Market Overview

The First Bancshares, Inc. Reports a 20% Increase in Operating Net Earnings and Declares Quarterly Dividends

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HATTIESBURG, Miss.--(BUSINESS WIRE)--

The First Bancshares, Inc. (NASDAQ: FBMS), holding company for The First, A National Banking Association, (www.thefirstbank.com) reported today a 20% increase ($1.6 million) in operating net earnings (net income available to common shareholders adjusted for merger related costs) for the fiscal year ended December 31, 2016. Operating net earnings available to common shareholders totaled $9.9 million for 2016 as compared to $8.3 million for 2015.

Operating net earnings available to common shareholders for the fourth quarter of 2016 totaled $2.4 million as compared to $2.2 million for the fourth quarter of 2015 representing a 10.8% increase.

Fully diluted earnings per share for 2016 were $1.64 as compared to $1.55 for 2015. Fully diluted earnings per share were $0.30 for the fourth quarter of 2016 as compared to $0.40 for the fourth quarter of 2015. Fully diluted earnings per share for 2016 includes the issuance of 3,563,380 in new common shares during the fourth quarter related to the capital raise described below.

Operating net earnings available to common shareholders includes a one-time preferred dividend of $133,627 paid to private placement preferred shareholders in December 2016. These preferred shares were converted to common on December 30, 2016 and no further preferred dividend payments will be due on these securities.

Significant Events:

  • On October 14, 2016 the Company announced the signing of a stock purchase agreement to acquire Iberville Bank headquartered in Plaquemine LA. The acquisition of Iberville Bank added 10 branches in the Baton Rouge area with approximately $269 million in total assets.
  • On October 14, 2016 the Company announced the signing of a definitive agreement and plan of merger to acquire Gulf Coast Community Bank headquartered in Pensacola Florida. Gulf Coast added 5 branches in the Pensacola market with approximately $122 million in total assets.
  • On October 14, 2016 the Company raised $63.25 million in new capital through the issuance of 3,563,380 shares of convertible preferred stock at a price of $17.75 per share. The proceeds of the issuance were used to support the acquisitions, repay the CDCI/Tarp preferred stock, and provide for additional growth.
  • On December 6, 2016 the Company repurchased all 17,123 shares of its Cumulative, Perpetual Preferred Stock, Series CD issued to the U.S. Treasury in connection with the Company's participation in the Troubled Asset Relief Program's Community Development Capital Initiative (CDCI). The CDCI Preferred Stock was repurchased at fair market value $15,925,000 which equates to a discount of 7% to par, or $1,198,000.
  • The acquisitions of Iberville Bank and Gulf Coast Community Bank closed as planned with an effective date of January 1, 2017

M. Ray "Hoppy" Cole, President & Chief Executive Officer, commented, "2016 was another year of strong growth and significantly improved profitability for our Company posting a 20% year over year increase in earnings (exclusive of merger related costs) and double digit growth in loans and deposits.

"October 14 and the fourth quarter of 2016 will prove to be transformational in the history of our Company closing two acquisitions, a capital raise and repaying the CDCI preferred stock.

"These events represent continued execution on our strategic plan of building a community bank franchise in the Gulf South, focused on growth, profitability and increased shareholder value."

Balance Sheet

Consolidated assets increased $132.2 million or 11.5% to $1.3 billion for the year ended December 31, 2016. Total loans were $867.1 million at December 31, 2016 as compared to $854.4 million at September 30, 2016 and as compared to $772.5 million at December 31, 2015 representing increases of $12.7 million, or 1.48% for the quarter and $94.5 million, or 12.2% for the year. Increased loan volume year over year was spread across all real estate categories with commercial real estate experiencing the largest growth. Fundings for commercial real estate loans increased $61.1 million or 24.1% year over year along with residential real estate growth of $17.5 million or 6.4%.

Total deposits increased $122.5 million or 13.4% for the year ended December 31, 2016 with increases in all deposit categories with the largest increase in now accounts of $57.2 million and $39.7 million in time deposits of $100,000 or more. Total deposits decreased $32.6 million or 3.0% to $1,039.2 million for the quarter ended December 31, 2016. The decrease is a result of seasonal fluctuations in public deposit accounts.

Asset Quality

Nonperforming assets totaled $9.9 million at December 31, 2016, a decrease of $1.4 million compared to $11.3 million at September 30, 2016 and a decrease of $1.0 million compared to December 31, 2015. The ALLL/total loans ratio was 0.87% at December 31, 2016 and 0.88% at September 30, 2016. Including valuation accounting adjustments on acquired loans, the total valuation plus ALLL was 1.00% of loans at December 31, 2016. The ratio of annualized net charge-offs (recoveries) to total loans was 0.03% for the quarter ended December 31, 2016 compared to (0.04%) for the quarter ended September 30, 2016. As noted in our first quarter 2015 10-Q, the Company had been notified that a recovery of $941,000 was more likely than not expected during 2015. We received the first installment during the second quarter of 2015 which totaled $481,000 and the second installment during the third quarter of 2015 which totaled $241,000. The remaining balance of $219,000 was received during the fourth quarter of 2016.

Energy Loans

At December 31, 2016 the company had direct energy related loans of $19.9 million, representing 2.3% of the total loan portfolio. A majority of the outstanding are secured by marine assets that operate in the Gulf of Mexico, which are under term contracts to major operators tied primarily to oil and gas production.

Fourth Quarter 2016 vs. Fourth Quarter 2015 Earnings Comparison

Fourth quarter 2016 net earnings available to common shareholders (including merger related costs) totaled $2.1 million compared to $2.3 million for the fourth quarter of 2015. Revenues from consolidated operations increased $2.3 million in quarterly comparison. Net interest income increased $1.1 million in quarterly comparison as interest income earned on a higher volume of loans attributed to this overall increase. Noninterest income increased $0.8 million in quarterly comparison for the fourth quarter of 2016 as compared to the fourth quarter of 2015 consisting mainly of increased mortgage income.

Fourth quarter 2016 noninterest expense increased $1.9 million, or 22.4% as compared to fourth quarter 2015. The largest increase in noninterest expense was related to salaries and benefits of $1.3 million of which $500,000 is associated with the addition of The Mortgage Connection and increased mortgage commissions. Approximately $200,000 is associated with lending teams in Mobile, AL and Jackson, MS and the startup of a Treasury Management division. Other professional services increased $0.5 million, $0.4 million of which was related to the acquisitions of Iberville Bank and Gulf Coast Community Bank. The remaining $0.1 million was accrued for legal fees associated with the pending proxy litigation.

Fully taxable-equivalent ("FTE") net interest income totaled $10.9 million and $9.8 million for the fourth quarter of 2016 and 2015, respectively. The FTE net interest income increased $1.1 million in prior year quarterly comparison primarily due to an increase in interest earned on loans. Purchase accounting adjustments accounted for $339,000 of the difference in net interest income for the fourth quarter comparisons. Fourth quarter 2016 net interest margin of 3.77% includes 16 bps related to purchase accounting adjustments. The increase in the fair value adjustment is related to improved asset quality on two loans.

Investment securities totaled $255.8 million, or 20.02% of total assets at December 31, 2016, versus $255.0 million, or 22.3% of total assets at December 31, 2015. The average volume of investment securities increased $7.4 million in prior year quarterly comparison. The average tax equivalent yield on investment securities decreased 5 bps to 2.62%. The investment portfolio had a net unrealized loss of $1.7 million at December 31, 2016 as compared to a net unrealized gain of $1.6 million at December 31, 2015.

The average yield on all earnings assets increased 4 basis points in prior year quarterly comparison, from 4.13% for the fourth quarter of 2015 to 4.17% for the fourth quarter of 2016. This increase was offset by an increase in average interest expense of 12 basis points from 0.39% for the fourth quarter of 2015 to 0.51% for the fourth quarter of 2016.

Fourth Quarter 2016 vs Third Quarter 2016 Earnings Comparison

In sequential-quarter comparison, net earnings available to common shareholders decreased $360,000 to $2.1 million which included after-tax acquisition charges of $282,000 and a one-time preferred dividend of $133,627.

FTE net interest income increased $0.6 million to $10.9 million from $10.3 million in sequential-quarter comparison. The increase was due primarily to increased loan volume and $0.3 million in increased accretion of purchase accounting adjustments.

The average yield on all earnings assets increased 4 basis points in sequential-quarter comparison, from 4.13% for the third quarter of 2016 to 4.17% for the fourth quarter of 2016.

Noninterest income decreased $394,000 in sequential-quarter comparison consisting of a decrease in mortgage income of $195,000 and other losses of $161,000 related to sale of other real estate and the disposal of fixed assets no longer in use.

Noninterest expense increased $716,000 in sequential-quarter comparison which includes an increase in salaries and benefits of $298,000. The majority of this increase was year-end payments related to vacation and bonus accrual. The increase in noninterest expense also included approximately $400,000 in acquisition charges and additional legal expenses associated with the proxy litigation.

Year over Year Earnings Comparison

In year-over-year comparison, net earnings available to common shareholders (inclusive of merger related costs) increased $1.2 million, or 14.3%, to $9.7 million at December 31, 2016 from $8.5 million at December 31, 2015. Operating earnings available to common shareholders (exclusive of merger related costs) increased $1.6 million, or 20% to $9.9 million at December 31, 2016 from $8.3 million at December 31, 2015. Net interest income increased $3.3 million in year-over-year comparison as interest income earned on a higher volume of loans attributed to this overall increase.

Noninterest income increased $3.7 million in year-over-year comparison mainly consisting of increases in mortgage income of $3.2 million.

Noninterest expenses increased $4.7 million in year-over-year comparison consisting of increases in salaries and benefits of $3.6 million of which $1.8 million is associated with the addition of The Mortgage Connection and increased mortgage commissions. Approximately $500,000 is associated with lending teams in Mobile, AL and Jackson, MS and the startup of a Treasury Management division. The remaining increase of $1.1 million includes the above mentioned merger related costs.

Dividends

The Board of Directors of The First Bancshares, Inc. announced a cash dividend was declared in the amount of $0.0375 per share to be paid on its common stock on February 24, 2017 to shareholders of record as of the close of business on February 6, 2017.

About The First Bancshares, Inc.

The First Bancshares, Inc., headquartered in Hattiesburg, Mississippi, is the parent company of The First, A National Banking Association. Founded in 1996, the First has operations in Mississippi, Louisiana and Alabama. The Company's stock is traded on NASDAQ Global Market under the symbol FBMS. Information is available on the Company's website: www.thefirstbank.com.

Forward Looking Statements

This news release contains statements regarding the projected performance of The First Bancshares, Inc. and its subsidiary. These statements constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act. Actual results may differ materially from the projections provided in this release since such projections involve significant known and unknown risks and uncertainties. Factors that might cause such differences include, but are not limited to: competitive pressures among financial institutions increasing significantly; economic conditions, either nationally or locally, in areas in which the Company conducts operations being less favorable than expected; and legislation or regulatory changes which adversely affect the ability of the combined Company to conduct business combinations or new operations. The Company disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Further information on The First Bancshares, Inc. is available in its filings with the Securities and Exchange Commission, available at the SEC's website, http://www.sec.gov.

 
 
 
FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS DATA      

Quarter

Ended

12/31/16

   

Quarter

Ended

9/30/16

   

Quarter

Ended

6/30/16

   

Quarter

Ended

3/31/16

   

Quarter

Ended

12/31/15

Total Interest Income       $ 11,868       $ 11,269       $ 10,871       $ 10,597       $ 10,417  
Total Interest Expense         1,176         1,202         1,016         922         804  
Net Interest Income         10,692         10,067         9,855         9,675         9,613  
FTE net interest income         10,935         10,306         10,099         9,912         9,846  
Provision for loan losses         88         143         204         190         10  
Non-interest income         2,705         3,099         2,961         2,483         1,903  
Non-interest expense         10,132         9,416         8,921         8,395         8,275  
Earnings before income taxes         3,177         3,607         3,691         3,573         3,231  
Income tax expense         870         1,049         1,042         969         873  
Net earnings         2,307         2,558         2,649         2,604         2,358  
Dividends and accretion on preferred stock         195         86         86         85         85  
Net earnings available to common shareholders       $ 2,112       $ 2,472       $ 2,563       $ 2,519       $ 2,273  
                                 
PER COMMON SHARE DATA                                
Basic earnings per share       $ 0.39       $ 0.46       $ 0.47       $ 0.47       $ 0.42  
Basic earnings per share, operating*         0.44         0.48         0.47         .043         .040  
Diluted earnings per share         0.26         0.45         0.47         0.46         0.42  
Diluted earnings per share, operating*         0.30         0.48         0.47         0.43         0.40  
Quarterly dividends per share         .0375         .0375         .0375         .0375         .0375  
Book value per common share at end of period         17.19         17.60         17.15         16.58         16.05  
Tangible common book value at period end         15.46         14.73         14.26         13.67         13.10  
Market price at end of period         27.50         19.10         17.27         15.63         18.34  
Shares outstanding at period end         8,991,397         5,428,017         5,432,014         5,432,014         5,376,665  
Weighted average shares outstanding:                                
Basic         5,463,651         5,425,567         5,432,014         5,415,339         5,376,665  
Diluted         8,500,305         5,475,785         5,490,592         5,478,703         5,449,851  
                                 
AVERAGE BALANCE SHEET DATA                                
Total assets       $ 1,275,538       $ 1,233,034       $ 1,210,707       $ 1,196,328       $ 1,131,924  
Loans and leases         856,798         836,931         809,806         779,418         757,036  
Total deposits         1,037,877         1,044,428         1,036,914         964,681         946,849  
Total common equity         94,750         94,007         88,643         87,155         84,122  
Total tangible common equity*         79,112         78,347         72,885         71,297         69,514  
Total equity         159,786         111,130         105,766         104,278         101,245  
                                 
SELECTED RATIOS                                
Annualized return on avg assets         .72 %       .83 %       .88 %       .87 %       .83 %
Annualized return on avg assets, operating*         .75 %       .85 %       .85 %       .78 %       .76 %
Annualized return on avg common equity, operating*         10.11 %       11.14 %       11.57 %       10.69 %       10.27 %
Annualized return on avg tangible common equity, oper*         12.10 %       13.37 %       14.07 %       13.07 %       12.43 %
Average loans to average deposits         82.55 %       80.13 %       78.10 %       80.80 %       79.95 %
Taxable-equivalent net interest margin         3.77 %       3.70 %       3.68 %       3.68 %       3.81 %
Efficiency Ratio         74.28 %       70.24 %       68.31 %       67.73 %       70.43 %
                                 
CREDIT QUALITY                                
Allowance for loan losses (ALLL) as a % of total loans         .87 %       .88 %       .88 %       .88 %       .87 %
Nonperforming assets to tangible equity + ALLL         6.74 %       10.81 %       10.93 %       11.43 %       11.55 %
Nonperforming assets to total loans + ORE         1.14 %       1.31 %       1.34 %       1.40 %       1.40 %
Annualized QTD net charge-offs (recoveries) to total loans         0.03 %       (0.04 %)       (0.03 %)       (0.02 %)       (0.002 %)

 

*See reconciliation of Non-GAAP financial measures

 
 
 
FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

BALANCE SHEET      

Dec 31,

2016

   

Sept 30,

2016

   

June 30,

2016

   

Mar 31,

2016

   

Dec 31,

2015

Assets                                
Cash and cash equivalents       $ 62,119       $ 70,114       $ 54,777       $ 95,965       $ 41,259  
Securities available-for-sale         243,206         236,168         242,855         253,126         239,732  
Securities held-to-maturity         6,000         6,000         6,025         6,851         7,092  
Other investments         6,593         9,516         9,578         9,570         8,135  
Total investment securities         255,799         251,684         258,458         269,547         254,959  
Loans held for sale         5,880         9,437         8,937         6,095         3,974  
Total loans         867,054         854,366         824,083         797,764         772,515  
Allowance for loan losses         (7,510 )       (7,481 )       (7,259 )       (6,982 )       (6,747 )
Loans, net         859,544         846,885         816,824         790,782         765,768  
Premises and equipment         34,624         33,427         33,502         33,353         33,623  
Other Real Estate         6,008         4,670         4,716         4,363         3,083  
Goodwill and other intangibles         15,507         15,596         15,696         15,796         15,891  
Other assets         37,886         34,825         31,990         26,050         26,574  
Total assets       $ 1,277,367       $ 1,266,638       $ 1,224,900       $ 1,241,951       $ 1,145,131  
                                 
Liabilities and Shareholders' Equity                                
Non-interest bearing deposits       $ 202,478       $ 196,786       $ 194,950       $ 194,433       $ 189,445  
Interest-bearing deposits         836,713         875,003         837,413         846,672         727,250  
Total deposits         1,039,191         1,071,789         1,032,363         1,041,105         916,695  
Borrowings         69,000         68,000         68,000         78,976         110,321  
Subordinated debentures         10,310         10,310         10,310         10,310         10,310  
Other liabilities         4,339         3,881         3,929         4,363         4,369  
Total liabilities         1,122,840         1,153,980         1,114,602         1,134,754         1,041,695  
Total shareholders' equity         154,527         112,658         110,298         107,197         103,436  
Total liabilities and shareholders' equity       $ 1,277,367       $ 1,266,638       $ 1,224,900       $ 1,241,951       $ 1,145,131  

 
 
 

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT       Three Months Ended
      12/31/16     9/30/16     6/30/16     3/31/16     12/31/15
Interest Income:                                
Loans, including fees       $ 9,922     $ 9,706     $ 9,293     $ 9,013     $ 8,874
Investment securities       1,472     1,446     1,531     1,532     1,472
Accretion of purchase accounting adjustments       429     92     20     22     59
Other interest income       45     25     27     30     12
Total interest income       11,868     11,269     10,871     10,597     10,417
Interest Expense:                                
Deposits       968     962     813     701     657
Borrowings       148     160     149     193     131
Subordinated debentures       60     80     54     28     47
Accretion of purchase accounting adjustments       -     -     -     -     (31)
Total interest expense       1,176     1,202     1,016     922     804
Net interest income       10,692     10,067     9,855     9,675     9,613
Provision for loan losses       88     143     204     190     10
Net interest income after provision for loan losses       10,604     9,924     9,651     9,485     9,603
                                 
Non-interest Income:                                
Service charges on deposit accounts       605     606     604     637     674
Mortgage Income       1,204     1,399     1,184     645     245
Interchange Fee Income       683     666     681     644     650
Gain (loss) on securities, net       (3)     -     129     -     -
Gain on sale of premises and equipment       -     -     -     -     -
BEA award, net       -     -     -     -     152
Other charges and fees       216     428     363     557     182
Total non-interest income       2,705     3,099     2,961     2,483     1,903
                                 
Non-interest expense:                                
Salaries and employee benefits       5,943     5,645     5,400     5,149     4,670
Occupancy expense       1,222     1,209     1,110     1,073     1,107
FDIC premiums       265     254     257     244     243
Marketing       122     76     132     72     150
Amortization of core deposit intangibles       88     100     100     94     100
Other professional services       793     461     321     231     377
Other non-interest expense       1,699     1,671     1,601     1,532     1,628
Total Non-interest expense       10,132     9,416     8,921     8,395     8,275
Earnings before income taxes       3,177     3,607     3,691     3,573     3,231
Income tax expense       870     1,049     1,042     969     873
Net earnings       2,307     2,558     2,649     2,604     2,358
Dividends and accretion on preferred stock       195     86     86     85     85
Net earnings available to common shareholders       $ 2,112     $ 2,472     $ 2,563     $ 2,519     $ 2,273
                                 
Basic earnings per common share       $ 0.39     $ 0.46     $ 0.47     $ 0.47     $ 0.42
Basic earnings per common share, operating*       $ 0.44     $ 0.48     $ 0.47     $ 0.43     $ 0.40
Diluted earnings per common share       $ 0.26     $ 0.45     $ 0.47     $ 0.46     $ 0.42
Diluted earnings per common share, operating*       $ 0.30     $ 0.48     $ 0.47     $ 0.43     $ 0.40
 

*See reconciliation of Non-GAAP financial measures

 
 
 
FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT    

 

Year to Date

      2016     2015
Interest Income:              
Loans, including fees       $ 37,934     $ 34,038  
Investment securities         5,981       5,896  
Accretion of purchase accounting adjustments         563       204  
Other interest income         127       64  
Total interest income         44,605       40,202  
Interest Expense:              
Deposits         3,444       2,733  
Borrowings         650       460  
Subordinated debentures         222       185  
Accretion of purchase accounting adjustments         -       -171  
Total interest expense         4,316       3,207  
Net interest income         40,289       36,995  
Provision for loan losses         625       410  
Net interest income after provision for loan losses         39,664       36,585  
Non-interest Income:              
Service charges on deposit accounts         2,452       2,570  
Mortgage Income         4,432       1,277  
Interchange Fee Income         2,674       2,444  
Gain (loss) on securities, net         126       -  
Gain on sale of premises and equipment         -       110  
BEA award, net         -       152  
Other charges and fees         1,564       1,036  
Total non-interest income         11,248       7,589  
Non-interest expense:              
Salaries and employee benefits         22,137       18,537  
Occupancy expense         4,614       4,489  
FDIC premiums         1,020       966  
Marketing         402       437  
Amortization of core deposit intangibles         382       400  
Other professional services         1,806       1,332  
Other non-interest expense         6,503       6,001  
Total Non-interest expense         36,864       32,162  
Earnings before income taxes         14,048       12,012  
Income tax expense         3,930       3,213  
Net earnings         10,118       8,799  
Dividends and accretion on preferred stock         452       342  
Net earnings available to common shareholders       $ 9,666     $ 8,457  
Non-operating items*         239       (196 )
Net earnings available to common shareholders, operating       $ 9,905     $ 8,261  
               
Basic earnings per common share       $ 1.78     $ 1.54  
Basic earnings per common share, operating*       $ 1.86     $ 1.52  
Diluted earnings per common share       $ 1.57     $ 1.57  
Diluted earnings per common share, operating*       $ 1.64     $ 1.55  

 
 
 

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

COMPOSITION OF LOANS      

Dec 31,

2016

   

Percent

of Total

   

Sept 30,

2016

   

June 30,

2016

   

Mar 31,

2016

   

Dec 31,

2015

   

Percent

of Total

Commercial, financial and agricultural       $ 129,423       14.8 %     $ 121,963       $ 118,924       $ 126,381       $ 129,197       16.6 %
Real estate – construction         109,394       12.5 %       104,644         101,439         100,386         99,161       12.8 %
Real estate – commercial         314,359       36.0 %       307,963         296,676         270,085         253,309       32.6 %
Real estate – residential         289,640       33.2 %       296,587         282,420         276,272         272,180       35.1 %
Lease Financing Receivable         2,204       0.3 %       2,211         2,642         2,645         2,650       0.3 %
Obligations of States & subdivisions         6,698       0.8 %       6,861         6,965         7,034         969       0.1 %
Consumer         15,336       1.8 %       14,137         15,017         14,961         15,049       1.9 %
Loans held for sale         5,880       0.6 %       9,437         8,937         6,095         3,974       0.6 %
Total loans       $ 872,934       100 %     $ 863,803       $ 833,020       $ 803,859       $ 776,489       100 %
                                             
COMPOSITION OF DEPOSITS      

Dec 31,

2016

   

Percent

of Total

   

Sept 30,

2016

   

June 30,

2016

   

Mar 31,

2015

   

Dec 31,

2015

   

Percent

of Total

Noninterest bearing       $ 202,478       19.5 %     $ 196,786       $ 194,950       $ 194,433       $ 189,445       20.7 %
NOW and other         430,903       41.5 %       465,404         466,118         493,319         373,687       40.8 %
Money Market/Savings         182,793       17.6 %       187,228         174,740         169,733         174,090       19.0 %
Time Deposits of less than $100,000         77,684       7.5 %       78,785         72,389         72,295         73,865       8.1 %
Time Deposits of $100,000 or more         145,333       13.9 %       143,586         124,166         111,325         105,608       11.4 %
Total Deposits       $ 1,039,191       100 %     $ 1,071,789       $ 1,032,363       $ 1,041,105       $ 916,695       100 %
                                             
ASSET QUALITY DATA      

Dec 31,

2016

       

 

Sept 30,

2016

   

June 30,

2016

   

Mar 31,

2015

   

Dec 31,

2015

     
Nonaccrual loans       $ 3,265             $ 5,798       $ 5,742       $ 5,851       $ 7,368        
Loans past due 90 days and over         198               420         267         628         29        
Total nonperforming loans         3,463               6,218         6,009         6,479         7,397        
Other real estate         6,008               4,670         4,716         4,363         3,083        
Nonaccrual securities         408               408         408         408         408        
Total nonperforming assets       $ 9,879             $ 11,296       $ 11,133       $ 11,250       $ 10,888        
                                             
Nonperforming assets to total assets         .77 %             .89 %       .91 %       .91 %       .95 %      
Nonperforming assets to total loans + ORE         1.14 %             1.31 %       1.34 %       1.40 %       1.40 %      
ALLL to nonperforming loans         216.86 %             120.31 %       120.80 %       107.80 %       91.21 %      
ALLL to total loans         .87 %             .88 %       .88 %       .88 %       .87 %      
                                             
Quarter-to-date net charge-offs (recoveries)       $ 58             $ (79 )     $ (72 )     $ (48 )     $ (3 )      
Annualized QTD net chg/offs (recs) to loans         0.03 %             (0.04 %)       (0.03 %)       (0.02 %)       (0.002 %)      

 
 
 
FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
                                                                     
Yield Three Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months Ended
Analysis December 31, 2016       September 30, 2016       June 30, 2016       March 31, 2016       December 31, 2015
Tax Tax Tax Tax Tax
Avg Equivalent Yield/ Avg Equivalent Yield/ Avg Equivalent Yield/ Avg Equivalent Yield/ Avg Equivalent Yield/
Balance     interest     Rate       Balance     interest     Rate       Balance     interest     Rate       Balance     interest     Rate       Balance     interest     Rate
 
Taxable securities $ 183,032 $ 997 2.18 % $ 177,154 $ 965 2.18 % $ 186,615 $ 1,034 2.22 % $ 189,249 $ 1,056 2.23 % $ 177,964 $ 1,006 2.26 %

Tax-exempt securities

  77,909   715 3.67 %   77,073   704 3.65 %   78,290       721 3.68 %   76,795       693 3.61 %   75,570       685 3.63 %

Total investment securities

260,941 1,712 2.62 % 254,227 1,669 2.63 % 264,905 1,755 2.65 % 266,044 1,749 2.63 % 253,534 1,691 2.67 %
Fed funds sold 41,545 45 0.43 % 10,356 25 0.97 % 9,902 27 1.09 % 12,395 30 0.97 % 405 1 0.99 %

Int bearing deposits in other banks

2,107 3 0.57 % 11,961 16 0.54 % 12,522 20 0.64 % 20,909 20 0.38 % 21,601 25 0.46 %
Loans   856,798       10,351 4.83 %   836,931       9,798 4.68 %   809,806       9,313 4.60 %   779,418       9,035 4.64 %   757,036       8,933 4.72 %

Total Interest earning assets

1,161,391 12,111 4.17 % 1,113,475 11,508 4.13 % 1,097,135 11,115 4.05 % 1,078,766 10,834 4.02 % 1,032,576 10,650 4.13 %
Other assets   114,147   119,559   113,572   117,562   99,348
Total assets $ 1,275,538 $ 1,233,034 $ 1,210,707 $ 1,196,328 $ 1,131,924
 

Interest-bearing liabilities:

Deposits $ 844,101 $ 968 0.46 % $ 850,442 $ 962 0.45 % $ 843,771 $ 813 0.39 % $ 777,692 $ 701 0.36 % $ 752,098 $ 626 0.33 %
Repo 5,000 48 3.84 % 5,000 49 3.92 % 5,000 48 3.84 % 5,000 48 3.84 % 5,000 48 3.84 %
Fed funds purchased 191 1 2.09 % 1,926 5 1.04 % 2,894 8 1.11 % 782 2 1.02 % 1,984 6 1.21 %
FHLB & FTN 56,272 98 0.70 % 55,337 106 0.77 % 42,962 93 0.87 % 106,352 143 0.54 % 60,961 77 0.51 %

Subordinated debentures

  10,310       61 2.37 %   10,310       80 3.10 %   10,310       54 2.10 %   10,310       28 1.09 %   10,310       47 1.82 %

Total interest bearing liabilities

915,874   1,176 0.51 % 923,015   1,202 0.52 % 904,937   1,016 0.45 % 900,136   922 0.41 % 830,353   804 0.39 %
Other liabilities 199,878 198,889 200,004 191,914 200,326
Shareholders' equity   159,786   111,130   105,766   104,278   101,245

Total liabilities and shareholders' equity

$ 1,275,538 $ 1,233,034 $ 1,210,707 $ 1,196,328 $ 1,131,924
 

Net interest income (TE)

$ 10,935 3.66 % $ 10,306 3.61 % $ 10,099 3.60 % $ 9,912 3.61 % $ 9,846 3.74 %
 
Net interest margin 3.77 % 3.70 % 3.68 % 3.68 % 3.79 %
 

Core net interest margin*

3.61 % 3.66 % 3.67 % 3.66 % 3.77 %

 
 
 
FIRST BANCSHARES, INC and SUBSIDIARIES

Reconcilement of Non-GAAP Financial Measures (unaudited)

(in thousands except per share data)

           

Three Months Ended

Per Common Share Data

         

Dec 31,

2016

   

Sept 30,

2016

   

June 30,

2016

   

Mar 31,

2016

   

Dec 31,

2015

Book value per common share           $ 17.19       $ 17.60       $ 17.15       $ 16.58       $ 16.05  
Effect of intangible assets per share             1.73         2.87         2.89         2.91         2.95  
Tangible book value per common share           $ 15.46       $ 14.73       $ 14.26       $ 13.67       $ 13.10  
                                     
Diluted earnings per share           $ 0.26       $ 0.45       $ 0.47       $ 0.46       $ 0.42  
Effect of gain on debit card conversion, after-tax             -         -         -         (0.03 )       -  
Effect of gain on sale of bank premises, after-tax             -         -         -         -         -  
Effect of BAE, after-tax             -         -         -         -         (0.02 )
Effect of acquisition charges, after-tax             0.04         0.03         -         -         -  
Diluted earnings per share, operating           $ 0.30       $ 0.48       $ 0.47       $ 0.43       $ 0.40  
                                     
                                     
            Three Months Ended
Average Balance Sheet Data          

Dec 31,

2016

   

Sept 30,

2016

   

June 30,

2016

   

Mar 31,

2016

   

Dec 31,

2015

Total average assets

   

A

    $ 1,275,538       $ 1,233,034       $ 1,210,707       $ 1,196,328       $ 1,131,924  
                                     
Total equity           $ 159,786       $ 111,130       $ 105,766       $ 104,278       $ 101,245  
Less preferred equity             65,036         17,123         17,123         17,123         17,123  

Total common equity

   

B

      94,750         94,007         88,643         87,155         84,122  
Less intangible assets             15,638         15,660         15,758         15,858         14,608  

Tangible common equity

   

C

    $ 79,112       $ 78,347       $ 72,885       $ 71,297       $ 69,514  
                                     
                                     
            Three Months Ended
Core Net Interest Margin          

Dec 31,

2016

   

Sept 30,

2016

   

June 30,

2016

   

Mar 31,

2016

   

Dec 31,

2015

Net interest income (TE)           $ 10,935       $ 10,306       $ 10,099       $ 9,912       $ 9,846  
Less purchase accounting adjustments             429         92         20         22         90  

Net interest income, net of purchase accounting adj

   

D

    $ 10,506       $ 10,214       $ 10,079       $ 9,890       $ 9,756  
                                     
Total average earning assets           $ 1,161,391       $ 1,113,475       $ 1,097,135       $ 1,078,766       $ 1,032,576  
Add average balance of loan valuation discount             1,358         1,484         1,504         1,526         1,583  

Avg earning assets, excluding loan valuation discount

   

E

    $ 1,162,749       $ 1,114,959       $ 1,098,639       $ 1,080,292       $ 1,034,159  
                                     

Core net interest margin

   

D/E

      3.61 %       3.66 %       3.67 %       3.66 %       3.77 %
                                     
                                     
            Three Months Ended
Return Ratios          

Dec 31,

2016

   

Sept 30,

2016

   

June 30,

2016

   

Mar 31,

2016

   

Dec 31,

2015

Net earnings

   

F

    $ 2,307       $ 2,558       $ 2,649       $ 2,604       $ 2,358  
Dividends and accretion on preferred stock             195         86         86         85         85  
Net earnings available to common shareholders             2,112         2,472         2,563         2,519         2,273  
Gain on debit card conversion, after-tax             -         -         -         (189 )       -  
Gain on sale of premises and equipment, after-tax             -         -         -         -         -  
BAE, after-tax             -         -         -         -         (112 )
Acquisition charges, after-tax             282         146         -         -         -  

Net earnings available to common shareholders, oper

   

G

    $ 2,394       $ 2,618       $ 2,563       $ 2,330       $ 2,161  
                                     

Annualized return on avg assets

   

F/A

      .72 %       .83 %       .88 %       .87 %       .83 %

Annualized return on avg assets, oper

   

G/A

      .75 %       .85 %       .85 %       .78 %       .76 %

Annualized return on avg common equity, oper

   

G/B

      10.11 %       11.14 %       11.57 %       10.69 %       10.27 %

Annualized return on avg tangible common equity, oper

   

G/C

      12.10 %       13.37 %       14.07 %       13.07 %       12.43 %
                                     
Mortgage Department                                    
Net Interest Income after provision for loan losses           $ 48       $ 24       $ 59       $ 125       $ 150  
Loan fee income             1,204         1,399         1,184         645         245  
Other non-interest income             1         1         3         2         -  
Salaries and employee benefits             783         805         724         563         263  
Other non-interest expense             144         124         110         90         49  
Earnings before income taxes           $ 326       $ 495       $ 412       $ 119       $ 83  
 

Certain financial information included in the earnings release and the associated Condensed Consolidated Financial Information (unaudited) is determined by methods other than in accordance with GAAP.

We use non-GAAP measures because we believe they are useful for evaluating our financial condition with a meaningful measure for assessing our financial condition as well as comparison to financial results for prior periods. These results should not be viewed as a substitute for results determined in accordance with GAAP, and are necessarily comparable to non-GAAP performance measures that other companies may use.

The First Bancshares, Inc.
M. Ray "Hoppy" Cole, Chief Executive Officer, 601-268-8998
or
Dee Dee Lowery, Chief Financial Officer, 601-268-8998

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