EXHIBIT 99.1

 

PRESS RELEASE	FOR IMMEDIATE RELEASE
October 17, 2013	For more information contact:
First South Bancorp, Inc.	Bruce Elder (CEO) (252) 940-4936
	Scott McLean (CFO) (252) 940-5016
	Website: www.firstsouthnc.com

 

 

 

First South Bancorp, Inc. Reports Quarterly Loan and Asset Growth, Improved Asset Quality and Year-to-Date Increase in Operating Results

 

Washington, North Carolina - First South Bancorp, Inc. (NASDAQ: FSBK) (the “Company”), the parent holding company of First South Bank (the “Bank”), reports its unaudited results for the quarter and nine months ended September 30, 2013.

 

A bulk sale of problem loans was executed in February 2013 with the expectation that the reduction in credit quality issues would allow management and staff to focus on growing the Company. During the third quarter, those expectations were realized as the Bank experienced increases in total assets, total loans and leases held for investment and total deposits when compared to June 30, 2013. As a result of the bulk asset sale and a significant valuation adjustment against other real estate owned (OREO), for which the financial ramifications were realized in the fourth quarter of 2012, expenses associated with the on-going maintenance and disposal of OREO, as well as the provision for loan losses, have been greatly reduced and are the drivers of earnings improvement for the comparative third quarter and year-to-date periods.

 

Net income for the 2013 third quarter increased by 59.1% or $571,000 to $1.5 million, or $0.16 per diluted common share, compared to net income of $966,000, or $0.10 per diluted common share for the 2012 third quarter. Net income for the first nine months of 2013 increased 155.1% to $4.9 million, or $0.50 per diluted common share, compared to net income of $1.9 million, or $0.20 per diluted common share for the first nine months of 2012.

 

Bruce Elder, President and CEO, commented, “We have been transforming our Company from one that was focused exclusively on working through various challenges presented by the economic downturn to one that can concentrate on growing and developing relationships, enhancing revenue opportunities and restructuring parts of the balance sheet to achieve a more desirable asset liability position. The growth since June 30, 2013 in total loans and leases held for investment was the first quarterly growth experienced in over three years. We have recently introduced new deposit products for both consumers and business customers that are designed to deepen relationships and offer new technologies such as mobile and remote deposit capture. We will continue to work toward the reduction of non-performing assets and improving processes to build a solid pipeline of business opportunities.”

 

Net Interest Income

 

Net interest income for the third quarter of 2013 was $6.5 million, down 11.0% or $804,000 from $7.3 million earned for the comparative 2012 third quarter. Net interest income for the first nine months of 2013 was $20.4 million, down from $22.5 million reported in the comparative 2012 nine months period. The tax equivalent net interest margin declined by 15 basis points to 4.25% for the 2013 third quarter from 4.40% for the comparative 2012 third quarter. The tax equivalent net interest margin for the first nine months of 2013 declined by 5 basis points to 4.38%, from 4.43% for the comparative 2012 nine month period.

 

The year-over-year decline in net interest income and the net interest margin is due primarily to a reduction in the level, and a change in the composition, of our earning asset base. Total average earning assets have been reduced by 5.4% for the nine month period as the average level of loans and leases held for investment has compressed, primarily due to the bulk loan sale. This reduction has been somewhat offset with an increased level of investment securities and interest-bearing cash. From early May to early July of 2013 the yield on the ten year Treasury Note increased over 100 basis points. Given this change and the anticipation of further increases in the interest rate environment, the Company executed a number of strategic transactions designed to protect its balance sheet and future earnings stream. One such measure the Company took during the third quarter of 2013 was to sell approximately $32.5 million of low coupon mortgage backed securities due to the sensitivity of their values to interest rate volatility. A portion of the proceeds from this sale was redeployed into other investment securities that will perform better in a rising interest rate environment, with the residual funds retained in cash to be redeployed into future loan growth or other investments where returns will improve as rates increase. The immediate impact of this transaction, in conjunction with defensive investments made earlier in the year, is a reduction in our quarterly interest income and yield from our investment portfolio. However, our balance sheet is better poised to respond to increases in interest rates and the Company is able to take advantage of future opportunities as they present themselves.

 

 

Asset Quality and Provisions for Loan Losses

 

Asset quality metrics continue to improve. Total nonperforming assets declined to $16.7 million, or 2.4% of total assets at September 30, 2013, compared to $34.9 million or 4.8% of total assets at December 31, 2012. Total loans in non-accrual status declined to $7.1 million at September 30, 2013, from $21.3 million at December 31, 2012. Our level of OREO declined to $9.0 million at September 30, 2013 compared to $12.9 million at December 31, 2012. The composition of the $3.9 million decline in OREO included $5.7 million in disposals and $484,000 in valuation adjustments, net of $2.3 million in additions.

 

The allowance for loan and lease losses (ALLL) was $7.7 million at September 30, 2013 and represented 1.75% of loans and leases held for investment, compared to $7.9 million at December 31, 2012, or 1.77%. During the 2013 third quarter, there were net charge offs of $898,000 compared to $959,000 for the 2012 third quarter. The Company recorded no provision for credit losses in the third quarter compared to $2.0 million recorded in the 2012 third quarter. During the first nine months of 2013, the Company recorded $400,000 of provision for credit losses compared to $4.6 million in the first nine months of 2012. Management believes the ALLL remains adequate.

 

Non-Interest Income

 

Total non-interest income was $2.7 million for the 2013 third quarter compared to $2.6 million for the 2012 third quarter.

 

Fees and service charges on deposits totaled $1.1 million for both the 2013 third quarter and the comparative 2012 third quarter. Fees on loans and loan servicing fees increased to $740,000 for the 2013 third quarter from $480,000 for the comparative 2012 third quarter, primarily related to a $213,000 increase in service release premiums from the sale of mortgage loans. We anticipate additional revenue from deposit and loan fees for the remainder of 2013, as we focus on growing demand accounts and our loans and leases held for investment.

 

Net gains from sales of mortgage loans held for sale was $286,000 for the 2013 third quarter and $858,000 for the comparative 2012 third quarter. Mortgage loan originations during the past two quarters have slowed as new purchase activity has not fully replaced the reduction in refinance activity. Gains from the sale of investment securities were $268,000 for the 2013 third quarter and $28,000 for the comparative 2012 third quarter. Net gains from sales of OREO were $68,000 for the 2013 third quarter compared to net losses of $56,000 for the 2012 third quarter.

 

For the first nine months of 2013, total non-interest income was $8.1 million compared to $8.2 million reported in the first nine months 2012. Fees and service charges on deposits was $3.2 million for both nine month periods ending September 30, 2013 and 2012. Fees on loans and loan servicing fees increased to $2.1 million for the first nine months of 2013, from $1.5 million for the comparative 2012 nine month period, reflecting a $581,000 increase in service release premiums from the sale of mortgage loans.

 

Net gains recognized from the sale of loans held for sale and investment securities was $1.2 million and $548,000, respectively, compared to $1.4 million and $1.5 million, respectively, for the first nine months of 2012. Net gains from the sale of OREO were $403,000 for the first nine months of 2013 compared to $132,000 of net losses for the first nine months of 2012. Total core non-interest income, excluding net gains and losses from securities and OREO sales, was $7.2 million for the current nine month period compared to $6.8 million for the prior year nine month period.

 

 

Non-Interest Expense

 

Total non-interest expense was $6.9 million for the 2013 third quarter compared to $6.4 million for the 2012 third quarter. For the first nine months of 2013, total non-interest expense declined significantly to $20.6 million from $23.3 million reported in the first nine months of 2012. This was primarily attributable to a significant reduction in OREO valuation and maintenance expenses, as well as lower compensation and employee benefits expenses.

 

Compensation and benefit expenses, the largest component of non-interest expenses, was $3.8 million for the 2013 third quarter compared to $3.9 million for the 2012 third quarter. For the first nine months of 2013, compensation expense declined to $11.5 million from $12.9 million reported in the first nine months of 2012. The Bank will continue to manage staffing levels to ensure we meet the ongoing needs of our customers and to support our future growth.

 

Data processing costs increased to $578,000 and $1.8 million for the three and nine month periods ended September 30, 2013, respectively, from $344,000 and $1.6 million for the respective three and nine month periods ended September 30, 2012, reflecting the expiration of favorable initial pricing received from a core data processing system conversion completed in March 2012.

 

Expenses attributable to valuation adjustments, ongoing maintenance, and property taxes for OREO properties declined to $288,000 for the 2013 third quarter from $316,000 for the comparative 2012 third quarter. For the first nine months of 2013, total OREO related expense was $1.0 million, compared to $2.9 million reported in the first nine months of 2012.

 

FDIC insurance premiums, premises and equipment, advertising and amortization of intangibles remained relatively consistent during the respective reporting periods.

 

Other expense increased to $1.0 million and $2.8 million for the respective three and nine month periods ended September 30, 2013, from $809,000 and $2.5 million for the respective three and nine month periods ended September 30, 2012, primarily related to mortgage loan servicing expenses and nonrecurring other professional services.

 

Balance Sheet

 

Total assets were $682.0 million at September 30, 2013, down from $707.7 million at December 31, 2012. Our total assets were reduced and our asset mix changed as proceeds from the bulk loan transaction and the sale of mortgage loans held for sale were used to pay off maturing FHLB advances and re-deployed into investments. Although experiencing reduction since the prior year end, total assets increased on a linked quarter basis by $1.9 million from $680.1 million.

 

Loans and leases held for investment increased by $6.3 million during the quarter from $434.0 million at June 30, 2013. This increase in loans and leases held for investment reflects the first quarterly increase since the quarter ended June 30, 2010. As a result of this increase, total loans and leases held for investment were $440.3 million compared to $441.8 million at December 31, 2012. Going forward, we are focused on developing new business opportunities and relationships.

 

Investment securities and interest-earning deposits with banks increased to $175.4 million at September 30, 2013, from $168.2 million at December 31, 2012, reflecting re-investment of a portion of the bulk loan sale proceeds. The Bank has utilized this opportunity to add defensive investments to the portfolio. While these bonds have a lower current yield than our legacy portfolio, they will help insulate earnings in a rising rate environment. Other assets increased to $21.1 million at September 30, 2013, reflecting the purchase of $10.0 million of bank owned life insurance.

 

Total deposits declined to $591.6 million at September 30, 2013 from $600.9 million at December 31, 2012; however, total deposits increased by $1.8 million since June 30, 2013 with non-maturity deposits growth of $13.4 million more than offsetting the $11.6 million decline in certificates of deposits. For the year, non-maturity deposits increased to $333.1 million at September 30, 2013 from $305.2 million at December 31, 2012. Certificates of deposit declined to $258.6 million or 43.7% of total deposits at September 30, 2013 from $295.7 million, or 49.2% of total deposits at December 31, 2012.

 

 

All of the $16.5 million of short-term FHLB advances outstanding at December 31, 2012 matured and were repaid with proceeds received from the bulk loan transaction as well as the sale of mortgage loans. These short-term borrowings were used to fund the mortgage loans held for sale portfolio at year-end.

 

Stockholders' equity increased to $75.0 million at September 30, 2013, from $74.7 million at December 31, 2012. This increase primarily reflects the $4.9 million of net income earned for the nine months ended September 30, 2013, net of a $4.5 million adjustment in accumulated other comprehensive income resulting from the mark-to-market of the available-for-sale securities portfolio. The tangible equity to assets ratio increased to 10.38% at September 30, 2013, from 9.95% at December 31, 2012. There were 9,751,271 common shares outstanding at September 30, 2013 and December 31, 2012, respectively. Tangible book value per common share increased to $7.26 at September 30, 2013, from $7.22 at December 31, 2012.

 

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 increased to 0.90% for the 2013 third quarter from 0.53% for the comparative 2012 third quarter. The Company’s ROE increased to 8.18% for the 2013 third quarter from 4.42% for the comparative 2012 third quarter. The efficiency ratio (noninterest expenses as a percentage of net interest income plus noninterest income) was 75.05% for the 2013 third quarter compared 64.78% for the 2012 third quarter. The efficiency ratio measures the proportion of net operating revenues that are absorbed by overhead expenses.

 

ROA increased to 0.94% for the nine months ended September 30, 2013 from 0.34% for the comparative nine months ended September 30, 2012. ROE increased to 8.47% for the nine months ended September 30, 2013 from 2.97% for the comparative nine months ended September 30, 2012. The efficiency ratio improved to 72.32% for the nine months ended September 30, 2013 from 74.85% for the comparative nine months ended September 30, 2012.

 

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 26 full service branch offices located throughout central and eastern North Carolina.

 

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”.

 

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. Certain amounts in the unaudited Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2012, and in prior quarterly and prior year to date Supplemental Financial Data, have been reclassified to conform with the presentation as of and for the periods ended September 30, 2013. The reclassifications had no effect on previously reported net income or stockholders’ equity.

 

(More)

 

(NASDAQ: FSBK)

  

 

First South Bancorp, Inc. and Subsidiary

Consolidated Statements of Financial Condition

       

		September 30,				December 31,
		2013				2012
Assets		(unaudited)				(*)
Cash and due from banks		$	11,016,750			$	8,983,819
Interest-earning deposits with banks			26,600,093				3,382,570
Investment securities available for sale, at fair value			148,830,605				164,838,012
Investment securities held to maturity			505,897				-
Loans held for sale:
Mortgage loans			9,183,416				20,287,343
Other loans			-				24,438,107
Total loans held for sale			9,183,416				44,725,450
Loans and leases held for investment			440,345,883				441,847,019
Allowance for loan and lease losses			(7,706,752	)			(7,860,195	)
Net loans and leases held for investment			432,639,131				433,986,824
Premises and equipment, net			11,759,163				12,233,153
Other real estate owned			8,995,915				12,892,519
Federal Home Loan Bank stock, at cost			848,800				1,859,200
Accrued interest receivable			2,281,440				2,408,979
Goodwill			4,218,576				4,218,576
Mortgage servicing rights			1,268,145				1,261,355
Identifiable intangible assets			15,720				39,300
Income tax receivable			2,717,968				10,785,272
Prepaid expenses and other assets			21,133,325				6,098,423
Total assets		$	682,014,944			$	707,713,452
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing demand		$	99,350,110			$	92,888,095
Interest bearing demand			173,131,783				181,774,772
Savings			60,576,116				30,570,259
Large denomination certificates of deposit			129,324,533				148,838,963
Other time			129,248,703				146,828,942
Total deposits			591,631,245				600,901,031
Borrowed money			-				16,500,000
Junior subordinated debentures			10,310,000				10,310,000
Other liabilities			5,045,866				5,349,368
Total liabilities			606,987,111				633,060,399
Common stock, $.01 par value, 25,000,000 shares authorized; 11,254,222 shares issued; 9,751,271 shares outstanding			97,513				97,513
Additional paid-in capital			35,800,258				35,811,804
Retained earnings, substantially restricted			70,400,856				65,532,960
Treasury stock, at cost			(31,967,269	)			(31,967,269	)
Accumulated other comprehensive income			696,475				5,178,045
Total stockholders' equity			75,027,833				74,653,053
Total liabilities and stockholders' equity		$	682,014,944			$	707,713,452

              

(*) Derived from audited consolidated financial statements            

 

 

First South Bancorp, Inc. and Subsidiary

Consolidated Statements of Operations

Three and Nine Months Ended September 30, 2013 and 2012

(unaudited)

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2013				2012				2013				2012
Interest income:
Interest and fees on loans		$	6,054,886			$	6,989,959			$	18,715,042			$	22,341,724
Interest on investments and deposits			1,165,258				1,436,437				3,834,305				4,040,553
Total interest income			7,220,144				8,426,396				22,549,347				26,382,277
Interest expense:
Interest on deposits			611,975				1,002,028				1,908,473				3,572,851
Interest on borrowings			-				2,456				7,058				4,495
Interest on junior subordinated notes			82,391				91,671				258,731				274,981
Total interest expense			694,366				1,096,155				2,174,262				3,852,327
Net interest income			6,525,778				7,330,241				20,375,085				22,529,950
Provision for credit losses			-				1,961,965				400,000				4,576,965
Net interest income after provision for credit losses			6,525,778				5,368,276				19,975,085				17,952,985
Non-interest income:
Deposit fees and service charges			1,063,243				1,071,144				3,158,690				3,157,644
Loan fees and charges			513,188				287,913				1,440,024				898,254
Loan servicing fees			226,434				191,775				627,993				607,352
Gain (loss) on sale of other real estate, net			68,233				(56,176	)			403,067				(132,197	)
Gain on sale of mortgage loans			285,511				858,483				1,189,688				1,427,357
Gain on sale of investment securities			267,564				27,979				548,074				1,546,883
Other  income			281,576				192,074				733,754				738,178
Total non-interest income			2,705,749				2,573,192				8,101,290				8,243,471
Non-interest expense:
Compensation and fringe benefits			3,838,796				3,851,587				11,530,092				12,927,593
Federal deposit insurance premiums			227,820				234,061				700,120				745,547
Premises and equipment			759,092				730,102				2,244,489				2,091,599
Advertising			84,228				23,217				166,290				156,782
Data processing			577,649				344,322				1,811,186				1,558,281
Amortization of intangible assets			119,253				115,388				357,573				340,887
Other real estate owned expense			287,527				315,660				1,004,711				2,901,057
Other			1,033,639				809,099				2,780,316				2,540,743
Total non-interest expense			6,928,004				6,423,436				20,594,777				23,262,489
Income before income tax expense			2,303,523				1,518,032				7,481,598				2,933,967
Income tax expense			766,694				552,067				2,613,702				1,025,355
NET INCOME		$	1,536,829			$	965,965			$	4,867,896			$	1,908,612
Per share data:
Basic earnings per share		$	0.16			$	0.10			$	0.50			$	0.20
Diluted earnings per share		$	0.16			$	0.10			$	0.50			$	0.20
Average basic shares outstanding			9,751,271				9,751,271				9,751,271				9,751,271
Average diluted shares outstanding			9,757,881				9,754,794				9,756,480				9,752,434

 

  

First South Bancorp, Inc.		Supplemental Financial Data (Unaudited)
		Quarter to Date																				Year to Date
		9/30/2013				6/30/2013				3/31/2013				12/31/2012				9/30/2012				9/30/2013				9/30/2012
		(dollars in thousands except per share data)
Consolidated balance sheet data:
Total assets		$	682,015			$	680,082			$	690,958			$	707,713			$	717,162			$	682,015			$	717,162
Loans held for sale:		$	9,183			$	13,746			$	3,292			$	44,725			$	700				9,183				700
Loans held for investment:
Mortgage		$	68,125			$	76,751			$	74,162			$	75,544			$	73,853			$	68,125			$	73,853
Commercial			296,218				283,936				288,715				292,146				341,432				296,218				341,432
Consumer			68,537				66,637				67,723				68,444				69,313				68,537				69,313
Leases			7,467				6,722				5,924				5,713				6,186				7,467				6,186
Total loans held for investment			440,347				434,046				436,524				441,847				490,784				440,347				490,784
Allowance for loan and lease losses			(7,707	)			(8,604	)			(8,567	)			(7,860	)			(15,007	)			(7,707	)			(15,007	)
Net loans held for investment		$	432,640			$	425,442			$	427,957			$	433,987			$	475,777			$	432,640			$	475,777
Cash & interest bearing deposits		$	37,617			$	23,148			$	35,384			$	12,366			$	17,511			$	37,617			$	17,511
Investment securities			149,337				162,336				176,320				164,838				172,715				149,337				172,715
Premises and equipment			11,759				11,879				12,003				12,233				12,428				11,759				12,428
Goodwill			4,219				4,219				4,219				4,219				4,219				4,219				4,219
Mortgage servicing rights			1,268				1,271				1,357				1,261				1,340				1,268				1,340
Deposits:
Savings		$	60,576			$	49,173			$	37,871			$	30,570			$	30,611			$	60,576			$	30,611
Checking			272,482				270,506				278,899				274,663				268,244				272,482				268,244
Certificates			258,573				270,149				282,846				295,668				310,646				258,573				310,646
Total deposits		$	591,631			$	589,828			$	599,616			$	600,901			$	609,501			$	591,631			$	609,501
Borrowings		$	0			$	0			$	0			$	16,500			$	1,974			$	0			$	1,974
Junior subordinated debentures			10,310				10,310				10,310				10,310				10,310				10,310				10,310
Stockholders' equity			75,028				73,888				75,468				74,653				88,122				75,028				88,122
Consolidated earnings summary:
Interest income		$	7,220			$	7,435			$	7,894			$	8,212			$	8,426			$	22,549			$	26,382
Interest expense			694				716				764				848				1,096				2,174				3,852
Net interest income			6,526				6,719				7,130				7,364				7,330				20,375				22,530
Provision for credit losses			0				0				400				18,675				1,962				400				4,577
Noninterest income			2,706				2,920				2,476				2,573				2,573				8,101				8,243
Noninterest expense			6,928				6,910				6,757				12,311				6,423				20,594				23,262
Income tax expense			767				964				883				(8,163	)			552				2,614				1,025
Net income		$	1,537			$	1,765			$	1,566			$	(12,886	)		$	966			$	4,868			$	1,909
Per Share Data:
Basic earnings per share		$	0.16			$	0.18			$	0.16			$	(1.32	)		$	0.10			$	0.50			$	0.20
Diluted earnings per share		$	0.16			$	0.18			$	0.16			$	(1.32	)		$	0.10			$	0.50			$	0.20
Book value per share		$	7.69			$	7.58			$	7.74			$	7.66			$	9.04			$	7.69			$	9.04
Average basic shares			9,751,271				9,751,271				9,751,271				9,751,271				9,751,271				9,751,271				9,751,271
Average diluted shares			9,757,881				9,757,338				9,751,972				9,751,271				9,754,794				9,756,480				9,752,434

 

  

 

 

 

First South Bancorp, Inc.		Supplemental Financial Data (Unaudited)
		Quarter to Date																				Year to Date
		9/30/2013				6/30/2013				3/31/2013				12/31/2012				9/30/2012				9/30/2013				9/30/2012
		(dollars in thousands except per share data)
Performance ratios:
Yield on average earning assets			4.60	%			4.69	%			4.84	%			4.96	%			5.02	%			4.74	%			5.18	%
Cost of interest bearing liabilities			0.55	%			0.56	%			0.59	%			0.64	%			0.81	%			0.56	%			0.94	%
Net interest spread			4.05	%			4.13	%			4.25	%			4.32	%			4.21	%			4.18	%			4.24	%
Net interest margin			4.16	%			4.24	%			4.37	%			4.44	%			4.36	%			4.28	%			4.41	%
Avg earning assets to total avg assets			91.66	%			92.40	%			92.19	%			91.50	%			91.24	%			92.08	%			91.24	%
Tax Equivalent Ratios:
Yield on average earning assets			4.69	%			4.75	%			4.89	%			5.01	%			5.06	%			4.84	%			5.19	%
Net interest spread			4.14	%			4.19	%			4.30	%			4.37	%			4.25	%			4.28	%			4.25	%
Net interest margin			4.25	%			4.30	%			4.41	%			4.49	%			4.40	%			4.38	%			4.43	%
Return on average assets (annualized)			0.90	%			1.03	%			0.91	%			(7.22	%)			0.53	%			0.94	%			0.34	%
Return on average equity (annualized)			8.18	%			9.22	%			8.02	%			(60.76	%)			4.42	%			8.47	%			2.97	%
Efficiency ratio			75.05	%			71.69	%			70.34	%			123.81	%			64.78	%			72.32	%			74.85	%
Average assets		$	680,741			$	688,897			$	701,880			$	714,377			$	730,204			$	690,428			$	737,684
Average earning assets		$	623,953			$	636,511			$	647,061			$	652,106			$	664,609			$	635,757			$	671,795
Average equity		$	74,569			$	76,754			$	79,178			$	84,830			$	87,437			$	76,817			$	85,763
Equity/Assets			11.00	%			10.86	%			10.92	%			10.55	%			12.29	%			11.00	%			12.29	%
Tangible Equity/Assets			10.38	%			10.24	%			10.31	%			9.95	%			11.69	%			10.38	%			11.69	%
Asset quality data and ratios:
Loans on nonaccrual status:
Nonaccrual loans
Earning		$	1,459			$	1,429			$	1,658			$	2,972			$	1,984			$	1,459			$	1,984
Non-Earning			2,649				4,130				2,629				6,686				12,319				2,649				12,319
Total Non-Accrual Loans		$	4,108			$	5,559			$	4,287			$	9,658			$	14,303			$	4,108			$	14,303
Nonaccrual restructured loans
Past Due TDRs		$	1,336			$	990			$	221			$	4,231			$	7,649			$	1,336			$	7,649
Current TDRs			1,677				818				832				7,451				12,849				1,677				12,849
Total TDRs		$	3,013			$	1,808			$	1,053			$	11,682			$	20,498			$	3,013			$	20,498
Total loans on nonaccrual status		$	7,121			$	7,367			$	5,340			$	21,340			$	34,801			$	7,121			$	34,801
Loans >90 days past due, still accruing			544				762				237				676				1,837				544				1,837
Other real estate owned			8,996				9,069				11,328				12,893				18,003				8,996				18,003
Total nonperforming assets		$	16,661			$	17,198			$	16,905			$	34,909			$	54,641			$	16,661			$	54,641
Allowance for loan and lease losses		$	7,707			$	8,604			$	8,567			$	7,860			$	15,007			$	7,707			$	15,007
Allowance for loan and lease losses to loans held for investment			1.75	%			1.98	%			1.96	%			1.77	%			3.06	%			1.75	%			3.06	%
Net charge-offs (recoveries)		$	898			$	(37	)		$	(308	)		$	25,822			$	959			$	553			$	4,764
Net charge-offs (recoveries) to total loans			0.20	%			(0.01	%)			(0.07	%)			5.39	%			0.20	%			0.13	%			1.00	%
Nonaccrual loans to total loans			1.58	%			1.65	%			1.24	%			4.46	%			7.30	%			1.58	%			7.30	%
Nonperforming assets to assets			2.44	%			2.53	%			2.41	%			4.84	%			7.36	%			2.44	%			7.36	%
Total loans to deposits			75.98	%			75.92	%			73.35	%			81.15	%			80.80	%			75.98	%			80.80	%
Total loans to assets			65.91	%			65.84	%			63.65	%			68.90	%			68.67	%			65.91	%			68.67	%
Loans serviced for others		$	325,833			$	319,124			$	330,280			$	313,823			$	328,976			$	325,833			$	328,976