Annual Report of Holding Companies-FR Y·6

Transcription

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OME\ Nvmixr 7100-0'97
COPY
Apfl«lvAI expi'
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er31, 201 5
1 of2
Board of Governors of the Federal Reserve System
Annual Report of Holding Companies-FR Y·6
Report at the close of business as of the end of fiscal year
This Report is reqvired by law: Section 5(c)(1)(A) of the Bank
Holding Company Act (12 U.S.C. § 1844 (cX1l(A)): Sec t ion 8(a)
This report form is to be filed by all top-tier bank holding compa
nies and top-tier savings anc! loan holding oompanies organized
(12 C.F.R. § 211.13(c)); and Section 225.5(b) of Regulation Y (12
C.F.R. § 225.5(b)) and section 10(c)(2)(H) of the Home Owners'
Loan Act. Return to the appropriate Federal Reseive Sank the
Regulation K (12 C.F.R. § 211 .23). (See page one of the general
instruc t ions for more detail of who must fife.) The Federal
of the International Banking Act (12 U.S.C. § 3106{a)); Sections
11(a)(1), 25 and 25A of the Federal Reserve Act (12 U.S.C.
§§ 248(aX1), 602, and 611a); Section 211.13(c) of Regulation K
original and the number of copies specified.
under U.S. law, and by any foreign banking organization that
does not meet the requirements of and is not treated as a qualify
ing foreign banking organization under Section 211.23 of
Reserve may not conduct or sponsor, and an organization (or a
person) is not required to respond to, an information oollection
unless it displays a currenUy valid OMB control number.
NOTE: The Ann ual Report of Holding Compimies must be signed
by one director of the top-tier holding company. This Individual
should also be a senior official of the top-tier holding company. In
the event that the top-tier holding company does not have an
indiv•dual who Is a senior offici<::il and is also a dire<..'tor, the chair
Date of Report (top-tier holding company's
ftscal year-end):
l)ece.m.ber. 3!?.- 01_4
________
_
Month l Dey .'Year
man of the board must sign the report.
R J,let'llJr's LE;ga! Entity ldtwtifier (LElj (20-Character LEI Code)
1. Mi cha el E. Sch rage
Reporte(s Name, Street, and Mailing Address
Name of 1he Holdif'9Compe rPf Dlrec:ior
nd Offlc:l31
President & Chairman of the
Board
Title nflhP. Hnlc hng Com ()3nv Oirectofana Offi¢i;>1
attest that the Annuel Report of Holding Compan ie s (including
the supporting attachments) for this report date has been pre
pared in conformance with the Instructions issued by the Federal
Reserve System and are true and correct to the best of my
knowledge and belief.
IM°th respect to information ragarr!ing individuals contained in this
raport, the Reporter
rtifies that it has the autt>olity to provide this
information to the Federel Reserve. The Repotter else certifies
th&t has the authority, on behalf of eaclt individual, to consent o r
obj&CI t o pu blic release of informat
o
i n regarding that individual.
The Federal Reserve may assume, fn the absence of a request for
confidential traatment subm
d in accordance with the Board's
"Rules Regarding Availability of Information,• 12 C.F.R. Pert 261 ,
that the Reporwr and indivi<fual consent to public release of all
details in the report concemin that individual.
First Bancshares, Inc.
Legal TithJ or Holdi •lQ c omv uy
600 E a s t 84th Avenue
(M<fili119 Addnis;s oftt•e Hold ing Corupoiny} S1reE; t i PO
. .
Merrillville
Booe
IN
46410-6366
Cit y
Zip Code
Ph y &ie&I Locetion (if differen; from mailing address)
Person to whom questions about this report should be directed:
J.oseph
C. Erpelding
Treasurer
Na me
Title
219-755-6196
A rea Code I Phcoe Nurnt.ter .' Eictl'!nsior.
219-660-4359
Are. Cn<Se l FA)( Numl)e<
jerpeldi@centier.com
E·m('lil Adelr"e$$
tuitt Of 1-!'oldi•)i,I C ou1 pa n y
Oir&ctor and Offici
0312712015
Da
of SignatlJre
For holding companies DfJ1. registered with me SEC-
Indicate status ofAnnual Report to Shaireholders:
181
0
0
is in<:luded with the FR Y-6 repor t
Does the tepOt'ltlt t9q1H11SI cooftdoolit-tl treatment fvr {iir>y ()or#on
ofthis
submission?
0 Yes
Please ldentUy the fepoft items to w h ich this request applCQos:
will be sent under sep ara te cover
is not prepared
OIn accoroance wilh th& Instructions on pages GE.N-2
For Federal Reserve
and 3, a tet ter justifying tile requ%t is being provided.
Bank Uee Only
O The inf0<matlon for which confldentlal t'eatm&nt 1s sought
/-:) tJ t/!J-;,a
RSSDID
C.L
is being 5ubmitted
5epar4'lely labeled
"Confidential."
No
0ublit • p!>":in;,i blJn"lr,n fQr ti1is informa on o::;llectiof'I is e&$ima d tc \'ill 'Y from 1 i 10 101 hovr.<>
1'9$p O n$ v1ith an ave,... ;)e cf .2 5 l'ooors per res
" · includ i ng time 10 g<1ther and
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FIRST BANCSHARES, INC. AND SUBSIDIARIES MERRILLVILLE, INDIANA CONSOLIDATED FINANCIAL STATEMENTS December 31, 2014 and 2013
FIRST BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEM ENTS December 31, 2014 and 2013 CONTENTS
INDEPENDENT AUDITOR'S REPORT . . . . . . . ............. ... . ............................................. ................ ..............
1
CONSOLIDATED FINANCIAL STATEM ENTS
CONSOLIDATED BALANCE SHEETS . .. . . . . . . . . . . . . . .. . . . . . . . . . . . .. . . . . . . .. . . . . .. . . . . . .... . . . . . . . . . . ... . .. ... . . . .. . .... . .. . .. . ....
3
CONSOLIDATED STATEM ENTS OF INCOM E .... . . . . . . .... . . . . . . . . .. . . . . . . . . .... .. . . . . . . . . .. . . . . . . . . . . . . . ... . . . . . .. . .. . . . ...
4
CONSOLIDATED STATEM ENTS OF COM PREHENSIVE INCOME . . .... . . . . . . . ... . . .... . . . . . . . . .. . . . . . . . ........
5
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQU ITY ... ... .. . . . . . . .. . .... .. . . .
6
CONSOLIDATED STATEM ENTS OF CASH FLOWS . .. . . . .. . . . . . . . . . . . . .. .... . . . . .. . . . . . . . .. . . . . . . . . . . . ... . . . . . . .. . . . . . . . .
7
NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS . . . . . .. . . . . . . . . . .. . .. . . . . . . . . . . .. . . . ... . . . . . ... . . .. . . . . . . . . . ..
8
Crowe Horwath.
Crowe Horwath LLP
Independent Member Crowe Horwath International
INDEPENDENT AUDITOR'S REPORT
To the Stockholders and Board of Directors
of First Bancshares, I nc.
Merrillville, Indiana
Report on the Financial Statements
We have audited the accompanying consolidated financial statements of First Bancshares, Inc. and
Subsidiaries, which comprise the consolidated balance sheets as of December 31, 2014 and 2013, and the
related consolidated statements of income, comprehensive income, changes in stockholders' equity, and
cash flows for the years then ended , and the related notes to the financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in the United States of America;
this includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of consolidated financial statements that are free from material m isstatement, whether
due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free from material m isstatement.
An audit involves perform ing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor's judgment, including
the assessment of the risks of material m isstatement of the consolidated financial statements, whether due
to fraud or error. In m aking those risk assessments, the auditor considers internal control relevant to the
entity's preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates m ade by management, as well as evaluating the overall presentation of the
consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects ,
the financial position of First Bancshares, Inc. and Subsidiaries as of December 3 1 , 20 1 4 and 201 3, and
the results of their operations and their cash flows for the years then ended in accordance with accounti ng
principles generally accepted in the United States of America.
Crowe Horwath LLP
South Bend, Indiana
March 24, 20 1 5
F I RST BANCSHARES, INC. AND SUBSID IARIES
CONSOLIDATED BALANCE SHEETS
December 3 1 , 20 1 4 and 201 3
(Dollars in thousands, except for per share data)
201 4
ASSETS
Cash and due from banks
Interest-bearing deposits in banks
Total cash and cash equivalents
Securities available for sale
Repurchase agreement investments
Mutual fund investment
Federal Home Loan Bank (F HLB) stock
Loans, net of allowance for loan losses
of $27,460 in 20 1 4 and $25,526 in 20 1 3
Mortgage loans held for sale
P remises and equipment, net
Other real estate, net
Investment in bank owned life insurance
Deferred tax assets
Accrued interest receivable and other assets
Total assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Demand
NOW
Savings Time, $250 and over Other time
Total deposits
Securities sold under agreements to repurchase
Advances from F ederal Home Loan Bank (F H LB)
Subordinated debentures
Other borrowings
Securities purchased not settled
Accrued interest payable and other liabilities
Total l iabilities
Stockholders' equity
Common stock, no par value; $1 stated value:
1 50,000 shares authorized; shares issued and outstanding
at Decem ber 31 , 20 1 4 and 201 3 were 1 1 0,6 1 9 and 1 09, 1 75
Capital surplus
Retained earnings
Accumulated other comprehensive income (loss), net
Total stockholders' equity
Total l iabilities and stockholders' equity
$
57,269
58,948
1 1 6,2 1 7
22 1 , 520
30,000
1 0,953
9 , 1 00
20 1 3
$
43,353
73,925
1 1 7,278
1 79,507
1 0,847
7,987
2,234,286
1 0,561
27,873
1 ,892
30,331
1 2 ,450
24. 556
1 ,91 4,961
8,565
24,234
3,41 5
30,842
32,401
2 1 71 1
$ 2 729 739
$ 2.35:1 Z48
$
$
508,636
547, 1 54
6 1 2 ,497
58,626
503,059
2 ,229,972
4,428
1 44,534
45,000
35,720
20,839
2,480,493
111
1 4,973
233,41 8
744
249,246
$ 2 729 739
41 3,430
465,698
557,402
60,404
51 7 396
2,01 4,330
2,086
46,000
1 1 ,700
20,000
25,91 0
1 0 765
2 , 1 30,791
1 09
1 1 ,046
2 1 3,035
( 3,233 )
220,957
$ 2 35 1 Z 48
See accompanying notes to consolidated financial statements.
3.
CONSOLIDATED STATEM ENTS OF I NCOME
Years ended Decem ber 3 1 , 201 4 and 20 1 3
20 1 3
201 4
Interest income
Loans including fees
Taxable securities
Nontaxable securities
Other
Total interest income
$
91 ,286
1 ,994
1 ,993 256 95,529 Interest expense
Deposits
Advances from FHLB
Other borrowings
Total interest expense
$
87,023
2 ,459
2,1 1 6
208
91,806
5,882
905
945
24
7 756
4,689
623
510
1 1 82
7 004
88,525 84,050
4.200
3.800
Net interest income after provision for loan losses
84,325 80,250
Noninterest income
Deposit service fees, net
Card interchange fees
Wealth management fees
Mortgage banking income
Net gains on securities
Gains (losses) on sales of other real estate
Other income
Total other income
1 3,61 2 7,232 6,235 3,803 4,520 1 78
2,224
37,804 1 3,272
7,361
6,283
5,003
2 , 007
( 1 ,278)
2,752
35,400
Noninterest expenses
Salaries and benefits
Occupancy expenses, net
Other expenses
Total other expenses
41 , 1 47 1 1 ,601 2 1 1 67
73,91 5
39,864
1 1 , 742
1 9 077
70,683
Income before income tax expense
48,2 1 4
44,967
Income tax expense
1 7 91 9
1 7 473
Net interest income
Provision for loan losses
Net income
$
30 295
Basic earnings per share
$
275,Q1
$
27494
253.22
See accom panying notes to consolidated financial statements.
4.
FI RST BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENS IVE I NCOME Years ended December 31, 20 1 4 and 20 1 3 ( Dollars in thousands, except for per share data) 201 4
Net income
$
Other comprehensive income
Change in unrealized gain on securities available for sale
Reclassification adjustment for net gains included
in net income
Tax effects
Total other comprehensive income
Comprehensive income
$
30,295
201 3
$
27,494
1 0,995
1 9, 1 1 7
(4, 520)
(2,498)
3 977
(2,007)
(7,1 37)
9 973
34,272
:Ii
37.46Z
See accom panying notes to consolidated financial statements.
5.
CONSOLIDATED STATEM ENTS OF CHANGES IN STOCKHOLDERS' EQU ITY
Years ended December 3 1 , 20 1 4 and 201 3
Common
Stock
Balance January 1, 2013
$
108
Capital
Surolus
$
8,603
Net income
Retained
Earnings
$ 192,068
Accum ulated
Total
Other
Comprehensive Stockholders'
Income (Loss}, Net
$
(13,206)
27,494
27,494
Other comprehensive
income
9,973
Conversion of subordinated
debt to common stock
(1,106 shares)
(6,527)
(6,527)
Balance December 31, 2013
109
11,046
Net income
(3,233)
213,035
Other comprehensive
Income
3,977
2
Balance December 31, 2014
(9,912)
(9,912)
$
:l:l:l
$ :149Z3
3,977
3,929
3,927
Cash dividends
($90.00 per share)
220,957
30,295
30,295
Conversion of subordinated
debt to common stock
(1,444 shares)
9,973
2,444
2,443
Cash dividends
($60.00 per share)
$ 187,573
$ 2334:18
$
Z44
$ 249246
See accompanying notes to consolidated financial statements.
6.
CONSOLIDATED STATEM ENTS OF CASH FLOWS
Years ended December 31, 2014 and 2013
(Dollars in thousands)
2013 2014
Cash flows from operating activities Net income
Adjustments to reconcile net income to net cash
from operating activities
Depreciation
Net gains on securities
Earnings on m utual funds
Net (gains) losses on sales of other real estate
Net gains on sales of loans held for sale
Loans originated for sale
Loan sale proceeds
Net amortization of securities
Net change in:
Interest receivable and other assets
Deferred tax assets
Bank owned l ife insurance
Interest payable and other liabilities
Net cash from operating activities
$
Cash flows from investing activities
Proceeds from sales, calls and maturities of securities
available for sale
Purchases of securities available for sale
Purchase of FHLB stock
Purchase of mutual funds
Purchase of repurchase agreement investments
Loans m ade to customers and principal collections, net
Proceeds from sales of other real estate
Net property and equipment expenditures
Net cash from investing activities
30,295
3,370
3,800
(2,007)
(47)
1,278
(3,308)
(143,386)
157,225
764
(2,845)
17,457
511
10 074
57,311
(113)
26,629
(606)
(4,803}
66,290
97,331
(119,815)
(1,113)
78,836
(74,230)
(10,800)
Cash and cash equivalents at the beginning of the year
(198,985) 12,053 (8,339)
(201,465)
215,642
127,104
2,342
937,405
(838,871)
25,000
(7,772)
(9,912}
323,834
(4,986)
126,000
(145,000)
20,000
(6)
(6,527)
116,585
(1,061)
(18,590)
Net change in cash and cash equivalents
Supplemental disclosures of cash flow information
Cash paid during the year for
Interest
Income taxes (net refund)
Noncash activities
Transfer from loans to other real estate
Securities purchased but not settled
Conversion of subordinated debt to com mon stock
27,494
3,145
4,200
(4,520)
(106)
(178)
(2,139)
(115,794)
115,937
1,274
(30,000) (325,730)
3,906
(6,785}
(382,206)
Cash flows from financing activities
Net increase in deposits
Net increase (decrease) in securities sold
under agreements to repurchase
Proceeds from FHLB advances
Payments on FHLB advances
Proceeds from other borrowings
Payments for conversion/redemption of subordinated debentures
Cash dividends paid
Net cash from financing activities
Cash and cash equivalents at the end of the year
$
117,278
135,868
:Ji 116,217
:Ji 117,278
6,082
(8,815)
$
2,205
35,720
3,929
$
8,111
265
4,709
25,910
2,444
See accom panyinQ notes to consolidated financial statements.
7.
F IRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS December 31, 2014 and 2013 (Dollars in thousands)
NOTE 1
-
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation: The consolidated financial statements include the accounts of First
Bancshares, Inc. (the Corporation), its wholly owned subsidiaries, Centier Risk Management LLC and
Centier Bank (the Bank), and the Bank's wholly owned subsidiaries, Centier Nevada 2, LLC; Centier
Investments Nevada 2, Inc.; and Centier Holdings Nevada 2, Inc. Centier Nevada 2, LLC; Centier
Investments Nevada 2, I nc.; and Centier Holdings Nevada 2, Inc. are a Nevada limited l iability
partnership and Nevada corporations that manage a portio n of the Bank's investment portfolio. Centier
Risk Management LLC is an insurance company incorporated in Nevada in August, 2013 for the purpose
of insuring the Corporation and its subsidiaries against certain risks unique to the operations of the
Corporation and for which insurance m ay not be currently available or economically feasible in today's
insurance marketp lace. All significant intercompany balances and transactions have been eliminated in
the consolidation.
Nature of Operations: The Corporation's revenues, operating income and assets are primarily from the
banking industry. The accounting and reporting policies of the Corporation conform with accounting
principles generally accepted in the United States of America and with general practices within the
banking industry. The Bank g rants credit and accepts deposits from its customers in the normal course
of business primarily in the nort hwestern Indiana region. The following is a summary of the more
significant policies.
Subsequent Events: The Corporation has evaluated subsequent events for recognition or disclosure
through March 24, 2015 which is the date that the Corporation's financial state ments were available to be
issued.
Certain Significant Estimates: To prepare financial statements in conform ity with accounting principles
generally accepted in the U nited States of America, management makes estimates and assumptions
based on available information. These estimates and assumptions affect the amounts reported in the
financial statements and the disclosures provided , and future results could differ.
Interest-Bearing Deposits in Banks: I nterest-bearing deposits in banks mature within one year and are
carried at cost.
Securities: Securities are classified as available for sale when they might be sold before maturity.
Securities available for sale are carried at fair value, with unrealized holding gains and losses reported
separately in stockholders' equity, net of tax.
Interest income includes amortization of purchase premium or discount. Prem iums and discounts on
securities are amortized on the level-yield method without anticipating prepayments, except for mortgage
backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the
trade date and determined using the specific identification method.
Management evaluates securities for other-than-temporary impairment ("OTTI") at least on a quarterly basis,
and more frequently when economic or market conditions warrant. For securities in an unrealized loss
position, management considers the extent and duration of the unrealized loss, and the financial condition
and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more
likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its
amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire
difference between amortized cost and fair value is recognized as impairment through earnings. For debt
securities that do not meet the aforementioned criteria, the amount of impairment is split into two
components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement
and 2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is
(Continued)
8.
F IRST BANCSHARES, INC. AND S U BSIDIARIES NOTES TO CONSOLIDATED F I NANCIAL STATEM ENTS December 31, 2014 and 2013 (Dollars in thousands)
NOTE 1
-
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
defined as the difference between the present value of the cash flows expected to be collected and the
amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings.
Repurchase Agreement Investment: The Bank enters into purchases of securities under agreements to
resell substantially identical securities. These transactions have a custodial bank that acts as agent
between the dealer and the investor. The three parties agree to the acceptable securities and the
margins required on the securities. The dealer delivers the securities and the investor delivers the funds
to the custodial bank. After the custodial bank verifies that the securities are acceptable and have a
market value that exceeds the amount of the agreement by the required margin, the funds are released to
the dealer and the securities are held for the investor. At the maturity of the agreement, the dealer
returns the funds, principal and interest, to the investor and the custodial bank releases the securities
back to the dealer. At December 31, 2014, these agreements are scheduled to m ature within 90 days.
The interest earned on these investments is included in net i nterest income.
M utual Fund I nvestment: The Bank considers m utual fund investments to be trading investments with
changes in fair value included in earnings. I nterest and dividends are i ncluded in net interest income.
Federal Home Loan Bank (FHLB) Stock: The Bank is a member of the FHLB system. Mem bers are
required to own a certain amount of stock based on the level of borrowings and other factors, and may
invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and
periodically evaluated for im pairment based on ultimate recovery of par value. Both cash and stock
dividends are reported as income.
Loans: Loans that management has the intent and ability to hold for the foreseeable future or until
maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs
and the allowance for loan losses. I nterest income is reported on the interest method and includes
amortization of net deferred loan fees and costs over the loan term, without anticipating prepayments.
Interest income is not reported when full loan repayment is in doubt, typically when the loan is impaired or
payments are past due over 90 days ( 180 days for residential). Past due status is based on the
contractual terms of the loan. All interest accrued but not received for loans placed on nonaccrual is
reversed against interest income. I nterest received on such loans is accounted for on the cash-basis or
cost- recovery method , until q ualifying for return to accrual. Loans are retu rned to accrual status when all
the principal and interest a mounts contractually due are brought current and future payments are
reasonably assured.
The Corporation has identified the fo llowing loan segments; commercial, residential, and installment
loans. Commercial loans are subject to adverse market conditions which may impact the borrower's
ability to m ake repayments on the loan or could cause a decline in the value of the collateral that secures
the loan. Residential and installment loans are subject to adverse em ployment conditions in the local
economy which could increase default rates on loans.
Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred
credit losses, increased by the provision for loan losses and decreased by charge-offs less recoveries.
M anagement estimates the allowance balance required based on past loan loss experience, known and
inherent risks in the portfolio, information about specific borrower situations and estimated collateral
values, economic conditions and other factors. Allocations of the allowance may be made for specific
loans, but the entire allowance is available for any loan that, in management's judgment, should be
charged-off. Loan losses are charged against the allowance when management believes the
(Continued)
9.
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS December 31, 2014 and 2013 (Dollars in thousands)
NOTE 1
-
SUMMARY OF SIGNIFICANT ACCOU NTING POLICIES (Continued)
uncollectibility of a loan balance is confirmed.
allowance.
Subsequent recoveries, if any, are credited to the
The allowance consists of specific and general components. The specific component relates to loans
that are individually classified as impaired. The general component covers non-impaired loans and is
based on historical loss experience adjusted for current factors.
Loan i m pairment is reported when full payment under the loan terms is not expected. Impairment is
evaluated in total for smaller-balance loans of similar nature such as residential first mortgage loans
secured by one-to-four fam ily residences, residential construction loans, automobile, home equity and
second mortgage loans and on an individual loan basis for commercial loans and mortgage loans
secured by other properties.
If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present
value of estimated future cash flows using the loan's existing rate or at the fair value of collateral if
repayment is expected solely from the collateral. Loans are evaluated for i mpai rment when payments are
delayed, typically 90 days or more, or when it is probable that all principal and interest amounts will not
be collected according to the original terms of the loan.
Factors considered by management in determining impairment include payment status, collateral value,
and the probability of collecting scheduled principal and interest payments when due. Loans that
experience insignificant payment delays and payment shortfalls generally are not classified as impaired.
Management determines the significance of payment delays and payment shortfalls on a case- by-case
basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including
the length of the delay, the borrower's prior payment record, and the amount of the shortfall in relation to
the principal and interest owed.
Loans, for which the terms have been modified, and for which the borrower is experiencing financial
diff iculties, are considered troubled debt restructurings and classified as im paired. Troubled debt
restructurings are measured at the present value of estimated future cash flows using the loan's effective
rate at inception or at discounted collateral value for collateral based loans.
The general component covers non-impaired loans and is based on historical loss experience adjusted
for current factors. The historical loss experience is determ ined by portfolio segment and is based on the
actual loss history experienced by the Corporation over the trailing twenty-four month period . This actual
loss experience is supplemented with other economic factors based on the risks present for each
portfolio segment. These economic factors include consideration of the following: changes in lending
policies, procedures, and practices, including underwriting standards and collection and charge-off and
recovery practices; international, national, regional and local economic trends and conditions; nature and
volume of loans; changes in the experience, ability, and depth of lending management and other staff;
levels of and severity of past due loans, nonaccrual loans, and classified loans; quality of the
Corporation's loan review system; levels of concentrations of credit; and effects of changes in other
external factors such as competition and legal and regulatory requirements.
The process of assessing the adequacy of the allowance for loan losses is necessarily subjective.
Further, and particularly in times of economic downturns, it is reasonably possible that future credit losses
may exceed historical loss levels and may also exceed management's current estimates of incurred
credit losses inherent within the loan portfolio. As such, there can be no assurance that future charge-
(Continued)
10.
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FI NANCIAL STATEM ENTS December 31, 2014 and 2013 (Dollars in thousands)
NOTE 1
-
SUM MARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
offs wil l not exceed management' s current estimates of what constitutes a reasonable allowance for
credit losses.
Loans Held for Sale: Mortgage loans originated and intended for sale in the secondary market are
carried at the lower of aggregate cost or fai r value, as determined by outstanding com mitments from
investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings.
Mortgage loans held for sale are generally sold with servicing rights retained. The carrying value of
mortgage loans sold is reduced by the amount allocated to the servicing right. Gains and losses on sales
of mortgage loans are based on the difference between the selli ng price and the carrying value of the
related loan sold.
Concentration of Credit Risk: The Bank is a full service bank headquartered in Merri llville, Indiana with
49 branch offices located in Lake, Porter, LaPorte, Marshall, St. Joseph, Allen , Hamilton, Elkhart and
Tippecanoe Counties. The Bank makes a variety of loans including real estate mortgage, consumer and
com mercial loans. Substantially all of the Bank's loans are made within the basic eight county trade
areas. The loan portfolios are well diversified and substantially all loans are secured by specific items of
collateral including business assets, consumer assets and real estate.
Premises and Eq uipment: Land is carried at cost. Asset cost is reported net of accumulated
depreciation. Depreciation and amortization expense is calculated by the straight-line method over the
useful lives of the related assets ranging from three years to forty years, or for leasehold improvements
over the term of the lease, if less. These assets are reviewed for i m pairment when events indicate the
carrying amount may not be recoverable.
Other Real Estate: Real estate properties acquired through or in lieu of loan foreclosure are initially
recorded at fair value less costs to sell at the date of foreclosure, which becomes the new cost basis.
Costs relating to development and i mprovement of property are capitalized, whereas costs relating to
holding the properties are expensed. Valuations are periodically performed by management, and a
valuation a llowance i s established by means of a charge to operations if the carrying value of a property
exceeds its estimated fair value less sell ing costs.
Loan Servicing Rights: Servicing rights are recognized separately when they are acquired through sales
of loans. When mortgage loans are sold, servicing rights are initially recorded at fai r value with the
i ncome statement effect recorded in net gains (losses) on sales of loans held for sale. Fair value is
based on m arket prices for comparable mortgage servicing contracts. All classes of servicing assets are
subsequently measured usi ng the amortization method which requires servicing rights to be amortized
into n on-interest income in proportion to, and over the period of, the estimated future net servicing income
of the underlying loans.
Impairment is evaluated based on the fair value of the rights, using g roupings of the underlying loans as
to interest rates and prepayment characteristics. Any impairment of a grouping is reported as a valuation
allowance. The fair values of servicing rights are subject to significant fluctuations as a result of changes
in estimated and actual prepayment speeds and default rates and losses. There was no valuation
allowance at December 31, 2014 and 2013. M ortgage servicing rights had a fair value of $4.2 m il lion and
$4.1 million as of Decem ber 31, 2014 and 2013.
( Continued)
11.
NOTE 1 ·SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Servicing fees, late fees and ancillary fees related to loan servicing are not m aterial. The carrying value
of loan servicing rights was $2,326 and $1,898 at Decem ber 31, 2014 and 2013, respectively, and are
included in accrued interest receivable and other assets on the consolidated balance sheets.
Loans serviced for others, principally the Federal Home Loan Mortgage Corporation (FHLMC), are not
included in loans on the consolidated balance sheets and were $489,258 and $456,037 at year end 2014
and 2013.
Bank Owned Life Insurance: The Bank has purchased life insurance policies on certain key executives.
Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at
the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts
due that are probable at settlement.
Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the
change in deferred tax assets and l iabilities. Deferred tax assets and liabilities represent the expected
future tax consequences of temporary differences between the carrying amounts and tax bases of assets
and l iabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax
assets to the amount expected to be realized.
A tax position is recognized as a benefit only if it is " more likely than not" that the tax position would be
sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized
is the largest amount of tax benefit that is greater than 50% likely of being realized on an exam ination.
For tax positions not meeting the " more likely than not" test, no tax benefit is recorded.
The Corporation recognizes interest and I or penalties related to income tax matters in income tax
expense.
Derivatives: The Corporation enters into various stand-alone derivative contracts to provide derivative
products to customers which are carried at fair value with changes in fair value recorded as other
noninterest income. The Corporation is exposed to losses if a counterparty fails to make its payments
under a contract in which the Corporation is in the net receiving position. At December 31, 2014, the
Corporation anticipates that the counterparties will be able to fully satisfy their obligations under the
agreements. In addition, the Corporation obtains collateral above certain thresholds of the fair value of its
hedges for each counterparty based upon their credit standing . All of the contracts to which the
Corporation is a party settle monthly, quarterly or sem iannually. Further, the Corporation has netting
agreements with the dealers with which it does business.
Cash Flow Reporting: Cash and cash equivalents are defined as cash and due from banks, short-term
interest-bearing deposits in banks and federal funds sold. Net cash flows are reported for customer loan
and deposit transactions, federal funds purchased and securities sold under agreements to repurchase.
Retirement P lans: Employee 401(k) and profit sharing plan expense is the amount of matching and other
discretionary contributions. Deferred compensation plan expense allocates the benefits over years of
service.
Associate Stock Ownership Plan (ASOP): The cost of shares issued to the ASOP, but not yet allocated
to participants, is shown as a reduction of shareholders' equity. Compensation expense is based on the
market price of shares as they are com m itted to be released to participant accounts. Dividends on
allocated ASOP shares reduce retained earnings; dividends on unearned ASOP shares reduce any
(Continued)
12.
F I RST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED F I NANCIAL STATEM ENTS December 31, 2014 and 2013 (Dollars in thousands)
NOTE 1
-
SUM MARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
related debt and accrued i nterest. At December 31, 2014 and 2013, there were no unearned ASOP
shares.
Earnings P er Share: Basic earn ings per share is based on the weighted average com mon shares
outstanding. The weighted average number of common shares outstanding was 110,158 and 108,578
for 2014 and 2013. Diluted earnings per share further assumes issue of any dilutive potential common
shares. The Corporation has no dilutive potential common shares, therefore no diluted earnings per
share is reported for 2014 or 2013.
Comprehensive Income (Loss): Com prehensive income (loss) consists of net income and other
com prehensive income (loss). Other com prehensive income (loss) includes unrealized gains and losses
on securities available for sale, net of tax, which are also recognized as separate components of
stockholders' equ ity.
F i nancial Instruments with Off-Balance-Sheet Risk: The Corporation, in the normal course of business,
makes com mitments to extend credit which are not reflected in the financial statements. See Note 15 for
a summary of these com m itments.
Transfers of Financial Assets: Transfers of financial assets are accounted for as sales, when control over
the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the
assets have been isolated from the Corporation, the transferee obtains the right (free of conditions that
constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the
Corporation does not maintain effective control over the transferred assets through an agreement to
repurchase them before their maturity.
Long-Term Assets: P rem ises and equipment and other long-term assets are reviewed for impairment
when events indicate their carrying amount may not be recoverable from future undiscounted cash flows.
If impaired, the assets are recorded at fair value.
Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course
of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of
loss can be reasonably estimated. Management does not believe there now are such matters that will
have a material effect on the consolidated financial statements.
Dividend Restriction: Banking regulations require maintaining certain capital levels and may limit the
dividends paid by the Bank to the Corporation or by the Corporation to its shareholders.
Fair Values of F inancial Instruments: Fair values of financial instruments are estimated using relevant
market information and other assumptions, as more fully disclosed in a separate note. F air value
estimates involve uncertainties and m atters of significant judgment regarding interest rates, credit risk,
prepayments, and other fa ctors, especially in the absence of broad markets for particular items. Changes
in assumptions or in market conditions could significantly affect the estimates. The fair value estimates of
existing on- and off-balance-sheet financial instruments do not include the value of anticipated future
business or the values of assets and liabilities not considered financial instruments.
Reclassifications: Some items in the prior year financial statements were reclassified to conform to the
current presentation.
( Continued)
13.
FI RST BANCSHARES, I NC. AND SUBSIDIARIES NOTES TO CONSOLIDAT ED FINANCIAL STAT EMENTS December 31, 20 1 4 and 201 3 (Dollars in thousands) NOTE 2
-
CASH AND DUE FROM BANKS
The Bank is required to maintain cash on hand or deposit balances with the Federal Reserve. T his
required reserve balance at Decem ber 3 1 , 201 4 and 20 1 3 was $31 ,251 and $26,271 .
At December 3 1 , 201 4 and 201 3, cash and c ash equivalents included $53,265 and $70,777 on deposit
with the Federal Reserve Bank of Chicago.
NOTE 3
-
MUTUAL FUND INVESTM ENT
The Corporation invested in the Wells Fargo Advantage Adjustable Rate Government Fund (the Fund)
with a carrying value of $1 0,953 and $1 0,847 at December 31 , 201 4 and 201 3. The Fund invests
2primarily in mortgage and asset- backed securities issued or guaranteed by the U.S. government or
government-sponsored enterprises (GSE's). The Corporation purc hased the investment i n order to
sec ure its obligation under a letter of c redit which was issued with Wells Fargo. The letter of c redit expires
May 1 5, 201 5.
NOTE 4 SECURITIES
-
The following table summarizes the amortized c ost and fair value of the available-for-sale sec urities
portfolio at December 31, 20 1 4 and 201 3 and the corresponding amounts of gross unrealized gains and
losses recognized in acc umulated other comprehensive income (loss):
Amortized
Cost
Available for sale 2014:
U.S. government sponsored agencies
States and political subdivisions
Mortgage-backed - residential
Collateralized mortgage obligations
$
$
601
139,557
11,976
68 241
$
220 375
$
Amortized
Cost
Available for sale 2013:
Trust preferred securities
$
$
Gross
U nrealized
Gains
Gross
Unrealized
Losses
$
1,629
31
116
1 776
$
184836
$
965
$
601
140,967
11,893
68,059
(631)
$
221 520
Gross
Unrealized
Losses
Fair
Value
$
(646)
(87)
(130)
(8,716)
$
127,931
1,696
21,226
28,654
$
(95Z9)
$
1Z950Z
53
3,232
4250
$
(219)
(114)
(298)
Gross
Unrealized
Gains
127,612
1,783
21,303
34 138
Fair
Value
Total other than temporary impairment rec ognized in acc umulated other c omprehensive income net of tax
was $0 and $(5,230) at December 3 1 , 20 1 4 and 20 1 3.
(Continued)
1 4.
FIRST BANCSHARES, INC. AND SUBSIDIARI ES NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS Dec ember 31, 2014 and 2013 (Dollars in thousands)
NOTE 4 SECURITIES (Continued)
-
Securities with unrealized losses at December 31, 2014 and 2013 are as follows:
At year end 2014
Less than
---------12 Months-----Fair
Unrealized
Loss
Value
Descrir;ition of Securities
States and political
subdivisions
$ 20,870
4,923
Collateralized mortgage
Obligations
42,803
Total temporarily impaired
At year end 2013
$ 68 596
$
(81)
(17)
$ 14,490
1,644
(287)
1 634
(385)
$ 17 768
Less than
----------12 Months------Fair
Unrealized
Loss
Value
Descrir;ition of Securities
States and political
subdivisions
$ 42,613
1,696
Collateralized mortgage
Obligations
11,224
Total temporarily impaired
$
$ 55533
$
12 Months
--------- or More ----------Fair
Unrealized
Value
Loss
(540)
(87)
$
$
(138)
(97)
$ 35,360
6,567
(11)
44 437
(246)
$ 86 364
12 Months
---------- or More ---------Fair
Unrealized
Value
Loss
$
6,191
$
(106)
(Z5Z)
$
(219)
(114)
(298)
$
(631 )
----------------- Total --Unrealized
Fair
Loss
Value
---
$ 48,804
1,696
$
(646)
(87)
13,903
(8,716)
11,224
13,903
(130)
(8,716)
$ 20094
$ (8822)
$ Z562Z
$ (95Z9)
(130)
$
---------- Total ----------Fair
Unrealized
Value
Loss
Management does not intend to sell these securities, and having reviewed the Corporation's liquidity
needs and c ontractual and regulatory obligations, has c onc luded it is not more likely than not that the
sec urities will be required to be sold prior to recovery of amortized c ost. Unrealized losses on the
residential m ortgage bac ked and state and munic ipal obligations have not been recognized into income
bec ause the issuers are of high c redit quality, the decline in fair value is largely due to c hanges in interest
rates and is expected to recover as the bonds approac h maturity.
The Trust Preferred Sec urities (TPS) owned by the Corporation at December 31, 2013 are primarily
mezzanine c lasses of collateralized debt obligations. In the priority of repayment, mezzanine c lasses
rank below senior c lasses of the c ollatera lized debt obligations. The source of repayment for eac h TPS is
its separate pool of unsec ured debt obligations issued by financial institutions and insurance companies
(the c ollateral issuers). Economic c onditions have eroded the financial strength of the c ollateral issuers.
Some issuers have defaulted while others have elected to exercise their rights to defer interest payments
on the debt for up to twenty consecutive quarters. These defaults and deferrals have reduced the
amount of c ash available to pay interest and princ ipal on the senior and mezzanine TPS. Management
trac ks default and deferral activity in the collateral pools and uses that and other data, inc luding
measures of the c urrent and prospective financial c ondition of the c ollateral issuers, to estimate the
present value of expected future cash flows available to repay princ ipal and interest on the TPS
sec urities. The difference between the present value of expected future cash flows, determ ined using the
yield inherent in the sec urity at purc hase, and the amortized cost of eac h TPS is recorded as OTTI .
Management obtains independent third party estimates of the fair value, or in some c ases, uses
independent estimates of the fair value of similar TPS, to establish the fair value of each TPS. The
difference between the amortized cost, net of OTTI , and the fair value of each TPS is recorded in other
comprehensive income (loss).
(Continued)
15.
FI RST BANCSHARES, INC. AND SU BSIDIARI ES NOTES TO CONSOLIDAT ED FINANC IAL STAT EM ENTS December 31, 2014 and 2013 (Dollars in thousands)
NOTE 4 - SECU RITIES (Continued)
For the years ended December 31, 2014 and 2013, there were no OTT I charges recorded in the
consolidated statements of income, respectively.
The following tables provide a summary of the T PS at year end 2013 presented by OTT I status, current
credit rating status (investment grade rating verses non-investment grade), and interest payment status.
If the amount of cash currently available from the collateral is insufficient to pay current i nterest on the
mezzanine notes, some TPS allow payment of partial interest and/or principal. Other TPS allow the
unpaid interest to capitalize and repay in full with compounded interest at a later date. Such TPS are
referred to in the following table as ''T PS not paying interest or paying partial interest". TPS that are
paying full current interest are referred to as "TPS paying full interest".
Fair
Value
Amortized
Cost
Cumulative
Net
Unrealized
OTT I
Gains (Losses) Recorded
TPS at year end 201 3:
By OTT I Status
TPS with OTT I
By Interest Payment Status
T PS paying full interest
T PS not paying interest or paying
partial interest
By Investment Grade Rating Status
TPS not rated investment grade
$
34.138
$
28.654
$
(5.484)
$ (37 942)
$
25,986
$
22,991
$
(2,995)
$
5 663
8 152
(22,348)
(2.489)
(15,594)
$
34. 138
$
28.654
$
(5 484)
$ (37 942)
$
34.138
$
28.654
$
(5 484)
$ (37.942)
T he following table provides a summary of the changes in the TPS balances during 2014:
Par
Value
TPS Balance at December 31, 2013
$
Sale of T PS
Principal payments
Change in unrealized gain (loss)
on T PS
TPS Balance at Decem ber 31, 2014
72,080
OTT I
$
(37,942)
Other
Comprehensive
Income (Loss)
$
(5,484)
Carrying
Value
$
(33,767)
(371)
37,942
(71,709)
(371)
5 484
5 484
$
$
28,654
$
$
(Continued)
1 6.
NOTE 4 SECURITIES (Continued)
-
The table below presents a rollforward for the periods ended Dec e m ber 31, 2014 and 2013 of the c redit
losses rec ognized in earnings:
2014
Beginning balance, January 1,
$
Reductions for previous c redit losses realized on
securities sold during the year
Inc reases to c redit losses on securities for which other-than-temporary i mpairment was previously rec ognized Ending balance, December 31,
(37,942)
2013
$
37,942
$
(97,057)
59, 115
$
(37,942)
During 2014, the Com pany collected $371 of trust preferred sec urity princ ipal payments and $645 of
interest income payments. No additional OTTI loss was recorded and no recovery of prior year OTTI
losses was realized as a result of princ ipal payments. During 2013, the Company c ollected $2,413 of
trust preferred sec urity princ ipal payments and $1,604 of interest i nc ome payments.
The proceeds from sales of sec u rities and the assoc iated gains are listed below:
2014
Proceeds from sales
Gross realized gains on sales
$
38,532
4,520
2013
$
7,458
2,040
During 2014 and 2013, g ross gains on calls of investment securities were $1 and $1 and gross losses were
$(1) and $(34).
The amortized c ost and fair value of debt sec urities at Dec ember 31, 2014, by contractual maturity, are
shown below. Expected maturities may differ from contractual m aturities because borrowers may have
the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a
single maturity date are shown separately.
Available For Sale
Fair
Amortized
Value
Cost
Due in one year or less
Due from one to five years
Due from five to ten years
Due after ten years
Mortgage-backed: residential
$
52,699
51,407
4,953
31,099
11,976
68,241
$
52,786
51,370
5,233
32,179
11,893
68.059
$
220.375
$
221,520
Securities with a carrying value of $14,559 and $11,566 at December 31, 2014 and 2013, were
spec ifically pledged to sec ure borrowed funds, sec urities sold u nder agreements to repurc hase, public
deposits and for other purposes as required or permitted by law.
At year-end 2014 and 2013, there were no holdings of sec urities of any one issuer in an amount greater
than 10% of stoc kholders' equity.
(Continued)
17.
FI RST BANCSHARES, I NC. AND S UBSI DIARIES NOTES TO CONSOLI DATED FINANCIAL STATEM ENTS December 31, 2014 and 2013 (Dollars in thousands)
NOTE 5
•
LOANS
Loans by major categories at year end are summarized as follows:
Com mercial, substantially secured by real estate
Residential
Installment
Subtotal
Allowance for loan losses
Net deferred loan (fees) c osts
2014
2013
$ 1,726,189
198,102
310.584
2,234,875
(27,460)
26 871
$ 1,439,099
193,599
283,238
1,915,936
(25,526)
24.551
$ 2.234,286
$ 1.914,961
The following table presents the activity in the allowance for loan losses by portfolio segment for the year
ending December 31, 2014 and 2013:
Decem ber 3 1 , 2014
Allowance for loan losses:
Beginning balance
Loans c harged-off
Recoveries
Total ending allowance
balance
December 3 1 , 2013
Allowanc e for loan losses:
Beginning balance
Loans c harged-off
Recoveries
Total ending allowance
balance
Residential
Commercial
Total
I nstallment
$
21,818
3,508
(1,932)
702
$
2,369
(66)
(486)
148
$
1,339
758
(743)
45
$
25,526
4,200
(3,161)
895
$
24 096
$
1,965
$
1.399
$
27 460
Total
Installment
Residential
Commercial
$
21,382
1,570
(1,432)
298
$
2,166
883
(1,047)
367
$
964
1,347
(1,290)
318
$
24,512
3,800
(3,769)
983
$
21,818
$
2,369
$
1,339
$
25.526
(Continued)
18.
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES T O CONSOLIDATED FI NANCIAL STATEM ENT S December 3 1 , 20 1 4 a n d 201 3 (Dollars in thousands) NOTE 5
-
LOANS (Continued)
The following table presents the balance in the allowanc e for loan losses and the recorded investment in
loans by portfolio segment and based on impairment method as of Dec ember 3 1 , 201 4 and 20 1 3:
Decem ber 31, 20 1 4
Allowanc e for loan losses:
Ending allowance balanc e
attributable to loans:
Individually evaluated
for i mpairment
Collectively evaluated
for i mpairment
Total ending
allowanc e balance
Loans:
Loans individually evaluated
for impairment
Loans collectively evaluated
for im pairment
Total ending loans
balance
Decem ber 3 1 . 201 3
Allowance for loan losses:
Ending allowance balance
attributable to loans:
Individually evaluated
for impairment
Collectively evaluated
for i mpairment
T otal ending
allowance balance
Loans:
Loans individually evaluated
for impairment
Loans c ollectively evaluated
for impairment
Total ending loans
balance
Commercial
$
3,031
I nstallment
Residential
$
21 .065
1 91
$
1
$
24,237
1 398
1 774
3,223
$
24 096
$
1 965
$
1 .399
$
27.460
$
1 7,779
$
4,003
$
1 88
$
2 1 ,970
1 .708,4 1 0
$ 1 ,726 1 89
1 94.099
$
Commercial
$
4,3 1 6
198,102
$
1 7 502
279
2,242,71 9
340 398
$ 2,264,689
Installment
Residential
$
340,2 1 0
$
1
$
20,930
1 338
2,090
4,596
$
2 1 ,818
$
2.369
$
1 .339
$
25,526
$
23,91 8
$
4,393
$
213
$
28,524
1 ,41 5, 1 8 1
$ 1 .439.099
1 89,206
$
193,599
$
3 1 0,042
1 ,91 4.429
310.255
$ 1 .942.953
T he T riad c lass, whic h i s part of the i nstallment segment, is presented a t recorded i nvestment whic h
inc ludes $29,81 4 and $27, 0 1 7 of deferred dealer reserve c osts at December 31 , 201 4 and 20 1 3. T he
dealer reserve costs are a 1 .50% premium established at the origination of the T riad loans. The dealer
earns the premium over the life of the loan. The Corporation retains 70% of this premium in a deposit
account. All other balanc es are presented as unpaid princ ipal only, as the deferred fees/c osts and
acc rued interest receivable associated with those accounts was deemed immaterial.
(Continued}
1 9.
FIRST BANCSHARES, INC. AND SUBS IDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS December 3 1 , 201 4 and 201 3 (Dollars i n thousands)
NOTE 5
-
LOANS (Continued)
The following tables present information related to impaired loans by class of loans as of and for the year ended December 31 , 201 4 and 201 3. For
purposes of this presentation, recorded investment reflects estimated deferred fees and costs.
Unpaid
Princlpal
Balance
December 3 1 , 201 4
With no related allowance recorded:
Commercial real estate
Commercial non-real estate
Residential
Other consumer
Triad
Credit lines
Overdrafts
Subtotal
$
With an allowance recorded:
Residential
Other consumer
Triad
Credit lines
Overdrafts
Subtotal
Total
$
Recorded
Investment
$
$
$
$
Cash Basis
Interest
Recognized
I nterest
Income
Recognized
Average
Recorded
I nvestment
Allowance for
Loan Losses
Allocated
$
1 26
1 26
1 34
11
11
1 26
1 26
1 34
11
11
1 7,009
770
4,003
62
1 7 ,007
770
3,840
62
2,954
77
1 91
1
20, 1 21
727
4, 1 98
64
1 73
23
1 23
4
1 17
21
1 23 4
21 844
21 ,679
3.223
25 1 1 0
323
265
21 97Q
$
2:1,8Q5
$
3 223
$
25.244
$
334
$
276
(Conti nued)
20.
FIRST BANCSHARES, INC. AND SUBSI DIARI ES NOT E S TO CONSOLIDAT E D FINANCIAL STAT EM ENT S Dec ember 3 1 , 20 1 4 and 201 3 (Dollars in thousands) NOTE 5 - LOANS (Continued)
Unpaid
Princ i pal
Balance
Dec em ber 31, 201 3
With no related allowance rec orded:
Commerc ial non-real estate
Residential
Other c onsumer
Triad
Credit lines
Overdrafts
Subtotal
$
With an allowanc e rec orded:
Commerc ial real estate
Residential
Other consumer
T riad
Credit lines
Overdrafts
Subtotal
Total
$
Rec orded
Investment
$
Allowance for
Loan Losses
Allocated
$
$
I nterest
I ncome
Recognized
Average
Rec orded
Investment
Cash Basis
Interest
Recognized
$
$
1 42
1 42
1 60
12
12
1 42
1 42
1 60
12
12
23,233
685
4,393
71
23,221
685
4,2 1 2
71
4,246
70
279
1
29,639
672
5, 1 26
1 65
726
33
1 49
4
647
31
1 49 4
28,382
28 1 89
4 596
35.602
91 2
831
28.524
$
28,33j
$
4,596
$
35.Z62
$
924
$
843
(Continued)
21.
NOTE 5
•
LOANS (Continued)
Nonaccrual loans and loans past due 90 days still on accrual i nc lude both smaller balance homogeneous
loans that are collectively evaluated for impairment and individually c lassified impaired loans.
The following tables present the recorded investment in nonacc rual and loans past due over 90 days stil l
on acc rual by c lass o f loans a s o f December 31, 2014 a n d 2013:
Nonaccrual
2014
Residential
Other consu mer
Triad
Credit lines
Overdrafts
$
13,608
1,131
3,990
373
Loans Past Due Over
90 Days Still Acc ruing
$
341
Total
2013
Residential
Other c onsumer
Triad
Credit lines
Overdrafts
$
19 443
$
$
10,601
202
3,600
449
$
78
310
Total
$
1Q,162
25
9
591
42
$
745
Nonperform ing loans and impaired loans are defined differently. Some loans may be included in both
categories, whereas other loans may only be included in one category.
The following table presents the aging of the recorded investment in past due loans as of December 31,
2014 and 2013 by c lass of loans:
Loans
Past Due
60 - 89
Days
Loans
Past Due
30 - 59
Days
December 31 , 2014
Commerc ial real
estate
Commercial nonreal estate
Residential
Other c onsumer
Triad
Credit l ines
Overdraft
Total
$
195
$
1,334
155
957
100
s 2,741
s
Loans
Past Due
Over
90 Days
335
$ 10,164
67
494
22
895
52
137
2,215
121
:l,865
s 12,822
185
Total
Past
Due
$ 10,694 $
204
4,043
298
1 ,852
337
$ 17,428 $
Loans
Not
Past Due
Total
1,507,325 $ 1,518,019
207,966
194,059
72,912
178,965
83,942
2 092
208,170
198,102
73,210
180,817
84,279
2,092
2,247,261 $ 2,264 689
(Continued)
22.
FIRST BANCSHARES, INC. AND SUBSI DIARIES NOTES TO CONSOLIDATED FI NANCIAL STATEM ENTS Dec ember 31, 2014 and 2013 (Dollars in thousands)
NOTE 5 - LOANS (Continued)
Loans
Past Due
30 - 59
Days
Dec ember 31, 2013
Commercial real
estate
Commercial nonreal estate
Residential
Other c onsumer
Triad
Credit lines
Overdraft
Total
$
131
$
34
1,140
119
1,131
494
$ 3,049
Loans
Past Due
Over
90 Days
Loans
Past Due
60 - 89
Days
61
$
184
3,268
169
544
118
1,648
87
$
2 458
5,513
231
$
9,365
Total
Past
Due
$
5,705 $
218
4,952
406
2,779
812
$ 14 872 $
Loans
Not
Past Due
1,300,960 $ 1,306,665
132,216
188,647
67,651
156,135
81,262
1 210
132,434
193,599
68,057
158,914
82,074
1 210
1.928,081 $ 1.942 953
Troubled Debt Restructu rings:
Included in the im paired loan totals previously presented for 2014 and 2013 are $9,614 and $14,209 of
loans for whic h the terms have been modified in troubled debt restructurings. The Corporation has
allocated $705 and $1,121 of spec ific reserves to customers whose loan terms have been modified in
troubled debt restructurings as of December 31, 2014 and 2013. The Corporation has no comm itments
to lend additional amounts to customers with outstanding loans that are c lassified as troubled debt
restructurings as of Dec e m ber 31, 2014 and 2013.
During the years ending Dec em ber 31, 2014 and 2013, the terms of certain loans were modified as
troubled debt restructurings. The modification of the terms of suc h loans included one or a c ombination of
the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a
stated rate of interest lower than the current market rate for new debt with similar risk.
Modifications involving a reduction of the stated interest rate of the loan were for periods ranging from 6
months to 6 years. Modifications involving an extension of the maturity date were for periods ranging from
1.5 years to 3 years.
(Continued)
23.
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STAT EM ENTS Dec ember 31, 2014 and 2013 (Dollars i n thousands)
NOTE 5
-
LOANS (Continued)
The following table presents loans by c lass modified as troubled debt restructurings that occ urred during
the years ending December 31, 2014 and 2013:
Number
of
Loans
2014
T roubled Debt Restructurings:
Com mercial real estate
Commercial nonreal estate
Residential
Other c onsumer
Triad
Credit lines
Overdraft
Total
2013
Troubled Debt Restructurings:
Commercial nonreal estate
Residential
Other c onsumer
T riad
Credit lines
Overdraft
Total
Outstanding
Balance
$
2
PreModification
Weighted
Rate
PostModification
Weighted
Rate
20
5.25%
5.25%
616
4.79%
3.08%
66
9.75%
9.75%
___A
$
702
5.27%
3.76%
4
$
3,119
5.00%
3.25%
333
6.16%
3.65%
77
7.25%
7.25%
3.529
5.16%
3.37%
4
___a
$
The troubled debt restructurings desc ribed above for the years ending December 31, 2014 and 2013 did
not have an i m pact on the allowance for loan losses or result in c harge-offs as the modified loans had
allowance allocations in excess of any conc ession amounts previously assigned.
A loan is c onsidered to be in payment default once it is 90 days c ontractually past due under the modified
terms.
T here were no troubled debt restructurings that subsequently defaulted during 2014 and 2013.
In order to determine whether a borrower is experienc ing financial difficulty, an evaluation is performed of
the probability that the borrower will be in payment default on any of its debt in the foreseeable future
without the mod ification. This evaluation is performed under the corporation's internal underwriting policy.
(Continued)
24.
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS Decem ber 31, 2014 and 2013 (Dollars in thousands)
NOTE 5
-
LOANS (Continued)
Credit Quality Indicators:
The Corporation categorizes loans into risk categories based on relevant information about the ability of
borrowers to service their debt such as: current financial information , historical payment experience,
credit documentation, public information , and current economic trends, among other factors. All
commercial are loans evaluated individually at origination by classifying the loans as to credit risk. On a
go-forward basis all com mercial relationships greater than $1,000 are subject to an annual review
process and loans between $ 250 and $1,000 are also subjected to review on a random sampling basis.
The Company uses the following definitions for risk ratings:
Watch. Loans classified as watch may demonstrate early indicators of increasing credit risk.
The exposure is acceptable, but should include a clear plan for preventing deterioration .
Special Mention. Loans classified as special mention have a potential weakness that deserves
management's close attention. If left uncorrected, these potential weaknesses may result in
deterioration of the repayment prospects for the loan or of the institution's credit position at some
future date.
Substandard. Loans classified as substandard are inadequately protected by the current net
worth and paying capacity of the obliger or of the collateral pledged, if any. Loans so classified
have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are
characterized by the distinct possibility that the institution will sustain some loss if the deficiencies
are not corrected .
Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as
substandard, with the added characteristic that the weaknesses make collection or liquidation in
ful l, on the basis of currently existing facts, conditions, and values, highly questionable and
improbable.
Loans not meeting the criteria above that are analyzed individually as part of the above described
process are considered to be pass rated loans. Loans listed as not rated are included in groups of
homogeneous loans.
Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:
Pass
Watch
Special
Mention
Not
Rated
Doubtful
Substandard
Total
December 31, 2014
Commercial real estate $ 1,438,933
Commercial non real
estate
205,467
Residential
146
Other consumer
Triad
180,817
Credit l ines
Overdraft
Total
$:1 825363
$ 55,092
$
2,268
6,959
$ 17,035
113
322
441
$
-
$
-
197,515
73,210
84,279
2,092
$ 5Z36Q
$
ZQZ2 $ :lZZ98
$
-
$
1,518,019
208,170
198,102
73,210
180,817
84,279
2 092
$ 35ZQ96 $ 2264689
(Continued)
25.
FIRST BANCSHARES, INC. AND SUBSI DIARI ES NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS December 3 1 , 201 4 and 201 3 (Dollars in thousands) NOTE 5
•
LOANS (Continued)
Pass
Special
Mention
Watch
Substandard
Not
Rated
Doubtful
Total
December 31, 2013
Commercial real estate $ 1,200,349
Commercial non real
estate
127,796
Residential
154
Other consumer
Triad
158,914
Credit lines
Overdraft
$ 79,422
Total
$ 84479
$ 1 487213
$
7,411
$ 15,290
23
488
489
4,127
930
$ 4,193
$
-
$
132,434
193,599
68,057
158,914
82,074
1 210
192,026
68,057
82,074
1 210
$
7434 $ 16267
1,306,665
$ 4193 $ 343 367 $ 1 942 953
The following table presents the recorded investment in residential and consumer loans based on
payment activity as of December 3 1 , 201 4 and 20 1 3:
Other
Consumer
Credit
Lines
Triad
Residential
Performing
Nonperform ing
$
72,837
373
$
1 80,81 7
$
83,938
341
$
1 94,1 1 2
3 990
Total
$
73 2 10
$
180 81 7
$
84,279
$
1 98 102
Performing
Nonperforming
$
67,608
449
$
1 58,9 1 4
$
81 ,764
31 0
$
1 89,999
3 600
Total
$
68,057
$
:158 914
$
82 Q74
$
193 599
NOTE 6
•
PREMISES AND EQUIPMENT, NET
Year end premises and equipment, net were as follows:
20 1 4
Land
Buildings and improvements
Furniture and fixtures
Leasehold imp ovements
Total c ost
Acc umulated depreciation and amortization
20 1 3
$
7,580
22,71 6
29,736
423
60,455
(32,582)
$
7,484
1 9,640
27,205
423
54,752
(30,5 1 8)
$
27,873
$
24,234
(Continued)
26.
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS December 3 1 , 201 4 and 201 3 (Dollars in thousands) NOTE 7
-
TIME DEPOSITS
At year end 201 4, stated maturities of time deposits were as follows:
201 5
201 6
201 7
20 1 8
20 1 9
Thereafter
NOTE 8
-
$
462,274
49,61 0
24,300
1 2 ,926
1 2 ,31 0
265
$
56:1.685
SECURITIES SOLD U N DER AGREEM ENTS TO REPURCHASE
Securities sold under agreements to repurc hase consist of obligations of the Corporation to other parties.
These arrangements are for terms of one year or less and are sec ured by investment sec urities. Suc h
collateral is held by safekeeping agents o f the Corporation. Information concerning sec urities sold under
agreements to repurc hase at year end is summarized as follows:
20 1 4
Balance at end of year
Average daily balance during the year
Average interest rate during the year
M aximum month end balance during the year
$
$
4,428
$
2 , 1 69
0 .0 1 %
4,428
$
20 1 3
2,086
1 ,547
0.03%
3,71 5
The fair value of sec urities underlying these agreements totaled $2,059 and $4,205 at December 31 ,
2 0 1 4 and 201 3. The Corporation had an additional $ 1 68,588 and $ 1 1 2,497 of sec urities that were
available to be pledged at December 3 1 , 201 4 and 201 3. The Corporation pledged an additional $2, 708
in Jan uary 201 5 to secu re repurc hase agreements.
N OTE 9 ADVANCES FRO M FEDERAL HOME LOAN BANK
-
Outstanding advances from the Federal Home Loan Bank at Dec em ber 3 1 , 20 1 4 and 20 1 3 amounted to
$ 1 44,534 and $46,000. At Dec ember 3 1 , 2014, m aturity dates ranged from January 1 2, 201 5 to April 30,
201 5, and all of the advances were at fixed rates ranging from 0 .27% to 2.86%. At Decem ber 3 1 , 201 3,
m aturity dates ranged from Marc h 5, 2 0 1 4 to April 30, 201 5, and all of the advances were at fixed rates
ranging from 0 . 34% to 2.86%.
The Bank has a spec ific c ol lateral agreement with the Federal Home Loan Bank in which the Bank
pledges eligible assets including one to four fam ily residential mortgage loans, multifamily residential
m ortgage loans and commerc ial real estate loans. The spec ific collateral pledged ranges from 1 25% to
1 75% of advance totals dependent on collateral type and other c riteria. Total eligible assets pledged at
Dec em ber 3 1 , 201 4 and 20 1 3 amounted to $435,0 1 8 and $261 , 1 58.
( Continued)
27.
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS Dec em ber 31 , 201 4 and 201 3 ( Dollars in thousands)
NOTE 9 - ADVANCES FROM FEDERAL HOME LOAN BANK (Continued)
At year end 201 4, scheduled princ ipal reductions on advanc es from the Federal Home Loan Bank were:
$ 1 44.534
201 5
NOTE 1 0 - SU BORDINATED DEBENTURES
During 2009 and 2010, the Corporation issued convertible subordinated debentures. The debentures are
unsecured and pay interest semi-annually. The following table summarizes the issues:
Date Issued
June 1 5, 2009
October 30, 2009
January 28, 201 0
February 25, 20 1 0
December 31 ,
201 3
Amount
$ 6,750
2,050
1 ,250
1 .650
:l:1.ZQQ
201 4
Conversions
September 30,
201 4
Redemption
1 ,750
1 ,050
1 ,000
1 50
$ 5,000
1 ,000
250
1 .500
$ 3 95Q
$ 7,75Q
$
Interest Rate
7.00%
7.50%
7.50%
7.50%
Maturity
June 1 5, 201 6
October 30, 201 6
January 28, 201 7
February 25, 20 1 7
The subordinated debentures may be inc luded in Corporation's total risk-based capital (with c ertain
limitations) under current regulatory guidelines and interpretations.
On Marc h 25, 20 1 3, note holders c onverted $1 ,000 of notes to 488 shares of common stock and on
October 1 5, 201 3, note holders c onverted $ 1 ,450 of notes to 61 8 shares of c om mon stoc k.
On M arc h 1 5, 2014, note holders c onverted $3,050 of notes to 1 , 1 28 shares of common stoc k and on
September 30, 201 4, note holders c onverted $900 of notes to 3 1 6 shares of c ommon stoc k.
On September 30, 201 4 the Corporation elec ted to redeem the remaining debentures in the amount of
$7, 750.
U pon redemption, the note holders were able to convert their notes to shares of common stoc k of the
Corporation at the fair value of the com mon stoc k at the date of c onversion.
NOTE 1 1
-
OTHER BORROWINGS
The Corporation obtained a loan from a private investor in the amount of $20,000 during 20 1 3. The loan
bears interest at a rate of 4% with interest and princ ipal due at a maturity date of April 1 5, 201 5. The
Corporation obtained a second loan from the same private investor in the amount of $25,000 during
201 4. The second loan bears interest at a rate of 6% payable quarterly and has a maturity date of April
1 5, 2022. The loans are unsec ured and do not c ontain any debt c ovenant req uirements.
(Continued)
28.
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 3 1 , 201 4 and 201 3 (Dollars in thousands) NOTE 12 - EMPLOYEE BEN EFIT PLANS
The Bank has a trusteed contributory profit-sharing plan covering substantially all employees. All
contributions to the plan are funded with the trustee and are made at the discretion of the Bank's Board of
Directors. The Bank did not make a contribution to the plan for the year ended December 31 , 20 1 4 or
20 1 3. The Bank's profit-sharing plan also includes a 401 ( k) feature for the exclusive benefit of its
employees. The 40 1 (k) feature is a voluntary benefit and participation is at the discretion of the
employee. The Bank matches 50% of the employee contributions to a maximum of 6% of employee
qualified earnings. For the years ended December 3 1 , 20 1 4 and 20 1 3, these matching funds amounted
to $725 and $678.
The Corporation has an Associate Stock Ownership Plan (ASOP). All contributions to the plan are
funded with a trustee and are at the discretion of the Corporation's Board of Directors. The Corporation's
contributions and expense for the years ended December 3 1 , 20 1 4 and 20 1 3 were $600 and $600.
During the year ended December 31 , 201 4, 1 2 shares were withdrawn and during the year ended
December 3 1 , 201 3, 1 0 shares of outstanding Corporation stock were purchased by the ASOP via a
trading desk. As of December 3 1 , 20 1 4 and 20 1 3, the ASOP held 1 1 ,930 and 1 1 ,942 shares of the
Corporation's stock all of wh ich are allocated to employees. U pon distribution of shares to a participant,
the participant has the right to require the Corporation to purchase shares at the most recent appraised
value in accordance with the terms and conditions of the plan. The fair value of the shares held by the
ASOP approximated $36,995 and $32, 1 60 at Decem ber 31 , 20 1 4 and 20 1 3.
NOTE 1 3 - INCOME TAXES
The provision for i ncome tax expense consists of the following:
20 1 4
Federal
Current
Deferred
$
State
Current
Deferred
307
1 3,932
1 4,239
20 1 3
$
1 59
3,52 1
3,680
$ jZ9j9
(8,730)
22,298
1 3, 568
(427)
4,332
3,905
$
1 7,473
(Continued)
29.
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 3 1 , 201 4 and 201 3 (Dollars in thousands) NOTE 1 3
-
INCOME TAXES (Continued)
The components of the. net deferred tax assets recorded in the consolidated balance sheets as of
December 31 were as follows:
20 1 3
201 4
Deferred tax assets:
Net unrealized loss on securities available for sale
OTTI on investment securities
Allowance for loan losses
Nonaccrual loan and security i nterest
Deferred compensation liability
Deferred loan fees
Fixed asset depreciation
Retirement benefits liability
Other real estate owned
State net operating loss carryforward
Other
Deferred tax liabilities:
Net unrealized gain on securities available for sale
Prepaid assets
Stock dividends
Mortgage servicing rights
Other
$
Net deferred tax assets
1 0,771
479
1 , 1 71
1 , 123
1
219
63
973
1 88
1 4,988
2,096
1 4,871
9,907
2 , 1 59
1 , 1 07
957
290
223
1 , 1 39
1 , 1 22
334
34,205
(402)
(980)
(225)
(888)
(43)
{2,538)
(796)
(229)
(736)
{43)
{1,804)
$
$
:!2.45Q
$
32,4Q:l
At December 3 1 , 2014, the corporation has an Indiana net operating loss carryforward of approximately
$1 8. 7 m il lion which expires 2028 and an Illinois net operating loss carryforward of approximately $1 .2
m illion which expires 2025. The Corporation evaluated its deferred tax asset at year end 20 1 4 and has
concluded that it is more likely than not that it will be realized. The Corporation expects to have taxable
income in the future such that the deferred tax asset will be realized. Therefore, no valuation allowance
is required.
The difference between the provision for income tax expense shown on the consolidated statements of
income and amount computed by applying the statutory federal income tax rate of 35% to income before
income tax expense is as follows:
201 4
201 3
Income taxes com puted at statutory federal income tax rate
I ncrease (decrease) i n taxes resulting from :
Tax-exempt interest income
Bank owned life insurance
Captive insurance income not subject to tax
State income tax, net of federal income tax
Change in unrecognized tax benefits
Tax credits
Other
$
1 6,875
$
(773)
(2 1 2 )
( 1 05)
2,538
1 18
( 1 38)
307
(731 )
( 1 90)
(391 )
2,392
38
( 1 38)
64
$
1 7,91 9
1 5,738
$
:!7.4Z3
(Continued)
30.
FIRST BANCSHARES, INC. AND SUBSID IARIES N OTES TO CONSOLIDATED FINANCIAL STATEMENTS December 3 1 , 20 1 4 and 201 3 (Dollars in thousands) NOTE 13 - INCOME TAXES (Continued)
Included in accrued interest payable and other liabilities in the consolidated balance sheets at
December 3 1 , 201 4 and 20 1 3, was an income tax contingency reserve in the amount of $843 and $805,
respectively, related to uncertain m atters from income tax returns filed in prior years. The Corporation
does not expect a significant change in unrecognized tax benefits i n the next twelve months .The total
amount of interest and penalties recorded in the consolidated statements of income for the years ended
December 31 , 20 1 4 and 20 1 3 was $29 and $26, and the am ount accrued for interest and penalties at
December 3 1 , 20 1 4 and 201 3 were $ 1 49 and $ 1 20, respectively.
The Corporation and its subsidiaries are subject to U.S. federal income tax as well as income tax of the
State of Indiana and various other states. The Corporation is no longer subject to examination by taxing
authorities for years before 201 0.
NOTE 14 - RELATED PARTY TRANSACTIONS
Certain directors and executive officers of the Corporation and the Bank, as well as companies and
partnerships with which they are affiliated, are customers of the Bank in the ordinary course of business.
At December 3 1 , 20 1 4 and 201 3, the outstanding loans to directors, executive officers and their interests
amounted to $33,042 and $32,51 5.
In addition, there are related parties that have ownership interests in certain assets which are leased on a
long-term basis by the Bank. These lease commitments are included in Note 1 5. These include two of
the Bank's branch buildings and land adjacent to one branch. The Bank entered into current lease
arrangements in December of 2005, October of 201 2 and March of 20 1 3. The terms of the leases are
ten years, five years and five years, respectively, with options to renew, and total monthly payments
(which adjust annually) of $28 as of year end 201 4.
The Bank also entered into a lease for the Operations Center i n March of 2008 with certain related
parties. The term of this lease is ten years, with an option to renew for an additional four periods of ten
years each and monthly payments (which will adjust after five years) of $20 1 as of year end 2014. The
aggregate rent expense under all related party leases was $2, 750 in 20 1 4 and $2 ,586 in 20 1 3.
NOTE 1 5 - COMMITMENTS AND CONTINGENCIES
The Bank leases twenty-six of its branch offices, five ATM locations and four other properties under lease
agreements which expire between May 3 1 , 20 1 5 and June 30, 2023, and require various minimum
annual rentals. The total future minimum rental commitments at Decem ber 3 1 , 2014, including the
related party leases reported above, u nder the leases are $1 1 ,892 and are payable as follows: 201 5 $3,68 1 ; 20 1 6 - $3, 1 77; 201 7 - $3,000; 20 1 8 - $1 , 598; 20 1 9 - $232 and thereafter $204. The total rental
expense amounted to $3, 7 1 9 and $3, 7 1 4 for the years ended December 3 1 , 201 4 and 20 1 3.
The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business
to meet financing needs of its customers. These financial instruments include commitments to make
loans, revolving lines of credit and standby letters of credit. The Bank's exposure to credit loss in the
event of nonperformance by the other party for these financial instruments is represented by the
contractual amount of the com m itments. The Bank follows the same credit policy to make such
com mitments as it uses for on-balance-sheet items.
(Continued)
31 .
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 3 1 , 201 4 and 201 3 (Dollars in thousands) NOTE 1 5 · COMMITMENTS AND CONTINGENCIES (Contin ued )
A summary of the notional or contractual amounts of financial instruments with off-balance-sheet risk at
year end follows:
Commitments to extend credit
Revolving lines of credit
Standby letters of credit
$
3,855
41 9,351
1 6,788
$
3,697
422 , 1 0 1
1 7,233
Since many commitments to make loans expire without being used , the amount does not necessarily
represent future cash commitments. Collateral obtained upon exercise of the commitment is determined
using management's credit evaluation of the borrower and may include real estate, vehicles, business
assets, deposits, and other items. Risk of loss is limited to the contractual amount of the financial
instruments.
There are various contingent liabi lities that are not reflected in the financial statements, including claims
and legal actions arising in the ordinary course of business. I n the opinion of management, the ultimate
disposition of these matters is not expected to have a material effect on the Corporation's financial
condition or results of operations.
NOTE 16 · FAIR VALUE
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit
price) in the principal or most advantageous market for the asset or liability in an orderly transaction
between market participants on the measurement date. The standard describes three levels of i nputs
that may be used to measure fair value:
Level 1 : Quoted prices (unadjusted) for identical assets or liabilities in active markets that the
entity has the ability to access as of the measurement date.
Level 2: Significant other observable inputs other than Level 1 prices such as q uoted prices for
similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are
observable or can be corroborated by observable market data.
Level 3: Significant u nobservable inputs that reflect a reporting entity's own assumptions about
the assumptions that market participants would use in pricing an asset or liability.
The Corporation used the following methods and assumptions to estimate fair value:
M utual Fund Investment: The fair value of mutual fund investments are determined by obtaining quoted
prices on nationally recognized security exchanges (Level 1 inputs).
Securities: The fair values of securities available for sale, other than trust preferred securities, are
determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or
matrix pricing, which is a m athematical technique widely used in the industry to value debt securities
without relying exclusively on quoted prices for the specific securities but rather by relying on the
securities' relationship to other benchmark quoted securities (Level 2 inputs).
(Contin ued)
32.
FIRST BANCSHARES, INC. AND SUBSIDIARIES N OTES TO CONSOLIDATED FINANCIAL STATEMENTS December 3 1 , 201 4 and 201 3 (Dollars in thousands) NOTE 16
-
FAIR VALUE (Continued}
The Corporation's investment in trust preferred securities (TPS) which were issued by financial
institutions and insurance companies were historically priced using Level 2 inputs. However, the decline
in the level of market activity and observable inputs in this class of investments has been significant and
resulted in unreliable external pricing. Broker pricing and bid/ask spreads, when available, vary widely
and the once active market has become comparatively inactive. Consequently, while fair value estimates
derived from Level 2 sources were considered by management in estimating the fair value of the TPS
investments, management also relied upon independent third party estimates for fair value based upon
Level 3 inputs and considers these securities Level 3 valued assets.
The fair value of trust preferred securities (TPS) for the year ended 201 3 was determined using
independent third party information and an internal model developed by the Corporation. For 201 3 , four
independent third parties provided fair market values for TPS. Three of the parties provided fair market
value estimates for all of the TPS using Level 2 inputs. The other party provided fair market value
estimates for all TPS using Level 3 inputs. The Level 3 fair value estimates were based on a discounted
cash flow analysis which included considerations for deferrals within each collateral pool, expectations for
future losses, and the util ization of discount rates that represented market rates inclusive of liquidity
discounts. Management used the Level 3 fair market value estimates and a matrix model developed by
the Corporation to estimate a Level 3 fair value for the rem aining portion of the TPS portfolio. The matrix
model used the Level 3 fa ir market values provided by the independent third party as reference prices
and adjusted for differences in ratings, collateral coverage, expectations of loss and yield to estimate
Level 3 fair market values for the remaining portion of the TPS portfolio.
The Level 2 and Level 3 fai r market value estimates were each weighted n inety percent and ten percent,
respectively for 20 1 3. The assumptions used to determine fa ir value estimates for TPS are subject to
significant change in the near term as new information becomes known about the ability of the underlying
debt issuers to repay their debt obligations collateralizing the TPS, and as market conditions and potential
i nvestor i nterest in these types of long-term investments change.
Derivatives: The fair value of derivative financial instruments is based on derivative valuation models
using market data inputs as of the valuation date. (Level 2 ).
Impaired Loans: At the time a loan is considered impaired, it is valued at the lower of cost or fair value.
I mpaired loans carried at fair value generally receive specific allocations of the allowance for loan losses.
For collateral dependent loans, fair value is com monly based on recent real estate appraisals. These
appraisals may utilize a single valuation approach or a combination of approaches including comparable
sales and the income approach. Adjustments are routinely made in the appraisal process by the
independent appraisers to adjust for d ifferences between the com parable sales and income data
available. Such adjustments are usually significant and typically result in a Level 3 classification of the
inputs for determining fair value. Non-real estate collateral m ay be valued using an appraisal, net book
(Continued)
33.
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 3 1 , 20 1 4 and 201 3 (Dollars in thousands) NOTE 16
-
FAIR VALUE (Continued)
value per the borrower's financial statements, or aging reports, adjusted or discounted based on
management's historical knowledge, changes in market conditions from the time of the valuation, and
management's expertise and knowledge of the client and client's business, resulting in a Level 3 fair
value classification. Impaired loans are evaluated on a quarterly basis for additional impairment and
adjusted accordingly.
Other Real Estate Owned: Assets acquired through or instead of loan foreclosure are initially recorded at
fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently
accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on
recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination
of approaches including comparable sales and the income approach. Adjustments are routinely made in
the appraisal process by the i ndependent appraisers to adjust for differences between the comparable
sales and income data available. Such adjustments are usually sig nificant and typically result in a Level 3
classification of the inputs for determ in ing fair value.
Appraisals for both collateral-dependent impaired loans and real estate owned are performed by certified
general appraisers (for commercial properties) or certified residential appraisers (for residential
properties) whose qualifications and l icenses have been reviewed and verified by the Company. Once
received, a mem ber of the Credit Department reviews the assumptions and approaches utilized in the
appraisal as well as the overall resulting fair value in comparison with independent data sources such as
recent market data or industry-wide statistics. After the review of the appraisal, the Company typically
applies a discount for liquidation and other considerations.
Assets Measured on a Recurring Basis
Assets measured at fair value on a recurring basis are summarized below:
Carrying
Value
Financial Assets:
Securities available-for-sale:
US government sponsored agencies
Mutual fund investments
$
Fair Value Measurements at
December 31, 2014 Using:
Significant
Quoted Prices in
Significant
Other
U nobservable
Active Markets for
Observable
Identical Assets
Inputs
Inputs
(Level 3)
(Level 2)
(Level 1)
601
1 40,967
1 1 ,893
68,059
10 953
$
$
601
1 40,967
1 1 ,893
68,059
$
221 520
$
1 0 953
Total securities available-for-sale
$
2324Z3
$
I nterest rate swaps - assets
$
7,499
$
$
7,499
$
Financial Liabilities:
I nterest rate swaps - liabilities
$
7,499
$
$
7,499
$
jQ953
(Continued)
34.
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 3 1 , 20 1 4 and 20 1 3 ( Dollars in thousands) NOTE 16 - FAIR VALUE (Continued)
December 31, 2013 Using:
Significant
Quoted Prices in
Other
Significant
U nobservable
Active Markets for
Observable
Inputs
Identical Assets
Inputs
(Level 11
(Level 21
(Level 3)
Carrying
Value
Financial Assets:
Securities available-for-sale:
Mutual Fund Investments
Total securities available-for-sale
Interest rate swaps - assets
Financial Liabilities:
Interest rate swaps - liabilities
$
$
1 0,847
$
$
1 27,931
1 ,696
2 1 , 226
28 654
1 27,931
1 ,696
2 1 ,226
28 654
$
150853
$
$
$
49
$
$
$
49
$
$
1Z95QZ
$
$
49
$
49
1Q84Z
28654
The table below presents a reconciliation of all assets measured at fair value on a recurring basis using
significant unobservable inputs (Level 3) for the years ended Decem ber 3 1 , 20 1 4 and 2013:
Trust Preferred Securities Available for Sale Balance of recurring Level 3 assets at January 1 , 201 3
Total gains or losses (realized/unrealized): Included in earnings - rea l ized
Included in other comprehensive income
Principal payments
Proceeds from sale of TPS
Balance of recurring Level 3 assets at December 3 1 , 201 3
Total gains or losses (realized/unrealized): I ncluded in earnings - realized
Included in other comprehensive income
Principal payments
Proceeds from sale of TPS
Transfers in and/or out of Level 3
$ 1 6,956 Balance of recurring Level 3 assets at December 3 1 , 201 4
$
2 , 040
1 9,529
(2,41 3)
(7,458)
28,654 4,51 2
5,484
(37 1 )
(38,279)
(Continued)
35.
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 3 1 , 201 4 and 201 3 (Dollars in thousands) NOTE 16
-
FAIR VALUE (Continued)
Assets Measured on a Non-Recurring Basis
Assets measured at fair value on a non-recurring basis are summarized below:
Carrying
Value
Impaired loans - Commercial real estate
Other real estate owned - Commercial
real estate
$
3,158
$
$
$
$
7,008
3,158
867
867
Carrying
Value
Impaired loans - Commercial real estate
Other real estate owned - Commercial
real estate
December 31. 2014 Using:
Significant
Significant
Other
Quoted Prices in
U nobservable
Observable
Active Markets fo r
Inputs
I nputs
Identical Assets
(Level 3)
(Level 2)
(Level 1)
December 31. 2013 Using:
Significant
Significant
Other
Quoted Prices in
Unobservable
Observable
Active Markets for
Inputs
Inputs
Identical Assets
(Level 3)
(Level 2)
(Level 1)
$
3,056
$
$
7,008
3,056
Impaired loans with specific loss allocations, which are secured primarily by commercial real estate, and
which are measured for impairment using the fair value of the collateral for collateral dependent loans,
had a principal balance of $4,5 1 3, with a valuation allowance of $1 ,355 at December 3 1 , 20 1 4, resulting
in an additional provision for loan losses of $1 89 for the year ended December 3 1 , 2 0 1 4 . At
Decem ber 3 1 , 20 1 3, i mpaired loans with specific loss allocations, had a principal balance of $1 0,01 7,
with a valuation allowance of $3,009 at December 3 1 , 20 1 3, resulting in an additional provision for loan
losses of $692 for the year ended December 31 , 201 3 .
Other real estate owned, which is secured primarily by commercial real estate properties, is measured at
the lower of cost of carrying or fair value less costs to sell, had a carrying amount of $867, which is made
up of the outstanding balance of $ 1 , 032, net of a valuation allowance of $ 1 65 at December 3 1 , 201 4,
resulting in a write-down of $1 5 for the year ending December 3 1 , 2014. At December 3 1 , 20 1 3, other
real estate owned had a carrying amount of $3,056, which is made up of the outstanding balance of
$5,932, net of a valuation allowance of $2 ,876 at December 3 1 , 201 3, resulting in a write-down of $642
for the year ending Decem ber 3 1 , 20 1 3.
(Continued)
36.
FIRST BANCSHARES, INC. AND SUBSIDIARIES N OTES TO CONSOLIDATED FI NANCIAL STATEMENTS December 3 1 , 20 1 4 and 201 3 (Dollars i n thousands) NOTE 16
-
FAI R VALUE ( Continued)
The following table presents quantitative information about recurring Level 3 fair value measurements at
December 3 1 , 201 3:
Fair value
December 31, 2013
Trust Preferred
Securities
$
28,654
Valuation
Technique(s)
Discounted cash flow
Unobservable lnput(s)
Collateral default rate
Recovery probability
Range
(Weighted
Average)
0.03-100.0% (0.5%)
0-100.0%(21.8%)
The following table presents quantitative information about level 3 fair value measurements for financial
instruments measured at fair value on a non-recurring basis at December 31 , 20 1 4 and 201 3:
Fair value
December 31, 2014
I mpaired loans
Other real estate
owned
Other real estate
owned
Unobservable lnput{s}
Range
(Weighted
Average}
$
3,158
Sales comparison
approach
0-40.0% (27.3%)
Adjustment for differences
between the comparable
sales
Capitalization rate
0-6.0% (6.0%)
0-100.0% (32.9%)
Discounts for collection
issues and changes in
market conditions
$
867
Sales comparison
approach
Discounts fo r changes in
market conditions
Fair value
December 31, 2013
I mpaired loans
Valuation
Technique(s)
$
$
7,008
3,056
Valuation
Technique{s}
Sales comparison
approach
Sales comparison
approach
Unobservable lnput{s}
Adjustment for differences
between the comparable
sales
Capitalization rate
Discounts for collection
issues and changes in
market conditions
Discounts fo r changes in
market conditions
0-46.0% (8.8%)
Range
(Weighted
Average}
0-28.0% (12.8%)
0-13.0% (10.1%)
0-33.0% (15.0%)
0-40.0% (7.9%)
(Continued)
37.
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED F INANC IAL STATEMENTS December 3 1 , 201 4 and 201 3 (Dollars in thousands) NOTE 16 · FAIR VALUE (Continued)
Fair Values of Financial Instruments:
The carrying amount and estimated fair values of financial instruments at year end were as follows:
2 0 13
2014
Financial assets:
Cash and cash equivalents
Securities available for sale
Repurchase agreement investments
Mutual fund investment
FHLB stock
Loans and mortgage loans held
for sale, net of allowance for
loan losses
Accrued interest receivable
Interest rate swaps
Financial liabilities:
Deposits
Securities sold under agreements
to repurchase
Advances from FHLB
Other borrowings
Accrued interest payable
Interest rate swaps
$
116,217
221,520
30,000
10,953
9,100
$
2,244, 847
7,006
7,499
116,217
221,520
30,000
10,953
n/a
2,293,070
7,006
7,499
Fair
Value
Carrying
Amount
Fair
Value
Carrying
Amount
$
117,278
179,507
$
117,278
179,507
1 0,847
7,987
1 0,847
n/a
1,923,526
6,500
49
1,938,317
6,500
49
$ (2,229,972)
$ (2,176,750)
$ (2,01 4,330)
$ (1,981,286)
(4,428)
(144,534)
(4,428)
(144,581)
(45,000)
(1,885)
(7,499)
(45,000)
(1,885)
(7,499)
(2,086)
(46,000)
(11,700)
(20,000)
(963)
(49)
(2,086)
(46,406)
(11,621)
(19,997)
(963)
(49)
The methods and assumptions used to estimate fair value not previously described are as follows:
Carrying amount is the estimated fair value for cash and cash equivalents, accrued interest receivable and
payable, repurchase agreement investments, mutual fund investments, demand deposits, short-term debt,
and variable rate loans or deposits that reprice frequently and fully. For fixed rate loans or deposits and for
variable rate loans or deposits with infrequent repricing or repricing limits, fair value is based on discounted
cash flows using current market rates applied to the estimated life and credit risk without considering
widening credit spreads due to market illiquidity. Fair value of debt is based on current rates for similar
financing. It was not practicable to determine the fair value of FHLB stock due to restrictions placed on its
transferability. The fair value of off-balance-sheet items is not considered material and, therefore, is not
presented in the above table.
NOTE 1 7 · REGULATORY MATTERS
The Corporation and Bank are subject to regulatory capital requirements administered by federal banking
agencies. Capital adequacy guidelines and, for the Bank, prompt corrective action regulations involve
quantitative measures of assets, l iabilities, and certain off-balance-sheet items calculated under
regulatory accounting practices. Capital amounts and classifications are also subject to qualitative
judgments by regulators about components, risk weightings, and other factors, and the regulators can
lower classifications in certain cases. Fai lure to meet various capital requirements can initiate regulatory
action that could have a direct material effect on the consolidated financial statements. Management
believes as of December 31 , 2014, the Corporation and the Bank met all capital adequacy requirements
to which they are subject.
(Continued)
38.
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATE D FINANCIAL STATEMENTS December 3 1 , 20 1 4 and 201 3 (Dollars in thousands) NOTE 1 7
-
REGU LATORY MATTERS (continued)
The Bank's prompt corrective action regulations provide five classifications, including well capitalized,
adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized ,
although these terms are not used to represent overall financial condition. If only adequately capitalized,
regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are
limited, as is asset growth and expansion, and plans for capital restoration are requ ired.
At year end, the Corporation and Bank's actual capital levels and minimum required levels were:
Minimum Required
For Capital
Adeguac Puq;ioses
Amount
Ratio
Actual
2014
Total capital (to risk weighted assets)
Consolidated
Bank
Tier 1 capital (to risk weighted assets)
Consolidated
Bank
Tier 1 capital (to average total assets)
Consolidated
Bank
201 3
Total capital (to risk weighted assets)
Consolidated
Bank
Tier 1 capital (to risk weighted assets)
Consolidated
Bank
Tier 1 capital (to average total assets)
Consolidated
Bank
Minimum Required
To Be Well
Capitalized
Under Prompt Corrective
Action Regulations
Amount
Ratio
Amount
Ratio
$ 275,678
$ 31 9,987
1 2.68%
1 4.72%
$ 1 73,970
$ 1 73,901
8.00%
8.00%
N/A
$ 21 7,376
N/A
1 0.00%
$ 248,502
$ 292 ,81 1
1 1 .43%
1 3.47%
$
$
86,985
86,951
4.00%
4.00%
N/A
$ 1 30 ,426
N/A
6.00%
$ 248,502
$ 292,81 1
9.49%
1 1 . 1 8%
$ 1 04,738
$ 1 04,738
4.00%
4.00%
N/A
$ 1 30,923
N/A
5.00%
$ 251 ,628
$ 277,564
1 2.26%
1 3.53%
$ 1 64, 1 86
$ 1 64, 1 34
8.00%
8.00%
N/A
$ 205 , 1 67
N/A
1 0.00%
$ 220,842
$ 252,038
1 0.76%
1 2.28%
$
$
82,093
82,067
4.00%
4.00%
N/A
$ 1 23 , 1 00
N/A
6.00%
$ 220,842
$ 252,038
9.56%
1 0.91 %
$
$
92,421
92,421
4.00%
4.00%
N/A
$ 1 1 5,526
N/A
5.00%
At year-end 20 1 4 and 20 1 3, the most recent regulatory notifications categorized the Bank as well
capitalized under the regulatory framework for prompt corrective action. There are no conditions or
events since that notification that m anagement believes have changed the institution's category.
NOTE 1 8
-
DERIVATIVE FINANCIAL I NSTRUMENTS
The Corporation enters into derivative instruments for the benefit of its customers. The notional amounts
of these customer derivative instruments and the offsetting counterparty derivative instruments were
$223.9 m illion and $223.9 m il lion , respectively, at December 3 1 , 201 4, and 1 93.8 million and $1 93.8
million, respectively, at December 3 1 , 201 3. These d erivative contracts do not qualify for hedge
accounting. These instruments include interest rate swaps. Commonly, the Corporation will economically
hedge significant exposures related to these derivative contracts entered into for the benefit of customers
by entering into offsetting contracts with approved, reputable, independent counterparties with
substantially match ing terms.
(Continued)
39.
FIRST BANCSHARES, I NC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 3 1 , 201 4 and 201 3 (Dollars in thousands) NOTE 1 8
-
DERIVATIVE FINANCIAL INSTRU MENTS (continued)
Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. The
Corporation's exposure is limited to the replacement value of the contracts rather than the notional,
principal or contract amounts. There are provisions in our agreements with the counterparties that allow
for certain unsecured credit exposure up to an agreed threshold. Exposures in excess of the agreed
thresholds are collateralized. In addition, the Corporation minimizes credit risk through credit approvals,
limits, and monitoring procedures.
The following table reflects the fair value hedges included in the Consolidated Balance Sheets as of
December 3 1 :
20 1 3
20 1 4
Fair
Fair
Notional
Notional
Value
Amount
Value
Amount
Included in other assets:
Interest rate swaps
$ 223,875
$
7,499
$ 1 93,790
$
49
Included in liabilities:
Interest rate swaps
$ 223,875
$
7,499
$ 1 93,790
$
49
The effect of derivative instruments on the Consolidated Statement of Income for the twelve months
ended December 31 , 2 0 1 4 and 201 3 are as follows:
Amount of Gain or (Loss)
Recognized on Derivative
201 4
2013
Interest rate swaps:
Included in other income
$
859
$
1 ,420
(Continued)
40.
FIRST BANCSHARES , INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS Decem ber 3 1 , 20 1 4 and 201 3 ( Dollars in thousands) NOTE 1 9 - PARENT COMPANY CONDENSED FINANCIAL STATEMENTS
Condensed financial statements for First Bancshares, Inc. ( parent company only) follow:
CON DENSED BALANCE SHEETS
December 3 1 , 201 4 and 201 3
2013
201 4
ASSETS
Cash
Investment in Centier Bank and CRM, LLC
$
Total assets
LIABILITIES
Other borrowings
Accrued interest payable and other liabilities
Total liabilities
230
295,222
$
1 08
252,703
295,452
$ 252,81 1
45,000
1 ,206
46,206
1 1 ,700
20,000
1 54
3 1 ,854
STOCKHOLDERS' EQUITY
Common stock
Capital surplus
Retained earnings
Accumulated ·other comprehensive loss, net
Total stockholders' equ ity
111
1 4,973
233,41 8
744
249,246
1 09
1 1 ,046
21 3,035
(3,233)
220,957
Total liabilities and stockholders' equity
$ 295.452
$ 252.81 1
201 4
20 1 3
$
$
CONDENSED STATEMENTS OF INCOME
Years ended December 3 1 , 20 1 4 and 20 1 3
Dividend income
Interest expense on subordinated debentures and borrowings
Other operating expenses
Income before equity in undistributed
net income of Centier Bank and C RM, LLC
Equity in u ndistributed net income of Centier Bank and CRM , LLC
Income tax (benefits)
$
9,786
( 1 ,692)
(50)
$
8,044
6,269
2 1 , 541
20,822
(71 0)
3Q,295
Net income
7,286
(969)
(48)
(403)
$
27,491
(Continued)
41 .
FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED F INANCIAL STATEM ENTS December 31 , 201 4 and 201 3 (Dollars in thousands)
NOTE 1 9 - PARENT COMPANY CONDENSED FINANCIAL STATEMENTS (Continued)
CONDENSED STATEM ENTS OF CASH FLOWS
Years ended December 3 1 , 201 4 and 20 1 3
201 3
201 4
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash
from operating activities
Equity in undistributed net income of subsidiaries
Increase (decrease) in other l iabilities
Net cash from operating activities
$
Cash flows from investing activities
Investment in Centier Bank
Investment in CRM, LLC
Net cash from investing activities
Cash flows from financing activities
Proceeds from borrowings
Payments for conversion of subordinated debentures
Cash d ividends paid
Net cash from financing activities
30,295
$
2 7,494
(21 , 541 )
1,052
9,806
(20,822)
(2 1 )
6,651
( 1 7,000)
(1 7,000)
(20 ,000)
(250)
(20,2 50)
25,000
(7,772)
(9,9 1 2 )
7 316
20,000
(6)
(6,527)
1 3.467
Net change in cash and cash equivalents
1 22
( 1 32 )
Cash and cash equivalents at beginning of the year
1 08
240
Cash and cash equivalents at the end of the year
$
230
$
1Q8
42.
FIRST BANCSHARES, INC. FR Y
REPORT ITEM #2a ORGANIZATION CHART 12131114 CENTIER RISK llAHAGEMENT
101 COH'\lth'"'t()\ CE:\TER ;JRr\."E SU:-fE!Sj
...
LASV
E:GAS. NEV.-.&
STATt Of IH
TIOt.I . NEVM'M.
100%
CENTIER BAHK
1600°119TH STREET WHITING, IN 4639<1
•r•CO PORAllOh •INOIAr..A lfArf
OWNS
100%
1%nonm1n Ing member
Results: A list of branches for your holding company: FIRST BANCSHARES, INC. (1204560) of WHITING, IN.
The data are as of 12/31/2014. Data reflects information that was received and processed through 07/06/2015.
Reconciliation and Verification Steps
1. In the Data Action column of each branch row, enter one or more of the actions specified below.
2. If required, enter the date in the Effective Date column.
Actions
OK: If the branch information is correct, enter 'OK' in the Data Action column.
Change: If the branch information is incorrect or incomplete, revise the data, enter 'Change' in the Data Action column and the date when this information first became valid in the Effective Date column.
Close: If a branch listed was sold or closed, enter 'Close' in the Data Action column and the sale or closure date in the Effective Date column.
Delete: If a branch listed was never owned by this depository institution, enter 'Delete' in the Data Action column.
Add: If a reportable branch is missing, insert a row, add the branch data, and enter 'Add' in the Data Action column and the opening or acquisition date in the Effective Date column.
If printing this list, you may need to adjust your page setup in MS Excel. Try using landscape orientation, page scaling, and/or legal sized paper.
Submission Procedure
When you are finished, send a saved copy to your FRB contact. See the detailed instructions on this site for more information.
If you are e‐mailing this to your FRB contact, put your institution name, city and state in the subject line of the e‐mail.
Note:
To satisfy the FR Y‐10 reporting requirements, you must also submit FR Y‐10 Domestic Branch Schedules for each branch with a Data Action of Change, Close, Delete, or Add.
The FR Y‐10 report may be submitted in a hardcopy format or via the FR Y‐10 Online application ‐ https://y10online.federalreserve.gov.
* FDIC UNINUM, Office Number, and ID_RSSD columns are for reference only. Verification of these values is not required.
Data Action Effective Date
OK
OK
OK
OK
Branch Service Type
Branch ID_RSSD*
Full Service (Head Office)
783648
Full Service
4720481
Full Service
4377595
Full Service
4512350
Street Address
1500 119TH STREET
568 EAST CARMEL DRIVE
11611 MERIDIAN STREET, SUITE 175
9704 LINCOLN PLAZA CENTER
City
WHITING
CARMEL
CARMEL
CEDAR LAKE
State
IN
IN
IN
IN
Zip Code
46394 46032 46032 46303 OK
OK
OK
OK
OK
OK
OK
OK
OK
OK
OK
OK
OK
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Popular Name
CENTIER BANK
CARMEL DRIVE BRANCH
CARMEL OFFICE
CEDAR LAKE STRACKS BRANCH
103 BROADWAY‐CHESTERTON 2423368 DOWNTOWN BRANCH
2423386 1600 SOUTH CALUMET ROAD BRANCH
2315968 CHESTERTON BRANCH
3501302 COURT STREET BRANCH
156541 CROWN POINT OFFICE
3719901 CROWN POINT STRACKS BRANCH
2108889 FRANCISCAN DRIVE BRANCH
2109886 MAIN STREET BRANCH
2093033 SCHEREVILLE EAST
2109877 WINIFIELD BRANCH
2094795 DYER BRANCH
3501281 EAST CHICAGO BRANCH
4763853 ELKHART BRANCH
CHESTERTON
CHESTERTON
CHESTERTON
CROWN POINT
CROWN POINT
CROWN POINT
CROWN POINT
CROWN POINT
CROWN POINT
CROWN POINT
DYER
EAST CHICAGO
ELKHART
IN
IN
IN
IN
IN
IN
IN
IN
IN
IN
IN
IN
IN
OK
OK
OK
OK
OK
OK
OK
OK
OK
OK
OK
OK
OK
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
4049333
3719910
3909551
3501115
2096959
4285551
4529040
3501094
2096294
3501432
3501142
3501218
4029139
103 BROADWAY
1600 SOUTH CALUMET ROAD
104 GRANT STREET
1501 SOUTH COURT STREET
117 EAST JOLIET STREET
10851 BROADWAY
200 FRANCISCAN ROAD
1276 NORTH MAIN
5191 WEST LINCOLN HIGHWAY
8020 EAST 109TH
1121 SHELFIELD AVENUE
720 WEST 145TH STREET
303 COUNTY ROAD 17
9921 DUPOINT CIRCLE DRIVE WEST SUITE 110
4883 BROADWAY
1326 BROADWAY
650 SOUTH LAKE STREET
500 NORTH BROAD STREET
5433 HOHMAN AVENUE
2635 169TH STREET
9102 INDIANAPOLIS BOULEVARD
ROUTE 41 AND 45TH AVENUE
433 MAIN STREET
7760 EAST 37TH AVENUE
73 PINE LAKE AVENUE
323 COLUMBIA STREET SUITE 1A
FORT WAYNE
GARY
GARY
GARY
GRIFFITH
HAMMOND
HAMMOND
HIGHLAND
HIGHLAND
HOBART
HOBART
LA PORTE
LAFAYETTE
OK
OK
OK
OK
OK
OK
OK
OK
OK
OK
OK
OK
Full Service
Full Service
Limited Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
4801960 LAFAYETTE SOUTH
125042 LOWELL BRANCH
3719929 LOWELL EXPRESS OFFICE
2108683 MERRILLVILLE OFFICE
2872911 MERRILLVILLE ULTRA BRANCH
3501414 SOUTHLAKE OFFICE
4049043 MISHAWAKA OFFICE
3501197 MUNSTER BRANCH
3719938 PLYMOUTH OAK BRANCH
2473831 PORTAGE BRANCH
2329170 TOWN AND COUNTRY BRANCH
3501160 ST. JOHN BRANCH
1921 VETERANS MEMORIAL PKWY SOUTH
1914 EAST COMMERCIAL AVENUE
221 EAST COMMERCIAL AVENUE
8310 BROADWAY
6001 BROADWAY
3198 EAST 81ST STREET
255 EAST DAY ROAD
9716 WHITE OAK AVENUE
537 NORTH OAK ROAD
3220 WILLOW CREEK ROAD
6046 CENTRAL AVENUE
9151 WICKER AVENUE
LAFAYETTE
LOWELL
LOWELL
MERRILLVILLE
MERRILLVILLE
MERRILLVILLE
MISHAWAKA
MUNSTER
PLYMOUTH
PORTAGE
PORTAGE
SAINT JOHN
FORT WAYNE OFFICE
GARY ‐ GLEN PARK BRANCH
GARY ‐ MIDTOWN BRANCH
GARY ‐ MILLER BRANCH
GRIFFITH BRANCH
HAMMOND HOHMAN AVENUE BRANCH
HAMMOND VANTIL'S
HIGHLAND ‐ MARTHA BRANCH
HIGHLAND BRANCH
HOBART DOWNTOWN BRANCH
HOBART STRACKS BRANCH
LA PORTE BRANCH
LAFAYETTE OFFICE
County
LAKE
HAMILTON
HAMILTON
LAKE
Country
FDIC UNINUM* Office Number*
UNITED STATES
8136
0
UNITED STATES Not Required
Not Required
UNITED STATES
541125
62
UNITED STATES
539316
59
Head Office
Head Office ID_RSSD* Comments
CENTIER BANK
783648
CENTIER BANK
783648
CENTIER BANK
783648
CENTIER BANK
783648
46304 PORTER
46304 PORTER
46304 PORTER
46307 LAKE
46307 LAKE
46307 LAKE
46307‐489LAKE
46307‐278LAKE
46307 LAKE
46307 LAKE
46311‐109LAKE
46312 LAKE
46516 ELKHART
UNITED STATES
42508
UNITED STATES
276750
UNITED STATES
228037
UNITED STATES
441081
UNITED STATES
2842
UNITED STATES
451893
UNITED STATES
203053
UNITED STATES
203051
UNITED STATES
228032
UNITED STATES
203052
UNITED STATES
228031
UNITED STATES
534080
Not Required
18
19
17
43
5
48
10
8
3
9
2
57
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
783648
783648
783648
783648
783648
783648
783648
783648
783648
783648
783648
783648
783648
IN
IN
IN
IN
IN
IN
IN
IN
IN
IN
IN
IN
IN
46825 ALLEN
46409 LAKE
46407 LAKE
46403 LAKE
46319‐229LAKE
46320 LAKE
46323 LAKE
46322 LAKE
46322 LAKE
46342 LAKE
46342 LAKE
46350 LA PORTE
47901 TIPPECANOE
UNITED STATES
506077
UNITED STATES
463556
UNITED STATES
478852
UNITED STATES
419653
UNITED STATES
228033
UNITED STATES
519097
Not Required
UNITED STATES
441971
UNITED STATES
228030
UNITED STATES
357251
UNITED STATES
228050
UNITED STATES
432878
UNITED STATES
511678
52
50
51
37
4
56
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
783648
783648
783648
783648
783648
783648
783648
783648
783648
783648
783648
783648
783648
IN
IN
IN
IN
IN
IN
IN
IN
IN
IN
IN
IN
47909 46356 46356 46410 46410 46410 46545 46321 46563 46368 46368 46373 UNITED STATES Not Required
Not Required
CENTIER BANK
UNITED STATES
15697
11 CENTIER BANK
Not Required
CENTIER BANK
UNITED STATES
203050
7 CENTIER BANK
UNITED STATES
228048
30 CENTIER BANK
UNITED STATES
423186
39 CENTIER BANK
UNITED STATES
506078
53 CENTIER BANK
UNITED STATES
358971
35 CENTIER BANK
UNITED STATES
445625
46 CENTIER BANK
UNITED STATES
228044
26 CENTIER BANK
UNITED STATES
228042
24 CENTIER BANK
UNITED STATES
357252
34 CENTIER BANK
783648
783648
783648
783648
783648
783648
783648
783648
783648
783648
783648
783648
TIPPECANOE
LAKE
LAKE
LAKE
LAKE
LAKE
ST JOSEPH
LAKE
MARSHALL
PORTER
PORTER
LAKE
45
1
33
32
41
55
OK
OK
OK
OK
OK
OK
OK
OK
OK
OK
OK
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
Full Service
3719947
2423407
3501450
2100874
2103697
2473822
3501375
2423434
4763871
4720472
3501348
ST. JOHN STRACKS BRANCH
3303 PINES VILLAGE CIRCLE BRANCH
CALUMET AVENUE BRANCH
LINCOLNWAY BRANCH
NORTH CALUMET AVENUE BRANCH
SOUTH HAVEN OFFICE
VALPO EAST OFFICE
VALPO SOUTH BRANCH
WEST LAFAYETTE BRANCH
WEST LAFAYETTE MEIJER BRANCH
STRACKS ‐ WHITING BRANCH
9825 WICKER AVENUE
3303 PINES VILLAGE CIRCLE
1605 CALUMET AVENUE
150 LINCOLNWAY
1802 NORTH CALUMET AVENUE
390 WEST US HIGHWAY 6
2707 LAPORTE AVENUE
360 MORTHLAND DRIVE
1020A SAGAMORE PARK CENTRE
2636 US 52(SAGAMORE PARKWAY)
1836 CALUMET AVENUE
SAINT JOHN
VALPARAISO
VALPARAISO
VALPARAISO
VALPARAISO
VALPARAISO
VALPARAISO
VALPARAISO
WEST LAFAYETTE
WEST LAFAYETTE
WHITING
IN
IN
IN
IN
IN
IN
IN
IN
IN
IN
IN
46373 LAKE
46383 PORTER
46383 PORTER
46383 PORTER
46383‐313PORTER
46385 PORTER
46383 PORTER
46383 PORTER
47906 TIPPECANOE
47906 TIPPECANOE
46394 LAKE
UNITED STATES
450836
47
UNITED STATES
228039
21
UNITED STATES
228045
27
UNITED STATES
228034
12
UNITED STATES
228035
13
UNITED STATES
228043
25
UNITED STATES
433299
42
UNITED STATES
540409
61
Not Required
Not Required
UNITED STATES
228046
28
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
CENTIER BANK
783648
783648
783648
783648
783648
783648
783648
783648
783648
783648
783648
FIRST BANCSHARES, INC. F R V-6 ITEM2b Item 2b was updated on the http://structurelists.federalreserve.gov/ website
g
And e-mailed to BranchReview@chi.frb.or
NAME AND ADDRESS
# OF SHARES
PERCENT
SCHRAGE/HINSHAW FAMILY
PATRICIA HINSHAW JOSEPH (n/k/a Patricia Burgess)
22,704.5
20.525%
MICHAEL E. SCHRAGE
13,417.5
12.1 29%
LAURA (SCHRAGE) CAMPBELL
10.1 1 5 0
9.144%
JILL R SCHRAGE
9.398.0
8.496%
STEPHANIE SCHRAGE
7,930.0
7.169%
MELISSA (SCHRAGE) CONTRUCCI
7,567.0
6.841%
SCOTT HINSHAW
3.872.0
3.500%
KIMBERLY (HINSHAW) THARIN
3,872.0
3.500%
MARK HINSHAW
C/O CENTIER BANK
3,872.0
3.500%
82,748.0
74.805%
1 1 ,930.0
10.785%
MERRILLVILLE, IN 46410 USA
THE FIRST COMPANY
TRUST DEPT HOLDS 401(k) & ESOP SHS
CIO CENTIER BANK
MERRILLVILLE, IN 46410 USA
FIRST BANCSHARES, INC.
FR Y-6 REPORT ITEM #4
DIRECTORS AND OFFICERS
12131114
(1)
NAME AND ADDRESS (CITY AND STA TE/COUNTRY): Patricia Hinshaw Joseph (n/k/a Patricia B u rgess)
c/o Centier Bank
600 E. 841h Ave n ue
Merrillville, I ndiana 464 1 0
(2) PRINCIPAL OCCUPA TION:
Housewife
(3) TITLE OR POSITION WITH:
(a) THE BANK HOLDING COMPANY:
None
(b) ALL SUBSIDIARIES OF THE BANK HOLDING COMPANY:
Director 970 1 Corporation
-
(c) OTHER COMPANIES IN WHICH SERVING AS DIRECTOR,
TRUS TEE, PARTNER OR EXECUTIVE OFFICER:
None
(4) NUMBER OF SHARES AND PERCENTA GE OF EA CH CLASS OF
VOTING SECURITIES OWNED, CONTROLLED, OR HELD WITH
POWER TO VO TE IN:
2 2 ,704 . 5 shares common = 20 . 525%
(b) ALL S UBSIDIARIES OF THE BANK HOLDING COMPANY:
None
(c) OTHER COMPANIES, IF 25 PERCENT OR MORE OF ITS OIS
VOTING SECURITIES OR PROPORTIONA TE INTERES T IN A
PARTNERSHIP ARE HELD:
N one
FRY-6-1 O.doc
FIRS T BANCSHA RES, INC.
FR Y-6 REPORT I TEM #4
DIREC TORS A ND OFFICERS
1 213 1114
(1)
NAME AND ADDRESS (CITY AND S TA TE/COUNTR Y) :
Michael E . Sch rage
c/o Centier B a n k
600 E . 841h Ave n u e Merri l lville, I nd i a n a 464 1 0 (2) PRINCIPAL OCCUPA TION:
Centier B a n k - P resident
Di rector/C h a i rm a n/President
(b) A LL
S UBSIDIARIES OF THE BANK HOLDING COMPANY:
D irector/C h a i r m a n/President - Centier B a n k
Director/Chairma n/President
-
970 1 Corporation
(c) O THER COMPANIES IN WHICH SERVING AS DIRECTOR, TRUS TEE, PA R TNER OR EXECUTIVE OFFICER: O P C E N , LLC
(4)
NUMBER OF SHARES A ND PERCENTA GE OF EA CH CLASS OF VO TING
SECURITIES OWNED, CONTROLLED, OR HELD WITH POWER TO VO TE IN:
1 3 , 4 1 7 . 5 s h a res com m on = 1 2 . 1 29%
(b) ALL SUBSIDIA RIES OF THE BANK HOLDING COMPANY:
None
(c) O THER COMPANIES, IF
SECURITIES
25
PERCENT O R MORE O F I TS O!S VO TING
OR PROPOR TIONA TE INTERES T IN A PARTNERSHIP
A RE HELD:
O P C E N , LLC - partners h ip i nterest - 49%
F R Y -6-9. doc
FIRS T BANCSHA RES, INC.
12131114
(1)
NAME AND ADDRESS (CITY AND S TA TE/COUNTRY): Michael R . Barker
clo Centier Bank
600 E. 841h Avenue
Merri llville, I ndiana 464 1 0
C PA
Director
(b) A LL SUBSIDIARIES OF THE BANK HOLDING COMPANY:
Director - Centier Bank
(c) O THER COMPANIES IN WHICH SERVING AS DIREC TOR,
I nd iana C PA Society
VO TING SECURITIES OWNED, CONTROLLED, OR HELD WITH
POWER TO VOTE IN:
25 shares com mon
(n/o I RA Rollover) =
0 . 023% (b) ALL SUBSIDIARIES OF THE BANK HOLDING COMPANY:
-0- shares
(c) O THER COMPANIES, IF 25 PERCENT OR MORE OF ITS O/S
VO TING SECURITIES OR PROPORTIONA TE INTERES T IN A
None
FIRS T BANCSHARES, INC. FR Y-6 REPORT ITEM ##4 DIREC TORS AND OFFICERS 1213 1114
(1)
NAME AND ADDRESS (CITY AND S TA TE/COUNTRY): Timothy A. Brust
clo Centier Bank
600 E. 841 h Aven ue
Merrillville, I nd iana 464 1 0
Commercial Rea l Estate B roker
Director
(c) O THER COMPANIES IN WHICH SERVING A S DIRECTOR,
Wille Stiener & B rust, I nc. ( P resident)
Taltree Arboretum &Gardens (Board Director)
Reg ional Development Corporation (Board Director and Secretary)
(4) NUMBER OF SHARES AND PERCENTAGE OF EA CH CLASS OF
POWER TO VOTE IN:
-0- shares
-0- shares
(c) OTHER COMPANIES, IF 25 PERCENT OR MORE OF ITS OIS
Wille Stiener & Brust, I n c . ( P resident/45% ownership)
FIRS T BANCSHARES, INC.
FR Y-6 REPORT ITEM '#4.
1 213 1114
(1)
NAME AND ADDRESS (CITY AND S TA TE/COUNTRY): M ichael D . Cahill c/o Centier Bank 600 E . s4th Avenue Merrillville, I ndiana 464 1 0 (2) PRINCIPAL OCCUPA TION:
P resident/C EO, P hysicians Hea lth Plan of Northern Ind iana, I nc.
Director
Director
(c) O THER COMPANIES IN WHICH SERVING AS DIRECTOR,
AWS Foundation , I nc . (Director)
A.W. H old ings, LLC (Director) Physicians Health Plan of N orthern Indiana, I nc. (Executive Officer) AWS Foundation , I nc. (Executive Officer, i nterim C EO) (4) NUMBER OF SHARES AND PERCENTA GE OF EA CH CLASS OF
POWER TO VOTE IN:
(a) THE BANK HOLDING COMPANY: None
(b) ALL SUBSIDIARIES OF THE BANK HOLDING COMPANY: None
PARTNERSHIP ARE HELD: None
FIRS T BANCSHA RES, INC. FR Y-6 REPORT ITEM #4 DIRECTORS AND OFFICERS 1213 1114
(1)
NAME AND ADDRESS (CITY AND S TA TE/COUNTRY): Jennifer Callison c/o Centier Bank 600 E . 841 h Avenue Merril lville, I nd i a n a 464 1 0 (2) PRINCIPAL OCCUPA T/ON:
Residential Rea l Estate
(3)
TITLE OR POSITION WITH:
Director
D irector - Centier Bank
POWER TO VOTE IN:
-0- shares
(b) A LL SUBSIDIARIES OF THE BANK HOLDING COMPANY:
-0- shares
M i ke Thomas Associates/F . C . Tucker Callison-Thomas I nvestments , LLC Sauer Call ison Thomas , LLC FIRST BANCSHA RES, INC. FR Y-6 REPORT ITEM #4 DIRECTORS AND OFFICERS 12131114
(1)
NAME AND ADDRESS (CITY AND S TA TE/COUNTRY): M ichael A. Carty c/o Centier Bank 600 E . 841 h Ave n ue Merrillville, I nd ia n a 464 1 0 (2) PRINCIPAL OCCUPA T/ON:
Reti red
Director
None
POWER TO VO TE IN:
2 5 shares common = 0 . 023% (n/o I RA) (b) ALL S UBSIDIARIES OF THE BANK HOLDING COMPANY:
-0- shares
None
FR Y-6 REPORT ITEM tu DIRECTORS AND OFFICERS 12131114
(1)
NAME AND ADDRESS (CITY AND S TA TE/COUN TRY): Timothy E . Healy
c/o Centier Bank
600 E. 84 1h Aven ue
Merri llville, I nd iana 464 1 0
Real Estate Developer
Di rector
Di rector - Centier Bank
(c) OTHER COMPANIES IN WHICH SERVING AS DIRECTOR,
C lybourne NW Partners LP et a l . (see attached)
(4) NUMBER OF SHARES AND PERCENTA GE OF EACH CLASS OF
POWER TO VO TE IN:
63 shares common
=
0 . 057%
(r/i/n/o spouse)
-0- shares
(c) OTHER COMPANIES, IF 25 PERCENT OR MORE OF ITS O/S
C lybo u rne NW Partners L P
I n n ovation Center H o lladay NW Tax Sale Partners
25%
30%
3 5 . 08%
FIRS T BANCSHARES, INC. FR Y-6 REPORT ITEM #4 DIREC TORS AND OFFICERS 12131114
(1)
NAME AND ADDRESS (CITY AND S TA TE/COUNTRY): Terry A . Larson c/o Centier Bank 600 E . 841h Avenue Merri llville, I ndiana 464 1 0 (2) PRINCIPAL OCCUPA TION:
Engineer
Director
Larson-Da n ielson Construction C o . , Inc.
Viking Development, LLC
N orthman P roperties, LLC
G reater LaPorte Economic Development Corporation - Director
39 North Conserva ncy D istrict - Director, Vice Chair
LaPorte Economic Advancement Foundation - Director
LaPorte Com m u n ity Development Partners h i p , LLC - Director
POWER TO VOTE IN:
1 00 shares - 0 . 090%
-0- shares
Larson-Dan ielson Construction Co. , I nc. - 2 5 % Viking Development, L L C 2 5 % N o rthman P roperties , L L C 2 5 % -
-
FRY-6-5.doc
FIRS T BANCSHARES, INC. FR Y-6 REPORT ITEM '114 DIRECTORS AND OFFICERS 12131114
(1)
NAME AND ADDRESS (CITY AND S TA TE/COUNTRY): M ichael R. Leep, Sr.
c/o Centier Ban k
600 E . s4 t h Avenue Merrillville, I ndiana 464 1 0 (2) PRINCIPAL OCCUPA TION:
P resident - G u rley Leep Automotive G roup
Director
See attached list of busi ness i nterests
(4) NUMBER OF SHARES AND PERCENTAGE OF EA CH CLASS OF
POWER TO VOTE IN:
277 shares com mon = 0 . 2 50%
None
None
FRY-6-2.doc
M I CHAEL R. LEEP S R . B U S TN RSS INTERESTS FEB 20 1 3
M A N A O E M EN ' J ' COM P A N I E S :
Lee p Enterprises, L . L. C . M i ke SI'. Management, I n c. G u rl ey-Leep Automot i ve Man agement Corporation QLietd C i ties A utomot i ve Gro 1p, L.L.C.
dbu Lujack' Northpark A 1to P l aztt L.L. C . LLC Leep DMPR Man 1gernent,
A u tomoti ve Management,
TOY
HON Mam1gernent, L . L . C .
INDIANA PLATFOR M ENTIT I ES :
Gurley-Leep Buick OMC Truck, Inc.
*THE
FOLLOWING
TAXES
TH R O U G H
CORJ>OR/\TI ON :
/\RE
D I S R EGAR DED ENTITJES, W H T CH R EPORT
GURLEY-LEEP
A U TOMOTIVE
M A N A GEMENT
* U n i vers i ty Park Chry s ler- P l ym outh, L . L. C . (Gurl ey-Leep
G u rley Leep K i a *Gm lcy-Lccp O l dsmobi l e
lmpnrts, L .L.C.) dbtt
Cad i l lac, I nc .
d b 1 Gurley-Leep Motor Werks
* Gurl cy·-Leep Imports, I n c . L.L.C. "' U . S . 3 1 Imports, L . L . C . d b a Gurl ey Leep N i ssan
* Gurley-Leep A utomotive Sales, L.L.C. d b n Tnyot l o f M erri l l v i l le * G u r l ey- Leep Ford,
N ON - G LA M I N D I A N A D EA L ER8I T I P
Tnc. dba Te<lm Toyorn
Team Chevrolet, l nc.
Pe tcnmn Ponti ac-OMC Truck, I n c .
R ite Way A uto S a les L . L . C .
ENTITIES :
Team ,
0 D ! S R EG A RDED ENT I TY
WH l CH R E PORTS THROUGH CAPITAL AUTOMOTIVE HOLDIN G S , L . L. C : * * Cap i t a l Im ports, L . L . C . d ba Capital H o n d a
ENTITI E S ;
FOLLOWIN G A R E D I S R EGA R DED ENTITI ES, WHIC H R EPORT
TAX E S THRO U G H QUAD C TTIES A UTOM OTI V E G ROUP, L . L. C , :
* "'* Leep A U D , L .I . C . dba A u d i o f Quad C ities
"' * * Leep C HEV, L. L . C . d b a Lujack C hevro l e t
* * " Leep !-I ON, L . L.C. d b a Luj nck H o n d a
* * * Leep H Y U , L . L.C. clba L uj ack H y 1mdni
* * * Leep J A CJ, 1 r C. d ha J agunr of Qm1d C i t ic:;
* * * L eep K l , L.L.C. dbi1 K ia of the Qtmd Cities
* * * Leep LEX, L . L . C . dba Lex.us of Quad C i ties
* * * Leep M A Z. L . L . C . dha L uj ack Mazda
" * * Leep M£R, L . L . C . d ba Lujack Motor wcrks
L U J A C K P L ATFORM
"' * * T H H
.
..
•.
* "' * Leep
* "' * L eep
* * * Leep
"' * * Leep
M I T, L . L . C . dba Luj \CI< M its ubish i
N l S , L . L . C . dba Luj ack N issan
!'OR, L . L . C . dbn Porsche of Quad C i t ies
VW, L . L . C . dba V o l k fiwagen of Quad C i t ies
LEEP I N VESTMENT G RO UP ENTITIES:
Quad C i ties Automotive Group, L.L.C. DMHON, LLC dba Smart Honda US 3 0 ! :TON , L.L.C. dba Team Honda
Leep TQC, LLC dha Smart Toyotu of Qm1d
Cities
DEALERSHIP O WNERSHIP ENTIT I E S : l ridil1na Automotive J n vcstmcnt Group, L . L . C .
Leep I n v estment Group, L . L . C . REAL ESTATE OWNER S H I P ENTITIES :
GLR, L.L.C.
Grape Roa<l L. L.C.
Ireland Road L.L.C.
U . S . 3 1 Properties, L . l. . C .
K .JSR IVE, L . L . C .
N W J N 3 0 IVE, L.I . C .
.
T O Y R E 4 1 , LLC
R E - I N S U RANCE ENTIT I E S :
r:t. M n d i sou C e n t rn l , L. L . C.
F t . M ad ison D M , L . L C .
F t . M <td ison Ei:ist, L . L . C .
Ft . M a d ison South , L . L . C .
Ft .
Madison West,
L.L.C.
OTHER ENTITIES
J2MD, L.L.C.
OWNED :
The Leep Foundation, Inc.
T.31 nrney Stone Pl'opcrties, LLC
H i gh l and Developers, LLC
Ensthum Leep LLC
F i rst R esp()ndcrs of Mich i<tna, I n c .
M O S ! 2, L . L . C .
F i rs t A ntomot i v St!l'V ices
12131114
(1)
NAME AND ADDRESS (CITY AND STA TE/COUNTRY): Kevin M. Sullivan
(a) THE BANK HOLDING COMPANY: Director
Director, Centier Bank
(c) OTHER COMPANIES IN WHICH SERVING AS DIREC TOR,
KSM H olding Company, I nc. (Officer and Director) KSM B usiness Services, I n c . (Officer and Director) Katz , Sapper & M i l ler, LLP (Partner) Bolovan Estates, LLC (Member, Officer) KSM P a rtners on Broadway, LLC (Manager) Sulliva n & Cook, LLP (Partner) (4) NUMBER OF SHARES AND PERCENTA GE OF EA CH CLASS OF
POWER TO VOTE IN:
-
0
-
(b) ALL S UBSIDIARIES OF THE BANK HOLDING COMPANY:
-0-
12131114
(1)
NAME AND ADDRESS (CITY AND S TA TE/COUNTRY): Morris A . S u n kel clo Centier Bank 600 E. 84 1h Avenue Merri l lville, I ndiana 464 1 0 (2) PRINCIPAL OCCUPA TION:
Attorney-at-Law
Director
H a rris Welsh
(4) &
Lukm a n n
NUMBER OF SHARES AND PERCENTA GE OF EA CH CLASS OF
POWER TO VOTE IN:
0. 1 37% 1 52 s h s .
0 . 1 07% (n/o I RA) 1 1 8 shs
-0- s h a res
None FRY-6- 1 . doc
12131114
(1)
NAME AND ADDRESS (CITY AND S TA TE/COUNTRY): John B Willis clo Centier Bank 600 E. 841h Avenue Merri llville, I nd iana 464 1 0 (2) PRINCIPAL OCCUPA TION:
I nsura nce Agent
Director
Director
TRUSTEE, PARTNER OR EXECUTIVE OFFICER:
Mayerstei n Business Company, I nc.
d/b/a M BA H I nsurance (President/C EO)
M BA H Properties, LCC (Managing Partner
M BAH Montecello LLC (President/Manag ing Pa rtner)
(4)
NUMBER OF SHARES AND PERCENTA GE OF EA CH CLASS OF
POWER TO VOTE IN:
(a) THE BANK HOLDING COMPANY: None
(b) ALL SUBSIDIARIES OF THE BANK HOLDING COMPANY: None
(c) O THER COMPANIES, IF 25 PERCENT OR MORE OF ITS OIS
1 . M ayerstei n Burnell Company, I nc.
25%
2 . M BA H Properties , LLC 3 3l,j%
12131114
(1)
NAME AND ADDRESS (CITY AND S TA TE/COUNTRY): Harold L . Wyland
clo Centier Bank
600 E. 841h Avenue
Merri llville, I nd ia n a 464 1 0
Attorney
D i rector
Director - Centier Ban'k
Wyla n d , H umphrey, Wag ner & C levenger, LLP
POWER TO VO TE IN:
1 00 shares common 0 . 090%
=
( r/i/n/o spouse)
None
None
FRY-6 - 1 2 . doc

Annual Report of Holding Companies-FR Y·6

Transcription

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