The First Bancshares, Inc. Reports a 9.8% Increase in Net Income Available to Common Shareholders and a 70.3% Increase in Operating Net Earnings for the Year Ended December 31, 2017; Declares an Increased Quarterly Dividend of 33.3%

HATTIESBURG, Miss.--()--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 $10.6 million for the fiscal year ended December 31, 2017, an increase of $0.9 million or 9.8%, compared to $9.7 million for the fiscal year ended December 31, 2016. Operating net earnings increased 70.3% ($7.0 million) for the fiscal year ended December 31, 2017, totaling $16.9 million for fiscal year 2017 as compared to $9.9 million for fiscal 2016. Operating net earnings for the fiscal year 2017 excludes merger-related costs of $4.2 million, net of tax, and a $2.1 million charge to income tax expense related to a reduction in our deferred tax asset resulting from the change in tax rate under the Tax Cuts and Jobs Act enacted in December of 2017.

Net income available to common shareholders for the fourth quarter of 2017 totaled $2.4 million compared to $2.1 million for the fourth quarter of 2016, an increase of 14.3%. Operating net earnings for the fourth quarter of 2017 totaled $4.7 million as compared to $2.4 million for the fourth quarter of 2016 representing a 97.6% increase, excluding merger-related costs of $0.2 million, net of tax, in the fourth quarter of 2017 as well as the $2.1 million income tax charge discussed above in the fourth quarter of 2017.

For the full year 2017, fully diluted earnings per share were $1.11, compared to $1.57 for the full year 2016. Fully diluted earnings per share for the quarter ended December 31, 2017, were $0.23, compared to $0.26 for the quarter ended December 31, 2016. Excluding the impact of the merger-related costs and the income tax charge discussed above, fully diluted operating earnings per share for the year ended December 31, 2017 were $1.76 as compared to $1.64 for 2016, and were $0.45 for the fourth quarter of 2017 as compared to $0.30 for the fourth quarter of 2016. Fully diluted earnings per share for 2017 includes the issuance of 2,012,500 shares of our common stock during the fourth quarter related to the capital raise described below. Fully diluted earnings per share for 2016 includes the issuance of 3,563,380 shares of our common stock during the fourth quarter.

Highlights for the Quarter:

  • On October 24, 2017, the Company announced the signing of an Agreement and Plan of Merger with Southwest Banc Shares, Inc. (“Southwest”), parent company of First Community Bank, headquartered in Chatom, AL. Upon completion, the acquisition will add 9 locations servicing southwest Alabama and is expected to close during the first quarter of 2018 subject to Southwest shareholder approval and customary closing conditions.
  • On October 31, 2017, the Company completed a sale of an aggregate of 2,012,500 shares of its common stock in a public offering. Net proceeds after underwriting discounts and estimated expenses were approximately $55.2 million.
  • On December 6, 2017, the Company announced the signing of an Agreement and Plan of Merger with Sunshine Financial, Inc. (“Sunshine”), parent company of Sunshine Community Bank, headquartered in Tallahassee, FL. Upon completion, the acquisition will add 5 locations servicing Tallahassee and is expected to close during the second quarter of 2018 subject to regulatory approval, Sunshine shareholder approval and customary closing conditions.

M. Ray “Hoppy” Cole, President & Chief Executive Officer, commented, “2017 was another outstanding year for our Company characterized by substantial growth and improved operating performance. We continue to expand our franchise in the gulf south region through a combination of organic and acquisitive growth.

We are excited about our recently announced pending acquisition of Southwest Bancshares, Inc. in Mobile, AL and Sunshine Financial, Inc. in Tallahassee, FL. Our team members look forward to closing these acquisitions in the first half of 2018. Southwest and Sunshine represent continued execution of our strategic vision of creating a regional community bank focused on being nimble and responsive to the needs of our clients and generating substantial returns for our shareholders.”

Balance Sheet

Consolidated assets increased $25.4 million to $1.813 billion at December 31, 2017, due primarily to the receipt of $55.2 million in proceeds related to the capital raise, offset by a reduction in public fund deposits of $38.1 million due to the seasonality of this portfolio.

Total loans were $1.225 billion at December 31, 2017, as compared to $1.198 billion at September 30, 2017, and $867.1 million at December 31, 2016, representing increases of $27.1 million or 2.3%, and $358.3 million or 41.3%, respectively. Increased loan volume of $27.1 million for the fourth quarter of 2017 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 fourth quarter of 2016.

Total deposits were $1.471 billion at December 31, 2017, as compared to $1.508 billion at September 30, 2017, and $1.039 billion at December 31, 2016, representing a decrease of $37.4 million or 2.5%, and an increase of $431.4 million or 41.5%, respectively. The sequential-quarter decrease was primarily due to a decrease in NOW accounts of $38.1 million, which is attributable to the seasonality of the public fund deposits. The acquisitions of Gulf Coast Community Bank and Iberville Bank accounted for $335.1 million of the total increase in deposits as compared to the fourth quarter in 2016.

Asset Quality

Nonperforming assets totaled $13.5 million at December 31, 2017, a decrease of $1.1 million compared to $14.6 million at September 30, 2017 and an increase of $3.6 million compared to December 31, 2016. The majority of the increase in same quarter comparison 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 December 31, 2017 and September 30, 2017. Including valuation accounting adjustments on acquired loans, the total valuation plus ALLL was 1.11% of total loans at December 31, 2017. The ratio of annualized net charge-offs (recoveries) to total loans was 0.003% for the quarter ended December 31, 2017 compared to (0.005%) for the quarter ended September 30, 2017.

Fourth Quarter 2017 vs. Fourth Quarter 2016 Earnings Comparison

Net income available to common shareholders for the fourth quarter of 2017 totaled $2.4 million compared to $2.1 million for the fourth quarter of 2016, an increase of $0.3 million or 14.3%.

Operating net earnings for the fourth quarter of 2017 totaled $4.7 million compared to $2.4 million for the fourth quarter of 2016, an increase of $2.3 million or 97.6%. Operating net earnings exclude the merger-related costs and the income tax charge discussed above.

Revenues from consolidated operations increased $6.1 million in quarterly comparison. Net interest income for the fourth quarter of 2017 was $15.2 million, an increase of $4.5 million when compared to the fourth quarter of 2016. The increase is primarily due to interest income earned on a higher volume of loans. Net interest margin for the fourth quarter of 2017 was 3.71% as compared to 3.68% for the same quarter in 2016.

Non-interest income increased $0.9 million for the fourth quarter of 2017 as compared to the fourth quarter of 2016 due to increased service charges and interchange fee income.

Fourth quarter 2017 non-interest expense increased $2.3 million, or 22.3% as compared to fourth quarter 2016. The majority of the increase is due to higher compensation expense, occupancy expense and other non-interest expense. Salaries increased $1.5 million, of which $1.3 million resulted from increased employment as a result of the acquisitions. Occupancy and other non-interest expense of $0.7 million in the fourth quarter of 2017 was attributable to the acquisitions.

Fully tax equivalent (“FTE”) net interest income totaled $15.5 million and $10.9 million for the fourth quarter of 2017 and 2016, respectively. FTE net interest income increased $4.6 million in the prior year quarterly comparison primarily due to an increase in interest earned on loans. Purchase accounting adjustments accounted for $0.3 million of the difference in net interest income for the fourth quarter comparisons. Fourth quarter 2017 FTE net interest margin of 3.79% includes 3 basis points related to purchase accounting adjustments.

Investment securities totaled $372.9 million, or 20.6% of total assets at December 31, 2017, versus $255.8 million, or 20.0% of total assets at December 31, 2016. The average volume of investment securities increased $104.2 million in prior year quarterly comparison, primarily as a result of the acquisitions. The average tax equivalent yield on investment securities increased 28 basis points to 2.90% from 2.62% in prior year quarterly comparison. The investment portfolio had a net unrealized loss of $0.6 million at December 31, 2017 as compared to $1.7 million at December 31, 2016.

The average yield on all earnings assets increased 8 basis points in prior year quarterly comparison, from 4.17% for the fourth quarter of 2016 to 4.25% for the fourth quarter of 2017. This increase was offset partially by an increase in average interest expense of 9 basis points from 0.51% for the fourth quarter of 2016 to 0.60% for the fourth quarter of 2017.

Fourth Quarter 2017 vs Third Quarter 2017 Earnings Comparison

Operating net earnings for the fourth quarter of 2017 compared to the third quarter of 2017 remained constant at $4.7 million.

Net interest income for the fourth quarter of 2017 was $15.2 million. FTE net interest income increased $0.3 million to $15.5 million from $15.2 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 remained unchanged in sequential-quarter comparison at 4.25%. Average interest expense increased 5 basis points from 0.55% for the third quarter of 2017 to 0.60% for the fourth quarter of 2017.

Non-interest income decreased $0.1 million in sequential-quarter comparison resulting from decreased mortgage income of $0.1 million.

Non-interest expense increased $0.5 million in sequential-quarter comparison, which reflects increases in salaries and employee benefits and other professional services. Merger-related costs of $0.4 million were included in other professional services for the fourth quarter of 2017.

Year to Date Earnings Comparison

In year-over-year comparison, net income available to common shareholders increased $0.9 million, or 9.8%, from $9.7 million at December 31, 2016 to $10.6 million at December 31, 2017. Operating net earnings increased $7.0 million or 70.3% to $16.9 million at December 31, 2017 from $9.9 million at December 31, 2016, excluding the impact of the merger-related costs and the income tax charge discussed above. Net interest income increased $18.9 million in year-over-year comparison as interest income earned on a higher volume of loans attributed to this overall increase.

Non-interest income was $14.4 million at December 31, 2017, an increase of $3.1 million in year-over-year comparison consisting of increases in service charges on deposit accounts, interchange fee income and other charges and fees.

Non-interest expense was $55.4 million at December 31, 2017, an increase of $18.6 million in year-over-year comparison primarily resulting from increases in salaries and benefits of $8.4 million, of which $6.7 million relates to the acquisitions. Increases in other professional services and other non-interest expense increased $8.8 million which includes $6.7 million in merger-related costs.

Declaration of Cash Dividend

The Company announced that its Board of Directors declared a cash dividend in the amount of $0.05 per share, an increase of $0.0125 per share, or 33.3%, to be paid on its common stock on February 22, 2018 to shareholders of record as of the close of business on February 5, 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 proposed acquisitions of Southwest Banc Shares, Inc. and Sunshine Financial, Inc., including the risk that the proposed acquisitions do not close when expected or at all because of required regulatory, shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all, the terms of the proposed transactions may need to be modified to satisfy such approvals or conditions, and the risk that anticipated benefits from the proposed transactions are not realized in the time frame anticipated or at all as a result of changes in general economic and market conditions. 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

12/31/17

     

Quarter

Ended

9/30/17

     

Quarter

Ended

6/30/17

     

Quarter

Ended

3/31/17

     

Quarter

Ended

12/31/16

Total Interest Income $ 17,143       $ 16,708       $ 16,464       $ 15,753       $ 11,868
Total Interest Expense   1,922     1,773     1,629     1,585     1,176  
Net Interest Income   15,221     14,935     14,835     14,168     10,692  
FTE net interest income*   15,523     15,232  

 

  15,140     14,470     10,935  
Provision for loan losses 122 90 248 46 88
Non-interest income

3,556

3,658 3,757 3,391 2,705
Non-interest expense   12,390   11,888   15,070   16,095   10,132
Earnings before income taxes 6,265 6,615 3,274 1,418 3,177
Income tax expense   3,851   1,901   908   296   870
Net income 2,414 4,714 2,366 1,122 2,307
Dividends and accretion on preferred stock   -   -   -   -   195
Net income available to common shareholders $ 2,414   $ 4,714   $ 2,366   $ 1, 122   $ 2,112  
 
PER COMMON SHARE DATA
Basic earnings per share $ 0.23 $ 0.52 $ 0.26 $ 0.12 $ 0.39
Diluted earnings per share 0.23 0.51 0.26 0.12 0.26
Diluted earnings per share, operating* 0.45 0.51 0.44 0.37 0.30
Quarterly dividends per share .0375 .0375 .0375 .0375 .0375
Book value per common share at end of period 19.92 18.24 17.80 17.39 17.19
Tangible common book value at period end* 17.71 15.48 15.00 14.61 15.46
Market price at end of period 34.20 30.15 27.60 28.50 27.50
Shares outstanding at period end 11,165,907 9,153,407 9,152,657 9,144,412 8,991,397
Weighted average shares outstanding:
Basic 10,521,236 9,152,674 9,145,179 9,123,271 5,463,651
Diluted 10,598,036 9,224,481 9,206,378 9,182,711 8,500,305
 
AVERAGE BALANCE SHEET DATA
Total assets $ 1,810,252 $ 1,772,402 $ 1,751,092 $ 1,713,438 $ 1,275,538
Loans and leases 1,215,962 1,185,493 1,155,699 1,117,135 856,798
Total deposits 1,475,628 1,512,616 1,527,119 1,460,787 1,037,877
Total common equity 205,580 164,455 155,667 157,184 94,750
Total tangible common equity* 180,322 139,013 130,789 134,809 79,112
Total equity 205,580 164,455 155,667 157,184 159,786
 
SELECTED RATIOS
Annualized return on avg assets 0.53 % 1.06 % .54 % .26 % .72 %
Annualized return on avg assets, operating* 1.05 % 1.07 % .92 % .79 % .75 %
Annualized return on avg common equity, operating* 9.21 % 11.54 % 10.31 % 8.61 % 10.11 %
Annualized return on avg tangible common equity, oper* 10.49 % 13.65 % 12.27 % 10.04 % 12.10 %
Average loans to average deposits 82.40 % 78.37 % 75.68 % 76.47 % 82.55 %
FTE Net Interest Margin* 3.79 % 3.81 % 3.84 % 3.85 % 3.77 %
Efficiency Ratio 64.94 % 62.93 % 79.75 % 90.11 % 74.28 %
Efficiency Ratio, operating* 62.93 % 62.68 % 65.56 % 69.97 % 71.40 %
 
 
CREDIT QUALITY
Allowance for loan losses (ALLL) as a % of total loans .68 % .68 % .68 % .69 % .87 %
Nonperforming assets to tangible equity + ALLL 6.56 % 9.71 % 9.10 % 9.39 % 6.74 %
Nonperforming assets to total loans + ORE 1.10 % 1.21 % 1.11 % 1.16 % 1.14 %
Annualized QTD net charge-offs (recoveries) to total loans 0.003 % (0.005 %) (0.003 %) (0.09 %) 0.03 %

*See reconciliation of Non-GAAP financial measures

 

 
FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

BALANCE SHEET  

Dec 31,

2017

 

Sept 30,

2017

 

June 30,

2017

 

Mar 31,

2017

 

Dec 31,

2016

Assets        
Cash and cash equivalents $ 91,922 $ 93,317 $ 92,596 $ 148,511 $ 62,119
Securities available-for-sale 356,893 353,035 366,490 352,851 243,206
Securities held-to-maturity 6,000 6,000 6,000 6,000 6,000
Other investments   9,969     9,556     9,544     7,647     6,593  
Total investment securities 372,862 368,591 382,034 366,498 255,799
Loans held for sale 4,790 4,588 5,907 5,473 5,880
Total loans 1,225,306 1,198,193 1,187,936 1,139,987 867,054
Allowance for loan losses   (8,288 )   (8,175 )   (8,070 )   (7,813 )   (7,510 )
Loans, net 1,217,018 1,190,018 1,179,866 1,132,174 859,544
Premises and equipment 46,426 46,203 44,766 45,438 34,624
Other Real Estate 7,158 7,855 8,072 7,579 6,008
Goodwill and other intangibles 24,670 25,325 25,615 25,379 15,507
Other assets   48,392     52,079     50,766     51,769     37,886  
Total assets $ 1,813,238   $ 1,787,976   $ 1,789,622   $ 1,783,204   $ 1,277,367  
 
Liabilities and Shareholders’ Equity
Non-interest bearing deposits $ 301,989 $ 308,050 $ 319,494 $ 323,442 $ 202,478
Interest-bearing deposits   1,168,576     1,199,941     1,231,305     1,245,055     836,713  
Total deposits 1,470,565 1,507,991 1,550,799 1,568,497 1,039,191
Borrowings 104,072 94,321 59,367 39,411 69,000
Subordinated debentures 10,310 10,310 10,310 10,310 10,310
Other liabilities   5,823     8,374     6,267     5,981     4,339  
Total liabilities 1,590,770 1,620,996 1,626,743 1,624,199 1,122,840
Total shareholders’ equity   222,468     166,980     162,879     159,005     154,527  
Total liabilities and shareholders’ equity $ 1,813,238   $ 1,787,976   $ 1,789,622   $ 1,783,204   $ 1,277,367  
 

 
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 $ 56,603 $ 37,933
Investment securities 8,852 5,981
Accretion of purchase accounting adjustments 224 563
Other interest income   390     127
Total interest income 66,069 44,604
Interest Expense:
Deposits 5,453 3,443
Borrowings 1,372 650
Subordinated debentures 276 222
Accretion of purchase accounting adjustments   (192 )   -
Total interest expense   6,909     4,315
Net interest income 59,160 40,289
Provision for loan losses   506     625
Net interest income after provision for loan losses 58,654 39,664
Non-interest Income:
Service charges on deposit accounts 3,600 2,452
Mortgage Income 4,502 4,432
Interchange Fee Income 3,758 2,674
Gain (loss) on securities, net (16 ) 126
Gain on sale of premises and equipment - -
BEA award, net - -
Other charges and fees   2,519     1,563
Total non-interest income 14,363 11,247
Non-interest expense:
Salaries and employee benefits 30,548 22,137
Occupancy expense 5,535 4,614
FDIC premiums 1,252 1,020
Marketing 336 402
Amortization of core deposit intangibles 664 382
Other professional services 6,757 1,806
Other non-interest expense   10,354     6,501
Total Non-interest expense   55,446     36,862
Earnings before income taxes 17,571 14,049
Income tax expense   6,955   3,931
Net income 10,616 10,118
Dividends and accretion on preferred stock   -   452
Net income available to common shareholders $ 10,616   $ 9,666
Non-operating items* 6,254 239
Net earnings available to common shareholders, operating* $ 16,870   $ 9,905
 
 
Basic earnings per common share $ 1.12   $ 1.78
Diluted earnings per common share $ 1.11   $ 1.57
Diluted earnings per common share, operating* $ 1.76   $ 1.64
*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
  12/31/17           9/30/17           6/30/17           3/31/17           12/31/16  
Interest Income:
Loans, including fees $ 14,687 $ 14,357 $ 14,114 $ 13,444 $ 9,922
Investment securities 2,346 2,180 2,197 2,129 1,472
Accretion of purchase accounting adjustments 57 55 56 56 429
Other interest income   53     116     97     124     45  
Total interest income 17,143 16,708 16,464 15,753 11,868
Interest Expense:
Deposits 1,455 1,436 1,364 1,198 968
Borrowings 392 357 259 364 148
Subordinated debentures 105 41 67 63 60
Accretion of purchase accounting adjustments   (30 )   (61 )   (61 )   (40 )   -  
Total interest expense   1,922     1,773     1,629     1,585     1,176  
Net interest income 15,221 14,935 14,835 14,168 10,692
Provision for loan losses   122   90   248   46   88
Net interest income after provision for loan losses 15,099 14,845 14,587 14,122 10,604
 
Non-interest Income:
Service charges on deposit accounts 908 902 922 868 605
Mortgage Income 1,102 1,276 1,208 916 1,204
Interchange Fee Income 961 935 959 903 683
Gain (loss) on securities, net 3 (10 ) (1 ) (8 ) (3 )
Gain on sale of premises and equipment - - - - -
BEA award, net - - - - -
Other charges and fees   582     555     669     712     216  
Total non-interest income 3,556 3,658 3,757 3,391 2,705
 
Non-interest expense:
Salaries and employee benefits 7,478 7,327 7,762 7,981 5,943
Occupancy expense 1,427 1,390 1,348 1,370 1,222
FDIC premiums 365 355 331 201 265
Marketing 118 50 99 69 122
Amortization of core deposit intangibles 173 160 182 149 88
Other professional services 578 367 2,802 3,010 793
Other non-interest expense   2,251     2,239     2,546     3,315     1,699  
Total Non-interest expense   12,390     11,888     15,070     16,095     10,132  
Earnings before income taxes 6,265 6,615 3,274 1,418 3,177
Income tax expense   3,851     1,901     908     296     870  
Net income 2,414 4,714 2,366 1,122 2,307
Dividends and accretion on preferred stock   -   -   -   -   195
Net income available to common shareholders $ 2,414   $ 4,714   $ 2,366   $ 1,122   $ 2,112  
 
Basic earnings per common share $ 0.23   $ 0.52   $ 0.26   $ 0.12   $ 0.39  
Diluted earnings per common share $ 0.23   $ 0.51   $ 0.26   $ 0.12   $ 0.26  
Diluted earnings per common share, operating* $ 0.45   $ 0.51   $ 0.44   $ 0.37   $ 0.30  
*See reconciliation of Non-GAAP financial measures

     
FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

COMPOSITION OF LOANS      

Dec 31,

2017

     

Percent

of Total

     

Sept 30,

2017

     

June 30,

2017

     

Mar 31,

2017

     

Dec 31,

2016

     

Percent

of Total

Commercial, financial and agricultural $ 165,780       13.5 %       $ 164,577       $ 167,799       $ 156,786       $ 129,423       14.8 %
Real estate – construction 183,328 14.9 % 171,609 169,971 163,249 109,394 12.5 %
Real estate – commercial 467,484 38.0 % 456,110 448,218 426,151 314,359 36.0 %
Real estate – residential 385,099 31.3 % 377,308 372,815 360,964 289,640 33.2 %
Lease Financing Receivable 2,450 0.2 % 2,008 2,189 2,196 2,204 0.3 %
Obligations of States & subdivisions 3,109 0.3 % 5,892 5,775 5,383 6,698 0.8 %
Consumer 18,056 1.5 % 20,689 21,169 25,258 15,336 1.8 %
Loans held for sale   4,790   0.3 %   4,588     5,907     5,473     5,880   0.6 %
Total loans $ 1,230,096   100 % $ 1,202,781   $ 1,193,843   $ 1,145,460   $ 872,934   100 %
 
 
COMPOSITION OF DEPOSITS

Dec 31,

2017

     

Percent

of Total

     

Sept 30,

2017

     

June 30,

2017

     

Mar 31,

2017

     

Dec 31,

2016

     

Percent

of Total

Noninterest bearing $ 301,989 20.5 % $ 308,050 $ 319,494 $ 323,442 $ 202,478 19.5 %
NOW and other 601,694 40.9 % 639,802 665,250 661,300 430,903 41.5 %
Money Market/Savings 283,579 19.3 % 292,592 296,705 304,292 182,793 17.6 %
Time Deposits of less than $250,000 220,951 15.0 % 209,714 203,254 212,352 162,797 15.7 %
Time Deposits of $250,000 or more   62,352   4.3 %   57,833     66,096     67,111     60,220   5.7 %
Total Deposits $ 1,470,565   100 % $ 1,507,991   $ 1,550,799   $ 1,568,497   $ 1,039,191   100 %
 
 
ASSET QUALITY DATA

Dec 31,

2017

           

Sept 30,

2017

     

June 30,

2017

     

Mar 31,

2017

     

Dec 31,

2016

Nonaccrual loans $ 5,674 $ 4,852 $ 3,979 $ 4,955 $ 3,265
Loans past due 90 days and over   285     1,436     760     345     198  
Total nonperforming loans 5,959 6,288 4,739 5,300 3,463
Other real estate 7,158 7,855 8,072 7,579 6,008
Nonaccrual securities   408     408     408     408     408  
Total nonperforming assets $ 13,525   $ 14,551   $ 13,219   $ 13,287   $ 9,879  
 
Nonperforming assets to total assets .75 % .81 % .74 % .75 % .77 %
Nonperforming assets to total loans + ORE 1.10 % 1.21 % 1.11 % 1.16 % 1.14 %
ALLL to nonperforming loans 139.08 % 130.01 % 170.29 % 147.42 % 216.86 %
ALLL to total loans .68 % .68 % .68 % .69 % .87 %
 
Quarter-to-date net charge-offs (recs) $ 9 $ (15 ) $ (9 ) $ (257 ) $ 58
Annualized QTD net chg/offs (recs) to loans 0.003 % (0.005 %) (0.003 %) (0.09 %) 0.03 %

                                                       
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, 2017   September 30, 2017   June 30, 2017   March 31, 2017   December 31, 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 $ 271,459 $ 1,760 2.59 % $ 280,441 $ 1,601 2.28 % $ 282,235 $ 1,605 2.27 % $ 244,997 $ 1,534 2.50 % $ 183,032 $ 997 2.18 %

Tax-exempt securities

  93,645     888 3.79 %   93,716     876 3.74 %   95,272     897 3.77 %   86,991     895 4.12 %   77,909     715 3.67 %

Total investment securities

365,104 2,648 2.90 % 374,157 2,477 2.65 % 377,507 2,502 2.65 % 331,988 2,429 2.93 % 260,941 1,712 2.62 %
Fed funds sold 54,640 46 0.34 % 36,591 113 1.24 % 39,048 95 0.97 % 50,700 124 0.98 % 41,545 45 0.43 %

Int bearing deposits in other banks

4,544 6 0.53 % 3,463 3 0.35 % 5,214 2 0.15 % 5,000 2 0.16 % 2,107 3 0.57 %
Loans   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 %   856,798     10,351 4.83 %

Total Interest earning assets

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 % 1,161,391 12,111 4.17 %
Other assets   170,003   172,698   173,624   208,640   114,147
Total assets $ 1,810,253 $ 1,772,402 $ 1,751,092 $ 1,713,438 $ 1,275,538

 

Interest-bearing liabilities:

Deposits $ 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 % $ 844,101 $ 968 0.46 %
Repo - - 0.00 % 4,891 38 3.11 % 5,000 48 3.84 % 5,000 48 3.84 % 5,000 48 3.84 %
Fed funds purchased 2,543 11 1.73 % 3,816 19 1.99 % 1,906 8 1.68 % 975 2 0.82 % 191 1 2.09 %
FHLB & FTN 103,421 381 1.47 % 68,041 300 1.76 % 40,765 203 1.99 % 79,581 314 1.58 % 56,272 99 0.70 %

Subordinated debentures

  10,310     105 4.07 %   10,310     41 1.59 %   10,310     67 2.60 %   10,310     63 2.44 %   10,310     60 2.33 %

Total interest bearing liabilities

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 % 915,874   1,176 0.51 %
Other liabilities 315,011 316,275 325,485 311,101 199,878
Shareholders' equity   205,582   164,455   155,667   157,184

 

  159,786

Total liabilities and shareholders' equity

$ 1,810,253 $ 1,772,402 $ 1,751,092 $ 1,713,438 $ 1,275,538
 

 

Net interest income (FTE)*

$ 15,523 3.66 % $ 15,232 3.70 % $ 15,140 3.74 % $ 14,470 3.76 % $ 10,935 3.66 %
 
Net interest margin (FTE)* 3.79 % 3.81 % 3.84 % 3.85 % 3.77 %
 

Core net interest margin*

3.76 % 3.78 % 3.81 % 3.82 % 3.61 %

           
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

Dec 31,

2017

     

Sept 30,

2017

     

June 30,

2017

     

Mar 31,

2017

     

Dec 31,

2016

Book value per common share $ 19.92       $ 18.24       $ 17.80       $ 17.39       $ 17.19
Effect of intangible assets per share   2.21     2.76     2.80     2.78     1.73  
Tangible book value per common share $ 17.71   $ 15.48   $ 15.00   $ 14.61   $ 15.46  
 
 
Diluted earnings per share $ 0.23 $ 0.51 $ 0.26 $ 0.12 $ 0.26
Effect of acquisition charges 0.04 - 0.29 0.39 0.05
Taxes on acquisition charges (.01 ) - (0.11 ) (0.14 ) (0.01 )
Charge related to reduction in deferred tax asset   .19     -     -     -     -  
Diluted earnings per share, operating $ 0.45   $ 0.51   $ 0.44   $ 0.37   $ 0.30  
 
 
Year to Date
  2017                   2016  
Diluted earnings per share $ 1.11 $ 1.57
Effect of gain on debit card conversion - (0.05 )
Effect of acquisition charges 0.70 0.09
Tax (0.27 ) 0.03
Charge related to reduction in deferred tax asset   .22     -  
Diluted earnings per share, operating $ 1.76   $ 1.64  
 
 
Year to Date
  2017                   2016  
Net income available to common shareholders $ 10,616 $ 9,666
Effect of gain on debit card conversion - (252 )
Effect of acquisition charges 6,711 583
Tax (2,538 ) (92 )
Charge related to reduction in deferred tax asset   2,081     -  
Net earnings available to common shareholders, operating $ 16,870   $ 9,905  
 
 
Three Months Ended
Average Balance Sheet Data

Dec 31,

2017

     

Sept 30,

2017

     

June 30,

2017

     

Mar 31,

2017

     

Dec 31,

2016

Total average assets

A

$ 1,810,252 $ 1,772,402 $ 1,751,092 $ 1,713,438 $ 1,275,538

Total average earning assets

B

$ 1,640,250 $ 1,599,704 $ 1,577,468 $ 1,504,798 $ 1,161,391
 
Total equity $ 205,580 $ 164,455 $ 155,667 $ 157,184 $ 159,786
Less preferred equity   -   -   -   -   65,036

Total common equity

C

205,580 164,455 155,667 157,184 94,750
Less intangible assets   25,258     25,442     24,878     22,375     15,638  

Tangible common equity

D

$ 180,322   $ 139,013   $ 130,789   $ 134,809   $ 79,112  
 
 
Three Months Ended
Net Interest Income Fully Tax Equivalent

Dec 31,

2017

     

Sept 30,

2017

     

June 30,

2017

     

Mar 31,

2017

     

Dec 31,

2016

Net interest income

E

$ 15,221 $ 14,935 $ 14,835 $ 14,168 $ 10,692
Tax-exempt investment income (586 ) (579 ) (592 ) (593 ) (472 )
Taxable investment income   888     876     897     895     715  

Net Interest Income Fully Tax Equivalent

F

$ 15,523   $ 15,232   $ 15,140   $ 14,470   $ 10,935  
 

Annualized Net Interest Margin

E/B

3.71 % 3.73 % 3.76 % 3.77 % 3.68 %

Annualized Net Interest Margin, Fully Tax Equivalent

F/B

3.79 % 3.81 % 3.84 % 3.85 % 3.77 %
 
 
Three Months Ended
Core Net Interest Margin

Dec 31,

2017

     

Sept 30,

2017

     

June 30,

2017

     

Mar 31,

2017

     

Dec 31,

2016

Net interest income (FTE) $ 15,523 $ 15,232 $ 15,140 $ 14,470 $ 10,935
Less purchase accounting adjustments   87     116     117     96     429  

Net interest income, net of purchase accounting adj

G

$ 15,436   $ 15,116   $ 15,023   $ 14,374   $ 10,506  
 
Total average earning assets $ 1,640,250 $ 1,599,704 $ 1,577,468 $ 1,504,798 $ 1,161,391
Add average balance of loan valuation discount   1,558     1,640     1,721     2,159     1,358  

Avg earning assets, excluding loan valuation discount

H

$ 1,641,808   $ 1,601,344   $ 1,579,189   $ 1,506,957   $ 1,162,749  
 

Core net interest margin

G/H

  3.76 %   3.78 %   3.81 %   3.82 %   3.61 %
 

Three Months Ended

Efficiency Ratio

Dec 31,

2017

     

Sept 30,

2017

     

June 30,

2017

     

Mar 31,

2017

     

Dec 31,

2016

Operating Expense
Total non-interest expense $ 12,390 $ 11,888 $ 15,070 $ 16,095 $ 10,132
Pre-tax non-operating expenses   (384 )   (47 )   (2,682 )   (3,598 )   (393 )

Adjusted Operating Expense

I

$ 12,006   $ 11,841   $ 12,388   $ 12,497   $ 9,739  
 
Operating Revenue
Net interest income, FTE $ 15,523 $ 15,232 $ 15,140 $ 14,470 $ 10,935
Total non-interest income 3,556 3,658 3,757 3,391 2,705
Pre-tax non-operating items   -     -     -     -     -  

Adjusted Operating Revenue

J

$ 19,079   $ 18,890   $ 18,897   $ 17,861   $ 13,640  
 

Efficiency Ratio, operating

I/J

62.93 % 62.68 % 65.56 % 69.97 % 71.40 %
 
Three Months Ended
Return Ratios

Dec 31,

2017

     

Sept 30,

2017

     

June 30,

2017

     

Mar 31,

2017

     

Dec 31,

2016

Net income

K

$ 2,414 $ 4,714 $ 2,366 $ 1,122 $ 2,307
Dividends and accretion on preferred stock   -     -     -     -     195  
Net income available to common shareholders 2,414 4,714 2,366 1,122 2,112
Acquisition charges 384 47 2,682 3,598 402
Tax on acquisition charges (148 ) (18 ) (1,035 ) (1,337 ) (120 )
Charge related to reduction in deferred tax asset   2,081     -     -     -     -  

Net earnings available to common shareholders, oper

L

$ 4,731   $ 4,743   $ 4,013   $ 3,383   $ 2,394  
 

Annualized return on avg assets

K/A

0.53 % 1.06 % .54 % .26 % .72 %

Annualized return on avg assets, oper

L/A

1.05 % 1.07 % .92 % .79 % .75 %

Annualized return on avg common equity, oper

L/C

9.21 % 11.54 % 10.31 % 8.61 % 10.11 %

Annualized return on avg tangible common equity, oper

L/D

10.49 % 13.65 % 12.27 % 10.04 % 12.10 %
 
 
Mortgage Department
Net Interest Income after provision for loan losses $ 272 $ 249 $ 233 $ 253 $ 48
Loan fee income 1,102 1,276 1,208 916 1,204
Other non-interest income - - - - 1
Salaries and employee benefits 806 882 946 806 783
Other non-interest expense   101     102     99     114     144  
Earnings before income taxes $ 467   $ 541   $ 396   $ 249   $ 326  

Contacts

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

Contacts

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