Select Bancorp, Inc. (the “Company”) (NASDAQ:SLCT), the holding
company for Select Bank & Trust, today reported net income for
the year ended December 31, 2017 of $3.2 million and basic and
diluted earnings per share of $0.27, compared to net income of $6.8
million and basic and diluted earnings per share of $0.58 for the
year ended December 31, 2016.
For the fourth quarter of 2017, the Company
reported net loss of $2.0 million, and basic and diluted loss per
share of $(0.17), compared to net income of $1.6 million and basic
and diluted earnings per share of $0.14 for the fourth quarter of
2016.
Embedded in the Company’s net income numbers for
the year and quarter ended December 31, 2017, are net after tax
merger expenses of $1.5 million and $1.3 million, respectively,
related to the acquisition of Premara Financial, Inc. and its
subsidiary bank, Carolina Premier Bank, which closed in December
2017. In addition, due to the new tax legislation signed into law
on December 22, 2017, the Company was required to calculate a “tax
re-measurement” for the associated rate change for its deferred
taxes. This tax re-calculation resulted in an increase of
approximately $2.5 million of income tax expense for the year and
fourth quarter of 2017, which directly impacted the Company’s
reported results for those periods.
Total assets, deposits, and total loans for the
Company as of December 31, 2017 were $1.2 billion, $995.0 million,
and $982.6 million, respectively, compared to total assets of
$846.6 million, total deposits of $679.7 million, and total loans
of $677.2 million as of the same date in 2016. The merger
represented increases of $278.8 million in total assets, $198.4
million in gross loans, $18.0 million in goodwill and $226.3
million in deposits. Organic growth accounted for $68.7 million in
total assets, $107.0 million in gross loans and $89.1 million in
deposits.
For the twelve months ended December 31, 2017,
return on average assets was 0.35% and return on average equity was
2.93%, compared to 0.81% and 6.61%, respectively, for the twelve
months ended December 31, 2016.
Non-performing loans decreased to $7.0 million
at December 31, 2017 from $9.4 million at December 31, 2016.
Non-performing loans equaled 0.71% of loans at December 31, 2017,
decreasing from 1.02% of loans at December 31, 2016. Foreclosed
real estate equaled $1.3 million at December 31, 2017, compared to
$599,000 at December 31, 2016. For the year ended December 31,
2017, net charge-offs were $944,000, or 0.13% of average loans,
compared to net charge offs of $126,000, or 0.02% of average loans
in 2016. At December 31, 2017, the allowance for loan losses was
$8.8 million, or 0.90% of total loans, as compared to $8.4 million,
or 1.24% of total loans, at December 31, 2016.
Net interest margin was 4.09% and 4.14% for the
year and quarter ending December 31, 2017, as compared to 4.06% and
3.98% for the year and quarter ending December 31, 2016.
“Our strategy has been growth-oriented and
efficiency driven, while delivering value to our shareholders,”
President and CEO William L. Hedgepeth II said. “We continued
that mission in 2017. While our 2017 results were impacted by
the change in tax law during the 2017 fourth quarter, the required
tax re-measurement is a non-cash flow expense. Ultimately, we
expect the reduction in the corporate tax rate will have long-term
benefits for our net income and should positively impact our
operating performance in the quarters to come.”
Among the major highlights of 2017 were the
acquisition of Premara Financial, Inc. and the accompanying entry
into the Charlotte market and into South Carolina, the opening of a
new branch in Wilmington in the Mayfaire district, and the opening
of Select Mortgage, a division of Select Bank & Trust.
“It has been our goal for some time to expand,”
Hedgepeth continued, “2017 was a year for growth and expansion. The
merger closed on December 15, 2017, and Select has added four
banking offices, one in Charlotte and three in the South Carolina
communities of Rock Hill, Blacksburg and Six Mile. We expect that
the recent merger will allow us to leverage our resources in ways
neither bank could achieve on its own. We are also excited about
the growth we have already experienced from our new Wilmington
office, and we believe adding mortgages to our portfolio of
products and services allows us to offer a customer all the
financial services they need at their local community bank.”
Select Bank & Trust has 18 branch offices in
these North Carolina communities: Dunn, Burlington, Charlotte,
Clinton, Elizabeth City, Fayetteville, Goldsboro, Greenville,
Leland, Lillington, Lumberton, Morehead City, Raleigh, Washington,
and Wilmington and in the following South Carolina communities:
Blacksburg, Rock Hill and Six Mile.
Important Note Regarding Forward-Looking
StatementsThe information as of and for the quarter and
year ended December 31, 2017, 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, revenue, 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: our
ability to manage growth; substantial changes in financial markets;
our ability to obtain the synergies and expense efficiencies
anticipated from our recent merger with Carolina Premier Bank;
regulatory changes; the impact of the new the tax law on our
earnings, including any subsequent adjustments to the valuation of
our deferred tax assets and liabilities; 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. 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.
| |
| Select Bancorp,
Inc. |
| Selected
Financial Information and Other Data |
| ($ in
thousands, except per share data) |
| |
At or for the three months ended (unaudited) |
|
At or for the twelve months ended |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
December 31, 2017 |
|
September 30, 2017 |
|
June 30,2017 |
|
March 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2015 |
|
|
Summary of Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total
interest income |
$ |
10,981 |
|
|
$ |
10,042 |
|
|
$ |
9,469 |
|
|
$ |
9,125 |
|
|
$ |
8,877 |
|
|
$ |
39,617 |
|
|
$ |
34,709 |
|
|
$ |
33,341 |
|
|
| Total
interest expense |
|
1,505 |
|
|
|
1,357 |
|
|
|
1,197 |
|
|
|
1,047 |
|
|
|
985 |
|
|
|
5,106 |
|
|
|
3,733 |
|
|
|
3,542 |
|
|
| Net
interest income |
|
9,476 |
|
|
|
8,685 |
|
|
|
8,272 |
|
|
|
8,078 |
|
|
|
7,892 |
|
|
|
34,511 |
|
|
|
30,976 |
|
|
|
29,799 |
|
|
| Provision
for (recovery of) loan losses |
|
276 |
|
|
|
202 |
|
|
|
1,083 |
|
|
|
(194 |
) |
|
|
669 |
|
|
|
1,367 |
|
|
|
1,516 |
|
|
|
890 |
|
|
| Net
interest income after provision |
|
9,200 |
|
|
|
8,483 |
|
|
|
7,189 |
|
|
|
8,272 |
|
|
|
7,223 |
|
|
|
33,144 |
|
|
|
29,460 |
|
|
|
28,909 |
|
|
|
Noninterest income |
|
786 |
|
|
|
778 |
|
|
|
778 |
|
|
|
730 |
|
|
|
740 |
|
|
|
3,072 |
|
|
|
3,222 |
|
|
|
3,292 |
|
|
|
Merger/Acquisition related expenses |
|
1,888 |
|
|
|
278 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,166 |
|
|
|
- |
|
|
|
378 |
|
|
|
Noninterest expense |
|
7,207 |
|
|
|
6,161 |
|
|
|
5,980 |
|
|
|
5,805 |
|
|
|
5,511 |
|
|
|
25,153 |
|
|
|
22,281 |
|
|
|
21,852 |
|
|
| Income
before income taxes |
|
891 |
|
|
|
2,822 |
|
|
|
1,987 |
|
|
|
3,197 |
|
|
|
2,452 |
|
|
|
8,897 |
|
|
|
10,401 |
|
|
|
9,971 |
|
|
| Provision
for income taxes |
|
2,936 |
|
|
|
1,043 |
|
|
|
651 |
|
|
|
1,082 |
|
|
|
847 |
|
|
|
5,712 |
|
|
|
3,647 |
|
|
|
3,418 |
|
|
| Net
Income (loss) |
|
(2,045 |
) |
|
|
1,779 |
|
|
|
1,336 |
|
|
|
2,115 |
|
|
|
1,605 |
|
|
|
3,185 |
|
|
|
6,654 |
|
|
|
6,553 |
|
|
| Dividends
on Preferred Stock |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4 |
|
|
|
77 |
|
|
| Net
income available to common shareholders (loss) |
$ |
(2,045 |
) |
|
$ |
1,779 |
|
|
$ |
1,336 |
|
|
$ |
2,115 |
|
|
$ |
1,605 |
|
|
$ |
3,185 |
|
|
$ |
6,750 |
|
|
$ |
6,476 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Share and Per
Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings
(loss) per share - basic |
$ |
(0.17 |
) |
|
$ |
0.15 |
|
|
$ |
0.11 |
|
|
$ |
0.18 |
|
|
$ |
0.14 |
|
|
$ |
0.27 |
|
|
$ |
0.58 |
|
|
$ |
0.56 |
|
|
| Earnings
(loss) per share - diluted |
$ |
(0.17 |
) |
|
$ |
0.15 |
|
|
$ |
0.11 |
|
|
$ |
0.18 |
|
|
$ |
0.14 |
|
|
$ |
0.27 |
|
|
$ |
0.58 |
|
|
$ |
0.56 |
|
|
| Book
value per share |
$ |
9.72 |
|
|
$ |
9.42 |
|
|
$ |
9.26 |
|
|
$ |
9.14 |
|
|
$ |
8.95 |
|
|
$ |
9.72 |
|
|
$ |
8.95 |
|
|
$ |
8.38 |
|
|
| Tangible
book value per share |
$ |
7.72 |
|
|
$ |
8.78 |
|
|
$ |
8.61 |
|
|
$ |
8.48 |
|
|
$ |
8.29 |
|
|
$ |
7.72 |
|
|
$ |
8.29 |
|
|
$ |
7.67 |
|
|
| Ending
shares outstanding |
|
14,009,137 |
|
|
|
11,662,621 |
|
|
|
11,662,471 |
|
|
|
11,661,571 |
|
|
|
11,645,413 |
|
|
|
14,009,137 |
|
|
|
11,645,413 |
|
|
|
11,583,011 |
|
|
| Weighted
average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
12,071,392 |
|
|
|
11,662,580 |
|
|
|
11,662,117 |
|
|
|
11,652,612 |
|
|
|
11,636,647 |
|
|
|
11,763,050 |
|
|
|
11,610,705 |
|
|
|
11,502,800 |
|
|
|
Diluted |
|
12,071,392 |
|
|
|
11,717,533 |
|
|
|
11,727,110 |
|
|
|
11,714,336 |
|
|
|
11,677,958 |
|
|
|
11,826,977 |
|
|
|
11,655,111 |
|
|
|
11,567,811 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selected
Performance Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return on
average assets(2) |
|
(0.81 |
)% |
|
|
0.77 |
% |
|
|
0.60 |
% |
|
|
1.00 |
% |
|
|
0.76 |
% |
|
|
0.35 |
% |
|
|
0.81 |
% |
|
|
0.86 |
% |
|
| Return on
average equity(2) |
|
(7.00 |
)% |
|
|
6.44 |
% |
|
|
4.96 |
% |
|
|
8.10 |
% |
|
|
6.12 |
% |
|
|
2.93 |
% |
|
|
6.61 |
% |
|
|
6.42 |
% |
|
| Net
interest margin |
|
4.14 |
% |
|
|
4.19 |
% |
|
|
4.18 |
% |
|
|
4.14 |
% |
|
|
3.98 |
% |
|
|
4.09 |
% |
|
|
4.06 |
% |
|
|
4.38 |
% |
|
|
Efficiency ratio (1) |
|
70.23 |
% |
|
|
65.11 |
% |
|
|
66.08 |
% |
|
|
65.91 |
% |
|
|
63.84 |
% |
|
|
66.93 |
% |
|
|
65.15 |
% |
|
|
66.04 |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Period End
Balance Sheet Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross
Loans |
$ |
982,626 |
|
|
$ |
763,432 |
|
|
$ |
738,021 |
|
|
$ |
706,758 |
|
|
$ |
677,195 |
|
|
$ |
982,626 |
|
|
$ |
677,195 |
|
|
$ |
617,398 |
|
|
| Total
interest earning assets |
|
1,063,322 |
|
|
|
833,766 |
|
|
|
816,008 |
|
|
|
809,164 |
|
|
|
770,288 |
|
|
|
1,063,322 |
|
|
|
770,288 |
|
|
|
726,408 |
|
|
|
Goodwill |
|
24,904 |
|
|
|
6,931 |
|
|
|
6,931 |
|
|
|
6,931 |
|
|
|
6,931 |
|
|
|
24,904 |
|
|
|
6,931 |
|
|
|
6,931 |
|
|
| Core
Deposit Intangible |
|
3,101 |
|
|
|
547 |
|
|
|
629 |
|
|
|
716 |
|
|
|
810 |
|
|
|
3,101 |
|
|
|
810 |
|
|
|
1,241 |
|
|
| Total
Assets |
|
1,194,135 |
|
|
|
922,749 |
|
|
|
906,524 |
|
|
|
879,624 |
|
|
|
846,640 |
|
|
|
1,194,135 |
|
|
|
846,640 |
|
|
|
817,015 |
|
|
|
Deposits |
|
995,044 |
|
|
|
775,022 |
|
|
|
739,653 |
|
|
|
713,138 |
|
|
|
679,661 |
|
|
|
995,044 |
|
|
|
679,661 |
|
|
|
651,161 |
|
|
|
Short-term debt |
|
28,279 |
|
|
|
22,366 |
|
|
|
33,559 |
|
|
|
33,306 |
|
|
|
37,090 |
|
|
|
28,279 |
|
|
|
37,090 |
|
|
|
29,673 |
|
|
| Long-term
debt |
|
19,372 |
|
|
|
12,372 |
|
|
|
22,839 |
|
|
|
22,939 |
|
|
|
22,039 |
|
|
|
19,372 |
|
|
|
23,039 |
|
|
|
28,703 |
|
|
|
Shareholders' equity |
|
136,115 |
|
|
|
109,819 |
|
|
|
108,017 |
|
|
|
106,562 |
|
|
|
104,273 |
|
|
|
136,115 |
|
|
|
104,273 |
|
|
|
104,702 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selected
Average Balances: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross
Loans |
$ |
809,608 |
|
|
$ |
748,699 |
|
|
$ |
715,366 |
|
|
$ |
686,800 |
|
|
$ |
663,213 |
|
|
$ |
732,089 |
|
|
$ |
639,412 |
|
|
$ |
578,759 |
|
|
| Total
interest earning assets |
|
901,324 |
|
|
|
826,595 |
|
|
|
799,240 |
|
|
|
776,496 |
|
|
|
778,477 |
|
|
|
813,773 |
|
|
|
744,024 |
|
|
|
686,663 |
|
|
| Core
Deposit Intangible |
|
1,007 |
|
|
|
589 |
|
|
|
673 |
|
|
|
764 |
|
|
|
862 |
|
|
|
640 |
|
|
|
1,020 |
|
|
|
1,330 |
|
|
| Total
Assets |
|
997,450 |
|
|
|
914,986 |
|
|
|
887,412 |
|
|
|
856,712 |
|
|
|
844,162 |
|
|
|
898,943 |
|
|
|
829,315 |
|
|
|
765,284 |
|
|
|
Deposits |
|
827,408 |
|
|
|
754,169 |
|
|
|
719,976 |
|
|
|
689,795 |
|
|
|
679,404 |
|
|
|
738,310 |
|
|
|
665,764 |
|
|
|
607,214 |
|
|
|
Short-term debt |
|
23,476 |
|
|
|
32,703 |
|
|
|
33,413 |
|
|
|
35,048 |
|
|
|
33,032 |
|
|
|
34,523 |
|
|
|
32,111 |
|
|
|
32,316 |
|
|
| Long-term
debt |
|
13,676 |
|
|
|
15,633 |
|
|
|
22,871 |
|
|
|
22,989 |
|
|
|
23,089 |
|
|
|
14,239 |
|
|
|
25,739 |
|
|
|
20,147 |
|
|
|
Shareholders' equity |
|
115,874 |
|
|
|
109,537 |
|
|
|
108,071 |
|
|
|
105,860 |
|
|
|
104,404 |
|
|
|
108,709 |
|
|
|
102,110 |
|
|
|
102,068 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Asset Quality
Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans |
$ |
6,978 |
|
|
$ |
6,153 |
|
|
$ |
6,159 |
|
|
$ |
7,956 |
|
|
$ |
9,430 |
|
|
$ |
6,978 |
|
|
$ |
9,430 |
|
|
$ |
8,712 |
|
|
| Other
real estate owned |
|
1,258 |
|
|
|
2,093 |
|
|
|
2,702 |
|
|
|
883 |
|
|
|
599 |
|
|
|
1,258 |
|
|
|
599 |
|
|
|
1,401 |
|
|
| Allowance
for loan losses |
|
8,835 |
|
|
|
8,647 |
|
|
|
8,488 |
|
|
|
8,022 |
|
|
|
8,411 |
|
|
|
8,835 |
|
|
|
8,411 |
|
|
|
7,021 |
|
|
|
Nonperforming loans (3) to period-end
loans |
|
0.71 |
% |
|
|
0.81 |
% |
|
|
0.83 |
% |
|
|
1.13 |
% |
|
|
1.39 |
% |
|
|
0.71 |
% |
|
|
1.02 |
% |
|
|
1.41 |
% |
|
| Allowance
for loan losses to period-end loans |
|
0.90 |
% |
|
|
1.13 |
% |
|
|
1.15 |
% |
|
|
1.14 |
% |
|
|
1.24 |
% |
|
|
0.90 |
% |
|
|
1.24 |
% |
|
|
1.14 |
% |
|
|
Delinquency Ratio (4) |
|
0.63 |
% |
|
|
0.38 |
% |
|
|
0.07 |
% |
|
|
0.21 |
% |
|
|
0.44 |
% |
|
|
0.63 |
% |
|
|
0.44 |
% |
|
|
0.40 |
% |
|
| Net loan
charge-offs (recoveries) to average loans
(2) |
|
0.05 |
% |
|
|
0.02 |
% |
|
|
0.35 |
% |
|
|
0.12 |
% |
|
|
0.08 |
% |
|
|
0.13 |
% |
|
|
0.02 |
% |
|
|
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. |
Mark A. JeffriesExecutive Vice PresidentChief Financial Officer
Office: 910-892-7080 and Direct:
910-897-3603markj@SelectBank.comSelectBank.com
Select Bancorp (NASDAQ:SLCT)
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From Apr 2023 to Apr 2024
