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Carolina Trust Bank Reports Third Quarter 2013 Profit

LINCOLNTON, N.C., Oct. 21, 2013 (GLOBE NEWSWIRE) -- Carolina Trust Bank (Nasdaq:CART) today reported net income of $200,000 for the third quarter 2013, or $0.04 per diluted share available to common shareholders. Third quarter profits were driven by higher net interest income, lower non-interest expense and lower provision for loan loss.

Excluding payment of dividends on preferred shares, CTB earned a profit of $249,000. Results compared with a net loss of $1.44 million for the second quarter 2013, or $0.32 per diluted common share, and a net loss of $72,000 for the third quarter 2012, or $0.03 per diluted common share.

President Mike Cline, who announced his retirement last month effective year-end, said he's pleased with the bank's progress. "Our overall trends are healthy and we have taken care of the big credit problems," he said. "These past several years have been extremely challenging, not only for us but for the entire financial industry. We're pleased with what we've been able to accomplish. Our loan portfolio and balance sheet are much improved. Fundamentals are solid and core earnings are strong."

3Q-2Q 2013 Comparisons

Income Statement Highlights

  • Total revenues, less interest expense, up 4.60% from second quarter 2013
  • Net interest income increased $142,000 or 5.41%
  • Non-interest income declined 3.36%
  • Interest expense decreased 3.16%
  • Non-interest expense declined $1.12 million or 32.06%
  • Net interest margin improved to 4.37%, up 28 basis points
  • Provision for loan loss declined $436,000, or 52.22%

Balance Sheet Highlights

  • Total loans increased $6.54 million from second quarter 2013 to $222.594 million
  • $16.56 million in new loans originated, offset by charge-offs and pay-downs
  • Total deposits of $232.98 million, up marginally from prior quarter 2013
  • Interest expense declined for 15th straight quarter
  • Core deposits remained strong, reflecting customer loyalty
  • Total assets increased $3.00 million from second quarter 2013 to $268.56 million
  • Credit quality continued to improve in the third quarter 2013
  • Total nonperforming assets declined 6.86%
  • Other Real Estate Owned, or foreclosed property, decreased 16.48%
  • Non-accrual loans up marginally 5.04%
  • Net loan charge-offs totaled $476,000, down $1.13 million
  • Net loan charge-offs to average loans remained below 1%
  • Capital levels continued to exceed "well-capitalized" requirements in third quarter 2013
  • Capital ratios improved on a link-quarter basis - Tier 1 Leverage Ratio to 8.44%, Tier 1 Risk-based Capital Ratio to 9.84%, and Total Risk-based Capital Ratio to 11.09%
  • Reserve for loan loss of $3.99 million declined $75,000 from second quarter 2013

Revenue

Led by higher net interest income, total revenues, less interest expense increased $133,000 to $3.03 million in the third quarter 2013 on a linked-quarter basis while up marginally from prior year.

Net interest income increased $142,000 to $2.77 million from previous quarter and $87,000 from year-ago quarter. Net interest income was driven by lower rates paid on deposits.

Interest expense fell for the 15th straight quarter to $521,000 in the third quarter 2013. Ongoing pricing discipline resulted in an improvement in net interest margin to 4.37%, compared with 4.09% for the prior quarter and 4.14% for the third quarter 2012.

Non-interest income declined $9,000 to $259,000 in the third quarter 2013 on a linked-quarter basis, and $73,000 from the prior year. Non-interest expense was $2.38 million, down $1.12 million from the second quarter 2013 and $133,000 from a year ago.

Provision for loan loss decreased $436,000 from second quarter 2013 and $173,000 from third quarter 2012, reflecting improvement in portfolio trends.

Loans and deposits

Total loans were $222.59 million at Sept. 30, 2013, compared with $216.10 million at June 30, 2013, and $223.72 million at Sept. 30, 2012. The Bank generated $16.56 million in new loans in the third quarter, resulting in net new loans of $6.54 million after charge-offs and loan pay-outs.

For the first nine months of 2013, Carolina Trust Bank booked new loans of $44.96 million. In May this year, Carolina Trust had loan originations of $9.10 million, its second largest monthly production in two years.

Total deposits of $232.98 million were marginally higher from second quarter 2013, but down from $241.14 million for the third quarter 2012, primarily due to a decrease in brokered deposits. Core deposits remained strong, reflecting customer loyalty in the form of checking, savings and certificate of deposit accounts.

Capital

Capital increased in the third quarter 2013. Shareholders' equity improved by $450,000 to $22.97 million as capital ratios improved on a linked-quarter basis. At Sept. 30, 2013, Tier 1 Leverage Ratio was 8.44%, up from 8.24%; Tier 1 Risk-based Capital Ratio was 9.84%, up from 9.80%; and Total Risk-based Capital Ratio was 11.09%, up from 11.06%. Capital levels continue to exceed regulatory requirements for being "well-capitalized."

Asset Quality

Improvement in asset quality accelerated on a linked-quarter and year-over-year basis. Total nonperforming assets declined $597,000, or 6.86%, from second quarter 2013 and $1.98 million, or 19.63%, from a year ago. Nonperforming assets were 3.03% of total assets, compared to 3.28% in the previous quarter and 3.56% in the third quarter 2012.

Non-accrual loans were $4.09 million at Sept. 30, 2013 up slightly on a link-quarter basis, but down $1.87 million, or 31.39%, from prior year. Other Real Estate, or foreclosed property, declined $793,000, or 16.48%, from June 30, 2013, and $109,000 from Sept. 30, 2012. Loans 30 to 89 days past due were $3.32 million at Sept. 30, 2013, down $264,000 from June 30, 2013, but up $566,000 from Sept. 30 2012.

Net loan charge-offs were $474,000 for the third quarter 2013, compared with $1.61 million for the second quarter 2013, and $723,000 for the third quarter 2012. Net loan charge-offs were less than 1% of average loans. Allowance for loan losses to total loans was 1.79%, compared with 1.88% at June 30, 2013 and 1.96% at Sept. 30, 2012.

The Lincolnton, N.C.-based state chartered bank operates seven full service branches in Lincoln, Catawba, Gaston and Rutherford Counties in western North Carolina. It also maintains a loan production office in Hickory, N.C.

Forward-Looking Statement;

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 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; and the impact of competition from traditional or new sources. These and other factors that may emerge could cause decisions and actual results to differ materially from current expectations. Carolina Trust Bank takes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.

Carolina Trust Bank
(Dollars in thousands)
September 30 June 30 March 31 December 31 September 30
2013 2013 2013 2012 2012
Balance Sheet Data:
Total Assets 268,555 265,554 275,597 271,051 283,164
Total Deposits 232,978 232,621 240,589 233,861 241,140
Total Loans 222,594 216,055 215,984 221,480 223,717
Reserve for Loan Loss 3,985 4,060 4,836 4,773 4,383
Total Shareholders Equity 22,973 22,523 24,871 24,935 26,977
(Dollars in thousands, except per share data)
For the three months ended
September 30 June 30 March 31 December 31 September 30
2013 2013 2013 2012 2012
Income and Per Share Data:
Interest Income 3,287 3,162 3,095 3,324 3,374
Interest Expense 521 538 588 648 695
Net Interest Income 2,766 2,624 2,507 2,676 2,679
Provision for Loan Loss 399 835 413 1,100 572
Net Interest Income After Provision 2,367 1,789 2,094 1,576 2,107
Non-interest Income 259 268 251 348 332
Non-interest Expense 2,377 3,500 2,268 2,593 2,511
Income (loss) Before Taxes 249 (1,443) 77 (669) (72)
Income Tax Expense (benefit) -- -- -- -- --
Net Income (loss) 249 (1,443) 77 (669) (72)
Preferred Stock Dividend 49 48 45 (97) 73
Income available (loss) attributable to common shareholders 200 (1,491) 32 (572) (145)
Net Income (loss) Per Common Share:
Basic 0.04 (0.32) 0.01 (0.12) (0.03)
Diluted 0.04 (0.32) 0.01 (0.12) (0.03)
Average Common Shares Outstanding:
Basic 4,634,702 4,634,482 4,634,482 4,634,482 4,634,286
Diluted 4,639,053 4,634,482 4,637,422 4,634,482 4,634,286
September 30 June 30 March 31 December 31 September 30
2013 2013 2013 2012 2012
Capital Ratios:
Tier 1 Leverage Ratio 8.44% 8.24% 8.71% 8.61% 9.14%
Tier 1 Risk-based Capital Ratio 9.84% 9.80% 10.79% 10.60% 11.16%
Total Risk-based Capital Ratio 11.09% 11.06% 12.05% 11.86% 12.41%
Tangible Common Equity 19,585 19,188 21,529 21,581 22,262
Common Shares Outstanding 4,634,482 4,634,482 4,634,482 4,634,482 4,634,482
Book Value Per Common Share 4.23 4.14 4.65 4.66 4.80
Performance Ratios:
Return on Average Assets (%) 0.37% -2.12% 0.11% -0.95% -0.10%
Return on Average Equity (%) 4.32% -23.20% 1.24% -9.93% -1.04%
Net Interest Margin (%) 4.37% 4.09% 4.00% 4.27% 4.14%
Asset Quality:
Delinquent Loans ( 30-89 days ) 3,317 3,581 2,835 3,639 2,751
Delinquent Loans ( 90 days or more ) -- -- -- -- --
Non-accrual Loans 4,087 3,891 9,107 8,494 5,957
OREO and repossessed property 4,018 4,811 3,542 4,169 4,127
Total Nonperforming Assets 8,105 8,702 12,649 12,663 10,084
Restructured Loans 5,247 4,465 4,711 4,983 3,413
Nonperforming Assets to Total Assets 3.02% 3.28% 4.59% 4.67% 3.56%
Nonperforming Assets to Equity Capital & ALLL 30.07% 32.74% 42.58% 42.62% 32.16%
Allowance for Loan Losses to Non-performing Assets 49.17% 46.66% 38.23% 37.69% 43.46%
Allowance for Loan Losses to Total Loans 1.79% 1.88% 2.24% 2.16% 1.96%
Net Loan Charge-Offs 474 1,609 350 773 723
Net Loan Charge-Offs to Average Loans (%) 0.73% 0.73% 0.16% 0.35% 0.34%
Note: Financial information is unaudited.

CONTACT: J. Michael Cline President and CEO Carolina Trust Bank (704) 735-1104Source:Carolina Trust Bank