2014

Bank of the Carolinas Corporation Reports Third Quarter Financial Results

MOCKSVILLE, N.C., Nov. 9, 2012 /PRNewswire/ -- Bank of the Carolinas Corporation (OTCQB: BCAR) today reported financial results for the three- and nine-month periods ended September 30, 2012.

For the three-month period ended September 30, 2012, the Company reported a net loss available to common shareholders of $3.2 million as compared to a net loss of $170,000 for the second quarter of 2012 and a net loss of $7.1 million for the third quarter of 2011.  The net loss per diluted common share was $0.82 for the third quarter of 2012 compared with a net loss per share of $0.04 for the second quarter of 2012 and a net loss per share of $1.82 for the third quarter of 2011.

For the nine-month period ended September 30, 2012, the Company reported a net loss available to common shareholders of $6.1 million or $1.56 per common share, compared to a net loss of $20.4 million or $5.23 per common share for the nine-month period ended September 30, 2011.

During the first nine months of 2012, the Company realized gains on investment securities of $2.1 million, which resulted in income tax expense of $409,000.  The Company also had a non-recurring gain on bank owned life insurance of $415,000 during the second quarter of 2012.  The Company continues to reevaluate and maintain its foreclosed real estate, which resulted in expenses of $2.4 million in the first nine months of 2012. This is an improvement compared to expenses of $4.1 million associated with foreclosed real estate in the first nine months of 2011. 

The Company's net interest margin was 2.81% in the third quarter of 2012, which is a decrease from 2.93% in the third quarter of 2011.  Noninterest expense through September 30, excluding the costs related to foreclosed real estate, only increased 2.9% in 2012 versus 2011 and for the three-month periods decreased 3.1% in the third quarter of 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.

The Company continues with significant improvement in the levels of nonperforming assets for the sixth consecutive quarter.  As of September 30, 2012, the Company's nonperforming assets decreased to $13.5 million and amounted to 3.02% of total assets as compared to $16.9 million or 3.58% of total assets as of June 30, 2012, and compared to $28.9 million, or 5.72% of total assets as of September 30, 2011.  The allowance for loan losses was 2.65% of total loans as of September 30, 2012. Net loan charge-offs amounted to $1.6 million for the third quarter of 2012, an increase from $740,000 in the second quarter of 2012 and a decrease from $3.6 million in the third quarter of 2011.    

Total assets at September 30, 2012 amounted to $448.3 million, a decrease of 11.4% when compared to $505.9 million as of September 30, 2011.   Loans totaled $280.7 million at September 30, 2012, a decline of 13.6% from a year earlier, and deposits decreased 7.9% over the prior year to $384.5 million. The Company's deposit mix has improved by decreasing non-core brokered deposits by 35.3% since September 30, 2011.

The Company's banking subsidiary had a Tier 1 leverage capital ratio and Tier 1 capital to risk-weighted assets ratio of 3.37% and 4.73% respectively, while its total capital to risk-weighted assets ratio was 5.99% as of September 30, 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)





September 30,




2012


2011


Assets:






Cash and due from banks, noninterest-bearing


$       3,987


$       4,922


Temporary investments


17,553


27,061


Investment securities


121,387


113,768


Loans


280,671


324,757


 Less, allowance for loan losses


(7,450)


(8,691)


     Total loans, net


273,221


316,066


Premises and equipment, net


11,911


12,448


Other real estate owned


5,424


9,825


Bank owned life insurance


10,447


10,640


Other assets


4,343


11,147


     Total Assets


$    448,273


$    505,877








Liabilities:






Noninterest bearing demand deposits


$     34,756


$     34,446


Interest-checking deposits


39,138


38,527


Savings and money market deposits


106,541


103,163


Time deposits


204,095


241,422


     Total deposits


384,530


417,558


Securities sold under repurchase agreements


45,379


45,412


Federal Home Loan Bank advances


-


10,000


Subordinated debt


7,855


7,855


Other liabilities


1,919


1,809


     Total Liabilities


439,683


482,634


Shareholders' Equity:






Preferred stock,  no par value


13,179


13,179


Discount on preferred stock 


(496)


(787)


Common stock, $5 par value per share


19,479


19,486


Additional paid-in capital


12,991


12,984


Retained earnings (loss)


(37,463)


(23,233)


Accumulated other comprehensive income


900


1,614


     Total Shareholders' Equity


8,590


23,243


     Total Liabilities and Shareholders' Equity


$    448,273


$    505,877








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


$        (1.18)


$         2.58









Bank of the Carolinas Corporation

Consolidated Statements of Income

(In Thousands Except Share Data)

(Unaudited)


Three months ended


Nine months ended



September 30


September 30



2012


2011


2012


2011

Interest income









   Interest and fees on loans


$    3,571


$    4,276


$   10,905


$   13,415

   Interest on securities


723


823


2,043


2,422

  Other interest income


13


16


59


42

     Total interest income


4,307


5,115


13,007


15,879

Interest expense









   Interest on deposits


779


1,075


2,530


3,405

   Interest on borrowed funds


570


571


1,698


2,075

      Total interest expense


1,349


1,646


4,228


5,480

Net interest income


2,958


3,469


8,779


10,399

   Provision for loan losses


1,471


5,650


2,996


14,567

   Net interest income (loss) after provision for loan losses


1,487


(2,181)


5,783


(4,168)

Noninterest income









   Customer service fees


297


318


867


951

   Increase in value of banked owned life insurance


89


91


685


269

 Gains on investment securities


-


-


2,147


6

  Other income


5


6


20


16

     Total noninterest income


391


415


3,719


1,242

Noninterest expense









   Salaries and benefits


1,723


1,757


5,266


4,947

   Occupancy and equipment


468


502


1,451


1,571

   FDIC insurance assessments


405


345


1,225


949

   Data processing expense


257


218


737


654

   Valuation provisions and net operating costs associated with foreclosed real estate


1,324


1,053


2,415


4,050

   Other


1,048


1,205


3,371


3,591

     Total noninterest expenses


5,225


5,080


14,465


15,762

Income (Loss) before income taxes


(3,347)


(6,846)


(4,963)


(18,688)

   Provision for income taxes


(383)


-


409


996

Net income (loss)


$   (2,964)


$   (6,846)


$   (5,372)


$  (19,684)

  Dividends and accretion on preferred stock


(239)


(234)


(714)


(698)

Net loss available to common shareholders


$   (3,203)


$   (7,080)


$   (6,086)


$  (20,382)










Loss per common share:









   Basic


$     (0.82)


$     (1.82)


$     (1.56)


$     (5.23)

   Diluted


$     (0.82)


$     (1.82)


$     (1.56)


$     (5.23)










Weighted Average Common Shares Outstanding:









   Basic


3,895,840


3,897,174


3,895,840


3,897,174

   Diluted


3,895,840


3,897,174


3,895,840


3,897,174











Bank of the Carolinas Corporation


Other Financial Data


(Dollars in thousands except per share amounts)






As of or for the






nine months ended September 30






2012


2011


Change*


Average balance sheet data












Average loans


$  291,858



$  350,768



(16.79)

%



Average earning assets


432,317



482,482



(10.40)




Average total assets


472,327



531,712



(11.17)




Average common shareholders' equity


(2,034)



22,222



(109.15)




Average total shareholders' equity


11,145



35,401



(68.52)
















Period-end balance sheet data:












Total loans


$  280,671



$  324,757



(13.58)

%



Allowance for loan losses


(7,450)



(8,691)



(14.28)




Total assets


448,273



505,877



(11.39)




Total deposits


384,530



417,558



(7.91)




Total common shareholders' equity


(4,589)



10,064



(145.60)




Total shareholders' equity


8,590



23,243



(63.04)
















Asset quality indicators












Net loan charge-offs 


$     3,647



$    12,739



(71.38)

%



Total nonperforming loans


8,124



19,116



(57.50)




Total nonperforming assets


13,549



28,941



(53.18)
















Asset quality ratios












Net-chargeoffs (recoveries) to average loans **


1.67

%


4.86

%


(319)

BP



Nonperforming loans to total loans


2.89



5.89



(299)




Nonperforming assets to total assets


3.02



5.72



(270)




Nonperforming assets to loan-related assets


4.74



8.65



(391)




Allowance for loan losses to total loans


2.65



2.68



(2)
















Financial ratios












Return on average assets **


(1.52)

%


(4.95)

%


343

BP



Return on average common shareholders' equity **


 N/M 



(122.63)



 N/M 




Net interest margin **


2.71



2.88



(17)
















Per share amounts available to common shareholders












Basic earnings (loss) per common share


$      (1.56)



$      (5.23)



70.17

%



Diluted earnings (loss) per common share


(1.56)



(5.23)



70.17




Book value per common share


(1.18)



2.58



(145.61)





























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


** ratio annualized.


 

Bank of the Carolinas Corporation


Other Financial Data (continued)


(Dollars in thousands except per share amounts)






As of or for the






three months ended September 30






2012


2011


Change*


Average balance sheet data












Average loans


$  282,639



$  334,427



(15.49)

%



Average earning assets


418,426



469,433



(10.87)




Average total assets


456,774



516,355



(11.54)




Average common shareholders' equity


(4,462)



15,148



(129.46)




Average total shareholders' equity


8,717



28,327



(69.23)
















Asset quality indicators












Net loan charge-offs 


$     1,562



$     3,645



(57.14)

%















Asset quality ratios












Net-chargeoffs (recoveries) to average loans **


2.20

%


4.32

%


(212)

BP















Financial ratios












Return on average assets **


(2.58)

%


(5.26)

%


268

BP



Return on average common shareholders' equity **


 N/M 



(185.44)



 N/M 




Net interest margin **


2.81



2.93



(12)
















Per share amounts available to common shareholders












Basic earnings (loss) per common share


$      (0.82)



$      (1.82)



54.95

%



Diluted earnings (loss) per common share


(0.82)



(1.82)



54.95




Book value per common share


(1.18)



2.58



(145.61)





























*   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.