NORTH STATE BANCORP 
By RALEIGH, N.C., July 16 /PRNewswire-FirstCall/ -- (OTC Bulletin Board: NSBC), the holding company for North State Bank, reported net income for the second quarter 2009 of $493,000, which is 23.3% or $150,000 less than the $ North State Bancorp 643,000 reported for the second quarter 2008. These earnings reflect diluted earnings per share of $.07 for the second quarter 2009 compared to $.09 for the second quarter 2008. For the six months ended June 30, 2009, net income was $1,326,000, an increase of $54,000 or 4.2% over net income of $1,272,000 reported for the six months ended June 30, 2008. These earnings reflect diluted earnings per share of $0.18 for the six months ended June 30, 2009, compared to $0.17 for the same period in 2008.
Lower earnings for the second quarter 2009 when compared to the second quarter 2008 are primarily the result of the Federal Deposit Insurance Corporation's (FDIC) recent base assessment increase in insurance premiums, as well as a special assessment of five basis points that was levied against all banks in June 2009. For North State Bank, the second quarter 2009 FDIC premiums were 627% or $520,000 higher than second quarter 2008. Additionally, the Company increased its provision for loan losses by $228,000, or 34.0%, to reserve against probable loan losses.
At June 30, 2009, total assets were $711.2 million, total deposits were $633.2 million, and total loans were $549.4 million, increases of 12.5%, 19.4%, and 2.8%, respectively, to the same balances reported at June 30, 2008.
In comments related to the quarterly and year-to-date results, North State Bancorp President and CEO Larry Barbour stated, "These continue to be challenging times. Second quarter 2009 would have shown better results for our Company had it not been for the increased FDIC premiums and an increase in loan loss provision--both driven by the current economic issues we are all facing. Without the combined effect of these two items, core pre-tax earnings grew 55.3%, or $567,000, over second quarter 2008. While it was prudent to increase our loan loss provision, we are pleased to report that we continue to maintain a quality loan portfolio with lower charge-offs than those reported by our peer banks.
"I am particularly pleased with core deposit growth in 2009. Through June 30, 2009, we have grown core deposits by more than $35.0 million, and continue to have one of the highest levels of demand deposits in North Carolina--14% of total deposits at quarter end.
"While loan demand has been somewhat soft, we believe we have good liquidity and we are still in the business of making loans to our new and existing customers. Focusing on chosen niches of customers--professionals and their firms (specifically physicians, dentists, attorneys, and accountants), churches, community association management companies, nonprofit organizations, and individuals who value a mutually beneficial banking relationship--is the best way for our Company to thrive in an improving economy. We deliver unique value and competitive advantages to these customers, while growing our bank soundly and profitably. By so doing, we always strive to ensure the safety of our depositors and to provide a good return on investment to our shareholders."
Founded in 2000, North State Bank is a full-service community bank, serving Wake and New Hanover Counties through seven full-service offices and with one loan production office in Carteret County.
North State Bancorp is listed on the OTC electronic bulletin board under the symbol "NSBC."
www.northstatebank.com
This news release contains forward-looking statements. The actual results might differ materially from those projected in the forward-looking statements for various reasons, including regulatory changes and increased deposit insurance assessments, economic conditions, changes in interest rates, substantial changes in financial markets, changes in real estate values and the real estate market, our ability to manage growth, loss of deposits and loan demand to other savings and financial institutions and our limited operating history. 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 and at www.northstatebank.com.
North State Bancorp
Selected Financial Information and Other Data (Unaudited)
At or for the Three At or for the Six
Months Ended Months Ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
(Dollars in thousands, except per share)
Earnings Summary:
Total interest
income $8,512 $8,843 $17,108 $17,831
Total interest
expense 3,110 3,652 6,593 7,797
----- ----- ----- -----
Net interest
income 5,402 5,191 10,515 10,034
Provision for
loan losses 899 671 1,784 1,097
--- --- ----- -----
Net interest
income after
provision for
loan losses 4,503 4,520 8,731 8,937
Noninterest income 123 321 811 624
Noninterest expense 3,782 3,816 7,302 7,539
----- ----- ----- -----
Income before
income taxes 844 1,025 2,240 2,022
Income taxes 351 382 914 750
--- --- --- ---
Net income $493 $643 $1,326 $1,272
==== ==== ====== ======
Share and Per Share
Data:
Earnings per
share - basic $0.07 $0.09 $0.19 $0.18
Earnings per
share - diluted $0.07 $0.09 $0.18 $0.17
Book value per
share $5.06 $4.71 $5.06 $4.71
Weighted average
Shares
outstanding:
Basic 7,177,612 7,162,062 7,176,022 7,150,374
Diluted 7,304,274 7,366,688 7,314,892 7,354,996
Financial Condition
Period End:
Cash, federal
funds sold and
due from banks $115,330 $57,166 $115,330 $57,166
Investment
securities 27,048 26,996 27,048 26,996
Loans 549,442 534,595 549,442 534,595
Less allowance
for loan losses 7,359 5,321 7,359 5,321
Other assets 26,696 18,737 26,696 18,737
------ ------ ------ ------
Total assets $711,157 $632,173 $711,157 $632,173
======== ======== ======== ========
Deposits $633,208 $530,355 $633,208 $530,355
Other borrowings 36,940 58,060 36,940 58,060
Other liabilities 4,717 10,025 4,717 10,025
Shareholders'
equity 36,292 33,733 36,292 33,733
------ ------ ------ ------
Total
liabilities
and
shareholders'
equity $711,157 $632,173 $711,157 $632,173
======== ======== ======== ========
Financial Condition
Average Balances:
Cash, federal
funds sold and
due from banks $108,277 $14,080 $107,547 $14,792
Investment
securities 27,795 28,494 26,994 30,930
Loans 549,259 515,113 548,743 498,713
Less allowance
for loan losses 7,073 5,624 6,873 5,366
Other assets 24,376 17,453 23,158 17,704
------ ------ ------ ------
Total assets $702,634 $569,516 $699,569 $556,773
======== ======== ======== ========
Deposits $623,387 $476,161 $621,560 $469,763
Other borrowings 37,979 54,392 37,279 48,758
Other liabilities 4,301 4,671 4,052 4,419
Shareholders'
equity 36,967 34,292 36,678 33,833
------ ------ ------ ------
Total
liabilities
and
shareholders'
equity $702,634 $569,516 $699,569 $556,773
======== ======== ======== ========
Performance
Ratios:
Return on average
assets 0.28% 0.45% 0.38% 0.46%
Return on average
equity 5.35% 7.54% 7.29% 7.56%
Net interest margin 3.20% 3.79% 3.14% 3.75%
Efficiency ratio 68.45% 69.23% 64.47% 70.74%
Asset Quality Ratios:
Net loan charge-
offs to average
loans 0.13% 0.15% 0.15% 0.16%
Nonperforming
loans to period-
end loans 2.28% 0.41% 2.28% 0.41%
Nonperforming
assets to total
assets 2.33% 0.35% 2.33% 0.35%
Ratio of
allowance for
loan losses to
nonperforming
loans 0.59 x 2.41 x 0.59 x 2.41 x
Allowance for loan
losses to period-
end loans 1.34% 1.00% 1.34% 1.00%
Other Data:
Average equity to
average assets 5.26% 6.02% 5.24% 6.08%
Total shareholders'
equity to assets 5.10% 5.34% 5.10% 5.34%
Number of offices:
Full service
banking offices 7 7 7 7
Loan production
offices 1 1 1 1
Number of employees
(FTEs) 99 105 99 105
SOURCE North State Bancorp
