The First Bancshares, Inc. (FBMS) 8-K The First Bancshares, Inc. Reports 3rd Quarter 2014 Earnings and Declaration of Dividend

Exhibit 99.1

The First Bancshares, Inc. Reports 3^rd Quarter 2014 Earnings and Declaration of Dividend

HATTIESBURG, Miss.--(BUSINESS WIRE)--October 31, 2014--The First Bancshares, Inc. (NASDAQ: FBMS), holding company for The First, A National Banking Association, (www.thefirstbank.com) today reported earnings for the quarter ended September 30, 2014. The First Bancshares, Inc. also announced a quarterly dividend of $.0375 per common share. The record date will be November 10, 2014 with a payable date of November 25, 2014.

Net income available to common shareholders exclusive of merger related costs for the three months ended September 30, 2014 was $1,606,000, or $0.30 per diluted share, a 23.1% increase in net income available to common shareholders over the same quarter in 2013 adjusted for merger related costs. Net income available to common stockholders for the three months ended September 30, 2014 amounted to $1,448,000, or $0.27 per diluted share, compared to $998,000, or $0.19 per diluted share for the same quarter in 2013, an increase of $450,000 or 45.1% in net income available to common shareholders.

Net income available to common shareholders exclusive of one-time items for the nine months ended September 30, 2014 was $4,425,000, or $0.85 per diluted share, a 27.7% increase in net income available to common shareholders over the same period in 2013 adjusted for merger related costs. Net income available to common stockholders for the nine months ended September 30, 2014 amounted to $4,296,000, or $0.82 per diluted share, compared to $2,823,000, or $0.69 per diluted share for the same period in 2013, an increase of $1,473,000 or 52.2% in net income available to common shareholders.

M. Ray “Hoppy” Cole, President & Chief Executive Officer, commented, “We closed the acquisition of Bay Bank on July 1, 2014 and completed the system integration in August, 2014. We welcome our new clients, team members and shareholders from Bay Bank and look forward to our improved market coverage in the Mobile area with 10 locations in Mobile and Baldwin Counties, Ala. The combination of these two community-oriented institutions will provide our clients more convenient locations and expanded products and services to help reach their financial goals.”

Balance Sheet Highlights

Total assets for the Company totaled $1.1 billion at September 30, 2014, an increase of $63.0 million compared with June 30, 2014. The increase during the third quarter of 2014 was attributable to an increase in the Company’s deposit balances along with the acquisition of BCB Holdings, holding company of Bay Bank.

September 30, 2014 loans outstanding increased by $61.3 million, or approximately 40.2% on an annualized basis, compared with June 30, 2014, and increased $98.8 million, or 17.3%, compared to September 30, 2013 total loans outstanding. Loans acquired on July 1, 2014 from Bay Bank amounted to $40.9 million.

End of Period Loan Balances		09/30/14		06/30/14		09/30/13
(dollars in thousands)
Loans held for sale	$	3,769	$	3,220	$	1,399
Commercial		100,263		81,958		79,094
Real Estate:
Mortgage-commercial		217,684		204,101		198,123
Mortgage-residential		248,125		230,310		211,494
Construction		83,908		74,105		66,745
Consumer and other		17,553		16,337		15,658
	$	671,302	$	610,031	$	572,513

Non-performing assets totaled $11.4 million at September 30, 2014 compared to $13.3 million of non-performing assets at June 30, 2014 and $10.4 million at September 30, 2013. Non-performing assets represented 1.06% of total assets at September 30, 2014 compared to 1.32% of total assets at June 30, 2014, and compared to 1.09% at September 30, 2013. Non-performing loans totaled $6.1 million at September 30, 2014 compared to $6.5 million at June 30, 2014 and compared to $3.2 million of non-performing loans at September 30, 2013. Non-performing loans represented 0.91% of total loans at September 30, 2014 compared with 1.07% of total outstanding loans at June 30, 2014 and 0.55% of total loans outstanding at September 30, 2013.

Non-Performing Assets		09/30/14		06/30/14		09/30/13
(dollars in thousands)
Non-Accrual Loans	$	6,032	$	6,063	$	2,681
Past Due Loans (90 days or more)		102		447		471
Total Non-Performing Loans		6,134		6,510		3,152
Non-Accrual Securities		250		1,950		1,950
Other Real Estate		4,986		4,875		5,292
Total Non-Performing Assets	$	11,370	$	13,335	$	10,394

The Company’s allowance for loan losses totaled $6.1 million at September 30, 2014 representing an increase of $85,000, or 5.67% on an annualized basis, from June 30, 2014 and an increase of $412,000, or 7.26%, from September 30, 2013. The allowance for loan losses represented 0.91% of period-end loans at September 30, 2014 compared with 0.98% of period-end loans at June 30, 2014 and 0.99% of period-end loans at September 30, 2013. Under acquisition accounting treatment, loans acquired are recorded at fair value which includes a credit risk component, and therefore the allowance on loans acquired is not carried over from the seller. The allowance for loan losses represented 1.10% of period-end loans excluding those booked at fair value at September 30, 2014 compared with 1.16% at June 30, 2014 and 1.26% at September 30, 2013.

Total deposits increased $23.6 million or 10.7% on an annualized basis, as of September 30, 2014 compared with June 30, 2014 and increased by approximately $93.6 million or 11.5% compared with September 30, 2013. Deposits acquired from Bay Bank on July 1, 2014 were $58.1 million and totaled $54.2 million at the end of the period. A reduction in legacy deposits associated with seasonal fluctuations accounted for the difference in the net change in total deposits.

End of Period Deposit Balances		09/30/14		06/30/14		09/30/13
(dollars in thousands)
Non-interest-bearing Demand Deposits	$	195,957	$	183,226	$	169,001
IB Demand, Savings, and MMDA Accounts		500,637		498,527		434,449
Time Deposits < $100,000		86,897		80,144		88,907
Time Deposits > $100,000		124,024		121,975		121,608
	$	907,515	$	883,872	$	813,965

Results of Operations Highlights – Quarter ended September 30, 2014

Net income available to common shareholders exclusive of merger related costs for the three months ended September 30, 2014 was $1,606,000, or $0.30 per diluted share, a 11.68% increase in net income available to common shareholders compared to net income available to common shareholders exclusive of one-time items for the three months ended June 30, 2014 of $1,438,000, or $0.27 per diluted share. Net income available to common stockholders for the quarter ended September 30, 2014 totaled $1,448,000 or $0.27 per diluted share, a decrease of $79,000 or 5.17% from the second quarter of 2014 net income available to common stockholders of $1,527,000 or $0.29 per diluted share.

During the quarter ended September 30, 2014, net interest income totaled $8,855,000 representing an increase of $1,007,000, or 12.8%, compared with the quarter ended June 30, 2014 net interest income of $7,848,000 as well as an increase of $897,000, or 11.3%, compared with the quarter ended September 30, 2013 net interest income of $7,958,000. The tax equivalent net interest margin for the quarter ended September 30, 2014 was 3.79% compared to 3.52% for the quarter ended June 30, 2014 as compared to 3.86% for the quarter ended September 30, 2013. Changes in net interest income and net interest margin were due to increased average loans outstanding and seasonal fluctuations in interest-bearing deposit balances.

Fair value accounting adjustments on acquired assets and liabilities contributed approximately 7 basis points on an annualized basis to the net interest margin in the third quarter of 2014 and 12 basis points in the third quarter of 2013.

During the quarter ended September 30, 2014, non-interest income totaled $2,021,000, a decrease of $34,000 or 1.7%, compared with the quarter ended June 30, 2014, and an increase of $429,000, or 26.9%, compared with the third quarter of 2013. The decrease for the quarter ended September 30, 2014 is attributed primarily to a one-time gain of $254,000 from the sale of other investments that was recognized in the second quarter of 2014.

	Quarter Ended		Quarter Ended		Quarter Ended
Non-interest Income		09/30/14		06/30/14		09/30/13
(dollars in thousands)
Service Charges on Deposit Accounts	$	616	$	594	$	649
Mortgage Income		522		407		454
Interchange Fee Income		563		507		472
Other Operating Income		320		547		17
Total Non-interest Income	$	2,021	$	2,055	$	1,592

During the quarter ended September 30, 2014, non-interest expense totaled $8,071,000, an increase of $687,000, or 9.3%, compared with the quarter ended June 30, 2014, and an increase of $441,000, or 5.8%, compared with the third quarter of 2013.

	Quarter Ended		Quarter Ended		Quarter Ended
Non-interest Expense		09/30/14		06/30/14		09/30/13
(dollars in thousands)
Salaries and Employee Benefits	$	4,554	$	4,260	$	4,010
Occupancy, Furniture and Equipment Expense		1,209		1,093		802
FDIC Premiums		222		222		181
Professional Fees		429		456		618
Advertising and Promotion		94		87		98
Intangible Amortization		98		94		94
Other Operating Expenses		1,465		1,172		1,827
Total Non-interest Expense	$	8,071	$	7,384	$	7,630

Total non-interest expenses increased $687,000 for the third quarter of 2014 as compared to the second quarter of 2014. One-time merger related expenses of approximately $280,000 were expensed during the third quarter of 2014 as well as a write-down on other real estate in the amount of $125,000.

About The First Bancshares, Inc.

The First Bancshares, Inc., headquartered in Hattiesburg, Mississippi, is the parent company of The First, A National Banking Association. Founded in 1996, The First has operations in south Mississippi, Louisiana and south Alabama. The Company’s stock is traded on NASDAQ Global Market under the symbol FBMS. Information is available on the Company’s website: www.thefirstbank.com.

Forward Looking Statement

This news release contains statements regarding the projected performance of The First Bancshares, Inc. and its subsidiary. These statements constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act. Actual results may differ materially from the projections provided in this release since such projections involve significant known and unknown risks and uncertainties. Factors that might cause such differences include, but are not limited to: competitive pressures among financial institutions increasing significantly; economic conditions, either nationally or locally, in areas in which the Company conducts operations being less favorable than expected; and legislation or regulatory changes which adversely affect the ability of the combined Company to conduct business combinations or new operations. The Company disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Further information on The First Bancshares, Inc. is available in its filings with the Securities and Exchange Commission, available at the SEC’s website, http://www.sec.gov.

THE FIRST BANCSHARES, INC. (unaudited, dollars in thousands except per shares data) Consolidated Balance Sheets
	Sept 30, 2014			June 30, 2014			Sept 30, 2013
ASSETS
Cash and Due from Banks	$	33,111		$	25,677		$	26,110
Federal funds sold		1,298			2,477			1,328
Interest-bearing deposits with banks		16,038			27,289			24,326
Investment Securities		276,654			276,099			264,883
Loans held for sale		3,769			3,220			1,399
Loans, Net of Unearned Income		667,533			606,812			571,114
Allowance for Loan Losses		(6,084	)		(5,999	)		(5,672	)
Net Loans		661,449			600,813			565,442
Premises and Equipment		35,079			31,339			32,551
Other Real Estate Owned		4,986			4,875			5,292
Goodwill		12,310			10,621			10,621
Other Assets		27,568			26,879			19,943
TOTAL ASSETS	$	1,072,262		$	1,009,289		$	951,895
LIABILITIES
Non-interest-bearing Demand Deposits	$	195,957		$	183,226		$	169,001
Interest-bearing Accounts		500,637			498,527			434,449
Time Deposits		210,921			202,119			210,515
Total Deposits		907,515			883,872			813,965
Borrowings		49,456			13,500			30,000
Subordinated Debentures		10,310			10,310			10,310
Other Liabilities		11,117			11,830			13,860
TOTAL LIABILITIES		978,398			919,512			868,135
STOCKHOLDER’S EQUITY
Preferred Stock		17,123			17,123			17,082
Common Stock		5,338			5,180			5,134
Surplus		50,328			42,239			41,994
Retained Earnings		20,425			24,972			21,305
Accumulated Other Comprehensive Income (Loss)		1,114			727			(1,291	)
Treasury Stock		(464	)		(464	)		(464	)
TOTAL STOCKHOLDERS’ EQUITY		93,864			89,777			83,760
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,072,262		$	1,009,289		$	951,895
END OF PERIOD SHARES OUTSTANDING		5,338,370			5,180,287			5,107,131
TANGIBLE BOOK VALUE PER SHARE	$	11.58		$	11.49		$	10.43

THE FIRST BANCSHARES, INC. (unaudited, dollars in thousands except per share data) Consolidated Statements of Income
	Three Months Ended				Nine Months Ended
	Sept 30, 2014		Sept 30, 2013		Sept 30, 2014		Sept 30, 2013
INTEREST INCOME
Interest and Fees on Loans	$	8,059	$	7,216	$	22,154	$	18,765
Interest and Dividends on Securities		1,623		1,396		4,508		4,072
Interest on Fed Funds Sold		6		36		47		70
TOTAL INTEREST INCOME		9,688		8,648		26,709		22,907
INTEREST EXPENSE
Interest on Deposits		689		540		1,739		1,824
Interest on Borrowings		144		150		443		448
TOTAL INTEREST EXPENSE		833		690		2,182		2,272
NET INTEREST INCOME		8,855		7,958		24,527		20,635
Provision for Loan Losses		631		360		1,266		1,020
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		8,224		7,598		23,261		19,615
NON-INTEREST INCOME		2,021		1,592		5,748		5,412
NON-INTEREST EXPENSE		8,071		7,630		22,682		20,854
Income before Income Taxes		2,174		1,560		6,327		4,173
Income Taxes		641		456		1,754		1,032
NET INCOME		1,533		1,104		4,573		3,141
Preferred Stock Accretion & Dividends		85		106		277		318
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	1,448	$	998	$	4,296	$	2,823
BASIC EARNINGS PER SHARE	$	0.27	$	0.20	$	0.83	$	0.70
DILUTED EARNINGS PER SHARE	$	0.27	$	0.19	$	0.82	$	0.69
WEIGHTED AVG SHARES OUTSTANDING		5,311,876		5,102,572		5,198,776		4,058,432
DILUTED WEIGHTED AVG SHS OUTSTANDING		5,349,686		5,150,517		5,236,586		4,106,377

THE FIRST BANCSHARES, INC. (unaudited, dollars in thousands except per share data)
	Three Months Ended						Nine Months Ended
	Sept 30, 2014			Sept 30, 2013			Sept 30, 2014			Sept 30, 2013
EARNINGS PERFORMANCE RATIOS
Annualized Return on Average Assets		0.58	%		0.47	%		0.60	%		0.48	%
Annualized Return on Average Assets(1)		0.64	%		0.60	%		0.62	%		0.57	%
Annualized Return on Average Equity		6.81	%		5.66	%		6.94	%		5.56	%
Annualized Return on Average Equity(1)		7.51	%		7.22	%		7.14	%		6.69	%
Net Interest Margin		3.79	%		3.86	%		3.66	%		3.60	%
Efficiency Ratio(2)		72.39	%		77.58	%		72.99	%		77.63	%
Efficiency Ratio(1)(2)		70.23	%		73.04	%		72.30	%		73.52	%
Net Overhead Expense to Average Earning Assets(3)		2.51	%		2.82	%		2.45	%		2.59	%
Net Overhead Expense to Average Earning Assets(1)(3)		2.41	%		2.61	%		2.43	%		2.43	%
ASSET QUALITY RATIOS
Annualized Net Charge-offs to Average Loans		0.33	%		0.06	%		0.20	%		0.02	%
Allowance for Loan Losses to Period End Loans		0.91	%		0.99	%
Non-performing Assets to Period End Assets		1.06	%		1.09	%
Non-performing Loans to Period End Loans		0.91	%		0.55	%
Loans 30-89 Days Past Due to Period End Loans		0.32	%		0.54	%
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA
Average Assets	$	1,065,080		$	944,683		$	1,019,301		$	877,223
Average Earning Assets	$	964,508		$	855,107		$	922,462		$	793,903
Average Total Loans	$	657,925		$	566,291		$	621,174		$	506,461
Average Demand Deposits	$	194,357		$	119,670		$	180,841		$	104,536
Average Interest Bearing Liabilities	$	768,793		$	733,336		$	739,506		$	684,006
Average Equity	$	90,039		$	78,068		$	87,799		$	75,352
Period End Non-performing Assets	$	11,370		$	10,394
Period End Non-performing Loans	$	6,134		$	3,152
Period End Loans 30-89 Days Past Due	$	2,143		$	3,077
Tax Equivalent Net Interest Income	$	9,128		$	8,243		$	25,328		$	21,453
Net Charge-offs (Recoveries) during Period	$	546		$	81		$	910		$	75
(1)Excludes merger related costs and one-time items
(2)Efficiency Ratio is defined as Non-interest Expense divided by the sum of Net Interest Income, on a tax equivalent basis, and Non-Interest Income
(3)Net Overhead Expense is defined as Total Non-interest Expense less Total Non-interest income

CONTACT:
The First Bancshares, Inc.
M. Ray “Hoppy” Cole, 601-268-8998
Chief Executive Officer
or
Dee Dee Lowery, 601-268-8998
Chief Financial Officer