BNC BANCORP 
By THOMASVILLE, N.C., July 29, 2011 /PRNewswire/ -- BNC Bancorp (NASDAQ: BNCN) ("BNC"), parent company for Bank of North Carolina ("Bank") today reported financial results for the quarter ended June 30, 2011. For the second quarter of 2011, net income available to common shareholders was $992,000, or $0.10 per diluted share, compared to $917,000, or $.09 per diluted share, and $11.2 million, or $1.41 per diluted share, in the first quarter of 2011 and second quarter of 2010, respectively. The second quarter of 2010 includes $11.8 million of after-tax gains from a FDIC assisted acquisition.
(Logo: http://photos.prnewswire.com/prnh/20030917/BNCLOGO )
For the six months ended June 30, 2011, net income available to common shareholders was $1.9 million, or $0.19 per diluted share, compared to $12.1 million, or $1.59 per diluted share reported for the same period in 2010. As noted above, the 2010 results include the one-time gain from the FDIC assisted transaction.
Total assets at June 30, 2011 were $2.15 billion, compared to $2.16 billion at both the ends of the first quarter of 2011 and second quarter of 2010.
At June 30, 2011, the Bank's Tier 1 leverage ratio was 7.61%, Tier 1 risk-based capital ratio was 11.13%, and total risk-based capital ratio was 12.82%. The Bank and the Company have a high concentration of assets in the 20% risk-weighting category, primarily consisting of government agency and municipal securities with a fair value of $316 million, a $61 million indemnification receivable from the FDIC, and $284 million of loans covered by the FDIC loss-share agreement.
W. Swope Montgomery, Jr., President and CEO, noted, "We are pleased with the results for the second quarter. The core earnings power of our Company continues to improve, non-covered loans are growing at a rate in excess of 10%, and early stage credit delinquencies are trending back to more normal levels. While many in our industry are struggling with top line growth, we are very pleased that our investments over the past two years in new markets and support infrastructure continue to drive gains in both net interest income and core loans. The receptions to our recent entries into the Charlotte and Raleigh markets have been overwhelming, with deposit and loan generation well above plan, and a loan pipeline of over $80 million in each market. Our investment in regional leadership, strong central and regional credit departments, and experienced and seasoned teams of bankers in each of these markets is providing an engine for current and future loan growth."
Montgomery continued, "We are also excited about the prospects for the two newest areas of the Company - a more robust and scalable mortgage platform, and an SBA loan origination department. In each of these areas, the quality of the leadership, and teams they have assembled, makes the two year search process worth the time and commitment. While both of these departments were still in their development stage through most of the second quarter, we are confident they should contribute significantly in the third quarter and beyond to enhance and diversify our non-interest income sources."
Highlights June 30, 2011 versus March 31, 2011:
-- Net income available to common shareholders increased $.01 to $.10 per
share
-- Pre-tax pre-credit (FTE) core earnings power remained unchanged at
$7.2 million(PTPC also includes valuation adjustments and direct
costs to manage nonperforming assets)
-- Net interest income increased to $16.8 million, an $88,000 increase
-- Net interest margin remained stable, declining by 3 basis points to
3.84%
-- Performing non-covered loan portfolio -- 30-89 day past dues declined
from 1.16% to 0.50% during the quarter
-- Performing covered loan portfolio -- 30-89 day past dues declined from
13.2% to 2.4% over the past year.
-- Special mention or watch credits in the non-covered portfolio declined
to 5.2% at the end of June 2011, down from 10.5% one year earlier.
-- Total loans remained stable at $1.53 billion
-- Total accruing loans increased $9.2 million, a 2.6% annualized rate
-- Non-covered portfolio loans increased $17.6 million, a 5.7%
annualized rate
-- Non-covered and accruing portfolio increased despite $28.9 million
that was refinanced into the permanent commercial mortgage markets
-- Non-interest bearing demand deposits increased $12.4 million, a 42.8%
annualized rate
-- New mortgage platform became operational with 10 processing
professionals and 23 seasoned originators
-- New SBA division became operational, with an existing pipeline of $8.2
million
-- While in the development stage, the mortgage and SBA division reported a
combined loss of $529,000 during the second quarter. We anticipate both
areas to be at least breakeven in the third quarter based on current
pipelines.
The above results include the impact from the acquisition of Beach First during the second quarter of 2010. In connection with the 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", "covered assets" and "covered"), and beginning with the first dollar of loss incurred.
Additional Operating Highlights from Second Quarter
Since June 2010, total loans not covered by a loss-sharing agreement have increased by $121.1 million, or 10.8%, while the total portfolio, including loans covered by loss-sharing agreements, have increased $59.4 million, or 4.0%, to $1.53 billion. Growth in the non-covered portfolio was net of the $28.9 million in loans that were refinanced into the permanent commercial mortgage markets during the second quarter of 2011. At June 30, 2011, the Company's loan portfolio includes $283.7 million in covered loans being carried at fair value and $1.24 billion in loans that have a related allowance for loan losses and are not covered under loss share agreements.
Gross Loan Growth
(dollars in thousands; unaudited)
6/30/2011 3/31/2011 12/31/2010 9/30/2010 6/30/2010
--------- --------- ---------- --------- ---------
Total
loans $1,528,547 $1,528,727 $1,508,180 $1,475,735 $1,469,175
Loans
covered
by loss
share, at
fair
value 283,685 301,436 309,342 330,761 345,372
------- ------- ------- ------- -------
Loans not
covered
by loss
share $1,244,862 $1,227,291 $1,198,838 $1,144,974 $1,123,803
========== ========== ========== ========== ==========
Loan
growth
(quarter/
quarter):
Total
loans 0.0% 1.4% 2.2% 0.4% 0.7%
Loans not
covered
by loss
share 1.4% 2.4% 4.7% 1.9% 0.7%
Annual
growth of
non-
covered
loans 10.8%
Total deposits at June 30, 2011 were $1.85 billion, an increase of $16.0 million from June 30, 2010. While overall deposit growth continues to be an emphasis, the more important element is the increase in transactional account deposits. Over the one-year period, transactional accounts, which are comprised of non-interest bearing and interest-bearing demand accounts, increased $120.8 million, while time deposits decreased $104.8 million At June 30, 2011, time deposits were 47.9% of total deposits, compared to 54.0% and 48.4% at June 30, 2010 and March 31, 2011, respectively.
Total Deposit Growth
(dollars in thousands; unaudited)
6/30/2011 3/31/2011 12/31/2010 9/30/2010 6/30/2010
--------- --------- ---------- --------- ---------
Non-
interest
bearing
demand $128,694 $116,286 $107,547 $105,197 $104,328
Interest-
bearing
demand 835,967 849,392 841,062 786,498 739,542
Time
deposits 885,922 905,173 879,461 963,885 990,755
------- ------- ------- ------- -------
Total $1,850,583 $1,870,851 $1,828,070 $1,855,580 $1,834,625
========== ========== ========== ========== ==========
Growth
(Quarter/
Quarter) -1.1% 2.3% -1.5% 1.1% 35.8%
Operating Results
Net interest income for the second quarter of 2011 was $16.8 million, an increase of $1.2 million, or 7.5%, from the comparable period last year, an increase of $88,000 from the prior quarter. Taxable-equivalent net interest margin increased 22 basis points from the second quarter of 2010 to 3.84%. Compared to the first quarter of 2011, taxable-equivalent net interest margin decreased 3 basis points from 3.87%.
The Company's average yield on interest-earning assets decreased 4 basis points while the average rate on interest-bearing liabilities decreased 26 basis points from the second quarter of 2010. Compared to the first quarter of 2011, the Company's yield on average earning assets decreased by 11 basis points, while the yield on average interest-bearing liabilities decreased by 8 basis points.
Net interest income for the six months ended June 30, 2011 was $33.4 million, an increase of $6.3 million, or 23.2% from the comparable period last year. Taxable-equivalent net interest margin increased 31 basis points from the six months ended June 30, 2010 to 3.86%. Average interest-earning assets were $1.89 billion for the first six months of 2011, an increase of $207.9 million from the first six months of 2010.
Quarterly Average Yields / Costs (Tax-Equiv. Basis)
(unaudited)
6/30/2011 3/31/2011 12/31/2010 9/30/2010 6/30/2010
--------- --------- ---------- --------- ---------
Earning Asset Yield 5.55% 5.66% 5.60% 5.57% 5.59%
Cost of Int. Bearing
Liabilities 1.73% 1.81% 1.93% 1.83% 1.99%
Cost of Funds 1.67% 1.71% 1.83% 1.73% 1.89%
Net Interest Spread 3.82% 3.85% 3.67% 3.74% 3.60%
Net Interest Margin 3.84% 3.87% 3.71% 3.76% 3.62%
Non-interest income was $2.4 million for the second and first quarter of 2011, compared to $21.7 million for the year-ago quarter. Included in non-interest income for the second quarter of 2010 was $19.3 million of gain on acquisition from a FDIC assisted transaction. Excluding the acquisition gain and gains on sales of investment securities, non-interest income was $ 2.3 million for the current quarter, up 25.8% from the $1.8 million reported for the second quarter of 2010. The increases were primarily due to increases in service charges and fees of $107,000; increases in earnings on bank-owned life insurance of $192,000; and increases in brokerage activity of $164,000. Off-setting these increases were a decrease in mortgage fee income of $51,000. During the second quarter of 2011, the Company's original mortgage origination platform was terminated and replaced with a more robust platform that is expected to drive mortgage origination volume and fee income significantly higher starting in the third quarter of 2011. In comparison to the first quarter of 2011, excluding mortgage fee income, recurring non-interest income increased $147,000.
Non-interest income was $4.8 million for the six months ended June 30, 2011, compared to $23.1 million for the same period in 2010. Included in non-interest income for the six months ended June 30, 2010 was $19.3 million of gain on acquisition from a FDIC assisted transaction.
Non-interest expenses for the second quarter of 2011 increased $1.3 million compared to the same quarter a year ago, and were $161,000 higher than the first quarter of 2011. Loan, foreclosure and collection expenses increased by $746,000 compared to the same quarter in 2010, and were $160,000 lower than the first quarter of 2011. The higher level of loan, foreclosure and collection expense primarily relates to the write-down of other real estate owned properties and the on-going expenses relating to these properties. During the second quarter of 2011, the Company recorded $1.0 million of other real estate valuation adjustments. The Company's personnel costs have increased $1.3 million, or 21.4%, compared to the same quarter a year ago, and were $384,000 higher than the previous quarter. All of the increases in personnel costs are attributable to investments in the new mortgage and SBA lending platforms which, when fully-operational in the third quarter, are expected to contribute significantly to our long-term focus on enhancing noninterest income sources. Professional and other services and other expenses decreased by $684,000 and $329,000, respectively, primarily from costs associated with the acquisition during 2010. All other non-interest expense categories have seen nominal increases when compared to the same quarter a year ago.
Non-Interest Income / Non-Interest Expense
(dollars in thousands; unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
6/30/2011 3/31/2011 6/30/2010 6/30/2011 6/30/2010
--------- --------- --------- --------- ---------
Non-interest
income
Mortgage fees $243 $362 $294 $605 $551
Service charges 868 827 761 1,695 1,416
Investment
brokerage fees 227 157 63 384 67
Earnings on bank-
owned life ins 420 425 228 845 474
Gain on sale of
securities 79 57 587 136 604
Gain on
acquisition - - 19,289 - 19,289
Other 534 597 476 1,131 659
--- --- --- ----- ---
Total non-
interest income $2,371 $2,425 $21,698 $4,796 $23,060
====== ====== ======= ====== =======
Non-interest
expense
Salaries and
employee benefits $7,623 $7,239 $6,280 $14,862 $11,086
Occupancy and
equipment 1,511 1,572 1,468 3,083 2,359
Data processing
and supply 601 563 593 1,164 1,004
Advertising/
business
development 507 419 375 926 664
Professional and
other services 874 996 1,558 1,870 2,199
FDIC insurance
assessments 810 810 780 1,620 1,380
Loan, foreclosure
and collection 1,916 2,076 1,170 3,992 1,670
Other 1,051 1,057 1,380 2,108 2,129
----- ----- ----- ----- -----
Total $14,893 $14,732 $13,604 $29,625 $22,491
======= ======= ======= ======= =======
Asset Quality
Net charge-offs for the second quarter of 2011 were $4.0 million, or 1.04% of average loans annualized compared to $4.0 million, or 1.07% reported for the first quarter of 2011. Nonperforming assets not covered by loss share at June 30, 2011 were 3.05% of total assets, and were 6.60% including covered assets, compared to 3.03% and 6.54%, respectively, at March 31, 2011. The covered assets are covered by a FDIC loss-share agreement that provides 80% protection on those assets and are being carried at estimated fair value.
At June 30, 2011, the carrying value of loans and OREO covered by loss-share was $283.7 million and $23.3 million, respectively, with a corresponding indemnification receivable from the FDIC of $61.0 million. These carrying values reflect the Company's final valuations from its second quarter 2010 FDIC assisted acquisition.
Asset Quality Information
(dollars in thousands; unaudited)
6/30/2011 3/31/2011 12/31/2010
--------- --------- ----------
Nonaccrual loans not
covered by loss share $31,822 $34,047 $26,224
Nonaccrual loans covered
by loss share 62,259 69,377 64,753
OREO not covered by loss
share 24,289 21,663 23,912
OREO covered by loss
share 23,348 15,811 15,825
90 days past due not
covered by loss share - 124 44
90 days past due covered
by loss share - - 4,554
--- --- -----
Total nonperforming
assets $141,718 $141,022 $135,312
======== ======== ========
Nonperforming assets not
covered by loss share $56,111 $55,834 $50,180
======= ======= =======
Total assets $2,146,745 $2,157,280 $2,149,932
Total assets less
covered assets 1,839,712 1,840,033 1,824,765
Total loans 1,528,547 1,528,727 1,508,180
Total accruing loans 1,434,466 1,425,303 1,417,203
Total loans less covered
loans 1,244,862 1,227,291 1,198,838
Ratio of nonperforming
assets to total assets 6.60% 6.54% 6.29%
Not covered by loss
share 3.05% 3.03% 2.75%
Ratio of nonperforming
loans to total loans 6.15% 6.77% 6.34%
Not covered by loss
share 2.56% 2.78% 2.19%
Ratio of allowance for
loan losses to total
loans 1.53% 1.59% 1.65%
Not covered by loss
share 1.88% 1.98% 2.07%
Net charge-offs of
noncovered loans, QTD $3,985 $3,988 $6,006
Ratio of net charge-
offs to average loans
(annualized) 1.04% 1.07% 1.62%
Loans restructured/
modified not included
in above $30,036 $25,857 $5,107
(not past due or on
nonaccrual)
9/30/2010 6/30/2010
--------- ---------
Nonaccrual loans not
covered by loss share $10,603 $10,080
Nonaccrual loans covered
by loss share 77,150 70,641
OREO not covered by loss
share 26,050 21,728
OREO covered by loss
share 9,638 7,350
90 days past due not
covered by loss share - -
90 days past due covered
by loss share 23 1,361
--- -----
Total nonperforming
assets $123,464 $111,160
======== ========
Nonperforming assets not
covered by loss share $36,653 $31,808
======= =======
Total assets $2,180,049 $2,161,991
Total assets less
covered assets 1,839,650 1,809,269
Total loans 1,475,735 1,469,175
Total accruing loans 1,387,982 1,388,454
Total loans less covered
loans 1,144,974 1,123,803
Ratio of nonperforming
assets to total assets 5.66% 5.14%
Not covered by loss
share 1.99% 1.76%
Ratio of nonperforming
loans to total loans 5.95% 5.59%
Not covered by loss
share 0.93% 0.90%
Ratio of allowance for
loan losses to total
loans 1.28% 1.30%
Not covered by loss
share 1.64% 1.69%
Net charge-offs of
noncovered loans, QTD $5,655 $4,357
Ratio of net charge-
offs to average loans
(annualized) 1.55% 1.23%
Loans restructured/
modified not included
in above $7,479 $5,774
(not past due or on
nonaccrual)
During the second quarter of 2011, BNC recorded a provision for loan losses of $3.0 million, a decrease from the $3.5 million recorded during the first quarter of 2011. The allowance for loan losses was $23.4 million at June 30, 2011, and $24.3 million at March 31, 2011. Loan loss reserves to total period-end loans decreased from 1.59% and 1.65% reported at March 31, 2011 and December 31, 2010, respectively, to 1.53% at June 30, 2011. This decrease was a result of partially or fully reserved loans being charged-off during the quarter. Excluding the loans acquired in the FDIC-assisted transaction that were marked to fair value, loan loss reserves to period-end loans decreased from 1.98% and 2.07% reported at March 31, 2011 and December 31, 2010, respectively, to 1.88% at June 30, 2011. Management considers the loan loss reserve adequate to absorb credit losses inherent in the loan portfolio at June 30, 2011.
Nonaccrual loans not covered by loss share agreements totaled $31.8 million, a decrease of $2.2 million compared to $34.0 million at March 31, 2011. Loans migrating into nonaccrual status during the quarter totaled $9.4 million. Nonaccrual loans covered by loss-share totaled $62.3 million, a decrease of $7.1 million compared to $69.4 million at March 31, 2011. Loans migrating into nonaccrual status during the quarter that are covered by loss-share totaled $2.4 million.
Troubled Debt Restructures (TDR's) increased $1.0 million during the quarter to $39.9 million, of which $9.9 million is in nonaccrual status. At June 30, 2011, there was $2.2 million of TDR's covered under loss-share. The majority of the TDR portfolio consists of performing residential A&D and construction loans that were renewed at extended amortization terms or interest-only terms deemed to be concessionary in the current economic environment.
OREO not covered by loss share agreements totaled $24.3 million at June 30, 2011, an increase of $2.6 million from the $21.7 million reported at March 31, 2011. The change primarily consisted of $8.1 million in additions at fair value, $1.0 million in write-downs, and $5.0 million in sales. Of the $24.3 million in OREO at quarter-end, $12.8 million is either under contract for sale or under a scheduled lot takedown.
Commenting on asset quality, Montgomery noted, "Our posture of continuing to aggressively address problem credits, take the appropriate charges and pursue strategies for liquidation, has contributed to asset quality metric improvements. Pass rated credits continue to rise as a percentage of the portfolio as watch and special mention credits have decreased significantly. We remain committed to taking aggressive charges and positioning assets appropriately for liquidation. There continues to be elevated unemployment levels in several of our legacy markets, thus expansions into more diversified and healthy markets over the past two years is paying dividends. While we have significantly decreased our construction, land and A&D portfolio over the past several quarters, we still have exposure that requires considerable attention as we work to reposition properties for a successful outcome."
Capital Position
The Company continues to maintain strong capital ratios. Shareholders' equity was $157.6 million at June 30, 2011, a decrease of $6.6 million from June 30, 2010. Tangible common book value per share was $9.05 at June 30, 2011, a decrease from $9.82 at June 30, 2010 and an increase from $8.70 at March 31, 2011. Core tangible book value, which excludes the very volatile mark-to-market component, increased to $9.38 at June 30, 2011, up from the $9.31 at March 31, 2011. The mark-to-market components of equity increased from a net loss of $5.5 million at March 31, 2011 to a net loss position of $3.0 million at June 30, 2011. All of the loss position relates to the value of the interest rate cap on funding, which has declined in value at a more rapid rate than the appreciation in the marketable securities being hedged. Despite the mark-to-market decline, the hedged transaction continues to provide a positive spread in excess of 2.2% on $250 million. All of the Bank's and Company's capital ratios exceeded the minimum thresholds established for a well-capitalized bank by regulatory measures.
Montgomery noted, "We are pleased to share that BNC Bancorp has applied for approximately $40.0 million of capital under the Treasury Department's Small Business Lending Fund capital program ("SBLF"). If our application is approved by the Treasury Department, the SBLF proceeds would be used to redeem the $31.2 million of CPP preferred stock. The new SBLF capital program is structured to allow for the dividend rate to drop commensurate with the Company's increase in qualified small-business lending within our communities. Based on dollar and percentage growth in qualifying small business loan categories over the June 30, 2010 baseline calculation, if approved, we anticipate the dividend rate on the SBLF capital to be 1%."
On July 19, 2011, 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 August 26, 2011 to shareholders of record on August 12, 2011.
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 $2.15 billion in assets. Bank of North Carolina provides a complete line of banking and financial services to individuals and businesses through its 24 full-service banking offices in North and South Carolina. The Bank's six locations in the coastal areas of South Carolina operate 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 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 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) 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; (iii) the performance of our mortgage and SBA division; 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
June 30, June 30,
2011 2010 % Change
--------- --------- --------
SUMMARY STATEMENTS OF
OPERATIONS
Interest income $24,787 $24,829 -0.2 %
Interest expense 8,021 9,234 (13.1)
----- -----
Net interest income 16,766 15,595 7.5
Provision for loan losses 3,032 6,000 (49.5)
----- -----
Net interest income after
provision for loan losses 13,734 9,595 43.1
Non-interest income 2,371 21,698 (89.1)
Non-interest expense 14,893 13,604 9.5
------ ------
Income before income tax
expense (benefit) 1,212 17,689 (93.2)
Income tax expense
(benefit) (381) 5,956 (106.4)
---- -----
Net income 1,593 11,733 (86.4)
Preferred stock dividends
and discount accretion 601 502 19.7
--- ---
Net income available to
common shareholders $992 $11,231 (91.2)
==== =======
PER SHARE DATA
Earnings per share, basic $0.10 $1.42 -93.0%
Earnings per share, diluted 0.10 1.41 (92.9)
Tangible common book value
per share 9.05 9.82 (7.8)
Weighted average
participating common
shares:
Basic 10,869,868 7,957,725
Diluted 10,886,162 8,043,395
Period-end number of
shares:
Common 9,075,395 9,038,668
Convertible preferred 1,804,566 1,804,566
PERFORMANCE RATIOS
Return on average assets 0.30% 2.23%
Return on average common
equity 3.67% 40.96%
Return on average tangible
common equity 4.96% 55.35%
Net yield on earning assets
(taxable equivalent) 3.84% 3.62%
Average equity to average
assets 7.25% 6.75%
Allowance for loan losses
as a % of total loans 1.53% 1.30%
Nonperforming assets to
total assets, end of
period 6.60% 5.14%
Nonperforming
assets not
covered by
loss share 3.05% 1.76%
Ratio of net charge-offs
to average loans,
annualized 1.04% 1.23%
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except share and per share data)
(Unaudited)
Six Months Ended
June 30, June 30,
2011 2010 % Change
--------- --------- --------
SUMMARY STATEMENTS OF
OPERATIONS
Interest income $49,829 $44,101 13.0 %
Interest expense 16,385 16,962 (3.4)
------ ------
Net interest income 33,444 27,139 23.2
Provision for loan losses 6,532 8,946 (27.0)
----- -----
Net interest income after
provision for loan losses 26,912 18,193 47.9
Non-interest income 4,796 23,060 (79.2)
Non-interest expense 29,625 22,491 31.7
------ ------
Income (loss) before income tax
expense 2,083 18,762 (88.9)
Income tax expense (benefit) (1,028) 5,640 (118.2)
------ -----
Net income 3,111 13,122 (76.3)
Preferred stock dividends and
discount accretion 1,202 1,005 19.6
----- -----
Net income available to common
shareholders $1,909 $12,117 (84.3)
====== =======
PER SHARE DATA
Earnings per share, basic $0.19 $1.60 -88.1 %
Earnings per share, diluted 0.19 1.59 (88.1)
Tangible common book value per
share 9.05 9.82 (7.8)
Weighted average participating
common shares:
Basic 10,865,177 7,651,515
Diluted 10,882,325 7,690,993
Period-end number of shares:
Common 9,075,395 9,038,668
Convertible preferred 1,804,566 1,804,566
PERFORMANCE RATIOS
Return on average assets 0.29% 1.41%
Return on average common equity 3.60% 23.55%
Return on average tangible
common equity 4.90% 32.32%
Net yield on earning assets
(taxable equivalent) 3.86% 3.55%
Average equity to average
assets 7.17% 7.17%
Allowance for loan losses as a
% of total loans 1.53% 1.30%
Nonperforming assets to total
assets, end of period 6.60% 5.14%
Nonperforming assets not
covered by loss share 3.05% 1.76%
Ratio of net charge-offs to
average loans, annualized 1.06% 1.16%
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except share and per share data)
(Unaudited) For the
Three Months Ended
------------------
June 30, March 31, December 31,
-------- --------- ------------
2011 2011 2010
---- ---- ----
SUMMARY STATEMENTS OF
OPERATIONS
Interest income $24,787 $25,042 $25,329
Interest expense 8,021 8,364 9,051
----- ----- -----
Net interest income 16,766 16,678 16,278
Provision for loan
losses 3,032 3,500 12,000
----- ----- ------
Net interest income
after provision for
loan losses 13,734 13,178 4,278
Non-interest income 2,371 2,425 1,847
Non-interest expense 14,893 14,732 17,202
------ ------ ------
Income (loss) before
income tax expense
(benefit) 1,212 871 (11,077)
Income tax expense
(benefit) (381) (647) (5,021)
---- ---- ------
Net income (loss) 1,593 1,518 (6,056)
Preferred stock
dividends and discount
accretion 601 601 600
--- --- ---
Net income (loss)
available to common
shareholders $992 $917 $(6,656)
==== ==== =======
Net interest income, as
reported $16,766 $16,678 $16,278
Tax-
equivalent
adjustment 1,322 1,475 1,494
-----
Net interest income,
tax-equivalent $18,088 $18,153 $17,772
======= ======= =======
PER SHARE DATA
Earnings per share,
basic $0.10 $0.09 $(0.61)
Earnings per share,
diluted 0.10 0.09 (0.61)
Weighted average
participating common
shares:
Basic 10,869,868 10,860,434 10,848,790
Diluted 10,886,162 10,878,950 10,926,772
Period-end number of
shares:
Common 9,075,395 9,059,809 9,053,360
Convertible preferred 1,804,566 1,804,566 1,804,566
PERFORMANCE RATIOS
Return on average
assets 0.30% 0.29% -1.11%
Return on average
common equity 3.67% 3.53% -22.77%
Return on average
tangible common equity 4.96% 4.84% -30.18%
Net yield on earning
assets (taxable
equivalent) 3.84% 3.87% 3.71%
Average equity to
average assets 7.25% 7.08% 7.56%
Nonperforming assets to
total assets, end of
period 6.60% 6.54% 6.29%
Nonperforming
assets not
covered by
loss share 3.05% 3.03% 2.75%
Ratio of net charge-
offs to average loans,
annualized 1.04% 1.07% 1.62%
(Unaudited) For the
Three Months Ended
------------------
September 30, June 30, December 31,
------------- -------- ------------
2010 2010 2009
---- ---- ----
SUMMARY STATEMENTS OF
OPERATIONS
Interest income $25,580 $24,829 $19,586
Interest expense 8,734 9,234 7,550
----- ----- -----
Net interest income 16,846 15,595 12,036
Provision for loan
losses 5,436 6,000 4,750
----- ----- -----
Net interest income
after provision for
loan losses 11,410 9,595 7,286
Non-interest income 3,906 21,698 2,930
Non-interest expense 15,479 13,604 8,602
------ ------ -----
Income (loss) before
income tax expense
(benefit) (163) 17,689 1,614
Income tax expense
(benefit) (823) 5,956 (173)
---- ----- ----
Net income (loss) 660 11,733 1,787
Preferred stock
dividends and discount
accretion 591 502 498
--- --- ---
Net income (loss)
available to common
shareholders $69 $11,231 $1,289
=== ======= ======
Net interest income, as
reported $16,846 $15,595 $12,036
Tax-
equivalent
adjustment 1,373 1,290 1,218
-----
Net interest income,
tax-equivalent $18,219 $16,885 $13,254
======= ======= =======
PER SHARE DATA
Earnings per share,
basic $0.01 $1.42 $0.18
Earnings per share,
diluted 0.01 1.41 0.18
Weighted average
participating common
shares:
Basic 10,845,132 7,957,725 7,341,249
Diluted 10,972,466 8,043,395 7,350,425
Period-end number of
shares:
Common 9,041,334 9,038,668 7,341,901
Convertible preferred 1,804,566 1,804,566 -
PERFORMANCE RATIOS
Return on average
assets 0.12% 2.23% 0.44%
Return on average
common equity 0.23% 40.96% 5.41%
Return on average
tangible common equity 0.30% 55.35% 7.65%
Net yield on earning
assets (taxable
equivalent) 3.76% 3.62% 3.52%
Average equity to
average assets 7.63% 6.75% 7.65%
Nonperforming assets to
total assets, end of
period 5.66% 5.14% 2.02%
Nonperforming
assets not
covered by
loss share 1.99% 1.76% 2.02%
Ratio of net charge-
offs to average loans,
annualized 1.56% 1.23% 1.55%
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands)
(Unaudited) As of
-----
June 30, June 30,
2011 2010 % Change
--------- --------- --------
SELECTED BALANCE SHEET DATA
End of period balances
Loans:
Loans not covered by loss share $1,244,862 $1,123,803 10.8 %
Loans covered by loss share 283,685 345,372 (17.9)
Allowance for loan losses (23,373) (19,038) 22.8
------- -------
Net loans 1,505,174 1,450,137 3.8
Loans held for sale 1,909 2,190 (12.8)
Investment securities 339,381 364,805 (7.0)
Intangible assets 28,249 28,652 (1.4)
Total assets 2,146,745 2,161,991 (0.7)
Deposits:
Non-interest bearing deposits 128,694 104,328 23.4
Interest-bearing demand and
savings 835,967 739,542 13.0
Time deposits 885,922 990,755 (10.6)
------- -------
Total deposits 1,850,583 1,834,625 0.9
Borrowed funds 129,833 148,898 (12.8)
Total interest-bearing
liabilities 1,851,722 1,879,195 (1.5)
Shareholders' equity:
Preferred equity 47,158 46,721 0.9
Common equity 113,400 119,400 (5.0)
Accumulated other comprehensive
income (loss) (2,989) (1,983) 50.7
------ ------
Total shareholders' equity 157,569 164,138 (4.0)
As of
-----
June 30, March 31, December 31,
-------- --------- ------------
2011 2011 2010
--- ---- ----
SELECTED BALANCE SHEET DATA
End of period balances
Loans:
Loans not covered by loss
share $1,244,862 $1,227,291 $1,198,838
Loans covered by loss share 283,685 301,436 309,342
Allowance for loan losses (23,373) (24,325) (24,813)
------- ------- -------
Net loans 1,505,174 1,504,402 1,483,367
Loans held for sale 1,909 1,679 6,751
Investment securities 339,381 333,265 358,871
Intangible assets 28,249 28,343 28,445
Total assets 2,146,745 2,157,280 2,149,932
Deposits:
Non-interest bearing
deposits 128,694 116,286 107,547
Interest-bearing demand and
savings 835,967 849,392 841,062
Time deposits 885,922 905,173 879,461
------- ------- -------
Total deposits 1,850,583 1,870,851 1,828,070
Borrowed funds 129,833 120,939 157,920
Total interest-bearing
liabilities 1,851,722 1,875,504 1,878,443
Shareholders' equity:
Preferred equity 47,158 47,038 46,918
Common equity 113,400 112,685 112,104
Accumulated other
comprehensive income (loss) (2,989) (5,512) (6,798)
------ ------ ------
Total shareholders' equity 157,569 154,211 152,224
As of
-----
September 30, June 30, December 31,
------------- -------- ------------
2010 2010 2009
---- ---- ----
SELECTED BALANCE SHEET DATA
End of period balances
Loans:
Loans not covered by loss
share $1,144,974 $1,123,803 $1,079,179
Loans covered by loss share 330,761 345,372 -
Allowance for loan losses (18,819) (19,038) (17,309)
------- ------- -------
Net loans 1,456,916 1,450,137 1,061,870
Loans held for sale 3,314 2,190 2,766
Investment securities 357,555 364,805 366,506
Intangible assets 28,548 28,652 27,699
Total assets 2,180,049 2,161,991 1,634,185
Deposits:
Non-interest bearing
deposits 105,197 104,328 66,801
Interest-bearing demand and
savings 786,498 739,542 578,329
Time deposits 963,885 990,755 704,748
------- ------- -------
Total deposits 1,855,580 1,834,625 1,349,878
Borrowed funds 145,720 148,898 150,996
Total interest-bearing
liabilities 1,896,103 1,879,195 1,434,073
Shareholders' equity:
Preferred equity 46,799 46,721 29,304
Common equity 119,054 119,400 91,797
Accumulated other
comprehensive income (loss) (374) (1,983) 5,105
---- ------ -----
Total shareholders' equity 165,479 164,138 126,206
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands)
(Unaudited)
For the Three Month Period Ended
--------------------------------
June 30, March 31,
-------- ---------
2011 2011
---- ----
SELECTED BALANCE SHEET DATA
Quarterly average balances
Loans:
Loans not covered by loss
share $1,238,661 $1,210,550
Loans covered by loss share 292,561 305,389
------- -------
Total loans 1,531,222 1,515,939
Investment securities, at
amortized cost 323,661 352,480
Total earning assets 1,888,007 1,901,574
Total assets 2,144,753 2,150,436
Deposits:
Non-interest bearing
deposits 123,398 110,957
Interest-bearing demand and
savings 839,169 845,630
Time deposits 884,100 887,338
------- -------
Total deposits 1,846,667 1,843,925
Borrowed funds 137,020 144,783
Total interest-bearing
liabilities 1,860,289 1,877,751
Shareholders' equity 155,584 152,250
For the Three Month Period Ended
--------------------------------
September
December 31, 30,
------------ ----------
2010 2010
---- ----
SELECTED BALANCE SHEET DATA
Quarterly average balances
Loans:
Loans not covered by loss
share $1,152,263 $1,112,829
Loans covered by loss share 320,052 338,067
------- -------
Total loans 1,472,315 1,450,896
Investment securities, at
amortized cost 344,146 348,687
Total earning assets 1,899,557 1,921,499
Total assets 2,155,061 2,187,283
Deposits:
Non-interest bearing
deposits 110,401 109,366
Interest-bearing demand and
savings 820,640 771,739
Time deposits 903,967 976,147
------- -------
Total deposits 1,835,008 1,857,252
Borrowed funds 131,684 148,755 175,179
Total interest-bearing
liabilities 1,856,291 1,896,641 1,857,688
Shareholders' equity 162,865 166,942 143,498
For the Three Month Period Ended
--------------------------------
June 30, December 31,
-------- ------------
2010 2009
---- ----
SELECTED BALANCE SHEET DATA
Quarterly average balances
Loans:
Loans not covered by loss
share $1,106,302 $1,058,657
Loans covered by loss share 316,132 -
------- ---
Total loans 1,422,434 1,058,657
Investment securities, at
amortized cost 362,375 408,781
Total earning assets 1,873,308 1,492,702
Total assets 2,114,839 1,616,235
Deposits:
Non-interest bearing
deposits 98,953 59,458
Interest-bearing demand and
savings 696,693 560,697
Time deposits 985,816 716,199
------- -------
Total deposits 1,781,462 1,336,354
Borrowed funds 175,179 140,812
Total interest-bearing
liabilities 1,857,688 1,417,708
Shareholders' equity 143,498 123,659
LOAN MIX AND STRATIFICATION STATISTICS
BNC BANCORP
(Dollars in thousands)
(Unaudited)
As of June 30,
--------------
2011 2010 % Change
---- ---- --------
Loans Not Covered Under Loss Share
Agreements:
Construction, A&D, and Land $196.6 $204.8 (4.0)
--------------------------- ------ ------ ----
Residential Construction 24.9 33.7 (26.1)
Presold 12.2 13.5 (9.6)
Speculative 12.7 20.2 (37.1)
Loan size - over $400,000 3.8 6.4 (40.6)
Loan size - $200,000 to $400,000 3.7 7.9 (53.2)
Loan size - under $200,000 5.2 5.9 (11.9)
Commercial Construction 54.4 34.9 55.9
Loan size - $5 million and over 12.6 10.2 -
Loan size -$3 million to $5
million 7.8 4.4 77.3
Loan size -$1 million to $3
million 20.9 14.2 47.2
Loan size - under $1 million 13.1 6.1 114.8
Residential and Commercial A&D 22.0 31.0 (29.0)
Loan size -$5 million to $6
million 6.0 11.7 (48.7)
Loan size -$3 million to $5
million - 3.6 (100.0)
Loan size -$1 million to $3
million 12.1 9.0 34.4
Loan size - under $1 million 3.9 6.7 (41.8)
-
Land 95.3 105.2 (9.4)
Residential Buildable Lots 36.0 46.7 (22.9)
Commercial Buildable Lots 13.5 16.6 (18.7)
Land Held for Development 26.6 29.3 (9.2)
Raw and Agricultural Land 19.2 12.6 52.4
Commercial Real Estate $605.8 $507.4 19.4
---------------------- ------ ------ ----
Multi-Family 34.4 35.1 (2.0)
Churches 28.2 19.3 46.1
Retail 425.1 350.2 21.4
Owner Occupied 136.6 116.8 17.0
Investment 288.5 233.4 23.6
Loan size -$5 million to $9
million 51.7 45.7 13.1
Loan size -$3 million to $5
million 54.3 36.2 50.0
Loan size -$1 million to $3
million 98.5 79.1 24.5
Loan size - under $1 million 84.0 72.4 16.0
Industrial 118.1 102.8 14.9
Owner Occupied 59.6 49.6 20.2
Investment 58.5 53.2 10.0
Loan size -$5 million to $6
million - - -
Loan size -$3 million to $5
million 7.6 4.3 76.7
Loan size -$1 million to $3
million 26.0 23.0 13.0
Loan size - under $1 million 24.9 25.9 (3.9)
Other - - -
LOAN MIX AND STRATIFICATION STATISTICS
BNC BANCORP
(Dollars in thousands)
(Unaudited) Trends
June 30, March 31, December September June 30,
-------- --------- -------- --------- --------
2011 2011 31, 2010 30, 2010 2010
---- ---- -------- -------- ----
Loans Not Covered
Under Loss Share
Agreements:
Construction,
A&D, and Land $196.6 $194.1 $200.9 $202.4 $204.8
-------------- ------ ------ ------ ------ ------
Residential
Construction 24.9 28.0 29.9 31.1 33.7
Presold 12.2 12.3 12.2 12.8 13.5
Speculative 12.7 15.7 17.7 18.3 20.2
Loan size -over
$400,000 3.8 4.5 6.8 6.1 6.4
Loan size -
$200,000 to
$400,000 3.7 1.7 4.8 6.3 7.9
Loan size -under
$200,000 5.2 9.5 6.1 5.9 5.9
Commercial
Construction 54.4 43.9 44.9 40.1 34.9
Loan size -$5
million and over 12.6 7.4 12.5 12.5 10.2
Loan size -$3
million to $5
million 7.8 10.9 8.0 8.0 4.4
Loan size -$1
million to $3
million 20.9 11.4 14.9 12.1 14.2
Loan size -under
$1 million 13.1 14.2 9.5 7.5 6.1
Residential and
Commercial A&D 22.0 23.4 27.1 30.1 31.0
Loan size -$5
million to $6
million 6.0 6.1 11.7 11.7 11.7
Loan size -$3
million to $5
million - - - 3.6 3.6
Loan size -$1
million to $3
million 12.1 11.9 10.0 10.1 9.0
Loan size -under
$1 million 3.9 5.4 5.4 4.7 6.7
- - - - -
Land 95.3 98.8 99.0 101.1 105.2
Residential
Buildable Lots 36.0 40.3 42.8 44.9 46.7
Commercial
Buildable Lots 13.5 14.7 13.6 13.5 16.6
Land Held for
Development 26.6 26.8 26.9 27.0 29.3
Raw and
Agricultural
Land 19.2 17.0 15.7 15.7 12.6
Commercial Real
Estate $605.8 $588.2 $548.8 $536.2 $507.4
--------------- ------ ------ ------ ------ ------
Multi-Family 34.4 43.2 44.5 42.0 35.1
Churches 28.2 26.9 26.0 19.2 19.3
Retail 425.1 400.4 372.1 371.0 350.2
Owner Occupied 136.6 123.4 118.2 117.7 116.8
Investment 288.5 277.0 253.9 253.3 233.4
Loan size -$5
million to $9
million 51.7 54.3 45.8 46.1 45.7
Loan size -$3
million to $5
million 54.3 50.9 47.4 47.6 36.2
Loan size -$1
million to $3
million 98.5 91.8 82.7 83.1 79.1
Loan size -under
$1 million 84.0 80.0 78.0 76.5 72.4
Industrial 118.1 117.7 106.2 104.0 102.8
Owner Occupied 59.6 58.7 51.8 49.8 49.6
Investment 58.5 59.0 54.4 54.2 53.2
Loan size -$5
million to $6
million - - - - -
Loan size -$3
million to $5
million 7.6 7.7 4.4 4.3 4.3
Loan size -$1
million to $3
million 26.0 25.1 23.8 24.1 23.0
Loan size -under
$1 million 24.9 26.2 26.2 25.8 25.9
Other - - - - -
SOURCE BNC Bancorp
