Select Bancorp Reports First Quarter 2020 Earnings

DUNN, N.C., April 29, 2020 (GLOBE NEWSWIRE) -- Select Bancorp, Inc. (NASDAQ: SLCT) (the “Company”), the holding company for Select Bank & Trust Company, today reported net income for the quarter ended March 31, 2020 of $1.1 million with basic and diluted earnings per share of $0.06, compared to net income of $3.3 million with basic and diluted earnings per share of $0.17 for the comparative quarter ended March 31, 2019. The decrease in net income in the first quarter of 2020 compared to 2019 was primarily attributable to $389,000 of expenses associated with new branches in Cornelius, North Carolina (the Charlotte area), Holly Springs, North Carolina (the Raleigh area) and Virginia Beach, Virginia and an increase of the provision for credit losses of $2.3 million due to unprecedented changes in certain economic indicators as a result of the COVID-19 pandemic. 

Total assets, deposits, and gross loans for the Company as of March 31, 2020 were $1.3 billion, $982.7 million, and $1.0 billion, respectively, compared to total assets of $1.2 billion, total deposits of $951.0 million, and total loans of $991.8 million as of the same date in 2019.  

Comments of the Chief Executive Officer and Other Matters

William Hedgepeth, President and Chief Executive Officer stated, “Overall, we were pleased with our first-quarter earnings and the continued franchise growth from the implementation of our strategic initiatives.  However, the end of the quarter was punctuated by arrival of the COVID-19 pandemic.  As the implications of this event rapidly evolved and its significance was understood, we knew the nation was in uncharted territory.  We are extremely concerned for those who are suffering, for the well-being of our health care workers, and for our customers, friends, neighbors and employees as they continue to provide services to their community.  Our goal over the past few weeks, and into the future, is to continue providing crucial financial services in a safe and timely manner, which will hopefully help to contribute to a faster recovery in the markets we serve.  We have taken prudent steps to secure our financial position so that we will have the capacity and ability to meet the needs of our customers and communities as the impact of COVID-19 continues to affect them and our economy more generally.” 

Hedgepeth continued, “We are participating in the Paycheck Protection Program, or PPP, providing loans to assist our customers with funds to work through this pandemic.  Within the last couple of weeks, we have assisted more than 990 customers with over $88 million dollars in PPP loans.  These loans, which are eligible for forgiveness, provide funds to be used by small businesses to continue paying their employees, rent, mortgages and utilities, all of which assist small businesses with keeping employees on the payroll.  This program is designed to enhance the economic infrastructure of the communities we serve by providing the resources needed for small businesses to reopen in the near future.  We have provided additional staff resources, together with an “all hands on deck” philosophy to facilitate as many customer requests as possible by assisting them in applying for and participating in this stimulus program in a very limited period of time. We also continue to work with our customers in other ways, such as offering loan payment deferral options in certain circumstances.” 

“We are dealing with unprecedented times and it is paramount that we remain flexible and accommodate the needs of the communities in which we operate.  All of our branches are open for drive-thru activity while keeping the health and safety of our customers and employees as our primary objective.  We will strive to provide as many solutions as possible, in a timely manner that strengthen the business partnerships we have developed as we all proceed through the recovery process.” 

Other matters of interest to shareholders are:

• The Company repurchased 275,366 shares of Company common stock during the first quarter of 2020 under the repurchase plan authorized by the Board of Directors in 2019. The Company may repurchase up to an additional 235,140 shares of its common stock under the repurchase plan.
• Loan growth was over $9.5 million in the first quarter of 2020.
• With the closing of the acquisition of three branches on April 17, 2020 in western North Carolina, our total assets are in excess of $1.5 billion.

 Net Interest Income and Net Interest Margin

Net interest income was $11.5 million for the first quarter of 2020 and 2019. On a comparative quarter basis, the Company’s total interest income was positively affected by increased loan balances due to growth which was offset by a decreasing yield, a decrease in securities balances and a lower yield plus the reduction in other earning assets at a lower yield. Average total interest-earning assets were $1.1 billion in the first quarter of 2020 and 2019.  The yield on those assets decreased 4 basis points, from 5.02% in the first quarter of 2019 to 4.98% for the same period in 2020.  This was primarily due to lower rates on recently originated loans and a reduction of accretion from acquired loans on a comparative quarter basis.

The Company’s average interest-bearing liabilities increased by $16.8 million, to $788.4 million for the quarter ended March 31, 2020, from $771.6 million for the first quarter of 2019.  Low-cost savings, NOW and money market deposits increased $19.3 million while the cost of transactional deposits decreased from 0.48% to 0.43%, or 5 basis points year over year. The cost of total deposits increased from 0.90% in the first quarter of 2019 to 0.94% in the first quarter of 2020 due to the increase in the cost of time deposits.  During the first quarter of 2020, the Company’s net interest margin was 4.03% and net interest spread was 3.59%. In the first quarter of 2019, net interest margin was 4.09% and net interest spread was 3.65%.  

Provision for Loan Losses and Asset Quality

During the first quarter of 2020, the Company recorded a provision for loan losses of $2.3 million, based primarily on loan growth and adjustments to qualitative allowance factors and preliminary estimates related to the economic impact of the COVID-19 pandemic. There was a 0.15% allowance applied to all loan pools for factors related to the economic impact of COVID-19. Additionally, due to the COVID-19 pandemic, we increased our reserve an additional five basis points (.05%) in response to qualitative factors for gross domestic product, peer group delinquency, and North Carolina unemployment in all loan pools.  As a result, $1.4 million of the $2.3 million provision was attributable to the impact COVID -19 on the reserve’s increase.  We granted payment extensions on approximately 285 commercial and consumer loans related to the impact of COVID – 19.  On a comparative quarter basis, the Company recorded a provision for loan losses of $112,000, based primarily on loan growth and adjustments to qualitative loan factors related to trends in the loan portfolio for the first quarter of 2019. In the first quarter of 2020, the Company recorded net charge-offs of $12,000 compared to net charge-offs of $271,000 in the first quarter of 2019.  These charge-offs resulted in a net charge-off rate of 0.00% of average loans for the current quarter, compared to a net charge-off rate of 0.11% in the first quarter of 2019.

Non-interest Income

Non-interest income for the quarter ended March 31, 2020 was $1.4 million, an increase of $247,000 from $1.2 million in the first quarter of 2019. Service charges on deposit accounts increased $72,000, to $338,000 for the quarter ended March 31, 2020, from $266,000 for the first quarter in 2019. Other non-deposit fees and income increased $39,000 from the first quarter of 2019 to the first quarter of 2020. Fees of $185,000 from presold mortgages and $108,000 from SBA loans totaled $293,000 in the first quarter of 2020, which represented an increase of $136,000 from the $157,000 of fees in the first quarter of 2019. The Company did not sell any investment securities in the first quarter of 2020 or 2019.

Non-interest Expense

Non-interest expenses increased by $943,000 to $9.2 million for the quarter ended March 31, 2020, from $8.3 million for the same period in 2019.  In general, most categories of non-interest expenses increased, primarily due to an increase in the number of branches.  The following are highlights of the significant categories of non-interest expenses during the first quarter of 2020 versus the same period in 2019:

• Personnel expenses increased $661,000 to $5.6 million, due to additional personnel and cost-of-living increases. 
• Occupancy expenses increased $204,000, primarily due to additional branches, repairs and maintenance and increased rent expense due to normal rent escalation.
• Integration-related expenses increased $39,000.
• CDI expense decreased $40,000 due to amortization.
• Information systems expense increased by $249,000 due to increased expenses related to a new mobile banking platform and security cost for the core processing system.
• Professional fees decreased by $10,000 to $372,000.
• Deposit insurance expenses decreased by $117,000 due to increased premium credit earned.

Income Taxes

The Company’s effective tax rate was 20.2% and 21.0% for the quarters ended March 31, 2020 and 2019, respectively. 

Balance Sheet

Total assets at March 31, 2020 were $1.3 billion, an increase of $21.4 million from a year earlier.  Gross loans at March 31, 2020 were $1.0 billion, up $47.7 million or 4.8% from a year earlier, and total deposits were $982.7 million, an increase of $31.7 million or 3.3% from a year earlier.

Retail deposits (excluding brokered deposits and internet time deposits) grew at a rate of 6.1% or $34.3 million as of March 31, 2020 compared to the same period in 2019. Wholesale deposits decreased from $26.3 million at March 31, 2019 to $19.5 million at March 31, 2020 as we continue emphasizing core deposit growth to replace wholesale deposits.

Completion of Acquisition of Three Branches in Western North Carolina

As previously announced, on April 17, 2020, the Company’s subsidiary, Select Bank & Trust completed its purchase of three branches from Entegra Bank, a division of First Citizens Bank.

The branches are located at 473 Carolina Way, Highlands, NC; 498 East Main Street, Sylva, NC; and 30 Hyatt Road, Franklin, NC. As part of the purchase, Select Bank & Trust Company assumed approximately $185 million in deposits and purchased approximately $107 million in loans. 

About Select Bank & Trust Company

Select Bank & Trust has 22 full-service offices in these North Carolina communities: Dunn, Burlington, Charlotte, Clinton, Cornelius (Charlotte area), Elizabeth City, Fayetteville, Franklin, Goldsboro, Greenville, Highlands, Holly Springs (Raleigh area), Leland, Lillington, Lumberton, Morehead City, Raleigh, Sylva, and Wilmington, North Carolina; in the following South Carolina communities: Blacksburg and Rock Hill; and in Virginia Beach, Virginia.

About Select Bancorp, Inc.

Select Bancorp, Inc. is a bank holding company headquartered in Dunn, North Carolina. The Company primarily conducts operations through its wholly owned subsidiary, Select Bank & Trust Company, a North Carolina-chartered commercial bank that provides a full suite of banking services through its offices in North Carolina, South Carolina, and Virginia. The Company’s common stock is listed on the Nasdaq Global Market under the symbol “SLCT”.

Non-GAAP Financial Measures

Certain financial measures we use to evaluate our performance and discuss in this release and the accompanying tables are identified as being “non-GAAP financial measures.” In accordance with the rules of the Securities and Exchange Commission, or the SEC, we classify a financial measure as being a non-GAAP (generally accepted accounting principles) financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of operations, balance sheet or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both.

The non-GAAP financial measures that we discuss in this release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in this release may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar, or with names similar, to the non-GAAP financial measures we have discussed in this release when comparing such non-GAAP financial measures.

Tangible book value per share is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as shareholders’ equity less goodwill and core deposit intangibles; and (b) tangible book value per share as tangible common equity (as described in clause (a)) divided by shares of common stock outstanding. For tangible book value per share, the most directly comparable financial measure calculated in accordance with GAAP is our book value per share. A reconciliation of tangible book value per share to book value per share is included in the tables that accompany this release. 

We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.

Important Note Regarding Forward-Looking Statements

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, revenue, and expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to anticipated market share growth, 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: the ongoing COVID-19 pandemic and measures intended to prevent its spread, which include wide disruptions to business activity that may impact the financial strength of our borrowers; our ability to manage growth or achieve it at all; substantial changes in financial markets; our ability to obtain the synergies and expense efficiencies anticipated from our acquisition activity and branch divestures and consolidations; regulatory changes; changes in interest rates, including the impact of such changes on our net interest margin; loss of deposits and loan demand to other savings and financial institutions; adverse economic conditions that impact our borrowers’ ability to pay their debts when due, including the rapid rise in unemployment associated with the COVID-19 pandemic; 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. Except as required by law, the Company assumes no obligation to update the forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

Mark A. Jeffries
Executive Vice President
Chief Financial Officer
Office: 910-892-7080 and Direct: 910-897-3603
[e-mail]
SelectBank.com

 

SELECT BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
		March 31, 2020				December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019
		(Unaudited)				(Audited)				(Unaudited)				(Unaudited)				(Unaudited)
						(Dollars in thousands)
ASSETS
Cash and due from banks		$	20,030			$	19,110			$	20,052			$	20,397			$	15,586
Interest-earning deposits in other banks			35,544				50,920				53,093				100,584				44,894
Certificates of deposit			-				-				500				500				1,000
Federal funds sold			11,673				9,047				10,728				21,961				9,809
Investment securities available for sale, at Fair Value			64,738				72,367				76,941				83,102				86,727
Loans held for sale			1,606				928				1,714				826				354
Loans			1,039,514				1,029,975				1,014,928				997,062				991,801
Allowance for loan losses			(10,586	)			(8,324	)			(8,056	)			(8,303	)			(8,510	)
NET LOANS			1,028,928				1,021,651				1,006,872				988,759				983,291
Accrued interest receivable			3,839				4,189				3,902				4,028				4,120
Stock in Federal Home Loan Bank of Atlanta, at cost			3,059				3,045				3,045				3,045				3,342
Other non-marketable securities			718				719				719				718				738
Foreclosed real estate			3,737				3,533				1,442				1,468				1,046
Premises and equipment, net			17,868				17,791				18,150				18,274				17,715
Right of use lease asset			8,414				8,596				8,776				8,953				8,750
Bank owned life insurance			29,950				29,789				29,621				29,451				29,282
Goodwill			24,579				24,579				24,579				24,579				24,579
Core deposit intangible ("CDI")			1,431				1,610				1,803				2,011				1,866
Assets held for sale			-				-				-				-				668
Other assets			7,380				7,202				7,697				8,141				8,310
TOTAL ASSETS		$	1,263,494			$	1,275,076			$	1,269,634			$	1,316,797			$	1,242,077
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand		$	250,031			$	240,305			$	243,889			$	252,666			$	240,262
Savings			41,815				43,128				43,355				46,037				48,080
Money market and NOW			306,051				280,145				283,414				292,629				262,169
Time			384,754				429,260				417,015				438,918				400,455
TOTAL DEPOSITS			982,651				992,838				987,673				1,030,250				950,966
Short-Term Debt			20,000				-				-				-				7,000
Long-Term Debt			37,372				57,372				57,372				57,372				57,372
Lease Liability			8,669				8,813				8,951				9,086				8,842
Accrued interest payable			536				578				596				637				519
Accrued expenses and other liabilities			2,181				2,700				2,993				2,607				3,927
TOTAL LIABILITIES			1,051,409				1,062,301				1,057,585				1,099,952				1,028,626
Shareholders' Equity
Common stock			18,056				18,330				18,513				19,262				19,326
Additional paid-in-capital			138,788				140,870				142,878				150,275				150,877
Retained Earnings			53,779				52,675				49,634				46,395				42,947
Common stock issued to deferred compensation trust			(2,791	)			(2,815	)			(2,730	)			(2,652	)			(2,652	)
Directors' Deferred Compensation Plan Rabbi Trust			2,791				2,815				2,730				2,652				2,652
Accumulated other comprehensive income			1,462				900				1,024				913				301
TOTAL SHAREHOLDERS' EQUITY			212,085				212,775				212,049				216,845				213,451
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY		$	1,263,494			$	1,275,076			$	1,269,634			$	1,316,797			$	1,242,077

SELECT BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	For the Three Months Ended																		For the Twelve Months Ended
	March 31, 2020				December 31, 2019			September 30, 2019				June 30, 2019				March 31, 2019			December 31, 2019			December 31, 2018
INTEREST INCOME
Loans	$	13,589			$	14,124		$	13,924			$	13,515			$	13,042		$	54,605		$	53,796
Federal funds sold and interest-earning
deposits in other banks		168				258			581				456				543			1,838			1,618
Investments		421				434			503				601				465			2,003			1,421
TOTAL INTEREST INCOME		14,178				14,816			15,008				14,572				14,050			58,446			56,835
INTEREST EXPENSE
Money market, NOW and savings deposits		348				420			433				407				356			1,616			1,339
Time deposits		1,931				2,075			2,248				1,985				1,753			8,061			6,293
Short-term debt		87				6			4				26				26			62			328
Long-term debt		352				447			455				457				458			1,817			1,490
TOTAL INTEREST EXPENSE		2,718				2,948			3,140				2,875				2,593			11,556			9,450
NET INTEREST INCOME		11,460				11,868			11,868				11,697				11,457			46,890			47,385
PROVISION FOR (RECOVERY OF) LOAN LOSSES		2,273				302			231				(207	)			112			438			(156	)
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES		9,187				11,566			11,637				11,904				11,345			46,452			47,541
NON-INTEREST INCOME
Fees on the sale of mortgages		293				148			218				230				157			753			497
Gain on securities		0				0			48				0				0			48			0
Service charges on deposit accounts		338				303			308				284				266			1,161			1,124
Other fees and income		813				995			874				814				774			3,457			3,080
TOTAL NON-INTEREST INCOME		1,444				1,446			1,448				1,328				1,197			5,419			4,701
NON-INTEREST EXPENSE
Personnel		5,632				5,152			5,124				5,031				4,971			20,278			18,304
Occupancy and equipment		931				973			1,073				922				727			3,695			3,666
Deposit insurance		(12	)			19			(30	)			90				105			184			628
Professional Fees		372				503			518				483				382			1,886			1,394
CDI amortization		179				193			208				205				219			825			1,016
Merger/acquisition related expenses		39				171			128				107				0			406			1,826
Information systems		1,038				974			852				877				789			3,492			3,372
Foreclosed-related expenses		5				109			(9	)			10				30			140			115
Other		1,063				1,000			1,067				1,086				1,081			4,234			4,229
TOTAL NON-INTEREST EXPENSE		9,247				9,094			8,931				8,811				8,304			35,140			34,550
INCOME BEFORE INCOME TAXES		1,384				3,918			4,154				4,421				4,238			16,731			17,692
INCOME TAXES		280				877			915				973				931			3,696			3,910
NET INCOME	$	1,104			$	3,041		$	3,239			$	3,448			$	3,307		$	13,035		$	13,782
NET INCOME PER COMMON SHARE OUTSTANDING
Basic	$	0.06			$	0.17		$	0.17			$	0.18			$	0.17		$	0.69		$	0.87
Diluted	$	0.06			$	0.16		$	0.17			$	0.18			$	0.17		$	0.68		$	0.87
WEIGHTED AVERAGE COMMON
Basic Outstanding Shares		18,255,351				18,414,393			19,028,572				19,318,358				19,315,686			19,016,808			15,812,585
Diluted Outstanding Shares		18,287,064				18,460,118			19,073,235				19,359,492				19,365,354			19,063,237			15,877,633

Select Bancorp, Inc.
Asset quality
	For Periods Ended
	March 31, 2020				December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019				December 31, 2019				December 31, 2018
Non-accrual loans		7,201				5,941				9,083				10,521				6,337				5,941				7,257
Accruing TDRs		5,619				6,207				6,477				6,061				5,246				6,207				4,378
Total non-performing loans		12,820				12,148				15,560				16,582				11,583				12,148				11,635
Foreclosed real estate		3,737				3,533				1,442				1,468				1,046				3,533				1,088
Total non-performing assets		16,557				15,681				17,002				18,050				12,629				15,681				12,723
Accruing loans past due 90 days or more		1,182				1,231				2,296				2,447				3,146				1,231				3,167
Allowance for loan losses		10,586				8,324				8,056				8,303				8,510				8,324				8,669
Non-performing loans to period ending loans		1.23%				1.18%				1.53%				1.66%				1.17%				1.18%				1.18%
Non-performing loans & accruing loans past
due 90 days or more to period ending loans		1.35%				1.30%				1.76%				1.91%				1.49%				1.30%				1.50%
Allowance for loans to period end loans		1.02%				0.81%				0.79%				0.83%				0.86%				0.81%				0.88%
Allowance for loans to non-performing loans		83%				69%				52%				50%				73%				69%				75%
Allowance for loans to non-performing Assets		64%				53%				47%				46%				67%				53%				68%
Allowance for loans to non-performing Assets
and accruing loans past due 90 days or more		60%				49%				42%				41%				54%				49%				55%
Non-performing assets to total assets		1.31%				1.23%				1.34%				1.37%				1.02%				1.23%				1.01%
Non-performing assets to accruing loans
past due 90 days or more to total assets		1.40%				1.33%				1.52%				1.56%				1.27%				1.33%				1.26%
SELECT BANCORP, INC.
Reconciliation of GAAP to Non-GAAP Measures
($ in thousands, except per share data, unaudited)
	For the Three Months Ended																				For the Twelve Months Ended
	March 31, 2020				December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019				December 31, 2019				December 31, 2018
Net interest margin:
Net Interest Margin-tax equivalent (1)		11,489				11,901				11,903				11,740				11,496				47,037				47,535
Purchased loan accretion and early payoff charges		(105	)			(226	)			(210	)			(268	)			(200	)			(904	)			(3,051	)
Net Interest Margin(2) (Non-GAAP)		11,384				11,675				11,693				11,472				11,296				46,133				44,484
Loans receivable interest income:
Loans receivable interest income		13,589				14,124				13,924				13,515				13,042				54,645				53,822
Purchased loan accretion and early payoff charges		(105	)			(226	)			(210	)			(268	)			(200	)			(904	)			(3,051	)
Loans receivable interest income (Non-GAAP)		13,484				13,898				13,714				13,247				12,842				53,741				50,771
Acquired and non-acquired loans:
Acquired loans recievable		122,363				129,595				141,765				152,090				173,771				129,595				186,243
Non-acquired loans recievable		917,151				900,380				873,163				844,972				818,030				900,380				799,797
Total gross loans recievable		1,039,514				1,029,975				1,014,928				997,062				991,801				1,029,975				986,040
% Acquired		11.8%				12.6%				14.0%				15.3%				17.5%				12.6%				18.9%
Non-acquired loans		917,151				900,380				873,163				844,972				818,030				900,380				799,797
Allowance for loan losses		10,586				8,324				8,056				8,303				8,510				8,324				8,669
Allowance for loan losses to non-acquired loans (Non-GAAP)		1.15%				0.92%				0.92%				0.98%				1.04%				0.92%				1.08%
Total gross loan receivable		1,039,514				1,029,975				1,014,928				997,062				991,801				1,029,975				986,040
Allowance for loan losses		10,586				8,324				8,056				8,303				8,510				8,324				8,669
Allowance for loan losses to total gross loans receivable		1.02%				0.81%				0.79%				0.83%				0.86%				0.81%				0.88%
	For Periods Ended
	March 31, 2019				December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019				December 31, 2019				December 31, 2018
Tangible common equity
Total shareholders' equity	$	212,085			$	212,775			$	212,049			$	216,845			$	213,451			$	212,775			$	209,611
Adjustment:
Goodwill		24,579				24,579				24,579				24,579				24,579				24,579				24,579
Core deposit intangibles		1,431				1,610				1,803				2,011				1,866				1,610				2,085
Tangible common equity	$	186,075			$	186,586			$	185,667			$	190,255			$	187,006			$	186,586			$	182,947
Common shares outstanding(3)		18,055,692				18,330,058				18,513,078				19,261,989				19,326,485				18,330,058				19,311,505
Book value per common share(4)	$	11.75			$	11.61			$	11.45			$	11.26			$	11.04			$	11.61			$	10.85
Tangible book value per common share(5)	$	10.31			$	10.18			$	10.03			$	9.88			$	9.68			$	10.18			$	9.47
(1) Net interest margin-tax equivalent reflects tax-exempt income on a tax-equivalent basis.
(2) Net interest margin-core and yield on loans - core excludes the impact of purchase accounting accretion, loan payoff charges and related deferred fees recognized related to early loan repayments.
(3) Excludes the dilutive effect of common stock issuable upon exercise of stock options.
(4) We calculate book value per common share as shareholders' equity less preferred stock at the end of the relevant period divided by the outstanding number of shares of our common stock at the end of the relevant period.
(5) We calculate the tangible book value per common share as total shareholders' equity less goodwill, preferred stock and core deposit intangibles, divided by the number of outstanding shares of our common stock at the end of the relevant period.

Select Bancorp, Inc.
Selected Financial Information and Other Data
($ in thousands, except share and per share data)
	For the Quarter Ended																				For the Year Ended
	March 31,				December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
	2020				2019				2019				2019				2019				2019				2018				2017
Summary of Operations:
Total interest income	$	14,178			$	14,816			$	15,008			$	14,572			$	14,050			$	58,446			$	56,835			$	39,617
Total interest expense		2,718				2,948				3,140				2,875				2,593				11,556				9,450				5,106
Net interest income		11,460				11,868				11,868				11,697				11,457				46,890				47,385				34,511
Provision for loan losses		2,273				302				231				(207	)			112				438				(156	)			1,367
Net interest income after provision		9,187				11,566				11,637				11,904				11,345				46,452				47,541				33,144
Noninterest income		1,444				1,446				1,448				1,328				1,197				5,419				4,701				3,072
Merger/acquisition related expenses		39				171				128				107				-				406				1,826				2,166
Noninterest expense		9,208				8,923				8,803				8,704				8,304				34,734				32,724				25,153
Income before income taxes		1,384				3,918				4,154				4,421				4,238				16,731				17,692				8,897
Provision for income taxes		280				877				915				973				931				3,696				3,910				5,712
Net Income		1,104				3,041				3,239				3,448				3,307				13,035				13,782				3,185
Dividends on Preferred Stock		-				-				-				-				-				-				-				-
Net income available to common  shareholders	$	1,104			$	3,041			$	3,239			$	3,448			$	3,307			$	13,035			$	13,782			$	3,185
Share and Per Share Data:
Earnings per share - basic	$	0.06			$	0.17			$	0.17			$	0.18			$	0.17			$	0.69			$	0.87			$	0.27
Earnings per share - diluted	$	0.06			$	0.16			$	0.17			$	0.18			$	0.17			$	0.68			$	0.87			$	0.27
Book value per share	$	11.75			$	11.61			$	11.45			$	11.26			$	11.04			$	11.61			$	10.85			$	9.72
Tangible book value per share(1)	$	10.31			$	10.18			$	10.03			$	9.88			$	9.68			$	10.18			$	9.47			$	7.72
Ending shares outstanding		18,055,692				18,330,058				18,513,078				19,261,989				19,326,485				18,330,058				19,311,505				14,009,137
Weighted average shares outstanding:
Basic		18,255,351				18,414,393				19,028,572				19,318,358				19,315,686				19,016,808				15,812,585				11,763,050
Diluted		18,287,064				18,460,118				19,073,235				19,359,492				19,365,354				19,063,237				15,877,633				11,826,977
Selected Performance Ratios:
Return on average assets(2)		0.35%				0.95%				0.99%				1.10%				1.08%				1.03%				1.12%				0.35%
Return on average equity(2)		2.07%				5.67%				5.93%				6.41%				6.32%				6.08%				8.51%				2.93%
Net interest margin		4.03%				4.05%				3.94%				4.06%				4.09%				4.04%				4.19%				4.09%
Efficiency ratio (3)		71.36%				67.02%				66.11%				66.83%				65.62%				66.40%				62.83%				66.93%
Period End Balance Sheet Data:
Gross loans	$	1,039,514			$	1,029,975			$	1,014,928			$	997,062			$	991,801			$	1,029,975			$	986,040			$	982,626
Total interest-earning assets		1,137,010				1,167,857				1,153,612				1,148,417				1,103,691				1,167,857				1,119,344				1,063,322
Goodwill		24,579				24,579				24,579				24,579				24,579				24,579				24,579				24,904
Core deposit intangible		1,431				1,610				1,803				2,011				1,866				1,610				2,085				3,101
Total assets		1,263,494				1,275,076				1,269,634				1,316,797				1,242,077				1,275,076				1,258,525				1,194,135
Deposits		982,651				992,838				987,673				1,030,250				950,966				992,838				980,427				995,044
Short-term debt		20,000				-				-				-				7,000				-				7,000				28,279
Long-term debt		37,372				57,372				57,372				57,372				57,372				57,372				57,372				19,372
Shareholders' equity		212,085				212,775				212,049				216,845				213,451				212,775				209,611				136,115
Selected Average Balances:
Gross Loans	$	1,020,630			$	1,017,750			$	1,013,331			$	982,876			$	985,059			$	1,004,051			$	987,634			$	732,089
Total interest-earning assets		1,147,631				1,166,758				1,197,266				1,160,387				1,086,958				1,164,149				1,119,344				813,773
Core Deposit Intangible		1,507				1,680				1,878				1,741				1,951				1,812				2,547				640
Total Assets		1,255,943				1,272,475				1,300,137				1,261,972				1,238,847				1,268,728				1,228,576				898,943
Deposits		972,162				989,721				1,013,504				970,011				949,771				981,132				989,838				738,310
Short-term debt		12,747				-				-				6,824				7,000				3,414				21,393				34,523
Long-term debt		44,625				57,372				57,372				57,372				57,372				57,372				49,357				14,239
Shareholders' equity		214,502				212,849				216,556				215,722				212,130				214,324				161,953				108,709
Asset Quality Ratios:
Nonperforming loans (4)	$	12,820			$	12,148			$	15,560			$	16,582			$	11,583			$	12,148			$	11,635			$	6,978
Other real estate owned		3,737				3,533				1,442				1,468				1,046				3,533				1,088				1,258
Allowance for loan losses		10,586				8,324				8,056				8,303				8,510				8,324				8,669				8,835
Nonperforming loans (4) to period-end loans		1.23%				1.18%				1.53%				1.66%				1.17%				1.18%				1.18%				0.71%
Allowance for loan losses to period-end loans		1.02%				0.81%				0.79%				0.83%				0.86%				0.81%				0.88%				0.90%
Delinquency ratio (5)		0.43%				0.34%				0.09%				0.12%				0.41%				0.34%				0.19%				0.48%
Net loan charge-offs (recoveries) to average loans (2)		0.00%				0.01%				0.19%				0.00%				0.11%				0.08%				0.00%				0.13%
(1) Tangible book value per share (a non GAAP measure) is equal to total shareholders’ equity less goodwill and core deposit intangibles, divided by the number of outstanding shares of our common stock at the end of the relevant period.  Please refer to the table above for a reconciliation of this non-GAAP measure.
(2) Annualized.
(3) Efficiency ratio is calculated as a non-interest expenses divided by the sum of net interest income and non-interest income.
(4) Nonperforming loans consist of non-accrural loans and accruing TDR loans.
(5) Delinquency Ratio includes loans 30-89 days past due and excludes non-accrual loans.