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Carolina Trust Bank Posts 1Q 2015 Profit as Company Expands Franchise

LINCOLNTON, N.C., April 20, 2015 (GLOBE NEWSWIRE) -- Carolina Trust Bank (Nasdaq:CART) today reported net income available to common shareholders of $117,000 for the first quarter 2015 or $0.03 per diluted common share – another in a string of profitable quarters despite salary and overhead expenses related to expansion and loan portfolio growth.

For the quarter ended December 31, 2014, the company reported net income available to common shareholders of $5.12 million, or $1.10 per diluted common share, including a one-time tax benefit of $4.82 million resulting from the bank's reversal of its deferred tax asset valuation allowance.

Net income available to common shareholders was $117,000 for the first quarter 2015 or $0.03 per diluted share. For the quarter ended March 31, 2014, net income available to common shareholders was $502,000 or $0.11 per diluted share. The Bank recorded income tax expense of $125,000 for the first quarter of 2015 and no income tax expense for the first quarter of 2014.

"The reversal of our valuation allowance last quarter was a watershed moment that solidified our return to profitability and earnings growth and substantially improved key measures such as book value and shareholders' equity," said President and CEO Jerry L.Ocheltree. "In concert with this anticipated event, our strategy has been to grow and improve our franchise.

"In the past year, we added 15 new employees, converted our Hickory loan production office into a full-service branch, and opened a new branch in Lake Lure and a loan production branch in Mooresville," Ocheltree said. "We've hired lenders who are making a significant difference. To reiterate, talent retention and acquisition are key components of our ongoing strategy, although we will take time to allow our franchise to digest our expansion before making any further major moves. Momentum is good."

Selected Financial Highlights

Year-Over-Year

March 31, 2015, compared to March 31, 2014

  • March 31, 2015 earnings of $117,000 decreased $385,000 from March 31, 2014
  • Total loans increased $36.03 million or 16.24%
  • Total deposits increased $29.07 million or 12.60%
  • Net interest margin was 4.19% compared to 4.35%
  • Net interest income after provision for loan loss increased $216,000 or 8.12%
  • Total nonperforming assets decreased $947,000 or 13.85%
  • Total shareholders' equity increased $7.12 million or 30.87%

Linked-Quarter

March 31, 2015, compared to December 31, 2014

Income Statement

  • Total revenues, less interest expense, increased $43,000 from December 31, 2014
    • Interest income increased $119,000 or 3.61%
    • Non-interest income decreased $39,000 or 14.18%
    • Interest expense increased $37,000 or 7.43%
    • Non-interest expense increased $102,000 or 3.76%

Balance Sheet

  • Total assets of $305.55 million increased $12.28 million or 4.19%
  • Total deposits of $259.71 million increased $22.53 million or 9.50%
  • Total loans of $257.92 million increased $13.27 million or 5.43%
  • Reserve for loan loss of $3.95 million decreased $48,000 or 1.20%
  • Total shareholders' equity of $30.19 million increased $101,000 or 0.34%

Credit Quality

  • Total nonperforming assets decreased $323,000 or 5.20%
  • Other Real Estate Owned increased $280,000 or 13.67%
  • Non-accrual loans decreased $541,000 or 13.56%
  • Net loan charge-offs to average loans were 0.02%

Carolina Trust Bank continued to exceed "well-capitalized" requirements for each of the four primary capital levels monitored by state and federal regulators. As of March 31, 2015, Common equity tier 1 capital ratio was 8.07%; Tier 1 capital ratio was 9.00%; Total capital ratio was 10.25%; and Tier 1 leverage ratio was 9.12%. Book value per common share increased to $5.89 from $5.88 the previous quarter and from $4.36 at March 31, 2014.

Revenue

Total revenues, less interest expense, increased $43,000 from the previous quarter and $165,000 from the quarter ended March 31, 2014. Interest income was $3.41 million compared to $3.29 million from the prior quarter and $3.19 million for the same period a year ago. Net interest income after loan loss provision increased $82,000 from the fourth quarter 2014 and $216,000 from a year ago.

Non-interest expense increased $102,000 in the first quarter 2015 and $462,000 from March 31, 2014, primarily due to salaries and overhead expenses related to the opening of a new branch in Lake Lure, the upgrade of the Hickory loan office into a full-service branch, and a new loan production office in Mooresville. On a year-over-year basis, commercial and retail lenders booked new loans of $36.03 million, an increase of 16.24% from March 31, 2014.

Balance Sheet

Total assets of $305.55 million at March 31, 2015, increased $12.28 million from December 31, 2014, and $39.00 million from March 31, 2014. Total deposits were $259.71 at March 31, 2015, compared to 237.18 million at December 31, 2014, and $230.65 million at March 31, 2014. Total loans of $257.92 at March 31, 2015, compared to $244.65 at December 31, 2014, and $221.89 million at March 31, 2014. Reserve for loan loss was $3.95 million at March 31, 2015, compared to $4.00 million at December 31, 2014, and $4.17 million at March 31, 2014.

Asset Quality

Total nonperforming assets of $5.89 million at March 31, 2015 decreased $323,000 or 5.20% from December 31, 2014, and $947,000 or 13.85% from March 31, 2014. Non-accrual loans of $3.45 million at March 31, 2015, declined $541,000 from December 31, 2014, and $153,000 from March 31, 2014. Other Real Estate Owned increased $280,000 from December 31, 2014, but declined $906,000 from March 31, 2014. Nonperforming assets were 1.93% of total assets at March 31, 2015, compared to 2.12% of total assets at December 31, 2014, and 2.57% at March 31, 2014. Allowance for loan losses to total loans was 1.53% at March 2014, compared to 1.64% at December 31, 2014, and 1.88% at March 31, 2014.

Performance Ratios

Annualized return on average assets was 0.24% compared to 0.84% for quarter ended March 31, 2014. Annualized return on average equity was 2.35% compared to 9.83% at March 31, 2014. Carolina Trust Bank is a full service state chartered bank headquartered in Lincolnton, N.C., operating nine full service branches in Lincoln, Catawba, Gaston and Rutherford Counties in western North Carolina and a loan production office in Mooresville, 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)
March 31 December 31 September 30 June 30 March 31
2015 2014 2014 2014 2014
Balance Sheet Data:
Total Assets $ 305,545 $ 293,267 $ 270,072 $ 267,618 $ 266,549
Total Deposits $ 259,711 $ 237,176 $ 231,600 $ 230,841 $ 230,646
Total Loans $ 257,919 $ 244,646 $ 227,933 $ 222,529 $ 221,887
Reserve for Loan Loss $ 3,954 $ 4,002 $ 4,165 $ 4,143 $ 4,165
Total Shareholders Equity $ 30,189 $ 30,088 $ 24,650 $ 23,969 $ 23,068
(Dollars in thousands, except per share data)
For the three months ended
March 31 December 31 September 30 June 30 March 31
2015 2014 2014 2014 2014
Income and Per Share Data:
Interest Income $ 3,412 $ 3,293 $ 3,292 $ 3,269 $ 3,187
Interest Expense 535 498 487 484 481
Net Interest Income 2,877 2,795 2,805 2,785 2,706
Provision for Loan Loss -- -- -- (125) 45
Net Interest Income After Provision 2,877 2,795 2,805 2,910 2,661
Non-interest Income 236 275 232 247 242
Non-interest Expense 2,812 2,710 2,300 2,488 2,350
Income Before Taxes 301 360 737 669 553
Income Tax Expense (benefit) 125 (4,820) -- -- --
Net Income 176 5,180 737 669 553
Preferred Stock Dividend 59 59 59 59 51
Income available to common shareholders $ 117 $ 5,121 $ 678 $ 610 $ 502
Net Income Per Common Share:
Basic $ 0.03 $ 1.10 $ 0.15 $ 0.13 $ 0.11
Diluted $ 0.03 $ 1.10 $ 0.15 $ 0.13 $ 0.11
Average Common Shares Outstanding:
Basic 4,643,666 4,635,215 4,635,172 4,635,097 4,634,894
Diluted 4,680,116 4,669,888 4,677,837 4,645,291 4,649,981
(Dollars in thousands, except per share data)
March 31 December 31 September 30 June 30 March 31
2015 2014 2014 2014 2014
Capital Ratios:
Common equity tier 1 capital ratio 8.07% n/a n/a n/a n/a
Tier 1 capital ratio 9.00% n/a n/a n/a n/a
Total Capital ratio 10.25% n/a n/a n/a n/a
Tier 1 leverage ratio 9.12% 9.03% 9.10% 8.92% 8.51%
Tangible Common Equity $ 27,385 $ 27,266 $ 21,805 $ 21,107 $ 20,187
Common Shares Outstanding 4,645,755 4,635,422 4,635,172 4,635,172 4,634,952
Book Value Per Common Share $ 5.89 $ 5.88 $ 4.70 $ 4.55 $ 4.36
Performance Ratios (annualized):
Return on Average Assets (%) 0.24% 7.35% 1.08% 1.00% 0.84%
Return on Average Equity (%) 2.35% 78.68% 11.94% 11.42% 9.83%
Net Interest Margin (%) 4.19% 4.20% 4.36% 4.42% 4.35%
Asset Quality:
Delinquent Loans ( 30-89 days accruing interest) $ 2,813 $ 2,631 $ 2,569 $ 2,219 $ 1,943
Delinquent Loans ( 90 days or more ) 112 174 -- -- --
Non-accrual Loans $ 3,450 $ 3,991 $ 3,082 $ 2,767 $ 3,603
OREO and repossessed property 2,328 2,048 2,261 2,271 3,234
Total Nonperforming Assets $ 5,890 $ 6,213 $ 5,343 $ 5,038 $ 6,837
Restructured Loans $ 4,436 $ 4,871 $ 4,765 $ 4,343 $ 5,546
Nonperforming Assets to Total Assets 1.93% 2.12% 1.98% 1.88% 2.57%
Nonperforming Assets to Equity Capital & ALLL 17.25% 18.23% 18.54% 17.92% 25.11%
Allowance for Loan Losses to Non-performing Assets 67.13% 64.41% 77.95% 82.24% 60.92%
Allowance for Loan Losses to Total Loans 1.53% 1.64% 1.83% 1.86% 1.88%
Net Loan Charge-Offs (recoveries) $ 48 $ 162 $ (22) $ (102) $ (54)
Net Loan Charge-Offs to Average Loans (%) 0.02% 0.07% -0.01% -0.05% -0.02%
Note: Financial information is unaudited.

CONTACT: Jerry L. Ocheltree President and CEO Carolina Trust Bank (704) 735-1104Source:Carolina Trust Bank