The First Bancshares(US:FBMS)2022-11-08 16:00Financial Performance - Net income for the three months ended September 30, 2022, was $14,043 thousand, a decrease of 13.0% from $16,132 thousand in the same period of 2021[13]. - Basic earnings per share decreased to $0.61 for the three months ended September 30, 2022, down from $0.77 in the prior year, a decline of 20.8%[13]. - Comprehensive loss for the three months ended September 30, 2022, was $(36,593) thousand, compared to a comprehensive income of $10,667 thousand in the same period of 2021[15]. - For the nine months ended September 30, 2022, the company reported a net income of $46.6 million, a decrease from $48.4 million in 2021, representing a decline of approximately 3.6%[32]. - Operating net earnings for Q3 2022 totaled $19.6 million, an increase of $3.5 million or 21.9% from $16.1 million in Q3 2021[185]. Asset and Loan Growth - Total assets increased to $6,454,848 thousand as of September 30, 2022, compared to $6,077,414 thousand at December 31, 2021, representing a growth of 6.2%[9]. - Net loans held for investment rose to $3,681,032 thousand, up from $2,928,811 thousand, marking an increase of 25.6% year-over-year[9]. - The loan portfolio totaled $3.719 billion as of September 30, 2022, an increase of approximately 25.7% from $2.960 billion at December 31, 2021[113]. - Loans increased by $754.4 million or 25.4% to $3.722 billion during the first nine months of 2022[200]. Deposits and Equity - Total deposits increased to $5,551,298 thousand, up from $5,226,784 thousand, indicating a rise of 6.2%[9]. - As of September 30, 2022, total shareholders' equity was $621,471,000, reflecting the impact of acquisitions and stock issuances[20]. Interest Income and Expenses - Net interest income after provision for credit losses was $44,848 thousand for the three months ended September 30, 2022, compared to $40,028 thousand for the same period in 2021, reflecting a growth of 19.5%[13]. - Non-interest expense increased to $35,903 thousand for the three months ended September 30, 2022, compared to $29,053 thousand in the same period of 2021, an increase of 23.4%[13]. - Net interest income for Q3 2022 was $49.1 million, an increase of $9.1 million or 22.8% compared to $40.0 million in Q3 2021[187]. Credit Losses and Provisions - The allowance for credit losses on loans held for investment increased to $38,356 thousand from $30,742 thousand, reflecting a rise of 24.0%[9]. - The provision for credit losses for the three months ended September 30, 2022, was $4,300,000, compared to no provision for the same period in 2021, indicating a significant increase due to the BBI acquisition[158]. - The Company reported a total ending allowance balance for credit losses of $38,356,000 as of September 30, 2022, compared to $32,418,000 as of September 30, 2021, reflecting an increase of approximately 18.5% year-over-year[156]. Acquisitions - The company completed the acquisition of Beach Bancorp, Inc. for approximately $101.5 million, which included 3,498,936 shares of common stock and cash for fractional shares[41]. - The acquisition of Beach Bancorp resulted in the recognition of approximately $21.8 million in goodwill and $9.8 million in core deposit intangible assets[42]. - The Company entered into a merger agreement with Heritage Southeast Bancorporation, Inc. for approximately $207.0 million, with HSBI having $1.7 billion in assets[170]. Securities and Investments - The total available-for-sale securities amounted to $1,379,410,000 as of September 30, 2022, with gross unrealized losses of $217,516,000[86]. - The total held-to-maturity securities were valued at $532,688,000 as of September 30, 2022, with gross unrealized losses of $60,865,000[86]. - The company performed a quarterly evaluation of securities to assess any declines in fair value, with no credit loss factors identified[91]. Loan Quality and Risk Assessment - The company categorizes loans into risk categories, with "Pass" loans indicating average to superior credit quality, requiring no more than normal attention[137]. - "Substandard" loans increased to $167,000 from $6,183,000 in 2021[143]. - The total allowance for credit losses (ACL) is continuously monitored to ensure it is adequate to absorb expected losses inherent in the loan portfolio[146]. Cash Flow and Operating Activities - Net cash provided by operating activities was $68.4 million, down from $76.9 million in the same period of 2021, indicating a decrease of about 11%[32]. - The company incurred $2.9 million in expenses related to the BBI acquisition for the nine months ended September 30, 2022[43].