The First Bancshares, Inc. Reports Results for Third Quarter ended September 30, 2023; Increases Quarterly Dividend 4%

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 September 30, 2023.

Highlights for the Quarter:

  • Net income available to common shareholders totaled $24.4 million for the quarter ended September 30, 2023, representing an increase of 2.4% when compared to $23.8 million for the quarter ended June 30, 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) decreased $2.8 million, or 10.4% to $24.0 million for the quarter ended September 30, 2023 as compared to $26.8 million for the quarter ended June 30, 2023.
  • Total loans increased $78.9 million for the quarter ended September 30, 2023, representing net growth of 6.3% on an annualized basis, as compared to the quarter ended June 30, 2023.
  • Annualized net interest margin decreased 29 basis points to 3.47% for the quarter ended September 30, 2023 from 3.76% for the quarter ended June 30, 2023 due to the reduction of accretion income as well as increased deposit cost.
  • Core net interest margin decreased 16 basis points during the quarter ended September 30, 2023 from 3.43% to 3.27%.
  • Cost of deposits averaged 121 basis points for the third quarter of 2023 compared to 91 basis points for the second quarter 2023.
  • During the quarter ended September 30, 2023, the Company received a $6.2 million award from the U.S. Treasury Equitable Recovery Program.
  • Past dues loans to total loans were $15.7 million or 0.31% for the quarter ending September 30, 2023, compared to $12.6 million, or 0.25% for the quarter ending June 30, 2023, and $11.6 million, or 0.31% for the quarter ending September 30, 2022.
  • Annualized quarter-to-date net charge-offs and recoveries to total loans were $49 thousand, or 0.004% for the quarter ending September 30, 2023, compared to $837 thousand, or 0.07% for the quarter ending June 30, 2023 and a net recovery of $353 thousand, or (0.04%) for the quarter ending September 30, 2022.
  • Nonperforming assets to total assets were $22.4 million, or 0.28% for the quarter ending September 30, 2023, compared to $21.6 million, or 0.28% for the quarter ending June 30, 2023, and $26.7 million, 0.41% for the quarter ending September 30, 2022.
  • 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, “The third quarter results demonstrated another solid performance in a difficult operating environment. We were pleased to see positive loan growth of 6.3%, on an annualized basis, for the quarter. Credit metrics remained strong with low past dues and charge-offs with no material increase in non-performing assets. Deposit costs accelerated a bit, increasing 30 basis points to 1.21% but on a relative basis remain well contained with a cycle to date interest bearing beta of 31%."

Quarterly Earnings

Net income available to common shareholders totaled $24.4 million for the quarter ended September 30, 2023, an increase of $0.6 million, or 2.4%, when compared to $23.8 million for the quarter ended June 30, 2023.

Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) decreased $2.8 million, or 10.4%, to $24.0 million for quarter ended September 30, 2023 as compared to $26.8 million for the quarter ended June 30, 2023. Accretion income decreased $2.3 million as well as increased deposit costs of $4.7 million contributed to the decrease.

The Company recorded a provision for credit losses of $1.0 million for the quarter ended September 30, 2023 and $1.3 million for the quarter ended June 30, 2023.

Earnings Per Share

For the third quarter of 2023, diluted earnings per share were $0.77 compared to $0.75 for the second quarter of 2023 and $0.61 for the third quarter of 2022.

Diluted earnings per share, operating (non-GAAP) were $0.76 for the third quarter of 2023 compared to $0.85 for the second quarter of 2023 and $0.85 for the third quarter of 2022.

Effective January 1, 2023, the Company issued 6,920,422 shares of its common stock in conjunction with the closing of the acquisition of Heritage Southeast Bank ("Heritage Bank"). Effective August 1, 2022, the Company issued 3,498,936 shares of its common stock in conjunction with the closing of the acquisition of Beach Bancorp, Inc. ("Beach Bank").

Balance Sheet

Consolidated assets increased $22.2 million to $7.884 billion at September 30, 2023 from $7.862 billion at June 30, 2023. Loans increased $78.9 million, or 1.6%, for the quarterly comparison.

Total loans were $5.090 billion for the quarter ended September 30, 2023, as compared to $5.011 billion for the quarter ended June 30, 2023, and $3.719 billion for the quarter ended September 30, 2022, representing an increase of $78.9 million, or 1.6%, for the sequential quarter comparison, and an increase of $1.370 billion, or 36.8%, for the prior year quarterly comparison. During January 2023, loans totaling $1.159 billion, net of purchase accounting adjustments, were recorded from the Heritage Bank acquisition.

Total loans increased $78.9 million, or 1.6% as compared to the quarter ended June 30, 2023, or 6.3% on an annualized basis.

Excluding the acquired Heritage Bank loans, total loans increased $211.4 million, or 5.7% compared to the quarter ended September 30, 2022.

Total deposits were $6.480 billion for the quarter ended September 30, 2023, as compared to $6.492 billion for the quarter ended June 30, 2023, and $5.551 billion for the quarter ended September 30, 2022, representing a decrease of $12.2 million, or 0.2%, for the sequential quarter comparison, and an increase of $928.7 million, or 16.7%, for the prior year quarterly comparison. During January 2023, deposits totaling $1.392 billion, net of purchase accounting adjustments, were acquired in the Heritage Bank acquisition.

Deposits decreased $12.2 million, or 0.2% for the prior quarter comparison. Excluding an increase in brokered deposits of $110.0 million, deposits decreased $122.2 million, or 1.9% for the prior quarter comparison. Seasonal fluctuations and public funds account for $51.7 million of the decrease in deposits.

Book value per share decreased to $28.57 at September 30, 2023 from $28.64 at June 30, 2023.

Tangible book value per share (non-GAAP) remained unchanged at $17.62 at September 30, 2023 and at June 30, 2023. The balance in accumulated other comprehensive income (loss) increased $20.0 million to $165.2 million at September 30, 2023 from $145.2 million at June 30, 2023.

Asset Quality

Nonperforming assets totaled $22.4 million at September 30, 2023, an increase of $0.8 million compared to $21.6 million at June 30, 2023 and a decrease of $4.3 million compared to $26.7 million at September 30, 2022.

Nonaccrual loans totaled $17.4 million, an increase of $1.4 million as compared to June 30, 2023 and an increase of $1.6 million as compared to September 30, 2022.

The ratio of the allowance for credit losses (ACL) to total loans was 1.05% at September 30, 2023, 1.05% at June 30, 2023 and 1.03% at September 30, 2022. The ratio of annualized net charge-offs (recoveries) to total loans was 0.004% for the quarter ended September 30, 2023 compared to 0.07% for the quarter ended June 30, 2023 and (0.04%) for the quarter ended September 30, 2022.

Third Quarter 2023 vs Second Quarter 2023 Earnings Comparison

Net income available to common shareholders for the third quarter of 2023 increased $0.6 million to $24.4 million compared to $23.8 million for the second 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) decreased $2.8 million, or 10.4%, to $24.0 million for quarter ended September 30, 2023 as compared to $26.8 million for the quarter ended June 30, 2023. Accretion income decreased $2.3 million as well as increased deposit costs of $4.7 million contributed to the decrease.

Net interest income for the third quarter of 2023 was $60.7 million as compared to $66.0 million for the second quarter of 2023, a decrease of $5.3 million. The decrease was largely due to the decrease in accretion of purchase accounting adjustments of $2.3 million as well as increased interest expense of $4.8 million partially offset by an increase in interest income of $1.7 million.

Third quarter 2023 net interest margin of 3.47% included 25 basis points related to purchase accounting adjustments compared to 3.76% for the second quarter in 2023, which included 37 basis points related to purchase accounting adjustments.

Core net interest margin decreased 16 basis points to 3.27% for the third quarter of 2023 from 3.43% for the second quarter of 2023.

Investment securities totaled $1.836 billion, or 23.3% of total assets at September 30, 2023, compared to $1.898 billion, or 24.1% of total assets at June 30, 2023. The average balance of investment securities decreased $61.2 million in sequential-quarter comparison. The average tax equivalent yield on investment securities (non-GAAP) increased 3 basis points to 2.26% from 2.23% in sequential-quarter comparison. The investment portfolio had a net unrealized loss of $184.9 million at September 30, 2023 as compared to a net unrealized loss of $157.6 million at June 30, 2023.

The FTE average yield on all earning assets (non-GAAP) decreased in sequential-quarter comparison from 4.91% to 4.90%. Interest expense on average interest bearing liabilities increased 40 basis points from 1.65% for the second quarter of 2023 to 2.05% for the third quarter of 2023.

Cost of all deposits averaged 121 basis points for the third quarter of 2023 compared to 91 basis points for the second quarter of 2023. This increase was a result of rising interest rates and increased competition for deposits.

Non-interest income increased $6.9 million from $12.4 million in the second quarter of 2023 to $19.3 million in the third quarter of 2023, primarily attributable to a U.S. Treasury award of $6.2 million.

Non-interest expense for the third quarter of 2023 was $47.7 million compared to $46.9 million for the second quarter of 2023, an increase of $0.8 million, attributed to the expenses of $5.2 million related to the U.S. Treasury awards and was partially offset by a decrease in acquisition charges of $3.5 million.

Third Quarter 2023 vs. Third Quarter 2022 Earnings Comparison

Net income available to common shareholders for the third quarter of 2023 totaled $24.4 million compared to $14.0 million for the third quarter of 2022, an increase of $10.3 million or 73.5%.

Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) increased $4.4 million, or 22.4%, to $24.0 million for quarter ended September 30, 2023, as compared to $19.6 million for the quarter ended September 30, 2022. This increase is attributable to net income associated from the acquisitions of Heritage Bank and Beach Bank.

Net interest income for the third quarter of 2023 was $60.7 million, an increase of $11.6 million or 23.5% when compared to the third quarter of 2022. Fully tax equivalent (“FTE”) net interest income (non-GAAP) totaled $61.7 million and $50.1 million for the third quarter of 2023 and 2022, respectively. Purchase accounting adjustments increased $3.1 million for the third quarter comparisons. The increase was largely due to increased interest rates as well as the acquisitions of Beach Bank and Heritage Bank.

Third quarter of 2023 net interest margin was 3.47%, which included 25 basis points related to purchase accounting adjustments compared to 3.43% for the same 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) decreased 16 basis points in prior year quarterly comparison primarily due to an increase in rates on interest bearing liabilities.

Non-interest income increased $10.3 million for the third quarter of 2023 as compared to the third quarter of 2022. This increase was attributed to increases in service charges on deposit accounts and interchange fee income of $3.4 million as well as the $6.2 million award from the U.S. Treasury.

Third quarter 2023 non-interest expense was $47.7 million, an increase of $11.8 million, or 32.9% as compared to the third quarter of 2022. This increase was attributed to an increase of $6.3 million in charges related to the ongoing operations of Beach Bank and Heritage Bank, increased FDIC premiums of $0.7 million, increased amortization of core deposit intangibles of $1.2 million, and $5.2 million related to the U.S. Treasury awards.

Investment securities totaled $1.836 billion, or 23.3% of total assets at September 30, 2023, compared to $2.004 billion, or 31.0% of total assets at September 30, 2022. For the third quarter of 2023 compared to the third quarter of 2022, the average balance of investment securities decreased $208.6 million. The average tax equivalent yield on investment securities (non-GAAP) increased 4 basis points to 2.26% from 2.22% in the prior year quarterly comparison. The investment portfolio had a net unrealized loss of $184.9 million at September 30, 2023 as compared to a net unrealized loss of $216.9 million at September 30, 2022.

The average yield on all earning assets increased 114 basis points in prior year quarterly comparison, from 3.76% for the third quarter of 2022 to 4.90% for the third quarter of 2023. Interest expense on average interest bearing liabilities increased 157 basis points from 0.48% for the third quarter of 2022 to 2.05% for the third quarter of 2023.

Cost of all deposits averaged 121 basis points for the third quarter of 2023 compared to 19 basis points for the third quarter of 2022.

Year-to-Date Earnings Comparison

In the year-over-year comparison, net income available to common shareholders increased $17.8 million, or 38.1%, from $46.6 million for the nine months ended September 30, 2022, to $64.4 million for the same period ended September 30, 2023.

Net interest income was $191.7 million for the nine months ended September 30, 2023, an increase of $61.8 million as compared to the same period ended September 30, 2022, primarily due to interest income earned on a higher volume of loans (including loans acquired from Heritage Bank and Beach Bank).

Non-interest income was $44.4 million for the nine months ended September 30, 2023, an increase of $15.5 million as compared to the same period ended September 30, 2022. Service charges on deposit accounts accounted for $4.4 million of the increase as well as $4.7 million in interchange fee income and $5.3 million increase in awards from the U.S. Treasury.

Non-interest expense was $140.3 million for the nine months ended September 30, 2023, an increase of $44.8 million as compared to the same period ended September 30, 2022. The increase was partially attributable to $3.3 million in acquisition and charter conversion charges and $27.2 million in increased operating expenses related to the acquisitions of Beach Bank and Heritage Bank as well as $5.2 million in expenses associated with the U.S. Treasury awards and increases in FDIC premiums of $1.0 million and a $3.8 million increase in core deposit amortization for the nine months ended September 30, 2023.

Declaration of Cash Dividend

The Company announced that its Board of Directors declared a cash dividend of $0.24 per share, a 4% increase over previous quarter, per share to be paid on its common stock on November 24, 2023 to shareholders of record as of the close of business on November 8, 2023.

Conference Call

The Company will host a conference call for analysts and investors to discuss the Company’s financial results at 9:00 a.m. Central Time on Thursday, October 26, 2023. Investors and analysts may participate by clicking on the Participant Conference Link: https://register.vevent.com/register/BI68bf3aa848aa45e49109eb1ad52aff4f. 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. 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

9/30/23

 

Quarter

Ended

6/30/23

 

Quarter

Ended

3/31/23

 

Quarter

Ended

12/31/22

 

Quarter

Ended

9/30/22

Total Interest Income

$

85,681

 

 

$

86,194

 

 

$

80,338

 

 

$

57,923

 

 

$

53,874

 

Total Interest Expense

 

24,977

 

 

 

20,164

 

 

 

15,412

 

 

 

10,002

 

 

 

4,726

 

Net Interest Income

 

60,704

 

 

 

66,030

 

 

 

64,926

 

 

 

47,921

 

 

 

49,148

 

Net Interest Income excluding PPP Fee Income

 

60,703

 

 

 

66,029

 

 

 

64,718

 

 

 

47,899

 

 

 

48,986

 

FTE net interest income*

 

61,696

 

 

 

67,028

 

 

 

65,924

 

 

 

48,916

 

 

 

50,122

 

Provision for credit losses

 

1,000

 

 

 

1,250

 

 

 

11,000

 

 

 

705

 

 

 

4,300

 

Non-interest income

 

19,324

 

 

 

12,423

 

 

 

12,612

 

 

 

8,131

 

 

 

9,022

 

Non-interest expense

 

47,724

 

 

 

46,899

 

 

 

45,670

 

 

 

35,040

 

 

 

35,903

 

Earnings before income taxes

 

31,304

 

 

 

30,304

 

 

 

20,868

 

 

 

20,307

 

 

 

17,967

 

Income tax expense

 

6,944

 

 

 

6,525

 

 

 

4,597

 

 

 

4,012

 

 

 

3,924

 

Net income available to common shareholders

$

24,360

 

 

$

23,779

 

 

$

16,271

 

 

$

16,295

 

 

$

14,043

 

 

 

 

 

 

 

 

 

 

 

PER COMMON SHARE DATA

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

0.78

 

 

$

0.76

 

 

$

0.52

 

 

$

0.68

 

 

$

0.61

 

Diluted earnings per share

 

0.77

 

 

 

0.75

 

 

 

0.52

 

 

 

0.67

 

 

 

0.61

 

Diluted earnings per share, operating*

 

0.76

 

 

 

0.85

 

 

 

0.86

 

 

 

0.71

 

 

 

0.85

 

Quarterly dividends per share

 

0.23

 

 

 

0.22

 

 

 

0.21

 

 

 

0.20

 

 

 

0.19

 

Book value per common share at end of period

 

28.57

 

 

 

28.64

 

 

 

28.58

 

 

 

26.92

 

 

 

25.86

 

Tangible book value per common share at period end*

 

17.62

 

 

 

17.62

 

 

 

17.49

 

 

 

17.97

 

 

 

16.93

 

Market price at end of period

 

26.97

 

 

 

25.84

 

 

 

25.83

 

 

 

32.01

 

 

 

29.87

 

Shares outstanding at period end

 

31,404,231

 

 

 

31,406,220

 

 

 

31,364,973

 

 

 

24,025,762

 

 

 

24,028,120

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

31,405,439

 

 

 

31,378,364

 

 

 

31,309,458

 

 

 

24,027,189

 

 

 

22,861,795

 

Diluted

 

31,609,564

 

 

 

31,591,665

 

 

 

31,541,213

 

 

 

24,168,544

 

 

 

22,979,529

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCE SHEET DATA

 

 

 

 

 

 

 

 

 

Total assets

$

7,873,345

 

 

$

7,882,130

 

 

$

8,003,254

 

 

$

6,446,521

 

 

$

6,372,872

 

Loans and leases

 

5,038,928

 

 

 

4,982,368

 

 

 

4,975,663

 

 

 

3,749,561

 

 

 

3,492,110

 

Total deposits

 

6,466,141

 

 

 

6,501,372

 

 

 

6,816,473

 

 

 

5,515,713

 

 

 

5,503,040

 

Total common equity

 

905,070

 

 

 

901,499

 

 

 

868,995

 

 

 

617,049

 

 

 

630,744

 

Total tangible common equity*

 

560,071

 

 

 

554,792

 

 

 

538,903

 

 

 

408,365

 

 

 

424,873

 

 

 

 

 

 

 

 

 

 

 

SELECTED RATIOS

 

 

 

 

 

 

 

 

 

Annualized return on avg assets (ROA)

 

1.24

%

 

 

1.21

%

 

 

0.81

%

 

 

1.01

%

 

 

0.88

%

Annualized return on avg assets, operating*

 

1.22

%

 

 

1.36

%

 

 

1.36

%

 

 

1.07

%

 

 

1.23

%

Annualized pre-tax, pre-provision, operating*

 

1.62

%

 

 

1.81

%

 

 

1.78

%

 

 

1.38

%

 

 

1.63

%

Annualized return on avg common equity, operating*

 

10.63

%

 

 

11.91

%

 

 

12.48

%

 

 

11.14

%

 

 

12.46

%

Annualized return on avg tangible common equity, operating*

 

17.17

%

 

 

19.35

%

 

 

20.13

%

 

 

16.83

%

 

 

18.49

%

Average loans to average deposits

 

77.93

%

 

 

76.64

%

 

 

72.99

%

 

 

67.98

%

 

 

63.46

%

FTE Net Interest Margin*

 

3.52

%

 

 

3.82

%

 

 

3.69

%

 

 

3.37

%

 

 

3.50

%

Efficiency Ratio

 

58.90

%

 

 

59.02

%

 

 

58.15

%

 

 

61.42

%

 

 

60.70

%

Efficiency Ratio, operating*

 

56.06

%

 

 

53.87

%

 

 

53.32

%

 

 

59.34

%

 

 

54.55

%

*See reconciliation of Non-GAAP financial measures

 

 

 

 

 

 

 

 

 

CREDIT QUALITY

 

 

 

 

 

 

 

 

 

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

 

1.05

%

 

 

1.05

%

 

 

1.06

%

 

 

1.03

%

 

 

1.03

%

Nonperforming assets to tangible equity + ACL

 

3.69

%

 

 

3.57

%

 

 

3.73

%

 

 

3.76

%

 

 

6.01

%

Nonperforming assets to total loans + OREO

 

0.44

%

 

 

0.43

%

 

 

0.45

%

 

 

0.47

%

 

 

0.72

%

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

 

0.004

%

 

 

0.07

%

 

 

0.01

%

 

 

0.004

%

 

 

(0.04

)%

 

 

 

 

 

 

 

 

 

 

THE FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

BALANCE SHEET

September 30,

2023

 

June 30,

2023

 

March 31,

2023

 

December 31,

2022

 

September 30,

2022

Assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

197,632

 

 

$

194,050

 

 

$

333,491

 

 

$

145,315

 

 

$

163,841

 

Securities available for sale

 

1,141,971

 

 

 

1,199,103

 

 

 

1,249,791

 

 

 

1,257,101

 

 

 

1,379,410

 

Securities held to maturity

 

658,524

 

 

 

663,473

 

 

 

678,161

 

 

 

691,484

 

 

 

593,553

 

Other investments

 

35,872

 

 

 

35,725

 

 

 

34,423

 

 

 

33,944

 

 

 

31,060

 

Total investment securities

 

1,836,367

 

 

 

1,898,301

 

 

 

1,962,375

 

 

 

1,982,529

 

 

 

2,004,023

 

Loans held for sale

 

5,960

 

 

 

6,602

 

 

 

4,073

 

 

 

4,443

 

 

 

2,225

 

Total loans

 

5,089,800

 

 

 

5,010,925

 

 

 

4,969,776

 

 

 

3,774,157

 

 

 

3,719,388

 

Allowance for credit losses

 

(53,565

)

 

 

(52,614

)

 

 

(52,450

)

 

 

(38,917

)

 

 

(38,356

)

Loans, net

 

5,036,235

 

 

 

4,958,311

 

 

 

4,917,326

 

 

 

3,735,240

 

 

 

3,681,032

 

Premises and equipment

 

183,740

 

 

 

186,381

 

 

 

186,688

 

 

 

153,068

 

 

 

150,480

 

Other Real Estate Owned

 

4,920

 

 

 

5,588

 

 

 

5,066

 

 

 

4,832

 

 

 

10,328

 

Goodwill and other intangibles

 

343,869

 

 

 

346,104

 

 

 

347,777

 

 

 

214,890

 

 

 

214,708

 

Other assets

 

275,562

 

 

 

266,771

 

 

 

260,520

 

 

 

221,400

 

 

 

228,211

 

Total assets

$

7,884,285

 

 

$

7,862,108

 

 

$

8,017,316

 

 

$

6,461,717

 

 

$

6,454,848

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

Non-interest bearing deposits

$

1,967,661

 

 

$

2,086,666

 

 

$

2,082,441

 

 

$

1,630,203

 

 

$

1,770,848

 

Interest-bearing deposits

 

4,512,364

 

 

 

4,405,601

 

 

 

4,585,515

 

 

 

3,864,201

 

 

 

3,780,450

 

Total deposits

 

6,480,025

 

 

 

6,492,267

 

 

 

6,667,956

 

 

 

5,494,404

 

 

 

5,551,298

 

Borrowings

 

302,000

 

 

 

280,000

 

 

 

250,000

 

 

 

130,100

 

 

 

90,000

 

Subordinated debentures

 

128,300

 

 

 

128,214

 

 

 

154,127

 

 

 

145,027

 

 

 

144,952

 

Other liabilities

 

76,739

 

 

 

62,181

 

 

 

48,806

 

 

 

45,523

 

 

 

47,127

 

Total liabilities

 

6,987,064

 

 

 

6,962,662

 

 

 

7,120,889

 

 

 

5,815,054

 

 

 

5,833,377

 

Total shareholders’ equity

 

897,221

 

 

 

899,446

 

 

 

896,427

 

 

 

646,663

 

 

 

621,471

 

Total liabilities and shareholders’ equity

$

7,884,285

 

 

$

7,862,108

 

 

$

8,017,316

 

 

$

6,461,717

 

 

$

6,454,848

 

 

THE FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT

Three Months Ended

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

Interest Income:

 

 

 

 

 

 

 

 

 

Loans, including fees

$

70,349

 

 

$

68,057

 

 

$

64,264

 

$

45,583

 

 

$

41,456

 

Investment securities

 

10,614

 

 

 

10,815

 

 

 

11,707

 

 

11,251

 

 

 

11,598

 

Accretion of purchase accounting adjustments

 

4,277

 

 

 

6,533

 

 

 

3,469

 

 

1,086

 

 

 

818

 

Other interest income

 

441

 

 

 

789

 

 

 

898

 

 

3

 

 

 

2

 

Total interest income

 

85,681

 

 

 

86,194

 

 

 

80,338

 

 

57,923

 

 

 

53,874

 

Interest Expense:

 

 

 

 

 

 

 

 

 

Deposits

 

19,314

 

 

 

14,613

 

 

 

12,183

 

 

7,206

 

 

 

2,863

 

Borrowings

 

3,556

 

 

 

3,264

 

 

 

959

 

 

1,015

 

 

 

92

 

Subordinated debentures

 

1,849

 

 

 

2,138

 

 

 

2,176

 

 

1,946

 

 

 

1,886

 

Accretion of purchase accounting adjustments

 

258

 

 

 

149

 

 

 

94

 

 

(165

)

 

 

(115

)

Total interest expense

 

24,977

 

 

 

20,164

 

 

 

15,412

 

 

10,002

 

 

 

4,726

 

Net interest income

 

60,704

 

 

 

66,030

 

 

 

64,926

 

 

47,921

 

 

 

49,148

 

Provision for credit losses

 

1,000

 

 

 

1,250

 

 

 

11,000

 

 

705

 

 

 

4,300

 

Net interest income after provision for credit losses

 

59,704

 

 

 

64,780

 

 

 

53,926

 

 

47,216

 

 

 

44,848

 

 

 

 

 

 

 

 

 

 

 

Non-interest Income:

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

3,646

 

 

 

3,425

 

 

 

3,657

 

 

2,277

 

 

 

2,219

 

Mortgage Income

 

878

 

 

 

773

 

 

 

633

 

 

625

 

 

 

1,221

 

Interchange Fee Income

 

5,280

 

 

 

4,543

 

 

 

4,498

 

 

3,093

 

 

 

3,310

 

Gain (Loss) on securities, net

 

2

 

 

 

(48

)

 

 

 

 

 

 

 

1

 

Treasury Awards

 

6,197

 

 

 

 

 

 

 

 

 

 

 

 

Loss on sale of premises and equipment

 

(104

)

 

 

 

 

 

 

 

 

 

 

 

Other charges and fees

 

3,425

 

 

 

3,730

 

 

 

3,824

 

 

2,136

 

 

 

2,271

 

Total non-interest income

 

19,324

 

 

 

12,423

 

 

 

12,612

 

 

8,131

 

 

 

9,022

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

22,807

 

 

 

23,315

 

 

 

23,572

 

 

19,934

 

 

 

19,099

 

Occupancy expense

 

5,343

 

 

 

5,041

 

 

 

5,296

 

 

4,305

 

 

 

3,826

 

FDIC/OCC premiums

 

1,158

 

 

 

758

 

 

 

670

 

 

514

 

 

 

496

 

Marketing

 

559

 

 

 

45

 

 

 

158

 

 

135

 

 

 

50

 

Amortization of core deposit intangibles

 

2,385

 

 

 

2,391

 

 

 

2,402

 

 

1,309

 

 

 

1,227

 

Other professional services

 

1,499

 

 

 

1,570

 

 

 

1,068

 

 

971

 

 

 

1,256

 

Acquisition and charter conversion charges

 

588

 

 

 

4,101

 

 

 

3,793

 

 

1,190

 

 

 

3,640

 

Other non-interest expense

 

13,385

 

 

 

9,678

 

 

 

8,711

 

 

6,682

 

 

 

6,309

 

Total non-interest expense

 

47,724

 

 

 

46,899

 

 

 

45,670

 

 

35,040

 

 

 

35,903

 

Earnings before income taxes

 

31,304

 

 

 

30,304

 

 

 

20,868

 

 

20,307

 

 

 

17,967

 

Income tax expense

 

6,944

 

 

 

6,525

 

 

 

4,597

 

 

4,012

 

 

 

3,924

 

Net income available to common shareholders

$

24,360

 

 

$

23,779

 

 

$

16,271

 

$

16,295

 

 

$

14,043

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

0.77

 

 

$

0.75

 

 

$

0.52

 

$

0.67

 

 

$

0.61

 

Diluted earnings per common share, operating*

$

0.76

 

 

$

0.85

 

 

$

0.86

 

$

0.71

 

 

$

0.85

 

 

 

 

 

 

 

 

 

 

 

*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

2023

 

2022

Interest Income:

 

 

 

Loans, including fees

$

202,460

 

 

$

107,172

 

PPP loan fee income

 

210

 

 

 

1,696

 

Investment securities

 

33,136

 

 

 

31,324

 

Accretion of purchase accounting adjustments

 

14,279

 

 

 

2,223

 

Other interest income

 

2,128

 

 

 

47

 

Total interest income

 

252,213

 

 

 

142,462

 

Interest Expense:

 

 

 

Deposits

 

46,110

 

 

 

7,089

 

Borrowings

 

7,779

 

 

 

92

 

Subordinated debentures

 

6,163

 

 

 

5,546

 

Amortization of purchase accounting adjustments

 

501

 

 

 

(152

)

Total interest expense

 

60,553

 

 

 

12,575

 

Net interest income

 

191,660

 

 

 

129,887

 

Provision for credit losses

 

13,250

 

 

 

4,900

 

Net interest income after provision for credit losses

 

178,410

 

 

 

124,987

 

 

 

 

 

Non-interest Income:

 

 

 

Service charges on deposit accounts

 

10,728

 

 

 

6,297

 

Mortgage Income

 

2,284

 

 

 

3,678

 

Interchange Fee Income

 

14,321

 

 

 

9,609

 

Gain (loss) on securities, net

 

(46

)

 

 

(82

)

Treasury Awards

 

6,197

 

 

 

873

 

Bargain Purchase Gain and gain on sale of premises and equipment

 

559

 

 

 

165

 

BOLI income from death proceeds

 

 

 

 

1,630

 

Other charges and fees

 

10,316

 

 

 

6,673

 

Total non-interest income

 

44,359

 

 

 

28,843

 

 

 

 

 

Non-interest expense:

 

 

 

Salaries and employee benefits

 

69,695

 

 

 

53,135

 

Occupancy expense

 

15,680

 

 

 

11,530

 

FDIC/OCC premiums

 

2,586

 

 

 

1,608

 

Marketing

 

762

 

 

 

258

 

Amortization of core deposit intangibles

 

7,178

 

 

 

3,355

 

Other professional services

 

4,137

 

 

 

2,587

 

Acquisition & charter conversion charges

 

8,482

 

 

 

5,220

 

Other non-interest expense

 

31,773

 

 

 

17,755

 

Total Non-interest expense

 

140,293

 

 

 

95,448

 

Earnings before income taxes

 

82,476

 

 

 

58,382

 

Income tax expense

 

18,066

 

 

 

11,758

 

Net income available to common shareholders

 

64,410

 

 

 

46,624

 

 

 

 

 

Diluted earnings per common share

$

2.04

 

 

$

2.17

 

Diluted earnings per common share, operating*

$

2.47

 

 

$

2.38

 

*See reconciliation of Non-GAAP financial measures

 

 

 

 

 

 

 

THE FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(Dollars in thousands)

COMPOSITION OF LOANS

 

September 30,

2023

 

Percent

of Total

 

June 30,

2023

 

March 31,

2023

 

December 31,

2022

 

September 30,

2022

 

Percent

of Total

Commercial, financial and agricultural

 

$

753,120

 

 

14.8

%

 

$

753,415

 

 

$

750,371

 

 

$

506,907

 

 

$

489,225

 

 

13.1

%

Real estate – construction

 

 

633,682

 

 

12.4

%

 

 

634,120

 

 

 

691,285

 

 

 

475,956

 

 

 

481,100

 

 

12.9

%

Real estate – commercial

 

 

2,317,666

 

 

45.5

%

 

 

2,251,710

 

 

 

2,181,384

 

 

 

1,626,066

 

 

 

1,595,944

 

 

42.8

%

Real estate – residential

 

 

1,298,980

 

 

25.5

%

 

 

1,286,343

 

 

 

1,262,244

 

 

 

1,094,204

 

 

 

1,082,488

 

 

29.1

%

Lease Financing Receivable

 

 

1,548

 

 

%

 

 

1,187

 

 

 

2,056

 

 

 

2,118

 

 

 

1,907

 

 

0.1

%

Obligations of States & subdivisions

 

 

29,650

 

 

0.6

%

 

 

31,137

 

 

 

31,652

 

 

 

26,143

 

 

 

25,757

 

 

0.7

%

Consumer

 

 

55,154

 

 

1.1

%

 

 

53,013

 

 

 

50,784

 

 

 

42,763

 

 

 

42,967

 

 

1.2

%

Loans held for sale

 

 

5,960

 

 

0.1

%

 

 

6,602

 

 

 

4,073

 

 

 

4,443

 

 

 

2,225

 

 

0.1

%

Total loans

 

$

5,095,760

 

 

100

%

 

$

5,017,527

 

 

$

4,973,849

 

 

$

3,778,600

 

 

$

3,721,613

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPOSITION OF DEPOSITS

 

September 30,

2023

 

Percent

of Total

 

June 30,

2023

 

March 31,

2023

 

December 31,

2022

 

September 30,

2022

 

Percent

of Total

Non-interest bearing

 

$

1,967,661

 

 

30.4

%

 

$

2,086,666

 

 

$

2,082,441

 

 

$

1,630,203

 

 

$

1,770,848

 

 

31.9

%

NOW and other

 

 

1,962,383

 

 

30.3

%

 

 

2,014,420

 

 

 

2,095,599

 

 

 

1,769,699

 

 

 

1,786,213

 

 

32.2

%

Money Market/Savings

 

 

1,532,822

 

 

23.7

%

 

 

1,565,212

 

 

 

1,678,609

 

 

 

1,368,108

 

 

 

1,423,953

 

 

25.7

%

Time Deposits of less than $250,000

 

 

766,553

 

 

11.8

%

 

 

627,782

 

 

 

562,240

 

 

 

590,564

 

 

 

418,931

 

 

7.5

%

Time Deposits of $250,000 or more

 

 

250,606

 

 

3.8

%

 

 

198,187

 

 

 

249,067

 

 

 

135,830

 

 

 

151,353

 

 

2.7

%

Total Deposits

 

$

6,480,025

 

 

100

%

 

$

6,492,267

 

 

$

6,667,956

 

 

$

5,494,404

 

 

$

5,551,298

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSET QUALITY DATA

 

September 30,

2023

 

 

 

June 30,

2023

 

March 31,

2023

 

December 31,

2022

 

September 30,

2022

 

 

Nonaccrual loans

 

$

17,423

 

 

 

 

$

16,037

 

 

$

17,312

 

 

$

12,591

 

 

$

15,844

 

 

 

Loans past due 90 days and over

 

 

53

 

 

 

 

 

 

 

 

73

 

 

 

289

 

 

 

571

 

 

 

Total nonperforming loans

 

 

17,476

 

 

 

 

 

16,037

 

 

 

17,385

 

 

 

12,880

 

 

 

16,415

 

 

 

Other real estate owned

 

 

4,920

 

 

 

 

 

5,588

 

 

 

5,066

 

 

 

4,832

 

 

 

10,328

 

 

 

Total nonperforming assets

 

$

22,396

 

 

 

 

$

21,625

 

 

$

22,451

 

 

$

17,712

 

 

$

26,743

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

 

0.28

%

 

 

 

 

0.28

%

 

 

0.28

%

 

 

0.27

%

 

 

0.41

%

 

 

Nonperforming assets to total loans + OREO

 

 

0.44

%

 

 

 

 

0.43

%

 

 

0.45

%

 

 

0.47

%

 

 

0.72

%

 

 

ACL to nonperforming loans

 

 

306.51

%

 

 

 

 

328.08

%

 

 

301.70

%

 

 

302.15

%

 

 

233.66

%

 

 

ACL to total loans

 

 

1.05

%

 

 

 

 

1.05

%

 

 

1.06

%

 

 

1.03

%

 

 

1.03

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

49

 

 

 

 

$

837

 

 

$

142

 

 

$

39

 

 

$

(353

)

 

 

Annualized QTD net chg-offs (recs) to loans

 

 

0.004

%

 

 

 

 

0.07

%

 

 

0.01

%

 

 

0.004

%

 

 

(0.04

%)

 

 

 

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

September 30, 2023

 

June 30, 2023

 

March 31, 2023

 

December 31, 2022

 

September 30, 2022

 

 

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

$

1,419,343

$

7,685

2.17

%

 

$

1,473,166

$

7,867

2.14

%

 

$

1,565,623

$

8,758

2.24

%

 

$

1,522,953

$

8,312

2.18

%

 

$

1,612,066

$

8,723

2.16

%

Tax-exempt securities

 

463,329

 

3,921

3.39

%

 

 

470,742

 

3,946

3.35

%

 

 

462,718

 

3,946

3.41

%

 

 

453,651

 

3,934

3.47

%

 

 

479,168

 

3,849

3.21

%

Total investment securities

 

1,882,672

 

11,606

2.47

%

 

 

1,943,908

 

11,813

2.43

%

 

 

2,028,341

 

12,704

2.51

%

 

 

1,976,604

 

12,246

2.48

%

 

 

2,091,234

 

12,572

2.40

%

Int bearing dep in other banks

 

79,448

 

441

2.22

%

 

 

93,464

 

789

3.38

%

 

 

146,663

 

898

2.45

%

 

 

72,910

 

3

0.02

%

 

 

143,867

 

2

0.01

%

Loans

 

5,038,928

 

74,626

5.92

%

 

 

4,982,368

 

74,590

5.99

%

 

 

4,975,663

 

67,734

5.45

%

 

 

3,749,561

 

46,670

4.98

%

 

 

3,492,110

 

42,274

4.84

%

Total interest earning assets

 

7,001,048

 

86,673

4.95

%

 

 

7,019,740

 

87,192

4.97

%

 

 

7,150,667

 

81,336

4.55

%

 

 

5,799,075

 

58,919

4.06

%

 

 

5,727,211

 

54,848

3.83

%

Other assets

 

872,297

 

 

 

 

862,390

 

 

 

 

852,587

 

 

 

 

647,446

 

 

 

 

645,661

 

 

Total assets

$

7,873,345

 

 

 

$

7,882,130

 

 

 

$

8,003,254

 

 

 

$

6,446,521

 

 

 

$

6,372,872

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

$

4,459,869

$

19,572

1.76

%

 

$

4,465,800

$

14,762

1.32

%

 

$

4,738,076

$

12,277

1.04

%

 

$

3,801,632

$

7,041

0.74

%

 

$

3,777,059

$

2,748

0.29

%

Borrowed Funds

 

296,963

 

3,556

4.79

%

 

 

277,531

 

3,264

4.70

%

 

 

77,098

 

959

4.98

%

 

 

108,881

 

1,015

3.73

%

 

 

13,261

 

92

2.78

%

Subordinated debentures

 

128,251

 

1,849

5.77

%

 

 

145,418

 

2,138

5.88

%

 

 

155,084

 

2,176

5.61

%

 

 

144,985

 

1,946

5.37

%

 

 

144,910

 

1,886

5.21

%

Total interest bearing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

liabilities

 

4,885,083

 

24,977

2.05

%

 

 

4,888,749

 

20,164

1.65

%

 

 

4,970,258

 

15,412

1.24

%

 

 

4,055,498

 

10,002

0.99

%

 

 

3,935,230

 

4,726

0.48

%

Other liabilities

 

2,083,192

 

 

 

 

2,091,882

 

 

 

 

2,164,001

 

 

 

 

1,773,974

 

 

 

 

1,806,898

 

 

Shareholders' equity

 

905,070

 

 

 

 

901,499

 

 

 

 

868,995

 

 

 

 

617,049

 

 

 

 

630,744

 

 

Total liabilities and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

shareholders' equity

$

7,873,345

 

 

 

$

7,882,130

 

 

 

$

8,003,254

 

 

 

$

6,446,521

 

 

 

$

6,372,872

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income (FTE)*

 

$

61,696

2.91

%

 

 

$

67,028

3.32

%

 

 

$

65,924

3.31

%

 

 

$

48,917

3.08

%

 

 

$

50,122

3.35

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (FTE)*

 

 

3.52

%

 

 

 

3.82

%

 

 

 

3.69

%

 

 

 

3.37

%

 

 

 

3.50

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core net interest margin*

 

 

3.27

%

 

 

 

3.43

%

 

 

 

3.47

%

 

 

 

3.29

%

 

 

 

3.44

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*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

Sept 30, 2023

 

June 30, 2023

 

Mar 31, 2023

 

Dec 31, 2022

 

Sept 30, 2022

Book value per common share

$

28.57

 

 

$

28.64

 

 

$

28.58

 

 

$

26.92

 

 

$

25.86

 

Effect of intangible assets per share

 

10.95

 

 

 

11.02

 

 

 

11.09

 

 

 

8.95

 

 

 

8.93

 

Tangible book value per common share

$

17.62

 

 

$

17.62

 

 

$

17.49

 

 

$

17.97

 

 

$

16.93

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

$

0.77

 

 

$

0.75

 

 

$

0.52

 

 

$

0.68

 

 

$

0.61

 

Effect of acquisition and charter conversion charges

 

0.02

 

 

 

0.13

 

 

 

0.11

 

 

 

0.05

 

 

 

0.16

 

Tax on acquisition and charter conversion charges

 

(0.01

)

 

 

(0.03

)

 

 

(0.02

)

 

 

(0.02

)

 

 

(0.05

)

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

 

 

 

 

 

 

0.17

 

Tax on initial provision for acquired loans

 

 

 

 

 

 

 

(0.09

)

 

 

 

 

 

(0.04

)

Diluted earnings per share, operating

$

0.76

 

 

$

0.85

 

 

$

0.86

 

 

$

0.71

 

 

$

0.85

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year to Date

 

 

 

 

 

2023

 

 

 

2022

 

 

Diluted earnings per share

 

 

$

2.04

 

 

 

 

$

2.17

 

 

 

Effect of acquisition and charter conversion charges

 

 

 

0.27

 

 

 

 

 

0.24

 

 

 

Tax on acquisition and charter conversion charges

 

 

 

(0.07

)

 

 

 

 

(0.06

)

 

 

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

 

 

 

 

 

 

 

 

(0.01

)

 

 

Effect of Treasury awards

 

 

 

(0.20

)

 

 

 

 

(0.04

)

 

 

Tax on Treasury awards

 

 

 

0.05

 

 

 

 

 

0.01

 

 

 

BOLI income from death proceeds

 

 

 

 

 

 

 

 

(0.08

)

 

 

Effect on contributions/consulting/advertising related to Treasury awards

 

 

 

0.17

 

 

 

 

 

0.01

 

 

 

Tax on contributions/consulting/advertising related to Treasury awards

 

 

 

(0.04

)

 

 

 

 

 

 

 

Initial provision for acquired loans

 

 

 

0.34

 

 

 

 

 

0.18

 

 

 

Tax on initial provision for acquired loans

 

 

 

(0.09

)

 

 

 

 

(0.04

)

 

 

Diluted earnings per share, operating

 

 

$

2.47

 

 

 

 

$

2.38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year to Date

 

 

 

 

 

2023

 

 

 

2022

 

 

Net income available to common shareholders

 

 

$

64,410

 

 

 

 

$

46,624

 

 

 

Acquisition and charter conversion charges

 

 

 

8,482

 

 

 

 

 

5,220

 

 

 

Tax on acquisition and charter conversion charges

 

 

 

(2,146

)

 

 

 

 

(1,320

)

 

 

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

 

 

 

(6,197

)

 

 

 

 

(872

)

 

 

Tax on Treasury awards

 

 

 

1,568

 

 

 

 

 

221

 

 

 

BOLI income from death proceeds

 

 

 

 

 

 

 

 

(1,630

)

 

 

Contributions/consulting/advertising related to Treasury awards

 

 

 

5,190

 

 

 

 

 

165

 

 

 

Tax on contributions/consulting/advertising related to Treasury awards

 

 

 

(1,313

)

 

 

 

 

(42

)

 

 

Initial provision for acquired loans

 

 

 

10,727

 

 

 

 

 

3,855

 

 

 

Tax on initial provision for acquired loans

 

 

 

(2,714

)

 

 

 

 

(976

)

 

 

Net earnings available to common shareholders, operating

 

 

$

78,007

 

 

 

 

$

51,122

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Average Balance Sheet Data

 

Sept 30, 2023

June 30, 2023

Mar 31, 2023

Dec 31, 2022

Sept 30, 2022

Total average assets

A

$

7,873,345

 

$

7,882,130

 

$

8,003,254

 

$

6,446,521

 

$

6,372,872

 

Total average earning assets

B

$

7,001,048

 

$

7,019,740

 

$

7,150,667

 

$

5,799,075

 

$

5,727,211

 

 

 

 

 

 

 

 

Common Equity

C

$

905,070

 

$

901,499

 

$

868,995

 

$

617,049

 

$

630,744

 

Less intangible assets

 

 

344,999

 

 

346,707

 

 

330,092

 

 

208,684

 

 

205,871

 

Total Tangible common equity

D

$

560,071

 

$

554,792

 

$

538,903

 

$

408,365

 

$

424,873

 

 

 

 

 

 

Three Months Ended

Net Interest Income Fully Tax Equivalent

 

Sept 30, 2023

June 30, 2023

Mar 31, 2023

Dec 31, 2022

Sept 30, 2022

Net interest income

E

$

60,704

 

$

66,030

 

$

64,926

 

$

47,921

 

$

49,148

 

Tax-exempt investment income

 

 

(2,929

)

 

(2,948

)

 

(2,948

)

 

(2,939

)

 

(2,875

)

Taxable investment income

 

 

3,921

 

 

3,946

 

 

3,946

 

 

3,934

 

 

3,849

 

Net Interest Income Fully Tax Equivalent

F

$

61,696

 

$

67,028

 

$

65,924

 

$

48,916

 

$

50,122

 

 

 

 

 

 

 

 

Annualized Net Interest Margin

E/B

 

3.47

%

 

3.76

%

 

3.63

%

 

3.31

%

 

3.43

%

Annualized Net Interest Margin, Fully Tax Equivalent

F/B

 

3.52

%

 

3.82

%

 

3.69

%

 

3.37

%

 

3.50

%

 

 

 

 

 

 

 

Total Interest Income, Fully Tax Equivalent

 

 

 

 

 

 

Total Interest Income

R

$

85,681

 

$

86,194

 

$

80,338

 

$

57,923

 

$

53,874

 

Tax-exempt investment income

 

 

(2,929

)

 

(2,948

)

 

(2,948

)

 

(2,939

)

 

(2,875

)

Taxable investment income

 

 

3,921

 

 

3,946

 

 

3,946

 

 

3,934

 

 

3,849

 

Total Interest Income, Fully Tax Equivalent

G

$

86,673

 

$

87,192

 

$

81,336

 

$

58,918

 

$

54,848

 

 

 

 

 

 

 

 

Yield on Average Earning Assets

R/B

 

4.90

%

 

4.91

%

 

4.49

%

 

4.00

%

 

3.76

%

Yield on Average Earning Assets, Fully Tax Equivalent

G/B

 

4.95

%

 

4.97

%

 

4.55

%

 

4.06

%

 

3.83

%

 

 

 

 

 

 

 

Interest Income Investment Securities, Fully Tax Equivalent

 

 

 

 

 

 

Interest Income Investment Securities

S

$

10,614

 

$

10,815

 

$

11,706

 

$

11,251

 

$

11,598

 

Tax-exempt investment income

 

 

(2,929

)

 

(2,948

)

 

(2,948

)

 

(2,939

)

 

(2,875

)

Taxable investment Income

 

 

3,921

 

 

3,946

 

 

3,946

 

 

3,934

 

 

3,849

 

Interest Income Investment Securities, Fully Tax Equivalent

H

$

11,606

 

$

11,813

 

$

12,704

 

$

12,246

 

$

12,572

 

 

 

 

 

 

 

 

Average Investment Securities

I

$

1,882,672

 

$

1,943,908

 

$

2,028,341

 

$

1,976,604

 

$

2,091,234

 

 

 

 

 

 

 

 

Yield on Investment Securities

S/I

 

2.26

%

 

2.23

%

 

2.31

%

 

2.28

%

 

2.22

%

Yield on Investment Securities, Fully Tax Equivalent

H/I

 

2.47

%

 

2.43

%

 

2.51

%

 

2.48

%

 

2.40

%

 

 

 

 

 

 

 

 

 

Three Months Ended

Core Net Interest Margin

 

Sept 30, 2023

June 30, 2023

Mar 31, 2023

Dec 31, 2022

Sept 30, 2022

Net interest income (FTE)

 

$

61,696

 

$

67,028

 

$

65,924

 

$

48,916

 

$

50,122

 

Less purchase accounting adjustments

 

 

4,276

 

 

6,533

 

 

3,469

 

 

1,086

 

 

818

 

Net interest income, net of purchase accounting adj

J

$

57,420

 

$

60,495

 

$

62,455

 

$

47,830

 

$

49,304

 

 

 

 

 

 

 

 

Total average earning assets

 

$

7,001,048

 

$

7,019,740

 

$

7,150,667

 

$

5,799,075

 

$

5,727,211

 

Add average balance of loan valuation discount

 

 

31,269

 

 

38,306

 

 

42,945

 

 

10,928

 

 

2,681

 

Avg earning assets, excluding loan valuation discount

K

$

7,032,317

 

$

7,058,046

 

$

7,193,612

 

$

5,810,003

 

$

5,729,892

 

 

 

 

 

 

 

 

Core net interest margin

J/K

 

3.27

%

 

3.43

%

 

3.47

%

 

3.29

%

 

3.44

%

 

 

 

 

 

 

 

 

 

Three Months Ended

Efficiency Ratio

 

Sept 30, 2023

June 30, 2023

Mar 31, 2023

Dec 31, 2022

Sept 30, 2022

Operating Expense

 

 

 

 

 

 

Total non-interest expense

 

$

47,724

 

$

46,899

 

$

45,670

 

$

35,040

 

$

35,903

 

Pre-tax non-operating expenses

 

 

(5,777

)

 

(4,101

)

 

(3,793

)

 

(1,190

)

 

(3,641

)

Adjusted Operating Expense

L

$

41,947

 

$

42,798

 

$

41,877

 

$

33,850

 

$

32,262

 

 

 

 

 

 

 

 

Operating Revenue

 

 

 

 

 

 

Net interest income, FTE

 

$

61,696

 

$

67,028

 

$

65,924

 

$

48,916

 

$

50,122

 

Total non-interest income

 

 

19,324

 

 

12,423

 

 

12,612

 

 

8,131

 

 

9,022

 

Pre-tax non-operating items

 

 

(6,197

)

 

 

 

 

 

 

 

 

Adjusted Operating Revenue

M

$

74,823

 

$

79,451

 

$

78,536

 

$

57,047

 

$

59,144

 

 

 

 

 

 

 

 

Efficiency Ratio, operating

L/M

 

56.06

%

 

53.87

%

 

53.32

%

 

59.34

%

 

54.55

%

 

 

 

 

 

 

 

 

 

Three Months Ended

Return Ratios

 

Sept 30, 2023

June 30, 2023

Mar 31, 2023

Dec 31, 2022

Sept 30, 2022

Net income available to common shareholders

N

$

24,360

 

$

23,779

 

$

16,271

 

$

16,295

 

$

14,043

 

Acquisition and charter conversion charges

 

 

588

 

 

4,101

 

 

3,793

 

 

1,190

 

 

3,641

 

Tax on acquisition and charter conversion charges

 

 

(149

)

 

(1,037

)

 

(960

)

 

(301

)

 

(920

)

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

 

 

 

 

3,855

 

Tax on initial provision for acquired loans

 

 

 

 

 

 

(2,714

)

 

 

 

(976

)

Net earnings available to common shareholders, operating

O

$

24,047

 

$

26,843

 

$

27,117

 

$

17,184

 

$

19,643

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Pre-Tax Pre-Provision Operating Earnings

 

Sept 30, 2023

June 30, 2023

Mar 31, 2023

Dec 31, 2022

Sept 30, 2022

Earnings before income taxes

P

$

31,304

 

$

30,304

 

$

20,868

 

$

20,307

 

$

17,967

 

Acquisition and charter conversion charges

 

 

588

 

 

4,101

 

 

3,793

 

 

1,190

 

 

3,641

 

Provision for credit losses

 

 

1,000

 

 

1,250

 

 

11,000

 

 

705

 

 

4,300

 

Treasury awards

 

 

(6,197

)

 

 

 

 

 

 

 

 

Contributions/consulting/advertising related to Treasury awards

 

 

5,190

 

 

 

 

 

 

 

 

 

Pre-Tax, Pre-Provision Operating Earnings

Q

$

31,885

 

$

35,655

 

$

35,661

 

$

22,202

 

$

25,908

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized return on avg assets

N/A

 

1.24

%

 

1.21

%

 

0.81

%

 

1.01

%

 

0.88

%

Annualized return on avg assets, oper

O/A

 

1.22

%

 

1.36

%

 

1.36

%

 

1.07

%

 

1.23

%

Annualized pre-tax, pre-provision, oper

Q/A

 

1.62

%

 

1.81

%

 

1.78

%

 

1.38

%

 

1.63

%

Annualized return on avg common equity, oper

O/C

 

10.63

%

 

11.91

%

 

12.48

%

 

11.14

%

 

12.46

%

Annualized return on avg tangible common equity, operating

O/D

 

17.17

%

 

19.35

%

 

20.13

%

 

16.83

%

 

18.49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Capital Ratios

 

Sept 30, 2023*

June 30, 2023

Mar 31, 2023

Dec 31, 2022

Sept 30, 2022

Common equity tier 1 (CET1) ratio

 

 

12.0

%

 

11.5

%

 

11.2

%

 

12.7

%

 

12.6

%

Leverage (Tier 1) ratio

 

 

9.6

%

 

9.1

%

 

8.8

%

 

9.3

%

 

9.3

%

Total risk based capital ratio

 

 

15.1

%

 

14.5

%

 

14.7

%

 

16.7

%

 

16.7

%

Tangible common equity ratio

 

 

7.3

%

 

7.4

%

 

7.2

%

 

6.9

%

 

6.5

%

*estimated

 

 

 

 

 

 

 

Contacts

M. Ray “Hoppy” Cole

Chief Executive Officer

Dee Dee Lowery

Chief Financial Officer

(601) 268-8998

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