North State Bancorp Reports 2nd Quarter Earnings

Company reports solid earnings for quarter

News provided by

North State Bancorp

Jul 18, 2012, 03:39 ET

RALEIGH, N.C., July 18, 2012 /PRNewswire/ -- North State Bancorp (OTCBB: NSBC the "Company"), the holding company for North State Bank, reported net income for the quarter ended June 30, 2012, of $583,000, which is $472,000 more than the $111,000 earned for the same period ended June 30, 2011.  Higher non-interest income of $1.9 million, an increase of $1.1 million, excluding securities gains, over the same period in 2011, resulting from expanded mortgage banking activities accounted for the increase while net interest income was steady from the prior period.  These higher fees were partially offset by higher personnel expenses of $2.8 million, an increase of $507,000 over the same period ended June 30, 2011.  Diluted earnings per share were $0.08 for the quarter ended June 30, 2012, compared to $0.01 for 2011.  For the six month period ended June 30, 2012, net income was $819,000, an increase of $505,000 from net income of $314,000 reported for the six month period ended June 30, 2011. 

Total assets for the Company as of June 30, 2012, were $677.5 million compared to $638.3 million as of June 30, 2011, an increase of $39.2 million.  Total deposits and total loans as of June 30, 2012, were $607.8 million and $482.8 million, respectively, compared to total deposits and total loans at June 30, 2011, of $566.9 million and $482.7 million, respectively. 

North State Bank remains well capitalized with capital ratios well in excess of regulatory minimums to be considered well capitalized.   

"While we continue to have challenges as a business and an industry, I am very proud to report these results.  They are the result of our strategic thinking which laid the groundwork for improving financial results.  We have continued to grow core deposits which have increased $37.8 million so far this year.  These deposits are heavily weighted in non-interest bearing accounts and when combined with stable loan outstandings have allowed us to maintain our net interest income and net interest margin. We are not out of these challenging times but we are seeing improvement in earnings and asset quality." Larry D. Barbour, president and CEO shared in remarks on the Company's financial results. 

Mr. Barbour continued, "We remain a well-capitalized bank with strong liquidity funded by a loyal base of core deposits and we remain confident about our future as troubled loans and loan loss reserves decrease."

Founded in 2000, North State Bank is a full-service community bank, serving Wake and New Hanover Counties through seven full-service offices.

North State Bancorp is listed on the OTC electronic bulletin board under the symbol "NSBC."
www.northstatebank.com

This news release contains forward-looking statements. The actual results might differ materially from those projected in the forward-looking statements for various reasons, including changes in real estate values and the real estate market, economic conditions, regulatory changes, changes in interest rates, substantial changes in financial markets, our ability to manage growth, and loss of deposits and loan demand to other savings and financial institutions. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the Company's SEC filings, including its periodic reports under the Securities Exchange Act of 1934, as amended, copies of which are available upon request from the Company.  

 North State Bancorp 








Selected Financial Information and Other Data (Unaudited)










As of or for the Three Months Ended

As of or for the Six Months Ended


June 30,

June 30,


2012

2011

2012

2011


 (Dollars in thousands, except per share) 

Earnings Summary:








     Total interest income

$           6,594

$           6,734

$         13,044

$         13,814

     Total interest expense

1,069

1,349

2,180

2,831

          Net interest income

5,525

5,385

10,864

10,983

     Provision for loan losses

1,363

1,418

2,894

2,433

          Net interest income after provision for loan losses

4,162

3,967

7,970

8,550

     Noninterest income

1,910

1,165

3,327

1,908

     Noninterest expense

5,192

4,950

10,112

9,952

          Income before income taxes

880

182

1,185

506

     Income taxes

297

71

366

192

          Net income

$              583

$              111

$              819

$              314










Share and Per Share Data:








     Earnings per share - basic

$             0.08

$             0.01

$             0.11

$             0.04

     Earnings per share - diluted

$             0.08

$             0.01

$             0.11

$             0.04

     Tangible book value per share 

$             5.32

$             5.11

$             5.32

$             5.11

     Weighted average shares outstanding:







         Basic

7,427,976

7,427,976

7,427,976

7,427,976

         Diluted

7,427,976

7,431,682

7,427,976

7,432,884










Financial Condition Period End:








     Cash, federal funds sold and due from banks

$         49,040

$         71,150

$         49,040

$         71,150

     Investment securities

21,021

17,261

21,021

17,261

     Loans - held for sale

88,188

47,182

88,188

47,182

     Loans

482,825

482,721

482,825

482,721

     Less allowance for loan losses

8,355

9,944

8,355

9,944

     Other assets

44,829

29,967

44,829

29,967

         Total assets

$       677,548

$       638,337

$       677,548

$       638,337










     Deposits

$       607,809

$       566,874

$       607,809

$       566,874

     Other borrowings

27,235

30,719

27,235

30,719

     Other liabilities

2,877

2,612

2,877

2,612

     Shareholders' equity

39,627

38,132

39,627

38,132

          Total liabilities and shareholders' equity

$       677,548

$       638,337

$       677,548

$       638,337










Financial Condition Average Balances:








     Cash, federal funds sold and due from banks

$         81,071

$         82,137

$         79,629

$         83,628

     Investment securities

14,863

31,024

10,902

23,431

     Loans - held for sale

61,969

25,706

55,153

27,182

     Loans

478,647

476,060

484,162

485,363

     Less allowance for loan losses

9,435

9,421

9,757

9,560

     Other assets

43,417

30,812

40,927

31,093

          Total assets

$       670,532

$       636,318

$       661,016

$       641,137










     Deposits

$       601,290

$       564,146

$       592,074

$       569,160

     Other borrowings

27,249

31,755

27,345

31,730

     Other liabilities

1,967

2,333

2,082

2,227

     Shareholders' equity

40,026

38,084

39,515

38,020

         Total liabilities and shareholders' equity

$       670,532

$       636,318

$       661,016

$       641,137










Performance Ratios:








     Return on average assets

0.35%

0.07%

0.25%

0.10%

     Return on average equity

5.86%

1.17%

4.17%

1.67%

     Net interest margin (1)

3.61%

3.70%

3.61%

3.74%

     Efficiency ratio

69.83%

75.57%

71.26%

77.20%










Asset Quality Ratios:








     Net loan charge-offs to average loans

0.45%

0.17%

0.92%

0.50%

     Nonaccrual loans to period-end loans

3.52%

5.54%

3.52%

5.54%

     Nonperforming assets to total assets

3.70%

4.68%

3.70%

4.68%

     Ratio of allowance for loan losses to nonaccrual loans 

0.49

 x 

0.37

 x 

0.49

 x 

0.37

 x 

     Allowance for loan losses to period-end loans

1.73%

2.06%

1.73%

2.06%










Other Data:








     Average equity to average assets

5.97%

5.99%

5.98%

5.93%

     Total shareholders' equity to assets 

5.85%

5.97%

5.85%

5.97%

     Number of offices:







          Full service banking offices

7

7

7

7

     Number of employees (FTEs)

122

112

122

112










Core Earnings (2): 








     GAAP stated earnings

$              583

$              111

$              819

$              314

     Less net gains on sale of investment securities 

-

329

106

329

     Provision for loan losses

1,363

1,418

2,894

2,433

     Forecosed asset expense net of rental income

100

561

242

1,052

     Taxes

297

71

366

192

          Non-GAAP core earnings before tax

$           2,343

$           1,832

$           4,215

$           3,662

(1) Excludes nonaccrual loans

(2) We define core earnings as operating income before securities gains (losses); loan loss reserves; foreclosed asset valuation write-downs and expense net of rental income; and taxes.  Core earnings is considered a non-GAAP financial measure.  Core earnings do not represent, and should not be considered as, an alternative to net income, as determined in accordance with GAAP.  Our definition of core earnings might not be comparable to similarly titled measures by other companies.  We believe that the presentation of core earnings is useful to investors because it provides important information of our operating performance exclusive of non-recurring expenses of loan loss reserves and foreclosed asset expense and write-downs as well as taxes.


SOURCE North State Bancorp