HATTIESBURG, Miss.--(BUSINESS WIRE)-- The First Bancshares, Inc. (“FBMS” or “the Company”) (NASDAQ: FBMS), holding company for The First Bank, (www.thefirstbank.com) reported today financial results for the quarter ended September 30, 2023.
Highlights for the Quarter:
M. Ray “Hoppy” Cole, Jr., President and Chief Executive Officer, commented, “The third quarter results demonstrated another solid performance in a difficult operating environment. We were pleased to see positive loan growth of 6.3%, on an annualized basis, for the quarter. Credit metrics remained strong with low past dues and charge-offs with no material increase in non-performing assets. Deposit costs accelerated a bit, increasing 30 basis points to 1.21% but on a relative basis remain well contained with a cycle to date interest bearing beta of 31%."
Quarterly Earnings
Net income available to common shareholders totaled $24.4 million for the quarter ended September 30, 2023, an increase of $0.6 million, or 2.4%, when compared to $23.8 million for the quarter ended June 30, 2023.
Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) decreased $2.8 million, or 10.4%, to $24.0 million for quarter ended September 30, 2023 as compared to $26.8 million for the quarter ended June 30, 2023. Accretion income decreased $2.3 million as well as increased deposit costs of $4.7 million contributed to the decrease.
The Company recorded a provision for credit losses of $1.0 million for the quarter ended September 30, 2023 and $1.3 million for the quarter ended June 30, 2023.
Earnings Per Share
For the third quarter of 2023, diluted earnings per share were $0.77 compared to $0.75 for the second quarter of 2023 and $0.61 for the third quarter of 2022.
Diluted earnings per share, operating (non-GAAP) were $0.76 for the third quarter of 2023 compared to $0.85 for the second quarter of 2023 and $0.85 for the third quarter of 2022.
Effective January 1, 2023, the Company issued 6,920,422 shares of its common stock in conjunction with the closing of the acquisition of Heritage Southeast Bank ("Heritage Bank"). Effective August 1, 2022, the Company issued 3,498,936 shares of its common stock in conjunction with the closing of the acquisition of Beach Bancorp, Inc. ("Beach Bank").
Balance Sheet
Consolidated assets increased $22.2 million to $7.884 billion at September 30, 2023 from $7.862 billion at June 30, 2023. Loans increased $78.9 million, or 1.6%, for the quarterly comparison.
Total loans were $5.090 billion for the quarter ended September 30, 2023, as compared to $5.011 billion for the quarter ended June 30, 2023, and $3.719 billion for the quarter ended September 30, 2022, representing an increase of $78.9 million, or 1.6%, for the sequential quarter comparison, and an increase of $1.370 billion, or 36.8%, for the prior year quarterly comparison. During January 2023, loans totaling $1.159 billion, net of purchase accounting adjustments, were recorded from the Heritage Bank acquisition.
Total loans increased $78.9 million, or 1.6% as compared to the quarter ended June 30, 2023, or 6.3% on an annualized basis.
Excluding the acquired Heritage Bank loans, total loans increased $211.4 million, or 5.7% compared to the quarter ended September 30, 2022.
Total deposits were $6.480 billion for the quarter ended September 30, 2023, as compared to $6.492 billion for the quarter ended June 30, 2023, and $5.551 billion for the quarter ended September 30, 2022, representing a decrease of $12.2 million, or 0.2%, for the sequential quarter comparison, and an increase of $928.7 million, or 16.7%, for the prior year quarterly comparison. During January 2023, deposits totaling $1.392 billion, net of purchase accounting adjustments, were acquired in the Heritage Bank acquisition.
Deposits decreased $12.2 million, or 0.2% for the prior quarter comparison. Excluding an increase in brokered deposits of $110.0 million, deposits decreased $122.2 million, or 1.9% for the prior quarter comparison. Seasonal fluctuations and public funds account for $51.7 million of the decrease in deposits.
Book value per share decreased to $28.57 at September 30, 2023 from $28.64 at June 30, 2023.
Tangible book value per share (non-GAAP) remained unchanged at $17.62 at September 30, 2023 and at June 30, 2023. The balance in accumulated other comprehensive income (loss) increased $20.0 million to $165.2 million at September 30, 2023 from $145.2 million at June 30, 2023.
Asset Quality
Nonperforming assets totaled $22.4 million at September 30, 2023, an increase of $0.8 million compared to $21.6 million at June 30, 2023 and a decrease of $4.3 million compared to $26.7 million at September 30, 2022.
Nonaccrual loans totaled $17.4 million, an increase of $1.4 million as compared to June 30, 2023 and an increase of $1.6 million as compared to September 30, 2022.
The ratio of the allowance for credit losses (ACL) to total loans was 1.05% at September 30, 2023, 1.05% at June 30, 2023 and 1.03% at September 30, 2022. The ratio of annualized net charge-offs (recoveries) to total loans was 0.004% for the quarter ended September 30, 2023 compared to 0.07% for the quarter ended June 30, 2023 and (0.04%) for the quarter ended September 30, 2022.
Third Quarter 2023 vs Second Quarter 2023 Earnings Comparison
Net income available to common shareholders for the third quarter of 2023 increased $0.6 million to $24.4 million compared to $23.8 million for the second quarter of 2023.
Net interest income for the third quarter of 2023 was $60.7 million as compared to $66.0 million for the second quarter of 2023, a decrease of $5.3 million. The decrease was largely due to the decrease in accretion of purchase accounting adjustments of $2.3 million as well as increased interest expense of $4.8 million partially offset by an increase in interest income of $1.7 million.
Third quarter 2023 net interest margin of 3.47% included 25 basis points related to purchase accounting adjustments compared to 3.76% for the second quarter in 2023, which included 37 basis points related to purchase accounting adjustments.
Core net interest margin decreased 16 basis points to 3.27% for the third quarter of 2023 from 3.43% for the second quarter of 2023.
Investment securities totaled $1.836 billion, or 23.3% of total assets at September 30, 2023, compared to $1.898 billion, or 24.1% of total assets at June 30, 2023. The average balance of investment securities decreased $61.2 million in sequential-quarter comparison. The average tax equivalent yield on investment securities (non-GAAP) increased 3 basis points to 2.26% from 2.23% in sequential-quarter comparison. The investment portfolio had a net unrealized loss of $184.9 million at September 30, 2023 as compared to a net unrealized loss of $157.6 million at June 30, 2023.
The FTE average yield on all earning assets (non-GAAP) decreased in sequential-quarter comparison from 4.91% to 4.90%. Interest expense on average interest bearing liabilities increased 40 basis points from 1.65% for the second quarter of 2023 to 2.05% for the third quarter of 2023.
Cost of all deposits averaged 121 basis points for the third quarter of 2023 compared to 91 basis points for the second quarter of 2023. This increase was a result of rising interest rates and increased competition for deposits.
Non-interest income increased $6.9 million from $12.4 million in the second quarter of 2023 to $19.3 million in the third quarter of 2023, primarily attributable to a U.S. Treasury award of $6.2 million.
Non-interest expense for the third quarter of 2023 was $47.7 million compared to $46.9 million for the second quarter of 2023, an increase of $0.8 million, attributed to the expenses of $5.2 million related to the U.S. Treasury awards and was partially offset by a decrease in acquisition charges of $3.5 million.
Third Quarter 2023 vs. Third Quarter 2022 Earnings Comparison
Net income available to common shareholders for the third quarter of 2023 totaled $24.4 million compared to $14.0 million for the third quarter of 2022, an increase of $10.3 million or 73.5%.
Excluding one-time items detailed in the tables included with this press release, net earnings available to common shareholders, operating (non-GAAP) increased $4.4 million, or 22.4%, to $24.0 million for quarter ended September 30, 2023, as compared to $19.6 million for the quarter ended September 30, 2022. This increase is attributable to net income associated from the acquisitions of Heritage Bank and Beach Bank.
Net interest income for the third quarter of 2023 was $60.7 million, an increase of $11.6 million or 23.5% when compared to the third quarter of 2022. Fully tax equivalent (“FTE”) net interest income (non-GAAP) totaled $61.7 million and $50.1 million for the third quarter of 2023 and 2022, respectively. Purchase accounting adjustments increased $3.1 million for the third quarter comparisons. The increase was largely due to increased interest rates as well as the acquisitions of Beach Bank and Heritage Bank.
Third quarter of 2023 net interest margin was 3.47%, which included 25 basis points related to purchase accounting adjustments compared to 3.43% for the same quarter in 2022, which included 5 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin (non-GAAP) decreased 16 basis points in prior year quarterly comparison primarily due to an increase in rates on interest bearing liabilities.
Non-interest income increased $10.3 million for the third quarter of 2023 as compared to the third quarter of 2022. This increase was attributed to increases in service charges on deposit accounts and interchange fee income of $3.4 million as well as the $6.2 million award from the U.S. Treasury.
Third quarter 2023 non-interest expense was $47.7 million, an increase of $11.8 million, or 32.9% as compared to the third quarter of 2022. This increase was attributed to an increase of $6.3 million in charges related to the ongoing operations of Beach Bank and Heritage Bank, increased FDIC premiums of $0.7 million, increased amortization of core deposit intangibles of $1.2 million, and $5.2 million related to the U.S. Treasury awards.
Investment securities totaled $1.836 billion, or 23.3% of total assets at September 30, 2023, compared to $2.004 billion, or 31.0% of total assets at September 30, 2022. For the third quarter of 2023 compared to the third quarter of 2022, the average balance of investment securities decreased $208.6 million. The average tax equivalent yield on investment securities (non-GAAP) increased 4 basis points to 2.26% from 2.22% in the prior year quarterly comparison. The investment portfolio had a net unrealized loss of $184.9 million at September 30, 2023 as compared to a net unrealized loss of $216.9 million at September 30, 2022.
The average yield on all earning assets increased 114 basis points in prior year quarterly comparison, from 3.76% for the third quarter of 2022 to 4.90% for the third quarter of 2023. Interest expense on average interest bearing liabilities increased 157 basis points from 0.48% for the third quarter of 2022 to 2.05% for the third quarter of 2023.
Cost of all deposits averaged 121 basis points for the third quarter of 2023 compared to 19 basis points for the third quarter of 2022.
Year-to-Date Earnings Comparison
In the year-over-year comparison, net income available to common shareholders increased $17.8 million, or 38.1%, from $46.6 million for the nine months ended September 30, 2022, to $64.4 million for the same period ended September 30, 2023.
Net interest income was $191.7 million for the nine months ended September 30, 2023, an increase of $61.8 million as compared to the same period ended September 30, 2022, primarily due to interest income earned on a higher volume of loans (including loans acquired from Heritage Bank and Beach Bank).
Non-interest income was $44.4 million for the nine months ended September 30, 2023, an increase of $15.5 million as compared to the same period ended September 30, 2022. Service charges on deposit accounts accounted for $4.4 million of the increase as well as $4.7 million in interchange fee income and $5.3 million increase in awards from the U.S. Treasury.
Non-interest expense was $140.3 million for the nine months ended September 30, 2023, an increase of $44.8 million as compared to the same period ended September 30, 2022. The increase was partially attributable to $3.3 million in acquisition and charter conversion charges and $27.2 million in increased operating expenses related to the acquisitions of Beach Bank and Heritage Bank as well as $5.2 million in expenses associated with the U.S. Treasury awards and increases in FDIC premiums of $1.0 million and a $3.8 million increase in core deposit amortization for the nine months ended September 30, 2023.
Declaration of Cash Dividend
The Company announced that its Board of Directors declared a cash dividend of $0.24 per share, a 4% increase over previous quarter, per share to be paid on its common stock on November 24, 2023 to shareholders of record as of the close of business on November 8, 2023.
Conference Call
The Company will host a conference call for analysts and investors to discuss the Company’s financial results at 9:00 a.m. Central Time on Thursday, October 26, 2023. Investors and analysts may participate by clicking on the Participant Conference Link: https://register.vevent.com/register/BI68bf3aa848aa45e49109eb1ad52aff4f. An audio archive of the conference call along with the transcript will be available within 24-48 hours after the call and placed in the Investor Relations section of our website.
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. 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 rising 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, 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; (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 9/30/23
Quarter Ended 6/30/23
Quarter Ended 3/31/23
Quarter Ended 12/31/22
Quarter Ended 9/30/22
Total Interest Income
$
85,681
86,194
80,338
57,923
53,874
Total Interest Expense
24,977
20,164
15,412
10,002
4,726
Net Interest Income
60,704
66,030
64,926
47,921
49,148
Net Interest Income excluding PPP Fee Income
60,703
66,029
64,718
47,899
48,986
FTE net interest income*
61,696
67,028
65,924
48,916
50,122
Provision for credit losses
1,000
1,250
11,000
705
4,300
Non-interest income
19,324
12,423
12,612
8,131
9,022
Non-interest expense
47,724
46,899
45,670
35,040
35,903
Earnings before income taxes
31,304
30,304
20,868
20,307
17,967
Income tax expense
6,944
6,525
4,597
4,012
3,924
Net income available to common shareholders
24,360
23,779
16,271
16,295
14,043
PER COMMON SHARE DATA
Basic earnings per share
0.78
0.76
0.52
0.68
0.61
Diluted earnings per share
0.77
0.75
0.67
Diluted earnings per share, operating*
0.85
0.86
0.71
Quarterly dividends per share
0.23
0.22
0.21
0.20
0.19
Book value per common share at end of period
28.57
28.64
28.58
26.92
25.86
Tangible book value per common share at period end*
17.62
17.49
17.97
16.93
Market price at end of period
26.97
25.84
25.83
32.01
29.87
Shares outstanding at period end
31,404,231
31,406,220
31,364,973
24,025,762
24,028,120
Weighted average shares outstanding:
Basic
31,405,439
31,378,364
31,309,458
24,027,189
22,861,795
Diluted
31,609,564
31,591,665
31,541,213
24,168,544
22,979,529
AVERAGE BALANCE SHEET DATA
Total assets
7,873,345
7,882,130
8,003,254
6,446,521
6,372,872
Loans and leases
5,038,928
4,982,368
4,975,663
3,749,561
3,492,110
Total deposits
6,466,141
6,501,372
6,816,473
5,515,713
5,503,040
Total common equity
905,070
901,499
868,995
617,049
630,744
Total tangible common equity*
560,071
554,792
538,903
408,365
424,873
SELECTED RATIOS
Annualized return on avg assets (ROA)
1.24
%
1.21
0.81
1.01
0.88
Annualized return on avg assets, operating*
1.22
1.36
1.07
1.23
Annualized pre-tax, pre-provision, operating*
1.62
1.81
1.78
1.38
1.63
Annualized return on avg common equity, operating*
10.63
11.91
12.48
11.14
12.46
Annualized return on avg tangible common equity, operating*
17.17
19.35
20.13
16.83
18.49
Average loans to average deposits
77.93
76.64
72.99
67.98
63.46
FTE Net Interest Margin*
3.52
3.82
3.69
3.37
3.50
Efficiency Ratio
58.90
59.02
58.15
61.42
60.70
Efficiency Ratio, operating*
56.06
53.87
53.32
59.34
54.55
*See reconciliation of Non-GAAP financial measures
CREDIT QUALITY
Allowance for credit losses (ACL) as a % of total loans
1.05
1.06
1.03
Nonperforming assets to tangible equity + ACL
3.57
3.73
3.76
6.01
Nonperforming assets to total loans + OREO
0.44
0.43
0.45
0.47
0.72
Annualized QTD net charge-offs (recoveries) to total loans
0.004
0.07
0.01
(0.04
)%
(in thousands)
BALANCE SHEET
September 30, 2023
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
Assets
Cash and cash equivalents
197,632
194,050
333,491
145,315
163,841
Securities available for sale
1,141,971
1,199,103
1,249,791
1,257,101
1,379,410
Securities held to maturity
658,524
663,473
678,161
691,484
593,553
Other investments
35,872
35,725
34,423
33,944
31,060
Total investment securities
1,836,367
1,898,301
1,962,375
1,982,529
2,004,023
Loans held for sale
5,960
6,602
4,073
4,443
2,225
Total loans
5,089,800
5,010,925
4,969,776
3,774,157
3,719,388
Allowance for credit losses
(53,565
)
(52,614
(52,450
(38,917
(38,356
Loans, net
5,036,235
4,958,311
4,917,326
3,735,240
3,681,032
Premises and equipment
183,740
186,381
186,688
153,068
150,480
Other Real Estate Owned
4,920
5,588
5,066
4,832
10,328
Goodwill and other intangibles
343,869
346,104
347,777
214,890
214,708
Other assets
275,562
266,771
260,520
221,400
228,211
7,884,285
7,862,108
8,017,316
6,461,717
6,454,848
Liabilities and Shareholders’ Equity
Non-interest bearing deposits
1,967,661
2,086,666
2,082,441
1,630,203
1,770,848
Interest-bearing deposits
4,512,364
4,405,601
4,585,515
3,864,201
3,780,450
6,480,025
6,492,267
6,667,956
5,494,404
5,551,298
Borrowings
302,000
280,000
250,000
130,100
90,000
Subordinated debentures
128,300
128,214
154,127
145,027
144,952
Other liabilities
76,739
62,181
48,806
45,523
47,127
Total liabilities
6,987,064
6,962,662
7,120,889
5,815,054
5,833,377
Total shareholders’ equity
897,221
899,446
896,427
646,663
621,471
Total liabilities and shareholders’ equity
(in thousands except per share data)
EARNINGS STATEMENT
Three Months Ended
9/30/2023
6/30/2023
3/31/2023
12/31/2022
9/30/2022
Interest Income:
Loans, including fees
70,349
68,057
64,264
45,583
41,456
Investment securities
10,614
10,815
11,707
11,251
11,598
Accretion of purchase accounting adjustments
4,277
6,533
3,469
1,086
818
Other interest income
441
789
898
3
2
Total interest income
Interest Expense:
Deposits
19,314
14,613
12,183
7,206
2,863
3,556
3,264
959
1,015
92
1,849
2,138
2,176
1,946
1,886
258
149
94
(165
(115
Total interest expense
Net interest income
Net interest income after provision for credit losses
59,704
64,780
53,926
47,216
44,848
Non-interest Income:
Service charges on deposit accounts
3,646
3,425
3,657
2,277
2,219
Mortgage Income
878
773
633
625
1,221
Interchange Fee Income
5,280
4,543
4,498
3,093
3,310
Gain (Loss) on securities, net
(48
—
1
Treasury Awards
6,197
Loss on sale of premises and equipment
(104
Other charges and fees
3,730
3,824
2,136
2,271
Total non-interest income
Non-interest expense:
Salaries and employee benefits
22,807
23,315
23,572
19,934
19,099
Occupancy expense
5,343
5,041
5,296
4,305
3,826
FDIC/OCC premiums
1,158
758
670
514
496
Marketing
559
45
158
135
50
Amortization of core deposit intangibles
2,385
2,391
2,402
1,309
1,227
Other professional services
1,499
1,570
1,068
971
1,256
Acquisition and charter conversion charges
588
4,101
3,793
1,190
3,640
Other non-interest expense
13,385
9,678
8,711
6,682
6,309
Total non-interest expense
Diluted earnings per common share
Diluted earnings per common share, operating*
Year to Date
2023
2022
202,460
107,172
PPP loan fee income
210
1,696
33,136
31,324
14,279
2,223
2,128
47
252,213
142,462
46,110
7,089
7,779
6,163
5,546
Amortization of purchase accounting adjustments
501
(152
60,553
12,575
191,660
129,887
13,250
4,900
178,410
124,987
10,728
6,297
2,284
3,678
14,321
9,609
Gain (loss) on securities, net
(46
(82
873
Bargain Purchase Gain and gain on sale of premises and equipment
165
BOLI income from death proceeds
1,630
10,316
6,673
44,359
28,843
69,695
53,135
15,680
11,530
2,586
1,608
762
7,178
3,355
4,137
2,587
Acquisition & charter conversion charges
8,482
5,220
31,773
17,755
Total Non-interest expense
140,293
95,448
82,476
58,382
18,066
11,758
64,410
46,624
2.04
2.17
2.47
2.38
(Dollars in thousands)
COMPOSITION OF LOANS
Percent of Total
Commercial, financial and agricultural
753,120
14.8
753,415
750,371
506,907
489,225
13.1
Real estate – construction
633,682
12.4
634,120
691,285
475,956
481,100
12.9
Real estate – commercial
2,317,666
45.5
2,251,710
2,181,384
1,626,066
1,595,944
42.8
Real estate – residential
1,298,980
25.5
1,286,343
1,262,244
1,094,204
1,082,488
29.1
Lease Financing Receivable
1,548
1,187
2,056
2,118
1,907
0.1
Obligations of States & subdivisions
29,650
0.6
31,137
31,652
26,143
25,757
0.7
Consumer
55,154
1.1
53,013
50,784
42,763
42,967
1.2
5,095,760
100
5,017,527
4,973,849
3,778,600
3,721,613
100.0
COMPOSITION OF DEPOSITS
Non-interest bearing
30.4
31.9
NOW and other
1,962,383
30.3
2,014,420
2,095,599
1,769,699
1,786,213
32.2
Money Market/Savings
1,532,822
23.7
1,565,212
1,678,609
1,368,108
1,423,953
25.7
Time Deposits of less than $250,000
766,553
11.8
627,782
562,240
590,564
418,931
7.5
Time Deposits of $250,000 or more
250,606
3.8
198,187
249,067
135,830
151,353
2.7
Total Deposits
ASSET QUALITY DATA
Nonaccrual loans
17,423
16,037
17,312
12,591
15,844
Loans past due 90 days and over
53
73
289
571
Total nonperforming loans
17,476
17,385
12,880
16,415
Other real estate owned
Total nonperforming assets
22,396
21,625
22,451
17,712
26,743
Nonperforming assets to total assets
0.28
0.27
0.41
ACL to nonperforming loans
306.51
328.08
301.70
302.15
233.66
ACL to total loans
Qtr-to-date net charge-offs (recoveries)
49
837
142
39
(353
Annualized QTD net chg-offs (recs) to loans
%)
Yield
Analysis
Tax
Avg
Equivalent
Yield/
Balance
interest
Rate
Taxable securities
1,419,343
7,685
1,473,166
7,867
2.14
1,565,623
8,758
2.24
1,522,953
8,312
2.18
1,612,066
8,723
2.16
Tax-exempt securities
463,329
3,921
3.39
470,742
3,946
3.35
462,718
3.41
453,651
3,934
3.47
479,168
3,849
3.21
1,882,672
11,606
1,943,908
11,813
2.43
2,028,341
12,704
2.51
1,976,604
12,246
2.48
2,091,234
12,572
2.40
Int bearing dep in other banks
79,448
2.22
93,464
3.38
146,663
2.45
72,910
0.02
143,867
Loans
74,626
5.92
74,590
5.99
67,734
5.45
46,670
4.98
42,274
4.84
Total interest earning assets
7,001,048
86,673
4.95
7,019,740
87,192
4.97
7,150,667
81,336
4.55
5,799,075
58,919
4.06
5,727,211
54,848
3.83
872,297
862,390
852,587
647,446
645,661
Interest-bearing liabilities:
4,459,869
19,572
1.76
4,465,800
14,762
1.32
4,738,076
12,277
1.04
3,801,632
7,041
0.74
3,777,059
2,748
0.29
Borrowed Funds
296,963
4.79
277,531
4.70
77,098
108,881
13,261
2.78
128,251
5.77
145,418
5.88
155,084
5.61
144,985
5.37
144,910
5.21
Total interest bearing
liabilities
4,885,083
2.05
4,888,749
1.65
4,970,258
4,055,498
0.99
3,935,230
0.48
2,083,192
2,091,882
2,164,001
1,773,974
1,806,898
Shareholders' equity
Total liabilities and
shareholders' equity
Net interest
income (FTE)*
2.91
3.32
3.31
48,917
3.08
Net interest margin (FTE)*
Core net interest margin*
3.27
3.43
3.29
3.44
*See reconciliation for Non-GAAP financial measures
Reconciliation of Non-GAAP Financial Measures (unaudited)
Per Common Share Data
Sept 30, 2023
Mar 31, 2023
Dec 31, 2022
Sept 30, 2022
Book value per common share
Effect of intangible assets per share
10.95
11.02
11.09
8.95
8.93
Tangible book value per common share
Effect of acquisition and charter conversion charges
0.13
0.11
0.05
0.16
Tax on acquisition and charter conversion charges
(0.01
(0.03
(0.02
(0.05
Effect of Treasury awards
(0.20
Tax on Treasury awards
Effect on contributions/consulting/advertising related to Treasury awards
0.17
Tax on contributions/consulting/advertising related to Treasury awards
Initial provision for acquired loans
0.34
Tax on initial provision for acquired loans
(0.09
Diluted earnings per share, operating
0.24
(0.07
(0.06
Effect of bargain purchase gain and loss on sale of fixed assets
(0.08
0.18
(2,146
(1,320
Bargain purchase gain and loss on sale of fixed assets
Tax on bargain purchase gain and loss on sale of fixed assets
42
Treasury awards
(6,197
(872
1,568
221
(1,630
Contributions/consulting/advertising related to Treasury awards
5,190
(1,313
(42
10,727
3,855
(2,714
(976
Net earnings available to common shareholders, operating
78,007
51,122
Average Balance Sheet Data
Total average assets
A
Total average earning assets
B
Common Equity
C
Less intangible assets
344,999
346,707
330,092
208,684
205,871
Total Tangible common equity
D
Net Interest Income Fully Tax Equivalent
E
Tax-exempt investment income
(2,929
(2,948
(2,939
(2,875
Taxable investment income
F
Annualized Net Interest Margin
E/B
3.63
Annualized Net Interest Margin, Fully Tax Equivalent
F/B
Total Interest Income, Fully Tax Equivalent
R
G
58,918
Yield on Average Earning Assets
R/B
4.90
4.91
4.49
4.00
Yield on Average Earning Assets, Fully Tax Equivalent
G/B
Interest Income Investment Securities, Fully Tax Equivalent
Interest Income Investment Securities
S
11,706
Taxable investment Income
H
Average Investment Securities
I
Yield on Investment Securities
S/I
2.26
2.23
2.31
2.28
Yield on Investment Securities, Fully Tax Equivalent
H/I
Core Net Interest Margin
Net interest income (FTE)
Less purchase accounting adjustments
4,276
Net interest income, net of purchase accounting adj
J
57,420
60,495
62,455
47,830
49,304
Add average balance of loan valuation discount
31,269
38,306
42,945
10,928
2,681
Avg earning assets, excluding loan valuation discount
K
7,032,317
7,058,046
7,193,612
5,810,003
5,729,892
Core net interest margin
J/K
Operating Expense
Pre-tax non-operating expenses
(5,777
(4,101
(3,793
(1,190
(3,641
Adjusted Operating Expense
L
41,947
42,798
41,877
33,850
32,262
Operating Revenue
Net interest income, FTE
Pre-tax non-operating items
Adjusted Operating Revenue
M
74,823
79,451
78,536
57,047
59,144
Efficiency Ratio, operating
L/M
Return Ratios
N
3,641
(149
(1,037
(960
(301
(920
O
24,047
26,843
27,117
17,184
19,643
Pre-Tax Pre-Provision Operating Earnings
P
Pre-Tax, Pre-Provision Operating Earnings
Q
31,885
35,655
35,661
22,202
25,908
Annualized return on avg assets
N/A
Annualized return on avg assets, oper
O/A
Annualized pre-tax, pre-provision, oper
Q/A
Annualized return on avg common equity, oper
O/C
Annualized return on avg tangible common equity, operating
O/D
Capital Ratios
Sept 30, 2023*
Common equity tier 1 (CET1) ratio
12.0
11.5
11.2
12.7
12.6
Leverage (Tier 1) ratio
9.6
9.1
8.8
9.3
Total risk based capital ratio
15.1
14.5
14.7
16.7
Tangible common equity ratio
7.3
7.4
7.2
6.9
6.5
*estimated
M. Ray “Hoppy” Cole Chief Executive Officer Dee Dee Lowery Chief Financial Officer (601) 268-8998