MOCKSVILLE, N.C., Nov. 5 /PRNewswire-FirstCall/ -- Bank of the
Carolinas Corporation (NASDAQ:BCAR) reported today financial
results for the three and nine month periods ended September 30,
2009. For the three month period ended September 30, 2009, the
Company reported net income of $782,000, as compared to a net loss
of $2,720,000 in the third quarter of 2008. Net income available to
common shareholders for the three months ended September 30, 2009
was $470,000, or $.12 per diluted share, compared to a net loss of
$.69 per common share in the 2008 quarter. For the nine month
period ended September 30, 2009, the Company reported a net loss of
$1,352,000 compared to a net loss of $2,984,000 for the same period
of 2008. The net loss available to common shareholders for the nine
month period of 2009 was $1,763,000, or $.45 per common share
compared to a net loss of $.76 per share incurred during the first
nine months of 2008. While the Company continues to be negatively
affected by the economic downturn, the third quarter of 2009 was
the most profitable since the third quarter of 2007. Improved
interest margins from lower funding costs, gains from sales of
securities and moderating provisions for loan losses were mainly
responsible for the improvement in the 2009 periods' results as
compared to 2008. Net interest income, the Company's most
significant source of revenue, totaled $4.1 million in the third
quarter of 2009, a 36.1% increase from the 2008 quarter. For the
first nine months of 2009 net interest income was $10.3 million, a
9.4% increase from the comparable period of 2008. These positive
results were due to increased interest margins principally brought
about by reduced cost of interest-bearing deposits. As the result
of the resolution of several large nonaccrual loans during the
third quarter of 2009, the Company's nonperforming assets decreased
by $6.3 million, or 28.8%, and totaled $15.5 million, or 2.33% of
total assets, at September 30, 2009. In comparison, non-performing
assets at September 30, 2008 were $15.1 million, or 2.64% of total
assets. The provision for loan losses totaled $1,046,000 for the
quarter ended September 30, 2009, a reduction of 66.8% from the
provision of $3,150,000 for the third quarter of 2008. For the
nine-month period of 2009 the loan loss provision totaled
$2,466,000, a 41.9% decline from the $4,245,000 provision recorded
in the previous year. The allowance for loan losses was 1.58% of
total loans as of September 30, 2009, and year-to-date annualized
net charge-offs were .85% of average loans outstanding. While the
level of nonperforming assets has declined and credit losses have
abated from 2008, we and the banking industry as a whole, continue
to face credit challenges. As always, we remain committed to
helping our customers weather the current economic storm to the
best of our ability while being aggressive in identifying troubled
assets in our portfolio. Non-interest expenses totaled $3,846,000
for the third quarter of 2009, a decrease of 7.1% from the
comparable quarter of 2008. For the nine months ended September 30,
2009 noninterest expenses were $12,817,000, an increase of 18.5%
from the same nine month period of 2008. The most significant
drivers in the cost increase for the nine-month period were
substantially higher costs related to foreclosed real estate and an
increase in FDIC insurance expense due to the increased assessment
rate levied on all banks this year. Non-interest income, exclusive
of securities gains, remained relatively flat for the three and
nine month periods. Total assets at September 30, 2009 amounted to
$664.1 million, an increase of 16.3% when compared to the $570.9
million as of September 30, 2008. Loans totaled $391.6 million, a
decline of 3.8% from a year earlier, while deposits grew 20.5% over
the prior year to $545.2 million. The Company continues to be
well-capitalized with a Tier 1 Leverage Ratio of 7.73%, a Tier 1
capital to risk-weighted assets ratio of 11.22% and a Total Capital
to risk-weighted assets ratio of 13.05% at the end of the third
quarter of 2009. Bank of the Carolinas Corporation is the holding
company for Bank of the Carolinas, a North Carolina chartered bank
headquartered in Mocksville, NC with offices in Advance, Asheboro,
Cleveland, Concord, Harrisburg, King, Landis, Lexington and
Winston-Salem. Common stock of the Company is traded on the NASDAQ
Global Market under the symbol BCAR. For further information
contact: Michelle L. Clodfelter Principal Financial Officer Bank of
the Carolinas (336) 998-1799 x 207 DISCLOSURES ABOUT FORWARD
LOOKING STATEMENTS This press release may contain statements
relating to our financial condition, results of operations, plans,
strategies, trends, projections of results of specific activities
or investments, expectations or beliefs about future events or
results, and other statements that are not descriptions of
historical facts. Those statements, may be forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements may be identified by terms such as "may," "will,"
"should," "could," "expects," "plans," "intends," "anticipates,"
"believes," "estimates," "predicts," "forecasts," "potential" or
"continue," or similar terms or the negative of these terms, or
other statements concerning opinions or judgments of our management
about future events. Forward-looking information is inherently
subject to risks and uncertainties, and our actual results could
differ materially from those currently anticipated due to a number
of factors, which include, but are not limited to, risk factors
discussed in our Annual Report on Form 10-K and in other documents
we file with the Securities and Exchange Commission from time to
time. Copies of those reports are available directly through the
Commission's website at http://www.sec.gov/. Other factors that
could influence the accuracy of forward-looking statements include,
but are not limited to, (a) pressures on the earnings, capital and
liquidity of financial institutions resulting from current and
future adverse conditions in the credit and equity markets and the
banking industry in general; (b) changes in competitive pressures
among depository and other financial institutions or in our ability
to compete successfully against the larger financial institutions
in our banking markets; (c) the financial success or changing
strategies of our customers; (d) actions of government regulators,
or changes in laws, regulations or accounting standards, that
adversely affect our business; (e) changes in the interest rate
environment and the level of market interest rates that reduce our
net interest margins and/or the volumes and values of loans we make
and securities we hold; (f) changes in general economic or business
conditions and real estate values in our banking markets
(particularly changes that affect our loan portfolio, the abilities
of our borrowers to repay their loans, and the values of loan
collateral); and (g) other developments or changes in our business
that we do not expect. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. All forward-looking statements attributable to us are
expressly qualified in their entirety by the cautionary statements
in this paragraph. We have no obligation, and we do not intend, to
update these forward-looking statements. Bank of the Carolinas
Corporation Consolidated Balance Sheets (In Thousands Except Share
Data) (Unaudited) September 30, ------------- 2009 2008 ---- ----
Assets: Cash and Due from Banks $44,519 $12,734 Federal Funds Sold
and Interest Bearing Deposits with Banks 24,136 10,407 Investment
Securities 165,499 106,587 Loans 391,592 406,886 Less, Allowance
for Loan Losses (6,197) (4,218) ------ ------ Total Loans, Net
385,395 402,668 Properties and Equipment 14,289 15,245 Other Assets
30,263 23,229 ------ ------ Total Assets $664,101 $570,870 ========
======== Liabilities: Non-interest Bearing Demand Deposits $38,139
$33,303 Interest Bearing Demand Deposits 31,529 23,076 Money Market
Deposits 264,492 175,127 Savings Deposits 11,257 22,259 Time
Deposits 199,827 198,831 ------- ------- Total Deposits 545,244
452,596 Federal Home Loan Bank Borrowings 15,000 25,000 Securities
Sold Under Repurchase Agreements 46,358 47,369 Subordinated Debt
7,855 7,855 Other Liabilities 1,651 1,750 ----- ----- Total
Liabilities 616,108 534,570 ------- ------- Shareholders' Equity:
Preferred Stock, No Par Value: Authorized 10,000,000 shares: Issued
13,179 shares (with a liquidation preference of $1,000 per share)
at September 30, 2009 and None at September 30, 2008 13,179 -
Discount on Preferred Stock (1,306) - Common Stock, Par Value $5
Per Share: Authorized 15,000,000 Shares; Issued 3,897,174 Shares at
September 30, 2009 and 3,891,174 Shares at September 30, 2008
19,486 19,456 Additional Paid-In Capital 12,972 11,593 Retained
Earnings 2,304 4,902 Accumulated Other Comprehensive Income 1,358
349 ----- --- Total Shareholders' Equity 47,993 36,300 ------
------ Total Liabilities and Shareholders' Equity $664,101 $570,870
======== ======== * Derived from audited information Bank of the
Carolinas Corporation Consolidated Statements of Income (In
Thousands Except Share and Per Share Data) (Unaudited) Three Months
Ended Nine Months Ended September 30 September 30 ------------
------------ 2009 2008 2009 2008 ---- ---- ---- ---- Interest
Income Interest and Fees on Loans $5,875 $6,268 $17,904 $19,962
Interest on Securities 1,641 1,202 4,539 2,638 Other Interest
Income 13 61 56 181 --- --- --- --- Total Interest Income 7,529
7,531 22,499 22,781 ----- ----- ------ ------ Interest Expense
Interest on Deposits 2,657 3,764 9,843 11,958 Interest on Borrowed
Funds 776 757 2,364 1,418 --- --- ----- ----- Total Interest
Expense 3,433 4,521 12,207 13,376 ----- ----- ------ ------ Net
Interest Income 4,096 3,010 10,292 9,405 Provision for Loan Losses
1,046 3,150 2,466 4,245 ----- ----- ----- ----- Net Interest Income
After Provision for Loan Losses 3,050 (140) 7,826 5,160 ----- ----
----- ----- Noninterest Income Customer Service Charges and Fees
368 384 1,019 1,105 Increase in Cash Value of Life Insurance 92 93
272 273 Gains on sales of Securities 1,246 - 1,341 - Other Income 9
(7) 31 62 --- --- --- --- Total Other Income 1,715 470 2,663 1,440
----- --- ----- ----- Noninterest Expense Salaries and Benefits
1,611 1,720 4,959 5,329 Occupancy and Equipment 553 502 1,647 1,482
FDIC Insurance Expense 217 80 932 240 Valuation Provisions and Net
Operating Costs Associated With Foreclosed Real Estate 297 195
1,759 215 Goodwill Impairment Charge - 591 - 591 Data Processing
Expense 330 217 785 643 Other Noninterest Expense 838 835 2,735
2,312 --- --- ----- ----- Total Noninterest Expense 3,846 4,140
12,817 10,812 ----- ----- ------ ------ Income (Loss) Before Income
Taxes 919 (3,810) (2,328) (4,212) Provision for Income Taxes 137
(1,090) (976) (1,228) --- ------ ---- ------ Net Income (Loss) 782
(2,720) (1,352) (2,984) Dividends and Accretion on Preferred Stock
(312) - (411) - ---- --- ---- --- Net Income (Loss) Available to
Common Shareholders $470 $(2,720) $(1,763) $(2,984) ==== ========
======== ======== Earnings (Loss) Per Common Share: Basic $0.12
$(0.69) $(0.45) $(0.76) Diluted $0.12 $(0.69) $(0.45) $(0.76)
Weighted Average Common Shares Outstanding: Basic 3,897,174
3,936,649 3,893,350 3,941,582 Diluted 3,901,735 3,936,649 3,893,350
3,941,582 Bank of the Carolinas Corporation Performance Ratios As
of or for the Nine Months Ended September 30
------------------------------ 2009 2008 Change* ---- ---- ------
Financial Ratios Return On Average Assets ** -0.29% -0.76% 47 BP
Return On Average Common Shareholders' Equity ** -6.76% -10.46% 370
Net Interest Margin ** 2.43% 2.58% (15) Asset Quality Ratios
Net-chargeoffs to Average Loans ** 0.85% 1.41% (56) BP
Nonperforming Loans To Total Loans 1.79% 1.76% 3 Nonperforming
Assets To Total Assets 2.33% 2.64% (31) Allowance For Loan Losses
To Total Loans 1.58% 1.04% 55 * BP denotes basis points. ** Ratio
annualized. DATASOURCE: Bank of the Carolinas Corporation CONTACT:
Michelle L. Clodfelter, Principal Financial Officer, Bank of the
Carolinas, +1-336-998-1799 x 207
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