Exhibit 99.1
PRESS RELEASE
For Immediate Release
Bank of the Carolinas Corporation Reports First Quarter Earnings
MOCKSVILLE, NORTH CAROLINA, April 23, 2007—— Bank of the Carolinas Corporation (Nasdaq Capital Market: BCAR), today reported financial results for the three months ended March 31, 2007.
For the three month period ended March 31, 2007, diluted earnings per share were $.20 which was unchanged from the first quarter of 2006. Net income for the first quarter of 2007 was $780,000, as compared to $804,000 in the first quarter of 2006.
Total assets at March 31, 2007 amounted to $472.8 million, an increase of 20.1% when compared to the March 31, 2006 amount of $393.7 million. Net loans increased 15.0% over the prior year to $353.2 million, while deposits grew to $407.2 million, a 22.5% increase. The allowance for loan losses was 1.05% of total loans as of March 31, 2007, and net year to date charge-offs were 0.07% of average loans outstanding.
Net interest income increased only slightly over the year ago quarter as an increase in earning assets was substantially offset by a decline in the Company’s net interest margin. However, the Company did experience significant growth of 20.2% in non-interest income for the first quarter of 2007 versus the comparable quarter in 2006. While non-interest expense rose 13.0% quarter over quarter, it decreased as a percentage of average assets.
As was previously announced on April 12, 2007, the Company has entered into a definitive agreement with Randolph Bank & Trust Company (Pink Sheets: RDBN) whereby Randolph Bank will be merged into Bank of the Carolinas. The transaction is subject to shareholder and regulatory approval and is expected to be consummated in the fourth quarter of 2007.
Bank of the Carolinas Corporation is the holding company for Bank of the Carolinas, a state chartered bank headquartered in Mocksville, NC with offices in Advance, Asheboro, Cleveland, Harrisburg, King, Landis, Lexington and Winston-Salem. Common stock of the Company is traded on the NASDAQ Capital Market under the symbol BCAR.
This press release contains forward-looking statements as defined by federal securities laws. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results could differ materially from current projections. Bank of the Carolinas Corporation undertakes no obligation to revise these statements following the date of this press release.
For further information contact:
Eric E. Rhodes
Chief Financial Officer
Bank of the Carolinas
(336) 751-5755
Bank of the Carolinas Corporation
Consolidated Balance Sheets
(In Thousands—Unaudited)
March 31 | ||||||||
2007 | 2006 | |||||||
Assets | ||||||||
Cash and Due from Banks | $ | 5,594 | $ | 4,486 | ||||
Interest-Bearing Deposits in Banks | 100 | 173 | ||||||
Federal Funds Sold | 27,467 | 2,779 | ||||||
Securities Available for Sale | 58,452 | 54,689 | ||||||
Loans | 356,948 | 310,615 | ||||||
Less, Allowance for Loan Losses | (3,735 | ) | (3,410 | ) | ||||
Total Loans, Net | 353,213 | 307,205 | ||||||
Properties and Equipment | 11,391 | 11,266 | ||||||
Other Assets | 16,626 | 13,144 | ||||||
Total Assets | $ | 472,843 | $ | 393,742 | ||||
Liabilities | ||||||||
Non-interest Bearing Demand Deposits | $ | 29,603 | $ | 33,322 | ||||
Interest Bearing Demand Deposits | 64,377 | 61,105 | ||||||
Savings Deposits | 11,428 | 12,071 | ||||||
Time Deposits | 301,808 | 225,924 | ||||||
Total Deposits | 407,216 | 332,422 | ||||||
Borrowings | 23,000 | 24,000 | ||||||
Retail Repurchase Agreements | 994 | — | ||||||
Other Liabilities | 3,191 | 2,069 | ||||||
Total Liabilities | 434,401 | 358,491 | ||||||
Shareholders’ Equity | ||||||||
Common Stock, Par Value $5 Per Share: | ||||||||
Authorized 15,000,000 Shares; Issued 3,831,692 | ||||||||
Shares in 2007 and 3,825,192 Shares in 2006 | 19,158 | 19,126 | ||||||
Additional Paid-In Capital | 11,471 | 11,421 | ||||||
Retained Earnings | 7,881 | 5,196 | ||||||
Accumulated Other Comprehensive Loss | (68 | ) | (492 | ) | ||||
Total Shareholders’ Equity | 38,442 | 35,251 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 472,843 | $ | 393,742 | ||||
Bank of the Carolinas Corporation
Consolidated Statements of Income
(In Thousands, Except Share and Per Share Data)
(Unaudited)
Three Months Ended March 31 | ||||||
2007 | 2006 | |||||
Interest Income | ||||||
Interest and Fees on Loans | $ | 7,309 | $ | 5,805 | ||
Interest on Securities | 614 | 477 | ||||
Federal Funds Sold | 177 | 138 | ||||
Deposits in Other Banks | 4 | 1 | ||||
Total Interest Income | 8,104 | 6,421 | ||||
Interest Expense | ||||||
Deposits | 4,250 | 2,676 | ||||
Borrowed Funds | 285 | 271 | ||||
Total Interest Expense | 4,535 | 2,947 | ||||
Net Interest Income | 3,569 | 3,474 | ||||
Provision for Loan Losses | 62 | 117 | ||||
Net Interest Income After Provision for | ||||||
Loan Losses | 3,507 | 3,357 | ||||
Other Income | ||||||
Customer Service Fees | 236 | 221 | ||||
Mortgage Loan Broker Fees | 31 | 59 | ||||
Investment Services | 43 | — | ||||
Increase in CSV of Life Insurance | 82 | 49 | ||||
Other Income | 37 | 28 | ||||
Total Other Income | 429 | 357 | ||||
Noninterest Expense | ||||||
Salaries and Benefits | 1,517 | 1,355 | ||||
Occupancy and Equipment | 418 | 337 | ||||
Other Noninterest Expense | 852 | 774 | ||||
Total Noninterest Expense | 2,787 | 2,466 | ||||
Income Before Income Taxes | 1,149 | 1,248 | ||||
Income Taxes | 369 | 444 | ||||
Net Income | $ | 780 | $ | 804 | ||
Earnings Per Share | ||||||
Basic | $ | 0.20 | $ | 0.21 | ||
Diluted | $ | 0.20 | $ | 0.20 | ||
Weighted Average Shares Outstanding | ||||||
Basic | 3,826,706 | 3,825,192 | ||||
Diluted | 3,949,095 | 3,964,428 |
Bank of the Carolinas Corporation
Performance Ratios
Three Months Ended March 31 | |||||||||
2007 | 2006 | Change* | |||||||
Financial Ratios | |||||||||
Return On Average Assets | 0.69 | % | 0.84 | % | (15 | ) BP | |||
Return On Average Shareholders’ Equity | 8.27 | % | 9.26 | % | (99 | ) | |||
Net Interest Margin | 3.31 | % | 3.86 | % | (55 | ) | |||
Asset Quality Ratios | |||||||||
Net-chargeoffs to Average Loans | 0.07 | % | 0.03 | % | 4 | BP | |||
Nonperforming Loans To Total Loans | 0.70 | % | 0.42 | % | 28 | ||||
Nonperforming Assets To Total Assets | 0.72 | % | 0.60 | % | 12 | ||||
Allowance For Loan Losses To Total Loans | 1.05 | % | 1.10 | % | (5 | ) |
* | BP denotes basis points. |