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Select Bancorp Reports Second Quarter 2016 Earnings

DUNN, N.C., July 26, 2016 (GLOBE NEWSWIRE) -- Select Bancorp, Inc. (the “Company”) (NASDAQ:SLCT), the holding company for Select Bank & Trust, reported net income for the quarter ended June 30, 2016 of $1.9 million compared to $1.8 million for the same period in 2015. Basic and diluted earnings per share for the second quarter were $0.16, compared to basic and diluted earnings per share of $0.16 for the second quarter of 2015.

For the six-month period ended June 30, 2016, net income for the Company was $3.4 million compared to $3.5 million for the same period in 2015. Basic and diluted earnings per share for the first six months of 2016 were $0.29, compared to basic and diluted earnings per share of $0.31 for the first six months of 2015.

As of June 30, 2016, the Company reported total assets of $826.6 million compared to $742.4 million at June 30, 2015, an increase of 11.3%. Total deposits were $661.3 million and total net loans were $624.5 million at the end of the second quarter of 2016, compared to total deposits of $579.6 million and total net loans of $566.9 million as of the end of the second quarter of 2015, increases of 14.1% and 10.2%, respectively.

Quarter to date return on average assets through June 30, 2016 is 0.93% and quarter to date return on average equity is 7.62%, compared to 0.98% and 7.22%, respectively, for the quarter ended June 30, 2015.

The second quarter of 2016 was a very good quarter for Select Bancorp as net income increased 27% over the first quarter of 2016. Non-performing loans were $8.8 million and $11.7 million at June 30, 2016 and June 30, 2015, respectively. Non-performing loans equaled 1.39% of loans at June 30, 2016, decreasing from 2.04% of loans at June 30, 2015. Foreclosed real estate equaled $716,000 at June 30, 2016, compared to $1.0 million at June 30, 2015. For the quarter, net recoveries were ($6,000), or (0.0%), of average loans, compared to net recoveries of ($16,000), or (0.01%), of average loans in the second quarter 2015. At June 30, 2016, the allowance for loan losses was $7.7 million, or 1.22% of total loans, as compared to $6.8 million or 1.19% of total loans at June 30, 2015.

Net interest margin was 4.24% for the quarter ending June 30, 2016, as compared to 4.46% for the quarter ended June 30, 2015.

President and CEO William L. Hedgepeth II said, “During the second quarter, we celebrated the 16th anniversary of the founding of our bank and we prepared to move into new office space in Raleigh, a full-service banking facility on Falls of Neuse Road that will open for business on August 1. We are excited about what is to come in the Triangle market and for the growth potential in many of our other markets, including the Wilmington area. Andy Scott is our market executive in Raleigh and we have just added Karen Priester as a commercial lender with more than 30 years of banking experience in Wake County. We believe this market is poised for growth and our experienced team is ready to offer true community bank lending to small and medium sized businesses in Wake County. Select Bank prides itself on local decision making, focusing on delivering quality products and services to our customers.”

The Company will relocate its Raleigh branch from the current location to 4505 Falls of Neuse Road on August 1. A grand opening celebration is being planned for later in August. The new branch is conveniently located just north of the beltline past Wake Forest Road.

In a report compiled by SNL Financial and published in the June 2016 edition of Business North Carolina ranking the 100 largest financial institutions headquartered in North Carolina, Select Bancorp ranked 30th, moving up two positions from 2015. Select also ranked 7th out of the 100 largest financial institutions with headquarters in the state for the fastest growth in revenue, according to the same report. “We are proud of these results and continue to believe that Select is well positioned for the remainder of 2016 and beyond,” said Hedgepeth.

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

The information as of and for the quarter ended June 30, 2016, 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. These forward-looking statements are not guarantees of future performance or determinations, nor should they be relied upon as representing management’s views as of any subsequent date. 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. Except as required by law, the Company specifically disclaims any obligation to update any factors or to publicly announce revisions to any forward-looking statements to reflect future events or developments.

Select Bancorp, Inc.
Selected Financial Information and Other Data (unaudited)
($ in thousands, except per share data)
At or for the three months endedAt or for the twelve months ended
June 30, March 31,December 31,September 30,June 30,December 31,December 31,December 31,
2016 2016 2015 2015 2015 2015 2014 2013
Summary of Operations:
Total interest income$ 8,645 $ 8,432 $ 8,425 $ 8,412 $ 8,262 $ 33,341 $ 26,104 $ 22,903
Total interest expense 912 927 890 878 835 3,542 4,519 5,258
Net interest income 7,733 7,505 7,535 7,534 7,427 29,799 21,585 17,645
Provision for (recovery of) loan losses 158 352 506 393 (139) 890 (194) (325)
Net interest income after provision 7,575 7,153 7,029 7,141 7,566 28,909 21,779 17,970
Noninterest income 831 866 916 572 941 3,292 2,675 2,629
Merger/Acquisition related expenses - - 240 103 35 378 1,941 -
Noninterest expense 5,519 5,620 5,497 5,467 5,518 21,852 18,719 15,855
Income before income taxes 2,887 2,399 2,208 2,143 2,954 9,971 3,794 4,744
Provision for income taxes 980 896 570 792 1,133 3,418 1,437 1,803
Net Income 1,907 1,503 1,638 1,351 1,821 6,553 2,357 2,941
Dividends on Preferred Stock - 4 20 19 19 77 38 -
Net income available to common shareholders$ 1,907 $ 1,499 $ 1,618 $ 1,332 $ 1,802 $ 6,476 $ 2,319 $ 2,941
Share and Per Share Data:
Earnings per share - basic$ 0.16 $ 0.13 $ 0.14 $ 0.12 $ 0.16 $ 0.56 $ 0.26 $ 0.43
Earnings per share - diluted$ 0.16 $ 0.13 $ 0.14 $ 0.12 $ 0.16 $ 0.56 $ 0.26 $ 0.43
Book value per share$ 8.74 $ 8.56 $ 8.38 $ 8.28 $ 8.17 $ 8.38 $ 8.59 $ 8.09
Tangible book value per share$ 8.05 $ 7.87 $ 7.67 $ 7.58 $ 7.45 $ 7.67 $ 7.83 $ 8.07
Ending shares outstanding 11,619,184 11,584,011 11,583,011 11,577,111 11,499,398 11,583,011 11,377,980 6,921,352
Weighted average shares outstanding:
Basic 11,594,995 11,583,440 11,580,745 11,521,043 11,481,137 11,502,800 8,870,114 6,918,814
Diluted 11,642,726 11,626,609 11,627,974 11,582,724 11,548,878 11,567,811 8,974,384 6,919,760
Selected Performance Ratios:
Return on average assets(2) 0.93% 0.73% 0.82% 0.69% 0.98% 0.86% 0.37% 0.53%
Return on average equity(2) 7.62% 6.03% 6.20% 5.21% 7.22% 6.42% 3.12% 5.28%
Net interest margin(2) 4.24% 4.14% 4.18% 4.34% 4.46% 4.38% 3.88% 3.46%
Efficiency ratio(1) 64.44% 67.14% 65.05% 67.44% 65.94% 66.04% 77.16% 78.20%
Period End Balance Sheet Data:
Loans, net of unearned income$ 624,495 $ 622,092 $ 617,398 $ 597,969 $ 573,729 $ 617,398 $ 552,038 $ 346,500
Total Earning Assets 749,956 753,726 726,408 711,622 665,028 726,408 698,266 483,054
Goodwill 6,931 6,931 6,931 6,931 6,931 6,931 6,931 -
Core Deposit Intangible 1,014 1,125 1,241 1,196 1,320 1,241 1,625 182
Total Assets 826,588 830,395 817,015 786,495 742,443 817,015 766,121 525,646
Deposits 661,274 667,654 651,161 619,935 579,609 651,161 618,902 448,458
Short term debt 40,714 31,218 24,594 30,722 32,884 24,594 20,733 6,305
Long term debt 18,205 28,559 33,782 28,846 24,914 33,782 25,591 12,372
Shareholders' equity 101,531 99,210 104,702 103,545 101,552 104,702 97,685 56,004
Selected Average Balances:
Gross Loans$ 629,333 $ 623,286 $ 601,966 $ 585,541 $ 569,785 $ 578,759 $ 430,571 $ 354,871
Total Earning Assets 739,002 734,859 714,755 689,166 669,586 686,663 565,264 511,597
Core Deposit Intangible 1,072 1,186 1,139 1,251 1,389 1,330 884 237
Total Assets 822,036 832,738 796,414 771,913 744,118 765,284 631,905 555,354
Deposits 658,476 672,151 631,855 607,722 588,328 607,214 523,954 470,526
Short term debt 37,883 36,039 35,303 35,012 28,212 32,316 9,957 13,879
Long term debt 20,772 20,822 20,872 22,631 22,895 20,147 20,494 12,372
Shareholders' equity 100,664 100,312 104,732 102,879 101,216 102,068 74,365 55,701
Asset Quality Ratios:
Nonperforming loans$ 8,788 $ 8,750 $ 8,280 $ 10,899 $ 11,702 $ 8,280 $ 11,876 $ 15,856
Other real estate owned 716 1,888 1,401 1,007 1,030 1,401 1,585 2,008
Allowance for loan losses 7,692 7,527 7,021 7,032 6,842 7,021 6,844 7,054
Nonperforming loans(3) to period-end loans 1.39% 1.39% 1.41% 1.82% 2.04% 1.34% 2.15% 4.58%
Allowance for loan losses to period-end loans 1.22% 1.20% 1.14% 1.18% 1.19% 1.14% 1.24% 2.04%
Delinquency Ratio(4) 0.23% 0.45% 0.41% 0.36% 0.32% 0.41% 0.91% 0.25%
Net loan charge-offs (recoveries) to average loans 0.00% -0.10% 0.34% 0.14% -0.01% 0.12% -0.03% 0.15%


(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.


Mark A. Jeffries Executive Vice President Chief Financial Officer Office: 910-892-7080 and Direct: 910-897-3603 markj@SelectBank.com SelectBank.com

Source:Select Bancorp Inc.