FIRST SOUTH BANCORP, INC. WASHINGTON, N.C., Jan. 26, 2017 /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, 2016.
The Company's diluted earnings per common share (EPS) for the fourth quarter of 2016 increased 31.3% to $0.21 per share from $0.16 per share for the fourth quarter of 2015. Diluted EPS for the full fiscal year of 2016 increased 49.0% to $0.73 per common share from $0.49 per common share for fiscal year 2015. The Company continues to generate solid core revenue and net interest income from strong loan and deposit growth, while maintaining excellent credit quality and enhancing its capital position.
The Company's net income increased to $2.0 million, or 27.2%, in the fourth quarter of 2016 from, $1.6 million for the fourth quarter of 2015. Net income for fiscal year 2016 increased to $7.0 million, or 48.6%, from $4.7 million for fiscal year 2015.
"The Company continues to deliver quality core financial results, showcasing the execution of our strategic plan and our ability to consistently generate earnings through sustainable revenue growth in commercial, consumer and mortgage banking services," Chief Executive Officer Bruce Elder said. "We are also pleased that the depth of new and existing customer relationships has resulted in robust deposit growth, which continues to support very healthy loan growth. Our capital levels and capital creation through retained earnings supports continued organic balance sheet growth."
FOURTH QUARTER 2016 HIGHLIGHTS
-- Strong earnings performance with net income of $2.0 million, diluted EPS
of $0.21 per share, return on average assets (ROA) of 0.80%, return on
average equity (ROE) of 8.94% and return on average tangible common
equity (ROTCE) (a non-GAAP measure) of 9.82%.
-- Loans and leases held for investment (HFI) grew $18.2 million during the
quarter, to $700.6 million, representing an annualized growth rate of
10.7%.
-- Deposits grew $10.8 million during the quarter to $870.6 million, or an
annualized growth rate of 5.0%.
FISCAL YEAR 2016 HIGHLIGHTS
-- Strong earnings performance with net income of $7.0 million, diluted EPS
of $0.73 per share, ROA of 0.72%, ROE of 8.02% and ROTCE of 8.86%.
-- Strategic execution as evidenced by highest annual diluted EPS since
2008.
-- Grew total assets $44.4 million, or 4.7%, during 2016.
-- Continued to maintain a strong capital position.
-- Loans and leases HFI grew $93.6 million or 15.4% during 2016.
-- Total deposits grew $59.3 million, or 7.3%, during 2016.
-- Total non-interest bearing deposits grew 16.1% to $196.9 million.
-- Net interest income grew by $3.21 million, or 10.9%, to $32.6 million.
-- Net interest margin increased to 3.71% for fiscal year 2016.
-- Non-interest income was $14.2, million which represents 30.3% of total
revenues.
-- Non-performing assets to total assets declined to 0.63% from 1.00% at
the previous year-end.
-- Completed the purchase of mortgage servicing rights for 452 high-quality
Freddie Mac and Fannie Mae loans with an unpaid principal balance of
$84.6 million at settlement.
-- Increased quarterly dividend payment rate to $0.03 per share, a 20%
increase.
-- Expanded Small Business Administration loan sales and servicing.
-- Consolidated three branches into nearby locations with the goal of
positively impacting efficiency.
Important disclosures about and reconciliations of non-GAAP measures, including ROTCE, to the corresponding GAAP measures, are provided below and attached to this press release.
The Company's strong loan and deposit growth continues to support revenue increases, allowing for net interest margin expansion despite the prevailing low interest rate environment. As a result, our net interest income (NII) grew to $8.4 million in the fourth quarter of 2016, from $7.7 million in the comparative 2015 fourth quarter. NII for fiscal year 2016 grew to $32.6 million, increasing 10.9% from the $29.4 million of NII generated for fiscal year 2015.
Total non-interest income was $3.4 million, or 28.6% of total revenue (net interest income plus noninterest income) in the fourth quarter of 2016, compared to $3.7 million, or 32.6%, in the comparative 2015 fourth quarter. Total non-interest income for fiscal year 2016 was $14.2 million, or 30.3% of total revenue, compared to $14.3 million, or 32.7% for fiscal year 2015. The decline in non-interest income is attributable to a decline in non-core gains on sales of investment securities. The Bank had no gains from investment securities sales for the 2016 fourth quarter, compared to $463,000 for the prior year quarter. Gains realized from the sale of investment securities for fiscal years 2016 and 2015 were $467,000 and $1.4 million, respectively. We have sold investment securities primarily to fund the growth in our loan and leases HFI.
The Company's efficiency ratio for the fourth quarter of 2016 improved to 74.16%, from 81.41% in the comparative fourth quarter of 2015. The efficiency ratio for fiscal year 2016 improved to 76.51%, from 84.53% for fiscal year 2015. Non-interest expenses in the fourth quarter of 2016 declined to $8.8 million, from $9.1 million in the comparative fourth quarter of 2015. Total non-interest expenses for fiscal year 2016 declined to $35.9 million, from $36.4 million for fiscal year 2015.
Income tax expense was $775,000 for the 2016 fourth quarter, compared to $484,000 for the 2015 fourth quarter. The effective income tax rates were 28.00% and 23.60% for these reporting periods, respectively. For fiscal year 2016, income tax expense was $3.0 million versus $1.8 million for fiscal year 2015. The effective income tax rates were 29.84% and 28.18% for fiscal years 2016 and 2015, respectively.
BALANCE SHEET GROWTH
Loans and leases HFI totaled $700.6 million at December 31, 2016, increasing $93.6 million, or 15.4%, over the $607.0 million held at December 31, 2015. Loans held for sale totaled $5.1 million at December 31, 2016, growing 29.3% from the $3.9 million held at the end of fiscal year 2015. Investment securities and interest-bearing deposits at other banks declined to $216.4 million at December 31, 2016, compared to $267.4 million at year end 2015, resulting primarily from sales of investment securities to fund growth in our loans and leases HFI portfolio.
Deposits totaled $870.6 million at December 31, 2016, increasing $59.3 million, or 7.3%, from $811.3 million at December 31, 2015. Non-maturity deposits (personal and business checking, money market, and savings accounts) grew by $62.8 million, or 11.4%, to $614.1 million at December 31, 2016, from $551.3 million at December 31, 2015. Certificates of deposit (CDs) declined to $256.6 million at December 31, 2016, from $260.0 million at December 31, 2015. CDs represented 29.5% and 32.1% of total deposits at December 31, 2016, and December 31, 2015, respectively.
ASSET QUALITY
Solid asset quality metrics in the fourth quarter of 2016 continue to reflect the Company's disciplined credit culture.
Non-performing assets (NPAs) declined to $6.3 million at December 31, 2016, or 0.63% of total assets, from $9.4 million, or 1.00% of total assets, at December 31, 2015. NPAs at December 31, 2016 included $3.2 million of other real estate owned (OREO), which declined by $2.9 million, or 47.3%, from $6.1 million at December 31, 2015. Nonaccrual loans and leases were $3.1 million at December 31, 2016, or 0.44% of loans and leases HFI, compared to $3.2 million, or 0.53%, at December 31, 2015.
The provision for credit losses in the 2016 fourth quarter declined to $200,000, from $325,000 for the 2015 fourth quarter. The provision for credit losses increased to $970,000 in fiscal year 2016, from $800,000 in fiscal year 2015. The allowance for loan losses represented 1.24% of loans and leases HFI at December 31, 2016, compared to 1.30% at December 31, 2015.
REGULATORY CAPITAL STRENGTH
As of December 31, 2016, reported regulatory capital ratios at the Bank were 13.01% for total risk-based capital, 11.80% for tier 1 risk-based capital, 11.80% for common equity tier 1 risk-based capital and 8.89% for tier 1 leverage, compared to 13.29% for total risk-based capital, 12.06% for tier 1 risk-based capital, 12.06% for common equity tier 1 risk-based capital and 8.67% for tier 1 leverage at December 31, 2015.
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.
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. The Company assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
NON-GAAP FINANCIAL MEASURES
This press release and the Supplemental Financial Data contain financial information determined by methods other than in accordance with generally accepted accounting principles (GAAP) 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. 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. Reconciliations of non-GAAP disclosures are provided within the accompanying tables to this press release.
(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
December 31, December 31,
2016 2015
---- ----
(unaudited) (*)
Assets
Cash and due from banks $22,854,712 $19,425,747
Interest-bearing deposits with banks 23,320,968 18,565,521
Investment securities available for sale, at fair value 192,606,119 248,294,725
Investment securities held to maturity 509,617 508,456
Mortgage loans held for sale 5,098,518 3,943,798
Loans and leases held for investment 700,642,291 607,014,247
Allowance for loan and lease losses (8,673,172) (7,866,523)
---------- ----------
Net loans and leases held for investment 691,969,119 599,147,724
Premises and equipment, net 11,291,596 13,664,937
Assets held for sale 192,720 -
Other real estate owned 3,229,423 6,125,054
Federal Home Loan Bank stock, at cost 1,573,700 2,369,300
Accrued interest receivable 3,525,684 2,874,506
Goodwill 4,218,576 4,218,576
Mortgage servicing rights 2,148,905 1,265,589
Identifiable intangible assets 1,611,187 1,895,514
Bank-owned life insurance 18,080,183 15,635,140
Prepaid expenses and other assets 8,470,887 8,348,385
--------- ---------
Total assets $990,701,914 $946,282,972
============ ============
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing demand $196,917,165 $169,545,849
Interest bearing demand 272,098,903 246,376,521
Savings 145,031,981 135,369,668
Large denomination certificates of deposit 122,819,510 116,299,196
Other time 133,732,804 143,730,993
----------- -----------
Total deposits 870,600,363 811,322,227
Borrowed money 17,000,000 37,000,000
Junior subordinated debentures 10,310,000 10,310,000
Other liabilities 5,607,832 5,479,971
--------- ---------
Total liabilities 903,518,195 864,112,198
----------- -----------
Common stock, $.01 par value, 25,000,000 shares authorized;
9,494,935 and 9,489,222 shares outstanding, respectively 94,949 94,892
Additional paid-in capital 36,018,743 35,936,911
Retained earnings 49,560,595 43,691,073
Accumulated other comprehensive income 1,509,432 2,447,898
--------- ---------
Total stockholders' equity 87,183,719 82,170,774
---------- ----------
Total liabilities and stockholders' equity $990,701,914 $946,282,972
(*) Derived from audited consolidated financial statements
First South Bancorp, Inc. and Subsidiary
Consolidated Statements of Operations
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
(unaudited) (unaudited) (unaudited) (*)
Interest income:
Interest and fees on loans $7,999,279 $7,005,095 $30,748,105 $25,839,566
Interest on investments and deposits 1,336,777 1,563,857 5,468,110 6,611,037
--------- --------- --------- ---------
Total interest income 9,336,056 8,568,952 36,216,215 32,450,603
--------- --------- ---------- ----------
Interest expense:
Interest on deposits 734,276 637,680 2,829,085 2,367,750
Interest on borrowings 59,852 63,272 247,536 124,865
Interest on junior subordinated notes 125,631 140,039 534,258 561,694
------- ------- ------- -------
Total interest expense 919,759 840,991 3,610,879 3,054,309
------- ------- --------- ---------
Net interest income 8,416,297 7,727,961 32,605,336 29,396,294
Provision for credit losses 200,000 325,000 970,000 800,000
------- -------
Net interest income after provision for credit losses 8,216,297 7,402,961 31,635,336 28,596,294
--------- --------- ---------- ----------
Non-interest income:
Deposit fees and service charges 1,841,351 2,004,933 7,587,686 8,072,893
Loan fees and charges 102,765 89,286 370,977 268,482
Mortgage loan servicing fees 386,283 283,070 1,237,054 1,090,196
Gain on sale and other fees on mortgage loans 537,507 536,536 2,332,524 2,022,813
Gain on sale of other real estate, net 80,548 30,537 131,481 40,351
Gain on sale of investment securities 0 463,203 467,470 1,417,716
Other income 423,886 328,129 2,060,312 1,385,524
------- ------- --------- ---------
Total non-interest income 3,372,340 3,735,694 14,187,504 14,297,975
--------- --------- ---------- ----------
Non-interest expense:
Compensation and fringe benefits 4,863,584 4,902,583 19,819,368 19,377,688
Federal deposit insurance premiums 152,523 164,324 631,799 609,406
Premises and equipment 1,363,551 1,355,384 5,467,277 5,331,960
Marketing 133,700 221,831 702,257 820,308
Data processing 786,096 778,070 3,089,513 3,583,170
Amortization of intangible assets 168,920 128,447 570,902 515,044
Other real estate owned expense 127,521 168,849 553,143 631,675
Other 1,223,301 1,367,195 5,066,180 5,504,476
--------- --------- --------- ---------
Total non-interest expense 8,819,196 9,086,683 35,900,439 36,373,727
--------- --------- ---------- ----------
Income before income tax expense 2,769,441 2,051,972 9,922,401 6,520,542
Income tax expense 775,298 484,346 2,961,139 1,837,329
------- ------- --------- ---------
NET INCOME $1,994,143 $1,567,626 $6,961,262 $4,683,213
========== ========== ========== ==========
Per share data:
Basic earnings per share $0.21 $0.17 $0.73 $0.49
Diluted earnings per share $0.21 $0.16 $0.73 $0.49
Dividends per share $0.030 $0.025 $0.115 $0.10
Average basic shares outstanding 9,494,935 9,489,222 9,493,700 9,521,392
Average diluted shares outstanding 9,529,753 9,513,916 9,522,765 9,542,401
(*) Derived from audited consolidated financial statements
First South Bancorp, Inc. Supplemental Financial Data (Unaudited)
Quarter to Date Year to Date
--------------- ------------
12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015 12/31/2016 12/31/2015
---------- --------- --------- --------- ---------- ---------- ----------
(dollars in thousands except per share data)
Consolidated balance sheet data:
--------------------------------
Total assets $990,702 $985,795 $961,479 $940,108 $946,283 $990,702 $946,283
Loans held for sale: $5,099 $7,313 $5,252 $2,490 $3,944 $5,099 $3,944
Loans and leases held for investment (HFI):
Mortgage $74,905 $74,710 $73,100 $73,412 $71,866 $74,905 $71,866
Commercial 535,047 518,265 510,678 482,779 454,877 535,047 454,877
Consumer 69,454 69,039 66,138 64,521 63,036 69,454 63,036
Leases 21,236 20,452 18,927 18,333 17,235 21,236 17,235
Total loans and leases HFI 700,642 682,466 668,843 639,045 607,014 700,642 607,014
Allowance for loan and lease losses (8,673) (8,498) (8,338) (8,135) (7,867) (8,673) (7,867)
------ ------ ------ ------ ------ ------
Net loans and leases HFI $691,969 $673,968 $660,505 $630,910 $599,147 $691,969 $599,147
Cash & interest bearing deposits $46,176 $57,209 $40,734 $36,115 $37,991 $46,176 $37,991
Investment securities 193,116 193,765 200,364 213,520 248,803 193,116 248,803
Bank-owned life insurance 18,080 17,937 17,795 17,653 15,635 18,080 15,635
Premises and equipment 11,292 11,609 11,671 12,144 13,665 11,292 13,665
Goodwill 4,219 4,219 4,219 4,219 4,219 4,219 4,219
Mortgage servicing rights 2,149 2,091 1,273 1,247 1,266 2,149 1,266
Identifiable intangible assets 1,611 1,682 1,753 1,824 1,896 1,611 1,896
Deposits:
Non-interest checking $196,917 $189,873 $177,281 $164,244 $169,546 $196,917 $169,546
Interest checking 189,401 176,034 170,153 171,323 173,934 189,401 173,934
Money market 82,698 88,081 72,054 73,000 72,442 82,698 72,442
Savings 145,032 141,701 142,151 146,255 135,370 145,032 135,370
Certificates 256,552 264,142 263,823 263,845 260,030 256,552 260,030
------- ------- ------- ------- ------- ------- -------
Total deposits $870,600 $859,831 $825,462 $818,667 $811,322 $870,600 $811,322
Borrowings $17,000 $20,000 $32,500 $21,500 $37,000 $17,000 $37,000
Junior subordinated debentures 10,310 10,310 10,310 10,310 10,310 10,310 10,310
Stockholders' equity 87,184 88,294 87,327 84,179 82,171 87,184 82,171
Consolidated earnings summary:
------------------------------
Interest income $9,336 $9,210 $8,998 $8,672 $8,569 $36,216 $32,450
Interest expense 920 911 898 882 841 3,611 3,054
--- --- --- --- --- ----- -----
Net interest income 8,416 8,299 8,100 7,790 7,728 32,605 29,396
Provision for credit losses 200 220 325 225 325 970 800
Noninterest income 3,372 3,691 3,548 3,576 3,736 14,187 14,298
Noninterest expense 8,819 8,929 9,046 9,106 9,087 35,900 36,374
----- ----- ----- ----- ----- ------ ------
Income before taxes 2,769 2,841 2,277 2,035 2,052 9,922 6,520
Income tax expense 775 947 665 574 484 2,961 1,837
--- --- --- --- --- ----- -----
Net income $1,994 $1,894 $1,612 $1,461 $1,568 $6,961 $4,683
====== ====== ====== ====== ====== ====== ======
Per Share Data:
---------------
Basic earnings per share $0.21 $0.20 $0.17 $0.15 $0.17 $0.73 $0.49
Diluted earnings per share $0.21 $0.20 $0.17 $0.15 $0.16 $0.73 $0.49
Dividends per share $0.03 $0.03 $0.03 $0.025 $0.025 $0.115 $0.10
Book value per share $9.18 $9.30 $9.20 $8.87 $8.66 $9.18 $8.66
Shares outstanding 9,494,935 9,494,935 9,493,776 9,493,776 9,489,222 9,494,935 9,489,222
Average basic shares 9,494,935 9,494,861 9,493,776 9,491,201 9,489,222 9,493,700 9,521,392
Average diluted shares 9,529,753 9,525,302 9,519,565 9,514,797 9,513,916 9,522,765 9,542,401
Performance ratios (tax equivalent):
------------------------------------
Yield on average earning assets 4.07% 4.13% 4.17% 4.07% 4.03% 4.11% 4.01%
Cost of interest bearing liabilities 0.52% 0.52% 0.52% 0.52% 0.49% 0.52% 0.47%
---- ---- ---- ---- ---- ---- ----
Net interest spread 3.55% 3.61% 3.64% 3.55% 3.54% 3.59% 3.54%
Net interest margin 3.68% 3.73% 3.76% 3.66% 3.64% 3.71% 3.64%
Average earning assets to total average assets 92.92% 92.42% 92.38% 92.20% 92.19% 92.49% 91.63%
Return on average assets (annualized) 0.80% 0.78% 0.68% 0.63% 0.67% 0.72% 0.52%
Return on average equity (annualized) 8.94% 8.52% 7.55% 6.97% 7.52% 8.02% 5.72%
Efficiency ratio 74.16% 73.84% 77.59% 80.74% 81.41% 76.51% 84.53%
Average assets $992,192 $968,729 $947,761 $938,702 $930,978 $961,856 $897,795
Average earning assets $921,984 $895,290 $875,529 $865,463 $858,243 $889,574 $822,641
Average equity $88,694 $88,481 $85,927 $84,265 $82,712 $86,844 $81,893
Equity/Assets 8.80% 8.96% 9.08% 8.95% 8.68% 8.80% 8.68%
First South Bancorp, Inc. Supplemental Financial Data (Unaudited)
Quarter to Date Year to Date
--------------- ------------
12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015 12/31/2016 12/31/2015
---------- --------- --------- --------- ---------- ---------- ----------
(dollars in thousands except per share data)
Asset quality data and ratios:
------------------------------
Nonaccrual loans and leases:
Non-TDR nonaccrual loans and leases
Earning $410 $569 $555 $945 $985 $410 $985
Non-Earning 1,257 1,289 1,075 895 710 1,257 710
Total Non-TDR nonaccrual loans and leases $1,667 $1,858 $1,630 $1,840 $1,695 $1,667 $1,695
------ ------ ------ ------ ------ ------ ------
TDR nonaccrual loans and leases
Current TDRs $422 $792 $706 $847 $1,343 $422 $1,343
Past Due TDRs 962 248 250 154 159 962 159
Total TDR nonaccrual loans and leases $1,384 $1,040 $956 $1,001 $1,502 $1,384 $1,502
------ ------ ---- ------ ------ ------ ------
Total nonaccrual loans and leases $3,051 $2,898 $2,586 $2,841 $3,197 $3,051 $3,197
Loans and leases >90 days past due, still accruing 0 0 218 153 115 0 115
Other real estate owned 3,229 4,810 5,541 5,956 6,125 3,229 6,125
----- ----- ----- ----- ----- -----
Total nonperforming assets $6,280 $7,708 $8,345 $8,950 $9,437 $6,280 $9,437
====== ====== ====== ====== ====== ====== ======
Allowance for loan and lease losses to
loans and leases HFI 1.24% 1.25% 1.25% 1.27% 1.30% 1.24% 1.30%
Net charge-offs (recoveries) $25 $60 $122 $(44) $28 $163 $425
Net charge-offs (recoveries) to total loans and leases 0.00% 0.01% 0.02% -0.01% 0.00% 0.02% 0.07%
Total nonaccrual loans and leases to total loans
and leases HFI 0.44% 0.42% 0.39% 0.44% 0.53% 0.44% 0.53%
Total nonperforming assets to total assets 0.63% 0.78% 0.87% 0.95% 1.00% 0.63% 1.00%
Total loans and leases to total deposits 81.06% 80.22% 81.66% 78.36% 75.30% 81.06% 75.30%
Total loans and leases to total assets 71.24% 69.97% 70.11% 68.24% 64.56% 71.24% 64.56%
Loans serviced for others $371,956 $370,606 $292,222 $293,548 $297,494 $371,956 $297,494
Reconciliation of Non-GAAP Measures:
------------------------------------
Pre-tax pre-provision operating earnings (non-GAAP):
Income before taxes (GAAP) $2,769 $2,841 $2,277 $2,035 $2,052 $9,922 $6,520
Provision for credit losses 200 220 325 225 325 970 800
--- --- --- --- --- --- ---
Pre-tax pre-provision net income 2,969 3,061 2,602 2,260 2,377 10,892 7,320
Securities (gains) losses, net 0 0 (184) (284) (463) (467) (1,418)
OREO valuations 140 0 103 7 100 250 195
OREO (gains) losses, (net) (80) (77) 14 12 (30) (131) (40)
--- --- --- --- --- ---- ---
Pre-tax pre-provision operating
earnings (non-GAAP) $3,029 $2,984 $2,535 $1,995 $1,984 $10,544 $6,057
====== ====== ====== ====== ====== ======= ======
Total core non-interest income (non-GAAP):
Non-interest income (GAAP) $3,372 $3,691 $3,548 $3,576 $3,736 $14,187 $14,298
Securities (gains) losses, net 0 0 (184) (284) (463) (467) (1,418)
OREO (gains) losses, (net) (80) (77) 14 12 (30) (131) (40)
--- --- --- --- --- ---- ---
Total core non-interest income (non-GAAP) $3,292 $3,614 $3,378 $3,304 $3,243 $13,589 $12,840
====== ====== ====== ====== ====== ======= =======
Tangible equity (non-GAAP):
Total equity (GAAP) $87,184 $88,294 $87,327 $84,179 $82,171 $87,184 $82,171
Intangible assets (a) 5,830 5,901 5,972 6,043 6,115 5,830 6,115
Tangible equity (non-GAAP) $81,354 $82,393 $81,355 $78,136 $76,056 $81,354 $76,056
======= ======= ======= ======= ======= ======= =======
Tangible Equity/Assets (non-GAAP) 8.21% 8.36% 8.46% 8.31% 8.04% 8.21% 8.04%
Tangible book value per share (non-GAAP) $8.57 $8.68 $8.57 $8.23 $8.02 $8.57 $8.02
Return on average tangible common equity (non-GAAP):
Net income (GAAP) $1,994 $1,894 $1,612 $1,461 $1,568 $6,961 $4,683
Amortization of intangibles, net of tax 51 47 50 51 55 199 206
--- --- --- --- --- --- ---
Tangible net income available to shareholders (non-GAAP) $2,045 $1,941 $1,662 $1,512 $1,623 $7,160 $4,889
====== ====== ====== ====== ====== ====== ======
Average equity 88,694 88,481 85,927 84,265 82,712 86,844 81,893
Average intangible assets (a) 5,876 5,946 6,018 6,088 6,161 5,982 6,268
Average tangible common equity (non-GAAP) $82,818 $82,535 $79,909 $78,177 $76,551 $80,862 $75,625
======= ======= ======= ======= ======= ======= =======
Return on average tangible common equity (non-GAAP) 9.82% 9.36% 8.37% 7.78% 8.43% 8.86% 6.47%
(a) Excludes mortgage servicing rights
Average Balances - Yield/Cost Analysis Three Months Ended December 31,
-------------------------------
2016 2015
---- ----
Average Balance Interest Average Yield/Cost Average Balance Interest Average Yield/Cost
--------------- -------- ------------------ --------------- -------- ------------------
Interest earning assets: (Dollars in thousands)
Loans receivable $691,790 $7,999 4.54% $591,941 $7,005 4.65%
Investments and deposits 230,194 1,337 2.64 (1) 266,311 1,564 2.63 (1)
------- ----- ---- ------- ----- ----
Total earning assets 921,984 9,336 4.07 (1) 858,252 8,569 4.03 (1)
Nonearning assets 70,208 72,730
Total assets $992,192 $930,982
======== ========
Interest bearing liabilities:
Deposits $671,964 734 0.43 $634,028 638 0.40
Borrowings 20,598 60 1.16 31,234 63 0.81
Junior subordinated debentures 10,310 126 4.77 10,310 140 5.32
------ --- ---- ------ --- ----
Total interest bearing liabilities 702,872 920 0.52 675,572 841 0.49
Noninterest bearing demand deposits 193,627 - - 167,063 - -
------- --- --- ------- --- ---
Total sources of funds 896,499 920 0.41 842,635 841 0.39
Other liabilities 6,999 5,635
Stockholders' equity 88,694 82,712
------ ------
Total liabilities and equity $992,192 $930,982
======== ========
Net interest income $8,416 $7,728
====== ======
Interest rate spread (1)(2) 3.55% 3.54%
==== ====
Net interest margin (1)(3) 3.68% 3.64%
==== ====
Ratio of earning assets to interest bearing liabilities 131.17% 127.04%
====== ======
Twelve Months Ended December 31,
--------------------------------
2016 2015
---- ----
Average Balance Interest Average Yield/Cost Average Balance Interest Average Yield/Cost
--------------- -------- ------------------ --------------- -------- ------------------
Interest earning assets: (Dollars in thousands)
Loans receivable $663,963 $30,748 4.58% $538,286 $25,840 4.75%
Investments and deposits 225,611 5,468 2.75 (1) 284,355 6,611 2.61 (1)
------- ----- ---- ------- ----- ----
Total earning assets 889,574 36,216 4.11 (1) 822,641 32,451 4.01 (1)
Nonearning assets 72,282 75,154
Total assets $961,856 $897,795
======== ========
Interest bearing liabilities:
Deposits $657,838 2,829 0.43 $627,052 2,368 0.38
Borrowings 23,484 248 1.05 15,761 125 0.78
Junior subordinated debentures 10,310 534 5.10 10,310 562 5.37
------ --- ---- ------ --- ----
Total interest bearing liabilities 691,632 3,611 0.52 653,123 3,055 0.47
Noninterest bearing demand deposits 177,035 - - 157,953 - -
------- --- --- ------- --- ---
Total sources of funds 868,667 3,611 0.41 811,076 3,055 0.38
Other liabilities 6,345 4,826
Stockholders' equity 86,844 81,893
------ ------
Total liabilities and equity $961,856 $897,795
======== ========
Net interest income $32,605 $29,396
======= =======
Interest rate spread (1)(2) 3.59% 3.54%
==== ====
Net interest margin (1)(3) 3.71% 3.64%
==== ====
Ratio of earning assets to interest bearing liabilities 128.62% 125.95%
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(1) Shown as a tax-adjusted yield.
(2) Represents the difference between the average yield on earning assets and the average cost of funds.
(3) Represents net interest income divided by average earning assets.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/first-south-bancorp-inc-reports-increased-december-31-2016-quarterly-and-year-end-operating-results-300396661.html
SOURCE First South Bancorp, Inc.
