The First Bancshares, Inc. (FBMS): Business Model Canvas [11-2024 Updated]
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The First Bancshares, Inc. (FBMS) Bundle
Understanding the business landscape of The First Bancshares, Inc. (FBMS) is crucial for investors and stakeholders alike. This financial institution thrives on key partnerships and a solid value proposition, delivering tailored banking solutions to a diverse clientele. In this blog post, we will explore the intricate components of FBMS's Business Model Canvas, revealing how it effectively leverages its resources and activities to drive growth and customer satisfaction. Dive in to discover the essential elements that define FBMS's successful business strategy.
The First Bancshares, Inc. (FBMS) - Business Model: Key Partnerships
Collaborations with Local Businesses
The First Bancshares, Inc. engages in partnerships with local businesses to enhance its service offerings and strengthen its community presence. These collaborations often focus on financial services tailored to the needs of local enterprises, which can include small business loans and community development initiatives. As of September 30, 2024, the total loans held for investment (LHFI) amounted to $5.263 billion, with a notable portion allocated to commercial loans, which represented 14.1% of the total loan portfolio.
Relationships with Regulatory Bodies
The First Bancshares maintains strong relationships with regulatory bodies to ensure compliance and foster a stable operational environment. The company's regulatory capital ratios as of September 30, 2024, indicate compliance with the minimum requirements set by federal regulators, reflecting a well-capitalized institution. Specifically, the total shareholders' equity was approximately $1.012 billion, representing about 12.7% of total assets.
Partnerships with Financial Technology Firms
In an effort to innovate and improve customer service, The First Bancshares partners with various financial technology firms. These partnerships focus on enhancing digital banking services, streamlining payment processes, and improving customer engagement. For example, the integration of technology solutions has been critical in managing the bank's loan portfolio, which increased by $146.9 million, or 2.9%, during the first nine months of 2024.
| Partnership Type | Details | Financial Impact |
|---|---|---|
| Local Businesses | Collaborations for small business loans and community initiatives | $5.263 billion in total loans, with 14.1% in commercial loans |
| Regulatory Bodies | Compliance with federal regulations and capital adequacy | $1.012 billion in total shareholders' equity, 12.7% of total assets |
| Financial Technology Firms | Enhancing digital banking and payment solutions | Increased loan portfolio by $146.9 million, or 2.9% |
The First Bancshares, Inc. (FBMS) - Business Model: Key Activities
Offering a range of banking services
The First Bancshares, Inc. (FBMS) provides a comprehensive suite of banking services, including personal and commercial banking, mortgage services, and wealth management. As of September 30, 2024, the company reported total assets of $7.966 billion, with net loans held for investment amounting to $5.263 billion and total deposits reaching $6.561 billion.
In the nine months ended September 30, 2024, the net interest income was $174.149 million, reflecting a decrease from $191.660 million in the same period of 2023. This decline is attributed mainly to an increase in interest expenses on deposits, which rose significantly due to the prevailing higher interest rate environment.
The company’s non-interest income for the same period was $38.2 million, a decrease from $44.3 million in 2023, primarily due to reduced U.S. Treasury awards.
| Service Type | Net Loans (as of Sept 30, 2024) | Percentage of Total Loans |
|---|---|---|
| Commercial, financial, and agriculture | $748.664 million | 14.1% |
| Commercial real estate | $3.236 billion | 60.8% |
| Consumer real estate | $1.287 billion | 24.2% |
| Consumer installment | $47.216 million | 0.9% |
Risk management and compliance
The First Bancshares places a strong emphasis on risk management and regulatory compliance as critical components of its operational framework. The Allowance for Credit Losses (ACL) was reported at $55.700 million as of September 30, 2024, reflecting a conservative approach to credit risk. This includes provisions for various loan types, ensuring that the bank is prepared for potential losses associated with its lending activities.
The company maintains a diversified portfolio to mitigate risks, with no significant credit concentrations identified within its loan portfolio. The company's strategies include stringent underwriting standards and regular assessments of loan performance to maintain asset quality.
Customer service and relationship management
Customer service is a cornerstone of The First's business model. The bank focuses on building long-term relationships with clients through personalized service and tailored financial solutions. As of September 30, 2024, the company’s non-interest expense was $133.9 million, which includes costs associated with maintaining high-quality customer service.
Additionally, the bank's service charges on deposit accounts amounted to $10.410 million for the nine months ended September 30, 2024, highlighting the importance of maintaining a robust customer base. The company also invests in technology to enhance customer experience and streamline banking processes, contributing to improved customer satisfaction and retention.
The First Bancshares, Inc. (FBMS) - Business Model: Key Resources
Strong capital base and liquidity
The First Bancshares, Inc. reported total assets of $7.957 billion as of September 30, 2024. The company's total liabilities were $6.954 billion, resulting in total shareholders' equity of $1.012 billion. The shareholders' equity increased by $62.6 million, or 6.6%, during the first nine months of 2024, driven primarily by net earnings of $58.9 million and a $25.5 million decrease in accumulated comprehensive loss.
As of September 30, 2024, the liquidity ratio was 14.3%, exceeding the internal policy guideline of a minimum of 10%. The loans to deposits ratio stood at 80.1%, remaining within the policy limit of 90%.
| Financial Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Assets | $7.957 billion | $7.993 billion |
| Total Liabilities | $6.954 billion | $7.050 billion |
| Total Shareholders' Equity | $1.012 billion | $949 million |
| Liquidity Ratio | 14.3% | N/A |
| Loans to Deposits Ratio | 80.1% | N/A |
Skilled workforce and management team
The First Bancshares employs a skilled workforce with a focus on enhancing customer service and operational efficiency. Salaries and employee benefits increased by $5.0 million for the nine months ended September 30, 2024, indicating investment in human capital. This strategic investment reflects the company's commitment to maintaining a proficient management team capable of navigating the complexities of the banking industry.
Comprehensive banking technology infrastructure
The First Bancshares has developed a comprehensive banking technology infrastructure to support its operations and customer services. As of September 30, 2024, the company's investment securities totaled $1.715 billion, representing 21.5% of total assets. The infrastructure is designed to adapt to changing market conditions and enhance the customer experience through improved digital banking solutions.
The average yield on investment securities increased to 2.56% from 2.26% in the previous year. The company leverages technology to optimize asset management and improve operational efficiency, which is critical for maintaining competitiveness in the financial services sector.
| Technology Metrics | September 30, 2024 | September 30, 2023 |
|---|---|---|
| Total Investment Securities | $1.715 billion | $1.836 billion |
| Average Yield on Investment Securities | 2.56% | 2.26% |
The First Bancshares, Inc. (FBMS) - Business Model: Value Propositions
Competitive interest rates on loans and deposits
The First Bancshares, Inc. offers competitive interest rates on its loans and deposits. As of September 30, 2024, the average cost of interest-bearing deposits was 2.48%, which reflects an increase from 1.57% at December 31, 2023 . The bank's net interest income for the nine months ended September 30, 2024, was $174.1 million, a decline from $191.7 million in the same period of 2023, primarily due to rising interest expenses . The net interest margin was recorded at 3.26% for the nine months ended September 30, 2024, down from 3.62% for the corresponding period in 2023 .
Personalized banking services tailored to customer needs
The First Bancshares emphasizes personalized banking services to meet customer needs. The company has enhanced its service offerings, including tailored financial advice and customized lending solutions. The bank reported an increase in net loans held for investment (LHFI) to $5.263 billion as of September 30, 2024, up from $5.116 billion at December 31, 2023 . Additionally, non-interest income for the nine months ended September 30, 2024, totaled $38.2 million, reflecting a decrease from $44.3 million in the same period the previous year, with service charges on deposit accounts contributing significantly to this income .
Robust online and mobile banking platforms
The First Bancshares has invested significantly in its online and mobile banking platforms, providing customers with convenient access to their accounts and banking services. The bank’s total assets as of September 30, 2024, were $7.966 billion, reflecting a slight decrease from $7.993 billion at December 31, 2023 . The bank has focused on enhancing user experience and security across digital platforms, which is essential for retaining customers in a competitive market.
| Metrics | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Total Assets | $7.966 billion | $7.993 billion |
| Net Loans Held for Investment | $5.263 billion | $5.116 billion |
| Average Cost of Interest-Bearing Deposits | 2.48% | 1.57% |
| Net Interest Income (Nine Months) | $174.1 million | $191.7 million |
| Net Interest Margin | 3.26% | 3.62% |
| Non-Interest Income (Nine Months) | $38.2 million | $44.3 million |
The First Bancshares, Inc. (FBMS) - Business Model: Customer Relationships
Dedicated customer support teams
The First Bancshares, Inc. (FBMS) employs dedicated customer support teams to enhance customer service and satisfaction. As of September 30, 2024, the company reported a non-interest expense of $46.4 million, with salaries and employee benefits accounting for $25.1 million, representing 54.2% of total non-interest expenses. This investment in human resources reflects the company's commitment to providing personalized assistance to its clients.
Engagement through community events
FBMS actively engages with its community through various events, fostering relationships that enhance customer loyalty. The bank has been involved in numerous community initiatives, allowing it to maintain a strong local presence. For example, the company reported an increase in its total deposits to $6.595 billion as of September 30, 2024, up from $6.554 billion at December 31, 2023. This growth can be partially attributed to its active community engagement strategies.
Loyalty programs and incentives for long-term clients
To retain clients and encourage long-term relationships, FBMS has implemented loyalty programs and incentives. The bank’s non-interest income for the nine months ended September 30, 2024, amounted to $38.2 million, down from $44.3 million in the same period of 2023. This decline was primarily due to a $6.2 million decrease in U.S. Treasury awards, indicating that while external factors may impact income, the bank's focus on customer loyalty remains a priority.
| Category | Amount (in millions) | Percentage of Total |
|---|---|---|
| Non-interest Expense (Total) | $46.4 | 100% |
| Salaries and Employee Benefits | $25.1 | 54.2% |
| Non-interest Income | $38.2 | N/A |
| Total Deposits | $6,595 | N/A |
The First Bancshares, Inc. (FBMS) - Business Model: Channels
Branch network across multiple states
The First Bancshares operates a comprehensive branch network across several states, including Mississippi, Louisiana, Alabama, and Florida. As of September 30, 2024, the total assets stood at approximately $7.966 billion, with total deposits reaching $6.561 billion. The branch locations facilitate direct customer engagement and service delivery, allowing the bank to maintain a strong community presence.
Digital banking platforms for online services
The company has invested in robust digital banking platforms, providing customers with online banking services that include account management, fund transfers, and loan applications. The digital banking initiative aims to enhance customer convenience and accessibility. As of September 30, 2024, the average yield on earning assets was reported at 5.27%, reflecting the effectiveness of digital channels in driving interest income.
Mobile applications for customer convenience
The First Bancshares offers mobile applications that allow customers to perform banking transactions on-the-go. The mobile app features functionalities such as mobile check deposits, balance inquiries, and transaction history. The bank's focus on mobile banking aligns with the increasing consumer demand for convenient banking solutions, contributing to a reported increase in non-interest income, which reached $38.2 million for the nine months ended September 30, 2024.
| Channel Type | Details | Financial Impact |
|---|---|---|
| Branch Network | Operating in Mississippi, Louisiana, Alabama, and Florida | Total assets: $7.966 billion, Total deposits: $6.561 billion |
| Digital Banking | Online banking services for account management and transactions | Average yield on earning assets: 5.27% |
| Mobile Applications | Features include mobile check deposits and balance inquiries | Non-interest income: $38.2 million for nine months ended September 30, 2024 |
The First Bancshares, Inc. (FBMS) - Business Model: Customer Segments
Individual consumers seeking personal banking
The First Bancshares, Inc. (FBMS) serves individual consumers through a range of personal banking products. As of September 30, 2024, the total loans to individual consumers, including consumer real estate and installment loans, amounted to approximately $1.334 billion, representing 25.1% of the total loan portfolio. The average yield on loans to individual consumers was 6.12%.
Small to medium-sized enterprises (SMEs)
FBMS targets small to medium-sized enterprises (SMEs) with a comprehensive suite of banking services tailored to business needs. As of September 30, 2024, loans to commercial, financial, and agricultural businesses totaled approximately $748.7 million, representing 14.1% of the total loan portfolio. The average yield on these loans was 6.21%.
Commercial clients requiring investment and loan services
Commercial clients constitute a significant segment for FBMS, particularly in the realm of commercial real estate. As of September 30, 2024, commercial real estate loans reached approximately $3.236 billion, which makes up 60.8% of the total loan portfolio. The average yield on commercial real estate loans was 5.97%.
| Customer Segment | Total Loans ($ billions) | % of Total Loans | Average Yield (%) |
|---|---|---|---|
| Individual Consumers | 1.334 | 25.1% | 6.12% |
| Small to Medium-sized Enterprises (SMEs) | 0.749 | 14.1% | 6.21% |
| Commercial Clients | 3.236 | 60.8% | 5.97% |
The First Bancshares, Inc. (FBMS) - Business Model: Cost Structure
Operational costs including salaries and benefits
The total non-interest expense for The First Bancshares, Inc. for the nine months ended September 30, 2024, was $133.9 million, a decrease of $6.4 million from the same period in 2023. Within this, salaries and employee benefits accounted for $74.7 million, representing 55.8% of total non-interest expenses, an increase from $69.7 million in the previous year.
Technology and infrastructure investments
The First Bancshares has invested in technology and infrastructure to improve operational efficiency and customer service. The occupancy expense, which includes technology infrastructure, was $16.9 million for the nine months ended September 30, 2024. Additionally, the company reported $5.7 million in amortization of core deposit intangibles.
Marketing and customer acquisition expenses
Marketing expenses were recorded at $0.25 million for the nine months ended September 30, 2024, a decrease compared to $0.76 million in the same period in 2023. The company continues to focus on cost-effective marketing strategies to enhance customer acquisition while minimizing expenditures.
| Cost Category | Q3 2024 Amount (in thousands) | Q3 2023 Amount (in thousands) | Change (in thousands) | Percentage of Total Non-Interest Expense |
|---|---|---|---|---|
| Salaries and employee benefits | 74,684 | 69,695 | +4,989 | 55.8% |
| Occupancy expense | 16,863 | 15,680 | +1,183 | 12.6% |
| FDIC/OCC premiums | 3,001 | 2,586 | +415 | 2.2% |
| Marketing | 247 | 762 | -515 | 0.2% |
| Other non-interest expense | 23,689 | 31,773 | -8,084 | 17.7% |
| Total Non-Interest Expense | 133,900 | 140,300 | -6,400 | 100% |
The First Bancshares, Inc. (FBMS) - Business Model: Revenue Streams
Interest income from loans and mortgages
The First Bancshares, Inc. generates substantial revenue through interest income derived from loans and mortgages. For the nine months ended September 30, 2024, the interest and fees on loans amounted to $239.3 million, an increase from $216.9 million for the same period in 2023. The average yield on loans for the third quarter of 2024 was 6.21%, compared to 5.92% in the third quarter of 2023. The total loans held for investment at September 30, 2024, equated to $5.263 billion.
Non-interest income from fees and service charges
Non-interest income is another crucial revenue stream for FBMS, primarily generated from service charges and various fees. For the nine months ended September 30, 2024, the total non-interest income was $38.2 million, a decrease from $44.4 million in the same period of 2023. Key components of non-interest income include:
| Source | Amount (Q3 2024) | Percentage of Total Non-interest Income |
|---|---|---|
| Service charges on deposit accounts | $10.4 million | 27.2% |
| Mortgage fee income | $2.6 million | 6.8% |
| Interchange fee income | $13.5 million | 35.5% |
| Other income | $11.7 million | 30.5% |
Investment income from securities and asset management
FBMS also earns revenue from investment securities, contributing to its overall financial performance. As of September 30, 2024, the total investment securities amounted to $1.715 billion, representing 21.5% of total assets. The average yield on investment securities increased to 2.56% from 2.26% in the prior year. For the nine months ended September 30, 2024, the taxable interest and dividends from securities were $25.2 million.
Updated on 16 Nov 2024
Resources:
- The First Bancshares, Inc. (FBMS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of The First Bancshares, Inc. (FBMS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The First Bancshares, Inc. (FBMS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.