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MOCKSVILLE, N.C., Nov 05, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Bank of the Carolinas Corporation (Nasdaq: BCAR) reported today financial results for the three and nine month periods ended September 30, 2009.
For the three month period ended September 30, 2009, the Company reported net income of $782,000, as compared to a net loss of $2,720,000 in the third quarter of 2008. Net income available to common shareholders for the three months ended September 30, 2009 was $470,000, or $.12 per diluted share, compared to a net loss of $.69 per common share in the 2008 quarter.
For the nine month period ended September 30, 2009, the Company reported a net loss of $1,352,000 compared to a net loss of $2,984,000 for the same period of 2008. The net loss available to common shareholders for the nine month period of 2009 was $1,763,000, or $.45 per common share compared to a net loss of $.76 per share incurred during the first nine months of 2008.
While the Company continues to be negatively affected by the economic downturn, the third quarter of 2009 was the most profitable since the third quarter of 2007. Improved interest margins from lower funding costs, gains from sales of securities and moderating provisions for loan losses were mainly responsible for the improvement in the 2009 periods' results as compared to 2008.
Net interest income, the Company's most significant source of revenue, totaled $4.1 million in the third quarter of 2009, a 36.1% increase from the 2008 quarter. For the first nine months of 2009 net interest income was $10.3 million, a 9.4% increase from the comparable period of 2008. These positive results were due to increased interest margins principally brought about by reduced cost of interest-bearing deposits.
As the result of the resolution of several large nonaccrual loans during the third quarter of 2009, the Company's nonperforming assets decreased by $6.3 million, or 28.8%, and totaled $15.5 million, or 2.33% of total assets, at September 30, 2009. In comparison, non-performing assets at September 30, 2008 were $15.1 million, or 2.64% of total assets.
The provision for loan losses totaled $1,046,000 for the quarter ended September 30, 2009, a reduction of 66.8% from the provision of $3,150,000 for the third quarter of 2008. For the nine-month period of 2009 the loan loss provision totaled $2,466,000, a 41.9% decline from the $4,245,000 provision recorded in the previous year. The allowance for loan losses was 1.58% of total loans as of September 30, 2009, and year-to-date annualized net charge-offs were .85% of average loans outstanding. While the level of nonperforming assets has declined and credit losses have abated from 2008, we and the banking industry as a whole, continue to face credit challenges. As always, we remain committed to helping our customers weather the current economic storm to the best of our ability while being aggressive in identifying troubled assets in our portfolio.
Non-interest expenses totaled $3,846,000 for the third quarter of 2009, a decrease of 7.1% from the comparable quarter of 2008. For the nine months ended September 30, 2009 noninterest expenses were $12,817,000, an increase of 18.5% from the same nine month period of 2008. The most significant drivers in the cost increase for the nine-month period were substantially higher costs related to foreclosed real estate and an increase in FDIC insurance expense due to the increased assessment rate levied on all banks this year. Non-interest income, exclusive of securities gains, remained relatively flat for the three and nine month periods.
Total assets at September 30, 2009 amounted to $664.1 million, an increase of 16.3% when compared to the $570.9 million as of September 30, 2008. Loans totaled $391.6 million, a decline of 3.8% from a year earlier, while deposits grew 20.5% over the prior year to $545.2 million. The Company continues to be well-capitalized with a Tier 1 Leverage Ratio of 7.73%, a Tier 1 capital to risk-weighted assets ratio of 11.22% and a Total Capital to risk-weighted assets ratio of 13.05% at the end of the third quarter of 2009.
Bank of the Carolinas Corporation is the holding company for Bank of the Carolinas, a North Carolina chartered bank headquartered in Mocksville, NC with offices in Advance, Asheboro, Cleveland, Concord, Harrisburg, King, Landis, Lexington and Winston-Salem. Common stock of the Company is traded on the NASDAQ Global Market under the symbol BCAR.
For further information contact:
Michelle L. Clodfelter
Principal Financial Officer
Bank of the Carolinas
(336) 998-1799 x 207
DISCLOSURES ABOUT FORWARD LOOKING STATEMENTS
This press release may contain statements relating to our financial condition, results of operations, plans, strategies, trends, projections of results of specific activities or investments, expectations or beliefs about future events or results, and other statements that are not descriptions of historical facts. Those statements, may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by terms such as "may," "will," "should," "could," "expects," "plans," "intends," "anticipates," "believes," "estimates," "predicts," "forecasts," "potential" or "continue," or similar terms or the negative of these terms, or other statements concerning opinions or judgments of our management about future events. Forward-looking information is inherently subject to risks and uncertainties, and our actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors discussed in our Annual Report on Form 10-K and in other documents we file with the Securities and Exchange Commission from time to time. Copies of those reports are available directly through the Commission's website at www.sec.gov. Other factors that could influence the accuracy of forward-looking statements include, but are not limited to, (a) pressures on the earnings, capital and liquidity of financial institutions resulting from current and future adverse conditions in the credit and equity markets and the banking industry in general; (b) changes in competitive pressures among depository and other financial institutions or in our ability to compete successfully against the larger financial institutions in our banking markets; (c) the financial success or changing strategies of our customers; (d) actions of government regulators, or changes in laws, regulations or accounting standards, that adversely affect our business; (e) changes in the interest rate environment and the level of market interest rates that reduce our net interest margins and/or the volumes and values of loans we make and securities we hold; (f) changes in general economic or business conditions and real estate values in our banking markets (particularly changes that affect our loan portfolio, the abilities of our borrowers to repay their loans, and the values of loan collateral); and (g) other developments or changes in our business that we do not expect. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. All forward-looking statements attributable to us are expressly qualified in their entirety by the cautionary statements in this paragraph. We have no obligation, and we do not intend, to update these forward-looking statements.
Bank of the Carolinas Corporation
Consolidated Balance Sheets
(In Thousands Except Share Data)
(Unaudited)
September 30,
-------------
2009 2008
---- ----
Assets:
Cash and Due from Banks $44,519 $12,734
Federal Funds Sold and Interest Bearing
Deposits with Banks 24,136 10,407
Investment Securities 165,499 106,587
Loans 391,592 406,886
Less, Allowance for Loan Losses (6,197) (4,218)
------ ------
Total Loans, Net 385,395 402,668
Properties and Equipment 14,289 15,245
Other Assets 30,263 23,229
------ ------
Total Assets $664,101 $570,870
======== ========
Liabilities:
Non-interest Bearing Demand Deposits $38,139 $33,303
Interest Bearing Demand Deposits 31,529 23,076
Money Market Deposits 264,492 175,127
Savings Deposits 11,257 22,259
Time Deposits 199,827 198,831
------- -------
Total Deposits 545,244 452,596
Federal Home Loan Bank Borrowings 15,000 25,000
Securities Sold Under Repurchase Agreements 46,358 47,369
Subordinated Debt 7,855 7,855
Other Liabilities 1,651 1,750
----- -----
Total Liabilities 616,108 534,570
------- -------
Shareholders' Equity:
Preferred Stock, No Par Value:
Authorized 10,000,000 shares: Issued 13,179 shares
(with a liquidation preference of $1,000 per share)
at September 30, 2009 and None at September 30, 2008 13,179 -
Discount on Preferred Stock (1,306) -
Common Stock, Par Value $5 Per Share:
Authorized 15,000,000 Shares; Issued 3,897,174
Shares at September 30, 2009 and 3,891,174 Shares
at September 30, 2008 19,486 19,456
Additional Paid-In Capital 12,972 11,593
Retained Earnings 2,304 4,902
Accumulated Other Comprehensive Income 1,358 349
----- ---
Total Shareholders' Equity 47,993 36,300
------ ------
Total Liabilities and Shareholders' Equity $664,101 $570,870
======== ========
* Derived from audited information
Bank of the Carolinas Corporation
Consolidated Statements of Income
(In Thousands Except Share and Per Share Data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Interest Income
Interest and
Fees on Loans $5,875 $6,268 $17,904 $19,962
Interest on
Securities 1,641 1,202 4,539 2,638
Other Interest
Income 13 61 56 181
--- --- --- ---
Total Interest
Income 7,529 7,531 22,499 22,781
----- ----- ------ ------
Interest Expense
Interest on
Deposits 2,657 3,764 9,843 11,958
Interest on
Borrowed Funds 776 757 2,364 1,418
--- --- ----- -----
Total Interest
Expense 3,433 4,521 12,207 13,376
----- ----- ------ ------
Net Interest Income 4,096 3,010 10,292 9,405
Provision for
Loan Losses 1,046 3,150 2,466 4,245
----- ----- ----- -----
Net Interest
Income After
Provision for
Loan Losses 3,050 (140) 7,826 5,160
----- ---- ----- -----
Noninterest Income
Customer Service
Charges and
Fees 368 384 1,019 1,105
Increase in Cash
Value of Life
Insurance 92 93 272 273
Gains on sales
of Securities 1,246 - 1,341 -
Other Income 9 (7) 31 62
--- --- --- ---
Total Other
Income 1,715 470 2,663 1,440
----- --- ----- -----
Noninterest Expense
Salaries and
Benefits 1,611 1,720 4,959 5,329
Occupancy and
Equipment 553 502 1,647 1,482
FDIC Insurance
Expense 217 80 932 240
Valuation
Provisions and
Net Operating
Costs Associated
With Foreclosed
Real Estate 297 195 1,759 215
Goodwill
Impairment
Charge - 591 - 591
Data Processing
Expense 330 217 785 643
Other
Noninterest
Expense 838 835 2,735 2,312
--- --- ----- -----
Total
Noninterest
Expense 3,846 4,140 12,817 10,812
----- ----- ------ ------
Income (Loss)
Before Income
Taxes 919 (3,810) (2,328) (4,212)
Provision for
Income Taxes 137 (1,090) (976) (1,228)
--- ------ ---- ------
Net Income
(Loss) 782 (2,720) (1,352) (2,984)
Dividends and
Accretion on
Preferred
Stock (312) - (411) -
---- --- ---- ---
Net Income
(Loss)
Available
to Common
Shareholders $470 $(2,720) $(1,763) $(2,984)
==== ======== ======== ========
Earnings (Loss)
Per Common
Share:
Basic $0.12 $(0.69) $(0.45) $(0.76)
Diluted $0.12 $(0.69) $(0.45) $(0.76)
Weighted Average
Common Shares
Outstanding:
Basic 3,897,174 3,936,649 3,893,350 3,941,582
Diluted 3,901,735 3,936,649 3,893,350 3,941,582
Bank of the Carolinas Corporation
Performance Ratios
As of or for the
Nine Months Ended September 30
------------------------------
2009 2008 Change*
---- ---- ------
Financial Ratios
Return On Average Assets ** -0.29% -0.76% 47 BP
Return On Average Common
Shareholders' Equity ** -6.76% -10.46% 370
Net Interest Margin ** 2.43% 2.58% (15)
Asset Quality Ratios
Net-chargeoffs to
Average Loans ** 0.85% 1.41% (56) BP
Nonperforming Loans To
Total Loans 1.79% 1.76% 3
Nonperforming Assets To
Total Assets 2.33% 2.64% (31)
Allowance For Loan Losses To
Total Loans 1.58% 1.04% 55
* BP denotes basis points.
** Ratio annualized.
SOURCE Bank of the Carolinas Corporation
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