The First Bancshares, Inc. (FBMS) | Investment Case

1. Company Snapshot

1.a. Company Description

The First Bancshares, Inc.operates as the bank holding company for The First, A National Banking Association that provides general commercial and retail banking services.The company operates through three segments: Commercial/Retail Bank, Mortgage Banking Division, and Holding Company.

It offers deposit services, including checking, NOW, and savings accounts; other time deposits, such as daily money market accounts and longer-term certificates of deposit; and individual retirement and health savings accounts.The company also provides commercial loans comprising secured and unsecured loans for working capital, business expansion, and purchase of equipment and machinery; consumer loans consisting of equity lines of credit, as well as secured and unsecured loans for financing automobiles, home improvements, education, and personal investments; and real estate construction and acquisition loans.In addition, it originates loans to purchase existing residential homes or construct new homes, and to refinance existing mortgages; and provides financial and wealth management services.

Further, the company offers internet banking services, automated teller machines, voice response telephone inquiry services, commercial sweep accounts, cash management services, safe deposit boxes, merchant, mobile deposit, direct deposit of payroll and social security checks, automatic drafts for various accounts, and credit card services.It primarily serves small to medium-sized businesses, professional concerns, individuals, associations, organizations, and governmental authorities.As of December 31, 2021, the company operated 90 locations in Mississippi, Alabama, Florida, Georgia, and Louisiana.

The First Bancshares, Inc.was incorporated in 1995 and is headquartered in Hattiesburg, Mississippi.

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1.b. Last Insights on FBMS

The First Bancshares, Inc.'s recent stock performance was negatively driven by lower-than-expected net income of $18.3 million, a 1.5% decrease from the previous quarter. The company's financial results were hurt by a decrease in net income available to common shareholders. The bank's net income was impacted by a decline in non-interest income, partly due to a decrease in mortgage banking fees. Additionally, the company's provision expense was higher than expected, which also negatively affected its financial results.

1.c. Company Highlights

Last Price	33.81
Change Percentage	0.48%
Open	33.15
Previous Close	33.65
Market Cap ( Millions)	1056
Volume	2277247
Year High	39.21
Year Low	22.96
M A 50	35.99
M A 200	33.65

FCF Yield	6.99%
Dividend Yield	0.74%
ROE	5.68%
Debt / Equity	33.97%
Net Debt / EBIDTA	155.56%
Price To Book	1.06
Price Earnings Ratio	18.84
Price To FCF	14.3
Price To sales	3.43
EV / EBITDA	15.12

2. Transcript Summary

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3. NewsRoom

Renasant and The First Announce Receipt of Regulatory Approvals for Merger

Mar -17

Source: businesswire.com

The First Bancshares, Inc. Reports Results for Fourth Quarter ended December 31, 2024

Jan -28

Source: businesswire.com

The First Bancshares (FBMS) Tops Q3 Earnings Estimates

Oct -23

Source: zacks.com

The First Bancshares, Inc. Reports Results for Third Quarter Ended September 30, 2024

Oct -23

Source: businesswire.com

The First Bancshares, Inc. Announces Receipt of Shareholder Approval for Merger

Oct -22

Source: businesswire.com

SHAREHOLDER ALERT: The M&A Class Action Firm Investigates the Mergers and Upcoming Votes of PETQ and FBMS

Oct -09

Source: accesswire.com

STOCKHOLDER INVESTIGATION: The M&A Class Action Firm Investigates the Mergers and Imminent Votes of PETQ and FBMS

Oct -08

Source: accesswire.com

STOCKHOLDER ALERT: The M&A Class Action Firm Investigates the Mergers and Imminent Votes of PETQ and FBMS

Oct -07

Source: accesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.88%)

6. Segments

Commercial/Retail Bank

Expected Growth: 4.85%

The First Bancshares, Inc.'s 4.85% growth in Commercial/Retail Banking is driven by strategic expansion into new markets, increased lending activities, and a focus on digital transformation. Additionally, the bank's strong customer relationships, efficient cost management, and favorable interest rate environment have contributed to its growth.

Mortgage Banking

Expected Growth: 7.43%

The 7.43% growth in Mortgage Banking at The First Bancshares, Inc. is driven by increasing demand for housing, low interest rates, and expansion into new markets. Additionally, the company's digital mortgage platform and strategic partnerships have improved operational efficiency and enhanced customer experience, contributing to the segment's growth.

Holding Company

Expected Growth: 7.03%

The First Bancshares, Inc.'s 7.03% growth is driven by strategic acquisitions, expanding loan portfolio, and increased non-interest income. The holding company's diversified revenue streams, including mortgage banking and trust services, contribute to its growth. Additionally, a strong capital position and efficient cost management enable the company to invest in digital transformation and talent acquisition, further fueling its expansion.

7. Detailed Products

Personal Banking

The First Bancshares, Inc. offers a range of personal banking services, including checking and savings accounts, credit cards, loans, and investment services, designed to meet the financial needs of individuals and families.

Business Banking

The company provides business banking services, including commercial loans, lines of credit, cash management, and treasury management, tailored to meet the financial needs of businesses of all sizes.

Mortgage Lending

The First Bancshares, Inc. offers a variety of mortgage loan options, including fixed-rate and adjustable-rate mortgages, construction loans, and home equity loans, to help individuals and families achieve their homeownership goals.

Wealth Management

The company provides wealth management services, including investment management, trust services, and financial planning, designed to help individuals and families achieve their long-term financial goals.

Insurance Services

The First Bancshares, Inc. offers a range of insurance products, including life insurance, disability insurance, and long-term care insurance, to help individuals and families protect their financial well-being.

Online Banking

The company provides online banking services, allowing customers to manage their accounts, pay bills, and transfer funds from the convenience of their own homes.

Mobile Banking

The First Bancshares, Inc. offers mobile banking services, enabling customers to access their accounts, deposit checks, and transfer funds on-the-go.

8. The First Bancshares, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for The First Bancshares, Inc. is medium due to the presence of alternative financial institutions and online banking services.

Bargaining Power Of Customers

The bargaining power of customers for The First Bancshares, Inc. is low due to the lack of concentration of buyers and the availability of multiple banking options.

Bargaining Power Of Suppliers

The bargaining power of suppliers for The First Bancshares, Inc. is medium due to the presence of multiple suppliers of financial services and technology.

Threat Of New Entrants

The threat of new entrants for The First Bancshares, Inc. is high due to the ease of entry into the banking industry and the presence of fintech companies.

Intensity Of Rivalry

The intensity of rivalry for The First Bancshares, Inc. is high due to the presence of multiple competitors in the banking industry and the need to differentiate itself through innovative products and services.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	35.17%
Debt Cost	4.98%
Equity Weight	64.83%
Equity Cost	8.40%
WACC	7.20%
Leverage	54.24%

11. Quality Control: The First Bancshares, Inc. passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Northeast Bank

A-Score: 6.1/10

Value: 6.8

Growth: 8.8

Quality: 7.5

Yield: 0.0

Momentum: 7.5

Volatility: 6.0

1-Year Total Return ->

Lake Shore Bancorp

A-Score: 5.8/10

Value: 5.7

Growth: 4.0

Quality: 7.0

Yield: 6.0

Momentum: 9.0

Volatility: 3.3

1-Year Total Return ->

Lakeland Financial

A-Score: 5.7/10

Value: 4.4

Growth: 5.7

Quality: 6.9

Yield: 5.0

Momentum: 4.5

Volatility: 7.7

1-Year Total Return ->

SB Financial Group

A-Score: 5.7/10

Value: 6.9

Growth: 4.0

Quality: 6.5

Yield: 6.0

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

First Bancshares

A-Score: 5.5/10

Value: 5.5

Growth: 4.7

Quality: 6.9

Yield: 4.0

Momentum: 6.0

Volatility: 6.0

1-Year Total Return ->

Camden National

A-Score: 5.5/10

Value: 5.2

Growth: 5.1

Quality: 4.1

Yield: 8.0

Momentum: 3.5

Volatility: 7.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-2.47%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.20%

The First Bancshares, Inc. - US3189161033

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on FBMS

1.c. Company Highlights

Weak Momentum

Fairly Valued

Average Yield

Earnings Beats

Revenues Beats

Average Quality

Medium Volatility

Stable Momentum

Earnings Miss

Average Growth

Strong Momentum

Lower Growth

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.88%)

6. Segments

Commercial/Retail Bank

Expected Growth: 4.85%

Mortgage Banking

Expected Growth: 7.43%

Holding Company

Expected Growth: 7.03%

7. Detailed Products

Personal Banking

Business Banking

Mortgage Lending

Wealth Management

Insurance Services

Online Banking

Mobile Banking

8. The First Bancshares, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: The First Bancshares, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

33.81$

Current Price

33.81$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA