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

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Nov 15, 2010
New Century Bancorp Inc. (NCBC, Financial) filed Quarterly Report for the period ended 2010-09-30.

New Century Bancorp Inc. has a market cap of $26.27 million; its shares were traded at around $3.8 with and P/S ratio of 0.74.

Highlight of Business Operations:

During the first nine months of 2010, total assets grew by $12.8 million to $643.2 million as of September 30, 2010. Earning assets at September 30, 2010 totaled $594.4 million and consisted of $459.8 million in net loans, $82.7 million in investment securities, $49.4 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 third quarter of 2010 were $548.9 million and $49.9 million, respectively.

Since the end of 2009, gross loans have decreased by $13.3 million to $467.9 million as of September 30, 2010. Gross loans consisted of $62.1 million in commercial and industrial loans, $199.0 million in commercial real estate loans, $27.6 million in multi-family residential loans, $10.1 million in consumer loans, $101.7 million in residential real estate, and $67.4 million in construction loans.

At September 30, 2010, non-earning assets were $48.8 million, which reflects an increase of $6.9 million from the $41.9 million as of December 31, 2009. Non-earning assets as of September 30, 2010 included $10.7 million in cash and due from banks, bank premises and equipment of $12.9 million, core deposit intangible of $0.7 million, accrued interest receivable of $2.7 million, foreclosed real estate of $3.8 million, $4.3 million in income taxes receivable and other assets totaling $6.0 million. Also, the Company has an investment in bank owned life insurance of $7.7 million at September 30, 2010, which increased $196,000 from December 31, 2009 due to an increase in cash surrender value. Since the income on this investment is included in non-interest income instead of interest income, the asset is not included in the Companys calculation of earning assets.

Total deposits at September 30, 2010 were $548.9 million and consisted of $73.9 million in non-interest-bearing demand deposits, $99.4 million in money market and NOW accounts, $24.5 million in savings accounts, and $351.1 million in time deposits. Total deposits grew by $8.6 million from $540.2 million as of December 31, 2009. The Bank had $4.0 million in brokered deposits as of September 30, 2010.

As of September 30, 2010, there were $9.7 million of loans that were considered to be impaired. Of this amount, $1.9 million required a specific reserve of $475,000. The other $7.8 million of impaired loans that did not require a specific reserve had collateral values that exceeded the Companys recorded investment. During the third quarter, management felt it was prudent to charge off $3.5 million in reserves that were held at June 30, 2010 on $4.2 million of collateral dependent impaired loans and, as a result, these loans have been charged down to the point where no reserves are considered necessary at September 30, 2010. The large increase in charge offs during the third quarter caused an increase in the Companys historical charge-off ratios and, correspondingly, general reserves on the performing loan portfolio. The reserves on the performing loan portfolio were $7.6 million or 1.66% of the performing loan portfolio at September 31, 2010, compared to $6.2 million or 1.31% of the performing loan portfolio at June 30, 2010.

Non-Interest Income. Non-interest income for the quarter ended September 30, 2010 was $648,000, a decrease of $164,000 from the third quarter of 2009. Service charges on deposit accounts decreased $177,000 to $370,000 for the quarter ended September 30, 2010 compared to $547,000 for the same period for 2009, primarily as a result of regulatory changes relating to the assessment of fees on overdraft accounts. Mortgage fee income increased to $73,000 for the quarter ended September 30, 2010 compared to $49,000 the same period in 2009. Other non-deposit fees and income decreased by $11,000 to $205,000 for the quarter ended September 30, 2010.

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