EX-99.1 2 d531050dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

PRESS RELEASE

For Immediate Release

Bank of the Carolinas Corporation Reports

First Quarter Financial Results

MOCKSVILLE, NORTH CAROLINA, April 26, 2013 - Bank of the Carolinas Corporation (OTCQB: BCAR) today reported financial results for the three-month period ended March 31, 2013.

For the three-month period ended March 31, 2013, the Company reported net income available to common shareholders of $191,000 as compared to net income of $551,000 for the fourth quarter of 2012 and a net loss of $2.7 million for the first quarter of 2012. Net income per diluted common share was $0.05 for the first quarter of 2013 compared with net income per share of $0.14 for the fourth quarter of 2012 and a net loss per share of $0.70 for the first quarter of 2012.

Results of operations were positive for the second consecutive quarter. The provision for loan losses recognizes a recovery of $1.1 million in the first quarter of 2013 compared to an expense of $1.3 million in the first quarter a year ago. Costs related to foreclosed real estate were $365,000 for the first quarter of 2013 as compared to $839,000 in the first quarter of 2012. For the first quarter of 2013, credit-related costs totaled a recovery of $995,000, or a 146.1% decrease over the previous year’s first quarter costs of $2.2 million.

The Company continues its progress in reducing the level of nonperforming assets. As of March 31, 2013, the Company’s nonperforming assets decreased to $7.8 million and amounted to 1.80% of total assets as compared to $12.7 million or 2.91% of total assets as of December 31, 2012 and compared to $23.4 million, or 4.88% of total assets as of March 31, 2012. The allowance for loan losses was 2.42% of total loans as of March 31, 2013. Net loan recoveries amounted to $754,000 for the first quarter of 2013, as compared to net loan recoveries of $77,000 in the fourth quarter of 2012 and net loan chargeoffs of $1.3 million in the first quarter of 2012.

The Company’s net interest margin was 2.74% in the first quarter of 2013, which is a decrease of 7 basis points from 2.81% in the first quarter of 2012. Noninterest expense for the three-month period, excluding the costs related to foreclosed real estate, decreased 15.4% versus the first quarter of 2012. The Company was able to reduce other noninterest expenses by closing its Cleveland, North Carolina branch in February 2013. Cost savings of $587,000 have been recognized in salary and benefits, occupancy and equipment, and consultant and legal fees.

Total assets at March 31, 2013 amounted to $432.2 million, a decrease of 9.9% when compared to $479.8 million as of March 31, 2012. Loans totaled $269.0 million at March 31, 2013, a decline of 9.2% from a year earlier, and deposits decreased 11.3% over the prior year to $366.5 million. The Company’s deposit mix has improved by decreasing non-core brokered deposits by $36.6 million, or 85.6%, since March 31, 2012.

The Company’s banking subsidiary had a Tier 1 leverage capital ratio and Tier 1 capital to risk-weighted assets ratio of 3.75% and 5.17% respectively, while its total capital to risk-weighted assets ratio was 6.43% as of March 31, 2013.


President and CEO, Stephen R. Talbert, said, “We are proud of the progress we have made and we will continue to work diligently for our shareholders.”

Bank of the Carolinas Corporation is the holding company for Bank of the Carolinas, a North Carolina chartered bank headquartered in Mocksville, NC with offices in Advance, Asheboro, Concord, Harrisburg, King, Landis, Lexington and Winston-Salem. The common stock of the Company is quoted under the symbol “BCAR” on the OTCQB marketplace operated by OTC Markets Group Inc.

For further information contact:

Stephen R. Talbert

President and Chief Executive Officer

Bank of the Carolinas Corporation

(336) 751-5755

 

 

DISCLOSURES ABOUT FORWARD LOOKING STATEMENTS

Statements in this press release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, expectations or beliefs about future events or results, and other statements that are not descriptions of historical facts, may be forward-looking statements as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors which include, but are not limited to, factors discussed in our Annual Report on Form 10-K and in other documents we file with the Securities and Exchange Commission from time to time. Copies of those reports are available directly through the SEC’s Internet website at www.sec.gov. Forward-looking statements may be identified by terms such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “feels,” “believes,” “estimates,” “predicts,” “forecasts,” “potential” or “continue,” or similar terms or the negative of these terms, or other statements concerning opinions or judgments of our management about future events. Factors that could influence the accuracy of forward-looking statements include, but are not limited to (a) pressures on our earnings, capital and liquidity resulting from current and future conditions in the credit and capital markets, (b) continued or unexpected increases in nonperforming loans and credit losses in our loan portfolio, (c) continued adverse conditions in the economy and in the real estate market in our banking markets (particularly those conditions that affect our loan portfolio, the abilities of our borrowers to repay their loans, and the values of collateral that secures our loans), (d) the financial success or changing strategies of our customers, (e) actions of government regulators, or change in laws, regulations or accounting standards, that adversely affect our business, (f) changes in the interest rate environment and the level of market interest rates that reduce our net interest margins and/or the values of loans we make and securities we hold, (g) changes in competitive pressures among depository and other financial institutions or in our ability to compete effectively against other financial institutions in our banking markets, and (h) other developments or changes in our business that we do not expect. Although we believe that the expectations reflected in the forward-looking statements included in this press release are reasonable, they represent our management’s judgments only as of the date they are made, and we cannot guarantee future results, levels of activity, performance or achievements. As a result, readers are cautioned not to place undue reliance on these forward-looking statements. All forward-looking statements attributable to us are expressly qualified in their entirety by the cautionary statements in this paragraph. We have no obligation, and do not intend, to update these forward-looking statements.


Bank of the Carolinas Corporation

Consolidated Balance Sheets

(In Thousands Except Share Data)

(Unaudited)

 

     March 31,  
     2013     2012  

Assets:

    

Cash and due from banks, noninterest-bearing

   $ 12,967      $ 4,674   

Temporary investments

     26,983        46,807   

Investment securities

     99,666        103,682   

Loans

     268,970        296,092   

Less, allowance for loan losses

     (6,498     (8,048
  

 

 

   

 

 

 

Total loans, net

     262,472        288,044   

Premises and equipment, net

     11,683        12,256   

Other real estate owned

     3,884        7,502   

Bank owned life insurance

     10,623        10,823   

Other assets

     3,905        5,970   
  

 

 

   

 

 

 

Total Assets

   $ 432,183      $ 479,758   
  

 

 

   

 

 

 

Liabilities:

    

Noninterest bearing demand deposits

   $ 34,211      $ 36,087   

Interest-checking deposits

     39,199        38,349   

Savings and money market deposits

     108,047        104,733   

Time deposits

     185,010        233,816   
  

 

 

   

 

 

 

Total deposits

     366,467        412,985   

Securities sold under repurchase agreements

     46,500        45,418   

Subordinated debt

     7,855        7,855   

Other liabilities

     2,096        1,947   
  

 

 

   

 

 

 

Total Liabilities

     422,918        468,205   
  

 

 

   

 

 

 

Shareholders’ Equity:

    

Preferred stock, no par value

     13,179        13,179   

Discount on preferred stock

     (341     (644

Common stock, $5 par value per share

     19,479        19,479   

Additional paid-in capital

     12,991        12,992   

Retained losses

     (36,392     (34,419

Accumulated other comprehensive income

     349        966   
  

 

 

   

 

 

 

Total Shareholders’ Equity

     9,265        11,553   
  

 

 

   

 

 

 

Total Liabilities and Shareholders’ Equity

   $ 432,183      $ 479,758   
  

 

 

   

 

 

 

Preferred shares authorized

     3,000,000        3,000,000   

Preferred shares issued and outstanding

     13,179        13,179   

Unaccrued preferred stock dividend

     1,400        741   

Common shares authorized

     15,000,000        15,000,000   

Common shares issued and outstanding

     3,895,840        3,895,840   

Book value per common share

   $ (1.36   $ (0.61
  

 

 

   

 

 

 


Bank of the Carolinas Corporation

Consolidated Statements of Income

(In Thousands Except Share Data)

(Unaudited)

 

     Three Months Ended
March 31,
 
     2013     2012  

Interest income

    

Interest and fees on loans

   $ 3,216      $ 3,786   

Interest on securities

     589        737   

Other interest income

     14        17   
  

 

 

   

 

 

 

Total interest income

     3,819        4,540   
  

 

 

   

 

 

 

Interest expense

    

Interest on deposits

     621        899   

Interest on borrowed funds

     557        564   
  

 

 

   

 

 

 

Total interest expense

     1,178        1,463   
  

 

 

   

 

 

 

Net interest income

     2,641        3,077   

Provision for loan losses

     (1,146     1,292   
  

 

 

   

 

 

 

Net interest income after provision for loan losses

     3,787        1,785   
  

 

 

   

 

 

 

Noninterest income

    

Customer service fees

     281        281   

Increase in value of bank owned life insurance

     87        91   

Gains on investment securities

     —          748   

Other income (loss)

     (2     7   
  

 

 

   

 

 

 

Total non-interest income

     366        1,127   
  

 

 

   

 

 

 

Noninterest expense

    

Salaries and benefits

     1,598        1,758   

Occupancy and equipment

     452        504   

FDIC insurance assessments

     367        418   

Data processing services

     269        239   

Valuation provisions and net operating costs associated with foreclosed real estate

     365        839   

Other

     668        1,262   
  

 

 

   

 

 

 

Total non-interest expense

     3,719        5,020   
  

 

 

   

 

 

 

Income (loss) before income taxes

     434        (2,108

Provision for Income taxes

     0        368   
  

 

 

   

 

 

 

Net income (loss)

     434        (2,476

Dividends and accretion on preferred stock

     (243     (237
  

 

 

   

 

 

 

Net income (loss) available to common shareholders

     191        (2,713
  

 

 

   

 

 

 

Income (loss) per common share:

    

Basic

   $ 0.05      $ (0.70
  

 

 

   

 

 

 

Diluted

   $ 0.05      $ (0.70
  

 

 

   

 

 

 


Bank of the Carolinas Corporation

Other Financial Data

(In Thousands Except Share Data)

(Unaudited)

 

     As of or for the  
     three months ended March 31,  
     2013     2012     Change*  

Average balance sheet data

      

Average loans

   $ 268,545      $ 302,002        (11.08 )% 

Average earning assets

     390,884        439,771        (11.12

Average total assets

     429,201        483,113        (11.16

Average common shareholders’ equity

     (4,560     235        (2,040.43

Average total shareholders’ equity

     8,619        13,414        (35.75

Period-end balance sheet data:

      

Total loans

   $ 268,970      $ 296,092        (9.16 )% 

Allowance for loan losses

     (6,498     (8,048     (19.26

Total assets

     432,183        479,758        (9.92

Total deposits

     366,467        412,985        (11.26

Common shareholders’ equity

     (3,914     (1,626     140.71   

Total shareholders’ equity

     9,265        11,553        (19.80

Asset quality indicators

      

Net loan charge-offs (recoveries)

   $ (754   $ 1,345        (156.06 )% 

Total nonperforming loans

     3,882        15,860        (75.52

Total nonperforming assets

     7,766        23,412        (66.83

Asset quality ratios

      

Net-chargeoffs (recoveries) to average loans **

     (1.14 )%      1.79     (293 ) BP 

Nonperforming loans to total loans

     1.44        5.36        (391

Nonperforming assets to total assets

     1.80        4.88        (308

Nonperforming assets to loan-related assets

     2.85        7.71        (486

Allowance for loan losses to total loans

     2.42        2.72        (30

Financial ratios

      

Return on average assets **

     0.41     (2.06 )%      247  BP 

Return on average common shareholders’ equity **

     N/M        N/M        N/M   

Net interest margin **

     2.74        2.81        (7

Per share amounts available to common shareholders

      

Basic earnings (loss) per common share

   $ 0.05      $ (0.70     107.04

Diluted earnings (loss) per common share

     0.05        (0.70     107.04   

Book value per common share

     (1.36     (0.61     124.50   

 

* BP denotes basis points. N/M denotes not meaningful.
** ratio annualized.