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
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.
