LINCOLNTON, N.C., July 17, 2014 (GLOBE NEWSWIRE) -- Carolina Trust Bank (Nasdaq:CART) today reported net income to common shareholders of $610,000 for the second quarter 2014 or $0.13 per diluted common share, compared to a net loss of $1.49 million for the same period a year ago or $0.32 per diluted common share. Excluding payment of dividends on preferred shares, the bank realized net income of $669,000.
On a linked-quarter basis, results compared to net income of $502,000 for the quarter ended March 31, 2014 or $0.11 per diluted common share. For the first six months, Carolina Trust Bank had net income of $1.11 million or $0.24 per diluted common share as steady loan growth and favorable trends in asset quality and net interest margin marked ongoing progress in 2014. Net recovery of previously charged-off loans favorably impacted loan loss provisions and also contributed to second quarter 2014 profits.
"The biggest difference this year is that we've been able to get our arms around asset quality, instead of spending so much time putting out fires," said President and CEO Jerry L. Ocheltree. "The entire financial industry has been beaten down. Now that we have some momentum, we can get back to the business of banking."
Selected Financial Highlights
Year-Over-Year Comparisons
June 30, 2014 compared to June 30, 2013
- Net interest income up $161,000 or 6.14%
- Interest expense decreased $54,000 or 10.04%
- Non-interest income down $21,000 or 7.84%
- Non-interest expense decreased $1.01 million or 28.91%
- Net interest margin was 4.42% compared to 4.09%
- Net interest income after provision for loan losses increased $1.12 million or 62.66%
Linked-Quarter Comparisons
June 30, 2014 compared to March 31, 2014
Income Statement
-
Total revenues, less interest expense, up $84,000 from March 31, 2014
-- Net interest income increased $79,000
-- Net interest income after provision for loan losses increased $249,000
-- Interest expense increased $3,000
-- Non-interest expense increased $138,000
Balance Sheet
- Total deposits of $230.84 million increased $195,000
- Total loans of $222.53 million increased $642,000
- Total assets of $267.62 million were up $1.07 million
- Reserve for loan losses of $4.14 million decreased $22,000
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Credit quality continued favorable trends in the second quarter 2014
-- Total nonperforming assets decreased $1.80 million or 26.31%
-- Other Real Estate Owned decreased $963,000 or 29.78%
-- Non-accrual loans decreased $836,000 or 23.20%
-- Net recoveries of loans previously charged-off were $102,000 or 0.05% of average total loans - Capital levels, exceeding "well-capitalized" requirements, improved from March 31, 2014 in each of the three primary categories monitored by state and federal regulators: Tier 1 Leverage Ratio was 8.92% compared to 8.51%; Tier 1 Risk-based Capital Ratio was 10.51% compared to 10.01%; and Total Risk-based Capital Ratio was 11.77% compared to 11.27%.
Revenue
Asset quality and net interest margin drove profits for the second straight quarter as troubled assets continued their downward trends. Carolina Trust Bank released $125,000 from loan loss reserves in the second quarter 2014 primarily as a result of $102,000 in net recoveries of previously charged-off loans. The bank also continued to benefit from steady loan growth and improving net interest income. Over the past two quarters, the bank had net recoveries of $156,000 of loans previously charged-off, a reflection of declining nonperforming assets over the past several quarters.
Despite a moderate rise in interest expense, net interest margin improved to 4.42% from 4.35% on a linked-quarter basis, and from 4.09% for the same period last year, primarily due to management's disciplined approach to deposit pricing and increased earnings on investment securities.
Balance Sheet
Total shareholder equity of $23.97 million at June 30, 2014 increased $901,000 from March 31, 2014, and $1.45 million from June 30, 2013. Total deposits were $230.84 million at June 30, 2014, compared to $230.65 million at March 31, 2014. Total loans of $222.53 million increased by $642,000 from March 31, 2014, and $6.50 million from June 30, 2013. At June 30, 2014, total assets were $267.62 million, compared to $266.55 million for the quarter ended March 31, 2014, and $265.55 million for the quarter ended June 30, 2013. Reserve for loan losses decreased $22,000 to $4.14 million at June 30, 2014 from March 31, 2014.
Asset Quality
Marked improvement in overall asset quality was a key driver of net gains in the second and first quarters 2014. Total nonperforming assets were $5.04 million at June 30, 2014, down 26.31% from March 31, 2014, and 42.11% from June 30, 2013. Other Real Estate Owned decreased 29.78% from March 31, 2014, and 52.80% from June 30, 2013. Nonperforming assets were 1.88% of total assets at June 30, 2014, compared to 2.57% at March 31, 2014, and 3.28% at June 30, 2013. Nonperforming assets to equity capital and allowance for loan and lease losses declined to 17.92% at June 30, 2014, from 25.11% at March 31, 2014, and 32.74% at June 30, 2013.
Delinquent loans 30 to 89 days past due were $2.22 million at June 30, 2014, up $276,000 from March 31, 2014, but down $1.36 million from June 30, 2013. Non-accrual loans were $2.77 million at June 30, 2014, compared to $3.60 million at March 31, 2014, and $3.89 million at June 30, 2013.
Performance Ratios
Annualized return on average assets was 1.00% for the quarter ended June 30, 2014, compared to 0.84% for the quarter ended March 31, 2014, and -2.12% for the quarter ended June 30, 2013. Return on average equity was 11.42% for the quarter ended June 30, 2014, compared to 9.83% for the quarter ended March 31, 2014, and -23.20 for the quarter ended June 30, 2013.
Carolina Trust Bank is a full service state chartered bank headquartered in Lincolnton, N.C., operating seven full service branches in Lincoln, Catawba, Gaston and Rutherford Counties in western North Carolina and 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) | |||||
|
June 30 2014 |
March 31 2014 |
December 31 2013 |
September 30 2013 |
June 30 2013 |
|
| Balance Sheet Data: | |||||
| Total Assets | $ 267,618 | $ 266,549 | $ 266,435 | $ 268,555 | $ 265,554 |
| Total Deposits | $ 230,841 | $ 230,646 | $ 228,885 | $ 232,978 | $ 232,621 |
| Total Loans | $ 222,529 | $ 221,887 | $ 223,891 | $ 222,594 | $ 216,055 |
| Reserve for Loan Loss | $ 4,143 | $ 4,165 | $ 4,066 | $ 3,985 | $ 4,060 |
| Total Shareholders Equity | $ 23,969 | $ 23,068 | $ 22,256 | $ 22,973 | $ 22,523 |
| (Dollars in thousands, except per share data) | |||||
| For the three months ended | |||||
|
June 30 2014 |
March 31 2014 |
December 31 2013 |
September 30 2013 |
June 30 2013 |
|
| Income and Per Share Data: | |||||
| Interest Income | $ 3,269 | $ 3,187 | $ 3,270 | $ 3,287 | $ 3,162 |
| Interest Expense | 484 | 481 | 492 | 521 | 538 |
| Net Interest Income | 2,785 | 2,706 | 2,778 | 2,766 | 2,624 |
| Provision for Loan Loss | (125) | 45 | 637 | 399 | 835 |
| Net Interest Income After Provision | 2,910 | 2,661 | 2,141 | 2,367 | 1,789 |
| Non-interest Income | 247 | 242 | 241 | 259 | 268 |
| Non-interest Expense | 2,488 | 2,350 | 2,713 | 2,377 | 3,500 |
| Income (loss) Before Taxes | 669 | 553 | (331) | 249 | (1,443) |
| Income Tax Expense (benefit) | -- | -- | -- | -- | -- |
| Net Income (loss) | 669 | 553 | (331) | 249 | (1,443) |
| Preferred Stock Dividend | 59 | 51 | 49 | 49 | 48 |
| Income available (loss attributable) to common shareholders | $ 610 | $ 502 | $ (380) | $ 200 | $ (1,491) |
| Net Income (loss) Per Common Share: | |||||
| Basic | $ 0.13 | $ 0.11 | $ (0.08) | $ 0.04 | $ (0.32) |
| Diluted | $ 0.13 | $ 0.11 | $ (0.08) | $ 0.04 | $ (0.32) |
| Average Common Shares Outstanding: | |||||
| Basic | 4,635,097 | 4,634,894 | 4,634,702 | 4,634,702 | 4,634,482 |
| Diluted | 4,645,291 | 4,649,981 | 4,634,702 | 4,639,053 | 4,634,482 |
|
June 30 2014 |
March 31 2014 |
December 31 2013 |
September 30 2013 |
June 30 2013 |
|
| Capital Ratios: | |||||
| Tier 1 Leverage Ratio | 8.92% | 8.51% | 8.24% | 8.44% | 8.24% |
| Tier 1 Risk-based Capital Ratio | 10.51% | 10.01% | 9.54% | 9.84% | 9.80% |
| Total Risk-based Capital Ratio | 11.77% | 11.27% | 10.80% | 11.09% | 11.06% |
| Tangible Common Equity | $ 21,107 | $ 20,187 | $ 19,358 | $ 20,072 | $ 19,614 |
| Common Shares Outstanding | 4,635,172 | 4,634,952 | 4,634,702 | 4,634,702 | 4,634,482 |
| Book Value Per Common Share | $ 4.55 | $ 4.36 | $ 4.18 | $ 4.33 | $ 4.23 |
| Performance Ratios: | |||||
| Return on Average Assets (%) | 1.00% | 0.84% | -0.49% | 0.37% | -2.12% |
| Return on Average Equity (%) | 11.42% | 9.83% | -5.78% | 4.32% | -23.20% |
| Net Interest Margin (%) | 4.42% | 4.35% | 4.37% | 4.37% | 4.09% |
| Asset Quality: | |||||
| Delinquent Loans ( 30-89 days accruing interest) | $ 2,219 | $ 1,943 | $ 2,219 | $ 3,317 | $ 3,581 |
| Delinquent Loans ( 90 days or more ) | -- | -- | 517 | -- | -- |
| Non-accrual Loans | $ 2,767 | $ 3,603 | $ 3,286 | $ 4,087 | $ 3,891 |
| OREO and repossessed property | 2,271 | 3,234 | 3,908 | 4,018 | 4,811 |
| Total Nonperforming Assets | $ 5,038 | $ 6,837 | $ 7,711 | $ 8,105 | $ 8,702 |
| Restructured Loans | $ 4,343 | $ 5,546 | $ 4,219 | $ 5,247 | $ 4,465 |
| Nonperforming Assets to Total Assets | 1.88% | 2.57% | 2.89% | 3.02% | 3.28% |
| Nonperforming Assets to Equity Capital & ALLL | 17.92% | 25.11% | 29.29% | 30.07% | 32.74% |
| Allowance for Loan Losses to Non-performing Assets | 82.24% | 60.92% | 52.73% | 49.17% | 46.66% |
| Allowance for Loan Losses to Total Loans | 1.86% | 1.88% | 1.82% | 1.79% | 1.88% |
| Net Loan Charge-Offs (recoveries) | $ (102) | $ (54) | $ 555 | $ 474 | $ 1,609 |
| Net Loan Charge-Offs to Average Loans (%) | -0.05% | -0.02% | 0.25% | 0.21% | 0.73% |
| Note: Financial information is unaudited. | |||||