`U.S. SECURITIES AND EXCHANGE COMMISSION
                                              WASHINGTON, D.C. 20549

                                                    FORM 10-KSB

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2005

                                                        OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

                                           Commission file no. 33-94288

                                            THE FIRST BANCSHARES, INC.
                                --------------------------------------------------
                                  (Name of Small Business Issuer in Its Charter)

                 Mississippi                                                       64-0862173
 -----------------------------------------------------------------  -----------------------------------------------------
         (State or Other Jurisdiction of                              (I.R.S. Employer Identification Number)
         Incorporation or Organization)

           6480 U.S. Hwy. 98 West
           Hattiesburg, Mississippi                                                     39402
--------------------------------------------------------------      -----------------------------------------------------
       (Address of principal executive offices)
                                                                                  (Zip Code)

Issuer's telephone number:                   (601) 268-8998
                                ----------------------------------------------------

Securities registered under Section 12(b) of the Exchange Act:

                                                                         Name of Each Exchange on
             Title of Each Class                                              Which Registered

                  None                                                               None
-------------------------------------------------------------    --------------------------------------------------------

Securities registered pursuant to section 12(g) of the Act:

                                          Common Stock, $1.00 par value
-------------------------------------------------------------------------------------------------------------------------
                                                 (Title of Class)

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act _____

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act
during the past 12 months (or for such shorted 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
    ------       ------`

---

`Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B in this
form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form
10-KSB. [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
                   -----    -----

         State issuer's revenues for its most recent fiscal year. $17,374,611

         The aggregate market value of the Common Stock held by non-affiliates of the Company on March 23, 2006,
was  $37,762,242.  This calculation is based upon an estimate of the fair market value of the Common Stock  of
$21.00 per share.  The stock is traded on the OTC Bulletin Board under the symbol, FBMS.

         State the number of shares outstanding of each of the issuer's classes of common equity, as of the
latest practicable date.  2,375,200  on  March 23, 2006.

                                        DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the following documents are incorporated by reference to Parts II and III of the Form 10-KSB
report: Proxy Statement dated April 7, 2006, and the Annual Report to the Stockholders for the year ended
December 31, 2005.

         Transitional Small Business Disclosure Format. (Check one):

                                                 Yes        No   X
                                                     -----     -----`

---

`THE FIRST BANCSHARES, INC.
                                                FORM 10-KSB
                                             TABLE OF CONTENTS


                                                                                                               Page

                                                       PART I

ITEM 1.  BUSINESS.................................................................................................2
ITEM 2.  DESCRIPTION OF PROPERTY.................................................................................11
ITEM 3.  LEGAL PROCEEDINGS.......................................................................................11
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.....................................................11

                                                       PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS................................................12
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION...............................................12
ITEM 7.  FINANCIAL STATEMENTS....................................................................................12
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE....................12
ITEM 8A  CONTROLS AND PROCEDURES ........................................................................... ....12
ITEM 8B  OTHER INFORMATION ................................................................................. ....12

                                                      PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;  COMPLIANCE WITH SECTION 16(a) OF THE
         EXCHANGE ACT............................................................................................12
ITEM 10. EXECUTIVE COMPENSATION..................................................................................13
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         RELATED STOCKHOLDER MATTERS.............................................................................13
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..........................................................13
ITEM 13. EXHIBITS................................................................................................13
ITEM 14  PRINCIPAL ACCOUNTANT FEES AND SERVICES .................................................................14`

This Report contains
statements which constitute forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and the Securities Exchange Act of
1934. These statements appear in a number of places in this Report and include
all statements regarding the intent, belief or current expectations of the
Company, its directors or its officers with respect to, among other things: (i)
the Companys financing plans; (ii) trends affecting the Companys
financial condition or results of operations; (iii) the Companys growth
strategy and operating strategy; and (iv) the declaration and payment of
dividends. Investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve risks and uncertainties, and
that actual results may differ materially from those projected in the
forward-looking statements as a result of various factors discussed herein and
those factors discussed in detail in the Companys filings with the
Securities and Exchange Commission.

---

The First Bancshares, Inc.
(the Company) was incorporated on June 23, 1995 to serve as a
holding company for The First National Bank of South Mississippi (The
First) located in Hattiesburg, Mississippi and The First National Bank of
the Pine Belt (Pine Belt), located in Laurel, Mississippi
(collectively, the Banks). The First began operations on August 5,
1996 from its main office in the Oak Grove community, which was on the outskirts
of Hattiesburg but now is included in the city of Hattiesburg. Pine Belt began
banking operations on January 19, 1999. In January, 2004, the two banks were
consolidated to form one bank, The First, A National Banking Association. In
addition to the main office in Hattiesburg and the branch in Laurel, The First
also operates two other branches in Hattiesburg, one in Purvis, one in Picayune,
and one in Pascagoula, Mississippi. The First recently received approval from
the Office of the Comptroller of the Currency to open a branch in Bay St. Louis,
MS. The Company and its subsidiary bank engage in a general commercial and
retail banking business characterized by personalized service and local
decision-making, emphasizing the banking needs of small to medium-sized
businesses, professional concerns and individuals. The First is a wholly-owned
subsidiary bank of the Company.

The First serves the cities
of Hattiesburg, Laurel, Purvis, Picayune, Pascagoula, and the surrounding areas
of Lamar, Forrest, Jones, Pearl River and Jackson Counties, Mississippi. The
First has a main office located in the city of Hattiesburg, Mississippi, in
Lamar County. The First has a branch office located on Highway 589 in the city
of Purvis, Mississippi, also in Lamar County, a third office located at the
intersection of Lincoln Road and South 28th Avenue in Hattiesburg, a fourth
location at 3318 Hardy Street in Hattiesburg, a fifth location at Hwy 15 North
in Laurel, a sixth location at Hwy 43 South in Picayune, and a seventh location
at Jackson Avenue in Pascagoula, Mississippi.

The main office primarily
serves the area in and around the northern portion of Lamar County. The Purvis
office primarily serves the area in and around Purvis, Mississippi, which is in
the east central part of Lamar County and is the county seat. Lamar County is
located in the southeastern section of Mississippi. Hattiesburg, one of the
largest cities in Mississippi, is located in Forrest and Lamar Counties. The
Laurel office serves the city of Laurel and the surrounding area of Jones
County, Mississippi. The Picayune office primarily serves the area in and around
Picayune, Mississippi, including areas of north Hancock County and Pearl River,
LA and Slidell, LA. Picayune is located in the southern part of Pearl River
County. Pearl River County is located in the southern section of Mississippi.
The Pascagoula office primarily serves the area in and around Pascagoula,
Mississippi, including areas of Jackson County. Hattiesburg can be reached via
U.S. Highways 98 and 49 and Interstate 59. Major employers located in the Lamar
and Forrest County areas include Forrest General Hospital, the University of
Southern Mississippi, Wesley Medical Center, Camp Shelby, the Hattiesburg Public
Schools, the Hattiesburg Clinic, the City of Hattiesburg, and Marshall Durbin
Poultry. The principal components of the economy of the Lamar and Forrest County
areas include service industries, wholesale and retail trade, manufacturing, and
transportation and public utilities. The Laurel branch is located at 1945
Highway 15 North, Laurel, MS, with the majority of its retail business coming
from the local area and the remaining business coming from other areas of Jones
County, as well as portions of Jasper County, Wayne County, Smith County, and
Covington County. Major employers in the Jones County area include Howard
Industries, Sanderson Farms, Inc., and South Central Regional Medical Center.
Major employers in the Pearl River County area include Stennis Space Center,
Chevron, Texaco, Arizona Chemical, American Crescent Elevator Co., City of
Picayune, Crosby Memorial Hospital and the public schools. The principal
components of the economy of the Pearl River County area include timer, service
industries, wholesale and retail trade, manufacturing, and transportation and
public utilities. Major employers in the Jackson County area include Northrop
Grumman, Singing River Hospital, and Shell Oil Company.

---

The Company strives to
provide its customers with the breadth of products and services comparable to
those offered by large regional banks, while maintaining the quick response and
personal service of a locally owned and managed bank. In addition to offering a
full range of deposit services and commercial and personal loans, The First
offers products such as mortgage loan originations. The following is a
description of the products and services offered or planned to be offered by the
Bank.

`        Deposit Services.  The Bank offers a full range of deposit services that are typically available in most
         banks and savings and loan associations, including checking accounts, NOW accounts, savings accounts,
         and other time deposits of various types, ranging from daily money market accounts to longer-term
         certificates of deposit.  The transaction accounts and time certificates are tailored to the Bank's
         principal market area at rates competitive to those offered by other banks in the area.  In addition,
         the Bank offers certain retirement account services, such as Individual Retirement Accounts (IRAs).  All
         deposit accounts are insured by the Federal Deposit Insurance Corporation (the "FDIC") up to the maximum
         amount allowed by law.  The Bank solicits these accounts from individuals, businesses, associations and
         organizations, and governmental authorities.

        Loan Products.  The Bank offers a full range of commercial and personal loans.  Commercial loans include
         both secured and unsecured loans for working capital (including loans secured by inventory and accounts
         receivable), business expansion (including acquisition of real estate and improvements), and purchase of
         equipment and machinery.  Consumer loans include equity lines of credit and secured and unsecured loans
         for financing automobiles, home improvements, education, and personal investments.  The Bank also makes
         real estate construction and acquisition loans.  The Bank's lending activities are subject to a variety
         of lending limits imposed by federal law.  While differing limits apply in certain circumstances based
         on the type of loan or the nature of the borrower (including the borrower's relationship to the bank),
         in general the Bank is subject to a loans-to-one-borrower limit of an amount equal to 15% of the Bank's
         unimpaired capital and surplus.  The Bank may not make any loans to any director,  executive officer, or
         10% shareholder unless the loan is approved by the Board of Directors of the Bank and is made on terms
         not more favorable to such a person than would be available to a person not affiliated with the Bank.

        Mortgage Loan Divisions.  The Bank has mortgage loan divisions which originate loans to purchase
         existing or construct new homes and to refinance existing mortgages.

        Other Services.  Other bank services include on-line Internet banking services, voice response telephone
         inquiry service, commercial sweep accounts, cash management services, safe deposit boxes, travelers
         checks, direct deposit of payroll and social security checks, and automatic drafts for various
         accounts.  The Bank is associated with the Money Belt, Gulfnet, and Plus networks of automated teller
         machines that may be used by the Bank's customers throughout Mississippi and other regions.  The Banks
         also offer VISA and MasterCard credit card services through a correspondent bank.`

---

The Bank generally competes
with other financial institutions through the selection of banking products and
services offered, the pricing of services, the level of service provided, the
convenience and availability of services, and the degree of expertise and the
personal manner in which services are offered. Mississippi law permits statewide
branching by banks and savings institutions, and many financial institutions in
the state have branch networks. Consequently, commercial banking in Mississippi
is highly competitive. Many large banking organizations currently operate in the
Companys market area, several of which are controlled by out-of-state
ownership. In addition, competition between commercial banks and thrift
institutions (savings institutions and credit unions) has been intensified
significantly by the elimination of many previous distinctions between the
various types of financial institutions and the expanded powers and increased
activity of thrift institutions in areas of banking which previously had been
the sole domain of commercial banks. Recent legislation, together with other
regulatory changes by the primary regulators of the various financial
institutions, has resulted in the almost total elimination of practical
distinctions between a commercial bank and a thrift institution. Consequently,
competition among financial institutions of all types is largely unlimited with
respect to legal ability and authority to provide most financial services.

The Company faces increased
competition from both federally-chartered and state-chartered financial and
thrift institutions, as well as credit unions, consumer finance companies,
insurance companies, and other institutions in the Companys market area.
Some of these competitors are not subject to the same degree of regulation and
restriction imposed upon the Company. Many of these competitors also have
broader geographic markets and substantially greater resources and lending
limits than the Company and offer certain services such as trust banking that
the Company does not currently provide. In addition, many of these competitors
have numerous branch offices located throughout the extended market areas of the
Company that may provide these competitors with an advantage in geographic
convenience that the Company does not have at present.

Currently there are
numerous other commercial banks, savings institutions, and credit unions
operating in The Firsts primary service area.

As of March 1, 2006, the
Company had 87 full-time employees and 11 part-time employees.

The Company and its bank are
subject to state and federal banking laws and regulations which impose specific
requirements or restrictions on and provide for general regulatory oversight
with respect to virtually all aspects of operations. These laws and regulations
are generally intended to protect depositors, not shareholders. To the extent
that the following summary describes statutory or regulatory provisions, it is
qualified in its entirety by reference to the particular statutory and
regulatory provisions. Any change in applicable laws or regulations may have a
material effect on the business and prospects of the Company. Beginning with the
enactment of the Financial Institutions Reform, Recovery and Enforcement Act of
1989 (FIRREA) and following with Federal Deposit Insurance
Corporation Improvement Act of 1991 (FDICIA), numerous additional
regulatory requirements have been placed on the banking industry in the past
several years, and additional changes have been proposed. The operations of the
Company and the Bank may be affected by legislative changes and the policies of
various regulatory authorities. The Company is unable to predict the nature or
the extent of the effect on its business and earnings that fiscal or monetary
policies, economic control, or new federal or state legislation may have in the
future.

---

Because it owns the
outstanding capital stock of the Bank, the Company is a bank holding company
within the meaning of the Federal Bank Holding Company Act of 1956 (the
BHCA).

The BHCA.  Under the BHCA, the Company is subject to periodic
examination by the Federal Reserve and is
required to file periodic
reports of its operations and such additional information as the Federal Reserve
may require. The Companys and the Banks activities are limited to
banking, managing or controlling banks, furnishing services to or performing
services for its subsidiaries, and engaging in other activities that the Federal
Reserve determines to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto.

Investments, Control, and Activities.  With certain limited exceptions,
the BHCA requires every bank
holding company to obtain
the prior approval of the Federal Reserve before (i) acquiring substantially all
the assets of any bank, (ii) acquiring direct or indirect ownership or control
of any voting shares of any bank if after such acquisition it would own or
control more than 5% of the voting shares of such bank (unless it already owns
or controls the majority of such shares), or (iii) merging or consolidating with
another bank holding company.

In addition, and subject to
certain exceptions, the BHCA and the Change in Bank Control Act, together with
regulations thereunder, require Federal Reserve approval (or, depending on the
circumstances, no notice of disapproval) prior to any person or company
acquiring control of a bank holding company, such as the Company.
Control is conclusively presumed to exist if an individual or company acquires
25% or more of any class of voting securities of the bank holding company.
Control is rebuttably presumed to exist if a person acquires 10% or more but
less than 25% of any class of voting securities and either the Company has
registered securities under Section 12 of the Exchange Act (which the Company
has done) or no other person owns a greater percentage of that class of voting
securities immediately after the transaction. The regulations provide a
procedure for challenge of the rebuttable control presumption.

Under the BHCA, a bank
holding company is generally prohibited from engaging in, or acquiring direct or
indirect control of more than 5% of the voting shares of any company engaged in
nonbanking activities, unless the Federal Reserve Board, by order or regulation,
has found those activities to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto. Some of the activities
that the Federal Reserve Board has determined by regulation to be proper
incidents to the business of a bank holding company include making or servicing
loans and certain types of leases, engaging in certain insurance and discount
brokerage activities, performing certain data processing services, acting in
certain circumstances as a fiduciary or investment or financial adviser, owning
savings associations, and making investments in certain corporations or projects
designed primarily to promote community welfare.

The Federal Reserve Board
has imposed certain capital requirements on the Company under the BHCA,
including a minimum leverage ratio and a minimum ratio of qualifying
capital to risk-weighted assets. These requirements are described below under
Capital Regulations. Subject to its capital requirements and certain
other restrictions, the Company may borrow money to make a capital contribution
to the Banks, and such loans may be repaid from dividends paid from the Bank to
the Company (although the ability of the Bank to pay dividends is subject to
regulatory restrictions as described below in The Bank - Dividends).
The Company is also able to raise capital for contribution to the Bank by
issuing securities without having to receive regulatory approval, subject to
compliance with federal and state securities laws.

Source of Strength; Cross-Guarantee.  In accordance with Federal
Reserve Board policy, the Company is
expected to act as a source
of financial strength to the Bank and to commit resources to support the Bank in
circumstances in which the Company might not otherwise do so. Under the BHCA,
the Federal Reserve Board may require a bank holding company to terminate any
activity or relinquish control of a nonbank subsidiary (other than a nonbank
subsidiary of a bank) upon the Federal Reserve Boards determination that
such activity or control constitutes a serious risk to the financial soundness
or stability of any subsidiary depository institution of the bank holding
company. Further, federal bank regulatory authorities have additional discretion
to require a bank holding company to divest itself of any bank or nonbank
subsidiary if the agency determines that divestiture may aid the depository
institutions financial condition.

---

The Bank operates as a
national banking association incorporated under the laws of the United States
and subject to examination by the Office of Comptroller of the Currency
(OCC). Deposits in the Bank are insured by the FDIC up to a maximum
amount (generally $100,000 per depositor, subject to aggregation rules). The OCC
and the FDIC regulate or monitor virtually all areas of the Banks
operations, including security devices and procedures, adequacy of
capitalization and loan loss reserves, loans, investments, borrowings, deposits,
mergers, issuances of securities, payment of dividends, interest rates payable
on deposits, interest rates or fees chargeable on loans, establishment of
branches, corporate reorganizations, maintenance of books and records, and
adequacy of staff training to carry on safe lending and deposit gathering
practices. The OCC requires the Bank to maintain certain capital ratios and
imposes limitations on the Banks aggregate investment in real estate, bank
premises, and furniture and fixtures. The Bank is required by the OCC to prepare
quarterly reports on their financial condition and to conduct an annual audit of
their financial affairs in compliance with minimum standards and procedures
prescribed by the OCC.

Under FDICIA, all insured
institutions must undergo regular on-site examinations by their appropriate
banking agency. The cost of examinations of insured depository institutions and
any affiliates may be assessed by the appropriate agency against each
institution or affiliate as it deems necessary or appropriate. Insured
institutions are required to submit annual reports to the FDIC and the
appropriate agency (and state supervisor when applicable). FDICIA also directs
the FDIC to develop with other appropriate agencies a method for insured
depository institutions to provide supplemental disclosure of the estimated fair
market value of assets and liabilities, to the extent feasible and practicable,
in any balance sheet, financial statement, report of condition, or any other
report of any insured depository institution. FDICIA also requires the federal
banking regulatory agencies to prescribe, by regulation, standards for all
insured depository institutions and depository institution holding companies
relating, among other things, to: (i) internal controls, information systems,
and audit systems; (ii) loan documentation; (iii) credit underwriting; (iv)
interest rate risk exposure; and (v) asset quality.

National banks and their
holding companies which have been chartered or registered or undergone a change
in control within the past two years or which have been deemed by the OCC or the
Federal Reserve Board, respectively, to be troubled institutions must give the
OCC or the Federal Reserve Board, respectively, thirty days prior notice of the
appointment of any senior executive officer or director. Within the thirty day
period, the OCC or the Federal Reserve Board, as the case may be, may approve or
disapprove any such appointment.

Deposit Insurance.  The FDIC establishes rates for the payment of
premiums by federally insured banks
and thrifts for deposit
insurance. A separate Bank Insurance Fund (BIF) and Savings
Association Insurance Fund (SAIF) are maintained for commercial
banks and thrifts, respectively, with insurance premiums from the industry used
to offset losses from insurance payouts when banks and thrifts fail. Since 1993,
insured depository institutions like the Bank have paid for deposit insurance
under a risk-based premium system.

Transactions With Affiliates and Insiders.  The Bank is subject to
Section 23A of the Federal Reserve
Act, which places limits on
the amount of loans to, and certain other transactions with, affiliates, as well
as on the amount of advances to third parties collateralized by the securities
or obligations of affiliates. The aggregate of all covered transactions is
limited in amount, as to any one affiliate, to 10% of the Banks capital
and surplus and, as to all affiliates combined, to 20% of the Banks
capital and surplus. Furthermore, within the foregoing limitations as to amount,
each covered transaction must meet specified collateral requirements.

The Bank is also subject to
Section 23B of the Federal Reserve Act, which prohibits an institution from
engaging in certain transactions with affiliates unless the transactions are on
terms substantially the same, or at least as favorable to such institution, as
those prevailing at the time for comparable transactions with nonaffiliated
companies. The Bank is subject to certain restrictions on extensions of credit
to executive officers, directors, certain principal shareholders, and their
related interests. Such extensions of credit (i) must be made on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with third parties and (ii) must not
involve more than the normal risk of repayment or present other unfavorable
features.

---

Dividends.  A national bank may not pay dividends from its capital.
All dividends must be paid out of
undivided profits then on
hand, after deducting expenses, including reserves for losses and bad debts. In
addition, a national bank is prohibited from declaring a dividend on its shares
of common stock until its surplus equals its stated capital, unless the bank has
transferred to surplus no less than one-tenth of its net profits of the
preceding two consecutive half-year periods (in the case of an annual dividend).
The approval of the OCC is required if the total of all dividends declared by a
national bank in any calendar year exceeds the total of its net profits for that
year combined with its retained net profits for the preceding two years, less
any required transfers to surplus. In addition, under FDICIA, the banks may not
pay a dividend if, after paying the dividend, the bank would be
undercapitalized. See Capital Regulations below.

Branching.  National banks are required by the National Bank Act to
adhere to branch office banking laws
applicable to state banks
in the states in which they are located. Under current Mississippi law, the
Banks may open branches throughout Mississippi with the prior approval of the
OCC. In addition, with prior regulatory approval, the Banks are able to acquire
existing banking operations in Mississippi. Furthermore, federal legislation has
recently been passed which permits interstate branching. The new law permits out
of state acquisitions by bank holding companies (subject to veto by new state
law), interstate branching by banks if allowed by state law, interstate merging
by banks, and de novo branching by national banks if allowed by state law. See
Recent Legislative Developments.

Community Reinvestment Act.  The Community Reinvestment Act requires
that, in connection with
examinations of financial
institutions within their respective jurisdictions, the Federal Reserve, the
FDIC, the OCC, or the Office of Thrift Supervision shall evaluate the record of
the financial institutions in meeting the credit needs of their local
communities, including low and moderate income neighborhoods, consistent with
the safe and sound operation of those institutions. These factors are also
considered in evaluating mergers, acquisitions, and applications to open a
branch or facility.

Other Regulations.  Interest and certain other charges collected or
contracted for by the Banks are
subject to state usury laws
and certain federal laws concerning interest rates. The Banks loan
operations are subject to certain federal laws applicable to credit
transactions, such as the federal Truth-In-Lending Act, governing disclosures of
credit terms to consumer borrowers; the Home Mortgage Disclosure Act of 1975,
requiring financial institutions to provide information to enable the public and
public officials to determine whether a financial institution is fulfilling its
obligation to help meet the housing needs community it serves; the Equal Credit
Opportunity Act, prohibiting discrimination on the basis of creed or other
prohibited factors in extending credit; the Fair Credit Reporting Act of 1978,
governing the use and provision of information to credit reporting agencies; the
Fair Debt Collection Act, concerning the manner in which consumer debts may be
collected by collection agencies; and the rules and regulations of the various
federal agencies charged with the responsibility of implementing such federal
laws. The deposit operations of the Bank also are subject to the Right to
Financial Privacy Act, which imposes a duty to maintain confidentiality of
consumer financial records and prescribes procedures for complying with
administrative subpoenas of financial records, and the Electronic Funds Transfer
Act and Regulation E issued by the Federal Reserve Board to implement that Act,
which governs automatic deposits to and withdrawals from deposit accounts and
customers rights and liabilities arising from the use of automated teller
machines and other electronic banking services.

---

Capital Regulations.  The federal bank regulatory authorities have
adopted risk-based capital guidelines
for banks and bank holding
companies that are designed to make regulatory capital requirements more
sensitive to differences in risk profile among banks and bank holding companies,
account for off-balance sheet exposure, and minimize disincentives for holding
liquid assets. The resulting capital ratios represent qualifying capital as a
percentage of total risk-weighted assets and off-balance sheet items. The
guidelines are minimums, and the federal regulators have noted that banks and
bank holding companies contemplating significant expansion programs should not
allow expansion to diminish their capital ratios and should maintain ratios well
in excess of the minimums. The current guidelines require all bank holding
companies and federally-regulated banks to maintain a minimum risk-based total
capital ratio equal to 8%, of which at least 4% must be Tier 1 capital. Tier 1
capital includes common shareholders equity, qualifying perpetual
preferred stock, and minority interests in equity accounts of consolidated
subsidiaries, but excludes goodwill and most other intangibles and excludes the
allowance for loan and lease losses. Tier 2 capital includes the excess of any
preferred stock not included in Tier 1 capital, mandatory convertible
securities, hybrid capital instruments, subordinated debt and intermediate
term-preferred stock, and general reserves for loan and lease losses up to 1.25%
of risk-weighted assets.

Under the guidelines,
banks and bank holding companies assets are given risk-weights of
0%, 20%, 50% and 100%. In addition, certain off-balance sheet items are given
credit conversion factors to convert them to asset equivalent amounts to which
an appropriate risk-weight will apply. These computations result in the total
risk-weighted assets. Most loans are assigned to the 100% risk category, except
for first mortgage loans fully secured by residential property and, under
certain circumstances, residential construction loans, both of which carry a 50%
rating. Most investment securities are assigned to the 20% category, except for
municipal or state revenue bonds, which have a 50% rating, and direct
obligations of or obligations guaranteed by the United States Treasury or United
States Government agencies, which have a 0% rating.

The federal bank regulatory
authorities have also implemented a leverage ratio, which is Tier 1 capital as a
percentage of average total assets less intangibles, to be used as a supplement
to the risk-based guidelines. The principal objective of the leverage ratio is
to place a constraint on the maximum degree to which a bank holding company may
leverage its equity capital base. The minimum required leverage ratio for
top-rated institutions is 3%, but most institutions are required to maintain an
additional cushion of at least 100 to 200 basis points.

FDICIA established a
capital-based regulatory scheme designed to promote early intervention for
troubled banks and requires the FDIC to choose the least expensive resolution of
bank failures. The capital-based regulatory framework contains five categories
of compliance with regulatory capital requirements, including well
capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized, and
critically undercapitalized. To qualify as a well
capitalized institution, a bank must have a leverage ratio of no less than
5%, a Tier 1 risk-based ratio of no less than 6%, and a total risk-based capital
ratio of no less than 10%, and the Bank must not be under any order or directive
from the appropriate regulatory agency to meet and maintain a specific capital
level. As of December 31, 2005, the Company and The First, were qualified as
well capitalized.

Under the FDICIA
regulations, the applicable agency can treat an institution as if it were in the
next lower category if the agency determines (after notice and an opportunity
for hearing) that the institution is in an unsafe or unsound condition or is
engaging in an unsafe or unsound practice. The degree of regulatory scrutiny of
a financial institution will increase, and the permissible activities of the
institution will decrease, as it moves downward through the capital categories.
Institutions that fall into one of the three undercapitalized categories may be
required to (i) submit a capital restoration plan; (ii) raise additional
capital; (iii) restrict their growth, deposit interest rates, and other
activities; (iv) improve their management; (v) eliminate management fees; or
(vi) divest themselves of all or part of their operations. Bank holding
companies controlling financial institutions can be called upon to boost the
institutions capital and to partially guarantee the institutions
performance under their capital restoration plans.

These capital guidelines
can affect the Company in several ways. If the Company continues to grow at a
rapid pace, a premature squeeze on capital could occur making a
capital infusion necessary. The requirements could impact the Companys
ability to pay dividends. The Companys present capital levels are more
than adequate; however, rapid growth, poor loan portfolio performance, or poor
earnings performance could change the Companys capital position in a
relatively short period of time.

Failure to meet these
capital requirements would mean that a bank would be required to develop and
file a plan with its primary federal banking regulator describing the means and
a schedule for achieving the minimum capital requirements. In addition, such a
bank would generally not receive regulatory approval of any application that
requires the consideration of capital adequacy, such as a branch or merger
application, unless the Bank could demonstrate a reasonable plan to meet the
capital requirement within a reasonable period of time.

---

Enforcement Powers.  FIRREA expanded and increased civil and criminal
penalties available for use by the
federal regulatory agencies
against depository institutions and certain institution-affiliated
parties (primarily including management, employees, and agents of a
financial institution, independent contractors such as attorneys and
accountants, and others who participate in the conduct of the financial
institutions affairs). These practices can include the failure of an
institution to timely file required reports; the filing of false or misleading
information; or the submission of inaccurate reports. Civil penalties may be as
high as $1,000,000 a day for such violations. Criminal penalties for some
financial institution crimes have been increased to twenty years. In addition,
regulators are provided with greater flexibility to commence enforcement actions
against institutions and institution-affiliated parties. Possible enforcement
actions include the termination of deposit insurance. Furthermore, FIRREA
expanded the appropriate banking agencies power to issue cease and desist
orders that may, among other things, require affirmative action to correct any
harm resulting from a violation or practice, including restitution,
reimbursement, indemnifications, or guarantees against loss. A financial
institution may also be ordered to restrict its growth, dispose of certain
assets, rescind agreements or contracts, or take other actions as determined by
the ordering agency to be appropriate.

Effect of Governmental Monetary Policies.  The earnings of the Bank
are affected by domestic economic
conditions and the monetary
and fiscal policies of the United States government and its agencies. The
Federal Reserve Boards monetary policies have had, and are likely to
continue to have, an important impact on the operating results of commercial
banks through its power to implement national monetary policy in order, among
other things, to curb inflation or combat a recession. The monetary policies of
the Federal Reserve Board have major effects upon the levels of bank loans,
investments, and deposits through its open market operations in United States
government securities and through its regulation of the discount rate on
borrowings of member banks and the reserve requirements against member bank
deposits. It is not possible to predict the nature or impact of future changes
in monetary and fiscal policies.

Recent Legislative Developments.  On September 29, 1994, the federal
government enacted the Riegle-Neal
Interstate Banking and
Branching Efficiency Act of 1994 (the Interstate Banking Act). This
Act became effective on September 29, 1995 and permits eligible bank holding
companies in any state, with regulatory approval, to acquire banking
organizations in any other state. Since June 1, 1997, the Interstate Banking Act
has allowed banks with different home states to merge, unless a particular state
opts out of the statute. In addition, beginning June 1, 1997, the Interstate
Banking Act has permitted national and state banks to establish de novo branches
in another state if there is a law in that state which applies equally to all
banks and expressly permits all out-of-state banks to establish de novo
branches.

On November 12, 1999,
President Clinton signed into law the Gramm- Leach-Bliley Act of 1999 (the
Financial Services Modernization Act). The Financial Services
Modernization Act repeals the two affiliation provisions of the Glass-Steagall
Act: Section 20, which restricted the affiliation of Federal Reserve Member
Banks with firms engaged principally in specified securities
activities; and Section 32, which restricts officer, director, or employee
interlocks between a member bank and any company or person primarily
engaged in specified securities activities. In addition, the Financial
Services Modernization Act also contains provisions that expressly preempt any
state law restricting the establishment of financial affiliations, primarily
related to insurance. The general effect of the law is to establish a
comprehensive framework to permit affiliations among commercial banks, insurance
companies, securities firms, and other financial service providers by revising
and expanding the BHCA framework to permit a holding company system to engage in
a full range of financial activities through a new entity known as a Financial
Holding Company. Financial activities is broadly defined to include
not only banking, insurance, and securities activities, but also merchant
banking and additional activities that the Federal Reserve, in consultation with
the Secretary of the Treasury, determines to be financial in nature, incidental
to such financial activities, or complementary activities that do not pose a
substantial risk to the safety and soundness of depository institutions or the
financial system generally.

---

`Generally, the Financial Services Modernization Act:

                 Repeals historical restrictions on, and eliminates many federal and state law barriers to,
                  affiliations among banks, securities firms, insurance companies, and other financial service
                  providers;

                 Provides a uniform framework for the functional regulation of the activities of banks, savings
                  institutions, and their holding companies;

                 Broadens the activities that may be conducted by national banks, banking subsidiaries of bank
                  holding companies, and their financial subsidiaries;

                 Provides an enhanced framework for protecting the privacy of consumer information;

                 Adopts a number of provisions related to the capitalization, membership, corporate governance,
                  and other measures designed to modernize the Federal Home Loan Bank system;

                 Modifies the laws governing the implementation of the Community Reinvestment Act ("CRA"); and

                 Addresses a variety of other legal and regulatory issues affecting both day-to-day operations
                  and long-term activities of financial institutions.`

In order for a bank holding
company to take advantage of the ability to affiliate with other financial
services providers, that company must become a Financial Holding
Company as permitted under an amendment to the BHCA. To become a Financial
Holding Company, the company would file a declaration with the Federal Reserve,
electing to engage in activities permissible for Financial Holding Companies and
certifying that it is eligible to do so because all of its insured depository
institution subsidiaries are well-capitalized and well-managed. In addition, the
Federal Reserve must also determine that each insured depository institution
subsidiary of the Company has at least a satisfactory CRA rating.

The Financial Services
Modernization Act also permits national banks to engage in expanded activities
through the formation of financial subsidiaries. A national bank may have a
subsidiary engaged in any activity authorized for national banks directly or any
financial activity, except for insurance underwriting, insurance investments,
real estate investment or development, or merchant banking, which may only be
conducted through a subsidiary of a Financial Holding Company. Financial
activities include all activities permitted under new sections of the BHCA or
permitted by regulation.

A national bank seeking to
have a financial subsidiary, and each of its depository institution affiliates,
must be well-capitalized and well-managed. The total
assets of all financial subsidiaries may not exceed the lesser of 45% of a
banks total assets, or $50 billion. A national bank must exclude from its
assets and equity all equity investments, including retained earnings, in a
financial subsidiary. The assets of the subsidiary may not be consolidated with
the banks assets. The bank must also have policies and procedures to
assess financial subsidiary risk and protect the bank from such risks and
potential liabilities.

The Financial Services
Modernization Act also includes a new section of the Federal Deposit Insurance
Act governing subsidiaries of state banks that engage in activities as
principal that would only be permissible for a national bank to conduct in
a financial subsidiary. It expressly preserves the ability of a state bank to
retain all existing subsidiaries. Because Mississippi permits commercial banks
chartered by the state to engage in any activity permissible for national banks,
the state bank competitors of The First will be permitted to form subsidiaries
to engage in the activities authorized by the Financial Services Modernization
Act, to the same extent as The First. In order to form a financial subsidiary, a
state bank must be well-capitalized, and the state bank would be subject to the
same capital deduction, risk management and affiliate transaction rules as
applicable to national banks.

---

During January 2001, the
Company made application and was approved by the Federal Reserve Bank to become
a financial holding company; however, the Company has no current plans to pursue
expanded activities under the Financial Services Modernization Act. The
Companys management has not determined at this time whether it will seek
to form a financial subsidiary. The Company is examining its strategic business
plan to determine whether, based on market conditions, the relative financial
conditions of the Company and its subsidiaries, regulatory capital requirements,
general economic conditions, and other factors, the Company desires to utilize
any of its expanded powers provided in the Financial Services Modernization Act.

The Company and the Bank do
not believe that the Financial Services Modernization Act will have a material
adverse effect on operations in the near-term. However, to the extent that it
permits banks, securities firms, and insurance companies to affiliate, the
financial services industry may experience further consolidation. The Financial
Services Modernization Act is intended to grant to community banks certain
powers as a matter of right that larger institutions have accumulated on an ad
hoc basis. Nevertheless, this act may have the result of increasing the amount
of competition that the Company and the Bank face from larger institutions and
other types of companies offering financial products, many of which may have
substantially more financial resources than the Company and the Bank.

From time to time, various
bills are introduced in the United States Congress with respect to the
regulation of financial institutions. Certain of these proposals, if adopted,
could significantly change the regulation of banks and the financial services
industry. The Company cannot predict whether any of these proposals will be
adopted or, if adopted, how these proposals would affect the Company.

The First has a main office
located west of the city of Hattiesburg, Mississippi, in Lamar County. The main
office is located in a 13,000 square foot facility which the Company constructed
and opened in January 1997 on a two acre plot of land at the southwest corner of
U.S. Highway 98 and Old Highway 11. The First also has a branch office located
on Highway 15 North in the city of Laurel, Mississippi, one on Highway 589 in
the city of Purvis, Mississippi, which is in Lamar County, a fourth office in a
3,300 square foot facility located at the intersection of Lincoln Road and South
28th Avenue in Hattiesburg, a fifth office located at 3318 Hardy Street in
Hattiesburg, a sixth office located on Hwy 43 South, Picayune, MS in a 3,800 sq.
ft. facility , as well as a seventh office located at 1126 Jackson Ave in
Pascagoula, MS.

The Company believes that
the Banks facilities will adequately serve their needs.

Neither the Company nor the
bank is a party to, nor is any of their property the subject of, any material
pending legal proceedings incidental to the business of the Company or the Bank.

No matter was submitted to
a vote of security holders during the fourth quarter of the fiscal year covered
by this report.

---

In response to this Item,
the information contained on page 44 though 45 of the Companys Annual
Report to Shareholders for the year ended December 31, 2005, is incorporated
herein by reference.

In response to this Item,
the information contained on pages 5 through 23 of the Companys Annual
Report to Shareholders for the year ended December 31, 2005, is incorporated
herein by reference.

In response to this Item,
the information contained on pages 24 through 50 of the Companys Annual
Report to Shareholders for the year ended December 31, 2005, is incorporated
herein by reference.

Not applicable.

As of December 31, 2005,
(the Evaluation Date), we carried out an evaluation, under the
supervision 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, as of the end
of the period covered by this report. 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 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 year ended December 31, 2005, that has materially affected,
or is reasonably likely to affect, our internal control over financial
reporting.

Not Applicable.

In response to this Item,
the information contained on or about pages 3 through 7 and pages 13 through 15
of the Companys Proxy Statement for the Annual Meeting of Shareholders to
be held on May 18, 2006, is incorporated herein by reference.

---

The Companys Board of
Directors has adopted a Code of Ethics that applies to the Companys
principal executive officer, principal financial officer, principal accounting
officer, or persons performing similar functions. A copy of this Code of Ethics
can be found at the Companys internet website at www.thefirstbank.com. The
Company intends to disclose any amendments to its Code of Ethics, and any waiver
from a provision of the Code of Ethics granted to the Companys principal
executive officer, principal financial officer, principal accounting officer, or
persons performing similar functions, on the Companys internet website
within five business days following such amendment or waiver. The information
contained on or connected to the Companys internet website is not
incorporated by reference into this Form 10-KSB and should not be considered
part of this or any other report that we file with or furnish to the SEC.

The information contained
on page 14 of the Companys Proxy Statement for the Annual Meeting of
Shareholders to be held on May 18, 2006, is incorporated herein by reference.
The Board of Directors has determined that there is at least one independent
audit committee financial expert, J. Douglas Seidenburg, serving on the Audit
Committee, as the terms independent and audit committee financial expert are
used in pertinent Securities and Exchange Commission laws and regulations.

In response to this Item,
the information contained on pages 7 through 9 of the Companys Proxy
Statement for the Annual Meeting of Shareholders to be held on May 18, 2006, is
incorporated herein by reference.

In response to this Item,
the information contained on pages 10 through 12 of the Companys Proxy
Statement for the Annual Meeting of Shareholders to be held on May 18, 2006, is
incorporated herein by reference.

In response to this Item,
the information contained on page 14 of the Companys Proxy Statement for
the Annual Meeting of Shareholders to be held on May 18, 2006, is incorporated
herein by reference.

`Exhibit Number         Description
    --------------         -----------

         3.1               Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit
                           3.1 to the Company's Registration Statement No. 33-94288 on Form S-1).

         3.2               Bylaws (incorporated by reference to Exhibit 3.2 to the Company's Registration
                           Statement No. 33-94288 on Form S-1).

         4.1               Provisions in the Company's Articles of Incorporation and Bylaws defining the rights
                           of holders of the Company's Common Stock (incorporated by reference to Exhibit 4.1 to
                           the Company's Registration Statement No. 33-94288 on Form S-1).

         4.2               Form of Certificate of Common Stock (incorporated by reference to Exhibit 4.2 to the
                           Company's Registration Statement No. 33-94288 on Form S-1).`

---

`10.5              Amended and restated employment agreement dated November 20, 1995, by and between
                           David E. Johnson and the Company (incorporated by reference to Exhibit 10.7 of the
                           Company's Form 10-KSB for the fiscal  year ended December 31, 1995, File No. 33-94288).

         10.6              Employment Agreement dated June 10, 1998 by and between the Company and The First
                           National Bank of the Pine Belt and William M. Renovich, Jr. (incorporated by reference
                           to Exhibit 10.1 to the Company's  Current Report on Form 8-K filed June 25, 1998).

         10.7              Bank Development Agreement dated June 19, 1998 by and among the Company and the
                           organizers of The First National Bank of the Pine Belt (incorporated by reference to
                           Exhibit 10.2 to the Company's Current Report on Form 8-K filed June 25, 1998).

         10.8              First Bancshares, Inc. 1997 Stock Option Plan as of March 18, 1997 (incorporated by
                           reference to Exhibit 10.7 of the Company's Form 10-KSB for the fiscal year ended
                           December 31, 1996, File No. 33-94288).

         10.9              Agreement to Repurchase Stock by and among The First Bancshares, Inc., Nick Welch and
                           David Johnson  (incorporated by reference to Exhibit 10.9 to the Company's
                           Registration Statement No. 333-102908 on Form S-2).

         13                The Company's 2005 Annual Report

         21.1              Subsidiaries of the Company (incorporated by reference to Exhibit 21.1 to the
                           Company's Form 10-KSB filed March 31, 1999).

         23                Consent of Independent Registered Public Accounting Firm

         31                Rule 13a-14(a)/15d-14(a) Certifications

         32                Section 1350 Certifications`

In response to this Item,
the information contained on page 15 of the Companys Proxy Statement for
the Annual Meeting of Shareholders to be held on May 18, 2006, is incorporated
herein by reference.

---

`SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                                              THE FIRST BANCSHARES, INC.


Date: March 23, 2006                                          By:    /s/  David E. Johnson
                                                                 ----------------------------------
                                                                     David E. Johnson
                                                                     Chief Executive Officer (Principal
                                                                     Executive Officer)

Date: March 23, 2006                                          By:    /s/ Donna T. Rutland
                                                                 ----------------------------------
                                                                     Donna T. Rutland
                                                                     Executive VP and Chief Financial
                                                                     Officer
                                                                     (Principal Financial and Principal Accounting
                                                                     Officer)


         In accordance with the Exchange Act, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.

SIGNATURES                                           CAPACITIES                    DATE
----------                                           ----------                    ----

   /s/ M. Ray "Hoppy" Cole, Jr.                      Director                    3/23     , 2006
--------------------------------------                                          ----------

   /s/ David Bomboy                                  Director                    3/23     , 2006
--------------------------------------                                          ----------

  /s/ Ricky Gibson                                   Director                    3/23     , 2006
--------------------------------------                                          ----------

 /s/ Fred McMurry                                    Director                    3/23     , 2006
--------------------------------------                                          ----------

 /s/ Trent Mulloy                                    Director                    3/23     , 2006
--------------------------------------                                          ----------

   /s/ Gerald Patch                                  Director                    3/23     , 2006
--------------------------------------                                          ----------

   /s/ Ted Parker                                    Director                    3/23     , 2006
--------------------------------------                                          ----------

   /s/ Doug Seidenburg                               Director                    3/23     , 2006
--------------------------------------                                          ----------

   /s/ A. L. Smith                                   Director                    3/23     , 2006
--------------------------------------                                          ----------`

---

`/s/ Andrew Stetelman                              Director                    3/23     , 2006
--------------------------------------                                          ----------

   /s/ Charles Lightsey                              Director                    3/23     , 2006
--------------------------------------                                          ----------

   /s/ Ralph T. Simmons                              Director                    3/23     , 2006
--------------------------------------                                          ----------

  /s/  Greg Mitchell                                 Director                    3/23     , 2006
--------------------------------------                                          ----------

  /s/  Peeler Lacey                                  Director                    3/23     , 2006
--------------------------------------                                          ----------

   /s/ David E. Johnson                              CEO and Director            3/23     , 2006
--------------------------------------               (Principal Executive       ----------
                                                     Officer)

   /s/ Donna T. Rutland                              Executive VP & Chief        3/23     , 2006
--------------------------------------               Financial Officer          ----------
                                                     (Principal Financial and
                                                     Accounting Officer)`