2014

Bank of the Carolinas Corporation Reports First Quarter Financial Results

MOCKSVILLE, N.C., May 4, 2012 /PRNewswire/ -- Bank of the Carolinas Corporation (OTCQB: BCAR) today reported financial results for the three-month period ended March 31, 2012.

For the three-month period ended March 31, 2012, the Company reported a net loss available to common shareholders of $2.7 million as compared to a net loss of $8.8 million for the fourth quarter of 2011 and a net loss of $3.4 million for the first quarter of 2011.  The net loss per common share was $0.70 for the first quarter of 2012 compared with a net loss per share of $2.26 for the fourth quarter of 2011 and a net loss per share of $0.88 for the first quarter of 2011.

First quarter results were negatively impacted by loan loss provisions and expenses related to foreclosed real estate as the Bank continues to aggressively work on reducing problem assets.  The provision for loan losses totaled $1.3 million in the first quarter of 2012 as compared to $2.3 million in the first quarter a year ago.  Costs related to foreclosed real estate were $864,000 for the first quarter of 2012 as compared to $274,000 in the first quarter of 2011.  For the first quarter of 2012, total credit-related costs totaled $2.2 million, or a 19.5% decrease over the previous year's first quarter costs of $2.7 million.

The Company had significant improvement in the level of nonperforming assets for the fourth consecutive quarter as they decreased to $23.4 million or 4.87% of total assets at March 31, 2012, down from $37.2 million at March 31, 2011.  The Company continued to build its allowance for loan losses in the first quarter bringing it to 2.72% of total loans as of March 31, 2012 as compared to 2.31% as of March 31, 2011. Net loan charge-offs amounted to $1.4 million for the first quarter of 2012 as compared to $894,000 in the first quarter of 2011.

The Company's net interest margin was 2.81% in the first quarter of 2012, which is a decrease from 3.02% in the first quarter in 2011.  Noninterest expense for the first quarter, excluding the costs related to foreclosed real estate, increased 13.8% in 2012 versus 2011. The increase year over year was mainly driven by increased FDIC premiums, legal expenses, and costs related to the Company's compliance with the regulatory consent order put in place in the second quarter of 2011. 

Total assets at March 31, 2012 amounted to $480.0 million, a decrease of 10.7% when compared to $537.0 million as of March 31, 2011.   Loans totaled $296.1 million at March 31, 2012, a decline of 17.7% from a year earlier.  Deposits decreased 2.5% over the prior year to $413.0 million, which correlates directly with the reduction of brokered certificates of deposit.

The Company's banking subsidiary had a Tier 1 leverage capital ratio and Tier 1 capital to risk-weighted assets ratio of 3.75% and 5.18% respectively, while its total capital to risk-weighted assets ratio was 6.45% as of March 31, 2012.

Bank of the Carolinas Corporation is the holding company for Bank of the Carolinas, a North Carolina chartered bank headquartered in Mocksville, NC with offices in Advance, Asheboro, Cleveland, Concord, Harrisburg, King, Landis, Lexington and Winston-Salem.  The common stock of the Company is quoted under the symbol "BCAR" on the OTCQB marketplace operated by the OTC Markets Group Inc.

For further information contact:


    Stephen R. Talbert

    President and Chief Executive Officer

    Bank of the Carolinas Corporation

    (336) 751-5755

DISCLOSURES ABOUT FORWARD LOOKING STATEMENTS

Statements in this press release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, expectations or beliefs about future events or results, and other statements that are not descriptions of historical facts, may be forward-looking statements as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors which include, but are not limited to, factors discussed in our Annual Report on Form 10-K and in other documents we file with the Securities and Exchange Commission from time to time.  Copies of those reports are available directly through the SEC's Internet website at www.sec.gov.  Forward-looking statements may be identified by terms such as "may," "will," "should," "could," "expects," "plans," "intends," "anticipates," "feels," "believes," "estimates," "predicts," "forecasts," "potential" or "continue," or similar terms or the negative of these terms, or other statements concerning opinions or judgments of our management about future events.  Factors that could influence the accuracy of forward-looking statements include, but are not limited to (a) pressures on our earnings, capital and liquidity resulting from current and future conditions in the credit and capital markets, (b) continued or unexpected increases in nonperforming loans and credit losses in our loan portfolio, (c) continued adverse conditions in the economy and in the real estate market in our banking markets (particularly those conditions that affect our loan portfolio, the abilities of our borrowers to repay their loans, and the values of collateral that secures our loans), (d) the financial success or changing strategies of our customers, (e) actions of government regulators, or change in laws, regulations or accounting standards, that adversely affect our business, (f) changes in the interest rate environment and the level of market interest rates that reduce our net interest margins and/or the values of loans we make and securities we hold,  (g) changes in competitive pressures among depository and other financial institutions or in our ability to compete effectively against other financial institutions in our banking markets, and (h) other developments or changes in our business that we do not expect.  Although we believe that the expectations reflected in the forward-looking statements included in this press release are reasonable, they represent our management's judgments only as of the date they are made, and we cannot guarantee future results, levels of activity, performance or achievements.  As a result, readers are cautioned not to place undue reliance on these forward-looking statements.  All forward-looking statements attributable to us are expressly qualified in their entirety by the cautionary statements in this paragraph.  We have no obligation, and do not intend, to update these forward-looking statements.

 

Bank of the Carolinas Corporation





Consolidated Balance Sheets










(In Thousands Except Share Data)





(Unaudited)












March 31,



2012


2011

Assets:





Cash and due from banks, noninterest-bearing


$     4,674


$      4,174

Temporary investments


46,807


19,193

Investment securities


103,682


116,879

Loans


296,092


359,561

 Less, allowance for loan losses


(8,048)


(8,314)

     Total loans, net


288,044


351,247

Premises and equipment, net


12,256


12,859

Other real estate owned


7,502


9,375

Bank owned life insurance


10,823


10,460

Other assets


5,970


12,871

     Total Assets


$  479,758


$   537,058






Liabilities:





Noninterest bearing demand deposits


$    36,087


$     36,411

Interest-checking deposits


38,349


35,221

Savings and money market deposits


104,733


110,401

Time deposits


233,816


241,706

     Total deposits


412,985


423,739

Securities sold under repurchase agreements


45,418


45,458

Federal Home Loan Bank advances


-


20,000

Subordinated debt


7,855


7,855

Other liabilities


2,694


1,819

     Total Liabilities


468,952


498,871

Shareholders' Equity:





Preferred stock,  no par value


13,179


13,179

Discount on preferred stock 


(644)


(923)

Common stock, $5 par value per share


19,479


19,486

Additional paid-in capital


12,992


12,984

Retained earnings (loss)


(35,166)


(6,715)

Accumulated other comprehensive income


966


176

     Total Shareholders' Equity


10,806


38,187

     Total Liabilities and Shareholders' Equity


$  479,758


$   537,058






Preferred shares authorized


3,000,000


3,000,000

Preferred shares issued and outstanding


13,179


13,179

Common shares authorized


15,000,000


15,000,000

Common shares issued and outstanding


3,895,840


3,897,174






Book value per common share


$      (0.61)


$        6.42






Bank of the Carolinas Corporation




Consolidated Statements of Income








(In Thousands Except Share Data)




(Unaudited)





Three Months Ended


March 31,


2012


2011



Interest income




   Interest and fees on loans

$           3,786


$           4,650

   Interest on securities

737


754

   Other interest income

17


11

     Total interest income

4,540


5,415





Interest expense




   Interest on deposits

899


1,154

   Interest on borrowed funds

564


613

      Total interest expense

1,463


1,767





Net interest income

3,077


3,648

   Provision for loan losses

1,292


2,345

   Net interest income after provision for




     loan losses

1,785


1,303





Noninterest income




   Customer service fees

281


305

   Increase in value of bank owned life insurance

91


89

Gains on investment securities

748


-

   Other income (loss)

7


8

     Total non-interest income

1,127


402





Noninterest expense




   Salaries and benefits

1,758


1,586

   Occupancy and equipment

504


542

FDIC insurance assessments

418


270

   Data processing services

239


212

Valuation provisions and net operating costs




associated with foreclosed real estate

839


250

   Other

1,262


1,063

     Total non-interest expense

5,020


3,923

Loss before income taxes

(2,108)


(2,218)

   Provision for Income taxes

368


996

Net loss

(2,476)


(3,214)

Dividends and accretion on preferred stock

(237)


(232)

Net loss available 




to common shareholders

(2,713)


(3,446)





Loss per common share:  




   Basic

$           (0.70)


$           (0.88)

   Diluted

$           (0.70)


$           (0.88)





Bank of the Carolinas Corporation








Other Financial Data
















(In Thousands Except Share Data)








(Unaudited)











                       As of or for the







three months ended March 31,





2012

2011

Change*


Average balance sheet data









Average loans

$ 302,002


$364,522


(17.15)

%



Average earning assets

439,771


489,314


(10.12)




Average total assets

483,113


540,531


(10.62)




Average common shareholders' equity

235


28,592


(99.18)




Average total shareholders' equity

13,414


41,771


(67.89)























Period-end balance sheet data:









Total loans

$ 296,092


$359,561


(17.65)

%



Allowance for loan losses

(8,048)


(8,314)


(3.20)




Total assets

479,758


537,058


(10.67)




Total deposits

412,985


423,739


(2.54)




Common shareholders' equity

(2,373)


25,008


(109.49)




Total shareholders' equity

10,806


38,187


(71.70)























Asset quality indicators









Net loan charge-offs 

$      1,345


$        894


 N/M 

%



Total nonperforming loans

15,860


27,860


(43.07)




Total nonperforming assets

23,412


37,235


(37.12)























Asset quality ratios









Net-chargeoffs (recoveries) to average loans **

1.79

%

0.99

%

80

BP



Nonperforming loans to total loans

5.36


7.75


(239)




Nonperforming assets to total assets

4.88


6.93


(205)




Nonperforming assets to loan-related assets

7.71


10.09


(238)




Allowance for loan losses to total loans

2.72


2.31


41























Financial ratios









Return on average assets **

(2.06)

%

(2.41)

%

35

BP



Return on average common shareholders' equity **

 N/M 


(48.88)


 N/M 




Net interest margin **

2.81


3.02


(21)























Per share amounts available to common shareholders









Basic earnings (loss) per common share

$       (0.70)


$      (0.88)


21.24

%



Diluted earnings (loss) per common share

(0.70)


(0.88)


21.24




Book value per common share

(0.61)


6.42


(109.49)























*   BP denotes basis points. N/M denotes not meaningful.








** ratio annualized.


















SOURCE Bank of the Carolinas Corporation



More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.