Crescent Financial Corporation Announces Record Third Quarter Earnings and Assets
CARY, N.C. - Crescent Financial Corporation (NasdaqGM: CRFN), parent company of Crescent State Bank of Cary, North Carolina and Port City Capital Bank of Wilmington, North Carolina today announced unaudited net income for the quarter ended September 30, 2006 of $1,274,000 or $0.18 per diluted share compared to $845,000 or $0.17 per diluted share for the prior year quarter. Unaudited net income increase by 51% in the current quarter compared to the three month period ended September 31, 2005. The percentage increase in earnings per share was not comparable to the increase in net income due to the issuance of an additional 848,000 shares during the fourth quarter of 2005 and 2,432,000 shares in connection with the acquisition of Port City Capital Bank on August 31, 2006.
The increase in earnings resulted primarily from strong earning asset growth over the past twelve month period. Earning assets, which include loans outstanding, investment securities, and other interest earning assets, increased by over $246 million over the past twelve months. Of the total $246 million increase, approximately $156 million was acquired and $90 million represents internally generated earning asset growth. The net interest margin declined to 3.89% for the current three-month period from 3.93% for the prior year period. Net interest income increased by $1,266,000 or 35% from $3.6 million for the prior year quarter to $4.9 million in the current quarter. Non-interest income increased by $81,000 or 13% due to increases in service charges, other deposit-related customer service fees and dividends from other non-marketable investments. Non-interest income for the September 30, 2005 period included a $17,000 loss on the disposition of available-for-sale securities. Non-interest expenses increased by 26% from $2.7 million to $3.4 million primarily in those areas most impacted by franchise expansion such as personnel, occupancy, data processing, advertising and office supplies. During the past year, the Company opened one new full-service branch office and acquired Port City Capital Bank in Wilmington, North Carolina. The provision for loan losses was $182,000 during the current quarter compared with $240,000 for the prior year period.
For the nine months ended September 30, 2006, Crescent reported net income of $3,260,000 or $.50 per diluted share compared with $2,139,000 or $0.43 per diluted share for the nine months ended September 30, 2005. Net interest income increased by $3,189,000 or 32% from $10.0 million for the prior year period to $13.2 million for the current nine-month period. The net interest margin for the current nine-month period was 3.97% compared to 3.89% for the prior year period. Non-interest income increased by $168,000 or 10%. Non-interest expenses increased by $1,652,000 or 21%. The provision for loan losses for the current nine-month period was $617,000 compared with $747,000 for the prior year period.
Crescent Financial Corporation reported total assets on September 30, 2006 of $684 million reflecting a $279 million or 69% increase over total assets of $405 million on September 30, 2005. Total net loans increased by $201 million or 63% from $318 million a year ago to $519 million at September 30, 2006. Total deposits increased by $227 million or 73% from $313 million to $540 million and total borrowings declined by 3% from $62 million to $60 million. Total stockholders' equity grew by $52 million from $29 million to $81 million at September 30, 2006 due primarily to the acquisition of Port City Capital Bank in August 2006 and the equity offering in the fourth quarter of 2005. At the date of acquisition, Port City Capital Bank had total assets of $185 million (of which $27 million represented goodwill), total net loans of $127 million, total deposits of $144 million and no borrowings.
Mike Carlton, President and CEO, stated, "We are particularly pleased with the continued record earnings, sound balance sheet growth and strategic accomplishments during the third quarter. Our team of experienced bankers has been able to generate substantial internal growth due to the favorable economic environments in which we serve. With the successful completion of the acquisition of Port City Capital Bank at the end of August, we are now poised for even greater successes."
Crescent State Bank is a state chartered bank operating ten banking offices in Cary (2), Apex, Clayton, Holly Springs, Southern Pines, Pinehurst, Sanford, Garner and Raleigh, North Carolina. Port City Capital Bank operates one banking office in Wilmington, North Carolina. Crescent Financial Corporation stock can be found on the NASDAQ Global Market trading under the symbol CRFN. Investors can access additional corporate information, product descriptions and online services through the Bank's website at www.crescentstatebank.com.
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 Crescent Financial Corporation's recent filings with the Securities Exchange Commission, including but not limited to its Annual Report on Form 10-K and its other periodic reports.
