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Carolina Financial Corp (CARO) SEC Filing 10-Q Quarterly report for the period ending Friday, March 31, 2017

Carolina Financial Corp

CIK: 870385 Ticker: CARO

Exhibit 99.1

 

Carolina Financial Corporation Reports Results for First Quarter of 2017

NEWS RELEASE – For Release April 24, 2017, 4:00PM

 

For More Information, Contact:

William A. Gehman III, EVP and CFO, 843.723.7700

 

Charleston, S.C., April 24, 2017 - Carolina Financial Corporation (NASDAQ: CARO) today announced financial results for the first quarter of 2017.

 

Operational highlights for the three months ended March 31, 2017 include:

 

·On January 25, 2017, the Company closed a public offering of 1.8 million shares of its common stock with net proceeds of approximately $47.7 million.
·On March 18, 2017, the Company closed its previously announced acquisition of Greer Bancshares Incorporated, the holding company for Greer State Bank, (“Greer”) with the operational conversion completed in April 2017. Excluding purchase accounting adjustments, total assets of Greer were $382.7 million, total loans receivable were $205.2 million and total deposits were $311.4 million as of the closing date.

 

Financial highlights at and for the three months ended March 31, 2017, include:

 

·Net income for the first quarter 2017 increased 34.6% to $4.9 million, or $0.35 per diluted share, from $3.6 million, or $0.30 per diluted share for the first quarter of 2016.
·Operating earnings for the first quarter of 2017, which excludes certain non-operating income and expenses, increased 56.1% to $5.7 million, or $0.41 per diluted share, from $3.7 million, or $0.31 per diluted share, from the first quarter of 2016.
·Performance ratios Q1 2017 compared to Q1 2016:
oReturn on average assets improved to 1.11% compared to 1.03%.
oOperating return on average assets improved to 1.30% compared to 1.04%.
oReturn on tangible equity was 9.98% compared to 10.53% for the first quarter.
oOperating return on tangible equity improved to 11.70% compared to 10.65%.
·Loans receivable, excluding Greer loans acquired, grew at an annualized rate of 15.7%, or $46.4, million since December 31, 2016.
·Nonperforming assets to total assets were 0.34% at March 31, 2017 compared to 0.40% at December 31, 2016.
·Total deposits, excluding Greer deposits acquired, increased $35.6 million since December 31, 2016. Core deposits, excluding Greer core deposits acquired, increased $26.6 million since December 31, 2016.

 

“We are very excited to add the Greer State Bank customers and employees to the CresCom Bank family. We were pleased with a smooth system conversion of Greer which was completed on April 10th. Overall operating results for the first quarter of 2017 exceeded our expectations with the increase in operating earnings of 56.1% from the first quarter of 2016,” stated Jerry Rexroad, Chief Executive Officer.

 

 

 

Acquisition of Greer Bancshares Incorporated

 

Effective March 18, 2017, the Company completed its previously announced acquisition of Greer. At closing, the holding companies were merged with Carolina Financial as the surviving corporation, and Greer State Bank also merged with and into CresCom Bank, with CresCom Bank surviving the merger and continuing its corporate existence.

 

Under the terms of the merger, Greer shareholders had the right to receive either $18.00 in cash or 0.782 shares of Carolina Financial common stock, or a combination thereof, for each share of Greer common stock they owned immediately prior to the merger, subject to the limitation that 10% of the outstanding shares of Greer common stock will be exchanged for cash and 90% of the outstanding shares of Greer common stock will be exchanged for shares of Carolina Financial common stock. The mailing of materials regarding the election and exchange of Greer stock certificates commenced on March 27, 2017 and the election period expires on May 17, 2017.

 

The acquisition of Greer was accounted for under the acquisition method of accounting. The assets and liabilities of Greer have been recorded at their estimated fair values and added to those of Carolina Financial for periods following the merger date. Included in the March 31, 2017 consolidated balance sheet were approximately $192.4 million in acquired loans, net of related purchase accounting adjustments and $313.9 million in deposits. The Company may continue to refine its valuations of acquired assets and liabilities for up to one year following the merger date.

 

Financial Results

 

Carolina Financial Corporation

 

nThe Company reported an increase in net income for the three months ended March 31, 2017 of $4.9 million, or $0.35 per diluted share, as compared to $3.6 million, or $0.30 per diluted share, for the three months ended March 31, 2016. Included in net income for the three months ended March 31, 2017 and 2016 were pretax merger related expenses of $1.3 million and $186,000, respectively.
nOperating earnings for the first quarter of 2017, which excludes certain non-operating income and expenses, increased 56.1% to $5.7 million, or $0.41 per diluted share, from $3.7 million, or $0.31 per diluted share, from the first quarter of 2016.
nThe Company’s net interest margin-tax equivalent increased to 3.93% for the first quarter of 2017 compared to 3.53% for the first quarter of 2016.
nThe Company reported book value per common share of $17.01 and $13.23 as of March 31, 2017 and December 31, 2016, respectively. Tangible book value per common share was $14.17 and $12.59 as of March 31, 2017 and December 31, 2016, respectively.
nAt March 31, 2017, the Company’s regulatory capital ratios exceeded the minimum levels currently required. Stockholders’ equity totaled $271.5 million as of March 31, 2017 compared to $163.2 million at December 31, 2016. Tangible equity to tangible assets at March 31, 2017 was 10.6% compared to 9.3% at December 31, 2016.

 

 

 

Community Banking

 

nThe community banking segment net income increased 32.1% to $4.5 million for the three months ended March 31, 2017 compared to $3.4 million for the three months ended March 31, 2016. Included in net income for the three months ended March 31, 2017 and 2016 were pretax merger related expenses of $1.3 million and $186,000, respectively.
nNo provision for loan loss was recorded during the three months ended March 31, 2017 or 2016. This was primarily due to continued excellent asset quality as well as net recoveries to average loans receivable of (0.01%) and (0.04%) for the three months ended March 31, 2017 and 2016, respectively.
nNon-performing assets were 0.34% and 0.40% of total assets at March 31, 2017 and December 31, 2016, respectively.
nLoans receivable increased to $1.4 billion at March 31, 2017 compared to $1.2 billion at December 31, 2016. Loans receivable, excluding Greer loans acquired, increased $46.4 million since year end. The increase in loans receivable primarily relates to the completed acquisition of Greer as well as the Bank’s continuing focus on commercial lending and residential mortgage lending.
nThe number of checking accounts increased at an annualized rate of 11.7%, excluding Greer checking accounts acquired, since December 31, 2016. Total deposits, excluding acquired deposits from the Greer acquisition, increased $35.6 million since December 31, 2016. As of March 31, 2017 and December 31, 2016, core deposits, defined as checking, savings and money market, comprised approximately 64.6% and 60.6%, respectively, of total deposits.

 

Wholesale Mortgage Banking

 

nNet income for the wholesale mortgage banking segment was $645,000 for the three months ended March 31, 2017 compared to $401,000 for the three months ended March 31, 2016.
nThe increase in net income of the wholesale mortgage banking segment during first quarter of 2017 is primarily attributable to an increase in margin during the period. Net margin was 1.80% for the three months ended March 31, 2017 compared to 1.47% for the three months ended March 31, 2016. Originations for the three months ended March 31, 2017 and 2016 were $180.8 million and $186.8 million, respectively.

 

Conference Call

 

A conference call will be held at 2:00 p.m., Eastern Time on April 25, 2017. 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 95417349. 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 95417349.

 

 

About Carolina Financial Corporation

Carolina Financial Corporation 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 March 31, 2017, Carolina Financial had approximately $2.2 billion in total assets and Crescent Mortgage Company originated loans in 48 states partnering with community banks, credit unions and mortgage brokers. In June 2016, Carolina Financial completed its acquisition of Congaree Bancshares, Inc. and its wholly-owned subsidiary, Congaree State Bank. In March 2017, Carolina Financial completed its acquisition of Greer Bancshares Incorporated.

 

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 business related to acquisitions 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 acquisitions may not be fully realized within expected timeframes; and (9) disruption from acquisitions 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

 

   March 31, 2017  December 31, 2016
   (Unaudited)  (Audited)
   (Dollars in thousands)
ASSETS      
Cash and due from banks  $21,456    9,761 
Interest-bearing cash   36,582    14,591 
Cash and cash equivalents   58,038    24,352 
Securities available-for-sale   494,130    335,352 
Federal funds sold   10,560    —   
Federal Home Loan Bank stock, at cost   12,478    11,072 
Other investments   2,116    1,768 
Derivative assets   3,226    2,219 
Loans held for sale   21,399    31,569 
Loans receivable, gross   1,417,010    1,178,266 
Allowance for loan losses   (10,715)   (10,688)
Loans receivable, net   1,406,295    1,167,578 
           
Premises and equipment, net   46,544    37,054 
Accrued interest receivable   6,726    5,373 
Real estate acquired through foreclosure, net   1,479    1,179 
Deferred tax assets, net   10,210    8,341 
Mortgage servicing rights, net   15,792    15,032 
Cash value life insurance   37,938    28,984 
Core deposit intangible   8,005    3,658 
Goodwill   37,287    4,266 
Other assets   9,886    5,939 
Total assets  $2,182,109    1,683,736 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Liabilities:          
Noninterest-bearing deposits  $298,365    229,905 
Interest-bearing deposits   1,309,355    1,028,355 
Total deposits   1,607,720    1,258,260 
Short-term borrowed funds   214,500    203,000 
Long-term debt   55,304    38,465 
Derivative liabilities   682    342 
Drafts outstanding   7,129    6,223 
Advances from borrowers for insurance and taxes   2,037    1,058 
Accrued interest payable   690    327 
Reserve for mortgage repurchase losses   2,583    2,880 
Dividends payable to stockholders   576    502 
Accrued expenses and other liabilities   19,434    9,489 
Total liabilities   1,910,655    1,520,546 
Commitments and contingencies          
Stockholders’ equity:          
Preferred stock   —      —   
Common stock   162    125 
Additional paid-in capital   168,113    66,156 
Retained earnings   102,528    98,451 
Accumulated other comprehensive income (loss), net of tax   651    (1,542)
Total stockholders’ equity   271,454    163,190 
Total liabilities and stockholders’ equity  $2,182,109    1,683,736 

 

 

 

CAROLINA FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

   For the Three Months
   Ended March 31,
   2017  2016
   (In thousands, except share data)
Interest income          
Loans  $14,968    11,085 
Investment securities   2,553    2,152 
Dividends from Federal Home Loan Bank stock   101    97 
Federal funds sold   3    —   
Other interest income   45    26 
Total interest income   17,670    13,360 
Interest expense          
Deposits   1,692    1,367 
Short-term borrowed funds   355    105 
Long-term debt   353    615 
Total interest expense   2,400    2,087 
Net interest income   15,270    11,273 
Provision for loan losses   —      —   
Net interest income after provision for loan losses   15,270    11,273 
Noninterest income          
Mortgage banking income   3,608    3,175 
Deposit service charges   858    862 
Net loss on extinguishment of debt   —      (9)
Net gain on sale of securities   185    417 
Fair value adjustments on interest rate swaps   (58)   (281)
Net increase in cash value life insurance   211    229 
Mortgage loan servicing income   1,566    1,388 
Other   861    495 
Total noninterest income   7,231    6,276 
Noninterest expense          
Salaries and employee benefits   8,609    7,150 
Occupancy and equipment   2,182    1,842 
Marketing and public relations   381    385 
FDIC insurance   100    168 
Provision for mortgage loan repurchase losses   (225)   (250)
Legal expense   65    49 
Other real estate expense, net   20    20 
Mortgage subservicing expense   486    423 
Amortization of mortgage servicing rights   669    532 
Merger related expenses   1,319    186 
Other   1,980    1,763 
Total noninterest expense   15,586    12,268 
Income before income taxes   6,915    5,281 
Income tax expense   2,011    1,638 
Net income  $4,904    3,643 
           
Earnings per common share:          
Basic  $0.35    0.31 
Diluted  $0.35    0.30 
Weighted average common shares outstanding:          
Basic   13,919,711    11,746,574 
Diluted   14,139,241    11,978,801 

 

 

 

CAROLINA FINANCIAL CORPORATION

(Unaudited)

(Dollars in thousands)

 

   At or for the Three Months Ended
Selected Financial Data:  March 31,
2017
  December 31,
2016
  September 30,
2016
  June 30,
2016
  March 31,
2016
                
Selected Average Balances:                         
Total assets  $1,768,323    1,651,653    1,626,717    1,482,963    1,412,778 
Investment securities   373,551    326,485    345,385    335,105    335,929 
Loans receivable, net   1,214,777    1,138,120    1,093,669    978,337    935,438 
Loans held for sale   17,827    32,951    32,196    24,467    25,454 
Deposits   1,330,805    1,288,665    1,291,567    1,170,860    1,069,451 
Stockholders’ equity   210,071    160,991    157,311    145,656    141,311 
                          
Performance Ratios (annualized):                         
Return on average equity   9.34%   12.80%   15.11%   7.79%   10.31%
Return on average tangible equity (Non-GAAP)   9.98%   13.46%   15.93%   7.96%   10.53%
Return on average assets   1.11%   1.25%   1.46%   0.76%   1.03%
Operating return on average equity (Non-GAAP)   10.95%   14.32%   14.95%   14.02%   10.43%
Operating return on average tangible equity (Non-GAAP)   11.70%   15.06%   15.76%   14.32%   10.65%
Operating return on average assets (Non-GAAP)   1.30%   1.40%   1.45%   1.38%   1.04%
Average earning assets to average total assets   91.99%   93.21%   92.94%   93.44%   93.08%
Average loans receivable to average deposits   91.28%   88.32%   84.68%   83.56%   87.47%
Average stockholders’ equity to average assets   11.88%   9.75%   9.67%   9.82%   10.00%
Net interest margin-tax equivalent (1)   3.93%   3.87%   3.75%   3.64%   3.53%
Net charge-offs  (recovery) to average loans receivable   (0.01)%   (0.12)%   (0.02)%   (0.03)%   (0.04)%
Nonperforming assets to period end loans receivable   0.52%   0.58%   0.62%   0.67%   0.59%
Nonperforming assets to total assets   0.34%   0.40%   0.42%   0.45%   0.39%
Nonperforming loans to total loans   0.42%   0.48%   0.37%   0.37%   0.48%
Allowance for loan losses as a percentage of loans receivable (end of period)   0.76%   0.91%   0.91%   0.96%   1.06%
Allowance for loan losses as a percentage of non-acquired loans receivable (Non-GAAP)   0.96%   1.01%   1.03%   1.10%   1.13%
Allowance for loan losses as a percentage of nonperforming loans   180.66%   190.01%   247.72%   262.68%   223.38%
                          
Nonperforming Assets:                         
Loans 90 days or more past due and still accruing  $—      —      —      —      —   
Nonaccrual loans   5,931    5,625    4,174    3,920    4,581 
Total nonperforming loans   5,931    5,625    4,174    3,920    4,581 
Real estate acquired through foreclosure, net   1,479    1,179    2,843    3,272    1,091 
Total nonperforming assets  $7,410    6,804    7,017    7,192    5,672 

 

(1) Net interest margin-tax equivalent reflects tax-exempt income on a tax-equivalent basis.

 

 

 

Segment Information

(Unaudited)

(Dollars in thousands)

 

   For the Three Months Ended
   March 31,
 2017
  December 31,
2016
  September 30,
2016
  June 30,
2016
  March 31,
2016
Segment net income:                         
Community banking  $4,509    4,565    4,734    2,162    3,413 
Wholesale mortgage banking   645    806    1,402    919    401 
Other   (244)   (232)   (228)   (253)   (188)
Eliminations   (6)   11    33    8    17 
Total net income  $4,904    5,150    5,941    2,836    3,643 

 

   For the Three Months Ended March 31, 2017
   Community  Mortgage         
   Banking  Banking  Other  Eliminations  Total
Interest income   17,257    395    6    12    17,670 
Interest expense   2,218    12    182    (12)   2,400 
Net interest income (expense)   15,039    383    (176)   24    15,270 
Provision for loan losses   —      —      —      —      —   
Noninterest income from external customers   2,384    4,846    —      —      7,230 
Intersegment noninterest income   276    —      —      (276)   —   
Noninterest expense   11,324    4,052    209    —      15,585 
Intersegment noninterest expense   —      241    1    (242)   —   
Income (loss) before income taxes   6,375    936    (386)   (10)   6,915 
Income tax expense (benefit)   1,866    291    (142)   (4)   2,011 
Net income (loss)   4,509    645    (244)   (6)   4,904 

 

   For the Three Months Ended March 31, 2016
   Community  Mortgage         
   Banking  Banking  Other  Eliminations  Total
Interest income   12,944    369    5    42    13,360 
Interest expense   1,939    5    148    (5)   2,087 
Net interest income (expense)   11,005    364    (143)   47    11,273 
Provision for loan losses   —      —      —      —      —   
Noninterest income from external customers   2,142    4,135    —      —      6,277 
Intersegment noninterest income   262    —      —      (262)   —   
Noninterest expense   8,456    3,653    161    —      12,270 
Intersegment noninterest expense   —      241    1    (242)   —   
Income (loss) before income taxes   4,953    605    (305)   27    5,280 
Income tax expense (benefit)   1,540    204    (117)   10    1,637 
Net income (loss)   3,413    401    (188)   17    3,643 

 

   For the Three Months Ended March 31,
   Loan Originations  Mortgage Banking Income  Margin
   2017  2016  2017  2016  2017  2016
Additional segment information:                              
Community banking  $14,753    17,679    358    420    2.43%   2.38%
Wholesale mortgage banking   180,830    186,799    3,250    2,755    1.80%   1.47%
Total mortgage banking income  $195,583    204,478    3,608    3,175    1.84%   1.55%

 

 

 

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

(In thousands, except share data)

 

   At the Month Ended
   March 31,  December 31,  September 30,  June 30,  March 31,
   2017  2016  2016  2016  2016
                
Core deposits:                         
Noninterest-bearing demand accounts  $298,365    229,905    267,892    246,811    200,743 
Interest-bearing demand accounts   309,961    191,851    195,792    166,843    147,393 
Savings accounts   66,506    48,648    47,035    46,032    41,596 
Money market accounts   363,600    292,639    299,960    296,968    257,808 
Total core deposits (Non-GAAP)   1,038,432    763,043    810,679    756,654    647,540 
                          
Certificates of deposit:                         
Less than $250,000   524,836    467,937    476,744    480,002    459,789 
$250,000 or more   44,452    27,280    24,853    26,532    20,443 
Total certificates of deposit   569,288    495,217    501,597    506,534    480,232 
Total deposits  $1,607,720    1,258,260    1,312,276    1,263,188    1,127,772 

 

   At the Month Ended
   March 31,  December 31,  September 30,  June 30,  March 31,
   2017  2016  2016  2016  2016
                
Tangible book value per share:                         
Total stockholders’ equity  $271,454    163,190    160,331    155,017    142,390 
Less intangible assets   (45,292)   (7,924)   (8,037)   (8,150)   (2,875)
Tangible common equity (Non-GAAP)  $226,162    155,266    152,294    146,867    139,515 
                          
Issued and outstanding shares   16,185,408    12,548,328    12,546,220    12,545,282    12,051,615 
Less nonvested restricted stock awards   (227,439)   (211,908)   (216,828)   (219,228)   (302,028)
Period end dilutive shares   15,957,969    12,336,420    12,329,392    12,326,054    11,749,587 
                          
Total stockholders equity  $271,454    163,190    160,331    155,017    142,390 
Divided by period end dilutive shares   15,957,969    12,336,420    12,329,392    12,326,054    11,749,587 
Common book value per share  $17.01    13.23    13.00    12.58    12.12 
                          
Tangible common equity (Non-GAAP)  $226,162    155,266    152,294    146,867    139,515 
Divided by period end dilutive shares   15,957,969    12,336,420    12,329,392    12,326,054    11,749,587 
Tangible common book value per share (Non-GAAP)  $14.17    12.59    12.35    11.92    11.87 

 

   At the Month Ended
   March 31,  December 31,  September 30,  June 30,  March 31,
   2017  2016  2016  2016  2016
Acquired and non-acquired loans:                         
Acquired loans receivable  $303,244    119,422    129,505    130,228    61,610 
Non-acquired loans receivable   1,113,766    1,058,844    1,003,724    937,028    902,411 
Total loans receivable  $1,417,010    1,178,266    1,133,229    1,067,256    964,021 
% Acquired   21.40%   10.14%   11.43%   12.20%   6.39%
                          
Non-acquired loans  $1,113,766    1,058,844    1,003,724    937,028    902,411 
Allowance for loan losses   10,715    10,688    10,340    10,297    10,233 
Allowance for loan losses to non-acquired loans (Non-GAAP)   0.96%   1.01%   1.03%   1.10%   1.13%
                          
Total loans receivable  $1,417,010    1,178,266    1,133,229    1,067,256    964,021 
Allowance for loan losses   10,715    10,688    10,340    10,297    10,233 
Allowance for loan losses to total loans receivable   0.76%   0.91%   0.91%   0.96%   1.06%

 

 

 

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

(In thousands, except share data)

 

   For the Three Months Ended
Operating Earnings and Performance Ratios:  March 31,
2017
  December 31,
2016
  September 30,
2016
  June 30,
2016
  March 31,
2016
Income before income taxes  $6,915    7,498    8,939    3,700    5,281 
Gain on sale of securities   (185)   (65)   (111)   (113)   (417)
Net loss on extinguishment of debt   —      1,694    118    47    9 
Fair value adjustments on interest rate swaps   58    (998)   (99)   226    281 
Merger related expenses   1,319    260    —      2,799    186 
Operating earnings before income taxes   8,107    8,389    8,847    6,659    5,340 
Tax expense (1)   2,358    2,627    2,967    1,555    1,656 
Operating earnings (Non-GAAP)  $5,749    5,762    5,880    5,104    3,684 
                          
Average equity   210,071    160,991    157,311    145,656    141,311 
Average assets   1,768,323    1,651,653    1,626,717    1,482,963    1,412,778 
                          
Average Equity   210,071    160,991    157,311    145,656    141,311 
Less average intangible assets   (13,510)   (7,979)   (8,092)   (3,076)   (2,917)
Average tangible common equity (Non-GAAP)   196,561    153,012    149,219    142,580    138,394 
                          
Operating return on average assets (Non-GAAP)   1.30%   1.40%   1.45%   1.38%   1.04%
Operating return on average equity (Non-GAAP)   10.95%   14.32%   14.95%   14.02%   10.43%
Operating return on average tangible equity (Non-GAAP)   11.70%   15.06%   15.76%   14.32%   10.65%
                          
Weighted average common shares outstanding:                         
Basic   13,919,711    12,336,420    12,327,921    11,908,282    11,746,574 
Diluted   14,139,241    12,585,518    12,535,551    12,076,878    11,978,801 
Operating earnings per common share:                         
Basic (Non-GAAP)  $0.41    0.47    0.48    0.43    0.31 
Diluted (Non-GAAP)  $0.41    0.46    0.47    0.42    0.31 
                          
                          
As Reported:                         
Income before income taxes  $6,915    7,498    8,939    3,700    5,281 
Tax expense   2,011    2,348    2,998    864    1,638 
Net Income  $4,904    5,150    5,941    2,836    3,643 
                          
Average equity   210,071    160,991    157,311    145,656    141,311 
Average tangible equity (Non-GAAP)   196,561    153,012    149,219    142,580    138,394 
Average assets   1,768,323    1,651,653    1,626,717    1,482,963    1,412,778 
Return on average assets   1.11%   1.25%   1.46%   0.76%   1.03%
Return on average equity   9.34%   12.80%   15.11%   7.79%   10.31%
Return on average tangible equity (Non-GAAP)   9.98%   13.46%   15.93%   7.96%   10.53%
                          
Weighted average common shares outstanding:                         
Basic   13,919,711    12,336,420    12,327,921    11,908,282    11,746,574 
Diluted   14,139,241    12,585,518    12,535,551    12,076,878    11,978,801 
Earnings per common share:                         
Basic  $0.35    0.42    0.48    0.24    0.31 
Diluted  $0.35    0.41    0.47    0.23    0.30 

 

(1) Tax expense is determined using the effective tax rate reflected in the accompanying income statement for the applicable reporting period.

 

 

 

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

(In thousands, except share data)

 

   For the Three Months Ended
   March 31,
2017
  December 31,
2016
  September 30,
2016
  June 30,
2016
  March 31,
2016
Segment net income:                         
Community banking  $4,509    4,565    4,734    2,162    3,413 
Wholesale mortgage banking   645    806    1,402    919    401 
Other   (244)   (232)   (228)   (253)   (188)
Eliminations   (6)   11    33    8    17 
Total net income  $4,904    5,150    5,941    2,836    3,643 
                          
Community banking segment operating earnings:                         
Income before income taxes  $6,375    6,545    6,975    2,785    4,953 
Tax expense (1)   1,866    1,980    2,241    623    1,540 
Bank segment net income  $4,509    4,565    4,734    2,162    3,413 
                          
Weighted average common shares outstanding:                         
Basic   13,919,711    12,336,420    12,327,921    11,908,282    11,746,574 
Diluted   14,139,241    12,585,518    12,535,551    12,076,878    11,978,801 
                          
Earnings per common share:                         
Basic  $0.32   $0.37   $0.38   $0.18   $0.29 
Diluted  $0.32   $0.36   $0.38   $0.18   $0.28 
                          
Bank segment income before taxes  $6,375    6,545    6,975    2,785    4,953 
Gain on sale of securities   (185)   (65)   (111)   (113)   (417)
Net loss on extinguishment of debt   —      1,693    118    47    9 
Fair value adjustments on interest rate swaps   58    (998)   (99)   226    281 
Merger related expenses (2)   1,311    254    —      2,697    186 
Operating earnings before income taxes   7,559    7,429    6,883    5,642    5,012 
Tax expense (1)   2,213    2,247    2,211    1,262    1,558 
                          
Operating bank segment earnings (Non-GAAP)  $5,346    5,182    4,672    4,380    3,454 
                          
Operating bank segment earnings per common share:                         
Basic (Non-GAAP)  $0.38   $0.42   $0.38   $0.37   $0.29 
Diluted (Non-GAAP)  $0.38   $0.41   $0.37   $0.36   $0.29 

 

(1) Tax expense is determined using the effective tax rate computed for the applicable business segment.

(2) Remaining merger related costs were incurred within the category “Other” segment earnings.

 

 


The following information was filed by Carolina Financial Corp (CARO) on Monday, April 24, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Document And Entity Information
Consolidated Balance Sheets (unaudited)
Consolidated Balance Sheets (unaudited) (parenthetical)
Consolidated Statements Of Cash Flows (unaudited)
Consolidated Statements Of Changes In Stockholders' Equity (unaudited)
Consolidated Statements Of Comprehensive Income
Consolidated Statements Of Operations (unaudited)
Business Combination
Business Combination (tables)
Business Combinations (details 2)
Business Combinations (details 3)
Business Combinations (details 4)
Business Combinations (details)
Deposits
Deposits (details)
Deposits (tables)
Derivatives
Derivatives (details)
Derivatives (tables)
Earnings Per Share
Earnings Per Share (details 2)
Earnings Per Share (details)
Earnings Per Share (tables)
Estimated Fair Value Of Financial Instruments
Estimated Fair Value Of Financial Instruments (details 2)
Estimated Fair Value Of Financial Instruments (details 3)
Estimated Fair Value Of Financial Instruments (details 4)
Estimated Fair Value Of Financial Instruments (details 5)
Estimated Fair Value Of Financial Instruments (details)
Estimated Fair Value Of Financial Instruments (tables)
Loans Receivable, Net
Loans Receivable, Net (details 2)
Loans Receivable, Net (details 3)
Loans Receivable, Net (details 4)
Loans Receivable, Net (details 5)
Loans Receivable, Net (details 6)
Loans Receivable, Net (details 7)
Loans Receivable, Net (details 8)
Loans Receivable, Net (details Narrative)
Loans Receivable, Net (details)
Loans Receivable, Net (tables)
Real Estate Acquired Through Foreclosure
Real Estate Acquired Through Foreclosure (details 2)
Real Estate Acquired Through Foreclosure (details)
Real Estate Acquired Through Foreclosure (tables)
Securities
Securities (details 2)
Securities (details 3)
Securities (details 4)
Securities (details Narrative)
Securities (details)
Securities (tables)
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies (details Narrative)
Summary Of Significant Accounting Policies (policies)
Supplemental Segment Information
Supplemental Segment Information (details 2)
Supplemental Segment Information (details)
Supplemental Segment Information (tables)

Material Contracts, Statements, Certifications & more

Carolina Financial Corp provided additional information to their SEC Filing as exhibits

Ticker: CARO
CIK: 870385
Form Type: 10-Q Quarterly Report
Accession Number: 0001552781-17-000292
Submitted to the SEC: Fri May 05 2017 9:01:56 AM EST
Accepted by the SEC: Fri May 05 2017
Period: Friday, March 31, 2017
Industry: State Commercial Banks

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