The First Bancshares, Inc. Reports 2014 Earnings and Declaration of Dividend

Company Release - 1/30/2015 12:02 PM ET

HATTIESBURG, Miss.--(BUSINESS WIRE)-- The First Bancshares, Inc. (NASDAQ: FBMS), holding company for The First, A National Banking Association, (www.thefirstbank.com) today reported earnings for the fourth quarter and fiscal year ended December 31, 2014. The First Bancshares, Inc. also announced a quarterly dividend of $.0375 per common share. The record date will be February 12, 2015 with a payable date of February 27, 2015.

Net income available to common stockholders for the three months ended December 31, 2014 amounted to $1,955,000, or $0.36 per diluted share, compared to $1,392,000, or $0.27 per diluted share for the same quarter in 2013, an increase of $563,000 or 40.4% in net income available to common stockholders.

Net income available to common stockholders for the year ended December 31, 2014 amounted to $6,251,000, or $1.19 per diluted share, compared to $4,215,000, or $0.96 per diluted share for the same period in 2013, an increase of $2,036,000 or 48.3% in net income available to common stockholders. Net income available to common stockholders exclusive of one-time items for the twelve months ended December 31, 2014 was $6,186,000, or $1.17 per diluted share, a 26.8% increase in net income available to common stockholders compared to $4,878,000 of net income available to common stockholders exclusive of one-time items for the twelve months ended December 31, 2013.

M. Ray “Hoppy” Cole, President & Chief Executive Officer, commented, “We are thrilled with the results our Company achieved during 2014. Outstanding execution by our team members produced exceptional asset growth across our entire footprint and a 40% increase in net income year over year. We remain focused on increasing our earnings through continued growth and improved operating efficiency. We are excited about the opportunities for our Company in 2015 and look forward to creating additional value for our shareholders.”

Balance Sheet Highlights

Total assets for the Company totaled $1.1 billion at December 31, 2014, an increase of $21.5 million compared with September 30, 2014. The increase during the fourth quarter of 2014 was attributable to the Company’s substantial loan growth during the period.

December 31, 2014 loans outstanding increased by $35.3 million, or approximately 21.0% on an annualized basis, compared with September 30, 2014, and increased $123.3 million, or 21.1%, compared to December 31, 2013 total loans outstanding. Loan growth of $123.3 million was composed of $40.9 million of loans acquired from Bay Bank and $24.2 million in loans generated from our new Baton Rouge location. The remaining loan growth of $58.2 million was diversified across our footprint from existing markets.

End of Period Loan Balances	12/31/14	09/30/14	12/31/13
(dollars in thousands)
Loans held for sale	$2,103	$3,769	$3,680
Commercial	106,109	100,263	81,792
Real Estate:
Mortgage-commercial	238,602	217,684	212,388
Mortgage-residential	256,406	248,125	202,343
Construction	84,935	83,908	67,287
Consumer and other	18,479	17,553	15,813
	$706,634	$671,302	$583,303

Non-performing assets totaled $11.6 million at December 31, 2014 compared to $11.4 million of non-performing assets at September 30, 2014 and $9.8 million at December 31, 2013. Non-performing assets represented 1.06% of total assets at December 31, 2014 compared to 1.06% of total assets at September 30, 2014, and compared to 1.04% at December 31, 2013. Non-performing loans totaled $6.7 million at December 31, 2014 compared to $6.1 million at September 30, 2014 and compared to $3.3 million of non-performing loans at December 31, 2013. Non-performing loans represented 0.95% of total loans at December 31, 2014 compared with 0.91% of total outstanding loans at September 30, 2014 and 0.57% of total loans outstanding at December 31, 2013.

Non-Performing Assets	12/31/14	09/30/14	12/31/13
(dollars in thousands)
Non-Accrual Loans	$6,056	$6,032	$3,181
Past Due Loans (90 days or more)	669	102	159
Total Non-Performing Loans	6,725	6,134	3,340
Non-Accrual Securities	250	250	1,950
Other Real Estate	4,654	4,986	4,470
Total Non-Performing Assets	$11,629	$11,370	$9,760

The Company’s allowance for loan losses totaled $6.1 million at December 31, 2014 and September 30, 2014, representing an increase of $367,000, or 6.4% on an annualized basis, from December 31, 2013. The allowance for loan losses represented 0.86% of period-end loans at December 31, 2014 compared with 0.91% of period-end loans at September 30, 2014 and 0.98% of period-end loans at December 31, 2013. Under acquisition accounting treatment, loans acquired are recorded at fair value which includes a credit risk component, and therefore the allowance on loans acquired is not carried over from the seller. The allowance for loan losses represented 1.01% of period end loans excluding those booked at fair value at December 31, 2014 compared with 1.10% at September 30, 2014 and 1.21% at December 31, 2013.

Total deposits decreased $14.7 million or 6.5% on an annualized basis, as of December 31, 2014 compared with September 30, 2014 total deposits and increased by approximately $112.8 million or 14.5% compared with December 31, 2013. Deposits of $58.1 million were acquired from Bay Bank on July 1, 2014. Non-interest-bearing demand deposits increased $27.6 million, or 15.9% when comparing December 31, 2014 to December 31, 2013.

End of Period Deposit Balances	12/31/14	09/30/14	12/31/13
(dollars in thousands)
Non-interest-bearing Demand Deposits	$201,362	$195,957	$173,794
IB Demand, Savings, and MMDA Accounts	485,354	500,637	403,190
Time Deposits < $100,000	85,365	86,897	85,880
Time Deposits > $100,000	120,694	124,024	117,107
	$892,775	$907,515	$779,971

Results of Operations Highlights – Quarter ended December 31, 2014

Net income available to common stockholders for the quarter ended December 31, 2014 totaled $1,955,000 or $0.36 per diluted share, an increase of $563,000 or 40.4% from the fourth quarter of 2013 net income available to common stockholders of $1,392,000 or $0.27 per diluted share.

During the quarter ended December 31, 2014, net interest income totaled $8,871,000 representing an increase of $1,105,000, or 14.2%, compared with the quarter ended December 31, 2013 net interest income of $7,766,000. The tax equivalent net interest margin for the quarter ended December 31, 2014 was 3.76% compared to 3.76% in the fourth quarter of 2013. The increase in net interest income during the quarter ended December 31, 2014 compared with the fourth quarter of 2013 was attributable primarily to increased average loans outstanding.

Fair value accounting adjustments on acquired assets and liabilities contributed approximately 4 basis points on an annualized basis to the net interest margin in the fourth quarter of 2014 and 11 basis points in the fourth quarter of 2013.

During the quarter ended December 31, 2014, non-interest income totaled $2,055,000, an increase of $34,000 or 1.7%, compared with the quarter ended September 30, 2014, and an increase of $384,000, or 23.0%, compared with the fourth quarter of 2013. The overall increase in non-interest income for the quarter ended December 31, 2014 is attributed to an increase of $115,000, or 34.8% in mortgage income as well as an increase in other operating income consisting of a BEA award of $223,000 received as compared to the quarter ended December 31, 2013.

	Quarter Ended	Quarter Ended	Quarter Ended
Non-interest Income	12/31/14	09/30/14	12/31/13
(dollars in thousands)
Service Charges on Deposit Accounts	$608	$616	$617
Mortgage Income	445	522	330
Interchange Fee Income	561	563	479
Other Operating Income	441	320	245
Total Non-interest Income	$2,055	$2,021	$1,671

During the quarter ended December 31, 2014, non-interest expense totaled $8,051,000, a decrease of $20,000, or 0.2%, compared with the quarter ended September 30, 2014, and an increase of $743,000, or 10.2%, compared with the fourth quarter of 2013.

	Quarter Ended	Quarter Ended	Quarter Ended
Non-interest Expense	12/31/14	09/30/14	12/31/13
(dollars in thousands)
Salaries and Employee Benefits	$4,551	$4,554	$3,932
Occupancy, Furniture and Equipment Expense	1,156	1,209	1,057
FDIC Premiums	271	222	231
Professional Fees	412	429	375
Advertising and Promotion	160	94	160
Intangible Amortization	100	98	94
Other Operating Expenses	1,401	1,465	1,459
Total Non-interest Expense	$8,051	$8,071	$7,308

Total non-interest expense for the fourth quarter of 2014 increased as compared to the fourth quarter of 2013. This increase is primarily related to increases in salaries and employee benefits associated with the acquisition of Bay Bank on July 1, 2014 as well as the expansion into Baton Rouge, LA. One-time acquisition charges were approximately $30,000 in fourth quarter 2014 as well as 2013.

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 south Mississippi, Louisiana and south Alabama. The Company’s stock is traded on NASDAQ Global Market under the symbol FBMS. Information is available on the Company’s website: www.thefirstbank.com.

Forward Looking Statement

This news release contains statements regarding the projected performance of The First Bancshares, Inc. and its subsidiary. These statements constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act. Actual results may differ materially from the projections provided in this release since such projections involve significant known and unknown risks and uncertainties. Factors that might cause such differences include, but are not limited to: competitive pressures among financial institutions increasing significantly; economic conditions, either nationally or locally, in areas in which the Company conducts operations being less favorable than expected; and legislation or regulatory changes which adversely affect the ability of the combined Company to conduct business combinations or new operations. 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. Further information on The First Bancshares, Inc. is available in its filings with the Securities and Exchange Commission, available at the SEC’s website, http://www.sec.gov.


THE FIRST BANCSHARES, INC. (unaudited, dollars in thousands except per shares data) Consolidated Balance Sheets
	Dec 31, 2014			Sept 30, 2014			Dec 31, 2013
ASSETS
Cash and Due from Banks	$	30,333		$	33,111		$	24,080
Federal funds sold		386			1,298			967
Interest-bearing deposits with banks		13,899			16,038			14,205
Investment Securities		270,174			276,654			258,023
Loans held for sale		2,103			3,769			3,680
Loans, Net of Unearned Income		704,531			667,533			579,623
Allowance for Loan Losses		(6,095	)		(6,084	)		(5,728	)
Net Loans		698,436			661,449			573,895
Premises and Equipment		34,810			35,079			32,072
Other Real Estate Owned		4,654			4,986			4,470
Goodwill		12,276			12,310			10,621
Other Assets		26,697			27,568			18,877
TOTAL ASSETS	$	1,093,768		$	1,072,262		$	940,890

LIABILITIES
Non-interest-bearing Demand Deposits	$	201,362		$	195,957		$	173,794
Interest-bearing Accounts		485,354			500,637			403,190
Time Deposits		206,059			210,921			202,987
Total Deposits		892,775			907,515			779,971

Borrowings		89,450			49,456			52,000
Subordinated Debentures		10,310			10,310			10,310
Other Liabilities		5,017			11,117			13,501
TOTAL LIABILITIES		997,552			978,398			855,782

STOCKHOLDER’S EQUITY
Preferred Stock		17,123			17,123			17,103
Common Stock		5,343			5,338			5,123
Surplus		47,026			50,328			42,086
Retained Earnings		25,370			20,425			22,509
Accumulated Other Comprehensive Income (Loss)		1,818			1,114			(1,249	)
Treasury Stock		(464	)		(464	)		(464	)
TOTAL STOCKHOLDERS’ EQUITY		96,216			93,864			85,108
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,093,768		$	1,072,262		$	940,890
END OF PERIOD SHARES OUTSTANDING		5,342,670			5,338,370			5,096,447
TANGIBLE BOOK VALUE PER SHARE	$	12.04		$	11.58		$	10.73


THE FIRST BANCSHARES, INC. (unaudited, dollars in thousands except per share data) Consolidated Statements of Income
	Three Months Ended				Twelve Months Ended
	Dec 31,		Dec 31,		Dec 31,		Dec 31,
	2014		2013		2014		2013
INTEREST INCOME
Interest and Fees on Loans	$	8,122	$	6,971	$	30,276	$	25,736
Interest and Dividends on Securities		1,534		1,430		6,042		5,502
Interest on Fed Funds Sold		6		10		53		80
TOTAL INTEREST INCOME		9,662		8,411		36,371		31,318
INTEREST EXPENSE
Interest on Deposits		631		476		2,370		2,300
Interest on Borrowings		160		169		603		617
TOTAL INTEREST EXPENSE		791		645		2,973		2,917
NET INTEREST INCOME		8,871		7,766		33,398		28,401
Provision for Loan Losses		152		59		1,418		1,079
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		8,719		7,707		31,980		27,322

NON-INTEREST INCOME		2,055		1,671		7,803		7,083
NON-INTEREST EXPENSE		8,051		7,308		30,733		28,162
Income before Income Taxes		2,723		2,070		9,050		6,243
Income Taxes		682		572		2,436		1,604
NET INCOME		2,041		1,498		6,614		4,639
Preferred Stock Accretion & Dividends		86		106		363		424
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	1,955	$	1,392	$	6,251	$	4,215

BASIC EARNINGS PER SHARE	$	0.37	$	0.27	$	1.20	$	0.98
DILUTED EARNINGS PER SHARE	$	0.36	$	0.27	$	1.19	$	0.96
WEIGHTED AVG SHARES OUTSTANDING		5,314,743		5,102,644		5,227,768		4,319,485
DILUTED WEIGHTED AVG SHS OUTSTANDING		5,357,644		5,156,089		5,270,669		4,372,930


THE FIRST BANCSHARES, INC. (unaudited, dollars in thousands except per share data)

	Three Months Ended				Twelve Months Ended
	Dec 31,		Dec 31,		Dec 31,		Dec 31,
	2014		2013		2014		2013
EARNINGS PERFORMANCE RATIOS
Annualized Return on Average Assets	0.76	%	0.64	%	0.64	%	0.49	%
Annualized Return on Average Assets(1)	0.71	%	0.65	%	0.64	%	0.56	%
Annualized Return on Average Equity	9.03	%	7.24	%	7.49	%	5.45	%
Annualized Return on Average Equity(1)	8.39	%	7.35	%	7.42	%	6.23	%
Annualized Return on Average TCE	13.89	%	11.47	%	11.58	%	8.36	%
Annualized Return on Average TCE(1)	12.91	%	11.63	%	11.47	%	9.55	%
Efficiency Ratio(2)	71.94	%	75.18	%	72.71	%	76.98	%
Efficiency Ratio(1)(2)	73.13	%	74.87	%	72.52	%	73.88	%
Net Overhead Expense to Average Earning Assets(3)	2.47	%	2.63	%	2.46	%	2.46	%
Net Overhead Expense to Average Earning Assets(1)(3)	2.54	%	2.62	%	2.47	%	2.34	%

ASSET QUALITY RATIOS
Annualized Net Charge-offs to Average Loans	0.08	%	0.00	%	0.17	%	0.01	%
Allowance for Loan Losses to Period End Loans	0.86	%	0.98	%
Non-performing Assets to Period End Assets	1.06	%	1.09	%
Non-performing Loans to Period End Loans	0.95	%	0.57	%
Loans 30-89 Days Past Due to Period End Loans	1.01	%	0.95	%

SELECTED BALANCE SHEET & OTHER FINANCIAL DATA
Average Assets	$1,073,287		$937,584		$1,030,322		$941,742
Average Earning Assets	$972,968		$857,034		$931,968		$857,405
Average Total Loans	$680,186		$575,310		$632,049		$583,200
Average Demand Deposits	$197,372		$121,835		$184,037		$116,289
Average Interest Bearing Liabilities	$774,891		$720,668		$746,025		$728,322
Average Equity	$90,458		$82,727		$88,270		$85,081

Period End Non-performing Assets	$11,629		$10,300
Period End Non-performing Loans	$6,725		$3,340
Period End Loans 30-89 Days Past Due	$7,163		$5,553

Tax Equivalent Net Interest Income	$9,137		$8,050		$34,465		$29,502
Net Charge-offs during Period	$141		$0		$1,051		$75

(1) Excludes merger related costs and one-time items
(2) Efficiency Ratio is defined as Non-interest Expense divided by the sum of Net Interest Income, on a tax equivalent basis, and Non-Interest Income
(3) Net Overhead Expense is defined as Total Non-interest Expense less Total Non-interest income

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

Source: The First Bancshares, Inc.

Press Release

The First Bancshares, Inc. Reports 2014 Earnings and Declaration of Dividend