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Select Bank reports lower 2Q net

Aug. 6. Select Bank & Trust Co., which has a new branch in Cornelius, reported net income for the quarter ended June 30 of $681,000 with basic and diluted earnings per share of $0.04, compared to net income of $3.4 million with basic and diluted earnings per share of $0.18 for the same quarter last year.

The decrease in net income in the second quarter of 2020 compared to the second quarter of 2019 was primarily attributable to a provision for loan losses of $1.9 million compared to a recovery of loan losses of $207,000 for the same period in 2019. The increase in the provision for loan losses was primarily due to factors associated with the economic impact of the COVID-19 pandemic.

“We continue to navigate the challenges that we are facing during this unprecedented crisis caused by the COVID-19 pandemic. Our customers, employees, shareholders, families and friends have been deeply affected by the pandemic and the future is uncertain,” said William Hedgepeth, CEO.

The bank, based in Dunn, NC, reported $709,000 of expenses related to the acquisition of three branches from First Citizens Bank during the quarter, as well as $265,000 in expenses associated with new branches in Cornelius and Holly Springs.

Total assets, deposits, and gross loans as of June 30 were $1.6 billion, $1.3 billion, and $1.2 billion, respectively, compared to total assets of $1.3 billion, total deposits of $1.0 billion, and total loans of $997.1 million as of the same date in 2019.

Hedgepeth said the bank’s capital position, liquidity and asset quality are sound at this time and sufficient to navigate the COVID-19 pandemic in the coming weeks and months.

“We have assisted our customers with Paycheck Protection Program, or PPP, small business loans and COVID-19 loan modifications where necessary,” he said.

The bank originated over 1,200 PPP loans totaling approximately $97.0 million. About two-thirds of the PPP loans were at or below $50,000. Select also granted over 475 COVID-19 loan modifications totaling approximately $240.0 million.

“Our employees and Board of Directors are committed to assisting our customers, employees and communities through this crisis,” Hedgepeth said.

Highlights:

—Repurchased 193,138 shares of its common stock during the second quarter of 2020 under a repurchase plan authorized by the Board of Directors in 2019. The Company may repurchase up to an additional 42,002 shares of its common stock under the repurchase plan.

—Loan growth was approximately $210.5 million in the second quarter of 2020, which consisted of $103.3 million in loans acquired from First Citizens in connection with the acquisition of three western North Carolina branches, plus $95.1 million in PPP loans and $12.1 million in net organic loan growth.

—Deposit growth was approximately $356.1 million in the second quarter of 2020, which consisted of $185.5 million in deposits acquired from First Citizens in connection with the branch acquisition and $170.6 million in net organic growth.
With the closing of the acquisition of three western North Carolina branches on April 17, 2020, our total assets are in excess of $1.6 billion.

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