Carolina Alliance Announces 10% Stock Dividend and Reports its Second Quarter Results

SPARTANBURG, S.C.--()--Carolina Alliance Bank (OTCBB: CRLN and OTCQB: CRLN) today announced that its Board of Directors has declared a 10% stock dividend. The stock dividend will be payable October 7, 2014 to shareholders of record as of September 22, 2014. Holders of Carolina Alliance common stock as of the record date will receive one additional share for every ten shares held on the record date. Cash will be issued in lieu of fractional shares.

As a result of the stock dividend, the total number of shares of common stock outstanding will increase from approximately 4.15 million to approximately 4.56 million. The additional shares of common stock are expected to be distributed on or about October 7, 2014 by the bank’s transfer agent, Registrar and Transfer Company.

“We are optimistic about our future and the Board of Directors believes that all shareholders will benefit from this stock dividend with the associated increase in liquidity of our stock,” said Terry Cash, Chairman of the Board of Directors of Carolina Alliance.

Carolina Alliance also reported to its shareholders its second quarter 2014 financial results. Net income available to common shareholders of $4.8 million, or $1.33 per diluted common share (as adjusted for the 10% stock dividend discussed above), was reported for the six months ended June 30, 2014, compared to net income available to common shareholders of $0.6 million, or $0.20 per diluted common share (as adjusted for the 10% stock dividend discussed above), for the six months ended June 30, 2013. This $4.2 million increase in earnings was largely attributable to the impact of merger-related accounting in connection with the recent merger with Forest Commercial Bank (“FCB”) of Asheville, North Carolina, which closed on April 5, 2014. Net income included a non-operating net bargain purchase gain of $4.3 million related to mark-to-market adjustments to the FCB balance sheet as of the merger date. Partially offsetting this gain were expenses of approximately $0.5 million that management considers to be non-core, which include merger costs and start-up costs associated with the bank’s recently opened branches in Seneca and Anderson, South Carolina.

“We believe our expansion activities broaden our reach and, combined with our expanded product offerings and higher lending limits, will result in continued balance sheet growth, which presents the opportunity for operating efficiencies which should increase profitability” said Chief Executive Officer John S. Poole.

Gross loans and leases grew by $143.8 million to $313.4 million on June 30, 2014 from $169.6 million on June 30, 2013. At the merger date, FCB’s gross loans and leases totaled approximately $123.5 million. Total assets of the bank increased by $167.6 million to $410.4 million at June 30, 2014 from $242.8 million at June 30, 2013. FCB’s assets totaled $156.6 million as of the merger date. Total deposits increased to $340.3 million on June 30, 2014 from $199.9 million on June 30, 2013, with FCB deposits at merger totaling $128.1 million.

“We move into the second half of 2014 with fresh excitement and anticipation,” said John D. Kimberly, Carolina Alliance President. “Our two new South Carolina branches and the recently acquired commercial leasing operations of Dave McBride Leasing, LLC should create many new business opportunities. While this expansion represents the opportunity for increased profitability, our focus on providing exceptional high quality service to our customers is unchanged.”

Total shareholders’ equity on June 30, 2014 was $50.7 million, or 12% of total assets. Book value per common share was $10.05 (as adjusted for the 10% stock dividend discussed above) as of June 30, 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 as a percentage of total assets at June 30, 2014 increased slightly 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 $3.2 million at June 30, 2014, or 0.79% of total assets, as compared to $1.6 million, or 0.66% of total assets, at June 30, 2013. At June 30, 2014, the bank had non-accrual loans of $1.7 million, or 0.54% of gross loans, as compared to non-accrual loans of $0.7 million at June 30, 2013, representing 0.41% of gross loans.

At June 30, 2014, the allowance for loan losses stood at $3.8 million, which is 1.22% of gross loans. Loans charged off for the six months ended June 30, 2014 were of a negligible value.

For additional information about Carolina Alliance, please call (864) 208-BANK (2265) or visit www.carolinaalliancebank.com.

Note

Certain statements in this 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 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 the bank’s loan portfolios, 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 the bank or any person that the future events, plans, or expectations contemplated by the bank will be achieved. All subsequent written and oral forward-looking statements concerning the bank or any person acting on its behalf is expressly qualified in its entirety by the cautionary statements above. The bank undertakes 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.

Contacts

Carolina Alliance Bank
John S. Poole, 864-542-2615
or
John D. Kimberly, 828-255-5711

Release Summary

Carolina Alliance Bank today reported second quarter earnings and announced that its Board of Directors has declared a 10% stock dividend.

Contacts

Carolina Alliance Bank
John S. Poole, 864-542-2615
or
John D. Kimberly, 828-255-5711