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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to ________

Commission file number: 001-42107

THE FIRST BANCSHARES, INC.

(Exact name of registrant as specified in its charter)


Mississippi			64-0862173
(State of Incorporation)			(IRS Employer Identification No)


6480 U.S. Highway 98 West, Suite A, Hattiesburg, Mississippi			39402
(Address of principal executive offices)			(Zip Code)

(601) 268-8998

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1.00	FBMS	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller Reporting Company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common stock, $1.00 par value, 32,448,706 shares issued and 31,199,099 outstanding as of November 1, 2024.


Auditor Firm PCAOB ID: 686			Auditor Name: Forvis Mazars, LLP			Auditor Location: Jackson, MS

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The First Bancshares, Inc.

Form 10-Q

Quarter Ended September 30, 2024

Index


Part I. Financial Information

Item 1.	Financial Statements	3
	Consolidated Balance Sheets—Unaudited at September 30, 2024	3
	Consolidated Statements of Income—Unaudited	4
	Consolidated Statements of Comprehensive Income (Loss)—Unaudited	5
	Consolidated Statements of Changes in Shareholders’ Equity —Unaudited	6
	Consolidated Statements of Cash Flows—Unaudited	8
	Notes to Consolidated Financial Statements—Unaudited	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	62
Item 4.	Controls and Procedures	64

Part II. Other Information

Item 1.	Legal Proceedings	65
Item 1A.	Risk Factors	65
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 3.	Defaults Upon Senior Securities	66
Item 4.	Mine Safety Disclosures	66
Item 5.	Other Information	66
Item 6.	Exhibits	67
Signatures		68

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

THE FIRST BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS

($ in thousands)


	(Unaudited)
	September 30, 2024		December 31, 2023
ASSETS
Cash and due from banks	$	127,515	$	224,199
Interest-bearing deposits with banks	86,620		130,948
Total cash and cash equivalents	214,135		355,147
Securities available-for-sale, at fair value (amortized cost: $1,151,663 - 2024; $1,161,172 - 2023; allowance for credit losses: $0)	1,060,014		1,039,322
Securities held to maturity, net of allowance for credit losses of $0 (fair value: $574,750 - 2024; $615,944 - 2023)	602,328		654,539
Other securities	52,386		40,797
Total securities	1,714,728		1,734,658
Loans held for sale	2,987		2,914
Loans held for investment	5,318,590		5,170,042
Allowance for credit losses	(55,700)		(54,032)
Net loans held for investment	5,262,890		5,116,010
Interest receivable	33,384		33,300
Premises and equipment	170,570		174,309
Operating lease right-of-use assets	5,964		6,387
Finance lease right-of-use assets	1,118		1,466
Cash surrender value of bank-owned life insurance	136,579		134,249
Goodwill	272,520		272,520
Other real estate owned	7,314		8,320
Other assets	144,266		160,065
Total assets	$	7,966,455	$	7,999,345
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing	$	1,796,746	$	1,849,013
Interest-bearing	4,763,966		4,613,859
Total deposits	6,560,712		6,462,872
Interest payable	13,720		22,702
Borrowed funds	207,500		390,000
Subordinated debentures	123,645		123,386
Operating lease liabilities	6,131		6,550
Finance lease liabilities	1,602		1,739
Allowance for credit losses on off-balance sheet credit exposures	2,075		2,075
Other liabilities	39,387		40,987
Total liabilities	6,954,772		7,050,311
Shareholders’ equity:
Common stock, par value $1 per share, 80,000,000 shares authorized; 32,450,440 shares issued at September 30, 2024, and par value $1 per share, 80,000,000 shares authorized; 32,338,983 shares issued at December 31, 2023	32,450		32,339
Additional paid-in capital	776,731		775,232
Retained earnings	335,689		300,150
Accumulated other comprehensive (loss)	(92,076)		(117,576)
Treasury stock, at cost, 1,249,607 shares at September 30, 2024 and at December 31, 2023	(41,111)		(41,111)
Total shareholders’ equity	1,011,683		949,034
Total liabilities and shareholders’ equity	$	7,966,455	$	7,999,345

See Notes to Consolidated Financial Statements

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THE FIRST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME

($ in thousands, except earnings and dividends per share)


	(Unaudited)				(Unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Interest and dividend income:
Interest and fees on loans	$	82,131	$	74,626	$	239,266	$	216,949
Interest and dividends on securities:
Taxable interest and dividends	8,064		7,685		25,234		24,311
Tax exempt interest	2,925		2,929		8,836		8,825
Interest on federal funds sold and interest-bearing deposits in other banks	441		441		2,915		2,128
Total interest income	93,561		85,681		276,251		252,213
Interest expense:
Interest on deposits	29,979		19,572		88,855		46,611
Interest on borrowed funds	4,568		5,405		13,247		13,942
Total interest expense	34,547		24,977		102,102		60,553
Net interest income	59,014		60,704		174,149		191,660
Provision for credit losses, LHFI	1,000		1,000		2,650		12,500
Provision for credit losses, OBSC exposures	—		—		—		750
Net interest income after provision for credit losses	58,014		59,704		171,499		178,410
Non-interest income:
Service charges on deposit accounts	3,709		3,646		10,410		10,728
Gain (loss) on securities	225		2		191		(46)
(Loss) gain on sale of premises and equipment	(344)		(104)		(181)		559
Government awards/grants	—		6,197		—		6,197
Other	8,652		9,583		27,820		26,921
Total non-interest income	12,242		19,324		38,240		44,359
Non-interest expense:
Salaries and employee benefits	25,131		22,807		74,684		69,695
Occupancy and equipment	5,659		5,343		16,863		15,680
Acquisition expense	2,592		588		2,952		8,482
Other	13,012		18,986		39,409		46,436
Total non-interest expense	46,394		47,724		133,908		140,293
Income before income taxes	23,862		31,304		75,831		82,476
Income tax expense	5,291		6,944		16,935		18,066
Net income	$	18,571	$	24,360	$	58,896	$	64,410

Basic earnings per share	$	0.59	$	0.78	$	1.87	$	2.05
Diluted earnings per share	0.59		0.77		1.86		$	2.04

See Notes to Consolidated Financial Statements

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THE FIRST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

($ in thousands)


	(Unaudited)				(Unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income	$	18,571	$	24,360	$	58,896	$	64,410
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during the period on available-for-sale securities	38,134		(26,770)		34,045		(22,025)
Reclassification adjustment for (accretion) amortization of unrealized holdings gain/(loss) included in accumulated other comprehensive income from the transfer of securities available-for-sale to held-to-maturity	95		93		283		277
Reclassification adjustment for (gains) losses included in net income	(225)		(2)		(191)		46
Unrealized holding gains (losses) arising during the period on available-for-sale securities	38,004		(26,679)		34,137		(21,702)
Income tax (expense) benefit	(9,615)		6,750		(8,637)		5,491
Other comprehensive income (loss)	28,389		(19,929)		25,500		(16,211)
Comprehensive income	$	46,960	$	4,431	$	84,396	$	48,199

See Notes to Consolidated Financial Statements

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THE FIRST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

($ in thousands except per share data, unaudited)


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Total
	Shares	Amount								Shares	Amount
Balance, January 1, 2023	25,275,369	$	25,275	$	558,833	$	252,623	$	(148,957)	(1,249,607)	$	(41,111)	$	646,663
Net income	—	—		—		16,271		—		—	—		16,271
Other comprehensive income	—	—		—		—		18,183		—	—		18,183
Dividends on common stock, $0.21 per share	—	—		—		(6,498)		—		—	—		(6,498)
Issuance of common shares for HSBI acquisition	6,920,422	6,920		214,602		—		—		—	—		221,522
Issuance of restricted stock grants	118,689	119		(119)		—		—		—	—		—
Restricted stock grants forfeited	(500)	(1)		1		—		—		—	—		—
Repurchase of restricted stock for payment of taxes	(9,827)	(9)		(298)		—		—		—	—		(307)
Compensation expense	—	—		593		—		—		—	—		593
Balance, March 31, 2023	32,304,153	32,304		773,612		262,396		(130,774)		(1,249,607)	(41,111)		896,427
Net income	—	—		—		23,779		—		—	—		23,779
Other comprehensive loss	—	—		—		—		(14,465)		—	—		(14,465)
Dividends on common stock, $0.22 per share	—	—		—		(6,825)		—		—	—		(6,825)
Issuance of restricted stock grants	45,773	46		(46)		—		—		—	—		—
Restricted stock grants forfeited	(4,526)	(5)		5		—		—		—	—		—
Compensation expense	—	—		530		—		—		—	—		530
Balance, June 30, 2023	32,345,400	32,345		774,101		279,350		(145,239)		(1,249,607)	(41,111)		899,446
Net income	—	—		—		24,360		—		—	—		24,360
Other comprehensive loss	—	—		—		—		(19,929)		—	—		(19,929)
Dividends on common stock, $0.23 per share	—	—		—		(7,151)		—		—	—		(7,151)
Issuance of restricted stock grants	2,711	3		(3)		—		—		—	—		—
Restricted stock grants forfeited	(3,596)	(4)		4		—		—		—	—		—
Repurchase of restricted stock for payment of taxes	(1,104)	(1)		(31)		—		—		—	—		(32)
Compensation expense	—	—		527		—		—		—	—		527
Balance, September 30, 2023	32,343,411	$	32,343	$	774,598	$	296,559	$	(165,168)	(1,249,607)	$	(41,111)	$	897,221

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THE FIRST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY CONTINUED

($ in thousands except per share data, unaudited)


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Total
	Shares	Amount								Shares	Amount
Balance, January 1, 2024	32,338,983	$	32,339	$	775,232	$	300,150	$	(117,576)	(1,249,607)	$	(41,111)	$	949,034
Net income	—	—		—		20,628		—		—	—		20,628
Other comprehensive loss	—	—		—		—		(2,312)		—	—		(2,312)
Dividends on common stock, $0.25 per share	—	—		—		(7,777)		—		—	—		(7,777)
Issuance of restricted stock grants	141,457	141		(141)		—		—		—	—		—
Repurchase of restricted stock for payment of taxes	(12,512)	(12)		(302)		—		—		—	—		(314)
Compensation expense	—	—		653		—		—		—	—		653
Balance, March 31, 2024	32,467,928	32,468		775,442		313,001		(119,888)		(1,249,607)	(41,111)		959,912
Net income	—	—		—		19,697		—		—	—		19,697
Other comprehensive loss	—	—		—		—		(577)		—	—		(577)
Dividends on common stock, $0.25 per share	—	—		—		(7,799)		—		—	—		(7,799)
Issuance of restricted stock grants	2,847	3		(3)		—		—		—	—		—
Restricted stock grants forfeited	(5,768)	(6)		6		—		—		—	—		—
Repurchase of restricted stock for payment of taxes	(595)	(1)		(14)		—		—		—	—		(15)
Compensation expense	—	—		667		—		—		—	—		667
Balance, June 30, 2024	32,464,412	32,464		776,098		324,899		(120,465)		(1,249,607)	(41,111)		971,885
Net income	—	—		—		18,571		—		—	—		18,571
Other comprehensive income	—	—		—		—		28,389		—	—		28,389
Dividends on common stock, $0.25 per share	—	—		—		(7,781)		—		—	—		(7,781)
Issuance of restricted stock grants	2,800	3		(3)		—		—		—	—		—
Restricted stock grants forfeited	(14,903)	(15)		15		—		—		—	—		—
Repurchase of restricted stock for payment of taxes	(1,869)	(2)		(53)		—		—		—	—		(55)
Compensation expense	—	—		674		—		—		—	—		674
Balance, September 30, 2024	32,450,440	$	32,450	$	776,731	$	335,689	$	(92,076)	(1,249,607)	$	(41,111)	$	1,011,683

See Notes to Consolidated Financial Statements

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THE FIRST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in thousands)


	(Unaudited)
	Nine Months Ended September 30,
	2024		2023
Cash flows from operating activities:
Net income	$	58,896	$	64,410
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and accretion	14,188		3,969
Provision for credit loss	2,650		13,250
Loss on sale or write-down of ORE	199		753
Securities (gain) loss	(191)		46
Loss (gain) on disposal of premises and equipment	181		(559)
Restricted stock expense	1,994		1,650
Increase in cash value of life insurance	(2,852)		(2,390)
Federal Home Loan Bank stock dividends	(301)		(279)
Residential loans originated and held for sale	(65,936)		(76,169)
Proceeds from sale of residential loans held for sale	65,863		74,652
Changes in:
Interest receivable	(84)		1,530
Interest payable	(8,982)		10,476
Operating lease liability	(419)		(1,208)
Other, net	2,602		(9,774)
Net cash provided by operating activities	67,808		80,357
Cash flows from investing activities:
Available-for-sale securities:
Sales	—		171,150
Maturities, prepayments, and calls	206,577		88,490
Purchases	(198,269)		—
Held-to-maturity securities:
Maturities, prepayments, and calls	51,961		35,827
Purchases of other securities	(14,835)		(10,563)
Proceeds from other securities	3,991		8,741
Net increase in loans	(143,941)		(145,047)
Net changes in premises and equipment	(2,293)		(2,749)
Proceeds from sale of other real estate owned	1,077		1,098
Proceeds from the sale of premises and equipment	424		1,416
Benefits received on bank owned life insurance policies	522		—
Cash received in excess of cash paid for acquisitions	—		106,973
Net cash (used in) provided by investing activities	(94,786)		255,336
Cash flows from financing activities:
Increase (decrease) in deposits	91,982		(408,603)
Proceeds from borrowed funds	2,615,700		3,346,693
Repayments of borrowed funds	(2,798,200)		(3,174,793)
Principal payments on finance lease liabilities	(137)		(134)
Dividends paid on common stock	(22,995)		(20,200)
Called/repayment of subordinated debt	—		(26,000)
Repurchase of restricted stock for payment of taxes	(384)		(339)
Net cash used in financing activities	(114,034)		(283,376)
Net change in cash and cash equivalents	(141,012)		52,317
Beginning cash and cash equivalents	355,147		145,315
Ending cash and cash equivalents	$	214,135	$	197,632

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THE FIRST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS CONTINUED

($ in thousands)


	(Unaudited)
	Nine Months Ended September 30,
	2024		2023
Supplemental disclosures:

Cash paid during the year for:
Interest	$	98,453	$	33,966
Income taxes, (net of refunds)	14,798		9,284

Non-cash activities:
Loans transferred to other real estate	1,112		1,543
Issuance of restricted stock grants	147		168
Dividends on restricted stock grants	362		273
Stock issued in connection with HSBI acquisition	—		221,522
Lease liabilities arising from obtaining right-of-use assets	482		560
Lease liabilities arising from HSBI acquisition	—		184

See Notes to Consolidated Financial Statements

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THE FIRST BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2024

NOTE 1 – BASIS OF PRESENTATION

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements and the instructions to Form 10-Q of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Form 10-K for the fiscal year ended December 31, 2023.

NOTE 2 – SUMMARY OF ORGANIZATION

The First Bancshares, Inc., Hattiesburg, Mississippi (the “Company”), was incorporated June 23, 1995, under the laws of the State of Mississippi for the purpose of operating as a bank holding company. The Company’s primary asset is its interest in its wholly-owned subsidiary, The First Bank (the “Bank” or “The First”).

On May 17, 2024, the Company, acting pursuant to authorization from its Board of Directors, provided written notice to The Nasdaq Stock Market LLC ("Nasdaq") of its determination to voluntarily withdraw the principal listing of the Company's voting common stock, $1.00 par value per share (the "Common Stock"), from Nasdaq and transfer the listing to the New York Stock Exchange ("NYSE"). The listing and trading of the Common Stock on Nasdaq ended at market close on May 29, 2024, and trading commenced on the NYSE at market open on May 30, 2024. The Common Stock is traded on the NYSE under the symbol "FBMS."

On July 29, 2024, the Company entered into a definitive merger agreement (the "Merger Agreement") with Renasant Corporation ("Renasant"), the holding company for Renasant Bank, whereby the Company will merge with and into Renasant, with Renasant continuing as the surviving corporation, and immediately thereafter, the Bank will merge with and into Renasant Bank (collectively, the " Renasant Merger"). Subject to the terms and conditions of the Merger Agreement, the companies will combine in an all-stock transaction in which all shareholders of the Company will receive 1.00 share of Renasant common stock for each share of Company common stock. The Renasant Merger has been approved by each company's board of directors and shareholders and is expected to close in the first half of 2025. Completion of the Renasant Merger remains subject to customary closing conditions, including the receipt of required regulatory approvals.

At September 30, 2024, the Company had approximately $7.966 billion in assets, $5.263 billion in net loans held for investment (“LHFI”), $6.561 billion in deposits, and $1.012 billion in shareholders' equity. For the nine months ended September 30, 2024, the Company reported net income of $58.9 million.

On February 23, 2024, the Company paid a cash dividend in the amount of $0.25 per share to shareholders of record as of the close of business on February 7, 2024. On May 23, 2024, the Company paid a cash dividend in the amount of $0.25 per share to shareholders of record as of the close of business on May 7, 2024. On August 23, 2024, the Company paid a cash dividend in the amount of $0.25 per share to shareholders of record as of the close of business on August 8, 2024. On October 23, 2024, the Company announced that its Board of Directors declared a cash dividend of $0.25 per share to be paid on its common stock on November 22, 2024 to shareholders of record as of the close of business on November 8, 2024.

NOTE 3 – ACCOUNTING STANDARDS

Effect of Recently Adopted Accounting Standards

In March 2023, FASB issued ASU No. 2023-01, Leases (Topic 842) - "Common Control Arrangements." This ASU requires entities to determine whether a related party arrangement between entities under common control is a lease. If the arrangement is determined to be a lease, an entity must classify and account for the lease on the same basis as an

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arrangement with a related party. The ASU requires all entities to amortize leasehold improvements associated with common control leases over the useful life to the common control group. This guidance is effective for the Company January 1, 2024, and did not have a material impact on the Company's consolidated financial statements.

In March 2023, FASB issued ASU No. 2023-02, Investments - Equity Method and Joint Venture (Topic 323): "Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method." These amendments allow reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. This guidance is effective for the Company January 1, 2024, and did not have a material impact on the Company's consolidated financial statements.

New Accounting Standards That Have Not Yet Been Adopted

In October 2023, FASB issued ASU No. 2023-06, "Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative." This ASU amends the ASC to incorporate certain disclosure requirements from SEC Release No. 33-10532 - Disclosure Update and Simplification that was issued in 2018. The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-K becomes effective, with early adoption prohibited. This guidance is not expected to have a material impact on the Company's consolidated financial statements.

In November 2023, FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." This ASU amends the ASC to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The key amendments: 1. Require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss. 2. Require that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. The other segment items category is the difference between segment revenue less the significant expenses disclosed and each reported measure of segment profit or loss. 3. Require that a public entity provide all annual disclosures about a reportable segment's profit or loss and assets currently required by FASB ASU Topic 280, Segment Reporting, in interim periods. 4. Clarify that if the CODM uses more than one measure of a segment's profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit. However, at least one of the reported segment profit or loss measures (or the single reported measure, if only one is disclosed) should be the measure that is most consistent with the measurement principles used in measuring the corresponding amounts in the public entity's consolidated financial statements. 5. Require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. 6. Require that a public entity has a single reportable segment provide all the disclosures required by the amendments in the ASU and all existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. This guidance is not expected to have a material impact on the Company's consolidated financial statements.

In December 2023, FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." This ASU requires that a public business entity on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate). The amendments require that all entities disclose on an annual basis the following information about income taxes paid: 1. The amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes. 2. The amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). The amendments also require that all entities disclose the following information: 1. Income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign. 2. Income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. This ASU is effective for annual periods beginning after December 15, 2024. This guidance is not expected to have a material impact on the Company's consolidated financial statements.

In March 2024, FASB issued ASU No. 2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements: This ASU amends the Codification to remove references to various concepts statements and impacts a variety of topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance, but in most instances the references removed are extraneous and not required to understand

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or apply the guidance. Generally, the amendments in ASU 2024-02 are not intended to result in significant accounting changes for most entities. This ASU is effective for annual periods beginning after December 15, 2024. This guidance is not expected to have a material impact on the Company's consolidated financial statements.

NOTE 4 – BUSINESS COMBINATIONS

Acquisitions

Heritage Southeast Bank

On January 1, 2023, the Company completed its acquisition of Heritage Southeast Bancorporation, Inc. ("HSBI"), pursuant to an Agreement and Plan of Merger dated July 27, 2022, by and between the Company and HSBI (the "HSBI Merger Agreement"). Upon the completion of the merger of HSBI with and into the Company, Heritage Southeast Bank ("Heritage Bank"), HSBI's wholly-owned subsidiary, was merged with and into The First Bank. Under the terms of the HSBI Merger Agreement, each share of HSBI common stock was converted into the right to receive 0.965 of a share of Company common stock. The Company paid a total consideration of $221.5 million to the former HSBI shareholders as consideration in the acquisition, which included 6,920,422 shares of the Company's common stock, and $16 thousand in cash in lieu of fractional shares. The HSBI acquisition provided the opportunity for the Company to expand its operations in Georgia and the Florida panhandle.

In connection with the acquisition of HSBI, the Company recorded $91.9 million of goodwill, of which $3.2 million funded the ACL for estimated losses on the acquired PCD loans, and $43.7 million core deposit intangible. Goodwill is not deductible for income taxes. The core deposit intangible will be amortized to expense over 10 years.

The following table summarizes the finalized fair values of the assets acquired and liabilities assumed including the goodwill generated from the transaction on January 1, 2023, along with valuation adjustments that have been made since initially reported.

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($ in thousands)	As Initially Reported		Measurement Period Adjustments		As Adjusted
Identifiable assets:
Cash and due from banks	$	106,973	$	(180)	$	106,793
Investments	172,775		—		172,775
Loans	1,155,712		—		1,155,712
Core deposit intangible	43,739		—		43,739
Personal and real property	35,963		—		35,963
Other real estate owned	857		332		1,189
Bank owned life insurance	35,579		—		35,579
Deferred taxes	6,761		(632)		6,129
Interest receivable	4,349		—		4,349
Other assets	3,103		—		3,103
Total assets	1,565,811		(480)		1,565,331
Liabilities and equity:
Deposits	1,392,432		—		1,392,432
Trust Preferred	9,015		—		9,015
Other liabilities	34,271		—		34,271
Total liabilities	1,435,718		—		1,435,718
Net assets acquired	130,093		(480)		129,613
Consideration paid	221,538		—		221,538
Goodwill	$	91,445	$	480	$	91,925

During the fourth quarter of 2023, the Company finalized its analysis and valuation adjustments have been made to cash and due from banks, other real estate owned, and deferred taxes since initially reported.

Beach Bancorp, Inc.

On August 1, 2022, the Company completed its acquisition of Beach Bancorp, Inc. ("BBI"), pursuant to an Agreement and Plan of Merger dated April 26, 2022, by and between the Company and BBI (the "BBI Merger Agreement"). Upon the completion of the merger of BBI with and into the Company, Beach Bank, BBI's wholly-owned subsidiary, was merged with and into The First Bank. Under the terms of the BBI Merger Agreement, each share of BBI common stock and each share of BBI preferred stock was converted into the right to receive 0.1711 of a share of Company common stock (the "BBI Exchange Ratio"), and all stock options awarded under the BBI equity plans were converted automatically into an option to purchase shares of Company common stock on the same terms and conditions as applicable to each such BBI option as in effect immediately prior to the effective time, with the number of shares underlying each such option and the applicable exercise price adjusted based on the BBI Exchange Ratio. The BBI merger provides the opportunity for the Company to expand its operations in the Florida panhandle and enter the Tampa market. The Company paid consideration of $101.5 million to the former BBI shareholders including 3,498,936 shares of the Company's common stock and $1 thousand in cash in lieu of fractional shares, and also assumed options entitling the owners thereof to purchase an additional 310,427 shares of the Company's common stock.

In connection with the acquisition of BBI, the Company recorded $23.7 million of goodwill, of which $1.3 million funded the ACL for estimated losses on the acquired PCD loans, and $9.8 million core deposit intangible. Goodwill is not deductible for income taxes. The core deposit intangible will be amortized to expense over 10 years.

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The following table summarizes the finalized fair values of the assets acquired and liabilities assumed including the goodwill generated from the transaction on August 1, 2022, along with valuation adjustments that have been made since initially reported.


($ in thousands)	As Initially Reported		Measurement Period Adjustments		As Adjusted
Purchase price:
Cash and stock	$	101,470	$	—	$	101,470
Total purchase price	101,470		—		101,470
Identifiable assets:
Cash	$	23,939	$	—	$	23,939
Investments	22,907		(264)		22,643
Loans	482,903		2,268		485,171
Other real estate	8,797		(580)		8,217
Bank owned life insurance	10,092		—		10,092
Core deposit intangible	9,791		—		9,791
Personal and real property	13,825		(1,868)		11,957
Deferred tax asset	28,105		(970)		27,135
Other assets	9,649		(414)		9,235
Total assets	610,008		(1,828)		608,180
Liabilities and equity:
Deposits	490,588		3		490,591
Borrowings	25,000		—		25,000
Other liabilities	14,772		—		14,772
Total liabilities	530,360		3		530,363
Net assets acquired	79,648		(1,831)		77,817
Goodwill	$	21,822	$	1,831	$	23,653

During the third quarter of 2023, the Company finalized its analysis and valuation adjustments that have been made to investments, loans, other real estate, personal and real property, deferred tax asset, other assets, and deposits.

NOTE 5 – EARNINGS APPLICABLE TO COMMON SHAREHOLDERS

Basic per share data is calculated based on the weighted-average number of common shares outstanding during the reporting period. Diluted per share data includes any dilution from potential common stock outstanding, such as restricted stock grants. There were no anti-dilutive common stock equivalents excluded in the calculations.

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The following tables disclose the reconciliation of the numerators and denominators of the basic and diluted computations applicable to common shareholders.


($ in thousands, except per share amount)	Three Months Ended September 30, 2024					Three Months Ended September 30, 2023
	Net Income (Numerator)		Shares (Denominator)	Per Share Data		Net Income (Numerator)		Shares (Denominator)	Per Share Data
Basic earnings per share	$	18,571	31,516,823	$	0.59	$	24,360	31,405,439	$	0.78
Effect of dilutive shares:
Restricted stock grants			196,562					204,125
Diluted earnings per share	$	18,571	31,713,385	$	0.59	$	24,360	31,609,564	$	0.77


($ in thousands, except per share amount)	For the Nine Months Ended September 30, 2024					For the Nine Months Ended September 30, 2023
	Net Income (Numerator)		Shares (Denominator)	Per Share Data		Net Income (Numerator)		Shares (Denominator)	Per Share Data
Basic earnings per share	$	58,896	31,506,556	$	1.87	$	64,410	31,364,420	$	2.05
Effect of dilutive shares:
Restricted stock grants			169,311					199,862
Diluted earnings per share	$	58,896	31,675,867	$	1.86	$	64,410	31,564,282	$	2.04

The Company granted 141,457 shares and 118,689 shares of restricted stock in the first quarter of 2024 and 2023, respectively. The Company granted 2,847 shares and 45,773 shares of restricted stock in the second quarter of 2024 and 2023, respectively. The Company granted 2,800 shares and 2,711 shares of restricted stock in the third quarter of 2024 and 2023, respectively.

NOTE 6 – COMPREHENSIVE INCOME

As presented in the Consolidated Statements of Comprehensive Income (Loss), comprehensive income includes net income and other comprehensive income. The Company’s sources of other comprehensive income are unrealized gains and losses on available-for-sale securities, which are also recognized as separate components of equity.

NOTE 7 – FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. At September 30, 2024, and December 31, 2023, these financial instruments consisted of the following:


($ in thousands)	September 30, 2024				December 31, 2023
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to make loans	$	34,997	$	50,348	$	34,380	$	50,226
Unused lines of credit	165,324		729,288		231,335		605,646
Standby letters of credit	13,346		15,514		15,573		13,114

Commitments to make loans are generally made for periods of 90 days or less. The fixed rate loan commitments have interest rates ranging from 0.0% to 18.0% and maturities ranging from approximately 1 year to 30 years.

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ALLOWANCE FOR CREDIT LOSSES (“ACL”) ON OFF BALANCE SHEET CREDIT (“OBSC”) EXPOSURES

The Company maintains a separate ACL on OBSC exposures, including unfunded commitments and letters of credit, which is included on the accompanying consolidated balance sheet as of September 30, 2024 and December 31, 2023. The ACL on OBSC exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.

Changes in the ACL on OBSC exposures were as follows for the presented periods:


($ in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Balance at beginning of period	$	2,075	$	2,075	$	2,075	$	1,325
Credit loss expense related to OBSC exposures	—		—		—		750
Balance at end of period	$	2,075	$	2,075	$	2,075	$	2,075

Adjustments to the ACL on OBSC exposures are recorded to provision for credit losses related to OBSC exposures. The Company recorded no ACL provision for the three months period ended September 30, 2024 and September 30, 2023. For the nine months period ended September 30, 2024, the Company recorded no provision to the ACL on OBSC exposures compared to $750 thousand for the same period in 2023. The ACL on OBSC exposures for the nine months ended September 30, 2023 includes the day one provision for unfunded commitments related to the HSBI acquisition and an increase in unfunded commitments.

No credit loss estimate is reported for OBSC exposures that are unconditionally cancellable by the Company or for undrawn amounts under such arrangements that may be drawn prior to the cancellation on the arrangement.

NOTE 8 – FAIR VALUE DISCLOSURES AND REPORTING, THE FAIR VALUE OPTION AND FAIR VALUE MEASUREMENTS

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the assets or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the factors that market participants would likely consider in pricing an asset or liability.

The following methods and assumptions were used by the Company to estimate its financial instrument fair values disclosed at September 30, 2024 and December 31, 2023:

•Investment Securities: The fair value for investment securities is determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2), using matrix pricing. Matrix pricing is a mathematical technique commonly used to price debt securities that are not actively traded, valuing debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).

•Loans Held for Sale - Loans held for sale are carried at fair value in the aggregate as determined by the outstanding commitments from investors. As such, we classify those loans subjected to recurring fair value adjustments as Level 2 of the fair value hierarchy.

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•Collateral Dependent Loans: Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. If the impaired loan is identified as collateral dependent, then the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between the comparable sales and income data available for similar loans and collateral underlying such loans. Such adjustments, if any, result in a Level 3 classification of the inputs for determining fair value. The Company generally adjusts the appraisal down by approximately 10 percent to account for cost associated with litigation and collection. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on a quarterly basis for additional impairment.

•Other Real Estate Owned: Other real estate owned consists of properties obtained through foreclosure. The adjustment at the time of foreclosure is recorded through the allowance for credit losses. Fair value of other real estate owned is based on current independent appraisals of the collateral less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals, which are updated no less frequently than annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach with data from comparable properties. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments, if any, result in a Level 3 classification of the inputs for determining fair value. In the determination of fair value subsequent to foreclosure, management also considers other factors or recent developments, such as changes in market conditions from the time of valuation and anticipated sales values considering plans for disposition, which could result in an adjustment to lower the collateral value estimates indicated in the appraisals. The Company generally adjusts the appraisal down by approximately 10 percent to account for carrying costs. Periodic revaluations are classified as Level 3 in the fair value hierarchy since assumptions are used that may not be observable in the market. Due to the subjective nature of establishing the fair value when the asset is acquired, the actual fair value of the other real estate owned or foreclosed asset could differ from the original estimate. If it is determined the fair value declines subsequent to foreclosure, a valuation allowance is recorded through other non-interest income. Operating costs associated with the assets after acquisition are also recorded as non-interest expense. Gains and losses on the disposition of other real estate owned and foreclosed assets are netted and recorded in other non-interest income. Other real estate owned is classified within Level 3 of the fair value hierarchy.

•Interest Rate Swaps: The Company offers interest rate swaps to certain commercial loan customers to allow them to hedge the risk of rising interest rates on their variable rate loans. The Company originates a variable rate loan and enters into a variable to fixed interest rate swap with the customer. The Company also enters into an offsetting swap with a correspondent bank. These back-to-back agreements are intended to offset each other and allow the Company to originate a variable rate loan, while providing the contract or fixed interest payments for the customer. In addition, the Company will enter into risk participation agreements ("RPA"). Under an RPA-in agreement, a derivative liability, the Company assumes, or participates in, a portion of the credit risk associated with the interest rate swap position with the commercial borrower, for a fee received from the other bank. Under an RPA-out agreement, a derivative asset, the Company participates out a portion of the credit risk associated with the interest rate swap position executed with the commercial borrower, for a fee paid to the participating bank. RPAs are derivative financial instruments recorded at fair value. Although we have determined that a majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit assumptions associated with our risk participation agreements utilize Level 3 inputs.

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Estimated fair values for the Company’s financial instruments are as follows, as of the dates noted:


September 30, 2024	Carrying Amount		Estimated Fair Value		Fair Value Measurements
($ in thousands)
					Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)


Financial Instruments:
Assets:
Cash and cash equivalents	$	214,135	$	214,135	$	214,135	$	—	$	—
Securities available-for-sale	1,060,014		1,060,014		5,181		1,028,714		26,119
Securities held-to-maturity	602,328		574,750		—		574,750		—
Loans held for sale	2,987		2,987		—		2,987		—
Loans, net	5,262,890		5,023,940		—		—		5,023,940
Accrued interest receivable	33,384		33,384		—		7,342		26,042
Interest rate swaps	11,389		11,389		—		11,352		37
Liabilities:
Noninterest-bearing deposits	$	1,796,746	$	1,796,746	$	—	$	1,796,746	$	—
Interest-bearing deposits	4,763,966		4,702,034		—		4,702,034		—
Subordinated debentures	123,645		112,327		—		—		112,327
FHLB and other borrowings	207,500		207,500		—		207,500		—
Accrued interest payable	13,720		13,720		—		13,720		—
Interest rate swaps	11,388		11,388		—		11,352		36

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December 31, 2023	Carrying Amount		Estimated Fair Value		Fair Value Measurements
($ in thousands)
					Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)


Financial Instruments:
Assets:
Cash and cash equivalents	$	355,147	$	355,147	$	355,147	$	—	$	—
Securities available-for-sale	1,039,322		1,039,322		16,675		1,004,434		18,213
Securities held-to-maturity	654,539		615,944		—		615,944		—
Loans held for sale	2,914		2,914		—		2,914		—
Loans, net	5,116,010		4,877,935		—		—		4,877,935
Accrued interest receivable	33,300		33,300		—		8,632		24,668
Interest rate swaps	12,170		12,170		—		12,129		41
Liabilities:
Non-interest-bearing deposits	$	1,849,013	$	1,849,013	$	—	$	1,849,013	$	—
Interest-bearing deposits	4,613,859		4,430,227		—		4,430,227		—
Subordinated debentures	123,386		109,426		—		—		109,426
FHLB and other borrowings	390,000		390,000		—		390,000		—
Accrued interest payable	22,702		22,702		—		22,702		—
Interest rate swaps	12,175		12,175		—		12,129		46

Assets measured at fair value on a recurring basis are summarized below:


September 30, 2024
($ in thousands)	Fair Value		Fair Value Measurements Using
			Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Available-for-sale
U.S. Treasury	$	5,181	$	5,181	$	—	$	—
Obligations of U.S. Government agencies and sponsored entities	98,580		—		98,580		—
Municipal securities	420,701		—		394,611		26,090
Mortgage-backed securities	502,435		—		502,435		—
Corporate obligations	33,117		—		33,088		29
Total available-for-sale	$	1,060,014	$	5,181	$	1,028,714	$	26,119
Loans held for sale	$	2,987	$	—	$	2,987	$	—
Interest rate swaps	$	11,389	$	—	$	11,352	$	37
Liabilities:
Interest rate swaps	$	11,388	$	—	$	11,352	$	36

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December 31, 2023
($ in thousands)	Fair Value		Fair Value Measurements Using
			Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available-for-sale
U.S. Treasury	$	16,675	$	16,675	$	—	$	—
Obligations of U.S. Government agencies and sponsored entities	104,923		—		104,923		—
Municipal securities	438,466		—		420,283		18,183
Mortgage-backed securities	441,661		—		441,661		—
Corporate obligations	37,597		—		37,567		30
Total available-for-sale	$	1,039,322	$	16,675	$	1,004,434	$	18,213
Loans held for sale	$	2,914	$	—	$	2,914	$	—
Interest rate swaps	$	12,170	$	—	$	12,129	$	41
Liabilities:
Interest rate swaps	$	12,175	$	—	$	12,129	$	46

The following is a reconciliation of activity for assets measured at fair value based on significant unobservable inputs (Level 3) information.


	Bank-Issued Trust Preferred Securities
($ in thousands)	2024		2023
Balance, January 1	$	30	$	31
Paydowns	(1)		—
Balance at September 30	$	29	$	31


	Municipal Securities
($ in thousands)	2024		2023
Balance, January 1	$	18,183	$	15,117
Maturities, calls and paydowns	(580)		(532)
Transfer from level 2 to level 3	8,384		6,085
Transfer from level 3 to level 2	(270)		—
Unrealized gain (loss) included in comprehensive income	373		(1,177)
Balance at September 30	$	26,090	$	19,493


	Interest Rate Swaps - Risk Participations
($ in thousands)	2024		2023
Balance, January 1	$	(5)	$	—
RPA-in	10		11
RPA-out	(4)		—
Balance at September 30	$	1	$	11

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The following methods and assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a recurring basis at September 30, 2024 and December 31, 2023. The following tables present quantitative information about recurring Level 3 fair value measurements.

($ in thousands)

Trust Preferred Securities

Fair Value

Valuation Technique

Significant Unobservable
Inputs

Range of Inputs

September 30, 2024

Discounted cash flow

Probability of default

7.09% - 7.45%

December 31, 2023

Discounted cash flow

Probability of default

7.81% - 7.89%

Municipal Securities

Fair Value

Valuation Technique

Significant
Unobservable Inputs

Range of Inputs

September 30, 2024

26,090

Discounted cash flow

Discount Rate

2.60% - 5.56%

December 31, 2023

18,183

Discounted cash flow

Discount Rate

2.34% - 5.50%

Interest Rate Swaps - Risk Participations

Fair Value

Valuation Technique

Significant
Unobservable Inputs

Range of Inputs

September 30, 2024

Credit Value Adjustment

Credit Spread

225 bps - 300 bps

Recovery Rate

70%

December 31, 2023

(5)

Credit Value Adjustment

Credit Spread

225 bps - 300 bps

Recovery Rate

70%

The following table presents the fair value measurement of assets measured at fair value on a non-recurring basis and the level within the fair value hierarchy in which the fair value measurements were classified at September 30, 2024 and December 31, 2023.


September 30, 2024
($ in thousands)			Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Collateral dependent loans	$	2,894	$	—	$	—	$	2,894
Other real estate owned	7,314		—		—		7,314


December 31, 2023
($ in thousands)			Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Collateral dependent loans	$	2,494	$	—	$	—	$	2,494
Other real estate owned	8,320		—		—		8,320

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NOTE 9 - SECURITIES

The following table summarizes the amortized cost, gross unrealized gains and losses, and estimated fair values of securities available-for-sale (“AFS”) and securities held-to-maturity at September 30, 2024 and December 31, 2023.


($ in thousands)	September 30, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale securities:
U.S. Treasury	$	5,294	$	—	$	113	$	5,181
Obligations of U.S. government agencies and sponsored entities	109,409		—		10,829		98,580
Tax-exempt and taxable obligations of states and municipal subdivisions	459,912		562		39,773		420,701
Mortgage-backed securities - residential	312,607		282		26,419		286,470
Mortgage-backed securities - commercial	228,888		2,454		15,377		215,965
Corporate obligations	35,553		—		2,436		33,117
Total available-for-sale	$	1,151,663	$	3,298	$	94,947	$	1,060,014
Held-to-maturity:
U.S. Treasury	$	52,207	$	—	$	1,306	$	50,901
Obligations of U.S. government agencies and sponsored entities	32,946		3		1,003		31,946
Tax-exempt and taxable obligations of states and municipal subdivisions	245,240		8,980		12,028		242,192
Mortgage-backed securities - residential	131,045		—		11,177		119,868
Mortgage-backed securities - commercial	130,890		11		9,408		121,493
Corporate obligations	10,000		—		1,650		8,350
Total held-to-maturity	$	602,328	$	8,994	$	36,572	$	574,750

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($ in thousands)	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale securities:
U.S. Treasury	$	16,985	$	—	$	310	$	16,675
Obligations of U.S. government agencies sponsored entities	119,868		1		14,946		104,923
Tax-exempt and taxable obligations of states and municipal subdivisions	486,293		449		48,276		438,466
Mortgage-backed securities - residential	297,735		11		34,430		263,316
Mortgage-backed securities - commercial	198,944		76		20,675		178,345
Corporate obligations	41,347		—		3,750		37,597
Total available-for-sale	$	1,161,172	$	537	$	122,387	$	1,039,322
Held-to-maturity:
U.S. Treasury	$	89,688	$	—	$	2,804	$	86,884
Obligations of U.S. government agencies and sponsored entities	33,659		—		1,803		31,856
Tax-exempt and taxable obligations of states and municipal subdivisions	246,908		9,566		14,697		241,777
Mortgage-backed securities - residential	141,573		—		14,237		127,336
Mortgage-backed securities - commercial	132,711		—		12,334		120,377
Corporate obligations	10,000		—		2,286		7,714
Total held-to-maturity	$	654,539	$	9,566	$	48,161	$	615,944

ACL on Securities

Securities Available for Sale

Quarterly, the Company evaluates if a security has a fair value less than its amortized cost. Once these securities are identified, in order to determine whether a decline in fair value resulted from a credit loss or other factors, the Company performs further analysis as outlined below:

•Review the extent to which the fair value is less than the amortized cost and determine if the decline is indicative of credit loss or other factors.

•The securities that violate the credit loss trigger above would be subjected to additional analysis.

•If the Company determines that a credit loss exists, the credit portion of the allowance will be measured using the discounted cash flow (“DCF”) analysis using the effective interest rate. The amount of credit loss the Company records will be limited to the amount by which the amortized cost exceeds the fair value. The allowance for the calculated credit loss will be monitored going forward for further credit deterioration or improvement.

At both September 30, 2024 and December 31, 2023, the results of the analysis did not identify any securities where the decline was indicative of credit loss factors; therefore, no credit loss was recognized on any of the securities AFS.

Accrued interest receivable is excluded from the estimate of credit losses for securities AFS. Accrued interest receivable totaled $4.4 million and $5.2 million at September 30, 2024 and December 31, 2023, respectively and was reported in interest receivable on the accompanying Consolidated Balance Sheet.

All AFS securities were current with no securities past due or on nonaccrual as of September 30, 2024 and December 31, 2023.

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Securities Held to Maturity

At September 30, 2024 and December 31, 2023, the potential credit loss exposure was $216 thousand and $205 thousand, respectively and consisted of tax-exempt and taxable obligations of states and municipal subdivisions and corporate obligations securities. After applying appropriate probability of default (“PD”) and loss given default (“LGD”) assumptions, the total amount of current expected credit losses was deemed immaterial. Therefore, no reserve was recorded at September 30, 2024.

Accrued interest receivable is excluded from the estimate of credit losses for securities held-to-maturity. Accrued interest receivable totaled $2.6 million and $3.4 million at September 30, 2024 and December 31, 2023, respectively and was reported in interest receivable on the accompanying Consolidated Balance Sheet.

At both September 30, 2024 and December 31, 2023, the Company had no securities held-to-maturity that were past due 30 days or more as to principal or interest payments. The Company had no securities held-to-maturity classified as nonaccrual at both September 30, 2024 and December 31, 2023.

The Company monitors the credit quality of the debt securities held-to-maturity through the use of credit ratings. The Company monitors the credit ratings on a quarterly basis. The following table summarizes the amortized cost of debt securities held-to-maturity at September 30, 2024 and December 31, 2023, aggregated by credit quality indicators.


($ in thousands)	September 30, 2024		December 31, 2023
Aaa	$	381,093	$	431,527
Aa1/Aa2/Aa3	114,940		129,751
A1/A2	11,366		13,902
BBB	10,000		10,000
Not rated	84,929		69,359
Total	$	602,328	$	654,539

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The amortized cost and fair value of debt securities are shown by contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.


($ in thousands)	September 30, 2024
	Amortized Cost		Fair Value
Available-for-sale:
Due less than one year	$	40,601	$	40,444
Due after one year through five years	130,708		126,089
Due after five years through ten years	321,043		288,203
Due greater than ten years	117,816		102,843
Mortgage-backed securities - residential	312,607		286,470
Mortgage-backed securities - commercial	228,888		215,965
Total	$	1,151,663	$	1,060,014

Held-to-maturity:
Due less than one year	$	44,181	$	43,784
Due after one year through five years	30,815		29,515
Due after five years through ten years	61,196		58,841
Due greater than ten years	204,201		201,249
Mortgage-backed securities - residential	131,045		119,868
Mortgage-backed securities - commercial	130,890		121,493
Total	$	602,328	$	574,750

Total securities pledged as collateral, to secure public deposits and for other purposes, was $1.115 billion at September 30, 2024 and $1.095 billion at December 31, 2023, respectively.

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The following table summarizes securities in an unrealized loss position for which an allowance for credit losses has not been recorded at September 30, 2024 and December 31, 2023. The securities are aggregated by major security type and length of time in a continuous unrealized loss position:


($ in thousands)	September 30, 2024
	Losses < 12 Months				Losses 12 Months or >				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Available-for-sale:
U.S. Treasury	$	—	$	—	$	5,181	$	113	$	5,181	$	113
Obligations of U.S. government agencies and sponsored entities	167		1		98,267		10,828		98,434		10,829
Tax-exempt and taxable obligations of state and municipal subdivisions	12,322		1,364		368,468		38,409		380,790		39,773
Mortgage-backed securities - residential	15		—		239,105		26,419		239,120		26,419
Mortgage-backed securities - commercial	466		22		157,632		15,355		158,098		15,377
Corporate obligations	—		—		33,117		2,436		33,117		2,436
Total	$	12,970	$	1,387	$	901,770	$	93,560	$	914,740	$	94,947

Held-to-maturity:
U.S. Treasury	$	—	$	—	$	50,901	$	1,306	$	50,901	$	1,306
Obligations of U.S. government agencies and sponsored entities	—		—		31,166		1,003		31,166		1,003
Tax-exempt and taxable obligations of state and municipal subdivisions	7,297		85		101,870		11,943		109,167		12,028
Mortgage-backed securities - residential	—		—		119,868		11,177		119,868		11,177
Mortgage-backed securities - commercial	—		—		120,560		9,408		120,560		9,408
Corporate obligations	—		—		8,350		1,650		8,350		1,650
Total	$	7,297	$	85	$	432,715	$	36,487	$	440,012	$	36,572

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($ in thousands)	December 31, 2023
	Losses < 12 Months				Losses 12 Months or >				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Available-for-sale:
U.S. Treasury	$	—	$	—	$	16,675	$	310	$	16,675	$	310
Obligations of U.S. government agencies and sponsored entities	123		—		104,495		14,946		104,618		14,946
Tax-exempt and taxable obligations of state and municipal subdivisions	20,879		1,479		389,113		46,797		409,992		48,276
Mortgage-backed securities - residential	222		2		262,012		34,428		262,234		34,430
Mortgage-backed securities - commercial	2,896		52		170,256		20,623		173,152		20,675
Corporate obligations	—		—		37,597		3,750		37,597		3,750
Total	$	24,120	$	1,533	$	980,148	$	120,854	$	1,004,268	$	122,387

Held-to-maturity:
U.S. Treasury	$	—	$	—	$	86,884	$	2,804	$	86,884	$	2,804
Obligations of U.S. government agencies and sponsored entities	747		5		31,109		1,798		31,856		1,803
Tax-exempt and taxable obligations of state and municipal subdivisions	10,472		3,949		91,480		10,748		101,952		14,697
Mortgage-backed securities - residential	—		—		127,336		14,237		127,336		14,237
Mortgage-backed securities - commercial	920		2		119,457		12,332		120,377		12,334
Corporate obligations	—		—		7,714		2,286		7,714		2,286
Total	$	12,139	$	3,956	$	463,980	$	44,205	$	476,119	$	48,161

At September 30, 2024 and December 31, 2023, the Company’s securities portfolio consisted of 995 and 1,125 securities, respectively, which were in an unrealized loss position. Securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. The unrealized losses shown above are due to increases in market rates over the yields available at the time of purchase of the underlying securities and not credit quality. As of September 30, 2024 and December 31, 2023, the Company determined that it does not intend to sell and is not currently aware of any circumstances which will require it to sell any of the securities that are in an unrealized loss position prior to recovery of their amortized cost basis. As such, no allowance for credit losses was needed at September 30, 2024 and December 31, 2023.

Equity Securities

In the third quarter of 2024, the Company reclassified one of its securities from AFS to Other Securities. The equity security consists of our investment in a market-rate bond mutual fund that invests in high quality fixed income bonds, mainly government agency securities whose proceeds are designed to positively impact community development throughout the United States. The mutual fund focuses exclusively on providing affordable housing to low- and moderate-income borrowers and renters, including Majority Minority Census Tracts. The 2023 financial statements have been reclassified for comparative purposes to conform to the current period financial statement presentation.

As of September 30, 2024, and December 31, 2023, the Company had equity securities with carrying values totaling $8.2 million and $3.1 million, respectively.

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During the three months ended September 30, 2024, we recognized unrealized losses of $222 thousand and none during the same period in 2023 in net income on our equity securities. During the nine months ended September 30, 2024, we recognized an unrealized loss of $222 thousand and none for the same period in 2023 in net income on our equity securities. These unrealized gains and losses are recorded in the gain/loss on securities on the Consolidated Statements of Income.

NOTE 10 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

The Company uses four different categories to classify loans in its portfolio based on the underlying collateral securing each loan. The loans grouped together in each category have been determined to share similar risk characteristics with respect to credit quality. Those four categories are commercial, financial and agriculture, commercial real estate, consumer real estate, consumer installment;

Commercial, financial and agriculture – Commercial, financial and agriculture loans include loans to business entities issued for commercial, industrial, or other business purposes. This type of commercial loan shares a similar risk characteristic in that unlike commercial real estate loans, repayment is largely dependent on cash flow generated from the operation of the business.

Commercial real estate – Commercial real estate loans are grouped as such because repayment is mainly dependent upon either the sale of the real estate, operation of the business occupying the real estate, or refinance of the debt obligation. This includes both owner-occupied and non-owner occupied CRE secured loans, because they share similar risk characteristics related to these variables.

Consumer real estate – Consumer real estate loans consist primarily of loans secured by 1-4 family residential properties and/or residential lots. This includes loans for the purpose of constructing improvements on the residential property, as well as home equity lines of credit.

Consumer installment – Installment and other loans are all loans issued to individuals that are not for any purpose related to operation of a business, and not secured by real estate. Repayment on these loans is mostly dependent on personal income, which may be impacted by general economic conditions.

The following table shows the composition of the loan portfolio:


($ in thousands)	September 30, 2024		December 31, 2023
Loans held for sale
Mortgage loans held for sale	$	2,987	$	2,914
Total LHFS	$	2,987	$	2,914

Loans held for investment
Commercial, financial and agriculture (1)	$	748,664	$	800,324
Commercial real estate	3,235,566		3,059,155
Consumer real estate	1,287,144		1,252,795
Consumer installment	47,216		57,768
Total loans	5,318,590		5,170,042
Less allowance for credit losses	(55,700)		(54,032)
Net LHFI	$	5,262,890	$	5,116,010

____________________________________________________________


(1)			Loan balance includes $256 thousand and $386 thousand in Paycheck Protection Program (“PPP”) loans as of September 30, 2024 and December 31, 2023, respectively.

Accrued interest receivable is not included in the amortized cost basis of the Company’s LHFI. At September 30, 2024 and December 31, 2023, accrued interest receivable for LHFI totaled $26.0 million and $24.7 million, respectively, with no related ACL and was reported in interest receivable on the accompanying consolidated balance sheet.

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Nonaccrual and Past Due LHFI

Past due LHFI are loans contractually past due 30 days or more as to principal or interest payments. Generally, the Company will place a delinquent loan in nonaccrual status when the loan becomes 90 days or more past due. At the time a loan is placed in nonaccrual status, all interest which has been accrued on the loan but remains unpaid is reversed and deducted from earnings as a reduction of reported interest income. No additional interest is accrued on the loan balance until the collection of both principal and interest becomes reasonably certain.

The following tables present the aging of the amortized cost basis in past due loans in addition to those loans classified as nonaccrual including purchase credit deteriorated (“PCD”) loans:


($ in thousands)	September 30, 2024
	Past Due 30 to 89 Days		Past Due 90 Days or More and Still Accruing		Nonaccrual		PCD		Total Past Due, Nonaccrual and PCD		Total LHFI		Nonaccrual and PCD with No ACL
Commercial, financial and agriculture (1)	$	2,660	$	527	$	667	$	342	$	4,196	$	748,664	$	270
Commercial real estate	3,962		—		8,387		456		12,805		3,235,566		837
Consumer real estate	7,440		928		3,709		2,609		14,686		1,287,144		1,643
Consumer installment	245		—		114		—		359		47,216		13
Total	$	14,307	$	1,455	$	12,877	$	3,407	$	32,046	$	5,318,590	$	2,763

___________________________________________________________


(1)			Total loan balance includes $256 thousand in PPP loans as of September 30, 2024.


	December 31, 2023
($ in thousands)	Past Due 30 to 89 Days		Past Due 90 Days or More and Still Accruing		Nonaccrual		PCD		Total Past Due, Nonaccrual and PCD		Total LHFI		Nonaccrual and PCD with No ACL
Commercial, financial and agriculture (1)	$	2,043	$	313	$	353	$	965	$	3,674	$	800,324	$	465
Commercial real estate	1,698		630		3,790		647		6,765		3,059,155		410
Consumer real estate	3,992		220		1,806		3,098		9,116		1,252,795		680
Consumer installment	180		—		31		—		211		57,768		—
Total	$	7,913	$	1,163	$	5,980	$	4,710	$	19,766	$	5,170,042	$	1,555

___________________________________________________________


(1)			Total loan balance includes $386 thousand in PPP loans as of December 31, 2023.

Acquired Loans

In connection with the acquisitions of HSBI and BBI, the Company acquired loans both with and without evidence of credit quality deterioration since origination. Acquired loans are recorded at their fair value at the time of acquisition with no carryover from the acquired institution's previously recorded allowance for credit losses. Acquired loans are accounted for following ASC 326, Financial Instruments - Credit Losses.

The fair value for acquired loans recorded at the time of acquisition is based upon several factors including the timing and payment of expected cash flows, as adjusted for estimated credit losses and prepayments, and then discounting these cash flows using comparable market rates. The resulting fair value adjustment is recorded in the form of premium or discount to the unpaid principal balance of each acquired loan. As it relates to acquired PCD loans, the net premium or net discount is adjusted to reflect the Company's allowance for credit losses ("ACL") recorded for PCD loans at the time of acquisition, and the remaining fair value adjustment is accreted or amortized into interest income over the remaining life of the loan. As it relates to acquired loans not classified as PCD ("non-PCD") loans, the credit loss and yield components of the fair value adjustments are aggregated, and the resulting net premium or net discount is accreted or amortized into

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interest income over the average remaining life of those loans. The Company records an ACL for non-PCD loans at the time of acquisition through provision expense, and therefore, no further adjustments are made to the net premium or net discount for non-PCD loans.

The estimated fair value of the non-PCD loans acquired in the BBI acquisition was $460.0 million, which is net of a $8.8 million discount. The gross contractual amounts receivable of the acquired non-PCD loans at acquisition was approximately $468.8 million, of which $6.4 million is the amount of contractual cash flows not expected to be collected.

The estimated fair value of the non-PCD acquired in the HSBI acquisition was $1.091 billion, which is net of a $33.7 million discount. The gross contractual amounts receivable of the acquired non-PCD loans at acquisition was approximately $1.125 billion, of which $16.5 million is the amount of contractual cash flows not expected to be collected.

The following table shows the carrying amount of loans acquired in the BBI and HSBI acquisitions for which there was, at the date of acquisition, more than insignificant deterioration of credit quality since origination:


($ in thousands)	BBI		HSBI
Purchase price of loans at acquisition	$	27,669	$	52,356
Allowance for credit losses at acquisition	1,303		3,176
Non-credit discount (premium) at acquisition	530		2,325
Par value of acquired loans at acquisition	$	29,502	$	57,857

As of September 30, 2024, and December 31, 2023 the amortized cost of the Company’s PCD loans totaled $50.8 million and $57.8 million, respectively, which had an estimated ACL of $2.7 million and $3.7 million, respectively.

Loan Modifications

The Company adopted ASU No. 2022-02 effective January 1, 2023. These amendments eliminate the TDR recognition and measurement guidance and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty.

Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, and other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.

In some cases, the Company provides multiple types of concessions on one loan. Typically, one type of concession, such as term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. For loans included in the "combination" columns below, multiple types of modifications have been made on the same loan within the current reporting period. The combination is at least two of the following: a term extension, principal forgiveness, an other-than-insignificant payment delay and/or an interest rate reduction.

The following table presents the amortized cost basis of loans that were both experiencing financial difficulty and modified during the nine months ended September 30, 2024 and September 30, 2023, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below:


($ in thousands)
September 30, 2024	Payment Delay		Payment Modification		Term Extension		Percentage of Total Loans Held for Investment
Commercial, financial and agriculture	$	43	$	100	$	—	0.01	%
Commercial real estate	—		—		720		0.02	%
Consumer real estate	—		24		761		0.06	%
Total	$	43	$	124	$	1,481	0.03	%

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September 30, 2023	Term Extension		Percentage of Total Loans Held for Investment
Consumer real estate	$	413	0.01	%
Total	$	413	0.01	%

The Company has not committed to lend additional amounts to the borrowers included in the previous table.

Collateral Dependent Loans

The following table presents the amortized cost basis of collateral dependent individually evaluated loans by class of loans as of September 30, 2024 and December 31, 2023:


($ in thousands)
September 30, 2024	Real Property		Equipment		Miscellaneous		Total
Commercial, financial and agriculture	$	—	$	72	$	399	$	471
Commercial real estate	838		—		—		838
Consumer real estate	1,762		—		—		1,762
Consumer installment	—		—		13		13
Total	$	2,600	$	72	$	412	$	3,084


December 31, 2023	Real Property		Equipment		Miscellaneous		Total
Commercial, financial and agriculture	$	—	$	496	$	918	$	1,414
Commercial real estate	710		—		—		710
Consumer real estate	778		—		—		778
Total	$	1,488	$	496	$	918	$	2,902

A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided substantially through the sale of the collateral. The following provides a qualitative description by class of loan of the collateral that secures the Company’s collateral dependent LHFI:

•Commercial, financial and agriculture – Loans within these loan classes are secured by equipment, inventory, accounts receivable, and other non-real estate collateral.

•Commercial real estate – Loans within these loan classes are secured by commercial real property.

•Consumer real estate - Loans within these loan classes are secured by consumer real property.

•Consumer installment - Loans within these loan classes are secured by consumer goods, equipment, and non-real estate collateral.

There have been no significant changes to the collateral that secures these financial assets during the period.

Loan Participations

The Company has loan participations, which qualify as participating interest, with other financial institutions. As of September 30, 2024, these loans totaled $325.5 million, of which $181.5 million had been sold to other financial institutions and $144.0 million was purchased by the Company. As of December 31, 2023, these loans totaled $304.0 million, of which $165.9 million had been sold to other financial institutions and $138.1 million was purchased by the Company. The loan participations convey proportionate ownership rights with equal priority to each participating interest holder; involving no recourse (other than ordinary representations and warranties) to, or subordination by, any participating interest holder; all cash flows are divided among the participating interest holders in proportion to each holder’s share of ownership; and no holder has the right to pledge the entire financial asset unless all participating interest holders agree.

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Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually to classify the loans as to credit risk. The Company uses the following definitions for risk ratings:

Pass: Loans classified as pass are deemed to possess average to superior credit quality, requiring no more than normal attention.

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

These above classifications were the most current available as of September 30, 2024, and were generally updated within the prior year.

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The tables below present the amortized cost basis of loans by credit quality indicator and class of loans based on the most recent analysis performed at September 30, 2024 and December 31, 2023. Revolving loans converted to term as of the nine months ended September 30, 2024 and December 31, 2023 were not material to the total loan portfolio.


As of September 30, 2024	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Total
($ in thousands)	2024		2023		2022		2021		2020		Prior
Commercial, financial and
agriculture:
Risk Rating
Pass	$	92,130	$	88,294	$	110,651	$	88,411	$	34,074	$	80,766	$	240,163	$	734,489
Special mention	—		1,103		73		628		2,368		759		4,933		9,864
Substandard	—		908		544		369		293		1,530		667		4,311
Doubtful	—		—		—		—		—		—		—		—
Total commercial, financial and agriculture	$	92,130	$	90,305	$	111,268	$	89,408	$	36,735	$	83,055	$	245,763	$	748,664
Current period gross write offs	$	—	$	70	$	159	$	287	$	11	$	305	$	—	$	832

Commercial real estate:
Risk Rating
Pass	$	353,455	$	392,267	$	824,061	$	512,024	$	340,788	$	720,312	$	3,364	$	3,146,271
Special mention	1,374		—		1,340		5,827		2,929		19,831		—		31,301
Substandard	583		1,425		12,850		4,623		1,556		36,957		—		57,994
Doubtful	—		—		—		—		—		—		—		—
Total commercial real estate	$	355,412	$	393,692	$	838,251	$	522,474	$	345,273	$	777,100	$	3,364	$	3,235,566
Current period gross write offs	$	—	$	—	$	—	$	20	$	—	$	71	$	—	$	91

Consumer real estate:
Risk Rating
Pass	$	141,382	$	152,809	$	303,506	$	197,321	$	117,042	$	193,986	$	156,879	$	1,262,925
Special mention	—		—		423		489		—		1,815		668		3,395
Substandard	403		1,382		3,611		1,372		2,294		8,964		2,798		20,824
Doubtful	—		—		—		—		—		—		—		—
Total consumer real estate	$	141,785	$	154,191	$	307,540	$	199,182	$	119,336	$	204,765	$	160,345	$	1,287,144
Current period gross write offs	$	—	$	—	$	357	$	—	$	—	$	18	$	—	$	375

Consumer installment:
Risk Rating
Pass	$	12,992	$	12,498	$	7,411	$	4,862	$	1,628	$	1,431	$	6,200	$	47,022
Special mention	—		52		89		9		27		—		17		194
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total consumer installment	$	12,992	$	12,550	$	7,500	$	4,871	$	1,655	$	1,431	$	6,217	$	47,216
Current period gross write offs	$	94	$	289	$	182	$	87	$	58	$	882	$	32	$	1,624

Total
Pass	$	599,959	$	645,868	$	1,245,629	$	802,618	$	493,532	$	996,495	$	406,606	$	5,190,707
Special mention	1,374		1,155		1,925		6,953		5,324		22,405		5,618		44,754
Substandard	986		3,715		17,005		6,364		4,143		47,451		3,465		83,129
Doubtful	—		—		—		—		—		—		—		—
Total	$	602,319	$	650,738	$	1,264,559	$	815,935	$	502,999	$	1,066,351	$	415,689	$	5,318,590
Current period gross write offs	$	94	$	359	$	698	$	394	$	69	$	1,276	$	32	$	2,922

Table of Contents


As of December 31, 2023	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Total
($ in thousands)	2023		2022		2021		2020		2019		Prior
Commercial, financial and:
agriculture
Risk Rating
Pass	$	102,263	$	150,420	$	113,487	$	47,313	$	36,065	$	64,020	$	281,646	$	795,214
Special mention	—		—		—		141		797		3		10		951
Substandard	451		330		121		185		550		1,894		628		4,159
Doubtful	—		—		—		—		—		—		—		—
Total commercial, financial and agriculture	$	102,714	$	150,750	$	113,608	$	47,639	$	37,412	$	65,917	$	282,284	$	800,324
Current period gross write offs	$	14	$	51	$	225	$	139	$	206	$	110	$	—	$	745

Commercial real estate:
Risk Rating
Pass	$	385,954	$	825,505	$	558,742	$	377,085	$	253,746	$	569,428	$	6,397	$	2,976,857
Special mention	—		660		6,118		3,111		9,545		22,648		—		42,082
Substandard	136		7,293		393		566		5,427		26,401		—		40,216
Doubtful	—		—		—		—		—		—		—		—
Total commercial real estate	$	386,090	$	833,458	$	565,253	$	380,762	$	268,718	$	618,477	$	6,397	$	3,059,155
Current period gross write offs	$	—	$	—	$	193	$	—	$	—	$	57	$	—	$	250

Consumer real estate:
Risk Rating
Pass	$	176,144	$	334,056

FIRST BANCSHARES INC /MS/ 10-Q