First Bancshares, Inc. Announces: Collection of Non-Accrual Loans; Additional Second Quarter Revenue.

Business Editors

SAN LUIS OBISPO, Calif.--(BUSINESS WIRE)--May 11, 2004

First Bancshares, Inc. ("Company") (Pink Sheets:FSLO), the holding company for First Bank of San Luis Obispo ("Bank"), today announced the collection of all loans that were on non-accrual status at March 31, 2004. At the end of the first quarter, the Company had a $1.25 million loan secured by farmland and an $83 thousand SBA loan on non-accrual status. Since that time, the Company has collected all principal outstanding on both loans. In addition, past due interest, late charges, and cost reimbursements totaling $215 thousand was also received. This additional revenue will enhance the Company's second quarter net income.

Commenting on the collection of the loans, David R. Booker, the Company's Chief Executive Officer, stated: "The Company's credit profile, which was already favorable, improved even further with the repayment of these two credits. The additional revenue will augment return on stockholders' equity and earnings per share for the second quarter of 2004. We plan to reinvest the funds collected back into our local community, continuing our 25 year tradition of supporting economic vitality in San Luis Obispo County."

The Company and the Bank are headquartered in San Luis Obispo, California. The Bank's deposits are insured by the Federal Deposit Insurance Corporation ("FDIC") to the maximum extent allowed by law.

Certain of the statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "intend," "estimate," "target," "plan," "may increase," "may fluctuate," "may result in," "are projected," and similar expressions. The Company's actual results may differ materially from those included in the forward-looking statements. These forward-looking statements involve risks and uncertainties including, but not limited to, the economic, business, and real estate market conditions in the Company's market areas, the interest rate environment, competition, regulatory and legislative actions, the possibility that the Company will not be successful in achieving its strategic objectives, the performance and contributions of employees and Directors, and other factors. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

This news release is available at the www.firstbankslo.com Internet site for no charge.