CHARLESTON, S.C., Oct. 19,
2016 /PRNewswire/ -- Carolina Financial Corporation (NASDAQ:
CARO) today announced financial results for the third quarter of
2016. Highlights at and for the three months ended
September 30, 2016, include:
- Net income for the third quarter 2016 increased 53.1% to
$5.9 million, or $0.47 per diluted share from $3.9 million, or $0.40 per diluted share for the third quarter of
2015.
- Operating earnings for the third quarter of 2016, which
excludes certain non-operating income and expenses, increased 45.8%
to $5.9 million, or $0.47 per diluted share, from $4.0 million, or $0.42 per diluted share, from the third quarter
of 2015.
- Loans receivable, excluding acquired loans, grew at an
annualized rate of 19.3% or $133.7
million since December 31,
2015 and 24.7% or $66.0
million since June 30,
2016.
- Nonperforming assets to total assets of 0.42% as of
September 30, 2016.
- Core deposits, excluding acquired deposits, increased
$150.0 million since December 31, 2015 and $45.3 million since June
30, 2016.
"We are pleased to report an increase in operating earnings of
45.8% for the third quarter of 2016 over the comparable prior
quarter. These strong operating earnings are the result of
excellent earnings of CresCom Bank combined with improved results
of Crescent Mortgage Company. The Company continued to experience
exceptional growth in the third quarter with loans receivable
growing at an annualized rate of 24.7% and core deposit growth of
$45.3 million while maintaining
superior asset quality. Finally, we are excited to announce plans
to open a second branch in the Wilmington market by year end,"
stated Jerry Rexroad, Chief
Executive Officer.
Financial Results
Carolina Financial Corporation
- The Company reported net income for the three months ended
September 30, 2016 of $5.9 million, or $0.47 per diluted share, as compared to
$3.9 million, or $0.40 per diluted share, for the three months
ended September 30, 2015. Net
income for the nine months ended September
30, 2016 totaled $12.4
million, or $1.02 per diluted
share, compared to net income of $10.8
million, or $1.13 per diluted
share. Included in net income for the nine months ended
September 30, 2016 were pretax merger
related expense of $3.0
million.
- Operating earnings for the third quarter of 2016 increased
45.8% to $5.9 million, or
$0.47 per diluted share, from
$4.0 million, or $0.42 per diluted share, from the third quarter
of 2015. Operating earnings for the nine months ended
September 30, 2016 increased 25.8% to
$14.5 million, or $1.18 per diluted share, from $11.5 million, or $1.20 per diluted share, for the nine months
ended September 30, 2015.
- The Company's net interest margin-tax equivalent increased to
3.75% for the third quarter of 2016 compared to 3.66% for the third
quarter of 2015.
- The Company reported book value per common share of
$13.00 and $11.92 as of September 30,
2016 and December 31, 2015,
respectively. Tangible book value per common share was
$12.35 and $11.66 as of September 30,
2016 and December 31, 2015,
respectively.
- At September 30, 2016, the
Company's regulatory capital ratios exceeded the minimum levels
currently required. Stockholders' equity totaled $160.3 million as of September 30, 2016 compared to $139.9 million at December
31, 2015.
CresCom Bank
- The Bank's net income (excluding Crescent Mortgage Company)
increased 65.9% to $4.7 million for
the three months ended September 30,
2016 compared to $2.9 million
for the three months ended September 30,
2015. Net income for the nine months ended September 30, 2016 totaled $10.3 million compared to net income of
$8.1 million for the nine months
ended September 30, 2015. Included in
net income for the nine months ended September 30, 2016 were pretax merger related
expense of $ $2.9 million.
- No provision for loan loss was recorded during the three and
nine month periods ended September 30,
2016 or 2015. This was primarily due to
continued excellent asset quality as well as net recoveries of
$199,000 and $854,000 for the nine months ended September 30, 2016 and 2015, respectively.
- The Bank's non-performing assets were 0.42% and 0.47% of total
assets at September 30, 2016 and
December 31, 2015,
respectively. The Bank added $1.5
million in real estate acquired through foreclosure, net as
a result of the merger with Congaree Bancshares, Inc. during the
second quarter of 2016.
- Loans receivable increased to $1.1
billion at September 30, 2016
compared to $922.7 million at
December 31, 2015. The increase in
loans receivable primarily relates to the completed acquisition of
Congaree as well as the Bank's focus on commercial lending and
residential mortgage lending.
- The number of checking accounts increased at an annualized rate
of 10.6%, excluding Congaree checking accounts acquired, since
December 31, 2015. As of
September 30, 2016 and December 31, 2015, core deposits, defined as
checking, savings and money market, comprised approximately 61.8%
and 56.7%, respectively, of total deposits. Total deposits,
excluding acquired deposits, increased $189.5 million since December 31, 2015.
- The Bank's retail mortgage conforming loan originations
increased to $25.6 million for the
three months ended September 30, 2016
compared to $17.6 million for the
three months ended September 30,
2015. For the nine months ended September 30, 2016, retail mortgage conforming
loan originations increased to $68.3
million compared to $50.4
million for the nine months ended September 30, 2015. As a result of the increased
originations, retail mortgage banking noninterest income increased
to $680,000 and $1.6 million for the three and nine months ended
September 30, 2016 compared to
$431,000 and $1.2 million for the three and nine months ended
September 30, 2015. Mortgage banking
income consists primarily of gain on sale of loans and related fees
as well as fair value changes in mortgage banking derivatives.
Crescent Mortgage Company
- Net income for Crescent Mortgage Company, a wholly owned
subsidiary of the Bank, was $1.4
million for the three months ended September 30, 2016 compared to $1.3 million for the three months ended
September 30, 2015. Net income for
the nine months ended September 30,
2016 was $2.7 million compared
to $3.3 million for the nine months
ended September 30, 2015.
- The increase in net income of Crescent Mortgage Company during
third quarter of 2016 is primarily attributable to an increase in
margin during the period. Originations for the three months ended
September 30, 2016 and 2015 were
$253.5 million and $261.9 million, respectively. Originations
for the nine months ended September 30,
2016 and 2015 were $645.4
million and $769.7 million,
respectively. The percentage of originations attributable to
refinances were 35.9% for the third quarter of 2016 compared to
30.3% for the third quarter of 2015.
Conference Call
A conference call will be held at 10:00
a.m., Eastern Time on October 20,
2016. The conference call can be accessed by dialing (855)
218-6998 or (615) 247-5963 and requesting the Carolina Financial
Corporation earnings call. The conference ID number is 93428847.
Listeners should dial in 10 minutes prior to the start of the
call. The live webcast and presentation slides will be
available on www.haveanicebank.com under Investor Relations,
"Investor Presentations."
A replay of the webcast will be available on
www.haveanicebank.com under Investor Relations, "Investor
Presentations" shortly following the call. A replay of the
conference call can be accessed approximately three hours after the
call by dialing (855) 859-2056 or (404) 537-3406 and requesting
conference number 93428847.
About Carolina Financial Corporation
Carolina Financial is the holding company of CresCom Bank, which
also owns and operates Atlanta-based Crescent Mortgage Company.
Carolina Financial trades on NASDAQ under the symbol CARO. As of
September 30, 2016, Carolina
Financial had approximately $1.7
billion in total assets and Crescent Mortgage Company
originated loans in 45 states and partners with community banks,
credit unions and mortgage brokers. In 2016, Carolina
Financial was ranked #8 on American Banker's 2015 list of "Top 200
Community Banks and Thrifts as Ranked by Three-Year Average ROE",
and was added to the Russell 2000 as part of the 2016 Russell
indexes reconstitution. In June 2016,
Carolina Financial Corporation completed its previously announced
merger with Congaree Bancshares, Inc.
Addendum to News Release – Use of Certain Non-GAAP Financial
Measures and Forward-Looking Statements
This news release contains financial information determined by
methods other than in accordance with generally accepted accounting
principles ("GAAP"). Such statements should be read along
with the accompanying tables, which provide a reconciliation of
non-GAAP measures to GAAP measures. This news release and the
accompanying tables discuss financial measures, such as core
deposits, tangible book value, operating earnings and net income
related to segments of the Company, which are non-GAAP
measures. We believe that such non-GAAP measures are useful
because they enhance the ability of investors and management to
evaluate and compare the Company's operating results from period to
period in a meaningful manner. Non-GAAP measures should not
be considered as an alternative to any measure of performance as
promulgated under GAAP. Investors should consider the
Company's performance and financial condition as reported under
GAAP and all other relevant information when assessing the
performance or financial condition of the company. Non-GAAP
measures have limitations as analytical tools, and investors should
not consider them in isolation or as a substitute for analysis of
the Company's results or financial condition as reported under
GAAP.
Please refer to the Non-GAAP reconciliation tables later in this
release for additional information.
Forward-Looking Statements
Certain statements in this news release contain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, such as statements relating to future plans and
expectations, and are thus prospective. Such
forward-looking statements include but are not limited to
statements with respect to our plans, objectives, expectations and
intentions and other statements that are not historical facts, and
other statements identified by words such as "believes," "expects,"
"anticipates," "estimates," "intends," "plans," "targets," and
"projects," as well as similar expressions. Such
statements are subject to risks, uncertainties, and other factors
which could cause actual results to differ materially from future
results expressed or implied by such forward-looking
statements. Although we believe that the assumptions
underlying the forward-looking statements are reasonable, any of
the assumptions could prove to be inaccurate. Therefore, we
can give no assurance that the results contemplated in the
forward-looking statements will be realized. The
inclusion of this forward-looking information should not be
construed as a representation by the Company or any person that the
future events, plans, or expectations contemplated by the Company
will be achieved.
The following factors, among others, could cause actual results
to differ materially from the anticipated results or other
expectations expressed in the forward-looking statements: (1)
competitive pressures among depository and other financial
institutions may increase significantly and have an effect on
pricing, spending, third-party relationships and revenues; (2) the
strength of the United States
economy in general and the strength of the local economies in which
we conduct operations may be different than expected resulting in,
among other things, a deterioration in the credit quality or a
reduced demand for credit, including the resultant effect on the
Company's loan portfolio and allowance for loan losses; (3) the
rate of delinquencies and amounts of charge-offs, the level of
allowance for loan loss, the rates of loan growth, or adverse
changes in asset quality in our loan portfolio, which may result in
increased credit risk-related losses and expenses; (4) the risk
that the preliminary financial information reported herein and our
current preliminary analysis will be different when our review is
finalized; (5) changes in the U.S. legal and regulatory framework
including, but not limited to, the Dodd-Frank Act and regulations
adopted thereunder; (6) adverse conditions in the stock market, the
public debt market and other capital markets (including changes in
interest rate conditions) could have a negative impact on the
Company; (7) the business related to acquisitions may not be
integrated successfully or such integration may take longer to
accomplish than expected; (8) the expected cost savings and any
revenue synergies from acquisitions may not be fully realized
within expected timeframes; and (9) disruption from acquisitions
may make it more difficult to maintain relationships with clients,
associates, or suppliers. Additional factors that could
cause our results to differ materially from those described in the
forward-looking statements can be found in our reports (such as our
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K) filed with the SEC and available at
the SEC's Internet site (http://www.sec.gov). All
subsequent written and oral forward-looking statements concerning
the Company or any person acting on its behalf are expressly
qualified in their entirety by the cautionary statements
above. We do not undertake any obligation to update any
forward-looking statement to reflect circumstances or events that
occur after the date the forward-looking statements are made.
CAROLINA FINANCIAL
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
|
|
|
|
$
9,110
|
|
10,206
|
|
Interest-bearing
cash
|
|
|
|
|
29,211
|
|
16,421
|
|
|
Cash and cash
equivalents
|
|
|
|
38,321
|
|
26,627
|
|
Securities
available-for-sale
|
|
|
|
|
336,918
|
|
306,474
|
|
Securities
held-to-maturity
|
|
|
|
|
-
|
|
17,053
|
|
Federal Home Loan
Bank stock, at cost
|
|
|
7,438
|
|
9,919
|
|
Other
investments
|
|
|
|
|
1,801
|
|
1,760
|
|
Derivative
assets
|
|
|
|
|
|
3,168
|
|
1,945
|
|
Loans held for
sale
|
|
|
|
|
36,686
|
|
41,774
|
|
Loans receivable,
gross
|
|
|
|
|
1,133,229
|
|
922,723
|
|
Allowance for loan
losses
|
|
|
|
|
(10,340)
|
|
(10,141)
|
|
|
Loans receivable,
net
|
|
|
|
|
1,122,889
|
|
912,582
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premises and
equipment, net
|
|
|
|
|
35,086
|
|
32,562
|
|
Accrued interest
receivable
|
|
|
|
|
4,813
|
|
4,333
|
|
Real estate acquired
through foreclosure, net
|
2,843
|
|
2,374
|
|
Deferred tax assets,
net
|
|
|
|
|
8,285
|
|
5,273
|
|
Mortgage servicing
rights
|
|
|
|
|
13,556
|
|
11,433
|
|
Cash value life
insurance
|
|
|
|
|
28,772
|
|
28,082
|
|
Core deposit
intangible
|
|
|
|
|
3,771
|
|
2,961
|
|
Goodwill
|
|
|
|
|
|
4,266
|
|
-
|
|
Other
assets
|
|
|
|
|
|
5,236
|
|
4,517
|
|
|
Total
assets
|
|
|
|
|
|
$
1,653,849
|
|
1,409,669
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
|
|
|
|
$
267,892
|
|
163,054
|
|
Interest-bearing
deposits
|
|
|
|
|
1,044,384
|
|
868,474
|
|
|
Total
deposits
|
|
|
|
|
|
1,312,276
|
|
1,031,528
|
|
Short-term borrowed
funds
|
|
|
|
|
87,500
|
|
120,000
|
|
Long-term
debt
|
|
|
|
|
|
68,465
|
|
103,465
|
|
Derivative
liabilities
|
|
|
|
|
2,708
|
|
306
|
|
Drafts
outstanding
|
|
|
|
|
3,965
|
|
2,154
|
|
Advances from
borrowers for insurance and taxes
|
2,614
|
|
641
|
|
Accrued interest
payable
|
|
|
|
|
346
|
|
333
|
|
Reserve for mortgage
repurchase losses
|
|
3,130
|
|
3,876
|
|
Dividends payable to
stockholders
|
|
|
|
376
|
|
361
|
|
Accrued expenses and
other liabilities
|
|
12,138
|
|
7,146
|
|
|
Total
liabilities
|
|
|
|
|
1,493,518
|
|
1,269,810
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
|
|
-
|
|
-
|
|
Common
stock
|
|
|
|
|
125
|
|
120
|
|
Additional paid-in
capital
|
|
|
|
|
65,862
|
|
56,418
|
|
Retained
earnings
|
|
|
|
|
93,819
|
|
82,859
|
|
Accumulated other
comprehensive income, net of tax
|
525
|
|
462
|
|
|
Total stockholders'
equity
|
|
|
|
160,331
|
|
139,859
|
|
Total liabilities and
stockholders' equity
|
|
|
|
$
1,653,849
|
|
1,409,669
|
|
|
|
|
|
|
|
|
|
|
|
|
CAROLINA FINANCIAL
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Nine
Months
|
|
|
|
|
|
|
Ended September
30,
|
|
Ended September
30,
|
|
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
(In thousands, except
share data)
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
$
13,826
|
|
10,345
|
|
36,791
|
|
30,273
|
|
Investment
securities
|
|
2,264
|
|
2,058
|
|
6,835
|
|
6,031
|
|
Dividends from
Federal Home Loan Bank stock
|
83
|
|
93
|
|
288
|
|
238
|
|
Federal funds
sold
|
|
|
3
|
|
-
|
|
5
|
|
-
|
|
Other interest
income
|
|
32
|
|
16
|
|
92
|
|
60
|
|
|
Total interest
income
|
|
16,208
|
|
12,512
|
|
44,011
|
|
36,602
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
1,570
|
|
1,122
|
|
4,449
|
|
3,094
|
|
Short-term borrowed
funds
|
|
124
|
|
75
|
|
320
|
|
217
|
|
Long-term
debt
|
|
|
558
|
|
426
|
|
1,743
|
|
1,391
|
|
|
Total interest
expense
|
|
2,252
|
|
1,623
|
|
6,512
|
|
4,702
|
Net interest
income
|
|
|
13,956
|
|
10,889
|
|
37,499
|
|
31,900
|
Provision for loan
losses
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Net interest income
after provision for loan losses
|
13,956
|
|
10,889
|
|
37,499
|
|
31,900
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
Mortgage banking
income
|
|
5,605
|
|
4,753
|
|
12,967
|
|
13,874
|
|
Deposit service
charges
|
|
953
|
|
915
|
|
2,712
|
|
2,638
|
|
Net loss on
extinguishment of debt
|
(118)
|
|
-
|
|
(174)
|
|
(1,215)
|
|
Net gain on sale of
securities
|
|
111
|
|
1,017
|
|
641
|
|
1,459
|
|
Fair value
adjustments on interest rate swaps
|
99
|
|
(1,246)
|
|
(408)
|
|
(1,253)
|
|
Net increase in cash
value life insurance
|
226
|
|
172
|
|
684
|
|
530
|
|
Mortgage loan
servicing income
|
|
1,437
|
|
1,330
|
|
4,238
|
|
3,956
|
|
Other
|
|
|
|
560
|
|
381
|
|
1,728
|
|
1,187
|
|
|
Total noninterest
income
|
|
8,873
|
|
7,322
|
|
22,388
|
|
21,176
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
8,481
|
|
7,204
|
|
23,306
|
|
21,453
|
|
Occupancy and
equipment
|
|
2,067
|
|
1,821
|
|
5,836
|
|
5,332
|
|
Marketing and public
relations
|
|
374
|
|
378
|
|
1,144
|
|
1,147
|
|
FDIC
insurance
|
|
|
180
|
|
190
|
|
527
|
|
540
|
|
Provision for
mortgage loan repurchase losses
|
(250)
|
|
(250)
|
|
(750)
|
|
(750)
|
|
Legal
expense
|
|
|
80
|
|
97
|
|
185
|
|
347
|
|
Other real estate
expense, net
|
|
(96)
|
|
4
|
|
(37)
|
|
114
|
|
Mortgage subservicing
expense
|
|
462
|
|
418
|
|
1,353
|
|
1,236
|
|
Amortization of
mortgage servicing rights
|
586
|
|
515
|
|
1,659
|
|
1,460
|
|
Merger related
expenses
|
|
-
|
|
-
|
|
2,985
|
|
-
|
|
Other
|
|
|
|
2,006
|
|
2,004
|
|
5,759
|
|
6,084
|
|
|
Total noninterest
expense
|
|
13,890
|
|
12,381
|
|
41,967
|
|
36,963
|
Income before income
taxes
|
|
8,939
|
|
5,830
|
|
17,920
|
|
16,113
|
Income tax
expense
|
|
|
2,998
|
|
1,949
|
|
5,500
|
|
5,302
|
|
Net income
|
|
|
$
5,941
|
|
3,881
|
|
12,420
|
|
10,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
0.48
|
|
0.41
|
|
1.04
|
|
1.15
|
|
Diluted
|
|
|
$
0.47
|
|
0.40
|
|
1.02
|
|
1.13
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
12,327,921
|
|
9,463,722
|
|
11,995,477
|
|
9,421,042
|
|
Diluted
|
|
|
12,535,551
|
|
9,674,994
|
|
12,201,721
|
|
9,595,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAROLINA FINANCIAL
CORPORATION
|
(Unaudited)
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or for the
Three Months Ended
|
Selected Financial
Data:
|
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
December 31,
2015
|
|
September 30,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Average Balances:
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
|
$
1,626,717
|
|
1,482,963
|
|
1,412,778
|
|
1,364,772
|
|
1,322,382
|
Investment
securities
|
|
|
|
345,385
|
|
335,105
|
|
335,929
|
|
330,364
|
|
312,707
|
Loans receivable,
net
|
|
|
|
1,093,669
|
|
978,337
|
|
935,438
|
|
876,445
|
|
840,414
|
Loans held for
sale
|
|
|
|
32,196
|
|
24,467
|
|
25,454
|
|
31,212
|
|
43,193
|
Deposits
|
|
|
|
|
1,291,567
|
|
1,170,860
|
|
1,069,451
|
|
1,052,192
|
|
1,027,771
|
Stockholders'
equity
|
|
|
|
157,311
|
|
145,656
|
|
141,311
|
|
111,189
|
|
102,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Ratios (annualized):
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
stockholders' equity (1)
|
|
15.11%
|
|
7.79%
|
|
10.31%
|
|
12.98%
|
|
15.17%
|
Return on average
assets (1)
|
|
|
1.46%
|
|
0.76%
|
|
1.03%
|
|
1.06%
|
|
1.18%
|
Average earning
assets to average total assets
|
92.94%
|
|
93.44%
|
|
93.08%
|
|
92.23%
|
|
91.82%
|
Average loans
receivable to average deposits
|
|
84.68%
|
|
83.56%
|
|
87.47%
|
|
83.30%
|
|
81.77%
|
Average stockholders'
equity to average assets
|
9.67%
|
|
9.82%
|
|
10.00%
|
|
8.15%
|
|
7.75%
|
Net interest
margin-tax equivalent (2)
|
|
3.75%
|
|
3.64%
|
|
3.53%
|
|
3.59%
|
|
3.66%
|
Net charge-offs
(recovery) to average loans
|
|
|
|
|
|
|
|
|
|
|
|
receivable
|
|
|
|
(0.02)%
|
|
(0.03)%
|
|
(0.04)%
|
|
(0.11)%
|
|
0.06%
|
Nonperforming assets
to period end loans
|
|
|
|
|
|
|
|
|
|
|
receivable
|
|
|
|
0.62%
|
|
0.67%
|
|
0.59%
|
|
0.72%
|
|
0.89%
|
Nonperforming assets
to total assets
|
|
0.42%
|
|
0.45%
|
|
0.39%
|
|
0.47%
|
|
0.57%
|
Nonperforming loans
to total loans
|
|
|
0.37%
|
|
0.37%
|
|
0.48%
|
|
0.47%
|
|
0.57%
|
Allowance for loan
losses as a percentage of
|
|
|
|
|
|
|
|
|
|
|
|
gross loans
receivable (end of period) (3)
|
0.91%
|
|
0.96%
|
|
1.06%
|
|
1.10%
|
|
1.15%
|
Allowance for loan
losses as a percentage
|
|
|
|
|
|
|
|
|
|
|
|
of nonperforming
loans
|
|
|
247.72%
|
|
262.68%
|
|
223.38%
|
|
235.67%
|
|
201.98%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans 90 days or more
past due and still
|
|
|
|
|
|
|
|
|
|
|
|
accruing
|
|
|
|
$
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Nonaccrual
loans
|
|
|
|
4,174
|
|
3,920
|
|
4,581
|
|
4,303
|
|
4,896
|
|
Total nonperforming
loans
|
|
|
4,174
|
|
3,920
|
|
4,581
|
|
4,303
|
|
4,896
|
Real estate acquired
through foreclosure, net (4)
|
2,843
|
|
3,272
|
|
1,091
|
|
2,374
|
|
2,744
|
|
Total nonperforming
assets
|
|
|
$
7,017
|
|
7,192
|
|
5,672
|
|
6,677
|
|
7,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Included in
net income are pretax merger related expenses of approximately $2.8
million for the three months ended June 30, 2016 and $186,000 for
the three months ended March 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Net interest
margin-tax equivalent reflects tax-exempt income on a
tax-equivalent basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Acquired loans
represent 11.4%, 12.2%, 6.4%, 7.0%, and 8.0%, of gross loans
receivable at September 30, 2016, June 30, 2016, March 31, 2016,
December 31, 2015, and September 30, 2015,
respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Real estate
acquired through foreclosure, net at September 30, 2016 includes
$1.5 million related to the Congaree merger.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Nine
Months
|
|
Increase
(Decrease)
|
|
|
|
|
Ended September
30,
|
|
Ended September
30,
|
|
Three
|
|
Nine
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Months
|
|
Months
|
Segment net
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Community banking
(1)
|
$
4,734
|
|
2,854
|
|
10,309
|
|
8,144
|
|
1,880
|
|
2,165
|
Wholesale mortgage
banking
|
1,402
|
|
1,273
|
|
2,722
|
|
3,307
|
|
129
|
|
(585)
|
Other (2)
|
|
|
(228)
|
|
(256)
|
|
(669)
|
|
(660)
|
|
28
|
|
(9)
|
Eliminations
|
|
33
|
|
10
|
|
58
|
|
20
|
|
23
|
|
38
|
Total net
income
|
|
$
5,941
|
|
3,881
|
|
12,420
|
|
10,811
|
|
2,060
|
|
1,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
|
|
|
|
September
30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
December
31,
2015
|
|
September
30,
2015
|
|
|
Segment net
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Community banking
(1)
|
$
4,734
|
|
2,162
|
|
3,413
|
|
3,258
|
|
2,854
|
|
|
Wholesale mortgage
banking
|
1,402
|
|
919
|
|
401
|
|
525
|
|
1,273
|
|
|
Other (2)
|
|
|
(228)
|
|
(253)
|
|
(188)
|
|
(207)
|
|
(256)
|
|
|
Eliminations
|
|
33
|
|
8
|
|
17
|
|
33
|
|
10
|
|
|
Total net
income
|
|
$
5,941
|
|
2,836
|
|
3,643
|
|
3,609
|
|
3,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended September 30,
|
|
|
|
|
Loan
Originations
|
|
Mortgage Banking
Income
|
|
Margin
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Additional segment
information:
|
|
|
|
|
|
|
|
|
|
|
|
Community
banking
|
|
$
25,633
|
|
17,642
|
|
680
|
|
431
|
|
2.65%
|
|
2.44%
|
Wholesale mortgage
banking
|
253,485
|
|
261,948
|
|
4,925
|
|
4,322
|
|
1.94%
|
|
1.65%
|
Total mortgage
banking income
|
$
279,118
|
|
279,590
|
|
5,605
|
|
4,753
|
|
2.01%
|
|
1.70%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine
Months Ended September 30,
|
|
|
|
|
Loan
Originations
|
|
Mortgage Banking
Income
|
|
Margin
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Additional segment
information:
|
|
|
|
|
|
|
|
|
|
|
|
Community
banking
|
|
$
68,263
|
|
50,430
|
|
1,586
|
|
1,231
|
|
2.32%
|
|
2.44%
|
Wholesale mortgage
banking
|
645,412
|
|
769,679
|
|
11,381
|
|
12,643
|
|
1.76%
|
|
1.64%
|
Total mortgage
banking income
|
$
713,675
|
|
820,109
|
|
12,967
|
|
13,874
|
|
1.82%
|
|
1.69%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Included in
net income are pretax merger related expenses of approximately $2.7
million for the three months ending June 30, 2016 and $186,000 for
the three months ending March 31, 2016, for a total of $2.9
million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Included in
net income are pretax merger related expenses of approximately
$102,000 for the three months ending June 30, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Financial Measures
|
(Unaudited)
|
(In thousands, except
share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September
30,
|
|
At December
31,
|
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Core
deposits:
|
|
|
|
|
|
|
Noninterest-bearing
demand accounts
|
|
$
267,892
|
|
163,054
|
Interest-bearing
demand accounts
|
|
|
195,792
|
|
158,581
|
Savings
accounts
|
|
|
|
47,035
|
|
39,147
|
Money market
accounts
|
|
|
299,960
|
|
223,906
|
|
Total core deposits
(Non-GAAP)
|
810,679
|
|
584,688
|
|
|
|
|
|
|
|
|
|
Certificates of
deposit:
|
|
|
|
|
|
|
Less than
$250,000
|
|
|
|
476,744
|
|
428,067
|
$250,000 or
more
|
|
|
|
24,853
|
|
18,773
|
|
Total certificates of
deposit
|
|
|
501,597
|
|
446,840
|
Total
deposits
|
|
|
|
$
1,312,276
|
|
1,031,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September
30,
|
|
At December
31,
|
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Tangible book
value per share:
|
|
|
|
|
Total stockholders'
equity
|
|
|
$
160,331
|
|
139,859
|
Less intangible
assets
|
|
|
|
(8,037)
|
|
(2,961)
|
Tangible common
equity (Non-GAAP)
|
|
$
152,294
|
|
136,898
|
|
|
|
|
|
|
|
|
|
Issued and
outstanding shares
|
|
12,546,220
|
|
12,023,557
|
Less nonvested
restricted stock awards
|
|
(216,828)
|
|
(285,805)
|
Period end dilutive
shares
|
|
|
12,329,392
|
|
11,737,752
|
|
|
|
|
|
|
|
|
|
Total stockholders
equity
|
|
$
160,331
|
|
139,859
|
Divided by period end
dilutive shares
|
|
12,329,392
|
|
11,737,752
|
Common book value per
share
|
|
$
13.00
|
|
11.92
|
|
|
|
|
|
|
|
|
|
Tangible common
equity (Non-GAAP)
|
$
152,294
|
|
136,898
|
Divided by period end
dilutive shares
|
12,329,392
|
|
11,737,752
|
Tangible common book
value per share (Non-GAAP)
|
$
12.35
|
|
11.66
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Financial Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except
share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Nine
Months Ended
|
Operating
Earnings:
|
|
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
December 31,
2015
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Income before income
taxes
|
|
|
$
8,939
|
|
3,700
|
|
5,281
|
|
5,367
|
|
5,830
|
|
17,920
|
|
16,113
|
Gain on sale of
securities
|
|
|
(111)
|
|
(113)
|
|
(417)
|
|
(34)
|
|
(1,017)
|
|
(641)
|
|
(1,459)
|
Net loss on
extinguishment of debt
|
|
118
|
|
47
|
|
9
|
|
36
|
|
-
|
|
174
|
|
1,215
|
Fair value
adjustments on interest rate swaps
|
(99)
|
|
226
|
|
281
|
|
(142)
|
|
1,246
|
|
408
|
|
1,253
|
Merger related
costs
|
|
|
-
|
|
2,799
|
|
186
|
|
-
|
|
-
|
|
2,985
|
|
-
|
Operating earnings
before income taxes
|
|
8,847
|
|
6,659
|
|
5,340
|
|
5,227
|
|
6,059
|
|
20,846
|
|
17,122
|
Tax expense (1)
(2)
|
|
|
|
2,967
|
|
1,555
|
|
1,656
|
|
1,712
|
|
2,026
|
|
6,398
|
|
5,634
|
Operating earnings
(Non-GAAP)
|
|
$
5,880
|
|
5,104
|
|
3,684
|
|
3,515
|
|
4,033
|
|
14,448
|
|
11,488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
equity
|
|
|
|
157,311
|
|
145,656
|
|
141,311
|
|
111,189
|
|
102,326
|
|
148,134
|
|
98,805
|
Average
assets
|
|
|
|
1,626,717
|
|
1,482,963
|
|
1,412,778
|
|
1,364,772
|
|
1,322,382
|
|
1,500,819
|
|
1,283,183
|
Operating return on
average assets (Non-GAAP)
|
1.45%
|
|
1.38%
|
|
1.04%
|
|
1.03%
|
|
1.22%
|
|
1.28%
|
|
1.19%
|
Operating return on
average equity (Non-GAAP)
|
14.95%
|
|
14.02%
|
|
10.43%
|
|
12.64%
|
|
15.77%
|
|
13.00%
|
|
15.50%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
12,327,921
|
|
11,908,282
|
|
11,746,574
|
|
9,888,030
|
|
9,463,772
|
|
11,995,477
|
|
9,421,042
|
|
Diluted
|
|
|
|
12,535,551
|
|
12,076,878
|
|
11,978,801
|
|
10,103,966
|
|
9,674,994
|
|
12,201,721
|
|
9,595,991
|
Operating earnings
per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(Non-GAAP)
|
|
|
$
0.48
|
|
0.43
|
|
0.31
|
|
0.36
|
|
0.43
|
|
1.20
|
|
1.22
|
|
Diluted
(Non-GAAP)
|
|
|
$
0.47
|
|
0.42
|
|
0.31
|
|
0.35
|
|
0.42
|
|
1.18
|
|
1.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
$
8,939
|
|
3,700
|
|
5,281
|
|
5,367
|
|
5,830
|
|
17,920
|
|
16,113
|
Tax
expense
|
|
|
|
2,998
|
|
864
|
|
1,638
|
|
1,758
|
|
1,949
|
|
5,500
|
|
5,302
|
Net Income
|
|
|
|
$
5,941
|
|
2,836
|
|
3,643
|
|
3,609
|
|
3,881
|
|
12,420
|
|
10,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
equity
|
|
|
|
157,311
|
|
145,656
|
|
141,311
|
|
111,189
|
|
102,326
|
|
148,134
|
|
98,805
|
Average
assets
|
|
|
|
1,626,717
|
|
1,482,963
|
|
1,412,778
|
|
1,364,772
|
|
1,322,382
|
|
1,500,819
|
|
1,283,183
|
Return on average
assets
|
|
|
1.46%
|
|
0.76%
|
|
1.03%
|
|
1.06%
|
|
1.17%
|
|
1.10%
|
|
1.12%
|
Return on average
equity
|
|
|
15.11%
|
|
7.79%
|
|
10.31%
|
|
12.98%
|
|
15.17%
|
|
11.18%
|
|
14.59%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
12,327,921
|
|
11,908,282
|
|
11,746,574
|
|
9,888,030
|
|
9,463,772
|
|
11,995,477
|
|
9,421,042
|
|
Diluted
|
|
|
|
12,535,551
|
|
12,076,878
|
|
11,978,801
|
|
10,103,966
|
|
9,674,994
|
|
12,201,721
|
|
9,595,991
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
0.48
|
|
0.24
|
|
0.31
|
|
0.37
|
|
0.41
|
|
1.04
|
|
1.15
|
|
Diluted
|
|
|
|
$
0.47
|
|
0.23
|
|
0.30
|
|
0.36
|
|
0.40
|
|
1.02
|
|
1.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tax expense
is determined using the effective tax rate reflected in the
accompanying income statement for the applicable reporting
period.
|
(2) In March
2016, the FASB issued guidance to simplify several aspects of the
accounting for share-based payment award transactions, including
income tax consequences. In addition to other changes, the
guidance changes the accounting for excess tax benefits and tax
deficiencies from generally being recognized in additional paid-in
capital to recognition as income tax expense or benefit in the
period they occur. The Company early adopted the new guidance
in the second quarter of 2016. As a result, the Company's
income tax expense was reduced by approximately $399,000, or $0.03
per diluted share, in the second quarter of 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Financial Measures
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except
share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
|
|
|
|
September
30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
December
31,
2015
|
|
September
30,
2015
|
Segment net
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Community
banking
|
|
|
|
$
4,734
|
|
2,162
|
|
3,413
|
|
3,258
|
|
2,854
|
Wholesale mortgage
banking
|
|
|
1,402
|
|
919
|
|
401
|
|
525
|
|
1,273
|
Other
|
|
|
|
|
(228)
|
|
(253)
|
|
(188)
|
|
(207)
|
|
(256)
|
Eliminations
|
|
|
|
33
|
|
8
|
|
17
|
|
33
|
|
10
|
Total net
income
|
|
|
|
$
5,941
|
|
2,836
|
|
3,643
|
|
3,609
|
|
3,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Community
banking segment operating earnings:
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
$
6,975
|
|
2,785
|
|
4,953
|
|
4,842
|
|
4,199
|
Tax expense (1)
(3)
|
|
|
|
2,241
|
|
623
|
|
1,540
|
|
1,584
|
|
1,345
|
Bank segment net
income
|
|
|
$
4,734
|
|
2,162
|
|
3,413
|
|
3,258
|
|
2,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
12,327,921
|
|
11,908,282
|
|
11,746,574
|
|
9,888,030
|
|
9,463,772
|
|
Diluted
|
|
|
|
12,535,551
|
|
12,076,878
|
|
11,978,801
|
|
10,103,966
|
|
9,674,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
$
0.38
|
|
$
0.18
|
|
$
0.28
|
|
$
0.32
|
|
$
0.29
|
|
Diluted
|
|
|
|
$
0.38
|
|
$
0.18
|
|
$
0.28
|
|
$
0.32
|
|
$
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank segment income
before taxes
|
|
|
$
6,975
|
|
2,785
|
|
4,953
|
|
4,842
|
|
4,199
|
Gain on sale of
securities
|
|
|
(111)
|
|
(113)
|
|
(417)
|
|
(34)
|
|
(1,017)
|
Net loss on
extinguishment of debt
|
|
|
118
|
|
47
|
|
9
|
|
36
|
|
-
|
Fair value
adjustments on interest rate swaps
|
|
(99)
|
|
226
|
|
281
|
|
(142)
|
|
1,246
|
Merger related costs
(2)
|
|
|
-
|
|
2,697
|
|
186
|
|
-
|
|
-
|
Operating earnings
before income taxes
|
|
6,883
|
|
5,642
|
|
5,012
|
|
4,702
|
|
4,428
|
Tax expense (1)
(3)
|
|
|
|
2,211
|
|
1,262
|
|
1,558
|
|
1,538
|
|
1,418
|
Operating bank
segment earnings (Non-GAAP)
|
|
$
4,672
|
|
4,380
|
|
3,454
|
|
3,164
|
|
3,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating bank
segment earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
Basic
(Non-GAAP)
|
|
|
$
0.38
|
|
$
0.37
|
|
$
0.29
|
|
$
0.32
|
|
$
0.32
|
|
Diluted
(Non-GAAP)
|
|
|
$
0.37
|
|
$
0.36
|
|
$
0.29
|
|
$
0.31
|
|
$
0.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tax expense
is determined using the effective tax rate computed for the
applicable business segment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Remaining
merger related costs of $102,000 were incurred within the category
"Other" segment earnings for three months ended June 30,
2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) In March
2016, the FASB issued guidance to simplify several aspects of the
accounting for share-based payment award transactions, including
income tax consequences. In addition to other changes, the
guidance changes the accounting for excess tax benefits and tax
deficiencies from generally being recognized in additional paid-in
capital to recognition as income tax expense or benefit in the
period they occur. The Company early adopted the new guidance
in the second quarter of 2016. As a result, the Banking
segment income tax expense was reduced by approximately $343,000,
or $0.03 per diluted share, in the second quarter of
2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/carolina-financial-corporation-reports-results-for-third-quarter-of-2016-300347737.html
SOURCE Carolina Financial Corporation