DUNN, N.C., Oct. 29, 2020 (GLOBE NEWSWIRE) -- Select Bancorp, Inc. (NASDAQ: SLCT) (the “Company”), the holding company for Select Bank & Trust Company, today reported net income for the quarter ended September 30, 2020 of $2.5 million with basic and diluted earnings per share of $0.14, compared to net income of $3.2 million with basic and diluted earnings per share of $0.17 for the comparative quarter ended September 30, 2019. The decrease in net income in the third quarter of 2020 compared to the third quarter of 2019 was primarily attributable to a provision for loan losses of $1.6 million compared to a provision for loan losses of $231,000 for the same period in 2019. The increase in the provision for loan losses was primarily due to a specific reserve, loan growth and factors associated with the economic impact of the COVID-19 pandemic.

Total assets, deposits, and gross loans for the Company as of September 30, 2020 were $1.8 billion, $1.5 billion, and $1.3 billion, respectively, compared to total assets of $1.3 billion, total deposits of $987.7 million, and total loans of $1 billion as of the same date in 2019.

Comments of the Chief Executive Officer and Other Matters

William Hedgepeth, President and Chief Executive Officer, stated regarding the 3rd quarter of 2020, “We had a solid third quarter in spite of the impact of the COVID-19 pandemic upon our company and earnings. In the last three quarters, we have been preparing for a ‘worst-case scenario’ should the pandemic linger and have a lasting impact on the economy that stretches beyond months or years. Although the bank, our customers and employees have learned to navigate the current state of affairs, there is still much uncertainty that lies ahead. We believe we are well-positioned and prepared to assist our customers further should that be required, with measures such as additional loan deferrals and the waiving of certain fees. Our capital, liquidity and asset quality are all strong and should enable us to overcome many challenges we may face until we emerge from this pandemic. We continue to realize efficiencies and improve our processes as we move forward. Our three newest branches in the western part of North Carolina (Franklin, Highlands, and Sylva) are integrating well and have become a great part of our branch network. We are so proud of the western North Carolina branch team members’ efforts over the past few months. Albeit challenging in this environment, they have done a fantastic job maintaining customer relationships and growing those markets.”

Other matters of interest to shareholders are:

  • The Company announced on October 2, 2020 a stock repurchase plan authorizing the repurchase of up to 875,000 outstanding shares of common stock.
  • Organic deposit growth was approximately $134.0 million in the third quarter of 2020.
  • Loans increased by approximately $34.5 million in the third quarter of 2020 in organic growth.

Net Interest Income and Net Interest Margin

Net interest income was $13.1 million for the third quarter of 2020 and $11.9 million for the same period in 2019. On a comparative quarter basis, the Company’s total interest income was positively affected by increased loan balances due to growth, which was offset by a decreasing yield, a decrease in average securities balances and lower-yielding loans plus the reduction in other earning assets at a lower yield. Average total interest-earning assets were $1.4 billion in the third quarter of 2020 and $1.2 billion for the same period in 2019. The yield on those assets decreased 48 basis points, from 4.98% in the third quarter of 2019 to 4.50% for the same period in 2020. This was primarily due to lower rates on recently originated loans and 1,249 Paycheck Protection Program, or PPP, loans along with deferral modifications on loans due to COVID-19 on a comparative-quarter basis. When compared to the third quarter of 2020, average total interest-earning assets were $1.3 billion in the second quarter of 2020 and $1.4 billion for the third quarter of 2020. The yield on those assets increased 28 basis points, from 4.22% in the second quarter of 2020 to 4.50% for the third quarter of 2020.

The Company’s average interest-bearing liabilities increased by $234.2 million, to $1.1 billion for the quarter ended September 30, 2020, from $818.6 million for the third quarter of 2019. Low-cost savings, NOW and money market deposits increased $275.2 million, while the cost of transactional deposits increased from 0.52% to 0.59%, or 7 basis points, year over year. The cost of total deposits decreased from 1.40% in the third quarter of 2019 to 0.92% in the third quarter of 2020 due to the decrease in the cost of time deposits. During the third quarter of 2020, the Company’s net interest margin was 3.73% and net interest spread was 3.47%. In the third quarter of 2019, net interest margin was 3.94% and net interest spread was 3.46%.

Provision for Loan Losses and Asset Quality

During the third quarter of 2020, the Company recorded a provision for loan losses of $1.6 million, based primarily on loan growth and adjustments to qualitative allowance factors. There was a 0.10% allowance applied to all loan pools for factors related to the potential economic impact of the COVID-19 pandemic. As a result, $129,000 of the $1.6 million provision was attributable to the impact COVID-19 on the reserve’s increase. When the pandemic began, we granted payment deferrals related to the impact of COVID-19 on approximately 497 commercial and consumer loans totaling approximately $240.2 million. As of the date of this release, there are approximately 129 loans totaling $85.7 million remaining on deferral. On a comparative-quarter basis, the Company recorded a provision for loan losses of $231,000 for the third quarter of 2019. In the third quarter of 2020, the Company recorded net charge-offs of $131,000 compared to net charge-offs of $478,000 in the third quarter of 2019. These charge-offs resulted in a net charge-off rate of 0.04% of average loans for the current quarter, compared to a net charge-off rate of 0.19% in the third quarter of 2019.

Non-interest Income

Non-interest income for the quarter ended September 30, 2020 was $1.7 million, an increase of $276,000 from $1.4 million in the third quarter of 2019. Service charges on deposit accounts decreased $51,000, to $257,000 for the quarter ended September 30, 2020, from $308,000 for the third quarter in 2019. Other non-deposit fees and income increased $76,000 from the third quarter of 2019 to the third quarter of 2020. Fees of $255,000 from presold mortgages and $262,000 from non-PPP SBA loans totaled $517,000 in the third quarter of 2020, which represented an increase of $299,000 from the $218,000 of fees in the third quarter of 2019. The Company did not sell any investment securities in the third quarter of 2020 but did have gains of $48,000 in the third quarter of 2019.

Non-interest Expense

Non-interest expenses increased by $1.1 million to $10.1 million for the quarter ended September 30, 2020, from $8.9 million for the same period in 2019. In general, most categories of non-interest expenses increased, primarily due to an increase in the number of branches. The following are highlights of the significant categories of non-interest expenses during the third quarter of 2020 versus the same period in 2019:

  • Personnel expenses increased $618,000 to $5.7 million, due to additional personnel primarily from branch acquisitions and the establishment of new branches.
  • Occupancy expenses decreased $65,000 to $1.0 million, primarily due to additional branches, repairs and maintenance.
  • Foreclosure-related expenses increased $237,000 to $228,000, due to write-down to fair value.
  • Core Deposit Intangible (“CDI”) expense decreased $29,000 to $195,000 due to amortization.
  • Information systems expense increased by $191,000 to $1.0 million due to increased expenses related to a new mobile banking platform, increased number of customer accounts and security cost for the core processing system.
  • Professional fees decreased by $119,000 to $399,000.
  • Deposit insurance expenses increased by $400,000 to $370,000 due to premium increases related to asset growth.

Income Taxes

The Company’s effective tax rate was 21.5% and 22.0% for the quarters ended September 30, 2020 and 2019, respectively.
  
Balance Sheet

Total assets at September 30, 2020 were $1.8 billion, an increase of $502.3 million or 39.6% from a year earlier. Gross loans at September 30, 2020 were $1.3 billion, up $268.5 million or 26.4% from a year earlier, and total deposits were $1.5 billion, an increase of $485.1 million or 49.1% from a year earlier.

Retail deposits (excluding brokered deposits and internet time deposits) grew at a rate of 87.5% or $499.5 million as of September 30, 2020 compared to the same period in 2019. Deposits increased $97.2 million due to the PPP loan program in 2020. Wholesale deposits decreased from $13.5 million at September 30, 2019 to $4.6 million at September 30, 2020 as we continue emphasizing core deposit growth to replace wholesale deposits.

About Select Bank & Trust Company

Select Bank & Trust has 22 full-service offices in these North Carolina communities: Dunn, Burlington, Charlotte, Clinton, Cornelius (Charlotte area), Elizabeth City, Fayetteville, Franklin, Goldsboro, Greenville, Highlands, Holly Springs (Raleigh area), Leland, Lillington, Lumberton, Morehead City, Raleigh, Sylva, and Wilmington; in the following South Carolina communities: Blacksburg and Rock Hill; and in Virginia Beach, Virginia. Select Bank & Trust also operates three loan production offices in Wilson, Durham and Winston-Salem, North Carolina.

About Select Bancorp, Inc.

Select Bancorp, Inc. is a bank holding company headquartered in Dunn, North Carolina. The Company primarily conducts operations through its wholly owned subsidiary, Select Bank & Trust Company, a North Carolina-chartered commercial bank that provides a full suite of banking services through its offices in North Carolina, South Carolina, and Virginia. The Company’s common stock is listed on the Nasdaq Global Market under the symbol “SLCT”.

Non-GAAP Financial Measures

Certain financial measures we use to evaluate our performance and discuss in this release and the accompanying tables are identified as being “non-GAAP financial measures.” In accordance with the rules of the Securities and Exchange Commission, or the SEC, we classify a financial measure as being a non-GAAP (generally accepted accounting principles) financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of operations, balance sheet or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both.

The non-GAAP financial measures that we discuss in this release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in this release may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar, or with names similar, to the non-GAAP financial measures we have discussed in this release when comparing such non-GAAP financial measures.

Tangible book value per share is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as shareholders’ equity less goodwill and core deposit intangibles; and (b) tangible book value per share as tangible common equity (as described in clause (a)) divided by shares of common stock outstanding. For tangible book value per share, the most directly comparable financial measure calculated in accordance with GAAP is our book value per share. A reconciliation of tangible book value per share to book value per share is included in the tables that accompany this release.

We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.

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, revenue, and 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: the ongoing COVID-19 pandemic and measures intended to prevent its spread, which include wide disruptions to business activity that may impact the financial strength of our borrowers; our ability to manage growth or achieve it at all; substantial changes in financial markets; our ability to obtain the synergies and expense efficiencies anticipated from our acquisition activity and branch divestures and consolidations; regulatory changes; changes in interest rates, including the impact of such changes on our net interest margin; loss of deposits and loan demand to other savings and financial institutions; adverse economic conditions that impact our borrowers’ ability to pay their debts when due, including the rapid rise in unemployment associated with the COVID-19 pandemic; 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. 
CONSOLIDATED BALANCE SHEETS 
            
  September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019September 30, 2019 
  (Unaudited) (Unaudited) (Unaudited) (Audited) (Unaudited) 
    (Dollars in thousands)
 
ASSETS           
            
Cash and due from banks $25,068  $24,037  $20,030  $19,110  $20,052  
Interest-earning deposits in other banks 249,541   157,521   35,544   50,920   53,093  
Certificates of deposit  -   -   -   -   500  
Federal funds sold  8,046   9,726   11,673   9,047   10,728  
Investment securities available for sale, at Fair Value  87,434   62,958   64,738   72,367   76,941  
Loans held for sale  2,945   3,455   1,606   928   1,714  
Loans  1,283,457   1,249,999   1,039,514   1,029,975   1,014,928  
Allowance for loan losses  (13,561)  (12,054)  (10,586)  (8,324)  (8,056) 
 NET LOANS 1,269,896   1,237,945   1,028,928   1,021,651   1,006,872  
            
Accrued interest receivable  4,486   4,400   3,839   4,189   3,902  
Stock in Federal Home Loan Bank of Atlanta, at cost  3,059   3,059   3,059   3,045   3,045  
Other non-marketable securities  718   718   718   719   719  
Foreclosed real estate  3,237   3,561   3,737   3,533   1,442  
Premises and equipment, net  20,883   20,893   17,868   17,791   18,150  
Right of use lease asset  8,756   8,953   8,414   8,596   8,776  
Bank owned life insurance  30,271   30,110   29,950   29,789   29,621  
Goodwill  41,914   41,914   24,579   24,579   24,579  
Core deposit intangible ("CDI")  1,677   1,856   1,431   1,610   1,803  
Other assets  14,015   7,854   7,380   7,202   7,697  
 TOTAL ASSETS$1,771,946  $1,618,960  $1,263,494  $1,275,076  $1,269,634  
            
LIABILITIES AND SHAREHOLDERS' EQUITY         
Deposits:           
   Demand $408,209  $400,098  $250,031  $240,305  $243,889  
   Savings  51,629   52,597   41,815   43,128   43,355  
   Money market and NOW  610,275   495,609   306,051   280,145   283,414  
   Time  402,667   390,449   384,754   429,260   417,015  
 TOTAL DEPOSITS 1,472,780   1,338,753   982,651   992,838   987,673  
            
Short-Term Debt  20,000   20,000   20,000   -   -  
Long-Term Debt  37,372   37,372   37,372   57,372   57,372  
Lease Liability  9,089   9,243   8,669   8,813   8,951  
Accrued interest payable  449   457   536   578   596  
Accrued expenses and other liabilities 18,889   1,597   2,181   2,700   2,993  
 TOTAL LIABILITIES 1,558,579   1,407,422   1,051,409   1,062,301   1,057,585  
            
Shareholders' Equity           
Common stock  17,787   17,863   18,056   18,330   18,513  
Additional paid-in-capital  137,130   137,559   138,788   140,870   142,878  
Retained Earnings  56,917   54,460   53,779   52,675   49,634  
Common stock issued to deferred compensation trust  (2,352)  (2,553)  (2,791)  (2,815)  (2,730) 
Directors' Deferred Compensation Plan Rabbi Trust 2,352   2,553   2,791   2,815   2,730  
Accumulated other comprehensive income 1,533   1,656   1,462   900   1,024  
 TOTAL SHAREHOLDERS' EQUITY 213,367   211,538   212,085   212,775   212,049  
            
 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY$1,771,946  $1,618,960  $1,263,494  $1,275,076  $1,269,634  
            


  
SELECT BANCORP, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(Unaudited) 
               
 For the Three Months Ended For the Twelve Months Ended 
 September 30,
2020
 June 30,
2020
 March 31,
2020
 December
31, 2019
 September 30,
2019
 December 31,
2019
 December 31,
2018
 
     (Dollars in thousands, except for share amounts)    
INTEREST INCOME              
   Loans$15,404 $14,086 $13,589  $14,124 $13,924  $54,605 $53,796  
   Federal funds sold and interest-earning deposits in other banks 54  33  168   258  581   1,838  1,618  
   Investments 367  381  421   434  503   2,003  1,421  
TOTAL INTEREST INCOME 15,825  14,500  14,178   14,816  15,008   58,446  56,835  
               
INTEREST EXPENSE              
Money market, NOW and savings deposits 891  648  348   420  433   1,616  1,339  
Time deposits 1,415  1,576  1,931   2,075  2,248   8,061  6,293  
Short-term debt 145  141  87   6  4   62  328  
Long-term debt 263  281  352   447  455   1,817  1,490  
TOTAL INTEREST EXPENSE 2,714  2,646  2,718   2,948  3,140   11,556  9,450  
               
NET INTEREST INCOME 13,111  11,854  11,460   11,868  11,868   46,890  47,385  
               
PROVISION FOR (RECOVERY OF) LOAN LOSSES 1,638  1,933  2,273   302  231   438  (156) 
               
NET INTEREST INCOME AFTER PROVISION              
FOR (RECOVERY OF) LOAN LOSSES 11,473  9,921  9,187   11,566  11,637   46,452  47,541  
               
NON-INTEREST INCOME              
  Fees on the sale of mortgages 517  355  293   148  218   753  497  
  Gain on securities -  -  -   -  48   48  -  
  Service charges on deposit accounts 257  206  338   303  308   1,161  1,124  
  Other fees and income 950  850  813   995  874   3,457  3,080  
TOTAL NON-INTEREST INCOME 1,724  1,411  1,444   1,446  1,448   5,419  4,701  
               
NON-INTEREST EXPENSE              
   Personnel 5,742  5,786  5,632   5,152  5,124   20,278  18,304  
   Occupancy and equipment 1,008  986  931   973  1,073   3,695  3,666  
   Deposit insurance 370  76  (12)  19  (30)  184  628  
   Professional Fees 399  451  372   503  518   1,886  1,394  
   CDI amortization 179  195  179   193  208   825  1,016  
   Merger/acquisition related expenses 7  709  39   171  128   406  1,826  
   Information systems 1,043  972  1,038   974  852   3,492  3,372  
   Foreclosed-related expenses 228  187  5   109  (9)  140  115  
   Other 1,091  1,140  1,063   1,000  1,067   4,234  4,229  
TOTAL NON-INTEREST EXPENSE 10,067  10,502  9,247   9,094  8,931   35,140  34,550  
               
INCOME BEFORE INCOME TAXES 3,130  830  1,384   3,918  4,154   16,731  17,692  
               
INCOME TAXES 673  149  280   877  915   3,696  3,910  
NET INCOME$2,457 $681 $1,104  $3,041 $3,239  $13,035 $13,782  
NET INCOME PER COMMON SHARE OUTSTANDING             
  Basic$0.14 $0.04 $0.06  $0.17 $0.17  $0.69 $0.87  
  Diluted$0.14 $0.04 $0.06  $0.16 $0.17  $0.68 $0.87  
               
WEIGHTED AVERAGE COMMON              
Basic Outstanding Shares 17,847,913  18,013,863  18,255,351   18,414,393  19,028,572   19,016,808  15,812,585  
Diluted Outstanding Shares 17,866,822  18,030,136  18,287,064   18,460,118  19,073,235   19,063,237  15,877,633  
               


  
Select Bancorp, Inc.              
Asset quality              
               
               
 September 30,
2020
 June 30,
2020
 March 31,
2020
 December 31,
2019
 September 30,
2019
 December 31,
2019
 December 31,
2018
 
 (Dollars in thousands, except for share amounts, unaudited) 
Non-accrual loans$7,695  $7,979  $7,201  $5,941  $9,083  $5,941  $7,257  
Accruing TDRs 6,044   6,420   5,619   6,207   6,477   6,207   4,378  
Total non-performing loans 13,739   14,399   12,820   12,148   15,560   12,148   11,635  
Foreclosed real estate 3,237   3,561   3,737   3,533   1,442   3,533   1,088  
Total non-performing assets$16,976  $17,960  $16,557  $15,681  $17,002  $15,681  $12,723  
               
Accruing loans past due 90 days or more$1,548  $1,326  $1,182  $1,231  $2,296  $1,231  $3,167  
Allowance for loan losses$13,561  $12,054  $10,586  $8,324  $8,056  $8,324  $8,669  
               
Non-performing loans to period ending loans 1.07%  1.15%  1.23%  1.18%  1.53%  1.18%  1.18% 
Non-performing loans & accruing loans past due 90 days or more to period ending loans 1.19%  1.26%  1.35%  1.30%  1.76%  1.30%  1.50% 
Allowance for loans to period end loans 1.06%  0.96%  1.02%  0.81%  0.79%  0.81%  0.88% 
Allowance for loans to non-performing loans 99%  84%  83%  69%  52%  69%  75% 
Allowance for loans to non-performing Assets 80%  67%  64%  53%  47%  53%  68% 
Allowance for loans to non-performing Assets and accruing loans past due 90 days or more 73%  63%  60%  49%  42%  49%  55% 
Non-performing assets to total assets 0.96%  1.11%  1.31%  1.23%  1.34%  1.23%  1.01% 
Non-performing assets to accruing loans past due 90 days or more to total assets 1.05%  1.19%  1.40%  1.33%  1.52%  1.33%  1.26% 
               
               
SELECT BANCORP, INC.              
Reconciliation of GAAP to Non-GAAP Measures              
($ in thousands, except per share data, unaudited)              
               
 For the Three Months Ended For the Twelve Months Ended 
 September 30, 2020 June 30,
2020
 March 31,
2020
 December 31, 2019 September 30, 2019 December 31, 2019 December 31, 2018 
Net interest margin:              
Net Interest Margin-tax equivalent (1)$13,141  $11,883  $11,489  $11,901  $11,903  $47,037  $47,535  
Purchased loan accretion and early payoff charges (455)  (620)  (105)  (226)  (210)  (904)  (3,051) 
Net Interest Margin(2) (Non-GAAP)$12,686  $11,263  $11,384  $11,675  $11,693  $46,133  $44,484  
               
Loans receivable interest income:              
Loans receivable interest income$15,404  $14,086  $13,589  $14,124  $13,924  $54,645  $53,822  
Purchased loan accretion and early payoff charges (455)  (620)  (105)  (226)  (210)  (904)  (3,051) 
Loans receivable interest income (Non-GAAP)$14,949  $13,466  $13,484  $13,898  $13,714  $53,741  $50,771  
               
Acquired and non-acquired loans:              
Acquired loans receivable$199,794  $213,466  $122,363  $129,595  $141,765  $129,595  $186,243  
Non-acquired loans receivable 1,083,663   1,036,533   917,151   900,380   873,163   900,380   799,797  
Total gross loans receivable$1,283,457  $1,249,999  $1,039,514  $1,029,975  $1,014,928  $1,029,975  $986,040  
% Acquired 15.6%  17.1%  11.8%  12.6%  14.0%  12.6%  18.9% 
               
Non-acquired loans 1,083,663   1,036,533   917,151   900,380   873,163   900,380   799,797  
Allowance for loan losses 13,561   12,054   10,586   8,324   8,056   8,324   8,669  
Allowance for loan losses to non-acquired loans (Non-GAAP) 1.25%  1.16%  1.15%  0.92%  0.92%  0.92%  1.08% 
               
Total gross loan receivable 1,283,457   1,249,999   1,039,514   1,029,975   1,014,928   1,029,975   986,040  
Allowance for loan losses 13,561   12,054   10,586   8,324   8,056   8,324   8,669  
Allowance for loan losses to total gross loans receivable 1.06%  0.96%  1.02%  0.81%  0.79%  0.81%  0.88% 
               
               
               
 For Periods Ended 
 September 30, 2020 June 30,
2020
 March 31,
2020
 December 31, 2019 September 30, 2019 December 31, 2019 December 31, 2018 
Tangible common equity              
   Total shareholders' equity$213,367  $211,538  $212,085  $212,775  $212,049  $212,775  $209,611  
   Adjustment:              
      Goodwill 41,914   41,914   24,579   24,579   24,579   24,579   24,579  
      Core deposit intangibles 1,677   1,856   1,431   1,610   1,803   1,610   2,085  
Tangible common equity$169,776  $167,768  $186,075  $186,586  $185,667  $186,586  $182,947  
Common shares outstanding(3) 17,786,552   17,862,554   18,055,692   18,330,058   18,513,078   18,330,058   19,311,505  
Book value per common share(4)$12.00  $11.84  $11.75  $11.61  $11.45  $11.61  $10.85  
Tangible book value per common share(5)$9.55  $9.39  $10.31  $10.18  $10.03  $10.18  $9.47  
               
(1) Net interest margin-tax equivalent reflects tax-exempt income on a tax-equivalent basis.         
(2) Net interest margin-core and yield on loans - core excludes the impact of purchase accounting accretion, loan payoff charges and related deferred fees recognized related to early loan repayments.
(3) Excludes the dilutive effect of common stock issuable upon exercise of stock options.         
(4) We calculate book value per common share as shareholders' equity less preferred stock at the end of the relevant period divided by the outstanding number of shares of our common stock at the end of the relevant period.
(5) We calculate the tangible book value per common share as total shareholders' equity less goodwill, preferred stock and core deposit intangibles, divided by  the number of outstanding shares of our common stock at the end of the relevant period.
                  
               

 

Select Bancorp, Inc.                
Selected Financial Information and Other Data  
($ in thousands, except per share data)     
                 
 For the Quarter Ended For the Year Ended 
                 
 September 30, June 30, March 31, December 31, September 30, December 31, December 31, December 31, 
  2020  2020  2020   2019   2019  2019  2018  2017  
            
Summary of Operations:              
Total interest income$15,825  $14,500  $14,178  $14,816  $15,008  $58,446  $56,835  $39,617  
Total interest expense 2,714   2,646   2,718   2,948   3,140   11,556   9,450   5,106  
Net interest income 13,111   11,854   11,460   11,868   11,868   46,890   47,385   34,511  
Provision for loan losses 1,638   1,933   2,273   302   231   438   (156)  1,367  
Net interest income after provision 11,473   9,921   9,187   11,566   11,637   46,452   47,541   33,144  
Noninterest income 1,724   1,411   1,444   1,446   1,448   5,419   4,701   3,072  
Merger/acquisition related expenses 7   709   39   171   128   406   1,826   2,166  
Noninterest expense 10,060   9,793   9,208   8,923   8,803   34,734   32,724   25,153  
Income before income taxes 3,130   830   1,384   3,918   4,154   16,731   17,692   8,897  
Provision for income taxes 673   149   280   877   915   3,696   3,910   5,712  
Net Income 2,457   681   1,104   3,041   3,239   13,035   13,782   3,185  
Dividends on Preferred Stock -   -   -   -   -   -   -   -  
Net income available to common shareholders$2,457  $681  $1,104  $3,041  $3,239  $13,035  $13,782  $3,185  
                 
Share and Per Share Data:                
Earnings per share - basic$0.14  $0.04  $0.06  $0.17  $0.17  $0.69  $0.87  $0.27  
Earnings per share - diluted$0.14  $0.04  $0.06  $0.16  $0.17  $0.68  $0.87  $0.27  
Book value per share$12.00  $11.84  $11.75  $11.61  $11.45  $11.61  $10.85  $9.72  
Tangible book value per share(1)$9.55  $9.39  $10.31  $10.18  $10.03  $10.18  $9.47  $7.72  
Ending shares outstanding 17,786,552   17,862,554   18,055,692   18,330,058   18,513,078   18,330,058   19,311,505   14,009,137  
Weighted average shares outstanding:                
Basic 17,847,913   18,134,607   18,255,351   18,414,393   19,028,572   19,016,808   15,812,585   11,763,050  
Diluted 17,866,822   18,157,992   18,287,064   18,460,118   19,073,235   19,063,237   15,877,633   11,826,977  
                 
Selected Performance Ratios:                
Return on average assets(2) 0.58%  0.18%  0.35%  0.95%  0.99%  1.03%  1.12%  0.35% 
Return on average equity(2) 4.56%  1.28%  2.07%  5.67%  5.93%  6.08%  8.51%  2.93% 
Net interest margin 3.73%  3.45%  4.03%  4.05%  3.94%  4.04%  4.19%  4.09% 
Efficiency ratio (3) 67.82%  73.83%  71.36%  67.02%  66.11%  66.40%  62.83%  66.93% 
                 
Period End Balance Sheet Data:                
Gross loans$1,283,457  $1,249,999  $1,039,514  $1,029,975  $1,014,928  $1,029,975  $986,040  $982,626  
Total interest-earning assets 1,429,614   1,222,416   1,137,010   1,167,857   1,153,612   1,167,857   1,119,344   1,063,322  
Goodwill 41,914   41,914   24,579   24,579   24,579   24,579   24,579   24,904  
Core deposit intangible 1,677   1,856   1,431   1,610   1,803   1,610   2,085   3,101  
Total assets 1,771,946   1,618,960   1,263,494   1,275,076   1,269,634   1,275,076   1,258,525   1,194,135  
Deposits 1,472,780   1,338,753   982,651   992,838   987,673   992,838   980,427   995,044  
Short-term debt 20,000   20,000   20,000   -   -   -   7,000   28,279  
Long-term debt 37,372   37,372   37,372   57,372   57,372   57,372   57,372   19,372  
Shareholders' equity 213,367   211,538   212,085   212,775   212,049   212,775   209,611   136,115  
                 
Selected Average Balances:                
Gross Loans$1,255,027  $1,193,985  $1,020,630  $1,017,750  $1,013,331  $1,004,051  $987,634  $732,089  
Total interest-earning assets 1,403,106   1,321,172   1,147,631   1,166,758   1,197,266   1,164,149   1,119,344   813,773  
Core Deposit Intangible 1,743   1,529   1,507   1,680   1,878   1,812   2,547   640  
Total Assets 1,683,174   1,520,278   1,255,943   1,272,475   1,300,137   1,268,728   1,228,576   898,943  
Deposits 1,399,840   1,237,343   972,162   989,721   1,013,504   981,132   989,838   738,310  
Short-term debt 20,000   20,000   12,747   -   -   3,414   21,393   34,523  
Long-term debt 37,438   37,438   44,625   57,372   57,372   57,372   49,357   14,239  
Shareholders' equity 214,277   213,796   214,502   212,849   216,556   214,324   161,953   108,709  
                 
Asset Quality Ratios:                
Nonperforming loans (4)$13,739  $14,399  $12,820  $12,148  $15,560  $12,148  $11,635  $6,978  
Other real estate owned 3,237   3,561   3,737   3,533   1,442   3,533   1,088   1,258  
Allowance for loan losses 13,561   12,054   10,586   8,324   8,056   8,324   8,669   8,835  
Nonperforming loans (4) to period-end loans 1.07%  1.15%  1.23%  1.18%  1.53%  1.18%  1.18%  0.71% 
Allowance for loan losses to period-end loans 1.06%  0.96%  1.02%  0.81%  0.79%  0.81%  0.88%  0.90% 
Delinquency ratio (5) 0.17%  0.22%  0.43%  0.34%  0.09%  0.34%  0.19%  0.48% 
Net loan charge-offs (recoveries) to average loans (2) 0.04%  0.16%  0.00%  0.01%  0.19%  0.08%  0.00%  0.13% 
                 
(1) Tangible book value per share (a non GAAP measure) is equal to total shareholders’ equity less goodwill and core deposit intangibles, divided by the number of outstanding shares of our common stock at the end of the relevant period. Please refer to the table above for a reconciliation of this non-GAAP measure.
(2) Annualized.                
(3) Efficiency ratio is calculated as a non-interest expenses divided by the sum of net interest income and non-interest income. 
(4) Nonperforming loans consist of non-accrual loans and accruing TDR loans.         
(5) 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