Market Overview

The First Bancshares, Inc. Reports Quarterly Results and Declares Quarterly Dividend

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The First Bancshares, Inc. (NASDAQ:FBMS), holding company for The
First, A National Banking Association, (www.thefirstbank.com)
reported today a 90.7% increase ($2.2 million) in net income available
to common shareholders for the third quarter of 2017 compared to the
third quarter of 2016. Net income available to common shareholders
totaled $4.7 million for the third quarter of 2017 as compared to $2.5
million for the third quarter of 2016.

Fully diluted earnings per share for the third quarter of 2017 were
$0.51 as compared to $0.45 for the third quarter of 2016. Fully diluted
earnings per share for the third quarter of 2017 includes the issuance
of 3,563,380 in new common shares during the fourth quarter of 2016
related to the capital raise in October 2016.

Highlights for the Quarter:

  • Net income available to common shareholders for the third quarter of
    2017 compared to the third quarter of 2016 increased $2.2 million, or
    90.7% to $4.7 million.
  • Operating net earnings (net income available to common shareholders
    adjusted for merger related costs) for the third quarter were $4.7
    million compared to $4.0 million for the second quarter of 2017, an
    18.2% increase.
  • The Company exceeded a 1.00% annualized return on average assets.
  • The Company was awarded a $917,000 Financial Assistance Award from the
    Community Development Financial Assistance Program which is expected
    to be received early 2018.
  • Total loans increased $10 million during the quarter.

M. Ray "Hoppy" Cole, President & Chief Executive Officer, commented, "We
are proud of our third quarter results, particularly the substantial
improvement in profitability. We surpassed our goal of an annualized
ROAA of 1% and increased our net income 91% compared to the same quarter
in 2016.

"Our improved performance is a result of the integration of our two
recent acquisitions and continued growth throughout our markets. Our
team has worked extremely hard and we believe their efforts are
translating into substantially improved returns for our shareholders."

Balance Sheet

Total assets decreased $1.6 million to $1.788 billion at September 30,
2017 due to the reduction in deposits related to the seasonality of our
public fund portfolio.

Total loans were $1.198 billion at September 30, 2017 as compared to
$1.187 billion at June 30, 2017 and $854.4 million at September 30,
2016, representing increases of $10.3 million, or 0.9% and $343.8
million, or 40.2%, respectively. Increased loan volume of $10.3 million
for the third quarter was primarily distributed among all real estate
categories. The acquisitions of Gulf Coast Community Bank and Iberville
Bank accounted for $239.6 million of the total increase in loans as
compared to the same quarter in 2016.

Total deposits decreased $42.8 million or 2.8% for the quarter ended
September 30, 2017 compared to the same quarter of 2016. $25.4 million
of the decrease was related to NOW accounts of which $23.0 million is
attributable to the seasonality of the public fund deposits.
Non-interest bearing deposits decreased $11.4 million which was related
to normal balance fluctuations.

Asset Quality

Nonperforming assets totaled $14.6 million at September 30, 2017, an
increase of $1.3 million compared to $13.2 million at June 30, 2017 and
an increase of $3.3 million compared to September 30, 2016. The majority
of the increase is the result of acquired assets with associated fair
value marks. The ratio of the allowance for loan and leases losses
(ALLL) to total loans was 0.68% at September 30, 2017 and June 30, 2017.
Including valuation accounting adjustments on acquired loans, the total
valuation plus ALLL was 1.16% of total loans at September 30, 2017. The
ratio of annualized net charge-offs (recoveries) to total loans was
(0.005%) for the quarter ended September 30, 2017 compared to (0.003%)
for the quarter ended June 30, 2017.

Third Quarter 2017 vs. Third Quarter 2016 Earnings Comparison

Net income available to common shareholders for the third quarter of
2017 totaled $4.7 million compared to $2.5 million for the third quarter
of 2016, an increase of $2.2 million or 90.7%.

Revenues from consolidated operations increased $6.0 million in
quarterly comparison. Net interest income for the third quarter of 2017
was $14.9 million, an increase of $4.9 million when compared to third
quarter 2016. The increase is primarily due to interest income earned on
a higher volume of loans. Net interest margin for the third quarter of
2017 was 3.73% as compared to 3.62% for the same quarter in 2016.

Non-interest income increased $0.6 million in quarterly comparison for
the third quarter of 2017 as compared to the third quarter of 2016 due
to increased service charges and interchange fee income.

Third quarter 2017 non-interest expense increased $2.5 million, or 26.3%
as compared to third quarter 2016. The majority of the increase is due
to higher compensation expense, occupancy expense and other non-interest
expense. Salaries increased $1.7 million of which $1.4 million resulted
from increased employment numbers as a result of the acquisitions. $0.6
million in occupancy and other non-interest expense was attributable to
the acquisitions.

Fully tax equivalent ("FTE") net interest income totaled $15.2 million
and $10.3 million for the third quarter of 2017 and 2016, respectively.
The FTE net interest income increased $4.9 million in the prior year
quarterly comparison primarily due to an increase in interest earned on
loans. Purchase accounting adjustments accounted for $24,000 of the
difference in net interest income for the third quarter comparisons.
Third quarter 2017 FTE net interest margin of 3.81% includes 3 basis
points related to purchase accounting adjustments.

Investment securities totaled $368.6 million, or 20.6% of total assets
at September 30, 2017, versus $251.7 million, or 19.9% of total assets
at September 30, 2016. The average volume of investment securities
increased $119.9 million in prior year quarterly comparison, primarily
as a result of the acquisitions. The average tax equivalent yield on
investment securities increased 2 basis points to 2.65% from 2.63% in
prior year quarterly comparison. The investment portfolio had a net
unrealized gain of $2.7 million at September 30, 2017 as compared to
$4.5 million at September 30, 2016.

The average yield on all earnings assets increased 12 basis points in
prior year quarterly comparison, from 4.13% for the third quarter of
2016 to 4.25% for the third quarter of 2017. This increase was offset
partially by an increase in average interest expense of 3 basis points
from 0.52% for the third quarter of 2016 to 0.55% for the third quarter
of 2017.

Third Quarter 2017 vs Second Quarter 2017 Earnings Comparison

Net income available to common shareholders for the third quarter of
2017 totaled $4.7 million compared to net income available to common
shareholders of $2.4 million in sequential quarter comparison. Operating
net earnings $0.7 million, or 18.2%, compared to operating net earnings
of $4.0 million for the second quarter of 2017.

Net interest income for the third quarter of 2017 was $14.9 million. FTE
net interest income increased $0.1 million to $15.2 million from $15.1
million in sequential-quarter comparison. The increase was due primarily
to increased loan volume. Interest income from purchase accounting
adjustments remained flat in sequential quarter comparison.

The average yield on all earnings assets remained unchanged in
sequential-quarter comparison at 4.25%.

Non-interest income decreased $0.1 million in sequential-quarter
comparison resulting from slight decreases in service charges and
interchange fee income offset by an increase in mortgage income.

Non-interest expense decreased $3.2 million in sequential-quarter
comparison, which reflects decreases in salaries and employee benefits,
other professional services and other non-interest expense. $2.7 million
in merger-related costs were included in other professional services and
other non-interest expenses for the second quarter of 2017.

Year to Date Earnings Comparison

In year-over-year comparison, net income available to common
shareholders increased $0.6 million, or 8.6%, from $7.6 million at
September 30, 2016 to $8.2 million at September 30, 2017 which included
one-time merger related charges of $6.3 million. Operating net earnings
for the first nine months of 2017 totaled $12.1 million compared to $7.5
million for the same period in 2016, an increase of $4.6 million or
61.6%. Net interest income increased $14.3 million in year-over-year
comparison as interest income earned on a higher volume of loans
attributed to this overall increase.

Non-interest income increased $2.3 million in year-over-year comparison
mainly consisting of increases in mortgage income of $0.2 million,
service charges of $0.8 million and interchange fee income of $0.8
million.

Non-interest expense increased $16.3 million in year-over-year
comparison primarily resulting from increases in salaries and benefits
of $6.9 million, of which $5.4 million relates to the acquisitions, as
well as $6.3 million in one-time merger related charges.

Declaration of Cash Dividend

The Company announced that its Board of Directors declared a cash
dividend in the amount of $0.0375 per share to be paid on its common
stock on November 22, 2017 to shareholders of record as of the close of
business on November 3, 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,
Alabama and Florida. 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.

Non-GAAP Financial Measures

Our accounting and reporting policies conform to generally accepted
accounting principles ("GAAP") in the United States and prevailing
practices in the banking industry. However, certain non-GAAP measures
are used by management to supplement the evaluation of our performance.
This press release includes operating net earnings, operating earnings
per share, total tangible common equity, tangible book value per common
share, fully taxable-equivalent net interest income and certain ratios
derived from non-GAAP financial measures. The Company believes that the
non-GAAP financial measures included in this press release allow
management and investors to understand and compare results in a more
consistent manner for the periods presented in this press release.
Non-GAAP financial measures should be considered supplemental and not a
substitute for the Company's results reported in accordance with GAAP
for the periods presented, and other bank holding companies may define
or calculate these measures differently. These non-GAAP financial
measures should not be considered in isolation and do not purport to be
an alternative to net income, earnings per share, book value, net
interest income, or other GAAP measures as a measure of operating
performance. A reconciliation of these non-GAAP financial measures to
the most comparable GAAP measure is provided in this press release
following the Condensed Consolidated Financial Information (unaudited).

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 consolidated Company to conduct
business combinations or new operations. These and other factors that
could cause results to differ materially from those described in the
forward-looking statements, as well as a discussion of the risks and
uncertainties that may affect our business, can be found in our Annual
Report on Form 10-K and in other filings we make with the Securities and
Exchange Commission, which are available on the SEC's website, http://www.sec.gov.
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.

 
FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS DATA  

Quarter
Ended
9/30/17

 

Quarter
Ended
6/30/17

 

Quarter
Ended
3/31/17

 

Quarter
Ended
12/31/16

 

Quarter
Ended
9/30/16

Total Interest Income   $ 16,708   $ 16,464   $15,753   $ 11,868   $ 11,269
Total Interest Expense   1,773   1,629   1,585   1,176   1,202
Net Interest Income   14,935   14,835   14,168   10,692   10,067
FTE net interest income*   15,232   15,140   14,470   10,935   10,306
Provision for loan losses   90   248   46   88   143
Non-interest income   3,658   3,757   3,391   2,705   3,099
Non-interest expense   11,888   15,070   16,095   10,132   9,416
Earnings before income taxes   6,615   3,274   1,418   3,177   3,607
Income tax expense   1,901   908   296   870   1,049
Net income   4,714   2,366   1,122   2,307   2,558
Dividends and accretion on preferred stock   -   -   -   195   86
Net income available to common shareholders   $ 4,714   $ 2,366   $ 1,122   $ 2,112   $ 2,472
                     
PER COMMON SHARE DATA                    
Basic earnings per share   $ 0.52   $ 0.26   $ 0.12   $ 0.39   $ 0.46
Diluted earnings per share   0.51   0.26   0.12   0.26   0.45
Diluted earnings per share, operating*   0.51   0.44   0.37   0.30   0.48
Quarterly dividends per share   .0375   .0375   .0375   .0375   .0375
Book value per common share at end of period   18.24   17.80   17.39   17.19   17.60
Tangible common book value at period end*   15.48   15.00   14.61   15.46   14.73
Market price at end of period   30.15   27.60   28.50   27.50   19.10
Shares outstanding at period end   9,153,407   9,152,657   9,144,412   8,991,397   5,428,017
Weighted average shares outstanding:                    
Basic   9,152,674   9,145,179   9,123,271   5,463,651   5,425,567
Diluted   9,224,481   9,206,378   9,182,711   8,500,305   5,475,785
                     
AVERAGE BALANCE SHEET DATA                    
Total assets   $1,772,402   $1,751,092   $1,713,438   $1,275,538   $1,233,034
Loans and leases   1,185,493   1,155,699   1,117,135   856,798   836,931
Total deposits   1,512,616   1,527,119   1,460,787   1,037,877   1,044,428
Total common equity   164,455   155,667   157,184   94,750   94,007
Total tangible common equity*   139,013   130,789   134,809   79,112   78,347
Total equity   164,455   155,667   157,184   159,786   111,130
                     
SELECTED RATIOS                    
Annualized return on avg assets   1.06%   .54%   .26%   .72%   .83%
Annualized return on avg assets, operating*   1.07%   .92%   .79%   .75%   .85%
Annualized return on avg common equity, operating*   11.54%   10.31%   8.61%   10.11%   11.14%
Annualized return on avg tangible common equity, oper*   13.65%   12.27%   10.04%   12.10%   13.37%
Average loans to average deposits   78.37%   75.68%   76.47%   82.55%   80.13%
FTE Net Interest Margin*   3.81%   3.84%   3.85%   3.77%   3.70%
Efficiency Ratio   62.93%   79.75%   90.11%   74.28%   70.24%
Efficiency Ratio, operating*   62.68%   65.56%   69.97%   71.40%   68.70%
                     
                     
CREDIT QUALITY                    
Allowance for loan losses (ALLL) as a % of total loans   .68%   .68%   .69%   .87%   .88%
Nonperforming assets to tangible equity + ALLL   9.71%   9.10%   9.39%   6.74%   10.81%
Nonperforming assets to total loans + ORE   1.21%   1.11%   1.16%   1.14%   1.31%
Annualized QTD net charge-offs (recoveries) to total loans   (0.005%)   (0.003%)   (0.09%)   0.03%   (0.04%)

*See reconciliation of Non-GAAP financial measures

 
 
FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

BALANCE SHEET  

Sept 30,
2017

 

June 30,
2017

 

Mar 31,
2017

 

Dec 31,
2016

 

Sept 30,
2016

Assets                    
Cash and cash equivalents   $ 93,317   $ 92,596   $ 148,511   $ 62,119   $ 70,114
Securities available-for-sale   353,035   366,490   352,851   243,206   236,168
Securities held-to-maturity   6,000   6,000   6,000   6,000   6,000
Other investments   9,556   9,544   7,647   6,593   9,516
Total investment securities   368,591   382,034   366,498   255,799   251,684
Loans held for sale   4,588   5,907   5,473   5,880   9,437
Total loans   1,198,193   1,187,936   1,139,987   867,054   854,366
Allowance for loan losses   (8,175)   (8,070)   (7,813)   (7,510)   (7,481)
Loans, net   1,190,018   1,179,866   1,132,174   859,544   846,885
Premises and equipment   46,203   44,766   45,438   34,624   33,427
Other Real Estate   7,855   8,072   7,579   6,008   4,670
Goodwill and other intangibles   25,325   25,615   25,379   15,507   15,596
Other assets   52,079   50,766   51,769   37,886   34,825
Total assets   $1,787,976   $1,789,622   $1,783,204   $1,277,367   $1,266,638
                     
Liabilities and Shareholders' Equity                    
Non-interest bearing deposits   $ 308,050   $ 319,494   $ 323,442   $ 202,478   $196,786
Interest-bearing deposits   1,199,941   1,231,305   1,245,055   836,713   875,003
Total deposits   1,507,991   1,550,799   1,568,497   1,039,191   1,071,789
Borrowings   94,321   59,367   39,411   69,000   68,000
Subordinated debentures   10,310   10,310   10,310   10,310   10,310
Other liabilities   8,374   6,267   5,981   4,339   3,881
Total liabilities   1,620,996   1,626,743   1,624,199   1,122,840   1,153,980
Total shareholders' equity   166,980   162,879   159,005   154,527   112,658
Total liabilities and shareholders' equity   $1,787,976   $1,789,622   $1,783,204   $1,277,367   $1,266,638
         
 
FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT     Year to Date
      2017       2016
Interest Income:                
Loans, including fees       $ 41,916       $ 28,011
Investment securities       6,506       4,509
Accretion of purchase accounting adjustments       167       134
Other interest income       337       82
Total interest income       48,926       32,736
Interest Expense:                
Deposits       3,998       2,475
Borrowings       980       502
Subordinated debentures       171       162
Accretion of purchase accounting adjustments       (162)       -
Total interest expense       4,987       3,139
Net interest income       43,939       29,597
Provision for loan losses       384       538
Net interest income after provision for loan losses       43,555       29,059
Non-interest Income:                
Service charges on deposit accounts       2,692       1,847
Mortgage Income       3,400       3,228
Interchange Fee Income       2,797       1,991
Gain (loss) on securities, net       (19)       129
Gain on sale of premises and equipment       -       -
BEA award, net       -       -
Other charges and fees       1,937       1,347
Total non-interest income       10,807       8,542
Non-interest expense:                
Salaries and employee benefits       23,070       16,194
Occupancy expense       4,108       3,392
FDIC premiums       887       755
Marketing       218       280
Amortization of core deposit intangibles       491       294
Other professional services       6,179       1,013
Other non-interest expense       8,100       4,802
Total Non-interest expense       43,053       26,730
Earnings before income taxes       11,309       10,871
Income tax expense       3,107       3,060
Net income       8,202       7,811
Dividends and accretion on preferred stock       -       257
Net income available to common shareholders       $ 8,202       $ 7,554
Non-operating items*       3,937       (43)
Net earnings available to common shareholders, operating*       $ 12,139       $ 7,511
                 
                 
Basic earnings per common share       $ 0.90       $ 1.39
Diluted earnings per common share       $ 0.89       $ 1.38
Diluted earnings per common share, operating*       $ 1.32       $ 1.38
*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   Three Months Ended
  9/30/17   6/30/17   3/31/17   12/31/16   9/30/16
Interest Income:                    
Loans, including fees   $ 14,357   $ 14,114   $ 13,444   $ 9,922   $ 9,706
Investment securities   2,180   2,197   2,129   1,472   1,446
Accretion of purchase accounting adjustments   55   56   56   429   92
Other interest income   116   97   124   45   25
Total interest income   16,708   16,464   15,753   11,868   11,269
Interest Expense:                    
Deposits   1,436   1,364   1,198   968   962
Borrowings   357   259   364   148   160
Subordinated debentures   41   67   63   60   80
Accretion of purchase accounting adjustments   (61)   (61)   (40)   -   -
Total interest expense   1,773   1,629   1,585   1,176   1,202
Net interest income   14,935   14,835   14,168   10,692   10,067
Provision for loan losses   90   248   46   88   143
Net interest income after provision for loan losses   14,845   14,587   14,122   10,604   9,924
                     
Non-interest Income:                    
Service charges on deposit accounts   902   922   868   605   606
Mortgage Income   1,276   1,208   916   1,204   1,399
Interchange Fee Income   935   959   903   683   666
Gain (loss) on securities, net   (10)   (1)   (8)   (3)   -
Gain on sale of premises and equipment   -   -   -   -   -
BEA award, net   -   -   -   -   -
Other charges and fees   555   669   712   216   428
Total non-interest income   3,658   3,757   3,391   2,705   3,099
                     
Non-interest expense:                    
Salaries and employee benefits   7,327   7,762   7,981   5,943   5,645
Occupancy expense   1,390   1,348   1,370   1,222   1,209
FDIC premiums   355   331   201   265   254
Marketing   50   99   69   122   76
Amortization of core deposit intangibles   160   182   149   88   100
Other professional services   367   2,802   3,010   793   461
Other non-interest expense   2,239   2,546   3,315   1,699   1,671
Total Non-interest expense   11,888   15,070   16,095   10,132   9,416
Earnings before income taxes   6,615   3,274   1,418   3,177   3,607
Income tax expense   1,901   908   296   870   1,049
Net income   4,714   2,366   1,122   2,307   2,558
Dividends and accretion on preferred stock   -   -   -   195   86
Net income available to common shareholders   $ 4,714   $ 2,366   $ 1,122   $ 2,112   $ 2,472
                     
                     
Basic earnings per common share   $ 0.52   $ 0.26   $ 0.12   $ 0.39   $ 0.46
Diluted earnings per common share   $ 0.51   $ 0.26   $ 0.12   $ 0.26   $ 0.45
Diluted earnings per common share, operating*   $ 0.51   $ 0.44   $ 0.37   $ 0.30   $ 0.48

*See reconciliation of Non-GAAP financial measures

 
 

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

COMPOSITION OF LOANS  

Sept 30,
2017

 

Percent
of Total

 

June 30,
2017

 

Mar 31,
2017

 

Dec 31,
2016

 

Sept 30,
2016

 

Percent
of Total

Commercial, financial and agricultural   $ 164,577   13.7%   $ 167,799   $ 156,786   $ 129,423   $ 121,963   14.1%
Real estate – construction   171,609   14.3%   169,971   163,249   109,394   104,644   12.1%
Real estate – commercial   456,110   37.9%   448,218   426,151   314,359   307,963   35.7%
Real estate – residential   377,308   31.4%   372,815   360,964   289,640   296,587   34.3%
Lease Financing Receivable   2,008   0.2%   2,189   2,196   2,204   2,211   0.3%
Obligations of States & subdivisions   5,892   0.5%   5,775   5,383   6,698   6,861   0.8%
Consumer   20,689   1.7%   21,169   25,258   15,336   14,137   1.6%
Loans held for sale   4,588   0.4%   5,907   5,473   5,880   9,437   1.1%
Total loans   $1,202,781   100%   $1,193,843   $1,145,460   $872,934   $863,803   100%
                             
                             
COMPOSITION OF DEPOSITS  

Sept 30,
2017

 

Percent
of Total

 

June 30,
2017

 

Mar 31,
2017

 

Dec 31,
2016

 

Sept 30,
2016

 

Percent
of Total

Noninterest bearing   $308,050   20.4%   $319,494   $323,442   $202,478   $196,786   18.4%
NOW and other   639,802   42.5%   665,250   661,300   430,903   465,404   43.3%
Money Market/Savings   292,592   19.4%   296,705   304,292   182,793   187,228   17.5%
Time Deposits of less than $250,000   209,714   13.9%   203,254   212,352   162,797   163,739   15.3%
Time Deposits of $250,000 or more   57,833   3.8%   66,096   67,111   60,220   58,632   5.5%
Total Deposits   $1,507,991   100%   $1,550,799   $1,568,497   $1,039,191   $1,071,789   100%
                             
                             
ASSET QUALITY DATA  

Sept 30,
2017

     

June 30,
2017

 

Mar 31,
2017

 

Dec 31,
2016

 

Sept 30,
2016

   
Nonaccrual loans   $ 4,852       $ 3,979   $ 4,955   $3,265   $ 5,798    
Loans past due 90 days and over   1,436       760   345   198   420    
Total nonperforming loans   6,288       4,739   5,300   3,463   6,218    
Other real estate   7,855       8,072   7,579   6,008   4,670    
Nonaccrual securities   408       408   408   408   408    
Total nonperforming assets   $14,551       $13,219   $13,287   $9,879   $11,296    
                             
Nonperforming assets to total assets   .81%       .74%   .75%   .77%   .89%    
Nonperforming assets to total loans + ORE   1.21%       1.11%   1.16%   1.14%   1.31%    
ALLL to nonperforming loans   130.01%       170.29%   147.42%   216.86%   120.31%    
ALLL to total loans   .68%       .68%   .69%   .87%   .88%    
                             
Quarter-to-date net charge-offs (recs)   $ (15)       $ (9)   $ (257)   $ 58   $ (79)    
Annualized QTD net chg/offs (recs) to loans   (0.005%)       (0.003%)   (0.09%)   0.03%   (0.04%)    
             
 
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 September 30, 2017     June 30, 2017     March 31, 2017     December 31, 2016     September 30, 2016
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 $ 280,441 $ 1,601 2.28% $ 282,235 $ 1,605 2.27% $ 244,997 $ 1,534 2.50% $ 183,032 $ 997 2.18% $ 177,154 $ 965 2.18%

Tax-exempt securities

93,716   876 3.74% 95,272   897 3.77% 86,991   895 4.12% 77,909   715 3.67% 77,073   704 3.65%

Total investment securities

374,157 2,477 2.65% 377,507 2,502 2.65% 331,988 2,429 2.93% 260,941 1,712 2.62% 254,227 1,669 2.63%
Fed funds sold 36,591 113 1.24% 39,048 95 0.97% 50,700 124 0.98% 41,545 45 0.43% 10,356 25 0.97%

Int bearing deposits in other banks

3,463 3 0.35% 5,214 2 0.15% 5,000 2 0.16% 2,107 3 0.57% 11,961 16 0.54%
Loans 1,185,493   14,412 4.86% 1,155,699   14,170 4.90% 1,117,110   13,500 4.83% 856,798   10,351 4.83% 836,931   9,798 4.68%

Total Interest earning assets

1,599,704 17,005 4.25% 1,577,468 16,769 4.25% 1,504,798 16,055 4.27% 1,161,391 12,111 4.17% 1,113,475 11,508 4.13%
Other assets 172,698 173,624 208,640 114,147 119,559
Total assets $ 1,772,402 $ 40,054 $ 1,751,092 $ 1,713,438 $ 1,275,538 $ 1,233,034
 

Interest-bearing liabilities:

Deposits $ 1,204,614 $ 1,375 0.46% $ 1,211,959 $ 1,303 0.43% $ 1,149,287 $ 1,158 0.40% $ 844,101 $ 968 0.46% $ 850,442 $ 962 0.45%
Repo 4,891 38 3.11% 5,000 48 3.84% 5,000 48 3.84% 5,000 48 3.84% 5,000 49 3.92%
Fed funds purchased 3,816 19 1.99% 1,906 8 1.68% 975 2 0.82% 191 1 2.09% 1,926 5 1.04%
FHLB & FTN 68,041 300 1.76% 40,765 203 1.99% 79,581 314 1.58% 56,272 99 0.70% 55,337 106 0.77%

Subordinated debentures

10,310   41 1.59% 10,310   67 2.60% 10,310   63 2.44% 10,310   60 2.33% 10,310   80 3.10%

Total interest bearing liabilities

1,291,672 1,773 0.55% 1,269,940 1,629 0.51% 1,245,153 1,585 0.51% 915,874 1,176 0.51% 923,015 1,202 0.52%
Other liabilities 316,275 325,485 311,101 199,878 198,889
Shareholders' equity 164,455 155,667 157,184 159,786 111,130

Total liabilities and shareholders' equity

$ 1,772,402 $ 1,751,092 $ 1,713,438 $ 1,275,538 $ 1,233,034
 

Net interest income (FTE)*

$ 15,232 3.70% $ 15,140 3.74% $ 14,470 3.76% $ 10,935 3.66% $ 10,306 3.61%
 
Net interest margin (FTE)* 3.81% 3.84% 3.85% 3.77% 3.70%
 

Core net interest margin*

3.78% 3.81% 3.82% 3.61% 3.66%
 

*See reconciliation of Non-GAAP financial measures

 
         
FIRST BANCSHARES, INC and SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measures (unaudited)

(in thousands except per share data)

 

     

Three Months Ended

Per Common Share Data

     

Sept 30,
2017

 

June 30,
2017

 

Mar 31,
2017

 

Dec 31,
2016

 

Sept 30,
2016

Book value per common share       $ 18.24   $ 17.80   $ 17.39   $ 17.19   $ 17.60
Effect of intangible assets per share       2.76   2.80   2.78   1.73   2.87
Tangible book value per common share       $ 15.48   $ 15.00   $ 14.61   $ 15.46   $ 14.73
                         
                         
Diluted earnings per share       $ 0.51   $ 0.26   $ 0.12   $ 0.26   $ 0.45
Effect of acquisition charges       -   0.29   0.39   0.05   0.04
Taxes on acquisition charges       -   (0.11)   (0.14)   (0.01)   (0.01)
Diluted earnings per share, operating       $ 0.51   $ 0.44   $ 0.37   $ 0.30   $ 0.48
                         
                         
      Year to Date
          2017       2016    
Diluted earnings per share           $ 0.89       $ 1.38    
Effect of gain on debit card conversion           -       (0.05)    
Effect of acquisition charges           0.68       0.04    
Tax           (0.25)       0.01    
Diluted earnings per share, operating           $ 1.32       $ 1.38    
                         
                         
  Year to Date
          2017       2016    
Net income available to common shareholders           $ 8,202       $ 7,554    
Effect of gain on debit card conversion           -       (252)    
Effect of acquisition charges           6,327       207    
Tax           (2,390)       2    
Net earnings available to common shareholders, operating           $ 12,139       $ 7,511    
                         
                         
        Three Months Ended
Average Balance Sheet Data      

Sept 30,
2017

 

June 30,
2017

 

Mar 31,
2017

 

Dec 31,
2016

 

Sept 30,
2016

Total average assets

 

A

  $1,772,402   $1,751,092   $1,713,438   $1,275,538   $1,233,034

Total average earning assets

 

B

  $1,599,704   $1,577,468   $1,504,798   $1,161,391   $1,113,475
                         
Total equity       $ 164,455   $ 155,667   $ 157,184   $ 159,786   $ 111,130
Less preferred equity       -   -   -   65,036   17,123

Total common equity

 

C

  164,455   155,667   157,184   94,750   94,007
Less intangible assets       25,442   24,878   22,375   15,638   15,660

Tangible common equity

 

D

  $ 139,013   $ 130,789   $ 134,809   $ 79,112   $ 78,347
                         
                         
                         
                         
                         
        Three Months Ended
Net Interest Income Fully Tax Equivalent      

Sept 30,
2017

 

June 30,
2017

 

Mar 31,
2017

 

Dec 31,
2016

 

Sept 30,
2016

Net interest income

 

E

  $ 14,935   $ 14,835   $ 14,168   $ 10,692   $ 10,067
Tax-exempt investment income       (579)   (592)   (593)   (472)   (465)
Taxable investment income       876   897   895   715   704

Net Interest Income Fully Tax Equivalent

 

F

  $ 15,232   $ 15,140   $ 14,470   $ 10,935   $ 10,306
                         

Annualized Net Interest Margin

 

E/B

  3.73%   3.76%   3.77%   3.68%   3.62%

Annualized Net Interest Margin, Fully Tax Equivalent

 

F/B

  3.81%   3.84%   3.85%   3.77%   3.70%
                         
                         
        Three Months Ended
Core Net Interest Margin      

Sept 30,
2017

 

June 30,
2017

 

Mar 31,
2017

 

Dec 31,
2016

 

Sept 30,
2016

Net interest income (FTE)       $ 15,232   $ 15,140   $ 14,470   $ 10,935   $ 10,306
Less purchase accounting adjustments       116   117   96   429   92

Net interest income, net of purchase accounting adj

 

G

  $ 15,116   $ 15,023   $ 14,374   $ 10,506   $ 10,214
                         
Total average earning assets       $1,599,704   $1,577,468   $1,504,798   $1,161,391   $1,113,475
Add average balance of loan valuation discount       1,640   1,721   2,159   1,358   1,484

Avg earning assets, excluding loan valuation discount

 

H

  $1,601,344   $1,579,189   $1,506,957   $1,162,749   $1,114,959
                         

Core net interest margin

 

G/H

  3.78%   3.81%   3.82%   3.61%   3.66%
                         
                         
        Three Months Ended
Efficiency Ratio      

Sept 30,
2017

 

June 30,
2017

 

Mar 31,
2017

 

Dec 31,
2016

 

Sept 30,
2016

Operating Expense                        
Total non-interest expense       $ 11,888   $ 15,070   $ 16,095   $ 10,132   $ 9,416
Pre-tax non-operating expenses       (47)   (2,682)   (3,598)   (393)   (207)

Adjusted Operating Expense

 

I

  $ 11,841   $ 12,388   $ 12,497   $ 9,739   $ 9,209
                         
Operating Revenue                        
Net interest income, FTE       $ 15,232   $ 15,140   $ 14,470   $ 10,935   $ 10,306
Total non-interest income       3,658   3,757   3,391   2,705   3,099
Pre-tax non-operating items       -   -   -   -   -

Adjusted Operating Revenue

 

J

  $ 18,890   $ 18,897   $ 17,861   $ 13,640   $ 13,405
                         

Efficiency Ratio, operating

 

I/J

  62.68%   65.56%   69.97%   71.40%   68.70%
                         
        Three Months Ended
Return Ratios      

Sept 30,
2017

 

June 30,
2017

 

Mar 31,
2017

 

Dec 31,
2016

 

Sept 30,
2016

Net income

      $ 4,714   $ 2,366   $ 1,122   $ 2,307   $ 2,558
Dividends and accretion on preferred stock  

K

  -   -   -   195   86
Net income available to common shareholders       4,714   2,366   1,122   2,112   2,472
Acquisition charges       47   2,682   3,598   402   207
Tax on acquisition charges       (18)   (1,035)   (1,337)   (120)   (61)

Net earnings available to common shareholders, oper

 

L

  $ 4,743   $ 4,013   $ 3,383   $ 2,394   $ 2,618
                         

Annualized return on avg assets

 

K/A

  1.06%   .54%   .26%   .72%   .83%

Annualized return on avg assets, oper

 

L/A

  1.07%   .92%   .79%   .75%   .85%

Annualized return on avg common equity, oper

 

L/C

  11.54%   10.31%   8.61%   10.11%   11.14%

Annualized return on avg tangible common equity, oper

 

L/D

  13.65%   12.27%   10.04%   12.10%   13.37%
                         
                         
Mortgage Department                        
Net Interest Income after provision for loan losses       $ 249   $ 233   $ 253   $ 48   $ 24
Loan fee income       1,276   1,208   916   1,204   1,399
Other non-interest income       -   -   -   1   1
Salaries and employee benefits       882   946   806   783   805
Other non-interest expense       102   99   114   144   124
Earnings before income taxes       $ 541   $ 396   $ 249   $ 326   $ 495

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