First Bancshares, Inc. ("Company") (Nasdaq:FBSI), the holding
company for First Home Savings Bank ("Bank"), today announced
operating results for the third quarter of its fiscal year ending
June 30, 2012.
For the quarter ended March 31, 2012, the Company had a net loss
of $584,000, or ($0.38) per share – diluted, compared to a net loss
of $614,000, or ($0.40) per share – diluted, for the comparable
period in 2011. The decrease in the net loss for the quarter ended
March 31, 2012 when compared to the prior year is primarily
attributable to a $37,000 decrease in the provision for loan
losses, a decrease of $127,000 in other non-interest expense, and a
$293,000 decrease in income tax expense. These items were partially
offset by decreases of $235,000 in net interest income and $192,000
in non-interest income.
Net interest income decreased by $235,000 during the quarter
ended March 31, 2012 to $1.3 million compared to $1.5 million for
the comparable quarter in the prior year. This was the result of a
decrease of $355,000, or 17.8%, in interest income to $1.6 million
in the quarter ended March 31, 2012 from $2.0 million in the
quarter ended March 31, 2011. This was partially offset by a
decrease of $120,000, or 24.7%, in interest expense from $485,000
in the 2011 quarter to $365,000 in the 2012 quarter. The decrease
in interest income was the result of a decrease in the average
yield on interest-earning assets from 4.30% in the 2011 quarter to
3.66% in the 2012 quarter, and by a decrease in the average balance
of interest-earning assets of $8.1 million from $188.3 million in
2011 to $180.2 million in 2012. The decrease in interest expense
was the result of a decrease in the average cost of
interest-bearing liabilities from 1.14% in the 2011 quarter to
0.89% in the 2012 quarter, and by a decrease of $7.8 million in the
average balance of interest-bearing liabilities from $172.3 million
in the 2011 quarter to $164.5 million in the 2012 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 since 2008.
The Company's net interest margin decreased to 2.85% for the
three months ended March 31, 2012 from 3.25% for the three months
ended March 31, 2011.
The provision for loan losses was $208,000 during the quarter
ended March 31, 2012 compared to a provision for loan losses of
$245,000 during the quarter ended March 31, 2011. The $37,000
decrease was primarily the result of a decrease in non-performing
loans and classified loans.
Non-interest income decreased by $192,000 from $366,000 during
the three months ended March 31, 2011 to $174,000 during the three
months ended March 31, 2012. The primary reasons for the decrease
in non-interest income were decreases of $283,000, $40,000 and
$11,000 in gain on the sale of investments, service charges and
gain on sale of loans, respectively, between the 2011 quarter and
the 2012 quarter. These decreases were partially offset by
increases of $13,000 and $4,000, in gain on the sale of property
and equipment and real estate owned and other non-interest income,
respectively, by a decrease of $98,000 in the provision for losses
on real estate owned, and by income of $24,000 on BOLI and $3,000
from gain on the sale of repossessed assets. The provision for
losses on other real estate owned totaled $104,000 and $202,000 for
the 2012 period and the 2011 period, respectively. These provisions
were made to expedite the disposal of real estate owned in light of
negative market value trends and reduced values noted in new
appraisals on foreclosed real estate. Income of $24,000 from BOLI
resulted from the purchase of $3.0 million in BOLI during the first
quarter of fiscal 2012. The decrease in service charges and
other fee income was due to regulatory changes that have resulted
in restrictions on type, number and amount of fees charged by
financial institutions. In addition, account holders are taking
greater care that they do not incur overdraft charges on their
accounts, which has also contributed to the decrease in service
charges and other fee income. The decrease in profit on the sale of
loans was primarily the result of decreased origination of loans
for sale. Although the Company does not currently have a
relationship with any secondary market purchaser, management is
reviewing proposals for establishing such an arrangement.
Non-interest expense decreased by $127,000 from $2.0 million
during the three months ended March 31, 2011 to $1.8 million for
the three months ended March 31, 2012. The decrease was the
result of decreases of $11,000, $84,000 and $58,000 in occupancy
and equipment expense, professional fees and deposit insurance
premiums, respectively. These decreases were partially offset by
increases of $16,000 in compensation and benefits and $9,000 in
other non-interest expense. The increase in compensation and
benefits resulted from the one-time expense of severance and
vacation from a reduction in force that eliminated five positions
during the three months ended March 31, 2012. The decrease in
deposit insurance premiums was the result of an adjustment of
$213,000 in the balance of the prepaid deposit insurance premiums
due to deposit shrinkage.
For the nine months ended March 31, 2012, the Company had a net
loss of $1.5 million, or ($0.99) per share – diluted, compared to a
net loss of $2.2 million, or ($1.39) per share – diluted for the
comparable period in 2011. The $691,000 decrease in the net
loss for the nine months ended March 31, 2012 when compared to the
prior year is attributable to decreases of $563,000 in non-interest
expense, $434,000 in the provision for loan losses and $496,000 in
the provision for income taxes. These items were partially offset
by a decrease of $621,000 in net interest income and a decrease of
$253,000 in non-interest income.
Net interest income decreased by $621,000, or 13.5%, for the
nine months ended March 31, 2012 compared to the same period in the
prior year. This was the result of a decrease of $1.2 million, or
18.3%, in interest income from $6.3 million in the nine months
ended March 31, 2011 to $5.1 million in the nine months ended March
31, 2012. This decrease was partially offset by a decrease of
$533,000, or 31.7%, in interest expense from $1.7 million in the
nine months ended March 31, 2011 to $1.2 million in the nine months
ended March 31, 2012. The decrease in interest income was the
result of a decrease in the average yield on interest-earning
assets from 4.36% during the nine months ended March 31, 2011 to
3.72% during the nine months ended March 31, 2012, and by a
decrease in the average balance of interest-earning assets of $8.3
million from $192.3 million in 2011 to $184.0 million in 2012. The
decrease in interest expense was the result of a decrease in the
average cost of interest-bearing liabilities from 1.29% in the 2011
period to 0.93% in the 2012 period, and by a decrease of $8.9
million in the average balances of interest-bearing liabilities
from $173.8 million in the 2011 period to $164.9 million, in the
comparable 2012 period.
There was a $282,000 provision for loan losses during the nine
months ended March 31, 2012 compared to a $716,000 provision for
loan losses during the nine months ended March 31, 2011. The
$434,000 decrease was primarily the result of a decrease in
non-performing loans and classified loans.
For the nine months ended March 31, 2012, non-interest income
totaled $136,000, compared to $389,000 for the nine months ended
March 31, 2011 reflecting a net decrease of $253,000, or 65.0%. In
both the 2012 and the 2011 nine month periods, there were large
provisions for loss on real estate owned of $695,000 and $702,000,
respectively. Service charges and other fee income decreased by
$144,000, or 18.5%, to $635,000 for the 2012 period compared to
$779,000 for the 2011 period. Gain on the sale of loans decreased
by $12,000, or 58.5%, to $8,000 in the 2012 period from $20,000
during the 2011 period. Gain on the sale of investments decreased
by $187,000, or 62.4%, to $113,000 in the 2012 period from $300,000
in the 2011 period. Net loss on the sale of other real estate
increased by $2,000, or 6.6%, to a loss of $27,000 in the 2012
period compared to a loss of $25,000 in the 2011 period. Other
non-interest income decreased by $13,000, or 23.0%, to $43,000 in
2012 from $56,000 in 2011. These negative changes were partially
offset by $56,000 in income from BOLI and a $41,000 positive change
in net gain/(loss) on the sale of repossessed assets, from a loss
of $38,000 during the 2011 period to a gain of $3,000 in the 2012
period.
Non-interest expense decreased by $563,000 from $5.9 million
during the nine months ended March 31, 2011 to $5.3 million for the
nine months ended March 31, 2012. This decline was the result
of a decrease of $370,000 in other non-interest expense, a decrease
of $236,000 in deposit insurance premiums, a decrease of $26,000 in
professional fees and a decrease of $18,000 in occupancy and
equipment expense. These decreases were partially offset by an
increase of $88,000 in compensation and benefits. The decrease in
other non-interest expense was due primarily to a $300,000
liability recorded in the 2011 period for the possible settlement
of the lawsuit discussed earlier. Expense related to this matter
totaled $74,000 during the 2012 period. The decrease in
deposit insurance premiums was the result of an adjustment of
$213,000 in the balance of the prepaid deposit insurance premiums
due to deposit shrinkage. This adjustment was made in the quarter
ended December 31, 2011.
Total consolidated assets at March 31, 2012 were $197.1 million,
compared to $209.3 million at June 30, 2011, representing a
decrease of $12.2 million, or 5.9%. Stockholders' equity at
March 31, 2012 was $16.6 million, or 8.4% of assets, compared with
$18.1 million, or 8.6% of assets, at June 30, 2011. Book value
per common share decreased to $10.69 at March 31, 2012 from $11.65
at June 30, 2011. The decrease in stockholders' equity was
primarily attributable to the net loss of $1.5 million for the nine
month period ended March 31, 2012. The net loss was partially
offset by an increase of $46,000, net of taxes, during the nine
months ended March 31, 2012 in the market value of
available-for-sale securities.
Net loans receivable decreased $499,000, or 0.5%, to $95.3
million at March 31, 2012 from $95.8 million at June 30, 2011.
While there was a decrease in loans during the nine months ended
March 31, 2012, it was a much smaller decrease than the Company has
experience over the last several years. This is the result of an
increase in loan originations, a significant reduction in
foreclosures and repossessions, and fewer early payoffs and pay
downs. Customer deposits decreased $10.8 million, or 6.0%, from
$180.7 million as of June 30, 2011 to $169.9 million as of March
31, 2012. The decrease was primarily the result of a reduction
in account balances of one large commercial customer. Retail
repurchase agreement balances increased by $216,000, or 3.4%, from
$6.4 million at June 30, 2011 to $6.6 million at March 31,
2012.
Non-performing assets decreased during the first nine months of
fiscal 2012 by $2.9 million, or 27.7%, from $10.5 million at June
30, 2011 to $7.6 million at March 31, 2012. The decrease in
non-performing assets consisted of a decrease of $905,000 in
non-accrual loans and $2.8 million in real estate owned and other
repossessed assets, which were partially offset by an increase of
$800,000 in impaired loans not past due. Based on its analysis of
delinquent loans, non-performing loans and classified loans,
management believes that the Company's allowance for loan losses of
$1.9 million at March 31, 2012 was adequate to absorb known and
inherent risks in the loan portfolio at that date. At March
31, 2012 the allowance for loan losses was 34.9% of non-performing
loans, including impaired loans not past due, as compared to 35.7%
at June 30, 2011.
As was discussed in the Company's Annual Report on Form 10-K,
filed with the Securities and Exchange Commission on October 13,
2011, the Company is operating under a Cease and Desist Order
("Order") with the Board of Governors of the Federal Reserve System
and the Bank is operating under an informal agreement ("Agreement")
with the Director of the Division of Finance of the State of
Missouri and the FDIC. In management's opinion, all items required
by the Company and the Bank under their respective Order and
Agreement through the nine month period ended March 31, 2012 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 Company's Order to Cease and Desist and the Bank's Agreement
with the Director of the Division of Finance of the State of
Missouri, 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, including but not limited to the Form 10-K for the year ended
June 30, 2011 and the Form 10-Q for the quarter ended March 31,
2012. 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
March 31, |
Nine Months Ended
March 31, |
|
2012 |
2011 |
2012 |
2011 |
Operating Data: |
|
|
|
|
|
|
|
|
|
Total interest income |
$ 1,641 |
$ 1,996 |
$ 5,139 |
$ 6,293 |
Total interest expense |
365 |
485 |
1,151 |
1,684 |
Net interest income |
1,276 |
1,511 |
3,988 |
4,609 |
Provision for loan losses |
208 |
245 |
282 |
716 |
Net interest income (loss) after
provision for loan losses |
1,068 |
1,266 |
3,706 |
3,893 |
Non-interest income (loss) |
174 |
366 |
136 |
389 |
Non-interest expense |
1,826 |
1,953 |
5,291 |
5,855 |
Income (loss) before income
tax |
(584) |
(321) |
(1,449) |
(1,753) |
Income tax expense (benefit) |
-- |
293 |
85 |
580 |
Net loss |
$ (584) |
$ (614) |
$ (1,534) |
$ (2,153) |
Net loss per share-basic |
$ (0.38) |
$ (0.40) |
$ (0.99) |
$ (1.39) |
Net loss per share-diluted |
$ (0.38) |
$ (0.40) |
$ (0.99) |
$ (1.39) |
Financial Condition
Data: |
At March 31,
2012 |
At June 30,
2011 |
|
|
|
Total assets |
$ 197,088 |
$ 209,344 |
Loans receivable, net |
95,317 |
95,817 |
Non-performing assets |
7,569 |
10,474 |
Cash and cash equivalents |
12,817 |
24,799 |
Investment securities |
76,142 |
75,166 |
Deposits |
169,868 |
180,661 |
Borrowed funds |
9,633 |
9,417 |
Stockholders' equity |
16,578 |
18,065 |
Book value per share |
$ 10.69 |
$ 11.65 |
CONTACT: R. Bradley Weaver, CEO - (417) 926-5151
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