Earnings MOCKSVILLE, N.C., July 23 /PRNewswire-FirstCall/ -- Bank of the Carolinas Corporation (Nasdaq: BCAR), today reported financial results for the three and six months ended June 30, 2007. For the three month period ended June 30, 2007, net income was $592,000, as compared to $841,000 in the second quarter of 2006. Diluted earnings per share were $.15 as compared to $.21 for the second quarter of 2006. For the six months ended June 30, 2007, the Bank reported net income of $1,372,000, a decrease of 16.6% when compared to $1,645,000 for the six month period in 2006. Diluted earnings per share decreased to $.35 for the six month period, a 16.7% decrease when compared to $.42 per diluted share for the same period in 2006. Total assets at June 30, 2007 amounted to $456.9 million, an increase of 7.6% when compared to the June 30, 2006 amount of $424.7 million. Net loans increased 6.7% over the prior year to $352.3 million, while deposits grew to $387.0 million, a 10.6% increase. The allowance for loan losses was .96% of total loans as of June 30, 2007, and the ratio of annualized net charge-offs to average loans was 0.44%. The biggest factors leading to the decrease in net income for the three and six month periods ended in 2007 were a decline in the Company's net interest margin and an increase in the provision for loan losses. For the six month period ended in 2007, the net interest margin declined to 3.35% from 3.92% in 2006. While there was a significant decline year over year, the net interest margin did increase slightly in the second quarter versus the first quarter of 2007. The increase in the provision for loan losses was mainly the result of an increased level of charge-offs during the quarter, a significant portion of which was related to one problem credit. Excluding the charge-off related to this one problem credit, the Company's annualized net charge-off ratio would have been .17% as opposed to .44% as reported. The Company experienced growth in non-interest income of 28.3% and 24.3%, respectively, for the three and six month periods in 2007 versus 2006. While non-interest expense rose over the previous year, it decreased as a percentage of average assets, falling to 2.44% in 2007 from 2.59% for the comparable six month period. As was previously announced on April 12, 2007, the Company has entered into a definitive agreement with Randolph Bank & Trust Company (Pink Sheets: RDBN) whereby Randolph Bank will be merged into Bank of the Carolinas. The transaction is subject to shareholder and regulatory approval and is expected to be consummated in the fourth quarter of 2007. Bank of the Carolinas Corporation is the holding company for Bank of the Carolinas, a state 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 Capital Market under the symbol BCAR. This press release contains forward-looking statements as defined by federal securities laws. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results could differ materially from current projections. Bank of the Carolinas Corporation undertakes no obligation to revise these statements following the date of this press release. For further information contact: Eric E. Rhodes Chief Financial Officer Bank of the Carolinas (336) 751-5755 Additional Information and Where To Find It The proposed merger of Randolph Bank & Trust Company ("Randolph") into Bank of the Carolinas will be submitted to the shareholders of Bank of the Carolinas Corporation ("BOC") and Randolph for their consideration and approval. BOC has filed a registration statement, a prospectus (which will be combined with Randolph's and BOC's joint proxy statements) and other related documents with the SEC concerning the proposed merger. The joint proxy statement/prospectus and other relevant materials, any amendments or supplements to those documents, and any other filings containing information about Randolph or BOC, contain important information. Randolph's and BOC's shareholders are urged to read those documents when they become available and before making any voting or investment decision with respect to the proposed merger. You will be able to obtain a free copy of the joint proxy statement/prospectus and any other documents filed by BOC with the SEC at the SEC's Internet site (http://www.sec.gov). Copies of the proxy statement and other reports Randolph files with the FDIC will be available for inspection at the offices of the FDIC's Accounting and Securities Disclosure Section located at Room F-6043, 550 17th Street, N.W., Washington, DC 20429. You also may obtain copies of Randolph's reports by calling the FDIC's Accounting and Securities Disclosure Section at (202) 898-8913, by facsimile at (202) 898-8505, or by email at firstname.lastname@example.org. In addition, you may obtain copies of the joint proxy statement/prospectus and any other documents filed with the SEC by BOC, without charge, by directing a request to the President, Bank of the Carolinas Corporation, 135 Boxwood Village, Mocksville, N.C. 27028-2941 or P.O. Box 129, Mocksville, N.C. 27028-0129, telephone (336) 751-5755. You may obtain copies of any documents filed with the FDIC by Randolph, without charge, by directing a request to the President, Randolph Bank & Trust Company, 175 N. Fayetteville Street, Asheboro, N.C. 27203-5513, or P.O. Box 1888, Asheboro, N.C. 27204-1888, telephone (336) 625-1000. This press release does not constitute an offer of any securities for sale. Any offer will be made only by the joint proxy statement/prospectus. Participants in the Solicitation BOC and Randolph, and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies from the shareholders of BOC and Randolph in favor of the proposed merger. Information about BOC's directors and executive officers and their ownership of BOC's capital stock will be contained in the proxy statement that will be distributed by BOC in connection with the merger, which will be filed with the SEC. Information about Randolph's directors and executive officers and their ownership of Randolph's capital stock will be contained in the proxy statement that will be distributed by Randolph in connection with its 2007 annual meeting of shareholders and the merger, which will be filed with the FDIC. Additional information regarding the interests of those participants in the proposed merger may be obtained by reading the joint proxy statement/prospectus regarding the merger when it becomes available. You may obtain free copies of those documents when they become available as described above. Bank of the Carolinas Corporation Consolidated Balance Sheets (In Thousands, Except Share Data) (Unaudited) June 30 2007 2006 Assets Cash and Due from Banks $5,364 $4,367 Interest-Bearing Deposits in Banks 3,418 6,558 Federal Funds Sold 969 3,784 Securities Available for Sale 64,564 54,031 Loans 355,750 333,777 Less, Allowance for Loan Losses (3,425) (3,504) Total Loans, Net 352,325 330,273 Properties and Equipment 12,303 11,402 Other Assets 17,910 14,236 Total Assets $456,853 $424,651 Liabilities Non-interest Bearing Demand Deposits $30,613 $29,732 Interest Bearing Demand Deposits 62,296 67,612 Savings Deposits 12,012 11,673 Time Deposits 282,072 241,028 Total Deposits 386,993 350,045 Borrowings 26,500 37,000 Retail Repurchase Agreements 2,111 - Other Liabilities 2,556 1,808 Total Liabilities 418,160 388,853 Shareholders' Equity Common Stock, Par Value $5 Per Share: Authorized 15,000,000 Shares; Issued 3,852,992 Shares in 2007 and 3,825,192 Shares in 2006 19,265 19,126 Additional Paid-In Capital 11,505 11,425 Retained Earnings 8,281 5,845 Accumulated Other Comprehensive Loss (358) (598) Total Shareholders' Equity 38,693 35,798 Total Liabilities and Shareholders' Equity $456,853 $424,651 Bank of the Carolinas Corporation Consolidated Statements of Income (In Thousands, Except Share and Per Share Data) (Unaudited) Three Months Ended Six Months Ended June 30 June 30 2007 2006 2007 2006 Interest Income Interest and Fees on Loans $7,285 $6,558 $14,594 $12,363 Interest on Securities 699 544 1,313 1,021 Federal Funds Sold 184 31 361 169 Deposits in Other Banks 1 5 5 6 Total Interest Income 8,169 7,138 16,273 13,559 Interest Expense Deposits 4,311 2,993 8,561 5,669 Borrowed Funds 303 374 588 645 Total Interest Expense 4,614 3,367 9,149 6,314 Net Interest Income 3,555 3,771 7,124 7,245 Provision for Loan Losses 412 180 474 297 Net Interest Income After Provision for Loan Losses 3,143 3,591 6,650 6,948 Other Income Customer Service Fees 266 245 502 466 Mortgage Loan Broker Fees 31 22 62 81 Investment Services 56 - 99 - Increase in CSV of Life Insurance 86 51 168 100 Other Income 33 50 70 78 Total Other Income 472 368 901 725 Noninterest Expense Salaries and Benefits 1,418 1,462 2,935 2,817 Occupancy and Equipment 421 335 839 672 Other Noninterest Expense 940 854 1,792 1,628 Total Noninterest Expense 2,779 2,651 5,566 5,117 Income Before Income Taxes 836 1,308 1,985 2,556 Income Taxes 244 467 613 911 Net Income $592 $841 $1,372 $1,645 Earnings Per Share Basic $0.15 $0.22 $0.36 $0.43 Diluted $0.15 $0.21 $0.35 $0.42 Weighted Average Shares Outstanding Basic 3,837,533 3,825,192 3,833,146 3,825,192 Diluted 3,943,364 3,964,660 3,947,383 3,963,642 Bank of the Carolinas Corporation Performance Ratios As of or for the Six Months Ended June 30 2007 2006 Change* Financial Ratios Return On Average Assets ** 0.60% 0.83% (23)BP Return On Average Shareholders' Equity ** 7.18% 9.36% (218) Net Interest Margin ** 3.35% 3.92% (57) Asset Quality Ratios Net-chargeoffs to Average Loans ** 0.44% 0.07% 37 BP Nonperforming Loans To Total Loans 0.95% 0.69% 26 Nonperforming Assets To Total Assets 0.96% 0.86% 10 Allowance For Loan Losses To Total Loans 0.96% 1.05% (9) * BP denotes basis points ** Ratio Annualized SOURCE Bank of the Carolinas CONTACT: Eric E. Rhodes, Chief Financial Officer of Bank of the Carolinas, +1-336-751-5755 -0- Jul/23/2007 22:14 GMT
Bank of the Carolinas Corporation Reports Second Quarter
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