Select Bancorp Reports Third Quarter 2016 Earnings

DUNN, N.C., Nov. 03, 2016 -- Select Bancorp, Inc. (the “Company” (NASDAQ:SLCT), the holding company for Select Bank & Trust, reported net income for the quarter ended September 30, 2016 of $1.7 million compared to $1.4 million for the same period in 2015. Basic and diluted earnings per share for the third quarter were $0.15, compared to basic and diluted earnings per share for the third quarter 2015 of $0.12.

For the nine months ended September 30, 2016, net income for the Company was $5.1 million compared to $4.9 million for the same period in 2015. Basic and diluted earnings per share for the first nine months of 2016 were $0.44, compared to basic and diluted earnings per share for the first nine months of 2015 of $0.42.

As of September 30, 2016, the Company reported total assets of $844.8 million compared to $786.5 million at September 30, 2015, an increase of 10.4%. Total deposits were $677.1 million and total net loans were $643.9 million at the end of the third quarter 2016, compared to total deposits of $619.9 million and total net loans of $590.9 million as of the end of the third quarter 2015, increases of 9.2% and 9.0% respectively.

Return on average assets was 0.85% and return on average equity was 6.71% for the third quarter of 2016, compared to 0.69% and 5.21%, respectively, for the same quarter ended September 30, 2015.

Non-performing loans were $7.6 million and $10.9 million at September 30, 2016 and September 30, 2015, respectively. Non-performing loans equaled 1.16% of total loans at September 30, 2016, decreasing from 1.82% of total loans at September 30, 2015. Foreclosed real estate equaled $548,000 at September 30, 2016, compared to $1.0 million at September 30, 2015. For the third quarter 2016, net recoveries were ($22,000), or (0.01%), of average loans, compared to net charge-offs of $204,000, or 0.14% of average loans in the third quarter 2015. At September 30, 2016, the allowance for loan losses was $7.9 million, or 1.21% of total loans, as compared to $7.0 million or 1.18% of total loans at September 30, 2015.

Net interest margin was 4.27% for the quarter ending September 30, 2016, as compared to 4.34% for the quarter ended September 30, 2015.

“The third quarter of 2016 was a very good quarter for Select Bancorp as net income increased 28.7% over the third quarter of 2015,” President and CEO William L. Hedgepeth II said. “During the third quarter we celebrated the grand opening of our new office space in Raleigh.” The Company relocated its Raleigh branch to 4505 Falls of Neuse Road on August 1 and celebrated a grand opening with the Raleigh Chamber of Commerce on August 24. The new branch is conveniently located just north of the beltline past Wake Forest Road.

Select Bank & Trust maintained the number one position in deposit market share in Dunn, our headquarters city, and the number two position in Harnett County, for the 14^th consecutive year.

“We are very proud of our performance this year,” said Hedgepeth. “We continue to enhance and improve our product and service offerings as well as our operations area. We believe that is evident by our success over the last few quarters. That success has allowed us to be able to attract experienced and knowledgeable personnel to Select Bank & Trust. We believe in doing business the old-fashioned way, through ‘common sense’ banking, hard work and providing great service to our customers and prospects.”

Select Bank & Trust has branch offices in these North Carolina communities: Dunn, Burlington, Clinton, Elizabeth City, Fayetteville, Goldsboro, Greenville, Leland, Lillington, Lumberton, Morehead City, Raleigh and Washington.

The information as of and for the quarter ended September 30, 2016, as presented is unaudited. This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of our goals and expectations with respect to earnings, earnings per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (ii) statements preceded by, followed by or that include the words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “projects,” “outlook” or similar expressions. The actual results might differ materially from those projected in the forward-looking statements for various reasons, including, but not limited to, our ability to manage growth, substantial changes in financial markets, regulatory changes, changes in interest rates, loss of deposits and loan demand to other savings and financial institutions, and changes in real estate values and the real estate market. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the Company’s SEC filings, including its periodic reports under the Securities Exchange Act of 1934, as amended, copies of which are available upon request from the Company. Except as required by law, the Company assumes no obligation to update the forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.


Select Bancorp, Inc
Selected Financial Information and Other Data
($ in thousands, except per share data)

	At or for the three months ended															At or for the twelve months ended
	September			June			March			December			September			December			December			December
	30,			30,			31,			31,			30,			31,			31,			31,
	2016			2016			2016			2015			2015			2015			2014			2013
Summary of Operations:
Total interest income	$	8,755		$	8,645		$	8,432		$	8,425		$	8,412		$	33,341		$	26,104		$	22,903
Total interest expense		909			912			927			890			878			3,542			4,519			5,258
Net interest income		7,846			7,733			7,505			7,535			7,534			29,799			21,585			17,645
Provision for (recovery of) loan losses		337			158			352			506			393			890			(194	)		(325	)
Net interest income after provision		7,509			7,575			7,153			7,029			7,141			28,909			21,779			17,970
Noninterest income		785			831			866			916			572			3,292			2,675			2,629
Merger/Acquisition related expenses		-			-			-			240			103			378			1,941			-
Noninterest expense		5,631			5,519			5,620			5,497			5,467			21,852			18,719			15,855
Income before income taxes		2,887			2,887			2,399			2,208			2,143			9,971			3,794			4,744
Provision for income taxes		924			980			896			570			792			3,418			1,437			1,803
Net Income		1,739			1,907			1,503			1,638			1,351			6,553			2,357			2,941
Dividends on Preferred Stock		-			-			4			20			19			77			38			-
Net income available to common shareholders	$	1,739		$	1,907		$	1,499		$	1,618		$	1,332		$	6,476		$	2,319		$	2,941

Share and Per Share Data:
Earnings per share - basic	$	0.15		$	0.16		$	0.13		$	0.14		$	0.12		$	0.56		$	0.26		$	0.43
Earnings per share - diluted	$	0.15		$	0.16		$	0.13		$	0.14		$	0.12		$	0.56		$	0.26		$	0.43
Book value per share	$	8.87		$	8.74		$	8.56		$	8.38		$	8.28		$	8.38		$	8.59		$	8.09
Tangible book value per share	$	8.20		$	8.05		$	7.87		$	7.67		$	7.58		$	7.67		$	7.83		$	8.07
Ending shares outstanding		11,632,192			11,619,184			11,584,011			11,583,011			11,577,111			11,583,011			11,377,980			6,921,352
Weighted average shares outstanding:
Basic		11,627,270			11,594,995			11,583,440			11,580,745			11,521,043			11,502,800			8,870,114			6,918,814
Diluted		11,666,280			11,642,726			11,626,609			11,627,974			11,582,724			11,567,811			8,974,384			6,919,760

Selected Performance Ratios:
Return on average assets⁽²⁾		0.85	%		0.93	%		0.73	%		0.82	%		0.69	%		0.86	%		0.37	%		0.53	%
Return on average equity⁽²⁾		6.71	%		7.62	%		6.03	%		6.20	%		5.21	%		6.42	%		3.12	%		5.28	%
Net interest margin		4.27	%		4.24	%		4.14	%		4.18	%		4.34	%		4.38	%		3.88	%		3.46	%
Efficiency ratio ⁽¹⁾		65.24	%		64.44	%		67.14	%		65.05	%		67.44	%		66.04	%		77.16	%		78.20	%

Period End Balance Sheet Data:
Gross Loans	$	651,743		$	632,187		$	629,619		$	617,398		$	597,969		$	617,398		$	552,038		$	346,500
Total Earning Assets		746,349			749,956			753,726			726,408			711,622			726,408			698,266			483,054
Goodwill		6,931			6,931			6,931			6,931			6,931			6,931			6,931			-
Core Deposit Intangible		909			1,014			1,125			1,241			1,196			1,241			1,625			182
Total Assets		844,774			826,588			830,395			817,015			786,495			817,015			766,121			525,646
Deposits		677,121			661,274			667,654			651,161			619,935			651,161			618,902			448,458
Short term debt		38,175			40,714			32,218			24,594			30,722			24,594			20,733			6,305
Long term debt		22,372			18,205			28,559			33,782			28,846			33,782			25,591			12,372
Shareholders' equity		103,191			101,531			99,210			104,702			103,545			104,702			97,685			56,004

Selected Average Balances:
Gross Loans	$	641,531		$	629,333		$	623,286		$	601,966		$	585,541		$	578,759		$	430,571		$	354,871
Total Earning Assets		737,295			739,002			734,859			714,755			689,166			686,663			565,264			511,597
Core Deposit Intangible		965			1,072			1,186			1,139			1,251			1,330			884			237
Total Assets		818,284			822,036			832,738			796,414			771,913			765,284			631,905			555,354
Deposits		653,016			658,476			672,151			631,855			607,722			607,214			523,954			470,526
Short term debt		34,982			37,883			36,039			35,303			35,012			32,316			9,957			13,879
Long term debt		22,780			20,772			20,822			20,872			22,631			20,147			20,494			12,372
Shareholders' equity		103,026			100,664			100,312			104,732			102,879			102,068			74,365			55,701

Asset Quality Ratios:
Nonperforming loans	$	7,565		$	8,788		$	8,750		$	8,280		$	10,899		$	8,280		$	11,876		$	15,856
Other real estate owned		548			716			1,888			1,401			1,007			1,401			1,585			2,008
Allowance for loan losses		7,889			7,692			7,527			7,021			7,032			7,021			6,844			7,054
Nonperforming loans ⁽³⁾ to period-end loans		1.16	%		1.39	%		1.39	%		1.34	%		1.82	%		1.34	%		2.15	%		4.58	%
Allowance for loan losses to period-end loans		1.21	%		1.22	%		1.20	%		1.14	%		1.18	%		1.14	%		1.24	%		2.04	%
Delinquency Ratio ⁽⁴⁾		0.16	%		0.23	%		0.45	%		0.41	%		0.36	%		0.41	%		0.91	%		0.25	%
Net loan charge-offs (recoveries) to average loans		-0.01	%		0.00	%		-0.10	%		0.34	%		0.14	%		0.12	%		-0.03	%		0.15	%

(1) Efficiency ratio is calculated as non-interest expenses divided by the sum of net interest income and non-interest income.
(2) Annualized.
(3) Nonperforming loans consist of non-accrual loans and restructured loans.
(4) Delinquency Ratio includes loans 30-89 days past due and excludes non-accrual loans.

Mark A. Jeffries
Executive Vice President
Chief Financial Officer 
Office: 910-892-7080 and Direct: 910-897-3603
[email protected]
SelectBank.com

Select Bancorp Reports Third Quarter 2016 Earnings

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