The First Bancshares, Inc. Reports a 45% Increase in Operating Net Earnings and Declares Quarterly Dividends

Company Release - 4/21/2017 5:11 PM ET

HATTIESBURG, Miss.--(BUSINESS WIRE)-- The First Bancshares, Inc. (NASDAQ: FBMS), holding company for The First, A National Banking Association, (www.thefirstbank.com) reported today a 45% increase ($1.1 million) in operating net earnings (net income available to common shareholders adjusted for merger related costs) for the first quarter of 2017 compared to the first quarter of 2016. Operating net earnings available to common shareholders totaled $3.4 million for first quarter 2017 as compared to $2.3 million for first quarter 2016. Operating net earnings available to common shareholders excludes tax effected merger related expenses of $2.3 million in the first quarter of 2017. A one-time gain of $0.2 million occurred in the first quarter of 2016.

Fully diluted earnings per share for the first quarter of 2017 were $0.12 as compared to $0.46 for the first quarter of 2016. Fully diluted earnings per share for the first quarter of 2017 includes one-time merger related costs of $0.25 and also includes the issuance of 3,563,380 in new common shares during the fourth quarter of 2016 related to the capital raise in October 2016.

Highlights for the Quarter:

The acquisitions of Iberville Bank and Gulf Coast Community Bank closed as planned on January 1, 2017.
Acquisitions added loans of $239.6 million and deposits of $355.7 million (loan and deposit figures are net of credit and rate marks).
Excluding acquisitions, loans increased $33.3 million during the first quarter of 2017.
Excluding acquisitions, deposits increased $173.6 million during the first quarter of 2017.
Operating net earnings were $3.4 million for the first quarter of 2017 as compared to $2.4 million for the fourth quarter of 2016 and as compared to $2.3 million for the first quarter of 2016.

M. Ray “Hoppy” Cole, President & Chief Executive Officer, commented, “We are very pleased with first quarter results especially given the complexities of closing two mergers at once. We welcome our new clients and team members associated with Gulf Coast Community Bank and Iberville Bank. We are thrilled to have them on board.”

Balance Sheet

Total assets increased $505.8 million or 39.6% to $1,783.2 billion for the quarter ended March 31, 2017 of which approximately $390 million of asset growth was associated with the closing of the two acquisitions.

Total loans were $1,140.0 billion at March 31, 2017 as compared to $867.1 million at December 31, 2016 and as compared to $797.8 million at March 31, 2016 representing increases of $272.9 million, or 31.5% for the quarter ended March 31, 2017 and $342.2 million, or 42.9% as compared to first quarter 2016. The acquisitions accounted for $239.6 million of the total increase in loans during the quarter. Organic loan growth was $33.3 million or 3.8% for the quarter.

Total deposits increased $529.3 million or 50.9% for the quarter ended March 31, 2017, of which $355.7 million was a result of the acquisition. The balance of the increase was $173.6 million of which $151.2 million is due to season fluctuations in public deposit accounts.

Asset Quality

Nonperforming assets totaled $13.3 million at March 31, 2017, an increase of $3.4 million compared to $9.9 million at December 31, 2016 and an increase of $2.0 million compared to March 31, 2016. The majority of the increase is the result of acquired assets with associated fair value marks. The ALLL/total loans ratio was 0.69% at March 31, 2017 and 0.87% at December 31, 2016. Including valuation accounting adjustments on acquired loans, the total valuation plus ALLL was 1.24% of loans at March 31, 2017. The ratio of annualized net charge-offs (recoveries) to total loans was (0.10)% for the quarter ended March 31, 2017 compared to 0.03% for the quarter ended December 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 was received during the fourth quarter of 2016.

Energy Loans

At March 31, 2017 the company had direct energy related loans of $19.7 million, representing 1.7% 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.

First Quarter 2017 vs. First Quarter 2016 Earnings Comparison

First quarter 2017 net earnings available to common shareholders (including merger related costs) totaled $1.1 million compared to $2.5 million for the first quarter of 2016.

Revenues from consolidated operations increased $6.1 million in quarterly comparison. Net interest income increased $4.5 million in quarterly comparison as interest income earned on a higher volume of loans attributed to this overall increase. Noninterest income increased $0.9 million in quarterly comparison for the first quarter of 2017 as compared to the first quarter of 2016 with increases spread over service charges, mortgage income and interchange fee income.

First quarter 2017 noninterest expense increased $7.7 million, or 91.7% as compared to first quarter 2016. The largest increases in noninterest expense were related to salaries and benefits of $2.8 million of which $2.2 million is associated with increased number of employees associated with the acquisitions and other professional services and other noninterest expenses included $3.6 million in before-tax merger costs.

Fully taxable-equivalent (“FTE”) net interest income totaled $14.5 million and $9.9 million for the first quarter of 2017 and 2016, respectively. The FTE net interest income increased $4.6 million in prior year quarterly comparison primarily due to an increase in interest earned on loans. Purchase accounting adjustments accounted for $74,000 of the difference in net interest income for the first quarter comparisons. First quarter 2017 net interest margin of 3.85% includes 3 bps related to purchase accounting adjustments.

Investment securities totaled $366.5 million, or 20.6% of total assets at March 31, 2017, versus $269.5 million, or 21.7% of total assets at March 31, 2016. The average volume of investment securities increased $65.9 million in prior year quarterly comparison primarily the result of the acquisitions. The average tax equivalent yield on investment securities increased 30 bps to 2.93%. The investment portfolio had a net unrealized gain of $0.6 million at March 31, 2017 as compared to a net unrealized gain of $3.7 million at March 31, 2016.

The average yield on all earnings assets increased 25 basis points in prior year quarterly comparison, from 4.02% for the first quarter of 2016 to 4.27% for the first quarter of 2017. This increase was offset partially by an increase in average interest expense of 10 basis points from 0.41% for the first quarter of 2016 to 0.51% for the first quarter of 2017.

First Quarter 2017 vs Fourth Quarter 2016 Earnings Comparison

In sequential-quarter comparison, net earnings available to common shareholders decreased $1.0 million to $1.1 million which included after-tax one-time acquisition charges of $2.3 million.

FTE net interest income increased $3.6 million to $14.5 million from $10.9 million in sequential-quarter comparison. The increase was due primarily to increased loan volume. Interest income from purchase accounting adjustments decreased $0.3 million in quarterly comparison.

The average yield on all earnings assets increased 10 basis points in sequential-quarter comparison, from 4.17% for the fourth quarter of 2016 to 4.27% for the first quarter of 2017.

Noninterest income increased $0.7 million in sequential-quarter comparison consisting of increases in service charges and interchange fee income and a decrease in mortgage income of $0.3 million.

Noninterest expense increased $5.9 million in sequential-quarter comparison which includes an increase in salaries and benefits of $2.1 million. The majority of this increase was associated with the acquisitions. Merger related costs were $3.6 million and included in other professional services and other noninterest expenses.

Other Events

The Company will make a presentation at the 21^st Annual Burkenroad Reports Investment Conference at The Sheraton New Orleans Hotel in New Orleans, Louisiana, Friday, April 28, 2017 at 9:30 a.m. central time. This will be an interactive session between management and those attending the conference. The presentation will be available at the company’s internet site (www.thefirstbank.com) under the Investor Relations tab.

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 May 24, 2017 to shareholders of record as of the close of business on May 3, 2017.

About The First Bancshares, Inc.

The First Bancshares, Inc., headquartered in Hattiesburg, Mississippi, is the parent company of The First, A National Banking Association. Founded in 1996, the First has operations in Mississippi, Louisiana, Alabama and Florida. 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 3/31/17			Quarter Ended 12/31/16			Quarter Ended 9/30/16			Quarter Ended 6/30/16			Quarter Ended 3/31/16
Total Interest Income	$	15,753		$	11,868		$	11,269		$	10,871		$	10,597
Total Interest Expense		1,585			1,176			1,202			1,016			922
Net Interest Income		14,168			10,692			10,067			9,855			9,675
FTE net interest income		14,470			10,935			10,306			10,099			9,912
Provision for loan losses		46			88			143			204			190
Non-interest income		3,391			2,705			3,099			2,961			2,483
Non-interest expense		16,095			10,132			9,416			8,921			8,395
Earnings before income taxes		1,418			3,177			3,607			3,691			3,573
Income tax expense		296			870			1,049			1,042			969
Net earnings		1,122			2,307			2,558			2,649			2,604
Dividends and accretion on preferred stock		-			195			86			86			85
Net earnings available to common shareholders	$	1,122		$	2,112		$	2,472		$	2,563		$	2,519

PER COMMON SHARE DATA
Basic earnings per share	$	0.12		$	0.39		$	0.46		$	0.47		$	0.47
Basic earnings per share, operating*		0.37			0.44			0.48			0.47			0.43
Diluted earnings per share		0.12			0.26			0.45			0.47			0.46
Diluted earnings per share, operating*		0.37			0.30			0.48			0.47			0.43
Quarterly dividends per share		.0375			.0375			.0375			.0375			.0375
Book value per common share at end of period		17.39			17.19			17.60			17.15			16.58
Tangible common book value at period end		14.57			15.46			14.73			14.26			13.67
Market price at end of period		28.50			27.50			19.10			17.27			15.63
Shares outstanding at period end		9,144,412			8,991,397			5,428,017			5,432,014			5,432,014
Weighted average shares outstanding:
Basic		9,123,271			5,463,651			5,425,567			5,432,014			5,415,339
Diluted		9,182,711			8,500,305			5,475,785			5,490,592			5,478,703

AVERAGE BALANCE SHEET DATA
Total assets	$	1,713,438		$	1,275,538		$	1,233,034		$	1,210,707		$	1,196,328
Loans and leases		1,117,135			856,798			836,931			809,806			779,418
Total deposits		1,460,787			1,037,877			1,044,428			1,036,914			964,681
Total common equity		157,184			94,750			94,007			88,643			87,155
Total tangible common equity*		134,809			79,112			78,347			72,885			71,297
Total equity		157,184			159,786			111,130			105,766			104,278

SELECTED RATIOS
Annualized return on avg assets		.26	%		.72	%		.83	%		.88	%		.87	%
Annualized return on avg assets, operating*		.79	%		.75	%		.85	%		.85	%		.78	%
Annualized return on avg common equity, operating*		8.61	%		10.11	%		11.14	%		11.57	%		10.69	%
Annualized return on avg tangible common equity, oper*		10.04	%		12.10	%		13.37	%		14.07	%		13.07	%
Average loans to average deposits		76.47	%		82.55	%		80.13	%		78.10	%		80.80	%
Taxable-equivalent net interest margin		3.85	%		3.77	%		3.70	%		3.68	%		3.68	%
Efficiency Ratio		90.11	%		74.28	%		70.24	%		68.31	%		67.73	%
Efficiency Ratio, operating*		69.97	%		71.40	%		68.70	%		68.31	%		69.18	%

CREDIT QUALITY
Allowance for loan losses (ALLL) as a % of total loans		.69	%		.87	%		.88	%		.88	%		.88	%
Nonperforming assets to tangible equity + ALLL		9.42	%		6.74	%		10.81	%		10.93	%		11.43	%
Nonperforming assets to total loans + ORE		1.16	%		1.14	%		1.31	%		1.34	%		1.40	%
Annualized QTD net charge-offs (recoveries) to total loans		(0.10	)%		0.03	%		(0.04	%)		(0.03	%)		(0.02	%)

*See reconciliation of Non-GAAP financial measures




FIRST BANCSHARES, INC and SUBSIDIARIES Condensed Consolidated Financial Information (unaudited) (in thousands)
BALANCE SHEET	Mar 31, 2017			Dec 31, 2016			Sept 30, 2016			June 30, 2016			Mar 31, 2016
Assets
Cash and cash equivalents	$	148,511		$	62,119		$	70,114		$	54,777		$	95,965
Securities available-for-sale		352,851			243,206			236,168			242,855			253,126
Securities held-to-maturity		6,000			6,000			6,000			6,025			6,851
Other investments		7,647			6,593			9,516			9,578			9,570
Total investment securities		366,498			255,799			251,684			258,458			269,547
Loans held for sale		5,473			5,880			9,437			8,937			6,095
Total loans		1,139,987			867,054			854,366			824,083			797,764
Allowance for loan losses		(7,813	)		(7,510	)		(7,481	)		(7,259	)		(6,982	)
Loans, net		1,132,174			859,544			846,885			816,824			790,782
Premises and equipment		45,438			34,624			33,427			33,502			33,353
Other Real Estate		7,579			6,008			4,670			4,716			4,363
Goodwill and other intangibles		25,762			15,507			15,596			15,696			15,796
Other assets		51,769			37,886			34,825			31,990			26,050
Total assets	$	1,783,204		$	1,277,367		$	1,266,638		$	1,224,900		$	1,241,951

Liabilities and Shareholders’ Equity
Non-interest bearing deposits	$	323,442		$	202,478		$	196,786		$	194,950		$	194,433
Interest-bearing deposits		1,245,055			836,713			875,003			837,413			846,672
Total deposits		1,568,497			1,039,191			1,071,789			1,032,363			1,041,105
Borrowings		39,411			69,000			68,000			68,000			78,976
Subordinated debentures		10,310			10,310			10,310			10,310			10,310
Other liabilities		5,981			4,339			3,881			3,929			4,363
Total liabilities		1,624,199			1,122,840			1,153,980			1,114,602			1,134,754
Total shareholders’ equity		159,005			154,527			112,658			110,298			107,197
Total liabilities and shareholders’ equity	$	1,783,204		$	1,277,367		$	1,266,638		$	1,224,900		$	1,241,951




FIRST BANCSHARES, INC and SUBSIDIARIES Condensed Consolidated Financial Information (unaudited) (in thousands except per share data)
EARNINGS STATEMENT	Three Months Ended
EARNINGS STATEMENT	3/31/17			12/31/16			9/30/16		6/30/16		3/31/16
Interest Income:
Loans, including fees	$	13,444		$	9,922		$	9,706	$	9,293	$	9,013
Investment securities		2,129			1,472			1,446		1,531		1,532
Accretion of purchase accounting adjustments		56			429			92		20		22
Other interest income		124			45			25		27		30
Total interest income		15,753			11,868			11,269		10,871		10,597
Interest Expense:
Deposits		1,198			968			962		813		701
Borrowings		376			148			160		149		193
Subordinated debentures		51			60			80		54		28
Accretion of purchase accounting adjustments		(40	)		-			-		-		-
Total interest expense		1,585			1,176			1,202		1,016		922
Net interest income		14,168			10,692			10,067		9,855		9,675
Provision for loan losses		46			88			143		204		190
Net interest income after provision for loan losses		14,122			10,604			9,924		9,651		9,485

Non-interest Income:
Service charges on deposit accounts		868			605			606		604		637
Mortgage Income		916			1,204			1,399		1,184		645
Interchange Fee Income		903			683			666		681		644
Gain (loss) on securities, net		(8	)		(3	)		-		129		-
Gain on sale of premises and equipment		-			-			-		-		-
BEA award, net		-			-			-		-		-
Other charges and fees		712			216			428		363		557
Total non-interest income		3,391			2,705			3,099		2,961		2,483

Non-interest expense:
Salaries and employee benefits		7,981			5,943			5,645		5,400		5,149
Occupancy expense		1,370			1,222			1,209		1,110		1,073
FDIC premiums		201			265			254		257		244
Marketing		69			122			76		132		72
Amortization of core deposit intangibles		149			88			100		100		94
Other professional services		3,010			793			461		321		231
Other non-interest expense		3,315			1,699			1,671		1,601		1,532
Total Non-interest expense		16,095			10,132			9,416		8,921		8,395
Earnings before income taxes		1,418			3,177			3,607		3,691		3,573
Income tax expense		296			870			1,049		1,042		969
Net earnings		1,122			2,307			2,558		2,649		2,604
Dividends and accretion on preferred stock		-			195			86		86		85
Net earnings available to common shareholders	$	1,122		$	2,112		$	2,472	$	2,563	$	2,519

Basic earnings per common share	$	0.12		$	0.39		$	0.46	$	0.47	$	0.47
Basic earnings per common share, operating*	$	0.37		$	0.44		$	0.48	$	0.47	$	0.43
Diluted earnings per common share	$	0.12		$	0.26		$	0.45	$	0.47	$	0.46
Diluted earnings per common share, operating*	$	0.37		$	0.30		$	0.48	$	0.47	$	0.43

*See reconciliation of Non-GAAP financial measures




FIRST BANCSHARES, INC and SUBSIDIARIES Condensed Consolidated Financial Information (unaudited) (in thousands)
COMPOSITION OF LOANS	Mar 31, 2017			Percent of Total		Dec 31, 2016			Sept 30, 2016			June 30, 2016			Mar 31, 2016			Percent of Total
Commercial, financial and agricultural	$	156,786		13.7	%	$	129,423		$	121,963		$	118,924		$	126,381		15.7	%
Real estate – construction		163,249		14.3	%		109,394			104,644			101,439			100,386		12.5	%
Real estate – commercial		426,151		37.2	%		314,359			307,963			296,676			270,085		33.6	%
Real estate – residential		360,964		31.5	%		289,640			296,587			282,420			276,272		34.4	%
Lease Financing Receivable		2,196		0.2	%		2,204			2,211			2,642			2,645		0.3	%
Obligations of States & subdivisions		5,383		0.5	%		6,698			6,861			6,965			7,034		0.9	%
Consumer		25,258		2.2	%		15,336			14,137			15,017			14,961		1.9	%
Loans held for sale		5,473		0.4	%		5,880			9,437			8,937			6,095		0.7	%
Total loans	$	1,145,460		100	%	$	872,934		$	863,803		$	833,020		$	803,859		100	%

COMPOSITION OF DEPOSITS	Mar 31, 2017			Percent of Total		Dec 31, 2016			Sept 30, 2016			June 30, 2016			Mar 31, 2016			Percent of Total
Noninterest bearing	$	323,442		20.6	%	$	202,478		$	196,786		$	194,950		$	194,433		18.7	%
NOW and other		661,300		42.2	%		430,903			465,404			466,118			493,319		47.4	%
Money Market/Savings		304,292		19.4	%		182,793			187,228			174,740			169,733		16.3	%
Time Deposits of less than $250,000		212,352		13.5	%		162,797			163,739			148,049			139,917		13.4	%
Time Deposits of $250,000 or more		67,111		4.3	%		60,220			58,632			48,506			43,703		4.2	%
Total Deposits	$	1,568,497		100	%	$	1,039,191		$	1,071,789		$	1,032,363		$	1,041,105		100	%

ASSET QUALITY DATA	Mar 31, 2017					Dec 31, 2016			Sept 30, 2016			June 30, 2016			Mar 31, 2016
Nonaccrual loans	$	4,955				$	3,265		$	5,798		$	5,742		$	5,851
Loans past due 90 days and over		345					198			420			267			628
Total nonperforming loans		5,300					3,463			6,218			6,009			6,479
Other real estate		7,579					6,008			4,670			4,716			4,363
Nonaccrual securities		408					408			408			408			408
Total nonperforming assets	$	13,287				$	9,879		$	11,296		$	11,133		$	11,250

Nonperforming assets to total assets		.75	%				.77	%		.89	%		.91	%		.91	%
Nonperforming assets to total loans + ORE		1.16	%				1.14	%		1.31	%		1.34	%		1.40	%
ALLL to nonperforming loans		147.42	%				216.86	%		120.31	%		120.80	%		107.80	%
ALLL to total loans		.69	%				.87	%		.88	%		.88	%		.88	%

Quarter-to-date net charge-offs (recoveries)	$	(284	)			$	58		$	(79	)	$	(72	)	$	(48	)
Annualized QTD net chg/offs (recs) to loans		(0.10	)%				0.03	%		(0.04	%)		(0.03	%)		(0.02	%)




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	March 31, 2017						December 31, 2016						September 30, 2016						June 30, 2016						March 31, 2016
			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	$	244,997	$	1,534	2.50	%	$	183,032	$	997	2.18	%	$	177,154	$	965	2.18	%	$	186,615	$	1,034	2.22	%	$	189,249	$	1,056	2.23	%
Tax-exempt securities		86,991		895	4.12	%		77,909		715	3.67	%		77,073		704	3.65	%		78,290		721	3.68	%		76,795		693	3.61	%
Total investment securities		331,988		2,429	2.93	%		260,941		1,712	2.62	%		254,227		1,669	2.63	%		264,905		1,755	2.65	%		266,044		1,749	2.63	%
Fed funds sold		50,700		124	0.98	%		41,545		45	0.43	%		10,356		25	0.97	%		9,902		27	1.09	%		12,395		30	0.97	%

Int bearing deposits in other banks		5,000		2	0.16	%		2,107		3	0.57	%		11,961		16	0.54	%		12,522		20	0.64	%		20,909		20	0.38	%
Loans		1,117,110		13,500	4.83	%		856,798		10,351	4.83	%		836,931		9,798	4.68	%		809,806		9,313	4.60	%		779,418		9,035	4.64	%
Total Interest earning assets		1,504,798		16,055	4.27	%		1,161,391		12,111	4.17	%		1,113,475		11,508	4.13	%		1,097,135		11,115	4.05	%		1,078,766		10,834	4.02	%
Other assets		208,640						114,147						119,559						113,572						117,562
Total assets	$	1,713,438					$	1,275,538					$	1,233,034					$	1,210,707					$	1,196,328

Interest-bearing liabilities:
Deposits	$	1,149,287	$	1,158	0.40	%	$	844,101	$	968	0.46	%	$	850,442	$	962	0.45	%	$	843,771	$	813	0.39	%	$	777,692	$	701	0.36	%
Repo		5,000		48	3.84	%		5,000		48	3.84	%		5,000		49	3.92	%		5,000		48	3.84	%		5,000		48	3.84	%
Fed funds purchased		975		2	0.82	%		191		1	2.09	%		1,926		5	1.04	%		2,894		8	1.11	%		782		2	1.02	%
FHLB & FTN		79,581		326	1.64	%		56,272		98	0.70	%		55,337		106	0.77	%		42,962		93	0.87	%		106,352		143	0.54	%
Subordinated
debentures		10,310		51	1.98	%		10,310		61	2.37	%		10,310		80	3.10	%		10,310		54	2.10	%		10,310		28	1.09	%
Total interest bearing liabilities		1,245,153		1,585	0.51	%		915,874		1,176	0.51	%		923,015		1,202	0.52	%		904,937		1,016	0.45	%		900,136		922	0.41	%
Other liabilities		311,101						199,878						198,889						200,004						191,914
Shareholders' equity		157,184						159,786						111,130						105,766						104,278
Total liabilities and shareholders' equity	$	1,713,438					$	1,275,538					$	1,233,034					$	1,210,707					$	1,196,328

Net interest
income (TE)			$	14,470	3.76	%			$	10,935	3.66	%			$	10,306	3.61	%			$	10,099	3.60	%			$	9,912	3.61	%

Net interest margin					3.85	%					3.77	%					3.70	%					3.68	%					3.68	%

Core net interest margin*					3.82	%					3.61	%					3.66	%					3.67	%					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		Mar 31, 2017			Dec 31, 2016			Sept 30, 2016			June 30, 2016			Mar 31, 2016
Book value per common share		$	17.39		$	17.19		$	17.60		$	17.15		$	16.58
Effect of intangible assets per share			2.82			1.73			2.87			2.98			2.91
Tangible book value per common share		$	14.57		$	15.46		$	14.73		$	14.26		$	13.67

Diluted earnings per share		$	0.12		$	0.26		$	0.45		$	0.47		$	0.46
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			-			-			-			-			-
Effect of acquisition charges, after-tax			0.25			0.04			0.03			-			-
Diluted earnings per share, operating		$	0.37		$	0.30		$	0.48		$	0.47		$	0.43


		Three Months Ended
Average Balance Sheet Data		Mar 31, 2017			Dec 31, 2016			Sept 30, 2016			June 30, 2016			Mar 31, 2016
Total average assets	A	$	1,713,438		$	1,275,538		$	1,233,034		$	1,210,707		$	1,196,328

Total equity		$	157,184		$	159,786		$	111,130		$	105,766		$	104,278
Less preferred equity			-			65,036			17,123			17,123			17,123
Total common equity	B		157,184			94,750			94,007			88,643			87,155
Less intangible assets			22,375			15,638			15,660			15,758			15,858
Tangible common equity	C	$	134,809		$	79,112		$	78,347		$	72,885		$	71,297


		Three Months Ended
Core Net Interest Margin		Mar 31, 2017			Dec 31, 2016			Sept 30, 2016			June 30, 2016			Mar 31, 2016
Net interest income (TE)		$	14,470		$	10,935		$	10,306		$	10,099		$	9,912
Less purchase accounting adjustments			96			429			92			20			22
Net interest income, net of purchase accounting adj	D	$	14,374		$	10,506		$	10,214		$	10,079		$	9,890

Total average earning assets		$	1,504,798		$	1,161,391		$	1,113,475		$	1,097,135		$	1,078,766
Add average balance of loan valuation discount			2,159			1,358			1,484			1,504			1,526
Avg earning assets, excluding loan valuation discount	E	$	1,506,957		$	1,162,749		$	1,114,959		$	1,098,639		$	1,080,292

Core net interest margin	D/E		3.82	%		3.61	%		3.66	%		3.67	%		3.66	%




		Three Months Ended
Return Ratios		Mar 31, 2017			Dec 31, 2016			Sept 30, 2016			June 30, 2016			Mar 31, 2016
Net earnings	F	$	1,122		$	2,307		$	2,558		$	2,649		$	2,604
Dividends and accretion on preferred stock			-			195			86			86			85
Net earnings available to common shareholders			1,122			2,112			2,472			2,563			2,519
Gain on debit card conversion, after-tax			-			-			-			-			(189	)
Gain on sale of premises and equipment, after-tax			-			-			-			-			-
BAE, after-tax			-			-			-			-			-
Acquisition charges, after-tax			2,261			282			146			-			-
Net earnings available to common shareholders, oper	G	$	3,383		$	2,394		$	2,618		$	2,563		$	2,330

Annualized return on avg assets	F/A		.26	%		.72	%		.83	%		.88	%		.87	%
Annualized return on avg assets, oper	G/A		.79	%		.75	%		.85	%		.85	%		.78	%
Annualized return on avg common equity, oper	G/B		8.61	%		10.11	%		11.14	%		11.57	%		10.69	%
Annualized return on avg tangible common equity, oper	G/C		10.04	%		12.10	%		13.37	%		14.07	%		13.07	%

Mortgage Department
Net Interest Income after provision for loan losses		$	253		$	48		$	24		$	59		$	125
Loan fee income			916			1,204			1,399			1,184			645
Other non-interest income			-			1			1			3			2-
Salaries and employee benefits			806			783			805			724			563
Other non-interest expense			114			144			124			110			90
Earnings before income taxes		$	249		$	326		$	495		$	412		$	119

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/20170421005860/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 45% Increase in Operating Net Earnings and Declares Quarterly Dividends