The First Bancshares, Inc. Reports a 137.7% Increase In Net Income Available to Common Shareholders for the Third Quarter Ended September 30, 2019; Declares Quarterly Dividend

HATTIESBURG, Miss.--()--The First Bancshares, Inc. (“FBMS” or “the Company”) (NASDAQ: FBMS), holding company for The First, A National Banking Association, (www.thefirstbank.com) reported today net income available to common shareholders of $12.3 million for the quarter ended September 30, 2019, an increase of $7.1 million, or 137.7%, compared to $5.2 million for the quarter ended September 30, 2018, and an increase of $0.3 million, or 2.4%, compared to the second quarter of 2019. Operating net earnings increased 59.9%, or $4.8 million, for the quarter ended September 30, 2019, totaling $12.8 million as compared to $8.0 million for the third quarter of 2018, and increased $0.8 million, or 6.4%, as compared to $12.1 million for the second quarter of 2019. Operating net earnings for the third quarter of 2019 excludes merger-related costs of $0.6 million, net of tax. Operating net earnings for the third quarter of 2018 excludes merger-related costs of $3.0 million, net of tax, and income in the form of financial assistance grant from the U. S. Department of Treasury of $0.2 million, net of tax. Operating net earnings for the second quarter of 2019 excludes merger-related costs of $0.1 million, net of tax.

For the third quarter of 2019, fully diluted earnings per share were $0.71, compared to $0.39 for the third quarter of 2018 and $0.69 for the second quarter of 2019. Excluding the impact of the merger-related costs and income described above, fully diluted operating earnings per share for the third quarter of 2019 were $0.74 as compared to $0.61 for the third quarter of 2018, and $0.70 for the second quarter of 2019. Fully diluted earnings per share for the third quarter of 2019 include the purchase of 13,873 shares related to the Company’s $20 million share repurchase program. Fully diluted earnings per share for second quarter of 2019 include the purchase of 143,566 shares related to the Company’s $20 million share repurchase program.

Highlights for the Quarter:

  • On July 22, 2019, the Company announced the signing of an Agreement and Plan of Merger with First Florida Bancorp, Inc. (“FFB”), parent company of First Florida Bank, headquartered in Destin, FL. Upon completion, the acquisition will add 7 locations servicing the areas of Destin, Fort Walton, Crestview and Panama City, Florida. The closing of the transaction is expected to occur on October 31, 2019 subject to customary closing conditions.
  • In connection with the acquisition of FFB, both regulatory and FFB shareholder approval have been obtained.
  • Net interest margin for the linked quarter improved 2 bps when excluding the impact of purchase accounting adjustments.
  • Operating net earnings increased 59.9% to $12.8 million for the quarter ended September 30, 2019 as compared to the third quarter of 2018.

M. Ray “Hoppy” Cole, President and Chief Executive Officer, commented, “We are pleased with the continued improvement in the earnings of our Company. The substantial increase in operating earnings year over year and on a linked quarter basis are reflective of our teams focus on the successful integration of multiple acquisitions over the last year. During the quarter we announced our upcoming merger with First Florida Bancorp. First Florida is a high performing, well run bank headquartered in Destin. Our partnership is a perfect strategic fit adding additional market share in Florida and opening up new markets for us in Destin, Panama City and the surrounding areas.

Balance Sheet

Consolidated assets increased $9.4 million to $3.482 billion at September 30, 2019 from $3.473 billion at June 30, 2019 primarily related to an increase in investment securities offset by an increase in borrowings due to the seasonality of the public fund portfolio.

Total average loans were $2.343 billion at September 30, 2019, as compared to $2.338 billion at June 30, 2019, and $1.721 billion at September 30, 2018, representing an increase of $5.8 million, or 0.25%, for the sequential quarter comparison, and an increase of $622.5 million, or 36.2%, as compared to September 30, 2018. The acquisitions of FMB Banking Corporation (“FMB”) and FPB Financial Corp (“FPB”), accounted for $530.2 million, net of fair value marks, of the total increase in average loans as compared to the third quarter of 2018.

Total average deposits were $2.766 billion at September 30, 2019, as compared to $2.863 billion at June 30, 2019, and $2.070 billion at September 30, 2018, representing a decrease of $96.8 million, or 3.4%, for the sequential quarter comparison, and an increase of $695.9 million, or 33.6%, as compared to September 30, 2018. The acquisitions of FMB and FPB accounted for $719.6 million of the total increase in average deposits as compared to September 30, 2018. The decrease in average deposits of $96.8 million during the third quarter of 2019 was largely due to decreases in public fund deposits of $73.1 million, which is attributable to the seasonality of public funds.

Asset Quality

Nonperforming assets totaled $47.3 million at September 30, 2019, an increase of $9.3 million compared to $38.0 million at June 30, 2019 and an increase of $23.9 million compared to $23.4 million at September 30, 2018. Nonaccrual loans and loans past due 90 days and over still accruing increased $10.7 million while other real estate decreased $1.2 million for the linked quarter. 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 0.56% at September 30, 2019, 0.51% at June 30, 2019 and 0.56% at September 30, 2018. The ratio of annualized net charge-offs (recoveries) to total loans was 0.004% for the quarter ended September 30, 2019 compared to (0.01%) for the quarter ended June 30, 2019 and 0.03% for the quarter ended September 30, 2018.

Third Quarter 2019 vs. Third Quarter 2018 Earnings Comparison

Net income available to common shareholders for the third quarter of 2019 totaled $12.3 million compared to $5.2 million for the third quarter of 2018, an increase of $7.1 million or 137.7%.

Operating net earnings for the third quarter of 2019 totaled $12.8 million compared to $8.0 million for the third quarter of 2018, an increase of $4.8 million or 59.9%. The calculation of operating net earnings excludes the merger-related costs for each quarter and the income for the third quarter of 2018 as discussed above.

Net interest income for the third quarter of 2019 was $30.5 million, an increase of $8.8 million when compared to the third quarter of 2018. The increase was due to interest income earned on a higher volume of loans. Fully tax equivalent (“FTE”) net interest income totaled $30.7 million and $21.9 million for the third quarter of 2019 and 2018, respectively. FTE net interest income increased $8.8 million in the prior year quarterly comparison due to increased loan volume. Purchase accounting adjustments accounted for $0.8 million of the difference in net interest income for the third quarter comparisons. Third quarter 2019 FTE net interest margin of 4.05% included 19 basis points related to purchase accounting adjustments compared to 3.97% for the same quarter in 2018, which included 11 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin remained unchanged at 3.86% in prior year quarterly comparison.

Non-interest income increased $2.0 million for the third quarter of 2019 as compared to the third quarter of 2018 due to increased service charges and interchange fee income of $1.5 million primarily based on the increased deposit base due to the acquisitions. Mortgage income increased $0.7 million in prior year quarterly comparison. Non-interest income for the third quarter of 2018 included the Financial Assistance Award of $0.2 million from the U.S. Department of the Treasury as a result of our designation as a Community Development Financial Institution.

Third quarter 2019 non-interest expense was $20.8 million, an increase of $1.0 million, or 5.3% as compared to the third quarter of 2018. Excluding the decrease in acquisition charges of $3.4 million for the third quarter of 2019, non-interest expense increased $4.4 million in the third quarter of 2019, of which $3.4 million was attributable to the operations of FMB and FPB, as compared to third quarter of 2018.

Investment securities totaled $640.8 million, or 18.4% of total assets at September 30, 2019, versus $444.0 million, or 17.7% of total assets at September 30, 2018. The average balance of investment securities increased $174.1 million in prior year quarterly comparison, primarily as a result of the acquisitions. The average tax equivalent yield on investment securities increased 22 basis points to 3.24% from 3.02% in prior year quarterly comparison. The investment portfolio had a net unrealized gain of $13.9 million at September 30, 2019 as compared to a net unrealized loss of $8.4 million at September 30, 2018.

The FTE average yield on all earning assets increased 26 basis points in prior year quarterly comparison, from 4.68% for the third quarter of 2018 to 4.94% for the third quarter of 2019. Average interest expense increased 25 basis points from 0.92% for the third quarter of 2018 to 1.17% for the third quarter of 2019 due primarily to increased interest-bearing deposit accounts. Cost of all deposits averaged 76 basis points for the third quarter of 2019 compared to 53 basis points for the third quarter of 2018.

Third Quarter 2019 vs Second Quarter 2019 Earnings Comparison

Net income available to common shareholders for the third quarter of 2019 increased $0.3 million, or 2.4% to $12.3 million compared to $12.0 million for the second quarter of 2019. For the third quarter of 2019, fully diluted earnings per share were $0.71, compared to $0.69 for the second quarter of 2019.

Operating net earnings for the third quarter of 2019 compared to the second quarter of 2019 increased $0.8 million or 6.4% from $12.1 million to $12.8 million. Operating net earnings exclude the merger-related costs for the third and second quarters of 2019 as discussed above. Excluding the impact of the merger-related costs described above, fully diluted operating earnings per share for the third quarter of 2019 were $0.74 as compared to $0.70 for the second quarter of 2019.

Net interest income for the third quarter of 2019 was $30.5 million as compared to $30.8 million for the second quarter of 2019, a decrease of $0.3 million. FTE net interest income decreased $0.3 million to $30.7 million from $31.0 million in sequential-quarter comparison. Both comparison decreases were due to the reduction in purchase accounting adjustments. Third quarter 2019 FTE net interest margin of 4.05% included 19 basis points related to purchase accounting adjustments compared to 4.07% for the second quarter in 2019, which included 23 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin increased 2 basis points in sequential quarter comparison.

Investment securities totaled $640.8 million, or 18.4% of total assets at September 30, 2019, versus $622.8 million, or 17.9% of total assets at June 30, 2019. The average balance of investment securities remained unchanged in sequential-quarter comparison. The average tax equivalent yield on investment securities decreased 16 basis points to 3.24% from 3.40% in sequential-quarter comparison. The investment portfolio had a net unrealized gain of $13.9 million at September 30, 2019 as compared to a net unrealized gain of $12.6 million at June 30, 2019.

The FTE average yield on all earning assets decreased in sequential-quarter comparison from 4.96% to 4.94%. Average interest expense increased 1 basis point from 1.16% for the second quarter of 2019 to 1.17% for the third quarter of 2019. Cost of all deposits averaged 76 basis points for the third quarter of 2019 compared to 77 basis points for the second quarter of 2019.

Non-interest income increased $0.4 million in sequential-quarter comparison resulting from increased mortgage income and interchange fee income.

Non-interest expense for the third quarter of 2019 was $20.8 million compared to $20.9 million for the second quarter of 2019. Excluding acquisition charges for each quarter, non-interest expense decreased $0.7 million in sequential-quarter comparison, of which $0.4 million is attributable to the savings in operational costs associated to FPB which was acquired in the first quarter.

Year-to-Date Earnings Comparison

In year-over-year comparison, net income available to common shareholders increased $17.5 million, or 122.0%, from $14.4 million for the nine months ended September 30, 2018 to $31.9 million for the same period ended September 30, 2019. Operating net earnings increased $14.0 million or 66.9% from $20.8 million for the nine months ended September 30, 2018 to $34.8 million for the same period ended September 30, 2019. Operating net earnings excludes merger-related costs of $3.1 million, net of tax, and financial assistance grants of $0.2 million, net of tax, for the year-to-date period ended September 30, 2019, and merger-related costs of $7.3 million, net of tax, and financial assistance grants of $0.9 million, net of tax, for the year-to-date period ended September 30, 2018.

Net interest income increased $28.7 million in year-over-year comparison, primarily due to interest income earned on a higher volume of loans.

Non-interest income was $19.4 million at September 30, 2019, an increase of $5.2 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 $63.6 million at September 30, 2019, an increase of $9.5 million in year-over-year comparison of which $3.5 million is related to the acquisition and operations of Southwest, Sunshine, FMB and FPB. The remaining increase of $6.0 million in expenses for the legacy bank are related to salaries and employee benefits of $2.5 million and other expenses of $3.5 million.

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 November 22, 2019 to shareholders of record as of the close of business on November 8, 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 related to the proposed acquisition of FFB and the acquisitions of Southwest, Sunshine, FMB and FPB, including the risk that the proposed acquisition of FFB does not close when expected or at all because conditions to closing are not satisfied on a timely basis or at all, the terms of the proposed transactions with FFB need to be modified to satisfy such conditions, and that the anticipated benefits from the transactions with Southwest, Sunshine, FMB, FPB and FFB 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

9/30/19

Quarter

Ended

6/30/19

Quarter

Ended

3/31/19

Quarter

Ended

12/31/18

Quarter

Ended

9/30/18

Total Interest Income

$ 37,241

$ 37,571

$ 33,273

$ 30,555

$ 25,628

Total Interest Expense

6,782

6,799

6,142

5,285

3,959

Net Interest Income

30,459

30,772

27,131

25,270

21,669

FTE net interest income*

30,739

31,040

27,388

25,524

21,925

Provision for loan losses

974

791

1,123

574

412

Non-interest income

7,103

6,716

5,554

6,396

5,074

Non-interest expense

20,825

20,891

21,893

22,249

19,786

Earnings before income taxes

15,763

15,806

9,669

8,843

6,545

Income tax expense

3,491

3,823

2,034

1,982

1,383

Net income available to common shareholders

$ 12,272

$ 11,983

$ 7,635

$ 6,861

$ 5,162

 

 

 

 

 

 

 

 

 

 

 

 

PER COMMON SHARE DATA

 

 

 

 

 

Basic earnings per share

$ 0.72

$ 0.70

$ 0.49

$ 0.48

$ 0.39

Diluted earnings per share

0.71

0.69

0.48

0.48

0.39

Diluted earnings per share, operating*

0.74

0.70

0.63

0.64

0.61

Quarterly dividends per share

.08

.08

.07

.05

.05

Book value per common share at end of period

27.92

27.22

26.30

24.49

22.09

Tangible book value per common share at period end*

19.39

18.72

17.79

16.88

17.10

Market price at end of period

32.30

30.34

30.90

30.91

39.05

Shares outstanding at period end

17,125,035

17,129,915

17,272,731

14,830,598

13,074,516

Weighted average shares outstanding:

 

 

 

 

 

Basic

17,131,080

17,182,049

15,646,476

14,247,555

13,072,455

Diluted

17,267,953

17,311,626

15,770,622

14,371,562

13,192,207

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCE SHEET DATA

 

 

 

 

 

Total assets

$3,439,202

$3,460,394

$3,181,761

$2,812,212

$2,470,607

Loans and leases

2,343,392

2,337,583

2,167,495

1,959,179

1,720,884

Total deposits

2,765,816

2,862,653

2,599,842

2,296,966

2,069,910

Total common equity

470,024

454,965

390,217

328,250

284,839

Total tangible common equity*

324,619

308,303

262,553

222,402

219,077

 

 

 

 

 

 

 

 

 

 

 

 

SELECTED RATIOS

 

 

 

 

 

Annualized return on avg assets

1.43%

1.39%

0.96%

0.98%

0.84%

Annualized return on avg assets, operating*

1.49%

1.39%

1.25%

1.30%

1.30%

Annualized return on avg common equity, operating*

10.91%

10.60%

10.18%

11.14%

11.26%

Annualized return on avg tangible common equity, oper*

15.80%

15.64%

15.13%

16.44%

14.64%

Average loans to average deposits

84.73%

81.66%

83.37%

85.29%

83.14%

FTE Net Interest Margin*

4.05%

4.07%

3.89%

4.08%

3.97%

Efficiency Ratio

55.03%

55.33%

66.46%

69.69%

73.28%

Efficiency Ratio, operating*

53.17%

55.09%

57.21%

59.06%

58.76%

 

 

 

 

 

 

 

 

 

 

 

 

CREDIT QUALITY

 

 

 

 

 

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

0.56%

0.51%

0.48%

0.49%

0.56%

Nonperforming assets to tangible equity + ALLL

13.71%

11.42%

12.32%

13.17%

10.05%

Nonperforming assets to total loans + OREO

2.00%

1.61%

1.67%

1.66%

1.33%

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

0.004%

(0.01%)

(0.008%)

0.02%

0.03%

 

 

 

 

 

 

*See reconciliation of Non-GAAP financial measures

 

 

 
 
 

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

 

BALANCE SHEET                                                                                                           

Sept 30,

2019

June 30,

2019

Mar 31,

2019

Dec 31,

2018

Sept 30,

2018

   Assets

 

 

 

 

 

   Cash and cash equivalents

$     159,990

 $     165,984

$     248,576

$     159,107

$  122,371

   Securities available-for-sale

612,002

598,607

598,796

492,701

424,940

   Securities held-to-maturity

6,328

6,396

6,397

6,000

6,000

    Other investments

22,517

17,819

15,298

16,227

13.104

      Total investment securities

640,847

622,822

620,491

514,928

444,044

   Loans held for sale

11,104

8,597

6,238

4,838

4,269

   Total loans

2,349,986

2,351,998

2,335,348

2,060,422

1,748,483

   Allowance for loan losses

(13,043)

(12,091)

(11,235)

(10,065)

(9,765)

      Loans, net

2,336,943

2,339,907

2,324,113

2,050,357

1,738,718

   Premises and equipment

96,726

97,115

94,624

74,783

62,342

   Other Real Estate Owned

9,974

11,205

11,588

10,869

8,453

   Goodwill and other intangibles

146,091

145,649

147,150

112,916

65,238

   Other assets

80,256

81,305

80,199

76,188

66,355

      Total assets

$3,481,931

$3,472,584

$3,532,979

$3,003,986

$2,511,790

 

 

 

 

 

 

   Liabilities and Shareholders’ Equity

 

 

 

 

 

   Non-interest bearing deposits

$   642,054

$   645,838

$   655,900

$   570,148

$   430,430

   Interest-bearing deposits

2,119,291

2,185,362

2,258,418

1,887,311

1,616,016

      Total deposits

2,761,345

2,831,200

2,914,318

2,457,459

2,046,446

   Borrowings

136,250

71,250

61,750

85,500

85,508

   Subordinated debentures

80,639

80,600

80,561

80,521

75,117

   Other liabilities

25,609

23,253

22,003

17,252

15,921

      Total liabilities

3,003,843

3,006,303

3,078,632

2,640,732

2,222,992

   Total shareholders’ equity

478,088

466,281

454,347

363,254

288,798

      Total liabilities and shareholders’ equity

$3,481,931

$3,472,584

$3,532,979

$3,003,986

$2,511,790

 

 
 
 

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

EARNINGS STATEMENT                                                                                                               

Three Months Ended

9/30/19

6/30/19

3/31/19

12/31/18

9/30/18

   Interest Income:

 

 

 

 

 

     Loans, including fees

  $  31,279

$  30,912

$  27,569

$  25,184

$  21,824

     Investment securities

4,752

5,017

4,339

3,785

3,126

     Accretion of purchase accounting adjustments

1,201

1,552

1,235

1,532

583

     Other interest income

9

90

130

54

95

        Total interest income

37,241

37,571

33,273

30,555

25,628

   Interest Expense:

 

 

 

 

 

     Deposits

5,156

5,377

4,275

3,506

2,740

     Borrowings

451

288

546

482

52

     Subordinated debentures

1,270

1,188

1,233

1,179

1,125

     Accretion of purchase accounting adjustments

(95)

(54)

88

118

42

        Total interest expense

6,782

6,799

6,142

5,285

3,959

   Net interest income  

30,459

30,772

27,131

25,270

21,669

   Provision for loan losses

974

791

1,123

574

412

   Net interest income after provision for loan losses

29,485

29,981

26,008

24,696

21,257

 

 

 

 

 

 

   Non-interest Income:

 

 

 

 

 

   Service charges on deposit accounts                                                  

1,979

1,918

1,831

1,887

1,538

   Mortgage Income                                                                                  

1,800

1,559

909

969

1,066

   Interchange Fee Income                                                                              

2,252

2,045

1,652

1,527

1,180

   Gain (loss) on securities, net                                                                 

57

36

38

334

              -

   Financial Assistance Award/Bank Enterprise Award                                        

-

-

233

950

233

   Other charges and fees                                                                        

1,015

1,158

891

729

1,057

        Total non-interest income                                                              

7,103

6,716

5,554

6,396

5,074

 

 

 

 

 

 

   Non-interest expense (benefit):

 

 

 

 

 

   Salaries and employee benefits

11,612

11,615

10,697

10,336

9,266

   Occupancy expense

2,632

2,532

2,442

2,281

2,163

   FDIC premiums

111

426

(52)

369

278

   Marketing

62

160

175

173

60

   Amortization of core deposit intangibles

796

796

716

750

349

   Other professional services

1,140

980

920

452

847

   Acquisition charges

705

91

3,179

4,155

4,059

   Other non-interest expense

3,767

4,291

3,816

3,733

2,764

   Total Non-interest expense                                                        

20,825

20,891

21,893

22,249

19,786

      Earnings before income taxes

15,763

15,806

9,669

8,843

6,545

   Income tax expense

3,491

3,823

2,034

1,982

1,383

      Net income available to common shareholders

$  12,272

$  11,983

$  7,635

$  6,861

$  5,162

 

 

 

 

 

 

 

 

 

 

 

 

   Diluted earnings per common share

$    0.71

$    0.69

$    0.48

$    0.48

$    0.39

   Diluted earnings per common share, operating*

$    0.74

$    0.70

$    0.63

$    0.64

$    0.61

*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

 

$  89,760

 

$  58,905

 

     Investment securities

 

14,108

 

8,968

 

     Accretion of purchase accounting adjustments

 

3,988

 

1,201

 

     Other interest income

 

229

 

348

 

        Total interest income

 

108,085

 

69,422

 

   Interest Expense:

 

 

 

 

 

     Deposits

 

14,808

 

7,076

 

     Borrowings

 

1,285

 

659

 

     Subordinated debentures

 

3,691

 

1,977

 

     Amortization of purchase accounting adjustments

 

(61)

 

91

 

        Total interest expense

 

19,723

 

9,803

 

   Net interest income  

 

88,362

 

59,619

 

   Provision for loan losses

 

2,888

 

1,546

 

   Net interest income after provision for loan losses

 

85,474

 

58,073

 

 

 

 

 

 

 

   Non-interest Income:

 

 

 

 

 

   Service charges on deposit accounts  

 

5,728

 

3,906

 

   Mortgage Income

 

4,268

 

3,079

 

   Interchange Fee Income

 

5,949

 

3,720

 

   Gain (loss) on securities, net

 

131

 

(5)

 

   Financial Assistance Award/Bank Enterprise Award

 

233

 

1,150

 

   Other charges and fees

 

3,064

 

2,314

 

        Total non-interest income

 

19,373

 

14,164

 

 

 

 

 

 

 

   Non-interest expense:

 

 

 

 

 

   Salaries and employee benefits

 

33,924

 

26,557

 

   Occupancy expense

 

7,606

 

5,844

 

   FDIC premiums

 

485

 

1,013

 

   Marketing

 

397

 

210

 

   Amortization of core deposit intangibles

 

2,308

 

906

 

   Other professional services

 

3,040

 

1,474

 

   Acquisition charges

 

3,975

 

9,655

 

   Other non-interest expense

 

11,874

 

8,405

 

   Total Non-interest expense                                                        

 

63,609

 

54,064

 

      Earnings before income taxes

 

41,238

 

18,173

 

   Income tax expense

 

9,348

 

3,809

 

      Net income available to common shareholders

 

$    31,890

 

$    14,364

 

 

 

 

 

 

 

 

 

 

 

 

 

   Diluted earnings per common share

 

$      1.90

 

$      1.13

 

   Diluted earnings per common share, operating*

 

$      2.07

$      1.64

 

*See reconciliation of Non-GAAP financial measures

 

 

 

 

 

 

 
 
 

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

COMPOSITION OF LOANS                                                           

Sept 30,

2019

Percent

of Total

June 30,

2019

Mar 31,

2019

Dec 31,

2018

Sept 30,

2018

Percent

of Total

Commercial, financial and agricultural

$   338,584

14.3%

$   342,535

$   340,333

$ 301,182

$ 246,401

14.1%

Real estate – construction

284,103

12.0%

352,826

348,788

298,718

251,240

14.3%

Real estate – commercial

943,218

39.9%

881,831

857,918

776,880

654,040

37.3%

Real estate – residential

724,860

30.7%

713,350

722,611

617,804

529,515

30.2%

Lease Financing Receivable

3,239

0.1%

3,616

3,060

2,891

2,659

0.2%

Obligations of States & subdivisions

16,545

0.7%

17,192

13,734

16,941

16,374

0.9%

Consumer

39,437

1.7%

40,648

48,904

46,006

48,254

2.8%

Loans held for sale

11,104

0.6%

8,597

6,238

4,838

4,269

0.2%

  Total loans

$2,361,090

100%

$2,360,595

$2,341,586

$2,065,260

$1,752,752

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPOSITION OF DEPOSITS                                                                     

Sept 30,

2019

Percent

of Total

June 30,

2019

Mar 31,

2019

Dec 31,

2018

Sept 30,

2018

Percent

of Total

Noninterest bearing

$642,054

23.3%

$645,838

$655,900

$570,148

$430,430

21.0%

NOW and other

926,704

33.5%

999,881

1,062,112

835,434

705,851

34.5%

Money Market/Savings

651,539

23.6%

645,611

647,783

566,276

503,772

24.6%

Time Deposits of less than $250,000

401,559

14.5%

408,164

414,281

384,030

321,619

15.7%

Time Deposits of $250,000 or more

139,489

5.1%

131,706

134,242

101,571

84,774

4.2%

   Total Deposits

$2,761,345

100%

$2,831,200

$2,914,318

$2,457,459

$2,046,446

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSET QUALITY DATA                                                                                  

Sept 30,

2019

 

June 30,

2019

Mar 31,

2019

Dec 31,

2018

Sept  30,

2018

 

Nonaccrual loans

$ 35,175

 

$  25,608

$  26,502

$  21,895

$   13,572

 

Loans past due 90 days and over

2,116

 

989

943

1,325

805

 

   Total nonperforming loans

37,291

 

26,597

27,445

23,220

14,377

 

Other real estate owned

9,974

 

11,205

11,588

10,869

8,453

 

Nonaccrual securities

52

 

208

208

208

616

 

   Total nonperforming assets

$ 47,317

$38,010

$39,241

$34,297

$ 23,446

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

1.36%

 

1.09%

1.11%

1.14%

0.93%

 

Nonperforming assets to total loans + OREO

2.00%

 

1.61%

1.67%

1.66%

1.33%

 

ALLL to nonperforming loans

34.98%

 

45.46%

40.94%

43.35%

67.92%

 

ALLL to total loans

0.56%

 

0.51%

0.48%

0.49%

0.56%

 

 

 

 

 

 

 

 

 

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

  $     23

 

$       (65)

$       (47)

$        93

$       151

 

Annualized QTD net chg-offs (recs) to loans

0.004%

 

(0.01%)

(0.008%)

0.02%

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

September 30, 2019

 

June 30, 2019

 

March 31, 2019

 

December  31, 2018

 

September 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

 $        494,184

 $       3,924

3.18%

 $     497,988

 $      4,227

3.40%

 $     435,576

 $      3,581

3.29%

 $     369,820

 $      2,808

3.04%

 $     331,601

 $      2,369

2.86%

Tax-exempt   
       securities

           127,750

          1,108

3.47%

         124,367

         1,058

3.40%

        117,831

         1,015

3.45%

         114,055

         1,003

3.52%

         116,235

         1,013

3.49%

   Total investment  
       securities

           621,934

          5,032

3.24%

         622,355

         5,285

3.40%

        553,407

         4,596

3.32%

         483,875

         3,811

3.15%

         447,836

         3,382

3.02%

FFS & Int bearing dep

                         -

                      -

                 
       in other banks

             71,165

                  9

0.05%

           89,936

               90

0.40%

           94,778

             130

0.55%

           57,655

             282

1.96%

           42,174

               95

0.90%

Loans 

       2,343,392

        32,480

5.54%

     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%

     Total Interest
         earning assets

       3,036,491

        37,521

4.94%

     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%

Other assets

           402,711

   

         410,520

        366,081

         311,503

         259,713

     Total assets

 $    3,439,202

 $  3,460,394

 $ 3,181,761

 $  2,812,212

 $  2,470,607

 
Interest-bearing
     liabilities:    
Deposits

 $    2,140,419

 $       5,061

0.95%

 $  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%

Repo

                         -

                   -

0.00%

                      -

                  -

0.00%

                      -

                  -

0.00%

                      -

                  -

0.00%

                      -

                  -

0.00%

Fed funds purchased

                6,708

                11

0.66%

             5,450

               30

2.20%

                 150

                  5

13.33%

             1,455

               18

4.95%

             1,893

               27

5.71%

FHLB

             88,533

              440

1.99%

           32,310

             258

3.19%

           86,119

             541

2.51%

           92,352

             465

2.01%

           22,469

               25

0.45%

Subordinated           
     debentures

             80,619

          1,270

6.30%

           80,579

         1,188

5.90%

           80,540

         1,233

6.12%

           75,391

         1,187

6.30%

           75,124

         1,125

5.99%

     Total interest  
         bearing liabilities

       2,316,279

          6,782

1.17%

     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%

Other liabilities

           652,899

         655,628

        600,017

         537,984

         457,087

Shareholders' equity

           470,024

   

         454,965

        390,217

         328,250

   

         284,839

   
     Total liabilities and
          shareholders'
          equity

 $    3,439,202

 $  3,460,394

 $ 3,181,761

 $  2,812,212

 $  2,470,607

 
Net interest 
     income (FTE)*

 $    30,739

3.77%

 $   31,040

3.81%

 $    27,388

3.64%

 $   25,524

3.84%

 $   21,925

3.77%

 
Net interest margin (FTE)*

4.05%

4.07%

3.89%

4.08%

3.97%

 
Core net interest
     margin*

3.86%

3.84%

3.71%

 

3.84%

3.86%

 
*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

Sept 30,

2019

June 30,

2019

Mar 31,

2019

Dec 31,

2018

Sept 30,

2018

   Book value per common share

  $  27.92

$  27.22

$  26.30

$  24.49

$  22.09

   Effect of intangible assets per share

8.53

8.50

8.51

7.61

4.99

     Tangible book value per common share

$  19.39

$  18.72

$  17.79

$  16.88

$  17.10

  

 

 

 

 

 

   Diluted earnings per share

$    0.71

$    0.69

$    0.48

$    0.48

$    0.39

   Effect of acquisition charges

0.04

0.01

0.21

0.29

0.31

   Tax on acquisition charges

(0.01)

-

(0.05)

(0.07)

(0.08)

   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)

   Tax on Treasury awards

-

-

-

0.02

0.01

      Diluted earnings per share, operating

$    0.74

$    0.70

$    0.63

$    0.64

$    0.61

  

 

 

 

 

 

 

 

 

 

 

 

 

Year to Date    

 

2019

 

2018

 

  Diluted earnings per share

 

$    1.90

 

$   1.13

 

  Effect of acquisition charges

 

0.24

 

0.76

 

  Tax on acquisition charges

 

(0.06)

 

(0.18)

 

  Effect of gain on sale of securities

 

-

 

-

 

  Tax on gain on sale

 

-

 

-

 

  Effect of Treasury awards

 

(0.01)

 

(0.09)

 

  Tax on Treasury awards

 

-

 

0.02

 

       Diluted earnings per share, operating

 

$   2.07

 

$  1.64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year to Date    

 

2019

 

2018

 

  Net income available to common shareholders

 

$   31,890

 

$  14,364

 

  Acquisition charges

 

3,975

 

9,655

 

  Tax on acquisition charges

 

(887)

 

(2,311)

 

  Gain on sale of securities

 

-

 

-

 

  Tax on gain on sale

 

-

 

-

 

  Treasury awards

 

(233)

 

(1,150)

 

  Tax on Treasury awards

 

59

 

290

 

        Net earnings available to common shareholders, operating

 

$  34,804

 

$  20,848

 

 

 

 

Three Months Ended

Average Balance Sheet Data

Sept 30,

2019

June 30,

2019

Mar 31,

2019

Dec 31,

2018

Sept 30,

2018

   Total average assets A

$3,439,202

$3,460, 394

$3,181,761

$2,812,212

$2,470,607

   Total average earning assets B

3,036,492

$3,049,874

$2,815,680

$2,500,709

$2,210,894

 

 

 

 

 

   Common Equity C 

$   470,024

$ 454,965

$ 390,217

$ 328,250

$ 284,839

   Less intangible assets

145,405

146,662

127,664

105,848

65,762

      Tangible common equity D

$   324,619

$ 308,303

$ 262,553

$ 222,402

$ 219,077

 

 

 

Three Months Ended

Net Interest Income Fully Tax Equivalent

Sept 30,

2019

June 30,

2019

Mar 31,

2019

Dec 31,

2018

Sept 30,

2018

   Net interest income E

$  30,459

$  30,772

$  27,131

$  25,270

$  21,669

   Tax-exempt investment income

(828)

(790)

(758)

(749)

(757)

   Taxable investment income

1,108

1,058

1,015

1,003

1,013

      Net Interest Income Fully Tax Equivalent F

 $  30,739

$  31,040

$  27,388

$  25,524

$  21,925

 

 

 

 

 

 

   Annualized Net Interest Margin E/B

4.01%

4.04%

3.85%

4.04%

3.92%

   Annualized Net Interest Margin, Fully Tax Equivalent F/B

4.05%

4.07%

3.89%

4.08%

3.97%

 

 

 

 

 

 

 

Three Months Ended

Core Net Interest Margin

Sept 30,

2019

June 30,

2019

Mar 31,

2019

Dec 31,

2018

Sept 30,

2018

   Net interest income (FTE)                                                              

$ 30,739

$  31,040

$  27,388

$  25,524

$  21,925

   Less purchase accounting adjustments

1,296

1,607

1,147

1,414

541

     Net interest income, net of purchase accounting adj G

$  29,443

$  29,433

$  26,241

$  24,110

$  21,384

 

 

 

 

 

 

   Total average earning assets

$3,036,492

$3,049,874

$2,815,680

$2,500,709

$2,210,894

   Add average balance of loan valuation discount

13,679

15,265

13,869

12,803

6,836

     Avg earning assets, excluding loan valuation discount H

$3,050,171

$3,065,139

$2,829,549

$2,513,511

$2,217,730

 

 

 

 

 

 

   Core net interest margin G/H

3.86%

3.84%

3.71%

3.84%

3.86%

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Efficiency Ratio

Sept 30,

2019

June 30,

2019

Mar 31,

2019

Dec  31,

2018

Sept 30,

2018

 Operating Expense

 

 

 

 

 

    Total non-interest expense

$  20,825

$  20,891

$  21,893

$  22,245

$  19,786

    Pre-tax non-operating expenses

(705)

(91)

(3,179)

(4,155)

(4,059)

 Adjusted Operating Expense I

$  20,120

$  20,800

$  18,714

$  18,090

$  15,727

 

 

 

 

 

 

 Operating Revenue

 

 

 

 

 

    Net interest income, FTE

$  30,739

$  31,040

$  27,388

$  25,524

$  21,925

    Total non-interest income

7,103

6,716

5,554

6,396

5,074

    Pre-tax non-operating items

(233)

(1,292)

(233)

  Adjusted Operating Revenue J

$  37,842

$  37,756

$  32,709

$  30,628

$  26,766

 

 

 

 

 

 

  Efficiency Ratio, operating I/J

53.17%

55.09%

57.21%

59.06%

58.76%

 

 

 

 

 

 

 

Three Months Ended

Return Ratios

Sept 30,

2019

June 30,

019

Mar 31,

2019

Dec 31,

2018

Sept 30,

2018

   Net income available to common shareholders K

$  12,272

$  11,983

$  7,635

$  6,861

$  5,162

   Acquisition charges

705

91

3,179

4,155

4,059

   Tax on acquisition charges

(152)

(23)

(712)

(910)

(1,027)

   Gain on sale

(342)

   Tax on gain on sale

86

   Treasury awards

(233)

(950)

(233)

   Tax on Treasury awards

59

242

59

   Net earnings available to common shareholders, oper L

$  12,825

$  12,051

$  9,928

$  9,142

$  8,020

 

 

 

 

 

 

  Annualized return on avg assets K/A

1.43%

1.39%

0.96%

0.98%

0.84%

  Annualized return on avg assets, oper L/A

1.49%

1.39%

1.25%

1.30%

1.30%

  Annualized return on avg common equity, oper L/C

10.91%

10.60%

10.18%

11.14%

11.26%

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

15.80%

15.64%

15.13%

16.44%

14.64%

 

 

 

 

 

 

Mortgage Department

 

 

 

 

 

Net Interest Income after provision for loan losses

$      200

$      194

$     176

$     267

$      154

Loan fee income

1,800

1,559

909

969

1,066

Salaries and employee benefits

986

941

823

774

855

Other non-interest expense

134

140

154

124

136

Earnings before income taxes

$      880

$      672

$      108

$     338

$      229

 

 

Contacts

For additional information, contact:

M. Ray “Hoppy” Cole
Chief Executive Officer

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

Contacts

For additional information, contact:

M. Ray “Hoppy” Cole
Chief Executive Officer

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