Carter Bank & Trust ( the “Bank”) (NASDAQ:CARE) today announced net
income of $7.5 million, or $0.29 earnings per share, for the first
quarter of 2019, as compared to net income of $8.8 million, or $0.34
earnings per share, for the first quarter of 2018. Pre-tax pre-provision
earnings1 were $9.6 million for the quarters ended March 31,
2019 and 2018.
First Quarter 2019 Financial Highlights
-
First quarter net income of $7.5 million, or $0.29 earnings per share,
as compared to net income of $3.4 million, or $0.13 earnings per
share, in the fourth quarter of 2018 and net income of $8.8 million,
or $0.34 earnings per share, over the same quarter of 2018;
-
Net interest income declined $1.2 million, or 4.1%, to $27.9 million
as compared to the linked quarter primarily due to two fewer days in
the first quarter and a nine basis point increase in funding costs
compared to the fourth quarter of 2018, but increased $0.5 million, or
1.7%, over the same quarter in 2018;
-
Net interest margin, on a fully taxable equivalent basis, declined
seven basis points to 3.09% over the linked quarter, but increased
five basis points over the same quarter last year;
-
Solid portfolio loan growth of $141.8 million, or 5.2%, as compared to
the linked quarter and growth of $184.7 million, or 6.9%, as compared
to March 31, 2018;
-
Total deposits increased $27.1 million to $3.6 billion as of March 31,
2019 as compared to December 31, 2018. Noninterest-bearing deposits
increased by $35.3 million, or 6.7%, to $559.9 million as compared to
linked quarter and money market accounts increased $31.7 million, or
39.2%, due to recent special rate promotions during the first quarter
of 2019;
-
Nonperforming loans declined $1.1 million, or 2.3% as compared to
December 31, 2018 and decreased $13.0 million, or 20.7%, from March
31, 2018. Nonperforming loans as a percentage of total portfolio loans
were 1.74%, 1.88% and 2.35% as of March 31, 2019, December 31, 2018
and March 31, 2018, respectively.
Litz H. Van Dyke, Chief Executive Officer, stated, “Our performance this
quarter reflects solid loan and deposit growth as a result of our
various strategic initiatives designed to grow loans and core deposits.
In addition, there were a couple of important strategic milestones
achieved during the first quarter. First was our successful roll out of
our online and mobile banking platforms. These new platforms will be the
foundation to provide additional products and services as well as
greater convenience to our customers. The second important milestone was
the transition of our common stock to the Nasdaq Global Select Market.
This will provide our shareholders greater liquidity in trading our
stock and help enhance shareholder value by allowing the market
capitalization of our company to more accurately reflect our franchise
value.”
Operating Highlights
Net interest income increased $0.5 million, or 1.7%, to $27.9 million
during the first quarter of 2019 as compared to the same period of 2018.
The net interest margin, on a fully taxable equivalent basis, increased
five basis points to 3.09% over the past twelve months. The increases in
short-term interest rates continue to positively impact both net
interest income and net interest margin, but are somewhat muted by lower
replacement loan yields from legacy loan pay-downs during 2018. The
yield on interest-earning assets increased 40 basis points, offset by a
43 basis point increase in funding costs as compared to the same period
of 2018.
The provision for loan losses totaled $1.6 million for the period ended
March 31, 2019 and $1.5 million for the same period of 2018. At March
31, 2019, nonperforming loans were $49.6 million, a decrease of $1.1
million, or 2.3% as compared to December 31, 2018. Net charge-offs were
$1.3 million in the first quarter of 2019 as compared to $33 thousand of
net recoveries in the same period of 2018. As a percentage of total
loans, on an annualized basis, net charge-offs (recoveries) were 0.18%
and (0.01)% for the quarters ending March 31, 2019 and 2018,
respectively. Nonperforming loans as a percentage of total portfolio
loans were 1.74%, 1.88% and 2.35% as of March 31, 2019, December 31,
2018 and March 31, 2018, respectively.
Noninterest income at March 31, 2019, excluding net securities gains,
was essentially flat as compared to the same period of 2018. The stable
comparison was due to higher debit card interchange fees and higher bank
owned life insurance earnings, which were offset by lower income from
other real estate owned (“OREO”) due to the sale of several large
commercial properties over the last 12 months that generated income
beginning in the first quarter of 2018 and lower insurance commissions
due to the sale of the bank owned insurance agency in the first quarter
of 2018. Securities gains of $31 thousand and $0.9 million were realized
during the first quarter of 2019 and 2018, respectively, to take
advantage of market opportunities and reduce the credit risk of the
securities portfolio.
Total noninterest expense decreased $0.5 million, or 2.0%, for the first
quarter of 2019 to $22.1 million as compared to $22.6 million in the
same period of 2018. The reduction was primarily driven by decreases of
$0.2 million in salaries and employee benefits, $0.6 million in legal
and professional fees, $0.5 million in tax credit amortization and $0.4
million in OREO expenses. The decrease in salaries and benefits were
primarily attributable to an increase in salary deferrals on new loan
originations due to increased new loan volumes in the first quarter of
2019. The decrease in legal and professional fees were related to
regulatory and compliance reviews which were completed as of June 30,
2018. Offsetting these decreases were increases of $0.5 million in data
processing expense due to our core conversion completed in the fourth
quarter of 2018 and $0.5 million in occupancy expense as a result of
higher depreciation for hardware and software and amortization of
maintenance agreements related to the aforementioned core conversion.
Financial Condition
Total assets were $4.1 billion at March 31, 2019 and $4.0 billion at
December 31, 2018. Total portfolio loans increased $141.8 million, or
5.2%, to $2.8 billion as of March 31, 2019 as compared to December 31,
2018. Nonperforming loans decreased $1.1 million to $49.6 million, or
2.3% as of March 31, 2019 as compared to $50.7 million at December 31,
2018. OREO decreased $3.1 million at March 31, 2019 as compared to
December 31, 2018 due to the sale of properties during the first quarter
of 2019. Closed retail bank offices declined $1.4 million from December
31, 2018 and have a remaining book value of $5.3 million at March 31,
2019.
Federal Reserve Bank excess reserves decreased $100.2 million at March
31, 2019 as compared to December 31, 2018. The balance was higher at
year-end primarily due to large legacy credit reductions received late
in December of 2018. This excess cash was deployed into higher yielding
and diversified securities, funded loan growth, and also funded the
planned decrease in high cost deposits.
The securities portfolio increased $15.9 million and is currently 19.5%
of total assets at March 31, 2019 as compared to 19.4% of total assets
at December 31, 2018. The increase is a result of deposit growth and
active balance sheet management. We have further diversified the
securities portfolio as to bond types, maturities and interest rate
structures.
Total deposits increased $27.1 million to $3.6 billion as of March 31,
2019 as compared to December 31, 2018. Noninterest-bearing deposits
increased by $35.3 million, or 6.7%, to $559.9 million as of March 31,
2019 as compared to $524.6 million as of December 31, 2018 and money
market accounts increased $31.7 million, or 39.2%, due to recent special
rate promotions during the first quarter of 2019. Offsetting these
increases were decreases of $16.2 million, or 5.9%, in interest-bearing
demand deposits, $10.3 million, or 1.7%, in savings accounts and $13.4
million in certificates of deposits as compared to December 31, 2018.
Noninterest-bearing deposits comprised 15.5% and 14.6% of total deposits
at March 31, 2019 and December 31, 2018, respectively.
The allowance for loan losses was 1.39% of total portfolio loans as of
March 31, 2019 as compared to 1.45% as of December 31, 2018. General
reserves as a percentage of total loans were 1.20% at March 31, 2019 as
compared to 1.26% as of December 31, 2018. The allowance for loan losses
was 79.8% of nonperforming loans as of March 31, 2019 as compared to
77.3% of nonperforming loans as of December 31, 2018. In the view of
management, the allowance for loan losses is adequate to absorb probable
losses inherent in the loan portfolio.
The Bank remains well capitalized. The Bank’s Tier 1 Capital ratio
decreased to 13.61% as of March 31, 2019 as compared to 13.97% as of
December 31, 2018. The Bank’s leverage ratio was 9.85% at March 31, 2019
as compared to 9.69% as of December 31, 2018. The Bank’s Total
Risk-Based Capital ratio was 14.86% at March 31, 2019 as compared to
15.22% at December 31, 2018.
About Carter Bank & Trust
Headquartered in Martinsville, VA, Carter Bank & Trust is a
state-chartered community bank in Virginia and trades on the Nasdaq
Global Select Market under the symbol CARE. The Bank has $4.1 billion in
assets and 105 branches in Virginia and North Carolina. For more
information visit www.CarterBankandTrust.com.
Important Note Regarding Non-GAAP Financial Measures
Statements included in this press release include non-GAAP financial
measures and should be read along with the accompanying tables in our
definitions and reconciliations of GAAP to non-GAAP financial measures.
This press release and the accompanying tables discuss financial
measures, such as adjusted noninterest expense, adjusted
efficiency ratio, and net interest income on a fully taxable equivalent
basis, which are all 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 Bank’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, nor are they necessarily comparable to non-GAAP
performance measures that may be presented by other companies. Investors
should consider the Bank’s performance and financial condition as
reported under GAAP and all other relevant information when assessing
the performance or financial condition of the Bank. Non-GAAP measures
have limitations as analytical tools, and investors should not consider
them in isolation or as a substitute for analysis of the Bank’s results
or financial condition as reported under GAAP.
Important Note Regarding Forward-Looking Statements
This information contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements generally relate to our financial condition,
results of operations, plans, objectives, outlook for earnings,
revenues, expenses, capital and liquidity levels and ratios, asset
levels, asset quality, financial position, and other matters regarding
or affecting Carter Bank & Trust and its future business and operations.
Forward looking statements are typically identified by words or phrases
such as “will likely result,” “expect,” “anticipate,” “estimate,”
“forecast,” “project,” “intend,” “ believe,” “assume,” “strategy,”
“trend,” “plan,” “outlook,” “outcome,” “continue,” “remain,”
“potential,” “opportunity,” “believe,” “comfortable,” “current,”
“position,” “maintain,” “sustain,” “seek,” “achieve” and variations of
such words and similar expressions, or future or conditional verbs such
as will, would, should, could or may. Although we believe the
assumptions upon which these forward-looking statements are based are
reasonable, any of these assumptions could prove to be inaccurate and
the forward-looking statements based on these assumptions could be
incorrect. The matters discussed in these forward-looking statements are
subject to various risks, uncertainties and other factors that could
cause actual results and trends to differ materially from those made,
projected, or implied in or by the forward-looking statements depending
on a variety of uncertainties or other factors including, but not
limited to: credit losses; cyber-security concerns; rapid technological
developments and changes; sensitivity to the interest rate environment
including a prolonged period of low interest rates, a rapid increase in
interest rates or a change in the shape of the yield curve; a change in
spreads on interest-earning assets and interest-bearing liabilities;
regulatory supervision and oversight; legislation affecting the
financial services industry as a whole, and Carter Bank & Trust, in
particular; the outcome of pending and future litigation and
governmental proceedings; increasing price and product/service
competition; the ability to continue to introduce competitive new
products and services on a timely, cost-effective basis; managing our
internal growth and acquisitions; the possibility that the anticipated
benefits from acquisitions cannot be fully realized in a timely manner
or at all, or that integrating the acquired operations will be more
difficult, disruptive or more costly than anticipated; containing costs
and expenses; reliance on significant customer relationships; general
economic or business conditions; deterioration of the housing market and
reduced demand for mortgages; deterioration in the overall macroeconomic
conditions or the state of the banking industry that could warrant
further analysis of the carrying value of goodwill and could result in
an adjustment to its carrying value resulting in a non-cash charge to
net income; re-emergence of turbulence in significant portions of the
global financial and real estate markets that could impact our
performance, both directly, by affecting our revenues and the value of
our assets and liabilities, and indirectly, by affecting the economy
generally and access to capital in the amounts, at the times and on the
terms required to support our future businesses. Many of these factors,
as well as other factors, are described in our filings with the FDIC.
Forward-looking statements are based on beliefs and assumptions using
information available at the time the statements are made. We caution
you not to unduly rely on forward-looking statements because the
assumptions, beliefs, expectations and projections about future events
may, and often do, differ materially from actual results. Any
forward-looking statement speaks only as to the date on which it is
made, and we undertake no obligation to update any forward-looking
statement to reflect developments occurring after the statement is made.
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CARTER BANK & TRUST
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CONSOLIDATED FINANCIAL DATA
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BALANCE SHEETS
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(Unaudited)
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(Dollars in Thousands, except per share data)
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March 31,
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December 31,
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March 31,
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2019
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2018
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2018
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ASSETS
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Cash and Due From Banks
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$
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42,493
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$
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47,413
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$
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52,030
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Interest-Bearing Deposits in Other Financial Institutions
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60,430
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61,612
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62,880
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Federal Reserve Bank Excess Reserves
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84,644
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184,798
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97,367
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Total Cash and Cash Equivalents
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187,567
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293,823
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212,277
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Securities, Available-for-Sale, at Fair Value
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798,669
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782,758
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954,127
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Loans Held-for-Sale
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6,285
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2,559
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-
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Portfolio Loans
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2,845,606
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2,703,792
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2,661,063
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Allowance for Loan Losses
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(39,572
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)
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(39,199
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)
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(36,866
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)
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Portfolio Loans, net
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2,806,034
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2,664,593
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2,624,197
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Bank Premises and Equipment, net
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86,751
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85,841
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79,896
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Other Real Estate Owned, net
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30,592
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33,681
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63,263
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Goodwill
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58,726
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58,726
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58,726
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Bank Owned Life Insurance
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51,522
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51,161
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50,000
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Other Assets
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71,836
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66,457
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70,307
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TOTAL ASSETS
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$
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4,097,982
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$
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4,039,599
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$
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4,112,793
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LIABILITIES
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Deposits:
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Noninterest-Bearing Demand
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$
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559,924
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$
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524,614
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$
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574,811
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Interest-Bearing Demand
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260,922
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277,174
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264,939
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Money Market
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112,526
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80,835
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|
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107,624
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Savings
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600,450
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|
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610,757
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690,315
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Certificates of Deposits
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|
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2,084,444
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2,097,801
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|
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2,031,887
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Total Deposits
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3,618,266
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3,591,181
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3,669,576
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Other Liabilities
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29,947
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|
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12,204
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|
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10,340
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TOTAL LIABILITIES
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3,648,213
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3,603,385
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3,679,916
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SHAREHOLDERS' EQUITY
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Common Stock, Par Value $1.00 Per Share, Authorized 100,000,000
Shares;
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26,308,087 outstanding at March 31, 2019,
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26,270,174 outstanding at December 31, 2018 and 26,257,761 at
March 31, 2018
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26,308
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|
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26,270
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|
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26,258
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Additional Paid-in-Capital
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142,183
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142,175
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|
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142,178
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Retained Earnings
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|
285,124
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|
|
277,835
|
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|
|
274,759
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Accumulated Other Comprehensive Loss
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(3,846
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)
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|
|
(10,066
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)
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|
|
(10,318
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)
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TOTAL SHAREHOLDERS' EQUITY
|
|
|
449,769
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|
|
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436,214
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|
|
432,877
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
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|
$
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4,097,982
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$
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4,039,599
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$
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4,112,793
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PROFITABILITY RATIOS (ANNUALIZED)
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Return on Average Assets
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|
|
0.75
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%
|
|
|
0.29
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%
|
|
|
0.88
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%
|
Return on Average Shareholders' Equity
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|
|
6.89
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%
|
|
|
2.75
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%
|
|
|
8.33
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%
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Portfolio Loan to Deposit Ratio
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|
|
78.65
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%
|
|
|
75.29
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%
|
|
|
72.52
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%
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Allowance to Total Portfolio Loans
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|
|
1.39
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%
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|
|
1.45
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%
|
|
|
1.39
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%
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CAPITALIZATION RATIOS
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Shareholders' Equity to Average Assets
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|
10.93
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%
|
|
|
10.70
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%
|
|
|
10.62
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%
|
Tier 1 Leverage Ratio
|
|
|
9.85
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%
|
|
|
9.69
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%
|
|
|
9.62
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%
|
Risk-Based Capital - Tier 1
|
|
|
13.61
|
%
|
|
|
13.97
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%
|
|
|
13.31
|
%
|
Risk-Based Capital - Total
|
|
|
14.86
|
%
|
|
|
15.22
|
%
|
|
|
14.56
|
%
|
|
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|
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|
|
|
|
|
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|
|
CARTER BANK & TRUST
|
|
|
|
|
|
|
CONSOLIDATED FINANCIAL DATA
|
|
|
|
|
|
|
INCOME STATEMENTS
|
|
|
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|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in Thousands, except per share data)
|
|
Quarter-to-Date
|
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
|
|
2019
|
|
|
|
2018
|
|
|
|
2018
|
|
Interest Income
|
|
$
|
39,133
|
|
|
$
|
39,862
|
|
|
$
|
35,588
|
|
Interest Expense
|
|
|
11,243
|
|
|
|
10,773
|
|
|
|
8,151
|
|
|
NET INTEREST INCOME
|
|
|
27,890
|
|
|
|
29,089
|
|
|
|
27,437
|
|
|
|
|
|
|
|
|
|
|
Provision for Loan Losses
|
|
|
1,627
|
|
|
|
(118
|
)
|
|
|
1,515
|
|
|
NET INTEREST INCOME AFTER
|
|
|
26,263
|
|
|
|
29,207
|
|
|
|
25,922
|
|
|
|
PROVISION FOR LOAN LOSSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST INCOME
|
|
|
|
|
|
|
Gains on Sales of Securities, net
|
|
|
31
|
|
|
|
76
|
|
|
|
868
|
|
Service Charges, Commissions and Fees
|
|
|
1,232
|
|
|
|
1,218
|
|
|
|
1,252
|
|
Debit Card Interchange Fees
|
|
|
1,174
|
|
|
|
1,212
|
|
|
|
1,133
|
|
Insurance
|
|
|
|
274
|
|
|
|
238
|
|
|
|
535
|
|
Bank Owned Life Insurance Income
|
|
|
361
|
|
|
|
388
|
|
|
|
-
|
|
Other Real Estate Owned Income
|
|
|
290
|
|
|
|
448
|
|
|
|
549
|
|
Other
|
|
|
|
|
448
|
|
|
|
252
|
|
|
|
394
|
|
|
TOTAL NONINTEREST INCOME
|
|
|
3,810
|
|
|
|
3,832
|
|
|
|
4,731
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EXPENSE
|
|
|
|
|
|
|
Salaries and Employee Benefits
|
|
|
12,035
|
|
|
|
12,773
|
|
|
|
12,260
|
|
Occupancy Expense, net
|
|
|
2,827
|
|
|
|
2,864
|
|
|
|
2,325
|
|
FDIC Insurance Expense
|
|
|
714
|
|
|
|
765
|
|
|
|
838
|
|
Other Taxes
|
|
|
643
|
|
|
|
726
|
|
|
|
477
|
|
Telephone Expense
|
|
|
505
|
|
|
|
570
|
|
|
|
669
|
|
Professional and Legal Fees
|
|
|
649
|
|
|
|
806
|
|
|
|
1,210
|
|
Data Processing
|
|
|
721
|
|
|
|
519
|
|
|
|
268
|
|
Losses on Sales and Write-downs of Other Real Estate Owned, net
|
|
|
188
|
|
|
|
5,797
|
|
|
|
342
|
|
Losses on Sales and Write-downs of Bank Premises, net
|
|
|
170
|
|
|
|
128
|
|
|
|
-
|
|
Debit Card Expense
|
|
|
710
|
|
|
|
751
|
|
|
|
652
|
|
Tax Credit Amortization
|
|
|
563
|
|
|
|
1,015
|
|
|
|
1,015
|
|
Other Real Estate Owned Expense
|
|
|
89
|
|
|
|
318
|
|
|
|
531
|
|
Other
|
|
|
|
|
2,296
|
|
|
|
2,668
|
|
|
|
1,972
|
|
|
TOTAL NONINTEREST EXPENSE
|
|
|
22,110
|
|
|
|
29,700
|
|
|
|
22,559
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES
|
|
|
7,963
|
|
|
|
3,339
|
|
|
|
8,094
|
|
Income Tax Provision (Benefit)
|
|
|
422
|
|
|
|
(67
|
)
|
|
|
(735
|
)
|
NET INCOME
|
|
$
|
7,541
|
|
|
$
|
3,406
|
|
|
$
|
8,829
|
|
|
|
|
|
|
|
|
|
|
Shares Outstanding, at End of Period
|
|
|
26,308,087
|
|
|
|
26,270,174
|
|
|
|
26,257,761
|
|
Average Shares Outstanding
|
|
|
26,293,108
|
|
|
|
26,263,563
|
|
|
|
26,257,761
|
|
|
|
|
|
|
|
|
|
|
PER SHARE DATA
|
|
|
|
|
|
|
Earnings Per Common Share - Basic and Diluted
|
|
$
|
0.29
|
|
|
$
|
0.13
|
|
|
$
|
0.34
|
|
Book Value
|
|
$
|
17.10
|
|
|
$
|
16.60
|
|
|
$
|
16.49
|
|
Tangible Book Value2
|
|
$
|
14.86
|
|
|
$
|
14.37
|
|
|
$
|
14.25
|
|
Market Value
|
|
$
|
19.19
|
|
|
$
|
15.00
|
|
|
$
|
17.05
|
|
|
|
|
|
|
|
|
|
|
PROFITABILITY RATIOS (non-GAAP)
|
|
|
|
|
|
|
Net Interest Margin (FTE)3
|
|
|
3.09
|
%
|
|
|
3.16
|
%
|
|
|
3.04
|
%
|
Core Efficiency Ratio4
|
|
|
66.17
|
%
|
|
|
64.48
|
%
|
|
|
64.96
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CARTER BANK & TRUST
|
CONSOLIDATED SELECTED FINANCIAL DATA
|
NET INTEREST MARGIN (FTE) (QTD AVERAGES)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in Thousands)
|
|
March 31, 2019
|
|
|
|
December 31, 2018
|
|
|
|
March 31, 2018
|
ASSETS
|
|
Average Balance
|
|
Income/ Expense
|
|
Rate
|
|
|
|
Average Balance
|
|
Income/ Expense
|
|
Rate
|
|
|
|
Average Balance
|
|
Income/ Expense
|
|
Rate
|
Interest-Bearing Deposits with Banks
|
|
$
|
170,031
|
|
$
|
1,021
|
|
2.44
|
%
|
|
|
|
$
|
151,221
|
|
$
|
920
|
|
2.41
|
%
|
|
|
|
$
|
204,746
|
|
$
|
862
|
|
1.71
|
%
|
Tax-Free Investment Securities
|
|
|
110,955
|
|
|
1,018
|
|
3.72
|
%
|
|
|
|
|
110,148
|
|
|
1,027
|
|
3.70
|
%
|
|
|
|
|
169,171
|
|
|
1,843
|
|
4.42
|
%
|
Taxable Investment Securities
|
|
|
701,390
|
|
|
4,122
|
|
2.38
|
%
|
|
|
|
|
693,162
|
|
|
3,757
|
|
2.15
|
%
|
|
|
|
|
772,468
|
|
|
3,755
|
|
1.97
|
%
|
Tax-Free Loans
|
|
|
401,066
|
|
|
3,314
|
|
3.35
|
%
|
|
|
|
|
407,391
|
|
|
2,965
|
|
2.89
|
%
|
|
|
|
|
434,428
|
|
|
3,336
|
|
3.11
|
%
|
Taxable Loans
|
|
|
2,396,152
|
|
|
30,568
|
|
5.17
|
%
|
|
|
|
|
2,394,188
|
|
|
32,032
|
|
5.31
|
%
|
|
|
|
|
2,230,068
|
|
|
26,879
|
|
4.89
|
%
|
Total Interest-Earning Assets
|
|
$
|
3,779,594
|
|
$
|
40,043
|
|
4.30
|
%
|
|
|
|
$
|
3,756,110
|
|
$
|
40,701
|
|
4.30
|
%
|
|
|
|
$
|
3,810,881
|
|
$
|
36,675
|
|
3.90
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Demand
|
|
$
|
271,214
|
|
$
|
641
|
|
0.96
|
%
|
|
|
|
$
|
236,604
|
|
$
|
549
|
|
0.92
|
%
|
|
|
|
$
|
264,680
|
|
$
|
404
|
|
0.62
|
%
|
Money Market
|
|
|
90,601
|
|
|
243
|
|
1.09
|
%
|
|
|
|
|
82,003
|
|
|
170
|
|
0.82
|
%
|
|
|
|
|
116,845
|
|
|
132
|
|
0.46
|
%
|
Savings
|
|
|
606,317
|
|
|
486
|
|
0.33
|
%
|
|
|
|
|
619,703
|
|
|
488
|
|
0.31
|
%
|
|
|
|
|
710,837
|
|
|
526
|
|
0.30
|
%
|
Certificates of Deposit
|
|
|
2,098,658
|
|
|
9,854
|
|
1.90
|
%
|
|
|
|
|
2,104,294
|
|
|
9,567
|
|
1.80
|
%
|
|
|
|
|
2,013,030
|
|
|
7,089
|
|
1.43
|
%
|
Total Interest-Bearing Deposits
|
|
$
|
3,066,790
|
|
$
|
11,224
|
|
1.48
|
%
|
|
|
|
$
|
3,042,604
|
|
$
|
10,774
|
|
1.40
|
%
|
|
|
|
$
|
3,105,392
|
|
$
|
8,151
|
|
1.06
|
%
|
Borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Borrowings
|
|
|
329
|
|
|
20
|
|
24.65
|
%
|
|
|
|
|
-
|
|
|
-
|
|
-
|
|
|
|
|
|
-
|
|
|
-
|
|
-
|
|
Total Borrowings
|
|
|
329
|
|
|
20
|
|
24.65
|
%
|
|
|
|
|
-
|
|
|
-
|
|
-
|
|
|
|
|
|
-
|
|
|
-
|
|
-
|
|
Total Interest-Bearing Liabilities
|
|
$
|
3,067,119
|
|
$
|
11,244
|
|
1.49
|
%
|
|
|
|
$
|
3,042,604
|
|
$
|
10,774
|
|
1.40
|
%
|
|
|
|
$
|
3,105,392
|
|
$
|
8,151
|
|
1.06
|
%
|
Net Interest Income
|
|
|
|
$
|
28,799
|
|
|
|
|
|
|
|
$
|
29,927
|
|
|
|
|
|
|
|
$
|
28,524
|
|
|
Net Interest Margin
|
|
|
|
|
|
3.09
|
%
|
|
|
|
|
|
|
|
3.16
|
%
|
|
|
|
|
|
|
|
3.04
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CARTER BANK & TRUST
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED SELECTED FINANCIAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOANS AND LOANS HELD-FOR-SALE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
December 31,
|
|
|
|
|
March 31,
|
(Dollars in Thousands)
|
|
|
|
|
2019
|
|
|
|
|
2018
|
|
|
|
|
2018
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Real Estate
|
|
|
|
|
$
|
1,444,692
|
|
|
|
|
$
|
1,381,231
|
|
|
|
|
$
|
1,359,930
|
Commercial and Industrial
|
|
|
|
|
|
670,501
|
|
|
|
|
|
660,872
|
|
|
|
|
|
913,242
|
Commercial Construction
|
|
|
|
|
|
247,968
|
|
|
|
|
|
238,016
|
|
|
|
|
|
153,236
|
Total Commercial Loans
|
|
|
|
|
|
2,363,161
|
|
|
|
|
|
2,280,119
|
|
|
|
|
|
2,426,408
|
Consumer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential Mortgages
|
|
|
|
|
|
392,712
|
|
|
|
|
|
339,307
|
|
|
|
|
|
147,875
|
Other Consumer
|
|
|
|
|
|
71,622
|
|
|
|
|
|
73,058
|
|
|
|
|
|
79,080
|
Consumer Construction
|
|
|
|
|
|
18,111
|
|
|
|
|
|
11,308
|
|
|
|
|
|
7,700
|
Total Consumer Loans
|
|
|
|
|
|
482,445
|
|
|
|
|
|
423,673
|
|
|
|
|
|
234,655
|
Total Portfolio Loans
|
|
|
|
|
|
2,845,606
|
|
|
|
|
|
2,703,792
|
|
|
|
|
|
2,661,063
|
Loans Held-for-Sale
|
|
|
|
|
|
6,285
|
|
|
|
|
|
2,559
|
|
|
|
|
|
-
|
Total Loans
|
|
|
|
|
$
|
2,851,891
|
|
|
|
|
$
|
2,706,351
|
|
|
|
|
$
|
2,661,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CARTER BANK & TRUST
|
|
|
|
|
|
|
CONSOLIDATED SELECTED FINANCIAL DATA
|
|
|
|
|
|
|
ASSET QUALITY DATA
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in Thousands)
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
Nonperforming Loans
|
|
|
2019
|
|
|
|
2018
|
|
|
|
2018
|
|
Real Estate
|
|
$
|
4,357
|
|
|
$
|
3,289
|
|
|
$
|
10,242
|
|
Consumer
|
|
|
76
|
|
|
|
65
|
|
|
|
-
|
|
Commercial
|
|
|
1,359
|
|
|
|
606
|
|
|
|
-
|
|
Total Nonperforming Loans
|
|
|
5,792
|
|
|
|
3,960
|
|
|
|
10,242
|
|
|
|
|
|
|
|
|
Nonperforming Troubled Debt Restructurings
|
|
|
|
|
|
|
Real Estate
|
|
|
43,778
|
|
|
|
46,771
|
|
|
|
52,295
|
|
Consumer
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Commercial
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total Nonperforming Troubled Debt Restructurings
|
|
|
43,778
|
|
|
|
46,771
|
|
|
|
52,295
|
|
Total Nonperforming Loans and Troubled Debt Restructurings
|
|
|
49,570
|
|
|
|
50,731
|
|
|
|
62,537
|
|
Other Real Estate Owned
|
|
|
30,592
|
|
|
|
33,681
|
|
|
|
63,263
|
|
Total Nonperforming Assets
|
|
$
|
80,162
|
|
|
$
|
84,412
|
|
|
$
|
125,800
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
2019
|
|
|
|
2018
|
|
|
|
2018
|
|
Nonperforming Loans
|
|
$
|
49,570
|
|
|
$
|
50,731
|
|
|
$
|
62,537
|
|
Other Real Estate Owned
|
|
|
30,592
|
|
|
|
33,681
|
|
|
|
63,263
|
|
Nonperforming Assets
|
|
|
80,162
|
|
|
|
84,412
|
|
|
|
125,800
|
|
|
|
|
|
|
|
|
Troubled Debt Restructurings (Nonaccruing)
|
|
|
43,778
|
|
|
|
46,771
|
|
|
|
52,295
|
|
Troubled Debt Restructurings (Accruing)
|
|
|
114,259
|
|
|
|
114,806
|
|
|
|
327,550
|
|
Total Troubled Debt Restructurings
|
|
$
|
158,037
|
|
|
$
|
161,577
|
|
|
$
|
379,845
|
|
|
|
|
|
|
|
|
Nonperforming Loans to Total Portfolio Loans
|
|
|
1.74
|
%
|
|
|
1.88
|
%
|
|
|
2.35
|
%
|
Nonperforming Assets to Total Portfolio Loans plus Other Real Estate
Owned
|
|
|
2.79
|
%
|
|
|
3.08
|
%
|
|
|
4.62
|
%
|
Allowance for Loan Losses to Total Portfolio Loans
|
|
|
1.39
|
%
|
|
|
1.45
|
%
|
|
|
1.39
|
%
|
Allowance for Loan Losses to Nonperforming Loans
|
|
|
79.83
|
%
|
|
|
77.27
|
%
|
|
|
58.95
|
%
|
Net Loan Charge-offs (Recoveries)
|
|
$
|
1,254
|
|
|
$
|
12,989
|
|
|
$
|
(33
|
)
|
Net Loan Charge-offs (Recoveries) (Annualized) to Average Loans
|
|
|
0.18
|
%
|
|
|
0.47
|
%
|
|
|
0.01
|
%
|
|
|
|
|
|
|
|
CARTER BANK & TRUST
|
|
|
|
|
|
|
CONSOLIDATED SELECTED FINANCIAL DATA
|
|
|
|
|
|
|
ALLOWANCE FOR LOAN LOSSES
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
(Dollars in Thousands)
|
|
2019
|
|
2018
|
|
2018
|
Balance Beginning of Year
|
|
$
|
39,199
|
|
$
|
35,318
|
|
$
|
35,318
|
|
Provision for Loan Losses
|
|
|
1,627
|
|
|
16,870
|
|
|
1,515
|
|
Charge-offs:
|
|
|
|
|
|
|
Real Estate Loans
|
|
|
448
|
|
|
11,924
|
|
|
231
|
|
Consumer Loans
|
|
|
928
|
|
|
2,710
|
|
|
218
|
|
Commercial Loans
|
|
|
-
|
|
|
20
|
|
|
-
|
|
Total Charge-offs
|
|
|
1,376
|
|
|
14,654
|
|
|
449
|
|
Recoveries:
|
|
|
|
|
|
|
Real Estate Loans
|
|
|
-
|
|
|
1,415
|
|
|
379
|
|
Consumer Loans
|
|
|
122
|
|
|
250
|
|
|
103
|
|
Commercial Loans
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total Recoveries
|
|
|
122
|
|
|
1,665
|
|
|
482
|
|
Total Net Charge-offs
|
|
|
1,254
|
|
|
12,989
|
|
|
(33
|
)
|
Balance End of Year
|
|
$
|
39,572
|
|
$
|
39,199
|
|
$
|
36,866
|
|
|
|
|
|
|
|
|
|
|
|
|
CARTER BANK & TRUST
|
|
|
|
|
|
|
|
CONSOLIDATED SELECTED FINANCIAL DATA
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
(Dollars in Thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEFINITIONS AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Pre-tax pre-provision earnings are computed as
net interest income plus noninterest income minus noninterest
expense before the
|
provision for loan losses and income tax provision (benefit).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Tangible Equity
|
|
|
Quarter-to-Date
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
|
2019
|
|
|
|
2018
|
|
|
|
2018
|
|
Total Shareholders' Equity
|
|
|
$
|
449,769
|
|
|
$
|
436,214
|
|
|
$
|
432,877
|
|
Less: Goodwill
|
|
|
|
58,726
|
|
|
|
58,726
|
|
|
|
58,726
|
|
Tangible Equity
|
|
|
|
391,043
|
|
|
|
377,488
|
|
|
|
374,151
|
|
|
|
|
|
|
|
|
|
Shares Outstanding at End of Period
|
|
|
|
26,308,087
|
|
|
|
26,270,174
|
|
|
|
26,257,761
|
|
Tangible Book Value Per Common Share
|
|
|
$
|
14.86
|
|
|
$
|
14.37
|
|
|
$
|
14.25
|
|
|
|
|
|
|
|
|
|
3Net interest income has been computed on a
fully taxable equivalent basis ("FTE") using a 21% federal income
tax rate
|
for the 2019 and 2018 periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income (FTE) (non-GAAP)
|
|
|
Quarter-to-Date
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
|
2019
|
|
|
|
2018
|
|
|
|
2018
|
|
Interest Income
|
|
|
$
|
39,133
|
|
|
$
|
39,862
|
|
|
$
|
35,588
|
|
Interest Expense
|
|
|
|
(11,243
|
)
|
|
|
(10,773
|
)
|
|
|
(8,151
|
)
|
Net Interest Income
|
|
|
|
27,890
|
|
|
|
29,089
|
|
|
|
27,437
|
|
Tax Equivalent Adjustment3
|
|
|
|
909
|
|
|
|
838
|
|
|
|
1,087
|
|
NET INTEREST INCOME (FTE) (non-GAAP)
|
|
|
$
|
28,799
|
|
|
$
|
29,927
|
|
|
$
|
28,524
|
|
Net Interest Income (Annualized)
|
|
|
|
116,796
|
|
|
|
118,732
|
|
|
|
115,681
|
|
Average Earning Assets
|
|
|
|
3,779,594
|
|
|
|
3,756,110
|
|
|
|
3,810,881
|
|
NET INTEREST MARGIN (FTE) (non-GAAP)
|
|
|
|
3.09
|
%
|
|
|
3.16
|
%
|
|
|
3.04
|
%
|
|
|
|
|
|
|
|
|
4Core Efficiency Ratio (non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
Quarter-to-Date
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
|
2019
|
|
|
|
2018
|
|
|
|
2018
|
|
NONINTEREST EXPENSE
|
|
|
$
|
22,110
|
|
|
$
|
29,700
|
|
|
$
|
22,559
|
|
Less: One Time Regulatory and Compliance
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(500
|
)
|
Less: Losses on Sales and Write-downs of Other Real Estate Owned, net
|
|
|
(188
|
)
|
|
|
(5,797
|
)
|
|
|
(342
|
)
|
Less: Losses on Sales and Write-downs of Bank Premises, net
|
|
|
|
(170
|
)
|
|
|
(128
|
)
|
|
|
-
|
|
Less: Tax Credit Amortization
|
|
|
|
(563
|
)
|
|
|
(1,015
|
)
|
|
|
(1,015
|
)
|
Less: Contingent Liability
|
|
|
|
-
|
|
|
|
(250
|
)
|
|
|
-
|
|
Less: Conversion Expense
|
|
|
|
(2
|
)
|
|
|
(393
|
)
|
|
|
(263
|
)
|
Less: Conversion Vacation Accrual
|
|
|
|
-
|
|
|
|
(686
|
)
|
|
|
-
|
|
CORE NONINTEREST EXPENSE (non-GAAP)
|
|
|
$
|
21,187
|
|
|
$
|
21,431
|
|
|
$
|
20,439
|
|
|
|
|
|
|
|
|
|
NET INTEREST INCOME
|
|
|
$
|
27,890
|
|
|
$
|
29,089
|
|
|
$
|
27,437
|
|
Plus: Taxable Equivalent Adjustment3
|
|
|
|
909
|
|
|
|
838
|
|
|
|
1,087
|
|
NET INTEREST INCOME (FTE) (Non-GAAP)
|
|
|
$
|
28,799
|
|
|
$
|
29,927
|
|
|
$
|
28,524
|
|
Less: Gains on Sales of Securities, net
|
|
|
|
(31
|
)
|
|
|
(76
|
)
|
|
|
(868
|
)
|
Less: Other Real Estate Owned Income
|
|
|
|
(290
|
)
|
|
|
(448
|
)
|
|
|
(549
|
)
|
Less: Other Gains
|
|
|
|
(271
|
)
|
|
|
-
|
|
|
|
(374
|
)
|
Noninterest Income
|
|
|
|
3,810
|
|
|
|
3,832
|
|
|
|
4,731
|
|
CORE NET INTEREST INCOME (FTE) (Non-GAAP) plus NONINTEREST INCOME
|
|
$
|
32,017
|
|
|
$
|
33,235
|
|
|
$
|
31,464
|
|
|
|
|
|
|
|
|
|
CORE EFFICIENCY RATIO (Non-GAAP)
|
|
|
|
66.17
|
%
|
|
|
64.48
|
%
|
|
|
64.96
|
%
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190425005129/en/
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