"Although fundamentals remain strong, the fourth quarter negatively impacted our overall performance for 2012," said President and CEO J. Michael Cline. "Despite the loss for the year, the Bank is on the right track and making significant balance sheet improvements. We're putting quality loans on our books despite an economy that still has many businesses sitting on the sidelines. We continue to see positive trends in lending, deposit pricing, and interest income. Our focus in 2013 is to maintain revenue growth, control expenses, and efficiently manage our operations."
Full Year 2012 Financial Highlights
- Net loss of $60,000 in 2012 reflected a $2.24 million net improvement over 2011.
- Funding costs declined by $1.18 million in 2012 from 2011, due to disciplined deposit pricing.
- Net interest income in 2012 increased by $1.50 million from 2011.
- Non-interest expense declined by $276,000 from 2011.
Total revenues, less interest expense, increased by $1.69 million to $11.74 million in 2012 from 2011. Net interest margin also benefitted from the bank's disciplined pricing, improving by 0.58% to 4.10% in 2012 from 3.52% in 2011.
For the year 2012, net loan charge-offs to average loans declined to 0.93% from 1.13% in 2011. Carolina Trust also realized significant improvements in Return on Average Assets and Return on Average Equity in 2012. ROAA for 2012 was 0.08% compared to -0.77% in 2011, and ROAE improved to 0.81% in 2012 from -7.74% the year before.
The U.S. Treasury recently sold its $4.0 million of preferred stock in Carolina Trust Bank to private investors. The bank subsequently repurchased $1.4 million of the outstanding preferred shares, thereby reducing future dividend payments to 65% of its original level.
"It has been a challenge for community banks that participated in the CPP to exit the program without significantly impacting capital levels," Cline said. "We believe that our ability to repurchase 35% of the outstanding preferred shares underscores the strength of our balance sheet. After the purchase, our capital ratios continue to exceed regulatory requirements for being well capitalized."