FIRST BANCSHARES INC /MS/ (FBMS)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 delivered steady core performance: net income to common of $18.3M (-1.5% q/q) and diluted EPS of $0.58 (operating EPS $0.64), as net interest income rose and deposit costs eased, while non-interest income declined due to lower fees and a loss on investments .
• Net interest margin expanded to 3.37% (FTE NIM 3.43%) from 3.33% q/q; cost of deposits improved 5 bps to 178 bps, supporting sequential NII growth despite modest loan yield pressure .
• Asset quality mixed: nonperforming assets increased to 0.37% of total assets (from 0.31% q/q) as nonaccrual loans rose, though net charge-offs remained low at 0.04% annualized .
• Strategic overhang/catalyst: merger with Renasant expected to close in H1 2025, all-stock at 1.00 RNST per FBMS share; approvals and integration steps remain key near-term stock drivers .

What Went Well and What Went Wrong

• What Went Well

  • Margin expansion: Q4 core NIM rose 7 bps to 3.33% (FTE NIM 3.43%), aided by lower deposit costs and decreased interest expense; NII increased to $60.1M (+$1.1M q/q) .
  • Loan growth: total loans increased $88.6M (+1.7% q/q), driving earning assets; consolidated assets rose to $8.005B (+$38.3M q/q) .
  • Management tone: “strong loan growth, core net interest margin expansion and in line operating results” reflecting disciplined execution ahead of the Renasant merger .

• What Went Wrong

  • Non-interest income pressure: declined $0.7M q/q to $11.5M on lower service charges/fees and a $1.1M investment loss (partially offset by a $0.3M Treasury award) .
  • Higher operating costs: non-interest expense rose $2.0M q/q to $48.4M, driven by salaries/benefits (+$2.3M, including $1.9M accelerated vesting tied to merger) and higher other expenses .
  • Asset quality: nonperforming assets climbed to $29.9M (0.37% of assets), with nonaccrual loans up $4.1M q/q; past dues remained controlled at 0.40% of loans .

Financial Results

Segment breakdown: Not applicable (community banking model; financials reported on consolidated basis) .

Key drivers this quarter:

• Sequential NII increase (+$1.1M) primarily from lower interest expense; deposit costs declined 5 bps to 178 bps, while average earning asset yield edged down 2 bps (5.27% → 5.25%) .
• Non-interest income down $0.7M q/q on lower service charges/fees and $1.1M investment loss, partly offset by a $0.3M Treasury award .
• Expenses up $2.0M q/q, with salaries/benefits up $2.3M (including $1.9M accelerated vesting tied to merger) and other expenses +$1.5M; acquisition expense fell $1.8M q/q .

Guidance Changes

Earnings Call Themes & Trends

Note: An earnings call transcript for Q4 2024 was not available in our document set; themes above use Q2 call and Q3/Q4 releases .

Management Commentary

• “We are pleased with our fourth quarter performance, which was characterized by strong loan growth, core net interest margin expansion and in line operating results.” — M. Ray “Hoppy” Cole, Jr., President & CEO .
• “Two thousand twenty-four was a pivotal year in the history of our company with the announcement of the Merger.” — CEO on strategic trajectory and value creation .
• Q4 drivers: NII up $1.1M largely due to a $1.1M decrease in interest expense; cost of deposits averaged 178 bps; core NIM up 7 bps q/q .
• Expense color: salaries/benefits +$2.3M q/q, including $1.9M accelerated vesting related to merger; acquisition expense down $1.8M q/q .

Q&A Highlights

A Q4 2024 earnings call transcript could not be located; highlights below reference Q2 2024:

• Loan growth outlook: mid single-digit in 2H; strong pipelines across markets (Mississippi, Georgia) .
• Deposit cost and margin: deposit costs flattening; margin expected to be relatively stable amid brokered CDs/public funds dynamics .
• Loan yields: competitive pressure nudging new originations toward ~7.9% and impacting late-fee accruals; portfolio repricing tailwinds remain .
• Expense guidance: FY operating expenses targeted ~$176–$177M; typical year-end true-ups and 3–4% inflation assumed for next year .
• Securities strategy: potential additional repositioning contingent on loss/earn-back math similar to late-2023 action .

Estimates Context

• S&P Global consensus estimates were unavailable for FBMS in our dataset due to a missing CIQ mapping, preventing comparison to Street EPS/revenue for Q4 2024 [SpgiEstimatesError from GetEstimates].
• As a result, we do not present beat/miss vs. estimates for Q4 2024. Values would normally be retrieved from S&P Global.

Key Takeaways for Investors

• Sequential core improvement: NIM expansion and lower deposit costs supported NII growth; watch sustainability if rates decline further and competitive loan pricing persists .
• Credit watchpoint: rising nonaccruals/NPAs warrant monitoring, though net charge-offs remain low and ACL coverage stable (1.04% of loans) .
• Non-interest income volatility: fee softness and investment losses pressured revenue diversification; Treasury award provided only partial offset .
• Cost discipline vs. non-core items: operating expense run-rate was exceeded by merger-related accelerated vesting and acquisition charges; expect normalization post-merger .
• Balance sheet resilience: deposits up q/q (+$44.1M), liquidity and capital ratios remain solid (CET1 est. 14.5%, leverage 11.6%) entering merger close .
• Strategic catalyst: RNST/FBMS combination in H1 2025 is the major narrative driver; integration progress, pro forma cost synergies, and capital positioning should shape medium-term thesis .
• Trading setup: near-term moves likely tied to merger timing/approvals and any credit updates; improving core NIM and deposit costs are supportive, while NPA trends and non-interest income variability are the key overhangs .

Additional relevant press releases for Q4 2024 period:

• Q4 2024 results press release (corporate site mirror of the 8-K Exhibit 99.1) .
• Q3 2024 results press release .