10QSB 1 mainthird.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: September 30, 2002 ------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER: 33-94288 ------------- THE FIRST BANCSHARES, INC. ----------------------------------- (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER) MISSISSIPPI 64-0862173 (STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.) 6480 U.S. HIGHWAY 98 WEST HATTIESBURG, MISSISSIPPI 39404-5549 ---------------------------------- ------------------------------------ (ADDRESS OF PRINCIPAL (ZIP CODE) EXECUTIVE OFFICES) (601) 268-8998 ------------------------------------------------ (ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE) NONE -------------------------------------------------------------------- (FORMER NAME, ADDRESS AND FISCAL YEAR, IF CHANGED SINCE LAST REPORT) INDICATE BY CHECK MARK WHETHER THE ISSUER: (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 (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO --- --- ON OCTOBER 31, 2002, 1,165,165 SHARES OF THE ISSUER'S COMMON STOCK, PAR VALUE $1.00 PER SHARE, WERE ISSUED AND OUTSTANDING. TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): YES NO X --- --- PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS THE FIRST BANCSHARES, INC. CONSOLIDATED BALANCE SHEETS ($ amounts in thousands) (Unaudited) September 30, December 31, ASSETS 2002 2001 ________ ________ Cash and due from banks $ 4,836 $ 4,080 Interest-bearing deposits with banks 543 1,358 Federal funds sold 5,070 3,896 ________ ________ TOTAL CASH AND CASH EQUIVALENTS 10,449 9,334 Securities held-to-maturity, at amortized cost 25 32 Securities available-for-sale, at fair value 23,335 22,915 Loans 103,052 91,178 Allowance for loan losses (1,194) (1,060) ________ ________ LOANS, NET 101,858 90,118 Loans held for sale 3,693 3,113 Premises and equipment 8,050 7,615 Accrued income receivable 939 962 Cash surrender value 1,964 757 Other assets 2,223 775 ________ ________ $152,536 $135,621 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Deposits: Noninterest-bearing $ 16,128 $ 15,254 Time, $100,000 or more 31,624 28,776 Interest-bearing 67,626 69,208 ________ ________ TOTAL DEPOSITS 115,378 113,238 Interest payable 248 352 Borrowed funds 14,695 7,832 Trust preferred securities 7,000 - Other liabilities 485 208 ________ ________ TOTAL LIABILITIES 137,806 121,630 SUBORDINATED DEBENTURES - SHAREHOLDERS' EQUITY: Common stock, $1 par value. Authorized 10,000,000 shares; 1,165,165 and 1,155,412 shares issued and outstanding at September 30, 2002 and December 31, 2001, respectively. 1,165 1,155 Preferred stock, par value $1 per share, 10,000,000 shares authorized; no shares issued and outstanding - - Additional paid-in capital 12,512 12,412 Retained earnings 876 313 Accumulated other comprehensive income 177 111 ________ ________ TOTAL SHAREHOLDERS' EQUITY 14,730 13,991 ________ ________ $152,536 $135,621 ======== ======== THE FIRST BANCSHARES, INC. CONSOLIDATED STATEMENTS OF INCOME ($ amounts in thousands except earnings per share) (Unaudited) (Unaudited) Three Months Nine Months Ended Ended September 30, September 30, ______________ ______________ 2002 2001 2002 2001 ______ ______ ______ ______ INTEREST INCOME: Loans, including fees $2,412 $2,139 $6,552 $6,358 Securities: Taxable 195 231 614 841 Tax exempt 24 1 40 7 Federal funds sold 13 81 45 239 Other - 18 45 44 ______ ______ ______ ______ TOTAL INTEREST INCOME 2,644 2,470 7,296 7,489 INTEREST EXPENSE: Deposits 675 1,126 2,213 3,628 Other borrowings 253 87 578 265 ______ ______ ______ ______ TOTAL INTEREST EXPENSE 928 1,213 2,791 3,893 ______ ______ ______ ______ NET INTEREST INCOME 1,716 1,257 4,505 3,596 PROVISION FOR LOAN LOSSES 50 99 259 265 ______ ______ ______ ______ NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,666 1,158 4,246 3,331 OTHER INCOME: Service charges on deposit accounts 369 186 980 438 Other service charges, commissions and fees 114 124 270 301 ______ ______ ______ ______ TOTAL OTHER INCOME 483 310 1,250 739 OTHER EXPENSES: Salaries and employee benefits 884 640 2,346 1,836 Occupancy and equipment expense 293 189 762 532 Other operating expenses 491 383 1,353 1,068 ______ ______ ______ ______ TOTAL OTHER EXPENSES 1,668 1,212 4,461 3,436 ______ ______ ______ ______ INCOME BEFORE INCOME TAXES 481 256 1,035 634 INCOME TAXES 164 79 355 218 ______ ______ ______ ______ NET INCOME $ 317 $ 177 $ 680 $ 416 ====== ====== ====== ====== INCOME PER SHARE - BASIC $ .27 $ .15 $ .58 $ .36 INCOME PER SHARE - ASSUMING DILUTION $ .26 $ .15 $ .57 $ .35 THE FIRST BANCSHARES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS ($ Amounts in Thousands) (Unaudited) Nine Months Ended September 30, __________________ 2002 2001 ________ ________ CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME $ 680 $ 416 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 372 335 Provision for loan losses 259 265 (Increase) decrease in accrued interest receivable (23) 133 Increase (decrease) in interest payable 104 (72) Other, net (1,371) (544) ________ ________ NET CASH PROVIDED BY OPERATING ACTIVITIES 21 533 ________ ________ CASH FLOWS FROM INVESTING ACTIVITIES: Maturities and calls of held-to-maturity securities 7 27 Maturities and calls of securities available-for-sale 17,876 17,152 Purchases of securities available-for-sale (18,196) (22,965) Net increase in loans (12,579) (10,326) Purchases of premises and equipment (803) (505) Increase in cash surrender value (1,207) - ________ ________ NET CASH USED BY INVESTING ACTIVITIES (14,902) (16,617) ________ ________ CASH FLOWS FROM FINANCING ACTIVITIES: Increase in deposits 2,140 17,420 Increase in trust preferred securities 7,000 - Dividends paid on common stock (117) - Exercise of stock options 110 - Net increase in borrowed funds 6,863 530 ________ ________ NET CASH PROVIDED BY FINANCING ACTIVITIES 15,996 17,950 ________ ________ NET INCREASE IN CASH 1,115 1,866 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 9,334 6,906 ________ ________ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 10,449 $ 8,772 ======== ======== CASH PAYMENTS FOR INTEREST $ 2,895 $ 3,965 CASH PAYMENTS FOR INCOME TAXES 267 125 THE FIRST BANCSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE A -- BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2002, are not necessarily indicative of the results that may be expected for the year ended December 31, 2002. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company's Form 10-KSB for the year ended December 31, 2001. NOTE B -- SUMMARY OF ORGANIZATION The First Bancshares, Inc., Hattiesburg, Mississippi (the "Company"), was incorporated June 23, 1995, under the laws of the State of Mississippi for the purpose of operating as a bank holding company with respect to a then proposed de novo bank, The First National Bank of South Mississippi, Hattiesburg, Mississippi (the "Hattiesburg Bank"). The Hattiesburg Bank opened for business on August 5, 1996, with a total capitalization of $5.2 million. On August 10, 1998, the Company filed a registration statement on Form SB-2 relating to the issuance of up to 533,333 shares of Common Stock in connection with the formation of the First National Bank of the Pine Belt (Laurel Bank). The offering was closed on December 31, 1998, with 428,843 shares subscribed with an aggregate purchase price of $6.4 million. On January 19, 1999, the Laurel Bank received approval from its banking regulator to begin banking operations, and the Company used $5 million of the net proceeds to purchase 100% of the capital stock of the Laurel Bank. Simultaneously, the 428,843 shares subscribed to in the offering were issued. The Hattiesburg and Laurel Banks are wholly-owned subsidiaries of the Company. The Company's strategy is for the Hattiesburg Bank and the Laurel Bank to operate on a decentralized basis, emphasizing each Bank's local board of directors and management and their knowledge of their local community. Each Bank's local board of directors acts to promote its Bank and introduce prospective customers. The Company believes that this autonomy allows each Bank to generate high-yielding loans and to attract and retain core deposits. The Hattiesburg Bank and the Laurel Bank engage in general commercial banking business, emphasizing in its marketing the Bank's local management and ownership. The Banks offer a full range of banking services designed to meet the basic financial needs of its customers. These services include checking accounts, NOW accounts, money market deposit accounts, savings accounts, certificates of deposit, and individual retirement accounts. The Banks also offer short to medium-term commercial, mortgage, and personal loans. At September 30, 2002, the Company had approximately $152.5 million in consolidated assets, $101.9 million in consolidated loans, $115.3 million in consolidated deposits, and $14.7 million in consolidated shareholders' equity. For the nine months ended September 30, 2002, the Company reported a consolidated net income of $680,000. For the same period, the Laurel Bank reported net income of $151,000, and the Hattiesburg Bank net income of $655,000. The Company declared and paid its first dividend since inception of $.10 per common share during the first quarter of 2002. NOTE C -- EARNINGS PER COMMON SHARE Basic per share data is calculated based on the weighted-average number of common shares outstanding during the reporting period. Diluted per share data includes any dilution from potential common stock outstanding, such as exercise of stock options. For the Three Months Ended September 30, 2002 _____________________________________ Net Income Shares Per Share (Numerator) (Denominator) Data _________ ___________ __________ Basic per share $317,000 1,165,165 $ .27 ===== Effect of dilutive shares: Stock options - 35,145 ________ _________ Diluted per share $317,000 1,200,310 $ .26 ======== ========= ===== For the Nine Months Ended September 30, 2002 _____________________________________ Net Income Shares Per Share (Numerator) (Denominator) Data _________ ___________ __________ Basic per share $680,000 1,165,165 $ .58 ===== Effect of dilutive shares: Stock options - 35,137 ________ _________ Diluted per share $680,000 1,200,302 $ .57 ======== ========= ===== For the Three Months Ended September 30, 2001 _____________________________________ Net Income Shares Per Share (Numerator) (Denominator) Data _________ ___________ __________ Basic per share $177,000 1,152,878 $ .15 ===== Effect of dilutive shares: Stock options - 23,333 ________ _________ Diluted per share $177,000 1,176,211 $ .15 ======== ========= ===== For the Nine Months Ended September 30, 2001 _____________________________________ Net Income Shares Per Share (Numerator) (Denominator) Data _________ ___________ __________ Basic per share $416,000 1,152,878 $ .36 ===== Effect of dilutive shares: Stock options 23,333 ________ _________ Diluted per share $416,000 1,176,211 $ .35 ======== ========= ===== ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION The following discussion contains "forward-looking statements" relating to, without limitation, future economic performance, plans and objectives of management for future operations, and projections of revenues and other financial items that are based on the beliefs of the Company's management, as well as assumptions made by and information currently available to the Company's management. The words "expect," "estimate," "anticipate," and "believe," as well as similar expressions, are intended to identify forward-looking statements. The Company's actual results may differ materially from the results discussed in the forward-looking statements, and the Company's operating performance each quarter is subject to various risks and uncertainties related to the banking industry. The Hattiesburg Bank completed its first full year of operations in 1997 and has grown substantially since opening on August 5, 1996. The Laurel Bank has been in operation since January 19, 1999. Comparisons of the Company's results for the periods presented should be made with an understanding of the subsidiary Banks' short histories. The subsidiary Banks represent the primary assets of the Company. The Hattiesburg Bank reported total assets of $102.8 million at September 30, 2002, compared to $87.1 million at December 31, 2001. Loans increased $10.1 million, or 16.2%, during the first nine months of 2002. Deposits at September 30, 2002, totaled $81.2 million compared to $74.6 million at December 31, 2001. For the nine month period ended September 30, 2002, the Hattiesburg Bank reported net income of $655,000, compared to $424,000 for the nine months ended September 30, 2001. At September 30, 2002, the Laurel Bank had total assets of $48.1, compared $47.8 million at December 31, 2001, total loans of $30.8 million, compared to $29.0 million at December 31, 2001, and total deposits of $39.7, compared to $40.0 million at December 31, 2001. For the nine month period ended September 30, 2002, the Laurel Bank reported net income from operations of $151,000, compared to $91,000 for the nine months ended September 30, 2001. NONPERFORMING ASSETS AND RISK ELEMENTS. Diversification within the loan portfolio is an important means of reducing inherent lending risks. At September 30, 2002, the subsidiary Banks had no concentrations of ten percent or more of total loans in any single industry nor any geographical area outside their immediate market areas. At September 30, 2002, the subsidiary banks had loans past due as follows: ($ In Thousands) Past due 30 through 89 days $1,291 Past due 90 days or more and still accruing 135 The accrual of interest is discontinued on loans which become ninety days past due (principal and/or interest), unless the loans are adequately secured and in the process of collection. Nonaccrual loans totaled $231,000 at September 30, 2002. Any other real estate owned is carried at fair value, determined by an appraisal. Other real estate owned totaled $146,000 at September 30, 2002. A loan is classified as a restructured loan when the interest rate is materially reduced or the term is extended beyond the original maturity date because of the inability of the borrower to service the debt under the original terms. The subsidiary Banks had no restructured loans at September 30, 2002. LIQUIDITY AND CAPITAL RESOURCES Liquidity is adequate with cash and cash equivalents of $10.4 million as of September 30, 2002. In addition, loans and investment securities repricing or maturing within one year or less exceed $36.4 million at September 30, 2002. Approximately $11.1 million in loan commitments are expected to be funded within the next six months and other commitments, primarily standby letters of credit, totaled $328,000 at September 30, 2002. There are no known trends or any known commitments of uncertainties that will result in the subsidiary banks' liquidity increasing or decreasing in a material way. In addition, the Company is not aware of any recommendations by any regulatory authorities which would have a material effect on the Company's liquidity, capital resources or results of operations. Total consolidated equity capital at September 30, 2002, is $14.7 million, or approximately 9.7% of total assets. The Hattiesburg Bank and Laurel Bank currently have adequate capital positions to meet the minimum capital requirements for all regulatory agencies. Their capital ratios as of September 30, 2002, are as follows: Hattiesburg Laurel Bank Bank _____ _____ Tier 1 leverage 9.4% 10.3% Tier 1 risk-based 11.9% 13.1% Total risk-based 12.9% 14.2% On March 26, 2002, The First Bancshares Statutory Trust 1 (the Trust), a wholly-owned subsidiary trust of the Company, issued $7,000,000 of redeemable cumulative trust preferred securities. The Trust used the funds to acquire floating rate subordinated debentures from the Company. The debentures had an initial interest rate of 5.59% which was adjusted at June 26, 2002, to the 3-month LIBOR plus 3.60%. The debentures have a maturity of 30 years. These debentures qualify as Tier 1 capital up to 25% of other components of Tier 1 capital. RESULTS OF OPERATIONS The Company had a consolidated net income of $680,000 for the nine months ended September 30, 2002, compared with consolidated net income of $416,000 for the same period last year. Interest income and interest expense both declined in 2002 when compared to 2001 reflecting the declining interest rate market. Net interest income for the first nine months ended September 30, 2002, increased to $4.5 million from $3.6 million for the first nine months ended September 30, 2001, or an increase of 25.3%. Earning assets through September 30, 2002, increased $12.2 million and interest-bearing liabilities also increased $13.5 million compared to September 30, 2001, reflecting increases of 9.9% and 12.6%, respectively. The subsidiary banks are slightly negatively gapped, which means interest-bearing liabilities reprice more frequently than interest-bearing assets. Noninterest income for the nine months ended September 30, 2002, was $1.2 million, compared to $739,000 for the same period in 2001, reflecting an increase of $511,000, or 69.1%. Included in noninterest income is service charges on deposit accounts, which for the nine months ended September 30, 2002, totaled $980,000, compared to $438,000 for the same period in 2001, and is a reflection of the continuing growth of the deposit base, as well as improvement in the fee pricing structure. The provision for loan losses was $259,000 in the first nine months of 2002 compared to $265,000 in the first nine months of 2001. The allowance for loan losses of $1.2 million at September 30, 2002 (approximately 1.1% of loans) is considered by management to be adequate to cover losses inherent in the loan portfolio. The level of this allowance is dependent upon a number of factors, including the total amount of past due loans, general economic conditions, and management's assessment of potential losses. This evaluation is inherently subjective as it requires estimates that are susceptible to significant change. Ultimately, losses may vary from current estimates and future additions to the allowance may be necessary. Thus, there can be no assurance that charge-offs in future periods will not exceed the allowance for loan losses or that additional increases in the loan loss allowance will not be required. Management evaluates the adequacy of the allowance for loan losses quarterly and makes provisions for loan losses based on this evaluation. Other expenses increased by $1.0 million, or 29.8%, for the nine months ended September 30, 2002, when compared with the same period in 2001. This increase is primarily due to the continued growth of the two financial institutions and the related services being offered. ITEM 3. - CONTROLS AND PROCEDURES Within 90 days prior to the filing of this report, an evaluation under the direction of the Company's Chief Executive Officer and Principal Accounting Officer was performed to determine the effectiveness of the Company's disclosure controls and procedures. These controls and procedures were found to be adequate. There were no significant changes in the Company's internal controls or other factors subsequent to the date of the evaluation that could significantly affect these controls. PART II -- OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULT UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K b) The Company did not file any reports on Form 8-K during the quarter ended September 30, 2002. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE FIRST BANCSHARES, INC. -------------------------- (Registrant) November 8, 2002 /S/ DAVID E. JOHNSON ______________________________ _________________________________ (Date) David E. Johnson, President and Chief Executive Officer November 8, 2002 /S/ DAVID O. THOMS, JR. ______________________________ _________________________________ (Date) David O. Thoms, Jr., Senior Vice President and Principal Accounting and Financial Officer CERTIFICATIONS CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, David E. Johnson, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of The First Bancshares, Inc. 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. November 8, 2002 /S/ DAVID E. JOHNSON ______________________________ _________________________________ (Date) David E. Johnson, President and Chief Executive Officer CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, David O. Thoms, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of The First Bancshares, Inc. 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. November 8, 2002 /S/ DAVID O. THOMS, JR. ______________________________ _________________________________ (Date) David O. Thoms, Jr., Senior Vice President and Principal Accounting and Financial Officer CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with The First Bancshares, Inc. (the "Company") Quarterly Report on Form 10-QSB for the period ending September 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, David E. Johnson, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. November 8, 2002 /S/ DAVID E. JOHNSON Date: _____________________ By: _____________________________________ David E. Johnson, President and Chief Executive Officer CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with The First Bancshares, Inc. (the "Company") Quarterly Report on Form 10-QSB for the period ending September 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, David O. Thoms, Jr., certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. November 8, 2002 /S/ DAVID O. THOMS, JR. Date: _____________________ By: _____________________________________ David O. Thoms, Jr., Senior Vice President and Principal Accounting and Financial Officer