Market Overview

The First Bancshares, Inc. Reports a 252.7% Increase in Net Income Available to Common Shareholders and a 58.4% Increase in Operating Net Earnings for the First Quarter Ended March 31, 2018; Declares Quarterly Dividend of $0.05

Share:

The First Bancshares, Inc. (NASDAQ:FBMS), holding company for The
First, A National Banking Association, (www.thefirstbank.com)
reported today net income available to common shareholders of $4.0
million for the first quarter 2018, an increase of $2.8 million or
252.7%, compared to $1.1 million for the first quarter 2017. Operating
net earnings increased 58.4% ($2.0 million) for the first quarter
comparison, totaling $5.4 million for first quarter 2018 as compared to
$3.4 million for first quarter 2017. Operating net earnings excludes
merger-related costs of $1.4 for the first quarter of 2018 and $2.3
million for the first quarter of 2017, net of tax.

For the first quarter of 2018, fully diluted earnings per share were
$0.34, compared to $0.12 for the first quarter of 2017. Excluding the
impact of the merger-related costs, fully diluted operating earnings per
share for the first quarter 2018 were $0.46 as compared to $0.37 for
2017. Fully diluted earnings per share for 2018 include the issuance of
2,012,500 shares of our common stock during the fourth quarter of 2017.

Highlights for the Quarter:

  • On March 1st, 2018, the Company closed as planned the
    acquisition of Southwest Banc Shares, Inc., and its wholly-owned
    subsidiary, First Community Bank, which added 9 locations serving
    southwest Alabama.
  • During the quarter, the Company received regulatory approval and
    Sunshine Financial, Inc. received shareholder approval and the
    acquisition of Sunshine Financial and Sunshine Community Bank, its
    wholly-owned subsidiary, closed as planned on April 1st adding
    5 locations serving Tallahassee.
  • Excluding the First Community Bank acquisition, loans increased $34.5
    million or 2.8% during the first quarter of 2018.
  • Excluding the First Community Bank acquisition, deposits increased
    $163.7 million or 11.1% during the first quarter of 2018.
  • Sold $9 million of criticized and classified loans acquired from First
    Community Bank.

M. Ray "Hoppy" Cole, President & Chief Executive Officer, commented,
"Quarter One 2018 was another outstanding quarter for our Company,
characterized by solid organic growth and significant improvement in
operating earnings.

"We welcome our new team members, clients and shareholders from First
Community and Sunshine. We are thrilled to join forces with them and
look forward to growing our market share in the Gulf South."

Balance Sheet

Consolidated assets increased $486.2 million to $2.3 billion at March
31, 2018. $400.8 million of the increase can be attributed to the
acquisition of First Community Bank.

Total loans were $1.517 billion at March 31, 2018, as compared to $1.225
billion at December 31, 2017, and $1.140 billion at March 31, 2017,
representing increases of $291.3 million or 23.8%, and $376.6 million or
33.0%, respectively. The acquisition of First Community Bank accounted
for $274.7 million of the total increase in loans as compared to the
fourth and first quarter of 2017. Loans excluding those purchased from
First Community Bank grew $34.5 million or 2.8% during the first quarter
of 2018.

  • Loan Sale - First Community Bank had approximately $10 million
    of criticized and classified loans. At closing, these problem assets
    were recorded at fair value and approximately $9 million of the $10
    million portfolio was sold to a third party. This transaction removed
    a majority of the previously identified problem loans from First
    Community Bank's portfolio and resulted in a total acquired loan
    portfolio balance of $265 million with a fair value credit mark of
    approximately 1.5%.

Total deposits were $1.992 billion at March 31, 2018, as compared to
$1.471 billion at December 31, 2017, and $1.568 billion at March 31,
2017, representing increases of $521.1 million or 35.4%, and $423.1
million or 27.0%, respectively. The acquisition of First Community Bank
accounted for $357.4 million of the total increase in deposits as
compared to the fourth and first quarter of 2017. The sequential-quarter
increase in non-acquired deposits was primarily due to an increase in
NOW accounts of $95.2 million, which is attributable to the seasonality
of the public fund deposits.

Asset Quality

Nonperforming assets totaled $14.8 million at March 31, 2018, an
increase of $1.3 million compared to $13.5 million at December 31, 2017
and an increase of $1.5 million compared to March 31, 2017. The majority
of the increase in same quarter comparison was in the past due 90 days
and over category. The ratio of the allowance for loan and leases losses
(ALLL) to total loans was 0.57% at March 31, 2018 and 0.68% at December
31, 2017. Including valuation accounting adjustments on acquired loans,
the total valuation plus ALLL was 1.16% of total loans at March 31,
2018. The ratio of annualized net charge-offs (recoveries) to total
loans was (0.02%) for the quarter ended March 31, 2018 compared to
0.003% for the quarter ended December 31, 2017.

First Quarter 2018 vs. First Quarter 2017 Earnings Comparison

Net income available to common shareholders for the first quarter of
2018 totaled $4.0 million compared to $1.1 million for the first quarter
of 2017, an increase of $2.8 million or 252.7%.

Operating net earnings for the first quarter of 2018 totaled $5.4
million compared to $3.4 million for the first quarter of 2017, an
increase of $2.0 million or 58.4%. Operating net earnings exclude the
merger-related costs discussed above.

Revenues from consolidated operations increased $3.1 million in
quarterly comparison. Net interest income for the first quarter of 2018
was $16.4 million, an increase of $2.2 million when compared to the
first quarter of 2017. The increase is primarily due to interest income
earned on a higher volume of loans. Net interest margin for the first
quarter of 2018 was 3.62% as compared to 3.77% for the same quarter in
2017.

Non-interest income increased $0.1 million for the first quarter of 2018
as compared to the first quarter of 2017 due to increased service
charges and interchange fee income.

First quarter 2018 non-interest expense decreased $1.5 million, or 9.3%
as compared to the first quarter of 2017. Excluding acquisition charges
of $1.8 million and $3.6 million for first quarter 2018 and 2017,
respectively, non-interest expense increased $0.3 million as compared to
first quarter 2017, attributed to the acquisition.

Fully tax equivalent ("FTE") net interest income totaled $16.6 million
and $14.5 million for the first quarter of 2018 and 2017, respectively.
FTE net interest income increased $2.1 million in the prior year
quarterly comparison primarily due to an increase in interest earned on
loans. Purchase accounting adjustments accounted for $37,000 of the
difference in net interest income for the first quarter comparisons.
First quarter 2018 FTE net interest margin of 3.67% includes 2 basis
points related to purchase accounting adjustments.

Investment securities totaled $441.9 million, or 19.2% of total assets
at March 31, 2018, versus $366.5 million, or 20.6% of total assets at
March 31, 2017. The average volume of investment securities increased
$48.8 million in prior year quarterly comparison, primarily as a result
of the acquisitions. The average tax equivalent yield on investment
securities increased 11 basis points to 3.04% from 2.93% in prior year
quarterly comparison. The investment portfolio had a net unrealized loss
of $5.1 million at March 31, 2018 as compared to a net unrealized gain
of $0.6 million at March 31, 2017.

The average yield on all earnings assets decreased 8 basis points in
prior year quarterly comparison, from 4.27% for the first quarter of
2017 to 4.19% for the first quarter of 2018. Average interest expense
increased 16 basis points from 0.51% for the first quarter of 2017 to
0.67% for the first quarter of 2018. Cost of deposits averaged 44 bps
for the first quarter of 2018 compared to 32 bps for the first quarter
of 2017. Public funds are up $72.9 million when comparing March 31, 2018
to March 31, 2017.

First Quarter 2018 vs Fourth Quarter 2017 Earnings Comparison

Net income available to common shareholders for the first quarter of
2018 increased $1.5 million or 63.9% compared to $2.4 million in the
fourth quarter of 2017.

Operating net earnings for the first quarter of 2018 compared to the
fourth quarter of 2017 increased $0.6 million or 13.3% from $4.7 million
for the fourth quarter of 2017 to $5.4 million for the first quarter of
2018.

Net interest income for the first quarter of 2018 was $16.4 million as
compared to $15.2 million for the fourth quarter of 2017, an increase of
$1.2 million. FTE net interest income increased $1.1 million to $16.6
million from $15.5 million in sequential-quarter comparison. The
increase was due primarily to increased loan volume. Interest income
from purchase accounting adjustments decreased slightly in sequential
quarter comparison.

The average yield on all earnings assets decreased in sequential-quarter
comparison from 4.25% to 4.19%. Average interest expense increased 7
basis points from 0.60% for the fourth quarter of 2017 to 0.67% for the
first quarter of 2018. Cost of deposits averaged 44 bps for the first
quarter of 2018 compared to 38 bps for the fourth quarter of 2017.
Public funds are up $131.2 million when comparing March 31, 2018 to
December 31, 2017.

Non-interest income decreased $0.1 million in sequential-quarter
comparison resulting from decreased mortgage income of $0.3 million,
offset by increases in service charges on deposit accounts and
interchange fee income of $0.2 million.

Non-interest expense increased $2.2 million in sequential-quarter
comparison, which reflects increases in salaries and employee benefits
and other professional services. Merger-related costs of $1.8 million
were included in other professional services and other non-interest
expense for the first quarter of 2018.

Declaration of Cash Dividend

The Company announced that its Board of Directors declared a cash
dividend in the amount of $0.05 per share, to be paid on its common
stock on May 22, 2018 to shareholders of record as of the close of
business on May 7, 2018.

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 the 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, fully tax equivalent net interest income, total tangible
common equity, tangible book value per common share and certain ratios
derived from these 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, net interest income,
book value or other GAAP financial 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; legislation or regulatory changes which
adversely affect the ability of the consolidated Company to conduct
business combinations or new operations; and risks related to the
acquisitions of Southwest Banc Shares, Inc. and Sunshine Financial,
Inc., including the risk that anticipated benefits from the transactions
are not realized in the time frame anticipated or at all as a result of
changes in general economic and market conditions or other unexpected
factors or events. 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
3/31/18

   

Quarter
Ended
12/31/17

   

Quarter
Ended
9/30/17

   

Quarter
Ended
6/30/17

   

Quarter
Ended
3/31/17

Total Interest Income     $ 18,758       $ 17,143       $ 16,708       $ 16,464       $ 15,753  
Total Interest Expense       2,378         1,922         1,773         1,629         1,585  
Net Interest Income       16,380         15,221         14,935         14,835         14,168  
FTE net interest income*       16,609         15,523         15,232         15,140         14,470  
Provision for loan losses       277         122         90         248         46  
Non-interest income       3,459         3,556         3,658         3,757         3,391  
Non-interest expense       14,597         12,390         11,888         15,070         16,095  
Earnings before income taxes       4,965         6,265         6,615         3,274         1,418  
Income tax expense       1,008         3,851         1,901         908         296  
Net income available to common shareholders     $

3,957

      $ 2,414       $ 4,714       $ 2,366       $ 1,122  
                               
                               
PER COMMON SHARE DATA                              
Basic earnings per share     $ 0.34       $ 0.23       $ 0.52       $ 0.26       $ 0.12  
Diluted earnings per share       0.34         0.23         0.51         0.26         0.12  
Diluted earnings per share, operating*       0.46         0.45         0.51         0.44         0.37  
Quarterly dividends per share       .05         .0375         .0375         .0375         .0375  
Book value per common share at end of period       20.95         19.92         18.24         17.80         17.39  
Tangible common book value at period end*       16.39         17.71         15.48         15.00         14.61  
Market price at end of period       32.25         34.20         30.15         27.60         28.50  
Shares outstanding at period end       12,339,492         11,165,907         9,153,407         9,152,657         9,144,412  
Weighted average shares outstanding:                              
Basic       11,556,968         10,521,236         9,152,674         9,145,179         9,123,271  
Diluted       11,652,959         10,598,036         9,224,481         9,206,378         9,182,711  
                               
                               
AVERAGE BALANCE SHEET DATA                              
Total assets     $ 1,986,150       $ 1,810,252       $ 1,772,402       $ 1,751,092       $ 1,713,438  
Loans and leases       1,325,272         1,215,962         1,185,493         1,155,699         1,117,135  
Total deposits       1,683,999         1,475,628         1,512,616         1,527,119         1,460,787  
Total common equity       230,255         205,580         164,455         155,667         157,184  
Total tangible common equity*       196,326         180,322         139,013         130,789         134,809  
                               
                               
SELECTED RATIOS                              
Annualized return on avg assets       0.80 %       0.53 %       1.06 %       0.54 %       0.26 %
Annualized return on avg assets, operating*       1.08 %       1.05 %       1.07 %       0.92 %       0.79 %
Annualized return on avg common equity, operating*       9.31 %       9.21 %       11.54 %       10.31 %       8.61 %
Annualized return on avg tangible common equity, oper*       10.92 %       10.49 %       13.65 %       12.27 %       10.04 %
Average loans to average deposits       78.70 %       82.40 %       78.37 %       75.68 %       76.47 %
FTE Net Interest Margin*       3.67 %       3.79 %       3.81 %       3.84 %       3.85 %
Efficiency Ratio       72.74 %       64.94 %       62.93 %       79.75 %       90.11 %
Efficiency Ratio, operating*       63.98 %       62.93 %       62.68 %       65.56 %       69.97 %
                               
                               
CREDIT QUALITY                              
Allowance for loan losses (ALLL) as a % of total loans       0.57 %       0.68 %       0.68 %       0.68 %       0.69 %
Nonperforming assets to tangible equity + ALLL       6.99 %       6.56 %       9.71 %       9.10 %       9.39 %
Nonperforming assets to total loans + ORE       0.97 %       1.10 %       1.21 %       1.11 %       1.16 %
Annualized QTD net charge-offs (recoveries) to total loans       (0.02 %)       0.003 %       (0.005 %)       (0.003 %)       (0.09 %)
                   

*See reconciliation of Non-GAAP financial measures

 

 
FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

BALANCE SHEET    

Mar 31,
2018

   

Dec 31,
2017

   

Sept 30,
2017

   

June 30,
2017

   

Mar 31,
2017

Assets                              
Cash and cash equivalents     $ 162,521       $ 91,922       $ 93,317       $ 92,596       $ 148,511  
Securities available-for-sale       425,529         356,893         353,035         366,490         352,851  
Securities held-to-maturity       6,000         6,000         6,000         6,000         6,000  
Other investments       10,399         9,969         9,556         9,544         7,647  
Total investment securities       441,928         372,862         368,591         382,034         366,498  
Loans held for sale       2,538         4,790         4,588         5,907         5,473  
Total loans       1,516,579         1,225,306         1,198,193         1,187,936         1,139,987  
Allowance for loan losses       (8,659 )       (8,288 )       (8,175 )       (8,070 )       (7,813 )
Loans, net       1,507,920         1,217,018         1,190,018         1,179,866         1,132,174  
Premises and equipment       57,430         46,426         46,203         44,766         45,438  
Other Real Estate       7,357         7,158         7,855         8,072         7,579  
Goodwill and other intangibles       56,343         24,670         25,325         25,615         25,379  
Other assets       63,376         48,392         52,079         50,766         51,769  
Total assets     $ 2,299,413       $ 1,813,238       $ 1,787,976       $ 1,789,622       $ 1,783,204  
                               
Liabilities and Shareholders' Equity                              
Non-interest bearing deposits     $ 414,142       $ 301,989       $ 308,050       $ 319,494       $ 323,442  
Interest-bearing deposits       1,577,502         1,168,576         1,199,941         1,231,305         1,245,055  
Total deposits       1,991,644         1,470,565         1,507,991         1,550,799         1,568,497  
Borrowings       29,034         104,072         94,321         59,367         39,411  
Subordinated debentures       10,310         10,310         10,310         10,310         10,310  
Other liabilities       9,886         5,823         8,374         6,267         5,981  
Total liabilities       2,040,874         1,590,770         1,620,996         1,626,743         1,624,199  
Total shareholders' equity       258,539         222,468         166,980         162,879         159,005  
Total liabilities and shareholders' equity     $ 2,299,413       $ 1,813,238       $ 1,787,976       $ 1,789,622       $ 1,783,204  
                   

 

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT     Three Months Ended
    3/31/18     12/31/17     9/30/17     6/30/17     3/31/17
Interest Income:                              
Loans, including fees     $ 15,926     $ 14,687       $ 14,357       $ 14,114       $ 13,444  
Investment securities       2,661       2,346         2,180         2,197         2,129  
Accretion of purchase accounting adjustments       59       57         55         56         56  
Other interest income       112       53         116         97         124  
Total interest income       18,758       17,143         16,708         16,464         15,753  
Interest Expense:                              
Deposits       1,840       1,455         1,436         1,364         1,198  
Borrowings       460       392         357         259         364  
Subordinated debentures       78       105         41         67         63  
Accretion of purchase accounting adjustments       -       (30 )       (61 )       (61 )       (40 )
Total interest expense       2,378       1,922         1,773         1,629         1,585  
Net interest income       16,380       15,221         14,935         14,835         14,168  
Provision for loan losses       277       122         90         248         46  
Net interest income after provision for loan losses       16,103       15,099         14,845         14,587         14,122  
                               
Non-interest Income:                              
Service charges on deposit accounts       1,027       908         902         922         868  
Mortgage Income       799       1,102         1,276         1,208         916  
Interchange Fee Income       1,040       961         935         959         903  
Gain (loss) on securities, net       -       3         (10 )       (1 )       (8 )
Gain on sale of premises and equipment       -       -         -         -         -  
BEA award, net       -       -         -         -         -  
Other charges and fees       593       582         555         669         712  
Total non-interest income       3,459       3,556         3,658         3,757         3,391  
                               
Non-interest expense:                              
Salaries and employee benefits       7,789       7,478         7,327         7,762         7,981  
Occupancy expense       1,646       1,427         1,390         1,348         1,370  
FDIC premiums       367       365         355         331         201  
Marketing       80       118         50         99         69  
Amortization of core deposit intangibles       201       173         160         182         149  
Other professional services       1,947       578         367         2,802         3,010  
Other non-interest expense       2,567       2,251         2,239         2,546         3,315  
Total Non-interest expense       14,597       12,390         11,888         15,070         16,095  
Earnings before income taxes       4,965       6,265         6,615         3,274         1,418  
Income tax expense       1,008       3,851         1,901         908         296  
Net income available to common shareholders     $ 3,957     $ 2,414       $ 4,714       $ 2,366       $ 1,122  
                               
Basic earnings per common share     $ 0.34     $ 0.23       $ 0.52       $ 0.26       $ 0.12  
Diluted earnings per common share     $ 0.34     $ 0.23       $ 0.51       $ 0.26       $ 0.12  
Diluted earnings per common share, operating*     $ 0.46     $ 0.45       $ 0.51       $ 0.44       $ 0.37  
*See reconciliation of Non-GAAP financial measures                              
               

 
FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

COMPOSITION OF LOANS    

Mar 31,
2018

   

Percent
of Total

   

Dec 31,
2017

   

Sept 30,
2017

   

June 30,
2017

   

Mar 31,
2017

   

Percent
of Total

Commercial, financial and agricultural     $ 213,118     14.0 %     $ 165,780     $ 164,577     $ 167,799     $ 156,786     13.7 %
Real estate – construction       213,712     14.1 %       183,328       171,609       169,971       163,249     14.3 %
Real estate – commercial       561,153     36.9 %       467,484       456,110       448,218       426,151     37.2 %
Real estate – residential       475,868     31.3 %       385,099       377,308       372,815       360,964     31.5 %
Lease Financing Receivable       2,433     0.2 %       2,450       2,008       2,189       2,196     0.2 %
Obligations of States & subdivisions       15,861     1.0 %       3,109       5,892       5,775       5,383     0.5 %
Consumer       34,434     2.3 %       18,056       20,689       21,169       25,258     2.2 %
Loans held for sale       2,538     0.2 %       4,790       4,588       5,907       5,473     0.4 %
Total loans     $ 1,519,117     100 %     $ 1,230,096     $ 1,202,781     $ 1,193,843     $ 1,145,460     100 %
                                           
                                           
COMPOSITION OF DEPOSITS    

Mar 31,
2018

   

Percent
of Total

   

Dec 31,
2017

   

Sept 30,
2017

   

June 30,
2017

   

Mar 31,
2017

   

Percent
of Total

Noninterest bearing     $ 414,142     20.8 %     $ 301,989     $ 308,050     $ 319,494     $ 323,442     20.6 %
NOW and other       761,318     38.2 %       601,694       639,802       665,250       661,300     42.2 %
Money Market/Savings       434,569     21.8 %       283,579       292,592       296,705       304,292     19.4 %
Time Deposits of less than $250,000       295,317     14.8 %       220,951       209,714       203,254       212,352     13.5 %
Time Deposits of $250,000 or more       86,298     4.4 %       62,352       57,833       66,096       67,111     4.3 %
Total Deposits     $ 1,991,644     100 %     $ 1,470,565     $ 1,507,991     $ 1,550,799     $ 1,568,497 100 %
                                           
                                           
ASSET QUALITY DATA    

Mar 31,
2018

         

Dec 31,
2017

   

Sept 30,
2017

   

June 30,
2017

   

Mar 31,
2017

     
Nonaccrual loans     $ 5,746           $ 5,674     $ 4,852     $ 3,979     $ 4,955      
Loans past due 90 days and over       1,096             285       1,436       760       345      
Total nonperforming loans       6,842             5,959       6,288   4,739       5,300      
Other real estate       7,357             7,158       7,855   8,072       7,579      
Nonaccrual securities       616             408       408   408       408      
Total nonperforming assets     $ 14,815           $ 13,525     $ 14,551 $ 13,219     $ 13,287      
                                       
Nonperforming assets to total assets       0.64%             0.75%       0.81%   0.74%       0.75%      
Nonperforming assets to total loans + ORE       0.97%             1.10%       1.21%   1.11%       1.16%      
ALLL to nonperforming loans       128.13%             139.08%       130.01%   170.29%       147.42%      
ALLL to total loans       0.57%             0.68%       0.68%   0.68%       0.69%      
                                       
Quarter-to-date net charge-offs (recs)     $ (94)           $ 9     $ (15) $ (9)     $ (257)      
Annualized QTD net chg/offs (recs) to loans       (0.02%)             0.003%       (0.005%)   (0.003%)       (0.09%)      
                   

                                                         
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 March 31, 2018     December 31, 2017       September 30, 2017     June 30, 2017     March 31, 2017
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 $ 274,595 $ 1,986 2.89% $ 271,459 $ 1,760 2.59% $ 280,441 $ 1,601 2.28% $ 282,235 $ 1,605 2.27% $ 244,997 $ 1,534 2.50%
Tax-exempt
securities   106,161       904 3.41%   93,645       888 3.79%   93,716       876 3.74%   95,272       897 3.77%   86,991       895 4.12%
Total investment
securities 380,756 2,890 3.04% 365,104 2,648 2.90% 374,157 2,477 2.65% 377,507 2,502 2.65% 331,988 2,429 2.93%
Fed funds sold 11,368 35 1.23% 54,640 46 0.34% 36,591 113 1.24% 39,048 95 0.97% 50,700 124 0.98%
Int bearing deposits
in other banks 94,321 77 0.33% 4,544 6 0.53% 3,463 3 0.35% 5,214 2 0.15% 5,000 2 0.16%
Loans   1,325,272       15,985 4.82%   1,215,962       14,745 4.85%   1,185,493       14,412 4.86%   1,155,699       14,170 4.90%   1,117,110       13,500 4.83%
Total Interest
earning assets 1,811,717 18,987 4.19% 1,640,250 17,445 4.25% 1,599,704 17,005 4.25% 1,577,468 16,769 4.25% 1,504,798 16,055 4.27%
Other assets   174,433   170,002   172,698   173,624   208,640
Total assets $ 1,986,150 $ 1,810,252 $ 1,772,402 $ 1,751,092 $ 1,713,438
 
Interest-bearing
liabilities:
Deposits $ 1,330,925 $ 1,840 0.55% $ 1,173,386 $ 1,425 0.49% $ 1,204,614 $ 1,375 0.46% $ 1,211,959 $ 1,303 0.43% $ 1,149,287 $ 1,158 0.40%
Repo - - 0.00% - - 0.00% 4,891 38 3.11% 5,000 48 3.84% 5,000 48 3.84%
Fed funds purchased 202 1 1.98% 2,543 11 1.73% 3,816 19 1.99% 1,906 8 1.68% 975 2 0.82%
FHLB & FTN 71,944 459 2.55% 103,421 381 1.47% 68,041 300 1.76% 40,765 203 1.99% 79,581 314 1.58%
Subordinated
debentures   10,310       78 3.03%   10,310       105 4.07%   10,310       41 1.59%   10,310       67 2.60%   10,310       63 2.44%
Total interest
bearing liabilities 1,413,381   2,378 0.67% 1,289,660   1,922 0.60% 1,291,672   1,773 0.55% 1,269,940   1,629 0.51% 1,245,153   1,585 0.51%
Other liabilities 342,514 315,012 316,275 325,485 311,101
Shareholders' equity   230,255   205,580   164,455   155,667   157,184
Total liabilities and
shareholders'
equity $ 1,986,150 $ 1,810,252 $ 1,772,402 $ 1,751,092 $ 1,713,438
 
Net interest
income (FTE)* $ 16,609 3.52% $ 15,523 3.66% $ 15,232 3.70% $ 15,140 3.74% $ 14,470 3.76%
 
Net interest margin (FTE)* 3.67% 3.79% 3.81% 3.84% 3.85%
 
Core net interest
margin* 3.65% 3.76% 3.78% 3.81% 3.82%
 

*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

       

Mar 31,
2018

   

Dec 31,
2017

   

Sept 30,
2017

   

June 30,
2017

   

Mar 31,
2017

Book value per common share         $ 20.95     $ 19.92     $ 18.24     $ 17.80     $ 17.39
Effect of intangible assets per share           4.56       2.21       2.76       2.80       2.78
Tangible book value per common share         $ 16.39     $ 17.71     $ 15.48     $ 15.00     $ 14.61
                                   
Diluted earnings per share         $ 0.34     $ 0.23     $ 0.51     $ 0.26     $ 0.12
Effect of acquisition charges           0.15       0.04       -       0.29       0.39
Taxes on acquisition charges           (0.03)       (0.01)       -       (0.11)       (0.14)
Charge related to reduction in deferred tax asset           -       0.19       -       -       -
Diluted earnings per share, operating         $ 0.46     $ 0.45     $ 0.51     $ 0.44     $ 0.37
                                   
 

 

Year to Date

                2018             2017      
Diluted earnings per share               $ 0.34           $ 0.12      
Effect of acquisition charges                 0.15             0.39      
Tax                 (0.03)             (0.14)      
Diluted earnings per share, operating               $ 0.46           $ 0.37      
                                   
 

 

Year to Date

              2018           2017      
Net income available to common shareholders               $ 3,957           $ 1,122      
Effect of acquisition charges                 1,758             3,598      
Tax                 (355)             (1,337)      
Net earnings available to common shareholders, operating               $ 5,360           $ 3,383      
                                   
          Three Months Ended
Average Balance Sheet Data        

Mar 31,
2018

   

Dec 31,
2017

   

Sept 30,
2017

   

June 30,
2017

   

Mar 31,
2017

Total average assets

 

A

    $ 1,986,150     $ 1,810,252     $ 1,772,402     $ 1,751,092     $ 1,713,438

Total average earning assets

 

B

    $ 1,811,717     $ 1,640,250     $ 1,599,704     $ 1,577,468     $ 1,504,798
                                   

Common Equity

 

C

    $ 230,255     $ 205,580     $ 164,455     $ 155,667     $ 157,184
Less intangible assets           33,929       25,258       25,442       24,878       22,375

Tangible common equity

 

D

    $ 196,326     $ 180,322     $ 139,013     $ 130,789     $ 134,809
                                   
                                   
          Three Months Ended
Net Interest Income Fully Tax Equivalent        

Mar 31,
2018

   

Dec 31,
2017

   

Sept 30,
2017

   

June 30,
2017

   

Mar 31,
2017

Net interest income

 

E

    $ 16,380     $ 15,221     $ 14,935     $ 14,835     $ 14,168
Tax-exempt investment income           (675)       (586)       (579)       (592)       (593)
Taxable investment income           904       888       876       897       895

Net Interest Income Fully Tax Equivalent

 

F

    $ 16,609     $ 15,523     $ 15,232     $ 15,140     $ 14,470
                                   

Annualized Net Interest Margin

 

E/B

      3.62%       3.71%       3.73%       3.76%       3.77%

Annualized Net Interest Margin, Fully Tax Equivalent

 

F/B

      3.67%       3.79%       3.81%       3.84%       3.85%
          Three Months Ended
Core Net Interest Margin        

Mar 31,
2018

   

Dec 31,
2017

   

Sept 30,
2017

   

June 30,
2017

   

Mar 31,
2017

Net interest income (FTE)         $ 16,609     $ 15,523     $ 15,232     $ 15,140     $ 14,470
Less purchase accounting adjustments           59       87       116       117       96

Net interest income, net of purchase accounting adj

 

G

    $ 16,550     $ 15,436     $ 15,116     $ 15,023     $ 14,374
                                   
Total average earning assets         $ 1,811,717     $ 1,640,250     $ 1,599,704     $ 1,577,468     $ 1,504,798
Add average balance of loan valuation discount           1,578       1,558       1,640       1,721       2,159

Avg earning assets, excluding loan valuation discount

 

H

    $ 1,813,295     $ 1,641,808     $ 1,601,344     $ 1,579,189     $ 1,506,957
                                   

Core net interest margin

 

G/H

      3.65%       3.76%       3.78%       3.81%       3.82%
                                   
                                   
          Three Months Ended
Efficiency Ratio        

Mar 31,
2018

   

Dec 31,
2017

   

Sept 30,
2017

   

June 30,
2017

   

Mar 31,
2017

Operating Expense                                  
Total non-interest expense         $ 14,598     $ 12,390     $ 11,888     $ 15,070     $ 16,095
Pre-tax non-operating expenses           (1,758)       (384)       (47)       (2,682)       (3,598)

Adjusted Operating Expense

 

I

    $ 12,840     $ 12,006     $ 11,841     $ 12,388     $ 12,497
                                   
Operating Revenue                                  
Net interest income, FTE         $ 16,609     $ 15,523     $ 15,232     $ 15,140     $ 14,470
Total non-interest income           3,459       3,556       3,658       3,757       3,391
Pre-tax non-operating items           -       -       -       -       -

Adjusted Operating Revenue

 

J

    $ 20,068     $ 19,079     $ 18,890     $ 18,897     $ 17,861
                                   

Efficiency Ratio, operating

 

I/J

      63.98%       62.93%       62.68%       65.56%       69.97%
                                   
                                   
          Three Months Ended
Return Ratios        

Mar 31,
2018

   

Dec 31,
2017

   

Sept 30,
2017

   

June 30,
2017

   

Mar 31,
2017

Net income available to common shareholders

 

K

    $ 3,957     $ 2,414     $ 4,714     $ 2,366     $ 1,122
Acquisition charges           1,758       384       47       2,682       3,598
Tax on acquisition charges           (355)       (148)       (18)       (1,035)       (1,337)
Charge related to reduction in deferred tax asset           -       2,081       -       -       -

Net earnings available to common shareholders, oper

 

L

    $ 5,360     $ 4,731     $ 4,743     $ 4,013     $ 3,383
                                   

Annualized return on avg assets

 

K/A

      0.80%       0.53%       1.06%       0.54%       0.26%

Annualized return on avg assets, oper

 

L/A

      1.08%       1.05%       1.07%       0.92%       0.79%

Annualized return on avg common equity, oper

 

L/C

      9.31%       9.21%       11.54%       10.31%       8.61%

Annualized return on avg tangible common equity, oper

 

L/D

      10.92%       10.49%       13.65%       12.27%       10.04%
                                   
Mortgage Department                                  
Net Interest Income after provision for loan losses         $ 189     $ 272     $ 249     $ 233     $ 253
Loan fee income           800       1,102       1,276       1,208       916
Salaries and employee benefits           849       806       882       946       806
Other non-interest expense           97       101       102       99       114
Earnings before income taxes         $ 43     $ 467     $ 541     $ 396     $ 249
           

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