FBSI First Bankshares Inc (QX)

First Bancshares, Inc. (OTCQB:FBSI), the holding company for First Home Savings Bank ("Bank"), today announced its financial results for the second quarter of its fiscal year ending June 30, 2013. All data as of December 31, 2012 and for the three and six months then ended are unaudited.

For the quarter ended December 31, 2012, the Company had a net loss of $398,000, or $0.26 per share - diluted, compared to a net loss of $662,000, or $0.43 per share - diluted for the quarter ended December 31, 2011. The decrease in net loss for the quarter ended December 31, 2012 compared to the quarter ended December 31, 2011 is attributable to a $572,000 increase in non-interest income. This increase is partially offset by a $348,000 increase in non-interest expense.

During the quarter ended December 31, 2012, net interest income decreased by $81,000 or 6.3%, to $1.2 million from $1.3 million during the quarter ended December 31, 2011. The decrease was the result of a decrease in interest income of $150,000, or 9.0%, which was partially offset by a decrease in interest expense of $69,000, or 18.1%. The decrease in both interest income and interest expense was primarily the result of a decrease in market interest rates between the two periods.

During the quarter ended December 31, 2012, there was no provision for loan losses, compared to a provision of $18,000 during the quarter ended December 31, 2011. The allowance for loan losses was $1.7 million, or 1.8% of gross loans at December 31, 2012.

During the quarter ended December 31, 2012, there were no gains or losses on the sale of investments, compared to a loss of $18,000 on the sale of investments during the quarter ended December 31, 2011.

Non-interest income increased by $572,000 to $244,000 during the quarter ended December 31, 2012 from a loss of $328,000 during the quarter ended December 31, 2011. This change was the result of a decrease in loss on sale of property and equipment of $574,000 and an increase in other non-interest income of $14,000. This was partially offset by a decrease in service charge and fee income of $16,000.

Non-interest expense increased by $348,000, or 23.3% to $1.8 million for the quarter ended December 31, 2012, compared to $1.5 million for the quarter ended December 31, 2011. This change was a result of an increase of $151,000 in deposit insurance premiums to $123,000 for the quarter ended December 31, 2012 from a negative expense of $87,000 during the quarter ended December 31, 2011. The Company recorded a negative expense for deposit insurance premiums during the quarter ended December 31, 2011 as a result of an adjustment to the Company's prepaid deposit insurance premium of $213,000. The Company also had a one time early retirement package that cost the Company $186,000 and an increase in other non-interest expenses that totaled $11,000. As a result of the early retirement package, the Company anticipates an annual savings of $230,000 going forward.        

For the six months ended December 31, 2012, the Company had a net loss of $349,000, or $0.23 per share - diluted, compared to a net loss of $950,000 or $0.61 per share - diluted for the six months ended December 31, 2011. The decrease in the net loss for the six months ended December 31, 2012 when compared to the prior year is attributable to a $74,000 decrease in the provision for loan losses, an increase in gains on sale of investments of $168,000, an increase of $416,000 in non-interest income and a decrease of $120,000 in non-interest expense. These items were partially offset by a decrease of $262,000 in net interest income.

Net interest income decreased by $262,000 during the six months ended December 31, 2012 compared to the prior year. This was the result of a decrease of $406,000 or 11.6%, in interest income from $3.5 million in the six months ended December 31, 2011 to $3.1 million in the six months ended December 31, 2012. This decrease was partially offset by a decrease of $144,000, or 18.3% in interest expense from $786,000 in the six months ended December 31, 2011 to $642,000 in the six months ended December 31, 2012.

During the six months ended December 31, 2012, there was no provision for loan losses, compared to a provision of $74,000 during the quarter ended December 31, 2011. This was primarily the result of a decrease in classified assets. Classified assets decreased $3.3 million from $8.3 million at December 31, 2011 to $5.0 million at December 31, 2012. 

Gains on the sale of investments increased by $168,000 to $264,000 during the six months ended December 31, 2012 from $96,000 during the six months ended December 31, 2011.

Non-interest income improved by $416,000 to $282,000 during the six months ended December 31, 2012 from a loss of $134,000 during the six months ended December 31, 2011. This change was the result of a decrease in loss on sale of property and equipment of $403,000. Other non-interest income items increased $13,000.

Non-interest expense decreased by $120,000 to $3.35 million during the six months ended December 31, 2012 compared to $3.47 million during the six months ended December 31, 2011. This was the result of a decrease of $117,000 in compensation expense, a decrease of $30,000 in occupancy and equipment, and a decrease of $165,000 in professional fees. This was partially offset by an increase of $90,000 in deposit insurance premiums and an increase of $102,000 in other non-interest expenses. Included in the Company's compensation expense for the six months ended December 31, 2012 is a one time early retirement package that cost the Company $186,000. 

Total consolidated assets at December 31, 2012 were $187.2 million, compared to $193.4 million at June 30, 2012, representing a decrease of $6.2 million, or 3.2%. Stockholders' equity at December 31, 2012 was $15.9 million, or 8.5% of assets, compared with $16.3 million, or 8.4% of assets at June 30, 2012. Book value per common share decreased to $10.26 at December 31, 2012 from $10.53 at June 30, 2012. The $400,000, or 2.5% decrease in equity was primarily attributable to a net loss for the six months ended December 31, 2012 of $349,000 and a decrease in the market value of available-for-sale securities, net of income taxes of $68,000 during the six months ended December 31, 2012.

Net loans receivable decreased $1.4 million, or 1.5%, to $94.1 million at December 31, 2012 from $95.5 million at June 30, 2012. Deposits decreased $4.2 million, or 2.5%, to $161.7 million at December 31, 2012 from $165.9 million at June 30, 2012. Retail repurchase agreements, which are included in borrowed funds, decreased $900,000, or 14.1%, to $5.5 million at December 31, 2012 from $6.4 million at June 30, 2012.

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

The Company and its wholly-owned subsidiary, First Home Savings Bank, 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. 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,
	2012	2011	2012	2011
Operating Data:
Total interest income	$ 1,512	$ 1,662	$ 3,092	$ 3,498
Total interest expense	313	382	642	786
Net interest income	1,199	1,280	2,450	2,712
Provision for loan losses	0	18	0	74
Net interest income (loss) after provision for loan losses	1,199	1,262	2,450	2,638
Gain / (loss) on sale of investments	0	(18)	264	96
Non-interest income (loss)	244	(328)	282	(134)
Non-interest expense	1,841	1,493	3,345	3,465
Income (loss) before income tax	(398)	(577)	(349)	(865)
Income tax expense (benefit)	0	85	0	85
Net loss	$ (398)	$ (662)	$ (349)	$ (950)
Net loss per share-basic	$ (0.26)	$ (0.43)	$ (0.23)	$ (0.61)
Net loss per share-diluted	$ (0.26)	$ (0.43)	$ (0.23)	$ (0.61)
Financial Condition Data:	At December 31, 2012	At  June 30, 2012
Total assets	$ 187,227	$ 193,417
Loans receivable, net	94,131	95,521
Cash and cash equivalents	6,229	12,658
Investment securities	74,320	73,845
Deposits	161,692	165,858
Borrowed funds	8,915	9,846
Stockholders' equity	15,918	16,335
Book value per share	$ 10.26	$ 10.53

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