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 of $12.3 million for the quarter
ended September 30, 2019, an increase of $7.1 million, or 137.7%,
compared to $5.2 million for the quarter ended September 30, 2018,
and an increase of $0.3 million, or 2.4%, compared to the second
quarter of 2019. Operating net earnings increased 59.9%, or $4.8
million, for the quarter ended September 30, 2019, totaling $12.8
million as compared to $8.0 million for the third quarter of 2018,
and increased $0.8 million, or 6.4%, as compared to $12.1 million
for the second quarter of 2019. Operating net earnings for the
third quarter of 2019 excludes merger-related costs of $0.6
million, net of tax. Operating net earnings for the third quarter
of 2018 excludes merger-related costs of $3.0 million, net of tax,
and income in the form of financial assistance grant from the U. S.
Department of Treasury of $0.2 million, net of tax. Operating net
earnings for the second quarter of 2019 excludes merger-related
costs of $0.1 million, net of tax.
For the third quarter of 2019, fully diluted earnings per share
were $0.71, compared to $0.39 for the third quarter of 2018 and
$0.69 for the second quarter of 2019. Excluding the impact of the
merger-related costs and income described above, fully diluted
operating earnings per share for the third quarter of 2019 were
$0.74 as compared to $0.61 for the third quarter of 2018, and $0.70
for the second quarter of 2019. Fully diluted earnings per share
for the third quarter of 2019 include the purchase of 13,873 shares
related to the Company’s $20 million share repurchase program.
Fully diluted earnings per share for second quarter of 2019 include
the purchase of 143,566 shares related to the Company’s $20 million
share repurchase program.
Highlights for the Quarter:
- On July 22, 2019, the Company announced the signing of an
Agreement and Plan of Merger with First Florida Bancorp, Inc.
(“FFB”), parent company of First Florida Bank, headquartered in
Destin, FL. Upon completion, the acquisition will add 7 locations
servicing the areas of Destin, Fort Walton, Crestview and Panama
City, Florida. The closing of the transaction is expected to occur
on October 31, 2019 subject to customary closing conditions.
- In connection with the acquisition of FFB, both regulatory and
FFB shareholder approval have been obtained.
- Net interest margin for the linked quarter improved 2 bps when
excluding the impact of purchase accounting adjustments.
- Operating net earnings increased 59.9% to $12.8 million for the
quarter ended September 30, 2019 as compared to the third quarter
of 2018.
M. Ray “Hoppy” Cole, President and Chief Executive Officer,
commented, “We are pleased with the continued improvement in the
earnings of our Company. The substantial increase in operating
earnings year over year and on a linked quarter basis are
reflective of our teams focus on the successful integration of
multiple acquisitions over the last year. During the quarter we
announced our upcoming merger with First Florida Bancorp. First
Florida is a high performing, well run bank headquartered in
Destin. Our partnership is a perfect strategic fit adding
additional market share in Florida and opening up new markets for
us in Destin, Panama City and the surrounding areas.
Balance Sheet
Consolidated assets increased $9.4 million to $3.482 billion at
September 30, 2019 from $3.473 billion at June 30, 2019 primarily
related to an increase in investment securities offset by an
increase in borrowings due to the seasonality of the public fund
portfolio.
Total average loans were $2.343 billion at September 30, 2019,
as compared to $2.338 billion at June 30, 2019, and $1.721 billion
at September 30, 2018, representing an increase of $5.8 million, or
0.25%, for the sequential quarter comparison, and an increase of
$622.5 million, or 36.2%, as compared to September 30, 2018. The
acquisitions of FMB Banking Corporation (“FMB”) and FPB Financial
Corp (“FPB”), accounted for $530.2 million, net of fair value
marks, of the total increase in average loans as compared to the
third quarter of 2018.
Total average deposits were $2.766 billion at September 30,
2019, as compared to $2.863 billion at June 30, 2019, and $2.070
billion at September 30, 2018, representing a decrease of $96.8
million, or 3.4%, for the sequential quarter comparison, and an
increase of $695.9 million, or 33.6%, as compared to September 30,
2018. The acquisitions of FMB and FPB accounted for $719.6 million
of the total increase in average deposits as compared to September
30, 2018. The decrease in average deposits of $96.8 million during
the third quarter of 2019 was largely due to decreases in public
fund deposits of $73.1 million, which is attributable to the
seasonality of public funds.
Asset Quality
Nonperforming assets totaled $47.3 million at September 30,
2019, an increase of $9.3 million compared to $38.0 million at June
30, 2019 and an increase of $23.9 million compared to $23.4 million
at September 30, 2018. Nonaccrual loans and loans past due 90 days
and over still accruing increased $10.7 million while other real
estate decreased $1.2 million for the linked quarter. The majority
of the increase in the year-over-year comparison was related to
acquired loans. The ratio of the allowance for loan and leases
losses (ALLL) to total loans was 0.56% at September 30, 2019, 0.51%
at June 30, 2019 and 0.56% at September 30, 2018. The ratio of
annualized net charge-offs (recoveries) to total loans was 0.004%
for the quarter ended September 30, 2019 compared to (0.01%) for
the quarter ended June 30, 2019 and 0.03% for the quarter ended
September 30, 2018.
Third Quarter 2019 vs. Third Quarter 2018 Earnings
Comparison
Net income available to common shareholders for the third
quarter of 2019 totaled $12.3 million compared to $5.2 million for
the third quarter of 2018, an increase of $7.1 million or
137.7%.
Operating net earnings for the third quarter of 2019 totaled
$12.8 million compared to $8.0 million for the third quarter of
2018, an increase of $4.8 million or 59.9%. The calculation of
operating net earnings excludes the merger-related costs for each
quarter and the income for the third quarter of 2018 as discussed
above.
Net interest income for the third quarter of 2019 was $30.5
million, an increase of $8.8 million when compared to the third
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 $30.7 million and $21.9 million for the third
quarter of 2019 and 2018, respectively. FTE net interest income
increased $8.8 million in the prior year quarterly comparison due
to increased loan volume. Purchase accounting adjustments accounted
for $0.8 million of the difference in net interest income for the
third quarter comparisons. Third quarter 2019 FTE net interest
margin of 4.05% included 19 basis points related to purchase
accounting adjustments compared to 3.97% for the same quarter in
2018, which included 11 basis points related to purchase accounting
adjustments. Excluding the purchase accounting adjustments, the
core net interest margin remained unchanged at 3.86% in prior year
quarterly comparison.
Non-interest income increased $2.0 million for the third quarter
of 2019 as compared to the third quarter of 2018 due to increased
service charges and interchange fee income of $1.5 million
primarily based on the increased deposit base due to the
acquisitions. Mortgage income increased $0.7 million in prior year
quarterly comparison. Non-interest income for the third quarter of
2018 included the Financial Assistance Award of $0.2 million from
the U.S. Department of the Treasury as a result of our designation
as a Community Development Financial Institution.
Third quarter 2019 non-interest expense was $20.8 million, an
increase of $1.0 million, or 5.3% as compared to the third quarter
of 2018. Excluding the decrease in acquisition charges of $3.4
million for the third quarter of 2019, non-interest expense
increased $4.4 million in the third quarter of 2019, of which $3.4
million was attributable to the operations of FMB and FPB, as
compared to third quarter of 2018.
Investment securities totaled $640.8 million, or 18.4% of total
assets at September 30, 2019, versus $444.0 million, or 17.7% of
total assets at September 30, 2018. The average balance of
investment securities increased $174.1 million in prior year
quarterly comparison, primarily as a result of the acquisitions.
The average tax equivalent yield on investment securities increased
22 basis points to 3.24% from 3.02% in prior year quarterly
comparison. The investment portfolio had a net unrealized gain of
$13.9 million at September 30, 2019 as compared to a net unrealized
loss of $8.4 million at September 30, 2018.
The FTE average yield on all earning assets increased 26 basis
points in prior year quarterly comparison, from 4.68% for the third
quarter of 2018 to 4.94% for the third quarter of 2019. Average
interest expense increased 25 basis points from 0.92% for the third
quarter of 2018 to 1.17% for the third quarter of 2019 due
primarily to increased interest-bearing deposit accounts. Cost of
all deposits averaged 76 basis points for the third quarter of 2019
compared to 53 basis points for the third quarter of 2018.
Third Quarter 2019 vs Second Quarter 2019 Earnings
Comparison
Net income available to common shareholders for the third
quarter of 2019 increased $0.3 million, or 2.4% to $12.3 million
compared to $12.0 million for the second quarter of 2019. For the
third quarter of 2019, fully diluted earnings per share were $0.71,
compared to $0.69 for the second quarter of 2019.
Operating net earnings for the third quarter of 2019 compared to
the second quarter of 2019 increased $0.8 million or 6.4% from
$12.1 million to $12.8 million. Operating net earnings exclude the
merger-related costs for the third and second quarters of 2019 as
discussed above. Excluding the impact of the merger-related costs
described above, fully diluted operating earnings per share for the
third quarter of 2019 were $0.74 as compared to $0.70 for the
second quarter of 2019.
Net interest income for the third quarter of 2019 was $30.5
million as compared to $30.8 million for the second quarter of
2019, a decrease of $0.3 million. FTE net interest income decreased
$0.3 million to $30.7 million from $31.0 million in
sequential-quarter comparison. Both comparison decreases were due
to the reduction in purchase accounting adjustments. Third quarter
2019 FTE net interest margin of 4.05% included 19 basis points
related to purchase accounting adjustments compared to 4.07% for
the second quarter in 2019, which included 23 basis points related
to purchase accounting adjustments. Excluding the purchase
accounting adjustments, the core net interest margin increased 2
basis points in sequential quarter comparison.
Investment securities totaled $640.8 million, or 18.4% of total
assets at September 30, 2019, versus $622.8 million, or 17.9% of
total assets at June 30, 2019. The average balance of investment
securities remained unchanged in sequential-quarter comparison. The
average tax equivalent yield on investment securities decreased 16
basis points to 3.24% from 3.40% in sequential-quarter comparison.
The investment portfolio had a net unrealized gain of $13.9 million
at September 30, 2019 as compared to a net unrealized gain of $12.6
million at June 30, 2019.
The FTE average yield on all earning assets decreased in
sequential-quarter comparison from 4.96% to 4.94%. Average interest
expense increased 1 basis point from 1.16% for the second quarter
of 2019 to 1.17% for the third quarter of 2019. Cost of all
deposits averaged 76 basis points for the third quarter of 2019
compared to 77 basis points for the second quarter of 2019.
Non-interest income increased $0.4 million in sequential-quarter
comparison resulting from increased mortgage income and interchange
fee income.
Non-interest expense for the third quarter of 2019 was $20.8
million compared to $20.9 million for the second quarter of 2019.
Excluding acquisition charges for each quarter, non-interest
expense decreased $0.7 million in sequential-quarter comparison, of
which $0.4 million is attributable to the savings in operational
costs associated to FPB which was acquired in the first
quarter.
Year-to-Date Earnings Comparison
In year-over-year comparison, net income available to common
shareholders increased $17.5 million, or 122.0%, from $14.4 million
for the nine months ended September 30, 2018 to $31.9 million for
the same period ended September 30, 2019. Operating net earnings
increased $14.0 million or 66.9% from $20.8 million for the nine
months ended September 30, 2018 to $34.8 million for the same
period ended September 30, 2019. Operating net earnings excludes
merger-related costs of $3.1 million, net of tax, and financial
assistance grants of $0.2 million, net of tax, for the year-to-date
period ended September 30, 2019, and merger-related costs of $7.3
million, net of tax, and financial assistance grants of $0.9
million, net of tax, for the year-to-date period ended September
30, 2018.
Net interest income increased $28.7 million in year-over-year
comparison, primarily due to interest income earned on a higher
volume of loans.
Non-interest income was $19.4 million at September 30, 2019, an
increase of $5.2 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 $63.6 million at September 30, 2019, an
increase of $9.5 million in year-over-year comparison of which $3.5
million is related to the acquisition and operations of Southwest,
Sunshine, FMB and FPB. The remaining increase of $6.0 million in
expenses for the legacy bank are related to salaries and employee
benefits of $2.5 million and other expenses of $3.5 million.
Declaration of Cash Dividend
The Company announced that its Board of Directors declared a
cash dividend of $0.08 per share to be paid on its common stock on
November 22, 2019 to shareholders of record as of the close of
business on November 8, 2019.
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 FFB and the acquisitions of Southwest,
Sunshine, FMB and FPB, including the risk that the proposed
acquisition of FFB 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 FFB need to be
modified to satisfy such conditions, and that the anticipated
benefits from the transactions with Southwest, Sunshine, FMB, FPB
and FFB 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
9/30/19
Quarter
Ended
6/30/19
Quarter
Ended
3/31/19
Quarter
Ended
12/31/18
Quarter
Ended
9/30/18
Total Interest Income
$ 37,241
$ 37,571
$ 33,273
$ 30,555
$ 25,628
Total Interest Expense
6,782
6,799
6,142
5,285
3,959
Net Interest Income
30,459
30,772
27,131
25,270
21,669
FTE net interest income*
30,739
31,040
27,388
25,524
21,925
Provision for loan losses
974
791
1,123
574
412
Non-interest income
7,103
6,716
5,554
6,396
5,074
Non-interest expense
20,825
20,891
21,893
22,249
19,786
Earnings before income taxes
15,763
15,806
9,669
8,843
6,545
Income tax expense
3,491
3,823
2,034
1,982
1,383
Net income available to common
shareholders
$
12,272
$
11,983
$
7,635
$
6,861
$
5,162
PER COMMON SHARE DATA
Basic earnings per share
$ 0.72
$ 0.70
$ 0.49
$ 0.48
$ 0.39
Diluted earnings per share
0.71
0.69
0.48
0.48
0.39
Diluted earnings per share, operating*
0.74
0.70
0.63
0.64
0.61
Quarterly dividends per share
.08
.08
.07
.05
.05
Book value per common share at end of
period
27.92
27.22
26.30
24.49
22.09
Tangible book value per common share at
period end*
19.39
18.72
17.79
16.88
17.10
Market price at end of period
32.30
30.34
30.90
30.91
39.05
Shares outstanding at period end
17,125,035
17,129,915
17,272,731
14,830,598
13,074,516
Weighted average shares outstanding:
Basic
17,131,080
17,182,049
15,646,476
14,247,555
13,072,455
Diluted
17,267,953
17,311,626
15,770,622
14,371,562
13,192,207
AVERAGE BALANCE SHEET DATA
Total assets
$3,439,202
$3,460,394
$3,181,761
$2,812,212
$2,470,607
Loans and leases
2,343,392
2,337,583
2,167,495
1,959,179
1,720,884
Total deposits
2,765,816
2,862,653
2,599,842
2,296,966
2,069,910
Total common equity
470,024
454,965
390,217
328,250
284,839
Total tangible common equity*
324,619
308,303
262,553
222,402
219,077
SELECTED RATIOS
Annualized return on avg assets
1.43%
1.39%
0.96%
0.98%
0.84%
Annualized return on avg assets,
operating*
1.49%
1.39%
1.25%
1.30%
1.30%
Annualized return on avg common equity,
operating*
10.91%
10.60%
10.18%
11.14%
11.26%
Annualized return on avg tangible common
equity, oper*
15.80%
15.64%
15.13%
16.44%
14.64%
Average loans to average deposits
84.73%
81.66%
83.37%
85.29%
83.14%
FTE Net Interest Margin*
4.05%
4.07%
3.89%
4.08%
3.97%
Efficiency Ratio
55.03%
55.33%
66.46%
69.69%
73.28%
Efficiency Ratio, operating*
53.17%
55.09%
57.21%
59.06%
58.76%
CREDIT QUALITY
Allowance for loan losses (ALLL) as a % of
total loans
0.56%
0.51%
0.48%
0.49%
0.56%
Nonperforming assets to tangible equity +
ALLL
13.71%
11.42%
12.32%
13.17%
10.05%
Nonperforming assets to total loans +
OREO
2.00%
1.61%
1.67%
1.66%
1.33%
Annualized QTD net charge-offs
(recoveries) to total loans
0.004%
(0.01%)
(0.008%)
0.02%
0.03%
*See reconciliation of Non-GAAP financial
measures
FIRST BANCSHARES, INC and
SUBSIDIARIES
Condensed Consolidated Financial
Information (unaudited)
(in thousands)
BALANCE SHEET
Sept 30,
2019
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Assets
Cash and cash equivalents
$
159,990
$
165,984
$
248,576
$
159,107
$ 122,371
Securities
available-for-sale
612,002
598,607
598,796
492,701
424,940
Securities
held-to-maturity
6,328
6,396
6,397
6,000
6,000
Other investments
22,517
17,819
15,298
16,227
13.104
Total
investment securities
640,847
622,822
620,491
514,928
444,044
Loans held for sale
11,104
8,597
6,238
4,838
4,269
Total loans
2,349,986
2,351,998
2,335,348
2,060,422
1,748,483
Allowance for loan losses
(13,043)
(12,091)
(11,235)
(10,065)
(9,765)
Loans,
net
2,336,943
2,339,907
2,324,113
2,050,357
1,738,718
Premises and equipment
96,726
97,115
94,624
74,783
62,342
Other Real Estate Owned
9,974
11,205
11,588
10,869
8,453
Goodwill and other
intangibles
146,091
145,649
147,150
112,916
65,238
Other assets
80,256
81,305
80,199
76,188
66,355
Total
assets
$3,481,931
$3,472,584
$3,532,979
$3,003,986
$2,511,790
Liabilities and
Shareholders’ Equity
Non-interest bearing
deposits
$ 642,054
$ 645,838
$ 655,900
$ 570,148
$ 430,430
Interest-bearing deposits
2,119,291
2,185,362
2,258,418
1,887,311
1,616,016
Total
deposits
2,761,345
2,831,200
2,914,318
2,457,459
2,046,446
Borrowings
136,250
71,250
61,750
85,500
85,508
Subordinated debentures
80,639
80,600
80,561
80,521
75,117
Other liabilities
25,609
23,253
22,003
17,252
15,921
Total
liabilities
3,003,843
3,006,303
3,078,632
2,640,732
2,222,992
Total shareholders’
equity
478,088
466,281
454,347
363,254
288,798
Total
liabilities and shareholders’ equity
$3,481,931
$3,472,584
$3,532,979
$3,003,986
$2,511,790
FIRST BANCSHARES, INC and
SUBSIDIARIES
Condensed Consolidated Financial
Information (unaudited)
(in thousands except per share
data)
EARNINGS
STATEMENT
Three Months Ended
9/30/19
6/30/19
3/31/19
12/31/18
9/30/18
Interest Income:
Loans, including
fees
$ 31,279
$ 30,912
$ 27,569
$ 25,184
$ 21,824
Investment
securities
4,752
5,017
4,339
3,785
3,126
Accretion of
purchase accounting adjustments
1,201
1,552
1,235
1,532
583
Other interest
income
9
90
130
54
95
Total interest income
37,241
37,571
33,273
30,555
25,628
Interest Expense:
Deposits
5,156
5,377
4,275
3,506
2,740
Borrowings
451
288
546
482
52
Subordinated
debentures
1,270
1,188
1,233
1,179
1,125
Accretion of
purchase accounting adjustments
(95)
(54)
88
118
42
Total interest expense
6,782
6,799
6,142
5,285
3,959
Net interest
income
30,459
30,772
27,131
25,270
21,669
Provision for loan losses
974
791
1,123
574
412
Net interest income after
provision for loan losses
29,485
29,981
26,008
24,696
21,257
Non-interest Income:
Service charges on deposit
accounts
1,979
1,918
1,831
1,887
1,538
Mortgage
Income
1,800
1,559
909
969
1,066
Interchange Fee
Income
2,252
2,045
1,652
1,527
1,180
Gain (loss) on securities,
net
57
36
38
334
-
Financial Assistance
Award/Bank Enterprise
Award
-
-
233
950
233
Other charges and
fees
1,015
1,158
891
729
1,057
Total non-interest
income
7,103
6,716
5,554
6,396
5,074
Non-interest expense
(benefit):
Salaries and employee
benefits
11,612
11,615
10,697
10,336
9,266
Occupancy expense
2,632
2,532
2,442
2,281
2,163
FDIC premiums
111
426
(52)
369
278
Marketing
62
160
175
173
60
Amortization of core deposit
intangibles
796
796
716
750
349
Other professional
services
1,140
980
920
452
847
Acquisition charges
705
91
3,179
4,155
4,059
Other non-interest
expense
3,767
4,291
3,816
3,733
2,764
Total Non-interest
expense
20,825
20,891
21,893
22,249
19,786
Earnings
before income taxes
15,763
15,806
9,669
8,843
6,545
Income tax expense
3,491
3,823
2,034
1,982
1,383
Net income
available to common shareholders
$
12,272
$
11,983
$
7,635
$
6,861
$
5,162
Diluted earnings per common
share
$ 0.71
$ 0.69
$ 0.48
$ 0.48
$ 0.39
Diluted earnings per common
share, operating*
$ 0.74
$ 0.70
$ 0.63
$ 0.64
$ 0.61
*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
$ 89,760
$ 58,905
Investment
securities
14,108
8,968
Accretion of
purchase accounting adjustments
3,988
1,201
Other interest
income
229
348
Total interest income
108,085
69,422
Interest Expense:
Deposits
14,808
7,076
Borrowings
1,285
659
Subordinated
debentures
3,691
1,977
Amortization of
purchase accounting adjustments
(61)
91
Total interest expense
19,723
9,803
Net interest
income
88,362
59,619
Provision for loan losses
2,888
1,546
Net interest income after
provision for loan losses
85,474
58,073
Non-interest Income:
Service charges on deposit
accounts
5,728
3,906
Mortgage Income
4,268
3,079
Interchange Fee Income
5,949
3,720
Gain (loss) on securities,
net
131
(5)
Financial Assistance
Award/Bank Enterprise Award
233
1,150
Other charges and fees
3,064
2,314
Total non-interest income
19,373
14,164
Non-interest expense:
Salaries and employee
benefits
33,924
26,557
Occupancy expense
7,606
5,844
FDIC premiums
485
1,013
Marketing
397
210
Amortization of core deposit
intangibles
2,308
906
Other professional
services
3,040
1,474
Acquisition charges
3,975
9,655
Other non-interest
expense
11,874
8,405
Total Non-interest
expense
63,609
54,064
Earnings
before income taxes
41,238
18,173
Income tax expense
9,348
3,809
Net income
available to common shareholders
$ 31,890
$ 14,364
Diluted earnings per common
share
$ 1.90
$ 1.13
Diluted earnings per common
share, operating*
$ 2.07
$ 1.64
*See reconciliation of Non-GAAP financial
measures
FIRST BANCSHARES, INC and
SUBSIDIARIES
Condensed Consolidated Financial
Information (unaudited)
(in thousands)
COMPOSITION OF
LOANS
Sept 30,
2019
Percent
of Total
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Percent
of Total
Commercial, financial and agricultural
$ 338,584
14.3%
$ 342,535
$ 340,333
$ 301,182
$ 246,401
14.1%
Real estate – construction
284,103
12.0%
352,826
348,788
298,718
251,240
14.3%
Real estate – commercial
943,218
39.9%
881,831
857,918
776,880
654,040
37.3%
Real estate – residential
724,860
30.7%
713,350
722,611
617,804
529,515
30.2%
Lease Financing Receivable
3,239
0.1%
3,616
3,060
2,891
2,659
0.2%
Obligations of States &
subdivisions
16,545
0.7%
17,192
13,734
16,941
16,374
0.9%
Consumer
39,437
1.7%
40,648
48,904
46,006
48,254
2.8%
Loans held for sale
11,104
0.6%
8,597
6,238
4,838
4,269
0.2%
Total loans
$2,361,090
100%
$2,360,595
$2,341,586
$2,065,260
$1,752,752
100%
COMPOSITION OF
DEPOSITS
Sept 30,
2019
Percent
of Total
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Percent
of Total
Noninterest bearing
$642,054
23.3%
$645,838
$655,900
$570,148
$430,430
21.0%
NOW and other
926,704
33.5%
999,881
1,062,112
835,434
705,851
34.5%
Money Market/Savings
651,539
23.6%
645,611
647,783
566,276
503,772
24.6%
Time Deposits of less than $250,000
401,559
14.5%
408,164
414,281
384,030
321,619
15.7%
Time Deposits of $250,000 or more
139,489
5.1%
131,706
134,242
101,571
84,774
4.2%
Total Deposits
$2,761,345
100%
$2,831,200
$2,914,318
$2,457,459
$2,046,446
100%
ASSET QUALITY
DATA
Sept 30,
2019
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Nonaccrual loans
$ 35,175
$ 25,608
$ 26,502
$ 21,895
$ 13,572
Loans past due 90 days and over
2,116
989
943
1,325
805
Total nonperforming loans
37,291
26,597
27,445
23,220
14,377
Other real estate owned
9,974
11,205
11,588
10,869
8,453
Nonaccrual securities
52
208
208
208
616
Total nonperforming
assets
$
47,317
$38,010
$39,241
$34,297
$
23,446
Nonperforming assets to total assets
1.36%
1.09%
1.11%
1.14%
0.93%
Nonperforming assets to total loans +
OREO
2.00%
1.61%
1.67%
1.66%
1.33%
ALLL to nonperforming loans
34.98%
45.46%
40.94%
43.35%
67.92%
ALLL to total loans
0.56%
0.51%
0.48%
0.49%
0.56%
Quarter-to-date net charge-offs (recs)
$
23
$
(65)
$
(47)
$
93
$
151
Annualized QTD net chg-offs (recs) to
loans
0.004%
(0.01%)
(0.008%)
0.02%
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
September 30, 2019
June 30, 2019
March 31, 2019
December 31,
2018
September 30, 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
$ 494,184
$ 3,924
3.18%
$
497,988
$ 4,227
3.40%
$
435,576
$ 3,581
3.29%
$
369,820
$ 2,808
3.04%
$
331,601
$ 2,369
2.86%
Tax-exempt
securities
127,750
1,108
3.47%
124,367
1,058
3.40%
117,831
1,015
3.45%
114,055
1,003
3.52%
116,235
1,013
3.49%
Total investment
securities
621,934
5,032
3.24%
622,355
5,285
3.40%
553,407
4,596
3.32%
483,875
3,811
3.15%
447,836
3,382
3.02%
FFS & Int bearing dep
-
-
in
other banks
71,165
9
0.05%
89,936
90
0.40%
94,778
130
0.55%
57,655
282
1.96%
42,174
95
0.90%
Loans
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%
1,720,884
22,407
5.21%
Total Interest
earning assets
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%
2,210,894
25,884
4.68%
Other assets
402,711
410,520
366,081
311,503
259,713
Total assets
$
3,439,202
$ 3,460,394
$ 3,181,761
$ 2,812,212
$ 2,470,607
Interest-bearing liabilities:
Deposits
$
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%
$ 1,629,195
$ 2,782
0.68%
Repo
-
-
0.00%
-
-
0.00%
-
-
0.00%
-
-
0.00%
-
-
0.00%
Fed funds purchased
6,708
11
0.66%
5,450
30
2.20%
150
5
13.33%
1,455
18
4.95%
1,893
27
5.71%
FHLB
88,533
440
1.99%
32,310
258
3.19%
86,119
541
2.51%
92,352
465
2.01%
22,469
25
0.45%
Subordinated
debentures
80,619
1,270
6.30%
80,579
1,188
5.90%
80,540
1,233
6.12%
75,391
1,187
6.30%
75,124
1,125
5.99%
Total interest
bearing
liabilities
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%
1,728,681
3,959
0.92%
Other liabilities
652,899
655,628
600,017
537,984
457,087
Shareholders' equity
470,024
454,965
390,217
328,250
284,839
Total liabilities and
shareholders'
equity
$
3,439,202
$ 3,460,394
$ 3,181,761
$ 2,812,212
$ 2,470,607
Net interest income (FTE)*
$
30,739
3.77%
$ 31,040
3.81%
$
27,388
3.64%
$ 25,524
3.84%
$ 21,925
3.77%
Net interest margin (FTE)*
4.05%
4.07%
3.89%
4.08%
3.97%
Core net interest margin*
3.86%
3.84%
3.71%
3.84%
3.86%
*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
Sept 30,
2019
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Book value per common
share
$ 27.92
$ 27.22
$ 26.30
$ 24.49
$ 22.09
Effect of intangible assets
per share
8.53
8.50
8.51
7.61
4.99
Tangible book
value per common share
$
19.39
$
18.72
$
17.79
$
16.88
$
17.10
Diluted earnings per
share
$ 0.71
$ 0.69
$ 0.48
$ 0.48
$ 0.39
Effect of acquisition
charges
0.04
0.01
0.21
0.29
0.31
Tax on acquisition
charges
(0.01)
-
(0.05)
(0.07)
(0.08)
Effect of gain on sale of
securities
-
-
-
(0.02)
-
Tax on gain on sale
-
-
-
.01
-
Effect of Treasury awards
-
-
(0.01)
(0.07)
(0.02)
Tax on Treasury awards
-
-
-
0.02
0.01
Diluted
earnings per share, operating
$ 0.74
$ 0.70
$ 0.63
$ 0.64
$ 0.61
Year to
Date
2019
2018
Diluted earnings per share
$ 1.90
$ 1.13
Effect of acquisition charges
0.24
0.76
Tax on acquisition charges
(0.06)
(0.18)
Effect of gain on sale of
securities
-
-
Tax on gain on sale
-
-
Effect of Treasury awards
(0.01)
(0.09)
Tax on Treasury awards
-
0.02
Diluted earnings per share, operating
$ 2.07
$
1.64
Year to
Date
2019
2018
Net income available to common
shareholders
$ 31,890
$ 14,364
Acquisition charges
3,975
9,655
Tax on acquisition charges
(887)
(2,311)
Gain on sale of securities
-
-
Tax on gain on sale
-
-
Treasury awards
(233)
(1,150)
Tax on Treasury awards
59
290
Net earnings available to common shareholders, operating
$
34,804
$
20,848
Three Months Ended
Average Balance Sheet Data
Sept 30,
2019
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Total average assets
A
$3,439,202
$3,460, 394
$3,181,761
$2,812,212
$2,470,607
Total average earning assets
B
3,036,492
$3,049,874
$2,815,680
$2,500,709
$2,210,894
Common Equity C
$ 470,024
$ 454,965
$ 390,217
$ 328,250
$ 284,839
Less intangible assets
145,405
146,662
127,664
105,848
65,762
Tangible
common equity D
$ 324,619
$
308,303
$
262,553
$
222,402
$
219,077
Three Months Ended
Net Interest Income Fully Tax
Equivalent
Sept 30,
2019
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Net interest income E
$ 30,459
$ 30,772
$ 27,131
$ 25,270
$ 21,669
Tax-exempt investment
income
(828)
(790)
(758)
(749)
(757)
Taxable investment income
1,108
1,058
1,015
1,003
1,013
Net
Interest Income Fully Tax Equivalent F
$ 30,739
$
31,040
$
27,388
$
25,524
$
21,925
Annualized Net Interest
Margin E/B
4.01%
4.04%
3.85%
4.04%
3.92%
Annualized Net Interest
Margin, Fully Tax Equivalent F/B
4.05%
4.07%
3.89%
4.08%
3.97%
Three Months Ended
Core Net Interest Margin
Sept 30,
2019
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Net interest income
(FTE)
$ 30,739
$ 31,040
$ 27,388
$ 25,524
$ 21,925
Less purchase accounting
adjustments
1,296
1,607
1,147
1,414
541
Net interest
income, net of purchase accounting adj G
$
29,443
$
29,433
$
26,241
$
24,110
$
21,384
Total average earning
assets
$3,036,492
$3,049,874
$2,815,680
$2,500,709
$2,210,894
Add average balance of loan
valuation discount
13,679
15,265
13,869
12,803
6,836
Avg earning
assets, excluding loan valuation discount H
$3,050,171
$3,065,139
$2,829,549
$2,513,511
$2,217,730
Core net interest margin
G/H
3.86%
3.84%
3.71%
3.84%
3.86%
Three Months Ended
Efficiency Ratio
Sept 30,
2019
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Operating Expense
Total non-interest
expense
$ 20,825
$ 20,891
$ 21,893
$ 22,245
$ 19,786
Pre-tax non-operating
expenses
(705)
(91)
(3,179)
(4,155)
(4,059)
Adjusted Operating Expense I
$
20,120
$
20,800
$
18,714
$
18,090
$
15,727
Operating Revenue
Net interest income,
FTE
$ 30,739
$ 31,040
$ 27,388
$ 25,524
$ 21,925
Total non-interest
income
7,103
6,716
5,554
6,396
5,074
Pre-tax non-operating
items
(233)
(1,292)
(233)
Adjusted Operating Revenue
J
$
37,842
$
37,756
$
32,709
$
30,628
$
26,766
Efficiency Ratio, operating I/J
53.17%
55.09%
57.21%
59.06%
58.76%
Three Months Ended
Return Ratios
Sept 30,
2019
June 30,
019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Net income available to
common shareholders K
$ 12,272
$ 11,983
$ 7,635
$ 6,861
$ 5,162
Acquisition charges
705
91
3,179
4,155
4,059
Tax on acquisition
charges
(152)
(23)
(712)
(910)
(1,027)
Gain on sale
(342)
Tax on gain on sale
86
Treasury awards
(233)
(950)
(233)
Tax on Treasury awards
59
242
59
Net earnings available to
common shareholders, oper L
$
12,825
$
12,051
$
9,928
$
9,142
$
8,020
Annualized return on avg assets
K/A
1.43%
1.39%
0.96%
0.98%
0.84%
Annualized return on avg assets,
oper L/A
1.49%
1.39%
1.25%
1.30%
1.30%
Annualized return on avg common
equity, oper L/C
10.91%
10.60%
10.18%
11.14%
11.26%
Annualized return on avg tangible
common equity, oper L/D
15.80%
15.64%
15.13%
16.44%
14.64%
Mortgage Department
Net Interest Income after provision for
loan losses
$
200
$
194
$ 176
$ 267
$
154
Loan fee income
1,800
1,559
909
969
1,066
Salaries and employee benefits
986
941
823
774
855
Other non-interest expense
134
140
154
124
136
Earnings before income taxes
$
880
$
672
$
108
$
338
$
229
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191021005834/en/
For additional information, contact:
M. Ray “Hoppy” Cole Chief Executive Officer
Dee Dee Lowery Chief Financial Officer (601) 268-8998
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