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
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Consolidated
Statements of Financial Condition
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|
|
December
31,
|
|
|
December
31,
|
|
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|
|
2015
|
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2014
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Assets
|
|
|
(Unaudited)
|
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(As
restated)
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks
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|
$
|
19,425,747
|
|
$
|
23,281,016
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|
Interest-bearing
deposits with banks
|
|
|
18,565,521
|
|
|
32,835,661
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|
Investment securities
available-for-sale, at fair value
|
|
|
248,294,725
|
|
|
292,298,910
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|
Investment securities
held-to-maturity
|
|
|
508,456
|
|
|
507,309
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|
Mortgage loans held
for sale
|
|
|
3,943,798
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|
|
4,792,943
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|
|
|
|
|
|
|
|
|
Loans and leases held
for investment
|
|
|
607,014,247
|
|
|
480,436,270
|
|
Allowance for loan
and lease losses
|
|
|
(7,866,523)
|
|
|
(7,519,970)
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|
Net loans and leases held for investment
|
|
|
599,147,724
|
|
|
472,916,300
|
|
|
|
|
|
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|
Premises and
equipment, net
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|
|
13,664,937
|
|
|
15,821,436
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|
Other real estate
owned
|
|
|
6,125,054
|
|
|
7,755,541
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|
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
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Mortgage servicing
rights
|
|
|
1,265,589
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|
|
1,178,115
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Identifiable
intangible assets
|
|
|
1,895,514
|
|
|
2,182,909
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|
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
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|
$
|
946,282,972
|
|
$
|
885,430,647
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Liabilities and
Stockholders' Equity
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Deposits:
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Non-interest
bearing demand
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$
|
169,545,849
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|
$
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147,543,594
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Interest
bearing demand
|
|
|
246,376,521
|
|
|
268,472,945
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|
Savings
|
|
|
135,369,668
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|
|
117,932,606
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|
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
|
|
|
|
|
|
|
|
|
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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
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|
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Common stock, $.01
par value, 25,000,000 shares authorized;
|
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|
|
|
|
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9,489,222 and 9,598,007 shares outstanding, respectively
|
|
|
94,892
|
|
|
95,980
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|
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
|
|
|
|
|
|
|
|
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|
(a) - revised for
prior period error
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First South
Bancorp, Inc. and Subsidiary
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Consolidated
Statements of Operations
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|
|
|
|
|
|
|
|
(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
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/first-south-bancorp-inc-reports-record-loan-growth-december-31-2015-quarterly-and-year-end-operating-results-300210738.html
SOURCE First South Bancorp, Inc.