Exhibit 99.1

 

FOR RELEASE: March 2, 2018

Mark A. Jeffries

Executive Vice President

Chief Financial Officer

Office: 910-892-7080 and Direct: 910-897-3603

markj@SelectBank.com

SelectBank.com

SELECT BANCORP REPORTS

FOURTH QUARTER AND YEAR-END 2017 EARNINGS

DUNN, NC . . . Select Bancorp, Inc. (the “Company” NASDAQ: SLCT), the holding company for Select Bank & Trust, today reported net income for the year ended December 31, 2017 of $3.2 million and basic and diluted earnings per share of $0.27, compared to net income of $6.8 million and basic and diluted earnings per share of $0.58 for the year ended December 31, 2016.

For the fourth quarter of 2017, the Company reported net loss of $2.0 million, and basic and diluted loss per share of $(0.17), compared to net income of $1.6 million and basic and diluted earnings per share of $0.14 for the fourth quarter of 2016.

Embedded in the Company’s net income numbers for the year and quarter ended December 31, 2017, are net after tax merger expenses of $1.5 million and $1.3 million, respectively, related to the acquisition of Premara Financial, Inc. and its subsidiary bank, Carolina Premier Bank, which closed in December 2017. In addition, due to the new tax legislation signed into law on December 22, 2017, the Company was required to calculate a “tax re-measurement” for the associated rate change for its deferred taxes. This tax re-calculation resulted in an increase of approximately $2.5 million of income tax expense for the year and fourth quarter of 2017, which directly impacted the Company’s reported results for those periods.

Total assets, deposits, and total loans for the Company as of December 31, 2017 were $1.2 billion, $995.0 million, and $982.6 million, respectively, compared to total assets of $846.6 million, total deposits of $679.7 million, and total loans of $677.2 million as of the same date in 2016. The merger represented increases of $278.8 million in total assets, $198.4 million in gross loans, $18.0 million in goodwill and $226.3 million in deposits. Organic growth accounted for $68.7 million in total assets, $107.0 million in gross loans and $89.1 million in deposits.

For the twelve months ended December 31, 2017, return on average assets was 0.35% and return on average equity was 2.93%, compared to 0.81% and 6.61%, respectively, for the twelve months ended December 31, 2016. Non-performing loans decreased to $7.0 million at December 31, 2017 from $9.4 million at December 31, 2016. Non- performing loans equaled 0.71% of loans at December 31, 2017, decreasing from 1.02% of loans at December 31, 2016. Foreclosed real estate equaled $1.3 million at December 31, 2017, compared to $599,000 at December 31, 2016. For the year ended December 31, 2017, net charge-offs were $944,000, or 0.13% of average loans, compared to net charge offs of $126,000, or 0.02% of average loans in 2016. At December 31, 2017, the allowance for loan losses was $8.8 million, or 0.90% of total loans, as compared to $8.4 million, or 1.24% of total loans, at December 31, 2016.

Net interest margin was 4.09% and 4.14% for the year and quarter ending December 31, 2017, as compared to 4.06% and 3.98% for the year and quarter ending December 31, 2016.

“Our strategy has been growth-oriented and efficiency driven, while delivering value to our shareholders,” President and CEO William L. Hedgepeth II said. “We continued that mission in 2017. While our 2017 results were impacted by the change in tax law during the 2017 fourth quarter, the required tax re-measurement is a non-cash flow expense. Ultimately, we expect the reduction in the corporate tax rate will have long-term benefits for our net income and should positively impact our operating performance in the quarters to come.”

Among the major highlights of 2017 were the acquisition of Premara Financial, Inc. and the accompanying entry into the Charlotte market and into South Carolina, the opening of a new branch in Wilmington in the Mayfaire district, and the opening of Select Mortgage, a division of Select Bank & Trust.

“It has been our goal for some time to expand,” Hedgepeth continued, “2017 was a year for growth and expansion. The merger closed on December 15, 2017, and Select has added four banking offices, one in Charlotte and three in the South Carolina communities of Rock Hill, Blacksburg and Six Mile. We expect that the recent merger will allow us to leverage our resources in ways neither bank could achieve on its own. We are also excited about the growth we have already experienced from our new Wilmington office, and we believe adding mortgages to our portfolio of products and services allows us to offer a customer all the financial services they need at their local community bank.”

Select Bank & Trust has 18 branch offices in these North Carolina communities: Dunn, Burlington, Charlotte, Clinton, Elizabeth City, Fayetteville, Goldsboro, Greenville, Leland, Lillington, Lumberton, Morehead City, Raleigh, Washington, and Wilmington and in the following South Carolina communities: Blacksburg, Rock Hill and Six Mile.

Important Note Regarding Forward-Looking Statements

The information as of and for the quarter and year ended December 31, 2017, as presented is unaudited. 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, 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: our ability to manage growth; substantial changes in financial markets; our ability to obtain the synergies and expense efficiencies anticipated from our recent merger with Carolina Premier Bank; regulatory changes; the impact of the new the tax law on our earnings, including any subsequent adjustments to the valuation of our deferred tax assets and liabilities; changes in interest rates; loss of deposits and loan demand to other savings and financial institutions; 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.

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Select Bancorp, Inc.

Selected Financial Information and Other Data

($ in thousands, except per share data)

	At or for the three months ended (unaudited)															At or for the twelve months ended
	December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			December 31, 2017			December 31, 2016			December 31, 2015
Summary of Operations:
Total interest income	$	10,981		$	10,042		$	9,469		$	9,125		$	8,877		$	39,617		$	34,709		$	33,341
Total interest expense		1,505			1,357			1,197			1,047			985			5,106			3,733			3,542
Net interest income		9,476			8,685			8,272			8,078			7,892			34,511			30,976			29,799
Provision for (recovery of) loan losses		276			202			1,083			(194	)		669			1,367			1,516			890
Net interest income after provision		9,200			8,483			7,189			8,272			7,223			33,144			29,460			28,909
Noninterest income		786			778			778			730			740			3,072			3,222			3,292
Merger/Acquisition related expenses		1,888			278			-			-			-			2,166			-			378
Noninterest expense		7,207			6,161			5,980			5,805			5,511			25,153			22,281			21,852
Income before income taxes		891			2,822			1,987			3,197			2,452			8,897			10,401			9,971
Provision for income taxes		2,936			1,043			651			1,082			847			5,712			3,647			3,418
Net Income (loss)		(2,045	)		1,779			1,336			2,115			1,605			3,185			6,654			6,553
Dividends on Preferred Stock		-			-			-			-			-			-			4			77
Net income available to common shareholders (loss)	$	(2,045	)	$	1,779		$	1,336		$	2,115		$	1,605		$	3,185		$	6,750		$	6,476
Share and Per Share Data:
Earnings (loss) per share - basic	$	(0.17	)	$	0.15		$	0.11		$	0.18		$	0.14		$	0.27		$	0.58		$	0.56
Earnings (loss) per share - diluted	$	(0.17	)	$	0.15		$	0.11		$	0.18		$	0.14		$	0.27		$	0.58		$	0.56
Book value per share	$	9.72		$	9.42		$	9.26		$	9.14		$	8.95		$	9.72		$	8.95		$	8.38
Tangible book value per share	$	7.72		$	8.78		$	8.61		$	8.48		$	8.29		$	7.72		$	8.29		$	7.67
Ending shares outstanding		14,009,137			11,662,621			11,662,471			11,661,571			11,645,413			14,009,137			11,645,413			11,583,011
Weighted average shares outstanding:
Basic		12,071,392			11,662,580			11,662,117			11,652,612			11,636,647			11,763,050			11,610,705			11,502,800
Diluted		12,071,392			11,717,533			11,727,110			11,714,336			11,677,958			11,826,977			11,655,111			11,567,811
Selected Performance Ratios:
Return on average assets(2)		(0.81	)%		0.77	%		0.60	%		1.00	%		0.76	%		0.35	%		0.81	%		0.86	%
Return on average equity(2)		(7.00	)%		6.44	%		4.96	%		8.10	%		6.12	%		2.93	%		6.61	%		6.42	%
Net interest margin		4.14	%		4.19	%		4.18	%		4.14	%		3.98	%		4.09	%		4.06	%		4.38	%
Efficiency ratio (1)		70.23	%		65.11	%		66.08	%		65.91	%		63.84	%		66.93	%		65.15	%		66.04	%
Period End Balance Sheet Data:
Gross Loans	$	982,626		$	763,432		$	738,021		$	706,758		$	677,195		$	982,626		$	677,195		$	617,398
Total interest earning assets		1,063,322			833,766			816,008			809,164			770,288			1,063,322			770,288			726,408
Goodwill		24,904			6,931			6,931			6,931			6,931			24,904			6,931			6,931
Core Deposit Intangible		3,101			547			629			716			810			3,101			810			1,241
Total Assets		1,194,135			922,749			906,524			879,624			846,640			1,194,135			846,640			817,015
Deposits		995,044			775,022			739,653			713,138			679,661			995,044			679,661			651,161
Short-term debt		28,279			22,366			33,559			33,306			37,090			28,279			37,090			29,673
Long-term debt		19,372			12,372			22,839			22,939			22,039			19,372			23,039			28,703
Shareholders' equity		136,115			109,819			108,017			106,562			104,273			136,115			104,273			104,702
Selected Average Balances:
Gross Loans	$	809,608		$	748,699		$	715,366		$	686,800		$	663,213		$	732,089		$	639,412		$	578,759
Total interest earning assets		901,324			826,595			799,240			776,496			778,477			813,773			744,024			686,663
Core Deposit Intangible		1,007			589			673			764			862			640			1,020			1,330
Total Assets		997,450			914,986			887,412			856,712			844,162			898,943			829,315			765,284
Deposits		827,408			754,169			719,976			689,795			679,404			738,310			665,764			607,214
Short-term debt		23,476			32,703			33,413			35,048			33,032			34,523			32,111			32,316
Long-term debt		13,676			15,633			22,871			22,989			23,089			14,239			25,739			20,147
Shareholders' equity		115,874			109,537			108,071			105,860			104,404			108,709			102,110			102,068
Asset Quality Ratios:
Nonperforming loans	$	6,978		$	6,153		$	6,159		$	7,956		$	9,430		$	6,978		$	9,430		$	8,712
Other real estate owned		1,258			2,093			2,702			883			599			1,258			599			1,401
Allowance for loan losses		8,835			8,647			8,488			8,022			8,411			8,835			8,411			7,021
Nonperforming loans (3) to period-end loans		0.71	%		0.81	%		0.83	%		1.13	%		1.39	%		0.71	%		1.02	%		1.41	%
Allowance for loan losses to period-end loans		0.90	%		1.13	%		1.15	%		1.14	%		1.24	%		0.90	%		1.24	%		1.14	%
Delinquency Ratio (4)		0.63	%		0.38	%		0.07	%		0.21	%		0.44	%		0.63	%		0.44	%		0.40	%
Net loan charge-offs (recoveries) to average loans (2)		0.05	%		0.02	%		0.35	%		0.12	%		0.08	%		0.13	%		0.02	%		0.12	%

(1)	Efficiency ratio is calculated as non-interest expenses divided by the sum of net interest income and non-interest income.
(2)	Annualized.
(3)	Nonperforming loans consist of non-accrual loans and restructured loans.
(4)	Delinquency Ratio includes loans 30-89 days past due and excludes non-accrual loans.