HIGH POINT, N.C., April 17, 2017 /PRNewswire/ -- BNC Bancorp
(NASDAQ: BNCN) ("Company"), parent company for Bank of North Carolina ("Bank"), today reported
financial results for the three months ended March 31, 2017. Highlights for the first
quarter of 2017 include the following:
- Net income of $14.4 million,
or $0.28 per diluted share, compared
to $15.7 million, or $0.31 per diluted share, for fourth quarter of
2016
-
- Return on average assets of 0.79%, compared to 0.87% for fourth
quarter of 2016
- Return on average tangible common equity of 9.66%, compared to
10.59% for fourth quarter of 2016
- Operating net income of $22.8
million, or $0.44 per diluted
share, compared to $21.8 million, or
$0.43 per diluted share, for fourth
quarter of 2016
-
- Operating return on average assets of 1.25%, compared to 1.21%
for fourth quarter of 2016
- Operating return on average tangible common equity of 14.92%,
compared to 14.50% for fourth quarter of 2016
- Originated loans at March 31,
2017 of $3.92 billion, an
increase of $275.4 million compared
to December 31, 2016
-
- Total portfolio loans of $5.62
billion at March 31, 2017, an
increase of $165.2 million compared
to December 31, 2016
- Loan originations of $627
million, as compared to $535
million during the fourth quarter of 2016
- Entered into Agreement and Plan of Merger with Pinnacle
Financial Partners, Inc. ("Pinnacle")
-
- Merger has received all necessary regulatory approvals
- Shareholders will receive 0.5235 shares of Pinnacle's common
stock for every share of the Company's common stock
- Transaction expected to close end of second quarter or
beginning of third quarter 2017, subject to shareholders' approval
and other customary closing conditions
Financial Performance
|
|
Three Months
Ended
|
|
INCOME
SUMMARY
|
|
Mar. 31,
2017
|
|
Dec. 31,
2016
|
|
Sept. 30,
2016
|
|
Jun. 30,
2016
|
|
Mar. 31,
2016
|
|
Interest
income
|
|
(Dollars and shares
in thousands)
|
|
Interest and fees on
loans
|
|
$
62,901
|
|
$
61,992
|
|
$
57,824
|
|
$
51,978
|
|
$
50,302
|
|
|
Investment
securities
|
|
6,949
|
|
6,974
|
|
6,910
|
|
6,202
|
|
5,965
|
|
|
Other
|
|
321
|
|
305
|
|
291
|
|
228
|
|
214
|
|
Total interest
income
|
|
70,171
|
|
69,271
|
|
65,025
|
|
58,408
|
|
56,481
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
8,268
|
|
7,935
|
|
7,619
|
|
6,704
|
|
6,241
|
|
|
Interest on
borrowings
|
|
1,935
|
|
2,009
|
|
1,989
|
|
1,774
|
|
1,750
|
|
Total interest
expense
|
|
10,203
|
|
9,944
|
|
9,608
|
|
8,478
|
|
7,991
|
|
Net interest
income
|
|
59,968
|
|
59,327
|
|
55,417
|
|
49,930
|
|
48,490
|
|
|
Provision for loan
losses
|
|
1,222
|
|
1,455
|
|
1,865
|
|
698
|
|
647
|
|
Net interest
income
|
|
58,746
|
|
57,872
|
|
53,552
|
|
49,232
|
|
47,843
|
|
Non-interest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage lending
income
|
|
2,221
|
|
2,830
|
|
3,134
|
|
2,671
|
|
2,681
|
|
|
Service
charges
|
|
2,874
|
|
2,937
|
|
2,644
|
|
2,422
|
|
2,321
|
|
|
Trust/wealth
income
|
|
1,641
|
|
1,086
|
|
307
|
|
366
|
|
436
|
|
|
Insurance
income
|
|
1,074
|
|
562
|
|
-
|
|
-
|
|
-
|
|
|
SBA income
|
|
495
|
|
579
|
|
739
|
|
1,104
|
|
811
|
|
|
Securities gains
(losses)
|
|
-
|
|
6
|
|
34
|
|
4
|
|
(39)
|
|
|
Earnings on
bank-owned life insurance
|
|
1,453
|
|
1,360
|
|
1,254
|
|
1,160
|
|
758
|
|
|
Other
|
|
4,708
|
|
2,336
|
|
1,699
|
|
1,288
|
|
994
|
|
Total non-interest
income
|
|
14,466
|
|
11,696
|
|
9,811
|
|
9,015
|
|
7,962
|
|
Non-interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
21,277
|
|
20,922
|
|
18,491
|
|
18,019
|
|
17,803
|
|
|
Occupancy
|
|
3,327
|
|
3,622
|
|
3,154
|
|
3,155
|
|
3,252
|
|
|
Furniture and
equipment
|
|
2,457
|
|
2,303
|
|
2,297
|
|
1,993
|
|
2,073
|
|
|
Data processing and
supply
|
|
2,067
|
|
1,805
|
|
1,766
|
|
1,491
|
|
1,437
|
|
|
Advertising and
business development
|
|
879
|
|
869
|
|
678
|
|
923
|
|
684
|
|
|
Insurance,
professional and other services
|
|
1,540
|
|
1,309
|
|
1,424
|
|
1,494
|
|
1,526
|
|
|
FDIC insurance
assessments
|
|
766
|
|
1,240
|
|
1,071
|
|
900
|
|
900
|
|
|
Loan, foreclosure and
OREO
|
|
1,939
|
|
1,233
|
|
1,562
|
|
856
|
|
1,367
|
|
|
Transaction-related
expenses
|
|
13,294
|
|
9,121
|
|
2,568
|
|
3,808
|
|
1,434
|
|
|
Loss on
extinguishment of debt
|
|
-
|
|
598
|
|
-
|
|
-
|
|
-
|
|
|
Other
|
|
5,252
|
|
4,543
|
|
4,824
|
|
4,201
|
|
4,410
|
|
Total non-interest
expenses
|
|
52,798
|
|
47,565
|
|
37,835
|
|
36,840
|
|
34,886
|
|
Income before
income tax expense
|
|
20,414
|
|
22,003
|
|
25,528
|
|
21,407
|
|
20,919
|
|
Income tax
expense
|
|
5,983
|
|
6,312
|
|
7,388
|
|
6,760
|
|
6,484
|
|
Net income
(GAAP)
|
|
14,431
|
|
15,691
|
|
18,140
|
|
14,647
|
|
14,435
|
|
|
Securities gains
(losses), net of tax
|
|
-
|
|
4
|
|
21
|
|
4
|
|
(25)
|
|
|
Transaction-related
charges, net of tax
|
|
8,375
|
|
5,746
|
|
1,618
|
|
2,399
|
|
903
|
|
|
Loss on
extinguishment of debt, net of tax
|
|
-
|
|
377
|
|
-
|
|
-
|
|
-
|
|
Operating net
income (non-GAAP)
|
|
$
22,806
|
|
$
21,810
|
|
$
19,736
|
|
$
17,042
|
|
$
15,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding
|
|
52,222
|
|
52,177
|
|
48,110
|
|
45,201
|
|
40,806
|
|
Weighted average
diluted shares outstanding
|
|
52,357
|
|
50,852
|
|
47,360
|
|
41,560
|
|
40,885
|
|
Performance Ratios
|
|
Three Months
Ended
|
|
|
Mar. 31,
2017
|
|
Dec. 31,
2016
|
|
Sept. 30,
2016
|
|
Jun. 30,
2016
|
|
Mar. 31,
2016
|
Earnings per diluted
share
|
|
$
0.28
|
|
$
0.31
|
|
$
0.38
|
|
$
0.35
|
|
$
0.35
|
Return on average
assets
|
|
0.79%
|
|
0.87%
|
|
1.10%
|
|
1.00%
|
|
1.03%
|
Return on average
common equity
|
|
6.46%
|
|
7.22%
|
|
9.40%
|
|
9.43%
|
|
9.72%
|
Return on average
tangible common equity (1)
|
|
9.66%
|
|
10.59%
|
|
13.37%
|
|
13.29%
|
|
13.71%
|
Efficiency ratio
(2)
|
|
68.86%
|
|
65.02%
|
|
56.09%
|
|
60.51%
|
|
59.78%
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
per diluted share (1)
|
|
$
0.44
|
|
$
0.43
|
|
$
0.42
|
|
$
0.41
|
|
$
0.38
|
Operating return on
average assets (1)
|
|
1.25%
|
|
1.21%
|
|
1.20%
|
|
1.16%
|
|
1.10%
|
Operating return on
average tangible common equity (1)
|
|
14.92%
|
|
14.50%
|
|
14.50%
|
|
15.36%
|
|
14.55%
|
Operating efficiency
ratio (1) (2)
|
|
51.53%
|
|
51.74%
|
|
52.31%
|
|
54.26%
|
|
57.28%
|
|
|
|
|
|
|
|
|
|
|
|
Book value per common
share
|
|
$
17.55
|
|
$
17.29
|
|
$
16.53
|
|
$
15.86
|
|
$
14.79
|
Tangible book value
per common share (1)
|
|
12.59
|
|
12.29
|
|
12.21
|
|
11.28
|
|
11.07
|
|
|
(1)
|
See Reconciliation of
Non-GAAP Financial Measures for additional details.
|
(2)
|
Calculated on a
fully-taxable equivalent ("FTE") basis.
|
Other Selected Financial Data
|
|
Three Months
Ended
|
|
|
Mar. 31,
2017
|
|
Dec. 31,
2016
|
|
Sept. 30,
2016
|
|
Jun. 30,
2016
|
|
Mar. 31,
2016
|
|
|
(Dollars in
thousands)
|
Securities
gains (losses), net
|
|
$
|
-
|
|
$
|
6
|
|
$
|
34
|
|
$
|
4
|
|
$
|
(39)
|
Loss on
extinguishment of debt
|
|
|
-
|
|
|
598
|
|
|
-
|
|
|
-
|
|
|
-
|
Fair value
accretion
|
|
|
6,269
|
|
|
5,841
|
|
|
5,845
|
|
|
5,276
|
|
|
5,505
|
OREO valuation
adjustments, net
|
|
|
40
|
|
|
503
|
|
|
274
|
|
|
222
|
|
|
266
|
Transaction-related expenses
|
|
|
13,294
|
|
|
9,121
|
|
|
2,568
|
|
|
3,808
|
|
|
1,434
|
Richard D. Callicutt, II,
President and CEO, stated, "We are extremely pleased to report
record operating results for the first quarter of 2017.
During the quarter, after adjusting for all the transaction-related
expenses, operating earnings increased a healthy 48.4% from year
ago levels, while operating earnings per share increased 15.8% to
$0.44. Operating return on
average assets was a healthy 1.25%, up slightly from the prior
quarter, while operating return on average tangible common equity
increased slightly to 14.92%.
As you are aware, during the quarter we announced a strategic
partnership with Pinnacle Financial Partners headquartered in
Nashville, Tennessee. We
believe this partnership will create one of the highest performing
regional banks in the U.S., and reward both sets of shareholders as
we implement the best of each company across one of the most
geographically appealing footprints in our industry. To date
we have received all necessary regulatory approvals providing
further evidence of the good-standing and financial health of both
companies. Since the announcement, the level of mutual
respect and collaboration between the functional leaders of our two
companies has been exceptional, and provides additional confidence
that the integration efforts will result in a smooth transition for
our customers and communities.
On a personal note, myself and nine others from our organization
recently spent three days in Nashville going through a new associate
orientation led by Terry Turner, the
Pinnacle CEO, and supported by his executive team. After this
experience, I am more confident than ever that our decision to join
with Pinnacle was clearly the correct decision for our
organization. It also made it obviously apparent why Pinnacle
consistently is voted as one of the Best Places to Work in the US,
as well as one of the most trustworthy and easiest places to do
business."
Non-interest Income and Expense Data
|
|
Three Months
Ended
|
|
|
|
|
Mar. 31,
2017
|
|
Dec. 31,
2016
|
|
Sept. 30,
2016
|
|
Jun. 30,
2016
|
|
Mar. 31,
2016
|
|
|
Non-interest
income
|
|
(Dollars in
thousands)
|
|
|
|
Mortgage lending
income
|
|
$
2,221
|
|
$
2,830
|
|
$
3,134
|
|
$
2,671
|
|
$
2,681
|
|
|
|
Service
charges
|
|
2,874
|
|
2,937
|
|
2,644
|
|
2,422
|
|
2,321
|
|
|
|
Trust/wealth
income
|
|
1,641
|
|
1,086
|
|
307
|
|
366
|
|
436
|
|
|
|
Insurance
income
|
|
1,074
|
|
562
|
|
-
|
|
-
|
|
-
|
|
|
|
SBA income
|
|
495
|
|
579
|
|
739
|
|
1,104
|
|
811
|
|
|
|
Earnings on
bank-owned life insurance
|
|
1,453
|
|
1,360
|
|
1,254
|
|
1,160
|
|
758
|
|
|
|
Other
|
|
4,708
|
|
2,336
|
|
1,699
|
|
1,288
|
|
994
|
|
|
Total operating
non-interest income - non-GAAP
|
|
14,466
|
|
11,690
|
|
9,777
|
|
9,011
|
|
8,001
|
|
|
|
Securities gains
(losses), net
|
|
-
|
|
6
|
|
34
|
|
4
|
|
(39)
|
|
|
Total non-interest
income - GAAP
|
|
$14,466
|
|
$11,696
|
|
$
9,811
|
|
$
9,015
|
|
$
7,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
$21,277
|
|
$20,922
|
|
$18,491
|
|
$18,019
|
|
$17,803
|
|
|
|
Occupancy
|
|
3,327
|
|
3,622
|
|
3,154
|
|
3,155
|
|
3,252
|
|
|
|
Furniture and
equipment
|
|
2,457
|
|
2,303
|
|
2,297
|
|
1,993
|
|
2,073
|
|
|
|
Data processing and
supply
|
|
2,067
|
|
1,805
|
|
1,766
|
|
1,491
|
|
1,437
|
|
|
|
Advertising and
business development
|
|
879
|
|
869
|
|
678
|
|
923
|
|
684
|
|
|
|
Insurance,
professional and other services
|
|
1,540
|
|
1,309
|
|
1,424
|
|
1,494
|
|
1,526
|
|
|
|
FDIC insurance
assessments
|
|
766
|
|
1,240
|
|
1,071
|
|
900
|
|
900
|
|
|
|
Loan, foreclosure and
OREO
|
|
1,939
|
|
1,233
|
|
1,562
|
|
856
|
|
1,367
|
|
|
|
Other
|
|
5,252
|
|
4,543
|
|
4,824
|
|
4,201
|
|
4,410
|
|
|
Total operating
non-interest expense - non-GAAP
|
|
39,504
|
|
37,846
|
|
35,267
|
|
33,032
|
|
33,452
|
|
|
|
Transaction-related
expenses
|
|
13,294
|
|
9,121
|
|
2,568
|
|
3,808
|
|
1,434
|
|
|
|
Loss on
extinguishment of debt
|
|
-
|
|
598
|
|
-
|
|
-
|
|
-
|
|
|
Total non-interest
expense - GAAP
|
|
$52,798
|
|
$47,565
|
|
$37,835
|
|
$36,840
|
|
$34,886
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP and operating non-interest income was $14.5 million for the first quarter of 2017, an
increase from $11.7 million for the
fourth quarter of 2016. The increase in non-interest income
was primarily due increased income from trust/wealth services and
insurance services, which were slightly offset by a seasonal
decrease in mortgage lending income. The Company also
recorded an increase in recoveries on previously charged-off
acquired loans. Certain sources of our non-interest income
are volatile and can vary significantly from period to
period.
Total GAAP non-interest expense was $52.8
million for the first quarter of 2017, an increase from
$47.6 million for the fourth quarter
of 2016. The results for the first quarter of 2017 include
$13.3 million of transaction-related
expenses, compared to $9.1 million
recorded during the fourth quarter of 2016. Excluding
non-core charges, operating non-interest expense for the first
quarter of 2017 was $39.5 million, an
increase compared to $37.8 million
for the fourth quarter of 2016. This increase was due to the
full quarter impact of the additional headcount and facilities
obtained from the High Point Bank Corporation ("High Point") acquisition during the fourth
quarter of 2016, as well as $0.5
million of losses on the sale of other real estate owned
("OREO"), compared to $0.4 million of
gain on sale of OREO during the fourth quarter of 2016.
Selected Balance Sheet Data
|
|
Ending
Balance
|
|
|
Mar. 31,
2017
|
|
Dec. 31,
2016
|
|
Sept. 30,
2016
|
|
Jun. 30,
2016
|
|
Mar. 31,
2016
|
Portfolio
loans:
|
|
(Dollars in
thousands)
|
Originated loans
|
|
$
3,921,065
|
|
$
3,645,687
|
|
$
3,455,677
|
|
$
3,163,357
|
|
$
2,847,466
|
Acquired loans
|
|
1,699,802
|
|
1,810,023
|
|
1,540,270
|
|
1,649,328
|
|
1,390,688
|
Allowance for loan and lease losses
|
|
(39,365)
|
|
(37,501)
|
|
(36,366)
|
|
(33,841)
|
|
(32,548)
|
Portfolio
loans, net
|
|
5,581,502
|
|
5,418,209
|
|
4,959,581
|
|
4,778,844
|
|
4,205,606
|
Loans held for
sale
|
|
23,453
|
|
43,731
|
|
40,441
|
|
41,703
|
|
33,455
|
Investment
securities
|
|
893,000
|
|
896,786
|
|
838,289
|
|
803,058
|
|
757,248
|
Total
interest-earning assets
|
|
6,762,077
|
|
6,589,774
|
|
6,128,554
|
|
5,790,893
|
|
5,126,452
|
Goodwill
|
|
234,769
|
|
234,769
|
|
189,968
|
|
188,220
|
|
134,686
|
Other
intangible assets, net
|
|
24,372
|
|
25,911
|
|
17,852
|
|
19,014
|
|
17,143
|
Total
assets
|
|
7,575,342
|
|
7,401,691
|
|
6,801,562
|
|
6,478,373
|
|
5,699,573
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing deposits
|
|
1,191,024
|
|
1,113,878
|
|
917,521
|
|
889,254
|
|
794,548
|
Interest-bearing demand and savings
|
|
3,527,613
|
|
3,405,036
|
|
3,080,479
|
|
2,652,735
|
|
2,431,584
|
Time deposits
|
|
1,597,254
|
|
1,564,063
|
|
1,652,123
|
|
1,814,654
|
|
1,537,644
|
Total
deposits
|
|
6,315,891
|
|
6,082,977
|
|
5,650,123
|
|
5,356,643
|
|
4,763,776
|
Borrowings
|
|
287,516
|
|
369,952
|
|
310,609
|
|
352,119
|
|
282,929
|
Total
interest-bearing liabilities
|
|
5,412,383
|
|
5,339,051
|
|
5,043,211
|
|
4,819,508
|
|
4,252,157
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
Common equity
|
|
913,180
|
|
900,044
|
|
786,625
|
|
710,300
|
|
598,158
|
Accumulated other comprehensive income
|
|
3,458
|
|
1,838
|
|
8,587
|
|
6,761
|
|
5,395
|
Total
shareholders' equity
|
|
916,638
|
|
901,882
|
|
795,212
|
|
717,061
|
|
603,553
|
Total assets at March 31, 2017
were $7.58 billion, an increase of
2.4% as compared to total assets of $7.40
billion at December 31, 2016.
Total portfolio loans were $5.62
billion at March 31, 2017, an
increase of 3.0% from $5.46 billion
at December 31, 2016. Loans
that were originated by the Company increased by $275.4 million, or 7.6%, during the first quarter
of 2017.
Total deposits were $6.32 billion
at March 31, 2017, an increase of
$232.9 million, or 3.8%, as compared
to December 31, 2016. While the
majority of the increase was in core deposits, the Company
increased wholesale funding and used the proceeds to repay
short-term debt during the first quarter of 2017. Wholesale
deposits comprised 21.3% of total deposits at March 31, 2017, which is consistent with the
funding mix as of December 31,
2016. Total borrowings were $287.5
million at March 31, 2017, a
decrease of 22.3% compared to $370.0
million at December 31,
2016. Total shareholders' equity was $916.6 million at March
31, 2017, an increase compared to $901.9 million at December
31, 2016. At March 31,
2017, both the Bank's and Company's capital ratios exceeded
the minimum thresholds established for a well-capitalized bank by
regulatory measures.
Loan Portfolio Composition
|
|
Ending
Balance
|
|
|
Mar. 31,
2017
|
|
Dec. 31,
2016
|
|
Sept. 30,
2016
|
|
Jun. 30,
2016
|
|
Mar. 31,
2016
|
|
|
(Dollars in
millions)
|
Residential
construction
|
|
$
125
|
|
$
115
|
|
$
104
|
|
$
98
|
|
$
76
|
Presold
|
|
67
|
|
58
|
|
62
|
|
59
|
|
39
|
Speculative
|
|
58
|
|
57
|
|
42
|
|
39
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
construction
|
|
467
|
|
401
|
|
285
|
|
294
|
|
278
|
Residential and
commercial A&D
|
|
51
|
|
42
|
|
39
|
|
33
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
117
|
|
120
|
|
118
|
|
126
|
|
118
|
Residential buildable
lots
|
|
51
|
|
51
|
|
44
|
|
44
|
|
39
|
Commercial buildable
lots
|
|
22
|
|
23
|
|
24
|
|
24
|
|
21
|
Land held for
development
|
|
23
|
|
26
|
|
23
|
|
31
|
|
34
|
Raw and agricultural
land
|
|
21
|
|
20
|
|
27
|
|
27
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
2,964
|
|
2,917
|
|
2,705
|
|
2,500
|
|
2,257
|
Multi-family
|
|
223
|
|
213
|
|
240
|
|
203
|
|
179
|
Farmland
|
|
4
|
|
3
|
|
3
|
|
4
|
|
4
|
Owner occupied
|
|
874
|
|
884
|
|
787
|
|
817
|
|
705
|
Non-owner
occupied
|
|
1,863
|
|
1,817
|
|
1,675
|
|
1,476
|
|
1,369
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
|
512
|
|
482
|
|
443
|
|
454
|
|
400
|
Residential
mortgage
|
|
1,330
|
|
1,326
|
|
1,251
|
|
1,258
|
|
1,039
|
Consumer
|
|
24
|
|
24
|
|
22
|
|
21
|
|
18
|
Leases
|
|
31
|
|
29
|
|
29
|
|
29
|
|
29
|
Total portfolio
loans
|
|
$
5,621
|
|
$
5,456
|
|
$
4,996
|
|
$
4,813
|
|
$
4,238
|
|
|
|
|
|
|
|
|
|
|
|
Acquired Loan Summary
|
|
Ending
Balance
|
|
|
Mar. 31,
2017
|
|
Dec. 31,
2016
|
|
Sept. 30,
2016
|
|
Jun. 30,
2016
|
|
Mar. 31,
2016
|
|
|
(Dollars in
thousands)
|
Performing acquired
loans
|
|
$
1,602,124
|
|
$
1,710,008
|
|
$
1,432,351
|
|
$
1,537,650
|
|
$
1,278,965
|
Less: remaining FMV
adjustments
|
|
(23,864)
|
|
(27,846)
|
|
(21,687)
|
|
(25,630)
|
|
(23,359)
|
Performing acquired loans, net
|
|
1,578,260
|
|
1,682,162
|
|
1,410,664
|
|
1,512,020
|
|
1,255,606
|
FMV
adjustment %
|
|
1.5%
|
|
1.6%
|
|
1.5%
|
|
1.7%
|
|
1.8%
|
|
|
|
|
|
|
|
|
|
|
|
Purchase credit
impaired loans (PCI)
|
|
134,897
|
|
143,530
|
|
143,494
|
|
152,105
|
|
148,459
|
Less: remaining FMV
adjustments
|
|
(13,355)
|
|
(15,669)
|
|
(13,888)
|
|
(14,797)
|
|
(13,377)
|
PCI
loans, net
|
|
121,542
|
|
127,861
|
|
129,606
|
|
137,308
|
|
135,082
|
FMV
adjustment %
|
|
9.9%
|
|
10.9%
|
|
9.7%
|
|
9.7%
|
|
9.0%
|
|
|
|
|
|
|
|
|
|
|
|
Total acquired
performing loans
|
|
$
1,578,260
|
|
$
1,682,162
|
|
$
1,410,664
|
|
$
1,512,020
|
|
$
1,255,606
|
Total acquired PCI
loans
|
|
121,542
|
|
127,861
|
|
129,606
|
|
137,308
|
|
135,082
|
Total acquired
loans
|
|
$
1,699,802
|
|
$
1,810,023
|
|
$
1,540,270
|
|
$
1,649,328
|
|
$
1,390,688
|
FMV
adjustment % all acquired loans
|
|
2.2%
|
|
2.3%
|
|
2.3%
|
|
2.4%
|
|
2.6%
|
Asset Quality
|
|
Ending
Balance
|
|
|
Mar. 31,
2017
|
|
Dec. 31,
2016
|
|
Sept. 30,
2016
|
|
Jun. 30,
2016
|
|
Mar. 31,
2016
|
|
|
(Dollars in
thousands)
|
Nonaccrual loans -
non-acquired
|
|
$
9,315
|
|
$
6,647
|
|
$
7,662
|
|
$
5,407
|
|
$
6,228
|
Nonaccrual loans -
acquired
|
|
9,464
|
|
7,989
|
|
9,347
|
|
11,756
|
|
12,706
|
OREO -
non-acquired
|
|
12,397
|
|
13,109
|
|
13,352
|
|
15,806
|
|
14,987
|
OREO -
acquired
|
|
12,587
|
|
13,380
|
|
14,696
|
|
14,708
|
|
15,783
|
90 days past due -
non-acquired
|
|
-
|
|
115
|
|
10
|
|
10
|
|
-
|
90 days past due -
acquired
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Total nonperforming
assets
|
|
$
43,763
|
|
$
41,240
|
|
$
45,067
|
|
$
47,687
|
|
$
49,704
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming
assets - non-acquired
|
|
$
21,712
|
|
$
19,871
|
|
$
21,024
|
|
$
21,223
|
|
$
21,215
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
(recoveries), QTD
|
|
$
(642)
|
|
$
320
|
|
$
(660)
|
|
$
(594)
|
|
$
(202)
|
Annualized net
charge-offs (recoveries) to total average
portfolio loans
|
|
-0.05%
|
|
0.02%
|
|
-0.05%
|
|
-0.05%
|
|
-0.02%
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of total
nonperforming assets to total assets
|
|
0.58%
|
|
0.56%
|
|
0.66%
|
|
0.74%
|
|
0.87%
|
Ratio of total
nonperforming loans to total portfolio loans
|
|
0.33%
|
|
0.27%
|
|
0.34%
|
|
0.36%
|
|
0.45%
|
Ratio of total
allowance for loan losses to total portfolio loans
|
0.70%
|
|
0.69%
|
|
0.73%
|
|
0.70%
|
|
0.77%
|
|
|
|
|
|
|
|
|
|
|
|
Excluding
acquired
|
|
|
|
|
|
|
|
|
|
|
Ratio of
nonperforming assets to loans and OREO
|
|
0.55%
|
|
0.54%
|
|
0.61%
|
|
0.67%
|
|
0.74%
|
Ratio of
nonperforming loans to loans
|
|
0.24%
|
|
0.19%
|
|
0.22%
|
|
0.17%
|
|
0.22%
|
Ratio of allowance
for loan losses to loans
|
|
0.93%
|
|
0.95%
|
|
0.97%
|
|
0.98%
|
|
1.03%
|
Total nonperforming assets at March 31,
2017 were $43.8 million, or
0.58% of total assets, as compared to $41.2
million, or 0.56% of total assets, at December 31, 2016. Excluding nonperforming
assets acquired by the Company, nonperforming assets were
$21.7 million, or 0.55% of
non-acquired loans and OREO, at March 31,
2017, as compared to $19.9
million, or 0.54% of non-acquired loans and OREO, at
December 31, 2016. Non-accrual
loans increased from $14.6 million at
December 31, 2016 to $18.8 million at March 31,
2017, which was primarily due to a larger quantity of
smaller dollar loans being reclassified to non-accrual.
The Company experienced $0.6
million of net recoveries during the first quarter of 2017,
compared to net charge-offs of $0.3
million during the fourth quarter of 2016. Gross
charge-offs were $0.4 million during
the first quarter of 2017, a decrease compared to gross charge-offs
of $1.2 million during the fourth
quarter of 2016.
The allowance for loan losses was $39.4
million at March 31, 2017, an
increase from $37.5 million at
December 31, 2016. The Company
recorded a provision for loan losses of $1.2
million during the first quarter of 2017, compared to
$1.5 million recorded during the
fourth quarter of 2016, as the Company continues to experience
strong growth in the originated loan portfolio.
Net Interest Income and Margin
|
|
Three Months
Ended
|
|
|
|
Mar. 31,
2017
|
|
Dec. 31,
2016
|
|
Sept. 30,
2016
|
|
Jun. 30,
2016
|
|
Mar. 31,
2016
|
|
Quarterly average
balances:
|
|
(Dollars in
thousands)
|
|
Loans
|
|
$
5,576,676
|
|
$
5,410,066
|
|
$
4,893,926
|
|
$
4,437,248
|
|
$
4,241,970
|
|
Investment securities
|
|
892,091
|
|
835,235
|
|
828,144
|
|
760,841
|
|
737,361
|
|
Interest-bearing balances and other
|
|
153,225
|
|
181,678
|
|
147,763
|
|
134,923
|
|
139,367
|
|
Total interest-earning assets
|
|
6,621,992
|
|
6,426,979
|
|
5,869,833
|
|
5,333,012
|
|
5,118,698
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
bearing
|
|
1,126,691
|
|
1,056,507
|
|
907,344
|
|
825,148
|
|
778,114
|
|
Interest-bearing
|
|
5,005,002
|
|
4,862,443
|
|
4,475,901
|
|
4,138,466
|
|
3,953,668
|
|
Total deposits
|
|
6,131,693
|
|
5,918,950
|
|
5,383,245
|
|
4,963,614
|
|
4,731,782
|
|
Borrowed funds
|
|
302,798
|
|
315,828
|
|
321,218
|
|
272,374
|
|
262,880
|
|
Total interest-bearing liabilities
|
|
5,307,800
|
|
5,178,271
|
|
4,797,119
|
|
4,410,840
|
|
4,216,548
|
|
Shareholders' equity
|
|
905,594
|
|
864,656
|
|
768,124
|
|
625,021
|
|
597,127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Income/Expense:
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
62,901
|
|
$
61,992
|
|
$
57,824
|
|
$
51,978
|
|
$
50,302
|
|
Investment securities, tax
|
|
3,144
|
|
3,352
|
|
3,113
|
|
2,908
|
|
2,720
|
|
Investment securities, non-tax (1)
|
|
6,040
|
|
5,749
|
|
6,027
|
|
5,229
|
|
5,151
|
|
Interest-bearing balances and other
|
|
321
|
|
305
|
|
291
|
|
228
|
|
214
|
|
Total
interest income (1)
|
|
72,406
|
|
71,398
|
|
67,255
|
|
60,343
|
|
58,387
|
|
Deposits
|
|
8,268
|
|
7,935
|
|
7,619
|
|
6,704
|
|
6,241
|
|
Borrowings
|
|
1,935
|
|
2,009
|
|
1,989
|
|
1,774
|
|
1,750
|
|
Total
interest expense
|
|
10,203
|
|
9,944
|
|
9,608
|
|
8,478
|
|
7,991
|
|
Net
interest income (1)
|
|
$
62,203
|
|
$
61,454
|
|
$
57,647
|
|
$
51,865
|
|
$
50,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Yields and
Costs:
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
4.57%
|
|
4.56%
|
|
4.70%
|
|
4.71%
|
|
4.77%
|
|
Investment securities, tax
|
|
3.01%
|
|
2.96%
|
|
2.93%
|
|
3.01%
|
|
2.94%
|
|
Investment securities, non-tax (1)
|
|
5.16%
|
|
5.11%
|
|
5.91%
|
|
5.65%
|
|
5.68%
|
|
Interest-bearing balances and other
|
|
0.85%
|
|
0.67%
|
|
0.78%
|
|
0.68%
|
|
0.62%
|
|
Total
interest-earning assets (1)
|
|
4.43%
|
|
4.42%
|
|
4.56%
|
|
4.55%
|
|
4.59%
|
|
Total
interest-bearing deposits
|
|
0.67%
|
|
0.65%
|
|
0.68%
|
|
0.65%
|
|
0.63%
|
|
Borrowed
funds
|
|
2.59%
|
|
2.53%
|
|
2.46%
|
|
2.62%
|
|
2.68%
|
|
Total
interest-bearing liabilities
|
|
0.78%
|
|
0.76%
|
|
0.80%
|
|
0.77%
|
|
0.76%
|
|
Cost of
funds
|
|
0.64%
|
|
0.63%
|
|
0.67%
|
|
0.65%
|
|
0.64%
|
|
Net
interest margin (1)
|
|
3.81%
|
|
3.80%
|
|
3.91%
|
|
3.91%
|
|
3.96%
|
|
|
(1) Calculated on a
FTE basis.
|
FTE net interest income for the first quarter of 2017 was
$62.2 million, an increase from
$61.5 million for the fourth quarter
of 2016. FTE net interest margin was 3.81% for the first
quarter of 2017, a slight increase compared to 3.80% for the fourth
quarter of 2016. The average yield on interest-earning assets
increased one basis point to 4.43% for the first quarter of 2017,
while the rate paid on interest-bearing liabilities increased by
two basis points to 0.67%. Accretion earned on the Company's
acquired loan portfolio was $6.3
million during the first quarter of 2017, an increase
compared to $5.8 million recorded
during the fourth quarter of 2016. Excluding accretion, the
average yield on loans was 4.12% for the first quarter of 2017, as
compared to 4.13% for the fourth quarter of 2016.
Average interest-earning assets for the first quarter of 2017
were $6.62 billion, an increase from
$6.43 billion for the fourth quarter
of 2016. The increase was primarily due to the full quarter
impact of the acquisition of High
Point, as well as continued organic loan growth throughout
our existing markets. Average interest-bearing liabilities
were $5.31 billion for the first
quarter of 2017, an increase from $5.18
billion during the fourth quarter of 2016. This
increase was primarily in interest-bearing deposits, which
increased $142.6 million during the
first quarter of 2017.
About BNC Bancorp and Bank of North
Carolina
Headquartered in High Point, North
Carolina, BNC Bancorp is the parent company of Bank of
North Carolina d/b/a BNC Bank, a
commercial bank with total assets of $7.58
billion. Bank of North
Carolina provides a complete line of banking and financial
services to individuals and businesses through its 76 current
banking offices in Virginia, North
and South Carolina. Bank of
North Carolina is insured by the
FDIC and is an equal housing lender. BNC Bancorp's stock is
traded and quoted in the Nasdaq Capital Market under the symbol
"BNCN." The Company's website is
www.bncbancorp.com.
Non-GAAP Financial Measures
This press release contains financial information determined
by methods other than in accordance with accounting principles
generally accepted in the United States. BNC Bancorp's
management uses these "non-GAAP" financial measures in its analysis
of the Company's performance. Management believes that these
non-GAAP financial measures provide a greater understanding of
ongoing operations and enhance comparability of results with prior
periods as well as demonstrating the effects of significant gains
and charges in the current period. These disclosures should not be
viewed as a substitute for operating results determined in
accordance with GAAP, nor are they necessarily comparable to
non-GAAP performance measures that may be presented by other
companies. See the attached tabular disclosures for a
reconciliation of these non-GAAP financial measures to the most
directly comparable GAAP measure.
Forward Looking Statements
This press release contains "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements represent plans,
estimates, objectives, goals, guidelines, expectations, intentions,
projections and statements of our beliefs concerning future events,
business plans, objectives, expected operating results and the
assumptions upon which those statements are based. Forward-looking
statements include without limitation, any statement that may
predict, forecast, indicate or imply future results, performance or
achievements, and are typically identified with words such as
"may," "could," "should," "will," "would," "believe," "anticipate,"
"estimate," "project," "expect," "intend," "plan," or words or
phases of similar meaning. Forward-looking statements may include,
among other things, statements about the Company's confidence in
its strategies and its expectations about financial performance,
market growth, market and regulatory trends and developments,
acquisitions and divestitures, new technologies, services and
opportunities and earnings. The forward-looking statements are
based largely on the Company's expectations and are subject to a
number of known and unknown risks and uncertainties that are
subject to change based on factors which are, in many instances,
beyond the Company's control. The Company undertakes no obligation
to publicly update any forward-looking statement to reflect
developments occurring after the statement is made, except as
otherwise required by law. Actual results, performance or
achievements could differ materially from those contemplated,
expressed, or implied by the forward-looking statements as a result
of, among other factors, the risks and uncertainties described in
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Company's Annual Report on Form 10-K
for the year ended December 31,
2016. Please refer to the SEC's website at
www.sec.gov where you can review this
document.
Reconciliation of Non-GAAP Financial Measures
|
|
Three Months
Ended
|
|
|
Mar. 31,
2017
|
|
Dec. 31,
2016
|
|
Sept. 30,
2016
|
|
Jun. 30,
2016
|
|
Mar. 31,
2016
|
Operating Earnings
per Share, Diluted (1)
|
|
(Dollars in
thousands)
|
Net income
(GAAP)
|
|
$
14,431
|
|
$
15,691
|
|
$
18,140
|
|
$
14,647
|
|
$
14,435
|
Transaction-related
expenses, net of tax
|
|
8,375
|
|
5,746
|
|
1,618
|
|
2,399
|
|
903
|
Loss on
extinguishment of debt, net of tax
|
|
-
|
|
377
|
|
-
|
|
-
|
|
-
|
Securities gains
(losses), net of tax
|
|
-
|
|
4
|
|
21
|
|
4
|
|
(25)
|
Operating earnings
(non-GAAP)
|
|
22,806
|
|
21,810
|
|
19,736
|
|
17,042
|
|
15,363
|
Weighted average
fully diluted shares outstanding
|
|
52,357
|
|
50,852
|
|
47,360
|
|
41,560
|
|
40,885
|
Operating earnings
per share, diluted (non-GAAP)
|
|
$
0.44
|
|
$
0.43
|
|
$
0.42
|
|
$
0.41
|
|
$
0.38
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Common
Book Value per Share (2)
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
(GAAP)
|
|
$
916,638
|
|
$
901,882
|
|
$
795,212
|
|
$
717,061
|
|
$
603,553
|
Intangible
assets
|
|
259,141
|
|
260,680
|
|
207,820
|
|
207,234
|
|
151,829
|
Tangible common
shareholders equity (non-GAAP)
|
|
657,497
|
|
641,202
|
|
587,392
|
|
509,827
|
|
451,724
|
Common shares
outstanding
|
|
52,222
|
|
52,177
|
|
48,110
|
|
45,201
|
|
40,806
|
Tangible common book
value per share (non-GAAP)
|
|
$
12.59
|
|
$
12.29
|
|
$
12.21
|
|
$
11.28
|
|
$
11.07
|
|
|
|
|
|
|
|
|
|
|
|
Return on Average
Tangible Common Equity (2)
|
|
|
|
|
|
|
|
|
|
|
Net income
(GAAP)
|
|
$
14,431
|
|
$
15,691
|
|
$
18,140
|
|
$
14,647
|
|
$
14,435
|
Amortization of
intangibles, net of tax
|
|
963
|
|
888
|
|
732
|
|
748
|
|
728.28
|
Tangible net income
available to common shareholders (non-GAAP)
|
|
15,394
|
|
16,579
|
|
18,872
|
|
15,395
|
|
15,163
|
Average common
shareholders equity
|
|
905,594
|
|
864,656
|
|
768,124
|
|
625,021
|
|
597,127
|
Average intangible
assets
|
|
259,466
|
|
241,802
|
|
206,653
|
|
159,184
|
|
152,379
|
Average tangible
common shareholders' equity (non-GAAP)
|
|
646,128
|
|
622,854
|
|
561,471
|
|
465,837
|
|
444,748
|
Return on average
tangible common equity (non-GAAP)
|
|
9.66%
|
|
10.59%
|
|
13.37%
|
|
13.29%
|
|
13.71%
|
|
|
|
|
|
|
|
|
|
|
|
Operating Return
on Average Assets (1)
|
|
|
|
|
|
|
|
|
|
|
Net income
(GAAP)
|
|
$
14,431
|
|
$
15,691
|
|
$
18,140
|
|
$
14,647
|
|
$
14,435
|
Transaction-related
expenses, net of tax
|
|
8,375
|
|
5,746
|
|
1,618
|
|
2,399
|
|
903
|
Loss on
extinguishment of debt, net of tax
|
|
-
|
|
377
|
|
-
|
|
-
|
|
-
|
Securities gains
(losses), net of tax
|
|
-
|
|
4
|
|
21
|
|
4
|
|
(25)
|
Operating earnings
(non-GAAP)
|
|
$
22,806
|
|
$
21,810
|
|
$
19,736
|
|
$
17,042
|
|
$
15,363
|
Average
assets
|
|
7,391,231
|
|
7,158,393
|
|
6,532,517
|
|
5,908,341
|
|
5,635,137
|
Operating return on
average assets (non-GAAP)
|
|
1.25%
|
|
1.21%
|
|
1.20%
|
|
1.16%
|
|
1.10%
|
|
|
|
|
|
|
|
|
|
|
|
Operating Return
on Average Tangible Common Equity (2)
|
|
|
|
|
|
|
|
|
|
|
Net income
(GAAP)
|
|
$
14,431
|
|
$
15,691
|
|
$
18,140
|
|
$
14,647
|
|
$
14,435
|
Amortization of
intangibles, net of tax
|
|
963
|
|
888
|
|
732
|
|
748
|
|
728
|
Transaction-related
expenses, net of tax
|
|
8,375
|
|
5,746
|
|
1,618
|
|
2,399
|
|
903
|
Loss on
extinguishment of debt, net of tax
|
|
-
|
|
377
|
|
-
|
|
-
|
|
-
|
Securities gains
(losses), net of tax
|
|
-
|
|
4
|
|
21
|
|
4
|
|
(25)
|
Operating tangible
net income (non-GAAP)
|
|
$
23,769
|
|
$
22,698
|
|
$
20,468
|
|
$
17,790
|
|
$
16,091
|
Average common
shareholders equity
|
|
905,594
|
|
864,656
|
|
768,124
|
|
625,021
|
|
597,127
|
Average intangible
assets
|
|
259,466
|
|
241,802
|
|
206,653
|
|
159,184
|
|
152,379
|
Average tangible
common shareholders' equity (non-GAAP)
|
|
646,128
|
|
622,854
|
|
561,471
|
|
465,837
|
|
444,748
|
Operating return on
average tangible common equity (non-GAAP)
|
|
14.92%
|
|
14.50%
|
|
14.50%
|
|
15.36%
|
|
14.55%
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Efficiency Ratio (3)
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense
(GAAP)
|
|
$
52,798
|
|
$
47,565
|
|
$
37,835
|
|
$
36,840
|
|
$
34,886
|
Transaction-related
expenses
|
|
13,294
|
|
9,121
|
|
2,568
|
|
3,808
|
|
1,434
|
Loss on
extinguishment of debt
|
|
-
|
|
598
|
|
-
|
|
-
|
|
-
|
Operating
non-interest expense (non-GAAP)
|
|
39,504
|
|
37,846
|
|
35,267
|
|
33,032
|
|
33,452
|
Net interest income,
FTE
|
|
62,203
|
|
61,454
|
|
57,647
|
|
51,865
|
|
50,396
|
Non-interest income -
GAAP
|
|
14,466
|
|
11,696
|
|
9,811
|
|
9,015
|
|
7,962
|
Securities gains
(losses), net
|
|
-
|
|
6
|
|
34
|
|
4
|
|
(39)
|
Operating efficiency
ratio (non-GAAP)
|
|
51.53%
|
|
51.74%
|
|
52.31%
|
|
54.26%
|
|
57.28%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Operating earnings
per diluted share, operating non-interest income, operating
non-interest expense, operating income tax expense, operating
return on average assets, and operating return on average tangible
common equity are non-GAAP financial measures and exclude the
after-tax effect of transaction-related charges, loss on
extinguishment of debt, securities gains (losses) and other
one-time charges. Management believes that these non-GAAP
performance measures provide additional useful information that
allows readers to evaluate the ongoing performance of the
company.
|
(2)
|
The tangible measures
are non-GAAP financial measures and exclude the effect of period
end or average balance of intangible assets. Management
believes that these non-GAAP tangible measures provide additional
useful information, particularly since these measures are widely
used by industry analysts for companies with prior merger and
acquisition activities.
|
(3)
|
Operating efficiency
ratio is calculated by non-interest expense, excluding
transaction-related expenses, and loss on extinguishment of debt,
divided by the sum of FTE net interest income and non-interest
income excluding securities gains (losses). Management
believes this non-GAAP operating measure provides additional useful
information that allows readers to evaluate the ongoing performance
of the company.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/bnc-bancorp-announces-earnings-for-first-quarter-2017-300440380.html
SOURCE BNC Bancorp