Carter Bank & Trust Announces Fourth Quarter 2019 Financial Results

MARTINSVILLE, VA / ACCESSWIRE / January 28, 2020 / Carter Bank & Trust (the "Bank") (CARE) today announced net income of $3.6 million, or $0.14 diluted earnings per share, for the fourth quarter of 2019, as compared to net income of $7.6 million, or $0.29 diluted earnings per share, in the third quarter of 2019 and net income of $3.4 million, or $0.13 diluted earnings per share, for the fourth quarter of 2018. Pre-tax pre-provision earnings were $2.4 million, $9.4 million and $3.2 million for the quarters ended December 31, 2019, September 30, 2019 and December 31, 2018, respectively.

For the year ended December 31, 2019, net income was $26.6 million, or $1.01 diluted earnings per share, as compared to net income of $11.9 million, or $0.45 diluted earnings per share in 2018. Pre-tax pre-provision earnings were $31.2 million for the years ended December 31, 2019 and 2018.

Fourth Quarter 2019 Financial Highlights

• Net interest margin, on a fully taxable equivalent basis, increased five basis points to 3.06% over the linked quarter, but declined 10 basis points over the same quarter last year;

• Net interest income increased $0.4 million, or 1.3%, over the linked quarter, but decreased $0.7 million, or 2.3%, over the same quarter last year;

• Securities gains of $0.6 million were realized in the fourth quarter of 2019 to take advantage of market opportunities and reposition and diversify holdings in the securities portfolio, as compared to securities gains of $0.7 million in the linked quarter and $0.1 million in the same period of 2018;

• Loans were essentially flat as compared to the linked quarter due to several large commercial real estate loan pay-offs during the fourth quarter, but loans grew $198.1 million, or 7.3%, as compared to December 31, 2018;

• Provision for loan losses declined $2.4 million as compared to linked quarter due to loan growth muted by large commercial real estate pay-offs during the fourth quarter of 2019, continued improvement in asset quality and tightened underwriting standards and decreased $0.9 million as compared to the same quarter of 2018;

• Noninterest expense increased $7.7 million, or 33.8%, compared to linked quarter primarily due to one-time charges of $3.1 million of a write-down of legacy other real estate owned ("OREO") and $1.0 million of write-downs on retail branch offices marketed for sale. Other increases included $1.0 million in FDIC insurance due to the one-time credit in the third quarter of 2019, $2.1 million in salaries and benefits and $0.7 million for marketing expenses associated with our deposit acquisition strategy and

• Nonperforming loans declined $5.0 million, or 10.6% as compared to linked quarter and declined $8.6 million, or 16.9% as compared to December 31, 2018. Nonperforming loans as a percentage of total portfolio loans were 1.46%, 1.62% and 1.88% as of December 31, 2019, September 30, 2019 and December 31, 2018, respectively.

2019 Year-to-Date Financial Highlights

• Net interest margin, on a fully taxable equivalent basis, declined five basis points to 3.05% year-over-year;

• Net interest income decreased $1.6 million, or 1.4%, to $112.3 million year-over-year;

• Provision for loan losses declined $13.5 million, or 79.8%, as compared to the same year-to-date period 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

• Securities gains of $2.2 million were realized in 2019 to take advantage of market opportunities and reposition and diversify holdings in the securities portfolio, as compared to securities gains of $1.3 million in 2018.

Chief Executive Officer Litz H. Van Dyke said, "We continue to be pleased with the progress our Bank is making in repositioning key performance drivers of our financial performance. The fourth quarter of 2019 saw continued improvement in credit quality, improvement in our net interest margin, despite a challenging rate environment, and traction in the launch of our core deposit acquisition strategy. We have implemented several strategic initiatives that are beginning to positively affect current performance and better position our Bank to create value for our shareholders in the long-term. We remain focused on continuing to improve the fundamental performance of the Bank and improving our ability to attract and retain core customer relationships. We are excited about our underlying momentum heading into 2020."

Operating Highlights

Net interest income decreased $1.6 million, or 1.4%, to $112.3 million during 2019 as compared to 2018. The net interest margin, on a fully taxable equivalent basis, decreased five basis points to 3.05% over the past twelve months. The yield on interest-earning assets increased 17 basis points, offset by a 32 basis point increase in funding costs as compared to 2018.

The provision for loan losses totaled $3.4 million for the twelve months ended December 31, 2019 and $16.9 million for the same period of 2018. At December 31, 2019, nonperforming loans were $42.1 million, a decrease of $8.6 million, or 16.9% as compared to December 31, 2018. Net charge-offs were $3.8 million during 2019 as compared to $13.0 million in 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, net charge-offs were 0.13% and 0.48% for the periods ended December 31, 2019 and 2018, respectively. Nonperforming loans as a percentage of total portfolio loans were 1.46% and 1.88% as of December 31, 2019 and 2018, respectively.

Noninterest income decreased $1.1 million, or 6.7%, to $14.7 million, excluding net securities gains, for the twelve months ended December 31, 2019 as compared to 2018. This decrease was primarily due to lower income from 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, debit card fees and higher bank owned life insurance earnings. Securities gains of $2.2 million and $1.3 million were realized during 2019 and 2018, respectively, to take advantage of market opportunities and reposition and diversify holdings in the securities portfolio.

Total noninterest expense decreased $1.7 million, or 1.7%, for the twelve months of 2019 to $98.0 million as compared to $99.7 million in 2018. The reduction was primarily driven by decreases of $1.7 million in FDIC insurance expense, $0.8 million in legal and professional fees, $1.8 million in tax credit amortization and $5.1 million in OREO expenses and losses on sales and write-downs of OREO due to fewer properties under management during 2019, offset by increases of $2.9 million in salaries and benefits, $1.5 million in occupancy expense, $0.6 million in data processing and $2.8 million in other expenses.

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 $2.9 million in salaries and benefits, $0.6 million in data processing expense due to our core conversion completed in the fourth quarter of 2018, $1.5 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 $2.8 million in other expenses primarily comprised of increased ancillary systems, subscriptions, employee training and higher marketing expenses related to our deposit acquisition strategy.

Financial Condition

Total assets were $4.0 billion at December 31, 2019 and 2018. Total portfolio loans increased $181.0 million, or 6.7%, to $2.9 billion as of December 31, 2019 as compared to December 31, 2018. Nonperforming loans decreased $8.6 million to $42.1 million, or 16.9% as of December 31, 2019 as compared to $50.7 million at December 31, 2018. OREO decreased $15.4 million at December 31, 2019 as compared to December 31, 2018 due to the sale of properties during 2019. Closed retail bank offices declined $3.8 million from December 31, 2018 and have a remaining book value of $3.0 million at December 31, 2019.

Federal Reserve Bank excess reserves decreased $145.5 million at December 31, 2019 as compared to December 31, 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 $40.1 million and is currently 18.5% of total assets at December 31, 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 December 31, 2019 and $3.6 billion as of December 31, 2018. Noninterest-bearing deposits increased by $7.1 million, or 1.3%, to $554.9 million as of December 31, 2019 as compared to $547.8 million as of December 31, 2018, money market accounts increased $59.8 million, or 73.9%, due to recent special rate promotions during 2019 and interest-bearing demand deposits increased $32.5 million, or 12.8%. Offsetting these increases were decreases of $48.9 million, or 8.0%, in savings accounts and $137.4 million in certificates of deposits as compared to December 31, 2018. Noninterest-bearing deposits comprised 15.8% and 15.3% of total deposits at December 31, 2019 and 2018, respectively.

The allowance for loan losses was 1.34% of total portfolio loans as of December 31, 2019 as compared to 1.45% as of December 31, 2018. General reserves as a percentage of total portfolio loans were 1.13% at December 31, 2019 as compared to 1.26% as of December 31, 2018. The allowance for loan losses was 92.0% of nonperforming loans as of December 31, 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 13.56% as of December 31, 2019 as compared to 13.97% as of December 31, 2018. The Bank's leverage ratio was 10.41% at December 31, 2019 as compared to 9.69% as of December 31, 2018. The Bank's Total Risk-Based Capital ratio was 14.81% at December 31, 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 101 branches in Virginia and North Carolina. For more information visit www.CBTCares.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
Senior Executive Vice President & Chief Financial Officer
wendy.bell@CBTCares.com

CARTER BANK & TRUST
CONSOLIDATED SELECTED FINANCIAL DATA
BALANCE SHEETS
(Unaudited)

(Dollars in Thousands, except per share data)		December 31,				September 30,				December 31,
		2019				2019				2018
ASSETS
Cash and Due From Banks		$	41,386			$	46,517			$	47,413
Interest-Bearing Deposits in Other Financial Institutions			45,156				44,540				61,612
Federal Reserve Bank Excess Reserves			39,270				35,108				184,798
Total Cash and Cash Equivalents			125,812				126,165				293,823
Securities, Available-for-Sale, at Fair Value			742,617				734,453				782,758
Loans Held-for-Sale			19,714				20,514				2,559
Portfolio Loans			2,884,766				2,903,701				2,703,792
Allowance for Loan Losses			(38,762	)			(40,331	)			(39,199	)
Portfolio Loans, net			2,846,004				2,863,370				2,664,593
Bank Premises and Equipment, net			85,942				86,531				85,841
Other Real Estate Owned, net			18,324				23,112				33,681
Goodwill			58,726				58,726				58,726
Federal Home Loan Bank Stock, at Cost			4,113				3,688				-
Bank Owned Life Insurance			52,597				52,240				51,161
Other Assets			52,259				51,277				66,457
TOTAL ASSETS		$	4,006,108			$	4,020,076			$	4,039,599
LIABILITIES
Deposits:
Noninterest-Bearing Demand		$	554,875			$	566,826			$	547,773
Interest-Bearing Demand			286,561				207,334				254,015
Money Market			140,589				157,123				80,835
Savings			561,814				569,392				610,757
Certificates of Deposits			1,960,406				2,021,306				2,097,801
Total Deposits			3,504,245				3,521,981				3,591,181
Other Liabilities			28,752				24,047				12,204
TOTAL LIABILITIES			3,532,997				3,546,028				3,603,385
SHAREHOLDERS' EQUITY
Common Stock, Par Value $1.00 Per Share, Authorized 100,000,000 Shares;
26,334,229 outstanding at December 31, 2019,
26,333,929 outstanding at September 30, 2019 and 26,270,174 at December 31, 2018			26,334				26,334				26,270
Additional Paid-in-Capital			142,492				142,380				142,175
Retained Earnings			304,158				300,552				277,835
Accumulated Other Comprehensive Income (Loss)			127				4,782				(10,066	)
TOTAL SHAREHOLDERS' EQUITY			473,111				474,048				436,214
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	4,006,108			$	4,020,076			$	4,039,599
PROFITABILITY RATIOS (ANNUALIZED)
Return on Average Assets			0.65	%			0.75	%			0.29	%
Return on Average Shareholders' Equity			5.76	%			6.71	%			2.75	%
Portfolio Loan to Deposit Ratio			82.32	%			82.45	%			75.29	%
Allowance to Total Portfolio Loans			1.34	%			1.39	%			1.45	%
CAPITALIZATION RATIOS
Shareholders' Equity to Assets			11.81	%			11.79	%			10.80	%
Tier 1 Leverage Ratio			10.41	%			10.26	%			9.69	%
Risk-Based Capital - Tier 1			13.56	%			13.46	%			13.97	%
Risk-Based Capital - Total			14.81	%			14.71	%			15.22	%

CARTER BANK & TRUST
CONSOLIDATED SELECTED FINANCIAL DATA
INCOME STATEMENTS
(Unaudited)

(Dollars in Thousands, except per share data)		Quarter-to-Date												Year-to-Date
		December 31,				September 30,				December 31,				December 31,				December 31,
		2019				2019				2018				2019				2018
Interest Income		$	39,759			$	40,154			$	39,862			$	159,120			$	152,019
Interest Expense			11,333				12,084				10,773				46,773				38,114
NET INTEREST INCOME			28,426				28,070				29,089				112,347				113,905
Provision for Loan Losses			(982	)			1,390				(118	)			3,404				16,870
NET INTEREST INCOME AFTER			29,408				26,680				29,207				108,943				97,035
PROVISION FOR LOAN LOSSES
NONINTEREST INCOME
Gains on Sales of Securities, net			606				659				76				2,205				1,271
Service Charges, Commissions and Fees			1,733				1,111				1,071				4,962				4,081
Debit Card Interchange Fees			1,326				1,340				1,212				5,160				4,750
Insurance			128				454				238				1,225				1,855
Bank Owned Life Insurance Income			357				362				388				1,436				1,161
Other Real Estate Owned Income			72				96				448				689				2,692
Other			287				134				399				1,193				1,176
TOTAL NONINTEREST INCOME			4,509				4,156				3,832				16,870				16,986
NONINTEREST EXPENSE
Salaries and Employee Benefits			15,083				12,952				12,773				52,879				49,958
Occupancy Expense, net			3,082				3,040				2,864				11,785				10,312
FDIC Insurance Expense			549				(426	)			765				1,270				2,985
Other Taxes			746				747				726				2,847				2,571
Telephone Expense			578				557				570				2,202				2,466
Professional and Legal Fees			1,560				1,318				806				4,507				5,288
Data Processing			449				504				782				2,083				1,505
Losses on Sales and Write-downs of Other Real Estate Owned, net			4,163				293				5,797				4,732				8,201
Losses on Sales and Write-downs of Bank Premises, net			165				31				128				188				186
Debit Card Expense			593				620				751				2,753				2,785
Tax Credit Amortization			576				563				1,015				2,265				4,060
Other Real Estate Owned Expense			265				166				318				474				2,139
Other			2,677				2,412				2,405				10,044				7,257
TOTAL NONINTEREST EXPENSE			30,486				22,777				29,700				98,029				99,713
INCOME BEFORE INCOME TAXES			3,431				8,059				3,339				27,784				14,308
Income Tax Provision (Benefit)			(175	)			458				(67	)			1,209				2,403
NET INCOME		$	3,606			$	7,601			$	3,406			$	26,575			$	11,905
Shares Outstanding, at End of Period			26,334,229				26,333,929				26,270,174				26,334,229				26,270,174
Average Shares Outstanding-Basic			26,334,069				26,333,929				26,263,563				26,323,899				26,259,223
Average Shares Outstanding-Diluted			26,362,129				26,352,910				26,263,597				26,339,085				26,259,234
PER SHARE DATA
Basic Earnings Per Common Share		$	0.14			$	0.29			$	0.13			$	1.01			$	0.45
Diluted Earnings Per Common Share		$	0.14			$	0.29			$	0.13			$	1.01			$	0.45
Book Value		$	17.97			$	18.00			$	16.60			$	17.97			$	16.60
Tangible Book Value2		$	15.74			$	15.77			$	14.37			$	15.74			$	14.37
Market Value		$	23.72			$	18.89			$	15.00			$	23.72			$	15.00
PROFITABILITY RATIOS (non-GAAP)
Net Interest Margin (FTE)3			3.06	%			3.01	%			3.16	%			3.05	%			3.10	%
Core Efficiency Ratio4			76.13	%			71.63	%			64.48	%			71.62	%			64.15	%

CARTER BANK & TRUST
CONSOLIDATED SELECTED FINANCIAL DATA
NET INTEREST MARGIN (FTE) (QTD AVERAGES)
(Unaudited)

(Dollars in Thousands)		December 31, 2019												September 30, 2019												December 31, 2018
ASSETS		Average Balance				Income/ Expense				Rate				Average Balance				Income/ Expense				Rate				Average Balance				Income/ Expense				Rate
Interest-Bearing Deposits with Banks		$	97,512			$	410				1.67	%		$	99,827			$	557				2.21	%		$	151,221			$	920				2.41	%
Tax-Free Investment Securities			20,337				207				4.04	%			33,452				332				3.94	%			110,148				1,027				3.70	%
Taxable Investment Securities			730,444				4,723				2.57	%			751,665				4,698				2.48	%			693,162				3,757				2.15	%
Tax-Free Loans			355,639				2,830				3.16	%			373,167				2,922				3.11	%			407,391				2,965				2.89	%
Taxable Loans			2,558,192				32,167				4.99	%			2,526,509				32,270				5.07	%			2,394,188				32,033				5.31	%
Federal Home Loan Bank Stock			4,081				60				5.83	%			3,688				58				6.24	%			-				-				-
Total Interest-Earning Assets		$	3,766,205			$	40,397				4.26	%		$	3,788,308			$	40,837				4.28	%		$	3,756,110			$	40,702				4.30	%
LIABILITIES
Deposits:
Interest-Bearing Demand		$	245,887			$	364				0.59	%		$	222,062			$	404				0.72	%		$	236,604			$	549				0.92	%
Money Market			154,381				358				0.92	%			156,509				552				1.40	%			82,003				170				0.82	%
Savings			563,401				148				0.10	%			572,716				256				0.18	%			619,703				488				0.31	%
Certificates of Deposit			1,994,916				10,403				2.07	%			2,048,043				10,853				2.10	%			2,104,294				9,567				1.80	%
Total Interest-Bearing Deposits		$	2,958,585			$	11,273				1.51	%		$	2,999,330			$	12,065				1.60	%		$	3,042,604			$	10,774				1.40	%
Borrowings:
FHLB Borrowings			9,239				39				1.67	%			-				-				-				-				-				-
Other Borrowings			1,547				21				5.39	%			1,226				19				6.15	%			-				-				-
Total Borrowings			10,786				60				2.21	%			1,226				19				6.15	%			-				-				-
Total Interest-Bearing Liabilities		$	2,969,371			$	11,333				1.51	%		$	3,000,556			$	12,084				1.60	%		$	3,042,604			$	10,774				1.40	%
Net Interest Income						$	29,064											$	28,753											$	29,928
Net Interest Margin											3.06	%											3.01	%											3.16	%

CARTER BANK & TRUST
CONSOLIDATED SELECTED FINANCIAL DATA
NET INTEREST MARGIN (FTE) (YTD AVERAGES)
(Unaudited)

(Dollars in Thousands)		December 31, 2019												December 31, 2018
ASSETS		Average Balance				Income/ Expense				Rate				Average Balance				Income/ Expense				Rate
Interest-Bearing Deposits with Banks		$	123,946			$	2,751				2.22	%		$	134,406			$	2,682				2.00	%
Tax-Free Investment Securities			63,641				2,352				3.70	%			153,036				5,375				3.51	%
Taxable Investment Securities			730,500				17,826				2.44	%			753,023				15,421				2.05	%
Tax-Free Loans			379,090				12,154				3.21	%			419,981				12,794				3.05	%
Taxable Loans			2,489,105				126,940				5.10	%			2,331,165				119,563				5.13	%
Federal Home Loan Bank Stock			2,352				144				6.12	%			-				-				-
Total Interest-Earning Assets		$	3,788,634			$	162,167				4.28	%		$	3,791,611			$	155,835				4.11	%
LIABILITIES
Deposits:
Interest-Bearing Demand		$	249,086			$	2,004				0.80	%		$	246,592			$	1,959				0.79	%
Money Market			134,676				1,671				1.24	%			96,068				694				0.72	%
Savings			582,195				1,388				0.24	%			663,801				2,027				0.31	%
Certificates of Deposit			2,054,077				41,593				2.02	%			2,090,103				33,414				1.60	%
Total Interest-Bearing Deposits		$	3,020,034			$	46,656				1.54	%		$	3,096,564			$	38,094				1.23	%
Borrowings:
Federal Funds Purchased			-				-				-				681				20				2.94	%
FHLB Borrowings			2,329				39				1.67	%			-				-				-
Other Borrowings			1,042				79				7.58	%			-				-				-
Total Borrowings			3,371				118				3.50	%			681				20				2.94	%
Total Interest-Bearing Liabilities		$	3,023,405			$	46,774				1.55	%		$	3,097,245			$	38,114				1.23	%
Net Interest Income						$	115,393											$	117,721
Net Interest Margin											3.05	%											3.10	%

CARTER BANK & TRUST
CONSOLIDATED SELECTED FINANCIAL DATA
LOANS AND LOANS HELD-FOR-SALE
(Unaudited)

		December 31,				September 30,				December 31,
(Dollars in Thousands)		2019				2019				2018
Commercial
Commercial Real Estate		$	1,385,696			$	1,421,850			$	1,381,231
Commercial and Industrial			620,420				649,190				660,872
Commercial Construction			326,654				289,715				238,016
Total Commercial Loans			2,332,770				2,360,755				2,280,119
Consumer
Residential Mortgages			461,572				446,378				339,307
Other Consumer			73,688				72,917				73,058
Consumer Construction			16,736				23,651				11,308
Total Consumer Loans			551,996				542,946				423,673
Total Portfolio Loans			2,884,766				2,903,701				2,703,792
Loans Held-for-Sale			19,714				20,514				2,559
Total Loans		$	2,904,480			$	2,924,215			$	2,706,351

CARTER BANK & TRUST
CONSOLIDATED SELECTED FINANCIAL DATA
ASSET QUALITY DATA
(Unaudited)

(Dollars in Thousands)		December 31,				September 30,				December 31,
Nonperforming Loans		2019				2019				2018
Real Estate		$	7,084			$	7,759			$	3,289
Consumer			267				363				65
Commercial			77				606				606
Total Nonperforming Loans			7,428				8,728				3,960
Nonperforming Troubled Debt Restructurings
Real Estate			34,315				38,377				46,771
Consumer			-				-				-
Commercial			390				-				-
Total Nonperforming Troubled Debt Restructurings			34,705				38,377				46,771
Total Nonperforming Loans and Troubled Debt Restructurings			42,133				47,105				50,731
Other Real Estate Owned			18,324				23,112				33,681
Total Nonperforming Assets		$	60,457			$	70,217			$	84,412

		December 31,				September 30,				December 31,
		2019				2019				2018
Nonperforming Loans		$	42,133			$	47,105			$	50,731
Other Real Estate Owned			18,324				23,112				33,681
Nonperforming Assets			60,457				70,217				84,412
Troubled Debt Restructurings (Nonaccruing)			34,705				38,377				46,771
Troubled Debt Restructurings (Accruing)			109,265				113,725				114,806
Total Troubled Debt Restructurings		$	143,970			$	152,102			$	161,577
Nonperforming Loans to Total Portfolio Loans			1.46	%			1.62	%			1.88	%
Nonperforming Assets to Total Portfolio Loans plus Other Real Estate Owned			2.08	%			2.40	%			3.08	%
Allowance for Loan Losses to Total Portfolio Loans			1.34	%			1.39	%			1.45	%
Allowance for Loan Losses to Nonperforming Loans			92.00	%			85.62	%			77.27	%
Net Loan Charge-offs (Recoveries)		$	3,841			$	3,254			$	12,989
Net Loan Charge-offs (Recoveries) (Annualized) to Average Loans			0.13	%			0.15	%			0.47	%

CARTER BANK & TRUST
CONSOLIDATED SELECTED FINANCIAL DATA
ALLOWANCE FOR LOAN LOSSES
(Unaudited)

		Year-to-Date
		December 31,				September 30,				December 31,
(Dollars in Thousands)		2019				2019				2018
Balance Beginning of Year		$	39,199			$	39,199			$	35,318
Provision for Loan Losses			3,404				4,386				16,870
Charge-offs:
Real Estate Loans			659				659				11,924
Consumer Loans			4,401				3,039				2,710
Commercial Loans			22				3				20
Total Charge-offs			5,082				3,701				14,654
Recoveries:
Real Estate Loans			639				-				1,415
Consumer Loans			602				447				250
Commercial Loans			-				-				-
Total Recoveries			1,241				447				1,665
Total Net Charge-offs			3,841				3,254				12,989
Balance End of Year		$	38,762			$	40,331			$	39,199

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
		December 31,				September 30,				December 31,				December 31,				December 31,
		2019				2019				2018				2019				2018
Total Shareholders' Equity		$	473,111			$	474,048			$	436,214			$	473,111			$	436,214
Less: Goodwill			58,726				58,726				58,726				58,726				58,726
Tangible Equity			414,385				415,322				377,488				414,385				377,488
Shares Outstanding at End of Period			26,334,229				26,333,929				26,270,174				26,334,229				26,270,174
Tangible Book Value Per Common Share		$	15.74			$	15.77			$	14.37			$	15.74			$	14.37

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
		December 31,				September 30,				December 31,				December 31,				December 31,
		2019				2019				2018				2019				2018
Interest Income		$	39,759			$	40,154			$	39,862			$	159,120			$	152,019
Interest Expense			(11,333	)			(12,084	)			(10,773	)			(46,773	)			(38,114	)
Net Interest Income			28,426				28,070				29,089				112,347				113,905
Tax Equivalent Adjustment3			638				683				839				3,046				3,816
NET INTEREST INCOME (FTE) (Non-GAAP)		$	29,064			$	28,753			$	29,928			$	115,393			$	117,721
Net Interest Income (Annualized)			115,308				114,074				118,736				115,393				117,721
Average Earning Assets			3,766,205				3,788,308				3,756,110			$	3,788,634			$	3,791,611
NET INTEREST MARGIN (FTE) (Non-GAAP)			3.06%				3.01%				3.16%				3.05%				3.10%

4Core Efficiency Ratio (Non-GAAP)

		Quarter-to-Date												Year-to-Date
		December 31,				September 30,				December 31,				December 31,				December 31,
		2019				2019				2018				2019				2018
NONINTEREST EXPENSE		$	30,486			$	22,777			$	29,700			$	98,029			$	99,713
Less: One Time Regulatory and Compliance			-				-				(5,797	)			-				(1,853	)
Less: Losses on Sales and Write-downs of Other Real Estate Owned, net			(4,163	)			(293	)			(128	)			(4,732	)			(8,201	)
Less: Losses on Sales and Write-downs of Bank Premises, net			(165	)			(31	)			-				(188	)			(186	)
Less: Tax Credit Amortization			(576	)			(563	)			(1,015	)			(2,265	)			(4,060	)
Plus: Regulatory Review			-				-				-				-				323
Plus: Contingent Liability			-				-				(250	)			331				(581	)
Less: Conversion Expense			-				-				(393	)			(2	)			(841	)
Plus: FDIC Assessment Credits			-				1,056				-				1,056				-
Plus: Conversion Vacation Accrual			(539	)			86				(686	)			107				(686	)
CORE NONINTEREST EXPENSE (Non-GAAP)		$	25,043			$	23,032			$	21,431			$	92,336			$	83,628
NET INTEREST INCOME		$	28,426			$	28,070			$	29,089			$	112,347			$	113,905
Plus: Taxable Equivalent Adjustment3			638				683				839				3,046				3,816
NET INTEREST INCOME (FTE) (Non-GAAP)		$	29,064			$	28,753			$	29,928			$	115,393			$	117,721
Less: Gains on Sales of Securities, net			(606	)			(659	)			(76	)			(2,205	)			(1,271	)
Less: Other Real Estate Owned Income			(72	)			(96	)			(448	)			(689	)			(2,692	)
Less: Other Gains			-				-				-				(447	)			(374	)
Noninterest Income			4,509				4,156				3,832				16,870				16,986
CORE NET INTEREST INCOME (FTE) (Non-GAAP) plus NONINTEREST INCOME		$	32,895			$	32,154			$	33,236			$	128,922			$	130,370
CORE EFFICIENCY RATIO (Non-GAAP)			76.13%				71.63%				64.48%				71.62%				64.15%

SOURCE: Carter Bank & Trust

View source version on accesswire.com:
https://www.accesswire.com/574186/Carter-Bank-Trust-Announces-Fourth-Quarter-2019-Financial-Results