Bank of the Carolinas Corporation Reports Third Quarter Earnings
MOCKSVILLE, N.C., Oct. 31 /PRNewswire-FirstCall/ -- Bank of the Carolinas Corporation (Nasdaq: BCAR), today reported financial results for the three and nine months ended September 30, 2007.
For the three month period ended September 30, 2007, net income was $605,000, as compared to $1,148,000 in the third quarter of 2006. Diluted earnings per share were $.15 as compared to $.29 for the third quarter of 2006. For the nine months ended September 30, 2007, the Bank reported net income of $1,977,000, compared to $2,793,000 for the nine month period in 2006. Diluted earnings per share were $.50 for the nine month period, compared to $.70 per diluted share for the same period in 2006.
The decrease in net income in 2007 is due to the fact that net income in the third quarter of 2006 included a pre-tax gain of $1,755,000 on the sale of a branch location. Excluding this one time gain, net income for both the three and nine month periods in 2007 would have shown an increase compared to 2006.
During the third quarter of the 2007 the Bank opened its tenth full service office, located in Concord, NC. This is the second full service office the Bank has opened in 2007. The Bank's new Winston-Salem office opened in February.
Total assets at September 30, 2007 amounted to $480.2 million, an increase of 11.3% when compared to the September 30, 2006 amount of $431.4 million. Net loans increased 11.3% over the prior year to $372.8 million, while deposits grew to $410.4 million, a 12.7% increase. The allowance for loan losses was 1.00% of total loans as of September 30, 2007, and the ratio of annualized net charge-offs to average loans for the nine-month period was 0.36%.
For the nine month period ended in 2007, the net interest margin declined to 3.40% from 3.87% in 2006. While this was a significant year over year decline, the net interest margin has remained stable over the last three linked quarters and did increase slightly in the third quarter versus the second quarter of 2007.
Excluding the one-time gain in 2006 mentioned above, the Company experienced growth in non-interest income of 23.1% and 23.8%, respectively, for the three and nine month periods in 2007 versus 2006. Non-interest expense decreased over the previous year for both the three and nine month periods. As a percentage of average assets, non-interest expense decreased to 2.48% for the nine month period in 2007 from 2.84% for the comparable nine month period in 2006.
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 has received regulatory approval but is subject to shareholder 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 is 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 before making any voting or investment decision with respect to the proposed merger. You may 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 filed by Randolph with the FDIC are 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 is 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 is contained in the proxy statement distributed by BOC in connection with the merger, which has been filed with the SEC. Information about Randolph's directors and executive officers and their ownership of Randolph's capital stock is contained in the proxy statement distributed by Randolph in connection with its 2007 annual meeting of shareholders and the merger, which has been 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. You may obtain free copies of those documents as described above.
Bank of the Carolinas Corporation Consolidated Balance Sheets (In Thousands Except Share Data) (Unaudited) September 30, 2007 2006 Assets Cash and Due from Banks $6,728 $4,820 Interest-Bearing Deposits in Banks 165 4,679 Federal Funds Sold 4,220 5,554 Securities Available for Sale 63,997 56,277 Loans 376,560 338,651 Less, Allowance for Loan Losses (3,778) (3,802) Total Loans, Net 372,782 334,849 Properties and Equipment 13,284 11,062 Other Assets 19,042 14,181 Total Assets $480,218 $431,422 Liabilities Non-interest Bearing Demand Deposits $31,337 $25,969 Interest Bearing Demand Deposits 67,214 62,432 Savings Deposits 14,344 9,864 Time Deposits 297,544 265,859 Total Deposits 410,439 364,124 Borrowings 27,000 27,500 Other Liabilities 3,133 2,873 Total Liabilities 440,572 394,497 Shareholders' Equity Common Stock, Par Value $5 Per Share: Authorized 15,000,000 Shares; Issued 3,869,062 Shares in 2007 and 3,825,192 Shares in 2006 19,345 19,126 Additional Paid-In Capital 11,562 11,431 Retained Earnings 8,692 6,803 Accumulated Other Comprehensive Income (Loss) 47 (435) Total Shareholders' Equity 39,646 36,925 Total Liabilities and Shareholders' Equity $480,218 $431,422 Bank of the Carolinas Corporation Consolidated Statements of Income (In Thousands Except Share and Per Share Data) (Unaudited) Three Months Ended Nine Months Ended Sept. 30, Sept. 30, 2007 2006 2007 2006 Interest Income Interest and Fees on Loans $7,659 $7,044 $22,253 $19,407 Interest on Securities 757 577 2,070 1,598 Federal Funds Sold 22 124 383 293 Deposits in Other Banks 4 8 9 14 Total Interest Income 8,442 7,753 24,715 21,312 Interest Expense Deposits 4,296 3,607 12,857 9,276 Borrowed Funds 333 333 921 978 Total Interest Expense 4,629 3,940 13,778 10,254 Net Interest Income 3,813 3,813 10,937 11,058 Provision for Loan Losses 546 678 1,020 975 Net Interest Income After Provision for Loan Losses 3,267 3,135 9,917 10,083 Other Income Customer Service Fees 259 247 761 713 Mortgage Loan Broker Fees 78 54 140 135 Investment Services 99 66 198 66 Income from Bank Owned Life Insurance 89 51 257 151 Gain on Sale of Branch - 1,755 - 1,755 Other Income 29 32 99 110 Total Other Income 554 2,205 1,455 2,930 Noninterest Expense Salaries and Benefits 1,543 1,773 4,478 4,590 Occupancy and Equipment 447 357 1,286 1,029 Other Noninterest Expense 979 1,414 2,771 3,042 Total Noninterest Expense 2,969 3,544 8,535 8,661 Income Before Income Taxes 852 1,796 2,837 4,352 Income Taxes 247 648 860 1,559 Net Income $605 $1,148 $1,977 $2,793 Earnings Per Share Basic $0.16 $0.30 $0.52 $0.73 Diluted $0.15 $0.29 $0.50 $0.70 Weighted Average Shares Outstanding Basic 3,856,660 3,825,192 3,841,070 3,825,192 Diluted 3,940,105 3,963,896 3,945,242 3,964,123 Bank of the Carolinas Corporation Performance Ratios As of or for the Nine Months Ended Sept. 30, 2007 2006 Change* Financial Ratios Return On Average Assets ** 0.57% 0.92% (35)BP Return On Average Shareholders' Equity ** 6.84% 10.41% (357) Net Interest Margin ** 3.40% 3.87% (47) Asset Quality Ratios Net-chargeoffs to Average Loans ** 0.36% 0.20% 16 BP Nonperforming Loans To Total Loans 0.55% 0.78% (23) Nonperforming Assets To Total Assets 0.83% 0.87% (4) Allowance For Loan Losses To Total Loans 1.00% 1.12% (12) * 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- Oct/31/2007 17:28 GMT