First Bancshares, Inc. ("Company") (Nasdaq:FBSI), the holding
company for First Home Savings Bank ("Bank"), today announced
operating results for the first quarter of its fiscal year ending
June 30, 2012.
For the quarter ended September 30, 2011, the Company had a net
loss of $289,000, or ($0.19) per share – diluted, compared to a net
loss of $66,000, or $(0.04) per share – diluted for the comparable
period in 2010. The $223,000 increase in the net loss for the
quarter ended September 30, 2011 when compared to the prior year is
attributable to a decrease in net interest income of $115,000 and
an increase of $143,000 in non-interest expense, which were
partially offset by a $8,000 decrease in the provision for loan
losses, a $22,000 increase in non-interest income and a decrease of
$6,000 in income tax expense.
Net interest income decreased by $115,000 to $1.4 million during
the quarter ended September 30, 2011 compared to $1.5 million for
the comparable quarter in the prior year. The decrease was the
result of a decrease of $368,000, or 16.7%, in interest income from
$2.2 million in the quarter ended September 30, 2010 to $1.8
million in the quarter ended September 30, 2011. This was partially
offset by a decrease of $253,000, or 38.5%, in interest expense
from $657,000 in the 2010 quarter to $404,000 in the 2011 quarter.
The decrease in interest income was the result of a decrease in the
average yield on interest-earning assets from 4.33% in the 2010
quarter to 3.86% in the 2011 quarter, and by a decrease in the
average balance of interest-earning assets of $3.0 million from
$191.7 million in 2010 to $188.7 million in 2011. The decrease in
interest expense was the result of a decrease in the average cost
of interest-bearing liabilities from 1.24% in the 2010 quarter to
0.97% in the 2011 quarter, and by a decrease of $7.3 million in the
average balance of interest-bearing liabilities from $173.0 million
in the 2010 quarter to $165.7 million, in the 2011 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 three
years.
There was a provision for loan losses of $56,000 during the
quarter ended September 30, 2011 compared to a provision for loan
losses of $63,000 during the quarter ended September 30, 2010. In
the quarter ended September 30, 2011, a review of several credits
resulted in additional reserves of $56,000.
Non-interest income increased by $22,000 from $286,000 during
the three months ended September 30, 2010 to $308,000 during the
three months ended September 30, 2011. This increase was primarily
the result of a profit of $114,000 on the sale of securities.
Additionally, there were increases of $666 and $8,000 in gain on
the sale of loans and income on Bank Owned Life Insurance,
respectively. These items were partially offset by a decrease of
$58,000 in service charges and other fee income, an increase in the
net loss on the sale of property and equipment and real estate
owned and a decrease of $18,000 in other non-interest income. The
decrease in service charges and other fee income is occurring
throughout the financial services industry due to recently enacted
legislation and restrictions on fees charged by financial
institutions.
Non-interest expense increased by $143,000 to $2.0 million
during the quarter ended September 30, 2011 compared to $1.8
million the same quarter one year earlier. There were increases of
$67,000, $89,000 and $18,000 in compensation and benefits,
professional fees and deposit insurance premiums, respectively.
These increases were partially offset by decreases of $8,000 in
occupancy and equipment expense and $23,000 in other non-interest
expense. The increase in compensation and benefits was the result
of additional funding to the frozen defined benefit plan and, in
part, to a change in senior management. The increase in
professional fees was due to costs related to foreclosures and
consulting costs associated with the quarterly loan review.
Total consolidated assets at September 30, 2011 were $204.1
million, compared to $209.3 million at June 30, 2011, representing
a decrease of $5.3 million, or 2.5%. Stockholders' equity at
September 30, 2011 was $17.7 million, or 8.7% of assets, compared
with $18.1 million, or 8.6% of assets, at June 30, 2011. Book
value per common share decreased to $11.44 at September 30, 2011
from $11.65 at June 30, 2011. The decrease in stockholders' equity
was primarily attributable to the net loss of $289,000 for the
three month period ended September 30, 2011. There was also a
decrease of $36,000, net of taxes, during the three months ended
September 30, 2011 in the market value of available-for-sale
securities.
Net loans receivable decreased $1.6 million, or 1.7%, to $94.2
million at September 30, 2011 from $95.8 million at June 30, 2011.
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, $318,000 in loans were charged off during the
three month period and $242,000 of loans was transferred to real
estate owned or repossessed assets during the period. Customer
deposits decreased $4.0 million, or 2.2%, to $176.7 million at
September 30, 2011 from $180.7 million at June 30, 2011. Retail
repurchase agreements decreased by $1.2 million, or 18.7%, to $5.2
million at September 30, 2011 from $6.4 million at June 30,
2011.
Non-performing assets decreased $1.1 million to $9.4 million at
September 30, 2011 from $10.5 million at June 30, 2011. There were
decreases of $342,000 in non-accrual loans, $227,000 in impaired
loans not past due and $537,000 in real estate owned and other
repossessed assets. Based on its analysis of delinquent loans,
non-performing loans and classified loans, management believes that
the Company's allowance for loan losses of $1.7 million at
September 30, 2011 was adequate to absorb known and inherent risks
in the loan portfolio at that date. At September 30, 2011 the
allowance for loan losses was 34.5% of non-performing loans,
including impaired loans not past due, as compared to 35.7% at June
30, 2011.
As discussed in the Company's Annual Report on Form 10-K, filed
with the Securities and Exchange Commission ("SEC") on September
27, 2011, and updated in a Form 8-K filed with the SEC on November
8, 2011, the Company is operating under a Cease and Desist Order
entered into with its former primary federal regulator, the Office
of Thrift Supervision (the "OTS"), that is being enforced by the
Board of Governors of the Federal Reserve System, its current
primary federal regulator. The Cease and Desist Order with the OTS
that the Bank had been operating under was terminated effective
October 25, 2011. On November 3, 2011, the Bank entered into,
and is now operating under, an informal agreement with the
Division of Finance of the State of Missouri and the Federal
Deposit Insurance Corporation, the current regulators for the Bank.
In management's opinion, all items required by the Company under
the Order, and by the Bank under the agreement, through the three
month period ended September 30, 2011 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 Orders to Cease and Desist, 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; changes in consumer spending and savings
habits, the results of litigation; 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
September 30, |
|
2011 |
2010 |
Operating Data: |
|
|
|
|
|
Total interest
income |
$ 1,836 |
$ 2,204 |
Total interest
expense |
404 |
657 |
Net interest income |
1,432 |
1,547 |
Provision for loan
losses |
56 |
63 |
Net interest
income after provision for loan losses |
1,376 |
1,484 |
Non-interest income |
308 |
286 |
Non-interest expense |
1,973 |
1,830 |
Income (loss) before
income tax |
(289) |
(60) |
Income tax expense
(benefit) |
-- |
6 |
Net income (loss) |
$ (289) |
$ (66) |
Net income (loss) per
share-basic |
$ (0.19) |
$ (0.04) |
Net income (loss) per
share-diluted |
$ (0.19) |
$ (0.04) |
|
|
|
Financial Condition
Data: |
At September 30,
2011 |
At June 30,
2011 |
|
|
|
Total assets |
$ 204,052 |
$ 209,344 |
Loans receivable, net |
94,163 |
95,817 |
Non-performing assets |
9,368 |
10,474 |
Cash and cash equivalents |
25,389 |
24,799 |
Investment securities |
68,856 |
75,166 |
Deposits |
176,707 |
180,661 |
Borrowed funds |
8,216 |
9,417 |
Stockholders' equity |
17,740 |
18,065 |
Book value per share |
$ 11.44 |
$ 11.65 |
CONTACT: R. Bradley Weaver, CEO
(417) 926-5151
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