11
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period of ____________ to ____________
Commission file number 33-94288
THE FIRST BANCSHARES, INC.
(Exact name of the registrant as specified in its charter)
MISSISSIPPI 64-0862173
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6424 U.S. Highway 98 West
Suite A
Hattiesburg, MS 39402
(Address of Principal (Zip Code)
executive offices)
(601) 268 - 8998
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past
90 days.
YES ____X______ NO __________
Indicate the number of shares outstanding of each issuer's
classes of common stock, as of the latest practicable date.
Shares Outstanding at
Class of Common Stock September 30, 1996
$1 par value 721,848
Transitional small business disclosure format (check one): Yes
NO X
THE FIRST BANCSHARES, INC.
FORM 10-QSB
INDEX
Page
Part I. Financial Information Number
Item 1. Financial Statement (UNAUDITED)
Condensed Consolidated Balance Sheets
as of September 30, 1996 and
December 31, 1995 3
Condensed Consolidated Statement of Operations
for Three Months and Nine Months ended
September 30, 1996 and 1995 4
Condensed Consolidated Statement of Cash Flows
for Nine Months ended September 30, 1996
and 1995 5
Item 2. Management's Discussion and Analysis or Plan
of Operations 6
Part II. Other Information
Item 1. Legal Proceedings 7 - 8
Item 2. Changes in Securities 7 - 8
Item 3. Defaults Upon Senior Securities 7 - 8
Item 4. Submission of Matters to a Vote of
Security Holders 7 - 8
Item 5. Other Information 7 - 8
Item 6. Exhibits and Reports on Form 8-K 7 - 8
Signatures
THE FIRST BANCSHARES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
FOR DECEMBER 31, 1995 AND SEPTEMBER 30, 1996
(UNAUDITED)
ASSETS Dec. 31, 1995 Sept. 30, 1996
Cash $561 $718,331
Investments and Fed Funds Sold $0 $6,826,765
Loans Net Res and Unearned $0 $1,439,507
Deposits on Land $0 $143,174
Fixed Assets $148,345 $ 801,704
Accrued Income $0 $28,596
Organization Costs $73,008 $86,215
Deferred Registration Costs $30,354 $39,176
Other Assets $0 $124,493
TOTAL ASSETS $252,268 $10,207,961
========= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
LIABILITIES
Deposits $0 $3,355,325
Accounts payable
and accrued exp. $10,128 $27,382
Note payable bank $441,950 $100
Total Liabilities $452,078 $3,382,807
SHAREHOLDERS' EQUITY (DEFICIT)
Common stock par value
$1 per share; 10,000,000 shares
authorized; 634,061 shares issued
and outstanding $10 $721,848
Preferred stock par value
$1 per share; 10,000,000 shares
authorized; no shares issued
and outstanding $0 $ 0
Additional paid in capital $90 $6,496,632
Deficit accumulated during
the pre-opening stage ($199,910) ($388,484)
Unrealized Gain (Loss) on Sec. $0 ($4,842)
___________ ____________
Total Liabilities and
Capital $252,268 $10,207,961
=========== ===========
THE FIRST BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR
NINE MONTHS ENDED SEPTEMBER 30, 1996
AND FROM INCEPTION JUNE 23,1995 TO SEPTEMBER 30, 1995
(UNAUDITED)
INCOME Sept.30,1995 Sept.30, 1996
Interest Income:
Interest and Fees on Loans $0 $9,617
Interest Income on Balances
Due From Banks $0 $2,065
Interest on U.S. Treasury
and U.S. Agency and Corp$0 $97,669
Interest on Obligation of
States and Political
Subdivisions $0 $0
Interest on Other Securities $0 $0
Interest on Federal Funds Sold
and Securities Purchased
under Agreements to
Resell $0 $ 171,842
========= ==========
Total Interest Income $0 $ 281,193
Interest Expense:
Interest on Time Certificates
of Deposit of $100,000
or More $0 $ 2,288
Interest on Other Deposits $0 $24,970
Interest on Federal Funds
Purchased and Securities
Sold Under Agreement to
Repurchase $0 $0
Interest on Demand notes
Issued to the U.S.
Treasury and on Other
Borrowed Money $0 $0
Total Interest Expense $0 $27,258
Net Interest Income $0 $253,935
Provision for Possible Loan Losses$0 $ 6,398
NONINTEREST INCOME:
Income from Fiduciary
Activities $0 $0
Service Charge on Deposit
Accounts $0 $3,701
Other Noninterest Income $0 $207
Total Noninterest Income $1,173 $3,908
Gains (losses) on Securities $0 $0
NONINTEREST EXPENSE:
Salaries and Employee
Benefits $44,363 $ 232,235
Expense of Premises and
Fixed Assets $0 $56,545
Legal and Professional
Expense $87,062 $23,816
Other Noninterest
Expense $30,583 $127,423
Total Noninterest Expense $162,008 $440,019
Income Before Income Taxes($162,008) $188,574)
Applicable Income Taxes $0 $0
Income Before Extraordinary
items and Other
Adjustments ($162,008) ($188,574)
NET INCOME ($162,008) ($188,574)
Net Earnings Per Share ($16,200) ($.26)
THE FIRST BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THREE MONTHS ENDED
SEPTEMBER 30,1996 And FROM INCEPTION
JUNE 23,1995 TO SEPTEMBER 30,1995
THREE THREE
MONTHS MONTHS
ENDED ENDED
INCOME Sept. 30, 1995 Sept. 30, 1996
Interest Income:
Interest and Fees on Loans $0 $9,617
Interest Income on Balances
Due From Banks $0 $2,065
Interest on U.S.Treasury and
U.S. Agency and Corp $0 $21,357
Interest on Obligation of
States and Political $0 $0
Subdivisions
Interest on Other Securities $0 $0
Interest on Federal Funds Sold
and Securities Purchased
under Agreements to Resell $0 $82,095
======== ========
Total Interest Income $0 $115,134
Interest Expense:
Interest on Time Certificates of
Deposit of $100,000 or More $0 $2,288
Interest on Other Deposits $0 $24,970
Interest on Federal Funds Purchased
and Securities Sold Under Agreement
to Repurchase $0 $0
Interest on Demand notes Issued to
the U.S. Treasury and on Other $0 $0
Borrowed Money
======= ========
Total Interest Expense $0 $27,258
Net Interest Income $0 $87,876
Provision for Possible Loan Losses $0 $6,398
NONINTEREST INCOME:
Income from Fiduciary Activities $0 $0
Service Charge on Deposit Accounts $0 $3,701
Other Noninterest Income $0 $207
======== ========
Total Noninterest Income $0 $3,908
Gains (losses) on Securities $0 $0
NONINTEREST EXPENSE:
Salaries and Employee Benefits $44,363 $106,545
Expense of Premises and Fixed Assets $0 $46,200
Legal and Professional Expense $87,062 $1,632
Other Noninterest Expense $30,583 $93,755
Total Noninterest Expense $162,008 $248,132
Income(Loss) Before Income Taxes($162,008) ($162,746)
Applicable Income Taxes $0 $0
Income (Loss) Before
Extraordinary items and ($162,008) ($162,746)
NET INCOME(LOSS) ($162,008) ($162,746)
Net Earnings Per Share ($16,200) ($.23)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIOD JANUARY 1, 1996 TO SEPTEMBER 30, 1996
AND INCEPTION, JUNE 23, 1995 UNTIL SEPTEMBER 30, 1995
(UNAUDITED)
Sept 30, 1995 Sept. 30, 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net Profit (Loss) ($162,008) ($188,574)
Adjustment to reconcile net profit
to net cash used in operating activities:
Increase in accounts payable and
accrued expenses $5,706 $17,262
Net cash used in operating activities($156,302) ($171,312)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of premises and equipment ($23,523) ($ 829,410)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the sale of common stock $100 $7,218,380
Proceeds from Note Payable $259,300 $0
Payments on debt obligations $0 ($441,850)
Increase in organizational and
deferred registration costs ($73,806) ($ 22,029)
Net cash from financing activities $185,594 $5,925,091
Net increase in cash and
cash equivalents $5,769 $5,753,779
Cash and cash equivalents
at beginning of period $0 $561
Cash and cash equivalents
at end of period $5,769 $5,754,340
Item 2. Management's Discussion and Analysis or Plan of
Operation
The Company was organized on June 23, 1995 (the "Inception
Date"). From the Inception Date through August 2, 1996, the
Company's principal activities related to its organization, the
conducting of its initial public stock offering, and pursuit of
approval from the Office of the Comptroller of the Currency
("OCC") for its application to charter its subsidiary bank, The
First National Bank of South Mississippi (the "Bank"). The First
National Bank of South Mississippi received its national bank
charter and commenced operations on August 5, 1996.
On February 8, 1996, the Company satisfied the condition for
releasing subscription funds from escrow. Proceeds in the amount
of $5,652,380 received through that date were transferred to the
Company. These proceeds, along with subscription proceeds
received subsequent to February 8, 1996, are available for use by
the company to fund offering and organizational expenses and for
working capital. The company used a portion of the proceeds to
repay the Organizers for amounts advanced by them for
organizational, offering, and pre-offering expenses. On August
27, 1996, the Company terminated the subscription offering.
Subscriptions representing 721,848 shares and $7,218,480 were
sold pursuant to the offering.
Since the Company was not operating for the period ended
September 30, 1995, no comparisons are provided. This discussion
will concentrate on rh nine months and three months period ended
September 30, 1996. At September 30 1996, the Company had total
assets of $10,207,961 consisting principally of Cash of $718,331,
Investments and Fed Funds Sold of $6,826,765, Loans (Net of
Reserves and Unearned Income) of $1,439,507, Deposits on Land of
$143,174, Fixed Assets of $801,704, Organization Costs of
$86,215, and Deferred Registration Costs of $39,176. The
Organization Costs related to the organization of the Company and
the Bank have been capitalized and will be amortized over five
years. Deferred Registration Costs will be deducted from paid in
capital.
The Company's liabilities at September 30, 1996 were
$3,382,815 consisting principally of Deposits of $3,355,325,
Accounts Payable and Accrued Expenses of $27,390 and Notes
Payable of $100 . The Company had Capital of $6,825,145 and a
net loss of $188,574.
The Company intends to devote the remainder of this fiscal
year to the completion of the operation of the Bank and the
opening of one branch facility, and organizing and developing the
other business activities of the Company. On August 5, 1996 the
Company and the Bank commenced operations. During the three
months ended September 30, 1996, the Company incurred pre-opening
expenses of $47,994 which were offset by interest earnings on
invested funds during the pre-opening period in the amount of
$17,024. The net loss for the three month period, including per
opening expenses amounted to $188,574. The company used
$5,298,960 of the proceeds of the offering to capitalize the Bank
and the remainder was used to pay organizational expenses of the
Company and will provide working capital, including additional
capital for investment in the Bank, if needed. the Company
believes that these amounts are sufficient to fund the activities
of the Bank in its initial stages of operations, and that the
Bank will generate sufficient income from operations to fund its
activities on an on-going basis.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
There are no material legal proceedings to which the Company
is a party or of which any of their property is subject.
Item 2. Changes in Securities.
(a) Not applicable.
(b) Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
There were no matters submitted to security holders for a
vote during the three months ended September 30, 1996.
Item 5. Other Information.
The initial stock offering was closed on August 27, 1996
after 721,848 shares were sold generating capital of $7,218,480.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
3.1 Articles of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 of the
Registration Statement on Form S-1, File No. 33-94288.)
3.2 Bylaws of the Company (incorporated by reference
to Exhibit 3.2 of the Registration Statement on Form S
1, File No. 33-94288.)
4.1 Provisions in the Company's Articles of
Incorporation and Bylaws defining the rights of holders
of the Company's common Stock (incorporated by
reference to Exhibit 4.1 of the Registration Statement
on Form S-1, File No. 33-94288.)
10.3 Contract for the Purchase and assignment of 16th
Section Leasehold, dated June 26, 1995 by and between
the proposed bank and Department of Public Safety,
State of Mississippi (incorporated by reference to
Exhibit 10.4 of the Registration Statement on Form S-1,
File No. 33-94288.)
10.4 Option to purchase, dated May 23, 1995, among
proposed bank, John Hudson, and La Carroll Hudson
(incorporated by reference to Exhibit 10.4 of the
Registration Statement on Form S-1, File No. 33-94288.)
10.5 Lease agreement, dated June 21, 1995, among Joel
S. Thoms, individually, Thoms Enterprises, Inc. and the
Company (incorporated by reference to Exhibit 10.5 of
the Registration Statement on Form S-1, File No. 33
94288.)
10.7 Amended and restated employment agreement dated
November 20, 1995, between David E. Johnson and the
Company (incorporated by reference to Exhibit 10.7 of
the Company's Form 10-KSB for the fiscal year ended
December 31, 1995, File No. 33-94288).
27.1 Financial Data Schedule
The Company did not file any reports on Form 8-K during the three
months ended September 30, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registration has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
THE FIRST BANCSHARES, INC.
(Registrant)
DAVID E. JOHNSON
November 12, 1996 DAVID E. JOHNSON
Date President and CEO
CHARLES T. RUFFIN
CHARLES T. RUFFIN
Executive Vice President
and Chief Operating
Officer