The following is a summary of the The First Bancshares, Inc. (FBMS) Q2 2024 Earnings Call Transcript:

Financial Performance:

• First Bancshares reported a net earnings of $19.7 million, down $900,000 from the previous quarter, mainly due to a $1.7 million provision expense related to loan growth.

• Loans up 8.6% on an annualized basis, with originations amounting to $450 million compared to $253 million in the first quarter.

• Core margin increased by 9 basis points to 3.19%.

• Net Interest Margin (NIM) expanded by 6 basis points due to margin expansion and stable deposit costs.

• Return on average assets (ROAA) stood at 1.01% and Return on average tangible common equity was at 12.76%.

• Efficiency ratio was reported at 60.65%.

Business Progress:

• The bank saw strong performance in loan originations and credit quality.

• Construction lending continued at a brisk pace with significant portion reserved for future funding.

• Deposit costs remained stable, with a decrease in the cost of interest rate liabilities, while non-interest-bearing portfolio increased, both in dollar terms and as a percentage.

Opportunities:

• The market continues to offer substantial growth opportunities, particularly in the lending sector, supported by robust loan originations and managed credit quality. The descent in deposit costs enhancing the net interest margin is also beneficial.

Risks:

• Observed uptick in non-performing assets (NPAs) and classified loans, although overall credit quality remains strong.

• Anticipated decrease in deposits related to public funds could challenge liquidity, albeit management expects to manage this efficiently.

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