By HIGH POINT, N.C., Jan. 24, 2014 /PRNewswire/ -- BNC Bancorp (NASDAQ: BNCN) ("Company"), parent company for Bank of North Carolina ("Bank"), today reported financial results for the fourth quarter and year ended December 31, 2013.
(Logo: http://photos.prnewswire.com/prnh/20030917/BNCLOGO )
Highlights for 2013:
-- BNC Bancorp's stock was the highest performing bank stock in the
Southeast United States based on a recent study provided by Bank Street
Partners;
-- Richard D. Callicutt II was named President and Chief Executive Officer,
upon the planned retirement of founding President and CEO, W. Swope
Montgomery, Jr.;
-- Operating earnings per diluted share of $0.71, compared to $0.00 per
diluted share for 2012;
-- Operating earnings of $19.1 million, compared to operating loss of $3.3
million for 2012;
-- Loans not recorded at fair value increased 17.6% during fiscal year
2013;
-- Fully taxable-equivalent net interest margin increased to 4.29%,
compared to 3.85% for 2012;
-- Completed acquisition of Randolph Bank & Trust ("Randolph"), increasing
our presence in Piedmont Triad area of North Carolina by approximately
$250 million; and
-- Announced merger agreements with both South Street Financial
Corporation, the parent company of Home Savings Bank, FSB in Albemarle,
North Carolina ("South Street"), and Community First Financial Group,
Inc. ("Community First"), the parent company of Harrington Bank, FSB in
Chapel Hill, North Carolina.
Operating earnings for the quarter ended December 31, 2013 totaled $5.7 million, or $0.21 per diluted share, an increase of 12.7% compared to $5.1 million, or $0.19 per diluted share, for the quarter ended September 30, 2013, and an increase from an operating loss of $0.1 million, or $0.00 per diluted share, for the quarter ended December 31, 2012. Operating earnings exclude transaction-related expenses, bargain purchase gain on acquisitions, acquisition-related gains, and gain (loss) on sale of securities, and include preferred stock dividends.
Operating earnings for the year ended December 31, 2013 totaled $19.1 million, or $0.71 per diluted share, as compared to an operating loss of $3.3 million, or ($0.19) per diluted share, for the year ended December 31, 2012.
Net income for the year ended December 31, 2013 was $17.2 million, an increase of 65.0% when compared to net income of $10.5 million for the year ended December 31, 2012. Net income available to common shareholders for the year ended December 31, 2013 was $16.2 million, or $0.61 per diluted share, an increase of 101.1% compared to net income available to common shareholders of $8.0 million, or $0.48 per diluted share, for the year ended December 31, 2012. The financial results for the year ended December 31, 2012 include $12.7 million of pre-tax bargain purchase gain the Company recorded on the acquisitions of Carolina Federal Savings Bank ("Carolina Federal") and First Trust Bank ("First Trust"), as well as $3.0 million of pre-tax gains on the sale of investment securities.
Net income for the quarter ended December 31, 2013 was $3.3 million, a decrease of 35.2% compared to net income of $5.0 million for both the quarter ended September 30, 2013 and the quarter ended December 31, 2012. Net income available to common shareholders for the quarter ended December 31, 2013 was $3.3 million, or $0.12 per diluted share, a decrease of 35.0% compared to net income available to common shareholders of $5.0 million, or $0.19 per diluted share, for the quarter ended September 30, 2013, and a decrease of 26.4% compared to net income available to common shareholders of $4.4 million, or $0.19 per diluted share, for the fourth quarter of 2012. The financial results for the quarter ended December 31, 2013 include the impact of the acquisition of Randolph, which was completed on October 1, 2013, while the results for the quarter ended December 31, 2012 include $5.0 million of pre-tax bargain purchase gain the Company recorded on the acquisition of First Trust.
Average common shares outstanding increased significantly since the second half of 2012 as a result of the Company's capital raise in June 2012, as well as common stock issued in connection with the acquisitions of KeySource Financial ("KeySource"), First Trust and Randolph. For the years ended December 31, 2013 and 2012, average fully-diluted shares outstanding were 26.7 million and 17.6 million, respectively.
Total assets at December 31, 2013 were $3.23 billion, an increase of 4.7% as compared to total assets of $3.08 billion at December 31, 2012. The increase in assets is primarily due to the acquisition of Randolph during the fourth quarter of 2013, offset by the Company's decision to utilize excess liquidity to primarily repay higher cost deposits as they matured. This deleveraging has helped the Company execute on its strategic initiative to improve capital ratios and net interest margin. Excess liquidity was also used to purchase higher yielding investment securities, which has also contributed to the improved net interest margin.
Additional Highlights for 2013:
-- Redeemed all Series A Preferred Stock with non-dilutive term loan;
-- Diluted earnings per share of $0.61, compared to $0.48 per diluted share
for 2012;
-- Net income available to common shareholders of $16.2 million, an
increase of 101.1% compared to 2012;
-- Nonaccrual loans not covered by loss-share decreased 23.7% during fiscal
year 2013;
-- Nonperforming assets decreased 27.1% during fiscal year 2013;
-- Fully taxable-equivalent net interest margin, before hedging costs,
increased to 4.66%, compared to 4.21% for 2012;
-- Return on tangible common equity ratio of 7.50%, compared to 6.57% for
2012; and
-- Operating return on tangible common equity ratio of 8.79%, compared to
(2.28%) for 2012.
Richard D. Callicutt II, President and CEO, stated, "The fourth quarter and all of 2013 were pivotal in solidifying the core earnings power of our organization. We saw significant improvement in all of our key credit metrics while growing non-acquired loans by more than 17%. We successfully completed the integration of the acquisitions from 2012 and began to see those provide a more solid platform for gains in market share. The Randolph transaction and systems conversion were both completed in late 2013, allowing us to maximize the earnings opportunity in 2014 from that transaction. Finally, the South Street and Community First announcements, both expected to close during the second quarter of 2014, have created more opportunity to leverage our infrastructure, diversify our deposit base, gain access to a client base that will benefit from an enhanced product offering and provide an additional revenue stream toward our future earnings goals. Lastly, as of October 2013, all Bank of North Carolina employees are shareholders of our Company. The ownership mentality as they perform their duties and responsibilities each day is paying off in focus, creativity and enthusiasm."
Operating Results
Fully taxable-equivalent ("FTE") net interest income for the fourth quarter of 2013 was $31.8 million, an increase of 11.9% from $28.5 million for the third quarter of 2013, and an increase of 24.1% from $25.6 million for the fourth quarter of 2012. FTE net interest margin was 4.39% for the fourth quarter of 2013, an increase of 13 basis points from 4.26% for the third quarter of 2013, and an increase of 30 basis points from 4.09% for the fourth quarter of 2012. Without the cash flow hedging expense, FTE net interest margin for the fourth quarter of 2013 was 4.76%, compared to 4.65% for the third quarter of 2013 and 4.43% for the fourth quarter of 2012.
FTE net interest income for the year ended December 31, 2013 was $115.8 million, an increase of 34.1% from $86.4 million for the year ended December 31, 2012. FTE net interest margin was 4.29% for the year ended December 31, 2013, an increase of 44 basis points from 3.85% for the year ended December 31, 2012. Without the cash flow hedging expense, FTE net interest margin for the year ended December 31, 2013 was 4.66%, compared to 4.21% for the comparable period of 2012.
Average interest-earning assets were $2.88 billion for the fourth quarter of 2013, an increase of 8.6% from $2.65 billion during the third quarter of 2013, and an increase of 15.4% from $2.50 billion for the fourth quarter of 2012. The increase from the third quarter of 2013 was primarily due to the interest-earning assets acquired from Randolph, along with continued loan growth in our markets and an increase in our investment securities portfolio.
Average interest-earning assets were $2.70 billion for the year ended December 31, 2013, an increase of 20.1% from $2.24 billion for the year ended December 31, 2012. The increase in average interest-earning assets from 2012 is primarily due to the full year impact of interest-earning assets acquired from Carolina Federal, KeySource and First Trust during 2012, interest-earning assets acquired from Randolph during the fourth quarter of 2013, along with continued loan growth in our markets and an increase in our investment securities portfolio.
The Company's average yield on interest-earning assets was 5.48% for the fourth quarter of 2013, an increase of 12 basis points from 5.36% for the third quarter of 2013, and an increase of 10 basis points from 5.38% for the fourth quarter of 2012. The increase from third quarter of 2013 was primarily due to the addition of higher yielding loans acquired from Randolph, as well as an increase in loan accretion from the acquired loan portfolio. The increase from the fourth quarter of 2012 was primarily due to higher loan accretion from the acquired loan portfolio, as well as the addition of higher yielding loans acquired from First Trust and Randolph. Loan accretion during the fourth quarter of 2013 totaled $4.2 million, an increase of 31.0% from loan accretion of $3.2 million for the third quarter of 2013, and an increase of 36.4% from $3.1 million of accretion recorded in the fourth quarter of 2012.
The Company's average yield on interest-earning assets was 5.41% for the year ended December 31, 2013, an increase of 10 basis points compared to 5.31% for the comparable period of 2012. The increase from 2012 was primarily due to an increase in loan accretion from the acquired loan portfolio, as well as the addition of higher yielding loans acquired from Carolina Federal, KeySource, First Trust and Randolph. Loan accretion during the year ended December 31, 2013 totaled $14.4 million, an increase of 116.7% from loan accretion of $6.7 million for the year ended December 31, 2012. These increases were offset by lower yields earned on investment securities due to the replacement of matured and called investments with lower yielding securities.
Average interest-bearing liabilities were $2.56 billion for the fourth quarter of 2013, an increase of 7.6% from $2.38 billion for the third quarter of 2013, and an increase of 11.6% from $2.30 billion for the fourth quarter of 2012. The increase from the third quarter of 2013 was due to additional interest-bearing liabilities acquired from Randolph, as well as increased borrowings during the fourth quarter of 2013.
Average interest-bearing liabilities were $2.43 billion for the year ended December 31, 2013, an increase of 14.2% from $2.13 billion for the year ended December 31, 2012. The increase in average interest-bearing liabilities from 2012 is primarily due to the full year impact of the acquisitions of Carolina Federal, KeySource and First Trust during 2012, increased borrowings during fiscal year 2013 and the acquisition of Randolph, offset by the Company's use of excess liquidity to primarily repay wholesale and non-core deposits as they matured.
The Company's average cost of interest-bearing liabilities was 1.23% for the fourth quarter of 2013, which is consistent with the third quarter of 2013, and a decrease of 18 basis points from 1.41% for the fourth quarter of 2012. The decrease was due to the Company's continued effort to reduce exposure to higher cost deposit products, as well as lower interest rates paid on borrowings, which was offset by continued increases in cash flow hedging expense. For the fourth quarter of 2013, cash flow hedging expenses totaled $2.7 million, compared to $2.6 million for the third quarter of 2013 and $2.1 million for the fourth quarter of 2012.
The Company's average cost of interest-bearing liabilities was 1.24% for the year ended December 31, 2013, a decrease of 31 basis points from 1.55% for the year ended December 31, 2012. This decrease was primarily due to the Company's decision to reduce exposure to higher cost deposit products and aggressively reduce deposit rates over the past three quarters, as well as reductions in interest rates paid on borrowings. These rate decreases were slightly offset by an increase in cash flow hedging expense, which totaled $9.9 million for the year ended December 31, 2013, compared to $7.9 million for the year ended December 31, 2012.
Average Yields / Costs (FTE)
(unaudited)
Year Ended December
31, Three Months Ended
-------------------- ------------------
2013 2012 December 31, September 30, December 31,
2013 2013 2012
---- ---- ----
Yield on interest-earning assets 5.41% 5.31% 5.48% 5.36% 5.38%
Cost of interest-bearing liabilities 1.24% 1.55% 1.23% 1.23% 1.41%
Cost of funds 1.11% 1.42% 1.09% 1.10% 1.28%
Net interest spread 4.17% 3.76% 4.25% 4.13% 3.97%
Net interest margin 4.29% 3.85% 4.39% 4.26% 4.09%
Net interest margin w/o hedging expense 4.66% 4.21% 4.76% 4.65% 4.43%
Non-interest income was $5.2 million for the fourth quarter of 2013, a decrease of 11.1% compared to $5.8 million for the third quarter of 2013, and a decrease of 50.2% from $10.4 million for the fourth quarter of 2012. Adjusted non-interest income was $5.2 million for the fourth quarter of 2013, a decrease of 3.3% from $5.3 million for the third quarter of 2013, and an increase of 8.3% from $4.8 million for the fourth quarter of 2012. Adjusted non-interest income excludes bargain purchase gain on acquisition, acquisition-related gains (includes income related to the subsequent settlement of a liability assumed in an acquisition) and gain (loss) on sale of securities. Service charge income increased by 35.4% from the third quarter of 2013 due to an increased volume of transactions, which was offset by a 29.0% decrease in mortgage fees due to decreases in the mortgage pipeline and reduced gain-on-sale margins.
For the year ended December 31, 2013, non-interest income was $22.8 million, a decrease of 31.2% compared to non-interest income of $33.1 million for the year ended December 31, 2012. Adjusted non-interest income was $21.7 million for the year ended December 31, 2013, an increase of 24.4% from $17.4 million for the year ended December 31, 2012. Adjusted non-interest income excludes bargain purchase gain on acquisitions, acquisition-related gains, gain (loss) on sale of securities and an insurance settlement received during 2013. The increase was primarily due to increased volume of mortgage originations, as the Company continued to expand commissioned originators across key target markets, as well as an increase in service charge income due to an increased volume of transactions, primarily due to our recent acquisitions.
Non-interest expense was $28.6 million for the fourth quarter of 2013, an increase of 27.6% compared to non-interest expense of $22.4 million for the third quarter of 2013, and an increase of 15.1% from $24.9 million for the fourth quarter of 2012. Excluding transaction-related costs, adjusted non-interest expense for the fourth quarter of 2013 was $24.7 million, an increase of 13.0% from $21.9 million for the third quarter of 2013, and an increase of 5.5% from $23.5 million for the fourth quarter of 2012. Transaction-related costs include legal and professional fees, personnel costs, data processing expenses, and other miscellaneous expenses directly attributable to the transaction. The increase from the third quarter of 2013 was primarily due to additional employees and facilities acquired from Randolph. The decrease from the fourth quarter of 2012 was primarily due to a reduction in valuation charges recorded on other real estate owned ("OREO") and reduced loan, foreclosure and collection expenses.
Non-interest expense was $97.9 million for the year ended December 31, 2013, an increase of 19.0% from $82.3 million for the year ended December 31, 2012. Excluding transaction-related costs, adjusted non-interest expense for the year ended December 31, 2013 was $92.2 million, an increase of 19.6% from $77.1 million for the year ended December 31, 2012. The increase from 2012 was primarily due to the full year impact of the additional employees and facilities purchased in connection with the acquisitions of Carolina Federal, KeySource and First Trust during 2012, as well as the acquisition of Randolph during the fourth quarter of 2013. The additional expenses were partially offset by a reduction in valuation charges recorded on OREO and reduced loan, foreclosure and collection expenses.
Non-Interest Income / Non-Interest Expense
(dollars in thousands; unaudited)
Year Ended December
31, Three Months Ended
-------------------- ------------------
2013 2012 December 31, September 30, December 31,
2013 2013 2012
---- ---- ----
Non-interest income
Mortgage fees $8,979 $6,169 $1,710 $2,408 $1,902
Service charges 4,314 3,149 1,354 1,000 916
Earnings on bank-owned life insurance 2,318 1,771 646 571 541
Gain (loss) on sale of securities (42) 3,026 10 - 651
Bargain purchase gain on acquisitions - 12,706 - - 4,972
Other 7,237 6,317 1,458 1,845 1,412
----- ----- ----- ----- -----
Total non-interest income $22,806 $33,138 $5,178 $5,824 $10,394
======= ======= ====== ====== =======
Non-interest expense
Salaries and employee benefits $51,080 $40,861 $13,613 $12,399 11,986
Occupancy 6,547 4,965 1,691 1,666 1,527
Furniture and equipment 5,542 4,241 1,552 1,351 1,222
Data processing and supply 3,219 2,607 922 854 704
Advertising and business development 2,015 1,709 590 228 489
Insurance, professional and other 4,655 3,187 1,495 1,111 1,013
services
FDIC insurance assessments 2,766 2,166 660 660 457
Loan, foreclosure and other real 8,949 10,944 2,093 1,962 3,665
estate owned
Transaction-related expenses 5,768 5,212 3,884 540 1,406
Other 7,392 6,380 2,128 1,659 2,402
----- ----- ----- ----- -----
Total non-interest expense $97,933 $82,272 $28,628 $22,430 $24,871
======= ======= ======= ======= =======
The following is a summary of transaction-related expenses incurred by transaction:
Transaction-Related Expenses
(dollars in thousands; unaudited)
Year Ended December
31, Three Months Ended
-------------------- ------------------
Transaction 2013 2012 December 31, September 30, December 31,
2013 2013 2012
--- ---- ---- ----
Previous transactions $1,056 $5,212 $ - $21 $1,406
Randolph 4,509 - 3,681 519 -
Community First/South Street 203 - 203 - -
Total $5,768 $5,212 $3,884 $540 $1,406
====== ====== ====== ==== ======
Additional Operating Highlights
Total portfolio loans were $2.28 billion at December 31, 2013, an increase of 11.9% from $2.04 billion at December 31, 2012. The increase has primarily been due to the loans acquired from Randolph, as well as organic growth in commercial real estate and commercial construction loans, as the economic outlook in the Company's markets continues to improve. Loans not recorded at fair value, which includes originated loans and acquired loans no longer required to be recorded at fair value, increased 21.4% during fiscal year 2013 to $1.77 billion. Included in this is $56.5 million of loans that have transferred from another loan category during 2013. Excluding these transfers, loans not recorded at fair value increased 17.6% during 2013. The table below outlines the Company's loan portfolio mix between covered and non-covered loans for the past five quarters.
Gross Loan Growth
(dollars in thousands; unaudited)
December 31, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 2012
---- ---- ---- ---- ----
Loans covered by loss share, at fair value $170,528 $183,887 $202,073 $224,056 248,930
Loans not covered by loss share, at fair value 334,524 219,671 260,542 270,149 327,674
Loans not recorded at fair value (1) 1,771,465 1,696,484 1,586,326 1,536,944 1,458,654
--------- --------- --------- --------- ---------
Total portfolio loans $2,276,517 $2,100,042 $2,048,941 $2,031,149 $2,035,258
========== ========== ========== ========== ==========
(1) Includes $17,133 of loans covered by loss-share agreements not recorded at fair value at December 31, 2013.
Change in balance (quarter/quarter):
Total portfolio loans 8.4% 2.5% 0.9% -0.2% 7.1%
Loans not recorded at fair value 4.4% 6.9% 3.2% 5.4% 0.6%
Annual growth of loans not recorded at fair value 17.6%
Total deposits at December 31, 2013 were $2.71 billion, an increase of 1.9% from total deposits of $2.66 billion as of December 31, 2012. This increase was primarily due to deposits acquired from Randolph, offset by the Company's decision to utilize excess liquidity and the acquired securities portfolios to repay higher cost deposits as they matured, as well as aggressively reducing time deposit rates. Wholesale deposits were 32.8% of total deposits at December 31, 2013, an increase compared to 28.4% as of December 31, 2012. Transactional accounts, which are comprised of non-interest bearing and interest-bearing demand accounts, increased $127.2 million, or 8.5%, over the past twelve months. At December 31, 2013, time deposits were 40.0% of total deposits, compared to 43.7% at December 31, 2012.
Total Deposit Growth
(dollars in thousands; unaudited)
December 31, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 2012
---- ---- ---- ---- ----
Non-interest bearing demand $324,532 $299,670 $275,984 $267,458 $275,605
Interest-bearing demand 1,299,399 1,172,512 1,152,779 1,171,484 1,221,089
Time deposits 1,082,799 963,679 999,552 1,069,207 1,159,615
--------- ------- ------- --------- ---------
Total $2,706,730 $2,435,861 $2,428,315 $2,508,149 $2,656,309
========== ========== ========== ========== ==========
Change in balance (quarter/quarter) 11.1% 0.3% -3.2% -5.6% 15.0%
Annual deposit growth 1.9%
Total borrowings at December 31, 2013 were $227.1 million, an increase of 88.4% from total borrowings of $120.6 million as of December 31, 2012. At December 31, 2013, $125.6 million of these borrowings were short-term, while the remaining $101.5 million were long-term. The increase in borrowings was primarily due to additional borrowings from the Federal Home Loan Bank, which were used to repay higher cost deposits as they matured, as well as a term loan obtained during 2013 for the repurchase of Series A preferred stock.
Asset Quality
Net loan charge-offs for the fourth quarter of 2013 were $0.4 million, which included $0.5 million on loans not covered under loss-share agreements and net recoveries of $0.1 million on loans covered under loss-share agreements. The Company incurred $0.5 million in net charge-off losses, which represented 0.08% of average loans for the fourth quarter of 2013, compared to net charge-off losses of $2.9 million, or 0.55% of average loans, for the third quarter of 2013, and net charge-off losses of $3.8 million, or 0.78% of average loans, for the fourth quarter of 2012. The decrease in net charge-off losses during the fourth quarter of 2013 was due to an increased level of recoveries of previously charged-off loans, both covered under loss-share agreements and not covered.
Net loan charge-offs for the year ended December 31, 2013 were $20.7 million, which included $11.0 million on loans covered under loss-share agreements and $9.7 million on loans not covered under loss-share agreements. The Company's share of the covered net loan charge-offs for the year ended December 31, 2013 was $2.2 million, with the remainder being reimbursed by the FDIC. Combined with the $9.7 million of non-covered net charge-offs, the Company incurred $11.9 million in net charge-off losses, or 0.57% of average loans, during the year ended December 31, 2013, compared to $19.5 million in net charge-off losses, or 1.09% of average loans, for the year ended December 31, 2012.
During the fourth quarter of 2013, the Company recorded a provision for loan losses of $2.4 million, a decrease of 27.3% from $3.4 million recorded in the third quarter of 2013, and a decrease of 55.9% from $5.5 million recorded during the fourth quarter of 2012. The Company recorded $2.5 million of provision for loan losses on non-covered loans during the fourth quarter of 2013 and a provision reversal of $(0.1) million on loans covered under loss-share.
During the year ended December 31, 2013, the Company recorded a provision for loan losses of $12.2 million, a decrease of 46.4% from $22.7 million recorded for the year ended December 31, 2012. Of the $12.2 million in provision expense, $11.6 million related to non-covered loans. For the year ended December 31, 2013, the Company recorded a gross provision of $0.6 million on loans covered under loss-share.
The allowance for loan losses was $32.9 million at December 31, 2013, a decrease of 18.4% from $40.3 million at December 31, 2012. Loan loss reserves to total portfolio loans were 1.44% and 1.98% at December 31, 2013 and December 31, 2012, respectively. The allowance for loan loss allocated to loans not recorded at fair value was 1.51% and 1.72% at December 31, 2013 and December 31, 2012, respectively. The components of the allowance for loan loss as of December 31, 2013 were as follows:
Allowance for Loan Loss Summary
(dollars in thousands; unaudited)
At December 31, 2013
Allowance
Allowance for
for Net Loan Losses
Loans Loan Losses Loans %
----- ----------- ----- ---
Loans covered under loss-share agreements, at fair value $170,528 $(5,925) $164,603 3.47%
Loans not covered under loss-share agreements, at fair
value 334,524 (153) 334,371 0.05%
Loans not recorded at fair value (1) 1,771,465 (26,797) 1,744,668 1.51%
--------- ------- --------- ----
Total portfolio loans $2,276,517 $(32,875) $2,243,642 1.44%
========== ======== ========== ====
(1) Includes $17,133 of loans covered by loss-share agreements not recorded at fair value at December 31, 2013.
Nonperforming assets, which consist of nonaccrual loans, loans 90 days or more past due and OREO, were 2.74% of total assets at December 31, 2013, compared to 3.93% at December 31, 2012. Nonperforming assets not covered by loss-share were 1.52% of total assets not covered by loss-share as of December 31, 2013, compared to 1.82% at December 31, 2012. The covered assets are covered by FDIC loss-share agreements that provide 80% protection on those assets and are being carried at estimated fair value.
Asset Quality Information
(dollars in thousands; unaudited)
December 31, September 30, June 30, March 31, December 31,
2013
2013 2013 2013 2012
---- ---- ---- ----
Nonaccrual loans not covered by loss-share $17,114 $21,262 $22,276 $27,212 $22,442
Nonaccrual loans covered by loss-share 23,745 29,892 44,317 52,274 46,981
OREO not covered by loss-share 28,833 29,271 29,143 31,177 28,811
OREO covered by loss-share 18,773 18,401 17,668 20,709 23,102
90 days past due not covered by loss-share - 83 823 - -
90 days past due covered by loss-share - 1 - - -
--- --- --- --- ---
Total nonperforming assets $88,465 $98,910 $114,227 $131,372 $121,336
======= ======= ======== ======== ========
Nonperforming assets not covered by loss-share $45,947 $50,616 $52,242 $58,389 $51,253
======= ======= ======= ======= =======
Total assets $3,229,576 $2,968,709 $2,929,636 $2,929,191 $3,083,788
Total assets less covered assets 3,023,142 2,748,509 2,692,686 2,670,691 2,811,756
Total portfolio loans 2,276,517 2,100,042 2,048,941 2,031,149 2,035,258
Total accruing loans 2,235,658 2,048,888 1,982,348 1,951,663 1,965,835
Total portfolio loans less fair value loans 1,771,465 1,696,484 1,586,326 1,536,944 1,458,654
Total portfolio loans less covered loans 2,088,856 1,898,243 1,829,659 1,793,358 1,786,328
Total allowance for loan losses 32,875 32,358 32,859 38,148 40,292
Allowance for loans not covered by loss-share 26,797 24,721 24,218 24,966 25,028
Allowance for loans covered by loss-share 5,925 7,403 8,641 13,182 15,264
Allowance for acquired loans not covered by loss-share 153 234 - - -
Ratio of nonperforming assets to total assets 2.74% 3.33% 3.90% 4.48% 3.93%
Not covered by loss-share 1.52% 1.84% 1.94% 2.19% 1.82%
Ratio of nonperforming loans to total portfolio loans 1.79% 2.44% 3.29% 3.91% 3.41%
Not covered by loss-share 0.82% 1.12% 1.26% 1.52% 1.26%
Ratio of allowance for loan losses to total portfolio loans 1.44% 1.54% 1.60% 1.88% 1.98%
Ratio of allowance not covered by loss-share 1.51% 1.46% 1.53% 1.62% 1.72%
to portfolio loans not recorded at fair value
Net charge-offs, QTD $380 $4,788 $7,351 $8,172 $6,269
Net charge-offs, non-covered portion, QTD (1) 482 2,876 3,949 4,604 3,792
Ratio of net charge-offs, non-covered portion,
QTD to average portfolio loans, annualized (1) 0.08% 0.55% 0.78% 0.92% 0.78%
Loans restructured/modified not included in above,
(not 90 days past due or on nonaccrual) $16,770 $13,802 $12,639 $10,896 $35,889
(1) Non-covered portion represents the Company's non-covered charge-offs and the 20% portion of the charge-offs relating to loans covered under loss-share agreements.
Nonaccrual loans not covered by loss-share agreements totaled $17.1 million at December 31, 2013, a decrease of 23.7% from $22.4 million at December 31, 2012. Excluding loans covered by loss-share agreements, nonperforming loans as a percentage of total loans was 0.82% as of December 31, 2013, as compared to 1.26% as of December 31, 2012. Nonaccrual loans covered by loss-share agreements totaled $23.7 million as of December 31, 2013, a decrease of 49.5% from $47.0 million at December 31, 2012. The decrease is due to the Company's sustained efforts in resolving acquired nonperforming loans.
Troubled debt restructurings ("TDRs") were $18.8 million as of December 31, 2013, of which $2.9 million was covered under loss-share. Of the $18.8 million of TDRs, $16.8 million are performing under the terms of the restructured agreements, as compared to $44.9 million of TDRs as of December 31, 2012, of which $35.9 million were performing under the terms of the restructured agreements. The decrease in performing TDRs from December 31, 2012 was primarily due to a significant amount of restructurings that are no longer required to be reported as TDRs due to contractual performance over a passage of time. The increase in TDRs from September 30, 2013 to December 31, 2013 was due to one large TDR that was previously in nonaccrual status returning to accrual status during the fourth quarter.
OREO at December 31, 2013 totaled $47.6 million, which is a decrease of 8.3% from $51.9 million at December 31, 2012. At December 31, 2013, the carrying value of OREO covered by loss-share agreements was $18.8 million, a decrease of 18.7% from $23.1 million at December 31, 2012. OREO not covered by loss-share agreements totaled $28.8 million at December 31, 2013, unchanged from December 31, 2012. The Company has sold $7.7 million and $32.8 million of OREO properties during the quarter and year ended December 31, 2013, respectively, which was offset by $4.5 million and $31.3 million of additions to OREO. These additions include $4.2 million of OREO acquired from Randolph. For the quarter and year ended December 31, 2013, the Company recorded valuation adjustments of $0.7 million and $4.2 million, respectively, a decrease from valuation adjustments of $2.7 million and $7.1 million for the quarter and year ended December 31, 2012, respectively.
Capital Position
At December 31, 2013, shareholders' equity was $271.3 million, a decrease of 3.9% from shareholders' equity of $282.2 million as of December 31, 2012. In April 2013, the Company closed on a $30.0 million term loan and used the proceeds to redeem the $31.3 million of Series A preferred stock. As a result of this redemption, the Company recorded $356,000 of additional discount accretion during the second quarter of 2013. After this redemption and the conversion of 1,804,566 shares of Series B preferred stock to non-voting common stock in February 2013, the Company no longer has any preferred stock issued or outstanding. As part of the Randolph acquisition the Company issued 726,634 shares of common stock.
All of the Bank's and Company's capital ratios are estimated to exceed the minimum thresholds established for a well-capitalized bank by regulatory measures.
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 $3.23 billion in assets. Bank of North Carolina provides a complete line of banking and financial services to individuals and businesses through its 39 banking offices in North and South Carolina. The Bank's eight locations in South Carolina operate as BNC Bank. Bank of North Carolina is insured by the FDIC and is an equal housing lender. BNC Bancorp's stock is traded and 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 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. See the attached tabular disclosures for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.
"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 Bancorp and the Bank. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of BNC Bancorp, 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) the economic recovery may face challenges causing its momentum to falter or a further recession; (ii) expected cost savings and other benefits anticipated in connection with our acquisitions may not be fully realized or realized within the expected time frame; (iii) our ability to integrate acquisitions and retain existing customers and attract new ones; and (iv) adverse changes in credit quality trends. Additional factors affecting BNC Bancorp and the Bank are discussed in BNC Bancorp'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 Bancorp does not undertake a duty to update any forward-looking statements made in this press release.
PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except per share data, shares in thousands)
(Unaudited)
For the
Three Months Ended
------------------
December 31, December 31, % Change
2013 2012
---- ----
SUMMARY INCOME STATEMENTS
Interest income $37,836 $32,224 17.4 %
Interest expense 7,964 8,119 (1.9)
--------------
Net interest income 29,872 24,105 23.9
Provision for loan losses 2,435 5,520 (55.9)
--------------
Net interest income after provision for loan losses 27,437 18,585 47.6
Non-interest income 5,178 10,394 (50.2)
Non-interest expense 28,628 24,871 15.1
--------------
Income before income tax expense (benefit) 3,987 4,108 (3.0)
Income tax expense (benefit) 716 (940) (176.2)
--------------
Net income 3,271 5,048 (35.2)
Preferred stock dividends and discount accretion - 601 (100.0)
------------------------------------
Net income available to common shareholders $3,271 $4,447 (26.4)
====================================
PER SHARE DATA
Earnings per share, basic $0.12 $0.19
Earnings per share, diluted 0.12 0.19
Operating earnings per share, diluted (1) 0.21 (0.00)
Tangible common book value per share (1) 8.66 8.20
Weighted average participating common shares:
Basic 27,293 24,272
Diluted 27,382 24,277
Period-end number of shares:
Common 27,303 24,650
Convertible preferred - 1,805
PERFORMANCE RATIOS
Return on average assets 0.41% 0.63%
Operating return on average assets (1) 0.71% -0.01%
Return on average common equity 4.79% 8.16%
Return on average tangible common equity (1) 5.90% 9.76%
Operating return on average tangible common equity (1) 9.98% 0.13%
Net interest margin (FTE) 4.39% 4.09%
Net interest margin w/o hedging expense (FTE) 4.76% 4.43%
Average equity to average assets 8.48% 9.43%
Allowance for loan losses as a % of portfolio loans 1.44% 1.98%
1.51% 1.72%
Allowance not covered by loss-share to portfolio loans not recorded
at fair value
Nonperforming assets to total assets, end of period 2.74% 3.93%
1.52% 1.82%
Not covered by loss share
Ratio of net charge-offs, with covered portion, to
0.08% 0.78%
average total loans, annualized
SELECTED FINANCIAL DATA
Gain on sale of investment securities, net $10 $651
Bargain purchase gain on acquisition - 4,972
Fair value accretion 4,208 3,086
Hedging instrument expense 2,700 2,133
OREO valuation adjustments 713 2,734
Transaction-related expenses 3,884 1,406
(1) See Reconciliation of Non-GAAP Financial Measures table for additional details.
PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except per share data, shares in thousands)
(Unaudited)
For the Year Ended
------------------
December 31, December 31, % Change
2013 2012
---- ----
SUMMARY INCOME STATEMENTS
Interest income $138,670 $113,515 22.2 %
Interest expense 30,063 32,891 (8.6)
--------------
Net interest income 108,607 80,624 34.7
Provision for loan losses 12,188 22,737 (46.4)
--------------
Net interest income after provision for loan losses 96,419 57,887 66.6
Non-interest income 22,806 33,138 (31.2)
Non-interest expense 97,933 82,272 19.0
--------------
Income before income tax expense (benefit) 21,292 8,753 143.3
Income tax expense (benefit) 4,045 (1,700) (337.9)
--------------
Net income 17,247 10,453 65.0
Preferred stock dividends and discount accretion 1,060 2,404 (55.9)
--------------
Net income available to common shareholders $16,187 $8,049 101.1
===================================
PER SHARE DATA
Earnings per share, basic $0.61 $0.48
Earnings per share, diluted 0.61 0.48
Operating earnings per share, diluted (1) 0.71 (0.19)
Tangible common book value per share (1) 8.66 8.20
Weighted average participating common shares:
Basic 26,683 17,595
Diluted 26,714 17,599
Period-end number of shares:
Common 27,303 24,650
Convertible preferred - 1,805
PERFORMANCE RATIOS
Return on average assets 0.54% 0.32%
Operating return on average assets (1) 0.63% -0.13%
Return on average common equity 6.28% 5.11%
Return on average tangible common equity (1) 7.50% 6.57%
Operating return on average tangible common equity (1) 8.79% -2.28%
Net interest margin (FTE) 4.29% 3.85%
Net interest margin w/o hedging expense (FTE) 4.66% 4.21%
Average equity to average assets 8.94% 8.37%
Allowance for loan losses as a % of portfolio loans 1.44% 1.98%
1.51% 1.72%
Allowance not covered by loss-share to portfolio loans not recorded
at fair value
Nonperforming assets to total assets, end of period 2.74% 3.93%
1.52% 1.82%
Nonperforming assets not covered by loss share
Ratio of net charge-offs, with covered portion, to
0.57% 1.09%
average total loans
SELECTED FINANCIAL DATA
Gain (loss) on sale of investment securities, net $(42) $3,026
Acquisition-related gain 719 -
Bargain purchase gain on acquisitions - 12,706
Fair value accretion 14,418 6,654
Additional accretion from redemption of Series A preferred stock 356 -
Hedging instrument expense 9,863 7,940
OREO valuation adjustments 4,175 7,078
Transaction-related expenses 5,768 5,212
(1) See Reconciliation of Non-GAAP Financial Measures table for additional details.
PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except per share data, shares in thousands)
(Unaudited) For the
Three Months Ended
------------------
December 31, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 2012
---- ---- ---- ---- ----
SUMMARY INCOME STATEMENTS
Interest income $37,836 $34,008 $33,675 $33,151 $32,224
Interest expense 7,964 7,372 7,364 7,363 8,119
-------------
Net interest income 29,872 26,636 26,311 25,788 24,105
Provision for loan losses 2,435 3,350 2,288 4,115 5,520
-------------
Net interest income after provision for loan losses 27,437 23,286 24,023 21,673 18,585
Non-interest income 5,178 5,824 5,602 6,202 10,394
Non-interest expense 28,628 22,430 23,759 23,116 24,871
-------------
Income before income tax expense (benefit) 3,987 6,680 5,866 4,759 4,108
Income tax expense (benefit) 716 1,650 1,199 480 (940)
-------------
Net income 3,271 5,030 4,667 4,279 5,048
Preferred stock dividends and discount accretion - - 531 529 601
----------------------------------
Net income available to common shareholders $3,271 $5,030 $4,136 $3,750 $4,447
==================================
Net interest income, as reported $29,872 $26,636 $26,311 $25,788 $24,105
1,956 1,818 1,718 1,673 1,533
Fully Taxable-Equivalent ("FTE") adjustment
Net interest income, FTE $31,828 $28,454 $28,029 $27,461 $25,638
========================
PER SHARE DATA
Earnings per share, basic $0.12 $0.19 $0.16 $0.14 $0.19
Earnings per share, diluted 0.12 0.19 0.16 0.14 0.19
Weighted average participating common shares:
Basic 27,293 26,502 26,475 26,464 24,272
Diluted 27,382 26,582 26,498 26,476 24,277
Period-end number of shares:
Common 27,303 26,526 26,479 26,472 24,650
Convertible preferred - - - - 1,805
PERFORMANCE RATIOS
Return on average assets 0.41% 0.68% 0.57% 0.51% 0.63%
Operating return on average assets (1) 0.71% 0.68% 0.58% 0.56% -0.01%
Return on average common equity 4.79% 7.81% 6.49% 6.12% 8.16%
Return on average tangible common equity (1) 5.90% 9.19% 7.70% 7.33% 9.76%
Operating return on average tangible common equity (1) 9.98% 9.26% 7.85% 7.97% 0.13%
Net interest margin (FTE) 4.39% 4.26% 4.32% 4.20% 4.09%
Net interest margin w/o hedging expense (FTE) 4.76% 4.65% 4.68% 4.54% 4.43%
Average equity to average assets 8.48% 8.67% 9.06% 9.61% 9.43%
Allowance for loan losses as a % of portfolio loans 1.44% 1.54% 1.60% 1.88% 1.98%
1.51% 1.46% 1.53% 1.62% 1.72%
Allowance not covered by loss-share to portfolio loans not recorded
at fair value
Nonperforming assets to total assets, end of period 2.74% 3.33% 3.90% 4.48% 3.93%
1.52% 1.84% 1.94% 2.19% 1.82%
Not covered by loss share
Ratio of net charge-offs, with covered portion, to
0.08% 0.55% 0.78% 0.92% 0.78%
average total loans, annualized
SELECTED FINANCIAL DATA
Gain (loss) on sale of investment securities, net $10 $ - $176 $(228) $651
Acquisition-related gain - - - 719 -
Bargain purchase gain on acquisitions - - - - 4,972
Fair value accretion 4,208 3,213 3,664 3,333 3,086
Additional accretion from redemption of Series A preferred stock - - 356 - -
Hedging instrument expense 2,700 2,625 2,333 2,205 2,133
OREO valuation adjustments 713 1,138 1,539 785 2,734
Transaction-related expenses 3,884 540 309 1,035 1,406
(1) See Reconciliation of Non-GAAP Financial Measures table for additional details.
PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands)
(Unaudited)
As of
-----
December 31, December 31, 2012 % Change
2013
----
SELECTED BALANCE SHEET DATA
Portfolio
loans:
Loans not
covered by
loss share $2,088,856 $1,786,328 16.9 %
Loans
covered by
loss share 187,661 248,930 (24.6)
Allowance
for loan
losses (32,875) (40,292) (18.4)
------- -------
Net
portfolio
loans 2,243,642 1,994,966 12.5
Loans held for
sale 30,899 57,414 (46.2)
Investment
securities 517,795 456,344 13.5
Total interest-
earning assets 2,908,847 2,747,702 5.9
Total assets 3,229,576 3,083,788 4.7
Deposits:
Non-
interest
bearing
deposits 324,532 275,605 17.8
Interest-
bearing
demand and
savings 1,299,399 1,221,089 6.4
Time
deposits 1,082,799 1,159,615 (6.6)
--------- ---------
Total
deposits 2,706,729 2,656,309 1.9
Borrowed funds 227,102 120,555 88.4
Total interest-
bearing
liabilities 2,609,299 2,501,259 4.3
Shareholders'
equity:
Preferred
equity - 47,878 (100.0)
Common
equity 268,024 228,937 17.1
Accumulated
other
comprehensive
income 3,305 5,429 (39.1)
----- -----
Total
shareholders'
equity 271,330 282,244 (3.9)
As of
-----
December 31, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 2012
---- ---- ---- ---- ----
SELECTED BALANCE SHEET DATA
Portfolio loans:
Loans not covered by loss
share $2,088,856 $1,898,243 $1,829,659 $1,793,358 $1,786,328
Loans covered by loss share 187,661 201,799 219,282 237,791 248,930
Allowance for loan losses (32,875) (32,358) (32,859) (38,148) (40,292)
------- ------- ------- ------- -------
Net portfolio loans 2,243,642 2,067,684 2,016,082 1,993,001 1,994,966
Loans held for sale 30,899 17,732 39,954 46,134 57,414
Investment securities 517,795 500,449 466,079 476,982 456,344
Total interest-earning assets 2,908,847 2,658,902 2,610,415 2,605,429 2,747,702
Total assets 3,229,576 2,968,709 2,929,636 2,929,191 3,083,788
Deposits:
Non-interest bearing deposits 324,532 299,670 275,984 267,458 275,605
Interest-bearing demand and
savings 1,299,399 1,172,512 1,152,779 1,171,484 1,221,089
Time deposits 1,082,799 963,679 999,552 1,069,207 1,159,615
--------- ------- ------- --------- ---------
Total deposits 2,706,730 2,435,861 2,428,315 2,508,149 2,656,309
Borrowed funds 227,102 256,554 227,697 117,774 120,555
Total interest-bearing liabilities 2,609,299 2,392,745 2,380,028 2,358,465 2,501,259
Shareholders' equity:
Preferred equity - - - 30,855 47,878
Common equity 268,024 256,048 251,872 248,747 228,937
Accumulated other
comprehensive income 3,305 1,745 2,573 4,453 5,429
----- ----- ----- ----- -----
Total shareholders' equity 271,330 257,793 254,445 284,055 282,244
PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands)
(Unaudited)
For the Year Ended
------------------
December 31, December 31, 2012 % Change
2013
----
SELECTED AVERAGE BALANCE SHEET DATA
Portfolio loans:
Loans not covered by loss
share $1,885,872 $1,503,120 25.5 %
Loans covered by loss share 219,093 286,005 (23.4)
------- -------
Net portfolio loans 2,104,965 1,789,125 17.7
Investment securities 483,984 353,040 37.1
Total interest-earning assets 2,696,475 2,244,423 20.1
Total assets 3,009,367 2,544,718 18.3
Deposits:
Non-interest bearing deposits 290,765 188,569 54.2
Interest-bearing demand and
savings 1,197,958 997,951 20.0
Time deposits 1,038,088 1,004,644 3.3
--------- ---------
Total deposits 2,526,811 2,191,164 15.3
Borrowed funds 193,771 124,223 56.0
Total interest-bearing liabilities 2,429,817 2,126,818 14.3
Shareholders' equity 269,123 212,955 26.4
For the Three Month Period Ended
--------------------------------
December 31, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 2012
---- ---- ---- ---- ----
SELECTED AVERAGE BALANCE SHEET DATA
Loans:
Loans not covered by loss
share $2,073,442 $1,862,366 $1,810,382 $1,794,323 $1,673,506
Loans covered by loss share 194,730 210,541 228,536 243,360 267,632
------- ------- ------- ------- -------
Total loans 2,268,172 2,072,907 2,038,918 2,037,683 1,941,138
Investment securities 515,296 484,959 473,301 461,781 400,482
Total interest-earning assets 2,878,999 2,650,389 2,604,275 2,650,229 2,495,019
Total assets 3,193,141 2,945,832 2,916,204 2,980,654 2,806,031
Deposits:
Non-interest bearing deposits 338,454 288,887 272,088 262,821 225,419
Interest-bearing demand and
savings 1,291,291 1,172,608 1,150,213 1,176,740 1,109,651
Time deposits 1,035,759 979,871 1,021,098 1,117,159 1,059,670
--------- ------- --------- --------- ---------
Total deposits 2,665,504 2,441,366 2,443,398 2,556,720 2,394,740
Borrowed funds 235,303 228,336 189,308 120,496 126,007
Total interest-bearing liabilities 2,562,353 2,380,815 2,360,618 2,414,395 2,295,328
Shareholders' equity 270,702 255,524 264,201 286,388 264,643
LOAN MIX AND STRATIFICATION STATISTICS
BNC BANCORP
(Dollars in millions)
(Unaudited)
As of
-----
December 31, December 31, % Change
2013 2012
---- ----
Loans Not Covered Under Loss
Share Agreements:
Construction,
A&D, and
Land $261.3 $196.5 33.0
------------- ------ ------ ----
Residential
Construction 32.5 27.3 19.1
Presold 18.2 15.8 15.2
Speculative 14.3 11.5 24.4
Loan size -over $400,000 1.8 3.7 (51.4)
Loan size -$200,000 to
$400,000 4.8 2.9 65.5
Loan size -under $200,000 7.7 4.9 57.1
Commercial
Construction 132.0 76.1 73.5
Loan size -$5 million and
over 25.4 6.7 279.1
Loan size -$3 million to $5
million 28.9 6.7 331.3
Loan size -$1 million to $3
million 54.2 42.7 26.9
Loan size -under $1 million 23.5 20.0 17.5
Residential
and
Commercial
A&D 7.9 18.1 (56.4)
Loan size -$3 million to $5
million - 4.4 100.0
Loan size -$1 million to $3
million 3.5 9.1 (61.5)
Loan size -under $1 million 4.4 4.6 (4.4)
Land 88.9 75.0 18.5
Residential Buildable Lots 22.1 23.3 (5.2)
Commercial Buildable Lots 11.8 10.2 15.7
Land Held for Development 32.9 24.2 36.0
Raw and Agricultural Land 22.1 17.3 27.8
Commercial
Real Estate $1,244.0 $930.9 33.6
------------ -------- ------ ----
Multi-
Family 61.6 47.5 29.7
Churches 53.5 42.8 25.0
Retail 911.8 674.3 35.2
Owner Occupied 263.8 196.0 34.6
Investment 648.0 478.3 35.5
Loan size -$5 million to $9
million 138.5 101.2 36.9
Loan size -$3 million to $5
million 113.5 79.4 43.0
Loan size -$1 million to $3
million 250.3 186.6 34.1
Loan size -under $1 million 145.7 111.1 31.1
Industrial 217.1 166.3 30.6
Owner Occupied 119.0 93.0 28.0
Investment 98.1 73.3 33.8
Loan size -$5 million and
over 6.0 - 100.0
Loan size -$3 million to $5
million 11.2 4.1 173.2
Loan size -$1 million to $3
million 40.8 37.6 8.5
Loan size -under $1 million 40.1 31.6 26.9
LOAN MIX AND STRATIFICATION STATISTICS
BNC BANCORP
(Dollars in millions)
(Unaudited)
Trends
------
December 31, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 2012
---- ---- ---- ---- ----
Loans Not Covered Under Loss Share Agreements:
Construction, A&D, and Land $261.3 $225.5 $211.3 $232.3 $196.5
--------------------------- ------ ------ ------ ------ ------
Residential Construction 32.5 28.6 32.6 31.1 27.3
Presold 18.2 16.0 18.7 18.6 15.8
Speculative 14.3 12.6 13.9 12.5 11.5
Loan size - over $400,000 1.8 2.2 3.3 4.3 3.7
Loan size - $200,000 to $400,000 4.8 4.9 5.5 3.2 2.9
Loan size - under $200,000 7.7 5.5 5.1 5.0 4.9
Commercial Construction 132.0 106.1 76.2 92.9 76.1
Loan size - $5 million and over 25.4 18.1 12.5 12.5 6.7
Loan size - $3 million to $5 million 28.9 15.4 10.7 11.0 6.7
Loan size - $1 million to $3 million 54.2 51.7 33.3 50.0 42.7
Loan size - under $1 million 23.5 20.9 19.7 19.4 20.0
Residential and Commercial
A&D 7.9 9.4 17.6 15.1 18.1
Loan size - $3 million to $5 million - - 4.1 - 4.4
Loan size - $1 million to $3 million 3.5 3.6 6.6 8.8 9.1
Loan size - under $1 million 4.4 5.8 6.9 6.3 4.6
Land 88.9 81.4 84.9 93.2 75.0
Residential Buildable Lots 22.1 20.8 26.1 31.4 23.3
Commercial Buildable Lots 11.8 13.4 17.7 18.9 10.2
Land Held for Development 32.9 25.2 21.9 25.1 24.2
Raw and Agricultural Land 22.1 22.0 19.2 17.8 17.3
Commercial Real Estate $1,244.0 $1,165.2 $1,109.8 $1,050.6 $930.9
---------------------- -------- -------- -------- -------- ------
Multi-Family 61.6 58.6 59.2 48.6 47.5
Churches 53.5 50.9 51.5 49.6 42.8
Retail 911.8 851.2 804.3 757.2 674.3
Owner Occupied 263.8 243.4 236.9 237.4 196.0
Investment 648.0 607.8 567.4 519.8 478.3
Loan size - $5 million to $9 million 138.5 135.4 95.1 89.0 101.2
Loan size - $3 million to $5 million 113.5 98.6 90.3 82.7 79.4
Loan size - $1 million to $3 million 250.3 238.3 242.4 215.5 186.6
Loan size - under $1 million 145.7 135.5 139.6 132.6 111.1
Industrial 217.1 204.5 194.8 195.2 166.3
Owner Occupied 119.0 113.2 101.5 105.2 93.0
Investment 98.1 91.3 93.3 90.0 73.3
Loan size - $5 million and over 6.0 6.1 6.0 6.2 -
Loan size - $3 million to $5 million 11.2 8.3 11.5 4.0 4.1
Loan size - $1 million to $3 million 40.8 38.7 35.8 41.7 37.6
Loan size - under $1 million 40.1 38.2 40.0 38.1 31.6
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
BNC BANCORP
(Dollars in thousands, except per share data, shares in thousands)
(Unaudited)
For the Three Months Ended
--------------------------
Operating Earnings (Loss) per Share, Diluted (2) December 31, September 30, December 31,
2013 2013 2012
---- ---- ----
Net income available to common shareholders (GAAP) $3,271 $5,030 $4,447
Add: Transaction-related charges, net of tax 2,447 340 893
Less: Insurance settlement, net of tax - 302 -
Bargain purchase gain on acquisition (nontaxable) - - 4,972
Gain on sale of investment securities, net of tax 6 - 413
--- --- ---
Operating earnings (loss) (non-GAAP) $5,712 $5,068 $(45)
------ ------ ----
Weighted average fully diluted shares outstanding 27,382 26,582 24,277
------ ------ ------
Operating earnings (loss) per share, diluted (non-GAAP) $0.21 $0.19 $(0.00)
===== ===== ======
For the Year Ended
------------------
Operating Earnings (Loss) per Share, Diluted (2) December 31, December 31,
2013 2012
---- ----
Net income available to common shareholders (GAAP) $16,187 $8,049
Add: Transaction-related charges, net of tax 3,634 3,310
Less: Insurance settlement, net of tax 302 -
Acquisition-related gain, net of tax 453 -
Bargain purchase gain on acquisitions (nontaxable) - 12,706
Gain (loss) on sale of investment securities, net of tax (26) 1,922
--- -----
Operating earnings (loss) (non-GAAP) $19,092 $(3,269)
------- -------
Weighted average fully diluted shares outstanding 26,714 17,599
------ ------
Operating earnings (loss) per share, diluted (non-GAAP) $0.71 $(0.19)
===== ======
For the Three Months Ended
--------------------------
Adjusted Non-interest Income (2) December 31, September 30, December 31,
2013 2013 2012
---- ---- ----
Non-interest income (GAAP) $5,178 $5,824 $10,394
Less: Insurance settlement - 479 -
Bargain purchase gain on acquisitions - - 4,972
Gain on sale of investment securities 10 - 651
Adjusted non-interest income (non-GAAP) $5,168 $5,345 $4,771
====== ====== ======
For the Year Ended
------------------
Adjusted Non-interest Income (2) December 31, December 31,
2013 2012
---- ----
Non-interest income (GAAP) $22,806 $33,138
Less: Insurance settlement 479 -
Acquisition-related gain 719 -
Bargain purchase gain on acquisitions - 12,706
Gain (loss) on sale of investment securities (42) 3,026
Adjusted non-interest income (non-GAAP) $21,650 $17,406
======= =======
For the Three Months Ended
--------------------------
Adjusted Non-interest Expense (2) December 31, September 30, December 31,
2013 2013 2012
---- ---- ----
Non-interest expense (GAAP) $28,628 $22,430 $24,871
Less: Transaction-related expenses 3,884 540 1,406
Adjusted non-interest expense (non-GAAP) $24,744 $21,890 $23,465
======= ======= =======
For the Year Ended
------------------
Adjusted Non-interest Expense (2) December 31, December 31,
2013 2012
---- ----
Non-interest expense (GAAP) $97,933 $82,272
Less: Transaction-related expenses 5,768 5,212
Adjusted non-interest expense (non-GAAP) $92,165 $77,060
======= =======
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
BNC BANCORP
(Dollars in thousands, except per share data, shares in thousands)
(Unaudited)
Tangible Common Book Value per Share (3) December 31, December 31,
2013 2012
---- ----
Shareholders' equity (GAAP) $271,330 $282,244
Less: Preferred stock - 47,878
Intangible assets 34,966 32,193
------ ------
Tangible common shareholders equity (non-GAAP) $236,363 $202,173
-------- --------
Common shares outstanding 27,303 24,651
------ ------
Tangible common book value per share (non-GAAP) $8.66 $8.20
===== =====
For the Three Months Ended
--------------------------
Return on Average Tangible Common Equity (3) December 31, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 2012
---- ---- ---- ---- ----
Net income available to common shareholders (GAAP) $3,271 $5,030 $4,136 $3,750 $4,447
Plus: Amortization of intangibles, net of tax 241 160 160 160 105
--- --- --- --- ---
Tangible net income available to common shareholders (non-GAAP) $3,512 $5,190 $4,296 $3,910 $4,552
------ ------ ------ ------ ------
Average common shareholders equity $270,702 $255,524 $255,624 $248,548 $216,825
Less: Average intangible assets 34,045 31,535 31,798 32,068 31,235
------ ------ ------ ------ ------
Average tangible common shareholders' equity (non-GAAP) $236,657 $223,988 $223,826 $216,480 $185,590
-------- -------- -------- -------- --------
Return on average tangible common equity (non-GAAP) 5.89% 9.19% 7.70% 7.33% 9.76%
==== ==== ==== ==== ====
For the Year Ended
------------------
Return on Average Tangible Common Equity (3) December 31, December 31,
2013 2012
---- ----
Net income available to common shareholders (GAAP) $16,187 $8,049
Plus: Amortization of intangibles, net of tax 723 348
--- ---
Tangible net income available to common shareholders (non-GAAP) $16,910 $8,397
------- ------
Average common shareholders equity $257,678 $157,471
Less: Average intangible assets 32,361 29,581
Average tangible common shareholders' equity (non-GAAP) $225,317 $127,890
-------- --------
Return on average tangible common equity (non-GAAP) 7.50% 6.57%
==== ====
(2) Management uses these measures in their analysis of the Company's performance and believes these 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.
(3) Management believes investors use this measure to evaluate the Company's performance.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
BNC BANCORP
(Dollars in thousands, except per share data, shares in thousands)
(Unaudited)
For the Three Months Ended
--------------------------
Operating Return on Average Assets (2) December 31, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 2012
---- ---- ---- ---- ----
Net income available to common shareholders (GAAP) $3,271 $5,030 $4,136 $3,750 $4,447
Plus: Transaction-related expenses, net of tax 2,447 340 195 652 893
Less: Insurance settlement, net of tax - 302 - - -
Acquisition-related gain, net of tax - - - 453 -
Bargain purchase gain on acquisition (nontaxable) - 4,972
Gain (loss) on sale of investment securities, net of tax 6 - 111 (144) 413
Operating earnings (loss) (non-GAAP) $5,712 $5,068 $4,220 $4,093 $(45)
------ ------ ------ ------ ----
Average assets $3,193,141 $2,945,832 $2,916,204 $2,980,654 $2,806,031
---------- ---------- ---------- ---------- ----------
Operating return on average assets (non-GAAP) 0.71% 0.68% 0.58% 0.56% -0.01%
==== ==== ==== ==== =====
For the Year Ended
------------------
Operating Return on Average Assets (2) December 31, December 31,
2013 2012
---- ----
Net income available to common shareholders (GAAP) $16,187 $8,049
Plus: Transaction-related expenses, net of tax 3,634 3,310
Less: Insurance settlement, net of tax 302 -
Acquisition-related gain, net of tax 453 -
Bargain purchase gain on acquisitions (nontaxable) - 12,706
Gain (loss) on sale of investment securities, net of tax (26) 1,922
Operating earnings (loss) (non-GAAP) $19,092 $(3,269)
------- -------
Average assets $3,009,367 $2,544,718
---------- ----------
Operating return on average assets (non-GAAP) 0.63% -0.13%
==== =====
For the Three Months Ended
--------------------------
Operating Return on Average Tangible Common Equity (2) December 31, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 2012
---- ---- ---- ---- ----
Net income available to common shareholders (GAAP) $3,271 $5,030 $4,136 $3,750 $4,447
Plus: Amortization of intangibles, net of tax 241 160 160 160 105
Transaction-related expenses, net of tax 2,447 340 195 652 893
Less: Insurance settlement, net of tax - 302 - - -
Acquisition-related gain, net of tax - - - 453 -
Bargain purchase gain on acquisition (nontaxable) - - - - 4,972
Gain (loss) on sale of investment securities, net of tax 6 - 111 (144) 413
--- --- --- ---- ---
Operating tangible net income available to common shareholders (non-GAAP) $5,953 $5,229 $4,380 $4,253 $59
------ ------ ------ ------ ---
Average common shareholders equity $270,702 $255,524 $255,624 $248,548 $216,825
Less: Average intangible assets 34,045 31,535 31,798 32,068 31,235
------ ------ ------ ------ ------
Average tangible common shareholders' equity (non-GAAP) $236,657 $223,989 $223,826 $216,480 $185,590
-------- -------- -------- -------- --------
Operating return on average tangible common equity (non-GAAP) 9.98% 9.26% 7.85% 7.97% 0.13%
==== ==== ==== ==== ====
For the Year Ended
------------------
Operating Return on Average Tangible Common Equity (2) December 31, December 31,
2013 2012
---- ----
Net income available to common shareholders (GAAP) $16,187 $8,049
Plus: Amortization of intangibles, net of tax 723 348
Transaction-related expenses, net of tax 3,634 3,310
Less: Insurance settlement, net of tax 302 -
Acquisition-related gain, net of tax 453 -
Bargain purchase gain on acquisitions (nontaxable) - 12,706
Gain (loss) on sale of investment securities, net of tax (26) 1,922
Operating tangible net income (loss) available to common shareholders (non-GAAP) $19,815 $(2,920)
------- -------
Average common shareholders equity $257,678 $157,471
Less: Average intangible assets 32,361 29,581
Average tangible common shareholders' equity (non-GAAP) $225,317 $127,890
-------- --------
Operating return on average tangible common equity (non-GAAP) 8.79% -2.28%
==== =====
(2) Management uses these measures in their analysis of the Company's performance and believes these 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.
SOURCE BNC Bancorp
