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1St State Bancorp Inc (1074078) SEC Filing 10-Q Quarterly report for the period ending Thursday, June 30, 2005

1St State Bancorp Inc

CIK: 1074078

EX-99
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firststate8kaug2-05ex99.txt

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PRESS RELEASE - AUGUST 1, 2005                     FOR IMMEDIATE RELEASE

1st STATE BANCORP, INC.                            FOR MORE INFORMATION CONTACT:
                                                         JAMES C. McGILL
                                                         (336) 227-8861

              1st STATE BANCORP, INC. ANNOUNCES QUARTERLY EARNINGS

BURLINGTON, NORTH CAROLINA       1st STATE BANCORP, INC.          (NASDAQ: FSBC)



1st State Bancorp, Inc. (Nasdaq: FSBC), the holding company for 1st State Bank,
has reported earnings for the quarter ended June 30, 2005 of $738,000, down
$235,000, or 24.2% from the same period of the previous year. The decrease in
earnings during the three month period ending June 30, 2005 was due in part to
the Company's recorded loan loss provision of $500,000 compared to $60,000 for
the same period last year. The Company reported basic and diluted earnings per
share of $0.27 and $0.25, respectively, for the quarter ended June 30, 2005
compared to basic and diluted earnings per share of $0.35 and $0.33,
respectively, for the quarter ended June 30, 2004.


Net income for the nine months ended June 30, 2005 decreased $36,000 to
$2,474,000, from net income of $2,510,000 earned in the same period of the
previous year. Basic and diluted earnings per share were $0.88 and $0.84 per
share, respectively, for the nine months ended June 30, 2005, compared with
$0.89 and $0.85 per share, respectively, in the same period of the previous
year. The decrease in earnings resulted from increased provision for loan losses
and decreased non-interest income which were offset somewhat by increased net
interest income.


Net interest income increased $240,000, or 8.2%, to $3.2 million for the quarter
ended June 30, 2005 from the $2.9 million recorded in the quarter ended June 30,
2004. The net interest income as a percentage of average interest earning assets
increased 33 basis points to 3.62% for the quarter ended June 30, 2005 from the
3.29% reported for the quarter ended June 30, 2004. Net interest income
increased $784,000, or 9.2% to $9.3 million for the nine months ended June 30,
2005 from the prior year's net interest income of $8.5 million. This improvement
results primarily from increased interest income from the recent rise in short
term rates by the Federal Reserve Board.


Nonperforming assets totaled $3,101,000 at June 30, 2005 compared with
$3,979,000 at September 30, 2004 and $4,033,000 at June 30, 2004. At quarter
end, the allowance for loan losses was $4,191,000, amounting to 1.76% of loans
held for investment compared to 1.68% and 1.67% at September 30, 2004 and June
30, 2004, respectively. The increase in the provision for loan losses took into
account, among other factors, this year's chargeoffs of $655,000 and the
creation of a specific reserve of $794,000 at June 30, 2005 on a credit that has
been identified as a potential loan problem.



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As announced on June 29, 2005, 1st State Bancorp, Inc. executed a definitive
merger agreement with Capital Bank Corporation, headquartered in Raleigh, North
Carolina whereby the Company will be merged with and into Capital Bank. The
transaction is expected to be completed in January 2006, subject to approval of
shareholders of both companies and regulators and other normal and customary
closing conditions.

1st State Bancorp, Inc., through its subsidiary 1st State Bank, currently
services its customers from seven full service banking offices in Alamance
County.

Statements contained in this release, which are not historical facts, are
forward-looking statements as defined in the Private Litigation Reform Act of
1995. Such forward-looking statements are subject to risks and uncertainties
which could cause actual results to differ materially from those currently
anticipated due to a number of factors which include the effects of future
economic conditions, governmental fiscal and monetary policies, legislative and
regulatory changes, the risks of changes in interest rates, the effects of
competition, and including without limitation to other factors that could cause
actual results to differ materially as discussed in documents filed by the
Company with the Securities and Exchange Commission from time to time.


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1st State Bancorp, Inc. (Nasdaq: FSBC) Summary of Financial Highlights Selected Financial Data: June 30, September 30, (in thousands - unaudited) 2005 2004 ---- ---- Total assets $ 373,087 $ 377,714 Loans receivable, net 234,396 231,763 Loans held for sale 1,390 930 Investment securities 111,791 119,612 Cash and cash equivalents 8,949 9,854 Deposit accounts 274,367 262,734 Advances from Federal Home Loan Bank 28,000 44,000 Total stockholders' equity 66,120 65,914
Selected Operating Data: Three months ended Nine months ended (in thousands - unaudited) 6/30/2005 6/30/2004 6/30/2005 6/30/2004 --------- --------- --------- --------- Interest income $ 4,785 $ 4,106 $ 13,634 $ 12,107 Interest expense 1,609 1,170 4,337 3,594 Net interest income 3,176 2,936 9,297 8,513 Provision for loan losses 500 60 890 180 Net interest income after provision for loan losses 2,676 2,876 8,407 8,333 Non-interest income 525 673 1,634 1,788 Non-interest expense 2,060 2,060 6,204 6,218 Income before taxes 1,141 1,489 3,837 3,903 Income tax expense 403 516 1,363 1,393 Net income $ 738 $ 973 $ 2,474 $ 2,510
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Per Share Data: Three months ended Nine months ended (unaudited) 6/30/2005 6/30/2004 6/30/2005 6/30/2004 --------- --------- --------- --------- Basic earnings per share $ 0.27 $ 0.35 $ 0.88 $ 0.89 Diluted earnings per share 0.25 0.33 0.84 0.85 Average shares outstanding - basic 2,785,348 2,820,116 2,809,884 2,815,518 Average shares outstanding - diluted 2,943,941 2,965,560 2,961,457 2,965,954 Cash dividends per share $ 0.10 $ 0.10 $ 0.30 $ 0.30 Book value at June 30 $ 22.81 $ 21.53 Shares outstanding at June 30 2,898,637 2,962,323
Interest Margin Three months ended Nine months ended (% of average assets - unaudited) 6/30/2005 6/30/2004 6/30/2005 6/30/2004 --------- --------- --------- --------- Yield on interest earning assets 5.45% 4.61% 5.16% 4.67% Cost of interest bearing liabilities 2.30% 1.60% 2.05% 1.70% Interest rate spread 3.15% 3.01% 3.11% 2.97% Net interest income as a percentage of average interest earning assets 3.62% 3.29% 3.51% 3.28%
Asset Quality June 30, June 30, (unaudited) 2005 2004 ---- ---- Allowance for loan losses to gross loans held for investment 1.76% 1.67% Nonperforming assets to total assets 0.83% 1.06%

The following information was filed by 1St State Bancorp Inc on Tuesday, August 2, 2005 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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SEC Filing Tools
CIK: 1074078
Form Type: 10-Q Quarterly Report
Accession Number: 0000914317-05-002607
Submitted to the SEC: Thu Aug 11 2005 3:25:57 PM EST
Accepted by the SEC: Thu Aug 11 2005
Period: Thursday, June 30, 2005
Industry: State Commercial Banks

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