Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - BNC BANCORP | form8-kearnings.htm |
Exhibit 99.1
Press Release | ||
Source: | BNC Bancorp | |
Contact: | Richard D. Callicutt II | |
President and CEO | ||
336-869-9200 | ||
BNC Bancorp Announces Earnings for First Quarter 2015
HIGH POINT, N.C., April 24, 2015 /PRNewswire/ -- BNC Bancorp (NASDAQ: BNCN) ("Company"), parent company for Bank of North Carolina ("Bank"), today reported financial results for fiscal quarter ended March 31, 2015.
Operating earnings for the quarter ended March 31, 2015 totaled $10.5 million, or $0.32 per diluted share, an increase of 2.1% compared to $10.3 million, or $0.34 per diluted share, for the quarter ended December 31, 2014, and an increase of 53.3% from operating earnings of $6.9 million, or $0.25 per diluted share, for the quarter ended March 31, 2014. Operating earnings exclude non-operating income and expenses, which primarily consists of transaction-related expenses and gain (loss) on sale of investment securities.
Net income for the quarter ended March 31, 2015 was $8.8 million, or $0.27 per diluted share, an increase of 35.1% from net income of $6.5 million, or $0.24 per diluted share, for the quarter ended March 31, 2014.
Total assets at March 31, 2015 were $4.17 billion, an increase of 2.5% as compared to total assets of $4.07 billion at December 31, 2014.
Highlights for First Quarter 2015:
• | Operating earnings per diluted share of $0.32 for the first quarter of 2015, compared to $0.25 for the first quarter of 2014; |
• | Diluted earnings per share of $0.27 for the first quarter of 2015, compared to $0.24 for the first quarter of 2014; |
• | Annualized operating return on average assets of 1.04%, compared to 0.87% for the first quarter of 2014; |
• | Annualized operating return on tangible common equity ratio of 14.41%, compared to 12.17% for the first quarter of 2014; |
• | Tangible common book value of $9.67 per share, as compared to $9.00 at March 31, 2014; |
• | Originated loans increased $146.2 million compared to the fourth quarter of 2014; and |
• | Successful completion of Harbor National Bank system conversion. |
1
Richard D. Callicutt II, President and CEO, stated, "We are pleased to report another strong quarter in earnings, growth, and integration efforts. Core operating earnings per share were up 28% compared to the year ago quarter, and continue to benefit from greater operating efficiencies attained through acquisitions and strong organic growth. Originated loans increased by $146 million, or 6.9%, during the quarter, representing one of the best loan production quarters in our Company's history. While Charlotte and the Triangle continue to be our strongest markets, Charleston, with the recent addition of the Harbor National team, had a very productive first quarter.
We are pleased to report a very successful systems conversion for the Harbor National customers during the first quarter. All of the Harbor offices are now branded as BNC Bank, and through the leadership efforts of Charlie Rivers, we are confident that our seasoned team in the Charleston market will be a consistent source of strong loan and deposit growth for our Company.
In the fourth quarter, we announced the acquisition of Valley Financial in Roanoke, representing our largest acquisition to date and our initial entry into Virginia. I am pleased to report that both teams are working together extremely well, and the planning process is slightly ahead of schedule.
Our Company continues to look for opportunities that add meaningful value to our franchise in terms of earnings, markets, and growth. We are committed to successfully seizing on new opportunities and continue to add franchise and shareholder value each and every quarter."
Operating Results
Fully-taxable equivalent (“FTE”) net interest income for the quarter ended March 31, 2015 was $39.9 million, a slight increase from $39.4 million for the fourth quarter of 2014, despite the day count difference between the periods, which would have added $0.8 million of FTE net interest income for the first quarter of 2015. FTE net interest income for the first quarter of 2015 increased 22.1% from $32.7 million for the first quarter of 2014.
FTE net interest margin was 4.37% for the first quarter of 2015, a decrease of 18 basis points from 4.55% for the fourth quarter of 2014, and a decrease of 24 basis points from 4.61% for the first quarter of 2014. The decrease is primarily due to a decrease in the yield earned on the Company’s portfolio loans, which was 5.08% for the first quarter of 2015, as compared to 5.28% and 5.49% for the fourth quarter of 2014 and first quarter of 2014, respectively. The decrease in yield on the portfolio loans from first quarter of 2014 was partially offset by an additional $1.4 million of loan accretion from the acquired loan portfolio.
Average interest-earning assets were $3.71 billion for the quarter ended March 31, 2015, an increase of 7.9% from $3.44 billion for the fourth quarter of 2014, and an increase of 28.8% from $2.88 billion for the first quarter of 2014. Average interest-bearing liabilities were $3.15 billion for the quarter ended March 31, 2015, an increase of 8.0% from $2.91 billion for the fourth quarter of 2014, and an increase of 23.4% from $2.55 billion for the first quarter of 2014. These increases were due to recent acquisitions and continued loan growth across the Company’s markets.
2
The following table is a summary of average yields and costs:
Average Yields / Costs (FTE) | ||||||||
(unaudited) | ||||||||
Three Months Ended | ||||||||
March 31, | December 31, | March 31, | ||||||
2015 | 2014 | 2014 | ||||||
Yield on interest-earning assets | 5.00 | % | 5.18 | % | 5.31 | % | ||
Cost of interest-bearing liabilities | 0.75 | % | 0.74 | % | 0.80 | % | ||
Cost of funds | 0.64 | % | 0.63 | % | 0.70 | % | ||
Net interest spread | 4.25 | % | 4.44 | % | 4.51 | % | ||
Net interest margin | 4.37 | % | 4.55 | % | 4.61 | % | ||
Non-interest income was $6.3 million for the quarter ended March 31, 2015, a decrease of 19.1% from $7.8 million for the fourth quarter of 2014, and an increase of 22.9% from $5.1 million for the first quarter of 2014. Many of the non-interest income sources, such as income from recoveries on acquired loans, income derived from the sale of loans partially guaranteed by the SBA, income derived from our investment brokerage services, income derived from our CRA equity investments and income received from the Federal Deposit Insurance Corporation related to our acquired loan portfolio, are volatile and can vary significantly from period to period.
Non-interest expense was $32.0 million for the quarter ended March 31, 2015, a slight decrease as compared to non-interest expense of $32.4 million for the fourth quarter of 2014, and an increase of 29.1% from $24.8 million for the first quarter of 2014. Excluding non-operating expenses, adjusted non-interest expense for the quarter ended March 31, 2015 was $29.2 million, a decrease from $29.5 million for the fourth quarter of 2014, and an increase of 21.6% from $24.0 million for the first quarter of 2014. Salaries and employee benefits expense were elevated during the fourth quarter of 2014 due to seasonally higher fringe benefit expenses, while the first quarter of 2015 includes the full impact of additional employees and facilities obtained from the acquisition of Harbor National Bank.
The following table details the components of non-interest income and non-interest expense:
3
Non-Interest Income / Non-Interest Expense | |||||||||||
(dollars in thousands; unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 31, | December 31, | March 31, | |||||||||
2015 | 2014 | 2014 | |||||||||
Non-interest income | |||||||||||
Mortgage fees | $ | 2,499 | $ | 2,049 | $ | 1,558 | |||||
Service charges | 1,644 | 1,648 | 1,348 | ||||||||
Earnings on bank-owned life insurance | 654 | 634 | 580 | ||||||||
Gain (loss) on sale of securities | 49 | — | (565 | ) | |||||||
Insurance settlement | — | — | 768 | ||||||||
Other | 1,454 | 3,454 | 1,436 | ||||||||
Total non-interest income | $ | 6,300 | $ | 7,785 | $ | 5,125 | |||||
Non-interest expense | |||||||||||
Salaries and employee benefits | $ | 15,973 | $ | 16,423 | $ | 13,493 | |||||
Occupancy | 2,581 | 2,365 | 2,071 | ||||||||
Furniture and equipment | 1,627 | 1,630 | 1,598 | ||||||||
Data processing and supply | 846 | 1,053 | 904 | ||||||||
Advertising and business development | 646 | 625 | 689 | ||||||||
Insurance, professional and other services | 1,388 | 1,077 | 944 | ||||||||
FDIC insurance assessments | 735 | 700 | 705 | ||||||||
Loan, foreclosure and other real estate owned | 2,325 | 2,632 | 1,362 | ||||||||
Transaction-related expenses | 2,839 | 2,231 | 797 | ||||||||
Other | 3,031 | 3,630 | 2,208 | ||||||||
Total non-interest expense | $ | 31,991 | $ | 32,366 | $ | 24,771 | |||||
The following is a summary of transaction-related expenses incurred by transaction:
Transaction-Related Expenses | |||||||||||
(dollars in thousands; unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 31, | December 31, | March 31, | |||||||||
Transaction | 2015 | 2014 | 2014 | ||||||||
Harbor | $ | 2,367 | $ | 1,210 | $ | — | |||||
Community First | 47 | 585 | 178 | ||||||||
South Street | 7 | 55 | 353 | ||||||||
Randolph | — | — | 266 | ||||||||
Valley & Other | 418 | 381 | — | ||||||||
Total | $ | 2,839 | $ | 2,231 | $ | 797 | |||||
Additional Operating Highlights
Total portfolio loans were $3.18 billion at March 31, 2015, an increase of 3.3% from $3.08 billion at December 31, 2014. Originated loans increased by $146.2 million, or 6.9%, during the first quarter of 2015. The majority of loan growth during the first quarter was in commercial real estate loans.
4
The table below outlines the Company's loan portfolio mix between originated and acquired loans for the past five quarters:
Gross Loan Growth | |||||||||||||||||||
(dollars in thousands; unaudited) | |||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
2015 | 2014 | 2014 | 2014 | 2014 | |||||||||||||||
Originated loans | $ | 2,262,601 | $ | 2,116,441 | $ | 2,021,792 | $ | 1,865,024 | $ | 1,765,248 | |||||||||
Acquired loans | 913,236 | 958,657 | 741,877 | 805,275 | 538,827 | ||||||||||||||
Total portfolio loans | $ | 3,175,837 | $ | 3,075,098 | $ | 2,763,669 | $ | 2,670,299 | $ | 2,304,075 | |||||||||
Change in balance (quarter/quarter): | |||||||||||||||||||
Total portfolio loans | 3.3 | % | 11.3 | % | 3.5 | % | 15.9 | % | 1.2 | % | |||||||||
Originated loans | 6.9 | % | 4.7 | % | 8.4 | % | 5.7 | % | 3.5 | % | |||||||||
Acquired loans | (4.7 | )% | 29.2 | % | (7.9 | )% | 49.4 | % | (5.7 | )% | |||||||||
Total deposits at March 31, 2015 were $3.55 billion, an increase of 4.6% from total deposits of $3.40 billion as of December 31, 2014. Wholesale deposits were 28.6% of total deposits at March 31, 2015, an increase compared to 25.7% as of December 31, 2014. Transactional accounts, which are comprised of non-interest bearing and interest-bearing demand accounts, increased 30.2% over the last twelve months.
The table below outlines the components of deposits for the past five quarters:
Total Deposit Growth | |||||||||||||||||||
(dollars in thousands; unaudited) | |||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
2015 | 2014 | 2014 | 2014 | 2014 | |||||||||||||||
Non-interest bearing demand | $ | 544,189 | $ | 534,792 | $ | 482,859 | $ | 464,682 | $ | 350,415 | |||||||||
Interest-bearing demand | 1,685,200 | 1,657,931 | 1,495,186 | 1,504,397 | 1,362,454 | ||||||||||||||
Time deposits | 1,323,537 | 1,203,674 | 1,106,163 | 1,155,569 | 1,043,457 | ||||||||||||||
Total | $ | 3,552,926 | $ | 3,396,397 | $ | 3,084,208 | $ | 3,124,648 | $ | 2,756,326 | |||||||||
Change in balance (quarter/quarter) | 4.6 | % | 10.1 | % | (1.3 | )% | 13.4 | % | 1.8 | % | |||||||||
Annual deposit growth | 28.9 | % | |||||||||||||||||
Total borrowings at March 31, 2015 were $195.7 million, a decrease of 25.2% from total borrowings of $261.7 million as of December 31, 2014. At March 31, 2015, $61.7 million of these borrowings were classified as short-term, while the remaining $134.0 million were classified as long-term.
Asset Quality
The Company incurred $0.6 million in net charge-offs, which represented 0.08% of average loans, for the three months ended March 31, 2015, compared to net charge-offs of $0.9 million, or 0.13% of average loans for the fourth quarter of 2014, and net charge-offs of $4.6 million, or 0.82% of average loans, for the first quarter of 2014. The Company has continued to experience a significant level of recoveries of previously charged-off loans. Gross charge-offs were $2.0 million for the first quarter of 2015, as compared to $2.2 million for the fourth quarter of 2014 and $5.6 million for the first quarter of 2014.
5
During the quarter ended March 31, 2015, the Company recorded a provision for loan losses of $0.1 million, a decrease from $1.0 million recorded in the fourth quarter of 2014 and from $2.6 million recorded in the first quarter of 2014.
The allowance for loan losses was $29.4 million at March 31, 2015, a decrease of 3.4% from $30.4 million at December 31, 2014. The components of the allowance for loan loss at March 31, 2015 were as follows:
Allowance for Loan Loss Summary | ||||||||||||||
(dollars in thousands; unaudited) | ||||||||||||||
Allowance | Allowance | |||||||||||||
for | Net | for Loan | ||||||||||||
Loans | Loan Losses | Loans | Losses % | |||||||||||
Originated loans | $ | 2,262,601 | $ | 25,987 | $ | 2,236,614 | 1.15 | % | ||||||
Acquired loans | 913,236 | 3,364 | 909,872 | 0.37 | % | |||||||||
Total portfolio loans | $ | 3,175,837 | $ | 29,351 | $ | 3,146,486 | 0.92 | % | ||||||
Nonperforming assets, which consist of nonaccrual loans, loans 90 days or more past due and OREO, totaled $67.4 million, or 1.61% of total assets, at March 31, 2015, as compared to $67.3 million, or 1.65% of total assets, at December 31, 2014. Nonperforming assets that were not acquired by the Company totaled $36.6 million at March 31, 2015, an increase of 12.9% from $32.5 million at December 31, 2014.
The following table details our asset quality information for the past five fiscal quarters:
6
Asset Quality Information | |||||||||||||||||||
(dollars in thousands; unaudited) | |||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
2015 | 2014 | 2014 | 2014 | 2014 | |||||||||||||||
Nonaccrual loans - Originated | $ | 14,776 | $ | 8,476 | $ | 9,857 | $ | 14,360 | $ | 11,285 | |||||||||
Nonaccrual loans - Acquired | 13,191 | 16,248 | 18,135 | 20,406 | 23,758 | ||||||||||||||
OREO - Originated | 21,869 | 23,989 | 23,754 | 23,714 | 25,996 | ||||||||||||||
OREO - Acquired | 17,558 | 18,542 | 22,718 | 27,009 | 18,910 | ||||||||||||||
90 days past due - Originated | — | — | — | — | — | ||||||||||||||
90 days past due - Acquired | — | — | 5 | 738 | — | ||||||||||||||
Total nonperforming assets | $ | 67,394 | $ | 67,255 | $ | 74,469 | $ | 86,227 | $ | 79,949 | |||||||||
Total nonperforming assets - Originated | $ | 36,645 | $ | 32,465 | $ | 33,611 | $ | 38,074 | $ | 37,281 | |||||||||
Total assets | $ | 4,173,463 | $ | 4,072,508 | $ | 3,735,816 | $ | 3,683,230 | $ | 3,205,951 | |||||||||
Total portfolio loans | 3,175,837 | 3,075,098 | 2,763,669 | 2,670,299 | 2,304,075 | ||||||||||||||
Total originated loans | 2,262,601 | 2,116,441 | 2,021,792 | 1,865,024 | 1,765,248 | ||||||||||||||
Net charge-offs, QTD | 584 | 940 | 325 | 2,026 | 4,615 | ||||||||||||||
Loans restructured/modified not included in above, | |||||||||||||||||||
(not 90 days past due or on nonaccrual) | 15,168 | 13,577 | 15,685 | 14,948 | 17,924 | ||||||||||||||
Ratio of nonperforming assets to total assets | 1.61 | % | 1.65 | % | 1.99 | % | 2.34 | % | 2.49 | % | |||||||||
Originated nonperforming assets to total assets | 0.88 | % | 0.80 | % | 0.90 | % | 1.03 | % | 1.16 | % | |||||||||
Ratio of nonperforming loans to total portfolio loans | 0.88 | % | 0.80 | % | 1.01 | % | 1.33 | % | 1.52 | % | |||||||||
Originated nonperforming loans to total portfolio loans | 0.47 | % | 0.28 | % | 0.36 | % | 0.54 | % | 0.49 | % | |||||||||
Ratio of allowance for loan losses to total portfolio loans | 0.92 | % | 0.99 | % | 1.11 | % | 1.13 | % | 1.34 | % | |||||||||
Allowance for originated loans to total originated loans | 1.15 | % | 1.25 | % | 1.32 | % | 1.37 | % | 1.47 | % | |||||||||
Annualized net charge-offs to average portfolio loans | 0.08 | % | 0.13 | % | 0.05 | % | 0.32 | % | 0.82 | % | |||||||||
The following is a rollforward of OREO activity for the three months ended March 31, 2015:
Rollforward of OREO | |||||||||||
(dollars in thousands; unaudited) | |||||||||||
Three Months Ended March 31, 2015 | |||||||||||
Originated | Acquired | Total | |||||||||
Balance at beginning of period | $ | 23,989 | $ | 18,542 | $ | 42,531 | |||||
Foreclosures | 1,791 | 1,737 | 3,528 | ||||||||
Valuation adjustments | (603 | ) | (867 | ) | (1,470 | ) | |||||
Sales | (3,308 | ) | (1,854 | ) | (5,162 | ) | |||||
Balance at end of period | $ | 21,869 | $ | 17,558 | $ | 39,427 | |||||
7
Capital Position
At March 31, 2015, shareholders’ equity was $399.1 million, an increase of 2.2% from shareholders’ equity of $390.4 million as of December 31, 2014.
All of the Bank’s and Company’s capital ratios exceed the minimum thresholds established for a well-capitalized bank by regulatory measures.
About BNC Bancorp and Bank of North Carolina
Headquartered in High Point, NC, BNC Bancorp is the parent company of Bank of North Carolina, a commercial bank with $4.17 billion in assets. Bank of North Carolina provides a complete line of banking and financial services to individuals and businesses through its 47 banking offices in North and South Carolina. The Bank’s 12 locations in South Carolina operate as BNC Bank. 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" measures in their 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 measures to the most directly comparable GAAP measure.
Forward Looking Statements
This press release contains forward-looking statements relating to the financial condition, results of operations and business of BNC Bancorp and the Bank. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of BNC Bancorp, and the information available to management at the time that this press release was prepared. Factors that could cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following: (i) the economic recovery may face challenges causing its momentum to falter or a further recession; (ii) expected cost savings and other benefits anticipated in connection with our acquisitions may not be fully realized or realized within the expected time frame; (iii) our ability to integrate acquisitions and retain existing customers and attract new ones; and (iv) adverse changes in credit quality trends. Additional factors affecting BNC Bancorp and the Bank are discussed in BNC Bancorp's filings with the Securities and Exchange Commission (the "SEC"), Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. Please refer to the Securities and Exchange Commission's website at www.sec.gov where you can review those documents. BNC Bancorp does not undertake a duty to update any forward-looking statements made in this press release.
8
PERFORMANCE SUMMARY |
BNC BANCORP |
(Dollars in thousands, except per share data, shares in thousands) |
(Unaudited) |
For the | |||||||||||||
Three Months Ended | |||||||||||||
SUMMARY INCOME STATEMENTS | March 31, 2015 | March 31, 2014 | % Change | ||||||||||
Interest income | $ | 43,887 | $ | 35,718 | 22.9% | ||||||||
Interest expense | 5,817 | 5,004 | 16.2% | ||||||||||
Net interest income | 38,070 | 30,714 | 23.9% | ||||||||||
Provision for loan losses | 110 | 2,561 | -95.7% | ||||||||||
Net interest income after provision for loan losses | 37,960 | 28,153 | 34.8% | ||||||||||
Non-interest income | 6,300 | 5,125 | 22.9% | ||||||||||
Non-interest expense | 31,991 | 24,771 | 29.1% | ||||||||||
Income before income tax expense | 12,269 | 8,507 | 44.2% | ||||||||||
Income tax expense | 3,511 | 2,023 | 73.6% | ||||||||||
Net income | $ | 8,758 | $ | 6,484 | 35.1 | % | |||||||
PER SHARE DATA | |||||||||||||
Earnings per share, basic | $ | 0.27 | $ | 0.24 | |||||||||
Earnings per share, diluted | 0.27 | 0.24 | |||||||||||
Operating earnings per share, diluted (1) | 0.32 | 0.25 | |||||||||||
Tangible common book value per share (1) | 9.67 | 9.00 | |||||||||||
Period-end common shares outstanding | 32,716 | 27,324 | |||||||||||
Weighted average participating common shares: | |||||||||||||
Basic | 32,681 | 27,317 | |||||||||||
Diluted | 32,754 | 27,460 | |||||||||||
PERFORMANCE RATIOS | |||||||||||||
Return on average assets | 0.87 | % | 0.83 | % | |||||||||
Operating return on average assets (1) | 1.04 | % | 0.87 | % | |||||||||
Return on average common equity | 9.01 | % | 9.70 | % | |||||||||
Return on average tangible common equity (1) | 12.12 | % | 11.53 | % | |||||||||
Operating return on average tangible common equity (1) | 14.41 | % | 12.17 | % | |||||||||
Net interest margin (FTE) | 4.37 | % | 4.61 | % | |||||||||
Average equity to average assets | 9.62 | % | 8.70 | % | |||||||||
Allowance for loan losses as a % of portfolio loans | 0.92 | % | 1.34 | % | |||||||||
Allowance for originated loans as a % of originated portfolio loans | 1.15 | % | 1.47 | % | |||||||||
Nonperforming assets to total assets, end of period | 1.61 | % | 2.49 | % | |||||||||
Originated nonperforming assets to total assets, end of period | 0.88 | % | 1.16 | % | |||||||||
Annualized net charge-offs to total average portfolio loans | 0.08 | % | 0.82 | % | |||||||||
SELECTED FINANCIAL DATA | |||||||||||||
Gain (loss) on sale of investment securities, net | $ | 49 | $ | (565 | ) | ||||||||
Insurance settlement income | — | 768 | |||||||||||
Fair value accretion | 4,809 | 3,456 | |||||||||||
OREO valuation adjustments, net of FDIC reimbursement | 814 | 635 | |||||||||||
Transaction-related expenses | 2,839 | 797 | |||||||||||
Goodwill and other intangible assets, net | 82,861 | 34,597 | |||||||||||
(1) See Reconciliation of Non-GAAP Financial Measures table for additional details. | |||||||||||||
9
PERFORMANCE SUMMARY |
BNC BANCORP |
(Dollars in thousands, except per share data, shares in thousands) |
(Unaudited) |
For the Three Months Ended | |||||||||||||||||||
SUMMARY INCOME STATEMENTS | March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | ||||||||||||||
Interest income | $ | 43,887 | $ | 42,915 | $ | 40,876 | $ | 38,633 | $ | 35,718 | |||||||||
Interest expense | 5,817 | 5,454 | 4,736 | 4,732 | 5,004 | ||||||||||||||
Net interest income | 38,070 | 37,461 | 36,140 | 33,901 | 30,714 | ||||||||||||||
Provision for loan losses | 110 | 1,001 | 1,304 | 2,140 | 2,561 | ||||||||||||||
Net interest income after provision for loan losses | 37,960 | 36,460 | 34,836 | 31,761 | 28,153 | ||||||||||||||
Non-interest income | 6,300 | 7,785 | 6,307 | 5,805 | 5,125 | ||||||||||||||
Non-interest expense | 31,991 | 32,366 | 29,828 | 29,512 | 24,771 | ||||||||||||||
Income before income tax expense | 12,269 | 11,879 | 11,315 | 8,054 | 8,507 | ||||||||||||||
Income tax expense | 3,511 | 3,374 | 3,047 | 1,921 | 2,023 | ||||||||||||||
Net income | $ | 8,758 | $ | 8,505 | $ | 8,268 | $ | 6,133 | $ | 6,484 | |||||||||
Net interest income, as reported | $ | 38,070 | $ | 37,461 | $ | 36,140 | $ | 33,901 | $ | 30,714 | |||||||||
Fully Taxable-Equivalent ("FTE") adjustment | 1,868 | 1,915 | 1,913 | 1,930 | 1,990 | ||||||||||||||
Net interest income, FTE | $ | 39,938 | $ | 39,376 | $ | 38,053 | $ | 35,831 | $ | 32,704 | |||||||||
PER SHARE DATA | |||||||||||||||||||
Earnings per share, basic | $ | 0.27 | $ | 0.28 | $ | 0.28 | $ | 0.21 | $ | 0.24 | |||||||||
Earnings per share, diluted | 0.27 | 0.28 | 0.28 | 0.21 | 0.24 | ||||||||||||||
Period-end common shares outstanding | 32,716 | 32,599 | 29,475 | 29,721 | 27,324 | ||||||||||||||
Weighted average participating common shares: | |||||||||||||||||||
Basic | 32,681 | 30,505 | 29,472 | 28,877 | 27,317 | ||||||||||||||
Diluted | 32,754 | 30,599 | 29,567 | 29,010 | 27,460 | ||||||||||||||
PERFORMANCE RATIOS | |||||||||||||||||||
Return on average assets | 0.87 | % | 0.89 | % | 0.89 | % | 0.69 | % | 0.83 | % | |||||||||
Operating return on average assets (1) | 1.04 | % | 1.07 | % | 1.04 | % | 0.95 | % | 0.87 | % | |||||||||
Return on average common equity | 9.01 | % | 9.59 | % | 10.03 | % | 7.31 | % | 9.70 | % | |||||||||
Return on average tangible common equity (1) | 12.12 | % | 12.57 | % | 13.03 | % | 9.21 | % | 11.53 | % | |||||||||
Operating return on average tangible common equity (1) | 14.41 | % | 15.08 | % | 15.17 | % | 12.43 | % | 12.17 | % | |||||||||
Net interest margin (FTE) | 4.37 | % | 4.55 | % | 4.54 | % | 4.54 | % | 4.61 | % | |||||||||
Average equity to average assets | 9.62 | % | 9.23 | % | 8.83 | % | 9.50 | % | 8.70 | % | |||||||||
Allowance for loan losses as a % of portfolio loans | 0.92 | % | 0.99 | % | 1.11 | % | 1.13 | % | 1.34 | % | |||||||||
Allowance for originated loans as a % of originated portfolio loans | 1.15 | % | 1.25 | % | 1.32 | % | 1.37 | % | 1.47 | % | |||||||||
Nonperforming assets to total assets, end of period | 1.61 | % | 1.65 | % | 1.99 | % | 2.34 | % | 2.49 | % | |||||||||
Originated nonperforming assets to total assets, end of period | 0.88 | % | 0.80 | % | 0.90 | % | 1.03 | % | 1.16 | % | |||||||||
Annualized net charge-offs to total average portfolio loans | 0.08 | % | 0.13 | % | 0.05 | % | 0.32 | % | 0.82 | % | |||||||||
SELECTED FINANCIAL DATA | |||||||||||||||||||
Gain (loss) on sale of investment securities, net | $ | 49 | $ | — | $ | 54 | $ | — | $ | (565 | ) | ||||||||
Loss on extinguishment of debt | — | 613 | — | — | — | ||||||||||||||
Insurance settlement income | — | — | — | — | 768 | ||||||||||||||
Fair value accretion | 4,809 | 4,867 | 3,575 | 2,981 | 3,456 | ||||||||||||||
OREO valuation adjustments, net of FDIC reimbursement | 814 | 866 | 1,022 | 1,313 | 635 | ||||||||||||||
Transaction-related expenses | 2,839 | 2,231 | 2,325 | 3,601 | 797 | ||||||||||||||
Goodwill and other intangible assets, net | 82,861 | 83,701 | 61,716 | 62,406 | 34,597 | ||||||||||||||
(1) See Reconciliation of Non-GAAP Financial Measures table for additional details. | |||||||||||||||||||
10
PERFORMANCE SUMMARY |
BNC BANCORP |
(Dollars in thousands) |
(Unaudited) |
As of | ||||||||||
SELECTED BALANCE SHEET DATA | March 31, 2015 | December 31, 2014 | % Change | |||||||
Portfolio loans: | ||||||||||
Originated loans | $ | 2,262,601 | $ | 2,116,441 | 6.9 | % | ||||
Acquired loans | 913,236 | 958,657 | (4.7 | )% | ||||||
Allowance for loan losses | (29,351 | ) | (30,399 | ) | (3.4 | )% | ||||
Net portfolio loans | 3,146,486 | 3,044,699 | 3.3 | % | ||||||
Loans held for sale | 25,505 | 37,280 | (31.6 | )% | ||||||
Investment securities | 515,325 | 506,382 | 1.8 | % | ||||||
Total interest-earning assets | 3,778,586 | 3,669,857 | 3.0 | % | ||||||
Total assets | 4,173,463 | 4,072,508 | 2.5 | % | ||||||
Deposits: | ||||||||||
Non-interest bearing deposits | 544,189 | 534,792 | 1.8 | % | ||||||
Interest-bearing demand and savings | 1,685,200 | 1,657,931 | 1.6 | % | ||||||
Time deposits | 1,323,537 | 1,203,674 | 10.0 | % | ||||||
Total deposits | 3,552,926 | 3,396,397 | 4.6 | % | ||||||
Borrowed funds | 195,659 | 261,748 | (25.2 | )% | ||||||
Total interest-bearing liabilities | 3,204,395 | 3,123,353 | 2.6 | % | ||||||
Shareholders' equity: | ||||||||||
Common equity | 389,025 | 380,206 | 2.3 | % | ||||||
Accumulated other comprehensive income | 10,087 | 10,182 | (0.9 | )% | ||||||
Total shareholders' equity | 399,112 | 390,388 | 2.2 | % | ||||||
As of | |||||||||||||||||||
SELECTED BALANCE SHEET DATA | March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | ||||||||||||||
Portfolio loans: | |||||||||||||||||||
Originated loans | $ | 2,262,601 | $ | 2,116,441 | $ | 2,021,792 | $ | 1,865,024 | $ | 1,765,248 | |||||||||
Acquired loans | 913,236 | 958,657 | 741,877 | 805,275 | 538,827 | ||||||||||||||
Allowance for loan losses | (29,351 | ) | (30,399 | ) | (30,722 | ) | (30,129 | ) | (30,880 | ) | |||||||||
Net portfolio loans | 3,146,486 | 3,044,699 | 2,732,947 | 2,640,170 | 2,273,195 | ||||||||||||||
Loans held for sale | 25,505 | 37,280 | 20,906 | 23,714 | 18,895 | ||||||||||||||
Investment securities | 515,325 | 506,382 | 489,263 | 501,626 | 487,905 | ||||||||||||||
Total interest-earning assets | 3,778,586 | 3,669,857 | 3,354,964 | 3,282,682 | 2,888,886 | ||||||||||||||
Total assets | 4,173,463 | 4,072,508 | 3,735,816 | 3,683,230 | 3,205,951 | ||||||||||||||
Deposits: | |||||||||||||||||||
Non-interest bearing deposits | 544,189 | 534,792 | 482,859 | 464,682 | 350,415 | ||||||||||||||
Interest-bearing demand and savings | 1,685,200 | 1,657,931 | 1,495,186 | 1,504,397 | 1,362,454 | ||||||||||||||
Time deposits | 1,323,537 | 1,203,674 | 1,106,163 | 1,155,569 | 1,043,457 | ||||||||||||||
Total deposits | 3,552,926 | 3,396,397 | 3,084,208 | 3,124,648 | 2,756,326 | ||||||||||||||
Borrowed funds | 195,659 | 261,748 | 298,642 | 209,449 | 149,491 | ||||||||||||||
Total interest-bearing liabilities | 3,204,395 | 3,123,353 | 2,899,990 | 2,869,415 | 2,555,402 | ||||||||||||||
Shareholders' equity: | |||||||||||||||||||
Common equity | 389,025 | 380,206 | 320,433 | 318,624 | 273,690 | ||||||||||||||
Accumulated other comprehensive income | 10,087 | 10,182 | 10,214 | 8,212 | 6,818 | ||||||||||||||
Total shareholders' equity | 399,112 | 390,388 | 330,647 | 326,836 | 280,508 | ||||||||||||||
PERFORMANCE SUMMARY |
BNC BANCORP |
(Dollars in thousands) |
(Unaudited) |
For the Three Months Ended | |||||||||||||||||||
SELECTED AVERAGE BALANCE SHEET DATA | March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | ||||||||||||||
Portfolio loans | $ | 3,128,992 | $ | 2,877,833 | $ | 2,721,425 | $ | 2,553,931 | $ | 2,288,490 | |||||||||
Investment securities | 495,587 | 484,092 | 491,278 | 496,221 | 509,740 | ||||||||||||||
Total interest-earning assets | 3,708,252 | 3,436,018 | 3,322,970 | 3,165,865 | 2,879,546 | ||||||||||||||
Total assets | 4,097,199 | 3,809,989 | 3,705,918 | 3,540,758 | 3,181,723 | ||||||||||||||
Deposits: | |||||||||||||||||||
Non-interest bearing deposits | 532,348 | 519,062 | 469,712 | 402,105 | 335,416 | ||||||||||||||
Interest-bearing demand and savings | 1,654,989 | 1,545,039 | 1,513,574 | 1,457,797 | 1,323,324 | ||||||||||||||
Time deposits | 1,275,326 | 1,122,956 | 1,126,903 | 1,163,864 | 1,061,294 | ||||||||||||||
Total deposits | 3,462,663 | 3,187,057 | 3,110,189 | 3,023,766 | 2,720,034 | ||||||||||||||
Borrowed funds | 216,182 | 246,229 | 244,341 | 158,288 | 165,499 | ||||||||||||||
Total interest-bearing liabilities | 3,146,497 | 2,914,224 | 2,884,818 | 2,779,949 | 2,550,117 | ||||||||||||||
Shareholders' equity | 394,034 | 351,695 | 327,138 | 336,297 | 276,736 | ||||||||||||||
(Dollars in millions) | |||||||||||
LOAN PORTFOLIO MIX | March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||
Residential construction | $ | 78.0 | $ | 73.2 | $ | 34.3 | |||||
Presold | 49.7 | 41.0 | 17.5 | ||||||||
Speculative | 28.3 | 32.2 | 16.8 | ||||||||
Commercial construction | 176.6 | 203.1 | 123.9 | ||||||||
Residential and commercial A&D | 12.2 | 13.3 | 12.5 | ||||||||
Land | 92.3 | 98.2 | 88.7 | ||||||||
Residential Buildable Lots | 26.9 | 27.4 | 22.0 | ||||||||
Commercial Buildable Lots | 24.6 | 25.9 | 12.9 | ||||||||
Land Held for Development | 23.9 | 25.6 | 31.1 | ||||||||
Raw and Agricultural Land | 16.9 | 19.3 | 22.7 | ||||||||
Commercial Real Estate | 1,713.0 | 1,585.1 | 1,363.2 | ||||||||
Multi-family | 100.2 | 82.6 | 67.7 | ||||||||
Farmland | 4.6 | 5.2 | 1.0 | ||||||||
Owner occupied | 614.7 | 590.6 | 483.0 | ||||||||
Non-owner occupied | 993.5 | 906.7 | 811.5 | ||||||||
Commercial and industrial | 199.0 | 192.3 | 162.1 | ||||||||
Residential mortgage | 867.0 | 872.4 | 487.2 | ||||||||
Consumer | 16.2 | 16.4 | 15.9 | ||||||||
Leases | 21.5 | 21.1 | 16.3 | ||||||||
Total portfolio loans | $ | 3,175.8 | $ | 3,075.1 | $ | 2,304.1 | |||||
11
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
BNC BANCORP
(Dollars in thousands, except per share data, shares in thousands)
(Unaudited)
For the Three Months Ended | |||||||||||
Operating Earnings per Share, Diluted (1) | March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||
Net income (GAAP) | $ | 8,758 | $ | 8,505 | $ | 6,484 | |||||
Add: Transaction-related charges, net of tax | 1,789 | 1,406 | 502 | ||||||||
Loss on extinguishment of debt, net of tax | — | 386 | — | ||||||||
Less: Gain (loss) on sale of investment securities, net of tax | 31 | — | (356 | ) | |||||||
Insurance settlement, net of tax | — | — | 484 | ||||||||
Operating earnings (non-GAAP) | 10,516 | 10,297 | 6,858 | ||||||||
Weighted average fully diluted shares outstanding | 32,754 | 30,599 | 27,460 | ||||||||
Operating earnings per share, diluted (non-GAAP) | $ | 0.32 | $ | 0.34 | $ | 0.25 | |||||
For the Three Months Ended | |||||||||||
Adjusted Non-interest Expense (1) | March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||
Non-interest expense (GAAP) | $ | 31,991 | $ | 32,366 | $ | 24,771 | |||||
Less: Transaction-related expenses | 2,839 | 2,231 | 797 | ||||||||
Loss on extinguishment of debt | — | 613 | — | ||||||||
Adjusted non-interest expense (non-GAAP) | $ | 29,152 | $ | 29,522 | $ | 23,974 | |||||
As of | |||||||
Tangible Common Book Value per Share (2) | March 31, 2015 | March 31, 2014 | |||||
Shareholders' equity (GAAP) | $ | 399,112 | $ | 280,508 | |||
Less: Intangible assets | 82,861 | 34,597 | |||||
Tangible common shareholders equity (non-GAAP) | 316,251 | 245,911 | |||||
Common shares outstanding | 32,716 | 27,324 | |||||
Tangible common book value per share (non-GAAP) | $ | 9.67 | $ | 9.00 | |||
For the Three Months Ended | |||||||||||||||||||
Return on Average Tangible Common Equity (2) | March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | ||||||||||||||
Net income (GAAP) | $ | 8,758 | $ | 8,505 | $ | 8,268 | $ | 6,133 | $ | 6,484 | |||||||||
Plus: Amortization of intangibles, net of tax | 529 | 453 | 435 | 354 | 232 | ||||||||||||||
Tangible net income available to common shareholders (non-GAAP) | 9,287 | 8,958 | 8,703 | 6,487 | 6,716 | ||||||||||||||
Average common shareholders equity | 394,034 | 351,695 | 327,138 | 336,297 | 271,061 | ||||||||||||||
Less: Average intangible assets | 83,279 | 68,954 | 62,101 | 53,826 | 34,775 | ||||||||||||||
Average tangible common shareholders' equity (non-GAAP) | 310,755 | 282,741 | 265,037 | 282,471 | 236,286 | ||||||||||||||
Return on average tangible common equity (non-GAAP) | 12.12 | % | 12.57 | % | 13.03 | % | 9.21 | % | 11.53 | % | |||||||||
12
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
BNC BANCORP
(Dollars in thousands, except per share data, shares in thousands)
(Unaudited)
For the Three Months Ended | |||||||||||||||||||
Operating Return on Average Assets (1) | March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | ||||||||||||||
Net income (GAAP) | $ | 8,758 | $ | 8,505 | $ | 8,268 | $ | 6,133 | $ | 6,484 | |||||||||
Plus: Transaction-related expenses, net of tax | 1,789 | 1,406 | 1,464 | 2,269 | 502 | ||||||||||||||
Loss on extinguishment of debt, net of tax | — | 386 | — | — | — | ||||||||||||||
Less: Gain (loss) on sale of investment securities, net of tax | 31 | — | 34 | — | (356 | ) | |||||||||||||
Insurance settlement, net of tax | — | — | — | — | 484 | ||||||||||||||
Operating earnings (non-GAAP) | 10,516 | 10,297 | 9,698 | 8,402 | 6,858 | ||||||||||||||
Average assets | 4,097,199 | 3,809,989 | 3,705,918 | 3,540,758 | 3,181,723 | ||||||||||||||
Operating return on average assets (non-GAAP) | 1.04 | % | 1.07 | % | 1.04 | % | 0.95 | % | 0.87 | % | |||||||||
For the Three Months Ended | |||||||||||||||||||
Operating Return on Average Tangible Common Equity (1) | March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | ||||||||||||||
Net income (GAAP) | $ | 8,758 | $ | 8,505 | $ | 8,268 | $ | 6,133 | $ | 6,484 | |||||||||
Plus: Amortization of intangibles, net of tax | 529 | 453 | 435 | 354 | 232 | ||||||||||||||
Transaction-related expenses, net of tax | 1,789 | 1,406 | 1,464 | 2,269 | 502 | ||||||||||||||
Loss on extinguishment of debt, net of tax | — | 386 | — | — | — | ||||||||||||||
Less: Gain (loss) on sale of investment securities, net of tax | 31 | — | 34 | — | (356 | ) | |||||||||||||
Insurance settlement, net of tax | — | — | — | — | 484 | ||||||||||||||
Operating tangible net income available to common shareholders (non-GAAP) | 11,045 | 10,750 | 10,133 | 8,756 | 7,090 | ||||||||||||||
Average common shareholders equity | 394,034 | 351,695 | 327,138 | 336,297 | 271,061 | ||||||||||||||
Less: Average intangible assets | 83,279 | 68,954 | 62,101 | 53,826 | 34,775 | ||||||||||||||
Average tangible common shareholders' equity (non-GAAP) | 310,755 | 282,741 | 265,037 | 282,471 | 236,286 | ||||||||||||||
Operating return on average tangible common equity (non-GAAP) | 14.41 | % | 15.08 | % | 15.17 | % | 12.43 | % | 12.17 | % | |||||||||
(1) Management uses these measures in their analysis of the Company's performance and believes these 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.
(2) Management believes investors use this measure to evaluate the Company's performance.
13