From First South Bank 

First South Bancorp Inc., the parent holding company of First South Bank, reported that on April 28, the company’s Board of Directors declared a quarterly cash dividend of $0.03 per share, payable May 19 to shareholders of record as of the close of business on May 9. This quarterly cash dividend payment represents a 20-percent payment rate increase over the previous quarterly dividend payment.

The company’s net income for the first quarter of 2016 was $1.5 million or $0.15 per diluted common share, compared to $725,000, or $0.08 per diluted common share earned for the 2015 first quarter. Net income for the 2015 first quarter reflects the impact of $425,000 of one-time, pre-tax transaction expenses associated with the acquisition of nine branch offices from Bank of America in mid-December 2014.  Net income for the linked 2015 fourth quarter was $1.6 million, or $0.16 per diluted common share.

Loan portfolio growth during the 2016 first quarter remained strong for the company, as loans and leases held for investment increased to $639 million at March 31, from $607 million at Dec. 31, 2015, and $488.7 million at March 31, 2015.  The ongoing expansion of our loan portfolio should continue to have a favorable impact on the company’s margin and revenue generation in future periods.

 

2016 First Quarter Highlights 

• Strong first-quarter loan growth as we increased LHFI $32 million or 21.1 percent on an annualized basis.

• Expanded Small Business Administration loan sales and servicing.

• Improved asset quality metrics with lower levels of past due and non-performing loans, as well as other real estate owned. Total non-performing assets were 0.95 percent of total assets at March 31.

• Experienced positive deposit growth over the linked quarter and first quarter one year ago.

• Increased our net interest margin when compared to the first quarter one year ago.

• Consolidated three branches into nearby locations, which is expected to positively impact efficiency in future periods.

• Our new branch opened in Williamston on Nov. 30, 2015, was profitable in its first full quarter of operation.

 

Bruce Elder, president and CEO, said, “We are pleased to report the financial results for the first quarter of 2016, which illustrate the continued execution of our strategy to build long-term stockholder value. Coupled with the growth in 2015, we have increased our loan and lease portfolio by $158 million since Dec. 31, 2014. Over the past 15 months, we have changed the mix of our earning assets by transitioning over $99 million from lower yielding investments and cash into higher yielding loans. Over the same period, our deposits have increased by over $30 million, almost $17 million of which is in non-interest bearing deposits. The transformation is having a positive impact on earnings as net income has doubled for the first quarter of 2016 compared to the same prior year quarter. During the first quarter, we consolidated three branch locations with other nearby facilities. The financial results for the quarter reflect approximately $160,000 of pre-tax restructuring costs associated with the consolidations. While branch consolidations typically result in some customer loss, particularly with cash intensive customers, our retention rate is very high due to the relationships we have built and our electronic banking capabilities. We continue to strive to enhance our operating leverage and further improve efficiency.

“Finally, we remain focused on asset quality, both the new business we are generating as well as the existing loan and lease portfolio. Despite a slight decrease in total assets during the quarter, our ratio of non-performing assets to total assets declined to 0.95 percent from 1 percent at Dec. 31, 2015. Our loan growth over the past 15 months has not come as a result of relaxed credit underwriting standards.”