8-K: The First Bancshares, Inc. Provides Update at Annual Shareholder Meeting

The First Bancshares, Inc. held its annual shareholder meeting, presenting an overview of the company's performance and strategic direction.

Summary

• The First Bancshares, Inc. (FBMS) held its annual shareholder meeting on May 23, 2024, where management presented a review of the company's performance.
• The presentation included both GAAP and non-GAAP financial measures, with reconciliations provided in the appendix.
• FBMS highlighted its growth, noting total assets of $8.0 billion and its position as the 5th largest bank headquartered in Mississippi.
• The company's loan-to-deposit ratio is 77%, with a CET1 ratio of 12.2% and a total capital ratio of 15.2%.
• The presentation also covered the company's historical performance, including thirteen years of record earnings and trends in profitability, asset quality, and capital position.
• Key metrics included a 1.33% operating pre-tax pre-provision return on average assets (PTPP ROAA) and a 0.01% annualized net charge-offs to total loans.
• The company's cost of deposits was 1.78%, with a 43% interest-bearing deposit beta through the rate hike cycle.
• FBMS has expanded its geographic footprint, with operations in Mississippi, Louisiana, Alabama, Florida, and Georgia.
• The company's liquidity position was highlighted, with a liquidity ratio of 13.8% as of March 31, 2024, exceeding the internal policy guideline of 10%.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial metrics and growth, although it includes standard risk disclosures. The company is performing well compared to its peers.

Positives

• FBMS has a strong capital position with a 15.2% total capital ratio and a 12.2% CET1 ratio.
• The company's asset quality is solid, with low net charge-offs of 0.01% annualized.
• The liquidity ratio of 13.8% is above the internal policy guideline of 10%, indicating a strong liquidity position.
• The company has demonstrated consistent profitability with thirteen years of record earnings.
• FBMS has a diversified geographic footprint across multiple states in the Southeast.

Negatives

• The document does not explicitly state any negative aspects of the company's performance.
• The document does not contain any explicit negative statements.

Risks

• The document includes a standard forward-looking statement disclaimer, acknowledging various risks and uncertainties that could affect future performance.
• These risks include competitive pressures, economic and political conditions, interest rate risk, and changes in laws and regulations.
• The company also faces risks related to acquisitions, credit risk, and potential impacts from adverse developments in the banking industry.
• Other risks include higher inflation, capital market disruptions, and the effects of war or other conflicts.

Future Outlook

The document contains forward-looking statements and cautions that actual results may differ materially from those projected due to various risks and uncertainties. The company does not undertake any obligation to update or revise any forward-looking statements.

Management Comments

• M. Ray Hoppy Cole, Jr., President, CEO and Chairman of the Board, made a presentation at the Annual Meeting of Shareholders.

Industry Context

The presentation provides an overview of FBMS's performance within the banking industry, highlighting its position as the 5th largest bank headquartered in Mississippi. It also includes comparisons to peer banks, indicating a focus on competitive positioning and performance relative to industry standards.

Comparison to Industry Standards

• FBMS is compared to Southeast and U.S. public banks, showing a 5-year asset CAGR of 17.7% compared to 9.7% for both peer groups.
• The company's projected ROAA for 2024 is 1.03% compared to 0.87% for Southeast peers and 0.89% for U.S. peers.
• The projected ROAA for 2025 is 1.35% compared to 0.95% for Southeast peers and 1.01% for U.S. peers.
• FBMS's ROATCE is 13.5% compared to 10.3% for Southeast peers.
• The company's 15-year price performance is 187% compared to 97% for U.S. banks and 120% for Southeast U.S. banks.
• The 10-year total return is 106% compared to 68% for U.S. banks and 62% for Southeast U.S. banks.

Stakeholder Impact

• Shareholders are provided with an overview of the company's performance and strategic direction.
• Employees are likely impacted by the company's growth and financial stability.
• Customers benefit from the company's strong financial position and ability to provide services.
• Suppliers and creditors are likely impacted by the company's financial health and ability to meet obligations.

Key Dates

Keywords

financial performance, banking, capital ratios, asset quality, liquidity, profitability, deposits, loans, net interest margin, return on assets, shareholders