MOCKSVILLE, N.C., Feb. 11 /PRNewswire-FirstCall/ -- Bank of the
Carolinas Corporation (NASDAQ:BCAR) reported today financial
results for the three-month period and year ended December 31,
2009. For the three-month period ended December 31, 2009, the
Company incurred a net loss of $1,778,000, as compared to a net
loss of $640,000 in the fourth quarter of 2008. The net loss
available to common shareholders for the three months ended
December 31, 2009 was $2,004,000, or $.51 per common share,
compared to a net loss per share of $.16 in the final quarter of
2008. For the year ended December 31, 2009, the Company reported a
net loss of $3,130,000 compared to a net loss of $3,624,000 for
2008. The net loss available to common shareholders for 2009 was
$3,767,000, or $.97 per common share, compared to a net loss of
$.92 for 2008. The economic downturn, which began in late 2007,
continues to adversely affect the Company's operating results
manifested by much higher than normal loan loss provisions and
costs associated with foreclosed real estate for the second
consecutive year. These costs were partially mitigated in the 2009
calendar year by improved interest margins, driven by lower funding
costs, and gains from sales of securities. Net interest income, the
Company's principal source of revenue, totaled $4.4 million in the
fourth quarter of 2009, a 33.1% increase from the comparable 2008
quarter. For the year of 2009 net interest income was $14.7
million, a 15.6% increase over 2008. These positive results were
due to increased interest margins principally brought about by
reduced cost of interest-bearing deposits. As of December 31, 2009,
the Company's nonperforming assets totaled $17.4 million and
consisted of $9.2 million in nonperforming loans and $8.2 million
in foreclosed properties and other real estate owned. Nonperforming
assets amounted to 2.86% of total assets at that date. The year-end
2009 level compares to nonperforming assets totaling $15.5, or
2.33% of total assets as of September 30, 2009 and $12.3 million,
or 2.20% of total assets at December 31, 2008. The provision for
loan losses totaled $3,081,000 for the quarter ended December 31,
2009, an increase of 50.6% from the provision of $2,046,000 for the
fourth quarter of 2008. For the year ended December 31, 2009, the
loan loss provision totaled $5,547,000, a decline of 11.8% from the
$6,291,000 provision recorded in 2008. The allowance for loan
losses was 2.09% of total loans as of December 31, 2009, and net
charge-offs for the current year represented .92% of average loans
outstanding. While we and the banking industry as a whole continue
to face credit challenges, as always, we remain committed to
helping our customers weather the current economic storm to the
best of our ability while being aggressive in identifying troubled
assets in our portfolio. Noninterest expenses totaled $4.7 million
for the fourth quarter of 2009, an increase of 9.1% from the
comparable quarter of 2008. For the year ended December 31, 2009,
noninterest expenses totaled $17.5 million, an increase of 15.8%
from 2008. The most significant drivers in the cost increase for
2009 were substantially higher costs related to FDIC insurance due
to the increased assessment rate levied on all banks, significantly
higher costs related to ownership and disposal of other real
estate, and substantial increases in expenses for data processing
and professional services. Offsetting a portion of the above
described increases in 2009 noninterest expenses was the absence of
any goodwill impairment charge, which amounted to $591,000 in 2008.
Noninterest income, exclusive of securities gains, remained
relatively flat for the fourth quarter and full year of 2009
compared to 2008. Total assets at December 31, 2009 amounted to
$610.4 million, an increase of 8.6% when compared to the $562.0
million as of December 31, 2008. Loans totaled $391.3 million at
December 31, 2009, a decline of 3.5% from a year earlier while
deposits grew 11.1% over the prior year to $493.9 million. The
Company continues to be well-capitalized with a Tier 1 Leverage
Ratio of 7.27%, a Tier 1 capital to risk-weighted assets ratio of
9.86% and a Total Capital to risk-weighted assets ratio of 11.67%
as of December 31, 2009. 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, Cleveland, Concord, Harrisburg, King, Landis,
Lexington and Winston-Salem. Common stock of the Company is traded
on the NASDAQ Global Market under the symbol BCAR. For further
information contact: Michael D. Larrowe Chief Financial Officer
Bank of the Carolinas (336) 998-1799 x 171 DISCLOSURES ABOUT
FORWARD LOOKING STATEMENTS This press release may contain
statements relating to our financial condition, results of
operations, plans, strategies, 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. Those statements, may be
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Forward-looking statements may be identified by terms
such as "may," "will," "should," "could," "expects," "plans,"
"intends," "anticipates," "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. Forward-looking
information is inherently subject to risks and uncertainties, and
our actual results could differ materially from those currently
anticipated due to a number of factors, which include, but are not
limited to, risk 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 Commission's website at
http://www.sec.gov/. Other factors that could influence the
accuracy of forward-looking statements include, but are not limited
to, (a) pressures on the earnings, capital and liquidity of
financial institutions resulting from current and future adverse
conditions in the credit and equity markets and the banking
industry in general; (b) changes in competitive pressures among
depository and other financial institutions or in our ability to
compete successfully against the larger financial institutions in
our banking markets; (c) the financial success or changing
strategies of our customers; (d) actions of government regulators,
or changes in laws, regulations or accounting standards, that
adversely affect our business; (e) changes in the interest rate
environment and the level of market interest rates that reduce our
net interest margins and/or the volumes and values of loans we make
and securities we hold; (f) changes in general economic or business
conditions and real estate values in our banking markets
(particularly changes that affect our loan portfolio, the abilities
of our borrowers to repay their loans, and the values of loan
collateral); and (g) other developments or changes in our business
that we do not expect. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. 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 we do not intend, to
update these forward-looking statements. Bank of the Carolinas
Corporation Consolidated Balance Sheets (In thousands except share
data) (Unaudited) December 31, ------------ 2009 2008 ---- ----
Assets: Cash and due from banks, noninterest-bearing $3,524 $8,271
Temporary investments 33,835 2,220 Investment securities 140,004
113,139 Loans 391,265 405,402 Less, allowance for loan losses
(8,167) (6,308) ------ ------ Total loans, net 383,098 399,094
Premises and equipment, net 14,010 15,324 Other real estate owned
8,233 5,622 Bank owned life insurance 10,010 9,645 Accrued interest
receivable 2,397 3,039 Other assets 15,276 5,653 ------ ----- Total
Assets $610,387 $562,007 ======== ======== Liabilities: Noninterest
bearing demand deposits $36,418 $27,507 Interest bearing demand
deposits 34,614 28,172 Savings deposits 11,042 21,903 Money Market
deposits 224,499 210,379 Time deposits 187,344 156,579 -------
------- Total deposits 493,917 444,540 Securities sold under
repurchase agreements 46,682 46,557 Federal home loan bank advances
15,000 25,000 Subordinated debt 7,855 7,855 Other liabilities 1,941
1,464 ----- ----- Total Liabilities 565,395 525,416 ------- -------
Shareholders' Equity: Preferred stock, no par value 13,179 -
Discount on preferred stock (1,245) - Common stock, $5 par value
per share 19,486 19,456 Additional paid-In capital 12,978 11,625
Retained earnings 300 4,067 Accumulated other comprehensive income
294 1,443 --- ----- Total Shareholders' Equity 44,992 36,591 ------
------ Total Liabilities and Shareholders' Equity $610,387 $562,007
======== ======== Preferred shares authorized 3,000,000 3,000,000
Preferred shares issued and outstanding 13,179 - Common shares
authorized 15,000,000 15,000,000 Common shares issued and
outstanding 3,897,174 3,891,174 Book value per common share $8.16
$9.40 ===== ===== Bank of the Carolinas Corporation Consolidated
Statements of Income (In thousands except share and per share data)
(Unaudited) Three months ended Year ended December 31 December 31
--------------------- ------------------- 2009 2008 2009 2008 ----
---- ---- ---- Interest income Interest and fees on loans $5,781
$6,314 $23,685 $26,276 Interest on securities 1,321 1,453 5,860
4,091 Other interest income 20 27 76 208 --- --- --- --- Total
interest income 7,122 7,794 29,621 30,575 ----- ----- ------ ------
Interest expense Interest on deposits 2,025 3,661 11,868 15,619
Interest on borrowed funds 723 847 3,087 2,265 --- --- ----- -----
Total interest expense 2,748 4,508 14,955 17,884 ----- ----- ------
------ Net interest income 4,374 3,286 14,666 12,691 Provision for
loan Losses 3,081 2,046 5,547 6,291 ----- ----- ----- ----- Net
interest income after provision for loan losses 1,293 1,240 9,119
6,400 ----- ----- ----- ----- Noninterest income Customer service
charges and fees 316 308 1,335 1,413 Increase in cash value of life
insurance 93 89 365 362 Gains on securities, net 189 615 1,530 615
Other income 36 8 67 70 --- --- --- --- Total noninterest income
634 1,020 3,297 2,460 --- ----- ----- ----- Noninterest expense
Salaries and benefits 2,081 1,725 7,040 7,054 Occupancy and
equipment 574 539 2,221 2,021 FDIC insurance expense 573 87 1,505
327 Valuation provisions and net operating costs associated with
foreclosed real estate 140 902 1,899 1,117 Goodwill impairment
charge - - - 591 Data processing expense 257 200 1,042 843 Other
noninterest expenses 1,072 853 3,807 3,165 ----- --- ----- -----
Total noninterest expenses 4,697 4,306 17,514 15,118 ----- -----
------ ------ Income (loss) before income taxes (2,770) (2,046)
(5,098) (6,258) Provision for income Taxes (992) (1,406) (1,968)
(2,634) ---- ------ ------ ------ Net income (loss) $(1,778) $(640)
$(3,130) $(3,624) Dividends and accretion on preferred stock (226)
- (637) - ---- --- ---- --- Net income (loss) available to common
shareholders $(2,004) $(640) $(3,767) $(3,624) ======= =====
======= ======= Earnings (loss) per common share: Basic $(0.51)
$(0.16) $(0.97) $(0.92) Diluted $(0.51) $(0.16) $(0.97) $(0.92)
Weighted Average Common Shares Outstanding: Basic 3,897,174
3,891,174 3,894,314 3,928,911 Diluted 3,897,174 3,891,174 3,894,314
3,928,911 Bank of the Carolinas Corporation Other Financial Data
(Dollars in thousands except per share data) As of or for the As of
or for the three months ended year ended December 31 December 31
------------------------ ----------------------- 2009 2008 Change*
2009 2008 Change* ---- ---- ------- ---- ---- ------- Average
balance sheet data Average Loans $391,574 $407,178 (3.83)% $401,511
$405,951 (1.09)% Average earning assets 592,150 523,731 13.06
573,018 496,308 15.46 Average total assets 641,095 564,883 13.49
624,508 534,233 16.90 Average common shareholders' equity $34,669
$36,901 (6.05)% $35,625 $37,806 (5.77)% Financial ratios Return on
average assets** (1.10)% (0.45)% (65) bps (0.50) (0.68)% 18 bps
Return on average common shareholders' equity ** (22.93) (6.90)
(1,603) (10.57) (9.59) (98) Net interest margin ** 2.93% 2.50% 43
bps 2.56 2.56% - bps Asset quality indicators Net loan charge-offs
$1,111 $(44) n/m % 3,688 4,228 (12.77)% Total nonperforming loans
9,224 6,717 37.32 9,224 6,717 37.32 Total nonperforming assets
$17,457 $12,339 41.48% 17,457 12,339 41.48% Asset quality ratios
Net charge offs (recoveries) to average loans ** 1.13% (0.04)% 117
bps 0.92% 1.04% (12) bps Nonperforming loans to total loans 2.36
1.66 70 2.36 1.66 70 Nonperforming assets to total assets 2.86 2.20
66 2.86 2.20 66 Allowance for loan losses to total loans 2.09%
1.56% 53 bps 2.09% 1.56% 53 bps Per share amounts available to
common shareholders Basic earnings (loss) per common share $(0.51)
$(0.16) (218.75)% $(0.97) $(0.92) (5.43)% Diluted earnings (loss)
per common share (0.51) (0.16) (218.75) $(0.97) $(0.92) (5.43) Book
value per common share $8.16 $9.40 (13.19)% $8.16 $9.40 (13.19)% *
bps denotes basis points. ** ratio annualized. DATASOURCE: Bank of
the Carolinas Corporation CONTACT: Michael D. Larrowe, Chief
Financial Officer, Bank of the Carolinas, +1-336-998-1799 x 171
Copyright