Good day, and thank you for standing by. Welcome to The First Bancshares first quarter 2022 earnings and proposed deal announcement. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during that session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded, and if you require any assistance during the call, please press star zero. I would now like to hand the conference over to your speaker today, Mr. Hoppy Cole. Mr. Cole, the floor is yours. Thank you, sir. Good afternoon, everyone. I'm Hoppy Cole, CEO and President of The First Bancshares, Inc. We've got an awful lot of exciting things to talk about today. Before we get started, let me introduce some folks from The First Bancshares, Inc. and from Beach Bancorp, Inc. that will be joining us on the call. We have DeeDee Lowery, our Chief Financial Officer. We have J.J. Fletcher, our Chief Lending Officer. We have Ben McIIwain, our Senior Credit Risk Officer. From the Beach Bancorp, Inc., we have Chip Reeves, CEO and President, and Richard Mascari, their Chief Financial Officer. We're excited to have everybody participate, and I thought from an agenda standpoint that we would talk about the transaction that was announced yesterday, and then follow that with some comments about our first quarter earnings results. Yesterday afternoon, we announced that The First Bancshares had entered into a definitive agreement to acquire Beach Bancorp, Inc., which is a holding company of Beach Bank. Beach Bank is a $620 million bank headquartered in Fort Walton Beach, Florida. They operate seven branches, six in the Pensacola, Fort Walton Beach, Destin, Florida MSAs, and one branch in Tampa, Florida. This transaction really goes back as far back as, you know, late 2017, early 2018, when Carl Chaney and Chip Reeves raised, put together an institutional group to raise capital, to recapitalize the Beach Bank franchise. Carl had reached out to us and said, you know, wondered if we were interested in taking an equity position in the company. We passed on the equity position at that time, but we did talk about, and Carl and I talked at length about potentially this day coming about. Gosh, after four or five years, here we are. I would call Carl like every April and say, "Hey, Carl, are you interested yet?" Finally, last year, I think, Chip and I ran into each other at a couple of conferences, got to know each other a bit, and then in January, he invited me down and we began to talk about putting our two companies together, how they would complement each other, help accelerate both of our growth plans, and how much our cultures, we share similar cultures and similar visions about the community banking space. This transaction has elements of both a strategic and financial nature. From a geographic standpoint, we currently have significant market share in the Northwest Florida market. Beach has significant market share in the Northwest Florida market. It's building density in a market that both of us already have a meaningful presence in. From a financial standpoint, we will create a combined institution, a community banking institution with almost $7 billion in assets, approximately $6.8 billion in assets. As I mentioned earlier, it improves our market share in some very high growth markets in the Pensacola, Fort Walton Beach-Destin MSAs. Together, we'll have over $900 million in deposits from those markets, well over $500 million of loans, two very complementary banking teams, both of which have a lot of knowledge of each other, but also have a lot of customer knowledge and market knowledge. Because of that density, we project significant cost savings, as five of the six branches that Beach operates in the Florida Panhandle are very close to five of our branches. We will have significant consolidation opportunities. We'll have the ability to generate cost savings and efficiencies, and additional synergies by combining those locations, taking the best of the best, which best serve the client, and which operate the most efficiently. It immediately improves, upon closing of the transaction, based on 3/31 numbers, the combined or at least our FBMS's loan-to-deposit ratio from 56% at 3/31. If you model in Beach's current loans, it moves us up to about 60%. As you know, Beach has a 90%+ loan-to-deposit ratio. The ability to combine those balance sheets, use up some of that, soak up some of that excess liquidity and then opportunities to deploy the liquidity as we move forward are substantial. We also believe there are significant revenue synergies. We've not modeled, but certainly identified. Mortgage banking is one. We have a little bit more volume than Beach, but very comparable mortgage volumes. They have a very active mortgage division headquartered in Destin. Day one, by combining those, we'll more than double essentially our mortgage volume. The opportunity to lever that as we go forward and expand it across our footprint and their footprint, so particularly in the Tampa, Central Florida market. Another opportunity that we'll have is that, as you all know, we have an extremely low cost, granular deposit base, diversified across the southeast. There'll be an opportunity to remix the funding side of Beach's balance sheet as that there are still some, legacy high cost CDs left and additional funding pieces. As we move forward, we'll be able to supplement or remove those or reduce those costs by deploying a lot of our excess liquidity in their current balance sheet mix. Finally, from a financial standpoint, we'll talk a little bit more in detail later as we discuss the transaction, a very acceptable pricing metrics in terms of dilution earn back, and EPS accretion and internal rates of return. From a strategic standpoint, and I'll say this, Beach Bank is not your standard $600 million bank that we've seen. The quality of the banking, of the bankers that they have here, their expertise, their high level of performance, the systems, the platforms, the specialty lines of business are commensurate with a much larger institution than just simply a $600 million bank. Certainly $600 million is a nice size for us, but really the story is about how do we take and how do they influence the overall company to elevate and accelerate our growth plans with some of the expertise that they have. It certainly, from a strategic standpoint, strengthens our Northwest Florida franchise. It moves us in the community banking space in terms of market share, No. 2 in the Pensacola MSA, No. 1 in terms of deposit market share in the Crestview-Fort Walton-Destin MSA, again, with over $900 million of deposits and well over $ half a billion dollars of loans. It opens a high-growth market in terms of the Tampa metro market and the surrounding Central Florida area. We don't have another market in our company like that. As a lot of you know, well, we are a community bank that primarily operates in the suburbs around a lot of metropolitan centers, but we don't have a market where we have a meaningful presence in a metropolitan center of the size and with the growth opportunities that Tampa does. Tampa in itself will be its own region, self-contained. It'll be a nice diversification to our book, which as you know, is mostly one-to-four family construction, real estate-oriented, CRE-oriented. The Tampa piece of Beach's operation is heavily C&I-oriented. That's a nice diversification in terms of our product lines and our portfolio mix. They offer a high-quality seasoned team of bankers, both in Northwest Florida, and as I talked, we're complementary to our banking teams, and so they know each other very well. They've competed against each other, been very good competitors, and now we get to join forces and really leverage all that expertise and talent that we have in Northwest Florida. In Tampa, they've got an extremely accomplished commercial banking team that's well-entrenched in the market. They come from a lot of different backgrounds, but very sophisticated, very well tied into the Tampa market. Beach will bring to our combined company expertise in areas that we currently don't have as a standalone business and platforms that they've built, which we were trying to build, but they're already ahead of schedule and ahead of us in that regard, particularly in terms of specialty lines. A couple of areas that we are really excited about is that they have developed a government lending, an SBA, USDA platform. We tried to do that for a number of years in our bank. It's very difficult to do if you don't have the sort of self-contained expertise that really. I've learned that that is a entirely different product line to try to take your general business bankers and turn them into SBA government-assisted lenders is very difficult. You need a specialty division of that. They have accomplished that and have that operational in the Tampa market. They also have a healthcare practice specialty that works well in finding us another line of business that we can marry up with our private banking division, where we offer general bank-side products to our high-net-worth, high-income clients. We also offer a wealth management line to those clients. This healthcare practice specialty will be complementary, focusing on healthcare practices, veterinary practices, dental practices, podiatrist practices. Another complementary line of business that will help leverage market share, again, across the whole Southeast. We will bring to Beach in order to accelerate their strategic vision, capacity. You know, a much larger balance sheet, a much larger legal lending limit. We'll bring much more pricing power in terms of we have substantial excess liquidity and, you know, we'll dig into that a little bit more when we talk about our earnings. We have no wholesale funding, and so we have the ability to marry our excess liquidity, our pricing power, our capacity, in some of the highest growth markets in the Southeast and Northwest Florida, and again in Tampa, with a seasoned group of bankers who we're very confident can make use of that capacity and deploy excess liquidity. As you all know, the most important part of any merger, of any partnership is to make sure we're able to get the teams to work together to focus, number one, on the integration piece and making sure there's a minimal amount of impact on the clients so that we're successful in retaining all the business we have. Then two, to work together to meet and accelerate the growth plans that we have. The senior leadership teams with Beach all will be essentially participating and joining the resulting company. Continuity of that leadership is very important. Chip Reeves, he is currently serving as CEO and president of Beach, will join our executive leadership team as director of corporate strategy. Some of the initial things that Chip and I've talked about that he would like to focus on for our mortgage banking division and that you know we've got a large market share. We've got the opportunity to substantially increase our mortgage banking volumes and revenue. That's an area of expertise that he has in his background and area of experience that we're really excited to get and to join the company. Specialty lines, the platforms that they have built here in Tampa, will continue to report up through Chip Reeves. Again, the U.S. government SBA platform, the swap derivatives business, which we don't have as a fee income source for us. And then, the healthcare specialties will report up through the private banking division of our company. Those are some high-level comments about where the transaction originated and some of the things that we see why this transaction is so exciting as we move forward. Chip, would you like to add any thoughts and observations? Hey, Greg. Thanks, Hoppy. First, let me say just frankly from our entire team how excited we are to join the First. We've looked at the First for the last four years, and we cannot imagine frankly a better partner to continue our transformation of this organization. Second, just for any of our team members on the line as well, I just wanna thank all of our team. I'm proud of you for the transformation and growth since our July 2018 recapitalization. It's been Herculean efforts to get to the point where we are today, and extremely proud of what we have accomplished. What I'd say is we entered this journey in 2018 to build ultimately a multi-billion dollar business-centric institution in the state of Florida. We entered 2022 with two main strategic priorities. The first, to become the dominant community bank, market share-wise in Northwest Florida, and the second was to accelerate our outstanding Tampa region growth. What we found in the partnership with the First is that we were able to accelerate and achieve those, frankly, overnight. The strategic rationale of this combination is just outstanding. To get a look a little bit further just at the Tampa MSA, on page eight of your investor presentation, you'll see the economic momentum of the Tampa Bay region. It's frankly outstanding what has occurred over the last, you know, five years, and the momentum only continues to increase now. You know, we see the number one emerging tech city in the United States according to Forbes, and the number five city in the U.S. for net inflow of residents in 2021. We have the team and the talent. What we now have with the combination of The First is the scale and the balance sheet to take advantage of this region's opportunity. Frankly, our team can't wait. We only announced this in the last 48 hours. We had some more conversations the week prior with our team, and we're already seeing the client impact as we continue to accelerate this growth. Quick comments on loan growth. Beach since the recapitalization has averaged about 18% loan growth CAGR. That on a raw number ends up, especially the last three quarters, being about $20 million, I'm sorry, of net loan growth. We believe we can accelerate that with this combination. You'll see, as Dee Dee and Hoppy walk through the future numbers here of the power that the additional lending capacity can provide Beach with the deployment of the excess deposits into the Florida marketplace, will be an outstanding contributor to the future earnings of this corporation. With that one, Hoppy, I'm gonna turn it back to you. Thanks, Chip. Gosh, great comments. Again, system-wide, Beach, you guys have done a Herculean job, you know, building Beach back to where it is today is possible. We look forward to joining forces and really getting to work. Before we move on to earnings, just a couple of metrics regarding the pricing and structure of the transaction. It's 100% stock. The consideration mix is 100% stock. It's a fixed exchange ratio of 0.1711 shares of FBMS to Beach. The price to tangible book value is 142%. Price to 2022 estimated EPS is 36.5 times. However, if you place on there the cost savings that we think will generate, that's a number more like about 10.5 times earnings. P/TB ratio, very acceptable at 86%. That's less than 1%, day one tangible book dilution. The earnback less than one and three-quarter years. Internal rate of return, substantially above our hurdle of 15%, really in the mid-20s, high 20s. The resulting corporation, in addition to having substantial liquidity, substantial low-cost funding and access to low-cost funding, winds up with an extremely good capital base, from a potential common equity standpoint, be about 7.5%. Leverage will be 8.5%. Total risk-based capital, 17.5%. In terms of impact to earnings, we forecast an EPS accretion of 2.3% in 2023, but really the first full year when cost savings are fully realized would be in 2024. We believe that's approximately about 4.7%-5% EPS accretion. Again, that's based on cost savings of 50%. We anticipate closing in the third quarter with systems integration in the fourth quarter. With that, those are some comments relative to the actual transaction. I think we will transfer over to talking about our results for the first quarter. Some high-level comments and then Dee Dee will pick up and give us some more color on the actual results of earnings. J.J. Fletcher will give us some color on what our loan growth was for the quarter. Ben McIIwain, our Senior Credit Risk Officer, will talk about some of the credit metrics for the first quarter as well, and then we'll open it up for questions. Net income for the quarter totaled $16.8 million, or $0.81 a share. That's a 6% increase over the fourth quarter of 2021. Loans ex PPP grew about $32 million, or 4.4% on an annualized basis. We continue to see deposit growth, $211 million for the quarter, 4% on an actual basis quarter-over-quarter. Now, our net interest margin contracted a bit, 36 basis points during the quarter, but you'll remember primarily the result of the Cadence branch acquisition, which was closed December the third, and that was a little more than $400 million in new deposits that hit our balance sheet last month of last quarter. Again, that contributes to our excess liquidity on the balance sheet as well. If you remember, the pricing was very attractive for that deposit base, and we're very excited to get it. Again, in the long run or medium run, short run, it puts us in a great position to benefit substantially from the transaction we talked about earlier in the presentation, but then also for an increasing interest rate environment to help improve our earnings and improve our returns. Again, we have currently during the quarter, and Dee Dee will dig into this a little more, but we run average excess cash balances of around $800 million. Again, back to the substantial liquidity, highly retail-oriented, low cost for any deposit base. Our asset quality remains strong, and non-performing assets decreased 10% quarter-over-quarter and 25% year-over-year. We had net recovery, so 12 basis points during the quarter. We repurchased 600,000 of our common shares under our repurchase plan that was approved early in the first quarter. We also, I mean, it was a busy quarter, we converted our charter from a national bank to a state-chartered Fed member bank. A lot of stuff going on during the quarter, a lot of hard work from all our team members on both sides of the company. Gosh, what we think is a certainly strong start to the year. Dee Dee, would you like to dig into our earnings a little more? Sure. Thanks, Hoppy. As Hoppy mentioned on the net income for the quarter, 16.8 or $0.81, I wanna talk a minute about our operating earnings. Those were $0.72 for the quarter, which was right on top of consensus. We had three items that were kinda one-time items. We'll go ahead and mention those because a couple more of my comments just refer to those one-time items, and we'll go ahead and get those out of the way. We did have three items. One was a grant that we received from the U.S. Department of the Treasury, our Financial Assistance Award. If you recall, we've been getting those every year for the last several years. This quarter it was $703 thousand. After tax, it would be about $500,000. We did have, during the quarter, some acquisition charges related to Cadence and also some charter conversion expenses, of about $400,000. After tax, it was at $300,000. We did have a one-time income, on our BOLI related to a death that was $1.6 million, and so that net after tax was $1.6 million. Those items are three kinda one-time items that brought that operating earnings down to $0.72. One of the things that I wanna mention, kinda what we've been talking about for those of you that have, you know, for the last really 2 years since we've had all this excess liquidity that, you know, we still have the excess liquidity, but to kinda keep looking at our spread and keep looking at our earnings, not necessarily our margin just because of that excess liquidity. We did, for the last several quarters, you can see our net interest income, ex PPP fees, have increased over the last year. Also this past quarter, it was an increase of $500,000, a little over 1%. Our investments, income on our investment portfolio increased over last quarter, $1.5 million, about 20%. Then also, on our non-interest income, minus those one-time items, that increased $500,000 or about 6.5% over the fourth quarter. That was particularly in two categories, interchange fees and our service charges on accounts. Part of that is due to the additional clients that we got through the Cadence branches back in December. You can see the impact of that during this first quarter. Also on our expenses, they were down minus the one-time items, about $1 million or 3.3%, a little over 3.5%, right at 3.5%. If you recall, last quarter, as indicated in our press release, we did have some one-time items, about $1 million that was in the fourth quarter, that drove those expenses up during the fourth quarter. I believe that was about $1.1 million last quarter. Kind of on par with last quarter if you exclude those items out. As Hoppy mentioned, on our balance sheet, our deposits did increase 4% to $211 million. Generally, in the past several years, we've talked about, during this first quarter, we usually have a big pickup in our public fund portfolio, but that was about $60 million during the quarter. The remaining balance of about $150 million was related to retail and business customers. That's a little bit of a change. I know it's kinda toward the end of the first quarter is when the public funds pick up, so we should see some of that in the second quarter. Glad to see some of that in the retail and business customer during the quarter. Another positive note was on our interest-bearing deposits. That cost decreased 2 basis points down to 18 basis points compared to the fourth quarter. As Hoppy mentioned, the overall margin did decrease 36 basis points compared to last quarter. 2 of those, part of that has been, which we talked about with the excess liquidity we had. Normally, if you look at our average balances on our margin table, we've been running about $625 million or so, and that's been for several quarters into last year. This quarter, it was $825 million average. Part of that was the continued from the Cadence acquisition, those funds being on there for the quarter. We did put about $350 million on average into the investment portfolio during the quarter, but still ended with $825 on average. That is a big driver in the decrease. Part of that as well related to the differential from the fourth quarter was our PPP fees. That was about 12 basis points of the decrease, as well. That $225 million that I mentioned kind of above where we have been running in liquidity was about 12 basis points. That's about 25 basis points of that decrease of those two items. Overall, as Hoppy mentioned, the excess liquidity that we talked about, you know, $700 million of that, is about 40 basis points to the margin. You know, we are still putting some of that to work in our investment portfolio. We have been purchasing very bonds with very conservative structures and structured solid cash flows coming in. Typically what we have been buying over the years, nothing new, but just putting in the same type things that we have been, which has driven up our asset sensitivity a little bit going into year 2 just because we still have so much excess liquidity and then what's anticipated in our cash flows. One more thing I want to mention about the margin was kind of looking at what the future rate hikes might do to our earnings and to the margin. We have, with our modeling run, the company that does our modeling, they had 4 25 basis point hikes built in. We had some more runs done to have 6 hikes. Okay. Built in this year. For 2022. Backing those, taking that differential and looking at what just that 50 basis points increase would do, over that, and then keeping our current deposit costs the same, we feel like that we should be able to, for 2022, keep our deposit costs where they are. That would impact about $5 million after tax, which would be about $0.25 on our EPS. That's kind of where we're looking at for that. I think that's all I have, Hoppy, on my prepared comments, so I'll turn it back over to you. Thanks, DeeDee. Again, a strong start to the quarter. Liquidity continues to build. We expect margin expansion over the next several months due to the interest rate increase and again, continued growth in the loan book and not only organically, but certainly the combination of our two companies. Quite frankly, we've already started leveraging some of that in the fees from the loan participation between our companies. We're getting a head start on that and excited about what that'll mean to us in terms of improved growth and profitability. JJ, would you like to give us a few comments about the loan growth for the quarter? Yes. Thank you, Hoppy. You already mentioned we were very pleased to have a growth of about $32 million ex-PPP for the quarter. Very excited that came from really all regions of the company. Mississippi was very strong, standout region for us in the first quarter, and really had a good blend of existing credits and new relationships that helped drive that number. March was a really outstanding month with about $200 million in new originations, and that was against about 360 for the entire quarter. One thing we've been looking at closely is unfunded commitments. That remained very strong, about $338 million at quarter end. Pipelines very healthy, about $645 million in total approved, pending close and collecting information. Those totals were $587 in February and $507 in January, so really strong at the end of the quarter, and in the first three weeks of this quarter continue to look positive. Origination was very strong and a lot of the large credits are moving through the pipeline. Really good quarter and a good start to this quarter. Thanks for those comments, JJ, Ben, again, strong credit metrics for the quarter, but, if you give us a little color on credit performance, please. Yes, I would love to compare to about a year and a half ago. This is a much easier conversation now. Let me touch on past dues real quick. Finished this quarter at 39 basis points. That was a very strong start to the year, up a little bit from the end of last quarter. We finished last year at 25 basis points. I would like to point out, too, that that was with 0 loans in any type of payment modification period or P&I deferrals at the end of the year. All loans had returned to the regular repayment terms. I would also like to mention last year we averaged under 54 basis points for past dues. That's the lowest average since we've been tracking that metric in 2013. Really good year last year, and put that into perspective for this quarter, all three months of this quarter, we're below that 54 basis point average. Really good start here on past dues. Classified loans. Now this is one where we had a little bit of heartburn going into the pandemic. We all know that the pandemic started in March 2020, and classified loans really didn't increase a whole lot over 2020. They increased 18% through the year of 2020 to about $14 million. Let me touch on this quarter real quick. We finished this quarter at $103 million, or 16.68% of capital. That compares well and is down from last quarter, where we were at $110.5 million or 18.34% of capital. Compared to first quarter of last year, down from $107 million or 19.59% of capital. I started to give you some background, but let me now go back and give you some background on classified loans. The end of third quarter of 2020, we implemented a review process on any loan that was in some type of payment modification period or that was carrying a balance of deferred interest from the suspension of P&I payments. We saw through the end of 2020 or through the fourth quarter going into end of 2020 that our criticized loans, our special mention loans increased significantly. The reason for that was in that review process, especially in the hospitality industry, hotels, restaurants, and in the retail sector, if we didn't have any updated financials and we couldn't document the ability to repay on those loans, we went ahead and moved those loans mostly to special mention. You saw a huge increase there. Going into the first half of 2021, what can happen with these criticized loans, they can either get upgraded or downgraded. By May of 2021, we had reached our peak of classified loans from downgrading those criticized loans, and we did it $121.5 million or 21.53% of capital. That trend turned around, and I would say in large part to that review process and getting updated financial statements and really documenting where our borrowers were at. By the end of the year, like I said, we were back down to $103 million in classified loans from that one-time high $121.5, or 16.68%. That 16.68%, that is the best that has been since November of 2019. We're real happy that those classified loans we worked those back down. Like Hoppy mentioned a little bit ago, NPAs down, we finished this quarter up at $27.5 million or 92.7 basis points of total loans in ORE. That was down from last quarter, $30.5 million or 1.03% of total loans in ORE. Compared to the first quarter of last year, down from $36.9 million or 1.2% of total loans. Hoppy also mentioned net charge-offs. He gave you an annualized figure. We were in a net recovery position of 3.3 basis points, which is the first time we've been in a net recovery position since the beginning of 2018. Hopefully, that metric will continue trending that direction throughout this year, throughout the end of 2022. Hoppy, those are highlights. I think that kinda gives you a high-level view of how well we've come through that pandemic. Well, thanks, Ben. Again, strong performance in terms of credit quality and credit metrics. Appreciate the comments in regard to that. Well, that really concludes our prepared comments for the call today. Again, a really strong start to the year, not only in the posted results from The First Bancshares, but the announcement of our combination with Beach Bank only accelerates what we think is gonna be a good year in terms of growth and profitability. With that, I think we open it up for questions. Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, please press the pound key. Stand by as we compile the Q&A roster. Our first question comes from Kevin Fitzsimmons of D.A. Davidson. Your line is open. Hey, good afternoon, everyone. Thank you, Kevin. Hey, Hoppy. I'm assuming, you know, this deal, it's been, you know, announced or proposed in anticipation of the Treasury's ECIP program which you guys have been open about, that you're eligible and you plan to participate. Number one, what's your latest thoughts on timing when that's actually gonna happen? Then a more broader question is, you know, assuming that comes through, you got plenty of regulatory capital and this is, you know, gives you a boost of basically free capital. Beyond this announcement with Beach, which I know you're gonna focus on and until it gets integrated, but beyond that, do you see yourselves getting more active in additional deal opportunities and kinda when and where and what kinda size? Any kind of flavor you can give us on that. Particularly, like, does this deal change that dynamic? Like, is it really all about Florida for The First now? Thanks. Thanks, Kevin. I'll answer a couple of points in that. Number one, the ECIP capital. As you know, we're eligible and were eligible and are eligible for $175 million of that capital from the US Treasury. The structure of that is contemplated to be a preferred issuance. However, we continue to analyze that. We continue to talk about some of the requirements around it. I'm not certain, and we're not committed at this point to actually closing on the capital. That did not go into the modeling of this transaction, and really that would be, again, extra sort of extra capital for us, extra low cost capital. We're a bit concerned about some of the Treasury, some of the requirements Treasury has and some of the disclosures that would require us to make as a public company. No certainty that we'll actually close on that. Secondly, this transaction is certainly accretive and in line with our strategic plan. As you know, there's scarcity in Florida, but Florida remains a top priority in terms of expansion for us, not only in terms of acquisitions but also in terms of organic growth. Chip and his team will help us, or part of their role and part of Chip's role will be to continue to look for expansion opportunities, particularly in the Florida area, particularly in the Central Florida area. That can take the form of either if there are additional acquisition opportunities or if there are organic, by organic means, with team lift outs and the establishment of loan production offices and then potentially branches in some of the more attractive markets in Eastern and Central Florida. Yes, this deal, not only from a financial standpoint, helps immediately in scale pricing capacity, but then also we acquire folks and team that has knowledge of certainly a high growth area in the Florida market, which has been very important to us. As you know, we've done multiple deals. We've done. In fact, we've closed transactions both on the same day. We've done a couple of years where we've done three transactions in a year. Over the years, we've had the opportunity to have a team that's dedicated to acquisition integration. We hope this is a start to a very active year. Valuations kinda are all over the place, and that can be a headwind, as you know. However, it seems like there's a lot of opportunity, and we continue to have a lot of conversations. Florida is a high priority because of the overall demographics. Tennessee is a market that, you know, we've not historically looked in very hard, but we've been pretty geographically disciplined about how we build out our franchise. With our expansion to Northeast Mississippi, and then all of a sudden Tennessee begins to make a lot more sense, in terms of geographic connectivity. There's a lot of banks we think in Tennessee that are banks like we like to partner with, in that sort of $500 million-$1 billion-$1.5 billion range, in some very nice markets, again, with overall good demographics. And then finally, with our presence in Baton Rouge, we begin to think about Texas a bit. Again, valuations are high there, but from a strategic standpoint, it would make a lot of sense because the ability to connect Florida and Texas and sort of all parts in between we think would be a unique franchise in the community bank space and would certainly hopefully drive a premium valuation. We're excited about the year. We've got a lot of optionality. We've got, you know, plenty of capital particularly, you know, you mentioned our TCE and being roughly 7.5%. That for us, you know, historically, that was a long time ago, we operated 6% or well under that. We certainly don't wanna operate under 6% anymore. However, in the, you know, 7%-8% range is a comfort level I think that, you know, given the risk-adjusted, on a risk-adjusted basis, the relatively conservative balance sheet that we have. You know, mid-7s, low 8s is certainly a reasonable level of tangible common equity. To be on the high side of total capital, regulatory capital, 17%-18%, plenty of capital, married with the earnings accretion that we'll enjoy going forward in order to support our acquisitive opportunities as we go forward. Again, that size range. $500 million or so, on the low end, you know, to well over $1 billion on the high end is kind of the sweet spot we wanna concentrate in. Great. Thanks, Hoppy. Just kind of alluded to it, but I just wanted to. I did wanna get into Tampa, and you had kind of referred to it more broadly as central Florida. Is kind of the near term opportunity really this getting, you know, more of a dense presence in northwest Florida and then putting the excess liquidity to work there? You know, it can be used. Then the longer term opportunity is using this Tampa presence as a springboard to a more broad presence in, you know, in and throughout central Florida, it sounds like what you're talking about. Yeah. I think you're definitely right, Kevin. Chip and I had that discussion last night, as we were riding around a bit, talking about strategically, his thoughts and our thoughts about where to go from here. Would you, Chip, like to expand on that a little bit or just. But yeah, our thoughts are kind of both, Kevin, to build density in the Tampa market. I mean, we've got a meaningful presence now, but certainly the capacity to increase that. Then the markets up, you know, I-95, I-75, some very attractive markets. You know, Bradenton, Sarasota, over on the east side as you go up to, you know, Fort Pierce and Port St. Lucie and up that way. Up in Central Florida area in Lakeland and up towards Gainesville and Ocala. Those are all high growth markets that we compete well in. We'll be opportunistic. Chip and I discussed this last night, looking for if there are potential acquisition opportunities, but also in terms of organic growth opportunities there. Okay, great. Thanks very much. Thanks, Kevin. Thank you. Our next question comes from Catherine Mealor of KBW. Your line is open. Thanks. Good afternoon and congratulations. Thanks, Catherine. I wanted to start on the growth, and I thought it was helpful to think about it in dollars, and I thought it was pretty telling that, you know, Hoppy at FBMS, y'all grew about $32 million this quarter. Then, you know, at Beach it looks like you're growing at about $20 million a quarter, and it looks like that kind of quarterly growth rate is gonna accelerate from here. You know, although this is relatively a smaller deal for you in terms of asset size, is it fair to think about that this acquisition can almost more than double your current loan growth rate, or am I being too optimistic on that? Well, that's offensive, Catherine. You know we like to underpromise, but. Yes, you do. No. Absolutely. We were talking and in fact modeling out, and we spent some time around this. What you're seeing there is, look, from our sort of historical community bank, suburban sort of loan portfolio, we're in that sort of mid-single digit growth rate, and that's fairly consistent, you know, excepting this last year where just payoffs have been crazy, particularly in the CRE space. I think that's right. I think if you look at what Beach can bring, particularly in the Tampa area, like together, we can definitely accelerate that growth rate. You know, it feels like we think there's an opportunity to do just that, to essentially look at a high single digits growth rate on a combined basis as we move forward. We think that's reasonably achievable. We don't think it would be taking an inordinate amount of risk, but we think the markets, particularly the Tampa area, will help support that. Okay, great. Then, Dee Dee, thinking about the $5 million in asset sensitivity that you talked about, I just wanna make sure I'm thinking about that right. The additional $5 million in after-tax net income that you get, how much of that is that just kind of shocking your portfolio for, you know, specific rate hikes? Or does it also include the deployment of some of your excess capital, excuse me, excess liquidity into loans? How do we think about, kind of, those two components of asset sensitivity? It is not necessarily deploying it. It's kind of taking the, you know, the balance sheet where we were at the end of February and then building on the two hikes because the original model already had, you know, four hikes in it. We added the two more just to kind of see the dollar volume of that based kind of having a baseline to work off of. It was really just maintaining the current deposit costs and then increasing that 50 basis points. It's really not deploying it more into loans or above what our growth, our normal growth, you know, because we budget the four, you know, the 4%. It's not going above that in the model. Got it. Okay. We're putting the 50 basis points on that excess liquidity, that cash that's sitting there. Got it. Okay. That's just $0.25 on 50 basis points of hikes. But to your point, that doesn't include any, I guess this is the zero deposit beta. As we kind of think about the impact of full hikes and as you kind of continue on, you know, don't run rate or annualize that $0.25 because deposit beta at some point will catch up and start to move. Is that a fair way to think about that? Yes, that's fair. Okay, great. Maybe one last thing on just as we model also this growth coming on, how should we think about maybe between now and year end before the deal closes, how active you'll be in deploying excess liquidity into the bond book versus just holding onto the liquidity so you can put it into loans as soon as the deal closes? We're not holding back for the loan growth as far as we have enough liquidity in that portfolio, that bond portfolio and the cash flows coming off of it, for that loan growth. You know, we're still investing in the portfolio. We're not gonna sit back and wait for loan growth. No, we're gonna continue at the kind of moderate pace we've been just putting some to work, you know, as we go. Okay. Catherine, outside of deploying the $400 million that we had that came to us from the Cadence branches, and you saw that first quarter where I think we put about that much and held -to- maturity security. I think the way I think about it is as a percentage of assets and in terms of dollar size, I don't know that the portfolio will grow materially over the rest of the year, but the cash flows coming off of that portfolio certainly will be reinvested. You know, interest rates have been kind to us a bit here, so there's substantial. Indeed, I think there's coming out of the bond portfolio in my view, there's about $250 million - about $200 million or $250 million of cash from maturities coming out of that portfolio. That's correct. I don't know that materially we'll increase the size of the bond portfolio, but we will do some investing, and we'll pick our spots. There is some opportunity to take some of that excess liquidity and stay relatively short, given its magnitude, and get some nice yield pickup. Great. All very helpful. Thank you for all the commentary this afternoon. Looks like a great deal. Congratulations. Thanks, Catherine. Appreciate it. Thank you. Next, we have Matt Olney of Stephens. Your line is open. Thanks. Hey, guys. Good afternoon. Hey, Matt. How are you? I'm great. Good afternoon. Congrats on the deal first off, and I'd love to hear more about the ownership on the Beach side. Sounds like the pro forma ownership of FBMS is gonna be around 15% when the deal closes. It sounds like Beach is some retail, some institutional. Any more background you can give on the Beach side? It sounds like there was a recap a few years ago. Thanks. Well, it was, and there's a lot of commonality in our shareholder base, so I'm hopeful they're gonna really applaud this transaction. Chip, would you like to talk about the Beach shareholder base? Sure, Matt, this is Chip Reeves. The 2018 recap was completed in July of 2018. About $100 million was raised at that time, primarily from institutional shareholders. Honestly, it's a little bit of a who's who of the bank space institutional investment community. With that, I think we have approximately 40 shareholders. Not very retail, very institutional. Got it. Okay. The Tampa team. Love to hear more about this team. How long have they been with the bank? Where were they previously? I guess what types of credits are they focused on? I assume they're locked up. Just any details you can give on that? Thanks. Yeah. Thanks, Matt. This is Chip Reeves again. I'll give a little detail on the group. We have Avi and The First did an amazing job over the last couple of weeks in what I'd call socializing this combination and the benefits of that with our Tampa team as well as a number of folks in Northwest Florida. All of our team members that have been essentially offered agreements to continue retention agreements have executed those. The team is intact. I mentioned in the prepared comments, we have actually already seen just in the last week or so some significant opportunities that frankly, we would not have been able to accomplish on our own. With the assistance of The First in this combination, we've been able to continue to handle the relationship and satisfy the client need. Two main individuals that lead our Tampa market. One is Henry Gonzalez. Henry was a longtime The Bank of Tampa team member and then also was the Florida region president for Mutual of Omaha Bank before joining Beach Bank at recapitalization, essentially about 3.5 years ago. Another Chip, amazingly enough, two Chips in the bank, but Chip Falk, who was formerly BB&T's commercial market president here in Tampa, another longtime companion, leads our middle market banking and all of our specialty lines of business. Those two individuals are frankly outstanding and compete at a level against regional institutions as well as the trillion-dollar banks. Our treasury management capabilities. Our lead treasury management officer joined us from Valley Bank approximately the same time, three to 3.5 years ago and is one of the best treasury sales officers that I have worked with in my career. That group is all with us, all staying excited about the opportunity, as you know, just in the last 24 hours is our client base. They have, Matt, they have signed contracts and or retention agreements. Very helpful. Thanks for the update there. I guess looking at the disclosures in the deck, it looks like Beach's profitability has been mediocre more recently. What else can you tell us about the ROA, the efficiency levels that have been more depressed over the last few quarters? Thanks. Yeah, Matt, I'll actually go ahead. This is Chip Reeves again. Sorry to grab this one, and then we'll let Hoppy hit and DeeDee hit the cost savings piece of this. But again, when we go from a strategic standpoint and what this transformation of Beach was set out to accomplish from July 2018 till now, if you look at our board of directors and the institutional shareholders, frankly, what we were looking to create was a $2-$3 billion business centric franchise in the state of Florida, especially as M&A activity had left what we thought a void and an opportunity. We have invested at the levels and scale, both within team, but also even more significantly, likely in platform, to accomplish such. Our efficiency ratio is obviously higher than, frankly, even our board would say is appropriate, but it's appropriate for the evolution of our company. The significant operating leverage that we've created within this institution is outstanding. We've taken the deposit franchise from 10% DDA to 27%. We spoke about the loan CAGRs previously. If you follow that and just add one more year, frankly, of the 20% loan growth and our expenses have stayed the same. We have $100 million in cash that we did not put into the markets, and we had essentially no AOCI at the end of the first quarter. You put those together and then the 50% cost savings, and I think you can frankly, easily begin to model a return here that is probably even more than conservatively modeled in our combined organization. You know, Matt, as I mentioned earlier, you know, and Chip certainly alluded to in his comments, Beach Bank is not your average $600 million bank. Now, they did have a little more overhead that certainly affected their earnings on their growth path, but again, they set the bank up with a group of bankers, a group of systems and competing in some high growth markets. The ability to scale that up takes a little time. As we talk and as you know we talk about being better together and being able to accomplish our goals in a much shorter time period than what either of us could have done alone. Again, combination will certainly accelerate that profitability as a combined company, growth and profitability. Yeah. Well, I think I heard the loan growth CAGR has been more in that 18%-20% level over the last few years. In order to hit the EPS accretion you guys have outlined, can we assume that's the expectation that it's a similar level over the next few years from the Beach side? We expect our loan growth to be consistent with what they've achieved and that was what we used in our modeling. You know, anecdotally, I must tell you know, I feel pretty confident that given the increase in capacity, removing some of the restrictions of a smaller bank in both markets and together in Northwest Florida and all the opportunities there, but the scale, the capacity, the pricing power, combined with their market expertise in Tampa, you know, certainly we did not model that, but we certainly feel strongly we and we'd be very hopeful we could accelerate that growth rate. Okay. Congrats on the deal. Thanks for taking my questions. Thanks, Matt. Appreciate it. Thank you. Our next question comes from Christopher Marinac of JMS. Your line is open. Hey, good afternoon, Hoppy, and thank you for hosting the call today. Just a quick one, just to delve a little bit further into the loans versus deposits at Beach. Is the mix of loans a lot different than what we see on the mix of deposits in the presentation last night? Not sure what you're asking, Chris. Well, if we look at the you know, Pensacola, Crestview, and Tampa on deposits, would we see the loan portfolio kind of split along the same lines, or would there be a skewing towards Tampa? There would be a skewing towards Tampa and a very different mix in terms of lines of business. Tampa is heavily C&I oriented, as like us in Northwest Florida, that's heavily oriented towards, one-to-four family residential construction, CRE. Tampa has definitely been, one of the higher growth rate market and the lines of business here in Tampa and the portfolio mix is very different. Hey, Chris, just to add a little added color. This is Chip Reeves. In the Northwest Florida, the commercial loan side is approximately $200 million at 3/31. Also in Northwest Florida, our mortgage business, our on-balance sheet resi is $55 million-ish or so. If you go to Tampa at 3/31, we're slightly over $200 million in loan outstandings. That's been built in the three-year time period since recapitalization. Sure. Chip, do you think that this mix will be more Tampa as you fast forward, say, 24 months? Just big picture. What I'd say is, I'm excited about both regions, and I say that because Hoppy and I were discussing this last night as we're, you know, planning world domination. With that, we set a target of dominant community bank market share in Northwest Florida, and I think Hoppy had the same goal. Separately, we weren't there, and it was going to take us both a few more years. Together, we're already there, so the power of our teams there, and we're strong on the retail side, we're strong on the mortgage side on a combined basis and on the commercial banking side in that region now. Far better together than apart. Now what I'd say is that region will likely be slower growth than Tampa. I mean. We've been growing Tampa at, obviously, it's a lower book, so the percentages are high, but I believe we can grow Tampa's marketplace that $100 million a year. Frankly, with the combined combination here and the increased balance sheet, we may be able to exceed that. Chris, that's one of the things that Chip and I talked about just early on as we started looking at what this combination would mean. Look, in a $600 million bank, your resource level is more constrained than in a $6.8 billion bank. You know, when Beach had to allocate its resources, obviously it had to pick and choose about where it could compete heavily and where it should point those resources. Now, together, sort of with the resources that we have, there's no limitation, really. There's not much limitation there. We can certainly compete at a high level and a high dollar volume in Tampa. Again, as we talked, a dominant market share in Northwest Florida will have ample resources to continue to grow that market. Both of those are recipients of, you know, post-pandemic population relocation. We see it in both areas. We see it accelerating. The nice piece about Tampa is it has the C&I business, something that we don't currently have. Nope, that all makes sense. Thank you both for the color. Look forward to hearing more progress. Thanks, Chris. Appreciate it. Thank you. We have Taylor Brodarick of Hovde Group. Your line is open. Great. Just a couple from me. I think firstly on the credit quality review, you know, y'all have done a lot of deals over the last few years. Anything different when reviewing Beach's credit quality? I know, you know, it's like 70% of the loan book was looked at. I don't know if there's any other additional detail of note that would be of interest to hear about. Well, number one, we were certainly very pleased at the quality and depth of underwriting. That's one of the things. As you know, as we've gone across the southeast buying up, you know, relatively smaller banks, sometimes the credit expectations in terms of level and detail of underwriting and then the expectations around compliance, conformance and documentation may be a little different than what it would be in a larger organization. Here, the quality, the depth of underwriting, the quality of the customer base, very pleased with that, very excited about that. No. I'll tell you this, you know, we do two levels of loan diligence. We look with our internal group, and then we bring in CRM, who comes in and does a really deep dive into the portfolio. They confirmed classifications, and our loan marks came out exactly what was originally modeled and was provided by us to Beach independently of. From Beach to independently CRM in the beginning. There was really no adjustment as we went. Due diligence only confirmed what we suspected and what we indeed saw. No, we were very pleased with the loan diligence. Again, actually, in this book, we got a little more in terms of percentage penetration. A lot of times we're around the 60% range, but here we dove a little deeper into the portfolio. Oh, that's great. Last one from me. You know, obviously, having been a serial acquirer and probably this won't be the end for y'all, how does this change maybe other sort of capital deployment thoughts? Like you've been a regular dividend hiker. The share, you know, overall shares have trended down. Does any of that get changed for the time being, especially with, you know, industry-wide seeing tangible books coming down over the last quarter? Or is it just, you know, steady from the last few quarters? You know, I think we think about continuing to be a steady grower in capital accreting. Obviously, with our earnings continue to ramp, and then with this combination, we have a relatively low payout ratio in terms of retained earnings retention. We are accreting capital pretty quickly. Plus, we've got plenty of capital today. This doesn't change our strategic plan of continuing to be opportunistic in deploying that capital when it makes sense, either through organic means and/or through accretive means. Again, can't control the market. Valuations go where they go. We have not stepped, you know, we've not tried to necessarily step back and say, we're gonna do this and do that. We continue to be consistent. We continue to be opportunistic and look for areas to grow our business. Great. Thanks very much. Congrats. Thank you. Appreciate it. Thank you. Speakers, I see no further questions in the queue. I will turn the conference back over to Mr. Cole for closing remarks. Well, thanks so much. We appreciate everybody's participation today. We appreciate the support that we received from all of our stakeholders. Again, exciting news. We're so excited to be combining with Beach and what that means for us together as a company going forward. Again, great work by all our team members. For those of you on the phone, exceptional performance on both sides from Beach and from The First Bancshares. With that, we'll close the call out and you guys have a safe and a happy weekend. This concludes today's conference call. Thank you all for participating. You may now disconnect and have a pleasant day.