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The First Bancshares, Inc. Reports Results for Third Quarter ended September 30, 2022; Increases Quarterly Dividend 5%

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, 2022.

Highlights for the Quarter:

  • Effective August 1, 2022, the Company closed its acquisition of Beach Bancorp, Inc., parent company of Beach Bank (together with Beach Bancorp, Inc., “Beach Bank”), headquartered in Fort Walton, FL. Beach Bank added 7 locations servicing the Florida Panhandle as well as Tampa, FL. Systems conversion is scheduled for the fourth quarter of 2022.
  • During the quarter, the Company entered into a definitive agreement to acquire Heritage Southeast Bancorporation, Inc., parent company of Heritage Southeast Bank (“Heritage Bank”) based in Jonesboro, Georgia. The proposed transaction will increase the Company’s presence in Southern Georgia as well as provide entry into the fast growing markets of Atlanta and Savannah, Georgia and Jacksonville, Florida. Heritage Bank will add approximately $1.7 billion of assets and twenty three locations.
  • Recorded initial purchase accounting adjustments related to the Beach Bank merger including goodwill of $21.8 million and Current Expected Credit Losses (“CECL”) day one provision for credit losses of $3.9 million. Merger related expenses were recorded in the amount of $3.5 million for both Beach Bank and Heritage Bank.
  • Net income available to common shareholders totaled $14.0 million for the quarter ended September 30, 2022, representing a decrease of $1.7 million, or 10.9%, compared to $15.8 million for the quarter ended June 30, 2022. The decrease was the result of several one-time items primarily related to merger expenses as detailed in the tables located in the appendix of this release.
  • Pre-Tax, Pre-Provision Operating Earnings (non-GAAP) totaled $25.9 million for the quarter ended September 30, 2022, representing an increase of $5.1 million, or 24.5%, compared to $20.8 million for the quarter ended June 30, 2022.
  • Total loans, excluding Paycheck Protection Program (“PPP”) loans and acquired Beach Bank loans, increased 3.1% for the quarter representing net growth of $97.0 million, or 12.4% on an annualized basis, as compared to the quarter ended June 30, 2022.
  • Net interest income, excluding PPP fee income, increased $7.4 million, or 17.9%, when comparing quarter end September 30, 2022 to quarter end June 30, 2022.
  • Net Interest Margin expanded 41 bps when comparing third quarter 2022 to second quarter 2022.

M. Ray “Hoppy” Cole, President and Chief Executive Officer, commented, “The third quarter showed continued improvement in our core profitability. Strong loan growth funded by excess liquidity highlighted a significant improvement in our net interest margin. In addition to improved operating results we continue to execute on our strategic plan of building a high performing community bank franchise in the Southeast.

On July 27th, we announced the signing of a definitive agreement to acquire Heritage Bank. On July 31st, we closed our previously announced merger with Beach Bank. Together these two banks will increase our assets by over $2 billion with market share in Atlanta, Savannah and Southeast Georgia as well as Jacksonville, Tampa and the Florida Panhandle. On a combined basis, our Company will have over $8 billion in assets serving some of the best markets in the Southeast in MS, LA, AL, GA and FL.

We are excited about the team of community bankers that will be joining our Company and we look forward to working together to continue to grow our Company and serve our clients.”

Quarterly Earnings

Net income available to common shareholders totaled $14.0 million for the quarter ended September 30, 2022, a decrease of $1.7 million, or 10.9%, compared to $15.8 million for the quarter ended June 30, 2022.

Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) increased $3.1 million, or 19.0%, to $19.6 million for quarter ended September 30, 2022 as compared to $16.5 million for the quarter ended June 30, 2022.

The Company recorded a provision for loan losses of $4.3 million for the quarter ended September 30, 2022 and $0.6 million for the quarter ended June 30, 2022. The $4.3 million includes $3.9 million for the CECL day 1 provision for loan losses attributable to the acquired Beach Bank loans.

Pre-tax, Pre-provision Operating Earnings

Pre-tax, pre-provision operating earnings (non-GAAP) increased $5.1 million to $25.9 million for the quarter ended September 30, 2022 as compared to $20.8 million for the quarter ended June 30, 2022. One-time items are detailed in the tables included with this press release.

Earnings Per Share

For the third quarter of 2022, fully diluted earnings per share were $0.61, compared to $0.76 for the second quarter of 2022 and $0.76 for the third quarter of 2021. The decrease in fully-diluted earnings per share was primarily attributable to expenses associated with the acquisition of Beach Bank, and the pending acquisition of Heritage Bank.

Fully diluted earnings per share, operating (non-GAAP) were $0.85 for the third quarter of 2022 compared to $0.80 for the second quarter of 2022 and $0.76 for the third quarter of 2021.

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

Balance Sheet

Consolidated assets increased $417.4 million to $6.455 billion at September 30, 2022 from $6.037 billion at June 30, 2022. The acquisition of Beach Bank contributed $458.2 million in assets as of September 30, 2022.

PPP loans at September 30, 2022 were $1.4 million, a decrease of $4.9 million from June 30, 2022, due to loan forgiveness under the PPP program.

Total loans were $3.719 billion for the quarter ended September 30, 2022, as compared to $3.125 billion for the quarter ended June 30, 2022, and $2.961 billion for the quarter ended September 30, 2021, representing an increase of $594.5 million, or 19.0%, for the sequential quarter comparison, and an increase of $758.5 million, or 25.6%, for the prior year quarterly comparison. Acquired Beach Bank loans totaled $502.3 million at September 30, 2022. PPP loans totaled $1.4 million for the quarter ended September 30, 2022, $6.3 million for the quarter ended June 30, 2022, and $87.1 million for the quarter ended September 30, 2021.

Excluding the PPP loans and acquired Beach Bank loans, total loans increased $97.0 million, or 3.1% as compared to the quarter ended June 30, 2022, or 12.4% on an annualized basis.

Excluding the PPP loans and acquired Beach Bank loans, total loans increased $341.9 million, or 11.9% as compared to the quarter ended September 30, 2021.

Total deposits were $5.551 billion for the quarter ended September 30, 2022, as compared to $5.306 billion for the quarter ended June 30, 2022, and $4.673 billion for the quarter ended September 30, 2021, representing an increase of $245.1 million, or 4.6%, for the sequential quarter comparison, and an increase of $878.8 million, or 18.8%, for the prior year quarterly comparison.

Net of the acquired Beach Bank deposits of $439.0 million, total deposits decreased $193.9 million for the sequential quarter comparison partially due to the seasonality of our public fund deposit portfolio. Acquired Beach Bank deposits accounted for $439.0 million and acquired Cadence Bank branch deposits accounted for $302.6 million of the $878.8 million increase for the prior year quarterly comparison.

Tangible book value per share (non-GAAP) decreased to $16.93 at September 30, 2022 from $18.32 at June 30, 2022. This decrease was primarily the result of the change in accumulated other comprehensive income of ($50.6 million) related to the effect of rising interest rates on the value of our investment portfolio.

Asset Quality

Nonperforming assets totaled $26.7 million at September 30, 2022, an increase of $0.6 million compared to $26.2 million at June 30, 2022 and a decrease of $1.3 million compared to $28.0 million at September 30, 2021. During the quarter ended September 30, 2022, nonperforming assets related to the Beach acquisition were added in the amount of $8.6 million which was offset by a legacy nonaccrual in the amount of $10.2 million upgraded to accrual status.

Nonaccrual loans totaled $15.8 million, a decrease of $7.8 million as compared to June 30, 2022 and a decrease of $9.2 million as compared to September 30, 2021. During the quarter ended September 30, 2022, one large relationship with a balance of $10.2 million was upgraded to accrual status. This upgrade resulted in $1.5 million in interest income being recognized during the third quarter of 2022.

The ratio of the allowance for credit losses (ACL) to total loans was 1.03% at September 30, 2022, 1.04% at June 30, 2022 and 1.09% at September 30, 2021. The ratio of annualized net charge-offs (recoveries) to total loans was (0.04%) for the quarter ended September 30, 2022 compared to (0.04%) for the quarter ended June 30, 2022 and 0.005% for the quarter ended September 30, 2021.

Third Quarter 2022 vs Second Quarter 2022 Earnings Comparison

Net income available to common shareholders for the third quarter of 2022 decreased $1.7 million to $14.0 million compared to $15.8 million for the second quarter of 2022.

Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) increased $3.1 million, or 19.0%, to $19.6 million for quarter ended September 30, 2022 as compared to $16.5 million for the quarter ended June 30, 2022.

Net interest income for the third quarter of 2022 was $49.1 million as compared to $42.1 million for the second quarter of 2022, an increase of $7.0 million which is primarily attributed to an increase in income from loans of $7.4 million. FTE net interest income (non-GAAP) increased $7.1 million to $50.1 million from $43.0 million in sequential-quarter comparison. Third quarter 2022 FTE net interest margin (non-GAAP) of 3.50% included 6 basis points related to purchase accounting adjustments compared to 3.09% for the second quarter in 2022, which included 5 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin (non-GAAP) increased 40 basis points to 3.44% in sequential quarter comparison primarily due to an increase in average loans and interest rate increases.

Investment securities totaled $2.004 billion, or 31.0% of total assets at September 30, 2022, compared to $2.105 billion, or 34.9% of total assets at June 30, 2022. The average balance of investment securities decreased $35.9 million in sequential-quarter comparison. The average tax equivalent yield on investment securities (non-GAAP) increased 13 basis point to 2.40% from 2.27% in sequential-quarter comparison. The investment portfolio had a net unrealized loss of $216.9 million at September 30, 2022 as compared to a net unrealized loss of $149.1 million at June 30, 2022.

The FTE average yield on all earning assets (non-GAAP) increased in sequential-quarter comparison from 3.36% to 3.83%. Interest expense on average interest bearing liabilities increased 9 basis points from 0.39% for the second quarter of 2022 to 0.48% for the third quarter of 2022. Cost of all deposits averaged 19 basis points for the third quarter of 2022 compared to 14 basis points for the second quarter of 2022.

Non-interest income increased $0.4 million from $8.7 million to $9.0 million in the sequential-quarter comparison, attributable to increases in service charges on deposits accounts of $0.2 million and interchange fee income of $0.2 million.

Non-interest expense for the third quarter of 2022 was $35.9 million compared to $31.0 million for the second quarter of 2022, an increase of $4.9 million, largely attributed to the increase in acquisition charges and charter conversion expenses of $2.5 million and $2.1 million in expenses related to the operations of Beach Bank.

Third Quarter 2022 vs. Third Quarter 2021 Earnings Comparison

Net income available to common shareholders for the third quarter of 2022 totaled $14.0 million compared to $16.1 million for the third quarter of 2021, a decrease of $2.1 million or 12.9%.

Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) increased $3.5 million, or 21.9%, to $19.6 million for quarter ended September 30, 2022 as compared to $16.1 million for the quarter ended September 30, 2021.

Net interest income for the third quarter of 2022 was $49.1 million, an increase of $9.1 million or 22.8% when compared to the third quarter of 2021. Fully tax equivalent (“FTE”) net interest income (non-GAAP) totaled $50.1 million and $40.7 million for the third quarter of 2022 and 2021, respectively. Purchase accounting adjustments decreased $0.3 million for the third quarter comparisons. Third quarter of 2022 FTE net interest margin (non-GAAP) was 3.50% which included 6 basis points related to purchase accounting adjustments compared to 3.25% for the same quarter in 2021, which included 10 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin (non-GAAP) increased 29 basis point in prior year quarterly comparison.

Non-interest income decreased $0.6 million for the third quarter of 2022 as compared to the third quarter of 2021. This decrease was attributable to a $0.5 million decrease in mortgage income.

Third quarter 2022 non-interest expense was $35.9 million, an increase of $6.9 million, or 23.6% as compared to the third quarter of 2021. Charges related to the acquisitions of Beach Bank and Heritage Bank as well as charter conversion expenses accounted for $3.5 million. For the third quarter of 2022, charges related to the ongoing operations of the Cadence Bank branches totaled $0.8 million and Beach Bank totaled $2.1 million.

Investment securities totaled $2.004 billion, or 31.0% of total assets at September 30, 2022, compared to $1.485 billion, or 27.0% of total assets at September 30, 2021. For the third quarter of 2022 compared to the third quarter of 2021, the average balance of investment securities increased $727.3 million. The average tax equivalent yield on investment securities (non-GAAP) increased 18 basis points to 2.40% from 2.22% in the prior year quarterly comparison. The investment portfolio had a net unrealized loss of $216.9 million at September 30, 2022 as compared to a net unrealized gain of $18.2 million at September 30, 2021.

The FTE average yield on all earning assets (non-GAAP) increased 23 basis points in prior year quarterly comparison, from 3.60% for the third quarter of 2021 to 3.83% for the third quarter of 2022. Interest expense on average interest bearing liabilities decreased 4 basis points from 0.52% for the third quarter of 2021 to 0.48% for the third quarter of 2022. Cost of all deposits averaged 19 basis points for the third quarter of 2022 compared to 22 basis points for the third quarter of 2021.

Year-to-Date Earnings Comparison

In the year-over-year comparison, net income available to common shareholders decreased $1.8 million, or 3.6%, from $48.4 million for the nine months ended September 30, 2021 to $46.6 million for the same period ended September 30, 2022.

Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) increased $2.8 million, or 5.7%, to $51.1 million for the nine months ended September 30, 2022 as compared to $48.4 million for the same period ended September 30, 2021.

Net interest income after provision for credit losses was $125.0 million for the nine months ended September 30, 2022, an increase of $7.7 million as compared to the same period ended September 30, 2021, primarily due to interest income earned on a higher volume of loans and securities and increased interest rates.

Non-interest income was $28.8 million for the nine months ended September 30, 2022, an increase of $1.0 million as compared to the same period ended September 30, 2021. Service charges on deposit accounts and interchange fee income accounted for $2.0 million of the increase with mortgage income decreasing $3.6 million.

Non-interest expense was $95.4 million for the nine months ended September 30, 2022, an increase of $11.7 million as compared to the same period ended September 30, 2021. An increase of $5.2 million in acquisition and charter conversion charges and $2.5 million related to the ongoing operations of the Cadence Bank branches and $2.1 million related to the Beach Bank branch operations accounted for the increase in non-interest expense.

Declaration of Cash Dividend

The Company announced that its Board of Directors declared a cash dividend of $0.20 per share, a 5% increase over previous quarter, to be paid on its common stock on November 25, 2022 to shareholders of record as of the close of business on November 8, 2022.

Conference Call

The Company will host a conference call for analysts and investors to discuss the Company’s financial results at 9:30 a.m. Central Time on Friday, October 28, 2022. Investors and analysts may participate by clicking on the Participant Conference Link: https://register.vevent.com/register/BIc9ba7613e20a435da01c24aa3cc80021.

An audio archive of the conference call along with the transcript will be available within 24-48 hours after the call and placed in the Investor Relations section of our website.

About The First Bancshares, Inc.

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

Non-GAAP Financial Measures

Our accounting and reporting policies conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, certain non-GAAP measures are used by management to supplement the evaluation of our performance. This press release includes pre-tax, pre-provision operating earnings, FTE net interest income, FTE net interest margin, core net interest margin, average tax equivalent yield on investment securities, FTE average yield on all earning assets, total tangible common equity, tangible book value per common share , net earnings available to common shareholders, operating, diluted earnings per share, 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 earnings available to common shareholders, diluted earnings per share, efficiency ratio, or other GAAP financial measures as a measure of operating performance. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure is provided in this press release following the Condensed Consolidated Financial Information (unaudited).

Additional Information about the Merger and Where to Find It

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

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

Forward Looking Statements

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

All statements other than statements of historical fact are forward-looking statements. Such statements can generally be identified by such words as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “should,” “predicts,” “could,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential,” “positioned” and other similar words and expressions of the future or otherwise regarding the outlook for the Company’s future business and financial performance and/or the performance of the banking industry and economy in general. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risk and uncertainties which may cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. Factors that might cause such differences include, but are not limited to: (1) competitive pressures among financial institutions increasing significantly; (2) changes in economic or political conditions, either nationally or locally, particularly in areas in which the Company conducts operations; (3) interest rate risk; (4) 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 and pending acquisitions, including that the anticipated benefits from the recently completed acquisitions are not realized in the time frame anticipated or at all as a result of changes in general economic and market conditions or other unexpected factors or events; (7) changes in management’s plans for the future; (8) credit risk associated with our lending activities; changes in interest rates, loan demand, real estate values, or competition; (9) changes in accounting principles, policies, or guidelines; (10) 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; (11) the continued impact of the COVID-19 pandemic and related variants on the Company’s assets, business, cash flows, financial condition, liquidity, prospects and results of operations; (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) the effects of war or other conflicts including the impacts relating to or resulting from Russia’s military action in Ukraine; and (15) other general competitive, economic, political, and market factors, including those affecting our business, operations, pricing, products, or services.

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

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

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(Dollars in thousands except per share data)

EARNINGS DATA

Quarter

Ended

9/30/22

Quarter

Ended

6/30/22

Quarter

Ended

3/31/22

Quarter

Ended

12/31/21

Quarter

Ended

9/30/21

Total Interest Income

$

53,874

 

$

45,847

 

$

42,741

 

$

43,885

 

$

44,435

 

Total Interest Expense

 

4,726

 

 

3,746

 

 

4,102

 

 

4,128

 

 

4,407

 

Net Interest Income

 

49,148

 

 

42,101

 

 

38,639

 

 

39,757

 

 

40,028

 

Net Interest Income excluding PPP Fee Income

 

48,986

 

 

41,563

 

 

37,643

 

 

37,151

 

 

37,294

 

FTE net interest income*

 

50,122

 

 

43,042

 

 

39,459

 

 

40,425

 

 

40,673

 

Provision for credit losses

 

4,300

 

 

600

 

 

-

 

 

(1,104

)

 

-

 

Non-interest income

 

9,022

 

 

8,664

 

 

11,157

 

 

9,593

 

 

9,586

 

Non-interest expense

 

35,903

 

 

30,955

 

 

28,590

 

 

30,789

 

 

29,053

 

Earnings before income taxes

 

17,967

 

 

19,210

 

 

21,206

 

 

19,665

 

 

20,561

 

Income tax expense

 

3,924

 

 

3,457

 

 

4,377

 

 

3,874

 

 

4,429

 

Net income available to common shareholders

$

14,043

 

$

15,753

 

$

16,829

 

$

15,791

 

$

16,132

 

 

 

 

 

 

 

 

 

 

 

 

 

PER COMMON SHARE DATA

 

 

 

 

 

Basic earnings per share

$

0.61

 

$

0.77

 

$

0.81

 

$

0.75

 

$

0.77

 

Diluted earnings per share

 

0.61

 

 

0.76

 

 

0.81

 

 

0.75

 

 

0.76

 

Diluted earnings per share, operating*

 

0.85

 

 

0.80

 

 

0.72

 

 

0.76

 

 

0.76

 

Quarterly dividends per share

 

.19

 

 

.18

 

 

.17

 

 

.16

 

 

.15

 

Book value per common share at end of period

 

25.86

 

 

27.30

 

 

28.82

 

 

32.17

 

 

31.81

 

Tangible book value per common share at period end*

 

16.93

 

 

18.32

 

 

19.79

 

 

23.31

 

 

23.03

 

Market price at end of period

 

29.87

 

 

28.60

 

 

33.66

 

 

38.62

 

 

38.78

 

Shares outstanding at period end

 

24,028,120

 

 

20,529,124

 

 

20,484,830

 

 

21,019,037

 

 

21,019,897

 

Weighted average shares outstanding:

 

 

 

 

 

Basic

 

22,861,795

 

 

20,507,451

 

 

20,697,946

 

 

21,020,768

 

 

21,020,128

 

Diluted

 

22,979,529

 

 

20,615,928

 

 

20,846,997

 

 

21,175,323

 

 

21,211,716

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCE SHEET DATA

 

 

 

 

 

Total assets

$

6,372,872

 

$

6,112,241

 

$

6,202,669

 

$

5,664,336

 

$

5,504,107

 

Loans and leases

 

3,492,110

 

 

3,013,228

 

 

2,945,877

 

 

2,956,657

 

 

2,983,771

 

Total deposits

 

5,503,040

 

 

5,347,415

 

 

5,361,480

 

 

4,814,945

 

 

4,665,914

 

Total common equity

 

630,744

 

 

593,410

 

 

666,561

 

 

672,121

 

 

664,594

 

Total tangible common equity*

 

424,873

 

 

408,855

 

 

480,922

 

 

500,639

 

 

479,540

 

 

 

 

 

 

 

SELECTED RATIOS

 

 

 

 

 

Annualized return on avg assets (ROA)

 

0.88

%

 

1.03

%

 

1.09

%

 

1.12

%

 

1.17

%

Annualized return on avg assets, operating*

 

1.23

%

 

1.08

%

 

0.97

%

 

1.13

%

 

1.17

%

Annualized pre-tax, pre-provision, operating*

 

1.63

%

 

1.36

%

 

1.24

%

 

1.33

%

 

1.49

%

Annualized return on avg common equity, operating*

 

12.46

%

 

11.12

%

 

8.99

%

 

9.53

%

 

9.70

%

Annualized return on avg tangible common equity, oper*

 

18.49

%

 

16.14

%

 

12.46

%

 

12.80

%

 

13.44

%

Average loans to average deposits

 

63.46

%

 

56.35

%

 

54.95

%

 

61.41

%

 

63.95

%

FTE Net Interest Margin*

 

3.50

%

 

3.09

%

 

2.78

%

 

3.14

%

 

3.25

%

Efficiency Ratio

 

60.70

%

 

59.87

%

 

56.48

%

 

61.56

%

 

57.81

%

Efficiency Ratio, operating*

 

54.55

%

 

57.66

%

 

58.37

%

 

59.91

%

 

56.62

%

*See reconciliation of Non-GAAP financial measures

 

 

 

 

 

CREDIT QUALITY

 

 

 

 

 

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

 

1.03

%

 

1.04

%

 

1.06

%

 

1.04

%

 

1.09

%

Nonperforming assets to tangible equity + ACL

 

6.01

%

 

6.41

%

 

6.31

%

 

5.88

%

 

5.43

%

Nonperforming assets to total loans + OREO

 

0.72

%

 

0.84

%

 

0.93

%

 

1.03

%

 

0.95

%

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

 

(0.04

%)

 

(0.04

%)

 

(0.12

%)

 

0.03

%

 

0.005

%

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

BALANCE SHEET

Sept 30,

2022

June 30,

2022

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

Assets

 

 

 

 

 

Cash and cash equivalents

$

163,841

 

$

356,771

 

$

802,613

 

$

919,713

 

$

657,296

 

Securities available for sale

 

1,379,410

 

 

1,489,247

 

 

1,591,677

 

 

1,751,832

 

 

1,463,255

 

Securities held to maturity

 

593,553

 

 

593,154

 

 

372,062

 

 

-

 

 

-

 

Other investments

 

31,060

 

 

22,588

 

 

22,226

 

 

22,226

 

 

22,225

 

Total investment securities

 

2,004,023

 

 

2,104,989

 

 

1,985,965

 

 

1,774,058

 

 

1,485,480

 

Loans held for sale

 

2,225

 

 

6,703

 

 

8,213

 

 

7,678

 

 

8,540

 

Total loans

 

3,719,388

 

 

3,124,924

 

 

2,970,246

 

 

2,959,553

 

 

2,960,919

 

Allowance for credit losses

 

(38,356

)

 

(32,400

)

 

(31,620

)

 

(30,742

)

 

(32,418

)

Loans, net

 

3,681,032

 

 

3,092,524

 

 

2,938,626

 

 

2,928,811

 

 

2,928,501

 

Premises and equipment

 

150,480

 

 

132,724

 

 

131,813

 

 

132,448

 

 

123,594

 

Other Real Estate Owned

 

10,328

 

 

1,985

 

 

2,835

 

 

2,565

 

 

2,580

 

Goodwill and other intangibles

 

214,708

 

 

184,323

 

 

185,104

 

 

186,171

 

 

184,545

 

Other assets

 

228,211

 

 

157,406

 

 

140,926

 

 

125,970

 

 

121,348

 

Total assets

$

6,454,848

 

$

6,037,425

 

$

6,196,095

 

$

6,077,414

 

$

5,511,884

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Non-interest bearing deposits^

$

1,770,848

 

$

1,658,288

 

$

1,648,451

 

$

1,550,381

 

$

1,424,208

 

Interest-bearing deposits

 

3,780,450

 

 

3,647,909

 

 

3,789,333

 

 

3,676,403

 

 

3,248,333

 

Total deposits

 

5,551,298

 

 

5,306,197

 

 

5,437,784

 

 

5,226,784

 

 

4,672,541

 

Borrowings

 

90,000

 

 

-

 

 

-

 

 

-

 

 

-

 

Subordinated debentures

 

144,952

 

 

144,876

 

 

144,801

 

 

144,726

 

 

144,650

 

Other liabilities

 

47,127

 

 

25,900

 

 

23,117

 

 

29,732

 

 

26,010

 

Total liabilities

 

5,833,377

 

 

5,476,973

 

 

5,605,655

 

 

5,401,242

 

 

4,843,201

 

Total shareholders’ equity

 

621,471

 

 

560,452

 

 

590,440

 

 

676,172

 

 

668,683

 

Total liabilities and shareholders’ equity

$

6,454,848

 

$

6,037,425

 

$

6,196,095

 

$

6,077,414

 

$

5,511,884

 

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT

Three Months Ended

9/30/22

6/30/22

3/31/22

12/31/21

9/30/21

Interest Income:

 

 

 

 

 

Loans, including fees

$

41,456

 

$

34,058

 

$

33,354

 

$

36,035

 

$

36,374

 

Investment securities

 

11,598

 

 

11,152

 

 

8,574

 

 

7,032

 

 

6,938

 

Accretion of purchase accounting adjustments

 

818

 

 

605

 

 

800

 

 

800

 

 

1,106

 

Other interest income

 

2

 

 

32

 

 

13

 

 

18

 

 

17

 

Total interest income

 

53,874

 

 

45,847

 

 

42,741

 

 

43,885

 

 

44,435

 

Interest Expense:

 

 

 

 

 

Deposits

 

2,863

 

 

1,923

 

 

2,302

 

 

2,371

 

 

2,649

 

Borrowings

 

92

 

 

-

 

 

-

 

 

-

 

 

-

 

Subordinated debentures

 

1,886

 

 

1,841

 

 

1,819

 

 

1,818

 

 

1,819

 

Accretion of purchase accounting adjustments

 

(115

)

 

(18

)

 

(19

)

 

(61

)

 

(61

)

Total interest expense

 

4,726

 

 

3,746

 

 

4,102

 

 

4,128

 

 

4,407

 

Net interest income

 

49,148

 

 

42,101

 

 

38,639

 

 

39,757

 

 

40,028

 

Provision for credit losses

 

4,300

 

 

600

 

 

-

 

 

(1,104

)

 

-

 

Net interest income after provision for credit losses

 

44,848

 

 

41,501

 

 

38,639

 

 

40,861

 

 

40,028

 

 

 

 

 

 

 

Non-interest Income:

 

 

 

 

 

Service charges on deposit accounts

 

2,219

 

 

2,038

 

 

2,040

 

 

1,901

 

 

1,846

 

Mortgage Income

 

1,221

 

 

1,227

 

 

1,230

 

 

1,556

 

 

1,732

 

Interchange Fee Income

 

3,310

 

 

3,102

 

 

3,197

 

 

3,029

 

 

2,744

 

Gain (Loss) on securities, net

 

1

 

 

(80

)

 

(3

)

 

36

 

 

11

 

Financial Assistance Award/Bank Enterprise Award/RRP Grant

 

-

 

 

171

 

 

702

 

 

-

 

 

1,826

 

Bargain Purchase Gain and (Loss) on Sale of Land

 

-

 

 

165

 

 

-

 

 

1,300

 

 

(397

)

BOLI income from death proceeds

 

-

 

 

-

 

 

1,630

 

 

-

 

 

-

 

Other charges and fees

 

2,271

 

 

2,041

 

 

2,361

 

 

1,771

 

 

1,824

 

Total non-interest income

 

9,022

 

 

8,664

 

 

11,157

 

 

9,593

 

 

9,586

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

Salaries and employee benefits

 

19,099

 

 

17,237

 

 

16,799

 

 

17,519

 

 

16,246

 

Occupancy expense

 

3,826

 

 

3,828

 

 

3,876

 

 

3,948

 

 

3,922

 

FDIC/OCC premiums

 

496

 

 

546

 

 

566

 

 

550

 

 

532

 

Marketing

 

50

 

 

122

 

 

86

 

 

113

 

 

78

 

Amortization of core deposit intangibles

 

1,227

 

 

1,064

 

 

1,064

 

 

982

 

 

1,052

 

Other professional services

 

1,256

 

 

768

 

 

563

 

 

1,282

 

 

934

 

Acquisition and charter conversion charges

 

3,640

 

 

1,172

 

 

408

 

 

1,602

 

 

5

 

Other non-interest expense

 

6,309

 

 

6,218

 

 

5,228

 

 

4,793

 

 

6,284

 

Total Non-interest expense

 

35,903

 

 

30,955

 

 

28,590

 

 

30,789

 

 

29,053

 

Earnings before income taxes

 

17,967

 

 

19,210

 

 

21,206

 

 

19,665

 

 

20,561

 

Income tax expense

 

3,924

 

 

3,457

 

 

4,377

 

 

3,874

 

 

4,429

 

Net income available to common shareholders

$

14,043

 

$

15,753

 

$

16,829

 

$

15,791

 

$

16,132

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

0.61

 

$

0.76

 

$

0.81

 

$

0.75

 

$

0.76

 

Diluted earnings per common share, operating*

$

0.85

 

$

0.80

 

$

0.72

 

$

0.76

 

$

0.76

 

*See reconciliation of Non-GAAP financial measures

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT

Year to Date

 

2022

 

2021

 

Interest Income:

 

 

 

 

 

Loans, including fees

 

$

108,868

 

 

$

111,245

 

 

Investment securities

 

 

31,324

 

 

 

18,389

 

 

Accretion of purchase accounting adjustments

 

 

2,223

 

 

 

3,123

 

 

Other interest income

 

47

 

 

103

 

Total interest income

 

 

142,462

 

 

 

132,860

 

 

Interest Expense:

 

 

 

 

 

Deposits

 

 

7,089

 

 

 

9,934

 

 

Borrowings

 

 

92

 

 

 

340

 

 

Subordinated debentures

 

 

5,546

 

 

 

5,461

 

 

Amortization of purchase accounting adjustments

 

(152

)

 

(182

)

Total interest expense

 

12,575

 

 

15,553

 

Net interest income

 

 

129,887

 

 

 

117,307

 

 

Provision for credit losses

 

4,900

 

 

-

 

Net interest income after provision for credit losses

 

 

124,987

 

 

 

117,307

 

 

 

 

 

 

 

 

Non-interest Income:

 

 

 

 

 

Service charges on deposit accounts

 

 

6,297

 

 

 

5,363

 

 

Mortgage Income

 

 

3,678

 

 

 

7,266

 

 

Interchange Fee Income

 

 

9,609

 

 

 

8,533

 

 

Gain (loss) on securities, net

 

 

(82

)

 

 

107

 

 

Financial Assistance Award/Bank Enterprise Award/RRP Grant

 

 

873

 

 

 

1,826

 

 

Bargain Purchase Gain and Loss on Sale of Fixed Assets

 

165

 

 

 

(397

)

BOLI income from death proceeds

 

1,630

 

 

 

-

 

Other charges and fees

 

6,673

 

 

5,183

 

Total non-interest income

 

 

28,843

 

 

 

27,881

 

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

Salaries and employee benefits

 

 

53,135

 

 

 

48,337

 

 

Occupancy expense

 

 

11,530

 

 

 

11,614

 

 

FDIC/OCC premiums

 

 

1,608

 

 

 

1,524

 

 

Marketing

 

 

258

 

 

 

277

 

 

Amortization of core deposit intangibles

 

 

3,355

 

 

 

3,155

 

 

Other professional services

 

 

2,587

 

 

 

2,917

 

 

Acquisition & charter conversion charges

 

 

5,220

 

 

 

5

 

 

Other non-interest expense

 

17,755

 

 

15,941

 

Total Non-interest expense

 

95,448

 

 

83,770

 

Earnings before income taxes

 

 

58,382

 

 

 

61,418

 

 

Income tax expense

 

11,758

 

 

13,042

 

Net income available to common shareholders

$

46,624

 

$

48,376

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

2.17

 

$

2.28

 

Diluted earnings per common share, operating*

$

2.38

 

$

2.28

 

*See reconciliation of Non-GAAP financial measures

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(Dollars in thousands)

COMPOSITION OF LOANS

Sept 30,

2022

Percent

of Total

June 30,

2022

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

Percent

of Total

Commercial, financial and agricultural

$

489,225

 

13.1

%

$

379,363

 

$

364,702

 

$

375,379

 

$

426,342

 

14.4

%

Real estate – construction

 

481,100

 

12.9

%

 

429,946

 

 

387,290

 

 

364,075

 

 

361,732

 

12.2

%

Real estate – commercial

 

1,595,944

 

42.8

%

 

1,319,821

 

 

1,249,203

 

 

1,242,529

 

 

1,206,267

 

40.6

%

Real estate – residential

 

1,082,488

 

29.1

%

 

932,268

 

 

911,568

 

 

916,179

 

 

910,618

 

30.7

%

Lease Financing Receivable

 

1,907

 

0.1

%

 

2,283

 

 

2,409

 

 

2,556

 

 

2,889

 

0.1

%

Obligations of States & subdivisions

 

25,757

 

0.7

%

 

20,784

 

 

15,842

 

 

16,765

 

 

15,790

 

0.5

%

Consumer

 

42,967

 

1.2

%

 

40,459

 

 

39,233

 

 

42,070

 

 

37,281

 

1.2

%

Loans held for sale

 

2,225

 

0.1

%

 

6,703

 

 

8,213

 

 

7,678

 

 

8,540

 

0.3

%

Total loans

$

3,721,613

 

100

%

$

3,131,627

 

$

2,978,460

 

$

2,967,231

 

$

2,969,459

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPOSITION OF DEPOSITS

Sept 30,

2022

Percent

of Total

June 30,

2022

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

Percent

of Total

Non-interest bearing

$

1,770,848

 

31.9

%

$

1,658,288

 

$

1,648,451

 

$

1,550,381

 

$

1,424,208

 

30.5

%

NOW and other

 

1,786,213

 

32.2

%

 

1,790,980

 

 

1,885,145

 

 

1,771,510

 

 

1,524,935

 

32.6

%

Money Market/Savings

 

1,423,953

 

25.7

%

 

1,326,245

 

 

1,337,419

 

 

1,320,284

 

 

1,214,011

 

26.0

%

Time Deposits of less than $250,000

 

418,931

 

7.5

%

 

400,354

 

 

424,183

 

 

445,879

 

 

390,289

 

8.4

%

Time Deposits of $250,000 or more

 

151,353

 

2.7

%

 

130,330

 

 

142,539

 

 

138,730

 

 

119,098

 

2.5

%

Total Deposits

$

5,551,298

 

100

%

$

5,306,197

 

$

5,437,737

 

$

5,226,784

 

$

4,672,541

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSET QUALITY DATA

Sept 30,

2022

 

June 30,

2022

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

 

Nonaccrual loans

$

15,844

 

 

$

23,678

 

$

24,736

 

$

28,013

 

$

25,012

 

 

Loans past due 90 days and over

 

571

 

 

 

527

 

 

-

 

 

45

 

 

456

 

 

Total nonperforming loans

 

16,415

 

 

 

24,205

 

 

24,736

 

 

28,058

 

 

25,468

 

 

Other real estate owned

 

10,328

 

 

 

1,985

 

 

2,834

 

 

2,565

 

 

2,580

 

 

Total nonperforming assets

$

26,743

 

$

26,190

 

$

27,570

 

$

30,623

 

$

28,048

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

0.41

%

 

 

0.43

%

 

0.44

%

 

0.50

%

 

0.51

%

 

Nonperforming assets to total loans + OREO

 

0.72

%

 

 

0.84

%

 

0.93

%

 

1.03

%

 

0.95

%

 

ACL to nonperforming loans

 

233.66

%

 

 

133.86

%

 

127.83

%

 

109.57

%

 

127.29

%

 

ACL to total loans

 

1.03

%

 

 

1.04

%

 

1.06

%

 

1.04

%

 

1.09

%

 

 

 

 

 

 

 

 

 

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

$

(353

)

 

$

(329

)

$

(879

)

$

220

 

$

39

 

 

Annualized QTD net chg-offs (recs) to loans

 

(0.04

%)

 

 

(0.04

%)

 

(0.12

%)

 

0.03

%

 

0.005

%

 

FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(dollars in thousands)
 

Yield

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

Analysis

 

September 30, 2022

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

September 30, 2021

 

 

 

 

Tax

 

 

 

 

 

Tax

 

 

 

 

 

Tax

 

 

 

 

 

Tax

 

 

 

 

 

Tax

 

 

 

 

Avg

 

Equivalent

 

Yield/

 

Avg

 

Equivalent

 

Yield/

 

Avg

 

Equivalent

 

Yield/

 

Avg

 

Equivalent

 

Yield/

 

Avg

 

Equivalent

 

Yield/

 

 

Balance

 

interest

 

Rate

 

Balance

 

interest

 

Rate

 

Balance

 

interest

 

Rate

 

Balance

 

interest

 

Rate

 

Balance

 

interest

 

Rate

 
Taxable securities

$

1,612,066

$

8,723

2.16

%

$

1,634,679

$

8,372

2.05

%

$

1,413,523

$

6,152

1.74

%

$

1,166,432

$

5,059

1.73

%

$

986,325

$

5,033

2.04

%

Tax-exempt
securities

 

479,168

 

3,849

3.21

%

 

492,405

 

3,721

3.02

%

 

483,780

 

3,242

2.68

%

 

397,906

 

2,641

2.65

%

 

377,610

 

2,550

2.70

%

Total investment
securities

 

2,091,234

 

12,572

2.40

%

 

2,127,084

 

12,093

2.27

%

 

1,897,303

 

9,394

1.98

%

 

1,564,338

 

7,700

1.97

%

 

1,363,935

 

7,583

2.22

%

in other banks

 

143,867

 

2

0.01

%

 

432,851

 

32

0.03

%

 

825,877

 

13

0.01

%

 

634,541

 

18

0.01

%

 

657,387

 

17

0.01

%

Loans

 

3,492,110

 

42,274

4.84

%

 

3,013,228

 

34,663

4.60

%

 

2,945,877

 

34,154

4.64

%

 

2,956,657

 

36,835

4.98

%

 

2,983,771

 

37,480

5.02

%

Total Interest
earning assets

 

5,727,211

 

54,848

3.83

%

 

5,573,163

 

46,788

3.36

%

 

5,669,057

 

43,561

3.07

%

 

5,155,536

 

44,553

3.46

%

 

5,005,093

 

45,080

3.60

%

Other assets

 

645,661

 

539,078

 

533,612

 

508,800

 

506,134

Total assets

$

6,372,872

$

6,112,241

$

6,202,669

$

5,664,336

$

5,511,227

 
Interest-bearing
liabilities:
Deposits

$

3,777,059

$

2,748

0.29

%

$

3,706,711

$

1,905

0.21

%

$

3,786,808

$

2,283

0.24

%

$

3,330,603

$

2,310

0.28

%

$

3,274,257

$

2,588

0.32

%

Borrowed Funds

 

13,261

 

92

2.78

%

 

-

 

-

0.00

%

 

-

 

-

0.00

%

 

-

 

-

 

206

 

-

0.00

%

Subordinated
debentures

 

144,910

 

1,886

5.21

%

 

144,834

 

1,841

5.08

%

 

144,759

 

1,819

5.03

%

 

144,684

 

1,818

5.03

%

 

144,630

 

1,819

5.03

%

Total interest
bearing liabilities

 

3,935,230

 

4,726

0.48

%

 

3,851,545

 

3,746

0.39

%

 

3,931,567

 

4,102

0.42

%

 

3,475,287

 

4,128

0.48

%

 

3,419,093

 

4,407

0.52

%

Other liabilities

 

1,806,898

 

1,667,286

 

1,604,541

 

1,516,928

 

1,427,540

Shareholders' equity

 

630,744

 

593,410

 

666,561

 

672,121

 

664,594

Total liabilities and
shareholders'
equity

$

6,372,872

$

6,112,241

$

6,202,669

$

5,664,336

$

5,511,227

 
Net interest
income (FTE)*

$

50,122

3.35

%

$

43,042

2.96

%

$

39,459

2.66

%

$

40,425

2.98

%

$

40,673

3.09

%

 
Net interest margin (FTE)*

3.50

%

3.09

%

2.78

%

3.14

%

3.25

%

 
Core net interest
margin*

3.44

%

3.04

%

2.73

%

3.07

%

3.15

%

 
*See reconciliation for Non-GAAP financial measures
FIRST BANCSHARES, INC and SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measures (unaudited) (in thousands except per share data)

Three Months Ended

 

Per Common Share Data

Sept 30,

2022

June 30,

2022

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

Book value per common share

$

25.86

 

$

27.30

 

$

28.82

 

$

32.17

 

$

31.81

 

Effect of intangible assets per share

 

8.93

 

 

8.98

 

 

9.03

 

 

8.86

 

 

8.78

 

Tangible book value per common share

$

16.93

 

$

18.32

 

$

19.79

 

$

23.31

 

$

23.03

 

 

Diluted earnings per share

$

0.61

 

$

0.76

 

$

0.81

 

$

0.75

 

$

0.76

 

Effect of acquisition and charter conversion charges

 

0.16

 

 

0.05

 

 

0.02

 

 

0.07

 

 

-

 

Tax on acquisition and charter conversion charges

 

(0.05

)

 

(0.01

)

 

-

 

 

(0.02

)

 

-

 

Initial provision for acquired loans

 

0.17

 

 

-

 

 

-

 

 

-

 

 

-

 

Tax on initial provision for acquired loans

 

(0.04

)

 

-

 

 

-

 

 

-

 

 

-

 

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

 

-

 

 

-

 

 

-

 

 

(0.06

)

 

0.02

 

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

 

-

 

 

-

 

 

-

 

 

0.02

 

 

-

 

Effect of Treasury awards

 

-

 

 

-

 

 

(0.03

)

 

-

 

 

(0.09

)

Tax on Treasury awards

 

-

 

 

-

 

 

-

 

 

-

 

 

0.02

 

BOLI income from death proceeds

 

-

 

 

-

 

 

(0.08

)

 

-

 

 

-

 

Effect on Contributions related to Treasury awards

 

-

 

 

-

 

 

-

 

 

-

 

 

0.07

 

Tax on Contributions related to Treasury awards

 

-

 

 

-

 

 

-

 

 

-

 

 

(0.02

)

Diluted earnings per share, operating

$

0.85

 

$

0.80

 

$

0.72

 

$

0.76

 

$

0.76

 

 

Year to Date

2022

 

2021

 

Diluted earnings per share

$

2.17

 

 

$

2.28

 

 

Effect of acquisition and charter conversion charges

 

 

0.24

 

 

 

-

 

 

Tax on acquisition and charter conversion charges

 

 

(0.06

)

 

 

-

 

 

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

 

 

(0.01

)

 

 

0.02

 

 

Effect of Treasury awards

 

 

(0.04

)

 

 

-

 

 

Tax on Treasury awards

 

 

0.01

 

 

 

(0.09

)

 

BOLI income from death proceeds

 

 

(0.08

)

 

 

0.02

 

 

Effect on Contributions related to Treasury awards

 

 

0.01

 

 

 

0.07

 

 

Tax on Contributions related to Treasury awards

 

 

-

 

 

(0.02

)

 

Initial provision for acquired loans

 

 

0.18

 

 

Tax on initial provision for acquired loans

 

 

(0.04

)

 

-

 

 

Diluted earnings per share, operating

 

$

2.38

 

$

2.28

 

 

 

Year to Date

2022

 

2021

 

Net income available to common shareholders

$

46,624

 

 

$

48,376

 

 

Acquisition and charter conversion charges

 

 

5,220

 

 

 

5

 

 

Tax on acquisition and charter conversion charges

 

 

(1,320

)

 

 

(1

)

 

Bargain purchase gain and loss on sale of fixed assets

 

 

(165

)

 

 

397

 

 

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

 

 

42

 

 

 

(100

)

 

Treasury awards

 

 

(872

)

 

 

(1,826

)

 

Tax on Treasury awards

 

 

221

 

 

 

462

 

 

BOLI income from death proceeds

 

 

(1,630

)

 

 

-

 

 

Contributions related to Treasury awards

 

 

165

 

 

 

1,400

 

 

Tax on Contributions related to Treasury awards

 

 

(42

)

 

(354

)

 

Initial provision for acquired loans

 

 

3,855

 

 

-

 

 

Tax on initial provision for acquired loans

 

 

(976

)

 

-

 

 

Net earnings available to common shareholders, operating

 

$

51,122

 

$

48,359

 

 

 

Three Months Ended

Average Balance Sheet Data

 

Sept 30,

2022

June 30,

2022

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

Total average assets

A

$

6,372,872

 

$

6,112,241

 

$

6,202,669

 

$

5,664,336

 

$

5,504,107

 

Total average earning assets

B

 

5,727,211

 

$

5,573,163

 

$

5,669,057

 

$

5,155,536

 

$

5,005,093

 

 

 

 

 

 

 

 

Common Equity

C

$

630,744

 

$

593,410

 

$

666,561

 

$

672,121

 

$

664,594

 

Less intangible assets

 

 

205,871

 

 

184,555

 

 

185,639

 

 

171,482

 

 

185,054

 

Total Tangible common equity

D

$

424,873

 

$

408,855

 

$

480,922

 

$

500,639

 

$

479,540

 

 

 

 

 

 

Three Months Ended

Net Interest Income Fully Tax Equivalent

 

Sept 30,

2022

June 30,

2022

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

Net interest income

E

$

49,148

 

$

42,101

 

$

38,639

 

$

39,757

 

$

40,028

 

Tax-exempt investment income

 

 

(2,875

)

 

(2,780

)

 

(2,422

)

 

(1,973

)

 

(1,905

)

Taxable investment income

 

 

3,849

 

 

3,721

 

 

3,242

 

 

2,641

 

 

2,550

 

Net Interest Income Fully Tax Equivalent

F

$

50,122

 

$

43,042

 

$

39,459

 

$

40,425

 

$

40,673

 

 

 

 

 

 

 

 

Annualized Net Interest Margin

E/B

 

3.43

%

 

3.02

%

 

2.73

%

 

3.08

%

 

3.20

%

Annualized Net Interest Margin, Fully Tax Equivalent

F/B

 

3.50

%

 

3.09

%

 

2.78

%

 

3.14

%

 

3.25

%

 

 

 

 

 

 

 

Total Interest Income, Fully Tax Equivalent

 

 

 

 

 

 

Total Interest Income

 

$

53,874

 

$

45,847

 

$

42,741

 

$

43,885

 

$

44,435

 

Tax-exempt investment income

 

 

(2,875

)

 

(2,780

)

 

(2,422

)

 

(1,973

)

 

(1,905

)

Taxable investment income

 

 

3,849

 

 

3,721

 

 

3,242

 

 

2,641

 

 

2,550

 

Total Interest Income, Fully Tax Equivalent

G

$

54,848

 

$

46,788

 

$

43,561

 

$

44,553

 

$

45,080

 

 

 

 

 

 

 

 

Yield on Average Earning Assets, Fully Tax Equivalent

G/B

 

3.83

%

 

3.36

%

 

3.07

%

 

3.46

%

 

3.60

%

 

 

 

 

 

 

 

Interest Income Investment Securities, Fully Tax Equivalent

 

 

 

 

 

 

Interest Income Investment Securities

 

$

11,598

 

$

11,152

 

$

8,574

 

$

7,032

 

$

6,938

 

Tax-exempt investment income

 

 

(2,875

)

 

(2,780

)

 

(2,422

)

 

(1,973

)

 

(1,905

)

Taxable investment Income

 

 

3,849

 

 

3,721

 

 

3,242

 

 

2,641

 

 

2,550

 

Interest Income Investment Securities, Fully Tax Equivalent

H

$

12,572

 

$

12,093

 

$

9,394

 

$

7,700

 

$

7,583

 

 

 

 

 

 

 

Average Investment Securities

I

$

2,091,234

 

$

2,127,084

 

$

1,897,303

 

$

1,564,338

 

$

1,364,431

 

 

 

 

 

 

 

Yield on Investment Securities, Fully Tax Equivalent

H/I

 

2.40

%

 

2.27

%

 

1.98

%

 

1.97

%

 

2.22

%

 

 

 

 

 

 

 

 

Three Months Ended

Core Net Interest Margin

 

Sept 30,

2022

June 30,

2022

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

Net interest income (FTE)

 

$

50,122

 

$

43,042

 

$

39,459

 

$

40,425

 

$

40,673

 

Less purchase accounting adjustments

 

 

818

 

 

605

 

 

800

 

 

861

 

 

1,167

 

Net interest income, net of purchase accounting adj

J

$

49,304

 

$

42,437

 

$

38,659

 

$

39,564

 

$

39,506

 

 

 

 

 

 

 

 

Total average earning assets

 

$

5,727,211

 

$

5,573,163

 

$

5,669,057

 

$

5,155,536

 

$

5,005,093

 

Add average balance of loan valuation discount

 

 

2,681

 

 

3,085

 

 

3,836

 

 

4,353

 

 

5,252

 

Avg earning assets, excluding loan valuation discount

K

$

5,729,892

 

$

5,576,248

 

$

5,672,893

 

$

5,159,889

 

$

5,010,345

 

 

 

 

 

 

 

 

Core net interest margin

J/K

 

3.44

%

 

3.04

%

 

2.73

%

 

3.07

%

 

3.15

%

 

Three Months Ended

Efficiency Ratio

 

Sept 30,

2022

June 30,

2022

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

Operating Expense

 

 

 

 

 

 

Total non-interest expense

 

$

35,903

 

$

30,955

 

$

28,590

 

$

30,789

 

$

29,053

 

Pre-tax non-operating expenses

 

 

(3,641

)

 

(1,337

)

 

(408

)

 

(1,602

)

 

(1,405

)

Adjusted Operating Expense

L

$

32,262

 

$

29,618

 

$

28,182

 

$

29,187

 

$

27,648

 

 

 

 

 

 

 

 

Operating Revenue

 

 

 

 

 

 

Net interest income, FTE

 

$

50,122

 

$

43,042

 

$

39,459

 

$

40,425

 

$

40,673

 

Total non-interest income

 

 

9,022

 

 

8,664

 

 

11,157

 

 

9,593

 

 

9,586

 

Pre-tax non-operating items

 

 

-

 

 

(336

)

 

(2,331

)

 

(1,300

)

 

(1,429

)

Adjusted Operating Revenue

M

$

59,144

 

$

51,370

 

$

48,285

 

$

48,718

 

$

48,830

 

 

 

 

 

 

 

 

Efficiency Ratio, operating

L/M

 

54.55

%

 

57.66

%

 

58.37

%

 

59.91

%

 

56.62

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Return Ratios

 

Sept 30,

2022

June 30,

2022

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

Net income available to common shareholders

N

$

14,043

 

$

15,753

 

$

16,829

 

$

15,791

 

$

16,132

 

Acquisition and charter conversion charges

 

 

3,641

 

 

1,172

 

 

408

 

 

1,602

 

 

5

 

Tax on acquisition and charter conversion charges

 

 

(920

)

 

(296

)

 

(103

)

 

(405

)

 

(1

)

Initial provision for acquired loans

 

 

3,855

 

 

 

 

 

Tax on initial provision for acquired loans

 

 

(976

)

 

 

 

 

Bargain purchase gain and loss on sale of fixed assets

 

 

-

 

 

(165

)

 

-

 

 

(1,300

)

 

397

 

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

 

 

-

 

 

41

 

 

-

 

 

329

 

 

(100

)

Treasury awards

 

 

-

 

 

(171

)

 

(702

)

 

-

 

 

(1,826

)

Tax on Treasury awards

 

 

-

 

 

43

 

 

178

 

 

-

 

 

462

 

Charitable contributions related to Treasury awards

 

 

-

 

 

165

 

 

-

 

 

-

 

 

1,400

 

Tax on charitable contributions related to Treasury awards

 

 

-

 

 

(42

)

 

-

 

 

-

 

 

(354

)

BOLI income from death proceeds

 

 

-

 

 

-

 

 

(1,630

)

 

-

 

 

-

 

Net earnings available to common shareholders, operating

O

$

19,643

 

$

16,500

 

$

14,980

 

$

16,017

 

$

16,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Tax Pre-Provision Operating Earnings

 

 

 

 

 

 

Earnings before income taxes

P

$

17,967

 

$

19,210

 

$

21,206

 

$

19,665

 

$

20,561

 

Acquisition and charter conversion charges

 

 

3,641

 

 

1,172

 

 

408

 

 

1,602

 

 

5

 

Provision for loan losses

 

 

4,300

 

 

600

 

 

-

 

 

(1,104

)

 

-

 

Bargain purchase gain and loss on sale of fixed assets

 

 

-

 

 

(165

)

 

-

 

 

(1,300

)

 

397

 

Treasury Awards

 

 

-

 

 

(171

)

 

(702

)

 

-

 

 

(1,826

)

Charitable contributions related to Treasury awards

 

 

-

 

 

165

 

 

-

 

 

-

 

 

1,400

 

BOLI income from death proceeds

 

 

-

 

 

-

 

 

(1,630

)

 

-

 

 

-

 

Pre-Tax, Pre-Provision Operating Earnings

Q

$

25,908

 

$

20,811

 

$

19,282

 

$

18,863

 

$

20,537

 

 

 

 

 

 

 

 

Annualized return on avg assets

N/A

 

0.88

%

 

1.03

%

 

1.09

%

 

1.12

%

 

1.17

%

Annualized return on avg assets, oper

O/A

 

1.23

%

 

1.08

%

 

0.97

%

 

1.13

%

 

1.17

%

Annualized pre-tax, pre-provision, oper

Q/A

 

1.63

%

 

1.36

%

 

1.24

%

 

1.33

%

 

1.49

%

Annualized return on avg common equity, oper

O/C

 

12.46

%

 

11.12

%

 

8.99

%

 

9.53

%

 

9.70

%

Annualized return on avg tangible common equity, operating

O/D

 

18.49

%

 

16.14

%

 

12.46

%

 

12.80

%

 

13.44

%

Mortgage Department

 

 

 

 

 

Net Interest Income after provision for credit losses

$

60

 

$

88

 

$

85

 

$

97

 

$

92

 

Loan fee income

 

1,221

 

 

1,227

 

 

1,230

 

 

1,556

 

 

1,732

 

Salaries and employee benefits

 

(1,011

)

 

(1,138

)

 

(1,181

)

 

(1,171

)

 

(995

)

Other non-interest expense

 

(111

)

 

(140

)

 

(149

)

 

(125

)

 

(131

)

Earnings (Loss) before income taxes

$

159

 

$

37

 

$

(15

)

$

357

 

$

698

 

 

 

Three Months Ended

Capital Ratios

Sept 30,

2022*

June 30,

2022

Mar 31,

2022

Dec 31,

2021

Sept 30,

2021

Common equity tier 1 (CET1) ratio

 

12.6

%

 

12.7

%

 

13.1

%

 

13.7

%

 

14.1

%

Leverage (Tier 1) ratio

 

9.3

%

 

8.6

%

 

8.2

%

 

9.2

%

 

9.2

%

Total risk based capital ratio

 

16.7

%

 

17.3

%

 

17.9

%

 

18.6

%

 

19.3

%

Tangible common equity ratio

 

6.5

%

 

6.4

%

 

6.7

%

 

8.3

%

 

9.1

%

*estimated

 

Contacts

M. Ray “Hoppy” Cole

Chief Executive Officer

Dee Dee Lowery

Chief Financial Officer

(601) 268-8998

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