First Bancshares, Inc. (“Company”) (NASDAQ - FstBksh: FBSI), the
holding company for First Home Savings Bank (“Bank”), today
announced earnings for the second quarter of its fiscal year ending
June 30, 2010.
For the quarter ended December 31, 2009, the Company had net
income of $47,000, or $0.03 per share – diluted, compared to a net
loss of $3.0 million, or ($1.94) per share – diluted for the
comparable period in 2008. The increase in net income for the
quarter ended December 31, 2009 when compared to the prior year is
attributable primarily to the absence of a $51,000 negative
provision for loan losses in the quarter ended December 31, 2009,
compared to a provision of $4.2 million in the quarter ended
December 31, 2008. In addition there was a decrease in non-interest
expense between the quarters. These items were partially offset by
decreases in net interest income and in non-interest income, and an
increase in income tax expenses.
Net interest income decreased by $176,000 during the quarter
ended December 31, 2009 compared to the prior year. This was the
result of a decrease of $721,000, or 22.4%, in interest income from
$3.2 million in the quarter ended December 31, 2008 to $2.5 million
in the quarter ended December 31, 2009. This was partially offset
by a decrease of $545,000, or 39.0%, in interest expense from $1.4
million in the 2008 quarter to $852,000 in the 2009 quarter. The
decrease in interest income was the result of a decrease in the
average yield on interest-earning assets from 5.82% in the 2008
quarter to 4.99% in the 2009 quarter, and by a decrease in the
average balance of interest-earning assets of $20.7 million from
$219.1 million in 2008 to $198.4 million in 2009. The decrease in
interest expense was the result of a decrease in the average cost
of interest-bearing liabilities from 2.78% in the 2008 quarter to
1.87% in the 2009 quarter, and by a decrease of $19.3 million in
the average balances of interest-bearing liabilities from $199.4
million in the 2008 quarter to $180.1 million, in the 2009 quarter.
The changes in yields and costs are the result of the general
decline in market interest rates that has accompanied the financial
and general economic crisis that has evolved over the past 18 to 24
months.
There was a negative provision for loan losses of $51,000 during
the quarter ended December 31, 2009 compared to a provision for
loan losses of $4.2 million during the quarter ended December 31,
2008. The negative $51,000 was an offset to the $51,000 provision
recorded in the quarter ended September 30, 2009 and was based on
analyses performed by an outside consultant and by management which
determined that the provision made in the September quarter
resulted in an excess in the allowance for loan losses. In December
2008, following a change in management, the Company initiated an
extensive review of its loan portfolio. The review resulted in the
$4.2 million provision for loan losses during the quarter ended
December 31, 2008, which was almost 80% of the $5.3 million
provision for loan losses recorded during the fiscal year ended
June 30, 2009. The analyses performed by the outside consultant and
by management during the quarter ended December 31, 2009,
determined that no addition provision for loan losses was needed
for the quarter and that the $51,000 provision recorded in the
quarter ended September 30, 2009, should be reversed.
Non-interest income decreased by $338,000, or 50.2%, from
$674,000 during the three months ended December 31, 2008 to
$336,000 during the three months ended December 31, 2009. This was
the result of decreases of $100,000, $82,000, $58,000 and $12,000
in service charges and other fee income, gain on the sale of loans,
income from bank owned life insurance, and other income,
respectively, and to an increase of $93,000 in provision for loss
on real estate owned. These items were partially offset by a
decrease of $8,000 in net loss on the sale of property and
equipment and real estate owned. The decrease in profit on the sale
of loans was the result of the closure of the Bank’s loan
origination office prior to the end of fiscal 2009. The only profit
recorded in the quarter ended December 31, 2009 was related to the
sale of one loan originated for sale in the quarter. The decrease
in service charges and other fee income appears to be somewhat
symptomatic of the financial services industry as a whole with
account holders taking greater care that they do not overdraw their
accounts. The decrease in income on bank owned life insurance is
the result of surrendering the policies between December 31, 2008
and September 30, 2009.
Non-interest expense decreased by $355,000 during the quarter
ended December 31, 2009 compared to the same quarter one year
earlier. There were decreases of $195,000, $80,000 and $222,000 in
compensation and employee benefits, occupancy and equipment expense
and other expense, respectively. These decreases were partially
offset by an increase of $150,000 in deposit insurance premiums.
The decrease in compensation and benefits was the result of a
decrease in staff levels, including the closing of the loan
origination office just prior to the end of fiscal 2009. The
decrease in occupancy and equipment expense was the result the
closure of both the loan origination office and the prior loan
origination office, which was in use through the end of calendar
2008. The increase in deposit insurance premiums was the result of
a significant increase in the FDIC insurance rates.
For the six months ended December 31, 2009, the Company had net
income of $246,000, or $0.16 per share – diluted, compared to a net
loss of $2.8 million, or ($1.78) per share – diluted for the
comparable period in 2008. The increase in net income for the six
months ended December 31, 2009 when compared to the prior year is
attributable primarily to the absence of a provision for loan
losses in the 2009 period compared to a provision of $4.4 million
in the 2008 period. In addition there was a decrease in
non-interest expense between the periods. These items were
partially offset by decreases in net interest income and in
non-interest income, and an increase in income tax expenses.
Net interest income decreased by $361,000 during the six months
ended December 31, 2009 compared to the prior year. This was the
result of a decrease of $1.5 million, or 22.2%, in interest income
from $6.6 million in the six months ended December 31, 2008 to $5.2
million in the six months ended December 31, 2009. This decrease
was partially offset by a decrease of $1.1 million, or 38.3%, in
interest expense from $2.9 million in the six months ended December
31, 2008 to $1.8 million in the six months ended December 31, 2009.
The decrease in interest income was the result of a decrease in the
average yield on interest-earning assets from 5.92% during the six
months ended December 31, 2008 to 5.08% during the six months ended
December 31, 2009, and by a decrease in the average balance of
interest-earning assets of $20.9 million from $222.3 million in
2008 to $201.4 million in 2009. The decrease in interest expense
was the result of a decrease in the average cost of
interest-bearing liabilities from 2.85% in the 2008 period to 1.93%
in the 2009 period, and by a decrease of $18.3 million in the
average balances of interest-bearing liabilities from $202.3
million in the 2008 period to $184.0 million, in the comparable
2009 period. The changes in yields and costs are the result of the
general decline in market interest rates that has accompanied the
financial and general economic crisis that has evolved over the
past 18 to 24 months.
There was no provision for loan losses during the six months
ended December 31, 2009 compared to a provision for loan losses of
$4.4 million during the six months ended December 31, 2008. The
significant provision for loan losses during the six months ended
December 31, 2008 is discussed above.
Non-interest income decreased by $565,000, or 39.5%, from $1.4
million during the six months ended December 31, 2008 to $866,000
during the six months ended December 31, 2009. This was the result
of decreases of $211,000, $158,000, $97,000 and $30,000 in service
charges and other fee income, gain on the sale of loans, income
from bank owned life insurance, and other income, respectively, and
to an increase of $120,000 in provision for loss on real estate
owned. These items were partially offset by a $42,000 positive
change in net loss on the sale of property and equipment and real
estate owned. The decrease in profit on the sale of loans is due to
the closure of the loan origination office prior to the end of
fiscal 2009. The only profit recorded in the six months ended
December 31, 2009 was related to the sale of one loan originated
for sale during the period..
Non-interest expense decreased by $649,000 during the six months
ended December 31, 2009 compared to the same period one year
earlier. There were decreases of $390,000, $177,000 and $295,000 in
compensation and employee benefits, occupancy and equipment expense
and other expense, respectively. These decreases were partially
offset by an increase of $210,000 in deposit insurance
premiums.
Total consolidated assets at December 31, 2009 were $210.1
million, compared to $229.9 million at June 30, 2009, representing
a decrease of $19.8 million, or 8.6%. Stockholders’ equity at
December 31, 2009 was $24.0 million, or 11.4% of assets, compared
with $23.8 million, or 10.3% of assets, at June 30, 2009. Book
value per common share increased to $15.49 at December 31, 2009
from $15.32 at June 30, 2009. The increase in equity was primarily
attributable to net income of $246,000 for the six month period.
There was also an increase of $7,000, net of taxes, in the market
value of available-for-sale securities.
Net loans receivable decreased $13.7 million, or 10.3%, to
$119.5 million at December 31, 2009 from $133.2 million at June 30,
2009. The decrease in net loans receivable was due to a general
decrease in the demand for loans resulting from more challenging
economic conditions both nationally and within the Bank’s primary
market area. In addition, $2.2 million in loans were charged off
during the six month period and $3.3 million of loans was
transferred to real estate owned or repossessed assets during the
period. Customer deposits decreased $10.2 million, or 5.4%, to
$179.1 million at December 31, 2009 from $189.2 million at June 30,
2009. Retail repurchase agreement balances decreased by $2.2
million, or 37.9%, to $3.5 million at December 31, 2009 from $5.7
million at June 30, 2009.
Non-performing assets increased during the first six months of
fiscal 2010 by $385,000 from $5.0 million at June 30, 2009 to $5.4
million at December 31, 2009. There were increases of $2.3 million
in real estate owned and repossessed assets and $556,000 in loans
delinquent 90 days or more and still accruing. These increases were
partially offset by a decrease of $2.4 million non-accrual loans.
While there was a 7.3% increase in non-performing assets during the
six months ended December 31, 2009, management believes that there
was no single item or group of items the resolution of which will
result in material loss to the Company. Based on its analysis of
delinquent loans, non-performing loans and classified loans,
management believes that the Company’s allowance for loan losses of
$2.0 million at December 31, 2009 was adequate to absorb known and
inherent risks in the loan portfolio at that date. At December 31,
2009 the allowance for loan losses was 139.2% of non-performing
loans as compared to 126.4% at June 30, 2009.
As was discussed in the Company’s Annual Report on Form 10-K,
filed with the Securities and Exchange Commission on September 28,
2009, the Company and the Bank are operating under Cease and Desist
Orders with the Office of Thrift Supervision (the “OTS”). In
management’s opinion, all items required by the Company and the
Bank under these orders through the six month period ended December
31, 2009 have been completed and/or complied with.
First Bancshares, Inc. is the holding company for First Home
Savings Bank, a FDIC-insured savings bank chartered by the State of
Missouri that conducts business from its home office in Mountain
Grove, Missouri, and ten full service offices in Marshfield, Ava,
Gainesville, Sparta, Springfield, Theodosia, Crane, Galena, Kissee
Mills and Rockaway Beach, Missouri.
The Company and its wholly-owned subsidiaries, First Home
Savings Bank and SCMG, Inc. may from time to time make written or
oral “forward-looking statements,” including statements contained
in its filings with the Securities and Exchange Commission, in its
reports to stockholders, and in other communications by the
Company, which are made in good faith by the Company pursuant to
the “safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995.
These forward-looking statements include statements with respect
to the Company’s beliefs, expectations, estimates and intentions
that are subject to significant risks and uncertainties, and are
subject to change based on various factors, some of which are
beyond the Company’s control. Such statements address the following
subjects: future operating results; customer growth and retention;
loan and other product demand; earnings growth and expectations;
new products and services; credit quality and adequacy of reserves;
results of examinations by our bank regulators, our compliance with
the Cease and Desist Orders, technology, and our employees. The
following factors, among others, could cause the Company’s
financial performance to differ materially from the expectations,
estimates and intentions expressed in such forward-looking
statements: the strength of the United States economy in general
and the strength of the local economies in which the Company
conducts operations; the effects of, and changes in, trade,
monetary, and fiscal policies and laws, including interest rate
policies of the Federal Reserve Board; inflation, interest rate,
market, and monetary fluctuations; the timely development and
acceptance of new products and services of the Company and the
perceived overall value of these products and services by users;
the impact of changes in financial services’ laws and regulations;
technological changes; acquisitions; changes in consumer spending
and savings habits; and the success of the Company at managing and
collecting assets of borrowers in default and managing the risks of
the foregoing.
The foregoing list of factors is not exclusive. Additional
discussion of factors affecting the Company’s business and
prospects is contained in the Company’s periodic filings with the
SEC. The Company does not undertake, and expressly disclaims any
intent or obligation, to update any forward-looking statement,
whether written or oral, that may be made from time to time by or
on behalf of the Company.
First Bancshares, Inc. and Subsidiaries Financial
Highlights (In thousands, except per share amounts)
Quarter Six Months Ended December
31, Ended December 31, 2009 2008
2009 2008 Operating Data: Total
interest income $ 2,494 $ 3,215 $ 5,158 $ 6,632 Total interest
expense 852 1,397 1,791 2,904 Net interest income 1,642 1,818 3,367
3,728 Provision for loan losses (51) 4,230 - 4,379
Net interest income (loss) after
provision for loan losses
1,693 (2,412) 3,367 (651) Non-interest income 336 674 866 1,431
Non-interest expense 1,874 2,229 3,737 4,386 Income (loss) before
income tax 155 (3,967) 496 (3,606) Income tax expense (benefit) 108
(962) 250 (846) Net income (loss) $ 47 $ (3,005) $ 246 $ (2,760)
Net income (loss) per share-basic $ 0.03 $ (1.94) $ 0.16 $ (1.78)
Net income (loss) per share-diluted $ 0.03 $ (1.94) $ 0.16 $ (1.78)
At At December 31, June 30,
Financial Condition Data: 2009 2009
Total assets $ 210,142 $ 229,915 Loans receivable, net 119,498
133,162 Non-performing assets 5,404 5,019
Cash and cash equivalents,
including interest-bearing deposits
18,856 26,218 Investment securities 56,150 53,536 Deposits 179,051
189,218 Borrowed funds 6,550 15,713 Stockholders' equity 24,022
23,764 Book value per share $ 15.49 $ 15.32
First Bancshares (NASDAQ:FBSI)
Historical Stock Chart
From Jul 2024 to Aug 2024
First Bancshares (NASDAQ:FBSI)
Historical Stock Chart
From Aug 2023 to Aug 2024