The First Bancshares, Inc. Reports 2013 Earnings and Declaration of Dividend

Business Wire

HATTIESBURG, Miss.--(BUSINESS WIRE)--

The First Bancshares, Inc. (FBMS), holding company for The First, A National Banking Association, (www.thefirstbank.com) today reported earnings for the fourth quarter and fiscal year ended December 31, 2013. The First Bancshares, Inc. also announced a quarterly dividend of $.0375 per common share. The record date will be February 14, 2014 with a payable date of March 3, 2014.

Net income available to common stockholders for the three months ended December 31, 2013 amounted to $1,392,000, or $0.27 per diluted share, compared to $1,062,000, or $0.34 per diluted share for the same quarter in 2012, an increase of $330,000 or 31.1% in net income available to common stockholders.

Net income available to common stockholders for the year ended December 31, 2013 amounted to $4,215,000, or $0.96 per diluted share, compared to $3,624,000, or $1.16 per diluted share for the same period in 2012, an increase of $591,000 or 16.3% in net income available to common stockholders. Net income available to common stockholders exclusive of one-time items for the twelve months ended December 31, 2013 was $4,878,000, or $1.12 per diluted share, a 35.0% increase in net income available to common stockholders over the same period in 2012.

M. Ray “Hoppy” Cole, President & Chief Executive Officer, commented, “We are pleased with the results of 2013. We were successful in growing our Company, increasing our presence in existing markets and opening up new markets for further expansion. Our growth was both organic and acquisitive as we completed the acquisition of The First National Bank of Baldwin County during the year. Total assets increased 30.4% in 2013 and net income to common shareholders increased 16.3% year over year which included $1,439,000 of one-time pretax charges associated with the acquisition. We are excited about the opportunities throughout our footprint, which we believe will continue to create value for our shareholders.”

Balance Sheet Highlights

Total assets for the Company totaled $940.9 million at December 31, 2013, a decrease of $11.0 million compared with September 30, 2013. The decrease during the fourth quarter of 2013 was attributable to a decline in the Company’s deposit balances associated with seasonal fluctuations and a reduction in high cost funds acquired through acquisition.

December 31, 2013 loans outstanding increased by $10.8 million, or approximately 8% on an annualized basis, compared with September 30, 2013, and increased $169.6 million, or 41.0%, compared to December 31, 2012 total loans outstanding. Loans of $124.2 million were acquired from First National Bank of Baldwin County on April 30, 2013. The remaining increase in loans of $45.4 million was broad based across all categories and throughout the Company’s market area.

             

End of Period Loan Balances

12/31/13 09/30/13 12/31/12
(dollars in thousands)
Loans held for sale $ 3,680 $ 1,399 $ 5,585
Commercial 81,792 79,094 53,234
Real Estate:
Mortgage-commercial 212,388 198,123 142,046
Mortgage-residential 202,343 211,494 140,703
Construction 67,287 66,745 57,529
Consumer and other   15,813   15,658   14,600
$ 583,303 $ 572,513 $ 413,697
 

Non-performing assets totaled $10.3 million at December 31, 2013 compared to $10.4 million of non-performing assets at September 30, 2013 and $12.5 million at December 31, 2012. Non-performing assets represented 1.09% of total assets at December 31, 2013 compared to 1.09% of total assets at September 30, 2013, and compared to 1.73% at December 31, 2012. Non-performing loans totaled $3.3 million at December 31, 2013 compared to $3.2 million at September 30, 2013 and compared to $3.7 million of non-performing loans at December 31, 2012. Non-performing loans represented 0.57% of total loans at December 31, 2013 compared with 0.55% of total outstanding loans at September 30, 2013 and 0.91% of total loans outstanding at December 31, 2012.

             

Non-Performing Assets

12/31/13 09/30/13 12/31/12
(dollars in thousands)
Non-Accrual Loans $ 3,181 $ 2,681 $ 3,589
Past Due Loans (90 days or more)   159   471   158
Total Non-Performing Loans 3,340 3,152 3,747
Non-Accrual Securities 1,950 1,950 1,950
Other Real Estate   5,010   5,292   6,782
Total Non-Performing Assets $ 10,300 $ 10,394 $ 12,479
 

The Company’s allowance for loan losses totaled $5.7 million at December 31, 2013 representing an increase of $56,000, or 3.9% on an annualized basis, from September 30, 2013 and an increase of $1,001,000, or 21.2%, from December 31, 2012. The allowance for loan losses represented 0.98% of period-end loans at December 31, 2013 compared with 0.99% of period-end loans at September 30, 2013 and 1.14% of period-end loans at December 31, 2012. Under acquisition accounting treatment, loans acquired are recorded at fair value which includes a credit risk component, and therefore the allowance on loans acquired is not carried over from the seller. The allowance for loan losses represented 1.21% of period end loans excluding those booked at fair value at December 31, 2013 compared with 1.26% at September 30, 2013 and 1.20% at December 31, 2012.

Total deposits decreased $34.0 million or 16.7% on an annualized basis, as of December 31, 2013 compared with September 30, 2013 total deposits and increased by approximately $183.3 million or 30.7% compared with December 31, 2012. Deposits of $185.8 million were acquired from First National Bank of Baldwin County on April 30, 2013.

             

End of Period Deposit Balances

12/31/13 09/30/13 12/31/12
(dollars in thousands)
Non-interest-bearing Demand Deposits $ 173,794 $ 169,001 $ 109,624
IB Demand, Savings, and MMDA Accounts 403,190 434,449 326,067
Time Deposits 85,880 88,907 69,115
Time Deposits > $100,000   117,107   121,608   91,821
$ 779,971 $ 813,965 $ 596,627
 

Results of Operations Highlights – Quarter ended September 30, 2013

Net income available to common stockholders for the quarter ended December 31, 2013 totaled $1,392,000 or $0.27 per diluted share, an increase of $330,000 or 31.1% from the fourth quarter of 2012 net income available to common stockholders of $1,062,000 or $0.34 per diluted share.

During the quarter ended December 31, 2013, net interest income totaled $7,766,000 representing an increase of $1,996,000, or 34.6%, compared with the quarter ended December 31, 2012 net interest income of $5,770,000. The tax equivalent net interest margin for the quarter ended December 31, 2013 was 3.76% compared to 3.73% in the fourth quarter of 2012. The increase in net interest income and the net interest margin during the quarter ended December 31, 2013 compared with the fourth quarter of 2012 was attributable primarily to increased average loans outstanding.

Fair value accounting adjustments on acquired assets and liabilities contributed approximately 11 basis points on an annualized basis to the net interest margin in the fourth quarter of 2013 and 5 basis points in the fourth quarter of 2012.

During the quarter ended December 31, 2013, non-interest income totaled $1,671,000, an increase of $79,000 or 4.9%, compared with the quarter ended September 30, 2013, and a decrease of $150,000, or 8.2%, compared with the fourth quarter of 2012. The decrease for the quarter ended December 31, 2013 is attributed to a $443,000, or 57.3% decline in mortgage income as compared to the quarter ended December 31, 2012.

             

Quarter
Ended

Quarter
Ended

Quarter
Ended

Non-interest Income

12/31/13 09/30/13 12/31/12
(dollars in thousands)
Service Charges on Deposit Accounts $ 617 $ 649 $ 515
Mortgage Income 330 454 773
Interchange Fee Income 479 472 381
Other Operating Income   245   17   152
Total Non-interest Income $ 1,671 $ 1,592 $ 1,821
 

During the quarter ended December 31, 2013, non-interest expense totaled $7,308,000, a decrease of $322,000, or 4.2%, compared with the quarter ended September 30, 2013, and an increase of $1,517,000, or 26.2%, compared with the fourth quarter of 2012.

             

Quarter
Ended

Quarter
Ended

Quarter
Ended

Non-interest Expense

12/31/13 09/30/13 12/31/12
(dollars in thousands)
Salaries and Employee Benefits $ 3,932 $ 4,010 $ 2,992
Occupancy, Furniture and Equipment Expense 1,057 802 830
FDIC Premiums 231 181 182
Professional Fees 375 618 291
Advertising and Promotion 160 98 111
Intangible Amortization 94 94 77
Other Operating Expenses   1,459   1,827   1,308
Total Non-interest Expense $ 7,308 $ 7,630 $ 5,791
 

Total non-interest expense increases are primarily related to increases in operating costs associated with the acquisition of First National Bank of Baldwin County on April 30, 2013. One-time acquisition costs expensed during the fourth quarter of 2013 amounted to $30,000 and one-time acquisition costs expensed during 2013 amounted to $1,439,000.

About The First Bancshares, Inc.

The First Bancshares, Inc., headquartered in Hattiesburg, Mississippi, is the parent company of The First, A National Banking Association. Founded in 1996, the First has operations in south Mississippi, Louisiana and south Alabama. The Company’s stock is traded on NASDAQ Global Market under the symbol FBMS. Information is available on the Company’s website: www.thefirstbank.com.

Forward Looking Statement

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

 
THE FIRST BANCSHARES, INC.
(unaudited, dollars in thousands except per shares data)
 
Consolidated Balance Sheets
     

Dec 31,
2013

   

Sept 30,
2013

   

Dec 31,
2012

ASSETS
Cash and Due from Banks $ 24,080 $ 26,110 $ 20,225
Federal funds sold 967 1,328 1,064
Interest-bearing deposits with banks 14,205 24,326 9,588
Investment Securities 258,023 264,883 226,301
Loans held for sale 3,680 1,399 5,585
Loans, Net of Unearned Income 579,623 571,114 408,112
Allowance for Loan Losses   (5,728 )   (5,672 )   (4,727 )
Net Loans 573,895 565,442 403,385
Premises and Equipment 31,532 32,551 22,243
Other Real Estate Owned 5,010 5,292 6,782
Goodwill 10,621 10,621 9,362
Other Assets   18,877     19,943     16,850  
TOTAL ASSETS $ 940,890   $ 951,895   $ 721,385  
LIABILITIES
Non-interest-bearing Demand Deposits $ 173,794 $ 169,001 $ 109,625
Interest-bearing Accounts 403,190 434,449 326,066
Time Deposits   202,987     210,515     160,936  
Total Deposits 779,971 813,965 596,627
Borrowings 52,000 30,000 36,771
Subordinated Debentures 10,310 10,310 10,310
Other Liabilities   13,501     13,860     11,792  
TOTAL LIABILITIES   855,782     868,135     655,500  
STOCKHOLDER’S EQUITY
Preferred Stock 17,103 17,082 17,021
Common Stock 5,123 5,134 3,134
Surplus 42,086 41,994 23,711
Retained Earnings 22,509 21,305 19,951
Accumulated Other Comprehensive Income (Loss) (1,249 ) (1,291 ) 2,533
Treasury Stock   (464 )   (464 )   (464 )
TOTAL STOCKHOLDERS’ EQUITY   85,108     83,760     65,885  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 940,890   $ 951,895   $ 721,385  
END OF PERIOD SHARES OUTSTANDING 5,096,447 5,107,131 3,107,102
TANGIBLE BOOK VALUE PER SHARE $ 10.73 $ 10.43 $ 11.96
 
 
THE FIRST BANCSHARES, INC.
(unaudited, dollars in thousands except per share data)
Consolidated Statements of Income
     

Three Months
Ended

   

Twelve Months
Ended

Dec 31,
2013

   

Dec 31,
2012

Dec 31,
2013

   

Dec 31,
2012

INTEREST INCOME
Interest and Fees on Loans $ 6,971 $ 5,401 $ 25,736 $ 21,412
Interest and Dividends on Securities 1,430 1,187 5,502 4,868
Interest on Fed Funds Sold   10   9   80   51
TOTAL INTEREST INCOME 8,411 6,597 31,318 26,331
INTEREST EXPENSE
Interest on Deposits 476 627 2,300 3,067
Interest on Borrowings   169   200   617   1,070
TOTAL INTEREST EXPENSE   645   827   2,917   4,137
NET INTEREST INCOME 7,766 5,770 28,401 22,194
Provision for Loan Losses   59   484   1,079   1,228

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

7,707 5,286 27,322 20,966
 
NON-INTEREST INCOME 1,671 1,821 7,083 6,324
NON-INTEREST EXPENSE   7,308   5,791   28,162   22,164
Income before Income Taxes 2,070 1,316 6,243 5,126
Income Taxes   572   148   1,604   1,078
NET INCOME 1,498 1,168 4,639 4,048
Preferred Stock Accretion & Dividends   106   106   424   424

NET INCOME AVAILABLE TO COMMON STOCKHOLDERS

$ 1,392 $ 1,062 $ 4,215 $ 3,624
BASIC EARNINGS PER SHARE $ 0.27 $ 0.34 $ 0.98 $ 1.17
DILUTED EARNINGS PER SHARE $ 0.27 $ 0.34 $ 0.96 $ 1.16
WEIGHTED AVG SHARES OUTSTANDING 5,102,644 3,108,573 4,319,485 3,101,411
DILUTED WEIGHTED AVG SHS OUTSTANDING 5,156,089 3,132,429 4,372,930 3,125,267
 
 
THE FIRST BANCSHARES, INC.
(unaudited, dollars in thousands except per share data)
         

Three Months
Ended

Twelve Months
Ended

Dec 31,
2013

   

Dec 31,
2012

Dec 31,
2013

   

Dec 31,
2012

EARNINGS PERFORMANCE RATIOS
Annualized Return on Average Assets 0.59 % 0.58 % 0.45 % 0.51 %
Annualized Return on Average Assets(1) 0.60 % 0.58 % 0.52 % 0.51 %
Annualized Return on Average Equity 6.73 % 6.47 % 4.95 % 5.77 %
Annualized Return on Average Equity(1) 6.84 % 6.47 % 5.73 % 5.77 %
Net Interest Margin 3.76 % 3.73 % 3.44 % 3.63 %
Efficiency Ratio(2) 75.18 % 73.72 % 76.98 % 74.96 %
Efficiency Ratio(1)(2) 74.87 % 73.72 % 73.88 % 74.96 %

Net Overhead Expense to Average Earning Assets(3)

2.63 % 2.45 % 2.46 % 2.47 %

Net Overhead Expense to Average Earning Assets(1)(3)

2.62 % 2.45 % 2.34 % 2.47 %
 
ASSET QUALITY RATIOS
Annualized Net Charge-offs to Average Loans 0.00 % 0.16 % 0.01 % 0.26 %
Allowance for Loan Losses to Period End Loans 0.98 % 1.14 %
Non-performing Assets to Period End Assets 1.09 % 1.73 %
Non-performing Loans to Period End Loans 0.57 % 0.91 %
Loans 30-89 Days Past Due to Period End Loans 0.95 % 1.12 %
 

SELECTED BALANCE SHEET & OTHER FINANCIAL DATA

Average Assets $ 937,584 $ 729,524 $ 941,742 $ 714,953
Average Earning Assets $ 857,034 $ 647,904 $ 857,405 $ 640,898
Average Total Loans $ 575,310 $ 405,008 $ 583,200 $ 388,097
Average Demand Deposits $ 121,835 $ 75,398 $ 116,289 $ 73,584
Average Interest Bearing Liabilities $ 720,668 $ 579,326 $ 728,322 $ 572,351
Average Equity $ 82,727 $ 65,629 $ 85,081 $ 62,778
 
Period End Non-performing Assets $ 10,300 $ 12,479
Period End Non-performing Loans $ 3,340 $ 3,747
Period End Loans 30-89 Days Past Due $ 5,553 $ 4,644
 
Tax Equivalent Net Interest Income $ 8,050 $ 6,034 $ 29,502 $ 23,245
Net Charge-offs during Period $ 0 $ 157 $ 75 $ 1,012
 
 

(1) Excludes merger related costs and one-time items

(2) Efficiency Ratio is defined as Non-interest Expense divided by the sum of Net Interest Income, on a tax equivalent basis, and Non-Interest Income

(3) Net Overhead Expense is defined as Total Non-interest Expense less Total Non-interest income

 

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

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