NORTH STATE BANCORP 
By RALEIGH, N.C., Nov. 15, 2010 /PRNewswire-FirstCall/ -- North State Bancorp (OTC Bulletin Board: NSBC the "Company"), the holding company for North State Bank, reported net income for third quarter 2010 of $339,000 compared to $161,000 for the third quarter 2009, an increase of $178,000 of 110.6%. Net income results for the third quarter of 2010 include gains on security sales which were $108,000 or $66,000 net of taxes for the quarter ended September 30, 2010. The year-to-year increase in earnings for third quarter 2010 also is principally a result of significantly higher non-interest income (an increase of $1.4 million) and higher net interest margins (an increase of $691,000). Diluted earnings per share were $.05 for the third quarter 2010 compared to $.02 for third quarter 2009. For the nine-month period ended September 30, 2010, net income was $1.2 million, a decrease of $324,000 or 21.8% from net income of $1.5 million reported for the nine-month period ended September 30, 2009. Diluted earnings per share were $.16 for the nine months ended September 30, 2010, compared to $.20 for the same period in 2009.
Total assets for the Company as of September 30, 2010 were $633.4 million compared to $710.8 million as of September 30, 2009, a decrease of $77.4 million. Total deposits and total loans as of September 30, 2010 were $559.5 million and $501.6 million, respectively, compared to total deposits and total loans as of September 30, 2009 of $633.6 million and $534.1 million, respectively. The reduction in total assets and total deposits is the result of the Company's intentional and continuing efforts to reduce non-core fundings, which decreased $99.4 million in a year-to-year comparison from September 30, 2009, to September 30, 2010. Core deposits, which primarily include demand deposit, money market and time deposit accounts for our customers, increased by $25.3 million over the same period. The reduction in total loans is a result of both the Company's intense focus on only banking customers who seek a mutually beneficial banking relationship, as well as the impact of the recession on overall loan demand.
Larry D. Barbour, president and CEO stated, "We are pleased to report these positive earnings in a difficult economy. The growth in earnings for the third quarter of 2010 is a direct result of deliberate changes in our balance sheet, principally the reduction in non-core fundings, the addition of Affiliated Mortgage which we acquired in February of 2010, changes within our Wealth Management division and our prudent control over non-interest expenses. North State Bank remains committed to expanding relationships with current customers, as well as pursuing new customers who seek a mutually beneficial banking relationship.
"Our success in growing core deposits has been due in large part to the success of CommunityPLUS, a division of North State Bank specifically focused on serving the needs of community association management firms. Since forming this division, deposits held in these accounts have increased dramatically - from $112.0 million at December 31, 2008 to $180.4 million or 61.1% as of September 30, 2010."
Founded in 2000, North State Bank is a full-service community bank, serving Wake and New Hanover Counties through seven full-service offices.
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 changes in real estate values and the real estate market, economic conditions, regulatory changes, changes in interest rates, substantial changes in financial markets, our ability to manage growth and loss of deposits and loan demand to other savings and financial institutions. 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.
North State Bancorp
Selected Financial Information and Other Data (Unaudited)
As of or for the Three
Months Ended
September 30,
2010 2009
--- ---
(Dollars in thousands, except per share)
Earnings Summary:
Total interest income $7,853 $8,384
Total interest expense 1,770 2,992
----- -----
Net interest income 6,083 5,392
Provision for loan
losses 2,166 1,840
----- -----
Net interest income
after provision for
loan losses 3,917 3,552
Noninterest income 1,572 194
Noninterest expense 4,895 3,453
----- -----
Income before income
taxes 594 293
Income taxes 255 132
--- ---
Net income $339 $161
==== ====
Share and Per Share
Data:
Earnings per share -
basic $0.05 $0.02
Earnings per share -
diluted $0.05 $0.02
Book value per share $5.11 $5.10
Weighted average shares
outstanding:
Basic 7,427,967 7,178,513
Diluted 7,434,933 7,330,886
Financial Condition
Period End:
Cash, federal funds
sold and due from
banks $44,204 $131,086
Investment securities 20,360 25,972
Loans -available for
sale 44,204 -
Loans 501,597 534,066
Less allowance for loan
losses 8,237 7,394
Other assets 31,301 27,021
------ ------
Total assets $633,429 $710,751
======== ========
Deposits $559,455 $633,615
Other borrowings 32,667 36,367
Other liabilities 3,348 4,129
Shareholders' equity 37,959 36,640
------ ------
Total liabilities and
shareholders' equity $633,429 $710,751
======== ========
Financial Condition
Average Balances:
Cash, federal funds
sold and due from
banks $54,032 $112,518
Investment securities 21,286 26,590
Loans -available for
sale 33,983 -
Loans 504,517 541,627
Less allowance for loan
losses 8,424 7,866
Other assets 30,941 26,452
------ ------
Total assets $636,335 $699,321
======== ========
Deposits $562,346 $620,878
Other borrowings 32,787 36,505
Other liabilities 2,903 4,785
Shareholders' equity 38,299 37,153
------ ------
Total liabilities and
shareholders' equity $636,335 $699,321
======== ========
Performance Ratios:
Return on average
assets 0.21% 0.09%
Return on average
equity 3.51% 1.72%
Net interest margin (1) 4.05% 3.25%
Efficiency ratio 63.95% 61.82%
Asset Quality Ratios:
Net loan charge-offs
to average loans -0.48% -0.33%
Nonperforming loans to
period-end loans 2.69% 3.03%
Nonperforming assets to
total assets 2.69% 2.85%
Ratio of allowance for
loan losses to
nonperforming loans 0.61 x 0.46 x
Allowance for loan
losses to period-end
loans 1.64% 1.38%
Other Data:
Average equity to
average assets 6.02% 5.31%
Total shareholders'
equity to assets 5.99% 5.16%
Number of offices:
Full service banking
offices 7 7
Loan production offices 1 1
Number of employees
(FTEs) 114 100
Core Earnings (2):
GAAP stated earnings $339 $161
Net gains on sale of
investment securities 108 -
Provision for loan
losses 2,166 1,840
OREO expenses 577 -
Taxes 255 132
--- ---
Non-GAAP core earnings
before tax $3,229 $2,133
====== ======
As of or for the Nine
Months Ended
September 30,
2010 2009
--- ---
(Dollars in thousands, except per share)
Earnings Summary:
Total interest income $23,242 $25,492
Total interest expense 5,898 9,585
----- -----
Net interest income 17,344 15,907
Provision for loan
losses 5,028 3,624
----- -----
Net interest income
after provision for
loan losses 12,316 12,283
Noninterest income 2,883 964
Noninterest expense 13,175 10,714
------ ------
Income before income
taxes 2,024 2,533
Income taxes 861 1,046
--- -----
Net income $1,163 $1,487
====== ======
Share and Per Share
Data:
Earnings per share -
basic $0.16 $0.21
Earnings per share -
diluted $0.16 $0.20
Book value per share $5.11 $5.10
Weighted average shares
outstanding:
Basic 7,340,889 7,176,862
Diluted 7,374,736 7,324,056
Financial Condition
Period End:
Cash, federal funds
sold and due from
banks $44,204 $131,086
Investment securities 20,360 25,972
Loans -available for
sale 44,204 -
Loans 501,597 534,066
Less allowance for loan
losses 8,237 7,394
Other assets 31,301 27,021
------ ------
Total assets $633,429 $710,751
======== ========
Deposits $559,455 $633,615
Other borrowings 32,667 36,367
Other liabilities 3,348 4,129
Shareholders' equity 37,959 36,640
------ ------
Total liabilities and
shareholders' equity $633,429 $710,751
======== ========
Financial Condition
Average Balances:
Cash, federal funds
sold and due from
banks $84,825 $109,222
Investment securities 22,614 26,858
Loans -available for
sale 20,467 -
Loans 513,208 546,345
Less allowance for loan
losses 8,326 7,208
Other assets 31,140 24,268
------ ------
Total assets $663,928 $699,485
======== ========
Deposits $589,996 $621,330
Other borrowings 33,247 37,018
Other liabilities 2,921 4,299
Shareholders' equity 37,764 36,838
------ ------
Total liabilities and
shareholders' equity $663,928 $699,485
======== ========
Performance Ratios:
Return on average
assets 0.23% 0.28%
Return on average
equity 4.12% 5.40%
Net interest margin (1) 3.74% 3.20%
Efficiency ratio 65.14% 63.51%
Asset Quality Ratios:
Net loan charge-offs
to average loans -1.05% -0.48%
Nonperforming loans to
period-end loans 2.69% 3.03%
Nonperforming assets to
total assets 2.69% 2.85%
Ratio of allowance for
loan losses to
nonperforming loans 0.61 x 0.46 x
Allowance for loan
losses to period-end
loans 1.64% 1.38%
Other Data:
Average equity to
average assets 5.69% 5.27%
Total shareholders'
equity to assets 5.99% 5.16%
Number of offices:
Full service banking
offices 7 7
Loan production offices 1 1
Number of employees
(FTEs) 114 100
Core Earnings (2):
GAAP stated earnings $1,163 $1,487
Net gains on sale of
investment securities 340 464
Provision for loan
losses 5,028 3,624
OREO expenses 1,368 42
Taxes 861 1,046
--- -----
Non-GAAP core earnings
before tax $8,080 $5,735
====== ======
(1)Excludes nonaccrual loans
(2)We define core earnings as operating income before securities
gains (losses), loan loss reserves, OREO (other real estate owned)
write-downs and taxes. Core earnings is considered a non-GAAP
financial measure. Core earnings do not represent, and should not
be considered as, an alternative to net income, as determined in
accordance with GAAP. Our definition of core earnings might not be
comparable to similarly titled measures by other companies. We
believe that the presentation of core earnings is useful to
investors because it provides important information of our operating
performance exclusive of non-recurring expenses of loan loss
reserves and OREO write-downs as well as taxes.
SOURCE North State Bancorp
