The First Bancshares, Inc. Reports a 128.5% Increase in Net Income Available to Common Shareholders for the Second Quarter ended June 30, 2019; Declares Quarterly Dividend

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 $12.0 million for the quarter ended June 30, 2019, an increase of $6.7 million or 128.5%, compared to $5.2 million for the quarter ended June 30, 2018, and an increase of $4.3 million, or 56.9%, compared to $7.6 million for the first quarter of 2019. Operating net earnings increased 61.8%, or $4.6 million, for the quarter ended June 30, 2019, totaling $12.1 million for the second quarter of 2019 as compared to $7.5 million for the second quarter of 2018, and increased $2.1 million, or 21.4%, as compared to $9.9 million for the first quarter of 2019. Operating net earnings for the second quarter of 2019 excludes merger-related costs of $0.1 million, net of tax. Operating net earnings for the second quarter of 2018 excludes merger-related costs of $2.9 million, net of tax, and income in the form of financial assistance grant from the U. S. Department of $0.7 million, net of tax. Operating net earnings for the first quarter of 2019 exclude merger-related costs of $2.5 million, net of tax and income in the form of an award from the U. S. Department of Treasury of $0.2 million, net of tax.

For the second quarter of 2019, fully diluted earnings per share were $0.69, compared to $0.40 for the second quarter of 2018 and $0.48 for the first quarter of 2019. Excluding the impact of the merger-related costs and income described above, fully diluted operating earnings per share for the second quarter of 2019 were $0.70 as compared to $0.57 for the second quarter of 2018, and $0.63 for the first quarter of 2019. Fully diluted earnings per share for the second quarter of 2019 include the purchase of 143,566 shares related to the Company’s recently announced $20 million share repurchase program. Fully diluted earnings per share for first quarter of 2019 include the issuance of 2,377,501 shares of our common stock in connection with the acquisition of FPB Financial Corp (“FPB”). Fully diluted earnings per share for second quarter of 2018 include the issuance of 726,461 shares of our common stock in connection with the acquisition of Sunshine Financial, Inc. (“Sunshine”).

M. Ray “Hoppy” Cole, President and Chief Executive Officer, commented, “We are very pleased with our second quarter results. Our team has been focused on integrating our multiple acquisitions over the last year. The overall improved performance and the substantial increase in profitability reflects our team’s hard work and the successful integration of the recent acquisitions. We are excited about the prospects for continued growth that our multi state regional footprint provides in addition to the scale and synergies generated by increased size and geographic diversification.”

Balance Sheet

Consolidated assets decreased $60.4 million to $3.473 billion at June 30, 2019 from $3.533 billion at March 31, 2019 primarily related to decreased deposits due to the seasonality of the public fund portfolio.

Total loans were $2.352 billion at June 30, 2019, as compared to $2.335 billion at March 31, 2019, and $1.710 billion at June 30, 2018, representing increases of $16.7 million or 0.7%, and $641.7 million or 37.5%, respectively. The acquisitions of FMB Banking Corporation (“FMB”) and FPB accounted for $541.3 million, net of fair value marks, of the total increase in loans as compared to the second quarter of 2018.

Total deposits were $2.831 billion at June 30, 2019, as compared to $2.914 billion at March 31, 2019, and $2.097 billion at June 30, 2018, representing a decrease of $83.1 million or 2.9% for the sequential quarter comparison, and an increase of $734.0 million or 35.0%, as compared to June 30, 2018. The acquisitions of FMB and FPB accounted for $734.2 million of the total increase in deposits as compared to June 30, 2018. The decrease in deposits of $83.1 million during the second quarter of 2019 was largely due to decreases in public fund deposits of $49.9 million, which is attributable to the seasonality of public funds.

Asset Quality

Nonperforming assets totaled $38.0 million at June 30, 2019, a decrease of $1.2 million compared to $39.2 million at March 31, 2019 and an increase of $20.1 million compared to June 30, 2018. The majority of the increase in the year-over-year comparison was related to acquired loans. The ratio of the allowance for loan and leases losses (ALLL) to total loans was 0.51% at June 30, 2019, 0.48% at March 31, 2019 and 0.56% at June 30, 2018. The ratio of annualized net charge-offs (recoveries) to total loans was (0.01%) for the quarter ended June 30, 2019 compared to (0.008%) for the quarter ended March 31, 2019 and 0.003% for the quarter ended June 30, 2018.

Second Quarter 2019 vs. Second Quarter 2018 Earnings Comparison

Net income available to common shareholders for the second quarter of 2019 totaled $12.0 million compared to $5.2 million for the second quarter of 2018, an increase of $6.7 million or 128.5%.

Operating net earnings for the second quarter of 2019 totaled $12.1 million compared to $7.5 million for the second quarter of 2018, an increase of $4.6 million or 61.8%. The calculation of operating net earnings excludes the merger-related costs for each quarter and the income for the second quarter of 2018 as discussed above.

Net interest income for the second quarter of 2019 was $30.8 million, an increase of $9.2 million when compared to the second quarter of 2018. The increase was due to interest income earned on a higher volume of loans as well as increased interest rates. Fully tax equivalent (“FTE”) net interest income totaled $31.0 million and $21.8 million for the second quarter of 2019 and 2018, respectively. FTE net interest income increased $9.2 million in the prior year quarterly comparison due to increased loan volume as well as increased interest rates. Purchase accounting adjustments accounted for $1.1 million of the difference in net interest income for the second quarter comparisons. Second quarter 2019 FTE net interest margin of 4.07% included 23 basis points related to purchase accounting adjustments compared to 3.92% for the same quarter in 2018, which included 10 basis points related to purchase accounting adjustments.

Non-interest income increased $1.1 million for the second quarter of 2019 as compared to the second quarter of 2018 due to increased service charges and interchange fee income of $1.1 million primarily based on the increased deposit base due to the acquisitions. Non-interest income for the second quarter of 2018 included the Financial Assistance Award of $0.90 million from the U.S. Department of the Treasury as a result of our designation as a Community Development Financial Institution.

Second quarter 2019 non-interest expense was $20.9 million, an increase of $1.2 million, or 6.2% as compared to the second quarter of 2018. Excluding the decrease in acquisition charges of $3.7 million for the second quarter of 2019, non-interest expense increased $5.0 million in the second quarter of 2019, of which $3.8 million was attributable to the operations of FMB and FPB, as compared to second quarter of 2018.

Investment securities totaled $622.8 million, or 17.9% of total assets at June 30, 2019, versus $453.3 million, or 18.3% of total assets at June 30, 2018. The average balance of investment securities increased $175.6 million in prior year quarterly comparison, primarily as a result of the acquisitions. The average tax equivalent yield on investment securities increased 32 basis points to 3.40% from 3.08% in prior year quarterly comparison. The investment portfolio had a net unrealized gain of $12.6 million at June 30, 2019 as compared to a net unrealized loss of $6.0 million at June 30, 2018.

The FTE average yield on all earning assets increased 42 basis points in prior year quarterly comparison, from 4.54% for the second quarter of 2018 to 4.96% for the second quarter of 2019. Average interest expense increased 37 basis points from 0.79% for the second quarter of 2018 to 1.16% for the second quarter of 2019 due primarily to increased interest-bearing deposit accounts and rising interest rates. Cost of all deposits averaged 77 basis points for the second quarter of 2019 compared to 48 basis points for the second quarter of 2018.

Second Quarter 2019 vs First Quarter 2019 Earnings Comparison

Net income available to common shareholders for the second quarter of 2019 increased $4.3 million, or 56.9% to $12.0 million compared to $7.6 million for the first quarter of 2019. For the second quarter of 2019, fully diluted earnings per share were $0.69, compared to $0.48 for the first quarter of 2019.

Operating net earnings for the second quarter of 2019 compared to the first quarter of 2019 increased $2.1 million or 21.4% from $9.9 million to $12.1 million. Operating net earnings exclude the merger-related costs for the second quarter of 2019 as discussed above. Operating net earnings for the first quarter of 2019 exclude merger-related costs and income discussed above. Excluding the impact of the merger-related costs and other items described above, fully diluted operating earnings per share for the second quarter of 2019 were $0.70 as compared to $0.63 for the first quarter of 2019.

Net interest income for the second quarter of 2019 was $30.8 million as compared to $27.1 million for the first quarter of 2019, an increase of $3.6 million. FTE net interest income increased $3.7 million to $31.0 million from $27.4 million in sequential-quarter comparison. The increase was due to increased loan volume as well as increased interest rates on both sides of the balance sheet. Interest income from purchase accounting adjustments increased $0.5 million in sequential quarter comparison. Second quarter 2019 FTE net interest margin of 4.07% included 23 basis points related to purchase accounting adjustments compared to 3.89% for the first quarter in 2019, which included 18 basis points related to purchase accounting adjustments.

Investment securities totaled $622.8 million, or 17.9% of total assets at June 30, 2019, versus $620.5 million, or 17.6% of total assets at March 31, 2019. The average balance of investment securities increased $68.9 million in sequential-quarter comparison, primarily as a result of the acquisition of FPB. The average tax equivalent yield on investment securities increased 8 basis points to 3.40% from 3.32% in sequential-quarter comparison. The investment portfolio had a net unrealized gain of $12.6 million at June 30, 2019 as compared to a net unrealized gain of $5.5 million at March 31, 2019.

The FTE average yield on all earning assets increased in sequential-quarter comparison from 4.76% to 4.96%. Average interest expense increased 4 basis points from 1.12% for the first quarter of 2019 to 1.16% for the second quarter of 2019 due primarily to increased interest-bearing deposit accounts. Cost of all deposits averaged 77 basis points for the second quarter of 2019 compared to 74 basis points for the first quarter of 2019. Public funds decreased $49.9 million at June 30, 2019 as compared to March 31, 2019.

Non-interest income excluding the award from the U. S. Department of the Treasury increased $1.4 million in sequential-quarter comparison resulting from increased mortgage income and interchange fee income. Non-interest income for the first quarter of 2019 included the Bank Enterprise Award received from the U. S. Department of the Treasury for $0.23 million.

Non-interest expense for the second quarter of 2019 was $20.9 million compared to $21.9 million for the first quarter of 2019. Excluding acquisition charges for each quarter, non-interest expense increased $2.1 million in sequential-quarter comparison, of which $1.4 million is attributable to the operations of FPB acquired in the first quarter.

Year-to-Date Earnings Comparison

In year-over-year comparison, net income available to common shareholders increased $10.4 million, or 113.2%, from $9.2 million for the six months ended June 30, 2018 to $19.6 million for the same period ended June 30, 2019. Operating net earnings increased $8.5 million or 62.9% from $13.5 million for the six months ended June 30, 2018 to $22.0 million for the same period June 30, 2019. Operating net earnings excludes merger-related costs of $2.5 million, net of tax, and treasury income of $0.2 million, net of tax, for the year-to-date period ended June 30, 2019, and merger-related costs of $4.3 million, net of tax, and treasury income of $0.7 million, net of tax, for the year-to-date period ended June 30, 2018.

Net interest income increased $20.0 million in year-over-year comparison, primarily due to interest income earned on a higher volume of loans as well as increased rates on both sides of the balance sheet.

Non-interest income was $12.3 million at June 30, 2019, an increase of $3.2 million in year-over-year comparison consisting of increases in service charges on deposit accounts, interchange fee income, mortgage income, as well as other charges and fees.

Non-interest expense was $42.8 million at June 30, 2019, an increase of $8.5 million in year-over-year comparison of which $8.1 million is related to the acquisition and operations of both Farmers & Merchants Bank and Florida Parishes Bank.

Declaration of Cash Dividend

The Company announced that its Board of Directors declared a cash dividend of $0.08 per share to be paid on its common stock on August 23, 2019 to shareholders of record as of the close of business on August 9, 2019.

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, Florida and Georgia. 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; interest rate risk; legislation or regulatory changes which adversely affect the ability of the consolidated Company to conduct business combinations or new operations; and risks that the anticipated benefits from the transactions with Southwest, Sunshine, FMB and FPB 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
6/30/19

Quarter
Ended

3/31/19

Quarter
Ended
12/31/18

Quarter
Ended
9/30/18

Quarter
Ended
6/30/18

Total Interest Income

$ 37,571

$ 33,273

$ 30,555

$ 25,628

$ 25,037

Total Interest Expense

6,799

6,142

5,285

3,959

3,468

Net Interest Income

30,772

27,131

25,270

21,669

21,569

FTE net interest income*

31,040

27,388

25,524

21,925

21,826

Provision for loan losses

791

1,123

574

412

857

Non-interest income

6,716

5,554

6,396

5,074

5,632

Non-interest expense

20,891

21,893

22,249

19,786

19,680

Earnings before income taxes

15,806

9,669

8,843

6,545

6,664

Income tax expense

3,823

2,034

1,982

1,383

1,419

Net income available to common shareholders

$ 11,983

$ 7,635

$ 6,861

$ 5,162

$ 5,245

 

 

 

 

 

 

 

 

 

 

 

 

PER COMMON SHARE DATA

 

 

 

 

 

Basic earnings per share

$ 0.70

$ 0.49

$ 0.48

$ 0.39

$ 0.40

Diluted earnings per share

0.69

0.48

0.48

0.39

0.40

Diluted earnings per share, operating*

0.70

0.63

0.64

0.61

0.57

Quarterly dividends per share

.08

.07

.05

.05

.05

Book value per common share at end of period

27.22

26.30

24.49

22.09

21.88

Tangible book value per common share at period end*

18.72

17.79

16.88

17.10

16.82

Market price at end of period

30.34

30.90

30.91

39.05

36.80

Shares outstanding at period end

17,129,915

17,272,731

14,830,598

13,074,516

13,065,953

Weighted average shares outstanding:

 

 

 

 

 

Basic

17,182,049

15,646,476

14,247,555

13,072,455

13,065,953

Diluted

17,311,626

15,770,622

14,371,562

13,192,207

13,167,969

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCE SHEET DATA

 

 

 

 

 

Total assets

$3,460,394

$3,181,761

$2,812,212

$2,470,607

$2,443,176

Loans and leases

2,337,583

2,167,495

1,959,179

1,720,884

1,696,737

Total deposits

2,862,653

2,599,842

2,296,966

2,069,910

2,115,661

Total common equity

454,965

390,217

328,250

284,839

274,535

Total tangible common equity*

308,303

262,553

222,402

219,077

217,092

 

 

 

 

 

 

 

 

 

 

 

 

SELECTED RATIOS

 

 

 

 

 

Annualized return on avg assets

1.39%

0.96%

0.98%

0.84%

0.86%

Annualized return on avg assets, operating*

1.39%

1.25%

1.30%

1.30%

1.22%

Annualized return on avg common equity, operating*

10.60%

10.18%

11.14%

11.26%

10.85%

Annualized return on avg tangible common equity, oper*

15.64%

15.13%

16.44%

14.64%

13.72%

Average loans to average deposits

81.66%

83.37%

85.29%

83.14%

80.20%

FTE Net Interest Margin*

4.07%

3.89%

4.08%

3.97%

3.92%

Efficiency Ratio

55.33%

66.46%

69.69%

73.28%

71.67%

Efficiency Ratio, operating*

55.09%

57.21%

59.06%

58.76%

59.69%

 

 

 

 

 

 

 

 

 

 

 

 

CREDIT QUALITY

 

 

 

 

 

Allowance for loan losses (ALLL) as a % of total loans

0.51%

0.48%

0.49%

0.56%

0.56%

Nonperforming assets to tangible equity + ALLL

11.42%

12.32%

13.17%

10.05%

7.88%

Nonperforming assets to total loans + OREO

1.61%

1.67%

1.66%

1.33%

1.04%

Annualized QTD net charge-offs (recoveries) to total loans

(0.01%)

(0.008%)

0.02%

0.03%

0.003%

 

 

 

 

 

 

*See reconciliation of Non-GAAP financial measures

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

 

 

BALANCE SHEET

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Sept 30,
2018

June 30,

2018

Assets

 

 

 

 

 

Cash and cash equivalents

$

165,984

$

248,576

$

159,107

$

122,371

$

120,425

Securities available-for-sale

 

598,607

 

598,796

 

492,701

 

424,940

 

437,011

Securities held-to-maturity

 

6,396

 

6,397

 

6,000

 

6,000

 

6,000

Other investments

 

17,819

 

15,298

 

16,227

 

13,104

 

10.320

Total investment securities

 

622,822

 

620,491

 

514,928

 

444,044

 

453,331

Loans held for sale

 

8,597

 

6,238

 

4,838

 

4,269

 

5,914

Total loans

 

2,351,998

 

2,335,348

 

2,060,422

 

1,748,483

 

1,710,271

Allowance for loan losses

 

(12,091)

 

(11,235)

 

(10,065)

 

(9,765)

 

(9,512)

Loans, net

 

2,339,907

 

2,324,113

 

2,050,357

 

1,738,718

 

1,700,759

Premises and equipment

 

97,115

 

94,624

 

74,783

 

62,342

 

62,289

Other Real Estate Owned

 

11,205

 

11,588

 

10,869

 

8,453

 

7,890

Goodwill and other intangibles

 

145,649

 

147,150

 

112,916

 

65,238

 

66,105

Other assets

 

81,305

 

80,199

 

76,188

 

66,355

 

64,976

Total assets

$

3,472,584

$

3,532,979

$

3,003,986

$

2,511,790

$

2,481,689

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Non-interest bearing deposits

$

645,838

$

655,900

$

570,148

$

430,430

$

459,402

Interest-bearing deposits

 

2,185,362

 

2,258,418

 

1,887,311

 

1,616,016

 

1,637,833

Total deposits

 

2,831,200

 

2,914,318

 

2,457,459

 

2,046,446

 

2,097,235

Borrowings

 

71,250

 

61,750

 

85,500

 

85,508

 

10,516

Subordinated debentures

 

80,600

 

80,561

 

80,521

 

75,117

 

75,192

Other liabilities

 

23,253

 

22,003

 

17,252

 

15,921

 

12,920

Total liabilities

 

3,006,303

 

3,078,632

 

2,640,732

 

2,222,992

 

2,195,863

Total shareholders’ equity

 

466,281

 

454,347

 

363,254

 

288,798

 

285,826

Total liabilities and shareholders’ equity

$

3,472,584

$

3,532,979

$

3,003,986

$

2,511,790

$

2,481,689

 
FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT

Three Months Ended

6/30/19

3/31/19

12/31/18

9/30/18

6/30/18

Interest Income:

 

 

 

 

 

Loans, including fees

$

30,912

$

27,569

$

25,184

$

21,824

$

21,155

Investment securities

 

5,017

 

4,339

 

3,785

 

3,126

 

3,181

Accretion of purchase accounting adjustments

 

1,552

 

1,235

 

1,532

 

583

 

559

Other interest income

 

90

 

130

 

54

 

95

 

142

Total interest income

 

37,571

 

33,273

 

30,555

 

25,628

 

25,037

Interest Expense:

 

 

 

 

 

Deposits

 

5,377

 

4,275

 

3,506

 

2,740

 

2,498

Borrowings

 

288

 

546

 

482

 

52

 

147

Subordinated debentures

 

1,188

 

1,233

 

1,179

 

1,125

 

774

Accretion of purchase accounting adjustments

 

(54)

 

88

 

118

 

42

 

49

Total interest expense

 

6,799

 

6,142

 

5,285

 

3,959

 

3,468

Net interest income

 

30,772

 

27,131

 

25,270

 

21,669

 

21,569

Provision for loan losses

 

791

 

1,123

 

574

 

412

 

857

Net interest income after provision for loan losses

 

29,981

 

26,008

 

24,696

 

21,257

 

20,712

 

 

 

 

 

 

Non-interest Income:

 

 

 

 

 

Service charges on deposit accounts

 

1,918

 

1,831

 

1,887

 

1,538

 

1,341

Mortgage Income

 

1,559

 

909

 

969

 

1,066

 

1,213

Interchange Fee Income

 

2,045

 

1,652

 

1,527

 

1,180

 

1,500

Gain (loss) on securities, net

 

36

 

38

 

334

 

-

 

(5)

Financial Assistance Award/Bank Enterprise Award

 

-

 

233

 

950

 

233

 

917

Other charges and fees

 

1,158

 

891

 

729

 

1,057

 

666

Total non-interest income

 

6,716

 

5,554

 

6,396

 

5,074

 

5,632

 

 

 

 

 

 

Non-interest expense (benefit):

 

 

 

 

 

Salaries and employee benefits

 

11,615

 

10,697

 

10,336

 

9,266

 

9,502

Occupancy expense

 

2,532

 

2,442

 

2,281

 

2,163

 

2,034

FDIC premiums

 

426

 

(52)

 

369

 

278

 

368

Marketing

 

160

 

175

 

173

 

60

 

70

Amortization of core deposit intangibles

 

796

 

716

 

750

 

349

 

356

Other professional services

 

980

 

920

 

452

 

847

 

438

Acquisition charges

 

91

 

3,179

 

4,155

 

4,059

 

3,838

Other non-interest expense

 

4,291

 

3,816

 

3,733

 

2,764

 

3,074

Total Non-interest expense

 

20,891

 

21,893

 

22,249

 

19,786

 

19,680

Earnings before income taxes

 

15,806

 

9,669

 

8,843

 

6,545

 

6,664

Income tax expense

 

3,823

 

2,034

 

1,982

 

1,383

 

1,419

Net income available to common shareholders

$

11,983

$

7,635

$

6,861

$

5,162

$

5,245

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

0.69

$

0.48

$

0.48

$

0.39

$

0.40

Diluted earnings per common share, operating*

$

0.70

$

0.63

$

0.64

$

0.61

$

0.57

*See reconciliation of Non-GAAP financial measures

 

 

 

 

 

 

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT

Year to Date

 

2019

 

2018

 

Interest Income:

 

 

 

 

 

Loans, including fees

 

$ 58,482

 

$ 37,081

 

Investment securities

 

9,356

 

5,923

 

Accretion of purchase accounting adjustments

 

2,787

 

618

 

Other interest income

220

173

 

Total interest income

 

70,845

 

43,795

 

Interest Expense:

 

 

 

 

 

Deposits

 

9,652

 

4,338

 

Borrowings

 

834

 

529

 

Subordinated debentures

 

2,421

 

930

 

Amortization of purchase accounting adjustments

34

49

 

Total interest expense

12,941

5,846

 

Net interest income

 

57,904

 

37,949

 

Provision for loan losses

1,913

1,134

 

Net interest income after provision for loan losses

 

55,991

 

36,815

 

 

 

 

 

 

 

Non-interest Income:

 

 

 

 

 

Service charges on deposit accounts

 

3,750

 

2,368

 

Mortgage Income

 

2,469

 

2,013

 

Interchange Fee Income

 

3,697

 

2,540

 

Gain (loss) on securities, net

 

74

 

(5)

 

Financial Assistance Award/Bank Enterprise Award

 

233

 

917

 

Other charges and fees

 

2,047

 

1,258

 

Total non-interest income

 

12,270

 

9,091

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

Salaries and employee benefits

 

22,312

 

17,291

 

Occupancy expense

 

4,974

 

3,680

 

FDIC premiums

 

374

 

735

 

Marketing

 

335

 

150

 

Amortization of core deposit intangibles

 

1,513

 

557

 

Other professional services

 

1,900

 

627

 

Acquisition charges

 

3,270

 

5,596

 

Other non-interest expense

8,108

5,641

 

Total Non-interest expense

42,786

34,277

 

Earnings before income taxes

 

25,475

 

11,629

 

Income tax expense

5,857

 

2,427

 

Net income available to common shareholders

$ 19,618

$ 9,202

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$ 1.19

$ 0.74

Diluted earnings per common share, operating*

$ 1.33

$ 1.03

*See reconciliation of Non-GAAP financial measures

 

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

COMPOSITION OF LOANS

June 30,
2019

Percent
of Total

Mar 31,
2019

Dec 31,
2018

Sept 30,
2018

June 30,
2018

Percent
of Total

Commercial, financial and agricultural

$

342,535

14.5%

$

340,333

$

301,182

$

246,401

$

228,643

13.3%

Real estate – construction

 

352,826

14.9%

 

348,788

 

298,718

 

251,240

 

229,164

13.4%

Real estate – commercial

 

881,831

37.4%

 

857,918

 

776,880

 

654,040

 

658,096

38.3%

Real estate – residential

 

713,350

30.2%

 

722,611

 

617,804

 

529,515

 

546,120

31.8%

Lease Financing Receivable

 

3,616

0.2%

 

3,060

 

2,891

 

2,659

 

2,476

0.1%

Obligations of States & subdivisions

 

17,192

0.7%

 

13,734

 

16,941

 

16,374

 

10,627

0.6%

Consumer

 

40,648

1.7%

 

48,904

 

46,006

 

48,254

 

35,145

2.2%

Loans held for sale

 

8,597

0.4%

 

6,238

 

4,838

 

4,269

 

5,914

0.3%

Total loans

$

2,360,595

100%

$

2,341,586

$

2,065,260

$

1,752,752

$

1,716,185

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPOSITION OF DEPOSITS

June 30,
2019

Percent
of Total

Mar 31,
2019

Dec 31,
2018

Sept 30,
2018

June 30,
2018

Percent
of Total

Noninterest bearing

$

645,838

22.8%

$

655,900

$

570,148

$

430,430

$

459,402

21.9%

NOW and other

 

999,881

35.3%

 

1,062,112

 

835,434

 

705,851

 

731,617

34.9%

Money Market/Savings

 

645,611

22.8%

 

647,783

 

566,276

 

503,772

 

519,516

24.7%

Time Deposits of less than $250,000

 

408,164

14.4%

 

414,281

 

384,030

 

321,619

 

308,086

14.7%

Time Deposits of $250,000 or more

 

131,706

4.7%

 

134,242

 

101,571

 

84,774

 

78,614

3.8%

Total Deposits

$

2,831,200

100%

$

2,914,318

$

2,457,459

$

2,046,446

$

2,097,235

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSET QUALITY DATA

June 30,
2019

 

Mar 31,
2019

Dec 31,
2018

Sept 30,
2018

June 30,
2018

 

Nonaccrual loans

$

25,608

 

$

26,502

$

21,895

$

13,572

$

8,440

 

Loans past due 90 days and over

 

989

 

 

943

 

1,325

 

805

 

940

 

Total nonperforming loans

 

26,597

 

 

27,445

 

23,220

 

14,377

 

9,380

 

Other real estate owned

 

11,205

 

 

11,588

 

10,869

 

8,453

 

7,890

 

Nonaccrual securities

 

208

 

 

208

 

208

 

616

 

616

 

Total nonperforming assets

$

38,010

 

$

39,241

$

34,297

$

23,446

$

17,886

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

1.09%

 

 

1.11%

 

1.14%

 

0.93%

 

0.72%

 

Nonperforming assets to total loans + OREO

 

1.61%

 

 

1.67%

 

1.66%

 

1.33%

 

1.04%

 

ALLL to nonperforming loans

 

45.46%

 

 

40.94%

 

43.35%

 

67.92%

 

101.41%

 

ALLL to total loans

 

0.51%

 

 

0.48%

 

0.49%

 

0.56%

 

0.56%

 

 

 

 

 

 

 

 

 

Quarter-to-date net charge-offs (recs)

$

(65)

 

$

(47)

$

93

$

151

$

12

 

Annualized QTD net chg-offs (recs) to loans

 

(0.01%)

 

 

(0.008%)

 

0.02%

 

0.03%

 

0.003%

 

 
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 June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018
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

$ 497,988

$ 4,227

3.40%

$ 435,576

$ 3,581

3.29%

$ 369,820

$ 2,808

3.04%

$ 331,601

$ 2,369

2.86%

$ 328,898

$ 2,423

2.95%

Tax-exempt
securities

124,367

1,058

3.40%

117,831

1,015

3.45%

114,055

1,003

3.52%

116,235

1,013

3.49%

117,875

1,015

3.44%

Total investment
securities

622,355

5,285

3.40%

553,407

4,596

3.32%

483,875

3,811

3.15%

447,836

3,382

3.02%

446,773

3,438

3.08%

FFS & Int bearing dep

-

-

in other banks

89,936

90

0.40%

94,778

130

0.55%

57,655

282

1.96%

42,174

95

0.90%

85,321

142

0.67%

Loans

2,337,583

32,464

5.56%

2,167,495

28,804

5.32%

1,959,179

26,716

5.45%

1,720,884

22,407

5.21%

1,696,737

21,714

5.12%

Total Interest
earning assets

3,049,874

37,839

4.96%

2,815,680

33,530

4.76%

2,500,709

30,809

4.93%

2,210,894

25,884

4.68%

2,228,831

25,294

4.54%

Other assets

410,520

366,081

311,503

259,713

214,345

Total assets

$ 3,460,394

$ 3,181,761

$ 2,812,212

$ 2,470,607

$ 2,443,176

 
Interest-bearing
liabilities:
Deposits

$ 2,231,462

$ 5,323

0.95%

$ 2,024,718

$ 4,363

0.86%

$ 1,776,780

$ 3,615

0.81%

$ 1,629,195

$ 2,782

0.68%

$ 1,676,110

$ 2,547

0.61%

Repo

-

-

0.00%

-

-

0.00%

-

-

0.00%

-

-

0.00%

-

-

0.00%

Fed funds purchased

5,450

30

2.20%

150

5

13.33%

1,455

18

4.95%

1,893

27

5.71%

1,382

9

2.60%

FHLB

32,310

258

3.19%

86,119

541

2.51%

92,352

465

2.01%

22,469

25

0.45%

22,959

138

2.40%

Subordinated
debentures

80,579

1,188

5.90%

80,540

1,233

6.12%

75,391

1,187

6.30%

75,124

1,125

5.99%

54,036

774

5.73%

Total interest
bearing liabilities

2,349,801

6,799

1.16%

2,191,527

6,142

1.12%

1,945,978

5,285

1.09%

1,728,681

3,959

0.92%

1,754,487

3,468

0.79%

Other liabilities

655,628

600,017

537,984

457,087

414,154

Shareholders' equity

454,965

390,217

328,250

284,839

274,535

Total liabilities and
shareholders'
equity

$ 3,460,394

$ 3,181,761

$ 2,812,212

$ 2,470,607

$ 2,443,176

 
Net interest
income (FTE)*

$ 31,040

3.81%

$ 27,388

3.64%

$ 25,524

3.84%

$ 21,925

3.77%

$ 21,826

3.75%

 
Net interest margin (FTE)*

4.07%

3.89%

4.08%

3.97%

3.92%

 
Core net interest
margin*

3.84%

3.71%

3.84%

3.86%

3.82%

 
*See reconciliation for 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

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Sept 30,
2018

June 30,
2018

Book value per common share

$

27.22

$

26.30

$

24.49

$

22.09

$

21.88

Effect of intangible assets per share

 

8.50

 

8.51

 

7.61

 

4.99

 

5.06

Tangible book value per common share

$

18.72

$

17.79

$

16.88

$

17.10

$

16.82

 

 

 

 

 

 

Diluted earnings per share

$

0.69

$

0.48

$

0.48

$

0.39

$

0.40

Effect of acquisition charges

 

0.01

 

0.21

 

0.29

 

0.31

 

0.29

Tax on acquisition charges

 

-

 

(0.05)

 

(0.07)

 

(0.08)

 

(0.07)

Effect of gain on sale of securities

 

-

 

-

 

(0.02)

 

-

 

-

Tax on gain on sale

 

-

 

-

 

.01

 

-

 

-

Effect of Treasury awards

 

-

 

(0.01)

 

(0.07)

 

(0.02)

 

(0.07)

Tax on Treasury awards

 

-

 

-

 

0.02

 

0.01

 

0.02

Diluted earnings per share, operating

$

0.70

$

0.63

$

0.64

$

0.61

$

0.57

 

 

 

 

 

 

 

 

 

 

 

 

 

Year to Date

 

2019

 

2018

 

Diluted earnings per share

 

$

1.19

 

$

0.74

 

Effect of acquisition charges

 

 

0.19

 

 

0.45

 

Tax on acquisition charges

 

 

(0.04)

 

 

(0.10)

 

Effect of gain on sale of securities

 

 

-

 

 

-

 

Tax on gain on sale

 

 

-

 

 

-

 

Effect of Treasury awards

 

 

(0.01)

 

 

(0.08)

 

Tax on Treasury awards

 

 

-

 

 

0.02

 

Diluted earnings per share, operating

 

$

1.33

 

$

1.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year to Date

 

2019

 

2018

 

Net income available to common shareholders

 

$

19,618

 

$

9,202

 

Acquisition charges

 

 

3,270

 

 

5,596

 

Tax on acquisition charges

 

 

(735)

 

 

(1,303)

 

Gain on sale of securities

 

 

-

 

 

-

 

Tax on gain on sale

 

 

-

 

 

-

 

Treasury awards

 

 

(233)

 

 

(917)

 

Tax on Treasury awards

 

 

59

 

 

232

 

Net earnings available to common shareholders, operating

 

$

21,979

 

$

12,810

 

 

 

 

Three Months Ended

Average Balance Sheet Data

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Sept 30,
2018

June 30,
2018

Total average assets A

$

3,460,394

$

3,181,761

$

2,812,212

$

2,470,607

$

2,443,176

Total average earning assets B

 

3,049,874

$

2,815,680

$

2,500,709

$

2,210,894

$

2,228,831

 

 

`

 

 

 

Common Equity C

$

454,965

$

390,217

$

328,250

$

284,839

$

274,535

Less intangible assets

 

146,662

 

127,664

 

105,848

 

65,762

 

57,443

Tangible common equity D

$

308,303

$

262,553

$

222,402

$

219,077

$

217,092

 

 

 

Three Months Ended

Net Interest Income Fully Tax Equivalent

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Sept 30,
2018

June 30,
2018

Net interest income E

$

30,772

$

27,131

$

25,270

$

21,669

$

21,569

Tax-exempt investment income

 

(790)

 

(758)

 

(749)

 

(757)

 

(758)

Taxable investment income

 

1,058

 

1,015

 

1,003

 

1,013

 

1,015

Net Interest Income Fully Tax Equivalent F

$

31,040

$

27,388

$

25,524

$

21,925

$

21,826

 

 

 

 

 

 

Annualized Net Interest Margin E/B

 

4.04%

 

3.85%

 

4.04%

 

3.92%

 

3.87%

Annualized Net Interest Margin, Fully Tax Equivalent F/B

 

4.07%

 

3.89%

 

4.08%

 

3.97%

 

3.92%

 

 

 

 

 

 

 

Three Months Ended

Core Net Interest Margin

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Sept 30,
2018

June 30,
2018

Net interest income (FTE)

$

31,040

$

27,388

$

25,524

$

21,925

$

21,826

Less purchase accounting adjustments

 

1,607

 

1,147

 

1,414

 

541

 

510

Net interest income, net of purchase accounting adj G

$

29,433

$

26,241

$

24,110

$

21,384

$

21,316

 

 

 

 

 

 

Total average earning assets

$

3,049,874

$

2,815,680

$

2,500,709

$

2,210,894

$

2,228,831

Add average balance of loan valuation discount

 

15,265

 

13,869

 

12,803

 

6,836

 

6,046

Avg earning assets, excluding loan valuation discount H

$

3,065,139

$

2,829,549

$

2,513,511

$

2,217,730

$

2,234,877

 

 

 

 

 

 

Core net interest margin G/H

 

3.84%

 

3.71%

 

3.84%

 

3.86%

 

3.82%

 

 

 

 

 

 

 

Three Months Ended

Efficiency Ratio

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Sept 30,
2018

June 30,
2018

Operating Expense

 

 

 

 

 

Total non-interest expense

$

20,891

$

21,893

$

22,245

$

19,786

$

19,680

Pre-tax non-operating expenses

 

(91)

 

(3,179)

 

(4,155)

 

(4,059)

 

(3,838)

Adjusted Operating Expense I

$

20,800

$

18,714

$

18,090

$

15,727

$

15,842

 

 

 

 

 

 

Operating Revenue

 

 

 

 

 

Net interest income, FTE

$

31,040

$

27,388

$

25,524

$

21,925

$

21,826

Total non-interest income

 

6,716

 

5,554

 

6,396

 

5,074

 

5,632

Pre-tax non-operating items

 

-

 

(233)

 

(1,292)

 

(233)

 

(917)

Adjusted Operating Revenue J

$

37,756

$

32,709

$

30,628

$

26,766

$

26,541

 

 

 

 

 

 

Efficiency Ratio, operating I/J

 

55.09%

 

57.21%

 

59.06%

 

58.76%

 

59.69%

 

 

 

 

 

 

 

Three Months Ended

Return Ratios

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Sept 30,
2018

June 30,
2018

Net income available to common shareholders K

$

11,983

$

7,635

$

6,861

$

5,162

$

5,245

Acquisition charges

 

91

 

3,179

 

4,155

 

4,059

 

3,838

Tax on acquisition charges

 

(23)

 

(712)

 

(910)

 

(1,027)

 

(948)

Gain on sale

 

-

 

-

 

(342)

 

-

 

-

Tax on gain on sale

 

-

 

-

 

86

 

-

 

-

Treasury awards

 

-

 

(233)

 

(950)

 

(233)

 

(917)

Tax on Treasury awards

 

-

 

59

 

242

 

59

 

232

Net earnings available to common shareholders, oper L

$

12,051

$

9,928

$

9,142

$

8,020

$

7,450

 

 

 

 

 

 

Annualized return on avg assets K/A

 

1.39%

 

0.96%

 

0.98%

 

0.84%

 

0.86%

Annualized return on avg assets, oper L/A

 

1.39%

 

1.25%

 

1.30%

 

1.30%

 

1.22%

Annualized return on avg common equity, oper L/C

 

10.60%

 

10.18%

 

11.14%

 

11.26%

 

10.85%

Annualized return on avg tangible common equity, oper L/D

 

15.64%

 

15.13%

 

16.44%

 

14.64%

 

13.72%

 

 

 

 

 

 

Mortgage Department

 

 

 

 

 

Net Interest Income after provision for loan losses

$

194

$

176

$

267

$

154

$

214

Loan fee income

 

1,559

 

909

 

969

 

1,066

 

1,213

Salaries and employee benefits

 

941

 

823

 

774

 

855

 

903

Other non-interest expense

 

140

 

154

 

124

 

136

 

127

Earnings before income taxes

$

672

$

108

$

338

$

229

$

397

 

Contacts

M. Ray “Hoppy” Cole
Chief Executive Officer

Dee Dee Lowery
Chief Financial Officer
(601) 268-8998

Contacts

M. Ray “Hoppy” Cole
Chief Executive Officer

Dee Dee Lowery
Chief Financial Officer
(601) 268-8998