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New Century Bancorp Inc. Reports Operating Results (10-Q)

August 13, 2010 | About:
10qk

10qk

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New Century Bancorp Inc. (NCBC) filed Quarterly Report for the period ended 2010-06-30.

New Century Bancorp Inc. has a market cap of $39.6 million; its shares were traded at around $5.79 with a P/E ratio of 23.2 and P/S ratio of 1.2.

Highlight of Business Operations:

During the first six months of 2010, total assets grew by $32.6 million to $663.0 million as of June 30, 2010. Earning assets at June 30, 2010 totaled $619.9 million and consisted of $480.9 million in net loans, $86.0 million in investment securities, $50.5 million in overnight investments and interest-bearing deposits in other banks and $2.5 million in non-marketable equity securities. Total deposits and shareholders equity at the end of the second quarter of 2010 were $566.0 million and $56.4 million, respectively.

Since the end of 2009, gross loans have increased by $9.7 million to $490.9 million as of June 30, 2010. Gross loans consisted of $75.2 million in commercial and industrial loans, $196.2 million in commercial real estate loans, $25.7 million in multi-family residential loans, $12.0 million in consumer loans, $101.9 million in residential real estate, and $79.9 million in construction loans.

At June 30, 2010, non-earning assets were $43.1 million, which reflects an increase of $1.2 million from the $41.9 million as of December 31, 2009. Non-earning assets as of June 30, 2010 included $9.8 million in cash and due from banks, bank premises and equipment of $13.1 million, core deposit intangible of $0.8 million, accrued interest receivable of $2.7 million, foreclosed real estate of $3.2 million, and other assets totaling $5.9 million. Also, the Company has an investment in bank owned life insurance of $7.6 million at June 30, 2010, which increased $131,000 from December 31, 2009 due to an increase in cash surrender value. Since the income on this investment is included in non-interest income, the asset is not included in the Companys calculation of earning assets.

As of June 30, 2010, there were $13.9 million of loans that were considered to be impaired due to being in non-accrual status. $8.4 million of these impaired loans required a specific reserve of $3.8 million at June 30, 2010. At December 31, 2009, $16.5 million in loans, which was comprised of $16.0 million in non-accrual loans and $500,000 in other loans that management had classified as impaired for other reasons, were classified as impaired of which $9.7 million required a specific reserve of $4.2 million. The allowance for loan losses was $10.0 million at June 30, 2010 or 2.04% of gross loans outstanding. This is a decrease of 11 basis points from the 2.15% of gross loans at December 31, 2009. The allowance for loan losses at June 30, 2010 represented 72.1% of impaired loans compared to 63.3% at December 31, 2009. This decrease in the allowance for the first six months of 2010 resulted from provisions for loan losses of $1.9 million, partially offset by net charge-offs of $1.8 million and $500,000 reclassified to other liabilities for loan participants share on impaired loans. Most of the loans charged-off in 2010 were classified as impaired at December 31, 2009 and had been specifically reserved for as part of the allowance for loan loss calculation. It is managements assessment that the allowance for loan losses as of June 30, 2010 is appropriate in light of the risk inherent within the Companys loan portfolio. No assurances, however, can be made that further adjustments to the allowance for loan losses may not be deemed necessary.

Non-Interest Income. Non-interest income for the quarter ended June 30, 2010 was $670,000, a decrease of $90,000 from the second quarter of 2009. Service charges on deposit accounts decreased $41,000 to $438,000 for the quarter ended June 30, 2010 compared to $479,000 for the same period for 2009. Mortgage fee income declined $32,000 to $54,000 for the quarter ended June 30, 2010 compared to the same period in 2009. Other non-deposit fees and income decreased $17,000 to $178,000 for the quarter ended June 30, 2010 as compared to the same period in 2009 primarily as a result of a $23,000 decrease in rental income on foreclosed real estate.

Non-Interest Income. Non-interest income for the two quarters ended June 30, 2010 was $1.3 million, a decrease of $245,000 from the first two quarters of 2009. Service charges on deposit accounts declined $37,000 to $877,000 for the two quarters ended June 30, 2010 as compared to $914,000 for the same period for 2009. Mortgage fee income declined $152,000 to $81,000 for the six months ended June 30, 2010 compared to the same period in 2009, primarily as a result of the Companys third party provider for the funding of mortgage loans going out of business in August of 2009 together with the continued softness in the real estate market. Other non-deposit fees and income decreased $56,000 to $384,000 for the two quarters ended June 30, 2010 as compared to the same period in 2009 primarily as a result of a $47,000 decrease in rental income on foreclosed real estate.

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