BNC Bancorp : Announces Earnings for 2011

HIGH POINT, N.C., Jan. 31, 2012/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, 2011.

For the quarter ended December 31, 2011, net income was $1.4 million, or $0.13per share.  Income available to common shareholders was $797,000, or $0.08per diluted share, an increase compared to the loss of $6.7 million, or $0.61per diluted share, reported for the same period in 2010.  In the fourth quarter of 2011, the Company incurred $723,000of one-time expenses associated with merger and acquisition activities, which reduced after-tax diluted earnings per share by $0.07.

For the year ended December 31, 2011, net income was $6.9 million, or $0.64per share.  Income available to common shareholders was $4.5 million, or $0.45per diluted share, a decrease compared to the $5.5 million, or $0.61per diluted share, reported for the year-ended December 31, 2010.  Included in the financial results for the years ended December 31, 2011and 2010 are $7.8 millionand $19.3 million, respectively, of acquisition gains from FDIC-assisted transactions.

Total assets at December 31, 2011were $2.45 billion, an increase of $305.0 million, or 14.2%, compared to $2.15 billionat December 31, 2010.  The increase was due to strong organic growth in our North Carolinafranchise, along with $148 millionin assets from the acquisition of Blue Ridge Saving Bank ("Blue Ridge") and $53 millionfrom the acquisition of Regent Bank of South Carolina("Regent").

W. Swope Montgomery, Jr., President and CEO, noted, "We are proud of the Company's many achievements in 2011, as our management team has continued to go above and beyond even my highest expectations.  We have either announced or closed three strategically important acquisitions during the year; recruited and built state of the art mortgage and SBA platforms; grew non-covered loans by over 15%; expanded our presence in both Raleighand Charlotte, the two highest growth markets in North Carolina; added exceptional executive level talent to our internal infrastructure; and most importantly, reported positive trends in delinquency indicators, non-performing assets, and credit quality metrics."

Highlights of 2011:

• Credit Trends Improving (non-covered)
  • Loan Past Dues 30-89 days declined from a high of 1.16% in March to 0.29%.
  • Non-performing loans declined from a high of 2.78% to 1.40%.
  • Non-performing assets declined from a high of $56.1 million to $40.4 million.
  • Pre-2009 vintage Construction and Development loans are down from a high of $223 million to $18 million.
  • During the fourth quarter, took additional discounts below appraised values on certain large OREO properties, or loans in the final stages of the foreclosure process, to accelerate the expected disposition or sales cycle to within 6 months.    

• M&A Activities
  • Acquired Blue Ridge Savings Bank, a $168 millionthrift with six offices in western North Carolina- Asheville, Hendersonville, Brevard, Boone, Maggie Valley, and Mooresville- through a FDIC-assisted transaction completed on October 14, 2011.
  • Acquired in an all cash transaction, Regent Bank of South Carolina, a $53 millionthrift with one office located in Greenville, South Carolina, which closed on December 31, 2011.
  • Announced an all-stock transaction with KeySource Commercial Bank, a $220 millioncommercial bank with one office located in Durham, North Carolina, which is expected to close in the second quarter of 2012.
  • None of the acquisitions required additional capital raises to complete.

• Organic Growth
  • Increased non-covered loans, excluding loans acquired in the Regent transaction, by $158.9 million, or 13.3%.
  • Increased demand deposits by $106.5 million, or 11.2%.
  • Recruited a proven leader to expand mortgage operations by assembling a veteran team of 13 support professionals and 27 originators to provide mortgage lending in the Charlotte, Raleigh, Asheville, Piedmont-Triad, and Lake Norman markets in North Carolina, and the Myrtle Beach, Hilton Head, and Greenvillemarkets in South Carolina.  We anticipate this team, when fully phased-in, to close and sell into the secondary market in excess of $350 millionin mortgages annually.  
  • Recruited a seasoned leader to build a SBA origination team, which includes all SBA certifications, with underwriters and an experienced lending staff in both Raleighand Charlotte, North Carolina.  
  • Absorbed necessary start-up costs for the mortgage and SBA divisions in 2011.

• Executive Level Talent
  • Recruited a highly seasoned risk professional to serve as our Chief Enterprise Risk Officer.  This executive joined our Company after a twenty plus year career in banking; most recently serving seven years in a senior leadership position with one of the top regional banks known for its stellar risk management practices and results.    

Montgomery continued, "The highlights outlined above are impressive during any operating environment, but clearly magnified given the very tough economic, regulatory, and operating environments that currently face our industry.  Through the dedication of our Board, our management, and our entire employee base, we continue to move our Company forward by carefully executing a strategic plan centered around exceptional talent, a high regard for balance between risk management and production, banking markets that can provide above-average growth in either core deposits, loans, or both, and the structural integrity essential to produce returns that warrant superior valuations.  The highlights above have each contributed directly to this mission.  

There are two steps that must happen before our Company can rid itself of the elevated costs of the recent credit cycle.  One, there must be a clear improvement in the quality of the loan portfolio, evidenced by a meaningful decline in the migration from the performing portfolio into non-performing loans.  Second, the non-performing portfolio must be worked through the foreclosure process and there must be a disposition or sale of the resulting OREO.  Over the past three quarters, we have reported declines in both the delinquency ratios of our performing portfolio and the migration of performing into non-performing loans.  In addition, the primary contributor to the elevated non-performing loan levels over the past three years has been defaults in construction and development loans originated prior to 2009.  To provide further support that the positive trends in the loan portfolio are justified and sustainable, of the $223 millionof pre-2009 vintage construction and development loans previously in the loan portfolio, only $18 millionremain outstanding.

With the above mentioned positive credit trends in place, we are now increasingly focused on accelerating the disposition of OREO.   During the fourth quarter, we evaluated many options for accelerating the disposition of OREO.  Where a normal OREO sales cycle can be up to 18 months, we ultimately decided the best course of action included taking substantial discounts on the larger OREO properties in order to accelerate the sales cycle on these properties to within six months.  This decision resulted in an additional impairment charge during the fourth quarter of $7.4 millionon $23.4 millionof OREO or loans in the final stages of the foreclosure process, resulting in an updated carrying value of $15.0 million.  Many of these properties have now been marked at significant discounts to appraised values and to levels where we have received confirmed interest from multiple parties, and therefore, believe our internal team can liquidate the selected assets in a more cost-effective manner than a bulk sale option.   While taking charges is never an easy decision, these discounts will help us return our Company to more normalized operating results, with the disposition of the larger, more costly properties within the OREO portfolio."

Blue Ridge Savings Bank Acquisition. Effective October 14, 2011, the Bank entered into a Purchase and Assumption Agreement with the FDIC to acquire Blue Ridge Savings Bank, a ten-branch savings bank headquartered in Asheville, NC. Blue Ridgehad approximately $168 millionin assets and $160 millionof customer deposits. The Agreement contains a loss-share arrangement that covers all loans and foreclosed assets from the first dollar of loss up to 80 percent of all assets purchased. With FDIC approval to close four less productive offices in December, the planned integration is on schedule with the core systems conversion scheduled for mid-February.

Regent Bank of South Carolina Acquisition.  On December 31, 2011, the Bank closed on its acquisition of Regent Bank of South Carolina, a federal savings association in Greenville, South Carolina.  Regent operates one office in Greenvillewith acquired loans of $32 millionand acquired deposits of $43 million.  This was a small, low-risk acquisition that accelerated the Bank's entry into the high-growth Greenvillemarket.  Full systems integration took place over the weekend of January 27thand the office opened as BNC Bank on January 30th.

Additional Operating Highlights from Fourth Quarter

Since December 2010, total loans increased $201.3 million, or 13.3%, while non-covered loans increased by $190.6 million, or 15.9%.  At December 31, 2011, the Company's loan portfolio included $320.0 millionin loans covered under loss-share agreements and $1.39 billionof non-covered loans.  During the fourth quarter of 2011, the Company's acquisitions of Blue Ridgeand Regent increased loans covered under loss-share agreements by $65.6 millionand loans not covered by loss-share agreements by $31.7 million, respectively.  Loans acquired from Beach First, Blue Ridgeand Regent are accounted for under fair value and shown net of any related credit and yield adjustments.  

Gross Loan Growth
(dollars in thousands; unaudited)
	12/31/2011	9/30/2011	6/30/2011	3/31/2011	12/31/2010
Total loans	$      1,709,483	$      1,572,566	$      1,528,547	$      1,528,727	$      1,508,180
Loans covered by loss-share, at fair value	320,032	262,673	283,685	301,436	309,342
Loans not covered by loss-share	$      1,389,451	$      1,309,893	$      1,244,862	$      1,227,291	$      1,198,838
Loan growth (quarter/quarter):
Total loans	8.7%	2.9%	0.0%	1.4%	2.2%
Loans not covered by loss-share	6.1%	5.2%	1.4%	2.4%	4.7%
Annual growth of non-covered loans	15.9%

OREO at December 31, 2011totaled $68.5 million, an increase of $28.8 millionfrom December 31, 2010.  Increases during the fourth quarter included $30.1 millionof OREO covered under loss-share agreements from the Blue Ridgeacquisition.  At December 31, 2011, the Company's non-covered OREO portfolio totaled $20.9 million.

At December 31, 2011, the carrying value of loans and OREO covered by loss-share agreements was $320.0 millionand $47.6 million, respectively, with a corresponding indemnification receivable from the FDIC of $91.9 million.  

Total deposits at December 31, 2011were $2.12 billion, an increase of $290.1 millionfrom December 31, 2010.  While overall deposit growth continues to be an emphasis, more important 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 $106.5 million, or 11.2%.  During the fourth quarter of 2011, the Company's acquisitions of Blue Ridgeand Regent increased deposits by $178.9 million.  At December 31, 2011, time deposits were 50.2% of total deposits, compared to 48.1% and 47.5% at December 31, 2010and September 30, 2011, respectively.  Management believes that the Blue Ridgeand Regent acquisitions will provide good markets for core deposit growth.

Total Deposit Growth
(dollars in thousands; unaudited)
	12/31/2011	9/30/2011	6/30/2011	3/31/2011	12/31/2010
Non-interest bearing demand	$          145,688	$          130,978	$          128,694	$          116,286	$          107,547
Interest-bearing demand	909,402	833,190	835,967	849,392	841,062
Time deposits	1,063,097	871,436	885,922	905,173	879,461
Total	$       2,118,187	$       1,835,604	$       1,850,583	$       1,870,851	$       1,828,070
Growth (Quarter/Quarter)	15.4%	-0.8%	-1.1%	2.3%	-1.5%

Operating Results

Net interest income for the fourth quarter of 2011 was $20.1 million, an increase of $3.8 millionfrom the comparable period last year, and an increase of $3.2 millionfrom the prior quarter.  Taxable-equivalent net interest margin increased 47 basis points from the fourth quarter of 2010 to 4.18%.  Compared to the third quarter of 2011, taxable-equivalent net interest margin increased 39 basis points from 3.79%.

During the fourth quarter of 2011, the Company's average yield on interest-earning assets increased 20 basis points while the average rate on interest-bearing liabilities decreased 31 basis points when compared to the fourth quarter of 2010.  When compared to the third quarter of 2011, the Company's yield on average earning assets increased by 32 basis points, while the cost of average interest-bearing liabilities decreased 11 basis points.

Net interest income in the fourth quarter was impacted by the accretion of yield and fair value discounts on the acquired loan portfolios.  During the fourth quarter of 2011, accretion totaled $3.1 million, compared to $1.2 millionin the fourth quarter of 2010, and $1.0 millionin the third quarter of 2011.  The additional accretion was due to accelerated cash flows on the Beach First loan portfolio, and accretion on the performing Blue Ridgeloan portfolio utilizing a level-yield basis over the economic life of the loans.

Net interest income for the year ended December 31, 2011was $70.4 million, an increase of $10.2 million, or 16.9% from the comparable period last year.  Taxable-equivalent net interest margin increased 28 basis points from the year ended December 31, 2010to 3.93%.  Average interest-earning assets were $1.94 billionfor the year ended December 31, 2011, an increase of $136.7 millionfrom the same period of 2010.

Quarterly Average Yields / Costs (Tax-Equiv. Basis)
(unaudited)
	12/31/2011	9/30/2011	6/30/2011	3/31/2011	12/31/2010
Earning asset yield	5.80%	5.48%	5.55%	5.66%	5.60%
Cost of interest-bearing liabilities	1.62%	1.73%	1.73%	1.81%	1.93%
Cost of funds	1.52%	1.62%	1.62%	1.71%	1.83%
Net interest spread	4.18%	3.76%	3.82%	3.85%	3.67%
Net interest margin	4.18%	3.79%	3.84%	3.87%	3.71%

Non-interest income was $12.2 millionand $3.8 millionfor the fourth and third quarters of 2011, compared to $1.8 millionfor the prior year fourth quarter.  Included in non-interest income for the fourth quarter of 2011 was $7.8 millionof acquisition gain from a FDIC-assisted transaction, $34,000of net gains on sales of investments, and $1.3 millionof income associated with FDIC receivable and related loss-share receipts.  Excluding the FDIC related income and the sales of investment securities, non-interest income was $3.0 millionfor the current quarter, an increase of 42.7% from the $2.1 millionreported for the fourth quarter of 2010 and 20.1% from the $2.5 millionin the third quarter of 2011.  When compared to the fourth quarter of 2010, increases were primarily due to growth in earnings on bank-owned life insurance of $137,000and increases in mortgage fee income of $474,000.  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 increases in mortgage origination volume and fee income in future periods.  In addition, the Company's new SBA division became operational during 2011, with $333,000of SBA fee income recorded during the fourth quarter of 2011.  

Non-interest income was $20.8 millionfor the year ended December 31, 2011, compared to $28.8 millionfor the same period in 2010.  Included in non-interest income for the years ended December 31, 2011and 2010 were $7.8and $19.3 million, respectively, of acquisition gains from FDIC-assisted transactions.

Non-interest expenses for the fourth quarter of 2011 increased $6.3 millioncompared to the same quarter a year ago, and were $8.8 millionhigher than the third quarter of 2011.  Loan, foreclosure and collection expenses increased by $3.9 millionduring the fourth quarter of 2011 when compared to the same quarter in 2010, primarily from valuation adjustments of OREO properties, and were $6.1 millionhigher than the third quarter of 2011.  During the fourth quarter of 2011, there was $1.2 millionof additional non-interest expense associated with the Blue Ridgeacquisition.

The Company's personnel costs have increased $1.4 million, or 19.5%, during the fourth quarter of 2011 when compared to the same quarter a year ago, and were $644,000higher than the previous quarter.  All of the increases in personnel costs are attributable to investments in the new mortgage and SBA lending platforms, as well as additions to our personnel from our acquisitions and our new offices in the Charlotteand Raleighmarkets.  All of these additions are expected to contribute to our long-term focus on driving both top line and fee income growth.  Professional and other services and Other expenses increased by $655,000and $789,000, respectively, when compared to the same quarter a year ago, primarily from costs associated with the acquisition during the fourth quarter of 2011 and related franchise growth.  Specific acquisition related costs totaled $723,000during the fourth quarter of 2011.  All other non-interest expense categories have seen nominal increases when compared to the same quarter a year ago.

Non-interest expense was $67.9 millionfor the year ended December 31, 2011, compared to $55.2 millionfor the same period in 2010, an increase of $12.7 million.  This increase was primarily in salaries and employee benefits, which increased $6.5 million, from both investments in new lending platforms and having increased expenses from the current year acquisition and a full year of expense from the prior year acquisition.  Additionally, loan foreclosure and collection expenses increased $5.0 millionduring 2011.

Non-Interest Income / Non-Interest Expense
(dollars in thousands; unaudited)
		Three Months Ended						Year Ended
		12/31/2011		9/30/2011		12/31/2010		12/31/2011		12/31/2010
Non-interest income
Mortgage fees		$             1,044		$                581		$                570		$             2,230		$             1,583
Service charges		751		744		753		3,190		3,083
Investment brokerage fees		204		357		193		945		326
Earnings on bank-owned life ins		429		414		292		1,688		986
Gain (loss) on sale of securities		34		1,032		(6)		1,202		535
Gain (loss) on acquisition		7,800		-		(28)		7,800		19,261
Other		1,906		711		73		3,748		3,039
Total non-interest income		$           12,168		$             3,839		$             1,847		$           20,803		$           28,813
Non-interest expense
Salaries and employee benefits		$             8,796		$             8,152		$             7,362		$           31,810		$           25,340
Occupancy and equipment		1,944		1,593		1,662		6,620		5,363
Data processing and supply		613		514		549		2,291		2,113
Advertising/business development		481		326		1,007		1,733		1,994
Professional and other services		1,628		668		973		4,166		4,012
FDIC insurance assessments		488		485		810		2,433		2,970
Loan, foreclosure and collection		8,105		1,975		4,159		14,072		9,054
Other		1,469		1,002		680		4,739		4,326
Total non-interest expense		$           23,524		$           14,715		$           17,202		$           67,864		$           55,172

Asset Quality

Net charge-offs for the fourth quarter of 2011 were $10.0 million, which included $3.8 millionof loans covered under loss-share agreements where the Company's cost was 20% or $760,000.  Combined with the $6.2 millionof non-covered charge-offs, the Company incurred $7.0 millionin charge-off losses, or 1.70% of average loans annualized compared to $2.7 million, or 0.70% reported for the third quarter of 2011.  Nonperforming assets not covered by loss-share were 1.93% of total assets and 6.57% including covered assets at December 31, 2011, compared to 2.75% and 6.24%, respectively, at September 30, 2011.  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)
	12/31/2011	9/30/2011	6/30/2011	3/31/2011	12/31/2010
Nonaccrual loans not covered by loss-share	$          19,442	$          29,844	$          31,822	$           34,047	$          26,224
Nonaccrual loans covered by loss-share	67,854	61,711	62,259	69,377	64,753
OREO not covered by loss-share	20,927	22,736	24,289	21,663	23,912
OREO covered by loss-share	47,577	22,747	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	5,425	23	-	-	4,554
Total nonperforming assets	$        161,225	$        137,061	$        141,718	$         141,022	$        135,312
Nonperforming assets not covered by loss-share	$          40,369	$          52,580	$          56,111	$           55,834	$          50,180
Total assets	$     2,454,930	$     2,197,758	$     2,146,745	$      2,157,280	$     2,149,932
Total assets less covered assets	2,087,321	1,912,338	1,839,712	1,840,033	1,824,765
Total loans	1,709,483	1,572,566	1,528,547	1,528,727	1,508,180
Total accruing loans	1,622,187	1,481,011	1,434,466	1,425,303	1,417,203
Total loans less fair value loans	1,357,717	1,309,893	1,244,862	1,227,291	1,198,838
Total loans less covered loans	1,389,451	1,309,893	1,244,862	1,227,291	1,198,838
Total allowance for loan losses	31,008	24,177	23,373	24,325	24,813
Allowance for loans not covered by loss-share	23,899	24,177	23,373	24,325	24,813
Allowance for loans covered by loss-share	7,109	-	-	-	-
Ratio of nonperforming assets to total assets	6.57%	6.24%	6.60%	6.54%	6.29%
Not covered by loss-share	1.93%	2.75%	3.05%	3.03%	2.75%
Ratio of nonperforming loans to total loans	5.43%	5.82%	6.15%	6.77%	6.34%
Not covered by loss-share	1.40%	2.28%	2.56%	2.78%	2.19%
Ratio of allowance for loan losses to total loans	1.81%	1.54%	1.53%	1.59%	1.65%
Total loans less fair value loans to allowance not
covered by loss-share	1.76%	1.85%	1.88%	1.98%	2.07%
Net charge-offs, QTD	$          10,036	$            2,719	$            3,985	$             3,988	$            6,006
Net charge-offs, non-covered portion, QTD (1)	7,015	2,719	3,985	3,988	6,006
Ratio of net charge-offs, non-covered portion, QTD
to average total loans, annualized (1)	1.70%	0.70%	1.03%	1.05%	1.62%
Loans restructured/modified not included in above,	$          41,516	$          32,294	$          30,036	$           25,857	$            5,107
(not past due or on nonaccrual)
(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.

During the fourth quarter of 2011, the Company recorded a provision for loan losses of $8.2 million, an increase from the $3.5 millionrecorded during the third quarter of 2011.  Of the $8.2 millionin provision expense, $6.0 millionrelated to legacy non-covered loans and $2.2 millionin related loss-share loans.  The Company recorded a $10.9 millionprovision for loss-share loans, of which $8.7 millionwas recorded through a FDIC indemnification asset.  The remaining $2.2 million, representing 20% of the provision, was charged through the Company's provision for loan losses.  The allowance for loan losses was $31.0 millionat December 31, 2011, and $24.2 millionat September 30, 2011.  Loan loss reserves to total period-end loans were 1.81% and 1.54% at December 31, 2011and September 30, 2011, respectively, compared to 1.65% reported at December 31, 2010.  Excluding the loans acquired that are marked to fair value, loan loss reserves to period-end loans not covered by loss-share decreased from 1.85% and 2.07%  reported at September 30, 2011and December 31, 2010, respectively, to 1.76% at December 31, 2011.  

Nonaccrual loans not covered by loss-share agreements totaled $19.4 millionat December 31, 2011, a decrease of $10.4 millioncompared to $29.8 millionat September 30, 2011.  Loans migrating into nonaccrual status during the quarter totaled $8.1 million.  Nonaccrual loans covered by loss-share agreements totaled $67.8 million, an increase of $6.1 millioncompared to $61.7 millionat September 30, 2011.  The increase primarily resulted from the additional $12.1 millionof nonaccrual loans acquired from the Blue Ridgeacquisition.

Performing Troubled Debt Restructures (TDR's) increased $9.2 millionduring the quarter to $41.5 million, of which $1.9 millionis covered under loss-share.  The increase in TDRs during the quarter consists of performing loans that were renewed at rates or terms in line with current market transactions, but cautiously deemed as concessionary due to elevated risk in the specific loan sectors.  

OREO not covered by loss-share agreements totaled $20.9 millionat December 30, 2011, a decrease of $1.8 millionfrom the $22.7 millionreported at September 30, 2011.  The change primarily consisted of $9.5 millionin additions at fair value, $6.6 millionin valuation adjustments, and $5.2 millionin sales.

Capital Position

The Company continues to maintain strong capital ratios.  Shareholders' equity was $163.9 millionat December 31, 2011, an increase of $11.6 millionfrom December 31, 2010.  Tangible common book value per share was $9.60at December 31, 2011, an increase from $8.49at December 31, 2010and an increase from $9.59at September 30, 2011.  Core tangible book value, which excludes the very volatile mark-to-market component, was $9.49at December 31, 2011, a slight decrease from the $9.55at September 30, 2011.  All of the Bank's and Company's capital ratios exceeded the minimum thresholds established for a well-capitalized bank by regulatory measures.  

On January 17, 2012, the Board of Directors of BNC Bancorp declared a $0.05per share quarterly cash dividend on its common stock and Series B Preferred stock, payable February 24, 2012to shareholders of record on February 10, 2012.

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 $2.5 billionin assets.  Bank of North Carolinaprovides a complete line of banking and financial services to individuals and businesses through its 31 full-service banking offices in North and South Carolina.  The Bank's seven locations in South Carolinaoperate as BNC Bank.  Bank of North Carolinais 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 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 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) 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 acquisitions of Beach First, Regent, and Blue Ridgemay 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 Bancorp or at all.  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.  

QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except share and per share data)
(Unaudited)				For the
				Three Months Ended
				December 31, 2011		December 31, 2010		% Change
SUMMARY STATEMENTS OF OPERATIONS
	Interest income			$                   28,449		$                   25,329		12.3 %
	Interest expense			8,338		9,051		(7.9)
	Net interest income			20,111		16,278		23.6
	Provision for loan losses			8,158		12,000		(32.0)
	Net interest income after provision for loan losses			11,953		4,278		179.4
	Non-interest income			12,168		1,847		558.8
	Non-interest expense			23,524		17,202		36.8
	Income (loss) before income tax expense (benefit)			597		(11,077)		NM
	Income tax expense (benefit)			(801)		(5,021)		NM
	Net income (loss)			1,398		(6,056)		NM
	Preferred stock dividends and discount accretion			601		600		0.2
	Net income (loss) available to common shareholders			$                        797		$                    (6,656)		NM
PER SHARE DATA
	Earnings per share, basic			$                       0.08		$                      (0.61)		NM
	Earnings per share, diluted			0.08		(0.61)		NM
	Tangible common book value per share			9.60		8.49		13.0
Weighted average participating common shares:
	Basic			10,894,799		10,848,790
	Diluted			10,913,746		10,926,772
Period-end number of shares:
	Common			9,100,890		9,053,360
	Convertible preferred			1,804,566		1,804,566
PERFORMANCE RATIOS
	Return on average assets			0.24%		-1.11%
	Return on average common equity			2.78%		-22.77%
	Return on average tangible common equity			3.72%		-30.18%
	Net yield on earning assets (taxable equivalent)			4.18%		3.69%
	Average equity to average assets			6.83%		7.56%
	Allowance for loan losses as a % of total loans			1.81%		1.65%
	Nonperforming assets to total assets, end of period			6.57%		6.29%
		Nonperforming assets not covered by loss share		1.93%		2.75%
	Ratio of net charge-offs, non-covered portion, to
		average total loans, annualized		1.70%		1.62%
	NM = Not meaningful due to Prior Year loss

QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except share and per share data)
(Unaudited)				For the
				Year Ended
				December 31, 2011		December 31, 2010		% Change
SUMMARY STATEMENTS OF OPERATIONS
	Interest income			$                 103,343		$                   95,010		8.8 %
	Interest expense			32,920		34,747		(5.3)
	Net interest income			70,423		60,263		16.9
	Provision for loan losses			18,214		26,382		(31.0)
	Net interest income after provision for loan losses			52,209		33,881		54.1
	Non-interest income			20,803		28,813		(27.8)
	Non-interest expense			67,864		55,172		23.0
	Income before income tax expense			5,148		7,522		(31.6)
	Income tax expense (benefit)			(1,783)		(204)		774.0
	Net income			6,931		7,726		(10.3)
	Preferred stock dividends and discount accretion			2,404		2,196		9.5
	Net income available to common shareholders			$                     4,527		$                     5,530		(18.1)
PER SHARE DATA
	Earnings per share, basic			$                       0.45		$                       0.62		-27.4 %
	Earnings per share, diluted			0.45		0.61		(26.2)
	Tangible common book value per share			9.60		8.49		13.0
Weighted average participating common shares:
	Basic			10,877,590		9,262,369
	Diluted			10,894,131		9,337,392
Period-end number of shares:
	Common			9,100,890		9,053,360
	Convertible preferred			1,804,566		1,804,566
PERFORMANCE RATIOS
	Return on average assets			0.31%		0.38%
	Return on average common equity			4.12%		4.98%
	Return on average tangible common equity			5.56%		6.70%
	Net yield on earning assets (taxable equivalent)			3.93%		3.65%
	Average equity to average assets			7.11%		7.40%
	Allowance for loan losses as a % of total loans			1.81%		1.65%
	Nonperforming assets to total assets, end of period			6.57%		6.29%
		Nonperforming assets not covered by loss share		1.93%		2.75%
	Ratio of net charge-offs, non-covered portion, to
		average total loans, annualized		1.14%		1.39%

QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except share and per share data)
(Unaudited)				For the
				Three Months Ended
				December 31, 2011		September 30,  2011		June 30,  2011		March 31,  2011		December 31, 2010		December 31, 2009
SUMMARY STATEMENTS OF OPERATIONS
	Interest income			$                   28,449		$                   25,065		$                   24,787		$                   25,042		$                   25,329		$                   19,586
	Interest expense			8,338		8,197		8,021		8,364		9,051		7,550
	Net interest income			20,111		16,868		16,766		16,678		16,278		12,036
	Provision for loan losses			8,158		3,524		3,032		3,500		12,000		4,750
	Net interest income after provision for loan losses			11,953		13,344		13,734		13,178		4,278		7,286
	Non-interest income			12,168		3,839		2,371		2,425		1,847		2,930
	Non-interest expense			23,524		14,715		14,893		14,732		17,202		8,602
	Income (loss) before income tax expense (benefit)			597		2,468		1,212		871		(11,077)		1,614
	Income tax expense (benefit)			(801)		46		(381)		(647)		(5,021)		(173)
	Net income (loss)			1,398		2,422		1,593		1,518		(6,056)		1,787
	Preferred stock dividends and discount accretion			601		601		601		601		600		498
	Net income (loss) available to common shareholders			$                        797		$                     1,821		$                        992		$                        917		$                    (6,656)		$                     1,289
	Net interest income, as reported			$                   20,111		$                   16,868		$                   16,766		$                   16,678		$                   16,278		$                   12,036
		Tax-equivalent adjustment		1,406		1,392		1,322		1,475		1,494		1,218
	Net interest income, tax-equivalent			$                   21,517		$                   18,260		$                   18,088		$                   18,153		$                   17,772		$                   13,254
PER SHARE DATA
	Earnings per share, basic			$                       0.08		$                       0.18		$                       0.10		$                       0.09		$                      (0.61)		$                       0.18
	Earnings per share, diluted			0.08		0.18		0.10		0.09		(0.61)		0.18
Weighted average participating common shares:
	Basic			10,894,799		10,884,801		10,869,868		10,860,434		10,848,790		7,341,249
	Diluted			10,913,746		10,899,653		10,886,162		10,878,950		10,926,772		7,350,425
Period-end number of shares:
	Common			9,100,890		9,085,980		9,075,395		9,059,809		9,053,360		7,341,901
	Convertible preferred			1,804,566		1,804,566		1,804,566		1,804,566		1,804,566		-
PERFORMANCE RATIOS
	Return on average assets			0.24%		0.44%		0.30%		0.29%		-1.11%		0.44%
	Return on average common equity			2.78%		6.47%		3.67%		3.53%		-22.77%		5.41%
	Return on average tangible common equity			3.72%		8.65%		4.96%		4.84%		-30.18%		7.65%
	Net yield on earning assets (taxable equivalent)			4.18%		3.79%		3.84%		3.87%		3.69%		3.52%
	Average equity to average assets			6.83%		7.29%		7.25%		7.08%		7.56%		7.65%
	Nonperforming assets to total assets, end of period			6.57%		6.24%		6.60%		6.54%		6.29%		2.02%
		Nonperforming assets not covered by loss share		1.93%		2.75%		3.05%		3.03%		2.75%		2.02%
	Ratio of net charge-offs, non-covered portion, to
		average total loans, annualized		1.70%		0.70%		1.03%		1.05%		1.62%		1.55%

QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands)
(Unaudited)				As of
				December 31, 2011		December 31, 2010		% Change
SELECTED BALANCE SHEET DATA
	End of period balances
	Loans:
		Loans not covered by loss share		$              1,389,451		$              1,198,838		15.9 %
		Loans covered by loss share		320,032		309,342		3.5
		Allowance for loan losses		(31,008)		(24,813)		25.0
		Net loans		1,678,475		1,483,367		13.2
	Loans held for sale			9,596		6,751		42.1
	Investment securities			379,257		358,871		5.7
	Intangible assets			29,115		28,445		2.4
	Total assets			2,454,930		2,149,932		14.2
	Deposits:
		Non-interest bearing deposits		145,688		107,547		35.5
		Interest-bearing demand and savings		909,402		841,062		8.1
		Time deposits		1,063,097		879,461		20.9
		Total deposits		2,118,187		1,828,070		15.9
	Borrowed funds			163,924		157,920		3.8
	Total interest-bearing liabilities			2,136,423		1,878,443		13.7
	Shareholders' equity:
		Preferred equity		47,398		46,918		1.0
		Common equity		115,447		112,104		3.0
		Accumulated other comprehensive income (loss)		1,010		(6,798)		(114.9)
		Total shareholders' equity		163,855		152,224		7.6

				As of
				December 31, 2011		September 30,  2011		June 30,  2011		March 31, 2011		December 31, 2010		December 31, 2009
SELECTED BALANCE SHEET DATA
	End of period balances
	Loans:
		Loans not covered by loss share		$              1,389,451		$              1,309,893		$              1,244,862		$              1,227,291		$              1,198,838		$              1,079,179
		Loans covered by loss share		320,032		262,673		283,685		301,436		309,342		-
		Allowance for loan losses		(31,008)		(24,177)		(23,373)		(24,325)		(24,813)		(17,309)
		Net loans		1,678,475		1,548,389		1,505,174		1,504,402		1,483,367		1,061,870
	Loans held for sale			9,596		6,753		1,909		1,679		6,751		2,766
	Investment securities			379,257		348,989		339,381		333,265		358,871		366,506
	Intangible assets			29,115		28,154		28,249		28,343		28,445		27,699
	Total assets			2,454,930		2,197,758		2,146,745		2,157,280		2,149,932		1,634,185
	Deposits:
		Non-interest bearing deposits		145,688		130,978		128,694		116,286		107,547		66,801
		Interest-bearing demand and savings		909,402		833,190		835,967		849,392		841,062		578,329
		Time deposits		1,063,097		871,436		885,922		905,173		879,461		704,748
		Total deposits		2,118,187		1,835,604		1,850,583		1,870,851		1,828,070		1,349,878
	Borrowed funds			163,924		190,172		129,833		120,939		157,920		150,996
	Total interest-bearing liabilities			2,136,423		1,894,798		1,851,722		1,875,504		1,878,443		1,434,073
	Shareholders' equity:
		Preferred equity		47,398		47,278		47,158		47,038		46,918		29,304
		Common equity		115,447		114,924		113,400		112,685		112,104		91,797
		Accumulated other comprehensive income (loss)		1,010		373		(2,989)		(5,512)		(6,798)		5,105
		Total shareholders' equity		163,855		162,575		157,569		154,211		152,224		126,206

QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands)
(Unaudited)
				For the Three Month Period Ended
				December 31, 2011		September 30,      2011		June 30, 2011		March 31,  2011		December 31, 2010		December 31, 2009
SELECTED BALANCE SHEET DATA
	Quarterly average balances
	Loans:
		Loans not covered by loss share		$              1,358,455		$              1,274,530		$              1,238,661		$              1,210,550		$              1,152,263		$              1,058,657
		Loans covered by loss share		291,353		273,179		292,561		305,389		320,052		-
		Total loans		1,649,808		1,547,709		1,531,222		1,515,939		1,472,315		1,058,657
	Investment securities, at amortized cost			345,613		334,709		323,661		352,480		344,146		408,781
	Total earning assets			2,040,766		1,913,795		1,888,007		1,901,574		1,899,557		1,492,702
	Total assets			2,359,374		2,179,220		2,144,753		2,150,436		2,155,061		1,616,235
	Deposits:
		Non-interest bearing deposits		139,928		129,390		123,398		110,957		110,401		59,458
		Interest-bearing demand and savings		887,136		832,536		839,169		845,630		820,640		560,697
		Time deposits		1,015,273		889,363		884,100		887,338		903,967		716,199
		Total deposits		2,042,337		1,851,289		1,846,667		1,843,925		1,835,008		1,336,354
	Borrowed funds			135,118		159,213		137,020		144,783		131,684		140,812
	Total interest-bearing liabilities			2,037,527		1,881,112		1,860,289		1,877,751		1,856,291		1,417,708
	Shareholders' equity			161,039		158,926		155,584		152,250		162,865		123,659

LOAN MIX AND STRATIFICATION STATISTICS
BNC BANCORP
(Dollars in thousands)
(Unaudited)
				As of December 31,
				2011		2010		% Change
Loans Not Covered Under Loss Share Agreements:
	Construction, A&D, and Land			$                     203.2		$                     200.9		1.1
		Residential Construction		25.0		29.9		(16.4)
			Presold	13.4		12.2		9.8
			Speculative	11.6		17.7		(34.5)
			Loan size - over $400,000	2.9		6.8		(57.4)
			Loan size - $200,000 to $400,000	3.4		4.8		(29.2)
			Loan size - under $200,000	5.3		6.1		(13.1)
		Commercial Construction		71.7		44.9		59.7
			Loan size - $5 million and over	9.3		12.5		(25.6)
			Loan size - $3 million to $5 million	8.5		8.0		6.3
			Loan size - $1 million to $3 million	32.4		14.9		117.5
			Loan size - under $1 million	21.5		9.5		126.3
		Residential and Commercial A&D		14.0		27.1		(48.3)
			Loan size - $5 million to $6 million	-		11.7		(100.0)
			Loan size - $3 million to $5 million	-		-		-
			Loan size - $1 million to $3 million	10.1		10.0		1.0
			Loan size - under $1 million	3.9		5.4		(27.8)
		Land		92.5		99.0		(6.6)

LOAN MIX AND STRATIFICATION STATISTICS
BNC BANCORP
(Dollars in thousands)
(Unaudited)				Trends
				December 31, 2011		September 30, 2011		June 30,  2011		March 31, 2011		December 31, 2010
Loans Not Covered Under Loss Share Agreements:
	Construction, A&D, and Land			$                     203.2		$                     212.8		$                     196.6		$                     194.1		$                     200.9
		Residential Construction		25.0		25.2		24.9		28.0		29.9
			Presold	13.4		13.6		12.2		12.3		12.2
			Speculative	11.6		11.6		12.7		15.7		17.7
			Loan size - over $400,000	2.9		1.5		3.8		4.5		6.8
			Loan size - $200,000 to $400,000	3.4		1.0		3.7		1.7		4.8
			Loan size - under $200,000	5.3		9.1		5.2		9.5		6.1
		Commercial Construction		71.7		73.5		54.4		43.9		44.9
			Loan size - $5 million and over	9.3		14.1		12.6		7.4		12.5
			Loan size - $3 million to $5 million	8.5		8.7		7.8		10.9		8.0
			Loan size - $1 million to $3 million	32.4		34.5		20.9		11.4		14.9
			Loan size - under $1 million	21.5		16.2		13.1		14.2		9.5
		Residential and Commercial A&D		14.0		21.6		22.0		23.4		27.1
			Loan size - $5 million to $6 million	-		6.1		6.0		6.1		11.7
			Loan size - $3 million to $5 million	-		-		-		-		-
			Loan size - $1 million to $3 million	10.1		11.1		12.1		11.9		10.0
			Loan size - under $1 million	3.9		4.4		3.9		5.4		5.4
		Land		92.5		92.5		95.3		98.8		99.0
			Residential Buildable Lots	32.8		33.1		36.0		40.3		42.8
			Commercial Buildable Lots	15.3		13.5		13.5		14.7		13.6
			Land Held for Development	25.4		26.1		26.6		26.8		26.9
			Raw and Agricultural Land	19.0		19.8		19.2		17.0		15.7
	Commercial Real Estate			$                     723.5		$                     649.5		$                     605.8		$                     588.2		$                     548.8
		Multi-Family		38.1		34.4		34.4		43.2		44.5
		Churches		36.5		36.2		28.2		26.9		26.0
		Retail		515.9		457.7		425.1		400.4		372.1
			Owner Occupied	153.4		137.5		136.6		123.4		118.2
			Investment	362.5		319.9		288.5		277.0		253.9
			Loan size - $5 million to $9 million	80.3		61.9		51.7		54.3		45.8
			Loan size - $3 million to $5 million	56.9		61.2		54.3		50.9		47.4
			Loan size - $1 million to $3 million	130.1		107.8		98.5		91.8		82.7
			Loan size - under $1 million	95.2		89.0		84.0		80.0		78.0
		Industrial		133.0		121.2		118.1		117.7		106.2
			Owner Occupied	64.2		61.1		59.6		58.7		51.8
			Investment	68.8		60.1		58.5		59.0		54.4
			Loan size - $5 million to $6 million	-		-		-		-		-
			Loan size - $3 million to $5 million	7.5		7.6		7.6		7.7		4.4
			Loan size - $1 million to $3 million	35.2		27.2		26.0		25.1		23.8
			Loan size - under $1 million	26.1		25.3		24.9		26.2		26.2

SOURCE BNC Bancorp