First Bancshares, Inc.
120 North Street, Bellevue, Ohio 44811
419-483-7340 – Fax 419-483-0006

October 21, 2025

Dear Shareholder,

The board of directors of First Bancshares, Inc. (the “Company”) have declared a third quarter dividend in the amount of thirty-three cents ($0.33) per share that is enclosed or has been direct deposited per your instructions. Additional shares of First Bancshares stock will be purchased for those participating in the dividend reinvestment plan. We are pleased to be able to deliver consistent dividend returns and are committed to future growth and financial strength as we enter the fourth quarter of the year. Our financial performance for the quarter and year to date is summarized below.

Of most significance, on August 29, 2025, the Company completed a sale of a portion of its available for sale (“AFS”) investment securities portfolio as part of a strategic repositioning to help improve the future earnings and profitability. The Company sold AFS investment securities with a fair value of $51.86 million and an aggregate weighted average tax equivalent yield of 1.46%, consisting of lower yielding mortgage-backed securities, collateralized mortgage obligations, municipal securities and agency bonds. Net proceeds were deployed to purchase higher-yielding agency securities, mortgage-backed securities, and collateralized loan obligations, with an aggregate average current market tax equivalent yield of 5.37%.

The securities transaction is expected to increase the Company’s average annual investment income by approximately $1.95 million, including the related tax benefits of the sale. This increase is equivalent to 117% of its pre-tax income reported for the 2024 fiscal year. The lower yielding securities sale resulted in an estimated after-tax loss on the sale of approximately $7.49 million, which was recorded in the third quarter of 2025. The repositioning transaction is expected to have an earn-back period of approximately 3.84 years.

The impact on the Company’s stockholders’ equity and book value per share will not be significant, as the unrealized losses on AFS investment securities are already accounted for in accumulated other comprehensive income as a deduction to stockholder’s equity. The Company’s regulatory capital ratios remain well above the well-capitalized requirements after the investment securities transaction. Further, the Company’s Return of Average Assets, Return on Equity and Efficiency Ratios improve meaningfully over the next three years on a projected basis.

The Company’s core operations through September 30, 2025, reflect a slight decline in net income from $987k in 2024 to $899k in 2025. Interest and investment income improved by $368k, while interest expense declined by $241k, resulting in an improvement in net interest income of $608k for the nine-month period. Non-interest income declined $123k, driven by lower FNMA servicing fees, NSF fees, and cardholder and Visa interchange income. Non-interest expenses remained higher in 2025, primarily due to executive officer transition expenses and higher Outside Loan Services costs. The Company also incurred increases in certain software maintenance costs, data processing costs and consulting fees compared to the previous year.

With the securities repositioning complete, the Company’s primary focus will be to grow loan assets in each segment, including commercial & industrial, commercial and residential real estate and consumer loans. The Company’s balance sheet remains highly liquid with sufficient funding available to achieve meaningful loan growth in the coming quarters and years. Total deposits grew from $274mm to $298mm over the past 12 months, while total loan balances have remained stable at $176mm at quarter end. The Company’s strong financial condition and enhanced yields on its investment portfolio position it well for future opportunities.

Our loan portfolio continues to perform well, however certain consumer-related business clients continue to experience softening in demand for their products, similar to previous quarters. We are proactively managing these relationships to ensure the bank’s overall credit risk is managed appropriately. The Company’s improved earnings forecast will enable additions to its Allowance for Credit Losses moving forward if necessary.

The third quarter of 2025 was a transformational quarter for the Company. A primary directive in the Company’s strategic plan is to improve profitability, and in turn, improve shareholder value and returns. The board of directors, senior management and the entire banking team remains committed to our core values of top-quality customer service, high integrity, loyalty to our shareholders and communities, employee development, sound risk management and superior financial strength and stability. Looking forward to our future together.

Sincerely,

Jeffrey S. Bechtel President & CEO

James V. Stouffer, Jr. Chairman