Bank of the Carolinas Corporation Reports Fourth Quarter and Full Year Financial Results
MOCKSVILLE, N.C., Feb. 11 /PRNewswire-FirstCall/ -- Bank of the Carolinas Corporation (Nasdaq: BCAR) reported today financial results for the three-month period and year ended December 31, 2009.
For the three-month period ended December 31, 2009, the Company incurred a net loss of $1,778,000, as compared to a net loss of $640,000 in the fourth quarter of 2008. The net loss available to common shareholders for the three months ended December 31, 2009 was $2,004,000, or $.51 per common share, compared to a net loss per share of $.16 in the final quarter of 2008.
For the year ended December 31, 2009, the Company reported a net loss of $3,130,000 compared to a net loss of $3,624,000 for 2008. The net loss available to common shareholders for 2009 was $3,767,000, or $.97 per common share, compared to a net loss of $.92 for 2008.
The economic downturn, which began in late 2007, continues to adversely affect the Company's operating results manifested by much higher than normal loan loss provisions and costs associated with foreclosed real estate for the second consecutive year. These costs were partially mitigated in the 2009 calendar year by improved interest margins, driven by lower funding costs, and gains from sales of securities.
Net interest income, the Company's principal source of revenue, totaled $4.4 million in the fourth quarter of 2009, a 33.1% increase from the comparable 2008 quarter. For the year of 2009 net interest income was $14.7 million, a 15.6% increase over 2008. These positive results were due to increased interest margins principally brought about by reduced cost of interest-bearing deposits.
As of December 31, 2009, the Company's nonperforming assets totaled $17.4 million and consisted of $9.2 million in nonperforming loans and $8.2 million in foreclosed properties and other real estate owned. Nonperforming assets amounted to 2.86% of total assets at that date. The year-end 2009 level compares to nonperforming assets totaling $15.5, or 2.33% of total assets as of September 30, 2009 and $12.3 million, or 2.20% of total assets at December 31, 2008.
The provision for loan losses totaled $3,081,000 for the quarter ended December 31, 2009, an increase of 50.6% from the provision of $2,046,000 for the fourth quarter of 2008. For the year ended December 31, 2009, the loan loss provision totaled $5,547,000, a decline of 11.8% from the $6,291,000 provision recorded in 2008. The allowance for loan losses was 2.09% of total loans as of December 31, 2009, and net charge-offs for the current year represented .92% of average loans outstanding. While 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.
Noninterest expenses totaled $4.7 million for the fourth quarter of 2009, an increase of 9.1% from the comparable quarter of 2008. For the year ended December 31, 2009, noninterest expenses totaled $17.5 million, an increase of 15.8% from 2008. The most significant drivers in the cost increase for 2009 were substantially higher costs related to FDIC insurance due to the increased assessment rate levied on all banks, significantly higher costs related to ownership and disposal of other real estate, and substantial increases in expenses for data processing and professional services. Offsetting a portion of the above described increases in 2009 noninterest expenses was the absence of any goodwill impairment charge, which amounted to $591,000 in 2008. Noninterest income, exclusive of securities gains, remained relatively flat for the fourth quarter and full year of 2009 compared to 2008.
Total assets at December 31, 2009 amounted to $610.4 million, an increase of 8.6% when compared to the $562.0 million as of December 31, 2008. Loans totaled $391.3 million at December 31, 2009, a decline of 3.5% from a year earlier while deposits grew 11.1% over the prior year to $493.9 million.
The Company continues to be well-capitalized with a Tier 1 Leverage Ratio of 7.27%, a Tier 1 capital to risk-weighted assets ratio of 9.86% and a Total Capital to risk-weighted assets ratio of 11.67% as of December 31, 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: |
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Michael D. Larrowe |
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Chief Financial Officer |
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Bank of the Carolinas |
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(336) 998-1799 x 171 |
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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)
December 31,
------------
2009 2008
---- ----
Assets:
Cash and due from banks, noninterest-bearing $3,524 $8,271
Temporary investments 33,835 2,220
Investment securities 140,004 113,139
Loans 391,265 405,402
Less, allowance for loan losses (8,167) (6,308)
------ ------
Total loans, net 383,098 399,094
Premises and equipment, net 14,010 15,324
Other real estate owned 8,233 5,622
Bank owned life insurance 10,010 9,645
Accrued interest receivable 2,397 3,039
Other assets 15,276 5,653
------ -----
Total Assets $610,387 $562,007
======== ========
Liabilities:
Noninterest bearing demand deposits $36,418 $27,507
Interest bearing demand deposits 34,614 28,172
Savings deposits 11,042 21,903
Money Market deposits 224,499 210,379
Time deposits 187,344 156,579
------- -------
Total deposits 493,917 444,540
Securities sold under repurchase
agreements 46,682 46,557
Federal home loan bank advances 15,000 25,000
Subordinated debt 7,855 7,855
Other liabilities 1,941 1,464
----- -----
Total Liabilities 565,395 525,416
------- -------
Shareholders' Equity:
Preferred stock, no par value 13,179 -
Discount on preferred stock (1,245) -
Common stock, $5 par value per share 19,486 19,456
Additional paid-In capital 12,978 11,625
Retained earnings 300 4,067
Accumulated other comprehensive income 294 1,443
--- -----
Total Shareholders' Equity 44,992 36,591
------ ------
Total Liabilities and Shareholders' Equity $610,387 $562,007
======== ========
Preferred shares authorized 3,000,000 3,000,000
Preferred shares issued and outstanding 13,179 -
Common shares authorized 15,000,000 15,000,000
Common shares issued and outstanding 3,897,174 3,891,174
Book value per common share $8.16 $9.40
===== =====
Bank of the Carolinas Corporation
Consolidated Statements of Income
(In thousands except share and per share data)
(Unaudited) Three months ended Year ended
December 31 December 31
--------------------- -------------------
2009 2008 2009 2008
---- ---- ---- ----
Interest income
Interest and fees
on loans $5,781 $6,314 $23,685 $26,276
Interest on securities 1,321 1,453 5,860 4,091
Other interest income 20 27 76 208
--- --- --- ---
Total interest income 7,122 7,794 29,621 30,575
----- ----- ------ ------
Interest expense
Interest on deposits 2,025 3,661 11,868 15,619
Interest on borrowed
funds 723 847 3,087 2,265
--- --- ----- -----
Total interest
expense 2,748 4,508 14,955 17,884
----- ----- ------ ------
Net interest income 4,374 3,286 14,666 12,691
Provision for loan
Losses 3,081 2,046 5,547 6,291
----- ----- ----- -----
Net interest income
after provision for
loan losses 1,293 1,240 9,119 6,400
----- ----- ----- -----
Noninterest income
Customer service
charges and fees 316 308 1,335 1,413
Increase in cash
value of life
insurance 93 89 365 362
Gains on securities, net 189 615 1,530 615
Other income 36 8 67 70
--- --- --- ---
Total noninterest
income 634 1,020 3,297 2,460
--- ----- ----- -----
Noninterest expense
Salaries and benefits 2,081 1,725 7,040 7,054
Occupancy and equipment 574 539 2,221 2,021
FDIC insurance expense 573 87 1,505 327
Valuation provisions and
net operating costs
associated with
foreclosed real estate 140 902 1,899 1,117
Goodwill impairment
charge - - - 591
Data processing expense 257 200 1,042 843
Other noninterest
expenses 1,072 853 3,807 3,165
----- --- ----- -----
Total noninterest
expenses 4,697 4,306 17,514 15,118
----- ----- ------ ------
Income (loss) before
income taxes (2,770) (2,046) (5,098) (6,258)
Provision for income
Taxes (992) (1,406) (1,968) (2,634)
---- ------ ------ ------
Net income (loss) $(1,778) $(640) $(3,130) $(3,624)
Dividends and
accretion on
preferred stock (226) - (637) -
---- --- ---- ---
Net income (loss)
available to common
shareholders $(2,004) $(640) $(3,767) $(3,624)
======= ===== ======= =======
Earnings (loss)
per common share:
Basic $(0.51) $(0.16) $(0.97) $(0.92)
Diluted $(0.51) $(0.16) $(0.97) $(0.92)
Weighted Average
Common Shares
Outstanding:
Basic 3,897,174 3,891,174 3,894,314 3,928,911
Diluted 3,897,174 3,891,174 3,894,314 3,928,911
Bank of the Carolinas Corporation
Other Financial Data
(Dollars in thousands except per share data)
As of or for the As of or for the
three months ended year ended
December 31 December 31
------------------------ -----------------------
2009 2008 Change* 2009 2008 Change*
---- ---- ------- ---- ---- -------
Average balance
sheet data
Average
Loans $391,574 $407,178 (3.83)% $401,511 $405,951 (1.09)%
Average
earning
assets 592,150 523,731 13.06 573,018 496,308 15.46
Average total
assets 641,095 564,883 13.49 624,508 534,233 16.90
Average common
shareholders'
equity $34,669 $36,901 (6.05)% $35,625 $37,806 (5.77)%
Financial ratios
Return on
average
assets** (1.10)% (0.45)% (65) bps (0.50) (0.68)% 18 bps
Return on
average common
shareholders'
equity ** (22.93) (6.90) (1,603) (10.57) (9.59) (98)
Net interest
margin ** 2.93% 2.50% 43 bps 2.56 2.56% - bps
Asset quality
indicators
Net loan
charge-offs $1,111 $(44) n/m % 3,688 4,228 (12.77)%
Total
nonperforming
loans 9,224 6,717 37.32 9,224 6,717 37.32
Total
nonperforming
assets $17,457 $12,339 41.48% 17,457 12,339 41.48%
Asset quality
ratios
Net charge offs
(recoveries)
to average
loans ** 1.13% (0.04)% 117 bps 0.92% 1.04% (12) bps
Nonperforming
loans to total
loans 2.36 1.66 70 2.36 1.66 70
Nonperforming
assets to
total assets 2.86 2.20 66 2.86 2.20 66
Allowance for
loan losses to
total loans 2.09% 1.56% 53 bps 2.09% 1.56% 53 bps
Per share amounts
available to
common
shareholders
Basic earnings
(loss) per
common share $(0.51) $(0.16) (218.75)% $(0.97) $(0.92) (5.43)%
Diluted
earnings
(loss) per
common share (0.51) (0.16) (218.75) $(0.97) $(0.92) (5.43)
Book value per
common share $8.16 $9.40 (13.19)% $8.16 $9.40 (13.19)%
* bps denotes basis points.
** ratio annualized.
SOURCE Bank of the Carolinas Corporation
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