EXHIBIT 99.1 – Shareholder Communications Letter

(First South Bancorp, Inc. Letterhead)

September 2, 2016

Dear Shareholder,

On behalf of the Board of Directors, I am excited to provide this report showing the continued financial progress of our Company, and to update you on the execution of our strategic vision of becoming the community bank of choice in the markets we serve. It is the Board’s goal to provide more frequent communication with you in the future and this letter will serve to initiate this process.

Earnings Momentum Remains Quite Strong

With respect to financial performance for 2016 year-to-date and second quarter, your Company reported the following highlights in our July 21st press release:

Profitability measures of ROAA and ROAE for First South Bank have been steadily improving and are now in line or exceed the median ratios for North Carolina banks and savings institutions¹. Given our strong earnings momentum and the strategy we are implementing, we expect our profitability metrics to improve as we continue to grow and realize further operating efficiency.

Transformative Strategic Plan

I am reminded that it was just four years ago, in September 2012, that your Board of Directors and management team began implementing several strategic initiatives to strengthen core areas of the Bank and better position our Company for profitable growth. Such initiatives included:

¹ Source: SNL Financial data showing annualized ROAA and ROAE ratios for 57 NC financial institutions as of June 30, 2016.

Challenging Times Require Thoughtful Decisions

The Great Recession was the ultimate stress test, and we passed. Not only that, we emerged a much better bank. One of the more difficult (but appropriate) decisions your Board of Directors made in 2012 was to sell $46 million of problem loan assets. That sale resulted in a significant financial loss, but alleviated the Company of problems which could have been a drag on earnings for years and put us on a much faster path to recovery. With asset quality issues behind us, we were able to focus once again on growing our Company. From the December 31, 2013 low point of $675 million, total assets of First South Bancorp have grown $286 million to $961 million at quarter end June 30, 2016. The increase was attributable to organic growth and the December 2014 acquisition of branch offices from Bank of America.

Expanding, Investing, and Executing

Through the acquisition of the Bank of America branches, we gained a significant amount of low cost deposits, more than doubled our customer base, and inherited the on-going expenses of operating nine additional offices. The successful execution of the branch strategy would take time. Your Board of Directors was willing to accept the risks associated with executing this strategy in return for enhancing the franchise value by acquiring customers in seven new markets and the prospect of future earnings growth as our Company put those low cost deposits to work in the loan portfolio. In using those new deposits to generate a greater volume of loans, we made additional investments in Raleigh, Durham, Wilmington and Williamston, North Carolina.

As of quarter-end June 30, 2016, we are now 18 months out from the branch transaction. On a core pre-tax, pre-loan loss provision, operating basis, the Company earned $2.5 million for the three-months ended June 30, 2016 compared with $2.4 million for the quarter ended immediately before the branch transaction (September 30, 2014 quarter end). On a core pre-tax, pre-provision, operating earnings per share basis, we earned $0.27 for the most recent quarter compared to $0.25 per share in the quarter ended September 30, 2014.

Our Company’s financial performance is a primary focus of your Board of Directors, management and all employees of First South Bancorp. Our Company was recently recognized by SNL Financial as having one of the fastest rates of year-over-year quarterly operating revenue growth for community banks with total assets less than $1 billion². Now that the deposits acquired have been deployed into the loan portfolio, our future earnings growth should escalate as we continue to grow earning assets, enhance our non-interest related business lines, and improve operating efficiencies.

Building Long-Term Shareholder Value is Our Ultimate Goal

The Board recently engaged a nationally recognized, independent investment banking group to perform a strategic valuation review of First South Bancorp. This process gave the management team and the Board a better understanding of the Company’s current value, potential acquisition value and ideas around which strategies can be further developed to continue to drive long-term shareholder value. We will continue to look at our strategic plan, our dividend policy and our shareholder communications as ways to enhance our long-term value.

² Source: SNL Financial Data Dispatch from April 29, 2016, 7:01 am ET and July 27, 2016 6:37 pm ET

In closing, the Board of Directors and management believe that following our Company’s strategic plan keeps us on a path toward creating a high performing community bank. The actions executed by the Board of Directors, the management team and the employees of First South Bank and First South Bancorp over the past four years are fully aligned with the shareholders’ desire for earnings growth and value creation, and we are realizing the results. Earnings should continue to grow as we increase the level of interest-earning assets, improve the current mix of loans and investments, grow new and existing customer relationships, more efficiently utilize our internal resources and seek new sources of revenues. By making sound decisions that are aimed at becoming a high performing independent community bank our Company’s value will continue to be enhanced.

Thank you for your support of First South Bancorp and we welcome your comments and questions.

Sincerely,

Bruce W. Elder, President & CEO

(252) 940-4936

bruce.elder@firstsouthnc.com

Forward-Looking Statements. Statements contained in this letter, 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 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.

First South Bancorp, Inc. and Subsidiary

Consolidated Statements of Financial Condition

First South Bancorp, Inc. and Subsidiary

Consolidated Statements of Operations

Three and Six Months Ended June 30, 2016 and 2015

(Unaudited)