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Select Bancorp Reports First Quarter 2021 Earnings

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DUNN, N.C., April 28, 2021 (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 March 31, 2021 of $6.3 million with basic and diluted earnings per share of $0.36, compared to net income of $1.1 million with basic and diluted earnings per share of $0.06 for the comparative quarter ended March 31, 2020. The increase in net income in the first quarter of 2021 compared to 2020 was primarily attributable to an increase in earnings from the three additional western North Carolina branches that were acquired in April of 2020, an increase in non-interest income and a reduction in the provision for loan losses.

Total assets, deposits, and gross loans for the Company as of March 31, 2021 were $1.8 billion, $1.6 billion, and $1.3 billion, respectively, compared to total assets of $1.3 billion, total deposits of $982.7 million, and gross loans of $1.0 billion as of the same date in 2020.

Comments of the Chief Executive Officer and Other Matters

William Hedgepeth, President and Chief Executive Officer of the Company, stated, “We are very pleased with our first-quarter earnings. Our markets are rebounding even with the lingering effects of the COVID-19 pandemic. Many of the businesses in the communities we serve are growing and are posting stronger revenues and profits. These businesses have adapted their operations for things such as limited occupancy, having some employees working remotely, revising product and service offerings, changes in hours of operations and implementing other changes to ensure their success. We have assisted our customers in our markets with additional Paycheck Protection Program, or PPP loans, expedited loan renewals and quicker loan decisions. During the first quarter we had strong loan growth of $37.9 million, an increase in deposits of $96.8 million and we increased total assets by $102.3 million. Our mortgage and SBA departments had their strongest quarter yet increasing fee income by $192,000 over the first quarter of 2020. We are very pleased with the growth in our newer western North Carolina markets, and in Holly Springs (Raleigh area), Cornelius (Charlotte area) and Virginia Beach. We are expecting continued franchise growth related to those strategic initiatives. We have worked very hard on our net interest margin and are pleased to report it was 4.02% for the first quarter this year. It has been extremely difficult to maintain our margin at this level but I can assure you it is constantly at the forefront of our daily decisions.”

Hedgepeth continued, “Our asset quality has remained very strong and has even improved when compared to the pre-pandemic first quarter of 2020 and the fourth quarter of 2020. Past dues, nonaccruals and foreclosed real estate were lower at March 31, 2021 when compared to either March 31, 2020 or December 31, 2020. Our staff has worked diligently with our customers to understand the issues and challenges they are facing. Our PPP loan portfolio was approximately $51.2 million at the end of March 2021 and is down approximately $4.3 million since year end. In Phase 1 we originated 1,249 PPP loans for $97.0 million. As of March 31, 2021, we had 1,067 PPP loans that were forgiven totaling $81.4 million. In Phase 3 we have originated $35.6 million as of March 31, 2021. At the height of the pandemic we granted 419 loan deferrals related to COVID-19 for $219.6 million. As of March 31, 2021, we had 18 loan deferrals related to COVID-19 totaling $16.8 million. Based on our asset quality numbers our allowance for loan loss was reduced slightly from year-end, but we believe it is sufficient to absorb any losses in the near future. The country is not out of the pandemic yet so we will continue to provide additional staff resources, together with an ‘all hands-on deck’ philosophy to facilitate as many customer requests as possible. We will continue to work with our customers by assisting them with any stimulus programs in the future.”

“We stated last year that all of us are dealing with unprecedented times, and it was paramount that we remain flexible and accommodate the needs of the communities in which we operate. All of our branch lobbies are now open for business transactions while keeping the health and safety of our customers and employees as our primary objective. As we continue to proceed through the recovery process of the pandemic, we will remain mindful of the changes in the operational activities our customers adopted to address the effects of social distancing measures, occupancy limitations and other challenges that influenced how they interacted with their customers. We believe crafting financial solutions which enable and enhance our customers’ relationships with their customers further strengthens business partnerships during these times.”

Other matters of interest to shareholders are:

  • The Company repurchased 286,799 shares of Company common stock during the first quarter of 2021 under the repurchase plan authorized by the Board of Directors. The Company may repurchase up to an additional 264,099 shares of its common stock under the repurchase plan.

  • Loan growth was over $37.9 million in the first quarter of 2021.

Net Interest Income and Net Interest Margin

Net interest income was $15.9 million and $11.5 million for the first quarter of 2021 and 2020, respectively. On a comparative quarter basis, the Company’s total interest income was positively affected by increased loan balances due to branch acquisitions and organic growth. The increase in interest income was partially offset by a decreasing loan yield, an increase in securities balances at a lower yield, plus the reduction in other earning assets at a lower yield. Average total interest-earning assets were $1.6 billion and $1.1 billion in the first quarter of 2021 and 2020, respectively. The yield on those assets decreased 44 basis points, from 4.98% in the first quarter of 2020 to 4.54% for the same period in 2021. This was primarily due to lower rates on recently originated loans and a reduction of accretion from acquired loans on a comparative quarter basis.

The Company’s average interest-bearing liabilities increased by $325.1 million, to $1.1 billion for the quarter ended March 31, 2021, from $788.4 million for the first quarter of 2020. Low-cost savings, NOW and money market deposits increased $397.6 million while the cost of transactional deposits increased from 0.43% to 0.52%, or 9 basis points year over year. The cost of total deposits decreased from 1.25% in the first quarter of 2020 to 0.72% in the first quarter of 2021 due to the decrease in the cost of time deposits. During the first quarter of 2021, the Company’s net interest margin was 4.02% and net interest spread was 3.79%. In the first quarter of 2020, net interest margin was 4.03% and net interest spread was 3.59%.

Provision for Loan Losses and Asset Quality

During the first quarter of 2021, the Company recorded a recovery of provision for loan losses (of $777,000), based primarily on adjustments to qualitative allowance factors and improved economic performance metrics related to the economic impact of the COVID-19 pandemic. A discount of 0.10% that was applied to all loan pools for factors related to the economic impact of COVID-19 for the prior quarter was removed. This removal resulted from increased availability of COVID-19 vaccines, stimulus packages, and more relaxed restrictions on businesses. We granted payment extensions on approximately 18 commercial and consumer loans totaling $16.8 million related to the impact of COVID-19 for the quarter. On a comparative quarter basis, the Company recorded a provision for loan losses of $2.3 million for the first quarter of 2020, based primarily on adjustments to qualitative loan factors related to the pandemic trends in the loan portfolio present during that quarter. In the first quarter of 2021, the Company recorded net charge-offs of $144,000 compared to net charge-offs of $11,000 in the first quarter of 2020. 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 0.00% in the first quarter of 2020.

Non-interest Income

Non-interest income for the quarter ended March 31, 2021 was $1.7 million, an increase of $238,000 from $1.4 million in the first quarter of 2020. Service charges on deposit accounts totaled $256,000 for the quarter ended March 31, 2021, compared to $338,000 for the first quarter in 2020, representing a $82,000 decrease on a comparative quarter basis. Other non-deposit fees and income increased $128,000 from the first quarter of 2020 to the first quarter of 2021. Fees of $288,000 from presold mortgages and $197,000 from SBA loans totaled $485,000 in the first quarter of 2021, which represented an increase of $192,000 from the $293,000 of fees in the first quarter of 2020. The Company did not sell any investment securities in the first quarter of 2021 or 2020.

Non-interest Expense

Non-interest expenses increased by $949,000 to $10.2 million for the quarter ended March 31, 2021, from $9.2 million for the same period in 2020. In general, most categories of non-interest expenses increased, primarily due to an increase in expenses related to our western North Carolina branches acquired in April 2020. The following are highlights of the significant categories of non-interest expenses during the first quarter of 2021 versus the same period in 2020:

  • Personnel expenses increased $500,000 to $6.1 million, due to additional branch personnel and cost-of-living increases.

  • Occupancy expenses increased $59,000, primarily due to additional branches, repairs and maintenance and increased rent expense due to normal rent escalation.

  • FDIC insurance premium expense increased $392,000 due to increased assets from acquisition and growth.

  • CDI expense decreased $28,000 due to amortization.

  • Professional fees increased by $90,000 to $462,000.

  • Other expenses increased by $112,000 due primarily to increased branches.

Income Taxes

The Company’s effective tax rate was 22.6% and 20.2% for the quarters ended March 31, 2021 and 2020, respectively.

Balance Sheet

Total assets at March 31, 2021 were $1.8 billion, an increase of $568.8 million from a year earlier. Gross loans at March 31, 2021 were $1.3 billion, up $302.8 million or 29.1% from a year earlier, and total deposits were $1.6 billion, an increase of $600.0 million or 61.1% from a year earlier.

Retail deposits (excluding brokered deposits and internet time deposits) grew at a rate of 102.7% or $614.3 million as of March 31, 2021 compared to the same period in 2020. Wholesale deposits decreased from $19.5 million at March 31, 2020 to $3.2 million at March 31, 2021 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, North Carolina; in the following South Carolina communities: Blacksburg and Rock Hill; and in Virginia Beach, Virginia. The Bank also has 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; impacts from the recent presidential election, change in congressional leadership, and change in executive branch leadership, including regulatory agendas that may impact the business climate in which we operate; changes in interest rates; 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; 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

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

March 31, 2020

(Unaudited)

(Audited)

(Unaudited)

(Unaudited)

(Unaudited)

(Dollars in thousands)

ASSETS

Cash and due from banks

$

22,533

$

23,324

$

25,068

$

24,037

$

20,030

Interest-earning deposits in other banks

133,884

87,399

249,541

157,521

35,544

Certificates of deposit

250

-

-

-

-

Federal funds sold

4,966

5,364

8,046

9,726

11,673

Investment securities available for sale, at fair value

208,648

194,492

87,434

62,958

64,738

Loans held for sale

3,953

2,064

2,945

3,455

1,606

Loans

1,342,316

1,304,384

1,283,457

1,249,999

1,039,514

Allowance for loan losses

(13,187

)

(14,108

)

(13,561

)

(12,054

)

(10,586

)

NET LOANS

1,329,129

1,290,276

1,269,896

1,237,945

1,028,928

Accrued interest receivable

4,991

5,110

4,486

4,400

3,839

Stock in Federal Home Loan Bank of Atlanta, at cost

862

1,147

3,059

3,059

3,059

Other non-marketable securities

655

709

718

718

718

Foreclosed real estate

1,968

2,172

3,237

3,561

3,737

Premises and equipment, net

20,222

20,587

20,883

20,893

17,868

Right of use lease asset

8,358

8,558

8,756

8,953

8,414

Bank owned life insurance

30,586

30,432

30,271

30,110

29,950

Goodwill

42,907

42,907

41,914

41,914

24,579

Core deposit intangible ("CDI")

1,363

1,513

1,677

1,856

1,431

Other assets

17,054

13,991

14,015

7,854

7,380

TOTAL ASSETS

$

1,832,329

$

1,730,045

$

1,771,946

$

1,618,960

$

1,263,494

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits:

Demand

$

448,835

$

395,916

$

408,209

$

400,098

$

250,031

Savings

55,184

51,843

51,629

52,597

41,815

Money market and NOW

708,172

649,677

610,275

495,609

306,051

Time

370,446

388,381

402,667

390,449

384,754

TOTAL DEPOSITS

1,582,637

1,485,817

1,472,780

1,338,753

982,651

Short-term debt

-

-

20,000

20,000

20,000

Long-term debt

12,372

12,372

37,372

37,372

37,372

Lease Liability

8,766

8,930

9,089

9,243

8,669

Accrued interest payable

206

246

449

457

536

Accrued expenses and other liabilities

15,859

7,312

18,889

1,597

2,181

TOTAL LIABILITIES

1,619,840

1,514,677

1,558,579

1,407,422

1,051,409

Shareholders' Equity

Common stock

17,227

17,507

17,787

17,863

18,056

Additional paid-in-capital

132,400

135,058

137,130

137,559

138,788

Retained earnings

67,178

60,838

56,917

54,460

53,779

Common stock issued to deferred compensation trust

(2,449

)

(2,416

)

(2,352

)

(2,553

)

(2,791

)

Directors' Deferred Compensation Plan Rabbi Trust

2,449

2,416

2,352

2,553

2,791

Accumulated other comprehensive income (loss)

(4,316

)

1,965

1,533

1,656

1,462

TOTAL SHAREHOLDERS' EQUITY

212,489

215,368

213,367

211,538

212,085

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY

$

1,832,329

$

1,730,045

$

1,771,946

$

1,618,960

$

1,263,494


SELECT BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

For the Three Months Ended

For the Twelve Months Ended

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2020*

December 31, 2019*

(Dollars in thousands, except for share amounts)

INTEREST INCOME

Loans

$

17,035

$

17,901

$

15,404

$

14,086

$

13,589

$

60,980

$

54,605

Federal funds sold and interest-earning deposits in other banks

25

52

54

33

168

307

1,838

Investments

920

752

367

381

421

1,921

2,003

TOTAL INTEREST INCOME

17,980

18,705

15,825

14,500

14,178

63,208

58,446

INTEREST EXPENSE

Money market, NOW and savings deposits

924

1,041

891

648

348

2,928

1,616

Time deposits

1,038

1,269

1,415

1,576

1,931

6,191

8,061

Short-term debt

16

131

145

141

87

504

62

Long-term debt

71

240

263

281

352

1,136

1,817

TOTAL INTEREST EXPENSE

2,049

2,681

2,714

2,646

2,718

10,759

11,556

NET INTEREST INCOME

15,931

16,024

13,111

11,854

11,460

52,449

46,890

PROVISION FOR (RECOVERY OF) LOAN LOSSES

(777

)

400

1,638

1,933

2,273

6,244

438

NET INTEREST INCOME AFTER PROVISION FOR (RECOVERY OF) LOAN LOSSES

16,708

15,624

11,473

9,921

9,187

46,205

46,452

NON-INTEREST INCOME

Fees on the sale of mortgages

485

248

517

355

293

1,413

753

Gain on securities

-

-

-

-

-

-

48

Service charges on deposit accounts

256

291

257

206

338

1,092

1,161

Other fees and income

941

1,002

950

850

813

3,615

3,457

TOTAL NON-INTEREST INCOME

1,682

1,541

1,724

1,411

1,444

6,120

5,419

NON-INTEREST EXPENSE

Personnel

6,132

5,977

5,742

5,786

5,632

23,137

20,278

Occupancy and equipment

990

986

1,008

986

931

3,911

3,695

Deposit insurance

380

374

370

76

(12

)

808

184

Professional Fees

462

430

399

451

372

1,652

1,886

CDI amortization

151

164

179

195

179

717

825

Merger/acquisition related expenses

-

-

7

709

39

755

406

Information systems

1,046

1,049

1,043

972

1,038

4,102

3,492

Foreclosed-related expenses

(140

)

342

228

187

5

762

140

Debt extinguishment

-

1,616

-

-

-

1,616

-

Other

1,175

1,193

1,091

1,140

1,063

4,487

4,234

TOTAL NON-INTEREST EXPENSE

10,196

12,131

10,067

10,502

9,247

41,947

35,140

INCOME BEFORE INCOME TAXES

8,194

5,034

3,130

830

1,384

10,378

16,731

INCOME TAXES

1,854

1,113

673

149

280

2,215

3,696

NET INCOME

$

6,340

$

3,921

$

2,457

$

681

$

1,104

$

8,163

$

13,035

NET INCOME PER COMMON SHARE OUTSTANDING

Basic

$

0.36

$

0.22

$

0.14

$

0.04

$

0.06

$

0.46

$

0.69

Diluted

$

0.36

$

0.22

$

0.14

$

0.04

$

0.06

$

0.45

$

0.68

WEIGHTED AVERAGE COMMON

Basic Outstanding Shares

17,386,715

17,637,540

17,847,913

18,013,863

18,255,351

17,937,596

19,016,808

Diluted Outstanding Shares

17,415,680

17,661,922

17,866,822

18,030,136

18,287,064

17,961,258

19,063,237

* Audited


Select Bancorp, Inc.

Asset quality

For Periods Ended

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2020

December 31, 2019

(Dollars in thousands, except for share amounts, unaudited)

Non-accrual loans

$

6,095

$

6,790

$

7,695

$

7,979

$

7,201

$

6,790

$

5,941

Accruing TDRs

7,072

7,506

6,044

6,420

5,619

7,506

6,207

Total non-performing loans

13,167

14,296

13,739

14,399

12,820

14,296

12,148

Foreclosed real estate

1,968

2,172

3,237

3,561

3,737

2,172

3,533

Total non-performing assets

$

15,135

$

16,468

$

16,976

$

17,960

$

16,557

$

16,468

$

15,681

Accruing loans past due 90 days or more

$

1,673

$

802

$

1,548

$

1,326

$

1,182

$

802

$

1,231

Allowance for loan losses

$

13,187

$

14,108

$

13,561

$

12,054

$

10,586

$

14,108

$

8,324

Allowance for loans to period end loans

0.98

%

1.08

%

1.06

%

0.96

%

1.02

%

1.08

%

0.81

%

Non-performing loans & accruing loans past due 90 days or more to period ending loans

1.11

%

1.16

%

1.19

%

1.26

%

1.35

%

1.16

%

1.30

%

Non-performing loans to period ending loans

0.98

%

1.10

%

1.07

%

1.15

%

1.23

%

1.10

%

1.18

%

Allowance for loans to non-performing loans

100

%

99

%

99

%

84

%

83

%

99

%

69

%

Allowance for loans to non-performing Assets

87

%

86

%

80

%

67

%

64

%

86

%

53

%

Allowance for loans to non-performing Assets and accruing loans past due 90 days or more

78

%

82

%

73

%

63

%

60

%

82

%

49

%

Non-performing assets to total assets

0.83

%

0.95

%

0.96

%

1.11

%

1.31

%

0.95

%

1.23

%

Non-performing assets to accruing loans past due 90 days or more to total assets

0.92

%

1.00

%

1.05

%

1.19

%

1.40

%

1.00

%

1.33

%

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

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2020

December 31, 2019

Net interest margin:

Net Interest Margin-tax equivalent (1)

$

16,014

$

16,075

$

13,141

$

11,883

$

11,489

$

52,588

$

47,037

Purchased loan accretion and early payoff charges

(379

)

(506

)

(455

)

(620

)

(105

)

(1,581

)

(904

)

Net Interest Margin(2) (Non-GAAP)

$

15,635

$

15,569

$

12,686

$

11,263

$

11,384

$

51,007

$

46,133

Loans receivable interest income:

Loans receivable interest income

$

17,035

$

17,913

$

15,415

$

14,097

$

13,600

$

61,025

$

54,645

Purchased loan accretion and early payoff charges

(379

)

(506

)

(455

)

(620

)

(105

)

(1,581

)

(904

)

Loans receivable interest income (Non-GAAP)

$

16,656

$

17,407

$

14,960

$

13,477

$

13,495

$

59,444

$

53,741

Acquired and non-acquired loans:

Acquired loans receivable

$

163,428

$

180,152

$

199,794

$

213,466

$

122,363

$

180,152

$

129,595

Non-acquired loans receivable

1,178,888

1,124,232

1,083,663

1,036,533

917,151

1,124,232

900,380

Total gross loans receivable

$

1,342,316

$

1,304,384

$

1,283,457

$

1,249,999

$

1,039,514

$

1,304,384

$

1,029,975

% Acquired

12.2

%

13.8

%

15.6

%

17.1

%

11.8

%

13.8

%

12.6

%

Non-acquired loans

$

1,178,888

$

1,124,232

$

1,083,663

$

1,036,533

$

917,151

$

1,124,232

$

900,380

Allowance for loan losses

13,187

14,108

13,561

12,054

10,586

14,108

8,324

Allowance for loan losses to non-acquired loans (Non-GAAP)

1.12

%

1.25

%

1.25

%

1.16

%

1.15

%

1.25

%

0.92

%

Total gross loan receivable

$

1,342,316

$

1,304,384

$

1,283,457

$

1,249,999

$

1,039,514

$

1,304,384

$

1,029,975

Allowance for loan losses

13,187

14,108

13,561

12,054

10,586

14,108

8,324

Allowance for loan losses to total gross loans receivable

0.98

%

1.08

%

1.06

%

0.96

%

1.02

%

1.08

%

0.81

%

For Periods Ended

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2020

December 31, 2019

Tangible common equity

Total shareholders' equity

$

212,489

$

215,368

$

213,367

$

211,538

$

212,085

$

215,368

$

212,775

Adjustment:

Goodwill

42,907

42,907

41,914

41,914

24,579

42,907

24,579

Core deposit intangibles

1,363

1,513

1,677

1,856

1,431

1,513

1,610

Tangible common equity

$

168,219

$

170,948

$

169,776

$

167,768

$

186,075

$

170,948

$

186,586

Common shares outstanding(3)

17,227,104

17,507,103

17,786,552

17,862,554

18,055,692

17,507,103

18,330,058

Book value per common share(4)

$

12.33

$

12.30

$

12.00

$

11.84

$

11.75

$

12.30

$

11.61

Tangible book value per common share(5)

$

9.76

$

9.76

$

9.55

$

9.39

$

10.31

$

9.76

$

10.18

(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

March 31,

December 31,

September 30,

June 30,

March 31,

December 31,

December 31,

December 31,

2021

2020

2020

2020

2020

2020

2019

2018

Summary of Operations:

Total interest income

$

17,980

$

18,705

$

15,825

$

14,500

$

14,178

$

63,208

$

58,446

$

56,835

Total interest expense

2,049

2,681

2,714

2,646

2,718

10,759

11,556

9,450

Net interest income

15,931

16,024

13,111

11,854

11,460

52,449

46,890

47,385

Provision for (recovery of) loan losses

(777

)

400

1,638

1,933

2,273

6,244

438

(156

)

Net interest income after provision

16,708

15,624

11,473

9,921

9,187

46,205

46,452

47,541

Noninterest income

1,682

1,541

1,724

1,411

1,444

6,120

5,419

4,701

Merger/acquisition related expenses

-

-

7

709

39

755

406

1,826

Noninterest expense

10,196

12,131

10,060

9,793

9,208

41,192

34,734

32,724

Income before income taxes

8,194

5,034

3,130

830

1,384

10,378

16,731

17,692

Provision for income taxes

1,854

1,113

673

149

280

2,215

3,696

3,910

Net Income

6,340

3,921

2,457

681

1,104

8,163

13,035

13,782

Share and Per Share Data:

Earnings per share - basic

$

0.36

$

0.22

$

0.14

$

0.04

$

0.06

$

0.46

$

0.69

$

0.87

Earnings per share - diluted

$

0.36

$

0.22

$

0.14

$

0.04

$

0.06

$

0.45

$

0.68

$

0.87

Book value per share

$

12.33

$

12.30

$

12.00

$

11.84

$

11.75

$

12.30

$

11.61

$

10.85

Tangible book value per share(1)

$

9.76

$

9.76

$

9.55

$

9.39

$

10.31

$

9.76

$

10.18

$

9.47

Ending shares outstanding

17,227,104

17,507,103

17,786,552

17,862,554

18,055,692

17,507,103

18,330,058

19,311,505

Weighted average shares outstanding:

Basic

17,386,715

17,637,540

17,847,913

18,013,863

18,255,351

17,937,596

19,016,808

15,812,585

Diluted

17,415,680

17,661,922

17,866,822

18,030,136

18,287,064

17,961,258

19,063,237

15,877,633

Selected Performance Ratios:

Return on average assets(2)

1.46

%

0.87

%

0.58

%

0.18

%

0.35

%

0.52

%

1.03

%

1.12

%

Return on average equity(2)

11.90

%

7.26

%

4.56

%

1.28

%

2.07

%

3.81

%

6.08

%

8.51

%

Net interest margin

4.02

%

4.10

%

3.73

%

3.45

%

4.03

%

3.79

%

4.04

%

4.19

%

Efficiency ratio (3)

57.89

%

69.06

%

67.82

%

73.83

%

71.36

%

70.32

%

66.40

%

62.83

%

Period End Balance Sheet Data:

Gross loans

$

1,342,316

$

1,304,384

$

1,283,457

$

1,249,999

$

1,039,514

$

1,304,384

$

1,029,975

$

986,040

Total interest-earning assets

1,613,526

1,529,322

1,429,614

1,222,416

1,137,010

1,529,322

1,167,857

1,119,344

Goodwill

42,907

42,907

41,914

41,914

24,579

42,907

24,579

24,579

Core deposit intangible

1,363

1,513

1,677

1,856

1,431

1,513

1,610

2,085

Total assets

1,832,329

1,730,045

1,771,946

1,618,960

1,263,494

1,730,045

1,275,076

1,258,525

Deposits

1,582,637

1,485,817

1,472,780

1,338,753

982,651

1,485,817

992,838

980,427

Short-term debt

-

-

20,000

20,000

20,000

-

-

7,000

Long-term debt

12,372

12,372

37,372

37,372

37,372

12,372

57,372

57,372

Shareholders' equity

212,489

215,368

213,367

211,538

212,085

215,368

212,775

209,611

Selected Average Balances:

Gross Loans

$

1,322,031

$

1,288,138

$

1,255,027

$

1,193,985

$

1,020,630

$

1,189,894

$

1,004,051

$

987,634

Total interest-earning assets

1,613,963

1,561,104

1,403,106

1,321,172

1,147,631

1,386,187

1,164,149

1,119,344

Core Deposit Intangible

1,423

1,572

1,743

1,529

1,507

1,588

1,812

2,547

Total Assets

1,761,938

1,784,289

1,683,174

1,520,278

1,255,943

1,561,865

1,268,728

1,228,576

Deposits

1,516,612

1,499,162

1,399,840

1,237,343

972,162

1,278,068

981,132

989,838

Short-term debt

-

17,609

20,000

20,000

12,747

17,596

3,414

21,393

Long-term debt

12,372

34,383

37,438

37,438

44,625

38,440

57,372

49,357

Shareholders' equity

216,007

214,861

214,277

213,796

214,502

214,360

214,324

161,953

Asset Quality Ratios:

Nonperforming loans (4)

$

13,167

$

14,296

$

13,739

$

14,399

$

12,820

$

14,296

$

12,148

$

11,635

Other real estate owned

1,968

2,172

3,237

3,561

3,737

2,172

3,533

1,088

Allowance for loan losses

13,187

14,108

13,561

12,054

10,586

14,108

8,324

8,669

Nonperforming loans (4) to period-end loans

0.98

%

1.10

%

1.07

%

1.15

%

1.23

%

1.10

%

1.18

%

1.18

%

Allowance for loan losses to period-end loans

0.98

%

1.08

%

1.06

%

0.96

%

1.02

%

1.08

%

0.81

%

0.88

%

Delinquency ratio (5)

0.26

%

0.46

%

0.17

%

0.22

%

0.43

%

0.46

%

0.34

%

0.19

%

Net loan charge-offs (recoveries) to average loans (2)

0.04

%

-0.05

%

0.04

%

0.16

%

0.00

%

0.04

%

0.08

%

0.00

%

(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-accrural 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