First South Bancorp, Inc. Reports Record Loan Growth December 31, 2015 Quarterly and Year End Operating Results

Jan 27, 2016, 17:00 ET from First South Bancorp, Inc.

WASHINGTON, N.C., Jan. 27, 2016 /PRNewswire/ -- First South Bancorp, Inc. (NASDAQ: FSBK) (the "Company"), the parent holding company of First South Bank (the "Bank"), reports its unaudited financial results for the quarter and year ended December 31, 2015. 

Loan and lease growth during the fourth quarter remained strong for the Company as loans and leases held for investment increased $39.7 million to bring the total outstandings to $607.0 million at year end 2015.  Growth in loans and leases held for investment for 2015 totaled $126.6 million or a 26.3% increase over the $480.4 million outstanding at year end 2014.  This expansion in our loan base will be a strong catalysis of income growth for the Company into 2016.

For the 2015 fourth quarter, net income was $1.6 million or $0.16 per diluted common share, compared to net income of $1.2 million, or $0.13 per diluted common share for the linked 2015 third quarter and $149,000 or $0.02 per diluted common share for the comparative 2014 fourth quarter.  Net income for the year ended December 31, 2015 was $4.7 million, or $0.49 per diluted common share, compared to $4.1 million, or $0.42 per diluted common share for the year ended December 31, 2014.  Income for the fourth quarter and the year-ended 2014 reflects the impact of $1.7 million of one-time pre-tax transaction expenses associated with the acquisition of nine branch offices from Bank of America (BOA) in mid-December.

Bruce Elder, President and CEO, commented, "Our greatest challenges heading into 2015 were leveraging the large deposit base acquired through the branch purchase and introducing the First South Bank brand into new markets.  We were able to grow our loan and lease portfolios by $126.6 million or over 26% during 2015.  We achieved this record growth without sacrificing credit underwriting standards or taking undo interest rate risk.  Despite the growth in loans, asset quality has improved significantly as we enjoyed declines in both non-performing loans and non-performing assets.  Our efforts to leverage the branch acquisition are translating into better financial results as our monthly earnings in both November and December of 2015 exceed pre-acquisition levels." 

Mr. Elder continued, "We remain committed to gaining greater efficiency while at the same time evaluating new growth opportunities.  During 2015, we consolidated the deposits, loans and operations of several branches resulting in the closing of two offices and have announced three more such consolidations which will occur in February 2016.  We established a new full-service branch location in Williamston, North Carolina in late November broadening our geographic footprint into several agricultural rich counties of eastern North Carolina which have been underserved by a true community bank.  For 2016, we will continue to evaluate our markets and branch facilities, deploy a more targeted marketing effort to further enhance deposit market share and loan growth and invest in our digital banking platform."

Net Interest Income

Net interest income for the fourth quarter of 2015 increased to $7.7 million from $7.4 million for the linked 2015 third quarter and $6.8 million earned for the comparative 2014 fourth quarter.  Net interest income for the year ended 2015 improved to $29.4 million, a $3.0 million or 11.2% increase, from the $26.4 million generated during the comparative year ended 2014.  The tax equivalent net interest margin improved one basis point to 3.64% for the 2015 fourth quarter, from 3.63 % for the linked 2015 third quarter, and fell 14 basis points when compared to 3.78% for the 2014 fourth quarter.  The tax equivalent net interest margin for the year ended 2015 declined by 42 basis points to 3.64%, from 4.06% for the comparative year ended 2014. 

The increase in net interest income during the 2015 fourth quarter versus the linked third quarter was due to strong loan growth during the period.  Average loans held for investment increased $34.0 million during the fourth quarter of 2015, driving revenues higher.  While the overall yield on the loan portfolio fell two basis points when compared to the third quarter of 2015, the shift in our earning asset mix to more of a weighting in loans resulted in a one basis point increase to the Company's net interest margin for the quarter.

The increase in interest income in 2015 from both the comparative full year and fourth quarter 2014 periods is due to higher volumes of earning assets.  The 2015 loan growth coupled with the ramp up of investment securities in advance of the branch acquisition during the fourth quarter of 2014 fueled the earning asset growth.  The decline in net interest margin for the comparative full year period was due to the mix of average earning asset growth being more heavily weighted toward the investment portfolio.  We anticipate that given a stable to slow rising interest rate environment, the margin should experience slight improvement as the mix continues to shift to higher yielding assets.

Asset Quality and Provisions for Loan Losses

Total nonperforming assets were $9.4 million, or 1.0% of total assets at December 31, 2015, compared to $13.2 million or 1.5% of total assets at December 31, 2014.  Total loans in non-accrual status were $3.2 million at December 31, 2015, compared to $5.0 million at December 31, 2014.  Our level of OREO declined to $6.1 million at December 31, 2015, from $7.8 million at December 31, 2014.  The Bank continues to emphasize asset quality as a crucial driver of its short and long-term success.   

The allowance for loan and lease losses (ALLL) was $7.9 million at December 31, 2015, representing 1.30% of loans and leases held for investment, compared to $7.5 million at December 31, 2014, or 1.57% of loans and leases held for investment.  The Bank recorded $325,000 of provisions for credit losses in the 2015 fourth quarter, $335,000 in the linked 2015 third quarter, and none in the comparative 2014 fourth quarter.  During the years ended 2015 and 2014, the Bank recorded $800,000 and $1.1 million of provisions for credit losses for each of the years, respectively.  Management believes the ALLL remains adequate.

Non-Interest Income

Total non-interest income for the 2015 fourth quarter of $3.7 million was relatively consistent with the $3.8 million earned during the linked 2015 third quarter and above the $2.3 million earned for the 2014 fourth quarter.  The year-over-year increase is due primarily to additional service and fee income on deposit accounts associated with the acquisition of branch offices in mid-December of 2014, coupled with gains on the sale of investment securities realized in the fourth quarter of 2015. 

Deposit fees and service charges were $2.0 million for the 2015 fourth quarter compared to $2.1 million earned in the linked 2015 third quarter and $1.2 million in the 2014 fourth quarter.  Total non-interest income generated from the sale and servicing of mortgage loans and loan fees improved to $820,000 for the 2015 fourth quarter, compared with $792,000 in the linked 2015 third quarter and $603,000 for the 2014 fourth quarter.  As we sell the majority of our originated mortgage loans and retain the servicing rights, the increased volume of loan activity in 2015 versus that of 2014 has had a positive impact on recurring servicing revenue.  We continue to explore various strategies to enhance our non-interest income, including adding to the level of loans serviced for others.

Net gains recognized from the sale of OREO was $31,000 for the 2015 fourth quarter, compared to a $63,000 net loss for the linked 2015 third quarter and a $33,000 net gain for the comparative 2014 fourth quarter.

The Bank realized $463,000 of gains on investment security sales during the 2015 fourth quarter and $503,000 during the linked third quarter or the 2015.  There were no securities gains realized during the fourth quarter of 2014. 

Included in other non-interest income is revenue from investments in Bank-owned life insurance (BOLI) of $128,000 for the 2015 fourth quarter, $127,000 for the linked 2015 third quarter and $134,000 for the 2014 fourth quarter. 

For the year ended 2015, total non-interest income was $14.3 million, compared to $8.6 million for the year ended December 31, 2014.  This improved level of non-interest income is the result of higher service fees on a larger base of deposit accounts with the acquisition of nine branch offices, coupled with increased fees from the sales and servicing of mortgage loans, and gains realized from the sale of investment securities. 

Fees and service charges on deposits were $8.1 million for the current period compared to $4.4 million for the prior year period.  This increase in the level of service and fee income on deposit accounts is due primarily to additional income on deposit accounts associated with the acquisition of branch offices in mid-December of 2014.  During 2015 the Bank experienced an increase in mortgage activity due to the improving economic conditions and an accommodative interest environment.  As a result, revenue generated from the sale and servicing of mortgage loans and loan fees increased by $709,000 to $3.1 million for 2015, from $2.4 million for 2014.

Net gains recognized from the sale of OREO declined to $40,000 for the year ended 2015 from $115,000 in 2014.  The Bank realized $1.4 million of gains on investment security sales during 2015 compared to $14,000 for 2014.  BOLI earnings were $510,000 for 2015, compared to $531,000 for the year ended December 31, 2014. The investment returns from the BOLI offset a portion of the cost of providing benefit plans to our employees.

Non-Interest Expense

Total non-interest expenses were $9.1 million for the 2015 fourth quarter, compared to $9.0 million for the linked 2015 third quarter and $8.9 million for the 2014 fourth quarter.  For the year ended 2015, total non-interest expenses were $36.4 million, compared to $28.5 million reported for the year ended 2014.  The overall increase in the Company's non-interest expenses relative to historical levels is due to the infrastructure added to operate and support a larger asset and deposit base resulting from the acquisition of nine branch offices in mid-December of 2014.

Compensation and benefits expenses, the largest component of non-interest expenses, were $4.9 million for both the third and fourth quarters of 2015, and $4.4 million for the 2014 fourth quarter.  For the year ended 2015, compensation and benefits expense totaled $19.4 million, compared to $15.8 million reported in 2014.  Compensation and benefits expenses for the 2014 fourth quarter and the year ended 2014 includes $241,000 of acquisition expenses.   The Bank will continue to manage staffing levels to ensure we meet the ongoing needs of our customers and to support our future growth.

Premises and equipment expense was $1.4 million for the 2015 fourth quarter, compared to $1.3 million for the linked 2015 third quarter and $1.1 million for the 2014 fourth quarter.  For the year ended 2015, premises and equipment expense was $5.3 million, compared to $3.6 million reported in 2014.  The addition of nine new branch locations in December of 2014 has resulted in a higher level of occupancy costs for the Company.  Our continuing evaluation of current markets and facilities, as well as exploring new opportunities to expand our footprint, will impact future occupancy expenses.

FDIC insurance was $164,000 for the 2015 fourth quarter, compared to $163,000 for the linked 2015 third quarter and $145,000 for the 2014 fourth quarter.  For the year ended 2015, FDIC insurance was $609,000 versus $566,000 reported in 2014.  The change in volume of FDIC insurance is attributable to period-over-period growth in the Bank's balance sheet. 

Advertising and marketing expense was $222,000 for the 2015 fourth quarter, compared to $219,000 for the linked 2015 third quarter and $371,000 for the 2014 fourth quarter.  For the year ended 2015, advertising expense was $820,000, compared to $667,000 reported in 2014.  We anticipate advertising and marketing expenses to remain at approximately 2% of total revenues.

Data processing costs were $778,000 for the 2015 fourth quarter, compared to $819,000 for the linked 2015 third quarter and $604,000 for the 2014 fourth quarter.  For the years ended 2015 and 2014, data processing costs were $3.6 million and $2.3 million, respectively.  Data processing costs fluctuate in conjunction with changes in the number of customer accounts and transaction activity volumes and therefore, the full year addition of accounts and customers with the branch acquisition drove these costs above 2014 levels.

As the Bank's level of OREO on its books has fallen so have the expenses attributable to ongoing maintenance, property taxes and insurance for OREO properties.  These expenses declined to $69,000 for the 2015 fourth quarter, compared $89,000 for the linked 2015 third quarter and $123,000 for the comparative 2014 fourth quarter.  For the year ended 2015, total ongoing OREO expenses fell to $436,000 from $445,000 for the prior year.  Quarterly valuation adjustments were $100,000 for the 2015 fourth quarter, and $10,000 for the linked 2015 third quarter and $131,000 for the comparative 2014 fourth quarter.  Total OREO valuation adjustments were $195,000 for 2015 compared to $204,000 for the prior year.

Other general and administrative expense was $1.4 million for the 2015 fourth quarter, compared to $1.3 million for the linked 2015 third quarter and $2.0 million for the 2014 fourth quarter.  For the year ended 2015, other expenses were $5.5 million, compared to $4.6 million reported in 2014.  The year-over-year increase in these expenses is due to the operations of a larger banking franchise.  Other expenses for the 2014 fourth quarter and the year ended 2014 includes acquisition related expenses of $1.0 million.

Income tax expense was $484,000 for the 2015 fourth quarter, compared to $611,000 for the linked 2015 third quarter and $33,000 for the 2014 fourth quarter.  For the year ended 2015, income tax expense was $1.8 million, versus $1.3 million for 2014.  The effective income tax rates were 28.2% and 24.8% for the years ended 2015 and 2014, respectively.  Changes in income tax expense and marginal tax rates have been impacted by a variety of factors in both 2015 and 2014.  Taxes for the third quarter of 2015 includes a one-time $80,000 expense adjustment due a write down of our deferred tax asset given the impending reduction in the North Carolina corporate statutory tax rate for 2016.  The fourth quarter of 2014 tax expense was impacted by one-time expenses associated with the branch acquisition.

During the third quarter of 2015, the Company determined that its income tax expense associated with prior periods had been understated by a net amount of $434,000.  For the periods prior to 2014 the cumulative net income tax expense understatement was $651,000.  During 2014 the Company overstated income tax expense by $217,000.  As a result our deferred tax asset and our income tax receivable accounts have been adjusted to reflect the correction of this error, with a corresponding $434,000 reduction recorded to retained earnings.  These corrections are similarly reflected as an adjustment to retained earnings as of December 31, 2014 in the consolidated statement of changes in equity.

Balance Sheet 

Total assets increased to $946.3 million at December 31, 2015, from $885.4 million at December 31, 2014.  The $60.9 million increase in assets is the result of strong growth in our loans and leases held for investment.  Loans and leases held for investment totaled $607.0 million as of December 31, 2015, versus $480.4 million as of December 31, 2014, an increase of $126.6 million or 26.3%. 

The investment securities portfolio was reduced $44.0 million to $248.8 million as of December 31, 2015, from $292.8 million at December 31, 2014.  This reduction was the result of cash flows from scheduled amortization and maturities as well as sales of securities, with the proceeds used to support growth in loan outstandings.

Interest-bearing deposits with banks were reduced by $14.3 million during 2015 as cash was redeployed into the loan portfolio, and as a result, interest-bearing deposits as of December 31, 2015 totaled $18.6 million

The Bank did not make any additional BOLI investments during the year ended 2015.  BOLI as of December 31, 2015 totaled $15.6 million, a $510,000 increase in cash surrender life value over the $15.1 million of BOLI investments at December 31, 2014.  

Intangible assets decreased $287,000 to $6.1 million at December 31, 2015, from $6.4 million at December 31, 2014, reflecting the amortization of the core deposit intangible associated with the BOA transaction, which is anticipated to be amortized over a ten year period.

Total deposits as of December 31, 2015 were $811.3 million, an increase of $23.0 million from the $788.3 million of deposits as of the prior year end.  This growth was comprised of $17.3 million increases in non-maturity deposit categories and a $5.7 million increase in time deposits.  As anticipated, approximately 10% of the $172 million of deposits acquired in BOA transaction left the Bank in 2015. This attrition took place primarily during the first half of 2015 and was concentrated in non-interest bearing checking, interest bearing checking, and money market deposit categories.

As of December 31, 2015 the Bank had $37.0 million of FHLB advances outstanding versus none as of December 31, 2014.  The Bank uses FHLB borrowings as a supplemental funding source for earning asset growth.  Advances from the FHLB provide the Bank with an effective means of managing its overall cost of funds as well as a means to manage exposures to interest rate risk. 

Stockholders' equity increased to $82.2 million at December 31, 2015, from $80.0 million at December 31, 2014.  This increase reflects the $4.7 million of net income earned for the year ended December 31, 2015 net of a $721,000 decrease in accumulated other comprehensive income resulting from the mark-to-market adjustment of the available-for-sale securities portfolio, $953,000 of dividend payments, and $908,000 used to acquire 112,144 shares of the Company's common stock pursuant to a previously announced repurchase plan. 

The tangible equity to assets ratio was 8.04% at December 31, 2015, compared to 8.31% at December 31, 2014.  There were 9,489,222 common shares outstanding at December 31, 2015, compared to 9,598,007 shares outstanding at December 31, 2014, reflecting the net effect of shares purchased through the stock repurchase program.  The tangible book value per common share increased to $8.02 at December 31, 2015, from $7.67 at December 31, 2014.

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 0.67% for the 2015 fourth quarter, compared with 0.54% for the linked 2015 third quarter and 0.07% for the 2014 fourth quarter.  ROE is 7.52% for the 2015 fourth quarter compared with 5.99% for the linked 2015 third quarter and 0.73% for the 2014 fourth quarter.  The efficiency ratio (noninterest expenses as a percentage of net interest income plus noninterest income) is 81.41% for the 2015 fourth quarter, compared to 82.26% for the linked 2015 third quarter and 96.31% for the 2014 fourth quarter.  The efficiency ratio measures the proportion of net operating revenues that are absorbed by overhead expenses. The performance ratios for the 2014 fourth quarter and year end were adversely impacted by the one-time expenses previously noted.

The ROA, ROE and efficiency ratios for the 2015 year were 0.52%, 5.72% and 84.53%, respectively, compared to 0.57%, 5.18% and 79.98%, respectively, for the 2014 year. 

Corporate and Investor Information

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 to business and individual customers. The Bank operates through its main office headquartered in Washington, North Carolina, and has 33 full service branch offices located throughout eastern and central North Carolina.

The Bank also provides a full menu of leasing services through its wholly-owned subsidiary, First South Leasing, LLC. In addition, under its First South Wealth Management division, the Bank makes securities brokerage services available through an affiliation with an independent broker/dealer.

Additional investor information for the Company and the Bank may be accessed on our website at www.firstsouthnc.com.

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.

Non-GAAP Financial Measures

This press release and the Supplemental Financial Data contain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States. 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 disclosures above and in the Supplemental Financial Data for reconciliations of any non-GAAP measures to the most directly comparable GAAP measure.

 

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

December 31, 

December 31,

2015

2014

Assets

(Unaudited)

(As restated)

Cash and due from banks

$

19,425,747

$

23,281,016

Interest-bearing deposits with banks

18,565,521

32,835,661

Investment securities available-for-sale, at fair value

248,294,725

292,298,910

Investment securities held-to-maturity

508,456

507,309

Mortgage loans held for sale

3,943,798

4,792,943

Loans and leases held for investment

607,014,247

480,436,270

Allowance for loan and lease losses

(7,866,523)

(7,519,970)

           Net loans and leases held for investment

599,147,724

472,916,300

Premises and equipment, net

13,664,937

15,821,436

Other real estate owned

6,125,054

7,755,541

Federal Home Loan Bank stock, at cost

2,369,300

606,500

Accrued interest receivable

2,874,506

2,851,650

Goodwill

4,218,576

4,218,576

Mortgage servicing rights

1,265,589

1,178,115

Identifiable intangible assets

1,895,514

2,182,909

Income tax receivable

-

1,591,105

( a )

Bank-owned life insurance

15,635,140

15,125,498

Prepaid expenses and other assets

8,348,385

7,467,178

( a )

          Total assets

$

946,282,972

$

885,430,647

Liabilities and Stockholders' Equity

Deposits:

  Non-interest bearing demand

$

169,545,849

$

147,543,594

  Interest bearing demand

246,376,521

268,472,945

  Savings

135,369,668

117,932,606

  Large denomination certificates of deposit

116,299,196

111,523,043

  Other time

143,730,993

142,808,182

          Total deposits

811,322,227

788,280,370

Borrowings

37,000,000

-

Junior subordinated debentures

10,310,000

10,310,000

Other liabilities

5,479,971

6,837,701

          Total liabilities

864,112,198

805,428,071

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

   9,489,222 and 9,598,007 shares outstanding, respectively

94,892

95,980

Additional paid-in capital

35,936,911

35,869,195

Retained earnings

43,691,073

40,868,919

( a )

Accumulated other comprehensive income

2,447,898

3,168,482

           Total stockholders' equity

82,170,774

80,002,576

           Total liabilities and stockholders' equity

$

946,282,972

$

885,430,647

(a) - revised for prior period error

 

 

First South Bancorp, Inc. and Subsidiary

Consolidated Statements of Operations

(Unaudited)

Three Months Ended

Year Ended

December 31,

December 31,

2015

2014

2015

2014

(As restated)

(As restated)

Interest income:

  Interest and fees on loans

$

7,005,095

$

5,980,692

$

25,839,566

$

23,947,521

  Interest on investments and deposits

1,563,857

1,587,879

6,611,037

5,230,342

           Total interest income

8,568,952

7,568,571

32,450,603

29,177,863

Interest expense:

  Interest on deposits

637,680

532,986

2,367,750

2,141,899

  Interest on borrowings

63,272

128,545

124,865

285,831

  Interest on junior subordinated notes

140,039

80,462

561,694

323,113

           Total interest expense

840,991

741,993

3,054,309

2,750,843

Net interest income

7,727,961

6,826,578

29,396,294

26,427,020

Provision for credit losses

325,000

-

800,000

1,100,000

           Net interest income after provision for credit losses

7,402,961

6,826,578

28,596,294

25,327,020

Non-interest income:

  Deposit fees and service charges

2,004,933

1,202,427

8,072,893

4,387,235

  Loan fees and charges

89,286

63,284

268,482

180,899

  Mortgage loan servicing fees

283,070

259,796

1,090,196

984,623

  Gain on sale and other fees on mortgage loans 

536,536

343,138

2,022,813

1,419,721

  Gain on sale of other real estate, net

30,537

32,768

40,351

115,137

  Gain on sale of investment securities

463,203

-

1,417,716

13,509

  Other income

328,129

350,152

1,385,524

1,484,062

           Total non-interest income

3,735,694

2,251,565

14,297,975

8,585,186

Non-interest expense:

  Compensation and fringe benefits

4,902,583

4,379,984

19,377,688

15,834,616

  Federal deposit insurance premiums

164,324

145,106

609,406

565,980

  Premises and equipment

1,355,384

1,056,641

5,331,960

3,591,249

  Advertising

221,831

371,432

820,308

667,337

  Data processing

778,070

604,175

3,583,170

2,324,496

  Amortization of intangible assets

128,447

57,062

515,044

221,070

  Other real estate owned expense

168,849

254,197

631,675

649,848

  Other

1,367,195

2,026,803

5,504,476

4,618,979

           Total non-interest expense

9,086,683

8,895,400

36,373,727

28,473,575

Income before income tax expense

2,051,972

182,743

6,520,542

5,438,631

Income tax expense

484,346

33,113

( a )

1,837,329

1,349,009

( a )

NET INCOME

$

1,567,626

$

149,630

( a )

$

4,683,213

$

4,089,622

( a )

Per share data: 

Basic earnings per share

$

0.17

$

0.02

( a )

$

0.49

$

0.43

( a )

Diluted earnings per share

$

0.16

$

0.02

( a )

$

0.49

$

0.42

( a )

Dividends per share

$

0.025

$

0.025

$

0.10

$

0.10

Average basic shares outstanding

9,489,222

9,598,007

9,521,392

9,619,124

Average diluted shares outstanding

9,513,916

9,618,820

9,542,401

9,638,158

(a) - revised for prior period error

 

 

First South Bancorp, Inc.

Supplemental Financial Data (Unaudited)

Quarter to Date

Year to Date

12/31/2015

9/30/2015

6/30/2015

3/31/2015

12/31/2014

12/31/2015

12/31/2014

(As restated)

(As restated)

           (dollars in thousands except per share data)

Consolidated balance sheet data:

Total assets (1)

$

946,283

$

913,368

$

899,390

$

879,215

$

885,431

$

946,283

$

885,431

Loans held for sale:

$

3,944

$

4,029

$

6,171

$

7,947

$

4,793

$

3,944

$

4,793

Loans held for investment (HFI):

Mortgage

$

71,866

$

71,148

$

68,812

$

66,957

$

66,391

$

71,866

$

66,391

Commercial

454,877

419,784

399,734

346,326

338,861

454,877

338,861

Consumer

63,036

61,934

62,265

62,756

62,792

63,036

62,792

Leases

17,235

14,438

12,825

12,637

12,392

17,235

12,392

    Total loans held for investment

607,014

567,304

543,636

488,676

480,436

607,014

480,436

Allowance for loan and lease losses

(7,867)

(7,570)

(7,364)

(7,203)

(7,520)

(7,867)

(7,520)

Net loans held for investment

$

599,147

$

559,734

$

536,272

$

481,473

$

472,916

$

599,147

$

472,916

Cash & interest bearing deposits

$

37,991

$

42,686

$

36,600

$

59,641

$

56,117

$

37,991

$

56,117

Investment securities

248,803

248,861

260,628

272,990

292,806

248,803

292,806

Premises and equipment

13,665

15,290

15,246

15,481

15,821

13,665

15,821

Goodwill

4,219

4,219

4,219

4,219

4,219

4,219

4,219

Identifiable intangible asset

1,896

1,967

2,039

2,111

2,183

1,896

2,183

Mortgage servicing rights

1,266

1,229

1,213

1,160

1,178

1,266

1,178

Deposits:

Non-interest checking

$

169,546

$

157,609

$

158,929

$

147,946

$

147,544

$

169,546

$

147,544

Interest checking

173,934

167,673

169,736

180,114

180,558

173,934

180,558

Money market

72,442

68,443

69,646

84,379

87,915

72,442

87,915

Savings

135,370

133,570

131,078

123,457

117,932

135,370

117,932

Certificates

260,030

256,016

243,480

248,129

254,331

260,030

254,331

Total deposits

$

811,322

$

783,311

$

772,869

$

784,025

$

788,280

$

811,322

$

788,280

Borrowings

$

37,000

$

33,000

$

32,000

$

0

$

0

$

37,000

$

0

Junior subordinated debentures

10,310

10,310

10,310

10,310

10,310

10,310

10,310

Stockholders' equity (1)

82,171

81,623

79,687

80,968

80,003

82,171

80,003

Consolidated earnings summary:

Interest income

$

8,569

$

8,217

$

7,901

$

7,764

$

7,569

$

32,450

$

29,178

Interest expense

841

794

712

708

742

3,054

2,751

Net interest income

7,728

7,423

7,189

7,056

6,827

29,396

26,427

Provision for credit losses

325

335

140

0

0

800

1,100

Noninterest income

3,736

3,766

3,616

3,180

2,251

14,298

8,585

Noninterest expense

9,087

9,007

9,026

9,254

8,896

36,374

28,473

Income before taxes

2,052

1,847

1,639

982

182

6,520

5,439

Income tax expense  (1)

484

610

485

257

33

1,837

1,349

Net income  (1)

$

1,568

$

1,237

$

1,154

$

725

$

149

$

4,683

$

4,090

Adjusted pre-tax pre-provision operating

 earnings (non-GAAP):

Income before taxes

$

2,052

$

1,847

$

1,639

$

982

$

182

$

6,520

$

5,439

Provision for credit losses

325

335

140

0

0

800

1,100

Pre-tax pre-provision net income

2,377

2,182

1,779

982

182

7,320

6,539

Securities (gains) losses, net

(463)

(503)

(201)

(251)

0

(1,418)

(14)

OREO valuations

100

10

41

44

131

195

204

OREO (gains) losses, (net)

(30)

63

(27)

(46)

(33)

(40)

(115)

Adjusted pre-tax pre-provision operating

earnings (non-GAAP)

$

1,984

$

1,752

$

1,592

$

729

$

280

$

6,057

$

6,614

Per Share Data: 

Basic earnings per share (1)

$

0.17

$

0.13

$

0.12

$

0.08

$

0.02

$

0.49

$

0.43

Diluted earnings per share (1)

$

0.16

$

0.13

$

0.12

$

0.08

$

0.02

$

0.49

$

0.42

Dividends per share

$

0.025

$

0.025

$

0.025

$

0.025

$

0.025

$

0.100

$

0.100

Book value per share (1)

$

8.66

$

8.60

$

8.38

$

8.50

$

8.34

$

8.66

$

8.34

Tangible book value per share (1)

$

8.02

$

7.95

$

7.73

$

7.83

$

7.67

$

8.02

$

7.67

Average basic shares

9,489,222

9,500,885

9,526,656

9,570,820

9,598,007

9,521,392

9,619,124

Average diluted shares

9,513,916

9,520,943

9,546,235

9,590,979

9,618,820

9,542,401

9,638,158

First South Bancorp, Inc.                                                                                                                     Supplemental Financial Data (Unaudited)

Quarter to Date

Year to Date

12/31/2015

9/30/2015

6/30/2015

3/31/2015

12/31/2014

12/31/2015

12/31/2014

(As restated)

(As restated)

           (dollars in thousands except per share data)

Performance ratios (tax equivalent):

Yield on average earning assets

4.03%

4.01%

4.02%

3.97%

4.18%

4.01%

4.47%

Cost of interest bearing liabilities

0.49%

0.48%

0.45%

0.44%

0.48%

0.47%

0.51%

Net interest spread

3.54%

3.53%

3.57%

3.53%

3.70%

3.54%

3.96%

Net interest margin

3.64%

3.63%

3.67%

3.62%

3.78%

3.64%

4.06%

Avg earning assets to total avg assets (1)

92.19%

91.65%

91.33%

91.26%

92.23%

91.63%

91.71%

Return on average assets (annualized) (1)

0.67%

0.54%

0.53%

0.33%

0.07%

0.52%

0.57%

Return on average equity (annualized) (1)

7.52%

5.99%

5.66%

3.61%

0.73%

5.72%

5.18%

Efficiency ratio 

81.41%

82.26%

83.71%

91.30%

96.31%

84.53%

79.98%

Average assets (1)

$

930,978

$

904,017

$

877,480

$

879,223

$

793,852

$

897,795

$

723,660

Average earning assets

$

858,243

$

828,538

$

801,396

$

802,387

$

732,153

$

822,641

$

663,636

Average equity (1)

$

82,713

$

81,975

$

81,799

$

81,446

$

81,305

$

81,893

$

78,913

Equity/Assets (1)

8.68%

8.94%

8.86%

9.21%

9.04%

8.68%

9.04%

Tangible Equity/Assets (1)

8.04%

8.26%

8.16%

8.49%

8.31%

8.04%

8.31%

Asset quality data and ratios:

Nonaccrual loans:

Non-TDR nonaccrual loans 

  Earning

$

985

$

799

$

990

$

858

$

723

$

985

$

723

  Non-Earning

710

964

806

1,158

1,075

710

1,075

     Total Non-TDR nonaccrual loans

$

1,695

$

1,763

$

1,796

$

2,016

$

1,798

$

1,695

$

1,798

TDR nonaccrual loans

   Past Due TDRs

$

1,343

$

1,250

$

1,065

$

1,206

$

1,233

$

1,343

$

1,233

   Current TDRs

159

463

1,459

1,194

2,007

159

2,007

      Total TDR nonaccrual loans

$

1,502

$

1,713

$

2,524

$

2,400

$

3,240

$

1,502

$

3,240

Total nonaccrual loans

$

3,197

$

3,476

$

4,320

$

4,416

$

5,038

$

3,197

$

5,038

Loans >90 days past due, still accruing

115

183

248

0

389

115

389

Other real estate owned 

6,125

6,506

7,009

7,082

7,756

6,125

7,756

Total nonperforming assets

$

9,437

$

10,165

$

11,577

$

11,498

$

13,183

$

9,437

$

13,183

Allowance for loan and lease losses to 

loans held for investment

1.30%

1.33%

1.35%

1.47%

1.57%

1.30%

1.57%

Net charge-offs (recoveries)

$

28

$

129

$

(21)

$

317

$

(17)

$

452

$

1,189

Net charge-offs (recoveries) to total loans 

0.00%

0.02%

0.00%

0.06%

0.00%

0.07%

0.25%

Total nonaccrual loans to total loans HFI

0.53%

0.61%

0.79%

0.90%

1.05%

0.53%

1.05%

Total nonperforming assets to total assets

1.00%

1.11%

1.29%

1.31%

1.49%

1.00%

1.49%

Total loans to total deposits

75.30%

72.94%

71.14%

63.34%

61.56%

75.30%

61.56%

Total loans to total assets (1)

64.56%

62.55%

61.13%

56.48%

54.80%

64.56%

54.80%

Loans serviced for others

$

297,494

$

297,764

$

300,801

$

301,482

$

306,822

$

297,494

$

306,822

(1) Certain amounts and ratios for prior periods have been restated for correction of an error

 

 

SOURCE First South Bancorp, Inc.



RELATED LINKS

http://www.firstsouthnc.com