Carolina Trust BancShares, Inc. (the “Company”) (NASDAQ
- CART) reports its financial results today for
the most recently completed quarter. In the quarter
that ended June 30, 2019 (“2Q19”), the Company’s net income was
$1,818,000 or $0.19 per diluted share as compared to $510,000 or
$0.08 per diluted share in the quarter ended June 30, 2018
(“2Q18”), an increase of $1,308,000 or $0.11 per diluted
share. The diluted average common shares outstanding
increased to 9.4 million shares in 2Q19 from 6.7 million shares in
2Q18, following the acquisition of Clover Community Bankshares,
Inc., (“Clover”) and its subsidiary bank, Clover Community Bank on
January 1, 2019 that was described in more detail in the Company’s
first quarter 2019 earnings release.
The Company recognized expenses and income in each period that
were related to its acquisition. These items, net of tax,
reduced income by $43,000 in 2Q19 and by $287,000 in 2Q18 when the
Company began incurring investment banking, legal, and due
diligence fees for the Clover acquisition. Adjusted net
income, which excludes these merger-related items and is a non-GAAP
(Generally Accepted Accounting Principles) measure, was $1,861,000
in 2Q19 and $797,000 in 2Q18. On a diluted per share basis,
adjusted net income was $0.20 in 2Q19 and $0.12 in 2Q18. See
the non-GAAP reconciliation table that accompanies this
release.
For the linked quarter ended March 31, 2019, net income was
$337,000 or $0.04 per diluted share and adjusted net income was
$1,710,000 or $0.18, per diluted share.
Jerry Ocheltree, President and CEO, stated, “We are pleased with
the results of the second quarter including higher net income and
improved ROA, ROE, and efficiency ratios following a successful
integration of the Clover franchise during the first quarter.
We have a stronger team that serves a larger portion of the
Charlotte MSA and have generated profits for capital support of our
planned asset growth. In the second half of 2019 we will work
each day to serve our customers well and to be responsive to their
financial needs, while at the same time working toward the planned
merger and successful integration into Carolina Financial
Corporation and its subsidiary, CresCom Bank. As part of this
larger community bank, we are excited about continuing the highest
level of service with an anticipated wider array of products as
part of the Carolina Financial team led by Jerry Rexroad and his
experienced and dedicated executives.”
The table below summarizes the key components of net income for
2Q19 and 2Q18.
|
$ in thousands |
For the three months ended |
|
|
|
|
June 30, 2019 |
June 30, 2018 |
Increase(Decrease) |
% Change |
|
Interest income |
$ |
7,403 |
|
$ |
5,198 |
|
$ |
2,205 |
|
42 |
% |
|
Interest expense |
|
1,548 |
|
|
1,155 |
|
|
393 |
|
34 |
% |
|
Net interest income |
|
5,855 |
|
|
4,043 |
|
|
1,812 |
|
45 |
% |
|
Provision for loan loss |
|
76 |
|
|
88 |
|
|
(12 |
) |
(14 |
%) |
|
Noninterest income |
|
664 |
|
|
366 |
|
|
298 |
|
81 |
% |
|
Noninterest expense, excluding merger expenses |
|
4,059 |
|
|
3,297 |
|
|
762 |
|
23 |
% |
|
Merger expenses |
|
49 |
|
|
323 |
|
|
(274 |
) |
(85 |
%) |
|
Pre-tax income |
|
2,335 |
|
|
701 |
|
|
1,634 |
|
233 |
% |
|
Income tax expense |
|
517 |
|
|
191 |
|
|
326 |
|
171 |
% |
|
Net income |
$ |
1,818 |
|
$ |
510 |
|
|
1,308 |
|
256 |
% |
|
|
|
|
|
|
|
Non-GAAP measurements: |
|
|
|
|
|
Net income |
$ |
1,818 |
|
$ |
510 |
|
|
|
|
Adjustments: |
|
|
|
|
|
+ Merger expenses |
|
49 |
|
|
323 |
|
|
|
|
- Accretion of purchased loan discounts |
|
(132 |
) |
|
(2 |
) |
|
|
|
- Accretion of purchased time deposit discounts |
|
10 |
|
|
- |
|
|
|
|
+ Amortization of core deposit intangible |
|
125 |
|
|
9 |
|
|
|
|
- Net tax effect of adjustments |
|
(9 |
) |
|
(43 |
) |
|
|
|
= Adjusted net income |
$ |
1,861 |
|
$ |
797 |
|
$ |
1,064 |
|
134 |
% |
|
|
|
|
|
|
|
Return on assets |
|
1.18 |
% |
|
0.44 |
% |
|
0.74 |
% |
|
|
Return on equity |
|
10.64 |
% |
|
4.69 |
% |
|
5.95 |
% |
|
|
Net interest margin |
|
4.10 |
% |
|
3.76 |
% |
|
0.34 |
% |
|
|
Efficiency ratio 1 |
|
63 |
% |
|
82 |
% |
|
(19 |
%) |
|
|
Adjusted return on assets 2 |
|
1.21 |
% |
|
0.69 |
% |
|
0.52 |
% |
|
|
Adjusted return on equity 2 |
|
10.89 |
% |
|
7.34 |
% |
|
3.55 |
% |
|
|
Adjusted net interest margin 2 |
|
4.02 |
% |
|
3.76 |
% |
|
0.26 |
% |
|
|
Adjusted efficiency ratio 2 |
|
62 |
% |
|
75 |
% |
|
(13 |
%) |
|
|
Average assets |
$ |
615,546 |
|
$ |
460,556 |
|
$ |
154,990 |
|
34 |
% |
|
Average loans |
|
480,821 |
|
|
370,875 |
|
|
109,946 |
|
30 |
% |
|
Average deposits |
|
518,293 |
|
|
381,125 |
|
|
137,168 |
|
36 |
% |
|
Average equity 3 |
|
68,538 |
|
|
43,576 |
|
|
24,962 |
|
57 |
% |
|
Book value per share as of the end of the period |
$ |
7.51 |
|
$ |
6.73 |
|
|
|
|
Tangible book value per share as of the end of the period |
$ |
6.63 |
|
$ |
6.73 |
|
|
|
| |
|
|
|
|
|
|
|
|
| 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 Note: 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 acquisitions in 2Q19
included $125,000 in amortization of core deposit intangibles
(“CDI”), $49,000 in merger-related expenses, and $10,000 in expense
from accretion of discounts on acquired deposits. These
expenses were partially offset by $132,000 in income from accretion
of discounts recorded on acquired loans. The tax benefit was
$9,000 for an overall $43,000 decrease to 2Q19 net income related
to acquisitions. In 2Q18, the CDI amortization, merger
related expenses, income from accretion on loans and tax benefit
were $9,000, $323,000, $2,000 and $43,000 respectively, which
resulted in an overall decrease to net income of $287,000.
Comparing 2Q19 with 2Q18, the $1,634,000 (+233%) increase in
pre-tax income was due to the $1,812,000 (+45%) increase in net
interest income, as interest income grew by $2,205,000 (+42%) while
interest expenses grew by only $393,000 (+34%). Noninterest
income grew by $298,000 (+81%) as compared to a $488,000 (+13%)
increase in noninterest expenses. Income taxes increased by
$326,000 (+171%), which was less than the growth of pre-tax income
due to more tax-exempt income in 2Q19 and to non-deductible merger
expenses incurred in 2Q18.
Tangible book value per share at June 30, 2019 was $6.63, a
$0.10 decrease from $6.73 at June 30, 2018. The decrease was
due to dilution from merger consideration paid to Clover
shareholders for the net assets acquired. Tangible book value
per share increased by $0.29 from $6.34 at March 31, 2019 with the
increase attributed to earnings and higher accumulated other
comprehensive income, an equity component that reflects a higher
valuation of the securities portfolio.
Net interest income increased from $4,043,000 in 2Q18 to
$5,855,000 in 2Q19, 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 $110 million, or 30%,
from 2Q18 to 2Q19 and included $64 million acquired from
Clover. The remaining $46 million in year-over-year average
loan growth was concentrated in the Mooresville and Hickory offices
and the Salisbury loan production office, which combined for $34
million of the growth, followed by the Denver and Gastonia offices
with average loan growth totaling $14 million. The offices
with the highest average loans in 2Q19 were Gastonia ($87 million),
Mooresville ($86 million), Hickory ($75 million), and Lincolnton
Main ($69 million).
The net interest margin increased by 34 basis points from 3.76%
in 2Q18 to 4.10% in 2Q19. The yield on earning assets
increased by 35 basis points from 4.84% in 2Q18 to 5.19% in
2Q19. Comparatively, the cost of funds, including deposits,
borrowings and holding company debt, increased by only 2 basis
points from 1.12% in 2Q18 to 1.14% in 2Q19. 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 86%
in 2Q18 to 84% in 2Q19. The additional liquidity maintained
in interest earning cash and securities resulted in those
categories increasing from 14% to 16% as a percentage of earning
assets for the same periods.
The margin and asset yield increases were attributed primarily
to the 42 basis points increase in loan yield from 5.24% in 2Q18 to
5.66% in 2Q19. Loan yields were positively impacted by prime
rate increases of 25 basis points each in June 2018, September
2018, and December 2018. The loan yields also benefited from
accretion of the discounts on purchased loans and were partially
offset by accretion of the discounts on acquired time deposits. The
net impact of loan and deposit accretion added 8 basis points to
the net interest margin.
In a linked quarter comparison, the net interest margin improved
by 1 basis point from 4.09% in 1Q19 to 4.10% in 2Q19. The
earning asset yield grew by 7 basis points and was slightly better
than the 6 basis points increase in cost of funds. As
compared to the linked quarter, average loans grew by $16 million
at an annualized growth rate of 14%, and average deposits grew by
$9 million at an annualized growth rate of 7%.
Noninterest income increased by $298,000 from $366,000 in 2Q18
to $664,000 in 2Q19. The increase was due mostly to mortgage
fee income increasing by $97,000 or 359%, to unrealized gains in
equity securities increasing by $78,000 or 156%, and to an increase
in interchange fees of $64,000 or 123%. The growth in
mortgage fee income result was partially attributed to experienced
mortgage specialists who were previously with Clover and to a
renewed emphasis to meeting the demand for mortgages in the Bank’s
markets. The unrealized gains in equity securities was driven
by an increase in the market value of the Bank’s investment
security holdings that trade in public markets. The interchange
fees increased as a result of an increase in the Bank’s checking
account customer base for which the average total balance grew by
64% from 2Q18 to 2Q19, primarily due to the acquisition of Clover,
and as a result of an overall increase in debit card usage.
Noninterest expense increased by $488,000 (+13%), from
$3,620,000 in 2Q18 to $4,108,000 in 2Q19. Salaries and
benefits grew by $467,000 or 25% and data processing expenses grew
by $90,000 or 48% due to the additional employees and customer
accounts following the acquisition of Clover on January 1,
2019. Amortization of core deposit intangibles increased by
$116,000 due to the core deposit intangible recognized on January
1, 2019 from the valuation of Clover’s non-maturing deposits.
Stockholder expenses increased by $54,000 due to the additional
legal, transfer agent, printing and SEC filing expenses in 2019
with a larger shareholder base.
Lessening the impact of increases in other noninterest expenses
that were mostly attributed to the growth from Clover acquisition
were decreases in merger related expenses of $274,000, or 85%, and
in foreclosed asset expenses of $221,000 or 74% in 2Q19 as compared
to 2Q18. Merger expenses, higher in 2Q18, were attributed to
due diligence and negotiating the merger agreement with Clover in
2018. The Bank’s foreclosed asset expenses have declined, as
foreclosed assets have decreased over the past 12 months by
$621,000 or 31%.
Comparison of Financial Condition at June 30, 2019 with March
31, 2019
Loans grew by $11.2 million (+2.4%) while deposits declined by
$7.2 million (+1.4%), from March 31, 2019 to June 30, 2019, even
though average deposits increased from 1Q19 to 2Q19 as discussed
above in the net interest income section. The additional
funding for loan growth was drawn from interest-earning deposits
with other banks. Loan growth was mostly in commercial real
estate loans, both owner-occupied, up $3.4 million, and non-owner
occupied, up $2.8 million. Commercial-other loans which
includes municipal loans increased by $3.0 million, and residential
mortgage loans grew by $2.3 million. The decrease in deposits
was mostly in the categories of business noninterest checking, down
$4.7 million, and consumer interest checking, down $1.7
million. Shareholders’ equity grew by $2.5 million (+3.7%),
primarily from $1.8 million in earnings during the quarter.
Equity also increased by $700,000 due to accumulated other
comprehensive income from the appreciation of the Bank’s debt
securities as markets began anticipating a decrease in the
short-term interest rates in the last half of 2019.
Over the past twelve months, loans grew by $111 million
including $64 million acquired from Clover on January 1, 2019 and
$47 million from the Bank’s existing customer relationships.
Deposits grew by $123 million, including $112 million acquired from
Clover, and $16 million from existing customer relationships that
were partially offset by a $5 million decrease in wholesale
deposits.
Asset quality measurements remained strong during the second
quarter of 2019. The ratio of non-performing assets to total
assets was 0.43% on June 30, 2019 as compared to 0.52% on March 31,
2019 and as compared to 0.65% on June 30, 2018. Nonperforming
loans to total loans increased by 2 basis points during the second
quarter to 0.24% at June 30, 2019 but decreased by 6 basis points
from a year ago.
Net charge offs (recoveries) to average loans on an annualized
basis were 0.00%, (0.01%), and 0.03%, respectively, for the
quarters ended June 30, 2019, March 31, 2019, and June 30,
2018.
Regulatory capital ratios for the Company’s wholly owned
subsidiary, Carolina Trust Bank, increased from March 31, 2019 to
June 30, 2019. The growth in risk-based capital from second
quarter earnings exceeded the second quarter growth in
risk-weighted assets. The Bank’s total risk-based capital
ratio at June 30, 2019 was 13.47%, a 22 basis point increase from
13.25% at March 31, 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: the impact of changes in tax law and regulations, including
the Tax Cuts and Jobs Act of 2017; 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; and the impact of our
merger activity, including the risks that (1) the business related
to such merger activity may not be integrated successfully or such
integration may take longer to accomplish than expected (or may not
occur at all); (2) the expected cost savings and any revenue
synergies from our merger activity may not be fully realized within
expected timeframes or at all; and (3) disruption from merger
activity may make it more difficult to maintain relationships with
clients, associates, or suppliers. 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 Highlights |
|
Dollars in thousands |
|
|
|
|
Unaudited |
Unaudited |
(a) |
Unaudited |
Unaudited |
|
|
6/30/19 |
3/31/19 |
12/31/18 |
9/30/18 |
6/30/18 |
| Balance Sheet
Data: |
|
|
|
|
|
| Total Assets |
$ |
617,423 |
$ |
621,279 |
$ |
475,104 |
$ |
465,171 |
$ |
470,854 |
| Total Loans |
|
485,435 |
|
474,239 |
|
393,282 |
|
380,746 |
|
374,026 |
| Allowance for Loan Loss |
|
4,146 |
|
4,069 |
|
3,978 |
|
3,925 |
|
3,844 |
| Total Deposits |
|
516,153 |
|
523,390 |
|
395,149 |
|
386,497 |
|
393,279 |
| Total Shareholders’ Equity |
|
69,897 |
|
67,378 |
|
50,261 |
|
48,954 |
|
48,201 |
| |
|
|
|
|
|
|
|
|
|
|
| (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 |
|
|
| |
Unaudited6/30/19 |
Unaudited6/30/18 |
Variance$ |
Variance% |
| Income and Per Share
Data: |
|
|
|
|
|
Interest Income |
$ |
7,403 |
$ |
5,198 |
$ |
2,205 |
|
42 |
% |
| Interest Expense |
|
1,548 |
|
1,155 |
|
393 |
|
34 |
% |
| Net Interest Income |
|
5,855 |
|
4,043 |
|
1,812 |
|
45 |
% |
| Provision for Loan Loss |
|
76 |
|
88 |
|
(12 |
) |
(14 |
%) |
| Net Interest Income After
Provision |
|
5,779 |
|
3,955 |
|
1,824 |
|
46 |
% |
| Non-interest Income |
|
664 |
|
366 |
|
298 |
|
81 |
% |
| Non-interest Expense, Excluding
Merger Expenses |
|
4,059 |
|
3,297 |
|
762 |
|
23 |
% |
| Merger Expenses |
|
49 |
|
323 |
|
(274 |
) |
(85 |
%) |
| Income Before Taxes |
|
2,335 |
|
701 |
|
1,634 |
|
233 |
% |
| Income Tax Expense |
|
517 |
|
191 |
|
326 |
|
171 |
% |
| Net Income |
$ |
1,818 |
$ |
510 |
$ |
1,308 |
|
256 |
% |
|
|
|
|
|
|
| Net Income Per Common
Share: |
|
|
|
|
| Basic |
$ |
0.20 |
$ |
0.08 |
|
|
| Diluted |
$ |
0.19 |
$ |
0.08 |
|
|
| Average Common Shares
Outstanding: |
|
|
|
|
| Basic |
|
9,297,142 |
|
6,583,719 |
|
|
| Diluted |
|
9,366,814 |
|
6,671,626 |
|
|
|
|
|
Carolina Trust BancShares, Inc. |
|
Comparative Income Statements |
|
For the Six Months Ended |
|
Dollars in thousands, except share and per share data |
| |
| |
|
|
|
|
| |
Unaudited |
Unaudited |
Variance |
Variance |
| |
6/30/2019 |
6/30/2018 |
$ |
% |
| Income and Per Share
Data: |
|
|
|
|
|
Interest Income |
$ |
14,483 |
$ |
10,025 |
$ |
4,458 |
|
44 |
% |
| Interest Expense |
|
2,970 |
|
2,215 |
|
755 |
|
34 |
% |
| Net Interest Income |
|
11,513 |
|
7,810 |
|
3,703 |
|
47 |
% |
| Provision for Loan Loss |
|
153 |
|
340 |
|
(187 |
) |
(55 |
%) |
| Net Interest Income After
Provision |
|
11,360 |
|
7,470 |
|
3,890 |
|
52 |
% |
| Non-interest Income |
|
1,284 |
|
696 |
|
588 |
|
84 |
% |
| Non-interest Expense,
Excluding Merger Expenses |
|
8,128 |
|
6,393 |
|
1,735 |
|
27 |
% |
| Merger Expenses |
|
1,771 |
|
323 |
|
1,448 |
|
448 |
% |
| Income Before Taxes |
|
2,745 |
|
1,450 |
|
1,295 |
|
89 |
% |
| Income Tax Expense |
|
590 |
|
359 |
|
231 |
|
64 |
% |
| Net
Income |
$ |
2,155 |
$ |
1,091 |
$ |
1,064 |
|
98 |
% |
| |
|
|
|
|
| Net Income Per Common
Share: |
|
|
|
|
| Basic |
$ |
0.23 |
$ |
0.19 |
|
|
| Diluted |
$ |
0.23 |
$ |
0.19 |
|
|
| Average Common Shares
Outstanding: |
|
|
|
|
| Basic |
|
9,293,994 |
|
5,667,619 |
|
|
| Diluted |
|
9,366,779 |
|
5,763,824 |
|
|
| |
|
|
|
|
|
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: |
Unaudited6/30/19 |
Unaudited3/31/19 |
Unaudited12/31/18 |
Unaudited9/30/18 |
Unaudited6/30/18 |
|
Interest Income |
$ |
7,403 |
$ |
7,080 |
$ |
5,645 |
|
$ |
5,419 |
$ |
5,198 |
| Interest Expense |
|
1,548 |
|
1,422 |
|
1,233 |
|
|
1,176 |
|
1,155 |
| Net Interest Income |
|
5,855 |
|
5,658 |
|
4,412 |
|
|
4,243 |
|
4,043 |
| Provision for Loan Loss |
|
76 |
|
77 |
|
(9 |
) |
|
75 |
|
88 |
| Net Interest Income After
Provision |
|
5,779 |
|
5,581 |
|
4,421 |
|
|
4,168 |
|
3,955 |
| Non-interest Income |
|
664 |
|
620 |
|
186 |
|
|
374 |
|
366 |
| Non-interest Expense,
Excluding Merger Expenses |
|
4,059 |
|
4,069 |
|
3,093 |
|
|
3,170 |
|
3,297 |
| Merger Expenses |
|
49 |
|
1,722 |
|
264 |
|
|
157 |
|
323 |
| Income Before Taxes |
|
2,335 |
|
410 |
|
1,250 |
|
|
1,215 |
|
701 |
| Income Tax Expense |
|
517 |
|
73 |
|
304 |
|
|
300 |
|
191 |
| Net
Income |
$ |
1,818 |
$ |
337 |
$ |
946 |
|
$ |
915 |
$ |
510 |
| |
|
|
|
|
|
| Net Income Per Common
Share: |
|
|
|
|
|
| Basic |
$ |
0.20 |
$ |
0.04 |
$ |
0.13 |
|
$ |
0.13 |
$ |
0.08 |
| Diluted |
$ |
0.19 |
$ |
0.04 |
$ |
0.13 |
|
$ |
0.13 |
$ |
0.08 |
| Average Common Shares
Outstanding: |
|
|
|
|
|
| Basic |
|
9,297,142 |
|
9,290,811 |
|
7,156,987 |
|
|
7,156,987 |
|
6,583,719 |
| Diluted |
|
9,366,814 |
|
9,361,612 |
|
7,239,698 |
|
|
7,243,875 |
|
6,598,542 |
| |
|
|
|
|
|
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 |
$ |
2,335 |
|
$ |
410 |
|
$ |
1,250 |
|
$ |
1,215 |
|
$ |
701 |
|
| Less:
Accretion of purchased loan Discount |
|
(132 |
) |
|
(117 |
) |
|
(1 |
) |
|
(2 |
) |
|
(2 |
) |
|
Add: Accretion of purchased time deposit discounts |
|
10 |
|
|
12 |
|
|
- |
|
|
- |
|
|
- |
|
|
Add: Amortization of core deposit Intangibles |
|
125 |
|
|
161 |
|
|
7 |
|
|
9 |
|
|
9 |
|
|
Add: Merger Expenses |
|
49 |
|
|
1,722 |
|
|
264 |
|
|
157 |
|
|
323 |
|
| Adjusted
Income Before Taxes |
|
2,387 |
|
|
2,188 |
|
|
1,520 |
|
|
1,379 |
|
|
1,031 |
|
|
Less: Income Tax Expense |
|
517 |
|
|
73 |
|
|
304 |
|
|
300 |
|
|
191 |
|
| Less:
Income Tax Effect of Adjustments |
|
9 |
|
|
405 |
|
|
43 |
|
|
17 |
|
|
43 |
|
|
Adjusted Net Income |
$ |
1,861 |
|
$ |
1,710 |
|
$ |
1,173 |
|
$ |
1,062 |
|
$ |
797 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income Per Common Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.20 |
|
$ |
0.18 |
|
$ |
0.16 |
|
$ |
0.15 |
|
$ |
0.12 |
|
|
Diluted |
$ |
0.20 |
|
$ |
0.18 |
|
$ |
0.16 |
|
$ |
0.15 |
|
$ |
0.12 |
|
|
Average Common Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
9,297,142 |
|
|
9,290,811 |
|
|
7,156,987 |
|
|
7,156,987 |
|
|
6,583,719 |
|
|
Diluted |
|
9,366,814 |
|
|
9,361,612 |
|
|
7,239,698 |
|
|
7,243,875 |
|
|
6,671,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carolina Trust BancShares, Inc. |
|
Selected Financial Highlights |
|
Dollars in thousands, except share and per share data |
|
|
| |
6/30/19 |
3/31/19 |
12/31/18 |
9/30/18 |
6/30/18 |
| Capital
Ratios: |
|
|
|
|
|
| Common equity tier 1 capital
ratio 1 |
|
12.67 |
% |
|
12.45 |
% |
|
12.36 |
% |
|
12.21 |
% |
|
12.16 |
% |
| Tier 1 capital ratio 1 |
|
12.67 |
% |
|
12.45 |
% |
|
12.36 |
% |
|
12.21 |
% |
|
12.16 |
% |
| Total capital ratio 1 |
|
13.47 |
% |
|
13.25 |
% |
|
13.34 |
% |
|
13.19 |
% |
|
13.14 |
% |
| Tier 1 leverage ratio 1 |
|
10.88 |
% |
|
10.64 |
% |
|
10.85 |
% |
|
10.56 |
% |
|
10.45 |
% |
| |
|
|
|
|
|
| Tangible Common Equity
(*) |
$ |
61,648 |
|
$ |
58,983 |
|
$ |
50,221 |
|
$ |
48,907 |
|
$ |
48,145 |
|
| Common Shares Outstanding |
|
9,301,575 |
|
|
9,296,977 |
|
|
7,156,987 |
|
|
7,156,987 |
|
|
7,156,987 |
|
| Book Value per Common
Share |
$ |
7.51 |
|
$ |
7.25 |
|
$ |
7.02 |
|
$ |
6.84 |
|
$ |
6.73 |
|
| Tangible Book Value per Common
Share (*) |
$ |
6.63 |
|
$ |
6.34 |
|
$ |
7.02 |
|
$ |
6.83 |
|
$ |
6.73 |
|
| |
|
|
|
|
|
| Performance Ratios for
the Three Months Ended (annualized): |
|
|
|
|
|
| Return on Average Assets |
|
1.18 |
% 2 |
|
0.23 |
% 3 |
|
0.80 |
% 4 |
|
0.78 |
% 5 |
|
0.44 |
% 6 |
| Return on Average Common
Equity |
|
10.64 |
% 2 |
|
2.05 |
% 3 |
|
7.54 |
% 4 |
|
7.42 |
% 5 |
|
4.69 |
% 6 |
| Net Interest Margin |
|
4.10 |
% |
|
4.09 |
% |
|
3.94 |
% |
|
3.82 |
% |
|
3.76 |
% |
| |
|
|
|
|
|
| Asset
Quality: |
|
|
|
|
|
| Delinquent Loans (30-89 days
accruing interest) |
$ |
741 |
|
$ |
819 |
|
$ |
459 |
|
$ |
754 |
|
$ |
957 |
|
| |
|
|
|
|
|
| Delinquent Loans (90 days or
more and accruing) |
$ |
120 |
|
$ |
1 |
|
$ |
5 |
|
|
-0- |
|
$ |
25 |
|
| Non-accrual Loans |
|
1,166 |
|
|
1,034 |
|
|
1,046 |
|
$ |
1,057 |
|
|
1,080 |
|
| OREO and Repossessed
property |
|
1,351 |
|
|
2,190 |
|
|
1,157 |
|
|
1,782 |
|
|
1,971 |
|
| Total Nonperforming
Assets |
$ |
2,637 |
|
$ |
3,225 |
|
$ |
2,208 |
|
$ |
2,839 |
|
$ |
3,076 |
|
| |
|
|
|
|
|
| Restructured Loans |
$ |
3,229 |
|
$ |
3,755 |
|
$ |
3,856 |
|
$ |
3,925 |
|
$ |
4,006 |
|
| Nonperforming Assets / Total
Assets |
|
0.43 |
% |
|
0.52 |
% |
|
0.46 |
% |
|
0.61 |
% |
|
0.65 |
% |
| Nonperforming Assets / Equity
& Allowance for Loan Loss |
|
3.56 |
% |
|
4.51 |
% |
|
4.07 |
% |
|
5.37 |
% |
|
5.91 |
% |
| Allowance for Loan Loss /
Nonperforming Assets |
|
157 |
% |
|
126 |
% |
|
180 |
% |
|
138 |
% |
|
125 |
% |
| Allowance for Loan Loss /
Total Loans |
|
0.85 |
% |
|
0.86 |
% |
|
1.01 |
% |
|
1.03 |
% |
|
1.03 |
% |
| Net Loan Charge-offs
(Recoveries) |
|
($2 |
) |
|
($14 |
) |
|
($62 |
) |
|
($6 |
) |
$ |
23 |
|
| Net Loan Charge-offs
(Recoveries) / Average Loans (annualized) |
|
0.00 |
% |
|
(0.01 |
%) |
|
(0.06 |
%) |
|
(0.01 |
%) |
|
0.03 |
% |
| |
|
|
|
|
|
| Purchased Credit Impaired
Loans (gross) |
$ |
3,920 |
|
$ |
4,000 |
|
$ |
-0- |
|
$ |
-0- |
|
$ |
-0- |
|
| Discount on Purchased Credit
Impaired Loans |
|
665 |
|
|
673 |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
| Purchased Credit Impaired Loan
(carrying value) |
|
3,255 |
|
|
3,327 |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Purchased Non-Credit Impaired
Loans (gross) |
$ |
50,650 |
|
$ |
55,798 |
|
$ |
-0- |
|
$ |
-0- |
|
$ |
-0- |
|
| Discount on Purchased
Non-Credit Impaired Loans |
|
754 |
|
|
857 |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
| Purchased Non-Credit Impaired
Loans (carrying value) |
|
49,896 |
|
|
54,941 |
|
|
-0- |
|
|
-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 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%. |
| 3 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%. |
| 4 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%. |
| 5 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%. |
| 6 For the
three months ended June 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 0.69% and an annualized ROE of 7.34%. |
| (*) |
|
Reconciliation of GAAP to non-GAAP (Dollars in
Thousands, |
|
|
|
|
|
|
|
except share and per share data): |
|
6/30/19 |
3/31/19 |
12/31/18 |
9/30/18 |
6/30/18 |
|
Shareholders’ equity (GAAP) |
$ |
69,897 |
$ |
67,378 |
$ |
50,261 |
$ |
48,954 |
$ |
48,201 |
|
Less: Goodwill |
|
5,665 |
|
5,355 |
|
- |
|
- |
|
- |
|
Less: Core deposit intangible |
|
2,584 |
|
3,039 |
|
40 |
|
47 |
|
56 |
|
Tangible Common Equity (non-GAAP) |
|
61,648 |
|
58,984 |
|
50,221 |
|
48,907 |
|
48,145 |
|
Common Shares Outstanding |
|
9,301,575 |
|
9,296,977 |
|
7,156,987 |
|
7,156,987 |
|
7,156,987 |
|
Tangible Book Value per Common Share (non-GAAP) |
$ |
6.63 |
$ |
6.34 |
$ |
7.02 |
$ |
6.83 |
$ |
6.73 |
| 1 Note from Page 2 |
|
|
|
|
|
|
| Dollars in Thousands |
|
|
|
|
|
|
|
Reconciliation of GAAP to non-GAAP: |
|
2Q19 |
|
|
|
|
2Q18 |
|
| Net income |
$ |
1818 |
|
|
|
$ |
510 |
|
| Less: Accretion of
purchased loan discounts |
|
(132 |
) |
|
|
|
(2 |
) |
| Add: Accretion of
purchased time deposit discounts |
|
10 |
|
|
|
|
- |
|
| Add: Amortization of
core deposit intangibles |
|
125 |
|
|
|
|
9 |
|
| Add: Merger
expenses |
|
49 |
|
|
|
|
323 |
|
| Tax effect of adjustments |
|
(9 |
) |
|
|
|
(43 |
) |
| Adjusted net income |
$ |
1,861 |
|
|
|
$ |
797 |
|
| |
|
|
|
|
|
|
| Average diluted shares |
|
9,366,814 |
|
|
|
|
6,671,626 |
|
| Adjusted diluted earnings per
share |
$ |
0.20 |
|
|
|
$ |
0.12 |
|
| |
|
|
|
|
|
|
| Average assets |
$ |
615,546 |
|
|
|
$ |
460,556 |
|
| Adjusted return on assets
(annualized) |
|
1.21 |
% |
|
|
|
0.69 |
% |
| |
|
|
|
|
|
|
| Average equity |
$ |
68,538 |
|
|
|
$ |
43,576 |
|
| Adjusted return on equity
(annualized) |
|
10.89 |
% |
|
|
|
7.34 |
% |
| |
|
|
|
|
|
|
| Net interest income |
$ |
5,855 |
|
|
|
$ |
4,043 |
|
| Less: Accretion of
purchased loan discounts |
|
(132 |
) |
|
|
|
(2 |
) |
| Add: Accretion of
purchased time deposit discounts |
|
10 |
|
|
|
|
_ |
|
| Adjusted net interest
income |
$ |
5,733 |
|
|
|
$ |
4,041 |
|
| Average earning assets |
|
572,463 |
|
|
|
|
431,168 |
|
| Adjusted net interest margin
(annualized) |
|
4.02 |
% |
|
|
|
3.76 |
% |
| |
|
|
|
|
|
|
| Noninterest expenses |
$ |
4,108 |
|
|
|
$ |
3,620 |
|
| Less: Amortization of core
deposit intangibles |
|
(125 |
) |
|
|
|
(9 |
) |
| Less: Merger
expenses |
|
(49 |
) |
|
|
|
(323 |
) |
| Adjusted noninterest expenses
(a) |
$ |
3,934 |
|
|
|
$ |
3,288 |
|
| |
|
|
|
|
|
|
| Adjusted net interest income
(see above) |
$ |
5,733 |
|
|
|
$ |
4,041 |
|
| Noninterest income |
|
664 |
|
|
|
|
366 |
|
| Adjusted net revenues (b) |
$ |
6,397 |
|
|
|
$ |
4,407 |
|
| Adjusted efficiency ratio (a)
/ (b) |
|
62 |
% |
|
|
|
75 |
% |
Contact:Jerry L. OcheltreePresident and CEOCarolina Trust
BancShares, Inc.(704) 735-1104
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