FOR RELEASE:

January 26, 2021

Mark A. Jeffries

Executive Vice President

Chief Financial Officer

Office: 910-892-7080 and Direct: 910-897-3603

markj@SelectBank.com

SelectBank.com

SELECT BANCORP REPORTS

FOURTH QUARTER AND YEAR-END 2020 EARNINGS

DUNN, NC . . . Select Bancorp, Inc. (NASDAQ: SLCT) (the "Company"), the holding company for Select Bank & Trust Company (the "Bank"), today reported net income for the year ended December 31, 2020 of $8.2 million, or $0.46 and $0.45 per basic and diluted share, respectively, as compared to net income for the year ended December 31, 2019 of $13.0 million, or $0.69 and $0.68 per basic and diluted share, respectively. This was a decrease of 37.4% in net income compared to the year ended December 31, 2019. Net income per share declined approximately 33.3% for basic and 33.8% for diluted per share for the year ended December 31, 2019. The decline in net income is primarily attributable to an increase of $5.8 million in loan loss allowance provision during 2020 as compared to 2019, incurring debt extinguishment expenses of $1.6 million for the payoff of $45.0 million of FHLB advances with a composite rate of 2.76% during the 2020 4th quarter, recognized $755,000 in integration expenses during the year related to the acquisition of three branches in western North Carolina, and $2.3 million in deferred interest income related to COVID-19 loan modifications. These items were partially offset by $2.6 million in revenue from loan fees associated with loans originated by the Bank as part of the U.S. Small Business Administration ("SBA") Paycheck Protection Program ("PPP"), recognized under the effective interest rate method. The number of weighted shares outstanding decreased due to the repurchase by the Company of 834,608 shares of common stock completed during 2020. Management expects the repurchase of shares to continue in 2021 under the Company's previously announced stock repurchase plan.

For the three-month period ended December 31, 2020, the Company reported net income of $3.9 million, or $0.22 per basic and diluted share, respectively, as compared to net income of $2.5 million, or $0.14 per basic and diluted share, respectively, for the three months ended September 30, 2020, representing an increase of 57.1% in net income for the 2020 fourth quarter.

Initiatives to expand the market footprint of the franchise reduced net income in 2020 compared to 2019 due to the increased expenses associated with the opening of a new branch in Cornelius, North Carolina (the Charlotte area) and the acquisition of three western North Carolina branches mentioned above.

Net Interest Income and Net Interest Margin

Net interest income was $16.0 million for the fourth quarter of 2020 compared to $11.9 million for the same period in 2019. On a comparative quarter basis, the Company's total interest income was positively affected by increased loan balances due to growth. Loan yields decreased but were partially offset by increased loan fee income primarily from PPP loan forgiveness. On a comparative quarter basis, the Com pany's total interest income was positively affected by increased investment balances due to growth which was partially offset by decreasing investment yields. Average total interest-earning assets were $1.6 billion in the fourth quarter of 2020 compared to $1.2 billion for the same period in 2019. The yield on those assets decreased 27 basis points,

from 5.05% in the fourth quarter of 2019 to 4.78% for the same period in 2020. This was primarily due to lower rates on recently purchased investments and cash in other banks on a comparative quarter basis.

The Company's average interest-bearing liabilities increased by $333.4 million, to $1.1 billion for the quarter ended December 31, 2020, from $801.4 million for the fourth quarter of 2019. The cost of those funds decreased from 1.46% to 0.94%, or 52 basis points. During the fourth quarter of 2020, the Company's net interest margin was 4.10% and net interest spread was 3.84%. In the fourth quarter of 2019, net interest margin was 4.05% and net interest spread was 3.59%.

Net interest income was $52.4 million for the year ended December 31, 2020, an increase of $5.6 million from the $46.9 million in net interest income reported for the year ended December 31, 2019. The Company's total interest income increased by approximately $4.8 million in 2020 versus 2019, and the cost of funds decreased by approximately $797,000 from the prior period. The Company's increase in total interest income was fueled by an increase in loans and purchases of securities. Average total interest-earning assets were $1.4 billion for 2020 compared with $1.2 billion for 2019, while the yield on those assets decreased 46 basis points from 5.03% to 4.57%, which was primarily due to the decrease in rates on purchased investment securities and other earning assets.

The Company's average interest-bearing liabilities increased by $183.4 million, to $978.6 million for the year ended December 31, 2020, from $795.2 million for the year ended December 31, 2019, with the cost of those funds decreasing from 1.45% to 1.10%, or 35 basis points. For the year ended December 31, 2020, the Company's net interest margin was 3.79% and net interest spread was 3.47%. For the year ended December 31, 2019, net interest margin was 4.04% and net interest spread was 3.58%.

Provision for Loan Losses and Asset Quality

During the fourth quarter of 2020, the Company recorded a provision for loan losses of $400,000, based primarily on loan growth and adjustments to qualitative loan factors related to trends in the loan portfolio. On a comparative quarter basis, the Company had a $302,000 provision for the fourth quarter of 2019. In the third quarter of 2020, the Company recorded a provision for loan losses of $1.6 million, based primarily on economic disruptions due to COVID-19, net charge-offs of $104,000 and changes in qualitative loan factors during the quarter. In the fourth quarter of 2020, the Company incurred net recoveries of $147,000, a net recovery rate of 0.05% of average loans, compared to a net charge-off rate of 0.04% in the third quarter of 2020.

For the year ended December 31, 2020, the Company recorded a provision for loan losses of $6.2 million, compared to a provision of $438,000 for 2019. This increase for 2020 was based primarily on the market disruption from COVID-19 and its effect on economic indicators, loan growth, net charge-offs incurred and the increase in qualitative loan factors. The net charge-off ratio for the year ended December 31, 2020 was 0.04%, compared to 0.08% for the year ended December 31, 2019.

The allowance for loan losses as a percentage of gross loans at December 31, 2020 was 1.08% compared to 0.81% at December 31, 2019. At December 31, 2020 the allowance for loan losses amounted to $14.1 million and the credit mark on acquired loans amounted to $6.4 million which could be used to absorb loan charge offs.

Non-interest Income

Non-interest income for the quarter ended December 31, 2020 was $1.5 million, an increase of $95,000 from $1.4 million in the fourth quarter of 2019. Service charges on deposit accounts decreased $12,000, to $291,000 for the quarter ended December 31, 2020, from $303,000 for the fourth quarter of 2019. Other non-deposit fees and income increased $7,000 from the fourth quarter of 2019 to the fourth quarter of 2020. Fees from presold mortgages increased by $100,000 in the fourth quarter of 2020 to $248,000, from $148,000 in the fourth quarter of 2019. The Company did not sell any investment securities in the fourth quarter of 2020 or fourth quarter of 2019.

Non-interest income for the year ended December 31, 2020 was $6.1 million, an increase of $701,000, or 12.9%,

from the year ended December 31, 2019. Service charges on deposit accounts decreased $69,000, to $1.1 million, for the year ended December 31, 2020 from $1.2 million for the year ended December 31, 2019. Other non- deposit fees and income increased $158,000 from the year ended December 31, 2019 to the year ended December 31, 2020. Fees from presold mortgages increased non-interest income by $660,000 in 2020 to $1.4 million from $753,000 for 2019. The Company sold two investment securities for a gain of $48,000 in 2019. The Company did not sell any investment securities during 2020.

Non-interest Expenses

Non-interest expenses increased by $3.0 million, or 33.4%, to $12.1 million for the quarter ended December 31, 2020, from $9.1 million for the same period in 2019. The following are highlights of the significant categories of non-interest expenses during the fourth quarter of 2020 compared to the same period in 2019:

  • Personnel expenses increased $825,000, to $6.0 million, primarily due to increased staff for new and acquired branches, employment taxes and benefits costs.
  • Foreclosed real estate-related expense increased $233,000, primarily due to write-downs and maintenance expenses.
  • Deposit insurance expense increased by $355,000.
  • Debt extinguishment expenses of $1.6 million were incurred due to the payoff of FHLB advances.
  • Merger/integration-relatedexpenses associated with branch purchases and divestitures decreased by $171,000.
  • Other non-interest expenses increased by $193,000, primarily due to additional branches and other various administrative related non-interest expenses.

Non-interest expenses increased by $5.2 million, or 14.8%, to $41.9 million for the twelve months ended December 31, 2020, from $35.1 million for the same period in 2019. The following are highlights of the significant categories of non-interest expenses during the twelve months ended December 31, 2020 versus 2019:

  • Personnel expenses increased $2.9 million, to $23.1 million, primarily due to additions in branch staff plus cost of living increases and related employment taxes and benefit costs.
  • Occupancy and equipment expenses increased by $216,000 primarily due to branch acquisitions and branch start-up.
  • Deposit insurance expense increased $624,000.
  • Professional fees decreased by $234,000.
  • Information systems expense increased $609,000 due primarily to additional software and security costs plus additional accounts from branch acquisitions.
  • Debt extinguishment expenses of $1.6 million were incurred due to the payoff of FHLB advances.
  • Merger/integration-relatedexpenses increased by $349,000 primarily due to the acquisition of three branches in western North Carolina during 2020.
  • Foreclosed real estate expenses increased $623,000 due to write downs and disposal costs in 2020.

Income Taxes

The Company's effective tax rate was 22.1% and 22.4% for the quarters ended December 31, 2020 and 2019, respectively. The Company's effective tax rate was 21.3% and 22.1% for the years ended December 31, 20 20 and 2019, respectively.

Balance Sheet and Capital

Total assets at December 31, 2020 were $1.7 billion, a 35.6% increase from a year earlier. Gross loans at December 31, 2020 were $1.3 billion, up $274.4 million, or 26.6%, from a year earlier; total deposits were $1.5 billion, an increase of $493.0 million, or 49.7%, from a year earlier.

Retail deposit growth (excludes brokered deposits and internet time deposits) grew at a rate of 49.65% for 2020. Wholesale deposits decreased from $45.0 million at December 31, 2019 to $4.6 million at December 31, 2020 as we continued to emphasize core deposit growth to replace wholesale deposits.

Comments of the Chief Executive Officer

William L Hedgepeth, II, President and CEO of the Company, commented, "Our commitment to expand our market footprint and implement our initiatives continued in 2020 even as we addressed major disruptions in the economy caused by the COVID-19 pandemic. We opened the Cornelius branch in the Charlotte market in early February plus acquired three branches in western North Carolina in mid-April during the height of the pandemic. We were very involved in assisting businesses in the communities we serve with the Small Business Administration's Paycheck Protection Program (PPP) and working hand-in-hand with customers who requested temporary loan modifications to provide time for those businesses to adopt changes to their operations as they adjusted to the new normal."

"With the onset of the COVID-19 pandemic, Select Bank & Trust stood ready to assist our customers. We granted 467 COVID-19 deferrals totaling $254.2 million at the beginning of the pandemic. As of December 31, 2020, we had 48 COVID-19 deferrals outstanding that totaled $32.7 million or 2.5% of total loans outstanding. We remain prepared to work with our customers that might need assistance in 2021."

"We also originated 1,242 SBA PPP loans totaling $95.2 million. As of December 31, 2020, we had 786 SBA

  1. loans remaining with outstanding balances totaling $55.5 million or 4.3% of total loans outstanding. Many of those loans are in varying stages of forgiveness. In 2020 we recognized $2.6 million in SBA PPP fee income. We stand ready to assist our customers and prospective customers in 2021 should they decide to pursue SBA
    PPP loans for their businesses."

Mr. Hedgepeth added, "We continue to review opportunities for expansion and analyze each with a discipline designed to properly deploy the capital entrusted to us. Our share repurchase program remains active, and we are able to return capital to shareholders by buying our shares when market conditions warrant. We intend to retain adequate capital for expansion which meet our criteria."

About Select Bank & Trust Company

Select Bank & Trust has 22 full-service offices in these North Carolina communities: Dunn, Burlington, Charlotte, Clinton, Cornelius (Charlotte), Elizabeth City, Fayetteville, Franklin, Goldsboro, Greenville, Highlands, Holly Springs (Raleigh area), Leland, Lillington, Lumberton, Morehead City, Raleigh, Sylva and Wilmington, North Carolina; in the following South Carolina communities: Blacksburg and Rock Hill; and in Virginia Beach, Virginia. The Bank also has loan production offices in Wilson, Durham and Winston-Salem, North Carolina.

About Select Bancorp, Inc.

Select Bancorp, Inc. is a bank holding company headquartered in Dunn, North Carolina. The Company primarily conducts operations through its wholly owned subsidiary, Select Bank & Trust Company, a North Carolina-chartered commercial bank that provides a full suite of banking services through its offices in North Carolina, South Carolina, and Virginia. The Company's common stock is listed on the Nasdaq Global Market under the symbol "SLCT".

Non-GAAP Financial Measures

Certain financial measures we use to evaluate our performance and discuss in this release and the accompanying tables are identified as being "non-GAAP financial measures." In accordance with the rules of the Securities and Exchange Commission, or the SEC, we classify a financial measure as being a non-GAAP (generally accepted accounting principles) financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of operations, balance sheet or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both.

The non-GAAP financial measures that we discuss in this release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in this release may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar, or with names similar, to the non-GAAP financial measures we have discussed in this release when comparing such non-GAAP financial measures.

Tangible book value per share is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as shareholders' equity less goodwill and core deposit intangibles; and (b) tangible book value per share as tangible common equity (as described in clause (a)) divided by shares of common stock outstanding. For tangible book value per share, the most directly comparable financial measure calculated in accordance with GAAP is our book value per share. A reconciliation of tangible book value per share to book value per share is included in the tables that accompany this release.

We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.

Important Note Regarding Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of our goals and expectations with respect to earnings, revenue, and expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to anticipated market share growth, and (ii) statements preceded by, followed by or that include the words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan," "projects," "outlook" or similar expressions. The actual results might differ materially from those projected in the forward-looking statements for various reasons, including, but not limited to: the ongoing COVID-19 pandemic and measures intended to prevent its spread, which include wide disruptions to business activity that may impact the financial strength of our borrowers; our ability to manage growth or achieve it at all; substantial changes in financial markets; our ability to obtain the synergies and expense efficiencies anticipated from our acquisition activity and branch divestures and consolidations; regulatory changes; impacts from the recent presidential election, change in congressional leadership, and change in executive branch leadership, including regulatory agendas that may impact the business climate in which we operate; changes in interest rates; loss of deposits and loan demand to other savings and financial institutions; adverse economic conditions that impact our borrowers' ability to pay their debts when due; and changes in real estate values and the real estate market. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the Company's SEC filings, including its periodic reports under the Securities Exchange Act of 1934, as amended, copies of which are available upon request from the Company. Except as required by law, the Company assumes no obligation to update the forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

###

SELECT BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

December 31, 2020

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2019

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Audited)

(Dollars in thousands)

ASSETS

Cash and due from banks

$

23,324

$

Interest-earning deposits in other banks

87,399

Federal funds sold

5,364

Investment securities available for sale, at fair value

194,492

Loans held for sale

2,064

Loans

1,304,384

Allowance for loan losses

(14,108)

NET LOANS

1,290,276

Accrued interest receivable

5,110

Stock in Federal Home Loan Bank of Atlanta, at cost

1,147

Other non-marketable securities

709

Foreclosed real estate

2,172

Premises and equipment, net

20,587

Right of use lease asset

8,558

Bank owned life insurance

30,432

Goodwill

42,907

Core deposit intangible ("CDI")

1,513

Other assets

13,991

TOTAL ASSETS

$

1,730,045

$

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits:

Demand

$

395,916

$

Savings

51,843

Money market and NOW

649,677

Time

388,381

TOTAL DEPOSITS

1,485,817

Short-term debt

-

Long-term debt

12,372

Lease Liability

8,930

Accrued interest payable

246

Accrued expenses and other liabilities

7,312

TOTAL LIABILITIES

1,514,677

Shareholders' Equity

Common stock

17,507

Additional paid-in-capital

135,058

Retained earnings

60,838

Common stock issued to deferred compensation trust

(2,416)

Directors' Deferred Compensation Plan Rabbi Trust

2,416

Accumulated other comprehesive income

1,965

TOTAL SHAREHOLDERS' EQUITY

215,368

25,068

$

24,037

$

249,541

157,521

8,046

9,726

87,434

62,958

2,945

3,455

1,283,457

1,249,999

(13,561)

(12,054)

1,269,896

1,237,945

4,486

4,400

3,059

3,059

718

718

3,237

3,561

20,883

20,893

8,756

8,953

30,271

30,110

41,914

41,914

1,677

1,856

14,015

7,854

1,771,946

$

1,618,960

$

408,209

$

400,098

$

51,629

52,597

610,275

495,609

402,667

390,449

1,472,780

1,338,753

20,000

20,000

37,372

37,372

9,089

9,243

449

457

18,889

1,597

1,558,579

1,407,422

17,787

17,863

137,130

137,559

56,917

54,460

(2,352)

(2,553)

2,352

2,553

1,533

1,656

213,367

211,538

20,030

$

19,110

35,544

50,920

11,673

9,047

64,738

72,367

1,606

928

1,039,514

1,029,975

(10,586)

(8,324)

1,028,928

1,021,651

3,839

4,189

3,059

3,045

718

719

3,737

3,533

17,868

17,791

8,414

8,596

29,950

29,789

24,579

24,579

1,431

1,610

7,380

7,202

1,263,494

$

1,275,076

250,031

$

240,305

41,815

43,128

306,051

280,145

384,754

429,260

982,651

992,838

20,000

-

37,372

57,372

8,669

8,813

536

578

2,181

2,700

1,051,409

1,062,301

18,056

18,330

138,788

140,870

53,779

52,675

(2,791)

(2,815)

2,791

2,815

1,462

900

212,085

212,775

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY

$

1,730,045

$

1,771,946

$

1,618,960

$

1,263,494

$

1,275,076

SELECT BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

For the Three Months Ended

For the Twelve Months Ended

December 31,

September

March 31,

December 31,

December 31,

December 31,

2020

30, 2020

June 30, 2020

2020

2019

2020

2019

(Dollars in thousands, except for share amounts)

INTEREST INCOME

Loans

$

17,901

$

15,404

$

Federal funds sold and interest-earning

deposits in other banks

52

54

Investments

752

367

TOTAL INTEREST INCOME

18,705

15,825

INTEREST EXPENSE

Money market, NOW and savings deposits

1,041

891

Time deposits

1,269

1,415

Short-term debt

131

145

Long-term debt

240

263

TOTAL INTEREST EXPENSE

2,681

2,714

NET INTEREST INCOME

16,024

13,111

PROVISION FOR LOAN LOSSES

400

1,638

NET INTEREST INCOME AFTER PROVISION

FOR LOAN LOSSES

15,624

11,473

NON-INTEREST INCOME

Fees on the sale of mortgages

248

517

Gain on securities

-

-

Service charges on deposit accounts

291

257

Other fees and income

1,002

950

TOTAL NON-INTEREST INCOME

1,541

1,724

NON-INTEREST EXPENSE

Personnel

5,977

5,742

Occupancy and equipment

986

1,008

Deposit insurance

374

370

Professional Fees

430

399

CDI amortization

164

179

Merger/acquisition related expenses

-

7

Information systems

1,049

1,043

Foreclosed-related expenses

342

228

Debt extinguishment

1,616

-

Other

1,193

1,091

TOTAL NON-INTEREST EXPENSE

12,131

10,067

INCOME BEFORE INCOME TAXES

5,034

3,130

INCOME TAXES

1,113

673

NET INCOME

$

3,921

$

2,457

$

NET INCOME PER COMMON SHARE OUTSTANDING

Basic

$

0.22

$

0.14

$

Diluted

$

0.22

$

0.14

$

WEIGHTED AVERAGE COMMON

Basic Outstanding Shares

17,637,540

17,847,913

Diluted Outstanding Shares

17,661,922

17,866,822

14,086

$

13,589

$

14,124

$

60,980

$

54,605

33

168

258

307

1,838

381

421

434

1,921

2,003

14,500

14,178

14,816

63,208

58,446

648

348

420

2,928

1,616

1,576

1,931

2,075

6,191

8,061

141

87

6

504

62

281

352

447

1,136

1,817

2,646

2,718

2,948

10,759

11,556

11,854

11,460

11,868

52,449

46,890

1,933

2,273

302

6,244

438

9,921

9,187

11,566

46,205

46,452

355

293

148

1,413

753

-

-

-

-

48

206

338

303

1,092

1,161

850

813

995

3,615

3,457

1,411

1,444

1,446

6,120

5,419

5,786

5,632

5,152

23,137

20,278

986

931

973

3,911

3,695

76

(12)

19

808

184

451

372

503

1,652

1,886

195

179

193

717

825

709

39

171

755

406

972

1,038

974

4,102

3,492

187

5

109

762

140

-

-

-

1,616

-

1,140

1,063

1,000

4,487

4,234

10,502

9,247

9,094

41,947

35,140

830

1,384

3,918

10,378

16,731

149

280

877

2,215

3,696

681

$

1,104

$

3,041

$

8,163

$

13,035

0.04

$

0.06

$

0.17

$

0.46

$

0.69

0.04

$

0.06

$

0.16

$

0.45

$

0.68

18,013,863

18,255,351

18,414,393

17,937,596

19,016,808

18,030,136

18,287,064

18,460,118

17,961,258

19,063,237

Select Bancorp, Inc.

Asset quality

For Periods Ended

December 31,

September

March 31,

December 31,

December 31,

December 31,

2020

30, 2020

June 30, 2020

2020

2019

2020

2019

(Dollars in thousands, except for share amounts, unaudited)

Non-accrual loans

$

6,790

$

7,695

$

7,979

$

7,201

$

5,941

$

6,790

$

5,941

Accruing TDRs

7,506

6,044

6,420

5,619

6,207

7,506

6,207

Total non-performing loans

14,296

13,739

14,399

12,820

12,148

14,296

12,148

Foreclosed real estate

2,172

3,237

3,561

3,737

3,533

2,172

3,533

Total non-performing assets

$

16,468

$

16,976

$

17,960

$

16,557

$

15,681

$

16,468

$

15,681

Accruing loans past due 90 days or more

$

802

$

1,548

$

1,326

$

1,182

$

1,231

$

802

$

1,231

Allowance for loan losses

$

14,108

$

13,561

$

12,054

$

10,586

$

8,324

$

14,108

$

8,324

Non-performing loans to period ending loans

1.10%

1.07%

1.15%

1.23%

1.18%

1.10%

1.18%

Non-performing loans & accruing loans past

due 90 days or more to period ending loans

1.16%

1.19%

1.26%

1.35%

1.30%

1.16%

1.30%

Allowance for loans to period end loans

1.08%

1.06%

0.96%

1.02%

0.81%

1.08%

0.81%

Allowance for loans to non-performing loans

99%

99%

84%

83%

69%

99%

69%

Allowance for loans to non-performing Assets

86%

80%

67%

64%

53%

86%

53%

Allowance for loans to non-performing Assets

and accruing loans past due 90 days or more

82%

73%

63%

60%

49%

82%

49%

Non-performing assets to total assets

0.95%

0.96%

1.11%

1.31%

1.23%

0.95%

1.23%

Non-performing assets to accruing loans

past due 90 days or more to total assets

1.00%

1.05%

1.19%

1.40%

1.33%

1.00%

1.33%

SELECT BANCORP, INC.

Reconciliation of GAAP to Non-GAAP Measures

($ in thousands, except per share data, unaudited)

For the Three Months Ended

For the Twelve Months Ended

December 31,

September

March 31,

December 31,

December 31,

December 31,

2020

30, 2020

June 30, 2020

2020

2019

2020

2019

Net interest margin:

Net Interest Margin-tax equivalent (1)

$

16,075

$

13,141

$

11,883

$

11,489

$

11,901

$

52,588

$

47,037

Purchased loan accretion and early payoff charges

(506)

(455)

(620)

(105)

(226)

(1,581)

(904)

Net Interest Margin(2) (Non-GAAP)

$

15,569

$

12,686

$

11,263

$

11,384

$

11,675

$

51,007

$

46,133

Loans receivable interest income:

Loans receivable interest income

$

17,913

$

15,415

$

14,097

$

13,600

$

14,135

$

61,025

$

54,645

Purchased loan accretion and early payoff charges

(506)

(455)

(620)

(105)

(226)

(1,581)

(904)

Loans receivable interest income (Non-GAAP)

$

17,407

$

14,960

$

13,477

$

13,495

$

13,909

$

59,444

$

53,741

Acquired and non-acquired loans:

Acquired loans recievable

$

180,152

$

199,794

$

213,466

$

122,363

$

129,595

$

180,152

$

129,595

Non-acquired loans receivable

1,124,232

1,083,663

1,036,533

917,151

900,380

1,124,232

900,380

Total gross loans receivable

$

1,304,384

$ 1,283,457

$ 1,249,999

$

1,039,514

$

1,029,975

$ 1,304,384

$ 1,029,975

% Acquired

13.8%

15.6%

17.1%

11.8%

12.6%

13.8%

12.6%

Non-acquired loans

$

1,124,232

$ 1,083,663

$ 1,036,533

$

917,151

$

900,380

$ 1,124,232

$

900,380

Allowance for loan losses

14,108

13,561

12,054

10,586

8,324

14,108

8,324

Allowance for loan losses to non-acquired loans (Non-GAAP)

1.25%

1.25%

1.16%

1.15%

0.92%

1.25%

0.92%

Total gross loan receivable

$

1,304,384

$ 1,283,457

$ 1,249,999

$

1,039,514

$

1,029,975

$ 1,304,384

$ 1,029,975

Allowance for loan losses

14,108

13,561

12,054

10,586

8,324

14,108

8,324

Allowance for loan losses to total gross loans receivable

1.08%

1.06%

0.96%

1.02%

0.81%

1.08%

0.81%

For Periods Ended

December 31,

September

March 31,

December 31,

December 31,

December 31,

2020

30, 2020

June 30, 2020

2020

2019

2020

2019

Tangible common equity

Total shareholders' equity

$

215,368

$

213,367

$

211,538

$

212,085

$

212,775

$

215,368

$

212,775

Adjustment:

Goodwill

42,907

41,914

41,914

24,579

24,579

42,907

24,579

Core deposit intangibles

1,513

1,677

1,856

1,431

1,610

1,513

1,610

Tangible common equity

$

170,948

$

169,776

$

167,768

$

186,075

$

186,586

$

170,948

$

186,586

Common shares outstanding(3)

17,507,103

17,786,552

17,862,554

18,055,692

18,330,058

17,507,103

18,330,058

Book value per common share(4)

$

12.30

$

12.00

$

11.84

$

11.75

$

11.61

$

12.30

$

11.61

Tangible book value per common share(5)

$

9.76

$

9.55

$

9.39

$

10.31

$

10.18

$

9.76

$

10.18

  1. Net interest margin-tax equivalent reflects tax-exempt income on a tax-equivalent basis.
  2. Net interest margin-core and yield on loans - core excludes the impact of purchase accounting accretion, loan payoff charges and related deferred fees recognized related to early loan repayments.
  3. Excludes the dilutive effect of common stock issuable upon exercise of stock options.
  4. We calculate book value per common share as shareholders' equity less preferred stock at the end of the relevant period divided by the outstanding number of shares of our common stock at the end of the relevant period.
  5. We calculate the tangible book value per common share as total shareholders' equity less goodwill, preferred stock and core deposit intangibles, divided by the number of outstanding shares of our common stock at the end of the relevant period.

Select Bancorp, Inc.

Selected Financial Information and Other Data ($ in thousands, except per share data)

F o r t h e Q u a rt e r E n d e d

F o r t h e Ye a r E n d e d

De c e m be r 31,

S e pte m be r 30,

J une 30,

M a rc h 31,

De c e m be r 31,

De c e m be r 31,

De c e m be r 31,

De c e m be r 31,

2020

2020

2020

2020

2019

2020

2019

2018

S u m m a ry o f O p e ra t io n s :

To ta l inte re s t inc o m e

$

18,705

$

15,825

$

14,500

$

14,178

$

14,816

$

63,208

$

58,446

$

56,835

To ta l inte re s t e xpe ns e

2,681

2,714

2,646

2,718

2,948

10,759

11,556

9,450

Ne t inte re s t inc o m e

16,024

13,111

11,854

11,460

11,868

52,449

46,890

47,385

P ro vis io n fo r lo a n lo s s e s

400

1,638

1,933

2,273

302

6,244

438

(156)

Ne t inte re s t inc o m e a fte r pro vis io n

15,624

11,473

9,921

9,187

11,566

46,205

46,452

47,541

No ninte re s t inc o m e

1,541

1,724

1,411

1,444

1,446

6,120

5,419

4,701

M e rge r/a c quis itio n re la te d e xpe ns e s

-

7

709

39

171

762

406

1,826

No ninte re s t e xpe ns e

12,130

10,060

9,793

9,208

8,923

41,185

34,734

32,724

Inc o m e be fo re inc o m e ta xe s

5,035

3,130

830

1,384

3,918

10,378

16,731

17,692

P ro vis io n fo r inc o m e ta xe s

1,113

673

149

280

877

2,215

3,696

3,910

Ne t Inc o m e

3,922

2,457

681

1,104

3,041

8,163

13,035

13,782

S h a re a n d P e r S h a re D a t a :

Ea rnings pe r s ha re - ba s ic

$

0.22

$

0.14

$

0.04

$

0.06

$

0.17

$

0.46

$

0.69

$

0.87

Ea rnings pe r s ha re - dilute d

$

0.22

$

0.14

$

0.04

$

0.06

$

0.16

$

0.45

$

0.68

$

0.87

B o o k va lue pe r s ha re

$

12.30

$

12.00

$

11.84

$

11.75

$

11.61

$

12.30

$

11.61

$

10.85

Ta ngible bo o k va lue pe r s ha re (1 )

$

9.76

$

9.55

$

9.39

$

10.31

$

10.18

$

9.76

$

10.18

$

9.47

Ending s ha re s o uts ta nding

17,507,103

17,786,552

17,862,554

18,055,692

18,330,058

17,507,103

18,330,058

19,311,505

We ighte d a ve ra ge s ha re s o uts ta nding:

B a s ic

17,637,540

17,847,913

18,134,607

18,255,351

18,414,393

17,937,596

19,016,808

15,812,585

Dilute d

17,661,922

17,866,822

18,157,992

18,287,064

18,460,118

17,961,258

19,063,237

15,877,633

S e le c t e d P e rf o rm a n c e R a t io s :

R e turn o n a ve ra ge a s s e ts (2 ) R e turn o n a ve ra ge e quity(2 ) Ne t inte re s t m a rgin

Effic ie nc y ra tio (3 )

0.87%

0.58%

0.18%

0.35%

0.95%

0.52%

1.03%

1.12%

7.26%

4.56%

1.28%

2.07%

5.67%

3.81%

6.08%

8.51%

4.10%

3.73%

3.45%

4.03%

4.05%

3.79%

4.04%

4.19%

69.06%

67.82%

73.83%

71.36%

67.02%

70.32%

66.40%

62.83%

P e rio d E n d B a la n c e S h e e t D a t a :

Gro s s lo a ns

$

1,304,384

$

1,283,457

$

1,249,999

$

1,039,514

$

1,029,975

$

1,304,384

$

1,029,975

$

986,040

To ta l inte re s t-e a rning a s s e ts

1,529,322

1,429,614

1,222,416

1,137,010

1,167,857

1,529,322

1,167,857

1,119,344

Go o dwill

42,907

41,914

41,914

24,579

24,579

42,907

24,579

24,579

C o re de po s it inta ngible

1,513

1,677

1,856

1,431

1,610

1,513

1,610

2,085

To ta l a s s e ts

1,730,045

1,771,946

1,618,960

1,263,494

1,275,076

1,729,426

1,275,076

1,258,525

De po s its

1,485,817

1,472,780

1,338,753

982,651

992,838

1,485,817

992,838

980,427

S ho rt-te rm de bt

-

20,000

20,000

20,000

-

-

-

7,000

Lo ng-te rm de bt

12,372

37,372

37,372

37,372

57,372

12,372

57,372

57,372

S ha re ho lde rs ' e quity

215,368

213,367

211,538

212,085

212,775

215,368

212,775

209,611

S e le c t e d A v e ra g e B a la n c e s :

Gro s s Lo a ns

$

1,288,138

$

1,255,027

$

1,193,985

$

1,020,630

$

1,017,750

$

1,189,894

$

1,004,051

$

987,634

To ta l inte re s t-e a rning a s s e ts

1,561,104

1,403,106

1,321,172

1,147,631

1,166,758

1,386,187

1,164,149

1,119,344

C o re De po s it Inta ngible

1,572

1,743

1,529

1,507

1,680

1,588

1,812

2,547

To ta l As s e ts

1,784,289

1,683,174

1,520,278

1,255,943

1,272,475

1,561,865

1,268,728

1,228,576

De po s its

1,499,162

1,399,840

1,237,343

972,162

989,721

1,278,068

981,132

989,838

S ho rt-te rm de bt

17,609

20,000

20,000

12,747

-

17,596

3,414

21,393

Lo ng-te rm de bt

34,383

37,438

37,438

44,625

57,372

38,440

57,372

49,357

S ha re ho lde rs ' e quity

214,861

214,277

213,796

214,502

212,849

214,360

214,324

161,953

A s s e t Q u a lit y R a t io s :

No npe rfo rm ing lo a ns (4 )

$

14,296

$

13,739

$

14,399

$

12,820

$

12,148

$

14,296

$

12,148

$

11,635

Othe r re a l e s ta te o wne d

2,172

3,237

3,561

3,737

3,533

2,172

3,533

1,088

Allo wa nc e fo r lo a n lo s s e s

14,108

13,561

12,054

10,586

8,324

14,108

8,324

8,669

No npe rfo rm ing lo a ns (4 ) to pe rio d-e nd

1.10%

1.07%

1.15%

1.23%

1.18%

1.10%

1.18%

1.18%

lo a ns

Allo wa nc e fo r lo a n lo s s e s to pe rio d-

1.08%

1.06%

0.96%

1.02%

0.81%

1.08%

0.81%

0.88%

e nd lo a ns

De linque nc y ra tio (5 )

0.46%

0.17%

0.22%

0.43%

0.34%

0.46%

0.34%

0.19%

Ne t lo a n c ha rge -o ffs (re c o ve rie s ) to

-0.05%

0.04%

0.16%

0.00%

0.01%

0.04%

0.08%

0.00%

a ve ra ge lo a ns (2 )

  1. Tangible book value per share (a non GAAP measure) is equal to total shareholders' equity less goodwill and core deposit intangibles, divided by the number of outstanding shares of our common stock at the end of the relevant period. Please refer to the table above for a reconciliation of this non-GAAP measure.
  2. Annualized.
  3. Efficiency ratio is calculated as a non-interest expenses divided by the sum of net interest income and non-interest income.
  4. Nonperforming loans consist of non-accrural loans and accruing TDR loans.
  5. Delinquency Ratio includes loans 30-89 days past due and excludes non-accrual loans.

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Select Bancorp Inc. published this content on 26 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 January 2021 13:45:07 UTC