BNC Bancorp Announces Earnings for First Quarter 2017

News provided by

BNC Bancorp

Apr 17, 2017, 16:05 ET

HIGH POINT, N.C., April 17, 2017 /PRNewswire/ -- BNC Bancorp (NASDAQ: BNCN) ("Company"), parent company for Bank of North Carolina ("Bank"), today reported financial results for the three months ended March 31, 2017.  Highlights for the first quarter of 2017 include the following:

  • Net income of $14.4 million, or $0.28 per diluted share, compared to $15.7 million, or $0.31 per diluted share, for fourth quarter of 2016
    • Return on average assets of 0.79%, compared to 0.87% for fourth quarter of 2016
    • Return on average tangible common equity of 9.66%, compared to 10.59% for fourth quarter of 2016

  • Operating net income of $22.8 million, or $0.44 per diluted share, compared to $21.8 million, or $0.43 per diluted share, for fourth quarter of 2016
    • Operating return on average assets of 1.25%, compared to 1.21% for fourth quarter of 2016
    • Operating return on average tangible common equity of 14.92%, compared to 14.50% for fourth quarter of 2016

  • Originated loans at March 31, 2017 of $3.92 billion, an increase of $275.4 million compared to December 31, 2016
    • Total portfolio loans of $5.62 billion at March 31, 2017, an increase of $165.2 million compared to December 31, 2016
    • Loan originations of $627 million, as compared to $535 million during the fourth quarter of 2016

  • Entered into Agreement and Plan of Merger with Pinnacle Financial Partners, Inc. ("Pinnacle")
    • Merger has received all necessary regulatory approvals
    • Shareholders will receive 0.5235 shares of Pinnacle's common stock for every share of the Company's common stock
    • Transaction expected to close end of second quarter or beginning of third quarter 2017, subject to shareholders' approval and other customary closing conditions

Financial Performance

Three Months Ended

INCOME SUMMARY

Mar. 31,
2017

Dec. 31,
2016

Sept. 30,
2016

Jun. 30,
2016

Mar. 31,
2016

Interest income

(Dollars and shares in thousands)

Interest and fees on loans

$  62,901

$  61,992

$  57,824

$  51,978

$   50,302

Investment securities

6,949

6,974

6,910

6,202

5,965

Other

321

305

291

228

214

Total interest income

70,171

69,271

65,025

58,408

56,481

Interest expense











Interest on deposits 

8,268

7,935

7,619

6,704

6,241

Interest on borrowings

1,935

2,009

1,989

1,774

1,750

Total interest expense

10,203

9,944

9,608

8,478

7,991

Net interest income

59,968

59,327

55,417

49,930

48,490

Provision for loan losses

1,222

1,455

1,865

698

647

Net interest income 

58,746

57,872

53,552

49,232

47,843

Non-interest income











Mortgage lending income

2,221

2,830

3,134

2,671

2,681

Service charges

2,874

2,937

2,644

2,422

2,321

Trust/wealth income

1,641

1,086

307

366

436

Insurance income

1,074

562

-

-

-

SBA income

495

579

739

1,104

811

Securities gains (losses)

-

6

34

4

(39)

Earnings on bank-owned life insurance

1,453

1,360

1,254

1,160

758

Other

4,708

2,336

1,699

1,288

994

Total non-interest income

14,466

11,696

9,811

9,015

7,962

Non-interest expense











Salaries and employee benefits

21,277

20,922

18,491

18,019

17,803

Occupancy 

3,327

3,622

3,154

3,155

3,252

Furniture and equipment

2,457

2,303

2,297

1,993

2,073

Data processing and supply 

2,067

1,805

1,766

1,491

1,437

Advertising and business development 

879

869

678

923

684

Insurance, professional and other services

1,540

1,309

1,424

1,494

1,526

FDIC insurance assessments

766

1,240

1,071

900

900

Loan, foreclosure and OREO

1,939

1,233

1,562

856

1,367

Transaction-related expenses 

13,294

9,121

2,568

3,808

1,434

Loss on extinguishment of debt

-

598

-

-

-

Other

5,252

4,543

4,824

4,201

4,410

Total non-interest expenses

52,798

47,565

37,835

36,840

34,886

Income before income tax expense

20,414

22,003

25,528

21,407

20,919

Income tax expense

5,983

6,312

7,388

6,760

6,484

Net income (GAAP)

14,431

15,691

18,140

14,647

14,435

Securities gains (losses), net of tax

-

4

21

4

(25)

Transaction-related charges, net of tax

8,375

5,746

1,618

2,399

903

Loss on extinguishment of debt, net of tax

-

377

-

-

-

Operating net income (non-GAAP)

$  22,806

$  21,810

$  19,736

$  17,042

$   15,363













Common shares outstanding 

52,222

52,177

48,110

45,201

40,806

Weighted average diluted shares outstanding

52,357

50,852

47,360

41,560

40,885

Performance Ratios

Three Months Ended


Mar. 31,
2017

Dec. 31,
2016

Sept. 30,
2016

Jun. 30,
2016

Mar. 31,
2016

Earnings per diluted share 

$    0.28

$    0.31

$    0.38

$    0.35

$    0.35

Return on average assets 

0.79%

0.87%

1.10%

1.00%

1.03%

Return on average common equity

6.46%

7.22%

9.40%

9.43%

9.72%

Return on average tangible common equity (1)

9.66%

10.59%

13.37%

13.29%

13.71%

Efficiency ratio (2)

68.86%

65.02%

56.09%

60.51%

59.78%











Operating earnings per diluted share (1)

$    0.44

$    0.43

$    0.42

$    0.41

$    0.38

Operating return on average assets (1)

1.25%

1.21%

1.20%

1.16%

1.10%

Operating return on average tangible common equity (1)

14.92%

14.50%

14.50%

15.36%

14.55%

Operating efficiency ratio (1) (2)

51.53%

51.74%

52.31%

54.26%

57.28%











Book value per common share

$  17.55

$  17.29

$  16.53

$  15.86

$  14.79

Tangible book value per common share (1)

12.59

12.29

12.21

11.28

11.07


(1)

See Reconciliation of Non-GAAP Financial Measures for additional details.

(2)

Calculated on a fully-taxable equivalent ("FTE") basis.

Other Selected Financial Data

Three Months Ended


Mar. 31,
2017

Dec. 31,
2016

Sept. 30,
2016

Jun. 30,
2016

Mar. 31,
2016


 (Dollars in thousands) 

 Securities gains (losses), net 

$

-

$

6

$

34

$

4

$

(39)

 Loss on extinguishment of debt 

-

598

-

-

-

 Fair value accretion 

6,269

5,841

5,845

5,276

5,505

 OREO valuation adjustments, net  

40

503

274

222

266

 Transaction-related expenses 

13,294

9,121

2,568

3,808

1,434

Richard D. Callicutt, II, President and CEO, stated, "We are extremely pleased to report record operating results for the first quarter of 2017.  During the quarter, after adjusting for all the transaction-related expenses, operating earnings increased a healthy 48.4% from year ago levels, while operating earnings per share increased 15.8% to $0.44.  Operating return on average assets was a healthy 1.25%, up slightly from the prior quarter, while operating return on average tangible common equity increased slightly to 14.92%.

As you are aware, during the quarter we announced a strategic partnership with Pinnacle Financial Partners headquartered in Nashville, Tennessee.  We believe this partnership will create one of the highest performing regional banks in the U.S., and reward both sets of shareholders as we implement the best of each company across one of the most geographically appealing footprints in our industry.  To date we have received all necessary regulatory approvals providing further evidence of the good-standing and financial health of both companies.  Since the announcement, the level of mutual respect and collaboration between the functional leaders of our two companies has been exceptional, and provides additional confidence that the integration efforts will result in a smooth transition for our customers and communities.

On a personal note, myself and nine others from our organization recently spent three days in Nashville going through a new associate orientation led by Terry Turner, the Pinnacle CEO, and supported by his executive team.  After this experience, I am more confident than ever that our decision to join with Pinnacle was clearly the correct decision for our organization.  It also made it obviously apparent why Pinnacle consistently is voted as one of the Best Places to Work in the US, as well as one of the most trustworthy and easiest places to do business."

Non-interest Income and Expense Data

Three Months Ended



Mar. 31,
2017

Dec. 31,
2016

Sept. 30,
2016

Jun. 30,
2016

Mar. 31,
2016

Non-interest income

(Dollars in thousands)


Mortgage lending income

$  2,221

$  2,830

$  3,134

$  2,671

$  2,681


Service charges

2,874

2,937

2,644

2,422

2,321


Trust/wealth income

1,641

1,086

307

366

436


Insurance income

1,074

562

-

-

-


SBA income

495

579

739

1,104

811


Earnings on bank-owned life insurance

1,453

1,360

1,254

1,160

758


Other

4,708

2,336

1,699

1,288

994

Total operating non-interest income - non-GAAP

14,466

11,690

9,777

9,011

8,001


Securities gains (losses), net

-

6

34

4

(39)

Total non-interest income - GAAP

$14,466

$11,696

$  9,811

$  9,015

$  7,962















Non-interest expense












Salaries and employee benefits

$21,277

$20,922

$18,491

$18,019

$17,803


Occupancy 

3,327

3,622

3,154

3,155

3,252


Furniture and equipment

2,457

2,303

2,297

1,993

2,073


Data processing and supply 

2,067

1,805

1,766

1,491

1,437


Advertising and business development 

879

869

678

923

684


Insurance, professional and other services

1,540

1,309

1,424

1,494

1,526


FDIC insurance assessments

766

1,240

1,071

900

900


Loan, foreclosure and OREO

1,939

1,233

1,562

856

1,367


Other

5,252

4,543

4,824

4,201

4,410

Total operating non-interest expense - non-GAAP

39,504

37,846

35,267

33,032

33,452


Transaction-related expenses 

13,294

9,121

2,568

3,808

1,434


Loss on extinguishment of debt

-

598

-

-

-

Total non-interest expense - GAAP

$52,798

$47,565

$37,835

$36,840

$34,886















Total GAAP and operating non-interest income was $14.5 million for the first quarter of 2017, an increase from $11.7 million for the fourth quarter of 2016.  The increase in non-interest income was primarily due increased income from trust/wealth services and insurance services, which were slightly offset by a seasonal decrease in mortgage lending income.  The Company also recorded an increase in recoveries on previously charged-off acquired loans.  Certain sources of our non-interest income are volatile and can vary significantly from period to period. 

Total GAAP non-interest expense was $52.8 million for the first quarter of 2017, an increase from $47.6 million for the fourth quarter of 2016.  The results for the first quarter of 2017 include $13.3 million of transaction-related expenses, compared to $9.1 million recorded during the fourth quarter of 2016.  Excluding non-core charges, operating non-interest expense for the first quarter of 2017 was $39.5 million, an increase compared to $37.8 million for the fourth quarter of 2016.  This increase was due to the full quarter impact of the additional headcount and facilities obtained from the High Point Bank Corporation ("High Point") acquisition during the fourth quarter of 2016, as well as $0.5 million of losses on the sale of other real estate owned ("OREO"), compared to $0.4 million of gain on sale of OREO during the fourth quarter of 2016.  

Selected Balance Sheet Data

 Ending Balance 


 Mar. 31,
2017 

 Dec. 31,
2016 

 Sept. 30,
2016 

 Jun. 30,
2016 

 Mar. 31,
2016 

 Portfolio loans: 

 (Dollars in thousands) 

    Originated loans 

$ 3,921,065

$ 3,645,687

$ 3,455,677

$ 3,163,357

$ 2,847,466

    Acquired loans 

1,699,802

1,810,023

1,540,270

1,649,328

1,390,688

    Allowance for loan and lease losses 

(39,365)

(37,501)

(36,366)

(33,841)

(32,548)

 Portfolio loans, net 

5,581,502

5,418,209

4,959,581

4,778,844

4,205,606

 Loans held for sale 

23,453

43,731

40,441

41,703

33,455

 Investment securities 

893,000

896,786

838,289

803,058

757,248

 Total interest-earning assets 

6,762,077

6,589,774

6,128,554

5,790,893

5,126,452

 Goodwill 

234,769

234,769

189,968

188,220

134,686

 Other intangible assets, net 

24,372

25,911

17,852

19,014

17,143

 Total assets 

7,575,342

7,401,691

6,801,562

6,478,373

5,699,573











 Deposits: 









    Non-interest bearing deposits 

1,191,024

1,113,878

917,521

889,254

794,548

    Interest-bearing demand and savings 

3,527,613

3,405,036

3,080,479

2,652,735

2,431,584

    Time deposits 

1,597,254

1,564,063

1,652,123

1,814,654

1,537,644

 Total deposits 

6,315,891

6,082,977

5,650,123

5,356,643

4,763,776

 Borrowings 

287,516

369,952

310,609

352,119

282,929

 Total interest-bearing liabilities 

5,412,383

5,339,051

5,043,211

4,819,508

4,252,157

 Shareholders' equity: 









    Common equity 

913,180

900,044

786,625

710,300

598,158

    Accumulated other comprehensive income 

3,458

1,838

8,587

6,761

5,395

 Total shareholders' equity 

916,638

901,882

795,212

717,061

603,553

Total assets at March 31, 2017 were $7.58 billion, an increase of 2.4% as compared to total assets of $7.40 billion at December 31, 2016.  Total portfolio loans were $5.62 billion at March 31, 2017, an increase of 3.0% from $5.46 billion at December 31, 2016.  Loans that were originated by the Company increased by $275.4 million, or 7.6%, during the first quarter of 2017. 

Total deposits were $6.32 billion at March 31, 2017, an increase of $232.9 million, or 3.8%, as compared to December 31, 2016.  While the majority of the increase was in core deposits, the Company increased wholesale funding and used the proceeds to repay short-term debt during the first quarter of 2017.  Wholesale deposits comprised 21.3% of total deposits at March 31, 2017, which is consistent with the funding mix as of December 31, 2016.  Total borrowings were $287.5 million at March 31, 2017, a decrease of 22.3% compared to $370.0 million at December 31, 2016.  Total shareholders' equity was $916.6 million at March 31, 2017, an increase compared to $901.9 million at December 31, 2016.  At March 31, 2017, both the Bank's and Company's capital ratios exceeded the minimum thresholds established for a well-capitalized bank by regulatory measures. 

Loan Portfolio Composition

 Ending Balance 


 Mar. 31,
2017 

 Dec. 31,
 2016 

 Sept. 30,
2016 

 Jun. 30,
2016 

 Mar. 31,
2016 


 (Dollars in millions) 

Residential construction

$           125

$           115

$           104

$             98

$             76

     Presold

67

58

62

59

39

     Speculative

58

57

42

39

37











Commercial construction

467

401

285

294

278

Residential and commercial A&D

51

42

39

33

23











Land

117

120

118

126

118

     Residential buildable lots

51

51

44

44

39

     Commercial buildable lots

22

23

24

24

21

     Land held for development

23

26

23

31

34

     Raw and agricultural land

21

20

27

27

24











Commercial real estate

2,964

2,917

2,705

2,500

2,257

     Multi-family

223

213

240

203

179

     Farmland

4

3

3

4

4

     Owner occupied

874

884

787

817

705

     Non-owner occupied

1,863

1,817

1,675

1,476

1,369











Commercial and industrial

512

482

443

454

400

Residential mortgage

1,330

1,326

1,251

1,258

1,039

Consumer

24

24

22

21

18

Leases

31

29

29

29

29

Total portfolio loans

$        5,621

$        5,456

$        4,996

$        4,813

$        4,238











Acquired Loan Summary

 Ending Balance 


 Mar. 31,
2017 

 Dec. 31,
 2016 

 Sept. 30,
2016 

 Jun. 30,
2016 

 Mar. 31,
2016 


(Dollars in thousands)

Performing acquired loans

$  1,602,124

$  1,710,008

$  1,432,351

$  1,537,650

$  1,278,965

Less: remaining FMV adjustments

(23,864)

(27,846)

(21,687)

(25,630)

(23,359)

   Performing acquired loans, net

1,578,260

1,682,162

1,410,664

1,512,020

1,255,606

   FMV adjustment %

1.5%

1.6%

1.5%

1.7%

1.8%











Purchase credit impaired loans (PCI)

134,897

143,530

143,494

152,105

148,459

Less: remaining FMV adjustments

(13,355)

(15,669)

(13,888)

(14,797)

(13,377)

   PCI loans, net

121,542

127,861

129,606

137,308

135,082

   FMV adjustment %

9.9%

10.9%

9.7%

9.7%

9.0%











Total acquired performing loans

$  1,578,260

$  1,682,162

$  1,410,664

$  1,512,020

$  1,255,606

Total acquired PCI loans

121,542

127,861

129,606

137,308

135,082

Total acquired loans

$  1,699,802

$  1,810,023

$  1,540,270

$  1,649,328

$  1,390,688

   FMV adjustment % all acquired loans

2.2%

2.3%

2.3%

2.4%

2.6%

Asset Quality

 Ending Balance 


 Mar. 31,
2017 

 Dec. 31,
 2016 

 Sept. 30,
2016 

 Jun. 30,
2016 

 Mar. 31,
2016 


 (Dollars in thousands) 

Nonaccrual loans - non-acquired

$      9,315

$      6,647

$      7,662

$      5,407

$      6,228

Nonaccrual loans - acquired

9,464

7,989

9,347

11,756

12,706

OREO - non-acquired

12,397

13,109

13,352

15,806

14,987

OREO - acquired

12,587

13,380

14,696

14,708

15,783

90 days past due - non-acquired

-

115

10

10

-

90 days past due - acquired

-

-

-

-

-

Total nonperforming assets

$    43,763

$    41,240

$    45,067

$    47,687

$    49,704











Total nonperforming assets - non-acquired

$    21,712

$    19,871

$    21,024

$    21,223

$    21,215











Net charge-offs (recoveries), QTD

$       (642)

$         320

$        (660)

$        (594)

$        (202)

Annualized net charge-offs (recoveries) to total average
portfolio loans

-0.05%

0.02%

-0.05%

-0.05%

-0.02%











Ratio of total nonperforming assets to total assets

0.58%

0.56%

0.66%

0.74%

0.87%

Ratio of total nonperforming loans to total portfolio loans

0.33%

0.27%

0.34%

0.36%

0.45%

Ratio of total allowance for loan losses to total portfolio loans

0.70%

0.69%

0.73%

0.70%

0.77%











Excluding acquired 









Ratio of nonperforming assets to loans and OREO

0.55%

0.54%

0.61%

0.67%

0.74%

Ratio of nonperforming loans to loans

0.24%

0.19%

0.22%

0.17%

0.22%

Ratio of allowance for loan losses to loans

0.93%

0.95%

0.97%

0.98%

1.03%

Total nonperforming assets at March 31, 2017 were $43.8 million, or 0.58% of total assets, as compared to $41.2 million, or 0.56% of total assets, at December 31, 2016.  Excluding nonperforming assets acquired by the Company, nonperforming assets were $21.7 million, or 0.55% of non-acquired loans and OREO, at March 31, 2017, as compared to $19.9 million, or 0.54% of non-acquired loans and OREO, at December 31, 2016.  Non-accrual loans increased from $14.6 million at December 31, 2016 to $18.8 million at March 31, 2017, which was primarily due to a larger quantity of smaller dollar loans being reclassified to non-accrual. 

The Company experienced $0.6 million of net recoveries during the first quarter of 2017, compared to net charge-offs of $0.3 million during the fourth quarter of 2016.  Gross charge-offs were $0.4 million during the first quarter of 2017, a decrease compared to gross charge-offs of $1.2 million during the fourth quarter of 2016.

The allowance for loan losses was $39.4 million at March 31, 2017, an increase from $37.5 million at December 31, 2016.  The Company recorded a provision for loan losses of $1.2 million during the first quarter of 2017, compared to $1.5 million recorded during the fourth quarter of 2016, as the Company continues to experience strong growth in the originated loan portfolio.

Net Interest Income and Margin

Three Months Ended


 Mar. 31,
2017 

 Dec. 31,
2016 

 Sept. 30,
2016 

 Jun. 30,
2016 

 Mar. 31,
2016 

Quarterly average balances:

(Dollars in thousands)

    Loans 

$ 5,576,676

$ 5,410,066

$ 4,893,926

$ 4,437,248

$ 4,241,970

    Investment securities 

892,091

835,235

828,144

760,841

737,361

    Interest-bearing balances and other 

153,225

181,678

147,763

134,923

139,367

    Total interest-earning assets 

6,621,992

6,426,979

5,869,833

5,333,012

5,118,698

    Deposits: 










      Non-interest bearing 

1,126,691

1,056,507

907,344

825,148

778,114

      Interest-bearing 

5,005,002

4,862,443

4,475,901

4,138,466

3,953,668

    Total deposits 

6,131,693

5,918,950

5,383,245

4,963,614

4,731,782

    Borrowed funds 

302,798

315,828

321,218

272,374

262,880

    Total interest-bearing liabilities 

5,307,800

5,178,271

4,797,119

4,410,840

4,216,548

    Shareholders' equity 

905,594

864,656

768,124

625,021

597,127












Interest Income/Expense:










   Loans

$      62,901

$      61,992

$      57,824

$      51,978

$     50,302

   Investment securities, tax

3,144

3,352

3,113

2,908

2,720

   Investment securities, non-tax (1)

6,040

5,749

6,027

5,229

5,151

   Interest-bearing balances and other 

321

305

291

228

214

   Total interest income (1)

72,406

71,398

67,255

60,343

58,387

   Deposits

8,268

7,935

7,619

6,704

6,241

   Borrowings

1,935

2,009

1,989

1,774

1,750

   Total interest expense

10,203

9,944

9,608

8,478

7,991

   Net interest income (1)

$      62,203

$      61,454

$      57,647

$      51,865

$     50,396












Average Yields and Costs:










   Loans

4.57%

4.56%

4.70%

4.71%

4.77%

   Investment securities, tax

3.01%

2.96%

2.93%

3.01%

2.94%

   Investment securities, non-tax (1)

5.16%

5.11%

5.91%

5.65%

5.68%

   Interest-bearing balances and other 

0.85%

0.67%

0.78%

0.68%

0.62%

   Total interest-earning assets (1)

4.43%

4.42%

4.56%

4.55%

4.59%

   Total interest-bearing deposits

0.67%

0.65%

0.68%

0.65%

0.63%

   Borrowed funds

2.59%

2.53%

2.46%

2.62%

2.68%

   Total interest-bearing liabilities

0.78%

0.76%

0.80%

0.77%

0.76%

   Cost of funds

0.64%

0.63%

0.67%

0.65%

0.64%

   Net interest margin (1)

3.81%

3.80%

3.91%

3.91%

3.96%

(1) Calculated on a FTE basis.

FTE net interest income for the first quarter of 2017 was $62.2 million, an increase from $61.5 million for the fourth quarter of 2016.  FTE net interest margin was 3.81% for the first quarter of 2017, a slight increase compared to 3.80% for the fourth quarter of 2016.  The average yield on interest-earning assets increased one basis point to 4.43% for the first quarter of 2017, while the rate paid on interest-bearing liabilities increased by two basis points to 0.67%.  Accretion earned on the Company's acquired loan portfolio was $6.3 million during the first quarter of 2017, an increase compared to $5.8 million recorded during the fourth quarter of 2016.  Excluding accretion, the average yield on loans was 4.12% for the first quarter of 2017, as compared to 4.13% for the fourth quarter of 2016. 

Average interest-earning assets for the first quarter of 2017 were $6.62 billion, an increase from $6.43 billion for the fourth quarter of 2016.  The increase was primarily due to the full quarter impact of the acquisition of High Point, as well as continued organic loan growth throughout our existing markets.  Average interest-bearing liabilities were $5.31 billion for the first quarter of 2017, an increase from $5.18 billion during the fourth quarter of 2016.   This increase was primarily in interest-bearing deposits, which increased $142.6 million during the first quarter of 2017.

About BNC Bancorp and Bank of North Carolina

Headquartered in High Point, North Carolina, BNC Bancorp is the parent company of Bank of North Carolina d/b/a BNC Bank, a commercial bank with total assets of $7.58 billion.  Bank of North Carolina provides a complete line of banking and financial services to individuals and businesses through its 76 current banking offices in Virginia, North and South Carolina.  Bank of North Carolina is insured by the FDIC and is an equal housing lender.  BNC Bancorp's stock is traded and quoted in the Nasdaq Capital Market under the symbol "BNCN."  The Company's website is www.bncbancorp.com.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States.  BNC Bancorp's management uses these "non-GAAP" financial measures in its analysis of the Company's performance.  Management believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods as well as demonstrating the effects of significant gains and charges in the current period. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. See the attached tabular disclosures for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure.

Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as "may," "could," "should," "will," "would," "believe," "anticipate," "estimate," "project," "expect," "intend," "plan," or words or phases of similar meaning. Forward-looking statements may include, among other things, statements about the Company's confidence in its strategies and its expectations about financial performance, market growth, market and regulatory trends and developments, acquisitions and divestitures, new technologies, services and opportunities and earnings. The forward-looking statements are based largely on the Company's expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company's control. The Company undertakes no obligation to publicly update any forward-looking statement to reflect developments occurring after the statement is made, except as otherwise required by law.  Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements as a result of, among other factors, the risks and uncertainties described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2016.  Please refer to the SEC's website at www.sec.gov where you can review this document. 

Reconciliation of Non-GAAP Financial Measures

Three Months Ended


 Mar. 31,
2017 

 Dec. 31,
2016 

 Sept. 30,
2016 

 Jun. 30,
2016 

 Mar. 31,
2016 

Operating Earnings per Share, Diluted (1)

(Dollars in thousands)

Net income (GAAP)

$      14,431

$      15,691

$      18,140

$      14,647

$      14,435

Transaction-related expenses, net of tax

8,375

5,746

1,618

2,399

903

Loss on extinguishment of debt, net of tax

-

377

-

-

-

Securities gains (losses), net of tax

-

4

21

4

(25)

Operating earnings (non-GAAP)

22,806

21,810

19,736

17,042

15,363

Weighted average fully diluted shares outstanding

52,357

50,852

47,360

41,560

40,885

Operating earnings per share, diluted (non-GAAP)

$          0.44

$          0.43

$          0.42

$          0.41

$          0.38











Tangible Common Book Value per Share (2)









Shareholders' equity (GAAP)

$    916,638

$    901,882

$    795,212

$    717,061

$    603,553

Intangible assets

259,141

260,680

207,820

207,234

151,829

Tangible common shareholders equity (non-GAAP)

657,497

641,202

587,392

509,827

451,724

Common shares outstanding

52,222

52,177

48,110

45,201

40,806

Tangible common book value per share (non-GAAP)

$        12.59

$        12.29

$        12.21

$        11.28

$        11.07











Return on Average Tangible Common Equity (2)









Net income (GAAP)

$      14,431

$      15,691

$      18,140

$      14,647

$      14,435

Amortization of intangibles, net of tax

963

888

732

748

728.28

Tangible net income available to common shareholders (non-GAAP)

15,394

16,579

18,872

15,395

15,163

Average common shareholders equity

905,594

864,656

768,124

625,021

597,127

Average intangible assets

259,466

241,802

206,653

159,184

152,379

Average tangible common shareholders' equity (non-GAAP)

646,128

622,854

561,471

465,837

444,748

Return on average tangible common equity (non-GAAP)

9.66%

10.59%

13.37%

13.29%

13.71%











Operating Return on Average Assets (1)









Net income (GAAP)

$      14,431

$      15,691

$      18,140

$      14,647

$      14,435

Transaction-related expenses, net of tax

8,375

5,746

1,618

2,399

903

Loss on extinguishment of debt, net of tax

-

377

-

-

-

Securities gains (losses), net of tax

-

4

21

4

(25)

Operating earnings (non-GAAP)

$      22,806

$      21,810

$      19,736

$      17,042

$      15,363

Average assets

7,391,231

7,158,393

6,532,517

5,908,341

5,635,137

Operating return on average assets (non-GAAP)

1.25%

1.21%

1.20%

1.16%

1.10%











Operating Return on Average Tangible Common Equity (2)









Net income (GAAP)

$      14,431

$      15,691

$      18,140

$      14,647

$      14,435

Amortization of intangibles, net of tax

963

888

732

748

728

Transaction-related expenses, net of tax

8,375

5,746

1,618

2,399

903

Loss on extinguishment of debt, net of tax

-

377

-

-

-

Securities gains (losses), net of tax

-

4

21

4

(25)

Operating tangible net income (non-GAAP)

$      23,769

$      22,698

$      20,468

$      17,790

$      16,091

Average common shareholders equity

905,594

864,656

768,124

625,021

597,127

Average intangible assets

259,466

241,802

206,653

159,184

152,379

Average tangible common shareholders' equity (non-GAAP)

646,128

622,854

561,471

465,837

444,748

Operating return on average tangible common equity (non-GAAP)

14.92%

14.50%

14.50%

15.36%

14.55%











Operating Efficiency Ratio (3)









Non-interest expense (GAAP)

$      52,798

$      47,565

$      37,835

$      36,840

$      34,886

Transaction-related expenses

13,294

9,121

2,568

3,808

1,434

Loss on extinguishment of debt

-

598

-

-

-

Operating non-interest expense (non-GAAP)

39,504

37,846

35,267

33,032

33,452

Net interest income, FTE

62,203

61,454

57,647

51,865

50,396

Non-interest income - GAAP

14,466

11,696

9,811

9,015

7,962

Securities gains (losses), net

-

6

34

4

(39)

Operating efficiency ratio (non-GAAP)

51.53%

51.74%

52.31%

54.26%

57.28%













(1)

Operating earnings per diluted share, operating non-interest income, operating non-interest expense, operating income tax expense, operating return on average assets, and operating return on average tangible common equity are non-GAAP financial measures and exclude the after-tax effect of transaction-related charges, loss on extinguishment of debt, securities gains (losses) and other one-time charges.  Management believes that these non-GAAP performance measures provide additional useful information that allows readers to evaluate the ongoing performance of the company.

(2)

The tangible measures are non-GAAP financial measures and exclude the effect of period end or average balance of intangible assets.  Management believes that these non-GAAP tangible measures provide additional useful information, particularly since these measures are widely used by industry analysts for companies with prior merger and acquisition activities. 

(3)

Operating efficiency ratio is calculated by non-interest expense, excluding transaction-related expenses, and loss on extinguishment of debt, divided by the sum of FTE net interest income and non-interest income excluding securities gains (losses).  Management believes this non-GAAP operating measure provides additional useful information that allows readers to evaluate the ongoing performance of the company.

SOURCE BNC Bancorp

Related Links

http://www.bncbanking.com

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

icon3
440k+
Newsrooms &
Influencers
icon1
9k+
Digital Media
Outlets
icon2
270k+
Journalists
Opted In
GET STARTED