The First Bancshares (FBMS) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $19.7 million, down 4.5% sequentially and 17.2% year-over-year, mainly due to higher provision for credit losses and lower net interest income; diluted EPS was $0.62, and operating EPS was $0.63.

• Pre-tax, pre-provision operating earnings rose 2.9% quarter-over-quarter to $27.4 million, reflecting strong loan growth and improved net interest margin.

• Total assets reached $8.0 billion, with $6.6 billion in deposits and $110 million in brokered deposits as of June 30, 2024.

• Maintained strong asset quality, with NPAs/total assets at 0.26% and NCOs/total loans at 0.04% for the quarter.

• Announced a definitive merger agreement with Renasant Corporation, expected to close in H1 2025.

Financial highlights

• Loans grew by $111 million (8.6% annualized) to $5.25 billion; originations reached $450 million, up from $253 million in Q1.

• Net interest margin (NIM) was 3.26% for Q2 2024, up 6 bps sequentially but down from 3.76% in Q2 2023; core NIM was 3.19%, up 9 bps sequentially.

• Deposits decreased by $84.2 million (1.3%), mainly due to public fund outflows; total deposits were $6.63 billion.

• Allowance for credit losses was $55.1 million (1.05% of loans) at June 30, 2024.

• Book value per share increased to $31.14; tangible book value per share was $20.15.

Outlook and guidance

• Loan growth is expected to continue at a mid-single digit annualized pace for the remainder of 2024.

• Net interest margin projected to remain stable, with minor fluctuations due to public fund runoff and brokered CD activity.

• The merger with Renasant is expected to close in the first half of 2025, subject to regulatory and shareholder approvals.

• Management believes capital and liquidity levels are strong and expects to remain well-capitalized.

• Operating expenses guided to $176–$177 million for the year, with a 3–4% increase expected in 2025.