CHARLOTTE, N.C., Nov. 7 NC-American-Comm-ern
CHARLOTTE, N.C., Nov. 7 /PRNewswire-FirstCall/ -- American Community
Bancshares, Inc. (Nasdaq: ACBA) reported third quarter 2008 financial results.
Highlights for the third quarter include:
-- Net interest margin expansion of 15 basis points to 3.38% compared to
3.23% in the second quarter of 2008
-- Total loan growth of 8% annualized compared to the second quarter of
2008; loan growth of 13% on a year-over-year basis
-- Nonperforming loans of 0.93% of total loans, compared to 0.52% in the
second quarter of 2008 and 0.37% in the third quarter of 2007
-- Loan loss provision of $1.4 million, up $1.1 million from $296,000 in
the second quarter of 2008, and up $1.3 million from $156,000 in the third
quarter of 2007
-- Allowance for loan loss equal to 1.74% of total loans compared to 1.55%
in the second quarter of 2008 and 1.44% in the third quarter of 2007
-- Well-capitalized, with tier one, total capital, and leverage ratios of
9.30%, 10.55%, and 7.89%, respectively (at the bank subsidiary level)
-- Net loss of $3.2 million, or $0.48 per diluted share
The net loss of $3.2 million, or $0.48 per diluted share, was primarily
impacted by non-recurring charges including a previously announced $2.7
million other than temporary impairment charge related to investments in
Federal Home Loan Mortgage Corporation ("Freddie Mac") and Federal National
Mortgage Association ("Fannie Mae") preferred stock, a $397,000 loss on a
supplemental executive retirement plan investment also related to Freddie Mac
and Fannie Mae preferred stock, and $399,000 in merger related expenses. Also
impacting the net loss was a $1.4 million loan loss provision.
Randy P. Helton, President and Chief Executive Officer commented,
"American Community's core business remains solid, despite the non-recurring
charges that occurred during the quarter. Excluding these charges and assuming
a loan loss provision equal to the second quarter of 2008, earnings per share
for our core earnings would have been $0.08 per diluted share, compared to
$0.07 per diluted share during the second quarter of 2008."
"During the third quarter, we continued our aggressive and ongoing
proactive process to recognize nonperforming loans and charge-offs in response
to the current economic environment. As with most banks, managing through
this challenging economic environment remains our top priority. While our
nonperforming loans increased during the quarter to .93% of total loans, they
still remain well below our peers, which show average nonperforming loans as a
percentage of total loans of 1.42%."
"Even though we believe that our asset quality has held up well compared
to our peers, we have proactively increased the loan loss provision due to our
solid loan growth as well as the slowing economic conditions across our
footprint which has resulted in our increase in non-performing loans. As a
result of the higher loan loss provision this quarter, we have increased our
reserves as a percentage of total loans to 1.74% in the third quarter from
1.55% in the second quarter of 2008. Our reserve coverage ratio remains well
above our peers, which on average have reserves of 1.50% of total loans."
"We remain well-capitalized from a regulatory standpoint, and are
considering participation in the Treasury's Capital Purchase Program up to the
maximum of 3% of risk-weighted assets or approximately $13 million. We believe
this program is designed to help strong financial institutions during the
current economic cycle, and that it is an attractive opportunity to build
capital for future growth opportunities ahead of our merger with Yadkin Valley
Financial."
THIRD QUARTER 2008 FINANCIAL HIGHLIGHTS
Net interest income increased 2% to $4.0 million compared to $3.9 million
during the second quarter of 2008. This increase was primarily due to a 15
basis point expansion in the net interest margin to 3.38% compared to 3.23% in
the second quarter of 2008. During the quarter, the Company utilized lower
cost short term borrowings and brokered CDs to fund loan growth as deposit
costs continued to decrease following the 150 basis point decrease in the Fed
Funds rate that occurred during the first half of 2008.
On a year-over-year basis, net interest income decreased 17% to $4.0
million from $4.8 million in the third quarter of 2007. The decrease was
primarily due to net interest margin compression of 84 basis points resulting
from the 325 basis point decrease in the Fed Funds rate since September 18,
2007, which had a more immediate effect on loan yields than deposit costs.
Total loans increased $8.2 million to $421.1 million in the third quarter
2008, or 8% on an annualized basis. On a year-over-year basis, loans increased
$47.8 million or 13%. Deposits increased $12.7 million or 12% annualized to
$429.3 million compared to the second quarter of 2008, and increased $31.9
million or 8% compared to the third quarter of 2007.
The provision for loan losses increased $1.1 million to $1.4 million from
$296,000 in the second quarter of 2008. On a year-over-year basis, the loan
loss provision increased $1.3 million from $156,000. The linked quarter and
year-over-year increases in the loan loss provision was primarily due to the
increase in nonperforming loans as well as growth in the loan portfolio.
Nonperforming loans totaled $3.9 million or 0.93% of total loans, an
increase of $1.8 million compared to $2.1 million or 0.52% of total loans in
the second quarter of 2008. A breakdown of nonperforming loans, by loan type,
consisted of the following at the end of the third quarter of 2008, compared
to the second quarter of 2008 and the third quarter of 2007 (in thousands of
dollars):
September 30, 2008
% of
#Total
Loan Type Loans Balance Loans
1-4 Family Construction 2 $279 0.07%
Raw Land 2 635 0.15%
Commercial Real Estate 6 414 0.10%
Commercial & Industrial 6 260 0.06%
Residential 1-4 Family - Permanent 7 812 0.19%
HELOC1 600 0.14%
Personal Loans 5 75 0.02%
Commercial Leases 17 835 0.20%
Other-- 0.00%
Total 46 $3,910 0.93%
June 30, 2008
% of
#Total
Loan Type Loans Balance Loans
1-4 Family Construction - $- 0.00%
Raw Land 1 154 0.04%
Commercial Real Estate 6 422 0.10%
Commercial & Industrial 10 328 0.08%
Residential 1-4 Family - Permanent 7 598 0.14%
HELOC-- 0.00%
Personal Loans 8 93 0.02%
Commercial Leases 11 526 0.13%
Other1 19 0.00%
Total 44 $2,140 0.52%
September 30, 2007
% of
#Total
Loan Type Loans Balance Loans
1-4 Family Construction - $- 0.00%
Raw Land -- 0.00%
Commercial Real Estate 4 312 0.08%
Commercial & Industrial 8 295 0.08%
Residential 1-4 Family - Permanent 5 70 0.02%
HELOC-- 0.00%
Personal Loans 12 120 0.03%
Commercial Leases 10 582 0.16%
Other-- 0.00%
Total 39 $1,379 0.37%
The Company also announced that the Board of Directors declared a
quarterly cash dividend for the fourth quarter of 2008 of $0.05 per share. The
dividend will be paid on December 1, 2008 to shareholders of record on
November 26, 2008.
American Community Bancshares, headquartered in Charlotte, NC is the
holding company for American Community Bank. American Community Bank is a full
service community bank, headquartered in Monroe, NC with nine North Carolina
offices located in the fast growing Union and Mecklenburg counties and four
South Carolina offices located in York and Cherokee counties. The Bank
provides a wide assortment of traditional banking and financial services
offered with a high level of personal attention. American Community Bancshares
website is www.americancommunitybank.com. American Community Bancshares stock
is traded on the NASDAQ Capital Market under the symbol "ACBA."
Information in this press release contains "forward-looking statements."
These statements involve risks and uncertainties that could cause actual
results to differ materially, including without limitation, the effects of
future economic conditions, governmental fiscal and monetary policies,
legislative and regulatory changes, the risks of changes in interest rates and
the effects of competition. Additional factors that could cause actual results
to differ materially are discussed in American Community Bancshares's recent
filings with the Securities and Exchange Commission, including but not limited
to its Annual Report on Form 10-K and its other periodic reports.
American Community Bancshares, Inc.
(Amounts in thousands except share and per share data)
(Unaudited)
Consolidated Balance Sheet
September 30, June 30, March 31,
200820082008
Assets
Cash and due from banks $15,968 $16,078 $16,126
Interest-earning deposits with banks 8,720 749 682
Investment securities 73,538 77,563 79,521
Loans421,141 412,881 404,954
Allowance for loan losses (7,316) (6,390) (6,095)
Net loans 413,825 406,491 398,859
Accrued interest receivable2,173 2,148 2,398
Bank premises and equipment7,293 8,434 8,605
Foreclosed real estate77 - -
Non-marketable equity securities at
cost 2,980 3,039 2,814
Goodwill 9,838 9,838 9,838
Other assets 6,433 5,510 5,308
Total assets $540,845$529,850$524,151
Liabilities and stockholders' equity
Deposits
Non-interest bearing $50,693 $52,278 $53,439
Interest bearing 378,591 364,268 357,701
Total deposits 429,284 416,546 411,140
Borrowings57,921 58,140 55,709
Accrued expenses and other liabilities 2,142 393 1,807
Total liabilities 489,347 475,079 468,656
Total stockholders' equity51,498 54,771 55,495
Total liabilities and stockholders'
equity $540,845$529,850$524,151
Ending shares outstanding 6,574,600 6,542,091 6,542,091
Book value per share $7.83 $8.37 $8.48
Average Balances:
Loans $408,037$407,925$389,144
Earning assets 488,193 489,032 471,071
Total assets 529,524 525,587 513,398
Interest-bearing deposits361,391 360,784 351,699
Stockholders' equity 53,918 55,346 55,069
December 31, September 30,
2007 (a)2007
Assets
Cash and due from banks$14,346 $15,684
Interest-earning deposits with banks 930 5,484
Investment securities 76,78279,043
Loans 392,959 373,309
Allowance for loan losses (5,740) (5,374)
Net loans387,219 367,935
Accrued interest receivable 2,640 2,922
Bank premises and equipment 8,694 8,746
Foreclosed real estate - 25
Non-marketable equity securities at
cost2,119 2,119
Goodwill 9,838 9,838
Other assets 3,027 3,232
Total assets$505,595 $495,028
Liabilities and stockholders' equity
Deposits
Non-interest bearing $54,459 $54,805
Interest bearing 345,335 342,574
Total deposits 399,794 397,379
Borrowings 49,50443,533
Accrued expenses and other liabilities 2,273 1,649
Total liabilities451,571 442,561
Total stockholders' equity 54,02452,467
Total liabilities and stockholders'
equity $505,595 $495,028
Ending shares outstanding6,502,288 6,502,288
Book value per share $8.31 $8.07
Average Balances:
Loans $379,191 $372,407
Earning assets 462,078 460,577
Total assets 499,430 501,961
Interest-bearing deposits 344,619 346,820
Stockholders' equity53,36654,041
(a) Derived from audited consolidated financial statements
American Community Bancshares, Inc.
Consolidated Income Statements
(Amounts in thousands except share and per share data)
(Unaudited)
September 30, June 30, March 31,
Three months ended200820082008
Total interest income$7,572 $7,569 $8,188
Total interest expense3,568 3,629 3,873
Net interest income 4,004 3,940 4,315
Provision for loan losses 1,441 296 425
Net interest income after provision
for loan loss2,563 3,644 3,890
Non-interest income
Service charges on deposit accounts 593 597 602
Mortgage banking operations43 95 86
Realized gains on sale of
securities - - -
Gain/loss on derivatives (4) (148)272
Loss on SERP investment (397)(72)(19)
Other 51 68 78
Total non-interest income 286 540 1,019
Non-interest expense
Salaries and employee benefits 1,873 1,639 1,743
Occupancy and equipment 566 614 584
Other than temporary impairment
of investment securities 2,753 - -
Merger related expenses 399 - -
Other 1,109 1,190 1,044
Total non-interest expense6,700 3,443 3,371
Income (loss) before income taxes(3,851)741 1,538
Provision (benefit) for income taxes (653)257 547
Net income (loss) $(3,198) $484$991
Net income (loss) per share
Basic $(0.49) $0.07 $0.15
Diluted$(0.48) $0.07 $0.15
Weighted average number of shares
outstanding
Basic 6,561,132 6,542,091 6,513,526
Diluted 6,625,695 6,613,633 6,623,392
Return (loss) on average equity -23.53% 3.46% 7.24%
Return (loss) on average assets -2.40% 0.36% 0.78%
Net interest margin3.38% 3.23% 3.76%
Efficiency ratio 156.18% 76.85% 63.20%
Allowance for loan losses to total
loans 1.74% 1.55% 1.51%
Net charge-offs to avg loans
(annualized) 0.50% 0.00% 0.07%
Nonperforming loans to total loans 0.93% 0.52% 0.60%
Nonperforming assets to total assets 0.74% 0.42% 0.47%
December 31, September 30,
Three months ended 2007 2007
Total interest income $8,737$9,070
Total interest expense 4,068 4,225
Net interest income 4,669 4,845
Provision for loan losses 471 156
Net interest income after provision for
loan loss 4,198 4,689
Non-interest income
Service charges on deposit accounts 613 617
Mortgage banking operations 8370
Realized gains on sale of
securities - 2
Gain/loss on derivatives132 138
Loss on SERP investment - -
Other73 134
Total non-interest income 901 961
Non-interest expense
Salaries and employee benefits1,724 1,768
Occupancy and equipment 505 560
Other than temporary
impairment of investment securities - -
Merger related expenses - -
Other 1,132 1,121
Total non-interest expense 3,361 3,449
Income (loss) before income taxes 1,738 2,201
Provision (benefit) for income taxes 626 801
Net income (loss) $1,112$1,400
Net income (loss) per share
Basic $0.17 $0.21
Diluted $0.17 $0.21
Weighted average number of shares
outstanding
Basic 6,502,288 6,635,709
Diluted 6,652,452 6,799,753
Return (loss) on average equity 8.26%10.28%
Return (loss) on average assets 0.88% 1.11%
Net interest margin 4.01% 4.22%
Efficiency ratio60.34%59.40%
Allowance for loan losses to total
loans 1.46% 1.44%
Net charge-offs to avg loans
(annualized)0.10% 0.35%
Nonperforming loans to total loans 0.44% 0.37%
Nonperforming assets to total assets 0.34% 0.29%
American Community Bancshares, Inc.
Core Earnings Reconciliation
(Amounts in thousands except per share data)
(Unaudited)
September 30,
Three months ended2008
GAAP income (loss) prior to income tax $(3,851)
Increase in loan loss provision from prior quarter 1,145
Loss on SERP investment397
Other than temporary impairment 2,753
Merger related expenses399
Adjusted pre-tax earnings843
Income tax at 34% 287
Core net income $556
Core diluted earnings per share$0.08
SOURCE American Community Bancshares, Inc.
