ECB Bancorp, Inc. Reports 2012 Annual and Fourth Quarter Results

ECB Bancorp, Inc. Reports 2012 Annual and Fourth Quarter Results

ENGELHARD, N.C.--(BUSINESS WIRE)-- ECB Bancorp, Inc. (NYSE-MKT:ECBE) ("ECB" or the "Company") today announced its results for the twelve months and three months ended December 31, 2012.

2012 Annual and Fourth Quarter Financial Highlights


For the twelve months ended December 31, 2012, net income was $2,992,000 compared to a net loss for the twelve months ended December 31, 2011 of ($1,024,000). After adjusting for $1,063,000 in preferred stock dividends and accretion of warrant discount, the net income available to common shareholders for the twelve months ended December 31, 2012 was $1,929,000 or $0.68 per diluted share compared to a net loss attributable to common shareholders of ($2,087,000) or ($0.73) per diluted share for the year 2011.

For the three months ended December 31, 2012, the net income totaled $378,000, compared to a net loss of ($1,612,000) in the three months ended December 31, 2011. After adjusting for $266,000 in preferred stock dividends and the accretion of warrant discount, the net income available to common shareholders for the three months ended December 31, 2012 was $112,000 or $0.04 per diluted share, compared to the loss attributable to common shareholders of ($1,878,000) or ($0.66) per diluted share for the three months ended December 31, 2011.

Other Annual Financial Highlights include:

  • Loans increased 2.6% to $509,371,000 at December 31, 2012 compared to $496,542,000 at December 31, 2011.
  • Annual Net interest income after provision for loan losses increased 27.2% to $23,514,000 for the twelve months ended December 31, 2012 versus $18,488,000 for the same period a year ago.
  • Total interest expense for the twelve months ending December 31, 2012 declined (31.3%) to $6,942,000 from $10,106,000 for the same period in 2011.
  • Non-interest income for the twelve months ended December 31, 2012 net of securities gains was $7,144,000, an increase of 15.8% compared to $6,169,000 of non-interest income net of securities gains for the same period in 2011.
  • Provision for loan losses charged to operations for the twelve months ended December 31, 2012 totaled $3,401,000, a decrease of (59.9%) compared to the $8,483,000 provision charged to operations for the same period in 2011.

Dwight Utz, President and Chief Executive Officer, stated: "2012 has certainly been a transitional year as it relates to ECB's return to profitability. I am very proud of bank's overall performance and the contributions of our associates. However, the most significant milestone in the banks history also took place in September when the Board and I made the strategic decision to merge our company with Crescent Financial Bancshares (VantageSouth Bank). As we enter 2013 the process to gain regulatory approval and begin the integration of the two companies is well underway. The combined franchise value and the earnings capacity that the new organization will represent is taking shape and will drive continued shareholder value in 2013 and beyond."

Thomas M. Crowder, Executive Vice President and Chief Financial Officer, stated: "We expect rates to continue to remain low in 2013 and expect to see our cost of funding continue to decline as we move through the first half of 2013. Net interest margins expanded slightly in 2012 and we are working hard to continue that trend in 2013."

Mr. Utz concluded: "With the combination of East Carolina Bank with VantageSouthBank, we are excited about the benefits this will accrue to shareholders in the way of a stronger capital base and a more diversified footprint that will assist in stronger consistent future earnings. For our banking clients this merger will bring a larger branch network, more flexibility to our borrowing bank clients and the financial ability to bring new innovative services to our market place."

About ECB Bancorp, Inc.

ECB Bancorp, Inc. is a bank holding company, headquartered in Engelhard, North Carolina, whose wholly-owned subsidiary, The East Carolina Bank, is a state-chartered, independent community bank insured by the FDIC. The Bank provides a full range of financial services through its 25 offices covering eastern North Carolina from Currituck to Ocean Isle Beach and Greenville to Hatteras. The Bank also provides mortgages, insurance services through the Bank's licensed agents, and investment and brokerage services offered through a third-party broker-dealer. The Company's common stock is listed on The NYSE-Amex Market under the symbol "ECBE". More information can be obtained by visiting ECB's web site at www.myecb.com.

"Safe Harbor Statement" Under the Private Securities Litigation Reform Act of 1995

Statements in this Press Release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, expectations or beliefs about future events or results, and other statements that are not descriptions of historical facts, may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors discussed in the Company's 2011 Annual Report on Form 10-K and in other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements may be identified by terms such as "may", "will", "should", "could", "expects", "plans", "intends", "anticipates", "feels", "believes", "estimates", "predicts", "forecasts", "potential" or "continue", or similar terms or the negative of these terms, or other statements concerning opinions or judgments of the Company's management and Board of Directors about future events. Factors that could influence the accuracy of such forward-looking statements include, but are not limited to: pressures on the Company's earnings, capital and liquidity resulting from current and future conditions in the credit and equity markets; the financial success or changing strategies of the Company's customers; actions of government regulators or changes in laws, regulations or accounting standards that adversely affect our business; changes in the interest rate environment and the level of market interest rates that reduce our net interest margins and/or the values of loans we make and securities we hold; weather and similar conditions, particularly the effect of hurricanes on the Company's banking and operations facilities and on the Company's customers and the communities in which it does business; continued or unexpected increases in credit losses in the Company's loan portfolio; continued adverse economic conditions and real estate values in our banking market (particularly as those conditions affect our loan portfolio, the abilities of our borrowers to repay their loans, and the values of loan collateral); and other developments or changes in our business that we do not expect.Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. All forward-looking statements attributable to the Company are expressly qualified in their entirety by the cautionary statements in this paragraph. The Company has no obligation, and does not intend, to update these forward-looking statements.

         
ECB BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
December 31, 2012 and 2011
(Dollars in thousands, except per share data)
 
 
December 31, December 31,
2012 2011*
Assets
Non-interest bearing deposits and cash $15,940 $18,363
Interest bearing deposits 61 63
Overnight investments 20,080 6,305
Total cash and cash equivalents 36,081 24,731
 
Investment securities
Available-for-sale, at market value (cost of $293,034 and
$338,685 at December 31, 2012 and 2011, respectively) 294,771 339,450
 
Loans held for sale 3,917 2,866
 
Loans 509,371 496,542
Allowance for loan losses (10,272) (12,092)
Loans, net 499,099 484,450
 
Real estate and repossessions acquired in settlement of loans, net 6,413 6,573
Federal Home Loan Bank common stock, at cost 3,790 3,456
Bank premises and equipment, net 25,569 26,289
Accrued interest receivable 4,342 5,308
Bank owned life insurance 12,156 11,778
Other assets 13,485 16,376
Total $899,623 $921,277
 
Liabilities and Shareholders' equity
Deposits
Demand, noninterest bearing $142,293 $135,732
Demand, interest bearing 303,104 270,119
Savings 56,026 55,517
Time 250,243 336,277
Total deposits 751,666 797,645
 
Accrued interest payable 408 519
Short-term borrowings 42,942 11,679
Long-term obligations 16,000 25,500
Other liabilities 5,142 5,491
Total liabilities 816,158 840,834
 
Shareholders' equity
Preferred stock, Series A 17,620 17,454
Common stock, par value $3.50 per share 10,167 9,974
Capital surplus 26,024 25,873
Warrants 878 878
Retained earnings 27,855 25,926
Accumulated other comprehensive income (loss) 921 338
Total shareholders' equity 83,465 80,443
Total $899,623 $921,277
 
Common shares outstanding 2,904,841 2,849,841
Common shares authorized ($3.50 par value) 50,000,000 50,000,000
Preferred shares outstanding 17,949 17,949
Preferred shares authorized 2,000,000 2,000,000
Non-voting common shares authorized 2,000,000 2,000,000
 

* Derived from audited consolidated financial statements.

 
ECB BANCORP, INC. AND SUBSIDIARY
Consolidated Results of Operations
For the three and twelve months ended December 31 2012 and 2011 (unaudited)
(Dollars in thousands, except per share data)
               
Three months ended Twelve months ended
December 31, December 31,
2012 2011 2012 2011
Interest income:
Interest and fees on loans $6,625 $6,870 $26,139 $28,652
Interest on investment securities:
Interest exempt from federal income taxes 157 134 887 485
Taxable interest income 1,343 1,801 6,742 7,862
Dividend income 25 7 65 34
Other interest income 12 6 24 44

Total interest income

 

8,162 8,818 33,857 37,077
Interest expense:
Deposits:
Demand accounts 308 400 1,462 1,973
Savings 36 98 241 310
Time 986 1,573 4,512 6,925
Short-term borrowings 107 69 387 284
Long-term obligations 71 143 340 614

Total interest expense

 

1,508 2,283 6,942 10,106
 

Net interest income

 

6,654 6,535 26,915 26,971
Provision for loan losses 618 2,252 3,401 8,483

Net interest income after provision for loan losses

 

6,036 4,283 23,514 18,488
 
Noninterest income:
Service charges on deposit accounts 1,003 833 3,707 3,262
Other service charges and fees 256 241 1,644 1,225
Mortgage origination fees 383 267 1,611 1,300
Net gain on sale of securities 1,733 749 5,277 2,631
Income from bank owned life insurance 75 102 379 324
Other operating (expense) income (243) 70 (197) 58

Total noninterest income

 

3,207 2,262 12,421 8,800
 
Noninterest expenses:
Salaries 3,180 2,742 11,886 10,869
Retirement and other employee benefits 1,048 716 3,748 2,814
Occupancy 510 508 2,096 2,041
Equipment 623 551 2,403 2,173
Professional fees 951 604 1,784 1,386
Supplies 41 60 184 238
Communications/Data lines 182 173 734 710
FDIC insurance 208 178 819 941
Other outside services 124 165 595 602
Net cost of real estate and repossessions acquired

in settlement of loans

 

491 696 1,959 1,438
Data processing and related expenses 382 501 1,545 1,062
Securities purchase agreement termination fees - 1,686 - 1,686
Other operating expenses 687 836 3,791 3,896

Total noninterest expenses

 

8,427 9,416 31,544 29,856

Income (loss) before income taxes

 

816 (2,871) 4,391 (2,568)
Income tax expense (benefit) 438 (1,259) 1,399 (1,544)
Net income

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