The First Bancshares, Inc. (NASDAQ: FBMS), holding company for The First, A National Banking Association, (www.thefirstbank.com) reported today a 56.6% increase ($1.5 million) in operating net earnings (net income available to common shareholders adjusted for merger related costs) for the second quarter of 2017 compared to the second quarter of 2016. Operating net earnings available to common shareholders totaled $4.0 million for second quarter 2017 as compared to $2.6 million for second quarter 2016. Operating net earnings available to common shareholders excludes tax affected merger related expenses of $1.6 million in the second quarter of 2017.

Fully diluted earnings per share for the second quarter of 2017 were $0.26 as compared to $0.47 for the second quarter of 2016. Fully diluted earnings per share for the second quarter of 2017 includes one-time merger related charges of $0.18 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:

  • Operating net earnings (net income available to common shareholders adjusted for merger related costs) for the second quarter were $4.0 million compared to $3.4 million for the first quarter of 2017, an 18.6% increase.
  • System integration for both acquisitions, which closed in the first quarter, was completed.
  • Total loans increased 4.2% or $48 million during the quarter.
  • The Company’s common stock was included in the Russell 2000 Index for the first time.
  • Acquisitions added loans of $239.6 million and deposits of $355.7 million (loan and deposit figures are net of credit and rate marks) during the first quarter of 2017.

M. Ray “Hoppy” Cole, President & Chief Executive Officer, commented, “We are pleased with the performance of the company during the second quarter. The two acquisitions closed in the first quarter have been fully integrated and core operating results are beginning to reflect significantly improved performance as a result of those acquisitions. We are also pleased with our organic growth across our entire footprint exhibited by $48 million of net loan growth for the quarter. I commend our team members on an outstanding quarter especially given the complexities and challenge of integrating two acquisitions at once.”

Balance Sheet

Total assets increased $6.4 million or 0.4% to $1.789 billion for the quarter ended June 30, 2017.

Total loans were $1.187 billion at June 30, 2017 as compared to $1.140 billion at March 31, 2017 and as compared to $824.1 million at June 30, 2016 representing increases of $47.9 million, or 4.2% for the quarter ended June 30, 2017 and $363.9 million, or 44.2% as compared to second quarter 2016. Increased loan volume of $47.9 million for the second quarter was distributed between commercial and all real estate categories. The acquisitions accounted for $239.6 million of the total increase in loans as compared to the same quarter in 2016.

Total deposits decreased $17.7 million or 1.1% for the quarter ended June 30, 2017. $10.1 million of the decrease was in the certificate of deposit portfolio of which a majority of this decrease was in the certificate of deposit portfolios that were acquired.

Asset Quality

Nonperforming assets totaled $13.2 million at June 30, 2017, a decrease of $0.1 million compared to $13.3 million at March 31, 2017 and an increase of $2.1 million compared to June 30, 2016. The majority of the increase is the result of acquired assets with associated fair value marks. The ALLL/total loans ratio was 0.68% at June 30, 2017 and 0.69% at March 31, 2017. Including valuation accounting adjustments on acquired loans, the total valuation plus ALLL was 1.18% of loans at June 30, 2017. The ratio of annualized net charge-offs (recoveries) to total loans was (0.003)% for the quarter ended June 30, 2017 compared to (0.09)% for the quarter ended March 31, 2017.

Second Quarter 2017 vs. Second Quarter 2016 Earnings Comparison

Operating net earnings for the second quarter totaled $4.0 million compared to $2.6 million for the second quarter of 2016, an increase of $1.5 million or 56.6%.

Second quarter 2017 net earnings available to common shareholders (including merger related costs) totaled $2.4 million compared to $2.6 million for the second quarter of 2016.

Revenues from consolidated operations increased $6.4 million in quarterly comparison. Net interest income increased $4.9 million in quarterly comparison as interest income earned on a higher volume of loans attributed to this overall increase. Noninterest income increased $0.8 million in quarterly comparison for the second quarter of 2017 as compared to the second quarter of 2016 with increases spread over service charges and interchange fee income.

Second quarter 2017 noninterest expense increased $6.1 million, or 68.9% as compared to second quarter 2016. The majority of the increase is due to higher compensation expense and one-time charges associated with the acquisitions. Salaries increased $2.4 million of which $1.7 million is the result of increased employment numbers as a result of the acquisitions. Other professional services and other noninterest expenses included $2.7 million of before-tax merger related expenses associated with the acquisitions.

Fully taxable-equivalent (“FTE”) net interest income totaled $15.1 million and $10.1 million for the second quarter of 2017 and 2016, respectively. The FTE net interest income increased $5.0 million in prior year quarterly comparison primarily due to an increase in interest earned on loans. Purchase accounting adjustments accounted for $97,000 of the difference in net interest income for the second quarter comparisons. Second quarter 2017 net interest margin of 3.84% includes 3 bps related to purchase accounting adjustments.

Investment securities totaled $382.0 million, or 21.3% of total assets at June 30, 2017, versus $258.5 million, or 21.1% of total assets at June 30, 2016. The average volume of investment securities increased $112.6 million in prior year quarterly comparison primarily the result of the acquisitions. The average tax equivalent yield on investment securities remained constant at 2.65%. The investment portfolio had a net unrealized gain of $3.6 million at June 30, 2017 as compared to $4.5 million at June 30, 2016.

The average yield on all earnings assets increased 20 basis points in prior year quarterly comparison, from 4.05% for the second quarter of 2016 to 4.25% for the second quarter of 2017. This increase was offset partially by an increase in average interest expense of 6 basis points from 0.45% for the second quarter of 2016 to 0.51% for the second quarter of 2017.

Second Quarter 2017 vs First Quarter 2017 Earnings Comparison

Operating net earnings for the second quarter totaled $4.0 million compared to $3.4 million for the first quarter of 2017, an increase of $0.6 million or 18.6%.

In sequential-quarter comparison, net earnings available to common shareholders increased $1.2 million to $2.4 million which included after-tax one-time acquisition charges of $1.6 million.

FTE net interest income increased $0.6 million to $15.1 million from $14.5 million in sequential-quarter comparison. The increase was due primarily to increased loan volume. Interest income from purchase accounting adjustments increased $21,000 in quarterly comparison.

The average yield on all earnings assets decreased 2 basis points in sequential-quarter comparison, from 4.27% for the first quarter of 2017 to 4.25% for the second quarter of 2017.

Noninterest income increased $0.4 million in sequential-quarter comparison consisting of increases in service charges, interchange fee income and mortgage income.

Noninterest expense decreased $1.0 million in sequential-quarter comparison which includes decreases in other professional services and other non-interest expense. Merger related costs were $2.7 million and included in other professional services and other noninterest expenses as compared to $3.6 million for the first quarter of 2017.

Year to Date Earnings Comparison

Operating net earnings for the first half of 2017 totaled $7.4 million compared to $4.9 million for the first half of 2016, an increase of$2.5 million or 51.2%.

In year-over-year comparison, net earnings available to common shareholders decreased $1.5 million, or 31.4%, from $5.1 million at June 30, 2016 to $3.5 million at June 30, 2017 which included one-time merger related charges of $6.3 million. Net interest income increased $9.5 million in year-over-year comparison as interest income earned on a higher volume of loans attributed to this overall increase.

Noninterest income increased $1.7 million in year-over-year comparison mainly consisting of increases in mortgage income of $0.3 million, service charges of $0.5 million and interchange fee income of $0.5 million.

Noninterest expenses increased $13.8 million in year-over-year comparison consisting of increases in salaries and benefits of $5.2 million of which $4.0 million relates to the acquisitions as well as $6.3 million in one-time merger related charges.

Other Events

The Company will make a presentation at the KBW 2017 Community Bank Investor Conference at The New York Hilton in New York, New York, Tuesday, August 1, 2017 at 2:30 p.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 August 24, 2017 to shareholders of record as of the close of business on August 4, 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
6/30/17

    

Quarter
Ended
3/31/17

    

Quarter
Ended
12/31/16

    

Quarter
Ended
9/30/16

    

Quarter
Ended
6/30/16

Total Interest Income $ 16,464 $ 15,753 $ 11,868 $ 11,269 $ 10,871
Total Interest Expense   1,629     1,585     1,176     1,202     1,016  
Net Interest Income   14,835     14,168     10,692     10,067     9,855  
FTE net interest income   15,140     14,470     10,935     10,306     10,099  
Provision for loan losses 248 46 88 143 204
Non-interest income 3,757 3,391 2,705 3,099 2,961
Non-interest expense   15,070     16,095     10,132     9,416     8,921  
Earnings before income taxes 3,274 1,418 3,177 3,607 3,691
Income tax expense   908     296     870     1,049     1,042  
Net earnings 2,366 1,122 2,307 2,558 2,649
Dividends and accretion on preferred stock   -     -     195     86     86  
Net earnings available to common shareholders $ 2,366   $ 1,122   $ 2,112   $ 2,472   $ 2,563  
 
PER COMMON SHARE DATA
Basic earnings per share $ 0.26 $ 0.12 $ 0.39 $ 0.46 $ 0.47
Basic earnings per share, operating* 0.44 0.37 0.44 0.48 0.47
Diluted earnings per share 0.26 0.12 0.26 0.45 0.47
Diluted earnings per share, operating* 0.44 0.37 0.30 0.48 0.47
Quarterly dividends per share .0375 .0375 .0375 .0375 .0375
Book value per common share at end of period 17.80 17.39 17.19 17.60 17.15
Tangible common book value at period end 15.00 14.61 15.46 14.73 14.26
Market price at end of period 27.60 28.50 27.50 19.10 17.27
Shares outstanding at period end 9,152,657 9,144,412 8,991,397 5,428,017 5,432,014
Weighted average shares outstanding:
Basic 9,145,179 9,123,271 5,463,651 5,425,567 5,432,014
Diluted 9,206,378 9,182,711 8,500,305 5,475,785 5,490,592
 
AVERAGE BALANCE SHEET DATA
Total assets $ 1,751,092 $ 1,713,438 $ 1,275,538 $ 1,233,034 $ 1,210,707
Loans and leases 1,155,699 1,117,135 856,798 836,931 809,806
Total deposits 1,527,119 1,460,787 1,037,877 1,044,428 1,036,914
Total common equity 155,667 157,184 94,750 94,007 88,643
Total tangible common equity* 130,789 134,809 79,112 78,347 72,885
Total equity 155,667 157,184 159,786 111,130 105,766
 
SELECTED RATIOS
Annualized return on avg assets .54 % .26 % .72 % .83 % .88 %
Annualized return on avg assets, operating* .92 % .79 % .75 % .85 % .85 %
Annualized return on avg common equity, operating* 10.31 % 8.61 % 10.11 % 11.14 % 11.57 %
Annualized return on avg tangible common equity, oper* 12.27 % 10.04 % 12.10 % 13.37 % 14.07 %
Average loans to average deposits 75.68 % 76.47 % 82.55 % 80.13 % 78.10 %
Taxable-equivalent net interest margin 3.84 % 3.85 % 3.77 % 3.70 % 3.68 %
Efficiency Ratio 79.75 % 90.11 % 74.28 % 70.24 % 68.31 %
Efficiency Ratio, operating* 65.56 % 69.97 % 71.40 % 68.70 % 68.31 %
 
CREDIT QUALITY
Allowance for loan losses (ALLL) as a % of total loans .68 % .69 % .87 % .88 % .88 %
Nonperforming assets to tangible equity + ALLL 9.10 % 9.39 % 6.74 % 10.81 % 10.93 %
Nonperforming assets to total loans + ORE 1.11 % 1.16 % 1.14 % 1.31 % 1.34 %
Annualized QTD net charge-offs (recoveries) to total loans (0.09 )% (0.10 )% (0.03 %) (0.04 %) (0.03 %)
 

*See reconciliation of Non-GAAP financial measures

     
  FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

  
  BALANCE SHEET    

June 30,
2017

    

Mar 31,
2017

    

Dec 31,
2016

    

Sept 30,
2016

    

June 30,
2016

Assets
Cash and cash equivalents $ 92,596 $ 148,511 $ 62,119 $ 70,114 $ 54,777
Securities available-for-sale 366,490 352,851 243,206 236,168 242,855
Securities held-to-maturity 6,000 6,000 6,000 6,000 6,025
Other investments   9,544     7,647     6,593     9,516     9,578  
Total investment securities 382,034 366,498 255,799 251,684 258,458
Loans held for sale 5,907 5,473 5,880 9,437 8,937
Total loans 1,187,936 1,139,987 867,054 854,366 824,083
Allowance for loan losses   (8,070 )   (7,813 )   (7,510 )   (7,481 )   (7,259 )
Loans, net 1,179,866 1,132,174 859,544 846,885 816,824
Premises and equipment 44,766 45,438 34,624 33,427 33,502
Other Real Estate 8,072 7,579 6,008 4,670 4,716
Goodwill and other intangibles 25,615 25,379 15,507 15,596 15,696
Other assets   50,766     51,769     37,886     34,825     31,990  
Total assets $ 1,789,622   $ 1,783,204   $ 1,277,367   $ 1,266,638   $ 1,224,900  
 
Liabilities and Shareholders’ Equity
Non-interest bearing deposits $ 319,494 $ 323,442 $ 202,478 $ 196,786 $ 194,950
Interest-bearing deposits   1,231,305     1,245,055     836,713     875,003     837,413  
Total deposits 1,550,799 1,568,497 1,039,191 1,071,789 1,032,363
Borrowings 59,367 39,411 69,000 68,000 68,000
Subordinated debentures 10,310 10,310 10,310 10,310 10,310
Other liabilities   6,267     5,981     4,339     3,881     3,929  
Total liabilities 1,626,743 1,624,199 1,122,840 1,153,980 1,114,602
Total shareholders’ equity   162,879     159,005     154,527     112,658     110,298  
Total liabilities and shareholders’ equity $ 1,789,622   $ 1,783,204   $ 1,277,367   $ 1,266,638   $ 1,224,900  
 

     
  FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands except per share data)

  
  EARNINGS STATEMENT     Year to Date
2017     2016
Interest Income:
Loans, including fees $ 27,558 $ 18,306
Investment securities 4,326 3,063
Accretion of purchase accounting adjustments 112 42
Other interest income   221     57  
Total interest income 32,217 21,468
Interest Expense:
Deposits 2,562 1,514
Borrowings 623 342
Subordinated debentures 130 82
Accretion of purchase accounting adjustments   (101 )   -  
Total interest expense   3,214     1,938  
Net interest income 29,003 19,530
Provision for loan losses   294     394  
Net interest income after provision for loan losses 28,709 19,136
Non-interest Income:
Service charges on deposit accounts 1,790 1,241
Mortgage Income 2,124 1,829
Interchange Fee Income 1,862 1,325
Gain (loss) on securities, net (9 ) 129
Gain on sale of premises and equipment - -
BEA award, net - -
Other charges and fees   1,381     920  
Total non-interest income 7,148 5,444
Non-interest expense:
Salaries and employee benefits 15,743 10,549
Occupancy expense 2,718 2,183
FDIC premiums 532 501
Marketing 168 204
Amortization of core deposit intangibles 331 194
Other professional services 5,812 552
Other non-interest expense   5,861     3,133  
Total Non-interest expense   31,165     17,316  
Earnings before income taxes 4,692 7,264
Income tax expense   1,204     2,011  
Net earnings 3,488 5,253
Dividends and accretion on preferred stock   -     171  
Net earnings available to common shareholders $ 3,488   $ 5,082  
Non-operating items* 3,908 (189 )
Net earnings available to common shareholders, operating $ 7,396   $ 4,893  
 
Basic earnings per common share $ 0.38   $ 0.94  
Basic earnings per common share, operating* $ 0.81   $ 0.90  
Diluted earnings per common share $ 0.38   $ 0.93  
Diluted earnings per common share, operating* $ 0.80   $ 0.90  
*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     Three Months Ended
6/30/17     3/31/17     12/31/16     9/30/16     6/30/16
Interest Income:
Loans, including fees $ 14,114 $ 13,444 $ 9,922 $ 9,706 $ 9,293
Investment securities 2,197 2,129 1,472 1,446 1,531
Accretion of purchase accounting adjustments 56 56 429 92 20
Other interest income   97     124     45     25   27
Total interest income 16,464 15,753 11,868 11,269 10,871
Interest Expense:
Deposits 1,364 1,198 968 962 813
Borrowings 259 364 148 160 149
Subordinated debentures 67 63 60 80 54
Accretion of purchase accounting adjustments   (61 )   (40 )   -     -   -
Total interest expense   1,629     1,585     1,176     1,202   1,016
Net interest income 14,835 14,168 10,692 10,067 9,855
Provision for loan losses   248     46     88     143   204
Net interest income after provision for loan losses 14,587 14,122 10,604 9,924 9,651
 
Non-interest Income:
Service charges on deposit accounts 922 868 605 606 604
Mortgage Income 1,208 916 1,204 1,399 1,184
Interchange Fee Income 959 903 683 666 681
Gain (loss) on securities, net (1 ) (8 ) (3 ) - 129
Gain on sale of premises and equipment - - - - -
BEA award, net - - - - -
Other charges and fees   669     712     216     428   363
Total non-interest income 3,757 3,391 2,705 3,099 2,961
 
Non-interest expense:
Salaries and employee benefits 7,762 7,981 5,943 5,645 5,400
Occupancy expense 1,348 1,370 1,222 1,209 1,110
FDIC premiums 331 201 265 254 257
Marketing 99 69 122 76 132
Amortization of core deposit intangibles 182 149 88 100 100
Other professional services 2,802 3,010 793 461 321
Other non-interest expense   2,546     3,315     1,699     1,671   1,601
Total Non-interest expense   15,070     16,095     10,132     9,416   8,921
Earnings before income taxes 3,274 1,418 3,177 3,607 3,691
Income tax expense   908     296     870     1,049   1,042
Net earnings 2,366 1,122 2,307 2,558 2,649
Dividends and accretion on preferred stock - - 195 86 86
Net earnings available to common shareholders $ 2,366   $ 1,122   $ 2,112   $ 2,472 $ 2,563
 
Basic earnings per common share $ 0.26   $ 0.12   $ 0.39   $ 0.46 $ 0.47
Basic earnings per common share, operating* $ 0.44   $ 0.37   $ 0.44   $ 0.48 $ 0.47
Diluted earnings per common share $ 0.26   $ 0.12   $ 0.26   $ 0.45 $ 0.47
Diluted earnings per common share, operating* $ 0.44   $ 0.37   $ 0.30   $ 0.48 $ 0.47

*See reconciliation of Non-GAAP financial measures

 

     
 

FIRST BANCSHARES, INC and SUBSIDIARIES

Condensed Consolidated Financial Information (unaudited)

(in thousands)

  
  COMPOSITION OF LOANS    

June 30,
2017

    

Percent
of Total

    

Mar 31,
2017

    

Dec 31,
2016

    

Sept 30,
2016

    

June 30,
2016

    

Percent
of Total

Commercial, financial and agricultural $ 167,799 14.1 % $ 156,786 $ 129,423 $ 121,963 $ 118,924 14.3 %
Real estate – construction 169,971 14.2 % 163,249 109,394 104,644 101,439 12.2 %
Real estate – commercial 448,218 37.5 % 426,151 314,359 307,963 296,676 35.6 %
Real estate – residential 372,815 31.2 % 360,964 289,640 296,587 282,420 33.9 %
Lease Financing Receivable 2,189 0.2 % 2,196 2,204 2,211 2,642 0.3 %
Obligations of States & subdivisions 5,775 0.5 % 5,383 6,698 6,861 6,965 0.8 %
Consumer 21,169 1.8 % 25,258 15,336 14,137 15,017 1.8 %
Loans held for sale   5,907   0.5 %   5,473     5,880     9,437     8,937   1.1 %
Total loans $ 1,193,843   100 % $ 1,145,460   $ 872,934   $ 863,803   $ 833,020   100 %
 
COMPOSITION OF DEPOSITS

June 30,
2017

Percent
of Total

Mar 31,
2017

Dec 31,
2016

Sept 30,
2016

June 30,
2016

Percent
of Total

Noninterest bearing $ 319,494 20.6 % $ 323,442 $ 202,478 $ 196,786 $ 194,950 18.9 %
NOW and other 665,250 42.9 % 661,300 430,903 465,404 466,118 45.2 %
Money Market/Savings 296,705 19.1 % 304,292 182,793 187,228 174,740 16.9 %
Time Deposits of less than $250,000 203,254 13.1 % 212,352 162,797 163,739 148,049 14.3 %
Time Deposits of $250,000 or more   66,096   4.3 %   67,111     60,220     58,632     48,506   4.7 %
Total Deposits $ 1,550,799   100 % $ 1,568,497   $ 1,039,191   $ 1,071,789   $ 1,032,363   100 %
 
ASSET QUALITY DATA

June 30,
2017

Mar 31,
2017

Dec 31,
2016

Sept 30,
2016

June 30,
2016

Nonaccrual loans $ 3,979 $ 4,955 $ 3,265 $ 5,798 $ 5,742
Loans past due 90 days and over   760     345     198     420     267  
Total nonperforming loans 4,739 5,300 3,463 6,218 6,009
Other real estate 8,072 7,579 6,008 4,670 4,716
Nonaccrual securities   408     408     408     408     408  
Total nonperforming assets $ 13,219   $ 13,287   $ 9,879   $ 11,296   $ 11,133  
 
Nonperforming assets to total assets .74 % .75 % .77 % .89 % .91 %
Nonperforming assets to total loans + ORE 1.11 % 1.16 % 1.14 % 1.31 % 1.34 %
ALLL to nonperforming loans 170.29 % 147.42 % 216.86 % 120.31 % 120.80 %
ALLL to total loans .68 % .69 % .87 % .88 % .88 %
 
Quarter-to-date net charge-offs (recs) $ (9 ) $ (257 ) $ 58 $ (79 ) $ (72 )
Annualized QTD net chg/offs (recs) to loans (0.003 )% (0.09 )% 0.03 % (0.04 %) (0.03 %)
 

     
  FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
  (in thousands)  
                                                           
Yield Three Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months Ended
Analysis June 30, 2017     March 31, 2017     December 31, 2016     September 30, 2016     June 30, 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 $ 282,235 $ 1,605 2.27 % $ 244,997 $ 1,534 2.50 % $ 183,032 $ 997 2.18 % $ 177,154 $ 965 2.18 % $ 186,615 $ 1,034 2.22 %

Tax-exempt securities

  95,272       897 3.77 %   86,991       895 4.12 %   77,909       715 3.67 %   77,073       704 3.65 %   78,290       721 3.68 %

Total investment securities

377,507 2,502 2.65 % 331,988 2,429 2.93 % 260,941 1,712 2.62 % 254,227 1,669 2.63 % 264,905 1,755 2.65 %
Fed funds sold 39,048 95 0.97 % 50,700 124 0.98 % 41,545 45 0.43 % 10,356 25 0.97 % 9,902 27 1.09 %

Int bearing deposits in other banks

5,214 2 0.15 % 5,000 2 0.16 % 2,107 3 0.57 % 11,961 16 0.54 % 12,522 20 0.64 %
Loans   1,155,699       14,170 4.90 %   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 %

Total Interest earning assets

1,577,468 16,769 4.25 % 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 %
Other assets   173,624   208,640   114,147   119,559   113,572
Total assets $ 1,751,092 $ 1,713,438 $ 1,275,538 $ 1,233,034 $ 1,210,707
 

Interest-bearing liabilities:

Deposits $ 1,211,959 $ 1,303 0.43 % $ 1,149,287 $ 1,158 0.40 % $ 844,101 $ 968 0.46 % $ 850,442 $ 962 0.45 % $ 843,771 $ 813 0.39 %
Repo 5,000 48 3.84 % 5,000 48 3.84 % 5,000 48 3.84 % 5,000 49 3.92 % 5,000 48 3.84 %
Fed funds purchased 1,906 8 1.68 % 975 2 0.82 % 191 1 2.09 % 1,926 5 1.04 % 2,894 8 1.11 %
FHLB & FTN 40,765 203 1.99 % 79,581 314 1.58 % 56,272 99 0.70 % 55,337 106 0.77 % 42,962 93 0.87 %

Subordinated debentures

  10,310       67 2.60 %   10,310       63 2.44 %   10,310       60 2.33 %   10,310       80 3.10 %   10,310       54 2.10 %

Total interest bearing liabilities

1,269,940   1,629 0.51 % 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 %
Other liabilities 325,485 311,101 199,878 198,889 200,004

Shareholders’ equity

  155,667   157,184   159,786   111,130   105,766

Total liabilities and shareholders’ equity

$ 1,751,092 $ 1,713,438 $ 1,275,538 $ 1,233,034 $ 1,210,707
 

Net interest income (TE)

$ 15,140 3.74 % $ 14,470 3.76 % $ 10,935 3.66 % $ 10,306 3.61 % $ 10,099 3.60 %
 
Net interest margin 3.84 % 3.85 % 3.77 % 3.70 % 3.68 %
 

Core net interest margin*

3.81 % 3.82 % 3.66 % 3.66 % 3.67 %
 

     
  FIRST BANCSHARES, INC and SUBSIDIARIES

Reconcilement of Non-GAAP Financial Measures (unaudited)

(in thousands except per share data)

  
 

 

       

Three Months Ended

Per Common Share Data

June 30,
2017

    

Mar 31,
2017

    

Dec 31,
2016

    

Sept 30,
2016

    

June 30,
2016

Book value per common share $ 17.80 $ 17.39 $ 17.19 $ 17.60 $ 17.15
Effect of intangible assets per share 2.80 2.78 1.73 2.87 2.98

Tangible book value per common share

$ 15.00 $ 14.61 $ 15.46 $ 14.73 $ 14.26
 
Diluted earnings per share $ 0.26 $ 0.12 $ 0.26 $ 0.45 $ 0.47
Effect of gain on debit card conversion, after-tax - - - - -
Effect of gain on sale of bank premises, after-tax - - - - -
Effect of BAE, after-tax - - - - -
Effect of acquisition charges, after-tax 0.18 0.25 0.04 0.03 -
Diluted earnings per share, operating $ 0.44 $ 0.37 $ 0.30 $ 0.48 $ 0.47
 
 
 
 
Three Months Ended
Average Balance Sheet Data

June 30,
2017

Mar 31,
2017

Dec 31,
2016

Sept 30,
2016

June 30,
2016

Total average assets

A

$1,751,092 $1,713,438 $1,275,538 $1,233,034 $1,210,707
 
Total equity $ 155,667 $ 157,184 $ 159,786 $ 111,130 $ 105,766
Less preferred equity - - 65,036 17,123 17,123

Total common equity

B

155,667 157,184 94,750 94,007 88,643
Less intangible assets 24,878 22,375 15,638 15,660 15,758

Tangible common equity

C

$ 130,789 $ 134,809 $ 79,112 $ 78,347 $ 72,885
 
 
 
 
Three Months Ended
Core Net Interest Margin

June 30,
2017

Mar 31,
2017

Dec 31,
2016

Sept 30,
2016

June 30,
2016

Net interest income (TE) $ 15,140 $ 14,470 $ 10,935 $ 10,306 $ 10,099
Less purchase accounting adjustments 117 96 429 92 20

Net interest income, net of purchase accounting adj

D

$ 15,023 $ 14,374 $ 10,506 $ 10,214 $ 10,079
 
Total average earning assets $1,577,468 $1,504,798 $1,161,391 $1,113,475 $1,097,135
Add average balance of loan valuation discount 1,721 2,159 1,358 1,484 1,504

Avg earning assets, excluding loan valuation discount

E

$1,579,189 $1,506,957 $1,162,749 $1,114,959 $1,098,639
 

Core net interest margin

D/E

3.81% 3.82% 3.61% 3.66% 3.67%
 
 
 
 
Three Months Ended
Return Ratios

June 30,
2017

Mar 31,
2017

Dec 31,
2016

Sept 30,
2016

June 30,
2016

Net earnings

F

$ 2,366 $ 1,122 $ 2,307 $ 2,558 $ 2,649
Dividends and accretion on preferred stock - - 195 86 86
Net earnings available to common shareholders 2,366 1,122 2,112 2,472 2,563
Gain on debit card conversion, after-tax - - - - -
Gain on sale of premises and equipment, after-tax - - - - -
BAE, after-tax - - - - -
Acquisition charges, after-tax 1,647 2,261 282 146 -

Net earnings available to common shareholders, oper

G

$ 4,013 $ 3,383 $ 2,394 $ 2,618 $ 2,563
 

Annualized return on avg assets

F/A

.54% .26% .72% .83% .88%

Annualized return on avg assets, oper

G/A

.92% .79% .75% .85% .85%

Annualized return on avg common equity, oper

G/B

10.31% 8.61% 10.11% 11.14% 11.57%

Annualized return on avg tangible common equity, oper

G/C

12.13% 10.04% 12.10% 13.37% 14.07%
 
Mortgage Department
Net Interest Income after provision for loan losses $ 233 $ 253 $ 48 $ 24 $ 59
Loan fee income 1,208 916 1,204 1,399 1,184
Other non-interest income - - 1 1 3
Salaries and employee benefits 946 806 783 805 724
Other non-interest expense 99 114 144 124 110
Earnings before income taxes $ 396 $ 249 $ 326 $ 495 $ 412
 

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.