

26,010

 

 

31,158

 

Total liabilities

 

5,476,973

 

 

5,605,655

 

 

5,401,242

 

 

4,843,201

 

 

4,849,681

 

Total shareholders’ equity

 

560,452

 

 

590,440

 

 

676,172

 

 

668,683

 

 

660,052

 

Total liabilities and shareholders’ equity

$

6,037,425

 

$

6,196,095

 

$

6,077,414

 

$

5,511,884

 

$

5,509,733

 

^Reclassified $835,447 to interest-bearing deposits for Jun 30, 2022

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT

Three Months Ended

6/30/22

3/31/22

12/31/21

9/30/21

6/30/21

Interest Income:

 

 

 

 

 

Loans, including fees

$

34,058

 

$

33,354

 

$

36,035

 

$

36,374

 

$

36,283

 

Investment securities

 

11,152

 

 

8,574

 

 

7,032

 

 

6,938

 

 

5,925

 

Accretion of purchase accounting adjustments

 

605

 

 

800

 

 

800

 

 

1,106

 

 

992

 

Other interest income

 

32

 

 

13

 

 

18

 

 

17

 

 

38

 

Total interest income

 

45,847

 

 

42,741

 

 

43,885

 

 

44,435

 

 

43,238

 

Interest Expense:

 

 

 

 

 

Deposits

 

1,923

 

 

2,302

 

 

2,371

 

 

2,649

 

 

3,375

 

Borrowings

 

-

 

 

-

 

 

-

 

 

-

 

 

52

 

Subordinated debentures

 

1,841

 

 

1,819

 

 

1,818

 

 

1,819

 

 

1,821

 

Accretion of purchase accounting adjustments

 

(18

)

 

(19

)

 

(61

)

 

(61

)

 

(60

)

Total interest expense

 

3,746

 

 

4,102

 

 

4,128

 

 

4,407

 

 

5,188

 

Net interest income

 

42,101

 

 

38,639

 

 

39,757

 

 

40,028

 

 

38,050

 

Provision for credit losses

 

600

 

 

-

 

 

(1,104

)

 

-

 

 

-

 

Net interest income after provision for credit losses

 

41,501

 

 

38,639

 

 

40,861

 

 

40,028

 

 

38,050

 

 

 

 

 

 

 

Non-interest Income:

 

 

 

 

 

Service charges on deposit accounts

 

2,038

 

 

2,040

 

 

1,901

 

 

1,846

 

 

1,756

 

Mortgage Income

 

1,227

 

 

1,230

 

 

1,556

 

 

1,732

 

 

2,372

 

Interchange Fee Income

 

3,102

 

 

3,197

 

 

3,029

 

 

2,744

 

 

3,145

 

Gain (Loss) on securities, net

 

(80

)

 

(3

)

 

36

 

 

11

 

 

77

 

Financial Assistance Award/Bank Enterprise Award/RRP Grant

 

171

 

 

702

 

 

-

 

 

1,826

 

 

-

 

Bargain Purchase Gain and (Loss) on Sale of Land

 

165

 

 

-

 

 

1,300

 

 

(397

)

 

-

 

BOLI income from death proceeds

 

-

 

 

1,630

 

 

-

 

 

-

 

 

-

 

Other charges and fees

 

2,041

 

 

2,361

 

 

1,771

 

 

1,824

 

 

1,472

 

Total non-interest income

 

8,664

 

 

11,157

 

 

9,593

 

 

9,586

 

 

8,822

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

Salaries and employee benefits

 

17,237

 

 

16,799

 

 

17,519

 

 

16,246

 

 

16,036

 

Occupancy expense

 

3,828

 

 

3,876

 

 

3,948

 

 

3,922

 

 

3,813

 

FDIC/OCC premiums

 

546

 

 

566

 

 

550

 

 

532

 

 

499

 

Marketing

 

122

 

 

86

 

 

113

 

 

78

 

 

39

 

Amortization of core deposit intangibles

 

1,064

 

 

1,064

 

 

982

 

 

1,052

 

 

1,052

 

Other professional services

 

768

 

 

563

 

 

1,282

 

 

934

 

 

1,049

 

Acquisition and charter conversion charges

 

1,172

 

 

408

 

 

1,602

 

 

5

 

 

-

 

Other non-interest expense

 

6,218

 

 

5,228

 

 

4,793

 

 

6,284

 

 

4,964

 

Total Non-interest expense

 

30,955

 

 

28,590

 

 

30,789

 

 

29,053

 

 

27,452

 

Earnings before income taxes

 

19,210

 

 

21,206

 

 

19,665

 

 

20,561

 

 

19,420

 

Income tax expense

 

3,457

 

 

4,377

 

 

3,874

 

 

4,429

 

 

3,820

 

Net income available to common shareholders

$

15,753

 

$

16,829

 

$

15,791

 

$

16,132

 

$

15,600

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

0.76

 

$

0.81

 

$

0.75

 

$

0.76

 

$

0.74

 

Diluted earnings per common share, operating*

$

0.80

 

$

0.72

 

$

0.76

 

$

0.76

 

$

0.74

 

*See reconciliation of Non-GAAP financial measures

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT

Year to Date

 

 

2022

 

 

 

2021

 

 

Interest Income:

 

 

 

 

 

Loans, including fees

 

$

67,412

 

 

$

74,870

 

 

Investment securities

 

 

19,726

 

 

 

11,451

 

 

Accretion of purchase accounting adjustments

 

 

1,405

 

 

 

2,018

 

 

Other interest income

 

45

 

 

86

 

Total interest income

 

 

88,588

 

 

 

88,425

 

 

Interest Expense:

 

 

 

 

 

Deposits

 

 

4,225

 

 

 

7,285

 

 

Borrowings

 

 

-

 

 

 

340

 

 

Subordinated debentures

 

 

3,660

 

 

 

3,642

 

 

Amortization of purchase accounting adjustments

 

(37

)

 

(121

)

Total interest expense

 

7,848

 

 

11,146

 

Net interest income

 

 

80,740

 

 

 

77,279

 

 

Provision for credit losses

 

600

 

 

-

 

Net interest income after provision for credit losses

 

 

80,140

 

 

 

77,279

 

 

 

 

 

 

 

 

Non-interest Income:

 

 

 

 

 

Service charges on deposit accounts

 

 

4,078

 

 

 

3,516

 

 

Mortgage Income

 

 

2,457

 

 

 

5,534

 

 

Interchange Fee Income

 

 

6,299

 

 

 

5,789

 

 

Gain (loss) on securities, net

 

 

(83

)

 

 

97

 

 

Financial Assistance Award/Bank Enterprise Award/RRP Grant

 

 

873

 

 

 

-

 

 

Bargain Purchase Gain and Loss on Sale of Fixed Assets

 

165

 

 

 

-

 

BOLI income from death proceeds

 

1,630

 

 

 

-

 

Other charges and fees

 

4,402

 

 

3,359

 

Total non-interest income

 

 

19,821

 

 

 

18,295

 

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

Salaries and employee benefits

 

 

34,036

 

 

 

32,091

 

 

Occupancy expense

 

 

7,704

 

 

 

7,692

 

 

FDIC/OCC premiums

 

 

1,112

 

 

 

993

 

 

Marketing

 

 

208

 

 

 

199

 

 

Amortization of core deposit intangibles

 

 

2,128

 

 

 

2,104

 

 

Other professional services

 

 

1,331

 

 

 

1,983

 

 

Acquisition & charter conversion charges

 

 

1,580

 

 

 

-

 

 

Other non-interest expense

 

11,446

 

 

9,655

 

Total Non-interest expense

 

59,545

 

 

54,717

 

Earnings before income taxes

 

 

40,416

 

 

 

40,857

 

 

Income tax expense

 

7,834

 

 

8,613

 

Net income available to common shareholders

$

32,582

 

$

32,244

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

1.57

 

$

1.52

 

Diluted earnings per common share, operating*

$

1.52

 

$

1.52

 

*See reconciliation of Non-GAAP financial measures

 

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(Dollars in thousands)

COMPOSITION OF LOANS

June 30,

2022

Percent

of Total

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

June 30,

2021

Percent

of Total

Commercial, financial and agricultural

$

379,363

 

12.1

%

$

364,702

 

$

375,379

 

$

426,342

 

$

485,134

 

15.9

%

Real estate – construction

 

429,946

 

13.7

%

 

387,290

 

 

364,075

 

 

361,732

 

 

341,864

 

11.2

%

Real estate – commercial

 

1,319,821

 

42.1

%

 

1,249,203

 

 

1,242,529

 

 

1,206,267

 

 

1,215,103

 

39.9

%

Real estate – residential

 

932,268

 

29.8

%

 

911,568

 

 

916,179

 

 

910,618

 

 

935,827

 

30.8

%

Lease Financing Receivable

 

2,283

 

0.1

%

 

2,409

 

 

2,556

 

 

2,889

 

 

3,291

 

0.1

%

Obligations of States & subdivisions

 

20,784

 

0.7

%

 

15,842

 

 

16,765

 

 

15,790

 

 

16,489

 

0.6

%

Consumer

 

40,459

 

1.3

%

 

39,233

 

 

42,070

 

 

37,281

 

 

39,024

 

1.3

%

Loans held for sale

 

6,703

 

0.2

%

 

8,213

 

 

7,678

 

 

8,540

 

 

6,000

 

0.2

%

Total loans

$

3,131,627

 

100

%

$

2,978,460

 

$

2,967,231

 

$

2,969,459

 

$

3,042,732

 

100

%

 

 

 

 

 

 

 

 

COMPOSITION OF DEPOSITS

June 30,

2022

Percent

of Total

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

June 30,

2021

Percent

of Total

Non-interest bearing^

$

822,841

 

15.5

%

$

810,723

 

$

756,118

 

$

596,126

 

$

682,014

 

14.6

%

NOW and other^

 

746,796

 

14.1

%

 

851,276

 

 

739,153

 

 

670,888

 

 

704,034

 

15.1

%

Money Market/Savings^

 

3,205,876

 

60.4

%

 

3,209,016

 

 

3,146,904

 

 

2,896,140

 

 

2,758,957

 

59.0

%

Time Deposits of less than $250,000

 

400,354

 

7.5

%

 

424,183

 

 

445,879

 

 

390,289

 

 

404,437

 

8.6

%

Time Deposits of $250,000 or more

 

130,330

 

2.5

%

 

142,539

 

 

138,730

 

 

119,098

 

 

124,470

 

2.7

%

Total Deposits

$

5,306,197

 

100

%

$

5,437,737

 

$

5,226,784

 

$

4,672,541

 

$

4,673,912

 

100

%

 

 

 

 

 

 

 

 

Deposits Without Reclassification^

June 30,

2022

Percent

of Total

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

June 30,

2021

Percent

of Total

Non-interest bearing

$

1,658,288

 

31.3

%

$

1,648,451

 

$

1,550,381

 

$

1,424,208

 

$

1,393,724

 

29.8

%

NOW and other

 

1,790,980

 

33.7

%

 

1,885,145

 

 

1,771,510

 

 

1,524,935

 

 

1,541,915

 

33.0

%

Money Market/Savings

 

1,326,245

 

25.0

%

 

1,337,419

 

 

1,320,284

 

 

1,214,011

 

 

1,209,366

 

25.9

%

Time Deposits of less than $250,000

 

400,354

 

7.5

%

 

424,183

 

 

445,879

 

 

390,289

 

 

404,437

 

8.6

%

Time Deposits of $250,000 or more

 

130,330

 

2.5

%

 

142,539

 

 

138,730

 

 

119,098

 

 

124,470

 

2.7

%

Total Deposits

$

5,306,197

 

100

%

$

5,437,737

 

$

5,226,784

 

$

4,672,541

 

$

4,673,912

 

100

%

 

 

 

 

 

 

 

 

ASSET QUALITY DATA

June 30,

2022

 

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

June 30,

2021

 

Nonaccrual loans

$

23,678

 

 

$

24,736

 

$

28,013

 

$

25,012

 

$

27,625

 

 

Loans past due 90 days and over

 

527

 

 

 

-

 

 

45

 

 

456

 

 

5,834

 

 

Total nonperforming loans

 

24,205

 

 

 

24,736

 

 

28,058

 

 

25,468

 

 

33,459

 

 

Other real estate owned

 

1,985

 

 

 

2,834

 

 

2,565

 

 

2,580

 

 

3,529

 

 

Total nonperforming assets

$

26,190

 

$

27,570

 

$

30,623

 

$

28,048

 

$

36,988

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

0.43

%

 

 

0.44

%

 

0.50

%

 

0.51

%

 

0.67

%

 

Nonperforming assets to total loans + OREO

 

0.84

%

 

 

0.93

%

 

1.03

%

 

0.95

%

 

1.22

%

 

ACL to nonperforming loans

 

133.86

%

 

 

127.83

%

 

109.57

%

 

127.29

%

 

97.01

%

 

ACL to total loans

 

1.04

%

 

 

1.06

%

 

1.04

%

 

1.09

%

 

1.07

%

 

 

 

 

 

 

 

 

 

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

$

(329

)

 

$

(879

)

$

220

 

$

39

 

$

207

 

 

Annualized QTD net chg-offs (recs) to loans

 

(0.04

%)

 

 

(0.12

%)

 

0.03

%

 

0.005

%

 

0.03

%

 

^Reclassified $835,447 to interest-bearing deposits for June 30, 2022

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 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021
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

$

1,634,679

$

8,372

2.05

%

$

1,413,523

$

6,152

1.74

%

$

1,166,432

$

5,059

1.73

%

$

986,325

$

5,033

2.04

%

$

853,180

$

4,017

1.88

%

Tax-exempt
securities

 

492,405

 

3,721

3.02

%

 

483,780

 

3,242

2.68

%

 

397,906

 

2,641

2.65

%

 

377,610

 

2,550

2.70

%

 

367,074

 

2,554

2.78

%

Total investment
securities

 

2,127,084

 

12,093

2.27

%

 

1,897,303

 

9,394

1.98

%

 

1,564,338

 

7,700

1.97

%

 

1,363,935

 

7,583

2.22

%

 

1,220,254

 

6,571

2.15

%

in other banks

 

432,851

 

32

0.03

%

 

825,877

 

13

0.01

%

 

634,541

 

18

0.01

%

 

657,387

 

17

0.01

%

 

661,069

 

38

0.02

%

Loans

 

3,013,228

 

34,663

4.60

%

 

2,945,877

 

34,154

4.64

%

 

2,956,657

 

36,835

4.98

%

 

2,983,771

 

37,480

5.02

%

 

3,042,785

 

37,275

4.90

%

Total Interest
earning assets

 

5,573,163

 

46,788

3.36

%

 

5,669,057

 

43,561

3.07

%

 

5,155,536

 

44,553

3.46

%

 

5,005,093

 

45,080

3.60

%

 

4,924,108

 

43,884

3.56

%

Other assets

 

539,078

 

533,612

 

508,800

 

506,134

 

534,423

Total assets

$

6,112,241

$

6,202,669

$

5,664,336

$

5,511,227

$

5,458,531

 
Interest-bearing
liabilities:
Deposits

$

4,953,229

$

1,905

0.15

%

$

5,021,657

$

2,283

0.18

%

$

4,537,958

$

2,310

0.20

%

$

4,422,690

$

2,588

0.23

%

$

4,374,372

$

3,315

0.30

%

Borrowed Funds

 

-

 

-

0.00

%

 

-

 

-

0.00

%

 

-

 

-

0.00

%

 

206

 

-

0.00

%

 

3,355

 

52

6.20

%

Subordinated
debentures

 

144,834

 

1,841

5.08

%

 

144,759

 

1,819

5.03

%

 

144,684

 

1,818

5.03

%

 

144,630

 

1,819

5.03

%

 

144,591

 

1,821

5.04

%

Total interest
bearing liabilities

 

5,098,063

 

3,746

0.29

%

 

5,166,416

 

4,102

0.32

%

 

4,682,642

 

4,128

0.35

%

 

4,567,526

 

4,407

0.39

%

 

4,522,318

 

5,188

0.46

%

Other liabilities

 

420,768

 

369,692

 

309,573

 

279,107

 

288,363

Shareholders' equity

 

593,410

 

666,561

 

672,121

 

664,594

 

647,850

Total liabilities and
shareholders'
equity

$

6,112,241

$

6,202,669

$

5,664,336

$

5,511,227

$

5,458,531

 
Net interest
income (FTE)*

$

43,042

3.06

%

$

39,459

2.75

%

$

40,425

3.10

%

$

40,673

3.22

%

$

38,696

3.11

%

 
Net interest margin (FTE)*

3.09

%

2.78

%

3.14

%

3.25

%

3.14

%

 
Core net interest
margin*

3.04

%

2.73

%

3.07

%

3.15

%

3.05

%

 
*See reconciliation for Non-GAAP financial measures

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

June 30,

2022

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

June 30,

2021

Book value per common share

$

27.30

 

$

28.82

 

$

32.17

 

$

31.81

 

$

31.40

Effect of intangible assets per share

 

8.98

 

 

9.03

 

 

8.86

 

 

8.78

 

 

8.83

Tangible book value per common share

$

18.32

 

$

19.79

 

$

23.31

 

$

23.03

 

$

22.57

 

Diluted earnings per share

$

0.76

 

$

0.81

 

$

0.75

 

$

0.76

 

$

0.74

Effect of acquisition and charter conversion charges

 

0.05

 

 

0.02

 

 

0.07

 

 

-

 

 

-

Tax on acquisition and charter conversion charges

 

(0.01

)

 

-

 

 

(0.02

)

 

-

 

 

-

Effect of bargain purchase gain and loss on sale of fixed assets

 

-

 

 

-

 

 

(0.06

)

 

0.02

 

 

-

Tax on bargain purchase gain and loss on sale of fixed assets

 

-

 

 

-

 

 

0.02

 

 

-

 

 

-

Effect of Treasury awards

 

-

 

 

(0.03

)

 

-

 

 

(0.09

)

 

-

Tax on Treasury awards

 

-

 

 

-

 

 

-

 

 

0.02

 

 

-

BOLI income from death proceeds

 

-

 

 

(0.08

)

 

-

 

 

-

 

 

-

Effect on Contributions related to Treasury awards

 

-

 

 

-

 

 

-

 

 

0.07

 

 

-

Tax on Contributions related to Treasury awards

 

-

 

 

-

 

 

-

 

 

(0.02

)

 

-

Diluted earnings per share, operating

$

0.80

 

$

0.72

 

$

0.76

 

$

0.76

 

$

0.74

 

 

 

 

 

 

 

Year to Date

 

 

2022

 

 

 

2021

 

 

Diluted earnings per share

$

1.57

 

 

$

1.52

 

 

Effect of acquisition and charter conversion charges

 

 

0.08

 

 

 

-

 

 

Tax on acquisition and charter conversion charges

 

 

(0.02

)

 

 

-

 

 

Effect of bargain purchase gain and loss on sale of fixed assets

 

 

(0.01

)

 

 

-

 

 

Tax on bargain purchase gain and loss on sale of fixed assets

 

 

-

 

 

 

-

 

 

Effect of Treasury awards

 

 

(0.04

)

 

 

-

 

 

Tax on Treasury awards

 

 

0.01

 

 

 

-

 

 

BOLI income from death proceeds

 

 

(0.08

)

 

 

 

Effect on Contributions related to Treasury awards

 

 

0.01

 

 

 

-

 

 

Tax on Contributions related to Treasury awards

 

 

-

 

 

-

 

 

Diluted earnings per share, operating

 

$

1.52

 

$

1.52

 

 

 

 

 

 

 

 

 

Year to Date

 

 

2022

 

 

 

2021

 

 

Net income available to common shareholders

$

32,581

 

 

$

32,244

 

 

Acquisition and charter conversion charges

 

 

1,580

 

 

 

-

 

 

Tax on acquisition and charter conversion charges

 

 

(400

)

 

 

-

 

 

Bargain purchase gain and loss on sale of fixed assets

 

 

(165

)

 

 

-

 

 

Tax on bargain purchase gain and loss on sale of fixed assets

 

 

42

 

 

 

-

 

 

Treasury awards

 

 

(872

)

 

 

-

 

 

Tax on Treasury awards

 

 

221

 

 

 

-

 

 

BOLI income from death proceeds

 

 

(1,630

)

 

 

 

Contributions related to Treasury awards

 

 

165

 

 

 

-

 

 

Tax on Contributions related to Treasury awards

 

 

(42

)

 

-

 

 

Net earnings available to common shareholders, operating

 

$

31,480

 

$

32,244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Average Balance Sheet Data

 

June 30, 2022

Mar 31, 2022

Dec 31, 2021

Sept 30, 2021

June 30, 2021

Total average assets

A

$

6,112,241

 

$

6,202,669

 

$

5,664,336

 

$

5,504,107

 

$

5,458,531

 

Total average earning assets

B

 

5,573,163

 

$

5,669,057

 

$

5,155,536

 

$

5,005,093

 

$

4,924,108

 

 

 

 

 

 

 

 

Common Equity

C

$

593,410

 

$

666,561

 

$

672,121

 

$

664,594

 

$

647,850

 

Less intangible assets

 

 

184,555

 

 

185,639

 

 

171,482

 

 

185,054

 

 

186,107

 

Total Tangible common equity

D

$

408,855

 

$

480,922

 

$

500,639

 

$

479,540

 

$

461,743

 

 

 

 

 

 

Three Months Ended

Net Interest Income Fully Tax Equivalent

 

June 30, 2022

Mar 31, 2022

Dec 31, 2021

Sept 30, 2021

June 30, 2021

Net interest income

E

$

42,101

 

$

38,639

 

$

39,757

 

$

40,028

 

$

38,050

 

Tax-exempt investment income

 

 

(2,780

)

 

(2,422

)

 

(1,973

)

 

(1,905

)

 

(1,908

)

Taxable investment income

 

 

3,721

 

 

3,242

 

 

2,641

 

 

2,550

 

 

2,554

 

Net Interest Income Fully Tax Equivalent

F

$

43,042

 

$

39,459

 

$

40,425

 

$

40,673

 

$

38,696

 

 

 

 

 

 

 

 

Annualized Net Interest Margin

E/B

 

3.02

%

 

2.73

%

 

3.08

%

 

3.20

%

 

3.09

%

Annualized Net Interest Margin, Fully Tax Equivalent

F/B

 

3.09

%

 

2.78

%

 

3.14

%

 

3.25

%

 

3.14

%

 

 

 

 

 

 

 

Total Interest Income, Fully Tax Equivalent

 

 

 

 

 

 

Total Interest Income

 

$

45,847

 

$

42,741

 

$

43,885

 

$

44,435

 

$

43,238

 

Tax-exempt investment income

 

 

(2,780

)

 

(2,422

)

 

(1,973

)

 

(1,905

)

 

(1,908

)

Taxable investment income

 

 

3,721

 

 

3,242

 

 

2,641

 

 

2,550

 

 

2,554

 

Total Interest Income, Fully Tax Equivalent

G

$

46,788

 

$

43,561

 

$

44,553

 

$

45,080

 

$

43,884

 

 

 

 

 

 

 

 

Yield on Average Earning Assets, Fully Tax Equivalent

G/B

 

3.36

%

 

3.07

%

 

3.46

%

 

3.60

%

 

3.56

%

 

 

 

 

 

 

 

Interest Income Investment Securities, Fully Tax Equivalent

 

 

 

 

 

 

Interest Income Investment Securities

 

$

11,152

 

$

8,574

 

$

7,032

 

$

6,938

 

$

5,925

 

Tax-exempt investment income

 

 

(2,780

)

 

(2,422

)

 

(1,973

)

 

(1,905

)

 

(1,908

)

Taxable investment Income

 

 

3,721

 

 

3,242

 

 

2,641

 

 

2,550

 

 

2,554

 

Interest Income Investment Securities, Fully Tax Equivalent

H

$

12,093

 

$

9,394

 

$

7,700

 

$

7,583

 

$

6,571

 

 

 

 

 

 

 

Average Investment Securities

I

$

2,127,084

 

$

1,897,303

 

$

1,564,338

 

$

1,364,431

 

$

1,220,254

 

 

 

 

 

 

 

Yield on Investment Securities, Fully Tax Equivalent

H/I

 

2.27

%

 

1.98

%

 

1.97

%

 

2.22

%

 

2.15

%

 

 

 

 

 

 

 

 

Three Months Ended

Core Net Interest Margin

 

June 30, 2022

Mar 31, 2022

Dec 31, 2021

Sept 30, 2021

June 30, 2021

Net interest income (FTE)

 

$

43,042

 

$

39,459

 

$

40,425

 

$

40,673

 

$

38,696

 

Less purchase accounting adjustments

 

 

605

 

 

800

 

 

861

 

 

1,167

 

 

1,052

 

Net interest income, net of purchase accounting adj

J

$

42,437

 

$

38,659

 

$

39,564

 

$

39,506

 

$

37,644

 

 

 

 

 

 

 

 

Total average earning assets

 

$

5,573,163

 

$

5,669,057

 

$

5,155,536

 

$

5,005,093

 

$

4,924,108

 

Add average balance of loan valuation discount

 

 

3,085

 

 

3,836

 

 

4,353

 

 

5,252

 

 

6,373

 

Avg earning assets, excluding loan valuation discount

K

$

5,576,248

 

$

5,672,893

 

$

5,159,889

 

$

5,010,345

 

$

4,930,481

 

 

 

 

 

 

 

 

Core net interest margin

J/K

 

3.04

%

 

2.73

%

 

3.07

%

 

3.15

%

 

3.05

%

 

 

Three Months Ended

Efficiency Ratio

 

June 30, 2022

Mar 31, 2022

Dec 31, 2021

Sept 30, 2021

June 30, 2021

Operating Expense

 

 

 

 

 

 

Total non-interest expense

 

$

30,955

 

$

28,590

 

$

30,789

 

$

29,053

 

$

27,452

 

Pre-tax non-operating expenses

 

 

(1,337

)

 

(408

)

 

(1,602

)

 

(1,405

)

 

-

 

Adjusted Operating Expense

L

$

29,618

 

$

28,182

 

$

29,187

 

$

27,648

 

$

27,452

 

 

 

 

 

 

 

 

Operating Revenue

 

 

 

 

 

 

Net interest income, FTE

 

$

43,042

 

$

39,459

 

$

40,425

 

$

40,673

 

$

38,696

 

Total non-interest income

 

 

8,664

 

 

11,157

 

 

9,593

 

 

9,586

 

 

8,822

 

Pre-tax non-operating items

 

 

(336

)

 

(2,331

)

 

(1,300

)

 

(1,429

)

 

-

 

Adjusted Operating Revenue

M

$

51,370

 

$

48,285

 

$

48,718

 

$

48,830

 

$

47,518

 

 

 

 

 

 

 

 

Efficiency Ratio, operating

L/M

 

57.66

%

 

58.37

%

 

59.91

%

 

56.62

%

 

57.77

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Return Ratios

 

June 30, 2022

Mar 31, 2022

Dec 31, 2021

Sept 30, 2021

June 30, 2021

Net income available to common shareholders

N

$

15,753

 

$

16,829

 

$

15,791

 

$

16,132

 

$

15,600

 

Acquisition and charter conversion charges

 

 

1,172

 

 

408

 

 

1,602

 

 

5

 

 

-

 

Tax on acquisition and charter conversion charges

 

 

(296

)

 

(103

)

 

(405

)

 

(1

)

 

-

 

Bargain purchase gain and loss on sale of fixed assets

 

 

(165

)

 

-

 

 

(1,300

)

 

397

 

 

-

 

Tax on bargain purchase gain and loss on sale of fixed assets

 

 

41

 

 

-

 

 

329

 

 

(100

)

 

-

 

Treasury awards

 

 

(171

)

 

(702

)

 

-

 

 

(1,826

)

 

-

 

Tax on Treasury awards

 

 

43

 

 

178

 

 

-

 

 

462

 

 

-

 

Charitable contributions related to Treasury awards

 

 

165

 

 

-

 

 

-

 

 

1,400

 

 

-

 

Tax on charitable contributions related to Treasury awards

 

 

(42

)

 

-

 

 

-

 

 

(354

)

 

-

 

BOLI income from death proceeds

 

 

-

 

 

(1,630

)

 

-

 

 

-

 

 

-

 

Net earnings available to common shareholders, operating

O

$

16,500

 

$

14,980

 

$

16,017

 

$

16,115

 

$

15,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Tax Pre-Provision Operating Earnings

 

 

 

 

 

 

Earnings before income taxes

P

$

19,210

 

$

21,206

 

$

19,665

 

$

20,561

 

$

19,420

 

Acquisition and charter conversion charges

 

 

1,172

 

 

408

 

 

1,602

 

 

5

 

 

-

 

Provision for loan losses

 

 

600

 

 

-

 

 

(1,104

)

 

-

 

 

-

 

Bargain purchase gain and loss on sale of fixed assets

 

 

(165

)

 

-

 

 

(1,300

)

 

397

 

 

-

 

Treasury Awards

 

 

(171

)

 

(702

)

 

-

 

 

(1,826

)

 

-

 

Charitable contributions related to Treasury awards

 

 

165

 

 

-

 

 

-

 

 

1,400

 

 

-

 

BOLI income from death proceeds

 

 

-

 

 

(1,630

)

 

-

 

 

-

 

 

-

 

Pre-Tax, Pre-Provision Operating Earnings

Q

$

20,811

 

$

19,282

 

$

18,863

 

$

20,537

 

$

19,420

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized return on avg assets

N/A

 

1.03

%

 

1.09

%

 

1.12

%

 

1.17

%

 

1.14

%

Annualized return on avg assets, oper

O/A

 

1.08

%

 

0.97

%

 

1.13

%

 

1.17

%

 

1.14

%

Annualized pre-tax, pre-provision, oper

Q/A

 

1.36

%

 

1.24

%

 

1.33

%

 

1.49

%

 

1.42

%

Annualized return on avg common equity, oper

O/C

 

11.12

%

 

8.99

%

 

9.53

%

 

9.70

%

 

9.63

%

Annualized return on avg tangible common equity, operating

O/D

 

16.14

%

 

12.46

%

 

12.80

%

 

13.44

%

 

13.51

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage Department

 

 

 

 

 

 

Net Interest Income after provision for credit losses

 

$

88

 

$

85

 

$

97

 

$

92

 

$

113

 

Loan fee income

 

 

1,227

 

 

1,230

 

 

1,556

 

 

1,732

 

 

2,372

 

Salaries and employee benefits

 

 

(1,138

)

 

(1,181

)

 

(1,171

)

 

(995

)

 

(1,165

)

Other non-interest expense

 

 

(140

)

 

(149

)

 

(125

)

 

(131

)

 

(131

)

Earnings (Loss) before income taxes

 

$

37

 

$

(15

)

$

357

 

$

698

 

$

1,189

 

 

Contacts

M. Ray “Hoppy” Cole

Chief Executive Officer

Dee Dee Lowery

Chief Financial Officer

(601) 268-8998

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