U.S. markets closed
  • S&P 500

    4,166.45
    -55.41 (-1.31%)
     
  • Dow 30

    33,290.08
    -533.37 (-1.58%)
     
  • Nasdaq

    14,030.38
    -130.97 (-0.92%)
     
  • Russell 2000

    2,237.75
    -49.71 (-2.17%)
     
  • Crude Oil

    71.50
    +0.46 (+0.65%)
     
  • Gold

    1,763.90
    -10.90 (-0.61%)
     
  • Silver

    25.84
    -0.01 (-0.04%)
     
  • EUR/USD

    1.1865
    -0.0045 (-0.38%)
     
  • 10-Yr Bond

    1.4500
    -0.0610 (-4.04%)
     
  • GBP/USD

    1.3809
    -0.0115 (-0.83%)
     
  • USD/JPY

    110.1500
    -0.0810 (-0.07%)
     
  • BTC-USD

    35,696.09
    -1,544.88 (-4.15%)
     
  • CMC Crypto 200

    888.52
    -51.42 (-5.47%)
     
  • FTSE 100

    7,017.47
    -135.96 (-1.90%)
     
  • Nikkei 225

    28,964.08
    -54.25 (-0.19%)
     

First Bancshares, Inc. Reports Results for First Quarter ended March 31, 2021; Increases Quarterly Dividend 8%

  • Oops!
    Something went wrong.
    Please try again later.
·25 min read
  • Oops!
    Something went wrong.
    Please try again later.

The First Bancshares, Inc. ("FBMS" or "the Company") (NASDAQ: FBMS), holding company for The First, A National Banking Association, (www.thefirstbank.com) reported today net income available to common shareholders for the quarter ended December 31, 2020.

Highlights for the Quarter:

  • Net income available to common shareholders totaled $16.6 million for the quarter ended March 31, 2021, representing an increase of $1.3 million, or 8.5%, compared to $15.3 million for the quarter ended December 31, 2020.

  • Net income available to common shareholders totaled $16.6 million for the quarter ended March 31, 2021, an increase of $8.3 million, or 100.3%, compared to $8.3 million for the quarter ended March 31, 2020.

  • Pre-tax, pre-provision operating earnings (non-GAAP) which excludes acquisition charges increased 20.2% to $21.4 million for the quarter ended March 31, 2021 as compared to $17.8 million for the first quarter of 2020.

  • Pre-tax, pre-provision operating earnings (non-GAAP) which excludes acquisition charges, treasury awards, gains from bargain purchase of Southwest Georgia Financial Corporation (‘SGB") increased 3.3% to $21.4 million for the quarter ended March 31, 2021 as compared to $20.7 million for the fourth quarter of 2020.

  • Provision for credit losses totaled $0 for the quarter as compared to $3.5 million for the sequential quarter comparison and $7.1 million for the first quarter of 2020.

  • During the quarter, the Company purchased 165,623 shares of stock under the share buyback program.

  • As of March 31, 2021, total COVID related modifications were $45.7 million, representing 1.5% of the loan portfolio and down from a peak of $676 million or 21% of the loan portfolio. For additional details related to the effects of COVID-19, see the investor presentation filed and available under presentations and press releases included in the investor relations section of the company’s website: www.thefirstbank.com.

  • During the first quarter of 2021, the Company adopted the Current Expected Credit Losses ("CECL") methodology for estimating credit losses effective January 1, 2021.

  • Added a commercial banking group in the Baton Rouge market and 4 mortgage originators in the panhandle of Florida and the South MS markets

M. Ray "Hoppy" Cole, President and Chief Executive Officer, commented, "Our company produced a strong quarter with improved profitability both year over year and in sequential quarter comparison. Our markets continue to show signs of recovery from the effects of the pandemic. We are encouraged by the level of loan demand and the amount of our loan originations during the first quarter particularly in our construction portfolio however the near term effects were muted by pay downs in our residential real estate and Paycheck Protection Program ("PPP") portfolio’s. We continue to add production staff in our key markets and are excited about the recent addition of our new commercial banking group in Baton Rouge and the additional mortgage originators we added during the quarter."

Quarterly Earnings

Net income available to common shareholders totaled $16.6 million for the quarter ended March 31, 2021, an increase of $1.3 million, or 8.5%, compared to $15.3 million for the quarter ended December 31, 2020. In sequential quarter comparison, the Company recorded an additional $0.8 million bargain purchase gain due to a measurement period adjustment related to the tax impact of the CARES Act on the acquisition of SGB as well as income in the form of a financial assistance grant from the U.S. Department of Treasury of $0.7 million, net of tax during the quarter ended December 31, 2020. During the fourth quarter of 2020, the Company also recorded additional expense related to unused vacation paid to employees as well as expense related to the early vesting of restricted stock grants to the Company’s directors in the amount of $0.7 million.

Net income available to common shareholders totaled $16.6 million for the quarter ended March 31, 2021, an increase of $8.3 million, or 100.3%, compared to $8.3 million for the quarter ended March 31, 2020.

Provision for credit losses totaled $0 for the quarter ended March 31, 2021, a decrease of $7.1 million, or $5.5 million net of tax, as compared to $7.1 million for the first quarter of 2020 and a decrease of $3.5 million, or $2.7 million net of tax, as compared to $3.5 million for the fourth quarter of 2020.

Earnings Per Share

For the first quarter of 2021, fully diluted earnings per share were $0.79, compared to $0.44 for the first quarter of 2020. The provision for loan losses expense of $7.1 million, or $5.5 million net of tax, for the quarter ended March 31, 2020, which was primarily attributable to the COVID-19 pandemic, represented $0.29 in fully diluted earnings per share.

For the first quarter of 2021, fully diluted earnings per share were $0.79, compared to $0.72 for the fourth quarter of 2020. The bargain purchase and sale of land gains along with the financial assistance grant recognized during the quarter ended December 31, 2020 accounted for $0.08 in fully diluted earnings per share. Provision for loan loss expense of $3.5 million for the fourth quarter of 2020 accounted for $0.13 in fully diluted earnings per share.

Fully diluted earnings per share for the quarter ended March 31, 2021 include the purchase by the Company of 165,623 shares during the first quarter of 2021.

Balance Sheet

Consolidated assets increased $290.0 million to $5.443 billion at March 31, 2021 from $5.153 billion at December 31, 2020. PPP loans at March 31, 2021 were $221.7 million, down $17.9 million from December 31, 2020.

Total average loans were $3.097 billion for the quarter ended March 31, 2021, as compared to $3.154 billion for the quarter ended December 31, 2020, and $2.602 billion for the quarter ended March 31, 2020, representing a decrease of $56.4 million, or 1.8%, for the sequential quarter comparison, and an increase of $494.8 million, or 19.0%, in prior year quarterly comparison. The acquisition of SGB accounted for $423.0 million, net of fair value marks, of the total increase in average loans as compared to the first quarter of 2020. PPP loans averaged $235.4 million for the quarter ended March 1, 2021 and averaged $250.5 million for the quarter ended December 31, 2020.

Average loans decreased $56.4 million, or 1.8% for the sequential quarter comparison of which $15.1 million were related to a decrease in PPP loans.

Excluding the acquired loans, average loans increased $71.8 million, or 2.8% as compared to the quarter ended March 31, 2020. Average PPP loans increased $235.4 million as compared to the quarter ended March 31, 2020.

Total average deposits were $4.410 billion for the quarter ended March 31, 2021, as compared to $4.195 billion for the quarter ended December 31, 2020, and $3.187 billion for the quarter ended March 31, 2020, representing an increase of $214.8 million, or 5.1%, for the sequential quarter comparison, and an increase of $1.223 billion, or 38.4%, in prior year quarterly comparison. The acquisition of SGB accounted for $536.2 million of the total increase in average deposits as compared to the first quarter of 2020.

Average deposits increased $214.8 million, or 5.1% for the sequential quarter comparison of which $149.8 million is related to the seasonality of our public fund portfolio.

Excluding the acquired deposits, average deposits increased $687.1 million, or 21.6% as compared to the quarter ended March 31, 2020 of which $284.0 is related to the seasonality of our public fund portfolio.

The Company implemented Deposit Reclassification at the beginning of 2020. This program reclassifies noninterest bearing deposits and NOW deposit balances to money market accounts. This program reduces our reserve balance required at the Federal Reserve Bank of Atlanta which provides additional funds for liquidity and lending. At quarter end March 31, 2021, $695.8 million in noninterest deposit balances and $859.4 million in NOW deposit accounts were reclassified as money market accounts.

Asset Quality

Nonperforming assets totaled $36.8 million at March 31, 2021, a decrease of $5.4 million compared to $42.3 million at December 31, 2020 and a decrease of $10.3 million compared to $47.1 million at March 31, 2020. Nonaccrual loans decreased $3.8 million as compared to December 31, 2020 and decreased $7.8 million as compared to March 31, 2020.

The ratio of the allowance for credit losses (ACL) to total loans was 1.07% at March 31, 2021, 1.15% at December 31, 2020 and 0.80% at March 31, 2020. The ratio of annualized net charge-offs (recoveries) to total loans was 0.47% for the quarter ended March 31, 2021 compared to 0.25% for the quarter ended December 31, 2020 and 0.03% for the quarter ended March 31, 2020. The increase in net charge-offs were related to the charge down of nonperforming loans that were previously fully impaired in the allowance for loan losses model.

Effective January 1, 2021, the Company adopted the CECL methodology for estimating credit losses. This adoption resulted in a net $0.4 million increase to the ACL and an unfunded commitment reserve of $0.7 million.

First Quarter 2021 vs. First Quarter 2020 Earnings Comparison

Net income available to common shareholders for the first quarter of 2021 totaled $16.6 million compared to $8.3 million for the first quarter of 2020, an increase of $8.3 million or 100.3%. In comparing the quarters, the increase in net income available to common shareholders was largely attributed to a decrease in provision for credit losses expense in the amount of $7.1 million, or $5.5 million net of tax. The Company recorded $0 in provision for credit losses expense for the first quarter 2021 and recorded $7.1 million for the first quarter 2020.

Net interest income for the first quarter of 2021 was $39.2 million, an increase of $5.2 million when compared to the first quarter of 2020. The increase was due to interest income earned on a higher volume of loans. Fully tax equivalent ("FTE") net interest income (non-GAAP) totaled $39.9 million and $34.5 million for the first quarter of 2021 and 2020, respectively. FTE net interest income (non-GAAP) increased $5.4 million in the prior year quarterly comparison mainly due to increased loan volume. Purchase accounting adjustments decreased $1.2 million for the first quarter comparisons. First quarter of 2021 FTE net interest margin (non-GAAP) was 3.34% which included 9 basis points related to purchase accounting adjustments compared to 3.93% for the same quarter in 2020, which included 28 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin (non-GAAP) decreased 40 basis points in prior year quarterly comparison.

Non-interest income increased $3.0 million for the first quarter of 2021 as compared to the first quarter of 2020. Mortgage income increased $1.6 million in the prior year quarterly comparison.

First quarter 2021 non-interest expense was $27.3 million, an increase of $3.8 million, or 16.3% as compared to the first quarter of 2020. Excluding the net decrease in acquisition charges of $0.7 million for the quarterly comparison, non-interest expense increased $4.6 million in the first quarter of 2021, of which $2.0 million was attributable to the operations of SGB, as compared to first quarter of 2020.

Investment securities totaled $1.157 billion, or 21.3% of total assets at March 31, 2021, versus $788.9 million, or 19.4% of total assets at March 31, 2020. The average balance of investment securities increased $282.1 million in the prior year quarterly comparison, primarily as a result of the acquisition of SGB. The average tax equivalent yield on investment securities (non-GAAP) decreased 62 basis points to 2.32% from 2.94% in the prior year quarterly comparison. The investment portfolio had a net unrealized gain of $21.7 million at March 31, 2021 as compared to a net unrealized gain of $21.4 million at March 31, 2020.

The FTE average yield on all earning assets (non-GAAP) decreased 94 basis points in prior year quarterly comparison, from 4.78% for the first quarter of 2020 to 3.84% for the first quarter of 2021. Interest expense on average interest bearing liabilities decreased 38 basis points from 0.92% for the first quarter of 2020 to 0.54% for the first quarter of 2021. Cost of all deposits averaged 36 basis points for the first quarter of 2021 compared to 76 basis points for the first quarter of 2020.

First Quarter 2021 vs Fourth Quarter 2020 Earnings Comparison

Net income available to common shareholders for the first quarter of 2021 increased $1.3 million to $16.6 million compared to $15.3 million for the fourth quarter of 2020. During the fourth quarter of 2020, the Company recorded a bargain purchase gain in the amount of $0.8 million, net of tax and received a financial assistance grant from the U. S. Department of Treasury of $0.7 million, net of tax.

Net interest income for the first quarter of 2021 was $39.2 million as compared to $39.5 million for the fourth quarter of 2020, a decrease of $0.2 million which is attributed to a decrease in purchase accounting adjustments of $0.6 million. FTE net interest income (non-GAAP) decreased $0.2 million to $39.9 million from $40.1 million in sequential-quarter comparison. First quarter 2021 FTE net interest margin (non-GAAP) of 3.34% included 9 basis points related to purchase accounting adjustments compared to 3.51% for the fourth quarter in 2020, which included 16 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin (non-GAAP) decreased 10 basis point in sequential quarter comparison.

Investment securities totaled $1.157 billion, or 21.3% of total assets at March 31, 2021, versus $1.050 billion, or 20.4% of total assets at December 31, 2020. The average balance of investment securities increased $46.1 million in sequential-quarter comparison. The average tax equivalent yield on investment securities (non-GAAP) decreased 13 basis points to 2.32% from 2.45% in sequential-quarter comparison. The investment portfolio had a net unrealized gain of $21.7 million at March 31, 2021 as compared to a net unrealized gain of $34.6 million at December 31, 2020.

The FTE average yield on all earning assets (non-GAAP) decreased in sequential-quarter comparison from 4.04% to 3.84%. Interest expense on average interest bearing liabilities decreased 4 basis points from 0.58% for the fourth quarter of 2020 to 0.54% for the first quarter of 2021. Cost of all deposits averaged 36 basis points for the first quarter of 2021 compared to 39 basis points for the fourth quarter of 2020.

Excluding the treasury awards and bargain purchase gain, non-interest income increased $0.3 million in sequential-quarter comparison resulting from increased other charge and fees in the amount of $0.5 million.

Non-interest expense for the first quarter of 2021 was $27.3 million compared to $27.9 million for the fourth quarter of 2020. Excluding acquisition charges, non-interest expense decreased $0.6 million. During the fourth quarter of 2020, the Company recorded additional expense related to unused vacation paid out to employees as well as expense related to the early vesting of restricted stock grants to the Company’s directors in the amount of $0.7 million.

Declaration of Cash Dividend

The Company announced that its Board of Directors declared a cash dividend of $0.14 per share to be paid on its common stock on May 25, 2021 to shareholders of record as of the close of business on May 10, 2021.

About The First Bancshares, Inc.

The First Bancshares, Inc., headquartered in Hattiesburg, Mississippi, is the parent company of The First, A National Banking Association ("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 operating efficiency ratio, pre-tax, pre-provision operating earnings, diluted operating earnings per common share, fully tax equivalent net interest income, fully tax equivalent net interest margin, core net interest margin, average tax equivalent yield on investment securities, fully tax equivalent average yield on all earning assets, total tangible common equity, tangible book value per common share 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 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).

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) changes in applicable laws, rules, or regulations, including changes to statutes, regulations or regulatory policies or practices as a result of, or in response to COVID-19; (5) 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; (6) changes in management’s plans for the future; (7) credit risk associated with our lending activities; changes in interest rates, loan demand, real estate values, or competition; (8) changes in accounting principles, policies, or guidelines; (9) 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; (10) the impact of the COVID-19 pandemic on the Company’s assets, business, cash flows, financial condition, liquidity, prospects and results of operations; (11) potential increases in the provision for loan losses resulting from the COVID-19 pandemic; and (12) other general competitive, economic, political, and market factors, including those affecting our business, operations, pricing, products, or services. 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 Securities and Exchange Commission, 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.

Statements about the potential effects of the COVID-19 pandemic on the Company’s assets, business, liquidity, financial condition, prospects, and results of operations may constitute forward-looking statements and are subject to the risks that the actual effects may differ, possibly materially, from what is reflected in these forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the depth, dispersion and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on customers, employees, third parties and the Company.

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(Dollars in thousands except per share data)

EARNINGS DATA

Quarter
Ended 3/31/21

Quarter
Ended
12/31/20

Quarter
Ended
9/30/20

Quarter
Ended
6/30/20

Quarter
Ended
3/31/20

Total Interest Income

$ 45,187

$ 45,613

$ 46,337

$ 45,799

$ 41,598

Total Interest Expense

5,958

6,147

6,365

6,619

7,533

Net Interest Income

39,229

39,466

39,972

39,180

34,065

FTE net interest income*

39,884

40,119

40,608

39,772

34,526

Provision for credit losses**

-

3,523

6,921

7,606

7,102

Non-interest income

9,472

10,928

8,794

15,680

6,474

Non-interest expense

27,264

27,897

26,935

28,070

23,439

Earnings before income taxes

21,437

18,974

14,910

19,184

9,998

Income tax expense

4,793

3,639

2,993

2,241

1,687

Net income available to common shareholders

$ 16,644

$ 15,335

$ 11,917

$ 16,943

$ 8,311

PER COMMON SHARE DATA

Basic earnings per share

$ 0.79

$ 0.72

$ 0.56

$ 0.79

$ 0.44

Diluted earnings per share

0.79

0.72

0.55

0.79

0.44

Diluted earnings per share, operating*

0.79

0.65

0.56

0.52

0.47

Quarterly dividends per share

.13

.12

.10

.10

.10

Book value per common share at end of period

30.64

30.54

29.82

29.34

29.49

Tangible book value per common share at period end*

21.76

21.65

20.93

20.40

19.52

Market price at end of period

36.61

30.88

20.97

22.50

19.07

Shares outstanding at period end

21,018,744

21,115,009

21,408,017

21,395,258

18,851,955

Weighted average shares outstanding:

Basic

21,009,088

21,308,838

21,405,309

21,341,913

18,818,115

Diluted

21,200,558

21,421,367

21,544,040

21,437,180

18,942,129

AVERAGE BALANCE SHEET DATA

Total assets

$5,337,264

$5,136,136

$5,085,340

$4,913,620

$3,990,493

Loans and leases

3,097,145

3,153,543

3,165,653

3,156,524

2,602,340

Total deposits

4,410,288

4,195,492

4,212,410

4,069,239

3,186,943

Total common equity

644,923

640,828

632,527

607,127

547,309

Total tangible common equity*

457,725

451,011

441,635

423,966

358,889

SELECTED RATIOS

Annualized return on avg assets (ROA)

1.25%

1.19%

0.94%

1.38%

0.83%

Annualized return on avg assets, operating*

1.25%

1.08%

0.95%

0.91%

0.89%

Annualized pre-tax, pre-provision, operating*

1.61%

1.62%

1.74%

1.75%

1.79%

Annualized return on avg common equity, operating*

10.32%

8.63%

7.65%

7.40%

6.50%

Annualized return on avg tangible common equity, oper*

14.54%

12.27%

10.95%

10.60%

9.91%

Average loans to average deposits

70.23%

75.17%

75.15%

77.57%

81.66%

FTE Net Interest Margin*

3.34%

3.51%

3.58%

3.63%

3.93%

Efficiency Ratio

55.24%

54.65%

54.52%

50.62%

57.17%

Efficiency Ratio, operating*

55.24%

56.54%

54.04%

53.91%

55.36%

*See reconciliation of Non-GAAP financial measures

CREDIT QUALITY

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

1.07%

1.15%

1.09%

0.88%

0.80%

Nonperforming assets to tangible equity + ACL

7.52%

8.57%

9.31%

9.84%

12.12%

Nonperforming assets to total loans + OREO

1.20%

1.35%

1.42%

1.44%

1.81%

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

0.47%

0.25%

0.09%

0.04%

0.03%

**Beginning January 1, 2021, calculation is based on CECL methodology. Prior to January 1, 2021, calculation was based upon incurred loss methodology

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

BALANCE SHEET

Mar 31,

2021

Dec 31,
2020

Sept 30,
2020

June 30,
2020

Mar 31,
2020

Assets

Cash and cash equivalents

$ 813,257

$ 562,554

$ 603,736

$ 539,125

$ 286,759

Securities available-for-sale

1,135,189

1,022,182

957,458

927,205

762,977

Other investments

22,137

27,475

27,461

26,059

25,911

Total investment securities

1,157,326

1,049,657

984,919

953,264

788,888

Loans held for sale

15,119

21,432

22,482

18,632

13,288

Total loans

3,055,093

3,123,678

3,155,932

3,171,535

2,602,288

Allowance for credit losses

(32,663)

(35,820)

(34,256)

(28,064)

(20,804)

Loans, net

3,022,430

3,087,858

3,121,676

3,143,471

2,581,484

Premises and equipment

121,934

123,450

124,875

125,053

108,013

Other Real Estate Owned

5,769

5,802

5,202

5,471

6,974

Goodwill and other intangibles

186,648

187,700

190,380

191,431

187,927

Other assets

120,315

114,307

110,889

108,458

88,468

Total assets

$5,442,798

$5,152,760

$5,164,159

$5,084,905

$4,061,801

Liabilities and Shareholders’ Equity

Non-interest bearing deposits^

$ 632,485

$ 571,079

$ 482,236

$ 486,039

$ 340,606

Interest-bearing deposits

3,987,812

3,644,201

3,746,978

3,730,851

2,937,188

Total deposits

4,620,297

4,215,280

4,229,214

4,216,890

3,277,794

Borrowings

4,466

114,647

115,827

116,005

116,180

Subordinated debentures

144,572

144,592

144,709

80,756

80,717

Other liabilities

29,514

33,426

36,040

43,459

31,184

Total liabilities

4,798,849

4,507,945

4,525,790

4,457,110

3,505,875

Total shareholders’ equity

643,949

644,815

638,369

627,795

555,926

Total liabilities and shareholders’ equity

$5,442,798

$5,152,760

$5,164,159

$5,084,905

$4,061,801

^Reclassified $695,751 to interest-bearing deposits for Mar 31, 2021

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT

Three Months Ended

3/31/21

12/31/20

9/30/20

6/30/20

3/31/20

Interest Income:

Loans, including fees

$ 38,587

$ 38,472

$ 39,344

$ 39,184

$ 34,290

Investment securities

5,526

5,606

5,309

5,187

5,304

Accretion of purchase accounting adjustments

1,026

1,494

1,655

1,409

1,715

Other interest income

48

41

29

19

289

Total interest income

45,187

45,613

46,337

45,799

41,598

Interest Expense:

Deposits

3,910

4,262

5,110

5,967

6,034

Borrowings

288

260

265

224

917

Subordinated debentures

1,821

1,823

1,188

1,176

1,203

Accretion of purchase accounting adjustments

(61)

(198)

(198)

(748)

(621)

Total interest expense

5,958

6,147

6,365

6,619

7,533

Net interest income

39,229

39,466

39,972

39,180

34,065

Provision for credit losses

-

3,523

6,921

7,606

7,102

Net interest income after provision for credit losses

39,229

35,943

33,051

31,574

26,963

Non-interest Income:

Service charges on deposit accounts

1,761

1,925

1,780

1,597

1,914

Mortgage Income

3,162

3,270

2,961

2,646

1,567

Interchange Fee Income

2,644

2,491

2,395

1,986

Gain (loss) on securities, net

20

3

32

73

174

Financial Assistance Award/Bank Enterprise Award

-

968

-

-

-

Bargain Purchase Gain and Gain on Sale of Land

-

812

-

7,643

-

Other charges and fees

1,885

1,388

1,530

1,326

833

Total non-interest income

9,472

10,928

8,794

15,680

6,474

Non-interest expense:

Salaries and employee benefits

16,054

16,642

15,494

15,866

13,228

Occupancy expense

3,879

3,890

3,826

3,200

2,918

FDIC/OCC premiums

494

520

447

237

147

Marketing

160

71

24

25

213

Amortization of core deposit intangibles

1,052

1,052

1,052

1,052

938

Other professional services

934

764

990

984

874

Acquisition charges

-

41

238

2,295

740

Other non-interest expense

4,691

4,917

4,864

4,411

4,381

Total Non-interest expense

27,264

27,897

26,935

28,070

23,439

Earnings before income taxes

21,437

18,974

14,910

19,184

9,998

Income tax expense

4,793

3,639

2,993

2,241

1,687

Net income available to common shareholders

$ 16,644

$ 15,335

$ 11,917

$ 16,943

$ 8,311

Diluted earnings per common share

$ 0.79

$ 0.72

$ 0.55

$ 0.79

$ 0.44

Diluted earnings per common share, operating*

$ 0.79

$ 0.65

$ 0.56

$ 0.52

$ 0.47

*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

2021

2020

Interest Income:

Loans, including fees

$ 38,587

$ 34,290

Investment securities

5,526

5,304

Accretion of purchase accounting adjustments

1,026

1,715

Other interest income

48

289

Total interest income

45,187

41,598

Interest Expense:

Deposits

3,910

6,034

Borrowings

288

917

Subordinated debentures

1,821

1,203

Amortization of purchase accounting adjustments

(61)

(621)

Total interest expense

5,958

7,533

Net interest income

39,229

34,065

Provision for credit losses

-

7,102

Net interest income after provision for credit losses

39,229

26,963

Non-interest Income:

Service charges on deposit accounts

1,761

1,914

Mortgage Income

3,162

1,567

Interchange Fee Income

2,644

1,986

Gain (loss) on securities, net

20

174

Financial Assistance Award/Bank Enterprise Award

-

-

Bargain Purchase Gain and Gain on Sale of Land

-

-

Other charges and fees

1,885

833

Total non-interest income

9,472

6,474

Non-interest expense:

Salaries and employee benefits

16,054

13,228

Occupancy expense

3,879

2,918

FDIC/OCC premiums

494

147

Marketing

160

213

Amortization of core deposit intangibles

1,052

938

Other professional services

934

874

Acquisition charges

-

740

Other non-interest expense

4,691

4,381

Total Non-interest expense

27,264

23,439

Earnings before income taxes

21,437

9,998

Income tax expense

4,793

1,687

Net income available to common shareholders

$ 16,644

$ 8,311

Diluted earnings per common share

$ 0.79

$ 0.44

Diluted earnings per common share, operating*

$ 0.79

$ 0.47

*See reconciliation of Non-GAAP financial measures

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(Dollars in thousands)

COMPOSITION OF LOANS

Mar 31,
2021

Percent
of Total

Dec 31,
2020

Sept 30,
2020

June 30,
2020

Mar 31,
2020

Percent
of Total

Commercial, financial and agricultural

$ 532,122

17.3%

$ 561,342

$ 576,812

$ 629,497

$ 327,979

12.5%

Real estate – construction

304,457

9.9%

301,283

330,070

337,337

334,707

12.8%

Real estate – commercial

1,217,505

39.7%

1,214,602

1,191,514

1,163,897

1,048,854

40.1%

Real estate – residential

944,032

30.7%

987,313

999,381

978,372

828,378

31.7%

Lease Financing Receivable

3,382

0.1%

2,733

2,478

2,811

3,526

0.1%

Obligations of States & subdivisions

14,996

0.5%

15,369

13,345

17,010

18,218

0.7%

Consumer

38,599

1.3%

41,036

42,332

42,611

40,626

1.6%

Loans held for sale

15,119

0.5%

21,432

22,482

18,632

13,288

0.5%

Total loans

$3,070,212

100%

$3,145,110

$3,178,414

$3,190,167

$2,615,576

100%

COMPOSITION OF DEPOSITS

Mar 31,
2021

Percent
of Total

Dec 31,
2020

Sept 30,
2020

June 30,
2020

Mar 31,
2020

Percent
of Total

Noninterest bearing^

$ 632,485

13.7%

$571,079

$482,236

$486,039

$340,606

10.4%

NOW and other^

702,766

15.2%

664,626

658,453

601,195

478,526

14.6%

Money Market/Savings^

2,734,873

59.2%

2,398,526

2,456,504

2,451,991

1,826,973

55.7%

Time Deposits of less than $250,000

419,556

9.0%

439,101

473,265

499,406

462,808

14.1%

Time Deposits of $250,000 or more

130,617

2.9%

141,948

158,756

178,259

168,881

5.2%

Total Deposits

$4,620,297

100%

$4,215,280

$4,229,214

$4,216,890

$3,277,794

100%

Deposits Without Reclassification^

Mar 31,
2021

Percent
of Total

Dec 31,
2020

Sept 30,
2020

June 30,
2020

Mar 31,
2020

Percent
of Total

Noninterest bearing

$1,328,236

28.7%

$1,185,980

$1,195,042

$1,189,766

$ 749,939

22.9%

Now and other

1,562,119

33.8%

1,347,778

1,335,798

1,347,324

1,122,027

34.2%

Money Market/Savings

1,179,769

25.6%

1,100,473

1,066,353

1,002,135

774,139

23.6%

Time Deposits of less than $250,000

419,556

9.0%

439,101

473,265

499,406

462,808

14.1%

Time Deposits of $250,000 or more

130,617

2.9%

141,948

158,756

178,259

168,881

5.2%

Total Deposits

$4,620,297

100%

$4,215,280

$4,229,214

$4,216,890

$3,277,794

100%

ASSET QUALITY DATA

Mar 31,
2021

Dec 31,
2020

Sept 30,
2020

June 30,
2020

Mar 31,
2020

Nonaccrual loans

$ 29,981

$ 33,774

$ 37,300

$ 39,201

$ 37,751

Loans past due 90 days and over

1,079

2,692

2,396

1,009

2,393

Total nonperforming loans

31,060

36,466

39,696

40,210

40,144

Other real estate owned

5,769

5,802

5,202

5,471

6,974

Nonaccrual securities

-

-

-

-

-

Total nonperforming assets

$ 36,829

$42,268

$44,898

$45,681

$ 47,118

Nonperforming assets to total assets

0.68%

0.82%

0.87%

0.90%

1.16%

Nonperforming assets to total loans + OREO

1.20%

1.35%

1.42%

1.44%

1.81%

ACL to nonperforming loans

105.16%

98.23%

86.30%

69.79%

51.82%

ACL to total loans

1.07%

1.15%

1.09%

0.88%

0.80%

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

$ 3,553

$ 1,959

$ 729

$ 346

$ 205

Annualized QTD net chg-offs (recs) to loans

0.47%

0.25%

0.09%

0.04%

0.03%

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

Yield

Three Months Ended

Three Months Ended

Three Months Ended

Three Months Ended

Three Months Ended

Analysis

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

March 31, 2020

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

$699,585

$3,591

2.05%

$659,243

$3,678

2.23%

$616,168

$3,432

2.23%

$605,626

$3,439

2.27%

$560,613

$3,944

2.81%

Tax-exempt

securities

367,322

2,590

2.82%

361,529

2,581

2.86%

341,550

2,513

2.94%

300,922

2,340

3.11%

224,212

1,821

3.25%

Total investment

securities

1,066,907

6,181

2.32%

1,020,772

6,259

2.45%

957,718

5,945

2.48%

906,548

5,779

2.55%

784,825

5,765

2.94%

in other banks

614,283

48

0.03%

404,069

41

0.04%

413,786

29

0.03%

321,559

19

0.02%

129,978

289

0.89%

Loans

3,097,145

39,613

5.12%

3,153,543

39,966

5.07%

3,165,653

40,999

5.18%

3,156,524

40,593

5.14%

2,602,340

36,005

5.53%

Total Interest

earning assets

4,778,335

45,842

3.84%

4,578,384

46,266

4.04%

4,537,157

46,973

4.14%

4,384,631

46,391

4.23%

3,517,143

42,059

4.78%

Other assets

558,929

557,752

548,183

528,989

473,350

Total assets

$5,337,264

$5,136,136

$5,085,340

$4,913,620

$3,990,493

Interest-bearing

liabilities:

Deposits

$4,172,326

$ 3,849

0.37%

$3,971,379

$ 4,064

0.41%

$3,960,054

$4,912

0.50%

$3,746,535

$5,219

0.56%

$3,042,529

$5,413

0.71%

Borrowed Funds

100,143

288

1.15%

115,430

260

0.90%

115,935

265

0.91%

116,270

224

0.77%

145,267

917

2.53%

Subordinated

debentures

144,590

1,821

5.04%

144,676

1,823

5.04%

81,470

1,188

5.83%

80,736

1,176

5.83%

80,697

1,203

5.96%

Total interest

bearing liabilities

4,417,059

5,958

0.54%

4,231,485

6,147

0.58%

4,157,459

6,365

0.61%

3,943,541

6,619

0.67%

3,268,493

7,533

0.92%

Other liabilities

275,282

263,823

295,354

362,952

174,691

Shareholders' equity

644,923

640,828

632,527

607,127

547,309

Total liabilities and

shareholders'

equity

$5,337,264

$5,136,136

$5,085,340

$4,913,620

$3,990,493

Net interest

income (FTE)*

$39,884

3.30%

$40,119

3.46%

$40,608

3.53%

$39,772

3.56%

$34,526

3.86%

Net interest margin (FTE)*

3.34%

3.51%

3.58%

3.63%

3.93%

Core net interest

margin*

3.25%

3.35%

3.41%

3.42%

3.65%

*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

Mar 31,
2021

Dec 31,
2020

Sept 30,
2020

June 30,
2020

Mar 31,
2020

Book value per common share

$ 30.64

$ 30.54

$ 29.82

$ 29.34

$ 29.49

Effect of intangible assets per share

8.88

8.89

8.89

8.94

9.97

Tangible book value per common share

$ 21.76

$ 21.65

$ 20.93

$ 20.40

$ 19.52

Diluted earnings per share

$ 0.79

$ 0.72

$ 0.55

$ 0.79

$ 0.44

Effect of acquisition charges

-

0.01

0.01

0.11

0.04

Tax on acquisition charges

-

-

-

(0.03)

(0.01)

Effect of bargain purchase gain and gain on sale of land

-

(0.04)

-

(0.36)

-

Tax on gain on sale of land

-

-

-

0.01

-

Effect of Treasury awards

-

(0.05)

-

-

-

Tax on Treasury awards

-

0.01

-

-

-

Diluted earnings per share, operating

$ 0.79

$ 0.65

$ 0.56

$ 0.52

$ 0.47

Year to Date

2021

2020

Diluted earnings per share

$ 0.79

$ 0.44

Effect of acquisition charges

-

0.04

Tax on acquisition charges

-

(0.01)

Effect of bargain purchase gain and gain on sale of land

-

-

Tax on gain on sale of land

-

-

Effect of Treasury awards

-

-

Tax on Treasury awards

-

-

Diluted earnings per share, operating

$ 0.79

$ 0.47

Year to Date

2021

2020

Net income available to common shareholders

$ 16,644

$ 8,311

Acquisition charges

-

740

Tax on acquisition charges

-

(164)

Bargain purchase gain and gain on sale of land

-

-

Tax on gain on sale of land

-

-

Treasury awards

-

-

Tax on Treasury awards

-

-

Net earnings available to common shareholders, operating

$ 16,644

$ 8,887

Three Months Ended

Average Balance Sheet Data

Mar 31,
2021

Dec 31,
2020

Sept 30,
2020

June 30,
2020

Mar 31,
2020

Total average assets

A

$5,337,264

$5,136,136

$5,085,340

$4,913,620

$3,990,493

Total average earning assets

B

4,778,335

$4,578,384

$4,537,157

$4,384,631

$3,517,143

`

Common Equity

C

$ 644,923

$ 640,828

$ 632,527

$ 607,127

$ 547,309

Less intangible assets

187,148

189,817

190,892

183,161

188,420

Total Tangible common equity

D

$ 457,775

$ 451,011

$ 441,635

$ 423,966

$ 358,889

Three Months Ended

Net Interest Income Fully Tax Equivalent

Mar 31,
2021

Dec 31,
2020

Sept 30,
2020

June 30,
2020

Mar 31,
2020

Net interest income

E

$ 39,229

$ 39,466

$ 39,972

$ 39,180

$ 34,065

Tax-exempt investment income

(1,935)

(1,928)

(1,877)

(1,748)

(1,360)

Taxable investment income

2,590

2,581

2,513

2,340

1,821

Net Interest Income Fully Tax Equivalent

F

$ 39,884

$ 40,119

$ 40,608

$ 39,772

$ 34,526

Annualized Net Interest Margin

E/B

3.28%

3.45%

3.52%

3.57%

3.87%

Annualized Net Interest Margin, Fully Tax Equivalent

F/B

3.34%

3.51%

3.58%

3.63%

3.93%

Total Interest Income, Fully Tax Equivalent

Total Interest Income

$ 45,187

$ 45,613

$ 46,337

$ 45,799

$ 41,598

Tax-exempt investment income

(1,935)

(1,928)

(1,877)

(1,748)

(1,360)

Taxable investment income

2,590

2,581

2,513

2,340

1,821

Total Interest Income, Fully Tax Equivalent

G

$ 45,842

$ 46,266

$ 46,973

$ 46,391

$ 42,059

Yield on Average Earning Assets, Fully Tax Equivalent

G/B

3.84%

4.04%

4.14%

4.23%

4.78%

Interest Income Investment Securities, Fully Tax Equivalent

Interest Income Investment Securities

$ 5,526

$ 5,606

$ 5,309

$ 5,187

$ 5,304

Tax-exempt investment income

(1,935)

(1,928)

(1,877)

(1,748)

(1,360)

Taxable investment Income

2,590

2,581

2,513

2,340

1,821

Interest Income Investment Securities, Fully Tax Equivalent

H

$ 6,181

$ 6,259

$ 5,945

$ 5,779

$ 5,765

Average Investment Securities

I

$ 1,066,907

$ 1,020,772

$ 957,718

$ 906,548

$ 784,825

Yield on Investment Securities, Fully Tax Equivalent

H/I

2.32%

2.45%

2.48%

2.55%

2.94%

Three Months Ended

Core Net Interest Margin

Mar 31,
2021

Dec 31,
2020

Sept 30,
2020

June 30,
2020

Mar 31,
2020

Net interest income (FTE)

$ 39,884

$ 40,119

$ 40,608

$ 39,772

$ 34,526

Less purchase accounting adjustments

1,026

1,692

1,853

2,157

2,336

Net interest income, net of purchase accounting adj

J

$ 38,858

$ 38,427

$ 38,755

$ 37,615

$ 32,190

Total average earning assets

$4,778,335

$4,578,384

$4,537,157

$4,384,631

$3,517,143

Add average balance of loan valuation discount

8,480

9,808

11,501

10,651

12,237

Avg earning assets, excluding loan valuation discount

K

$4,786,815

$4,588,192

$4,548,658

$4,395,282

$3,529,380

Core net interest margin

J/K

3.25%

3.35%

3.41%

3.42%

3.65%

Three Months Ended

Efficiency Ratio

Mar 31,
2021

Dec 31,
2020

Sept 30,
2020

June 30,
2020

Mar 31,
2020

Operating Expense

Total non-interest expense

$ 27,264

$ 27,897

$ 26,935

$ 28,070

$ 23,439

Pre-tax non-operating expenses

-

(41)

(238)

(2,295)

(740)

Adjusted Operating Expense

L

$ 27,264

$ 27,856

$ 26,697

$ 25,775

$ 22,699

Operating Revenue

Net interest income, FTE

$ 39,884

$ 40,119

$ 40,608

$ 39,772

$ 34,526

Total non-interest income

9,472

10,928

8,794

15,680

6,474

Pre-tax non-operating items

-

(1,780)

-

(7,643)

-

Adjusted Operating Revenue

M

$ 49,356

$ 49,267

$ 49,402

$ 47,809

$ 41,000

Efficiency Ratio, operating

L/M

55.24%

56.54%

54.04%

53.91%

55.36%

Three Months Ended

Return Ratios

Mar 31,
2021

Dec 31,
2020

Sept 30,
2020

June 30,
2020

Mar 31,
2020

Net income available to common shareholders

N

$ 16,644

$ 15,335

$ 11,917

$ 16,943

$ 8,311

Acquisition charges

-

41

238

2,295

740

Tax on acquisition charges

-

(10)

(61)

(518)

(164)

Bargain purchase gain and gain on sale of land

-

(812)

-

(7,643)

-

Tax on gain on sale of land

-

-

-

157

-

Treasury awards

-

(968)

-

-

-

Tax on Treasury awards

-

245

-

-

-

Net earnings available to common shareholders, operating

O

$ 16,644

$ 13,831

$ 12,094

$ 11,234

$ 8,887

Pre-Tax Pre-Provision Operating Earnings

Earnings before income taxes

P

$ 21,437

$ 18,974

$ 14,910

$ 19,184

$ 9,998

Acquisition charges

-

41

238

2,295

740

Provision for loan losses

-

3,523

6,921

7,606

7,102

Treasury Awards and Gains

-

(1,780)

-

(7,643)

-

Pre-Tax, Pre-Provision Operating Earnings

Q

$ 21,437

$ 20,758

$ 22,069

$ 21,442

$ 17,840

Annualized return on avg assets

N/A

1.25%

1.19%

0.94%

1.38%

0.83%

Annualized return on avg assets, oper

O/A

1.25%

1.08%

0.95%

0.91%

0.89%

Annualized pre-tax, pre-provision, oper

Q/A

1.61%

1.62%

1.74%

1.75%

1.79%

Annualized return on avg common equity, oper

O/C

10.32%

8.63%

7.65%

7.40%

6.50%

Annualized return on avg tangible common equity, operating

O/D

14.54%

12.27%

10.95%

10.60%

9.91%

Mortgage Department

Net Interest Income after provision for credit losses

$ 140

$ 133

$ 142

$ 127

$ 119

Loan fee income

3,162

3,270

2,961

2,646

1,567

Salaries and employee benefits

(1,512)

(1,329)

(1,444)

(1,246)

(1,077)

Other non-interest expense

(126)

(105)

(110)

(99)

(152)

Earnings before income taxes

$ 1,664

$ 1,969

$ 1,549

$ 1,428

$ 457

View source version on businesswire.com: https://www.businesswire.com/news/home/20210421006108/en/

Contacts

M. Ray "Hoppy" Cole
Chief Executive Officer
Dee Dee Lowery
Chief Financial Officer
(601) 268-8998