Market Overview

BNC Bancorp Announces Earnings for First Quarter 2017

Share:

HIGH POINT, N.C., April 17, 2017 /PRNewswire/ -- BNC Bancorp (NASDAQ: BNCN) ("Company"), parent company for Bank of North Carolina ("Bank"), today reported financial results for the three months ended March 31, 2017.  Highlights for the first quarter of 2017 include the following:

  • Net income of $14.4 million, or $0.28 per diluted share, compared to $15.7 million, or $0.31 per diluted share, for fourth quarter of 2016

    • Return on average assets of 0.79%, compared to 0.87% for fourth quarter of 2016
    • Return on average tangible common equity of 9.66%, compared to 10.59% for fourth quarter of 2016

  • Operating net income of $22.8 million, or $0.44 per diluted share, compared to $21.8 million, or $0.43 per diluted share, for fourth quarter of 2016

    • Operating return on average assets of 1.25%, compared to 1.21% for fourth quarter of 2016
    • Operating return on average tangible common equity of 14.92%, compared to 14.50% for fourth quarter of 2016

  • Originated loans at March 31, 2017 of $3.92 billion, an increase of $275.4 million compared to December 31, 2016

    • Total portfolio loans of $5.62 billion at March 31, 2017, an increase of $165.2 million compared to December 31, 2016
    • Loan originations of $627 million, as compared to $535 million during the fourth quarter of 2016

  • Entered into Agreement and Plan of Merger with Pinnacle Financial Partners, Inc. ("Pinnacle")

    • Merger has received all necessary regulatory approvals
    • Shareholders will receive 0.5235 shares of Pinnacle's common stock for every share of the Company's common stock
    • Transaction expected to close end of second quarter or beginning of third quarter 2017, subject to shareholders' approval and other customary closing conditions

Financial Performance



Three Months Ended


INCOME SUMMARY


Mar. 31,
2017


Dec. 31,
2016


Sept. 30,
2016


Jun. 30,
2016


Mar. 31,
2016


Interest income


(Dollars and shares in thousands)


Interest and fees on loans


$  62,901


$  61,992


$  57,824


$  51,978


$   50,302



Investment securities


6,949


6,974


6,910


6,202


5,965



Other


321


305


291


228


214


Total interest income


70,171


69,271


65,025


58,408


56,481


Interest expense













Interest on deposits 


8,268


7,935


7,619


6,704


6,241



Interest on borrowings


1,935


2,009


1,989


1,774


1,750


Total interest expense


10,203


9,944


9,608


8,478


7,991


Net interest income


59,968


59,327


55,417


49,930


48,490



Provision for loan losses


1,222


1,455


1,865


698


647


Net interest income 


58,746


57,872


53,552


49,232


47,843


Non-interest income













Mortgage lending income


2,221


2,830


3,134


2,671


2,681



Service charges


2,874


2,937


2,644


2,422


2,321



Trust/wealth income


1,641


1,086


307


366


436



Insurance income


1,074


562


-


-


-



SBA income


495


579


739


1,104


811



Securities gains (losses)


-


6


34


4


(39)



Earnings on bank-owned life insurance


1,453


1,360


1,254


1,160


758



Other


4,708


2,336


1,699


1,288


994


Total non-interest income


14,466


11,696


9,811


9,015


7,962


Non-interest expense













Salaries and employee benefits


21,277


20,922


18,491


18,019


17,803



Occupancy 


3,327


3,622


3,154


3,155


3,252



Furniture and equipment


2,457


2,303


2,297


1,993


2,073



Data processing and supply 


2,067


1,805


1,766


1,491


1,437



Advertising and business development 


879


869


678


923


684



Insurance, professional and other services


1,540


1,309


1,424


1,494


1,526



FDIC insurance assessments


766


1,240


1,071


900


900



Loan, foreclosure and OREO


1,939


1,233


1,562


856


1,367



Transaction-related expenses 


13,294


9,121


2,568


3,808


1,434



Loss on extinguishment of debt


-


598


-


-


-



Other


5,252


4,543


4,824


4,201


4,410


Total non-interest expenses


52,798


47,565


37,835


36,840


34,886


Income before income tax expense


20,414


22,003


25,528


21,407


20,919


Income tax expense


5,983


6,312


7,388


6,760


6,484


Net income (GAAP)


14,431


15,691


18,140


14,647


14,435



Securities gains (losses), net of tax


-


4


21


4


(25)



Transaction-related charges, net of tax


8,375


5,746


1,618


2,399


903



Loss on extinguishment of debt, net of tax


-


377


-


-


-


Operating net income (non-GAAP)


$  22,806


$  21,810


$  19,736


$  17,042


$   15,363















Common shares outstanding 


52,222


52,177


48,110


45,201


40,806


Weighted average diluted shares outstanding


52,357


50,852


47,360


41,560


40,885


 

Performance Ratios



Three Months Ended



Mar. 31,
2017


Dec. 31,
2016


Sept. 30,
2016


Jun. 30,
2016


Mar. 31,
2016

Earnings per diluted share 


$    0.28


$    0.31


$    0.38


$    0.35


$    0.35

Return on average assets 


0.79%


0.87%


1.10%


1.00%


1.03%

Return on average common equity


6.46%


7.22%


9.40%


9.43%


9.72%

Return on average tangible common equity (1)


9.66%


10.59%


13.37%


13.29%


13.71%

Efficiency ratio (2)


68.86%


65.02%


56.09%


60.51%


59.78%












Operating earnings per diluted share (1)


$    0.44


$    0.43


$    0.42


$    0.41


$    0.38

Operating return on average assets (1)


1.25%


1.21%


1.20%


1.16%


1.10%

Operating return on average tangible common equity (1)


14.92%


14.50%


14.50%


15.36%


14.55%

Operating efficiency ratio (1) (2)


51.53%


51.74%


52.31%


54.26%


57.28%












Book value per common share


$  17.55


$  17.29


$  16.53


$  15.86


$  14.79

Tangible book value per common share (1)


12.59


12.29


12.21


11.28


11.07



(1)

See Reconciliation of Non-GAAP Financial Measures for additional details.

(2)

Calculated on a fully-taxable equivalent ("FTE") basis.

 

Other Selected Financial Data



Three Months Ended



Mar. 31,
2017


Dec. 31,
2016


Sept. 30,
2016


Jun. 30,
2016


Mar. 31,
2016



 (Dollars in thousands) 

 Securities gains (losses), net 


$

-


$

6


$

34


$

4


$

(39)

 Loss on extinguishment of debt 



-



598



-



-



-

 Fair value accretion 



6,269



5,841



5,845



5,276



5,505

 OREO valuation adjustments, net  



40



503



274



222



266

 Transaction-related expenses 



13,294



9,121



2,568



3,808



1,434

 

Richard D. Callicutt, II, President and CEO, stated, "We are extremely pleased to report record operating results for the first quarter of 2017.  During the quarter, after adjusting for all the transaction-related expenses, operating earnings increased a healthy 48.4% from year ago levels, while operating earnings per share increased 15.8% to $0.44.  Operating return on average assets was a healthy 1.25%, up slightly from the prior quarter, while operating return on average tangible common equity increased slightly to 14.92%.

As you are aware, during the quarter we announced a strategic partnership with Pinnacle Financial Partners headquartered in Nashville, Tennessee.  We believe this partnership will create one of the highest performing regional banks in the U.S., and reward both sets of shareholders as we implement the best of each company across one of the most geographically appealing footprints in our industry.  To date we have received all necessary regulatory approvals providing further evidence of the good-standing and financial health of both companies.  Since the announcement, the level of mutual respect and collaboration between the functional leaders of our two companies has been exceptional, and provides additional confidence that the integration efforts will result in a smooth transition for our customers and communities.

On a personal note, myself and nine others from our organization recently spent three days in Nashville going through a new associate orientation led by Terry Turner, the Pinnacle CEO, and supported by his executive team.  After this experience, I am more confident than ever that our decision to join with Pinnacle was clearly the correct decision for our organization.  It also made it obviously apparent why Pinnacle consistently is voted as one of the Best Places to Work in the US, as well as one of the most trustworthy and easiest places to do business."

Non-interest Income and Expense Data



Three Months Ended





Mar. 31,
2017


Dec. 31,
2016


Sept. 30,
2016


Jun. 30,
2016


Mar. 31,
2016



Non-interest income


(Dollars in thousands)




Mortgage lending income


$  2,221


$  2,830


$  3,134


$  2,671


$  2,681




Service charges


2,874


2,937


2,644


2,422


2,321




Trust/wealth income


1,641


1,086


307


366


436




Insurance income


1,074


562


-


-


-




SBA income


495


579


739


1,104


811




Earnings on bank-owned life insurance


1,453


1,360


1,254


1,160


758




Other


4,708


2,336


1,699


1,288


994



Total operating non-interest income - non-GAAP


14,466


11,690


9,777


9,011


8,001




Securities gains (losses), net


-


6


34


4


(39)



Total non-interest income - GAAP


$14,466


$11,696


$  9,811


$  9,015


$  7,962

















Non-interest expense














Salaries and employee benefits


$21,277


$20,922


$18,491


$18,019


$17,803




Occupancy 


3,327


3,622


3,154


3,155


3,252




Furniture and equipment


2,457


2,303


2,297


1,993


2,073




Data processing and supply 


2,067


1,805


1,766


1,491


1,437




Advertising and business development 


879


869


678


923


684




Insurance, professional and other services


1,540


1,309


1,424


1,494


1,526




FDIC insurance assessments


766


1,240


1,071


900


900




Loan, foreclosure and OREO


1,939


1,233


1,562


856


1,367




Other


5,252


4,543


4,824


4,201


4,410



Total operating non-interest expense - non-GAAP


39,504


37,846


35,267


33,032


33,452




Transaction-related expenses 


13,294


9,121


2,568


3,808


1,434




Loss on extinguishment of debt


-


598


-


-


-



Total non-interest expense - GAAP


$52,798


$47,565


$37,835


$36,840


$34,886

















 

Total GAAP and operating non-interest income was $14.5 million for the first quarter of 2017, an increase from $11.7 million for the fourth quarter of 2016.  The increase in non-interest income was primarily due increased income from trust/wealth services and insurance services, which were slightly offset by a seasonal decrease in mortgage lending income.  The Company also recorded an increase in recoveries on previously charged-off acquired loans.  Certain sources of our non-interest income are volatile and can vary significantly from period to period. 

Total GAAP non-interest expense was $52.8 million for the first quarter of 2017, an increase from $47.6 million for the fourth quarter of 2016.  The results for the first quarter of 2017 include $13.3 million of transaction-related expenses, compared to $9.1 million recorded during the fourth quarter of 2016.  Excluding non-core charges, operating non-interest expense for the first quarter of 2017 was $39.5 million, an increase compared to $37.8 million for the fourth quarter of 2016.  This increase was due to the full quarter impact of the additional headcount and facilities obtained from the High Point Bank Corporation ("High Point") acquisition during the fourth quarter of 2016, as well as $0.5 million of losses on the sale of other real estate owned ("OREO"), compared to $0.4 million of gain on sale of OREO during the fourth quarter of 2016.  

Selected Balance Sheet Data



 Ending Balance 



 Mar. 31,
2017 


 Dec. 31,
2016 


 Sept. 30,
2016 


 Jun. 30,
2016 


 Mar. 31,
2016 

 Portfolio loans: 


 (Dollars in thousands) 

    Originated loans 


$ 3,921,065


$ 3,645,687


$ 3,455,677


$ 3,163,357


$ 2,847,466

    Acquired loans 


1,699,802


1,810,023


1,540,270


1,649,328


1,390,688

    Allowance for loan and lease losses 


(39,365)


(37,501)


(36,366)


(33,841)


(32,548)

 Portfolio loans, net 


5,581,502


5,418,209


4,959,581


4,778,844


4,205,606

 Loans held for sale 


23,453


43,731


40,441


41,703


33,455

 Investment securities 


893,000


896,786


838,289


803,058


757,248

 Total interest-earning assets 


6,762,077


6,589,774


6,128,554


5,790,893


5,126,452

 Goodwill 


234,769


234,769


189,968


188,220


134,686

 Other intangible assets, net 


24,372


25,911


17,852


19,014


17,143

 Total assets 


7,575,342


7,401,691


6,801,562


6,478,373


5,699,573












 Deposits: 











    Non-interest bearing deposits 


1,191,024


1,113,878


917,521


889,254


794,548

    Interest-bearing demand and savings 


3,527,613


3,405,036


3,080,479


2,652,735


2,431,584

    Time deposits 


1,597,254


1,564,063


1,652,123


1,814,654


1,537,644

 Total deposits 


6,315,891


6,082,977


5,650,123


5,356,643


4,763,776

 Borrowings 


287,516


369,952


310,609


352,119


282,929

 Total interest-bearing liabilities 


5,412,383


5,339,051


5,043,211


4,819,508


4,252,157

 Shareholders' equity: 











    Common equity 


913,180


900,044


786,625


710,300


598,158

    Accumulated other comprehensive income 


3,458


1,838


8,587


6,761


5,395

 Total shareholders' equity 


916,638


901,882


795,212


717,061


603,553

 

Total assets at March 31, 2017 were $7.58 billion, an increase of 2.4% as compared to total assets of $7.40 billion at December 31, 2016.  Total portfolio loans were $5.62 billion at March 31, 2017, an increase of 3.0% from $5.46 billion at December 31, 2016.  Loans that were originated by the Company increased by $275.4 million, or 7.6%, during the first quarter of 2017. 

Total deposits were $6.32 billion at March 31, 2017, an increase of $232.9 million, or 3.8%, as compared to December 31, 2016.  While the majority of the increase was in core deposits, the Company increased wholesale funding and used the proceeds to repay short-term debt during the first quarter of 2017.  Wholesale deposits comprised 21.3% of total deposits at March 31, 2017, which is consistent with the funding mix as of December 31, 2016.  Total borrowings were $287.5 million at March 31, 2017, a decrease of 22.3% compared to $370.0 million at December 31, 2016.  Total shareholders' equity was $916.6 million at March 31, 2017, an increase compared to $901.9 million at December 31, 2016.  At March 31, 2017, both the Bank's and Company's capital ratios exceeded the minimum thresholds established for a well-capitalized bank by regulatory measures. 

Loan Portfolio Composition



 Ending Balance 



 Mar. 31,
2017 


 Dec. 31,
 2016 


 Sept. 30,
2016 


 Jun. 30,
2016 


 Mar. 31,
2016 



 (Dollars in millions) 

Residential construction


$           125


$           115


$           104


$             98


$             76

     Presold


67


58


62


59


39

     Speculative


58


57


42


39


37












Commercial construction


467


401


285


294


278

Residential and commercial A&D


51


42


39


33


23












Land


117


120


118


126


118

     Residential buildable lots


51


51


44


44


39

     Commercial buildable lots


22


23


24


24


21

     Land held for development


23


26


23


31


34

     Raw and agricultural land


21


20


27


27


24












Commercial real estate


2,964


2,917


2,705


2,500


2,257

     Multi-family


223


213


240


203


179

     Farmland


4


3


3


4


4

     Owner occupied


874


884


787


817


705

     Non-owner occupied


1,863


1,817


1,675


1,476


1,369












Commercial and industrial


512


482


443


454


400

Residential mortgage


1,330


1,326


1,251


1,258


1,039

Consumer


24


24


22


21


18

Leases


31


29


29


29


29

Total portfolio loans


$        5,621


$        5,456


$        4,996


$        4,813


$        4,238












 

Acquired Loan Summary



 Ending Balance 



 Mar. 31,
2017 


 Dec. 31,
 2016 


 Sept. 30,
2016 


 Jun. 30,
2016 


 Mar. 31,
2016 



(Dollars in thousands)

Performing acquired loans


$  1,602,124


$  1,710,008


$  1,432,351


$  1,537,650


$  1,278,965

Less: remaining FMV adjustments


(23,864)


(27,846)


(21,687)


(25,630)


(23,359)

   Performing acquired loans, net


1,578,260


1,682,162


1,410,664


1,512,020


1,255,606

   FMV adjustment %


1.5%


1.6%


1.5%


1.7%


1.8%












Purchase credit impaired loans (PCI)


134,897


143,530


143,494


152,105


148,459

Less: remaining FMV adjustments


(13,355)


(15,669)


(13,888)


(14,797)


(13,377)

   PCI loans, net


121,542


127,861


129,606


137,308


135,082

   FMV adjustment %


9.9%


10.9%


9.7%


9.7%


9.0%












Total acquired performing loans


$  1,578,260


$  1,682,162


$  1,410,664


$  1,512,020


$  1,255,606

Total acquired PCI loans


121,542


127,861


129,606


137,308


135,082

Total acquired loans


$  1,699,802


$  1,810,023


$  1,540,270


$  1,649,328


$  1,390,688

   FMV adjustment % all acquired loans


2.2%


2.3%


2.3%


2.4%


2.6%

 

Asset Quality



 Ending Balance 



 Mar. 31,
2017 


 Dec. 31,
 2016 


 Sept. 30,
2016 


 Jun. 30,
2016 


 Mar. 31,
2016 



 (Dollars in thousands) 

Nonaccrual loans - non-acquired


$      9,315


$      6,647


$      7,662


$      5,407


$      6,228

Nonaccrual loans - acquired


9,464


7,989


9,347


11,756


12,706

OREO - non-acquired


12,397


13,109


13,352


15,806


14,987

OREO - acquired


12,587


13,380


14,696


14,708


15,783

90 days past due - non-acquired


-


115


10


10


-

90 days past due - acquired


-


-


-


-


-

Total nonperforming assets


$    43,763


$    41,240


$    45,067


$    47,687


$    49,704












Total nonperforming assets - non-acquired


$    21,712


$    19,871


$    21,024


$    21,223


$    21,215












Net charge-offs (recoveries), QTD


$       (642)


$         320


$        (660)


$        (594)


$        (202)

Annualized net charge-offs (recoveries) to total average
portfolio loans


-0.05%


0.02%


-0.05%


-0.05%


-0.02%












Ratio of total nonperforming assets to total assets


0.58%


0.56%


0.66%


0.74%


0.87%

Ratio of total nonperforming loans to total portfolio loans


0.33%


0.27%


0.34%


0.36%


0.45%

Ratio of total allowance for loan losses to total portfolio loans

0.70%


0.69%


0.73%


0.70%


0.77%












Excluding acquired 











Ratio of nonperforming assets to loans and OREO


0.55%


0.54%


0.61%


0.67%


0.74%

Ratio of nonperforming loans to loans


0.24%


0.19%


0.22%


0.17%


0.22%

Ratio of allowance for loan losses to loans


0.93%


0.95%


0.97%


0.98%


1.03%

 

Total nonperforming assets at March 31, 2017 were $43.8 million, or 0.58% of total assets, as compared to $41.2 million, or 0.56% of total assets, at December 31, 2016.  Excluding nonperforming assets acquired by the Company, nonperforming assets were $21.7 million, or 0.55% of non-acquired loans and OREO, at March 31, 2017, as compared to $19.9 million, or 0.54% of non-acquired loans and OREO, at December 31, 2016.  Non-accrual loans increased from $14.6 million at December 31, 2016 to $18.8 million at March 31, 2017, which was primarily due to a larger quantity of smaller dollar loans being reclassified to non-accrual. 

The Company experienced $0.6 million of net recoveries during the first quarter of 2017, compared to net charge-offs of $0.3 million during the fourth quarter of 2016.  Gross charge-offs were $0.4 million during the first quarter of 2017, a decrease compared to gross charge-offs of $1.2 million during the fourth quarter of 2016.

The allowance for loan losses was $39.4 million at March 31, 2017, an increase from $37.5 million at December 31, 2016.  The Company recorded a provision for loan losses of $1.2 million during the first quarter of 2017, compared to $1.5 million recorded during the fourth quarter of 2016, as the Company continues to experience strong growth in the originated loan portfolio.

Net Interest Income and Margin



Three Months Ended




 Mar. 31,
2017 


 Dec. 31,
2016 


 Sept. 30,
2016 


 Jun. 30,
2016 


 Mar. 31,
2016 


Quarterly average balances:


(Dollars in thousands)


    Loans 


$ 5,576,676


$ 5,410,066


$ 4,893,926


$ 4,437,248


$ 4,241,970


    Investment securities 


892,091


835,235


828,144


760,841


737,361


    Interest-bearing balances and other 


153,225


181,678


147,763


134,923


139,367


    Total interest-earning assets 


6,621,992


6,426,979


5,869,833


5,333,012


5,118,698


    Deposits: 












      Non-interest bearing 


1,126,691


1,056,507


907,344


825,148


778,114


      Interest-bearing 


5,005,002


4,862,443


4,475,901


4,138,466


3,953,668


    Total deposits 


6,131,693


5,918,950


5,383,245


4,963,614


4,731,782


    Borrowed funds 


302,798


315,828


321,218


272,374


262,880


    Total interest-bearing liabilities 


5,307,800


5,178,271


4,797,119


4,410,840


4,216,548


    Shareholders' equity 


905,594


864,656


768,124


625,021


597,127














Interest Income/Expense:












   Loans


$      62,901


$      61,992


$      57,824


$      51,978


$     50,302


   Investment securities, tax


3,144


3,352


3,113


2,908


2,720


   Investment securities, non-tax (1)


6,040


5,749


6,027


5,229


5,151


   Interest-bearing balances and other 


321


305


291


228


214


   Total interest income (1)


72,406


71,398


67,255


60,343


58,387


   Deposits


8,268


7,935


7,619


6,704


6,241


   Borrowings


1,935


2,009


1,989


1,774


1,750


   Total interest expense


10,203


9,944


9,608


8,478


7,991


   Net interest income (1)


$      62,203


$      61,454


$      57,647


$      51,865


$     50,396














Average Yields and Costs:












   Loans


4.57%


4.56%


4.70%


4.71%


4.77%


   Investment securities, tax


3.01%


2.96%


2.93%


3.01%


2.94%


   Investment securities, non-tax (1)


5.16%


5.11%


5.91%


5.65%


5.68%


   Interest-bearing balances and other 


0.85%


0.67%


0.78%


0.68%


0.62%


   Total interest-earning assets (1)


4.43%


4.42%


4.56%


4.55%


4.59%


   Total interest-bearing deposits


0.67%


0.65%


0.68%


0.65%


0.63%


   Borrowed funds


2.59%


2.53%


2.46%


2.62%


2.68%


   Total interest-bearing liabilities


0.78%


0.76%


0.80%


0.77%


0.76%


   Cost of funds


0.64%


0.63%


0.67%


0.65%


0.64%


   Net interest margin (1)


3.81%


3.80%


3.91%


3.91%


3.96%



(1) Calculated on a FTE basis.

 

FTE net interest income for the first quarter of 2017 was $62.2 million, an increase from $61.5 million for the fourth quarter of 2016.  FTE net interest margin was 3.81% for the first quarter of 2017, a slight increase compared to 3.80% for the fourth quarter of 2016.  The average yield on interest-earning assets increased one basis point to 4.43% for the first quarter of 2017, while the rate paid on interest-bearing liabilities increased by two basis points to 0.67%.  Accretion earned on the Company's acquired loan portfolio was $6.3 million during the first quarter of 2017, an increase compared to $5.8 million recorded during the fourth quarter of 2016.  Excluding accretion, the average yield on loans was 4.12% for the first quarter of 2017, as compared to 4.13% for the fourth quarter of 2016. 

Average interest-earning assets for the first quarter of 2017 were $6.62 billion, an increase from $6.43 billion for the fourth quarter of 2016.  The increase was primarily due to the full quarter impact of the acquisition of High Point, as well as continued organic loan growth throughout our existing markets.  Average interest-bearing liabilities were $5.31 billion for the first quarter of 2017, an increase from $5.18 billion during the fourth quarter of 2016.   This increase was primarily in interest-bearing deposits, which increased $142.6 million during the first quarter of 2017.

About BNC Bancorp and Bank of North Carolina

Headquartered in High Point, North Carolina, BNC Bancorp is the parent company of Bank of North Carolina d/b/a BNC Bank, a commercial bank with total assets of $7.58 billion.  Bank of North Carolina provides a complete line of banking and financial services to individuals and businesses through its 76 current banking offices in Virginia, North and South Carolina.  Bank of North Carolina is insured by the FDIC and is an equal housing lender.  BNC Bancorp's stock is traded and quoted in the Nasdaq Capital Market under the symbol "BNCN."  The Company's website is www.bncbancorp.com.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States.  BNC Bancorp's management uses these "non-GAAP" financial measures in its analysis of the Company's performance.  Management believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods as well as demonstrating the effects of significant gains and charges in the current period. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. See the attached tabular disclosures for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure.

Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as "may," "could," "should," "will," "would," "believe," "anticipate," "estimate," "project," "expect," "intend," "plan," or words or phases of similar meaning. Forward-looking statements may include, among other things, statements about the Company's confidence in its strategies and its expectations about financial performance, market growth, market and regulatory trends and developments, acquisitions and divestitures, new technologies, services and opportunities and earnings. The forward-looking statements are based largely on the Company's expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company's control. The Company undertakes no obligation to publicly update any forward-looking statement to reflect developments occurring after the statement is made, except as otherwise required by law.  Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements as a result of, among other factors, the risks and uncertainties described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2016.  Please refer to the SEC's website at www.sec.gov where you can review this document. 

Reconciliation of Non-GAAP Financial Measures



Three Months Ended



 Mar. 31,
2017 


 Dec. 31,
2016 


 Sept. 30,
2016 


 Jun. 30,
2016 


 Mar. 31,
2016 

Operating Earnings per Share, Diluted (1)


(Dollars in thousands)

Net income (GAAP)


$      14,431


$      15,691


$      18,140


$      14,647


$      14,435

Transaction-related expenses, net of tax


8,375


5,746


1,618


2,399


903

Loss on extinguishment of debt, net of tax


-


377


-


-


-

Securities gains (losses), net of tax


-


4


21


4


(25)

Operating earnings (non-GAAP)


22,806


21,810


19,736


17,042


15,363

Weighted average fully diluted shares outstanding


52,357


50,852


47,360


41,560


40,885

Operating earnings per share, diluted (non-GAAP)


$          0.44


$          0.43


$          0.42


$          0.41


$          0.38












Tangible Common Book Value per Share (2)











Shareholders' equity (GAAP)


$    916,638


$    901,882


$    795,212


$    717,061


$    603,553

Intangible assets


259,141


260,680


207,820


207,234


151,829

Tangible common shareholders equity (non-GAAP)


657,497


641,202


587,392


509,827


451,724

Common shares outstanding


52,222


52,177


48,110


45,201


40,806

Tangible common book value per share (non-GAAP)


$        12.59


$        12.29


$        12.21


$        11.28


$        11.07












Return on Average Tangible Common Equity (2)











Net income (GAAP)


$      14,431


$      15,691


$      18,140


$      14,647


$      14,435

Amortization of intangibles, net of tax


963


888


732


748


728.28

Tangible net income available to common shareholders (non-GAAP)


15,394


16,579


18,872


15,395


15,163

Average common shareholders equity


905,594


864,656


768,124


625,021


597,127

Average intangible assets


259,466


241,802


206,653


159,184


152,379

Average tangible common shareholders' equity (non-GAAP)


646,128


622,854


561,471


465,837


444,748

Return on average tangible common equity (non-GAAP)


9.66%


10.59%


13.37%


13.29%


13.71%












Operating Return on Average Assets (1)











Net income (GAAP)


$      14,431


$      15,691


$      18,140


$      14,647


$      14,435

Transaction-related expenses, net of tax


8,375


5,746


1,618


2,399


903

Loss on extinguishment of debt, net of tax


-


377


-


-


-

Securities gains (losses), net of tax


-


4


21


4


(25)

Operating earnings (non-GAAP)


$      22,806


$      21,810


$      19,736


$      17,042


$      15,363

Average assets


7,391,231


7,158,393


6,532,517


5,908,341


5,635,137

Operating return on average assets (non-GAAP)


1.25%


1.21%


1.20%


1.16%


1.10%












Operating Return on Average Tangible Common Equity (2)











Net income (GAAP)


$      14,431


$      15,691


$      18,140


$      14,647


$      14,435

Amortization of intangibles, net of tax


963


888


732


748


728

Transaction-related expenses, net of tax


8,375


5,746


1,618


2,399


903

Loss on extinguishment of debt, net of tax


-


377


-


-


-

Securities gains (losses), net of tax


-


4


21


4


(25)

Operating tangible net income (non-GAAP)


$      23,769


$      22,698


$      20,468


$      17,790


$      16,091

Average common shareholders equity


905,594


864,656


768,124


625,021


597,127

Average intangible assets


259,466


241,802


206,653


159,184


152,379

Average tangible common shareholders' equity (non-GAAP)


646,128


622,854


561,471


465,837


444,748

Operating return on average tangible common equity (non-GAAP)


14.92%


14.50%


14.50%


15.36%


14.55%












Operating Efficiency Ratio (3)











Non-interest expense (GAAP)


$      52,798


$      47,565


$      37,835


$      36,840


$      34,886

Transaction-related expenses


13,294


9,121


2,568


3,808


1,434

Loss on extinguishment of debt


-


598


-


-


-

Operating non-interest expense (non-GAAP)


39,504


37,846


35,267


33,032


33,452

Net interest income, FTE


62,203


61,454


57,647


51,865


50,396

Non-interest income - GAAP


14,466


11,696


9,811


9,015


7,962

Securities gains (losses), net


-


6


34


4


(39)

Operating efficiency ratio (non-GAAP)


51.53%


51.74%


52.31%


54.26%


57.28%














(1)

Operating earnings per diluted share, operating non-interest income, operating non-interest expense, operating income tax expense, operating return on average assets, and operating return on average tangible common equity are non-GAAP financial measures and exclude the after-tax effect of transaction-related charges, loss on extinguishment of debt, securities gains (losses) and other one-time charges.  Management believes that these non-GAAP performance measures provide additional useful information that allows readers to evaluate the ongoing performance of the company.

(2)

The tangible measures are non-GAAP financial measures and exclude the effect of period end or average balance of intangible assets.  Management believes that these non-GAAP tangible measures provide additional useful information, particularly since these measures are widely used by industry analysts for companies with prior merger and acquisition activities. 

(3)

Operating efficiency ratio is calculated by non-interest expense, excluding transaction-related expenses, and loss on extinguishment of debt, divided by the sum of FTE net interest income and non-interest income excluding securities gains (losses).  Management believes this non-GAAP operating measure provides additional useful information that allows readers to evaluate the ongoing performance of the company.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/bnc-bancorp-announces-earnings-for-first-quarter-2017-300440380.html

SOURCE BNC Bancorp

View Comments and Join the Discussion!
 
Fastest Market News Application
You'll Hear It First On Pro
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com