2014

Bank of the Carolinas Corporation Reports Fourth Quarter and Full Year Financial Results

MOCKSVILLE, N.C., Feb. 11 /PRNewswire-FirstCall/ --  Bank of the Carolinas Corporation (Nasdaq: BCAR) reported today financial results for the three-month period and year ended December 31, 2009.

For the three-month period ended December 31, 2009, the Company incurred a net loss of $1,778,000, as compared to a net loss of $640,000 in the fourth quarter of 2008.  The net loss available to common shareholders for the three months ended December 31, 2009 was $2,004,000, or $.51 per common share, compared to a net loss per share of $.16 in the final quarter of 2008.  

For the year ended December 31, 2009, the Company reported a net loss of $3,130,000 compared to a net loss of $3,624,000 for 2008.  The net loss available to common shareholders for 2009 was $3,767,000, or $.97 per common share, compared to a net loss of $.92 for 2008.

The economic downturn, which began in late 2007, continues to adversely affect the Company's operating results manifested by much higher than normal loan loss provisions and costs associated with foreclosed real estate for the second consecutive year. These costs were partially mitigated in the 2009 calendar year by improved interest margins, driven by lower funding costs, and gains from sales of securities.

Net interest income, the Company's principal source of revenue, totaled $4.4 million in the fourth quarter of 2009, a 33.1% increase from the comparable 2008 quarter.  For the year of 2009 net interest income was $14.7 million, a 15.6% increase over 2008.  These positive results were due to increased interest margins principally brought about by reduced cost of interest-bearing deposits.  

As of December 31, 2009, the Company's nonperforming assets totaled $17.4 million and consisted of $9.2 million in nonperforming loans and $8.2 million in foreclosed properties and other real estate owned.  Nonperforming assets amounted to 2.86% of total assets at that date.  The year-end 2009 level compares to nonperforming assets totaling $15.5, or 2.33% of total assets as of September 30, 2009 and $12.3 million, or 2.20% of total assets at December 31, 2008.

The provision for loan losses totaled $3,081,000 for the quarter ended December 31, 2009, an increase of 50.6% from the provision of $2,046,000 for the fourth quarter of 2008.  For the year ended December 31, 2009, the loan loss provision totaled $5,547,000, a decline of 11.8% from the $6,291,000 provision recorded in 2008.  The allowance for loan losses was 2.09% of total loans as of December 31, 2009, and net charge-offs for the current year represented .92% of average loans outstanding.  While we and the banking industry as a whole continue to face credit challenges, as always, we remain committed to helping our customers weather the current economic storm to the best of our ability while being aggressive in identifying troubled assets in our portfolio.  

Noninterest expenses totaled $4.7 million for the fourth quarter of 2009, an increase of 9.1% from the comparable quarter of 2008.  For the year ended December 31, 2009, noninterest expenses totaled $17.5 million, an increase of 15.8% from 2008.  The most significant drivers in the cost increase for 2009 were substantially higher costs related to FDIC insurance due to the increased assessment rate levied on all banks, significantly higher costs related to ownership and disposal of other real estate, and substantial increases in expenses for data processing and professional services. Offsetting a portion of the above described increases in 2009 noninterest expenses was the absence of any goodwill impairment charge, which amounted to $591,000 in 2008.  Noninterest income, exclusive of securities gains, remained relatively flat for the fourth quarter and full year of 2009 compared to 2008.  

Total assets at December 31, 2009 amounted to $610.4 million, an increase of 8.6% when compared to the $562.0 million as of December 31, 2008.  Loans totaled $391.3 million at December 31, 2009, a decline of 3.5% from a year earlier while deposits grew 11.1% over the prior year to $493.9 million.

The Company continues to be well-capitalized with a Tier 1 Leverage Ratio of 7.27%, a Tier 1 capital to risk-weighted assets ratio of 9.86% and a Total Capital to risk-weighted assets ratio of 11.67% as of December 31, 2009.

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.  Common stock of the Company is traded on the NASDAQ Global Market under the symbol BCAR.

For further information contact:


Michael D. Larrowe

Chief Financial Officer

Bank of the Carolinas

(336) 998-1799 x 171


DISCLOSURES ABOUT FORWARD LOOKING STATEMENTS

This press release may contain statements relating to our financial condition, results of operations, plans, strategies, 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.  Those statements, may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Forward-looking statements may be identified by terms such as "may," "will," "should," "could," "expects," "plans," "intends," "anticipates," "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.  Forward-looking information is inherently subject to risks and uncertainties, and our actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk 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 Commission's website at www.sec.gov.  Other factors that could influence the accuracy of forward-looking statements include, but are not limited to, (a) pressures on the earnings, capital and liquidity of financial institutions resulting from current and future adverse conditions in the credit and equity markets and the banking industry in general; (b) changes in competitive pressures among depository and other financial institutions or in our ability to compete successfully against the larger financial institutions in our banking markets; (c) the financial success or changing strategies of our customers; (d) actions of government regulators, or changes in laws, regulations or accounting standards, that adversely affect our business; (e) changes in the interest rate environment and the level of market interest rates that reduce our net interest margins and/or the volumes and values of loans we make and securities we hold; (f) changes in general economic or business conditions and real estate values in our banking markets (particularly changes that affect our loan portfolio, the abilities of our borrowers to repay their loans, and the values of loan collateral); and (g) other developments or changes in our business that we do not expect.  Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  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 we do not intend, to update these forward-looking statements.

    
    
    Bank of the Carolinas Corporation
    Consolidated Balance Sheets
    (In thousands except share data)
    (Unaudited)
    
                                                           December 31,
                                                           ------------
                                                        2009            2008
                                                        ----            ----
    Assets:
    Cash and due from banks, noninterest-bearing      $3,524          $8,271
    Temporary investments                             33,835           2,220
    Investment securities                            140,004         113,139
    Loans                                            391,265         405,402
    Less, allowance for loan losses                   (8,167)         (6,308)
                                                      ------          ------
        Total loans, net                             383,098         399,094
    Premises and equipment, net                       14,010          15,324
    Other real estate owned                            8,233           5,622
    Bank owned life insurance                         10,010           9,645
    Accrued interest receivable                        2,397           3,039
    Other assets                                      15,276           5,653
                                                      ------           -----
        Total Assets                                $610,387        $562,007
                                                    ========        ========
    
    Liabilities:
    Noninterest bearing demand deposits              $36,418         $27,507
    Interest bearing demand deposits                  34,614          28,172
    Savings deposits                                  11,042          21,903
    Money Market deposits                            224,499         210,379
    Time deposits                                    187,344         156,579
                                                     -------         -------
        Total deposits                               493,917         444,540
    Securities sold under repurchase
     agreements                                       46,682          46,557
    Federal home loan bank advances                   15,000          25,000
    Subordinated debt                                  7,855           7,855
    Other liabilities                                  1,941           1,464
                                                       -----           -----
        Total Liabilities                            565,395         525,416
                                                     -------         -------
    Shareholders' Equity:
    Preferred stock, no par value                     13,179               -
    Discount on preferred stock                       (1,245)              -
    Common stock, $5 par value per share              19,486          19,456
    Additional paid-In capital                        12,978          11,625
    Retained earnings                                    300           4,067
    Accumulated other comprehensive income               294           1,443
                                                         ---           -----
        Total Shareholders' Equity                    44,992          36,591
                                                      ------          ------
        Total Liabilities and Shareholders' Equity  $610,387        $562,007
                                                    ========        ========
    
    Preferred shares authorized                    3,000,000       3,000,000
    Preferred shares issued and outstanding           13,179               -
    Common shares authorized                      15,000,000      15,000,000
    Common shares issued and outstanding           3,897,174       3,891,174
    Book value per common share                        $8.16           $9.40
                                                       =====           =====
    
    
    
    Bank of the Carolinas Corporation
    Consolidated Statements of Income
    (In thousands except share and per share data)
    
    (Unaudited)                Three months ended            Year ended
                                   December 31               December 31
                             ---------------------       -------------------
                               2009           2008       2009           2008
                               ----           ----       ----           ----
    Interest income
      Interest and fees
       on loans              $5,781         $6,314    $23,685        $26,276
      Interest on securities  1,321          1,453      5,860          4,091
      Other interest income      20             27         76            208
                                ---            ---        ---            ---
        Total interest income 7,122          7,794     29,621         30,575
                              -----          -----     ------         ------
    Interest expense
      Interest on deposits    2,025          3,661     11,868         15,619
      Interest on borrowed
       funds                    723            847      3,087          2,265
                                ---            ---      -----          -----
        Total interest
         expense              2,748          4,508     14,955         17,884
                              -----          -----     ------         ------
    Net interest income       4,374          3,286     14,666         12,691
      Provision for loan
       Losses                 3,081          2,046      5,547          6,291
                              -----          -----      -----          -----
      Net interest income
       after provision for
       loan losses            1,293          1,240      9,119          6,400
                              -----          -----      -----          -----
    Noninterest income
      Customer service
       charges and fees         316            308      1,335          1,413
      Increase in cash
       value of life
       insurance                 93             89        365            362
      Gains on securities, net  189            615      1,530            615
      Other income               36              8         67             70
                                ---            ---        ---            ---
        Total noninterest
         income                 634          1,020      3,297          2,460
                                ---          -----      -----          -----
    Noninterest expense
      Salaries and benefits   2,081          1,725      7,040          7,054
      Occupancy and equipment   574            539      2,221          2,021
      FDIC insurance expense    573             87      1,505            327
      Valuation provisions and
       net operating costs
       associated with
       foreclosed real estate   140            902      1,899          1,117
      Goodwill impairment
       charge                     -              -          -            591
      Data processing expense   257            200      1,042            843
      Other noninterest
       expenses               1,072            853      3,807          3,165
                              -----            ---      -----          -----
        Total noninterest
         expenses             4,697          4,306     17,514         15,118
                              -----          -----     ------         ------
    Income (loss) before
     income taxes            (2,770)        (2,046)    (5,098)        (6,258)
      Provision for income
       Taxes                   (992)        (1,406)    (1,968)        (2,634)
                               ----         ------     ------         ------
    Net income (loss)       $(1,778)         $(640)   $(3,130)       $(3,624)
      Dividends and
       accretion on
       preferred stock         (226)             -       (637)             -
                               ----            ---       ----            ---
    Net income (loss)
     available to common
      shareholders          $(2,004)         $(640)   $(3,767)       $(3,624)
                            =======          =====    =======        =======
    Earnings (loss)
     per common share:
      Basic                  $(0.51)        $(0.16)    $(0.97)        $(0.92)
      Diluted                $(0.51)        $(0.16)    $(0.97)        $(0.92)
    Weighted Average
     Common Shares
     Outstanding:
      Basic               3,897,174      3,891,174  3,894,314      3,928,911
      Diluted             3,897,174      3,891,174  3,894,314      3,928,911
    
    
    
    Bank of the Carolinas Corporation
    Other Financial Data
    (Dollars in thousands except per share data)
    
                          As of or for the            As of or for the
                        three months ended              year ended
                            December 31                 December 31
                      ------------------------    -----------------------
                      2009     2008     Change*    2009     2008   Change*
                      ----     ----     -------    ----     ----   -------
    Average balance
     sheet data
                    
      Average
       Loans       $391,574 $407,178    (3.83)%  $401,511 $405,951  (1.09)%
      Average
       earning
       assets       592,150  523,731    13.06     573,018  496,308  15.46
      Average total
       assets       641,095  564,883    13.49     624,508  534,233  16.90
      Average common
       shareholders' 
       equity       $34,669  $36,901    (6.05)%   $35,625  $37,806  (5.77)%
    
    Financial ratios
      Return on
       average
       assets**       (1.10)%  (0.45)%    (65) bps  (0.50)   (0.68)%   18 bps
      Return on
       average common
       shareholders'
       equity **     (22.93)   (6.90)  (1,603)     (10.57)   (9.59)   (98)
      Net interest
       margin **       2.93%    2.50%      43  bps   2.56     2.56%     - bps
    
    Asset quality
     indicators
      Net loan      
       charge-offs   $1,111     $(44)     n/m %     3,688    4,228 (12.77)%
      Total
       nonperforming
       loans          9,224    6,717    37.32       9,224    6,717  37.32
      Total
       nonperforming 
       assets       $17,457  $12,339    41.48%     17,457   12,339  41.48%
    
    Asset quality
     ratios
      Net charge offs
       (recoveries)
       to average
       loans **        1.13%   (0.04)%    117  bps   0.92%    1.04%   (12) bps
      Nonperforming
       loans to total
       loans           2.36     1.66       70        2.36     1.66     70
      Nonperforming
       assets to
       total assets    2.86     2.20       66        2.86     2.20     66
      Allowance for
       loan losses to
       total loans     2.09%    1.56%      53  bps   2.09%    1.56%    53 bps
    
    Per share amounts
     available to
     common
     shareholders
      Basic earnings
       (loss) per       
       common share  $(0.51)  $(0.16) (218.75)%    $(0.97)  $(0.92) (5.43)%
      Diluted
       earnings
       (loss) per
       common share   (0.51)   (0.16) (218.75)     $(0.97)  $(0.92) (5.43)
      Book value per         
       common share   $8.16    $9.40   (13.19)%     $8.16    $9.40 (13.19)%
    
    *   bps denotes basis points.
    **  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.