On July 24, 2024, First Bancshares Inc (FBMS, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. First Bancshares Inc operates as a bank holding company offering a range of financial products and services, including deposit accounts, loans, and wealth management services.
Quarterly Performance Overview
First Bancshares Inc (FBMS, Financial) reported net income available to common shareholders of $19.7 million for Q2 2024, a 4.5% decrease from $20.6 million in Q1 2024. This decline was primarily due to a $1.7 million provision for credit losses, compared to no provision in the previous quarter. Despite this, pre-tax pre-provision operating earnings (non-GAAP) increased by 2.9% to $27.4 million from $26.6 million in Q1 2024.
Key Financial Metrics
For the second quarter of 2024, diluted earnings per share (EPS) were $0.62, down from $0.65 in Q1 2024 and $0.75 in Q2 2023. This was below the analyst estimate of $0.67. The company's net interest income rose slightly to $57.8 million from $57.3 million in the previous quarter, driven by a decrease in interest expense on borrowings.
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Net Income ($ million) | 19.7 | 20.6 | 23.8 |
| Diluted EPS ($) | 0.62 | 0.65 | 0.75 |
| Net Interest Income ($ million) | 57.8 | 57.3 | 66.0 |
| Provision for Credit Losses ($ million) | 1.7 | 0.0 | 1.3 |
Balance Sheet and Asset Quality
Consolidated assets increased marginally to $7.966 billion at the end of Q2 2024 from $7.964 billion in Q1 2024. Total loans grew by $110.9 million, or 2.2%, to $5.251 billion, while deposits decreased by $84.2 million to $6.626 billion. Nonperforming assets rose to $21.1 million, representing 0.26% of total assets, up from $18.4 million in Q1 2024.
Net Interest Margin and Non-Interest Income
The annualized net interest margin increased by 6 basis points to 3.26% in Q2 2024 from 3.20% in Q1 2024. Core net interest margin also improved by 9 basis points to 3.19%. Non-interest income saw a modest increase to $13.3 million from $12.7 million in the previous quarter, primarily due to higher interchange fee income.
Commentary and Outlook
"We are pleased with the results of the second quarter. Strong loan growth and improvement in our net interest margin combined to produce a 2.9% increase in pre-tax pre-provision income. Credit quality continued to be solid and operating expenses were well controlled. Our markets continue to do well and we are optimistic about our performance for the second half of 2024," commented M. Ray “Hoppy” Cole, Jr., President and Chief Executive Officer.
Challenges and Future Prospects
Despite the positive aspects, the increase in provision for credit losses and the decline in net income are areas of concern. The company's ability to manage credit risk and maintain asset quality will be crucial in the coming quarters. Additionally, the competitive landscape for deposits and interest-bearing liabilities remains challenging.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from First Bancshares Inc for further details.
