Financial Data and Key Metrics Changes - The company reported a net income of $19.7 million, or $0.62 per diluted share, which was a decrease of $900,000 from the previous quarter due to a $1.7 million provision expense this quarter compared to zero in the last quarter [70][71] - Loans grew by $111 million, representing an 8.6% annualized increase, with originations at approximately $450 million, up from $253 million in the first quarter [52][41] - The cost of deposits increased by 1 basis point to 2.46%, while the yield on earning assets increased by 1 basis point [43][48] Business Line Data and Key Metrics Changes - The loan portfolio continues to reflect a strategic balance, with owner-occupied commercial real estate (CRE) at 24%, non-owner-occupied at 22%, and 1-4 family loans at 19% [18] - Construction lending and lines remained strong, with about 40% of loans originated reserved for future funding [44] - The average yield on loans decreased slightly from 8.12% to 7.92% for the quarter, with new originations coming in at approximately 7.90% [74][106] Market Data and Key Metrics Changes - The Mississippi team accounted for 35% of the bank's total production, while Georgia contributed about a quarter of all new originations [53] - The company continues to monitor credit quality closely, with net charge-offs at 4 basis points and a slight uptick in classified loans as a percentage of capital plus allowance for credit losses [16][55] Company Strategy and Development Direction - The company is focused on maintaining a strong liquidity position, with a loan-to-deposit ratio of 79% and $2 billion available for borrowing from the Home Loan Bank [51] - There is an ongoing effort to refine the small business platform and complete the 1071 implementation ahead of schedule [75] - The company is exploring potential M&A opportunities, maintaining relationships with other banks that fit its profile [15] Management's Comments on Operating Environment and Future Outlook - Management expressed a conservative outlook for the second half of the year, expecting loan growth to remain in the mid-single-digit range [9] - The company anticipates that deposit costs will stabilize, with some pressure still present in the market [10][12] - Management noted that credit quality remains strong, with minimal issues related to delinquencies and charge-offs [4][41] Other Important Information - The efficiency ratio for the quarter was reported at 60.65%, with a return on average tangible common equity of 12.76% [43] - The company has seen good tenant stability in its office loan portfolio, with minimal lease renewal issues [39] Q&A Session Summary Question: What are the expectations for loan growth in the second half of the year? - Management indicated that loan growth is expected to remain in the mid-single-digit range, with a strong pipeline still in place [9][24] Question: Can you provide more details on deposit cost pressures? - Management noted that while there is still some pressure in the market, they have seen a decrease in deposit costs in recent months, with specific monthly rates provided [10][11] Question: What is the company's strategy regarding M&A? - The company is open to exploring M&A opportunities, particularly with banks that align with its strategic profile [15][37]

Core Viewpoint - The First Bancshares reported quarterly earnings of $0.63 per share, exceeding the Zacks Consensus Estimate of $0.61, but down from $0.85 per share a year ago, indicating a mixed performance trend [7][14]. Company Performance - The First Bancshares achieved revenues of $71.11 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 1.01%, but down from $78.45 million in the same quarter last year [14]. - The company has surpassed consensus EPS estimates two times over the last four quarters [8]. - The stock has gained approximately 2.3% since the beginning of the year, compared to the S&P 500's gain of 16.5% [9]. Earnings Expectations - The upcoming quarterly earnings estimate for The First Bancshares is $1.45 per share, reflecting a year-over-year decline of 12.1% [6]. - The current consensus EPS estimate for the next quarter is $0.64, with projected revenues of $72.2 million, and for the current fiscal year, the estimate is $2.44 on revenues of $285.5 million [15]. Industry Context - The Zacks Industry Rank for Banks - Southeast places it in the bottom 38% of over 250 Zacks industries, suggesting potential challenges for stock performance [5]. - The performance of The First Bancshares may be influenced by the overall outlook for the banking industry [5].

Financial Performance - Net income available to common shareholders totaled $19.7 million for the quarter ended June 30, 2024, a decrease of $0.9 million, or 4.5%, compared to $20.6 million for the quarter ended March 31, 2024[5]. - Diluted earnings per share were $0.62 for the second quarter of 2024, down from $0.65 for the first quarter of 2024 and $0.75 for the second quarter of 2023[6]. - Net income available to common shareholders for the second quarter of 2024 totaled $19.7 million, a decrease of $4.1 million, or 17.2%, compared to $23.8 million for the second quarter of 2023[66]. - Net income available to common shareholders was $19,697 million, down from $20,628 million in the prior quarter[23]. - Diluted earnings per share for the quarter ended June 30, 2024, were $0.62, a decrease from $0.65 in the previous quarter[75]. Loan and Asset Growth - Total loans increased by $110.9 million during the quarter ended June 30, 2024, representing an annualized increase of 8.6%[2]. - Total loans increased to $5.251 billion for the quarter ended June 30, 2024, up $110.9 million or 2.2% from the previous quarter and up $240.0 million or 4.8% year-over-year[29]. - Total loans as of June 30, 2024, amounted to $5,256,785 thousand, an increase from $5,144,193 thousand in March 2024[25]. - Total assets as of June 30, 2024, were $7,965,800, showing a slight increase from $7,963,759 on March 31, 2024[72]. - Total average assets decreased by $65.8 million, or 0.8%, from $8.005 billion on March 31, 2024, to $7.939 billion on June 30, 2024[42]. Interest Income and Margin - Total interest income for the quarter ended June 30, 2024, was $91,027 million, a slight decrease from $91,663 million in the previous quarter[23]. - Net interest income for the same quarter was $57,794 million, compared to $57,341 million in the prior quarter[23]. - Core net interest margin increased by 9 basis points during the quarter ended June 30, 2024, from 3.10% to 3.19%[10]. - Annualized net interest margin increased by 6 basis points to 3.26% for the quarter ended June 30, 2024, from 3.20% for the quarter ended March 31, 2024[44]. - The average tax equivalent yield on investment securities increased by 42 basis points to 2.65% from 2.23% year-over-year[34]. Credit Losses and Nonperforming Assets - The company recorded a $1.7 million provision for credit losses for the quarter ended June 30, 2024, compared to no provision for credit losses for the quarter ended March 31, 2024[9]. - Nonperforming assets totaled $21.1 million, or 0.26% of total assets, for the quarter ending June 30, 2024, compared to $18.4 million, or 0.23%, for the quarter ending March 31, 2024[11]. - Total nonperforming loans increased to $14,727 thousand as of June 30, 2024, from $11,648 thousand in March 2024[25]. - The allowance for credit losses (ACL) to nonperforming loans ratio was 374.37% as of June 30, 2024, up from 328.08% in June 2023[25]. - Provision for credit losses was $1,650 million, up from $1,250 million in the previous quarter[23]. Deposits and Equity - Total deposits increased to $5,202,006 million from $5,158,071 million in the previous quarter[23]. - Total deposits as of June 30, 2024, were $6,626,116 thousand, a decrease from $6,710,355 thousand in March 2024[25]. - Total common equity rose to $963,445 million, up from $952,708 million in the prior quarter[23]. - Non-interest bearing deposits were $1,870,305 thousand, accounting for 28.2% of total deposits, down from 32.1% in June 2023[25]. - Common equity tier 1 (CET1) ratio increased to 12.4% as of June 30, 2024, up from 12.2% in the previous quarter[92]. Non-Interest Income and Expenses - Non-interest income increased by $0.9 million for the second quarter of 2024 compared to the second quarter of 2023[18]. - Non-interest income increased to $13,319 million from $12,679 million in the previous quarter[23]. - Total non-interest expense was $44,089 million, slightly down from $44,433 million in the prior quarter[24]. - Non-interest expense for the second quarter of 2024 was $44.1 million, a decrease of $2.8 million, or 6.0%, compared to the second quarter of 2023[67]. - Non-interest expense for the six months ended June 30, 2024, was $87.5 million, a decrease of $5.1 million compared to the same period in 2023[83].

Core Viewpoint - The First Bancshares (FBMS) is anticipated to report a year-over-year decline in earnings due to lower revenues, with a consensus EPS estimate of $0.61, reflecting a -28.2% change compared to the previous year [1][3][4]. Financial Performance Expectations - Revenues for the quarter are expected to be $70.4 million, which is a decrease of 10.3% from the same quarter last year [4]. - The consensus EPS estimate has been revised down by 1.54% over the last 30 days, indicating a reassessment by analysts [4]. Earnings Surprise Potential - The Earnings ESP for The First Bancshares is 0%, suggesting no recent analyst revisions that differ from the consensus estimate, making it challenging to predict an earnings beat [12][14]. - The company currently holds a Zacks Rank of 3 (Hold), which does not strongly indicate a likelihood of beating the consensus EPS estimate [13][14]. Historical Performance - In the last reported quarter, The First Bancshares exceeded the expected EPS of $0.60 by delivering $0.65, resulting in a surprise of +8.33% [15]. - Over the past four quarters, the company has beaten consensus EPS estimates two times [16]. Industry Context - Another player in the Southeast banking industry, Dime Community (DCOM), is expected to report earnings of $0.36 per share, reflecting a year-over-year decline of -47.1%, with revenues projected at $82.19 million, down 9.3% [20]. - Dime Community has seen a 3.5% upward revision in its consensus EPS estimate over the last 30 days, resulting in a positive Earnings ESP of 7.34%, suggesting a higher likelihood of beating the consensus estimate [21].

Financial Performance - Net income available to common shareholders for Q1 2024 was $20.6 million, an increase of 26.8% from $16.3 million in Q1 2023[143] - Net interest income for Q1 2024 decreased by $7.6 million, or 11.7%, totaling $57.3 million compared to $64.9 million in Q1 2023[145] - Non-interest income increased by $67 thousand in Q1 2024 compared to Q1 2023[148] - Non-interest income for Q1 2024 was $12.679 million, slightly up from $12.612 million in Q1 2023, with interchange fee income contributing $4.195 million[162] - Non-interest expense decreased to $43.425 million in Q1 2024 from $45.670 million in Q1 2023, with salaries and employee benefits accounting for 56.5% of total expenses[162] - The provision for income taxes was $6.0 million, representing 22.4% of earnings before income taxes for Q1 2024, compared to $4.6 million or 22.0% in Q1 2023[166] Asset and Liability Management - Total assets as of March 31, 2024, were $7.957 billion, a decrease of $36.4 million from $7.993 billion at December 31, 2023[151] - Loans decreased by $28.8 million to $5.144 billion, or 0.6%, during the first three months of 2024[151] - Deposits increased by $244.2 million to $6.721 billion as of March 31, 2024, compared to $6.476 billion at December 31, 2023[151] - The investment portfolio had a net unrealized loss of $127.6 million at March 31, 2024, compared to a loss of $137.6 million at the same time in 2023[149] - The investment portfolio increased by $10.6 million, or 0.6%, to $1.745 billion as of March 31, 2024, with a net unrealized loss of $127.6 million[170] - Total assets reached $8.006 billion as of March 31, 2024, slightly up from $8.003 billion at the end of 2023[156] Interest Rate and Yield Analysis - The net interest margin for Q1 2024 was 3.20%, down from 3.63% in Q1 2023, reflecting a decrease of 43 basis points[146] - The average yield on earning assets increased by 63 basis points, from 4.49% in Q1 2023 to 5.12% in Q1 2024[150] - Interest expense on average interest-bearing liabilities increased by 141 basis points, from 1.24% in Q1 2023 to 2.65% in Q1 2024[150] - The average yield on loans increased to 6.11% in Q1 2024 from 5.45% in Q1 2023, while the net interest margin decreased to 3.20% from 3.63%[156] - The yield on investment securities increased to 2.48% in Q1 2024 from 2.31% in Q1 2023[243] - The company's one-year cumulative GAP ratio is approximately 149.0%, indicating asset sensitivity to interest rate changes[248] Credit Quality and Loan Performance - Non-performing assets (NPAs) decreased to $17,704 thousand at March 31, 2024, down from $19,010 thousand at December 31, 2023, representing a reduction of $1,306 thousand[187] - The allowance for credit losses (ACL) was $54,032 thousand, or 1.05% of loans held for investment (LHFI), remaining stable compared to December 31, 2023[190] - Nonaccrual loans totaled $10,961 thousand at March 31, 2024, an increase of $271 thousand from December 31, 2023[186] - The ratio of annualized net charge-offs to total loans was 0.006% for the quarter ended March 31, 2024, compared to 0.061% for the previous quarter[187] - Total charge-offs for the quarter were $740 thousand, while total recoveries amounted to $667 thousand, resulting in net loan charge-offs of $73 thousand[193] - The provision for credit losses for the three months ended March 31, 2024, was $0, compared to $10,500 thousand for the same period in 2023[193] Capital and Equity Position - The Company had total shareholders' equity of $959.9 million at March 31, 2024, an increase of $10.9 million, or 1.1%, from $949.0 million at the end of 2023[218] - The Company’s estimated uninsured deposits increased to $2.410 billion at March 31, 2024, representing 35.9% of total deposits[211] - The Company's liquidity ratio was 14.6% as of March 31, 2024, exceeding the internal policy guideline of 10% minimum[206] - The Total Capital Ratio for the Company was 15.2% as of March 31, 2024, above the minimum required of 10.0%[223] - The Company’s Tier 1 Leverage Ratio was 10.8% as of March 31, 2024, above the minimum required of 5.0%[223] - Total consolidated equity capital at March 31, 2024, was $959.9 million, representing approximately 12.1% of total assets[227] Strategic Initiatives and Future Outlook - The Company received $6.2 million from the Community Development Financial Institutions Fund to expand lending activities in low- or moderate-income communities[163] - The Company authorized a new share repurchase program for 2024, allowing the purchase of up to $50 million in common stock[220] - The Company had outstanding BTFP debt of $110.0 million with pledged securities valued at $327.5 million as of March 31, 2024[215] - The capital conservation buffer under Basel III rules is fully phased-in at 2.5% since January 1, 2019[225] - Management believes both the Bank and the Company met all capital adequacy requirements as of March 31, 2024[226] - The Company uses non-GAAP financial measures to supplement performance evaluation, including operating net earnings and core net interest margin[239] Regulatory and Compliance - There were no changes in internal control over financial reporting during the fiscal quarter ended March 31, 2024[255] - The Company recorded no provision for credit losses on OBSC exposures for the three months ended March 31, 2024, compared to $500 thousand for the same period in 2023[196]

The First Bancshares (FBMS) came out with quarterly earnings of $0.65 per share, beating the Zacks Consensus Estimate of $0.60 per share. This compares to earnings of $0.86 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 8.33%. A quarter ago, it was expected that this bank holding company would post earnings of $0.70 per share when it actually produced earnings of $0.59, delivering a surprise of -15.71%.Over the last four quar ...

Financial Performance - Net income available to common shareholders totaled $20.6 million for Q1 2024, an increase of 86.7% compared to $11.0 million for Q4 2023[4] - Net income available to common shareholders for the quarter ended 3/31/24 was $20,628,000, up from $16,271,000 in the same quarter last year, an increase of 26.5%[41] - Basic earnings per share for the quarter ended 3/31/24 was $0.66, compared to $0.52 in the same quarter last year, representing a growth of 26.9%[41] - Diluted earnings per common share increased to $0.65 in Q1 2024, up from $0.52 in Q1 2023, marking a growth of 25%[44] - Diluted earnings per share for Q1 2024 was $0.65, a significant increase of 85.71% compared to $0.35 in Q4 2023[47] Deposits and Loans - Total deposits increased by $247.5 million, or 3.8%, to $6.710 billion for Q1 2024 compared to $6.463 billion for Q4 2023[11] - Total loans decreased by $30.1 million, or 0.6%, to $5.140 billion for Q1 2024 compared to $5.170 billion for Q4 2023[10] - Total deposits rose to $6,599,287,000 as of 3/31/24, compared to $6,816,473,000 a year earlier, a decrease of 3.2%[41] - Total loans as of March 31, 2024, amounted to $5,144,193, a decrease of 0.55% from $5,172,957 on December 31, 2023[45] Interest Income and Margin - Total interest income for the quarter ended 3/31/24 was $91,663,000, an increase from $80,338,000 in the same quarter last year, representing a growth of 14.1%[41] - Net interest income for the quarter ended 3/31/24 was $57,341,000, down from $64,926,000 in the same quarter last year, a decrease of 11.7%[41] - Annualized net interest margin decreased by 8 basis points to 3.20% for Q1 2024 from 3.28% for Q4 2023[4] - The average yield on all earning assets increased from 5.04% in Q4 2023 to 5.12% in Q1 2024[22] - The yield on average earning assets improved to 5.12% in Q1 2024 from 5.04% in Q4 2023, showing an increase of 1.58%[48] Asset Quality - Nonperforming assets decreased to $18.4 million, or 0.23% of total assets, for Q1 2024 compared to $20.2 million, or 0.25%, for Q4 2023[14] - Provision for credit losses was zero in Q1 2024, compared to $11,000 thousand in Q1 2023, indicating improved credit quality[44] - The allowance for credit losses (ACL) as a percentage of total loans remained stable at 1.05% for the quarter ended 3/31/24, consistent with the previous quarters[41] - The allowance for credit losses (ACL) to nonperforming loans ratio was 463.25% as of March 31, 2024, indicating strong coverage[45] Shareholder Equity - Book value per share increased to $30.45 at March 31, 2024, from $30.22 at December 31, 2023[13] - Total shareholders' equity increased to $959,912 thousand as of March 31, 2024, compared to $949,034 thousand at December 31, 2023, reflecting a growth of 1.03%[42] - Common equity increased to $952,708,000 in Q1 2024 from $901,530,000 in Q4 2023, representing a growth of 5.67%[47] Operational Efficiency - The efficiency ratio improved to 61.15% for the quarter ended 3/31/24, compared to 58.15% in the same quarter last year, indicating a decline in operational efficiency[41] - Efficiency ratio improved to 61.14% in Q1 2024 from 62.00% in Q4 2023, indicating enhanced operational efficiency[48] Capital Ratios - Common equity tier 1 (CET1) ratio increased to 12.2% in Q1 2024, compared to 11.2% in Q1 2023, indicating a rise of 8.9%[50] - Total risk-based capital ratio rose to 15.2% in Q1 2024, up from 14.7% in Q1 2023, showing an increase of 3.4%[50] Other Financial Metrics - The annualized return on average assets (ROA) for the quarter ended 3/31/24 was 1.03%, up from 0.81% in the same quarter last year, an increase of 27.1%[41] - The annualized return on average common equity (operating) was 8.66% in Q1 2024, a decrease from 12.48% in Q1 2023, reflecting a decline of 30.9%[50] - Pre-tax, pre-provision operating earnings for Q1 2024 were $26,603 million, a decrease of 25.8% compared to $35,661 million in Q1 2023[50]

HATTIESBURG, Miss.--(BUSINESS WIRE)--The First Bancshares, Inc. (NASDAQ: FBMS) (“First Bancshares” or the “Company”), the holding company for The First Bank, announced today that the Company’s board of directors has approved a new share repurchase program for the 2024 calendar year. Under the program, the Company may, but is not required to, from time to time repurchase up to $50 million of shares of its common stock in any manner determined appropriate by the Company’s management. The actual timing and me ...

PART I [Business](index=7&type=section&id=ITEM%201.%20BUSINESS) The First Bancshares, Inc. is a community-focused bank holding company operating 116 locations across five states, offering a full range of financial services [Overview and Operations](index=7&type=section&id=Overview%20and%20Operations) The First Bancshares, Inc. operates as a community-focused financial institution with 116 locations across five states, growing through organic expansion and strategic acquisitions - The First Bancshares, Inc. operates 116 locations in Mississippi, Alabama, Florida, Georgia, and Louisiana as of December 31, 2023[27](index=27&type=chunk) - The company's growth strategy combines organic loan growth with regional expansion through acquisitions, including the Heritage Southeast Bancorporation, Inc. (HSBI) merger completed on January 1, 2023[30](index=30&type=chunk)[38](index=38&type=chunk) - The bank offers a full range of deposit services, commercial loans, consumer loans, and residential mortgage services[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) Human Capital Overview (as of Dec 31, 2023) | Metric | Value | | :------------------ | :---- | | Full-Time Employees | 1,078 | | States of Operation | 5 | | Total Locations | 116 | [Supervision and Regulation](index=10&type=section&id=Supervision%20and%20Regulation) The company and its bank subsidiary are subject to extensive federal and state banking regulations, including capital adequacy and dividend limitations - The company is a registered bank holding company supervised by the Federal Reserve, with its subsidiary regulated by the Federal Reserve and the Mississippi Department of Banking and Consumer Finance[53](index=53&type=chunk)[83](index=83&type=chunk) - Dividend payments are restricted by federal and state regulations, requiring adequate capital above regulatory minimums and the capital conservation buffer[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk) - The First Bank is subject to the Community Reinvestment Act (CRA) with a "Satisfactory" rating, noting modernized CRA regulations effective January 1, 2026[101](index=101&type=chunk)[102](index=102&type=chunk) Regulatory Capital Ratios as of December 31, 2023 | Ratio | The First Bancshares, Inc. | The First (Bank) | Minimum to be Well-Capitalized | | :------------------------------ | :------------------------- | :--------------- | :----------------------------- | | Common Equity Tier 1 risk-based | 12.1% | 13.8% | 6.5% | | Tier 1 risk-based capital ratio | 12.5% | 13.8% | 8.0% | | Total risk-based capital ratio | 15.0% | 14.8% | 10.0% | | Leverage ratio | 9.7% | 10.7% | 5.0% | [Risk Factors](index=20&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks from economic downturns, interest rate fluctuations, merger integration, and cybersecurity threats [Risks Associated with Our Business](index=20&type=section&id=Risks%20Associated%20with%20Our%20Business) The company's financial performance is exposed to risks from concentrated geographic markets, real estate sector vulnerability, and interest rate fluctuations - The company's operations are concentrated in Mississippi, Louisiana, Alabama, Florida, and Georgia, making it vulnerable to adverse local economic conditions[112](index=112&type=chunk) - A significant portion of the loan portfolio is secured by real estate, exposing the company to risks from declining property values[114](index=114&type=chunk) - The business is subject to significant interest rate risk, where rising rates can increase funding costs and falling rates can reduce net interest income[121](index=121&type=chunk)[123](index=123&type=chunk) - The company faces risks from information system interruptions or security breaches, including cyber-attacks, which could damage its reputation and lead to financial liability[139](index=139&type=chunk) [Merger-Related Risks](index=26&type=section&id=Merger-Related%20Risks) The company faces risks in realizing anticipated benefits from acquisitions due to integration challenges and potential goodwill impairment - The company may not realize anticipated cost savings and benefits from recent acquisitions of BBI (August 2022) and HSBI (January 2023) due to integration difficulties[150](index=150&type=chunk) - Significant non-recurring transaction and merger-related costs have been incurred and may continue, potentially reducing expected efficiencies and strategic benefits[151](index=151&type=chunk)[152](index=152&type=chunk) - The company may incur impairment to goodwill if significant negative industry trends, reduced future cash flow estimates, or business disruptions occur[153](index=153&type=chunk) [Risks Relating to Our Securities](index=27&type=section&id=Risks%20Relating%20to%20Our%20Securities) Investors in the company's common stock face risks from price fluctuation, lower trading volume, and potential limitations on dividend payments - The company's common stock price may fluctuate significantly due to operating results, analyst estimates, and general market volatility[155](index=155&type=chunk)[156](index=156&type=chunk) - The trading volume in the company's common stock is less than that of larger financial services companies, which may affect investor liquidity[161](index=161&type=chunk) - Future dividend payments are not guaranteed and are subject to the company's financial condition, capital requirements, and regulatory limitations[162](index=162&type=chunk)[163](index=163&type=chunk) [Unresolved Staff Comments](index=29&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports no unresolved staff comments from the SEC - None[165](index=165&type=chunk) [Cybersecurity](index=29&type=section&id=ITEM%201C.%20CYBERSECURITY) The company maintains a comprehensive information security program, overseen by the Board Risk Committee, to protect systems and data - The company has an information security program designed to protect computer systems and information assets, aligning with regulatory guidance and industry standards[165](index=165&type=chunk) - Oversight of cybersecurity is delegated to the Board Risk Committee, supported by the Chief Information Security Officer (CISO) who provides regular updates[177](index=177&type=chunk)[179](index=179&type=chunk) - The company has an Information Security Incident Response Plan, which includes processes for escalation, containment, and remediation, tested annually[170](index=170&type=chunk) - To date, the company has not experienced a cybersecurity incident that has materially impacted its business or financial condition[174](index=174&type=chunk) [Properties](index=31&type=section&id=ITEM%202.%20PROPERTIES) The company operates 110 full-service banking offices, one motor bank, and five loan production offices across five states - As of year-end, the company had 110 full-service banking offices, one motor bank facility, and five loan production offices across its five-state footprint[188](index=188&type=chunk) - The company leases several of its banking office locations in Alabama, Florida, Georgia, and Mississippi[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) [Legal Proceedings](index=32&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The company is involved in a putative class action lawsuit regarding overdraft fees, with the outcome currently unpredictable - A putative class action complaint was filed against the company on December 7, 2023, alleging improper assessment of overdraft fees on certain debit card transactions[193](index=193&type=chunk)[194](index=194&type=chunk) - The company filed its Answer and Affirmative Defenses on February 1, 2024, with the outcome and potential loss currently undetermined[195](index=195&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Not applicable[196](index=196&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=33&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT'S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on Nasdaq, with 31.2 million shares outstanding, and expects to continue quarterly cash dividends - The company's common stock is traded on the Nasdaq Global Market under the symbol "FBMS" with **31,227,881 shares outstanding** as of February 21, 2024[199](index=199&type=chunk) - A share repurchase program authorizing up to **$50.0 million** in purchases expired on December 31, 2023; **856 shares** were withheld in Q4 2023 for employee tax obligations[205](index=205&type=chunk)[202](index=202&type=chunk) 5-Year Cumulative Shareholder Return Comparison | Index/Company | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | | :----------------------------- | :----- | :----- | :----- | :----- | :----- | :----- | | The First Bancshares, Inc. | 100.00 | 118.55 | 104.82 | 133.07 | 112.80 | 106.66 | | NASDAQ Composite-Total Returns | 100.00 | 136.69 | 198.10 | 242.03 | 163.28 | 236.17 | | NASDAQ OMX Banks Index | 100.00 | 124.38 | 115.04 | 164.41 | 137.65 | 132.91 | [Reserved](index=34&type=section&id=ITEM%206.%20RESERVED) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=ITEM%207.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Net income increased 19.9% to $75.5 million in 2023, driven by acquisitions and loan growth, with total assets reaching $8.0 billion - Net income available to common shareholders increased by **$12.5 million**, or **19.9%**, to **$75.5 million** for the year ended December 31, 2023, compared to **$62.9 million** in 2022[217](index=217&type=chunk) - The acquisition of Heritage Bank in 2023 contributed **$1.565 billion** in assets, **$1.159 billion** in net loans, and **$1.392 billion** in net deposits at acquisition[218](index=218&type=chunk) Key Financial Metrics (Year-End) | Metric | Dec 31, 2023 | Dec 31, 2022 | | :------------------- | :------------- | :------------- | | Total Assets | $7.999 billion | $6.462 billion | | Net Loans | $5.119 billion | $3.740 billion | | Total Deposits | $6.463 billion | $5.494 billion | | Stockholders' Equity | $949.0 million | $646.7 million | [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Consolidated net income available to common stockholders rose to $75.5 million in 2023, driven by increased net interest income and non-interest income - The increase in non-interest expense in 2023 was partially attributable to **$2.7 million** in acquisition charges, **$32.1 million** in increased operating expenses from acquisitions, **$5.2 million** in U.S. Treasury awards, **$1.7 million** in FDIC premiums, and **$4.9 million** in core deposit amortization[228](index=228&type=chunk) - The provision for credit losses was **$13.8 million** in 2023, compared to **$5.4 million** in 2022, with a majority of the increase attributed to HSBI and BBI acquisitions[259](index=259&type=chunk) Consolidated Statement of Income Summary (in thousands) | Metric | 2023 | 2022 | 2021 | | :-------------------------------- | :--------- | :--------- | :--------- | | Net Interest Income | $249,325 | $177,816 | $157,064 | | Provision for Credit Losses (LHFI)| $13,750 | $5,350 | $(1,456) | | Non-interest Income | $46,705 | $36,961 | $37,473 | | Non-interest Expense | $184,726 | $130,483 | $114,559 | | Net Income to Common Stockholders | $75,457 | $62,919 | $64,167 | [Analysis of Financial Condition](index=49&type=section&id=Analysis%20of%20Financial%20Condition) Total assets reached $8.0 billion at year-end 2023, driven by the HSBI acquisition, with strong capital ratios and liquidity - Average loans accounted for **71.4%** of average earning assets in 2023, up from **58.0%** in 2022, reflecting a strategic focus on loan growth[289](index=289&type=chunk) - Total deposits grew to **$6.463 billion** at year-end 2023, an increase of **$968.5 million (17.6%)**, largely driven by **$1.392 billion** in deposits acquired from Heritage Bank[300](index=300&type=chunk) - The company's loan-to-deposit ratio was **80.0%** at December 31, 2023, up from **68.7%** at year-end 2022[305](index=305&type=chunk) Company Capital Ratios vs. Requirements (Dec 31, 2023) | Capital Ratio | Company Actual | Well-Capitalized Minimum | | :------------------- | :------------- | :----------------------- | | Leverage | 9.7% | 5.0% | | Common Equity Tier 1 | 12.1% | 6.5% | | Tier 1 | 12.5% | 8.0% | | Total | 15.0% | 10.0% | [Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is interest rate risk, managed through policies and modeling, showing asset-sensitivity - The company's principal market risk exposure is interest rate risk, managed to optimize earnings and capital under various rate scenarios[348](index=348&type=chunk) - The company is considered "asset-sensitive," with more assets repricing than liabilities within the first year, indicated by a one-year cumulative GAP ratio of approximately **118.0%** at December 31, 2023[353](index=353&type=chunk) Net Interest Income (NII) Sensitivity Analysis (Year 1 as of Dec 31, 2023) | Rate Change Scenario | % Change in NII from Static | | :------------------- | :-------------------------- | | +400 bps | (19.0)% | | +200 bps | (2.3)% | | +100 bps | 0.7% | | -100 bps | 0.5% | | -200 bps | 2.3% | Economic Value of Equity (EVE) Sensitivity Analysis (as of Dec 31, 2023) | Rate Change Scenario | % Change in EVE from Base | | :------------------- | :------------------------ | | +400 bps | (12.4)% | | +200 bps | (2.0)% | | +100 bps | 0.6% | | -100 bps | (2.4)% | | -200 bps | (5.0)% | [Financial Statements and Supplementary Data](index=61&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section includes the independent auditor's unqualified opinion on financial statements and internal controls, along with detailed financial statements and notes - The independent registered public accounting firm, FORVIS, LLP, issued an unqualified opinion on the consolidated financial statements for the three-year period ended December 31, 2023[360](index=360&type=chunk) - FORVIS, LLP also issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2023[361](index=361&type=chunk)[672](index=672&type=chunk) - Critical Audit Matters identified were the valuation of the Allowance for Credit Losses (ACL) and the accounting for the Heritage Southeast Bancorporation, Inc. acquisition, both involving significant management judgment[365](index=365&type=chunk)[369](index=369&type=chunk)[371](index=371&type=chunk) [Consolidated Financial Statements](index=64&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show total assets of $8.0 billion and net income of $75.5 million for 2023 Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :------------------------- | :----------- | :----------- | | Total Assets | $7,999,345 | $6,461,717 | | Loans, net | $5,116,010 | $3,735,240 | | Total Securities | $1,734,658 | $1,982,529 | | Goodwill | $272,520 | $180,254 | | Total Deposits | $6,462,872 | $5,494,404 | | Total Liabilities | $7,050,311 | $5,815,054 | | Total Stockholders' Equity | $949,034 | $646,663 | Consolidated Income Statement Highlights (in thousands) | Metric | 2023 | 2022 | 2021 | | :-------------------------------- | :--------- | :--------- | :--------- | | Net Interest Income | $249,325 | $177,816 | $157,064 | | Provision for Credit Losses (Total)| $14,500 | $5,605 | $(1,104) | | Non-Interest Income | $46,705 | $36,961 | $37,473 | | Non-Interest Expense | $184,726 | $130,483 | $114,559 | | Net Income to Common Stockholders | $75,457 | $62,919 | $64,167 | Earnings Per Share (Diluted) | Year | Diluted EPS | | :--- | :---------- | | 2023 | $2.39 | | 2022 | $2.84 | | 2021 | $3.03 | [Notes to Consolidated Financial Statements](index=71&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, acquisitions, loan portfolios, ACL methodology, goodwill, and regulatory capital - On January 1, 2023, the company completed its acquisition of Heritage Southeast Bancorporation, Inc. (HSBI) for **$221.5 million**, resulting in **$91.9 million** goodwill and **$43.7 million** core deposit intangible[471](index=471&type=chunk)[472](index=472&type=chunk) - On August 1, 2022, the company acquired Beach Bancorp, Inc. (BBI) for approximately **$101.5 million**, resulting in **$23.7 million** goodwill and **$9.8 million** core deposit intangible[476](index=476&type=chunk)[478](index=478&type=chunk) - The company had **$123.4 million** of subordinated debt outstanding as of December 31, 2023, a decrease from **$145.0 million** in 2022 due to the redemption of **$24.0 million** of its Notes due 2028[600](index=600&type=chunk) Allowance for Credit Losses (ACL) on Loans (in thousands) | Metric | 2023 | 2022 | 2021 | | :-------------------------- | :--------- | :--------- | :--------- | | Beginning Balance | $38,917 | $30,742 | $35,820 | | Provision for Credit Losses | $13,750 | $5,350 | $(1,456) | | Net Charge-offs | $(1,811) | $1,522 | $(4,019) | | Ending Balance | $54,032 | $38,917 | $30,742 | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=128&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[663](index=663&type=chunk) [Controls and Procedures](index=128&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[664](index=664&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2023, based on the COSO framework[668](index=668&type=chunk) - The scope of management's assessment of internal controls excluded the operations of the HSBI acquisition, as permitted by SEC guidance[669](index=669&type=chunk) [Other Information](index=130&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) The Board approved amendments to executive Supplemental Executive Retirement Plan (SERP) agreements in November 2023 - On November 16, 2023, the Board approved amendments to the Supplemental Executive Retirement Plan (SERP) agreements for CEO M. Ray Cole, Jr. and CFO Donna T. Lowery, executed on February 26, 2024[681](index=681&type=chunk) - The SERP amendments adjust lifetime benefits to **50%** of compensation (less prior SERP amounts) and modify provisions for early termination, change in control, and death benefits[682](index=682&type=chunk)[683](index=683&type=chunk) - No directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter ended December 31, 2023[686](index=686&type=chunk) PART III [Directors, Executive Officers, and Corporate Governance](index=131&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%2C%20AND%20CORPORATE%20GOVERNANCE) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the definitive proxy statement - Information is incorporated by reference from the definitive proxy statement for the Annual Meeting of Shareholders to be held May 23, 2024[688](index=688&type=chunk) [Executive Compensation](index=131&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Information regarding executive compensation is incorporated by reference from the definitive proxy statement - Information is incorporated by reference from the definitive proxy statement for the Annual Meeting of Shareholders to be held May 23, 2024[689](index=689&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=131&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Information regarding security ownership is incorporated by reference from the definitive proxy statement - Information is incorporated by reference from the definitive proxy statement for the Annual Meeting of Shareholders to be held May 23, 2024[690](index=690&type=chunk) [Certain Relationships and Related Transactions and Director Independence](index=131&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%20AND%20DIRECTOR%20INDEPENDENCE) Information regarding related transactions and director independence is incorporated by reference from the definitive proxy statement - Information is incorporated by reference from the definitive proxy statement for the Annual Meeting of Shareholders to be held May 23, 2024[691](index=691&type=chunk) [Principal Accountant Fees and Services](index=131&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) Information regarding principal accountant fees and services is incorporated by reference from the definitive proxy statement - Information is incorporated by reference from the definitive proxy statement for the Annual Meeting of Shareholders to be held May 23, 2024[692](index=692&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=132&type=section&id=ITEM%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists all financial statements, schedules, and exhibits filed as part of the Form 10-K report - This section lists all financial statements, schedules, and exhibits filed with the Form 10-K[695](index=695&type=chunk)[696](index=696&type=chunk) - All financial statement schedules were omitted because the information is either inapplicable or already included in the Notes to the Consolidated Financial Statements[695](index=695&type=chunk) [Form 10-K Summary](index=135&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY) The company has not provided a summary under this item - None[702](index=702&type=chunk)

HATTIESBURG, Miss.--(BUSINESS WIRE)--The First Bancshares, Inc. (NASDAQ: FBMS), holding company for The First Bank, (www.thefirstbank.com) will participate in the Janney CEO Forum which is being held January 31, 2024 - February 1, 2024 at the Hyatt Regency Resort & Spa at Gainey Ranch, Scottsdale, Arizona, and will have one-on-one meetings with certain bank stock analysts and investors. The presentation prepared for use during these meetings is available at the company's website www.thefirstbank.com under ...