First South Bancorp, Inc. Reports Increases in June 30, 2014 Linked Quarterly Net Income, Loans and Assets Outstanding

WASHINGTON, N.C., July 17, 2014 /PRNewswire/ -- First South Bancorp, Inc. (NASDAQ: FSBK) (the "Company"), the parent holding company of First South Bank (the "Bank"), reports its unaudited operating results for the quarter and six months ended June 30, 2014.

For the 2014 second quarter, net income increased 16.7% to $1.29 million, or $0.13 per diluted common share, from net income of $1.10 million, or $0.11 per diluted common share for the linked 2014 first quarter.  The improvement in net income on a linked quarter basis reflects increases in net interest income and non-interest income, a decline in non-interest expense and is partially offset by a higher loan loss provision.  Pre-tax, pre-provision operating earnings, which exclude net gains on the sale of securities and other real estate owned (OREO), were $2.24 million for the current quarter compared with $1.72 million for the quarter ended March 31, 2014, reflecting a $527,000 or 30.69% increase. 

Net income and earnings per diluted common share for the current quarter declined by $479,000 and $0.05, respectively, when compared with $1.76 million or $0.18 per diluted common share for the quarter ended June 30, 2013.  However, on a pre-tax, pre-provision operating basis, current quarter results were $82,000 higher than the $2.16 million from a year ago as the prior year results included over $567,000 in non-recurring income items.     

Net income for the first six months of 2014 was $2.39 million, or $0.25 per diluted common share, compared to net income of $3.33 million, or $0.34 per diluted common share earned in the first six months of 2013.  Earnings for the current six month period were negatively impacted by a decline in net interest income and non-interest revenue, an increase in the loan loss provisions and partially offset by a decrease in non-interest expenses.  Pre-tax, pre-provision operating earnings for the current six-month period declined by $1.00 million to $3.96 million from $4.96 million a year ago attributed entirely to a $1.03 million decline in mortgage-related revenue. 

Bruce Elder, President and CEO, commented, "Our core earnings, which exclude certain non-recurring revenue items, continues to improve despite the slowdown in mortgage origination activity.  We have shown modest, yet quality, net growth in our loan and lease portfolio for four consecutive quarters.  Mortgage origination activity during the first half of 2014 is down significantly from the prior year period as the volume of refinances has declined and not been replaced to an equal extent by new purchases.  We continue to focus on enhancing net interest income through earning asset growth, increasing non-mortgage related sources of non-interest income and efficiently managing operating expenses to improve bottom-line results." 

Mr. Elder commented further, "During the quarter ended June 30, 2014, we paid our second consecutive quarterly cash dividend of $0.025 per share.  Our dividend payments for the six months ended June 30, 2014 represent a 20% payout ratio of diluted earnings per share. The payment of these quarterly dividends reflects the Company's strong capital position, improved financial performance and our confidence in the future."

Net Interest Income

Net interest income for the 2014 second quarter increased to $6.57 million from $6.43 million for the linked 2014 first quarter, but was below the $6.72 million posted for the 2013 second quarter.  Net interest income for the first six months of 2014 declined to $13.00 million, from $13.85 million for the comparative 2013 six month period.  The tax equivalent net interest margin declined 8 basis points to 4.16% for the 2014 second quarter, from 4.24% for the linked 2014 first quarter, and fell 18 basis points when compared to the 4.34% for the 2013 second quarter.  The tax equivalent net interest margin for the first six months of 2014 declined by 16 basis points to 4.20%, from 4.36% for the comparative 2013 six month period. 

The increase in net interest income from the linked 2014 first quarter is due primarily to an increase in the volume of earning assets, which was partially offset by an increase in the volume of interest-bearing liabilities and a reduction in the yield on earning assets.  The decline in net interest income from the comparative prior year period is due primarily to lower yields on earning assets and partially offset by increased earning asset volume.  The decline in net interest income for the comparative six month periods is due primarily to lower yields on earning assets.   We anticipate our margin may experience contraction pressure as we grow our earning asset base in this historically low interest rate environment and as we take steps to protect our balance sheet from exposure to rising interest rates.

Asset Quality and Provisions for Loan Losses

Total nonperforming assets were $17.4 million, or 2.4% of total assets at June 30, 2014, compared to $15.4 million or 2.3% of total assets at December 31, 2013, and $17.2 million or 2.5% of total assets at June 30, 2013.  Total loans in non-accrual status were $7.8 million at June 30, 2014, compared to $5.6 million at December 31, 2013 and $7.4 million at June 30, 2013.  The second quarter of 2014 increase in non-accrual loans included a relationship of $1.7 million for which an agreement has been negotiated and is anticipated to be resolved during the third quarter.  Our level of OREO declined to $8.7 million at June 30, 2014, from $9.4 million at December 31, 2013 and $9.1 million at June 30, 2013. The Bank continues to place improving asset quality metrics as a key component of its short-term and long-term performance objectives.   

The allowance for loan and lease losses (ALLL) was $7.9 million at June 30, 2014, representing 1.69% of loans and leases held for investment, compared to $7.6 million at December 31, 2013, also 1.69% of loans and leases held for investment, and $8.6 million at June 30, 2013, or 1.98% of loans and leases held for investment.  The Bank recorded $450,000 of provision for credit losses in the 2014 second quarter, $250,000 in the first quarter of 2014, and none in the comparative 2013 second quarter.  During the first six months of 2014, the Bank recorded $700,000 of provision for credit losses, compared to $400,000 in the first six months of 2013.  Management believes the ALLL remains adequate.

Non-Interest Income

Total non-interest income is $2.17 million for the 2014 second quarter compared with $1.92 million for the linked 2014 first quarter and $2.92 million for the 2013 second quarter. 

Deposit fees and service charges increased to $1.14 million for the 2014 second quarter representing 52.5% of total non-interest income, from $927,000 earned in the linked 2014 first quarter and $1.08 million in the comparative 2013 second quarter, representing 48.3% and 36.9% of total non-interest income, respectively. We anticipate additional service charge revenue from deposits going forward as we focus on growing our deposit base through new product offerings and customer acquisition.

Total non-interest income generated from the sale and servicing of mortgage loans and loan fees is $612,000 for the 2014 second quarter representing 28.2% of total non-interest income, compared with $512,000 earned in the linked 2014 first quarter and $988,000 for the 2013 second quarter, representing 26.7% and 33.8% of total non-interest income, respectively.  Net gains recognized from the sale of mortgage loans is $313,000 for the 2014 second quarter compared with $235,000 for the linked 2014 first quarter and $652,000 for the 2013 second quarter.  Mortgage originations increased in the second quarter of 2014 from levels experienced during the first quarter, but remain below levels from a year ago.  Revenue generated from the servicing of mortgage loans increased to $250,000 for the 2014 second quarter, from $226,000 earned in the linked 2014 first quarter and $238,000 for the comparative 2013 second quarter.    

Net gains recognized from the sale of OREO is $34,000 for the 2014 second quarter, compared to $39,000 for the linked 2014 first quarter and $287,000 for the comparative 2013 second quarter, as the Bank continues in its efforts of disposing of these nonperforming assets. 

There were no investment security sales during the 2014 second quarter. Net gains from the sale of investment securities were $14,000 for the linked 2014 first quarter and $281,000 for the comparative 2013 second quarter. 

Included in other non-interest income is revenue from investments in Bank-owned life insurance (BOLI) of $132,000 for both the 2014 second quarter and the linked 2014 first quarter, respectively, compared to $50,000 for the 2013 second quarter. 

Total core non-interest income, excluding net gains from the sale of OREO and investment securities, increased to $2.14 million for the 2014 second quarter, from to $1.87 million for the linked 2014 first quarter, and declined when compared to $2.35 million for the 2013 second quarter due primarily to lower gains on the sale of originated mortgage loans. 

For the first six months of 2014, total non-interest income was $4.09 million, compared to $5.40 million for the first six months 2013.  Fees and service charges on deposits remained consistent at $2.07 million for the first six months of 2014, compared to $2.10 million for the 2013 six month period. The Bank and the mortgage industry overall, has experienced a slowdown in mortgage activity due to the current economic conditions and increases in mortgage rates from their recent historic low levels.  As a result, revenue generated from the sale and servicing of mortgage loans and loan fees declined by $1.03 million to $1.12 million for the first six months of 2014, from $2.15 million for 2013 six month period.  Net gains recognized from the sale of OREO and investment securities declined to $73,000 and $14,000, respectively, for the first six months of 2014, from $335,000 and $281,000, respectively, for the first six months of 2013, reflecting a reduced volume of sales activity in the respective periods.  BOLI earnings increased to $265,000 for the first six months of 2014, compared to $85,000 for the first six months of 2013.

Non-Interest Expense

Total non-interest expense declined to $6.46 million for the 2014 second quarter, from $6.58 million for the linked 2014 first quarter and $6.91 million for the comparative 2013 second quarter.  For the first six months of 2014, total non-interest expense declined to $13.04 million, from $13.67 million reported in the first six months of 2013.

Compensation and benefit expenses, the largest component of non-interest expenses, remains relatively consistent at $3.82 million for the 2014 second quarter, compared to $3.80 million for the linked 2014 first quarter and $3.86 million for the 2013 second quarter.  For the first six months of 2014, compensation expense declined marginally to $7.63 million, from $7.69 million reported in the first six months of 2013. The Bank will continue to manage staffing levels to ensure we meet the ongoing needs of our customers and to support our future growth.

FDIC insurance premiums declined to $139,000 for the 2014 second quarter, from $145,000 for the linked 2014 first quarter and from $236,000 for the comparative 2013 second quarter.  For the first six months of 2014, FDIC insurance declined to $284,000, from $472,000 reported in the first six months of 2013.  The decline in FDIC insurance premiums reflects a reduction in the deposit insurance assessment calculation base. 

Data processing costs declined to $568,000 for the 2014 second quarter, from to $586,000 for the linked 2014 first quarter and $590,000 for the 2013 second quarter.  For the first six months of 2014, data processing costs declined to $1.15 million, from $1.20 million reported in the first six months of 2013.  Data processing costs fluctuate in conjunction with changes in the number of customer accounts and transaction activity volumes.

Expenses attributable to ongoing maintenance, property taxes and insurance, and valuation adjustments for OREO properties declined to $107,000 for the 2014 second quarter, from $121,000 for the linked 2014 first quarter and from $545,000 for the comparative 2013 second quarter.  For the first six months of 2014, OREO expenses declined significantly to $228,000, from $717,000 for the first six months of 2013.

Premises and equipment, advertising, amortization of intangibles and other expense, in aggregate, were also relatively consistent during the respective three and six month reporting periods.

Balance Sheet 

Total assets increased to $711.6 million at June 30, 2014, from $674.7 million at December 31, 2013.  The increase is the result of growth in earning assets, primarily through growth in loans and leases held for investment and securities available for sale.  

Loans and leases held for investment grew by $19.0 million during the six months ended June 30, 2014.  As a result of this increase, total loans and leases held for investment increased to $470.0 million at June 30, 2014, from $451.0 million at December 31, 2013. 

The investment securities portfolio increased to $172.5 million at June 30, 2014, from $150.8 million at December 31, 2013.  During this current period, the Bank implemented a leverage strategy for the investment portfolio.  This strategy adds bonds of similar quality, structure and duration to our portfolio that will enhance income generation.

During the six months ended June 30, 2014, the Bank had a $3.8 million net increase in its investment in BOLI, to $14.9 million at June 30, 2014, from $11.1 million at December 31, 2013. The investment returns from the BOLI will offset a portion of the cost of providing benefit plans to our employees.

Total deposits increased to $592.5 million at June 30, 2014, from $585.7 million at December 31, 2013.  Total non-maturity deposits increased by $25.4 million to $362.9 million at June 30, 2014, from $337.5 million at December 31, 2013, and were partially offset by an $18.6 million decline in certificates of deposits.  Certificates of deposit declined to $229.6 million or 38.8% of total deposits at June 30, 2014, from $248.2 million, or 42.4% of total deposits at December 31, 2013. 

FHLB advances increased to $25.5 million at June 30, 2014, compared to none at December 31, 2013, reflecting $10.5 million of short-term advances, and $15.0 million of long-term fixed rate funding acquired in connection with a strategy targeted at hedging the potential impact of rising interest rates on future earnings.  The Bank uses FHLB borrowings as a supplemental funding source for earning asset growth, for providing an effective means of managing its overall cost of funds, and to manage its exposure to interest rate risk.   

Stockholders' equity increased to $79.2 million at June 30, 2014, from $74.9 million at December 31, 2013.  This increase reflects the $2.4 million of net income earned for the six months ended June 30, 2014 and a $2.8 million increase in accumulated other comprehensive income resulting from the mark-to-market adjustment of the available-for-sale securities portfolio, net of $483,000 dividend payments, and $457,000 used to acquire 55,876 shares of the Company's common stock pursuant to a previously announced repurchase plan. 

The tangible equity to assets ratio was 10.53% at June 30, 2014, compared to 10.47% at December 31, 2013.  There were 9,598,007 common shares outstanding at June 30, 2014, compared to 9,653,883 shares outstanding at December 31, 2013, reflecting the net effect of shares purchased through the stock repurchase program.  The tangible book value per common share increased to $7.81 at June 30, 2014, from $7.32 at December 31, 2013.

Key Performance Ratios 

Some of our key performance ratios are the return on average assets (ROA), the return on average equity (ROE) and the efficiency ratio.  ROA is 0.73% for the 2014 second quarter, compared with 0.66% for the linked 2014 first quarter and 1.03% for the 2013 second quarter.  ROE is 6.61% for the 2014 second quarter compared with 5.89% for the linked 2014 first quarter and 9.22% for the 2013 second quarter.  The efficiency ratio (noninterest expenses as a percentage of net interest income plus noninterest income) improved to 72.77% for the 2014 second quarter, from 77.68% for the linked 2014 first quarter, but was higher than the 71.69% for the 2013 second quarter.  The efficiency ratio measures the proportion of net operating revenues that are absorbed by overhead expenses.

First South Bank has been serving the citizens of eastern and central North Carolina since 1902 and offers a variety of financial products and services, including a leasing company.  Securities brokerage services are made available through an affiliation with an independent broker/dealer. The Bank operates through its main office headquartered in Washington, North Carolina, and has 26 full service branch offices located throughout eastern and central North Carolina. 

The Company's common stock symbol as traded on the NASDAQ Global Select Market is "FSBK".

Forward-Looking Statements

Statements contained in this release, which are not historical facts, are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors which include the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates, the effects of competition, and including without limitation to other factors that could cause actual results to differ materially as discussed in documents filed by the Company with the Securities and Exchange Commission from time to time.

Certain amounts in the unaudited Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2013 have been reclassified to conform with the presentation as of and for the Three and Six Months Ended June 30, 2014.  The reclassifications had no effect on previously reported net income.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States. First South Bancorp, Inc.'s management uses these "non-GAAP" measures in their analysis of the Company's performance. Management believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods as well as demonstrating the effects of significant gains and charges in the current period. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. See the attached disclosures for a reconciliation of any non-GAAP measures to the most directly comparable GAAP measure.

(NASDAQ: FSBK)

For more information contact:

Bruce Elder (CEO)

(252) 940-4936

Scott McLean (CFO)

(252) 940-5016

Website: www.firstsouthnc.com

 

First South Bancorp, Inc. and Subsidiary

Consolidated Statements of Financial Condition











June 30,



December 31,




2014



2013

Assets



(unaudited)



(*)








Cash and due from banks


$

12,375,471


$

11,816,071

Interest-bearing deposits with banks



5,282,836



12,419,244

Investment securities available for sale, at fair value



171,961,212



150,300,079

Investment securities held to maturity



506,740



506,176

Loans held for sale:







   Mortgage loans



4,714,812



2,992,017

           Total loans held for sale



4,714,812



2,992,017








Loans and leases held for investment



470,001,128



450,960,277

   Allowance for loan and lease losses



(7,925,751)



(7,609,467)

           Net loans and leases held for investment



462,075,377



443,350,810








Premises and equipment, net



11,671,087



11,759,521

Other real estate owned



8,729,188



9,353,835

Federal Home Loan Bank stock, at cost



1,754,000



848,800

Accrued interest receivable



2,418,075



2,334,944

Goodwill



4,218,576



4,218,576

Mortgage servicing rights



1,179,897



1,219,623

Identifiable intangible assets



-



7,860

Income tax receivable



2,628,640



2,901,062

Bank-owned life insurance



14,858,921



11,094,182

Prepaid expenses and other assets



7,172,629



9,599,143








          Total assets


$

711,547,461


$

674,721,943








Liabilities and Stockholders' Equity














Deposits:







  Non-interest bearing demand


$

97,733,716


$

96,445,049

  Interest bearing demand



179,453,432



171,548,658

  Savings



85,703,122



69,542,654

  Large denomination certificates of deposit



104,313,575



123,492,907

  Other time



125,256,744



124,674,588

          Total deposits



592,460,589



585,703,856








Borrowed money



25,500,000



-

Junior subordinated debentures



10,310,000



10,310,000

Other liabilities



4,127,134



3,849,944

          Total liabilities



632,397,723



599,863,800















Common stock, $.01 par value, 25,000,000 shares authorized;







   9,598,007 and 9,653,883 shares outstanding, respectively



95,980



96,539

Additional paid-in capital



35,838,115



35,809,397

Retained earnings



40,297,998



38,849,326

Accumulated other comprehensive income



2,917,645



102,881

           Total stockholders' equity



79,149,738



74,858,143








           Total liabilities and stockholders' equity


$

711,547,461


$

674,721,943








(*) Derived from audited consolidated financial statements







 

 

 

First South Bancorp, Inc. and Subsidiary

Consolidated Statements of Operations

Three and Six Months Ended June 30, 2014 and 2013

(unaudited)


















Three Months Ended



Six Months Ended





June 30



June 30,





2014



2013



2014



2013















Interest income:














  Interest and fees on loans



$

5,969,398


$

6,107,467


$

11,898,632


$

12,660,156

  Interest on investments and deposits




1,248,271



1,327,449



2,394,082



2,669,046

           Total interest income




7,217,669



7,434,916



14,292,714



15,329,202















Interest expense:














  Interest on deposits




526,343



625,772



1,086,052



1,296,497

  Interest on borrowings




44,428



882



45,112



7,058

  Interest on junior subordinated notes




81,359



89,125



161,280



176,340

           Total interest expense




652,130



715,779



1,292,444



1,479,895















Net interest income




6,565,539



6,719,137



13,000,270



13,849,307

Provision for credit losses




450,000



-



700,000



400,000

           Net interest income after provision for credit losses




6,115,539



6,719,137



12,300,270



13,449,307















Non-interest income:














  Deposit fees and service charges




1,139,262



1,076,753



2,066,209



2,095,447

  Loan fees and charges




41,425



39,109



78,557



79,618

  Mortgage loan servicing fees




250,107



238,038



476,428



633,738

  Gain on sale and other fees on mortgage loans 




362,016



749,605



648,069



1,519,217

  Gain on sale of other real estate, net




33,999



286,593



73,419



334,834

  Gain on sale of investment securities




-



280,511



13,509



280,511

  Other income




343,775



249,150



732,327



452,175

           Total non-interest income




2,170,584



2,919,759



4,088,518



5,395,540















Non-interest expense:














  Compensation and fringe benefits




3,823,779



3,857,822



7,627,777



7,691,296

  Federal deposit insurance premiums




139,022



236,350



283,620



472,300

  Premises and equipment




831,016



749,000



1,657,161



1,485,397

  Advertising




105,579



39,116



169,012



82,062

  Data processing




568,215



589,620



1,153,808



1,196,037

  Amortization of intangible assets




-14,592



120,254



108,212



238,319

  Other real estate owned expense




107,183



544,889



228,488



717,184

  Other




898,027



772,850



1,812,950



1,784,178

           Total non-interest expense




6,458,229



6,909,901



13,041,028



13,666,773















Income before income tax expense




1,827,894



2,728,995



3,347,760



5,178,074

Income tax expense




542,062



964,339



959,925



1,847,008















NET INCOME



$

1,285,832


$

1,764,656


$

2,387,835


$

3,331,066





























Per share data: 














Basic earnings per share



$

0.13


$

0.18


$

0.25


$

0.34

Diluted earnings per share



$

0.13


$

0.18


$

0.25


$

0.34

Dividends per share



$

0.025


$

0.00


$

0.050


$

0.00

Average basic shares outstanding




9,629,040



9,751,271



9,640,736



9,751,271

Average diluted shares outstanding




9,648,158



9,757,338



9,659,572



9,755,758

 

 

 

First South Bancorp, Inc.


Supplemental Financial Data (Unaudited)






















Quarter to Date


Year to Date





6/30/2014


3/31/2014


12/31/2013


9/30/2013


6/30/2013


6/30/2014


6/30/2013




           (dollars in thousands except per share data)

Consolidated balance sheet data:
















Total assets


$

711,547

$

700,764

$

674,722

$

682,015

$

680,082

$

711,547

$

680,082


















Loans held for sale:


$

4,715

$

5,649

$

2,992

$

9,183

$

13,746

$

4,715

$

13,746


















Loans held for investment:

















Mortgage


$

69,454

$

66,630

$

69,006

$

68,125

$

76,751

$

69,454

$

76,751


Commercial



322,775


317,711


305,160


296,218


283,936


322,775


283,936


Consumer



66,122


67,621


68,615


68,537


66,637


66,122


66,637


Leases



11,650


10,123


8,179


7,467


6,722


11,650


6,722


    Total loans held for investment



470,001


462,085


450,960


440,347


434,046


470,001


434,046

Allowance for loan and lease losses



(7,926)


(7,804)


(7,609)


(7,707)


(8,604)


(7,926)


(8,604)

Net loans held for investment


$

462,075

$

454,281

$

443,351

$

432,640

$

425,442

$

462,075

$

425,442


















Cash & interest bearing deposits


$

17,658

$

22,703

$

24,235

$

37,617

$

23,148

$

17,658

$

23,148

Investment securities



172,468


166,072


150,806


149,337


162,336


172,468


162,336

Premises and equipment



11,671


11,561


11,760


11,759


11,879


11,671


11,879

Goodwill



4,219


4,219


4,219


4,219


4,219


4,219


4,219

Mortgage servicing rights



1,180


1,119


1,220


1,268


1,271


1,180


1,271


















Deposits:
















Non-interest checking


$

97,734

$

98,419

$

96,445

$

99,350

$

92,540

$

97,734

$

92,540

Interest checking



133,512


129,798


128,161


129,675


133,470


133,512


133,470

Money market



45,941


45,771


43,388


43,457


44,496


45,941


44,496

Savings



85,703


79,018


69,543


60,576


49,173


85,703


49,173

Certificates



229,571


239,394


248,167


258,573


270,149


229,571


270,149


Total deposits


$

592,461

$

592,400

$

585,704

$

591,631

$

589,828

$

592,461

$

589,828


















Borrowings


$

25,500

$

17,000

$

0

$

0

$

0

$

25,500

$

0

Junior subordinated debentures



10,310


10,310


10,310


10,310


10,310


10,310


10,310

Stockholders' equity



79,150


77,166


74,858


75,028


73,888


79,150


73,888


















Consolidated earnings summary:
















Interest income


$

7,218

$

7,075

$

7,123

$

7,220

$

7,435

$

14,293

$

15,329

Interest expense



652


640


672


694


716


1,292


1,480

Net interest income



6,566


6,435


6,451


6,526


6,719


13,001


13,849

Provision for credit losses



450


250


685


0


0


700


400

Noninterest income



2,170


1,918


2,306


2,706


2,920


4,088


5,396

Noninterest expense



6,458


6,583


6,442


6,928


6,910


13,041


13,667

Income before taxes



1,828


1,520


1,630


2,304


2,729


3,348


5,178

Income tax expense 



542


418


486


767


964


960


1,847

Net income 


$

1,286

$

1,102

$

1,144

$

1,537

$

1,765

$

2,388

$

3,331


















Adjusted pre-tax pre-provision operating
















 earnings (non-GAAP):
















Income before taxes


$

1,828

$

1,520

$

1,630

$

2,304

$

2,729

$

3,348

$

5,178

Provision for credit losses



450


250


685


0


0


700


400

Pre-tax pre-provision net income



2,278


1,770


2,315


2,304


2,729


4,048


5,578

Securities gains



0


14


0


268


281


14


281

OREO gains (net)



34


39


206


68


287


73


335

Adjusted pre-tax pre-provision operating

















earnings (non-GAAP)


$

2,244

$

1,717

$

2,109

$

1,968

$

2,161

$

3,961

$

4,962


















Per Share Data: 
















Basic earnings per share


$

0.13

$

0.11

$

0.12

$

0.16

$

0.18

$

0.25

$

0.34

Diluted earnings per share


$

0.13

$

0.11

$

0.12

$

0.16

$

0.18

$

0.25

$

0.34

Dividends per share


$

0.025

$

0.025

$

0.000

$

0.000

$

0.000

$

0.050

$

0.000

Book value per share


$

8.25

$

7.99

$

7.75

$

7.69

$

7.58

$

8.25

$

7.58

Tangible book value per share


$

7.81

$

7.56

$

7.32

$

7.26

$

7.14

$

7.81

$

7.14


















Average basic shares



9,629,040


9,652,804


9,727,175


9,751,271


9,751,271


9,640,736


9,751,271

Average diluted shares



9,648,158


9,671,557


9,737,495


9,757,881


9,757,338


9,659,572


9,755,758





















First South Bancorp, Inc.


Supplemental Financial Data (Unaudited)






















Quarter to Date


Year to Date





6/30/2014


3/31/2014


12/31/2013


9/30/2013


6/30/2013


6/30/2014


6/30/2013




           (dollars in thousands except per share data)

Performance ratios (tax equivalent):
















Yield on average earning assets



4.56%


4.66%


4.63%


4.69%


4.80%


4.61%


4.82%

Cost of interest bearing liabilities



0.49%


0.52%


0.53%


0.54%


0.56%


0.50%


0.57%

Net interest spread



4.07%


4.14%


4.10%


4.15%


4.24%


4.11%


4.25%

Net interest margin



4.16%


4.24%


4.20%


4.25%


4.34%


4.20%


4.36%

Avg earning assets to total avg assets



91.31%


91.76%


91.84%


91.66%


92.40%


91.53%


92.29%


















Return on average assets (annualized)



0.73%


0.66%


0.67%


0.90%


1.03%


0.70%


0.97%

Return on average equity (annualized)



6.61%


5.89%


5.96%


8.18%


9.22%


6.27%


8.62%

Efficiency ratio 



72.77%


77.68%


73.56%


75.05%


71.69%


75.17%


71.01%


















Average assets


$

705,393

$

679,608

$

681,690

$

680,741

$

688,897

$

692,500

$

695,353

Average earning assets


$

644,074

$

623,617

$

626,050

$

623,953

$

636,511

$

633,845

$

641,757

Average equity


$

78,724

$

76,682

$

76,231

$

74,569

$

76,754

$

77,703

$

77,959


















Equity/Assets



11.12%


11.01%


11.09%


11.00%


10.86%


11.12%


10.86%

Tangible Equity/Assets



10.53%


10.41%


10.47%


10.38%


10.24%


10.53%


10.24%


















Asset quality data and ratios:
















Nonaccrual loans:

















Non-TDR nonaccrual loans 

















  Earning


$

312

$

463

$

683

$

1,459

$

1,429

$

312

$

1,429


  Non-Earning



2,853


1,248


1,331


2,649


4,130


2,853


4,130


     Total Non-TDR nonaccrual loans


$

3,165

$

1,711

$

2,014

$

4,108

$

5,559

$

3,165

$

5,559


TDR nonaccrual loans

















   Past Due TDRs


$

3,303

$

2,188

$

1,821

$

1,336

$

990

$

3,303

$

990


   Current TDRs



1,326


1,583


1,739


1,677


818


1,326


818


      Total TDR nonaccrual loans


$

4,629

$

3,771

$

3,560

$

3,013

$

1,808

$

4,629

$

1,808

Total nonaccrual loans


$

7,794

$

5,482

$

5,574

$

7,121

$

7,367

$

7,794

$

7,367

Loans >90 days past due, still accruing



896


61


420


544


762


896


762

Other real estate owned 



8,729


9,013


9,354


8,996


9,069


8,729


9,069

Total nonperforming assets


$

17,419

$

14,556

$

15,348

$

16,661

$

17,198

$

17,419

$

17,198


















Allowance for loan and lease losses to 

















loans held for investment



1.69%


1.69%


1.69%


1.75%


1.98%


1.69%


1.98%


















Net charge-offs (recoveries)


$

328

$

56

$

782

$

898

$

(37)

$

384

$

(344)

Net charge-offs (recoveries) to total loans 



0.07%


0.01%


0.17%


0.20%


(0.01%)


0.08%


(0.08%)

Total nonaccrual loans to total loans



1.64%


1.17%


1.23%


1.58%


1.65%


1.64%


1.65%

Total nonperforming assets to total assets



2.45%


2.08%


2.27%


2.44%


2.53%


2.45%


2.53%

Total loans to total deposits



80.13%


78.96%


77.51%


75.98%


75.92%


80.13%


75.92%

Total loans to total assets



66.72%


66.75%


67.28%


65.91%


65.84%


66.72%


65.84%

Loans serviced for others


$

315,732

$

318,670

$

325,441

$

325,833

$

319,124

$

315,732

$

319,124

 

 

 

SOURCE First South Bancorp, Inc.



RELATED LINKS
http://www.firstsouthnc.com

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