WASHINGTON, N.C., July 21, 2016 /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, 2016.
2016 Second Quarter Highlights
- Solid earnings performance with growth in net income, earnings
per share, as well as returns on average assets and average
equity
- Increase in pre-tax, pre-provision operating earnings by
$540,000 compared with linked 2016
first quarter results
- Strong loan growth as we increased our
loans-held-for-investment by $29.8
million
- Improvement in asset quality metrics with lower levels of past
due and non-performing loans
- Continued deposit growth with strong increase in non-interest
bearing deposits
- Expansion of our net interest margin
- Increased quarterly cash dividend payment rate to $0.03 per share, a 20% increase
Net Income. Net income for the second quarter of 2016 was
$1.6 million or $0.17 per diluted common share and compares
favorably to the $1.5 million or
$0.15 per diluted common share and
$1.2 million or $0.12 per diluted common share of net income
generated during the linked 2016 first quarter and the comparative
prior year quarter, respectively. The improvement in
quarterly net income is primarily attributable to an increase in
net interest income, reflecting the impact of strong loan growth
over the past twelve months.
The Company showed significant improvement in pre-tax,
pre-provision operating earnings for the quarter ended June 30, 2016. Pre-tax, pre-provision
operating earnings, which excludes certain revenue and expense
items as shown on the accompanying table of Supplemental Financial
Data, was $2.5 million for the
current quarter compared to $2.0
million for the quarter ended March
31, 2016 and $1.8 million for
the comparative quarter ended June 30,
2015.
The Company generated net income of $3.1
million for the first six months of 2016 or $0.32 per diluted common share compared to
$1.9 million or $0.20 per diluted common share earned during the
first six months of 2015. Earnings for the current six month
period were positively impacted by increases in net interest income
and non-interest income, as well as lower non-interest expenses,
while being partially offset by an increase in the provision for
loan losses associated with the strong loan portfolio growth.
During the first quarter of 2015, the Bank incurred $425,000 of pre-tax one-time transaction expenses
associated with acquiring nine branch offices.
Bruce Elder, President and CEO,
commented, "When we expanded our geographic franchise footprint in
December 2014 through a branch
acquisition transaction, we realized that it would take time to
leverage the personnel, facilities and low-cost deposits we
acquired. As of the quarter ended June
30, 2016, we have created shareholder value by generating
pre-tax, pre-provision operating earnings in excess of those levels
achieved for the quarter ended immediately preceding the branch
acquisition. As we continue to grow our earning asset base,
further diversify our sources of non-interest income and improve
operating efficiency, our earnings potential should show progress
toward high performance."
Mr. Elder commented further, "During the quarter ended
June 30, 2016, we were pleased to
increase our quarterly dividend payment rate by 20% to $0.03 per share. Our dividend payments for
the first six months of 2016 represent a 17% payout ratio of
diluted earnings per share. The Board of Directors' decision to
increase the quarterly dividend rate reflects the Company's strong
capital position, improved financial performance and confidence in
the Company's future."
Net Interest Income. Net interest income for the 2016
second quarter increased to $8.1
million, from $7.8 million for
the linked 2016 first quarter and $7.2
million for the 2015 second quarter. Net interest
income for the first six months of 2016 increased to $15.9 million, from $14.2
million for the comparative prior year six month
period. The tax equivalent net interest margin improved 10
basis points to 3.76% for the 2016 second quarter, from 3.66% for
the linked 2016 first quarter, and improved 9 basis points when
compared to the 3.67% for the 2015 second quarter.
The improvement in the tax-equivalent net
interest margin is due to a significant change in the mix of our
earning assets over comparative periods as we have replaced lower
yielding investments with higher yielding loans. On the
liability side of the balance sheet, while we continue to seek
expansion of our non-maturity deposit base, we have also taken
steps to protect the Company from a rising rate environment by
adding some longer-term funding.
Growth and changes in the mix of our earning asset base
positively impacted net interest income as well as the net interest
margin for the first six months of 2016 when compared to the first
six months of 2015. Net interest income increased by
$1.6 million and the net interest
margin improved 7 basis points over the comparative prior year six
month period. During this same comparative period average
earning assets increased $68.6
million and the percentage of average loans outstanding to
total average earning assets increased to 73.1% from 61.9%.
Asset Quality and Provision for Credit Losses. Total
nonperforming assets were $8.3
million, or 0.87% of total assets at June 30, 2016, compared to $9.4 million or 1.0% of total assets at
December 31, 2015, and $11.6 million or 1.3% of total assets at
June 30, 2015. Total loans in
non-accrual status were $2.6 million
at June 30, 2016, compared to
$3.2 million at December 31, 2015 and $4.3
million at June 30,
2015. Our level of other real estate owned (OREO) declined to
$5.5 million at June 30, 2016, from $6.1
million at December 31, 2015
and $7.0 million at June 30, 2015. Management and the Board of
Directors believe that improving asset quality is a key driver of
stock price performance and increased overall shareholder
value.
The allowance for loan and lease losses (ALLL) was $8.3 million at June 30,
2016, representing 1.25% of loans and leases held for
investment, compared to $7.9 million
at December 31, 2015, or 1.30% of
loans and leases held for investment, and $7.4 million at June 30,
2015, or 1.35% of loans and leases held for investment.
The Bank recorded $325,000 of
provision for credit losses in the 2016 second quarter,
$225,000 in the linked 2016 first
quarter, and $140,000 in the
comparative 2015 second quarter. For the six months ended
June 30, 2016, the Bank recorded
$550,000 of provision for credit
losses, compared to $140,000 in the
first six months of 2015. Management believes the Company is
adequately reserved for potential future credit losses.
Non-Interest Income. Total non-interest income was
$3.5 million for the 2016 second
quarter, compared to $3.6 million for
both the linked 2016 first quarter and the 2015 second quarter.
Deposit fees and service charges were $1.9 million for the 2016 second quarter and
represented 54.4% of total non-interest income. The Company
generated $1.9 million of deposit
fees and service charges for the linked 2016 first quarter and
$2.1 million in the comparative 2015
second quarter.
Total non-interest income generated from the sale and servicing
of mortgage loans and loan fees increased to $842,000 for the 2016 second quarter, compared to
$648,000 in the linked 2016 first
quarter and $877,000 for the 2015
second quarter. We continue to explore various strategies to
enhance our non-interest income from the mortgage business,
including the potential purchase of mortgage servicing rights.
Sales of OREO resulted in a net loss of $14,000 and $12,000, respectively, for the 2016 second
quarter and the linked 2016 first quarter, compared to a net gain
of $27,000 for the 2015 second
quarter, as the Bank continues its efforts to reduce its level of
nonperforming assets.
Net gains from investment securities sales were $184,000 for the 2016 second quarter, compared to
$284,000 for the linked 2016 first
quarter and $201,000 for the 2015
second quarter. During the 2016 second quarter and linked
2016 first quarter, we sold $9.8
million and $30.4 million,
respectively, of investment securities primarily to fund net growth
in our loan portfolio.
Included in other non-interest income is revenue from
investments in Bank-owned life insurance (BOLI) of $142,000 for the 2016 second quarter, compared to $135,000
for the linked 2016 first quarter and $128,000 for the 2015 second quarter.
Other non-interest income also includes Small Business
Administration (SBA) related revenue of $142,000 for the 2016 second quarter and
$144,000 for the 2016 first
quarter. While the Bank has originated SBA loans in prior
years, we began the process of actively selling and servicing these
credits during 2016.
Total core non-interest income, excluding net gains from
securities and OREO sales, has remained relatively constant at
$3.4 million for the 2016 second
quarter, $3.3 million for the linked
2016 first quarter and $3.4 million
for the comparative 2015 second quarter, primarily due to the
consistency of deposit fees and service charges.
For the first six months of 2016, total non-interest income
increased to $7.1 million, from
$6.8 million for the first six months
of 2015. Fees and service charges on deposits were
$3.8 million for the first six months
of 2016, compared to $4.0 million for
the six months ended June 30, 2015.
Revenue generated from the sale and servicing of mortgage
loans and loan fees remained consistent at $1.5 million for the first six months of 2016 and
2015. Gains realized from the sale of investment securities
were $467,000 and $451,000 for the first six months of 2016 and
2015, respectively. The Bank recognized a net loss of
$26,000 and a net gain of
$73,000 on the disposal of OREO
during the first six months of 2016 and 2015, respectively.
BOLI earnings increased to $277,000
for the first six months of 2016, from $254,000 for the first six months of 2015.
Non-Interest Expense Total non-interest expense has
remained stable with $9.0 million for
the 2016 second quarter, $9.1 million
for the linked 2016 first quarter, and $9.0
million for the 2015 second quarter. For the first six
months of 2016, total non-interest expense was $18.2 million, compared to $18.3 million reported in the first six months of
2015.
Compensation and benefit expenses, the largest component of
non-interest expenses, were $4.9
million for the 2016 second quarter, compared to
$5.0 million for the linked 2016
first quarter and $4.8 million
for the 2015 second quarter. For the first six
months of 2016, compensation expense increased to $10.0 million, from $9.5
million for the first six months of 2015. Expenses in
the first six months of 2016 included severance costs associated
with branch consolidations during the period. The Bank will
continue to manage overall staffing levels to ensure we meet the
ongoing needs of our customers and support future growth.
FDIC insurance premiums were $161,000 for the 2016 second quarter, compared to
$162,000 for the linked 2016 first
quarter and $149,000 for the 2015
second quarter. For the first six months of 2016, FDIC
insurance was $322,000, compared to
$282,000 for the first six months of
2015. The increase in FDIC insurance premiums was due to the
growth in our balance sheet.
Premises and equipment expense remained stable at $1.4 million for both the 2016 second quarter, the linked 2016 first
quarter and $1.3 million for the 2015
second quarter. For the first six months of 2016, premises
and equipment expense was $2.8
million, compared to $2.7
million for the first six months of 2015. During the
first six months of 2016 the Bank consolidated three existing
branches into nearby locations. Occupancy expense for the
2016 period includes the retirement of certain leasehold
improvements and other fixed assets at locations that were
consolidated and closed. We will continue to explore opportunities
to gain efficiency and performance improvement from our branch
network.
Advertising expense was $229,000
for the 2016 second quarter, compared to $188,000 for the linked 2016 first quarter and
$217,000 for the 2015 second
quarter. For the first six months of 2016, advertising
expense increased to $417,000, from
$380,000 for the first six months of
2015. The Bank continues to invest in building our brand awareness
throughout our expanded footprint with additional marketing
efforts.
Data processing costs declined to $750,000 for the 2016 second quarter, from
$796,000 for the linked 2016 first
quarter, and $880,000 for the
comparative 2015 second quarter. For the first six months of
2016, data processing expense declined to $1.5 million, from $2.0
million for the first six months of 2015. Data
processing expense for 2015 included $173,000 of one-time expenses associated with a
branch acquisition transaction.
Total amortization of intangible assets, including mortgage
servicing rights and identifiable intangible assets, was
$134,000 for the 2016 second quarter,
compared to $132,000 for the linked
2016 first quarter and $130,000 for
the 2015 second quarter. For the first six months of 2016,
amortization of intangible assets was $265,000, compared to $257,000 for the first six months of 2015.
Expenses attributable to ongoing maintenance, property taxes and
insurance for OREO properties were $110,000 for the 2016 second quarter, compared to
$86,000 for the linked 2016 first
quarter and $115,000 for the 2015
second quarter. For the first six months of 2016, OREO
related expenses were $196,000,
compared to $278,000 for the
first six months of 2015. Management continuously analyzes the
carrying value of OREO and makes valuation adjustments as
necessary. Quarterly valuation adjustments for the current,
linked and comparative prior year quarters are $103,000, $7,000
and $41,000, respectively and
valuation adjustments for the six-month periods ended June 20, 2016 and 2015 are $110,000 and $86,000, respectively.
Other non-interest expense declined to $1.2 million for the 2016 second quarter, from
$1.3 million for the linked 2016
first quarter, and $1.4 million for
the 2015 second quarter. As previously mentioned, during the
first quarter of 2016, the Bank consolidated three existing
branches into nearby locations. Two of these locations were
leased and the third was owned. In the first quarter of this
year the Bank entered into a contract to sell the owned location
and realized an $85,000 pre-tax loss
during the period as a result. For the first six months of
2016, other non-interest expense declined to $2.6 million from $2.8
million for the first six months of 2015.
Income tax expense increased to $665,000 for the 2016 second quarter, from
$574,000 for the linked 2016 first
quarter and $486,000 for the 2015
second quarter. For the first six months of 2016, income tax
expense increased to $1.2 million,
from $742,000 for the first six
months of 2015. The effective income tax rates were 29.20%
for the 2016 second quarter, 28.20% for the linked 2016 first
quarter and 29.62% for the comparative 2015 second quarter.
The effective income tax rates were 28.72% and 28.32% for the
respective 2016 and 2015 six month periods.
Balance Sheet. Total assets increased to $961.5 million at June 30,
2016, from $946.3 million at
December 31, 2015. The increase
is attributable to strong growth in the loan and lease portfolio,
partially offset by the sale of investment securities and a
reduction in interest-bearing deposits with banks to help fund the
increased level of loans outstanding.
Loans and leases held for investment grew by $61.8 million during the first six months of
2016. As a result of this net growth, total loans and leases
held for investment increased to $668.8
million at June 30, 2016, from
$607.0 million at December 31, 2015. Loans held for sale
increased to $5.3 million at
June 30, 2016, from $3.9 million at December
31, 2015. The loan to deposit ratio has steadily
improved from 75.30% at December 31,
2015 to 81.66% at June 30,
2016.
The investment securities portfolio and interest-bearing
deposits declined to $216.7 million
at June 30, 2016, from $267.4 million at December
31, 2015. 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 loans
outstanding.
The Bank's investment in BOLI increased to $17.8 million at June 30,
2016, from $15.6 million at
December 31, 2015. The
investment returns from the BOLI are utilized to offset a portion
of the cost of providing benefits to our employees.
Total deposits increased to $825.5
million at June 30, 2016, from
$811.3 million at December 31, 2015. Total non-maturity
deposits grew to $561.6 million at
June 30, 2016, from $551.3 million at December
31, 2015. In addition, total certificates of deposit
increased to $263.8 million at
June 30, 2016, from $260.0 million at December
31, 2015.
Stockholders' equity increased by $5.2
million to $87.3 million at
June 30, 2016, from $82.2 million at December
31, 2015. This increase primarily reflects the
$3.1 million of net income earned for
the first six months of 2016 and a $2.6
million increase in accumulated other comprehensive income
resulting from the mark-to-market adjustment of the
available-for-sale securities portfolio, net of $522,000 of dividends declared.
The tangible equity to assets ratio increased to 8.46% at
June 30, 2016, from 8.04% at
December 31, 2015. The tangible
book value per common share increased to $8.57 at June 30,
2016, from $8.02 at
December 31, 2015.
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 was 0.68% for the
2016 second quarter, compared with 0.63% for the linked 2016 first
quarter and 0.53% for the 2015 second quarter. ROE was 7.55%
for the 2016 second quarter compared with 6.97% for the linked 2016
first quarter and 5.66% for the 2015 second quarter. The
efficiency ratio (noninterest expenses as a percentage of net
interest income plus noninterest income) improved to 77.59% for the
2016 second quarter, from 80.74% for the linked 2016 first quarter,
and 83.71% for the 2015 second quarter. The efficiency ratio
measures the proportion of net operating revenues that are absorbed
by overhead expenses.
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 30 full service branch
offices located throughout eastern and central North
Carolina. First South Bank is a wholly-owned subsidiary of
First South Bancorp, Inc.
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 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
accompanying Supplemental Financial Data contain financial
information determined by methods other than in accordance with
accounting principles generally accepted in the United States ("GAAP"). 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.
(More)
(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,
|
|
|
|
2016
|
|
|
2015
|
Assets
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
|
24,376,456
|
|
$
|
19,425,747
|
Interest-bearing
deposits with banks
|
|
|
16,357,259
|
|
|
18,565,521
|
Investment securities
available-for-sale, at fair value
|
|
|
199,855,361
|
|
|
248,294,725
|
Investment securities
held-to-maturity
|
|
|
509,036
|
|
|
508,456
|
Mortgage loans held
for sale
|
|
|
5,251,714
|
|
|
3,943,798
|
|
|
|
|
|
|
|
Loans and leases held
for investment
|
|
|
668,842,905
|
|
|
607,014,247
|
Allowance for loan
and lease losses
|
|
|
(8,338,244)
|
|
|
(7,866,523)
|
Net loans and leases held for investment
|
|
|
660,504,661
|
|
|
599,147,724
|
|
|
|
|
|
|
|
Premises and
equipment, net
|
|
|
11,671,166
|
|
|
13,664,937
|
Assets held for
sale
|
|
|
192,720
|
|
|
-
|
Other real estate
owned
|
|
|
5,540,672
|
|
|
6,125,054
|
Federal Home Loan
Bank stock, at cost
|
|
|
2,317,500
|
|
|
2,369,300
|
Accrued interest
receivable
|
|
|
3,141,824
|
|
|
2,874,506
|
Goodwill
|
|
|
4,218,576
|
|
|
4,218,576
|
Mortgage servicing
rights
|
|
|
1,272,952
|
|
|
1,265,589
|
Identifiable
intangible assets
|
|
|
1,753,350
|
|
|
1,895,514
|
Bank-owned life
insurance
|
|
|
17,795,206
|
|
|
15,635,140
|
Prepaid expenses and
other assets
|
|
|
6,720,669
|
|
|
8,348,385
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
961,479,122
|
|
$
|
946,282,972
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
Non-interest
bearing demand
|
|
$
|
177,281,556
|
|
$
|
169,545,849
|
Interest
bearing demand
|
|
|
242,206,763
|
|
|
246,376,521
|
Savings
|
|
|
142,151,162
|
|
|
135,369,668
|
Large
denomination certificates of deposit
|
|
|
118,773,827
|
|
|
116,299,196
|
Other time
deposits
|
|
|
145,049,086
|
|
|
143,730,993
|
Total deposits
|
|
|
825,462,394
|
|
|
811,322,227
|
|
|
|
|
|
|
|
Borrowings
|
|
|
32,500,000
|
|
|
37,000,000
|
Junior subordinated
debentures
|
|
|
10,310,000
|
|
|
10,310,000
|
Other
liabilities
|
|
|
5,880,159
|
|
|
5,479,971
|
Total liabilities
|
|
|
874,152,553
|
|
|
864,112,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $.01
par value, 25,000,000 shares authorized;
|
|
|
|
|
|
|
9,493,776 and 9,489,222 shares outstanding, respectively
|
|
|
94,938
|
|
|
94,892
|
Additional paid-in
capital
|
|
|
35,978,994
|
|
|
35,936,911
|
Retained
earnings
|
|
|
46,241,836
|
|
|
43,691,073
|
Accumulated other
comprehensive income
|
|
|
5,010,801
|
|
|
2,447,898
|
Total stockholders' equity
|
|
|
87,326,569
|
|
|
82,170,774
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
961,479,122
|
|
$
|
946,282,972
|
|
|
|
|
|
|
|
First South
Bancorp, Inc. and Subsidiary
|
|
|
|
|
Consolidated
Statements of Operations
|
|
|
|
|
Three and Six
Months Ended June 30, 2016 and 2015
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and
fees on loans
|
|
|
$
|
7,642,097
|
|
$
|
6,260,775
|
|
$
|
14,833,692
|
|
$
|
12,195,294
|
Interest on
investments and deposits
|
|
|
1,356,030
|
|
|
1,639,763
|
|
|
2,836,282
|
|
|
3,469,740
|
Total interest income
|
|
|
8,998,127
|
|
|
7,900,538
|
|
|
17,669,974
|
|
|
15,665,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
|
|
697,426
|
|
|
562,241
|
|
|
1,366,702
|
|
|
1,131,989
|
Interest on
borrowings
|
|
|
|
58,711
|
|
|
7,421
|
|
|
131,797
|
|
|
7,516
|
Interest on
junior subordinated notes
|
|
|
141,578
|
|
|
141,578
|
|
|
281,617
|
|
|
280,078
|
Total interest expense
|
|
|
897,715
|
|
|
711,240
|
|
|
1,780,116
|
|
|
1,419,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
|
|
8,100,412
|
|
|
7,189,298
|
|
|
15,889,858
|
|
|
14,245,451
|
Provision for credit
losses
|
|
|
|
325,000
|
|
|
140,000
|
|
|
550,000
|
|
|
140,000
|
Net interest income after provision for credit losses
|
|
|
7,775,412
|
|
|
7,049,298
|
|
|
15,339,858
|
|
|
14,105,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit fees
and service charges
|
|
|
1,931,050
|
|
|
2,102,664
|
|
|
3,838,457
|
|
|
3,974,859
|
Loan fees and
charges
|
|
|
|
138,649
|
|
|
63,088
|
|
|
195,634
|
|
|
116,236
|
Mortgage loan
servicing fees
|
|
|
273,689
|
|
|
304,705
|
|
|
507,689
|
|
|
543,447
|
Gain on sale
and other fees on mortgage loans
|
|
|
568,403
|
|
|
572,549
|
|
|
982,264
|
|
|
957,533
|
Gain (loss) on
sale of other real estate, net
|
|
|
(14,315)
|
|
|
27,349
|
|
|
(26,484)
|
|
|
73,216
|
Gain on sale
of investment securities
|
|
|
183,955
|
|
|
201,157
|
|
|
467,470
|
|
|
451,938
|
Other
income
|
|
|
|
466,798
|
|
|
344,675
|
|
|
1,159,085
|
|
|
678,820
|
Total non-interest income
|
|
|
3,548,229
|
|
|
3,616,187
|
|
|
7,124,115
|
|
|
6,796,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
and fringe benefits
|
|
|
4,944,984
|
|
|
4,806,350
|
|
|
9,984,939
|
|
|
9,539,972
|
Federal
deposit insurance premiums
|
|
|
160,525
|
|
|
148,639
|
|
|
322,134
|
|
|
281,882
|
Premises and
equipment
|
|
|
|
1,380,675
|
|
|
1,290,526
|
|
|
2,754,484
|
|
|
2,664,453
|
Advertising
|
|
|
|
229,434
|
|
|
216,967
|
|
|
417,253
|
|
|
379,651
|
Data
processing
|
|
|
|
749,731
|
|
|
879,576
|
|
|
1,546,217
|
|
|
1,986,421
|
Amortization
of intangible assets
|
|
|
133,571
|
|
|
129,610
|
|
|
265,099
|
|
|
257,069
|
Other real
estate owned expense
|
|
|
212,883
|
|
|
156,849
|
|
|
306,557
|
|
|
363,591
|
Other
|
|
|
|
1,235,090
|
|
|
1,397,461
|
|
|
2,556,137
|
|
|
2,807,183
|
Total non-interest expense
|
|
|
9,046,893
|
|
|
9,025,978
|
|
|
18,152,820
|
|
|
18,280,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
tax expense
|
|
|
2,276,748
|
|
|
1,639,507
|
|
|
4,311,153
|
|
|
2,621,278
|
Income tax
expense
|
|
|
|
664,734
|
|
|
485,609
|
|
|
1,238,345
|
|
|
742,303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
|
|
$
|
1,612,014
|
|
$
|
1,153,898
|
|
$
|
3,072,808
|
|
$
|
1,878,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
|
$
|
0.17
|
|
$
|
0.12
|
|
$
|
0.32
|
|
$
|
0.20
|
Diluted earnings per
share
|
|
|
$
|
0.17
|
|
$
|
0.12
|
|
$
|
0.32
|
|
$
|
0.20
|
Dividends per
share
|
|
|
$
|
0.030
|
|
$
|
0.025
|
|
$
|
0.055
|
|
$
|
0.050
|
Average basic shares
outstanding
|
|
|
9,493,776
|
|
|
9,526,656
|
|
|
9,492,489
|
|
|
9,548,393
|
Average diluted
shares outstanding
|
|
|
9,519,565
|
|
|
9,546,235
|
|
|
9,517,248
|
|
|
9,568,257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First South
Bancorp, Inc.
|
Supplemental
Financial Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter to
Date
|
|
Year to
Date
|
|
|
|
|
6/30/2016
|
|
3/31/2016
|
|
12/31/2015
|
|
9/30/2015
|
|
6/30/2015
|
|
6/30/2016
|
|
6/30/2015
|
|
|
|
(dollars in thousands except per share data)
|
Consolidated balance
sheet data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
961,479
|
$
|
940,108
|
$
|
946,283
|
$
|
913,368
|
$
|
899,390
|
$
|
961,479
|
$
|
899,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for
sale:
|
$
|
5,252
|
$
|
2,490
|
$
|
3,944
|
$
|
4,029
|
$
|
6,171
|
$
|
5,252
|
$
|
6,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for
investment (HFI):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage
|
|
$
|
73,100
|
$
|
73,412
|
$
|
71,866
|
$
|
71,148
|
$
|
68,812
|
$
|
73,100
|
$
|
68,812
|
|
Commercial
|
|
510,678
|
|
482,779
|
|
454,877
|
|
419,784
|
|
399,734
|
|
510,678
|
|
399,734
|
|
Consumer
|
|
66,138
|
|
64,521
|
|
63,036
|
|
61,934
|
|
62,265
|
|
66,138
|
|
62,265
|
|
Leases
|
|
|
18,927
|
|
18,333
|
|
17,235
|
|
14,438
|
|
12,825
|
|
18,927
|
|
12,825
|
|
Total loans held for investment
|
|
668,843
|
|
639,045
|
|
607,014
|
|
567,304
|
|
543,636
|
|
668,843
|
|
543,636
|
Allowance for loan
and lease losses
|
|
(8,338)
|
|
(8,135)
|
|
(7,867)
|
|
(7,570)
|
|
(7,364)
|
|
(8,338)
|
|
(7,364)
|
Net loans held for
investment
|
$
|
660,505
|
$
|
630,910
|
$
|
599,147
|
$
|
559,734
|
$
|
536,272
|
$
|
660,505
|
$
|
536,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & interest
bearing deposits
|
$
|
40,734
|
$
|
36,115
|
$
|
37,991
|
$
|
42,686
|
$
|
36,600
|
$
|
40,734
|
$
|
36,600
|
Investment
securities
|
|
200,364
|
|
213,520
|
|
248,803
|
|
248,861
|
|
260,628
|
|
200,364
|
|
260,628
|
Premises and
equipment
|
|
11,671
|
|
12,144
|
|
13,665
|
|
15,290
|
|
15,246
|
|
11,671
|
|
15,246
|
Goodwill
|
|
|
4,219
|
|
4,219
|
|
4,219
|
|
4,219
|
|
4,219
|
|
4,219
|
|
4,219
|
Identifiable
intangible asset
|
|
1,753
|
|
1,824
|
|
1,896
|
|
1,967
|
|
2,039
|
|
1,753
|
|
2,039
|
Mortgage servicing
rights
|
|
1,273
|
|
1,247
|
|
1,266
|
|
1,229
|
|
1,213
|
|
1,273
|
|
1,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
checking
|
$
|
177,281
|
$
|
164,244
|
$
|
169,546
|
$
|
157,609
|
$
|
158,929
|
$
|
177,281
|
$
|
158,929
|
Interest
checking
|
|
170,153
|
|
171,323
|
|
173,934
|
|
167,673
|
|
169,736
|
|
170,153
|
|
169,736
|
Money
market
|
|
|
72,054
|
|
73,000
|
|
72,442
|
|
68,443
|
|
69,646
|
|
72,054
|
|
69,646
|
Savings
|
|
|
142,151
|
|
146,255
|
|
135,370
|
|
133,570
|
|
131,078
|
|
142,151
|
|
131,078
|
Certificates
|
|
|
263,823
|
|
263,845
|
|
260,030
|
|
256,016
|
|
243,480
|
|
263,823
|
|
243,480
|
|
Total
deposits
|
$
|
825,462
|
$
|
818,667
|
$
|
811,322
|
$
|
783,311
|
$
|
772,869
|
$
|
825,462
|
$
|
772,869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
$
|
32,500
|
$
|
21,500
|
$
|
37,000
|
$
|
33,000
|
$
|
32,000
|
$
|
32,500
|
$
|
32,000
|
Junior subordinated
debentures
|
|
10,310
|
|
10,310
|
|
10,310
|
|
10,310
|
|
10,310
|
|
10,310
|
|
10,310
|
Stockholders'
equity
|
|
87,327
|
|
84,179
|
|
82,171
|
|
81,623
|
|
79,687
|
|
87,327
|
|
79,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated earnings
summary:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
$
|
8,998
|
$
|
8,672
|
$
|
8,569
|
$
|
8,217
|
$
|
7,901
|
$
|
17,670
|
$
|
15,665
|
Interest
expense
|
|
898
|
|
882
|
|
841
|
|
794
|
|
712
|
|
1,780
|
|
1,420
|
Net interest
income
|
|
8,100
|
|
7,790
|
|
7,728
|
|
7,423
|
|
7,189
|
|
15,890
|
|
14,245
|
Provision for credit
losses
|
|
325
|
|
225
|
|
325
|
|
335
|
|
140
|
|
550
|
|
140
|
Noninterest
income
|
|
3,548
|
|
3,576
|
|
3,736
|
|
3,766
|
|
3,616
|
|
7,124
|
|
6,796
|
Noninterest
expense
|
|
9,046
|
|
9,106
|
|
9,087
|
|
9,007
|
|
9,026
|
|
18,153
|
|
18,280
|
Income before
taxes
|
|
2,277
|
|
2,035
|
|
2,052
|
|
1,847
|
|
1,639
|
|
4,311
|
|
2,621
|
Income tax
expense
|
|
665
|
|
574
|
|
484
|
|
610
|
|
485
|
|
1,238
|
|
742
|
Net income
|
|
$
|
1,612
|
$
|
1,461
|
$
|
1,568
|
$
|
1,237
|
$
|
1,154
|
$
|
3,073
|
$
|
1,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
|
0.17
|
$
|
0.15
|
$
|
0.17
|
$
|
0.13
|
$
|
0.12
|
$
|
0.32
|
$
|
0.20
|
Diluted earnings per
share
|
$
|
0.17
|
$
|
0.15
|
$
|
0.16
|
$
|
0.13
|
$
|
0.12
|
$
|
0.32
|
$
|
0.20
|
Dividends per
share
|
$
|
0.030
|
$
|
0.025
|
$
|
0.025
|
$
|
0.025
|
$
|
0.025
|
$
|
0.055
|
$
|
0.050
|
Book value per
share
|
$
|
9.20
|
$
|
8.87
|
$
|
8.66
|
$
|
8.60
|
$
|
8.38
|
$
|
9.20
|
$
|
8.38
|
Tangible book value
per share
|
$
|
8.57
|
$
|
8.23
|
$
|
8.02
|
$
|
7.95
|
$
|
7.73
|
$
|
8.57
|
$
|
7.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average basic
shares
|
|
9,493,776
|
|
9,491,201
|
|
9,489,222
|
|
9,500,885
|
|
9,526,656
|
|
9,492,489
|
|
9,548,393
|
Average diluted
shares
|
|
9,519,565
|
|
9,514,797
|
|
9,513,916
|
|
9,520,943
|
|
9,546,235
|
|
9,517,248
|
|
9,568,257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First South
Bancorp, Inc.
|
Supplemental
Financial Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter to
Date
|
|
Year to
Date
|
|
|
|
|
6/30/2016
|
|
3/31/2016
|
|
12/31/2015
|
|
9/30/2015
|
|
6/30/2015
|
|
6/30/2016
|
|
6/30/2015
|
|
|
|
(dollars in thousands except per share data)
|
Performance ratios
(tax equivalent):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield on average
earning assets
|
|
4.17%
|
|
4.07%
|
|
4.03%
|
|
4.01%
|
|
4.02%
|
|
4.12%
|
|
4.00%
|
Cost of interest
bearing liabilities
|
|
0.52%
|
|
0.52%
|
|
0.49%
|
|
0.48%
|
|
0.45%
|
|
0.52%
|
|
0.45%
|
Net interest
spread
|
|
3.64%
|
|
3.55%
|
|
3.54%
|
|
3.53%
|
|
3.57%
|
|
3.60%
|
|
3.55%
|
Net interest
margin
|
|
3.76%
|
|
3.66%
|
|
3.64%
|
|
3.63%
|
|
3.67%
|
|
3.71%
|
|
3.64%
|
Avg earning assets to
total avg assets
|
|
92.38%
|
|
92.20%
|
|
92.19%
|
|
91.65%
|
|
91.33%
|
|
92.29%
|
|
91.30%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (annualized)
|
|
0.68%
|
|
0.63%
|
|
0.67%
|
|
0.54%
|
|
0.53%
|
|
0.66%
|
|
0.43%
|
Return on average
equity (annualized)
|
|
7.55%
|
|
6.97%
|
|
7.52%
|
|
5.99%
|
|
5.66%
|
|
7.26%
|
|
4.64%
|
Efficiency
ratio
|
|
77.59%
|
|
80.74%
|
|
81.41%
|
|
82.26%
|
|
83.71%
|
|
79.14%
|
|
87.39%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
assets
|
$
|
947,761
|
$
|
938,702
|
$
|
930,978
|
$
|
904,017
|
$
|
877,480
|
$
|
943,232
|
$
|
878,349
|
Average earning
assets
|
$
|
875,529
|
$
|
865,463
|
$
|
858,243
|
$
|
828,538
|
$
|
801,396
|
$
|
870,496
|
$
|
801,892
|
Average
equity
|
$
|
85,927
|
$
|
84,265
|
$
|
82,713
|
$
|
81,975
|
$
|
81,799
|
$
|
85,096
|
$
|
81,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity/Assets
|
|
|
9.08%
|
|
8.95%
|
|
8.68%
|
|
8.94%
|
|
8.86%
|
|
9.08%
|
|
8.86%
|
Tangible
Equity/Assets
|
|
8.46%
|
|
8.31%
|
|
8.04%
|
|
8.26%
|
|
8.16%
|
|
8.46%
|
|
8.16%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality data
and ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-TDR nonaccrual
loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning
|
|
$
|
555
|
$
|
945
|
$
|
985
|
$
|
799
|
$
|
990
|
$
|
555
|
$
|
990
|
|
Non-Earning
|
|
1,075
|
|
895
|
|
710
|
|
964
|
|
806
|
|
1,075
|
|
806
|
|
Total Non-TDR nonaccrual
loans
|
$
|
1,630
|
$
|
1,840
|
$
|
1,695
|
$
|
1,763
|
$
|
1,796
|
$
|
1,630
|
$
|
1,796
|
|
TDR nonaccrual
loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
TDRs
|
$
|
706
|
$
|
847
|
$
|
1,343
|
$
|
1,250
|
$
|
1,065
|
$
|
706
|
$
|
1,065
|
|
Past Due
TDRs
|
|
250
|
|
154
|
|
159
|
|
463
|
|
1,459
|
|
250
|
|
1,459
|
|
Total TDR nonaccrual
loans
|
$
|
956
|
$
|
1,001
|
$
|
1,502
|
$
|
1,713
|
$
|
2,524
|
$
|
956
|
$
|
2,524
|
Total nonaccrual
loans
|
$
|
2,586
|
$
|
2,841
|
$
|
3,197
|
$
|
3,476
|
$
|
4,320
|
$
|
2,586
|
$
|
4,320
|
Loans >90 days
past due, still accruing
|
|
218
|
|
153
|
|
115
|
|
183
|
|
248
|
|
218
|
|
248
|
Other real estate
owned
|
|
5,541
|
|
5,956
|
|
6,125
|
|
6,506
|
|
7,009
|
|
5,541
|
|
7,009
|
Total nonperforming
assets
|
$
|
8,345
|
$
|
8,950
|
$
|
9,437
|
$
|
10,165
|
$
|
11,577
|
$
|
8,345
|
$
|
11,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
and lease losses to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
loans held for
investment
|
|
1.25%
|
|
1.27%
|
|
1.30%
|
|
1.33%
|
|
1.35%
|
|
1.25%
|
|
1.35%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
(recoveries)
|
$
|
122
|
$
|
(44)
|
$
|
28
|
$
|
129
|
$
|
(21)
|
$
|
78
|
$
|
296
|
Net charge-offs
(recoveries) to total loans
|
|
0.02%
|
|
-0.01%
|
|
0.00%
|
|
0.02%
|
|
0.00%
|
|
0.01%
|
|
0.05%
|
Total nonaccrual
loans to total loans HFI
|
|
0.39%
|
|
0.44%
|
|
0.53%
|
|
0.61%
|
|
0.79%
|
|
0.39%
|
|
0.79%
|
Total nonperforming
assets to total assets
|
|
0.87%
|
|
0.95%
|
|
1.00%
|
|
1.11%
|
|
1.29%
|
|
0.87%
|
|
1.29%
|
Total loans to total
deposits
|
|
81.66%
|
|
78.36%
|
|
75.30%
|
|
72.94%
|
|
71.14%
|
|
81.66%
|
|
71.14%
|
Total loans to total
assets
|
|
70.11%
|
|
68.24%
|
|
64.56%
|
|
62.55%
|
|
61.13%
|
|
70.11%
|
|
61.13%
|
Loans serviced for
others
|
$
|
292,222
|
$
|
293,548
|
$
|
297,494
|
$
|
297,764
|
$
|
300,801
|
$
|
292,222
|
$
|
300,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax pre-provision
operating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
earnings
(non-GAAP):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
(GAAP)
|
$
|
2,277
|
$
|
2,035
|
$
|
2,052
|
$
|
1,847
|
$
|
1,639
|
$
|
4,311
|
$
|
2,621
|
Provision for credit
losses
|
|
325
|
|
225
|
|
325
|
|
335
|
|
140
|
|
550
|
|
140
|
Pre-tax pre-provision
net income
|
|
2,602
|
|
2,260
|
|
2,377
|
|
2,182
|
|
1,779
|
|
4,861
|
|
2,761
|
Securities (gains)
losses, net
|
|
(184)
|
|
(284)
|
|
(463)
|
|
(503)
|
|
(201)
|
|
(467)
|
|
(452)
|
OREO
valuations
|
|
103
|
|
7
|
|
100
|
|
10
|
|
41
|
|
110
|
|
86
|
OREO (gains) losses,
(net)
|
|
14
|
|
12
|
|
(30)
|
|
63
|
|
(27)
|
|
26
|
|
(73)
|
Pre-tax pre-provision
operating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
earnings
(non-GAAP)
|
$
|
2,535
|
$
|
1,995
|
$
|
1,984
|
$
|
1,752
|
$
|
1,592
|
$
|
4,530
|
$
|
2,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/first-south-bancorp-inc-reports-june-30-2016-quarterly-and-six-months-operating-results-300302209.html
SOURCE First South Bancorp, Inc.