MOCKSVILLE, N.C., April 18 /PRNewswire-FirstCall/ -- Bank of the CarolinasCorporation (Nasdaq: BCAR), today reported financial results for the threemonths ended March 31, 2008.
For the three month period ended March 31, 2008, the Company reported anet loss of $5,000, as compared to net income of $780,000 in the first quarterof 2007. Diluted earnings per share were $0.00 for the first quarter comparedto $0.20 per diluted share for the same period in 2007. First quarter resultswere significantly affected by the further compression of the Company's netinterest margin, increased provision for loan losses and higher levels ofnon-interest expense versus the year ago period.
For the three months ended March 31, 2008, the Company's net interestmargin declined to 2.77% compared to 3.31% for the first quarter of 2007.This decrease was due to the Federal Reserve's aggressive rate cuts during thequarter which led to a 200 basis point drop in the prime rate. Since asignificant portion of the Company's loan portfolio adjusts with prime,rapidly declining rates have a negative impact on the Company's margin in thenear term. Non-interest income for 2008 grew 5.4%; while non-interest expenserose $594,000 or 21.3% over the year ago quarter. Non-interest expense for thecurrent quarter was impacted by the addition of two full service officesopened during 2007. The Company implemented cost savings measures during thelast quarter of 2007 and is committed to controlling non-interest expenseduring 2008.
The provision for loan losses totaled $314,000 for the quarter versus$62,000 in 2007. The allowance for loan losses was 1.07% of total loans as ofMarch 31, 2008 and annualized net charge-offs were 0.21% of average loansoutstanding. Non-performing assets stood at 2.09% of assets as of March 31,2008, compared to 1.92% three months earlier and 0.72% a year ago. Included innon-performing assets at March 31, 2008, was a $4.9 million credit which has a75% USDA guarantee.
Total assets at March 31, 2008 amounted to $513.4 million, an increase of8.6% when compared to the prior year amount of $472.8 million. Net loansincreased 13.6% over the prior year to $401.1 million while deposits grew to$427.4 million, a 5.0% increase over the prior year. The Company remains wellcapitalized and raised an additional $5 million of capital during the quarterthrough trust preferred securities financing, which is included in Tier 1capital.
Bank of the Carolinas Corporation is the holding company for Bank of theCarolinas, a state chartered bank headquartered in Mocksville, NC with officesin Advance, Asheboro, Cleveland, Concord, Harrisburg, King, Landis, Lexingtonand Winston-Salem. Common stock of the Company is traded on the NASDAQ GlobalMarket under the symbol BCAR.
This press release contains forward-looking statements as defined byfederal securities laws. These statements may address issues that involvesignificant risks, uncertainties, estimates and assumptions made bymanagement. Actual results could differ materially from current projections.Bank of the Carolinas Corporation undertakes no obligation to revise thesestatements following the date of this press release.
For further information contact:
Eric E. Rhodes Chief Financial Officer Bank of the Carolinas Corporation (336) 751-5755
Bank of the Carolinas Corporation Consolidated Balance Sheets (In Thousands Except Share Data) (Unaudited) March 31, 2008 2007
Assets Cash and Due from Banks $ 7,909 $ 5,594 Interest-Bearing Deposits in Banks 5,049 100 Federal Funds Sold 3,541 27,467 Securities Available for Sale 61,727 58,452
Loans 405,440 356,948 Less, Allowance for Loan Losses (4,355) (3,735) Total Loans, Net 401,085 353,213 Properties and Equipment 14,251 11,391 Other Assets 19,795 16,626 Total Assets $ 513,357 $ 472,843
Liabilities Non-interest Bearing Demand Deposits $ 30,589 $ 29,603 Interest Bearing Demand Deposits 57,518 64,377 Savings Deposits 26,340 11,428 Time Deposits 312,948 301,808 Total Deposits 427,395 407,216
Borrowings 43,155 23,000 Retail Repurchase Agreements 554 994 Other Liabilities 1,831 3,191 Total Liabilities 472,935 434,401
Shareholders' Equity Common Stock, Par Value $5 Per Share: Authorized 15,000,000 Shares; Issued 3,920,752 Shares in 2008 and 3,831,692 Shares in 2007 19,604 19,158 Additional Paid-In Capital 11,721 11,471 Retained Earnings 8,275 7,881 Accumulated Other Comprehensive Income (Loss) 822 (68) Total Shareholders' Equity 40,422 38,442 Total Liabilities and Shareholders' Equity $ 513,357 $ 472,843
Bank of the Carolinas Corporation Consolidated Statements of Income (In Thousands Except Share and Per Share Data) (Unaudited) Three Months Ended March 31, 2008 2007
Interest Income Interest and Fees on Loans $ 7,091 $ 7,309 Interest on Securities 726 614 Federal Funds Sold 76 177 Deposits in Other Banks 4 4 Total Interest Income 7,897 8,104
Interest Expense Deposits 4,386 4,250 Borrowed Funds 273 285 Total Interest Expense 4,659 4,535
Net Interest Income 3,238 3,569 Provision for Loan Losses 314 62 Net Interest Income After Provision for Loan Losses 2,924 3,507
Other Income Customer Service Fees 293 236 Mortgage Loan Broker Fees 36 31 Investment Services 9 43 Income from Bank Owned Life Insurance 88 82 Other Income 26 37 Total Other Income 452 429
Noninterest Expense Salaries and Benefits 1,894 1,517 Occupancy and Equipment 499 418 Other Noninterest Expense 988 852 Total Noninterest Expense 3,381 2,787 Income (Loss) Before Income Taxes (5) 1,149 Income Taxes - 369 Net Income (Loss) $ (5) $ 780
Earnings Per Share Basic $ - $ 0.20 Diluted $ - $ 0.20
Weighted Average Shares Outstanding Basic 3,920,752 3,826,706 Diluted 3,977,182 3,949,095
Bank of the Carolinas Corporation Performance Ratios
As of or for the Three Months Ended March 31, 2008 2007 Change*
Financial Ratios Return On Average Assets ** 0.00% 0.69% (69)BP Return On Average Shareholders' Equity ** -0.05% 8.27% (832) Net Interest Margin ** 2.77% 3.31% (54)
Asset Quality Ratios Net-chargeoffs to Average Loans ** 0.21% 0.07% 14 BP Nonperforming Loans To Total Loans 2.07% 0.70% 137 Nonperforming Assets To Total Assets 2.09% 0.72% 137 Allowance For Loan Losses To Total Loans 1.07% 1.05% 2
* BP denotes basis points. ** Ratio annualized.
SOURCE Bank of the Carolinas Corporation
