- 35,150$
- -0,28%
PR Newswire
HIGH POINT, N.C., Jan. 22, 2017
HIGH POINT, N.C., Jan. 22, 2017 /PRNewswire/ -- BNC Bancorp (NASDAQ: BNCN) ("Company"), parent company for Bank of North Carolina ("Bank"), today reported financial results for the fourth quarter and fiscal year ended December 31, 2016. Highlights for the fourth quarter of 2016 include the following:
Net income of $15.7 million, or $0.31 per diluted share, compared to $18.1 million, or $0.38 per diluted share, for third quarter of 2016 Return on average assets of 0.87%, compared to 1.10% for third quarter of 2016 Return on average tangible common equity of 10.59%, compared to 13.37% for third quarter of 2016 Operating net income of $21.8 million, or $0.43 per diluted share, compared to $19.7 million, or $0.42 per diluted share, for third quarter of 2016 Operating return on average assets of 1.21%, compared to 1.20% for third quarter of 2016 Operating return on average tangible common equity of 14.50%, unchanged from third quarter of 2016 Originated loans at December 31, 2016 of $3.65 billion, an increase of $190.0 million compared to September 30, 2016 Total portfolio loans were $5.46 billion at December 31, 2016, an increase of $459.8 million compared to September 30, 2016 Loan originations of $535 million, as compared to $630 million during the third quarter of 2016 Asset quality ratios remain strong Completed acquisition and conversion of High Point Bank Corporation Increased presence in the Piedmont Triad area of North Carolina Added insurance and trust services to suite of product offerings
Financial Performance
Three Months Ended
Year Ended
INCOME SUMMARY
Dec. 31, 2016
Sept. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Interest income
(Dollars in thousands)
Interest and fees on loans
$ 61,992
$ 57,824
$ 51,978
$ 50,302
$ 50,762
$222,096
$178,726
Investment securities
6,974
6,910
6,202
5,965
5,336
26,051
19,205
Other
305
291
228
214
141
1,038
555
Total interest income
69,271
65,025
58,408
56,481
56,239
249,185
198,486
Interest expense
Interest on deposits
7,935
7,619
6,704
6,241
5,851
28,499
20,447
Interest on borrowings
2,009
1,989
1,774
1,750
1,648
7,522
6,237
Total interest expense
9,944
9,608
8,478
7,991
7,499
36,021
26,684
Net interest income
59,327
55,417
49,930
48,490
48,740
213,164
171,802
Provision for loan losses
1,455
1,865
698
647
1,287
4,665
1,896
Net interest income
57,872
53,552
49,232
47,843
47,453
208,499
169,906
Non-interest income
Mortgage lending income
2,830
3,134
2,671
2,681
2,226
11,316
10,533
Service charges
2,937
2,644
2,422
2,321
2,341
10,324
8,079
SBA income
579
739
1,104
811
467
3,233
1,835
Trust/wealth income
1,086
307
366
436
533
2,195
1,714
Securities gains (losses)
6
34
4
(39)
45
5
884
Earnings on bank-owned life insurance
1,360
1,254
1,160
758
806
4,532
2,766
Other
2,898
1,699
1,288
994
1,868
6,879
6,637
Total non-interest income
11,696
9,811
9,015
7,962
8,286
38,484
32,448
Non-interest expense
Salaries and employee benefits
20,922
18,491
18,019
17,803
17,888
75,235
67,153
Occupancy
3,622
3,154
3,155
3,252
3,392
13,183
11,802
Furniture and equipment
2,303
2,297
1,993
2,073
2,426
8,666
7,303
Data processing and supply
1,805
1,766
1,491
1,437
1,194
6,499
4,380
Advertising and business development
869
678
923
684
879
3,154
2,635
Insurance, professional and other services
1,309
1,424
1,494
1,526
952
5,753
4,824
FDIC insurance assessments
1,240
1,071
900
900
883
4,111
3,144
Loan, foreclosure and OREO
1,233
1,562
856
1,367
1,639
5,018
9,852
Transaction-related expenses
9,121
2,568
3,808
1,434
4,307
16,931
13,276
Loss on extinguishment of debt
598
-
-
-
-
598
763
Other
4,543
4,824
4,201
4,410
4,020
17,978
14,023
Total non-interest expenses
47,565
37,835
36,840
34,886
37,580
157,126
139,155
Income before income tax expense
22,003
25,528
21,407
20,919
18,159
89,857
63,199
Income tax expense
6,312
7,388
6,760
6,484
5,420
26,944
18,749
Net income (GAAP)
15,691
18,140
14,647
14,435
12,739
62,913
44,450
Securities gains (losses), net of tax
4
21
4
(25)
28
4
557
Transaction-related charges, net of tax
5,746
1,618
2,399
903
2,713
10,666
8,364
Loss on extinguishment of debt, net of tax
377
-
-
-
-
377
481
Operating net income (non-GAAP)
$ 21,810
$ 19,736
$ 17,042
$ 15,363
$ 15,424
$ 73,952
$ 52,738
Common shares outstanding
52,177
48,110
45,201
40,806
40,774
52,177
40,774
Weighted average diluted shares outstanding
50,852
47,360
41,560
40,885
39,452
45,185
35,782
Performance Ratios
Three Months Ended
Year Ended
Dec. 31, 2016
Sept. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Earnings per diluted share
$ 0.31
$ 0.38
$ 0.35
$ 0.35
$ 0.32
$ 1.39
$ 1.24
Return on average assets
0.87%
1.10%
1.00%
1.03%
0.93%
1.00%
0.94%
Return on average common equity
7.22%
9.40%
9.43%
9.72%
9.13%
8.81%
9.52%
Return on average tangible common equity (1)
10.59%
13.37%
13.29%
13.71%
13.33%
12.59%
13.40%
Efficiency ratio (2)
65.02%
56.09%
60.51%
59.78%
63.75%
60.47%
65.70%
Operating earnings per diluted share (1)
$ 0.43
$ 0.42
$ 0.41
$ 0.38
$ 0.39
$ 1.64
$ 1.47
Operating return on average assets (1)
1.21%
1.20%
1.16%
1.10%
1.13%
1.17%
1.12%
Operating return on average tangible common equity (1)
14.50%
14.50%
15.36%
14.55%
15.99%
14.70%
15.77%
Operating efficiency ratio (1) (2)
51.74%
52.31%
54.26%
57.28%
56.49%
53.72%
59.32%
Book value per common share
$ 17.29
$ 16.53
$ 15.86
$ 14.79
$ 14.52
$ 17.29
$ 14.52
Tangible book value per common share (1)
12.29
12.21
11.28
11.07
10.77
12.29
10.77
(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
Year Ended
Dec. 31, 2016
Sept. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
(Dollars in thousands)
Securities gains (losses), net
$ 6
$ 34
$ 4
$ (39)
$ 45
$ 5
$ 884
Loss on extinguishment of debt
598
-
-
-
-
598
763
Fair value accretion
5,841
5,845
5,276
5,505
5,599
22,467
20,516
OREO valuation adjustments, net
503
274
222
266
348
1,265
2,893
Transaction-related expenses
9,121
2,568
3,808
1,434
4,307
16,931
13,276
Richard D. Callicutt, II, President and CEO, stated, "We are extremely pleased to report record results for both the fourth quarter and full year of 2016. During the fourth quarter, after adjusting for all the transaction-related expenses, operating earnings increased a healthy 10.5%, while operating earnings per share increased to $0.43. Operating return on average assets was a healthy 1.21%, up slightly from the prior quarter, while operating return on average tangible common equity remained at 14.50%.
For the year, we are pleased to report a 40.2% increase in operating earnings, a $1.52, or 14.1%, increase in tangible book value, an 11.6% increase in operating earnings per share, and return on average tangible common equity of a robust 14.70%. While these performance highlights are the metrics which many people refer to when discussing our valuation, it continues to be our ability to attract exceptional people throughout a footprint that is highly concentrated in the best growth markets across the Carolinas and Virginia that enables us to produce such results.
As we look to the future, the challenges will continue to be digesting higher regulatory costs and transitioning our resources from a commercial real estate focused strategy, which has served us extremely well over our 25 year history, into one of greater balance as we build out the underwriting, monitoring, and risk management capabilities of our C&I businesses and related treasury support functions."
Non-interest Income and Expense Data
Three Months Ended
Year Ended
Dec. 31, 2016
Sept. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Non-interest income
(Dollars in thousands)
Mortgage lending income
$ 2,830
$ 3,134
$ 2,671
$ 2,681
$ 2,226
$ 11,316
$ 10,533
Service charges
2,937
2,644
2,422
2,321
2,341
10,324
8,079
SBA income
579
739
1,104
811
467
3,233
1,835
Trust/wealth income
1,086
307
366
436
533
2,195
1,714
Earnings on bank-owned life insurance
1,360
1,254
1,160
758
806
4,532
2,766
Other
2,898
1,699
1,288
994
1,868
6,879
6,637
Total operating non-interest income - non-GAAP
11,690
9,777
9,011
8,001
8,241
38,479
31,564
Securities gains (losses), net
6
34
4
(39)
45
5
884
Total non-interest income - GAAP
$ 11,696
$ 9,811
$ 9,015
$ 7,962
$ 8,286
$ 38,484
$ 32,448
Non-interest expense
Salaries and employee benefits
$ 20,922
$ 18,491
$ 18,019
$ 17,803
$ 17,888
$ 75,235
$ 67,153
Occupancy
3,622
3,154
3,155
3,252
3,392
13,183
11,802
Furniture and equipment
2,303
2,297
1,993
2,073
2,426
8,666
7,303
Data processing and supply
1,805
1,766
1,491
1,437
1,194
6,499
4,381
Advertising and business development
869
678
923
684
879
3,154
2,635
Insurance, professional and other services
1,309
1,424
1,494
1,526
952
5,753
4,824
FDIC insurance assessments
1,240
1,071
900
900
883
4,111
3,144
Loan, foreclosure and OREO
1,233
1,562
856
1,367
1,639
5,018
9,852
Other
4,543
4,824
4,201
4,410
4,020
17,978
14,022
Total operating non-interest expense - non-GAAP
37,846
35,267
33,032
33,452
33,273
139,597
125,116
Transaction-related expenses
9,121
2,568
3,808
1,434
4,307
16,931
13,276
Loss on extinguishment of debt
598
-
-
-
-
598
763
Total non-interest expense - GAAP
$ 47,565
$ 37,835
$ 36,840
$ 34,886
$ 37,580
$ 157,126
$ 139,155
Total GAAP and operating non-interest income was $11.7 million for the fourth quarter of 2016, an increase from $9.8 million for the third quarter of 2016. The increase in non-interest income was primarily due to the addition of High Point Bank Corporation ("High Point"), which generated additional deposit fees and additional trust and wealth services income. These increases were slightly offset by a seasonal decrease in mortgage lending income. Many of the other non-interest income sources, such as income from recoveries on acquired loans and income derived from trust/wealth services, are volatile and can vary significantly from period to period.
Total GAAP non-interest expense was $47.6 million for the fourth quarter of 2016, an increase from $37.8 million for the third quarter of 2016. The results for the fourth quarter of 2016 include $9.1 million of transaction-related expenses and a $0.6 million loss on the extinguishment of debt. Excluding these charges, operating non-interest expense for the fourth quarter of 2016 was $37.8 million, an increase compared to $35.3 million for the third quarter of 2016. This increase was directly related to the additional headcount and facilities obtained from the Company's acquisition of High Point.
Selected Balance Sheet Data
Ending Balance
Dec. 31, 2016
Sept. 30, 2016
Jun. 30, 2016
Mar. 31,2016
Dec. 31, 2015
Portfolio loans:
(Dollars in thousands)
Originated loans
$ 3,645,687
$ 3,455,677
$ 3,163,357
$ 2,847,466
$ 2,721,216
Acquired loans
1,810,023
1,540,270
1,649,328
1,390,688
1,478,655
Allowance for loan and lease losses
(37,501)
(36,366)
(33,841)
(32,548)
(31,647)
Portfolio loans, net
5,418,209
4,959,581
4,778,844
4,205,606
4,168,224
Loans held for sale
43,731
40,441
41,703
33,455
39,470
Investment securities
896,786
838,289
803,058
757,248
734,557
Total interest-earning assets
6,589,774
6,128,554
5,790,893
5,126,452
5,131,988
Goodwill
234,769
189,968
188,220
134,686
134,686
Other intangible assets, net
25,911
17,852
19,014
17,143
18,299
Total assets
7,401,691
6,801,562
6,478,373
5,699,573
5,668,183
Deposits:
Non-interest bearing deposits
1,113,878
917,521
889,254
794,548
776,479
Interest-bearing demand and savings
3,405,036
3,080,479
2,652,735
2,431,584
2,366,890
Time deposits
1,564,063
1,652,123
1,814,654
1,537,644
1,598,838
Total deposits
6,082,977
5,650,123
5,356,643
4,763,776
4,742,207
Borrowings
369,952
310,609
352,119
282,929
292,790
Total interest-bearing liabilities
5,339,051
5,043,211
4,819,508
4,252,157
4,258,518
Shareholders' equity:
Common equity
900,044
786,625
710,300
598,158
584,818
Accumulated other comprehensive income
1,838
8,587
6,761
5,395
7,329
Total shareholders' equity
901,882
795,212
717,061
603,553
592,147
Total assets at December 31, 2016 were $7.40 billion, an increase of 8.8% as compared to total assets of $6.80 billion at September 30, 2016. Total portfolio loans were $5.46 billion at December 31, 2016, an increase of 9.2% from $5.00 billion at September 30, 2016. Loans that were originated by the Company increased by $190.0 million, or 5.5%, during the fourth quarter of 2016.
Total deposits were $6.08 billion at December 31, 2016, an increase of $432.9 million, or 7.7%, as compared to September 30, 2016. Wholesale deposits comprised 21.3% of total deposits at December 31, 2016, a decrease from 27.5% of total deposits at September 30, 2016. Transactional deposits increased by $520.9 million, or 13.0%, at December 31, 2016, as compared to September 30, 2016. Total borrowings were $370.0 million at December 31, 2016, an increase of 19.1% compared to $310.6 million at September 30, 2016. Total shareholders' equity was $901.9 million at December 31, 2016, an increase of $106.7 million, or 13.4%, as compared to $795.2 million at September 30, 2016. The increase in equity is primarily due to the issuance of 4.0 million shares of voting common stock in connection with the acquisition of High Point. At December 31, 2016, both the Bank's and Company's capital ratios exceeded the minimum thresholds established for a well-capitalized bank by regulatory measures.
On January 17, 2017, the Board of Directors announced the declaration of a quarterly cash dividend on its common stock of $0.05 per share. This dividend is payable on February 24, 2017 to shareholders of record as of February 10, 2017. The $0.05 per share dividend rate is consistent with the rate declared in previous quarters.
Loan Portfolio Composition
Ending Balance
Dec. 31, 2016
Sept. 30, 2016
Jun. 30, 2016
Mar. 31,2016
Dec. 31, 2015
(Dollars in millions)
Residential construction
$ 115
$ 104
$ 98
$ 76
$ 76
Presold
58
62
59
39
46
Speculative
57
42
39
37
30
Commercial construction
401
285
294
278
237
Residential and commercial A&D
42
39
33
23
18
Land
120
118
126
118
111
Residential buildable lots
51
44
44
39
34
Commercial buildable lots
23
24
24
21
20
Land held for development
26
23
31
34
34
Raw and agricultural land
20
27
27
24
23
Commercial real estate
2,917
2,705
2,500
2,257
2,246
Multi-family
213
240
203
179
178
Farmland
3
3
4
4
5
Owner occupied
884
787
817
705
785
Non-owner occupied
1,817
1,675
1,476
1,369
1,277
Commercial and industrial
482
443
454
400
419
Residential mortgage
1,326
1,251
1,258
1,039
1,049
Consumer
24
22
21
18
19
Leases
29
29
29
29
27
Total portfolio loans
$ 5,456
$ 4,996
$ 4,813
$ 4,238
$ 4,200
Acquired Loan Summary
Ending Balance
Dec. 31, 2016
Sept. 30, 2016
Jun. 30, 2016
Mar. 31,2016
Dec. 31, 2015
(Dollars in thousands)
Performing acquired loans
$ 1,710,008
$ 1,432,351
$ 1,537,650
$ 1,278,965
$ 1,363,379
Less: remaining FMV adjustments
(27,846)
(21,687)
(25,630)
(23,359)
(27,789)
Performing acquired loans, net
1,682,162
1,410,664
1,512,020
1,255,606
1,335,590
FMV adjustment %
1.6%
1.5%
1.7%
1.8%
2.0%
Purchase credit impaired loans (PCI)
143,530
143,494
152,105
148,459
157,966
Less: remaining FMV adjustments
(15,669)
(13,888)
(14,797)
(13,377)
(14,901)
PCI loans, net
127,861
129,606
137,308
135,082
143,065
FMV adjustment %
10.9%
9.7%
9.7%
9.0%
9.4%
Total acquired performing loans
$ 1,682,162
$ 1,410,664
$ 1,512,020
$ 1,255,606
$ 1,335,590
Total acquired PCI loans
127,861
129,606
137,308
135,082
143,065
Total acquired loans
$ 1,810,023
$ 1,540,270
$ 1,649,328
$ 1,390,688
$ 1,478,655
FMV adjustment % all acquired loans
2.3%
2.3%
2.4%
2.6%
2.8%
Asset Quality
Ending Balance
Dec. 31, 2016
Sept. 30, 2016
Jun. 30, 2016
Mar. 31,2016
Dec. 31, 2015
(Dollars in thousands)
Nonaccrual loans - non-acquired
$ 6,647
$ 7,662
$ 5,407
$ 6,228
$ 6,623
Nonaccrual loans - acquired
7,989
9,347
11,756
12,706
12,086
OREO - non-acquired
13,109
13,352
15,806
14,987
15,588
OREO - acquired
13,380
14,696
14,708
15,783
16,973
90 days past due - non-acquired
115
10
10
-
-
90 days past due - acquired
-
-
-
-
3
Total nonperforming assets
$ 41,240
$ 45,067
$ 47,687
$ 49,704
$ 51,273
Total nonperforming assets - non-acquired
$ 19,871
$ 21,024
$ 21,223
$ 21,215
$ 22,211
Net charge-offs (recoveries), QTD
$ 320
$ (660)
$ (594)
$ (202)
$ 352
Annualized net charge-offs (recoveries) to total average portfolio loans
0.02%
-0.05%
-0.05%
-0.02%
0.03%
Ratio of total nonperforming assets to total assets
0.56%
0.66%
0.74%
0.87%
0.90%
Ratio of total nonperforming loans to total portfolio loans
0.27%
0.34%
0.36%
0.45%
0.45%
Ratio of total allowance for loan losses to total portfolio loans
0.69%
0.73%
0.70%
0.77%
0.75%
Excluding acquired
Ratio of nonperforming assets to loans and OREO
0.54%
0.61%
0.67%
0.74%
0.81%
Ratio of nonperforming loans to loans
0.19%
0.22%
0.17%
0.22%
0.24%
Ratio of allowance for loan losses to loans
0.95%
0.97%
0.98%
1.03%
1.05%
Overall asset quality continued to improve during the fourth quarter of 2016, as total nonperforming assets were $41.2 million, or 0.56% of total assets, at December 31, 2016, as compared to $45.1 million, or 0.66% of total assets, at September 30, 2016. Excluding nonperforming assets acquired by the Company, nonperforming assets were $19.9 million, or 0.54% of non-acquired loans and OREO, at December 31, 2016, as compared to $21.0 million, or 0.61% of non-acquired loans and OREO, at September 30, 2016.
The Company experienced $0.3 million of net charge-offs during the fourth quarter of 2016, compared to net recoveries of $0.7 million during the third quarter of 2016. Gross charge-offs were $1.2 million during the fourth quarter of 2016, an increase compared to gross charge-offs of $0.9 million for the third quarter of 2016.
The allowance for loan losses was $37.5 million at December 31, 2016, an increase from $36.4 million at September 30, 2016. The Company recorded a provision for loan losses of $1.5 million during the fourth quarter of 2016, compared to $1.9 million recorded during the third quarter of 2016, as the Company continues to experience strong growth in the originated loan portfolio.
Net Interest Income and Margin
Three Months Ended
Year Ended
Dec. 31, 2016
Sept. 30, 2016
Jun. 30, 2016
Mar. 31,2016
Dec. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Quarterly average balances:
(Dollars in thousands)
Loans
$ 5,410,066
$ 4,893,926
$ 4,437,248
$ 4,241,970
$4,193,632
$ 4,737,387
$ 3,639,890
Investment securities
835,235
828,144
760,841
737,361
656,940
801,256
574,951
Interest-bearing balances and other
181,678
147,763
134,923
139,367
76,533
151,008
63,426
Total interest-earning assets
6,426,979
5,869,833
5,333,012
5,118,698
4,927,105
5,689,651
4,278,267
Deposits:
Non-interest bearing
1,056,507
907,344
825,148
778,114
772,831
892,271
653,999
Interest-bearing
4,862,443
4,475,901
4,138,466
3,953,668
3,784,140
4,359,322
3,292,226
Total deposits
5,918,950
5,383,245
4,963,614
4,731,782
4,556,971
5,251,593
3,946,225
Borrowed funds
315,828
321,218
272,374
262,880
288,209
293,214
279,877
Total interest-bearing liabilities
5,178,271
4,797,119
4,410,840
4,216,548
4,072,349
4,652,536
3,572,103
Shareholders' equity
864,656
768,124
625,021
597,127
553,475
714,293
466,881
Interest Income/Expense:
Loans
$ 61,992
$ 57,824
$ 51,978
$ 50,302
$ 50,762
$ 222,096
$ 178,726
Investment securities, tax
3,352
3,113
2,908
2,720
2,069
12,093
6,338
Investment securities, non-tax (1)
5,749
6,027
5,229
5,151
5,186
22,156
20,424
Interest-bearing balances and other
305
291
228
214
141
1,038
555
Total interest income
71,398
67,255
60,343
58,387
58,158
257,383
206,043
Deposits
7,935
7,619
6,704
6,241
5,851
28,499
20,447
Borrowings
2,009
1,989
1,774
1,750
1,648
7,522
6,237
Total interest expense
9,944
9,608
8,478
7,991
7,499
36,021
26,684
Net interest income
$ 61,454
$ 57,647
$ 51,865
$ 50,396
$ 50,659
$ 221,362
$ 179,359
Average Yields and Costs:
Loans
4.56%
4.70%
4.71%
4.77%
4.80%
4.69%
4.91%
Investment securities, tax
2.96%
2.93%
3.01%
2.94%
2.81%
2.96%
2.92%
Investment securities, non-tax (1)
5.94%
5.91%
5.65%
5.68%
5.63%
5.64%
5.71%
Interest-bearing balances and other
0.67%
0.78%
0.68%
0.62%
0.73%
0.69%
0.88%
Total interest-earning assets
4.42%
4.56%
4.55%
4.59%
4.68%
4.52%
4.82%
Total interest-bearing deposits
0.65%
0.68%
0.65%
0.63%
0.61%
0.65%
0.62%
Borrowed funds
2.53%
2.46%
2.62%
2.68%
2.27%
2.57%
2.23%
Total interest-bearing liabilities
0.76%
0.80%
0.77%
0.76%
0.73%
0.77%
0.75%
Cost of funds
0.63%
0.67%
0.65%
0.64%
0.61%
0.65%
0.63%
Net interest margin
3.80%
3.91%
3.91%
3.96%
4.08%
3.89%
4.19%
(1)
Interest income and average yields on non-taxable loans investment securities are computed on a FTE basis for comparison with taxable investment securities.
FTE net interest income for the fourth quarter of 2016 was $61.5 million, an increase from $57.6 million for the third quarter of 2016. FTE net interest margin was 3.80% for the fourth quarter of 2016, as compared to 3.91% for the third quarter of 2016. The average yield on interest-earning assets decreased 14 basis points to 4.42% for the fourth quarter of 2016, while the rate paid on interest-bearing liabilities decreased slightly to 0.65%. Accretion earned on the Company's acquired loan portfolio was $5.8 million during the fourth quarter of 2016, unchanged from the amount earned during the third quarter of 2016. Excluding accretion, the average yield on loans was 4.13% for the fourth quarter 2016, as compared to 4.23% for the third quarter of 2016.
Average interest-earning assets for the fourth quarter of 2016 were $6.43 billion, an increase from $5.87 billion for the third quarter of 2016. The increase was primarily due to the acquisition of High Point, as well as continued organic loan growth throughout our existing markets. Average interest-bearing liabilities were $5.18 billion for the fourth quarter of 2016, an increase from $4.80 billion during the third quarter of 2016. This increase was primarily in interest-bearing deposits, which increased $386.5 million during the fourth quarter of 2016 due to the High Point acquisition.
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 $7.40 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, 2015 and Quarterly Report on Form 10-Q for the periods ended September 30, 2016, June 30, 2016, and March 31, 2016, respectively. Please refer to the SEC's website at www.sec.gov where you can review those documents.
Reconciliation of Non-GAAP Financial Measures
Three Months Ended
Year Ended
Dec. 31, 2016
Sept. 30, 2016
Jun. 30, 2016
Mar. 31,2016
Dec. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Operating Earnings per Share, Diluted (1)
(Dollars in thousands)
Net income (GAAP)
$ 15,691
$ 18,140
$ 14,647
$ 14,435
$ 12,739
$ 62,913
$ 44,450
Transaction-related expenses, net of tax
5,746
1,618
2,399
903
2,713
10,666
8,364
Loss on extinguishment of debt, net of tax
377
-
-
-
-
377
481
Securities gains (losses), net of tax
4
21
4
(25)
28
4
557
Operating earnings (non-GAAP)
21,810
19,736
17,042
15,363
15,424
73,952
52,738
Weighted average fully diluted shares outstanding
50,852
47,360
41,560
40,885
39,452
45,185
35,782
Operating earnings per share, diluted (non-GAAP)
$ 0.43
$ 0.42
$ 0.41
$ 0.38
$ 0.39
$ 1.64
$ 1.47
Tangible Common Book Value per Share (2)
Shareholders' equity (GAAP)
$ 901,882
$ 795,212
$ 717,061
$ 603,553
$ 592,147
$ 901,882
$ 592,147
Intangible assets
260,680
207,820
207,234
151,829
152,985
260,680
152,985
Tangible common shareholders equity (non-GAAP)
641,202
587,392
509,827
451,724
439,162
641,202
439,162
Common shares outstanding
52,177
48,110
45,201
40,806
40,774
52,177
40,774
Tangible common book value per share (non-GAAP)
$ 12.29
$ 12.21
$ 11.28
$ 11.07
$ 10.77
$ 12.29
$ 10.77
Return on Average Tangible Common Equity (2)
Net income (GAAP)
$ 15,691
$ 18,140
$ 14,647
$ 14,435
$ 12,739
$ 62,913
$ 44,450
Amortization of intangibles, net of tax
888
732
748
728
745.92
3,096
2,498
Tangible net income available to common shareholders (non-GAAP)
16,579
18,872
15,395
15,163
13,485
66,009
46,948
Average common shareholders equity
864,656
768,124
625,021
597,127
553,475
714,293
466,881
Average intangible assets
241,802
206,653
159,184
152,379
152,255
190,128
116,548
Average tangible common shareholders' equity (non-GAAP)
622,854
561,471
465,837
444,748
401,220
524,165
350,333
Return on average tangible common equity (non-GAAP)
10.59%
13.37%
13.29%
13.71%
13.33%
12.59%
13.40%
Operating Return on Average Assets (1)
Net income (GAAP)
$ 15,691
$ 18,140
$ 14,647
$ 14,435
$ 12,739
$ 62,913
$ 44,450
Transaction-related expenses, net of tax
5,746
1,618
2,399
903
2,713
10,666
8,364
Loss on extinguishment of debt, net of tax
377
-
-
-
-
377
481
Securities gains (losses), net of tax
4
21
4
(25)
28
4
557
Operating earnings (non-GAAP)
$ 21,810
$ 19,736
$ 17,042
$ 15,363
$ 15,424
$ 73,952
$ 52,738
Average assets
7,158,393
6,532,517
5,908,341
5,635,137
5,428,444
6,311,531
4,720,107
Operating return on average assets (non-GAAP)
1.21%
1.20%
1.16%
1.10%
1.13%
1.17%
1.12%
Operating Return on Average Tangible Common Equity (2)
Net income (GAAP)
$ 15,691
$ 18,140
$ 14,647
$ 14,435
$ 12,739
$ 62,913
$ 44,450
Amortization of intangibles, net of tax
888
732
748
728
746
3,096
2,498
Transaction-related expenses, net of tax
5,746
1,618
2,399
903
2,713
10,666
8,364
Loss on extinguishment of debt, net of tax
377
-
-
-
-
377
481
Securities gains (losses), net of tax
4
21
4
(25)
28
4
557
Operating tangible net income (non-GAAP)
$ 22,698
$ 20,468
$ 17,790
$ 16,091
$ 16,170
$ 77,048
$ 55,236
Average common shareholders equity
864,656
768,124
625,021
597,127
553,475
714,293
466,881
Average intangible assets
241,802
206,653
159,184
152,379
152,255
190,128
116,548
Average tangible common shareholders' equity (non-GAAP)
622,854
561,471
465,837
444,748
401,220
524,165
350,333
Operating return on average tangible common equity (non-GAAP)
14.50%
14.50%
15.36%
14.55%
15.99%
14.70%
15.77%
Operating Efficiency Ratio (3)
Non-interest expense (GAAP)
$ 47,565
$ 37,835
$ 36,840
$ 34,886
$ 37,580
$ 157,126
$ 139,155
Transaction-related expenses
9,121
2,568
3,808
1,434
4,307
16,931
13,276
Loss on extinguishment of debt
598
-
-
-
-
598
763
Operating non-interest expense (non-GAAP)
37,846
35,267
33,032
33,452
33,273
139,597
125,116
Net interest income, FTE
61,454
57,647
51,865
50,396
50,659
221,362
179,359
Non-interest income - GAAP
11,696
9,811
9,015
7,962
8,286
38,484
32,448
Securities gains (losses), net
6
34
4
(39)
45
5
884
Operating efficiency ratio (non-GAAP)
51.74%
52.31%
54.26%
57.28%
56.49%
53.72%
59.32%
(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.
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SOURCE BNC Bancorp