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FBMS Nasdaq· The First Bancshares Inc.
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FBMS Nasdaq· The First Bancshares Inc.
Earnings report Q3 2023

The First Bancshares Reports Strong Revenue Growth in Q3 2023

Segments of revenue

The First Bancshares, Inc. (FBMS) reported a significant increase in revenue for the third quarter of 2023 compared to the same quarter in 2022. Total revenue for Q3 2023 was $24.4 million, representing a growth of $10.3 million or 73.5% compared to Q3 2022. This increase can be attributed to net income associated with the acquisitions of Heritage Bank and Beach Bank.

Strengths

FBMS demonstrated strong revenue growth in the latest quarter, driven by the successful integration of Heritage Bank and Beach Bank. The acquisitions contributed to the increase in net income, resulting in a substantial improvement in the company's financial performance. Additionally, FBMS reported a significant increase in net interest income, which totaled $60.7 million for Q3 2023, representing a growth of $11.6 million or 23.5% compared to Q3 2022. The company's management highlighted the positive impact of increased interest rates and the successful execution of their acquisition strategy.

Challenges

While FBMS experienced strong revenue growth, there are potential challenges that need to be considered. The company's net interest margin for Q3 2023 was 3.47%, including 25 basis points related to purchase accounting adjustments. This margin is slightly higher than the 3.43% reported in the same quarter of 2022, which included only 5 basis points related to purchase accounting adjustments. FBMS should closely monitor the impact of purchase accounting adjustments on its net interest margin and ensure that it remains sustainable in the long term.

Noteworthy

FBMS finalized its analysis and valuation adjustments during the third quarter of 2023, which impacted various aspects of its financials, including investments, loans, other real estate, personal and real property, deferred tax assets, other assets, and deposits. This indicates the company's commitment to maintaining accurate and transparent financial reporting.

Summary

The First Bancshares, Inc. delivered a strong performance in the latest quarter, with a significant increase in revenue driven by the successful integration of Heritage Bank and Beach Bank. The company's net interest income also experienced substantial growth, reflecting the positive impact of increased interest rates and successful acquisitions. However, FBMS should remain vigilant about managing purchase accounting adjustments to ensure the sustainability of its net interest margin. Overall, FBMS's financial performance demonstrates its ability to execute strategic acquisitions and generate strong revenue growth.

Source documents

Form 10-Q  filed on Nov 09, 2023
93 pages scanned

Reference data

Company financials Q3 revenue 58.8M
Analyst estimates Q3 EPS missed by -25.69%
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