BNC Bancorp Announces Earnings for Fourth Quarter and Full Year 2013

Jan 24, 2014, 09:00 ET from BNC Bancorp

HIGH POINT, N.C., Jan. 24, 2014 /PRNewswire/ -- BNC Bancorp (NASDAQ: BNCN) ("Company"), parent company for Bank of North Carolina ("Bank"), today reported financial results for the fourth quarter and year ended December 31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20030917/BNCLOGO )

Highlights for 2013:

  • BNC Bancorp's stock was the highest performing bank stock in the Southeast United States based on a recent study provided by Bank Street Partners;
  • Richard D. Callicutt II was named President and Chief Executive Officer, upon the planned retirement of founding President and CEO, W. Swope Montgomery, Jr.;
  • Operating earnings per diluted share of $0.71, compared to $0.00 per diluted share for 2012;
  • Operating earnings of $19.1 million, compared to operating loss of $3.3 million for 2012;
  • Loans not recorded at fair value increased 17.6% during fiscal year 2013;
  • Fully taxable-equivalent net interest margin increased to 4.29%, compared to 3.85% for 2012;
  • Completed acquisition of Randolph Bank & Trust ("Randolph"), increasing our presence in Piedmont Triad area of North Carolina by approximately $250 million; and
  • Announced merger agreements with both South Street Financial Corporation, the parent company of Home Savings Bank, FSB in Albemarle, North Carolina ("South Street"), and Community First Financial Group, Inc. ("Community First"), the parent company of Harrington Bank, FSB in Chapel Hill, North Carolina.

Operating earnings for the quarter ended December 31, 2013 totaled $5.7 million, or $0.21 per diluted share, an increase of 12.7% compared to $5.1 million, or $0.19 per diluted share, for the quarter ended September 30, 2013, and an increase from an operating loss of $0.1 million, or $0.00 per diluted share, for the quarter ended December 31, 2012.  Operating earnings exclude transaction-related expenses, bargain purchase gain on acquisitions, acquisition-related gains, and gain (loss) on sale of securities, and include preferred stock dividends.

Operating earnings for the year ended December 31, 2013 totaled $19.1 million, or $0.71 per diluted share, as compared to an operating loss of $3.3 million, or ($0.19) per diluted share, for the year ended December 31, 2012. 

Net income for the year ended December 31, 2013 was $17.2 million, an increase of 65.0% when compared to net income of $10.5 million for the year ended December 31, 2012.  Net income available to common shareholders for the year ended December 31, 2013 was $16.2 million, or $0.61 per diluted share, an increase of 101.1% compared to net income available to common shareholders of $8.0 million, or $0.48 per diluted share, for the year ended December 31, 2012.  The financial results for the year ended December 31, 2012 include $12.7 million of pre-tax bargain purchase gain the Company recorded on the acquisitions of Carolina Federal Savings Bank ("Carolina Federal") and First Trust Bank ("First Trust"), as well as $3.0 million of pre-tax gains on the sale of investment securities.

Net income for the quarter ended December 31, 2013 was $3.3 million, a decrease of 35.2% compared to net income of $5.0 million for both the quarter ended September 30, 2013 and the quarter ended December 31, 2012.  Net income available to common shareholders for the quarter ended December 31, 2013 was $3.3 million, or $0.12 per diluted share, a decrease of 35.0% compared to net income available to common shareholders of $5.0 million, or $0.19 per diluted share, for the quarter ended September 30, 2013, and a decrease of 26.4% compared to net income available to common shareholders of $4.4 million, or $0.19 per diluted share, for the fourth quarter of 2012.  The financial results for the quarter ended December 31, 2013 include the impact of the acquisition of Randolph, which was completed on October 1, 2013, while the results for the quarter ended December 31, 2012 include $5.0 million of pre-tax bargain purchase gain the Company recorded on the acquisition of First Trust.

Average common shares outstanding increased significantly since the second half of 2012 as a result of the Company's capital raise in June 2012, as well as common stock issued in connection with the acquisitions of KeySource Financial ("KeySource"), First Trust and Randolph.  For the years ended December 31, 2013 and 2012, average fully-diluted shares outstanding were 26.7 million and 17.6 million, respectively.

Total assets at December 31, 2013 were $3.23 billion, an increase of 4.7% as compared to total assets of $3.08 billion at December 31, 2012.  The increase in assets is primarily due to the acquisition of Randolph during the fourth quarter of 2013, offset by the Company's decision to utilize excess liquidity to primarily repay higher cost deposits as they matured.  This deleveraging has helped the Company execute on its strategic initiative to improve capital ratios and net interest margin.  Excess liquidity was also used to purchase higher yielding investment securities, which has also contributed to the improved net interest margin.  

Additional Highlights for 2013:

  • Redeemed all Series A Preferred Stock with non-dilutive term loan;
  • Diluted earnings per share of $0.61, compared to $0.48 per diluted share for 2012;
  • Net income available to common shareholders of $16.2 million, an increase of 101.1% compared to 2012;
  • Nonaccrual loans not covered by loss-share decreased 23.7% during fiscal year 2013;
  • Nonperforming assets decreased 27.1% during fiscal year 2013;
  • Fully taxable-equivalent net interest margin, before hedging costs, increased to 4.66%, compared to 4.21% for 2012;
  • Return on tangible common equity ratio of 7.50%, compared to 6.57% for 2012; and
  • Operating return on tangible common equity ratio of 8.79%, compared to (2.28%) for 2012.

Richard D. Callicutt II, President and CEO, stated, "The fourth quarter and all of 2013 were pivotal in solidifying the core earnings power of our organization.  We saw significant improvement in all of our key credit metrics while growing non-acquired loans by more than 17%.  We successfully completed the integration of the acquisitions from 2012 and began to see those provide a more solid platform for gains in market share.  The Randolph transaction and systems conversion were both completed in late 2013, allowing us to maximize the earnings opportunity in 2014 from that transaction.  Finally, the South Street and Community First announcements, both expected to close during the second quarter of 2014, have created more opportunity to leverage our infrastructure, diversify our deposit base, gain access to a client base that will benefit from an enhanced product offering and provide an additional revenue stream toward our future earnings goals.  Lastly, as of October 2013, all Bank of North Carolina employees are shareholders of our Company.  The ownership mentality as they perform their duties and responsibilities each day is paying off in focus, creativity and enthusiasm."  

Operating Results

Fully taxable-equivalent ("FTE") net interest income for the fourth quarter of 2013 was $31.8 million, an increase of 11.9% from $28.5 million for the third quarter of 2013, and an increase of 24.1% from $25.6 million for the fourth quarter of 2012.  FTE net interest margin was 4.39% for the fourth quarter of 2013, an increase of 13 basis points from 4.26% for the third quarter of 2013, and an increase of 30 basis points from 4.09% for the fourth quarter of 2012.  Without the cash flow hedging expense, FTE net interest margin for the fourth quarter of 2013 was 4.76%, compared to 4.65% for the third quarter of 2013 and 4.43% for the fourth quarter of 2012.  

FTE net interest income for the year ended December 31, 2013 was $115.8 million, an increase of 34.1% from $86.4 million for the year ended December 31, 2012.  FTE net interest margin was 4.29% for the year ended December 31, 2013, an increase of 44 basis points from 3.85% for the year ended December 31, 2012.  Without the cash flow hedging expense, FTE net interest margin for the year ended December 31, 2013 was 4.66%, compared to 4.21% for the comparable period of 2012.  

Average interest-earning assets were $2.88 billion for the fourth quarter of 2013, an increase of 8.6% from $2.65 billion during the third quarter of 2013, and an increase of 15.4% from $2.50 billion for the fourth quarter of 2012.  The increase from the third quarter of 2013 was primarily due to the interest-earning assets acquired from Randolph, along with continued loan growth in our markets and an increase in our investment securities portfolio.

Average interest-earning assets were $2.70 billion for the year ended December 31, 2013, an increase of 20.1% from $2.24 billion for the year ended December 31, 2012.  The increase in average interest-earning assets from 2012 is primarily due to the full year impact of interest-earning assets acquired from Carolina Federal, KeySource and First Trust during 2012, interest-earning assets acquired from Randolph during the fourth quarter of 2013, along with continued loan growth in our markets and an increase in our investment securities portfolio.

The Company's average yield on interest-earning assets was 5.48% for the fourth quarter of 2013, an increase of 12 basis points from 5.36% for the third quarter of 2013, and an increase of 10 basis points from 5.38% for the fourth quarter of 2012.  The increase from third quarter of 2013 was primarily due to the addition of higher yielding loans acquired from Randolph, as well as an increase in loan accretion from the acquired loan portfolio.  The increase from the fourth quarter of 2012 was primarily due to higher loan accretion from the acquired loan portfolio, as well as the addition of higher yielding loans acquired from First Trust and Randolph.  Loan accretion during the fourth quarter of 2013 totaled $4.2 million, an increase of 31.0% from loan accretion of $3.2 million for the third quarter of 2013, and an increase of 36.4% from $3.1 million of accretion recorded in the fourth quarter of 2012.

The Company's average yield on interest-earning assets was 5.41% for the year ended December 31, 2013, an increase of 10 basis points compared to 5.31% for the comparable period of 2012.  The increase from 2012 was primarily due to an increase in loan accretion from the acquired loan portfolio, as well as the addition of higher yielding loans acquired from Carolina Federal, KeySource, First Trust and Randolph.  Loan accretion during the year ended December 31, 2013 totaled $14.4 million, an increase of 116.7% from loan accretion of $6.7 million for the year ended December 31, 2012.  These increases were offset by lower yields earned on investment securities due to the replacement of matured and called investments with lower yielding securities.

Average interest-bearing liabilities were $2.56 billion for the fourth quarter of 2013, an increase of 7.6% from $2.38 billion for the third quarter of 2013, and an increase of 11.6% from $2.30 billion for the fourth quarter of 2012.  The increase from the third quarter of 2013 was due to additional interest-bearing liabilities acquired from Randolph, as well as increased borrowings during the fourth quarter of 2013. 

Average interest-bearing liabilities were $2.43 billion for the year ended December 31, 2013, an increase of 14.2% from $2.13 billion for the year ended December 31, 2012.  The increase in average interest-bearing liabilities from 2012 is primarily due to the full year impact of the acquisitions of Carolina Federal, KeySource and First Trust during 2012, increased borrowings during fiscal year 2013 and the acquisition of Randolph, offset by the Company's use of excess liquidity to primarily repay wholesale and non-core deposits as they matured.

The Company's average cost of interest-bearing liabilities was 1.23% for the fourth quarter of 2013, which is consistent with the third quarter of 2013, and a decrease of 18 basis points from 1.41% for the fourth quarter of 2012.  The decrease was due to the Company's continued effort to reduce exposure to higher cost deposit products, as well as lower interest rates paid on borrowings, which was offset by continued increases in cash flow hedging expense.  For the fourth quarter of 2013, cash flow hedging expenses totaled $2.7 million, compared to $2.6 million for the third quarter of 2013 and $2.1 million for the fourth quarter of 2012. 

The Company's average cost of interest-bearing liabilities was 1.24% for the year ended December 31, 2013, a decrease of 31 basis points from 1.55% for the year ended December 31, 2012.  This decrease was primarily due to the Company's decision to reduce exposure to higher cost deposit products and aggressively reduce deposit rates over the past three quarters, as well as reductions in interest rates paid on borrowings.  These rate decreases were slightly offset by an increase in cash flow hedging expense, which totaled $9.9 million for the year ended December 31, 2013, compared to $7.9 million for the year ended December 31, 2012. 

 

Average Yields / Costs (FTE)

(unaudited)

Year Ended December 31,

Three Months Ended

2013

2012

December 31,

2013

September 30,

2013

December 31,

2012

Yield on interest-earning assets

5.41%

5.31%

5.48%

5.36%

5.38%

Cost of interest-bearing liabilities

1.24%

1.55%

1.23%

1.23%

1.41%

Cost of funds

1.11%

1.42%

1.09%

1.10%

1.28%

Net interest spread

4.17%

3.76%

4.25%

4.13%

3.97%

Net interest margin

4.29%

3.85%

4.39%

4.26%

4.09%

Net interest margin w/o hedging expense

4.66%

4.21%

4.76%

4.65%

4.43%

Non-interest income was $5.2 million for the fourth quarter of 2013, a decrease of 11.1% compared to $5.8 million for the third quarter of 2013, and a decrease of 50.2% from $10.4 million for the fourth quarter of 2012.  Adjusted non-interest income was $5.2 million for the fourth quarter of 2013, a decrease of 3.3% from $5.3 million for the third quarter of 2013, and an increase of 8.3% from $4.8 million for the fourth quarter of 2012.  Adjusted non-interest income excludes bargain purchase gain on acquisition, acquisition-related gains (includes income related to the subsequent settlement of a liability assumed in an acquisition) and gain (loss) on sale of securities.  Service charge income increased by 35.4% from the third quarter of 2013 due to an increased volume of transactions, which was offset by a 29.0% decrease in mortgage fees due to decreases in the mortgage pipeline and reduced gain-on-sale margins. 

For the year ended December 31, 2013, non-interest income was $22.8 million, a decrease of 31.2% compared to non-interest income of $33.1 million for the year ended December 31, 2012.  Adjusted non-interest income was $21.7 million for the year ended December 31, 2013, an increase of 24.4% from $17.4 million for the year ended December 31, 2012.  Adjusted non-interest income excludes bargain purchase gain on acquisitions, acquisition-related gains, gain (loss) on sale of securities and an insurance settlement received during 2013.  The increase was primarily due to increased volume of mortgage originations, as the Company continued to expand commissioned originators across key target markets, as well as an increase in service charge income due to an increased volume of transactions, primarily due to our recent acquisitions.

Non-interest expense was $28.6 million for the fourth quarter of 2013, an increase of 27.6% compared to non-interest expense of $22.4 million for the third quarter of 2013, and an increase of 15.1% from $24.9 million for the fourth quarter of 2012.  Excluding transaction-related costs, adjusted non-interest expense for the fourth quarter of 2013 was $24.7 million, an increase of 13.0% from $21.9 million for the third quarter of 2013, and an increase of 5.5% from $23.5 million for the fourth quarter of 2012.  Transaction-related costs include legal and professional fees, personnel costs, data processing expenses, and other miscellaneous expenses directly attributable to the transaction.  The increase from the third quarter of 2013 was primarily due to additional employees and facilities acquired from Randolph.  The decrease from the fourth quarter of 2012 was primarily due to a reduction in valuation charges recorded on other real estate owned ("OREO") and reduced loan, foreclosure and collection expenses.

Non-interest expense was $97.9 million for the year ended December 31, 2013, an increase of 19.0% from $82.3 million for the year ended December 31, 2012.  Excluding transaction-related costs, adjusted non-interest expense for the year ended December 31, 2013 was $92.2 million, an increase of 19.6% from $77.1 million for the year ended December 31, 2012.  The increase from 2012 was primarily due to the full year impact of the additional employees and facilities purchased in connection with the acquisitions of Carolina Federal, KeySource and First Trust during 2012, as well as the acquisition of Randolph during the fourth quarter of 2013.  The additional expenses were partially offset by a reduction in valuation charges recorded on OREO and reduced loan, foreclosure and collection expenses.

 

Non-Interest Income / Non-Interest Expense

(dollars in thousands; unaudited)

Year Ended December 31, 

Three Months Ended

2013

2012

December 31,

2013

September 30,

2013

December 31,

2012

Non-interest income

  Mortgage fees

$         8,979

$         6,169

$           1,710

$          2,408

$         1,902

  Service charges

4,314

3,149

1,354

1,000

916

  Earnings on bank-owned life insurance

2,318

1,771

646

571

541

  Gain (loss) on sale of securities

(42)

3,026

10

-

651

  Bargain purchase gain on acquisitions

-

12,706

-

-

4,972

  Other

7,237

6,317

1,458

1,845

1,412

     Total non-interest income

$       22,806

$       33,138

$           5,178

$          5,824

$       10,394

Non-interest expense

  Salaries and employee benefits

$       51,080

$       40,861

$         13,613

$        12,399

11,986

  Occupancy 

6,547

4,965

1,691

1,666

1,527

  Furniture and equipment

5,542

4,241

1,552

1,351

1,222

  Data processing and supply

3,219

2,607

922

854

704

  Advertising and business development

2,015

1,709

590

228

489

  Insurance, professional and other     services

4,655

3,187

1,495

1,111

1,013

  FDIC insurance assessments

2,766

2,166

660

660

457

  Loan, foreclosure and other real     estate owned

8,949

10,944

2,093

1,962

3,665

  Transaction-related expenses

5,768

5,212

3,884

540

1,406

  Other

7,392

6,380

2,128

1,659

2,402

     Total non-interest expense

$       97,933

$       82,272

$         28,628

$        22,430

$       24,871

The following is a summary of transaction-related expenses incurred by transaction:

Transaction-Related Expenses

(dollars in thousands; unaudited)

Year Ended December 31,

Three Months Ended

Transaction

2013

2012

December 31,

2013

September 30,

2013

December 31,

2012

  Previous transactions

$       1,056

$       5,212

$                -

$                 21

$           1,406

  Randolph

4,509

-

3,681

519

-

  Community First/South Street

203

-

203

-

-

  Total

$       5,768

$       5,212

$           3,884

$               540

$           1,406

Additional Operating Highlights

Total portfolio loans were $2.28 billion at December 31, 2013, an increase of 11.9% from $2.04 billion at December 31, 2012.  The increase has primarily been due to the loans acquired from Randolph, as well as organic growth in commercial real estate and commercial construction loans, as the economic outlook in the Company's markets continues to improve.   Loans not recorded at fair value, which includes originated loans and acquired loans no longer required to be recorded at fair value, increased 21.4% during fiscal year 2013 to $1.77 billion.  Included in this is $56.5 million of loans that have transferred from another loan category during 2013.   Excluding these transfers, loans not recorded at fair value increased 17.6% during 2013.  The table below outlines the Company's loan portfolio mix between covered and non-covered loans for the past five quarters.  

 

Gross Loan Growth

(dollars in thousands; unaudited)

 December 31, 

September 30,

June 30,

March 31,

December 31,

2013

2013

2013

2013

2012

Loans covered by loss share, at fair value

$     170,528

$       183,887

$   202,073

$   224,056

248,930

Loans not covered by loss share, at fair value

334,524

219,671

260,542

270,149

327,674

Loans not recorded at fair value (1)

1,771,465

1,696,484

1,586,326

1,536,944

1,458,654

Total portfolio loans

$  2,276,517

$    2,100,042

$2,048,941

$2,031,149

$  2,035,258

(1) Includes $17,133 of loans covered by loss-share agreements not recorded at fair value at December 31, 2013.

Change in balance (quarter/quarter):

  Total portfolio loans

8.4%

2.5%

0.9%

-0.2%

7.1%

  Loans not recorded at fair value

4.4%

6.9%

3.2%

5.4%

0.6%

Annual growth of loans not recorded at fair value

17.6%

Total deposits at December 31, 2013 were $2.71 billion, an increase of 1.9% from total deposits of $2.66 billion as of December 31, 2012.  This increase was primarily due to deposits acquired from Randolph, offset by the Company's decision to utilize excess liquidity and the acquired securities portfolios to repay higher cost deposits as they matured, as well as aggressively reducing time deposit rates.  Wholesale deposits were 32.8% of total deposits at December 31, 2013, an increase compared to 28.4% as of December 31, 2012.  Transactional accounts, which are comprised of non-interest bearing and interest-bearing demand accounts, increased $127.2 million, or 8.5%, over the past twelve months.  At December 31, 2013, time deposits were 40.0% of total deposits, compared to 43.7% at December 31, 2012. 

 

Total Deposit Growth

(dollars in thousands; unaudited)

December 31,

September 30,

June 30,

March 31,

December 31,

2013

2013

2013

2013

2012

Non-interest bearing demand

$      324,532

$        299,670

$    275,984

$       267,458

$        275,605

Interest-bearing demand

1,299,399

1,172,512

1,152,779

1,171,484

1,221,089

Time deposits

1,082,799

963,679

999,552

1,069,207

1,159,615

Total

$   2,706,730

$     2,435,861

$ 2,428,315

$    2,508,149

$     2,656,309

Change in balance (quarter/quarter)

11.1%

0.3%

-3.2%

-5.6%

15.0%

Annual deposit growth

1.9%

 

Total borrowings at December 31, 2013 were $227.1 million, an increase of 88.4% from total borrowings of $120.6 million as of December 31, 2012.  At December 31, 2013, $125.6 million of these borrowings were short-term, while the remaining $101.5 million were long-term.  The increase in borrowings was primarily due to additional borrowings from the Federal Home Loan Bank, which were used to repay higher cost deposits as they matured, as well as a term loan obtained during 2013 for the repurchase of Series A preferred stock.  

Asset Quality

Net loan charge-offs for the fourth quarter of 2013 were $0.4 million, which included $0.5 million on loans not covered under loss-share agreements and net recoveries of $0.1 million on loans covered under loss-share agreements.  The Company incurred $0.5 million in net charge-off losses, which represented 0.08% of average loans for the fourth quarter of 2013, compared to net charge-off losses of $2.9 million, or 0.55% of average loans, for the third quarter of 2013, and net charge-off losses of $3.8 million, or 0.78% of average loans, for the fourth quarter of 2012.  The decrease in net charge-off losses during the fourth quarter of 2013 was due to an increased level of recoveries of previously charged-off loans, both covered under loss-share agreements and not covered.

Net loan charge-offs for the year ended December 31, 2013 were $20.7 million, which included $11.0 million on loans covered under loss-share agreements and $9.7 million on loans not covered under loss-share agreements.  The Company's share of the covered net loan charge-offs for the year ended December 31, 2013 was $2.2 million, with the remainder being reimbursed by the FDIC. Combined with the $9.7 million of non-covered net charge-offs, the Company incurred $11.9 million in net charge-off losses, or 0.57% of average loans, during the year ended December 31, 2013, compared to $19.5 million in net charge-off losses, or 1.09% of average loans, for the year ended December 31, 2012.

During the fourth quarter of 2013, the Company recorded a provision for loan losses of $2.4 million, a decrease of 27.3% from $3.4 million recorded in the third quarter of 2013, and a decrease of 55.9% from $5.5 million recorded during the fourth quarter of 2012.  The Company recorded $2.5 million of provision for loan losses on non-covered loans during the fourth quarter of 2013 and a provision reversal of $(0.1) million on loans covered under loss-share. 

During the year ended December 31, 2013, the Company recorded a provision for loan losses of $12.2 million, a decrease of 46.4% from $22.7 million recorded for the year ended December 31, 2012.  Of the $12.2 million in provision expense, $11.6 million related to non-covered loans.  For the year ended December 31, 2013, the Company recorded a gross provision of $0.6 million on loans covered under loss-share. 

The allowance for loan losses was $32.9 million at December 31, 2013, a decrease of 18.4% from $40.3 million at December 31, 2012.  Loan loss reserves to total portfolio loans were 1.44% and 1.98% at December 31, 2013 and December 31, 2012, respectively.  The allowance for loan loss allocated to loans not recorded at fair value was 1.51% and 1.72% at December 31, 2013 and December 31, 2012, respectively.  The components of the allowance for loan loss as of December 31, 2013 were as follows:

 

Allowance for Loan Loss Summary

(dollars in thousands; unaudited)

At December 31, 2013

Allowance

Allowance

for

for 

Net

Loan Losses

Loans

Loan Losses

Loans

%

Loans covered under loss-share agreements, at fair value

$     170,528

$       (5,925)

$    164,603

3.47%

Loans not covered under loss-share agreements, at fair value

334,524

(153)

334,371

0.05%

Loans not recorded at fair value (1)

1,771,465

(26,797)

1,744,668

1.51%

Total portfolio loans

$  2,276,517

$     (32,875)

$ 2,243,642

1.44%

(1) Includes $17,133 of loans covered by loss-share agreements not recorded at fair value at December 31, 2013.

Nonperforming assets, which consist of nonaccrual loans, loans 90 days or more past due and OREO, were 2.74% of total assets at December 31, 2013, compared to 3.93% at December 31, 2012.  Nonperforming assets not covered by loss-share were 1.52% of total assets not covered by loss-share as of December 31, 2013, compared to 1.82% at December 31, 2012.  The covered assets are covered by FDIC loss-share agreements that provide 80% protection on those assets and are being carried at estimated fair value.

 

Asset Quality Information

(dollars in thousands;  unaudited)

December 31,

2013

September 30,

2013

June 30, 2013

March 31,

2013

December 31,

2012

Nonaccrual loans not covered by loss-share

$           17,114

$       21,262

$       22,276

$     27,212

$         22,442

Nonaccrual loans covered by loss-share 

23,745

29,892

44,317

52,274

46,981

OREO not covered by loss-share

28,833

29,271

29,143

31,177

28,811

OREO covered by loss-share 

18,773

18,401

17,668

20,709

23,102

90 days past due not covered by loss-share

-

83

823

-

-

90 days past due covered by loss-share

-

1

-

-

-

Total nonperforming assets

$           88,465

$       98,910

$     114,227

$   131,372

$       121,336

  Nonperforming assets not covered by loss-share

$           45,947

$       50,616

$       52,242

$     58,389

$         51,253

Total assets

$      3,229,576

$  2,968,709

$  2,929,636

$2,929,191

$    3,083,788

Total assets less covered assets

3,023,142

2,748,509

2,692,686

2,670,691

2,811,756

Total portfolio loans

2,276,517

2,100,042

2,048,941

2,031,149

2,035,258

Total accruing loans

2,235,658

2,048,888

1,982,348

1,951,663

1,965,835

Total portfolio loans less fair value loans

1,771,465

1,696,484

1,586,326

1,536,944

1,458,654

Total portfolio loans less covered loans

2,088,856

1,898,243

1,829,659

1,793,358

1,786,328

Total allowance for loan losses

32,875

32,358

32,859

38,148

40,292

Allowance for loans not covered by loss-share

26,797

24,721

24,218

24,966

25,028

Allowance for loans covered by loss-share

5,925

7,403

8,641

13,182

15,264

Allowance for acquired loans not covered by loss-share

153

234

-

-

-

Ratio of nonperforming assets to total assets

2.74%

3.33%

3.90%

4.48%

3.93%

  Not covered by loss-share 

1.52%

1.84%

1.94%

2.19%

1.82%

Ratio of nonperforming loans to total portfolio loans

1.79%

2.44%

3.29%

3.91%

3.41%

  Not covered by loss-share 

0.82%

1.12%

1.26%

1.52%

1.26%

Ratio of allowance for loan losses to total portfolio loans

1.44%

1.54%

1.60%

1.88%

1.98%

Ratio of allowance not covered by loss-share   to portfolio loans not recorded at fair value

1.51%

1.46%

1.53%

1.62%

1.72%

Net charge-offs, QTD

$                380

$         4,788

$         7,351

$       8,172

$           6,269

Net charge-offs, non-covered portion, QTD (1)

482

2,876

3,949

4,604

3,792

  Ratio of net charge-offs, non-covered portion, 

    QTD to average portfolio loans, annualized (1)

0.08%

0.55%

0.78%

0.92%

0.78%

Loans restructured/modified not included in above,

  (not 90 days past due or on nonaccrual)

$           16,770

$       13,802

$       12,639

$     10,896

$         35,889

(1) Non-covered portion represents the Company's non-covered charge-offs and the 20% portion of the charge-offs relating to loans  covered under loss-share agreements.

 

Nonaccrual loans not covered by loss-share agreements totaled $17.1 million at December 31, 2013, a decrease of 23.7% from $22.4 million at December 31, 2012.  Excluding loans covered by loss-share agreements, nonperforming loans as a percentage of total loans was 0.82% as of December 31, 2013, as compared to 1.26% as of December 31, 2012.  Nonaccrual loans covered by loss-share agreements totaled $23.7 million as of December 31, 2013, a decrease of 49.5% from $47.0 million at December 31, 2012.  The decrease is due to the Company's sustained efforts in resolving acquired nonperforming loans.   

Troubled debt restructurings ("TDRs") were $18.8 million as of December 31, 2013, of which $2.9 million was covered under loss-share.  Of the $18.8 million of TDRs, $16.8 million are performing under the terms of the restructured agreements, as compared to $44.9 million of TDRs as of December 31, 2012, of which $35.9 million were performing under the terms of the restructured agreements.  The decrease in performing TDRs from December 31, 2012 was primarily due to a significant amount of restructurings that are no longer required to be reported as TDRs due to contractual performance over a passage of time.  The increase in TDRs from September 30, 2013 to December 31, 2013 was due to one large TDR that was previously in nonaccrual status returning to accrual status during the fourth quarter.

OREO at December 31, 2013 totaled $47.6 million, which is a decrease of 8.3% from $51.9 million at December 31, 2012.  At December 31, 2013, the carrying value of OREO covered by loss-share agreements was $18.8 million, a decrease of 18.7% from $23.1 million at December 31, 2012.  OREO not covered by loss-share agreements totaled $28.8 million at December 31, 2013, unchanged from December 31, 2012.  The Company has sold $7.7 million and $32.8 million of OREO properties during the quarter and year ended December 31, 2013, respectively, which was offset by $4.5 million and $31.3 million of additions to OREO.  These additions include $4.2 million of OREO acquired from Randolph.  For the quarter and year ended December 31, 2013, the Company recorded valuation adjustments of $0.7 million and $4.2 million, respectively, a decrease from valuation adjustments of $2.7 million and $7.1 million for the quarter and year ended December 31, 2012, respectively. 

Capital Position

At December 31, 2013, shareholders' equity was $271.3 million, a decrease of 3.9% from shareholders' equity of $282.2 million as of December 31, 2012.  In April 2013, the Company closed on a $30.0 million term loan and used the proceeds to redeem the $31.3 million of Series A preferred stock.  As a result of this redemption, the Company recorded $356,000 of additional discount accretion during the second quarter of 2013.  After this redemption and the conversion of 1,804,566 shares of Series B preferred stock to non-voting common stock in February 2013, the Company no longer has any preferred stock issued or outstanding.  As part of the Randolph acquisition the Company issued 726,634 shares of common stock.

All of the Bank's and Company's capital ratios are estimated to exceed the minimum thresholds established for a well-capitalized bank by regulatory measures. 

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 $3.23 billion in assets.  Bank of North Carolina provides a complete line of banking and financial services to individuals and businesses through its 39 banking offices in North and South Carolina.  The Bank's eight 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's 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 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. See the attached tabular disclosures for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.

"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 Bancorp and the Bank.  These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of BNC Bancorp, 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) the economic recovery may face challenges causing its momentum to falter or a further recession; (ii) expected cost savings and other benefits anticipated in connection with our acquisitions may not be fully realized or realized within the expected time frame; (iii) our ability to integrate acquisitions and retain existing customers and attract new ones; and (iv) adverse changes in credit quality trends.  Additional factors affecting BNC Bancorp and the Bank are discussed in BNC Bancorp'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 Bancorp does not undertake a duty to update any forward-looking statements made in this press release. 

 

PERFORMANCE SUMMARY

BNC BANCORP

(Dollars in thousands, except per share data, shares in thousands)

(Unaudited)

For the

Three Months Ended

December 31, 2013

December 31, 2012

% Change

SUMMARY INCOME STATEMENTS

Interest income

$           37,836

$             32,224

17.4 %

Interest expense

7,964

8,119

(1.9)

Net interest income

29,872

24,105

23.9

Provision for loan losses

2,435

5,520

(55.9)

Net interest income after provision for loan losses

27,437

18,585

47.6

Non-interest income

5,178

10,394

(50.2)

Non-interest expense

28,628

24,871

15.1

Income before income tax expense (benefit)

3,987

4,108

(3.0)

Income tax expense (benefit)

716

(940)

(176.2)

Net income

3,271

5,048

(35.2)

Preferred stock dividends and discount accretion

-

601

(100.0)

Net income available to common shareholders

$             3,271

$               4,447

(26.4)

PER SHARE DATA

Earnings per share, basic

$               0.12

$                 0.19

Earnings per share, diluted

0.12

0.19

Operating earnings per share, diluted (1)

0.21

(0.00)

Tangible common book value per share (1)

8.66

8.20

Weighted average participating common shares:

Basic

27,293

24,272

Diluted

27,382

24,277

Period-end number of shares:

Common

27,303

24,650

Convertible preferred

-

1,805

PERFORMANCE RATIOS

Return on average assets

0.41%

0.63%

Operating return on average assets (1)

0.71%

-0.01%

Return on average common equity

4.79%

8.16%

Return on average tangible common equity (1)

5.90%

9.76%

Operating return on average tangible common equity (1)

9.98%

0.13%

Net interest margin (FTE)

4.39%

4.09%

Net interest margin w/o hedging expense (FTE)

4.76%

4.43%

Average equity to average assets

8.48%

9.43%

Allowance for loan losses as a % of portfolio loans

1.44%

1.98%

     Allowance not covered by loss-share to portfolio loans not recorded at fair value

1.51%

1.72%

Nonperforming assets to total assets, end of period

2.74%

3.93%

     Not covered by loss share

1.52%

1.82%

Ratio of net charge-offs, with covered portion, to

     average total loans, annualized

0.08%

0.78%

SELECTED FINANCIAL DATA

Gain on sale of investment securities, net

$                   10

$                  651

Bargain purchase gain on acquisition

-

4,972

Fair value accretion

4,208

3,086

Hedging instrument expense 

2,700

2,133

OREO valuation adjustments

713

2,734

Transaction-related expenses

3,884

1,406

(1)  See Reconciliation of Non-GAAP Financial Measures table for additional details.

 

PERFORMANCE SUMMARY

BNC BANCORP

(Dollars in thousands, except per share data, shares in thousands)

(Unaudited)

For the Year Ended

December 31, 2013

December 31, 2012

% Change

SUMMARY INCOME STATEMENTS

Interest income

$        138,670

$          113,515

22.2 %

Interest expense

30,063

32,891

(8.6)

Net interest income

108,607

80,624

34.7

Provision for loan losses

12,188

22,737

(46.4)

Net interest income after provision for loan losses

96,419

57,887

66.6

Non-interest income

22,806

33,138

(31.2)

Non-interest expense

97,933

82,272

19.0

Income before income tax expense (benefit)

21,292

8,753

143.3

Income tax expense (benefit)

4,045

(1,700)

(337.9)

Net income

17,247

10,453

65.0

Preferred stock dividends and discount accretion

1,060

2,404

(55.9)

Net income available to common shareholders

$           16,187

$               8,049

101.1

PER SHARE DATA

Earnings per share, basic

$               0.61

$                 0.48

Earnings per share, diluted

0.61

0.48

Operating earnings per share, diluted (1)

0.71

(0.19)

Tangible common book value per share (1)

8.66

8.20

Weighted average participating common shares:

Basic

26,683

17,595

Diluted

26,714

17,599

Period-end number of shares:

Common

27,303

24,650

Convertible preferred

-

1,805

PERFORMANCE RATIOS

Return on average assets

0.54%

0.32%

Operating return on average assets (1)

0.63%

-0.13%

Return on average common equity

6.28%

5.11%

Return on average tangible common equity (1)

7.50%

6.57%

Operating return on average tangible common equity (1)

8.79%

-2.28%

Net interest margin (FTE)

4.29%

3.85%

Net interest margin w/o hedging expense (FTE)

4.66%

4.21%

Average equity to average assets

8.94%

8.37%

Allowance for loan losses as a % of portfolio loans

1.44%

1.98%

     Allowance not covered by loss-share to portfolio loans not recorded at fair value

1.51%

1.72%

Nonperforming assets to total assets, end of period

2.74%

3.93%

     Nonperforming assets not covered by loss share

1.52%

1.82%

Ratio of net charge-offs, with covered portion, to

     average total loans

0.57%

1.09%

SELECTED FINANCIAL DATA

Gain (loss) on sale of investment securities, net

$                 (42)

$               3,026

Acquisition-related gain

719

-

Bargain purchase gain on acquisitions

-

12,706

Fair value accretion

14,418

6,654

Additional accretion from redemption of Series A preferred stock

356

-

Hedging instrument expense

9,863

7,940

OREO valuation adjustments

4,175

7,078

Transaction-related expenses

5,768

5,212

(1)  See Reconciliation of Non-GAAP Financial Measures table for additional details.

 

PERFORMANCE SUMMARY

BNC BANCORP

(Dollars in thousands, except per share data, shares in thousands)

(Unaudited)

For the

Three Months Ended

December 31, 2013

September 30, 2013

June 30, 2013

March 31, 2013

December 31, 2012

SUMMARY INCOME STATEMENTS

Interest income

$           37,836

$             34,008

$             33,675

$             33,151

$             32,224

Interest expense

7,964

7,372

7,364

7,363

8,119

Net interest income

29,872

26,636

26,311

25,788

24,105

Provision for loan losses

2,435

3,350

2,288

4,115

5,520

Net interest income after provision for loan losses

27,437

23,286

24,023

21,673

18,585

Non-interest income

5,178

5,824

5,602

6,202

10,394

Non-interest expense

28,628

22,430

23,759

23,116

24,871

Income before income tax expense (benefit)

3,987

6,680

5,866

4,759

4,108

Income tax expense (benefit)

716

1,650

1,199

480

(940)

Net income

3,271

5,030

4,667

4,279

5,048

Preferred stock dividends and discount accretion

-

-

531

529

601

Net income available to common shareholders

$             3,271

$               5,030

$               4,136

$               3,750

$               4,447

Net interest income, as reported

$           29,872

$             26,636

$             26,311

$             25,788

$             24,105

     Fully Taxable-Equivalent ("FTE") adjustment 

1,956

1,818

1,718

1,673

1,533

Net interest income, FTE

$           31,828

$             28,454

$             28,029

$             27,461

$             25,638

PER SHARE DATA

Earnings per share, basic

$               0.12

$                 0.19

$                 0.16

$                 0.14

$                 0.19

Earnings per share, diluted

0.12

0.19

0.16

0.14

0.19

Weighted average participating common shares:

Basic

27,293

26,502

26,475

26,464

24,272

Diluted

27,382

26,582

26,498

26,476

24,277

Period-end number of shares:

Common

27,303

26,526

26,479

26,472

24,650

Convertible preferred

-

-

-

-

1,805

PERFORMANCE RATIOS

Return on average assets

0.41%

0.68%

0.57%

0.51%

0.63%

Operating return on average assets (1)

0.71%

0.68%

0.58%

0.56%

-0.01%

Return on average common equity

4.79%

7.81%

6.49%

6.12%

8.16%

Return on average tangible common equity (1)

5.90%

9.19%

7.70%

7.33%

9.76%

Operating return on average tangible common equity (1)

9.98%

9.26%

7.85%

7.97%

0.13%

Net interest margin (FTE)

4.39%

4.26%

4.32%

4.20%

4.09%

Net interest margin w/o hedging expense (FTE)

4.76%

4.65%

4.68%

4.54%

4.43%

Average equity to average assets

8.48%

8.67%

9.06%

9.61%

9.43%

Allowance for loan losses as a % of portfolio loans

1.44%

1.54%

1.60%

1.88%

1.98%

     Allowance not covered by loss-share to portfolio loans not recorded at fair value

1.51%

1.46%

1.53%

1.62%

1.72%

Nonperforming assets to total assets, end of period

2.74%

3.33%

3.90%

4.48%

3.93%

     Not covered by loss share

1.52%

1.84%

1.94%

2.19%

1.82%

Ratio of net charge-offs, with covered portion, to

     average total loans, annualized

0.08%

0.55%

0.78%

0.92%

0.78%

SELECTED FINANCIAL DATA

Gain (loss) on sale of investment securities, net

$                   10

$                      -

$                  176

$                 (228)

$                  651

Acquisition-related gain

-

-

-

719

-

Bargain purchase gain on acquisitions

-

-

-

-

4,972

Fair value accretion

4,208

3,213

3,664

3,333

3,086

Additional accretion from redemption of Series A preferred stock

-

-

356

-

-

Hedging instrument expense

2,700

2,625

2,333

2,205

2,133

OREO valuation adjustments

713

1,138

1,539

785

2,734

Transaction-related expenses

3,884

540

309

1,035

1,406

(1)  See Reconciliation of Non-GAAP Financial Measures table for additional details.

 

PERFORMANCE SUMMARY

BNC BANCORP

(Dollars in thousands)

(Unaudited)

As of  

December 31, 2013

December 31,      2012

% Change

SELECTED BALANCE SHEET DATA

Portfolio loans:

Loans not covered by loss share

$     2,088,856

$       1,786,328

16.9 %

Loans covered by loss share

187,661

248,930

(24.6)

Allowance for loan losses

(32,875)

(40,292)

(18.4)

Net portfolio loans

2,243,642

1,994,966

12.5

Loans held for sale

30,899

57,414

(46.2)

Investment securities

517,795

456,344

13.5

Total interest-earning assets

2,908,847

2,747,702

5.9

Total assets

3,229,576

3,083,788

4.7

Deposits:

Non-interest bearing deposits

324,532

275,605

17.8

Interest-bearing demand and savings

1,299,399

1,221,089

6.4

Time deposits

1,082,799

1,159,615

(6.6)

Total deposits

2,706,729

2,656,309

1.9

Borrowed funds

227,102

120,555

88.4

Total interest-bearing liabilities

2,609,299

2,501,259

4.3

Shareholders' equity:

Preferred equity

-

47,878

(100.0)

Common equity

268,024

228,937

17.1

Accumulated other comprehensive income

3,305

5,429

(39.1)

Total shareholders' equity

271,330

282,244

(3.9)

 

As of  

December 31, 2013

September 30, 2013

June 30, 2013

March 31, 2013

December 31, 2012

SELECTED BALANCE SHEET DATA

Portfolio loans:

Loans not covered by loss share

$     2,088,856

$       1,898,243

$       1,829,659

$       1,793,358

$       1,786,328

Loans covered by loss share

187,661

201,799

219,282

237,791

248,930

Allowance for loan losses

(32,875)

(32,358)

(32,859)

(38,148)

(40,292)

Net portfolio loans

2,243,642

2,067,684

2,016,082

1,993,001

1,994,966

Loans held for sale

30,899

17,732

39,954

46,134

57,414

Investment securities

517,795

500,449

466,079

476,982

456,344

Total interest-earning assets

2,908,847

2,658,902

2,610,415

2,605,429

2,747,702

Total assets

3,229,576

2,968,709

2,929,636

2,929,191

3,083,788

Deposits:

Non-interest bearing deposits

324,532

299,670

275,984

267,458

275,605

Interest-bearing demand and savings

1,299,399

1,172,512

1,152,779

1,171,484

1,221,089

Time deposits

1,082,799

963,679

999,552

1,069,207

1,159,615

Total deposits

2,706,730

2,435,861

2,428,315

2,508,149

2,656,309

Borrowed funds

227,102

256,554

227,697

117,774

120,555

Total interest-bearing liabilities

2,609,299

2,392,745

2,380,028

2,358,465

2,501,259

Shareholders' equity:

Preferred equity

-

-

-

30,855

47,878

Common equity

268,024

256,048

251,872

248,747

228,937

Accumulated other comprehensive income

3,305

1,745

2,573

4,453

5,429

Total shareholders' equity

271,330

257,793

254,445

284,055

282,244

 

PERFORMANCE SUMMARY

BNC BANCORP

(Dollars in thousands)

(Unaudited)

For the Year Ended

December 31, 2013

December 31,      2012

% Change

SELECTED AVERAGE BALANCE SHEET DATA

Portfolio loans:

Loans not covered by loss share

$     1,885,872

$       1,503,120

25.5 %

Loans covered by loss share

219,093

286,005

(23.4)

Net portfolio loans

2,104,965

1,789,125

17.7

Investment securities

483,984

353,040

37.1

Total interest-earning assets

2,696,475

2,244,423

20.1

Total assets

3,009,367

2,544,718

18.3

Deposits:

Non-interest bearing deposits

290,765

188,569

54.2

Interest-bearing demand and savings

1,197,958

997,951

20.0

Time deposits

1,038,088

1,004,644

3.3

Total deposits

2,526,811

2,191,164

15.3

Borrowed funds

193,771

124,223

56.0

Total interest-bearing liabilities

2,429,817

2,126,818

14.3

Shareholders' equity

269,123

212,955

26.4

 

For the Three Month Period Ended

December 31, 2013

September 30, 2013

June 30, 2013

March 31, 2013

December 31, 2012

SELECTED AVERAGE BALANCE SHEET DATA

Loans:

Loans not covered by loss share

$     2,073,442

$       1,862,366

$       1,810,382

$       1,794,323

$       1,673,506

Loans covered by loss share

194,730

210,541

228,536

243,360

267,632

Total loans

2,268,172

2,072,907

2,038,918

2,037,683

1,941,138

Investment securities

515,296

484,959

473,301

461,781

400,482

Total interest-earning assets

2,878,999

2,650,389

2,604,275

2,650,229

2,495,019

Total assets

3,193,141

2,945,832

2,916,204

2,980,654

2,806,031

Deposits:

Non-interest bearing deposits

338,454

288,887

272,088

262,821

225,419

Interest-bearing demand and savings

1,291,291

1,172,608

1,150,213

1,176,740

1,109,651

Time deposits

1,035,759

979,871

1,021,098

1,117,159

1,059,670

Total deposits

2,665,504

2,441,366

2,443,398

2,556,720

2,394,740

Borrowed funds

235,303

228,336

189,308

120,496

126,007

Total interest-bearing liabilities

2,562,353

2,380,815

2,360,618

2,414,395

2,295,328

Shareholders' equity

270,702

255,524

264,201

286,388

264,643

 

LOAN MIX AND STRATIFICATION STATISTICS

BNC BANCORP

(Dollars in millions)

(Unaudited)

 As of 

December 31, 2013

December 31, 2012

% Change

Loans Not Covered Under Loss Share Agreements:

Construction, A&D, and Land

$             261.3

$               196.5

33.0

Residential Construction

32.5

27.3

19.1

Presold

18.2

15.8

15.2

Speculative

14.3

11.5

24.4

  Loan size - over $400,000

1.8

3.7

(51.4)

  Loan size - $200,000 to $400,000

4.8

2.9

65.5

  Loan size - under $200,000

7.7

4.9

57.1

Commercial Construction

132.0

76.1

73.5

Loan size - $5 million and over

25.4

6.7

279.1

Loan size - $3 million to $5 million

28.9

6.7

331.3

Loan size - $1 million to $3 million

54.2

42.7

26.9

Loan size - under $1 million

23.5

20.0

17.5

Residential and Commercial A&D

7.9

18.1

(56.4)

Loan size - $3 million to $5 million

-

4.4

100.0

Loan size - $1 million to $3 million

3.5

9.1

(61.5)

Loan size - under $1 million

4.4

4.6

(4.4)

Land

88.9

75.0

18.5

Residential Buildable Lots

22.1

23.3

(5.2)

Commercial Buildable Lots

11.8

10.2

15.7

Land Held for Development

32.9

24.2

36.0

Raw and Agricultural Land

22.1

17.3

27.8

Commercial Real Estate

$          1,244.0

$               930.9

33.6

Multi-Family

61.6

47.5

29.7

Churches

53.5

42.8

25.0

Retail

911.8

674.3

35.2

Owner Occupied

263.8

196.0

34.6

Investment

648.0

478.3

35.5

  Loan size - $5 million to $9 million

138.5

101.2

36.9

  Loan size - $3 million to $5 million

113.5

79.4

43.0

  Loan size - $1 million to $3 million

250.3

186.6

34.1

  Loan size - under $1 million

145.7

111.1

31.1

Industrial

217.1

166.3

30.6

Owner Occupied

119.0

93.0

28.0

Investment

98.1

73.3

33.8

  Loan size - $5 million and over

6.0

-

100.0

  Loan size - $3 million to $5 million

11.2

4.1

173.2

  Loan size - $1 million to $3 million

40.8

37.6

8.5

  Loan size - under $1 million

40.1

31.6

26.9

 

LOAN MIX AND STRATIFICATION STATISTICS

BNC BANCORP

(Dollars in millions)

(Unaudited)

 Trends 

December 31, 2013

September 30, 2013

June 30, 2013

March 31, 2013

December 31, 2012

Loans Not Covered Under Loss Share Agreements:

Construction, A&D, and Land

$             261.3

$               225.5

$               211.3

$               232.3

$               196.5

Residential Construction

32.5

28.6

32.6

31.1

27.3

Presold

18.2

16.0

18.7

18.6

15.8

Speculative

14.3

12.6

13.9

12.5

11.5

  Loan size - over $400,000

1.8

2.2

3.3

4.3

3.7

  Loan size - $200,000 to $400,000

4.8

4.9

5.5

3.2

2.9

  Loan size - under $200,000

7.7

5.5

5.1

5.0

4.9

Commercial Construction

132.0

106.1

76.2

92.9

76.1

Loan size - $5 million and over

25.4

18.1

12.5

12.5

6.7

Loan size - $3 million to $5 million

28.9

15.4

10.7

11.0

6.7

Loan size - $1 million to $3 million

54.2

51.7

33.3

50.0

42.7

Loan size - under $1 million

23.5

20.9

19.7

19.4

20.0

Residential and Commercial A&D

7.9

9.4

17.6

15.1

18.1

Loan size - $3 million to $5 million

-

-

4.1

-

4.4

Loan size - $1 million to $3 million

3.5

3.6

6.6

8.8

9.1

Loan size - under $1 million

4.4

5.8

6.9

6.3

4.6

Land

88.9

81.4

84.9

93.2

75.0

Residential Buildable Lots

22.1

20.8

26.1

31.4

23.3

Commercial Buildable Lots

11.8

13.4

17.7

18.9

10.2

Land Held for Development

32.9

25.2

21.9

25.1

24.2

Raw and Agricultural Land

22.1

22.0

19.2

17.8

17.3

Commercial Real Estate

$          1,244.0

$            1,165.2

$            1,109.8

$            1,050.6

$               930.9

Multi-Family

61.6

58.6

59.2

48.6

47.5

Churches

53.5

50.9

51.5

49.6

42.8

Retail

911.8

851.2

804.3

757.2

674.3

Owner Occupied

263.8

243.4

236.9

237.4

196.0

Investment

648.0

607.8

567.4

519.8

478.3

  Loan size - $5 million to $9 million

138.5

135.4

95.1

89.0

101.2

  Loan size - $3 million to $5 million

113.5

98.6

90.3

82.7

79.4

  Loan size - $1 million to $3 million

250.3

238.3

242.4

215.5

186.6

  Loan size - under $1 million

145.7

135.5

139.6

132.6

111.1

Industrial

217.1

204.5

194.8

195.2

166.3

Owner Occupied

119.0

113.2

101.5

105.2

93.0

Investment

98.1

91.3

93.3

90.0

73.3

  Loan size - $5 million and over

6.0

6.1

6.0

6.2

-

  Loan size - $3 million to $5 million

11.2

8.3

11.5

4.0

4.1

  Loan size - $1 million to $3 million

40.8

38.7

35.8

41.7

37.6

  Loan size - under $1 million

40.1

38.2

40.0

38.1

31.6

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

BNC BANCORP

(Dollars in thousands, except per share data, shares in thousands)

(Unaudited)

For the Three Months Ended

Operating Earnings (Loss) per Share, Diluted (2)

December 31, 

2013

September 30, 

2013

December 31, 

2012

Net income available to common shareholders (GAAP)

$             3,271

$               5,030

$               4,447

Add:    Transaction-related charges, net of tax

2,447

340

893

Less:  Insurance settlement, net of tax

-

302

-

            Bargain purchase gain on acquisition (nontaxable)

-

-

4,972

            Gain on sale of investment securities, net of tax

6

-

413

Operating earnings (loss) (non-GAAP)

$             5,712

$               5,068

$                   (45)

Weighted average fully diluted shares outstanding

27,382

26,582

24,277

Operating earnings (loss) per share, diluted (non-GAAP)

$               0.21

$                 0.19

$                (0.00)

For the Year Ended

Operating Earnings (Loss) per Share, Diluted (2)

December 31, 

2013

December 31, 

2012

Net income available to common shareholders (GAAP)

$           16,187

$               8,049

Add:    Transaction-related charges, net of tax

3,634

3,310

Less:  Insurance settlement, net of tax

302

-

            Acquisition-related gain, net of tax

453

-

            Bargain purchase gain on acquisitions (nontaxable)

-

12,706

            Gain (loss) on sale of investment securities, net of tax

(26)

1,922

Operating earnings (loss) (non-GAAP)

$           19,092

$             (3,269)

Weighted average fully diluted shares outstanding

26,714

17,599

Operating earnings (loss) per share, diluted (non-GAAP)

$               0.71

$                (0.19)

For the Three Months Ended

Adjusted Non-interest Income (2)

December 31, 

2013

September 30, 

2013

December 31, 

2012

Non-interest income (GAAP)

$             5,178

$               5,824

$             10,394

Less:  Insurance settlement

-

479

-

            Bargain purchase gain on acquisitions

-

-

4,972

            Gain on sale of investment securities

10

-

651

Adjusted non-interest income (non-GAAP)

$             5,168

$               5,345

$               4,771

For the Year Ended

Adjusted Non-interest Income (2)

December 31, 

2013

December 31, 

2012

Non-interest income (GAAP)

$           22,806

$             33,138

Less:  Insurance settlement

479

-

            Acquisition-related gain

719

-

            Bargain purchase gain on acquisitions

-

12,706

            Gain (loss) on sale of investment securities

(42)

3,026

Adjusted non-interest income (non-GAAP)

$           21,650

$             17,406

For the Three Months Ended

Adjusted Non-interest Expense (2)

December 31, 

2013

September 30, 

2013

December 31,  

2012

Non-interest expense (GAAP)

$           28,628

$             22,430

$             24,871

Less:  Transaction-related expenses

3,884

540

1,406

Adjusted non-interest expense (non-GAAP)

$           24,744

$             21,890

$             23,465

For the Year Ended

Adjusted Non-interest Expense (2)

December 31, 

2013

December 31, 

2012

Non-interest expense (GAAP)

$           97,933

$             82,272

Less:  Transaction-related expenses

5,768

5,212

Adjusted non-interest expense (non-GAAP)

$           92,165

$             77,060

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

BNC BANCORP

(Dollars in thousands, except per share data, shares in thousands)

(Unaudited)

Tangible Common Book Value per Share (3)

December 31, 

2013

December 31, 

2012

Shareholders' equity (GAAP)

$        271,330

$          282,244

Less: Preferred stock

-

47,878

           Intangible assets

34,966

32,193

Tangible common shareholders equity (non-GAAP)

$        236,363

$          202,173

Common shares outstanding

27,303

24,651

Tangible common book value per share (non-GAAP)

$               8.66

$                 8.20

For the Three Months Ended

Return on Average Tangible Common Equity (3)

December 31, 2013

September 30, 2013

June 30, 2013

March 31, 2013

December 31, 2012

Net income available to common shareholders (GAAP)

$             3,271

$               5,030

$               4,136

$               3,750

$               4,447

Plus: Amortization of intangibles, net of tax

241

160

160

160

105

Tangible net income available to common shareholders (non-GAAP)

$             3,512

$               5,190

$               4,296

$               3,910

$               4,552

Average common shareholders equity

$        270,702

$          255,524

$          255,624

$          248,548

$          216,825

Less: Average intangible assets

34,045

31,535

31,798

32,068

31,235

Average tangible common shareholders' equity (non-GAAP)

$        236,657

$          223,988

$          223,826

$          216,480

$          185,590

Return on average tangible common equity (non-GAAP)

5.89%

9.19%

7.70%

7.33%

9.76%

For the Year Ended

Return on Average Tangible Common Equity (3)

December 31, 2013

December 31, 2012

Net income available to common shareholders (GAAP)

$           16,187

$               8,049

Plus: Amortization of intangibles, net of tax

723

348

Tangible net income available to common shareholders (non-GAAP)

$           16,910

$               8,397

Average common shareholders equity

$        257,678

$          157,471

Less: Average intangible assets

32,361

29,581

Average tangible common shareholders' equity (non-GAAP)

$        225,317

$          127,890

Return on average tangible common equity (non-GAAP)

7.50%

6.57%

(2)  Management uses these measures in their analysis of the Company's performance and believes these 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.

(3)  Management believes investors use this measure to evaluate the Company's performance.

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

BNC BANCORP

(Dollars in thousands, except per share data, shares in thousands)

(Unaudited)

For the Three Months Ended

Operating Return on Average Assets (2)

December 31, 2013

September 30, 2013

June 30, 2013

March 31, 2013

December 31, 2012

Net income available to common shareholders (GAAP)

$             3,271

$               5,030

$               4,136

$               3,750

$               4,447

Plus:   Transaction-related expenses, net of tax

2,447

340

195

652

893

Less:  Insurance settlement, net of tax

-

302

-

-

-

            Acquisition-related gain, net of tax

-

-

-

453

-

            Bargain purchase gain on acquisition (nontaxable)

-

4,972

            Gain (loss) on sale of investment securities, net of tax

6

-

111

(144)

413

Operating earnings (loss) (non-GAAP)

$             5,712

$               5,068

$               4,220

$               4,093

$                   (45)

Average assets

$     3,193,141

$       2,945,832

$       2,916,204

$       2,980,654

$       2,806,031

Operating return on average assets (non-GAAP)

0.71%

0.68%

0.58%

0.56%

-0.01%

For the Year Ended

Operating Return on Average Assets (2)

December 31, 2013

December 31, 2012

Net income available to common shareholders (GAAP)

$           16,187

$               8,049

Plus:  Transaction-related expenses, net of tax

3,634

3,310

Less:  Insurance settlement, net of tax

302

-

            Acquisition-related gain, net of tax

453

-

            Bargain purchase gain on acquisitions (nontaxable)

-

12,706

            Gain (loss) on sale of investment securities, net of tax

(26)

1,922

Operating earnings (loss) (non-GAAP)

$           19,092

$             (3,269)

Average assets

$     3,009,367

$       2,544,718

Operating return on average assets (non-GAAP)

0.63%

-0.13%

For the Three Months Ended

Operating Return on Average Tangible Common Equity (2)

December 31, 2013

September 30, 2013

June 30, 2013

March 31, 2013

December 31, 2012

Net income available to common shareholders (GAAP)

$             3,271

$               5,030

$               4,136

$               3,750

$               4,447

Plus:   Amortization of intangibles, net of tax

241

160

160

160

105

            Transaction-related expenses, net of tax

2,447

340

195

652

893

Less:  Insurance settlement, net of tax

-

302

-

-

-

            Acquisition-related gain, net of tax

-

-

-

453

-

            Bargain purchase gain on acquisition (nontaxable)

-

-

-

-

4,972

            Gain (loss) on sale of investment securities, net of tax

6

-

111

(144)

413

Operating tangible net income available to common shareholders (non-GAAP)

$             5,953

$               5,229

$               4,380

$               4,253

$                     59

Average common shareholders equity

$        270,702

$          255,524

$          255,624

$          248,548

$          216,825

Less: Average intangible assets

34,045

31,535

31,798

32,068

31,235

Average tangible common shareholders' equity (non-GAAP)

$        236,657

$          223,989

$          223,826

$          216,480

$          185,590

Operating return on average tangible common equity (non-GAAP)

9.98%

9.26%

7.85%

7.97%

0.13%

For the Year Ended

Operating Return on Average Tangible Common Equity (2)

December 31, 2013

December 31, 2012

Net income available to common shareholders (GAAP)

$           16,187

$               8,049

Plus:   Amortization of intangibles, net of tax

723

348

            Transaction-related expenses, net of tax

3,634

3,310

Less:  Insurance settlement, net of tax

302

-

            Acquisition-related gain, net of tax

453

-

            Bargain purchase gain on acquisitions (nontaxable)

-

12,706

            Gain (loss) on sale of investment securities, net of tax

(26)

1,922

Operating tangible net income (loss) available to common shareholders (non-GAAP)

$           19,815

$             (2,920)

Average common shareholders equity

$        257,678

$          157,471

Less: Average intangible assets

32,361

29,581

Average tangible common shareholders' equity (non-GAAP)

$        225,317

$          127,890

Operating return on average tangible common equity (non-GAAP)

8.79%

-2.28%

(2)  Management uses these measures in their analysis of the Company's performance and believes these 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.

 

SOURCE BNC Bancorp



RELATED LINKS

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