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Carolina Trust Bank Reports Profit for First Quarter 2013

'Economy continues to show signs of recovery; loan production strong'

LINCOLNTON, N.C., April 26, 2013 (GLOBE NEWSWIRE) -- Carolina Trust Bank (Nasdaq:CART) today reported net income of $32,000 for the quarter ended March 31, 2013, or $0.01 per diluted common share available to common shareholders, compared to net income of $562,000 for the same period in 2012, or $0.12 per diluted common share available to common shareholders. Excluding payment of dividends on preferred shares, the bank realized net income of $77,000 for the first quarter of 2013.

On a link-quarter basis, first-quarter results compared to a net loss of $572,000 at Dec. 31, 2012, or $0.12 per diluted common share attributable to common shareholders. Though earnings were affected by a loan loss provision of $413,000, the allowance set aside for problem loans was the bank's lowest in four quarters.

"The economy continues to show signs of recovery and our loan production is strong. This past quarter we booked $12.3 million in new loans; we also have a significant number of loans in our pipeline," said President and CEO Mike Cline.

"In the past few years we have developed a reliable income stream that has provided stability in a difficult economic climate," Cline said. "The strength of our core fundamentals is the primary reason we continue to make progress and maintain strong capital levels."

First Quarter 2013 Financial Highlights

Balance Sheet

  • Total assets were $275.60 million at March 31, 2013, compared to $271.05 million at Dec. 31, 2012, and $276.37 at March 31, 2012.
  • Deposits totaled $240.59 million at March 31, 2013, compared to $233.86 million at Dec. 31, 2012, and $231.92 million at March 31, 2012.
  • Total loans were $215.98 at March 31, 2013, compared to $221.48 million at Dec. 31, 2012, and $217.88 million at March 31, 2012.
  • Total Shareholders' Equity was $24.87 million at March 31, 2013, compared to $24.94 million at Dec. 31, 2012, and $26.57 million at March 31, 2012.

Income Statement

  • Total revenues, less interest expense, were $2.76 million in the first quarter of 2013, compared to $3.02 million at Dec. 31, 2012, and $2.77 million at March 31, 2012.
  • Net interest income was $2.51 million in the first quarter of 2013, down from $2.68 million at Dec. 31, 2012, but essentially flat from the same period a year ago.
  • Interest expense in the first quarter of 2013 was $588,000, compared to $648,000 at Dec. 31, 2012, and $791,000 at March 31, 2012.
  • Net Interest margin was 4.00% at March 31, 2013, compared to 4.27% at Dec. 31, 2012, and 3.99% at March 31, 2012.

Credit Quality

  • Total nonperforming assets were $12.65 million at March 31, 2013, compared to $12.66 million at Dec. 31, 2012, and $10.75 million at March 31, 2012.
  • Nonperforming assets to total assets were 4.59% at March 31, 2013, compared to 4.67% at Dec. 31, 2012, and 3.89% at March 31, 2012.
  • Non-accrual loans were $9.11 million at March 31, 2013, compared to $8.50 million at Dec. 31, 2012, and $6.29 million at March 31, 2012.
  • Net loan charge-offs were $350,000 at March 31, 2013, compared to $773,000 at Dec. 31, 2012, and $172,000 for the quarter ended March 31, 2012.

Review of Balance Sheet

Total assets of $275.60 million at March 31, 2013, increased by $4.55 million from Dec. 31, 2012, but declined marginally from $276.37 million at March 31, 2012. Total deposits increased to $240.59 million in the first quarter of 2013, up $6.73 million from Dec. 31, 2012, and $8.67 million from March 31, 2012. Total loans were $215.98 million at March 31, 2013, down $5.50 million from the previous quarter, due primarily to early pay-offs and the transfer of problems loans to Other Real Estate Owned.

Carolina Trust Bank continues to maintain strong capital levels that exceed regulatory requirements for being "well-capitalized." At March 31, 2013, the bank reported Tier 1 Leverage Ratio of 8.71%, Tier 1 Risk-based Capital Ratio of 10.79%, and Total Risk-based Capital Ratio of 12.05%.

Review of Income Statement

Net interest margin fell slightly to 4.00% on a link-quarter basis, due primarily to competitive pricing of loans in the marketplace. However, ongoing management of funding costs continued to contribute to the strength of the bank's margin. Interest expense, which has trended favorably for 13 straight quarters, declined $60,000 from Dec. 31, 2012, and $203,000 from March 31, 2012.

Net interest income was $2.51 million in the first quarter of 2013, down $169,000 from the previous quarter, but essentially flat from the quarter ended March 31, 2012. Non-interest income of $251,000 in the first quarter of 2013 declined $97,000 from Dec. 31, 2012, and $8,000 from March 31, 2012. Non-interest expense trended favorably lower in the first quarter of 2013 to $2.27 million, down $325,000 from the previous quarter, but up $309,000 from March 31, 2012. Provision for loan loss was $413,000 for the quarter ended March 31, 2013, down $687,000 from Dec. 31, 2012, but up $189,000 from March 31, 2012.

Review of Credit Quality

Total nonperforming assets, which include foreclosed property and non-accrual loans, were $12.65 million at March 31, 2013, down slightly from the $12.66 million reported at Dec. 31, 2012, but up $1.90 million from a year ago. Allowance for loan losses to nonperforming assets were 38.23% at March 31, 2013, slightly higher than 37.69% at Dec. 31, 2012, but down from 41.09% at March 31, 2012.

Loans 30 to 89 days past due were $2.84 million at March 31, 2013, declining $804,000 from Dec. 31, 2012, and $1.27 million from March 31, 2012. Non-accrual loans were $9.11 million at March 31, 2013, compared to $8.49 million at Dec. 31, 2012, and $6.29 million at March 31, 2012. Property held in foreclosure declined to $3.54 million in the first quarter of 2013, from $4.17 million at Dec. 31, 2012, and from $4.46 million at March 31, 2012. On a year-over-year basis, Carolina Trust reduced the carrying amount of foreclosed property by $917,000.

Net loan charge-offs declined to $350,000 for the quarter ended March 31, 2013, down $423,000 from the quarter ended Dec. 31, 2012, but up $179,000 from the quarter ended March 31, 2012. Net loan charge-offs to average loans was 0.16% for the quarter ended March 31, 2013, compared to 0.35% for the quarter ended Dec. 31, 2012, and 0.08% for the quarter ended March 31, 2012.

Carolina Trust Bank is a full service state chartered bank headquartered in Lincolnton, N.C., operating six full service branches in Lincoln, Catawba and Gaston Counties in western North Carolina and loan production offices in Forest City, NC and 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)
March 31 December 31 September 30 June 30 March 31
2013 2012 2012 2012 2012
Balance Sheet Data:
Total Assets 275,597 271,051 283,164 283,829 276,365
Total Deposits 240,589 233,861 241,140 239,883 231,924
Total Loans 215,984 221,480 223,717 223,357 217,875
Reserve for Loan Loss 4,836 4,773 4,383 4,534 4,417
Total Shareholders Equity 24,871 24,935 26,977 27,004 26,566
(Dollars in thousands, except per share data)
For the three months ended
March 31 December 31 September 30 June 30 March 31
2013 2012 2012 2012 2012
Income and Per Share Data:
Interest Income 3,095 3,324 3,374 3,339 3,299
Interest Expense 588 648 695 742 791
Net Interest Income 2,507 2,676 2,679 2,597 2,508
Provision for Loan Loss 413 1,100 572 471 224
Net Interest Income After Provision 2,094 1,576 2,107 2,126 2,284
Non-interest Income 251 348 332 342 259
Non-interest Expense 2,268 2,593 2,511 2,094 1,959
Income (loss) Before Taxes 77 (669) (72) 374 584
Income Tax Expense (benefit) -- -- -- -- --
Net Income (loss) 77 (669) (72) 374 584
Preferred Stock Dividend 45 (97) 73 73 22
Income available (loss) attributable to common shareholders 32 (572) (145) 301 562
Net Income (loss) Per Common Share:
Basic 0.01 (0.12) (0.03) 0.07 0.12
Diluted 0.01 (0.12) (0.03) 0.07 0.12
Average Common Shares Outstanding:
Basic 4,634,482 4,634,482 4,634,286 4,634,286 4,634,262
Diluted 4,637,422 4,634,482 4,634,286 4,634,286 4,634,262
March 31 December 31 September 30 June 30 March 31
2013 2012 2012 2012 2012
Capital Ratios:
Tier 1 Leverage Ratio 8.71% 8.61% 9.14% 9.33% 9.49%
Tier 1 Risk-based Capital Ratio 10.79% 10.60% 11.16% 11.20% 11.35%
Total Risk-based Capital Ratio 12.05% 11.86% 12.41% 12.46% 12.61%
Tangible Common Equity 21,529 21,581 22,262 22,285 21,509
Common Shares Outstanding 4,634,482 4,634,482 4,634,482 4,634,482 4,634,262
Book Value Per Common Share 4.65 4.66 4.80 4.81 4.64
Performance Ratios:
Return on Average Assets (%) 0.11% -0.95% -0.10% 5.40% 0.87%
Return on Average Equity (%) 1.24% -9.93% -1.04% 5.57% 8.91%
Net Interest Margin (%) 4.00% 4.27% 4.14% 3.99% 3.99%
Asset Quality:
Delinquent Loans ( 30-89 days ) 2,835 3,639 2,751 4,599 4,102
Delinquent Loans ( 90 days or more ) -- -- -- -- 1
Non-accrual Loans 9,107 8,494 5,957 6,739 6,290
OREO and repossessed property 3,542 4,169 4,127 4,876 4,459
Total Nonperforming Assets 12,649 12,663 10,084 11,615 10,750
Restructured Loans 4,711 4,983 3,413 3,229 4,106
Nonperforming Assets to Total Assets 4.59% 4.67% 3.56% 4.09% 3.89%
Nonperforming Assets to Equity Capital & ALLL 42.58% 42.62% 32.16% 36.83% 34.70%
Allowance for Loan Losses to Non-performing Assets 38.23% 37.69% 43.46% 39.04% 41.09%
Allowance for Loan Losses to Total Loans 2.24% 2.16% 1.96% 2.03% 2.03%
Net Loan Charge-Offs 350 773 761 355 172
Net Loan Charge-Offs to Average Loans (%) 0.16% 0.35% 0.34% 0.16% 0.08%
Note: Financial information is unaudited.

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