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EX-99 2 firststateexb99dec9.txt 1 Press Release - December 9, 2005 For Immediate Release 1st State Bancorp, Inc. For more information contact: James C. McGill (336) 227 - 8861 1st State Bancorp, Inc. announces earnings Burlington, North Carolina 1st State Bancorp, Inc. (Nasdaq: FSBC) 1st State Bancorp, Inc. (Nasdaq: FSBC), the parent holding company for 1st State Bank, has reported earnings for the quarter and year ended September 30, 2005. Net income for the quarter ended September 30, 2005 was $907,000 or basic and diluted earnings per share of $0.33 and $0.31, respectively. These results compare with net income of $954,000 or basic and diluted earnings per share of $0.34 and $0.32, respectively, reported in the prior year's quarter. The decrease in earnings during the quarter ended September 30, 2005 was due in part to the Company's increased loan loss provision. The Company recorded a loan loss provision of $156,000 for the quarter ended September 30, 2005 compared to $60,000 for the same period last year. Net interest income increased to $3.2 million for the quarter ended September 30, 2005 from $3.0 million in the prior year's quarter. The increased net interest income results primarily from higher net interest margins. This improvement results primarily from increased interest income from the recent rise in short term rates by the Federal Reserve Board. Net income for the year ended September 30, 2005 was $3,381,000 or basic and diluted earnings per share of $1.21 and $1.14, respectively. These results compare with net income of $3,464,000 or basic and diluted earnings of $1.23 and $1.17, respectively. The decrease in earnings was due in part to the Company's increased loan loss provision. The Company recorded a loan loss provision of $1,046,000 for the year ended September 30, 2005 compared to $240,000 in the prior year. Net interest income increased to $12.5 million for the current year compared to $11.5 million in the prior year. Nonperforming assets totaled $2.8 million a September 30, 2005 compare with $4.0 million at September 30, 2004. The allowance for loan losses was $4,292,000 at year-end which represents 1.82% of loans held for investment compared to 1.68% at September 30, 2004. The increase in the provision for loan losses took into account, among other factors, this year's net chargeoffs of $710,000 and the creation of a specific reserve of $900,000 on a credit that has been identified as a potential loan problem. At September 30, 2005, 1st State Bancorp, Inc. had total assets of $368 million, deposits of $273 million and stockholders' equity of $66.2 million. The book value per share of common stock was $22.85 per share at September 30, 2005. 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. 2 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. 3 1st State Bancorp, Inc. (Nasdaq: FSBC - News) ---- ---- Summary of Financial Highlights Selected Financial Data: Sep 30, Sep 30, (in thousands - unaudited) 2005 2004 Total assets $367,839 $377,714 Loans receivable, net 231,667 231,763 Loans held for sale 1,010 930 Investment securities 110,515 119,612 Cash and cash equivalents 8,016 9,854 Deposit accounts 272,825 262,734 Advances from Federal Home Loan Bank 25,000 44,000 Dividend payable 290 296 Total stockholders' equity 66,235 65,914 Selected Operating Data: Three months ended Year ended (in thousands - unaudited) 9/30/2005 9/30/2004 9/30/2005 9/30/2004 Interest income 5,024 4,235 18,658 16,342 Interest expense 1,784 1,199 6,122 4,793 Net interest income 3,240 3,036 12,536 11,549 Provision for loan losses 156 60 1,046 240 Net interest income after provision for loan losses 3,084 2,976 11,490 11,309 Non-interest income 487 539 2,121 2,341 Non-interest expense 2,126 2,048 8,330 8,280 Income before taxes 1,445 1,467 5,281 5,370 Income tax expense 537 513 1,900 1,906 Net income 908 954 3,381 3,464 4
Per Share Data: Three months ended Year ended (unaudited) 9/30/2005 9/30/2004 9/30/2005 9/30/2004 Basic earnings per share $0.33 $0.34 $1.21 $1.23 Diluted earnings per share 0.31 0.32 1.14 1.17 Average shares outstanding - basic 2,792,167 2,827,413 2,805,440 2,818,510 Average shares outstanding - diluted 2,975,190 2,968,525 2,966,346 2,966,711 Cash dividends per share $0.10 $0.10 $0.40 $0.40 Book value at September 30 $22.85 $22.25 Shares outstanding at September 30 2,898,637 2,962,323
Asset Quality Sep 30, Sep 30, ( unaudited) 2005 2004 Allowance for loan losses to gross loans held for investment 1.82% 1.68% Nonperforming assets to total assets 0.77% 1.05%
Interest Margin Three months ended Year ended (% of average assets - unaudited) 9/30/2005 9/30/2004 9/30/2005 9/30/2004 Yield on interest earning assets 5.74% 4.75% 5.32% 4.72% Cost of interest bearing liabilities 2.55% 1.66% 2.18% 1.69% Interest rate spread 3.19% 3.09% 3.14% 3.03% Net interest income as a percentage of average interest earning assets 3.70% 3.41% 3.57% 3.34%
The following information was filed by 1St State Bancorp Inc on Friday, December 9, 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-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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