SELECT BANCORP, INC. - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - SELECT BANCORP, INC.	v423899_8k.htm
EX-99.2 - EXHIBIT 99.2 - SELECT BANCORP, INC.	v423899_ex99-2.htm

Exhibit 99.1

FOR RELEASE:

November 3, 2015

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 REPORTS

THIRD QUARTER 2015 EARNINGS

DUNN, NC . . . Select Bancorp, Inc. (the “Company” NASDAQ: SLCT), the holding company for Select Bank & Trust, today reported net income of $1.4 million for the quarter ended September 30, 2015, and basic and diluted earnings per share of $0.12, compared to net income of $194,000 and basic and diluted earnings per share of $0.02 for the third quarter of 2014.

Total assets, deposits, and total loans for the Company as of September 30, 2015, were $786.5 million, $619.9 million, and $598.0 million, respectively, compared to total assets of $785.0 million, total deposits of $644.1 million, and total loans of $546.5 million as of the same date in 2014.

Commenting on third quarter 2015 results, William L. Hedgepeth II, President and CEO stated, “Our results for the third quarter were impacted by one-time expenses related to our acquisition of new branch offices in Morehead City and Leland, N.C., the combining of our Burlington and Gibsonville, N.C. offices, and the closing of our Ramsey Street Office in Fayetteville, N.C. While the costs associated with these initiatives decreased the Company’s non-interest income for the quarter by approximately $412 thousand, we believe our branch network, and our Company, will be better positioned to enhance efficiency and customer convenience going forward. Our previously announced acquisition of two new branches, one in Morehead City and the other in Leland near Wilmington, has received all required regulatory approvals and is scheduled to close during December. We are also pleased that the Company was able to report net income of approximately $1.4 million for the quarter, even after incurring the expense associated with these long-term investments in our franchise.”

For the nine months ended September 30, 2015, the Company recorded after-tax net income of $4.9 million compared to $1.8 million for the nine months ended September 30, 2014. Year to date basic and diluted earnings per share of $0.43 compared to $0.13 per share for the nine months ended September 30, 2014. Year to date return on average assets through September 30, 2015 is 0.87% (annualized) and year to date return on average equity is 6.50% (annualized), compared to 0.20% and 1.74%, respectively, for the nine months ended September 30, 2014.

Non-performing loans decreased to $10.9 million at September 30, 2015 from $11.9 million at December 31, 2014. Non-performing loans equaled 1.82% of loans at September 30, 2015, decreasing from 2.15% of loans at December 31, 2014. Foreclosed real estate equaled $1.6 million at December 31, 2014 and decreased to $1.0 million at September 30, 2015. For the quarter, recoveries were $107,000 or -0.02% of average loans, compared to a recovery of $139,000 or -0.10% of average loans in the fourth quarter of 2014. At September 30, 2015, the allowance for loan losses was $7.0 million or 1.18% of total loans, as compared to $6.8 million or 1.24% of total loans at December 31, 2014.

Mr. Hedgepeth concluded, "We are pleased with the Company’s year to date results of operations and continued asset quality and we look forward to bringing our “common sense banking” to Morehead City and Leland before year end. We continue to believe that Select is well positioned for the remainder of 2015 and beyond."

Select Bank & Trust has branch offices in these North Carolina communities: Dunn, Burlington, Clinton, Elizabeth City, Fayetteville, Goldsboro, Greenville, Lillington, Lumberton, Raleigh and Washington.

The information as of and for the quarter ended September 30, 2015, as presented is unaudited. 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, earnings per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, 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, our ability to manage growth, substantial changes in financial markets, regulatory changes, changes in interest rates, loss of deposits and loan demand to other savings and financial institutions, 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.

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Select Bancorp, Inc.

Selected Financial Information and Other Data

($ in thousands, except per share data)

	At or for the three months ended															At or for the twelve months ended

	September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014			December 31, 2014			December 31, 2013			December 31, 2012
Summary of Operations:
Total interest income	$	8,412		$	8,262		$	8,242		$	7,988		$	7,541		$	26,104		$	22,903		$	25,132
Total interest expense		878			835			939			1,141			1,169			4,519			5,258			6,632
Net interest income		7,534			7,427			7,303			6,847			6,372			21,585			17,645			18,500
Provision for (recovery of) loan losses		393			(139	)		130			177			105			(194	)		(325	)		(2,597	)
Net interest income after provision		7,141			7,566			7,173			6,670			6,267			21,779			17,970			21,097
Noninterest income		572			941			863			836			650			2,675			2,629			3,598
Merger/Acquisition related expenses		103			35			-			217			1,325			1,941			-			-
Noninterest expense		5,467			5,518			5,370			5,345			5,168			18,719			15,855			17,236
Income before income taxes		2,143			2,954			2,666			1,944			424			3,794			4,744			7,459
Provision for income taxes		792			1,133			923			666			230			1,437			1,803			2,822
Net Income		1,351			1,821			1,743			1,278			194			2,357			2,941			4,637
Dividends on Preferred Stock		19			19			19			19			19			38			-			-
Net income available to common shareholders	$	1,332		$	1,802		$	1,724		$	1,259		$	175		$	2,319		$	2,941		$	4,637
Share and Per Share Data:
Earnings per share - basic	$	0.12		$	0.16		$	0.15		$	0.11		$	0.02		$	0.26		$	0.43		$	0.67
Earnings per share - diluted	$	0.12		$	0.16		$	0.15		$	0.11		$	0.02		$	0.26		$	0.43		$	0.67
Book value per share	$	8.28		$	8.17		$	8.07		$	7.91		$	7.61		$	8.59		$	8.09		$	7.84
Tangible book value per share	$	7.58		$	7.45		$	7.33		$	7.16		$	7.01		$	7.83		$	8.07		$	7.79
Ending shares outstanding		11,577,111			11,499,398			11,458,561			11,377,980			11,349,368			11,377,980			6,921,352			6,913,636
Weighted average shares outstanding:
Basic		11,521,043			11,481,137			11,426,378			11,375,803			10,195,846			8,870,114			6,918,814			6,898,147
Diluted		11,582,724			11,548,878			11,510,147			11,475,865			10,312,085			8,974,384			6,919,760			6,898,377
Selected Performance Ratios:
Return on average assets⁽²⁾		0.69	%		0.98	%		0.94	%		0.65	%		0.10	%		0.37	%		0.53	%		0.81	%
Return on average equity⁽²⁾		5.21	%		7.22	%		7.11	%		5.23	%		0.82	%		3.12	%		5.28	%		8.79	%
Net interest margin		4.34	%		4.46	%		4.30	%		3.87	%		3.99	%		3.88	%		3.46	%		3.57	%
Efficiency ratio ⁽¹⁾		67.44	%		65.94	%		65.76	%		69.57	%		73.60	%		77.16	%		78.20	%		78.00	%
Period End Balance Sheet Data:
Loans, net of unearned income	$	597,969		$	573,729		$	558,923		$	552,038		$	546,475		$	552,038		$	346,500		$	367,891
Total Earning Assets		711,622			665,028			663,017			698,266			710,005			698,266			483,054			543,674
Goodwill		6,931			6,931			6,931			6,931			6,931			6,931			-			-
Core Deposit Intangible		1,196			1,320			1,470			1,625			1,786			1,625			182			298
Total Assets		786,495			742,443			748,371			766,121			784,983			766,121			525,646			585,453
Deposits		619,935			579,609			600,520			618,902			644,093			618,902			448,458			498,559
Short term debt		30,722			32,884			18,943			20,733			18,077			20,733			6,305			17,848
Long term debt		28,846			24,914			25,282			25,591			26,049			25,591			12,372			12,372
Shareholders' equity		103,545			101,552			100,076			97,685			93,995			97,685			56,004			54,179
Selected Average Balances:
Gross Loans	$	585,541		$	569,785		$	557,177		$	546,626		$	489,563		$	430,571		$	354,871		$	391,648
Total Earning Assets		689,166			669,586			672,655			702,818			632,922			565,264			511,597			532,193
Core Deposit Intangible		1,251			1,389			1,546			1,714			1,496			884			237			389
Total Assets		771,913			744,118			748,047			776,839			709,480			631,905			555,354			574,616
Deposits		607,722			588,328			600,601			632,633			582,825			523,954			470,526			481,387
Short term debt		35,012			28,212			19,298			19,790			14,652			9,957			13,879			17,848
Long term debt		22,631			22,895			25,444			25,818			22,343			20,494			12,372			12,372
Shareholders' equity		102,879			101,216			99,376			97,030			84,744			74,365			55,701			52,769
Asset Quality Ratios:
Nonperforming loans	$	10,899		$	11,702		$	13,473		$	11,876		$	12,375		$	11,876		$	15,856		$	12,030
Other real estate owned		1,007			1,030			1,187			1,585			1,687			1,585			2,008			2,833
Allowance for loan losses		7,032			6,842			6,919			6,844			6,529			6,844			7,054			7,897
Nonperforming loans ⁽³⁾ to period-end loans		1.82	%		2.04	%		2.41	%		2.15	%		2.26	%		2.15	%		4.58	%		3.27	%
Allowance for loan losses to period-end loans		1.18	%		1.19	%		1.24	%		1.24	%		1.19	%		1.24	%		2.04	%		2.15	%
Delinquency Ratio ⁽⁴⁾		0.36	%		0.32	%		0.23	%		0.91	%		0.36	%		0.91	%		0.25	%		0.32	%
Net loan charge-offs (recoveries) to average loans		0.14	%		-0.01	%		0.04	%		-0.10	%		0.02	%		-0.03	%		0.15	%		-0.12	%

(1)	Efficiency ratio is calculated as non-interest expenses divided by the sum of net interest income and non-interest income.
(2)	Annualized.
(3)	Nonperforming loans consist of non-accrual loans and restructured loans.
(4)	Delinquency Ratio includes loans 30-89 days past due and excludes non-accrual loans.

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