MARTINSVILLE, VA / ACCESSWIRE / October 24, 2019 / Carter Bank & Trust ( the "Bank") (NASDAQ:CARE) today announced net income of $7.6 million, or $0.29 diluted earnings per share, for the third quarter of 2019, as compared to a net loss of $7.5 million, or $0.29 per share, for the third quarter of 2018. Pre-tax pre-provision earnings were $9.4 million and $7.4 million for the quarters ended September 30, 2019 and 2018, respectively.
For the nine months ended September 30, 2019, net income was $23.0 million, or $0.87 diluted earnings per share, as compared to net income of $8.5 million, or $0.32 diluted earnings per share in the first nine months of 2018. Pre-tax pre-provision earnings were $28.7 million for the nine months ended September 30, 2019 as compared to $28.0 million for the same period of 2018.
Third Quarter 2019 Financial Highlights
- Third quarter net income of $7.6 million, or $0.29 diluted earnings per share, as compared to net income of $7.8 million, or $0.30 diluted earnings per share, in the second quarter of 2019 and a net loss of $7.5 million, or $0.29 per share, over the same quarter of 2018;
- Net interest margin, on a fully taxable equivalent basis, declined only one basis point to 3.01% over the linked quarter and declined six basis points over the same quarter last year;
- Securities gains of $0.7 million were realized in the third quarter of 2019 to take advantage of market opportunities, as compared to securities gains of $0.2 million in the same period of 2018;
- Solid loan growth of $48.9 million, or 6.8% on an annualized basis, as compared to the linked quarter and growth of $117.2 million, or 4.2%, as compared to September 30, 2018;
- Provision for loan losses declined $12.4 million, or 89.9%, as compared to the same quarter of 2018 primarily due to a $10.1 million charge-off of a legacy commercial real estate relationship in the third quarter of 2018 and
- Nonperforming loans declined $3.6 million, or 7.1% as compared to December 31, 2018 and decreased $1.1 million, or 2.2%, from September 30, 2018. Nonperforming loans as a percentage of total portfolio loans were 1.62%, 1.88% and 1.72% as of September 30, 2019, December 31, 2018 and September 30, 2018, respectively.
2019 Year-to-Date Financial Highlights
- Year-to-date net income of $23.0 million, or $0.87 diluted earnings per share, as compared to a net income of $8.5 million, or $0.32 diluted earnings per share, in same period of 2018;
- Net interest margin, on a fully taxable equivalent basis, declined five basis points to 3.04% year-over-year;
- Net interest income decreased $0.9 million, or 1.1%, to $83.9 million year-over-year;
- Provision for loan losses declined $12.6 million, or 74.2%, as compared to the same period of 2018 primarily due to the aforementioned $10.1 million charge-off of a legacy commercial real estate relationship in the third quarter of 2018 and
- Securities gains of $1.6 million were realized in 2019 to take advantage of market opportunities, as compared to securities gains of $1.2 million in the same period of 2018.
Chief Executive Officer Litz H. Van Dyke said, "Despite a more challenging interest rate environment, the results in the third quarter were solid. Key factors contributing to our performance were: solid loan growth, continued improvement in credit quality and a net interest margin that remained stable. We are excited about our underlying momentum heading into the next quarter, where our newly launched treasury management services and robust marketing efforts in core deposit acquisition will be in full swing. We also were pleased that expense growth was well controlled, even as we continue to invest in our strategic initiatives."
Van Dyke added, "We remain focused on implementing our strategic initiatives designed to enhance our ability to attract and retain customer relationships, better serve the communities where we do business, and create value for our shareholders."
Operating Highlights
Net interest income decreased $0.9 million, or 1.1%, to $83.9 million during the first nine months of 2019 as compared to the same period of 2018. The net interest margin, on a fully taxable equivalent basis, decreased five basis points to 3.04% over the past twelve months. The yield on interest-earning assets increased 24 basis points, offset by a 37 basis point increase in funding costs as compared to the same period of 2018.
The provision for loan losses totaled $4.4 million for the nine months ended September 30, 2019 and $17.0 million for the same period of 2018. At September 30, 2019, nonperforming loans were $47.1 million, a decrease of $3.6 million, or 7.1% as compared to December 31, 2018. Net charge-offs were $3.3 million in the first nine months of 2019 as compared to $11.9 million in the same period of 2018 primarily due to the aforementioned $10.1 million charge-off of a legacy commercial real estate relationship in the third quarter of 2018. As a percentage of total portfolio loans, on an annualized basis, net charge-offs were 0.15% and 0.57% for the periods ended September 30, 2019 and 2018, respectively. Nonperforming loans as a percentage of total portfolio loans were 1.62%, 1.88% and 1.72% as of September 30, 2019, December 31, 2018 and September 30, 2018, respectively.
Noninterest income decreased $1.2 million, or 10.0%, to $10.8 million, excluding net securities gains, for the nine months ended September 30, 2019 as compared to the same period of 2018. This decrease was primarily due to 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, offset by higher fees on deposits and higher bank owned life insurance earnings. Securities gains of $1.6 million and $1.2 million were realized during the first nine months of 2019 and 2018, respectively, to take advantage of market opportunities and reduce the credit risk of the securities portfolio.
Total noninterest expense decreased $2.5 million, or 3.5%, for the first nine months of 2019 to $67.5 million as compared to $70.0 million in the same period of 2018. The reduction was primarily driven by decreases of $1.5 million in FDIC insurance expense, $1.5 million in legal and professional fees, $1.4 million in tax credit amortization and $3.4 million in OREO expenses and losses on sales and write-downs of OREO due to fewer properties under management.
The decrease in FDIC expense was primarily due to a lower rate assessment and the one-time credit for the deposit insurance funds taken in the third quarter of 2019. The decrease in legal and professional fees was related to regulatory and compliance reviews which were completed as of September 30, 2018. Offsetting these decreases were increases of $0.9 million in data processing expense due to our core conversion completed in the fourth quarter of 2018, $1.3 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 and $2.5 million in other expenses primarily comprised of increased ancillary systems, subscriptions, employee training and education.
Financial Condition
Total assets were $4.0 billion at September 30, 2019 and December 31, 2018. Total portfolio loans increased $199.9 million, or 7.4%, to $2.9 billion as of September 30, 2019 as compared to December 31, 2018. Nonperforming loans decreased $3.6 million to $47.1 million, or 7.1% as of September 30, 2019 as compared to $50.7 million at December 31, 2018. OREO decreased $10.6 million at September 30, 2019 as compared to December 31, 2018 due to the sale of properties during the first nine months of 2019. Closed retail bank offices declined $3.4 million from December 31, 2018 and have a remaining book value of $3.3 million at September 30, 2019.
Federal Reserve Bank excess reserves decreased $149.7 million at September 30, 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 decreased $48.3 million and is currently 18.3% of total assets at September 30, 2019 as compared to 19.4% of total assets at December 31, 2018. The decrease is a result of loan growth and active balance sheet management. We have further diversified the securities portfolio as to bond types, maturities and interest rate structures.
Total deposits were $3.5 billion as of September 30, 2019 and $3.6 billion as of December 31, 2018. Noninterest-bearing deposits increased by $19.0 million, or 3.5%, to $566.8 million as of September 30, 2019 as compared to $547.8 million as of December 31, 2018 and money market accounts increased $76.3 million, or 94.4%, due to recent special rate promotions during the first nine months of 2019. Offsetting these increases were decreases of $46.7 million, or 18.4%, in interest-bearing demand deposits, $41.4 million, or 6.8%, in savings accounts and $76.5 million in certificates of deposits as compared to December 31, 2018. Noninterest-bearing deposits comprised 16.1% and 15.3% of total deposits at September 30, 2019 and December 31, 2018, respectively.
The allowance for loan losses was 1.39% of total portfolio loans as of September 30, 2019 as compared to 1.45% as of December 31, 2018. General reserves as a percentage of total portfolio loans were 1.18% at September 30, 2019 as compared to 1.26% as of December 31, 2018. The allowance for loan losses was 85.6% of nonperforming loans as of September 30, 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 above the well-capitalized levels of federal banking regulatory agencies. The Bank's Tier 1 Capital ratio decreased to 13.46% as of September 30, 2019 as compared to 13.97% as of December 31, 2018. The Bank's leverage ratio was 10.26% at September 30, 2019 as compared to 9.69% as of December 31, 2018. The Bank's Total Risk-Based Capital ratio was 14.71% at September 30, 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 $4.0 billion in assets and 104 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.
Carter Bank & Trust
Wendy Bell, 276-656-1776
Executive Vice President & Chief Financial Officer
wendy.bell@carterbankandtrust.com
CARTER BANK & TRUST
CONSOLIDATED FINANCIAL DATA
BALANCE SHEETS
(Unaudited)
(Dollars in Thousands, except per share data) | | September 30, | | | December 31, | | | September 30, | |
| | 2019 | | | 2018 | | | 2018 | |
ASSETS | | | | | | | | | |
Cash and Due From Banks | | $ | 46,517 | | | $ | 47,413 | | | $ | 45,994 | |
Interest-Bearing Deposits in Other Financial Institutions | | | 44,540 | | | | 61,612 | | | | 39,669 | |
Federal Reserve Bank Excess Reserves | | | 35,108 | | | | 184,798 | | | | 89,373 | |
Total Cash and Cash Equivalents | | | 126,165 | | | | 293,823 | | | | 175,036 | |
| | | | | | | | | | | | |
Securities, Available-for-Sale, at Fair Value | | | 734,453 | | | | 782,758 | | | | 785,128 | |
Loans Held-for-Sale | | | 20,514 | | | | 2,559 | | | | - | |
Portfolio Loans | | | 2,903,701 | | | | 2,703,792 | | | | 2,807,016 | |
Allowance for Loan Losses | | | (40,331 | ) | | | (39,199 | ) | | | (40,378 | ) |
Portfolio Loans, net | | | 2,863,370 | | | | 2,664,593 | | | | 2,766,638 | |
| | | | | | | | | | | | |
Bank Premises and Equipment, net | | | 86,531 | | | | 85,841 | | | | 83,035 | |
Other Real Estate Owned, net | | | 23,112 | | | | 33,681 | | | | 39,338 | |
Goodwill | | | 58,726 | | | | 58,726 | | | | 58,726 | |
Federal Home Loan Bank Stock, at Cost | | | 3,688 | | | | - | | | | - | |
Bank Owned Life Insurance | | | 52,240 | | | | 51,161 | | | | 50,773 | |
Other Assets | | | 51,277 | | | | 66,457 | | | | 69,514 | |
TOTAL ASSETS | | $ | 4,020,076 | | | $ | 4,039,599 | | | $ | 4,028,188 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | |
Noninterest-Bearing Demand | | $ | 566,826 | | | $ | 547,773 | | | $ | 556,505 | |
Interest-Bearing Demand | | | 207,334 | | | | 254,015 | | | | 211,002 | |
Money Market | | | 157,123 | | | | 80,835 | | | | 77,811 | |
Savings | | | 569,392 | | | | 610,757 | | | | 634,206 | |
Certificates of Deposits | | | 2,021,306 | | | | 2,097,801 | | | | 2,109,861 | |
Total Deposits | | | 3,521,981 | | | | 3,591,181 | | | | 3,589,385 | |
Other Liabilities | | | 24,047 | | | | 12,204 | | | | 11,139 | |
TOTAL LIABILITIES | | | 3,546,028 | | | | 3,603,385 | | | | 3,600,524 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
SHAREHOLDERS' EQUITY | | | | | | | | | | | | |
Common Stock, Par Value $1.00 Per Share, Authorized 100,000,000 Shares; | | | | | | | | | | | | |
26,333,929 outstanding at September 30, 2019, | | | | | | | | | | | | |
26,270,174 outstanding at December 31, 2018 and 26,257,761 at September 30, 2018 | | | 26,334 | | | | 26,270 | | | | 26,258 | |
Additional Paid-in-Capital | | | 142,380 | | | | 142,175 | | | | 142,178 | |
Retained Earnings | | | 300,552 | | | | 277,835 | | | | 274,429 | |
Accumulated Other Comprehensive Income (Loss) | | | 4,782 | | | | (10,066 | ) | | | (15,201 | ) |
TOTAL SHAREHOLDERS' EQUITY | | | 474,048 | | | | 436,214 | | | | 427,664 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | | $ | 4,020,076 | | | $ | 4,039,599 | | | $ | 4,028,188 | |
| | | | | | | | | | | | |
PROFITABILITY RATIOS (ANNUALIZED) | | | | | | | | | | | | |
Return on Average Assets | | | 0.75 | % | | | 0.29 | % | | | 0.28 | % |
Return on Average Shareholders' Equity | | | 6.71 | % | | | 2.75 | % | | | 2.62 | % |
Portfolio Loan to Deposit Ratio | | | 82.45 | % | | | 75.29 | % | | | 78.20 | % |
Allowance to Total Portfolio Loans | | | 1.39 | % | | | 1.45 | % | | | 1.44 | % |
| | | | | | | | | | | | |
CAPITALIZATION RATIOS | | | | | | | | | | | | |
Shareholders' Equity to Average Assets | | | 11.59 | % | | | 10.70 | % | | | 10.73 | % |
Tier 1 Leverage Ratio | | | 10.26 | % | | | 9.69 | % | | | 9.56 | % |
Risk-Based Capital - Tier 1 | | | 13.46 | % | | | 13.97 | % | | | 13.43 | % |
Risk-Based Capital - Total | | | 14.71 | % | | | 15.22 | % | | | 14.68 | % |
| | | | | | | | | | | | | |
CARTER BANK & TRUST
INCOME STATEMENTS
(Unaudited)
(Dollars in Thousands, except per share data) | | Quarter-to-Date | | | Year-to-Date | |
| | September 30, | | | June 30, | | | September 30, | | | September 30, | | | September 30, | |
| | 2019 | | | 2019 | | | 2018 | | | 2019 | | | 2018 | |
Interest Income | | $ | 40,154 | | | $ | 40,068 | | | $ | 38,207 | | | $ | 119,361 | | | $ | 112,157 | |
Interest Expense | | | 12,084 | | | | 12,113 | | | | 10,079 | | | | 35,440 | | | | 27,341 | |
NET INTEREST INCOME | | | 28,070 | | | | 27,955 | | | | 28,128 | | | | 83,921 | | | | 84,816 | |
| | | | | | | | | | | | | | | | | | | | |
Provision for Loan Losses | | | 1,390 | | | | 1,369 | | | | 13,743 | | | | 4,386 | | | | 16,988 | |
NET INTEREST INCOME AFTER | | | 26,680 | | | | 26,586 | | | | 14,385 | | | | 79,535 | | | | 67,828 | |
PROVISION FOR LOAN LOSSES | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
NONINTEREST INCOME | | | | | | | | | | | | | | | | | | | | |
Gains on Sales of Securities, net | | | 659 | | | | 909 | | | | 195 | | | | 1,599 | | | | 1,195 | |
Service Charges, Commissions and Fees | | | 1,111 | | | | 892 | | | | 978 | | | | 3,229 | | | | 3,010 | |
Debit Card Interchange Fees | | | 1,340 | | | | 1,320 | | | | 1,171 | | | | 3,834 | | | | 3,538 | |
Insurance | | | 454 | | | | 369 | | | | 1,013 | | | | 1,097 | | | | 1,617 | |
Bank Owned Life Insurance Income | | | 362 | | | | 356 | | | | 380 | | | | 1,079 | | | | 773 | |
Gains on Sales of Bank Premises, net | | | - | | | | 178 | | | | 13 | | | | - | | | | - | |
Other Real Estate Owned Income | | | 96 | | | | 231 | | | | 729 | | | | 617 | | | | 2,244 | |
Other | | | 134 | | | | 324 | | | | 131 | | | | 906 | | | | 777 | |
TOTAL NONINTEREST INCOME | | | 4,156 | | | | 4,579 | | | | 4,610 | | | | 12,361 | | | | 13,154 | |
| | | | | | | | | | | | | | | | | | | | |
NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | |
Salaries and Employee Benefits | | | 12,952 | | | | 12,809 | | | | 12,318 | | | | 37,796 | | | | 37,185 | |
Occupancy Expense, net | | | 3,040 | | | | 2,836 | | | | 2,802 | | | | 8,703 | | | | 7,448 | |
FDIC Insurance Expense | | | (426 | ) | | | 433 | | | | 749 | | | | 721 | | | | 2,220 | |
Other Taxes | | | 747 | | | | 711 | | | | 725 | | | | 2,101 | | | | 1,845 | |
Telephone Expense | | | 557 | | | | 562 | | | | 584 | | | | 1,624 | | | | 1,896 | |
Professional and Legal Fees | | | 1,318 | | | | 980 | | | | 870 | | | | 2,947 | | | | 4,482 | |
Data Processing | | | 504 | | | | 409 | | | | 255 | | | | 1,634 | | | | 723 | |
Losses on Sales and Write-downs of Other Real Estate Owned, net | | | 293 | | | | 88 | | | | 2,977 | | | | 569 | | | | 2,404 | |
Losses on Sales and Write-downs of Bank Premises, net | | | 31 | | | | - | | | | - | | | | 23 | | | | 58 | |
Debit Card Expense | | | 620 | | | | 830 | | | | 720 | | | | 2,160 | | | | 2,034 | |
Tax Credit Amortization | | | 563 | | | | 563 | | | | 1,015 | | | | 1,689 | | | | 3,045 | |
Other Real Estate Owned Expense | | | 166 | | | | (46 | ) | | | 583 | | | | 209 | | | | 1,821 | |
Other | | | 2,412 | | | | 2,659 | | | | 1,762 | | | | 7,367 | | | | 4,852 | |
TOTAL NONINTEREST EXPENSE | | | 22,777 | | | | 22,834 | | | | 25,360 | | | | 67,543 | | | | 70,013 | |
| | | | | | | | | | | | | | | | | | | | |
INCOME (LOSS) BEFORE INCOME TAXES | | | 8,059 | | | | 8,331 | | | | (6,365) | | | | 24,353 | | | | 10,969 | |
Income Tax Provision | | | 458 | | | | 504 | | | | 1,164 | | | | 1,384 | | | | 2,470 | |
NET INCOME (LOSS) | | $ | 7,601 | | | $ | 7,827 | | | $ | (7,529) | | | $ | 22,969 | | | $ | 8,499 | |
| | | | | | | | | | | | | | | | | | | | |
Shares Outstanding, at End of Period | | | 26,333,929 | | | | 26,333,929 | | | | 26,257,761 | | | | 26,333,929 | | | | 26,257,761 | |
Average Shares Outstanding-Basic | | | 26,333,929 | | | | 26,333,929 | | | | 26,257,761 | | | | 26,320,472 | | | | 26,257,761 | |
Average Shares Outstanding-Diluted | | | 26,352,910 | | | | 26,347,635 | | | | 26,257,761 | | | | 26,331,268 | | | | 26,257,761 | |
| | | | | | | | | | | | | | | | | | | | |
PER SHARE DATA | | | | | | | | | | | | | | | | | | | | |
Basic Earnings Per Common Share | | $ | 0.29 | | | $ | 0.30 | | | $ | (0.29 | ) | | $ | 0.87 | | | $ | 0.32 | |
Diluted Earnings Per Common Share | | $ | 0.29 | | | $ | 0.30 | | | $ | (0.29 | ) | | $ | 0.87 | | | $ | 0.32 | |
Book Value | | $ | 18.00 | | | $ | 17.63 | | | $ | 16.29 | | | $ | 18.00 | | | $ | 16.29 | |
Tangible Book Value2 | | $ | 15.77 | | | $ | 15.40 | | | $ | 14.05 | | | $ | 15.77 | | | $ | 14.05 | |
Market Value | | $ | 18.89 | | | $ | 19.75 | | | $ | 19.40 | | | $ | 18.89 | | | $ | 19.40 | |
| | | | | | | | | | | | | | | | | | | | |
PROFITABILITY RATIOS (non-GAAP) | | | | | | | | | | | | | | | | | | | | |
Net Interest Margin (FTE)3 | | | 3.01 | % | | | 3.02 | % | | | 3.07 | % | | | 3.04 | % | | | 3.09 | % |
Core Efficiency Ratio4 | | | 71.63 | % | | | 71.59 | % | | | 63.76 | % | | | 70.08 | % | | | 64.03 | % |
| | | | | | | | | | | | | | | | | | | | |
CARTER BANK & TRUST
CONSOLIDATED SELECTED FINANCIAL DATA
NET INTEREST MARGIN (FTE) (QTD AVERAGES)
(Unaudited)
| | | | | | | | | | |
(Dollars in Thousands) | | September 30, 2019 | | | June 30, 2019 | | | September 30, 2018 | |
ASSETS | | Average Balance | | | Income/ Expense | | | Rate | | | Average Balance | | | Income/ Expense | | | Rate | | | Average Balance | | | Income/ Expense | | | Rate | |
Interest-Bearing Deposits with Banks | | $ | 99,827 | | | $ | 557 | | | | 2.21% | | | $ | 127,377 | | | $ | 763 | | | | 2.40% | | | $ | 76,422 | | | $ | 400 | | | | 2.08% | |
Tax-Free Investment Securities | | | 33,452 | | | | 332 | | | | 3.94% | | | | 91,148 | | | | 795 | | | | 3.50% | | | | 121,633 | | | | 1,146 | | | | 3.74% | |
Taxable Investment Securities | | | 751,665 | | | | 4,698 | | | | 2.48% | | | | 737,949 | | | | 4,283 | | | | 2.33% | | | | 737,647 | | | | 3,845 | | | | 2.07% | |
Tax-Free Loans | | | 373,167 | | | | 2,922 | | | | 3.11% | | | | 387,053 | | | | 3,088 | | | | 3.20% | | | | 414,652 | | | | 3,219 | | | | 3.08% | |
Taxable Loans | | | 2,526,509 | | | | 32,270 | | | | 5.07% | | | | 2,473,376 | | | | 31,929 | | | | 5.18% | | | | 2,406,854 | | | | 30,513 | | | | 5.03% | |
Federal Home Loan Bank Stock | | | 3,688 | | | | 58 | | | | 6.24% | | | | 1,581 | | | | 26 | | | | 6.60% | | | | - | | | | - | | | | - | |
Total Interest-Earning Assets | | $ | 3,788,308 | | | $ | 40,837 | | | | 4.28% | | | $ | 3,818,484 | | | $ | 40,884 | | | | 4.29% | | | $ | 3,757,208 | | | $ | 39,123 | | | | 4.13% | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Demand | | $ | 222,062 | | | $ | 404 | | | | 0.72% | | | $ | 257,754 | | | $ | 595 | | | | 0.93% | | | $ | 227,823 | | | $ | 491 | | | | 0.86% | |
Money Market | | | 156,509 | | | | 552 | | | | 1.40% | | | | 136,271 | | | | 517 | | | | 1.52% | | | | 92,861 | | | | 225 | | | | 0.96% | |
Savings | | | 572,716 | | | | 256 | | | | 0.18% | | | | 586,923 | | | | 498 | | | | 0.34% | | | | 646,387 | | | | 500 | | | | 0.31% | |
Certificates of Deposit | | | 2,048,043 | | | | 10,853 | | | | 2.10% | | | | 2,075,899 | | | | 10,483 | | | | 2.03% | | | | 2,090,147 | | | | 8,843 | | | | 1.68% | |
Total Interest-Bearing Deposits | | $ | 2,999,330 | | | $ | 12,065 | | | | 1.60% | | | $ | 3,056,847 | | | $ | 12,093 | | | | 1.59% | | | $ | 3,057,218 | | | $ | 10,059 | | | | 1.31% | |
Borrowings: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Federal Funds Purchased | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 2,701 | | | | 20 | | | | 2.89% | |
Other Borrowings | | | 1,226 | | | | 19 | | | | 6.15% | | | | 1,029 | | | | 20 | | | | 7.80% | | | | - | | | | - | | | | - | |
Total Borrowings | | | 1,226 | | | | 19 | | | | 6.15% | | | | 1,029 | | | | 20 | | | | 7.80% | | | | 2,701 | | | | 20 | | | | 2.89% | |
Total Interest-Bearing Liabilities | | $ | 3,000,556 | | | $ | 12,084 | | | | 1.60% | | | $ | 3,057,876 | | | $ | 12,113 | | | | 1.59% | | | $ | 3,059,919 | | | $ | 10,079 | | | | 1.31% | |
Net Interest Income | | | | | | $ | 28,753 | | | | | | | | | | | $ | 28,771 | | | | | | | | | | | $ | 29,044 | | | | | |
Net Interest Margin | | | | | | | | | | | 3.01% | | | | | | | | | | | | 3.02% | | | | | | | | | | | | 3.07% | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CARTER BANK & TRUST
CONSOLIDATED SELECTED FINANCIAL DATA
NET INTEREST MARGIN (FTE) (YTD AVERAGES)
(Unaudited)
(Dollars in Thousands) | | September 30, 2019 | | | September 30, 2018 | |
ASSETS | | Average Balance | | | Income/ Expense | | | Rate | | | Average Balance | | | Income/ Expense | | | Rate | |
Interest-Bearing Deposits with Banks | | $ | 132,855 | | | $ | 2,341 | | | | 2.36 | % | | $ | 126,171 | | | $ | 1,762 | | | | 1.87 | % |
Tax-Free Investment Securities | | | 78,235 | | | | 2,145 | | | | 3.67 | % | | | 167,350 | | | | 4,348 | | | | 3.47 | % |
Taxable Investment Securities | | | 730,519 | | | | 13,103 | | | | 2.40 | % | | | 766,345 | | | | 11,664 | | | | 2.03 | % |
Tax-Free Loans | | | 386,993 | | | | 9,324 | | | | 3.22 | % | | | 424,223 | | | | 9,829 | | | | 3.10 | % |
Taxable Loans | | | 2,465,823 | | | | 94,773 | | | | 5.14 | % | | | 2,312,818 | | | | 87,531 | | | | 5.06 | % |
Federal Home Loan Bank Stock | | | 1,770 | | | | 84 | | | | 6.35 | % | | | - | | | | - | | | | - | |
Total Interest-Earning Assets | | $ | 3,796,195 | | | $ | 121,770 | | | | 4.29 | % | | $ | 3,796,907 | | | $ | 115,134 | | | | 4.05 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Demand | | $ | 250,163 | | | $ | 1,640 | | | | 0.88 | % | | $ | 250,070 | | | $ | 1,410 | | | | 0.75 | % |
Money Market | | | 128,035 | | | | 1,312 | | | | 1.37 | % | | | 100,511 | | | | 525 | | | | 0.70 | % |
Savings | | | 588,529 | | | | 1,240 | | | | 0.28 | % | | | 678,308 | | | | 1,539 | | | | 0.30 | % |
Certificates of Deposit | | | 2,074,015 | | | | 31,190 | | | | 2.01 | % | | | 2,047,643 | | | | 23,847 | | | | 1.56 | % |
Total Interest-Bearing Deposits | | $ | 3,040,742 | | | $ | 35,382 | | | | 1.56 | % | | $ | 3,076,532 | | | $ | 27,321 | | | | 1.19 | % |
Borrowings: | | | | | | | | | | | | | | | | | | | | | | | | |
Federal Funds Purchased | | | - | | | | - | | | | - | | | | 910 | | | | 20 | | | | 2.89 | % |
Other Borrowings | | | 872 | | | | 59 | | | | 9.05 | % | | | - | | | | - | | | | - | |
Total Borrowings | | | 872 | | | | 59 | | | | 9.05 | % | | | 910 | | | | 20 | | | | 2.89 | % |
Total Interest-Bearing Liabilities | | $ | 3,041,614 | | | $ | 35,441 | | | | 1.56 | % | | $ | 3,077,442 | | | $ | 27,341 | | | | 1.19 | % |
Net Interest Income | | | | | | $ | 86,329 | | | | | | | | | | | $ | 87,793 | | | | | |
Net Interest Margin | | | | | | | | | | | 3.04 | % | | | | | | | | | | | 3.09 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
CARTER BANK & TRUST
CONSOLIDATED SELECTED FINANCIAL DATA
LOANS AND LOANS HELD-FOR-SALE
(Unaudited)
| | | | | | | | | |
| | September 30, | | | December 31, | | | September 30, | |
(Dollars in Thousands) | | 2019 | | | 2018 | | | 2018 | |
Commercial | | | | | | | | | |
Commercial Real Estate | | $ | 1,421,850 | | | $ | 1,381,231 | | | $ | 1,409,090 | |
Commercial and Industrial | | | 649,190 | | | | 660,872 | | | | 816,124 | |
Commercial Construction | | | 289,715 | | | | 238,016 | | | | 188,702 | |
Total Commercial Loans | | | 2,360,755 | | | | 2,280,119 | | | | 2,413,916 | |
Consumer | | | | | | | | | | | | |
Residential Mortgages | | | 446,378 | | | | 339,307 | | | | 294,980 | |
Other Consumer | | | 72,917 | | | | 73,058 | | | | 80,790 | |
Consumer Construction | | | 23,651 | | | | 11,308 | | | | 14,529 | |
Total Consumer Loans | | | 542,946 | | | | 423,673 | | | | 390,299 | |
Total Portfolio Loans | | | 2,903,701 | | | | 2,703,792 | | | | 2,804,215 | |
Loans Held-for-Sale | | | 20,514 | | | | 2,559 | | | | - | |
Total Loans | | $ | 2,924,215 | | | $ | 2,706,351 | | | $ | 2,804,215 | |
| | | | | | | | | | | | | |
CARTER BANK & TRUST
CONSOLIDATED SELECTED FINANCIAL DATA
ASSET QUALITY DATA
(Unaudited)
(Dollars in Thousands) | | September 30, | | | December 31, | | | September 30, | |
Nonperforming Loans | | 2019 | | | 2018 | | | 2018 | |
Real Estate | | $ | 7,759 | | | $ | 3,289 | | | $ | 43 | |
Consumer | | | 363 | | | | 65 | | | | - | |
Commercial | | | 606 | | | | 606 | | | | - | |
Total Nonperforming Loans | | | 8,728 | | | | 3,960 | | | | 43 | |
| | | | | | | | | | | | |
Nonperforming Troubled Debt Restructurings | | | | | | | | | | | | |
Real Estate | | | 38,377 | | | | 46,771 | | | | 48,124 | |
Consumer | | | - | | | | - | | | | - | |
Commercial | | | - | | | | - | | | | - | |
Total Nonperforming Troubled Debt Restructurings | | | 38,377 | | | | 46,771 | | | | 48,124 | |
Total Nonperforming Loans and Troubled Debt Restructurings | | | 47,105 | | | | 50,731 | | | | 48,167 | |
Other Real Estate Owned | | | 23,112 | | | | 33,681 | | | | 39,338 | |
Total Nonperforming Assets | | $ | 70,217 | | | $ | 84,412 | | | $ | 87,505 | |
| | | | | | | | | | | | |
| | | | | | | | | | |
| | September 30, | | | December 31, | | | September 30, | |
| | 2019 | | | 2018 | | | 2018 | |
Nonperforming Loans | | $ | 47,105 | | | $ | 50,731 | | | $ | 48,167 | |
Other Real Estate Owned | | | 23,112 | | | | 33,681 | | | | 39,338 | |
Nonperforming Assets | | | 70,217 | | | | 84,412 | | | | 87,505 | |
| | | | | | | | | | | | |
Troubled Debt Restructurings (Nonaccruing) | | | 38,377 | | | | 46,771 | | | | 48,124 | |
Troubled Debt Restructurings (Accruing) | | | 113,725 | | | | 114,806 | | | | 291,698 | |
Total Troubled Debt Restructurings | | $ | 152,102 | | | $ | 161,577 | | | $ | 339,822 | |
| | | | | | | | | | | | |
Nonperforming Loans to Total Portfolio Loans | | | 1.62 | % | | | 1.88 | % | | | 1.72 | % |
Nonperforming Assets to Total Portfolio Loans plus Other Real Estate Owned | | | 2.40 | % | | | 3.08 | % | | | 3.07 | % |
Allowance for Loan Losses to Total Portfolio Loans | | | 1.39 | % | | | 1.45 | % | | | 1.44 | % |
Allowance for Loan Losses to Nonperforming Loans | | | 85.62 | % | | | 77.27 | % | | | 83.83 | % |
Net Loan Charge-offs (Recoveries) | | $ | 3,254 | | | $ | 12,989 | | | $ | 11,928 | |
Net Loan Charge-offs (Recoveries) (Annualized) to Average Loans | | | 0.15 | % | | | 0.47 | % | | | 0.58 | % |
| | | | | | | | | | | | | |
CARTER BANK & TRUST
CONSOLIDATED SELECTED FINANCIAL DATA
ALLOWANCE FOR LOAN LOSSES
(Unaudited)
| | September 30, | | | December 31, | | | September 30, | |
(Dollars in Thousands) | | 2019 | | | 2018 | | | 2018 | |
Balance Beginning of Year | | $ | 39,199 | | | $ | 35,318 | | | $ | 35,318 | |
Provision for Loan Losses | | | 4,386 | | | | 16,870 | | | | 16,988 | |
Charge-offs: | | | | | | | | | | | | |
Real Estate Loans | | | 659 | | | | 11,924 | | | | 11,749 | |
Consumer Loans | | | 3,039 | | | | 2,710 | | | | 1,727 | |
Commercial Loans | | | 3 | | | | 20 | | | | 6 | |
Total Charge-offs | | | 3,701 | | | | 14,654 | | | | 13,482 | |
Recoveries: | | | | | | | | | | | | |
Real Estate Loans | | | - | | | | 1,415 | | | | 1,415 | |
Consumer Loans | | | 447 | | | | 250 | | | | 139 | |
Commercial Loans | | | - | | | | - | | | | - | |
Total Recoveries | | | 447 | | | | 1,665 | | | | 1,554 | |
Total Net Charge-offs | | | 3,254 | | | | 12,989 | | | | 11,928 | |
Balance End of Year | | $ | 40,331 | | | $ | 39,199 | | | $ | 40,378 | |
| | | | | | | | | | | | |
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.
| | | | | | | |
2Tangible Equity | | Quarter-to-Date | | | Year-to-Date | |
| | September 30, | | | June 30, | | | September 30, | | | September 30, | | | September 30, | |
| | 2019 | | | 2019 | | | 2018 | | | 2019 | | | 2018 | |
Total Shareholders' Equity | | $ | 474,048 | | | $ | 464,233 | | | $ | 427,664 | | | $ | 474,048 | | | $ | 427,664 | |
Less: Goodwill | | | 58,726 | | | | 58,726 | | | | 58,726 | | | | 58,726 | | | | 58,726 | |
Tangible Equity | | | 415,322 | | | | 405,507 | | | | 368,938 | | | | 415,322 | | | | 368,938 | |
| | | | | | | | | | | | | | | | | | | | |
Shares Outstanding at End of Period | | | 26,333,929 | | | | 26,333,929 | | | | 26,257,761 | | | | 26,333,929 | | | | 26,257,761 | |
Tangible Book Value Per Common Share | | $ | 15.77 | | | $ | 15.40 | | | $ | 14.05 | | | $ | 15.77 | | | $ | 14.05 | |
| | | | | | | | | | | | | | | | | | | | | |
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 | | | Year-to-Date | |
| | September 30, | | | June 30, | | | September 30, | | | September 30, | | | September 30, | |
| | 2019 | | | 2019 | | | 2018 | | | 2019 | | | 2018 | |
Interest Income | | $ | 40,154 | | | $ | 40,068 | | | $ | 38,207 | | | $ | 119,361 | | | $ | 112,157 | |
Interest Expense | | | (12,084 | ) | | | (12,113 | ) | | | (10,079 | ) | | | (35,440 | ) | | | (27,341 | ) |
Net Interest Income | | | 28,070 | | | | 27,955 | | | | 28,128 | | | | 83,921 | | | | 84,816 | |
Tax Equivalent Adjustment3 | | | 683 | | | | 816 | | | | 916 | | | | 2,408 | | | | 2,977 | |
NET INTEREST INCOME (FTE) (Non-GAAP) | | $ | 28,753 | | | $ | 28,771 | | | $ | 29,044 | | | $ | 86,329 | | | $ | 87,793 | |
Net Interest Income (Annualized) | | | 114,074 | | | | 115,400 | | | | 115,229 | | | | 115,422 | | | | 117,379 | |
Average Earning Assets | | | 3,788,308 | | | | 3,818,484 | | | | 3,757,208 | | | $ | 3,796,195 | | | $ | 3,796,907 | |
NET INTEREST MARGIN (FTE) (Non-GAAP) | | | 3.01% | | | | 3.02% | | | | 3.07% | | | | 3.04% | | | | 3.09% | |
| | | | | | | | | | | | | | | | | | | | | |
4Core Efficiency Ratio (Non-GAAP)
| | | | | | | |
| | Quarter-to-Date | | | Year-to-Date | |
| | September 30, | | | June
30, | | | September 30, | | | September 30, | | | September 30, | |
| | 2019 | | | 2019 | | | 2018 | | | 2019 | | | 2018 | |
NONINTEREST EXPENSE | | $ | 22,777 | | | $ | 22,834 | | | $ | 25,360 | | | $ | 67,543 | | | $ | 70,013 | |
Less: One Time Regulatory and Compliance | | | - | | | | - | | | | - | | | | - | | | | (1,853 | ) |
Less: Losses on Sales and Write-downs of Other Real Estate Owned, net | | | (293 | ) | | | (88 | ) | | | (2,977 | ) | | | (569 | ) | | | (2,404 | ) |
Less: Losses on Sales and Write-downs of Bank Premises, net | | | (31 | ) | | | - | | | | - | | | | (23 | ) | | | (58 | ) |
Less: Tax Credit Amortization | | | (563 | ) | | | (563 | ) | | | (1,015 | ) | | | (1,689 | ) | | | (3,045 | ) |
Plus: Regulatory Review | | | - | | | | - | | | | - | | | | - | | | | 323 | |
Plus: Contingent Liability | | | - | | | | 331 | | | | (331 | ) | | | 331 | | | | (331 | ) |
Less: Conversion Expense | | | - | | | | - | | | | (177 | ) | | | (2 | ) | | | (448 | ) |
Plus: FDIC Assessment Credits | | | 1,056 | | | | - | | | | - | | | | 1,056 | | | | - | |
Plus: Conversion Vacation Accrual | | | 86 | | | | 291 | | | | - | | | | 646 | | | | - | |
CORE NONINTEREST EXPENSE (Non-GAAP) | | $ | 23,032 | | | $ | 22,805 | | | $ | 20,860 | | | $ | 67,293 | | | $ | 62,197 | |
| | | | | | | | | | | | | | | | | | | | |
NET INTEREST INCOME | | $ | 28,070 | | | $ | 27,955 | | | $ | 28,128 | | | $ | 83,921 | | | $ | 84,816 | |
Plus: Taxable Equivalent Adjustment3 | | | 683 | | | | 816 | | | | 916 | | | | 2,408 | | | | 2,977 | |
NET INTEREST INCOME (FTE) (Non-GAAP) | | $ | 28,753 | | | $ | 28,771 | | | $ | 29,044 | | | $ | 86,329 | | | $ | 87,793 | |
Less: Gains on Sales of Securities, net | | | (659 | ) | | | (909 | ) | | | (195 | ) | | | (1,599 | ) | | | (1,195 | ) |
Less: Gains on Sales of Other Real Estate Owned, net | | | - | | | | - | | | | - | | | | - | | | | - | |
Less: Gains on Sales Bank Premises, net | | | - | | | | (178 | ) | | | (13 | ) | | | - | | | | - | |
Less: Other Real Estate Owned Income | | | (96 | ) | | | (231 | ) | | | (729 | ) | | | (617 | ) | | | (2,244 | ) |
Less: Other Gains | | | - | | | | (176 | ) | | | - | | | | (447 | ) | | | (374 | ) |
Noninterest Income | | | 4,156 | | | | 4,579 | | | | 4,610 | | | | 12,361 | | | | 13,154 | |
CORE NET INTEREST INCOME (FTE) (Non-GAAP) plus NONINTEREST INCOME | | $ | 32,154 | | | $ | 31,856 | | | $ | 32,717 | | | $ | 96,027 | | | $ | 97,134 | |
| | | | | | | | | | | | | | | | | | | | |
CORE EFFICIENCY RATIO (Non-GAAP) | | | 71.63% | | | | 71.59% | | | | 63.76% | | | | 70.08% | | | | 64.03% | |
| | | | | | | | | | | | | | | | | | | | | |
SOURCE: Carter Bank & Trust
View source version on accesswire.com:
https://www.accesswire.com/563919/Carter-Bank-Trust-Announces-Third-Quarter-2019-Financial-Results
