DUNN, N.C., Jan. 29 /PRNewswire-FirstCall/ -- -- Prior to write-off
of goodwill, Company's net income for 2009 was $232,000, or $.03
per share. -- $8.6 million write- off of goodwill from 2006
purchase of Progressive State Bank negatively impacts results. --
Deposit growth for 2009 was 7.0%. -- Loan growth for the year was
4.5%. -- Net interest margin increased 14 basis points to 3.41% for
the year. -- Non-interest expenses declined 2.5%, despite an
increase in FDIC insurance premium expense from $525,000 in 2008 to
$1.3 million in 2009. -- Results were accomplished without TARP
(Troubled Asset Relief Program) funds. New Century Bancorp (the
"Company" Nasdaq: NCBC), the holding company for New Century Bank,
today reported financial results for 2009. The write-off of
goodwill resulted in a decrease in earnings for the Company from
net income of $232,000 before the write-off to a net loss of ($8.4
million) afterwards. This compares to the net loss of ($193,000)
for 2008, a year during which there were no write-offs of goodwill.
Basic and diluted net income per share for 2009 prior to the
goodwill write-off was $.03 compared to a net (loss) per share of
($1.24) after consideration of the write-off. This compares to the
net (loss) per share of ($0.03) for 2008. Goodwill Impairment
Goodwill, a measure of the difference between the price paid for an
acquisition and the fair value of its assets, is being examined and
subsequently charged-off in part or in whole by many financial
institutions due to the effects of the prolonged economic downturn
on financial stocks. At year-end 2009, New Century wrote-off $8.67
million in goodwill, an intangible asset, which resulted from the
purchase of Progressive State Bank in 2006. The goodwill impairment
charge, a one-time, non-cash, accounting transaction, does not
affect the liquidity, tangible capital, or regulatory capital
ratios of the Company. Financial Results Total assets for the
Company at year-end 2009 were $630.6 million, total deposits were
$540.3 million, and total loans were $481.2 million, compared to
total assets of $605.8 million, total deposits of $505.1 million,
and total loans of $460.6 million at year-end 2008, increases of
4.1%, 7.0%, and 4.5%, respectively. "While the write-off of
goodwill resulted in New Century Bancorp reporting a loss for the
year," said William L. Hedgepeth, president and CEO of New Century
Bancorp and New Century Bank, "We are pleased with our core
operating results in light of the fact that unlike many banks, we
did not accept TARP funds; even though we, like all banks, faced a
number of financial challenges. In addition, we are pleased with a
number of positive indicators for the future. Those indicators
include strong loan and deposit growth, increasing margins, and
lower non-interest expenses. Earnings for the year also were
impacted by the addition of $5.5 million to the Company's provision
for loan losses, compared to $4.3 million in 2008; OREO losses of
$565,000 compared to $239,000 in 2008; and, the payment of FDIC
insurance premiums totaling $1.3 million, compared to only $525,000
in 2008. "In order to recognize operating efficiencies, we
consolidated our operations in Clinton, NC into one office. In
preparing for the future, we recently invested in and expanded our
ability to serve our customers through installing a new core
processor and by developing a new website, with added capabilities.
While the past few years have been difficult, we continue to meet
the lending needs of our customers and communities, to expand and
develop our staff, and to approach the future through a disciplined
approach. "The Company remains 'well-capitalized,' which is the
highest regulatory standard. While there are challenges ahead--such
as high unemployment levels, there is also a great deal of
opportunity. As our market area and our nation begin to come out of
the recession, we plan to be in the position to be part of it and
to help lead the way for our customers." 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 year ended December 31,
2009, as presented is unaudited. The above release presents
financial information excluding the goodwill impairment charge
(non-GAAP). The goodwill impairment charge is included in the
financial results presented in accordance with generally accepted
accounting principles (GAAP). The Company believes that the
exclusion of goodwill impairment in expressing net income and
earnings per share data provides a more meaningful base for
period-to-period comparisons which will assist investors in
analyzing the operating results of the Company and predicting
operating performance. Non-GAAP measures are not in accordance
with, or a substitute for, measures prepared in accordance with
GAAP, and may be different from non-GAAP measures used by other
companies. Non-GAAP measures have limitations in that they do not
reflect all of the amounts associated with our results of
operations that would be reflected in measures determined in
accordance with GAAP. Non-GAAP measures should only be used to
evaluate our results of operations in conjunction with
corresponding GAAP measures. 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 -------------------------------- December September June
March December 31, 30, 30, 31, 31, 2009 2009 2009 2009 2008
-------- --------- ---- ----- -------- Summary of Operations: Total
interest income $8,378 $8,223 $8,009 $8,252 $8,348 Total Interest
expense 2,821 3,170 3,459 3,673 3,991 ------- ----- ----- -----
----- Net interest income 5,557 5,053 4,550 4,579 4,357 Provision
for loan losses 995 2,377 1,414 685 2,142 ----- ----- ----- -----
----- Net interest income after provision 4,562 2,676 3,136 3,894
2,215 Noninterest income 821 812 792 1,040 890 Goodwill Impairment
8,674 - - - - Noninterest expense 4,796 4,075 4,428 4,275 4,258
----- ----- ----- ----- ----- Income (loss) before income taxes
(8,087) (587) (500) 659 (1,153) Provision for income taxes
(benefit) 141 (218) (247) 251 (487) ------ ------ ------ ----
------ Net income (loss) $(8,228) $(369) $(253) $408 $(666)
======== ====== ====== ==== ====== Share and Per Share Data:
Earnings (loss) per share- basic $(1.20) $(0.05) $(0.04) $0.06
$(0.10) Earnings (loss)per share- diluted (1.20) (0.05) (0.04) 0.06
(0.10) Book value per share 7.96 9.22 9.21 9.23 9.17 Tangible book
value per share 7.83 7.82 7.80 7.82 7.76 Ending shares outstanding
6,837,952 6,837,742 6,836,149 6,831,149 6,831,149 Weighted average
shares outstanding: Basic 6,837,863 6,837,292 6,831,973 6,831,149
6,829,731 Diluted 6,837,863 6,837,292 6,831,973 6,835,476 6,829,731
Selected Performance Ratios: Return on average assets -5.09% -0.23%
-0.16% 0.27% -0.43% Return on average equity -51.24% -2.30% -1.60%
2.61% -4.27% Net interest margin 3.70% 3.52% 3.16% 3.26% 3.07%
Efficiency ratio (1) 75.20% 69.48% 82.89% 76.08% 81.15% Period End
Balance Sheet Data: Loans, net of unearned income $481,176 $472,578
$467,872 $469,794 $460,626 Total Earning Assets 588,536 591,973
573,951 584,030 560,534 Goodwill and other intangible assets 853
9,565 9,603 9,642 9,680 Total Assets 630,635 636,810 629,000
628,748 605,767 Deposits 540,262 533,350 527,621 523,537 505,119
Short term debt 20,564 25,693 23,461 27,408 23,175 Long term debt
12,372 12,372 12,372 12,372 12,372 Shareholders' equity 54,409
63,013 62,947 63,059 62,659 Selected Average Balances: Gross Loans
$476,845 $469,668 $469,581 $468,062 $458,100 Total Earning Assets
595,250 570,059 577,774 570,221 562,415 Goodwill and other
intangible assets 9,451 9,584 9,622 9,660 9,699 Total Assets
641,254 634,312 630,180 616,026 607,685 Deposits 538,643 532,427
526,894 513,079 508,911 Short term debt 23,498 23,020 24,606 24,458
21,659 Long term debt 12,372 12,372 12,372 12,372 12,372
Shareholders' equity 63,710 63,588 63,615 63,421 61,868 Asset
Quality Ratios: Nonperforming loans $15,965 $16,003 $13,352 $7,739
$8,630 Other real estate owned 2,530 2,346 2,196 2,333 2,799
Allowance for loan losses 10,359 10,317 8,519 7,792 8,860
Nonperforming loans (2) to period-end loans 3.32% 3.39% 2.85% 1.65%
1.87% Allowance for loan losses to period- end loans 2.15% 2.18%
1.82% 1.66% 1.92% Delinquency Ratio (3) 0.41% 1.61% 0.51% 0.98%
0.32% Net loan charge- offs to average loans 0.79% 0.49% 0.59%
1.52% 0.39% At or for the twelve months ended
--------------------------------- December 31, December 31,
December 31, ------------ ------------ ------------ 2009 2008 2007
------------ ------------ ------------ Summary of Operations: Total
interest income $32,861 $35,233 $41,598 Total interest expense
13,122 17,372 20,653 ------ ------ ------ Net interest income
19,739 17,861 20,945 Provision for loan losses 5,472 4,283 5,974
----- ----- ----- Net interest income after provision 14,267 13,578
14,971 Noninterest income 2,610 3,128 3,978 Goodwill Impairment
8,674 - - Noninterest expense 16,717 17,138 16,337 ------ ------
------ Income (loss) before income taxes (8,514) (432) 2,612
Provision for income taxes (benefit) (73) (239) 953 --- ---- ---
Net income (loss) $(8,441) $(193) $1,659 ======= ===== ====== Share
and Per Share Data: Earnings (loss) per share- basic $(1.24)
$(0.03) $0.25 Earnings (loss) per share- diluted (1.24) (0.03) 0.24
Book value per share 7.96 9.17 9.09 Tangible book value per share
7.83 7.76 7.63 Ending shares outstanding 6,837,952 6,831,149
6,730,874 Weighted average Shares outstanding: Basic 6,834,595
6,809,437 6,603,631 Diluted 6,834,595 6,809,437 6,844,426 Selected
Performance Ratios: Return on average assets -1.34% -0.03% 0.28%
Return on average equity -13.28% -0.31% 2.77% Net interest margin
3.41% 3.27% 3.93% Efficiency ratio (1) 74.80% 81.65% 65.55% Period
End Balance Sheet Data: Loans, net of unearned income $481,176
$460,626 $442,875 Total Earning Assets 588,536 560,534 543,167
Goodwill and other intangible assets 853 9,680 9,834 Total Assets
630,635 605,767 591,025 Deposits 540,262 505,119 498,123 Short term
debt 20,564 23,175 16,967 Long term debt 12,372 12,372 12,372
Shareholders' equity 54,409 62,659 61,173 Selected Average
Balances: Gross Loans $471,059 $451,558 $449,799 Total Earning
Assets 578,372 554,798 539,526 Goodwill and other intangible assets
9,578 9,756 9,910 Total Assets 630,521 599,912 583,809 Deposits
527,844 504,188 493,989 Short term debt 23,891 18,615 15,672 Long
term debt 12,372 12,372 12,372 Shareholders' equity 63,584 62,107
59,888 Asset Quality Ratios: Nonperforming loans $15,965 $8,536
$5,041 Other real estate owned 2,530 2,799 542 Allowance for loan
losses 10,359 8,860 8,314 Nonperforming loans (2) to period-end
loans 3.32% 1.85% 1.13% Allowance for loan losses to period- end
loans 2.15% 1.92% 1.88% Delinquency Ratio (3) 0.41% 0.32% 1.31% Net
loan charge- offs to average loans 0.84% 0.82% 1.15% (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. http://www.newcenturybanknc.com/ DATASOURCE: New
Century Bancorp CONTACT: Lisa F. Campbell, Executive Vice
President, Chief Operating Officer and Chief Financial Officer,
+1-910-892-7080; Mobile: +1-910-591-8086; Web Site:
http://www.newcenturybanknc.com/
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