S-4 1 tm2216802-1_s4.htm S-4 tm2216802-1_s4 - none - 78.0471995s
As filed with the Securities and Exchange Commission on May 27, 2022
Registration No. 333-       
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
The First Bancshares, Inc.
(Exact Name of Registrant as Specified in its Charter)
Mississippi
(State or other jurisdiction of
incorporation or organization)
6021
(Primary Standard Industrial
Classification Code Number)
64-0862173
(I.R.S. Employer
Identification No.)
6480 U.S. Hwy. 98 West, Suite A
Hattiesburg, Mississippi 39402
(601) 268-8998
(Address, including Zip Code, and Telephone Number, including Area Code, of Registrant’s Principal Executive Offices)
Donna T. (Dee Dee) Lowery
Chief Financial Officer
6480 U.S. Hwy. 98 West
Hattiesburg, Mississippi 39402
(601) 268-8998
(Name, Address, including Zip Code, and Telephone Number, including Area Code, of Agent for Service)
With copies to:
Mark C. Kanaly
William W. Hooper
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309
(404) 881-7000
Jack P. Greeley, Esq.
Smith Mackinnon, PA
301 East Pine Street, Suite 750
Orlando, Florida 32801
Telephone: (407) 843-7300
Approximate date of commencement of the proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective and all other conditions to the proposed merger described herein have been satisfied or waived.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or 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. (Check one):
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 7(a)(2)(B) of the Securities Act. ☐
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this proxy statement/prospectus is not complete and is subject to change. The First Bancshares, Inc. may not sell the securities offered by this proxy statement/prospectus until the registration statement filed with the Securities and Exchange Commission is effective. This proxy statement/prospectus shall not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY — SUBJECT TO COMPLETION — DATED MAY 27, 2022
Proxy Statement/Prospectus
[MISSING IMAGE: lg_thefirstbancsharesinc-4c.jpg]
[MISSING IMAGE: lg_beachbancorpinc-4c.jpg]
MERGER PROPOSED — YOUR VOTE IS VERY IMPORTANT
To the Shareholders of Beach Bancorp, Inc.:
The boards of directors of The First Bancshares, Inc., or First Bancshares, and Beach Bancorp, Inc., or BBI, have each unanimously approved the acquisition of BBI by First Bancshares. The acquisition will be accomplished pursuant to the terms of an Agreement and Plan of Merger, dated as of April 26, 2022, which we refer to as the merger agreement, by and between First Bancshares and BBI, whereby BBI will be merged with and into First Bancshares, which we refer to as the merger. Immediately following the merger of BBI with and into First Bancshares, Beach Bank, a wholly owned bank subsidiary of BBI, will merge with and into First Bancshares’ wholly owned bank subsidiary, The First Bank, or The First, with The First as the surviving bank, which we refer to as the bank merger.
If the merger is completed, each share of BBI common stock and each share BBI preferred stock, which we collectively refer to as BBI stock, issued and outstanding immediately prior to the effective time of the merger will be converted into the right to receive 0.1711, or the exchange ratio, of a share of First Bancshares common stock, which we refer to as the merger consideration.
Although the number of shares of First Bancshares common stock that BBI shareholders will receive is fixed, the market value of the merger consideration will fluctuate with the market price of First Bancshares common stock and will not be known at the time BBI shareholders vote on the merger. First Bancshares common stock is currently quoted on the NASDAQ Global Market. On April 25, 2022, the last full trading day before the public announcement of the merger agreement, based on the last reported sale price of First Bancshares common stock of $32.92 per share, the exchange ratio represented approximately $5.63 in value for each share of BBI stock to be converted into First Bancshares common stock. Based on the most recent reported closing sale price of First Bancshares common stock on [           ], 2022 of $[     ] per share, the exchange ratio represented $[    ] in value for each share of BBI stock to be converted into First Bancshares common stock. Based on the exchange ratio and the number of shares of BBI stock outstanding, the maximum number of shares of First Bancshares common stock offered by First Bancshares and issuable in the merger is 3,756,044. We urge you to obtain current market quotations for the price of First Bancshares common stock (trading symbol “FBMS”) because the value of the per share stock consideration will fluctuate based on First Bancshares’ common stock price.
BBI will hold a special meeting of its shareholders, referred to as the BBI special meeting, where BBI shareholders will be asked to consider and vote upon (1) a proposal to approve the merger agreement, and (2) a proposal to adjourn the BBI special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve the merger agreement.
The BBI special meeting will be held at 1211 N. Westshore Blvd., Suite 200, Tampa, FL 33607, on [           ], 2022, at 8:00 a.m., Eastern Time, subject to any adjournment or postponement thereof.
Each of First Bancshares and BBI expects that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which we refer to as the “Code,” with the result that the BBI stock exchanged for First Bancshares common stock will generally be tax-free.
Your vote is important.   Completion of the merger is subject to the approval of the merger agreement by the shareholders of BBI. Regardless of whether or not you plan to attend the BBI special meeting, please take the time to authorize a proxy to vote your shares in accordance with the instructions contained in this proxy statement/prospectus. If you submit a properly signed proxy card without indicating how you want to vote, your proxy will be counted as a vote “FOR” the proposal to approve the merger agreement and “FOR” the proposal to adjourn the BBI special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve the merger agreement. The failure to vote by submitting your proxy or attending the special meeting and voting in person will have the same effect as a vote against approval of the merger agreement. Submitting a proxy now will not prevent you from being able to vote in person at the BBI special meeting. If you hold your shares in “street name,” through a bank, broker or other nominee, you should instruct your bank, broker or other nominee how to vote in accordance with the voting instruction form you receive from your bank, broker or other nominee.

The board of directors of BBI has determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable and in the best interests of the shareholders of BBI, has unanimously approved the merger agreement and the merger and unanimously recommends that the shareholders of BBI vote “FOR” the proposal to approve the merger agreement and “FOR” the proposal to adjourn the BBI special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve the merger agreement.
This proxy statement/prospectus describes the BBI special meeting, the merger, the merger agreement, other documents related to the merger and other related matters. Please carefully read this entire proxy statement/prospectus, including “Risk Factors,” beginning on page 22, for a discussion of the risks relating to the proposed merger and owning First Bancshares common stock after the merger. You also can obtain information about First Bancshares and BBI from documents that have been filed with the Securities and Exchange Commission that are incorporated in the proxy statement/prospectus by reference.
If you have any questions concerning the merger, please contact Charles N. “Chip” Reeves, President and Chief Executive Officer, at (850) 244-6740. We look forward to seeing you at the meeting.
By order of the Board of Directors,
Charles N. “Chip” Reeves
President and Chief Executive Officer
Beach Bancorp, Inc.
Neither the Securities and Exchange Commission, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, nor any state securities commission or any other bank regulatory agency has approved or disapproved the securities to be issued in the merger or determined if this proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.
The securities to be issued in the merger are not savings or deposit accounts or other obligations of any bank or non-bank subsidiary of either First Bancshares or BBI, and they are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.
The date of this proxy statement/prospectus is [           ], 2022, and it is first being mailed or otherwise delivered to the BBI shareholders on or about [           ], 2022.

 
BEACH BANCORP, INC.
17 Eglin Parkway SE
Fort Walton Beach, FL 32548
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on [           ], 2022
To the Shareholders of Beach Bancorp, Inc.:
Beach Bancorp, Inc. (“BBI”) will hold a special meeting of shareholders at 8:00 a.m. local time, on [           ], 2022, at 1211 N. Westshore Blvd., Tampa, Florida 33607, for the following purposes:
1.
for holders of BBI stock, including all shares of BBI common stock and BBI preferred stock to consider and vote upon a proposal to approve the Agreement and Plan of Merger, dated as of April 26, 2022, by and among The First Bancshares, Inc. and BBI pursuant to which BBI will merge with and into The First Bancshares, Inc. and Beach Bank will merge with and into The First Bank, as more fully described in the attached proxy statement/prospectus; and
2.
for holders of BBI common stock to consider and vote upon a proposal to adjourn the BBI special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve the merger agreement.
We have fixed the close of business on [           ], 2022 as the record date for the BBI special meeting. Only holders of record of BBI stock at that time are entitled to notice of, and to vote at, the BBI special meeting, or any adjournment or postponement of the BBI special meeting. In order for the merger agreement to be approved, it must receive the affirmative vote by the holders of at least a majority of the outstanding shares of (i) BBI common stock, and (ii) BBI preferred stock voting as separate classes. The special meeting may be adjourned from time to time upon approval of holders of BBI common stock without notice other than by announcement at the meeting of the adjournment thereof, and any and all business for which notices hereby given may be transacted at such adjourned meeting. Certain holders of [    ]% of the outstanding shares of BBI common stock and [    ]% of the outstanding shares of BBI preferred stock have entered into voting and support agreements with The First Bancshares, Inc. pursuant to which holders have agreed to vote for approval of the merger agreement, subject to the terms of the voting and support agreements.
BBI shareholders have appraisal rights under Florida state law entitling them to obtain payment in cash for the fair value of their shares, provided they comply with each of the requirements under Florida law, including not voting in favor of the merger agreement and providing notice to BBI. For more information regarding appraisal rights, please see “The Merger — Appraisal Rights for BBI Shareholders” beginning on page [  ].
Your vote is very important.   We cannot complete the merger unless BBI’s shareholders approve the merger agreement.
Regardless of whether you plan to attend the BBI special meeting, please vote as soon as possible. If you hold stock in your name as a shareholder of record, please complete, sign, date and return the accompanying proxy card in the enclosed postage-paid return envelope as described on the proxy card. If you hold your stock in “street name” through a bank or broker, please follow the instructions on the voting instruction card furnished by the record holder.
The enclosed proxy statement/prospectus provides a detailed description of the special meeting, the merger, the documents related to the merger, including the merger agreement, and other related matters. We urge you to read the proxy statement/prospectus, including any documents incorporated in the proxy statement/prospectus by reference, and its appendices carefully and in their entirety. If you have any questions concerning the merger or the proxy statement/prospectus, would like additional copies of the proxy statement/prospectus or need help voting your shares of BBI stock, please contact Charles N. “Chip” Reeves, President and Chief Executive Officer, at (850) 244-6740.
 

 
BBI’s board of directors has determined and declared that the merger agreement, the merger and the transactions contemplated by the merger agreement, are advisable and in the best interests of BBI and its shareholders, has unanimously authorized, adopted and approved the merger agreement, the merger and the transactions contemplated by the merger agreement and recommends that BBI shareholders vote “FOR” the proposal to approve the merger agreement and “FOR” the proposal to adjourn the BBI special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve the merger agreement.
By Order of the Board of Directors,
Charles N. “Chip” Reeves
President and Chief Executive Officer
Beach Bancorp, Inc.
Tampa, Florida
[           ], 2022
The BBI board of directors unanimously recommends that holders of BBI common stock and preferred stock entitled to vote at the BBI special meeting vote “FOR” the merger proposal and “FOR” the adjournment proposal.
 

 
ADDITIONAL INFORMATION
This proxy statement/prospectus incorporates important business and financial information about First Bancshares and BBI from documents filed with the Securities and Exchange Commission, or SEC, that are not included in or delivered with this proxy statement/prospectus. You can obtain any of the documents filed with or furnished to the SEC by First Bancshares and BBI at no cost from the SEC’s website at http://www.sec.gov. You may also request copies of these documents, including documents incorporated by reference in this proxy statement/prospectus, at no cost by contacting First Bancshares or BBI at the contact information set forth below:
The First Bancshares, Inc.
6480 U.S. Hwy, 98 West
Hattiesburg, Mississippi 39402
Attention: Secretary
Telephone: (601) 268-8998
Beach Bancorp, Inc.
17 Eglin Parkway SE
Fort Walton Beach, FL 32548
Attention: Chief Financial Officer
Telephone: (850) 244-6740
You will not be charged for any of these documents that you request. To obtain timely delivery of these documents, you must request them no later than five business days before the date of the special meeting, or [           ], 2022.
You should rely only on the information contained in or incorporated by reference into this document. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this document. This document is dated [           ], 2022, and you should assume that the information in this document is accurate only as of such date. You should assume that the information incorporated by reference into this proxy statement/prospectus from another document is accurate as of the date of such other document. Neither the mailing of this document to BBI shareholders nor the issuance by First Bancshares of shares of First Bancshares common stock in connection with the merger will create any implication to the contrary.
This document does not constitute an offer to sell, or a solicitation of an offer to buy any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Except where the context otherwise indicates, information contained in this document regarding BBI has been provided by BBI and information contained in this document regarding First Bancshares has been provided by First Bancshares. See “Where You Can Find More Information” for more details.
 

 
TABLE OF CONTENTS
1
SUMMARY 7
16
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EXPERTS 102
102
A-1
B-1
C-1
D-1
 
ii

 
QUESTIONS AND ANSWERS
The following are answers to some questions that BBI shareholders may have regarding the proposed transaction between First Bancshares and BBI and the proposals being considered at the BBI special meeting. First Bancshares and BBI urge you to read carefully this entire proxy statement/prospectus, including the annexes, and the documents incorporated by reference into this proxy statement/prospectus, because the information in this section does not provide all the information that might be important to you.
Unless the context otherwise requires, references in this proxy statement/prospectus to: (1) “First Bancshares” refer to The First Bancshares, Inc., a Mississippi corporation, and its affiliates; (2) “The First” refer to The First Bank, a Mississippi state-chartered bank and the wholly owned bank subsidiary of First Bancshares; (3) “BBI” refer to Beach Bancorp, Inc., a Florida corporation, and its affiliates; and (4) “Beach Bank” refer to Beach Bank, a Florida state-chartered bank and the wholly owned bank subsidiary of BBI.
Q:
Why am I receiving this proxy statement/prospectus?
A:
First Bancshares and BBI have entered into an Agreement and Plan of Merger, dated as of April 26, 2022, which we refer to as the merger agreement. Pursuant to the merger agreement, BBI will merge with and into First Bancshares, with First Bancshares as the surviving company, which we refer to as the merger. Immediately after the merger, Beach Bank, a wholly owned bank subsidiary of BBI, will merge with and into First Bancshares’ wholly owned bank subsidiary, The First, with The First as the surviving bank, which we refer to as the bank merger. A copy of the merger agreement is included in this proxy statement/prospectus as Annex A.
The merger cannot be completed unless, among other things, the majority of the outstanding shares of BBI common stock entitled to vote at the BBI special meeting and a majority of the outstanding shares of BBI preferred stock entitled to vote at the BBI special meeting vote in favor of the proposal to approve the merger agreement, which we refer to as the merger proposal.
In addition, BBI is soliciting proxies from its shareholders with respect to a proposal to approve one or more adjournments of the BBI special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of such adjournment to approve the merger proposal, which we refer to as the adjournment proposal.
This proxy statement/prospectus contains important information about the merger agreement, the merger and the proposals being voted on at the BBI special meeting, and you should read it carefully. This is a proxy statement/prospectus because (1) BBI is soliciting proxies from the BBI shareholders and the proxy statement provides important information about the BBI special meeting to vote on the merger proposal and the adjournment proposal, and (2) First Bancshares will issue shares of First Bancshares common stock to holders of BBI common stock and BBI preferred stock in connection with the merger, and the prospectus provides important information about such shares. The enclosed materials allow BBI shareholders to authorize a proxy to vote their shares without attending the BBI special meeting.
Your vote is important. We encourage you to authorize your proxy as soon as possible.
Q:
What will I receive in the merger?
A:
If the merger is completed, each share of BBI common stock and each share of BBI preferred stock issued and outstanding immediately prior to the effective time of the merger (other than dissenters’ shares) will be converted into the right to receive 0.1711, or the exchange ratio, of a share of First Bancshares common stock.
First Bancshares will not issue any fractional shares of First Bancshares common stock in the merger. Rather, BBI shareholders who would otherwise be entitled to a fractional share of First Bancshares common stock upon the completion of the merger will instead receive cash (without interest and rounded to the nearest whole cent) in an amount equal to such fractional part of a share of First Bancshares common stock, rounded to the nearest one hundredth of a share, multiplied by the average of the daily volume weighted average price of First Bancshares common stock on the NASDAQ
 
1

 
Global Market for the ten trading days ending on the trading day immediately prior to the determination date. The determination date is defined as the date that is five days prior to the closing of the merger.
All stock options awarded under the BBI equity plans will fully vest at the closing of the merger and be converted automatically into an option to purchase shares of First Bancshares common stock equal to (i) the number of shares of BBI common stock subject to such option immediately prior to the closing, multiplied by (ii) the exchange ratio (rounded down to nearest whole share). The per share exercise price for the shares of First Bancshares common stock issuable upon exercise of such options will equal the quotient determined by dividing (i) the exercise price per share of the BBI common stock at which such option was exercisable immediately prior to the effective time by (ii) the exchange ratio (rounded up to the nearest whole cent). The merger agreement provides that outstanding and unvested restricted shares of BBI pursuant to its equity plans will fully vest at the closing of the merger and automatically be converted into the right to receive the merger consideration.
BBI may terminate the merger agreement if (i) the average closing price of First Bancshares common stock over the 10 trading days preceding the date that is five days prior to the closing date is less than $26.34, and (ii) the decline in the price of First Bancshares common stock (as measured by the average closing price divided by $32.92) is more than 20% greater than the decline in the KBW Regional Banking Index (KRX) (as measured by dividing the average closing price of the KBW Regional Banking Index over the 10 trading days preceding the date that is five days prior to the closing date by $113.05); provided, however, that First Bancshares has the option, but not the obligation, to adjust the exchange ratio to prevent the termination of merger agreement.
Q:
Will the value of the merger consideration change between the date of this proxy statement/prospectus and the time the merger is completed?
A:
Yes. The value of the merger consideration may fluctuate based upon the market value for First Bancshares common stock between the date of this proxy statement/prospectus and the completion of the merger. BBI shareholders will receive 0.1711 share of First Bancshares common stock for each share of BBI common stock and BBI preferred stock they hold. Any fluctuation in the market price of First Bancshares common stock after the date of this proxy statement/prospectus will change the value of the shares of First Bancshares common stock that BBI shareholders may receive.
Q:
How does BBI’s board of directors recommend that I vote at the special meeting?
A:
BBI’s board of directors unanimously recommends that you vote “FOR” the merger proposal and “FOR” the adjournment proposal.
Q:
When and where is the BBI special meeting?
A:
The BBI special meeting will held on [        ], 2022 at 8:00 a.m., local time, at 1211 N. Westshore Blvd., Tampa, Florida 33607.
Q:
What do I need to do now?
A:
After you have carefully read this proxy statement/prospectus and have decided how you wish to vote your shares, please authorize a proxy to vote your shares by promptly completing and returning the enclosed proxy card so that your shares are represented and voted at the BBI special meeting. If you are a registered shareholder, you must complete, sign, date and mail your proxy card in the enclosed postage-paid return envelope as soon as possible. If you hold your shares in “street name”, through a bank, broker or other holder of record, you must direct your bank, broker or other holder of record how to vote in accordance with the instructions you have received from your bank, broker or other holder of record. A shareholder who holds shares in “street name” through a broker, bank, trustee or other nominee who desires to attend the BBI special meeting in person must bring proof of beneficial ownership as of the record date, such as a letter from the broker, bank, trustee or other nominee that is the record owner of such beneficial owner’s shares, a brokerage account statement or the voting instruction form provided by the broker. Submitting your proxy by mail or directing your bank or broker to vote your shares will ensure that your shares are represented and voted at the BBI special meeting. Your proxy card must be received prior to the special meeting on [        ], 2022, in order to be counted.
 
2

 
Q:
What constitutes a quorum for the BBI special meeting?
A:
The presence, in person or by proxy, of the holders of a majority of the outstanding shares of BBI common stock and the holders of the majority of the outstanding shares of BBI preferred stock entitled to vote at the meeting is necessary to constitute a quorum. Shares of BBI stock represented at the special meeting but not voted, including shares that a shareholder abstains from voting, will be counted for purposes of establishing a quorum. Once a share of BBI stock is represented at the special meeting, it will be counted for the purpose of determining a quorum not only at the special meeting but also at any adjournment or postponement of the special meeting. In the event that a quorum is not present at the special meeting, it is expected that the special meeting will be adjourned or postponed.
Q:
What is the vote required to approve each proposal?
A:
The affirmative vote of a majority of the outstanding shares of BBI common stock and a majority of the outstanding shares of BBI preferred stock, each voting as a separate class, must vote in favor of the proposal to approve the merger agreement. If you vote to “ABSTAIN” with respect to the merger proposal or if you fail to vote on the merger proposal, this will have the same effect as voting “AGAINST” the merger proposal.
The adjournment proposal will be approved if the votes of BBI common stock cast in favor of the adjournment proposal exceed the votes cast against the adjournment proposal. If you vote to “ABSTAIN” with respect to the adjournment proposal or if you fail to vote on the adjournment proposal, this will have no effect on the outcome of the vote on the adjournment proposal.
Q:
What would happen if the adjournment proposal does not get approved by BBI shareholders?
A:
The completion of the merger is not conditioned upon shareholder approval of the adjournment proposal. If a quorum is present at the BBI special meeting and the adjournment proposal is not approved and there are not sufficient votes at the time of the BBI special meeting to approve the merger proposal, then the BBI board of directors will not have the ability to adjourn to solicit additional votes and the merger proposal will not be approved.
Q:
Who may solicit proxies on BBI’s behalf?
A:
In addition to solicitation of proxies by BBI by mail, proxies may also be solicited by BBI’s directors and employees personally, and by telephone, facsimile or other means.
Q:
Why is my vote important?
A:
If you do not submit a proxy or vote in person, it may be more difficult for BBI to obtain the necessary quorum to hold the special meeting. In addition, your failure to submit a proxy or vote in person, or failure to instruct your bank or broker how to vote, or abstention will have the same effect as a vote against approval of the merger proposal. The merger proposal must be approved by the affirmative vote of the holders of at least a majority of the outstanding shares of BBI common stock and a majority of the outstanding shares of BBI preferred stock. BBI’s board of directors unanimously recommends that you vote “FOR” the merger proposal.
Q:
How many votes do I have?
A:
BBI shareholders are entitled to one vote on each proposal to be considered at the special meeting for each share of BBI common stock or BBI preferred stock owned as of the close of business [        ], 2022, which is the record date for the BBI special meeting.
Q:
If my shares of common stock are held in “street name” by my bank or broker, will my bank or broker automatically vote my shares for me?
A:
No. Your bank, broker, or other nominee cannot vote your shares without instructions from you. You should instruct your bank, broker, or other nominee how to vote your shares in accordance with the instructions provided to you. Please check the voting form used by your bank, broker, or other nominee.
 
3

 
Q:
How do I vote?
A:
If you are a shareholder of record, you may have your shares of BBI stock voted on the matters to be presented at the BBI special meeting in either of the following ways:

You may vote by mail.   You may vote by mail by completing, signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope.

You may vote in person at the meeting.   You may vote by attending the special meeting and casting your vote in person.
If you are a beneficial owner (i.e., your shares are held in “street name”), please refer to the instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you. Your bank, brokerage firm or other nominee cannot vote your shares without instructions from you. Please note that if you are a beneficial owner and wish to vote in person at the special meeting, you must obtain a legal proxy from your bank, brokerage firm or other nominee.
Q:
Do BBI directors and executive officers have interests in the merger that are different from, or in addition to, my interests?
A:
Yes. In considering the recommendation of the BBI board of directors with respect to the merger agreement, you should be aware that BBI’s directors and executive officers have interests in the merger that are different from, or in addition to, the interests of BBI’s shareholders generally. Interests of officers and directors that may be different from or in addition to the interests of BBI’s shareholders include but are not limited to the receipt of continued indemnification and directors’ and officers’ insurance coverage under the merger agreement, cash payments to be made to three executive officers and a new employment agreement between one executive officer and The First. See “The Merger — Interests of BBI Directors and Executive Officers in the Merger” for a more detailed description of the interests.
Q:
What if I abstain from voting, fail to authorize a proxy or fail to vote in person?
A:
If you mark “ABSTAIN” on your proxy with respect to the merger proposal, fail to authorize a proxy or fail to vote in person at the BBI special meeting, or fail to instruct your bank or broker how to vote, it will have the same effect as a vote “AGAINST” the merger proposal and no effect on the adjournment proposal. If you sign your proxy but do not indicate your vote, your proxy will be voted “FOR” each proposal.
Q:
Can I attend the special meeting and vote my shares in person?
A:
Yes. All BBI shareholders as of the record date, including shareholders of record and shareholders who hold their shares through any other holder of record, are invited to attend the BBI special meeting. Holders of record of BBI stock can vote in person at the BBI special meeting. If you are not a shareholder of record, you must obtain a proxy, executed in your favor, from the record holder of your shares, such as a broker, bank or other nominee, to be able to vote in person at the BBI special meeting. If you plan to attend the BBI special meeting, you must hold your shares in your own name or have a letter from the record holder of your shares confirming your ownership. In addition, you must bring a form of personal photo identification with you in order to be admitted. BBI reserves the right to refuse admittance to anyone without proper proof of share ownership or without proper photo identification. The use of cameras, sound recording equipment, communications devices or any similar equipment during the BBI special meeting is prohibited without express written consent. Even if you plan to attend the special meeting, BBI encourages you to vote by proxy through the mail so your vote will be counted if you later decide not to attend the special meeting.
Q:
Can I change my vote?
A:
Yes. If you are a holder of record of BBI stock, you may revoke your proxy at any time prior to the BBI special meeting by: (1) delivering written notice of revocation to Charles N. “Chip” Reeves, President and Chief Executive Officer, Beach Bancorp, Inc., 1211 N. Westshore Blvd., Suite 200, Tampa, Florida 33607, (2) by returning a duly executed proxy card bearing a later date than the date with which your original proxy card was dated, or (3) by attending the BBI special meeting and voting in
 
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person. Your attendance at the BBI special meeting will not constitute automatic revocation of the proxy unless you deliver your ballot in person at the special meeting or deliver a written revocation to BBI prior to the voting of such proxy. If your shares are held in “street name”, you must contact your bank, broker or other nominee and follow its procedures for changing your vote.
Q:
What are the U.S. federal income tax consequences of the merger to BBI shareholders?
A:
The merger is expected to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which we refer to as the “Code.” BBI shareholders are not expected to recognize any gain or loss for U.S. federal income tax purposes on the exchange of their shares of BBI stock for shares of First Bancshares common stock pursuant to the merger. However, BBI shareholders may recognize gain or loss on any cash received in lieu of a fractional share of First Bancshares common stock.
For further information, see “The Merger — Material U.S. Federal Income Tax Consequences of the Merger.”
The U.S. federal income tax consequences described above may not apply to all holders of BBI stock. Your particular tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your tax advisor for a full understanding of the particular tax consequences of the merger to you.
Q:
Are BBI shareholders entitled to exercise dissenters’ rights?
A:
Yes. If a BBI shareholder wants to exercise appraisal rights and receive the fair value of shares of BBI stock in cash instead of the merger consideration, then you must file a written objection with BBI prior to the special meeting stating, among other things, that you will exercise your right to dissent if the merger is completed. Also, you may not vote in favor of the merger agreement and must follow other procedures, both before and after the special meeting, as described in Annex C to this proxy statement/prospectus. Note that if you return a signed proxy card without voting instructions or with instructions to vote “FOR” the merger agreement, then your shares will automatically be voted in favor of the merger agreement and you will lose all appraisal rights available under Florida law. A summary of these provisions can be found under “The Merger — Appraisal Rights for BBI Shareholders” beginning on page [   ] and detailed information about the special meeting can be found under “Information About the Special Meeting” on page [   ]. Due to the complexity of the procedures for exercising the right to seek appraisal, BBI shareholders who are considering exercising such rights are encouraged to seek the advice of legal counsel. Failure to strictly comply with the applicable Florida law provisions will result in the loss of the right of appraisal.
Q:
Should I send my BBI stock certificates with my proxy card for the BBI special meeting?
A:
No. You should NOT send your BBI stock certificates with your proxy card. First Bancshares, through its appointed exchange agent, will send BBI shareholders separate instructions for exchanging BBI stock certificates and BBI stock held in book-entry form for the merger consideration.
Q:
What should I do if I hold my shares of BBI stock in book-entry form?
A:
You are not required to take any specific actions to exchange your shares of BBI stock if your shares are held in book-entry form. After the completion of the merger, shares of BBI stock held in book-entry form automatically will be exchanged for the merger consideration, including shares of First Bancshares common stock in book-entry form, and any cash to be paid in lieu of fractional shares in the merger.
Q:
What happens if I sell or transfer ownership of shares of BBI stock after the record date for the BBI special meeting?
A:
The record date for the BBI special meeting is earlier than the expected date of completion of the merger. Therefore, if you sell or transfer ownership of your shares of BBI stock after the record date for the BBI special meeting, but prior to completion of the merger, you will retain the right to vote at the BBI special meeting, but the right to receive the merger consideration will transfer with the shares of BBI stock.
 
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Q:
Whom may I contact if I cannot locate my BBI stock certificate(s)?
A:
If you are unable to locate your original BBI stock certificate(s), you should contact Brianna Maikranz, Relationship Manager, at Brianna.Maikranz@broadridge.com. Generally, merger consideration for lost certificates cannot be delivered except upon the making of an affidavit claiming such certificate to be lost, stolen or destroyed and the posting of a bond in such amount as First Bancshares or the exchange agent may determine is reasonably necessary as indemnity against any claim that may be made with respect to such lost certificate.
Q:
When do you expect to complete the merger?
A:
First Bancshares and BBI expect to complete the merger in the third quarter of 2022. However, neither First Bancshares nor BBI can assure you when or if the merger will occur. First Bancshares and BBI must first obtain the approval of BBI shareholders for the merger proposal, as well as the necessary regulatory approvals.
Q:
What happens if the merger is not completed?
A:
If the merger is not completed, holders of BBI stock will not receive any consideration for their shares of BBI stock and preferred stock that otherwise would have been received in connection with the merger. Instead, BBI will remain an independent private company. If the merger is completed but, for any reason, the bank merger is not completed, it will have no impact on the consideration to be received by holders of BBI stock.
Q:
Whom should I call with questions?
A:
If you have any questions concerning the merger agreement, the merger or this proxy statement/prospectus, would like additional copies of this proxy statement/prospectus or need help voting your shares of BBI stock, please contact Charles N. “Chip” Reeves, President and Chief Executive Officer, at (850) 244-6740.
 
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SUMMARY
This summary highlights selected information from this proxy statement/prospectus. It may not contain all of the information that is important to you. We urge you to read carefully the entire proxy statement/prospectus, including the annexes, and the other documents to which we refer in order to fully understand the merger. See “Where You Can Find More Information.” Each item in this summary refers to the page of this proxy statement/prospectus on which that subject is discussed in more detail.
The Companies (page [•])
The First Bancshares, Inc.
6480 U.S. Hwy, 98 West
Hattiesburg, Mississippi 39402
(601) 268-8998
First Bancshares was incorporated in Mississippi on June 23, 1995 and serves as the bank holding company for The First, headquartered in Hattiesburg, Mississippi. First Bancshares is a registered bank holding company. As of March 31, 2022, First Bancshares had consolidated assets of approximately $6.2 billion, loans of $3.0 billion, deposits of $5.4 billion, and shareholders’ equity of $590 million. As of March 31, 2022, First Bancshares operated 87 full-service branches, one limited-service drive-in facility, and two loan production offices in Mississippi, Alabama, Louisiana, Georgia and Florida. The First’s deposits are insured by the FDIC.
Additional information about First Bancshares and its subsidiaries is included in documents incorporated by reference in this proxy statement/prospectus. See “Where You Can Find More Information.”
Beach Bancorp Inc.
17 Eglin Parkway SE
Fort Walton Beach, FL 32548
BBI is a bank holding company organized in 2020 to serve as the holding company for Beach Bank. Beach Bank commenced operations in 2001. BBI’s results of operations are primarily dependent on the results of Beach Bank. BBI is a registered bank holding company and, pursuant to the provisions of the Bank Holding Company Act, is subject to examination and comprehensive regulation by the FRB. As of March 31, 2022, BBI had consolidated total assets of $620 million, loans of $454 million, deposits of $492 million and shareholders’ equity of $82.0 million. Both BBI and Beach Bank maintain their headquarters in Fort Walton Beach, Florida.
For additional financial information about BBI and its subsidiaries, see the financial statements of BBI attached as Annex D to this proxy statement/prospectus.
The Merger
The Merger Agreement (page [•])
First Bancshares and BBI entered into an Agreement and Plan of Merger, dated as of April 26, 2022, which we refer to as the merger agreement. The merger agreement governs the merger. The merger agreement is included in this proxy statement/prospectus as Annex A. All descriptions in this summary and elsewhere in this proxy statement/prospectus of the terms and conditions of the merger are qualified by reference to the merger agreement. Please read the merger agreement carefully for a more complete understanding of the merger.
The Merger (page [•])
Pursuant to the merger agreement, BBI will merge with and into First Bancshares, with First Bancshares as the surviving company, which we refer to as the merger. Immediately after the merger, Beach Bank, a wholly owned banking subsidiary of BBI, will merge with and into First Bancshares’ wholly owned bank subsidiary, The First, with The First as the surviving bank, which we refer to as the bank merger.
 
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Merger Consideration (page [•])
If the merger is completed, each share of BBI common stock and each share of BBI preferred stock issued and outstanding immediately prior to the effective time of the merger (other than dissenters’ shares) will be converted into the right to receive 0.1711, or the exchange ratio, of a share of First Bancshares common stock.
All restricted stock awards granted under the BBI equity plans will fully vest at the closing of the merger and will be converted into the right to receive exchange ratio for each share restricted share of BBI common stock represented by the award.
All stock options awarded under the BBI equity plans will fully vest at the closing of the merger and be converted automatically into an option to purchase shares of First Bancshares common stock equal to (i) the number of shares of BBI common stock subject to such option immediately prior to the closing, multiplied by (ii) the exchange ratio (rounded down to nearest whole share). The per share exercise price for the shares of First Bancshares common stock issuable upon exercise of such options will equal the quotient determined by dividing (i) the exercise price per share of the BBI common stock at which such option was exercisable immediately prior to the effective time by (ii) the exchange ratio (rounded up to the nearest whole cent).
First Bancshares will not issue any fractional shares of First Bancshares common stock in the merger. Rather, BBI shareholders who would otherwise be entitled to a fractional share of First Bancshares common stock upon the completion of the merger will instead receive cash (without interest and rounded to the nearest whole cent) in an amount equal to such fractional part of a share of First Bancshares common stock, rounded to the nearest one hundredth of a share, multiplied by the average of the daily volume weighted average price of First Bancshares common stock on the NASDAQ Global Market for the ten trading days ending on the trading day immediately prior to the determination date. The determination date is defined as the date that is five days prior to the closing of the merger.
On April 25, 2022, the last full trading day before the public announcement of the merger agreement, based on the last reported sale price of First Bancshares common stock of $32.92 per share, the exchange ratio represented $5.63 in value for each share of BBI stock to be converted into First Bancshares common stock. Based on the most recent reported closing sale price of First Bancshares common stock on [       ], 2022 of $[    ] per share, the exchange ratio represented $[    ] value for each share of BBI stock to be converted into First Bancshares common stock. Based on the exchange ratio and the number of shares of BBI stock outstanding, the maximum number of shares of First Bancshares common stock offered by First Bancshares and issuable in the merger is 3,756,044. We urge you to obtain current market quotations for the price of First Bancshares common stock (trading symbol “FBMS”).
BBI may terminate the merger agreement if (i) the average closing price of First Bancshares common stock over the 10 trading days preceding the date that is five days prior to the closing date is less than $26.34, and (ii) the decline in the price of First Bancshares common stock (as measured by the average closing price divided by $32.92) is more than 20% greater than the decline in the KBW Regional Banking Index (KRX) (as measured by dividing the average closing price of the KBW Regional Banking Index over the 10 trading days preceding the date that is five days prior to the closing date by $113.05); provided, however, that First Bancshares has the option, but not the obligation, to adjust the exchange ratio to prevent the termination of merger agreement.
Procedures for Converting Shares of BBI Stock into Merger Consideration (page [•])
Promptly after the effective time of the merger, First Bancshares’ exchange agent will mail to each holder of record of BBI stock that is converted into the right to receive the merger consideration a letter of transmittal and instructions for the surrender of the holder’s BBI stock certificate(s) for the merger consideration (including cash in lieu of any fractional BBI shares), and any dividends or distributions to which such holder is entitled to pursuant to the merger agreement.
Please do not send in your certificates until you receive these instructions.
 
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Ancillary Agreements
Voting Agreements (page [•])
As a condition to First Bancshares entering into the merger agreement, all directors of BBI and Beach Bank who have voting power over shares of BBI stock and certain other BBI shareholders entered into voting agreements in the form attached as Exhibit A to the merger agreement attached as Annex A to this document, pursuant to which each such person agreed, among other things, to vote the shares of BBI stock held of record by such person (1) to approve the merger agreement and the merger (or any adjournment or postponement necessary to solicit additional proxies to approve the merger agreement and the merger) and (2) against any acquisition proposals or any actions that would result in a breach of any covenant, representation or warranty of BBI in the merger agreement.
Non-Competition and Non-Disclosure Agreements (page [•])
In addition, as a condition to First Bancshares entering into the merger agreement, each director of BBI and Beach Bank, entered into non-competition and non-disclosure agreements with First Bancshares in the form attached as Exhibit C to the merger agreement attached as Annex A to this document, pursuant to which each such person agreed to, among other things, (1) not disclose or use any confidential information or trade secrets of BBI for any purpose for so long as such information remains confidential information or a trade secret, (2) for a period of two years following the closing of the merger, not engage in certain competitive activities with First Bancshares, including not soliciting employees and customers of BBI, and (3) for a period of two years following the closing of the merger, not serve as a director or management official of another financial institution in the counties in Florida in which Beach Bank operates a banking office as of the closing of the merger.
Claims Letters (page [•])
At the time of the execution of the merger agreement, each director of BBI and Beach Bank executed a letter agreement with First Bancshares in the form attached as Exhibit D to the merger agreement attached as Annex A to this document, pursuant to which each such director released and discharged, effective upon the consummation of the merger, BBI and its subsidiaries, their respective directors and officers (in their capacities as such), and their respective successors and assigns (including First Bancshares and The First), from any and all liabilities or claims that the director has or claims to have as of the effective time of the merger, with certain exceptions.
Risk Factors Related to the Merger (page [•])
Before voting at the BBI special meeting, you should carefully consider all the information contained in or incorporated by reference into this proxy statement/prospectus in deciding how to vote for the proposals presented in the proxy statement/prospectus.
The BBI Special Meeting (page [•])
The special meeting of BBI shareholders will be held on [        ], 2022, at 8:00 a.m., local time, at 1211 N. Westshore Blvd., Suite 200, Tampa, FL 33607. At the special meeting, BBI shareholders will be asked to:

approve the merger proposal; and

approve the adjournment proposal.
Only holders of record at the close of business on [        ], 2022, the BBI record date, will be entitled to vote at the BBI special meeting. Each outstanding share of BBI stock is entitled to one vote on each proposal to be considered at the BBI special meeting. As of the BBI record date, there were [       ] shares of BBI common stock and [    ] shares of BBI preferred stock entitled to vote at the BBI special meeting. All directors of BBI and Beach Bank and certain other shareholders of BBI have entered into voting agreements with First Bancshares, pursuant to which they have agreed, solely in their capacity as BBI shareholders, to vote all of their shares of BBI stock in favor of the proposals to be presented at the BBI
 
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special meeting. As of the BBI record date, the directors and their affiliates and certain other shareholders who are parties to the voting agreements owned and were entitled to vote an aggregate of approximately 7,788,552 shares of BBI common stock and 5,276,021 shares of BBI preferred stock, which represented approximately [   ]% of the shares of BBI common stock and [   ]% of the shares of BBI preferred stock outstanding on that date. As of the BBI record date, the directors and executive officers of BBI and their affiliates beneficially owned and were entitled to approximately 5,073,839 shares of BBI common stock and 2,585,602 shares of BBI preferred stock, which represented approximately [   ]% of the shares of BBI common stock and [   ]% of the shares of BBI preferred stock outstanding on that date. As of the BBI record date, First Bancshares did not own or have the right to vote any of the outstanding shares of BBI stock.
The affirmative vote of a majority of the outstanding shares of BBI common stock and a majority of the outstanding shares of BBI preferred stock, each voting as a separate class, must vote in favor of the proposal to approve the merger agreement. If you vote to “ABSTAIN” with respect to the merger proposal or if you fail to vote on the merger proposal, this will have the same effect as voting “AGAINST” the merger proposal.
The adjournment proposal will be approved if the votes of BBI common stock cast in favor of the adjournment proposal exceed the votes cast against the adjournment proposal. If you vote to “ABSTAIN” with respect to the adjournment proposal or if you fail to vote on the adjournment proposal, this will have no effect on the outcome of the vote on the adjournment proposal.
Each share of BBI stock you own as of the record date for the special meeting entitles you to one vote at the special meeting on all matters properly presented at the meeting.
Recommendation of the BBI Board (page [•])
BBI’s board of directors has determined that the merger, the merger agreement and the transactions contemplated by the merger agreement are advisable and in the best interests of BBI and its shareholders and has unanimously approved the merger, the merger agreement and the transactions contemplated by the merger agreement. The BBI board of directors recommends that BBI shareholders vote “FOR” the merger proposal and “FOR” the adjournment proposal. See “The Merger — BBI’s Reasons for the Merger and Recommendations of the BBI Board of Directors.”
Board Composition and Management of First Bancshares after the Merger (page [•])
Each of the officers and directors of First Bancshares immediately prior to the effective time of the merger will be the officers and directors of the surviving company from and after the effective time of the merger, until their respective successors have been duly elected, appointed or qualified or until their earlier death, resignation or removal in accordance with the articles of incorporation and bylaws of First Bancshares.
Interests of BBI Directors and Executive Officers in the Merger (page [•])
BBI shareholders should be aware that BBI’s directors and executive officers have interests in the merger and have arrangements that are different from, or in addition to, those of BBI shareholders generally. These interests and arrangements may create potential conflicts of interest. BBI’s board of directors was aware of these interests and considered these interests, among other matters, in adopting and approving the merger agreement and the transactions contemplated by the merger agreement, including the merger, and in recommending that BBI shareholders vote in favor of the merger proposal.
These interests include:

cash payments to be made to three executive officers who have employment agreements with BBI and Beach Bank;

a new employment agreement between First Bancshares and one executive officer of Beach Bank;

the accelerated vesting of equity awards issued to certain directors and executive officers of BBI and Beach Bank at the closing of the merger and the assumption by First Bancshares of outstanding stock options awarded to certain directors and executive officers of BBI and Beach Bank; and
 
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the right to continued indemnification and directors’ and officers’ liability insurance coverage.
For a more complete description of these interests, see “The Merger — Interests of BBI Directors and Executive Officers in the Merger” and “The Merger Agreement — Indemnification and Directors’ and Officers’ Insurance.”
Dissenters’ Rights in the Merger (page [•])
Under Florida law, BBI shareholders have the right to dissent from the merger and receive a cash payment equal to the fair value of their shares of BBI stock instead of receiving the merger consideration. To exercise appraisal rights, BBI shareholders must strictly follow the procedures established by Sections 607.1301 through 607.1340 of the Florida Business Corporation Act, or the FBCA, which include filing a written objection with BBI prior to the special meeting stating, among other things, that the shareholder will exercise his or her right to dissent if the merger is completed, and not voting for approval of the merger agreement. A shareholder’s failure to vote against the merger agreement will not constitute a waiver of such shareholder’s dissenters’ rights.
For further information, see “The Merger — Dissenters’ Rights.”
Conditions to Completion of the Merger (page [•])
Currently, First Bancshares and BBI expect to complete the merger in the third quarter of 2022. As more fully described in this proxy statement/prospectus and in the merger agreement, the completion of the merger depends on a number of conditions being satisfied or, where legally permissible, waived. These conditions include, among others:

approval of the merger agreement by the holders of at least a majority of the outstanding shares of BBI common stock and a majority of the outstanding shares of BBI preferred stock, each voting as a separate class;

the receipt of all required regulatory approvals for the merger, without the imposition of any material on-going conditions or restrictions, and the expiration of all regulatory waiting periods;

the absence of any legal restraint (such as an injunction or restraining order) that would prevent the consummation of the merger;

the effectiveness of the registration statement of which this proxy statement/prospectus forms a part;

each party’s receipt of a U.S. federal income tax opinion from its outside legal counsel, dated the closing date of the merger, confirming the merger is expected to qualify as a “reorganization” within the meaning of Section 368(a) of the Code;

the shares of First Bancshares common stock to be issued to holders of BBI stock being approved for listing on the NASDAQ Global Market;

less than 10% of the issued and outstanding shares of BBI stock exercising dissenters’ rights;

the receipt of certain consents and approval from third parties; and

the absence of the occurrence of a material adverse effect on BBI or First Bancshares.
Neither First Bancshares nor BBI can be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed.
Regulatory Approvals Required for the Merger (page [•])
Both First Bancshares and BBI have agreed to use their reasonable best efforts to obtain all regulatory approvals (or waivers) required or advisable to complete the transactions contemplated by the merger agreement. These approvals include, among others, approval from the Board of Governors of the Federal Reserve System, or the Federal Reserve Board, the Mississippi Department of Banking and Consumer Finance, or the Mississippi Department, and various securities and other regulatory authorities. The U.S. Department of Justice may also review the impact of the merger on competition. First Bancshares and BBI
 
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have submitted all applications, waiver requests and notifications to obtain the required regulatory approvals. Although neither First Bancshares nor BBI knows of any reason why these regulatory approvals cannot be obtained, First Bancshares and BBI cannot be certain when or if they will be obtained, as the length of the review process may vary based on, among other things, requests by regulators for additional information or materials.
No Solicitation (page [•])
Under the merger agreement, BBI has agreed that it will not, and will cause its representatives not to, directly or indirectly, (1) initiate, solicit, induce or knowingly encourage, or take any action to facilitate the making of, any inquiry, offer or proposal which constitutes, or could reasonably be expected to lead to, an acquisition proposal, (2) participate in any discussions or negotiations regarding any acquisition proposal or furnish, or otherwise afford access, to any person (other than First Bancshares) any information or data with respect to BBI or any of its subsidiaries or otherwise relating to an acquisition proposal, (3) release any person from, waive any provisions of, or fail to enforce any confidentiality agreement or standstill agreement to which BBI is a party, or (4) enter into any agreement, confidentiality agreement, agreement in principle or letter of intent with respect to any acquisition proposal or approve or resolve to approve any acquisition proposal or any agreement, agreement in principle or letter of intent relating to an acquisition proposal.
However, prior to obtaining BBI’s required shareholder approval, BBI may, under certain specified circumstances, participate in negotiations or discussions with any third party making an acquisition proposal and provide confidential information to such third party (subject to a confidentiality agreement). BBI must notify First Bancshares promptly (but in no event later than 48 hours) after the receipt of such acquisition proposal.
Additionally, prior to obtaining BBI’s required shareholder approval, BBI may, under certain specified circumstances, withdraw its recommendation to its shareholders with respect to the merger and/or terminate the merger agreement in order to enter into an acquisition agreement with respect to a superior acquisition proposal if it determines in good faith, after consultation with and having considered the advice of outside legal counsel and financial advisors, that such acquisition proposal is a superior proposal and that failure to take such actions would reasonably be expected to cause it to violate its fiduciary duties to BBI’s shareholders under applicable law. However, BBI cannot take any of those actions in response to a superior proposal unless it provides First Bancshares with a five-business day period to negotiate in good faith to enable First Bancshares to adjust the terms and conditions of the merger agreement such that it would cause the superior proposal to no longer constitute a superior proposal.
Termination of the Merger Agreement (page [•])
The merger agreement can be terminated at any time prior to completion of the merger by mutual consent, or by either party in the following circumstances:

if the merger is not consummated on or before January 1, 2023, subject to automatic extension to February 15, 2023 if the only outstanding condition to closing is the receipt of regulatory approvals;

if any regulatory approval required for consummation of the transactions contemplated by the merger agreement has been denied by final non-appealable action by the relevant governmental authority or any application for such regulatory approval shall have been permanently withdrawn at the request of a governmental authority;

in the event that approval by the shareholders of BBI is not obtained at a meeting at which a vote was taken; or

in the event of a material breach by the other party of any representation, warranty or covenant contained in the merger agreement and such breach is not cured within 30 days.
In addition, First Bancshares may terminate the merger agreement in the following circumstances:

if BBI fails to comply in all material respects with its obligations pursuant to the non-solicitation covenants;
 
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if BBI withdraws, qualifies, amends, modifies or withholds its recommendation to its shareholders to approve the merger and the merger agreement, or makes any statement, filing or release, in connection with the shareholder meeting or otherwise, inconsistent with its recommendation (it being understood that taking a neutral position or no position with respect to an acquisition proposal shall be considered an adverse modification of its recommendation);

if BBI materially breaches its obligation to call, give notice of, and commence a meeting of shareholders to vote on the merger agreement;

if BBI approves or recommends an acquisition proposal (other than the merger agreement proposal);

if BBI fails to publicly recommend against a publicly announced acquisition proposal within three business days of being requested to do so by First Bancshares or fails to publicly reconfirm its recommendation to its shareholders within three business days of being requested to do so by First Bancshares; or

if BBI resolves or otherwise determines to take, or announces an intention to take, any of the foregoing actions.
In addition, BBI may terminate the merger agreement if:

BBI’s board of directors determines to enter into a definitive agreement with respect to a superior proposal in accordance with the terms of the merger agreement but only if BBI pays to First Bancshares a $4,600,000 termination fee; or

(i) the average closing price of First Bancshares common stock over the 10 trading days preceding the date that is five days prior to the closing date is less than $26.34, and (ii) the decline in the price of First Bancshares common stock (as measured by the average closing price divided by $32.92) is more than 20% greater than the decline in the KBW Regional Banking Index (KRX) (as measured by dividing the average closing price of the KBW Regional Banking Index over the 10 trading days preceding the date that is five days prior to the closing date by $113.05); provided, however, that First Bancshares has the option, but not the obligation, to adjust the exchange ratio to prevent the termination of merger agreement.
Termination Fee (page [•])
If the merger agreement is terminated under certain circumstances, including circumstances involving a change in recommendation by BBI’s board of directors, BBI may be required to pay First Bancshares a termination fee of $4,600,000. The termination fee could discourage other companies from seeking to acquire or merge with BBI.
Expenses (page [•])
Each party will bear all expenses incurred in connection with the merger and the transactions contemplated by the merger agreement.
Material U.S. Federal Income Tax Consequences of the Merger (page [•])
The merger is exected to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. It is a condition to the respective obligations of First Bancshares and BBI to complete the merger that each of First Bancshares and BBI receives a tax opinion from its respective outside legal counsel, dated as of the closing date of the merger, to that effect. Based upon a qualification of the merger as a reorganization under the Code, holders of BBI stock who exchange their shares of BBI stock for shares of First Bancshares common stock generally will not recognize gain or loss with respect to the receipt of First Bancshares common stock in the merger. Holders of BBI stock generally will be subject to tax with respect to any cash consideration received, including cash received instead of fractional shares of First Bancshares common stock. For further information, see “The Merger — Material U.S. Federal Income Tax Consequences of the Merger.”
The U.S. federal income tax consequences described above may not apply to all holders of BBI stock. Your particular tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your tax advisor for a full understanding of the particular tax consequences of the merger to you.
 
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Accounting Treatment of the Merger (page [•])
First Bancshares will account for the merger under the acquisition method of accounting for business combinations under U.S. generally accepted accounting principles, or GAAP.
The Rights of Holders of BBI Common Stock and BBI Preferred Stock Will Change as a Result of the Merger (see page [•])
The rights of holders of BBI common stock and BBI preferred stock are governed by Florida law, as well as BBI’s Articles of Incorporation (which we refer to as the BBI Articles), and BBI’s Bylaws, as amended (which we refer to as the BBI Bylaws). After completion of the merger, the rights of former BBI shareholders will be governed by Mississippi law and by First Bancshares’ Amended and Restated Articles of Incorporation, as amended (which we refer to as the First Bancshares Articles), and First Bancshares’ Amended and Restated Bylaws (which we refer to as the First Bancshares Bylaws).
Material differences between the rights of shareholders of BBI and shareholders of First Bancshares include the process for determining the size of the board of directors, the process for removing directors, limitations of director liability, indemnification of officers, directors and employees, the ability of shareholders to act by written consent, and shareholder proposals and advance notice requirements. The material differences between the organizational documents and the rights of shareholders of BBI and shareholders of First Bancshares are explained in more detail under the section “Comparison of Rights of First Bancshares shareholders and BBI shareholders” beginning on page [•].
Opinion of BBI’s Financial Advisor (page [•] and Annex B)
Piper Sandler & Co., which we refer to as Piper Sandler, BBI’s financial advisor, delivered its opinion, dated April 21, 2022, to BBI’s board of directors to the effect that, as of the date of the opinion and subject to factors, qualifications, limitations and assumptions set forth in the opinion, the merger consideration was fair, from a financial point of view, to the common shareholders of BBI.
The full text of the written opinion of BBI, which sets forth the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Piper Sandler in connection with its opinion, is attached as Annex B to this proxy statement/prospectus. Piper Sandler’s opinion was for the information of, and directed to, BBI’s board of directors (in its capacity as such) in connection with its consideration of the financial terms of the merger. Piper Sandler’s opinion is not a recommendation as to how any holder of BBI’s common stock should vote with respect to the proposal to approve the merger agreement or any other matter. It does not address the underlying business decision of BBI to engage in the merger, the relative merits of the merger as compared to any other alternative business strategies that might exist for BBI or the effect of any other transaction in which BBI might engage.
For further information, please see the section entitled “The Merger — Opinion of BBI’s Financial Advisor” beginning on page [•].
Closing and Effective Time of the Merger (see page [•])
The closing date is currently expected to occur in the third quarter of 2022. Simultaneously with the closing of the merger, First Bancshares will file the articles of merger with the Secretary of State of the State of Mississippi and the Secretary of State of the State of Florida. The merger will become effective at the later of the time the articles of merger are filed or such other time as may be specified in the articles of merger. Neither First Bancshares nor BBI can predict, however, the actual date on which the merger will be completed because it is subject to factors beyond each company’s control, including whether or when the required regulatory approvals and BBI’s shareholder approvals will be received.
Market Prices and Share Information (see page [•])
First Bancshares common stock is listed on the NASDAQ Global Market under the symbol “FBMS.” Neither the BBI common stock nor the BBI preferred stock is listed for trading on any exchange. The following table sets forth the closing sale prices of First Bancshares common stock as reported on the
 
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NASDAQ Global Market on April 25, 2022, the last full trading day before the public announcement of the merger agreement, and on [       ], 2022, the latest practicable trading date before the date of this proxy statement/prospectus.
First
Bancshares
Common
Stock
Implied Value of
One Share of
BBI
Common Stock to
be Converted
to First Bancshares
Common Stock
April 25, 2022
$ 32.92 $ 5.63
[    ], 2022
$ [    ] $ [    ]
 
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Some of the statements contained or incorporated by reference in this proxy statement/prospectus contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about the financial condition, results of operations, earnings outlook and business plans, goals, expectations and prospects of First Bancshares, BBI and the combined company following the proposed merger and statements for the period after the merger. Words such as “anticipate,” “believe,” “feel,” “expect,” “estimate,” “indicate,” “seek,” “strive,” “plan,” “intend,” “outlook,” “forecast,” “project,” “position,” “target,” “mission,” “contemplate,” “assume,” “achievable,” “potential,” “strategy,” “goal,” “aspiration,” “outcome,” “continue,” “remain,” “maintain,” “trend,” “objective” and variations of such words and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions, as they relate to First Bancshares, BBI, the proposed merger or the combined company following the merger often identify forward-looking statements, although not all forward-looking statements contain such words.
These forward-looking statements are predicated on the beliefs and assumptions of management based on information known to management as of the date of this proxy statement/prospectus and do not purport to speak as of any other date. Forward-looking statements may include descriptions of the expected benefits and costs of the transaction; forecasts of revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries; management plans relating to the merger; the expected timing of the completion of the merger; the ability to complete the merger; the ability to obtain any required regulatory, shareholder or other approvals; any statements of the plans and objectives of management for future or past operations, including the execution of integration plans; any statements of expectation or belief and any statements of assumptions underlying any of the foregoing.
The forward-looking statements contained or incorporated by reference in this proxy statement/prospectus reflect the view of management as of this date with respect to future events and are subject to risks and uncertainties. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, actual results could differ materially from those anticipated by the forward-looking statements or historical results. Such risks and uncertainties include, among others, the following possibilities:

the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, including a termination of the merger agreement under circumstances that could require BBI to pay a termination fee to First Bancshares;

the inability to complete the merger contemplated by the merger agreement due to the failure to satisfy conditions necessary to close the merger, including the receipt of the requisite approvals of BBI shareholders;

the risk that a regulatory approval that may be required for the merger is not obtained or is obtained subject to conditions that are not anticipated;

risks associated with the timing of the completion of the merger;

management time and effort may be diverted to the resolution of merger-related issues;

the risk that the businesses of First Bancshares and BBI will not be integrated successfully, or such integration may be more difficult, time-consuming or costly than expected;

First Bancshares’ ability to achieve the synergies and value creation contemplated by the proposed merger with BBI;

the expected growth opportunities or costs savings from the merger with BBI may not be fully realized or may take longer to realize than expected;

revenues following the transaction may be lower than expected as a result of losses of customers or other reasons;

potential deposit attrition, higher than expected costs, customer loss and business disruption associated with First Bancshares’ integration of BBI, including, without limitation, potential difficulties in maintaining relationships with key personnel;
 
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the outcome of any legal proceedings that may be instituted against First Bancshares or BBI or their respective boards of directors;

general economic conditions, either globally, nationally, in the States of Mississippi or Florida, or in the specific markets in which First Bancshares or BBI operate;

limitations placed on the ability of First Bancshares and BBI to operate their respective businesses by the merger agreement;

the effect of the announcement of the merger on First Bancshares’ and BBI’s business relationships, employees, customers, suppliers, vendors, other partners, standing with regulators, operating results and businesses generally;

customer acceptance of the combined company’s products and services;

the amount of any costs, fees, expenses, impairments and charges related to the merger;

fluctuations in the market price of First Bancshares common stock and the related effect on the market value of the merger consideration that BBI shareholders will receive upon completion of the merger;

the introduction, withdrawal, success and timing of business initiatives;

significant increases in competition in the banking and financial services industry;

legislation, regulatory changes or changes in monetary or fiscal policy that adversely affect the businesses in which First Bancshares or BBI are engaged, including potential changes resulting from currently proposed legislation;

credit risk of borrowers, including any increase in those risks due to changing economic conditions;

changes in consumer spending, borrowing, and savings habits;

competition among depository and other financial institutions;

liquidity risk affecting First Bancshares’ or BBI’s ability to meet their respective obligations when they become due;

interest rate risk involving the effect of a change in interest rates;

compliance risk resulting from violations of, or nonconformance with, laws, rules, regulations, prescribed practices or ethical standards;

strategic risk resulting from adverse business decisions or improper implementation of business decisions;

reputational risk that adversely affects earnings or capital arising from negative public opinion;

terrorist activities risk that results in loss of consumer confidence and economic disruptions; and

other risks and uncertainties detailed from time to time in First Bancshares’ SEC filings.
Any forward-looking statements made in this proxy statement/prospectus or in any documents incorporated by reference into this proxy statement/prospectus, are subject to the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this proxy statement/prospectus or the date of any document incorporated by reference in this proxy statement/prospectus. First Bancshares and BBI do not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made, unless and only to the extent otherwise required by law. All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this proxy statement/prospectus and attributable to First Bancshares, BBI or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this proxy statement/prospectus.
 
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SELECTED CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
OF FIRST BANCSHARES
The following selected consolidated financial information for the fiscal years ended December 31, 2017 through December 31, 2021 is derived from audited consolidated financial statements of First Bancshares. The consolidated financial information as of and for the three months ended March 31, 2022 and March 31, 2021 is derived from unaudited consolidated financial statements and, in the opinion of First Bancshares’ management, reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of these data for those dates. The selected consolidated income data for the three months ended March 31, 2022 is not necessarily indicative of the results that may be expected for the entire year ending December 31, 2022. You should not assume the results of operations for any past periods indicate results for any future period. You should read this information in conjunction with First Bancshares’ consolidated financial statements and related notes thereto included in First Bancshares’ Annual Report on Form 10-K for the year ended December 31, 2021, and in First Bancshares’ Quarterly Report on Form 10-Q for the three months ended March 31, 2022, each of which are incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information.”
As of and for the
Three Months Ended March 31,
As of and for the Years Ended December 31,
2022
2021
2021
2020
2019
2018
2017
(unaudited)
(in thousands, except ratios, share and per share data)
Selected Consolidated Operating Data:
Interest income
$ 42,741 $ 45,187 $ 176,745 $ 179,348 $ 148,529 $ 99,978 $ 66,069
Interest expense
4,102 5,958 19,681 26,664 26,723 15,091 6,909
Net interest income
38,639 39,229 157,064 152,684 121,806 84,887 59,160
Provision for loan losses
(1,104) 25,151 3,738 2,120 506
Net interest income after provision for loan losses
38,639 39,229 158,168 127,533 118,068 82,767 58,654
Noninterest income
11,157 9,472 37,473 41,876 26,947 20,561 14,363
Noninterest expense
28,590 27,264 114,559 106,341 88,569 76,311 55,446
Income before income tax
expense
21,206 21,437 81,082 63,068 56,446 27,017 17,571
Income tax expense
4,377 4,793 16,915 10,563 12,701 5,792 6,955
Net income
16,829 16,644 64,167 52,505 43,745 21,225 10,616
Preferred dividends and stock accretion
Net income available to common
shareholders
$ 16,829 $ 16,644 $ 64,167 $ 52,505 $ 43,745 $ 21,225 $ 10,616
Balance Sheet Data:
Securities available for sale
$ 1,613,903 $ 1,157,326 $ 1,774,058 $ 1,049,657 $ 791,777 $ 508,928 $ 366,862
Securities held to maturity
372,062 6,000 6,000
Loans, net of allowance for loan losses
2,938,626 3,022,430 2,928,811 3,087,858 2,586,450 2,050,357 1,217,018
Total assets
6,196,095 5,442,798 6,077,414 5,152,760 3,941,863 3,003,986 1,813,238
Deposits
5,437,738 4,620,297 5,226,784 4,215,280 3,076,533 2,457,459 1,470,565
Shareholders’ equity
590,440 643,949 676,172 644,815 543,658 363,254 222,468
Per Share Data:
Earnings per common share,
basic
$ .81 $ .79 $ 3.05 $ 2.53 $ 2.57 $ 1.63 $ 1.12
Earnings per common share,
diluted
.81 .79 3.03 2.52 2.55 1.62 1.11
 
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As of and for the
Three Months Ended March 31,
As of and for the Years Ended December 31,
2022
2021
2021
2020
2019
2018
2017
(unaudited)
(in thousands, except ratios, share and per share data)
Cash dividends paid per common share
3,423 2,688 11,991 8,589 5,190 2,557 1,416
Weighted average common shares outstanding, basic
20,697,946 21,009,088 21,017,189 20,718,544 17,050,095 12,985,733 9,484,460
Weighted average common shares outstanding, diluted
20,846,997 21,200,558 21,166,709 20,822,650 17,184,085 13,093,925 9,561,260
Book value per common share
$ 28.82 $ 30.64 $ 32.17 $ 30.54 $ 28.91 $ 24.49 $ 19.92
Performance Ratios:
Return on average assets
1.09% 1.25% 1.17% 1.10% 1.26% 0.87% .60%
Return on average equity
10.1 10.3 9.8 8.6 9.5 7.6 6.2
Net interest margin
2.73 3.28 3.16 3.59 3.98 3.89 3.75
Net interest margin, fully tax equivalent basis(1)
2.78 3.34 3.21 3.64 4.02 3.94 3.83
As of and for the
Three Months Ended March 31,
As of and for the Years Ended December 31,
2022
2021
2021
2020
2019
2018
2017
(unaudited)
(in thousands, except ratios, share and per share data)
Asset Quality Ratios:
Nonaccrual loans to total loans and
other real estate
0.83 0.98 0.94 1.07 1.48 1.21 0.46
Allowance for loan losses to total loans
1.06 1.07 1.04 1.14 0.53 0.49 0.67
Allowance for loan losses to nonaccrual loans
1.28x 1.09x 1.10x 1.06x .36x .46x 1.5x
Net charge-offs to average total loans
(0.1) 0.5 0.13 0.11 (0.004) 0.01 (0.02)
Consolidated Capital Ratios:
Tier 1 leverage ratio
8.2 9.0 9.2 9.2 10.3 10.2 11.7
Common equity Tier 1 capital ratio
13.0 13.8 13.7 13.5 12.5 11.5 14.2
Tier 1 risk-based capital ratio
13.5 14.3 14.1 14.0 13.0 12.2 14.9
Total risk-based capital ratio
17.8 19.3 18.6 19.1 15.8 15.6 15.5
Total shareholders’ equity to total assets
9.5 11.8 11.1 12.5 13.8 12.1 12.3
 
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COMPARATIVE MARKET PRICES AND DIVIDENDS
First Bancshares common stock is listed on the NASDAQ Global Market under the symbol “FBMS.” As of [      ], 2022, the latest practicable date prior to this proxy statement/prospectus, there were [      ] shares of First Bancshares common stock outstanding, which were held by approximately [      ] holders of record. As of the record date for the BBI special meeting, there were [      ] shares of BBI common stock outstanding, which were held by approximately [      ] holders of record, and [      ] shares of BBI preferred stock outstanding, which were held by approximately [      ] holders of record.
To First Bancshares’ knowledge, the only shareholders who owned more than 5% of the outstanding shares of First Bancshares common stock on as of March 31, 2022 were BlackRock, Inc. (7.94%), T. Rowe Price Associates, Inc. (11.88%), and The Vanguard Group (4.71%).
The following tables show, for the indicated periods, the high and low sales prices per share for First Bancshares common stock, as reported on NASDAQ. Cash dividends declared and paid per share on First Bancshares common stock are also shown for the periods indicated below.
The high and low sales prices reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not necessarily represent actual transactions.
First Bancshares Common Stock
Sale Price
Dividends
Declared
Per Share
High
Low
2019
First Quarter
$ 33.09 $ 29.09 $ 0.07
Second Quarter
$ 31.72 $ 28.07 $ 0.08
Third Quarter
$ 34.28 $ 29.43 $ 0.08
Fourth Quarter
$ 35.88 $ 30.93 $ 0.08
2020
First Quarter
$ 35.62 $ 15.27 $ 0.10
Second Quarter
$ 25.48 $ 16.05 $ 0.10
Third Quarter
$ 23.96 $ 19.10 $ 0.10
Fourth Quarter
$ 31.00 $ 20.66 $ 0.12
2021
First Quarter
$ 38.39 $ 29.17 $ 0.13
Second Quarter
$ 40.46 $ 36.36 $ 0.14
Third Quarter
$ 41.41 $ 34.76 $ 0.15
Fourth Quarter
$ 42.89 $ 36.30 $ 0.16
2022
First Quarter
$ 40.81 $ 33.33 $ 0.17
Second Quarter (through       , 2022)
On April 25, 2022, the last full trading day before the public announcement of the merger agreement, the closing sale price per share of First Bancshares common stock was $32.92, and on [        ], 2022, the latest practicable date before the date of this proxy statement/prospectus, the closing sale price per share of First Bancshares common stock was $[        ].
BBI shareholders are advised to obtain current market quotations for First Bancshares common stock. The market price of First Bancshares common stock will fluctuate between the date of this proxy statement/prospectus and the date of completion of the merger. No assurance can be given concerning the market price of First Bancshares common stock before or after the effective date of the merger. Changes in the market price of First Bancshares common stock prior to the completion of the merger may affect the market value of the merger consideration that BBI shareholders will receive.
 
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The following table shows, for the indicated periods, the high and low sales prices per share for BBI common stock and preferred stock for those transactions known to BBI management. There were no dividends paid on the shares of BBI common stock or preferred stock for the indicated periods.
BBI Common Stock
BBI Preferred Stock
Sale Price
Sale Price
High
Low
High
Low
2020
First Quarter
$ $ $ $
Second Quarter
$ 3.45 $ 3.45 $ 3.45 $ 3.45
Third Quarter
$ 3.30 $ 3.30 $ $
Fourth Quarter
$ $ $ $
2021
First Quarter
$ $ $ $
Second Quarter
$ $ $ $
Third Quarter
$ $ $ $
Fourth Quarter
$ $ $ $
2022
First Quarter
$ $ $ $
Second Quarter (through        , 2022)
$ $ $ $
Dividends
The principal sources of funds to First Bancshares to pay dividends are the dividends received from The First. Consequently, dividends are dependent upon The First’s earnings, capital needs, regulatory policies, as well as statutory and regulatory limitations. Federal and state banking laws and regulations restrict the amount of dividends and loans a bank may make to its parent company. Approval by First Bancshares’ regulators is required if the total of all dividends declared in any calendar year exceed the total of its net income for that year combined with its retained net income of the preceding two years. See “Description of Capital Stock — Common Stock — Dividends.”
 
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RISK FACTORS
In addition to general investment risks and the other information contained in or incorporated by reference into this proxy statement/prospectus, including the matters addressed under the section “Cautionary Statement Concerning Forward-Looking Statements,” you should carefully consider the following risk factors in deciding how to vote for the proposals presented in this proxy statement/prospectus. You should also consider the other information in this proxy statement/prospectus and the other documents incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information.”
Risks Related to the Merger
Because of the fixed exchange ratio and the fluctuation of the market price of First Bancshares common stock, BBI shareholders will not know at the time of the special meeting the market value of the merger consideration they will receive at the effective time of the merger.
Pursuant to the merger agreement, each share of BBI stock issued and outstanding immediately prior to the effective time of the merger will be converted into the right to receive 0.1711 shares of First Bancshares common stock.
The market value of the merger consideration may vary from the market value on the date BBI and First Bancshares announced the merger, on the date that this proxy statement/prospectus is mailed, on the date of the BBI special meeting and on the date the merger is completed and thereafter due to fluctuations in the market price of First Bancshares common stock. Any fluctuation in the market price of First Bancshares common stock after the date of this proxy statement/prospectus will change the value of the shares of First Bancshares common stock that BBI shareholders may receive. Stock price changes may result from a variety of factors that are beyond the control of First Bancshares and BBI, including but not limited to general market and economic conditions, changes in their respective businesses, operations and prospects and regulatory considerations. Therefore, at the time of the BBI special meeting, BBI shareholders will not know the precise market value of the merger consideration they may receive at the effective time of the merger. In addition, BBI shareholders will not know the exact exchange ratio at the time of the BBI special meeting, as it may be adjusted as a result of the measurement price. BBI shareholders should obtain current sale prices for shares of First Bancshares common stock before voting their shares at the BBI special meeting.
The merger and related transactions are subject to approval by BBI shareholders.
The merger cannot be completed unless the BBI shareholders approve the merger agreement by the affirmative vote of a majority of the outstanding shares of BBI common stock and a majority of the outstanding shares of BBI preferred stock, each voting as a separate class.
Failure to complete the merger could negatively affect the value of the shares and the future business and financial results of BBI.
If the merger is not completed, the ongoing business of BBI could be adversely affected and BBI will be subject to a variety of risks associated with the failure to complete the merger, including the following:

BBI being required, under certain circumstances, to pay to First Bancshares a termination fee equal to $4,600,000;

substantial costs incurred by BBI in connection with the proposed merger, such as legal, accounting, financial advisor, printing and mailing fees;

the loss of key employees and customers;

the disruption of operations and business;

deposit attrition, customer loss and revenue loss;

unexpected problems with costs, operations, personnel, technology and credit;

diversion of management focus and resources from operational matters and other strategic opportunities while working to implement the merger; and
 
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reputational harm due to the adverse perception of any failure to successfully complete the merger.
If the merger is not completed, these risks could materially affect the business, financial results and the value of BBI stock.
BBI will be subject to business uncertainties and contractual restrictions while the merger is pending.
Uncertainty about the effect of the merger on employees and customers may have an adverse effect on BBI. These uncertainties may impair BBI’s ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that deal with BBI to seek to change existing business relationships with BBI. Retention of certain employees by BBI may be challenging while the merger is pending, as certain employees may experience uncertainty about their future roles with BBI or First Bancshares. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with BBI or First Bancshares, BBI’s business or the business assumed by First Bancshares following the merger could be harmed. In addition, BBI has agreed to certain contractual restrictions on the operation of its business prior to closing. See “The Merger Agreement — Covenants and Agreements” for a description of the restrictive covenants applicable to BBI.
The merger agreement limits BBI’s ability to pursue an alternative acquisition proposal and requires BBI to pay a termination fee of $4,600,000 under limited circumstances relating to alternative acquisition proposals.
Under the merger agreement, BBI has agreed not to initiate, solicit, induce or knowingly encourage, or take any action to facilitate any alternative business combination transaction or, subject to certain exceptions, participate in discussions or negotiations regarding, or furnish any non-public information relating to, any alternative business combination transaction. See “The Merger Agreement — No Solicitation” on page [•]. The merger agreement also provides for BBI to pay to First Bancshares a termination fee in the amount of $4,600,000 in the event that the merger agreement is terminated for certain reasons. See “The Merger Agreement — Termination Fee” on page [•]. These provisions could discourage a potential competing acquirer that might have an interest in acquiring BBI from considering or making a competing acquisition proposal, even if the potential competing acquirer was prepared to pay consideration with a higher per share cash value than the market value proposed to be received or realized in the merger, or might result in a potential competing acquirer proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances under the merger agreement.
The merger agreement contains provisions granting both BBI and First Bancshares the right to terminate the merger agreement in certain circumstances.
The merger agreement contains certain termination rights, including the right, subject to certain exceptions, of either party to terminate the merger agreement if the merger is not completed on or prior to January 1, 2023 (subject to automatic extension to February 15, 2023 if the only outstanding condition to closing is the receipt of regulatory approvals), and the right of BBI to terminate the merger agreement, subject to certain conditions, to accept a business combination transaction deemed to be superior to the merger by the BBI board of directors. Additionally, BBI may terminate the merger agreement if (i) the average closing price of First Bancshares common stock over the 10 trading days preceding the date that is five days prior to the closing date is less than $26.34, and (ii) the decline in the price of First Bancshares common stock (as measured by the average closing price divided by $32.92) is more than 20% greater than the decline in the KBW Regional Banking Index (KRX) (as measured by dividing the average closing price of the KBW Regional Banking Index over the 10 trading days preceding the date that is five days prior to the closing date by $113.05); provided, however, that First Bancshares has the option, but not the obligation, to adjust the exchange ratio to prevent the termination of merger agreement.
If the merger is not completed, the ongoing business of BBI could be adversely affected and BBI will be subject to several risks, including the risks described elsewhere in this “Risk Factors” section.
The merger is subject to a number of conditions which, if not satisfied or waived in a timely manner, would delay the merger or adversely impact the companies’ ability to complete the transactions.
The completion of the merger is subject to certain conditions, including, among others, the (1) approval of the merger agreement by the holders of at least a majority of the outstanding shares of BBI common stock
 
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and a majority of the outstanding shares of BBI preferred stock, each voting as a separate class; (2) the receipt of all required regulatory approvals for the merger, without the imposition of any material on-going conditions or restrictions, and the expiration of all regulatory waiting periods; (3) the absence of any legal restraint (such as an injunction or restraining order) that would prevent the consummation of the merger; (4) the effectiveness of the registration statement of which this proxy statement/prospectus forms a part; (5) each party’s receipt of a tax opinion from its respective outside tax advisors, dated the closing date of the merger, confirming the merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code; (6) the Plan of Bank Merger in the form attached as Exhibit B to the merger agreement attached as Annex A to this proxy statement/prospectus being executed and delivered; (7) the absence of the occurrence of a material adverse effect on BBI or First Bancshares; (8) the receipt of consents, waivers, and / or termination agreements from certain third parties; and (9) other customary closing conditions set forth in the merger agreement. See “The Merger Agreement — Conditions to Completion of the Merger” on page [•].
While it is currently anticipated that the merger will be completed during the third quarter of 2022, there can be no assurance that such conditions will be satisfied in a timely manner or at all, or that an effect, event, development or change will not transpire that could delay or prevent these conditions from being satisfied. Accordingly, there can be no guarantee with respect to the timing of the closing of the merger, whether the merger will be completed at all and when BBI shareholders will receive the merger consideration, if at all.
First Bancshares and BBI may waive one or more of the conditions to the merger without re-soliciting shareholder approval for the merger.
Each of the conditions to the obligations of First Bancshares and BBI to complete the merger may be waived, in whole or in part, to the extent permitted by applicable law, by agreement of First Bancshares and BBI, if the condition is a condition to both parties’ obligation to complete the merger, or by the party for which such condition is a condition of its obligation to complete the merger. The boards of directors of First Bancshares and BBI may evaluate the materiality of any such waiver to determine whether amendment of this proxy statement/prospectus and re-solicitation of proxies are necessary. First Bancshares and BBI, however, generally do not expect any such waiver to be significant enough to require re-solicitation of shareholders. In the event that any such waiver is not determined to be significant enough to require re-solicitation of shareholders, the companies will have the discretion to complete the merger without seeking further shareholder approval.
Regulatory approvals may not be received, may take longer than expected or impose conditions that are not presently anticipated.
Before the transactions contemplated by the merger agreement may be completed, approvals or waivers must be obtained from various regulatory authorities, which include the Federal Reserve Board, the Mississippi Department, and other securities and regulatory authorities. These governmental entities may request additional information or materials regarding the regulatory applications and notices submitted by First Bancshares and BBI, or may impose conditions on the granting of such approvals. Such conditions or changes and the process of obtaining regulatory approvals could have the effect of delaying the completion of the merger or of imposing additional costs or limitations on the combined company following the merger. The regulatory approvals may not be received at all, may not be received in a timely fashion, and may contain conditions on the completion of the merger that are not anticipated or cannot be met. There can be no assurance as to whether these and other regulatory approvals will be received, the timing of those approvals, or whether any conditions will be imposed. See “The Merger — Regulatory Approvals Required for the Merger” on page [•].
The directors and executive officers of BBI have interests in seeing the merger completed that are different from, or in addition to, those of the other BBI shareholders.
The directors and executive officers of BBI have arrangements that provide them with interests in the merger that are different from, or in addition to, those of the shareholders of BBI generally. These interests and arrangements may create potential conflicts of interest and may influence or may have influenced the directors and executive officers of BBI to support or approve the merger and the merger agreement. See “The Merger — Interests of BBI Directors and Executive Officers in the Merger” beginning on page [•].
 
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The opinion of BBI’s financial advisor does not reflect changes in circumstances between the date of such opinion and the completion of the merger.
BBI’s board of directors received an opinion from its financial advisor to the effect that, as of April 21, 2022 and subject to the qualifications, assumptions and limitations set forth therein, the merger consideration was fair, from a financial point of view, to the holders of BBI common stock. Subsequent changes in the operations and prospects of BBI or First Bancshares, general market and economic conditions and other factors that may be beyond the control of BBI or First Bancshares, may significantly alter the value of BBI or First Bancshares or the price of the shares of First Bancshares common stock by the time the merger is completed. The opinion does not address the fairness of the merger consideration from a financial point of view at the time the merger is completed, or as of any other date other than the date of such opinion. The opinion of BBI’s financial advisor is attached as Annex B to this proxy statement/prospectus. For a description of the opinion, see “The Merger — Opinion of BBI’s Financial Advisor” on page [•].
The merger may be completed even if First Bancshares or BBI experiences adverse changes in its business.
In general, either First Bancshares or BBI may refuse to complete the merger if the other party suffers a material adverse effect on its business prior to the closing of the merger. However, certain types of changes or occurrences with respect to First Bancshares or BBI would not prevent the merger from going forward, even if the change or occurrence would have adverse effects on First Bancshares or BBI, including the following:

changes in laws and regulations affecting financial institutions and their holding companies generally, or interpretations thereof by courts or governmental entities, if such changes do not have a disproportionate impact on the affected company;

changes in GAAP or regulatory accounting requirements generally applicable to financial institutions and their holding companies, if such changes do not have a disproportionate impact on the affected company;

changes in global, national or regional political conditions including the outbreak of war or acts of terrorism, or in economic or market conditions affecting the financial services industry generally, if such changes do not have a disproportionate impact on the affected company;

changes or effects from the announcement of the merger agreement and the transactions contemplated thereby, and compliance by the parties with the merger agreement on the business, financial condition or results of operations of the parties;

any failure by BBI of First Bancshares to meet any internal or published industry analyst projections or forecasts or estimates of revenues or earnings for any period (but not including the underlying causes thereof);

changes in the trading price or trading volume of First Bancshares common stock (but not including the underlying causes thereof unless otherwise specifically excluded); however, BBI may terminate the merger agreement if (i) the average closing price of First Bancshares common stock during a specified period prior to closing is less than $26.34 and (ii) First Bancshares common stock underperforms the KBW Regional Banking Index by more than 20%, unless First Bancshares elects to make a compensating adjustment to the exchange ratio; and

the impact of the merger agreement and the transactions contemplated thereby on relationships with customers or employees, including the loss of personnel subsequent to the date of the merger agreement.
Litigation in transactions of this type are sometimes filed against the board of directors of either party that could prevent or delay the completion of the merger or result in the payment of damages following completion of the merger.
In connection with the merger, it is possible that BBI shareholders may file putative class action lawsuits against the boards of directors of First Bancshares and/or BBI. Among other remedies, these shareholders could seek to enjoin the merger. The outcome of any such litigation would be uncertain. If a
 
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dismissal is not granted or a settlement is not reached, such potential lawsuits could prevent or delay completion of the merger and result in substantial costs to First Bancshares and BBI. The defense or settlement of any lawsuit or claim that remains unresolved at the time the merger is consummated may adversely affect the combined company’s business, financial condition, results of operations, cash flows and market price.
Risks Related to the Combined Company Following the Merger
The combined company expects to incur substantial expenses related to the merger.
The combined company expects to incur substantial expenses in connection with completing the merger and integrating the business and operations of BBI and First Bancshares. Although First Bancshares and BBI have assumed that a certain level of transaction and integration expenses would be incurred, there are a number of factors beyond their control that could affect the total amount or the timing of their integration expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. As a result, the transaction and integration expenses associated with the merger could, particularly in the near term, exceed the savings that the combined company expects to achieve from the integration of the businesses following the completion of the merger.
Following the merger, the combined company may be unable to integrate BBI’s business with First Bancshares successfully and realize the anticipated synergies and other benefits of the merger or do so within the anticipated timeframe.
The merger involves the combination of two companies that currently operate as independent companies, as well as the companies’ subsidiaries. Although the combined company is expected to benefit from certain synergies, including cost savings, the combined company may encounter potential difficulties in the integration process, including:

the inability to successfully combine BBI’s business with First Bancshares in a manner that permits the combined company to achieve the cost savings anticipated to result from the merger, which would result in the anticipated benefits of the merger not being realized in the timeframe currently anticipated or at all;

the risk of not realizing all of the anticipated operational efficiencies or other anticipated strategic and financial benefits of the merger within the expected timeframe or at all;

potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the merger; and

performance shortfalls as a result of the diversion of management’s attention caused by completing the merger and integrating the companies’ operations.
For all these reasons, you should be aware that it is possible that the integration process could result in the distraction of the combined company’s management, the disruption of the combined company’s ongoing business or inconsistencies in the combined company’s operations, any of which could adversely affect the ability of the combined company to maintain relationships with customers and employees or to achieve the anticipated benefits of the merger, or could otherwise adversely affect the business and financial results of the combined company.
Following the merger, the combined company may be unable to retain key employees.
The success of the combined company after the merger will depend in part upon its ability to retain key employees. Simultaneous with the execution of the merger agreement, First Bancshares entered into employment agreements with certain key employees of BBI, the effectiveness of which is conditioned upon the completion of the merger. However, key employees may depart either before or after the merger because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the combined company following the merger. Accordingly, no assurance can be given that BBI or First Bancshares or, following the merger, the combined company will be able to retain key employees.
 
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The voting power of BBI shareholders will be diluted by the merger.
The merger will result in BBI shareholders having an ownership stake in the combined company that is smaller than their current stake in BBI. Upon completion of the merger of BBI with First Bancshares, we estimate that BBI shareholders will own approximately 18% of the issued and outstanding shares of common stock of the combined company. Consequently, BBI shareholders, as a general matter, will have less influence over the management and policies of the combined company after the effective time of the merger than they currently exercise over the management and policies of BBI.
Future capital needs could result in dilution of shareholder investment.
First Bancshares’ board of directors may determine from time to time there is a need to obtain additional capital through the issuance of additional shares of its common stock or other securities. These issuances would dilute the ownership interests of its shareholders and may dilute the per share book value of First Bancshares common stock. New investors may also have rights, preferences and privileges senior to First Bancshares’ shareholders which may adversely impact its shareholders.
Risks Related to an Investment in the Combined Company’s Common Stock
The market price of the shares of common stock of the combined company may be affected by factors different from those affecting the price of shares of First Bancshares common stock before the merger.
The results of operations of the combined company, as well as the market price of shares of the common stock of the combined company after the merger, may be affected by factors in addition to those currently affecting First Bancshares’ or BBI’s results of operations and the market prices of shares of First Bancshares common stock. Accordingly, the historical financial results of First Bancshares and BBI and the historical market prices of shares of First Bancshares common stock may not be indicative of these matters for the combined company after the merger. For a discussion of the businesses of First Bancshares and BBI and certain risks to consider in connection with evaluating the proposals to be considered at the BBI special meeting, see the documents incorporated by reference by First Bancshares into this proxy statement/prospectus referred to under “Where You Can Find More Information” beginning on page [•].
The market price of the combined company’s common stock may decline as a result of the merger.
The market price of the combined company’s common stock may decline as a result of the merger if the combined company does not achieve the perceived benefits of the merger or the effect of the merger on the combined company’s financial results is not consistent with the expectations of financial or industry analysts. In addition, upon completion of the merger, First Bancshares and BBI shareholders will own interests in a combined company operating an expanded business with a different mix of assets, risks and liabilities. Current First Bancshares and BBI shareholders may not wish to continue to invest in the combined company, or for other reasons may wish to dispose of some or all of their shares of the combined company.
After the merger is completed, BBI shareholders who receive shares of First Bancshares common stock in the merger will have different rights that may be less favorable than their current rights as BBI shareholders.
After the closing of the merger, BBI shareholders who receive shares of First Bancshares common stock in the merger will have different rights than they currently have as BBI shareholders, which may be less favorable than their current rights as BBI shareholders. For a detailed discussion of the significant differences between the current rights of a shareholder of BBI and the rights of a shareholder of the combined company following the merger, see “Comparison of Rights of First Bancshares shareholders and BBI Shareholders” beginning on page [•].
Risks Related to First Bancshares’ Business
There are certain risks relating to First Bancshares’ business.
You should read and consider risk factors specific to First Bancshares’ business that will also affect the combined company after the merger. These risks are described in the section entitled “Risk Factors” in First
 
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Bancshares’ Annual Report on Form 10-K for the year ended December 31, 2021 and in other documents incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information” on page [•] for the location of information incorporated by reference into this proxy statement/prospectus.
 
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INFORMATION ABOUT THE BBI SPECIAL MEETING
This proxy statement/prospectus is being provided to the holders of BBI common stock and preferred stock as part of a solicitation of proxies by the BBI board of directors for use at the BBI special meeting to be held at the time and place specified below and at any properly convened meeting following an adjournment thereof. This proxy statement/prospectus provides the holders of BBI common stock and preferred stock with information they need to know to be able to vote or instruct their vote to be cast at the BBI special meeting.
General
This section contains information about the special meeting that BBI has called to allow BBI shareholders to vote on the approval of the merger agreement and the adjournment proposal. The BBI board of directors is mailing this proxy statement/prospectus to you, as a BBI shareholder, on or about [        ], 2022. Together with this proxy statement/prospectus, the BBI board of directors is also sending you a notice of the special meeting of BBI shareholders and a form of proxy that the BBI board of directors is soliciting for use at the special meeting and at any adjournments or postponements of the special meeting.
Date, Time and Place
The special meeting is scheduled to be held on [        ], 2022 at 8:00 a.m., local time, at 1211 N. Westshore Blvd., Tampa, Florida 33607.
Matters to be Considered at the Meeting
At the special meeting, BBI shareholders will be asked to consider and vote on:

a proposal to approve the merger agreement, which we refer to as the merger proposal;

a proposal of the BBI board of directors to adjourn or postpone the special meeting, if necessary or appropriate, including to permit further solicitation of proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement, which we refer to as the adjournment proposal; and

any other matters as may properly be brought before the special meeting or any adjournment or postponement of the special meeting.
At this time, the BBI board of directors is unaware of any other matters that may be presented for action at the special meeting. If any other matters are properly presented, however, and you have completed, signed and submitted your proxy, the person(s) named as proxy will have the authority to vote your shares in accordance with his or her judgment with respect to such matters. A copy of the merger agreement is included in this proxy statement/prospectus as Appendix A, and we encourage you to read it carefully in its entirety.
BBI shareholders should carefully read this document in its entirety, including the annexes and the documents incorporated by reference, for more detailed information concerning the merger agreement and the merger. For a detailed discussion of the merger, including the terms and conditions of the merger agreement, see “The Merger Agreement,” beginning on page [•]. In addition, BBI shareholders are directed to the merger agreement, a copy of which is attached as Annex A to this document and incorporated in this document by reference.
Recommendation of the BBI Board of Directors
The BBI board of directors recommends that BBI shareholders vote “FOR” the merger proposal and “FOR” the adjournment proposal. See “The Merger — BBI’s Reasons for the Merger and Recommendations of the BBI Board of Directors.”
Record Date and Quorum
[        ], 2022 has been fixed as the record date for the determination of BBI shareholders entitled to notice of, and to vote at, the special meeting and any adjournment or postponement thereof. At the close
 
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of business on the record date, there were (i) [         ] shares of BBI common stock outstanding and entitled to vote at the special meeting, held by approximately [       ] holders of record, and (ii) [      ] shares of BBI preferred stock outstanding and entitled to vote at the special meeting, held by approximately [      ] holders of record.
A quorum is necessary to transact business at the special meeting. The presence, in person or by proxy, of the holders of a majority of the outstanding shares of BBI common stock and the holders of the majority of the outstanding shares of BBI preferred stock entitled to vote at the meeting is necessary to constitute a quorum. Shares of BBI stock represented at the special meeting but not voted, including shares that a shareholder abstains from voting, will be counted for purposes of establishing a quorum. Once a share of BBI stock is represented at the special meeting, it will be counted for the purpose of determining a quorum not only at the special meeting but also at any adjournment or postponement of the special meeting. In the event that a quorum is not present at the special meeting, it is expected that the special meeting will be adjourned or postponed.
Required Vote
The affirmative vote of a majority of the outstanding shares of BBI common stock and a majority of the outstanding shares of BBI preferred stock, each voting as a separate class, must vote in favor of the proposal to approve the merger agreement. If you vote to “ABSTAIN” with respect to the merger proposal or if you fail to vote on the merger proposal, this will have the same effect as voting “AGAINST” the merger proposal.
The adjournment proposal will be approved if the votes of BBI common stock cast in favor of the adjournment proposal exceed the votes cast against the adjournment proposal. If you vote to “ABSTAIN” with respect to the adjournment proposal or if you fail to vote on the adjournment proposal, this will have no effect on the outcome of the vote on the adjournment proposal.
Each share of BBI stock you own as of the record date for the special meeting entitles you to one vote at the special meeting on all matters properly presented at the meeting.
How to Vote — Shareholders of Record
Voting in Person.   If you are a shareholder of record, you can vote in person by submitting a ballot at the special meeting. Nevertheless, we recommend that you vote by proxy as promptly as possible, even if you plan to attend the special meeting. This will ensure that your vote is received. If you attend the special meeting, you may vote by ballot, thereby canceling any proxy previously submitted.
Voting by Proxy.   Your proxy card includes instructions on how to vote by mailing in the proxy card. If you choose to vote by proxy, please mark each proxy card you receive, sign and date it, and promptly return it in the envelope enclosed with the proxy card. If you sign and return your proxy without instruction on how to vote your shares, your shares will be voted “FOR” the merger proposal and “FOR” the adjournment proposal. At this time, the BBI board of directors is unaware of any other matters that may be presented for action at the special meeting. If any other matters are properly presented, however, and you have signed and returned your proxy card, the person(s) named as proxy will have the authority to vote your shares in accordance with his or her judgment with respect to such matters. Please do not send in your stock certificates with your proxy card. If the merger is completed, then you will receive a separate letter of transmittal and instructions on how to surrender your BBI stock certificates for the merger consideration.
YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AND PROMPTLY RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE. SHAREHOLDERS WHO ATTEND THE SPECIAL MEETING MAY REVOKE THEIR PROXIES BY VOTING IN PERSON.
Revocation of Proxies
You can revoke your proxy at any time before your shares are voted. If you are a shareholder of record, then you can revoke your proxy by:
 
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submitting another valid proxy card bearing a later date;

attending the special meeting and voting your shares in person; or

delivering prior to the special meeting a written notice of revocation to BBI’s President and Chief Executive Officer at the following address: Beach Bancorp, Inc., 1211 N Westshore Blvd., Suite 200, Tampa, Florida 33607.
If you choose to send a completed proxy card bearing a later date or a notice of revocation, the new proxy card or notice of revocation must be received before the beginning of the special meeting. Attendance at the special meeting will not, in and of itself, constitute revocation of a proxy. If you hold your shares in street name with a bank, broker or other nominee, you must follow the directions you receive from your bank, broker or other nominee to change your vote. Your last vote will be the vote that is counted.
Shares Subject to Support Agreement; Shares Held by Directors and Executive Officers
As of the record date, directors and executive officers of BBI and their affiliates owned and were entitled to vote (i) [        ] shares of BBI common stock, representing approximately [   ]% of the outstanding shares of BBI common stock entitled to vote on that date, and (ii) [    ] shares of BBI preferred stock, representing approximately [   ] % of the outstanding shares of BBI entitled to vote on that date.
A total of 7,788,552 shares of BBI common stock, representing approximately [   ]% of the outstanding shares of BBI common stock entitled to vote at the special meeting, and a total of 5,276,021 shares of BBI preferred stock, representing approximately [   ]% of the outstanding shares of BBI preferred stock entitled to vote at the special meeting are subject to a voting agreement between First Bancshares and certain of BBI and Beach Bank’s directors and their affiliates who held shares of BBI stock as of the date of the merger agreement. Pursuant to the voting agreement, these directors of BBI and Beach Bank and their affiliates who held shares of BBI stock as of the date of the merger agreement, have agreed to, at any meeting of BBI shareholders, however called, or any adjournment or postponement thereof (and subject to certain exceptions):

vote (or cause to be voted) all shares of BBI’s stock beneficially owned by such director or holder, as applicable, and which such director or holder has the right to vote in favor of the approval of the merger agreement, the merger and each of the transactions contemplated by the merger agreement;

not vote or grant any proxies to any third party, except where such proxies are directed to vote in favor of the merger agreement, the merger and the transactions contemplated by the merger agreement; and

vote (or cause to be voted) their shares against any competing transaction.
Pursuant to the voting agreement, without the prior written consent of First Bancshares, each party to the voting agreement has further agreed not to sell or otherwise transfer any shares of BBI stock. The foregoing summary of the voting entered into by BBI and Beach Bank’s directors and their affiliates who held shares of BBI stock as of the date of the merger agreement, does not purport to be complete, and is qualified in its entirety by reference to the form of voting agreement attached as Exhibit A to the merger agreement, which is attached as Appendix A to this document.
For more information about the beneficial ownership of BBI stock by each director and executive officer, directors and executive officers as and their affiliates a group, and holders of 5% or more of the outstanding shares of BBI common stock and preferred stock, see “Beneficial Ownership of BBI Stock by Management and Principal Shareholders of BBI.”
Solicitation of Proxies
The proxy for the special meeting is being solicited on behalf of the BBI board of directors. BBI will bear the entire cost of soliciting proxies from you. BBI will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to the beneficial owners of BBI stock. Proxies will be solicited principally by mail, but may also be solicited by the directors, officers, and other employees of BBI in person or by telephone, facsimile or other means of
 
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electronic communication. Directors, officers and employees will receive no compensation for these activities in addition to their regular compensation, but may be reimbursed for out-of-pocket expenses in connection with such solicitation.
Attending the Meeting
All holders of BBI stock, including shareholders of record and shareholders who hold their shares in street name through banks, brokers or other nominees, are cordially invited to attend the special meeting. Shareholders of record can vote in person at the special meeting. If you are not a shareholder of record and would like to vote in person at the special meeting, you must produce a legal proxy executed in your favor by the record holder of your shares. In addition, you must bring a form of personal photo identification with you in order to be admitted at the special meeting. We reserve the right to refuse admittance to anyone without proper proof of share ownership or without proper photo identification. The use of cameras, sound recording equipment, communications devices or any similar equipment during the special meeting is prohibited without BBI’s express written consent.
Questions and Additional Information
If you have more questions about the merger or how to submit your proxy or vote, or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card or voting instructions, please contact BBI at:
Beach Bancorp, Inc.
1211 N. Westshore Blvd., Suite 200
Tampa, Florida 33607
Telephone: (850) 244-6740
Attn: Charles N. “Chip” Reeves, President and Chief Executive Officer
 
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THE MERGER
The following discussion contains certain information about the merger. The discussion is subject, and qualified in its entirety by reference, to the merger agreement attached as Annex A to this proxy statement/prospectus. We urge you to read carefully this entire proxy statement/prospectus, including the merger agreement attached as Annex A, for a more complete understanding of the merger.
General
Each of First Bancshares’ and BBI’s respective boards of directors has unanimously approved the merger agreement and the transactions contemplated by the merger agreement. The merger agreement provides for the acquisition of BBI by First Bancshares pursuant to the merger of BBI with and into First Bancshares, with First Bancshares as the surviving company, which we refer to as the merger. Immediately after the merger, Beach Bank, a wholly owned bank subsidiary of BBI, will be merged with and into The First, a wholly owned bank subsidiary of First Bancshares, with The First as the surviving bank, which we refer to as the bank merger.
Purchase Price and Purchase Price Adjustments
At the effective time of the merger, each share of BBI stock issued and outstanding immediately prior to the effective time of the merger will be converted into the right to receive 0.1711, or the exchange ratio, shares of First Bancshares common stock.
Before deciding how to vote, you should obtain more recent prices of First Bancshares common stock, which trades on the NASDAQ Global Market under the symbol “FBMS”.
The exchange ratio was arrived at through arm’s-length negotiations between BBI and First Bancshares. The merger agreement provides that if First Bancshares effects a stock dividend, reclassification, recapitalization, split, or combination of the shares of First Bancshares common stock, then an appropriate adjustment to the exchange ratio will be made.
BBI may terminate the merger agreement if (i) the average closing price of First Bancshares common stock over the 10 trading days preceding the date that is five days prior to the closing date is less than $26.34, and (ii) the decline in the price of First Bancshares common stock (as measured by the average closing price divided by $32.92) is more than 20% greater than the decline in the KBW Regional Banking Index (KRX) (as measured by dividing the average closing price of the KBW Regional Banking Index over the 10 trading days preceding the date that is five days prior to the closing date by $113.05); provided, however, that First Bancshares has the option, but not the obligation, to adjust the exchange ratio to prevent the termination of merger agreement.
BBI shareholders are being asked to approve the merger agreement. See “The Merger Agreement” for additional and more detailed information regarding the legal documents that govern the merger, including information about the conditions to the completion of the merger and the provisions for terminating or amending the merger agreement.
Background of the Merger
As part of ongoing consideration and evaluation of long-term prospects and strategies of Beach Bancorp, Inc. (“BBI”) and its subsidiary, Beach Bank, BBI’s Board of Directors and Executive Management have regularly reviewed and assessed business strategies and objectives, opportunities and challenges, and consideration of various strategic options in pursuit of enhancing value for BBI shareholders. At least once annually since the recapitalization in 2018, the BBI board engaged in strategic discussions focused on, among other things, alternatives, organic growth, acquisition opportunities, organizational requirements, scale, and financial and operating structure necessary to deliver competitive risk adjusted returns on shareholders’ capital. The Board and Management also regularly assessed the business environment facing financial institutions generally, and Beach Bank specifically, the direction and influences of growth, margins, cost structure, and regulatory dynamics.
 
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In this regard, and to assist in evaluating BBI’s strategic considerations and analysis, the BBI Board of Directors and management, at least annually since 2018, met with various investment banking firms, including Piper Sandler. The meetings would typically include formal and informal presentations from each firm regarding the overall banking industry and markets, nationally and in Florida; merger and acquisition activity trends and pricing; comparable company analyses; valuation perspectives on BBI; and analyses of potential acquisition targets and potential acquirers, along with potential transaction pricing.
Executive Management and Carl J. Chaney (Chairman of BBI) also responded from time to time from 2018 to 2021, to unsolicited calls from, and introductions and meetings with, prospective buyers for BBI, including First Bancshares. Such meetings, during this time, were established as opportunities to develop relationships and with the intent of developing a more in-depth understanding of each prospective buyer and its respective potential fit and acquisition capacity for BBI. BBI did not receive any acquisition proposals during this time.
On October 26 and 27, 2021, the Board of Directors of BBI held a special strategic planning review session, which included Charles N. “Chip” Reeves (Chief Executive Officer of BBI) and Richard A. Mocsari (Chief Financial Officer of BBI), along with two investment banking firms (one of which was Piper Sandler). The review included analysis and perspective on the banking landscape overview, perspectives on Beach Bank, current merger and acquisition strategic alternatives, and review of alternate standalone banking strategies. BBI’s Executive Management and Board of Directors observed that BBI had made significant advances in repositioning BBI from the recapitalization in July of 2018, achieving strong organic growth, but not achieving accelerated growth via acquisition. It was also observed that the acquisition opportunities for BBI would remain very limited as a private company of the BBI’s size and profile for the foreseeable future. Importantly, analysis related to BBI’s significant deferred tax asset related to historical net operating losses was performed by outside tax experts and reviewed for a determination of the impact in a sale or merger scenario. Based upon the total analysis and review, the BBI Board of Directors observed that a higher risk adjusted return profile may be obtained by merging with a larger bank as opposed to the standalone strategy over the next three to five years. The BBI Board of Directors determined it would be prudent to utilize an investment banker to, confidentially, further analyze and explore alternatives among potential buyers to provide valuation discovery for the Bank.
The BBI Board of Directors also determined at this meeting that it would be prudent to explore the alternatives in a manner that would least jeopardize the BBI’s prospects should the exploration not prove out assumptions regarding the return opportunities, and where the BBI continued to pursue a stand-alone strategy. The BBI Board of Directors agreed to approach this exploration with the assistance of investment banking firm Piper Sandler, as well as utilize the relationships that members of BBI’s Board of Directors and Executive Management had with prospective target partners. The BBI Board of Directors decided that until further determination as to strategic alternative selection, an investment banking firm would not be engaged. Further, the determination was made that initially, a confidential, “no-names” marketing process among likely bank and credit union acquirers should be utilized to confirm valuation range expectations. This approach was intended to verify valuation among a reasonable sample size of likely partners, while mitigating the potential risks (negative customer and employee impact) of presenting the bank “for-sale,” should the process not validate the expectations.
During the period of November 1 through December 7, 2021, select members of BBI’s senior management team advanced the prospective sale process preparations, including finalization of a targeted buyers’ list(with the BBI Board of Director’s review), and the completion of customary marketing materials (including a form of confidential information memorandum and proposed form of nondisclosure agreement (“NDA”)). This process also included preparation of key, customary due diligence materials on BBI as commonly requested by prospective buyers. The targeted prospective buyer list included public banking companies, regional banks, Florida-based banks, non-Florida-based banks; as well as credit unions that were Florida based and non-Florida based; and it included prospective buyers with total assets ranging from approximately $1 billion to $25 billion.
On November 4, 2021, while attending a banking conference, Mr. Reeves and Mr. M. Ray “Hoppy” Cole, President and Chief Executive Officer of First Bancshares, informally met and discussed each Bank’s organizational culture and history, business lines and strategy, and respective views on the industry outlook
 
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and future plans. Mr. Reeves noted from the meeting that there were significant similarities, with considerable geographic and strategic alignment between BBI and First Bancshares.
Beginning on November 22, 2021, Piper Sandler began its outreach to the targeted prospective buyer list, which included a high priority group of 13 prospective credit union buyers in addition to a number of prospective bank partners. Piper Sandler further expanded the list of targeted prospective credit union buyers by 3, to a total of 16, in subsequent months. The communication was intended to verify the list of interested parties, sign NDAs, advance initial information, and advance discussions. During this time, Piper Sandler and management provided updates to the BBI Board of Directors as to process status and initial feedback regarding interest in advancing strategic dialogue.
Beginning in early January 2022, based on historical relationships and conversations, Messrs. Chaney and Reeves contacted four active and well-known buyers, with demonstrated capacity to meet valuation expectations, in the Southeast and Florida, to engage informal conversations and meetings. The select bank partners were also identified by historical relationship, historical interest, market overlap, strength of public currency, quality of franchise and forward strategic fit to participate in the meetings.
On January 4 and 5, 2022, Messrs. Chaney and Reeves, met with Mr. Cole, in Tampa, Florida. The discussions included a market tour, discussion of organizational cultures, philosophies, and future strategic plans. The discussions also included the relevance of BBI to First Bancshares and its strategic intentions and growth. The productive nature of the meeting established joint intent to pursue next steps in the exploration of a discussion for a potential partnership. First Bancshares signed an NDA and received selected due diligence information.
On January 5, 2021, Messrs. Chaney and Reeves met with the Chief Executive Officer and Chief Financial Officer of a Southeastern based Bank (“Bank A”) with over $20 billion in assets in Tampa, Florida. The discussions included a market tour, discussion of organizational cultures, philosophies, and future strategic plans. The discussions also included the relevance of BBI to Bank A and its strategic intentions and growth. Bank A signed a NDA and received selected due diligence information.
On January 26, 2022, a special BBI Board meeting was held to review the targeted strategic partner process to date. Piper Sandler provided an update as to the targeted potential credit union partners and noted that 13 potential partners were provided summary marketing material on BBI; seven of the 13 signed a NDA and received a short form Confidential Information Memorandum and select diligence documents. None of the credit unions advanced dialogue for reasons that included: (1) timing — focused on other strategic initiatives at this time; (2) geography — branch footprint did not fit within specific focus area; and (3) financial considerations — concerns with BBI profitability levels, pricing expectations, the resulting impact to excess capital, and buyer capital constraints. The Piper Sandler update as to targeted potential bank partners noted that four potential partners were provided summary marketing material on BBI. Two of the four parties signed an NDA and received a short form Confidential Information Memorandum and select diligence documents. One of the two that signed an NDA declined to advance in the process as they intended to focus on alternative priorities in which they were more active. First Bancshares indicated a prioritization of BBI and expressed an interest in submitting a non-binding letter of intent.
During this meeting Piper Sandler also provided an updated analysis of targeted buyer capacity to pay and returns analysis to BBI’s Board of Directors and Executive Management. The analysis, given assumptions, continued to demonstrate, and the BBI Board of Directors concurred, that the pursuit of a strategic partner, in lieu of a stand-alone strategy, would provide the best strategic positioning for BBI and its clients, as well as best prospects for risk adjusted returns. It also demonstrated First Bancshares as a leader in the capacity to pay analysis.
On February 8, 2022, Messrs. Chaney, Reeves, and Mocsari, met with Mr. Cole and Dee Dee Lowery (Chief Financial Officer of First Bancshares) in Tampa, Florida. The meeting focused on detail regarding strategies, and financial and other due diligence for each organization. A second meeting occurred later this day among this group, and included two members of the BBI Board of Directors, Jim Cherry and Jon Levy. This meeting focused on potential strategic and cultural fit between the two organizations, opportunities, benefits and timing of a possible combination of the respective banks, and initial dialogue regarding terms of a possible Indication of Interest by First Bancshares for purchase of BBI.
 
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On February 18, 2022, BBI’s Board received a non-binding, Indication of Interest (“IOI”) from First Bancshares. Over the next several days Piper Sandler provided and updated a bid overview analysis to the Board of Directors and Executive Management of BBI, including key terms of the IOI, various metrics, historical pricing range analysis based upon the exchange ratio of the IOI, preliminary pro-forma financial impacts, contribution analysis, peer analysis, Merger and Acquisition precedent transactions analysis and comparisons (national and regional), and First Bancshares price performance and merger reaction analysis, as well as third party equity analyst recommendations on First Bancshares stock.
On February 18, 2022, upon receipt of the IOI, the BBI Board of Directors also determined the exploratory process of assessing a potential merger partner was valid and imminent, and as such BBI should formally engage Piper Sandler as BBI’s independent investment banking advisor. Prior to this date, the engagement letter and related structure and fees was reviewed by BBI’s Executive Management, Board of Directors and outside legal counsel. The engagement included customary advisory services for a bank sale transaction, as well as providing and rendering a fairness opinion, from a financial point of view, for the proposed business combination, to BBI common shareholders. Mr. Reeves signed the engagement for services as previously instructed by the BBI Board of Directors.
On February 22, 2022, the BBI Board of Directors and Messrs. Reeves and Mocsari met with Piper Sandler to review and discuss the February 18, 2022 IOI received from First Bancshares, as well as the Piper Sandler analysis regarding the IOI. Mr. Chaney opened the discussion with a review of the Board of Director’s responsibilities and role for the discussion. The Piper Sandler team and Mr. Reeves reviewed the offer and analysis with the BBI Board of Directors. Key terms were discussed and explored to confirm intended structure and implications, and to determine which terms of the IOI might be negotiated further. The BBI Board of Directors also discussed any potential execution risks of the proposed transaction, as well as any potential employee, executive and Board roles. Additionally, the IOI was structured as an all-stock transaction. The BBI Board of Directors discussed First Bancshares’ stock valuation, its prospects, risks, and the related analysis provided by Piper Sandler. After review of the transaction details and analysis, the BBI Board of Directors also discussed the strategic and cultural impacts and fit, merger and acquisition activity, integration issues, and client, employee, and community impacts of the prospective merger partner. Further, the BBI Board of Directors discussed the specific framework for a counteroffer as it believed certain terms, including the purchase price exchange rate of the IOI, might be improved. Subsequently, the BBI Board of Directors agreed the IOI with First Bancshares was an appropriate strategic alternative to pursue, and unanimously voted to advance a communication strategy and counteroffer to the IOI through Piper Sandler to First Bancshares’ investment banking representative, and for Messrs. Chaney and Reeves to continue discussions under the IOI if the counteroffer terms were met.
On February 23, 2022, Messrs. Chaney, Reeves, Mocsari, and Andrew Peterson (Chief Credit Officer of BBI) met via Zoom and in-person, in Tampa, with the Chief Executive Officer, Chief Financial Officer and advisory attorney of a Mid-Atlantic based credit union (“CU-A”) with approximately $1.3 billion in assets. The meeting focused on detail regarding strategies and included financial and other due diligence for each organization. Additionally, the discussion included the potential strategic and cultural fit between the two organizations, opportunities, benefits, and timing of a possible combination of BBI with CU-A, and initial dialogue regarding terms of a possible Indication of Interest by CU-A for purchase of BBI. Dialogue also included the CU’s approach, and its board of directors’ tenor toward acquisitions, its decision process, and potential regulatory challenges of such a purchase by CU-A of BBI. It was learned by BBI during the dialogue with CU-A that its board of directors’ approval of such an acquisition was not at a consensus level yet, and the regulatory approval process was unproven and not certain. Mr. Chaney and the BBI Executive Management team in attendance concluded from this dialogue that there would be material hurdles to be met for such a transaction, and this would present significant execution risk of a BBI sale to CU-A. CU-A did not issue an Indication of Interest to acquire BBI.
On February 23, 2022, BBI delivered a response to the February 18, 2022, IOI. The BBI response indicated an affirmative interest in moving forward with First Bancshares under the exclusive, non-binding, IOI, subject to certain adjustments and clarifications related to the valuation exchange ratio, board and management roles, as well as severance for potentially displaced BBI employees.
On February 25, 2022, BBI’s Board of Directors received an updated IOI from First Bancshares. First Bancshares specifically responded to and increased the valuation exchange ratio, and further clarified initial
 
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intentions regarding board and management roles as well as severance payments. Messrs. Chaney and Reeves, along with Piper Sandler, reviewed the counteroffer response from First Bancshares and determined the requested counteroffer terms had been met, with exception of a request that First Bancshares consider adding one BBI director to the First Bancshares board.
On February 28, 2022, BBI’s Board received an updated IOI from First Bancshares. First Bancshares updated the February 25, 2022, IOI, and addressed the director issue by specifying that First Bancshares would consider adding a member of the BBI Board of Directors to the First Bancshares Board of Directors at First Bancshares’ sole discretion. Pursuant to the vote and request of BBI’s Board of Directors and counteroffer, the terms had been acceptably modified, and Mr. Reeves signed the IOI from First Bancshares.
During the period from March 3, 2021 through April 26, 2022, First Bancshares conducted due diligence across all aspects of BBI. Due diligence information was provided across multiple venues, including, but not limited to, a virtual data room, conference calls, in person meetings, in person review of physical assets, and direct loan file reviews. BBI and First Bancshares utilized their legal counsels, as well as their investment banking advisory firms, to assist in the diligence review process.
During this same period First Bancshares afforded BBI certain reverse due diligence access. The due diligence was provided across customary venues including the virtual data room and conference calls. On April 14, 2022, a reverse due diligence conference call was held and included First Bancshares’ and BBI’s senior management teams, legal counsels and investment banking advisors, with responses and resulting diligence deemed satisfactory by BBI and its team, advisors and counsel.
During the period from March 17, 2022, through March 26, 2022, legal counsel for BBI and legal counsel for First Bancshares, along with management and investment banking advisors of both companies, prepared, exchanged drafts and negotiated the terms of the merger agreement and the related ancillary documents and agreements (including disclosure schedules, the claims letter, form of voting agreement and form of director non-compete and non-disclosure agreement).
On April 14, 2022, a Special Meeting of the Board of Directors was held by BBI, including BBI Executive Management and Piper Sandler. The BBI Board of Directors reviewed a draft of the Merger Agreement, with summary and key matters presented by BBI’s legal counsel. BBI’s Executive Management provided a summary of the reverse due diligence performed on First Bancshares. Piper Sandler provided an update as to the valuation metrics, current market conditions and First Bancshares stock price. Piper Sandler also reviewed certain key analytics and the illustrative contribution analysis based upon a preliminary first quarter update. Additionally, Piper Sandler provided specific analysis regarding the current statement of the markets and interest rate environment and the resulting impact, generally, and specifically, on the bond portfolio of First Bancshares. This later point being of particular focus in light of recent market moves and implications to bond values, the resulting reduction of tangible book value, and the reduction of stock prices and valuations of most financial institutions.
During this meeting, legal counsel’s review of the draft merger agreement included major provisions regarding purchase price, representations and warranties and disclosure schedules, interim operating covenants, registration statement and proxy statement process, fiduciary out, employee benefits, indemnification, conditions to closing and termination provisions and fees, as well as the related Director agreements. Certain business and legal issues that remained outstanding and not yet drafted in fully acceptable form were reviewed in detail. Counsel and the BBI Board of Directors discussed the range of possible solutions and discussed acceptable resolution positions. The BBI Board of Directors provided counsel and Executive Management with its guidance and consensus as to acceptable solutions to the merger agreement matters outstanding and directed them to pursue final negotiation of the Merger Agreement documents.
BBI’s Executive Management’s review of reverse due diligence was presented and concluded there were no extraordinary concerns or unknown matters uncovered during the diligence of First Bancshares. The review included corporate strategy, earnings, asset quality, deposit franchise, sensitivity and interest rate risk, legal and regulatory matters, and capital adequacy. During this review Piper Sandler assisted with review and analysis of the First Bancshares bond portfolio, and its recent unrealized loss. The review provided detail and comparison to peer banks and perspective as to the portfolio’s unrealized loss in context of total liquidity, related strategies and balance sheet positions that mitigate the impact of recent yield curve changes.
 
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It was concluded that First Bancshares’ unrealized loss was on par with peers and mitigated through strength of earnings, balance sheet liquidity, and of no material impact to regulatory capital levels.
Piper Sandler provided additional market context and analysis regarding the current valuation and stock price metrics. The analysis demonstrated recent negative stock price movements have been on a macro and segment basis for bank stocks, and in the case of First Bancshares, not company specific. It was also demonstrated that recent valuation changes were relative, and the BBI Board of Directors concluded, based on the analysis review and discussion, that the decision for BBI to continue to pursue a sale to First Bancshares remains its best strategic alternative and was in the best interest of BBI and its shareholders.
On April 21, 2022, a Joint Meeting of the Boards of Directors of BBI and Beach Bank was held. BBI’s Executive Management team, Piper Sandler, and BBI’s legal counsel were in attendance. An update to the transaction discussions was provided by Messrs. Chaney and Reeves. BBI’s legal counsel provided a review of director fiduciary duties, the final Merger Agreement and director agreements, as well as the form of resolutions to be considered for approval by the BBI and Beach Bank directors. Piper Sandler presented its review of its fairness opinion analysis and fairness opinion. Executive Management provided a summary review of the reverse due diligence. The BBI and Beach Bank Boards of Directors voted unanimously to approve the resolutions approving the Merger Agreement and Plan of Merger Agreement (including the annexes, schedules and exhibits thereto), as well as the resolutions relating to BBI’s stock options. The forms voting agreements, claims letter agreement, director non-compete and non-disclosure agreement were unanimously approved.
On April 26, 2022, BBI delivered the fully signed Merger Agreement documents and related agreements (including the annexes, schedules and exhibits thereto), as well as the signed voting agreements, claims letter agreements, director non-compete and non-disclosure agreements, to First Bancshares counsel, and copies of First Bancshares’s signature pages to the various agreements were delivered to BBI’s counsel. After the close of markets, the transaction was publicly announced by First Bancshares, and related communications were initiated.
First Bancshares’ Reasons for the Merger
In reaching its decision to approve and adopt the merger agreement, the merger and the other transactions contemplated by the merger agreement, including the issuance of First Bancshares common stock as the merger consideration, the First Bancshares board of directors considered a number of factors, including the following material factors:

each of First Bancshares’ and BBI’s business, operations, financial condition, asset quality, earnings and prospects;

the strategic fit of the businesses of the two companies, including their complementary markets, business lines and loan and deposit profiles;

the opportunity to strategically expand in the Florida panhandle and enter the Tampa market;

the anticipated pro forma impact of the transaction on the combined company, including the expected impact on financial metrics including earnings and tangible book value and regulatory capital levels, as well as the potential efficiencies of scale resulting from the increased size of First Bancshares following the merger;

its understanding of the current and prospective environment in which First Bancshares and BBI operate, including national, state and local economic conditions, the competitive environment for financial institutions generally, and the likely effect of these factors on First Bancshares both with and without the proposed transaction;

its review and discussions with First Bancshares’ management concerning the due diligence investigation of BBI, including its review of BBI’s financial condition, results of operation, asset quality, market areas, growth potential (projected potential accretion to earnings per share and the projected payback period of the estimated decrease in tangible book value) and quality of senior management;
 
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the perceived compatibility of the corporate cultures of the two companies, which management believes should facilitate integration and implementation of the transaction;

the structure of the transaction as a combination in which the combined company would operate under the First Bancshares BBI and First Bancshares’ board of directors and management would have substantial participation in the combined company;

the regulatory and other approvals required in connection with the merger and the expectation that such regulatory approvals will be received in a timely manner and without the imposition of unacceptable conditions; and

the financial and other terms of the merger agreement, including the merger consideration, expected tax treatment, the deal protection and termination fee provisions, and restrictions on the conduct of BBI’s business between the date of the merger agreement and the date of completion of the merger.
First Bancshares’ board of directors also considered potential risks relating to the merger including the following:

First Bancshares management’s attention and First Bancshares resources may be diverted from the operation of First Bancshares’ business and towards the completion of the merger;

First Bancshares may not realize all of the anticipated benefits of the merger, including cost savings, maintenance of existing customer and employee relationships, and minimal disruption in the integration of BBI’s operations with First Bancshares;

the nature and amount of payments and other benefits to be received by BBI management in connection with the merger pursuant to existing BBI plans and compensation arrangements and the merger agreement;

the substantial costs that First Bancshares will incur in connection with the merger even if it is not consummated;

approvals from regulatory authorities could impose conditions that could have the effect of delaying completion of the merger or imposing additional costs; and

the possibility of litigation in connection with the merger.
The foregoing discussion of the factors considered by the First Bancshares board of directors is not intended to be exhaustive, but, rather, includes the material factors considered by the First Bancshares board of directors. In reaching its decision to approve and adopt the merger agreement, the merger and the other transactions contemplated by the merger agreement, including the issuance of First Bancshares common stock as the merger consideration, the First Bancshares board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The First Bancshares board of directors considered all these factors as a whole and overall considered the factors to be favorable to, and to support, its determination.
The foregoing discussion of the information and factors considered by the First Bancshares board of directors is forward-looking in nature. This information should be read in light of the factors described under the section entitled “Cautionary Statement Concerning Forward-Looking Statements.”
BBI’s Reasons for the Merger
After careful consideration, BBI’s board of directors, at a meeting held on April 21, 2022, determined that the merger agreement is advisable, fair to and in the best interests of BBI and its shareholders. Accordingly, BBI’s board of directors adopted and approved the merger agreement and the merger and the other transactions contemplated by the merger agreement and recommends that BBI shareholders vote “FOR” the approval of the merger agreement. In reaching its decision to adopt and approve the merger agreement and the merger and the other transactions contemplated by the merger agreement, and to recommend that its shareholders approve the merger agreement, the BBI board of directors evaluated the merger and the merger agreement in consultation with BBI’s management, as well as its financial and legal advisors, and considered a number of factors, including the following material factors:
 
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each of BBI’s, First Bancshares’s and the combined company’s business, operations, financial condition, asset quality, earnings and prospects. In reviewing these factors, the BBI board of directors considered its view that First Bancshares’s business and operations complement those of BBI and that the merger would result in a combined company with diversified revenue sources, a well-balanced loan portfolio and an attractive funding base, as evidenced by a significant portion of core deposit funding;

its understanding of the current and prospective environment in which BBI and First Bancshares operate, including national and local economic conditions, the interest rate environment, increasing operating costs resulting from regulatory initiatives and compliance mandates, the competitive environment for financial institutions generally, and the likely effect of these factors on BBI both with and without the proposed transaction;

the reduction in the number of financial institutions with an interest in acquiring Florida banks as a result of the continued consolidation in the banking industry and the acquisition by other financial institutions of several of the banks that were historically active in acquiring Florida banks;

the exchange ratio is fixed so that if the market price of First Bancshares common stock is higher at the time of the closing of the merger, the economic value of the merger consideration to be received by BBI shareholders in exchange for their shares of BBI stock will also be higher;

the results that BBI could expect to achieve operating independently, and the likely risks and benefits to BBI shareholders of that course of action, as compared to the value of the merger consideration to be received from First Bancshares;

its view that the size of the institution and related economies of scale were becoming increasingly important to continued success in the current financial services environment, including the increased expenses of regulatory compliance, and that a merger with a larger bank holding company could provide those economies of scale, increase efficiencies of operations and enhance customer products and services;

its review and discussions with BBI’s management regarding strategic alternatives available to BBI for enhancing value over the long term and the potential risks, rewards and uncertainties associated with such alternatives and the benefits of an acquisition by First Bancshares compared to such other alternatives;

the complementary nature of the cultures of the two companies, which management believes should facilitate integration and implementation of the transaction;

management’s expectation that the combined company will have a strong capital position upon completion of the transaction;

its belief that the transaction is likely to provide substantial value to BBI’s shareholders;

the financial analyses of Piper Sandler, BBI’s financial advisor, and the opinion delivered by Piper Sandler to BBI’s board of directors on April 21, 2022, to the effect that, as of the date of such opinion, and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Piper Sandler as set forth in its opinion, the merger consideration was fair to the holders of BBI common stock from a financial point of view, as more fully described in the section entitled “The Merger — Opinion of BBI’s Financial Advisor”;

the financial and other terms of the merger agreement, the expected tax treatment and deal protection provisions, including the ability of BBI’s board of directors, under certain circumstances, to withdraw or materially adversely modify its recommendation to BBI shareholders that they approve the merger agreement (subject to payment of a termination fee), each of which it reviewed with its outside financial and legal advisors;

the fact that the merger consideration will consist of shares of First Bancshares common stock, which would allow BBI shareholders to participate in a significant portion of the future performance of the combined BBI and First Bancshares business and synergies resulting from the merger, and the value to BBI shareholders represented by that consideration;
 
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that the proforma ownership by BBI shareholders in First Bancshares following the closing of the merger will be in an approximate range of 18% of the outstanding First Bancshares shares;

that BBI’s directors and executive officers have financial interests in the merger in addition to their interests as BBI shareholders, including financial interests that are the result of compensation arrangements with BBI, and the manner in which such interests would be affected by the merger;

the regulatory and other approvals required in connection with the merger and the expectation that such regulatory approvals will be received in a timely manner and without the imposition of unacceptable conditions;

the fact that the merger consideration paid in the form of First Bancshares common stock is expected to be tax-free to BBI shareholders;

the greater liquidity in the trading market for First Bancshares common stock relative to the market for BBI stock due to the listing of First Bancshares’s shares on the Nasdaq Global Select Market; and

the opportunity for BBI shareholders to receive First Bancshares common stock which has historically paid a cash dividend as compared to the BBI shares for which no cash dividend has been paid.
The BBI board of directors also considered a number of potential risks and uncertainties associated with the merger in connection with its deliberation of the proposed transaction, including, without limitation, the following:

the risk that the merger may not be consummated or that the closing may be unduly delayed, including as a result of factors outside either party’s control;

the potential risk of diverting management attention and resources from the operation of BBI’s business and towards the completion of the merger and the possibility of employee attrition or adverse effects on client and business relationships as a result of the announcement and pendency of the merger;

the requirement that BBI conduct its business in the ordinary course and the other restrictions on the conduct of BBI’s business prior to the completion of the merger, which may delay or prevent BBI from undertaking business opportunities that may arise pending completion of the merger;

that under the merger agreement, subject to certain exceptions, BBI cannot solicit competing acquisition proposals;

the potential risks associated with achieving anticipated cost synergies and savings and successfully integrating BBI’s business, operations and workforce with those of First Bancshares and the risk of not realizing all of the anticipated benefits of the merger or not realizing them in the expected timeframe;

the possibility that BBI will have to pay a $4.6 million termination fee to First Bancshares if the merger agreement is terminated under certain circumstances;

that the exchange ratio is fixed so that if the market price of First Bancshares common stock is lower at the time of the closing of the merger, the economic value of the merger consideration to be received by BBI shareholders in exchange for their shares of common stock will also be lower; and

the other risks under the sections entitled “Cautionary Statement About Forward-Looking Statements” and “Risk Factors.”
In considering the recommendation of the BBI board of directors, you should be aware that certain directors and officers of BBI may have interests in the merger that are different from, or in addition to, interests of BBI shareholders generally and may create potential conflicts of interest. The BBI board of directors was aware of these interests and considered them when evaluating and negotiating the merger agreement, the merger and the other transactions contemplated by the merger agreement, and in recommending to BBI’s shareholders that they vote in favor of the proposal to approve the merger agreement. See “Interests of BBI Executive Officers and Directors in the Merger.”
The foregoing discussion of the factors considered by the BBI board of directors is not intended to be exhaustive, but, rather, includes the material factors considered by the BBI board of directors. In reaching
 
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its decision to adopt and approve the merger agreement and the merger and the other transactions contemplated by the merger agreement, the BBI board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The BBI board of directors considered all these factors as a whole, including discussions with, and questioning of, BBI’s management and BBI’s financial and legal advisors, and overall considered the factors to be favorable to, and to support, its determination.
For the reasons set forth above, the BBI board of directors has adopted and approved the merger agreement and the transactions contemplated thereby and recommends that you vote “FOR” the merger proposal and “FOR” the adjournment proposal.
Each of the directors of BBI has entered into a voting agreement with First Bancshares, pursuant to which they have agreed to vote in favor of the merger proposal and the other proposals to be voted on at the BBI special meeting, subject to the terms of the voting agreement. The voting agreements are discussed in more detail in the section entitled “Information About the BBI Special Meeting — Shares Subject to Voting Agreements; Shares Held by Directors and Executive Officers.”
Opinion of BBI’s Financial Advisor
BBI retained Piper Sandler to act as financial advisor to BBI’s board of directors in connection with BBI’s consideration of a possible business combination. BBI selected Piper Sandler to act as its financial advisor because Piper Sandler is a nationally recognized investment banking firm whose principal business specialty is financial institutions. In the ordinary course of its investment banking business, Piper Sandler is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.
Piper Sandler acted as financial advisor to BBI’s board of directors in connection with the proposed merger and participated in certain of the negotiations leading to the execution of the agreement and plan of merger. At the April 21, 2022 meeting at which BBI’s board of directors considered the merger and the agreement and plan of merger, Piper Sandler delivered to the board of directors its oral opinion, which was subsequently confirmed in writing on April 21, 2022, to the effect that, as of such date, the merger consideration was fair to the holders of BBI’s common stock from a financial point of view. The full text of Piper Sandler’s opinion is attached as Annex B to this proxy statement/prospectus. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Piper Sandler in rendering its opinion. The description of the opinion set forth below is qualified in its entirety by reference to the full text of the opinion. Holders of BBI common stock are urged to read the entire opinion carefully in connection with their consideration of the proposed merger.
Piper Sandler’s opinion was directed to the board of directors of BBI in connection with its consideration of the merger and the agreement and plan of merger and does not constitute a recommendation to any shareholder of BBI as to how any such shareholder should vote at any meeting of shareholders called to consider and vote upon the approval of the merger and agreement and plan of merger. Piper Sandler’s opinion was directed only to the fairness, from a financial point of view, of the merger consideration to the holders of BBI common stock and did not address the underlying business decision of BBI to engage in the merger, the form or structure of the merger or any other transactions contemplated in the agreement and plan of merger, the relative merits of the merger as compared to any other alternative transactions or business strategies that might exist for BBI or the effect of any other transaction in which BBI might engage. Piper Sandler also did not express any opinion as to the fairness of the amount or nature of the compensation to be received in the merger by any officer, director or employee of BBI or First Bancshares, or any class of such persons, if any, relative to the compensation to be received in the merger by any other shareholder. Piper Sandler’s opinion was approved by Piper Sandler’s fairness opinion committee.
In connection with its opinion, Piper Sandler reviewed and considered, among other things:

An execution copy of the agreement and plan of merger;

certain publicly available financial statements and other historical financial information of BBI and its banking subsidiary, Beach Bank, that Piper Sandler deemed relevant;
 
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certain publicly available financial statements and other historical financial information of First Bancshares that Piper Sandler deemed relevant;

internal net income estimates for BBI for the years ending December 31, 2022 through December 31, 2024 with an annual net income growth rate for the years ending December 31, 2025 and December 31, 2026, as provided by and confirmed with the senior management of BBI;

publicly available mean analyst net income and dividend per share estimates for First Bancshares for the years ending December 31, 2022 and December 31, 2023, as provided by the senior management of First Bancshares, as well as a long-term annual earnings per share growth rate and estimated dividends per share for First Bancshares for the years ending December 31, 2024 through December 31, 2026, as provided by the senior management of First Bancshares;

the pro forma financial impact of the merger on First Bancshares based on certain assumptions relating to transaction expenses, purchase accounting adjustments and cost savings, as well as an estimated net income growth rate for BBI for the years ending December 31, 2025 and December 31, 2026, as provided by the senior management of First Bancshares;

the publicly reported historical price and trading activity for First Bancshares common stock, including a comparison of certain stock trading information for First Bancshares common stock and certain stock indices, as well as similar publicly available information for certain other companies, the securities of which are publicly traded;

a comparison of certain financial information for BBI and First Bancshares with similar financial institutions for which information is publicly available;

the financial terms of certain recent business combinations in the bank and thrift industry (on a nationwide basis), to the extent publicly available;

the current market environment generally and the banking environment in particular; and

such other information, financial studies, analyses and investigations and financial, economic and market criteria as Piper Sandler considered relevant.
Piper Sandler also discussed with certain members of the senior management of BBI and its representatives the business, financial condition, results of operations and prospects of BBI and held similar discussions with certain members of the management of First Bancshares and its representatives regarding the business, financial condition, results of operations and prospects of First Bancshares.
In performing its review, Piper Sandler relied upon the accuracy and completeness of all of the financial and other information that was available to and reviewed by Piper Sandler from public sources, that was provided to Piper Sandler by BBI or First Bancshares or their respective representatives, or that was otherwise reviewed by Piper Sandler, and Piper Sandler assumed such accuracy and completeness for purposes of rendering its opinion without any independent verification or investigation. Piper Sandler relied on the assurances of the respective managements of BBI and First Bancshares that they were not aware of any facts or circumstances that would have made any of such information inaccurate or misleading. Piper Sandler was not asked to and did not undertake an independent verification of any of such information and Piper Sandler did not assume any responsibility or liability for the accuracy or completeness thereof. Piper Sandler did not make an independent evaluation or perform an appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of BBI or First Bancshares, nor was Piper Sandler furnished with any such evaluations or appraisals. Piper Sandler rendered no opinion or evaluation on the collectability of any assets or the future performance of any loans of BBI or First Bancshares. Piper Sandler did not make an independent evaluation of the adequacy of the allowance for loan losses of BBI or First Bancshares, or of the combined entity after the merger, and Piper Sandler did not review any individual credit files relating to BBI or First Bancshares. Piper Sandler assumed, with BBI’s consent, that the respective allowances for loan losses for both BBI and First Bancshares were adequate to cover such losses and would be adequate on a pro forma basis for the combined entity.
In preparing its analyses, Piper Sandler used certain internal net income estimates for BBI for the years ending December 31, 2022 through December 31, 2024 with an annual net income growth rate for the years ending December 31, 2025 and December 31, 2026, as provided by and confirmed with the senior
 
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management of BBI. In addition, Piper Sandler used publicly available mean analyst net income and dividend per share estimates for First Bancshares for the years ending December 31, 2022 and December 31, 2023, as provided by the senior management of First Bancshares, as well as a long-term annual earnings per share growth rate and estimated dividends per share for First Bancshares for the years ending December 31, 2024 through December 31, 2026, as provided by the senior management of First Bancshares. Piper Sandler also received and used in its pro forma analyses certain assumptions relating to transaction expenses, purchase accounting adjustments and cost savings, as well as an estimated net income growth rate for BBI for the years ending December 31, 2025 and December 31, 2026, as provided by the senior management of First Bancshares. With respect to the foregoing information, the respective senior managements of BBI and First Bancshares confirmed to Piper Sandler that such information reflected (or, in the case of the publicly available analyst estimates referred to above, were consistent with) the best currently available estimates and judgments of those respective managements as to the future financial performance of BBI and First Bancshares, respectively, and the other matters covered thereby, and Piper Sandler assumed that the future financial performance reflected in such information would be achieved. Piper Sandler expressed no opinion as to such information, or the assumptions on which such information was based. Piper Sandler also assumed that there had been no material change in the respective assets, financial condition, results of operations, business or prospects of BBI or First Bancshares since the date of the most recent financial statements made available to Piper Sandler. Piper Sandler assumed in all respects material to its analysis that BBI and First Bancshares would remain as going concerns for all periods relevant to its analysis.
Piper Sandler also assumed, with BBI’s consent, that (i) each of the parties to the agreement and plan of merger would comply in all material respects with all material terms and conditions of the agreement and plan of merger and all related agreements, that all of the representations and warranties contained in such agreements were true and correct in all material respects, that each of the parties to such agreements would perform in all material respects all of the covenants and other obligations required to be performed by such party under such agreements and that the conditions precedent in such agreements were not and would not be waived, (ii) in the course of obtaining the necessary regulatory or third party approvals, consents and releases with respect to the merger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on BBI, First Bancshares, the merger or any related transactions, and (iii) the merger and any related transactions would be consummated in accordance with the terms of the agreement and plan of merger without any waiver, modification or amendment of any material term, condition or agreement thereof and in compliance with all applicable laws and other requirements. Finally, with BBI’s consent, Piper Sandler relied upon the advice that BBI received from its legal, accounting and tax advisors as to all legal, accounting and tax matters relating to the merger and the other transactions contemplated by the agreement and plan of merger. Piper Sandler expressed no opinion as to any such matters.
Piper Sandler’s opinion was necessarily based on financial, economic, regulatory, market and other conditions as in effect on, and the information made available to Piper Sandler as of, the date thereof. Events occurring after the date thereof could materially affect Piper Sandler’s opinion. Piper Sandler has not undertaken to update, revise, reaffirm or withdraw its opinion or otherwise comment upon events occurring after the date thereof. Piper Sandler expressed no opinion as to the trading value of First Bancshares common stock at any time or what the value of First Bancshares common stock would be once it is actually received by the holders of BBI common stock.
In rendering its opinion, Piper Sandler performed a variety of financial analyses. The summary below is not a complete description of all the analyses underlying Piper Sandler’s opinion or the presentation made by Piper Sandler to BBI’s board of directors, but is a summary of the material analyses performed and presented by Piper Sandler. The summary includes information presented in tabular format. In order to fully understand the financial analyses, these tables must be read together with the accompanying text. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. Piper Sandler believes that its analyses must be considered as a whole and that selecting portions of the factors and analyses to be considered without considering all factors and analyses, or attempting to ascribe relative weights to some or all such factors and analyses, could create an incomplete view of the evaluation process underlying its opinion. Also, no company included in Piper Sandler’s comparative analyses described below is identical to BBI or First
 
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Bancshares and no transaction is identical to the merger. Accordingly, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or transaction values, as the case may be, of BBI and First Bancshares and the companies to which they were compared. In arriving at its opinion, Piper Sandler did not attribute any particular weight to any analysis or factor that it considered. Rather, Piper Sandler made qualitative judgments as to the significance and relevance of each analysis and factor. Piper Sandler did not form an opinion as to whether any individual analysis or factor (positive or negative) considered in isolation supported or failed to support its opinion, rather, Piper Sandler made its determination as to the fairness of the merger consideration to the holders of BBI common stock on the basis of its experience and professional judgment after considering the results of all its analyses taken as a whole.
In performing its analyses, Piper Sandler also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which cannot be predicted and are beyond the control of BBI, First Bancshares, and Piper Sandler. The analyses performed by Piper Sandler are not necessarily indicative of actual values or future results, both of which may be significantly more or less favorable than suggested by such analyses. Piper Sandler prepared its analyses solely for purposes of rendering its opinion and provided such analyses to BBI’s board of directors at its April 21, 2022 meeting. Estimates on the values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold. Such estimates are inherently subject to uncertainty and actual values may be materially different. Accordingly, Piper Sandler’s analyses do not necessarily reflect the value of BBI common stock or First Bancshares common stock or the prices at which BBI or First Bancshares common stock may be sold at any time. The analyses of Piper Sandler and its opinion were among a number of factors taken into consideration by BBI’s board of directors in making its determination to approve the agreement and plan of merger and the analyses described below should not be viewed as determinative of the decision of BBI’s board of directors with respect to the fairness of the merger consideration.
Summary of Proposed Merger Consideration and Implied Transaction Metrics.
Piper Sandler reviewed the financial terms of the proposed merger. Pursuant to the terms of the agreement and plan of merger, at the effective time of the merger each share of BBI common stock issued and outstanding immediately prior to the effective time of the transaction, except for certain shares as set forth in the agreement and plan of merger, shall be converted into the right to receive 0.1711 shares of First Bancshares common stock. Piper Sandler calculated an aggregate implied transaction value of approximately $121.3 million and an implied purchase price per share of $5.84 consisting of the implied value of 14,732,382 shares of BBI common stock, 5,405,604 shares of BBI Class A convertible preferred stock outstanding, 374,126 restricted shares and 1,814,344 options with a weighted average strike price of $5.00 as of April 18, 2022. Based upon financial information for BBI as of or for the last twelve months (“LTM”) ended March 31, 2022 and the closing price of First Bancshares’s common stock of $34.13 on April 20, 2022, Piper Sandler calculated the following implied transaction metrics:
Transaction Price Per Share / 3/31/2022 LTM Earnings per Share
48.7x
Transaction Price Per Share / 2022 Est. Earnings per Share(1)
37.1x
Transaction Price Per Share / 3/31/2022 Tangible Book Value
144%
Transaction Price Per Share / 3/31/2022 Normalized Tangible Book Value(2)
158%
Tangible Book Premium / Core Deposits(3)
9.3%
(1)
As provided by BBI senior management
(2)
Reflects Price / Normalized TBV assuming a 10.0% TCE / TA ratio
(3)
Core deposits equal to total deposits less CDs greater than $100k
Stock Trading History.
Piper Sandler reviewed the publicly available historical reported trading price of BBI common stock for the one-year and three-year periods ended April 20, 2022. Piper Sandler then compared the relationship
 
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between the movements in the price of First Bancshares common stock to movements in its peer group (as described below) as well as certain stock indices, namely the S&P 500 Bank Index and the NASDAQ Bank Index.
First Bancshares’s One-Year Stock Performance
Beginning Value
April 20, 2021
Ending Value
April 20, 2022
First Bancshares
100% 92.1%
First Bancshares Peer Group
100% 101.9%
S&P 500 Bank Index
100% 97.3%
NASDAQ Bank Index
100% 104.9%
First Bancshares’s Three-Year Stock Performance
Beginning Value
April 20, 2019
Ending Value
April 20, 2022
First Bancshares
100% 111.1%
First Bancshares Peer Group
100% 123.9%
S&P 500 Bank Index
100% 115.0%
NASDAQ Bank Index
100% 125.9%
Comparable Company Analyses.
Piper Sandler used publicly available information to compare selected financial information for BBI with a group of financial institutions selected by Piper Sandler. The BBI peer group included nationwide publicly traded banks and thrifts whose total assets were between $500 million and $700 million, and whose LTM return on average assets (“ROAA”) was between 0.00% and 0.75%, but excluded mutual holding companies and targets of announced merger transactions (the “BBI Peer Group”). The BBI Peer Group consisted of the following companies:
1895 Bancorp of Wisconsin, Inc.
Catskill Hudson Bancorp, Inc.
CITBA Financial Corporation
Citizens Bancshares Corporation
CNB Financial Services, Inc.
Commencement Bancorp Inc.
Community First Bancorporation
Glenville Bank Holding Company, Inc.
Guaranty Bancorp, Inc.
HV Bancorp, Inc.
IBW Financial Corporation
Mars Bancorp, Inc.
Merchants & Marine Bancorp, Inc.
Middlebury National Corporation
Oconee Financial Corporation
The Baraboo Bancorporation, Inc.
The analysis compared publicly available financial information for BBI with corresponding data for the BBI Peer Group as of or for the year ended December 31, 2021 (unless otherwise noted) with pricing data as of April 20, 2022. The table below sets forth the data for BBI and the median, mean, low and high data for the BBI Peer Group. Certain financial data prepared by Piper Sandler, as referenced in the table presented below, may not correspond to the data presented in BBI’s historical financial statements, as a result of the different periods, assumptions and methods used by Piper Sandler to compute the financial data presented.
 
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BBI Comparable Company Analysis
BBI
BBI
Peer Group
Median
BBI
Peer Group
Mean
BBI
Peer Group
High
BBI
Peer Group
Low
Total assets ($mm)(1)
620 575 594 682 505
Loans / Deposits (%)(1)(2)
92.7 71.1 67.3 85.0 47.4
Non-performing assets / Total assets (%)(1)(3)
1.81 0.52 0.55 1.73 0.01
Tangible common equity/Tang. assets (%)(1)(4)
13.12 8.02 8.85 16.84 6.37
Leverage Ratio (%)(1)(5)
10.04 8.67 8.85 11.94 6.98
Total RBC Ratio (%)(1)(6)
12.82 16.14 16.25 20.24 12.29
CRE / Total RBC Ratio (%)(1)(7)
235.5 184.7 191.7 481.9 99.6
LTM Return on average assets (%)(1)(8)
0.40 0.59 0.55 0.75 0.02
LTM Return on average equity (%)(1)(9)
3.0 7.3 6.7 10.4 0.2
LTM Net interest margin (%)(1)(10)
3.22 2.75 2.91 3.50 2.52
LTM Efficiency ratio (%)(1)(11)
84.7 78.6 79.1 101.1 59.1
Price/Tangible book value (%)
80 75 116 26
Price/LTM Earnings per share (x)
13.0 12.5 23.9 5.2
Current Dividend Yield (%)
2.2 2.7 6.4 0.7
Market value ($mm)
39 38 69 14
(1)
Bank level data as of March 31, 2022 used for BBI
(2 )
Bank level data as of December 31, 2021 used for Citizens Bancshares Corporation and CNB Financial Services, Inc
(3 )
Bank level data as December 31, 2021 used for Community First Bancorporation, Citizens Bancshares Corporation, Catskill Hudson Bancorp, Inc., Oconee Financial Corporation, CNB Financial Services, Inc., and Middlebury National Corporation
(4 )
Bank level data as of December 31, 2021 used for Community First Bancorporation, Glenville Bank Holding Company, Inc., Citizens Bancshares Corporation, Catskill Hudson Bancorp, Inc., Oconee Financial Corporation, CNB Financial Services, Inc.
(5 )
Bank level data as of December 31, 2021 used for Community First Bancorporation, Citizens Bancshares Corporation, Guaranty Bancorp, Inc., Catskill Hudson Bancorp, Inc., Oconee Financial Corporation, HV Bancorp, Inc., CNB Financial Services, Inc., and Middlebury National Corporation
(6)
Bank level data as of December 31, 2021 used for Citizens Bancshares Corporation, Guaranty Bancorp, Inc., Catskill Hudson Bancorp, Inc., Oconee Financial Corporation, HV Bancorp, Inc., 1895 Bancorp of Wisconsin, CNB Financial Services, Inc., and Middlebury National Corporation
(7)
Bank level data as of December 31, 2021 used for all companies in the BBI Peer Group
(8)
Bank level data as of December 31, 2021 used for Citizens Bancshares Corporation, Catskill Hudson Bancorp, Inc.
(9)
Bank level data as of December 31, 2021 used for Citizens Bancshares Corporation, Catskill Hudson Bancorp, Inc., CNB Financial Services, Inc., and Middlebury National Corporation
(10)
Bank level data as of December 31, 2021 used for Citizens Bancshares Corporation, Catskill Hudson Bancorp, Inc., CNB Financial Services, Inc.
(11)
Bank level data as of December 31, 2021 used for Citizens Bancshares Corporation, Catskill Hudson Bancorp, Inc., CNB Financial Services, Inc., and Middlebury National Corporation
Note: Financial data as of March 31, 2022 used for CNB Financial Services, Inc.
Piper Sandler used publicly available information to perform a similar analysis for First Bancshares by comparing selected financial information for First Bancshares with a group of financial institutions selected
 
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by Piper Sandler. The First Bancshares peer group included nationwide banks and thrifts whose securities are publicly traded on a major exchange (NYSE, NYSEAM, NASDAQ) and whose total assets were between $5.5 billion and $6.5 billion, but excluded mutual holding companies and targets of announced merger transactions (the “First Bancshares Peer Group”). The First Bancshares Peer Group consisted of the following companies:
Camden National Corporation
City Holding Company
CrossFirst Bankshares, Inc.
Financial Institutions, Inc.
First Mid Bancshares, Inc.
German American Bancorp
MidWestOne Financial Group
Old Second Bancorp, Inc.
Peapack-Gladstone Financial
Preferred Bank
QCR Holdings, Inc.
Republic Bancorp, Inc.
Republic First Bancorp, Inc.
Triumph Bancorp, Inc.
TrustCo Bank Corp NY
Washington Trust Bancorp
The analysis compared publicly available financial information for First Bancshares with corresponding data for the First Bancshares Peer Group as of or for the year ended December 31, 2021 (unless otherwise noted) with pricing data as of April 20, 2022. The table below sets forth the data for First Bancshares and the median, mean, low and high data for the First Bancshares Peer Group. Certain financial data prepared by Piper Sandler, as referenced in the table presented below, may not correspond to the data presented in First Bancshares’s historical financial statements, as a result of the different periods, assumptions and methods used by Piper Sandler to compute the financial data presented.
First Bancshares Comparable Company Analysis
First
Bancshares
First
Bancshares
Peer Group
Median
First
Bancshares
Peer Group
Mean
First
Bancshares
Peer Group
High
First
Bancshares
Peer Group
Low
Total assets ($mm)
6,174 5,995 5,901 6,212 5,500
Loans / Deposits (%)
54.6 82.4 79.7 104.8 48.3
Non-performing assets / Total assets (%)(1)
0.47 0.43 1.03 0.05
Tang. common equity/Tang. assets (%)(2)
6.77 9.01 8.98 13.46 5.66
Leverage Ratio (%)
9.40 9.50 13.35 6.06
Total RBC Ratio (%)
14.68 14.85 20.79 11.76
CRE / Total RBC Ratio (%)
222.7 214.0 375.5 18.9
LTM Return on average assets (%)
1.11 1.33 1.27 1.87 0.50
LTM Return on average equity (%)
9.9 12.7 12.1 17.4 6.0
LTM Net interest margin (%)
2.97 3.07 3.26 6.72 2.38
LTM Efficiency ratio (%)
59.2 55.7 55.9 75.1 30.7
Price/Tangible book value (%)
172 148 159 376 102
Price/LTM Earnings per share (x)
10.9 11.3 12.2 22.9 6.3
Price/2022E Earnings per share (x)
10.9 11.2 11.9 19.0 8.4
Price/2023E Earnings per share (x)
10.0 10.1 10.8 17.1 8.1
Current Dividend Yield (%)
2.0 2.9 2.7 4.4 0.4
Market value ($mm)
699 752 842 1,989 314
(1)
Bank level data as of December 31, 2021 used for Preferred Bank, Republic First Bancorp, Inc., and CrossFirst Bankshares, Inc.
 
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(2)
Bank level data as of December 31, 2021 used for Republic First Bancorp, Inc.
Note:
Financial data for First Bancshares, Preferred Bank and CrossFirst Bankshares, Inc. as of or for the period ending March 31, 2022
Analysis of Precedent Transactions.
Piper Sandler reviewed a group of recent merger and acquisition transactions. The group consisted of nationwide bank and thrift transactions announced between January 1, 2021 and April 20, 2022 where the target’s total assets were between $400 million and $900 million at announcement and the target’s LTM ROAA was between 0.0% and 1.0%, but excluded transactions with non-disclosed deal values and transactions with private investors, private equity buyers or Credit Union buyers (the “Nationwide Precedent Transactions”).
The Nationwide Precedent Transactions group was composed of the following transactions:
Acquiror
Target
BAWAG Group AG
Home Bancorp Inc.
Georgia Banking Co.
MidWestOne Financial Grp Inc.
Bus. First Bancshares Inc.
Community Bank System Inc.
BayCom Corp
First Mid Bancshares
First Western Financial Inc.
Simmons First National Corp.
Equity Bancshares Inc.
Southern California Bancorp
Bank of Marin Bancorp
SmartFinancial Inc.
BancorpSouth Bank
Peak Bancorp
Friendswood Capital Corp.
Peoples Banktrust Inc.
Iowa First Bancshares Corp.
Texas Citizens Bancorp Inc.
Elmira Savings Bank
Pacific Enterprise Bancorp
Delta Bancshares Co.
Teton Financial Services Inc.
Triumph Bancshares Inc.
American State Bancshares Inc.
Bank of Santa Clarita
American River Bankshares
Sevier County Bancshares Inc.
FNS Bancshares Inc.
Using the latest publicly available information prior to the announcement of the relevant transaction, Piper Sandler reviewed the following transaction metrics: deal value, deal value to LTM EPS, deal value to tangible book value per share (“TBVPS”), and core deposit premium. Piper Sandler compared the indicated transaction metrics for the merger to the median, mean, low and high metrics of the Nationwide Precedent Transactions group.
First
Bancshares/
BBI
Nationwide Precedent Transactions
Median
Mean
High
Low
Deal Value ($mm)
121
64 75 135 38
Deal Value / LTM EPS (x)
48.7
17.2 20.0 59.0 10.2
Deal Value / TBVPS (%)
144 / 158(1)
144 140 174 88
Core Deposit Premium (%)
9.3
5.2 5.0 8.9 (3.0)
(1)
Reflects Price / Normalized TBV assuming a 10.0% TCE / TA ratio