The First Bancshares, Inc. Reports Results for Fourth Quarter ended December 31, 2024

HATTIESBURG, Miss.--(BUSINESS WIRE)--The First Bancshares, Inc. (“FBMS” or “the Company”) (NYSE: FBMS), holding company for The First Bank (“the Bank”), (www.thefirstbank.com) 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 with this press release. Excluding one-time items detailed in the tables included with this 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. About The First Bancshares, Inc. The First Bancshares, Inc., headquartered in Hattiesburg, Mississippi, is the parent company of The First Bank (“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 pre-tax, pre-provision operating earnings, FTE net interest income, FTE net interest margin, core net interest margin, FTE average yield on investment securities, FTE average yield on all earning assets, total tangible common equity, tangible book value per common share, net earnings available to common shareholders, operating, diluted earnings per share, operating, efficiency ratio, operating 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. Fully-tax equivalent, or "FTE", financial metrics are measures used by management to evaluate the corresponding GAAP financial metrics in a manner that takes into account the tax benefits associated with income sources that are exempt from state or federal taxes. Core net interest margin is used by management to measure the net return on earnings assets, which includes investment securities, loans, and leases but excludes certain income and expense items that the Company's management considers to be non-core/adjusted in nature. Similarly, "operating" financial metrics, including operating efficiency ratio and operating earnings per share, are used by management to evaluate operating results exclusive of items that are not indicative of ongoing operations and impact period-to-period comparisons. Management uses "tangible" financial metrics, including tangible common equity and tangible book value, to measure the value of the Company's assets net of intangible assets, such as goodwill. 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, net interest margin, common equity, net earnings available to common shareholders, diluted earnings per share, efficiency ratio, average yield on investment securities, average yield on all earning assets, 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) prevailing, or changes in, economic or political conditions, either nationally or locally, particularly in areas in which the Company conducts operations, including the effects of declines in the real estate market, high unemployment rates, inflationary pressure, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing; (3) interest rate risk, including the effects of changes in interest rates; (4) developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance; (5) changes in applicable laws, rules, or regulations; (6) risks related to the Company’s recently completed acquisitions, and risks related to the Merger, including the fluctuations of the market value of the consideration to be paid to the Company's shareholders in the Merger, the risks related to combining our businesses, expenses related to the Merger and integration of the combined entity, the risks that the Merger may not occur, and the risk of litigation related to the Merger; (7) changes in management’s plans for the future; (8) credit risk associated with our lending activities; (9) changes in loan demand, real estate values, or competition; (10) changes in accounting principles, policies, or guidelines; (11) 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 and related variants; (12) higher inflation and its impacts; (13) significant turbulence or disruption in the capital or financial markets and the effect of a fall in stock market prices on our investment securities; (14) potential impacts of the adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto; (15) the effects of war or other conflicts including the impacts relating to or resulting from Russia's military action in Ukraine or the conflict in Israel and surrounding areas, and (16) 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 SEC, 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. THE FIRST BANCSHARES, INC and SUBSIDIARIES Condensed Consolidated Financial Information (unaudited) (Dollars in thousands except per share data) EARNINGS DATA Quarter Ended 12/31/24 Quarter Ended 9/30/24 Quarter Ended 6/30/24 Quarter Ended 3/31/24 Quarter Ended 12/31/23 Total Interest Income $ 93,584 $ 93,561 $ 91,027 $ 91,663 $ 88,720 Total Interest Expense 33,464 34,547 33,233 34,322 31,055 Net Interest Income 60,120 59,014 57,794 57,341 57,665 Net Interest Income excluding PPP Fee Income 60,120 59,010 57,793 57,340 57,664 FTE net interest income* 61,074 60,004 58,797 58,339 58,651 Provision for credit losses 1,140 1,000 1,650 — 1,250 Non-interest income 11,522 12,242 13,319 12,679 2,346 Non-interest expense 48,368 46,394 44,089 43,425 44,433 Earnings before income taxes 22,134 23,862 25,374 26,595 14,328 Income tax expense 3,836 5,291 5,677 5,967 3,281 Net income available to common shareholders $ 18,298 $ 18,571 $ 19,697 $ 20,628 $ 11,047 PER COMMON SHARE DATA Basic earnings per share $ 0.58 $ 0.59 $ 0.62 $ 0.66 $ 0.35 Diluted earnings per share 0.58 0.59 0.62 0.65 0.35 Diluted earnings per share, operating* 0.64 0.65 0.63 0.65 0.59 Quarterly dividends per share 0.25 0.25 0.25 0.25 0.24 Book value per common share at end of period 31.95 32.11 30.83 30.45 30.22 Tangible book value per common share at period end* 21.41 21.50 20.15 19.70 19.35 Market price at end of period 35.00 32.13 25.98 25.95 29.33 Shares outstanding at period end 31,470,782 31,511,260 31,525,232 31,528,748 31,399,803 Weighted average shares outstanding: Basic 31,501,398 31,516,823 31,527,592 31,475,254 31,401,612 Diluted 31,658,617 31,713,385 31,679,827 31,630,745 31,587,506 AVERAGE BALANCE SHEET DATA Total assets $ 7,958,881 $ 7,944,553 $ 7,939,783 $ 8,005,574 $ 7,917,303 Loans and leases 5,350,549 5,288,321 5,202,006 5,158,071 5,145,228 Total deposits 6,512,395 6,560,761 6,625,500 6,599,287 6,440,774 Total common equity 1,014,793 975,359 963,445 952,708 901,530 Total tangible common equity* 681,706 639,891 625,586 612,470 558,889 SELECTED RATIOS Annualized return on avg assets (ROA) 0.92 % 0.94 % 0.99 % 1.03 % 0.56 % Annualized return on avg assets, operating* 1.02 % 1.03 % 1.01 % 1.03 % 0.95 % Annualized pre-tax, pre-provision, operating* 1.30 % 1.38 % 1.38 % 1.33 % 1.31 % Annualized return on avg common equity, operating* 8.00 % 8.41 % 8.29 % 8.66 % 8.32 % Annualized return on avg tangible common equity, operating* 11.90 % 12.82 % 12.76 % 13.48 % 13.41 % Average loans to average deposits 82.16 % 80.61 % 78.51 % 78.16 % 79.89 % FTE Net Interest Margin* 3.43 % 3.38 % 3.32 % 3.26 % 3.33 % Efficiency Ratio 66.63 % 64.22 % 61.14 % 61.15 % 72.84 % Efficiency Ratio, operating* 62.84 % 60.63 % 60.65 % 61.14 % 62.00 % *See reconciliation of Non-GAAP financial measures CREDIT QUALITY Allowance for credit losses (ACL) as a % of total loans 1.04 % 1.05 % 1.05 % 1.05 % 1.05 % Nonperforming assets to tangible equity + ACL 4.09 % 3.42 % 3.05 % 2.72 % 3.05 % Nonperforming assets to total loans + OREO 0.55 % 0.47 % 0.40 % 0.36 % 0.39 % Annualized QTD net charge-offs (recoveries) to total loans 0.045 % 0.033 % 0.036 % 0.006 % 0.061 % THE FIRST BANCSHARES, INC and SUBSIDIARIES Condensed Consolidated Financial Information (unaudited) (in thousands) BALANCE SHEET December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Assets Cash and cash equivalents $ 220,411 $ 214,135 $ 207,606 $ 339,964 $ 355,147 Securities available for sale 1,003,303 1,060,014 1,118,861 1,085,517 1,039,322 Securities held to maturity 582,939 602,328 607,502 622,574 654,539 Equity securities 15,684 8,383 5,601 3,051 3,043 Other investments 44,168 44,003 39,293 34,094 37,754 Total investment securities 1,646,094 1,714,728 1,771,257 1,745,236 1,734,658 Loans held for sale 3,687 2,987 5,892 4,241 2,914 Total loans 5,407,231 5,318,590 5,250,893 5,139,952 5,170,042 Allowance for credit losses (56,205 ) (55,700 ) (55,133 ) (53,959 ) (54,032 ) Loans, net 5,351,026 5,262,890 5,195,760 5,085,993 5,116,010 Premises and equipment 176,900 177,652 179,289 181,194 182,162 Other Real Estate Owned 7,874 7,314 6,356 6,743 8,320 Goodwill and other intangibles 331,798 334,178 336,561 338,946 341,332 Other assets 266,988 252,571 263,079 261,442 258,802 Total assets $ 8,004,778 $ 7,966,455 $ 7,965,800 $ 7,963,759 $ 7,999,345 Liabilities and Shareholders’ Equity Non-interest bearing deposits $ 1,796,685 $ 1,796,746 $ 1,870,305 $ 1,836,952 $ 1,849,013 Interest-bearing deposits 4,808,171 4,763,966 4,755,812 4,873,403 4,613,859 Total deposits 6,604,856 6,560,712 6,626,117 6,710,355 6,462,872 Borrowings 210,000 207,500 182,400 110,000 390,000 Subordinated debentures 123,731 123,645 123,558 123,472 123,386 Other liabilities 60,760 62,915 61,840 60,020 74,053 Total liabilities 6,999,347 6,954,772 6,993,915 7,003,847 7,050,311 Total shareholders’ equity 1,005,431 1,011,683 971,885 959,912 949,034 Total liabilities and shareholders’ equity $ 8,004,778 $ 7,966,455 $ 7,965,800 $ 7,963,759 $ 7,999,345 THE FIRST BANCSHARES, INC and SUBSIDIARIES Condensed Consolidated Financial Information (unaudited) (in thousands except per share data) EARNINGS STATEMENT Three Months Ended 12/31/2024 9/30/2024 6/30/2024 3/31/2024 12/31/2023 Interest Income: Loans, including fees $ 80,790 $ 80,123 $ 76,269 $ 76,172 $ 74,357 Investment securities 10,656 10,989 11,833 11,248 10,803 Accretion of purchase accounting adjustments 1,609 2,008 2,067 2,627 3,235 Other interest income 529 441 858 1,616 325 Total interest income 93,584 93,561 91,027 91,663 88,720 Interest Expense: Deposits 28,850 29,763 29,247 29,182 24,489 Borrowings 2,695 2,607 1,956 3,022 4,500 Subordinated debentures 1,774 1,961 1,814 1,887 1,807 Accretion of purchase accounting adjustments 145 216 216 231 259 Total interest expense 33,464 34,547 33,233 34,322 31,055 Net interest income 60,120 59,014 57,794 57,341 57,665 Provision for credit losses 1,140 1,000 1,650 — 1,250 Net interest income after provision for credit losses 58,980 58,014 56,144 57,341 56,415 Non-interest Income: Service charges on deposit accounts 3,495 3,709 3,334 3,367 3,447 Mortgage Income 751 927 972 704 582 Interchange Fee Income 4,366 4,460 4,893 4,195 4,593 Gain (Loss) on securities, net (300 ) 225 14 (48 ) (9,670 ) Treasury Awards 280 — — — — Loss on sale of premises and equipment (2 ) (344 ) 163 — (524 ) Other charges and fees 2,932 3,265 3,943 4,461 3,918 Total non-interest income 11,522 12,242 13,319 12,679 2,346 Non-interest Expense: Salaries and employee benefits 27,469 25,131 25,045 24,508 23,717 Occupancy expense 5,992 5,659 5,490 5,714 5,688 FDIC/OCC premiums 1,014 973 1,020 1,008 1,263 Marketing 198 49 59 139 71 Amortization of core deposit intangibles 2,380 2,384 2,385 2,385 2,385 Other professional services 890 1,457 2,028 1,833 2,309 Acquisition and charter conversion charges 788 2,592 352 8 593 Other non-interest expense 9,637 8,149 7,710 7,830 8,407 Total non-interest expense 48,368 46,394 44,089 43,425 44,433 Earnings before income taxes 22,134 23,862 25,374 26,595 14,328 Income tax expense 3,836 5,291 5,677 5,967 3,281 Net income available to common shareholders $ 18,298 $ 18,571 $ 19,697 $ 20,628 $ 11,047 Diluted earnings per common share $ 0.58 $ 0.59 $ 0.62 $ 0.65 $ 0.35 Diluted earnings per common share, operating* $ 0.64 $ 0.65 $ 0.63 $ 0.65 $ 0.59 *See reconciliation of Non-GAAP financial measures THE FIRST BANCSHARES, INC and SUBSIDIARIES Condensed Consolidated Financial Information (unaudited) (in thousands except per share data) EARNINGS STATEMENT Year to Date 2024 2023 Interest Income: Loans, including fees $ 313,349 $ 276,817 PPP loan fee income 5 210 Investment securities 44,726 43,939 Accretion of purchase accounting adjustments 8,311 17,514 Other interest income 3,444 2,453 Total interest income 369,835 340,933 Interest Expense: Deposits 117,042 70,599 Borrowings 10,280 12,279 Subordinated debentures 7,436 7,970 Amortization of purchase accounting adjustments 808 760 Total interest expense 135,566 91,608 Net interest income 234,269 249,325 Provision for credit losses 3,790 14,500 Net interest income after provision for credit losses 230,479 234,825 Non-interest Income: Service charges on deposit accounts 13,905 14,175 Mortgage Income 3,354 2,866 Interchange Fee Income 17,914 18,914 (Loss) gain on securities, net (109 ) (9,716 ) Treasury Awards 280 6,197 (Loss) gain on sale of premises and equipment (183 ) — Other charges and fees 14,601 14,269 Total non-interest income 49,762 46,705 Non-interest expense: Salaries and employee benefits 102,153 93,412 Occupancy expense 22,855 21,368 FDIC/OCC premiums 4,015 3,849 Marketing 445 833 Amortization of core deposit intangibles 9,534 9,563 Other professional services 6,208 6,446 Acquisition & charter conversion charges 3,740 9,075 Other non-interest expense 33,326 40,180 Total Non-interest expense 182,276 184,726 Earnings before income taxes 97,965 96,804 Income tax expense 20,771 21,347 Net income available to common shareholders 77,194 75,457 Diluted earnings per common share $ 2.44 $ 2.39 Diluted earnings per common share, operating* $ 2.57 $ 3.06 *See reconciliation of Non-GAAP financial measures THE FIRST BANCSHARES, INC and SUBSIDIARIES Condensed Consolidated Financial Information (unaudited) (Dollars in thousands) COMPOSITION OF LOANS December 31, 2024 Percent of Total September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Percent of Total Commercial, financial and agricultural $ 709,996 13.1 % $ 716,391 $ 710,808 $ 737,511 $ 765,422 14.8 % Real estate – construction 592,304 10.9 % 625,521 639,931 633,804 629,660 12.2 % Real estate – commercial 2,554,154 47.2 % 2,472,332 2,435,853 2,356,552 2,377,864 45.8 % Real estate – residential 1,481,090 27.4 % 1,431,342 1,387,102 1,330,589 1,311,395 25.4 % Lease Financing Receivable 2,231 — % 1,915 1,749 1,794 1,292 — % Obligations of States & subdivisions 25,373 0.5 % 25,905 27,286 28,541 29,316 0.6 % Consumer 42,083 0.8 % 45,184 48,164 51,161 55,094 1.1 % Loans held for sale 3,687 0.1 % 2,987 5,892 4,241 2,914 0.1 % Total loans $ 5,410,918 100 % $ 5,321,577 $ 5,256,785 $ 5,144,193 $ 5,172,957 100.0 % COMPOSITION OF DEPOSITS December 31, 2024 Percent of Total September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Percent of Total Non-interest bearing $ 1,796,685 27.2 % $ 1,796,746 $ 1,870,305 $ 1,836,952 $ 1,849,013 28.6 % NOW and other 1,963,776 29.7 % 2,002,693 2,075,566 2,135,343 1,914,792 29.6 % Money Market/Savings 1,542,787 23.4 % 1,566,648 1,573,194 1,656,688 1,623,311 25.1 % Time Deposits of less than $250,000 1,016,207 15.4 % 921,056 825,460 816,153 813,877 12.6 % Time Deposits of $250,000 or more 285,401 4.3 % 273,569 281,591 265,219 261,879 4.1 % Total Deposits $ 6,604,856 100 % $ 6,560,712 $ 6,626,116 $ 6,710,355 $ 6,462,872 100.0 % ASSET QUALITY DATA December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Nonaccrual loans $ 20,338 $ 16,284 $ 13,553 $ 10,961 $ 10,691 Loans past due 90 days and over 1,641 1,455 1,174 687 1,163 Total nonperforming loans 21,979 17,739 14,727 11,648 11,854 Other real estate owned 7,874 7,314 6,356 6,743 8,320 Total nonperforming assets $ 29,853 $ 25,053 $ 21,083 $ 18,391 $ 20,174 Nonperforming assets to total assets 0.37 % 0.31 % 0.26 % 0.23 % 0.25 % Nonperforming assets to total loans + OREO 0.55 % 0.47 % 0.40 % 0.36 % 0.39 % ACL to nonperforming loans 255.72 % 314.00 % 374.37 % 463.25 % 455.81 % ACL to total loans 1.04 % 1.05 % 1.05 % 1.05 % 1.05 % Qtr-to-date net charge-offs (recoveries) $ 603 $ 433 $ 476 $ 73 $ 783 Annualized QTD net chg-offs (recs) to loans 0.045 % 0.033 % 0.036 % 0.006 % 0.061 % THE 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 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 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 $ 1,246,303 $ 7,765 2.49 % $ 1,269,082 $ 8,064 2.54 % $ 1,328,780 $ 8,868 2.67 % $ 1,342,644 $ 8,303 2.47 % $ 1,375,695 $ 7,892 2.29 % Tax-exempt securities 446,768 3,845 3.44 % 445,376 3,915 3.52 % 458,752 3,968 3.46 % 468,432 3,944 3.37 % 446,348 3,897 3.49 % Total investment securities 1,693,071 11,610 2.74 % 1,714,458 11,979 2.79 % 1,787,532 12,836 2.87 % 1,811,076 12,247 2.70 % 1,822,043 11,789 2.59 % Int bearing dep in other banks 85,240 528 2.48 % 92,122 441 1.92 % 99,290 858 3.46 % 189,785 1,616 3.41 % 70,193 325 1.85 % Loans 5,350,549 82,400 6.16 % 5,288,321 82,131 6.21 % 5,202,006 78,336 6.02 % 5,158,071 78,798 6.11 % 5,145,228 77,592 6.03 % Total interest earning assets 7,128,860 94,538 5.30 % 7,094,901 94,551 5.33 % 7,088,828 92,030 5.19 % 7,158,932 92,661 5.18 % 7,037,464 89,706 5.10 % Other assets 830,021 849,652 850,955 846,642 879,839 Total assets $ 7,958,881 $ 7,944,553 $ 7,939,783 $ 8,005,574 $ 7,917,303 Interest-bearing liabilities: Deposits $ 4,696,337 $ 28,994 2.47 % $ 4,740,726 $ 29,979 2.53 % $ 4,795,120 $ 29,463 2.46 % $ 4,803,277 $ 29,412 2.45 % $ 4,533,386 $ 24,748 2.18 % Borrowed Funds 237,435 2,695 4.54 % 214,192 2,607 4.87 % 157,045 1,956 4.98 % 254,505 3,023 4.75 % 361,445 4,500 4.98 % Subordinated debentures 123,682 1,774 5.74 % 123,596 1,961 6.35 % 123,510 1,814 5.87 % 123,424 1,887 6.12 % 126,925 1,807 5.69 % Total interest bearing liabilities 5,057,454 33,464 2.65 % 5,078,514 34,547 2.72 % 5,075,675 33,233 2.62 % 5,181,206 34,322 2.65 % 5,021,756 31,055 2.47 % Other liabilities 1,886,634 1,890,680 1,900,663 1,871,660 1,994,017 Shareholders' equity 1,014,793 975,359 963,445 952,708 901,530 Total liabilities and shareholders' equity $ 7,958,881 $ 7,944,553 $ 7,939,783 $ 8,005,574 $ 7,917,303 Net interest income (FTE)* $ 61,074 2.66 % $ 60,004 2.61 % $ 58,797 2.57 % $ 58,339 2.53 % $ 58,651 2.63 % Net interest margin (FTE)* 3.43 % 3.38 % 3.32 % 3.26 % 3.33 % Core net interest margin* 3.33 % 3.26 % 3.19 % 3.10 % 3.14 % *See reconciliation for Non-GAAP financial measures THE 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 Dec 31, 2024 Sept 30, 2024 June 30, 2024 Mar 31, 2024 Dec 31, 2023 Book value per common share $ 31.95 $ 32.11 $ 30.83 $ 30.45 $ 30.22 Effect of intangible assets per share 10.54 10.61 10.68 10.75 10.87 Tangible book value per common share $ 21.41 $ 21.50 $ 20.15 $ 19.70 $ 19.35 Diluted earnings per share $ 0.58 $ 0.59 $ 0.62 $ 0.65 $ 0.35 Effect of acquisition and charter conversion charges 0.02 0.08 0.01 — 0.02 Tax on acquisition and charter conversion charges (0.01 ) (0.02 ) — — (0.01 ) Effect of Treasury awards 0.01 — — — — Tax on Treasury awards — — — — — Effect on contributions/consulting/advertising related to Treasury awards (0.01 ) — — — — Tax on contributions/consulting/advertising related to Treasury awards — — — — — Loss on securities repositioning — — — — 0.31 Tax loss on securities repositioning — — — — (0.08 ) Restricted stock grant early vesting 0.06 — — — — Tax on restricted stock grant early vesting (0.01 ) — — — — Diluted earnings per share, operating $ 0.64 $ 0.65 $ 0.63 $ 0.65 $ 0.59 Year to Date 2024 2023 Diluted earnings per share $ 2.44 $ 2.39 Effect of acquisition and charter conversion charges 0.12 0.28 Tax on acquisition and charter conversion charges (0.03 ) (0.07 ) Effect of Treasury awards 0.01 (0.20 ) Tax on Treasury awards — 0.05 Effect on contributions/consulting/advertising related to Treasury awards (0.01 ) 0.17 Tax on contributions/consulting/advertising related to Treasury awards — (0.04 ) Initial provision for acquired loans — 0.34 Tax on initial provision for acquired loans — (0.09 ) Loss on securities repositioning — 0.31 Tax loss on securities repositioning — (0.08 ) Restricted stock grant early vesting 0.06 — Tax on restricted stock grant early vesting (0.01 ) — Diluted earnings per share, operating $ 2.57 $ 3.06 Year to Date 2024 2023 Net income available to common shareholders $ 77,194 $ 75,457 Acquisition and charter conversion charges 3,740 9,075 Tax on acquisition and charter conversion charges (942 ) (2,296 ) Treasury awards (280 ) (6,197 ) Tax on Treasury awards 69 1,568 Contributions/consulting/advertising related to Treasury awards 255 5,190 Tax on contributions/consulting/advertising related to Treasury awards (63 ) (1,313 ) Initial provision for acquired loans — 10,727 Tax on initial provision for acquired loans — (2,714 ) Loss on securities repositioning — 9,708 Tax loss on securities repositioning — (2,457 ) Restricted stock grant early vesting 1,882 — Tax on restricted stock grant early vesting (467 ) — Net earnings available to common shareholders, operating $ 81,388 $ 96,748 Three Months Ended Average Balance Sheet Data Dec 31, 2024 Sept 30, 2024 June 30, 2024 Mar 31, 2024 Dec 31, 2023 Total average assets A $ 7,958,881 $ 7,944,553 $ 7,939,783 $ 8,005,574 $ 7,917,303 Total average earning assets B 7,128,860 7,094,901 7,088,828 7,158,932 7,037,464 Common Equity C $ 1,014,793 $ 975,359 $ 963,445 $ 952,708 $ 901,530 Less intangible assets 333,087 335,468 337,859 340,238 342,641 Total Tangible common equity D $ 681,706 $ 639,891 $ 625,586 $ 612,470 $ 558,889 Three Months Ended Net Interest Income Fully Tax Equivalent Dec 31, 2024 Sept 30, 2024 June 30, 2024 Mar 31, 2024 Dec 31, 2023 Net interest income E $ 60,120 $ 59,014 $ 57,794 $ 57,341 $ 57,665 Tax-exempt investment income (2,891 ) (2,925 ) (2,965 ) (2,946 ) (2,911 ) Taxable investment income 3,845 3,915 3,968 3,944 3,897 Net Interest Income Fully Tax Equivalent F $ 61,074 $ 60,004 $ 58,797 $ 58,339 $ 58,651 Annualized Net Interest Margin E/B 3.37 % 3.33 % 3.26 % 3.20 % 3.28 % Annualized Net Interest Margin, Fully Tax Equivalent F/B 3.43 % 3.38 % 3.32 % 3.26 % 3.33 % Total Interest Income, Fully Tax Equivalent Total Interest Income R $ 93,584 $ 93,561 $ 91,027 $ 91,663 $ 88,720 Tax-exempt investment income (2,891 ) (2,925 ) (2,965 ) (2,946 ) (2,911 ) Taxable investment income 3,845 3,915 3,968 3,944 3,897 Total Interest Income, Fully Tax Equivalent G $ 94,538 $ 94,551 $ 92,030 $ 92,661 $ 89,706 Yield on Average Earning Assets R/B 5.25 % 5.27 % 5.14 % 5.12 % 5.04 % Yield on Average Earning Assets, Fully Tax Equivalent G/B 5.30 % 5.33 % 5.19 % 5.18 % 5.10 % Interest Income Investment Securities, Fully Tax Equivalent Interest Income Investment Securities S $ 10,656 $ 10,989 $ 11,833 $ 11,248 $ 10,803 Tax-exempt investment income (2,891 ) (2,925 ) (2,965 ) (2,946 ) (2,911 ) Taxable investment Income 3,845 3,915 3,968 3,944 3,897 Interest Income Investment Securities, Fully Tax Equivalent H $ 11,610 $ 11,979 $ 12,836 $ 12,246 $ 11,789 Average Investment Securities I $ 1,693,071 $ 1,714,458 $ 1,787,532 $ 1,811,076 $ 1,822,043 Yield on Investment Securities S/I 2.52 % 2.56 % 2.65 % 2.48 % 2.37 % Yield on Investment Securities, Fully Tax Equivalent H/I 2.74 % 2.79 % 2.87 % 2.70 % 2.59 % Three Months Ended Core Net Interest Margin Dec 31, 2024 Sept 30, 2024 June 30, 2024 Mar 31, 2024 Dec 31, 2023 Net interest income (FTE) $ 61,074 $ 60,004 $ 58,797 $ 58,339 $ 58,651 Less purchase accounting adjustments 1,609 2,008 2,067 2,627 3,235 Net interest income, net of purchase accounting adj J $ 59,465 $ 57,996 $ 56,730 $ 55,712 $ 55,416 Total average earning assets $ 7,128,860 $ 7,094,901 $ 7,088,828 $ 7,158,932 $ 7,037,464 Add average balance of loan valuation discount 18,566 20,306 22,341 24,675 27,573 Avg earning assets, excluding loan valuation discount K $ 7,147,426 $ 7,115,207 $ 7,111,169 $ 7,183,607 $ 7,065,037 Core net interest margin J/K 3.33 % 3.26 % 3.19 % 3.10 % 3.14 % Three Months Ended Efficiency Ratio Dec 31, 2024 Sept 30, 2024 June 30, 2024 Mar 31, 2024 Dec 31, 2023 Operating Expense Total non-interest expense $ 48,368 $ 46,394 $ 44,089 $ 43,425 $ 44,433 Pre-tax non-operating expenses (2,925 ) (2,592 ) (352 ) (8 ) (594 ) Adjusted Operating Expense L $ 45,443 $ 43,802 $ 43,737 $ 43,417 $ 43,839 Operating Revenue Net interest income, FTE $ 61,074 $ 60,004 $ 58,797 $ 58,339 $ 58,651 Total non-interest income 11,522 12,242 13,319 12,679 2,346 Pre-tax non-operating items (280 ) — — — 9,708 Adjusted Operating Revenue M $ 72,316 $ 72,246 $ 72,116 $ 71,018 $ 70,705 Efficiency Ratio, operating L/M 62.84 % 60.63 % 60.65 % 61.14 % 62.00 % Three Months Ended Return Ratios Dec 31, 2024 Sept 30, 2024 June 30, 2024 Mar 31, 2024 Dec 31, 2023 Net income available to common shareholders N $ 18,298 $ 18,571 $ 19,697 $ 20,628 $ 11,047 Acquisition and charter conversion charges 788 2,592 352 8 593 Tax on acquisition and charter conversion charges (195 ) (656 ) (89 ) (2 ) (150 ) Treasury awards (280 ) — — — — Tax on Treasury awards 69 — — — — Contributions/consulting/advertising related to Treasury awards 255 — — — — Tax on contributions/consulting/advertising related to Treasury awards (63 ) — — — — Loss on securities repositioning — — — — 9,708 Tax loss on securities repositioning — — — — (2,457 ) Restricted stock grant early vesting 1,882 — — — — Tax on restricted stock grant early vesting (467 ) — — — — Net earnings available to common shareholders, operating O $ 20,287 $ 20,507 $ 19,960 $ 20,634 $ 18,741 Three Months Ended Pre-Tax Pre-Provision Operating Earnings Dec 31, 2024 Sept 30, 2024 June 30, 2024 Mar 31, 2024 Dec 31, 2023 Earnings before income taxes P $ 22,134 $ 23,862 $ 25,374 $ 26,595 $ 14,328 Acquisition and charter conversion charges 788 2,592 352 8 593 Provision for credit losses 1,140 1,000 1,650 — 1,250 Treasury awards (280 ) — — — — Contributions/consulting/advertising related to Treasury awards 255 — — — — Loss on securities repositioning — — — — 9,708 Restricted stock grant early vesting 1,882 — — — — Pre-Tax, Pre-Provision Operating Earnings Q $ 25,919 $ 27,454 $ 27,376 $ 26,603 $ 25,879 Annualized return on avg assets N/A 0.92 % 0.94 % 0.99 % 1.03 % 0.56 % Annualized return on avg assets, oper O/A 1.02 % 1.03 % 1.01 % 1.03 % 0.95 % Annualized pre-tax, pre-provision, oper Q/A 1.30 % 1.38 % 1.38 % 1.33 % 1.31 % Annualized return on avg common equity, oper O/C 8.00 % 8.41 % 8.29 % 8.66 % 8.32 % Annualized return on avg tangible common equity, operating O/D 11.90 % 12.82 % 12.76 % 13.48 % 13.41 % Three Months Ended Capital Ratios Dec 31, 2024* Sept 30, 2024 June 30, 2024 Mar 31, 2024 Dec 31, 2023 Common equity tier 1 (CET1) ratio 14.5 % 12.5 % 12.4 % 12.2 % 12.1 % Leverage (Tier 1) ratio 11.6 % 10.3 % 10.0 % 9.7 % 9.7 % Total risk based capital ratio 15.4 % 15.4 % 15.3 % 15.2 % 15.0 % Tangible common equity ratio 8.8 % 8.9 % 8.3 % 8.1 % 7.9 % *estimated

The First Bancshares, Inc. Reports Results for Fourth Quarter ended December 31, 2024

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