Carolina Trust BancShares, Inc. (the “Company”) (NASDAQ
- CART) reports its financial results today for
the most recently completed quarter. For the quarter
ended September 30, 2019 (“3Q19”), the Company’s net income was
$1,427,000 or $0.15 per diluted share as compared to $915,000 or
$0.13 per diluted share for the quarter ended September 30, 2018
(“3Q18”), an increase of $512,000 or $0.02 per diluted share.
The diluted average common shares outstanding increased to 9.4
million shares in 3Q19 from 7.2 million shares in 3Q18, due to the
issuance of shares in connection with the acquisition of Clover
Community Bankshares, Inc., (“Clover”) and its subsidiary bank,
Clover Community Bank, on January 1, 2019.
The Company recognized expenses in each period that were related
to its acquisition of Clover. The Company also recognized
3Q19 expenses that were related to its pending merger with Carolina
Financial Corporation (“CARO”) and the pending merger of Carolina
Trust Bank with CresCom Bank, CARO’s subsidiary bank. These
items, net of tax, reduced income by $582,000 in 3Q19, primarily
due to the pending merger with CARO, and by $147,000 in 3Q18, due
to the Clover acquisition. A special shareholder meeting is
scheduled on December 18, 2019 to vote on the merger with CARO.
Definitive proxy materials were mailed to the Company’s
shareholders commencing on October 28, 2019.
Adjusted net income, which excludes these merger-related items
and is a non-GAAP (Generally Accepted Accounting Principles)
measure, was $2,009,000 in 3Q19 and $1,062,000 in 3Q18. On a
diluted per share basis, adjusted net income per share was $0.21 in
3Q19 and $0.15 in 3Q18. See the non-GAAP reconciliation table
that accompanies this release for additional information.
For the linked quarter ended June 30, 2019, net income was
$1,818,000 or $0.19 per diluted share and adjusted net income was
$1,861,000 or $0.20 per diluted share.
The table below summarizes the key components of net income for
3Q19 and 3Q18.
|
$ in thousands |
For the three months ended |
|
|
|
|
September 30, 2019 |
September 30, 2018 |
Increase (Decrease) |
% Change |
|
Interest income |
$ |
7,372 |
|
$ |
5,419 |
|
$ |
1,953 |
|
36 |
% |
|
Interest expense |
|
1,614 |
|
|
1,176 |
|
|
438 |
|
37 |
% |
|
Net interest income |
|
5,758 |
|
|
4,243 |
|
|
1,515 |
|
36 |
% |
|
Provision for (recovery of) loan loss |
|
(37 |
) |
|
75 |
|
|
(112 |
) |
NM |
|
|
Noninterest income |
|
534 |
|
|
374 |
|
|
160 |
|
43 |
% |
|
Noninterest expense, excluding merger expenses |
|
3,821 |
|
|
3,170 |
|
|
651 |
|
21 |
% |
|
Merger expenses |
|
585 |
|
|
157 |
|
|
428 |
|
273 |
% |
|
Pre-tax income |
|
1,923 |
|
|
1,215 |
|
|
708 |
|
58 |
% |
|
Income tax expense |
|
496 |
|
|
300 |
|
|
196 |
|
65 |
% |
|
Net income |
$ |
1,427 |
|
$ |
915 |
|
$ |
512 |
|
56 |
% |
|
|
|
|
|
|
|
Non-GAAP measurements: |
|
|
|
|
|
Net income |
$ |
1,427 |
|
$ |
915 |
|
|
|
|
Adjustments: |
|
|
|
|
|
+ Merger expenses |
|
585 |
|
|
157 |
|
|
|
|
- Accretion of purchased loan discounts |
|
(78 |
) |
|
(2 |
) |
|
|
|
- Accretion of purchased time deposit discounts |
|
8 |
|
|
- |
|
|
|
|
+ Amortization of core deposit intangible |
|
138 |
|
|
9 |
|
|
|
|
- Net tax effect of adjustments |
|
(71 |
) |
|
(17 |
) |
|
|
|
= Adjusted net income |
$ |
2,009 |
|
$ |
1,062 |
|
$ |
947 |
|
89 |
% |
|
|
|
|
|
|
|
Return on assets |
|
0.92 |
% |
|
0.78 |
% |
|
0.14 |
% |
|
|
Return on equity |
|
7.98 |
% |
|
7.42 |
% |
|
0.56 |
% |
|
|
Net interest margin |
|
3.97 |
% |
|
3.82 |
% |
|
0.15 |
% |
|
|
Efficiency ratio 1 |
|
70 |
% |
|
72 |
% |
|
(2 |
%) |
|
|
Adjusted return on assets 2 |
|
1.29 |
% |
|
0.90 |
% |
|
0.39 |
% |
|
|
Adjusted return on equity 2 |
|
11.23 |
% |
|
8.61 |
% |
|
2.62 |
% |
|
|
Adjusted net interest margin 2 |
|
3.92 |
% |
|
3.81 |
% |
|
0.11 |
% |
|
|
Adjusted efficiency ratio 2 |
|
59 |
% |
|
68 |
% |
|
(9 |
%) |
|
|
Average assets |
$ |
617,914 |
|
$ |
467,308 |
|
$ |
150,606 |
|
32 |
% |
|
Average loans |
|
479,673 |
|
|
375,512 |
|
|
104,161 |
|
28 |
% |
|
Average deposits |
|
514,499 |
|
|
388,932 |
|
|
125,567 |
|
32 |
% |
|
Average equity 3 |
|
70,980 |
|
|
48,927 |
|
|
22,053 |
|
45 |
% |
|
Book value per share as of the end of the period |
$ |
7.68 |
|
$ |
6.84 |
|
|
|
|
Tangible book value per share as of the end of the period |
$ |
6.80 |
|
$ |
6.83 |
|
|
|
1 Efficiency ratio = Noninterest expense / (Net interest income
+ Noninterest income)2 Adjusted returns on assets and equity,
adjusted net interest margin and adjusted efficiency ratios are
non-GAAP measures. A reconciliation to GAAP is included at
the end of this release.3 The common stock offering completed in
April 2018 added $18.4 million to common equity. The
acquisition of Clover in January 2019 added $16.1 million to common
equity
As shown in the table, expenses related to mergers and
acquisitions in 3Q19 included $138,000 in amortization of core
deposit intangibles (“CDI”), $585,000 in merger-related expenses,
and $8,000 in expense from accretion of discounts on acquired
deposits. These expenses were partially offset by $78,000 in
income from accretion of discounts recorded on acquired
loans. The tax benefit was $71,000 for an overall $582,000
decrease in 3Q19 net income related to acquisitions. In 3Q18,
the CDI amortization, merger related expenses, income from
accretion on loans and tax benefit were $9,000, $157,000, $2,000
and $17,000, respectively, which resulted in an overall decrease in
net income of $147,000.
Comparing 3Q19 with 3Q18, the $708,000 (+58%) increase in
pre-tax income was due to the $1,515,000 (+36%) increase in net
interest income, as interest income grew by $1,953,000 (+36%) while
interest expenses grew by $438,000 (+37%). Noninterest income
increased $160,000 (+43%) and noninterest expenses excluding
merger-related expenses increased by $651,000 (+21%). Income
taxes increased by $196,000 (+65%), slightly higher than the
increase in pre-tax income, due to the higher amount of
non-deductible merger-related expenses incurred in 3Q19 as compared
to 3Q18.
Tangible book value per share (a non-GAAP measure) at September
30, 2019 was $6.80, a $0.03 decrease from $6.83 at September 30,
2018. The decrease was due to dilution from merger
consideration paid to Clover shareholders for the net assets
acquired during the first quarter of 2019. Tangible book
value per share increased over the past quarter by $0.17 from $6.63
at June 30, 2019 with the increase attributable to earnings and a
slight increase in other comprehensive income, an equity component
that reflects a higher valuation of the securities portfolio.
See the non-GAAP reconciliation table that accompanies this release
for additional information.
Net interest income increased from $4,243,000 in 3Q18 to
$5,758,000 in 3Q19, primarily due to the loan and deposit growth
from the acquisition of Clover and, secondarily, to organic loan
growth from existing operations of Carolina Trust Bank (the
“Bank”). Average loans increased by $104 million, or 28%,
from 3Q18 to 3Q19 and included $64 million in loans acquired from
Clover. The remaining $40 million in year-over-year average
loan growth was concentrated in the Mooresville, Gastonia, and
Hickory offices and in the Salisbury loan production office, which
combined for $42 million of the growth. The offices with the
highest average loans in 3Q19 were Mooresville ($89 million) and
Gastonia ($89 million), Hickory ($74 million), and Lincolnton Main
($69 million).
The net interest margin increased by 15 basis points from 3.82%
in 3Q18 to 3.97% in 3Q19. The yield on earning assets
increased by 22 basis points from 4.87% in 3Q18 to 5.09% in
3Q19. Comparatively, the cost of funds, including deposits,
borrowings and holding company debt, increased by only 7 basis
points from 1.11% in 3Q18 to 1.18% in 3Q19. The improvement
in the yield on earning assets and the net interest margin was
softened slightly by the shift in the earning asset mix, as the
ratio of average loans to average earning assets declined from 85%
in 3Q18 to 83% in 3Q19. The additional liquidity maintained
in interest earning cash and securities resulted in those
categories increasing from 15% to 17% as a percentage of earning
assets for the same periods.
The margin and asset yield increases were attributed both to
loan and investment yields which increased by 25 basis points and
23 basis points, respectively. The 3Q19 average yield on
loans and investments was 5.57% and 2.81%, respectively.
Although loan yields were impacted by prime rate increases of 25
basis points in each of September and December 2018, the benefit
was partially offset in 3Q19 due to prime rate decreases of 25
basis points in each of August and September 2019. The loan
yields also benefited from accretion of the discounts on purchased
loans, while the cost of funds was increased by the accretion of
the discounts on acquired time deposits. The net impact of loan and
deposit accretion added 5 basis points to the net interest
margin.
In a linked-quarter comparison, the net interest margin
decreased by 13 basis points from 4.10% in 2Q19 to 3.97% in
3Q19. The earning asset yield declined by 10 basis points
while the cost of funds increased by 4 basis points from 1.14% in
2Q19 to 1.18% in 3Q19. The cost of time deposits increased by
6 basis points on average from the linked quarter, as maturing time
deposits at lower rates were replaced at slightly higher
costs. Savings and money market yields increased by 4 basis
points from the linked quarter as the market remained competitive
and lagged the decrease to the fed funds rate.
Noninterest income increased by $160,000 from $374,000 in 3Q18
to $534,000 in 3Q19. The increase was due mostly to increases
in mortgage fee income of $135,000 or 307%, in overdraft fees on
deposits of $61,000 or 47%, and in interchange fee income of
$57,000 or 85%. The growth in mortgage fee income resulted
from both mortgage originations by experienced mortgage specialists
in our new South Carolina markets and from a renewed emphasis on
meeting the demand for mortgages in the Bank’s legacy
markets. The interchange fees increased as a result of growth
in the Bank’s checking account customer base for which the average
total balance grew by 59% from 3Q18 to 3Q19, primarily due to the
acquisition of Clover, and as a result of an overall increase in
debit card usage. Similarly, the increase in overdraft fees
was attributed primarily to the growth in checking accounts from
the Clover acquisition. The Company incurred a $100,000
unrealized loss in equity securities in 3Q19 that was due to a
decrease in market value of the investment security holdings that
trade in public markets. In 3Q18, the Bank recognized an
unrealized gain of $35,000 on its security holdings as the market
value increased.
Noninterest expense increased by $1,079,000 (+32%), from
$3,327,000 in 3Q18 to $4,406,000 in 3Q19. Salaries and
benefits grew by $463,000 or 26%. Merger expenses increased
by $428,000 or 273% due to higher investment banking and legal fees
in 3Q19 that were associated with the pending merger with CARO.
Amortization of core deposit intangibles increased by
$129,000 due to the core deposit intangible recognized on January
1, 2019 from the valuation of Clover’s non-maturing deposits.
Foreclosed asset expenses decreased by $112,000 or 88% as compared
to 3Q18 as losses and write-downs on foreclosed real estate
decreased by $76,000 and general maintenance on properties
decreased by $41,000. The expenses are lower in part because
the foreclosed real estate book balance has decreased to $1.0
million at September 30, 2019 from $1.8 million at September 30,
2018.
The balance sheets reflect minor changes in balances during the
3Q19. Loans decreased by $2.3 million (-0.5%), while deposits
were unchanged from June 30, 2019 to September 30, 2019.
Shareholders’ equity grew by $1.5 million (+2.2%), primarily from
$1.4 million in earnings during the quarter.
Over the past twelve months, loans grew by $102 million
including $64 million acquired from Clover on January 1, 2019 and
$38 million from the Bank’s other customer relationships.
Deposits grew by $130 million, including $112 million acquired from
Clover, and $18 million from other customer relationships.
Asset quality measurements remained strong during 3Q19.
The ratio of non-performing assets to total assets was 0.34% at
September 30, 2019 as compared to 0.43% on June 30, 2019 and as
compared to 0.61% on September 30, 2018. Nonperforming loans
to total loans decreased by 4 basis points during the quarter to
0.22% at September 30, 2019 and decreased by 6 basis points from a
year ago.
Net charge offs (recoveries) to average loans on an annualized
basis were 0.11%, 0.00%, and (0.01%), respectively, for the
quarters ended September 30, 2019, June 30, 2019, and September 30,
2018.
Regulatory capital ratios for the Company’s wholly owned
subsidiary, Carolina Trust Bank, increased from June 30, 2019 to
September 30, 2019. Risk-based capital grew by $2 million
during 3Q19, and risk-weighted assets were unchanged. The
Bank’s total risk-based capital ratio at September 30, 2019 was
13.86%, an increase of 39 basis point from 13.47% at June 30,
2019. Additional detail regarding the Bank’s regulatory
capital ratios are included in the financial tables that accompany
this release.
About Carolina Trust BancShares, Inc. Carolina
Trust BancShares, Inc. is a bank holding company and the parent
company of Carolina Trust Bank. Carolina Trust Bank is a
full-service, state-chartered bank headquartered in Lincolnton,
N.C. The bank operates in eleven full-service offices and one
loan production office in the Piedmont and Mountain Regions of the
Carolinas to the north and west of Charlotte, NC.
Caution Regarding Forward-Looking Statements: This news release
contains forward-looking statements. Words such as “anticipates,” “
believes,” “estimates,” “expects,” “intends,” “should,” “will,”
variations of such words and similar expressions are intended to
identify forward-looking statements. These statements reflect
management’s current beliefs as to the expected outcomes of future
events and are not guarantees of future performance. These
statements involve certain risks, uncertainties and assumptions
that are difficult to predict with regard to timing, extent,
likelihood and degree of occurrence. Therefore, actual results and
outcomes may materially differ from what may be expressed or
forecasted in such forward-looking statements. Factors that could
cause a difference in actual results and outcomes include, among
others: changes in the national and local economies or market
conditions; changes in interest rates, deposit flows, loan demand
and asset quality, including real estate and other collateral
values; changes in banking regulations and accounting principles,
policies or guidelines; the impact of competition from traditional
or new sources; failure to meet the closing conditions contained in
the Agreement and Plan of Merger and Reorganization, dated as of
July 15, 2019, by and between Carolina Financial Corporation
(“CARO”) and the Company (the “CARO Merger”), including approval by
the Company’s shareholders on the expected terms and time schedule,
delay in closing the CARO Merger, difficulties and delays in
integrating CARO’s and the Company’s businesses or fully realizing
cost savings and other benefits, business disruption as a result of
the CARO Merger, customer acceptance of CARO products and services,
and potential difficulties encountered in expanding into a new
market following the CARO Merger. These and other factors that may
emerge could cause decisions and actual results to differ
materially from current expectations. The Company undertakes no
obligation to revise, update, or clarify forward-looking statements
to reflect events or conditions after the date of this release.
Note Regarding Use of Non-GAAP Financial Measures: This
news release presents certain non-GAAP financial measures
including, without limitation, adjusted net income, adjusted net
income per share, and tangible book value per share. Non-GAAP
financial measures include numerical measures of a company’s
historical financial performance, financial position, or cash flows
that exclude (or include) amounts, or that are subject to
adjustments that have the effect of excluding (or including)
amounts, that are included (or, as applicable, excluded) in the
most directly comparable measures calculated and presented in
accordance with GAAP. The Company has presented the
adjustments to reconcile from the applicable GAAP financial
measures to the non-GAAP financial measures where applicable.
The Company considers these adjustments to the GAAP financial
measures to be relevant to ongoing operating results. The
Company believes that excluding the amounts associated with these
adjustments to present the non-GAAP financial measures provides a
meaningful base for the period-to-period comparisons, which will
assist investors and analysts in analyzing the operating results or
financial position of the Company. The non-GAAP financial
measures are used by management to assess the performance of the
Company’s business, including for presentations of Company
performance to investors. The Company further believes that
presenting the non-GAAP financial measures will permit investors
and analysts to assess the performance of the Company on the same
basis as that applied by management. Non-GAAP financial
measures have inherent limitations, are not required to be
uniformly applied, and are not audited. Although non-GAAP
financial measures are frequently used by investors to evaluate a
company, they have limitations as an analytical tool and should not
be considered in isolation or as a substitute for analysis of
results reported under GAAP. Reconciliations of non-GAAP
financial measures to the most directly comparable GAAP measures
are included in the tables that accompany this release.
|
Carolina Trust BancShares,
Inc. |
|
Selected Financial HighlightsDollars in
thousands |
|
|
Unaudited |
Unaudited |
Unaudited |
(a) |
Unaudited |
|
|
9/30/19 |
6/30/19 |
3/31/19 |
12/31/18 |
9/30/18 |
| Balance Sheet
Data: |
|
|
|
|
|
| Total Assets |
$622,535 |
$617,423 |
$621,279 |
$475,104 |
$465,171 |
| Total Loans |
483,164 |
485,435 |
474,239 |
393,282 |
380,746 |
| Allowance for Loan Loss |
3,893 |
4,146 |
4,069 |
3,978 |
3,925 |
| Total Deposits |
516,133 |
516,153 |
523,390 |
395,149 |
386,497 |
| Total Shareholders’ Equity |
71,436 |
69,897 |
67,378 |
50,261 |
48,954 |
(a) Unless otherwise noted, all financial information
presented in the accompanying tables as of and for the year ending
December 31, 2018, is derived from audited financial statements
|
Carolina Trust BancShares, Inc. |
|
Comparative Income Statements For the
Three Months Ended Dollars in thousands, except share and
per share data |
|
|
Unaudited 9/30/19 |
Unaudited9/30/18 |
Variance $ |
Variance % |
| Income and Per Share
Data: |
|
|
|
|
| Interest Income |
$7,372 |
$5,419 |
$ 1,953 |
36% |
| Interest Expense |
1,614 |
1,176 |
438 |
37% |
| Net Interest Income |
5,758 |
4,243 |
1,515 |
36% |
| Provision for Loan Loss |
(37) |
75 |
(112) |
(149%) |
| Net Interest Income After
Provision |
5,795 |
4,168 |
1,627 |
39% |
| Non-interest Income |
534 |
374 |
160 |
43% |
| Non-interest Expense, Excluding
Merger Expenses |
3,821 |
3,170 |
651 |
21% |
| Merger Expenses |
585 |
157 |
428 |
273% |
| Income Before Taxes |
1,923 |
1,215 |
708 |
58% |
| Income Tax Expense |
496 |
300 |
326 |
65% |
| Net Income |
$ 1,427 |
$ 915 |
$ 512 |
56% |
|
|
|
|
|
|
| Net Income Per Common
Share: |
|
|
|
|
| Basic |
$ 0.15 |
$0.13 |
|
|
| Diluted |
$ 0.15 |
$0.13 |
|
|
| Average Common Shares
Outstanding: |
|
|
|
|
| Basic |
9,304,051 |
7,156,987 |
|
|
| Diluted |
9,375,163 |
7,243,875 |
|
|
| Comparative
Income Statements |
| For the Nine
Months Ended |
| Dollars in
thousands, except share and per share data |
| |
| |
|
Unaudited |
Unaudited |
Variance |
Variance |
| |
|
9/30/2019 |
9/30/2018 |
$ |
% |
| Income and Per Share Data: |
|
|
|
|
| Interest Income |
$21,855 |
$15,444 |
$6,411 |
42% |
| Interest Expense |
4,584 |
3,391 |
1,193 |
35% |
| Net Interest Income |
17,271 |
12,053 |
5,218 |
43% |
| Provision for Loan Loss |
116 |
415 |
(299) |
(72)% |
| Net Interest Income After Provision |
17,155 |
11,638 |
5,517 |
47% |
| Non-interest Income |
1,818 |
1,070 |
748 |
70% |
| Non-interest Expense, Excluding Merger
Expenses |
11,949 |
9,563 |
2,386 |
25% |
| Merger Expenses |
2,356 |
480 |
1,876 |
391% |
| Income Before Taxes |
4,668 |
2,665 |
2,003 |
75% |
| Income Tax Expense |
1,086 |
659 |
427 |
65% |
| Net Income |
$3,582 |
$2,006 |
$1,576 |
79% |
| |
|
|
|
|
| Net Income Per Common Share: |
|
|
|
|
| Basic |
$0.39 |
$0.33 |
|
|
| Diluted |
$0.38 |
$0.32 |
|
|
| Average Common Shares
Outstanding: |
|
|
|
|
| Basic |
9,297,383 |
6,118,461 |
|
|
| Diluted |
|
9,370,628 |
6,211,670 |
|
|
|
Carolina Trust BancShares, Inc. |
|
Quarterly Income Statement |
|
Dollars in thousands, except share and per share
data |
| |
For the three months ended: |
|
Income and Per Share Data: |
Unaudited 9/30/19 |
Unaudited 6/30/19 |
Unaudited 3/31/19 |
Unaudited 12/31/18 |
Unaudited 9/30/18 |
| Interest Income |
$7,372 |
$7,403 |
$7,080 |
$5,645 |
$ 5,419 |
| Interest Expense |
1,614 |
1,548 |
1,422 |
1,233 |
1,176 |
| Net Interest Income |
5,758 |
5,855 |
5,658 |
4,412 |
4,243 |
| Provision for Loan Loss |
(37) |
76 |
77 |
(9) |
75 |
| Net Interest Income After
Provision |
5,795 |
5,779 |
5,581 |
4,421 |
4,168 |
| Non-interest Income |
534 |
664 |
620 |
186 |
374 |
| Non-interest Expense, Excluding
Merger Expenses |
3,821 |
4,059 |
4,069 |
3,093 |
3,170 |
| Merger Expenses |
585 |
49 |
1,722 |
264 |
157 |
| Income Before Taxes |
1,923 |
2,335 |
410 |
1,250 |
1,215 |
| Income Tax Expense |
496 |
517 |
73 |
304 |
300 |
| Net Income |
$ 1,427 |
$ 1,818 |
$ 337 |
$ 946 |
$ 915 |
| |
|
|
|
|
|
| Net Income Per Common
Share: |
|
|
|
|
|
| Basic |
$ 0.15 |
$ 0.20 |
$ 0.04 |
$ 0.13 |
$ 0.13 |
| Diluted |
$ 0.15 |
$ 0.19 |
$ 0.04 |
$ 0.13 |
$ 0.13 |
| Average Common Shares
Outstanding: |
|
|
|
|
|
| Basic |
9,304,051 |
9,297,142 |
9,290,811 |
7,156,987 |
7,156,987 |
| Diluted |
9,375,163 |
9,366,814 |
9,361,612 |
7,239,698 |
7,243,875 |
| |
|
|
|
|
|
Non-GAAP MeasureAdjusted Net Income
(excludes accretion of purchased loan discounts and purchased time
deposit discounts, amortization of core deposit intangibles, and
merger expenses, adjusted for the effect of income
taxes):
|
Income Before Taxes |
$ 1,923 |
$ 2,335 |
$ 410 |
$ 1,250 |
$ 1,215 |
| Less: Accretion of purchased
loan Discount |
(78) |
(132) |
(117) |
(1) |
(2) |
| Add: Accretion of purchased
time deposit discounts |
8 |
10 |
12 |
- |
- |
| Add: Amortization of core
deposit Intangibles |
138 |
125 |
161 |
7 |
9 |
| Add: Merger Expenses |
585 |
49 |
1,722 |
264 |
157 |
| Adjusted Income Before Taxes |
2,576 |
2,387 |
2,188 |
1,520 |
1,379 |
| Less: Income Tax
Expense |
496 |
517 |
73 |
304 |
300 |
| Less: Income Tax Effect of
Adjustments |
71 |
9 |
405 |
43 |
17 |
| Adjusted Net
Income |
$ 2,009 |
$ 1,861 |
$ 1,710 |
$ 1,173 |
$ 1,062 |
| |
|
|
|
|
|
| Adjusted Net
Income Per Common Share: |
|
Basic |
$0.22 |
$0.20 |
$0.18 |
$0.16 |
$0.15 |
| Diluted |
$0.21 |
$0.20 |
$0.18 |
$0.16 |
$0.15 |
| Average Common Shares
Outstanding: |
|
|
|
|
|
| Basic |
9,304,051 |
9,297,142 |
9,290,811 |
7,156,987 |
7,156,987 |
| Diluted |
9,375,163 |
9,366,814 |
9,361,612 |
7,239,698 |
7,243,875 |
|
Carolina Trust BancShares, Inc. |
|
Selected Financial Highlights |
|
Dollars in thousands, except share and per share data |
| |
9/30/19 |
6/30/19 |
3/31/19 |
12/31/18 |
9/30/18 |
| Capital
Ratios: |
|
|
|
|
|
| Common equity tier 1 capital
ratio 1 |
13.09% |
12.67% |
12.45% |
12.36% |
12.21% |
| Tier 1 capital ratio 1 |
13.09% |
12.67% |
12.45% |
12.36% |
12.21% |
| Total capital ratio 1 |
13.86% |
13.47% |
13.25% |
13.34% |
13.19% |
| Tier 1 leverage ratio 1 |
11.22% |
10.88% |
10.64% |
10.85% |
10.56% |
| |
|
|
|
|
|
| Tangible Common Equity (*) |
$63,272 |
$61,648 |
$58,983 |
$50,221 |
$48,907 |
| Common Shares Outstanding |
9,305,714 |
9,301,575 |
9,296,977 |
7,156,987 |
7,156,987 |
| Book Value per Common Share |
$7.68 |
$7.51 |
$7.25 |
$7.02 |
$6.84 |
| Tangible Book Value per Common
Share (*) |
$6.80 |
$6.63 |
$6.34 |
$7.02 |
$6.83 |
| Performance Ratios for
the Three Months Ended (annualized): |
|
|
|
|
|
| Return on Average Assets |
0.92%2 |
1.18%3 |
0.23%4 |
0.80%5 |
0.78%6 |
| Return on Average Common
Equity |
7.98%2 |
10.64%3 |
2.05%4 |
7.54%5 |
7.42%6 |
| Net Interest Margin |
3.97% |
4.10% |
4.09% |
3.94% |
3.82% |
| |
|
|
|
|
|
| Asset
Quality: |
|
|
|
|
|
| Delinquent Loans (30-89 days
accruing interest) |
$ 1,263 |
$ 741 |
$ 819 |
$ 459 |
$ 754 |
| |
|
|
|
|
|
| Delinquent Loans (90 days or more
and accruing) |
-0- |
$ 120 |
$ 1 |
$ 5 |
$ -0- |
| Non-accrual Loans |
1,086 |
1,166 |
1,034 |
1,046 |
1,057 |
| OREO and Repossessed
property |
1,043 |
1,351 |
2,190 |
1,157 |
1,782 |
| Total Nonperforming Assets |
$2,129 |
$2,637 |
$3,225 |
$2,208 |
$2,839 |
| |
|
|
|
|
|
| Restructured Loans |
$2,620 |
$3,229 |
$3,755 |
$3,856 |
$3,925 |
| Nonperforming Assets / Total
Assets |
0.34% |
0.43% |
0.52% |
0.46% |
0.61% |
| Nonperforming Assets / Equity
& Allowance for Loan Loss |
2.82% |
3.56% |
4.51% |
4.07% |
5.37% |
| Allowance for Loan Loss /
Nonperforming Assets |
187% |
157% |
126% |
180% |
138% |
| Allowance for Loan Loss / Total
Loans |
0.82% |
0.85% |
0.86% |
1.01% |
1.03% |
| Net Loan Charge-offs
(Recoveries) |
$127 |
($2) |
($14) |
($62) |
($6) |
| Net Loan Charge-offs (Recoveries)
/ Average Loans (annualized) |
0.11% |
0.00% |
(0.01%) |
(0.06%) |
(0.01%) |
| |
|
|
|
|
|
| Purchased Credit Impaired Loans
(gross) |
$3,857 |
$3,920 |
$4,000 |
$-0- |
$-0- |
| Discount on Purchased Credit
Impaired Loans |
652 |
665 |
673 |
-0- |
-0- |
| Purchased Credit Impaired Loan
(carrying value) |
3,205 |
3,255 |
3,327 |
-0- |
-0- |
| |
|
|
|
|
|
| Purchased Non-Credit Impaired
Loans (gross) |
$46,315 |
$50,650 |
$55,798 |
$-0- |
$-0- |
| Discount on Purchased Non-Credit
Impaired Loans |
686 |
754 |
857 |
-0- |
-0- |
| Purchased Non-Credit Impaired
Loans (carrying value) |
45,629 |
49,896 |
54,941 |
-0- |
-0- |
| Note: Financial information
is unaudited |
|
|
|
|
|
1 Capital ratios are presented for Carolina Trust Bank
which reports these ratios to the Federal Financial Institutions
Examination Council on form FFIEC 051. 2 For the three
months ended September 30, 2019, excluding merger expenses,
accretion of discounts on purchased loans and time deposits, and
amortization of core deposit intangibles, all net of tax, would
result in an annualized ROA of 1.29% and an annualized ROE of
11.23%. 3 For the three months ended June 30, 2019,
excluding merger expenses, accretion of discounts on purchased
loans and time deposits, and amortization of core deposit
intangibles, all net of tax, would result in an annualized ROA of
1.21% and an annualized ROE of 10.89%. 4 For the three
months ended March 31, 2019, excluding merger expenses, accretion
of discounts on purchased loans and time deposits, and amortization
of core deposit intangibles, all net of tax, would result in an
annualized ROA of 1.14% and an annualized ROE of
10.41%. 5 For the three months ended December 31, 2018,
excluding merger expenses, accretion of purchased loan discounts
and amortization of core deposit intangibles, net of tax, would
result in an annualized ROA of 0.99% and an annualized ROE of
9.35%. 6 For the three months ended September 30,
2018, excluding merger expenses, accretion of purchased loan
discounts and amortization of core deposit intangibles, net of tax,
would result in an annualized ROA of 0.90% and an annualized ROE of
8.61%.
| |
|
|
|
|
|
|
(*)Reconciliation of GAAP to
non-GAAP (Dollars in Thousands, except share and per share
data): |
9/30/19 |
6/30/19 |
3/31/19 |
12/31/18 |
9/30/18 |
|
Shareholders’ equity (GAAP) |
$71,436 |
$69,897 |
$67,378 |
$50,261 |
$48,954 |
|
Less: Goodwill |
5,717 |
|
5,665 |
|
5,355 |
|
- |
|
- |
|
Less: Core deposit intangible |
2,447 |
|
2,584 |
|
3,039 |
|
40 |
|
47 |
|
Tangible Common Equity (non-GAAP) |
63,272 |
|
61,648 |
|
58,984 |
|
50,221 |
|
48,907 |
|
Common Shares Outstanding |
9,305,714 |
|
9,301,575 |
|
9,296,977 |
|
7,156,987 |
|
7,156,987 |
|
Tangible Book Value per Common Share
(non-GAAP) |
$6.80 |
$6.63 |
$6.34 |
$7.02 |
$6.83 |
1 Note from Page 2
| Dollars in
Thousands |
|
|
|
|
| Reconciliation of
GAAP to non-GAAP: |
3Q19 |
|
3Q18 |
|
| Net income |
$1,427 |
|
$915 |
|
| Less: Accretion of purchased loan discounts |
(78) |
|
(2) |
|
| Add: Accretion of purchased time deposit discounts |
8 |
|
- |
|
| Add: Amortization of core deposit intangibles |
138 |
|
9 |
|
| Add: Merger expenses |
585 |
|
157 |
|
| Tax effect of adjustments |
(71) |
|
(17) |
|
| Adjusted net income |
$2,009 |
|
$1,062 |
|
| |
|
|
|
|
| Average diluted shares |
9,375,163 |
|
7,243,875 |
|
| Adjusted diluted earnings per share |
$0.21 |
|
$0.15 |
|
| |
|
|
|
|
| Average assets |
$617,914 |
|
$467,308 |
|
| Adjusted return on assets (annualized) |
1.29% |
|
0.91% |
|
| |
|
|
|
|
| Average equity |
$70,980 |
|
$48,927 |
|
| Adjusted return on equity (annualized) |
11.23% |
|
8.65% |
|
| |
|
|
|
|
| Net interest income |
$5,758 |
|
$4,243 |
|
| Less: Accretion of purchased loan discounts |
(78) |
|
(2) |
|
| Add: Accretion of purchased time deposit discounts |
8 |
|
- |
|
| Adjusted net interest income |
$5,688 |
|
$4,241 |
|
| Average earning assets |
575,109 |
|
441,234 |
|
| Adjusted net interest margin (annualized) |
3.92% |
|
3.81% |
|
| |
|
|
|
|
| Noninterest expenses |
$4,406 |
|
$3,327 |
|
| Less: Amortization of core deposit intangibles |
(138) |
|
(9) |
|
| Less: Merger expenses |
(585) |
|
(157) |
|
| Adjusted noninterest expenses (a) |
$3,683 |
|
$3,161 |
|
| |
|
|
|
|
| Adjusted net interest income (see above) |
$5,688 |
|
$4,241 |
|
| Noninterest income |
534 |
|
374 |
|
| Adjusted net revenues (b) |
$6,222 |
|
$4,615 |
|
| Adjusted efficiency ratio (a)
/ (b) |
59% |
|
68% |
|
Contact: Jerry L. Ocheltree President and CEO Carolina Trust
BancShares, Inc. (704) 735-1104
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