Select Bancorp Reports Third Quarter 2017 Earnings


DUNN, N.C., Nov. 03, 2017 (GLOBE NEWSWIRE) -- Select Bancorp, Inc. (the “Company”) (NASDAQ:SLCT), the holding company for Select Bank & Trust, reported another solid quarter of growth and earnings comparing quarter-over-quarter results. 

The Company’s total assets increased $16.2 million from $906.5 million at June 30, 2017 to $922.7 million at September 30, 2017.  The majority of the increase in assets was in the Company’s loan portfolio. The loan portfolio increased by $25.4 million from $738.0 million at June 30, 2017 to $763.4 million at September 30, 2017.   

Deposits have increased $15.4 million from $739.7 million at June 30, 2017 to $775.0 million at September 30, 2017.  The majority of the increase in deposits was in time deposits. The Company’s time deposits increased by $13.2 million from $361.7 million at June 30, 2017 to $374.9 million at September 30, 2017.

Deposits have increased by $95.4 million or 14.0% through the first nine months of 2017.  Loans have increased by $86.2 million or 12.7% through the first nine months of 2017. 

“The Company’s strong third quarter results reflect our ongoing commitment to deliver exceptional service to our customers and profitable growth to shareholders,” President and Chief Executive Officer William L. Hedgepeth II stated. “Our positive earnings equipped us to seek areas of growth and expansion for the Bank. Our newest branch in Wilmington opened in October of this year and we look forward to serving New Hanover County and beyond.”

The Wilmington branch will celebrate a ribbon cutting and grand opening on November 16 at 4 p.m. at the new location, 1001 Military Cutoff, Suite 100. The Bank also plans to open a Mortgage Division before the end of 2017, adding to its products and services for customers.

Additionally the Company announced during the third quarter an agreement to acquire Premara Financial, Inc. (“Premara”) and its subsidiary bank, Carolina Premier Bank, headquartered in Charlotte, N.C. This merger, which remains subject to both shareholder and regulatory approval, would put the combined company at approximately $1.1 billion in assets. The merger of Carolina Premier Bank into Select Bank will bring Select Bank’s total number of branches to 18, adding branch locations in Charlotte, N.C. as well as Blacksburg, Rock Hill and Six Mile, S.C. and a SBA Division.

Net income for the quarter ended September 30, 2017 was $1.8 million and basic and diluted earnings per share of $0.15, compared to net income of $1.3 million and basic and diluted earnings per share of $0.11 for the quarter ended June 30, 2017.

For the three months ended September 30, 2017, return on average assets was 0.77% and return on average equity was 6.44%, compared to 0.60% and 4.96%, respectively, for the three months ended June 30, 2017.

Non-performing loans remained stable with $6.2 million at both September 30, 2017 and at June 30, 2017. On a relative basis, non-performing loans equaled 0.81% of loans at September 30, 2017, decreasing from 0.83% of loans at June 30, 2017. Foreclosed real estate equaled $2.1 million at September 30, 2017, compared to $2.7 million at June 30, 2017.  For the quarter, net charge-offs were $37,000, or 0.02% of average loans, compared to net charge offs of $618,000, or 0.35% of average loans for the quarter ended June 30, 2017.

Net interest margin was 4.19% for the quarter ending September 30, 2017, as compared to 4.18% for the quarter ending June 30, 2017.

Select Bank & Trust currently has branch offices in these North Carolina communities: Dunn, Burlington, Clinton, Elizabeth City, Fayetteville, Goldsboro, Greenville, Leland, Lillington, Lumberton, Morehead City, Raleigh, Washington and Wilmington.  The information as of and for the quarter ended September 30, 2017, as presented in this release is unaudited.

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, earnings per share, 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 regulatory and shareholder approval of the merger with Premara; 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. 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.

Additional Information About the Merger and Where to Find It
Communications in this press release do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed merger of Premara with and into the Company, the Company has filed with the SEC a Registration Statement on Form S-4 that includes a Joint Proxy Statement of the Company and Premara and a Prospectus of the Company, as well as other relevant documents concerning the proposed merger.

SHAREHOLDERS OF THE COMPANY AND PREMARA ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER.

The Joint Proxy Statement/Prospectus and other relevant materials, and any other documents that the Company has filed with the SEC, may be obtained free of charge at the SEC's internet site, http://www.sec.gov. Copies of the documents that the Company has filed with the SEC may also be obtained, free of charge, by directing a written request to either Select Bancorp, Inc., 700 W. Cumberland Street, Dunn, NC 28443, Attention: Mark Jeffries, Executive Vice President and Chief Financial Officer, or Premara Financial, Inc., 13024 Ballantyne Corporate Pl, Suite 100, Charlotte, NC 28277, Attention: David P. Barksdale, President and Chief Executive Officer.

The Company, Premara and their respective directors and executive officers may be deemed to be “participants” in the solicitation of proxies from the shareholders of the Company and Premara with respect to the merger. Information concerning such participants' interests in the proposed merger are set forth in the Joint Proxy Statement/Prospectus.

 
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 
 September 30, June 30, March 31, December 31, September 30, December 31, December 31, December 31, 
20172017201720162016201620152014
Summary of Operations:                                 
Total interest income$10,042  $9,469  $9,125  $8,877  $8,755  $34,709  $33,341  $26,104  
Total interest expense 1,357   1,197   1,047   985   909   3,733   3,542   4,519  
Net interest income 8,685   8,272   8,078   7,892   7,846   30,976   29,799   21,585  
Provision for (recovery of) loan losses 202   1,083   (194  669   337   1,516   890   (194) 
Net interest income after provision 8,483   7,189   8,272   7,223   7,509   29,460   28,909   21,779  
Noninterest income 778   778   730   740   785   3,222   3,292   2,675  
Merger/Acquisition related expenses 278   -   -   -   -   -   378   1,941  
Noninterest expense 6,161   5,980   5,805   5,511   5,631   22,281   21,852   18,719  
Income before income taxes 2,822   1,987   3,197   2,452   2,663   10,401   9,971   3,794  
Provision for income taxes 1,043   651   1,082   847   924   3,647   3,418   1,437  
Net Income 1,779   1,336   2,115   1,605   1,739   6,754   6,553   2,357  
Dividends on Preferred Stock -   -   -   -   -   4   77   38  
Net income available to common shareholders$1,779  $1,336  $2,115  $1,605  $1,739  $6,750  $6,476  $2,319  
                         
Share and Per Share Data:                        
Earnings per share - basic$0.15  $0.11  $0.18  $0.14  $0.15  $0.58  $0.56  $0.26  
Earnings per share - diluted$0.15  $0.11  $0.18  $0.14  $0.15  $0.58  $0.56  $0.26  
Book value per share$9.42  $9.26  $9.14  $8.95  $8.87  $8.95  $8.38  $8.59  
Tangible book value per share$8.78  $8.61  $8.48  $8.29  $8.20  $8.29  $7.67  $7.83  
Ending shares outstanding 11,662,621   11,662,471   11,661,571   11,645,413   11,632,192   11,645,413   11,583,011   11,377,980  
Weighted average shares outstanding:                        
Basic 11,662,580   11,662,117   11,652,612   11,636,647   11,627,270   11,610,705   11,502,800   8,870,114  
Diluted 11,717,533   11,727,110   11,714,336   11,677,958   11,666,280   11,655,111   11,567,811   8,974,384  
                         
Selected Performance Ratios:                        
Return on average assets(2) 0.77%  0.60%  1.00%  0.76%  0.85%  0.81%  0.86%  0.37% 
Return on average equity(2) 6.44%  4.96%  8.10%  6.12%  6.71%  6.61%  6.42%  3.12% 
Net interest margin 4.19%  4.18%  4.14%  3.98%  4.27%  4.06%  4.38%  3.88% 
Efficiency ratio (1) 65.11%  66.08%  65.91%  63.84%  65.24%  65.15%  66.04%  77.16% 
                         
Period End Balance Sheet Data:                        
Gross Loans$763,432  $738,021  $706,758  $677,195  $651,743  $677,195  $617,398  $552,038  
Total interest earning assets 833,766   816,008   809,164   770,288   746,349   770,288   726,408   698,266  
Goodwill 6,931   6,931   6,931   6,931   6,931   6,931   6,931   6,931  
Core Deposit Intangible 547   629   716   810   909   810   1,241   1,625  
Total Assets 922,749   906,524   879,624   846,640   844,774   846,640   817,015   766,121  
Deposits 775,022   739,653   713,138   679,661   677,121   679,661   651,161   618,902  
Short term debt 22,366   33,559   33,306   37,090   38,175   37,090   29,673   20,733  
Long term debt 12,372   22,839   22,939   22,039   22,372   23,039   28,703   25,591  
Shareholders' equity 109,819   108,017   106,562   104,273   103,191   104,273   104,702   97,685  
                         
Selected Average Balances:                        
Gross Loans$748,699  $715,366  $686,800  $663,213  $641,531  $639,412  $578,759  $430,571  
Total interest earning assets 826,595   799,240   776,496   778,477   737,295   744,024   686,663   565,264  
Core Deposit Intangible 589   673   764   862   965   1,020   1,330   884  
Total Assets 914,986   887,412   856,712   844,162   818,284   829,315   765,284   631,905  
Deposits 754,169   719,976   689,795   679,404   653,016   665,764   607,214   523,954  
Short term debt 32,703   33,413   35,048   33,032   34,573   32,111   32,316   9,957  
Long term debt 15,633   22,871   22,989   23,089   23,189   25,739   20,147   20,494  
Shareholders' equity 109,537   108,071   105,860   104,404   103,026   102,110   102,068   74,365  
                         
Asset Quality Ratios:                        
Nonperforming loans$6,153  $6,159  $7,956  $9,430  $7,565  $9,430  $8,712  $11,876  
Other real estate owned 2,093   2,702   883   599   548   599   1,401   1,585  
Allowance for loan losses 8,647   8,488   8,022   8,411   7,889   8,411   7,021   6,844  
Nonperforming loans (3) to period-end loans 0.81%  0.83%  1.13%  1.39%  1.16%  1.39%  1.41%  2.15% 
Allowance for loan losses to period-end loans 1.13%  1.15%  1.14%  1.24%  1.21%  1.24%  1.14%  1.24% 
Delinquency Ratio (4) 0.38%  0.07%  0.21%  0.44%  0.16%  0.44%  0.40%  0.91% 
Net loan charge-offs (recoveries) to average loans (2) 0.02%  0.35%  0.12%  0.08%  (0.01%)  0.02%  0.12%  (0.03%) 
  
(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. Jeffries
Executive Vice President
Chief Financial Officer
Office: 910-892-7080 and Direct: 910-897-3603
markj@SelectBank.com
SelectBank.com