DUNN, N.C., April 29, 2020 (GLOBE NEWSWIRE) -- Select Bancorp, Inc. (NASDAQ: SLCT) (the “Company”), the holding company for Select Bank & Trust Company, today reported net income for the quarter ended March 31, 2020 of $1.1 million with basic and diluted earnings per share of $0.06, compared to net income of $3.3 million with basic and diluted earnings per share of $0.17 for the comparative quarter ended March 31, 2019. The decrease in net income in the first quarter of 2020 compared to 2019 was primarily attributable to $389,000 of expenses associated with new branches in Cornelius, North Carolina (the Charlotte area), Holly Springs, North Carolina (the Raleigh area) and Virginia Beach, Virginia and an increase of the provision for credit losses of $2.3 million due to unprecedented changes in certain economic indicators as a result of the COVID-19 pandemic.
Total assets, deposits, and gross loans for the Company as of March 31, 2020 were $1.3 billion, $982.7 million, and $1.0 billion, respectively, compared to total assets of $1.2 billion, total deposits of $951.0 million, and total loans of $991.8 million as of the same date in 2019.
Comments of the Chief Executive Officer and Other Matters
William Hedgepeth, President and Chief Executive Officer stated, “Overall, we were pleased with our first-quarter earnings and the continued franchise growth from the implementation of our strategic initiatives. However, the end of the quarter was punctuated by arrival of the COVID-19 pandemic. As the implications of this event rapidly evolved and its significance was understood, we knew the nation was in uncharted territory. We are extremely concerned for those who are suffering, for the well-being of our health care workers, and for our customers, friends, neighbors and employees as they continue to provide services to their community. Our goal over the past few weeks, and into the future, is to continue providing crucial financial services in a safe and timely manner, which will hopefully help to contribute to a faster recovery in the markets we serve. We have taken prudent steps to secure our financial position so that we will have the capacity and ability to meet the needs of our customers and communities as the impact of COVID-19 continues to affect them and our economy more generally.”
Hedgepeth continued, “We are participating in the Paycheck Protection Program, or PPP, providing loans to assist our customers with funds to work through this pandemic. Within the last couple of weeks, we have assisted more than 990 customers with over $88 million dollars in PPP loans. These loans, which are eligible for forgiveness, provide funds to be used by small businesses to continue paying their employees, rent, mortgages and utilities, all of which assist small businesses with keeping employees on the payroll. This program is designed to enhance the economic infrastructure of the communities we serve by providing the resources needed for small businesses to reopen in the near future. We have provided additional staff resources, together with an “all hands on deck” philosophy to facilitate as many customer requests as possible by assisting them in applying for and participating in this stimulus program in a very limited period of time. We also continue to work with our customers in other ways, such as offering loan payment deferral options in certain circumstances.”
“We are dealing with unprecedented times and it is paramount that we remain flexible and accommodate the needs of the communities in which we operate. All of our branches are open for drive-thru activity while keeping the health and safety of our customers and employees as our primary objective. We will strive to provide as many solutions as possible, in a timely manner that strengthen the business partnerships we have developed as we all proceed through the recovery process.”
Other matters of interest to shareholders are:
- The Company repurchased 275,366 shares of Company common stock during the first quarter of 2020 under the repurchase plan authorized by the Board of Directors in 2019. The Company may repurchase up to an additional 235,140 shares of its common stock under the repurchase plan.
- Loan growth was over $9.5 million in the first quarter of 2020.
- With the closing of the acquisition of three branches on April 17, 2020 in western North Carolina, our total assets are in excess of $1.5 billion.
Net Interest Income and Net Interest Margin
Net interest income was $11.5 million for the first quarter of 2020 and 2019. On a comparative quarter basis, the Company’s total interest income was positively affected by increased loan balances due to growth which was offset by a decreasing yield, a decrease in securities balances and a lower yield plus the reduction in other earning assets at a lower yield. Average total interest-earning assets were $1.1 billion in the first quarter of 2020 and 2019. The yield on those assets decreased 4 basis points, from 5.02% in the first quarter of 2019 to 4.98% for the same period in 2020. This was primarily due to lower rates on recently originated loans and a reduction of accretion from acquired loans on a comparative quarter basis.
The Company’s average interest-bearing liabilities increased by $16.8 million, to $788.4 million for the quarter ended March 31, 2020, from $771.6 million for the first quarter of 2019. Low-cost savings, NOW and money market deposits increased $19.3 million while the cost of transactional deposits decreased from 0.48% to 0.43%, or 5 basis points year over year. The cost of total deposits increased from 0.90% in the first quarter of 2019 to 0.94% in the first quarter of 2020 due to the increase in the cost of time deposits. During the first quarter of 2020, the Company’s net interest margin was 4.03% and net interest spread was 3.59%. In the first quarter of 2019, net interest margin was 4.09% and net interest spread was 3.65%.
Provision for Loan Losses and Asset Quality
During the first quarter of 2020, the Company recorded a provision for loan losses of $2.3 million, based primarily on loan growth and adjustments to qualitative allowance factors and preliminary estimates related to the economic impact of the COVID-19 pandemic. There was a 0.15% allowance applied to all loan pools for factors related to the economic impact of COVID-19. Additionally, due to the COVID-19 pandemic, we increased our reserve an additional five basis points (.05%) in response to qualitative factors for gross domestic product, peer group delinquency, and North Carolina unemployment in all loan pools. As a result, $1.4 million of the $2.3 million provision was attributable to the impact COVID -19 on the reserve’s increase. We granted payment extensions on approximately 285 commercial and consumer loans related to the impact of COVID – 19. On a comparative quarter basis, the Company recorded a provision for loan losses of $112,000, based primarily on loan growth and adjustments to qualitative loan factors related to trends in the loan portfolio for the first quarter of 2019. In the first quarter of 2020, the Company recorded net charge-offs of $12,000 compared to net charge-offs of $271,000 in the first quarter of 2019. These charge-offs resulted in a net charge-off rate of 0.00% of average loans for the current quarter, compared to a net charge-off rate of 0.11% in the first quarter of 2019.
Non-interest Income
Non-interest income for the quarter ended March 31, 2020 was $1.4 million, an increase of $247,000 from $1.2 million in the first quarter of 2019. Service charges on deposit accounts increased $72,000, to $338,000 for the quarter ended March 31, 2020, from $266,000 for the first quarter in 2019. Other non-deposit fees and income increased $39,000 from the first quarter of 2019 to the first quarter of 2020. Fees of $185,000 from presold mortgages and $108,000 from SBA loans totaled $293,000 in the first quarter of 2020, which represented an increase of $136,000 from the $157,000 of fees in the first quarter of 2019. The Company did not sell any investment securities in the first quarter of 2020 or 2019.
Non-interest Expense
Non-interest expenses increased by $943,000 to $9.2 million for the quarter ended March 31, 2020, from $8.3 million for the same period in 2019. In general, most categories of non-interest expenses increased, primarily due to an increase in the number of branches. The following are highlights of the significant categories of non-interest expenses during the first quarter of 2020 versus the same period in 2019:
- Personnel expenses increased $661,000 to $5.6 million, due to additional personnel and cost-of-living increases.
- Occupancy expenses increased $204,000, primarily due to additional branches, repairs and maintenance and increased rent expense due to normal rent escalation.
- Integration-related expenses increased $39,000.
- CDI expense decreased $40,000 due to amortization.
- Information systems expense increased by $249,000 due to increased expenses related to a new mobile banking platform and security cost for the core processing system.
- Professional fees decreased by $10,000 to $372,000.
- Deposit insurance expenses decreased by $117,000 due to increased premium credit earned.
Income Taxes
The Company’s effective tax rate was 20.2% and 21.0% for the quarters ended March 31, 2020 and 2019, respectively.
Balance Sheet
Total assets at March 31, 2020 were $1.3 billion, an increase of $21.4 million from a year earlier. Gross loans at March 31, 2020 were $1.0 billion, up $47.7 million or 4.8% from a year earlier, and total deposits were $982.7 million, an increase of $31.7 million or 3.3% from a year earlier.
Retail deposits (excluding brokered deposits and internet time deposits) grew at a rate of 6.1% or $34.3 million as of March 31, 2020 compared to the same period in 2019. Wholesale deposits decreased from $26.3 million at March 31, 2019 to $19.5 million at March 31, 2020 as we continue emphasizing core deposit growth to replace wholesale deposits.
Completion of Acquisition of Three Branches in Western North Carolina
As previously announced, on April 17, 2020, the Company’s subsidiary, Select Bank & Trust completed its purchase of three branches from Entegra Bank, a division of First Citizens Bank.
The branches are located at 473 Carolina Way, Highlands, NC; 498 East Main Street, Sylva, NC; and 30 Hyatt Road, Franklin, NC. As part of the purchase, Select Bank & Trust Company assumed approximately $185 million in deposits and purchased approximately $107 million in loans.
About Select Bank & Trust Company
Select Bank & Trust has 22 full-service offices in these North Carolina communities: Dunn, Burlington, Charlotte, Clinton, Cornelius (Charlotte area), Elizabeth City, Fayetteville, Franklin, Goldsboro, Greenville, Highlands, Holly Springs (Raleigh area), Leland, Lillington, Lumberton, Morehead City, Raleigh, Sylva, and Wilmington, North Carolina; in the following South Carolina communities: Blacksburg and Rock Hill; and in Virginia Beach, Virginia.
About Select Bancorp, Inc.
Select Bancorp, Inc. is a bank holding company headquartered in Dunn, North Carolina. The Company primarily conducts operations through its wholly owned subsidiary, Select Bank & Trust Company, a North Carolina-chartered commercial bank that provides a full suite of banking services through its offices in North Carolina, South Carolina, and Virginia. The Company’s common stock is listed on the Nasdaq Global Market under the symbol “SLCT”.
Non-GAAP Financial Measures
Certain financial measures we use to evaluate our performance and discuss in this release and the accompanying tables are identified as being “non-GAAP financial measures.” In accordance with the rules of the Securities and Exchange Commission, or the SEC, we classify a financial measure as being a non-GAAP (generally accepted accounting principles) financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of operations, balance sheet or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both.
The non-GAAP financial measures that we discuss in this release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in this release may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar, or with names similar, to the non-GAAP financial measures we have discussed in this release when comparing such non-GAAP financial measures.
Tangible book value per share is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as shareholders’ equity less goodwill and core deposit intangibles; and (b) tangible book value per share as tangible common equity (as described in clause (a)) divided by shares of common stock outstanding. For tangible book value per share, the most directly comparable financial measure calculated in accordance with GAAP is our book value per share. A reconciliation of tangible book value per share to book value per share is included in the tables that accompany this release.
We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.
Important Note Regarding Forward-Looking Statements
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, revenue, and expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to anticipated market share growth, 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. The actual results might differ materially from those projected in the forward-looking statements for various reasons, including, but not limited to: the ongoing COVID-19 pandemic and measures intended to prevent its spread, which include wide disruptions to business activity that may impact the financial strength of our borrowers; our ability to manage growth or achieve it at all; substantial changes in financial markets; our ability to obtain the synergies and expense efficiencies anticipated from our acquisition activity and branch divestures and consolidations; regulatory changes; changes in interest rates, including the impact of such changes on our net interest margin; loss of deposits and loan demand to other savings and financial institutions; adverse economic conditions that impact our borrowers’ ability to pay their debts when due, including the rapid rise in unemployment associated with the COVID-19 pandemic; 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 assumes no obligation to update the forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.
Mark A. Jeffries
Executive Vice President
Chief Financial Officer
Office: 910-892-7080 and Direct: 910-897-3603
markj@SelectBank.com
SelectBank.com
| SELECT BANCORP, INC. | ||||||||||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||||||||
| (Unaudited) | (Audited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ | 20,030 | $ | 19,110 | $ | 20,052 | $ | 20,397 | $ | 15,586 | ||||||||||
| Interest-earning deposits in other banks | 35,544 | 50,920 | 53,093 | 100,584 | 44,894 | |||||||||||||||
| Certificates of deposit | - | - | 500 | 500 | 1,000 | |||||||||||||||
| Federal funds sold | 11,673 | 9,047 | 10,728 | 21,961 | 9,809 | |||||||||||||||
| Investment securities available for sale, at Fair Value | 64,738 | 72,367 | 76,941 | 83,102 | 86,727 | |||||||||||||||
| Loans held for sale | 1,606 | 928 | 1,714 | 826 | 354 | |||||||||||||||
| Loans | 1,039,514 | 1,029,975 | 1,014,928 | 997,062 | 991,801 | |||||||||||||||
| Allowance for loan losses | (10,586 | ) | (8,324 | ) | (8,056 | ) | (8,303 | ) | (8,510 | ) | ||||||||||
| NET LOANS | 1,028,928 | 1,021,651 | 1,006,872 | 988,759 | 983,291 | |||||||||||||||
| Accrued interest receivable | 3,839 | 4,189 | 3,902 | 4,028 | 4,120 | |||||||||||||||
| Stock in Federal Home Loan Bank of Atlanta, at cost | 3,059 | 3,045 | 3,045 | 3,045 | 3,342 | |||||||||||||||
| Other non-marketable securities | 718 | 719 | 719 | 718 | 738 | |||||||||||||||
| Foreclosed real estate | 3,737 | 3,533 | 1,442 | 1,468 | 1,046 | |||||||||||||||
| Premises and equipment, net | 17,868 | 17,791 | 18,150 | 18,274 | 17,715 | |||||||||||||||
| Right of use lease asset | 8,414 | 8,596 | 8,776 | 8,953 | 8,750 | |||||||||||||||
| Bank owned life insurance | 29,950 | 29,789 | 29,621 | 29,451 | 29,282 | |||||||||||||||
| Goodwill | 24,579 | 24,579 | 24,579 | 24,579 | 24,579 | |||||||||||||||
| Core deposit intangible ("CDI") | 1,431 | 1,610 | 1,803 | 2,011 | 1,866 | |||||||||||||||
| Assets held for sale | - | - | - | - | 668 | |||||||||||||||
| Other assets | 7,380 | 7,202 | 7,697 | 8,141 | 8,310 | |||||||||||||||
| TOTAL ASSETS | $ | 1,263,494 | $ | 1,275,076 | $ | 1,269,634 | $ | 1,316,797 | $ | 1,242,077 | ||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Demand | $ | 250,031 | $ | 240,305 | $ | 243,889 | $ | 252,666 | $ | 240,262 | ||||||||||
| Savings | 41,815 | 43,128 | 43,355 | 46,037 | 48,080 | |||||||||||||||
| Money market and NOW | 306,051 | 280,145 | 283,414 | 292,629 | 262,169 | |||||||||||||||
| Time | 384,754 | 429,260 | 417,015 | 438,918 | 400,455 | |||||||||||||||
| TOTAL DEPOSITS | 982,651 | 992,838 | 987,673 | 1,030,250 | 950,966 | |||||||||||||||
| Short-Term Debt | 20,000 | - | - | - | 7,000 | |||||||||||||||
| Long-Term Debt | 37,372 | 57,372 | 57,372 | 57,372 | 57,372 | |||||||||||||||
| Lease Liability | 8,669 | 8,813 | 8,951 | 9,086 | 8,842 | |||||||||||||||
| Accrued interest payable | 536 | 578 | 596 | 637 | 519 | |||||||||||||||
| Accrued expenses and other liabilities | 2,181 | 2,700 | 2,993 | 2,607 | 3,927 | |||||||||||||||
| TOTAL LIABILITIES | 1,051,409 | 1,062,301 | 1,057,585 | 1,099,952 | 1,028,626 | |||||||||||||||
| Shareholders' Equity | ||||||||||||||||||||
| Common stock | 18,056 | 18,330 | 18,513 | 19,262 | 19,326 | |||||||||||||||
| Additional paid-in-capital | 138,788 | 140,870 | 142,878 | 150,275 | 150,877 | |||||||||||||||
| Retained Earnings | 53,779 | 52,675 | 49,634 | 46,395 | 42,947 | |||||||||||||||
| Common stock issued to deferred compensation trust | (2,791 | ) | (2,815 | ) | (2,730 | ) | (2,652 | ) | (2,652 | ) | ||||||||||
| Directors' Deferred Compensation Plan Rabbi Trust | 2,791 | 2,815 | 2,730 | 2,652 | 2,652 | |||||||||||||||
| Accumulated other comprehensive income | 1,462 | 900 | 1,024 | 913 | 301 | |||||||||||||||
| TOTAL SHAREHOLDERS' EQUITY | 212,085 | 212,775 | 212,049 | 216,845 | 213,451 | |||||||||||||||
| TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | $ | 1,263,494 | $ | 1,275,076 | $ | 1,269,634 | $ | 1,316,797 | $ | 1,242,077 | ||||||||||
| SELECT BANCORP, INC. | ||||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2019 | December 31, 2018 | ||||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||||||
| Loans | $ | 13,589 | $ | 14,124 | $ | 13,924 | $ | 13,515 | $ | 13,042 | $ | 54,605 | $ | 53,796 | ||||||||||
| Federal funds sold and interest-earning | ||||||||||||||||||||||||
| deposits in other banks | 168 | 258 | 581 | 456 | 543 | 1,838 | 1,618 | |||||||||||||||||
| Investments | 421 | 434 | 503 | 601 | 465 | 2,003 | 1,421 | |||||||||||||||||
| TOTAL INTEREST INCOME | 14,178 | 14,816 | 15,008 | 14,572 | 14,050 | 58,446 | 56,835 | |||||||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||||||||
| Money market, NOW and savings deposits | 348 | 420 | 433 | 407 | 356 | 1,616 | 1,339 | |||||||||||||||||
| Time deposits | 1,931 | 2,075 | 2,248 | 1,985 | 1,753 | 8,061 | 6,293 | |||||||||||||||||
| Short-term debt | 87 | 6 | 4 | 26 | 26 | 62 | 328 | |||||||||||||||||
| Long-term debt | 352 | 447 | 455 | 457 | 458 | 1,817 | 1,490 | |||||||||||||||||
| TOTAL INTEREST EXPENSE | 2,718 | 2,948 | 3,140 | 2,875 | 2,593 | 11,556 | 9,450 | |||||||||||||||||
| NET INTEREST INCOME | 11,460 | 11,868 | 11,868 | 11,697 | 11,457 | 46,890 | 47,385 | |||||||||||||||||
| PROVISION FOR (RECOVERY OF) LOAN LOSSES | 2,273 | 302 | 231 | (207 | ) | 112 | 438 | (156 | ) | |||||||||||||||
| NET INTEREST INCOME AFTER | ||||||||||||||||||||||||
| PROVISION FOR LOAN LOSSES | 9,187 | 11,566 | 11,637 | 11,904 | 11,345 | 46,452 | 47,541 | |||||||||||||||||
| NON-INTEREST INCOME | ||||||||||||||||||||||||
| Fees on the sale of mortgages | 293 | 148 | 218 | 230 | 157 | 753 | 497 | |||||||||||||||||
| Gain on securities | 0 | 0 | 48 | 0 | 0 | 48 | 0 | |||||||||||||||||
| Service charges on deposit accounts | 338 | 303 | 308 | 284 | 266 | 1,161 | 1,124 | |||||||||||||||||
| Other fees and income | 813 | 995 | 874 | 814 | 774 | 3,457 | 3,080 | |||||||||||||||||
| TOTAL NON-INTEREST INCOME | 1,444 | 1,446 | 1,448 | 1,328 | 1,197 | 5,419 | 4,701 | |||||||||||||||||
| NON-INTEREST EXPENSE | ||||||||||||||||||||||||
| Personnel | 5,632 | 5,152 | 5,124 | 5,031 | 4,971 | 20,278 | 18,304 | |||||||||||||||||
| Occupancy and equipment | 931 | 973 | 1,073 | 922 | 727 | 3,695 | 3,666 | |||||||||||||||||
| Deposit insurance | (12 | ) | 19 | (30 | ) | 90 | 105 | 184 | 628 | |||||||||||||||
| Professional Fees | 372 | 503 | 518 | 483 | 382 | 1,886 | 1,394 | |||||||||||||||||
| CDI amortization | 179 | 193 | 208 | 205 | 219 | 825 | 1,016 | |||||||||||||||||
| Merger/acquisition related expenses | 39 | 171 | 128 | 107 | 0 | 406 | 1,826 | |||||||||||||||||
| Information systems | 1,038 | 974 | 852 | 877 | 789 | 3,492 | 3,372 | |||||||||||||||||
| Foreclosed-related expenses | 5 | 109 | (9 | ) | 10 | 30 | 140 | 115 | ||||||||||||||||
| Other | 1,063 | 1,000 | 1,067 | 1,086 | 1,081 | 4,234 | 4,229 | |||||||||||||||||
| TOTAL NON-INTEREST EXPENSE | 9,247 | 9,094 | 8,931 | 8,811 | 8,304 | 35,140 | 34,550 | |||||||||||||||||
| INCOME BEFORE INCOME TAXES | 1,384 | 3,918 | 4,154 | 4,421 | 4,238 | 16,731 | 17,692 | |||||||||||||||||
| INCOME TAXES | 280 | 877 | 915 | 973 | 931 | 3,696 | 3,910 | |||||||||||||||||
| NET INCOME | $ | 1,104 | $ | 3,041 | $ | 3,239 | $ | 3,448 | $ | 3,307 | $ | 13,035 | $ | 13,782 | ||||||||||
| NET INCOME PER COMMON SHARE OUTSTANDING | ||||||||||||||||||||||||
| Basic | $ | 0.06 | $ | 0.17 | $ | 0.17 | $ | 0.18 | $ | 0.17 | $ | 0.69 | $ | 0.87 | ||||||||||
| Diluted | $ | 0.06 | $ | 0.16 | $ | 0.17 | $ | 0.18 | $ | 0.17 | $ | 0.68 | $ | 0.87 | ||||||||||
| WEIGHTED AVERAGE COMMON | ||||||||||||||||||||||||
| Basic Outstanding Shares | 18,255,351 | 18,414,393 | 19,028,572 | 19,318,358 | 19,315,686 | 19,016,808 | 15,812,585 | |||||||||||||||||
| Diluted Outstanding Shares | 18,287,064 | 18,460,118 | 19,073,235 | 19,359,492 | 19,365,354 | 19,063,237 | 15,877,633 | |||||||||||||||||
| Select Bancorp, Inc. | |||||||||||||||||||||||||||
| Asset quality | |||||||||||||||||||||||||||
| For Periods Ended | |||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2019 | December 31, 2018 | |||||||||||||||||||||
| Non-accrual loans | 7,201 | 5,941 | 9,083 | 10,521 | 6,337 | 5,941 | 7,257 | ||||||||||||||||||||
| Accruing TDRs | 5,619 | 6,207 | 6,477 | 6,061 | 5,246 | 6,207 | 4,378 | ||||||||||||||||||||
| Total non-performing loans | 12,820 | 12,148 | 15,560 | 16,582 | 11,583 | 12,148 | 11,635 | ||||||||||||||||||||
| Foreclosed real estate | 3,737 | 3,533 | 1,442 | 1,468 | 1,046 | 3,533 | 1,088 | ||||||||||||||||||||
| Total non-performing assets | 16,557 | 15,681 | 17,002 | 18,050 | 12,629 | 15,681 | 12,723 | ||||||||||||||||||||
| Accruing loans past due 90 days or more | 1,182 | 1,231 | 2,296 | 2,447 | 3,146 | 1,231 | 3,167 | ||||||||||||||||||||
| Allowance for loan losses | 10,586 | 8,324 | 8,056 | 8,303 | 8,510 | 8,324 | 8,669 | ||||||||||||||||||||
| Non-performing loans to period ending loans | 1.23% | 1.18% | 1.53% | 1.66% | 1.17% | 1.18% | 1.18% | ||||||||||||||||||||
| Non-performing loans & accruing loans past | |||||||||||||||||||||||||||
| due 90 days or more to period ending loans | 1.35% | 1.30% | 1.76% | 1.91% | 1.49% | 1.30% | 1.50% | ||||||||||||||||||||
| Allowance for loans to period end loans | 1.02% | 0.81% | 0.79% | 0.83% | 0.86% | 0.81% | 0.88% | ||||||||||||||||||||
| Allowance for loans to non-performing loans | 83% | 69% | 52% | 50% | 73% | 69% | 75% | ||||||||||||||||||||
| Allowance for loans to non-performing Assets | 64% | 53% | 47% | 46% | 67% | 53% | 68% | ||||||||||||||||||||
| Allowance for loans to non-performing Assets | |||||||||||||||||||||||||||
| and accruing loans past due 90 days or more | 60% | 49% | 42% | 41% | 54% | 49% | 55% | ||||||||||||||||||||
| Non-performing assets to total assets | 1.31% | 1.23% | 1.34% | 1.37% | 1.02% | 1.23% | 1.01% | ||||||||||||||||||||
| Non-performing assets to accruing loans | |||||||||||||||||||||||||||
| past due 90 days or more to total assets | 1.40% | 1.33% | 1.52% | 1.56% | 1.27% | 1.33% | 1.26% | ||||||||||||||||||||
| SELECT BANCORP, INC. | |||||||||||||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Measures | |||||||||||||||||||||||||||
| ($ in thousands, except per share data, unaudited) | |||||||||||||||||||||||||||
| For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2019 | December 31, 2018 | |||||||||||||||||||||
| Net interest margin: | |||||||||||||||||||||||||||
| Net Interest Margin-tax equivalent (1) | 11,489 | 11,901 | 11,903 | 11,740 | 11,496 | 47,037 | 47,535 | ||||||||||||||||||||
| Purchased loan accretion and early payoff charges | (105 | ) | (226 | ) | (210 | ) | (268 | ) | (200 | ) | (904 | ) | (3,051 | ) | |||||||||||||
| Net Interest Margin(2) (Non-GAAP) | 11,384 | 11,675 | 11,693 | 11,472 | 11,296 | 46,133 | 44,484 | ||||||||||||||||||||
| Loans receivable interest income: | |||||||||||||||||||||||||||
| Loans receivable interest income | 13,589 | 14,124 | 13,924 | 13,515 | 13,042 | 54,645 | 53,822 | ||||||||||||||||||||
| Purchased loan accretion and early payoff charges | (105 | ) | (226 | ) | (210 | ) | (268 | ) | (200 | ) | (904 | ) | (3,051 | ) | |||||||||||||
| Loans receivable interest income (Non-GAAP) | 13,484 | 13,898 | 13,714 | 13,247 | 12,842 | 53,741 | 50,771 | ||||||||||||||||||||
| Acquired and non-acquired loans: | |||||||||||||||||||||||||||
| Acquired loans recievable | 122,363 | 129,595 | 141,765 | 152,090 | 173,771 | 129,595 | 186,243 | ||||||||||||||||||||
| Non-acquired loans recievable | 917,151 | 900,380 | 873,163 | 844,972 | 818,030 | 900,380 | 799,797 | ||||||||||||||||||||
| Total gross loans recievable | 1,039,514 | 1,029,975 | 1,014,928 | 997,062 | 991,801 | 1,029,975 | 986,040 | ||||||||||||||||||||
| % Acquired | 11.8% | 12.6% | 14.0% | 15.3% | 17.5% | 12.6% | 18.9% | ||||||||||||||||||||
| Non-acquired loans | 917,151 | 900,380 | 873,163 | 844,972 | 818,030 | 900,380 | 799,797 | ||||||||||||||||||||
| Allowance for loan losses | 10,586 | 8,324 | 8,056 | 8,303 | 8,510 | 8,324 | 8,669 | ||||||||||||||||||||
| Allowance for loan losses to non-acquired loans (Non-GAAP) | 1.15% | 0.92% | 0.92% | 0.98% | 1.04% | 0.92% | 1.08% | ||||||||||||||||||||
| Total gross loan receivable | 1,039,514 | 1,029,975 | 1,014,928 | 997,062 | 991,801 | 1,029,975 | 986,040 | ||||||||||||||||||||
| Allowance for loan losses | 10,586 | 8,324 | 8,056 | 8,303 | 8,510 | 8,324 | 8,669 | ||||||||||||||||||||
| Allowance for loan losses to total gross loans receivable | 1.02% | 0.81% | 0.79% | 0.83% | 0.86% | 0.81% | 0.88% | ||||||||||||||||||||
| For Periods Ended | |||||||||||||||||||||||||||
| March 31, 2019 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2019 | December 31, 2018 | |||||||||||||||||||||
| Tangible common equity | |||||||||||||||||||||||||||
| Total shareholders' equity | $ | 212,085 | $ | 212,775 | $ | 212,049 | $ | 216,845 | $ | 213,451 | $ | 212,775 | $ | 209,611 | |||||||||||||
| Adjustment: | |||||||||||||||||||||||||||
| Goodwill | 24,579 | 24,579 | 24,579 | 24,579 | 24,579 | 24,579 | 24,579 | ||||||||||||||||||||
| Core deposit intangibles | 1,431 | 1,610 | 1,803 | 2,011 | 1,866 | 1,610 | 2,085 | ||||||||||||||||||||
| Tangible common equity | $ | 186,075 | $ | 186,586 | $ | 185,667 | $ | 190,255 | $ | 187,006 | $ | 186,586 | $ | 182,947 | |||||||||||||
| Common shares outstanding(3) | 18,055,692 | 18,330,058 | 18,513,078 | 19,261,989 | 19,326,485 | 18,330,058 | 19,311,505 | ||||||||||||||||||||
| Book value per common share(4) | $ | 11.75 | $ | 11.61 | $ | 11.45 | $ | 11.26 | $ | 11.04 | $ | 11.61 | $ | 10.85 | |||||||||||||
| Tangible book value per common share(5) | $ | 10.31 | $ | 10.18 | $ | 10.03 | $ | 9.88 | $ | 9.68 | $ | 10.18 | $ | 9.47 | |||||||||||||
| (1) Net interest margin-tax equivalent reflects tax-exempt income on a tax-equivalent basis. | |||||||||||||||||||||||||||
| (2) Net interest margin-core and yield on loans - core excludes the impact of purchase accounting accretion, loan payoff charges and related deferred fees recognized related to early loan repayments. | |||||||||||||||||||||||||||
| (3) Excludes the dilutive effect of common stock issuable upon exercise of stock options. | |||||||||||||||||||||||||||
| (4) We calculate book value per common share as shareholders' equity less preferred stock at the end of the relevant period divided by the outstanding number of shares of our common stock at the end of the relevant period. | |||||||||||||||||||||||||||
| (5) We calculate the tangible book value per common share as total shareholders' equity less goodwill, preferred stock and core deposit intangibles, divided by the number of outstanding shares of our common stock at the end of the relevant period. | |||||||||||||||||||||||||||
| Select Bancorp, Inc. | |||||||||||||||||||||||||||||||
| Selected Financial Information and Other Data | |||||||||||||||||||||||||||||||
| ($ in thousands, except share and per share data) | |||||||||||||||||||||||||||||||
| For the Quarter Ended | For the Year Ended | ||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | December 31, | ||||||||||||||||||||||||
| 2020 | 2019 | 2019 | 2019 | 2019 | 2019 | 2018 | 2017 | ||||||||||||||||||||||||
| Summary of Operations: | |||||||||||||||||||||||||||||||
| Total interest income | $ | 14,178 | $ | 14,816 | $ | 15,008 | $ | 14,572 | $ | 14,050 | $ | 58,446 | $ | 56,835 | $ | 39,617 | |||||||||||||||
| Total interest expense | 2,718 | 2,948 | 3,140 | 2,875 | 2,593 | 11,556 | 9,450 | 5,106 | |||||||||||||||||||||||
| Net interest income | 11,460 | 11,868 | 11,868 | 11,697 | 11,457 | 46,890 | 47,385 | 34,511 | |||||||||||||||||||||||
| Provision for loan losses | 2,273 | 302 | 231 | (207 | ) | 112 | 438 | (156 | ) | 1,367 | |||||||||||||||||||||
| Net interest income after provision | 9,187 | 11,566 | 11,637 | 11,904 | 11,345 | 46,452 | 47,541 | 33,144 | |||||||||||||||||||||||
| Noninterest income | 1,444 | 1,446 | 1,448 | 1,328 | 1,197 | 5,419 | 4,701 | 3,072 | |||||||||||||||||||||||
| Merger/acquisition related expenses | 39 | 171 | 128 | 107 | - | 406 | 1,826 | 2,166 | |||||||||||||||||||||||
| Noninterest expense | 9,208 | 8,923 | 8,803 | 8,704 | 8,304 | 34,734 | 32,724 | 25,153 | |||||||||||||||||||||||
| Income before income taxes | 1,384 | 3,918 | 4,154 | 4,421 | 4,238 | 16,731 | 17,692 | 8,897 | |||||||||||||||||||||||
| Provision for income taxes | 280 | 877 | 915 | 973 | 931 | 3,696 | 3,910 | 5,712 | |||||||||||||||||||||||
| Net Income | 1,104 | 3,041 | 3,239 | 3,448 | 3,307 | 13,035 | 13,782 | 3,185 | |||||||||||||||||||||||
| Dividends on Preferred Stock | - | - | - | - | - | - | - | - | |||||||||||||||||||||||
| Net income available to common shareholders | $ | 1,104 | $ | 3,041 | $ | 3,239 | $ | 3,448 | $ | 3,307 | $ | 13,035 | $ | 13,782 | $ | 3,185 | |||||||||||||||
| Share and Per Share Data: | |||||||||||||||||||||||||||||||
| Earnings per share - basic | $ | 0.06 | $ | 0.17 | $ | 0.17 | $ | 0.18 | $ | 0.17 | $ | 0.69 | $ | 0.87 | $ | 0.27 | |||||||||||||||
| Earnings per share - diluted | $ | 0.06 | $ | 0.16 | $ | 0.17 | $ | 0.18 | $ | 0.17 | $ | 0.68 | $ | 0.87 | $ | 0.27 | |||||||||||||||
| Book value per share | $ | 11.75 | $ | 11.61 | $ | 11.45 | $ | 11.26 | $ | 11.04 | $ | 11.61 | $ | 10.85 | $ | 9.72 | |||||||||||||||
| Tangible book value per share(1) | $ | 10.31 | $ | 10.18 | $ | 10.03 | $ | 9.88 | $ | 9.68 | $ | 10.18 | $ | 9.47 | $ | 7.72 | |||||||||||||||
| Ending shares outstanding | 18,055,692 | 18,330,058 | 18,513,078 | 19,261,989 | 19,326,485 | 18,330,058 | 19,311,505 | 14,009,137 | |||||||||||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||||||||||
| Basic | 18,255,351 | 18,414,393 | 19,028,572 | 19,318,358 | 19,315,686 | 19,016,808 | 15,812,585 | 11,763,050 | |||||||||||||||||||||||
| Diluted | 18,287,064 | 18,460,118 | 19,073,235 | 19,359,492 | 19,365,354 | 19,063,237 | 15,877,633 | 11,826,977 | |||||||||||||||||||||||
| Selected Performance Ratios: | |||||||||||||||||||||||||||||||
| Return on average assets(2) | 0.35% | 0.95% | 0.99% | 1.10% | 1.08% | 1.03% | 1.12% | 0.35% | |||||||||||||||||||||||
| Return on average equity(2) | 2.07% | 5.67% | 5.93% | 6.41% | 6.32% | 6.08% | 8.51% | 2.93% | |||||||||||||||||||||||
| Net interest margin | 4.03% | 4.05% | 3.94% | 4.06% | 4.09% | 4.04% | 4.19% | 4.09% | |||||||||||||||||||||||
| Efficiency ratio (3) | 71.36% | 67.02% | 66.11% | 66.83% | 65.62% | 66.40% | 62.83% | 66.93% | |||||||||||||||||||||||
| Period End Balance Sheet Data: | |||||||||||||||||||||||||||||||
| Gross loans | $ | 1,039,514 | $ | 1,029,975 | $ | 1,014,928 | $ | 997,062 | $ | 991,801 | $ | 1,029,975 | $ | 986,040 | $ | 982,626 | |||||||||||||||
| Total interest-earning assets | 1,137,010 | 1,167,857 | 1,153,612 | 1,148,417 | 1,103,691 | 1,167,857 | 1,119,344 | 1,063,322 | |||||||||||||||||||||||
| Goodwill | 24,579 | 24,579 | 24,579 | 24,579 | 24,579 | 24,579 | 24,579 | 24,904 | |||||||||||||||||||||||
| Core deposit intangible | 1,431 | 1,610 | 1,803 | 2,011 | 1,866 | 1,610 | 2,085 | 3,101 | |||||||||||||||||||||||
| Total assets | 1,263,494 | 1,275,076 | 1,269,634 | 1,316,797 | 1,242,077 | 1,275,076 | 1,258,525 | 1,194,135 | |||||||||||||||||||||||
| Deposits | 982,651 | 992,838 | 987,673 | 1,030,250 | 950,966 | 992,838 | 980,427 | 995,044 | |||||||||||||||||||||||
| Short-term debt | 20,000 | - | - | - | 7,000 | - | 7,000 | 28,279 | |||||||||||||||||||||||
| Long-term debt | 37,372 | 57,372 | 57,372 | 57,372 | 57,372 | 57,372 | 57,372 | 19,372 | |||||||||||||||||||||||
| Shareholders' equity | 212,085 | 212,775 | 212,049 | 216,845 | 213,451 | 212,775 | 209,611 | 136,115 | |||||||||||||||||||||||
| Selected Average Balances: | |||||||||||||||||||||||||||||||
| Gross Loans | $ | 1,020,630 | $ | 1,017,750 | $ | 1,013,331 | $ | 982,876 | $ | 985,059 | $ | 1,004,051 | $ | 987,634 | $ | 732,089 | |||||||||||||||
| Total interest-earning assets | 1,147,631 | 1,166,758 | 1,197,266 | 1,160,387 | 1,086,958 | 1,164,149 | 1,119,344 | 813,773 | |||||||||||||||||||||||
| Core Deposit Intangible | 1,507 | 1,680 | 1,878 | 1,741 | 1,951 | 1,812 | 2,547 | 640 | |||||||||||||||||||||||
| Total Assets | 1,255,943 | 1,272,475 | 1,300,137 | 1,261,972 | 1,238,847 | 1,268,728 | 1,228,576 | 898,943 | |||||||||||||||||||||||
| Deposits | 972,162 | 989,721 | 1,013,504 | 970,011 | 949,771 | 981,132 | 989,838 | 738,310 | |||||||||||||||||||||||
| Short-term debt | 12,747 | - | - | 6,824 | 7,000 | 3,414 | 21,393 | 34,523 | |||||||||||||||||||||||
| Long-term debt | 44,625 | 57,372 | 57,372 | 57,372 | 57,372 | 57,372 | 49,357 | 14,239 | |||||||||||||||||||||||
| Shareholders' equity | 214,502 | 212,849 | 216,556 | 215,722 | 212,130 | 214,324 | 161,953 | 108,709 | |||||||||||||||||||||||
| Asset Quality Ratios: | |||||||||||||||||||||||||||||||
| Nonperforming loans (4) | $ | 12,820 | $ | 12,148 | $ | 15,560 | $ | 16,582 | $ | 11,583 | $ | 12,148 | $ | 11,635 | $ | 6,978 | |||||||||||||||
| Other real estate owned | 3,737 | 3,533 | 1,442 | 1,468 | 1,046 | 3,533 | 1,088 | 1,258 | |||||||||||||||||||||||
| Allowance for loan losses | 10,586 | 8,324 | 8,056 | 8,303 | 8,510 | 8,324 | 8,669 | 8,835 | |||||||||||||||||||||||
| Nonperforming loans (4) to period-end loans | 1.23% | 1.18% | 1.53% | 1.66% | 1.17% | 1.18% | 1.18% | 0.71% | |||||||||||||||||||||||
| Allowance for loan losses to period-end loans | 1.02% | 0.81% | 0.79% | 0.83% | 0.86% | 0.81% | 0.88% | 0.90% | |||||||||||||||||||||||
| Delinquency ratio (5) | 0.43% | 0.34% | 0.09% | 0.12% | 0.41% | 0.34% | 0.19% | 0.48% | |||||||||||||||||||||||
| Net loan charge-offs (recoveries) to average loans (2) | 0.00% | 0.01% | 0.19% | 0.00% | 0.11% | 0.08% | 0.00% | 0.13% | |||||||||||||||||||||||
| (1) Tangible book value per share (a non GAAP measure) is equal to total shareholders’ equity less goodwill and core deposit intangibles, divided by the number of outstanding shares of our common stock at the end of the relevant period. Please refer to the table above for a reconciliation of this non-GAAP measure. | |||||||||||||||||||||||||||||||
| (2) Annualized. | |||||||||||||||||||||||||||||||
| (3) Efficiency ratio is calculated as a non-interest expenses divided by the sum of net interest income and non-interest income. | |||||||||||||||||||||||||||||||
| (4) Nonperforming loans consist of non-accrural loans and accruing TDR loans. | |||||||||||||||||||||||||||||||
| (5) Delinquency Ratio includes loans 30-89 days past due and excludes non-accrual loans. | |||||||||||||||||||||||||||||||