THE FIRST BANCSHARES, INC. April 2024
NASDAQ: FBMS
Safe Harbor & Forward Looking Statements
ABOUT THE FIRST BANCSHARES, INC.
The First Bancshares, Inc. ("FBMS" or the "Company"), headquartered in Hattiesburg, Mississippi, is the parent company of The First Bank. Founded in 1996, The First has operations in Mississippi, Louisiana, Alabama, Florida and Georgia. The Company's stock is traded on NASDAQ Global Market under the symbol FBMS. Contact: Chandra Kidd, Corporate Secretary.
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 presentation includes the following non-GAAP financial measures: Diluted Earnings Per Share, Operating; Net Income, Operating; Return on Average Assets (ROAA), Operating; Pre-TaxPre-Provision Return on Average Assets (PTPP ROAA), Operating; Return on Average Tangible Common Equity (ROATCE); Return on Average Tangible Common Equity (ROATCE), Operating; Efficiency Ratio, Operating; Net Interest Margin (NIM), Fully Tax Equivalent (FTE); Net Interest Income, FTE; Core Net Interest Margin, Fully Tax Equivalent (FTE); Pre-Tax Pre Provision Income, Operating; Non-Interest Income, Operating; Adjusted Operating Revenue; Adjusted Operating Expense; Tangible Assets; Tangible Common Equity; Tangible Book Value per Share; Tangible Common Equity to Tangible Assets Ratio (TCE/TA); Diluted Earnings per Share, Operating; and certain ratios derived from these non-GAAP financial measures. The Company believes that the non-GAAP financial measures included in this presentation 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. 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 Adjusted Operating Revenue, Adjusted Operating Expense, Operating Efficiency Ratio and Diluted Earnings Per Share, Operating, 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. These non-GAAP financial measures should not be considered in isolation and do not purport to be an alternative to their most comparable GAAP measures. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure is provided in the appendix to this presentation.
FORWARD LOOKING STATEMENTS
This communication contains statements that constitute "forward looking statements" within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. Such statements can generally be identified by such words as "believes," "anticipates," "expects," "may," "will," "assumes," "should," "predicts," "could," "would," "intends," "targets," "estimates," "projects," "plans," "potential," "positioned" and other similar words and expressions of the future or otherwise regarding the outlook for the Company's future business and financial performance and/or the performance of the banking industry and economy in general. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risk and uncertainties which may cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, the Company's management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. Factors that might cause such differences include, but are not limited to: (1) competitive pressures among financial institutions increasing significantly; (2) prevailing, or changes in economic or political conditions, either nationally or locally, particularly in areas in which the Company conducts operations, including the effects of declines in the real estate market, high unemployment rates, inflationary pressure, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing; (3) interest rate risk, including the effects of rising interest rates; (4) developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance; (5) changes in applicable laws, rules, or regulations; (6) risks related to the Company's recently completed acquisitions, including that the anticipated benefits from the recently completed acquisitions are not realized in the time frame anticipated or at all as a result of changes in general economic and market conditions or other unexpected factors or events; (7) changes in management's plans for the future; (8) credit risk associated with our lending activities; (9) changes in loan demand, real estate values, or competition; (10) changes in accounting principles, policies, or guidelines; (11) adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company's participation in and execution of government programs related to the COVID-19 pandemic and related variants; (12) higher inflation and its impacts; (13) significant turbulence or disruption in the capital or financial markets and the effect of a fall in stock market prices on our investment securities; (14) potential impacts of the recent 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; (16) a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, or uncertainties surrounding the debt ceiling and the federal budget; and (17) other general competitive, economic, political, and market factors, including those affecting our business, operations, pricing, products, or services. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For any forward-looking statements made in this communication, any exhibits hereto or any related documents, the Company claims protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of
1995. | 2 |
Our Company | Company Overview | ||||||||
Scale | $8.0bn | 5th | |||||||
Largest Bank | |||||||||
Total Assets | Headquartered in MS | ||||||||
Capital | |||||||||
CET1 Ratio | Total Capital Ratio | ||||||||
Huntsville | 12.2% | 15.2% | |||||||
Starkville | Birmingham | Atlanta | |||||||
LA | Hattiesburg | AL | Macon | Deposits | 27% | the Rate Hike Cycle (2) | |||
Waycross | |||||||||
MS | Montgomery | Columbus | GA | 43% | |||||
Jackson | Albany | Savannah | DDA Deposits | IB Deposit Beta Through | |||||
Valdosta | Brunswick | ||||||||
Pensacola | |||||||||
Baton Rouge | St. Marys | Liquidity | |||||||
Gulfport Mobile | Tallahassee | Jacksonville | 77% | $23,000 | |||||
Destin | |||||||||
New Orleans | Loans / Deposits | Average Deposit Size (3) | |||||||
FL | |||||||||
Orlando | Profitability | Operating (1) | Deposits | ||||||
FBMS Branch (111) | Tampa | 1.33% | 1.78% | ||||||
PTPP ROAA, | Cost of | ||||||||
FBMS LPO (5) | |||||||||
Cape Coral | |||||||||
Credit | 1.05% | 0.01% | |||||||
NCOs / Total Loans, | |||||||||
ACL / Total Loans | |||||||||
Data as of or for the three months ended 3/31/24 | Annualized | ||||||||
(1) Non-GAAP measure, refer to appendix for "Non-GAAP Reconciliation" | |||||||||
(2) Cumulative deposit beta is defined as the change in cost of interest bearing deposits from Q4 '21 of 0.20% to 2.45% in Q1 '24 divided by the change in average fed funds rate of 525 bps over the same period | 3 | ||||||||
(3) Excludes public funds and ICS accounts |
Q1 2024 Highlights
Key Highlights
Financial Results
- Deposits
- 27% of deposits are demand
- $110 million of brokered deposits as of 3/31/24
- Average deposit size of $23 thousand (1)
- Uninsured deposits equal to 15.5% of total deposits
- Cumulative IB deposit beta since Q4 '21 of 43% (2)
- Loans
- Average loan size of ~$228 thousand
- Q1 '24 new loan production of $253.5 million with a blended yield of 8.12%
- C&D loan concentration as a percentage of bank total capital: 70%
- CRE loan concentration as a percentage of bank total capital: 206%
- Capital
- TCE/TA: 8.1% (3)
- Leverage: 9.7%
- CET1: 12.2%
- Total Risk-Based Capital: 15.2%
- Credit
- NPAs / Total Assets of 0.23% this quarter
- NCOs / Total Loans of 0.01% this quarter
- Allowance for Credit Losses
- ACL / Loans remains stable at 1.05%, unchanged from last quarter
Q1 2024 | |
Diluted Earnings Per Share | $0.65 |
Diluted Earnings Per Share, Operating (3) | $0.65 |
Net Income ($000) | $20,628 |
Net Income, Operating ($000) (3) | $20,634 |
Reported ROAA | 1.03% |
ROAA, Operating (3) | 1.03% |
Reported ROATCE (3) | 13.5% |
ROATCE, Operating (3) | 13.5% |
Efficiency Ratio | 61.1% |
Efficiency Ratio, Operating (3) | 61.1% |
- Net Interest Margin
─ | Contraction in NIM, FTE (3) of 7 bps to 3.26%, driven primarily by an increase in | NIM | 3.20% | ||
cost of deposits | NIM, FTE (3) | 3.26% | |||
─ | Modest decline in Core NIM, FTE | (3) | of 4 bps to 3.10% | ||
Data as of or for the three months ended 3/31/24 | Core NIM, FTE (3) | 3.10% | |||
(1) | Excludes public funds and ICS accounts | ||||
(2) | Cumulative deposit beta is defined as the change in cost of interest bearing deposits from Q4 '21 of 0.20% to 2.45% in Q1'24 divided by the change in average fed funds rate of 525 bps over the same period | 4 | |||
(3) | Non-GAAP measure, refer to appendix for "Non-GAAP Reconciliation" |
Evolution of Our Franchise
December 31, 2009 | ||
eveport | Montgomery | Columbus |
Jackson | ||
Hattiesburg | ||
Baton Rouge | Mobile | |
New Orleans | Tallahassee | |
FBMS Branch (9) |
March 31, 2024 | ||||
Atlanta | FBMS Branch (111) | |||
Birmingham | ||||
FBMS LPO (5) | ||||
Jackson | ||||
Shreveport | ||||
Montgomery | ||||
Hattiesburg | ||||
Baton Rouge | Valdosta | |||
Mobile Pensacola | Tallahassee | |||
Houston | New Orleans | |||
Orlando | ||||
Tampa |
Total Assets ($mm) - Organic and Acquisitive Growth | |||||||||||||||
$7,999 | $7,964 | ||||||||||||||
$6,077 | $6,462 | ||||||||||||||
$5,153 | |||||||||||||||
$5,863 | $5,863 | Acquired | |||||||||||||
$3,473 | $3,664 | $4,284 | |||||||||||||
$3,004 | |||||||||||||||
$3,264 | Organic | ||||||||||||||
$681 | $721 | $941 | $1,094 | $1,145 | $1,277 | $1,813 | $1,924 | $2,307 | |||||||
$181 | $181 | $370 | $447 | $447 | $447 | $827 | $1,889 | $2,413 | $2,178 | $2,136 | $2,101 | ||||
$986 | $1,080 | $1,166 | |||||||||||||
$503 | $500 | $540 | $571 | $647 | $698 | $830 | |||||||||
2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | Q1 '24 |
Source: S&P Global Market Intelligence, Company documents | 5 |
Data as of 12/31 of each year, respectively; Q1 '24 data as of 3/31/24 |
Improving Geographic Diversification of our Balance Sheet
2009 Loans by State
Mississippi
100%
2015 Loans by State
Alabama | Louisiana |
7% | |
23% | |
Mississippi 70%
March 31, 2024 Loans by State
Georgia
30%
Louisiana
14%
Mississippi
24%
Florida
24%
Alabama
8%
2009 Deposits by State
Mississippi
100%
2015 Deposits by State
Alabama | Louisiana |
23% | 4% |
Mississippi
73%
March 31, 2024 Deposits by State
Georgia
Louisiana 25% 11%
Florida
20%
Mississippi
32%
Alabama
12%
2009 and 2015 data as of 6/30 | 6 |
FINANCIAL RESULTS
7
Historical Performance Over Time
Thirteen Years of Record Earnings
Net Income ($mm)
Pre-tax Pre Provision Income ($mm), Operating (1)
$100.0
$80.0
$60.0
$40.0
$20.0
$0.0
EPS
$96.7 | Operating | |||||||||||||||||||||||||
Income | ||||||||||||||||||||||||||
$21.3 | ||||||||||||||||||||||||||
$64.2 | $68.3 | $75.5 | ||||||||||||||||||||||||
$5.4 | ||||||||||||||||||||||||||
$62.9 | ||||||||||||||||||||||||||
$52.5 | ||||||||||||||||||||||||||
$43.7 | ||||||||||||||||||||||||||
$35.7 | $35.7 | $31.9 | ||||||||||||||||||||||||
$25.9 | $25.9 | $26.6 | ||||||||||||||||||||||||
$21.2 | $21.4 | $19.4 | $20.5 | $18.9 | $19.3 | $20.8 | $22.2 | |||||||||||||||||||
$8.5 | $9.7 | $10.6 | ||||||||||||||||||||||||
$6.3 | ||||||||||||||||||||||||||
$2.5 | $3.6 | $4.2 | ||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | PTPP | Q1 '21Q2 '21Q3 '21Q4 '21Q1 '22Q2 '22Q3 '22Q4 '22Q1 '23Q2 '23Q3 '23Q4 '23Q1 '24 | ||||||||||||
$0.82 | $1.16 | $0.96 | $1.19 | $1.55 | $1.57 | $1.11 | $1.62 | $2.55 | $2.52 | $3.03 | $2.84 | $2.39 | ROAA, | 1.61% | 1.42% | 1.49% | 1.33% | 1.24% | 1.36% | 1.63% | 1.38% | 1.78% | 1.81% | 1.62% | 1.31% | 1.33% |
Oper. (1)
Annual data for the twelve months ended 12/31 of each respective year; quarterly data for the three months ended each respective quarter | 8 | |
(1) | Non-GAAP measure, refer to appendix for "Non-GAAP Reconciliation" |
Net Interest Income Over Time
Net Interest Income ($mm)
$250.0 | $249.3 | ||||||||||||||||||||||||||
$200.0 | |||||||||||||||||||||||||||
$177.8 | |||||||||||||||||||||||||||
$157.1 | |||||||||||||||||||||||||||
$152.7 | |||||||||||||||||||||||||||
$150.0 | |||||||||||||||||||||||||||
$121.8 | |||||||||||||||||||||||||||
$100.0 | $84.9 | ||||||||||||||||||||||||||
$59.2 | $64.9 | $66.0 | $60.7 | $57.7 | $57.3 | ||||||||||||||||||||||
$49.1 | |||||||||||||||||||||||||||
$50.0 | $40.3 | $40.0 | $39.8 | $42.1 | $47.9 | ||||||||||||||||||||||
$33.4 | $37.0 | $39.2 | $38.1 | $38.6 | |||||||||||||||||||||||
$28.4 | |||||||||||||||||||||||||||
$22.2 | |||||||||||||||||||||||||||
$16.3 | $19.1 | ||||||||||||||||||||||||||
$0.0 | |||||||||||||||||||||||||||
2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | Q1 '21Q2 '21Q3 '21Q4 '21Q1 '22Q2 '22Q3 '22Q4 '22Q1 '23Q2 '23Q3 '23Q4 '23Q1 '24 | |||||||||||||
NIM, | 3.74% | 3.99% | 3.59% | 3.44% | 3.70% | 3.72% | 3.71% | 3.83% | 3.94% | 4.02% | 3.64% | 3.13% | 3.19% | 3.59% | 3.34% | 3.14% | 3.25% | 3.14% | 2.78% | 3.09% | 3.50% | 3.37% | 3.69% | 3.82% | 3.52% | 3.33% | 3.26% |
FTE (1) | |||||||||||||||||||||||||||
Annual data for the twelve months ended 12/31 of each respective year; quarterly data for the three months ended each respective quarter | 9 | |
(1) | Non-GAAP measure, refer to appendix for "Non-GAAP Reconciliation" |
Historical Cost and Yield Analysis
Quarterly Yields & Costs (%)
7.00% | |||||
5.99% | 5.92% | 6.03% | 6.11% | ||
6.00% | 5.45% | ||||
5.00% | |||||
4.00% | 3.69% | 3.82% | |||
3.52% | |||||
3.33% | 3.26% | ||||
3.00% | 3.47% | 3.43% | 3.27% | 3.14% | 3.10% |
2.51% | 2.59% | 2.70% | |||
2.00% | 2.43% | 2.47% | |||
1.54% | 1.78% | ||||
1.00% | |||||
1.21% | |||||
0.72% | 0.91% | ||||
0.00% | |||||
Q1 '23 | Q2 '23 | Q3 '23 | Q4 '23 | Q1 '24 | |
Cost of Deposits | NIM (FTE)(1) | Yield on Loans | Yield on Securities (FTE)(1) | Core NIM (FTE)(1) |
Data as of or for the three months ended each respective quarter | 10 | |
(1) | Non-GAAP measure, refer to appendix for "Non-GAAP Reconciliation" |
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Disclaimer
The First Bancshares Inc. published this content on 25 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 April 2024 15:24:01 UTC.
