The First Bancshares, Inc. (OTCMKTS:FBSI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement

Agreement and Plan of Merger

Merger. On November 6, 2018, The First Bancshares, Inc., a Mississippi corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with FPB Financial Corp., a Louisiana corporation (“FPB”), whereby FPB will be merged with and into the Company (the “Merger”). to and simultaneously with entering into the Merger Agreement, the Company’s wholly owned subsidiary bank, The First, A National Banking Association (“The First”), and FPB’s wholly owned subsidiary bank, Florida Parishes Bank, entered into a Plan of Merger and Merger Agreement whereby Florida Parishes Bank will be merged with and into The First immediately following the merger of FPB with and into the Company (the “Bank Merger”).

The Merger Agreement has been unanimously approved by the boards of directors of the Company and FPB. The transaction is expected to close in the first quarter of 2019, subject to customary conditions discussed below.

Merger Consideration. to the Merger Agreement, each outstanding share of FPB stock issued and outstanding immediately prior to the effective time of the Merger will be converted into the right to receive 0.83 (the “Exchange Ratio”) shares of the Company’s common stock, provided that the Exchange Ratio is subject to adjustment in accordance with the terms of the Merger Agreement in the event that the average closing price of a share of the Company’s Common Stock on the NASDAQ Global Select Market over the ten (10) trading days ending five (5) Business Days immediately prior to the Closing Date (the “Measurement Price”) is either less than $34.61 or greater than $43.39. FPB will use its best efforts to amend the terms of the outstanding in-the-money warrants to purchase shares of FPB common stock such that the warrants will be converted into the right to receive an amount of cash, without interest, equal to the product of (i) the total number of shares of FPB common stock subject to such warrant times (ii) the excess, if any, of (A) the product of the Measurement Price multiplied by the Exchange Ratio, over (B) the exercise price per share of FPB common stock under such warrant, less applicable Taxes required to be withheld with respect to such payment. Any warrants to purchase FPB common stock that are not effectively amended or exercised will be assumed by FBMS, subject to adjustment in accordance with the terms of the Merger Agreement.

Each outstanding share of the Company’s common stock shall remain outstanding and unaffected by the Merger.

Representations and Warranties. The Merger Agreement contains usual and customary representations and warranties that the Company and FPB made to each other as of specific dates. The assertions embodied in those representations and warranties were made solely for purposes of the contract between the Company and FPB and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating certain terms. Moreover, certain of the representations and warranties are subject to a contractual standard of materiality that may be different from what may be viewed as material to shareholders, and the representations and warranties may have been used to allocate risk between the Company and FPB rather than establishing matters of fact.

Covenants; No Solicitation. Each party also has agreed to customary covenants, including, among others, covenants relating to the conduct of its business during the interim period between the execution of the Merger Agreement and the consummation of the Merger. Additionally, FPB has agreed (i) not to initiate, solicit, induce or knowingly encourage or take any action or facilitate any alternative acquisition transaction or, subject to certain exceptions, participate in discussions or negotiations regarding, or furnish any non-public information relating to, any alternative acquisition transaction or (ii) subject to certain exceptions, not to withdraw or modify in a manner adverse to the Company, the recommendation of the FPB board of directors that FPB’s shareholders approve the Merger Agreement and the Merger. In the event that FPB receives a proposal with respect to an alternative acquisition transaction that the FPB board of directors determines is superior to the Merger, the Company will have an opportunity to match the terms of such proposal, subject to certain requirements.

Conditions to Closing. Consummation of the Merger is subject to various customary conditions, including (i) approval of the Merger Agreement and the Merger by shareholders of FPB; (ii) the receipt of certain regulatory approvals; (iii) no injunctions or other legal restraints preventing the consummation of the Merger; (iv)the U.S. Securities and Exchange Commission (“SEC”) having declared effective the Company’s registration statement covering the issuance of shares of the Company’s common stock in the Merger; (v)the receipt by each party of a tax opinion to the effect that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended; (vi) the accuracy of representations and warranties of the parties and compliance by the parties with their respective covenants and obligations under the Merger Agreement (subject to customary materiality qualifiers); and (vii) the absence of a material adverse effect with respect to the either the Company or FPB.

Termination. The Merger Agreement may be terminated in certain circumstances, including: (i) by mutual written agreement of the parties, (ii) by either party if any regulatory approval required for consummation of the transactions contemplated by the Merger Agreement has been denied by final non-appealable action by the relevant governmental authority or an application for such approval has been permanently withdrawn at the request of a governmental authority, (iii) by either party if the approval of the shareholders of FPB is not obtained, (iv) by either party in the event of a material breach by the other party of any representation, warranty or covenant contained in the Merger Agreement and such breach is not cured within thirty days, (v) by either party if the Merger is not consummated on or before June 30, 2019, subject to automatic extension to September 30, 2019 if the only outstanding closing condition is the receipt of regulatory approvals, (vi) by the Company if FPB’s board of directors breaches its obligation not to solicit any alternative acquisition transaction, changes its recommendation with respect to the Merger in accordance with the terms of the Merger Agreement, or breaches its obligation to call a special FPB shareholder meeting to vote on the Merger, (vii) by the Company or FPB in the event that the average closing price of a share of the Company’s Common Stock on the NASDAQ Global Select Market over the ten (10) trading days ending five (5) Business Days immediately prior to the Closing Date is either less than $33.15 or greater than $44.85, or (viii) by FPB in order to enter into an agreement to a superior proposal.

Termination Fee. FPB will pay the Company a termination fee equal to $3.6 million in the event (i) the Merger Agreement is terminated by the Company because FPB’s board of directors breaches its obligation not to solicit any alternative acquisition transaction, changes its recommendation with respect to the Merger in accordance with the terms of the Merger Agreement, or breaches its obligation to call a special FPB shareholder meeting to vote on the Merger, (ii) FPB terminates this agreement in order to accept a superior proposal, or (iii) the Merger Agreement is terminated (A) by either the Company or FPB because the required FPB shareholder approval is not obtained or (B) the Merger Agreement is terminated by the Company because of FPB’s material breach of representations, warranties or covenants, FPB receives an acquisition proposal after the date of the Merger Agreement but before it is terminated, and FPB enters into an agreement for or completes an acquisition transaction within 12 months of the termination of the Merger Agreement.

The foregoing summary of the Merger Agreement is not complete and is qualified in its entirety by reference to the full text of the Merger Agreement and certain exhibits attached thereto, a copy of which is attached hereto as Exhibit 2.1 and incorporated by reference herein.The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding the Company, its affiliates and their respective businesses, and the information regarding the Merger Agreement and the Merger that will be contained in, or incorporated by reference into, the registration statement on Form S-4 of the Company that will include a proxy statement of FPB and a prospectus of the Company and that will be filed with the Securities and Exchange Commission (the “SEC”).

Voting Agreements

In connection with entering into the Merger Agreement, the directors of FPB have entered into voting agreements (the “Voting Agreements”), to which each such director agreed to vote his, her or its shares of FPB common stock in favor of approval of the Merger Agreement and transactions contemplated therein and against certain other actions, proposals, transactions or agreements that would be detrimental to the consummation of the Merger. The Voting Agreements generally prohibit the sale or transfer of the shares held by each such shareholder until the earlier of (i) termination of the Merger Agreement and (ii) receipt of the approval of the shareholders of FPB. The Voting Agreements terminate upon the earlier of (i) the consummation of the Merger, (ii) the amendment of the Merger Agreement in any manner that materially and adversely affects any rights of the shareholder, (iii) the termination of the Merger Agreement or (iv) two years from the date of the Voting Agreements.

The foregoing summary of the Voting Agreements is qualified in its entirety by reference to the complete text of such documents, forms of which are included as Exhibit A to the Merger Agreement, filed as Exhibit 2.1 attached hereto and which is incorporated herein by reference.

Director Non-Compete Agreements

In connection with entering into the Merger Agreement, each of the directors of FPB and Florida Parishes Bank entered into a Non-Competition and Non-Disclosure Agreement with the Company, which contains provisions related to the non-disclosure of confidential information and trade secrets, non-solicitation of customers with whom such directors had material contact, non-competition within a restricted territory and non-recruitment of employees.

The foregoing summary of the Non-Competition and Non-Disclosure Agreement is qualified in its entirety by reference to the complete text of such document,a formof whichis included as Exhibit Cto theMergerAgreement, filed as Exhibit 2.1attached hereto and which is incorporated herein by reference.

Cautionary Statements Regarding Forward-Looking Information.

This Current Report contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. In general, forward-looking statements usually use words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology, including statements related to the expected timing of the closing of the Merger, the expected returns and other benefits of the Merger, to shareholders, expected improvement in operating efficiency resulting from the Merger, estimated expense reductions resulting from the transactions and the timing of achievement of such reductions, the impact on and timing of the recovery of the impact on tangible book value, and the effect of the Merger on the Company’s capital ratios. Forward-looking statements represent management’s beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are not guarantees of future performance. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements.

Factors that could cause or contribute to such differences include, but are not limited to (1)the risk that the cost savings and any revenue synergies from the Merger may not be realized or take longer than anticipated to be realized, (2)disruption from the Merger with customers, suppliers, employee or other business partners relationships, (3)the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, (4)the risk of successful integration of FPB’s business into the Company, (5)the failure to obtain the necessary approval by the shareholders of FPB, (6)the amount of the costs, fees, expenses and charges related to the Merger, (7)the ability by the Company to obtain required governmental approvals of the Merger, (8)reputational risk and the reaction of each of the companies’ customers, suppliers, employees or other business partners to the Merger, (9)the failure of the closing conditions in the Merger Agreement to be satisfied, or any unexpected delay in closing of the Merger, (10)the risk that the integration of FPB’s operations into the operations of the Company will be materially delayed or will be more costly or difficult than expected, (11)the possibility that the Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events, (12)the dilution caused by the Company’s issuance of additional shares of its common stock in the Merger transaction, and (13)general competitive, economic, political and market conditions. Additional factors which could affect the forward looking statements can be found in the cautionary language included under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and other documents subsequently filed by the Company with the SEC. Consequently, no forward-looking statement can be guaranteed. Neither the Company nor FPB undertakes any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For any forward-looking statements made in this Current Report on Form 8-K, the exhibits hereto or any related documents, the Company and FPB claim protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Additional Information about the Merger and Where to Find It

This document does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the proposed Merger, the Company will file with the SEC a registration statement on Form S-4 that will include a proxy statement of FPB and a prospectus of the Company, as well as other relevant documents concerning the proposed transaction. WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, FPB AND THE PROPOSED MERGER. The proxy statement/prospectus will be sent to the shareholders of FPB seeking the required shareholder approval. Investors and security holders will be able to obtain free copies of the registration statement on Form S-4 and the related proxy statement/prospectus, when filed, as well as other documents filed with the SEC by the Company through the web site maintained by the SEC at www.sec.gov. Documents filed with the SEC by the Company will also be available free of charge by directing a written request to The First Bancshares, Inc., 6480 U.S. Highway 98 West, Hattiesburg, Mississippi 39402 Attn: Corporate Secretary, Chandra Kidd. The Company’s telephone number is (601) 268-8998.

Participants in the Transaction

The Company, FPB and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of FPB in connection with the proposed transaction. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the proxy statement/prospectus regarding the proposed transaction when it becomes available. Additional information about the Company and its directors and officers may be found in the definitive proxy statement of the Company relating to its 2018 Annual Meeting of Stockholders filed with the SEC on April 11, 2018. The definitive proxy statement can be obtained free of charge from the sources described above.

(d) EXHIBITS

FIRST BANCSHARES INC /MS/ Exhibit
EX-2.1 2 tv506528_ex2-1.htm EXHIBIT 2.1   Exhibit 2.1   Execution Version     AGREEMENT AND PLAN OF MERGER   by and between   THE FIRST BANCSHARES,…
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About The First Bancshares, Inc. (OTCMKTS:FBSI)

First Bancshares, Inc. is a holding company of First Home Savings Bank (the Bank). The Bank is primarily engaged in providing a range of banking and mortgage services to individual and corporate customers in southern Missouri. The Bank offers its services in various categories, such as online banking, personal banking and business banking. The Bank’s FirstNet provides access for various banking needs. FirstNet is a free service, including free online BillPay, which is accessible from home or office. Its personal banking services include personal checking accounts, personal savings and money market accounts, personal certificate of deposits and individual retirement accounts, and deposit rates. Its business banking services include business checking accounts, and business savings and money market accounts. The Bank has seven branch facilities in Marshfield, Ava, Kissee Mills, Gainesville, Sparta, Crane and Springfield, which are located in Missouri.