Carolina Financial Corporation (NASDAQ:CARO) today announced
financial results for the second quarter of 2017.
Operational highlights for the three
months ended June 30, 2017 include:
- Carolina Financial Corporation (the “Company” or “Carolina
Financial”) announced the execution of an Agreement and Plan of
Merger and Reorganization, dated June 9, 2017, by and between the
Company and First South Bancorp, Inc. (“First South”), pursuant to
which, subject to the terms and conditions set forth therein, First
South will merge with and into the Company (the “Merger”), with the
Company as the surviving corporation in the Merger. The
Merger Agreement provides that immediately following the Merger,
First South’s wholly-owned bank subsidiary, First South Bank, a
North Carolina-chartered bank, will merge with and into the
Company’s wholly-owned bank subsidiary, CresCom Bank, a South
Carolina-chartered bank (the “Bank Merger”), with CresCom Bank as
the surviving entity in the Bank Merger.
- In April 2017, the Company completed the operational conversion
of its acquisition of Greer Bancshares Incorporated (“Greer”).
Financial highlights at and for the
three months ended June 30, 2017, include:
- Net income for the second quarter 2017 increased 229.3% to $9.3
million, or $0.58 per diluted share, from $2.8 million, or $0.23
per diluted share for the second quarter of 2016. Included in
earnings are pretax merger-related expenses of $0.3 million and
$2.8 million for the second quarter of 2017 and 2016,
respectively.
- Operating earnings for the second quarter of 2017, which
exclude certain non-operating income and expenses, increased 78.8%
to $9.1 million, or $0.56 per diluted share, from $5.1 million, or
$0.42 per diluted share, from the second quarter of 2016.
- Included in operating earnings for the second quarter of 2017
and 2016 are tax benefits of $1.2 million ($0.07 per diluted
share), and $0.4 million ($0.03 per diluted share), respectively,
related to excess stock-based compensation.
- Performance ratios Q2 2017 compared to Q2 2016:- Return on
average assets improved to 1.72% compared to 0.76%.- Operating
return on average assets improved to 1.69% compared to 1.38%.-
Return on average tangible equity was 16.02% compared to 7.96%.-
Operating return on average tangible equity improved to 15.65%
compared to 14.32%.
- Loans receivable, excluding Greer loans acquired in March 2017,
grew $62.5 million, or at an annualized rate of 10.6%, since
December 31, 2016.
- Nonperforming assets to total assets were 0.31% at June 30,
2017 compared to 0.40% at December 31, 2016.
- Total deposits, excluding Greer deposits acquired in March
2017, increased $94.4 million since December 31, 2016. Core
deposits, excluding Greer core deposits acquired, increased $67.4
million since December 31, 2016.
“We are very pleased to announce the signing of
a merger agreement with First South. We view this relationship as
strategic to our stated objective to be acquisitive, while
maximizing shareholder value. This transaction gives us
access to a number of high growth markets, including Raleigh and
Durham, North Carolina, and provides a strong core deposit
franchise. In addition, our overall operating results for the
second quarter of 2017 continued to improve with an increase in
operating earnings of 78.8% compared to the second quarter of
2016,” stated Jerry Rexroad, Chief Executive Officer.
Financial Results
Carolina Financial
Corporation
- The Company reported an increase in net income for the three
months ended June 30, 2017 of $9.3 million, or $0.58 per diluted
share, as compared to $2.8 million, or $0.23 per diluted share, for
the three months ended June 30, 2016. Included in net income for
the three months ended June 30, 2017 and 2016 were pretax merger
related expenses of $0.3 million and $2.8 million,
respectively. The Company reported increased net income for
the six months ended June 30, 2017 of $14.2 million, or $0.94 per
diluted share, as compared to $6.5 million, or $0.54 per diluted
share, for the six months ended June 30, 2016. Included in net
income for the six months ended June 30, 2017 and 2016 were pretax
merger related expenses of $1.6 million and $3.0 million,
respectively.
- Operating earnings for the second quarter of 2017, which
excludes certain non-operating income and expenses, increased 78.8%
to $9.1 million, or $0.56 per diluted share, from $5.1 million, or
$0.42 per diluted share, from the second quarter of 2016. Operating
earnings for the six months ended June 30, 2017, which excludes
certain non-operating income and expenses, increased 72.5% to $14.9
million, or $0.99 per diluted share, from $8.7 million, or $0.72
per diluted share, from the same period of 2016.
- The Company’s net interest margin-tax equivalent increased to
4.03% for the second quarter of 2017 compared to 3.64% for the
second quarter of 2016.
- The Company reported book value per common share of $17.55 and
$13.23 as of June 30, 2017 and December 31, 2016,
respectively. Tangible book value per common share was $14.74
and $12.59 as of June 30, 2017 and December 31, 2016,
respectively.
- At June 30, 2017, the Company’s regulatory capital ratios
exceeded the minimum levels currently required. Stockholders’
equity totaled $281.8 million as of June 30, 2017 compared to
$163.2 million at December 31, 2016. Tangible equity to tangible
assets at June 30, 2017 was 11.0% compared to 9.3% at December 31,
2016.
- Included in operating earnings for the second quarter of 2017
and 2016 are tax benefits of $1.2 million ($0.07 per diluted
share), and $0.4 million ($0.03 per diluted share), respectively,
related to excess stock-based compensation. Included in operating
earnings for six months ended June 30, 2017 and 2016 are tax
benefits of $1.4 million ($0.09 per diluted share), and $0.4
million ($0.03 per diluted share), respectively, related to excess
stock-based compensation.
Community Banking
- Community banking segment net income increased 290.5% to $8.4
million for the three months ended June 30, 2017 compared to $2.2
million for the three months ended June 30, 2016. Included in net
income for the three months ended June 30, 2017 and 2016 were
pretax merger related expenses of $0.3 million and $2.7 million,
respectively. The community banking segment net income
increased 132.3% to $13.0 million for the six months ended June 30,
2017 compared to $5.6 million for the six months ended June 30,
2016. Included in net income for the six months ended June 30, 2017
and 2016 were pretax merger related expenses of $1.6 million and
$2.9 million, respectively.
- Community banking segment operating earnings increased 88.2% to
$8.2 million for the three months ended June 30, 2017 compared to
$4.4 million for the three months ended June 30, 2016. Included in
earnings for the three months ended June 30, 2017 and 2016 were
pretax merger related expenses of $0.3 million and $2.7 million,
respectively. The community banking segment operating
earnings increased 73.4% to $13.6 million for the six months ended
June 30, 2017 compared to $7.8 million for the six months ended
June 30, 2016. Included in earnings for the six months ended June
30, 2017 and 2016 were pretax merger related expenses of $1.6
million and $2.9 million, respectively.
- No provision for loan loss was recorded during the three months
ended June 30, 2017 or 2016. This was primarily due to
continued excellent asset quality, as well as net recoveries to
average loans receivable of (0.01%) and (0.03%) for the three
months ended June 30, 2017 and 2016, respectively.
- Non-performing assets were 0.31% and 0.40% of total assets at
June 30, 2017 and December 31, 2016, respectively.
- Loans receivable, gross increased to $1.4 billion at June 30,
2017 compared to $1.2 billion at December 31, 2016.
- The number of checking accounts increased at an annualized rate
of 11.0%, excluding Greer checking accounts acquired, since
December 31, 2016. Total deposits, excluding acquired
deposits from the Greer acquisition, increased $94.4 million since
December 31, 2016. As of June 30, 2017 and December 31, 2016, core
deposits, defined as checking, savings and money market, comprised
approximately 64.9% and 60.6%, respectively, of total
deposits.
Wholesale Mortgage Banking
- Net income for the wholesale mortgage banking segment was $1.2
million for the three months ended June 30, 2017 compared to
$919,000 for the three months ended June 30, 2016. Net income was
$1.9 million for the six months ended June 30, 2017 compared to
$1.3 million for the six months ended June 30, 2016.
- Net margin was 1.69% for the three months ended June 30, 2017
compared to 1.74% for the three months ended June 30, 2016.
Originations for the three months ended June 30, 2017 and 2016 were
$219.8 million and $200.2 million, respectively. Net margin was
1.74% for the six months ended June 30, 2017 compared to 1.66% for
the six months ended June 30, 2016. Originations for the six months
ended June 30, 2017 and 2016 were $400.6 million and $387.0
million, respectively.
- Net interest income for the wholesale mortgage banking segment
was $0.4 million for the three months ended June 30, 2017 compared
to $0.3 million for the three months ended June 30, 2016. Net
interest income for the wholesale mortgage banking segment was $0.8
million for the six months ended June 30, 2017 compared to $0.7
million for the six months ended June 30, 2016.
- Mortgage loan servicing income, net of amortization of mortgage
servicing rights and subservicing expense, for the wholesale
mortgage banking segment was $0.4 million for the three months
ended June 30, 2017 and June 30, 2016, respectively. Mortgage
loan servicing income, net of amortization of mortgage servicing
rights and subservicing expense, for the wholesale mortgage banking
segment was $0.8 million for the six months ended June 30, 2017 and
June 30, 2016, respectively. At June 30, 2017, loans serviced
for third parties totaled $2.4 billion, compared to $2.3 billion at
December 31, 2016.
Conference Call
A conference call will be held at 11:00 a.m.,
Eastern Time on July 21, 2017. The conference call can be accessed
by dialing (866) 464-9448 or (213) 660-0874 and requesting the
Carolina Financial Corporation earnings call. The conference ID
number is 52128528. 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” approximately three hours after the call and can be
accessed by dialing (855) 859-2056 or (404) 537-3406 and requesting
conference number 52128528.
About Carolina Financial
Corporation
Carolina Financial Corporation (NASDAQ:CARO) is
the holding company of CresCom Bank, which also owns and
operates Atlanta-based Crescent Mortgage Company.
As of June 30, 2017, Carolina Financial
Corporation had approximately $2.2 billion in total
assets and Crescent Mortgage Company was licensed to
originate loans in 48 states partnering with community banks,
credit unions and mortgage brokers. On June 11, 2016,
Carolina Financial completed its acquisition of Congaree Bancshares
Inc. On January 5, 2017, the Company closed a public offering
of approximately 1.8 million shares of its common stock with net
proceeds of approximately $47.7 million, net of related expenses.
On March 18, 2017, Carolina Financial completed its acquisition of
Greer Bancshares Incorporated. On June 9, 2017,
Carolina Financial Corporation announced the execution of an
Agreement and Plan of Merger and Reorganization by and between the
Company and First South Bancorp, Inc. (“First South”), pursuant to
which, subject to the terms and conditions set forth therein, First
South will merge with and into the Company, with the Company as the
surviving corporation.
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, including but not limited to, 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 |
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017 |
|
December 31, 2016 |
|
|
|
|
(Unaudited) |
|
(Audited) |
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
ASSETS |
|
|
|
Cash and
due from banks |
|
$ |
14,965 |
|
|
9,761 |
|
|
Interest-bearing cash |
|
|
30,064 |
|
|
14,591 |
|
|
|
Cash and cash
equivalents |
|
|
45,029 |
|
|
24,352 |
|
|
Securities
available-for-sale |
|
|
500,310 |
|
|
335,352 |
|
|
Federal
Home Loan Bank stock, at cost |
|
|
10,545 |
|
|
11,072 |
|
|
Other
investments |
|
|
2,130 |
|
|
1,768 |
|
|
Derivative
assets |
|
|
2,583 |
|
|
2,219 |
|
|
Loans held
for sale |
|
|
36,232 |
|
|
31,569 |
|
|
Loans
receivable, gross |
|
|
1,435,420 |
|
|
1,178,266 |
|
|
Allowance
for loan losses |
|
|
(10,750 |
) |
|
(10,688 |
) |
|
|
Loans receivable,
net |
|
|
1,424,670 |
|
|
1,167,578 |
|
|
|
|
|
|
|
|
|
Premises
and equipment, net |
|
|
46,872 |
|
|
37,054 |
|
|
Accrued
interest receivable |
|
|
7,124 |
|
|
5,373 |
|
|
Real estate
acquired through foreclosure, net |
|
|
1,417 |
|
|
1,179 |
|
|
Deferred
tax assets, net |
|
|
8,057 |
|
|
8,341 |
|
|
Mortgage
servicing rights, net |
|
|
16,692 |
|
|
15,032 |
|
|
Cash value
life insurance |
|
|
38,057 |
|
|
28,984 |
|
|
Core
deposit intangible |
|
|
7,836 |
|
|
3,658 |
|
|
Goodwill |
|
|
37,287 |
|
|
4,266 |
|
|
Other
assets |
|
|
7,070 |
|
|
5,939 |
|
|
|
Total assets |
|
$ |
2,191,911 |
|
|
1,683,736 |
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY |
|
|
|
|
Liabilities: |
|
|
|
|
|
Noninterest-bearing deposits |
|
$ |
330,641 |
|
|
229,905 |
|
|
Interest-bearing deposits |
|
|
1,333,088 |
|
|
1,028,355 |
|
|
|
Total deposits |
|
|
1,663,729 |
|
|
1,258,260 |
|
|
Short-term
borrowed funds |
|
|
149,000 |
|
|
203,000 |
|
|
Long-term
debt |
|
|
75,327 |
|
|
38,465 |
|
|
Derivative
liabilities |
|
|
249 |
|
|
342 |
|
|
Drafts
outstanding |
|
|
3,869 |
|
|
6,223 |
|
|
Advances
from borrowers for insurance and taxes |
|
|
2,684 |
|
|
1,058 |
|
|
Accrued
interest payable |
|
|
755 |
|
|
327 |
|
|
Reserve for
mortgage repurchase losses |
|
|
2,354 |
|
|
2,880 |
|
|
Dividends
payable to stockholders |
|
|
646 |
|
|
502 |
|
|
Accrued
expenses and other liabilities |
|
|
11,480 |
|
|
9,489 |
|
|
|
Total liabilities |
|
|
1,910,093 |
|
|
1,520,546 |
|
Stockholders' equity: |
|
|
|
|
|
Preferred
stock |
|
|
- |
|
|
- |
|
|
Common
stock |
|
|
162 |
|
|
125 |
|
|
Additional
paid-in capital |
|
|
168,509 |
|
|
66,156 |
|
|
Retained
earnings |
|
|
110,166 |
|
|
98,451 |
|
|
Accumulated
other comprehensive income (loss), net of tax |
|
|
2,981 |
|
|
(1,542 |
) |
|
|
Total stockholders'
equity |
|
|
281,818 |
|
|
163,190 |
|
|
Total
liabilities and stockholders' equity |
|
$ |
2,191,911 |
|
|
1,683,736 |
|
|
CAROLINA FINANCIAL CORPORATION |
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months |
|
For the Six Months |
|
|
|
Ended June 30, |
|
Ended June 30, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except share data) |
|
Interest income |
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
18,280 |
|
|
|
11,880 |
|
|
|
33,247 |
|
|
|
22,965 |
|
|
Investment securities |
|
|
3,661 |
|
|
|
2,470 |
|
|
|
6,214 |
|
|
|
4,622 |
|
|
Dividends from Federal Home Loan Bank stock |
|
115 |
|
|
|
108 |
|
|
|
216 |
|
|
|
205 |
|
|
Federal
funds sold |
|
|
4 |
|
|
|
2 |
|
|
|
7 |
|
|
|
2 |
|
|
Other
interest income |
|
|
63 |
|
|
|
33 |
|
|
|
108 |
|
|
|
59 |
|
|
Total
interest income |
|
|
22,123 |
|
|
|
14,493 |
|
|
|
39,792 |
|
|
|
27,853 |
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
Deposits |
|
|
2,098 |
|
|
|
1,512 |
|
|
|
3,790 |
|
|
|
2,879 |
|
|
Short-term borrowed funds |
|
|
429 |
|
|
|
91 |
|
|
|
784 |
|
|
|
196 |
|
|
Long-term
debt |
|
|
498 |
|
|
|
570 |
|
|
|
850 |
|
|
|
1,185 |
|
|
Total
interest expense |
|
|
3,025 |
|
|
|
2,173 |
|
|
|
5,424 |
|
|
|
4,260 |
|
|
Net interest
income |
|
|
19,098 |
|
|
|
12,320 |
|
|
|
34,368 |
|
|
|
23,593 |
|
|
Provision for loan
losses |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Net interest income after provision for loan losses
|
|
19,098 |
|
|
|
12,320 |
|
|
|
34,368 |
|
|
|
23,593 |
|
|
Noninterest income |
|
|
|
|
|
|
|
|
|
Mortgage
banking income |
|
|
4,289 |
|
|
|
4,187 |
|
|
|
7,897 |
|
|
|
7,362 |
|
|
Deposit
service charges |
|
|
998 |
|
|
|
897 |
|
|
|
1,856 |
|
|
|
1,759 |
|
|
Net loss on extinguishment of debt |
|
- |
|
|
|
(47 |
) |
|
|
- |
|
|
|
(56 |
) |
|
Net gain
on sale of securities |
|
|
621 |
|
|
|
113 |
|
|
|
806 |
|
|
|
530 |
|
|
Fair value adjustments on interest rate swaps |
|
(69 |
) |
|
|
(226 |
) |
|
|
(127 |
) |
|
|
(507 |
) |
|
Net increase in cash value life insurance |
|
281 |
|
|
|
229 |
|
|
|
492 |
|
|
|
458 |
|
|
Mortgage
loan servicing income |
|
|
1,604 |
|
|
|
1,413 |
|
|
|
3,170 |
|
|
|
2,801 |
|
|
Other |
|
|
1,081 |
|
|
|
623 |
|
|
|
1,941 |
|
|
|
1,118 |
|
|
Total
noninterest income |
|
|
8,805 |
|
|
|
7,189 |
|
|
|
16,035 |
|
|
|
13,465 |
|
|
Noninterest
expense |
|
|
|
|
|
|
|
|
|
Salaries
and employee benefits |
|
|
9,255 |
|
|
|
7,675 |
|
|
|
17,864 |
|
|
|
14,825 |
|
|
Occupancy
and equipment |
|
|
2,439 |
|
|
|
1,927 |
|
|
|
4,621 |
|
|
|
3,769 |
|
|
Marketing
and public relations |
|
|
416 |
|
|
|
385 |
|
|
|
797 |
|
|
|
770 |
|
|
FDIC
insurance |
|
|
75 |
|
|
|
179 |
|
|
|
175 |
|
|
|
347 |
|
|
Provision for mortgage loan repurchase losses |
|
(225 |
) |
|
|
(250 |
) |
|
|
(450 |
) |
|
|
(500 |
) |
|
Legal
expense |
|
|
151 |
|
|
|
56 |
|
|
|
216 |
|
|
|
105 |
|
|
Other
real estate expense, net |
|
|
26 |
|
|
|
39 |
|
|
|
45 |
|
|
|
59 |
|
|
Mortgage
subservicing expense |
|
|
505 |
|
|
|
468 |
|
|
|
991 |
|
|
|
891 |
|
|
Amortization of mortgage servicing rights |
|
665 |
|
|
|
541 |
|
|
|
1,335 |
|
|
|
1,073 |
|
|
Merger
related expenses |
|
|
279 |
|
|
|
2,799 |
|
|
|
1,599 |
|
|
|
2,985 |
|
|
Other |
|
|
2,304 |
|
|
|
1,990 |
|
|
|
4,283 |
|
|
|
3,753 |
|
|
Total
noninterest expense |
|
|
15,890 |
|
|
|
15,809 |
|
|
|
31,476 |
|
|
|
28,077 |
|
|
Income before income
taxes |
|
|
12,013 |
|
|
|
3,700 |
|
|
|
18,927 |
|
|
|
8,981 |
|
|
Income tax expense |
|
|
2,673 |
|
|
|
864 |
|
|
|
4,684 |
|
|
|
2,502 |
|
|
Net
income |
|
$ |
9,340 |
|
|
|
2,836 |
|
|
|
14,243 |
|
|
|
6,479 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.58 |
|
|
$ |
0.24 |
|
|
$ |
0.95 |
|
|
$ |
0.55 |
|
|
Diluted |
|
$ |
0.58 |
|
|
$ |
0.23 |
|
|
$ |
0.94 |
|
|
$ |
0.54 |
|
|
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
16,029,332 |
|
|
|
11,908,282 |
|
|
|
14,980,349 |
|
|
|
11,827,428 |
|
|
Diluted |
|
|
16,180,171 |
|
|
|
12,076,878 |
|
|
|
15,144,796 |
|
|
|
12,001,862 |
|
|
|
|
|
|
|
|
|
|
|
|
CAROLINA FINANCIAL CORPORATION |
(Unaudited) |
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or for the Three Months Ended |
Selected Financial Data: |
|
June
30, 2017 |
|
March 31, 2017 |
|
December 31, 2016 |
|
September 30, 2016 |
|
June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Selected Average Balances: |
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
$ |
2,166,803 |
|
|
1,768,323 |
|
|
1,651,653 |
|
|
1,626,717 |
|
|
1,482,963 |
|
Investment
securities and FHLB stock |
|
|
510,706 |
|
|
373,551 |
|
|
326,485 |
|
|
345,385 |
|
|
335,105 |
|
Loans
receivable, net |
|
|
1,412,940 |
|
|
1,214,777 |
|
|
1,138,120 |
|
|
1,093,669 |
|
|
978,337 |
|
Loans held
for sale |
|
|
22,412 |
|
|
17,827 |
|
|
32,951 |
|
|
32,196 |
|
|
24,467 |
|
Deposits |
|
|
1,633,285 |
|
|
1,330,805 |
|
|
1,288,665 |
|
|
1,291,567 |
|
|
1,170,860 |
|
Stockholders' equity |
|
|
277,708 |
|
|
210,071 |
|
|
160,991 |
|
|
157,311 |
|
|
145,656 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios (annualized): |
|
|
|
|
|
|
|
|
|
|
Return on
average equity |
|
|
13.45 |
% |
|
9.34 |
% |
|
12.80 |
% |
|
15.11 |
% |
|
7.79 |
% |
Return on
average tangible equity (Non-GAAP) |
|
|
16.02 |
% |
|
9.98 |
% |
|
13.46 |
% |
|
15.93 |
% |
|
7.96 |
% |
Return on
average assets |
|
|
1.72 |
% |
|
1.11 |
% |
|
1.25 |
% |
|
1.46 |
% |
|
0.76 |
% |
Operating
return on average equity (Non-GAAP) |
|
|
13.15 |
% |
|
10.95 |
% |
|
14.32 |
% |
|
14.95 |
% |
|
14.02 |
% |
Operating
return on average tangible equity (Non-GAAP)
|
|
15.65 |
% |
|
11.70 |
% |
|
15.06 |
% |
|
15.76 |
% |
|
14.32 |
% |
Operating
return on average assets (Non-GAAP) |
|
|
1.69 |
% |
|
1.30 |
% |
|
1.40 |
% |
|
1.45 |
% |
|
1.38 |
% |
Average
earning assets to average total assets |
|
|
90.68 |
% |
|
91.99 |
% |
|
93.21 |
% |
|
92.94 |
% |
|
93.44 |
% |
Average
loans receivable to average deposits |
|
|
86.51 |
% |
|
91.28 |
% |
|
88.32 |
% |
|
84.68 |
% |
|
83.56 |
% |
Average
stockholders' equity to average assets |
|
|
12.82 |
% |
|
11.88 |
% |
|
9.75 |
% |
|
9.67 |
% |
|
9.82 |
% |
Net
interest margin-tax equivalent (1) |
|
|
4.03 |
% |
|
3.93 |
% |
|
3.87 |
% |
|
3.75 |
% |
|
3.64 |
% |
Net
charge-offs (recovery) to average loans receivable |
|
|
(0.01 |
)% |
|
(0.01 |
)% |
|
(0.12 |
)% |
|
(0.02 |
)% |
|
(0.03 |
)% |
Nonperforming assets to period end loans receivable |
|
|
0.48 |
% |
|
0.52 |
% |
|
0.58 |
% |
|
0.62 |
% |
|
0.67 |
% |
Nonperforming assets to total assets |
|
|
0.31 |
% |
|
0.34 |
% |
|
0.40 |
% |
|
0.42 |
% |
|
0.45 |
% |
Nonperforming loans to total loans |
|
|
0.38 |
% |
|
0.42 |
% |
|
0.48 |
% |
|
0.37 |
% |
|
0.37 |
% |
Allowance
for loan losses as a percentage of loans receivable (end of
period) |
|
|
0.75 |
% |
|
0.76 |
% |
|
0.91 |
% |
|
0.91 |
% |
|
0.96 |
% |
Allowance
for loan losses as a percentage of non-acquired loans
receivable (Non-GAAP) |
|
|
0.93 |
% |
|
0.96 |
% |
|
1.01 |
% |
|
1.03 |
% |
|
1.10 |
% |
Allowance
for loan losses as a percentage of nonperforming loans |
|
|
196.85 |
% |
|
180.66 |
% |
|
190.01 |
% |
|
247.72 |
% |
|
262.68 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming Assets: |
|
|
|
|
|
|
|
|
|
|
Loans 90
days or more past due and still accruing |
|
$ |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Nonaccrual
loans |
|
|
5,461 |
|
|
5,931 |
|
|
5,625 |
|
|
4,174 |
|
|
3,920 |
|
|
Total nonperforming
loans |
|
|
5,461 |
|
|
5,931 |
|
|
5,625 |
|
|
4,174 |
|
|
3,920 |
|
Real estate
acquired through foreclosure, net |
|
|
1,417 |
|
|
1,479 |
|
|
1,179 |
|
|
2,843 |
|
|
3,272 |
|
|
Total nonperforming
assets |
|
$ |
6,878 |
|
|
7,410 |
|
|
6,804 |
|
|
7,017 |
|
|
7,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net interest margin-tax equivalent reflects tax-exempt
income on a tax-equivalent basis. |
|
|
|
|
|
|
|
|
|
|
|
|
Carolina Financial Corporation |
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars
in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months |
|
For the Six Months |
|
Increase (Decrease) |
|
|
|
|
Ended June 30, |
|
Ended June 30, |
|
Three |
|
Six |
|
|
|
|
|
2017 |
|
|
2016 |
|
2017 |
|
2016 |
|
Months |
|
Months |
|
Segment net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Community
banking |
|
$ |
8,443 |
|
|
2,162 |
|
|
12,951 |
|
|
5,575 |
|
|
6,281 |
|
|
7,376 |
|
|
Wholesale
mortgage banking |
|
|
1,238 |
|
|
919 |
|
|
1,884 |
|
|
1,320 |
|
|
319 |
|
|
564 |
|
|
Other |
|
|
(346 |
) |
|
(253 |
) |
|
(591 |
) |
|
(441 |
) |
|
(93 |
) |
|
(150 |
) |
|
Eliminations |
|
|
5 |
|
|
8 |
|
|
(1 |
) |
|
25 |
|
|
(3 |
) |
|
(26 |
) |
|
Total net
income |
|
$ |
9,340 |
|
|
2,836 |
|
|
14,243 |
|
|
6,479 |
|
|
6,504 |
|
|
7,764 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
|
|
|
June 30,2017 |
|
March 31, 2017 |
|
December 31, 2016 |
|
September 30, 2016 |
|
June 30, 2016 |
|
|
|
Segment net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Community
banking |
|
$ |
8,443 |
|
|
4,509 |
|
|
4,565 |
|
|
4,734 |
|
|
2,162 |
|
|
|
|
Wholesale
mortgage banking |
|
|
1,238 |
|
|
645 |
|
|
806 |
|
|
1,402 |
|
|
919 |
|
|
|
|
Other |
|
|
(346 |
) |
|
(244 |
) |
|
(232 |
) |
|
(228 |
) |
|
(253 |
) |
|
|
|
Eliminations |
|
|
5 |
|
|
(6 |
) |
|
11 |
|
|
33 |
|
|
8 |
|
|
|
|
Total net
income |
|
$ |
9,340 |
|
|
4,904 |
|
|
5,150 |
|
|
5,941 |
|
|
2,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30,
2017 |
|
|
|
|
|
|
Community |
|
Mortgage |
|
|
|
|
|
|
|
|
|
|
|
|
Banking |
|
Banking |
|
Other |
|
Eliminations |
|
Total |
|
|
|
Interest
income |
|
$ |
21,691 |
|
|
427 |
|
|
8 |
|
|
(3 |
) |
|
22,123 |
|
|
|
|
Interest
expense |
|
|
2,747 |
|
|
42 |
|
|
278 |
|
|
(42 |
) |
|
3,025 |
|
|
|
|
Net
interest income (expense) |
|
|
18,944 |
|
|
385 |
|
|
(270 |
) |
|
39 |
|
|
19,098 |
|
|
|
|
Provision
for loan losses |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
Noninterest
income from external customers |
|
|
3,494 |
|
|
5,311 |
|
|
- |
|
|
- |
|
|
8,805 |
|
|
|
|
Intersegment noninterest income |
|
|
242 |
|
|
31 |
|
|
- |
|
|
(273 |
) |
|
- |
|
|
|
|
Noninterest
expense |
|
|
11,448 |
|
|
4,164 |
|
|
278 |
|
|
- |
|
|
15,890 |
|
|
|
|
Intersegment noninterest expense |
|
|
- |
|
|
240 |
|
|
2 |
|
|
(242 |
) |
|
- |
|
|
|
|
Income
(loss) before income taxes |
|
|
11,232 |
|
|
1,323 |
|
|
(550 |
) |
|
8 |
|
|
12,013 |
|
|
|
|
Income tax
expense (benefit) |
|
|
2,789 |
|
|
85 |
|
|
(204 |
) |
|
3 |
|
|
2,673 |
|
|
|
|
Net income
(loss) |
|
$ |
8,443 |
|
|
1,238 |
|
|
(346 |
) |
|
5 |
|
|
9,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30,
2016 |
|
|
|
|
|
|
Community |
|
Mortgage |
|
|
|
|
|
|
|
|
|
|
|
|
Banking |
|
Banking |
|
Other |
|
Eliminations |
|
Total |
|
|
|
Interest
income |
|
$ |
14,136 |
|
|
329 |
|
|
4 |
|
|
24 |
|
|
14,493 |
|
|
|
|
Interest
expense |
|
|
2,025 |
|
|
4 |
|
|
148 |
|
|
(4 |
) |
|
2,173 |
|
|
|
|
Net
interest income (expense) |
|
|
12,111 |
|
|
325 |
|
|
(144 |
) |
|
28 |
|
|
12,320 |
|
|
|
|
Provision
for loan losses |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
Noninterest
income from external customers |
|
|
2,078 |
|
|
5,111 |
|
|
- |
|
|
- |
|
|
7,189 |
|
|
|
|
Intersegment noninterest income |
|
|
242 |
|
|
15 |
|
|
- |
|
|
(257 |
) |
|
- |
|
|
|
|
Noninterest
expense |
|
|
11,646 |
|
|
3,891 |
|
|
272 |
|
|
- |
|
|
15,809 |
|
|
|
|
Intersegment noninterest expense |
|
|
- |
|
|
240 |
|
|
2 |
|
|
(242 |
) |
|
- |
|
|
|
|
Income
(loss) before income taxes |
|
|
2,785 |
|
|
1,320 |
|
|
(418 |
) |
|
13 |
|
|
3,700 |
|
|
|
|
Income tax
expense (benefit) |
|
|
623 |
|
|
401 |
|
|
(165 |
) |
|
5 |
|
|
864 |
|
|
|
|
Net income
(loss) |
|
$ |
2,162 |
|
|
919 |
|
|
(253 |
) |
|
8 |
|
|
2,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carolina Financial Corporation |
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Information, Continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars
in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30,
2017 |
|
|
|
|
|
|
Community |
|
Mortgage |
|
|
|
|
|
|
|
|
|
|
|
|
Banking |
|
Banking |
|
Other |
|
Eliminations |
|
Total |
|
|
|
Interest
income |
|
$ |
38,949 |
|
|
822 |
|
|
13 |
|
|
8 |
|
|
39,792 |
|
|
|
|
Interest
expense |
|
|
4,965 |
|
|
54 |
|
|
459 |
|
|
(54 |
) |
|
5,424 |
|
|
|
|
Net
interest income (expense) |
|
|
33,984 |
|
|
768 |
|
|
(446 |
) |
|
62 |
|
|
34,368 |
|
|
|
|
Provision
for loan losses |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
Noninterest
income from external customers |
|
|
5,912 |
|
|
10,123 |
|
|
- |
|
|
- |
|
|
16,035 |
|
|
|
|
Intersegment noninterest income |
|
|
483 |
|
|
64 |
|
|
- |
|
|
(547 |
) |
|
- |
|
|
|
|
Noninterest
expense |
|
|
22,772 |
|
|
8,216 |
|
|
488 |
|
|
- |
|
|
31,476 |
|
|
|
|
Intersegment noninterest expense |
|
|
- |
|
|
480 |
|
|
3 |
|
|
(483 |
) |
|
- |
|
|
|
|
Income
(loss) before income taxes |
|
|
17,607 |
|
|
2,259 |
|
|
(937 |
) |
|
(2 |
) |
|
18,927 |
|
|
|
|
Income tax
expense (benefit) |
|
|
4,656 |
|
|
375 |
|
|
(346 |
) |
|
(1 |
) |
|
4,684 |
|
|
|
|
Net income
(loss) |
|
$ |
12,951 |
|
|
1,884 |
|
|
(591 |
) |
|
(1 |
) |
|
14,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30,
2016 |
|
|
|
|
|
|
Community |
|
Mortgage |
|
|
|
|
|
|
|
|
|
|
|
|
Banking |
|
Banking |
|
Other |
|
Eliminations |
|
Total |
|
|
|
Interest
income |
|
$ |
27,080 |
|
|
698 |
|
|
9 |
|
|
66 |
|
|
27,853 |
|
|
|
|
Interest
expense |
|
|
3,964 |
|
|
9 |
|
|
296 |
|
|
(9 |
) |
|
4,260 |
|
|
|
|
Net
interest income (expense) |
|
|
23,116 |
|
|
689 |
|
|
(287 |
) |
|
75 |
|
|
23,593 |
|
|
|
|
Provision
for loan losses |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
Noninterest
income from external customers |
|
|
4,211 |
|
|
9,254 |
|
|
- |
|
|
- |
|
|
13,465 |
|
|
|
|
Intersegment noninterest income |
|
|
485 |
|
|
34 |
|
|
- |
|
|
(519 |
) |
|
- |
|
|
|
|
Noninterest
expense |
|
|
20,075 |
|
|
7,571 |
|
|
431 |
|
|
- |
|
|
28,077 |
|
|
|
|
Intersegment noninterest expense |
|
|
- |
|
|
481 |
|
|
4 |
|
|
(485 |
) |
|
- |
|
|
|
|
Income
(loss) before income taxes |
|
|
7,737 |
|
|
1,925 |
|
|
(722 |
) |
|
41 |
|
|
8,981 |
|
|
|
|
Income tax
expense (benefit) |
|
|
2,162 |
|
|
605 |
|
|
(281 |
) |
|
16 |
|
|
2,502 |
|
|
|
|
Net income
(loss) |
|
$ |
5,575 |
|
|
1,320 |
|
|
(441 |
) |
|
25 |
|
|
6,479 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June
30, |
|
|
|
|
Loan Originations |
|
Mortgage Banking Income |
|
Margin |
|
|
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
2016 |
|
2017 |
|
|
2016 |
|
Additional segment information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Community
banking |
|
$ |
24,416 |
|
|
24,629 |
|
|
582 |
|
|
509 |
|
|
2.38 |
% |
|
2.07 |
% |
|
Wholesale
mortgage banking |
|
|
219,793 |
|
|
200,161 |
|
|
3,707 |
|
|
3,678 |
|
|
1.69 |
% |
|
1.84 |
% |
|
Total
mortgage banking income |
|
$ |
244,209 |
|
|
224,790 |
|
|
4,289 |
|
|
4,187 |
|
|
1.76 |
% |
|
1.86 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June
30, |
|
|
|
|
Loan Originations |
|
Mortgage Banking Income |
|
Margin |
|
|
|
|
|
2017 |
|
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Additional segment information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Community
banking |
|
$ |
39,169 |
|
|
42,308 |
|
|
941 |
|
|
929 |
|
|
2.40 |
% |
|
2.20 |
% |
|
Wholesale
mortgage banking |
|
|
400,623 |
|
|
386,960 |
|
|
6,956 |
|
|
6,433 |
|
|
1.74 |
% |
|
1.66 |
% |
|
Total
mortgage banking income |
|
$ |
439,792 |
|
|
429,268 |
|
|
7,897 |
|
|
7,362 |
|
|
1.80 |
% |
|
1.72 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carolina Financial Corporation |
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Information, Continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars
in thousands, except per share information) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30,
2017 |
|
|
|
|
|
|
Community |
|
Mortgage |
|
|
|
|
|
|
|
|
|
|
|
|
Banking |
|
Banking |
|
Other |
|
Eliminations |
|
Total |
|
|
|
Additional segment information (Non-GAAP): |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit from excess stock-based compensation |
|
$ |
801 |
|
|
396 |
|
|
- |
|
|
- |
|
|
1,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit of excess stock-based compensation on diluted earnings per
share |
|
$ |
0.05 |
|
|
0.02 |
|
|
- |
|
|
- |
|
|
0.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30,
2016 |
|
|
|
|
|
|
Community |
|
Mortgage |
|
|
|
|
|
|
|
|
|
|
|
|
Banking |
|
Banking |
|
Other |
|
Eliminations |
|
Total |
|
|
|
Additional segment information (Non-GAAP): |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit from excess stock-based compensation |
|
$ |
343 |
|
|
56 |
|
|
- |
|
|
- |
|
|
399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit of excess stock-based compensation on diluted earnings
per share |
|
$ |
0.02 |
|
|
0.00 |
|
|
- |
|
|
- |
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30,
2017 |
|
|
|
|
|
|
Community |
|
Mortgage |
|
|
|
|
|
|
|
|
|
|
|
|
Banking |
|
Banking |
|
Other |
|
Eliminations |
|
Total |
|
|
|
Additional segment information (Non-GAAP): |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit from excess stock-based compensation |
|
$ |
1,018 |
|
|
427 |
|
|
- |
|
|
- |
|
|
1,445 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit of excess stock-based compensation on diluted earnings
per share |
|
$ |
0.06 |
|
|
0.03 |
|
|
- |
|
|
- |
|
|
0.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30,
2016 |
|
|
|
|
|
|
Community |
|
Mortgage |
|
|
|
|
|
|
|
|
|
|
|
|
Banking |
|
Banking |
|
Other |
|
Eliminations |
|
Total |
|
|
|
Additional segment information (Non-GAAP): |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit from excess stock-based compensation |
|
$ |
343 |
|
|
56 |
|
|
- |
|
|
- |
|
|
399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit of excess stock-based compensation on diluted earnings
per share |
|
$ |
0.02 |
|
|
0.00 |
|
|
- |
|
|
- |
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carolina Financial Corporation |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures -
Consolidated |
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
(In
thousands, except share data) |
|
|
|
|
|
At the Month Ended |
|
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
|
|
|
2017 |
|
|
2017 |
|
2016 |
|
2016 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Core deposits: |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand accounts |
|
$ |
330,641 |
|
|
298,365 |
|
|
229,905 |
|
|
267,892 |
|
|
246,811 |
|
Interest-bearing demand accounts |
|
|
298,123 |
|
|
309,961 |
|
|
191,851 |
|
|
195,792 |
|
|
166,843 |
|
Savings
accounts |
|
|
70,336 |
|
|
66,506 |
|
|
48,648 |
|
|
47,035 |
|
|
46,032 |
|
Money
market accounts |
|
|
380,108 |
|
|
363,600 |
|
|
292,639 |
|
|
299,960 |
|
|
296,968 |
|
|
Total core deposits
(Non-GAAP) |
|
|
1,079,208 |
|
|
1,038,432 |
|
|
763,043 |
|
|
810,679 |
|
|
756,654 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificates of deposit: |
|
|
|
|
|
|
|
|
|
|
Less than
$250,000 |
|
|
539,177 |
|
|
524,836 |
|
|
467,937 |
|
|
476,744 |
|
|
480,002 |
|
$250,000 or
more |
|
|
45,344 |
|
|
44,452 |
|
|
27,280 |
|
|
24,853 |
|
|
26,532 |
|
|
Total certificates of
deposit |
|
|
584,521 |
|
|
569,288 |
|
|
495,217 |
|
|
501,597 |
|
|
506,534 |
|
Total
deposits |
|
$ |
1,663,729 |
|
|
1,607,720 |
|
|
1,258,260 |
|
|
1,312,276 |
|
|
1,263,188 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At the Month Ended |
|
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
|
|
|
2017 |
|
|
2017 |
|
2016 |
|
2016 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value per
share: |
|
|
|
|
|
|
|
|
|
|
Total
stockholders' equity |
|
$ |
281,818 |
|
|
271,454 |
|
|
163,190 |
|
|
160,331 |
|
|
155,017 |
|
Less
intangible assets |
|
|
(45,123 |
) |
|
(45,292 |
) |
|
(7,924 |
) |
|
(8,037 |
) |
|
(8,150 |
) |
Tangible
common equity (Non-GAAP) |
|
$ |
236,695 |
|
|
226,162 |
|
|
155,266 |
|
|
152,294 |
|
|
146,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued and
outstanding shares |
|
|
16,156,943 |
|
|
16,185,408 |
|
|
12,548,328 |
|
|
12,546,220 |
|
|
12,545,282 |
|
Less
nonvested restricted stock awards |
|
|
(101,489 |
) |
|
(227,439 |
) |
|
(211,908 |
) |
|
(216,828 |
) |
|
(219,228 |
) |
Period end
dilutive shares |
|
|
16,055,454 |
|
|
15,957,969 |
|
|
12,336,420 |
|
|
12,329,392 |
|
|
12,326,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
stockholders equity |
|
$ |
281,818 |
|
|
271,454 |
|
|
163,190 |
|
|
160,331 |
|
|
155,017 |
|
Divided by
period end dilutive shares |
|
|
16,055,454 |
|
|
15,957,969 |
|
|
12,336,420 |
|
|
12,329,392 |
|
|
12,326,054 |
|
Common book
value per share |
|
$ |
17.55 |
|
|
17.01 |
|
|
13.23 |
|
|
13.00 |
|
|
12.58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
common equity (Non-GAAP) |
|
$ |
236,695 |
|
|
226,162 |
|
|
155,266 |
|
|
152,294 |
|
|
146,867 |
|
Divided by
period end dilutive shares |
|
|
16,055,454 |
|
|
15,957,969 |
|
|
12,336,420 |
|
|
12,329,392 |
|
|
12,326,054 |
|
Tangible
common book value per share (Non-GAAP) |
$ |
14.74 |
|
|
14.17 |
|
|
12.59 |
|
|
12.35 |
|
|
11.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At the Month Ended |
|
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
|
|
|
2017 |
|
|
2017 |
|
2016 |
|
2016 |
|
2016 |
Acquired and non-acquired loans: |
|
|
|
|
|
|
|
|
|
|
Acquired
loans receivable |
|
$ |
278,275 |
|
|
303,244 |
|
|
119,422 |
|
|
129,505 |
|
|
130,228 |
|
Non-acquired loans receivable |
|
|
1,157,145 |
|
|
1,113,766 |
|
|
1,058,844 |
|
|
1,003,724 |
|
|
937,028 |
|
Total loans
receivable |
|
$ |
1,435,420 |
|
|
1,417,010 |
|
|
1,178,266 |
|
|
1,133,229 |
|
|
1,067,256 |
|
%
Acquired |
|
|
19.39 |
% |
|
21.40 |
% |
|
10.14 |
% |
|
11.43 |
% |
|
12.20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Non-acquired loans |
|
$ |
1,157,145 |
|
|
1,113,766 |
|
|
1,058,844 |
|
|
1,003,724 |
|
|
937,028 |
|
Allowance
for loan losses |
|
|
10,750 |
|
|
10,715 |
|
|
10,688 |
|
|
10,340 |
|
|
10,297 |
|
Allowance
for loan losses to non-acquired loans (Non-GAAP) |
|
0.93 |
% |
|
0.96 |
% |
|
1.01 |
% |
|
1.03 |
% |
|
1.10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total loans
receivable |
|
$ |
1,435,420 |
|
|
1,417,010 |
|
|
1,178,266 |
|
|
1,133,229 |
|
|
1,067,256 |
|
Allowance
for loan losses |
|
|
10,750 |
|
|
10,715 |
|
|
10,688 |
|
|
10,340 |
|
|
10,297 |
|
Allowance
for loan losses to total loans receivable |
|
|
0.75 |
% |
|
0.76 |
% |
|
0.91 |
% |
|
0.91 |
% |
|
0.96 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Carolina Financial Corporation |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial
Measures -
Consolidated |
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
(In
thousands, except share data) |
|
|
|
|
|
For the Three Months Ended |
Operating Earnings and Performance Ratios: |
|
June 30,
2017 |
|
March 31, 2017 |
|
December 31, 2016 |
|
September 30, 2016 |
|
June 30, 2016 |
Income
before income taxes |
|
$ |
12,013 |
|
|
6,915 |
|
|
7,498 |
|
|
8,939 |
|
|
3,700 |
|
Gain on
sale of securities |
|
|
(621 |
) |
|
(185 |
) |
|
(65 |
) |
|
(111 |
) |
|
(113 |
) |
Net loss on
extinguishment of debt |
|
|
- |
|
|
- |
|
|
1,694 |
|
|
118 |
|
|
47 |
|
Fair value
adjustments on interest rate swaps |
|
|
69 |
|
|
58 |
|
|
(998 |
) |
|
(99 |
) |
|
226 |
|
Merger
related expenses |
|
|
279 |
|
|
1,319 |
|
|
260 |
|
|
- |
|
|
2,799 |
|
Operating
earnings before income taxes |
|
|
11,740 |
|
|
8,107 |
|
|
8,389 |
|
|
8,847 |
|
|
6,659 |
|
Tax expense
(1) |
|
|
2,612 |
|
|
2,358 |
|
|
2,627 |
|
|
2,967 |
|
|
1,555 |
|
Operating
earnings (Non-GAAP) |
|
$ |
9,128 |
|
|
5,749 |
|
|
5,762 |
|
|
5,880 |
|
|
5,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
equity |
|
$ |
277,708 |
|
|
210,071 |
|
|
160,991 |
|
|
157,311 |
|
|
145,656 |
|
Average
assets |
|
$ |
2,166,803 |
|
|
1,768,323 |
|
|
1,651,653 |
|
|
1,626,717 |
|
|
1,482,963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Equity |
|
$ |
277,708 |
|
|
210,071 |
|
|
160,991 |
|
|
157,311 |
|
|
145,656 |
|
Less
average intangible assets |
|
|
(44,452 |
) |
|
(13,510 |
) |
|
(7,979 |
) |
|
(8,092 |
) |
|
(3,076 |
) |
Average
tangible common equity (Non-GAAP) |
|
$ |
233,256 |
|
|
196,561 |
|
|
153,012 |
|
|
149,219 |
|
|
142,580 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
return on average assets (Non-GAAP) |
|
|
1.69 |
% |
|
1.30 |
% |
|
1.40 |
% |
|
1.45 |
% |
|
1.38 |
% |
Operating
return on average equity (Non-GAAP) |
|
|
13.15 |
% |
|
10.95 |
% |
|
14.32 |
% |
|
14.95 |
% |
|
14.02 |
% |
Operating
return on average tangible equity (Non-GAAP) |
|
15.65 |
% |
|
11.70 |
% |
|
15.06 |
% |
|
15.76 |
% |
|
14.32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
16,029,332 |
|
|
13,919,711 |
|
|
12,336,420 |
|
|
12,327,921 |
|
|
11,908,282 |
|
|
Diluted |
|
|
16,180,171 |
|
|
14,139,241 |
|
|
12,585,518 |
|
|
12,535,551 |
|
|
12,076,878 |
|
Operating
earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic (Non-GAAP) |
|
$ |
0.57 |
|
|
0.41 |
|
|
0.47 |
|
|
0.48 |
|
|
0.43 |
|
|
Diluted (Non-GAAP) |
|
$ |
0.56 |
|
|
0.41 |
|
|
0.46 |
|
|
0.47 |
|
|
0.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported: |
|
|
|
|
|
|
|
|
|
|
Income
before income taxes |
|
$ |
12,013 |
|
|
6,915 |
|
|
7,498 |
|
|
8,939 |
|
|
3,700 |
|
Tax
expense |
|
|
2,673 |
|
|
2,011 |
|
|
2,348 |
|
|
2,998 |
|
|
864 |
|
Net
Income |
|
$ |
9,340 |
|
|
4,904 |
|
|
5,150 |
|
|
5,941 |
|
|
2,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
equity |
|
$ |
277,708 |
|
|
210,071 |
|
|
160,991 |
|
|
157,311 |
|
|
145,656 |
|
Average
tangible equity (Non-GAAP) |
|
$ |
233,256 |
|
|
196,561 |
|
|
153,012 |
|
|
149,219 |
|
|
142,580 |
|
Average
assets |
|
$ |
2,166,803 |
|
|
1,768,323 |
|
|
1,651,653 |
|
|
1,626,717 |
|
|
1,482,963 |
|
Return on
average assets |
|
|
1.72 |
% |
|
1.11 |
% |
|
1.25 |
% |
|
1.46 |
% |
|
0.76 |
% |
Return on
average equity |
|
|
13.45 |
% |
|
9.34 |
% |
|
12.80 |
% |
|
15.11 |
% |
|
7.79 |
% |
Return on
average tangible equity (Non-GAAP) |
|
|
16.02 |
% |
|
9.98 |
% |
|
13.46 |
% |
|
15.93 |
% |
|
7.96 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
16,029,332 |
|
|
13,919,711 |
|
|
12,336,420 |
|
|
12,327,921 |
|
|
11,908,282 |
|
|
Diluted |
|
|
16,180,171 |
|
|
14,139,241 |
|
|
12,585,518 |
|
|
12,535,551 |
|
|
12,076,878 |
|
Earnings
per common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.58 |
|
|
0.35 |
|
|
0.42 |
|
|
0.48 |
|
|
0.24 |
|
|
Diluted |
|
$ |
0.58 |
|
|
0.35 |
|
|
0.41 |
|
|
0.47 |
|
|
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tax expense is determined using the effective tax
rate reflected in the accompanying income statement for the
applicable reporting period. |
|
Carolina Financial Corporation |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures - Community
Banking Segment |
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
(In
thousands, except share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
June 30,
2017 |
|
March 31, 2017 |
|
December 31, 2016 |
|
September 30, 2016 |
|
June 30, 2016 |
Segment net income: |
|
|
|
|
|
|
|
|
|
|
Community
banking |
|
$ |
8,443 |
|
|
$ |
4,509 |
|
|
|
4,565 |
|
|
|
4,734 |
|
|
|
2,162 |
|
Wholesale
mortgage banking |
|
|
1,238 |
|
|
|
645 |
|
|
|
806 |
|
|
|
1,402 |
|
|
|
919 |
|
Other |
|
|
(346 |
) |
|
|
(244 |
) |
|
|
(232 |
) |
|
|
(228 |
) |
|
|
(253 |
) |
Eliminations |
|
|
5 |
|
|
|
(6 |
) |
|
|
11 |
|
|
|
33 |
|
|
|
8 |
|
Total net
income |
|
$ |
9,340 |
|
|
$ |
4,904 |
|
|
|
5,150 |
|
|
|
5,941 |
|
|
|
2,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Community banking segment operating earnings: |
|
|
|
|
|
|
|
|
|
|
Income
before income taxes |
|
$ |
11,232 |
|
|
$ |
6,375 |
|
|
|
6,545 |
|
|
|
6,975 |
|
|
|
2,785 |
|
Tax expense
(1) |
|
|
2,789 |
|
|
|
1,866 |
|
|
|
1,980 |
|
|
|
2,241 |
|
|
|
623 |
|
Bank
segment net income |
|
$ |
8,443 |
|
|
$ |
4,509 |
|
|
|
4,565 |
|
|
|
4,734 |
|
|
|
2,162 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
16,029,332 |
|
|
|
13,919,711 |
|
|
|
12,336,420 |
|
|
|
12,327,921 |
|
|
|
11,908,282 |
|
|
Diluted |
|
|
16,180,171 |
|
|
|
14,139,241 |
|
|
|
12,585,518 |
|
|
|
12,535,551 |
|
|
|
12,076,878 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.53 |
|
|
$ |
0.32 |
|
|
$ |
0.37 |
|
|
$ |
0.38 |
|
|
$ |
0.18 |
|
|
Diluted |
|
$ |
0.52 |
|
|
$ |
0.32 |
|
|
$ |
0.36 |
|
|
$ |
0.38 |
|
|
$ |
0.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank
segment income before taxes |
|
$ |
11,232 |
|
|
$ |
6,375 |
|
|
|
6,545 |
|
|
|
6,975 |
|
|
|
2,785 |
|
Gain on
sale of securities |
|
|
(621 |
) |
|
|
(185 |
) |
|
|
(65 |
) |
|
|
(111 |
) |
|
|
(113 |
) |
Net loss on
extinguishment of debt |
|
|
- |
|
|
|
- |
|
|
|
1,693 |
|
|
|
118 |
|
|
|
47 |
|
Fair value
adjustments on interest rate swaps |
|
|
69 |
|
|
|
58 |
|
|
|
(998 |
) |
|
|
(99 |
) |
|
|
226 |
|
Merger
related expenses (2) |
|
|
279 |
|
|
|
1,311 |
|
|
|
254 |
|
|
|
- |
|
|
|
2,697 |
|
Operating
earnings before income taxes |
|
|
10,959 |
|
|
|
7,559 |
|
|
|
7,429 |
|
|
|
6,883 |
|
|
|
5,642 |
|
Tax expense
(1) |
|
|
2,721 |
|
|
|
2,213 |
|
|
|
2,247 |
|
|
|
2,211 |
|
|
|
1,262 |
|
Operating
bank segment earnings (Non-GAAP) |
|
$ |
8,238 |
|
|
$ |
5,346 |
|
|
|
5,182 |
|
|
|
4,672 |
|
|
|
4,380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
bank segment earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic (Non-GAAP) |
|
$ |
0.51 |
|
|
$ |
0.38 |
|
|
$ |
0.42 |
|
|
$ |
0.38 |
|
|
$ |
0.37 |
|
|
Diluted (Non-GAAP) |
|
$ |
0.51 |
|
|
$ |
0.38 |
|
|
$ |
0.41 |
|
|
$ |
0.37 |
|
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tax expense is determined using the effective tax
rate computed for the applicable business segment. |
(2) Remaining merger related costs were incurred within
the category "Other" segment earnings. |
For More Information, Contact:
William A. Gehman III, EVP and CFO, 843.723.7700
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