U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
| x | Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended September 30, 2004
| ¨ | Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period ended
Commission File Number 000-50128
BNC Bancorp
(Exact name of registrant as specified in its charter)
| North Carolina | 47-0898685 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| 831 Julian Avenue Thomasville, North Carolina |
27360 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code (336) 476-9200
Securities Registered Pursuant to Section 12(g) of the Exchange Act:
Common Stock, No Par Value
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
As of November 8, 2004, the registrant had outstanding 3,466,031 shares of Common Stock, no par value.
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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
| September 30, 2004 (Unaudited) |
December 31, 2003* |
|||||||
| (In Thousands) | ||||||||
| ASSETS |
||||||||
| Cash and due from banks |
$ | 10,544 | $ | 8,638 | ||||
| Interest-earning balances at the Federal Home Loan Bank |
16,049 | 2,726 | ||||||
| Securities available for sale |
34,341 | 31,671 | ||||||
| Federal Home Loan Bank stock, at cost |
2,045 | 1,845 | ||||||
| Loans held for sale |
499 | 992 | ||||||
| Loans |
393,391 | 303,732 | ||||||
| Less allowance for loan losses |
(5,122 | ) | (4,598 | ) | ||||
| Net loans |
388,269 | 299,134 | ||||||
| Accrued interest receivable |
1,801 | 1,504 | ||||||
| Premises and equipment, net |
10,852 | 9,755 | ||||||
| Investment in life insurance |
11,900 | 9,009 | ||||||
| Goodwill |
3,423 | 3,423 | ||||||
| Other assets |
4,372 | 3,584 | ||||||
| TOTAL ASSETS |
$ | 484,095 | $ | 372,281 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Deposits: |
||||||||
| Non-interest bearing demand |
$ | 34,646 | $ | 30,090 | ||||
| Interest-bearing demand |
143,668 | 143,411 | ||||||
| Savings |
11,117 | 9,976 | ||||||
| Time deposits of $100,000 and greater |
130,747 | 51,267 | ||||||
| Other time |
69,926 | 61,998 | ||||||
| Total deposits |
390,104 | 296,742 | ||||||
| Short-term borrowings |
17,213 | 12,535 | ||||||
| Long-term debt |
45,496 | 34,000 | ||||||
| Accrued expenses and other liabilities |
2,595 | 2,511 | ||||||
| TOTAL LIABILITIES |
455,408 | 345,788 | ||||||
| Shareholders’ Equity: |
||||||||
| Common stock, no par value; authorized 80,000,000 shares; 3,466,031 and 3,492,035 issued and outstanding at September 30, 2004 and December 31, 2003, respectively |
20,226 | 20,725 | ||||||
| Retained earnings |
8,143 | 5,442 | ||||||
| Accumulated other comprehensive income |
318 | 326 | ||||||
| TOTAL SHAREHOLDERS’ EQUITY |
28,687 | 26,493 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ | 484,095 | $ | 372,281 | ||||
| * | Derived from audited consolidated financial statements. |
See accompanying notes.
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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||||||
| 2004 |
2003 |
2004 |
2003 | |||||||||
| (Amounts in thousands, except per share data) | ||||||||||||
| INTEREST INCOME |
||||||||||||
| Interest and fees on loans |
$ | 5,627 | $ | 4,143 | $ | 15,324 | $ | 12,216 | ||||
| Interest on U.S. Treasury and agency securities |
23 | 57 | 89 | 217 | ||||||||
| Interest on state and municipal securities |
353 | 270 | 964 | 713 | ||||||||
| Other interest income |
52 | 31 | 117 | 137 | ||||||||
| TOTAL INTEREST INCOME |
6,055 | 4,501 | 16,494 | 13,283 | ||||||||
| INTEREST EXPENSE |
||||||||||||
| Interest on demand deposits |
548 | 484 | 1,627 | 1,494 | ||||||||
| Interest on savings deposits |
5 | 5 | 15 | 22 | ||||||||
| Interest on time deposits of $100,000 and greater |
741 | 205 | 1,649 | 505 | ||||||||
| Interest on other time deposits |
340 | 413 | 918 | 1,645 | ||||||||
| Interest on short-term borrowings |
8 | 13 | 97 | 37 | ||||||||
| Interest on long-term debt |
502 | 326 | 1,295 | 865 | ||||||||
| TOTAL INTEREST EXPENSE |
2,144 | 1,446 | 5,601 | 4,568 | ||||||||
| NET INTEREST INCOME |
3,911 | 3,055 | 10,893 | 8,715 | ||||||||
| PROVISION FOR LOAN LOSSES |
280 | 140 | 630 | 390 | ||||||||
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |
3,631 | 2,915 | 10,263 | 8,325 | ||||||||
| NON-INTEREST INCOME |
||||||||||||
| Mortgage fee income |
128 | 404 | 422 | 1,192 | ||||||||
| Service charges on deposit accounts |
440 | 397 | 1,202 | 1,070 | ||||||||
| Investment brokerage fees |
61 | 34 | 228 | 127 | ||||||||
| Increase in cash surrender value of life insurance |
118 | 98 | 311 | 253 | ||||||||
| Gain (loss) on sale of investments available for sale |
138 | — | 138 | — | ||||||||
| Other income |
— | 17 | 13 | 57 | ||||||||
| TOTAL NON-INTEREST INCOME |
885 | 950 | 2,314 | 2,699 | ||||||||
| NON-INTEREST EXPENSE |
||||||||||||
| Salaries and employee benefits |
1,692 | 1,493 | 4,953 | 4,419 | ||||||||
| Occupancy expenses |
160 | 176 | 480 | 436 | ||||||||
| Furniture and equipment expense |
192 | 150 | 517 | 406 | ||||||||
| Data processing and supply expense |
130 | 53 | 526 | 216 | ||||||||
| Advertising and business development expenses |
106 | 112 | 278 | 282 | ||||||||
| Insurance, professional and other services |
218 | 254 | 704 | 821 | ||||||||
| Other operating expenses |
566 | 327 | 1,318 | 847 | ||||||||
| TOTAL NON-INTEREST EXPENSE |
3,064 | 2,565 | 8,776 | 7,427 | ||||||||
| INCOME BEFORE INCOME TAX EXPENSE |
1,452 | 1,300 | 3,801 | 3,597 | ||||||||
| INCOME TAX EXPENSE |
418 | 387 | 1,088 | 1,122 | ||||||||
| NET INCOME |
$ | 1,034 | $ | 913 | $ | 2,713 | $ | 2,475 | ||||
| BASIC NET INCOME PER SHARE |
$ | .30 | $ | .26 | $ | .78 | $ | .70 | ||||
| DILUTED NET INCOME PER SHARE |
$ | .28 | $ | .24 | $ | .73 | $ | .66 | ||||
See accompanying notes.
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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
| Nine Months Ended September 30, |
||||||||
| 2004 |
2003 |
|||||||
| (Amounts in thousands) | ||||||||
| Operating Activities |
||||||||
| Net income |
$ | 2,713 | $ | 2,475 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
504 | 489 | ||||||
| Amortization of premiums and discounts, net |
180 | (335 | ) | |||||
| Amortization of core deposit intangible |
19 | 29 | ||||||
| Provision for loan losses |
630 | 390 | ||||||
| Net increase in cash surrender value of life insurance |
(311 | ) | (253 | ) | ||||
| Gain on sales of securities available for sale |
(138 | ) | — | |||||
| Loss on sales of foreclosed assets |
76 | — | ||||||
| Changes in assets and liabilities: |
||||||||
| Decrease in loans held for sale |
493 | 5,637 | ||||||
| (Increase) decrease in accrued interest receivable |
(297 | ) | 81 | |||||
| Increase in other assets |
(478 | ) | (505 | ) | ||||
| Increase in accrued expenses and other liabilities |
577 | 206 | ||||||
| Net cash provided by operating activities |
3,968 | 8,214 | ||||||
| Investing Activities |
||||||||
| Purchases of securities available for sale and Federal Home Loan Bank stock |
(10,067 | ) | (10,792 | ) | ||||
| Proceeds from calls and maturities of securities available for sale |
3,115 | 4,038 | ||||||
| Proceeds from sales of securities available for sale |
4,028 | — | ||||||
| Investment in life insurance |
(2,580 | ) | (3,070 | ) | ||||
| Net increase in loans |
(90,857 | ) | (38,908 | ) | ||||
| Purchase of premises and equipment |
(1,601 | ) | (2,319 | ) | ||||
| Proceeds from sales of foreclosed assets |
1,183 | 143 | ||||||
| Net cash used by investing activities |
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