FBSI First Bancshares, Inc. (MM)

First Bancshares, Inc. (OTCQB:FBSI), the holding company for First Home Savings Bank ("Bank"), today announced its financial results for the first quarter of its fiscal year ended June 30, 2014.

For the quarter ended September 30, 2013, the Company had net income of $172,000, or $0.11 per share – diluted, compared to net income of $49,000, or $0.03 per share – diluted for the quarter ended September 30, 2012. The $123,000 increase in net income for the quarter ended September 30, 2013 compared to the quarter ended September 30, 2012 is attributable to an increase of $229,000 in non-interest income and a decrease of $162,000 in non-interest expense. This was partially offset by a decrease of $4,000 in net interest income and a decrease of $264,000 in gain on sale of investments.

During the quarter ended September 30, 2013, net interest income decreased by $4,000, or 0.3%, to $1.2 million during the quarter ended September 30, 2013. This decrease was the result of a decrease in interest income of $42,000, or 2.7%, which was partially offset by a decrease in interest expense of $38,000, or 11.6%. The decrease in both interest income and interest expense was primarily the result of a decrease in market interest rates between the two periods.

There was no provision for loan losses for the quarter ended September 30, 2013 and September 30, 2012. Classified loans at September 30, 2013 were $2.3 million compared to $4.6 million at September 30, 2012.  The decrease in classified loans was the result of increased monitoring by management to identify and resolve issues with potential problem loans. The allowance for loan losses at September 30, 2013 was $1.6 million, or 1.6% of gross loans, compared to $1.8 million, or 1.9% of gross loans at September 30, 2012.

During the quarter ended September 30, 2013, the Company did not sell any investments compared to the quarter ended September 30, 2012, when the Company reported gain on sale of investments of $264,000. 

Non-interest income increased by $229,000, or 408.9%, to $285,000 for the quarter ended September 30, 2013 from $56,000 for the quarter ended September 30, 2012. The increase was the result of a $33,000 gain on sale of OREO during the quarter ended September 30, 2013 compared to a loss of $198,000 on sale of OREO during the quarter ended September 30, 2012. Other non-interest income items decreased by $2,000 during the quarter ended September 30, 2013 compared to the quarter ended September 30, 2012. 

Non-interest expense decreased by $162,000, or 10.7%, to $1.4 million for the quarter ended September 30, 2013, compared to $1.5 million for the quarter ended September 30, 2012. The decrease reflects a decrease of $43,000 in salaries and employee benefits, a decrease of $30,000 in premises and fixed assets, a decrease of $34,000 in FDIC insurance premiums and a decrease of $9,000 in other non-interest expenses. These were partially offset by an increase of $16,000 in professional fees consisting of legal, accounting and consulting service-related expenses.

Total consolidated assets at September 30, 2013 were $187.6 million, compared to $191.7 million at June 30, 2013, representing a decrease of $4.1 million, or 2.1%. Stockholders' equity at September 30, 2013 was $14.0 million compared with $14.3 million, each representing 7.4% of assets at September 30, 2013 and June 30, 2013, respectively. The $288,000, or 2.0% decrease in stockholders' equity was attributable to an increase in the unrealized loss on available-for-sale securities, net of income taxes of $460,000. This was partially offset by net income for the quarter ended September 30, 2013 of $172,000.

Net loans receivable increased $4.1 million, or 4.3%, to $99.6 million at September 30, 2013 from $95.6 million at June 30, 2013. Deposits decreased $2.1 million, or 1.3%, to $161.7 million at September 30, 2013 from $163.8 at June 30, 2013. Retail repurchase agreements decreased $5.7 million or 89.1%, to $678,000 at September 30, 2013 from $6.4 million at June 30, 2013. The decrease in retail repurchase agreements is attributable to a large competitively bid account that was transferred during the quarter ended September 30, 2013. This transfer will save the Company approximately $40,000 a year in interest expense.  FHLB advances increased $4.0 million, or 62.5%, to $10.4 million at September 30, 2013 from $6.4 million at June 30, 2013.

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 seven full service offices in Marshfield, Ava, Gainesville, Sparta, Springfield, Crane, and Kissee Mills, Missouri.

The Company and its wholly-owned subsidiary, First Home Savings Bank, may from time to time make written or oral "forward-looking statements" 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. 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,
	2013	2012
Operating Data:
Total interest income	$ 1,532	$ 1,574
Total interest expense	291	329
Net interest income	1,241	1,245
Provision for loan losses	--	--
Net interest income after provision for loan losses	1,241	1,245
Gain on sale of investments	--	264
Non-interest income	285	56
Non-interest expense	1,354	1,516
Income before taxes	172	49
Income tax expense	--	--
Net income	172	49
Earnings per share	$ 0.11	$ 0.03
Financial Condition Data:	At September 3, 2013	At June 30, 2013
Cash and cash equivalents (excludes CDs)	$ 6,104	$ 11,705
Investment securities (includes CDs)	72,858	73,395
Loans receivable, net	99,620	95,554
Total assets	187,598	191,680
Deposits	161,733	163,834
Repurchase agreements	678	6,391
FHLB advances	10,400	6,400
Stockholders' equity	13,962	14,250
Book value per share	$ 9.00	$ 9.19

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