Attached files
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| 8-K - FIRST SOUTH BANCORP INC /VA/ | v206116_8k.htm |
EXHIBIT
99.1
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PRESS
RELEASE
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FOR IMMEDIATE RELEASE
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December
16, 2010
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For
more information contact:
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First
South Bancorp, Inc.
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Tom
Vann (CEO) (252-940-4916) or
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Bill
Wall (CFO) (252-940-5017)
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Website:
www.firstsouthnc.com
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First
South Bancorp, Inc. Estimates a Preliminary Operating Loss for the Quarter
Ending December 31, 2010 and Suspends Quarterly Dividend Payment
Washington,
North Carolina - First South Bancorp, Inc. (NASDAQ: FSBK) (the
“Company”), the parent holding company of First South Bank (the “Bank”), today
announced that it anticipates a preliminary operating loss in the fourth quarter
of 2010. Additionally, the Company announced that it would suspend
its quarterly dividend payment.
The
Company plans to release its fourth quarter operating results in mid-January. At
this time, management estimates a preliminary after tax operating loss of
approximately $6.5 million for the quarter ending December 31,
2010. Tom Vann, President and CEO, commented that, “We have conducted
an intensive evaluation of the credit quality of the Bank’s loan portfolio and
are boosting our loan loss reserves by a significant amount. In light
of the continued economic uncertainty, we recognize the financial stress some of
our borrowers are facing. We feel it is prudent and wise to take a
pro-active stance with regards to credit risk management and provision
accordingly, so that we can get these problems behind us and move forward in a
more positive manner."
"We are
moving aggressively from a position of financial strength to deal with our
credit quality. Subsequent to these necessary provision charges, our capital
levels will remain in excess of the regulatory requirements to be well
capitalized. This will allow the Company to move ahead in a
substantive way, and hopefully expected retained earnings over the coming years
will recover much of the capital expended by taking these charges," added Mr.
Vann.
Regarding
suspending the dividend, Mr. Vann said, "The decision to suspend the dividend
was a difficult one. While we understand how important dividends are to
our shareholders, the Board believes this is the prudent course of action at
this time. The Board considers it more prudent to suspend dividend
payments at this point and maintain capital in the Bank."
Mr. Vann
continued, "The Board believes the payment of dividends in conjunction with the
estimated net operating loss is a questionable use of capital. The
Board will continue to review the status of future dividend payments, which will
depend upon the Company’s financial condition, earnings, equity structure,
capital needs, economic conditions and regulatory requirements.”
First
South Bancorp, Inc. may be accessed on its website at www.firstsouthnc.com. The
Company’s common stock symbol as traded on the NASDAQ Global Select Market is
“FSBK”.
First
South Bank has been serving the citizens of eastern North Carolina since 1902
and offers a variety of financial products and services, including a leasing
company. Securities brokerage services are made available through an affiliation
with an independent broker/dealer. The Bank operates through its main office
headquartered in Washington, North Carolina, and has 28 full service branch
offices and one loan production office located throughout central, eastern,
northeastern and southeastern North Carolina.
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.
(NASDAQ:
FSBK)