CARY, N.C., Jan. 18, 2008 (PRIME NEWSWIRE) -- Crescent Financial Corporation (Nasdaq:CRFN), parent company of Crescent State Bank in Cary, North Carolina, today announced unaudited net income for the year ended December 31, 2007, of $6,248,800 or $0.65 per diluted share compared with $4,904,000 or $0.64 per diluted share for the year ended December 31, 2006. All financial results for 2006 have been adjusted to reflect the 11-for-10 stock split paid in May 2007. While net income increased by 27%, the increase in earnings per share was not comparable due to 2,675,000 shares, adjusted for the stock split, issued in connection with the acquisition of Port City Capital Bank in August 2006. The increase in net income for 2007 was primarily attributable to strong earning asset growth over the past twelve month period.
Average earning assets for 2007 increased by approximately $224.2 million to $716.0 million compared to $491.8 million for 2006. Growth in earning assets resulted in a 50% increase in interest income changing from $36.7 million for the prior year to $54.9 million for 2007. The associated growth in interest-bearing liabilities and increases in the cost of funds resulted in a 64% rise in interest expense. Interest expense on deposits and borrowings increased to $28.2 million from $17.3 million for the prior year. Net interest income before loan loss provision increased by 37% to $26.7 million from $19.4 million. The provision for loan losses increased by 70% to $1.7 million as of December 31, 2007, from $991,000. Although non-interest income was flat for the comparative periods at $2.6 million, the Company experienced increases in service charges and fees on deposit accounts and other customer service fees. Results were impacted by a decline in mortgage loan origination revenue and losses sustained on the disposal of other real estate owned. Non-interest expenses increased by 27% from $13.4 million to $17.8 million primarily in the areas of personnel, occupancy and data processing expenses. The 2006 results included only four months of non-interest expenses attributable to our Wilmington operations as the acquisition of Port City Capital Bank occurred on August 31, 2006.
Unaudited net income for the three-month period ended December 31, 2007, was $1,772,000 or $0.19 per diluted share compared with $1,643,000 or $.18 per diluted share for the three-month period ended December 31, 2006. In comparing results for the two quarterly periods, net income increased by 8%, net interest income increased by 13%, non-interest income declined by 7% and non-interest expenses increased by 15%. The loan loss provision was $337,000 for the current three-month period compared to $374,000 for the prior year period.
Crescent Financial Corporation reported total assets on December 31, 2007, of $835.5 million reflecting a 20% increase over total assets of $697.9 million on December 31, 2006. Total net loans increased by 23% from $542.9 million to $667.6 million, total deposits increased 12% from $541.9 million to $605.4 million and total stockholders' equity grew by 10% from $83.0 million to $91.7 million.
Mike Carlton, President and CEO, stated, "We are pleased to be able to report to our shareholders the significant increases in both balance sheet and net income over the past twelve months despite an extremely challenging climate for the banking industry as a whole. During the year, we further expanded the infrastructure within the organization, completed the conversion of Port City Capital Bank into Crescent and opened new offices in Garner and Knightdale. These strategic accomplishments are a direct reflection of the continued plan and commitment to build a top-performing financial institution.
"Many of the challenges the banking industry faced in 2007 will continue on into 2008. The narrowing of the net interest margin, slowing national economy, exposure to sub prime mortgages and credit deterioration are just a few examples of volatility within the industry. Fortunately for Crescent, we operate in some of the best markets within the Southeast, have a very clean credit portfolio relative to our peers and have no exposure to the sub prime sector within the lending or investment securities portfolios.
"As we move into 2008 and beyond we remain committed to further expansion of the franchise. We anticipate opening a new office in Wilmington in the second quarter, and two additional offices in Raleigh before year end. Through our existing twelve branch network and other identified locations, we are well positioned for further successes."
Crescent State Bank is a state chartered bank operating twelve banking offices in Cary (2), Apex, Clayton, Holly Springs, Southern Pines, Pinehurst, Sanford, Garner, Raleigh, Wilmington and Knightdale, North Carolina and one loan production office in Raleigh, 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)
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2007 2007 2007 2007 2006 (a)
--------- --------- --------- --------- ---------
ASSETS
Cash and due
from banks $ 12,048 $ 13,127 $ 14,350 $ 12,731 $ 14,295
Interest earning
deposits with
banks 212 365 1,021 209 763
Federal funds
sold 97 4,054 16,664 13,158 92
Investment
securities
available for
sale at fair
value 90,758 89,799 88,240 86,360 84,723
Loans 675,916 651,652 608,318 586,148 549,819
Allowance for
loan losses (8,273) (8,190) (7,536) (7,277) (6,945)
--------- --------- --------- --------- ---------
Net Loans 667,643 643,462 600,782 578,871 542,874
Accrued interest
receivable 3,762 3,721 3,422 3,263 3,046
Federal Home Loan
Bank stock 6,791 6,566 4,271 4,181 3,583
Bank premises and
equipment 8,094 6,921 6,923 6,710 5,908
Investment in
life insurance 9,123 9,035 8,947 8,858 5,683
Goodwill 30,233 30,233 30,233 30,225 30,225
Other assets 6,779 6,968 7,369 6,911 6,717
--------- --------- --------- --------- ---------
Total Assets $ 835,540 $ 814,251 $ 782,222 $ 751,477 $ 697,909
========= ========= ========= ========= =========
LIABILITIES AND
STOCKHOLDERS'
EQUITY
LIABILITIES
Deposits
Demand $ 69,368 $ 72,653 $ 81,181 $ 74,127 $ 70,420
Savings 110,516 122,359 101,429 95,744 78,379
Money market
and NOW 80,316 88,295 97,146 101,088 97,343
Time 345,231 312,320 338,057 319,050 295,739
--------- --------- --------- --------- ---------
Total
Deposits 605,431 595,627 617,813 590,009 541,881
Short-term
borrowings 13,755 10,000 -- 18,000 24,451
Long-term debt 121,248 116,248 75,248 55,248 45,248
Accrued expenses
and other
liabilities 3,447 3,273 3,118 3,179 3,295
--------- --------- --------- --------- ---------
Total
Liabilities 743,881 725,148 696,179 666,436 614,875
STOCKHOLDERS'
EQUITY
Common stock 9,405 9,336 9,187 8,302 8,265
Additional paid-
in capital 73,596 73,394 72,554 62,832 62,659
Retained earnings 8,620 6,847 5,285 14,076 12,611
Accumulated other
comprehensive
loss 38 (474) (983) (169) (501)
--------- --------- --------- --------- ---------
Total
Stockholders'
Equity 91,659 89,103 86,043 85,041 83,034
Total Liabili-
ties and
Stockholders'
Equity $ 835,540 $ 814,251 $ 782,222 $ 751,477 $ 697,909
========= ========= ========= ========= =========
Ending shares
out-
standing(b) 9,404,579 9,335,755 9,187,468 9,132,055 9,091,650
Book value
per share $ 9.75 $ 9.54 $ 9.37 $ 9.31 $ 9.13
Tangible book
value per
share $ 6.42 $ 6.19 $ 5.95 $ 5.87 $ 5.67
Crescent Financial Corporation
Consolidated Income Statements
(Amounts in thousands except share and per share data)
(Unaudited)
For the year ended
December 31,
-----------------------
2007 2006 (a)
--------- ---------
INTEREST INCOME
Loans $ 50,022 $ 33,094
Investment securities available for sale 4,454 3,303
Fed funds sold and other interest 396 310
--------- ---------
Total Interest Income 54,872 36,707
--------- ---------
INTEREST EXPENSE
Deposits 23,429 14,207
Short-term borrowings 830 844
Long-term debt 3,958 2,206
--------- ---------
Total Interest Expense 28,217 17,257
--------- ---------
Net Interest Income 26,655 19,450
Provision for loan losses 1,684 991
--------- ---------
Net interest income after
provision for loan losses 24,971 18,459
--------- ---------
Non-interest income
Mortgage loan origination income 512 642
Service charges and fees on deposit accounts 1,360 1,287
Gain/loss on sale of securities -- --
Gain/(loss) on disposal of assets (66) 3
Other 815 680
--------- ---------
Total non-interest income 2,621 2,612
Non-interest expense
Salaries and employee benefits 9,875 7,307
Occupancy and equipment 2,296 2,018
Data processing 1,056 834
Other 4,596 3,228
--------- ---------
Total non-interest expense 17,823 13,387
--------- ---------
Income before income taxes 9,769 7,684
Income taxes 3,520 2,780
--------- ---------
Net income $ 6,249 $ 4,904
========= =========
NET INCOME PER COMMON SHARE (b)
Basic $ 0.68 $ 0.67
========= =========
Diluted $ 0.65 $ 0.64
========= =========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING (b)
Basic 9,211,779 7,281,016
========= =========
Diluted 9,635,694 7,614,807
========= =========
Return on average assets 0.80% 0.93%
Return on average equity 7.15% 8.72%
Net interest margin 3.72% 3.95%
Allowance for loan losses to avg loans 1.22% 1.26%
Nonperforming loans to total loans 0.40% 0.02%
Nonperforming assets to total assets 0.36% 0.03%
For the three-month period ended
-----------------------------------------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2007 2007 2007 2007 2006
--------- --------- --------- --------- ---------
INTEREST INCOME
Loans $ 13,249 $ 12,867 $ 12,331 $ 11,575 $ 11,125
Investment
securities
available for
sale 1,155 1,142 1,096 1,061 1,038
Fed funds sold
and other
interest 14 86 175 121 125
--------- --------- --------- --------- ---------
Total Interest
Income 14,418 14,095 13,602 12,757 12,288
--------- --------- --------- --------- ---------
INTEREST EXPENSE
Deposits 5,782 6,121 5,965 5,561 5,161
Short-term
borrowings 182 149 209 290 234
Long-term debt 1,421 1,016 859 662 649
--------- --------- --------- --------- ---------
Total Interest
Expense 7,385 7,286 7,033 6,513 6,044
--------- --------- --------- --------- ---------
Net Interest
Income 7,033 6,809 6,569 6,244 6,244
Provision for
loan losses 337 666 322 359 374
--------- --------- --------- --------- ---------
Net interest
income after
provision for
loan losses 6,696 6,143 6,247 5,885 5,870
--------- --------- --------- --------- ---------
Non-interest
income
Mortgage loan
origination
income 116 146 135 115 138
Service charges
and fees on
deposit
accounts 355 336 322 348 341
Gain/loss on
sale of
securities -- -- -- -- --
Gain/(loss) on
disposal of
assets (65) -- -- (1) 3
Other 249 209 190 167 219
--------- --------- --------- --------- ---------
Total non-
interest
income 655 690 647 629 701
Non-interest
expense
Salaries and
employee
benefits 2,460 2,476 2,535 2,404 2,169
Occupancy and
equipment 602 582 564 548 547
Data processing 261 278 257 261 260
Other 1,254 1,066 1,267 1,007 1,003
--------- --------- --------- --------- ---------
Total non-
interest
expense 4,577 4,402 4,623 4,220 3,979
--------- --------- --------- --------- ---------
Income before
income taxes 2,774 2,431 2,271 2,294 2,592
Income taxes 1,002 868 823 828 949
--------- --------- --------- --------- ---------
Net income $ 1,772 $ 1,563 $ 1,448 $ 1,466 $ 1,643
========= ========= ========= ========= =========
NET INCOME PER
COMMON SHARE (b)
Basic $ 0.19 $ 0.17 $ 0.16 $ 0.16 $ 0.18
========= ========= ========= ========= =========
Diluted $ 0.18 $ 0.16 $ 0.15 $ 0.15 $ 0.17
========= ========= ========= ========= =========
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING (b)
Basic 9,363,700 9,246,318 9,140,356 9,093,392 9,074,681
========= ========= ========= ========= =========
Diluted 9,678,862 9,642,429 9,626,134 9,611,833 9,566,909
========= ========= ========= ========= =========
Return on
average assets 0.85% 0.79% 0.76% 0.82% 0.95%
Return on
average equity 7.73% 7.04% 6.73% 7.06% 7.90%
Net interest
margin 3.64% 3.72% 3.73% 3.81% 3.92%
Allowance for
loan losses to
avg loans 1.22% 1.26% 1.24% 1.24% 1.26%
Nonperforming
loans to total
loans 0.40% 0.22% 0.10% 0.10% 0.02%
Nonperforming
assets to
total assets 0.36% 0.21% 0.09% 0.10% 0.03%
(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.