First Bancshares, Inc. · OTC:FIBH
First Bancshares — Merger or Acquisition (July 2022)
23 slides from First Bancshares's merger presentation, Jul 27, 2022
Slide 1: Acquisition of Heritage Southeast Bancorporation, Inc.: An Exceptional Partnership
Acquisition of The First Bancshares, Inc. Heritage Southeast Bancorporation, Inc. July 27, 2022 An Exceptional Partnership
Slide 2: Safe Harbor and About The First Bancshares
2 S AFE H ARBOR ABOUT THE FIRST BANCSHARES, INC . The First Bancshares, Inc . (“FBMS” or the “Company”), headquartered in Hattiesburg, Mississippi, is the parent company of The First, A National Banking Association . Founded in 1996 , The First has operations in Mississippi, Louisiana, Alabama, Flor
Slide 3: Cautionary Statements Regarding Forward-Looking Information
3 C AUTIONARY S TATEMENTS R EGARDING F ORWARD - L OOKING I NFORMATION This communication contains “forward - looking statements” as defined in the Private Securities Litigation Reform Act of 1995 . In general, forward - looking statements usually use words such as “may,” “believe,” “expect,” “antici
Slide 4: Transaction Rationale
S TRATEGIC R ATIONALE F INANCIAL R ATIONALE R ISK M ITIGATION 4 (1) Once cost savings are fully - phased in and realized (2) Tangible book value earnback period calculated using the crossover method T RANSACTION R ATIONALE ▪ Natural expansion of our current footprint in Georgia and Florida ‒ Entranc
Slide 5: A Beneficial Transaction for All Stakeholders
5 A B ENEFICIAL T RANSACTION FOR A LL S TAKEHOLDERS E MPLOYEES C OMMUNITIES C USTOMERS S HAREHOLDERS One of the largest CDFIs in the nation (1) dedicated to servicing under banked and low - to - moderate income clients Proven and experienced leadership Over 1,700 employee volunteer service hours acr
Slide 6: Transaction Terms
6 Source: S&P Global Market Intelligence (1) Based upon FBMS closing price of $29.68 as of 7/26/22 (2) Based upon 7,220,959 outstanding shares of HSBI common stock, inclusive of 6,000 unvested RSUs and 194,110 SERP shares to be issued as of 6/30/22; Existing HSBI options to be cashed out at close at
Slide 7: Pro Forma Leadership Team
Eric Waldron President – Mississippi o FBMS Experience: 17 years o Banking Experience: 28 years o Previously served as Market President – Wayne County, MS for Cadence Bank Leonard Moreland President – Georgia o HSBI Experience: 26 years o Banking Experience: 39 years o Currently serves as CEO of Her
Slide 8: Overview of Heritage Southeast Bancorporation, Inc.
$4.4M MRQ Net Income 0.78% MRQ ROAA 11.7% MRQ ROATCE 1.04% MRQ ROAA 3.34% MRQ NIM $3.3M MRQ Net Income R EPORTED C ORE (2) 3.31% MRQ NIM (3) 15.6% MRQ ROATCE 0.25% 0.29% 0.50% 0.50% 0.50% 0.55% 1.00% 1.04% 1.25% 1.30% 1.53% 1.80% 2.01% 2.28% 2.50% 2.50% 0.29% 0.27% 0.27% 0.26% 0.23% 0.22% 0.24% 0.26
Slide 9: HSBI's Strong Market Demographics
5.4% 4.2% 4.8% 3.6% 3.3% 11.8% 10.0% 13.9% 10.2% 10.2% Atlanta, GA Southeast GA Jacksonville, FL Southeast U.S. '22 - '27E Proj. Pop. Growth '22 - '27E Proj. Med. HHI Growth 9 HSBI’ S S TRONG M ARKET D EMOGRAPHICS HSBI’ S M ARKET D EMOGRAPHICS P RO F ORMA L ARGE M ARKETS S ERVED Source: S&P Global M
Slide 10: Market Profile: Atlanta
Deposits Market Rank Institution Branches ($M) Share 1 MetroCity Bankshares Inc. 8 1,631 0.71% 2 United Bank Corp. 14 1,567 0.68 3 Piedmont Bancorp Inc. 9 1,084 0.47 4 Georgia Banking Co. 5 1,018 0.44 5 Heritage Southeast Bancorporation Inc. 9 732 0.32 6 First IC Corp. 6 661 0.29 7 Affinity Bancshar
Slide 11: Market Profile: Southeast GA and Jacksonville, FL
Deposits Market Rank Institution Branches ($M) Share 1 Jones Bancshares LP 8 858 0.75% 2 Heritage Southeast Bancorporation Inc. 14 709 0.62 3 FCB Financial Corp. 7 484 0.42 4 Southeastern Banking Corp. 9 473 0.41 5 WB&T Bankshares Inc. 3 365 0.32 6 Florida Capital Group Inc. 2 245 0.21 7 Morris Stat
Slide 12: Pro Forma Deposit Market Share
Comm. Bank Deposits Market Rank Rank (3) Institution Branches ($B) Share 1 -- Bank of America Corp. 113 $27.1 11.0% 2 -- Wells Fargo & Co. 155 26.1 10.6 3 -- Truist Financial Corp. 152 21.5 8.7 4 -- Regions Financial Corp. 178 20.2 8.2 5 -- Hancock Whitney Corp. 107 18.0 7.3 6 -- JPMorgan Chase & Co
Slide 13: Summary of Our Due Diligence
13 S UMMARY OF O UR D UE D ILIGENCE Only one member of senior leadership has left HSBI to pursue other interests outside the normal course of retirement (1) Minimal lender attrition – net lender growth since 12/31/20 No material customer roll - off (1) Strong deposit transaction account growth both
Slide 14: Key Transaction Metrics and Assumptions
$7.2M $1.6M $8.7M $17.5M H1 '22 Reported Net Income Adjustments for Non-Rec. Items Adj. H1 '22 Net Income Ann. Adj. H1 '22 Net Income 9% Leverage Ratio 14 K EY T RANSACTION M ETRICS AND A SSUMPTIONS ‒ 2023 Net Income: o FBMS: $80 million, inclusive of pending Beach Bancorp, Inc. transaction (1) ‒ Pu
Slide 15: 2022 M&A: Strategic Growth and Geographic Expansion
T ODAY P RO F ORMA WITH BEACH B ANK & HSBI (7/26/2022) $29.68 $8.4B 65.0% > 1.3% (3) $4.00+ (3) 15 2022 M&A: S TRATEGIC G ROWTH AND G EOGRAPHIC E XPANSION S UMMARY OF R ECENT M&A E NHANCING OUR G ROWTH P ROFILE A CCELERATING S CALE AND P ROFITABILITY ‒ 7/27/2022: Announced proposed acquisition of He
Slide 16: Pro Forma Highlights
1 6 P RO F ORMA H IGHLIGHTS FBMS Branch ( 117 ) FBMS LPO (3) Source: S&P Global Market Intelligence Deposit data as of 6/30/22, pro forma for Beach Bank acquisition (1) Data as of 6/30/22; includes purchase accounting adjustments (2) Shown with cost savings on a fully - phased in basis H IGHLIGHTS (
Slide 17: Appendix
APPENDIX TheFirst BANCSHARES, INC. odo HSBI
Slide 18: FBMS' Community Involvement
18 FBMS’ C OMMUNITY I NVOLVEMENT ‒ Community Development Financial Institutions (“CDFI”) are private sector financial institutions that focus primarily on personal lending and business development efforts in poorer local communities requiring revitalization in the U.S. ‒ Community Development Financ
Slide 19: Tangible Book Value Reconciliation
$18.32 $18.59 $19.62 $18.58 $18.25 $18.09 $1.03 $1.04 $0.33 $0.16 FBMS Q2 '22 Standalone FBMS Q2 '22 + Beach Bancorp, Inc. Estimated Growth Through Close FBMS Est. at Close Net Merger Considerations & FMV Impacts (A/T) Pro Forma TBVPS, Subtotal Full One-Time Merger Expenses (A/T) Pro Forma TBVPS, Su
Slide 20: HSBI's Cash Value Life Insurance Lending Business
20 HSBI’ S C ASH V ALUE L IFE I NSURANCE (CVLI) L ENDING B USINESS O VERVIEW G EOGRAPHIC B REAKDOWN – T OP 5 S TATES (2) Source: Company documents (1) As of 6/30/22 (2) By commitment ‒ Specialty Line of Lending Business developed by HSBI in 2017 to diversify the loan portfolio and augment revenue ‒
Slide 21: Pro Forma Loan and Deposit Composition
Money Market & Savings 31.3% Demand Deposits 35.5% NOW Accounts 18.9% Time Deposits 14.3% Money Market & Savings 25.3% Demand Deposits 31.1% NOW Accounts 32.6% Time Deposits 11.0% C&I 20.0% Non Owner - Occupied CRE 22.8% Owner - Occupied CRE 24.7% Multifamily 0.4% 1 - 4 Family 14.4% C&D 16.4% Consum
Slide 22: Pro Forma Loan and Deposit Concentration by State
Florida 5.9% Georgia 94.1% Mississippi 28.5% Florida 29.8% Alabama 10.6% Louisiana 16.9% Georgia 14.1% Florida 3.6% Georgia 96.4% Mississippi 32.2% Florida 28.3% Alabama 16.1% Louisiana 13.3% Georgia 10.1% 22 P RO F ORMA L OAN AND D EPOSIT C ONCENTRATION BY S TATE L OANS (1) D EPOSITS Source: S&P Gl
Slide 23: j The First Bancshares, Inc. 6480 Hwy West Hattiesburg, MS 39402 www.TheFirstBank.com
j The First Bancshares, Inc. 6480 Hwy 98 West Hattiesburg, MS 39402 www.TheFirstBank.com