Select Bancorp Reports Third Quarter 2015 Earnings

DUNN, N.C., Nov. 03, 2015 (GLOBE NEWSWIRE) — Select Bancorp, Inc. (the “Company”)  (NASDAQ:SLCT), the holding company for Select Bank & Trust, today reported net income of $1.4 million for the quarter ended September 30, 2015, and basic and diluted earnings per share of $0.12, compared to net income of $194,000 and basic and diluted earnings per share of $0.02 for the third quarter of 2014.  

Total assets, deposits, and total loans for the Company as of September 30, 2015, were $786.5 million, $619.9 million, and $598.0 million, respectively, compared to total assets of $785.0 million, total deposits of $644.1 million, and total loans of $546.5 million as of the same date in 2014.

Commenting on third quarter 2015 results, William L. Hedgepeth II, President and CEO stated, “Our results for the third quarter were impacted by one-time expenses related to our acquisition of new branch offices in Morehead City and Leland, N.C., the closing of our Burlington and Gibsonville, N.C. offices, and the closing of our Ramsey Street Office in Fayetteville, N.C. While the costs associated with these initiatives decreased the Company’s non-interest income for the quarter by approximately $412 thousand, we believe our branch network, and our Company, will be better positioned to enhance efficiency and customer convenience going forward. Our previously announced acquisition of two new branches, one in Morehead City and the other in Leland near Wilmington, has received all required regulatory approvals and is scheduled to close during December.  We are also pleased that the Company was able to report net income of approximately $1.4 million for the quarter, even after incurring the expense associated with these long-term investments in our franchise.”

For the nine months ended September 30, 2015, the Company recorded after-tax net income of $4.9 million compared to $1.8 million for the nine months ended September 30, 2014.  Year to date basic and diluted earnings per share of $0.43 compared to $0.13 per share for the nine months ended September 30, 2014.  Year to date return on average assets through September 30, 2015 is 0.87% (annualized) and year to date return on average equity is 6.50% (annualized), compared to 0.20% and 1.74%, respectively, for the nine months ended September 30, 2014.

Non-performing loans decreased to $10.9 million at September 30, 2015 from $11.9 million at December 31, 2014. Non-performing loans equaled 1.82% of loans at September 30, 2015, decreasing from 2.15% of loans at December 31, 2014. Foreclosed real estate equaled $1.6 million at December 31, 2014 and decreased to $1.0 million at September 30, 2015.  For the quarter, recoveries were $107,000 or -0.02% of average loans, compared to a recovery of $139,000 or -0.10% of average loans in the fourth quarter of 2014. At September 30, 2015, the allowance for loan losses was $7.0 million or 1.18% of total loans, as compared to $6.8 million or 1.24% of total loans at December 31, 2014.

Mr. Hedgepeth concluded, “We are pleased with the Company’s year to date results of operations and continued asset quality and we look forward to bringing our ‘common sense banking’ to Morehead City and Leland before year end.  We continue to believe that Select is well positioned for the remainder of 2015 and beyond.”

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

The information as of and for the quarter ended September 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  
    September 30,
2015
    June 30, 
2015
    March 31, 
2015
    December 31,
2014
    September 30, 
2014
    December 31,
2014
    December 31,
2013
    December 31,
2012
 
Summary of Operations:                                                
Total interest income $ 8,412   $ 8,262   $ 8,242   $ 7,988   $ 7,541   $ 26,104   $ 22,903   $ 25,132  
Total interest expense   878     835     939     1,141     1,169     4,519     5,258     6,632  
Net interest income   7,534     7,427     7,303     6,847     6,372     21,585     17,645     18,500  
Provision for (recovery of) loan losses   393     (139 )   130     177     105     (194 )   (325 )   (2,597 )
Net interest income after provision   7,141     7,566     7,173     6,670     6,267     21,779     17,970     21,097  
Noninterest income   572     941     863     836     650     2,675     2,629     3,598  
Merger/Acquisition related expenses   103     35         217     1,325     1,941          
Noninterest expense   5,467     5,518     5,370     5,345     5,168     18,719     15,855     17,236  
Income before income taxes   2,143     2,954     2,666     1,944     424     3,794     4,744     7,459  
Provision for income taxes   792     1,133     923     666     230     1,437     1,803     2,822  
Net Income   1,351     1,821     1,743     1,278     194     2,357     2,941     4,637  
Dividends on Preferred Stock   19     19     19     19     19     38          
Net income available to common shareholders $ 1,332   $ 1,802   $ 1,724   $ 1,259   $ 175   $ 2,319   $ 2,941   $ 4,637  
                                                 
Share and Per Share Data:                
Earnings per share – basic $ 0.12   $ 0.16   $ 0.15   $ 0.11   $ 0.02   $ 0.26   $ 0.43   $ 0.67  
Earnings per share – diluted $ 0.12   $ 0.16   $ 0.15   $ 0.11   $ 0.02   $ 0.26   $ 0.43   $ 0.67  
Book value per share $ 8.28   $ 8.17   $ 8.07   $ 7.91   $ 7.61   $ 8.59   $ 8.09   $ 7.84  
Tangible book value per share $ 7.58   $ 7.45   $ 7.33   $ 7.16   $ 7.01   $ 7.83   $ 8.07   $ 7.79  
Ending shares outstanding   11,577,111     11,499,398     11,458,561     11,377,980     11,349,368     11,377,980     6,921,352     6,913,636  
Weighted average shares outstanding:                
Basic   11,521,043     11,481,137     11,426,378     11,375,803     10,195,846     8,870,114     6,918,814     6,898,147  
Diluted   11,582,724     11,548,878     11,510,147     11,475,865     10,312,085     8,974,384     6,919,760     6,898,377  
                 
Selected Performance Ratios:                
Return on average assets(2)   0.69 %   0.98 %   0.94 %   0.65 %   0.10 %   0.37 %   0.53 %   0.81 %
Return on average equity(2)   5.21 %   7.22 %   7.11 %   5.23 %   0.82 %   3.12 %   5.28 %   8.79 %
Net interest margin   4.34 %   4.46 %   4.30 %   3.87 %   3.99 %   3.88 %   3.46 %   3.57 %
Efficiency ratio (1)   67.44 %   65.94 %   65.76 %   69.57 %   73.60 %   77.16 %   78.20 %   78.00 %
                 
Period End Balance Sheet Data:                
Loans, net of unearned income $ 597,969   $ 573,729   $ 558,923   $ 552,038   $ 546,475   $ 552,038   $ 346,500   $ 367,891  
Total Earning Assets   711,622     665,028     663,017     698,266     710,005     698,266     483,054     543,674  
Goodwill   6,931     6,931     6,931     6,931     6,931     6,931          
Core Deposit Intangible   1,196     1,320     1,470     1,625     1,786     1,625     182     298  
Total Assets   786,495     742,443     748,371     766,121     784,983     766,121     525,646     585,453  
Deposits   619,935     579,609     600,520     618,902     644,093     618,902     448,458     498,559  
Short term debt   30,722     32,884     18,943     20,733     18,077     20,733     6,305     17,848  
Long term debt   28,846     24,914     25,282     25,591     26,049     25,591     12,372     12,372  
Shareholders’ equity   103,545     101,552     100,076     97,685     93,995     97,685     56,004     54,179  
                 
Selected Average Balances:                
Gross Loans $ 585,541   $ 569,785   $ 557,177   $ 546,626   $ 489,563   $ 430,571   $ 354,871   $ 391,648  
Total Earning Assets   689,166     669,586     672,655     702,818     632,922     565,264     511,597     532,193  
Core Deposit Intangible   1,251     1,389     1,546     1,714     1,496     884     237     389  
Total Assets   771,913     744,118     748,047     776,839     709,480     631,905     555,354     574,616  
Deposits   607,722     588,328     600,601     632,633     582,825     523,954     470,526     481,387  
Short term debt   35,012     28,212     19,298     19,790     14,652     9,957     13,879     17,848  
Long term debt   22,631     22,895     25,444     25,818     22,343     20,494     12,372     12,372  
Shareholders’ equity   102,879     101,216     99,376     97,030     84,744     74,365     55,701     52,769  
                 
Asset Quality Ratios:                
Nonperforming loans $ 10,899   $ 11,702   $ 13,473   $ 11,876   $ 12,375   $ 11,876   $ 15,856   $ 12,030  
Other real estate owned   1,007     1,030     1,187     1,585     1,687     1,585     2,008     2,833  
Allowance for loan losses   7,032     6,842     6,919     6,844     6,529     6,844     7,054     7,897  
Nonperforming loans (3) to period-end loans   1.82 %   2.04 %   2.41 %   2.15 %   2.26 %   2.15 %   4.58 %   3.27 %
Allowance for loan losses to period-end loans   1.18 %   1.19 %   1.24 %   1.24 %   1.19 %   1.24 %   2.04 %   2.15 %
Delinquency Ratio (4)   0.36 %   0.32 %   0.23 %   0.91 %   0.36 %   0.91 %   0.25 %   0.32 %
Net loan charge-offs (recoveries) to average loans   0.14 %   -0.01 %   0.04 %   -0.10 %   0.02 %   -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.
 
CONTACT: Mark A. Jeffries
Executive Vice President
Chief Financial Officer 
Office: 910-892-7080 and Direct: 910-897-3603
markj@SelectBank.com
SelectBank.com