Carolina Alliance Reports Its Fourth Quarter Results

SPARTANBURG, S.C., March 16, 2015 (GLOBE NEWSWIRE) -- Carolina Alliance Bank CRLN CRLN today reported to its shareholders its fourth quarter 2014 financial results. Net income available to common shareholders of $6.1 million, or $1.48 per diluted common share, was reported for the year ended December 31, 2014, compared to net income available to common shareholders of $1.0 million, or $0.37 per diluted common share, for the twelve months ended December 31, 2013. This $5.0 million increase in earnings was largely attributable to the increase in earning assets from the merger with Forest Commercial Bank ("Forest Commercial") and the impact of merger-related accounting, particularly the non-operating after-tax bargain purchase gain of $3.7 million related to mark-to-market adjustments to the Forest Commercial balance sheet as of the merger date of April 5, 2014. Partially offsetting these increases were increased operating expenses from the addition of the Forest Commercial operations and non-operating after-tax expenses of approximately $0.7 million for merger costs and start-up costs associated with the bank's branches in Seneca and Anderson, South Carolina, both of which opened for business in 2014. Net income available to common shareholders of $0.4 million, or $0.09 per diluted common share, was reported for the three months ended December 31, 2014, compared to net income available to common shareholders of $0.3 million, or $0.11 per diluted common share, for the three months ended December 31, 2013. The increase in net income for the quarter was the result of the increase in earning assets from the merger with Forest Commercial, offset by increased operating expenses from the addition of the Forest Commercial operations and merger-related adjustments that decreased the year-to-date bargain purchase gain.

"We continue to be pleased with the results achieved from the combination of Carolina Alliance, Forest Commercial, and Dave McBride Leasing," said Chairman of the Board of Directors Terry Cash. "The combination of the skilled personnel and product array from each respective organization has created a synergism that we are only beginning to benefit from."

Gross loans and leases increased by $148.0 million to $330.8 million on December 31, 2014 from $182.8 million on December 31, 2013. Of the increase, $123.5 million is attributable to Forest Commercial loans and leases added as of the merger date. Total assets increased by $170.6 million to $418.0 million at December 31, 2014 from $247.4 million at December 31, 2013. Forest Commercial's assets totaled $156.6 million as of the merger date. Total deposits increased to $338.4 million on December 31, 2014 from $203.5 million on December 31, 2013, an increase of $134.9 million. Forest Commercial's deposits totaled $128.1 million as of the merger date. 

"It has been an incredible year," said John S. Poole, Carolina Alliance Chief Executive Officer. "The completion of our strategic merger with Forest Commercial, adding Dave McBride's leasing operation, and opening offices in Anderson and Seneca resulted in an organization at the end of the year very different than it was at the beginning. Currently we are giving considerable thought and time to the refinement of our long-term plans and believe we have reason to be pleased with our future prospects."

Total shareholders' equity on December 31, 2014 was $52.3 million, or 12.5% of total assets. Book value per common share was $10.37 as of December 31, 2014. The bank's capital levels continue to exceed the levels required by regulatory standards to be classified as "well capitalized," which is the highest of the five regulator-defined capital categories used to describe an institution's capital strength.

Non-performing assets at December 31, 2014 increased from a year prior, in part due to real estate acquired in settlement of loans of $0.7 million absorbed in the merger. Non-performing assets were $4.1 million at December 31, 2014, or 0.97% of total assets, as compared to $1.7 million, or 0.69% of total assets, at December 31, 2013. 

At December 31, 2014, the allowance for loan losses stood at $3.9 million, which is 1.19% of gross loans. Loans charged off for the twelve months ended December 31, 2014 totaled $0.7 million, which represents 0.20% of gross loans. 

"It is hard to believe that we are just weeks away from the first anniversary of the merger of the two banks. The focus of this first year has been on merging and honing the systems and processes we utilize to serve our customers," said John Kimberly, Carolina Alliance President. "We also have been evaluating our product offerings and their delivery, in an effort to develop deeper customer relationships."

Note

Certain statements in this news release 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 are subject to risks, uncertainties, and other factors, such as the businesses of Carolina Alliance Bank and Forest Commercial Bank may not be integrated successfully or such integration may take longer to accomplish than expected, the expected cost savings and any revenue synergies from the merger may not be fully realized within the expected timeframes, disruption from the merger may make it more difficult to maintain relationships with clients, associates, or suppliers, a continued downturn in the economy, competitive pressures among depository and other financial institutions, the rate of delinquencies and amounts of charge-offs, the level of allowance for loan loss, the rates of loan growth, or adverse changes in asset quality in our loan portfolio, and changes in the U.S. legal and regulatory framework, including the effect of recent financial reform legislation on the banking industry, any of which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.

Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate.  Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized.  The inclusion of this forward-looking information should not be construed as a representation by us or any person that the future events, plans, or expectations contemplated by us will be achieved.  All subsequent written and oral forward-looking statements concerning us or any person acting on our behalf is expressly qualified in its entirety by the cautionary statements above. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, to reflect circumstances or events that occur after the date the forward-looking statements are made.