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First Bancshares Q3 jumped to $180,000

Staff writer ▼ | April 21, 2014
First Bancshares, Inc., the holding company for First Home Bank, announced its financial results for the third quarter of its fiscal year ended June 30, 2014.
First Bancshares
First BancsharesFirst Bancshares, Inc., the holding company for First Home Bank, announced its financial results for the third quarter of its fiscal year ended June 30, 2014.


For the quarter ended March 31, 2014, the Company had net income of $180,000, or $0.11 per share – diluted, compared to net income of $141,000, or $0.09 per share – diluted for the quarter ended March 31, 2013.

The $39,000 increase in net income for the quarter ended March 31, 2014 compared to the quarter ended March 31, 2013 is attributable to an increase of $74,000 in net interest income and an increase of $52,000 in non-interest income. This was partially offset by a decrease of $13,000 in gain on sale of investments and an increase of $74,000 in non-interest expense.

For the quarter ended March 31, 2014, net interest income increased by $74,000, or 6.3%, to $1.3 million from $1.2 million for the quarter ended March 31, 2013. This increase was the result of an increase in interest income of $26,000, or 1.7%, and a decrease of $48,000, or 15.5% in interest expense.

The increase in interest income is attributable to growth in the Company's loan portfolio. The decrease in interest expense was primarily the result of a decrease in interest paid on FHLB advances and a decrease in repurchase agreements.

There was no provision for loan losses for the quarter ended March 31, 2014 and March 31, 2013. Classified loans at March 31, 2014 were $2.2 million compared to $4.5 million at March 31, 2013.

The $2.3 million 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 March 31, 2014 was $1.6 million, or 1.5% of total loans, compared to $1.7 million, or 1.7% of total loans at March 31, 2013.

For the quarter ended March 31, 2014, the Company had a gain on sale of investments of $29,000, compared to gain on sale of investments of $42,000 during the quarter ended March 31, 2013. The $13,000 decrease during the quarter is attributable to the Company selling fewer securities than it did during the same quarter a year ago.

Non-interest income increased by $52,000, or 21.8%, to $290,000 for the quarter ended March 31, 2014 from $238,000 for the quarter ended March 31, 2013. The increase was attributable to an increase in gain on sale of other real estate owned ("OREO") of $102,000. This was partially offset by a decrease in gain on fixed assets of $21,000, a decrease in service charges of $8,000, a decrease in debit card and ATM fees of $7,000 and a decrease in other non-interest income items of $14,000.

Non-interest expense increased by $74,000, or 5.6%, to $1.4 million for the quarter ended March 31, 2014, compared to $1.3 million for the quarter ended March 31, 2013. The increase reflects an increase of $56,000 in premises and fixed assets and an increase of $79,000 in other non-interest expense items.

These are partially offset by a decrease of $3,000 in salaries and employee benefits, a decrease of $12,000 in professional fees consisting of legal, accounting and consulting service related expenses, a decrease of $32,000 in FDIC insurance premiums and a decrease of $14,000 in OREO expenses.

For the nine months ended March 31, 2014, the Company had net income of $452,000, or $0.29 per share – diluted, compared to a net loss of $209,000, or $0.13 per share – diluted for the nine months ended March 31, 2013.

The $661,000 increase in net income for the nine months ended March 31, 2014 compared to the nine months ended March 31, 2013 is attributable to an increase in net interest income of $144,000, an increase in non-interest income of $276,000 and a decrease in non-interest expense of $468,000. This was partially offset by a decrease of $227,000 in gain on sale of investments.

Net interest income increased by $144,000 for the nine months ended March 31, 2014 compared to the prior year. This was the result of an increase in interest income of $7,000, or 0.2% and a decrease in interest expense of $137,000, or 14.4%.

The increase in interest income is attributable to increased loan demand and growth in the Company's loan portfolio. The decrease in interest expense is attributable to a decrease in interest paid on FHLB advances and a decrease in repurchase agreements.

There was no provision for loan losses for the nine months ended March 31, 2014 and March 31, 2013, which is attributable to the improved quality of the Company's loan portfolio. Classified loans have continued to decrease with increased monitoring by management that has resulted in the early identification and resolution of potential problem loans.

Gains on the sale of investments decreased by $227,000 to $79,000 for the nine months ended March 31, 2014 from $306,000 for the nine months ended March 31, 2013. The decrease is attributable to the decrease in the number of securities sold by the Company during the nine months ended March 31, 2014.

Non-interest income improved by $276,000, or 53.1%, to $796,000 for the nine months ended March 31, 2014 compared to $520,000 for the nine months ended March 31, 2013. This increase was the result of an increase in gain on sale of OREO of $336,000 and an increase of $21,000 in ATM fees.

This was partially offset by a decrease of $27,000 in service charges, a decrease of $21,000 in gain on sale of fixed assets and a decrease of $33,000 in other non-interest income items.

Non-interest expense decreased by $468,000, or 10.0%, to $4.2 million for the nine months ended March 31, 2014 compared to $4.7 million for the nine months ended March 31, 2013.

The decrease was the result of a decrease of $189,000 in salaries and employee benefits, a decrease of $42,000 in professional fees consisting of legal, accounting and consulting service related services, a decrease of $98,000 in FDIC insurance premiums, a decrease of $79,000 in OREO expenses and a decrease of $94,000 in other non-interest expense items. These were partially offset by an increase of $34,000 in premises and fixed assets.

Total consolidated assets at March 31, 2014 were $193.8 million, compared to $191.7 million at June 30, 2013, representing an increase of $2.1 million, or 1.1%. Stockholders' equity at March 31, 2014 was $13.9 million, or 7.2% of assets, compared with $14.25 million, or 7.4% of assets at June 30, 2013.

The $374,000, or 2.6% decrease in stockholders' equity was attributable to an increase in the unrealized loss on available-for-sale securities, net of income taxes of $818,000 and share repurchases totaling $8,000. This was partially offset by net income for the nine months ended March 31, 2014 of $452,000.

Net loans receivable increased $10.4 million, or 10.9%, to $106.0 million at March 31, 2014 from $95.6 million at June 30, 2013. Deposits decreased $4.4 million, or 2.7%, to $168.2 million at March 31, 2014 from $163.8 at June 30, 2013.

Retail repurchase agreements decreased $6.1 million or 95.0%, to $320,000 at March 31, 2014 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 $4.1 million, or 64.1%, to $10.5 million at March 31, 2014 from $6.4 million at June 30, 2013.

First Bancshares, Inc. is the holding company for First Home Bank, a FDIC-insured 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.


 

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