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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ________
Commission file number: 000-22507
THE FIRST BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Mississippi64-0862173
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $1.00
FBMSThe Nasdaq Stock Market
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, 25,277,502 shares issued and 24,027,895 outstanding as of November 2, 2022.
Auditor Firm PCAOB ID: 686Auditor Name: FORVIS, LLPAuditor Location: Jackson, MS


The First Bancshares, Inc.
Form 10-Q
Quarter Ended September 30, 2022
Index
2

PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE FIRST BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS
($ in thousands)
(Unaudited)
September 30,
2022
December 31,
2021
ASSETS
Cash and due from banks$71,555 $115,232 
Interest-bearing deposits with banks92,286 804,481 
Total cash and cash equivalents163,841 919,713 
Securities available-for-sale, at fair value (amortized cost: $1,596,290 - 2022; $1,741,153 - 2021; allowance for credit losses: $0)
1,379,410 1,751,832 
Securities held to maturity, net of allowance for credit losses of $0 (fair value: $532,688 - 2022; $0 - 2021)
593,553  
Other securities31,060 22,226 
Total securities2,004,023 1,774,058 
Loans held for sale2,225 7,678 
Loans held for investment3,719,388 2,959,553 
Allowance for credit losses(38,356)(30,742)
Net loans held for investment3,681,032 2,928,811 
Interest receivable24,570 23,256 
Premises and equipment140,533 125,959 
Operating lease right-of-use assets7,901 4,095 
Finance lease right-of-use assets2,046 2,394 
Cash surrender value of bank-owned life insurance95,351 87,420 
Goodwill178,764 156,663 
Other real estate owned10,328 2,565 
Other assets144,234 44,802 
Total assets$6,454,848 $6,077,414 
LIABILITIES AND SHAREHOLDERS' EQUITY  
Liabilities:
Deposits:  
Noninterest-bearing$1,770,848 $1,550,381 
Interest-bearing3,780,450 3,676,403 
Total deposits5,551,298 5,226,784 
Interest payable1,365 1,711 
Borrowed funds90,000  
Subordinated debentures144,952 144,726 
Operating lease liabilities8,092 4,192 
Finance lease liabilities1,962 2,094 
Allowance for credit losses on off-balance sheet credit exposures1,220 1,070 
Other liabilities34,488 20,665 
Total liabilities5,833,377 5,401,242 
Shareholders’ equity:  
Common stock, par value $1 per share, 40,000,000 shares authorized; 25,277,727 shares issued at September 30, 2022, and 21,668,644 shares issued at December 31, 2021, respectively
25,278 21,669 
Additional paid-in capital558,181 459,228 
Retained earnings241,132 206,228 
Accumulated other comprehensive (loss) income (162,009)7,978 
Treasury stock, at cost, 1,249,607 shares at September 30, 2022 and 649,607 shares at December 31, 2021
(41,111)(18,931)
Total shareholders’ equity621,471 676,172 
Total liabilities and shareholders’ equity$6,454,848 $6,077,414 
See Notes to Consolidated Financial Statements
3

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,
2022202120222021
Interest and dividend income:
Interest and fees on loans$42,274 $37,480 $111,091 $114,368 
Interest and dividends on securities:
Taxable interest and dividends8,723 5,033 23,247 12,641 
Tax exempt interest2,875 1,905 8,077 5,748 
Interest on federal funds sold and interest-bearing deposits in other banks 2 17 47 103 
Total interest income53,874 44,435 142,462 132,860 
Interest expense:
Interest on deposits2,748 2,588 6,937 9,752 
Interest on borrowed funds1,978 1,819 5,638 5,801 
Total interest expense4,726 4,407 12,575 15,553 
Net interest income49,148 40,028 129,887 117,307 
Provision for credit losses, LHFI4,300  4,750  
Provision for credit losses, OBSC exposures  150  
Net interest income after provision for credit losses44,848 40,028 124,987 117,307 
Non-interest income:
Service charges on deposit accounts2,219 1,846 6,297 5,363 
(Loss) gain on securities1 11 (82)107 
Gain on acquisition  281  
Government awards/grants  1,826 873 1,826 
BOLI death proceeds  1,630  
(Loss) gain on sale of premises and equipment (397)(114)(383)
Other6,802 6,300 19,958 20,968 
Total non-interest income9,022 9,586 28,843 27,881 
Non-interest expense:
Salaries and employee benefits19,099 16,246 53,135 48,337 
Occupancy and equipment3,826 3,922 11,530 11,614 
Acquisition expense/charter conversion3,640 5 5,220 5 
Other9,338 8,880 25,563 23,814 
Total non-interest expense35,903 29,053 95,448 83,770 
Income before income taxes 17,967 20,561 58,382 61,418 
Income tax expense3,924 4,429 11,758 13,042 
Net income$14,043 $16,132 $46,624 $48,376 
Basic earnings per share$0.61 $0.77 $2.18 $2.30 
Diluted earnings per share0.61 0.76 2.17 2.28 
See Notes to Consolidated Financial Statements
4

THE FIRST BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
($ in thousands)
(Unaudited)(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
Net income$14,043 $16,132 $46,624 $48,376 
Other comprehensive income (loss):  
Unrealized holding (losses) gains arising during the period on available-for-sale securities(67,785)(7,306)(227,641)(16,204)
Reclassification adjustment for losses (gains) included in net income(1)(11)82 (107)
Unrealized holding (losses) gains arising during the period on available-for-sale securities(67,786)(7,317)(227,559)(16,311)
Income tax (expense) benefit17,150 1,852 57,572 4,127 
Other comprehensive income (loss)(50,636)(5,465)(169,987)(12,184)
Comprehensive income (loss)$(36,593)$10,667 $(123,363)$36,192 
See Notes to Consolidated Financial Statements
5

THE FIRST BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
($ in thousands except per share data, unaudited)

Common StockAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury StockTotal
SharesAmountSharesAmount
Balance, January 1, 202121,598,993 $21,599 $456,919 $154,241 $25,816 (483,984)$(13,760)$644,815 
Net income— — — 16,644 — — — 16,644 
Common stock repurchased— — — — — (165,623)(5,171)(5,171)
Other comprehensive loss— — — — (9,615)— — (9,615)
Dividends on common stock, $0.13 per share
— — — (2,723)— — — (2,723)
Issuance of restricted stock grants 84,578 85 (85)— — — — — 
Restricted stock grants forfeited(500)(1)1 — — — — — 
Repurchase of restricted stock for payment of taxes(14,720)(15)(426)— — — — (441)
    Compensation expense — — 440 — — — — 440 
Balance, March 31, 202121,668,351 21,668 456,849 168,162 16,201 (649,607)(18,931)643,949 
Net income— — — 15,600 — — — 15,600 
Other comprehensive income— — — — 2,896 — — 2,896 
Dividends on common stock, $0.14 per share
— — — (2,942)— — — (2,942)
Issuance of restricted stock grants3,000 3 (3)— — — — — 
Restricted stock grants forfeited(1,021)(1)1 — — — — — 
    Compensation expense— — 549 — — — — 549 
Balance, June 30, 202121,670,330 21,670 457,396 180,820 19,097 (649,607)(18,931)660,052 
Net income— — — 16,132 — — — 16,132 
Other comprehensive income— — — — (5,465)— — (5,465)
Dividends on common stock, $0.15 per share
— — — (3,152)— — — (3,152)
Restricted stock grants forfeited(500)— — — — — — — 
Repurchase of restricted stock for payment of taxes(326)— (12)— — — — (12)
 Compensation expense— — 1,128 — — — — 1,128 
Balance, September 30, 202121,669,504 $21,670 $458,512 $193,800 $13,632 (649,607)$(18,931)$668,683 
6

THE FIRST BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY CONTINUED
($ in thousands except per share data, unaudited)
Common StockAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury StockTotal
SharesAmountSharesAmount
Balance, January 1, 202221,668,644 $21,669 $459,228 $206,228 $7,978 (649,607)$(18,931)$676,172 
Net income— — — 16,829 — — — 16,829 
Common stock repurchased— — — — — (600,000)(22,180)(22,180)
Other comprehensive loss— — — — (76,825)— — (76,825)
Dividends on common stock, $0.17 per share
— — — (3,468)— — — (3,468)
Issuance of restricted stock grants82,123 82 (82)— — — — — 
Restricted stock grants forfeited(1,000)(1)1 — — — — — 
Repurchase of restricted stock for payment of taxes(15,330)(16)(538)— — — — (554)
    Compensation expense— — 466 — — — — 466 
Balance, March 31, 202221,734,437 21,734 459,075 219,589 (68,847)(1,249,607)(41,111)590,440 
Net income— — — 15,753 — — — 15,753 
Other comprehensive loss— — — — (42,526)— — (42,526)
Dividends on common stock, $0.18 per share
— — — (3,688)— — — (3,688)
Issuance of restricted stock grants47,827 48 (48)— — — — — 
Restricted stock grants forfeited(1,000)(1)1 — — — — — 
Repurchase of restricted stock for payment of taxes(2,533)(2)(71)— — — — (73)
Compensation expense— — 546 — — — — 546 
Balance, June 30, 202221,778,731 21,779 459,503 231,654 (111,373)(1,249,607)(41,111)560,452 
Net income— — — 14,043 — — — 14,043 
Other comprehensive loss— — — — (50,636)— — (50,636)
Dividends on common stock, $0.19 per share
— — — (4,565)— — — (4,565)
Issuance of common shares for BBI acquisition3,498,936 3,499 97,970 — — — — 101,469 
Issuance of restricted stock grants60 — — — — — — — 
Compensation expense— — 708 — — — — 708 
Balance, September 30, 202225,277,727 $25,278 $558,181 $241,132 $(162,009)(1,249,607)$(41,111)$621,471 
See Notes to Consolidated Financial Statements
7

THE FIRST BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
(Unaudited)
Nine Months Ended
September 30,
20222021
Cash flows from operating activities:
Net income$46,624 $48,376 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion5,549 10,453 
Provision for credit loss4,900  
Loss on sale or writedown of ORE252 778 
Securities loss (gain)82 (107)
Acquisition gain(281) 
Loss (gain) on disposal of premises and equipment114 383 
Restricted stock expense1,720 2,117 
Increase in cash value of life insurance(1,576)(1,407)
Federal Home Loan Bank stock dividends(8)(26)
Residential loans originated and held for sale(113,058)(182,371)
Proceeds from sale of residential loans held for sale118,511 195,263 
Changes in:
Interest receivable166 3,200 
Interest payable(346)(758)
Operating lease liability3,900 (1,696)
Other, net1,844 2,667 
Net cash provided by operating activities68,393 76,872 
Cash flows from investing activities:  
Maturities, calls and paydowns of available-for-sale and held-to-maturity securities157,181 174,987 
Proceeds from sales of securities available-for-sale21,069  
Purchases of available-for-sale and held-to-maturity securities(609,218)(636,825)
Purchases of other securities(8,580)5,276 
Proceeds from other securities1,237  
Net (increase) decrease in loans(273,335)160,700 
Net changes in premises and equipment(5,756)(6,448)
Proceeds from sale of other real estate owned2,260 4,221 
Proceeds from the sale of land712  
Bank-owned life insurance – death proceeds1,630  
Purchase of bank-owned life insurance (12,330)
Cash received in excess of cash paid for acquisitions23,939  
Net cash used in investing activities(688,861)(310,419)
Cash flows from financing activities:  
(Decrease) increase in deposits(165,921)457,443 
Proceeds from borrowed funds270,001 24,025 
Repayments of borrowed funds(205,001)(138,672)
Principal payments on finance lease liabilities(132)(141)
Dividends paid on common stock(11,544)(8,682)
Cash paid to repurchase common stock(22,180)(5,171)
Payment of subordinated debt issuance costs (60)
Repurchase of restricted stock for payment of taxes(627)(453)
Net cash provided by (used in) financing activities(135,404)328,289 
Net change in cash and cash equivalents(755,872)94,742 
Beginning cash and cash equivalents919,713 562,554 
Ending cash and cash equivalents$163,841 $657,296 
8

Table of Contents             
THE FIRST BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS CONTINUED
($ in thousands)


(Unaudited)
Nine Months Ended
September 30,
20222021
Supplemental disclosures:  
Loans transferred to other real estate1,490 1,780 
Issuance of restricted stock grants130 86 
Dividends on restricted stock grants176 135 
Stock issued in connection with BBI acquisition101,469  
Lease liabilities arising from obtaining right-of-use assets600 14 
Lease liabilities arising from BBI acquisition5,437  
See Notes to Consolidated Financial Statements
9

THE FIRST BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2022
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, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. 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, 2021.
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 January 15, 2022, the Bank, then named The First, A National Banking Association, converted from a national banking association to a Mississippi state-chartered bank and changed its name to The First Bank. The First Bank is a member of the Federal Reserve System through the Federal Reserve Bank of Atlanta. The charter conversion and name change are expected to have only a minimal impact on the Bank’s clients, and deposits will continue to be insured by the Federal Deposit Insurance Corporation up to the applicable limits.
At September 30, 2022, the Company had approximately $6.455 billion in assets, $3.681 billion in net loans held for investment (“LHFI”), $5.551 billion in deposits, and $621.5 million in shareholders' equity. For the nine months ended September 30, 2022, the Company reported net income of $46.6 million.
On February 25, 2022, the Company paid a cash dividend in the amount of $0.17 per share to shareholders of record as of the close of business on February 10, 2022. On May 25, 2022, the Company paid a cash dividend in the amount of $0.18 per share to shareholders of record as of the close of business on May 10, 2022. On July 27, 2022, the Company announced that its Board of Directors declared a cash dividend of $0.19 per share to be paid on its common stock on August 25, 2022 to shareholders of record as of the close of business on August 8, 2022. On August 25, 2022, the Company announced that its Board of Directors declared a cash dividend of $0.20 per share to be paid on its common stock on November 25, 2022 to shareholders of record as of the close of business on November 8, 2022.
NOTE 3 – ACCOUNTING STANDARDS
Effect of Recently Adopted Accounting Standards
In November 2021, FASB issued Accounting Standard Update (“ASU”) No. 2021-10, Government Assistance (Topic 832): “Disclosures by Business Entities about Government Assistance.” These amendments are expected to increase transparency in financial reporting by requiring business entities to disclose information about certain types of government assistance they receive. The Company adopted ASU 2021-10 effective January 1, 2022. Adoption of ASU 2021-10 did not have a material impact to the Company’s consolidated financial statements.
New Accounting Standards That Have Not Yet Been Adopted
In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (ASC 848): “Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or
10

another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is assessing ASU 2020-04 and its impact on the Company’s transition away from LIBOR for its loan and other financial instruments.
In October 2021, FASB issued ASU No. 2021-08, Business Combination (Topic 805): “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendment improves comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. This ASU is effective for the Company after December 15, 2022. The Company is assessing ASU 2021-08 and its impact on the Company’s consolidated financial statements.
In March 2022, FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.” These amendments eliminate the TDR recognition and measurement guidance and instead require that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. For public business entities, these amendments require that an entity disclose current period gross write-offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326-20. Gross write-off information must be included in the vintage disclosures required for public business entities in accordance with paragraph 326-20-50-6, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. This ASU is effective for the Company after December 15, 2022. The Company is assessing ASU 2022-02 and its impact on the Company’s consolidated financial statements.
NOTE 4 – BUSINESS COMBINATIONS
Acquisitions
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 approximately $101.5 million to the former BBI shareholders including 3,498,936 shares of the Company's common stock and approximately $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 approximately $21.8 million of goodwill 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. The Company also incurred $1.3 million of provision for credit losses on credit marks from the loans acquired from Beach Bank.
Expenses associated with the BBI acquisition were $2.3 million and $2.9 million for the three months and nine months period ended September 30, 2022, respectively. These costs included charges associated with legal and consulting expenses, which have been expensed as incurred.
The assets acquired and liabilities assumed and consideration paid in the acquisition were recorded at their estimated fair values based on management’s best estimates using information available at the date of the acquisition and are subject to adjustment for up to one year after the closing date of the acquisition. While the fair values are not expected to be materially different from the estimates, accounting guidance provides that an acquirer must recognize adjustments to
11

provisional amounts that are identified during the measurement period, which will run through August 1, 2023 in respect of the acquisition, in the measurement period in which the adjustment amounts are determined. The acquirer must record in the financial statements, the effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of changes to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The items most susceptible to adjustment are the credit fair value adjustments on loans, core deposit intangible and the deferred income tax assets resulting from the acquisition.
The following table summarizes the provisional fair values of the assets acquired and liabilities assumed and the goodwill generated from the transaction ($ in thousands):
Purchase price:
Cash and stock$101,470 
Total purchase price101,470 
Identifiable assets:
Cash$23,939 
Investments22,907 
Loans482,903 
Other real estate8,797 
Bank owned life insurance10,092 
Core deposit intangible9,791 
Personal and real property13,825 
Deferred tax asset28,105 
Other assets9,649 
Total assets610,008 
Liabilities and equity:
Deposits490,588 
Borrowings25,000 
Other liabilities14,772 
Total liabilities530,360 
Net assets acquired79,648 
Goodwill$21,822 
Cadence Bank Branches
On December 3, 2021, The First completed its acquisition of seven Cadence Bank, N.A. (“Cadence”) branches in Northeast Mississippi (the “Cadence Branches”). In connection with the acquisition of the Cadence Branches, The First assumed $410.2 million in deposits, acquired $40.3 million in loans at fair value, acquired certain assets associated with the Cadence Branches at their book value, and paid a deposit premium of $1.0 million to Cadence. As a result of the acquisition, the Company will have an opportunity to increase its deposit base and reduce transaction costs. The Company also expects to reduce costs through economies of scale.