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FDIC-Insured - Backed by the full faith and credit of the U.S. Government

Fourth Quarter 2024 Earnings

The First Bancshares, Inc. (“FBMS” or “the Company”), holding company for The First Bank (“the Bank”), reported today financial results for the quarter ended December 31, 2024.
 
 
Highlights for the Quarter:
  • Net income available to common shareholders totaled $18.3 million for the quarter ended December 31, 2024, representing a decrease of 1.5% when compared to $18.6 million for the quarter ended September 30, 2024. The Company recorded $1.1 million provision for credit losses for the quarter ended December 31, 2024 and $1.0 million provision for credit losses for the quarter ended September 30, 2024.
  • Excluding one-time items detailed in the tables located in the appendix of this release, net earnings available to common shareholders, operating (non-GAAP) decreased $0.2 million, or 1.1% to $20.3 million for the quarter ended December 31, 2024 as compared to $20.5 million for the quarter ended September 30, 2024.
  • For the quarter ended December 31, 2024, total loans increased $88.6 million, or 6.7%, on an annualized basis, as compared to the quarter ended September 30, 2024.
  • Annualized net interest margin increased 4 basis points to 3.37% for the quarter ended December 31, 2024 from 3.33% for the quarter ended September 30, 2024.
  • Core net interest margin (non-GAAP) increased 7 basis points during the quarter ended December 31, 2024 from 3.26% to 3.33%.
  • Cost of deposits averaged 178 basis points for the fourth quarter of 2024 compared to 183 basis points for the third quarter 2024.
  • Past due loans to total loans were $21.8 million or 0.40% for the quarter ending December 31, 2024, compared to $22.8 million, or 0.43% for the quarter ending September 30, 2024, and $20.8 million, or 0.40% for the quarter ending June 30, 2024.
  • Annualized quarter-to-date net charge-offs and recoveries to total loans were $0.6 million, or 0.04% for the quarter ended December 31, 2024, compared to $0.4 million, or 0.03% for the quarter ended September 30, 2024, and compared to $0.8 million, or 0.06% for the quarter ended December 31, 2023.
  • Nonperforming assets of $29.9 million to total assets was 0.37% for the quarter ended December 31, 2024, compared to $25.1 million, or 0.31% for the quarter ended September 30, 2024, and $20.2 million, or 0.25% for the quarter ended December 31, 2023.
  • On July 29, 2024, the Company entered into a definitive merger agreement (the "Merger Agreement") with Renasant Corporation ("Renasant"), the holding company for Renasant Bank, whereby the Company will merge with and into Renasant, with Renasant continuing as the surviving corporation, and immediately thereafter, the Bank will merge with and into Renasant Bank (collectively, the "Merger"). Subject to the terms and conditions of the Merger Agreement, the companies will combine in an all-stock transaction in which all shareholders of the
    Company will receive 1.00 share of Renasant common stock for each share of Company common stock. The Merger has been approved by each company's board of directors and shareholders and is expected to close in the first half of 2025. Completion of the Merger is subject to customary closing conditions, including the receipt of required regulatory approvals.
Highlights for the Year:
  • In the year-over-year comparison, net income available to common shareholders increased $1.7 million, or 2.3%, from $75.5 million for the year ended December 31, 2023 to $77.2 million for the same period ended December 31, 2024.
  • Total loans increased $237.2 million for the year ended December 31, 2024, representing net growth of 4.6%, as compared to the same period ended December 31, 2023.
  • Past due loans of $21.8 million to total loans was 0.40% for the year ended December 31, 2024, compared to $11.7 million, or 0.23% for the same period ended December 31, 2023.
  • Total deposits increased $142.0 million, or 2.2%, from $6.463 billion for the year ended December 31, 2023 to $6.605 billion for the same period ended December 31, 2024.
M. Ray “Hoppy” Cole, Jr., President, and Chief Executive Officer, commented, “We are pleased with our fourth quarter performance, which was characterized by strong loan growth, core net interest margin expansion and in line operating results. This performance is the result of the hard work and commitment of our associates in building a high performing southeastern bank franchise. Two thousand twenty-four was a pivotal year in the history of our company with the announcement of the Merger. We are excited about this strategic partnership and the opportunities it presents for us to continue to build value for all our stakeholders.”
 
Quarterly Earnings

Net income available to common shareholders totaled $18.3 million for the quarter ended December 31, 2024, a decrease of $0.3 million, or 1.5%, when compared to $18.6 million for the quarter ended September 30, 2024. Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) decreased $0.2 million, or 1.1%, to $20.3 million for quarter ended December 31, 2024 as compared to $20.5 million for the quarter ended September 30, 2024. The Company recorded a provision for credit losses of $1.1 million for the quarter ended December 31, 2024 and $1.0 million for the quarter ended September 30, 2024.
 
Earnings Per Share

For the fourth quarter of 2024, diluted earnings per share were $0.58 compared to $0.59 for the third quarter of 2024 and $0.35 for the fourth quarter of 2023. Diluted earnings per share, operating (non-GAAP) were $0.64 for the fourth quarter of 2024 compared to $0.65 for the third quarter of 2024 and $0.59 for the fourth quarter of 2023.
 
Balance Sheet

Consolidated assets increased $38.3 million to $8.005 billion at December 31, 2024 from $7.966 billion at September 30, 2024. Loans increased $88.6 million, and cash increased $6.3 million for the quarterly comparison. Total loans were $5.407 billion for the quarter ended December 31, 2024, as compared to $5.319 billion for the quarter ended September 30, 2024, and $5.170 billion for the quarter ended December 31, 2023, representing an increase of $88.6 million, or 1.7%, for the sequential quarter comparison, and $237.2 million, or 4.6%, for the prior year quarterly comparison.
 
Total deposits were $6.605 billion for the quarter ended December 31, 2024, as compared to $6.561 billion for the quarter ended September 30, 2024, and $6.463 billion for the quarter ended December 31, 2023, representing an increase of $44.1 million, or 0.7%, for the sequential quarter comparison, and an increase of $142.0 million, or 2.2%, for the prior year quarterly comparison. Book value per share decreased to $31.95 at December 31, 2024 from $32.11 at September 30, 2024. Tangible book value per share (non-GAAP) decreased $0.09 to $21.41 at December 31, 2024 from $21.50 at September 30, 2024. The balance in accumulated other comprehensive loss increased $17.5 million to $109.6 million at December 31, 2024 from $92.1 million at September 30, 2024.
 
Asset Quality

Nonperforming assets totaled $29.9 million at December 31, 2024, an increase of $4.8 million compared to $25.1 million at September 30, 2024 and an increase of $9.7 million compared to $20.2 million at December 31, 2023. Nonaccrual loans totaled $20.3 million, an increase of $4.1 million as compared to September 30, 2024 and an increase of $9.6 million as compared to December 31, 2023. The ratio of the allowance for credit losses (ACL) to total loans was 1.04% at December 31, 2024, 1.05% at September 30, 2024 and 1.05% at December 31, 2023. The ratio of annualized net charge-offs (recoveries) to total loans was 0.04% for the quarter ended December 31, 2024 compared to 0.03% for the quarter ended September 30, 2024 and 0.06% for the quarter ended December 31, 2023.
 
Fourth Quarter 2024 vs Third Quarter 2024 Earnings Comparison

Net income available to common shareholders for the fourth quarter of 2024 decreased $0.3 million to $18.3 million compared to $18.6 million for the third quarter of 2024. Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) decreased $0.2 million, or 1.1%, to $20.3 million for quarter ended December 31, 2024 as compared to $20.5 million for the quarter ended September 30, 2024. Net interest income for the fourth quarter of 2024 was $60.1 million as compared to $59.0 million for the third quarter of 2024, an increase of $1.1 million. The increase was largely due to the decrease in interest expense of $1.1 million. Fourth quarter 2024 net interest margin of 3.37% included 9 basis points related to purchase accounting adjustments compared to 3.33% for the third quarter in 2024, which included 11 basis points related to purchase accounting adjustments.
 
Core net interest margin (non-GAAP) increased 7 basis points to 3.33% for the fourth quarter of 2024 from 3.26% for the third quarter of 2024. Investment securities totaled $1.646 billion, or 20.6% of total assets at December 31, 2024, compared to $1.715 billion, or 21.5% of total assets at September 30, 2024. The average balance of investment securities decreased $21.4 million in sequential-quarter comparison. The average tax equivalent yield on investment securities (non-GAAP) decreased 4 basis points to 2.52% from 2.56% in sequential-quarter comparison. The investment portfolio had a net unrealized loss of $115.7 million at December 31, 2024 as compared to a net unrealized loss of $91.6 million at September 30, 2024.
 
The average yield on all earning assets (non-GAAP) decreased in sequential-quarter comparison from 5.27% to 5.25%. Interest expense on average interest bearing liabilities decreased 7 basis points from 2.72% for the third quarter of 2024 to 2.65% for the fourth quarter of 2024. Cost of all deposits averaged 178 basis points for the fourth quarter of 2024 compared to 183 basis points for the third quarter of 2024. This decrease was a result of lower interest rates and decreased competition for deposits. Non-interest income decreased $0.7 million from $12.2 million in the third quarter of 2024 to $11.5 million in the fourth quarter of 2024, primarily attributable to lower service charges, fees and a loss on investments totaling $1.1 million, partially offset by an award from U.S. Treasury of $0.3 million.

Non-interest expense for the fourth quarter of 2024 was $48.4 million compared to $46.4 million for the third quarter of 2024, an increase of $2.0 million. The increase is primarily attributable to an increase in salaries and employee benefits of $2.3 million and an increase in other expenses of $1.5 million, partially offset by a decrease in acquisition expense of $1.8 million. Included in the increase in salary expense is $1.9 million in accelerated vesting on restricted stock grants related to the merger.
 
Fourth Quarter 2024 vs. Fourth Quarter 2023 Earnings Comparison

Net income available to common shareholders for the fourth quarter of 2024 totaled $18.3 million compared to $11.0 million for the fourth quarter of 2023, an increase of $7.3 million or 65.6%. This increase was partially attributable to $6.4 million increase in loan interest and fees and the pre-tax loss of $9.7 million on the sale of $123.0 million in available-for-sale securities in 2023, partially offset by an increase in salary expense of $3.8 million, a decrease in the accretion of purchase accounting adjustments of $1.6 million and other one-time items detailed in the tables included within the full linked press release. Excluding one-time items detailed in the tables included within the linked press release, net earnings available to common shareholders, operating (non-GAAP) increased $1.5 million, or 8.25%, to $20.3 million for the quarter ended December 31, 2024, as compared to $18.7 million for the quarter ended December 31, 2023.
 
Net interest income for the fourth quarter of 2024 was $60.1 million, an increase of $2.5 million or 4.3% when compared to the fourth quarter of 2023. FTE net interest income (non-GAAP) totaled $61.1 million and $58.7 million for the fourth quarter of 2024 and 2023, respectively. The increase was largely due to increased loan income, partially offset by a decrease in investment income and increase in the costs of deposits. Fourth quarter of 2024 net interest margin was 3.37%, which included 9 basis points related to purchase accounting adjustments compared to 3.28% for the same quarter in 2023, which included 19 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin (non-GAAP) increased 19 basis points in prior year quarterly comparison primarily due to a decrease in rates on interest bearing liabilities.

Non-interest income increased $9.2 million for the fourth quarter of 2024 as compared to the fourth quarter of 2023. This increase was attributed to the loss on sale of available for sale investment securities of $9.7 million in 2023. Fourth quarter 2024 non-interest expense was $48.4 million, an increase of $3.9 million, or 8.9% as compared to the fourth quarter of 2023. This increase was primarily attributable to an increase of $3.8 million in salary expense with $1.9 million in accelerated vesting on restricted stock grants related to the Merger. Investment securities totaled $1.646 billion, or 20.6% of total assets at December 31, 2024, compared to $1.735 billion, or 21.7% of total assets at December 31, 2023. For the fourth quarter of 2024 compared to the fourth quarter of 2023, the average balance of investment securities decreased $129.0 million. The average tax equivalent yield on investment securities (non-GAAP) increased 15 basis points to 2.52% from 2.37% in the prior year quarterly comparison. The investment portfolio had a net unrealized loss of $115.7 million at December 31, 2024 as compared to a net unrealized loss of $121.9 million at December 31, 2023.

The average yield on all earning assets increased 21 basis points in prior year quarterly comparison, from 5.04% for the fourth quarter of 2023 to 5.25% for the fourth quarter of 2024. Interest expense on average interest bearing liabilities increased 18 basis points from 2.47% for the fourth quarter of 2023 to 2.65% for the fourth quarter of 2024. Cost of all deposits averaged 178 basis points for the fourth quarter of 2024 compared to 154 basis points for the fourth quarter of 2023.
 
Year-to-Date Earnings Comparison

In the year-over-year comparison, net income available to common shareholders increased $1.7 million, or 2.3%, from $75.5 million for the year ended December 31, 2023, to $77.2 million for the same period ended December 31, 2024. Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) decreased $15.4 million, or 15.9%, to $81.4 million for the year ended December 31, 2024 as compared to $96.7 million for the same period ended December 31, 2023. Net interest income was $234.3 million for the twelve months ended December 31, 2024, a decrease of $15.1 million as compared to the same period ended December 31, 2023, primarily due to an increase in interest expense on deposits partially offset by an increase in loan interest income.

Non-interest income was $49.8 million for the year ended December 31, 2024, an increase of $3.1 million as compared to the same period ended December 31, 2023. This increase was attributed to the loss on sale of available for sale investment securities of $9.7 million in 2023, partially offset by the U.S. Treasury award of $6.2 million received in 2023. Non-interest expense was $182.3 million for the year ended December 31, 2024, a decrease of $2.5 million as compared to the same period ended December 31, 2023. The decrease was partially attributable to $12.2 million decrease in acquisition and other expenses partially offset by an increase of $8.7 million in salary expense.
 
Declaration of Cash Dividend

The Company announced that its Board of Directors declared a cash dividend of $0.25 per share, to be paid on its common stock on February 26, 2025 to shareholders of record as of the close of business on February 10, 2025.