The First Bancshares, Inc. Reports a 22% Increase in Quarterly Net Earnings and Declares Quarterly Dividends

Company Release - 7/22/2016 7:09 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 net earnings available to common shareholders of $2.6 million for the second quarter of 2016, compared to net earnings available to common shareholders of $2.1 million reported for the second quarter of 2015 and $2.5 million in net earnings available to common shareholders for the first quarter of 2016. Diluted earnings for the second quarter of 2016 were $0.47 per common share, compared to $0.39 per common share reported for the second quarter of 2015 and $0.46 per common share reported for the first quarter of 2016. Second quarter 2016 net earnings did not include any non-operating income or expenses; therefore, operating earnings per share for the second quarter of 2016 were $0.47. The first quarter 2016 included a non-operating item, representing $0.03 per share in adjustments. The second quarter of 2015 net earnings did not include any non-operating income or expenses.

Significant Events during Quarter:

Hired Market President in Madison, MS
Hired Treasury Management Executive
Signed purchase agreement for a branch in Baton Rouge, LA to replace facility under lease

M. Ray “Hoppy” Cole, President & Chief Executive Officer, commented, “Results for the 2^nd quarter of 2016 continued our trend of strong growth in our core franchise. Substantial organic loan growth combined with an increase in mortgage income were the major drivers of a 22% increase in net income year over year. We continue to focus on improved operating results and market share growth across the Gulf South region.

During the quarter, Wilson E. “Billy” Brunt joined our team as Madison County Market President which is in the Jackson, MS metropolitan area. Billy is a seasoned and talented banker with over 15 years of in-market experience. Under his leadership, we hope to build a full service banking operation to leverage the substantial market share enjoyed by The Mortgage Connection, which we acquired last December.

J.P. Guinn joined our team as SVP of Treasury Management during the quarter. J.P. has an extensive background in Treasury Management with 26 years of banking experience and 16 years in Treasury Management. J.P. will head up our newly created Treasury Management Division to consolidate and formalize our product offerings as well as manage new product development for our client base company wide.”

Balance Sheet

Consolidated assets decreased $17.1 million or 1.4% to $1.2 billion for the quarter ended June 30, 2016. Total loans were $824.1 million at June 30, 2016 as compared to $797.8 million at March 31, 2016 representing an increase of 3.3%. Increased loan volume was spread across all real estate categories with commercial real estate experiencing the largest growth. Fundings for commercial real estate loans increased $26.6 million or 9.8% quarter over quarter with $17.9 million in owner occupied properties.

Total deposits decreased $8.7 million or .8% to $1,032.4 million for the quarter ended June 30, 2016. This decrease reflects seasonal fluctuations in our public deposit portfolio. Total deposits adjusted for seasonal public fund changes increased $20.1 million or 2.8% for quarter ended June 30, 2016.

Asset Quality

Nonperforming assets totaled $11.1 million at June 30, 2016, a decrease of $0.2 million compared to $11.3 million at March 31, 2016. The ALLL/total loans ratio was 0.88% at June 30, 2016 and 0.88% at March 31, 2016. Including valuation accounting adjustments on acquired loans, the total valuation plus ALLL was 1.06% of loans at June 30, 2016. The ratio of annualized net charge-offs (recoveries) to total loans was (0.03%) for the quarter ended June 30, 2016 compared to (0.02%) for the quarter ended March 31, 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 June 30, 2016 the company had direct energy related loans of $19.3 million, representing 2.3% of the total loan portfolio. During the quarter, the company received pay downs of $3 million. 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.

Second Quarter 2016 vs. Second Quarter 2015 Earnings Comparison

Second quarter 2016 net earnings available to common shareholders totaled $2.6 million compared to $2.1 million for the second quarter of 2015. Revenues from consolidated operations increased $1,956,000 in quarterly comparison. Net interest income increased $639,000 in quarterly comparison as interest income earned on a higher volume of loans attributed to this overall increase. Noninterest income increased $1,107,000 in quarterly comparison for the second quarter of 2016 as compared to the second quarter of 2015 consisting mainly of increased mortgage income of $827,000.

Second quarter 2016 noninterest expenses increased $829,000, or 10.2% as compared to second quarter 2015. The largest increase in noninterest expenses was related to salaries and benefits of $787,000 of which $391,000 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 $10.1 million and $9.5 million for the second quarter of 2016 and 2015, respectively. The FTE net interest income increased $645,000 in prior year quarterly comparison primarily due to an increase in interest earned on loans. Purchase accounting adjustments had a difference of $51,000 on net interest income for the second quarter comparisons. Second quarter 2016 net interest margin of 3.68% includes 1 bps related to purchase accounting adjustments.

Investment securities totaled $258.5 million, or 21.1% of total assets at June 30, 2016, versus $249.9 million, or 22.4% of total assets at June 30, 2015. The average volume of investment securities increased $5.8 million in prior year quarterly comparison. The average tax equivalent yield on investment securities increased 4 bps to 2.65%. The investment portfolio had a net unrealized gain of $4.5 million at June 30, 2016 as compared to $0.7 million at June 30, 2015.

The average yield on all earnings assets increased 2 basis points in prior year quarterly comparison, from 4.03% for the second quarter of 2015 to 4.05% for the second quarter of 2016. This increase was offset by an increase in average interest expense of 6 basis points from 0.39% for the second quarter of 2015 to 0.45% for the second quarter of 2016.

Second Quarter 2016 vs First Quarter 2016 Earnings Comparison

In sequential-quarter comparison, net earnings available to common shareholders increased $44,000 to $2.6 million.

FTE net interest income increased $187,000 to $10.1 million from $9.9 million in sequential-quarter comparison. The increase was due primarily to increased loan volume.

The average yield on all earnings assets increased 3 basis points in sequential-quarter comparison, from 4.02% for the first quarter of 2016 to 4.05% for the second quarter of 2016.

Noninterest income increased $478,000 net in sequential-quarter comparison consisting of an increase in mortgage income of $539,000 which was partially offset by the one-time gain of $260,000 related to the conversion of our debit card provider during the first quarter.

Noninterest expenses increased $526,000 in sequential-quarter comparison which includes an increase in salaries and benefits of $251,000. Of this amount, $120,000 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 Market President in Madison, the treasury management executive as well as the lending team in Mobile.

Year to Date Earnings Comparison

In year-over-year comparison, net earnings available to common shareholders increased $1.1 million, or 25.7%, from $4.0 million at June 30, 2015 to $5.1 million at June 30, 2016. Net interest income increased $1.4 million in year-over-year comparison as interest income earned on a higher volume of loans attributed to this overall increase.

Noninterest income increased $1.7 million in year-over-year comparison mainly consisting of increases in mortgage income of $1.1 million.

Noninterest expenses increased $1.4 million in year-over-year comparison consisting of increases in salaries and benefits of $1.3 million relating to the acquisition of The Mortgage Connection, LLC as well as salaries and benefits related to the lender in Madison 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 August 25, 2016 to shareholders of record as of the close of business on August 8, 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 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 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 6/30/16			Quarter Ended 3/31/16			Quarter Ended 12/31/15			Quarter Ended 9/30/15			Quarter Ended 6/30/15
Total Interest Income	$	10,871		$	10,597		$	10,417		$	10,080		$	10,022
Total Interest Expense		1,016			922			804			793			806
Net Interest Income		9,855			9,675			9,613			9,287			9,216
FTE net interest income		10,099			9,912			9,846			9,512			9,454
Provision for loan losses		204			190			10			250			-
Non-interest income		2,961			2,483			1,903			1,982			1,854
Non-interest expense		8,921			8,395			8,275			7,977			8,092
Earnings before income taxes		3,691			3,573			3,231			3,042			2,978
Income tax expense		1,042			969			873			815			793
Net earnings		2,649			2,604			2,358			2,227			2,185
Dividends and accretion on preferred stock		86			85			85			86			86
Net earnings available to common shareholders	$	2,563		$	2,519		$	2,273		$	2,141		$	2,099

PER COMMON SHARE DATA
Basic earnings per share	$	0.47		$	0.47		$	0.42		$	0.40		$	0.39
Diluted earnings per share		0.47			0.46			0.42			0.39			0.39
Diluted earnings per share, operating*		0.47			0.43			0.40			0.39			0.39
Quarterly dividends per share		.0375			.0375			.0375			.0375			.0375
Book value per common share at end of period		17.15			16.58			16.05			15.72			15.13
Tangible common book value at period end		14.26			13.67			13.10			13.02			12.41
Market price at end of period		17.27			15.63			18.34			17.47			16.65
Shares outstanding at period end		5,432,014			5,432,014			5,376,665			5,376,665			5,374,415
Weighted average shares outstanding:
Basic		5,432,014			5,415,339			5,376,665			5,374,790			5,366,495
Diluted		5,490,592			5,478,703			5,449,851			5,441,980			5,424,242

AVERAGE BALANCE SHEET DATA
Total assets	$	1,210,707		$	1,196,328		$	1,131,924		$	1,109,944		$	1,119,648
Loans and leases		809,806			779,418			757,036			731,818			728,416
Total deposits		1,036,914			964,681			946,849			953,229			973,776
Total common equity		88,643			87,155			84,122			82,045			79,986
Total tangible common equity*		72,885			71,297			69,514			67,492			65,334
Total equity		105,766			104,278			101,245			99,168			97,109

SELECTED RATIOS
Annualized return on avg assets		.88	%		.87	%		.83	%		.80	%		.78	%
Annualized return on avg assets, operating*		.85	%		.78	%		.76	%		.78	%		.75	%
Annualized return on avg common equity, operating*		11.57	%		10.69	%		10.27	%		10.44	%		10.50	%
Annualized return on avg tangible common equity, oper*		14.07	%		13.07	%		12.43	%		12.69	%		12.85	%
Average loans to average deposits		78.10	%		80.80	%		79.95	%		76.77	%		74.80	%
Taxable-equivalent net interest margin		3.68	%		3.68	%		3.81	%		3.79	%		3.71	%
Efficiency Ratio		68.31	%		67.73	%		70.43	%		69.40	%		71.56	%

CREDIT QUALITY
Allowance for loan losses (ALLL) as a % of total loans		.88	%		.88	%		.87	%		.90	%		.88	%
Nonperforming assets to tangible equity + ALLL		10.93	%		11.43	%		11.55	%		13.28	%		12.33	%
Nonperforming assets to total loans + ORE		1.34	%		1.40	%		1.40	%		1.66	%		1.51	%
Annualized QTD net charge-offs (recoveries) to total loans		(0.03	%)		(0.02	%)		(0.002	%)		(0.03	%)		(0.27	%)
*See reconciliation of Non-GAAP financial measures




FIRST BANCSHARES, INC and SUBSIDIARIES Condensed Consolidated Financial Information (unaudited) (in thousands)
BALANCE SHEET	June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			June 30, 2015
Assets
Cash and cash equivalents	$	54,777		$	95,965		$	41,259		$	65,233		$	62,021
Securities available-for-sale		242,855			253,126			239,732			239,631			236,476
Securities held-to-maturity		6,025			6,851			7,092			7,233			7,651
Other investments		9,578			9,570			8,135			6,249			5,787
Total investment securities		258,458			269,547			254,959			253,113			249,914
Loans held for sale		8,937			6,095			3,974			1,058			1,864
Total loans		824,083			797,764			772,515			746,588			731,037
Allowance for loan losses		(7,259	)		(6,982	)		(6,747	)		(6,734	)		(6,419	)
Loans, net		816,824			790,782			765,768			739,854			724,618
Premises and equipment		33,502			33,353			33,623			33,610			33,571
Other Real Estate		4,716			4,363			3,083			4,104			4,116
Goodwill and other intangibles		15,696			15,796			15,891			14,490			14,691
Other assets		31,990			26,050			26,574			26,387			26,953
Total assets	$	1,224,900		$	1,241,951		$	1,145,131		$	1,137,849		$	1,117,648

Liabilities and Shareholders’ Equity
Non-interest bearing deposits	$	194,950		$	194,433		$	189,445		$	187,542		$	193,810
Interest-bearing deposits		837,413			846,672			727,250			776,298			768,289
Total deposits		1,032,363			1,041,105			916,695			963,840			962,099
Borrowings		68,000			78,976			110,321			58,986			43,991
Subordinated debentures		10,310			10,310			10,310			10,310			10,310
Other liabilities		3,929			4,363			4,369			3,091			2,814
Total liabilities		1,114,602			1,134,754			1,041,695			1,036,227			1,019,214
Total shareholders’ equity		110,298			107,197			103,436			101,622			98,434
Total liabilities and shareholders’ equity	$	1,224,900		$	1,241,951		$	1,145,131		$	1,137,849		$	1,117,648




FIRST BANCSHARES, INC and SUBSIDIARIES Condensed Consolidated Financial Information (unaudited) (in thousands except per share data)
EARNINGS STATEMENT	Three Months Ended
EARNINGS STATEMENT	6/30/16		3/31/16		12/31/15			9/30/15			6/30/15
Interest Income:
Loans, including fees	$	9,293	$	9,013	$	8,874		$	8,556		$	8,461
Investment securities		1,531		1,532		1,472			1,438			1,474
Accretion of purchase accounting adjustments		20		22		59			73			71
Other interest income		27		30		12			13			16
Total interest income		10,871		10,597		10,417			10,080			10,022

Interest Expense:
Deposits		813		701		657			693			704
Borrowings		169		173		131			100			102
Subordinated debentures		34		48		47			47			46
Accretion of purchase accounting adjustments		-		-		(31	)		(47	)		(46	)
Total interest expense		1,016		922		804			793			806

Net interest income		9,855		9,675		9,613			9,287			9,216
Provision for loan losses		204		190		10			250			-
Net interest income after provision for loan losses		9,651		9,485		9,603			9,037			9,216

Non-interest Income:
Service charges on deposit accounts		604		637		674			737			591
Mortgage Income		1,184		645		245			341			357
Interchange Fee Income		681		644		650			611			612
Gain (loss) on securities, net		129		-		-			-			-
Gain on sale of premises and equipment		-		-		-			-			-
BEA award, net		-		-		152			-			-
Other charges and fees		363		557		182			293			294
Total non-interest income		2,961		2,483		1,903			1,982			1,854

Non-interest expense:
Salaries and employee benefits		5,400		5,149		4,670			4,628			4,613
Occupancy expense		1,110		1,073		1,107			1,136			1,137
FDIC premiums		257		244		243			241			241
Marketing		132		72		150			64			161
Amortization of core deposit intangibles		100		94		100			100			100
Other professional services		321		231		377			318			379
Other non-interest expense		1,601		1,532		1,628			1,490			1,461
Total Non-interest expense		8,921		8,395		8,275			7,977			8,092
Earnings before income taxes		3,691		3,573		3,231			3,042			2,978
Income tax expense		1,042		969		873			815			793
Net earnings		2,649		2,604		2,358			2,227			2,185
Dividends and accretion on preferred stock		86		85		85			86			86
Net earnings available to common shareholders	$	2,563	$	2,519	$	2,273		$	2,141		$	2,099

Earnings per common share, diluted	$	0.47	$	0.46	$	0.42		$	0.39		$	0.39
Operating earnings per common share, diluted*	$	0.47	$	0.43	$	0.40		$	0.39		$	0.39
*See reconciliation of Non-GAAP financial measures




FIRST BANCSHARES, INC and SUBSIDIARIES Condensed Consolidated Financial Information (unaudited) (in thousands)
COMPOSITION OF LOANS	June 30, 2016			Percent of Total		Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			June 30, 2015			Percent of Total
Commercial, financial and agricultural	$	118,924		14.3	%	$	126,381		$	129,197		$	123,872		$	116,352		15.9	%
Real estate – construction		101,439		12.2	%		100,386			99,161			85,769			93,152		12.7	%
Real estate – commercial		296,676		35.6	%		270,085			253,309			251,631			245,537		33.5	%
Real estate – residential		282,420		33.9	%		276,272			272,180			265,763			259,610		35.4	%
Lease Financing Receivable		2,642		.3	%		2,645			2,650			2,303			-		-
Obligations of States & subdivisions		6,965		.8	%		7,034			969			969			700		.1	%
Consumer		15,017		1.8	%		14,961			15,049			16,281			15,686		2.1	%
Loans held for sale		8,937		1.1	%		6,095			3,974			1,058			1,864		0.3	%
Total loans	$	833,020		100	%	$	803,859		$	776,489		$	747,646		$	732,901		100	%

COMPOSITION OF DEPOSITS	June 30, 2016			Percent of Total		Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			June 30, 2015			Percent of Total
Noninterest bearing	$	194,950		18.9	%	$	194,433		$	189,445		$	187,542		$	193,810		20.2	%
NOW and other		466,118		45.2	%		493,319			373,687			411,893			393,596		40.9	%
Money Market/Savings		174,740		16.9	%		169,733			174,090			181,861			185,033		19.2	%
Time Deposits of less than $100,000		72,389		7.0	%		72,295			73,865			75,022			77,815		8.1	%
Time Deposits of $100,000 or more		124,166		12.0	%		111,325			105,608			107,522			111,845		11.6	%
Total Deposits	$	1,032,363		100	%	$	1,041,105		$	916,695		$	963,840		$	962,099		100	%

ASSET QUALITY DATA	June 30, 2016					Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			June 30, 2015
Nonaccrual loans	$	5,742				$	5,851		$	7,368		$	7,949		$	6,513
Loans past due 90 days and over		267					628			29			6			92
Total nonperforming loans		6,009					6,479			7,397			7,955			6,605
Other real estate		4,716					4,363			3,083			4,104			4,116
Nonaccrual securities		408					408			408			408			408
Total nonperforming assets	$	11,133				$	11,250		$	10,888		$	12,467		$	11,129

Nonperforming assets to total assets		.91	%				.91	%		.95	%		1.10	%		1.00	%
Nonperforming assets to total loans + ORE		1.34	%				1.40	%		1.40	%		1.66	%		1.51	%
ALLL to nonperforming loans		120.80	%				107.80	%		91.21	%		84.65	%		97.18	%
ALLL to total loans		.88	%				.88	%		.87	%		.90	%		.88	%

Quarter-to-date net charge-offs (recoveries)	$	(72	)			$	(48	)	$	(3	)	$	(65	)	$	(490	)
Annualized QTD net chg/offs (recs) to loans		(0.03	%)				(0.02	%)		(0.002	%)		(0.03	%)		(0.27	%)




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, 2016						March 31, 2016						December 31, 2015						September 30, 2015						June 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	$	186,615	$	1,034	2.22	%	$	189,249	$	1,056	2.23	%	$	177,964	$	1,006	2.26	%	$	172,478	$	976	2.26	%	$	179,580	$	991	2.21	%

Total investment securities		78,290		721	3.68	%		76,795		693	3.61	%		75,570		685	3.63	%		74,807		662	3.54	%		79,568		702	3.53	%

Total investment securities		264,905		1,755	2.65	%		266,044		1,749	2.63	%		253,534		1,691	2.67	%		247,285		1,638	2.65	%		259,148		1,693	2.61	%
Fed funds sold		9,902		27	1.09	%		12,395		30	0.97	%		405		1	0.99	%		5,502		13	0.95	%		6,702		16	0.95	%

Int bearing deposits in other banks		12,522		20	0.64	%		20,909		20	0.38	%		21,601		25	0.46	%		20,613		25	0.49	%		24,089		19	0.32	%
Loans		809,806		9,313	4.60	%		779,418		9,035	4.64	%		757,036		8,933	4.72	%		731,818		8,629	4.72	%		728,416		8,532	4.69	%

Total Interest earning assets		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	%		1,018,355		10,260	4.03	%
Other assets		113,572						117,562						99,348						104,726						101,293
Total assets	$	1,210,707					$	1,196,328					$	1,131,924					$	1,109,944					$	1,119,648

Interest-bearing liabilities:
Deposits	$	843,771	$	813	0.39	%	$	777,692	$	701	0.36	%	$	752,098	$	626	0.33	%	$	759,939	$	646	0.34	%	$	772,837	$	658	0.34	%
Repo		5,000		48	3.84	%		5,000		48	3.84	%		5,000		48	3.84	%		5,000		48	3.84	%		5,000		48	3.84	%
Fed funds purchased		2,894		8	1.11	%		782		2	1.02	%		1,984		6	1.21	%		661		2	1.21	%		1,180		3	1.02	%
FHLB		42,962		93	0.87	%		106,352		143	0.54	%		60,961		77	0.51	%		37,716		50	0.53	%		27,117		51	0.75	%
Subordinated
debentures		10,310		54	2.10	%		10,310		28	1.09	%		10,310		47	1.82	%		10,310		47	1.82	%		10,310		46	1.78	%

Total interest bearing liabilities		904,937		1,016	0.45	%		900,136		922	0.41	%		830,353		804	0.39	%		813,626		793	0.39	%		816,444		806	0.39	%
Other liabilities		200,004						191,914						200,326						197,150						206,095
Shareholders' equity		105,766						104,278						101,245						99,168						97,109
Total liabilities and shareholders' equity	$	1,210,707					$	1,196,328					$	1,131,924					$	1,109,944					$	1,119,648

Net interest
income (TE)			$	10,099	3.60	%			$	9,912	3.61	%			$	9,846	3.74	%			$	9,512	3.71	%			$	9,454	3.64	%

Net interest margin					3.68	%					3.68	%					3.81	%					3.79	%					3.71	%


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




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	June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			June 30, 2015
Book value per common share	$	17.15		$	16.58		$	16.05		$	15.72		$	15.13
Effect of intangible assets per share		2.89			2.91			2.95			2.70			2.72
Tangible book value per common share	$	14.26		$	13.67		$	13.10		$	13.02		$	12.41

Diluted earnings per share	$	0.47		$	0.46		$	0.42		$	0.39		$	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		-			-			-			-			-
Diluted earnings per share, operating	$	0.47		$	0.43		$	0.40		$	0.39		$	0.39

	Three Months Ended
Average Balance Sheet Data	June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			June 30, 2015
Total average assets A	$	1,210,707		$	1,196,328		$	1,131,924		$	1,109,944		$	1,119,648

Total equity	$	105,766		$	104,278		$	101,245		$	99,168		$	97,109
Less preferred equity		17,123			17,123			17,123			17,123			17,123
Total common equity B		88,643			87,155			84,122			82,045			79,986
Less intangible assets		15,758			15,858			14,608			14,553			14,652
Tangible common equity C	$	72,885		$	71,297		$	69,514		$	67,492		$	65,334

	Three Months Ended
Core Net Interest Margin	June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			June 30, 2015
Net interest income (TE)	$	10,099		$	9,912		$	9,846		$	9,512		$	9,454
Less purchase accounting adjustments		20			22			90			120			117
Net interest income, net of purchase accounting adj D	$	10,079		$	9,890		$	9,756		$	9,392		$	9,337

Total average earning assets	$	1,097,135		$	1,078,766		$	1,032,576		$	1,005,218		$	1,018,355
Add average balance of loan valuation discount		1,504			1,526			1,583			1,657			1,727
Avg earning assets, excluding loan valuation discount E	$	1,098,639		$	1,080,292		$	1,034,159		$	1,006,875		$	1,020,082

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

	Three Months Ended
Return Ratios	June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			June 30, 2015
Net earnings F	$	2,649		$	2,604		$	2,358		$	2,227		$	2,185
Dividends and accretion on preferred stock		86			85			85			86			86
Net earnings available to common shareholders		2,563			2,519			2,273			2,141			2,099
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		-			-			-			-			-
Net earnings available to common shareholders, oper G	$	2,563		$	2,330		$	2,161		$	2,141		$	2,099

Annualized return on avg assets F/A		.88	%		.87	%		.83	%		.80	%		.78	%
Annualized return on avg assets, oper G/A		.85	%		.78	%		.76	%		.78	%		.75	%
Annualized return on avg common equity, oper G/B		11.57	%		10.69	%		10.27	%		10.44	%		10.50	%
Annualized return on avg tangible common equity, oper G/C		14.07	%		13.07	%		12.43	%		12.69	%		12.85	%

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/20160722005866/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 22% Increase in Quarterly Net Earnings and Declares Quarterly Dividends