First Bancshares, Inc. Announces: Second Quarter 2004 and June 30, 2004 Year to Date Financial Results.SAN LUIS OBISPO San Luis Obispo (săn l  `ĭs ōbĭs`pō), city (1990 pop. 41,958), seat of San Luis Obispo co., S Calif., near San Luis Obispo Bay; inc. 1856. , Calif. -- First Bancshares, Inc. (Pink
Sheets:FSLO) ("Company"), the holding company for First Bank
of San Luis Obispo ("Bank"), today reported net income of $738
thousand, equivalent to $0.59 diluted earnings per share diluted earnings per shareAn earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of , for the second quarter of 2004. This compares to net income of $461 thousand, equivalent to $0.36 diluted earnings per share, for the first quarter of 2004, as previously reported. Net income for the first six months of 2004 totaled $1.2 million, equivalent to $0.95 diluted earnings per share. Return on average assets during the second quarter of 2004 was 1.07% and return on average equity was 15.41%, comparing favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to first quarter figures of 0.67% and 9.89%, respectively. The Company's efficiency ratio improved from 71.69% during the first quarter of 2004 to 63.75% during the second quarter. At June June: see month. 30, 2004, the Company reported a record level of loans, as its core banking business continued to expand during the most recent quarter. The Company's net income during the second quarter of 2004 benefited from: --The collection in full of all loans that were on non-accrual status at March 31, 2004, including the receipt of a total of $215 thousand in previously earned, but not accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. , interest, fees, and expense reimbursements. --A favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. credit experience and profile, which contributed to a $150 thousand reduction in the Company's provision for loan losses from the first quarter to the second quarter of 2004. --Expanded spreads resulting from strong loan originations The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. and the continued restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of the Company's balance sheet. --Significant gains on the sale of loans (primarily SBA SBA abbr. Small Business Administration Noun 1. SBA - an independent agency of the United States government that protects the interests of small businesses and ensures that they receive a fair share of government , but also including mortgage and participation loans). --Higher customer service charge income, in part resulting from increases in certain fees implemented during the second quarter of 2004. --A $92 thousand reduction in accounting, legal, and consulting expenses from the first quarter of 2004, when significant non-recurring costs were incurred. The ratio of net interest income to average total assets was 4.17% during the second quarter of 2004 comparing favorably to both 3.82% for the first quarter of 2004 and 3.63% for the full year 2003. Factors contributing to the increased spread during the second quarter of 2004 included: --The collection of past due interest and late charges on non-accrual loans ($190 thousand, included in the $215 thousand total reported on the prior page, which increased the ratio of net interest income to average total assets by 27 basis points for the second quarter of 2004). --An increase in the percentage of total assets comprised of net loans to 67.3% at June 30, 2004, comparing favorably to 58.5% at December December: see month. 31, 2003. --A higher relative level of interest-free interest-free adj → libre de interés interest-free adj → sans intérêt interest-free interest adj, adv → funding, as non-interest bearing liabilities plus capital as a ratio of total assets rose from 25.8% at December 31, 2003 to 28.3% at June 30, 2004. Gains on the sale of securities declined from $135 thousand during the first quarter of 2004 to none in the second quarter. The Company did not sell any securities during the second quarter of 2004. Total securities declined from $68.5 million at December 31, 2003 to $63.7 million at June 30, 2004, as the Company shifted assets from securities to relatively higher yielding loans. All of the Company's securities at June 30, 2004 were rated "AAA AAA: see American Automobile Association. (Triple A) A common single-cell battery used in a myriad of electronic devices of all variety. Like its double A (AA) cousin, it provides 1.5 volts of DC power. When used in series, the voltage is multiplied. " or equivalent by at least one nationally recognized ratings agency. Loans receivable held for investment, net, increased 11.9% from December 31, 2003 through June 30, 2004, as the Company experienced strong loan demand across most of its product line, particularly in construction lending and loans to finance commercial real estate. The Company continues to serve both existing and new local businesses through its participation in a wide range of U.S. Small Business Administration ("SBA") loan programs as a preferred lender. The Company's strategic plan incorporates a continued rise in the percentage of total assets comprised of loans, as the Company believes its stockholders and the communities served by the Bank are best benefited by extending credit to local customers. Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. increased from $18.5 million at December 31, 2003 to $19.1 million at June 30, 2004, with a corresponding increase in book value per share from $14.58 to $15.07. These increases were constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. by a $294 thousand reduction in accumulated other comprehensive income In 1997 the Financial Accounting Standards Board issued a Statement on Financial Accounting Standards entitled “Comprehensive Income”. This statement required all income statement items to be reported either as a regular item in the income statement and or a special item as , net of taxes, that resulted from lower relative values for the Company's securities portfolio. The lower relative values stemmed stemmed adj. 1. Having the stems removed. 2. Provided with a stem or a specific type of stem. Often used in combination: stemmed goblets; long-stemmed roses. from the increase in general market interest rates during the first half of 2004, as exemplified by the yield on the two year Treasury Note increasing from 1.82% at December 31, 2003 to 2.68% at June 30, 2004. The Company experienced more credit recoveries than charge-offs in the first half of 2004, continuing the pattern commenced in 2003. The ratio of allowance for loan losses to loans increased from 1.51% at December 31, 2003 to 1.58% at June 30, 2004. The Company increased its loan loss reserve during the first half of 2004 in conjunction with the growth in volume and change in mix of the loan portfolio. The Company had no foreclosed real estate at June 30, 2004 or December 31, 2003. Total deposits increased from $206.3 million at December 31, 2003 to $207.2 million at June 30, 2004 despite the Company's paying off an $8.1 million brokered certificate of deposit during May 2004. At June 30, 2004, the Company had no remaining brokered certificates of deposit. During the second quarter of 2004, the Bank actively solicited local deposits to fund its loan growth. Deposit related advertising was increased, new deposit products were introduced, and employee incentive plans were updated. The Company plans to continue extensively marketing for local deposits during the second half of 2004, in conformity with the strategic objectives of assisting a greater number of customers in attaining their financial objectives and of reducing the percentage of total funding provided by borrowings. Advances from the Federal Home Loan Bank decreased from $46.9 million at December 31, 2003 to $32.0 million at June 30, 2004. As previously announced, the Company has changed its cash dividend payment frequency from quarterly to annual. As a result, the Company did not declare TO DECLARE. To make known or publish. By tho constitution of the United States, congress have power to declare war. In this sense the word, declare, signifies, not merely to make it known that war exists, but also to make war and to carry it on. 4 Dall. 37; 1 Story, Const. Sec. or pay a cash dividend during the second quarter of 2004. The Board of Directors plans to next consider the declaration and payment of a cash dividend during the fourth quarter of 2004. The Bank continued its active community development program during the second quarter, with donations made to over 30 local charities, community events, and non-profit organizations A non-profit organization (abbreviated "NPO", also "non-profit" or "not-for-profit") is a legally constituted organization whose primary objective is to support or to actively engage in activities of public or private interest without any commercial or monetary profit purposes. . During the third quarter, Bank employees are actively participating in the American Heart Association American Heart Association (AHA), n.pr a national voluntary health agency that has the goal of increasing public and medical awareness of cardiovascular diseases and stroke, and thereby reducing the number of associated deaths and disabilities. Walk-a-thon and the San Luis Obispo Children's Museum Children's museums are institutions that provide exhibits and programs that stimulate informal learning experiences for children. In contrast with traditional museums that typically have a hands-off policy regarding exhibits, children's museums feature interactive exhibits that are annual fundraiser, as the Bank continues to supplement its direct donations with significant volunteer hours. The Bank's regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. capital ratios at June 30, 2004 were 9.67% Leverage Ratio, 12.91% Tier One Risk Based Capital Ratio, and 14.16% Total Risk Based Capital Ratio. These ratios are well in excess of the federal statutory criteria criteria (krītēr´ē  ),n. for the Bank to be classified in the highest regulatory capital category of "well capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. ". Commenting on the second quarter results, David R. Booker, the Company's Chief Executive Officer, stated: "We were pleased to report a 60% increase in net income from the first quarter to the second quarter of 2004. The Company has been working on multiple profit improvement initiatives, including both revenue enhancements revenue enhancement An increase in revenues, especially by way of increased taxes. Revenue enhancement includes reducing taxpayer deductions and eliminating tax credits. and efficiency improvements. Some of the initial benefits of those efforts were realized during the second quarter, with additional steps planned for the second half of 2004. The growth in loans outstanding and local deposits was gratifying grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. , and is perhaps the best evidence of the Bank's extensive involvement in and contributions to our local communities. The Bank ended the second quarter with a strong capital position that will facilitate our continuing to meet the credit needs of businesses, professionals, and individuals on the Central Coast of California The Central Coast is an area of California, United States, roughly spanning the area between the Monterey Bay and Point Conception. It extends through Santa Cruz County, San Benito County, Monterey County, San Luis Obispo County, and Santa Barbara County. ." In discussing the second quarter performance, Reese REESE Research and Evaluation on Education in Science and Engineering (National Science Foundation) T. Davies Da·vies , Arthur Bowen 1862-1928. American painter who was the chief organizer of the revolutionary Armory Show in 1913. , the Company's President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , commented: "I am excited about the progress that is occurring at First Bank. We recently added two experienced commercial loan officers so that we might serve an even greater number of local businesses. During the second half of 2004, we plan to remodel re·mod·el tr.v. re·mod·eled also re·mod·elled, re·mod·el·ing also re·mod·el·ling, re·mod·els also re·mod·els To make over in structure or style; reconstruct. part of our Main Office to install our "Small Business Resource Center" as yet another proactive step to be the bank of choice for local businesses. This will be an area where business owners and managers can come to obtain pertinent PERTINENT, evidence. Those facts which tend to prove the allegations of the party offering them, are called pertinent; those which have no such tendency are called impertinent, 8 Toull. n. 22. By pertinent is also meant that which belongs. Willes, 319. information, evaluate credit alternatives, review services, and discuss employee benefits." Mr. Davies then continued: "During the second quarter, we relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. our office for the sale of non-FDIC insured investments to a more visible and accessible location to help even more customers with their financial planning Financial planning Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against . First Bank has been regularly upgrading its technology, and recently activated activated a state of being more than usually active. In biological systems this is usually brought about by chemical or electrical means. Commonly said of pharmaceutical and chemical products. enhanced telephone The Enhanced Telephone is a telephone developed by Citibank in the late 1980s for customers to do banking and other financial transactions from their home. The official launch date was February 26-27, 1990. banking functionality to our First Phone service and upgraded our Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the site to furnish fur·nish tr.v. fur·nished, fur·nish·ing, fur·nish·es 1. To equip with what is needed, especially to provide furniture for. 2. improved support for interfacing with financial management software. Additional enhancements in our delivery of financial solutions and services are planned for the second half of the year. It's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have been exciting and gratifying to implement so much positive change in the past six months, as we continue to strive to provide superior customer service all of the time." The Company and the Bank are headquartered in San Luis Obispo, California San Luis Obispo (IPA: [sæn 'luɪs ə'bɪspoʊ]; Spanish for St. Louis, the Bishop) is a city in California, located roughly midway between San Francisco and Los Angeles on the Central Coast. . The Bank's deposits are insured by the Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation (FDIC), an independent U.S. federal executive agency designed to promote public confidence in banks and to provide insurance coverage for bank deposits up to $100,000. ("FDIC FDIC See: Federal Deposit Insurance Corporation FDIC See 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and . Forward-looking statements are typically identified by words or phrases such as "believe", "expect", "anticipate", "intend", "estimate", "target", "plans", "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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of such statements. This news release is available at the www.firstbankslo.com Internet site for no charge.
FIRST BANCSHARES, INC.
Consolidated Financial Highlights
Unaudited
(Dollars In Thousands)
June 30, Dec. 31,
2004 2003
------- -------
Financial Condition Data
Cash and due from banks $9,907 $11,083
Federal funds sold -- 13,242
Interest bearing deposits 156 9,479
Securities available for sale, at estimated
fair value:
Obligations of states and political
subdivisions 6,120 7,696
Mortgage backed securities 23,417 16,204
Collateralized mortgage obligations 34,130 44,609
Loans held for sale, at lower of cost or market 1,339 4,637
Loans receivable held for investment:
Residential one to four unit
real estate loans 17,313 16,852
Home equity lines of credit 14,097 12,730
Multifamily five or more units
real estate loans 11,648 7,533
Commercial and industrial real estate loans 73,905 69,208
Construction loans 18,930 10,908
Land / lot loans 19,240 17,317
Farm real estate loans 1,621 2,737
Farm business loans 309 688
Commercial business loans 18,967 20,022
Consumer loans 7,358 5,813
Sub-total gross loans held for investment 183,388 163,808
Less:
Deferred loan fees, costs, premiums, and
discounts (688) (665)
Allowance for loan losses (2,899) (2,531)
Loans receivable held for investment, net 179,801 160,612
Investment in capital stock of the Federal Home
Loan Bank, at cost 2,382 3,916
Accrued interest receivable 1,033 1,062
Premises and equipment, net 905 964
Bank owned life insurance 5,181 5,078
Other assets 4,936 3,712
Total assets $269,307 $282,294
Non-interest bearing demand deposits $54,238 $51,885
Interest bearing NOW checking accounts 20,282 19,868
Savings accounts 15,001 14,010
Money market accounts 65,803 60,520
Certificates of deposit 51,850 60,056
Total deposits 207,174 206,339
Advances from the Federal Home Loan Bank 31,964 46,908
ESOP debt -- 38
Junior subordinated debentures 8,077 8,052
Accrued interest payable 283 477
Other liabilities 2,709 2,005
Total liabilities 250,207 263,819
Stockholders' equity 19,100 18,475
Total liabilities and stockholders' equity $269,307 $282,294
FIRST BANCSHARES, INC.
Consolidated Financial Highlights, Continued
Unaudited
(Dollars In Thousands Except Per Share Amounts)
Three Six Three
Months Months Months
Ended Ended Ended
June 30, June 30, March 31,
2004 2004 2004
-------- -------- --------
Operating Data
Interest and dividend income (1) $3,648 $7,120 $3,472
Interest expense 764 1,607 843
Net interest income before provision
for loan losses 2,884 5,513 2,629
Provision for loan losses 100 350 250
Net interest income after provision
for loan losses 2,784 5,163 2,379
Non-interest income:
Gain on sale of loans 325 543 218
Customer service charges 245 449 204
Gains (losses) on sales of
securities, net -- 135 135
Income from loan servicing 7 75 68
Income from bank owned life
insurance 52 103 51
Credit card fees 11 30 19
Commissions from sales of
non-insured products 10 11 1
Other income 11 20 9
Total non-interest income 661 1,366 705
Non-interest expense:
Compensation and employee
benefits 1,316 2,629 1,313
Data and item processing 159 315 156
Occupancy 122 248 126
Equipment 79 160 81
Accounting, legal, and
consulting 105 302 197
Advertising and promotion 74 129 55
Supplies, printing, and postage 59 121 62
Director fees 46 103 57
Deposit insurance premiums 91 185 94
Other expenses 209 458 249
Total non-interest expense 2,260 4,650 2,390
Income before provision
for income taxes 1,185 1,879 694
Provision for income taxes 447 680 233
Net income $738 $1,199 $461
Shares applicable to basic and
diluted earnings per share 1,267,278 1,266,806 1,266,333
Basic and diluted earnings per share $0.59 $0.95 $0.36
(1) Not taxable equivalent
FIRST BANCSHARES, INC.
Selected Ratios And Other Data
Unaudited
(Dollars In Thousands Except Per Share Amounts)
Three Six Three
Months Months Months
Ended Ended Ended
June 30, June 30, March 31,
2004 2004 2004
-------- -------- --------
Profitability Ratios
Return on average assets 1.07% 0.87% 0.67%
Return on average equity 15.41% 12.69% 9.89%
Net interest income /
average total assets 4.17% 4.00% 3.82%
Efficiency ratio 63.75% 67.60% 71.69%
Other Information
Average total assets $276,580 $275,924 $275,268
Average stockholders' equity $19,170 $18,904 $18,638
Cash dividends paid per share $-- $0.25 $0.25
June 30, Dec. 31,
2004 2003
------- -------
Asset Quality Information
Non-accrual loans $-- $1,335
Allowance for loan losses $2,899 $2,531
Non-accrual loans /
total assets Not applicable 0.47%
Allowance for loan losses /
loans outstanding 1.58% 1.51%
Allowance for loan losses /
non-accrual loans Not applicable 189.59%
Bank Regulatory Capital Ratios
Leverage capital ratio 9.67% 8.52%
Tier one risk based capital ratio 12.91% 12.97%
Total risk based capital ratio 14.16% 14.22%
Other Information
Full-service customer facilities 2 2
Number of ATM's 3 3
Net loans to deposits ratio 87.43% 80.09%
Nominal and tangible book value
per share $15.07 $14.58
Shares of common stock outstanding 1,267,278 1,267,278
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