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BNC Bancorp Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 10, 2012 05:32PM
BNC Bancorp (BNCN) filed Quarterly Report for the period ended 2012-03-31. Bnc Bancorp has a market cap of $68.3 million; its shares were traded at around $7.5 with a P/E ratio of 14.4 and P/S ratio of 0.6. The dividend yield of Bnc Bancorp stocks is 0.7%. Bnc Bancorp had an annual average earning growth of 3.6% over the past 10 years.
Highlight of Business Operations:During the first three months of 2012, with the impact of the economic slowdown ongoing, management has continued to focus on managing credit quality, maintaining adequate liquidity sources and managing our capital. We continue our on-going efforts of meeting the financial services needs of our customers and communities, especially in this challenging economic environment. We are committed to building long-term value for our shareholders, and in the changing regulatory and economic landscape, core deposit growth will be an even more critical element for finding successful and profitable growth initiatives. We have a retail banking team that oversees product development, sales, training, accountability and consistency and quality of delivery in each of our offices in our banking regions. Credit costs remain high due to elevated nonperforming asset levels and our continuing efforts to resolve asset quality issues. Weaknesses in residential development and rising unemployment levels in our market areas resulted in higher charge-offs, and a higher allowance for loan losses in 2012 also impacted earnings. We continue to focus on accelerating the sales cycle for OREO, including taking substantial discounts on the larger OREO properties.
Our net income available to common shareholders for the first quarter ended March 31, 2012 was $1.1 million, or $0.11 per diluted share, compared to $917,000, or $0.09 per diluted share, for the first quarter in 2011. In the first quarter of 2012, the Company incurred $1.2 million of one-time expenses associated with merger and acquisition activities, which reduced after-tax diluted earnings per share by $0.07. The annualized return on average assets was 0.29% for the first quarters of 2012 and 2011.
Total interest income (FTE) increased $2.0 million for the first quarter of 2012 when compared to the same quarter of 2011. During the first quarter of 2012, average loans increased $191.3 million while the average yield on loans decreased by 9 basis points and average investment securities decreased $6.3 million while the average yield on investment securities decreased 53 basis points compared to the first quarter of 2011. Average loans as a percentage of interest-earning assets increased to 80.7% for the quarter ended March 31, 2012, compared to 79.6% for the prior year quarter. In addition, the slight decrease in net interest margin (FTE) was primarily due to the continued low rate environment and the overall decrease in average rates for interest-earning assets. See the interest rate/volume table below for the individual component changes.
Non-interest income was $5.8 million for the first quarter of 2012 and $12.2 million for the fourth quarter of 2011, compared to $2.4 million for the prior year first quarter. Included in non-interest income for the first quarter of 2012 was $1.6 million of net gains on sales of investment securities, and $1.2 million of income associated with FDIC receivable and related loss-share receipts. Excluding the sales of investment securities and the FDIC related income, non-interest income was $3.0 million for the current quarter, an increase of 45.2% from the $2.1 million reported for the first quarter of 2011 and consistent with the $3.0 million reported in the fourth quarter of 2011.
Total assets at March 31, 2012 were $2.41 billion, a decrease of $46.0 million when compared to total assets at December 31, 2011. Total earning assets, which are comprised of interest-earning balances at banks, investment securities, loans held for sale and loans, were $2.13 billion at March 31, 2012 and $2.15 billion at December 31, 2011. Earning assets serve as our primary revenue source. Total liquid assets, which include cash and cash equivalents and securities available for sale at March 31, 2012 were 12.0% of total assets, or $289.4 million, a $48.7 million decrease from the $338.1 million reported at December 31, 2011.
Stocks Discussed: BNCN,