Select Bancorp Reports Second Quarter 2015 Earnings

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Jul 30, 2015, 05:26 ET

DUNN, N.C., July 30, 2015 /PRNewswire/ -- Select Bancorp, Inc. (the "Company"NASDAQ: SLCT), the holding company for Select Bank & Trust, today reported net income of $1.8 million for the quarter ended June 30, 2015, and basic and diluted earnings per share of $0.16, compared to net income of $613,000 and basic and diluted earnings per share of $0.09 for the second quarter of 2014. The third quarter 2014 merger of New Century Bancorp, Inc., and legacy Select Bancorp, Inc., impacts comparisons of the second quarter of 2014 to the second quarter of 2015.

Total assets, deposits, and total loans for the Company as of June 30, 2015, were $742.4 million, $579.6 million, and $573.7 million, respectively, compared to total assets of $508.3 million, total deposits of $428.7 million, and total loans of $333.9 million as of the same date in 2014.

Commenting on second quarter 2015 results, William L. Hedgepeth II, President and CEO stated, "We are pleased to report another record quarter, our third consecutive quarter of net income growth since our merger. This has been a tremendous achievement for Select. During this quarter we have worked to reposition our branch structure by strategically consolidating our Burlington and Gibsonville markets and will combine our offices in the Fayetteville market. We believe these enhanced initiatives, to be completed in the third quarter, will result in notable expense reductions and increased efficiencies. Additionally, we have announced the acquisition of two branches, one in Morehead City and the other in Leland, in the Wilmington area, which we expect will be a fourth quarter event."

"Loan growth has been strong while asset quality continues to remain high which is a top priority at Select," Mr. Hedgepeth said. "Our continued focus on profit and growth are a top priority in our strategic plan. We are expanding our markets utilizing the combined resources of our July 25, 2014 merger with legacy Select Bank and our performance results to-date are improving. We are very pleased with these developments and believe the changes add value to our community bank franchise."

Non-performing loans decreased to $11.7 million at June 30, 2015 from $11.9 million at December 31, 2014. Non-performing loans equaled 2.04% of loans at June 30, 2015, decreasing from 2.15% of loans at December 31, 2014. Other real estate and repossessed assets equaled $1.6 million at December 31, 2014 and decreased to $1.0 million at June 30, 2015. For the quarter, recoveries were $16,000 or -0.01% of average loans, compared to a recovery of $139,000 or -0.10% of average loans in the fourth quarter of 2014. At June 30, 2015, the allowance for loan losses was $6.8 million, or 1.19% of total loans, slightly down from $6.8 million or 1.24% of total loans at December 31, 2014.

Mr. Hedgepeth concluded, "We are pleased with our performance this quarter and the $1.8 million in earnings. This was an active quarter for us. By expanding our franchise and continuing loan growth in our markets, we look forward to the positive contributions that we expect our repositioned financial centers will add. We believe we are well-positioned for the remainder of 2015."

Select Bank & Trust has branch offices in these North Carolina communities: Dunn, Burlington, Clinton, Elizabeth City, Fayetteville, Gibsonville, Goldsboro, Greenville, Lillington, Lumberton, Raleigh and Washington.

The information as of and for the quarter ended June 30, 2015, as presented is unaudited. This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of our goals and expectations with respect to earnings, earnings per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (ii) statements preceded by, followed by or that include the words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan," "projects," "outlook" or similar expressions. The actual results might differ materially from those projected in the forward-looking statements for various reasons, including, but not limited to, our ability to manage growth, substantial changes in financial markets, regulatory changes, changes in interest rates, loss of deposits and loan demand to other savings and financial institutions, and changes in real estate values and the real estate market. 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.

Select Bancorp, Inc.

Selected Financial Information and Other Data

($ in thousands, except per share data)

	At or for the three months ended										At or for the twelve months ended

	June 30, 2015		March 31, 2015		December 31, 2014		September 30, 2014		June 30, 2014		December 31, 2014		December 31, 2013		December 31, 2012
Summary of Operations:
Total interest income	$	8,262	$	8,242	$	7,988	$	7,541	$	5,261	$	26,104	$	22,903	$	25,132
Total interest expense		835		939		1,141		1,169		1,098		4,519		5,258		6,632
Net interest income		7,427		7,303		6,847		6,372		4,163		21,585		17,645		18,500
Provision for (recovery of) loan losses		(139)		130		177		105		(427)		(194)		(325)		(2,597)
Net interest income after provision		7,566		7,173		6,670		6,267		4,590		21,779		17,970		21,097
Noninterest income		941		863		836		650		565		2,675		2,629		3,598
Merger/Acquisition related expenses		35		-		217		1,325		237		1,941		-		-
Noninterest expense		5,518		5,370		5,345		5,168		3,917		18,719		15,855		17,236
Income before income taxes		2,954		2,666		1,944		424		1,001		3,794		4,744		7,459
Provision for income taxes		1,133		923		666		230		388		1,437		1,803		2,822
Net Income		1,821		1,743		1,278		194		613		2,357		2,941		4,637
Dividends on Preferred Stock		19		19		19		19		-		38		-		-
Net income available to common shareholders	$	1,802	$	1,724	$	1,259	$	175	$	613	$	2,319	$	2,941	$	4,637

Share and Per Share Data:
Earnings per share - basic	$	0.16	$	0.15	$	0.11	$	0.02	$	0.09	$	0.26	$	0.43	$	0.67
Earnings per share - diluted	$	0.16	$	0.15	$	0.11	$	0.02	$	0.09	$	0.26	$	0.43	$	0.67
Book value per share	$	8.17	$	8.07	$	7.91	$	7.61	$	8.30	$	8.59	$	8.09	$	7.84
Tangible book value per share	$	7.45	$	7.33	$	7.16	$	7.01	$	8.29	$	7.83	$	8.07	$	7.79
Ending shares outstanding		11,499,398		11,458,561		11,377,980		11,349,368		6,931,168		11,377,980		6,921,352		6,913,636
Weighted average shares outstanding:
Basic		11,481,137		11,426,378		11,375,803		10,195,846		6,923,640		8,870,114		6,918,814		6,898,147
Diluted		11,548,878		11,510,147		11,475,865		10,312,085		6,928,428		8,974,384		6,919,760		6,898,377

Selected Performance Ratios:
Return on average assets⁽²⁾		0.98%		0.94%		0.65%		0.10%		0.48%		0.37%		0.53%		0.81%
Return on average equity⁽²⁾		7.22%		7.11%		5.23%		0.82%		4.35%		3.12%		5.28%		8.79%
Net interest margin		4.46%		4.30%		3.87%		3.99%		3.62%		3.88%		3.46%		3.57%
Efficiency ratio ⁽¹⁾		65.94%		65.76%		69.57%		73.60%		82.85%		77.16%		78.20%		78.00%

Period End Balance Sheet Data:
Loans, net of unearned income	$	573,729	$	558,923	$	552,038	$	546,475	$	333,868	$	552,038	$	346,500	$	367,891
Total Earning Assets		665,028		663,017		698,266		710,005		458,696		698,266		483,054		543,674
Goodwill		6,931		6,931		6,931		6,931		-		6,931		-		-
Core Deposit Intangible		1,320		1,470		1,625		1,786		124		1,625		182		298
Total Assets		742,443		748,371		766,121		784,983		508,282		766,121		525,646		585,453
Deposits		579,609		600,520		618,902		644,093		428,734		618,902		448,458		498,559
Short term debt		32,884		18,943		20,733		18,077		7,179		20,733		6,305		17,848
Long term debt		24,914		25,282		25,591		26,049		12,372		25,591		12,372		12,372
Shareholders' equity		101,552		100,076		97,685		93,995		57,551		97,685		56,004		54,179

Selected Average Balances:
Gross Loans	$	569,785	$	557,177	$	546,626	$	489,563	$	336,286	$	430,571	$	354,871	$	391,648
Total Earning Assets		669,586		672,655		702,818		632,922		465,976		565,264		511,597		532,193
Core Deposit Intangible		1,389		1,546		1,714		1,496		136		884		237		389
Total Assets		744,118		748,047		776,839		709,480		514,539		631,905		555,354		574,616
Deposits		588,328		600,601		632,633		582,825		435,976		523,954		470,526		481,387
Short term debt		28,212		19,298		19,790		14,652		6,748		9,957		13,879		17,848
Long term debt		22,895		25,444		25,818		22,343		12,372		20,494		12,372		12,372
Shareholders' equity		101,216		99,376		97,030		84,744		57,158		74,365		55,701		52,769

Asset Quality Ratios:
Nonperforming loans	$	11,702	$	13,473	$	11,876	$	12,375	$	12,952	$	11,876	$	15,856	$	12,030
Other real estate owned		1,030		1,187		1,585		1,687		1,169		1,585		2,008		2,833
Allowance for loan losses		6,842		6,919		6,844		6,529		6,447		6,844		7,054		7,897
Nonperforming loans ⁽³⁾ to period-end loans		2.04%		2.41%		2.15%		2.26%		3.88%		2.15%		4.58%		3.27%
Allowance for loan losses to period-end loans		1.19%		1.24%		1.24%		1.19%		1.93%		1.24%		2.04%		2.15%
Delinquency Ratio ⁽⁴⁾		0.32%		0.23%		0.91%		0.36%		0.15%		0.91%		0.25%		0.32%
Net loan charge-offs to average loans		-0.01%		0.04%		-0.10%		0.02%		0.18%		-0.03%		0.15%		-0.12%

(1)	Efficiency ratio is calculated as non-interest expenses divided by the sum of net interest income and non-interest income.
(2)	Annualized.
(3)	Nonperforming loans consist of non-accrual loans and restructured loans.
(4)	Delinquency Ratio includes loans 30-89 days past due and excludes non-accrual loans.