THOMASVILLE, N.C., Feb. 13 /PRNewswire-FirstCall/ -- BNC Bancorp
(Nasdaq: BNCN) today reported that net income for the year ended December
31, 2007 increased 20.6 percent to $7.44 million when compared with $6.17
million reported for 2006. Diluted earnings per share increased to $1.05 in
2007, a 1.0 percent increase compared with $1.04 reported for the full year
of 2006. Return on tangible equity for 2007 was 15.58 percent.
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For the fourth quarter of 2007 net income declined 23.9 percent to
$1.55 million from $2.04 million a year earlier. Per-share earnings
(diluted) were $0.22, down 24.1 percent from the $0.29 reported in 2006.
Total assets as of December 31, 2007 were $1.13 billion, an increase of
18.5 percent compared with $952 million as of December 31, 2006. Total
loans on December 31, 2007 were $933 million, an increase of 20.4 percent
from the $775 million reported as of December 31, 2006. Deposits increased
8.7 percent over the same one-year period.
W. Swope Montgomery, Jr., President and Chief Executive Officer, said,
"In light of the many strategic initiatives undertaken and the challenges
facing our Company and industry, we are pleased with the success we
achieved in 2007 in growing our core company. While we are definitely not
satisfied with our results when compared to our historical levels, given
the magnitude of industry margin compression, a downturn in the credit
cycle and the increase in regulatory and compliance burdens, we are very
pleased with reporting diluted earnings per share of $1.05 for the year.
"Several factors contributed to our fourth quarter and full year
results, some attributable to macro economic and industry conditions, while
others related to management initiatives to build infrastructure to support
and fuel our growing company," Montgomery said.
-- Investment in New Markets: "With attractive demographics and growth
potential, we have targeted suburban Charlotte as a primary expansion
area for the Bank. In the third quarter we celebrated the grand
opening of our full service permanent facility in Harrisburg, and in
the fourth quarter we hired a team of exceptional, seasoned bankers to
open a banking office in the Mooresville/Lake Norman area. These
offices, while increasing overhead in the fourth quarter, are
investments in the future of our Company that we are confident will pay
great dividends in future periods."
-- Interest Rate Impact: "Due to a flat yield curve and recent Federal
Reserve rate cuts, our Company has been challenged with shrinking net
interest margins which will likely continue into the first half of
2008. However, we expect our margin to rebound during the second half
of 2008 as low short-term rates and a steeper yield curve provide a
very favorable environment for margin expansion."
-- Credit Quality: "Even though we operate in one of the most stable real
estate markets in the southeast, we are prudently and continuously
evaluating our policies, procedures, and portfolio mix. We fully
understand we are in the business of managing risk, and while current
conditions have heightened risk within our industry, we are embracing
and fortifying the resources within our Company to better manage this
risk.
Despite our heightened internal focus on credit quality, we are very
pleased to report that net charge-offs for 2007 were 0.20 percent, up
only slightly from the 0.18 percent in 2006. While the level of non-
performing assets increased to 0.54 percent at year end versus 0.26
percent a year earlier, we were pleased that after taking sufficient
write-downs on these assets, the higher level of non-performing assets
did not result in significantly higher net charge-offs for the year."
-- Compliance: "Surpassing $1 Billion in assets in 2007 was a major
milestone for our Company. With the added scrutiny and regulatory
oversight due to our growing market capitalization, we incurred a heavy
burden in terms of legal, professional, and regulatory expense. Much
of this burden related to the compliance requirements for Sarbanes
Oxley Section 404 reporting, IRS Section 409A for employee benefit
plans and contracts, and a change in GAAP effective January 1, 2008 for
post-retirement split dollar life insurance."
"While the fourth quarter was not a typical quarter in terms of
operational results for our Company or our industry, we are convinced that
rather than retrench to protect short-term earnings, now is the time to
invest in infrastructure and growth opportunities. In the near future, when
we return to a more favorable banking environment, these investments will
better position our Company to meet our underlying objectives of rewarding
our shareholders, maintaining high credit quality, and achieving double
digit growth in both earnings and assets," Montgomery explained.
BNC Bancorp is the parent Company of Bank of North Carolina, a $1.13
Billion commercial bank that provides a complete line of banking and
financial services to individuals and businesses through full-service
banking offices located in the cities of Thomasville, High Point,
Salisbury, Greensboro, Archdale, Lexington, Kernersville, Harrisburg,
Welcome and Oak Ridge, North Carolina. In addition, the Bank operates
limited service banking offices in Winston-Salem and Mooresville, North
Carolina. Bank of North Carolina is insured by the FDIC and is an equal
housing lender. BNC Bancorp's stock is quoted in the Nasdaq Capital Market
under the symbol "BNCN."
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
From time to time, we make written and oral forward-looking statements
within the meaning of certain securities laws, including in this press
release, in other filings with the U.S. Securities and Exchange Commission,
in reports to shareholders and in other communications. These
forward-looking statements include, among others, statements with respect
to our objectives for 2007 and beyond, and the medium and long terms
strategies to achieve those objectives, as well as statements with respect
to our beliefs, plans, expectations, anticipations, estimates and
intentions.
By their very nature, forward-looking statements involve inherent risks
and uncertainties, both general and specific, and risks exist that
predictions, forecasts, projections and other forward-looking statements
will not be achieved. We caution readers not to place undue reliance on
these statements as a number of important factors could cause actual
results to differ materially from the plans, objectives, expectations,
estimates and intentions expressed in such forward-looking statements.
These factors include, but are not limited to, the strength of the North
Carolina economy in general and the strength of the local economies within
North Carolina in which we conduct operations; the strength of the United
States economy; the effects of changes in monetary and fiscal policy,
including changes in interest rate policies of the Board of Governors of
the Federal Reserve System in the United States; judicial decisions; the
effects of competition in the markets in which we operate; inflation; the
timely development and introduction of new products and services in
receptive markets; the impact of changes in the laws and regulations
regulating financial services (including banking, insurance and
securities); changes in tax laws; technological changes; our ability to
complete strategic acquisitions and to integrate acquisitions; judicial or
regulatory proceedings; changes in consumer spending and saving habits; the
possible impact on our businesses of international conflicts and other
developments including those relating to the war on terrorism; and our
anticipation of and success in managing the risks implicated by the
foregoing.
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except per share data)
(Unaudited)
For the
Three Months Ended
December 31, December 31,
2007 2006 % Change
SUMMARY STATEMENTS OF OPERATIONS
Interest income $19,262 $16,616 15.9 %
Interest expense 11,003 8,509 29.3
Net interest income 8,259 8,107 1.9
Provision for loan losses 750 780 (3.9)
Net interest income after
provision for loan losses 7,509 7,327 2.5
Noninterest income 1,483 1,152 28.7
Noninterest expense 6,839 5,540 23.5
Income before income tax expense 2,153 2,939 (26.7)
Provision for income taxes 600 898 (33.2)
Net income 1,553 2,041 (23.9)
PER SHARE DATA
Earnings per share, basic $ 0.22 $ 0.30 -26.7 %
Earnings per share, diluted 0.22 0.29 (24.1)
Book value per share 11.89 10.81 10.0
Tangible book value per share 8.01 6.59 21.6
Weighted average common shares
outstanding:
Basic 6,914,320 6,698,899
Diluted 7,097,902 7,026,623
PERFORMANCE RATIOS
Return on average assets 0.56% 0.88%
Return on average equity 7.61% 11.32%
Return on average tangible equity 11.70% 19.15%
Net yield on earning assets
(taxable equivalent) 3.37% 4.09%
Average equity to average assets 7.29% 7.77%
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except per share data)
(Unaudited)
For the
Twelve Months Ended
December 31, December 31,
2007 2006 % Change
SUMMARY STATEMENTS OF OPERATIONS
Interest income $73,670 $53,211 38.5 %
Interest expense 41,265 26,481 55.8
Net interest income 32,405 26,730 21.2
Provision for loan losses 3,090 2,655 16.4
Net interest income after
provision for loan losses 29,315 24,075 21.8
Noninterest income 5,249 3,821 37.4
Noninterest expense 24,068 19,110 25.9
Income before income tax expense 10,496 8,786 19.5
Provision for income taxes 3,058 2,616 16.9
Net income 7,438 6,170 20.6
PER SHARE DATA
Earnings per share, basic $ 1.08 $ 1.09 -0.9 %
Earnings per share, diluted 1.05 1.04 1.0
Weighted average common shares
outstanding:
Basic 6,865,204 5,658,196
Diluted 7,088,218 5,957,478
PERFORMANCE RATIOS
Return on average assets 0.71% 0.82%
Return on average equity 9.78% 12.60%
Return on average tangible equity 15.58% 18.20%
Net yield on earning assets
(taxable equivalent) 3.60% 4.08%
Average equity to average assets 7.31% 6.54%
Allowance for loan losses as a %
of total loans 1.26% 1.34%
Non-performing assets to total
assets, end of period 0.54% 0.26%
Ratio of net charge-offs to
average loans outstanding 0.20% 0.18%
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except per share data)
(Unaudited)
For the Three Months Ended
Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31,
2007 2007 2007 2007 2006 2005
SUMMARY STATEMENTS
OF OPERATIONS
Interest
income $19,262 $19,420 $18,146 $16,842 $16,616 $9,652
Interest
expense 11,003 10,990 10,090 9,182 8,509 4,343
Net interest
income 8,259 8,430 8,056 7,660 8,107 5,308
Provision for
loan losses 750 1,140 650 550 780 900
Net interest
income after
provision for
loan losses 7,509 7,290 7,406 7,110 7,327 4,408
Noninterest
income 1,483 1,255 1,307 1,204 1,152 904
Noninterest
expense 6,839 5,941 5,700 5,588 5,540 3,622
Income before
income tax
expense 2,153 2,604 3,013 2,726 2,939 1,690
Provision for
income taxes 600 754 895 809 878 470
Net income 1,553 1,850 2,118 1,917 2,041 1,220
Net interest
income, as
reported $ 8,259 $ 8,430 $ 8,056 $ 7,660 $ 8,107 $ 5,308
Tax-equivalent
adjustment 360 422 401 386 411 249
Net interest
income,
tax-equivalent 8,619 8,852 8,457 8,046 8,518 5,557
PER SHARE DATA
Earnings per share,
basic $0.22 $0.27 $0.31 $0.28 $0.30 $0.25
Earnings per share,
diluted 0.22 0.26 0.30 0.27 0.29 0.24
Weighted average
common shares
outstanding:
Basic 6,914,320 6,895,012 6,849,403 6,800,690 6,698,899 4,803,706
Diluted 7,097,902 7,093,801 7,090,473 7,074,287 7,026,623 5,104,670
PERFORMANCE RATIOS
Return on
average assets 0.56% 0.68% 0.84% 0.81% 0.88% 0.83%
Return on
average equity 7.61% 9.67% 11.44% 10.63% 11.32% 15.43%
Return on
average
tangible
equity 11.70% 15.44% 18.52% 17.38% 19.13% 17.33%
Net yield on
earning assets
(taxable
equivalent) 3.37% 3.55% 3.71% 3.79% 4.09% 4.15%
Average equity
to average
assets 7.29% 7.03% 7.32% 7.62% 7.77% 5.40%
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands)
(Unaudited) As of
December 31, December 31,
2007 2006 % Change
SELECTED BALANCE SHEET DATA
End of period balances
Total loans $932,562 $774,664 20.4 %
Allowance for loan losses 11,784 10,400 13.3
Loans, net of allowance for loan
losses 920,778 764,264 20.5
Securities, available for sale 87,396 76,700 14.0
Total Assets 1,128,181 951,731 18.5
Deposits:
Noninterest-bearing
deposits 67,552 65,932 2.5
Interest-bearing demand and
savings 216,895 189,624 14.4
CD's and other time
deposits 570,683 531,221 7.4
Total deposits 855,130 786,777 8.7
Borrowed Funds 182,641 86,386 111.4
Total interest-bearing liabilities 970,219 807,231 20.2
Shareholders' Equity 86,392 72,523 19.1
As of
Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31,
2007 2007 2007 2007 2006 2005
SELECTED BALANCE SHEET DATA
End of period balances
Total loans $932,562 $905,259 $875,515 $805,519 $774,664 $499,247
Allowance for
loan losses 11,784 11,479 11,243 10,747 10,400 6,140
Loans, net of
allowance for
loan losses 920,778 893,780 864,272 794,772 764,264 493,107
Securities,
available for
sale 87,396 84,917 79,133 77,918 76,700 42,489
Total
Assets 1,128,181 1,098,263 1,070,633 984,802 951,731 594,550
Deposits:
Noninterest-
bearing
deposits 67,552 69,399 71,653 70,660 65,932 39,573
Interest-bearing
demand and
savings 216,895 216,865 205,170 195,788 189,624 128,303
CD's and other
time deposits 570,683 611,674 621,160 545,505 531,221 323,017
Total Deposits 855,130 897,938 897,983 811,953 786,777 490,893
Borrowed Funds 182,641 117,482 92,149 93,010 86,386 66,557
Total
interest-
bearing
liabilities 970,219 946,021 918,479 834,303 807,231 517,877
Shareholders'
Equity 86,392 78,242 74,970 73,875 72,523 33,114
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands)
(Unaudited)
For the Three Month Period Ended
Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31,
2007 2007 2007 2007 2006 2005
SELECTED BALANCE SHEET DATA
Quarterly average balances
Loans, net of
allowance for
loan losses 909,571 886,557 824,509 776,447 745,829 481,074
Securities,
available for
sale 81,632 84,064 75,982 77,230 72,504 42,486
Total earning
assets 1,008,427 990,099 914,527 861,971 826,706 530,994
Total Assets 1,109,313 1,080,473 1,014,860 959,426 922,335 581,361
Deposits: 853,677
Noninterest-
bearing
deposits 68,992 68,204 69,438 64,462 70,140 42,778
Interest-bearing
demand and
savings 215,630 215,094 202,839 191,505 186,793 125,631
CD's and other
time deposits 590,648 619,084 563,500 532,720 495,338 308,531
Total Deposits 875,270 902,382 835,777 788,687 752,271 476,940
Borrowed Funds 149,254 96,114 98,548 91,844 95,948 67,750
Total interest-
bearing
liabilities 955,532 930,292 864,887 816,069 778,079 501,912
Shareholders'
Equity 80,919 75,931 74,258 73,152 71,752 31,379
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