Published: November 02, 2010
BNC Bancorp Reports Third Quarter 2010 Earnings
THOMASVILLE, N.C., Nov. 2, 2010 /PRNewswire-FirstCall/ -- BNC Bancorp (Nasdaq: BNCN) ("BNC"), parent company for Bank of North Carolina ("Bank"), reported net income available to common shareholders for the third quarter ended September 30, 2010 was $69,000, or $0.01 per diluted share, compared to $1.5 million, or $0.20 per diluted share, for the same 2009 quarter and $11.2 million, or $1.45 per diluted share, for the second quarter of 2010.
For the nine months ended September 30, 2010, income available to common shareholders was $12.2 million, or $1.39 per diluted share, compared to $3.3 million, or $0.44 per diluted share, for the same period in 2009. The year-to-date results include the impact of the acquisition gains reported during the second quarter of 2010 that resulted from the acquisition of Beach First National Bank ("Beach First"). In connection with the Beach First acquisition, the Company entered into loss sharing agreements with the FDIC where, pursuant to the terms of these agreements, the FDIC will reimburse the Company for 80% of losses incurred from the acquired loans and foreclosed real estate ("covered loans" and "covered assets"), and begins with the first dollar of loss incurred.
Total assets at September 30, 2010 were $2.18 billion, up $18.1 million, or 0.8%, from June 30, 2010. Compared to September 30, 2009, total assets increased $475.4 million, or 27.9%. The increase was primarily due to the FDIC-assisted acquisition of Beach First in April 2010 and, to a lesser extent, overall growth in loans and liquid assets. During the quarter, the Company's level of core deposits increased by $137 million, non-covered loans increased by $22 million, and legacy Bank nonperforming assets remained stable at around 2.00%, well below national, regional, and state peers.
Commenting on the quarter, W. Swope Montgomery, Jr., President and CEO of BNC Bancorp, stated, "We have made tremendous strides in restructuring our balance sheet over the past year by increasing our level of core deposits, enhancing our retail customer base with our acquisition of Beach First, reducing the construction and development portion of our loan portfolio, and elevating our capital levels. We continue to work to further strengthen our balance sheet, employ sound fundamentals in our evaluation of the many growth opportunities we are exploring, and invest in our employees and the customer experience which is the heartbeat of our organization."
Mr. Montgomery continued, "Due to our healthy balance sheet and access to capital markets, as evidenced by our $35 million equity raise in the second quarter, we are still actively pursuing growth opportunities in all of our markets. While the Beach First acquisition in South Carolina was a whole-bank FDIC assisted transaction, we have had success in our North Carolina footprint attracting seasoned teams to lead organic entries into attractive markets such as Concord, Raleigh, and most recently, Charlotte. We have been very pleased with the demand and quality of credits we are seeing in each of these markets. Due to the team's strength, the loyalty of their customer base and the way our support teams have embraced these new opportunities, these new markets have accounted for $60 million in new loans and $92 million in new core deposits over the past nine months."
"The prolonged economic downturn has produced an excess supply of investment real estate assets, which, coupled with a general lack of credit availability, has led to a scarcity of buyers for foreclosed properties. In recognition of this reality, management has chosen to capitalize on the Company's earnings power to aggressively write down certain assets to levels that could allow for a more expeditious liquidation, thus preparing our Company to be even better positioned when we exit this credit cycle," noted Montgomery.
As part of the strategy outlined above, BNC incurred additional write-downs of $1.7 million on foreclosed properties during the quarter. BNC sold $2.7 million in foreclosed properties at a loss of less than $50,000, and currently have another $4.7 million under contract.
Additional Operating Highlights from Third Quarter
Since September 2009, total loans increased by $429.4 million, or 40.9%, to $1.48 billion; excluding the second quarter 2010 acquisition of Beach First, loans grew $98.6 million, or 9.4% over the past year. At September 30, 2010, the Company's loan portfolio includes $330.8 million in covered loans being carried at fair value and $1.15 billion in loans that have a related allowance for loan losses and are not covered under loss share agreements. Compared to year-end 2009 levels, consolidated loans have increased $397.1 million, or 36.7%, while non-covered loans have increased $66.4 million, or 6.1%.
Gross Loan Growth
(dollars in thousands; unaudited)
9/30/2010 6/30/2010 3/31/2010 12/31/2009 9/30/2009
--------- --------- --------- ---------- ---------
Loans
covered
by loss
share $330,761 $345,372 $- $- $-
Loans not
covered
by loss
share 1,148,288 1,125,993 1,089,857 1,081,945 1,049,691
--------- --------- --------- --------- ---------
Total $1,479,049 $1,471,365 $1,089,857 $1,081,945 $1,049,691
========== ========== ========== ========== ==========
Growth
(Quarter/
Quarter) 0.5% 35.0% 0.7% 3.1% 3.3%
Total deposits at September 30, 2010 were $1.86 billion, an increase of $423.4 million, or 29.6%, from September 30, 2009. The increase in period-end deposits was due primarily to the acquisition of Beach First, which had $358 million of local deposits and approximately $142 million of out-of-area CD's. All except for $3.5 million of the out-of-area CD's had been redeemed and paid out as of September 30, 2010. Compared to year-end 2009 levels, total deposits have increased $505.7 million, or 37.5%.
While overall deposit growth continues to be an emphasis, the more important element is the shift in the mix of deposits to higher levels of core deposits and away from wholesale CDs. Over the one-year period core deposits increased by over $701.7 million, while wholesale CD's declined by over $278.3 million. As a percentage of total deposits, wholesale CD's currently comprise only 16.6% of total deposits, down significantly from 41.0% and 23.1% at September 30, 2009 and June 30, 2010, respectively.
Montgomery noted, "Our management team is committed to building a Company that has long-term value for our shareholders, and in the changing regulatory and economic landscape, core deposit growth will be an even more critical element in fueling successful and profitable growth initiatives. Over the past eighteen months we have built a retail banking team that oversees product development, sales, training, accountability, and consistency and quality of delivery in each of our 23 offices in three banking regions. We have developed a business services unit that works in partnership with our commercial bankers to provide and support all forms of deposit services for our business relationships, including cash management, lock-box, remote disbursement, and merchant services. We have recruited and developed a private banking group that is working closely with our retail, business services and wealth management area to provide a concierge-type service level for those higher need relationships."
"Each of these areas has a solid foundation of seasoned leadership and specialized banking expertise, and through their efforts and a bankwide commitment to growing core relationships we have transformed our deposit mix and deposit growth capabilities into a driver of current and future franchise value. This success has been accomplished by building a team and a culture that is dedicated to delivering a "wow" experience to each and every customer," said Montgomery.
Total Deposit Growth
(dollars in thousands; unaudited)
9/30/2010 6/30/2010 3/31/2010 12/31/2009 9/30/2009
--------- --------- --------- ---------- ---------
Non-
interest
bearing
demand $105,197 $104,328 $64,983 $66,801 $60,691
Interest-
bearing
demand 786,498 739,542 599,013 578,329 568,527
Time
deposits
-local 655,030 566,179 314,173 271,065 215,844
Time
deposits
-
wholesale 308,855 424,576 373,062 433,683 587,107
------- ------- ------- ------- -------
Total $1,855,580 $1,834,625 $1,351,231 $1,349,878 $1,432,169
========== ========== ========== ========== ==========
Growth
(Quarter/
Quarter) 1.1% 35.8% 0.1% -5.8% 6.7%
Operating Results
Net interest income for the third quarter of 2010 was $16.8 million, an increase of $4.7 million, or 38.3%, from the comparable period last year. Taxable-equivalent net interest margin increased 29 basis points from the third quarter of 2009 to 3.76%. Compared to the second quarter of 2010, taxable-equivalent net interest margin increased 14 basis points from 3.62%. During the third quarter of 2010, the Company continued its excess liquidity position, having average interest-earning bank balances increasing to $121.9 million, an increase of over 37% from the prior quarter.
The Company's average yield on interest-earning assets increased five basis points while the average rate on interest-bearing liabilities decreased 35 basis points from the third quarter of 2009. During the third quarter of 2010, the Company's average earning assets increased by $390.0 million to $1.92 billion, a 25.5% increase over the third quarter of 2009, primarily from the Beach First acquisition during the second quarter of 2010. Compared to the second quarter of 2010, the Company's average earning assets increased by $48.2 million, or 2.6%.
Quarterly Average Yields / Costs (Tax-Equiv. Basis)
9/30/2010 6/30/2010 3/31/2010 12/31/2009 9/30/2009
--------- --------- --------- ---------- ---------
Earning asset
yield 5.57% 5.59% 5.56% 5.53% 5.52%
Cost of
interest
bearing
liabilities 1.83% 1.99% 2.17% 2.11% 2.18%
Net interest
spread 3.74% 3.60% 3.38% 3.42% 3.34%
Net interest
margin 3.76% 3.62% 3.47% 3.52% 3.47%
Non-interest income was $3.9 million for the third quarter of 2010 compared to $3.3 million for the year-ago quarter. Included in non-interest income for the third quarter of 2010 was $63,000 of loss on sales of investment securities and $2.0 million of income associated with adjustments to the FDIC receivable for payments received and related loss share receipts. During the third quarter of 2009, included in non-interest income was $2.1 million of gains on sales of investment securities. Excluding investment securities transactions and income relating to FDIC transactions, non-interest income was $1.9 million for the current quarter, up 52.1% from the $1.3 million reported for the 2009 third quarter. The increase was primarily due to the addition of non-interest income from the prior quarter's acquisition, which included $384,000 of merchant fee and debit card income, a significant ongoing source of revenue in the retail-oriented coastal economy. In comparison to the previous quarter, recurring non-interest income increased $104,000.
Non-interest expenses for the third quarter increased $7.1 million, or 83.9%, compared to the same quarter a year-ago, and were $1.9 million, or 13.8%, higher than the second quarter of 2010. As a result of the acquisition and continued growth of the legacy Bank, personnel costs have increased $2.3 million, or 49.2%, compared to the same quarter a year-ago, and were $612,000, or 9.7%, higher than the previous quarter. The second quarter personnel costs did not include a full complement of salary expense for the Beach First employees since the transaction occurred in mid-April and certain costs were absorbed by the FDIC. In addition, during the third quarter, the Company incurred $373,000 of merger-related expenses from the Beach First acquisition. Loan, foreclosure and collection expenses have increased $2.9 million compared to the same quarter a year-ago, and were $2.1 million higher than the previous quarter. The higher level of loan, foreclosure and collection expense primarily relates to the writing down of other real estate owned properties by $1.7 million, and, to a lesser extent, the on-going expenses relating to these properties. Much of the collection costs associated with covered assets in South Carolina will be reimbursed by the FDIC at a later date. To-date, we have approximately $1.2 million in covered expenses that, as necessary steps are completed, will be submitted for an 80% reimbursement. Insurance, professional and other services decreased by $718,000 from the previous quarter as these represented professional costs associated with the second quarter acquisition.
Asset Quality
Net charge-offs for 2010's third quarter were $5.7 million, or 1.56% of average loans annualized, up from the $4.4 million, or 1.23% reported for the second quarter of 2010. Nonperforming assets not covered by loss share at September 30, 2010 were 1.99% of total assets, and were 5.66% including covered assets, compared to 1.83% and 5.14%, respectively, at June 30, 2010. The covered assets are covered by a FDIC loss-share agreement that provides 80% protection on those assets and have been written down to estimated fair value as of acquisition date.
Asset Quality Information
(dollars in thousands; unaudited)
9/30/2010 6/30/2010 3/31/2010
--------- --------- ---------
Nonaccrual loans not covered by
loss share $10,603 $10,080 $12,542
Nonaccrual loans covered by loss
share 77,150 70,641 -
OREO not covered by loss share 26,050 21,728 20,326
OREO covered by loss share 9,638 7,350 -
90 days past due 23 1,361 -
--- ----- ---
Total nonperforming assets $123,464 $111,160 $32,868
======== ======== =======
Nonperforming assets not covered
by loss share $36,676 $33,169 $32,868
======= ======= =======
Total assets $2,180,049 $2,161,991 $1,628,570
Total assets less covered assets 1,839,650 1,809,269 1,628,570
Total loans 1,479,049 1,471,365 1,089,857
Total loans less covered loans 1,148,288 1,125,993 1,089,857
Ratio of nonperforming assets to
total assets 5.66% 5.14% 2.02%
Not covered by loss share 1.99% 1.83% 2.02%
Ratio of nonperforming loans to
total loans 5.93% 5.58% 1.15%
Not covered by loss share 0.92% 0.90% 1.15%
Ratio of allowance for loan
losses to total loans 1.27% 1.29% 1.60%
Not covered by loss share 1.64% 1.69% 1.60%
Net charge-offs of noncovered
loans, QTD $5,722 $4,357 $2,860
Ratio of net charge-offs to
average loans (Ann) 1.56% 1.23% 1.07%
Loans restructured/modified not
included in above $8,687 $5,774 $5,322
12/31/2009 9/30/2009
---------- ---------
Nonaccrual loans not covered by
loss share $18,702 $11,705
Nonaccrual loans covered by loss
share - -
OREO not covered by loss share 14,325 12,732
OREO covered by loss share - -
90 days past due - -
--- ---
Total nonperforming assets $33,027 $24,437
======= =======
Nonperforming assets not covered
by loss share $33,027 $24,437
======= =======
Total assets $1,634,185 $1,704,645
Total assets less covered assets 1,634,185 1,704,645
Total loans 1,081,945 1,049,691
Total loans less covered loans 1,081,945 1,049,691
Ratio of nonperforming assets to
total assets 2.02% 1.43%
Not covered by loss share 2.02% 1.43%
Ratio of nonperforming loans to
total loans 1.73% 1.12%
Not covered by loss share 1.73% 1.12%
Ratio of allowance for loan
losses to total loans 1.60% 1.59%
Not covered by loss share 1.60% 1.59%
Net charge-offs of noncovered
loans, QTD $4,127 $3,381
Ratio of net charge-offs to
average loans (Ann) 1.55% 1.27%
Loans restructured/modified not
included in above $5,014 $4,780
During the third quarter 2010, BNC recorded a provision for loan losses of $5.4 million, a decrease from the $6.0 million recorded during the second quarter of 2010. The allowance for loan losses was $18.8 million at September 30, 2010, and $19.0 million at June 30, 2010. Loan loss reserves to total period-end loans decreased from 1.59% and 1.29% reported at September 30, 2009 and June 30, 2010, respectively, to 1.27% at September 30, 2010. Since the assets acquired in the FDIC-assisted transaction were marked to fair value, including estimated loan impairment, no loan loss reserves are needed on these loans at this time. Excluding the acquired loans, loan loss reserves to period-end loans decreased from 1.69% of loans at June 30, 2010 to 1.64% at September 30, 2010. Management considers the loan loss reserve adequate to absorb credit losses inherent in the loan portfolio at September 30, 2010.
Also during the quarter BNC took charges totaling $1.7 million on assets held as OREO. All of these assets were in OREO and all had previously been written down to appraised value or less as of June 30, 2010. OREO not covered under a loss share agreement totaled $26.0 million at September 30, 2010, an increase of $4.3 million from June 30, 2010. The change primarily consisted of $8.0 million in additions at fair value, $1.7 million in write-downs, and $2.7 million in sales.
Commenting on asset quality, Montgomery noted, "We are pleased that our historical underwriting standards have produced NPA levels on non-covered assets that have remained relatively stable over the past four quarters at around 2.0%, well below our national, regional, and state peers. Nevertheless, we continue to be committed to aggressive efforts to reduce nonperforming loan balances, and are fortunate to have the earnings power to position our balance sheet for the future while not negatively impacting capital."
Capital Position
The Company continues to maintain strong capital ratios. Shareholders' equity was $165.5 million at September 30, 2010, up $40.4 million, or 32.4%, from September 30, 2009. Tangible common book value per share was $9.97 at September 30, 2010, an increase from $9.27 at September 30, 2009 and $9.82 at June 30, 2010. All of the Bank's and Company's capital ratios exceeded the minimum thresholds established for a well-capitalized bank by regulatory measures.
On October 18, 2010, the Board of Directors of BNC declared a $0.05 per share quarterly cash dividend on its common stock and Series B Preferred stock, payable November 26, 2010 to shareholders of record on November 12, 2010.
About BNC Bancorp and Bank of North Carolina
Headquartered in High Point, NC, BNC Bancorp is the parent company of Bank of North Carolina, a commercial bank with $2.18 billion in assets. Bank of North Carolina provides a complete line of banking and financial services to individuals and businesses through its 23 full-service banking offices in North and South Carolina. The Bank's six locations in coastal areas of South Carolina were added through BNC's recent FDIC-assisted acquisition of Beach First National Bank ("Beach First"); Bank of North Carolina now operates in South Carolina as BNC Bank. Bank of North Carolina is insured by the FDIC and is an equal housing lender. BNC Bancorp is current on its preferred dividend payments to the United States Treasury; its stock is quoted in the NASDAQ Capital Market under the symbol "BNCN."
Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States. BNC Bancorp's management uses these "non-GAAP" measures such as "core" or "recurring" earnings in their analysis of the Company's performance. Management believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods as well as demonstrating the effects of significant gains and charges in the current period. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:
Congress passed the Private Securities Litigation Act of 1995 in an effort to encourage corporations to provide information about companies' anticipated future financial performance. This act provides a safe harbor for such disclosure, which protects the companies from unwarranted litigation if actual results are different from management expectations. This press release contains forward-looking statements relating to the financial condition, results of operations and business of BNC and the Bank. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of BNC, and the information available to management at the time that this press release was prepared. Factors that could cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following: (i) general economic or business conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit or other services; (ii) costs or difficulties related to the integration of Beach First may be greater than expected; (iii) expected cost savings and other benefits anticipated in connection with our acquisition of Beach First may not be fully realized or realized within the expected time frame; and (iv) anticipated acquisition opportunities may be available on terms acceptable to BNC or at all. Additional factors affecting BNC and the Bank are discussed in BNC's filings with the Securities and Exchange Commission (the "SEC"), Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. Please refer to the Securities and Exchange Commission's website at www.sec.gov where you can review those documents. BNC does not undertake a duty to update any forward-looking statements made in this press release.
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except share and per share data)
(Unaudited) For the
Three Months Ended
------------------
September September
30, 2010 30, 2009
---------- ----------
SUMMARY STATEMENTS OF OPERATIONS
Interest income $25,580 $20,107 27.2 %
Interest expense 8,734 7,927 10.2
Net interest income 16,846 12,180 38.3
Provision for loan losses 5,436 5,000 8.7
Net interest income after
provision for loan losses 11,410 7,180 58.9
Non-interest income 3,906 3,328 17.4
Non-interest expense 15,479 8,417 83.9
Income before income tax expense (163) 2,091 (107.8)
Income tax expense (benefit) (823) 138 (696.4)
Net income 660 1,953 (66.2)
Preferred stock dividends and
discount accretion 591 499 18.4
Net income available to common
shareholders 69 1,454 (95.3)
PER SHARE DATA
Earnings per share, basic $0.01 $0.20 -95.0 %
Earnings per share, diluted 0.01 0.20 (95.0)
Tangible common book value per
share 9.97 9.27 7.5
Weighted average participating
common shares:
Basic 10,845,132 7,340,128
Diluted 10,972,466 7,351,956
PERFORMANCE RATIOS
Return on average assets 0.12% 0.47%
Return on average common equity 0.23% 5.94%
Return on average tangible common
equity 0.30% 8.33%
Net yield on earning assets
(taxable equivalent) 3.76% 3.47%
Average equity to average assets 7.63% 7.70%
Allowance for loan losses as a %
of total loans 1.27% 1.59%
Nonperforming assets to total
assets, end of period 5.66% 1.43%
Nonperforming assets not covered
by loss share 1.99% 1.43%
Ratio of net charge-offs to
average loans, annualized 1.56% 1.28%
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except share and per share data)
(Unaudited) For the
Nine Months Ended
-----------------
September September
30, 2010 30, 2009 % Change
---------- ---------- --------
SUMMARY STATEMENTS OF
OPERATIONS
Interest income $69,681 $59,496 17.1 %
Interest expense 25,696 25,317 1.5
Net interest income 43,985 34,179 28.7
Provision for loan losses 14,382 11,000 30.8
Net interest income after
provision for loan losses 29,603 23,179 27.7
Non-interest income 26,966 5,756 368.5
Non-interest expense 37,970 24,297 56.3
Income before income tax
expense 18,599 4,638 301.0
Income tax expense (benefit) 4,817 (112) (4,400.9)
Net income 13,782 4,750 190.2
Preferred stock dividends and
discount accretion 1,596 1,486 7.4
Net income available to common
shareholders 12,186 3,264 273.4
PER SHARE DATA
Earnings per share, basic $1.41 $0.44 220.5 %
Earnings per share, diluted 1.39 0.44 215.9
Tangible common book value per
share 9.97 9.27 7.5
Weighted average participating
common shares:
Basic 8,727,751 7,339,337
Diluted 8,801,809 7,347,066
PERFORMANCE RATIOS
Return on average assets 0.93% 0.39%
Return on average common
equity 14.91% 4.61%
Return on average tangible
common equity 20.12% 6.54%
Net yield on earning assets
(taxable equivalent) 3.63% 3.35%
Average equity to average
assets 7.34% 7.64%
Allowance for loan losses as a
% of total loans 1.27% 1.59%
Nonperforming assets to total
assets, end of period 5.66% 1.43%
Nonperforming assets not
covered by loss share 1.99% 1.43%
Ratio of net charge-offs to
average loans, annualized 1.31% 0.99%
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except share and per share data)
(Unaudited) For the
Three Months Ended
------------------
September June 30, March 31, December 31,
30, 2010 2010 2010 2009
---------- --------- ---------- -------------
SUMMARY
STATEMENTS OF
OPERATIONS
Interest income $25,580 $24,829 $19,272 $19,586
Interest expense 8,734 9,234 7,728 7,550
Net interest
income 16,846 15,595 11,544 12,036
Provision for
loan losses 5,436 6,000 2,946 4,750
Net interest
income after
provision for
loan losses 11,410 9,595 8,598 7,286
Non-interest
income 3,906 21,698 1,362 2,930
Non-interest
expense 15,479 13,604 8,887 8,602
Income before
income tax
expense (163) 17,689 1,073 1,614
Income tax
expense
(benefit) (823) 5,956 (316) (173)
Net income 660 11,733 1,389 1,787
Preferred stock
dividends and
discount
accretion 591 502 503 498
Net income
available to
common
shareholders 69 11,231 886 1,289
Net interest
income, as
reported $16,846 $15,595 $11,544 $12,036
Tax-equivalent
adjustment 1,373 1,290 1,264 1,218
Net interest
income, tax-
equivalent 18,219 16,885 12,808 13,254
PER SHARE DATA
Earnings per
share, basic $0.01 $1.47 $0.12 $0.18
Earnings per
share, diluted 0.01 1.45 0.12 0.18
Weighted average
participating
common shares:
Basic 10,845,132 7,640,439 7,341,901 7,341,249
Diluted 10,972,466 7,726,109 7,363,065 7,350,425
PERFORMANCE
RATIOS
Return on
average assets 0.12% 2.22% 0.34% 0.44%
Return on
average common
equity 0.23% 40.96% 3.69% 5.41%
Return on
average
tangible common
equity 0.30% 55.35% 5.15% 7.65%
Net yield on
earning assets
(taxable
equivalent) 3.76% 3.62% 3.47% 3.52%
Average equity
to average
assets 7.63% 6.75% 7.70% 7.65%
Nonperforming
assets to total
assets, end of
period 5.66% 5.14% 2.02% 2.02%
Nonperforming
assets not
covered by loss
share 1.99% 1.83% 2.02% 2.02%
Ratio of net
charge-offs to
average loans,
annualized 1.56% 1.23% 1.07% 1.55%
(Unaudited) For the
Three Months Ended
------------------
September December 31,
30, 2009 2008
---------- -------------
SUMMARY STATEMENTS OF
OPERATIONS
Interest income $20,107 $18,041
Interest expense 7,927 9,340
Net interest income 12,180 8,701
Provision for loan losses 5,000 2,700
Net interest income after
provision for loan losses 7,180 6,001
Non-interest income 3,328 1,323
Non-interest expense 8,417 6,946
Income before income tax
expense 2,091 378
Income tax expense (benefit) 138 (247)
Net income 1,953 625
Preferred stock dividends and
discount accretion 499 142
Net income available to common
shareholders 1,454 483
Net interest income, as
reported $12,180 $8,701
Tax-equivalent adjustment 1,200 548
Net interest income, tax-
equivalent 13,380 9,249
PER SHARE DATA
Earnings per share, basic $0.20 $0.07
Earnings per share, diluted 0.20 0.07
Weighted average participating
common shares:
Basic 7,340,128 7,354,164
Diluted 7,351,956 7,367,906
PERFORMANCE RATIOS
Return on average assets 0.47% 0.19%
Return on average common equity 5.94% 4.99%
Return on average tangible
common equity 8.33% 7.84%
Net yield on earning assets
(taxable equivalent) 3.47% 3.02%
Average equity to average
assets 7.70% 6.43%
Nonperforming assets to total
assets, end of period 1.43% 1.17%
Nonperforming assets not
covered by loss share 1.43% 1.17%
Ratio of net charge-offs to
average loans, annualized 1.27% 1.31%
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands)
(Unaudited) As of
-----
September September
30, 2010 30, 2009 % Change
---------- ---------- --------
SELECTED BALANCE SHEET DATA
End of period balances
Loans $1,475,735 $1,047,826 40.8 %
Loans held for sale 3,314 1,865 77.7
Allowance for loan losses 18,819 16,686 12.8
Loans, net of allowance for loan
losses 1,456,916 1,031,140 41.3
Investment securities 358,180 412,139 (13.1)
Total Assets 2,180,049 1,704,645 27.9
Deposits:
Noninterest-bearing deposits 105,197 60,691 73.3
Interest-bearing demand and
savings 786,498 568,527 38.3
CD's and other time deposits 963,885 802,951 20.0
Total deposits 1,855,580 1,432,169 29.6
Borrowed Funds 145,719 139,554 4.4
Total interest-bearing
liabilities 1,896,102 1,511,032 25.5
Shareholders' Equity 165,479 125,031 32.4
As of
-----
September June 30, March 31,
30, 2010 2010 2010
---------- --------- ----------
SELECTED BALANCE SHEET DATA
End of period balances
Loans $1,475,735 $1,469,175 $1,088,620
Loans held for sale 3,314 2,190 1,237
Allowance for loan losses 18,819 19,021 17,395
Loans, net of allowance for loan
losses 1,456,916 1,450,137 1,071,225
Investment securities 358,180 364,805 359,937
Total Assets 2,180,049 2,161,991 1,628,570
Deposits:
Noninterest-bearing deposits 105,197 104,328 64,983
Interest-bearing demand and
savings 786,498 739,542 599,013
CD's and other time deposits 963,885 990,755 687,235
Total Deposits 1,855,580 1,834,625 1,351,231
Borrowed Funds 145,719 148,898 145,919
Total interest-bearing
liabilities 1,896,102 1,879,195 1,432,167
Shareholders' Equity 165,479 164,138 123,811
As of
-----
December 31, September December 31,
2009 30, 2009 2008
------------- ---------- -------------
SELECTED BALANCE SHEET
DATA
End of period balances
Loans $1,079,179 $1,047,826 $1,007,788
Loans held for sale 2,766 1,865 560
Allowance for loan losses 17,309 16,686 13,210
Loans, net of allowance
for loan losses 1,061,870 1,031,140 994,578
Investment securities 366,506 412,139 422,564
Total Assets 1,634,185 1,704,645 1,572,876
Deposits:
Noninterest-bearing
deposits 66,801 60,691 61,927
Interest-bearing demand
and savings 578,329 568,527 183,310
CD's and other time
deposits 704,748 802,951 900,776
Total Deposits 1,349,878 1,432,169 1,146,013
Borrowed Funds 150,996 139,554 299,856
Total interest-bearing
liabilities 1,434,073 1,511,032 1,383,942
Shareholders' Equity 126,206 125,031 120,680
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands)
(Unaudited)
For the Three Month Period Ended
--------------------------------
September June 30, March 31,
30, 2010 2010 2010
---------- --------- ----------
SELECTED BALANCE SHEET
DATA
Quarterly average
balances
Total loans $1,450,896 $1,422,434 $1,086,780
Investment securities 348,687 362,375 353,238
Total earning assets 1,921,498 1,873,308 1,498,281
Total Assets 2,187,283 2,114,839 1,645,918
Deposits:
Noninterest-bearing
deposits 109,366 98,953 66,918
Interest-bearing demand
and savings 771,739 696,693 587,240
CD's and other time
deposits 976,147 985,816 708,332
Total Deposits 1,857,252 1,781,462 1,362,490
Borrowed Funds 148,755 176,017 145,919
Total interest-bearing
liabilities 1,896,641 1,858,526 1,441,491
Shareholders' Equity 166,942 142,815 126,773
For the Three Month Period Ended
--------------------------------
December 31, September December 31,
2009 30, 2009 2008
------------- ---------- -------------
SELECTED BALANCE
SHEET DATA
Quarterly average
balances
Total loans $1,058,657 $1,056,363 $998,644
Investment
securities 408,781 431,647 197,878
Total earning
assets 1,492,702 1,531,508 1,222,102
Total Assets 1,616,235 1,640,551 1,328,919
Deposits:
Noninterest-
bearing deposits 59,458 64,656 72,586
Interest-bearing
demand and
savings 560,697 506,933 173,218
CD's and other
time deposits 716,199 800,739 822,048
Total Deposits 1,336,354 1,372,328 1,067,852
Borrowed Funds 140,812 133,764 169,431
Total interest-
bearing
liabilities 1,417,708 1,441,436 1,164,697
Shareholders'
Equity 123,659 126,253 85,447
LOAN MIX AND STRATIFICATION STATISTICS
BNC BANCORP
(Dollars in thousands)
(Unaudited)
As of September 30,
-------------------
2010 2009 % Change
---- ---- --------
Loans Not
Covered Under
Loss Share
Agreements:
Construction,
A&D, and Land $202.4 $243.7 (17.0)
-------------- ------ ------ -----
Residential
Construction 31.1 57.1 (45.5)
Presold 12.8 17.3 (26.0)
Speculative 18.3 39.8 (54.0)
Loan size -Over
$400,000 6.1 12.8 (52.3)
Loan size -
$200,000 to
$400,000 6.3 17.7 (64.4)
Loan size -
under $200,000 5.9 9.3 (36.6)
Commercial
Construction 40.1 38.5 4.2
Loan size -$5
million and
over 12.5 6.7 -
Loan size -$3
million to $5
million 8.0 6.9 15.9
Loan size -$1
million to $3
million 12.1 16.1 (24.8)
Loan size -
under $1
million 7.5 8.8 (14.8)
Residential and
Commercial A&D 30.1 44.0 (31.6)
Loan size -$5
million to $6
million 11.7 11.6 0.9
Loan size -$3
million to $5
million 3.6 14.4 (75.0)
Loan size -$1
million to $3
million 10.1 14.8 (31.8)
Loan size -
under $1
million 4.7 3.2 46.9
Land 101.1 104.0 (2.8)
Residential
Buildable Lots 44.9 42.2 6.4
Commercial
Buildable Lots 13.5 18.7 (27.81)
Land held for
development 27.0 29.2 (7.5)
Raw and
Agricultural
Land 15.7 13.9 13.0
Commercial Real
Estate $536.2 $416.7 28.7
--------------- ------ ------ ----
Multi-Family 42.0 29.0 44.8
Churches 19.2 13.9 38.1
Retail 371.0 273.5 35.7
Owner Occupied 117.7 75.4 56.1
Investment 253.3 198.1 27.9
Loan size -$5
million to $9
million 46.1 26.1 76.6
Loan size -$3
million to $5
million 47.6 31.4 51.6
Loan size -$1
million to $3
million 83.1 64.0 29.8
Loan size -
under $1
million 76.5 76.6 (0.1)
Industrial 104.0 97.1 7.1
Owner Occupied 49.8 34.4 44.8
Investment 54.2 62.7 (13.6)
Loan size -$5
million to $6
million - 5.1 (100.00)
Loan size -$3
million to $5
million 4.3 3.4 26.5
Loan size -$1
million to $3
million 24.1 26.8 (10.1)
Loan size -
under $1
million 25.8 27.4 (5.8)
Other - 3.2 (100.0)
LOAN MIX AND STRATIFICATION STATISTICS
BNC BANCORP
(Dollars in thousands)
(Unaudited) Trends
------
September June 30, March 31,
30, 2010 2010 2010
---------- --------- ----------
Loans Not
Covered
Under Loss
Share
Agreements:
Construction,
A&D, and Land $202.4 $204.8 $227.4
-------------- ------ ------ ------
Residential
Construction 31.1 33.7 44.7
Presold 12.8 13.5 17.6
Speculative 18.3 20.2 27.1
Loan size -
Over
$400,000 6.1 6.4 8.8
Loan size -
$200,000 to
$400,000 6.3 7.9 11.1
Loan size -
under
$200,000 5.9 5.9 7.2
Commercial
Construction 40.1 34.9 43.0
Loan size -
$5 million
and over 12.5 10.2 -
Loan size -
$3 million
to $5
million 8.0 4.4 12.0
Loan size -
$1 million
to $3
million 12.1 14.2 20.2
Loan size -
under $1
million 7.5 6.1 10.8
Residential
and
Commercial
A&D 30.1 31.0 38.5
Loan size -
$5 million
to $6
million 11.7 11.7 11.6
Loan size -
$3 million
to $5
million 3.6 3.6 7.6
Loan size -
$1 million
to $3
million 10.1 9.0 15.4
Loan size -
under $1
million 4.7 6.7 3.9
- - -
Land 101.1 105.2 101.2
Residential
Buildable
Lots 44.9 46.7 40.6
Commercial
Buildable
Lots 13.5 16.6 17.3
Land held for
development 27.0 29.3 28.2
Raw and
Agricultural
Land 15.7 12.6 15.1
Commercial
Real Estate $536.2 $507.4 $461.2
------------ ------ ------ ------
Multi-Family 42.0 35.1 30.2
Churches 19.2 19.3 16.4
Retail 371.0 350.2 307.2
Owner
Occupied 117.7 116.8 89.0
Investment 253.3 233.4 218.2
Loan size -
$5 million
to $9
million 46.1 45.7 40.9
Loan size -
$3 million
to $5
million 47.6 36.2 35.5
Loan size -
$1 million
to $3
million 83.1 79.1 72.6
Loan size -
under $1
million 76.5 72.4 69.2
Industrial 104.0 102.8 103.5
Owner
Occupied 49.8 49.6 36.3
Investment 54.2 53.2 67.2
Loan size -
$5 million
to $6
million - - 5.1
Loan size -
$3 million
to $5
million 4.3 4.3 3.3
Loan size -
$1 million
to $3
million 24.1 23.0 29.9
Loan size -
under $1
million 25.8 25.9 28.9
Other - - 3.9
(Unaudited) Trends
------
December 31, September
2009 30, 2009
------------- ----------
Loans Not Covered
Under Loss Share
Agreements:
Construction, A&D,
and Land $234.9 $243.7
------------------ ------ ------
Residential
Construction 50.3 57.1
Presold 16.9 17.3
Speculative 33.4 39.8
Loan size -Over
$400,000 9.8 12.8
Loan size -$200,000
to $400,000 14.6 17.7
Loan size -under
$200,000 9.0 9.3
Commercial
Construction 41.2 38.5
Loan size -$5
million and over - 6.7
Loan size -$3
million to $5
million 8.4 6.9
Loan size -$1
million to $3
million 23.0 16.1
Loan size -under $1
million 9.8 8.8
Residential and
Commercial A&D 41.6 44.0
Loan size -$5
million to $6
million 11.6 11.6
Loan size -$3
million to $5
million 13.9 14.4
Loan size -$1
million to $3
million 13.2 14.8
Loan size -under $1
million 2.9 3.2
-
Land 101.8 104.0
Residential
Buildable Lots 41.1 42.2
Commercial Buildable
Lots 14.9 18.7
Land held for
development 28.5 29.2
Raw and Agricultural
Land 17.3 13.9
Commercial Real
Estate $449.1 $416.7
--------------- ------ ------
Multi-Family 31.1 29.0
Churches 16.3 13.9
Retail 297.2 273.5
Owner Occupied 85.2 75.4
Investment 212.1 198.1
Loan size -$5
million to $9
million 32.7 26.1
Loan size -$3
million to $5
million 35.5 31.4
Loan size -$1
million to $3
million 78.5 64.0
Loan size -under $1
million 65.4 76.6
Industrial 101.3 97.1
Owner Occupied 36.3 34.4
Investment 65.0 62.7
Loan size -$5
million to $6
million 5.1 5.1
Loan size -$3
million to $5
million 3.4 3.4
Loan size -$1
million to $3
million 28.2 26.8
Loan size -under $1
million 28.3 27.4
Other 3.2 3.2
SOURCE BNC Bancorp
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