Press Release

Select Bancorp Reports First Quarter 2020 Earnings

Company Release - 4/29/2020 6:39 PM ET

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.

 

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Source: Select Bancorp Inc.