Exhibit 99.2
Acquisition of The First Bancshares, Inc. Heritage Southeast Bancorporation, Inc. July 27, 2022 An Exceptional Partnership
2 S AFE H ARBOR ABOUT THE FIRST BANCSHARES, INC . The First Bancshares, Inc . (“FBMS” or the “Company”), headquartered in Hattiesburg, Mississippi, is the parent company of The First, A National Banking Association . Founded in 1996 , The First has operations in Mississippi, Louisiana, Alabama, Florida and Georgia . The Company’s stock is traded on NASDAQ Global Market under the symbol FBMS . Contact : Chandra Kidd, Corporate Secretary . NON - GAAP FINANCIAL MEASURES FBMS reports its results in accordance with United States generally accepted accounting principles (“GAAP”) . However, management believes that certain non - GAAP performance measures used in managing the business may provide meaningful information about underlying trends in its business . Non - GAAP financial measures should be viewed in addition to, and not as an alternative for, FBMS’s reported results prepared in accordance with GAAP . ADDITIONAL INFORMATION ABOUT THE MERGER & WHERE TO FIND IT This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction . The Company will file with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S - 4 for the proposed merger, containing a joint proxy statement of HSBI and the Company and a prospectus of the Company . The Company will also file other documents with the SEC with respect to the proposed merger, pursuant to SEC reporting requirements . A definitive joint proxy statement/prospectus will be mailed to shareholders of HSBI and the Company . Investors and security holders of the Company and HSBI are urged to read the entire joint proxy statement/prospectus and other documents that will be filed with the SEC carefully and in their entirety when they become available because they will contain important information about the Company, HSBI, and the proposed merger transactions . Investors and security holders will be able to obtain free copies of the registration statement and the joint proxy statement/prospectus (when available) and other documents filed with the SEC by the Company through the website maintained by the SEC at http : //www . sec . gov . Copies of the documents filed with the SEC by the Company will be available free of charge on the Company’s internet website or by contacting the Company . PARTICIPANTS IN THE TRANSACTION The Company and Heritage Southeast Bancorporation, Inc . (“HSBI”) and their respective directors and executive officers and other members of management and employees, may be considered participants in the solicitation of proxies in connection with the proposed transaction . Information about the directors and executive officers of the Company is set forth in its proxy statement for its 2022 annual meeting of shareholders, filed with the SEC on April 6 , 2022 , and its Current Reports on Form 8 - K . Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available . THIS COMMUNICATION DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OR A SOLICITATION OF ANY VOTE OR APPROVAL .
3 C AUTIONARY S TATEMENTS R EGARDING F ORWARD - L OOKING I NFORMATION This communication contains “forward - looking statements” as defined in the Private Securities Litigation Reform Act of 1995 . In general, forward - looking statements usually use words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology, including statements related to the expected timing of the closing of the proposed transactions between the Company and HSBI (the “Merger”), the expected returns and other benefits of the Merger to shareholders, expected improvement in operating efficiency resulting from the Merger, estimated expense reductions resulting from the transactions and the timing of achievement of such reductions, the impact on and timing of the recovery of the impact on tangible book value, and the effect of the Merger on the Company’s capital ratios . Forward - looking statements represent management’s beliefs, based upon information available at the time the statements are made, with regard to the matters addressed . Such forward - looking statements are not guarantees of future performance . Forward - looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements . With respect to the Merger, factors that could cause or contribute to such differences include, but are not limited to ( 1 ) the risk that the cost savings and any revenue synergies from the Merger may not be realized or take longer than anticipated to be realized, ( 2 ) disruption from the Merger with customers, suppliers, employee or other business partners relationships, ( 3 ) the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement in respect of the Merger, ( 4 ) the risk of successful integration of HSBI into the Company, ( 5 ) the failure to obtain the necessary approval by the shareholders of HSBI or the Company, ( 6 ) the amount of the costs, fees, expenses and charges related to the Merger, ( 7 ) the ability by the Company to obtain required governmental approvals of the Merger, ( 8 ) reputational risk and the reaction of each of the companies’ customers, suppliers, employees or other business partners to the Merger, ( 9 ) the failure of the closing conditions in the definitive agreements in respect of the Merger to be satisfied, or any unexpected delay in closing of the Merger, ( 10 ) the risk that the integration of the operations of HSBI into the operations of the Company will be materially delayed or will be more costly or difficult than expected, ( 11 ) the possibility that the Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events, ( 12 ) the dilution caused by the Company’s issuance of additional shares of its common stock in the Merger, and ( 13 ) general competitive, economic, political and market conditions . Additional factors which could affect the forward looking statements can be found in the cautionary language included under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in the Company’s Annual Report on Form 10 - K for the year ended December 31 , 2021 , under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other documents subsequently filed by the Company with the SEC . Consequently, no forward - looking statement can be guaranteed . Neither the Company nor HSBI undertakes any obligation to update or revise any forward - looking statements, whether as a result of new information, future events or otherwise . For any forward - looking statements made in this communication, any exhibits hereto or any related documents, the Company and HSBI claim protection of the safe harbor for forward - looking statements contained in the Private Securities Litigation Reform Act of 1995 .
S TRATEGIC R ATIONALE F INANCIAL R ATIONALE R ISK M ITIGATION 4 (1) Once cost savings are fully - phased in and realized (2) Tangible book value earnback period calculated using the crossover method T RANSACTION R ATIONALE ▪ Natural expansion of our current footprint in Georgia and Florida ‒ Entrance into the attractive Atlanta, Savannah and Jacksonville MSAs ‒ Diversification of pro forma geographic reach into both familiar and faster growing economies ▪ Enhanced management depth; Leonard Moreland, HSBI’s CEO, joining pro forma executive leadership team ▪ High quality institution with similar culture and business model ▪ Existing charitable foundation and markets served complement our Community Development Financial Institution mission ▪ Creates opportunity to expand relationships with HSBI customers ▪ Core double - digit EPS accretion (1) ; mid - teens GAAP EPS accretion (1) ▪ Initial tangible book value dilution less than 8% ▪ Tangible book value earnback period < 3 years (2) ▪ >25% internal rate of return ▪ Over 20 bps and 200 bps accretive to ROAA and ROATCE, respectively (1) ▪ Pro forma capital ratios remain strong ▪ Extensive due diligence completed by FBMS management, including third party loan review ▪ All lenders and key operation employees have executed retention agreements ▪ FBMS management experienced in acquisitions – completing 13 acquisitions since 2010
5 A B ENEFICIAL T RANSACTION FOR A LL S TAKEHOLDERS E MPLOYEES C OMMUNITIES C USTOMERS S HAREHOLDERS One of the largest CDFIs in the nation (1) dedicated to servicing under banked and low - to - moderate income clients Proven and experienced leadership Over 1,700 employee volunteer service hours across both companies over the last twelve months Projected double - digit earnings accretion Manageable tangible book value dilution expected at close Stronger growth trajectory Improved profitability Competitive positioning as the partner of choice for future strategic acquisitions No branch overlap expected to result in superior retention Long - term, dedicated teams with like - minded management and business culture Anticipated retention of key employees and management will reinforce continuity Ability to better serve clients through larger lending base and enhanced products and services Convenience of expanded branch network across 5 states and over 100 branches Both banks operate as true community banks with local relationships; no changes to client facing employees (1) Community Development Financial Institutions (“CDFI”) are private sector financial institutions that focus primarily on perso nal lending and business development efforts in poorer local communities requiring revitalization in the U.S.
6 Source: S&P Global Market Intelligence (1) Based upon FBMS closing price of $29.68 as of 7/26/22 (2) Based upon 7,220,959 outstanding shares of HSBI common stock, inclusive of 6,000 unvested RSUs and 194,110 SERP shares to be issued as of 6/30/22; Existing HSBI options to be cashed out at close at $28.64 (3) Based upon HSBI tangible common equity of $114.9 million as of 6/30/22 (4) Based upon 24,038,746 outstanding shares of FBMS common stock, inclusive of 3,509,622 shares to be issued to Beach Bancor p, Inc. at transaction close T RANSACTION T ERMS T RANSACTION ▪ First Bancshares, Inc. (“ FBMS ”) will acquire 100% of Heritage Southeast Bancorporation, Inc.’s (“ HSBI ”) outstanding common stock C ONSIDERATION M IX ▪ 100% stock F IXED E XCHANGE R ATIO ▪ 0.965 shares of FBMS common stock per share I MPLIED P ER S HARE C ONSIDERATION ▪ $28.64 total consideration per share of HSBI common stock (1) I MPLIED A GGREGATE C ONSIDERATION ▪ $207 million (1)(2) I MPLIED M ETRICS ▪ Price to tangible book value of 181% (3) ▪ Price to LTM core earnings of 10.8x ▪ Price to 2022E earnings of 12.8x ▪ Price to 2022E earnings plus cost savings of 7.5x P RO F ORMA O WNERSHIP ▪ FBMS: 77.5% (4) / HSBI: 22.5% (2) L EADERSHIP A DDITIONS TO FBMS ▪ Leonard Moreland, HSBI CEO, to join FBMS as President – Georgia ▪ Bradley Serff , HSBI President and Chief Banking Officer, to join FBMS as SVP, Senior Lender ▪ Kathy Zovlonsky , HSBI Executive VP and Chief Administrative Officer, to join FBMS as SVP, Regional Administration ▪ Paul Hoerig , HSBI Executive VP and Chief Credit and Risk Officer to join FBMS as SVP, Regional Credit Officer O THER I NFORMATION ▪ Transaction includes voting agreement and lock - up period for certain HSBI insiders A PPROVALS & C LOSE ▪ FBMS and HSBI shareholder approval ▪ Customary regulatory approvals ▪ Expected closing late in the 4 th quarter of 2022 or 1 st quarter of 2023
Eric Waldron President – Mississippi o FBMS Experience: 17 years o Banking Experience: 28 years o Previously served as Market President – Wayne County, MS for Cadence Bank Leonard Moreland President – Georgia o HSBI Experience: 26 years o Banking Experience: 39 years o Currently serves as CEO of Heritage Southeast Bancorporation, Inc. Charles Reeves Executive VP, Corporate Strategy & Central Florida President o Beach Bank Experience: 4 years o Banking Experience: 32 years o Currently serves as CEO and President of Beach Bank Wade Neth President – Alabama & NW Florida o FBMS Experience: 9 years o Banking Experience: 37 years o Previously served as President and CEO of First National Bank of Baldwin County Ronnie Fugarino President – Louisiana o FBMS Experience: 3 years o Banking Experience: 41 years o Previously served as President and CEO of Florida Parishes Bank C. Jerome Brown Executive VP, Chief Community Officer o FBMS Experience: 14 years o Banking Experience: 19 years o Previously served as Director of Community Development for The First Bancshares, Inc. 7 O UR L EADERSHIP T EAM Hoppy Cole President & CEO o FBMS Experience: 19 years o Banking Experience: 36 years o Previously served as Secretary/Treasurer and CFO of the Headrick Companies, Inc. Dee Dee Lowery Executive VP, CFO o FBMS Experience: 17 years o Banking Experience: 32 years o Previously served as Vice President and Investment Portfolio Manager for Hancock Holding Company Jarrett Nicholson Executive VP, COO o FBMS Experience: 8 years o Banking Experience: 29 years o Previously served as EVP, Chief Credit Policy Officer and COO of Britton & Koontz Bank George Noonan Executive VP, CCO o FBMS Experience: 9 years o Banking Experience: 23 years o Previously served as EVP and CCO of First National Bank of Baldwin County Emily Agostinelli Chief Audit Officer o FBMS Experience: 1 year o Banking Experience: 22 years o Previously served as Sarbanes - Oxley Compliance Manager for Trustmark Bank JJ Fletcher Executive VP, CLO o FBMS Experience: 12 years o Banking Experience: 23 years o Previously served as VP, Commercial Lender for SouthTrust Bank Ion Mixon Chief Risk Officer o FBMS Experience: 19 years o Banking Experience: 23 years o Previously served as a bank examiner with the Office of the Comptroller of the Currency
$4.4M MRQ Net Income 0.78% MRQ ROAA 11.7% MRQ ROATCE 1.04% MRQ ROAA 3.34% MRQ NIM $3.3M MRQ Net Income R EPORTED C ORE (2) 3.31% MRQ NIM (3) 15.6% MRQ ROATCE 0.25% 0.29% 0.50% 0.50% 0.50% 0.55% 1.00% 1.04% 1.25% 1.30% 1.53% 1.80% 2.01% 2.28% 2.50% 2.50% 0.29% 0.27% 0.27% 0.26% 0.23% 0.22% 0.24% 0.26% 0.30% 0.35% 0.36% 0.44% 0.50% 0.59% 0.74% 0.82% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 HSBI Cost of Deposits Fed Funds Rate 8 O VERVIEW OF H ERITAGE S OUTHEAST B ANCORPORATION , I NC . HSBI’ S S TABLE D EPOSIT B ASE (P RIOR C YCLE ) L OANS O VER T IME EX . PPP($M) HSBI F INANCIAL H IGHLIGHTS Source: S&P Global Market Intelligence Data as of or for the three months ended 6/30/22 (1) Core deposits defined as total deposits less total time deposits and CDARS ( 2 ) Excludes impact of transaction costs associated with previously terminated transaction with VyStar Credit Union and employees separation costs (3) Excludes PPP loans $912 $980 $1,044 $1,079 $1,111 2019 2020 2021 Q1 '22 Q2 '22 CAGR: 8% $1.7B Total Assets $1.1B Total Loans $1.5B Total Deposits 75% Loans / Deposits HSBI Deposits Deposit Market MSA ($M) Share Rank Atlanta, GA 732 #22 Hinesville, GA 287 #2 Waycross, GA 106 #5 Brunswick, GA 86 #12 Savannah, GA 66 #18 Jesup, GA 53 #2 Jacksonville, FL 50 #24 St. Marys, GA 22 #5 Statesboro, GA 15 #10 Implied Deposit Beta: 23.5% HSBI Branch ( 23 ) GA FL Tallahassee Atlanta Jacksonville Columbus Macon Destin Savannah Waycross Brunswick Jesup St. Marys 0.17% NPAs / Assets 1.38% Reserves / Loans 90% % Core Deposits (1) 6.9% TCE / TA
5.4% 4.2% 4.8% 3.6% 3.3% 11.8% 10.0% 13.9% 10.2% 10.2% Atlanta, GA Southeast GA Jacksonville, FL Southeast U.S. '22 - '27E Proj. Pop. Growth '22 - '27E Proj. Med. HHI Growth 9 HSBI’ S S TRONG M ARKET D EMOGRAPHICS HSBI’ S M ARKET D EMOGRAPHICS P RO F ORMA L ARGE M ARKETS S ERVED Source: S&P Global Market Intelligence, U.S. Bureau of Labor Statistics, U.S. Bureau of Economic Analysis, U.S. Census Bureau Co unty Business Patterns, Fortune.com (1) Southeast Georgia defined as the Savannah, Brunswick, Statesboro, Hinesville, St. Marys , Waycross and Jesup statistical areas and the county of Clinch, GA (2) Represents current - dollar GDP as of 2019 (3) Defined as AL, AR, FL, GA, KY, LA, MS, NC, TN, VA and WV S OUTHEAST GA J ACKSONVILLE , FL (1) Atlanta, GA Tampa, FL Jacksonville, FL New Orleans, LA M ARKET MSA P OPULATION GDP (2) # OF B USINESSES F ORTUNE 1000 HQ S $438.9B $168.4B $89.4B $83.3B 6.2M 3.3M 1.6M 1.3M 153K 61K 40K 31K 24 2 5 1 A TLANTA , GA P RO F ORMA M ARKETS OF O PERATION < 250,000 MSA P OPULATION 250,000 – 500,000 500,000 – 1,000,000 > 1,000,000 (3)
Deposits Market Rank Institution Branches ($M) Share 1 MetroCity Bankshares Inc. 8 1,631 0.71% 2 United Bank Corp. 14 1,567 0.68 3 Piedmont Bancorp Inc. 9 1,084 0.47 4 Georgia Banking Co. 5 1,018 0.44 5 Heritage Southeast Bancorporation Inc. 9 732 0.32 6 First IC Corp. 6 661 0.29 7 Affinity Bancshares Inc. 3 626 0.27 8 CoastalSouth Bancshares Inc. 6 554 0.24 9 Quantum Capital Corp. 3 549 0.24 10 Pinnacle Financial Corp. 5 532 0.23 Market Total 1,071 229,857 100.00% C OMMUNITY B ANK D EPOSIT M ARKET S HARE (1) 10 M ARKET P ROFILE : A TLANTA A TLANTA M ARKET O VERVIEW M AJOR M ARKET E MPLOYERS Source: S&P Global Market Intelligence, U.S. Bureau of Labor Statistics, U.S. Bureau of Economic Analysis, U.S. Census Bureau Co unty Business Patterns Deposit data as of 6/30/21 (1) Community Bank defined as an institution with less than $10 billion in total assets HSBI Branch ( 9 ) ‒ MSA population of ~6.2 million, making Atlanta the 9 th largest metropolitan area in the U.S. ‒ ~$439 billion GDP in 2019 ‒ ~153 thousand businesses operating within the MSA ‒ Home to 15 Fortune 500 headquarters locations ‒ Ranked #1 Metro Tech Hub in 2020 by Business Facilities
Deposits Market Rank Institution Branches ($M) Share 1 Jones Bancshares LP 8 858 0.75% 2 Heritage Southeast Bancorporation Inc. 14 709 0.62 3 FCB Financial Corp. 7 484 0.42 4 Southeastern Banking Corp. 9 473 0.41 5 WB&T Bankshares Inc. 3 365 0.32 6 Florida Capital Group Inc. 2 245 0.21 7 Morris State Bancshares Inc. 3 229 0.20 8 Queensborough Co. 7 156 0.14 9 First Southern Bank 3 140 0.12 10 Putnam-Greene Financial Corp. 2 131 0.11 Market Total 412 114,339 100.00% C OMMUNITY B ANK D EPOSIT M ARKET S HARE (2) 11 M ARKET P ROFILE : S OUTHEAST GA AND J ACKSONVILLE , FL S OUTHEAST GA & J ACKSONVILLE , FL M ARKET O VERVIEW (1) M AJOR M ARKET E MPLOYERS Source: S&P Global Market Intelligence, U.S. Bureau of Labor Statistics, U.S. Bureau of Economic Analysis, U.S. Census Bureau Co unty Business Patterns; City of Jacksonville Office of Economic Development, Automotive Logistics Digital, World Shipping Council Deposit data as of 6/30/21 (1) Southeast Georgia defined as the Savannah, Brunswick, Statesboro, Hinesville, St. Marys , Waycross and Jesup statistical areas and the county of Clinch, GA (2) Community Bank defined as an institution with less than $10 billion in total assets ‒ Savannah, GA and Jacksonville, FL serve as major hubs for the region, with MSA populations of ~400K and ~1.6M, respectively ‒ Savannah and Jacksonville recorded GDPs of ~$23B and ~$89B in 2019 ‒ ~58 thousand businesses operating within the region ‒ Jacksonville, FL ranked #2 Best Place to Live in FL in 2021 by Bankrate ‒ Hyundai recently announced plans to invest $5.5B in a smart electric vehicle factory to be located outside of Savannah ‒ The Port of Savannah, Georgia is the 3 rd busiest port in the U.S. and one of the top 40 busiest ports in the world in 2020 ‒ The Port of Jacksonville, FL was the 4 th busiest vehicle - handling port in North America in 2019 HSBI Branch ( 14 )
Comm. Bank Deposits Market Rank Rank (3) Institution Branches ($B) Share 1 -- Bank of America Corp. 113 $27.1 11.0% 2 -- Wells Fargo & Co. 155 26.1 10.6 3 -- Truist Financial Corp. 152 21.5 8.7 4 -- Regions Financial Corp. 178 20.2 8.2 5 -- Hancock Whitney Corp. 107 18.0 7.3 6 -- JPMorgan Chase & Co. 116 15.5 6.3 7 -- Synovus Financial Corp. 52 8.4 3.4 8 -- The PNC Financial Services Group Inc. 81 8.3 3.4 9 -- Ameris Bancorp 61 7.7 3.1 10 -- Capital One Financial Corp. 31 7.2 2.9 -- Pro Forma 117 7.1 2.9 11 -- The Toronto-Dominion Bank 41 6.0 2.4 12 1 The First Bancshares Inc. 94 5.7 2.3 13 -- Cadence Bank 56 5.2 2.1 14 -- SouthState Corp. 28 4.6 1.9 15 -- Trustmark Corp. 44 3.9 1.6 16 -- Fifth Third Bancorp 35 3.9 1.6 17 -- EverBank 5 2.9 1.2 18 -- Renasant Corp. 25 2.8 1.1 19 2 Tampa Bay Banking Co. 8 2.4 1.0 20 3 Community Bancshares of Mississippi Inc. 29 2.1 0.9 21 -- Valley National Bancorp. 7 2.0 0.8 22 4 BancPlus Corp. 33 2.0 0.8 23 -- Home BancShares Inc. 26 1.9 0.8 24 -- United Community Banks Inc. 20 1.7 0.7 25 -- ServisFirst Bancshares Inc. 7 1.5 0.6 26 5 Gulf Coast Bank and Trust Co. 13 1.5 0.6 27 6 Heritage Southeast Bancorporation Inc. 23 1.4 0.6 28 7 Capital City Bank Group Inc. 16 1.4 0.6 29 8 First Guaranty Bancshares Inc. 10 1.3 0.5 30 9 Thomasville Bancshares Inc. 4 1.2 0.5 D RIVING T OP 10 M ARKET S HARE IN A LL O UR M ARKETS C OMBINED C OUNTIES OF O PERATION (1) Source: S&P Global Market Intelligence Deposit data as of 6/30/21 (1) Includes all counties in which either FBMS, Beach Bank or HSBI operate; excludes branches with greater than $1.0 billion in deposits (2) Represents the total number of counties / parishes in which FBMS, combined with HSBI and Beach Bank, has a top 5 deposit mar ket share ranking divided by the total number of counties / parishes in which either FBMS or HSBI operates (3) Community Bank defined as any bank with less than $10 billion in total assets #1 to #5 #6 to #10 Greater than #10 P RO F ORMA C OUNTY D EPOSIT M ARKET S HARE R ANK • Top 5 deposit market share ranking in 54% of our combined counties and parishes of operation (2) • Top 10 deposit market share ranking in 81% of our combined counties and parishes of operation (2) MS AL GA FL LA Jacksonville New Orleans Tampa Birmingham Mobile Albany Orlando Huntsville Montgomery Tallahassee Atlanta Baton Rouge Jackson Starkville Pensacola Destin Hattiesburg Savannah Valdosta St. Marys Brunswick Waycross Gulfport 12
13 S UMMARY OF O UR D UE D ILIGENCE Only one member of senior leadership has left HSBI to pursue other interests outside the normal course of retirement (1) Minimal lender attrition – net lender growth since 12/31/20 No material customer roll - off (1) Strong deposit transaction account growth both in number and balances since 12/31/20: ‒ 1,575 net new accounts added (2) ‒ 27% growth in total deposits (2) (3) L OYAL E MPLOYEE AND C USTOMER B ASE E XTENSIVE CREDIT REVIEW Experienced FBMS credit review team, including senior management Credit diligence conducted over 4 weeks Detailed third - party loan review (same review firm which has completed all prior loan reviews) Reviewed ~45% of loan portfolio including: ‒ All classified / problem loans ‒ Largest ~45 loan relationships by exposure ‒ ~80% of non - owner occupied CRE ‒ ~36% of owner - occupied CRE ‒ ~30% of multifamily balances C OMPREHENSIVE OPERATIONAL DUE DILIGENCE PERFORMED Thorough diligence conducted over a > 12 - week period > 50 FBMS and HSBI participants, including consultants and advisors Hosted weekly diligence calls with each business line group Reviewed approximately 700 files Detailed review of business plans, budgets, credit processes, among other aspects of the businesses (1) Since the previously announced (announced on 3/31/21) and subsequently terminated (terminated on 6/15/22) transaction wit h VyStar Credit Union (2) Represents the change in the indicated metric between 12/31/20 and 6/30/22 (3) Excludes municipal funds
$7.2M $1.6M $8.7M $17.5M H1 '22 Reported Net Income Adjustments for Non-Rec. Items Adj. H1 '22 Net Income Ann. Adj. H1 '22 Net Income 9% Leverage Ratio 14 K EY T RANSACTION M ETRICS AND A SSUMPTIONS ‒ 2023 Net Income: o FBMS: $80 million, inclusive of pending Beach Bancorp, Inc. transaction (1) ‒ Purchase Accounting Adjustments (2) : o Gross loan credit mark of ~$10 million or 0.9% of HSBI loans (3) o Fixed asset write - up of ~$1 million o Other fair value marks of ~$15 million (4) o Core deposit intangible of 1.50% of non - time deposits ‒ Cost Savings: o 30% of core expense base of $48.5 million; 50% realized in 2023 and 100% realized thereafter ‒ One - Time Restructuring Charges: o ~$26 million (2) ‒ Assumes reversal of mark - to - market securities loss of $16.5 million (2) , currently in AOCI, accreted sum - of - the - years digits over 5 years ‒ Not modeled other sources of revenue / additional earnings identified o Redemption of $40 million of existing HSBI holding company lines of credit (6) o Redeployment of excess cash (cash / assets at HSBI currently ~17%) Mid - Teens GAAP EPS Accretion (7) 7% TCE / TA 13% CET1 Ratio 17% TRBC Ratio Mid - Single Digits TBVPS Dilution < 3.0 yrs TBVPS Earnback E ARNINGS I MPACT T ANGIBLE B OOK V ALUE I MPACT C APITAL L EVELS AT C LOSE > 1.3% ROAA (7) > 18% ROATCE (7) P ROFITABILITY K EY A SSUMPTIONS K EY M ETRICS Note: Assumes closure of the currently pending Beach Bancorp, Inc. transaction (1) Per FactSet consensus (2) Shown on a pre - tax basis (3) Split between PCD loan credit mark of ~$5 million (recorded as ACL) and non - PCD loan credit mark of ~$5 million (accreted to income over life of loans) (4) Mark shown on a net basis and is against equity; aggregate value is accreted back into earnings on various amortization s che dules between 2 and ~10+ years (5) Represents impact of transaction costs associated with previously terminated transaction with VyStar Credit Union and employees separation costs (6) Represents $15 million line of credit at prime rate less 50 bps and $25 million line of credit at prime rate (7) Once cost savings are fully - phased in and realized HSBI N ET I NCOME R ECONCILIATION (5) Double - Digit Core EPS Accretion (7)
T ODAY P RO F ORMA WITH BEACH B ANK & HSBI (7/26/2022) $29.68 $8.4B 65.0% > 1.3% (3) $4.00+ (3) 15 2022 M&A: S TRATEGIC G ROWTH AND G EOGRAPHIC E XPANSION S UMMARY OF R ECENT M&A E NHANCING OUR G ROWTH P ROFILE A CCELERATING S CALE AND P ROFITABILITY ‒ 7/27/2022: Announced proposed acquisition of Heritage Southeast Bancorporation, Inc. o Added the Atlanta, GA, Jacksonville, FL and Savannah, GA MSAs o Most earnings - accretive transaction ever announced by FBMS ‒ 4/26/2022: Announced pending acquisition of Beach Bancorp, Inc. o Expected to add the Tampa, FL MSA o Received all regulatory and shareholder approval; anticipated closing on 8/1/22 ‒ With the addition of the Atlanta, Jacksonville and Tampa MSAs, FBMS would have a presence in three of the top 10 largest markets in the Southeast D ATE T OTAL A SSETS (1) 2.3% 4.8% 4.3% 2.9% 9.5% 11.7% 10.4% 9.8% FBMS Standalone Beach Bank HSBI Pro Forma '22 - '27E Proj. Pop. Growth '22 - '27E Proj. Med. HHI Growth L OANS / D EPOSITS (1) P ROJ . ’23 ROAA F ORWARD EPS FBMS S TOCK P RICE P OST Q1 E ARNINGS P RO F ORMA WITH B EACH B ANK (4/29/2022) $32.56 $6.8B 57.8% 1.2% (2) $3.47 (2) S TART OF THE Y EAR (12/31/2021) $38.62 $6.1B 56.6% 1.1% (2) $3.19 (2) Source: S&P Global Market Intelligence, FactSet ; Demographic data as of 6/30/21 (1) Excludes purchase accounting adjustments (2) Represents the FacSet consensus estimate for the indicated metric as of the indicated date (3) Shown for illustrative purposes and not indicative of anticipated 1 - year forward earnings estimates
1 6 P RO F ORMA H IGHLIGHTS FBMS Branch ( 117 ) FBMS LPO (3) Source: S&P Global Market Intelligence Deposit data as of 6/30/22, pro forma for Beach Bank acquisition (1) Data as of 6/30/22; includes purchase accounting adjustments (2) Shown with cost savings on a fully - phased in basis H IGHLIGHTS (1) ~$8B Total Assets ~$5B Total Loans ~$7B Total Deposits ~$0.8B Common Equity ~$0.5B Tangible Common Equity ~$900M Market Cap. > 1.3% ROAA (2) > 18% ROATCE (2) P ROFITABILITY ~7% TCE / TA ~9% Leverage Ratio ~13% CET1 Ratio ~17% Total Capital Ratio C APITAL AT C LOSE P RO F ORMA F INANCIAL H IGHLIGHTS P RO F ORMA F OOTPRINT P RO F ORMA D EPOSITS BY S TATE
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18 FBMS’ C OMMUNITY I NVOLVEMENT ‒ Community Development Financial Institutions (“CDFI”) are private sector financial institutions that focus primarily on personal lending and business development efforts in poorer local communities requiring revitalization in the U.S. ‒ Community Development Financial Institutions Funds was established in 1994 as a Division of the U.S. Treasury ‒ Purpose is to promote economic revitalization and community development in low - income communities through investments in and assistance to CDFIs ‒ CDFIs can be banks, credit unions, loan funds, microloan funds, or venture capital providers ‒ CDFIs are helping families finance their first homes, supporting community residents starting businesses and investing in local health centers, schools or community centers ‒ There are ~1,000 CDFIs operating nationwide ‒ FBMS is one of the largest CDFIs in the country and has been a certified CDFI since 2010 R ECENT FBMS A WARDS AND C ERTIFICATIONS R ECENT FBMS C HARITABLE C ONTRIBUTIONS / D ONATIONS ‒ Since 2010, $7,389,317 in FBMS awards have been leveraged to yield over $100,000,000 in Community Development financing ‒ In 2021, The First Bank gave a $1 million dollar donation for the expansion of Mississippi’s only children’s hospital ‒ The First Bank contributed $300,000 total to three Historically Black Colleges & Universities , Florida Agricultural & Mechanical University in Tallahassee, Florida, Jackson State University in Jackson, Mississippi and Southern University in Baton Rouge, Louisiana to support their College of Business, the Small Business Development Centers, Athletics and Scholarships ‒ In 2021, The First Bank awarded $610,000 to the Petal School District, the Hattiesburg Public School District, the Picayune School District, the Lamar County School District, Monroe County Schools, and Starkville Oktibbeha School District to further early learning efforts in those districts ‒ The First Bank made contributions in October 2021 of $650,000 in Florida and $150,000 in Georgia to AAA Scholarship Foundation, an approved scholarship organization in both states to fund scholarships for disadvantaged children ‒ The First Bank made contributions totaling $190,000 in November 2021 to twelve private schools/organizations in Mississippi that would provide financial intervention for low income individuals who desire attend 2021 B AUER F INANCIAL 5 S TAR R ATING S AFE A CCOUNT C ERTIFIED
$18.32 $18.59 $19.62 $18.58 $18.25 $18.09 $1.03 $1.04 $0.33 $0.16 FBMS Q2 '22 Standalone FBMS Q2 '22 + Beach Bancorp, Inc. Estimated Growth Through Close FBMS Est. at Close Net Merger Considerations & FMV Impacts (A/T) Pro Forma TBVPS, Subtotal Full One-Time Merger Expenses (A/T) Pro Forma TBVPS, Subtotal Day 2 Provision Impact Pro Forma TBVPS 19 T ANGIBLE B OOK V ALUE R ECONCILIATION Source: S&P Global Market Intelligence, FactSet (1) Financial data as of 6/30/22 pro forma for pending Beach Bancorp acquisition. Includes purchase accounting adjustments (2) Includes impact of estimates earnings (per FactSet consensus estimates), payment of dividends, and amortization of existi ng core deposit intangible; excludes future changes in AOCI (3) Includes merger consideration and purchase accounting adjustments (4) Includes full impact of one - time merger expenses for illustrative purposes (5) Assumes that provision expense for Day 1 CECL reserve and reserve for unfunded commitments occurs in connection with time ze ro impacts T ANGIBLE B OOK V ALUE P ER S HARE B UILDUP (2) (3) (4) (5)
20 HSBI’ S C ASH V ALUE L IFE I NSURANCE (CVLI) L ENDING B USINESS O VERVIEW G EOGRAPHIC B REAKDOWN – T OP 5 S TATES (2) Source: Company documents (1) As of 6/30/22 (2) By commitment ‒ Specialty Line of Lending Business developed by HSBI in 2017 to diversify the loan portfolio and augment revenue ‒ A trusted advisor and personal friend to HSBI management with extensive experience from a highly rated nationwide insurance company introduced the opportunity ‒ Provided a non - real estate dependent new lending line of business characterized by high quality credit metrics and attractive yield returns ‒ Established dedicated business unit, led by an experienced commercial lender and supported by specialized and dedicated staff for underwriting, closing, servicing and annually reviewing ‒ Currently represents ~13% of HSBI’s current total loan portfolio; pro forma will represent ~3% of total loan portfolio K EY P ORTFOLIO M ETRICS (1) O VERVIEW T RENDS S INCE 12/31/20 ($M) $142M OUTSTANDINGS 90% F LOATING R ATE L OANS $242M C OMMITTED 6.0 YRS A VG . MATURITY $318 K A VG . L OAN S IZE 4.36% W TD . A VG . Y IELD $0 L OSSES 0 N ON - A CCRUALS A SSET Q UALITY S INCE ‘17 33.4% 26.7% 9.0% 6.8% 5.6% 19% New York Georgia Florida California New Jersey Other $89.6 $120.7 $141.9 $148.8 $203.0 $242.3 Q4 '20 Q4 '21 Q2 '22 Outstanding Committed CAGR: 20% CAGR: 22%
Money Market & Savings 31.3% Demand Deposits 35.5% NOW Accounts 18.9% Time Deposits 14.3% Money Market & Savings 25.3% Demand Deposits 31.1% NOW Accounts 32.6% Time Deposits 11.0% C&I 20.0% Non Owner - Occupied CRE 22.8% Owner - Occupied CRE 24.7% Multifamily 0.4% 1 - 4 Family 14.4% C&D 16.4% Consumer & Other 1.3% C&I 13.5% Non Owner - Occupied CRE 20.4% Owner - Occupied CRE 24.0% Multifamily 2.2% 1 - 4 Family 24.5% C&D 13.4% Consumer & Other 1.9% 21 Source: S&P Global Market Intelligence Represents bank level data as of 6/30/22 Note: FBMS data pro forma to account for the recently announced acquisition of Beach Bancorp, Inc. (1) Excludes purchase accounting adjustments P RO F ORMA L OAN AND D EPOSIT C OMPOSITION L OANS (1) D EPOSITS
Florida 5.9% Georgia 94.1% Mississippi 28.5% Florida 29.8% Alabama 10.6% Louisiana 16.9% Georgia 14.1% Florida 3.6% Georgia 96.4% Mississippi 32.2% Florida 28.3% Alabama 16.1% Louisiana 13.3% Georgia 10.1% 22 P RO F ORMA L OAN AND D EPOSIT C ONCENTRATION BY S TATE L OANS (1) D EPOSITS Source: S&P Global Market Intelligence; Company provided documents Deposit data as of 6/30/22 Note: FBMS data pro forma to account for the recently announced acquisition of Beach Bancorp, Inc (1) Excludes purchase accounting adjustments
j The First Bancshares, Inc. 6480 Hwy 98 West Hattiesburg, MS 39402 www.TheFirstBank.com