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Carolina Alliance Reports Its Third Quarter Results

SPARTANBURG, S.C., Dec. 3, 2014 (GLOBE NEWSWIRE) -- Carolina Alliance Bank (OTCBB:CRLN) and (OTCQB:CRLN) today reported to its shareholders its third quarter 2014 financial results. Net income available to common shareholders of $5.6 million, or $1.43 per diluted common share, was reported for the nine months ended September 30, 2014, compared to net income available to common shareholders of $0.7 million, or $0.26 per diluted common share, for the nine months ended September 30, 2013. This $4.9 million increase in earnings was largely attributable to the impact of merger-related accounting, particularly the non-operating net bargain purchase gain of $4.3 million related to mark-to-market adjustments to the Forest Commercial Bank ("Forest Commercial") balance sheet as of the merger date of April 5, 2014. Partially offsetting this gain were expenses of approximately $0.6 million, which include merger costs and start-up costs associated with the bank's recently opened branches in Seneca and Anderson, South Carolina.

"We are very pleased with our results to date. We believe the combination of Carolina Alliance, Forest Commercial, and Dave McBride Leasing has created a solid foundation for growth," said Chairman of the Board of Directors Terry Cash. "We fully intend to build on this new foundation to enhance our future performance."

Gross loans and leases increased by $145.1 million to $323.3 million on September 30, 2014 from $178.2 million on September 30, 2013. Of the increase, $123.5 million is attributable to Forest Commercial loans added as of the merger date. Total assets increased by $172.1 million to $416.5 million at September 30, 2014 from $244.4 million at September 30, 2013. Forest Commercial's assets totaled $156.6 million as of the merger date. Total deposits increased to $345.5 million on September 30, 2014 from $202.3 million on September 30, 2013, an increase of $143.2 million. Forest Commercial's deposits totaled $128.1 million as of the merger date.

"The excitement that has occurred throughout 2014 at Carolina Alliance has certainly continued through the third quarter," said John S. Poole, Carolina Alliance Chief Executive Officer. "The board of directors and senior staff are working hard on strategic planning efforts at several levels to ensure that the bank remains a solid performer in the future."

Total shareholders' equity on September 30, 2014 was $51.6 million, or 12.4% of total assets. Book value per common share was $10.22 as of September 30, 2014. The bank's capital levels continue to exceed the levels required by regulatory standards to be classified as "well capitalized," which is the highest of the five regulator-defined capital categories used to describe an institution's capital strength.

Non-performing assets as a percentage of total assets at September 30, 2014 increased from a year prior, in part due to real estate acquired in settlement of loans of $0.7 million absorbed in the merger. Non-performing assets were $3.1 million at September 30, 2014, or 0.74% of total assets, as compared to $1.7 million, or 0.69% of total assets, at September 30, 2013.

At September 30, 2014, the allowance for loan losses stood at $3.3 million, which is 1.03% of gross loans. Loans charged off for the nine months ended September 30, 2014 totaled $0.7 million, which represents 0.21% of gross loans.

"We are focused on the unified and customer-oriented delivery of products and services across the recently combined operations," said John Kimberly, Carolina Alliance President. "While our team continues to work on improving systems and processes every day, we are extremely pleased with our progress to date."

For a copy of the letter to shareholders reporting in further detail our third quarter 2014 financial results, please see "Shareholder Communications" under the "About Us" tab located on our website at www.carolinaalliancebank.com. For other information about Carolina Alliance, please call (864) 208-BANK (2265) or visit our website.

Note

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 are subject to risks, uncertainties, and other factors, such as the businesses of Carolina Alliance Bank and Forest Commercial Bank may not be integrated successfully or such integration may take longer to accomplish than expected, the expected cost savings and any revenue synergies from the merger may not be fully realized within the expected timeframes, disruption from the merger may make it more difficult to maintain relationships with clients, associates, or suppliers, a continued downturn in the economy, competitive pressures among depository and other financial institutions, 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, and changes in the U.S. legal and regulatory framework, including the effect of recent financial reform legislation on the banking industry, any of 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 us or any person that the future events, plans, or expectations contemplated by us will be achieved. All subsequent written and oral forward-looking statements concerning us or any person acting on our behalf is expressly qualified in its entirety by the cautionary statements above. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, to reflect circumstances or events that occur after the date the forward-looking statements are made.

CONTACT: John S. Poole (864) 542-2615 John D. Kimberly (828) 255-5711

Source:Carolina Alliance Bank