Strong Quarterly Performance - Report on Carolina Financial Corporation

Aug 04, 2015, 09:30 ET from

NEW YORK, August 4, 2015 /PRNewswire/ --

ACI Association has initiated research coverage on Carolina Financial Corporation (NASDAQ: CARO). Select highlights from the internally released reports are being made available to the general public (included below), with access to the entirety of the research available to new members.

Today, membership is open to readers on a complementary basis at the following URL:

Highlights from our CARO Report include:

  • Robust Q2 Results and Stable Regulatory Ratios - On July 17, 2015 Carolina Financial Corporation, the holding company of CresCom Bank, announced its financial results for the second quarter as well as H1 of FY15. Net income for the second quarter was reported to be $3.9 million or $0.41 per diluted share as compared to Q2 FY14 where the figure was $2.2 million or $0.24, thereby registering a Y-o-Y growth of 74%. For the first half of fiscal 2015, the net income figure totaled $6.9 million or $0.73 per diluted share vis-à-vis $4.2 million or $0.45 per diluted share reported in H1 FY14. As at June 30, 2015 the Company's regulatory capital ratios exceeded the minimum levels currently required.
  • Factors for Bottom Line Growth - The Company attributes the increase in net income to the significant growth in loans and securities, increased checking fees, and improved results from the Company's retail mortgage team as well as significantly improved results from Crescent Mortgage Company. In addition to these factors, the Bank recovered $460,000 of previously unrecognized interest income from a nonperforming asset that was paid off during June 2015 and recognized a $588,000 gain on interest rate swaps, which were partially offset by a $1.2 million loss on extinguishment of debt arising from the early pay-off of a high rate FHLB advance.
  • CresCom Bank's performance- The Bank's net income for the quarter stood at $2.8 million while for the first half of the fiscal the bank clocked in incomes of $5.3 million. This compares to net income of $1.8 million and $3.5 million for the three and six months ended June 30, 2014, respectively. The Bank continued to witness growth in core deposits (checking, savings and money market) with the figure growing by $5.3 million since December 31, 2014.
  • Crescent Mortgage Company - Crescent Mortgage Company's net income for the second quarter came in at $1.3 million whereas for the first half of the fiscal the figure was $2 million, as compared to figures of $0.61 million for Q2 FY14 and $1.1 million for H1 FY14. This increase in the net income was attributed to an increase in originations and margin expansion resulting in increased mortgage banking income.
  • Management Commentary on the Results - Jerry Rexroad, the Chief Executive Officer of Carolina Financial said that the Company reported another strong quarter of operating results with an increase in net income. He added that CresCom Bank continued to increase earnings while Crescent Mortgage Company reported improved results during the second quarter of 2015 as compared to the prior period. He concluded that these results reflect the successful integration efforts from the Company's recent 13 branch acquisition as well as the hard work and dedication of its team members.

To find out how this influences our rating on Carolina Financial Corporation read the full report in its entirely here:

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