First Bancshares, Inc. (NASDAQ - FstBksh: FBSI), the holding
company for First Home Savings Bank (“Bank”), today announced
earnings for the fourth quarter and for its fiscal year ended June
30, 2010.
For the quarter ended June 30, 2010, the Company had a net loss
of $1.6 million, or $(1.05) per share – diluted, compared to a net
loss of $1.0 million, or $(0.66) per share – diluted for the
comparable period in 2009. The net loss for the year ended June 30,
2010 was $1.5 million, or $(0.96) per share – diluted, compared to
a net loss of $4.0 million, or $(2.60) per share – diluted for the
year ended June 30, 2009. The net losses for the quarter and year
ended June 30, 2010 were attributable to decreases in net interest
income and non-interest income, as well as the effect of providing
a valuation allowance against deferred income tax assets. These
decreases to net income were partially offset by decreases in
non-interest expense for both the quarter and year ended June 30,
2010. The provision for loan losses increased for the 2010 quarter
compared to the 2009 quarter, but decreased for fiscal 2010
compared to fiscal 2009.
During the quarter ended June 30, 2010, net interest income
decreased by $53,000, or 3.3%, to just under $1.6 million from just
over $1.6 million during the quarter ended June 30, 2009. This
decrease was the result of a decrease in interest income of
$523,000, or 18.7%, which was partially offset by a decrease in
interest expense of $470,000, or 40.1%. The decrease in both
interest income and interest expense was primarily the result of a
significant decrease in market interest rates between the two
periods.
Non-interest income decreased by $170,000, or 33.8%, to $333,000
during the 2010 quarter from $503,000 during the 2009 quarter.
Service charges and other fee income decreased by $78,000, or
18.7%, gain on the sale of loans decreased by $186,000, or 93.7%,
gain on the sale of real estate held decreased by $18,000, or
63.9%, income from Bank Owned Life Insurance (“BOLI”) decreased by
$19,000, or 100.0%, and other non-interest income decreased by
$22,000, or 53.4%. These decreases were partially offset by a
decrease of $153,000, or 75.1%, in write downs on real estate held.
Service charge income has been decreasing over the last couple of
years as a result of accounts being managed more carefully in the
existing economic climate and also as a result of the restrictions
on such charges, either enacted or proposed. The decrease in gain
on the sale of loans is the result of the Savings Bank closing its
loan production office in June 2009, and the decrease in income on
BOLI was the result of the Savings Bank having liquidated the
insurance policies.
During the quarter ended June 30, 2010, the provision for loan
losses increased by $335,000, or 73.8%, to $789,000 from $454,000
during the quarter ended June 30, 2009. The allowance for loan
losses was $2.5 million, or 2.28%, of gross loans at June 30, 2010
compared to $4.2 million, or 3.05% of gross loans at June 30, 2009.
Total non-performing assets at June 30, 2010 were $7.9 million,
representing an increase of $2.9 million from total non-performing
assets of $5.0 million at June 30, 2009.
Non-interest expense decreased by $1.3 million, or 41.5%, to
$1.9 million during the 2010 quarter from $3.2 million during the
2009 quarter. The decrease in non-interest expense was primarily
the result of a $1.2 million prepayment penalty incurred during the
2009 quarter on the prepayment of $19.0 million of borrowed money.
This penalty was not incurred in 2010. In addition, there were
decreases of $233,000, or 21.3%, in compensation and benefits, and
$39,000, or 10.3%, in occupancy expense during the 2010 quarter
compared to the 2009 quarter. These decreases were partially offset
by increases of $94,000, or 201.6%, in professional fees and
$66,000, or 64.2%, in deposit insurance premiums during the 2010
quarter compared to the 2009 quarter. The decreases in compensation
and employee benefits and occupancy and equipment expense were
attributable to cost reduction measures, including the closing of
the loan production office in June 2009, as well as other staff
reductions and cost saving measures between periods.
During the year ended June 30, 2010, net interest income
decreased by $412,000, or 6.0%, to $6.5 million from $6.9 million
during the year ended June 30, 2009. This decrease was the result
of a decrease in interest income of $2.6 million, or 20.9%, which
was partially offset by a decrease in interest expense of $2.2
million, or 40.0%. During fiscal 2010, non-interest income
decreased by $1.1 million, or 42.2%, to $1.6 million from $2.7
million during fiscal 2009. This decrease was primarily the result
of a decrease of $397,000 in service charges and other fee income,
a decrease of $136,000 in income from BOLI, a decrease of $487,000
in gain on the sale of loans and a decrease of $53,000, or 32.5%,
in other non-operating income. Additionally, during fiscal 2009 the
Savings Bank recorded a gain on the sale of investments of
$143,000. There were no investments sold during fiscal 2010. These
decreases were partially offset by an increase of $10,000 in gain
on the sale of property, equipment and real estate owned and a
decrease of $85,000 in write downs on real estate owned.
During the year ended June 30, 2010, the provision for loan
losses decreased by $4.5 million, or 84.0%, to $852,000 from $5.3
million during the year ended June 30, 2009. During fiscal 2010,
the Savings Bank’s allowance for loan losses decreased by $1.7
million to $2.5 million from $4.2 million at June 30, 2009. The
decrease during fiscal 2010 was the result of net charge-offs of
$2.7 million, which was partially offset by the $852,000 provision
for loan losses and the transfer of a reserve of $150,000 against a
letter of credit to the allowance for loan losses when the letter
of credit was funded.
Non-interest expense decreased by $2.2 million, or 22.3%, during
fiscal 2010 to $7.6 million from $9.8 million during fiscal 2009.
The decrease in non-interest expense was primarily the result of a
$1.2 million prepayment penalty incurred during the 2009 quarter on
the prepayment of $19.0 million of borrowed money. This penalty was
not incurred in 2010. In addition, there were decreases of
$796,000, or 18.0%, in compensation and benefits and $252,000, or
15.5%, in occupancy expenses. These decreases were partially offset
by increases of $347,000, or 135.6%, in deposit insurance premiums
and $85,000, or 19.1% in professional fees. The decreases in
compensation and benefits and in occupancy expense were the result
of staff reductions and other cost cutting measures. The increase
in deposit insurance premiums is attributable to an increase in
rates, as discussed above.
Total consolidated assets at June 30, 2010 were $211.7 million,
compared to $229.9 million at June 30, 2009, representing a
decrease of $18.3 million, or 7.9%. Stockholders’ equity at June
30, 2010 was $22.6 million, or 10.7% of assets, compared with $23.8
million, or 10.3% of assets, at June 30, 2009. Book value per
common share decreased to $14.68 at June 30, 2010 from $15.32 at
June 30, 2009. The decrease in equity was primarily attributable to
the net loss of $1.5 million for the year ended June 30, 2010. The
decrease in equity was partially offset by a positive change of
$322,000, net of income taxes, in the market value of
available-for-sale securities.
Net loans receivable decreased $24.5 million, or 18.4%, to
$108.7 million at June 30, 2010 from $133.2 million at June 30,
2009. The decrease in loans receivable included decreases of $10.9
million, $5.2 million, $5.3 million, $3.0 million and $1.6 million,
in single-family loans, commercial real estate loans, commercial
business loans, land loans and consumer loans, including second
mortgages, respectively. Customer deposits decreased $9.1 million,
or 4.8%, to $180.1 million at June 30, 2010 from $189.2 million at
June 30, 2009.
Non-performing assets increased by $2.9 million to $7.9 million
at June 30, 2010 from $5.0 million at June 30, 2009. The increase
between June 30, 2009 and June 30, 2010 was the result of increases
in real estate owned of $3.2 million and in non-accruing loans of
$903,000. These decreases were partially offset by a decrease of
$288,000 in loans 90 days delinquent and still accruing, and
$96,000 in repossessed assets. The increase in non-accruing loans
was attributable to the addition of two large loans, which consist
of a $1.2 million loan on a motel property located in Branson,
Missouri and a $2.1 loan on an office building in downtown
Springfield, Missouri. During fiscal 2010, a residential
development loan of $1.4 million was transferred to real estate
owned from non-accrual loans.
During the year ended June 30, 2010, the allowance for loan
losses decreased $1.7 million to $2.4 million from $4.2 million as
of June 30, 2009, and the ratio of the allowance to gross loans
increased to 2.28% at June 30, 2010 from 3.05% at June 30,
2009.
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, 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 reports filed 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 Ended Year Ended June
30, June 30, 2010 2009 2010
2009 Operating Data: Total interest
income $ 2,268 $ 2,791 $ 9,777 $ 12,366 Total interest expense 702
1,172 3,266 5,443 Net interest income
1,566 1,619 6,511 6,923 Provision for loan losses 789 454
852 5,314
Net interest income after provision for
loan losses
777 1,165 5,659 1,609 Non-interest income 333 503 1,535 2,657
Non-interest expense 1,889 3,231 7,637 9,833
Income (loss) before income tax (624 ) (1,563 ) (443 )
(5,568 ) Income tax benefit 842 (530 ) 1,041 (1,532 )
Net income (loss) $ (1,621 ) $ (1,033 ) $ (1,484 ) $ (4,036 ) Net
income (loss) per share-basic $ (1.05 ) $ (0.66 ) $ (0.96 ) $ (2.60
) Net income (loss) per share-diluted $ (1.05 ) $ (0.66 ) $ (0.96 )
$ (2.60 )
At June 30, Financial Condition
Data: 2010 2009 Total assets $ 211,657 $
229,915 Loans receivable, net 108,683 133,162 Non-performing assets
7,873 5,019
Cash and cash equivalents, including
interest-bearing deposits
20,183 26,218 Investment securities 69,539 53,536 Customer deposits
180,075 189,218 Borrowed funds 8,352 15,713 Stockholders' equity
22,611 23,764 Book value per share $ 14.68 $ 15.32
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