The First Bancshares, Inc. Reports Results for Third Quarter Ended September 30, 2024

The First Bancshares, Inc. (“FBMS” or “the Company”) (NYSE: FBMS), holding company for The First Bank, (www.thefirstbank.com) reported today financial results for the quarter ended September 30, 2024.

Highlights for the Quarter:

Net income available to common shareholders totaled $18.6 million for the quarter ended September 30, 2024, representing a decrease of 5.7% when compared to $19.7 million for the quarter ended June 30, 2024. The Company recorded $1.0 million provision for credit losses for the quarter ended September 30, 2024 and $1.7 million provision for credit losses for the quarter ended June 30, 2024.
Excluding one-time items detailed in the tables located in the appendix of this release, net earnings available to common shareholders, operating (non-GAAP) increased $0.5 million, or 2.7% to $20.5 million for the quarter ended September 30, 2024 as compared to $20.0 million for the quarter ended June 30, 2024.
Total loans increased $67.7 million during the quarter ended September 30, 2024, which represented an annualized increase of 5.2%, as compared to the quarter ending June 30, 2024.
Annualized net interest margin increased 7 basis points to 3.33% for the quarter ended September 30, 2024 from 3.26% for the quarter ended June 30, 2024.
Core net interest margin (non-GAAP) increased 7 basis points during the quarter ended September 30, 2024 from 3.19% to 3.26%.
Cost of deposits averaged 183 basis points and 178 basis points for the third and second quarter of 2024, respectively.
Past due loans to total loans were $22.8 million or 0.43% for the quarter ending September 30, 2024, compared to $20.8 million, or 0.40% for the quarter ending June 30, 2024, and $15.7 million, or 0.31% for the quarter ending September 30, 2023.
Annualized quarter-to-date net charge-offs to total loans were $0.4 million, or 0.03% for the quarter ending September 30, 2024, compared to $0.5 million, or 0.04% for the quarter ending June 30, 2024 and $49 thousand, or 0.004% for the quarter ending September 30, 2023.
Nonperforming assets to total assets were $25.1 million, or 0.31% for the quarter ending September 30, 2024, compared to $21.1 million, or 0.26% for the quarter ending June 30, 2024, and $22.4 million, 0.28% for the quarter ending September 30, 2023.
On July 29, 2024, the Company entered into a definitive merger agreement (the "Merger Agreement") with Renasant Corporation ("Renasant"), the holding company for Renasant Bank, whereby the Company will merge with and into Renasant, with Renasant continuing as the surviving corporation, and immediately thereafter, the Bank will merge with and into Renasant Bank (collectively, the "Merger"). Subject to the terms and conditions of the Merger Agreement, the companies will combine in an all-stock transaction in which all shareholders of the Company will receive 1.00 share of Renasant common stock for each share of Company common stock. The Merger has been approved by each company's board of directors and shareholders and is expected to close in the first half of 2025. Completion of the Merger is subject to customary closing conditions, including the receipt of required regulatory approvals.

M. Ray “Hoppy” Cole, Jr., President and Chief Executive Officer, commented, "We were excited to announce our potential merger with Renasant Bank during the quarter. Together we create a high performing southeastern franchise with a simple community bank model, focused on building relationships and growing our business.

In addition to our merger announcement, the quarter was characterized by continued strong performance in terms of profitability and growth. Loans increased by 5.0% on an annualized basis, core operating earnings increased 2.7% quarter over quarter and our margin expanded six basis points.

We look forward to the opportunities that lie ahead and the value we hope to create for our shareholders through this strategic partnership with Renasant."

Quarterly Earnings

Net income available to common shareholders totaled $18.6 million for the quarter ended September 30, 2024, a decrease of $1.1 million, or 5.7%, when compared to $19.7 million for the quarter ended June 30, 2024.

Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) increased $0.5 million, or 2.7%, to $20.5 million for quarter ended September 30, 2024 as compared to $20.0 million for the quarter ended June 30, 2024.

The Company recorded $1.0 million provision for credit losses for the quarter ended September 30, 2024 and $1.7 million provision for credit losses for the quarter ended June 30, 2024.

Earnings Per Share

For the third quarter of 2024, diluted earnings per share were $0.59 compared to $0.62 for the second quarter of 2024 and $0.77 for the third quarter of 2023.

Diluted earnings per share, operating (non-GAAP) were $0.65 for the third quarter of 2024 compared to $0.63 for the second quarter of 2024 and $0.76 for the third quarter of 2023.

Balance Sheet

Consolidated assets increased $0.7 million to $7.966 billion at September 30, 2024 from $7.966 billion at June 30, 2024. Loans increased $67.7 million, or 1.3%, for the quarterly comparison and deposits decreased $65.4 million, or 1.0% for the quarterly comparison.

Total loans were $5.319 billion for the quarter ended September 30, 2024, as compared to $5.251 billion for the quarter ended June 30, 2024, and $5.090 billion for the quarter ended September 30, 2023, representing an increase of $67.7 million, or 1.3%, for the sequential quarter comparison, and an increase of $228.8 million, or 4.5%, for the prior year quarterly comparison.

Total deposits were $6.561 billion for the quarter ended September 30, 2024, as compared to $6.626 billion for the quarter ended June 30, 2024, and $6.480 billion for the quarter ended September 30, 2023, representing a decrease of $65.4 million, or 1.0%, for the sequential quarter comparison, and an increase of $80.7 million, or 1.2%, for the prior year quarterly comparison. Excluding a decrease in public funds of $39.8 million, deposits decreased $25.6 million, or 0.4% for the sequential quarter comparison. Non-interest bearing deposits as a percentage of total deposits decreased to 27.4% for the quarter ended September 30, 2024 compared to 28.2% for June 30, 2024.

Asset Quality

Nonperforming assets totaled $25.1 million at September 30, 2024, an increase of $4.0 million compared to $21.1 million at June 30, 2024 and an increase of $2.7 million compared to $22.4 million at September 30, 2023.

Nonaccrual loans totaled $16.3 million, an increase of $2.7 million as compared to June 30, 2024 and a decrease of $1.1 million as compared to September 30, 2023.

The ratio of the allowance for credit losses (ACL) to total loans was 1.05% at September 30, 2024, 1.05% at June 30, 2024 and 1.05% at September 30, 2023. The ratio of annualized net charge-offs to total loans was 0.03% for the quarter ended September 30, 2024 compared to 0.04% for the quarter ended June 30, 2024 and 0.004% for the quarter ended September 30, 2023.

Third Quarter 2024 vs. Second Quarter 2024 Earnings Comparison

Net income available to common shareholders for the third quarter of 2024 decreased $1.1 million to $18.6 million compared to $19.7 million for the second quarter of 2024. The Company recorded a $1.0 million provision for credit losses for the quarter ended September 30, 2024 and $1.7 million for the quarter ended June 30, 2024.

Net interest income for the third quarter of 2024 was $59.0 million as compared to $57.8 million for the second quarter of 2024, an increase of $1.2 million. The increase was largely due to an increase in interest income on loans and partially offset by an increase in interest expense of $1.3 million.

Third quarter 2024 net interest margin of 3.33% included 11 basis points related to purchase accounting adjustments compared to 3.26% for the second quarter in 2024, which included 12 basis points related to purchase accounting adjustments.

Core net interest margin (non-GAAP) increased 7 basis points to 3.26% for the third quarter of 2024 from 3.19% for the second quarter of 2024.

Investment securities decreased $56.5 million to $1.715 billion, or 21.5% of total assets at September 30, 2024, compared to $1.771 billion, or 22.2% of total assets at June 30, 2024. The average balance of investment securities decreased $73.1 million in sequential-quarter comparison. The average yield on investment securities decreased 9 basis points to 2.56% from 2.65% in sequential-quarter comparison. The investment portfolio had a net unrealized loss of $91.6 million at September 30, 2024 as compared to a net unrealized loss of $129.0 million at June 30, 2024.

The average yield on all earning assets increased in sequential-quarter comparison from 5.14% to 5.27%. Interest expense on average interest bearing liabilities increased 10 basis points from 2.62% for the second quarter of 2024 to 2.72% for the third quarter of 2024.

Cost of all deposits averaged 183 basis points and 178 basis points for the third and second quarter of 2024, respectively.

Non-interest income decreased $1.1 million from $13.3 million in the second quarter of 2024 to $12.2 million in the third quarter of 2024, primarily attributable to a decrease in interchange fee income of $0.4 million and decrease of $0.7 million in other charges and fees.

Non-interest expense for the third quarter of 2024 was $46.4 million compared to $44.1 million for the second quarter of 2024, an increase of $2.3 million, attributable to expenses relating to the pending merger with Renasant.

Third Quarter 2024 vs. Third Quarter 2023 Earnings Comparison

Net income available to common shareholders for the third quarter of 2024 totaled $18.6 million compared to $24.4 million for the third quarter of 2023, a decrease of $5.8 million or 23.8%. This decrease is largely attributable to a decrease in a U.S. Treasury award of $6.2 million and a decrease in other non-interest expense of $5.2 million, offset by a decrease in net interest income of $1.7 million and increases in salaries and acquisition charges of $2.3 million and $2.0 million, respectively.

Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) decreased $3.5 million, or 14.7%, to $20.5 million for quarter ended September 30, 2024, as compared to $24.0 million for the quarter ended September 30, 2023. This decrease is largely attributable to a decrease in a U.S. Treasury award of $6.2 million and a decrease in other non-interest expense of $5.2 million, offset by a decrease in net interest income of $1.7 million and increases in salaries of $2.3 million.

Net interest income for the third quarter of 2024 was $59.0 million, a decrease of $1.7 million or 2.8% when compared to the third quarter of 2023. Fully tax equivalent (“FTE”) net interest income (non-GAAP) totaled $60.0 million and $61.7 million for the third quarter of 2024 and 2023, respectively. The decrease was largely due to a decrease in purchase accounting adjustments of $2.3 million for the third quarter comparisons.

Third quarter of 2024 net interest margin was 3.33%, which included 11 basis points related to purchase accounting adjustments compared to 3.47% for the same quarter in 2023, which included 25 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin (non-GAAP) increased 11 basis points in prior year quarterly comparison primarily due to an increase in rates on loans, partially offset by a corresponding increase in rates on interest bearing liabilities.

Non-interest income decreased $7.1 million for the third quarter of 2024 as compared to the third quarter of 2023. A decrease in U.S. Treasury awards of $6.2 million accounted for a majority of the change.

Third quarter 2024 non-interest expense was $46.4 million, a decrease of $1.3 million, or 2.8% as compared to the third quarter of 2023. Excluding acquisition charges, non-interest expense decreased $3.3 million of which salaries and employee benefits increased $2.3 million offset by a decrease in other expenses of $5.2 million.

Investment securities totaled $1.715 billion, or 21.5% of total assets at September 30, 2024, compared to $1.836 billion, or 23.3% of total assets at September 30, 2023. For the third quarter of 2024 compared to the third quarter of 2023, the average balance of investment securities decreased $168.2 million. The average yield on investment securities increased 30 basis points to 2.56% from 2.26% in the prior year quarterly comparison. The investment portfolio had a net unrealized loss of $91.6 million at September 30, 2024 as compared to a net unrealized loss of $184.9 million at September 30, 2023.

The average yield on all earning assets increased 37 basis points in prior year quarterly comparison, from 4.90% for the third quarter of 2023 to 5.27% for the third quarter of 2024. Interest expense on average interest bearing liabilities increased 67 basis points from 2.05% for the third quarter of 2023 to 2.72% for the third quarter of 2024.

Cost of all deposits averaged 183 basis points for the third quarter of 2024 compared to 121 basis points for the third quarter of 2023.

Year-to-Date Earnings Comparison

In the year-over-year comparison, net income available to common shareholders decreased $5.5 million, or 8.6%, from $64.4 million for the nine months ended September 30, 2023, to $58.9 million for the same period ended September 30, 2024.

Net interest income was $174.1 million for the nine months ended September 30, 2024, a decrease of $17.5 million as compared to the same period ended September 30, 2023, primarily due to an increase in interest expense on deposits partially offset by an increase in loan interest income.

Non-interest income was $38.2 million for the nine months ended September 30, 2024, a decrease of $6.1 million as compared to the same period ended September 30, 2023. A decrease in U.S. Treasury awards of $6.2 million accounted for the change.

Non-interest expense was $133.9 million for the nine months ended September 30, 2024, a decrease of $6.4 million as compared to the same period ended September 30, 2023. The decrease was primarily due to decreased acquisition charges of $5.5 million and other non-interest expense of $8.1 million, partially offset by an increase in salaries and employee benefits of $5.0 million.

Declaration of Cash Dividend

The Company announced that its Board of Directors declared a cash dividend of $0.25 per share to be paid on its common stock on November 22, 2024 to shareholders of record as of the close of business on November 8, 2024.

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 New York Stock Exchange under the symbol FBMS. Information is available on the Company’s website: www.thefirstbank.com.

Non-GAAP Financial Measures

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

Forward Looking Statements

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

All statements other than statements of historical fact are forward-looking statements. Such statements can generally be identified by such words as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “should,” “predicts,” “could,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential,” “positioned” and other similar words and expressions of the future or otherwise regarding the outlook for the Company’s future business and financial performance and/or the performance of the banking industry and economy in general. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risk and uncertainties which may cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. Factors that might cause such differences include, but are not limited to: (1) competitive pressures among financial institutions increasing significantly; (2) prevailing, or changes in, economic or political conditions, either nationally or locally, particularly in areas in which the Company conducts operations, including the effects of declines in the real estate market, high unemployment rates, inflationary pressure, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing; (3) interest rate risk, including the effects of elevated 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, and risks related to the Merger, including the fluctuations of the market value of the consideration to be paid to the Company's shareholders in the Merger, the risks related to combining our businesses, expenses related to the Merger and integration of the combined entity, the risks that the Merger may not occur, and the risk of litigation related to the Merger; (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

9/30/24

Quarter

Ended

6/30/24

Quarter

Ended

3/31/24

Quarter

Ended

12/31/23

Quarter

Ended

9/30/23

Total Interest Income

93,561

91,027

91,663

88,720

85,681

Total Interest Expense

34,547

33,233

34,322

31,055

24,977

Net Interest Income

59,014

57,794

57,341

57,665

60,704

Net Interest Income excluding PPP Fee Income

59,010

57,793

57,340

57,664

60,703

FTE net interest income*

60,004

58,797

58,339

58,651

61,696

Provision for credit losses

1,000

1,650

—

1,250

1,000

Non-interest income

12,242

13,319

12,679

2,346

19,324

Non-interest expense

46,394

44,089

43,425

44,433

47,724

Earnings before income taxes

23,862

25,374

26,595

14,328

31,304

Income tax expense

5,291

5,677

5,967

3,281

6,944

Net income available to common shareholders

18,571

19,697

20,628

11,047

24,360

PER COMMON SHARE DATA

Basic earnings per share

0.59

0.62

0.66

0.35

0.78

Diluted earnings per share

0.59

0.62

0.65

0.35

0.77

Diluted earnings per share, operating*

0.65

0.63

0.65

0.59

0.76

Quarterly dividends per share

0.25

0.24

0.23

Book value per common share at end of period

32.11

30.83

30.45

30.22

28.57

Tangible book value per common share at period end*

21.50

20.15

19.70

19.35

17.62

Market price at end of period

32.13

25.98

25.95

29.33

26.97

Shares outstanding at period end

31,511,260

31,525,232

31,528,748

31,399,803

31,404,231

Weighted average shares outstanding:

Basic

31,516,823

31,527,592

31,475,254

31,401,612

31,405,439

Diluted

31,713,385

31,679,827

31,630,745

31,587,506

31,609,564

AVERAGE BALANCE SHEET DATA

Total assets

7,944,553

7,939,783

8,005,574

7,917,303

7,873,345

Loans and leases

5,288,321

5,202,006

5,158,071

5,145,228

5,038,928

Total deposits

6,560,761

6,625,500

6,599,287

6,440,774

6,466,141

Total common equity

975,359

963,445

952,708

901,530

905,070

Total tangible common equity*

639,891

625,586

612,470

558,889

560,071

SELECTED RATIOS

Annualized return on avg assets (ROA)

0.94

0.99

1.03

0.56

1.24

Annualized return on avg assets, operating*

1.03

1.01

1.03

0.95

1.22

Annualized pre-tax, pre-provision, operating*

1.38

1.33

1.31

1.62

Annualized return on avg common equity, operating*

8.41

8.29

8.66

8.32

10.63

Annualized return on avg tangible common equity, operating*

12.82

12.76

13.48

13.41

17.17

Average loans to average deposits

80.61

78.51

78.16

79.89

77.93

FTE Net Interest Margin*

3.38

3.32

3.26

3.33

3.52

Efficiency Ratio

64.22

61.14

61.15

72.84

58.90

Efficiency Ratio, operating*

60.63

60.65

61.14

62.00

56.06

*See reconciliation of non-GAAP financial measures

CREDIT QUALITY

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

1.05

Nonperforming assets to tangible equity + ACL

3.42

3.05

2.72

3.05

3.69

Nonperforming assets to total loans + OREO

0.47

0.40

0.36

0.39

0.44

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

0.033

0.036

0.006

0.061

0.004

THE FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

BALANCE SHEET

September 30,

2024

June 30,

2024

March 31,

2024

December 31,

2023

September 30,

2023

Assets

Cash and cash equivalents

214,135

207,606

339,964

355,147

197,632

Securities available for sale

1,060,014

1,124,462

1,088,568

1,042,365

1,141,971

Securities held to maturity

602,328

607,502

622,574

654,539

658,524

Other investments

52,386

39,293

34,094

37,754

35,872

Total investment securities

1,714,728

1,771,257

1,745,236

1,734,658

1,836,367

Loans held for sale

2,987

5,892

4,241

2,914

5,960

Total loans

5,318,590

5,250,893

5,139,952

5,170,042

5,089,800

Allowance for credit losses

(55,700

)

(55,133

)

(53,959

)

(54,032

)

(53,565

)

Loans, net

5,262,890

5,195,760

5,085,993

5,116,010

5,036,235

Premises and equipment

177,652

179,289

181,194

182,162

183,740

Other Real Estate Owned

7,314

6,356

6,743

8,320

4,920

Goodwill and other intangibles

334,178

336,561

338,946

341,332

343,869

Other assets

252,571

263,079

261,442

258,802

275,562

Total assets

7,966,455

7,965,800

7,963,759

7,999,345

7,884,285

Liabilities and Shareholders’ Equity

Non-interest bearing deposits

1,796,746

1,870,305

1,836,952

1,849,013

1,967,661

Interest-bearing deposits

4,763,966

4,755,812

4,873,403

4,613,859

4,512,364

Total deposits

6,560,712

6,626,117

6,710,355

6,462,872

6,480,025

Borrowings

207,500

182,400

110,000

390,000

302,000

Subordinated debentures

123,645

123,558

123,472

123,386

128,300

Other liabilities

62,915

61,840

60,020

74,053

76,739

Total liabilities

6,954,772

6,993,915

7,003,847

7,050,311

6,987,064

Total shareholders’ equity

1,011,683

971,885

959,912

949,034

897,221

Total liabilities and shareholders’ equity

7,966,455

7,965,800

7,963,759

7,999,345

7,884,285

THE FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT

Three Months Ended

9/30/2024

6/30/2024

3/31/2024

12/31/2023

9/30/2023

Interest Income:

Loans, including fees

80,123

76,269

76,172

74,357

70,349

Investment securities

10,989

11,833

11,248

10,803

10,614

Accretion of purchase accounting adjustments

2,008

2,067

2,627

3,235

4,277

Other interest income

441

858

1,616

325

441

Total interest income

93,561

91,027

91,663

88,720

85,681

Interest Expense:

Deposits

29,763

29,247

29,182

24,489

19,314

Borrowings

2,607

1,956

3,022

4,500

3,556

Subordinated debentures

1,961

1,814

1,887

1,807

1,849

Accretion of purchase accounting adjustments

216

231

259

258

Total interest expense

34,547

33,233

34,322

31,055

24,977

Net interest income

59,014

57,794

57,341

57,665

60,704

Provision for credit losses

1,000

1,650

—

1,250

1,000

Net interest income after provision for credit losses

58,014

56,144

57,341

56,415

59,704

Non-interest Income:

Service charges on deposit accounts

3,709

3,334

3,367

3,447

3,646

Mortgage Income

927

972

704

582

878

Interchange Fee Income

4,460

4,893

4,195

4,593

5,280

Gain (Loss) on securities, net

225

(48

)

(9,670

)

Treasury Awards

—

6,197

Loss on sale of premises and equipment

(344

)

163

—

(524

)

(104

)

Other charges and fees

3,265

3,943

4,461

3,918

3,425

Total non-interest income

12,242

13,319

12,679

2,346

19,324

Non-interest expense:

Salaries and employee benefits

25,131

25,045

24,508

23,717

22,807

Occupancy expense

5,659

5,490

5,714

5,688

5,343

FDIC/OCC premiums

973

1,020

1,008

1,263

1,158

Marketing

139

559

Amortization of core deposit intangibles

2,384

2,385

Other professional services

1,457

2,028

1,833

2,309

1,499

Acquisition and charter conversion charges

2,592

352

593

588

Other non-interest expense

8,149

7,710

7,830

8,407

13,385

Total non-interest expense

46,394

44,089

43,425

44,433

47,724

Earnings before income taxes

23,862

25,374

26,595

14,328

31,304

Income tax expense

5,291

5,677

5,967

3,281

6,944

Net income available to common shareholders

18,571

19,697

20,628

11,047

24,360

Diluted earnings per common share

0.59

0.62

0.65

0.35

0.77

Diluted earnings per common share, operating*

0.65

0.63

0.65

0.59

0.76

*See reconciliation of non-GAAP financial measures

THE FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT

Year to Date

2024

2023

Interest Income:

Loans, including fees

232,559

202,460

PPP loan fee income

210

Investment securities

34,070

33,136

Accretion of purchase accounting adjustments

6,702

14,279

Other interest income

2,915

2,128

Total interest income

276,251

252,213

Interest Expense:

Deposits

88,192

46,110

Borrowings

7,585

7,779

Subordinated debentures

5,662

6,163

Amortization of purchase accounting adjustments

663

501

Total interest expense

102,102

60,553

Net interest income

174,149

191,660

Provision for credit losses

2,650

13,250

Net interest income after provision for credit losses

171,499

178,410

Non-interest Income:

Service charges on deposit accounts

10,410

10,728

Mortgage Income

2,603

2,284

Interchange Fee Income

13,548

14,321

Gain (loss) on securities, net

191

(46

)

Treasury Awards

—

6,197

(Loss) gain on sale of premises and equipment

(181

)

559

Other charges and fees

11,669

10,316

Total non-interest income

38,240

44,359

Non-interest expense:

Salaries and employee benefits

74,684

69,695

Occupancy expense

16,863

15,680

FDIC/OCC premiums

3,001

2,586

Marketing

247

762

Amortization of core deposit intangibles

7,154

7,178

Other professional services

5,318

4,137

Acquisition & charter conversion charges

2,952

8,482

Other non-interest expense

23,689

31,773

Total non-interest expense

133,908

140,293

Earnings before income taxes

75,831

82,476

Income tax expense

16,935

18,066

Net income available to common shareholders

58,896

64,410

Diluted earnings per common share

1.86

2.04

Diluted earnings per common share, operating*

1.93

2.47

*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,

2024

Percent

of Total

June 30,

2024

March 31,

2024

December 31,

2023

September 30,

2023

Percent

of Total

Commercial, financial and agricultural

716,391

13.5

710,808

737,511

765,422

753,120

14.8

Real estate – construction

625,521

11.8

639,931

633,804

629,660

633,682

12.4

Real estate – commercial

2,472,332

46.4

2,435,853

2,356,552

2,377,864

2,317,666

45.5

Real estate – residential

1,431,342

26.9

1,387,102

1,330,589

1,311,395

1,298,980

25.5

Lease Financing Receivable

1,915

—

1,749

1,794

1,292

1,548

—

Obligations of States & subdivisions

25,905

0.5

27,286

28,541

29,316

29,650

0.6

Consumer

45,184

0.8

48,164

51,161

55,094

55,154

1.1

Loans held for sale

2,987

0.1

5,892

4,241

2,914

5,960

0.1

Total loans

5,321,577

100

5,256,785

5,144,193

5,172,957

5,095,760

100.0

COMPOSITION OF DEPOSITS

September 30,

2024

Percent

of Total

June 30,

2024

March 31,

2024

December 31,

2023

September 30,

2023

Percent

of Total

Non-interest bearing

1,796,746

27.4

1,870,305

1,836,952

1,849,013

1,967,661

30.4

NOW and other

2,002,693

30.5

2,075,566

2,135,343

1,914,792

1,962,383

30.3

Money Market/Savings

1,566,648

23.9

1,573,194

1,656,688

1,623,311

1,532,822

23.7

Time Deposits of less than $250,000

921,056

14.0

825,460

816,153

813,877

766,553

11.8

Time Deposits of $250,000 or more

273,569

4.2

281,591

265,219

261,879

250,606

3.8

Total Deposits

6,560,712

100

6,626,116

6,710,355

6,462,872

6,480,025

100.0

ASSET QUALITY DATA

September 30,

2024

June 30,

2024

March 31,

2024

December 31,

2023

September 30,

2023

Nonaccrual loans

16,284

13,553

10,961

10,691

17,423

Loans past due 90 days and over

1,455

1,174

687

1,163

Total nonperforming loans

17,739

14,727

11,648

11,854

17,476

Other real estate owned

7,314

6,356

6,743

8,320

4,920

Total nonperforming assets

25,053

21,083

18,391

20,174

22,396

Nonperforming assets to total assets

0.31

0.26

0.23

0.25

0.28

Nonperforming assets to total loans + OREO

0.47

0.40

0.36

0.39

0.44

ACL to nonperforming loans

314.00

374.37

463.25

455.81

306.51

ACL to total loans

1.05

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

433

476

783

Annualized QTD net chg-offs (recs) to loans

0.033

0.036

0.006

0.061

0.004

THE FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

Yield

Three Months Ended

Analysis

September 30, 2024

June 30, 2024

March 31, 2024

December 31, 2023

September 30, 2023

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

1,269,082

8,064

2.54

1,328,780

8,868

2.67

1,342,644

8,303

2.47

1,375,695

7,892

2.29

1,419,343

7,685

2.17

Tax-exempt securities

445,376

3,915

3.52

458,752

3,968

3.46

468,432

3,944

3.37

446,348

3,897

3.49

463,329

3,921

3.39

Total investment securities

1,714,458

11,979

2.79

1,787,532

12,836

2.87

1,811,076

12,247

2.70

1,822,043

11,789

2.59

1,882,672

11,606

2.47

Int bearing dep in other banks

92,122

441

1.92

99,290

858

3.46

189,785

1,616

3.41

70,193

325

1.85

79,448

441

2.22

Loans

5,288,321

82,131

6.21

5,202,006

78,336

6.02

5,158,071

78,798

6.11

5,145,228

77,592

6.03

5,038,928

74,626

5.92

Total interest earning assets

7,094,901

94,551

5.33

7,088,828

92,030

5.19

7,158,932

92,661

5.18

7,037,464

89,706

5.10

7,001,048

86,673

4.95

Other assets

849,652

850,955

846,642

879,839

872,297

Total assets

7,944,553

7,939,783

8,005,574

7,917,303

7,873,345

Interest-bearing liabilities:

Deposits

4,740,726

29,979

2.53

4,795,120

29,463

2.46

4,803,277

29,412

2.45

4,533,386

24,748

2.18

4,459,869

19,572

1.76

Borrowed Funds

214,192

2,607

4.87

157,045

1,956

4.98

254,505

3,023

4.75

361,445

4,500

4.98

296,963

3,556

4.79

Subordinated debentures

123,596

1,961

6.35

123,510

1,814

5.87

123,424

1,887

6.12

126,925

1,807

5.69

128,251

1,849

5.77

Total interest bearing liabilities

5,078,514

34,547

2.72

5,075,675

33,233

2.62

5,181,206

34,322

2.65

5,021,756

31,055

2.47

4,885,083

24,977

2.05

Other liabilities

1,890,680

1,900,663

1,871,660

1,994,017

2,083,192

Shareholders' equity

975,359

963,445

952,708

901,530

905,070

Total liabilities and shareholders' equity

7,944,553

7,939,783

8,005,574

7,917,303

7,873,345

Net interest income (FTE)*

60,004

2.61

58,797

2.57

58,339

2.53

58,651

2.63

61,696

2.91

Net interest margin (FTE)*

3.38

3.32

3.26

3.33

3.52

Core net interest margin*

3.26

3.19

3.10

3.14

3.27

*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, 2024

June 30, 2024

Mar 31, 2024

Dec 31, 2023

Sept 30, 2023

Book value per common share

32.11

30.83

30.45

30.22

28.57

Effect of intangible assets per share

10.61

10.68

10.75

10.87

10.95

Tangible book value per common share

21.50

20.15

19.70

19.35

17.62

Diluted earnings per share

0.59

0.62

0.65

0.35

0.77

Effect of acquisition and charter conversion charges

0.08

0.01

—

0.02

Tax on acquisition and charter conversion charges

(0.02

)

—

(0.01

)

(0.01

)

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

)

Loss on securities repositioning

—

0.31

—

Tax loss on securities repositioning

—

(0.08

)

—

Diluted earnings per share, operating

0.65

0.63

0.65

0.59

0.76

Year to Date

2024

2023

Diluted earnings per share

1.86

2.04

Effect of acquisition and charter conversion charges

0.09

0.27

Tax on acquisition and charter conversion charges

(0.02

)

(0.07

)

Effect of Treasury awards

—

(0.20

)

Tax on Treasury awards

—

0.05

Effect on contributions/consulting/advertising related to Treasury awards

—

0.17

Tax on contributions/consulting/advertising related to Treasury awards

—

(0.04

)

Initial provision for acquired loans

—

0.34

Tax on initial provision for acquired loans

—

(0.09

)

Diluted earnings per share, operating

1.93

2.47

Year to Date

2024

2023

Net income available to common shareholders

58,896

64,410

Acquisition and charter conversion charges

2,952

8,482

Tax on acquisition and charter conversion charges

(747

)

(2,146

)

Treasury awards

—

(6,197

)

Tax on Treasury awards

—

1,568

Contributions/consulting/advertising related to Treasury awards

—

5,190

Tax on contributions/consulting/advertising related to Treasury awards

—

(1,313

)

Initial provision for acquired loans

—

10,727

Tax on initial provision for acquired loans

—

(2,714

)

Net earnings available to common shareholders, operating

61,101

78,007

Three Months Ended

Average Balance Sheet Data

Sept 30, 2024

June 30, 2024

Mar 31, 2024

Dec 31, 2023

Sept 30, 2023

Total average assets

7,944,553

7,939,783

8,005,574

7,917,303

7,873,345

Total average earning assets

7,094,901

7,088,828

7,158,932

7,037,464

7,001,048

Common Equity

975,359

963,445

952,708

901,530

905,070

Less intangible assets

335,468

337,859

340,238

342,641

344,999

Total Tangible common equity

639,891

625,586

612,470

558,889

560,071

Three Months Ended

Net Interest Income Fully Tax Equivalent

Sept 30, 2024

June 30, 2024

Mar 31, 2024

Dec 31, 2023

Sept 30, 2023

Net interest income

59,014

57,794

57,341

57,665

60,704

Tax-exempt investment income

(2,925

)

(2,965

)

(2,946

)

(2,911

)

(2,929

)

Taxable investment income

3,915

3,968

3,944

3,897

3,921

Net Interest Income Fully Tax Equivalent

60,004

58,797

58,339

58,651

61,696

Annualized Net Interest Margin

E/B

3.33

3.26

3.20

3.28

3.47

Annualized Net Interest Margin, Fully Tax Equivalent

F/B

3.38

3.32

3.26

3.33

3.52

Total Interest Income, Fully Tax Equivalent

Total Interest Income

93,561

91,027

91,663

88,720

85,681

Tax-exempt investment income

(2,925

)

(2,965

)

(2,946

)

(2,911

)

(2,929

)

Taxable investment income

3,915

3,968

3,944

3,897

3,921

Total Interest Income, Fully Tax Equivalent

94,551

92,030

92,661

89,706

86,673

Yield on Average Earning Assets

R/B

5.27

5.14

5.12

5.04

4.90

Yield on Average Earning Assets, Fully Tax Equivalent

G/B

5.33

5.19

5.18

5.10

4.95

Interest Income Investment Securities, Fully Tax Equivalent

Interest Income Investment Securities

10,989

11,833

11,248

10,803

10,614

Tax-exempt investment income

(2,925

)

(2,965

)

(2,946

)

(2,911

)

(2,929

)

Taxable investment Income

3,915

3,968

3,944

3,897

3,921

Interest Income Investment Securities, Fully Tax Equivalent

11,979

12,836

12,246

11,789

11,606

Average Investment Securities

1,714,458

1,787,532

1,811,076

1,822,043

1,882,672

Yield on Investment Securities

S/I

2.56

2.65

2.48

2.37

2.26

Yield on Investment Securities, Fully Tax Equivalent

H/I

2.79

2.87

2.70

2.59

2.47

Three Months Ended

Core Net Interest Margin

Sept 30, 2024

June 30, 2024

Mar 31, 2024

Dec 31, 2023

Sept 30, 2023

Net interest income (FTE)

60,004

58,797

58,339

58,651

61,696

Less purchase accounting adjustments

2,008

2,067

2,627

3,235

4,276

Net interest income, net of purchase accounting adj

57,996

56,730

55,712

55,416

57,420

Total average earning assets

7,094,901

7,088,828

7,158,932

7,037,464

7,001,048

Add average balance of loan valuation discount

20,306

22,341

24,675

27,573

31,269

Avg earning assets, excluding loan valuation discount

7,115,207

7,111,169

7,183,607

7,065,037

7,032,317

Core net interest margin

J/K

3.26

3.19

3.10

3.14

3.27

Three Months Ended

Efficiency Ratio

Sept 30, 2024

June 30, 2024

Mar 31, 2024

Dec 31, 2023

Sept 30, 2023

Operating Expense

Total non-interest expense

46,394

44,089

43,425

44,433

47,724

Pre-tax non-operating expenses

(2,592

)

(352

)

(594

)

(5,777

)

Adjusted Operating Expense

43,802

43,737

43,417

43,839

41,947

Operating Revenue

Net interest income, FTE

60,004

58,797

58,339

58,651

61,696

Total non-interest income

12,242

13,319

12,679

2,346

19,324

Pre-tax non-operating items

—

9,708

(6,197

)

Adjusted Operating Revenue

72,246

72,116

71,018

70,705

74,823

Efficiency Ratio, operating

L/M

60.63

60.65

61.14

62.00

56.06

Three Months Ended

Return Ratios

Sept 30, 2024

June 30, 2024

Mar 31, 2024

Dec 31, 2023

Sept 30, 2023

Net income available to common shareholders

18,571

19,697

20,628

11,047

24,360

Acquisition and charter conversion charges

2,592

352

593

588

Tax on acquisition and charter conversion charges

(656

)

(89

)

(150

)

(149

)

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

)

Loss on securities repositioning

—

9,708

—

Tax loss on securities repositioning

—

(2,457

)

—

Net earnings available to common shareholders, operating

20,507

19,960

20,634

18,741

24,047

Three Months Ended

Pre-Tax Pre-Provision Operating Earnings

Sept 30, 2024

June 30, 2024

Mar 31, 2024

Dec 31, 2023

Sept 30, 2023

Earnings before income taxes

23,862

25,374

26,595

14,328

31,304

Acquisition and charter conversion charges

2,592

352

593

588

Provision for credit losses

1,000

1,650

—

1,250

1,000

Treasury awards

—

(6,197

)

Contributions/consulting/advertising related to Treasury awards

—

5,190

Loss on securities repositioning

—

9,708

—

Pre-Tax, Pre-Provision Operating Earnings

27,454

27,376

26,603

25,879

31,885

Annualized return on avg assets

N/A

0.94

0.99

1.03

0.56

1.24

Annualized return on avg assets, oper

O/A

1.03

1.01

1.03

0.95

1.22

Annualized pre-tax, pre-provision, oper

Q/A

1.38

1.33

1.31

1.62

Annualized return on avg common equity, oper

O/C

8.41

8.29

8.66

8.32

10.63

Annualized return on avg tangible common equity, operating

O/D

12.82

12.76

13.48

13.41

17.17

Three Months Ended

Capital Ratios

Sept 30, 2024*

June 30, 2024

Mar 31, 2024

Dec 31, 2023

Sept 30, 2023

Common equity tier 1 (CET1) ratio

12.5

12.4

12.2

12.1

12.0

Leverage (Tier 1) ratio

10.3

10.0

9.7

9.6

Total risk based capital ratio

15.4

15.3

15.2

15.0

15.1

Tangible common equity ratio

8.9

8.3

8.1

7.9

7.3

*estimated

View source version on businesswire.com: https://www.businesswire.com/news/home/20241023387041/en/

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

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