Yahoo Finance First Bancshares Inc (FBMS) Reports Mixed Quarterly Results and Yearly Growth Amid Market Challenges
Net Income: Q4 net income available to common shareholders decreased by 54.7% QoQ but increased by 19.9% YoY.
Dividend: Quarterly dividend increased by 4%.
Loan Growth: Total loans grew by $80.2 million, or 6.3% on an annualized basis, compared to the previous quarter.
Net Interest Margin: Decreased by 19 basis points during Q4 from the previous quarter.
Asset Quality: Nonperforming assets to total assets improved slightly from 0.28% to 0.25% QoQ.
Balance Sheet: Consolidated assets increased by $115.1 million to $7.999 billion at the end of 2023.
Cost of Deposits: Average cost of deposits increased significantly from 121 basis points in Q3 to 154 basis points in Q4.
On January 24, 2024, First Bancshares Inc (NASDAQ:FBMS) released its 8-K filing, detailing the financial results for the fourth quarter ended December 31, 2023. FBMS, a bank holding company offering a range of financial products and services, reported a mixed performance with a significant quarterly decrease in net income but a solid annual growth.
Company Overview
First Bancshares Inc operates through its primary subsidiary, The First Bank, providing banking services including personal and commercial loans, deposit accounts, and wealth management. The company serves individuals, businesses, and governmental entities across multiple states, focusing on community banking and customer service.
Quarterly Performance and Challenges
FBMS reported a net income available to common shareholders of $11.0 million for Q4 2023, a sharp decline of 54.7% from the previous quarter's $24.4 million. This decrease was attributed to several one-time items, including a pre-tax loss of $9.7 million from the sale of available-for-sale securities. The company's net interest margin also saw a decrease, which, along with increased deposit costs, contributed to the lower earnings. However, the balance sheet repositioning is expected to improve future net interest margin and net interest income.
Annual Financial Achievements
Despite the quarterly challenges, FBMS's year-over-year comparison showed a 19.9% increase in net income available to common shareholders, rising from $62.9 million in 2022 to $75.5 million in 2023. This growth demonstrates the company's ability to expand and manage its assets effectively, with total loans increasing by 6.3% excluding acquisitions, and a notable improvement in the fully tax equivalent net interest margin.
Financial Metrics and Importance
The company's financial health can be assessed through several key metrics:
"Loan growth and credit remained strong with $80 million of net loan growth for the quarter, or 6.3% on an annualized basis. Non-performing assets decreased for the quarter and past dues were low at 23 basis points."
These metrics are crucial as they indicate the company's lending performance and asset quality, which are vital for investor confidence and the company's creditworthiness.
Analysis of Company's Performance
FBMS's performance in the fourth quarter reflects the impact of market volatility and rising interest rates on its investment portfolio and borrowing costs. However, the company's proactive measures to reposition its balance sheet and the overall annual growth suggest resilience and strategic management. The increase in the quarterly dividend also signals confidence in the company's ability to generate shareholder value despite short-term setbacks.
For a detailed view of FBMS's financial results, including income statements and balance sheets, investors are encouraged to review the full 8-K filing.
FBMS's strategic decisions and year-end financial growth highlight its commitment to navigating market challenges and enhancing shareholder returns. As the company moves into the new year, investors will be watching closely to see how these strategies unfold in the face of an evolving economic landscape.
Explore the complete 8-K earnings release (here) from First Bancshares Inc for further details.
This article first appeared on GuruFocus.
