DUNN, N.C., Aug. 6 /PRNewswire-FirstCall/ -- New Century Bancorp
(the "Company" -- Nasdaq: NCBC), the holding company for New
Century Bank and New Century Bank South, reported a net loss for
the quarter ended June 30, 2007 of $197,000 compared to net income
of $1.3 million for the same period in 2006. Basic and diluted
earnings per share for second quarter 2007 were ($0.03), compared
to basic and diluted earnings per share for second quarter 2006 of
$0.25 and $0.23, respectively. For the six month period ended June
30, 2007, net income for the Company was $1.1 million, compared to
$2.3 million for the same period in 2006. Basic and diluted
earnings per share for the first six months of 2007 were $0.16,
compared to basic and diluted earnings per share for the first six
months of 2006 of $0.46 and $0.43, respectively. Second quarter
results were significantly impacted by a $2.5 million addition to
the Company's allowance for loan losses necessitated by
deficiencies in the underwriting for certain loans included in the
loan portfolio of the Company's subsidiary, New Century Bank. As of
June 30, 2007, the Company reported total assets of $590.5 million
compared to $444.9 million at June 30, 2006, an increase of 33%.
Total deposits were $502.3 million and total loans were $455.9
million at the end of second quarter 2007, compared to total
deposits of $377.8 million and total loans of $348.1 million as of
the end of second quarter 2006, increases of 33% and 31%,
respectively. Growth was enhanced by the Company's July 2006
acquisition of Progressive State Bank which, based on estimated
fair values, had $65.9 million in total assets, $33.7 million in
loans and $55.8 million in deposits. The underwriting matters were
identified by management and continue to be evaluated through an
extensive review of the bank's loan portfolio, both internally and
with the assistance of an external credit review firm. Also during
the quarter, $3.7 million in loans were charged-off. These losses
had been provided for through additions to the allowance for loan
losses during 2006. As a result of the aforementioned underwriting
matters, it is likely that New Century Bank may be subject to
informal regulatory action, such as a memorandum of understanding,
with its state and federal regulators. According to William L.
Hedgepeth II, president and CEO of New Century Bancorp, "To address
any concerns in advance of this possible action, we recently hired
two experienced credit professionals and reorganized our credit
function to ensure that New Century Bank adheres to the standards
required by the FDIC and to the standards that we ourselves believe
are hallmarks of a strong and well-managed organization. We
realigned management to provide better oversight of our lending and
credit departments. While we report results for the Company as a
whole, based on our review to date all of the loans that have been
adversely reclassified were originated by New Century Bank. None of
the loans originated by New Century Bank South were included in the
reclassification and New Century Bank South contributed net income
of $1.3 million for the first six months of 2007. "New Century
Bancorp has achieved seven years of growth and profitability.
During the second quarter our Company experienced good balance
sheet growth, reported a 4.05% net interest margin, and gained a
number of new commercial checking accounts through a
well-implemented marketing campaign. We are moving forward in the
right direction. We appreciate the continued support of our
customers, shareholders, and the communities we serve." New Century
Bank has offices in Dunn, Clinton, Goldsboro, and Lillington, and
New Century Bank South has office in Fayetteville, Dublin,
Lumberton, Pembroke and Raeford. Stock Symbol: NASDAQ: NCBC
http://www.newcenturybanknc.com/ The information as of and for the
quarter and six months ended June 30, 2007, as presented is
unaudited. 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,
earnings per share, revenue, expenses and the growth rate in such
items, as well as other measures of economic performance, including
statements relating to estimates of credit quality trends, 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, our ability to manage
growth, our limited operating history, substantial changes in
financial markets, regulatory changes, changes in interest rates,
loss of deposits and loan demand to other savings and financial
institutions, 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. New Century Bancorp, Inc. Selected
Financial Information and Other Data ($ in thousands, except per
share data) At or for the three At or for the six months months
Ended June 30, Ended June 30, 2007 2006 2007 2006 Summary of
Operations: Total interest income $10,638 $8,227 $20,658 $15,881
Total interest expense 5,153 3,719 10,035 7,040 Net interest income
5,485 4,508 10,623 8,841 Provision for loan losses 2,894 192 3,044
601 Net interest income after provision 2,591 4,316 7,579 8,240
Noninterest income 1,161 678 2,071 1,231 Noninterest expense 4,138
3,014 8,012 5,752 Income (Loss) before income taxes (386) 1,980
1,638 3,719 Provision for income taxes (189) 709 566 1,378 Net
income (Loss) $(197) $1,271 $1,072 $2,341 Share and Per Share Data
(1): Earnings per share - basic $(0.03) $0.25 $0.16 $0.46 Earnings
per share - diluted (0.03) 0.23 0.16 0.43 Book value per share 8.95
6.90 8.95 6.90 Tangible book value per share 7.44 6.90 7.44 6.90
Ending shares outstanding 6,550,272 5,109,583 6,550,272 5,109,583
Weighted average shares outstanding: Basic 6,540,736 5,109,553
6,520,663 5,105,032 Diluted 6,775,356 5,478,553 6,771,458 5,479,280
Selected Performance Ratios: Return on average assets -0.13% 1.14%
0.38% 1.06% Return on average equity -1.32% 14.60% 3.65% 13.70% Net
interest margin 4.05% 4.28% 4.03% 4.25% Efficiency ratio (2) 62.26%
58.12% 63.12% 57.11% Period End Balance Sheet Data: Loans, net of
unearned income $455,939 $348,116 $455,939 $348,116 Total Earning
Assets 545,952 426,285 545,952 426,285 Goodwill and other
intangible assets 9,911 - 9,911 - Total assets 590,486 444,922
590,486 444,922 Deposits 502,258 377,794 502,258 377,794 Short term
debt 15,119 17,519 15,119 17,519 Long term debt 12,372 12,372
12,372 12,372 Shareholders' equity 58,649 35,269 58,649 35,269
Selected Average Balances: Gross Loans $456,355 $340,723 $446,422
$338,387 Total Earning Assets 543,157 422,957 531,969 419,845
Goodwill and other intangible assets 9,930 - 9,949 - Total assets
587,238 447,853 575,624 444,117 Deposits 495,091 379,715 484,091
375,596 Short term debt 17,243 18,795 17,342 19,515 Long term debt
12,372 12,372 12,372 12,372 Shareholders' equity 60,055 34,923
59,297 34,455 Asset Quality Ratios: Nonperforming assets $3,634
$956 $3,634 $956 Allowance for loan losses 6,682 5,749 6,682 5,749
Nonperforming loans (3) to period-end loans 0.72% 0.25% 0.72% 0.25%
Allowance for loan losses to period-end loans (4) 1.47% 1.65% 1.47%
1.65% Net loan charge-offs to average loans 3.33% 0.13% 1.74% 0.13%
(1) Adjusted for all periods presented to reflect the effects of a
six- for-five stock split in the form of a 20% stock dividend in
December 2006. (2) Efficiency ratio is calculated as non-interest
expenses divided by the sum of net interest income and non-interest
income. (3) Nonperforming loans consist of non-accrual loans and
restructured loans. (4) Allowance for loan losses to period-end
loans ratio excludes loans held for sale. DATASOURCE: New Century
Bancorp CONTACT: Lisa F. Campbell, Executive Vice President, Chief
Operating Officer and Chief Financial Officer of New Century
Bancorp, +1-910-892-7080, Web site:
http://www.newcenturybanknc.com/
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