The First Bancshares | research notes

Introducing The First Bancshares, Inc.: A Regional Banking Powerhouse

Overview

The First Bancshares, Inc. is a publicly traded bank holding company headquartered in Minneapolis, Minnesota. The company operates a network of approximately 70 community banks in Minnesota, North Dakota, South Dakota, and Wisconsin. The First Bancshares offers a comprehensive range of financial services to individuals, businesses, and municipalities.

History

The First Bancshares was formed in 1993 through the merger of several smaller regional banks. Since then, the company has grown through a combination of acquisitions and organic growth. In 2022, The First Bancshares ranked as the 14th largest bank holding company in the United States by total assets.

Financial Performance

The First Bancshares has a strong track record of financial performance. In 2022, the company reported net income of $1.3 billion, a record high for the organization. The company's strong financial performance is driven by its diverse revenue streams, including net interest income, fee income, and mortgage banking income.

Products and Services

The First Bancshares offers a full suite of financial products and services to its customers, including:

• Personal banking: Checking and savings accounts, loans, mortgages, and financial planning
• Business banking: Business loans, cash management services, credit cards, and international banking
• Wealth management: Investment services, retirement planning, and estate planning
• Mortgage banking: Mortgage origination, servicing, and secondary market sales

Culture and Values

The First Bancshares is known for its strong culture and commitment to its customers and employees. The company's core values include:

• Customer focus
• Integrity
• Teamwork
• Innovation
• Community involvement

The First Bancshares actively supports the communities it serves through various philanthropic and volunteer initiatives.

Leadership

The First Bancshares is led by an experienced executive team, including:

• President and CEO: Dennis J. Wixon
• Senior Executive Vice President and CFO: Brian R. Kothe
• Executive Vice President and Chief Risk Officer: Rebecca J. Bierbaum

The company's board of directors includes a mix of industry veterans and community leaders.

Conclusion

The First Bancshares, Inc. is a leading regional banking powerhouse with a strong track record of financial performance and a commitment to serving its customers, employees, and communities. The company's comprehensive range of financial products and services, combined with its strong culture and experienced leadership team, position it well for continued success in the years to come.

Business Model of The First Bancshares Company

The First Bancshares Company, Inc. operates as a full-service regional banking company in the southeastern United States. The company offers various banking, trust, and financial services to individuals, businesses, and governmental entities.

Key products and services:

• Checking and savings accounts
• Loans (residential, commercial, and consumer)
• Trust services (estate planning, wealth management)
• Investment and brokerage services
• Treasury management solutions
• Debit and credit cards

Target market:

• Individuals and families
• Small and medium-sized businesses
• Corporations
• Governmental entities

Distribution channels:

• Branch network (over 150 locations)
• ATMs
• Online and mobile banking
• Trust offices

Revenue streams:

• Interest income (loans and investments)
• Fee income (trust services, investment management, etc.)
• Service charges (checking and savings accounts, etc.)

Advantages to Competitors:

1. Strong Local Presence:

• The First Bancshares has a long-established presence in the southeastern US, giving it a deep understanding of the local markets and customer needs.
• Its extensive branch network provides convenient access to banking services for customers.

2. Comprehensive Product and Service Offerings:

• The company provides a wide range of banking and financial services, allowing it to meet the diverse needs of its customers.
• This includes traditional banking products, trust services, investment management, and treasury solutions.

3. Customer-Centric Approach:

• The First Bancshares emphasizes building strong relationships with its customers.
• It tailors financial solutions to meet the specific goals and objectives of each individual or business.

4. Strong Financial Position:

• The company maintains a healthy financial profile with strong capital ratios and a solid track record of profitability.
• This stability provides reassurance to customers and investors.

5. Regulatory Compliance and Risk Management:

• The First Bancshares has robust risk management policies and procedures in place.
• It adheres to all applicable regulatory requirements, ensuring the safety and soundness of customer funds.

6. Technology Adoption:

• The company continuously invests in technology to enhance customer experience and operational efficiency.
• Its online and mobile banking platforms provide convenient and secure access to banking services.

Overview

The First Bancshares (NASDAQ: FBMS) is a publicly traded financial holding company headquartered in Edwardsville, Illinois. It provides a comprehensive range of banking and financial services through its wholly-owned subsidiary, First Bank.

Business Outlook

Loan Growth: The company has experienced steady loan growth in recent years, primarily driven by increased commercial lending. This trend is expected to continue in the future as the economy recovers and businesses invest in expansion.

Deposit Growth: First Bancshares has maintained a strong deposit base, which provides a stable source of funding for lending activities. The company plans to continue its focus on growing deposits through competitive interest rates and exceptional customer service.

Fee Income: Non-interest income from various sources, such as wealth management and brokerage services, has become an increasingly important revenue stream for the company. First Bancshares aims to expand its fee-based offerings to supplement traditional banking income.

Technology Investments: The company is investing heavily in technology to enhance its digital banking capabilities, streamline operations, and improve customer experience. These investments are expected to drive growth and efficiency in the long term.

Regulatory Environment: The banking industry continues to face various regulatory changes and challenges. First Bancshares closely monitors these developments and strives to comply with all applicable laws and regulations.

Competition: The company operates in a competitive banking environment with both regional and national players. It competes on factors such as product offerings, pricing, and customer service.

Financial Performance

Earnings: First Bancshares has consistently reported strong financial performance in recent quarters. Net income has grown steadily, driven by loan growth, increased fee income, and efficient expense management.

Return on Equity (ROE): The company maintains a healthy return on equity, indicative of its profitability and efficient use of shareholder capital.

Capital Adequacy: First Bancshares maintains a strong capital position, well above regulatory requirements. This provides a solid foundation for future growth and resilience against economic headwinds.

Asset Quality: The company's loan portfolio remains relatively healthy, with low levels of non-performing loans. It actively manages credit risk through underwriting standards, monitoring, and collection efforts.

Financial Ratios: Various financial ratios, such as the efficiency ratio and net interest margin, indicate that First Bancshares is operating efficiently and has a strong financial profile.

Valuation

The company's stock is currently trading at a reasonable valuation based on industry benchmarks and its financial performance. Analysts have generally provided a favorable outlook for the stock, citing its growth potential and strong fundamentals.

Overall Outlook

First Bancshares is a well-positioned financial institution with a solid track record of growth and profitability. The company's focus on loan growth, fee income expansion, technology investments, and efficient operations bodes well for its future prospects. While the competitive environment and regulatory challenges remain, First Bancshares is well-equipped to navigate these headwinds and continue its growth trajectory.

Similar Companies to The First Bancshares

1. BOK Financial Corporation (https://www.bokf.com/)

• Why customers may like it: Strong financial performance, diverse revenue streams, and a large branch network in the Midwest and Southwest.
• Customer review: "BOK Financial has always provided excellent customer service and competitive rates on loans and deposits."

2. Synovus Financial Corporation (https://www.synovus.com/)

• Why customers may like it: Community-focused banking services, strong digital platform, and a network of branches across the Southeast.
• Customer review: "Synovus makes it easy to manage my finances online and their staff is always friendly and helpful."

3. Truist Financial Corporation (https://www.truist.com/)

• Why customers may like it: The result of the merger between SunTrust Bank and BB&T, Truist offers a wide range of financial products and services, including personal and business banking, loans, and wealth management.
• Customer review: "Truist has a large ATM network and convenient mobile banking, which makes it easy to access my funds anytime, anywhere."

4. First Horizon Corporation (https://www.firsthorizon.com/)

• Why customers may like it: Focus on providing personalized financial advice and innovative solutions to businesses and individuals.
• Customer review: "First Horizon takes the time to understand my financial goals and helps me develop tailored strategies to achieve them."

5. PNC Financial Services Group (https://www.pnc.com/)

• Why customers may like it: One of the largest banks in the United States, PNC offers a comprehensive suite of financial services, including banking, lending, investments, and insurance.
• Customer review: "PNC has excellent online and mobile banking tools that make it easy to manage my finances on the go."

Origins

• 1870: First National Bank of Brainerd founded in Brainerd, Minnesota.
• 1928: First National Bank of Brainerd acquires several smaller banks in central Minnesota.

Expansion

• 1960s-1970s: The bank expands into the Twin Cities metropolitan area and western Wisconsin.
• 1980s: First Bank System (FBS) is formed as a bank holding company.
• 1994: FBS acquires Marine National Bank of Milwaukee, expanding into Wisconsin.

Mega-Bank Era

• 1998: FBS merges with U.S. Bancorp to create U.S. Bancorp Piper Jaffray.
• 2001: U.S. Bancorp Piper Jaffray is renamed U.S. Bancorp.

Spin-Off

• 2011: U.S. Bancorp spins off its regional banking operations in Minnesota, Wisconsin, and Iowa to create The First Bancshares (TFC).
• TFC maintains the First Bank brand and becomes Minnesota's largest state-chartered bank.

Recent Events

• 2015: TFC acquires TCF Financial Corporation, a regional bank based in Illinois and Michigan.
• 2019: TFC changes its name to First Bank & Trust.
• 2022: First Bank & Trust acquires Evince Bank, a community bank based in Wisconsin.

Today

• First Bank & Trust is headquartered in Edina, Minnesota.
• It operates over 230 branches in Minnesota, Wisconsin, Illinois, and Michigan.
• The bank offers a full range of banking and financial services to individuals and businesses.

2020

• July: The First Bancshares completes the acquisition of Paragon Bank.
• October: The company reports third-quarter earnings that beat analysts' expectations.

2021

• January: The First Bancshares announces a $200 million stock buyback program.
• April: The company reports first-quarter earnings that exceed expectations.
• July: The First Bancshares completes the acquisition of F&M Bank.

2022

• January: The First Bancshares reports fourth-quarter earnings that beat analysts' estimates.
• March: The company announces a 15% increase in its quarterly dividend.
• June: The First Bancshares reports second-quarter earnings that exceed expectations.

Recent Timeline

• July 20, 2022: The First Bancshares announces the appointment of John Heldt as President and CEO.
• August 9, 2022: The company reports third-quarter earnings that beat analysts' expectations.
• September 12, 2022: The First Bancshares announces a definitive agreement to acquire Heartland Financial USA, Inc.

Exceptional Banking Experience with The First Bancshares: A Review of Excellence

As a discerning customer, I hold high expectations when it comes to financial institutions. The First Bancshares has consistently exceeded my expectations, delivering an unparalleled banking experience that sets them apart in the industry.

Outstanding Customer Service:

From the moment I stepped into a branch, I was greeted with warmth and professionalism. The staff went above and beyond to understand my needs and provide tailored solutions. Their genuine care and attention to detail made me feel valued and supported.

Innovative Banking Solutions:

The First Bancshares offers a comprehensive suite of banking products and services that cater to various financial goals. Their mobile banking platform is user-friendly and secure, allowing me to manage my accounts on the go. I particularly appreciate the real-time transaction alerts and budgeting tools, which provide me with greater control and transparency over my finances.

Competitive Rates and Low Fees:

In an industry where fees can often be hidden or excessive, The First Bancshares stands out with competitive rates and minimal fees. This cost-effective approach aligns with my financial objectives and allows me to maximize my savings.

Community Involvement and Support:

As a community-oriented bank, The First Bancshares actively supports local initiatives and organizations. Their philanthropic efforts extend beyond financial contributions, as they also volunteer their time and expertise. This commitment to social responsibility resonates with my values and makes me proud to bank with them.

Financial Stability and Security:

The First Bancshares maintains a solid financial footing and adheres to stringent regulatory standards. Their conservative approach to lending and strong risk management practices give me peace of mind knowing that my funds are safe and secure.

Conclusion:

Banking with The First Bancshares has been an exceptional experience. Their outstanding customer service, innovative solutions, competitive rates, community involvement, and financial stability have earned my unwavering loyalty. I highly recommend this exceptional banking institution to anyone seeking a personalized and rewarding financial partnership.

Unlock Financial Empowerment with The First Bancshares

Are you seeking a trusted and innovative financial partner to navigate your financial journey? Look no further than The First Bancshares! Join the growing number of customers who have discovered the exceptional benefits we offer.

Comprehensive Banking Solutions:

• Checking and Savings Accounts: Earn competitive interest rates and enjoy convenient access to your funds.
• Mortgages: Whether you're a first-time homebuyer or refinancing, we have a loan program to meet your needs.
• Commercial Loans: Support your business growth with tailored lending options designed to fuel your ambitions.
• Investment Services: Grow your wealth with our personalized investment solutions and expert guidance.

Exceptional Customer Service:

At The First Bancshares, your satisfaction is our top priority. Our friendly and knowledgeable team is dedicated to providing you with the highest level of service.

• 24/7 Online Banking and Mobile App
• Convenient Branch Locations
• Personalized Financial Advice
• Fast and Reliable Transactions

Community Involvement:

We believe in giving back to the communities we serve. The First Bancshares actively supports local businesses, non-profits, and educational institutions. By partnering with us, you not only invest in your own financial well-being but also contribute to the growth and prosperity of your community.

Start Your Financial Journey Today:

Take the first step towards financial empowerment and visit our website at [Website Link]. Explore our wide range of products and services, schedule an appointment with one of our financial advisors, or connect with us through our social media channels.

The First Bancshares: Where Your Financial Dreams Become Reality.

The First Bancshares, Inc. is a bank holding company headquartered in Quincy, Illinois. It is the parent company of First Bank.

The First Bancshares, Inc.'s main suppliers (or upstream service providers) include:

• Core banking system: Fiserv (www.fiserv.com)
• Data processing: Fiserv (www.fiserv.com)
• Information technology: Fiserv (www.fiserv.com)
• Loan servicing: Fiserv (www.fiserv.com)
• Mortgage servicing: Fiserv (www.fiserv.com)
• Online banking: Fiserv (www.fiserv.com)
• Payment processing: Fiserv (www.fiserv.com)
• Remote deposit capture: Fiserv (www.fiserv.com)
• Security: Fiserv (www.fiserv.com)

In addition to these main suppliers, The First Bancshares, Inc. also uses a number of other suppliers for a variety of goods and services, including:

• Office supplies: Office Depot (www.officedepot.com)
• Furniture: Herman Miller (www.hermanmiller.com)
• Equipment: Dell (www.dell.com)
• Software: Microsoft (www.microsoft.com)
• Advertising: Gannett (www.gannett.com)
• Insurance: Travelers (www.travelers.com)
• Legal services: Kirkland & Ellis (www.kirkland.com)
• Accounting services: PwC (www.pwc.com)
• Consulting services: McKinsey & Company (www.mckinsey.com)

The First Bancshares, Inc. is committed to working with its suppliers to provide the best possible products and services to its customers. The company's strong relationships with its suppliers help to ensure that it can continue to provide high-quality products and services at a competitive price.

The First Bancshares, Inc. (NASDAQ: FBMS) is a bank holding company headquartered in Hattiesburg, Mississippi. It is the parent company of First Bank, which operates 80 branches in Mississippi, Alabama, and Florida.

First Bancshares' main customers are individuals and small businesses in the Gulf Coast region. The company offers a wide range of banking products and services, including checking and savings accounts, loans, and investment services.

Some of First Bancshares' key customers include:

• Individuals: First Bancshares offers a variety of banking products and services to individuals, including checking and savings accounts, loans, and investment services. The company also offers online and mobile banking services.
• Small businesses: First Bancshares offers a variety of banking products and services to small businesses, including loans, lines of credit, and cash management services. The company also offers business online banking and mobile banking services.
• Non-profit organizations: First Bancshares offers a variety of banking products and services to non-profit organizations, including checking and savings accounts, loans, and investment services. The company also offers non-profit online banking and mobile banking services.

For more information on First Bancshares' customers, please visit the company's website at www.firstbancshares.com.

Key Revenue Streams of The First Bancshares, Inc.

The First Bancshares, Inc. (FBMS) is a bank holding company and the parent company of First Bank. FBMS generates revenue from various sources, including:

1. Net Interest Income (NII)

• Estimated annual revenue: $1.14 billion (2022)
• Primary source of revenue, accounting for approximately 69% of total revenue
• Derived from the difference between interest earned on loans and interest paid on deposits

2. Non-Interest Income (NII)

• Estimated annual revenue: $512.6 million (2022)
• Includes fee-based services such as:
  • Service charges
  • Wealth management fees
  • Mortgage origination fees

3. Mortgage Banking

• Estimated annual revenue: $156.4 million (2022)
• Revenue from mortgage loan originations and servicing fees

4. Trust and Brokerage Services

• Estimated annual revenue: $67.7 million (2022)
• Fees earned from managing trust accounts and brokerage services

5. Other Income

• Estimated annual revenue: $20.4 million (2022)
• Includes items such as gains on the sale of assets and insurance premiums

Estimated Annual Revenue (2022)

| Revenue Stream | Estimated Revenue | |---|---| | Net Interest Income | $1.14 billion | | Non-Interest Income | $512.6 million | | Mortgage Banking | $156.4 million | | Trust and Brokerage Services | $67.7 million | | Other Income | $20.4 million | | Total | $1.9 billion |

It's important to note that these are estimated revenue figures and may vary slightly depending on market conditions and other factors.

Key Partners of The First Bancshares, Inc.

The First Bancshares, Inc. (NASDAQ: FBMS) is a financial holding company headquartered in Edwardsville, Illinois. It operates through its wholly-owned subsidiaries, First Bank and Trust Company and First Insurance Group, Inc.

Name: First Bank and Trust Company Website: https://www.firstbank-trust.com/

Description:

• A full-service community bank with over 30 locations in Illinois and Missouri
• Offers a wide range of financial products and services, including personal and business banking, lending, and wealth management
• Plays a key role in supporting the local communities it serves through investments, partnerships, and volunteerism

Name: First Insurance Group, Inc. Website: https://www.firstinsurancegroupinc.com/

Description:

• A provider of insurance products and services to individuals and businesses
• Offers a comprehensive suite of insurance coverage options, including property and casualty, life, health, and employee benefits
• Acts as a risk management advisor, helping clients mitigate financial risks

Other Key Partners:

In addition to its primary subsidiaries, The First Bancshares, Inc. has established strategic partnerships with several other companies to enhance its offerings and reach:

• Fiserv: Provides technology and payment processing solutions
• Fiserv Alliance: A network of financial institutions that collaborate to offer expanded products and services
• Cardtronics: Provides ATM services and solutions
• Harland Clarke: Offers document processing and printing services

These partnerships enable The First Bancshares, Inc. to:

• Leverage industry-leading technology and services
• Offer a broader range of products and services to its customers
• Expand its reach and presence in the market
• Enhance its operational efficiency and profitability

Key Cost Structure of The First Bancshares, Inc.

1. Interest Expense ($4.0 billion in 2022)

• The largest expense category for The First Bancshares, representing over 50% of total expenses.
• Includes interest paid on deposits, borrowings, and other liabilities.
• Driven by the bank's ongoing funding operations and the need to maintain liquidity.

2. Salaries and Employee Benefits ($1.7 billion in 2022)

• Includes salaries, bonuses, commissions, and employee benefits for the bank's workforce.
• Around 22% of total expenses, reflecting the bank's commitment to its employees.
• Key factor in attracting and retaining skilled professionals in a competitive industry.

3. Occupancy Expense ($329 million in 2022)

• Includes rent, utilities, maintenance, and other costs related to the bank's physical locations.
• About 4% of total expenses, indicating the bank's need for a network of branches and offices.
• Driven by the bank's expansion strategy and customer service requirements.

4. Data Processing Expense ($164 million in 2022)

• Encompasses costs associated with the bank's technology infrastructure and software systems.
• Approximately 2% of total expenses, highlighting the importance of technology in modern banking.
• Essential for maintaining operational efficiency and providing customers with seamless digital services.

5. Marketing and Advertising Expense ($112 million in 2022)

• Includes costs for advertising campaigns, promotional materials, and marketing initiatives.
• About 1% of total expenses, demonstrating the bank's focus on brand building and customer acquisition.
• Key in attracting new customers and differentiating the bank in a competitive market.

Other Significant Costs:

• Impairment Losses: Losses incurred on loans and other assets due to deterioration in creditworthiness.
• Provision for Loan Losses: Estimates of potential losses on future loans.
• Professional and Other Services: Fees paid to external consultants, legal counsel, and other professionals.
• Equipment and Software: Costs related to the acquisition and maintenance of technology equipment.

Estimated Annual Cost (2022)

Based on the above cost structure, The First Bancshares' estimated annual cost for 2022 is approximately $7.3 billion.

Sales Channels of The First Bancshares, Inc.

1. Branch Network

• Estimated Annual Sales: $4.8 billion
• Number of Branches: 175
• Location: Primarily in Illinois, Indiana, and Michigan

2. Online and Mobile Banking

• Estimated Annual Sales: $3.2 billion
• Customer Base: Over 400,000
• Features: Online account management, bill pay, mobile deposits, and remote check capture

3. Mortgage Lending

• Estimated Annual Sales: $2.6 billion
• Types of Loans: Home loans, construction loans, and refinancing
• Focus: Residential properties in the Midwest

4. Commercial Lending

• Estimated Annual Sales: $2.1 billion
• Target Market: Small businesses and mid-sized companies
• Loan Types: Term loans, lines of credit, and equipment financing

5. Wealth Management

• Estimated Annual Sales: $1.8 billion
• Services: Investment advisory, financial planning, and estate planning
• Target Clients: High-net-worth individuals and families

6. Treasury and Payment Services

• Estimated Annual Sales: $1.5 billion
• Services: Cash management, lockbox services, and merchant processing
• Target Customers: Businesses and organizations

7. Insurance

• Estimated Annual Sales: $1.2 billion
• Types of Insurance: Property and casualty, life, and health
• Distribution Channels: Through The First Bancshares' branches and independent agents

8. Other Sales Channels

• Non-interest income: $0.9 billion
• Sources: Service charges, ATM fees, debit card interchange, and other non-lending activities

Total Estimated Annual Sales: Approximately $17.7 billion

Customer Segments of The First Bancshares, Inc.

1. Commercial and Industrial Businesses (Estimated Annual Sales: $7.2 billion)

• Small businesses with annual revenues under $1 million
• Mid-sized businesses with annual revenues between $1 million and $50 million
• Large corporations with annual revenues over $50 million
• Non-profit organizations

2. Consumers (Estimated Annual Sales: $3.8 billion)

• Individuals with a variety of banking needs, including checking, savings, and lending services
• Families with a range of financial requirements, such as mortgages, consumer loans, and investments
• Seniors with specialized banking needs, such as estate planning and retirement accounts
• Students with financial needs, such as student loans and checking accounts

3. Wealth Management Clients (Estimated Annual Sales: $2.1 billion)

• High-net-worth individuals and families with complex financial needs
• Trust and estate planning services
• Investment management and financial advisory services
• Private banking services

4. Municipalities and Government Agencies (Estimated Annual Sales: $1.6 billion)

• Local governments, including cities, counties, and school districts
• State and federal government agencies
• Non-profit organizations funded by government grants

5. Real Estate (Estimated Annual Sales: $1.2 billion)

• Residential mortgages for homebuyers
• Commercial real estate loans for developers and investors
• Construction loans for commercial and residential projects

6. Other Services (Estimated Annual Sales: $0.9 billion)

• Insurance and brokerage services
• Technology solutions for businesses
• Employee benefits plans

Value Proposition of The First Bancshares

The First Bancshares, Inc. (FBHC) is a financial holding company with operations in Mississippi, Tennessee, Arkansas, and Alabama. The company's value proposition is based on the following key pillars:

1. Wide Range of Financial Products and Services:

• FBHC offers a comprehensive suite of banking, lending, and investment solutions to meet the diverse financial needs of individuals, businesses, and institutions.
• This includes checking and savings accounts, mortgages, commercial loans, wealth management, and trust services.

2. Local Presence and Customer-Centric Approach:

• FBHC has a strong local presence with over 150 branches and offices throughout its operating regions.
• The company emphasizes personal relationships with clients and a commitment to understanding their unique financial goals and aspirations.

3. Financial Stability and Performance:

• FBHC maintains a strong financial position with consistently high asset quality and capital ratios.
• The company has a long track record of profitability and steady dividend growth.

4. Technology-Enabled Banking:

• FBHC leverages technology to deliver convenient and innovative banking solutions to its customers.
• This includes mobile banking, online account access, and digital payment platforms.

5. Corporate Social Responsibility:

• FBHC is committed to giving back to the communities it serves through various philanthropic initiatives and partnerships.
• The company supports education, healthcare, and economic development efforts within its operating regions.

Specific Value Propositions for Different Customer Segments:

Individuals:

• Personalized financial advice and tailored solutions to help individuals reach their savings, investment, and retirement goals.
• Convenient banking options and savings accounts with competitive rates.
• Access to mortgages and home equity loans to finance their home ownership needs.

Businesses:

• Commercial lending solutions to support business growth and expansion.
• Treasury management services to optimize cash flow and streamline operations.
• Wealth management services to help business owners plan for the future.

Institutions:

• Investment services and asset management tailored to meet the specific needs of institutional investors.
• Custody and safekeeping services to protect and administer valuable assets.
• Trust services for estate planning and wealth management.

Conclusion:

The First Bancshares' value proposition centers around its comprehensive financial offerings, local presence, customer-centric approach, financial stability, technology-enabled banking, and corporate social responsibility. The company strives to provide customized solutions and exceptional service to meet the diverse financial needs of its customers across Mississippi, Tennessee, Arkansas, and Alabama.

The First Bancshares, Inc. (FBMS) is a financial holding company headquartered in Hattiesburg, Mississippi. It operates through its subsidiary, The First Bank, which provides a range of banking and financial services to individuals, businesses, and municipalities in Mississippi and Alabama.

Risk Factors

Credit Risk:

• Loan portfolio concentrated in commercial real estate, which is subject to market fluctuations and economic downturns.
• Exposure to borrowers with high leverage or weak credit profiles.
• Potential for loan defaults or impaired asset quality.

Interest Rate Risk:

• Assets with fixed interest rates and liabilities with variable interest rates create interest rate mismatch.
• Changes in interest rates can impact net interest income and profitability.

Liquidity Risk:

• Reliance on deposits for funding, which can be volatile.
• Limited access to alternative funding sources.
• Potential for liquidity strains during periods of financial stress.

Operational Risk:

• Technology failures or cyberattacks can disrupt operations and lead to financial losses.
• Internal control deficiencies or human error can result in errors or fraud.
• Compliance failures or regulatory penalties can damage reputation and financial performance.

Market Risk:

• Exposure to fluctuations in equity and fixed income markets.
• Changes in market sentiment or economic conditions can impact the value of investments.

Regulatory Risk:

• Heightened regulatory scrutiny and evolving regulatory requirements for banks.
• Potential for rule changes or enforcement actions that could increase operating costs or restrict business activities.

Reputation Risk:

• Negative publicity or regulatory actions can damage the company's reputation and customer confidence.
• Incidents of fraud or misconduct can erode trust and lead to financial losses.

Other Risks:

• Concentration in geographic markets, with a significant portion of operations in Mississippi and Alabama.
• Limited geographic diversification may increase exposure to regional economic downturns.
• Competition from larger and more diversified financial institutions.

Mitigation Measures

FBMS has implemented various risk management policies and procedures to mitigate these risks, including:

• Credit underwriting guidelines and risk-based pricing.
• Interest rate risk management strategies.
• Liquidity monitoring and contingency funding plans.
• Technology investments and cybersecurity controls.
• Compliance programs and internal audits.
• Market risk analysis and hedging strategies.
• Regulatory compliance and relationship management.

FBMS regularly monitors and assesses risks and adjusts risk management strategies as needed. The company's financial performance and risk profile are subject to ongoing evaluation by analysts and investors.