Business Wire | Apr 21, 2021 08:45PM EDT

First Bancshares, Inc. Reports Results for First Quarter ended March 31, 2021; Increases Quarterly Dividend 8%

Apr. 22, 2021

HATTIESBURG, Miss.--(BUSINESS WIRE)--Apr. 22, 2021--The First Bancshares, Inc. ("FBMS" or "the Company") (NASDAQ: FBMS), holding company for The First, A National Banking Association, (www.thefirstbank.com) reported today net income available to common shareholders for the quarter ended December 31, 2020.

Highlights for the Quarter:

* Net income available to common shareholders totaled $16.6 million for the quarter ended March 31, 2021, representing an increase of $1.3 million, or 8.5%, compared to $15.3 million for the quarter ended December 31, 2020. * Net income available to common shareholders totaled $16.6 million for the quarter ended March 31, 2021, an increase of $8.3 million, or 100.3%, compared to $8.3 million for the quarter ended March 31, 2020. * Pre-tax, pre-provision operating earnings (non-GAAP) which excludes acquisition charges increased 20.2% to $21.4 million for the quarter ended March 31, 2021 as compared to $17.8 million for the first quarter of 2020. * Pre-tax, pre-provision operating earnings (non-GAAP) which excludes acquisition charges, treasury awards, gains from bargain purchase of Southwest Georgia Financial Corporation ('SGB") increased 3.3% to $21.4 million for the quarter ended March 31, 2021 as compared to $20.7 million for the fourth quarter of 2020. * Provision for credit losses totaled $0 for the quarter as compared to $3.5 million for the sequential quarter comparison and $7.1 million for the first quarter of 2020. * During the quarter, the Company purchased 165,623 shares of stock under the share buyback program. * As of March 31, 2021, total COVID related modifications were $45.7 million, representing 1.5% of the loan portfolio and down from a peak of $676 million or 21% of the loan portfolio. For additional details related to the effects of COVID-19, see the investor presentation filed and available under presentations and press releases included in the investor relations section of the company's website: www.thefirstbank.com. * During the first quarter of 2021, the Company adopted the Current Expected Credit Losses ("CECL") methodology for estimating credit losses effective January 1, 2021. * Added a commercial banking group in the Baton Rouge market and 4 mortgage originators in the panhandle of Florida and the South MS markets

M. Ray "Hoppy" Cole, President and Chief Executive Officer, commented, "Our company produced a strong quarter with improved profitability both year over year and in sequential quarter comparison. Our markets continue to show signs of recovery from the effects of the pandemic. We are encouraged by the level of loan demand and the amount of our loan originations during the first quarter particularly in our construction portfolio however the near term effects were muted by pay downs in our residential real estate and Paycheck Protection Program ("PPP") portfolio's. We continue to add production staff in our key markets and are excited about the recent addition of our new commercial banking group in Baton Rouge and the additional mortgage originators we added during the quarter."

Quarterly Earnings

Net income available to common shareholders totaled $16.6 million for the quarter ended March 31, 2021, an increase of $1.3 million, or 8.5%, compared to $15.3 million for the quarter ended December 31, 2020. In sequential quarter comparison, the Company recorded an additional $0.8 million bargain purchase gain due to a measurement period adjustment related to the tax impact of the CARES Act on the acquisition of SGB as well as income in the form of a financial assistance grant from the U.S. Department of Treasury of $0.7 million, net of tax during the quarter ended December 31, 2020. During the fourth quarter of 2020, the Company also recorded additional expense related to unused vacation paid to employees as well as expense related to the early vesting of restricted stock grants to the Company's directors in the amount of $0.7 million.

Net income available to common shareholders totaled $16.6 million for the quarter ended March 31, 2021, an increase of $8.3 million, or 100.3%, compared to $8.3 million for the quarter ended March 31, 2020.

Provision for credit losses totaled $0 for the quarter ended March 31, 2021, a decrease of $7.1 million, or $5.5 million net of tax, as compared to $7.1 million for the first quarter of 2020 and a decrease of $3.5 million, or $2.7 million net of tax, as compared to $3.5 million for the fourth quarter of 2020.

Earnings Per Share

For the first quarter of 2021, fully diluted earnings per share were $0.79, compared to $0.44 for the first quarter of 2020. The provision for loan losses expense of $7.1 million, or $5.5 million net of tax, for the quarter ended March 31, 2020, which was primarily attributable to the COVID-19 pandemic, represented $0.29 in fully diluted earnings per share.

For the first quarter of 2021, fully diluted earnings per share were $0.79, compared to $0.72 for the fourth quarter of 2020. The bargain purchase and sale of land gains along with the financial assistance grant recognized during the quarter ended December 31, 2020 accounted for $0.08 in fully diluted earnings per share. Provision for loan loss expense of $3.5 million for the fourth quarter of 2020 accounted for $0.13 in fully diluted earnings per share.

Fully diluted earnings per share for the quarter ended March 31, 2021 include the purchase by the Company of 165,623 shares during the first quarter of 2021.

Balance Sheet

Consolidated assets increased $290.0 million to $5.443 billion at March 31, 2021 from $5.153 billion at December 31, 2020. PPP loans at March 31, 2021 were $221.7 million, down $17.9 million from December 31, 2020.

Total average loans were $3.097 billion for the quarter ended March 31, 2021, as compared to $3.154 billion for the quarter ended December 31, 2020, and $2.602 billion for the quarter ended March 31, 2020, representing a decrease of $56.4 million, or 1.8%, for the sequential quarter comparison, and an increase of $494.8 million, or 19.0%, in prior year quarterly comparison. The acquisition of SGB accounted for $423.0 million, net of fair value marks, of the total increase in average loans as compared to the first quarter of 2020. PPP loans averaged $235.4 million for the quarter ended March 1, 2021 and averaged $250.5 million for the quarter ended December 31, 2020.

Average loans decreased $56.4 million, or 1.8% for the sequential quarter comparison of which $15.1 million were related to a decrease in PPP loans.

Excluding the acquired loans, average loans increased $71.8 million, or 2.8% as compared to the quarter ended March 31, 2020. Average PPP loans increased $235.4 million as compared to the quarter ended March 31, 2020.

Total average deposits were $4.410 billion for the quarter ended March 31, 2021, as compared to $4.195 billion for the quarter ended December 31, 2020, and $3.187 billion for the quarter ended March 31, 2020, representing an increase of $214.8 million, or 5.1%, for the sequential quarter comparison, and an increase of $1.223 billion, or 38.4%, in prior year quarterly comparison. The acquisition of SGB accounted for $536.2 million of the total increase in average deposits as compared to the first quarter of 2020.

Average deposits increased $214.8 million, or 5.1% for the sequential quarter comparison of which $149.8 million is related to the seasonality of our public fund portfolio.

Excluding the acquired deposits, average deposits increased $687.1 million, or 21.6% as compared to the quarter ended March 31, 2020 of which $284.0 is related to the seasonality of our public fund portfolio.

The Company implemented Deposit Reclassification at the beginning of 2020. This program reclassifies noninterest bearing deposits and NOW deposit balances to money market accounts. This program reduces our reserve balance required at the Federal Reserve Bank of Atlanta which provides additional funds for liquidity and lending. At quarter end March 31, 2021, $695.8 million in noninterest deposit balances and $859.4 million in NOW deposit accounts were reclassified as money market accounts.

Asset Quality

Nonperforming assets totaled $36.8 million at March 31, 2021, a decrease of $5.4 million compared to $42.3 million at December 31, 2020 and a decrease of $10.3 million compared to $47.1 million at March 31, 2020. Nonaccrual loans decreased $3.8 million as compared to December 31, 2020 and decreased $7.8 million as compared to March 31, 2020.

The ratio of the allowance for credit losses (ACL) to total loans was 1.07% at March 31, 2021, 1.15% at December 31, 2020 and 0.80% at March 31, 2020. The ratio of annualized net charge-offs (recoveries) to total loans was 0.47% for the quarter ended March 31, 2021 compared to 0.25% for the quarter ended December 31, 2020 and 0.03% for the quarter ended March 31, 2020. The increase in net charge-offs were related to the charge down of nonperforming loans that were previously fully impaired in the allowance for loan losses model.

Effective January 1, 2021, the Company adopted the CECL methodology for estimating credit losses. This adoption resulted in a net $0.4 million increase to the ACL and an unfunded commitment reserve of $0.7 million.

First Quarter 2021 vs. First Quarter 2020 Earnings Comparison

Net income available to common shareholders for the first quarter of 2021 totaled $16.6 million compared to $8.3 million for the first quarter of 2020, an increase of $8.3 million or 100.3%. In comparing the quarters, the increase in net income available to common shareholders was largely attributed to a decrease in provision for credit losses expense in the amount of $7.1 million, or $5.5 million net of tax. The Company recorded $0 in provision for credit losses expense for the first quarter 2021 and recorded $7.1 million for the first quarter 2020.

Net interest income for the first quarter of 2021 was $39.2 million, an increase of $5.2 million when compared to the first quarter of 2020. The increase was due to interest income earned on a higher volume of loans. Fully tax equivalent ("FTE") net interest income (non-GAAP) totaled $39.9 million and $34.5 million for the first quarter of 2021 and 2020, respectively. FTE net interest income (non-GAAP) increased $5.4 million in the prior year quarterly comparison mainly due to increased loan volume. Purchase accounting adjustments decreased $1.2 million for the first quarter comparisons. First quarter of 2021 FTE net interest margin (non-GAAP) was 3.34% which included 9 basis points related to purchase accounting adjustments compared to 3.93% for the same quarter in 2020, which included 28 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin (non-GAAP) decreased 40 basis points in prior year quarterly comparison.

Non-interest income increased $3.0 million for the first quarter of 2021 as compared to the first quarter of 2020. Mortgage income increased $1.6 million in the prior year quarterly comparison.

First quarter 2021 non-interest expense was $27.3 million, an increase of $3.8 million, or 16.3% as compared to the first quarter of 2020. Excluding the net decrease in acquisition charges of $0.7 million for the quarterly comparison, non-interest expense increased $4.6 million in the first quarter of 2021, of which $2.0 million was attributable to the operations of SGB, as compared to first quarter of 2020.

Investment securities totaled $1.157 billion, or 21.3% of total assets at March 31, 2021, versus $788.9 million, or 19.4% of total assets at March 31, 2020. The average balance of investment securities increased $282.1 million in the prior year quarterly comparison, primarily as a result of the acquisition of SGB. The average tax equivalent yield on investment securities (non-GAAP) decreased 62 basis points to 2.32% from 2.94% in the prior year quarterly comparison. The investment portfolio had a net unrealized gain of $21.7 million at March 31, 2021 as compared to a net unrealized gain of $21.4 million at March 31, 2020.

The FTE average yield on all earning assets (non-GAAP) decreased 94 basis points in prior year quarterly comparison, from 4.78% for the first quarter of 2020 to 3.84% for the first quarter of 2021. Interest expense on average interest bearing liabilities decreased 38 basis points from 0.92% for the first quarter of 2020 to 0.54% for the first quarter of 2021. Cost of all deposits averaged 36 basis points for the first quarter of 2021 compared to 76 basis points for the first quarter of 2020.

First Quarter 2021 vs Fourth Quarter 2020 Earnings Comparison

Net income available to common shareholders for the first quarter of 2021 increased $1.3 million to $16.6 million compared to $15.3 million for the fourth quarter of 2020. During the fourth quarter of 2020, the Company recorded a bargain purchase gain in the amount of $0.8 million, net of tax and received a financial assistance grant from the U. S. Department of Treasury of $0.7 million, net of tax.

Net interest income for the first quarter of 2021 was $39.2 million as compared to $39.5 million for the fourth quarter of 2020, a decrease of $0.2 million which is attributed to a decrease in purchase accounting adjustments of $0.6 million. FTE net interest income (non-GAAP) decreased $0.2 million to $39.9 million from $40.1 million in sequential-quarter comparison. First quarter 2021 FTE net interest margin (non-GAAP) of 3.34% included 9 basis points related to purchase accounting adjustments compared to 3.51% for the fourth quarter in 2020, which included 16 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin (non-GAAP) decreased 10 basis point in sequential quarter comparison.

Investment securities totaled $1.157 billion, or 21.3% of total assets at March 31, 2021, versus $1.050 billion, or 20.4% of total assets at December 31, 2020. The average balance of investment securities increased $46.1 million in sequential-quarter comparison. The average tax equivalent yield on investment securities (non-GAAP) decreased 13 basis points to 2.32% from 2.45% in sequential-quarter comparison. The investment portfolio had a net unrealized gain of $21.7 million at March 31, 2021 as compared to a net unrealized gain of $34.6 million at December 31, 2020.

The FTE average yield on all earning assets (non-GAAP) decreased in sequential-quarter comparison from 4.04% to 3.84%. Interest expense on average interest bearing liabilities decreased 4 basis points from 0.58% for the fourth quarter of 2020 to 0.54% for the first quarter of 2021. Cost of all deposits averaged 36 basis points for the first quarter of 2021 compared to 39 basis points for the fourth quarter of 2020.

Excluding the treasury awards and bargain purchase gain, non-interest income increased $0.3 million in sequential-quarter comparison resulting from increased other charge and fees in the amount of $0.5 million.

Non-interest expense for the first quarter of 2021 was $27.3 million compared to $27.9 million for the fourth quarter of 2020. Excluding acquisition charges, non-interest expense decreased $0.6 million. During the fourth quarter of 2020, the Company recorded additional expense related to unused vacation paid out to employees as well as expense related to the early vesting of restricted stock grants to the Company's directors in the amount of $0.7 million.

Declaration of Cash Dividend

The Company announced that its Board of Directors declared a cash dividend of $0.14 per share to be paid on its common stock on May 25, 2021 to shareholders of record as of the close of business on May 10, 2021.

About The First Bancshares, Inc.

The First Bancshares, Inc., headquartered in Hattiesburg, Mississippi, is the parent company of The First, A National Banking Association ("The First"). Founded in 1996, The First has operations in Mississippi, Louisiana, Alabama, Florida and Georgia. The Company's stock is traded on the NASDAQ Global Market under the symbol FBMS. Information is available on the Company's website: www.thefirstbank.com.

Non-GAAP Financial Measures

Our accounting and reporting policies conform to generally accepted accounting principles ("GAAP") in the United States and prevailing practices in the banking industry. However, certain non-GAAP measures are used by management to supplement the evaluation of our performance. This press release includes operating efficiency ratio, pre-tax, pre-provision operating earnings, diluted operating earnings per common share, fully tax equivalent net interest income, fully tax equivalent net interest margin, core net interest margin, average tax equivalent yield on investment securities, fully tax equivalent average yield on all earning assets, total tangible common equity, tangible book value per common share and certain ratios derived from these non-GAAP financial measures. The Company believes that the non-GAAP financial measures included in this press release allow management and investors to understand and compare results in a more consistent manner for the periods presented in this press release. Non-GAAP financial measures should be considered supplemental and not a substitute for the Company's results reported in accordance with GAAP for the periods presented, and other bank holding companies may define or calculate these measures differently. These non-GAAP financial measures should not be considered in isolation and do not purport to be an alternative to net income, earnings per share, net interest income, book value or other GAAP financial measures as a measure of operating performance. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure is provided in this press release following the Condensed Consolidated Financial Information (unaudited).

Forward Looking Statements

This news release 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 Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. Such statements can generally be identified by such words as "believes," "anticipates," "expects," "may," "will," "assumes," "should," "predicts," "could," "would," "intends," "targets," "estimates," "projects," "plans," "potential," "positioned" and other similar words and expressions of the future or otherwise regarding the outlook for the Company's future business and financial performance and/or the performance of the banking industry and economy in general. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risk and uncertainties which may cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, the Company's management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. Factors that might cause such differences include, but are not limited to: (1) competitive pressures among financial institutions increasing significantly; (2) changes in economic or political conditions, either nationally or locally, particularly in areas in which the Company conducts operations; (3) interest rate risk; (4) changes in applicable laws, rules, or regulations, including changes to statutes, regulations or regulatory policies or practices as a result of, or in response to COVID-19; (5) risks related to the Company's recently completed acquisitions, including that the anticipated benefits from the recently completed acquisitions are not realized in the time frame anticipated or at all as a result of changes in general economic and market conditions or other unexpected factors or events; (6) changes in management's plans for the future; (7) credit risk associated with our lending activities; changes in interest rates, loan demand, real estate values, or competition; (8) changes in accounting principles, policies, or guidelines; (9) adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company's participation in and execution of government programs related to the COVID-19 pandemic; (10) the impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations; (11) potential increases in the provision for loan losses resulting from the COVID-19 pandemic; and (12) other general competitive, economic, political, and market factors, including those affecting our business, operations, pricing, products, or services. These and other factors that could cause results to differ materially from those described in the forward-looking statements, as well as a discussion of the risks and uncertainties that may affect our business, can be found in our Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission, which are available on the SEC's website, http://www.sec.gov. Undue reliance should not be placed on forward-looking statements. The Company disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments.

Statements about the potential effects of the COVID-19 pandemic on the Company's assets, business, liquidity, financial condition, prospects, and results of operations may constitute forward-looking statements and are subject to the risks that the actual effects may differ, possibly materially, from what is reflected in these forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the depth, dispersion and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on customers, employees, third parties and the Company.

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(Dollars in thousands except per share data)

Quarter Quarter Quarter Quarter QuarterEARNINGS DATA Ended 3/31 Ended Ended Ended Ended /21 12/31/20 9/30/20 6/30/20 3/31/20

Total Interest Income $ 45,187 $ 45,613 $ 46,337 $ 45,799 $ 41,598

Total Interest Expense 5,958 6,147 6,365 6,619 7,533

Net Interest Income 39,229 39,466 39,972 39,180 34,065

FTE net interest income* 39,884 40,119 40,608 39,772 34,526

Provision for credit - 3,523 6,921 7,606 7,102losses**

Non-interest income 9,472 10,928 8,794 15,680 6,474

Non-interest expense 27,264 27,897 26,935 28,070 23,439

Earnings before income 21,437 18,974 14,910 19,184 9,998taxes

Income tax expense 4,793 3,639 2,993 2,241 1,687

Net income available to $ 16,644 $ 15,335 $ 11,917 $ 16,943 $ 8,311common shareholders





PER COMMON SHARE DATA

Basic earnings per share $ 0.79 $ 0.72 $ 0.56 $ 0.79 $ 0.44

Diluted earnings per 0.79 0.72 0.55 0.79 0.44share

Diluted earnings per 0.79 0.65 0.56 0.52 0.47share, operating*

Quarterly dividends per .13 .12 .10 .10 .10share

Book value per common 30.64 30.54 29.82 29.34 29.49share at end of period

Tangible book value percommon share at period 21.76 21.65 20.93 20.40 19.52end*

Market price at end of 36.61 30.88 20.97 22.50 19.07period

Shares outstanding at 21,018,744 21,115,009 21,408,017 21,395,258 18,851,955period end

Weighted average shares outstanding:

Basic 21,009,088 21,308,838 21,405,309 21,341,913 18,818,115

Diluted 21,200,558 21,421,367 21,544,040 21,437,180 18,942,129





AVERAGE BALANCE SHEET DATA

Total assets $5,337,264 $5,136,136 $5,085,340 $4,913,620 $3,990,493

Loans and leases 3,097,145 3,153,543 3,165,653 3,156,524 2,602,340

Total deposits 4,410,288 4,195,492 4,212,410 4,069,239 3,186,943

Total common equity 644,923 640,828 632,527 607,127 547,309

Total tangible common 457,725 451,011 441,635 423,966 358,889equity*





SELECTED RATIOS

Annualized return on avg 1.25% 1.19% 0.94% 1.38% 0.83%assets (ROA)

Annualized return on avg 1.25% 1.08% 0.95% 0.91% 0.89%assets, operating*

Annualized pre-tax,pre-provision, 1.61% 1.62% 1.74% 1.75% 1.79%operating*

Annualized return on avgcommon equity, 10.32% 8.63% 7.65% 7.40% 6.50%operating*

Annualized return on avgtangible common equity, 14.54% 12.27% 10.95% 10.60% 9.91%oper*

Average loans to average 70.23% 75.17% 75.15% 77.57% 81.66%deposits

FTE Net Interest Margin* 3.34% 3.51% 3.58% 3.63% 3.93%

Efficiency Ratio 55.24% 54.65% 54.52% 50.62% 57.17%

Efficiency Ratio, 55.24% 56.54% 54.04% 53.91% 55.36%operating*

*See reconciliation ofNon-GAAP financial measures

CREDIT QUALITY

Allowance for creditlosses (ACL) as a % of 1.07% 1.15% 1.09% 0.88% 0.80%total loans**

Nonperforming assets to 7.52% 8.57% 9.31% 9.84% 12.12%tangible equity + ACL

Nonperforming assets to 1.20% 1.35% 1.42% 1.44% 1.81%total loans + OREO

Annualized QTD netcharge-offs (recoveries) 0.47% 0.25% 0.09% 0.04% 0.03%to total loans

**Beginning January 1,2021, calculation isbased on CECLmethodology. Prior to January 1, 2021,calculation was basedupon incurred lossmethodology

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

Mar 31, Dec 31, Sept 30, June 30, Mar 31,BALANCE SHEET 2020 2020 2020 2020 2021

Assets

Cash and cash $ 813,257 $ 562,554 $ 603,736 $ 539,125 $ 286,759equivalents

Securities 1,135,189 1,022,182 957,458 927,205 762,977available-for-sale

Other investments 22,137 27,475 27,461 26,059 25,911

Total investment 1,157,326 1,049,657 984,919 953,264 788,888securities

Loans held for sale 15,119 21,432 22,482 18,632 13,288

Total loans 3,055,093 3,123,678 3,155,932 3,171,535 2,602,288

Allowance for credit (32,663) (35,820) (34,256) (28,064) (20,804)losses

Loans, net 3,022,430 3,087,858 3,121,676 3,143,471 2,581,484

Premises and equipment 121,934 123,450 124,875 125,053 108,013

Other Real Estate Owned 5,769 5,802 5,202 5,471 6,974

Goodwill and other 186,648 187,700 190,380 191,431 187,927intangibles

Other assets 120,315 114,307 110,889 108,458 88,468

Total assets $5,442,798 $5,152,760 $5,164,159 $5,084,905 $4,061,801



Liabilities and Shareholders' Equity

Non-interest bearing $ 632,485 $ 571,079 $ 482,236 $ 486,039 $ 340,606deposits^

Interest-bearing 3,987,812 3,644,201 3,746,978 3,730,851 2,937,188deposits

Total deposits 4,620,297 4,215,280 4,229,214 4,216,890 3,277,794

Borrowings 4,466 114,647 115,827 116,005 116,180

Subordinated debentures 144,572 144,592 144,709 80,756 80,717

Other liabilities 29,514 33,426 36,040 43,459 31,184

Total liabilities 4,798,849 4,507,945 4,525,790 4,457,110 3,505,875

Total shareholders' 643,949 644,815 638,369 627,795 555,926equity

Total liabilities and $5,442,798 $5,152,760 $5,164,159 $5,084,905 $4,061,801shareholders' equity

^Reclassified $695,751 to interest-bearing deposits for Mar 31, 2021FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

Three Months EndedEARNINGS STATEMENT 3/31/ 12/31/ 9/30/ 6/30/ 3/31/ 21 20 20 20 20

Interest Income:

Loans, including fees $ $ $ $ $ 38,587 38,472 39,344 39,184 34,290

Investment securities 5,526 5,606 5,309 5,187 5,304

Accretion of purchase accounting 1,026 1,494 1,655 1,409 1,715adjustments

Other interest income 48 41 29 19 289

Total interest income 45,187 45,613 46,337 45,799 41,598

Interest Expense:

Deposits 3,910 4,262 5,110 5,967 6,034

Borrowings 288 260 265 224 917

Subordinated debentures 1,821 1,823 1,188 1,176 1,203

Accretion of purchase accounting (61) (198) (198) (748) (621)adjustments

Total interest expense 5,958 6,147 6,365 6,619 7,533

Net interest income 39,229 39,466 39,972 39,180 34,065

Provision for credit losses - 3,523 6,921 7,606 7,102

Net interest income after provision for 39,229 35,943 33,051 31,574 26,963credit losses



Non-interest Income:

Service charges on deposit accounts 1,761 1,925 1,780 1,597 1,914

Mortgage Income 3,162 3,270 2,961 2,646 1,567

Interchange Fee Income 2,644 2,562 2,491 2,395 1,986

Gain (loss) on securities, net 20 3 32 73 174

Financial Assistance Award/Bank Enterprise - 968 - - -Award

Bargain Purchase Gain and Gain on Sale of - 812 - 7,643 -Land

Other charges and fees 1,885 1,388 1,530 1,326 833

Total non-interest income 9,472 10,928 8,794 15,680 6,474



Non-interest expense:

Salaries and employee benefits 16,054 16,642 15,494 15,866 13,228

Occupancy expense 3,879 3,890 3,826 3,200 2,918

FDIC/OCC premiums 494 520 447 237 147

Marketing 160 71 24 25 213

Amortization of core deposit intangibles 1,052 1,052 1,052 1,052 938

Other professional services 934 764 990 984 874

Acquisition charges - 41 238 2,295 740

Other non-interest expense 4,691 4,917 4,864 4,411 4,381

Total Non-interest expense 27,264 27,897 26,935 28,070 23,439

Earnings before income taxes 21,437 18,974 14,910 19,184 9,998

Income tax expense 4,793 3,639 2,993 2,241 1,687

Net income available to common $ $ $ $ $shareholders 16,644 15,335 11,917 16,943 8,311





Diluted earnings per common share $ 0.79 $ 0.72 $ 0.55 $ 0.79 $ 0.44

Diluted earnings per common share, $ 0.79 $ 0.65 $ 0.56 $ 0.52 $ 0.47operating*

*See reconciliation of Non-GAAP financial measures

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

Year to DateEARNINGS STATEMENT 2021 2020

Interest Income:

Loans, including fees $ 38,587 $ 34,290

Investment securities 5,526 5,304

Accretion of purchase accounting adjustments 1,026 1,715

Other interest income 48 289

Total interest income 45,187 41,598

Interest Expense:

Deposits 3,910 6,034

Borrowings 288 917

Subordinated debentures 1,821 1,203

Amortization of purchase accounting adjustments (61) (621)

Total interest expense 5,958 7,533

Net interest income 39,229 34,065

Provision for credit losses - 7,102

Net interest income after provision for credit losses 39,229 26,963



Non-interest Income:

Service charges on deposit accounts 1,761 1,914

Mortgage Income 3,162 1,567

Interchange Fee Income 2,644 1,986

Gain (loss) on securities, net 20 174

Financial Assistance Award/Bank Enterprise Award - -

Bargain Purchase Gain and Gain on Sale of Land - -

Other charges and fees 1,885 833

Total non-interest income 9,472 6,474



Non-interest expense:

Salaries and employee benefits 16,054 13,228

Occupancy expense 3,879 2,918

FDIC/OCC premiums 494 147

Marketing 160 213

Amortization of core deposit intangibles 1,052 938

Other professional services 934 874

Acquisition charges - 740

Other non-interest expense 4,691 4,381

Total Non-interest expense 27,264 23,439

Earnings before income taxes 21,437 9,998

Income tax expense 4,793 1,687

Net income available to common shareholders $ 16,644 $ 8,311





Diluted earnings per common share $ 0.79 $ 0.44

Diluted earnings per common share, operating* $ 0.79 $ 0.47

*See reconciliation of Non-GAAP financial measures



FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(Dollars in thousands)

COMPOSITION OF Mar 31, Percent Dec 31, Sept 30, June 30, Mar 31, PercentLOANS 2021 of 2020 2020 2020 2020 of Total Total

Commercial,financial and $ 532,122 17.3% $ 561,342 $ 576,812 $ 629,497 $ 327,979 12.5%agricultural

Real estate - 304,457 9.9% 301,283 330,070 337,337 334,707 12.8%construction

Real estate - 1,217,505 39.7% 1,214,602 1,191,514 1,163,897 1,048,854 40.1%commercial

Real estate - 944,032 30.7% 987,313 999,381 978,372 828,378 31.7%residential

Lease Financing 3,382 0.1% 2,733 2,478 2,811 3,526 0.1%Receivable

Obligations ofStates & 14,996 0.5% 15,369 13,345 17,010 18,218 0.7%subdivisions

Consumer 38,599 1.3% 41,036 42,332 42,611 40,626 1.6%

Loans held for 15,119 0.5% 21,432 22,482 18,632 13,288 0.5%sale

Total loans $3,070,212 100% $3,145,110 $3,178,414 $3,190,167 $2,615,576 100%



COMPOSITION OF Mar 31, Percent Dec 31, Sept 30, June 30, Mar 31, PercentDEPOSITS 2021 of 2020 2020 2020 2020 of Total Total

Noninterest $ 632,485 13.7% $571,079 $482,236 $486,039 $340,606 10.4%bearing^

NOW and other^ 702,766 15.2% 664,626 658,453 601,195 478,526 14.6%

Money Market/ 2,734,873 59.2% 2,398,526 2,456,504 2,451,991 1,826,973 55.7%Savings^

Time Deposits ofless than 419,556 9.0% 439,101 473,265 499,406 462,808 14.1%$250,000

Time Deposits of 130,617 2.9% 141,948 158,756 178,259 168,881 5.2%$250,000 or more

Total Deposits $4,620,297 100% $4,215,280 $4,229,214 $4,216,890 $3,277,794 100%



Deposits Without Mar 31, Percent Dec 31, Sept 30, June 30, Mar 31, PercentReclassification 2021 of 2020 2020 2020 2020 of^ Total Total

Noninterest $1,328,236 28.7% $1,185,980 $1,195,042 $1,189,766 $ 749,939 22.9%bearing

Now and other 1,562,119 33.8% 1,347,778 1,335,798 1,347,324 1,122,027 34.2%

Money Market/ 1,179,769 25.6% 1,100,473 1,066,353 1,002,135 774,139 23.6%Savings

Time Deposits ofless than 419,556 9.0% 439,101 473,265 499,406 462,808 14.1%$250,000

Time Deposits of 130,617 2.9% 141,948 158,756 178,259 168,881 5.2%$250,000 or more

Total Deposits $4,620,297 100% $4,215,280 $4,229,214 $4,216,890 $3,277,794 100%



ASSET QUALITY Mar 31, Dec 31, Sept 30, June 30, Mar 31, DATA 2021 2020 2020 2020 2020

Nonaccrual loans $ 29,981 $ 33,774 $ 37,300 $ 39,201 $ 37,751

Loans past due 1,079 2,692 2,396 1,009 2,393 90 days and over

Totalnonperforming 31,060 36,466 39,696 40,210 40,144 loans

Other real 5,769 5,802 5,202 5,471 6,974 estate owned

Nonaccrual - - - - - securities

Totalnonperforming $ 36,829 $42,268 $44,898 $45,681 $ 47,118 assets



Nonperformingassets to total 0.68% 0.82% 0.87% 0.90% 1.16% assets

Nonperformingassets to total 1.20% 1.35% 1.42% 1.44% 1.81% loans + OREO

ACL tononperforming 105.16% 98.23% 86.30% 69.79% 51.82% loans

ACL to total 1.07% 1.15% 1.09% 0.88% 0.80% loans



Qtr-to-date netcharge-offs $ 3,553 $ 1,959 $ 729 $ 346 $ 205 (recoveries)

Annualized QTDnet chg-offs 0.47% 0.25% 0.09% 0.04% 0.03% (recs) to loans

FIRST BANCSHARES, INC and SUBSIDIARIESCondensed Consolidated Financial Information (unaudited)(in thousands) Yield Three Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months EndedAnalysis March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Tax Tax Tax Tax Tax Avg Equivalent Yield Avg Equivalent Yield Avg Equivalent Yield Avg Equivalent Yield Avg Equivalent Yield / / / / / Balance interest Rate Balance interest Rate Balance interest Rate Balance interest Rate Balance interest Rate Taxable securities $699,585 $3,591 2.05% $659,243 $3,678 2.23% $616,168 $3,432 2.23% $605,626 $3,439 2.27% $560,613 $3,944 2.81%

Tax-exemptsecurities 367,322 2,590 2.82% 361,529 2,581 2.86% 341,550 2,513 2.94% 300,922 2,340 3.11% 224,212 1,821 3.25%

Total investmentsecurities 1,066,907 6,181 2.32% 1,020,772 6,259 2.45% 957,718 5,945 2.48% 906,548 5,779 2.55% 784,825 5,765 2.94%

in other banks 614,283 48 0.03% 404,069 41 0.04% 413,786 29 0.03% 321,559 19 0.02% 129,978 289 0.89%

Loans 3,097,145 39,613 5.12% 3,153,543 39,966 5.07% 3,165,653 40,999 5.18% 3,156,524 40,593 5.14% 2,602,340 36,005 5.53%

Total Interestearning assets 4,778,335 45,842 3.84% 4,578,384 46,266 4.04% 4,537,157 46,973 4.14% 4,384,631 46,391 4.23% 3,517,143 42,059 4.78%

Other assets 558,929 557,752 548,183 528,989 473,350

Total assets $5,337,264 $5,136,136 $5,085,340 $4,913,620 $3,990,493

Interest-bearingliabilities:Deposits $4,172,326 $ 3,849 0.37% $3,971,379 $ 4,064 0.41% $3,960,054 $4,912 0.50% $3,746,535 $5,219 0.56% $3,042,529 $5,413 0.71%

Borrowed Funds 100,143 288 1.15% 115,430 260 0.90% 115,935 265 0.91% 116,270 224 0.77% 145,267 917 2.53%

Subordinateddebentures 144,590 1,821 5.04% 144,676 1,823 5.04% 81,470 1,188 5.83% 80,736 1,176 5.83% 80,697 1,203 5.96%

Total interestbearing 4,417,059 5,958 0.54% 4,231,485 6,147 0.58% 4,157,459 6,365 0.61% 3,943,541 6,619 0.67% 3,268,493 7,533 0.92%liabilitiesOther liabilities 275,282 263,823 295,354 362,952 174,691

Shareholders' 644,923 640,828 632,527 607,127 547,309equityTotal liabilitiesandshareholders'equity $5,337,264 $5,136,136 $5,085,340 $4,913,620 $3,990,493

Net interestincome (FTE)* $39,884 3.30% $40,119 3.46% $40,608 3.53% $39,772 3.56% $34,526 3.86%

Net interest margin (FTE)* 3.34% 3.51% 3.58% 3.63% 3.93%

Core net interestmargin* 3.25% 3.35% 3.41% 3.42% 3.65%

*See reconciliation for Non-GAAP financial measuresFIRST BANCSHARES, INC and SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measures (unaudited)

(in thousands except per share data)

Three Months Ended

Mar 31, Dec 31, Sept 30, June 30, Mar 31, 2021 2020 2020 2020 2020Per Common Share Data

Book value per common $ 30.64 $ 30.54 $ 29.82 $ 29.34 $ 29.49share

Effect of intangible 8.88 8.89 8.89 8.94 9.97assets per share

Tangible book value $ 21.76 $ 21.65 $ 20.93 $ 20.40 $ 19.52per common share



Diluted earnings per $ 0.79 $ 0.72 $ 0.55 $ 0.79 $ 0.44share

Effect of acquisition - 0.01 0.01 0.11 0.04charges

Tax on acquisition - - - (0.03) (0.01)charges

Effect of bargainpurchase gain and gain - (0.04) - (0.36) -on sale of land

Tax on gain on sale of - - - 0.01 -land

Effect of Treasury - (0.05) - - -awards

Tax on Treasury awards - 0.01 - - -

Diluted earnings per $ 0.79 $ 0.65 $ 0.56 $ 0.52 $ 0.47share, operating



Year to Date

2021 2020

Diluted earnings per $ 0.79 $ 0.44 share

Effect of acquisition - 0.04 charges

Tax on acquisition - (0.01) charges

Effect of bargainpurchase gain and gain - - on sale of land

Tax on gain on sale of - - land

Effect of Treasury - - awards

Tax on Treasury awards - -

Diluted earnings per $ 0.79 $ 0.47 share, operating



Year to Date

2021 2020

Net income available $ 16,644 $ 8,311 to common shareholders

Acquisition charges - 740

Tax on acquisition - (164) charges

Bargain purchase gainand gain on sale of - - land

Tax on gain on sale of - - land

Treasury awards - -

Tax on Treasury awards - -

Net earnings availableto common $ 16,644 $ 8,887 shareholders,operating



Three Months Ended

Average Balance Sheet Mar 31, Dec 31, Sept 30, June 30, Mar 31,Data 2021 2020 2020 2020 2020

Total average assets A $5,337,264 $5,136,136 $5,085,340 $4,913,620 $3,990,493

Total average earning B 4,778,335 $4,578,384 $4,537,157 $4,384,631 $3,517,143assets

'

Common Equity C $ 644,923 $ 640,828 $ 632,527 $ 607,127 $ 547,309

Less intangible assets 187,148 189,817 190,892 183,161 188,420

Total Tangible common D $ 457,775 $ 451,011 $ 441,635 $ 423,966 $ 358,889equity





Three Months Ended

Net Interest Income Mar 31, Dec 31, Sept 30, June 30, Mar 31,Fully Tax Equivalent 2021 2020 2020 2020 2020

Net interest income E $ 39,229 $ 39,466 $ 39,972 $ 39,180 $ 34,065

Tax-exempt investment (1,935) (1,928) (1,877) (1,748) (1,360)income

Taxable investment 2,590 2,581 2,513 2,340 1,821income

Net Interest Income F $ 39,884 $ 40,119 $ 40,608 $ 39,772 $ 34,526Fully Tax Equivalent



Annualized Net EInterest Margin / 3.28% 3.45% 3.52% 3.57% 3.87% B

Annualized Net FInterest Margin, Fully / 3.34% 3.51% 3.58% 3.63% 3.93%Tax Equivalent B



Total Interest Income, Fully Tax Equivalent

Total Interest Income $ 45,187 $ 45,613 $ 46,337 $ 45,799 $ 41,598

Tax-exempt investment (1,935) (1,928) (1,877) (1,748) (1,360)income

Taxable investment 2,590 2,581 2,513 2,340 1,821income

Total Interest Income, G $ 45,842 $ 46,266 $ 46,973 $ 46,391 $ 42,059Fully Tax Equivalent



Yield on Average GEarning Assets, Fully / 3.84% 4.04% 4.14% 4.23% 4.78%Tax Equivalent B



Interest IncomeInvestment Securities, Fully Tax Equivalent

Interest Income $ 5,526 $ 5,606 $ 5,309 $ 5,187 $ 5,304Investment Securities

Tax-exempt investment (1,935) (1,928) (1,877) (1,748) (1,360)income

Taxable investment 2,590 2,581 2,513 2,340 1,821Income

Interest IncomeInvestment Securities, H $ 6,181 $ 6,259 $ 5,945 $ 5,779 $ 5,765Fully Tax Equivalent



Average Investment I $ $ $ 957,718 $ 906,548 $ 784,825Securities 1,066,907 1,020,772



Yield on Investment HSecurities, Fully Tax / 2.32% 2.45% 2.48% 2.55% 2.94%Equivalent I



Three Months Ended

Core Net Interest Mar 31, Dec 31, Sept 30, June 30, Mar 31,Margin 2021 2020 2020 2020 2020

Net interest income $ 39,884 $ 40,119 $ 40,608 $ 39,772 $ 34,526(FTE)

Less purchase 1,026 1,692 1,853 2,157 2,336accounting adjustments

Net interest income,net of purchase J $ 38,858 $ 38,427 $ 38,755 $ 37,615 $ 32,190accounting adj



Total average earning $4,778,335 $4,578,384 $4,537,157 $4,384,631 $3,517,143assets

Add average balance ofloan valuation 8,480 9,808 11,501 10,651 12,237discount

Avg earning assets,excluding loan K $4,786,815 $4,588,192 $4,548,658 $4,395,282 $3,529,380valuation discount



Core net interest Jmargin / 3.25% 3.35% 3.41% 3.42% 3.65% K



Three Months Ended

Efficiency Ratio Mar 31, Dec 31, Sept 30, June 30, Mar 31, 2021 2020 2020 2020 2020

Operating Expense

Total non-interest $ 27,264 $ 27,897 $ 26,935 $ 28,070 $ 23,439expense

Pre-tax non-operating - (41) (238) (2,295) (740)expenses

Adjusted Operating L $ 27,264 $ 27,856 $ 26,697 $ 25,775 $ 22,699Expense



Operating Revenue

Net interest income, $ 39,884 $ 40,119 $ 40,608 $ 39,772 $ 34,526FTE

Total non-interest 9,472 10,928 8,794 15,680 6,474income

Pre-tax non-operating - (1,780) - (7,643) -items

Adjusted Operating M $ 49,356 $ 49,267 $ 49,402 $ 47,809 $ 41,000Revenue



Efficiency Ratio, Loperating / 55.24% 56.54% 54.04% 53.91% 55.36% M



Three Months Ended

Return Ratios Mar 31, Dec 31, Sept 30, June 30, Mar 31, 2021 2020 2020 2020 2020

Net income available N $ 16,644 $ 15,335 $ 11,917 $ 16,943 $ 8,311to common shareholders

Acquisition charges - 41 238 2,295 740

Tax on acquisition - (10) (61) (518) (164)charges

Bargain purchase gainand gain on sale of - (812) - (7,643) -land

Tax on gain on sale of - - - 157 -land

Treasury awards - (968) - - -

Tax on Treasury awards - 245 - - -

Net earnings availableto common O $ 16,644 $ 13,831 $ 12,094 $ 11,234 $ 8,887shareholders,operating



Pre-Tax Pre-Provision Operating Earnings

Earnings before income P $ 21,437 $ 18,974 $ 14,910 $ 19,184 $ 9,998taxes

Acquisition charges - 41 238 2,295 740

Provision for loan - 3,523 6,921 7,606 7,102losses

Treasury Awards and - (1,780) - (7,643) -Gains

Pre-Tax, Pre-Provision Q $ 21,437 $ 20,758 $ 22,069 $ 21,442 $ 17,840Operating Earnings





Annualized return on Navg assets / 1.25% 1.19% 0.94% 1.38% 0.83% A

Annualized return on Oavg assets, oper / 1.25% 1.08% 0.95% 0.91% 0.89% A

Annualized pre-tax, Qpre-provision, oper / 1.61% 1.62% 1.74% 1.75% 1.79% A

Annualized return on Oavg common equity, / 10.32% 8.63% 7.65% 7.40% 6.50%oper C

Annualized return on Oavg tangible common / 14.54% 12.27% 10.95% 10.60% 9.91%equity, operating D



Mortgage Department

Net Interest Incomeafter provision for $ 140 $ 133 $ 142 $ 127 $ 119credit losses

Loan fee income 3,162 3,270 2,961 2,646 1,567

Salaries and employee (1,512) (1,329) (1,444) (1,246) (1,077)benefits

Other non-interest (126) (105) (110) (99) (152)expense

Earnings before income $ 1,664 $ 1,969 $ 1,549 $ 1,428 $ 457taxes

View source version on businesswire.com: https://www.businesswire.com/news/home/20210421006108/en/

CONTACT: M. Ray "Hoppy" Cole Chief Executive Officer Dee Dee Lowery Chief Financial Officer (601) 268-8998