DUNN, N.C., Nov. 8 /PRNewswire-FirstCall/ -- New Century Bancorp
(the "Company" -- Nasdaq: NCBC), the holding company for New
Century Bank and New Century Bank South, reported a net loss for
the quarter ended September 30, 2007, of $274,000 compared to net
income of $1.1 million for the same period in 2006. Basic and
diluted earnings per share for third quarter 2007 were ($0.04),
compared to basic and diluted earnings per share for third quarter
2006 of $0.20 and $0.19, respectively. For the nine month period
ended September 30, 2007, net income for the Company was $798,000,
compared to $3.4 million for the same period in 2006. Basic and
diluted earnings per share for the first nine months of 2007 were
$0.12, compared to basic and diluted earnings per share for the
first nine months of 2006 of $0.74 and $0.70, respectively. Third
quarter results were significantly impacted by a $2.5 million
addition to the Company's allowance for loan losses resulting from
an increase in the level of nonperforming loans included in the
loan portfolio of the Company's subsidiary, New Century Bank. Also,
an assessment has been made of the level of potential loss in loan
portfolios of both subsidiary banks due to continued drought
conditions in the Company's market area. This assessment also
contributed to the increase in the level of the allowance. As of
September 30, 2007, the Company reported total assets of $592.3
million compared to $544.0 million at September 30, 2006, an
increase of 9%. Total deposits were $504.5 million and total loans
were $462.7 million at the end of third quarter 2007, compared to
total deposits of $452.0 million and total loans of $398.9 million
as of the end of third quarter 2006, increases of 12% and 17%,
respectively. The Board of Directors of New Century Bank is
entering into a Memorandum of Understanding with the Federal
Deposit Insurance Corporation and the North Carolina Commissioner
of Banks, which sets forth certain actions required to be taken by
management of New Century Bank. The primary issues to be addressed
relate to New Century Bank's lending function, including conducting
extensive loan risk rating reviews; addressing problem loans and
enhancing the credit administration department; improving loan
documentation, policies and procedures; and correcting known
violations of laws, rules and regulations. New Century Bank is
actively addressing all of the issues identified in the memorandum
of understanding. These underwriting and credit administration
matters were identified by New Century Bank's management in early
2007 and continue to be aggressively addressed through extensive
reviews of the Bank's loan portfolio, both internally and with the
assistance of an external credit review firm. As of the end of
third quarter 2007, independent third parties had reviewed more
than 60% of the New Century Bank loan portfolio and nearly 20% of
the New Century Bank South loan portfolio. Based on the reviews
performed, the credit issues appear to be isolated to New Century
Bank's portfolio. The aforementioned addition to the Company's
allowance for loan losses during the third quarter was
significantly influenced by changes in the risk ratings for loans
included in these reviews. According to William L. Hedgepeth II,
president and CEO of New Century Bancorp, "During the third
quarter, we continued to make improvements to our credit
administration function in order to address and correct
shortcomings. We hired a consultant who specializes in bank credit
administration to review all processes in this area and to provide
us with the appropriate recommendations on moving forward.
Adjustments are underway in nearly all credit processes to align
them with the overall strategy of the Company, which entails the
implementation of best practices in all phases of the operations
for our subsidiary banks. "As the president of New Century Bancorp,
I appreciate the leadership of our management team and the
dedicated manner in which they have addressed these issues. I am
excited by the positive changes already implemented and am
confident that we are positioning the Company to take advantage of
the great opportunities available to us in our markets. We continue
to appreciate the support of our customers, shareholders, and the
communities we serve." New Century Bank has offices in Dunn,
Clinton, Goldsboro, and Lillington, and New Century Bank South has
offices in Fayetteville, Lumberton, Pembroke and Raeford. The
information as of and for the quarter and nine months ended
September 30, 2007, 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 At or for the
three months ended nine months ended September 30, September 30,
2007 2006 2007 2006 Summary of Operations: Total interest income
$10,599 $9,741 $31,255 $25,622 Total interest expense 5,289 4,341
15,324 11,382 Net interest income 5,310 5,400 15,931 14,240
Provision for loan losses 2,474 519 5,518 1,120 Net interest income
after provision 2,836 4,881 10,413 13,120 Noninterest income 899
865 2,970 2,097 Noninterest expense 4,156 4,029 12,166 9,781 Income
(Loss) before income taxes (421) 1,717 1,217 5,436 Provision for
income taxes (147) 626 419 2,004 Net income (Loss) $(274) $1,091
$798 $3,432 Share and Per Share Data (1): Earnings per share -
basic $(0.04) $0.17 $0.12 $0.62 Earnings per share - diluted (0.04)
0.16 0.12 0.58 Book value per share 8.92 9.22 8.92 9.22 Tangible
book value per share 7.45 7.71 7.45 7.71 Ending shares outstanding
6,730,874 6,131,500 6,730,874 6,131,500 Weighted average shares
outstanding: Basic 6,639,617 6,413,652 6,560,750 5,546,032 Diluted
6,639,617 6,740,816 6,761,640 5,885,027 Selected Performance
Ratios: Return on average assets -0.18% 0.83% 0.18% 0.97% Return on
average equity -1.81% 7.83% 1.79% 11.06% Net interest margin 3.87%
4.42% 3.97% 4.31% Efficiency ratio (2) 66.94% 64.31% 64.37% 59.87%
Period End Balance Sheet Data: Loans, net of unearned income
$462,713 $398,891 $462,713 $398,891 Total Earning Assets 545,760
500,051 545,760 500,051 Goodwill and other intangible assets 9,873
9,270 9,873 9,270 Total assets 592,328 543,979 592,328 543,979
Deposits 504,535 452,045 504,535 452,045 Short term debt 12,974
19,292 12,974 19,292 Long term debt 12,372 12,372 12,372 12,372
Shareholders' equity 60,035 56,529 60,035 56,529 Selected Average
Balances: Gross Loans $454,412 $385,866 $449,114 $354,387 Total
Earning Assets 544,892 484,725 536,324 441,710 Goodwill and other
intangible assets 9,891 6,941 9,929 2,339 Total assets 590,378
524,436 580,595 471,184 Deposits 501,782 435,416 490,053 395,755
Short term debt 13,569 18,221 16,070 19,079 Long term debt 12,372
12,372 12,372 12,372 Shareholders' equity 60,208 55,310 59,604
41,483 Asset Quality Ratios: Nonperforming assets $6,667 $2,334
$6,667 $2,334 Allowance for loan losses 8,636 5,955 8,636 5,955
Nonperforming loans (3) to period-end loans 1.36% 0.54% 1.36% 0.54%
Allowance for loan losses to period-end loans (4) 1.88% 1.49% 1.88%
1.49% Net loan charge-offs to average loans 0.43% 0.74% 1.30% 0.33%
(1) Adjusted for all periods presented to reflect the effects of a
six- for-five stock split in the form of a 20% stock dividend in
December 2006. (2) Efficiency ratio is calculated as non-interest
expenses divided by the sum of net interest income and non-interest
income. (3) Nonperforming loans consist of non-accrual loans and
restructured loans. (4) Allowance for loan losses to period-end
loans ratio excludes loans held for sale. DATASOURCE: New Century
Bancorp CONTACT: Lisa F. Campbell, Executive Vice President, Chief
Operating Officer and Chief Financial Officer, +1-910-892-7080, Web
site: http://www.newcenturybanknc.com/
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