Carolina Trust Bank Reports 4th Quarter, Full Year 2013 Results

Carolina Trust Bank Reports 4th Quarter, Full Year 2013 Results

Increase in Non-Interest Expense, Loan Loss Provision Result in 4Q Loss

LINCOLNTON, N.C., Jan. 17, 2014 (GLOBE NEWSWIRE) -- Carolina Trust Bank
(Nasdaq: CART) today reported a full year 2013 net loss of $1.64 million, or
$0.35 per diluted share attributable to common shareholders, compared to a
2012 net profit of $146,000, or $0.03 per diluted share available to common
shareholders. Excluding payment of dividends on preferred shares, the bank
reported a net loss of $1.45 million for the full year 2013.

The company posted a fourth quarter 2013 net loss of $380,000, or $0.08 per
diluted share attributable to common shareholders, compared to a net loss of
$572,000 for the fourth quarter of 2012, or $0.12 per diluted share
attributable to common shareholders. Fourth quarter earnings were impacted by
loan loss provisions and non-interest expense due to valuation write-downs on
foreclosed property held by the bank.

Despite losses incurred for the year and the fourth quarter, core earnings
remained strong. For the fourth quarter 2013, loans were up and interest
expense decreased for the 16th straight quarter.

"Despite the challenges of the past few years, our bank is strong
fundamentally." said Jerry L. Ocheltree, who assumed the role of president and
chief executive officer on Jan. 1, 2014, following the retirement of J.
Michael Cline. "I look forward to becoming a part of the growing success of
our bank in the communities we serve."

Financial Highlights

2013-2012 Comparisons

  *Total loans grew $2.41 million, or 1.09%
  *Net interest income increased $214,000, or 2.05%
  *Interest expense declined by $736,000, or 25.59%, due to disciplined
    deposit pricing
  *Non-interest expense rose $1.70 million, or 18.56%
  *Non-accrual loans decreased $5.21 million, or 61.31%
  *Total nonperforming assets fell $5.46 million, or 43.11%

4Q-3Q 2013 Comparisons

Income Statement

  *Total revenues, less interest expense, were down marginally from third
    quarter 2013
    -- Net interest income up $12,000, or 0.43%
    -- Interest expense decreased $29,000, or 5.57%
    -- Non-interest income down $18,000, or 6.95%
    -- Non-interest expense increased $336,000, or 14.14%
    -- Net interest margin remained at 4.37%
    -- Provision for loan loss increased $238,000, or 59.65%

Balance Sheet

  *Total loans of $223.89 million increased $1.30 million from third quarter
    2013
  *Total deposits of $228.89 million, down $4.09 million from previous
    quarter 2013
  *Total assets were $266.44 million, compared to $268.56 million from prior
    quarter 2013
  *Reserve for Loan Loss increased $81,000 from third quarter 2013
  *Credit quality improved in the fourth quarter 2013 as a result of loan
    charge-offs
    -- Total nonperforming assets declined $901,000, or 11.12%
    -- Other Real Estate Owned, or foreclosed property, decreased $110,000 or
    2.74%
    -- Non-accrual loans fell $801,000, or 19.60%
    -- Net loan charge-offs totaled $555,000, up $81,000, or 17.09%
    -- Net loan charge-offs to average loans were 0.25%, up marginally from
    0.21%
  *Capital levels continued to exceed "well-capitalized" requirements in
    fourth quarter 2013 with Tier 1 Leverage Ratio of 8.24%, Tier 1 Risk-based
    Capital Ratio of 9.53%, and Total Risk-based Capital Ratio of 10.79%

Revenue

Link-quarter improvements in net interest income were offset by an increase in
non-interest expense of $336,000 and an increase of $238,000 to loan loss
provisions. Net interest income was $2.78 million in the fourth quarter 2013,
compared to $2.77 million in the third quarter and $2.68 million from fourth
quarter 2012. For full year 2013, net interest income increased $214,000 to
$10.68 million, or 2.05%, from 2012.

Due to ongoing management of funding costs, net interest margin improved to
4.37% on a year-over-year basis from 4.27% at Dec. 31, 2012. Though net
interest margin saw no change from prior quarter, interest expense has trended
favorably 16 straight quarters. Interest expense was $492,000, down $29,000
from third quarter, and $156,000 from fourth quarter 2012. On a year-over-year
basis, interest expense declined by $736,000, or 25.59%. Provision for loan
loss was $637,000 for the fourth quarter 2013, compared to $399,000 for the
prior quarter, and $1.10 million from fourth quarter 2012.

Loans and deposits

Total loans increased for the fourth straight quarter as the company's
portfolio grew by a net $1.30 million in loans from third quarter 2013, and
$2.41 million from fourth quarter 2012. Total deposits were $228.89 million at
December 31, 2013, compared to $232.98 million at Sept. 30, 2013 and $233.86
at Dec. 31, 2012.

A reduction of higher-priced brokered deposits over the past year has
contributed to lower interest expenses and higher net interest margins. Core
deposits, in the form of checking, savings and certificate of deposit
accounts, remained strong.

Capital

Total shareholders' equity was $22.26 million at Dec. 31, 2013, compared to
$22.97 million at Sept. 30, 2013, and $24.94 million at Dec. 31, 2012. Capital
levels continue to exceed regulatory requirements for being
"well-capitalized." Tier 1 Leverage Ratio was 8.24% compared to 8.44% at the
prior quarter end; Tier 1 Risk-based Capital Ratio was 9.53% compared to 9.84%
at the previous quarter end; and Total Risk-based Capital Ratio was 10.79%
compared to 11.09% at the prior quarter end.

Asset Quality

Asset quality continued to show improvement on a linked-quarter and
year-over-year basis. Total nonperforming assets were $7.20 million at Dec.
31, 2013, compared to $8.11 million at Sept. 30, 2013, and $12.66 million at
Dec. 31, 2012. Nonperforming assets were 2.70% of total assets, compared to
3.02% at the previous quarter end and 4.67% Dec. 31, 2012.

Non-accrual loans were $3.29 million at Dec. 31, 2013, down $801,000 on a
linked-quarter basis and $5.21 million from Dec. 31, 2012. Other Real Estate,
or foreclosed property, declined $110,000 from Sept. 30, 2013, and $261,000
from Dec. 31, 2012. Loans 30 to 89 days past due were $2.22 million at Dec.
31, 2013, down $1.10 million from Sept. 30, 2013, and down $1.42 million from
Dec. 31, 2012.

Net loan charge-offs of $555,000 for fourth quarter 2013 reflect an increase
of $81,000 when compared to the third quarter of 2013, but declined $218,000
when compared to the fourth quarter of 2012. Allowance for loan losses to
total loans was 1.82%, up slightly from 1.79% at Sept. 30, 2013, but down from
2.16% at Dec. 31, 2012.

Carolina Trust Bank is a full service state chartered bank headquartered in
Lincolnton, N.C., operating seven full service branches in Lincoln, Catawba,
Gaston and Rutherford Counties in western North Carolina and a loan production
office in Hickory, N.C.

Forward-Looking Statement;

This news release contains forward-looking statements. Words such as
"anticipates," " believes," "estimates," "expects," "intends," "should,"
"will," variations of such words and similar expressions are intended to
identify forward-looking statements. These statements reflect management's
current beliefs as to the expected outcomes of future events and are not
guarantees of future performance. These statements involve certain risks,
uncertainties and assumptions that are difficult to predict with regard to
timing, extent, likelihood and degree of occurrence. Therefore, actual results
and outcomes may materially differ from what may be expressed or forecasted in
such forward-looking statements. Factors that could cause a difference
include, among others: changes in the national and local economies or market
conditions; changes in interest rates, deposit flows, loan demand and asset
quality, including real estate and other collateral values; changes in banking
regulations and accounting principles, policies or guidelines; and the impact
of competition from traditional or new sources. These and other factors that
may emerge could cause decisions and actual results to differ materially from
current expectations. Carolina Trust Bank takes no obligation to revise,
update, or clarify forward-looking statements to reflect events or conditions
after the date of this release.

Carolina Trust                                                             
Bank
                                                                          
              (Dollars in thousands)                                          
              December   September  June 30    March 31   December             
               31         30                               31
              2013       2013       2013       2013       2012                 
Balance Sheet                                                              
Data:
Total Assets   266,435   268,555   265,554   275,597   271,051             
Total Deposits 228,885   232,978   232,621   240,589   233,861             
Total Loans    223,891   222,594   216,055   215,984   221,480             
Reserve for    4,066     3,985     4,060     4,836     4,773               
Loan Loss
Total
Shareholders   22,256    22,973    22,523    24,871    24,935              
Equity
                                                                          
                                                                          
              (Dollars in thousands, except per share data)
              For the three months ended                            For the Year Ended
              December   September  June 30    March 31   December   December   December
               31         30                               31         31         31
              2013       2013       2013       2013       2012       2013       2012
Income and Per                                                             
Share Data:
Interest       3,270     3,287     3,162     3,095     3,324     12,815    13,337
Income
Interest       492       521       538       588       648       2,140     2,876
Expense
Net Interest   2,778     2,766     2,624     2,507     2,676     10,675    10,461
Income
Provision for  637       399       835       413       1,100     2,285     2,367
Loan Loss
Net Interest
Income After   2,141     2,367     1,789     2,094     1,576     8,390     8,094
Provision
Non-interest   241       259       268       251       348       1,019     1,281
Income
Non-interest   2,713     2,377     3,500     2,268     2,593     10,858    9,158
Expense
Income (loss)  (331)     249       (1,443)   77        (669)     (1,449)   217
Before Taxes
Income Tax
Expense        --        --        --        --        --        --        --
(benefit)
Net Income     (331)     249       (1,443)   77        (669)     (1,449)   217
(loss)
                                                                          
Preferred      49        49        48        45        (97)      190       71
Stock Dividend
                                                                          
Income
available
(loss)         (380)     200       (1,491)   32        (572)     (1,639)   146
attributable
to common
shareholders
                                                                          
Net Income
(loss) Per                                                                 
Common Share:
Basic          (0.08)    0.04      (0.32)    0.01      (0.12)    (0.35)    0.03
Diluted        (0.08)    0.04      (0.32)    0.01      (0.12)    (0.35)    0.03
Average Common
Shares                                                                     
Outstanding:
Basic          4,634,702 4,634,702 4,634,482 4,634,482 4,634,482 4,634,565 4,634,379
Diluted        4,634,702 4,639,053 4,634,482 4,637,422 4,634,482 4,634,565 4,635,954
                                                                          
                                                                          
                                                                          
              December   September  June 30    March 31   December             
               31         30                               31
              2013       2013       2013       2013       2012                 
Capital                                                                    
Ratios:
Tier 1         8.24%      8.44%      8.24%      8.71%      8.61%                
Leverage Ratio
Tier 1
Risk-based     9.53%      9.84%      9.80%      10.79%     10.60%               
Capital Ratio
Total
Risk-based     10.79%     11.09%     11.06%     12.05%     11.86%               
Capital Ratio
                                                                          
Tangible       18,934    19,585    19,188    21,529    21,581              
Common Equity
Common Shares  4,634,702 4,634,702 4,634,482 4,634,482 4,634,482           
Outstanding
Book Value Per 4.09      4.23      4.14      4.65      4.66                
Common Share
                                                                          
Performance                                                                
Ratios:
Return on
Average Assets -0.49%     0.37%      -2.12%     0.11%      -0.95%               
(%)
Return on
Average Equity -5.78%     4.32%      -23.20%    1.24%      -9.93%               
(%)
Net Interest   4.37%      4.37%      4.09%      4.00%      4.27%                
Margin (%)
                                                                          
Asset Quality:                                                             
Delinquent
Loans ( 30-89  2,219     3,317     3,581     2,835     3,639               
days )
                                                                          
Delinquent
Loans ( 90     10        --        --        --        --                  
days or more )
Non-accrual    3,286     4,087     3,891     9,107     8,494               
Loans
OREO and
repossessed    3,908     4,018     4,811     3,542     4,169               
property
Total
Nonperforming  7,204     8,105     8,702     12,649    12,663              
Assets
                                                                          
Restructured   4,219     5,247     4,465     4,711     4,983               
Loans
                                                                          
Nonperforming
Assets to      2.70%      3.02%      3.28%      4.59%      4.67%                
Total Assets
Nonperforming
Assets to      27.37%     30.07%     32.74%     42.58%     42.62%               
Equity Capital
& ALLL
Allowance for
Loan Losses to 56.44%     49.17%     46.66%     38.23%     37.69%               
Non-performing
Assets
Allowance for
Loan Losses to 1.82%      1.79%      1.88%      2.24%      2.16%                
Total Loans
Net Loan       555       474       1,609     350        773                  
Charge-Offs
Net Loan
Charge-Offs to 0.25%      0.21%      0.73%      0.16%      0.35%                
Average Loans
(%)
                                                                          
Note:
Financial                                                                  
information is
unaudited.

CONTACT: Jerry L. Ocheltree
         President and CEO
         Carolina Trust Bank
         (704) 735-1104
 
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