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The First Bancshares, Inc. Reports a 72.8% Increase in Net Income Available to Common Shareholders in Quarterly Comparison; Increases Quarterly Dividend 25%


The First Bancshares, Inc. (“FBMS” or “the Company”) (NASDAQ: FBMS), holding company for The First, A National Banking Association, (www.thefirstbank.com) reported today net income available to


The First Bancshares, Inc. (“FBMS” or “the Company”) (NASDAQ: FBMS), holding company for The First, A National Banking Association, (www.thefirstbank.com) reported today net income available to common shareholders for the quarter and fiscal year ended December 31, 2019 and an increase in the quarterly dividend.

Quarterly Earnings

Net income available to common shareholders totaled $11.9 million for the quarter ended December 31, 2019, an increase of $5.0 million, or 72.8%, compared to $6.9 million for the quarter ended December 31, 2018, and a decrease of $0.4 million, compared to the third quarter of 2019.

Operating net earnings increased 44.0%, or $4.0 million, for the quarter ended December 31, 2019, totaling $13.2 million as compared to $9.1 million for the fourth quarter of 2018, and increased $0.3 million, or 2.6%, as compared to $12.8 million for the third quarter of 2019. Operating net earnings for the fourth quarter of 2019 excludes merger-related costs of $1.8 million, net of tax and income in the form of financial assistance grant from the U. S. Department of Treasury of $0.5 million, net of tax. Operating net earnings for the fourth quarter of 2018 excludes merger-related costs of $3.2 million, net of tax, income in the form of financial assistance grant from the U. S. Department of Treasury of $0.7 million, net of tax, and income from the sale of securities of $0.3 million, net of tax. Operating net earnings for the third quarter of 2019 excludes merger-related costs of $0.6 million, net of tax.

Yearly Earnings

Net income available to common shareholders totaled $43.7 million for the fiscal year ended December 31, 2019, an increase of $22.5 million, or 106.1%, compared to $21.2 million for the fiscal year ended December 31, 2018.

Operating net earnings increased 59.9%, or $18.0 million for the fiscal year ended December 31, 2019, totaling $48.0 million as compared to $30.0 million for the fiscal year ended December 31, 2018. Operating net earnings for fiscal year 2019 excludes merger-related costs of $4.9 million, net of tax, and income in the form of financial assistance grant from the U. S. Department of Treasury of $0.7 million, net of tax. Operating net earnings for fiscal year 2018 excludes merger-related costs of $10.6 million, net of tax, income in the form of financial assistance grant from the U. S. Department of Treasury of $1.6 million, net of tax, and income from the sale of securities of $0.3 million, net of tax.

Earnings Per Share

For the fourth quarter of 2019, fully diluted earnings per share were $0.64, compared to $0.48 for the fourth quarter of 2018 and $0.71 for the third quarter of 2019.

Excluding the impact of the merger-related costs and income described above, fully diluted operating earnings per share for the fourth quarter of 2019 were $0.72 as compared to $0.64 for the fourth quarter of 2018, and $0.74 for the third quarter of 2019.

For the full year 2019, fully diluted earnings per share were $2.55, compared to $1.62 for the full year 2018, an increase of 57.4%.

Excluding the impact of the merger-related costs and other income items described above, fully diluted operating earnings per share for the year ended December 31, 2019 were $2.79 as compared to $2.29 for 2018, an increase of 21.8%.

Fully diluted earnings per share for 2019 include the issuance of 2,377,501 shares of our common stock during the first quarter of 2019 in association with the acquisition of FPB Financial Corp (“FPB”) and the issuance of 1,682,889 shares of our common stock during the fourth quarter of 2019 in association with the acquisition of First Florida Bancorp, Inc. (“FFB”). Fully diluted earnings per share for 2019 include the purchase by the Company of 143,566 shares of our common stock during the second quarter of 2019, 13,873 shares of our common stock during the third quarter of 2019 and 10,749 shares of our common stock during the fourth quarter of 2019 related to the Company’s share repurchase program.

Fully diluted earnings per share for 2018 include the issuance of 1,134,010 shares issued in connection with the acquisition of Southwest Bancshares, Inc. (“Southwest”) during the first quarter of 2018, 726,461 shares issued in connection with the acquisition of Sunshine Financial, Inc. (“Sunshine”) during the second quarter of 2018 and 1,763,036 shares issued in connection with the acquisition of FMB Banking Corporation (“FMB”) during the fourth quarter of 2018.

Highlights for the Quarter:

  • On November 1, 2019, the Company closed its acquisition of First Florida Bancorp, Inc. (“FFB”), parent company of First Florida Bank, headquartered in Destin, FL. which added 7 locations servicing the areas of Destin, Fort Walton, Crestview and Panama City, Florida, and completed systems integration during the quarter.
  • On December 18, 2019, the Company announced the signing of an Agreement and Plan of Merger with Southwest Georgia Financial Corporation (“SGB”), parent company of Southwest Georgia Bank, headquartered in Moultrie, GA. Upon completion, the acquisition will add 8 full service offices servicing the areas of Moultrie, Valdosta, Albany and Tifton, Georgia. The closing of the transaction is expected to occur in the second quarter of 2020 and is subject to customary closing conditions, including regulatory approvals and approval by the shareholders of SGB.
  • Operating net earnings increased 59.9% to $48.0 million for the fiscal year ended December 31, 2019 as compared to fiscal year ended December 31, 2018.
  • Operating net earnings increased 44.0% to $13.2 million for the quarter ended December 31, 2019 as compared to the fourth quarter of 2018.

M. Ray “Hoppy” Cole, President and Chief Executive Officer, commented, “Our team continues to execute on our strategic vision of creating a regional community bank that provides outstanding service to our clients and superior returns to our shareholders. The results of 2019 reflect that continued execution with 31.2% growth in total assets and a 21.8% increase in fully diluted operating earnings per share year over year. We are excited about the growth and profitability of our Company and look forward to the opportunities for continued growth that lie ahead.”

Balance Sheet

Consolidated assets increased $459.9 million to $3.942 billion at December 31, 2019 from $3.482 billion at September 30, 2019. The acquisition of FFB accounted for $401.6 million of the increase.

Total average loans were $2.513 billion for the quarter ended December 31, 2019, as compared to $2.343 billion for the quarter ended September 30, 2019, and $1.959 billion for the quarter ended December 31, 2018, representing an increase of $169.1 million, or 7.2%, for the sequential quarter comparison, and an increase of $553.3 million, or 28.2%, in prior year quarterly comparison. The acquisitions of FPB and FFB, accounted for $388.7 million, net of fair value marks, of the total increase in average loans as compared to the fourth quarter of 2018. Excluding the acquired loans, average loans increased $4.9 million for the sequential quarter comparison. Excluding the acquired loans, average loans increased $164.7 million, or 8.4% as compared to the quarter ended December 31, 2018.

Total average deposits were $2.963 billion for the quarter ended December 31, 2019, as compared to $2.766 billion for the quarter ended September 30, 2019, and $2.297 billion for the quarter ended December 31, 2018, representing an increase of $197.8 million, or 7.2%, for the sequential quarter comparison, and an increase of $666.6 million, or 29.0%, in prior year quarterly comparison. The acquisitions of FPB and FFB, accounted for $534.4 million of the total increase in average deposits as compared to the fourth quarter of 2018. Excluding the acquired deposits, average deposits decreased $40.8 million for the sequential quarter comparison. Excluding the acquired deposits, average deposits increased $132.2 million, or 5.8% as compared to the quarter ended December 31, 2018.

Asset Quality

Nonperforming assets totaled $48.4 million at December 31, 2019, an increase of $1.1 million compared to $47.3 million at September 30, 2019 and an increase of $11.0 million compared to $37.4 million at December 31, 2018. Nonaccrual loans and loans past due 90 days and over still accruing increased $14.8 million while other real estate decreased $3.6 million when comparing year end December 31, 2019 to year end December 31, 2018. Nonaccrual loans and loans past due 90 days and over still accruing increased $3.8 million while other real estate decreased $2.7 million for the linked quarter. The ratio of the allowance for loan and leases losses (ALLL) to total loans was 0.53% at December 31, 2019, 0.56% at September 30, 2019 and 0.49% at December 31, 2018. The ratio of annualized net charge-offs (recoveries) to total loans was (0.002%) for the quarter ended December 31, 2019 compared to 0.004% for the quarter ended September 30, 2019 and 0.02% for the quarter ended December 31, 2018.

Fourth Quarter 2019 vs. Fourth Quarter 2018 Earnings Comparison

Net income available to common shareholders for the fourth quarter of 2019 totaled $11.9 million compared to $6.9 million for the fourth quarter of 2018, an increase of $5.0 million or 72.8%.

Operating net earnings for the fourth quarter of 2019 totaled $13.2 million compared to $9.1 million for the fourth quarter of 2018, an increase of $4.0 million or 44.0%. The calculation of operating net earnings excludes the merger-related costs and the income for each quarter as discussed above.

Net interest income for the fourth quarter of 2019 was $33.4 million, an increase of $8.2 million when compared to the fourth quarter of 2018. The increase was due to interest income earned on a higher volume of loans. Fully tax equivalent (“FTE”) net interest income totaled $33.8 million and $25.5 million for the fourth quarter of 2019 and 2018, respectively. FTE net interest income increased $8.3 million in the prior year quarterly comparison due to increased loan volume. Purchase accounting adjustments accounted for $0.6 million of the difference in net interest income for the fourth quarter comparisons. Fourth quarter 2019 FTE net interest margin of 4.06% included 26 basis points related to purchase accounting adjustments compared to 4.08% for the same quarter in 2018, which included 24 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin decreased 4 basis points in prior year quarterly comparison.

Non-interest income increased $1.2 million for the fourth quarter of 2019 as compared to the fourth quarter of 2018 due to increased service charges and interchange fee income of $0.8 million, which increase is primarily attributable to the increase in our deposit base due to the acquisitions. Mortgage income increased $0.8 million in prior year quarterly comparison.

Fourth quarter 2019 non-interest expense was $25.0 million, an increase of $2.7 million, or 12.2% as compared to the fourth quarter of 2018. Excluding the decrease in acquisition charges of $1.9 million for the fourth quarter of 2019, non-interest expense increased $4.6 million in the fourth quarter of 2019, of which $3.1 million was attributable to the operations of FPB and FFB, as compared to fourth quarter of 2018.

Investment securities totaled $791.8 million, or 20.1% of total assets at December 31, 2019, versus $514.9 million, or 17.1% of total assets at December 31, 2018. The average balance of investment securities increased $260.8 million in prior year quarterly comparison, primarily as a result of the acquisitions. The average tax equivalent yield on investment securities decreased 9 basis points to 3.06% from 3.15% in prior year quarterly comparison. The investment portfolio had a net unrealized gain of $13.5 million at December 31, 2019 as compared to a net unrealized loss of $2.5 million at December 31, 2018.

The FTE average yield on all earning assets decreased 3 basis points in prior year quarterly comparison, from 4.93% for the fourth quarter of 2018 to 4.90% for the fourth quarter of 2019. Average interest expense increased 2 basis points from 1.09% for the fourth quarter of 2018 to 1.11% for the fourth quarter of 2019. Cost of all deposits averaged 73 basis points for the fourth quarter of 2019 compared to 68 basis points for the fourth quarter of 2018.

Fourth Quarter 2019 vs Third Quarter 2019 Earnings Comparison

Net income available to common shareholders for the fourth quarter of 2019 decreased $0.4 million to $11.9 million compared to $12.3 million for the third quarter of 2019. For the fourth quarter of 2019, fully diluted earnings per share were $0.64, compared to $0.71 for the third quarter of 2019.

Operating net earnings for the fourth quarter of 2019 compared to the third quarter of 2019 increased $0.4 million or 2.6% from $12.8 million to $13.2 million. Operating net earnings excludes the merger-related costs and the income discussed above. Fully diluted operating earnings per share for the fourth quarter of 2019 were $0.72 as compared to $0.74 for the third quarter of 2019.

Net interest income for the fourth quarter of 2019 was $33.4 million as compared to $30.5 million for the third quarter of 2019, an increase of $3.0 million. FTE net interest income increased $3.1 million to $33.8 million from $30.7 million in sequential-quarter comparison. Fourth quarter 2019 FTE net interest margin of 4.06% included 26 basis points related to purchase accounting adjustments compared to 4.05% for the third quarter in 2019, which included 19 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin decreased 6 basis points in sequential quarter comparison.

Investment securities totaled $791.8 million, or 20.1% of total assets at December 31, 2019, versus $640.8 million, or 18.4% of total assets at September 30, 2019. The average balance of investment securities increased $122.8 million in sequential-quarter comparison, primarily as a result of the acquisition of FFB. The average tax equivalent yield on investment securities decreased 18 basis points to 3.06% from 3.24% in sequential-quarter comparison. The investment portfolio had a net unrealized gain of $13.5 million at December 31, 2019 as compared to a net unrealized gain of $13.9 million at September 30, 2019.

The FTE average yield on all earning assets decreased in sequential-quarter comparison from 4.94% to 4.90%. Average interest expense decreased 6 basis points from 1.17% for the third quarter of 2019 to 1.11% for the fourth quarter of 2019. Cost of all deposits averaged 73 basis points for the fourth quarter of 2019 compared to 76 basis points for the third quarter of 2019.

Non-interest income increased $0.5 million in sequential-quarter comparison resulting from increased service charges on deposit accounts as well as income in the form of financial assistance grant from the U. S. Department of Treasury in the amount of $0.7 million offset partially by decreases in interchange fee income and other charges and fees.

Non-interest expense for the fourth quarter of 2019 was $25.0 million compared to $20.8 million for the third quarter of 2019. Excluding acquisition charges for each quarter, non-interest expense increased $2.5 million in sequential-quarter comparison, of which $1.3 million is attributable to the operations associated with FFB which was acquired in the fourth quarter.

Year-to-Date Earnings Comparison

In year-over-year comparison, net income available to common shareholders increased $22.5 million, or 106.1%, from $21.2 million for the twelve months ended December 31, 2018 to $43.7 million for the same period ended December 31, 2019. Operating net earnings increased $18.0 million or 59.9% from $30.0 million for the twelve months ended December 31, 2018 to $48.0 million for the same period ended December 31, 2019. Operating net earnings excludes merger-related costs of $4.9 million, net of tax, and financial assistance grants of $0.7 million, net of tax, for the year ended December 31, 2019, and merger-related costs of $10.6 million, net of tax, financial assistance grants of $1.6 million, net of tax, and gain on sale of securities of $0.3 million, net of tax, for the year ended December 31, 2018.

Net interest income increased $36.9 million in year-over-year comparison, primarily due to interest income earned on a higher volume of loans and securities.

Non-interest income was $26.9 million at December 31, 2019, an increase of $6.4 million in year-over-year comparison consisting of increases in service charges on deposit accounts, interchange fee income, mortgage income, as well as other charges and fees.

Non-interest expense was $88.6 million at December 31, 2019, an increase of $12.3 million in year-over-year comparison, of which $4.3 million is related to the operations of Southwest, Sunshine, FMB, FPB and FFB. The remaining increase of $8.0 million in expenses are related to increases in salaries and employee benefits of $3.7 million and increases in other expenses of $4.3 million.

Declaration of Cash Dividend

The Company announced that its Board of Directors declared a cash dividend of $0.10 per share to be paid on its common stock on February 21, 2020 to shareholders of record as of the close of business on February 7, 2020.

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, Florida and Georgia. The Company’s stock is traded on the NASDAQ Global Market under the symbol FBMS. Information is available on the Company’s website: www.thefirstbank.com.

Non-GAAP Financial Measures

Our accounting and reporting policies conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, certain non-GAAP measures are used by management to supplement the evaluation of our performance. This press release includes operating net earnings, operating earnings per share, fully tax equivalent net interest income, total tangible common equity, tangible book value per common share and certain ratios derived from these non-GAAP financial measures. The Company believes that the non-GAAP financial measures included in this press release allow management and investors to understand and compare results in a more consistent manner for the periods presented in this press release. Non-GAAP financial measures should be considered supplemental and not a substitute for the Company’s results reported in accordance with GAAP for the periods presented, and other bank holding companies may define or calculate these measures differently. These non-GAAP financial measures should not be considered in isolation and do not purport to be an alternative to net income, earnings per share, net interest income, book value or other GAAP financial measures as a measure of operating performance. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure is provided in this press release following the Condensed Consolidated Financial Information (unaudited).

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; interest rate risk; legislation or regulatory changes which adversely affect the ability of the consolidated Company to conduct business combinations or new operations; and risks related to the proposed acquisition of SGB and the acquisitions of Southwest, Sunshine, FMB, FPB and FFB, including the risk that the proposed acquisition of SGB does not close when expected or at all because conditions to closing are not satisfied on a timely basis or at all, the terms of the proposed transactions with SGB need to be modified to satisfy such conditions, and that the anticipated benefits from the transactions with Southwest, Sunshine, FMB, FPB, FFB and SGB are not realized in the time frame anticipated or at all as a result of changes in general economic and market conditions or other unexpected factors or events. These and other factors that could cause results to differ materially from those described in the forward-looking statements, as well as a discussion of the risks and uncertainties that may affect our business, can be found in our Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission, which are available on the SEC’s website, http://www.sec.gov. 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.

 

FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited
)
(in thousands except per share data)

EARNINGS DATA

Quarter
Ended
12/31/19

Quarter
Ended
9/30/19

Quarter
Ended
6/30/19

Quarter
Ended
3/31/19

Quarter
Ended
12/31/18

Total Interest Income

$ 40,444

$ 37,241

$ 37,571

$ 33,273

$ 30,555

Total Interest Expense

7,000

6,782

6,799

6,142

5,285

Net Interest Income

33,444

30,459

30,772

27,131

25,270

FTE net interest income*

33,847

30,739

31,040

27,388

25,524

Provision for loan losses

850

974

791

1,123

574

Non-interest income

7,574

7,103

6,716

5,554

6,396

Non-interest expense

24,960

20,825

20,891

21,893

22,249

Earnings before income taxes

15,208

15,763

15,806

9,669

8,843

Income tax expense

3,353

3,491

3,823

2,034

1,982

Net income available to common shareholders

$ 11,855

$ 12,272

$ 11,983

$ 7,635

$ 6,861

 

 

 

 

 

 

 

 

 

 

 

 

PER COMMON SHARE DATA

 

 

 

 

 

Basic earnings per share

$ 0.65

$ 0.72

$ 0.70

$ 0.49

$ 0.48

Diluted earnings per share

0.64

0.71

0.69

0.48

0.48

Diluted earnings per share, operating*

0.72

0.74

0.70

0.63

0.64

Quarterly dividends per share

.08

.08

.08

.07

.05

Book value per common share at end of period

28.91

27.92

27.22

26.30

24.49

Tangible book value per common share at period end*

18.87

19.39

18.72

17.79

16.88

Market price at end of period

35.52

32.30

30.34

30.90

30.91

Shares outstanding at period end

18,802,266

17,123,625

17,129,915

17,272,731

14,830,598

Weighted average shares outstanding:

 

 

 

 

 

Basic

18,241,244

17,131,080

17,182,049

15,646,476

14,247,555

Diluted

18,398,609

17,267,953

17,311,626

15,770,622

14,371,562

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCE SHEET DATA

 

 

 

 

 

Total assets

$3,767,587

$3,439,202

$3,460,394

$3,181,761

$2,812,212

Loans and leases

2,512,524

2,343,392

2,337,583

2,167,495

1,959,179

Total deposits

2,963,603

2,765,816

2,862,653

2,599,842

2,296,966

Total common equity

518,070

470,024

454,965

390,217

328,250

Total tangible common equity*

346,742

324,619

308,303

262,553

222,402

 

 

 

 

 

 

 

 

 

 

 

 

SELECTED RATIOS

 

 

 

 

 

Annualized return on avg assets

1.26%

1.43%

1.39%

0.96%

0.98%

Annualized return on avg assets, operating*

1.40%

1.49%

1.39%

1.25%

1.30%

Annualized return on avg common equity, operating*

10.16%

10.91%

10.60%

10.18%

11.14%

Annualized return on avg tangible common equity, oper*

15.18%

15.80%

15.64%

15.13%

16.44%

Average loans to average deposits

84.78%

84.73%

81.66%

83.37%

85.29%

FTE Net Interest Margin*

4.06%

4.05%

4.07%

3.89%

4.08%

Efficiency Ratio

60.26%

55.03%

55.33%

66.46%

69.69%

Efficiency Ratio, operating*

55.67%

53.17%

55.09%

57.21%

59.06%

 

 

 

 

 

 

 

 

 

 

 

 

CREDIT QUALITY

 

 

 

 

 

Allowance for loan losses (ALLL) as a % of total loans

0.53%

0.56%

0.51%

0.48%

0.49%

Nonperforming assets to tangible equity + ALLL

13.13%

13.71%

11.42%

12.32%

14.37%

Nonperforming assets to total loans + OREO

1.86%

2.00%

1.61%

1.67%

1.81%

Annualized QTD net charge-offs (recoveries) to total loans

(0.002%)

0.004%

(0.01%)

(0.008%)

0.02%

 

 

 

 

 

 

*See reconciliation of Non-GAAP financial measures

 

FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)

BALANCE SHEET

Dec 31,
2019

Sept 30,
2019

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Assets

 

 

 

 

 

Cash and cash equivalents

$ 168,864

$ 159,990

$ 165,984

$ 248,576

$ 159,107

Securities available-for-sale

765,087

612,002

598,607

598,796

492,701

Securities held-to-maturity

-

6,328

6,396

6,397

6,000

Other investments

26,690

22,517

17,819

15,298

16.227

Total investment securities

791,777

640,847

622,822

620,491

514,928

Loans held for sale

10,810

11,104

8,597

6,238

4,838

Total loans

2,600,358

2,349,986

2,351,998

2,335,348

2,060,422

Allowance for loan losses

(13,908)

(13,043)

(12,091)

(11,235)

(10,065)

Loans, net

2,586,450

2,336,943

2,339,907

2,324,113

2,050,357

Premises and equipment

104,980

96,726

97,115

94,624

74,783

Other Real Estate Owned

7,299

9,974

11,205

11,588

10,869

Goodwill and other intangibles

188,865

146,091

145,649

147,150

112,916

Other assets

82,818

80,256

81,305

80,199

76,188

Total assets

$3,941,863

$3,481,931

$3,472,584

$3,532,979

$3,003,986

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Non-interest bearing deposits

$ 723,208

$ 642,054

$ 645,838

$ 655,900

$ 570,148

Interest-bearing deposits

2,353,325

2,119,181

2,185,362

2,258,418

1,887,311

Total deposits

3,076,533

2,761,345

2,831,200

2,914,318

2,457,459

Borrowings

214,319

136,250

71,250

61,750

85,500

Subordinated debentures

80,678

80,639

80,600

80,561

80,521

Other liabilities

26,675

25,609

23,253

22,003

17,252

Total liabilities

3,398,205

3,003,843

3,006,303

3,078,632

2,640,732

Total shareholders’ equity

543,658

478,088

466,281

454,347

363,254

Total liabilities and shareholders’ equity

$3,941,863

$3,481,931

$3,472,584

$3,532,979

$3,003,986

 
 

FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)

EARNINGS STATEMENT

Three Months Ended

12/31/19

9/30/19

6/30/19

3/31/19

12/31/18

Interest Income:

 

 

 

 

 

Loans, including fees

$ 33,556

$ 31,279

$ 30,912

$ 27,569

$ 25,184

Investment securities

5,298

4,752

5,017

4,339

3,785

Accretion of purchase accounting adjustments

1,553

1,201

1,552

1,235

1,532

Other interest income

37

9

90

130

54

Total interest income

40,444

37,241

37,571

33,273

30,555

Interest Expense:

 

 

 

 

 

Deposits

5,489

5,156

5,377

4,275

3,506

Borrowings

771

451

288

546

482

Subordinated debentures

1,213

1,270

1,188

1,233

1,179

Accretion of purchase accounting adjustments

(473)

(95)

(54)

88

118

Total interest expense

7,000

6,782

6,799

6,142

5,285

Net interest income

33,444

30,459

30,772

27,131

25,270

Provision for loan losses

850

974

791

1,123

574

Net interest income after provision for loan losses

32,594

29,485

29,981

26,008

24,696

 

 

 

 

 

 

Non-interest Income:

 

 

 

 

 

Service charges on deposit accounts

2,110

1,979

1,918

1,831

1,887

Mortgage Income

1,720

1,800

1,559

909

969

Interchange Fee Income

2,075

2,252

2,045

1,652

1,527

Gain (loss) on securities, net

(9)

57

36

38

334

Financial Assistance Award/Bank Enterprise Award

714

-

-

233

950

Other charges and fees

964

1,015

1,158

891

729

Total non-interest income

7,574

7,103

6,716

5,554

6,396

 

 

 

 

 

 

Non-interest expense (benefit):

 

 

 

 

 

Salaries and employee benefits

13,092

11,612

11,615

10,697

10,336

Occupancy expense

3,190

2,632

2,532

2,442

2,281

FDIC/OCC premiums

147

111

426

(52)

369

Marketing

248

62

160

175

173

Amortization of core deposit intangibles

907

796

796

716

750

Other professional services

951

1,140

980

920

452

Acquisition charges

2,300

705

91

3,179

4,155

Other non-interest expense

4,125

3,767

4,291

3,816

3,733

Total Non-interest expense

24,960

20,825

20,891

21,893

22,249

Earnings before income taxes

15,208

15,763

15,806

9,669

8,843

Income tax expense

3,353

3,491

3,823

2,034

1,982

Net income available to common shareholders

$ 11,855

$ 12,272

$ 11,983

$ 7,635

$ 6,861

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$ 0.64

$ 0.71

$ 0.69

$ 0.48

$ 0.48

Diluted earnings per common share, operating*

$ 0.72

$ 0.74

$ 0.70

$ 0.63

$ 0.64

*See reconciliation of Non-GAAP financial measures

 

 

 

 

 

 

FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)

EARNINGS STATEMENT

Year to Date

 

2019

 

2018

 

Interest Income:

 

 

 

 

 

Loans, including fees

 

$ 123,316

 

$ 84,089

 

Investment securities

 

19,406

 

12,753

 

Accretion of purchase accounting adjustments

 

5,541

 

2,733

 

Other interest income

 

266

 

403

 

Total interest income

 

148,529

 

99,978

 

Interest Expense:

 

 

 

 

 

Deposits

 

20,297

 

10,584

 

Borrowings

 

2,056

 

1,142

 

Subordinated debentures

 

4,904

 

3,156

 

Amortization of purchase accounting adjustments

 

(534)

 

209

 

Total interest expense

 

26,723

 

15,091

 

Net interest income

 

121,806

 

84,887

 

Provision for loan losses

 

3,738

 

2,120

 

Net interest income after provision for loan losses

 

118,068

 

82,767

 

 

 

 

 

 

 

Non-interest Income:

 

 

 

 

 

Service charges on deposit accounts

 

7,838

 

5,793

 

Mortgage Income

 

5,988

 

4,048

 

Interchange Fee Income

 

8,024

 

5,247

 

Gain (loss) on securities, net

 

122

 

329

 

Financial Assistance Award/Bank Enterprise Award

 

947

 

2,100

 

Other charges and fees

 

4,028

 

3,044

 

Total non-interest income

 

26,947

 

20,561

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

Salaries and employee benefits

 

47,016

 

36,893

 

Occupancy expense

 

10,796

 

8,125

 

FDIC/OCC premiums

 

632

 

1,382

 

Marketing

 

645

 

382

 

Amortization of core deposit intangibles

 

3,215

 

1,657

 

Other professional services

 

3,956

 

1,926

 

Acquisition charges

 

6,275

 

13,810

 

Other non-interest expense

 

16,034

 

12,136

 

Total Non-interest expense

 

88,569

 

76,311

 

Earnings before income taxes

 

56,446

 

27,017

 

Income tax expense

 

12,701

 

5,792

 

Net income available to common shareholders

 

$ 43,745

 

$ 21,225

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

 

$ 2.55

 

$ 1.62

 

Diluted earnings per common share, operating*

 

$ 2.79

 

$ 2.29

 

*See reconciliation of Non-GAAP financial measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)

COMPOSITION OF LOANS

Dec 31,
2019

Percent
of Total

Sept 30,
2019

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Percent
of Total

Commercial, financial and agricultural

$ 332,600

12.7%

$ 338,584

$ 342,535

$ 340,333

$ 301,182

14.6%

Real estate – construction

359,195

13.8%

284,103

352,826

348,788

298,718

14.5%

Real estate – commercial

1,028,012

39.4%

943,218

881,831

857,918

776,880

37.6%

Real estate – residential

814,282

31.2%

724,860

713,350

722,611

617,804

29.9%

Lease Financing Receivable

3,095

0.1%

3,239

3,616

3,060

2,891

0.1%

Obligations of States & subdivisions

20,716

0.8%

16,545

17,192

13,734

16,941

0.8%

Consumer

42,458

1.6%

39,437

40,648

48,904

46,006

2.2%

Loans held for sale

10,810

0.4%

11,104

8,597

6,238

4,838

0.3%

Total loans

$2,611,168

100%

$2,361,090

$2,360,595

$2,341,586

$2,065,260

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPOSITION OF DEPOSITS

Dec 31,
2019

Percent
of Total

Sept 30,
2019

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Percent
of Total

Noninterest bearing

$723,208

23.5%

$642,054

$645,838

$655,900

$570,148

23.2%

NOW and other

941,598

30.6%

926,704

999,881

1,062,112

835,434

34.0%

Money Market/Savings

750,010

24.4%

651,539

645,611

647,783

566,276

23.0%

Time Deposits of less than $250,000

479,386

15.6%

401,549

408,164

414,281

384,030

15.6%

Time Deposits of $250,000 or more

182,331

5.9%

139,489

131,706

134,242

101,571

4.2%

Total Deposits

$3,076,533

100%

$2,761,345

$2,831,200

$2,914,318

$2,457,459

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSET QUALITY DATA

Dec 31,
2019

 

Sept 30,
2019

June 30,
2019

Mar 31,
2019

Dec 31,
2018

 

Nonaccrual loans

$ 38,393

 

$ 35,175

$ 25,608

$ 26,502

$ 25,073

 

Loans past due 90 days and over

2,715

 

2,116

989

943

1,265

 

Total nonperforming loans

41,108

 

37,291

26,597

27,445

26,338

 

Other real estate owned

7,299

 

9,974

11,205

11,588

10,869

 

Nonaccrual securities

-

 

52

208

208

208

 

Total nonperforming assets

$ 48,407

 

$47,317

$38,010

$39,241

$ 37,415

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

1.23%

 

1.36%

1.09%

1.11%

1.25%

 

Nonperforming assets to total loans + OREO

1.86%

 

2.00%

1.61%

1.67%

1.81%

 

ALLL to nonperforming loans

33.83%

 

34.98%

45.46%

40.94%

38.21%

 

ALLL to total loans

0.53%

 

0.56%

0.51%

0.48%

0.49%

 

 

 

 

 

 

 

 

 

Quarter-to-date net charge-offs (recs)

$ (15)

 

$ 23

$ (65)

$ (47)

$ 93

 

Annualized QTD net chg-offs (recs) to loans

(0.002%)

 

0.004%

(0.01%)

(0.008%)

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 December 31, 2019   September 30, 2019   June 30, 2019   March 31, 2019   December 31, 2018
  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

$ 556,004

 

$ 4,108

 

2.96%

 

$ 494,184

 

$ 3,926

 

3.18%

 

$ 497,988

 

$ 4,227

 

3.40%

 

$ 435,576

 

$ 3,581

 

3.29%

 

$ 369,820

 

$ 2,808

 

3.04%

Tax-exempt securities

188,709

 

1,593

 

3.38%

 

127,750

 

1,108

 

3.47%

 

124,367

 

1,058

 

3.40%

 

117,831

 

1,015

 

3.45%

 

114,055

 

1,003

 

3.52%

Total investment securities

744,713

 

5,701

 

3.06%

 

621,934

 

5,034

 

3.24%

 

622,355

 

5,285

 

3.40%

 

553,407

 

4,596

 

3.32%

 

483,875

 

3,811

 

3.15%

FFS & Int bearing dep in other banks

80,612

 

37

 

0.18%

 

71,165

 

7

 

0.04%

 

89,936

 

90

 

0.40%

 

94,778

 

130

 

0.55%

 

57,655

 

282

 

1.96%

Loans

2,512,524

 

35,109

 

5.59%

 

2,343,392

 

32,480

 

5.54%

 

2,337,583

 

32,464

 

5.56%

 

2,167,495

 

28,804

 

5.32%

 

1,959,179

 

26,716

 

5.45%

Total Interest earning assets

3,337,849

 

40,847

 

4.90%

 

3,036,491

 

37,521

 

4.94%

 

3,049,874

 

37,839

 

4.96%

 

2,815,680

 

33,530

 

4.76%

 

2,500,709

 

30,809

 

4.93%

Other assets

429,738

 

 

 

 

 

402,711

 

 

 

 

 

410,520

 

 

 

 

 

366,081

 

 

 

 

 

311,503

 

 

 

 

Total assets

$ 3,767,587

 

 

 

 

 

$ 3,439,202

 

 

 

 

 

$ 3,460,394

 

 

 

 

 

$ 3,181,761

 

 

 

 

 

$ 2,812,212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

$ 2,263,299

 

$ 5,016

 

0.89%

 

$ 2,140,419

 

$ 5,061

 

0.95%

 

$ 2,231,462

 

$ 5,323

 

0.95%

 

$ 2,024,718

 

$ 4,363

 

0.86%

 

$ 1,776,780

 

$ 3,615

 

0.81%

Repo

-

 

-

 

0.00%

 

-

 

-

 

0.00%

 

-

 

-

 

0.00%

 

-

 

-

 

0.00%

 

-

 

-

 

0.00%

Fed funds purchased

5,334

 

30

 

2.25%

 

6,708

 

11

 

0.66%

 

5,450

 

30

 

2.20%

 

150

 

5

 

13.33%

 

1,455

 

18

 

4.95%

FHLB & FTN

169,141

 

741

 

1.75%

 

88,533

 

440

 

1.99%

 

32,310

 

258

 

3.19%

 

86,119

 

541

 

2.51%

 

92,352

 

465

 

2.01%

Subordinated debentures

80,658

 

1,213

 

6.02%

 

80,619

 

1,270

 

6.30%

 

80,579

 

1,188

 

5.90%

 

80,540

 

1,233

 

6.12%

 

75,391

 

1,187

 

6.30%

Total interest bearing liabilities

2,518,432

 

7,000

 

1.11%

 

2,316,279

 

6,782

 

1.17%

 

2,349,801

 

6,799

 

1.16%

 

2,191,527

 

6,142

 

1.12%

 

1,945,978

 

5,285

 

1.09%

Other liabilities

731,085

 

 

 

 

 

652,899

 

 

 

 

 

655,628

 

 

 

 

 

600,017

 

 

 

 

 

537,984

 

 

 

 

Shareholders' equity

518,070

 

 

 

 

 

470,024

 

 

 

 

 

454,965

 

 

 

 

 

390,217

 

 

 

 

 

328,250

 

 

 

 

Total liabilities and shareholders' equity

$ 3,767,587

 

 

 

 

 

$ 3,439,202

 

 

 

 

 

$ 3,460,394

 

 

 

 

 

$ 3,181,761

 

 

 

 

 

$ 2,812,212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income (FTE)*

 

 

$ 33,847

 

3.78%

 

 

 

$ 30,739

 

3.77%

 

 

 

$ 31,040

 

3.81%

 

 

 

$ 27,388

 

3.64%

 

 

 

$ 25,524

 

3.84%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (FTE)*  

 

 

4.06%

 

 

 

 

 

4.05%

 

 

 

 

 

4.07%

 

 

 

 

 

3.89%

 

 

 

 

 

4.08%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core net interest margin*

 

 

 

 

3.80%

 

 

 

 

 

3.86%

 

 

 

 

 

3.84%

 

 

 

 

 

3.71%

 

 

 

 

 

3.84%

                             
*See reconciliation for Non-GAAP financial measures                        
 
 

FIRST BANCSHARES, INC and SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (unaudited)
(in thousands except per share data)

Three Months Ended

 

Per Common Share Data

 

Dec 31,
2019

Sept 30,
2019

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Book value per common share

 

$ 28.91

$ 27.92

$ 27.22

$ 26.30

$ 24.49

Effect of intangible assets per share

 

10.04

8.53

8.50

8.51

7.61

Tangible book value per common share

 

$ 18.87

$ 19.39

$ 18.72

$ 17.79

$ 16.88

 

 

 

 

 

 

 

Diluted earnings per share

 

$ 0.64

$ 0.71

$ 0.69

$ 0.48

$ 0.48

Effect of acquisition charges

 

0.14

0.04

0.01

0.21

0.29

Tax on acquisition charges

 

(0.03)

(0.01)

-

(0.05)

(0.07)

Effect of gain on sale of securities

 

-

-

-

-

(0.02)

Tax on gain on sale

 

-

-

-

-

.01

Effect of Treasury awards

 

(0.04)

-

-

(0.01)

(0.07)

Tax on Treasury awards

 

0.01

-

-

-

0.02

Diluted earnings per share, operating

 

$ 0.72

$ 0.74

$ 0.70

$ 0.63

$ 0.64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year to Date

 

 

2019

 

2018

 

Diluted earnings per share

 

$ 2.55

 

$ 1.62

 

Effect of acquisition charges

 

 

0.37

 

1.05

 

Tax on acquisition charges

 

 

(0.08)

 

(0.24)

 

Effect of gain on sale of securities

 

 

-

 

(0.03)

 

Tax on gain on sale

 

 

-

 

0.01

 

Effect of Treasury awards

 

 

(0.06)

 

(0.16)

 

Tax on Treasury awards

 

 

0.01

 

0.04

 

Diluted earnings per share, operating

 

 

$ 2.79

 

$ 2.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year to Date

 

 

2019

 

2018

 

Net income available to common shareholders

 

$ 43,745

 

$ 21,225

 

Acquisition charges

 

 

6,275

 

13,810

 

Tax on acquisition charges

 

 

(1,348)

 

(3,221)

 

Gain on sale of securities

 

 

-

 

(342)

 

Tax on gain on sale

 

 

-

 

86

 

Treasury awards

 

 

(947)

 

(2,100)

 

Tax on Treasury awards

 

 

240

 

532

 

Net earnings available to common shareholders, operating

 

 

$ 47,965

 

$ 29,990

 

 

 

 

 

 

Three Months Ended

Average Balance Sheet Data

 

Dec 31,
2019

Sept 30,
2019

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Total average assets

A

$3,767,587

$3,439,202

$3,460,394

$3,181,761

$2,812,212

Total average earning assets

B

3,337,849

$3,036,492

$3,049,874

$2,815,680

$2,500,709

 

 

 

`

 

 

 

Common Equity

C

$ 518,070

$ 470,024

$ 454,965

$ 390,217

$ 328,250

Less intangible assets

 

171,328

145,405

146,662

127,664

105,848

Tangible common equity

D

$ 346,742

$ 324,619

$ 308,303

$ 262,553

$ 222,402

 

 

 

 

 

Three Months Ended

Net Interest Income Fully Tax Equivalent

 

Dec 31,
2019

Sept 30,
2019

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Net interest income

E

$ 33,444

$ 30,459

$ 30,772

$ 27,131

$ 25,270

Tax-exempt investment income

 

(1,190)

(828)

(790)

(758)

(749)

Taxable investment income

 

1,593

1,108

1,058

1,015

1,003

Net Interest Income Fully Tax Equivalent

F

$ 33,847

$ 30,739

$ 31,040

$ 27,388

$ 25,524

 

 

 

 

 

 

 

Annualized Net Interest Margin

E/B

4.01%

4.01%

4.04%

3.85%

4.04%

Annualized Net Interest Margin, Fully Tax Equivalent

F/B

4.06%

4.05%

4.07%

3.89%

4.08%

 

 

 

 

 

 

 

 

 

Three Months Ended

Core Net Interest Margin

 

Dec 31,
2019

Sept 30,
2019

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Net interest income (FTE)

 

$ 33,847

$ 30,739

$ 31,040

$ 27,388

$ 25,524

Less purchase accounting adjustments

 

2,026

1,296

1,607

1,147

1,414

Net interest income, net of purchase accounting adj

G

$ 31,821

$ 29,443

$ 29,433

$ 26,241

$ 24,110

 

 

 

 

 

 

 

Total average earning assets

 

$3,337,849

$3,036,492

$3,049,874

$2,815,680

$2,500,709

Add average balance of loan valuation discount

 

12,252

13,679

15,265

13,869

12.803

Avg earning assets, excluding loan valuation discount

H

$3,350,101

$3,050,171

$3,065,139

$2,829,549

$2,513,511

 

 

 

 

 

 

 

Core net interest margin

G/H

3.80%

3.86%

3.84%

3.71%

3.84%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Efficiency Ratio

 

Dec 31,
2019

Sept 30,
2019

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Operating Expense

 

 

 

 

 

 

Total non-interest expense

 

$ 24,960

$ 20,825

$ 20,891

$ 21,893

$ 22,245

Pre-tax non-operating expenses

 

(2,300)

(705)

(91)

(3,179)

(4,155)

Adjusted Operating Expense

I

$ 22,660

$ 20,120

$ 20,800

$ 18,714

$ 18,090

 

 

 

 

 

 

 

Operating Revenue

 

 

 

 

 

 

Net interest income, FTE

 

$ 33,847

$ 30,739

$ 31,040

$ 27,388

$ 25,524

Total non-interest income

 

7,574

7,103

6,716

5,554

6,396

Pre-tax non-operating items

 

(714)

-

-

(233)

(1,292)

Adjusted Operating Revenue

J

$ 40,707

$ 37,842

$ 37,756

$ 32,709

$ 30,628

 

 

 

 

 

 

 

Efficiency Ratio, operating

I/J

55.67%

53.17%

55.09%

57.21%

59.06%

 

 

 

 

 

 

 

 

 

Three Months Ended

Return Ratios

 

Dec 31,
2019

Sept 30,
2019

June 30,
2019

Mar 31,
2019

Dec 31,
2018

Net income available to common shareholders

K

$ 11,855

$ 12,272

$ 11,983

$ 7,635

$ 6,861

Acquisition charges

 

2,300

705

91

3,179

4,155

Tax on acquisition charges

 

(461)

(152)

(23)

(712)

(910)

Gain on sale

 

-

-

-

-

(342)

Tax on gain on sale

 

-

-

-

-

86

Treasury awards

 

(714)

-

-

(233)

(950)

Tax on Treasury awards

 

181

-

-

59

242

Net earnings available to common shareholders, oper

L

$ 13,161

$ 12,825

$ 12,051

$ 9,928

$ 9,142

 

 

 

 

 

 

 

Annualized return on avg assets

K/A

1.26%

1.43%

1.39%

0.96%

0.98%

Annualized return on avg assets, oper

L/A

1.40%

1.49%

1.39%

1.25%

1.30%

Annualized return on avg common equity, oper

L/C

10.16%

10.91%

10.60%

10.18%

11.14%

Annualized return on avg tangible common equity, oper

L/D

15.18%

15.80%

15.64%

15.13%

16.44%

 

 

 

 

 

 

 

Mortgage Department

 

 

 

 

 

 

Net Interest Income after provision for loan losses

 

$ 59

$ 200

$ 194

$ 176

$ 267

Loan fee income

 

1,720

1,800

1,559

909

969

Salaries and employee benefits

 

975

986

941

823

774

Other non-interest expense

 

164

134

140

154

124

Earnings before income taxes

 

$ 640

$ 880

$ 672

$ 108

$ 338

   

 

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