First South Bancorp Inc., the parent holding company of First South Bank, reports its unaudited financial results for the quarter and year ended Dec. 31, 2016.

The company’s diluted earnings per common share for the fourth quarter of 2016 increased 31.3 percent 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 percent 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 million, or 27.2 percent, 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 million, or 48.6 percent, 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 million, diluted EPS of $0.21 per share, return on average assets of 0.8 percent, return on average equity of 8.94 percent and return on average tangible common equity of 9.82 percent.
• Loans and leases held for investment grew $18.2 million during the quarter, to $700.6 million, representing an annualized growth rate of 10.7 percent.
• Deposits grew $10.8 million during the quarter to $870.6 million, or an annualized growth rate of 5 percent.

FISCAL YEAR 2016 HIGHLIGHTS

•  Strong earnings performance with net income of $7 million, diluted EPS of $0.73 per share, ROA of 0.72 percent,      ROE of 8.02 percent and ROTCE of 8.86 percent.
•  Strategic execution as evidenced by highest annual diluted EPS since 2008.
•  Grew total assets $44.4 million, or 4.7 percent, during 2016.
•  Continued to maintain a strong capital position.
•  Loans and leases HFI grew $93.6 million or 15.4 percent during 2016.
•  Total deposits grew $59.3 million, or 7.3 percent, during 2016.
•  Total non-interest bearing deposits grew 16.1 percent to $196.9 million.
•  Net interest income grew by $3.21 million, or 10.9 percent, to $32.6 million.
•  Net interest margin increased to 3.71 percent for fiscal year 2016.
•  Non-interest income was $14.2 million, which represents 30.3 percent of total revenues.
•  Non-performing assets to total assets declined to 0.63 percent from 1 percent 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-percent increase.
•  Expanded Small Business Administration loan sales and servicing.
•  Consolidated three branches into nearby locations with the goal of positively impacting efficiency.

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.