Carter Bank & Trust Announces First Quarter 2019 Financial Results

Carter Bank & Trust ( the Bank) (NASDAQ:CARE) today announced net income of $7.5 million, or $0.29 earnings per share, for the first quarter of 2019, as compared to net income of $8.8 million, or $0.34 earnings per share, for the first quarter of 2018. Pre-tax pre-provision earnings1 were $9.6 million for the quarters ended March 31, 2019 and 2018.

First Quarter 2019 Financial Highlights

  • First quarter net income of $7.5 million, or $0.29 earnings per share, as compared to net income of $3.4 million, or $0.13 earnings per share, in the fourth quarter of 2018 and net income of $8.8 million, or $0.34 earnings per share, over the same quarter of 2018;
  • Net interest income declined $1.2 million, or 4.1%, to $27.9 million as compared to the linked quarter primarily due to two fewer days in the first quarter and a nine basis point increase in funding costs compared to the fourth quarter of 2018, but increased $0.5 million, or 1.7%, over the same quarter in 2018;
  • Net interest margin, on a fully taxable equivalent basis, declined seven basis points to 3.09% over the linked quarter, but increased five basis points over the same quarter last year;
  • Solid portfolio loan growth of $141.8 million, or 5.2%, as compared to the linked quarter and growth of $184.7 million, or 6.9%, as compared to March 31, 2018;
  • Total deposits increased $27.1 million to $3.6 billion as of March 31, 2019 as compared to December 31, 2018. Noninterest-bearing deposits increased by $35.3 million, or 6.7%, to $559.9 million as compared to linked quarter and money market accounts increased $31.7 million, or 39.2%, due to recent special rate promotions during the first quarter of 2019;
  • Nonperforming loans declined $1.1 million, or 2.3% as compared to December 31, 2018 and decreased $13.0 million, or 20.7%, from March 31, 2018. Nonperforming loans as a percentage of total portfolio loans were 1.74%, 1.88% and 2.35% as of March 31, 2019, December 31, 2018 and March 31, 2018, respectively.

Litz H. Van Dyke, Chief Executive Officer, stated, Our performance this quarter reflects solid loan and deposit growth as a result of our various strategic initiatives designed to grow loans and core deposits. In addition, there were a couple of important strategic milestones achieved during the first quarter. First was our successful roll out of our online and mobile banking platforms. These new platforms will be the foundation to provide additional products and services as well as greater convenience to our customers. The second important milestone was the transition of our common stock to the Nasdaq Global Select Market. This will provide our shareholders greater liquidity in trading our stock and help enhance shareholder value by allowing the market capitalization of our company to more accurately reflect our franchise value.

Operating Highlights

Net interest income increased $0.5 million, or 1.7%, to $27.9 million during the first quarter of 2019 as compared to the same period of 2018. The net interest margin, on a fully taxable equivalent basis, increased five basis points to 3.09% over the past twelve months. The increases in short-term interest rates continue to positively impact both net interest income and net interest margin, but are somewhat muted by lower replacement loan yields from legacy loan pay-downs during 2018. The yield on interest-earning assets increased 40 basis points, offset by a 43 basis point increase in funding costs as compared to the same period of 2018.

The provision for loan losses totaled $1.6 million for the period ended March 31, 2019 and $1.5 million for the same period of 2018. At March 31, 2019, nonperforming loans were $49.6 million, a decrease of $1.1 million, or 2.3% as compared to December 31, 2018. Net charge-offs were $1.3 million in the first quarter of 2019 as compared to $33 thousand of net recoveries in the same period of 2018. As a percentage of total loans, on an annualized basis, net charge-offs (recoveries) were 0.18% and (0.01)% for the quarters ending March 31, 2019 and 2018, respectively. Nonperforming loans as a percentage of total portfolio loans were 1.74%, 1.88% and 2.35% as of March 31, 2019, December 31, 2018 and March 31, 2018, respectively.

Noninterest income at March 31, 2019, excluding net securities gains, was essentially flat as compared to the same period of 2018. The stable comparison was due to higher debit card interchange fees and higher bank owned life insurance earnings, which were offset by lower income from other real estate owned (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 and lower insurance commissions due to the sale of the bank owned insurance agency in the first quarter of 2018. Securities gains of $31 thousand and $0.9 million were realized during the first quarter of 2019 and 2018, respectively, to take advantage of market opportunities and reduce the credit risk of the securities portfolio.

Total noninterest expense decreased $0.5 million, or 2.0%, for the first quarter of 2019 to $22.1 million as compared to $22.6 million in the same period of 2018. The reduction was primarily driven by decreases of $0.2 million in salaries and employee benefits, $0.6 million in legal and professional fees, $0.5 million in tax credit amortization and $0.4 million in OREO expenses. The decrease in salaries and benefits were primarily attributable to an increase in salary deferrals on new loan originations due to increased new loan volumes in the first quarter of 2019. The decrease in legal and professional fees were related to regulatory and compliance reviews which were completed as of June 30, 2018. Offsetting these decreases were increases of $0.5 million in data processing expense due to our core conversion completed in the fourth quarter of 2018 and $0.5 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.

Financial Condition

Total assets were $4.1 billion at March 31, 2019 and $4.0 billion at December 31, 2018. Total portfolio loans increased $141.8 million, or 5.2%, to $2.8 billion as of March 31, 2019 as compared to December 31, 2018. Nonperforming loans decreased $1.1 million to $49.6 million, or 2.3% as of March 31, 2019 as compared to $50.7 million at December 31, 2018. OREO decreased $3.1 million at March 31, 2019 as compared to December 31, 2018 due to the sale of properties during the first quarter of 2019. Closed retail bank offices declined $1.4 million from December 31, 2018 and have a remaining book value of $5.3 million at March 31, 2019.

Federal Reserve Bank excess reserves decreased $100.2 million at March 31, 2019 as compared to December 31, 2018. The balance was higher at year-end primarily due to large legacy credit reductions received late in December of 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 increased $15.9 million and is currently 19.5% of total assets at March 31, 2019 as compared to 19.4% of total assets at December 31, 2018. The increase is a result of deposit growth and active balance sheet management. We have further diversified the securities portfolio as to bond types, maturities and interest rate structures.

Total deposits increased $27.1 million to $3.6 billion as of March 31, 2019 as compared to December 31, 2018. Noninterest-bearing deposits increased by $35.3 million, or 6.7%, to $559.9 million as of March 31, 2019 as compared to $524.6 million as of December 31, 2018 and money market accounts increased $31.7 million, or 39.2%, due to recent special rate promotions during the first quarter of 2019. Offsetting these increases were decreases of $16.2 million, or 5.9%, in interest-bearing demand deposits, $10.3 million, or 1.7%, in savings accounts and $13.4 million in certificates of deposits as compared to December 31, 2018. Noninterest-bearing deposits comprised 15.5% and 14.6% of total deposits at March 31, 2019 and December 31, 2018, respectively.

The allowance for loan losses was 1.39% of total portfolio loans as of March 31, 2019 as compared to 1.45% as of December 31, 2018. General reserves as a percentage of total loans were 1.20% at March 31, 2019 as compared to 1.26% as of December 31, 2018. The allowance for loan losses was 79.8% of nonperforming loans as of March 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 capitalized. The Banks Tier 1 Capital ratio decreased to 13.61% as of March 31, 2019 as compared to 13.97% as of December 31, 2018. The Banks leverage ratio was 9.85% at March 31, 2019 as compared to 9.69% as of December 31, 2018. The Banks Total Risk-Based Capital ratio was 14.86% at March 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 $4.1 billion in assets and 105 branches in Virginia and North Carolina. For more information visit www.CarterBankandTrust.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 Banks 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 Banks 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 Banks 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
CONSOLIDATED FINANCIAL DATA
BALANCE SHEETS

(Unaudited)

 

(Dollars in Thousands, except per share data)

March 31, December 31, March 31,
  2019       2018       2018  
ASSETS
Cash and Due From Banks $ 42,493 $ 47,413 $ 52,030
Interest-Bearing Deposits in Other Financial Institutions 60,430 61,612 62,880
Federal Reserve Bank Excess Reserves   84,644       184,798       97,367  
Total Cash and Cash Equivalents 187,567 293,823 212,277
 
Securities, Available-for-Sale, at Fair Value 798,669 782,758 954,127
Loans Held-for-Sale 6,285 2,559
Portfolio Loans 2,845,606 2,703,792 2,661,063
Allowance for Loan Losses   (39,572 )     (39,199 )     (36,866 )
Portfolio Loans, net 2,806,034 2,664,593 2,624,197
 
Bank Premises and Equipment, net 86,751 85,841 79,896
Other Real Estate Owned, net 30,592 33,681 63,263
Goodwill 58,726 58,726 58,726
Bank Owned Life Insurance 51,522 51,161 50,000
Other Assets   71,836       66,457       70,307  
TOTAL ASSETS $ 4,097,982     $ 4,039,599     $ 4,112,793  
 
 
LIABILITIES
Deposits:
Noninterest-Bearing Demand $ 559,924 $ 524,614 $ 574,811
Interest-Bearing Demand 260,922 277,174 264,939
Money Market 112,526 80,835 107,624
Savings 600,450 610,757 690,315
Certificates of Deposits   2,084,444       2,097,801       2,031,887  
Total Deposits 3,618,266 3,591,181 3,669,576
Other Liabilities   29,947       12,204       10,340  
TOTAL LIABILITIES   3,648,213       3,603,385       3,679,916  
 
 
SHAREHOLDERS’ EQUITY
Common Stock, Par Value $1.00 Per Share, Authorized 100,000,000 Shares;

26,308,087 outstanding at March 31, 2019,

26,270,174 outstanding at December 31, 2018 and 26,257,761 at March 31, 2018

26,308 26,270 26,258
Additional Paid-in-Capital 142,183 142,175 142,178
Retained Earnings 285,124 277,835 274,759
Accumulated Other Comprehensive Loss   (3,846 )     (10,066 )     (10,318 )
TOTAL SHAREHOLDERS’ EQUITY   449,769       436,214       432,877  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 4,097,982     $ 4,039,599     $ 4,112,793  
 
PROFITABILITY RATIOS (ANNUALIZED)
Return on Average Assets 0.75 % 0.29 % 0.88 %
Return on Average Shareholders’ Equity 6.89 % 2.75 % 8.33 %
Portfolio Loan to Deposit Ratio 78.65 % 75.29 % 72.52 %
Allowance to Total Portfolio Loans 1.39 % 1.45 % 1.39 %
 
CAPITALIZATION RATIOS
Shareholders’ Equity to Average Assets 10.93 % 10.70 % 10.62 %
Tier 1 Leverage Ratio 9.85 % 9.69 % 9.62 %
Risk-Based Capital – Tier 1 13.61 % 13.97 % 13.31 %
Risk-Based Capital – Total 14.86 % 15.22 % 14.56 %
 
     
CARTER BANK & TRUST
CONSOLIDATED FINANCIAL DATA
INCOME STATEMENTS

(Unaudited)

 

(Dollars in Thousands, except per share data)

Quarter-to-Date
March 31, December 31, March 31,
  2019       2018       2018  
Interest Income $ 39,133 $ 39,862 $ 35,588
Interest Expense   11,243       10,773       8,151  
NET INTEREST INCOME 27,890 29,089 27,437
 
Provision for Loan Losses   1,627       (118 )     1,515  
NET INTEREST INCOME AFTER 26,263 29,207 25,922
PROVISION FOR LOAN LOSSES
 
NONINTEREST INCOME
Gains on Sales of Securities, net 31 76 868
Service Charges, Commissions and Fees 1,232 1,218 1,252
Debit Card Interchange Fees 1,174 1,212 1,133
Insurance 274 238 535
Bank Owned Life Insurance Income 361 388
Other Real Estate Owned Income 290 448 549
Other   448       252       394  
TOTAL NONINTEREST INCOME   3,810       3,832       4,731  
 
NONINTEREST EXPENSE
Salaries and Employee Benefits 12,035 12,773 12,260
Occupancy Expense, net 2,827 2,864 2,325
FDIC Insurance Expense 714 765 838
Other Taxes 643 726 477
Telephone Expense 505 570 669
Professional and Legal Fees 649 806 1,210
Data Processing 721 519 268
Losses on Sales and Write-downs of Other Real Estate Owned, net 188 5,797 342
Losses on Sales and Write-downs of Bank Premises, net 170 128
Debit Card Expense 710 751 652
Tax Credit Amortization 563 1,015 1,015
Other Real Estate Owned Expense 89 318 531
Other   2,296       2,668       1,972  
TOTAL NONINTEREST EXPENSE   22,110       29,700       22,559  
 
INCOME BEFORE INCOME TAXES 7,963 3,339 8,094
Income Tax Provision (Benefit)   422       (67 )     (735 )
NET INCOME $ 7,541     $ 3,406     $ 8,829  
 
Shares Outstanding, at End of Period 26,308,087 26,270,174 26,257,761
Average Shares Outstanding 26,293,108 26,263,563 26,257,761
 
PER SHARE DATA
Earnings Per Common Share – Basic and Diluted $ 0.29 $ 0.13 $ 0.34
Book Value $ 17.10 $ 16.60 $ 16.49
Tangible Book Value2 $ 14.86 $ 14.37 $ 14.25
Market Value $ 19.19 $ 15.00 $ 17.05
 
PROFITABILITY RATIOS (non-GAAP)
Net Interest Margin (FTE)3 3.09 % 3.16 % 3.04 %
Core Efficiency Ratio4 66.17 % 64.48 % 64.96 %
 
                         

CARTER BANK & TRUST

CONSOLIDATED SELECTED FINANCIAL DATA

NET INTEREST MARGIN (FTE) (QTD AVERAGES)

(Unaudited)

 
(Dollars in Thousands) March 31, 2019 December 31, 2018 March 31, 2018
ASSETS

Average Balance

 

Income/ Expense

  Rate

Average Balance

 

Income/ Expense

  Rate

Average Balance

 

Income/ Expense

  Rate
Interest-Bearing Deposits with Banks $ 170,031 $ 1,021 2.44 % $ 151,221 $ 920 2.41 % $ 204,746 $ 862 1.71 %
Tax-Free Investment Securities 110,955 1,018 3.72 % 110,148 1,027 3.70 % 169,171 1,843 4.42 %
Taxable Investment Securities 701,390 4,122 2.38 % 693,162 3,757 2.15 % 772,468 3,755 1.97 %
Tax-Free Loans 401,066 3,314 3.35 % 407,391 2,965 2.89 % 434,428 3,336 3.11 %
Taxable Loans     2,396,152     30,568   5.17 %   2,394,188     32,032   5.31 %   2,230,068     26,879   4.89 %
Total Interest-Earning Assets   $ 3,779,594   $ 40,043   4.30 % $ 3,756,110   $ 40,701   4.30 % $ 3,810,881   $ 36,675   3.90 %
 
LIABILITIES
Deposits:
Interest-Bearing Demand $ 271,214 $ 641 0.96 % $ 236,604 $ 549 0.92 % $ 264,680 $ 404 0.62 %
Money Market 90,601 243 1.09 % 82,003 170 0.82 % 116,845 132 0.46 %
Savings 606,317 486 0.33 % 619,703 488 0.31 % 710,837 526 0.30 %
Certificates of Deposit     2,098,658     9,854   1.90 %   2,104,294     9,567   1.80 %   2,013,030     7,089   1.43 %
Total Interest-Bearing Deposits   $ 3,066,790   $ 11,224   1.48 % $ 3,042,604   $ 10,774   1.40 % $ 3,105,392   $ 8,151   1.06 %

Borrowings:

Other Borrowings     329     20   24.65 %                    
Total Borrowings     329     20   24.65 %                    
Total Interest-Bearing Liabilities   $ 3,067,119   $ 11,244   1.49 % $ 3,042,604   $ 10,774   1.40 % $ 3,105,392   $ 8,151   1.06 %
Net Interest Income       $ 28,799         $ 29,927         $ 28,524    
Net Interest Margin           3.09 %         3.16 %         3.04 %
                       

CARTER BANK & TRUST

CONSOLIDATED SELECTED FINANCIAL DATA

LOANS AND LOANS HELD-FOR-SALE

(Unaudited)

 
March 31, December 31, March 31,
(Dollars in Thousands)         2019         2018         2018
Commercial
Commercial Real Estate $ 1,444,692 $ 1,381,231 $ 1,359,930
Commercial and Industrial 670,501 660,872 913,242
Commercial Construction           247,968           238,016           153,236
Total Commercial Loans           2,363,161           2,280,119           2,426,408
Consumer
Residential Mortgages 392,712 339,307 147,875
Other Consumer 71,622 73,058 79,080
Consumer Construction           18,111           11,308           7,700
Total Consumer Loans           482,445           423,673           234,655
Total Portfolio Loans 2,845,606 2,703,792 2,661,063
Loans Held-for-Sale           6,285           2,559          
Total Loans         $ 2,851,891         $ 2,706,351         $ 2,661,063
 
     

CARTER BANK & TRUST

CONSOLIDATED SELECTED FINANCIAL DATA

ASSET QUALITY DATA

(Unaudited)

 

(Dollars in Thousands)

March 31, December 31, March 31,
Nonperforming Loans     2019       2018       2018  
Real Estate $ 4,357 $ 3,289 $ 10,242
Consumer 76 65
Commercial     1,359       606        
Total Nonperforming Loans 5,792 3,960 10,242
 
Nonperforming Troubled Debt Restructurings            
Real Estate 43,778 46,771 52,295
Consumer
Commercial                  
Total Nonperforming Troubled Debt Restructurings 43,778 46,771 52,295
Total Nonperforming Loans and Troubled Debt Restructurings 49,570 50,731 62,537
Other Real Estate Owned     30,592       33,681       63,263  
Total Nonperforming Assets   $ 80,162     $ 84,412     $ 125,800  
 
March 31, December 31, March 31,

 

    2019       2018       2018  
Nonperforming Loans $ 49,570 $ 50,731 $ 62,537
Other Real Estate Owned   30,592       33,681       63,263  
Nonperforming Assets 80,162 84,412 125,800
 
Troubled Debt Restructurings (Nonaccruing) 43,778 46,771 52,295
Troubled Debt Restructurings (Accruing)   114,259       114,806       327,550  
Total Troubled Debt Restructurings $ 158,037 $ 161,577 $ 379,845
 
Nonperforming Loans to Total Portfolio Loans 1.74 % 1.88 % 2.35 %
Nonperforming Assets to Total Portfolio Loans plus Other Real Estate Owned 2.79 % 3.08 % 4.62 %
Allowance for Loan Losses to Total Portfolio Loans 1.39 % 1.45 % 1.39 %
Allowance for Loan Losses to Nonperforming Loans 79.83 % 77.27 % 58.95 %
Net Loan Charge-offs (Recoveries) $ 1,254 $ 12,989 $ (33 )
Net Loan Charge-offs (Recoveries) (Annualized) to Average Loans 0.18 % 0.47 % 0.01 %
     

CARTER BANK & TRUST

CONSOLIDATED SELECTED FINANCIAL DATA

ALLOWANCE FOR LOAN LOSSES

(Unaudited)

 
March 31, December 31, March 31,

(Dollars in Thousands)

  2019   2018   2018
Balance Beginning of Year $ 39,199 $ 35,318 $ 35,318
Provision for Loan Losses 1,627 16,870 1,515
Charge-offs:
Real Estate Loans 448 11,924 231
Consumer Loans 928 2,710 218
Commercial Loans         20      
Total Charge-offs     1,376     14,654     449  
Recoveries:
Real Estate Loans 1,415 379
Consumer Loans 122 250 103
Commercial Loans              
Total Recoveries     122     1,665     482  
Total Net Charge-offs     1,254     12,989     (33 )
Balance End of Year   $ 39,572   $ 39,199   $ 36,866  
 
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 (benefit).
 
 
2Tangible Equity Quarter-to-Date
March 31, December 31, March 31,
  2019       2018       2018  
Total Shareholders’ Equity $ 449,769 $ 436,214 $ 432,877
Less: Goodwill   58,726       58,726       58,726  
Tangible Equity 391,043 377,488 374,151
 
Shares Outstanding at End of Period 26,308,087 26,270,174 26,257,761
Tangible Book Value Per Common Share $ 14.86 $ 14.37 $ 14.25
 
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
March 31, December 31, March 31,
  2019       2018       2018  
Interest Income $ 39,133 $ 39,862 $ 35,588
Interest Expense   (11,243 )     (10,773 )     (8,151 )
Net Interest Income 27,890 29,089 27,437
Tax Equivalent Adjustment3   909       838       1,087  
NET INTEREST INCOME (FTE) (non-GAAP) $ 28,799     $ 29,927     $ 28,524  
Net Interest Income (Annualized) 116,796 118,732 115,681
Average Earning Assets   3,779,594       3,756,110       3,810,881  
NET INTEREST MARGIN (FTE) (non-GAAP)   3.09 %     3.16 %     3.04 %
 
4Core Efficiency Ratio (non-GAAP)
Quarter-to-Date
March 31, December 31, March 31,
  2019       2018       2018  
NONINTEREST EXPENSE $ 22,110 $ 29,700 $ 22,559
Less: One Time Regulatory and Compliance (500 )
Less: Losses on Sales and Write-downs of Other Real Estate Owned, net (188 ) (5,797 ) (342 )
Less: Losses on Sales and Write-downs of Bank Premises, net (170 ) (128 )
Less: Tax Credit Amortization (563 ) (1,015 ) (1,015 )
Less: Contingent Liability (250 )
Less: Conversion Expense (2 ) (393 ) (263 )
Less: Conversion Vacation Accrual         (686 )      
CORE NONINTEREST EXPENSE (non-GAAP) $ 21,187 $ 21,431 $ 20,439
 
NET INTEREST INCOME $ 27,890 $ 29,089 $ 27,437
Plus: Taxable Equivalent Adjustment3   909       838       1,087  
NET INTEREST INCOME (FTE) (Non-GAAP) $ 28,799 $ 29,927 $ 28,524
Less: Gains on Sales of Securities, net (31 ) (76 ) (868 )

Less: Other Real Estate Owned Income

(290 ) (448 ) (549 )
Less: Other Gains (271 ) (374 )
Noninterest Income   3,810       3,832       4,731  
CORE NET INTEREST INCOME (FTE) (Non-GAAP) plus NONINTEREST INCOME $ 32,017 $ 33,235 $ 31,464
 
CORE EFFICIENCY RATIO (Non-GAAP) 66.17 % 64.48 % 64.96 %

Carter Bank & Trust
Wendy Bell, 276-656-1776
Executive
Vice President & Chief Financial Officer
[email protected]