BNC Bancorp (BNNC) 8-K BNC Bancorp Reports 57% Increase in Second Quarter Earnings

Press Release

Source: BNC Bancorp

Contact: W. Swope Montgomery, Jr.

President and CEO

336-476-9200

BNC Bancorp Reports 57% Increase in Second Quarter Earnings

THOMASVILLE, N.C., / -- BNC Bancorp (NASDAQ: BNCN) today reported operating results for the quarter and six-month periods ended June 30, 2007.

For the quarter ended June 30, 2007, the Company reported net income of $2.12 million, an increase of 57.2% when compared to the $1.35 million reported for the comparable quarter in 2006. Diluted earnings per share increased to $0.30 for the quarter, a 15.4% increase when compared to $0.26 reported for the same quarter in 2006.

For the six-month period ended June 30, 2007, the Company reported net income of $4.04 million, an increase of 62.9% when compared to the $2.48 million reported for the first six months of 2006. Diluted earnings per share increased to $0.57 for the six-month period, compared to $0.49 reported for same period in 2006.

Total assets as of June 30, 2007 were $1.070 billion, an increase of 61.2% compared to the $664 million as of June 30, 2006. Total loans on June 30, 2007 were $876 million, an increase of 57.1% from the $557 million reported as of June 30, 2006. Deposits increased 59.6% over the same one-year period. Compared to balances at December 31, 2006, total loans increased $101 million, or 13.0% during the first six months of 2007.

“We are extremely pleased to report another strong quarter in terms of net income and asset growth, despite an extremely challenging climate for the banking industry. Fueled by loan growth and credit quality that continues to outperform our peers, diluted earnings per share for the quarter were up over 15% from year ago levels, and total assets increased $118 million, or 12.5%, over the first six months of 2007. The organic growth our Company continues to produce is due to the investment we have made in recruiting, hiring, motivating and rewarding our seasoned bankers who are well-respected in their communities and well-versed in the fundamentals of credit underwriting,” said W. Swope Montgomery, Jr., President and CEO.

“Over the past twelve months, with strong organic growth and the acquisition of SterlingSouth, our Company’s assets have grown by over $400 million, or 60%, while reporting a similar 60% increase in year-over-year net income. As has always been our promise, growth without a corresponding increase in profits for our shareholders is not part of our plan, and the Company’s performance during the last twelve months speaks volumes about our commitment to this principle,” said Montgomery.

Montgomery continued, “Asset quality, our number one priority, continues to be excellent. Many within our industry have recently experienced some erosion in credit fundamentals due to slowdowns in the housing sector and troubles in the sub-prime residential credit markets. I am pleased that we have no exposure to the sub-prime sector in the portfolio. Our non-performing assets have decreased to 0.31% of total assets from 0.59% a year earlier. As of June 30, 2007, non-accrual loans, other real estate owned, and loans 90 days past due and still accruing interest totaled $3.3 million compared to $3.9 million one year earlier. Net charge-offs to average loans for the first six months of 2007 were at an annualized rate of 0.08%.”

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BNC Bancorp is the parent Company of Bank of North Carolina, a $1.070 billion commercial bank that provides a complete line of banking and financial services to individuals and businesses through full-service banking offices located in the cities of Thomasville, High Point, Salisbury, Greensboro, Archdale, Lexington, Kernersville, Harrisburg, Northern Davidson County and Oak Ridge, North Carolina. In addition, the Bank operates a commercial and mortgage loan production office in Winston-Salem, North Carolina. Bank of North Carolina is insured by the FDIC and is an equal housing lender. BNC Bancorp’s stock is quoted in the NASDAQ Capital Market under the symbol “BNCN.”

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

From time to time, we make written and oral forward-looking statements within the meaning of certain securities laws, including in this press release, in other filings with the U.S. Securities and Exchange Commission (www.sec.gov), in reports to shareholders and in other communications. These forward-looking statements include, among others, statements with respect to our objectives for 2007 and beyond, and the medium and long terms strategies to achieve those objectives, as well as statements with respect to our beliefs, plans, expectations, anticipations, estimates and intentions.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the strength of the North Carolina economy in general and the strength of the local economies within North Carolina in which we conduct operations; the strength of the United States economy; the effects of changes in monetary and fiscal policy, including changes in interest rate policies of the Board of Governors of the Federal Reserve System in the United States; judicial decisions; the effects of competition in the markets in which we operate; inflation; the timely development and introduction of new products and services in receptive markets; the impact of changes in the laws and regulations regulating financial services (including banking, insurance and securities); changes in tax laws; technological changes; our ability to complete strategic acquisitions and to integrate acquisitions; judicial or regulatory proceedings; changes in consumer spending and saving habits; the possible impact on our businesses of international conflicts and other developments including those relating to the war on terrorism; and our anticipation of and success in managing the risks implicated by the foregoing.

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QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except per share data)
(Unaudited)
	For the
	Three Months Ended
	June 30, 2007			June 30, 2006
SUMMARY STATEMENTS OF OPERATIONS
Interest income	$	18,146		$	11,301		60.6	%
Interest expense		10,090			5,549		81.8
Net interest income		8,056			5,752		40.1
Provision for loan losses		650			710		(8.5	)
Net interest income after provision for loan losses		7,406			5,042		46.9
Noninterest income		1,307			822		59.0
Noninterest expense		5,700			3,977		43.3
Income before income tax expense		3,013			1,887		59.7
Provision for income taxes		895			540		65.7
Net income		2,118			1,347		57.2
PER SHARE DATA
Earnings per share, basic	$	0.31		$	0.28		10.7	%
Earnings per share, diluted	$	0.30			0.26		15.4
Weighted average common shares outstanding:
Basic		6,849,403			4,824,948
Diluted		7,090,473			5,087,442
PERFORMANCE RATIOS
Return on average assets		0.84	%		0.84	%
Return on average equity		11.44	%		15.76	%
Return on average tangible equity		18.52	%		17.54	%
Net yield on earning assets (taxable equivalent)		3.71	%		4.06	%
Average equity to average assets		7.32	%		5.30	%

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QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except per share data)
(Unaudited)
	For the
	Six Months Ended
	June 30, 2007			June 30, 2006			% Change
SUMMARY STATEMENTS OF OPERATIONS
Interest income	$	34,988		$	21,569			62.2	%
Interest expense		19,272			10,424			84.9
Net interest income		15,716			11,145			41.0
Provision for loan losses		1,200			1,230			(2.4	)
Net interest income after provision for loan losses		14,516			9,915			46.4
Noninterest income		2,511			1,618			55.2
Noninterest expense		11,288			8,048			40.3
Income before income tax expense		5,739			3,485			64.7
Provision for income taxes		1,704			1,008			69.1
Net income		4,035			2,477			62.9
PER SHARE DATA
Earnings per share, basic	$	0.59		$	0.51			15.7	%
Earnings per share, diluted	$	0.57		$	0.49			16.3
Weighted average common shares outstanding:
Basic		6,825,181			4,818,411
Diluted		7,082,357			5,084,237
PERFORMANCE RATIOS
Return on average assets		0.82	%		0.80	%
Return on average equity		11.04	%		14.76	%
Return on average tangible equity		17.95	%		16.45	%
Net yield on earning assets (taxable equivalent)		3.75	%		4.07	%
Average equity to average assets		7.47	%		5.30	%
Allowance for loan losses as a % of total loans		1.28	%		1.25	%
Non-performing assets to total assets, end of period		0.31	%		0.59	%
Ratio of net charge-offs to average loans outstanding		0.04	%		0.07	%

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QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands, except per share data)
(Unaudited)
	For the
	Three Months Ended
	June 30, 2007			March 31, 2007			December 31, 2006			September 30, 2006			June 30, 2006			December 31, 2005
SUMMARY STATEMENTS OF OPERATIONS
Interest income	$	18,146		$	16,842		$	16,616		$	15,026		$	11,301		$	9,652
Interest expense		10,090			9,182			8,509			7,548			5,549			4,343
Net interest income		8,056			7,660			8,107			7,478			5,752			5,308
Provision for loan losses		650			550			780			645			710			900
Net interest income after provision for loan losses		7,406			7,110			7,327			6,833			5,042			4,408
Noninterest income		1,307			1,204			1,152			1,051			822			904
Noninterest expense		5,700			5,588			5,540			5,522			3,977			3,622
Income before income tax expense		3,013			2,726			2,939			2,362			1,887			1,690
Provision for income taxes		895			809			878			710			540			470
Net income		2,118			1,917			2,041			1,652			1,347			1,220
Net interest income, as reported	$	8,056		$	7,660		$	8,107		$	7,478		$	5,752		$	5,308
Tax-equivalent adjustment		401			386			411			348			301			249
Net interest income, tax-equivalent		8,457			8,046			8,518			7,826			6,053			5,557
PER SHARE DATA
Earnings per share, basic	$	0.31		$	0.28		$	0.30		$	0.26		$	0.28		$	0.25
Earnings per share, diluted		0.30			0.27			0.29			0.25			0.26			0.24
Weighted average common shares outstanding:
Basic		6,849,403			6,800,690			6,698,899			6,269,752			4,824,948			4,803,706
Diluted		7,090,473			7,074,287			7,026,623			6,580,289			5,087,442			5,104,670
PERFORMANCE RATIOS
Return on average assets		0.84	%		0.81	%		0.88	%		0.81	%		0.80	%		0.83	%
Return on average equity		11.44	%		10.63	%		11.32	%		10.72	%		14.76	%		15.43	%
Return on average tangible equity		18.52	%		17.38	%		19.13	%		17.39	%		16.45	%		17.33	%
Net yield on earning assets (taxable equivalent)		3.71	%		3.79	%		4.09	%		4.08	%		4.07	%		4.15	%
Average equity to average assets		7.32	%		7.62	%		7.77	%		7.56	%		5.41	%		5.40	%

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QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands)
(Unaudited)
	As of
	June 30, 2007		June 30, 2006		% Change
SELECTED BALANCE SHEET DATA
End of period balances
Total loans	$	875,515	$	557,227		57.1	%
Allowance for loan losses		11,243		6,968		61.4
Loans, net of allowance for loan losses		864,272		550,259		57.1
Securities, available for sale		79,133		53,525		47.8
Total Assets		1,070,633		664,306		61.2
Deposits:
Noninterest-bearing deposits		71,653		52,501		36.5
Interest-bearing demand and savings		205,170		127,159		61.4
CD's and other time deposits		621,160		383,052		62.2
Total deposits		897,983		562,712		59.6
Borrowed Funds		92,149		63,587		44.9
Total interest-bearing liabilities		918,479		573,798		60.1
Shareholders' Equity		74,970		33,478		123.9

	As of
	June 30, 2007		March 31, 2007		December 31, 2006		September 30, 2006		June 30, 2006		December 31, 2005
SELECTED BALANCE SHEET DATA
End of period balances
Total loans	$	875,515	$	805,519	$	774,664	$	737,633	$	557,227	$	499,247
Allowance for loan losses		11,243		10,747		10,400		9,956		6,968		6,140
Loans, net of allowance for loan losses		864,272		794,772		764,264		727,677		550,259		493,107
Securities, available for sale		79,133		77,918		76,700		75,443		53,525		42,489
Total Assets		1,070,633		984,802		951,731		900,995		664,306		594,550
Deposits:
Noninterest-bearing deposits		71,653		70,660		65,932		62,773		52,501		39,573
Interest-bearing demand and savings		205,170		195,788		189,624		183,585		127,159		128,303
CD's and other time deposits		621,160		545,505		531,221		473,822		383,052		323,016
Total Deposits		897,983		811,953		786,777		720,180		562,712		490,892
Borrowed Funds		92,149		93,010		86,386		104,030		63,587		66,557
Total interest-bearing liabilities		918,479		834,303		807,231		761,437		573,798		517,876
Shareholders' Equity		74,970		73,875		72,523		70,458		33,478		33,114

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QUARTERLY PERFORMANCE SUMMARY
BNC BANCORP
(Dollars in thousands)
(Unaudited)
	For the Three Month Period Ended
	June 30, 2007		March 31, 2007		December 31, 2006		September 30, 2006		June 30, 2006		December 31, 2005
SELECTED BALANCE SHEET DATA
Quarterly average balances
Loans, net of allowance for loan losses		824,509		776,447		745,829		679,963		536,258		481,074
Securities, available for sale		75,982		77,230		72,504		72,519		48,810		42,486
Total earning assets		914,527		861,971		826,706		760,742		596,544		530,994
Total Assets		1,014,860		959,426		922,335		817,209		646,938		581,361
Deposits:		900,491		853,677		818,333		752,481		585,068		523,560
Noninterest-bearing deposits		69,438		64,462		70,140		49,965		50,346		42,778
Interest-bearing demand and savings		202,839		191,505		186,793		168,840		134,704		125,631
CD's and other time deposits		563,500		532,720		495,338		452,157		356,449		308,531
Total Deposits		835,777		788,687		752,271		670,962		541,499		476,940
Borrowed Funds		98,548		91,844		95,948		87,133		65,857		67,750
Total interest-bearing liabilities		934,325		880,531		848,219		758,095		607,356		544,690
Shareholders' Equity		74,258		73,152		71,752		61,819		34,289		31,379

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