EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

Crescent Financial Corporation Announces 54% Increase in Comparative Second

Quarter Earnings and 28% Increase in Earnings Per Share

CARY, N.C., July 17 /PRNewswire-FirstCall/ — Crescent Financial Corporation (Nasdaq: CRFN), parent company of Crescent State Bank today announced unaudited net income for the quarter ended June 30, 2006 of $1,003,000 reflecting a 54% increase over net income of $653,000 for the prior year quarter. Diluted earnings per share for the current three-month period was $.17 compared to diluted earnings per share of $.13 for the prior year period reflecting a 28% increase. The percentage increase in earnings per share and the increase in net income were not comparable due to the issuance of 848,000 shares during the fourth quarter of 2005.

The increase in earnings resulted primarily from strong earning asset growth and was aided to a lesser degree by an improved net interest margin. Earning assets, which include loans outstanding, investment securities, and other interest earning assets, increased by over $70 million over the past twelve months. The net interest margin improved to 3.95% for the current three-month period from 3.88% a year ago. Net interest income increased by $892,000 or 27% from $3.3 million for the prior year quarter to $4.2 million in the current quarter of 2006. Non-interest income increased by $36,000 or 6% due primarily to increases in both deposit service charges and other deposit-related customer service fees. Revenue from mortgage loan origination activities for the current quarter increased slightly as compared with the prior year period. Non-interest expenses increased by 19% from $2.6 million to $3.1 million primarily in those areas most impacted by franchise expansion such as personnel, occupancy, advertising and data processing. During the past year, the Company opened one new full-service branch office, moved a branch office into a permanent building, opened a loan production office and took occupancy of a new Operations facility. The provision for loan losses was $164,000 during the current quarter compared with $303,000 for the prior year period.

For the six months ended June 30, 2006, Crescent reported net income of $1,986,000 or $.33 per diluted share compared with $1,294,000 or $0.26 per diluted share for the six months ended June 30, 2005. Net interest income increased by $1.9 million or 30% from $6.4 million for the prior year period to $8.3 million for the current six-month period. The net interest margin for the current six-month period was 4.02% compared to 3.86% for the prior year period. Non-interest income increased by $87,000 or 8%. Non-interest expenses increased by $937,000 or 19%. The provision for loan losses for the current six-month period was $434,000 compared with $507,000 for the prior year period.

Crescent Financial Corporation reported total assets on June 30, 2006 of $471 million reflecting a $78 million or 20% increase over total assets of $393 million on June 30, 2005. Total net loans increased by $63 million or 21% from $297 million a year ago to $360 million at June 30, 2006. Total deposits increased by $47 million or 14% from $323 million to $370 million and total borrowings increased by 39% from $40 million to $56 million. Total stockholders’ equity grew by 53% from $28 million to $43 million at June 30, 2006 due in large part to the equity offering in the fourth quarter of 2005.

Mike Carlton, President and CEO, stated, “We are pleased with the financial results for both the second quarter and year to date. The increase in net income is especially gratifying in light of the additional expenses associated with the franchise expansion. Over the past twelve months, we have expanded the infrastructure substantially in order to position ourselves for continued growth. This past quarter further reflects our strategic commitment as we opened our tenth office. Additionally, we anticipate completing the recently announced merger with Port City Capital Bank of Wilmington, North

 

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Carolina in the third quarter. We are confident that our long-term strategic objectives and unwavering commitment to customer service will position us well for continued growth and prosperity.”

Crescent State Bank is a state chartered bank operating ten banking offices in Cary (2), Apex, Clayton, Holly Springs, Southern Pines, Pinehurst, Sanford, Garner and Raleigh, North Carolina. Crescent Financial Corporation stock can be found on the NASDAQ Global Market trading under the symbol CRFN. Investors can access additional corporate information, product descriptions and online services through the Bank’s website at www.crescentstatebank.com.

Information in this press release contains “forward-looking statements.” These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates and the effects of competition. Additional factors that could cause actual results to differ materially are discussed in Crescent Financial Corporation’s recent filings with the Securities Exchange Commission, including but not limited to its Annual Report on Form 10-K and its other periodic reports.

 

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Crescent Financial Corporation

Consolidated Balance Sheet

(Amounts in thousands except share and per share data)

(Unaudited)

 

    

June 30,

2006

    

March 31,

2006

  

ASSETS

     

Cash and due from banks

    $ 12,263     $ 10,577  

Interest earning deposits with banks

      207       571  

Federal funds sold

      8,738       —    

Investment securities available for sale at fair value

      64,397       59,262  

Loans

      365,174       355,806  

Allowance for loan losses

      (4,772 )     (4,621 )

Net Loans

      360,402       351,185  

Accrued interest receivable

      2,146       1,913  

Federal Home Loan Bank stock

      3,072       2,712  

Bank premises and equipment

      5,067       5,008  

Investment in life insurance

      5,583       5,533  

Goodwill

      3,600       3,600  

Other assets

      5,288       4,657  

Total Assets

    $ 470,763     $ 445,018  

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

LIABILITIES

     

Deposits

     

Demand

    $ 52,179     $ 49,879  

Savings

      33,664       12,110  

Money market and NOW

      85,342       89,472  

Time

      198,444       198,103  

Total Deposits

      369,629       349,564  

Short-term borrowings

      16,000       10,775  

Long-term debt

      40,248       40,248  

Accrued expenses and other liabilities

      1,922       2,025  

Total Liabilities

      427,799       402,612  

STOCKHOLDERS’ EQUITY

     

Common stock

      5,798       5,035  

Additional paid-in capital

      28,829       29,513  

Retained earnings

      9,693       8,689  

Accumulated other comprehensive loss

      (1,356 )     (831 )

Total Stockholders’ Equity

      42,964       42,406  

Total Liabilities and Stockholders’ Equity

    $ 470,763     $ 445,018  

Ending shares outstanding (b)

      5,798,240       5,789,917  

Book value per share

    $ 7.41     $ 7.32  

 

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     December 31,
2005(a)		     September 30,
2005		     June 30,
2005		  

ASSETS

       

Cash and due from banks

    $ 9,403     $ 12,176     $ 8,652  

Interest earning deposits with banks

      69       593       616  

Federal funds sold

      —         —         14,753  

Investment securities available for sale at fair value

      55,550       53,155       52,251  

Loans

      328,322       322,192       301,111  

Allowance for loan losses

      (4,351 )     (4,293 )     (4,066 )

Net Loans

      323,971       317,899       297,045  

Accrued interest receivable

      1,768       1,561       1,403  

Federal Home Loan Bank stock

      2,133       2,957       2,102  

Bank premises and equipment

      4,844       3,936       3,622  

Investment in life insurance

      5,483       5,434       5,384  

Goodwill

      3,600       3,600       3,600  

Other assets

      3,967       3,715       3,426  

Total Assets

    $ 410,788     $ 405,026     $ 392,854  

LIABILITIES AND STOCKHOLDERS’ EQUITY

       

LIABILITIES

       

Deposits

       

Demand

    $ 46,830     $ 52,921     $ 50,322  

Savings

      9,365       7,072       3,673  

Money market and NOW

      87,695       82,636       94,930  

Time

      178,191       170,120       173,945  

Total Deposits

      322,081       312,749       322,870  

Short-term borrowings

      14,964       31,314       2,213  

Long-term debt

      30,248       30,248       38,248  

Accrued expenses and other liabilities

      2,038       1,537       1,381  

Total Liabilities

      369,331       375,848       364,712  

STOCKHOLDERS’ EQUITY

       

Common stock

      5,026       4,170       4,120  

Additional paid-in capital

      29,406       18,574       18,219  

Retained earnings

      7,707       6,702       5,857  

Accumulated other comprehensive loss

      (682 )     (268 )     (54 )

Total Stockholders’ Equity

      41,457       29,178       28,142  

Total Liabilities and Stockholders’ Equity

    $ 410,788     $ 405,026     $ 392,854  

Ending shares outstanding (b)

      5,780,353       4,796,068       4,738,450  

Book value per share

    $ 7.17     $ 6.08     $ 5.94  

 

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Crescent Financial Corporation

Consolidated Income Statements

(Amounts in thousands except share and per share data)

(Unaudited)

 

    

For the three-month

period ended

  
     June 30,
2006		     March 31,
2006		  

INTEREST INCOME

     

Loans

    $ 7,019     $ 6,433  

Investment securities available for sale

      724       663  

Fed funds sold and other interest

      51       5  

Total Interest Income

      7,794       7,101  

INTEREST EXPENSE

     

Deposits

      2,831       2,391  

Short-term borrowings

      213       233  

Long-term debt

      534       403  

Total Interest Expense

      3,578       3,027  

Net Interest Income

      4,216       4,074  

Provision for loan losses

      164       270  

Net interest income after provision for loan losses

      4,052       3,804  

Non-interest income

     

Mortgage loan origination income

      165       145  

Service charges and fees on deposit accounts

      308       318  

Realized gain/loss on sale of securities

      —         —    

Other

      146       133  

Total non-interest income

      619       596  

Non-interest expense

     

Salaries and employee benefits

      1,670       1,569  

Occupancy and equipment

      489       469  

Data processing

      186       183  

Other

      759       650  

Total non-interest expense

      3,104       2,871  

Income before income taxes

      1,567       1,529  

Income taxes

      564       547  

Net income

    $ 1,003     $ 982  

NET INCOME PER COMMON SHARE (b)

     

Basic

    $ 0.17     $ 0.17  

Diluted

    $ 0.17     $ 0.16  

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (b)

     

Basic

      5,793,021       5,786,227  

Diluted

      6,025,727       6,010,819  

Return on average assets

      0.88 %     0.93 %

Return on average equity

      9.33 %     9.91 %

Net interest margin

      3.95 %     4.09 %

Allowance for loan losses to avg loans

      1.31 %     1.30 %

Nonperforming loans to total loans

      0.07 %     0.01 %

Nonperforming assets to total assets

      0.06 %     0.01 %

 

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     For the three-month period ended  
    

December 31,

2005

    

September 30,

2005

    

June 30,

2005

  
      

INTEREST INCOME

       

Loans

    $ 5,989     $ 5,466     $ 4,814  

Investment securities available for sale

      612       576       566  

Fed funds sold and other interest

      8       17       14  

Total Interest Income

      6,609       6,059       5,394  

INTEREST EXPENSE

       

Deposits

      2,077       1,841       1,619  

Short-term borrowings

      211       201       45  

Long-term debt

      383       369       405  

Total Interest Expense

      2,671       2,411       2,069  

Net Interest Income

      3,938       3,648       3,325  

Provision for loan losses

      60       240       303  

Net interest income after provision for loan losses

      3,878       3,408       3,022  

Non-interest income

       

Mortgage loan origination income

      186       237       159  

Service charges and fees on deposit accounts

      297       269       242  

Realized gain/loss on sale of securities

      —         (17 )     1  

Other

      192       125       181  

Total non-interest income

      675       614       583  

Non-interest expense

       

Salaries and employee benefits

      1,723       1,509       1,369  

Occupancy and equipment

      454       443       440  

Data processing

      170       162       162  

Other

      659       604       643  

Total non-interest expense

      3,006       2,718       2,614  

Income before income taxes

      1,547       1,304       991  

Income taxes

      542       459       338  

Net income

    $ 1,005     $ 845     $ 653  

NET INCOME PER COMMON SHARE (b)

       

Basic

    $ 0.19     $ 0.18     $ 0.14  

Diluted

    $ 0.18     $ 0.17     $ 0.13  

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (b)

       

Basic

      5,421,741       4,763,822       4,732,274  

Diluted

      5,656,219       5,042,051       5,024,364  

Return on average assets

      0.98 %     0.86 %     0.72 %

Return on average equity

      10.63 %     11.62 %     9.42 %

Net interest margin

      4.09 %     3.93 %     3.88 %

Allowance for loan losses to avg loans

      1.33 %     1.33 %     1.35 %

Nonperforming loans to total loans

      0.01 %     0.07 %     0.07 %

Nonperforming assets to total assets

      0.01 %     0.05 %     0.05 %
(a) Derived from audited consolidated financial statements.

 

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(b) Adjusted, where applicable, for the stock split effected as a 15% stock dividend paid on May 31, 2006 to stockholders of record on May 18, 2006.

SOURCE Crescent Financial Corporation

-0-                                                             07/17/2006

/CONTACT: Michael G. Carlton, President and CEO, or Bruce W. Elder, Vice President, of Crescent Financial Corporation, +1-919-460-7770/

/Web site: http://www.crescentstatebank.com/

(CRFN)

 

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