First Bancshares, Inc. · OTC:FIBH
First Bancshares — Investor Presentation (September 2020)
43 slides from First Bancshares's investor presentation, Sep 21, 2020
Slide 1: The First Bancshares, Inc. September 2020
TheFirst BANCSHARES, INC. September 2020 NASDAQ: FBMS
Slide 2: Forward-looking statements
This IP 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 E
Slide 3: The First Bancshares: Building Shareholder Value
3 THE FIRST BANCSHARES: BUILDING SHAREHOLDER VALUE
Slide 4: Our Company: Company Overview
53.9% Q2 ‘ 20 Efficiency Ratio, Operating (1) 16.5% Total Capital Ratio as of June 30, 2020 5 th Largest Bank Headquartered in MS $5.1bn Assets as of June 30, 2020 12 # of Closed Transactions since 2010 (2) 4 Our Company Company Overview 84 Locations in Gulf South: MS, LA, AL, FL & GA 1996 Bank Esta
Slide 5: Continuity of Leadership through Multiple Business Cycles
Continuity of Leadership through Multiple Business C ycles 5 Jerome Brown Executive VP Community Development 18 years experience Carol Daniel Executive VP Credit Administrator 36 years experience Hayden Mitchell Executive VP Loan Ops & Mortgage 43 years experience Ion Mixon Executive VP Risk Manager
Slide 6: Evolution of Our Franchise
$503 $500 $540 $571 $647 $698 $830 $986 $1,080 $1,213 $1,334 $1,821 $181 $181 $370 $447 $447 $447 $827 $1,924 $2,729 $2,729 $3,264 $681 $721 $941 $1,094 $1,145 $1,277 $1,813 $3,004 $3,942 $4,062 $5,085 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1 '20 Q2 '20 Acquired Organic Mobile New Orlean
Slide 7: Improving Geographic Diversification of our Balance Sheet
Mississippi 30% Alabama 18% Louisiana 15% Florida 23% Georgia 14% Mississippi 30% Alabama 14% Louisiana 18% Florida 21% Georgia 17% Mississippi 73% Alabama 23% Louisiana 4% Mississippi 100% Mississippi 70% Alabama 23% Louisiana 7% Mississippi 100% Improving Geographic Diversification of our Balance
Slide 8: Our Market Demographics
$56,822 $52,346 $58,586 $62,156 $49,028 $46,995 $58,808 $72,525 $45,000 $52,500 $60,000 $67,500 $75,000 FBMS Alabama Florida Georgia Louisiana Mississippi Southeast US 8.0% 11.3% 11.6% 11.2% 4.6% 7.1% 10.9% 9.9% 0.0% 4.0% 8.0% 12.0% 16.0% FBMS Alabama Florida Georgia Louisiana Mississippi Southeast
Slide 9: COVID-19 Pandemic Response
• Moved as many as practical employees to work by remote access • Increased the frequency of facility janitorial services • Rotated access as much as practical for employees whose function could not be performed remotely • Provided lunch daily to on site personnel to limit their off premise exposure
Slide 10: Credit Highlights
10 Credit Highlights Franchise and Management Strength • Gulf South markets remain resilient through the COVID pandemic; unemployment well below national average • 84 locations across 5 states; ranked in the top 10 by deposit market share by county / parish in ~75% of our franchise • Geographically
Slide 11: Building Franchise Value: Six Acquisitions Closed 2018-'20
11 Geography Mobile, AL MSA Tallahassee, FL MSA Tallahassee, FL MSA Hammond, LA MSA Destin, FL MSA Valdosta, GA MSA Date Closed March ‘18 April ‘18 November ‘18 March ‘19 November ‘19 April ‘20 Branches 9 5 6 7 6 8 41 Purchase Price Cash & Stock: $60.0M Cash & Stock: $30.5M Cash & Stock: $80.0M All
Slide 12: Financial Results
12 FINANCIAL RESULTS
Slide 13: Historical Performance Over Time: Nine Years of Record Earnings
$2.5 $3.6 $4.2 $6.3 $8.5 $9.7 $10.6 $21.2 $43.7 $10.8 $17.4 $12.6 $17.6 $13.7 $17.8 $16.7 $21.4 $0.0 $12.0 $24.0 $36.0 $48.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q3 '18 Q3 '19 Q4 '18 Q4 '19 Q1 '19 Q1 '20 Q2 ' 19 Q2 '20 EPS Net Income ($mm) $0.82 $1.16 $0.96 $1.19 $1.55 $1.57 $1.11 $1.62 1.75
Slide 14: Net Interest Income Over Time
$16.3 $19.1 $22.2 $28.4 $33.4 $37.0 $40.3 $59.2 $84.9 $121.8 $21.7 $30.5 $25.3 $33.4 $27.1 $34.1 $30.8 $39.2 $0.0 $30.0 $60.0 $90.0 $120.0 $150.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q3 '18 Q3 '19 Q4 '18 Q4 '19 Q1 ' 19 Q1 '20 Q2 '19 Q2 '20 Net Interest Income Over Time 14 3.74% 3.99% 3.
Slide 15: Historical Profitability Trends
15.6% 15.8% 15.2% 9.9% 10.6% 0.0% 5.0% 10.0% 15.0% 20.0% Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 15.5% 15.1% 13.7% 9.3% 16.0% 0.0% 5.0% 10.0% 15.0% 20.0% Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20* 1.39% 1.49% 1.40% 0.89% 0.91% 0.50% 0.75% 1.00% 1.25% 1.50% Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 1.39% 1.43% 1.26% 0.
Slide 16: Historical Profitability Trends
16 Historical Profitability Trends Non - interest Income, Oper. / Adj. Operating Revenue (%) (1) Non - i nterest Income YTD (%) Efficiency Ratio, Operating (%) (1) Adjusted Operating Expense / Average Assets (%) (1) 17.8% 18.8% 16.9% 15.8% 16.8% 14.0% 15.5% 17.0% 18.5% 20.0% Q2 '19 Q3 '19 Q4 '19 Q1
Slide 17: Interest Rate Sensitivity
17 Interest Rate Sensitivity • The following table summarizes the forecasted impact on the net interest income given an immediate change in interest rates a t the specified levels based on forecasted assumptions of prepayment speeds, nominal interest rates and loan and deposit repric ing rates • Ass
Slide 18: Historical Balance Sheet Growth
$396 $573 $597 $780 $893 $917 $1,039 $1,471 $2,457 $3,077 $4,217 $0 $1,100 $2,200 $3,300 $4,400 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q2 '20 $330 $385 $408 $580 $705 $773 $867 $1,225 $2,060 $2,600 $3,190 $0 $800 $1,600 $2,400 $3,200 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q2 '2
Slide 19: Capital Raises and Acquisitions Over Time
$9.00 $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 $16.00 $17.00 $18.00 $19.00 $20.00 $21.00 Source : S&P Global Market Intelligence Note: Assets shown as of next quarter after close; dates are as of transaction close, unless otherwise specified 3/22/2013 $22.0M Equity Offering Assets: $789 million 4/2
Slide 20: Strong Balance Sheet & Earnings Power
95.8% 87.3% FBMS Peers 20 Strong Balance Sheet & Earnings Power 14.6% 13.9% FBMS Peers 1.8% 1.5% FBMS Peers 75.7% 89.8% FBMS Peers TCE+ALL / Loans (%) Core Deposits (%) YTD PTPP ROAA, Operating (1) (%) Loans / Deposits (%) 69 bps higher than peers 30 bps higher than peers 14 percentage points lower
Slide 21: Loan & Deposit Information
21 LOAN & DEPOSIT INFORMATION
Slide 22: Loan Portfolio Overview
C&D 11% 1 - 4 Family 25% Multifamily 4% Owner - Occupied CRE 21% Non Owner - Occupied CRE 16% C&I 18% Consumer & Other 6% Farmland 2% 22 Loan Portfolio Overview Q2 ‘20 Loan Composition Historical Loan Composition Dollars in millions, unless otherwise noted Source : S&P Global Market Intelligence Dat
Slide 23: COVID-19 Loan Modifications
Sector Total Modified % of Total Hotels $39.0 Restaurants 19.2 Retail 6.6 Other 43.9 Total $108.6 3.7 % Hotels $39.0 Restaurants $19.2 Retail $6.6 Other $43.9 23 COVID - 19 Loan Modifications Loan Modifications Resulting from COVID - 19 as of 9/4/20 Loan Modification Trends $40.0 $46.9 $54.0 $39.0 $
Slide 24: Escalated Monitoring
24 Escalated Monitoring Dollars in millions Source : Company Documents Data as of 6 /30/20 Sector Total Committed % of Loans LTV % Hotels $144.7 4.5% 55.4% Flagged 106.3 Non-Flagged 38.4 Restaurants $93.0 2.9% 55.5% Chain 42.6 Non-Chain 47.6 Construction 2.8 Retail $208.1 6.6% 52.5% Construction 2.5
Slide 25: Loan Concentrations Over Time
25 Loan Concentrations Over Time C&D Loan Concentration Over Time CRE Loan Concentration Over Time Source: S&P Global Market Intelligence Note: 100% and 300% are the interagency guidance figures for C&D Concentration and CRE Concentration of a banking institution ’s total risk - based capital, respe
Slide 26: Overview of PPP Activity
26 Overview of PPP Activity • As of July 23, 2020, we have processed 3,213 loans totaling $264.8 million with average loan size of $82,000 • Net fees of $10.6 million Dollars in millions Source: Company documents Sector Total PPP Hotels $2.4 Restaurants 27.0 Retail 51.6 Subtotal of Escalated Monitor
Slide 27: Loan Reserves Detail & Nonperforming Assets
27 Loan Reserves Detail & Nonperforming Assets ALLL / Credit Marks as of June 30, 2020 Dollars in millions Source: Company documents ALLL / Credit Marks Loan Balances ALLL / Credit Mark ALLL / Mark to Loans Acquired Loans Not Incorporated into ALLL Model $903.2 mm $9.4 mm mark 1.0% Acquired Purchase
Slide 28: Asset Quality Over Time
28 Asset Quality Over Time NPAs / Loans + OREO (%) NCOs / Average Loans (%) Reserves / NPLs (%) Reserves / Loans (%) Source: S&P Global Market Intelligence Yearly data as of or for the twelve months ended each respective year; quarterly data as of or for the three months ended eac h r espective quar
Slide 29: History of Prudent Credit Culture
29 History of Prudent Credit Culture 15 - Year NCOs / Avg. Loans vs. Banking Industry (%) 0.1% 0.0% 0.3% 0.5% 0.4% 0.3% 0.4% 0.3% 0.0% 0.2% (0.0%) (0.0%) (0.0%) 0.0% (0.0%) 0.0% 0.5% 0.4% 0.6% 1.3% 2.5% 2.5% 1.6% 1.1% 0.7% 0.5% 0.4% 0.5% 0.5% 0.5% 0.5% 0.6% 2005 2006 2007 2008 2009 2010 2011 2012 20
Slide 30: Attractive Deposit Portfolio
$0.2 $0.2 $0.3 $0.6 $0.7 $0.2 $0.2 $0.3 $0.5 $0.6 $0.3 $0.4 $0.6 $0.9 $1.1 $0.1 $0.1 $0.2 $0.4 $0.5 $0.1 $0.1 $0.1 $0.1 $0.2 $0.9 $1.0 $1.5 $2.5 $3.1 2015 2016 2017 2018 2019 Demand Deposits NOW Accounts Money Market & Savings Retail Time Deposits Jumbo Time Deposits Deposit Portfolio Amount Demand
Slide 31: Capital & Liquidity Positions
31 CAPITAL & LIQUIDITY POSITIONS
Slide 32: Capital & Liquidity Position
32 Capital & Liquidity Position TCE / TA (%) (1) Leverage Ratio (%) Total Risk Based Capital Ratio (%) CET1 Ratio (%) Source: S&P Global Market Intelligence Data as of 12/31 of each year, respectively; Q2 ‘20 data as of 6/30/20 (1) Non - GAAP measure, see reconciliation to closest GAAP measure in ap
Slide 33: Capital Position
Subordinated Notes $65 ACL $28 Trust Preferred $15 Common Equity Tier 1 $419 33 Capital Position Regulatory Capital as of 6/30/20 ($mm) Capital Highlights • Elected to take advantage of delayed implementation of CECL on regulatory capital; CECL implementation to occur upon the earlier of the end of
Slide 34: Strong Liquidity at the Bank
Outstanding / Remaining Usage Bank Sources Available Pledged Availability Percentage FHLB Fixed Rate Advances $1,297.0 $216.0 $1,081.0 16.7 % FRB -- -- -- -- Correspondent Fed Funds Lines 70.0 -- 70.0 0.0 Total Bank Funding $1,367.0 $216.0 $1,151.0 15.8 % 34 Strong Liquidity at the Bank U.S. Treasur
Slide 35: Appendix
35 APPENDIX
Slide 36: Deposit Market Share
Deposits Market Rank Institution ($mm) Share Branches 1 Truist Financial Corp. $33,103 17.43% 339 2 Wells Fargo & Co. 30,280 15.95 233 3 Bank of America Corp. 23,880 12.58 158 4 Synovus Financial Corp. 12,951 6.82 114 5 Ameris Bancorp 8,778 4.62 108 6 United Community Banks Inc. 6,695 3.53 67 7 Regi
Slide 37: Deposit Market Share
Deposits Market Rank Institution ($mm) Share Branches 1 JPMorgan Chase & Co. $3,283 20.33% 27 2 Hancock Whitney Corp. 2,890 17.89 29 3 Capital One Financial Corp. 2,671 16.54 21 4 Regions Financial Corp. 1,658 10.26 22 5 First Horizon National Corp. 903 5.59 6 6 Investar Holding Corp. 881 5.45 14 7
Slide 38: Historical Financials
Historical Financials 38 Source : S&P Global Market Intelligence Data as of 12/31 of each year, respectively; quarterly data as of the three months ended each respective quarter (1) Non - GAAP measure, see reconciliation to closest GAAP measure For the Twelve Months Ended, For the Three Months Ended
Slide 39: Non-GAAP Reconciliation
39 Non - GAAP Reconciliation The First Bancshares, Inc. Non-GAAP Year ended December 31 Three Months Ended June 30, September 30, December 31, March 31, June 30, (Dollars in thousands) 2016 2017 2018 2019 2019 2019 2019 2020 2020 Net Income Available to Common $9,666 $10,616 $21,225 $43,745 $11,983
Slide 40: Non-GAAP Reconciliation (cont.)
40 Non - GAAP Reconciliation (cont.) The First Bancshares, Inc. Non-GAAP Three Months Ended September 30, December 31, March 31, June 30, September 30, December 31, March 31, June 30, (Dollars in thousands) 2018 2018 2019 2019 2019 2019 2020 2020 Net Interest Income $21,669 $25,270 $27,131 $30,772 $
Slide 41: Non-GAAP Reconciliation
The First Bancshares, Inc. Non-GAAP Year ended December 31 Three Months Ended June 30, September 30, December 31, March 31, June 30, (Dollars in thousands) 2016 2017 2018 2019 2019 2019 2019 2020 2020 Operating Expense Total non-interest expense $36,862 $55,443 $76,309 $88,569 $20,891 $20,825 $24,96
Slide 42: Non-GAAP Reconciliation (cont.)
42 Non - GAAP Reconciliation (cont.) The First Bancshares, Inc. Non-GAAP Three Months Ended June 30, September 30, December 31, March 31, June 30, (Dollars in thousands) 2019 2019 2019 2020 2020 Total non-interest income $6,716 $7,103 $7,574 $6,474 $15,680 Pre-tax non-operating items -- -- (714) --
Slide 43: Non-GAAP Reconciliation (cont.)
43 Non - GAAP Reconciliation (cont.) The First Bancshares, Inc. Non-GAAP Year ended December 31 Three Months ended March 31, June 30, (Dollars in thousands) 2015 2016 2017 2018 2019 2020 2020 Total common equity $86,313 $154,527 $222,468 $363,254 $543,658 $555,296 $627,795 Less: Goodwill and other i
First Bancshares — Investor Presentation (September 2020) on 6ix