Filer: | Bank of the Carolinas Corporation | |||||
Subject Company: | Randolph Bank& Trust Company | |||||
File Number: | 333-144237 |
PRESS RELEASE
For Immediate Release
Bank of the Carolinas Corporation Reports Third Quarter Earnings
MOCKSVILLE, NORTH CAROLINA, October 31, 2007 — Bank of the Carolinas Corporation (Nasdaq Capital Market: BCAR), today reported financial results for the three and nine months ended September 30, 2007.
For the three month period ended September 30, 2007, net income was $605,000, as compared to $1,148,000 in the third quarter of 2006. Diluted earnings per share were $.15 as compared to $.29 for the third quarter of 2006. For the nine months ended September 30, 2007, the Bank reported net income of $1,977,000, compared to $2,793,000 for the nine month period in 2006. Diluted earnings per share were $.50 for the nine month period, compared to $.70 per diluted share for the same period in 2006.
The decrease in net income in 2007 is due to the fact that net income in the third quarter of 2006 included a pre-tax gain of $1,755,000 on the sale of a branch location. Excluding this one time gain, net income for both the three and nine month periods in 2007 would have shown an increase compared to 2006.
During the third quarter of the 2007 the Bank opened its tenth full service office, located in Concord, NC. This is the second full service office the Bank has opened in 2007. The Bank’s new Winston-Salem office opened in February.
Total assets at September 30, 2007 amounted to $480.2 million, an increase of 11.3% when compared to the September 30, 2006 amount of $431.4 million. Net loans increased 11.3% over the prior year to $372.8 million, while deposits grew to $410.4 million, a 12.7% increase. The allowance for loan losses was 1.00% of total loans as of September 30, 2007, and the ratio of annualized net charge-offs to average loans for the nine-month period was 0.36%.
For the nine month period ended in 2007, the net interest margin declined to 3.40% from 3.87% in 2006. While this was a significant year over year decline, the net interest margin has remained stable over the last three linked quarters and did increase slightly in the third quarter versus the second quarter of 2007.
Excluding the one-time gain in 2006 mentioned above, the Company experienced growth in non-interest income of 23.1% and 23.8%, respectively, for the three and nine month periods in 2007 versus 2006. Non-interest expense decreased over the previous year for both the three and nine month periods. As a percentage of average assets, non-interest expense decreased to 2.48% for the nine month period in 2007 from 2.84% for the comparable nine month period in 2006.
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 has received regulatory approval but is subject to shareholder 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, Concord, 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
Additional Information and Where To Find It
The proposed merger of Randolph Bank & Trust Company (“Randolph”) into Bank of the Carolinas will be submitted to the shareholders of Bank of the Carolinas Corporation (“BOC”) and Randolph for their consideration and approval. BOC has filed a registration statement, a prospectus (which is combined with Randolph’s and BOC’s joint proxy statements) and other related documents with the SEC concerning the proposed merger. The joint proxy statement/prospectus and other relevant materials, any amendments or supplements to those documents, and any other filings containing information about Randolph or BOC, contain important information. Randolph’s and BOC’s shareholders are urged to read those documents before making any voting or investment decision with respect to the proposed merger. You may obtain a free copy of the joint proxy statement/prospectus and any other documents filed by BOC with the SEC at the SEC’s Internet site (http://www.sec.gov). Copies of the proxy statement and other reports filed by Randolph with the FDIC are available for inspection at the offices of the FDIC’s Accounting and Securities Disclosure Section located at Room F-6043, 550 17th Street, N.W., Washington, DC 20429. You also may obtain copies of Randolph’s reports by calling the FDIC’s Accounting and Securities Disclosure Section at (202) 898-8913, by facsimile at (202) 898-8505, or by email at mfields@fdic.gov. In addition, you may obtain copies of the joint proxy statement/prospectus and any other documents filed with the SEC by BOC, without charge, by directing a request to the President, Bank of the Carolinas Corporation, 135 Boxwood Village, Mocksville, N.C. 27028-2941 or P.O. Box 129, Mocksville, N.C. 27028-0129, telephone (336) 751-5755. You may obtain copies of any documents filed with the FDIC by Randolph, without charge, by directing a request to the President, Randolph Bank & Trust Company, 175 N. Fayetteville Street, Asheboro, N.C. 27203-5513, or P.O. Box 1888, Asheboro, N.C. 27204-1888, telephone (336) 625-1000.
This press release does not constitute an offer of any securities for sale. Any offer is made only by the joint proxy statement/prospectus.
Participants in the Solicitation
BOC and Randolph, and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies from the shareholders of BOC and Randolph in favor of the proposed merger. Information about BOC’s directors and executive officers and their ownership of BOC’s capital stock is contained in the proxy statement distributed by BOC in connection with the merger, which has been filed with the SEC. Information about Randolph’s directors and executive officers and their ownership of Randolph’s capital stock is contained in the proxy statement distributed by Randolph in connection with its 2007 annual meeting of shareholders and the merger, which has been filed with the FDIC. Additional information regarding the interests of those participants in the proposed merger may be obtained by reading the joint proxy statement/prospectus regarding the merger. You may obtain free copies of those documents as described above.
Bank of the Carolinas Corporation
Consolidated Balance Sheets
(In Thousands Except Share Data)
(Unaudited)
September 30, | ||||||||
2007 | 2006 | |||||||
Assets | ||||||||
Cash and Due from Banks | $ | 6,728 | $ | 4,820 | ||||
Interest-Bearing Deposits in Banks | 165 | 4,679 | ||||||
Federal Funds Sold | 4,220 | 5,554 | ||||||
Securities Available for Sale | 63,997 | 56,277 | ||||||
Loans | 376,560 | 338,651 | ||||||
Less, Allowance for Loan Losses | (3,778 | ) | (3,802 | ) | ||||
Total Loans, Net | 372,782 | 334,849 | ||||||
Properties and Equipment | 13,284 | 11,062 | ||||||
Other Assets | 19,042 | 14,181 | ||||||
Total Assets | $ | 480,218 | $ | 431,422 | ||||
�� | ||||||||
Liabilities | ||||||||
Non-interest Bearing Demand Deposits | $ | 31,337 | $ | 25,969 | ||||
Interest Bearing Demand Deposits | 67,214 | 62,432 | ||||||
Savings Deposits | 14,344 | 9,864 | ||||||
Time Deposits | 297,544 | 265,859 | ||||||
Total Deposits | 410,439 | 364,124 | ||||||
Borrowings | 27,000 | 27,500 | ||||||
Other Liabilities | 3,133 | 2,873 | ||||||
Total Liabilities | 440,572 | 394,497 | ||||||
Shareholders’ Equity | ||||||||
Common Stock, Par Value $5 Per Share: | ||||||||
Authorized 15,000,000 Shares; Issued 3,869,062 | ||||||||
Shares in 2007 and 3,825,192 Shares in 2006 | 19,345 | 19,126 | ||||||
Additional Paid-In Capital | 11,562 | 11,431 | ||||||
Retained Earnings | 8,692 | 6,803 | ||||||
Accumulated Other Comprehensive Income (Loss) | 47 | (435 | ) | |||||
Total Shareholders’ Equity | 39,646 | 36,925 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 480,218 | $ | 431,422 | ||||
Bank of the Carolinas Corporation
Consolidated Statements of Income
(In Thousands Except Share and Per Share Data)
(Unaudited)
Three Months Ended Sept. 30, | Nine Months Ended Sept. 30, | |||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||
Interest Income | ||||||||||||
Interest and Fees on Loans | $ | 7,659 | $ | 7,044 | $ | 22,253 | $ | 19,407 | ||||
Interest on Securities | 757 | 577 | 2,070 | 1,598 | ||||||||
Federal Funds Sold | 22 | 124 | 383 | 293 | ||||||||
Deposits in Other Banks | 4 | 8 | 9 | 14 | ||||||||
Total Interest Income | 8,442 | 7,753 | 24,715 | 21,312 | ||||||||
Interest Expense | ||||||||||||
Deposits | 4,296 | 3,607 | 12,857 | 9,276 | ||||||||
Borrowed Funds | 333 | 333 | 921 | 978 | ||||||||
Total Interest Expense | 4,629 | 3,940 | 13,778 | 10,254 | ||||||||
Net Interest Income | 3,813 | 3,813 | 10,937 | 11,058 | ||||||||
Provision for Loan Losses | 546 | 678 | 1,020 | 975 | ||||||||
Net Interest Income After Provision for Loan Losses | 3,267 | 3,135 | 9,917 | 10,083 | ||||||||
Other Income | ||||||||||||
Customer Service Fees | 259 | 247 | 761 | 713 | ||||||||
Mortgage Loan Broker Fees | 78 | 54 | 140 | 135 | ||||||||
Investment Services | 99 | 66 | 198 | 66 | ||||||||
Income from Bank Owned Life Insurance | 89 | 51 | 257 | 151 | ||||||||
Gain on Sale of Branch | — | 1,755 | — | 1,755 | ||||||||
Other Income | 29 | 32 | 99 | 110 | ||||||||
Total Other Income | 554 | 2,205 | 1,455 | 2,930 | ||||||||
Noninterest Expense | ||||||||||||
Salaries and Benefits | 1,543 | 1,773 | 4,478 | 4,590 | ||||||||
Occupancy and Equipment | 447 | 357 | 1,286 | 1,029 | ||||||||
Other Noninterest Expense | 979 | 1,414 | 2,771 | 3,042 | ||||||||
Total Noninterest Expense | 2,969 | 3,544 | 8,535 | 8,661 | ||||||||
Income Before Income Taxes | 852 | 1,796 | 2,837 | 4,352 | ||||||||
Income Taxes | 247 | 648 | 860 | 1,559 | ||||||||
Net Income | $ | 605 | $ | 1,148 | $ | 1,977 | $ | 2,793 | ||||
Earnings Per Share | ||||||||||||
Basic | $ | 0.16 | $ | 0.30 | $ | 0.52 | $ | 0.73 | ||||
Diluted | $ | 0.15 | $ | 0.29 | $ | 0.50 | $ | 0.70 | ||||
Weighted Average Shares Outstanding | ||||||||||||
Basic | 3,856,660 | 3,825,192 | 3,841,070 | 3,825,192 | ||||||||
Diluted | 3,940,105 | 3,963,896 | 3,945,242 | 3,964,123 |
Bank of the Carolinas Corporation
Performance Ratios
As of or for the Nine Months Ended Sept. 30, | |||||||||||
2007 | 2006 | Change* | |||||||||
Financial Ratios | |||||||||||
Return On Average Assets ** | 0.57 | % | 0.92 | % | (35 | ) | BP | ||||
Return On Average Shareholders’ Equity ** | 6.84 | % | 10.41 | % | (357 | ) | |||||
Net Interest Margin ** | 3.40 | % | 3.87 | % | (47 | ) | |||||
Asset Quality Ratios | |||||||||||
Net-chargeoffs to Average Loans ** | 0.36 | % | 0.20 | % | 16 | BP | |||||
Nonperforming Loans To Total Loans | 0.55 | % | 0.78 | % | (23 | ) | |||||
Nonperforming Assets To Total Assets | 0.83 | % | 0.87 | % | (4 | ) | |||||
Allowance For Loan Losses To Total Loans | 1.00 | % | 1.12 | % | (12 | ) |
* | BP denotes basis points. |
** | Ratio annualized. |