10-Q

U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

x	QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
	OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED:        September 30, 2015       

OR

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D)
	OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 33-94288

	THE FIRST BANCSHARES, INC.
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)

MISSISSIPPI	64-0862173
(STATE OF INCORPORATION)	(I.R.S. EMPLOYER IDENTIFICATION NO.)

6480 U.S. HIGHWAY 98 WEST
HATTIESBURG, MISSISSIPPI	39402
(ADDRESS OF PRINCIPAL	(ZIP CODE)
EXECUTIVE OFFICES)

(601) 268-8998

(ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE)

NONE

(FORMER NAME, ADDRESS AND FISCAL YEAR, IF CHANGED SINCE LAST REPORT)

INDICATE BY CHECK MARK WHETHER THE ISSUER: (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.

YES  x   NO ¨

INDIATE BY CHECK MARK WHETHER THE REGISTRANT HAS SUBMITTED ELECTRONICALLY AND POSTED ON ITS CORPORATE WEB SITE, IF ANY, EVERY INTERACTIVE DATA FILE REQUIRED TO BE SUBMITTED AND POSTED PURSUANT TO RULE 405 OF REGULATION S-T (§232.405 OF THIS CHAPTER) DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT HE REGISTRANT WAS REQUIRED TO SUBMIT AND POST SUCH FILES).

YES  x   NO ¨

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS A LARGE ACCELERATED FILER, AN ACCELERATED FILER, A NON-ACCELERATED FILER, OR A SMALLER REPORTING COMPANY. SEE THE DEFINITIONS OF “LARGE ACCELERATED FILER,” “ACCELERATED FILER,” “NON-ACCELERATED FILER” AND “SMALLER REPORTING COMPANY” IN RULE 12B-2 OF THE EXCHANGE ACT.

LARGE ACCELERATED FILER	¨	ACCELERATED FILER	¨
NON-ACCELERATED FILER	x	SMALLER REPORTING COMPANY	¨

ON September 30, 2015, 5,403,159 SHARES OF THE ISSUER'S COMMON STOCK, PAR VALUE $1.00 PER SHARE WERE ISSUED AND OUTSTANDING.

TRANSITIONAL DISCLOSURE FORMAT (CHECK ONE):

YES  ¨   NO  x

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS A SHELL COMPANY (AS DEFINED IN RULE 12B-2 OF THE EXCHANGE ACT):

YES  ¨   NO  x

PART I - FINANCIAL INFORMATION

ITEM NO. 1. FINANCIAL STATEMENTS

THE FIRST BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS

($ amounts in thousands)

	(Unaudited)
	September 30,			December 31,
	2015			2014
ASSETS
Cash and due from banks	$	28,547		$	30,333
Interest-bearing deposits with banks		28,852			13,899
Federal funds sold		7,834			386
Total cash and cash equivalents		65,233			44,618
Securities held-to-maturity, at amortized cost		7,233			8,193
Securities available-for-sale, at fair value		239,631			254,746
Other securities		6,249			7,235
Total securities		253,113			270,174
Loans held for sale		1,058			2,103
Loans		746,588			704,531
Allowance for loan losses		(6,734	)		(6,095	)
Loans, net		740,912			700,539
Premises and equipment		33,610			34,810
Interest receivable		3,809			3,659
Cash surrender value of life insurance		14,771			14,463
Goodwill		12,276			12,276
Other real estate owned		4,104			4,655
Other assets		10,021			8,574
TOTAL ASSETS	$	1,137,849		$	1,093,768
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing	$	187,542		$	201,362
Interest-bearing		776,298			691,413
TOTAL DEPOSITS		963,840			892,775
Interest payable		232			316
Borrowed funds		58,986			89,450
Subordinated debentures		10,310			10,310
Other liabilities		2,859			4,701
TOTAL LIABILITIES		1,036,227			997,552
STOCKHOLDERS’ EQUITY:
Preferred stock, no par value, $1,000 per share liquidation, 10,000,000 shares authorized; 17,123 issued and outstanding at September 30, 2015 and December 31, 2014, respectively		17,123			17,123
Common stock, par value $1 per share, 20,000,000 shares authorized and 5,403,159 shares issued at Sept 30, 2015; 10,000,000 shares authorized and 5,342,670 shares issued at December 31, 2014, respectively		5,403			5,343
Additional paid-in capital		44,469			44,421
Retained earnings		33,554			27,975
Accumulated other comprehensive income		1,537			1,818
Treasury stock, at cost, 26,494 shares at
September 30, 2015 and at
December 31, 2014		(464	)		(464	)
TOTAL STOCKHOLDERS’ EQUITY		101,622			96,216
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,137,849		$	1,093,768

See Notes to Consolidated Financial Statements

THE FIRST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME

($ amounts in thousands, except earnings and dividends per share)

	(Unaudited)				(Unaudited)
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
INTEREST INCOME:
Interest and fees on loans	$	8,629	$	8,059	$	25,309	$	22,154
Interest and dividends on securities:
Taxable interest and dividends		1,001		1,094		3,022		2,953
Tax exempt interest		437		529		1,402		1,555
Interest on federal funds sold		13		6		52		47
TOTAL INTEREST INCOME		10,080		9,688		29,785		26,709
INTEREST EXPENSE:
Interest on deposits		646		689		1,936		1,739
Interest on borrowed funds		147		144		467		443
TOTAL INTEREST EXPENSE		793		833		2,403		2,182
NET INTEREST INCOME		9,287		8,855		27,382		24,527
PROVISION FOR LOAN LOSSES		250		631		400		1,266
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		9,037		8,224		26,982		23,261
OTHER INCOME:
Service charges on deposit accounts		1,542		1,280		3,690		3,317
Other service charges and fees		440		741		1,996		2,431
TOTAL OTHER INCOME		1,982		2,021		5,686		5,748
OTHER EXPENSES:
Salaries and employee benefits		4,628		4,554		13,867		12,911
Occupancy and equipment		1,137		1,382		3,383		3,844
Other		2,212		2,135		6,637		5,927
TOTAL OTHER EXPENSES		7,977		8,071		23,887		22,682
INCOME BEFORE INCOME TAXES		3,042		2,174		8,781		6,327
INCOME TAXES		815		641		2,340		1,754
NET INCOME		2,227		1,533		6,441		4,573
PREFERRED STOCK ACCRETION AND DIVIDENDS		86		85		257		277
NET INCOME APPLICABLE TO COMMON STOCKHOLDERS	$	2,141	$	1,448	$	6,184	$	4,296
NET INCOME APPLICABLE TO COMMON STOCKHOLDERS:
BASIC	$	.40	$	0.27	$	1.15	$	0.83
DILUTED		.39		0.27		1.14		0.82
DIVIDENDS PER SHARE – COMMON		.0375		.0375		.1125		0.1125

See Notes to Consolidated Financial Statements

THE FIRST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

($ amounts in thousands)

	(Unaudited)						(Unaudited)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
Net income per consolidated statements of income	$	2,227		$	1,533		$	6,441		$	4,573
Other Comprehensive Income(Loss):
Unrealized holding gains (losses) arising during the period on available-for-sale securities		1,579			574			(431	)		3,467
Unrealized holding gains on loans held for sale		45			18			6			119
Income tax benefit (expense)		(554	)		(205	)		144			(1,223	)
Other Comprehensive Income (Loss)		1,070			387			(281	)		2,363
Comprehensive Income	$	3,297		$	1,920		$	6,160		$	6,936

See Notes to Consolidated Financial Statements

THE FIRST BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)

($ in thousands)
	Common Stock			Preferred Stock		Stock Warrants			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total
Balance, January 1, 2014	$	5,123		$	17,103	$	284		$	41,802		$	22,509		$	(1,249	)	$	(464	)	$	85,108
Net income		-			-		-			-			4,573			-			-			4,573
Other comprehensive income		-			-		-			-			-			2,363			-			2,363
Accretion and dividends on preferred stock		-			20		-			-			(277	)		-			-			(257	)
Dividends on common stock, $0.1125 per share		-			-		-			-			(586	)		-			-			(586	)
Repurchase of restricted stock for payment of taxes		(6	)		-		-			(80	)		-			-			-			(86	)
Restricted stock grant		63			-		-			(63	)		-			-			-			-
Compensation expense		-			-		-			455			-			-			-			455
Issuance of 158,083 common shares for BCB Holding		158			-		-			1,864			-			-			-			2,022
Balance, Sept. 30, 2014	$	5,338		$	17,123	$	284		$	43,978		$	26,219		$	1,114		$	(464	)	$	93,592
Balance, January 1, 2015	$	5,343		$	17,123	$	284		$	44,137		$	27,975		$	1,818		$	(464	)	$	96,216
Net income		-			-		-			-			6,441			-			-			6,441
Other comprehensive income		-			-		-			-			-			(281	)		-			(281	)
Dividends on preferred stock		-			-		-			-			(257	)		-			-			(257	)
Dividends on common stock, $0.1125 per share		-			-		-			-			(605	)		-			-			(605	)
Repurchase of restricted stock for payment of taxes		(6	)		-		-			(86	)		-			-			-			(92	)
Restricted stock grant		69			-		-			(69	)		-			-			-			-
Compensation expense		-			-		-			539			-			-			-			539
Reversal of 2,514 common shares for BCB Holdings		(3	)		-		-			(33	)		-			-			-			(36	)
Repurchase warrants		-			-		(284	)		(19	)		-			-			-			(303	)
Balance, Sept. 30, 2015	$	5,403		$	17,123	$	-		$	44,469		$	33,554		$	1,537		$	(464	)	$	101,622

See Notes to Consolidated Financial Statements

THE FIRST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ Amounts in Thousands)

	(Unaudited)
	Nine Months Ended
	September 30,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME	$	6,441		$	4,573
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion		2,416			1,697
Provision for loan losses		400			1,266
Loss on sale/writedown of ORE		142			299
Gain on sale of securities		-			(241	)
Gain on sale of bank premises		(119	)		(111	)
Restricted stock expense		539			455
Increase in cash value of life insurance		(308	)		(266	)
Federal Home Loan Bank stock dividends		(7	)		(2	)
Changes in:
Interest receivable		(150	)		(359	)
Loans held for sale, net		1,051			30
Interest payable		(84	)		(128	)
Other, net		(2,884	)		1,203
NET CASH PROVIDED BY OPERATING ACTIVITIES		7,437			8,416
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of Securities		-			10,942
Cash received in excess of cash paid for acquisition		-			4,270
Maturities, calls and paydowns of available- for-sale and held-to-maturity securities		35,135			30,485
Purchases of securities available-for-sale and held-to-maturity securities		(20,329	)		(38,460	)
Net redemptions of other securities		993			365
Net increase in loans		(42,179	)		(49,102	)
Purchase of bank owned life insurance		-			(7,500	)
Proceeds from sale of bank premises		949			-
Net increase in premises and equipment		(860	)		(391	)
NET CASH USED IN INVESTING ACTIVITIES		(26,291	)		(49,391	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deposits		71,205			68,539
Net decrease in borrowed funds		(30,464	)		(15,648	)
Dividends paid on common stock		(584	)		(570	)
Dividends paid on preferred stock		(257	)		(237	)
Repurchase of restricted stock for payment of taxes		(92	)		86
Repurchase of shares issued in BCB acquisition		(36	)		-
Repurchase of warrants		(303	)		-
NET CASH PROVIDED BY FINANCING ACTIVITIES		39,469			52,170
NET INCREASE IN CASH		20,615			11,195
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		44,618			39,252
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	65,233		$	50,447
SUPPLEMENTAL DISCLOSURES:
CASH PAYMENTS FOR INTEREST		2,627			2,601
CASH PAYMENTS FOR INCOME TAXES		3,675			275
LOANS TRANSFERRED TO OTHER REAL ESTATE		506			1,972
ISSUANCE OF RESTRICTED STOCK GRANTS		2			63

See Notes to Consolidated Financial Statements

THE FIRST BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE A — BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements and with the instructions to Form 10-Q of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2015, are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company's Form 10-K for the year ended December 31, 2014.

NOTE B — SUMMARY OF ORGANIZATION

The First Bancshares, Inc., Hattiesburg, Mississippi (the "Company"), was incorporated June 23, 1995, under the laws of the State of Mississippi for the purpose of operating as a bank holding company. The Company’s primary asset is its interest in its wholly-owned subsidiary, The First, A National Banking Association (the “Bank”).

At September 30, 2015, the Company had approximately $1.1 billion in assets, $740.9 million in net loans, $963.8 million in deposits, and $101.6 million in stockholders' equity. For the nine months ended September 30, 2015, the Company reported net income of $6.4 million ($6.2 million applicable to common stockholders).

In the first, second and third quarters of 2015, the Company declared and paid a dividend of $.0375 per common share.

NOTE C – BUSINESS COMBINATION

BCB Holding Company, Inc.

On March 3, 2014, the Company entered into an Agreement and Plan of Merger (the “Agreement”) with BCB Holding Company, Inc., an Alabama corporation (“BCB”) and parent of Bay Bank, Mobile, Alabama. The Agreement provided that, upon the terms and subject to the conditions set forth in the Agreement, BCB will merge with and into the Company (the “Merger”) and Bay Bank will merge with and into The First, A National Banking Association (“Bank Merger”). Subject to the terms and conditions of the Agreement, which was approved by the Boards of Directors of the Company and BCB, each outstanding share of BCB common stock, other than shares held by the Company or BCB, or, shares with respect to which the holders thereof have perfected dissenters’ rights received (i) for the BCB common stock that was outstanding prior to August 1, 2013, $3.60 per share and one non-transferable contingent value right (“CVR”) of the CVR Consideration, and (ii) for the BCB common stock that was issued on August 1, 2013, $2.25 per share in cash. Each CVR is eligible to receive a cash payment equal to up to $0.40, with the exact amount based on the resolution of certain identified BCB loans over a three-year period following the closing of the transaction. Payout of the CVR will be overseen by a special committee of the Company’s Board of Directors. The total consideration to be paid in connection with the acquisition will range between approximately $6.2 million and $6.6 million depending upon the payout of the CVR. An estimated liability of $174,000 has been accrued for the CVR and a payment of $8 thousand dollars was made during the second quarter of 2015, leaving an accrual of $166,000.

As of the closing on July 1, 2014, the Company and BCB entered into an agreement and plan of merger pursuant to which BCB’s wholly-owned subsidiary, Bay Bank, was merged with and into the Company’s wholly-owned subsidiary, the Bank.

In connection with the acquisition, the Company recorded $1.7 million of goodwill and $.2 million of core deposit intangible. The core deposit intangible will be expensed over 10 years.

The Company acquired the $40.1 million loan portfolio at a fair value discount of $1.7 million. The discount represents expected credit losses, adjusted to market interest rates and liquidity adjustments.

The amounts of the acquired identifiable assets and liabilities as of the acquisition date were as follows(dollars in thousands):

Purchase price:
Cash and fair value of common stock	$	6,300
Total purchase price		6,300
Identifiable assets:
Cash and due from banks		8,307
Investments		23,423
Loans and leases		38,393
Other Real Estate		571
Core deposit intangible		225
Personal and real property		3,670
Deferred tax asset		2,502
Other assets		305
Total assets		77,396
Liabilities and equity:
Deposits		59,321
Borrowed funds		13,104
Other liabilities		326
Total liabilities		72,751
Net assets acquired		4,645
Goodwill resulting from acquisition	$	1,655

The outstanding principal balance and the carrying amount of these loans included in the consolidated balance sheet at September 30, 2015, are as follows: (dollars in thousands):

Outstanding principal balance	$	28,841
Carrying amount		27,012

NOTE D – PREFERRED STOCK AND WARRANT

Pursuant to the terms of the letter agreement between the Company and the United States Department of the Treasury (“Treasury”), the Company issued 17,123 CDCI Preferred Shares.

The Letter Agreement contains limitations on the payment of dividends on the common stock to no more than 100% of the aggregate per share dividend and distributions for the immediate prior fiscal year (dividends of $0.15 per share were declared and paid in 2011-2014) and on the Company’s ability to repurchase its common stock in the event of a non-payment of our dividend, and continues to subject the Company to certain of the executive compensation limitations included in the Emergency Economic Stabilization Act of 2008 (EESA), as previously disclosed by the Company. The CDCI Preferred Shares entitle the holder to an annual dividend of 2% for 8 years of the liquidation value of the shares, payable quarterly in arrears.

Pursuant to the terms of the letter agreement between the Company and the United States Department of the Treasury, the Company redeemed the warrant to purchase up to 54,705 shares of the Company’s common stock. In connection with this redemption, on May 13, 2015, the Company paid Treasury an aggregate redemption price of $302,410.

NOTE E — EARNINGS APPLICABLE TO COMMON STOCKHOLDERS

Basic per share data is calculated based on the weighted-average number of common shares outstanding during the reporting period. Diluted per share data includes any dilution from potential common stock outstanding, such as stock options.

	For the Three Months Ended
	September 30, 2015
	Net Income		Shares		Per
	(Numerator)		(Denominator)		Share Data
Basic per share	$	2,141,000		5,374,790	$	0.40
Effect of dilutive shares:
Restricted stock grants				67,190
Diluted per share	$	2,141,000		5,441,980	$	0.39

	For the Nine Months Ended
	September 30, 2015
	Net Income		Shares		Per
	(Numerator)		(Denominator)		Share Data
Basic per share	$	6,184,000		5,369,260	$	1.15
Effect of dilutive shares:
Restricted stock grants				67,190
Diluted per share	$	6,184,000		5,436,450	$	1.14

	For the Three Months Ended
	September 30, 2014
	Net Income		Shares		Per
	(Numerator)		(Denominator)		Share Data
Basic per share	$	1,448,000		5,311,876	$	.27
Effect of dilutive shares:
Restricted stock grants				37,810
Diluted per share	$	1,448,000		5,349,686	$	.27

	For the Nine Months Ended
	September 30, 2014
	Net Income		Shares		Per
	(Numerator)		(Denominator)		Share Data
Basic per share	$	4,296,000		5,198,776	$	.83
Effect of dilutive shares:
Restricted stock grants				37,810
Diluted per share	$	4,296,000		5,236,586	$	.82

The Company granted 67,077 shares of restricted stock in the first quarter of 2015, -0- shares during the second and 2,250 shares during the third quarter of 2015.

NOTE F — FAIR VALUE OF ASSETS AND LIABILITIES

The Company groups its financial assets measured at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:

Level 1:	Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.
Level 2:	Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets or liabilities which use observable inputs other than Level 1 prices, such as quoted 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 for substantially the full term of the assets and liabilities.
Level 3:	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the accompanying balance sheets.

Available-for-Sale Securities

The fair value of available-for-sale securities is determined by various valuation methodologies. Where quoted market prices are available in an active market, securities are classified within Level 1. If quoted market prices are not available, then fair values are estimated by using pricing models or quoted prices of securities with similar characteristics. Level 2 securities include U.S. Treasury securities, obligations of U.S. government corporations and agencies, obligations of states and political subdivisions, mortgage-backed securities and collateralized mortgage obligations. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

The following table presents the Company’s assets that are measured at fair value on a recurring basis and the level within the hierarchy in which the fair value measurements fell as of September 30, 2015 and December 31, 2014 (in thousands):

September 30, 2015 

(Dollars in thousands)			Fair Value Measurements Using
			Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Obligations of U. S. Government Agencies	$	19,731	$	-	$	19,731	$	-
Municipal securities		94,350		-		94,350		-
Mortgage-backed securities		99,384		-		99,384		-
Corporate obligations		25,201		-		22,554		2,647
Other		965		965		-		-
Total	$	239,631	$	965	$	236,019	$	2,647

December 31, 2014 

(Dollars in thousands)			Fair Value Measurements Using
			Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Obligations of U. S. Government Agencies	$	27,372	$	-	$	27,372	$	-
Municipal securities		104,582		-		104,582		-
Mortgage-backed securities		93,036		-		93,036		-
Corporate obligations		28,784		-		25,983		2,801
Other		972		972		-		-
Total	$	254,746	$	972	$	250,973	$	2,801

The following is a reconciliation of activity for assets measured at fair value based on significant unobservable (non-market) information.

(Dollars in thousands)	Bank-Issued Trust Preferred Securities
	2015			2014
Balance, January 1	$	2,801		$	2,798
Transfers into Level 3		-			-
Transfers out of Level 3		-			-
Other-than-temporary impairment loss included in earnings (loss)		-			-
Unrealized gain (loss) included in comprehensive income		(154	)		3
Balance at September 30, 2015 and December 31, 2014	$	2,647		$	2,801

The following table presents quantitative information about recurring Level 3 fair value measurements (in thousands):

Trust Preferred Securities	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range of Inputs
September 30, 2015		2,647	Discounted cash flow	Probability of default	.88% - 2.58%
December 31, 2014		2,801	Discounted cash flow	Probability of default	.79% - 2.49%

Following is a description of the valuation methodologies used for assets measured at fair value on a non-recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

Impaired Loans

Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. Allowable methods for estimating fair value include using the fair value of the collateral for collateral dependent loans or, where a loan is determined not to be collateral dependent, using the discounted cash flow method.

If the impaired loan is identified as collateral dependent, then the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. If the impaired loan is determined not to be collateral dependent, then the discounted cash flow method is used. This method requires the impaired loan to be recorded at the present value of expected future cash flows discounted at the loan’s effective interest rate. The effective interest rate of a loan is the contractual interest rate adjusted for any net deferred loan fees or costs, or premium or discount existing at origination or acquisition of the loan. Impaired loans are classified within Level 2 of the fair value hierarchy.

Other Real Estate Owned

Other real estate owned acquired through loan foreclosure is initially recorded at fair value less estimated costs to sell, establishing a new cost basis. The adjustment at the time of foreclosure is recorded through the allowance for loan losses. Due to the subjective nature of establishing the fair value, the actual fair value of the other real estate owned or foreclosed asset could differ from the original estimate. If it is determined the fair value declines subsequent to foreclosure, a valuation allowance is recorded through non-interest expense. Operating costs associated with the assets are also recorded as non-interest expense. Gains and losses on the disposition of other real estate owned and foreclosed assets are netted and posted to other non-interest expense. Other real estate owned measured at fair value on a non-recurring basis at September 30, 2015, amounted to $4.1 million. Other real estate owned is classified within Level 2 of the fair value hierarchy.

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fell at September 30, 2015 and December 31, 2014.

($ in thousands)

September 30, 2015

			Fair Value Measurements Using
			Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	10,832	$	-	$	10,832	$	-
Other real estate owned		4,104		-		4,104		-

December 31, 2014

			Fair Value Measurements Using
			Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	9,560	$	-	$	9,560	$	-
Other real estate owned		4,655		-		4,655		-

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value:

Cash and Cash Equivalents – For such short-term instruments, the carrying amount is a reasonable estimate of fair value.

Investment in securities available-for-sale and held-to-maturity – The fair value measurement for securities available-for-sale was discussed earlier. The same measurement approach was used for securities held-to-maturity.

Loans – The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Bank-Owned Life Insurance– The fair value of bank-owned life insurance approximates the carrying amount, because upon liquidation of these investments, the Company would receive the cash surrender value which equals the carrying amount.

Deposits – The fair values of demand deposits are, as required by ASC Topic 825, equal to the carrying value of such deposits. Demand deposits include noninterest-bearing demand deposits, savings accounts, NOW accounts, and money market demand accounts. The fair value of variable rate term deposits, those repricing within six months or less, approximates the carrying value of these deposits. Discounted cash flows have been used to value fixed rate term deposits and variable rate term deposits repricing after six months. The discount rate used is based on interest rates currently being offered on comparable deposits as to amount and term.

Short-Term Borrowings – The carrying value of any federal funds purchased and other short-term borrowings approximates their fair values.

FHLB and Other Borrowings – The fair value of the fixed rate borrowings are estimated using discounted cash flows, based on current incremental borrowing rates for similar types of borrowing arrangements. The carrying amount of any variable rate borrowing approximates its fair value.

Subordinated Debentures – The subordinated debentures bear interest at a variable rate and the carrying value approximates the fair value.

Off-Balance Sheet Instruments – Fair values of off-balance sheet financial instruments are based on fees charged to enter into similar agreements. However, commitments to extend credit do not represent a significant value until such commitments are funded or closed. Management has determined that these instruments do not have a distinguishable fair value and no fair value has been assigned.

As of September 30, 2015 ($ in thousands)					Fair Value Measurements
	Carrying Amount		Estimated Fair Value		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Instruments:
Assets:
Cash and cash equivalents	$	65,233	$	65,233	$	65,233	$	-	$	-
Securities available-for- sale		239,631		239,631		965		236,019		2,647
Securities held- to-maturity		7,233		8,651		-		8,651		-
Other securities		6,249		6,249		-		6,249		-
Loans, net		740,912		758,614		-		-		758,614
Bank-owned life insurance		14,771		14,771		-		14,771		-
Liabilities:
Noninterest- bearing deposits	$	187,542	$	187,542	$	-	$	187,542	$	-
Interest-bearing deposits		776,298		775,760		-		775,760		-
Subordinated debentures		10,310		10,310		-		-		10,310
FHLB and other borrowings		58,986		58,986		-		58,986		-

As of December 31, 2014 ($ in thousands)					Fair Value Measurements
	Carrying Amount		Estimated Fair Value		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Instruments:
Assets:
Cash and cash equivalents	$	44,618	$	44,618	$	44,618	$	-	$	-
Securities available-for- sale		254,746		254,746		972		250,973		2,801
Securities held- to-maturity		8,193		9,994		-		9,994		-
Other securities		7,235		7,235		-		7,235		-
Loans, net		700,539		715,849		-		-		715,849
Bank-owned life insurance		14,463		14,463		-		14,463		-
Liabilities:
Noninterest- bearing deposits	$	201,362	$	201,362	$	-	$	201,362	$	-
Interest-bearing deposits		691,413		691,036		-		691,036		-
Subordinated debentures		10,310		10,310		-		-		10,310
FHLB and other borrowings		89,450		89,450		-		89,450		-

NOTE G — LOANS

Loans typically provide higher yields than the other types of earning assets, and, thus, one of the Company's goals is for loans to be the largest category of the Company's earning assets. For the quarter ending September 30, 2015 and December 31, 2014, average loans accounted for 72.8% and 69.9% of average earning assets, respectively. The Company controls and mitigates the inherent credit and liquidity risks through the composition of its loan portfolio.

The following table shows the composition of the loan portfolio by category:

Composition of Loan Portfolio
	September 30, 2015   December 31, 2014
	Amount			Percent of Total			Amount			Percent of Total
	(Dollars in thousands)
Mortgage loans held for sale	$	1,058			0.1	%	$	2,103			0.3	%
Commercial, financial and agricultural		123,872			16.6			106,109			15.0
Real Estate:
Mortgage-commercial		251,631			33.7			238,602			33.8
Mortgage-residential		265,762			35.5			256,406			36.3
Construction		85,769			11.5			84,935			12.0
Lease financing receivable		2,303			.3			-			-
Consumer and other		17,251			2.3			18,479			2.6
Total loans		747,646			100	%		706,634			100	%
Allowance for loan losses		(6,734	)					(6,095	)
Net loans	$	740,912					$	700,539

In the context of this discussion, a "real estate mortgage loan" is defined as any loan, other than a loan for construction purposes, secured by real estate, regardless of the purpose of the loan. The Company follows the common practice of financial institutions in the Company’s market area of obtaining a security interest in real estate whenever possible, in addition to any other available collateral. This collateral is taken to reinforce the likelihood of the ultimate repayment of the loan and tends to increase the magnitude of the real estate loan portfolio component. Generally, the Company limits its loan-to-value ratio to 80%. Management attempts to maintain a conservative philosophy regarding its underwriting guidelines and believes it will reduce the risk elements of its loan portfolio through strategies that diversify the lending mix.

Loans held for sale consist of mortgage loans originated by the Bank and sold into the secondary market. Commitments from investors to purchase the loans are obtained upon origination.

Activity in the allowance for loan losses for the period was as follows:

(In thousands)

	Three Months			Nine Months
	Ended			Ended
	Sept. 30, 2015			Sept. 30, 2015
Balance at beginning of period	$	6,419		$	6,095
Loans charged-off:
Real Estate		(58	)		(407	)
Installment and Other		(24	)		(87	)
Commercial, Financial and Agriculture		(183	)		(183	)
Total		(265	)		(677	)
Recoveries on loans previously charged-off:
Real Estate		296			849
Installment and Other		32			56
Commercial, Financial and Agriculture		2			11
Total		330			916
Net recoveries		65			239
Provision for Loan Losses		250			400
Balance at end of period	$	6,734		$	6,734

The following tables represent how the allowance for loan losses is allocated to a particular loan type, as well as the percentage of the category to total loans at September 30, 2015 and December 31, 2014.

Allocation of the Allowance for Loan Losses
	September 30, 2015
	(Dollars in thousands)
	Amount		% of loans in each category to total loans
Commercial Non Real Estate	$	765		17.1	%
Commercial Real Estate		2,607		57.7
Consumer Real Estate		1,414		22.8
Consumer		137		2.4
Unallocated		1,811		-
Total	$	6,734		100	%

	December 31, 2014
	(Dollars in thousands)
	Amount		% of loans in each category to total loans
Commercial Non Real Estate	$	713		15.3	%
Commercial Real Estate		3,355		57.9
Consumer Real Estate		1,852		24.2
Consumer		175		2.6
Unallocated		-		-
Total	$	6,095		100	%

The following table represents the Company’s impaired loans at September 30, 2015, and December 31, 2014.

	Sept. 30,		December 31,
	2015		2014
	(In thousands)
Impaired Loans:
Impaired loans without a valuation allowance	$	6,322	$	4,702
Impaired loans with a valuation allowance		4,510		4,858
Total impaired loans	$	10,832	$	9,560
Allowance for loan losses on impaired loans at period end		1,028		968
Total nonaccrual loans		7,949		6,056
Past due 90 days or more and still accruing		6		669
Average investment in impaired loans		9,534		7,077

The following table is a summary of interest recognized and cash-basis interest earned on impaired loans:

	Three Months Ended Sept. 30, 2015		Nine Months Ended Sept. 30, 2015
Interest income recognized during impairment		-		-
Cash-basis interest income recognized		43		166

The gross interest income that would have been recorded in the period that ended if the nonaccrual loans had been current in accordance with their original terms and had been outstanding throughout the period or since origination, if held for part of the three months and nine months ended September 30, 2015 was $123,000 and $322,000, respectively, and $1,000 and $98,000 for the three months and nine months ended September 30, 2014. The Company had no loan commitments to borrowers in non-accrual status at September 30, 2015 and December 31, 2014.

The following tables provide the ending balances in the Company's loans (excluding mortgage loans held for sale) and allowance for loan losses, broken down by portfolio segment as of September 30, 2015 and December 31, 2014. The tables also provide additional detail as to the amount of our loans and allowance that correspond to individual versus collective impairment evaluation. The impairment evaluation corresponds to the Company's systematic methodology for estimating its Allowance for Loan Losses.

September 30, 2015

					Commercial,
			Installment		Financial
	Real Estate		and Other		and Agriculture		Total
	(In thousands)
Loans
Individually evaluated	$	10,522	$	42	$	268	$	10,832
Collectively evaluated		590,844		18,100		126,812		735,756
Total	$	601,366	$	18,142	$	127,080	$	746,588
Allowance for Loan Losses
Individually evaluated	$	980	$	26	$	22	$	1,028
Collectively evaluated		3,292		1,672		742		5,706
Total	$	4,272	$	1,698	$	764	$	6,734

December 31, 2014

					Commercial,
			Installment		Financial
	Real Estate		and Other		and Agriculture		Total
	(In thousands)
Loans
Individually evaluated	$	9,282	$	38	$	240	$	9,560
Collectively evaluated		568,952		18,610		107,409		694,971
Total	$	578,234	$	18,648	$	107,649	$	704,531
Allowance for Loan Losses
Individually evaluated	$	922	$	29	$	17	$	968
Collectively evaluated		4,285		146		696		5,127
Total	$	5,207	$	175	$	713	$	6,095

The following tables provide additional detail of impaired loans broken out according to class as of September 30, 2015 and December 31, 2014. The recorded investment included in the following tables represent customer balances net of any partial charge-offs recognized on the loans, net of any deferred fees and costs. As nearly all of our impaired loans at September 30, 2015, are on nonaccrual status, recorded investment excludes any insignificant amount of accrued interest receivable on loans 90-days or more past due and still accruing. The unpaid balance represents the recorded balance prior to any partial charge-offs.

September 30, 2015
							Average		Interest
							Recorded		Income
	Recorded		Unpaid		Related		Investment		Recognized
	Investment		Balance		Allowance		YTD		YTD
	(In thousands)
Impaired loans with no related allowance:
Commercial installment	$	-	$	-	$	-	$	3	$	-
Commercial real estate		6,077		6,116		-		4,927		43
Consumer real estate		238		238		-		200		-
Consumer installment		7		7		-		8		-
Total	$	6,322	$	6,361	$	-	$	5,138	$	43
Impaired loans with a related allowance:
Commercial installment	$	268	$	268	$	22	$	254	$	10
Commercial real estate		3,232		3,232		479		2,882		102
Consumer real estate		975		975		501		1,230		11
Consumer installment		35		35		26		30		-
Total	$	4,510	$	4,510	$	1,028	$	4,396	$	123
Total Impaired Loans:
Commercial installment	$	268	$	268	$	22	$	257	$	10
Commercial real estate		9,309		9,348		479		7,809		145
Consumer real estate		1,213		1,213		501		1,430		11
Consumer installment		42		42		26		38		-
Total Impaired Loans	$	10,832	$	10,871	$	1,028	$	9,534	$	166

On January 1, 2015, the Company adopted Accounting Standards Update (ASU) 2014-4, Receivables – Troubled Debt Restructuring by Creditors. As of September 30, 2015, the Company had $1.5 million of foreclosed residential real estate property obtained by physical possession and $0.1 million of consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process according to local jurisdictions.

December 31, 2014
							Average		Interest
							Recorded		Income
	Recorded		Unpaid		Related		Investment		Recognized
	Investment		Balance		Allowance		YTD		YTD
	(In thousands)
Impaired loans with no related allowance:
Commercial installment	$	-	$	-	$	-	$	50	$	-
Commercial real estate		4,665		4,665		-		2,654		142
Consumer real estate		27		27		-		179		-
Consumer installment		10		10		-		11		-
Total	$	4,702	$	4,702	$	-	$	2,894	$	142
Impaired loans with a related allowance:
Commercial installment	$	240	$	240	$	18	$	189	$	20
Commercial real estate		2,558		2,558		315		2,415		59
Consumer real estate		2,032		2,032		607		1,546		33
Consumer installment		28		28		28		33		2
Total	$	4,858	$	4,858	$	968	$	4,183	$	114
Total Impaired Loans:
Commercial installment	$	240	$	240	$	18	$	239	$	20
Commercial real estate		7,223		7,223		315		5,069		201
Consumer real estate		2,059		2,059		607		1,725		33
Consumer installment		38		38		28		44		2
Total Impaired Loans	$	9,560	$	9,560	$	968	$	7,077	$	256

Loans acquired with deteriorated credit quality are those purchased in the BCB Holding Company, Inc. acquisition (See Note C -Business Combination for further information). These loans were recorded at estimated fair value at the acquisition date with no carryover of the related allowance for loan losses. The acquired loans were segregated as of the acquisition date between those considered to be performing (acquired non-impaired loans) and those with evidence of credit deterioration (acquired impaired loans). Acquired loans are considered impaired if there is evidence of credit deterioration and if it is probable, at acquisition, all contractually required payments will not be collected.

The following table presents information regarding the contractually required payments receivable, cash flows expected to be collected and the estimated fair value of loans acquired in the BCB acquisition as of July 1, 2014, the closing date of the transaction:

	December 31, 2014
	(In thousands)
	Commercial, financial and agricultural		Mortgage- Commercial		Mortgage- Residential		Commercial and other		Total
Contractually required payments	$	1,519	$	29,648	$	7,933	$	976	$	40,076
Cash flows expected to be collected		1,570		37,869		9,697		1,032		50,168
Fair value of loans acquired		1,513		28,875		7,048		957		38,393

Total outstanding acquired impaired loans were $3,133,976 as of September 30, 2015 and $3,480,190 as of December 31, 2014. The outstanding balance of these loans is the undiscounted sum of all amounts, including amounts deemed principal, interest, fees, penalties, and other under the loans, owed at the reporting date, whether or not currently due and whether or not any such amounts have been charged off.

Changes in the carrying amount and accretable yield for acquired impaired loans were as follows at September 30, 2015 and December 31, 2014: (in thousands)

	September 30, 2015						December 31, 2014
	Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans
Balance at beginning of period	$	1,417		$	2,063		$	-		$	-
Additions due to BCB acquisition on July 1, 2014		-			-			1,603			2,325
Accretion		(141	)		141			(186	)		186
Payments received, net		-			(346	)		-			(448	)
Balance at end of period	$	1,276		$	1,858		$	1,417		$	2,063

The following tables provide detail of troubled debt restructurings (TDRs) at September 30, 2015.

For the Three Months Ending September 30, 2015

			Outstanding
	Outstanding		Recorded
	Recorded		Investment				Interest
	Investment		Post-		Number of		Income
	Pre-Modification		Modification		Loans		Recognized
Commercial installment	$	-	$	-		-	$	-
Commercial real estate		269		268		1		3
Consumer real estate		-		-		-		-
Consumer installment		-		-		-		-
Total	$	269	$	268		1	$	3

For the Nine Months Ending September 30, 2015

			Outstanding
	Outstanding		Recorded
	Recorded		Investment				Interest
	Investment		Post-		Number of		Income
	Pre-Modification		Modification		Loans		Recognized
Commercial installment	$	-	$	-		-	$	-
Commercial real estate		269		267		1		3
Consumer real estate		-		-		-		-
Consumer installment		-		-		-		-
Total	$	269	$	267		1	$	3

There were no TDRs that were modified during the three month period ending September 30, 2015, that had subsequently violated the terms of the modification.

The balance of troubled debt restructurings (TDRs)was $6.8 million at September 30, 2015 and December 31, 2014, respectively, calculated for regulatory reporting purposes. As of September 30, 2015, the company had no additional amount committed on any loan classified as troubled debt restructuring.

The following tables set forth the amounts and past due status for the Bank TDRs at September 30, 2015 and December 31, 2014:

(in thousands)

	September 30, 2015
	Current Loans		Past Due 30-89		Past Due 90 days and still accruing		Non- accrual		Total
Commercial installment	$	214	$	-	$	-	$	52	$	266
Commercial real estate		1,931		-		-		2,641		4,572
Consumer real estate		728		-		-		1,241		1,969
Consumer installment		9		-		-		31		40
Total	$	2,882	$	-	$	-	$	3,965	$	6,847
Allowance for loan losses	$	112	$	-	$	-	$	177	$	289

(in thousands)

	December 31, 2014
	Current Loans		Past Due 30-89		Past Due 90 days and still accruing		Non- accrual		Total
Commercial installment	$	233	$	-	$	-	$	-	$	233
Commercial real estate		1,685		-		-		2,729		4,414
Consumer real estate		952		622		-		449		2,023
Consumer installment		10		-		-		103		113
Total	$	2,880	$	622	$	-	$	3,281	$	6,783
Allowance for loan
losses	$	120	$	11	$	103	$	-	$	234

The following tables summarize by class our loans classified as past due in excess of 30 days or more in addition to those loans classified as non-accrual:

	September 30, 2015
	(In thousands)
	Past Due 30 to 89 Days		Past Due 90 Days or More and Still Accruing		Non- Accrual		Total Past Due and Non- Accrual		Total Loans
Real Estate-construction	$	424	$	-	$	3,244	$	3,668	$	85,769
Real Estate-mortgage		1,009		6		2,141		3,156		265,762
Real Estate-non farm non residential		674		-		2,425		3,099		251,631
Commercial		305		-		106		411		123,872
Lease Financing Rec.		-		-		-		-		2,303
Consumer		93		-		33		126		17,251
Total	$	2,505	$	6	$	7,949	$	10,460	$	746,588

	December 31, 2014
	(In thousands)
	Past Due 30 to 89 Days		Past Due 90 Days or More and Still Accruing		Non- Accrual		Total Past Due and Non- Accrual		Total Loans
Real Estate-construction	$	428	$	-	$	2,747	$	3,175	$	84,935
Real Estate-mortgage		3,208		208		2,164		5,580		256,406
Real Estate-non farm non residential		3,408		461		1,102		4,971		238,601
Commercial		29		-		5		34		106,109
Consumer		90		-		38		128		18,480
Total	$	7,163	$	669	$	6,056	$	13,888	$	704,531

The Company 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. The Company uses the following definitions for risk ratings, which are consistent with the definitions used in supervisory guidance:

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 Company’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 obligor 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 full, 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.

As of September 30, 2015 and December 31, 2014, and based on the most recent analysis performed, the risk categories of loans by class of loans (excluding mortgage loans held for sale) were as follows:

($ in thousands)

September 30, 2015

							Commercial,
	Real Estate Commercial		Real Estate Mortgage		Installment and Other		Financial and Agriculture		Total
Pass	$	409,569	$	168,836	$	18,060	$	126,741	$	723,206
Special Mention		4,313		156		-		171		4,640
Substandard		17,260		1,395		82		193		18,930
Doubtful		-		330		-		-		330
Subtotal		431,142		170,717		18,142		127,105		747,106
Less:
Unearned discount		419		74		-		25		518
Loans, net of unearned discount	$	430,723	$	170,643	$	18,142	$	127,080	$	746,588

December 31, 2014

							Commercial,
	Real Estate Commercial		Real Estate Mortgage		Installment and Other		Financial and Agriculture		Total
Pass	$	388,568	$	167,827	$	18,558	$	107,126	$	682,079
Special Mention		4,756		191		-		498		5,445
Substandard		14,727		2,567		90		63		17,447
Doubtful		-		-		-		-		-
Subtotal		408,051		170,585		18,648		107,687		704,971
Less:
Unearned discount		320		82		-		38		440
Loans, net of  unearned discount	$	407,731	$	170,503	$	18,648	$	107,649	$	704,531

NOTE H — SECURITIES

The following disclosure of the estimated fair value of financial instruments is made in accordance with authoritative guidance. The estimated fair value amounts have been determined using available market information and appropriate valuation methodologies. However, considerable judgment is necessarily required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

A summary of the amortized cost and estimated fair value of available-for-sale securities and held-to-maturity securities at September 30, 2015, follows:

($ in thousands)

	September 30, 2015
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
Available-for-sale securities:
Obligations of U.S. Government Agencies	$	19,518	$	213	$	-	$	19,731
Tax-exempt and taxable obligations of states and municipal subdivisions		92,465		2,103		218		94,350
Mortgage-backed securities		97,771		1,672		59		99,384
Corporate obligations		26,311		136		1,246		25,201
Other		1,255		-		290		965
Total	$	237,320	$	4,124	$	1,813	$	239,631
Held-to-maturity securities:
Mortgage-backed securities	$	1,233	$	33	$	-	$	1,266
Taxable obligations of states and municipal subdivisions		6,000		1,385		-		7,385
Total	$	7,233	$	1,418	$	-	$	8,651

NOTE I — ALLOWANCE FOR LOAN LOSSES

The Company has developed policies and procedures for evaluating the overall quality of its credit portfolio and the timely identification of potential problem loans. Management’s judgment as to the adequacy of the allowance is based upon a number of assumptions which it believes to be reasonable, but which may not prove to be accurate, particularly given the Company’s growth and the economy. Thus, there can be no assurance that charge-offs in future periods will not exceed the allowance for loan losses or that additional increases in the loan loss allowance will not be required.

The Company’s allowance consists of two parts. The first part is determined in accordance with authoritative guidance regarding contingencies. The Company’s determination of this part of the allowance is based upon quantitative and qualitative factors. A loan loss history based upon the most recent 72 months loss history is utilized in determining the appropriate allowance. Historical loss factors are determined by risk rated loans by loan type. These historical loss factors are applied to the loans by loan type to determine an indicated allowance. The loss factors of peer groups are considered in the determination of the allowance and are used to assist in the establishment of a long-term loss history for areas in which this data is unavailable and incorporated into the qualitative factors to be considered. The historical loss factors may also be modified based upon other qualitative factors including but not limited to local and national economic conditions, trends of delinquent loans, changes in lending policies and underwriting standards, concentrations, and management’s knowledge of the loan portfolio. These factors require judgment upon the part of management and are based upon state and national economic reports received from various institutions and agencies including the Federal Reserve Bank, United States Bureau of Economic Analysis, Bureau of Labor Statistics, meetings with the Company’s loan officers and loan committee, and data and guidance received or obtained from the Company’s regulatory authorities.

The second part of the allowance is determined in accordance with authoritative guidance regarding loan impairment. Impaired loans are determined based upon a review by internal loan review and senior management.

The sum of the two parts constitutes management’s best estimate of an appropriate allowance for loan losses. When the estimated allowance is determined, it is presented to the Company’s audit committee for review and approval on a quarterly basis.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. 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 reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Impairment is measured on a loan by loan basis, and a specific allowance is assigned to each loan determined to be impaired. Impaired loans not deemed collateral dependent are analyzed according to the ultimate repayment source, whether that is cash flow from the borrower, guarantor or some other source of repayment. Impaired loans are deemed collateral dependent if, in the Company’s opinion, the ultimate source of repayment will be generated from the liquidation of collateral.

The Company discontinues accrual of interest on loans when management believes, after considering economic and business conditions and collection efforts, that a borrower’s financial condition is such that the collection of interest is doubtful. Generally, the Company will place a delinquent loan in nonaccrual status when the loan becomes 90 days or more past due. At the time a loan is placed in nonaccrual status, all interest which has been accrued on the loan but remains unpaid is reversed and deducted from earnings as a reduction of reported interest income. No additional interest is accrued on the loan balance until the collection of both principal and interest becomes reasonably certain.

NOTE J – SUBSEQUENT EVENTS

Subsequent events have been evaluated by management through the date the financial statements were issued. The Company has been notified that it is more likely than not that the Company should expect a recovery on a previously charged-off loan of $941,000 during 2015. During the second quarter, the first installment payment of $481,000 was received. During the third quarter, the second installment payment of $241,000 was received.

NOTE K – RECLASSIFICATION

Certain amounts in the 2014 financial statements have been reclassified for comparative purposes to conform to the current period financial statement presentation.

ITEM NO. 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FINANCIAL CONDITION

The following discussion contains "forward-looking statements" relating to, without limitation, future economic performance, plans and objectives of management for future operations, and projections of revenues and other financial items that are based on the beliefs of the Company's management, as well as assumptions made by and information currently available to the Company's management. The words "expect," "estimate," "anticipate," and "believe," as well as similar expressions, are intended to identify forward-looking statements. The Company's actual results may differ materially from the results discussed in the forward-looking statements, and the Company's operating performance each quarter is subject to various risks and uncertainties that are discussed in detail in the Company's filings with the Securities and Exchange Commission, including the "Risk Factors" section in the Company's most recently filed Form 10-K.

The First represents the primary asset of the Company. The First reported total assets of $1.1 billion at September 30, 2015, compared to $1.1 billion at December 31, 2014, an increase of $44.4 million. Loans increased $41 million, or 5.8%, during the first nine months of 2015. Deposits at September 30, 2015, totaled $964 million compared to $893 million at December 31, 2014. For the nine month period ended September 30, 2015, The First reported net income of $7.1 million compared to $5.1 million for the nine months ended September 30, 2014.

NONPERFORMING ASSETS AND RISK ELEMENTS. Diversification within the loan portfolio is an important means of reducing inherent lending risks. At September 30, 2015, The First had no concentrations of ten percent or more of total loans in any single industry or any geographical area outside its immediate market areas.

At September 30, 2015, The First had loans past due as follows:

	($ In Thousands)
Past due 30 through 89 days	$	2,505
Past due 90 days or more and still accruing		6

The accrual of interest is discontinued on loans which become ninety days past due (principal and/or interest), unless the loans are adequately secured and in the process of collection. Nonaccrual loans totaled $7.9 million at September 30, 2015, an increase of $1.9 million from December 31, 2014. Any other real estate owned is carried at fair value, determined by an appraisal, less estimated costs to sell. Other real estate owned totaled $4.1 million at September 30, 2015. A loan is classified as a restructured loan when the following two conditions are present: First, the borrower is experiencing financial difficulty and second, the creditor grants a concession it would not otherwise consider but for the borrower’s financial difficulties. At September 30, 2015, the Bank had $6.8 million in loans that were modified as troubled debt restructurings, of which $2.9 million were performing as agreed with modified terms.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity is adequate with cash and cash equivalents of $65.2 million as of September 30, 2015. In addition, loans and investment securities repricing or maturing within one year or less exceeded $192 million at September 30, 2015. Approximately $155 million in loan commitments could fund within the next three months and other commitments, primarily standby letters of credit, totaled $1.0 million at September 30, 2015.

There are no known trends or any known commitments or uncertainties that will result in The First’s liquidity increasing or decreasing in a significant way.

Total consolidated equity capital at September 30, 2015, was $101.6 million, or approximately 8.9% of total assets. The Company currently has adequate capital positions to meet the minimum capital requirements for all regulatory agencies. The Company’s capital ratios as of September 30, 2015, were as follows:

Tier 1 leverage	8.73	%
Tier 1 risk-based	11.35	%
Total risk-based	12.15	%
Common equity Tier 1	8.27	%

On June 30, 2006, The Company issued $4,124,000 of floating rate junior subordinated deferrable interest debentures to The First Bancshares Statutory Trust 2 in which the Company owns all of the common equity. The debentures are the sole asset of the Trust. The Trust issued $4,000,000 of Trust Preferred Securities (TPSs) to investors. The Company’s obligations under the debentures and related documents, taken together, constitute a full and unconditional guarantee by the Company of the Trust’s obligations under the preferred securities. The preferred securities are redeemable by the Company at its option. The preferred securities must be redeemed upon maturity of the debentures in 2036. Interest on the preferred securities is the three month London Interbank Offer Rate (LIBOR) plus 1.65% and is payable quarterly. The terms of the subordinated debentures are identical to those of the preferred securities. On July 27, 2007, The Company issued $6,186,000 of floating rate junior subordinated deferrable interest debentures to The First Bancshares Statutory Trust 3 in which the Company owns all of the common equity. The debentures are the sole asset of Trust 3. The Trust issued $6,000,000 of Trust Preferred Securities (TPSs) to investors. The Company’s obligations under the debentures and related documents, taken together, constitute a full and unconditional guarantee by the Company of the Trust’s obligations under the preferred securities. The preferred securities are redeemable by the Company at its option. The preferred securities must be redeemed upon maturity of the debentures in 2037. Interest on the preferred securities is the three month LIBOR plus 1.40% and is payable quarterly. The terms of the subordinated debentures are identical to those of the preferred securities. In accordance with the authoritative guidance, the trusts are not included in the consolidated financial statements.

RESULTS OF OPERATIONS

The Company had a consolidated net income of $2,227,000 for the three months ended September 30, 2015, compared with consolidated net income of $1,533,000 for the same period last year.

Net interest income increased to $9.3 million from $8.9 million for the three months ended September 30, 2015, or an increase of 4.9% as compared to the same period in 2014. Quarterly average earning assets at September 30, 2015, increased $43.1 million, or 4.5% and quarterly average interest-bearing liabilities also increased $46.0 million or 6.0% when compared to September 30, 2014.

Noninterest income for the three months ended September 30, 2015, was $1,982,000 compared to $2,021,000 for the same period in 2014, reflecting a decrease of $39,000 or 1.9%. During the second quarter of 2014, a gain of $0.3 million was realized on the sale of securities which attributed to the decrease in quarterly comparison.

The provision for loan losses was $250,000 for the three months ended September 30, 2015, compared with $631,000 for the same period in 2014. The allowance for loan losses of $6.7 million at September 30, 2015 (approximately .90% of total loans and 1.16% of loans including valuation accounting adjustments on acquired loans) is considered by management to be adequate to cover losses inherent in the loan portfolio. The level of this allowance is dependent upon a number of factors, including the total amount of past due loans, general economic conditions, and management’s assessment of potential losses. This evaluation is inherently subjective as it requires estimates that are susceptible to significant change. Ultimately, losses may vary from current estimates and future additions to the allowance may be necessary.

Thus, there can be no assurance that charge-offs in future periods will not exceed the allowance for loan losses or that additional increases in the loan loss allowance will not be required. Management evaluates the adequacy of the allowance for loan losses quarterly and makes provisions for loan losses based on this evaluation.

Noninterest expense decreased by $.1 million or 1.2% for the three months ended September 30, 2015, when compared with the same period in 2014 which included acquisition charges of $241,000. Exclusive of the acquisition charges, the third quarter 2015 noninterest expenses increased $147,000 or 1.9% as compared to the same quarter in 2014.

RESULTS OF OPERATIONS – YEAR TO DATE

The Company had a consolidated net income of $6,441,000 for the nine months ended September 30, 2015, compared with consolidated net income of $4,573,000 for the same period last year.

Net interest income increased to $27.4 million from $24.5 million for the nine months ended September 30, 2015, or an increase of 11.6% as compared to the same period in 2014. Quarterly average earning assets at September 30, 2015, increased $43.1 million, or 4.5% and quarterly average interest-bearing liabilities also increased $46.0 million or 6.0% when compared to September 30, 2014.

Noninterest income for the nine months ended September 30, 2015, was $5,686,000 compared to $5,748,000 for the same period in 2014, reflecting a slight decrease of $62,000 or 1.1%. During the second quarter of 2014, a gain of $0.3 million was realized on the sale of securities which attributed to the decrease in the comparison with 2015.

The provision for loan losses was $400,000 for the nine months ended September 30, 2015, compared with $1,266,000 for the same period in 2014. The allowance for loan losses of $6.7 million at September 30, 2015 (approximately .90% of total loans and 1.16% of loans including valuation accounting adjustments on acquired loans) is considered by management to be adequate to cover losses inherent in the loan portfolio. The level of this allowance is dependent upon a number of factors, including the total amount of past due loans, general economic conditions, and management’s assessment of potential losses. This evaluation is inherently subjective as it requires estimates that are susceptible to significant change. Ultimately, losses may vary from current estimates and future additions to the allowance may be necessary.

Thus, there can be no assurance that charge-offs in future periods will not exceed the allowance for loan losses or that additional increases in the loan loss allowance will not be required. Management evaluates the adequacy of the allowance for loan losses quarterly and makes provisions for loan losses based on this evaluation.

Noninterest expense increased by $1.2 million or 5.3% for the nine months ended September 30, 2015, when compared with the same period in 2014. A majority of this increase can be attributed to the acquisition of Bay Bank that occurred at the beginning of the third quarter of 2014.

ITEM NO. 3. CONTROLS AND PROCEDURES

As of September 30, 2015, (the “Evaluation Date”), we carried out an evaluation, under the supervision of and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms.

There have been no changes, significant or otherwise, in our internal controls over financial reporting that occurred during the quarter ended September 30, 2015, that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.

ITEM NO. 4. RECENT ACCOUNTING PRONOUNCEMENTS

In February 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-02 “Consolidation (Topic 810) - Amendments to the Consolidation Analysis.” ASU 2015-02 includes amendments that are intended to improve targeted areas of consolidation for legal entities including reducing the number of consolidation models from four to two and simplifying the FASB Accounting Standards Codification. ASU 2015-02 is effective for annual and interim periods within those annual periods, beginning after December 15, 2015. The amendments may be applied retrospectively in previously issued financial statements for one or more years with a cumulative effect adjustment to retained earnings as of the beginning of the first year restated. Early adoption is permitted, including adoption in an interim period. The Company is assessing the impact of ASU 2015-02 on its accounting and disclosures.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 1A. RISK FACTORS

There are no material changes in the Company’s risk factors since December 31, 2014. Please refer to the Annual Report on Form 10-K of The First Bancshares, Inc., filed with the Securities and Exchange Commission on March 31, 2015.

ITEM 2. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

ITEM 3. REMOVED AND RESERVED

ITEM 4. OTHER INFORMATION

Not Applicable

ITEM 5. EXHIBITS

(a) Exhibits

Exhibit No.

2.1 Agreement and Plan of merger, dated as of March 2, 2014, between The First Bancshares, Inc. and BCB Holding Company, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed on 3-7-2014)

2.1 Acquisition Agreement, dated as of January 31, 2013, between The First Bancshares, Inc. and First Baldwin Bancshares, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed on 2-1-13) and First Amendment to Acquisition Agreement, dated as of March 15, 2013, between First Bancshares, Inc. and First Baldwin Bancshares, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed on 3-20-13)

3.1 Articles of Amendment and Certificate of Designation, Preferences and Rights of Series D Nonvoting Convertible Preferred Stock dated as of March 18,2013(incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed on 3-21-13).

3.2 Restated Articles of Incorporation dated as of March 21, 2013 (incorporated by reference to Exhibit 3.2 of the Company’s Form 8-K filed on 3-21-13).

4.1 Certificate of Designation of Series D Nonvoting Convertible Preferred Stock, as filed with the Mississippi Secretary of State on March 20, 2013 (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on March 25, 2013).

10.1 Form of Securities Purchase Agreement between the Company and each of the Purchasers, dated as of March 20, 2013 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on March 25, 2013)

10.2 Form of Registration Rights Agreement between the Company and each of the Purchasers, dated as of March 20, 2013 (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on March 25, 2013)

31.1 Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of principal executive officer pursuant to 18 U. S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification of principal financial officer pursuant to 18 U. S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema

101.CAL XBRL Taxonomy Extension Calculation Linkbase

101.DEF XBRL Taxonomy Extension Definition Linkbase

101.LAB XBRL Taxonomy Extension Label Linkbase

101.PRE XBRL Taxonomy Extension Presentation Linkbase

(b) The Company filed one report on Form 8-K during the quarter ended September 30, 2015

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	THE FIRST BANCSHARES, INC.
	(Registrant)
	/s/ M. RAY (HOPPY) COLE, JR.
November 16, 2015	M. Ray (Hoppy) Cole, Jr.
(Date)	Chief Executive Officer
	/s/ DEEDEE LOWERY
November 16, 2015	DeeDee Lowery, Executive
(Date)	Vice President and Chief
	Financial Officer

EX-31.1

Exhibit 31.1

Certificate pursuant to Rule 13a-14(a) or 15d-14(a) of Securities Exchange Act of 1934 as adopted pursuant to section 302 of Sarbanes-Oxley Act of 2002-Chief Executive Officer

I, M. Ray (Hoppy) Cole, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of The First Bancshares, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	November 16, 2015	/s/ M. Ray (Hoppy) Cole, Jr.
		M. Ray (Hoppy) Cole, Jr.
		Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to The First Bancshares, Inc., and will be retained by The First Bancshares, Inc., and furnished to the Securities and Exchange Commission or its staff upon request.

EX-31.2

Exhibit 31.2

Certificate pursuant to Rule 13a-14(a) or 15d-14(a) of Securities Exchange Act of 1934 as adopted pursuant to section 302 of Sarbanes-Oxley Act of 2002-Principal Accounting and Financial Officer

I, DeeDee Lowery, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The First Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	November 16, 2015	/s/ DeeDee Lowery
		DeeDee Lowery, Executive Vice
		President and Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to The First Bancshares, Inc., and will be retained by The First Bancshares, Inc., and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.1

Exhibit 32.1

Certification pursuant to 18 U.S.C., Section 1350
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q, filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, of The First Bancshares, Inc. (the "Company") for the period ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, M. Ray (Hoppy) Cole, Jr., the Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1) the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ M. Ray (Hoppy) Cole, Jr.
Name:	M. Ray (Hoppy) Cole, Jr.
Title:	Chief Executive Officer
Date:	November 16, 2015

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to The First Bancshares, Inc., and will be retained by The First Bancshares, Inc., and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification pursuant to 18 U.S.C., Section 1350

as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q, filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, of The First Bancshares, Inc. (the "Company") for the period ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, DeeDee Lowery, the Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1) the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ DeeDee Lowery
Name:	DeeDee Lowery
Title:	Executive Vice President and Chief
	Financial Officer
Date:	November 16, 2015

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to The First Bancshares, Inc., and will be retained by The First Bancshares, Inc., and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Activity in Allowance for Loan Losses (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of period	$ 6,419		$ 6,095
Loans charged-off	(265)		(677)
Recoveries on loans previously charged-off:	330		916
Net recoveries	65		239
Provision for Loan Losses	250	$ 631	400	$ 1,266
Balance at end of period	6,734		6,734
Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans charged-off	(58)		(407)
Recoveries on loans previously charged-off:	296		849
Installment and Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans charged-off	(24)		(87)
Recoveries on loans previously charged-off:	32		56
Commercial Financial And Agricultural
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans charged-off	(183)		(183)
Recoveries on loans previously charged-off:	$ 2		$ 11

XML

Modifications of Loans Performing (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due 30-89	$ 2,505	$ 7,163
Past Due 90 days and still accuring	6	669
Non- Accrual	7,949	6,056
Total	746,588	704,531
Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	2,882	2,880
Past Due 30-89	0	622
Past Due 90 days and still accuring	0	0
Non- Accrual	3,965	3,281
Total	6,847	6,783
Allowance for loan losses, Current Loans	112	120
Allowance for loan losses, Past Due 30-89	0	11
Allowance for loan losses, Past Due 90 days and still accruing	0	103
Allowance for loan losses, Non-Accrual	177	0
Allowance for loan losses, Total	289	234
Loans | Commercial installment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	214	233
Past Due 30-89	0	0
Past Due 90 days and still accuring	0	0
Non- Accrual	52	0
Total	266	233
Loans | Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	1,931	1,685
Past Due 30-89	0	0
Past Due 90 days and still accuring	0	0
Non- Accrual	2,641	2,729
Total	4,572	4,414
Loans | Consumer real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	728	952
Past Due 30-89	0	622
Past Due 90 days and still accuring	0	0
Non- Accrual	1,241	449
Total	1,969	2,023
Loans | Commercial installment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	9	10
Past Due 30-89	0	0
Past Due 90 days and still accuring	0	0
Non- Accrual	31	103
Total	$ 40	$ 113

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Changes in the Carrying Amount and Accretable Yield for Acquired Impaired Loans (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement [Line Items]
Balance at beginning of period, Accretable Yield	$ 1,417	$ 0
Additions due to BCB acquisition on July 1, 2014, Accretable Yield	0	1,603
Accretion, Accretable Yield	(141)	(186)
Payments received, net, Accretable Yield	0	0
Balance at end of period, Accretable Yield	1,276	1,417
Balance at beginning of period, Carrying Amount of Loans	2,063	0
Additions due to BCB acquisition on July 1, 2014, Carrying Amount of Loans	0	2,325
Accretion, Carrying Amount of Loans	141	186
Payments received, net, Carrying Amount of Loans	(346)	(448)
Balance at end of period, Carrying Amount of Loans	$ 1,858	$ 2,063

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Reconciliation of Activity for Assets Measured at Fair Value based on Significant Unobservable (Non-market) Information (Detail) - Bank-Issued Trust Preferred Securities - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, January 1	$ 2,801	$ 2,798
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Other-than-temporary impairment loss included in earnings (loss)	0	0
Unrealized gain (loss) included in comprehensive income	(154)	3
Balance at September 30, 2015 and December 31, 2014	$ 2,647	$ 2,801

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Summary of Organization - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2015	Mar. 31, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	Dec. 31, 2013
Organization [Line Items]
Date of entity incorporation				Jun. 23, 1995
Assets	$ 1,137,849			$ 1,137,849		$ 1,093,768
Loans, including Loans held for sale	740,900			740,900		706,634
Deposits	963,840			963,840		892,775
Stockholders' equity	101,622		$ 93,592	101,622	$ 93,592	$ 96,216	$ 85,108
Net income	2,227		1,533	6,441	4,573
Net income applicable to common Stockholders	$ 2,141		$ 1,448	$ 6,184	$ 4,296
Dividends on common stock, per share	$ 0.0375	$ 0.0375	$ 0.0375	$ 0.1125	$ 0.1125

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Risk Category of Loans by Class of Loans (Excluding Mortgage Loans Held for Sale) (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	$ 747,106	$ 704,971
Less: Unearned discount	518	440
Loans, net of unearned discount	746,588	704,531
Pass
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	723,206	682,079
Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	4,640	5,445
Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	18,930	17,447
Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	330	0
Commercial Real Estate
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	431,142	408,051
Less: Unearned discount	419	320
Loans, net of unearned discount	430,723	407,731
Commercial Real Estate | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	409,569	388,568
Commercial Real Estate | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	4,313	4,756
Commercial Real Estate | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	17,260	14,727
Commercial Real Estate | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	0	0
Mortgage Real Estate
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	170,717	170,585
Less: Unearned discount	74	82
Loans, net of unearned discount	170,643	170,503
Mortgage Real Estate | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	168,836	167,827
Mortgage Real Estate | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	156	191
Mortgage Real Estate | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	1,395	2,567
Mortgage Real Estate | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	330	0
Installment and Other
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	18,142	18,648
Less: Unearned discount	0	0
Loans, net of unearned discount	18,142	18,648
Installment and Other | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	18,060	18,558
Installment and Other | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	0	0
Installment and Other | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	82	90
Installment and Other | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	0	0
Commercial,Financial and Agricultural
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	127,105	107,687
Less: Unearned discount	25	38
Loans, net of unearned discount	127,080	107,649
Commercial,Financial and Agricultural | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	126,741	107,126
Commercial,Financial and Agricultural | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	171	498
Commercial,Financial and Agricultural | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	193	63
Commercial,Financial and Agricultural | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable, gross	$ 0	$ 0

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Summary of Interest Recognized and Cash-Basis Interest Earned on Impaired Loans (Detail) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015
Financing Receivable, Impaired [Line Items]
Interest income recognized during impairment	$ 0	$ 0
Cash-basis interest income recognized	$ 43	$ 166

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Fair Value of Assets and Liabilities - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on a non recurring basis	$ 4,104	$ 4,655

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Summary of Amortized Cost and Estimated Fair Value of Available-For-Sale Securities and Held-To-Maturity Securities (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Schedule of Trading Securities and Other Trading Assets [Line Items]
Available-for-Sale, Amortized Cost	$ 237,320
Available-for-sale Securities, Gross Unrealized Gains	4,124
Available-for-sale Securities, Gross Unrealized Losses	1,813
Available-for-sale securities, Estimated Fair Value	239,631	$ 254,746
Held-to-Maturity, Amortized Cost	7,233
Held-to-maturity Securities, Gross Unrealized Gains	1,418
Held-to-maturity Securities, Gross Unrealized Losses	0
Held-to-Maturity, Estimated Fair Value	8,651
Obligations of U.S. Government Agencies
Schedule of Trading Securities and Other Trading Assets [Line Items]
Available-for-Sale, Amortized Cost	19,518
Available-for-sale Securities, Gross Unrealized Gains	213
Available-for-sale Securities, Gross Unrealized Losses	0
Available-for-sale securities, Estimated Fair Value	19,731
Tax-exempt and taxable obligations of states and municipal subdivisions
Schedule of Trading Securities and Other Trading Assets [Line Items]
Available-for-Sale, Amortized Cost	92,465
Available-for-sale Securities, Gross Unrealized Gains	2,103
Available-for-sale Securities, Gross Unrealized Losses	218
Available-for-sale securities, Estimated Fair Value	94,350
Held-to-Maturity, Amortized Cost	6,000
Held-to-maturity Securities, Gross Unrealized Gains	1,385
Held-to-maturity Securities, Gross Unrealized Losses	0
Held-to-Maturity, Estimated Fair Value	7,385
Mortgage-backed securities
Schedule of Trading Securities and Other Trading Assets [Line Items]
Available-for-Sale, Amortized Cost	97,771
Available-for-sale Securities, Gross Unrealized Gains	1,672
Available-for-sale Securities, Gross Unrealized Losses	59
Available-for-sale securities, Estimated Fair Value	99,384
Held-to-Maturity, Amortized Cost	1,233
Held-to-maturity Securities, Gross Unrealized Gains	33
Held-to-maturity Securities, Gross Unrealized Losses	0
Held-to-Maturity, Estimated Fair Value	1,266
Corporate obligations
Schedule of Trading Securities and Other Trading Assets [Line Items]
Available-for-Sale, Amortized Cost	26,311
Available-for-sale Securities, Gross Unrealized Gains	136
Available-for-sale Securities, Gross Unrealized Losses	1,246
Available-for-sale securities, Estimated Fair Value	25,201
Other
Schedule of Trading Securities and Other Trading Assets [Line Items]
Available-for-Sale, Amortized Cost	1,255
Available-for-sale Securities, Gross Unrealized Gains	0
Available-for-sale Securities, Gross Unrealized Losses	290
Available-for-sale securities, Estimated Fair Value	$ 965

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Detail of Troubled Debt Restructurings (Detail) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015 USD ($) Loans	Sep. 30, 2015 USD ($) Loans
Financing Receivable, Modifications [Line Items]
Outstanding Recorded Investment Pre-Modification	$ 269	$ 269
Outstanding Recorded Investment Post-Modification	$ 268	$ 267
Number of Loans	1	1
Interest Income Recognized	$ 3	$ 3
Commercial installment
Financing Receivable, Modifications [Line Items]
Outstanding Recorded Investment Pre-Modification	0	0
Outstanding Recorded Investment Post-Modification	$ 0	$ 0
Number of Loans | Loans	0	0
Interest Income Recognized	$ 0	$ 0
Commercial real estate
Financing Receivable, Modifications [Line Items]
Outstanding Recorded Investment Pre-Modification	269	269
Outstanding Recorded Investment Post-Modification	$ 268	$ 267
Number of Loans	1	1
Interest Income Recognized	$ 3	$ 3
Consumer real estate
Financing Receivable, Modifications [Line Items]
Outstanding Recorded Investment Pre-Modification	0	0
Outstanding Recorded Investment Post-Modification	$ 0	$ 0
Number of Loans	0	0
Interest Income Recognized	$ 0	$ 0
Consumer installment
Financing Receivable, Modifications [Line Items]
Outstanding Recorded Investment Pre-Modification	0	0
Outstanding Recorded Investment Post-Modification	$ 0	$ 0
Number of Loans	0	0
Interest Income Recognized	$ 0	$ 0

XML

BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

NOTE A — BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements and with the instructions to Form 10-Q of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2015, are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company's Form 10-K for the year ended December 31, 2014.

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Loans and Allowance for Loan Losses, Broken Down by Portfolio Segment (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Loans
Individually evaluated	$ 10,832		$ 9,560
Collectively evaluated	735,756		694,971
Total	746,588		704,531
Allowance for Loan Losses
Individually evaluated	1,028		968
Collectively evaluated	5,706		5,127
Total	6,734	$ 6,419	6,095
Real Estate
Loans
Individually evaluated	10,522		9,282
Collectively evaluated	590,844		568,952
Total	601,366		578,234
Allowance for Loan Losses
Individually evaluated	980		922
Collectively evaluated	3,292		4,285
Total	4,272		5,207
Installment and Other
Loans
Individually evaluated	42		38
Collectively evaluated	18,100		18,610
Total	18,142		18,648
Allowance for Loan Losses
Individually evaluated	26		29
Collectively evaluated	1,672		146
Total	1,698		175
Commercial Financial And Agriculture
Loans
Individually evaluated	268		240
Collectively evaluated	126,812		107,409
Total	127,080		107,649
Allowance for Loan Losses
Individually evaluated	22		17
Collectively evaluated	742		696
Total	$ 764		$ 713

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Preferred Stock and Warrant - Additional Information (Detail) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2011	May. 13, 2015	Dec. 31, 2014
Class of Stock [Line Items]
Limitations on payment of dividends on common stock	no more than 100% of the aggregate per share dividend
Dividend declared and paid, common stock		$ 0.15
Preferred stock, issued	17,123			17,123
Warrant Issued To Purchase Of Common Stock	54,705
Treasury Stock Redemption Amount			$ 302,410
Series CD Preferred Stock
Class of Stock [Line Items]
Preferred stock, annual dividend rate	2.00%
Capital purchase liquidation dividend term	8 years

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Outstanding Principal Balance And The Carrying Amount Of These Loans (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Outstanding principal balance	$ 747,106	$ 704,971
Business Acquisition
Outstanding principal balance	28,841
Carrying amount	$ 27,012

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Additional Detail of Impaired Loans Broken Out According to Class (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Impaired [Line Items]
Impaired loans with no a valuation allowance, recorded investment	$ 6,322	$ 4,702
Impaired loans with no related allowance, unpaid balance	6,361	4,702
Impaired loans with no related allowance	0	0
Impaired loans with no related allowance, average recorded investment YTD	5,138	2,894
Impaired loans with no related allowance, interest income recognized YTD	43	142
Impaired loans with a related allowance, recorded investment	4,510	4,858
Impaired loans with a related allowance, unpaid balance	4,510	4,858
Impaired loans with a related allowance	1,028	968
Impaired loans with a related allowance, average recored investment YTD	4,396	4,183
Impaired loans with a related allowance, interest income recognized YTD	123	114
Recorded Investment	10,832	9,560
Unpaid Balance	10,871	9,560
Related Allowance	1,028	968
Average Recorded Investment YTD	9,534	7,077
Interest Income Recognized YTD	166	256
Commercial installment
Financing Receivable, Impaired [Line Items]
Impaired loans with no a valuation allowance, recorded investment	0	0
Impaired loans with no related allowance, unpaid balance	0	0
Impaired loans with no related allowance	0	0
Impaired loans with no related allowance, average recorded investment YTD	3	50
Impaired loans with no related allowance, interest income recognized YTD	0	0
Impaired loans with a related allowance, recorded investment	268	240
Impaired loans with a related allowance, unpaid balance	268	240
Impaired loans with a related allowance	22	18
Impaired loans with a related allowance, average recored investment YTD	254	189
Impaired loans with a related allowance, interest income recognized YTD	10	20
Recorded Investment	268	240
Unpaid Balance	268	240
Related Allowance	22	18
Average Recorded Investment YTD	257	239
Interest Income Recognized YTD	10	20
Commercial real estate
Financing Receivable, Impaired [Line Items]
Impaired loans with no a valuation allowance, recorded investment	6,077	4,665
Impaired loans with no related allowance, unpaid balance	6,116	4,665
Impaired loans with no related allowance	0	0
Impaired loans with no related allowance, average recorded investment YTD	4,927	2,654
Impaired loans with no related allowance, interest income recognized YTD	43	142
Impaired loans with a related allowance, recorded investment	3,232	2,558
Impaired loans with a related allowance, unpaid balance	3,232	2,558
Impaired loans with a related allowance	479	315
Impaired loans with a related allowance, average recored investment YTD	2,882	2,415
Impaired loans with a related allowance, interest income recognized YTD	102	59
Recorded Investment	9,309	7,223
Unpaid Balance	9,348	7,223
Related Allowance	479	315
Average Recorded Investment YTD	7,809	5,069
Interest Income Recognized YTD	145	201
Consumer real estate
Financing Receivable, Impaired [Line Items]
Impaired loans with no a valuation allowance, recorded investment	238	27
Impaired loans with no related allowance, unpaid balance	238	27
Impaired loans with no related allowance	0	0
Impaired loans with no related allowance, average recorded investment YTD	200	179
Impaired loans with no related allowance, interest income recognized YTD	0	0
Impaired loans with a related allowance, recorded investment	975	2,032
Impaired loans with a related allowance, unpaid balance	975	2,032
Impaired loans with a related allowance	501	607
Impaired loans with a related allowance, average recored investment YTD	1,230	1,546
Impaired loans with a related allowance, interest income recognized YTD	11	33
Recorded Investment	1,213	2,059
Unpaid Balance	1,213	2,059
Related Allowance	501	607
Average Recorded Investment YTD	1,430	1,725
Interest Income Recognized YTD	11	33
Consumer installment
Financing Receivable, Impaired [Line Items]
Impaired loans with no a valuation allowance, recorded investment	7	10
Impaired loans with no related allowance, unpaid balance	7	10
Impaired loans with no related allowance	0	0
Impaired loans with no related allowance, average recorded investment YTD	8	11
Impaired loans with no related allowance, interest income recognized YTD	0	0
Impaired loans with a related allowance, recorded investment	35	28
Impaired loans with a related allowance, unpaid balance	35	28
Impaired loans with a related allowance	26	28
Impaired loans with a related allowance, average recored investment YTD	30	33
Impaired loans with a related allowance, interest income recognized YTD	0	2
Recorded Investment	42	38
Unpaid Balance	42	38
Related Allowance	26	28
Average Recorded Investment YTD	38	44
Interest Income Recognized YTD	$ 0	$ 2

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Earnings Applicable to Common Stockholders - Additional Information (Detail) - shares	3 Months Ended
	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015
Earnings Per Share Basic [Line Items]
Shares of restricted stock granted	2,250	0	67,077

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Earnings Applicable to Common Stockholders (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Earnings Per Share Basic [Line Items]
Net income available to common stock holders, basic	$ 2,141,000	$ 1,448,000	$ 6,184,000	$ 4,296,000
Net income available to common stock holders, diluted	$ 2,141,000	$ 1,448,000	$ 6,184,000	$ 4,296,000
Effect of dilutive shares:
Weighted average number of shares outstanding, basic	5,374,790	5,311,876	5,369,260	5,198,776
Effect of dilutive shares: Restricted stock grants	67,190	37,810	67,190	37,810
Weighted average number of shares outstanding, diluted	5,441,980	5,349,686	5,436,450	5,236,586
Basic per share	$ 0.4	$ 0.27	$ 1.15	$ 0.83
Diluted per share	$ 0.39	$ 0.27	$ 1.14	$ 0.82

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME	$ 6,441	$ 4,573
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	2,416	1,697
Provision for loan losses	400	1,266
Loss on sale/writedown of ORE	142	299
Gain on sale of securities	0	(241)
Gain on sale of bank premises	(119)	(111)
Restricted stock expense	539	455
Increase in cash value of life insurance	(308)	(266)
Federal Home Loan Bank stock dividends	(7)	(2)
Changes in:
Interest receivable	(150)	(359)
Loans held for sale, net	1,051	30
Interest payable	(84)	(128)
Other, net	(2,884)	1,203
NET CASH PROVIDED BY OPERATING ACTIVITIES	7,437	8,416
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of Securities	0	10,942
Cash received in excess of cash paid for acquisition	0	4,270
Maturities, calls and paydowns of available- for-sale and held-to-maturity securities	35,135	30,485
Purchases of securities available-for-sale and held-to-maturity securities	(20,329)	(38,460)
Net redemptions of other securities	993	365
Net increase in loans	(42,179)	(49,102)
Purchase of bank owned life insurance	0	(7,500)
Proceeds from sale of bank premises	949	0
Net increase in premises and equipment	(860)	(391)
NET CASH USED IN INVESTING ACTIVITIES	(26,291)	(49,391)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deposits	71,205	68,539
Net decrease in borrowed funds	(30,464)	(15,648)
Dividends paid on common stock	(584)	(570)
Dividends paid on preferred stock	(257)	(237)
Repurchase of restricted stock for payment of taxes	(92)	86
Repurchase of shares issued in BCB acquisition	(36)	0
Repurchase of warrants	(303)	0
NET CASH PROVIDED BY FINANCING ACTIVITIES	39,469	52,170
NET INCREASE IN CASH	20,615	11,195
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	44,618	39,252
CASH AND CASH EQUIVALENTS AT END OF PERIOD	65,233	50,447
SUPPLEMENTAL DISCLOSURES:
CASH PAYMENTS FOR INTEREST	2,627	2,601
CASH PAYMENTS FOR INCOME TAXES	3,675	275
LOANS TRANSFERRED TO OTHER REAL ESTATE	506	1,972
ISSUANCE OF RESTRICTED STOCK GRANTS	$ 2	$ 63

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Fair Value of Assets Measured on Recurring Basis (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	$ 239,631	$ 254,746
Obligations of U. S. Government Agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	19,731	27,372
Municipal securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	94,350	104,582
Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	99,384	93,036
Corporate obligations
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	25,201	28,784
Other
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	965	972
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	965	972
Quoted Prices in Active Markets for Identical Assets (Level 1) | Obligations of U. S. Government Agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Municipal securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate obligations
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	965	972
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	236,019	250,973
Significant Other Observable Inputs (Level 2) | Obligations of U. S. Government Agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	19,731	27,372
Significant Other Observable Inputs (Level 2) | Municipal securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	94,350	104,582
Significant Other Observable Inputs (Level 2) | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	99,384	93,036
Significant Other Observable Inputs (Level 2) | Corporate obligations
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	22,554	25,983
Significant Other Observable Inputs (Level 2) | Other
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	0	0
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	2,647	2,801
Significant Unobservable Inputs (Level 3) | Obligations of U. S. Government Agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	0	0
Significant Unobservable Inputs (Level 3) | Municipal securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	0	0
Significant Unobservable Inputs (Level 3) | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	0	0
Significant Unobservable Inputs (Level 3) | Corporate obligations
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	2,647	2,801
Significant Unobservable Inputs (Level 3) | Other
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Securities available-for-sale, at fair value	$ 0	$ 0

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Allocation of Allowance for Loan Losses (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses	$ 6,734	$ 6,419	$ 6,095
Allowance for loan losses, percentage of total	100.00%		100.00%
Commercial Non Real Estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses	$ 765		$ 713
Allowance for loan losses, percentage of total	17.10%		15.30%
Commercial Real Estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses	$ 2,607		$ 3,355
Allowance for loan losses, percentage of total	57.70%		57.90%
Consumer Real Estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses	$ 1,414		$ 1,852
Allowance for loan losses, percentage of total	22.80%		24.20%
Consumer
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses	$ 137		$ 175
Allowance for loan losses, percentage of total	2.40%		2.60%
Unallocated
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses	$ 1,811		$ 0
Allowance for loan losses, percentage of total	0.00%		0.00%

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Subsequent Events - Additional Information (Detail) - USD ($)	3 Months Ended
	Sep. 30, 2015	Jun. 30, 2015
Subsequent Event [Line Items]
Proceeds from Recoveries of Loans Previously Charged off	$ 241,000	$ 481,000
Receivable From Recovery of Loan Previously Charged Off	$ 941,000

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
ASSETS
Cash and due from banks	$ 28,547	$ 30,333
Interest-bearing deposits with banks	28,852	13,899
Federal funds sold	7,834	386
Total cash and cash equivalents	65,233	44,618
Securities held-to-maturity, at amortized cost	7,233	8,193
Securities available-for-sale, at fair value	239,631	254,746
Other securities	6,249	7,235
Total securities	253,113	270,174
Loans held for sale	1,058	2,103
Loans	746,588	704,531
Allowance for loan losses	(6,734)	(6,095)
Loans, net	740,912	700,539
Premises and equipment	33,610	34,810
Interest receivable	3,809	3,659
Cash surrender value of life insurance	14,771	14,463
Goodwill	12,276	12,276
Other real estate owned	4,104	4,655
Other assets	10,021	8,574
TOTAL ASSETS	1,137,849	1,093,768
Deposits:
Noninterest-bearing	187,542	201,362
Interest-bearing	776,298	691,413
TOTAL DEPOSITS	963,840	892,775
Interest payable	232	316
Borrowed funds	58,986	89,450
Subordinated debentures	10,310	10,310
Other liabilities	2,859	4,701
TOTAL LIABILITIES	1,036,227	997,552
STOCKHOLDERS' EQUITY:
Preferred stock, no par value, $1,000 per share liquidation, 10,000,000 shares authorized; 17,123 issued and outstanding at September 30, 2015 and December 31, 2014, respectively	17,123	17,123
Common stock, par value $1 per share, 20,000,000 shares authorized and 5,403,159 shares issued at Sept 30, 2015; 10,000,000 shares authorized and 5,342,670 shares issued at December 31, 2014, respectively	5,403	5,343
Additional paid-in capital	44,469	44,421
Retained earnings	33,554	27,975
Accumulated other comprehensive income	1,537	1,818
Treasury stock, at cost, 26,494 shares at September 30, 2015 and at December 31, 2014	(464)	(464)
TOTAL STOCKHOLDERS' EQUITY	101,622	96,216
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,137,849	$ 1,093,768

XML

Information Regarding Contractually Payments Receivable, Cash Flows (Detail) $ in Thousands	Dec. 31, 2014 USD ($)
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement [Line Items]
Contractually required payments	$ 40,076
Cash flows expected to be collected	50,168
Fair value of loans acquired	38,393
Commercial Financial And Agriculture
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement [Line Items]
Contractually required payments	1,519
Cash flows expected to be collected	1,570
Fair value of loans acquired	1,513
Mortgage-Commercial
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement [Line Items]
Contractually required payments	29,648
Cash flows expected to be collected	37,869
Fair value of loans acquired	28,875
Mortgage-Residential
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement [Line Items]
Contractually required payments	7,933
Cash flows expected to be collected	9,697
Fair value of loans acquired	7,048
Commercial and other
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement [Line Items]
Contractually required payments	976
Cash flows expected to be collected	1,032
Fair value of loans acquired	$ 957

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Preferred Stock	Stock Warrants	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock
Balance at Dec. 31, 2013	$ 85,108	$ 5,123	$ 17,103	$ 284	$ 41,802	$ 22,509	$ (1,249)	$ (464)
Net income	4,573	0	0	0	0	4,573	0	0
Other comprehensive income	2,363	0	0	0	0	0	2,363	0
Accretion and dividends on preferred stock	(257)	0	20	0	0	(277)	0	0
Dividends on common stock, $0.1125 per share	(586)	0	0	0	0	(586)	0	0
Repurchase of restricted stock for payment of taxes	(86)	(6)	0	0	(80)	0	0	0
Restricted stock grant	0	63	0	0	(63)	0	0	0
Compensation expense	455	0	0	0	455	0	0	0
Issuance of 158,083 common shares for BCB Holding	2,022	158	0	0	1,864	0	0	0
Balance at Sep. 30, 2014	93,592	5,338	17,123	284	43,978	26,219	1,114	(464)
Balance at Dec. 31, 2014	96,216	5,343	17,123	284	44,137	27,975	1,818	(464)
Net income	6,441	0	0	0	0	6,441	0	0
Other comprehensive income	(281)	0	0	0	0	0	(281)	0
Accretion and dividends on preferred stock	(257)	0	0	0	0	(257)	0	0
Dividends on common stock, $0.1125 per share	(605)	0	0	0	0	(605)	0	0
Repurchase of restricted stock for payment of taxes	(92)	(6)	0	0	(86)	0	0	0
Restricted stock grant	0	69	0	0	(69)	0	0	0
Compensation expense	539	0	0	0	539	0	0	0
Reversal of 2,514 common shares for BCB Holdings	(36)	(3)	0	0	(33)	0	0	0
Repurchase warrants	(303)	0	0	(284)	(19)	0	0	0
Balance at Sep. 30, 2015	$ 101,622	$ 5,403	$ 17,123	$ 0	$ 44,469	$ 33,554	$ 1,537	$ (464)

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Fair Value of Assets Measured on Nonrecurring Basis (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Impaired Loans
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Assets measured at fair value on a nonrecurring basis	$ 10,832	$ 9,560
Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Assets measured at fair value on a nonrecurring basis	4,104	4,655
Quoted Prices in Active Markets for Identical Assets (Level 1) | Impaired Loans
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Assets measured at fair value on a nonrecurring basis	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Assets measured at fair value on a nonrecurring basis	0	0
Significant Other Observable Inputs (Level 2) | Impaired Loans
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Assets measured at fair value on a nonrecurring basis	10,832	9,560
Significant Other Observable Inputs (Level 2) | Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Assets measured at fair value on a nonrecurring basis	4,104	4,655
Significant Unobservable Inputs (Level 3) | Impaired Loans
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Assets measured at fair value on a nonrecurring basis	0	0
Significant Unobservable Inputs (Level 3) | Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items]
Assets measured at fair value on a nonrecurring basis	$ 0	$ 0

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FAIR VALUE OF ASSETS AND LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Assets Measured on Recurring Basis

The following table presents the Company’s assets that are measured at fair value on a recurring basis and the level within the hierarchy in which the fair value measurements fell as of September 30, 2015 and December 31, 2014 (in thousands):

September 30, 2015

(Dollars in thousands)			Fair Value Measurements Using
			Quoted Prices
			in
			Active
			Markets		Significant
			For		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Obligations of U. S. Government Agencies	$	19,731	$	-	$	19,731	$	-
Municipal securities		94,350		-		94,350		-
Mortgage-backed securities		99,384		-		99,384		-
Corporate obligations		25,201		-		22,554		2,647
Other		965		965		-		-
Total	$	239,631	$	965	$	236,019	$	2,647

December 31, 2014

(Dollars in thousands)			Fair Value Measurements Using
			Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Obligations of U. S. Government Agencies	$	27,372	$	-	$	27,372	$	-
Municipal securities		104,582		-		104,582		-
Mortgage-backed securities		93,036		-		93,036		-
Corporate obligations		28,784		-		25,983		2,801
Other		972		972		-		-
Total	$	254,746	$	972	$	250,973	$	2,801

Reconciliation of Activity for Assets Measured at Fair Value based on Significant Unobservable (Non-market) Information

The following is a reconciliation of activity for assets measured at fair value based on significant unobservable (non-market) information.

	Bank-Issued
	Trust
	Preferred
(Dollars in thousands)	Securities
	2015		2014
Balance, January 1	$	2,801	$	2,798
Transfers into Level 3		-		-
Transfers out of Level 3		-		-
Other-than-temporary impairment loss included in earnings (loss)		-		-
Unrealized gain (loss) included in comprehensive income		(154)		3
Balance at September 30, 2015 and December 31, 2014	$	2,647	$	2,801

Quantitative Information About Recurring Level 3 Fair Value Measurements

The following table presents quantitative information about recurring Level 3 fair value measurements (in thousands):

				Significant
Trust Preferred	Fair		Valuation	Unobservable	Range of
Securities	Value		Technique	Inputs	Inputs
September 30, 2015		2,647	Discounted cash flow	Probability of default	.88% - 2.58%
December 31, 2014		2,801	Discounted cash flow	Probability of default	.79% - 2.49%

Fair Value Assets Measured on Nonrecurring Basis

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fell at September 30, 2015 and December 31, 2014.

($ in thousands)

September 30, 2015

			Fair Value Measurements Using
			Quoted
			Prices in
			Active
			Markets		Significant
			For		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	10,832	$	-	$	10,832	$	-
Other real estate owned		4,104		-		4,104		-

December 31, 2014

			Fair Value Measurements Using
			Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	9,560	$	-	$	9,560	$	-
Other real estate owned		4,655		-		4,655		-

Financial Instruments with No Distinguishable Fair Value

Management has determined that these instruments do not have a distinguishable fair value and no fair value has been assigned.

As of September 30, 2015 ($ in thousands)					Fair Value Measurements
	Carrying Amount		Estimated Fair Value		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Instruments:
Assets:
Cash and cash equivalents	$	65,233	$	65,233	$	65,233	$	-	$	-
Securities available-for- sale		239,631		239,631		965		236,019		2,647
Securities held- to-maturity		7,233		8,651		-		8,651		-
Other securities		6,249		6,249		-		6,249		-
Loans, net		740,912		758,614		-		-		758,614
Bank-owned life insurance		14,771		14,771		-		14,771		-
Liabilities:
Noninterest- bearing deposits	$	187,542	$	187,542	$	-	$	187,542	$	-
Interest-bearing deposits		776,298		775,760		-		775,760		-
Subordinated debentures		10,310		10,310		-		-		10,310
FHLB and other borrowings		58,986		58,986		-		58,986		-

As of December 31, 2014 ($ in thousands)					Fair Value Measurements
	Carrying Amount		Estimated Fair Value		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Instruments:
Assets:
Cash and cash equivalents	$	44,618	$	44,618	$	44,618	$	-	$	-
Securities available-for- sale		254,746		254,746		972		250,973		2,801
Securities held- to-maturity		8,193		9,994		-		9,994		-
Other securities		7,235		7,235		-		7,235		-
Loans, net		700,539		715,849		-		-		715,849
Bank-owned life insurance		14,463		14,463		-		14,463		-
Liabilities:
Noninterest- bearing deposits	$	201,362	$	201,362	$	-	$	201,362	$	-
Interest-bearing deposits		691,413		691,036		-		691,036		-
Subordinated debentures		10,310		10,310		-		-		10,310
FHLB and other borrowings		89,450		89,450		-		89,450		-

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Fair Values of off-Balance Sheet Financial Instruments (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013
Assets:
Cash and cash equivalents	$ 65,233	$ 44,618	$ 50,447	$ 39,252
Securities available-for-sale	239,631	254,746
Securities held-to-maturity	7,233	8,193
Other securities	6,249	7,235
Loans, net	740,912	700,539
Bank-owned life insurance	14,771	14,463
Liabilities:
Noninterest-bearing deposits	187,542	201,362
Interest-bearing deposits	776,298	691,413
Subordinated debentures	10,310	10,310
FHLB and other borrowings	58,986	89,450
Quoted Prices (Level 1)
Assets:
Cash and cash equivalents	65,233	44,618
Securities available-for-sale	965	972
Securities held-to-maturity	0	0
Other securities	0	0
Loans, net	0	0
Bank-owned life insurance	0	0
Liabilities:
Noninterest-bearing deposits	0	0
Interest-bearing deposits	0	0
Subordinated debentures	0	0
FHLB and other borrowings	0	0
Significant Other Observable Inputs (Level 2)
Assets:
Cash and cash equivalents	0	0
Securities available-for-sale	236,019	250,973
Securities held-to-maturity	8,651	9,994
Other securities	6,249	7,235
Loans, net	0	0
Bank-owned life insurance	14,771	14,463
Liabilities:
Noninterest-bearing deposits	187,542	201,362
Interest-bearing deposits	775,760	691,036
Subordinated debentures	0	0
FHLB and other borrowings	58,986	89,450
Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	0	0
Securities available-for-sale	2,647	2,801
Securities held-to-maturity	0	0
Other securities	0	0
Loans, net	758,614	715,849
Bank-owned life insurance	0	0
Liabilities:
Noninterest-bearing deposits	0	0
Interest-bearing deposits	0	0
Subordinated debentures	10,310	10,310
FHLB and other borrowings	0	0
Estimated Fair Value
Assets:
Cash and cash equivalents	65,233	44,618
Securities available-for-sale	239,631	254,746
Securities held-to-maturity	8,651	9,994
Other securities	6,249	7,235
Loans, net	758,614	715,849
Bank-owned life insurance	14,771	14,463
Liabilities:
Noninterest-bearing deposits	187,542	201,362
Interest-bearing deposits	775,760	691,036
Subordinated debentures	10,310	10,310
FHLB and other borrowings	$ 58,986	$ 89,450

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SECURITIES (Tables)

9 Months Ended

Sep. 30, 2015

Securities [Abstract]

Summary of Amortized Cost and Estimated Fair Value of Available-For-Sale Securities and Held-to-Maturity Securities

A summary of the amortized cost and estimated fair value of available-for-sale securities and held-to-maturity securities at September 30, 2015, follows:

($ in thousands)

	September 30, 2015
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
Available-for-sale securities:
Obligations of U.S. Government Agencies	$	19,518	$	213	$	-	$	19,731
Tax-exempt and taxable obligations of states and municipal subdivisions		92,465		2,103		218		94,350
Mortgage-backed securities		97,771		1,672		59		99,384
Corporate obligations		26,311		136		1,246		25,201
Other		1,255		-		290		965
Total	$	237,320	$	4,124	$	1,813	$	239,631
Held-to-maturity securities:
Mortgage-backed securities	$	1,233	$	33	$	-	$	1,266
Taxable obligations of states and municipal subdivisions		6,000		1,385		-		7,385
Total	$	7,233	$	1,418	$	-	$	8,651

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Dividends on common stock, per Share	$ 0.1125	$ 0.1125
Reversal of common shares	2,514
Issuance of common shares for BCB Holding		158,083

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Preferred stock, no par value	$ 0	$ 0
Preferred stock, per share liquidation	$ 1,000	$ 1,000
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, issued	17,123	17,123
Preferred stock, outstanding	17,123	17,123
Common stock, par value	$ 1	$ 1
Common stock, shares authorized	20,000,000	10,000,000
Common stock, shares issued	5,403,159	5,342,670
Treasury stock, shares	26,494	26,494

XML

ALLOWANCE FOR LOAN LOSSES

9 Months Ended

Sep. 30, 2015

Allowance For Loan Losses [Abstract]

ALLOWANCE FOR LOAN LOSSES

NOTE I — ALLOWANCE FOR LOAN LOSSES

The Company has developed policies and procedures for evaluating the overall quality of its credit portfolio and the timely identification of potential problem loans. Management’s judgment as to the adequacy of the allowance is based upon a number of assumptions which it believes to be reasonable, but which may not prove to be accurate, particularly given the Company’s growth and the economy. Thus, there can be no assurance that charge-offs in future periods will not exceed the allowance for loan losses or that additional increases in the loan loss allowance will not be required.

The Company’s allowance consists of two parts. The first part is determined in accordance with authoritative guidance regarding contingencies. The Company’s determination of this part of the allowance is based upon quantitative and qualitative factors. A loan loss history based upon the most recent 72 months loss history is utilized in determining the appropriate allowance. Historical loss factors are determined by risk rated loans by loan type. These historical loss factors are applied to the loans by loan type to determine an indicated allowance. The loss factors of peer groups are considered in the determination of the allowance and are used to assist in the establishment of a long-term loss history for areas in which this data is unavailable and incorporated into the qualitative factors to be considered. The historical loss factors may also be modified based upon other qualitative factors including but not limited to local and national economic conditions, trends of delinquent loans, changes in lending policies and underwriting standards, concentrations, and management’s knowledge of the loan portfolio. These factors require judgment upon the part of management and are based upon state and national economic reports received from various institutions and agencies including the Federal Reserve Bank, United States Bureau of Economic Analysis, Bureau of Labor Statistics, meetings with the Company’s loan officers and loan committee, and data and guidance received or obtained from the Company’s regulatory authorities.

The second part of the allowance is determined in accordance with authoritative guidance regarding loan impairment. Impaired loans are determined based upon a review by internal loan review and senior management.

The sum of the two parts constitutes management’s best estimate of an appropriate allowance for loan losses. When the estimated allowance is determined, it is presented to the Company’s audit committee for review and approval on a quarterly basis.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. 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 reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Impairment is measured on a loan by loan basis, and a specific allowance is assigned to each loan determined to be impaired. Impaired loans not deemed collateral dependent are analyzed according to the ultimate repayment source, whether that is cash flow from the borrower, guarantor or some other source of repayment. Impaired loans are deemed collateral dependent if, in the Company’s opinion, the ultimate source of repayment will be generated from the liquidation of collateral.

The Company discontinues accrual of interest on loans when management believes, after considering economic and business conditions and collection efforts, that a borrower’s financial condition is such that the collection of interest is doubtful. Generally, the Company will place a delinquent loan in nonaccrual status when the loan becomes 90 days or more past due. At the time a loan is placed in nonaccrual status, all interest which has been accrued on the loan but remains unpaid is reversed and deducted from earnings as a reduction of reported interest income. No additional interest is accrued on the loan balance until the collection of both principal and interest becomes reasonably certain.

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Document And Entity Information	9 Months Ended
	Sep. 30, 2015 shares
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Entity Registrant Name	FIRST BANCSHARES INC /MS/
Entity Central Index Key	0000947559
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Trading Symbol	FBMS
Entity Common Stock, Shares Outstanding	5,403,159

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2015

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE J – SUBSEQUENT EVENTS

Subsequent events have been evaluated by management through the date the financial statements were issued. The Company has been notified that it is more likely than not that the Company should expect a recovery on a previously charged-off loan of $941,000 during 2015. During the second quarter, the first installment payment of $481,000 was received. During the third quarter, the second installment payment of $241,000 was received.

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CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
INTEREST INCOME:
Interest and fees on loans	$ 8,629	$ 8,059	$ 25,309	$ 22,154
Interest and dividends on securities:
Taxable interest and dividends	1,001	1,094	3,022	2,953
Tax exempt interest	437	529	1,402	1,555
Interest on federal funds sold	13	6	52	47
TOTAL INTEREST INCOME	10,080	9,688	29,785	26,709
INTEREST EXPENSE:
Interest on deposits	646	689	1,936	1,739
Interest on borrowed funds	147	144	467	443
TOTAL INTEREST EXPENSE	793	833	2,403	2,182
NET INTEREST INCOME	9,287	8,855	27,382	24,527
PROVISION FOR LOAN LOSSES	250	631	400	1,266
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	9,037	8,224	26,982	23,261
OTHER INCOME:
Service charges on deposit accounts	1,542	1,280	3,690	3,317
Other service charges and fees	440	741	1,996	2,431
TOTAL OTHER INCOME	1,982	2,021	5,686	5,748
OTHER EXPENSES:
Salaries and employee benefits	4,628	4,554	13,867	12,911
Occupancy and equipment	1,137	1,382	3,383	3,844
Other	2,212	2,135	6,637	5,927
TOTAL OTHER EXPENSES	7,977	8,071	23,887	22,682
INCOME BEFORE INCOME TAXES	3,042	2,174	8,781	6,327
INCOME TAXES	815	641	2,340	1,754
NET INCOME	2,227	1,533	6,441	4,573
PREFERRED STOCK ACCRETION AND DIVIDENDS	86	85	257	277
NET INCOME APPLICABLE TO COMMON STOCKHOLDERS	$ 2,141	$ 1,448	$ 6,184	$ 4,296
NET INCOME APPLICABLE TO COMMON STOCKHOLDERS:
BASIC	$ 0.40	$ 0.27	$ 1.15	$ 0.83
DILUTED	0.39	0.27	1.14	0.82
DIVIDENDS PER SHARE - COMMON	$ 0.0375	$ 0.0375	$ 0.1125	$ 0.1125

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PREFERRED STOCK AND WARRANT

9 Months Ended

Sep. 30, 2015

Preferred Stock And Warrant [Abstract]

PREFERRED STOCK AND WARRANT

NOTE D – PREFERRED STOCK AND WARRANT

Pursuant to the terms of the letter agreement between the Company and the United States Department of the Treasury (“Treasury”), the Company issued 17,123 CDCI Preferred Shares.

The Letter Agreement contains limitations on the payment of dividends on the common stock to no more than 100% of the aggregate per share dividend and distributions for the immediate prior fiscal year (dividends of $0.15 per share were declared and paid in 2011-2014) and on the Company’s ability to repurchase its common stock in the event of a non-payment of our dividend, and continues to subject the Company to certain of the executive compensation limitations included in the Emergency Economic Stabilization Act of 2008 (EESA), as previously disclosed by the Company. The CDCI Preferred Shares entitle the holder to an annual dividend of 2% for 8 years of the liquidation value of the shares, payable quarterly in arrears.

Pursuant to the terms of the letter agreement between the Company and the United States Department of the Treasury, the Company redeemed the warrant to purchase up to 54,705 shares of the Company’s common stock. In connection with this redemption, on May 13, 2015, the Company paid Treasury an aggregate redemption price of $302,410.

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BUSINESS COMBINATION

9 Months Ended

Sep. 30, 2015

Business Combination, Description [Abstract]

BUSINESS COMBINATION

NOTE C – BUSINESS COMBINATION

BCB Holding Company, Inc.

On March 3, 2014, the Company entered into an Agreement and Plan of Merger (the “Agreement”) with BCB Holding Company, Inc., an Alabama corporation (“BCB”) and parent of Bay Bank, Mobile, Alabama. The Agreement provided that, upon the terms and subject to the conditions set forth in the Agreement, BCB will merge with and into the Company (the “Merger”) and Bay Bank will merge with and into The First, A National Banking Association (“Bank Merger”). Subject to the terms and conditions of the Agreement, which was approved by the Boards of Directors of the Company and BCB, each outstanding share of BCB common stock, other than shares held by the Company or BCB, or, shares with respect to which the holders thereof have perfected dissenters’ rights received (i) for the BCB common stock that was outstanding prior to August 1, 2013, $3.60 per share and one non-transferable contingent value right (“CVR”) of the CVR Consideration, and (ii) for the BCB common stock that was issued on August 1, 2013, $2.25 per share in cash. Each CVR is eligible to receive a cash payment equal to up to $0.40, with the exact amount based on the resolution of certain identified BCB loans over a three-year period following the closing of the transaction. Payout of the CVR will be overseen by a special committee of the Company’s Board of Directors. The total consideration to be paid in connection with the acquisition will range between approximately $6.2 million and $6.6 million depending upon the payout of the CVR. An estimated liability of $174,000 has been accrued for the CVR and a payment of $8 thousand dollars was made during the second quarter of 2015, leaving an accrual of $166,000.

As of the closing on July 1, 2014, the Company and BCB entered into an agreement and plan of merger pursuant to which BCB’s wholly-owned subsidiary, Bay Bank, was merged with and into the Company’s wholly-owned subsidiary, the Bank.

In connection with the acquisition, the Company recorded $1.7 million of goodwill and $.2 million of core deposit intangible. The core deposit intangible will be expensed over 10 years.

The Company acquired the $40.1 million loan portfolio at a fair value discount of $1.7 million. The discount represents expected credit losses, adjusted to market interest rates and liquidity adjustments.

The amounts of the acquired identifiable assets and liabilities as of the acquisition date were as follows(dollars in thousands):

Purchase price:
Cash and fair value of common stock	$	6,300
Total purchase price		6,300
Identifiable assets:
Cash and due from banks		8,307
Investments		23,423
Loans and leases		38,393
Other Real Estate		571
Core deposit intangible		225
Personal and real property		3,670
Deferred tax asset		2,502
Other assets		305
Total assets		77,396
Liabilities and equity:
Deposits		59,321
Borrowed funds		13,104
Other liabilities		326
Total liabilities		72,751
Net assets acquired		4,645
Goodwill resulting from acquisition	$	1,655

The outstanding principal balance and the carrying amount of these loans included in the consolidated balance sheet at September 30, 2015, are as follows: (dollars in thousands):

Outstanding principal balance	$	28,841
Carrying amount		27,012

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LOANS (Tables)

9 Months Ended

Sep. 30, 2015

Loans Receivable, Net [Abstract]

Composition of Loan Portfolio

The following table shows the composition of the loan portfolio by category:

Composition of Loan Portfolio
	September 30, 2015   December 31, 2014
	Amount		Percent of Total			Amount		Percent of Total
	(Dollars in thousands)
Mortgage loans held for sale	$	1,058		0.1	%	$	2,103		0.3	%
Commercial, financial and agricultural		123,872		16.6			106,109		15.0
Real Estate:
Mortgage-commercial		251,631		33.7			238,602		33.8
Mortgage-residential		265,762		35.5			256,406		36.3
Construction		85,769		11.5			84,935		12.0
Lease financing receivable		2,303		.3			-		-
Consumer and other		17,251		2.3			18,479		2.6
Total loans		747,646		100	%		706,634		100	%
Allowance for loan losses		(6,734)					(6,095)
Net loans	$	740,912				$	700,539

Activity in Allowance for Loan Losses

Activity in the allowance for loan losses for the period was as follows:

(In thousands)

	Three Months		Nine Months
	Ended		Ended
	Sept. 30, 2015		Sept. 30, 2015
Balance at beginning of period	$	6,419	$	6,095
Loans charged-off:
Real Estate		(58)		(407)
Installment and Other		(24)		(87)
Commercial, Financial and Agriculture		(183)		(183)
Total		(265)		(677)
Recoveries on loans previously charged-off:
Real Estate		296		849
Installment and Other		32		56
Commercial, Financial and Agriculture		2		11
Total		330		916
Net recoveries		65		239
Provision for Loan Losses		250		400
Balance at end of period	$	6,734	$	6,734

Allocation of Allowance for Loan Losses

The following tables represent how the allowance for loan losses is allocated to a particular loan type, as well as the percentage of the category to total loans at September 30, 2015 and December 31, 2014.

 Allocation of the Allowance for Loan Losses

	September 30, 2015
	(Dollars in thousands)
	Amount		% of loans in each category to total loans
Commercial Non Real Estate	$	765		17.1	%
Commercial Real Estate		2,607		57.7
Consumer Real Estate		1,414		22.8
Consumer		137		2.4
Unallocated		1,811		-
Total	$	6,734		100	%

	December 31, 2014
	(Dollars in thousands)
	Amount		% of loans in each category to total loans
Commercial Non Real Estate	$	713		15.3	%
Commercial Real Estate		3,355		57.9
Consumer Real Estate		1,852		24.2
Consumer		175		2.6
Unallocated		-		-
Total	$	6,095		100	%

Impaired Loans

The following table represents the Company’s impaired loans at September 30, 2015, and December 31, 2014.

	Sept. 30,		December 31,
	2015		2014
	(In thousands)
Impaired Loans:
Impaired loans without a valuation allowance	$	6,322	$	4,702
Impaired loans with a valuation allowance		4,510		4,858
Total impaired loans	$	10,832	$	9,560
Allowance for loan losses on impaired loans at period end		1,028		968
Total nonaccrual loans		7,949		6,056
Past due 90 days or more and still accruing		6		669
Average investment in impaired loans		9,534		7,077

Summary of Interest Recognized and Cash-Basis Interest Earned on Impaired Loans

The following table is a summary of interest recognized and cash-basis interest earned on impaired loans:

	Three Months Ended Sept. 30, 2015		Nine Months  Ended  Sept. 30, 2015
Interest income recognized during impairment		-		-
Cash-basis interest income recognized		43		166

Loans and Allowance for Loan Losses Evaluated Individually and Collectively

The following tables provide the ending balances in the Company's loans (excluding mortgage loans held for sale) and allowance for loan losses, broken down by portfolio segment as of September 30, 2015 and December 31, 2014. The tables also provide additional detail as to the amount of our loans and allowance that correspond to individual versus collective impairment evaluation. The impairment evaluation corresponds to the Company's systematic methodology for estimating its Allowance for Loan Losses.

September 30, 2015

					Commercial,
			Installment		Financial
	Real Estate		and Other		and Agriculture		Total
	(In thousands)
Loans
Individually evaluated	$	10,522	$	42	$	268	$	10,832
Collectively evaluated		590,844		18,100		126,812		735,756
Total	$	601,366	$	18,142	$	127,080	$	746,588
Allowance for Loan Losses
Individually evaluated	$	980	$	26	$	22	$	1,028
Collectively evaluated		3,292		1,672		742		5,706
Total	$	4,272	$	1,698	$	764	$	6,734

December 31, 2014

					Commercial,
			Installment		Financial
	Real Estate		and Other		and Agriculture		Total
	(In thousands)
Loans
Individually evaluated	$	9,282	$	38	$	240	$	9,560
Collectively evaluated		568,952		18,610		107,409		694,971
Total	$	578,234	$	18,648	$	107,649	$	704,531
Allowance for Loan Losses
Individually evaluated	$	922	$	29	$	17	$	968
Collectively evaluated		4,285		146		696		5,127
Total	$	5,207	$	175	$	713	$	6,095

Troubled Debt Restructurings

The following tables provide additional detail of impaired loans broken out according to class as of September 30, 2015 and December 31, 2014. The recorded investment included in the following tables represent customer balances net of any partial charge-offs recognized on the loans, net of any deferred fees and costs. As nearly all of our impaired loans at September 30, 2015, are on nonaccrual status, recorded investment excludes any insignificant amount of accrued interest receivable on loans 90-days or more past due and still accruing. The unpaid balance represents the recorded balance prior to any partial charge-offs.

September 30, 2015
							Average		Interest
							Recorded		Income
	Recorded		Unpaid		Related		Investment		Recognized
	Investment		Balance		Allowance		YTD		YTD
	(In thousands)
Impaired loans with no related allowance:
Commercial installment	$	-	$	-	$	-	$	3	$	-
Commercial real estate		6,077		6,116		-		4,927		43
Consumer real estate		238		238		-		200		-
Consumer installment		7		7		-		8		-
Total	$	6,322	$	6,361	$	-	$	5,138	$	43
Impaired loans with a related allowance:
Commercial installment	$	268	$	268	$	22	$	254	$	10
Commercial real estate		3,232		3,232		479		2,882		102
Consumer real estate		975		975		501		1,230		11
Consumer installment		35		35		26		30		-
Total	$	4,510	$	4,510	$	1,028	$	4,396	$	123
Total Impaired Loans:
Commercial installment	$	268	$	268	$	22	$	257	$	10
Commercial real estate		9,309		9,348		479		7,809		145
Consumer real estate		1,213		1,213		501		1,430		11
Consumer installment		42		42		26		38		-
Total Impaired Loans	$	10,832	$	10,871	$	1,028	$	9,534	$	166

On January 1, 2015, the Company adopted Accounting Standards Update (ASU) 2014-4, Receivables – Troubled Debt Restructuring by Creditors. As of September 30, 2015, the Company had $1.5 million of foreclosed residential real estate property obtained by physical possession and $0.1 million of consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process according to local jurisdictions.

December 31, 2014
							Average		Interest
							Recorded		Income
	Recorded		Unpaid		Related		Investment		Recognized
	Investment		Balance		Allowance		YTD		YTD
	(In thousands)
Impaired loans with no related allowance:
Commercial installment	$	-	$	-	$	-	$	50	$	-
Commercial real estate		4,665		4,665		-		2,654		142
Consumer real estate		27		27		-		179		-
Consumer installment		10		10		-		11		-
Total	$	4,702	$	4,702	$	-	$	2,894	$	142
Impaired loans with a related allowance:
Commercial installment	$	240	$	240	$	18	$	189	$	20
Commercial real estate		2,558		2,558		315		2,415		59
Consumer real estate		2,032		2,032		607		1,546		33
Consumer installment		28		28		28		33		2
Total	$	4,858	$	4,858	$	968	$	4,183	$	114
Total Impaired Loans:
Commercial installment	$	240	$	240	$	18	$	239	$	20
Commercial real estate		7,223		7,223		315		5,069		201
Consumer real estate		2,059		2,059		607		1,725		33
Consumer installment		38		38		28		44		2
Total Impaired Loans	$	9,560	$	9,560	$	968	$	7,077	$	256

Certain loans acquired in transfer not accounted for as debt securities acquired

The following table presents information regarding the contractually required payments receivable, cash flows expected to be collected and the estimated fair value of loans acquired in the BCB acquisition as of July 1, 2014, the closing date of the transaction:

	December 31, 2014
	(In thousands)
	Commercial, financial and agricultural		Mortgage-  Commercial		Mortgage-  Residential		Commercial and other		Total
Contractually required payments	$	1,519	$	29,648	$	7,933	$	976	$	40,076
Cash flows expected to be collected		1,570		37,869		9,697		1,032		50,168
Fair value of loans acquired		1,513		28,875		7,048		957		38,393

Schedule of certain loans acquired in transfer carrying amount and accretable yield for acquired impaired loans

Changes in the carrying amount and accretable yield for acquired impaired loans were as follows at September 30, 2015 and December 31, 2014: (in thousands)

	September 30, 2015				December 31, 2014
	Accretable Yield		Carrying Amount of  Loans		Accretable Yield		Carrying Amount of  Loans
Balance at beginning of period	$	1,417	$	2,063	$	-	$	-
Additions due to BCB acquisition on July 1, 2014		-		-		1,603		2,325
Accretion		(141)		141		(186)		186
Payments received, net		-		(346)		-		(448)
Balance at end of period	$	1,276	$	1,858	$	1,417	$	2,063

Additional Detail of Troubled Debt Restructurings

The following tables provide detail of troubled debt restructurings (TDRs) at September 30, 2015.

For the Three Months Ending September 30, 2015

			Outstanding
	Outstanding		Recorded
	Recorded		Investment				Interest
	Investment		Post-		Number of		Income
	Pre-Modification		Modification		Loans		Recognized
Commercial installment	$	-	$	-		-	$	-
Commercial real estate		269		268		1		3
Consumer real estate		-		-		-		-
Consumer installment		-		-		-		-
Total	$	269	$	268		1	$	3

For the Nine Months Ending September 30, 2015

			Outstanding
	Outstanding		Recorded
	Recorded		Investment				Interest
	Investment		Post-		Number of		Income
	Pre-Modification		Modification		Loans		Recognized
Commercial installment	$	-	$	-		-	$	-
Commercial real estate		269		267		1		3
Consumer real estate		-		-		-		-
Consumer installment		-		-		-		-
Total	$	269	$	267		1	$	3

Summary of Loans Classified as Past Due in Excess of Thirty Days or More and Loans Classified as Non-Accrual

The following tables set forth the amounts and past due status for the Bank TDRs at September 30, 2015 and December 31, 2014:

(in thousands)

	September 30, 2015
	Current Loans		Past Due 30-89		Past Due 90 days and still accruing		Non- accrual		Total
Commercial installment	$	214	$	-	$	-	$	52	$	266
Commercial real estate		1,931		-		-		2,641		4,572
Consumer real estate		728		-		-		1,241		1,969
Consumer installment		9		-		-		31		40
Total	$	2,882	$	-	$	-	$	3,965	$	6,847
Allowance for loan losses	$	112	$	-	$	-	$	177	$	289

(in thousands)

	December 31, 2014
	Current Loans		Past Due 30-89		Past Due 90 days and still accruing		Non- accrual		Total
Commercial installment	$	233	$	-	$	-	$	-	$	233
Commercial real estate		1,685		-		-		2,729		4,414
Consumer real estate		952		622		-		449		2,023
Consumer installment		10		-		-		103		113
Total	$	2,880	$	622	$	-	$	3,281	$	6,783
Allowance for loan losses	$	120	$	11	$	103	$	-	$	234

The following tables summarize by class our loans classified as past due in excess of 30 days or more in addition to those loans classified as non-accrual:

	September 30, 2015
	(In thousands)
	Past Due 30 to 89 Days		Past Due 90 Days or More and Still Accruing		Non- Accrual		Total Past Due and Non- Accrual		Total Loans
Real Estate-construction	$	424	$	-	$	3,244	$	3,668	$	85,769
Real Estate-mortgage		1,009		6		2,141		3,156		265,762
Real Estate-non farm non residential		674		-		2,425		3,099		251,631
Commercial		305		-		106		411		123,872
Lease Financing Rec.		-		-		-		-		2,303
Consumer		93		-		33		126		17,251
Total	$	2,505	$	6	$	7,949	$	10,460	$	746,588

	December 31, 2014
	(In thousands)
	Past Due 30 to 89 Days		Past Due 90 Days or More and Still Accruing		Non- Accrual		Total Past Due and Non- Accrual		Total Loans
Real Estate-construction	$	428	$	-	$	2,747	$	3,175	$	84,935
Real Estate-mortgage		3,208		208		2,164		5,580		256,406
Real Estate-non farm non residential		3,408		461		1,102		4,971		238,601
Commercial		29		-		5		34		106,109
Consumer		90		-		38		128		18,480
Total	$	7,163	$	669	$	6,056	$	13,888	$	704,531

Risk Category of Loans by Class of Loans

As of September 30, 2015 and December 31, 2014, and based on the most recent analysis performed, the risk categories of loans by class of loans (excluding mortgage loans held for sale) were as follows:

($ in thousands)

September 30, 2015

							Commercial,
	Real Estate Commercial		Real Estate Mortgage		Installment and Other		Financial and Agriculture		Total
Pass	$	409,569	$	168,836	$	18,060	$	126,741	$	723,206
Special Mention		4,313		156		-		171		4,640
Substandard		17,260		1,395		82		193		18,930
Doubtful		-		330		-		-		330
Subtotal		431,142		170,717		18,142		127,105		747,106
Less:
Unearned discount		419		74		-		25		518
Loans, net of unearned discount	$	430,723	$	170,643	$	18,142	$	127,080	$	746,588

December 31, 2014

							Commercial,
	Real Estate Commercial		Real Estate Mortgage		Installment and Other		Financial and Agriculture		Total
Pass	$	388,568	$	167,827	$	18,558	$	107,126	$	682,079
Special Mention		4,756		191		-		498		5,445
Substandard		14,727		2,567		90		63		17,447
Doubtful		-		-		-		-		-
Subtotal		408,051		170,585		18,648		107,687		704,971
Less:
Unearned discount		320		82		-		38		440
Loans, net of unearned discount	$	407,731	$	170,503	$	18,648	$	107,649	$	704,531

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RECLASSIFICATION

9 Months Ended

Sep. 30, 2015

Reclassification [Abstract]

RECLASSIFICATION

NOTE K – RECLASSIFICATION

Certain amounts in the 2014 financial statements have been reclassified for comparative purposes to conform to the current period financial statement presentation.

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LOANS

9 Months Ended

Sep. 30, 2015

Loans Receivable, Net [Abstract]

LOANS

NOTE G — LOANS

Loans typically provide higher yields than the other types of earning assets, and, thus, one of the Company's goals is for loans to be the largest category of the Company's earning assets. For the quarter ending September 30, 2015 and December 31, 2014, average loans accounted for 72.8% and 69.9% of average earning assets, respectively. The Company controls and mitigates the inherent credit and liquidity risks through the composition of its loan portfolio.

The following table shows the composition of the loan portfolio by category:

Composition of Loan Portfolio
	September 30, 2015   December 31, 2014
	Amount		Percent of Total			Amount		Percent of Total
	(Dollars in thousands)
Mortgage loans held for sale	$	1,058		0.1	%	$	2,103		0.3	%
Commercial, financial and agricultural		123,872		16.6			106,109		15.0
Real Estate:
Mortgage-commercial		251,631		33.7			238,602		33.8
Mortgage-residential		265,762		35.5			256,406		36.3
Construction		85,769		11.5			84,935		12.0
Lease financing receivable		2,303		.3			-		-
Consumer and other		17,251		2.3			18,479		2.6
Total loans		747,646		100	%		706,634		100	%
Allowance for loan losses		(6,734)					(6,095)
Net loans	$	740,912				$	700,539

In the context of this discussion, a "real estate mortgage loan" is defined as any loan, other than a loan for construction purposes, secured by real estate, regardless of the purpose of the loan. The Company follows the common practice of financial institutions in the Company’s market area of obtaining a security interest in real estate whenever possible, in addition to any other available collateral. This collateral is taken to reinforce the likelihood of the ultimate repayment of the loan and tends to increase the magnitude of the real estate loan portfolio component. Generally, the Company limits its loan-to-value ratio to 80%. Management attempts to maintain a conservative philosophy regarding its underwriting guidelines and believes it will reduce the risk elements of its loan portfolio through strategies that diversify the lending mix.

Loans held for sale consist of mortgage loans originated by the Bank and sold into the secondary market. Commitments from investors to purchase the loans are obtained upon origination.

Activity in the allowance for loan losses for the period was as follows:

(In thousands)

	Three Months		Nine Months
	Ended		Ended
	Sept. 30, 2015		Sept. 30, 2015
Balance at beginning of period	$	6,419	$	6,095
Loans charged-off:
Real Estate		(58)		(407)
Installment and Other		(24)		(87)
Commercial, Financial and Agriculture		(183)		(183)
Total		(265)		(677)
Recoveries on loans previously charged-off:
Real Estate		296		849
Installment and Other		32		56
Commercial, Financial and Agriculture		2		11
Total		330		916
Net recoveries		65		239
Provision for Loan Losses		250		400
Balance at end of period	$	6,734	$	6,734

The following tables represent how the allowance for loan losses is allocated to a particular loan type, as well as the percentage of the category to total loans at September 30, 2015 and December 31, 2014.

 Allocation of the Allowance for Loan Losses

	September 30, 2015
	(Dollars in thousands)
	Amount		% of loans in each category to total loans
Commercial Non Real Estate	$	765		17.1	%
Commercial Real Estate		2,607		57.7
Consumer Real Estate		1,414		22.8
Consumer		137		2.4
Unallocated		1,811		-
Total	$	6,734		100	%

	December 31, 2014
	(Dollars in thousands)
	Amount		% of loans in each category to total loans
Commercial Non Real Estate	$	713		15.3	%
Commercial Real Estate		3,355		57.9
Consumer Real Estate		1,852		24.2
Consumer		175		2.6
Unallocated		-		-
Total	$	6,095		100	%

The following table represents the Company’s impaired loans at September 30, 2015, and December 31, 2014.

	Sept. 30,		December 31,
	2015		2014
	(In thousands)
Impaired Loans:
Impaired loans without a valuation allowance	$	6,322	$	4,702
Impaired loans with a valuation allowance		4,510		4,858
Total impaired loans	$	10,832	$	9,560
Allowance for loan losses on impaired loans at period end		1,028		968
Total nonaccrual loans		7,949		6,056
Past due 90 days or more and still accruing		6		669
Average investment in impaired loans		9,534		7,077

The following table is a summary of interest recognized and cash-basis interest earned on impaired loans:

	Three Months Ended Sept. 30, 2015		Nine Months  Ended  Sept. 30, 2015
Interest income recognized during impairment		-		-
Cash-basis interest income recognized		43		166

The gross interest income that would have been recorded in the period that ended if the nonaccrual loans had been current in accordance with their original terms and had been outstanding throughout the period or since origination, if held for part of the three months and nine months ended September 30, 2015 was $123,000 and $322,000, respectively, and $1,000 and $98,000 for the three months and nine months ended September 30, 2014. The Company had no loan commitments to borrowers in non-accrual status at September 30, 2015 and December 31, 2014.

The following tables provide the ending balances in the Company's loans (excluding mortgage loans held for sale) and allowance for loan losses, broken down by portfolio segment as of September 30, 2015 and December 31, 2014. The tables also provide additional detail as to the amount of our loans and allowance that correspond to individual versus collective impairment evaluation. The impairment evaluation corresponds to the Company's systematic methodology for estimating its Allowance for Loan Losses.

September 30, 2015

					Commercial,
			Installment		Financial
	Real Estate		and Other		and Agriculture		Total
	(In thousands)
Loans
Individually evaluated	$	10,522	$	42	$	268	$	10,832
Collectively evaluated		590,844		18,100		126,812		735,756
Total	$	601,366	$	18,142	$	127,080	$	746,588
Allowance for Loan Losses
Individually evaluated	$	980	$	26	$	22	$	1,028
Collectively evaluated		3,292		1,672		742		5,706
Total	$	4,272	$	1,698	$	764	$	6,734

December 31, 2014

					Commercial,
			Installment		Financial
	Real Estate		and Other		and Agriculture		Total
	(In thousands)
Loans
Individually evaluated	$	9,282	$	38	$	240	$	9,560
Collectively evaluated		568,952		18,610		107,409		694,971
Total	$	578,234	$	18,648	$	107,649	$	704,531
Allowance for Loan Losses
Individually evaluated	$	922	$	29	$	17	$	968
Collectively evaluated		4,285		146		696		5,127
Total	$	5,207	$	175	$	713	$	6,095

The following tables provide additional detail of impaired loans broken out according to class as of September 30, 2015 and December 31, 2014. The recorded investment included in the following tables represent customer balances net of any partial charge-offs recognized on the loans, net of any deferred fees and costs. As nearly all of our impaired loans at September 30, 2015, are on nonaccrual status, recorded investment excludes any insignificant amount of accrued interest receivable on loans 90-days or more past due and still accruing. The unpaid balance represents the recorded balance prior to any partial charge-offs.

September 30, 2015
							Average		Interest
							Recorded		Income
	Recorded		Unpaid		Related		Investment		Recognized
	Investment		Balance		Allowance		YTD		YTD
	(In thousands)
Impaired loans with no related allowance:
Commercial installment	$	-	$	-	$	-	$	3	$	-
Commercial real estate		6,077		6,116		-		4,927		43
Consumer real estate		238		238		-		200		-
Consumer installment		7		7		-		8		-
Total	$	6,322	$	6,361	$	-	$	5,138	$	43
Impaired loans with a related allowance:
Commercial installment	$	268	$	268	$	22	$	254	$	10
Commercial real estate		3,232		3,232		479		2,882		102
Consumer real estate		975		975		501		1,230		11
Consumer installment		35		35		26		30		-
Total	$	4,510	$	4,510	$	1,028	$	4,396	$	123
Total Impaired Loans:
Commercial installment	$	268	$	268	$	22	$	257	$	10
Commercial real estate		9,309		9,348		479		7,809		145
Consumer real estate		1,213		1,213		501		1,430		11
Consumer installment		42		42		26		38		-
Total Impaired Loans	$	10,832	$	10,871	$	1,028	$	9,534	$	166

On January 1, 2015, the Company adopted Accounting Standards Update (ASU) 2014-4, Receivables – Troubled Debt Restructuring by Creditors. As of September 30, 2015, the Company had $1.5 million of foreclosed residential real estate property obtained by physical possession and $0.1 million of consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process according to local jurisdictions.

December 31, 2014
							Average		Interest
							Recorded		Income
	Recorded		Unpaid		Related		Investment		Recognized
	Investment		Balance		Allowance		YTD		YTD
	(In thousands)
Impaired loans with no related allowance:
Commercial installment	$	-	$	-	$	-	$	50	$	-
Commercial real estate		4,665		4,665		-		2,654		142
Consumer real estate		27		27		-		179		-
Consumer installment		10		10		-		11		-
Total	$	4,702	$	4,702	$	-	$	2,894	$	142
Impaired loans with a related allowance:
Commercial installment	$	240	$	240	$	18	$	189	$	20
Commercial real estate		2,558		2,558		315		2,415		59
Consumer real estate		2,032		2,032		607		1,546		33
Consumer installment		28		28		28		33		2
Total	$	4,858	$	4,858	$	968	$	4,183	$	114
Total Impaired Loans:
Commercial installment	$	240	$	240	$	18	$	239	$	20
Commercial real estate		7,223		7,223		315		5,069		201
Consumer real estate		2,059		2,059		607		1,725		33
Consumer installment		38		38		28		44		2
Total Impaired Loans	$	9,560	$	9,560	$	968	$	7,077	$	256

Loans acquired with deteriorated credit quality are those purchased in the BCB Holding Company, Inc. acquisition (See Note C -Business Combination for further information). These loans were recorded at estimated fair value at the acquisition date with no carryover of the related allowance for loan losses. The acquired loans were segregated as of the acquisition date between those considered to be performing (acquired non-impaired loans) and those with evidence of credit deterioration (acquired impaired loans). Acquired loans are considered impaired if there is evidence of credit deterioration and if it is probable, at acquisition, all contractually required payments will not be collected.

The following table presents information regarding the contractually required payments receivable, cash flows expected to be collected and the estimated fair value of loans acquired in the BCB acquisition as of July 1, 2014, the closing date of the transaction:

	December 31, 2014
	(In thousands)
	Commercial, financial and agricultural		Mortgage-  Commercial		Mortgage-  Residential		Commercial and other		Total
Contractually required payments	$	1,519	$	29,648	$	7,933	$	976	$	40,076
Cash flows expected to be collected		1,570		37,869		9,697		1,032		50,168
Fair value of loans acquired		1,513		28,875		7,048		957		38,393

Total outstanding acquired impaired loans were $3,133,976 as of September 30, 2015 and $3,480,190 as of December 31, 2014. The outstanding balance of these loans is the undiscounted sum of all amounts, including amounts deemed principal, interest, fees, penalties, and other under the loans, owed at the reporting date, whether or not currently due and whether or not any such amounts have been charged off.

Changes in the carrying amount and accretable yield for acquired impaired loans were as follows at September 30, 2015 and December 31, 2014: (in thousands)

	September 30, 2015				December 31, 2014
	Accretable Yield		Carrying Amount of  Loans		Accretable Yield		Carrying Amount of  Loans
Balance at beginning of period	$	1,417	$	2,063	$	-	$	-
Additions due to BCB acquisition on July 1, 2014		-		-		1,603		2,325
Accretion		(141)		141		(186)		186
Payments received, net		-		(346)		-		(448)
Balance at end of period	$	1,276	$	1,858	$	1,417	$	2,063

The following tables provide detail of troubled debt restructurings (TDRs) at September 30, 2015.

For the Three Months Ending September 30, 2015

			Outstanding
	Outstanding		Recorded
	Recorded		Investment				Interest
	Investment		Post-		Number of		Income
	Pre-Modification		Modification		Loans		Recognized
Commercial installment	$	-	$	-		-	$	-
Commercial real estate		269		268		1		3
Consumer real estate		-		-		-		-
Consumer installment		-		-		-		-
Total	$	269	$	268		1	$	3

For the Nine Months Ending September 30, 2015

			Outstanding
	Outstanding		Recorded
	Recorded		Investment				Interest
	Investment		Post-		Number of		Income
	Pre-Modification		Modification		Loans		Recognized
Commercial installment	$	-	$	-		-	$	-
Commercial real estate		269		267		1		3
Consumer real estate		-		-		-		-
Consumer installment		-		-		-		-
Total	$	269	$	267		1	$	3

There were no TDRs that were modified during the three month period ending September 30, 2015, that had subsequently violated the terms of the modification.

The balance of troubled debt restructurings (TDRs) was $6.8 million at September 30, 2015 and December 31, 2014, respectively, calculated for regulatory reporting purposes. As of September 30, 2015, the company had no additional amount committed on any loan classified as troubled debt restructuring.

The following tables set forth the amounts and past due status for the Bank TDRs at September 30, 2015 and December 31, 2014:

(in thousands)

	September 30, 2015
	Current Loans		Past Due 30-89		Past Due 90 days and still accruing		Non- accrual		Total
Commercial installment	$	214	$	-	$	-	$	52	$	266
Commercial real estate		1,931		-		-		2,641		4,572
Consumer real estate		728		-		-		1,241		1,969
Consumer installment		9		-		-		31		40
Total	$	2,882	$	-	$	-	$	3,965	$	6,847
Allowance for loan losses	$	112	$	-	$	-	$	177	$	289

(in thousands)

	December 31, 2014
	Current Loans		Past Due 30-89		Past Due 90 days and still accruing		Non- accrual		Total
Commercial installment	$	233	$	-	$	-	$	-	$	233
Commercial real estate		1,685		-		-		2,729		4,414
Consumer real estate		952		622		-		449		2,023
Consumer installment		10		-		-		103		113
Total	$	2,880	$	622	$	-	$	3,281	$	6,783
Allowance for loan losses	$	120	$	11	$	103	$	-	$	234

The following tables summarize by class our loans classified as past due in excess of 30 days or more in addition to those loans classified as non-accrual:

	September 30, 2015
	(In thousands)
	Past Due 30 to 89 Days		Past Due 90 Days or More and Still Accruing		Non- Accrual		Total Past Due and Non- Accrual		Total Loans
Real Estate-construction	$	424	$	-	$	3,244	$	3,668	$	85,769
Real Estate-mortgage		1,009		6		2,141		3,156		265,762
Real Estate-non farm non residential		674		-		2,425		3,099		251,631
Commercial		305		-		106		411		123,872
Lease Financing Rec.		-		-		-		-		2,303
Consumer		93		-		33		126		17,251
Total	$	2,505	$	6	$	7,949	$	10,460	$	746,588

	December 31, 2014
	(In thousands)
	Past Due 30 to 89 Days		Past Due 90 Days or More and Still Accruing		Non- Accrual		Total Past Due and Non- Accrual		Total Loans
Real Estate-construction	$	428	$	-	$	2,747	$	3,175	$	84,935
Real Estate-mortgage		3,208		208		2,164		5,580		256,406
Real Estate-non farm non residential		3,408		461		1,102		4,971		238,601
Commercial		29		-		5		34		106,109
Consumer		90		-		38		128		18,480
Total	$	7,163	$	669	$	6,056	$	13,888	$	704,531

The Company 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. The Company uses the following definitions for risk ratings, which are consistent with the definitions used in supervisory guidance:

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 Company’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 obligor 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 full, 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.

As of September 30, 2015 and December 31, 2014, and based on the most recent analysis performed, the risk categories of loans by class of loans (excluding mortgage loans held for sale) were as follows:

($ in thousands)

September 30, 2015

							Commercial,
	Real Estate Commercial		Real Estate Mortgage		Installment and Other		Financial and Agriculture		Total
Pass	$	409,569	$	168,836	$	18,060	$	126,741	$	723,206
Special Mention		4,313		156		-		171		4,640
Substandard		17,260		1,395		82		193		18,930
Doubtful		-		330		-		-		330
Subtotal		431,142		170,717		18,142		127,105		747,106
Less:
Unearned discount		419		74		-		25		518
Loans, net of unearned discount	$	430,723	$	170,643	$	18,142	$	127,080	$	746,588

December 31, 2014

							Commercial,
	Real Estate Commercial		Real Estate Mortgage		Installment and Other		Financial and Agriculture		Total
Pass	$	388,568	$	167,827	$	18,558	$	107,126	$	682,079
Special Mention		4,756		191		-		498		5,445
Substandard		14,727		2,567		90		63		17,447
Doubtful		-		-		-		-		-
Subtotal		408,051		170,585		18,648		107,687		704,971
Less:
Unearned discount		320		82		-		38		440
Loans, net of unearned discount	$	407,731	$	170,503	$	18,648	$	107,649	$	704,531

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EARNINGS APPLICABLE TO COMMON STOCKHOLDERS

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

EARNINGS APPLICABLE TO COMMON STOCKHOLDERS

NOTE E — EARNINGS APPLICABLE TO COMMON STOCKHOLDERS

Basic per share data is calculated based on the weighted-average number of common shares outstanding during the reporting period. Diluted per share data includes any dilution from potential common stock outstanding, such as stock options.

	For the Three Months Ended
	September 30, 2015
	Net Income		Shares		Per
	(Numerator)		(Denominator)		Share Data
Basic per share	$	2,141,000		5,374,790	$	0.40
Effect of dilutive shares:
Restricted stock grants				67,190
Diluted per share	$	2,141,000		5,441,980	$	0.39

	For the Nine Months Ended
	September 30, 2015
	Net Income		Shares		Per
	(Numerator)		(Denominator)		Share Data
Basic per share	$	6,184,000		5,369,260	$	1.15
Effect of dilutive shares:
Restricted stock grants				67,190
Diluted per share	$	6,184,000		5,436,450	$	1.14

	For the Three Months Ended
	September 30, 2014
	Net Income		Shares		Per
	(Numerator)		(Denominator)		Share Data
Basic per share	$	1,448,000		5,311,876	$	.27
Effect of dilutive shares:
Restricted stock grants				37,810
Diluted per share	$	1,448,000		5,349,686	$	.27

	For the Nine Months Ended
	September 30, 2014
	Net Income		Shares		Per
	(Numerator)		(Denominator)		Share Data
Basic per share	$	4,296,000		5,198,776	$	.83
Effect of dilutive shares:
Restricted stock grants				37,810
Diluted per share	$	4,296,000		5,236,586	$	.82

The Company granted 67,077 shares of restricted stock in the first quarter of 2015, -0- shares during the second and 2,250 shares during the third quarter of 2015.

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FAIR VALUE OF ASSETS AND LIABILITIES

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

FAIR VALUE OF ASSETS AND LIABILITIES

NOTE F — FAIR VALUE OF ASSETS AND LIABILITIES

The Company groups its financial assets measured at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:

Level 1:	Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.
Level 2:	Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets or liabilities which use observable inputs other than Level 1 prices, such as quoted 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 for substantially the full term of the assets and liabilities.
Level 3:	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the accompanying balance sheets.

Available-for-Sale Securities

The fair value of available-for-sale securities is determined by various valuation methodologies. Where quoted market prices are available in an active market, securities are classified within Level 1. If quoted market prices are not available, then fair values are estimated by using pricing models or quoted prices of securities with similar characteristics. Level 2 securities include U.S. Treasury securities, obligations of U.S. government corporations and agencies, obligations of states and political subdivisions, mortgage-backed securities and collateralized mortgage obligations. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

The following table presents the Company’s assets that are measured at fair value on a recurring basis and the level within the hierarchy in which the fair value measurements fell as of September 30, 2015 and December 31, 2014 (in thousands):

September 30, 2015

(Dollars in thousands)			Fair Value Measurements Using
			Quoted Prices
			in
			Active
			Markets		Significant
			For		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Obligations of U. S. Government Agencies	$	19,731	$	-	$	19,731	$	-
Municipal securities		94,350		-		94,350		-
Mortgage-backed securities		99,384		-		99,384		-
Corporate obligations		25,201		-		22,554		2,647
Other		965		965		-		-
Total	$	239,631	$	965	$	236,019	$	2,647

December 31, 2014

(Dollars in thousands)			Fair Value Measurements Using
			Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Obligations of U. S. Government Agencies	$	27,372	$	-	$	27,372	$	-
Municipal securities		104,582		-		104,582		-
Mortgage-backed securities		93,036		-		93,036		-
Corporate obligations		28,784		-		25,983		2,801
Other		972		972		-		-
Total	$	254,746	$	972	$	250,973	$	2,801

The following is a reconciliation of activity for assets measured at fair value based on significant unobservable (non-market) information.

	Bank-Issued
	Trust
	Preferred
(Dollars in thousands)	Securities
	2015		2014
Balance, January 1	$	2,801	$	2,798
Transfers into Level 3		-		-
Transfers out of Level 3		-		-
Other-than-temporary impairment loss included in earnings (loss)		-		-
Unrealized gain (loss) included in comprehensive income		(154)		3
Balance at September 30, 2015 and December 31, 2014	$	2,647	$	2,801

The following table presents quantitative information about recurring Level 3 fair value measurements (in thousands):

				Significant
Trust Preferred	Fair		Valuation	Unobservable	Range of
Securities	Value		Technique	Inputs	Inputs
September 30, 2015		2,647	Discounted cash flow	Probability of default	.88% - 2.58%
December 31, 2014		2,801	Discounted cash flow	Probability of default	.79% - 2.49%

Following is a description of the valuation methodologies used for assets measured at fair value on a non-recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

Impaired Loans

Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. Allowable methods for estimating fair value include using the fair value of the collateral for collateral dependent loans or, where a loan is determined not to be collateral dependent, using the discounted cash flow method.

If the impaired loan is identified as collateral dependent, then the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. If the impaired loan is determined not to be collateral dependent, then the discounted cash flow method is used. This method requires the impaired loan to be recorded at the present value of expected future cash flows discounted at the loan’s effective interest rate. The effective interest rate of a loan is the contractual interest rate adjusted for any net deferred loan fees or costs, or premium or discount existing at origination or acquisition of the loan. Impaired loans are classified within Level 2 of the fair value hierarchy.

Other Real Estate Owned

Other real estate owned acquired through loan foreclosure is initially recorded at fair value less estimated costs to sell, establishing a new cost basis. The adjustment at the time of foreclosure is recorded through the allowance for loan losses. Due to the subjective nature of establishing the fair value, the actual fair value of the other real estate owned or foreclosed asset could differ from the original estimate. If it is determined the fair value declines subsequent to foreclosure, a valuation allowance is recorded through non-interest expense. Operating costs associated with the assets are also recorded as non-interest expense. Gains and losses on the disposition of other real estate owned and foreclosed assets are netted and posted to other non-interest expense. Other real estate owned measured at fair value on a non-recurring basis at September 30, 2015, amounted to $4.1 million. Other real estate owned is classified within Level 2 of the fair value hierarchy.

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fell at September 30, 2015 and December 31, 2014.

($ in thousands)

September 30, 2015

			Fair Value Measurements Using
			Quoted
			Prices in
			Active
			Markets		Significant
			For		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	10,832	$	-	$	10,832	$	-
Other real estate owned		4,104		-		4,104		-

December 31, 2014

			Fair Value Measurements Using
			Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	9,560	$	-	$	9,560	$	-
Other real estate owned		4,655		-		4,655		-

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value:

Cash and Cash Equivalents – For such short-term instruments, the carrying amount is a reasonable estimate of fair value.

Investment in securities available-for-sale and held-to-maturity – The fair value measurement for securities available-for-sale was discussed earlier. The same measurement approach was used for securities held-to-maturity.

Loans – The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Bank-Owned Life Insurance– The fair value of bank-owned life insurance approximates the carrying amount, because upon liquidation of these investments, the Company would receive the cash surrender value which equals the carrying amount.

Deposits – The fair values of demand deposits are, as required by ASC Topic 825, equal to the carrying value of such deposits. Demand deposits include noninterest-bearing demand deposits, savings accounts, NOW accounts, and money market demand accounts. The fair value of variable rate term deposits, those repricing within six months or less, approximates the carrying value of these deposits. Discounted cash flows have been used to value fixed rate term deposits and variable rate term deposits repricing after six months. The discount rate used is based on interest rates currently being offered on comparable deposits as to amount and term.

Short-Term Borrowings – The carrying value of any federal funds purchased and other short-term borrowings approximates their fair values.

FHLB and Other Borrowings – The fair value of the fixed rate borrowings are estimated using discounted cash flows, based on current incremental borrowing rates for similar types of borrowing arrangements. The carrying amount of any variable rate borrowing approximates its fair value.

Subordinated Debentures – The subordinated debentures bear interest at a variable rate and the carrying value approximates the fair value.

Off-Balance Sheet Instruments – Fair values of off-balance sheet financial instruments are based on fees charged to enter into similar agreements. However, commitments to extend credit do not represent a significant value until such commitments are funded or closed. Management has determined that these instruments do not have a distinguishable fair value and no fair value has been assigned.

As of September 30, 2015 ($ in thousands)					Fair Value Measurements
	Carrying Amount		Estimated Fair Value		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Instruments:
Assets:
Cash and cash equivalents	$	65,233	$	65,233	$	65,233	$	-	$	-
Securities available-for- sale		239,631		239,631		965		236,019		2,647
Securities held- to-maturity		7,233		8,651		-		8,651		-
Other securities		6,249		6,249		-		6,249		-
Loans, net		740,912		758,614		-		-		758,614
Bank-owned life insurance		14,771		14,771		-		14,771		-
Liabilities:
Noninterest- bearing deposits	$	187,542	$	187,542	$	-	$	187,542	$	-
Interest-bearing deposits		776,298		775,760		-		775,760		-
Subordinated debentures		10,310		10,310		-		-		10,310
FHLB and other borrowings		58,986		58,986		-		58,986		-

As of December 31, 2014 ($ in thousands)					Fair Value Measurements
	Carrying Amount		Estimated Fair Value		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Instruments:
Assets:
Cash and cash equivalents	$	44,618	$	44,618	$	44,618	$	-	$	-
Securities available-for- sale		254,746		254,746		972		250,973		2,801
Securities held- to-maturity		8,193		9,994		-		9,994		-
Other securities		7,235		7,235		-		7,235		-
Loans, net		700,539		715,849		-		-		715,849
Bank-owned life insurance		14,463		14,463		-		14,463		-
Liabilities:
Noninterest- bearing deposits	$	201,362	$	201,362	$	-	$	201,362	$	-
Interest-bearing deposits		691,413		691,036		-		691,036		-
Subordinated debentures		10,310		10,310		-		-		10,310
FHLB and other borrowings		89,450		89,450		-		89,450		-

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SECURITIES

9 Months Ended

Sep. 30, 2015

Securities [Abstract]

SECURITIES

NOTE H — SECURITIES

The following disclosure of the estimated fair value of financial instruments is made in accordance with authoritative guidance. The estimated fair value amounts have been determined using available market information and appropriate valuation methodologies. However, considerable judgment is necessarily required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

A summary of the amortized cost and estimated fair value of available-for-sale securities and held-to-maturity securities at September 30, 2015, follows:

($ in thousands)

	September 30, 2015
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
Available-for-sale securities:
Obligations of U.S. Government Agencies	$	19,518	$	213	$	-	$	19,731
Tax-exempt and taxable obligations of states and municipal subdivisions		92,465		2,103		218		94,350
Mortgage-backed securities		97,771		1,672		59		99,384
Corporate obligations		26,311		136		1,246		25,201
Other		1,255		-		290		965
Total	$	237,320	$	4,124	$	1,813	$	239,631
Held-to-maturity securities:
Mortgage-backed securities	$	1,233	$	33	$	-	$	1,266
Taxable obligations of states and municipal subdivisions		6,000		1,385		-		7,385
Total	$	7,233	$	1,418	$	-	$	8,651

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Quantitative Information About Recurring Level 3 Fair Value Measurements (Detail) - Fair Value Inut Level 3 - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Quantitative Information About Recurring Fair Value Measurements [Line Items]
Fair Value	$ 2,647	$ 2,801
Valuation Technique	Discounted cash flow	Discounted cash flow
Significant Unobservable Inputs	Probability of default	Probability of default
Range of Inputs, Minimum	0.88%	0.79%
Range of Inputs, Maximum	2.58%	2.49%

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Loans - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Financing Receivable, Recorded Investment [Line Items]
Percentage of loan portfolio to earning assets			72.80%		69.90%
Loan to value ratio	80.00%		80.00%
Troubled debt restructurings, balance	$ 6,800,000		$ 6,800,000		$ 6,800,000
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Outstanding Balance	3,133,976		3,133,976		$ 3,480,190
Foreclosed Real Estate Expense			1,500,000
Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Non- Accrual	123,000	$ 1,000	322,000	$ 98,000
Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Mortgage Loans on Real Estate, Commercial and Consumer, Net, Total	$ 100,000		$ 100,000

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EARNINGS APPLICABLE TO COMMON STOCKHOLDERS (Tables)

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Weighted-Average Number of Common Shares Outstanding

Basic per share data is calculated based on the weighted-average number of common shares outstanding during the reporting period. Diluted per share data includes any dilution from potential common stock outstanding, such as stock options.

	For the Three Months Ended
	September 30, 2015
	Net Income		Shares		Per
	(Numerator)		(Denominator)		Share Data
Basic per share	$	2,141,000		5,374,790	$	0.40
Effect of dilutive shares:
Restricted stock grants				67,190
Diluted per share	$	2,141,000		5,441,980	$	0.39

	For the Nine Months Ended
	September 30, 2015
	Net Income		Shares		Per
	(Numerator)		(Denominator)		Share Data
Basic per share	$	6,184,000		5,369,260	$	1.15
Effect of dilutive shares:
Restricted stock grants				67,190
Diluted per share	$	6,184,000		5,436,450	$	1.14

	For the Three Months Ended
	September 30, 2014
	Net Income		Shares		Per
	(Numerator)		(Denominator)		Share Data
Basic per share	$	1,448,000		5,311,876	$	.27
Effect of dilutive shares:
Restricted stock grants				37,810
Diluted per share	$	1,448,000		5,349,686	$	.27

	For the Nine Months Ended
	September 30, 2014
	Net Income		Shares		Per
	(Numerator)		(Denominator)		Share Data
Basic per share	$	4,296,000		5,198,776	$	.83
Effect of dilutive shares:
Restricted stock grants				37,810
Diluted per share	$	4,296,000		5,236,586	$	.82

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Business Combination - Additional Information (Detail) - USD ($)		3 Months Ended	9 Months Ended
	Mar. 03, 2014	Sep. 30, 2015	Sep. 30, 2015	Dec. 31, 2014
Business Acquisition [Line Items]
Cash payment price per share	$ 0.40
Shares issued, price per share	$ 2.25
Business Acquisition Purchase Price Allocation Loans Receivable		$ 40,100,000	$ 40,100,000
Business Combination Fair Value Adjustments Loans			1,700,000
Goodwill, Acquired During Period			1,700,000
Other Accrued Liabilities	$ 174,000
Other Liabilities		2,859,000	2,859,000	$ 4,701,000
Contingent Value Right [Member]
Business Acquisition [Line Items]
Other Payments to Acquire Businesses		8,000
Other Liabilities		$ 166,000	$ 166,000
Minimum
Business Acquisition [Line Items]
Payments to acquire businesses, gross	6,200,000
Maximum
Business Acquisition [Line Items]
Payments to acquire businesses, gross	$ 6,600,000
Core Deposits
Business Acquisition [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life			10 years
Outstanding Prior To August 1, 2013
Business Acquisition [Line Items]
Shares issued, price per share	$ 3.60
BCB Holding Company, Inc
Business Acquisition [Line Items]
Finite-lived Intangible Assets Acquired			$ 200,000

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Summary of Loans Classified as Past Due in Excess of Thirty Days or More and Loans Classified as Non-Accrual (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due 30 to 89 Days	$ 2,505	$ 7,163
Past Due 90 Days Or More and Still Accruing	6	669
Non- Accrual	7,949	6,056
Total Past Due and Non- Accrual	10,460	13,888
Total Loans	746,588	704,531
Financing Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due 30 to 89 Days	0
Past Due 90 Days Or More and Still Accruing	0
Non- Accrual	0
Total Past Due and Non- Accrual	0
Total Loans	2,303	0
Real Estate-construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due 30 to 89 Days	424	428
Past Due 90 Days Or More and Still Accruing	0	0
Non- Accrual	3,244	2,747
Total Past Due and Non- Accrual	3,668	3,175
Total Loans	85,769	84,935
Real Estate-mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due 30 to 89 Days	1,009	3,208
Past Due 90 Days Or More and Still Accruing	6	208
Non- Accrual	2,141	2,164
Total Past Due and Non- Accrual	3,156	5,580
Total Loans	265,762	256,406
Real Estate-non farm non residential
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due 30 to 89 Days	674	3,408
Past Due 90 Days Or More and Still Accruing	0	461
Non- Accrual	2,425	1,102
Total Past Due and Non- Accrual	3,099	4,971
Total Loans	251,631	238,601
Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due 30 to 89 Days	305	29
Past Due 90 Days Or More and Still Accruing	0	0
Non- Accrual	106	5
Total Past Due and Non- Accrual	411	34
Total Loans	123,872	106,109
Consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due 30 to 89 Days	93	90
Past Due 90 Days Or More and Still Accruing	0	0
Non- Accrual	33	38
Total Past Due and Non- Accrual	126	128
Total Loans	$ 17,251	$ 18,480

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Impaired Loans (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Impaired Loans:
Impaired loans without a valuation allowance	$ 6,322	$ 4,702
Impaired loans with a valuation allowance	4,510	4,858
Total impaired loans	10,832	9,560
Allowance for loan losses on impaired loans at period End	1,028	968
Total nonaccrual loans	7,949	6,056
Past due 90 days or more and still accruing	6	669
Average investment in impaired loans	$ 9,534	$ 7,077

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net income per consolidated statements of income	$ 2,227	$ 1,533	$ 6,441	$ 4,573
Other Comprehensive Income(Loss):
Unrealized holding gains (losses) arising during the period on available-for-sale securities	1,579	574	(431)	3,467
Unrealized holding gains on loans held for sale	45	18	6	119
Income tax benefit (expense)	(554)	(205)	144	(1,223)
Other Comprehensive Income (Loss)	1,070	387	(281)	2,363
Comprehensive Income	$ 3,297	$ 1,920	$ 6,160	$ 6,936

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SUMMARY OF ORGANIZATION

9 Months Ended

Sep. 30, 2015

Summary Of Organization [Abstract]

SUMMARY OF ORGANIZATION

NOTE B — SUMMARY OF ORGANIZATION

The First Bancshares, Inc., Hattiesburg, Mississippi (the "Company"), was incorporated June 23, 1995, under the laws of the State of Mississippi for the purpose of operating as a bank holding company. The Company’s primary asset is its interest in its wholly-owned subsidiary, The First, A National Banking Association (the “Bank”).

At September 30, 2015, the Company had approximately $1.1 billion in assets, $740.9 million in net loans, $963.8 million in deposits, and $101.6 million in stockholders' equity. For the nine months ended September 30, 2015, the Company reported net income of $6.4 million ($6.2 million applicable to common stockholders).

In the first, second and third quarters of 2015, the Company declared and paid a dividend of $.0375 per common share.

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Summary of Acquired Identifiable Assets and Liabilities (Detail) $ in Thousands	Sep. 30, 2015 USD ($)
Purchase price:
Cash and fair value of common stock	$ 6,300
Total purchase price	6,300
Identifiable assets:
Cash and due from banks	8,307
Investments	23,423
Loans and leases	38,393
Other Real Estate	571
Core deposit intangible	225
Personal and real property	3,670
Deferred tax asset	2,502
Other assets	305
Total assets	77,396
Liabilities and equity:
Deposits	59,321
Borrowed funds	13,104
Other liabilities	326
Total liabilities	72,751
Net assets acquired	4,645
Goodwill resulting from acquisition	$ 1,655

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Composition of Loan Portfolio (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for sale	$ 746,588		$ 704,531
Total loans	740,900		706,634
Allowance for loan losses	(6,734)	$ (6,419)	(6,095)
Loans, net	$ 740,912		$ 700,539
Percent of loan to total loan portfolio	100.00%		100.00%
Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for sale	$ 2,303		$ 0
Percent of loan to total loan portfolio	0.30%		0.00%
Mortgage loans held for sale
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for sale	$ 1,058		$ 2,103
Percent of loan to total loan portfolio	0.10%		0.30%
Commercial, financial and agricultural
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for sale	$ 123,872		$ 106,109
Percent of loan to total loan portfolio	16.60%		15.00%
Mortgage-commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for sale	$ 251,631		$ 238,602
Percent of loan to total loan portfolio	33.70%		33.80%
Mortgage-residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for sale	$ 265,762		$ 256,406
Percent of loan to total loan portfolio	35.50%		36.30%
Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for sale	$ 85,769		$ 84,935
Percent of loan to total loan portfolio	11.50%		12.00%
Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for sale	$ 17,251		$ 18,479
Percent of loan to total loan portfolio	2.30%		2.60%

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BUSINESS COMBINATION (Tables)

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The amounts of the acquired identifiable assets and liabilities as of the acquisition date were as follows(dollars in thousands):

Purchase price:
Cash and fair value of common stock	$	6,300
Total purchase price		6,300
Identifiable assets:
Cash and due from banks		8,307
Investments		23,423
Loans and leases		38,393
Other Real Estate		571
Core deposit intangible		225
Personal and real property		3,670
Deferred tax asset		2,502
Other assets		305
Total assets		77,396
Liabilities and equity:
Deposits		59,321
Borrowed funds		13,104
Other liabilities		326
Total liabilities		72,751
Net assets acquired		4,645
Goodwill resulting from acquisition	$	1,655

Business Combination, Separately Recognized Transactions

The outstanding principal balance and the carrying amount of these loans included in the consolidated balance sheet at September 30, 2015, are as follows: (dollars in thousands):

Outstanding principal balance	$	28,841
Carrying amount		27,012