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Select Bancorp Reports Second Quarter 2020 Earnings

DUNN, N.C., Aug. 05, 2020 (GLOBE NEWSWIRE) -- Select Bancorp, Inc. (NASDAQ: SLCT) (the “Company”), the holding company for Select Bank & Trust Company, today reported net income for the quarter ended June 30, 2020 of $681,000 with basic and diluted earnings per share of $0.04, compared to net income of $3.4 million with basic and diluted earnings per share of $0.18 for the comparative quarter ended June 30, 2019. The decrease in net income in the second quarter of 2020 compared to the second quarter of 2019 was primarily attributable to a provision for loan losses of $1.9 million compared to a recovery of loan losses of $207,000 for the same period in 2019. The increase in the provision for loan losses was primarily due to factors associated with the economic impact of the COVID-19 pandemic. In addition, we incurred $709,000 of expenses related to the acquisition of three branches from First Citizens Bank during the quarter.  We also incurred expenses of $265,000 associated with new branches in Cornelius, North Carolina (Charlotte area) and Holly Springs, North Carolina (Raleigh area). 

Total assets, deposits, and gross loans for the Company as of June 30, 2020 were $1.6 billion, $1.3 billion, and $1.2 billion, respectively, compared to total assets of $1.3 billion, total deposits of $1.0 billion, and total loans of $997.1 million as of the same date in 2019.  

Comments of the Chief Executive Officer and Other Matters

William Hedgepeth, President and Chief Executive Officer, stated regarding the 2nd quarter of 2020, “We continue to navigate the challenges that we are facing during this unprecedented crisis caused by the COVID-19 pandemic.  Our customers, employees, shareholders, families and friends have been deeply affected by the pandemic and the future is uncertain.  However, Select Bank & Trust is positioned and prepared to assist our customers and employees. Our capital position, liquidity and asset quality are sound at this time and we believe sufficient to navigate the COVID-19 pandemic in the coming weeks and months.  We have assisted our customers with Paycheck Protection Program, or PPP, small business loans and COVID-19 loan modifications where necessary. We originated over 1,200 PPP loans totaling approximately $97.0 million.  Over 65% or 831 of these loans were at or below $50,000.  We granted over 475 COVID-19 loan modifications totaling approximately $240.0 million.  Our employees and Board of Directors are committed to assisting our customers, employees and communities through this crisis.  Our employees have worked extremely hard this year, and for many years preceding this crisis, to place Select Bank & Trust in a position to support our customers, employees and communities as we move forward in this unusual time.” 

Hedgepeth continued, “We also acquired three branches from Entegra Bank, a division of First Citizens Bank, in the western part of North Carolina in mid-April.  The pandemic challenged us to get creative with how we would normally convert systems, train team members and successfully open three new branches, but we effectively converted all three branch facilities, the systems and the employees, and we are very proud of the teams’ efforts. We are pleased to have the branches officially in our network now, located in Franklin, Highlands, and Sylva, North Carolina.”

Other matters of interest to shareholders are:

  • The Company repurchased 193,138 shares of its common stock during the second quarter of 2020 under a repurchase plan authorized by the Board of Directors in 2019. The Company may repurchase up to an additional 42,002 shares of its common stock under the repurchase plan.
  • Loan growth was approximately $210.5 million in the second quarter of 2020, which consisted of $103.3 million in loans acquired from First Citizens in connection with the acquisition of three western North Carolina branches, plus $95.1 million in PPP loans and $12.1 million in net organic loan growth.
  • Deposit growth was approximately $356.1 million in the second quarter of 2020, which consisted of $185.5 million in deposits acquired from First Citizens in connection with the branch acquisition and $170.6 million in net organic growth.
  • With the closing of the acquisition of three western North Carolina branches on April 17, 2020, our total assets are in excess of $1.6 billion.

 Net Interest Income and Net Interest Margin

Net interest income was $11.9 million for the second quarter of 2020 and $11.7 million for the same period in 2019. On a comparative quarter basis, the Company’s total interest income was positively affected by increased loan balances due to growth which was offset by a decreasing yield, a decrease in securities balances and lower yielding loans plus the reduction in other earning assets at a lower yield. Average total interest-earning assets were $1.4 billion in the second quarter of 2020 and $1.2 billion for the same period in 2019.  The yield on those assets decreased 83 basis points, from 5.05% in the second quarter of 2019 to 4.22% for the same period in 2020.  This was primarily due to lower rates on recently originated loans and PPP loans along with deferral modifications on loans due to COVID-19 on a comparative quarter basis.  When compared to the first quarter of 2020, average total interest-earning assets were $1.4 billion in the second quarter of 2020 and $1.1 billion for the first quarter of 2020.  The yield on those assets decreased 76 basis points, from 4.98% in the second quarter of 2019 to 4.22% for the same period in 2020.

The Company’s average interest-bearing liabilities increased by $147.7 million, to $935.8 million for the quarter ended June 30, 2020, from $788.1 million for the second quarter of 2019.  Low-cost savings, NOW and money market deposits increased $164.3 million while the cost of transactional deposits increased from 0.52% to 0.54%, or 2 basis points year over year. The cost of total deposits decreased from 1.33% in the second quarter of 2019 to 1.02% in the second quarter of 2020 due to the decrease in the cost of time deposits.  During the second quarter of 2020, the Company’s net interest margin was 3.45% and net interest spread was 3.08%. In the second quarter of 2019, net interest margin was 4.06% and net interest spread was 3.59%.  

Provision for Loan Losses and Asset Quality

During the second quarter of 2020, the Company recorded a provision for loan losses of $1.9 million, based primarily on loan growth and adjustments to qualitative allowance factors. There was a 0.12% allowance applied to all loan pools for factors related to the potential economic impact of the COVID-19 pandemic. Additionally, due to the COVID-19 pandemic, we increased our reserve an additional 5 basis points in response to qualitative factors for gross domestic product, peer group delinquency, and North Carolina unemployment in all loan pools.  As a result, $1.1 million of the $1.9 million provision was attributable to the impact COVID-19 on the reserve’s increase.  We granted payment extensions on approximately 491 commercial and consumer loans totaling approximately $240.2 million related to the impact of COVID-19.  As of the date of this filing, there are approximately 137 loans totaling $83.1 million remaining on modification.  On a comparative-quarter basis, the Company recorded a recovery of loan losses of $207,000 for the second quarter of 2019. In the second quarter of 2020, the Company recorded net charge-offs of $515,000 compared to net charge-offs of $0 in the second quarter of 2019.  These charge-offs resulted in a net charge-off rate of 0.16% of average loans for the current quarter, compared to a net charge-off rate of 0.00% in the second quarter of 2019.

Non-interest Income

Non-interest income for the quarter ended June 30, 2020 was $1.4 million, an increase of $83,000 from $1.3 million in the second quarter of 2019. Service charges on deposit accounts decreased $78,000, to $206,000 for the quarter ended June 30, 2020, from $284,000 for the second quarter in 2019. Other non-deposit fees and income increased $36,000 from the second quarter of 2019 to the second quarter of 2020. Fees of $235,000 from presold mortgages and $120,000 from SBA loans totaled $355,000 in the year-over-year comparison, which represented an increase of $124,000 from the $230,000 of fees in the second quarter of 2019. The Company did not sell any investment securities in the second quarter of 2020 or 2019.

Non-interest Expense

Non-interest expenses increased by $1.7 million to $10.5 million for the quarter ended June 30, 2020, from $8.8 million for the same period in 2019.  In general, most categories of non-interest expenses increased, primarily due to an increase in the number of branches.  The following are highlights of the significant categories of non-interest expenses during the second quarter of 2020 versus the same period in 2019:

Personnel expenses increased $755,000 to $5.8 million, due to additional personnel and cost-of-living increases. 

Occupancy expenses increased $64,000 to $986,000, primarily due to additional branches, repairs and maintenance and increased rent expense due to normal rent escalation.

Integration-related expenses increased $602,000 to $709,000, due to the acquisition of three branches in western North Carolina.

Core Deposit Intangible (“CDI”) expense decreased $10,000 to $195,000 due to amortization.

Information systems expense increased by $95,000 to $972,000 due to increased expenses related to a new mobile banking platform, increased number of users and security cost for the core processing system.

Professional fees decreased by $32,000 to $451,000.

Deposit insurance expenses decreased by $14,000 to $76,000 due to premium credit.

Income Taxes

The Company’s effective tax rate was 18.0% and 22.0% for the quarters ended June 30, 2020 and 2019, respectively. 

Balance Sheet

Total assets at June 30, 2020 were $1.6 billion, an increase of $302.2 million or 22.9% from a year earlier.  Gross loans at June 30, 2020 were $1.2 billion, up $252.9 million or 25.4% from a year earlier, and total deposits were $1.3 billion, an increase of $308.5 million or 29.9% from a year earlier.

Retail deposits (excluding brokered deposits and internet time deposits) grew at a rate of 60.4% or $357.0 million as of June 30, 2020 compared to the same period in 2019. Deposits increased $97.2 million due to the PPP loan program.  Wholesale deposits decreased from $16.9 million at June 30, 2019 to $7.2 million at June 30, 2020 as we continue emphasizing core deposit growth to replace wholesale deposits.

Completion of Acquisition of Three Branches in Western North Carolina

On April 17, 2020, the Company’s subsidiary, Select Bank & Trust, completed its acquisition of three branches from Entegra Bank, a division of First Citizens Bank.

The branches are located at 473 Carolina Way, Highlands, NC; 498 East Main Street, Sylva, NC; and 30 Hyatt Road, Franklin, NC. As part of the acquisition, Select Bank & Trust Company acquired approximately $185 million in deposits, goodwill of $17.3 million and purchased approximately $103 million in loans. 

About Select Bank & Trust Company

Select Bank & Trust has 22 full-service offices in these North Carolina communities: Dunn, Burlington, Charlotte, Clinton, Cornelius (Charlotte area), Elizabeth City, Fayetteville, Franklin, Goldsboro, Greenville, Highlands, Holly Springs (Raleigh area), Leland, Lillington, Lumberton, Morehead City, Raleigh, Sylva, and Wilmington; in the following South Carolina communities: Blacksburg and Rock Hill; and in Virginia Beach, Virginia.  Select Bank & Trust also operates three loan production offices in Wilson, Durham and Winston-Salem, North Carolina.

About Select Bancorp, Inc.

Select Bancorp, Inc. is a bank holding company headquartered in Dunn, North Carolina. The Company primarily conducts operations through its wholly owned subsidiary, Select Bank & Trust Company, a North Carolina-chartered commercial bank that provides a full suite of banking services through its offices in North Carolina, South Carolina, and Virginia. The Company’s common stock is listed on the Nasdaq Global Market under the symbol “SLCT”.

Non-GAAP Financial Measures

Certain financial measures we use to evaluate our performance and discuss in this release and the accompanying tables are identified as being “non-GAAP financial measures.” In accordance with the rules of the Securities and Exchange Commission, or the SEC, we classify a financial measure as being a non-GAAP (generally accepted accounting principles) financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of operations, balance sheet or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both.

The non-GAAP financial measures that we discuss in this release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in this release may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar, or with names similar, to the non-GAAP financial measures we have discussed in this release when comparing such non-GAAP financial measures.

Tangible book value per share is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as shareholders’ equity less goodwill and core deposit intangibles; and (b) tangible book value per share as tangible common equity (as described in clause (a)) divided by shares of common stock outstanding. For tangible book value per share, the most directly comparable financial measure calculated in accordance with GAAP is our book value per share. A reconciliation of tangible book value per share to book value per share is included in the tables that accompany this release. 

We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.

Important Note Regarding Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of our goals and expectations with respect to earnings, revenue, and expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to anticipated market share growth, and (ii) statements preceded by, followed by or that include the words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “projects,” “outlook” or similar expressions. The actual results might differ materially from those projected in the forward-looking statements for various reasons, including, but not limited to: the ongoing COVID-19 pandemic and measures intended to prevent its spread, which include wide disruptions to business activity that may impact the financial strength of our borrowers; our ability to manage growth or achieve it at all; substantial changes in financial markets; our ability to obtain the synergies and expense efficiencies anticipated from our acquisition activity and branch divestures and consolidations; regulatory changes; changes in interest rates, including the impact of such changes on our net interest margin; loss of deposits and loan demand to other savings and financial institutions; adverse economic conditions that impact our borrowers’ ability to pay their debts when due, including the rapid rise in unemployment associated with the COVID-19 pandemic; and changes in real estate values and the real estate market. 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. Except as required by law, the Company assumes no obligation to update the forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

Mark A. Jeffries
Executive Vice President
Chief Financial Officer
Office: 910-892-7080 and Direct: 910-897-3603
markj@SelectBank.com
SelectBank.com

SELECT BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
                     
    June 30,
2020
  March 31,
2020
  December 31,
2019
  September 30,
2019
  June 30,
2019
    (Unaudited)   (Unaudited)   (Audited)   (Unaudited)   (Unaudited)
        (Dollars in thousands)
ASSETS                    
                     
Cash and due from banks   $   24,037   $   20,030   $   19,110   $   20,052   $   20,397
Interest-earning deposits in other banks   157,521     35,544     50,920     53,093     100,584
Certificates of deposit     -      -      -      500     500
Federal funds sold     9,726     11,673     9,047     10,728     21,961
Investment securities available for sale, at Fair Value   62,958     64,738     72,367     76,941     83,102
Loans held for sale     3,455     1,606     928     1,714     826
Loans     1,249,999     1,039,514     1,029,975     1,014,928     997,062
Allowance for loan losses     (12,054)     (10,586)     (8,324)     (8,056)     (8,303)
  NET LOANS   1,237,945     1,028,928     1,021,651     1,006,872     988,759
                     
Accrued interest receivable     4,400     3,839     4,189     3,902     4,028
Stock in Federal Home Loan Bank of Atlanta, at cost   3,059     3,059     3,045     3,045     3,045
Other non-marketable securities     718     718     719     719     718
Foreclosed real estate     3,561     3,737     3,533     1,442     1,468
Premises and equipment, net     20,893     17,868     17,791     18,150     18,274
Right of use lease asset     8,953     8,414     8,596     8,776     8,953
Bank owned life insurance     30,110     29,950     29,789     29,621     29,451
Goodwill     41,914     24,579     24,579     24,579     24,579
Core deposit intangible ("CDI")     1,856     1,431     1,610     1,803     2,011
Other assets     7,854     7,380     7,202     7,697     8,141
  TOTAL ASSETS $   1,618,960   $   1,263,494   $   1,275,076   $   1,269,634   $   1,316,797
                     
LIABILITIES AND SHAREHOLDERS' EQUITY                  
Deposits:                    
  Demand   $   400,098   $   250,031   $   240,305   $   243,889   $   252,666
  Savings     52,597     41,815     43,128     43,355     46,037
  Money market and NOW     495,609     306,051     280,145     283,414     292,629
  Time     390,449     384,754     429,260     417,015     438,918
  TOTAL DEPOSITS   1,338,753     982,651     992,838     987,673     1,030,250
                     
Short-Term Debt     20,000     20,000     -      -      - 
Long-Term Debt     37,372     37,372     57,372     57,372     57,372
Lease Liability     9,243     8,669     8,813     8,951     9,086
Accrued interest payable     457     536     578     596     637
Accrued expenses and other liabilities     1,597     2,181     2,700     2,993     2,607
  TOTAL LIABILITIES   1,407,422     1,051,409     1,062,301     1,057,585     1,099,952
                     
Shareholders' Equity                    
Common stock     17,863     18,056     18,330     18,513     19,262
Additional paid-in-capital     137,559     138,788     140,870     142,878     150,275
Retained Earnings     54,460     53,779     52,675     49,634     46,395
Common stock issued to deferred compensation trust    (2,553)     (2,791)     (2,815)     (2,730)     (2,652)
Directors' Deferred Compensation Plan Rabbi Trust   2,553     2,791     2,815     2,730     2,652
Accumulated other comprehesive income   1,656     1,462     900     1,024     913
  TOTAL SHAREHOLDERS' EQUITY   211,538     212,085     212,775     212,049     216,845
                     
  TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $   1,618,960   $   1,263,494   $   1,275,076   $   1,269,634   $   1,316,797
                     

SELECT BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                           
  For the Three Months Ended   For the Twelve Months Ended
  June 30,
2020
  March 31,
2020
  December 31,
2019
  September 30,
2019
  June 30,
2019
  December 31,
2019
  December 31,
2018
          (Dollars in thousands, except for share amounts)    
INTEREST INCOME                          
  Loans $   14,086   $   13,589   $   14,124   $   13,924   $   13,515   $   54,605   $   53,796
  Federal funds sold and interest-earning                          
  deposits in other banks 33   168   258   581   456   1,838   1,618
  Investments 381   421   434   503   601   2,003   1,421
TOTAL INTEREST INCOME 14,500   14,178   14,816   15,008   14,572   58,446   56,835
                           
INTEREST EXPENSE                          
Money market, NOW and savings deposits 648   348   420   433   407   1,616   1,339
Time deposits 1,576   1,931   2,075   2,248   1,985   8,061   6,293
Short-term debt 141   87   6   4   26   62   328
Long-term debt 281   352   447   455   457   1,817   1,490
TOTAL INTEREST EXPENSE 2,646   2,718   2,948   3,140   2,875   11,556   9,450
                           
NET INTEREST INCOME 11,854   11,460   11,868   11,868   11,697   46,890   47,385
                           
PROVISION FOR (RECOVERY OF) LOAN LOSSES 1,933   2,273   302   231   (207)   438   (156)
                           
NET INTEREST INCOME AFTER  PROVISION                          
FOR (RECOVERY OF) LOAN LOSSES 9,921   9,187   11,566   11,637   11,904   46,452   47,541
                           
NON-INTEREST INCOME                          
  Fees on the sale of mortgages 355   293   148   218   230   753   497
  Gain on securities 0   0   0   48   0   48   0
  Service charges on deposit accounts 206   338   303   308   284   1,161   1,124
  Other fees and income 850   813   995   874   814   3,457   3,080
TOTAL NON-INTEREST INCOME 1,411   1,444   1,446   1,448   1,328   5,419   4,701
                           
NON-INTEREST EXPENSE                          
  Personnel 5,786   5,632   5,152   5,124   5,031   20,278   18,304
  Occupancy and equipment 986   931   973   1,073   922   3,695   3,666
  Deposit insurance 76   (12)   19   (30)   90   184   628
  Professional Fees 451   372   503   518   483   1,886   1,394
  CDI amortization 195   179   193   208   205   825   1,016
  Merger/acquisition related expenses 709   39   171   128   107   406   1,826
  Information systems 972   1,038   974   852   877   3,492   3,372
  Foreclosed-related expenses 187   5   109   (9)   10   140   115
  Other 1,140   1,063   1,000   1,067   1,086   4,234   4,229
TOTAL NON-INTEREST EXPENSE 10,502   9,247   9,094   8,931   8,811   35,140   34,550
                           
INCOME BEFORE INCOME TAXES 830   1,384   3,918   4,154   4,421   16,731   17,692
                           
INCOME TAXES 149   280   877   915   973   3,696   3,910
NET INCOME $   681   $   1,104   $   3,041   $   3,239   $   3,448   $   13,035   $   13,782
NET INCOME PER COMMON SHARE OUTSTANDING                          
  Basic $   0.04   $   0.06   $   0.17   $   0.17   $   0.18   $   0.69   $   0.87
  Diluted $   0.04   $   0.06   $   0.16   $   0.17   $   0.18   $   0.68   $   0.87
                           
WEIGHTED AVERAGE COMMON                           
Basic Outstanding Shares 18,013,863   18,255,351   18,414,393   19,028,572   19,318,358   19,016,808   15,812,585
Diluted Outstanding Shares 18,030,136   18,287,064   18,460,118   19,073,235   19,359,492   19,063,237   15,877,633


Select Bancorp, Inc.                          
Asset quality                          
                           
  For Periods Ended
  June 30,
2020
  March 31,
2020
  December 31,
2019
  September 30,
2019
  June 30,
2019
  December 31,
2019
  December 31,
2018
  (Dollars in thousands, except for share amounts, unaudited)
Non-accrual loans $   7,979   $   7,201   $   5,941   $   9,083   $   10,521   $   5,941   $   7,257
Accruing TDRs 6,420   5,619   6,207   6,477   6,061   6,207   4,378
Total non-performing loans 14,399   12,820   12,148   15,560   16,582   12,148   11,635
Foreclosed real estate 3,561   3,737   3,533   1,442   1,468   3,533   1,088
Total non-performing assets $   17,960   $   16,557   $   15,681   $   17,002   $   18,050   $   15,681   $   12,723
                           
Accruing loans past due 90 days or more $   1,326   $   1,182   $   1,231   $   2,296   $   2,447   $   1,231   $   3,167
Allowance for loan losses $   12,054   $   10,586   $   8,324   $   8,056   $   8,303   $   8,324   $   8,669
                           
Non-performing loans to period ending loans 1.15%   1.23%   1.18%   1.53%   1.66%   1.18%   1.18%
Non-performing loans & accruing loans past                          
  due 90 days or more to period ending loans 1.26%   1.35%   1.30%   1.76%   1.91%   1.30%   1.50%
Allowance for loans to period end loans 0.96%   1.02%   0.81%   0.79%   0.83%   0.81%   0.88%
Allowance for loans to non-performing loans 84%   83%   69%   52%   50%   69%   75%
Allowance for loans to non-performing Assets 67%   64%   53%   47%   46%   53%   68%
Allowance for loans to non-performing Assets                          
  and accruing loans past due 90 days or more 63%   60%   49%   42%   41%   49%   55%
Non-performing assets to total assets 1.11%   1.31%   1.23%   1.34%   1.37%   1.23%   1.01%
Non-performing assets to accruing loans                           
  past due 90 days or more to total assets 1.19%   1.40%   1.33%   1.52%   1.56%   1.33%   1.26%
                           
                           
SELECT BANCORP, INC.                          
Reconciliation of GAAP to Non-GAAP Measures                          
($ in thousands, except per share data, unaudited)                          
                           
  For the Three Months Ended   For the Twelve Months Ended
  June 30,
2020
  March 31,
2020
  December 31,
2019
  September 30,
2019
  June 30,
2019
  December 31,
2019
  December 31,
2018
Net interest margin:                          
Net Interest Margin-tax equivalent (1) $   11,883   $   11,489   $   11,901   $   11,903   $   11,740   $   47,037   $   47,535
Purchased loan accretion and early payoff charges (620)   (105)   (226)   (210)   (268)   (904)   (3,051)
Net Interest Margin(2) (Non-GAAP) $   11,263   $   11,384   $   11,675   $   11,693   $   11,472   $   46,133   $   44,484
                           
Loans receivable interest income:                          
Loans receivable interest income $   14,086   $   13,589   $   14,124   $   13,924   $   13,515   $   54,645   $   53,822
Purchased loan accretion and early payoff charges (620)   (105)   (226)   (210)   (268)   (904)   (3,051)
Loans receivable interest income (Non-GAAP) $   13,466   $   13,484   $   13,898   $   13,714   $   13,247   $   53,741   $   50,771
                           
Acquired and non-acquired loans:                          
Acquired loans receivable $   213,466   $   122,363   $   129,595   $   141,765   $   152,090   $   129,595   $   186,243
Non-acquired loans receivable 1,036,533   917,151   900,380   873,163   844,972   900,380   799,797
Total gross loans receivable  $  1,249,999   $   1,039,514   $   1,029,975   $  1,014,928   $   997,062   $   1,029,975   $   986,040
% Acquired 17.1%   11.8%   12.6%   14.0%   15.3%   12.6%   18.9%
                           
Non-acquired loans 1,036,533   917,151   900,380   873,163   844,972   900,380   799,797
Allowance for loan losses 12,054   10,586   8,324   8,056   8,303   8,324   8,669
Allowance for loan losses to non-acquired loans (Non-GAAP) 1.16%   1.15%   0.92%   0.92%   0.98%   0.92%   1.08%
                           
Total gross loan receivable  1,249,999   1,039,514   1,029,975   1,014,928   997,062   1,029,975   986,040
Allowance for loan losses 12,054   10,586   8,324   8,056   8,303   8,324   8,669
Allowance for loan losses to total gross loans receivable 0.96%   1.02%   0.81%   0.79%   0.83%   0.81%   0.88%
                           
                           
                           
  For Periods Ended
  June 30,
2019
  March 31,
2019
  December 31,
2019
  September 30,
2019
  June 30,
2019
  December 31,
2019
  December 31,
2018
Tangible common equity                          
  Total shareholders' equity $   211,538   $   212,085   $   212,775   $   212,049   $   216,845   $   212,775   $   209,611
  Adjustment:                          
  Goodwill   41,914     24,579     24,579     24,579     24,579     24,579     24,579
  Core deposit intangibles   1,856     1,431     1,610     1,803     2,011     1,610     2,085
Tangible common equity $   167,768   $   186,075   $   186,586   $   185,667   $   190,255   $   186,586   $   182,947
Common shares outstanding(3)  17,862,554     18,055,692     18,330,058    18,513,078    19,261,989     18,330,058     19,311,505
Book value per common share(4) $   11.84   $   11.75   $   11.61   $   11.45   $   11.26   $   11.61   $   10.85
Tangible book value per common share(5) $   9.39   $   10.31   $   10.18   $   10.03   $   9.88   $   10.18   $   9.47
                           
  (1) Net interest margin-tax equivalent reflects tax-exempt income on a tax-equivalent basis.                
  (2) Net interest margin-core and yield on loans - core excludes the impact of purchase accounting accretion, loan payoff charges and related deferred fees recognized related to early loan repayments. 
  (3) Excludes the dilutive effect of common stock issuable upon exercise of stock options.
  (4) We calculate book value per common share as shareholders' equity less preferred stock at the end of the relevant period divided by the outstanding number of shares of our common stock at the end of the relevant period.
  (5) We calculate the tangible book value per common share as total shareholders' equity less goodwill, preferred stock and core deposit intangibles, divided by the number of outstanding shares of our common stock at the end of the relevant period.


Select Bancorp, Inc.                              
Selected Financial Information and Other Data                        
($ in thousands, except per share data)                            
                               
  For the Quarter Ended   For the Year Ended
                               
  June 30,   March 31,   December 31,   September 30,   June 30,   December 31,   December 31,   December 31,
  2020 2020 2019   2019   2019 2019 2018 2017
                     
Summary of Operations:                          
Total interest income $   14,500   $   14,178   $   14,816   $   15,008   $   14,572   $   58,446   $   56,835   $   39,617
Total interest expense   2,646     2,718     2,948     3,140     2,875     11,556     9,450     5,106
Net interest income   11,854     11,460     11,868     11,868     11,697     46,890     47,385     34,511
Provision for loan losses   1,933     2,273     302     231     (207     438     (156     1,367
Net interest income after provision   9,921     9,187     11,566     11,637     11,904     46,452     47,541     33,144
Noninterest income   1,411     1,444     1,446     1,448     1,328     5,419     4,701     3,072
Merger/acquisition related expenses   709     39     171     128     107     406     1,826     2,166
Noninterest expense   9,793     9,208     8,923     8,803     8,704     34,734     32,724     25,153
Income before income taxes   830     1,384     3,918     4,154     4,421     16,731     17,692     8,897
Provision for income taxes   149     280     877     915     973     3,696     3,910     5,712
Net Income   681     1,104     3,041     3,239     3,448     13,035     13,782     3,185
Dividends on Preferred Stock     -       -       -       -        -       -       -       -
Net income available to common  shareholders $   681   $   1,104   $   3,041   $   3,239   $   3,448   $   13,035   $    13,782   $   3,185
                               
Share and Per Share Data:                              
Earnings per share - basic $    0.04   $   0.06   $   0.17   $    0.17   $   0.18   $   0.69   $   0.87   $   0.27
Earnings per share - diluted $   0.04   $   0.06   $   0.16   $   0.17   $   0.18   $   0.68   $   0.87   $   0.27
Book value per share $   11.84   $    11.75   $   11.61   $   11.45   $   11.26   $   11.61   $   10.85   $   9.72
Tangible book value per share(1) $   9.39   $   10.31   $   10.18   $   10.03   $   9.88   $    10.18   $   9.47   $   7.72
Ending shares outstanding   17,862,554     18,055,692     18,330,058     18,513,078     19,261,989     18,330,058     19,311,505     14,009,137
Weighted average shares outstanding:                              
Basic   18,134,607     18,255,351     18,414,393     19,028,572     19,318,358     19,016,808     15,812,585     11,763,050
Diluted   18,157,992     18,287,064     18,460,118     19,073,235     19,359,492     19,063,237     15,877,633     11,826,977
                               
Selected Performance Ratios:                              
Return on average assets(2)   0.18%     0.35%     0.95%     0.99%     1.10%     1.03%     1.12%     0.35%
Return on average equity(2)   1.28%     2.07%     5.67%     5.93%     6.41%     6.08%     8.51%     2.93%
Net interest margin   3.45%     4.03%     4.05%     3.94%     4.06%     4.04%     4.19%     4.09%
Efficiency ratio (3)   73.83%     71.36%     67.02%     66.11%     66.83%     66.40%     62.83%     66.93%
                               
Period End Balance Sheet Data:                              
Gross loans $   1,249,999   $   1,039,514   $   1,029,975   $   1,014,928   $   997,062   $   1,029,975   $   986,040   $   982,626
Total interest-earning assets   1,222,416     1,137,010     1,167,857     1,153,612     1,148,417     1,167,857     1,119,344     1,063,322
Goodwill   41,914     24,579     24,579     24,579     24,579     24,579     24,579     24,904
Core deposit intangible   1,856     1,431     1,610     1,803     2,011     1,610     2,085     3,101
Total assets   1,618,960     1,263,494     1,275,076     1,269,634     1,316,797     1,275,076     1,258,525     1,194,135
Deposits   1,338,753     982,651     992,838     987,673     1,030,250     992,838     980,427     995,044
Short-term debt   20,000     20,000     -     -     -     -     7,000     28,279
Long-term debt   37,372     37,372     57,372     57,372     57,372     57,372     57,372     19,372
Shareholders' equity   211,538     212,085     212,775     212,049     216,845     212,775     209,611     136,115
                               
Selected Average Balances:                              
Gross Loans $   1,193,985   $   1,020,630   $   1,017,750   $   1,013,331   $   982,876   $   1,004,051   $   987,634   $   732,089
Total interest-earning assets   1,321,172     1,147,631     1,166,758     1,197,266     1,160,387     1,164,149     1,119,344     813,773
Core Deposit Intangible   1,529     1,507     1,680     1,878     1,741     1,812     2,547     640
Total Assets   1,520,278     1,255,943     1,272,475     1,300,137     1,261,972     1,268,728     1,228,576     898,943
Deposits   1,237,343     972,162     989,721     1,013,504     970,011     981,132     989,838     738,310
Short-term debt   20,000     12,747     -     -     6,824     3,414     21,393     34,523
Long-term debt   37,438     44,625     57,372     57,372     57,372     57,372     49,357     14,239
Shareholders' equity   213,796     214,502     212,849     216,556     215,722     214,324     161,953     108,709
                               
Asset Quality Ratios:                              
Nonperforming loans (4) $   14,399   $   12,820   $    12,148   $   15,560   $    16,582   $   12,148   $   11,635   $   6,978
Other real estate owned   3,561     3,737     3,533     1,442     1,468     3,533     1,088     1,258
Allowance for loan losses   12,054     10,586     8,324     8,056     8,303     8,324     8,669     8,835
Nonperforming loans (4) to period-end loans   1.15%     1.23%     1.18%     1.53%     1.66%     1.18%     1.18%     0.71%
Allowance for loan losses to period-end loans   0.96%     1.02%     0.81%     0.79%     0.83%     0.81%     0.88%     0.90%
Delinquency ratio (5)   0.22%     0.43%     0.34%     0.09%     0.12%     0.34%     0.19%     0.48%
Net loan charge-offs (recoveries) to average loans (2)   0.16%     0.00%     0.01%     0.19%     0.00%     0.08%     0.00%     0.13%
                               
(1)  Tangible book value per share (a non GAAP measure) is equal to total shareholders’ equity less goodwill and core deposit intangibles, divided by the number of outstanding shares of our common stock at the end of the relevant period. Please refer to the table above for a reconciliation of this non-GAAP measure.
(2)  Annualized. 
(3)  Efficiency ratio is calculated as a non-interest expenses divided by the sum of net interest income and non-interest income.
(4)  Nonperforming loans consist of non-accrural loans and accruing TDR loans. 
(5)  Delinquency Ratio includes loans 30-89 days past due and excludes non-accrual loans. 

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