Carolina Financial Corporation Reports Results for Second Quarter of 2016

Financial Results

Carolina Financial Corporation

• The Company reported net income for the three months ended June 30, 2016 of $2.8 million, or $0.23 per diluted share, as compared to $3.9 million, or $0.41 per diluted share, for the three months ended June 30, 2015.  Net income for the six months ended June 30, 2016 totaled $6.5 million, or $0.54 per diluted share, compared to net income of $6.9 million, or $0.73 per diluted share.  Included in net income for the three months and six months ended June 30, 2016 were pretax merger related expense of $2.8 million and $3.0 million, respectively. 
• Operating earnings for the second quarter of 2016 increased 17.3% to $5.1 million, or $0.42 per diluted share, from $4.4 million, or $0.45 per diluted share, from the second quarter of 2015.  Operating earnings are defined as income before income taxes, excluding loss on extinguishment of debt, net gain or loss on sale of securities, fair value adjustments on interest rate swaps, and merger related expenses, all net of income taxes at the tax effective rate for the period.
• In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payment award transactions, including income tax consequences.  In addition to other changes, the guidance changes the accounting for excess tax benefits and tax deficiencies from generally being recognized in additional paid-in capital to recognition as income tax expense or benefit in the period they occur.  The Company early adopted the new guidance in the second quarter of 2016.  As a result, the Company's income tax expense was reduced by approximately $399,000, or $0.03 per diluted share, in the second quarter of 2016.
• The Company's net interest margin-tax equivalent increased to 3.64% for the second quarter of 2016 compared to 3.53% for the first quarter of 2016 and is primarily due to improved yields in securities and loans.  In the first quarter of 2016, the Company experienced unfavorable prepayment speeds related to its securities portfolio, but experienced favorable prepayment speeds in the second quarter of 2016.  Management does not expect the favorable securities prepayment speeds to continue with a low interest rate environment.  In addition, during the second quarter of 2016, the Company collected a $136,000 early loan payoff fee and experienced some yield improvement related to higher yielding loans acquired from the Congaree merger. 
• The Company reported book value per common share of $12.58 and $11.92 as of June 30, 2016 and December 31, 2015, respectively.  Tangible book value per common share was $11.92 and $11.66 as of June 30, 2016 and December 31, 2015, respectively.
• Effective at the beginning of the second quarter of 2016, the Company tainted its securities held-to-maturity to provide opportunities to maximize its asset utilization. As a result, the securities were moved to available-for-sale at fair value, resulting in an increase to accumulated other comprehensive income of $655,000.
• At June 30, 2016, the Company's regulatory capital ratios exceeded the minimum levels currently required.  Stockholders' equity totaled $155.0 million as of June 30, 2016 compared to $139.9 million at December 31, 2015.

CresCom Bank

• The Bank's net income (excluding Crescent Mortgage Company) was $2.2 million for the three months ended June 30, 2016 compared to $2.8 million for the three months ended June 30, 2015. Net income for the six months ended June 30, 2016 totaled $5.6 million compared to net income of $5.3 million for the six months ended June 30, 2015. Included in net income for the three months and six months ended June 30, 2016 were pretax merger related expense of $2.7 million and $2.8 million, respectively. 
• No provision for loan loss was recorded during the three and six month periods ended June 30, 2016 or 2015.   This was primarily due to continued excellent asset quality as well as net recoveries of $156,000 and $982,000 for the six months ended June 30, 2016 and 2015, respectively.
• The Bank's non-performing assets were 0.45% and 0.47% of total assets at June 30, 2016 and December 31, 2015, respectively.  The Bank added $1.4 million in real estate acquired through foreclosure, net as a result of the Congaree merger.
• Loans receivable-gross grew to $1.1 billion at June 30, 2016 compared to $922.7 million at December 31, 2015. The increase in loans receivable primarily relates to the completed acquisition of Congaree as well as the Bank's focus on commercial lending and residential mortgage lending.
• The number of checking accounts increased at an annualized rate of 10.6%, excluding Congaree checking accounts acquired, since December 31, 2015.  As of June 30, 2016 and December 31, 2015, core deposits, defined as checking, savings and money market, comprised approximately 59.9% and 56.7%, respectively, of total deposits.  Total deposits, excluding Congaree deposits acquired, increased $143.8 million since December 31, 2015.
• The Bank's retail mortgage conforming loan originations increased to $24.6 million for the three months ended June 30, 2016 compared to $15.2 million for the three months ended June 30, 2015.  For the six months ended June 30, 2016, retail mortgage conforming loan originations increased to $42.3 million compared to $32.8 million for the six months ended June 30, 2015. As a result of the increased originations, retail mortgage banking noninterest income increased to $509,000 and $929,000 for the three and six months ended June 30, 2016 compared to $358,000 and $801,000 for the three and six months ended June 30, 2015. Mortgage banking income consists primarily of gain on sale of loans and related fees as well as fair value changes in mortgage banking derivatives.

Crescent Mortgage Company

• Net income for Crescent Mortgage Company, a wholly-owned subsidiary of the Bank, was $919,000 for the three months ended June 30, 2016 compared to $1.3 million for the three months ended June 30, 2015. Net income for the six months ended June 30, 2016 was $1.3 million compared to $2.0 million for the six months ended June 30, 2015.
• The decrease in net income of Crescent Mortgage Company is primarily attributable to the decrease in originations from period to period.  The new regulatory rules related to TILA-RESPA Integrated Disclosures ("TRID") have significantly impacted the mortgage banking industry. Originations for the three months ended June 30, 2016 and 2015 were $200.2 million and $282.3 million, respectively.  Originations for the six months ended June 30, 2016 and 2015 were $387.0 and $507.7 million, respectively. The percentage of originations attributable to refinances were 33.6% for the second quarter of 2016 compared to 33.9% for the second quarter of 2015.

Conference Call

A conference call will be held at 2:00 p.m., Eastern Time on July 29, 2016.  The conference call can be accessed by dialing (855) 218-6998 or (615) 247-5963 and requesting the Carolina Financial Corporation earnings call.  The conference ID number is 43955497.  Listeners should dial in 10 minutes prior to the start of the call.  The live webcast and presentation slides will be available on www.haveanicebank.com under Investor Relations, "Investor Presentations."

A replay of the webcast will be available on www.haveanicebank.com under Investor Relations, "Investor Presentations" shortly following the call.  A replay of the conference call can be accessed approximately three hours after the call by dialing (855) 859-2056 or (404) 537-3406 and requesting conference number 43955497.

About Carolina Financial Corporation

Carolina Financial is the holding company of CresCom Bank, which also owns and operates Atlanta-based Crescent Mortgage Company.  Carolina Financial trades on NASDAQ under the symbol CARO. As of June 30, 2016, Carolina Financial had approximately $1.6 billion in total assets and Crescent Mortgage Company originated loans in 45 states and partners with community banks, credit unions and mortgage brokers.  In 2016, Carolina Financial was ranked #8 on American Banker's 2015 list of "Top 200 Community Banks and Thrifts as Ranked by Three-Year Average ROE", and was added to the Russell 2000 as part of the 2016 Russell indexes reconstitution. In June 2016, Carolina Financial Corporation completed its previously announced merger with Congaree.

Addendum to News Release – Use of Certain Non-GAAP Financial Measures and Forward-Looking Statements

This news release contains financial information determined by methods other than in accordance with generally accepted accounting principles ("GAAP").  Such statements should be read along with the accompanying tables, which provide a reconciliation of non-GAAP measures to GAAP measures.  This news release and the accompanying tables discuss financial measures, such as core deposits, tangible book value, operating earnings and net income related to segments of the Company, which are non-GAAP measures.  We believe that such non-GAAP measures are useful because they enhance the ability of investors and management to evaluate and compare the Company's operating results from period to period in a meaningful manner.  Non-GAAP measures should not be considered as an alternative to any measure of performance as promulgated under GAAP.  Investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company.  Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP.

Please refer to the Non-GAAP reconciliation tables later in this release for additional information.

Forward-Looking Statements

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 include but are not limited to statements with respect to our plans, objectives, expectations and intentions and other statements that are not historical facts, and other statements identified by words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," and "projects," as well as similar expressions.  Such statements are subject to risks, uncertainties, and other factors 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 the Company or any person that the future events, plans, or expectations contemplated by the Company will be achieved.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) the strength of the United States economy in general and the strength of the local economies in which we conduct operations may be different than expected resulting in, among other things, a deterioration in the credit quality or a reduced demand for credit, including the resultant effect on the Company's loan portfolio and allowance for loan losses; (3) 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, which may result in increased credit risk-related losses and expenses; (4) the risk that the preliminary financial information reported herein and our current preliminary analysis will be different when our review is finalized; (5) changes in the U.S. legal and regulatory framework including, but not limited to, the Dodd-Frank Act and regulations adopted thereunder; (6) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) could have a negative impact on the Company; (7) the businesses of the Company and Congaree may not be integrated successfully or such integration may take longer to accomplish than expected; (8) the expected cost savings and any revenue synergies from the acquisition may not be fully realized within the expected timeframes; and (9) disruption from the acquisition may make it more difficult to maintain relationships with clients, associates, or suppliers.  Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in our reports (such as our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the SEC and available at the SEC's Internet site (http://www.sec.gov).  All subsequent written and oral forward-looking statements concerning the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.  We do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

CAROLINA FINANCIAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
									June 30, 2016		December 31, 2015
									(Unaudited)		(Audited)
									(Dollars in thousands)
ASSETS
	Cash and due from banks								$               12,916		10,206
	Interest-bearing cash								27,184		16,421
		Cash and cash equivalents							40,100		26,627
	Securities available-for-sale								345,980		306,474
	Securities held-to-maturity								-		17,053
	Federal funds sold								6,229		-
	Federal Home Loan Bank stock, at cost								7,906		9,919
	Other investments								3,705		3,273
	Derivative assets								3,808		1,945
	Loans held for sale								36,284		41,774
	Loans receivable, gross								1,067,256		922,723
	Allowance for loan losses								(10,297)		(10,141)
		Loans receivable, net							1,056,959		912,582
	Premises and equipment, net								35,252		32,562
	Accrued interest receivable								4,781		4,333
	Real estate acquired through foreclosure, net								3,272		2,374
	Deferred tax assets, net								7,891		5,273
	Mortgage servicing rights								12,400		11,433
	Cash value life insurance								28,553		28,082
	Core deposit intangible								3,884		2,961
	Goodwill								4,266		-
	Other assets								5,114		3,004
		Total assets							$          1,606,384 Werbung Mehr Nachrichten zur CAROLINA FINANCIAL Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 26.04.24 - PR Newswire Datang Intnl Pwr Gen - CONNECTED TRANSACTION ANNOUNCEMENT 26.04.24 - PR Newswire Datang Intnl Pwr Gen - 2023 Annual Report 26.04.24 - PR Newswire Samson Rock Capital LLP - Form 8.3 - Mattioli Woods plc Sehen Sie sich dieses Unternehmen an:    Foto: andreas160578 - Pixabay Rasanter Aufstieg, Branchenrevolution und Jahresumsatz von 50 Mio. $ weiterlesen» Anzeige wo-site-teaser-box-16764_site-teaser-box_2024-04-26_09%253A00%253A00_2024-04-27_09%253A00%253A59