The First Bancshares, Inc. Reports a 35.3% Increase in Year-Over-Year Results and Declares Quarterly Dividends

Company Release - 1/28/2016 7:47 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 $8.5 million or $1.55 in fully diluted earnings per share for the year ended December 31, 2015, up from $1.19 in fully diluted earnings per share for the year ended December 31, 2014. This represents an increase of $2.2 million in earnings available to common shareholders, a 35.3% increase over fiscal year 2014 results. Net income available to common shareholders for the quarter ended December 31, 2015 was $2.3 million as compared to $2.0 million for the same period in 2014, a 16.3% increase. Net income available to common shareholders increased $132,000, a 6.2% increase during the fourth quarter of 2015 as compared to the third quarter of 2015. Diluted earnings for the fourth quarter of 2015 were $0.42 per common share, compared to $0.36 per common share reported for the fourth quarter of 2014 and $0.39 per common share reported for the third quarter of 2015.

M. Ray “Hoppy” Cole, President & Chief Executive Officer, commented, “2015 was an outstanding year for our Company. Net income available to common shareholders increased 35.3% during 2015, in a year without any major acquisitions. This significantly improved profitability is the result of our team’s focus on client service, on growing existing as well as establishing new relationships while maintaining a disciplined approach to asset quality and expense control. We are pleased with our progress and remain nimble and opportunistic in seeking opportunities to grow our business in the Gulf South region.”

Balance Sheet

Consolidated assets increased $7.2 million or 0.6% to $1.1 billion for the quarter ended December 31, 2015. Total loans were $773 million at December 31, 2015 as compared to $747 million at September 30, 2015 representing a 3.5% increase. Increased loan volume was spread across commercial and residential categories with commercial construction experiencing the largest growth. Fundings for commercial construction loans increased $13.4 million or 15.6% quarter over quarter.

Total deposits decreased $47.1 million or 4.9% to $916.7 million for the quarter ended December 31, 2015. This decrease reflects seasonal fluctuations in our public deposit portfolio. Total deposits adjusted for seasonal public fund changes increased $4.4 million or .61% for quarter ended December 31, 2015.

Asset Quality

Nonperforming assets totaled $10.9 million at December 31, 2015, a decrease of $1.6 million compared to $12.5 million at September 30, 2015. The ALLL/total loans ratio was 0.87% at December 31, 2015 and 0.90% at September 30, 2015. Including valuation accounting adjustments on acquired loans, the total valuation plus ALLL was 1.11% of loans at December 31, 2015. The ratio of annualized net charge-offs (recoveries) to total loans was (0.002%) for the quarter ended December 31, 2015 compared to (0.03%) for the quarter ended September 30, 2015. As noted in our first quarter 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 December 31, 2015 the company had direct energy related loans of $20.9 million, representing 2.7% of the total loan portfolio. $20.3 million or 97% 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 not exploration.

All direct energy related loans are performing and are not adversely classified based on both internal and external reviews completed during the fourth quarter of 2015.

Fourth Quarter 2015 vs. Fourth Quarter 2014 Earnings Comparison

Fourth quarter 2015 net earnings available to common shareholders totaled $2.3 million compared to $2.0 million for the fourth quarter of 2014. Revenues from consolidated operations increased $603,000 in quarterly comparison. Net interest income increased $742,000 in quarterly comparison as interest income earned on a higher volume of loans attributed to this overall increase. Noninterest income decreased $152,000 in quarterly comparison for the fourth quarter of 2015 as compared to the fourth quarter of 2014 consisting mainly of decreased mortgage income.

Fourth quarter 2015 noninterest expenses increased $224,000, or 2.8% as compared to fourth quarter 2014 which included acquisition charges of $29,000. Exclusive of the acquisition charges, the fourth quarter 2015 noninterest expenses increased $253,000 or 3.1% as compared to the same quarter in 2014 mainly consisting of increases in expenses associated with other real estate, computer/data processing and rewards checking accounts. The increase in expenses associated with computer/data processing is a reclassification from previously being included in occupancy expense. The expense associated with rewards checking accounts have been more than offset from increased service charges on these accounts.

Fully taxable-equivalent (“FTE”) net interest income totaled $9.8 million and $9.1 million for the fourth quarter of 2015 and 2014, respectively. The FTE net interest income increased $709,000 in prior year quarterly comparison primarily due to an increase in interest earned on loans. The purchase accounting adjustments had a difference of $8,000 on net interest income for the fourth quarter comparisons. Fourth quarter 2015 net interest margin of 3.81% includes 4 bps related to purchase accounting adjustments.

Investment securities totaled $255.0 million, or 22.3% of total assets at December 31, 2015, versus $270.2 million, or 24.7% of total assets at December 31, 2014. The average volume of investment securities decreased $20.6 million in prior year quarterly comparison. The average tax equivalent yield on investment securities increased 7 basis points, from 2.60% to 2.67%. The investment portfolio had a net unrealized gain of $1.6 million at December 31, 2015 as compared to $2.3 million at September 30, 2015.

The average yield on all earnings assets increased 4 basis points in prior year quarterly comparison, from 4.09% for the fourth quarter of 2014 to 4.13% for the fourth quarter of 2015 and this increase was enhanced by a decrease in average interest expense of 2 basis points from 0.41% for the fourth quarter of 2014 to 0.39% for the fourth quarter of 2015.

Fourth Quarter 2015 vs Third Quarter 2015 Earnings Comparison

In sequential-quarter comparison, net earnings available to common shareholders increased $132,000 to $2.3 million.

Noninterest income decreased $79,000 in sequential-quarter comparison mainly consisting of decreases in service charges on deposit accounts and mortgage income.

Noninterest expenses increased $298,000 in sequential-quarter comparison mainly consisting of increases in marketing, salaries and employee benefits as well as other non-interest expense. Salaries and employee benefits included year end related payments as well as payroll for The Mortgage Connection.

FTE net interest income increased $334,000 to $9.8 million from $9.5 million in sequential-quarter comparison. The $318,000 increase in loan income was not impacted by accretion related to purchase accounting adjustments.

The average yield on all earnings assets increased 3 basis points in sequential-quarter comparison, from 4.10% for the third quarter of 2015 to 4.13% for the fourth quarter of 2015. Increased average loan growth of $25.2 million contributed to the overall increase in the earning asset yield.

Year-Over-Year Earnings Comparison

For the year ended December 31, 2015 total loans increased $67.9 million, a growth rate of 9.6%. Portfolio mix remained relatively consistent year over year with broad based growth across portfolio segments. Total deposits for the year ended December 31, 2015 increased $23.9 million, a growth rate of 2.7%.

In year-over-year comparison, net earnings available to common shareholders increased $2.2 million, from $6.3 million at December 31, 2014 to $8.5 million at December 31, 2015, an increase of 35.3%.

Excluding non-operating income, increases in non-interest income consisted of a $341,000 increase in interchange fee income and an increase in service charges on deposit accounts of $191,000 which was partially offset by a decrease of $446,000 in mortgage banking fees. Excluding the non-operating expenses in 2014, the increase in non-interest expense primarily included increases of $1,075,000 in salaries and employee benefits with approximately $500,000 associated with the acquisition of Bay Bank and The Mortgage Connection.

In year-over-year comparison, FTE net interest income increased $3,484,000. Interest income on loans increased $3,944,000 which does not include purchase accounting adjustments on acquired loans.

Interest expense increased $234,000 in year-over-year comparison primarily due to increased interest-bearing liabilities.

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 February 25, 2016 to shareholders of record as of the close of business on February 9, 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)
	Quarter			Quarter			Quarter			Quarter			Quarter
EARNINGS DATA	Ended			Ended			Ended			Ended			Ended
	12/31/15			9/30/15			6/30/15			3/31/15			12/31/14
Total Interest Income	$	10,417		$	10,080		$	10,022		$	9,683		$	9,662
Total Interest Expense		804			793			806			804			791
Net Interest Income		9,613			9,287			9,216			8,879			8,871
FTE net interest income		9,846			9,512			9,454			9,137			9,137
Provision for loan losses		10			250			-			150			152
Non-interest income		1,903			1,982			1,854			1,850			2,055
Non-interest expense		8,275			7,977			8,092			7,818			8,051
Earnings before income taxes		3,231			3,042			2,978			2,761			2,723
Income tax expense		873			815			793			732			682
Net earnings		2,358			2,227			2,185			2,029			2,041
Dividends and accretion on preferred stock		85			86			86			85			86
Net earnings available to common shareholders	$	2,273		$	2,141		$	2,099		$	1,944		$	1,955

PER COMMON SHARE DATA
Basic earnings per share	$	0.42		$	0.40		$	0.39		$	0.36		$	0.37
Diluted earnings per share		0.42			0.39			0.39			0.36			0.36
Diluted earnings per share, operating*		0.40			0.39			0.39			0.34			0.34
Quarterly dividends per share		.0375			.0375			.0375			.0375			.0375
Book value per common share at end of period		16.05			15.72			15.13			15.19			14.88
Tangible common book value at period end		13.10			13.02			12.41			12.46			12.10
Market price at end of period		18.34			17.47			16.65			16.26			14.51
Shares outstanding at period end		5,376,665			5,376,665			5,374,415			5,374,415			5,316,176
Weighted average shares outstanding:
Basic		5,376,665			5,374,790			5,366,495			5,358,576			5,314,743
Diluted		5,449,851			5,441,980			5,424,242			5,415,100			5,357,644

AVERAGE BALANCE SHEET DATA
Total assets	$	1,131,924		$	1,109,944		$	1,119,648		$	1,127,349		$	1,073,287
Loans and leases		757,036			731,818			728,416			705,752			678,252
Total deposits		946,849			953,229			973,776			932,401			891,168
Total common equity		84,122			82,045			79,986			79,722			73,335
Total tangible common equity*		69,514			67,492			65,334			64,967			58,758
Total equity		101,245			99,168			97,109			96,845			90,458

SELECTED RATIOS
Annualized return on avg assets		.83	%		.80	%		.78	%		.72	%		.76	%
Annualized return on avg assets, operating*		.76	%		.78	%		.75	%		.66	%		.68	%
Annualized return on avg common equity, operating*		10.27	%		10.44	%		10.50	%		9.33	%		9.88	%
Annualized return on avg tangible common equity, oper*		12.43	%		12.69	%		12.85	%		11.45	%		12.34	%
Average loans to average deposits		79.95	%		76.77	%		74.80	%		75.69	%		76.11	%
Taxable-equivalent net interest margin		3.81	%		3.79	%		3.71	%		3.60	%		3.76	%
Efficiency Ratio		70.43	%		69.40	%		71.56	%		71.16	%		71.94	%

CREDIT QUALITY
Allowance for loan losses (ALLL) as a % of total loans		.87	%		.90	%		.88	%		.83	%		.87	%
Nonperforming assets to tangible equity + ALLL		11.55	%		13.28	%		12.33	%		12.70	%		13.29	%
Nonperforming assets to total loans + ORE		1.40	%		1.66	%		1.51	%		1.58	%		1.64	%
Annualized QTD net charge-offs (recoveries) to total loans		(0.002	%)		(0.03	%)		(0.27	%)		.18	%		.08	%
*See reconciliation of Non-GAAP financial measures


FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
	Dec 31,			Sept 30,			June 30,			Mar 31,			Dec 31,
BALANCE SHEET	2015			2015			2015			2015			2014
Assets
Cash and cash equivalents	$	41,259		$	65,233		$	62,021		$	94,474		$	44,618
Securities available-for-sale		239,732			239,631			236,476			246,842			254,744
Securities held-to-maturity		7,092			7,233			7,651			7,829			8,193
Other investments		8,135			6,249			5,787			7,235			7,234
Total investment securities		254,959			253,113			249,914			261,906			270,171
Loans held for sale		3,974			1,058			1,864			1,657			2,103
Total loans		772,515			746,588			731,037			716,359			704,531
Allowance for loan losses		(6,747	)		(6,734	)		(6,419	)		(5,928	)		(6,095	)
Loans, net		765,768			739,854			724,618			710,431			698,436
Premises and equipment		33,623			33,610			33,571			33,769			34,810
Other Real Estate		3,083			4,104			4,116			4,598			4,654
Goodwill and other intangibles		15,891			14,490			14,691			14,691			14,791
Other assets		26,574			26,387			26,953			24,622			24,182
Total assets	$	1,145,131		$	1,137,849		$	1,117,648		$	1,146,148		$	1,093,768

Liabilities and Shareholders’ Equity
Non-interest bearing deposits	$	189,445		$	187,542		$	193,810		$	203,766		$	201,362
Interest-bearing deposits		727,250			776,298			768,289			780,877			691,413
Total deposits		916,695			963,840			962,099			984,643			892,775
Borrowings		110,321			58,986			43,991			49,446			89,450
Subordinated debentures		10,310			10,310			10,310			10,310			10,310
Other liabilities		4,369			3,091			2,814			2,708			5,017
Total liabilities		1,041,695			1,036,227			1,019,214			1,047,382			997,552
Total shareholders’ equity		103,436			101,622			98,434			98,766			96,216
Total liabilities and shareholders’ equity	$	1,145,131		$	1,137,849		$	1,117,648		$	1,146,148		$	1,093,768


FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
EARNINGS STATEMENT	Three Months Ended
EARNINGS STATEMENT	12/31/15			9/30/15			6/30/15			3/31/15			12/31/14
Interest Income:
Loans, including fees	$	8,874		$	8,556		$	8,461		$	8,147		$	8,071
Investment securities		1,472			1,438			1,474			1,512			1,534
Accretion of purchase accounting adjustments		59			73			71			1			51
Other interest income		12			13			16			23			6
Total interest income		10,417			10,080			10,022			9,683			9,662

Interest Expense:
Deposits		657			693			704			679			678
Borrowings		131			100			102			127			114
Subordinated debentures		47			47			46			45			46
Accretion of purchase accounting adjustments		(31	)		(47	)		(46	)		(47	)		(47	)
Total interest expense		804			793			806			804			791

Net interest income		9,613			9,287			9,216			8,879			8,871
Provision for loan losses		10			250			-			150			152
Net interest income after provision for loan losses		9,603			9,037			9,216			8,729			8,719

Non-interest Income:
Service charges on deposit accounts		674			737			591			568			608
Mortgage Income		245			341			357			334			445
Interchange Fee Income		650			611			612			571			561
Gain (loss) on securities, net		-			-			-			-			(4	)
Gain on sale of premises and equipment		-			-			-			110			-
BEA award, net		152			-			-			-			223
Other charges and fees		182			293			294			267			222
Total non-interest income		1,903			1,982			1,854			1,850			2,055

Non-interest expense:
Salaries and employee benefits		4,670			4,628			4,613			4,626			4,551
Occupancy expense		1,107			1,136			1,137			1,109			1,156
FDIC premiums		243			241			241			241			271
Marketing		150			64			161			62			160
Amortization of core deposit intangibles		100			100			100			100			100
Other professional services		377			318			379			258			412
Other non-interest expense		1,628			1,490			1,461			1,422			1,401
Total Non-interest expense		8,275			7,977			8,092			7,818			8,051
Earnings before income taxes		3,231			3,042			2,978			2,761			2,723
Income tax expense		873			815			793			732			682
Net earnings		2,358			2,227			2,185			2,029			2,041
Dividends and accretion on preferred stock		85			86			86			85			86
Net earnings available to common shareholders	$	2,273		$	2,141		$	2,099		$	1,944		$	1,955

Earnings per common share, diluted	$	0.42		$	0.39		$	0.39		$	0.36		$	0.36
Operating earnings per common share, diluted*	$	0.42		$	0.39		$	0.39		$	0.34		$	0.34
*See reconciliation of Non-GAAP financial measures

FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
	Dec 31,			Percent		Sept 30,			June 30,			Mar 31,			Dec 31,			Percent
COMPOSITION OF LOANS	2015			of Total		2015			2015			2015			2014			of Total
Commercial, financial and agricultural	$	129,197		16.6	%	$	123,872		$	116,352		$	110,806		$	106,109		15.0	%
Real estate – construction		99,161		12.8	%		85,769			93,152			93,168			84,935		12.0	%
Real estate – commercial		253,309		32.6	%		251,631			245,537			242,969			238,602		33.8	%
Real estate – residential		272,180		35.1	%		265,763			259,610			254,844			256,406		36.3	%
Lease Financing Receivable		2,650		.3	%		2,303			-			-			-		-
Consumer		16,018		2.1	%		17,250			16,386			14,572			18,479		2.6	%
Loans held for sale		3,974		.5	%		1,058			1,864			1,657			2,103		0.3	%
Total loans	$	776,489		100	%	$	747,646		$	732,901		$	718,016		$	706,634		100	%

	Dec 31,			Percent		Sept 30,			June 30,			Mar 31,			Dec 31,			Percent
COMPOSITION OF DEPOSITS	2015			of Total		2015			2015			2015			2014			of Total
Noninterest bearing	$	189,445		20.7	%	$	187,542		$	193,810		$	203,766		$	201,362		22.6	%
NOW and other		373,687		40.8	%		411,893			393,596			404,605			301,721		33.8	%
Money Market/Savings		174,090		19.0	%		181,861			185,033			183,048			183,633		20.6	%
Time Deposits of less than $100,000		73,865		8.0	%		75,022			77,815			80,606			85,365		9.6	%
Time Deposits of $100,000 or more		105,608		11.5	%		107,522			111,845			112,618			120,694		13.4	%
Total Deposits	$	916,695		100	%	$	963,840		$	962,099		$	984,643		$	892,775		100	%

	Dec 31,					Sept 30,			June 30,			Mar 31,			Dec 31,
ASSET QUALITY DATA	2015					2015			2015			2015			2014
Nonaccrual loans	$	7,368				$	7,949		$	6,513		$	5,995		$	6,056
Loans past due 90 days and over		29					6			92			426			669
Total nonperforming loans		7,397					7,955			6,605			6,421			6,725
Other real estate		3,083					4,104			4,116			4,598			4,654
Nonaccrual securities		408					408			408			408			250
Total nonperforming assets	$	10,888				$	12,467		$	11,129		$	11,427		$	11,629

Nonperforming assets to total assets		.95	%				1.10	%		1.00	%		1.00	%		1.06	%
Nonperforming assets to total loans + ORE		1.40	%				1.66	%		1.51	%		1.58	%		1.64	%
ALLL to nonperforming loans		91.21	%				84.65	%		97.18	%		92.32	%		90.63	%
ALLL to total loans		.87	%				.90	%		.88	%		.83	%		.87	%

Quarter-to-date net charge-offs (recoveries)	$	(3	)			$	(65	)	$	(490	)	$	316		$	141
Annualized QTD net chg/offs (recs) to loans		(0.002	%)				(0.03	%)		(0.27	%)		.18	%		.08	%


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	December 31, 2015						September 30, 2015						June 30, 2015						March 31, 2015						December 31, 2014
			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	$	177,964	$	1,006	2.26	%	$	172,478	$	976	2.26	%	$	179,580	$	991	2.21	%	$	184,401	$	992	2.15	%	$	189,691	$	998	2.10	%
Tax-exempt securities		75,570		685	3.63	%		74,807		662	3.54	%		79,568		702	3.53	%		81,717		759	3.72	%		84,413		783	3.71	%
Total investment securities		253,534		1,691	2.67	%		247,285		1,638	2.65	%		259,148		1,693	2.61	%		266,118		1,751	2.63	%		274,106		1,781	2.60	%
Fed funds sold		405		1	0.99	%		5,502		13	0.95	%		6,702		16	0.95	%		16,248		23	0.57	%		408		6	5.88	%
Int bearing deposits in other banks		21,601		25	0.46	%		20,613		25	0.49	%		24,089		19	0.32	%		27,430		19	0.28	%		18,270		19	0.42	%
Loans		757,036		8,933	4.72	%		731,818		8,629	4.72	%		728,416		8,532	4.69	%		705,752		8,148	4.62	%		678,252		8,122	4.79	%
Total Interest earning assets		1,032,576		10,650	4.13	%		1,005,218		10,305	4.10	%		1,018,355		10,260	4.03	%		1,015,548		9,941	3.92	%		971,034		9,928	4.09	%
Other assets		99,348						104,726						101,293						111,801						102,253
Total assets	$	1,131,924					$	1,109,944					$	1,119,648					$	1,127,349					$	1,073,287

Interest-bearing liabilities:
Deposits	$	752,098	$	626	0.33	%	$	759,939	$	646	0.34	%	$	772,837	$	658	0.34	%	$	736,199	$	632	0.34	%	$	693,657	$	630	0.36	%
Repo		5,000		48	3.84	%		5,000		48	3.84	%		5,000		48	3.84	%		5,000		48	3.84	%		5,000		49	3.92	%
Fed funds purchased		1,984		6	1.21	%		661		2	1.21	%		1,180		3	1.02	%		108		-	0.00	%		1,645		4	0.97	%
FHLB		60,961		77	0.51	%		37,716		50	0.53	%		27,117		51	0.75	%		78,892		78	0.40	%		63,040		62	0.39	%
Subordinated debentures		10,310		47	1.82	%		10,310		47	1.82	%		10,310		46	1.78	%		10,310		45	1.75	%		10,310		46	1.78	%
Total interest bearing liabilities		830,353		804	0.39	%		813,626		793	0.39	%		816,444		806	0.39	%		830,509		804	0.39	%		773,652		791	0.41	%
Other liabilities		200,326						197,150						206,095						199,995						209,177
Shareholders' equity		101,245						99,168						97,109						96,845						90,458
Total liabilities and shareholders' equity	$	1,131,924					$	1,109,944					$	1,119,648					$	1,127,349					$	1,073,287

Net interest income (TE)			$	9,846	3.74	%			$	9,512	3.71	%			$	9,454	3.64	%			$	9,137	3.53	%			$	9,137	3.68	%
Net interest margin					3.81	%					3.79	%					3.71	%					3.60	%					3.76	%

Core net interest margin*					3.77	%					3.73	%					3.66	%					3.57	%					3.72	%


FIRST BANCSHARES, INC and SUBSIDIARIES
Reconcilement of Non-GAAP Financial Measures (unaudited)
(in thousands except per share data)
	Three Months Ended
	Dec 31,			Sept 30,			June 30,			Mar 31,			Dec 31,
Per Common Share Data	2015			2015			2015			2015			2014
Book value per common share	$	16.05		$	15.72		$	15.13		$	15.19		$	14.88
Effect of intangible assets per share		2.95			2.70			2.72			2.73			2.78
Tangible book value per common share	$	13.10		$	13.02		$	12.41		$	12.46		$	12.10

Diluted earnings per share	$	0.42		$	0.39		$	0.39		$	0.36		$	0.36
Effect of gain on sale of other securities, after-tax		-			-			-			-			-
Effect of gain on sale of bank premises, after-tax		-			-			-			(0.02	)		-
Effect of BAE, after-tax		(0.02	)		-			-			-			(0.02	)
Effect of acquisition charges, after-tax		-			-			-			-			-
Diluted earnings per share, operating	$	0.40		$	0.39		$	0.39		$	0.34		$	0.34


	Three Months Ended
	Dec 31,			Sept 30,			June 30,			Mar 31,			Dec 31,
Average Balance Sheet Data	2015			2015			2015			2015			2014
Total average assets A	$	1,131,924		$	1,109,944		$	1,119,648		$	1,127,349		$	1,073,287

Total equity	$	101,245		$	99,168		$	97,109		$	96,845		$	90,458
Less preferred equity		17,123			17,123			17,123			17,123			17,123
Total common equity B		84,122			82,045			79,986			79,722			73,335
Less intangible assets		14,608			14,553			14,652			14,755			14,577
Tangible common equity C	$	69,514		$	67,492		$	65,334		$	64,967		$	58,758


	Three Months Ended
	Dec 31,			Sept 30,			June 30,			Mar 31,			Dec 31,
Core Net Interest Margin	2015			2015			2015			2015			2014
Net interest income (TE)	$	9,846		$	9,512		$	9,454		$	9,137		$	9,137
Less purchase accounting adjustments		90			120			117			48			98
Net interest income, net of purchase accounting adj D	$	9,756		$	9,392		$	9,337		$	9,089		$	9,039

Total average earning assets	$	1,032,576		$	1,005,218		$	1,018,355		$	1,015,548		$	971,034
Add average balance of loan valuation discount		1,583			1,657			1,727			1,730			1,780
Avg earning assets, excluding loan valuation discount E	$	1,034,159		$	1,006,875		$	1,020,082		$	1,017,278		$	972,814

Core net interest margin D/E		3.77	%		3.73	%		3.66	%		3.57	%		3.72	%



	Three Months Ended
	Dec 31,			Sept 30,			June 30,			Mar 31,			Dec 31,
Return Ratios	2015			2015			2015			2015			2014
Net earnings F	$	2,358		$	2,227		$	2,185		$	2,029		$	2,041
Dividends and accretion on preferred stock		85			86			86			85			86
Net earnings available to common shareholders		2,273			2,141			2,099			1,944			1,955
Gain on sale of other securities, after-tax		-			-			-			-			-
Gain on sale of premises and equipment, after-tax		-			-			-			(84	)		-
BAE, after-tax		(112	)		-			-			-			(165	)
Acquisition charges, after-tax		-			-			-			-			22
Net earnings available to common shareholders, oper G	$	2,161		$	2,141		$	2,099		$	1,860		$	1,812

Annualized return on avg assets F/A		.83	%		.80	%		.78	%		.72	%		.76	%
Annualized return on avg assets, oper G/A		.76	%		.78	%		.75	%		.66	%		.68	%
Annualized return on avg common equity, oper G/B		10.27	%		10.44	%		10.50	%		9.33	%		9.88	%
Annualized return on avg tangible common equity, oper G/C		12.43	%		12.69	%		12.85	%		11.45	%		12.34	%

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/20160128006622/en/

The First Bancshares, Inc.
M. Ray “Hoppy” Cole
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 35.3% Increase in Year-Over-Year Results and Declares Quarterly Dividends