Carolina Financial Corporation
Carolina Financial — Q2 2019 Earnings Presentation
18 slides from Carolina Financial's earnings presentation, Jul 25, 2019
Slide 1: Second Quarter 2019 Earnings Release Investor Presentation
Second Quarter 2019 Earnings Release Investor Presentation NASDAQ: CARO July 25, 2019
Slide 2: Disclaimer
2 Disclaimer Certain statements in this presentation 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
Slide 3: Second Quarter Highlights
3 Second Quarter Highlights • 2019 Q 2 net income increased 0 . 7 % to $ 15 . 1 million, or $ 0 . 67 per diluted share compared to $ 15 . 0 million, or $ 0 . 70 per diluted share for 2018 Q 2 . ( 1 ) • 2019 Q 2 operating earnings (Non - GAAP) increased 4 . 2 % to $ 16 . 3 million, or $ 0 . 73 per di
Slide 4: Announced Merger of Carolina Trust BancShares into Carolina Financial
4 Announced Merger of Carolina Trust BancShares into Carolina Financial • On July 15, 2019, the Company announced the execution of an agreement to acquire Carolina Trust BancShares , Inc. • Carolina Trust BancShares , Inc. (CART) had assets of $621 million, loans receivable of $474 million and depos
Slide 5: Overview of Pro Forma Franchise
5 Overview of Pro Forma Franchise CARO (61) CART (11) LPO (2) Total Assets Net Loans Total Deposits Loans / Deposits ~$4.5B Pro Forma Highlights Tangible Equity Market Cap ~$850M ~93% ~$3.3B ~$3.1B Source: S&P Global Market Intelligence ~$500M
Slide 6: Projected Population Growth (2019 – 2024) | Top 25 Southeast MSAs
6 9.66 8.46 8.13 8.11 8.02 7.86 7.55 7.53 7.51 7.29 7.09 6.92 6.79 6.78 6.72 6.72 6.62 6.60 6.52 6.44 6.18 6.15 6.07 6.06 5.93 Projected Population Growth (%) Top 25 Southeast Markets Projected Population Growth (2019 – 2024) | Top 25 Southeast MSAs (1) (1) Includes Southeast MSAs with a minimum pop
Slide 7: Community Banking Segment
Community Banking Segment Ome" Have a nice bank
Slide 8: Community Banking Segment Results
8 Community Banking Segment Results Bank Segment Earnings (1) • 2019Q2 community banking segment net income of $15.8 million, or $0.71 per diluted share, versus $14.9 million for 2018Q2, or $0.70 per diluted share. • 2019Q2 operating earnings (Non - GAAP) of $16.0 million, or $0.71 per diluted share
Slide 9: Net Interest Margin
9 Net Interest Margin (1) (1) The June 30, 2019 information is preliminary and based on Company data available at the time of the presentation. (2) Net interest margin – tax - equivalent. (3) Net interest margin - core and yield on loans receivable - core excludes the impact of purchase accounting a
Slide 10: Bank Segment Operating Efficiencies
10 Bank Segment Operating Efficiencies • Bank Segment noninterest expenses as a percentage of average consolidated assets of 1.96% in 2019Q2 compared to 2.13% in 2018Q2. • Operating Bank Segment noninterest expenses (Non - GAAP) as a percentage of average consolidated assets of 1.96% in 2019Q2 compa
Slide 11: Strong Balance Sheet Growth
11 Strong Balance Sheet Growth • Loans receivable, gross grew at an annualized rate of 10.0% since 12 - 2018. • Total deposits increased $87.9 million since 12 - 2018. Total Deposits ($MM) (1)(2) Total Loans ($MM) (1)(2) Total Assets($MM) (1)(2) (1) Includes assets acquired and liabilities assumed i
Slide 12: Diversified Loan Mix and Solid Asset Quality
12 Diversified Loan Mix and Solid Asset Quality NPAs/ Assets (%) (1)(2) • We have a diversified loan mix, with a focus on lower risk assets. • Our asset quality remains favorable, with NPA’s / assets of 0.37% at June 30, 2019. • Provision for loan loss of $680,000 in 2019Q2 primarily driven by organ
Slide 13: Improving Deposit Mix
13 Improving Deposit Mix Deposit Composition (6/30/2019) (1) • We grew Total Deposits $87.9 million since December 31, 2018. 2019Q2 Cost of Deposits: 0.98% (1) The June 30, 2019 information is preliminary and based on Company data available at the time of the presentation. (1)
Slide 14: Wholesale Mortgage Segment
14 Wholesale Mortgage Segment
Slide 15: Wholesale Mortgage Platform
15 Wholesale Mortgage Segment Wholesale Mortgage Platform (2) • Wholesale Mortgage segment LHFS originations decreased in 2019Q2 compared to 2018Q2; however, the margin increased 14 bps in 2019Q2 from 2018Q2. • Wholesale Mortgage 2019Q2 segment net loss of $92,000 had no impact to earnings per dilut
Slide 16: Focus on Stockholder Results
16 Focus on Stockholder Results • ROAA and ROATCE of 1.55% and 13.24%, respectively, for 2019Q2. • Operating ROAA and ROATCE (Non - GAAP) of 1.68% and 14.28%, respectively, for 2019Q2. • Diluted Earnings Per Share of $0.67 2019Q2 compared to $0.70 for 2018Q2. • Diluted Operating Earnings Per Share (
Slide 17: Overall Summary of the 2019 Second Quarter
17 Overall Summary of the 2019 Second Quarter • Announcement of agreement to acquire Carolina Trust BancShares , Inc . • Very good organic loan growth of $ 60 . 6 million resulting in provision for loan losses of $ 680 , 000 with NPAs remaining flat . • Net interest margin - core (Non - GAAP) ( 2 )
Slide 18: Exhibit
18 Exhibit (1) (1) The June 30, 2019 information is preliminary and based on Company data available at the time of the presentation. (2) Net interest margin – tax - equivalent. (3) Net interest margin – core and yield on loans receivable – core excludes the impact of purchase accounting accretion, l