BNC BANCORP 
By THOMASVILLE, N.C., Oct. 28, 2011 /PRNewswire/ -- BNC Bancorp (NASDAQ: BNCN) ("BNC"), parent company for Bank of North Carolina ("Bank") today reported financial results for the quarter ended September 30, 2011. For the third quarter of 2011, net income available to common shareholders was $1.8 million, or $0.18 per diluted share, compared to $992,000, or $0.10 per diluted share, and $69,000, or $0.01 per diluted share, in the second quarter of 2011 and third quarter of 2010, respectively.
(Logo: http://photos.prnewswire.com/prnh/20030917/BNCLOGO )
For the nine months ended September 30, 2011, net income available to common shareholders was $3.7 million, or $0.37 per diluted share, compared to $12.2 million, or $1.39 per diluted share reported for the same period in 2010. The 2010 results include $11.8 million of after-tax gains from a FDIC assisted acquisition.
Total assets at September 30, 2011 were $2.20 billion, compared to $2.15 billion and $2.18 billion at June 30, 2011 and September 30, 2010, respectively.
At September 30, 2011, the Bank's Tier 1 leverage ratio was 7.57% Tier 1 risk-based capital ratio was 10.80%, and total risk-based capital ratio was 12.37%. 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 $343 million, a $51 million indemnification receivable from the FDIC, and $263 million of loans covered by the FDIC loss-share agreement. During the quarter, tangible book value increased from $9.05 to $9.59, due to capitalized earnings less dividends and changes in the mark-to-market on investment securities and derivatives used to hedge funding costs. At quarter end, the net mark-to-market position is a positive $373,000, resulting in core tangible book value without mark-to-market of $9.55.
W. Swope Montgomery, Jr., President and CEO, noted, "I am pleased to report an exciting quarter for our Company. We continue to see improvements in our core earnings power driven by double-digit growth rates in non-covered loans and improving asset quality metrics. While we have sacrificed some earnings over the past two years as we invested in new markets, product lines and support infrastructure, we are pleased that these investments in our future have begun to drive gains in both net interest income, non-interest income and core loans over the past four quarters. With a strong pipeline of relationship-based credits and increasing mortgage and SBA origination volume, we head into the fourth quarter with continued momentum."
Montgomery continued, "The investment in people over the past several years is not only driving organic growth, it has made it possible for us to integrate the Beach First acquisition successfully, and position our Company to take advantage of two recent acquisition opportunities. We announced in August that we are acquiring Regent Bank in Greenville, South Carolina in an all cash transaction. Regent Bank will give us an immediate regional headquarters location in the vibrant upstate of South Carolina on which to expand our retail, commercial, wealth, and mortgage platforms. In addition, less than two weeks ago we acquired Blue Ridge Savings Bank in Asheville, North Carolina in a FDIC assisted transaction. These two acquisitions provide a solid base for future growth with over 10 offices and $210 million in deposits in the Asheville/Spartanburg/Greenville broadcast media market."
Highlights September 30, 2011 versus June 30, 2011:
-- Net income available to common shareholders increased $.08, or 80% to
$.18 per share
-- Net income available to common shareholders, before securities gains,
increased $.02, or 20% to $.12 per share
-- Net interest income (FTE) increased to $18.3 million, an increase of
$172,000
-- Net interest margin declined by 5 basis points to 3.79%
-- Performing non-covered loan portfolio -- 30-89 day past dues declined
from 0.50% to 0.26% during the quarter
-- Non-covered nonaccrual loans and OREO declined by $3.5 million, or 6.3%
during the quarter
-- Special mention or watch credits in the non-covered portfolio declined
from 5.2% to 3.8% during the quarter
-- Total loans increased $44.0 million, or 2.9% during the quarter
-- Non-covered portfolio loans increased $65.0 million, or 5.2% during
the quarter
-- Entered into an agreement to acquire Regent Bank of South Carolina,
headquartered in Greenville
Additional Operating Highlights from Third Quarter
Since September 2010, total loans not covered by a loss-sharing agreement have increased by $164.9 million, or 14.4%, while the total portfolio, including loans covered by loss-sharing agreements, has increased $96.8 million, or 6.6%, to $1.57 billion. At September 30, 2011, the Company's loan portfolio includes $262.7 million in covered loans being carried at fair value and $1.31 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)
9/30/2011 6/30/2011 3/31/2011 12/31/2010 9/30/2010
--------- --------- --------- ---------- ---------
Total loans $1,572,566 $1,528,547 $1,528,727 $1,508,180 $1,475,735
Loans covered
by loss
share, at
fair value 262,673 283,685 301,436 309,342 330,761
------- ------- ------- ------- -------
Loans not
covered by
loss share $1,309,893 $1,244,862 $1,227,291 $1,198,838 $1,144,974
========== ========== ========== ========== ==========
Loan growth
(quarter/
quarter):
Total loans 2.9% 0.0% 1.4% 2.2% 0.4%
Loans not
covered by
loss share 5.2% 1.4% 2.4% 4.7% 1.9%
Annual growth
of non-
covered
loans 14.4%
Total deposits at September 30, 2011 were $1.84 billion, a decrease of $20.0 million from September 30, 2010. While overall deposit growth continues to be an emphasis for the Company, 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 $72.5 million, while time deposits decreased $92.4 million At September 30, 2011, time deposits were 47.5% of total deposits, compared to 51.9% and 47.9% at September 30, 2010 and June 30, 2011, respectively. With several potential acquisitions being considered that could provide excess core deposits, management chose to fund most of the growth in the third quarter with short-term funding through FHLB advances or short-maturity wholesale time deposits. The longer-term objective is to continue the recent trends towards reducing wholesale funding and growing core deposit funding. Management believes that the Blue Ridge Saving Bank acquisition will provide good markets for core deposit growth.
Total Deposit Growth
(dollars in thousands; unaudited)
9/30/2011 6/30/2011 3/31/2011 12/31/2010 9/30/2010
--------- --------- --------- ---------- ---------
Non-
interest
bearing
demand $130,978 $128,694 $116,286 $107,547 $105,197
Interest-
bearing
demand 833,190 835,967 849,392 841,062 786,498
Time
deposits 871,436 885,922 905,173 879,461 963,885
------- ------- ------- ------- -------
Total $1,835,604 $1,850,583 $1,870,851 $1,828,070 $1,855,580
========== ========== ========== ========== ==========
Growth
(Quarter/
Quarter) -0.8% -1.1% 2.3% -1.5% 1.1%
Operating Results
Net interest income for the third quarter of 2011 was $16.9 million, an increase of $22,000 from the comparable period last year, and an increase of $102,000 from the prior quarter. Taxable-equivalent net interest margin increased 3 basis points from the third quarter of 2010 to 3.79%. Compared to the second quarter of 2011, taxable-equivalent net interest margin decreased 5 basis points from 3.84%.
The Company's average yield on interest-earning assets decreased 9 basis points while the average rate on interest-bearing liabilities decreased 10 basis points during the third quarter of 2011 when compared to the third quarter of 2010. Compared to the second quarter of 2011, the Company's yield on average earning assets decreased by 7 basis points, while the cost of average interest-bearing liabilities remained stable.
Net interest income for the nine months ended September 30, 2011 was $50.3 million, an increase of $6.3 million, or 14.4% from the comparable period last year. Taxable-equivalent net interest margin increased 20 basis points from the nine months ended September 30, 2010 to 3.83%. Average interest-earning assets were $1.90 billion for the first nine months of 2011, an increase of $135.3 million from the first nine months of 2010.
Quarterly Average Yields / Costs (Tax-Equiv. Basis)
(unaudited)
9/30/2011 6/30/2011 3/31/2011 12/31/2010 9/30/2010
--------- --------- --------- ---------- ---------
Earning
Asset
Yield 5.48% 5.55% 5.66% 5.60% 5.57%
Cost of
Int.
Bearing
Liab 1.73% 1.73% 1.81% 1.93% 1.83%
Cost of
Funds 1.69% 1.67% 1.71% 1.83% 1.73%
Net
Interest
Spread 3.76% 3.82% 3.85% 3.67% 3.74%
Net
Interest
Margin 3.79% 3.84% 3.87% 3.71% 3.76%
Non-interest income was $3.8 million and $2.4 million for the third and second quarter of 2011, compared to $3.9 million for the year-ago third quarter. Included in non-interest income for the third quarter of 2011 was $1.0 million of net gains on sales of investments, compared to $63,000 of loss for the third quarter of 2010. Also during the third quarter of 2010, the Company reported $2.0 million of income associated with accretion of the discount on the FDIC receivable for payments received and related loss share receipts compared to $250,000 during the third quarter of 2011. Excluding the FDIC related income and the sales of investment securities, non-interest income was $ 2.6 million for the current quarter, up 32.7% from the $1.9 million reported for the third quarter of 2010. The increases were primarily due to increases in service charges and fees of $67,000; increases in earnings on bank-owned life insurance of $194,000; increases in brokerage activity of $224,000; and increases in mortgage fee income of $119,000. 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 $120,000 of SBA fee income recorded during the third quarter of 2011. In comparison to the second quarter of 2011, recurring non-interest income increased $265,000.
Non-interest income was $8.6 million for the nine months ended September 30, 2011, compared to $27.0 million for the same period in 2010. Included in non-interest income for the nine months ended September 30, 2010 was $19.3 million of gain on acquisition from a FDIC assisted transaction.
Non-interest expenses for the third quarter of 2011 decreased $764,000 compared to the same quarter a year ago, and were $178,000 lower than the second quarter of 2011. Loan, foreclosure and collection expenses decreased by $1.3 million during the third quarter of 2011 when compared to the same quarter in 2010, primarily from a $765,000 decrease in the writing down of OREO properties, and were $59,000 higher than the second quarter of 2011.
The Company's personnel costs have increased $1.3 million, or 18.3%, during the third quarter of 2011 when compared to the same quarter a year ago, and were $529,000 higher than the previous quarter. All of the increases in personnel costs are attributable to investments in the new mortgage and SBA lending platforms, as well as additions to our teams in Charlotte and Raleigh, all of which 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 decreased by $172,000 and $515,000, respectively, when compared to the same quarter a year ago, primarily from costs associated with the acquisition during 2010. All other non-interest expense categories have seen nominal changes when compared to the same quarter a year ago.
Non-interest expense was $44.3 million for the nine months ended September 30, 2011, compared to $38.0 million for the same period in 2010, an increase of $6.4 million. This increase was primarily in salaries and employee benefits, increasing $5.0 million, from both investments in new lending platforms and having a full nine months of expense from the prior year acquisition.
Non-Interest Income / Non-Interest Expense
(dollars in thousands; unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
9/30/2011 6/30/2011 9/30/2010 9/30/2011 9/30/2010
--------- --------- --------- --------- ---------
Non-interest income
Mortgage fees $581 $243 $462 $1,186 $1,013
Service charges 744 868 677 2,439 2,093
Investment brokerage fees 357 227 133 741 -
Earnings on bank-owned life ins 414 420 220 1,259 694
Gain (loss) on sale of securities 1,032 79 (63) 1,168 541
Gain on acquisition - - - - 19,289
Other 711 534 2,477 1,842 3,336
--- --- ----- ----- -----
Total non-interest income $3,839 $2,371 $3,906 $8,635 $26,966
====== ====== ====== ====== =======
Non-interest expense
Salaries and employee benefits $8,152 $7,623 $6,892 $23,014 $17,978
Occupancy and equipment 1,593 1,511 1,342 4,676 3,701
Data processing and supply 514 601 560 1,678 1,564
Advertising/business development 326 507 323 1,252 987
Professional and other services 668 874 840 2,538 3,039
FDIC insurance assessments 485 650 780 1,945 2,160
Loan, foreclosure and collection 1,975 1,916 3,225 5,967 4,895
Other 1,002 1,211 1,517 3,270 3,646
----- ----- ----- ----- -----
Total $14,715 $14,893 $15,479 $44,340 $37,970
======= ======= ======= ======= =======
Asset Quality
Net charge-offs for the third quarter of 2011 were $2.7 million, or 0.70% of average loans annualized compared to $4.0 million, or 1.04% reported for the second quarter of 2011. Nonperforming assets not covered by loss share were 2.75% of total assets and 6.24% including covered assets at September 30, 2011, compared to 3.05% and 6.60%, respectively, at June 30, 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 September 30, 2011, the carrying value of loans and OREO covered by loss-share was $262.7 million and $22.7 million, respectively, with a corresponding indemnification receivable from the FDIC of $50.7 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)
9/30/2011 6/30/2011 3/31/2011 12/31/2010 9/30/2010
--------- --------- --------- ---------- ---------
Nonaccrual
loans
not
covered
by
loss
share $29,844 $31,822 $34,047 $26,224 $10,603
Nonaccrual
loans
covered
by
loss
share 61,711 62,259 69,377 64,753 77,150
OREO
not
covered
by
loss
share 22,736 24,289 21,663 23,912 26,050
OREO
covered
by
loss
share 22,747 23,348 15,811 15,825 9,638
90
days
past
due
not
covered
by
loss
share - - 124 44 -
90
days
past
due
covered
by
loss
share 23 - - 4,554 23
--- --- --- ----- ---
Total
nonperforming
assets $137,061 $141,718 $141,022 $135,312 $123,464
======== ======== ======== ======== ========
Nonperforming
assets
not
covered
by
loss
share $52,580 $56,111 $55,834 $50,180 $36,653
======= ======= ======= ======= =======
Total
assets $2,197,758 $2,146,745 $2,157,280 $2,149,932 $2,180,049
Total
assets
less
covered
assets 1,912,338 1,839,712 1,840,033 1,824,765 1,839,650
Total
loans 1,572,566 1,528,547 1,528,727 1,508,180 1,475,735
Total
accruing
loans 1,481,011 1,434,466 1,425,303 1,417,203 1,387,982
Total
loans
less
covered
loans 1,309,893 1,244,862 1,227,291 1,198,838 1,144,974
Ratio
of
nonperforming
assets
to
total
assets 6.24% 6.60% 6.54% 6.29% 5.66%
Not
covered
by
loss
share 2.75% 3.05% 3.03% 2.75% 1.99%
Ratio
of
nonperforming
loans
to
total
loans 5.82% 6.15% 6.77% 6.34% 5.95%
Not
covered
by
loss
share 2.28% 2.56% 2.78% 2.19% 0.93%
Ratio
of
allowance
for
loan
losses
to
total
loans 1.54% 1.53% 1.59% 1.65% 1.28%
Not
covered
by
loss
share 1.85% 1.88% 1.98% 2.07% 1.64%
Net
charge-
offs
of
noncovered
loans,
QTD $2,719 $3,985 $3,988 $6,006 $5,655
Ratio
of
net
charge-
offs
to
average
loans
(annualized) 0.70% 1.04% 1.07% 1.62% 1.55%
Loans
restructured/
modified
not
included
in
above,
not $32,294 $30,036 $25,857 $5,107 $7,479
covered
by
loss
share
(not
past
due
or
on
nonaccrual)
During the third quarter of 2011, BNC recorded a provision for loan losses of $3.5 million, an increase from the $3.0 million recorded during the second quarter of 2011. The allowance for loan losses was $24.2 million at September 30, 2011, and $23.4 million at June 30, 2011. Loan loss reserves to total period-end loans were 1.54% and 1.53% at September 30, 2011 and June 30, 2011, respectively, having decreased from the 1.65% reported at December 31, 2010. This decrease was a result of partially or fully reserved loans being charged-off after December 31, 2010. Excluding the loans acquired in the FDIC-assisted transaction that were marked to fair value, loan loss reserves to period-end loans decreased from 1.88% and 2.07% reported at June 30, 2011 and December 31, 2010, respectively, to 1.85% at September 30, 2011. Management considers the loan loss reserve adequate to absorb credit losses inherent in the loan portfolio at September 30, 2011.
Nonaccrual loans not covered by loss share agreements totaled $29.8 million at September 30, 2011, a decrease of $2.0 million compared to $31.8 million at June 30, 2011. Loans migrating into nonaccrual status during the quarter totaled $11.1 million. Nonaccrual loans covered by loss-share totaled $61.7 million, a decrease of $548,000 compared to $62.3 million at June 30, 2011. Loans migrating into nonaccrual status during the quarter that are covered by loss-share totaled $8.9 million.
Troubled Debt Restructures (TDR's) increased $6.5 million during the quarter to $46.4 million, of which $9.4 million is in nonaccrual status. At September 30, 2011, there was $7.0 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 $22.7 million at September 30, 2011, a decrease of $1.6 million from the $24.3 million reported at June 30, 2011. The change primarily consisted of $2.4 million in additions at fair value, $936,000 in write-downs, and $3.3 million in sales. Of the $22.7 million in OREO at quarter-end, $13.7 million is either under contract for sale or under a scheduled lot takedown.
Commenting on asset quality, Montgomery noted, "Our asset quality metrics continue to show improvement. The diversity and growth in the loan portfolio have supported a much improved ratio of pass credits to watch and substandard. Our ongoing aggressive approach to marking assets to recognize impairments continued to pay-off as we see a solid pipeline of contracts on OREO. We anticipate a continued reduction in NPA's over the next few quarters and a continued improvement in disposition opportunities. There continues to be elevated unemployment in many of our legacy markets, however the majority of the larger distressed A&D, land and construction loans have been spread across the footprint and not concentrated in any particular real estate market. Over the past several years we have been able to reduce our construction and A&D loan portfolio by approximately $170 million and are aggressively positioning the remaining portfolio for divesture over the next year. The market continues to be a challenge, however we would anticipate a steady decline in both total NPA's and expenses associated with the management of those assets as NPA's seemed to have peaked in the second quarter of this year."
Capital Position
The Company continues to maintain strong capital ratios. Shareholders' equity was $162.6 million at September 30, 2011, a decrease of $2.9 million from September 30, 2010. Tangible common book value per share was $9.59 at September 30, 2011, a decrease from $9.97 at September 30, 2010 and an increase from $9.05 at June 30, 2011. Core tangible book value, which excludes the very volatile mark-to-market component, increased to $9.55 at September 30, 2011, up from the $9.38 at June 30, 2011. The mark-to-market components of equity increased from a net loss of $3.0 million at June 30, 2011 to a net gain position of $373,000 at September 30, 2011. The net unrealized gains in the available for sale investment portfolio were offset by the loss position relating to the value of the interest rate caps on funding. Despite the mark-to-market offset, the hedged transaction utilizing the interest rate caps 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.
On October 25, 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 November 25, 2011 to shareholders of record on November 11, 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 $2.4 billion in assets. Bank of North Carolina provides a complete line of banking and financial services to individuals and businesses through its 34 full-service banking offices in North and South Carolina. The Bank's seven locations in South Carolina operate as BNC Bank. Bank of North Carolina is insured by the FDIC and is an equal housing lender. BNC Bancorp 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
------------------
September September
30, 30, % Change
---------- ---------- --------
2011 2010
---- ----
SUMMARY STATEMENTS OF
OPERATIONS
Interest income $25,065 $25,580 -2.0%
Interest expense 8,197 8,734 (6.2)
----- -----
Net interest income 16,868 16,846 0.1
Provision for loan
losses 3,524 5,436 (35.2)
----- -----
Net interest income
after provision for
loan losses 13,344 11,410 17.0
Non-interest income 3,839 3,906 (1.7)
Non-interest expense 14,715 15,479 (4.9)
------ ------
Income before income
tax expense (benefit) 2,468 (163) (1,614.1)
Income tax expense
(benefit) 46 (823) (105.6)
--- ----
Net income 2,422 660 267.0
Preferred stock
dividends and
discount accretion 601 591 1.7
--- ---
Net income available
to common
shareholders $1,821 $69 2,539.1
====== ===
PER SHARE DATA
Earnings per share,
basic $0.18 $0.01 1700.0%
Earnings per share,
diluted 0.18 0.01 1,700.0
Tangible common book
value per share 9.59 9.97 (3.8)
Weighted average
participating common
shares:
Basic 10,884,801 10,845,132
Diluted 10,899,653 10,972,466
Period-end number of
shares:
Common 9,085,980 9,041,334
Convertible preferred 1,804,566 1,804,566
PERFORMANCE RATIOS
Return on average
assets 0.44% 0.12%
Return on average
common equity 6.47% 0.23%
Return on average
tangible common
equity 8.65% 0.30%
Net yield on earning
assets (taxable
equivalent) 3.79% 3.76%
Average equity to
average assets 7.29% 7.63%
Allowance for loan
losses as a % of
total loans 1.54% 1.28%
Nonperforming assets
to total assets, end
of period 6.24% 5.66%
Nonperforming assets
not covered by loss
share 2.75% 1.99%
Ratio of net charge-
offs to average
loans, annualized 0.70% 1.55%
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except share and per share data)
(Unaudited) For the
Nine Months Ended
-----------------
September September
30, 30, % Change
---------- ---------- --------
2011 2010
---- ----
SUMMARY STATEMENTS OF
OPERATIONS
Interest income $74,894 $69,681 7.5%
Interest expense 24,582 25,696 (4.3)
------ ------
Net interest income 50,312 43,985 14.4
Provision for loan
losses 10,056 14,382 (30.1)
------ ------
Net interest income
after provision for
loan losses 40,256 29,603 36.0
Non-interest income 8,635 26,966 (68.0)
Non-interest expense 44,340 37,970 16.8
------ ------
Income (loss) before
income tax expense 4,551 18,599 (75.5)
Income tax expense
(benefit) (982) 4,817 (120.4)
---- -----
Net income 5,533 13,782 (59.9)
Preferred stock
dividends and
discount accretion 1,803 1,596 13.0
----- -----
Net income available
to common
shareholders $3,730 $12,186 (69.4)
====== =======
PER SHARE DATA
Earnings per share,
basic $0.37 $1.41 -73.8%
Earnings per share,
diluted 0.37 1.39 (73.4)
Tangible common book
value per share 9.59 9.97 (3.8)
Weighted average
participating common
shares:
Basic 10,871,790 8,727,751
Diluted 10,888,171 8,801,809
Period-end number of
shares:
Common 9,085,980 9,041,334
Convertible preferred 1,804,566 1,804,566
PERFORMANCE RATIOS
Return on average
assets 0.34% 0.93%
Return on average
common equity 4.60% 14.91%
Return on average
tangible common
equity 6.22% 20.12%
Net yield on earning
assets (taxable
equivalent) 3.83% 3.63%
Average equity to
average assets 7.21% 7.34%
Allowance for loan
losses as a % of
total loans 1.54% 1.27%
Nonperforming assets
to total assets, end
of period 6.24% 5.66%
Nonperforming assets
not covered by loss
share 2.75% 1.99%
Ratio of net charge-
offs to average
loans, annualized 0.93% 1.31%
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except share and per share data)
(Unaudited) For the
Three Months Ended
------------------
September September
30, June 30, March 31, December 31, 30, December 31,
---------- -------- --------- ------------ ---------- ------------
2011 2011 2011 2010 2010 2009
---- ---- ---- ---- ---- ----
SUMMARY STATEMENTS OF
OPERATIONS
Interest income $25,065 $24,787 $25,042 $25,329 $25,580 $19,586
Interest expense 8,197 8,021 8,364 9,051 8,734 7,550
----- ----- ----- ----- ----- -----
Net interest income 16,868 16,766 16,678 16,278 16,846 12,036
Provision for loan
losses 3,524 3,032 3,500 12,000 5,436 4,750
----- ----- ----- ------ ----- -----
Net interest income
after provision for
loan losses 13,344 13,734 13,178 4,278 11,410 7,286
Non-interest income 3,839 2,371 2,425 1,847 3,906 2,930
Non-interest expense 14,715 14,893 14,732 17,202 15,479 8,602
------ ------ ------ ------ ------ -----
Income (loss) before
income tax expense
(benefit) 2,468 1,212 871 (11,077) (163) 1,614
Income tax expense
(benefit) 46 (381) (647) (5,021) (823) (173)
--- ---- ---- ------ ---- ----
Net income (loss) 2,422 1,593 1,518 (6,056) 660 1,787
Preferred stock
dividends and
discount accretion 601 601 601 600 591 498
--- --- --- --- --- ---
Net income (loss)
available to common
shareholders $1,821 $992 $917 $(6,656) $69 $1,289
====== ==== ==== ======= === ======
Net interest income,
as reported $16,868 $16,766 $16,678 $16,278 $16,846 $12,036
Tax-equivalent
adjustment 1,392 1,322 1,475 1,494 1,373 1,218
----- ----- ----- ----- ----- -----
Net interest income,
tax-equivalent $18,260 $18,088 $18,153 $17,772 $18,219 $13,254
======= ======= ======= ======= ======= =======
PER SHARE DATA
Earnings per share,
basic $0.18 $0.10 $0.09 $(0.61) $0.01 $0.18
Earnings per share,
diluted 0.18 0.10 0.09 (0.61) 0.01 0.18
Weighted average
participating common
shares:
Basic 10,884,801 10,869,868 10,860,434 10,848,790 10,845,132 7,341,249
Diluted 10,899,653 10,886,162 10,878,950 10,926,772 10,972,466 7,350,425
Period-end number of
shares:
Common 9,085,980 9,075,395 9,059,809 9,053,360 9,041,334 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 0.44% 0.30% 0.29% -1.11% 0.12% 0.44%
Return on average
common equity 6.47% 3.67% 3.53% -22.77% 0.23% 5.41%
Return on average
tangible common
equity 8.65% 4.96% 4.84% -30.18% 0.30% 7.65%
Net yield on earning
assets (taxable
equivalent) 3.79% 3.84% 3.87% 3.71% 3.76% 3.52%
Average equity to
average assets 7.29% 7.25% 7.08% 7.56% 7.63% 7.65%
Nonperforming assets
to total assets, end
of period 6.24% 6.60% 6.54% 6.29% 5.66% 2.02%
Nonperforming assets
not covered by loss
share 2.75% 3.05% 3.03% 2.75% 1.99% 2.02%
Ratio of net charge-
offs to average
loans, annualized 0.70% 1.04% 1.07% 1.62% 1.56% 1.55%
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands)
(Unaudited) As of
-----
September September
30, 30, % Change
---------- ---------- --------
2011 2010
---- ----
SELECTED BALANCE
SHEET DATA
End of period
balances
Loans:
Loans not covered by
loss share $1,309,893 $1,144,974 14.4%
Loans covered by loss
share 262,673 330,761 (20.6)
Allowance for loan
losses (24,177) (18,819) 28.5
------- -------
Net loans 1,548,389 1,456,916 6.3
Loans held for sale 6,753 3,314 103.8
Investment securities 348,989 357,555 (2.4)
Intangible assets 28,154 28,548 (1.4)
Total assets 2,197,758 2,180,049 0.8
Deposits:
Non-interest bearing
deposits 130,978 105,197 24.5
Interest-bearing
demand and savings 833,190 786,498 5.9
Time deposits 871,436 963,885 (9.6)
------- -------
Total deposits 1,835,604 1,855,580 (1.1)
Borrowed funds 190,172 145,720 30.5
Total interest-
bearing liabilities 1,894,798 1,896,103 (0.1)
Shareholders' equity:
Preferred equity 47,278 46,799 1.0
Common equity 114,924 119,054 (3.5)
Accumulated other
comprehensive income
(loss) 373 (374) (199.7)
--- ----
Total shareholders'
equity 162,575 165,479 (1.8)
As of
-----
September September
30, June 30, March 31, December 31, 30, December 31,
---------- -------- --------- ------------ ---------- ------------
2011 2011 2011 2010 2010 2009
---- ---- ---- ---- ---- ----
SELECTED BALANCE
SHEET DATA
End of period
balances
Loans:
Loans not covered by
loss share $1,309,893 $1,244,862 $1,227,291 $1,198,838 $1,144,974 $1,079,179
Loans covered by loss
share 262,673 283,685 301,436 309,342 330,761 -
Allowance for loan
losses (24,177) (23,373) (24,325) (24,813) (18,819) (17,309)
------- ------- ------- ------- ------- -------
Net loans 1,548,389 1,505,174 1,504,402 1,483,367 1,456,916 1,061,870
Loans held for sale 6,753 1,909 1,679 6,751 3,314 2,766
Investment securities 348,989 339,381 333,265 358,871 357,555 366,506
Intangible assets 28,154 28,249 28,343 28,445 28,548 27,699
Total assets 2,197,758 2,146,745 2,157,280 2,149,932 2,180,049 1,634,185
Deposits:
Non-interest bearing
deposits 130,978 128,694 116,286 107,547 105,197 66,801
Interest-bearing
demand and savings 833,190 835,967 849,392 841,062 786,498 578,329
Time deposits 871,436 885,922 905,173 879,461 963,885 704,748
------- ------- ------- ------- ------- -------
Total deposits 1,835,604 1,850,583 1,870,851 1,828,070 1,855,580 1,349,878
Borrowed funds 190,172 129,833 120,939 157,920 145,720 150,996
Total interest-
bearing liabilities 1,894,798 1,851,722 1,875,504 1,878,443 1,896,103 1,434,073
Shareholders' equity:
Preferred equity 47,278 47,158 47,038 46,918 46,799 29,304
Common equity 114,924 113,400 112,685 112,104 119,054 91,797
Accumulated other
comprehensive income
(loss) 373 (2,989) (5,512) (6,798) (374) 5,105
--- ------ ------ ------ ---- -----
Total shareholders'
equity 162,575 157,569 154,211 152,224 165,479 126,206
QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands)
(Unaudited)
For the Three Month Period Ended
--------------------------------
September September
30, June 30, March 31, December 31, 30, December 31,
---------- -------- --------- ------------ ---------- ------------
2011 2011 2011 2010 2010 2009
---- ---- ---- ---- ---- ----
SELECTED BALANCE
SHEET DATA
Quarterly average
balances
Loans:
Loans not covered by
loss share $1,274,530 $1,238,661 $1,210,550 $1,152,263 $1,112,829 $1,058,657
Loans covered by loss
share 273,179 292,561 305,389 320,052 338,067 -
------- ------- ------- ------- ------- ---
Total loans 1,547,709 1,531,222 1,515,939 1,472,315 1,450,896 1,058,657
Investment
securities, at
amortized cost 334,709 323,661 352,480 344,146 348,687 408,781
Total earning assets 1,913,795 1,888,007 1,901,574 1,899,557 1,921,499 1,492,702
Total assets 2,179,220 2,144,753 2,150,436 2,155,061 2,187,283 1,616,235
Deposits:
Non-interest bearing
deposits 129,390 123,398 110,957 110,401 109,366 59,458
Interest-bearing
demand and savings 832,536 839,169 845,630 820,640 771,739 560,697
Time deposits 889,363 884,100 887,338 903,967 976,147 716,199
------- ------- ------- ------- ------- -------
Total deposits 1,851,289 1,846,667 1,843,925 1,835,008 1,857,252 1,336,354
Borrowed funds 159,213 137,020 144,783 131,684 148,755 140,812
Total interest-
bearing liabilities 1,881,112 1,860,289 1,877,751 1,856,291 1,896,641 1,417,708
Shareholders' equity 158,926 155,584 152,250 162,865 166,942 123,659
LOAN MIX AND STRATIFICATION STATISTICS
BNC BANCORP
(Dollars in thousands)
(Unaudited)
As of September 30,
-------------------
2011 2010 % Change
---- ---- --------
Loans Not Covered Under
Loss Share Agreements:
Construction, A&D, and
Land $212.8 $202.4 5.1
---------------------- ------ ------ ---
Residential Construction 25.2 31.1 (19.0)
Presold 13.6 12.8 6.3
Speculative 11.6 18.3 (36.6)
Loan size -over $400,000 1.5 6.1 (75.4)
Loan size -$200,000 to
$400,000 1.0 6.3 (84.1)
Loan size -under
$200,000 9.1 5.9 54.2
Commercial Construction 73.5 40.1 83.3
Loan size -$5 million
and over 14.1 12.5 -
Loan size -$3 million to
$5 million 8.7 8.0 8.8
Loan size -$1 million to
$3 million 34.5 12.1 185.1
Loan size -under $1
million 16.2 7.5 116.0
Residential and
Commercial A&D 21.6 30.1 (28.2)
Loan size -$5 million to
$6 million 6.1 11.7 (47.9)
Loan size -$3 million to
$5 million - 3.6 (100.0)
Loan size -$1 million to
$3 million 11.1 10.1 9.9
Loan size -under $1
million 4.4 4.7 (6.4)
-
Land 92.5 101.1 (8.5)
Residential Buildable
Lots 33.1 44.9 (26.3)
Commercial Buildable Lots 13.5 13.5 0.0
Land Held for Development 26.1 27.0 (3.3)
Raw and Agricultural Land 19.8 15.7 26.1
Commercial Real Estate $649.5 $536.2 21.1
---------------------- ------ ------ ----
Multi-Family 34.4 42.0 (18.1)
Churches 36.2 19.2 88.5
Retail 457.7 371.0 23.4
Owner Occupied 137.5 117.7 16.8
Investment 319.9 253.3 26.3
Loan size -$5 million to
$9 million 61.9 46.1 34.3
Loan size -$3 million to
$5 million 61.2 47.6 28.6
Loan size -$1 million to
$3 million 107.8 83.1 29.7
Loan size -under $1
million 89.0 76.5 16.3
Industrial 121.2 104.0 16.5
Owner Occupied 61.1 49.8 22.7
Investment 60.1 54.2 10.9
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 27.2 24.1 12.9
Loan size -under $1
million 25.3 25.8 (1.9)
Other - - -
LOAN MIX AND STRATIFICATION STATISTICS
BNC BANCORP
(Dollars in thousands)
(Unaudited) Trends
------
September September
30, June 30, March 31, December 31, 30,
---------- -------- --------- ------------ ----------
2011 2011 2011 2010 2010
---- ---- ---- ---- ----
Loans Not Covered
Under Loss Share
Agreements:
Construction, A&D,
and Land $212.8 $196.6 $194.1 $200.9 $202.4
------------------ ------ ------ ------ ------ ------
Residential
Construction 25.2 24.9 28.0 29.9 31.1
Presold 13.6 12.2 12.3 12.2 12.8
Speculative 11.6 12.7 15.7 17.7 18.3
Loan size -over
$400,000 1.5 3.8 4.5 6.8 6.1
Loan size -$200,000
to $400,000 1.0 3.7 1.7 4.8 6.3
Loan size -under
$200,000 9.1 5.2 9.5 6.1 5.9
Commercial
Construction 73.5 54.4 43.9 44.9 40.1
Loan size -$5
million and over 14.1 12.6 7.4 12.5 12.5
Loan size -$3
million to $5
million 8.7 7.8 10.9 8.0 8.0
Loan size -$1
million to $3
million 34.5 20.9 11.4 14.9 12.1
Loan size -under $1
million 16.2 13.1 14.2 9.5 7.5
Residential and
Commercial A&D 21.6 22.0 23.4 27.1 30.1
Loan size -$5
million to $6
million 6.1 6.0 6.1 11.7 11.7
Loan size -$3
million to $5
million - - - - 3.6
Loan size -$1
million to $3
million 11.1 12.1 11.9 10.0 10.1
Loan size -under $1
million 4.4 3.9 5.4 5.4 4.7
- - - - -
Land 92.5 95.3 98.8 99.0 101.1
Residential Buildable
Lots 33.1 36.0 40.3 42.8 44.9
Commercial Buildable
Lots 13.5 13.5 14.7 13.6 13.5
Land Held for
Development 26.1 26.6 26.8 26.9 27.0
Raw and Agricultural
Land 19.8 19.2 17.0 15.7 15.7
Commercial Real
Estate $649.5 $605.8 $588.2 $548.8 $536.2
--------------- ------ ------ ------ ------ ------
Multi-Family 34.4 34.4 43.2 44.5 42.0
Churches 36.2 28.2 26.9 26.0 19.2
Retail 457.7 425.1 400.4 372.1 371.0
Owner Occupied 137.5 136.6 123.4 118.2 117.7
Investment 319.9 288.5 277.0 253.9 253.3
Loan size -$5
million to $9
million 61.9 51.7 54.3 45.8 46.1
Loan size -$3
million to $5
million 61.2 54.3 50.9 47.4 47.6
Loan size -$1
million to $3
million 107.8 98.5 91.8 82.7 83.1
Loan size -under $1
million 89.0 84.0 80.0 78.0 76.5
Industrial 121.2 118.1 117.7 106.2 104.0
Owner Occupied 61.1 59.6 58.7 51.8 49.8
Investment 60.1 58.5 59.0 54.4 54.2
Loan size -$5
million to $6
million - - - - -
Loan size -$3
million to $5
million 7.6 7.6 7.7 4.4 4.3
Loan size -$1
million to $3
million 27.2 26.0 25.1 23.8 24.1
Loan size -under $1
million 25.3 24.9 26.2 26.2 25.8
Other - - - - -
SOURCE BNC Bancorp
