CARY, N.C., Oct. 15, 2007 (PRIME NEWSWIRE) -- Crescent Financial Corporation (Nasdaq:CRFN), parent company of Crescent State Bank of Cary, North Carolina, today announced unaudited net income for the quarter ended September 30, 2007 of $1,563,000 or $.16 per diluted share compared with $1,274,000 or $0.16 per diluted share for the prior year period. Per share results for 2006 have been adjusted to reflect the 11-for-10 stock split occurring in May 2007. Although unaudited net income increase by 23% in the current quarter compared to the prior year period, earnings per share was flat due in part to the issuance of 2.7 million shares, adjusted for the split, in conjunction with the August 31, 2006 acquisition of Port City Capital Bank located in Wilmington, NC.
Third quarter earnings resulted from impressive growth in earning assets over the past twelve months. Since September 30, 2006, earning assets have increased by $125 million or 20%, all of which represents internal growth. For the three month period July 1 through September 30, 2007, gross loans increased by over $43 million. The strong loan demand largely accounted for the $666,000 loan provision recorded during the current quarter compared with $182,000 for the prior period quarter. The Company has no exposure to the sub prime sector in the lending portfolio.
The growth in earning assets resulted in an increase in net interest income of $1.9 million or 38% compared to the prior period despite the net interest margin declining to 3.72% from 3.89%. While our net interest margin somewhat stabilized compared with the 3.73% reported in the second quarter, the recent interest rate reductions will result in additional pressure on margin in the short-term. Non-interest income declined in the current quarter to $689,000 compared to $695,000 for the prior year period. The decline is primarily attributable to a $48,000 reduction in mortgage loan origination fees. Non-interest expenses increased by $970,000 or 28%. The majority of the increases occurred in those expense categories most impacted by the Port City Capital Bank acquisition such as employee compensation, occupancy and data processing. Recent changes in the Federal Deposit Insurance Corporation assessments caused insurance premiums to increase five fold.
For the nine months ended September 30, 2007, Crescent reported net income of $4,476,000 or $.47 per diluted share compared with $3,260,000 or $0.45 per diluted share for the nine months ended September 30, 2006. Net interest income for the current nine-month period was $19.6 million, representing an increase of $6.4 million or 49% over the $13.2 million for the prior year period. The net interest margin for the current nine-month period was 3.76% compared to 3.97% for the prior year period. Non-interest income increased by $55,000 or 3% and non-interest expenses increased by $3.8 million or 41%. Port City Capital Bank was acquired on August 31, 2006 and therefore only one month of financial results were included in the September 30, 2006 non-interest expense figures. The provision for loan losses for the current nine-month period was over $1.3 million compared with $617,000 for the prior year period. The significant increase in loan loss provision is primarily due to the $102 million increase in gross loan outstanding since December 31, 2006.
Crescent Financial Corporation reported total assets on September 30, 2007 of $814 million, reflecting a $130 million or 19% increase over total assets of $684 million on September 30, 2006. Total net loans increased by $124 million or 24% to $643 million compared to $519 million at September 30, 2006. Over the past twelve months, total deposits increased by $55 million or 10%, from $540 million to $596 million, and total borrowings increased by 110% from $60 million to $126 million. Total stockholders' equity grew by $8 million from $81 million to $89 million at September 30, 2007.
Mike Carlton, President and CEO, stated, "We are extremely pleased to report another strong quarter in terms of net income and asset growth, despite an extremely challenging climate for the banking industry as a whole. Our team of experienced bankers has been able to generate substantial internal growth due to the favorable economic environments in the markets we serve. We are truly fortunate to be providing banking services in the faster growing communities within North Carolina. Asset quality, our number one priority, continues to be excellent even though there was a slight increase in non performing loans during the period. With that said, our non performing loans to total loans is well below our industry peers. As we move into the fourth quarter, we will continue to build upon the strong foundation for further successes."
Crescent State Bank is a state chartered bank operating eleven banking offices in Cary (2), Apex, Clayton, Holly Springs, Southern Pines, Pinehurst, Sanford, Garner, Raleigh, and Wilmington, North Carolina. Crescent Financial Corporation stock can be found on the NASDAQ Global Market trading under the symbol CRFN. Investors can access additional corporate information, product descriptions and online services through the Bank's website at www.crescentstatebank.com.
Information in this press release contains "forward-looking statements." These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates and the effects of competition. Additional factors that could cause actual results to differ materially are discussed in Crescent Financial Corporation's recent filings with the Securities Exchange Commission, including but not limited to its Annual Report on Form 10-K and its other periodic reports.
Crescent Financial Corporation
Consolidated Balance Sheet
(Amounts in thousands except share and per share data)
(Unaudited)
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
2007 2007 2007 2006(a) 2006
--------- --------- --------- --------- ---------
ASSETS
Cash and due
from banks $ 13,127 $ 14,350 $ 12,731 $ 14,295 $ 14,046
Interest earning
deposits with
banks 365 1,021 209 763 812
Federal funds
sold 4,054 16,664 13,158 92 11,556
Investment
securities
available for
sale at fair
value 89,799 88,240 86,360 84,723 83,827
Loans 651,652 608,318 586,148 549,819 526,066
Allowance for
loan losses (8,190) (7,536) (7,277) (6,945) (6,573)
--------- --------- --------- --------- ---------
Net Loans 643,462 600,782 578,871 542,874 519,493
Accrued interest
receivable 3,721 3,422 3,263 3,046 2,950
Federal Home
Loan Bank stock 6,566 4,271 4,181 3,583 3,133
Bank premises
and equipment 6,921 6,923 6,710 5,908 5,818
Investment in
life insurance 9,035 8,947 8,858 5,683 5,633
Goodwill 30,233 30,233 30,225 30,225 30,284
Other assets 6,968 7,369 6,911 6,717 6,619
--------- --------- --------- --------- ---------
Total Assets $ 814,251 $ 782,222 $ 751,477 $ 697,909 $ 684,171
========= ========= ========= ========= =========
LIABILITIES AND
STOCKHOLDERS' EQUITY
LIABILITIES
Deposits
Demand $ 72,653 $ 81,181 $ 74,127 $ 70,420 $ 74,875
Savings 122,359 101,429 95,744 78,379 74,277
Money market
and NOW 88,295 97,146 101,088 97,343 110,235
Time 312,320 338,057 319,050 295,739 280,844
--------- --------- --------- --------- ---------
Total Deposits 595,627 617,813 590,009 541,881 540,231
Short-term
borrowings 10,000 -- 18,000 24,451 14,741
Long-term debt 116,248 75,248 55,248 45,248 45,248
Accrued expenses
and other
liabilities 3,273 3,118 3,179 3,295 2,697
--------- --------- --------- --------- ---------
Total
Liabilities 725,148 696,179 666,436 614,875 602,917
STOCKHOLDERS'
EQUITY
Common stock 9,336 9,187 8,302 8,265 8,249
Additional
paid-in capital 73,394 72,554 62,832 62,659 62,522
Retained earnings 6,847 5,285 14,076 12,611 10,967
Accumulated other
comprehensive
loss (474) (983) (169) (501) (484)
--------- --------- --------- --------- ---------
Total
Stockholders'
Equity 89,103 86,043 85,041 83,034 81,254
Total
Liabilities
and Stock-
holders'
Equity $ 814,251 $ 782,222 $ 751,477 $ 697,909 $ 684,171
========= ========= ========= ========= =========
Ending shares
out-
standing(b) 9,335,755 9,187,468 9,132,055 9,091,650 9,073,519
Book value
per share $ 9.54 $ 9.37 $ 9.31 $ 9.13 $ 8.96
Tangible book
value per
share $ 6.19 $ 5.95 $ 5.87 $ 5.67 $ 5.60
Crescent Financial Corporation
Consolidated Income Statements
(Amounts in thousands except share and per share data)
(Unaudited)
For the three-month period ended
-----------------------------------------------------
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
2007 2007 2007 2006 2006
--------- --------- --------- --------- ---------
INTEREST INCOME
Loans $ 12,867 $ 12,331 $ 11,575 $ 11,125 $ 8,516
Investment
securities
available for
sale 1,142 1,096 1,061 1,038 877
Fed funds sold
and other
interest 86 175 121 125 129
--------- --------- --------- --------- ---------
Total Interest
Income 14,095 13,602 12,757 12,288 9,522
--------- --------- --------- --------- ---------
INTEREST EXPENSE
Deposits 6,121 5,965 5,561 5,161 3,824
Short-term
borrowings 149 209 290 234 164
Long-term debt 1,016 859 662 649 620
--------- --------- --------- --------- ---------
Total Interest
Expense 7,286 7,033 6,513 6,044 4,608
--------- --------- --------- --------- ---------
Net Interest
Income 6,809 6,569 6,244 6,244 4,914
Provision for
loan losses 666 322 359 374 182
--------- --------- --------- --------- ---------
Net interest
income after
provision for
loan losses 6,143 6,247 5,885 5,870 4,732
--------- --------- --------- --------- ---------
Non-interest
income
Mortgage loan
origination
income 146 135 115 138 193
Service charges
and fees on
deposit accounts 336 322 348 341 321
Realized gain
/loss on sale
of securities -- -- -- -- --
Other 208 190 166 222 181
--------- --------- --------- --------- ---------
Total non-
interest
income 690 647 629 701 695
Non-interest
expense
Salaries and
employee
benefits 2,476 2,535 2,404 2,169 1,899
Occupancy and
equipment 582 564 548 547 512
Data processing 278 257 261 260 205
Other 1,066 1,267 1,007 1,003 816
--------- --------- --------- --------- ---------
Total non-
interest
expense 4,402 4,623 4,220 3,979 3,432
--------- --------- --------- --------- ---------
Income before
income taxes 2,431 2,271 2,294 2,592 1,995
Income taxes 868 823 828 949 721
--------- --------- --------- --------- ---------
Net income $ 1,563 $ 1,448 $ 1,466 $ 1,643 $ 1,274
========= ========= ========= ========= =========
NET INCOME PER
COMMON SHARE(b)
Basic $ 0.17 $ 0.16 $ 0.16 $ 0.18 $ 0.17
Diluted $ 0.16 $ 0.15 $ 0.15 $ 0.17 $ 0.16
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING(b)
Basic 9,246,318 9,140,356 9,093,392 9,074,681 7,282,417
========= ========= ========= ========= =========
Diluted 9,642,429 9,626,134 9,611,833 9,566,909 7,788,370
========= ========= ========= ========= =========
Return on
average assets 0.79% 0.76% 0.82% 0.95% 0.94%
Return on
average equity 7.04% 6.73% 7.06% 7.90% 8.99%
Net interest
margin 3.72% 3.73% 3.81% 3.92% 3.89%
Allowance for
loan losses to
avg loans 1.26% 1.24% 1.24% 1.26% 1.25%
Nonperforming
loans to total
loans 0.22% 0.10% 0.10% 0.02% 0.02%
Nonperforming
assets to total
assets 0.21% 0.09% 0.10% 0.03% 0.05%
Crescent Financial Corporation
Consolidated Income Statements
(Amounts in thousands except share and per share data)
(Unaudited)
For the nine-month
period ended
September 30,
----------------------
2007 2006
--------- ---------
INTEREST INCOME
Loans $ 36,773 $ 21,968
Investment securities available for sale 3,299 2,265
Fed funds sold and other interest 382 185
--------- ---------
Total Interest Income 40,454 24,418
--------- ---------
INTEREST EXPENSE
Deposits 17,647 9,046
Short-term borrowings 648 610
Long-term debt 2,537 1,557
--------- ---------
Total Interest Expense 20,832 11,213
--------- ---------
Net Interest Income 19,622 13,205
Provision for loan losses 1,347 617
--------- ---------
Net interest income after
provision for loan losses 18,275 12,588
--------- ---------
Non-interest income
Mortgage loan origination income 395 504
Service charges and fees on deposit accounts 1,006 946
Realized gain/loss on sale of securities -- --
Other 564 460
--------- ---------
Total non-interest income 1,965 1,910
Non-interest expense
Salaries and employee benefits 7,416 5,138
Occupancy and equipment 1,694 1,471
Data processing 795 574
Other 3,341 2,224
--------- ---------
Total non-interest expense 13,246 9,407
--------- ---------
Income before income taxes 6,994 5,091
Income taxes 2,518 1,831
--------- ---------
Net income $ 4,476 $ 3,260
========= =========
NET INCOME PER COMMON SHARE (b)
Basic $ 0.49 $ 0.49
========= =========
Diluted $ 0.47 $ 0.45
========= =========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING (b)
Basic 9,246,318 6,676,558
========= =========
Diluted 9,642,429 7,186,466
========= =========
Return on average assets 0.79% 0.92%
Return on average equity 6.94% 9.21%
Net interest margin 3.76% 3.97%
Allowance for loan losses to avg loans 1.26% 1.25%
Nonperforming loans to total loans 0.22% 0.02%
Nonperforming assets to total assets 0.21% 0.05%
(a) Derived from audited consolidated financial statements.
(b) Adjusted, where applicable, for the 11-for-10 stock split
declared on April 18, 2007 to be paid on May 22, 2007 to
stockholders of record on May 11, 2007.