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Share Name | Share Symbol | Market | Type |
---|---|---|---|
First Bancshares Inc | NASDAQ:FBMS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 24.15 | 9.66 | 38.39 | 0 | 09:47:47 |
The First Bancshares, Inc. (“FBMS” or “the Company”) (NASDAQ: FBMS), holding company for The First, A National Banking Association, (www.thefirstbank.com) reported today net income available to common shareholders of $12.3 million for the quarter ended September 30, 2019, an increase of $7.1 million, or 137.7%, compared to $5.2 million for the quarter ended September 30, 2018, and an increase of $0.3 million, or 2.4%, compared to the second quarter of 2019. Operating net earnings increased 59.9%, or $4.8 million, for the quarter ended September 30, 2019, totaling $12.8 million as compared to $8.0 million for the third quarter of 2018, and increased $0.8 million, or 6.4%, as compared to $12.1 million for the second quarter of 2019. Operating net earnings for the third quarter of 2019 excludes merger-related costs of $0.6 million, net of tax. Operating net earnings for the third quarter of 2018 excludes merger-related costs of $3.0 million, net of tax, and income in the form of financial assistance grant from the U. S. Department of Treasury of $0.2 million, net of tax. Operating net earnings for the second quarter of 2019 excludes merger-related costs of $0.1 million, net of tax.
For the third quarter of 2019, fully diluted earnings per share were $0.71, compared to $0.39 for the third quarter of 2018 and $0.69 for the second quarter of 2019. Excluding the impact of the merger-related costs and income described above, fully diluted operating earnings per share for the third quarter of 2019 were $0.74 as compared to $0.61 for the third quarter of 2018, and $0.70 for the second quarter of 2019. Fully diluted earnings per share for the third quarter of 2019 include the purchase of 13,873 shares related to the Company’s $20 million share repurchase program. Fully diluted earnings per share for second quarter of 2019 include the purchase of 143,566 shares related to the Company’s $20 million share repurchase program.
Highlights for the Quarter:
M. Ray “Hoppy” Cole, President and Chief Executive Officer, commented, “We are pleased with the continued improvement in the earnings of our Company. The substantial increase in operating earnings year over year and on a linked quarter basis are reflective of our teams focus on the successful integration of multiple acquisitions over the last year. During the quarter we announced our upcoming merger with First Florida Bancorp. First Florida is a high performing, well run bank headquartered in Destin. Our partnership is a perfect strategic fit adding additional market share in Florida and opening up new markets for us in Destin, Panama City and the surrounding areas.
Balance Sheet
Consolidated assets increased $9.4 million to $3.482 billion at September 30, 2019 from $3.473 billion at June 30, 2019 primarily related to an increase in investment securities offset by an increase in borrowings due to the seasonality of the public fund portfolio.
Total average loans were $2.343 billion at September 30, 2019, as compared to $2.338 billion at June 30, 2019, and $1.721 billion at September 30, 2018, representing an increase of $5.8 million, or 0.25%, for the sequential quarter comparison, and an increase of $622.5 million, or 36.2%, as compared to September 30, 2018. The acquisitions of FMB Banking Corporation (“FMB”) and FPB Financial Corp (“FPB”), accounted for $530.2 million, net of fair value marks, of the total increase in average loans as compared to the third quarter of 2018.
Total average deposits were $2.766 billion at September 30, 2019, as compared to $2.863 billion at June 30, 2019, and $2.070 billion at September 30, 2018, representing a decrease of $96.8 million, or 3.4%, for the sequential quarter comparison, and an increase of $695.9 million, or 33.6%, as compared to September 30, 2018. The acquisitions of FMB and FPB accounted for $719.6 million of the total increase in average deposits as compared to September 30, 2018. The decrease in average deposits of $96.8 million during the third quarter of 2019 was largely due to decreases in public fund deposits of $73.1 million, which is attributable to the seasonality of public funds.
Asset Quality
Nonperforming assets totaled $47.3 million at September 30, 2019, an increase of $9.3 million compared to $38.0 million at June 30, 2019 and an increase of $23.9 million compared to $23.4 million at September 30, 2018. Nonaccrual loans and loans past due 90 days and over still accruing increased $10.7 million while other real estate decreased $1.2 million for the linked quarter. The majority of the increase in the year-over-year comparison was related to acquired loans. The ratio of the allowance for loan and leases losses (ALLL) to total loans was 0.56% at September 30, 2019, 0.51% at June 30, 2019 and 0.56% at September 30, 2018. The ratio of annualized net charge-offs (recoveries) to total loans was 0.004% for the quarter ended September 30, 2019 compared to (0.01%) for the quarter ended June 30, 2019 and 0.03% for the quarter ended September 30, 2018.
Third Quarter 2019 vs. Third Quarter 2018 Earnings Comparison
Net income available to common shareholders for the third quarter of 2019 totaled $12.3 million compared to $5.2 million for the third quarter of 2018, an increase of $7.1 million or 137.7%.
Operating net earnings for the third quarter of 2019 totaled $12.8 million compared to $8.0 million for the third quarter of 2018, an increase of $4.8 million or 59.9%. The calculation of operating net earnings excludes the merger-related costs for each quarter and the income for the third quarter of 2018 as discussed above.
Net interest income for the third quarter of 2019 was $30.5 million, an increase of $8.8 million when compared to the third quarter of 2018. The increase was due to interest income earned on a higher volume of loans. Fully tax equivalent (“FTE”) net interest income totaled $30.7 million and $21.9 million for the third quarter of 2019 and 2018, respectively. FTE net interest income increased $8.8 million in the prior year quarterly comparison due to increased loan volume. Purchase accounting adjustments accounted for $0.8 million of the difference in net interest income for the third quarter comparisons. Third quarter 2019 FTE net interest margin of 4.05% included 19 basis points related to purchase accounting adjustments compared to 3.97% for the same quarter in 2018, which included 11 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin remained unchanged at 3.86% in prior year quarterly comparison.
Non-interest income increased $2.0 million for the third quarter of 2019 as compared to the third quarter of 2018 due to increased service charges and interchange fee income of $1.5 million primarily based on the increased deposit base due to the acquisitions. Mortgage income increased $0.7 million in prior year quarterly comparison. Non-interest income for the third quarter of 2018 included the Financial Assistance Award of $0.2 million from the U.S. Department of the Treasury as a result of our designation as a Community Development Financial Institution.
Third quarter 2019 non-interest expense was $20.8 million, an increase of $1.0 million, or 5.3% as compared to the third quarter of 2018. Excluding the decrease in acquisition charges of $3.4 million for the third quarter of 2019, non-interest expense increased $4.4 million in the third quarter of 2019, of which $3.4 million was attributable to the operations of FMB and FPB, as compared to third quarter of 2018.
Investment securities totaled $640.8 million, or 18.4% of total assets at September 30, 2019, versus $444.0 million, or 17.7% of total assets at September 30, 2018. The average balance of investment securities increased $174.1 million in prior year quarterly comparison, primarily as a result of the acquisitions. The average tax equivalent yield on investment securities increased 22 basis points to 3.24% from 3.02% in prior year quarterly comparison. The investment portfolio had a net unrealized gain of $13.9 million at September 30, 2019 as compared to a net unrealized loss of $8.4 million at September 30, 2018.
The FTE average yield on all earning assets increased 26 basis points in prior year quarterly comparison, from 4.68% for the third quarter of 2018 to 4.94% for the third quarter of 2019. Average interest expense increased 25 basis points from 0.92% for the third quarter of 2018 to 1.17% for the third quarter of 2019 due primarily to increased interest-bearing deposit accounts. Cost of all deposits averaged 76 basis points for the third quarter of 2019 compared to 53 basis points for the third quarter of 2018.
Third Quarter 2019 vs Second Quarter 2019 Earnings Comparison
Net income available to common shareholders for the third quarter of 2019 increased $0.3 million, or 2.4% to $12.3 million compared to $12.0 million for the second quarter of 2019. For the third quarter of 2019, fully diluted earnings per share were $0.71, compared to $0.69 for the second quarter of 2019.
Operating net earnings for the third quarter of 2019 compared to the second quarter of 2019 increased $0.8 million or 6.4% from $12.1 million to $12.8 million. Operating net earnings exclude the merger-related costs for the third and second quarters of 2019 as discussed above. Excluding the impact of the merger-related costs described above, fully diluted operating earnings per share for the third quarter of 2019 were $0.74 as compared to $0.70 for the second quarter of 2019.
Net interest income for the third quarter of 2019 was $30.5 million as compared to $30.8 million for the second quarter of 2019, a decrease of $0.3 million. FTE net interest income decreased $0.3 million to $30.7 million from $31.0 million in sequential-quarter comparison. Both comparison decreases were due to the reduction in purchase accounting adjustments. Third quarter 2019 FTE net interest margin of 4.05% included 19 basis points related to purchase accounting adjustments compared to 4.07% for the second quarter in 2019, which included 23 basis points related to purchase accounting adjustments. Excluding the purchase accounting adjustments, the core net interest margin increased 2 basis points in sequential quarter comparison.
Investment securities totaled $640.8 million, or 18.4% of total assets at September 30, 2019, versus $622.8 million, or 17.9% of total assets at June 30, 2019. The average balance of investment securities remained unchanged in sequential-quarter comparison. The average tax equivalent yield on investment securities decreased 16 basis points to 3.24% from 3.40% in sequential-quarter comparison. The investment portfolio had a net unrealized gain of $13.9 million at September 30, 2019 as compared to a net unrealized gain of $12.6 million at June 30, 2019.
The FTE average yield on all earning assets decreased in sequential-quarter comparison from 4.96% to 4.94%. Average interest expense increased 1 basis point from 1.16% for the second quarter of 2019 to 1.17% for the third quarter of 2019. Cost of all deposits averaged 76 basis points for the third quarter of 2019 compared to 77 basis points for the second quarter of 2019.
Non-interest income increased $0.4 million in sequential-quarter comparison resulting from increased mortgage income and interchange fee income.
Non-interest expense for the third quarter of 2019 was $20.8 million compared to $20.9 million for the second quarter of 2019. Excluding acquisition charges for each quarter, non-interest expense decreased $0.7 million in sequential-quarter comparison, of which $0.4 million is attributable to the savings in operational costs associated to FPB which was acquired in the first quarter.
Year-to-Date Earnings Comparison
In year-over-year comparison, net income available to common shareholders increased $17.5 million, or 122.0%, from $14.4 million for the nine months ended September 30, 2018 to $31.9 million for the same period ended September 30, 2019. Operating net earnings increased $14.0 million or 66.9% from $20.8 million for the nine months ended September 30, 2018 to $34.8 million for the same period ended September 30, 2019. Operating net earnings excludes merger-related costs of $3.1 million, net of tax, and financial assistance grants of $0.2 million, net of tax, for the year-to-date period ended September 30, 2019, and merger-related costs of $7.3 million, net of tax, and financial assistance grants of $0.9 million, net of tax, for the year-to-date period ended September 30, 2018.
Net interest income increased $28.7 million in year-over-year comparison, primarily due to interest income earned on a higher volume of loans.
Non-interest income was $19.4 million at September 30, 2019, an increase of $5.2 million in year-over-year comparison consisting of increases in service charges on deposit accounts, interchange fee income, mortgage income, as well as other charges and fees.
Non-interest expense was $63.6 million at September 30, 2019, an increase of $9.5 million in year-over-year comparison of which $3.5 million is related to the acquisition and operations of Southwest, Sunshine, FMB and FPB. The remaining increase of $6.0 million in expenses for the legacy bank are related to salaries and employee benefits of $2.5 million and other expenses of $3.5 million.
Declaration of Cash Dividend
The Company announced that its Board of Directors declared a cash dividend of $0.08 per share to be paid on its common stock on November 22, 2019 to shareholders of record as of the close of business on November 8, 2019.
About The First Bancshares, Inc.
The First Bancshares, Inc., headquartered in Hattiesburg, Mississippi, is the parent company of The First, A National Banking Association. Founded in 1996, The First has operations in Mississippi, Louisiana, Alabama, Florida and Georgia. The Company’s stock is traded on the NASDAQ Global Market under the symbol FBMS. Information is available on the Company’s website: www.thefirstbank.com.
Non-GAAP Financial Measures
Our accounting and reporting policies conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, certain non-GAAP measures are used by management to supplement the evaluation of our performance. This press release includes operating net earnings, operating earnings per share, fully tax equivalent net interest income, total tangible common equity, tangible book value per common share and certain ratios derived from these non-GAAP financial measures. The Company believes that the non-GAAP financial measures included in this press release allow management and investors to understand and compare results in a more consistent manner for the periods presented in this press release. Non-GAAP financial measures should be considered supplemental and not a substitute for the Company’s results reported in accordance with GAAP for the periods presented, and other bank holding companies may define or calculate these measures differently. These non-GAAP financial measures should not be considered in isolation and do not purport to be an alternative to net income, earnings per share, net interest income, book value or other GAAP financial measures as a measure of operating performance. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure is provided in this press release following the Condensed Consolidated Financial Information (unaudited).
Forward Looking Statements
This news release contains statements regarding the projected performance of The First Bancshares, Inc. and its subsidiary. These statements constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act. Actual results may differ materially from the projections provided in this release since such projections involve significant known and unknown risks and uncertainties. Factors that might cause such differences include, but are not limited to: competitive pressures among financial institutions increasing significantly; economic conditions, either nationally or locally, in areas in which the Company conducts operations being less favorable than expected; interest rate risk; legislation or regulatory changes which adversely affect the ability of the consolidated Company to conduct business combinations or new operations; and risks related to the proposed acquisition of FFB and the acquisitions of Southwest, Sunshine, FMB and FPB, including the risk that the proposed acquisition of FFB does not close when expected or at all because conditions to closing are not satisfied on a timely basis or at all, the terms of the proposed transactions with FFB need to be modified to satisfy such conditions, and that the anticipated benefits from the transactions with Southwest, Sunshine, FMB, FPB and FFB are not realized in the time frame anticipated or at all as a result of changes in general economic and market conditions or other unexpected factors or events. These and other factors that could cause results to differ materially from those described in the forward-looking statements, as well as a discussion of the risks and uncertainties that may affect our business, can be found in our Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission, which are available on the SEC’s website, http://www.sec.gov. The Company disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments.
FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
EARNINGS DATA
Quarter
Ended
9/30/19
Quarter
Ended
6/30/19
Quarter
Ended
3/31/19
Quarter
Ended
12/31/18
Quarter
Ended
9/30/18
Total Interest Income
$ 37,241
$ 37,571
$ 33,273
$ 30,555
$ 25,628
Total Interest Expense
6,782
6,799
6,142
5,285
3,959
Net Interest Income
30,459
30,772
27,131
25,270
21,669
FTE net interest income*
30,739
31,040
27,388
25,524
21,925
Provision for loan losses
974
791
1,123
574
412
Non-interest income
7,103
6,716
5,554
6,396
5,074
Non-interest expense
20,825
20,891
21,893
22,249
19,786
Earnings before income taxes
15,763
15,806
9,669
8,843
6,545
Income tax expense
3,491
3,823
2,034
1,982
1,383
Net income available to common shareholders
$ 12,272
$ 11,983
$ 7,635
$ 6,861
$ 5,162
PER COMMON SHARE DATA
Basic earnings per share
$ 0.72
$ 0.70
$ 0.49
$ 0.48
$ 0.39
Diluted earnings per share
0.71
0.69
0.48
0.48
0.39
Diluted earnings per share, operating*
0.74
0.70
0.63
0.64
0.61
Quarterly dividends per share
.08
.08
.07
.05
.05
Book value per common share at end of period
27.92
27.22
26.30
24.49
22.09
Tangible book value per common share at period end*
19.39
18.72
17.79
16.88
17.10
Market price at end of period
32.30
30.34
30.90
30.91
39.05
Shares outstanding at period end
17,125,035
17,129,915
17,272,731
14,830,598
13,074,516
Weighted average shares outstanding:
Basic
17,131,080
17,182,049
15,646,476
14,247,555
13,072,455
Diluted
17,267,953
17,311,626
15,770,622
14,371,562
13,192,207
AVERAGE BALANCE SHEET DATA
Total assets
$3,439,202
$3,460,394
$3,181,761
$2,812,212
$2,470,607
Loans and leases
2,343,392
2,337,583
2,167,495
1,959,179
1,720,884
Total deposits
2,765,816
2,862,653
2,599,842
2,296,966
2,069,910
Total common equity
470,024
454,965
390,217
328,250
284,839
Total tangible common equity*
324,619
308,303
262,553
222,402
219,077
SELECTED RATIOS
Annualized return on avg assets
1.43%
1.39%
0.96%
0.98%
0.84%
Annualized return on avg assets, operating*
1.49%
1.39%
1.25%
1.30%
1.30%
Annualized return on avg common equity, operating*
10.91%
10.60%
10.18%
11.14%
11.26%
Annualized return on avg tangible common equity, oper*
15.80%
15.64%
15.13%
16.44%
14.64%
Average loans to average deposits
84.73%
81.66%
83.37%
85.29%
83.14%
FTE Net Interest Margin*
4.05%
4.07%
3.89%
4.08%
3.97%
Efficiency Ratio
55.03%
55.33%
66.46%
69.69%
73.28%
Efficiency Ratio, operating*
53.17%
55.09%
57.21%
59.06%
58.76%
CREDIT QUALITY
Allowance for loan losses (ALLL) as a % of total loans
0.56%
0.51%
0.48%
0.49%
0.56%
Nonperforming assets to tangible equity + ALLL
13.71%
11.42%
12.32%
13.17%
10.05%
Nonperforming assets to total loans + OREO
2.00%
1.61%
1.67%
1.66%
1.33%
Annualized QTD net charge-offs (recoveries) to total loans
0.004%
(0.01%)
(0.008%)
0.02%
0.03%
*See reconciliation of Non-GAAP financial measures
FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
BALANCE SHEET
Sept 30,
2019
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Assets
Cash and cash equivalents
$ 159,990
$ 165,984
$ 248,576
$ 159,107
$ 122,371
Securities available-for-sale
612,002
598,607
598,796
492,701
424,940
Securities held-to-maturity
6,328
6,396
6,397
6,000
6,000
Other investments
22,517
17,819
15,298
16,227
13.104
Total investment securities
640,847
622,822
620,491
514,928
444,044
Loans held for sale
11,104
8,597
6,238
4,838
4,269
Total loans
2,349,986
2,351,998
2,335,348
2,060,422
1,748,483
Allowance for loan losses
(13,043)
(12,091)
(11,235)
(10,065)
(9,765)
Loans, net
2,336,943
2,339,907
2,324,113
2,050,357
1,738,718
Premises and equipment
96,726
97,115
94,624
74,783
62,342
Other Real Estate Owned
9,974
11,205
11,588
10,869
8,453
Goodwill and other intangibles
146,091
145,649
147,150
112,916
65,238
Other assets
80,256
81,305
80,199
76,188
66,355
Total assets
$3,481,931
$3,472,584
$3,532,979
$3,003,986
$2,511,790
Liabilities and Shareholders’ Equity
Non-interest bearing deposits
$ 642,054
$ 645,838
$ 655,900
$ 570,148
$ 430,430
Interest-bearing deposits
2,119,291
2,185,362
2,258,418
1,887,311
1,616,016
Total deposits
2,761,345
2,831,200
2,914,318
2,457,459
2,046,446
Borrowings
136,250
71,250
61,750
85,500
85,508
Subordinated debentures
80,639
80,600
80,561
80,521
75,117
Other liabilities
25,609
23,253
22,003
17,252
15,921
Total liabilities
3,003,843
3,006,303
3,078,632
2,640,732
2,222,992
Total shareholders’ equity
478,088
466,281
454,347
363,254
288,798
Total liabilities and shareholders’ equity
$3,481,931
$3,472,584
$3,532,979
$3,003,986
$2,511,790
FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
EARNINGS STATEMENT
Three Months Ended
9/30/19
6/30/19
3/31/19
12/31/18
9/30/18
Interest Income:
Loans, including fees
$ 31,279
$ 30,912
$ 27,569
$ 25,184
$ 21,824
Investment securities
4,752
5,017
4,339
3,785
3,126
Accretion of purchase accounting adjustments
1,201
1,552
1,235
1,532
583
Other interest income
9
90
130
54
95
Total interest income
37,241
37,571
33,273
30,555
25,628
Interest Expense:
Deposits
5,156
5,377
4,275
3,506
2,740
Borrowings
451
288
546
482
52
Subordinated debentures
1,270
1,188
1,233
1,179
1,125
Accretion of purchase accounting adjustments
(95)
(54)
88
118
42
Total interest expense
6,782
6,799
6,142
5,285
3,959
Net interest income
30,459
30,772
27,131
25,270
21,669
Provision for loan losses
974
791
1,123
574
412
Net interest income after provision for loan losses
29,485
29,981
26,008
24,696
21,257
Non-interest Income:
Service charges on deposit accounts
1,979
1,918
1,831
1,887
1,538
Mortgage Income
1,800
1,559
909
969
1,066
Interchange Fee Income
2,252
2,045
1,652
1,527
1,180
Gain (loss) on securities, net
57
36
38
334
-
Financial Assistance Award/Bank Enterprise Award
-
-
233
950
233
Other charges and fees
1,015
1,158
891
729
1,057
Total non-interest income
7,103
6,716
5,554
6,396
5,074
Non-interest expense (benefit):
Salaries and employee benefits
11,612
11,615
10,697
10,336
9,266
Occupancy expense
2,632
2,532
2,442
2,281
2,163
FDIC premiums
111
426
(52)
369
278
Marketing
62
160
175
173
60
Amortization of core deposit intangibles
796
796
716
750
349
Other professional services
1,140
980
920
452
847
Acquisition charges
705
91
3,179
4,155
4,059
Other non-interest expense
3,767
4,291
3,816
3,733
2,764
Total Non-interest expense
20,825
20,891
21,893
22,249
19,786
Earnings before income taxes
15,763
15,806
9,669
8,843
6,545
Income tax expense
3,491
3,823
2,034
1,982
1,383
Net income available to common shareholders
$ 12,272
$ 11,983
$ 7,635
$ 6,861
$ 5,162
Diluted earnings per common share
$ 0.71
$ 0.69
$ 0.48
$ 0.48
$ 0.39
Diluted earnings per common share, operating*
$ 0.74
$ 0.70
$ 0.63
$ 0.64
$ 0.61
*See reconciliation of Non-GAAP financial measures
FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
EARNINGS STATEMENT
Year to Date
2019
2018
Interest Income:
Loans, including fees
$ 89,760
$ 58,905
Investment securities
14,108
8,968
Accretion of purchase accounting adjustments
3,988
1,201
Other interest income
229
348
Total interest income
108,085
69,422
Interest Expense:
Deposits
14,808
7,076
Borrowings
1,285
659
Subordinated debentures
3,691
1,977
Amortization of purchase accounting adjustments
(61)
91
Total interest expense
19,723
9,803
Net interest income
88,362
59,619
Provision for loan losses
2,888
1,546
Net interest income after provision for loan losses
85,474
58,073
Non-interest Income:
Service charges on deposit accounts
5,728
3,906
Mortgage Income
4,268
3,079
Interchange Fee Income
5,949
3,720
Gain (loss) on securities, net
131
(5)
Financial Assistance Award/Bank Enterprise Award
233
1,150
Other charges and fees
3,064
2,314
Total non-interest income
19,373
14,164
Non-interest expense:
Salaries and employee benefits
33,924
26,557
Occupancy expense
7,606
5,844
FDIC premiums
485
1,013
Marketing
397
210
Amortization of core deposit intangibles
2,308
906
Other professional services
3,040
1,474
Acquisition charges
3,975
9,655
Other non-interest expense
11,874
8,405
Total Non-interest expense
63,609
54,064
Earnings before income taxes
41,238
18,173
Income tax expense
9,348
3,809
Net income available to common shareholders
$ 31,890
$ 14,364
Diluted earnings per common share
$ 1.90
$ 1.13
Diluted earnings per common share, operating*
$ 2.07
$ 1.64
*See reconciliation of Non-GAAP financial measures
FIRST BANCSHARES, INC and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
COMPOSITION OF LOANS
Sept 30,
2019
Percent
of Total
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Percent
of Total
Commercial, financial and agricultural
$ 338,584
14.3%
$ 342,535
$ 340,333
$ 301,182
$ 246,401
14.1%
Real estate – construction
284,103
12.0%
352,826
348,788
298,718
251,240
14.3%
Real estate – commercial
943,218
39.9%
881,831
857,918
776,880
654,040
37.3%
Real estate – residential
724,860
30.7%
713,350
722,611
617,804
529,515
30.2%
Lease Financing Receivable
3,239
0.1%
3,616
3,060
2,891
2,659
0.2%
Obligations of States & subdivisions
16,545
0.7%
17,192
13,734
16,941
16,374
0.9%
Consumer
39,437
1.7%
40,648
48,904
46,006
48,254
2.8%
Loans held for sale
11,104
0.6%
8,597
6,238
4,838
4,269
0.2%
Total loans
$2,361,090
100%
$2,360,595
$2,341,586
$2,065,260
$1,752,752
100%
COMPOSITION OF DEPOSITS
Sept 30,
2019
Percent
of Total
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Percent
of Total
Noninterest bearing
$642,054
23.3%
$645,838
$655,900
$570,148
$430,430
21.0%
NOW and other
926,704
33.5%
999,881
1,062,112
835,434
705,851
34.5%
Money Market/Savings
651,539
23.6%
645,611
647,783
566,276
503,772
24.6%
Time Deposits of less than $250,000
401,559
14.5%
408,164
414,281
384,030
321,619
15.7%
Time Deposits of $250,000 or more
139,489
5.1%
131,706
134,242
101,571
84,774
4.2%
Total Deposits
$2,761,345
100%
$2,831,200
$2,914,318
$2,457,459
$2,046,446
100%
ASSET QUALITY DATA
Sept 30,
2019
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Nonaccrual loans
$ 35,175
$ 25,608
$ 26,502
$ 21,895
$ 13,572
Loans past due 90 days and over
2,116
989
943
1,325
805
Total nonperforming loans
37,291
26,597
27,445
23,220
14,377
Other real estate owned
9,974
11,205
11,588
10,869
8,453
Nonaccrual securities
52
208
208
208
616
Total nonperforming assets
$ 47,317
$38,010
$39,241
$34,297
$ 23,446
Nonperforming assets to total assets
1.36%
1.09%
1.11%
1.14%
0.93%
Nonperforming assets to total loans + OREO
2.00%
1.61%
1.67%
1.66%
1.33%
ALLL to nonperforming loans
34.98%
45.46%
40.94%
43.35%
67.92%
ALLL to total loans
0.56%
0.51%
0.48%
0.49%
0.56%
Quarter-to-date net charge-offs (recs)
$ 23
$ (65)
$ (47)
$ 93
$ 151
Annualized QTD net chg-offs (recs) to loans
0.004%
(0.01%)
(0.008%)
0.02%
0.03%
FIRST BANCSHARES, INC and SUBSIDIARIES Condensed Consolidated Financial Information (unaudited) (in thousands) Yield
Three Months Ended
Three Months Ended
Three Months Ended
Three Months Ended
Three Months Ended
AnalysisSeptember 30, 2019
June 30, 2019
March 31, 2019
December 31, 2018
September 30, 2018
Tax
Tax
Tax
Tax
Tax
Avg
Equivalent
Yield/
Avg
Equivalent
Yield/
Avg
Equivalent
Yield/
Avg
Equivalent
Yield/
Avg
Equivalent
Yield/
Balance
interest
Rate
Balance
interest
Rate
Balance
interest
Rate
Balance
interest
Rate
Balance
interest
Rate
Taxable securities$ 494,184
$ 3,924
3.18%
$ 497,988
$ 4,227
3.40%
$ 435,576
$ 3,581
3.29%
$ 369,820
$ 2,808
3.04%
$ 331,601
$ 2,369
2.86%
Tax-exempt securities127,750
1,108
3.47%
124,367
1,058
3.40%
117,831
1,015
3.45%
114,055
1,003
3.52%
116,235
1,013
3.49%
Total investment securities621,934
5,032
3.24%
622,355
5,285
3.40%
553,407
4,596
3.32%
483,875
3,811
3.15%
447,836
3,382
3.02%
FFS & Int bearing dep-
-
in other banks71,165
9
0.05%
89,936
90
0.40%
94,778
130
0.55%
57,655
282
1.96%
42,174
95
0.90%
Loans2,343,392
32,480
5.54%
2,337,583
32,464
5.56%
2,167,495
28,804
5.32%
1,959,179
26,716
5.45%
1,720,884
22,407
5.21%
Total Interest earning assets3,036,491
37,521
4.94%
3,049,874
37,839
4.96%
2,815,680
33,530
4.76%
2,500,709
30,809
4.93%
2,210,894
25,884
4.68%
Other assets402,711
410,520
366,081
311,503
259,713
Total assets$ 3,439,202
$ 3,460,394
$ 3,181,761
$ 2,812,212
$ 2,470,607
Interest-bearing liabilities: Deposits$ 2,140,419
$ 5,061
0.95%
$ 2,231,462
$ 5,323
0.95%
$ 2,024,718
$ 4,363
0.86%
$ 1,776,780
$ 3,615
0.81%
$ 1,629,195
$ 2,782
0.68%
Repo-
-
0.00%
-
-
0.00%
-
-
0.00%
-
-
0.00%
-
-
0.00%
Fed funds purchased6,708
11
0.66%
5,450
30
2.20%
150
5
13.33%
1,455
18
4.95%
1,893
27
5.71%
FHLB88,533
440
1.99%
32,310
258
3.19%
86,119
541
2.51%
92,352
465
2.01%
22,469
25
0.45%
Subordinated debentures80,619
1,270
6.30%
80,579
1,188
5.90%
80,540
1,233
6.12%
75,391
1,187
6.30%
75,124
1,125
5.99%
Total interest bearing liabilities2,316,279
6,782
1.17%
2,349,801
6,799
1.16%
2,191,527
6,142
1.12%
1,945,978
5,285
1.09%
1,728,681
3,959
0.92%
Other liabilities652,899
655,628
600,017
537,984
457,087
Shareholders' equity470,024
454,965
390,217
328,250
284,839
Total liabilities and shareholders' equity$ 3,439,202
$ 3,460,394
$ 3,181,761
$ 2,812,212
$ 2,470,607
Net interest income (FTE)*$ 30,739
3.77%
$ 31,040
3.81%
$ 27,388
3.64%
$ 25,524
3.84%
$ 21,925
3.77%
Net interest margin (FTE)*4.05%
4.07%
3.89%
4.08%
3.97%
Core net interest margin*3.86%
3.84%
3.71%
3.84%
3.86%
*See reconciliation for Non-GAAP financial measures
FIRST BANCSHARES, INC and SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (unaudited)
(in thousands except per share data)
Three Months Ended
Per Common Share Data
Sept 30,
2019
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Book value per common share
$ 27.92
$ 27.22
$ 26.30
$ 24.49
$ 22.09
Effect of intangible assets per share
8.53
8.50
8.51
7.61
4.99
Tangible book value per common share
$ 19.39
$ 18.72
$ 17.79
$ 16.88
$ 17.10
Diluted earnings per share
$ 0.71
$ 0.69
$ 0.48
$ 0.48
$ 0.39
Effect of acquisition charges
0.04
0.01
0.21
0.29
0.31
Tax on acquisition charges
(0.01)
-
(0.05)
(0.07)
(0.08)
Effect of gain on sale of securities
-
-
-
(0.02)
-
Tax on gain on sale
-
-
-
.01
-
Effect of Treasury awards
-
-
(0.01)
(0.07)
(0.02)
Tax on Treasury awards
-
-
-
0.02
0.01
Diluted earnings per share, operating
$ 0.74
$ 0.70
$ 0.63
$ 0.64
$ 0.61
Year to Date
2019
2018
Diluted earnings per share
$ 1.90
$ 1.13
Effect of acquisition charges
0.24
0.76
Tax on acquisition charges
(0.06)
(0.18)
Effect of gain on sale of securities
-
-
Tax on gain on sale
-
-
Effect of Treasury awards
(0.01)
(0.09)
Tax on Treasury awards
-
0.02
Diluted earnings per share, operating
$ 2.07
$ 1.64
Year to Date
2019
2018
Net income available to common shareholders
$ 31,890
$ 14,364
Acquisition charges
3,975
9,655
Tax on acquisition charges
(887)
(2,311)
Gain on sale of securities
-
-
Tax on gain on sale
-
-
Treasury awards
(233)
(1,150)
Tax on Treasury awards
59
290
Net earnings available to common shareholders, operating
$ 34,804
$ 20,848
Three Months Ended
Average Balance Sheet Data
Sept 30,
2019
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Total average assets A
$3,439,202
$3,460, 394
$3,181,761
$2,812,212
$2,470,607
Total average earning assets B
3,036,492
$3,049,874
$2,815,680
$2,500,709
$2,210,894
Common Equity C
$ 470,024
$ 454,965
$ 390,217
$ 328,250
$ 284,839
Less intangible assets
145,405
146,662
127,664
105,848
65,762
Tangible common equity D
$ 324,619
$ 308,303
$ 262,553
$ 222,402
$ 219,077
Three Months Ended
Net Interest Income Fully Tax Equivalent
Sept 30,
2019
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Net interest income E
$ 30,459
$ 30,772
$ 27,131
$ 25,270
$ 21,669
Tax-exempt investment income
(828)
(790)
(758)
(749)
(757)
Taxable investment income
1,108
1,058
1,015
1,003
1,013
Net Interest Income Fully Tax Equivalent F
$ 30,739
$ 31,040
$ 27,388
$ 25,524
$ 21,925
Annualized Net Interest Margin E/B
4.01%
4.04%
3.85%
4.04%
3.92%
Annualized Net Interest Margin, Fully Tax Equivalent F/B
4.05%
4.07%
3.89%
4.08%
3.97%
Three Months Ended
Core Net Interest Margin
Sept 30,
2019
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Net interest income (FTE)
$ 30,739
$ 31,040
$ 27,388
$ 25,524
$ 21,925
Less purchase accounting adjustments
1,296
1,607
1,147
1,414
541
Net interest income, net of purchase accounting adj G
$ 29,443
$ 29,433
$ 26,241
$ 24,110
$ 21,384
Total average earning assets
$3,036,492
$3,049,874
$2,815,680
$2,500,709
$2,210,894
Add average balance of loan valuation discount
13,679
15,265
13,869
12,803
6,836
Avg earning assets, excluding loan valuation discount H
$3,050,171
$3,065,139
$2,829,549
$2,513,511
$2,217,730
Core net interest margin G/H
3.86%
3.84%
3.71%
3.84%
3.86%
Three Months Ended
Efficiency Ratio
Sept 30,
2019
June 30,
2019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Operating Expense
Total non-interest expense
$ 20,825
$ 20,891
$ 21,893
$ 22,245
$ 19,786
Pre-tax non-operating expenses
(705)
(91)
(3,179)
(4,155)
(4,059)
Adjusted Operating Expense I
$ 20,120
$ 20,800
$ 18,714
$ 18,090
$ 15,727
Operating Revenue
Net interest income, FTE
$ 30,739
$ 31,040
$ 27,388
$ 25,524
$ 21,925
Total non-interest income
7,103
6,716
5,554
6,396
5,074
Pre-tax non-operating items
(233)
(1,292)
(233)
Adjusted Operating Revenue J
$ 37,842
$ 37,756
$ 32,709
$ 30,628
$ 26,766
Efficiency Ratio, operating I/J
53.17%
55.09%
57.21%
59.06%
58.76%
Three Months Ended
Return Ratios
Sept 30,
2019
June 30,
019
Mar 31,
2019
Dec 31,
2018
Sept 30,
2018
Net income available to common shareholders K
$ 12,272
$ 11,983
$ 7,635
$ 6,861
$ 5,162
Acquisition charges
705
91
3,179
4,155
4,059
Tax on acquisition charges
(152)
(23)
(712)
(910)
(1,027)
Gain on sale
(342)
Tax on gain on sale
86
Treasury awards
(233)
(950)
(233)
Tax on Treasury awards
59
242
59
Net earnings available to common shareholders, oper L
$ 12,825
$ 12,051
$ 9,928
$ 9,142
$ 8,020
Annualized return on avg assets K/A
1.43%
1.39%
0.96%
0.98%
0.84%
Annualized return on avg assets, oper L/A
1.49%
1.39%
1.25%
1.30%
1.30%
Annualized return on avg common equity, oper L/C
10.91%
10.60%
10.18%
11.14%
11.26%
Annualized return on avg tangible common equity, oper L/D
15.80%
15.64%
15.13%
16.44%
14.64%
Mortgage Department
Net Interest Income after provision for loan losses
$ 200
$ 194
$ 176
$ 267
$ 154
Loan fee income
1,800
1,559
909
969
1,066
Salaries and employee benefits
986
941
823
774
855
Other non-interest expense
134
140
154
124
136
Earnings before income taxes
$ 880
$ 672
$ 108
$ 338
$ 229
View source version on businesswire.com: https://www.businesswire.com/news/home/20191021005834/en/
For additional information, contact:
M. Ray “Hoppy” Cole Chief Executive Officer
Dee Dee Lowery Chief Financial Officer (601) 268-8998
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