FBSI First Bancshares, Inc. (MM)

First Bancshares, Inc. (OTCQB:FBSI) (FstBksh), the holding company for First Home Bank ("Bank"), today announced its financial results for the quarter and fiscal year ended December 31, 2014.

Effective November 26, 2014, First Bancshares changed its fiscal year end from June 30 to December 31. The earnings reported below for the six months ended December 31, 2014 are for a six month "stub period" in connection with the change to a calendar year end.

For the quarter ended December 31, 2014, the Company had net income of $83,000, or $0.05 per share – diluted, compared to net income of $100,000, or $0.07 per share – diluted for the quarter ended December 31, 2013. The $17,000 decrease in net income for the quarter ended December 31, 2014 compared to the quarter ended December 31, 2013 is attributable to a decrease in gain on sale of investments of $57,000 and an increase in non-interest expense of $30,000. This was partially offset by an increase of $53,000 in net interest income and an increase of $17,000 in non-interest income.

During the quarter ended December 31, 2014, net interest income increased by $53,000, or 4.1%, to $1.33 million from $1.28 million during the quarter ended December 31, 2013. The increase was the result of an increase in interest income of $61,000, or 4.0%, which was partially offset by an increase in interest expense of $8,000, or 3.1%. The increase in interest income is due to the growth in the Bank's loan portfolio. The increase in interest expense was primarily the result of an increase in both deposits and FHLB advances.

There was no provision for loan losses for the quarters ended December 31, 2014 and December 31, 2013. The allowance for loan losses at December 31, 2014 was $1.62 million, or 1.4% of gross loans compared to $1.59 million, or 1.5% of gross loans at December 31, 2013. Classified loans at December 31, 2014 were $2.18 million compared to $2.23 million at December 31, 2013.

For the quarter ended December 31, 2014, the Company had a loss on sale of investments of $7,000, compared to a gain on sale of investments of $50,000 for the quarter ended December 31, 2013. The decrease is attributable to changing market conditions and management utilizing normal cash flows instead of selling securities during the quarter ended December 31, 2014.

Non-interest income increased by $17,000, or 7.7% to $239,000 for the quarter ended December 31, 2014 from $222,000 for the quarter ended December 31, 2013. The increase was the result of a decrease in losses on other real estate owned ("OREO") of $24,000 and an increase in other non-interest items of $2,000. This was partially offset by a decrease of $9,000 in service charges on deposit accounts.

Non-interest expense increased by $30,000, or 2.1%, to $1.48 million for the quarter ended December 31, 2014 from $1.45 million for the quarter ended December 31, 2013. The increase reflects an increase of $27,000 in professional fees consisting of legal, accounting and consulting service related expenses and an increase of $61,000 in other non-interest expenses. This is partially offset by a decrease of $58,000 in salaries and employee benefits.

For the six months ended December 31, 2014, the Company had net income of $142,000, or $0.09 per share – diluted, compared to net income of $272,000, or $0.18 per share – diluted for the six months ended December 31, 2013. The $130,000 decrease in net income for the six months ended December 31, 2014 compared to the six months ended December 31, 2013 is attributable to an increase in the provision for loan losses of $28,000, a decrease in gain on sale of investments of $57,000, a decrease in non-interest income of $28,000 and an increase in non-interest expenses of $151,000. This is partially offset by an increase in net interest income of $134,000.

The increase in net interest income for the six months ended December 31, 2014 was the result of an increase in interest income of $115,000, or 3.7%, and a decrease in interest expense of $19,000, or 3.4% compared to the six months ended December 31, 2013.

For the six months ended December 31, 2014, the provision for loan losses was $28,000, compared to no provision for the six months ended December 31, 2013. The increase in the provision for loan losses is attributable to the growth in the Company's loan portfolio during the six months ended December 31, 2014.

The Company had a loss on sale of investments of $7,000 for the six months ended December 31, 2014 compared to a gain on sale of investments of $50,000 during the six months ended December 31, 2013. The decrease is attributable to changing market conditions and management utilizing normal cash flows instead of selling securities during the six months ended December 31, 2014.

Non-interest income decreased by $28,000, or 5.5%, to $479,000 for the six months ended December 31, 2014 compared to $507,000 for the six months ended December 31, 2013. This decrease was the result of an $18,000 gain on sale of OREO in the prior period and a decrease in service charges on deposit accounts of $10,000.

Non-interest expense increased by $151,000, or 5.4%, to $2.96 million for the six months ended December 31, 2014 compared to $2.81 million for the six months ended December 31, 2013. The increase was the result of an increase of $57,000 in premises and fixed assets, an increase of $3,000 in professional fees consisting of legal, accounting and consulting service-related services, an increase of $5,000 in OREO expenses and an increase of $86,000 in other non-interest expenses. 

Total consolidated assets at December 31, 2014 were $196.36 million, compared to $192.48 million at June 30, 2014, representing an increase of $3.88 million, or 2.0%. Stockholders' equity at December 31, 2014 was $15.27 million, or 7.8% of assets, compared with $14.54 million, or 7.6% of assets at June 30, 2014. Book value per common share increased to $9.85 at December 31, 2014 from $9.38 at June 30, 2014. The $726,000, or 5.0% increase in stockholders' equity was attributable to a decrease in the unrealized loss on available-for-sale securities, net of income taxes of $584,000 and net income for the six months ended December 31, 2014 of $142,000.

Net loans receivable increased $6.07 million, or 5.5%, to $116.00 million at December 31, 2014 from $109.93 million at June 30, 2014. Deposits increased $2.36 million, or 1.4% to $168.75 million at December 31, 2014 from $166.39 million at June 30, 2014. FHLB advances increased $1.00 million, or 9.5%, to $11.50 million at December 31, 2014 from $10.50 million at June 30, 2014.

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 December 31,		Six Months Ended December 31,
Operating Data:	2014	2013	2014	2013
Total interest income	$ 1,602	$ 1,541	$ 3,188	$ 3,073
Total interest expense	270	262	534	553
Net interest income	1,332	1,279	2,654	2,520
Provision for loan losses	--	--	28	--
Net interest income after provision for loan losses	1,332	1,279	2,626	2,520
Gain (loss) on sale of investments	(7)	50	(7)	50
Non-interest income	239	222	479	507
Non-interest expense	1,481	1,451	2,956	2,805
Income (loss) before taxes	83	100	142	272
Income tax expense	--	--	--	--
Net income (loss)	$ 83	$ 100	$ 142	$ 272
Earnings per share	$ 0.05	$ 0.07	$ 0.09	$ 0.18
Financial Condition Data:	At  December 31, 2014	At  June 30, 2014
Cash and cash equivalents (excludes CDs)	$ 4,240	$ 11,262
Investment securities (includes CDs)	65,767	62,462
Loans receivable, net	116,003	109,934
Total assets	196,355	192,476
Deposits	168,746	166,386
Repurchase agreements	229	224
FHLB advances	11,500	10,500
Stockholders' equity	15,267	14,541
Book value per share	$ 9.85	$ 9.38

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