The First Bancshares, Inc. Reports a 15% Increase in Quarterly Net Earnings and Declares Quarterly Dividends

Company Release - 10/14/2016 8:45 AM 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 net earnings available to common shareholders of $2.5 million for the third quarter of 2016, compared to net earnings available to common shareholders of $2.1 million reported for the third quarter of 2015 and $2.6 million in net earnings available to common shareholders for the second quarter of 2016. Diluted earnings for the third quarter of 2016 were $0.45 per common share, compared to $0.39 per common share reported for the third quarter of 2015 and $0.47 per common share reported for the second quarter of 2016. Third quarter 2016 net earnings included acquisition charges of $0.03 per share; therefore, operating earnings per share for the third quarter of 2016 were $0.48. The second quarter of 2016 and the third quarter of 2015 net earnings did not include any non-operating income or expenses.

M. Ray “Hoppy” Cole, President & Chief Executive Officer, commented, “We are pleased to record another quarter of strong growth and improved profitability across our entire franchise. Our regional markets continue to offer us expansion opportunities as we continue to improve our market share throughout the Gulf South.”

Balance Sheet

Consolidated assets increased $41.7 million or 3.4% to $1.3 billion for the quarter ended September 30, 2016. Total loans were $854.4 million at September 30, 2016 as compared to $824.1 million at June 30, 2016 representing an increase of $30.3 million or 3.7%. Increased loan volume was spread across all real estate categories with residential real estate experiencing the largest growth. Fundings for commercial real estate loans increased $11.3 million or 3.8% quarter over quarter along with residential real estate growth of $14.2 million or 5.0%.

Total deposits increased $39.4 million or 3.8% to $1,071.8 million for the quarter ended September 30, 2016 with time deposits increasing $25.8 million or 13.1%. Money market and savings increased $12.5 million or 7.1%.

Asset Quality

Nonperforming assets totaled $11.3 million at September 30, 2016, an increase of $0.2 million compared to $11.1 million at June 30, 2016. The ALLL/total loans ratio was 0.88% at September 30, 2016 and June 30, 2016. Including valuation accounting adjustments on acquired loans, the total valuation plus ALLL was 1.06% of loans at September 30, 2016. The ratio of annualized net charge-offs (recoveries) to total loans was (0.04%) for the quarter ended September 30, 2016 compared to (0.03%) for the quarter ended June 30, 2016. As noted in our first quarter 2015 10-Q, the Company had been notified that a recovery of $941,000 was more likely than not expected during 2015. We received the first installment during the second quarter of 2015 which totaled $481,000 and the second installment during the third quarter of 2015 which totaled $241,000. The remaining balance of $219,000 is expected to be received in 2016.

Energy Loans

At September 30, 2016 the company had direct energy related loans of $19.4 million, representing 2.3% of the total loan portfolio. A majority of the outstanding are secured by marine assets that operate in the Gulf of Mexico, which are under term contracts to major operators tied primarily to oil and gas production.

Third Quarter 2016 vs. Third Quarter 2015 Earnings Comparison

Third quarter 2016 net earnings available to common shareholders totaled $2.5 million compared to $2.1 million for the third quarter of 2015. Revenues from consolidated operations increased $2.3 million in quarterly comparison. Net interest income increased $780,000 in quarterly comparison as interest income earned on a higher volume of loans attributed to this overall increase. Noninterest income increased $1,117,000 in quarterly comparison for the third quarter of 2016 as compared to the third quarter of 2015 consisting mainly of increased mortgage income of $1,058,000.

Third quarter 2016 noninterest expenses increased $1,439,000, or 18.0% as compared to third quarter 2015. The largest increase in noninterest expenses was related to salaries and benefits of $1,017,000 of which $600,000 can be attributed to acquisition of The Mortgage Connection, LLC in December 2015 as well as additional salaries and benefits related to the banking team in Mobile and lender in Madison along with Treasury Management personnel.

Fully taxable-equivalent (“FTE”) net interest income totaled $10.3 million and $9.5 million for the third quarter of 2016 and 2015, respectively. The FTE net interest income increased $794,000 in prior year quarterly comparison primarily due to an increase in interest earned on loans. Purchase accounting adjustments had a difference of $28,000 on net interest income for the third quarter comparisons. Third quarter 2016 net interest margin of 3.70% includes 4 bps related to purchase accounting adjustments.

Investment securities totaled $251.7 million, or 19.9% of total assets at September 30, 2016, versus $253.1 million, or 22.2% of total assets at September 30, 2015. The average volume of investment securities increased $6.9 million in prior year quarterly comparison. The average tax equivalent yield on investment securities decreased 2 bps to 2.63%. The investment portfolio had a net unrealized gain of $4.5 million at September 30, 2016 as compared to $2.3 million at September 30, 2015.

The average yield on all earnings assets increased 3 basis points in prior year quarterly comparison, from 4.10% for the third quarter of 2015 to 4.13% for the third quarter of 2016. This increase was offset by an increase in average interest expense of 13 basis points from 0.39% for the third quarter of 2015 to 0.52% for the third quarter of 2016.

Third Quarter 2016 vs Second Quarter 2016 Earnings Comparison

In sequential-quarter comparison, net earnings available to common shareholders decreased $91,000 to $2.5 million which included after-tax acquisition charges of $146,000.

FTE net interest income increased $207,000 to $10.3 million from $10.1 million in sequential-quarter comparison. The increase was due primarily to increased loan volume.

The average yield on all earnings assets increased 8 basis points in sequential-quarter comparison, from 4.05% for the second quarter of 2016 to 4.13% for the third quarter of 2016.

Noninterest income increased $138,000 in sequential-quarter comparison consisting of an increase in mortgage income of $215,000 which was partially offset by the one-time gain of $129,000 related to the gain on securities during the second quarter.

Noninterest expenses increased $495,000 in sequential-quarter comparison which includes an increase in salaries and benefits of $245,000. Of this amount, $60,000 relates to the acquisition of The Mortgage Connection, LLC that occurred in December 2015. The increase in salaries and benefits also reflect the hiring of the lending team Madison, the treasury management executive as well as the lending team in Mobile. The increase in noninterest expenses also includes acquisition charges of $234,000.

Year to Date Earnings Comparison

In year-over-year comparison, net earnings available to common shareholders increased $1.4 million, or 22.2%, from $6.2 million at September 30, 2015 to $7.6 million at September 30, 2016. Net interest income increased $2.2 million in year-over-year comparison as interest income earned on a higher volume of loans attributed to this overall increase.

Noninterest income increased $2.9 million in year-over-year comparison mainly consisting of increases in mortgage income of $2.2 million.

Noninterest expenses increased $2.8 million in year-over-year comparison consisting of increases in salaries and benefits of $2.3 million relating to the acquisition of The Mortgage Connection, LLC as well as salaries and benefits related to the lending teams in Madison and Mobile along with the executive for Treasury Management.

Dividends

The Board of Directors of The First Bancshares, Inc. announced a cash dividend was declared in the amount of $0.0375 per share to be paid on its common stock on November 23, 2016 to shareholders of record as of the close of business on November 4, 2016.

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 and 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 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; 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.


FIRST BANCSHARES, INC and SUBSIDIARIES Condensed Consolidated Financial Information (unaudited) (in thousands except per share data)
EARNINGS DATA	Quarter Ended 9/30/16			Quarter Ended 6/30/16			Quarter Ended 3/31/16			Quarter Ended 12/31/15			Quarter Ended 9/30/15
Total Interest Income	$	11,269		$	10,871		$	10,597		$	10,417		$	10,080
Total Interest Expense		1,202			1,016			922			804			793
Net Interest Income		10,067			9,855			9,675			9,613			9,287
FTE net interest income		10,306			10,099			9,912			9,846			9,512
Provision for loan losses		143			204			190			10			250
Non-interest income		3,099			2,961			2,483			1,903			1,982
Non-interest expense ^^		9,416			8,921			8,395			8,275			7,977
Earnings before income taxes		3,607			3,691			3,573			3,231			3,042
Income tax expense		1,049			1,042			969			873			815
Net earnings		2,558			2,649			2,604			2,358			2,227
Dividends and accretion on preferred stock		86			86			85			85			86
Net earnings available to common shareholders	$	2,472		$	2,563		$	2,519		$	2,273		$	2,141

PER COMMON SHARE DATA
Basic earnings per share	$	0.46		$	0.47		$	0.47		$	0.42		$	0.40
Diluted earnings per share		0.45			0.47			0.46			0.42			0.39
Diluted earnings per share, operating*		0.48			0.47			0.43			0.40			0.39
Quarterly dividends per share		.0375			.0375			.0375			.0375			.0375
Book value per common share at end of period		17.60			17.15			16.58			16.05			15.72
Tangible common book value at period end		14.73			14.26			13.67			13.10			13.02
Market price at end of period		19.10			17.27			15.63			18.34			17.47
Shares outstanding at period end		5,428,017			5,432,014			5,432,014			5,376,665			5,376,665
Weighted average shares outstanding:
Basic		5,425,567			5,432,014			5,415,339			5,376,665			5,374,790
Diluted		5,475,785			5,490,592			5,478,703			5,449,851			5,441,980

AVERAGE BALANCE SHEET DATA
Total assets	$	1,233,034		$	1,210,707		$	1,196,328		$	1,131,924		$	1,109,944
Loans and leases		836,931			809,806			779,418			757,036			731,818
Total deposits		1,044,428			1,036,914			964,681			946,849			953,229
Total common equity		94,007			88,643			87,155			84,122			82,045
Total tangible common equity*		78,347			72,885			71,297			69,514			67,492
Total equity		111,130			105,766			104,278			101,245			99,168

SELECTED RATIOS
Annualized return on avg assets		.83	%		.88	%		.87	%		.83	%		.80	%
Annualized return on avg assets, operating*		.85	%		.85	%		.78	%		.76	%		.78	%
Annualized return on avg common equity, operating*		11.14	%		11.57	%		10.69	%		10.27	%		10.44	%
Annualized return on avg tangible common equity, oper*		13.37	%		14.07	%		13.07	%		12.43	%		12.69	%
Average loans to average deposits		80.13	%		78.10	%		80.80	%		79.95	%		76.77	%
Taxable-equivalent net interest margin		3.70	%		3.68	%		3.68	%		3.81	%		3.79	%
Efficiency Ratio		70.24	%		68.31	%		67.73	%		70.43	%		69.40	%

^^includes acquisition charges of $246
CREDIT QUALITY
Allowance for loan losses (ALLL) as a % of total loans		.88	%		.88	%		.88	%		.87	%		.90	%
Nonperforming assets to tangible equity + ALLL		10.81	%		10.93	%		11.43	%		11.55	%		13.28	%
Nonperforming assets to total loans + ORE		1.32	%		1.34	%		1.40	%		1.40	%		1.66	%
Annualized QTD net charge-offs (recoveries) to total loans		(0.04	%		(0.03	%)		(0.02	%)		(0.002	%)		(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, 2016			June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015
Assets
Cash and cash equivalents	$	70,114		$	54,777		$	95,965		$	41,259		$	65,233
Securities available-for-sale		236,168			242,855			253,126			239,732			239,631
Securities held-to-maturity		6,000			6,025			6,851			7,092			7,233
Other investments		9,516			9,578			9,570			8,135			6,249
Total investment securities		251,684			258,458			269,547			254,959			253,113
Loans held for sale		9,437			8,937			6,095			3,974			1,058
Total loans		854,366			824,083			797,764			772,515			746,588
Allowance for loan losses		(7,481	)		(7,259	)		(6,982	)		(6,747	)		(6,734	)
Loans, net		846,885			816,824			790,782			765,768			739,854
Premises and equipment		33,427			33,502			33,353			33,623			33,610
Other Real Estate		4,670			4,716			4,363			3,083			4,104
Goodwill and other intangibles		15,596			15,696			15,796			15,891			14,490
Other assets		34,825			31,990			26,050			26,574			26,387
Total assets	$	1,266,638		$	1,224,900		$	1,241,951		$	1,145,131		$	1,137,849

Liabilities and Shareholders’ Equity
Non-interest bearing deposits	$	196,786		$	194,950		$	194,433		$	189,445		$	187,542
Interest-bearing deposits		875,003			837,413			846,672			727,250			776,298
Total deposits		1,071,789			1,032,363			1,041,105			916,695			963,840
Borrowings		68,000			68,000			78,976			110,321			58,986
Subordinated debentures		10,310			10,310			10,310			10,310			10,310
Other liabilities		3,881			3,929			4,363			4,369			3,091
Total liabilities		1,153,980			1,114,602			1,134,754			1,041,695			1,036,227
Total shareholders’ equity		112,658			110,298			107,197			103,436			101,622
Total liabilities and shareholders’ equity	$	1,266,638		$	1,224,900		$	1,241,951		$	1,145,131		$	1,137,849


FIRST BANCSHARES, INC and SUBSIDIARIES Condensed Consolidated Financial Information (unaudited) (in thousands except per share data)
EARNINGS STATEMENT	Three Months Ended
EARNINGS STATEMENT		9/30/16		6/30/16		3/31/16		12/31/15			9/30/15
Interest Income:
Loans, including fees	$	9,706	$	9,293	$	9,013	$	8,874		$	8,556
Investment securities		1,446		1,531		1,532		1,472			1,438
Accretion of purchase accounting adjustments		92		20		22		59			73
Other interest income		25		27		30		12			13
Total interest income		11,269		10,871		10,597		10,417			10,080

Interest Expense:
Deposits		962		813		701		657			693
Borrowings		160		149		193		131			100
Subordinated debentures		80		54		28		47			47
Accretion of purchase accounting adjustments		-		-		-		(31	)		(47	)
Total interest expense		1,202		1,016		922		804			793

Net interest income		10,067		9,855		9,675		9,613			9,287
Provision for loan losses		143		204		190		10			250
Net interest income after provision for loan losses		9,924		9,651		9,485		9,603			9,037

Non-interest Income:
Service charges on deposit accounts		606		604		637		674			737
Mortgage Income		1,399		1,184		645		245			341
Interchange Fee Income		666		681		644		650			611
Gain (loss) on securities, net		-		129		-		-			-
Gain on sale of premises and equipment		-		-		-		-			-
BEA award, net		-		-		-		152			-
Other charges and fees		428		363		557		182			293
Total non-interest income		3,099		2,961		2,483		1,903			1,982

Non-interest expense:
Salaries and employee benefits		5,645		5,400		5,149		4,670			4,628
Occupancy expense		1,209		1,110		1,073		1,107			1,136
FDIC premiums		254		257		244		243			241
Marketing		76		132		72		150			64
Amortization of core deposit intangibles		100		100		94		100			100
Other professional services		461		321		231		377			318
Other non-interest expense		1,671		1,601		1,532		1,628			1,490
Total Non-interest expense ^^		9,416		8,921		8,395		8,275			7,977
Earnings before income taxes		3,607		3,691		3,573		3,231			3,042
Income tax expense		1,049		1,042		969		873			815
Net earnings		2,558		2,649		2,604		2,358			2,227
Dividends and accretion on preferred stock		86		86		85		85			86
Net earnings available to common shareholders	$	2,472	$	2,563	$	2,519	$	2,273		$	2,141

Earnings per common share, diluted	$	0.45	$	0.47	$	0.46	$	0.42		$	0.39
Operating earnings per common share, diluted*	$	0.48	$	0.47	$	0.43	$	0.40		$	0.39

^^includes acquisition charges of $234 *See reconciliation of Non-GAAP financial measures


FIRST BANCSHARES, INC and SUBSIDIARIES Condensed Consolidated Financial Information (unaudited) (in thousands)
COMPOSITION OF LOANS	Sept 30, 2016			Percent of Total		June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			Percent of Total
Commercial, financial and agricultural	$	121,963		14.1	%	$	118,924		$	126,381		$	129,197		$	123,872		16.6	%
Real estate – construction		104,644		12.1	%		101,439			100,386			99,161			85,769		11.5	%
Real estate – commercial		307,963		35.7	%		296,676			270,085			253,309			251,631		33.7	%
Real estate – residential		296,587		34.3	%		282,420			276,272			272,180			265,763		35.5	%
Lease Financing Receivable		2,211		0.3	%		2,642			2,645			2,650			2,303		0.3	%
Obligations of States & subdivisions		6,861		0.8	%		6,965			7,034			969			969		0.1	%
Consumer		14,137		1.6	%		15,017			14,961			15,049			16,281		2.2	%
Loans held for sale		9,437		1.1	%		8,937			6,095			3,974			1,058		0.1	%
Total loans	$	863,803		100	%	$	833,020		$	803,859		$	776,489		$	747,646		100	%

COMPOSITION OF DEPOSITS	Sept 30, 2016			Percent of Total		June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			Percent of Total
Noninterest bearing	$	196,786		18.4	%	$	194,950		$	194,433		$	189,445		$	187,542		19.5	%
NOW and other		465,404		43.4	%		466,118			493,319			373,687			411,893		42.7	%
Money Market/Savings		187,228		17.5	%		174,740			169,733			174,090			181,861		18.9	%
Time Deposits of less than $100,000		78,785		7.4	%		72,389			72,295			73,865			75,022		7.8	%
Time Deposits of $100,000 or more		143,586		13.3	%		124,166			111,325			105,608			107,522		11.1	%
Total Deposits	$	1,071,789		100	%	$	1,032,363		$	1,041,105		$	916,695		$	963,840		100	%

ASSET QUALITY DATA	Sept 30, 2016					June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015
Nonaccrual loans	$	5,798				$	5,742		$	5,851		$	7,368		$	7,949
Loans past due 90 days and over		420					267			628			29			6
Total nonperforming loans		6,218					6,009			6,479			7,397			7,955
Other real estate		4,670					4,716			4,363			3,083			4,104
Nonaccrual securities		408					408			408			408			408
Total nonperforming assets	$	11,296				$	11,133		$	11,250		$	10,888		$	12,467

Nonperforming assets to total assets		.89	%				.91	%		.91	%		.95	%		1.10	%
Nonperforming assets to total loans + ORE		1.31	%				1.34	%		1.40	%		1.40	%		1.66	%
ALLL to nonperforming loans		120.31	%				120.80	%		107.80	%		91.21	%		84.65	%
ALLL to total loans		.88	%				.88	%		.88	%		.87	%		.90	%

Quarter-to-date net charge-offs (recoveries)	$	(79	)			$	(72	)	$	(48	)	$	(3	)	$	(65	)
Annualized QTD net chg/offs (recs) to loans		(0.04	%)				(0.03	%)		(0.02	%)		(0.002	%)		(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, 2016						June 30, 2016						March 31, 2016						December 31, 2015						September 30, 2015
			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	$	177,154	$	965	2.18	%	$	186,615	$	1,034	2.22	%	$	189,249	$	1,056	2.23	%	$	177,964	$	1,006	2.26	%	$	172,478	$	976	2.26	%

Tax-exempt securities		77,073		704	3.65	%		78,290		721	3.68	%		76,795		693	3.61	%		75,570		685	3.63	%		74,807		662	3.54	%

Total investment securities		254,227		1,669	2.63	%		264,905		1,755	2.65	%		266,044		1,749	2.63	%		253,534		1,691	2.67	%		247,285		1,638	2.65	%
Fed funds sold		10,356		25	0.97	%		9,902		27	1.09	%		12,395		30	0.97	%		405		1	0.99	%		5,502		13	0.95	%

Int bearing deposits in other banks		11,961		16	0.54	%		12,522		20	0.64	%		20,909		20	0.38	%		21,601		25	0.46	%		20,613		25	0.49	%
Loans		836,931		9,798	4.68	%		809,806		9,313	4.60	%		779,418		9,035	4.64	%		757,036		8,933	4.72	%		731,818		8,629	4.72	%

Total Interest earning assets		1,113,475		11,508	4.13	%		1,097,135		11,115	4.05	%		1,078,766		10,834	4.02	%		1,032,576		10,650	4.13	%		1,005,218		10,305	4.10	%
Other assets		119,559						113,572						117,562						99,348						104,726
Total assets	$	1,233,034					$	1,210,707					$	1,196,328					$	1,131,924					$	1,109,944


Interest-bearing liabilities:
Deposits	$	850,442	$	962	0.45	%	$	843,771	$	813	0.39	%	$	777,692	$	701	0.36	%	$	752,098	$	626	0.33	%	$	759,939	$	646	0.34	%
Repo		5,000		49	3.92	%		5,000		48	3.84	%		5,000		48	3.84	%		5,000		48	3.84	%		5,000		48	3.84	%
Fed funds purchased		1,926		5	1.04	%		2,894		8	1.11	%		782		2	1.02	%		1,984		6	1.21	%		661		2	1.21	%
FHLB		55,337		106	0.77	%		42,962		93	0.87	%		106,352		143	0.54	%		60,961		77	0.51	%		37,716		50	0.53	%

Subordinated debentures		10,310		80	3.10	%		10,310		54	2.10	%		10,310		28	1.09	%		10,310		47	1.82	%		10,310		47	1.82	%

Total interest bearing liabilities		923,015		1,202	0.52	%		904,937		1,016	0.45	%		900,136		922	0.41	%		830,353		804	0.39	%		813,626		793	0.39	%
Other liabilities		198,889						200,004						191,914						200,326						197,150
Shareholders' equity		111,130						105,766						104,278						101,245						99,168


Total liabilities and shareholders' equity	$	1,233,034					$	1,210,707					$	1,196,328					$	1,131,924					$	1,109,944


Net interest income (TE)			$	10,306	3.61	%			$	10,099	3.60	%			$	9,912	3.61	%			$	9,846	3.74	%			$	9,512	3.71	%

Net interest margin					3.70	%					3.68	%					3.68	%					3.81	%					3.79	%


Core net interest margin*					3.66	%					3.67	%					3.66	%					3.77	%					3.73	%


FIRST BANCSHARES, INC and SUBSIDIARIES Reconcilement of Non-GAAP Financial Measures (unaudited) (in thousands except per share data)
Three Months Ended
Per Common Share Data	Sept 30, 2016			June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015
Book value per common share	$	17.60		$	17.15		$	16.58		$	16.05		$	15.72
Effect of intangible assets per share		2.87			2.89			2.91			2.95			2.70
Tangible book value per common share	$	14.73		$	14.26		$	13.67		$	13.10		$	13.02

Diluted earnings per share	$	0.45		$	0.47		$	0.46		$	0.42		$	0.39
Effect of gain on debit card conversion, after-tax		-			-			(0.03	)		-			-
Effect of gain on sale of bank premises, after-tax		-			-			-			-			-
Effect of BAE, after-tax		-			-			-			(0.02	)		-
Effect of acquisition charges, after-tax		0.03			-			-			-			-
Diluted earnings per share, operating	$	0.48		$	0.47		$	0.43		$	0.40		$	0.39




	Three Months Ended
Average Balance Sheet Data	Sept 30, 2016			June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015
Total average assets A	$	1,233,034		$	1,210,707		$	1,196,328		$	1,131,924		$	1,109,944

Total equity	$	111,130		$	105,766		$	104,278		$	101,245		$	99,168
Less preferred equity		17,123			17,123			17,123			17,123			17,123
Total common equity B		94,007			88,643			87,155			84,122			82,045
Less intangible assets		15,660			15,758			15,858			14,608			14,553
Tangible common equity C	$	78,347		$	72,885		$	71,297		$	69,514		$	67,492




	Three Months Ended
Core Net Interest Margin	Sept 30, 2016			June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015
Net interest income (TE)	$	10,306		$	10,099		$	9,912		$	9,846		$	9,512
Less purchase accounting adjustments		92			20			22			90			120
Net interest income, net of purchase accounting adj D	$	10,214		$	10,079		$	9,890		$	9,756		$	9,392

Total average earning assets	$	1,113,475		$	1,097,135		$	1,078,766		$	1,032,576		$	1,005,218
Add average balance of loan valuation discount		1,484			1,504			1,526			1,583			1,657
Avg earning assets, excluding loan valuation discount E	$	1,114,959		$	1,098,639		$	1,080,292		$	1,034,159		$	1,006,875

Core net interest margin D/E		3.66	%		3.67	%		3.66	%		3.77	%		3.73	%





	Three Months Ended
Return Ratios	Sept 30, 2016			June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015
Net earnings F	$	2,558		$	2,649		$	2,604		$	2,358		$	2,227
Dividends and accretion on preferred stock		86			86			85			85			86
Net earnings available to common shareholders		2,472			2,563			2,519			2,273			2,141
Gain on debit card conversion, after-tax		-			-			(189	)		-			-
Gain on sale of premises and equipment, after-tax		-			-			-			-			-
BAE, after-tax		-			-			-			(112	)		-
Acquisition charges, after-tax		146			-			-			-			-
Net earnings available to common shareholders, oper G	$	2,618		$	2,563		$	2,330		$	2,161		$	2,141

Annualized return on avg assets F/A		.83	%		.88	%		.87	%		.83	%		.80	%
Annualized return on avg assets, oper G/A		.85	%		.85	%		.78	%		.76	%		.78	%
Annualized return on avg common equity, oper G/B		11.14	%		11.57	%		10.69	%		10.27	%		10.44	%
Annualized return on avg tangible common equity, oper G/C		13.37	%		14.07	%		13.07	%		12.43	%		12.69	%

Certain financial information included in the earnings release and the associated Condensed Consolidated Financial Information (unaudited) is determined by methods other than in accordance with GAAP.

We use non-GAAP measures because we believe they are useful for evaluating our financial condition with a meaningful measure for assessing our financial condition as well as comparison to financial results for prior periods. These results should not be viewed as a substitute for results determined in accordance with GAAP, and are necessarily comparable to non-GAAP performance measures that other companies may use.

View source version on businesswire.com: http://www.businesswire.com/news/home/20161014005132/en/

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 a 15% Increase in Quarterly Net Earnings and Declares Quarterly Dividends