FBSI First Bancshares, Inc. (MM)

First Bancshares, Inc. (“Company”), (OTCQB:FBSI), the holding company for First Home Bank (“Bank”), today announced its financial results for the quarter ended September 30, 2016.

For the quarter ended September 30, 2016, the Company had net income of $171,000, or $0.11 per share – diluted, compared to net income of $86,000, or $0.06 per share – diluted for the quarter ended September 30, 2015.  The $85,000 increase in net income for the quarter ended September 30, 2016 compared to the quarter ended September 30, 2015 is attributable to an increase of $107,000 in net interest income and a $7,000 increase in gain on sale of investments.  This was partially offset by a $9,000 decrease in non-interest income and a $20,000 increase in non-interest expenses.

“We are pleased with our continued progress.  The solid increase in quarterly net income compared to the same quarter last year provides support for our fundamental operating plan to increase loan asset volume while maintaining very high asset quality,” said R. Bradley Weaver, Chairman, President and Chief Executive Officer of the Company. “We are very proud of the improvements we have made and continue to make.  Through the commitment of our employees to our principles of sound banking practices, we continue to improve our earnings and balance sheet,” Weaver concluded.

During the quarter ended September 30, 2016, net interest income increased by $107,000, or 7.64%, to $1.51 million from $1.40 million during the same quarter in 2015.  This increase in net interest income was the result of an increase in interest income of $137,000, or 8.15% and was partially offset by an increase of $30,000, or 10.68%, in interest expense.  The increase in interest income is due to the growth in the Company’s loan portfolio.  The increase in interest expense was primarily the result of an increase in the Company’s deposit portfolio.

There was no provision for loan losses for the quarters ended September 30, 2016 and September 30, 2015.  Classified loans at September 30, 2016 were $696,000 compared to $1.54 million at September 30, 2015.  The allowance for loan losses at September 30, 2016 was $1.69 million, or 1.26% of total loans, compared to $1.70 million, or 1.439% of total loans at September 30, 2015.

For the quarter ended September 30, 2016, the Company had a gain on sale of investments of $7,000.  During the quarter ended September 30, 2015, the Company did not sell any investments. The $7,000 gain realized during the current quarter represents Agency securities that were called at par during the quarter that the Company had purchased at a discount.

Non-interest income decreased by $9,000, or 3.61% to $240,000 for the quarter ended September 30, 2016 from $249,000 for the same quarter in 2015.  The decrease was the result of a decrease in gains on sale of OREO of $10,000.  This was partially offset by an increase of $1,000 in other non-interest income items.

Non-interest expense increased by $20,000, or 1.35%, to $1.50 million for the quarter ended September 30, 2016 from $1.48 million for the quarter ended September 30, 2015.  The increase in non-interest expense reflects an increase of $41,000 in salaries and employee benefits, an increase of $13,000 in data processing fees and an increase of $9,000 in other non-interest expense items.  These increases were partially offset by a $43,000 decrease in professional fees consisting of legal, accounting and consulting service related expenses.

For the nine months ended September 30, 2016, the Company had net income of $491,000, or $0.32 per share – diluted, compared to net income of $2.72 million, or $1.76 per share – diluted for the nine months ended September 30, 2015.  The $2.23 million decrease in net income for the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015 is attributable to an increase of $129,000 in non-interest expenses and a $251,000 tax expense for the nine months ended September 30, 2016 versus an income tax benefit of $2.30 million for the nine months ended September 30, 2015.  This was partially offset by an increase of $322,000 in net interest income, a decrease of $60,000 in provision for loan losses, an increase of $25,000 in gain on sale of investments and a $43,000 increase in non-interest income.

There was no provision for loan losses for the nine months ended September 30, 2016 compared to a $60,000 provision expense during the same period in 2015.  The decrease in the provision for loan losses during the nine months ended September 30, 2016 is attributable to our commitment to high quality assets in our loan portfolio.

During the nine months ended September 30, 2016, the Company had a gain on sale of investments of $14,000 compared to a loss on sale of investments of $11,000 during the same period in 2015.

Non-interest income increased by $43,000, or 6.23%, to $733,000 for the nine months ended September 30, 2016, compared to $690,000 for the same period in 2015.  The increase in non-interest income reflects an increase of $34,000 in service charges on deposit accounts and a $9,000 increase in other non-interest income items.

Non-interest expense increased by $129,000, or 2.95%, to $4.51 million for the nine months ended September 30, 2016, compared to $4.38 million for the nine months ended September 30, 2015.  The increase is attributable to an increase in salaries and employee benefits of $112,000, a $42,000 increase in losses and expenses on debit cards, an increase of $48,000 in data processing fees and an increase of $34,000 in debit card expenses related to converting to EMV chip cards.  This was partially offset by a decrease of $18,000 in premises and fixed assets, a decrease of $85,000 in professional fees consisting of legal, accounting and consulting service related expenses and a $4,000 decrease in other non-interest expenses.

Total consolidated assets at September 30, 2016 were $220.42 million, compared to $213.03 million at December 31, 2015, representing an increase of $7.39 million, or 3.47%.  Stockholders’ equity at September 30, 2016 was $20.07 million, or 9.10% of assets, compared with $18.55 million, or 8.71% of assets at December 31, 2015.  Book value per common share increased to $12.96 at September 30, 2016 from $11.98 at December 31, 2015.  The $1.52 million, or 8.17% increase in stockholders’ equity was attributable to an increase in the unrealized gains on available-for-sale securities, net of income taxes of $1.03 million and by net income of $491,000 million for the nine months ended September 30, 2016.

Net loans receivable increased $8.04 million, or 6.45%, to $132.56 million at September 30, 2016 from $124.53 million at December 31, 2015.  Loan growth continues to be the primary focus to improve earnings.  This focus is tempered with the company’s continuous attention to high quality underwriting and strong asset quality management.  The goal is to increase the size of the loan portfolio without any sacrifice to quality.  Nonperforming loans at September 30, 2016 were $86,000, or 0.06% of net loans, compared to $697,000 in nonperforming loans, or 0.56% of net loans at December 31, 2015.  Deposits increased $6.66 million, or 3.77% to $183.37 million at September 30, 2016 from $176.71 million at December 31, 2015.  FHLB advances decreased $3.0 million or 23.08%, to $10.00 million at September 30, 2016 from $13.0 million at December 31, 2015.

First Bancshares, Inc. is the holding company for First Home Bank, a FDIC-insured commercial bank chartered by the State of Missouri that conducts business from its home office in Mountain Grove, Missouri, and seven full service offices in Marshfield, Ava, Gainesville, Sparta, Springfield, Crane, and Kissee Mills, Missouri.

The Company and its wholly-owned subsidiary, First Home Bank, may from time to time make written or oral “forward-looking statements” in its reports to shareholders, 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. 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								Nine Months Ended
		September 30,								September 30,
			2016				2015				2016				2015
Operating Data:
Total interest income		$	1,819			$	1,682			$	5,412			$	5,004
Total interest expense			311				281				909				823
Net interest income			1,508				1,401				4,503				4,181
Provision for loan losses			-				-				-				60
Net interest income after provision for loan losses			1,508				1,401				4,503				4,121
Gain (loss) on sale of investments			7				-				14				(11	)
Non-interest income			240				249				733				690
Non-interest expense			1,497				1,477				4,508				4,379
Income before taxes			258				173				742				421
Income tax expense (benefit)			87				87				251				(2,303	)
Net income		$	171			$	86			$	491			$	2,724
Earnings per share		$	0.11			$	0.06			$	0.32			$	1.76
		At				At
		September 30,				December 31,
Financial Condition Data:			2016				2015
Cash and cash equivalents		$	7,076			$	9,573
(excludes CDs)
Investment securities			7,541				64,835
(includes CDs)
Loans receivable, net			132,562				124,527
Total assets			220,423				213,030
Deposits			183,370				176,713
Repurchase agreements			6,281				4,127
FHLB advances			10,000				13,000
Stockholders' equity			20,065				18,550
Book value per share		$	12.96			$	11.98

Contact:  
R. Bradley Weaver 
Chairman, President and CEO 
(417) 926-5151