Exhibit 99.1

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Carolina Financial Corporation Reports Results for First Quarter of 2018

NEWS RELEASE – For Release April 30, 2018 4:00PM

For More Information, Contact:

William A. Gehman III, EVP and CFO, 843.723.7700

Charleston, S.C. April 30, 2018 - Carolina Financial Corporation (the “Company”) (NASDAQ: CARO) today announced financial results for the first quarter of 2018.

Financial highlights at and for the three months ended March 31, 2018, include:

·Net income for the first quarter 2018 was $4.1 million, or $0.19 per diluted share, down from $4.9 million, or $0.35 per diluted share for the first quarter of 2017. Included in net income are pretax merger-related expenses of $14.7 million for the first quarter of 2018 compared to $1.3 million for the first quarter of 2017.
·Operating earnings for the first quarter of 2018, which exclude certain non-operating income and expenses, increased 160.0% to $14.9 million, or $0.71 per diluted share, from $5.8 million, or $0.41 per diluted share, from the first quarter of 2017.
·Operating earnings for Q1 2018 have been adjusted to eliminate the following significant items:
oPretax merger-related expenses of $14.7 million.
oThe fair value gain on interest rate swaps of $803,000.
oThe loss on sale of securities of $697,000.
·Performance ratios Q1 2018 compared to Q1 2017:
oReturn on average assets was 0.46% compared to 1.11%.
oOperating return on average assets was 1.70% compared to 1.30%.
oReturn on average tangible equity was 4.90% compared to 9.98%.
oOperating return on average tangible equity was 18.06% compared to 11.70%.
·Loans receivable, gross grew $60.5 million, or at an annualized rate of 10.4%, since December 31, 2017.
·Nonperforming assets to total assets were 0.30% at March 31, 2018 compared to 0.20% at December 31, 2017.
·Total deposits increased $72.0 million since December 31, 2017. Core deposits increased $39.8 million since December 31, 2017.
·The Company completed the operational integration of the First South acquisition during Q1 2018.
·As a result of the Tax Cuts and Jobs Act of 2017, income taxes reflect the effects of the corporate Federal tax rate reduction to 21% in Q1 2018 compared to 35% in Q1 2017.

 

“We continue to see the impact of solid organic growth and strategic acquisitions on earnings. Overall operating results for the first quarter of 2018 continued to improve with an increase in operating earnings of 160.0% compared to the first quarter of 2017. We also completed the integration of the First South acquisition,” stated Jerry Rexroad, the Company’s Chief Executive Officer.

 
 

Financial Results

Carolina Financial Corporation

·The Company reported net income for the three months ended March 31, 2018 of $4.1 million, or $0.19 per diluted share, as compared to $4.9 million, or $0.35 per diluted share, for the three months ended March 31, 2017. Included in net income for the three months ended March 31, 2018 were pretax merger-related expenses of $14.7 million, primarily related to vendor contract termination charges, compared to $1.3 million for the three months ended March 31, 2017.
·Operating earnings for the first quarter of 2018, which exclude certain non-operating income and expenses, increased 160.0% to $14.9 million, or $0.71 per diluted share, from $5.7 million, or $0.41 per diluted share, from the first quarter of 2017.
·The Company’s net interest margin-tax equivalent increased to 4.20% for the first quarter of 2018 compared to 3.93% for the first quarter of 2017 and 4.19% for the fourth quarter of 2017.
·The Company reported book value per common share of $22.71 and $22.76 as of March 31, 2018 and December 31, 2017, respectively. Tangible book value per common share was $15.71 as of March 31, 2018 and December 31, 2017.
·At March 31, 2018, the Company’s regulatory capital ratios exceeded the minimum levels currently required. Stockholders’ equity totaled $475.0 million as of March 31, 2018 compared to $475.4 million at December 31, 2017. Tangible equity to tangible assets at March 31, 2018 and December 31, 2017 was 9.7%.

 

Community Banking

 

·Community banking segment net income was $4.0 million for the three months ended March 31, 2018 compared to $4.5 million for the three months ended March 31, 2017. Included in net income for the three months ended March 31, 2018 were pretax merger-related expenses of $14.7 million, compared to $1.3 million for the three months ended March 31, 2017.
·Community banking segment operating earnings increased 178.8% to $14.9 million for the three months ended March 31, 2018 compared to $5.3 million for the three months ended March 31, 2017.
·There was no provision for loan loss during the three months ended March 31, 2018 and 2017. Asset quality and historical loss experience continue to remain favorable. In addition, the Company had net recoveries of loans previously charged off of $1.2 million and $27,000 during the three months ended March 31, 2018 and 2017, respectively.
·Non-performing assets were 0.30% and 0.20% of total assets at March 31, 2018 and December 31, 2017, respectively.
·Loans receivable, gross increased to $2.4 billion at March 31, 2018 compared to $2.3 billion at December 31, 2017. Loans increased $60.5 million, or 10.4% annualized over December 31, 2017.
·Total deposits increased $72.0 million since December 31, 2017. As of March 31, 2018 and December 31, 2017, core deposits, defined as checking, savings and money market, comprised approximately 66.6% and 66.9%, respectively, of total deposits.

 

Wholesale Mortgage Banking

 

·Net income for the wholesale mortgage banking segment was $562,000 for the three months ended March 31, 2018 compared to $645,000 for the three months ended March 31, 2017.
·Net margin was 1.74% for the three months ended March 31, 2018 compared to 1.80% for the three months ended March 31, 2017. Originations for the three months ended March 31, 2018 and 2017 were $180.5 million and $180.8 million, respectively.
 
 

Dividend Declared

 

On April 25, 2018, the Company declared a $0.06 dividend per common share, payable on July 6, 2018, to stockholders of record on June 15, 2018.

 

Conference Call

A conference call will be held at 10:00 a.m., Eastern Time on May 1, 2018. The conference call can be accessed by dialing (866) 464-9448 or (213) 660-0874 and requesting the Carolina Financial Corporation first quarter earnings call. The conference ID number is 4788606. 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” approximately three hours after the call and can be accessed by dialing (855) 859-2056 or (404) 537-3406 and requesting conference number 4788606.

 

About Carolina Financial Corporation

Carolina Financial Corporation (NASDAQ: CARO) is the holding company of CresCom Bank, which also owns and operates Atlanta-based Crescent Mortgage Company.  As of March 31, 2018, Carolina Financial Corporation had approximately $3.6 billion in total assets and Crescent Mortgage Company was licensed to originate loans in 47 states, partnering with community banks, credit unions and mortgage brokers.

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, including but not limited to, 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, fourth-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, the Tax Cuts and Jobs Act of 2017 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.

 

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CAROLINA FINANCIAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   March 31, 2018   December 31, 2017 
   (Unaudited)   (Audited) 
   (Dollars in thousands) 
ASSETS          
Cash and due from banks  $25,761    25,254 
Interest-bearing cash   35,603    55,998 
Cash and cash equivalents   61,364    81,252 
Securities available-for-sale   753,363    743,239 
Federal Home Loan Bank stock, at cost   17,913    19,065 
Other investments   3,432    3,446 
Derivative assets   4,913    2,803 
Loans held for sale   24,618    35,292 
Loans receivable, gross   2,380,018    2,319,528 
Allowance for loan losses   (12,708)   (11,478)
 Loans receivable, net   2,367,310    2,308,050 
           
Premises and equipment, net   62,593    61,407 
Accrued interest receivable   11,502    11,992 
Real estate acquired through foreclosure, net   1,963    3,106 
Deferred tax assets, net   4,952    2,436 
Mortgage servicing rights   21,719    21,003 
Cash value life insurance   57,604    57,195 
Core deposit intangible   18,795    19,601 
Goodwill   127,592    127,592 
Other assets   13,443    21,538 
Total assets  $3,553,076    3,519,017 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Liabilities:          
Noninterest-bearing deposits  $547,744    525,615 
Interest-bearing deposits   2,129,225    2,079,314 
 Total deposits   2,676,969    2,604,929 
Short-term borrowed funds   308,500    340,500 
Long-term debt   67,303    72,259 
Derivative liabilities   164    156 
Drafts outstanding   10,133    7,324 
Advances from borrowers for insurance and taxes   3,302    3,005 
Accrued interest payable   1,288    1,126 
Reserve for mortgage repurchase losses   1,742    1,892 
Dividends payable to stockholders   1,053    1,051 
Accrued expenses and other liabilities   7,576    11,394 
 Total liabilities   3,078,030    3,043,636 
Commitments and contingencies          
Stockholders’ equity:          
Preferred stock        
Common stock   210    210 
Additional paid-in capital   348,622    348,037 
Retained earnings   126,262    123,537 
Accumulated other comprehensive (loss) income, net of tax   (48)   3,597 
Total stockholders’ equity   475,046    475,381 
Total liabilities and stockholders’ equity  $3,553,076    3,519,017 
 
 

CAROLINA FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

         
   For the Three Months 
   Ended March 31, 
   2018   2017 
   (In thousands, except share data) 
Interest income          
Loans  $31,663    14,968 
Investment securities   5,707    2,553 
Dividends from Federal Home Loan Bank stock   175    101 
Other interest income   131    48 
Total interest income   37,676    17,670 
Interest expense          
Deposits   3,642    1,692 
Short-term borrowed funds   1,253    355 
Long-term debt   650    353 
Total interest expense   5,545    2,400 
Net interest income   32,131    15,270 
Provision for loan losses        
Net interest income after provision for loan losses   32,131    15,270 
Noninterest income          
Mortgage banking income   3,801    3,608 
Deposit service charges   2,024    858 
Net gain (loss) on sale of securities   (697)   185 
Fair value adjustments on interest rate swaps   803    (58)
Net increase in cash value life insurance   390    211 
Mortgage loan servicing income   2,025    1,566 
Other   1,702    861 
Total noninterest income   10,048    7,231 
Noninterest expense          
Salaries and employee benefits   13,668    8,609 
Occupancy and equipment   3,652    2,182 
Marketing and public relations   376    381 
FDIC insurance   255    100 
Recovery of mortgage loan repurchase losses   (150)   (225)
Legal expense   76    65 
Other real estate (income) expense, net   (94)   20 
Mortgage subservicing expense   565    486 
Amortization of mortgage servicing rights   979    669 
Merger related expenses   14,710    1,319 
Other   3,561    1,980 
Total noninterest expense   37,598    15,586 
Income before income taxes   4,581    6,915 
Income tax expense   525    2,011 
Net income  $4,056    4,904 
           
Earnings per common share:          
Basic  $0.19    0.35 
Diluted  $0.19    0.35 
Weighted average common shares outstanding:          
Basic   20,908,225    13,919,711 
Diluted   21,119,316    14,139,241 
 
 

CAROLINA FINANCIAL CORPORATION

(Unaudited)

(Dollars in thousands)

                     
   At or for the Three Months Ended 
Selected Financial Data:  March 31,
2018
   December 31,
2017
   September 30,
2017
   June 30,
2017
   March 31,
2017
 
                     
Selected Average Balances:                         
Total assets  $3,522,407    3,048,214    2,230,586    2,166,803    1,768,323 
Investment securities and FHLB stock   770,161    647,276    521,569    510,706    373,551 
Loans receivable, net   2,322,203    2,003,429    1,463,771    1,412,940    1,214,777 
Loans held for sale   21,645    25,001    27,282    22,412    17,827 
Deposits   2,616,640    2,352,303    1,710,263    1,633,285    1,330,805 
Stockholders’ equity   477,830    380,529    286,524    277,708    210,071 
                          
Performance Ratios (annualized):                         
Return on average stockholders’ equity   3.40%   6.65   11.16   13.45   9.34
Return on average tangible equity (Non-GAAP)   4.90%   8.78%   13.24%   16.02%   9.98%
Return on average assets   0.46%   0.83%   1.43%   1.72%   1.11%
Operating return on average stockholders’ equity (Non-GAAP)   12.51%   11.69%   11.02%   13.15%   10.95%
Operating return on average tangible equity (Non-GAAP)   18.06%   15.44%   13.08%   15.65%   11.70%
Operating return on average assets (Non-GAAP)   1.70%   1.46%   1.42%   1.69%   1.30%
Average earning assets to average total assets   89.28%   89.25%   91.09%   90.68%   91.99%
Average loans receivable to average deposits   88.75%   85.17%   85.59%   86.51%   91.28%
Average stockholders’ equity to average assets   13.57%   12.48%   12.85%   12.82%   11.88%
Net interest margin-tax equivalent (1)   4.20%   4.19%   3.94%   4.03%   3.93%
Net charge-offs  (recovery) to average loans receivable   (0.21)%   0.02%   0.02%   (0.01)%   (0.01)%
Nonperforming assets to period end loans receivable   0.45%   0.30%   0.44%   0.48%   0.52%
Nonperforming assets to total assets   0.30%   0.20%   0.29%   0.31%   0.34%
Nonperforming loans to total loans   0.36%   0.17%   0.33%   0.38%   0.42%
Allowance for loan losses as a percentage of gross loans receivable (end of period) (2)   0.53%   0.49%   0.72%   0.75%   0.76%
Allowance for loan losses as a percentage of non-acquired loans receivable (Non-GAAP)   0.85%   0.80%   0.87%   0.93%   0.96%
Allowance for loan losses as a percentage of nonperforming loans (2)   146.93%   291.81%   216.53%   196.85%   180.66%
                          
Nonperforming Assets:                         
Nonacquired loans 90 days or more past due and still accruing  $                 
Nonacquired nonaccrual loans   8,649    3,934    4,924    5,461    5,931 
Total nonperforming loans   8,649    3,934    4,924    5,461    5,931 
Real estate acquired through foreclosure, net   1,963    3,106    1,640    1,417    1,479 
Total nonperforming assets  $10,612    7,040    6,564    6,878    7,410 

   

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

(2) Acquired loans represent 36.8%, 41.1%, 17.3%, 19.4%, and 21.4% of gross loans receivable at March 31, 2018, December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017, respectively.

 
 

Carolina Financial Corporation

Segment Information

(Unaudited)

(Dollars in thousands)

 

   For the Three Months Ended 
   March 31,
2018
  December 31,
2017
  September 30,
2017
   June 30,
2017
   March 31,
2017
 
Segment net income:                   
Community banking  $3,984  6,050  7,837   8,443   4,509 
Wholesale mortgage banking   562  118  449   1,238   645 
Other   (497) 124  (320)  (346)  (244)
Eliminations   7  36  27   5   (6)
Total net income  $4,056  6,328  7,993   9,340   4,904 

 

   For the Three Months Ended March 31, 2018 
   Community   Mortgage             
   Banking   Banking   Other   Eliminations   Total 
Interest income  $37,257    431    13    (25)   37,676 
Interest expense   5,084    53    461    (53)   5,545 
Net interest income (expense)   32,173    378    (448)   28    32,131 
Provision for (recovery of) loan losses                    
Noninterest income from external customers   5,059    4,924    65        10,048 
Intersegment noninterest income   242    17        (259)    
Noninterest expense   32,929    4,389    280        37,598 
Intersegment noninterest expense       240    2    (242)    
Income (loss) before income taxes   4,545    690    (665)   11    4,581 
Income tax expense (benefit)   561    128    (168)   4    525 
Net income (loss)  $3,984    562    (497)   7    4,056 

 

   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 (recovery of) loan losses                    
Noninterest income from external customers   2,419    4,812            7,231 
Intersegment noninterest income   242    34        (276)    
Noninterest expense   11,324    4,053    209        15,586 
Intersegment noninterest expense       240    2    (242)    
Income (loss) before income taxes   6,376    936    (387)   (10)   6,915 
Income tax expense (benefit)   1,867    291    (143)   (4)   2,011 
Net income (loss)  $4,509    645    (244)   (6)   4,904 

 

   For the Three Months Ended March 31, 
   Loan Originations   Mortgage Banking Income   Margin 
   2018   2017   2018   2017   2018   2017 
Additional segment information:                              
Community banking  $31,427    14,753    653    358    2.08%   2.43
Wholesale mortgage banking   180,494    180,830    3,148    3,250    1.74%   1.80%
Total  $211,921    195,583    3,801    3,608    1.79%   1.84%
 
 

Carolina Financial Corporation

Reconciliation of Non-GAAP Financial Measures - Consolidated

(Unaudited)

(In thousands, except share data)    

 

   At the Month Ended 
   March 31,   December 31,   September 30,   June 30,   March 31, 
   2018   2017   2017   2017   2017 
                     
Core deposits:                         
Noninterest-bearing demand accounts  $547,744    525,615    333,267    330,641    298,365 
Interest-bearing demand accounts   558,942    551,308    309,241    298,123    309,961 
Savings accounts   212,249    213,142    69,552    70,336    66,506 
Money market accounts   463,676    452,734    377,754    380,108    363,600 
Total core deposits (Non-GAAP)   1,782,611    1,742,799    1,089,814    1,079,208    1,038,432 
                          
Certificates of deposit:                         
Less than $250,000   791,789    755,887    567,483    539,177    524,836 
$250,000 or more   102,569    106,243    50,357    45,344    44,452 
Total certificates of deposit   894,358    862,130    617,840    584,521    569,288 
Total deposits  $2,676,969    2,604,929    1,707,654    1,663,729    1,607,720 
                          

 

   At the Month Ended 
   March 31,   December 31,   September 30,   June 30,   March 31, 
   2018   2017   2017   2017   2017 
                     
Tangible book value per share:                         
Total stockholders’ equity  $475,046    475,381    290,224    281,818    271,454 
Less intangible assets   (146,387)   (147,193)   (44,953)   (45,123)   (45,292)
Tangible common equity (Non-GAAP)  $328,659    328,188    245,271    236,695    226,162 
                          
Issued and outstanding shares   21,057,539    21,022,202    16,159,309    16,156,943    16,185,408 
Less nonvested restricted stock awards   (136,395)   (134,302)   (99,639)   (101,489)   (227,439)
Period end dilutive shares   20,921,144    20,887,900    16,059,670    16,055,454    15,957,969 
                          
Total stockholders’ equity  $475,046    475,381    290,224    281,818    271,454 
Divided by period end dilutive shares   20,921,144    20,887,900    16,059,670    16,055,454    15,957,969 
Common book value per share  $22.71    22.76    18.07    17.55    17.01 
                          
Tangible common equity (Non-GAAP)  $328,659    328,188    245,271    236,695    226,162 
Divided by period end dilutive shares   20,921,144    20,887,900    16,059,670    16,055,454    15,957,969 
Tangible common book value per share (Non-GAAP)  $15.71    15.71    15.27    14.74    14.17 
                          

 

   At the Month Ended 
   March 31,   December 31,   September 30,   June 30,   March 31, 
   2018   2017   2017   2017   2017 
Acquired and non-acquired loans:                         
Acquired loans receivable  $877,012    952,220    257,461    278,275    303,244 
Non-acquired loans receivable   1,503,006    1,367,308    1,227,000    1,157,145    1,113,766 
Total loans receivable  $2,380,018    2,319,528    1,484,461    1,435,420    1,417,010 
% Acquired   36.85   41.05    17.34   19.39   21.40
                          
Non-acquired loans  $1,503,006    1,367,308    1,227,000    1,157,145    1,113,766 
Allowance for loan losses   12,708    11,478    10,662    10,750    10,715 
Allowance for loan losses to non-acquired loans (Non-GAAP)   0.85%   0.84%   0.87%   0.93%   0.96%
                          
Total loans receivable  $2,380,018    2,319,528    1,484,461    1,435,420    1,417,010 
Allowance for loan losses   12,708    11,478    10,662    10,750    10,715 
Allowance for loan losses to total loans receivable   0.53%   0.49%   0.72%   0.75%   0.76%
 
 

Carolina Financial Corporation

Reconciliation of Non-GAAP Financial Measures  - Consolidated

(Unaudited)

(In thousands, except share data)

                     
   For the Three Months Ended 
   March 31,
2018
   December 31,
2017
   September 30,
2017
   June 30,
2017
   March 31,
2017
 
As Reported:                         
Income before income taxes  $4,581    10,630    11,968    12,013    6,915 
Tax expense   525    4,302    3,975    2,673    2,011 
Net Income  $4,056    6,328    7,993    9,340    4,904 
                          
Average equity  $477,830    380,529    286,524    277,708    210,071 
Average tangible equity (Non-GAAP)  $331,047    288,156    241,489    233,256    196,561 
Average assets  $3,522,407    3,048,214    2,230,586    2,166,803    1,768,323 
                          
Return on average assets   0.46%   0.83%   1.43%   1.72%   1.11%
Return on average equity   3.40%   6.65%   11.16%   13.45%   9.34%
Return on average tangible equity (Non-GAAP)   4.90%   8.78%   13.24%   16.02%   9.98%
                          
Weighted average common shares outstanding:                         
 Basic   20,908,225    19,207,307    16,029,332    16,029,332    13,919,711 
 Diluted   21,119,316    19,443,353    16,187,869    16,180,171    14,139,241 
Earnings per common share:                         
 Basic  $0.19    0.33    0.50    0.58    0.35 
 Diluted  $0.19    0.33    0.49    0.58    0.35 
                          
                          
Operating Earnings and Performance Ratios:                         
Income before income taxes  $4,581    10,630    11,968    12,013    6,915 
Gain/(Loss) on sale of securities   697    242    (368)   (621)   (185)
Fair value adjustments on interest rate swaps   (803)   (419)   (90)   69    58 
Merger related expenses   14,710    6,391    311    279    1,319 
Operating earnings before income taxes   19,185    16,844    11,821    11,740    8,107 
Tax expense (1)   4,242    5,721    3,926    2,612    2,358 
Operating earnings (Non-GAAP)  $14,943    11,123    7,895    9,128    5,749 
                          
Average equity  $477,830    380,529    286,524    277,708    210,071 
Less average intangible assets   (146,783)   (92,373)   (45,035)   (44,452)   (13,510)
Average tangible common equity (Non-GAAP)  $331,047    288,156    241,489    233,256    196,561 
                          
Average assets  $3,522,407    3,048,214    2,230,586    2,166,803    1,768,323 
Less average intangible assets   (146,783)   (92,373)   (45,035)   (44,452)   (13,510)
Average tangible assets (Non-GAAP)  $3,375,624    2,955,841    2,185,551    2,122,351    1,754,813 
                          
Operating return on average assets (Non-GAAP)   1.70%   1.46%   1.42%   1.69%   1.30%
Operating return on average equity (Non-GAAP)   12.51%   11.69%   11.02%   13.15%   10.95%
Operating return on average tangible assets (Non-GAAP)   1.77%   1.51%   1.44%   1.72%   1.31%
Operating return on average tangible equity (Non-GAAP)   18.06%   15.44%   13.08%   15.65%   11.70%
                          
Weighted average common shares outstanding:                         
 Basic   20,908,225    19,207,307    16,029,332    16,029,332    13,919,711 
 Diluted   21,119,316    19,443,353    16,187,869    16,180,171    14,139,241 
Operating earnings per common share:                         
 Basic (Non-GAAP)  $0.71    0.58    0.49    0.57    0.41 
 Diluted (Non-GAAP)  $0.71    0.57    0.49    0.56    0.41 

 

(1)  Tax expense is determined using the effective tax rate adjusted to eliminate the impact of the non-operating items.

 
 

Carolina Financial Corporation

Reconciliation of Non-GAAP Financial Measures - Community Banking Segment

(Unaudited)

(In thousands, except share data) 

                     
   For the Three Months Ended 
   March 31,
2018
   December 31,
2017
   September 30,
2017
   June 30,
2017
   March 31,
2017
 
Segment net income:                         
Community banking  $3,984    6,052    7,837    8,443    4,509 
Wholesale mortgage banking   562    117    449    1,238    645 
Other   (497)   124    (320)   (346)   (244)
Eliminations   7    35    27    5    (6)
Total net income  $4,056    6,328    7,993    9,340    4,904 
                          
Community banking segment operating earnings:                         
Income before income taxes  $4,545    10,447    11,714    11,232    6,375 
Tax expense (1)   561    4,397    3,877    2,789    1,866 
Bank segment net income  $3,984    6,050    7,837    8,443    4,509 
                          
Weighted average common shares outstanding:                         
Basic   20,908,225    19,207,307    16,029,332    16,029,332    13,919,711 
Diluted   21,119,316    19,443,353    16,187,869    16,180,171    14,139,241 
                          
Bank segment earnings per common share:                         
Basic  $0.19    0.31    0.49    0.53    0.32 
Diluted  $0.19    0.31    0.48    0.52    0.32 
                          
Bank segment income before taxes  $4,545    10,447    11,714    11,232    6,375 
Gain on sale of securities   692    541    (368)   (621)   (185)
Fair value adjustments on interest rate swaps   (755)   (419)   (90)   69    58 
Merger related expenses   14,710    6,391    311    279    1,311 
Operating earnings before income taxes   19,192    16,960    11,567    10,959    7,559 
Tax expense (1)   4,288    5,778    3,828    2,721    2,213 
Operating bank segment earnings (Non-GAAP)  $14,904    11,182    7,739    8,238    5,346 
                          
                          
Operating bank segment earnings per common share:                         
Basic (Non-GAAP)  $0.71    0.58    0.48    0.51    0.38 
Diluted (Non-GAAP)  $0.71    0.58    0.48    0.51    0.38 

 

(1)  Tax expense is determined using the effective tax rate adjusted to eliminate the impact of the non-operating items.

 
 

INFORMATION IN THE INVESTOR DECK - THIS INFORMATION IS NOT IN THE EARNINGS RELEASE FINANCIALS

 

   For the Three Months Ended 
   March 31,
2018
   December 31,
2017
   September 30,
2017
   June 30,
2017
   March 31,
2017
 
BANK SEGMENT OPERATING EFFICIENCY RATIO:                            
Nonintererst expense per Segment Info   32,929    22,125    10,999    11,448    11,324 
Merger related expenses   (14,710)   (4,091)   (260)   (279)   (1,311)
                          
Noninterest expense-operating   18,219    18,034    10,739    11,169    10,013 
                          
Noninterest income per Segment Info:                         
Noninterest income from external customers   5,059    5,247    3,097    3,494    2,419 
Intersegment noninterest income   242    244    242    242    242 
    5,301    5,491    3,339    3,736    2,661 
Gain on sale of securities   692    242    (65)   (621)   (185)
Fair value adjustments on interest rate swaps   (755)   (419)   (998)   69    58 
                          
Noninterest income-operating   5,238    5,314    2,276    3,184    2,534 
Net interest income   32,173    27,861    19,374    18,944    15,039 
Total revenues   37,411    33,175    21,650    22,128    17,573 
Efficiency Ratio-operating   48.7   54.4    49.6   50.5   57.0
                          
Banking Segment Diluted EPS:                         
GAAP  $0.19   $0.31   $0.48   $0.52   $0.32 
Operating  $0.71   $0.58   $0.48   $0.51   $0.38 
                          
Diluted Shares Outstanding   21,119,316    19,443,353    16,187,869    16,180,171    14,139,241 
                          
                          
Banking Segment Return on Average Assets:                         
GAAP earnings   0.45%   0.79%   1.41%   1.56%   1.02%
Operating earnings   1.69%   1.47%   1.39%   1.52%   1.21%
                          
Average assets   3,522,407    3,048,214    2,230,586    2,166,803    1,768,323 
                          
Banking Operating Noninterest expense as a percent of Consolidated Average Assets   2.07%   2.37%   1.93%   2.06%   2.26%
 

The following information was filed by Carolina Financial Corp (CARO) on Monday, April 30, 2018 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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