The First Bancshares(US:FBMS)2024-11-08 16:59Financial Performance - Net income available to common shareholders for Q3 2024 was $18.6 million, a decrease of 23.8% from $24.4 million in Q3 2023[159]. - For the nine months ended September 30, 2024, net income available to common shareholders decreased by $5.5 million, or 8.6%, to $58.9 million[168]. - Operating net earnings for the nine months ended September 30, 2024, were $61.101 million, down from $78.007 million in the same period of 2023, indicating a decline of about 21.7%[264]. - The Company reported net income available to common shareholders of $18.571 million for the three months ended September 30, 2024, compared to $24.360 million for the same period in 2023, representing a decrease of approximately 23.8%[264]. Income and Expenses - Net interest income for Q3 2024 was $59.0 million, down 2.8% from $60.7 million in Q3 2023[161]. - Non-interest income decreased by $7.1 million in Q3 2024, primarily due to a $6.2 million decrease in U.S. Treasury awards[164]. - Non-interest expense for Q3 2024 was $46.4 million, a decrease of 2.8% compared to Q3 2023[165]. - Non-interest income for the three months ended September 30, 2024, was $12,242 thousand, a decrease from $19,324 thousand in the same period in 2023[181]. - Total non-interest expense for the three months ended September 30, 2024, was $46,394 thousand, slightly down from $47,724 thousand in the same period in 2023[182]. - Non-interest expenses totaled $133.9 million in Q3 2024, a decrease of $6.4 million or 4.6% from $140.3 million in Q3 2023[185]. Assets and Liabilities - Total assets as of September 30, 2024, were $7.957 billion, a decrease of 0.5% from $7.993 billion at the end of 2023[172]. - Total earning assets averaged $7,094,901 thousand with a net interest margin of 5.33% for the three months ended September 30, 2024, compared to $7,001,048 thousand and 4.95% for the same period in 2023[177]. - The investment portfolio had a net unrealized loss of $91.6 million at September 30, 2024, down from a loss of $184.9 million a year earlier[166]. - The investment portfolio decreased by $19.9 million, or 1.1%, to $1.715 billion at September 30, 2024, compared to $1.734 billion at December 31, 2023[191]. - Total securities, excluding other securities, were $1.662 billion, or 20.9% of total assets, at September 30, 2024, down from $1.694 billion, or 21.2% of total assets, at December 31, 2023[190]. - Total owner-occupied commercial real estate (CRE) reached $1,352.8 million, with the largest segment being office space at $278.6 million, accounting for 20.6% of total owner-occupied CRE[204]. - Total non-owner occupied CRE reached $1,882.7 million, with retail properties contributing $411.8 million, representing 21.8% of total non-owner occupied CRE[204]. Loans and Credit Quality - Loans increased by $148.6 million to $5.322 billion, or 2.9%, during the first nine months of 2024[172]. - Loans Held for Investment (LHFI) increased by $146.9 million, or 2.9%, to $5.263 billion as of September 30, 2024, from $5.116 billion at December 31, 2023[194]. - Non-performing assets (NPAs) totaled $23.6 million as of September 30, 2024, an increase of $4.6 million from $19.0 million at December 31, 2023[209]. - Nonaccrual loans amounted to $16.3 million, up $5.6 million from December 31, 2023, with total nonaccrual loans representing 0.3% of total loans[205][209]. - The allowance for credit losses was $55.7 million as of September 30, 2024, compared to $54.0 million at December 31, 2023[196]. - The allowance for credit losses (ACL) was $55.7 million, or 1.05% of loans held for investment (LHFI), reflecting a $1.7 million increase from December 31, 2023[212]. - The ratio of annualized net charge-offs to total loans was 0.033% for the quarter ended September 30, 2024, compared to 0.061% for the quarter ended December 31, 2023[209]. Deposits and Equity - Deposits totaled $6.567 billion as of September 30, 2024, an increase of 1.4% from $6.476 billion at the end of 2023[172]. - Total shareholders' equity increased by $62.6 million, or 6.6%, to $1.012 billion as of September 30, 2024[242]. - The estimated uninsured deposits totaled $2.289 billion at September 30, 2024, representing 34.9% of total deposits[235]. - The Company had outstanding Bank Term Funding Program (BTFP) debt of $110.0 million at September 30, 2024, with an interest rate of 4.83%[239]. - Common Equity Tier 1 Capital Ratio was 14.3% as of September 30, 2024, compared to 13.8% at December 31, 2023[247]. Interest Rate Risk and Projections - The average yield on all earning assets increased by 37 basis points to 5.27% in Q3 2024 compared to 4.90% in Q3 2023[167]. - The average yield on loans was 6.21% for the three months ended September 30, 2024, compared to 5.92% for the same period in 2023[177]. - The annualized net interest margin for the three months ended September 30, 2024, was 3.33%, down from 3.47% in the same period of 2023[265]. - The Company utilizes modeling software to perform earnings simulations and assess market risk exposure, particularly focusing on interest rate risk management[270]. - The company's one-year cumulative GAP ratio is approximately 145.0%, indicating that there are more assets repricing than liabilities within the first year, making the company asset sensitive[274]. - The projected net interest income for a 100 basis point increase in rates is $248,485 thousand, reflecting a dollar change of $4,348 thousand[272]. - The policy limits for projected declines in net interest income are set at 20% for a 400 basis point shock and 10% for a 200 basis point shock[272]. Other Financial Metrics - The Company recorded a provision for credit losses of $1.0 million for both the three months ended September 30, 2024 and 2023, while the nine-month provision decreased to $2.7 million in 2024 from $12.5 million in 2023[216]. - Total charge-offs for the three months ended September 30, 2024 were $1,386 million, up from $629 million in the same period of 2023, indicating a 120.4% increase[216]. - The liquidity ratio as of September 30, 2024 was 14.3%, exceeding the internal policy guideline of 10% minimum[229]. - Cash and cash equivalents were $214.1 million as of September 30, 2024, with loans and investment securities maturing within one year totaling approximately $1.775 billion[230]. - The Company authorized a new share repurchase program for up to $50 million during the 2024 calendar year[244].