New Century Bancorp Reports Third Quarter 2009 And Year-to-Date Results

• Press Release
• Source: New Century Bancorp
• On 5:33 pm EDT, Friday October 30, 2009

DUNN, N.C., Oct. 30 /PRNewswire-FirstCall/ -- New Century Bancorp (the "Company" Nasdaq: NCBC), the holding company for New Century Bank, reported a net loss for the quarter ended September 30, 2009, of ($369,000) compared to net income of $159,000 for the same period in 2008. Basic and diluted net income (loss) per share was ($0.05) for third quarter 2009 compared to $0.02 for third quarter 2008.

For the nine month period ended the same date, the Company reported a net loss of ($214,000) compared to net income of $473,000 for the same period in 2008. Basic and diluted net income (loss) per share was ($0.03) for the first nine months of 2009 compared to $0.07 for the first nine months of 2008.

As New Century Bank, along with all banks nationwide, deals with the nearly unprecedented fallout from the recession, quarterly earnings continue to be adversely impacted by increases in the provision for loan losses resulting from nonperforming loans. The third quarter increase in the Company's nonperforming loans resulted principally from one $3.0 million relationship that was downgraded from past due to nonaccrual status. In response to this increase in our nonperforming loans, during the quarter we recorded a provision for loan losses of $2.4 million.

Net interest income increased in a year-to-year comparison from $4.6 million for the three months ended September 30, 2008, to nearly $5.1 million for the same period in 2009.

"While our quarterly and year-to-date results are not what we want them to be," said William L. Hedgepeth III, president and CEO of New Century Bancorp and New Century Bank, "there are a number of positive indicators we are pleased with at this time. Perhaps most importantly, net interest margin improved from 3.34% for the third quarter last year to 3.52% for the three months ended September 30, 2009. Net interest income is a key driver of a bank's financial performance so this positive trend from 2008 to 2009 is, we hope, an indication that things are moving in a positive direction. Our staff has worked hard to improve our margin and we are now seeing the results of their efforts.

"Hand-in-hand with this, we are closely managing noninterest expenses. We have accomplished this with a keen focus on reducing and eliminating expenses wherever we can without impacting service to our customers or hampering our ability to grow the bank. Due to these efforts, our efficiency ratio was 69.5% for the three months ended September 30, 2009, compared to 78.7% for the same period in 2008."

Impacting income for the first nine months of 2009, were two previously reported unusual items: a special insurance premium assessment of $286,000 from the Federal Deposit Insurance Corporation (FDIC) (the assessment was levied against all banks), and a one-time permanent impairment charge of $51,000 from our investment in the stock of the parent company of Silverton Bank, Atlanta, GA.

As of September 30, 2009, the Company reported total assets of $636.8 million, total deposits of $533.4 million and total loans of $472.6 million. As of September 30, 2008, these figures stood at total assets of $596.5 million, total deposits of $501.8 million, and total loans of $457.8 million, representing increases of 6.8%, 6.3%, and 3.2%, respectively, in a year-to-year comparison.

"To experience this level of growth in assets, loans and deposits in this economy is an indication of the hard work of our staff, as well as the strength of the unique markets we serve. We believe Cumberland and Harnett counties, in particular, are poised for tremendous growth due to BRAC (Base Realignment and Closure). In a recent article in the Fayetteville Observer, it was reported that BRAC would bring 40,000 new residents to Fayetteville, Cumberland County and the surrounding area by 2013, which will result in many new businesses and other opportunities as these communities support this incredible growth. New Century Bank is doing, and will continue to do, all we can to meet the financial services needs of these new residents, and to support our communities as we welcome this growth.

"New Century remains well-capitalized, which is the highest regulatory standard," Hedgepeth said. "Because of our capital position, the Company made the decision not to participate in the U.S. Government's TARP (Troubled Asset Relief Program) Capital Purchase Plan, as has already been reported. We are committed to maintaining a sound capital position and sufficient liquidity, meeting the borrowing needs of the markets we serve, and positioning the Company for future growth,"

New Century Bank is headquartered in Dunn and has offices in Dunn, Clinton, Fayetteville (2), Goldsboro, Lillington, Lumberton, Pembroke, and Raeford.

The information as of and for the quarter ended September 30, 2009, as presented is unaudited. 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 estimates of credit quality trends, 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, our limited operating history, substantial changes in financial markets, 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.

    New Century Bancorp, Inc.
    Selected Financial Information and Other Data
    ($ in thousands, except per share data)


                                 At or for the three months ended

                          September    June       March    December  September
                             30,        30,        31,        31,        30,
                            2009       2009       2009       2008       2008
                          ---------  -------     ------    --------  ---------
    Summary of Operations:
      Total interest
       income              $8,223     $8,009     $8,252     $8,348     $8,678
      Total interest
       expense              3,170      3,459      3,673      3,991      4,043
                          ---------  -------     ------    --------  ---------
        Net interest
         income             5,053      4,550      4,579      4,357      4,635
      Provision for
       loan losses          2,377      1,414        685      2,142        895
                          ---------  -------     ------    --------  ---------
        Net interest
         income after
         provision          2,676      3,136      3,894      2,215      3,740
      Noninterest income      812        792        845        790        745
      Noninterest expense   4,075      4,428      4,080      4,158      4,233
                          ---------  -------     ------    --------  ---------
        Income (loss)
         before income
         taxes              (587)      (500)        659    (1,153)        252
      Provision for
       income taxes
       (benefit)            (218)      (247)        251      (487)         93
                          ---------  -------     ------    --------  ---------
        Net income (loss)  $(369)     $(253)       $408     $(666)       $159
                          =========  =======     ======    ========  =========

    Share and Per Share
     Data:
      Earnings (loss) per
       share - basic      $(0.05)    $(0.04)      $0.06    $(0.10)      $0.02
      Earnings (loss) per
       share - diluted     (0.05)     (0.04)       0.06     (0.10)       0.02
      Book value per
       share                 9.22      9.21        9.23      9.17        9.03
      Tangible book value
       per share             7.82      7.80        7.82      7.76        7.61
      Ending shares
       outstanding      6,837,742 6,836,149   6,831,149 6,831,149   6,827,649
      Weighted average
       shares outstanding:
         Basic          6,837,292 6,831,973   6,831,149 6,829,731   6,826,481
         Diluted        6,837,292 6,831,973   6,835,476 6,829,731   6,879,919

    Selected Performance
     Ratios:
      Return on average
       assets              -0.23%     -0.16%      0.27%     -0.43%      0.11%
      Return on average
       equity              -2.30%     -1.60%      2.61%     -4.27%      1.02%
      Net interest margin   3.52%      3.16%      3.26%      3.07%      3.34%
      Efficiency ratio (1) 69.48%     82.89%     75.22%     80.78%     78.68%

    Period End Balance Sheet Data:
      Loans, net of
       unearned income   $472,578   $467,872   $469,794   $460,626   $457,784
      Total Earning
       Assets             591,973    573,951    584,030    560,534    547,965
      Goodwill and other
       intangible assets    9,565      9,603      9,642      9,680      9,719
      Total Assets        636,810    629,000    628,748    605,767    596,457
      Deposits            533,350    527,621    523,537    505,119    501,823
      Short term debt      25,693     23,461     27,408     23,175     17,896
      Long term debt       12,372     12,372     12,372     12,372     12,372
      Shareholders'
       equity              63,013     62,947     63,059     62,659     61,653

    Selected Average
     Balances:
      Gross Loans        $469,668   $469,581   $468,062   $458,100   $456,120
      Total Earning
       Assets             570,059    577,774    570,221    562,415    551,353
      Goodwill and other
       intangible assets    9,584      9,622      9,660      9,699      9,738
      Total Assets        634,312    630,180    616,026    607,685    595,049
      Deposits            532,427    526,894    513,079    508,911    500,914
      Short term debt      23,020     24,606     24,458     21,659     17,077
      Long term debt       12,372     12,372     12,372     12,372     12,372
      Shareholders'
       equity              63,588     63,615     63,421     61,868     62,017

    Asset Quality Ratios:
      Nonperforming loans $16,003    $13,352     $7,739     $8,630     $9,148
      Other real estate
       owned                2,346      2,196      2,333      2,799        677
      Allowance for
       loan losses         10,317      8,519      7,792      8,860      7,140
      Nonperforming
       loans (2) to
       period-end loans     3.39%      2.85%      1.65%      1.87%      2.00%
      Allowance for
       loanlosses to
       period- end loans    2.18%      1.82%      1.66%      1.92%      1.56%
      Delinquency Ratio (3) 1.61%      0.51%      0.98%      0.32%      0.34%
      Net loan charge-offs
       to average loans     0.49%      0.59%      1.52%      0.39%      0.21%
                          ---------  -------     ------    --------  ---------


                                         At or for the nine months ended

                                        September   September   September
                                        30, 2009    30, 2008    30, 2007
                                       ---------   ---------    ---------
    Summary of Operations:
      Total interest income              $24,483     $26,886     $31,255
      Total interest expense              10,302      13,382      15,324
                                       ---------   ---------    ---------
        Net interest income               14,181      13,504      15,931
      Provision for loan losses            4,477       2,141       5,518
                                       ---------   ---------    ---------
        Net interest income
         after provision                   9,704      11,363     10,413
      Noninterest income                   2,449       2,338       2,970
      Noninterest expense                 12,581      12,980      12,166
                                       ---------   ---------    ---------
         Income (loss) before
          income taxes                       (428)        721       1,217
      Provision for income
       taxes (benefit)                      (214)        248         419
                                       ---------   ---------    ---------
        Net income (loss)                  $(214)       $473        $798
                                       ==========  =========    =========

    Share and Per Share Data:
      Earnings (loss) per share
       - basic                             $(0.03)      $0.07       $0.12
      Earnings (loss) per share
       - diluted                            (0.03)       0.07        0.12
      Book value per share                   9.22        9.03        8.92
      Tangible book value per share          7.82        7.61        7.45
      Ending shares outstanding         6,837,742   6,827,649   6,730,874
      Weighted average shares
       outstanding:
         Basic                          6,833,494   6,808,914   6,560,750
         Diluted                        6,833,494   6,811,297   6,761,640

    Selected Performance Ratios:
      Return on average assets             -0.05%       0.11%       0.18%
      Return on average equity             -0.45%       1.01%       1.79%
      Net interest margin                   3.31%       3.26%       3.97%
      Efficiency ratio (1)                 75.65%      81.93%      64.37%

    Period End Balance Sheet Data:
      Loans, net of unearned income      $472,578    $457,784    $462,713
      Total Earning Assets                591,973     547,965     545,760
      Goodwill and other intangible
       assets                               9,565       9,719       9,873
      Total Assets                        636,810     596,457     592,328
      Deposits                            533,350     501,823     504,535
      Short term debt                      25,693      17,896      12,974
      Long term debt                       12,372      12,372      12,372
      Shareholders' equity                 63,013      61,653      60,035

    Selected Average Balances:
      Gross Loans                        $469,109    $449,362    $449,114
      Total Earning Assets                572,684     552,240     536,324
      Goodwill and other intangible
       assets                               9,622       9,776       9,929
      Total Assets                        626,903     597,303     580,595
      Deposits                            524,204     502,603     490,053
      Short term debt                      24,023      17,593      16,070
      Long term debt                       12,372      12,372      12,372
      Shareholders' equity                 63,542      62,187      59,604

    Asset Quality Ratios:
      Nonperforming loans                 $16,003      $9,148      $6,300
      Other real estate owned               2,346         669         387
      Allowance for loan losses            10,317       7,140       8,636
      Nonperforming loans (2) to
       period-end loans                     3.39%       2.00%       1.36%
      Allowance for loan losses to
       period-end loans                     2.18%       1.56%       1.87%
      Delinquency Ratio (3)                 1.61%       0.34%       1.43%
      Net loan charge-offs to average
       loans                                0.86%       1.09%       1.30%
                                       ---------   ---------    ---------


    (1)  Efficiency ratio is calculated as non-interest expenses divided by
         the sum of net interest income and non-interest income.
    (2)  Nonperforming loans consist of non-accrual loans and restructured
         loans.
    (3)  Delinquency Ratio includes 30-89 days past due and excludes non-
         accrual loans.

www.newcenturybanknc.com

Buzz up!