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EXHIBIT 99.1
PRESS RELEASE
FOR RELEASE: JANUARY 18, 2000 CONTACT: JAMES E. BURT, III
8:00 A.M. E.D.T. (704) 732-2222
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CAROLINA FIRST REPORTS 31% EARNINGS INCREASE
Carolina First BancShares, Inc. (Nasdaq: CFBI ) reported fourth quarter
net income of $1.7 million, or $0.29 per diluted share, compared to $.7 million,
or $0.12 per diluted share, in the fourth quarter of 1998. For comparative
purposes, the 1998 fourth quarter results included $1.8 million after tax or
$0.29 per diluted share of restructuring and merger related expenses associated
with the acquisition of Community Bank & Trust Company.
Net income for the fourth quarter of 1999 was negatively impacted due
to additional expenses related to compensation cost for health insurance plans
and supplemental retirement plans and professional fees associated with
establishing a real estate investment trust totaling approximately $1 million,
($.7 million after tax or $0.11 per diluted share). Fourth quarter net income
also included $.3 million of pretax securities losses ($.2 million after tax or
$0.03 per diluted share). Excluding these expenses and securities losses, net
income for the fourth quarter of 1999 amounted to $2.6 million, or $0.43 per
diluted share, compared to net income of $2.5 million excluding restructuring
and merger related, or $0.41 per diluted share for the fourth quarter of 1998.
Net income for 1999 was $8.8 million, or $1.45 per diluted share,
compared to $6.7 million or $1.11 per diluted share, during 1998. Net income for
1999, excluding the expenses and securities losses noted above totaling
approximately $1.4 million ($1.0 million after tax or $.16 per diluted share),
amounted to $9.8 million, or $1.61 per diluted share, compared to net income of
$8.3 million, excluding restructuring and merger related expenses, or $1.40 per
diluted share for the same period in 1998. James E. Burt, III, Chief Executive
Officer and President of Carolina First stated that he was very pleased with the
growth in commercial and consumer lending and deposit transaction accounts
during 1999 while also merging Community Bank products and systems into those of
Carolina First.
Net interest income for the fourth quarter of 1999 increased to $9.1
million, up 17% compared to the same quarter of 1998. Net interest income for
the year ended December 31, 1999 increased 15% to $34.5 million, compared to $30
million in the comparable period in 1998. These increases represent the strong
economy in which the Company operates and also the growth realized in commercial
and consumer lending.
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NONINTEREST INCOME AND EXPENSES
Noninterest income for the fourth quarter of 1999 totaled $1.9 million
compared to $2.2 million for the same period in 1998. For comparative purposes,
1999 fourth quarter results include total securities losses of $.3 million from
the sale of securities. Excluding these losses, noninterest income remained flat
compared to the fourth quarter of 1998. An increase in service charges of 9.3%,
resulting from revenue growth generated from the expansion of deposit
transaction accounts, was offset by a 29% decline in mortgage banking fees.
Noninterest income totaled $8 million for the years ended December 31,
1999 and 1998. For comparative purposes, the 1999 results included losses of $.3
million from the sale of securities. Excluding these securities losses,
noninterest income increased 3% for 1999 compared to 1998.
Noninterest expense for the fourth quarter of 1999 totaled $7.9 million
compared to $7.7 million for the same period in 1998. For comparative purposes,
the 1998 fourth quarter results included restructuring and merger related
expenses of $2.1 million and the 1999 fourth quarter results included expenses
of $1 million related to compensation cost for health insurance plans and
supplemental retirement plans and professional fees associated with establishing
a real estate investment trust.
Noninterest expense for 1999 totaled $28 million compared to $25.9
million for 1998. For comparative purposes, the 1998 results included
restructuring and merger related expenses of $2.1 million and 1999 results
included expenses of $1.1 million related to health insurance plans and
supplemental retirement plans and professional fees associated with establishing
a real estate investment trust.
BALANCE SHEET
Net loans were $533.9 million at December 31, 1999 compared to $469.4
million at December 31, 1998. This increase of 13.7% is in commercial and
consumer loans and reflects the strong markets in which Carolina First operates.
The provision for loan losses for 1999 totaled $1.7 million compared to $1.4
million in 1998. The provision for loan losses was $.5 million for both the
fourth quarter 1999 and 1998. Nonaccrual loans totaled $2.6 million in 1999
compared to $1.4 million in 1998, an increase of $1.2 million. The Company
believes these loans are adequately collateralized at December 31, 1999.
Nonperforming assets remain less than one half of one percent of total assets.
The allowance for loan losses remained relatively constant at 1.42% of loans for
1999 and 1.41% for 1998.
Total deposits at December 31, 1999 amounted to $667 million, compared
to $653 million for 1998. This modest (2.2%) growth was due primarily to a
pricing decision in early 1999 to increase earnings and the net interest margin.
This action curbed time
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deposit growth, however deposit transaction accounts increased by 10% as the
Company continued to increase market share in its existing markets. At December
31, 1999, the Company had other borrowings of $38 million that were used to fund
asset growth. Shareholders' equity at December 31, 1999 was $66 million, which
represents a book value per share of $10.99 and an equity-to-assets percentage
of 8.39%.
CORPORATE PROFILE
Carolina First BancShares, Inc. is the parent company of Lincoln Bank
of North Carolina, Cabarrus Bank of North Carolina and Community Bank & Trust
Co. and is a regional financial services company with assets of $786 million.
Carolina First provides businesses and individuals with a broad range of
financial products and services. Common stock for Carolina First is traded under
the symbol "CFBI" on the Nasdaq national market.
This news release contains forward-looking statements. Such statements
are subject to certain factors which may cause the company's results to vary
from those expected, including the risks set forth from time to time in the
company's filings with the Securities and Exchange Commission. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
reflect management's judgment only as of the date hereof. The company undertakes
no obligation to publicly revise these forward-looking statements to reflect
events and circumstances that arise after the date hereof.
(SELECTED FINANCIAL INFORMATION IS ATTACHED)
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CAROLINA FIRST BANCSHARES, INC. AND SUBSIDIARIES
(UNAUDITED, EXCEPT FOR DECEMBER 1998 AMOUNTS)
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS) December 31, December 31,
ASSETS: 1999 1998 Change
------------ ------------ --------
Cash and due from banks ....................... $ 33,659 $ 28,611 17.6 %
Federal funds sold ............................ -- 13,221 (100.0)
Interest earning bank deposits ................ 439 777 (43.5)
Investment securities ......................... 36,083 33,306 8.3
Securities available for sale ................. 151,079 154,384 (2.1)
Loans, net .................................... 533,877 469,386 13.7
Other assets .................................. 30,961 31,940 (3.1)
-------- -------- -------
Total assets ............................. $786,099 $731,626 7.4%
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LIABILITIES AND SHAREHOLDERS' EQUITY:
Total deposits ................................ $666,980 $652,603 2.2%
Repurchase agreements ......................... 11,351 10,400 9.1
Other borrowings .............................. 38,694 675 5,633.3
Other liabilities ............................. 3,103 5,971 (48.0)
-------- -------- -------
Total liabilities ........................ 720,127 669,649 7.5
Total shareholders' equity ............... 65,971 61,978 6.4
-------- -------- -------
Total liabilities and shareholders' equity $786,099 $731,626 7.4%
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CONSOLIDATED STATEMENTS OF INCOME Three Months Ended December 31, For The Year Ended December 31,
(DOLLARS IN THOUSANDS) ------------------------------- ----------------------------------
1999 1998 Change 1999 1998 Change
--------------------------------------- ---------------------------------- ------
Interest and fees on loans ................ $ 12,168 $10,766 13.0% $ 45,656 $40,848 11.8%
Interest and dividends on securities ...... 2,843 2,425 17.2 11,486 9,885 16.2
Other interest income ..................... 67 442 (84.8) 412 1,319 (68.8)
-------- ------- ------- -------- ------- -----
Total interest income ................ 15,078 13,633 10.6 57,554 52,052 10.6
-------- ------- ------- -------- ------- -----
Interest on deposits ...................... 5,359 5,688 (5.8) 21,730 21,572 0.7
Other interest expense .................... 593 127 366.9 1,301 499 160.7
-------- ------- ------- -------- ------- -----
Total interest expense ............... 5,952 5,815 2.4 23,030 22,071 4.3
-------- ------- ------- -------- ------- -----
Net interest income ............... 9,127 7,818 16.7 34,524 29,981 15.1
Provision for loan losses ................. 485 485 -- 1,655 1,365 21.2
-------- ------- ------- -------- ------- -----
Net interest income after provision 8,641 7,333 17.8 32,868 28,616 14.9
-------- ------- ------- -------- ------- -----
Charges on deposit accounts ............... 1,105 1,011 9.3 4,113 3,865 6.4
Insurance commissions ..................... 198 103 92.2 635 603 5.3
Other service fees and commissions ........ 303 382 (20.7) 1,398 1,445 (3.3)
Mortgage banking income ................... 139 198 (29.8) 604 671 (10.0)
Securities gains (losses), net ............ (277) 0 -- (239) 54 (542.6)
Other noninterest income .................. 429 469 (8.5) 1,514 1,410 7.4
-------- ------- ------- -------- ------- -----
Total noninterest income ............. 1,897 2,163 (12.3) 8,024 8,048 (0.3)
-------- ------- ------- -------- ------- -----
Salaries and benefits ..................... 4,107 2,846 44.3 13,775 12,038 14.4
Occupancy and equipment ................... 969 848 14.3 3,710 3,253 14.1
Federal and other insurance premiums ...... 54 52 3.8 196 209 (6.2)
Office supplies ........................... 193 238 (18.9) 871 938 (7.1)
Data processing ........................... 354 186 90.3 1,248 680 83.5
Restructuring and merger related expenses . -- 2,070 (100.0) -- 2,069 (100.0)
Other noninterest expense ................. 2,235 1,501 48.9 8,187 6,668 22.8
-------- ------- ------- -------- ------- -----
Total noninterest expense ............ 7,912 7,741 2.2 27,987 25,855 8.2
-------- ------- ------- -------- ------- -----
Income before income taxes ........ 2,626 1,755 49.7 12,906 10,809 19.4
Income taxes .............................. 890 1,010 (11.9) 4,130 4,100 0.7
-------- ------- ------- -------- ------- -----
Net income ........................ $ 1,736 $ 745 133.0% $ 8,776 $ 6,709 30.8%
======== ======= ======= ======== ======= =====
Net interest income, taxable equivalent ... 34,735 30,151 15.2 9,180 7,864 16.7
SHARE INFORMATION Three Months Ended December 31, Year Ended December 31,
------------------------------------------- ------------------------------------------
1999 1998 Change 1999 1998 Change
------------ ------------ -------- ------------- ----------- --------
Basic income per share:
Net income ................ $ 0.29 $ 0.13 123.1% $ 1.47 $ 1.14 28.9%
Average common
equivalent shares ...... 5,988,692 5,934,070 0.9 5,988,692 5,908,855 1.4
Diluted income per share:
Net income ................ $ 0.29 $ 0.12 141.7 $ 1.45 $ 1.11 30.6
Average common
equivalent shares ...... 6,081,239 6,072,055 0.2 6,070,414 6,059,788 0.2
Shares outstanding at period end 6,000,127 5,936,410 1.1 6,000,127 5,936,410 1.1
Cash dividends declared ........ $ 0.10 $ 0.08 25.0 $ 0.38 $ 0.31 22.6
Book value ..................... $ 10.99 $ 10.44 5.2 $ 10.99 $ 10.44 5.3
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CAROLINA FIRST BANCSHARES, INC. AND SUBSIDIARIES
(UNAUDITED, EXCEPT FOR DECEMBER 1998 AMOUNTS)
December 31, December 31,
Loan Portfolio 1999 1998 Change
--------- ----------------------------
(DOLLARS IN THOUSANDS)
Commercial ................... $309,070 $270,650 14.2 %
Real estate .................. 22,667 25,438 (10.9)
Home equity .................. 46,020 35,003 31.5
Installment .................. 163,783 145,018 12.9
-------- -------- ------
Total ................... $541,540 $476,109 13.7%
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December 31, December 31,
1999 1998 Change
----------- -----------------------
NONPERFORMING ASSETS
(Dollars in thousands)
Nonaccrual loans ....................... $2,615 $1,432 82.6 %
Loans 90 days or more past due and
still accruing interest ........... 178 111 60.4
Other Real Estate ...................... 221 326 (32.2)
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Total nonperforming assets ........ $3,014 $1,869 61.3%
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12 Months Ended December 31,
----------------------------
1999 1998 Change
---------------------------------------------
ALLOWANCE FOR LOAN LOSSES
(Dollars in thousands)
Beginning balance (January 1) ............... $ 6,724 $ 5,837 15.2%
Provision charged to operations ............. 1,655 1,365 21.2
Charge-offs ................................. (857) (680) 26.0
Recoveries .................................. 141 202 (30.2)
Net loan charge-offs ................... (716) (478) 49.8
------- ------- ------
Ending balance ...................... $ 7,663 $ 6,724 14.0%
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SELECTED AVERAGE BALANCES Three Months Ended December 31, For The Year Ended December 31,
------------------------------------ -------------------------------
(Dollars in thousands) 1999 1998 Change 1999 1998 Change
-------- ------------------------ ------------------------------------
Loans..................................... $525,264 $454,046 15.7% $494,732 $423,246 16.9 %
Securities................................ 192,606 168,381 14.4 198,522 168,243 18.0
Total interest earning assets............. 716,122 657,106 9.0 700,960 616,975 13.6
Assets.................................... 779,180 715,737 8.9 758,740 669,979 13.2
Deposits.................................. 564,960 546,416 3.4 568,175 513,464 10.7
Total interest bearing liabilities........ 603,196 556,743 8.3 593,164 522,548 13.5
Shareholders' equity...................... 67,105 65,090 3.1 64,959 58,069 11.9
Three Months Ended December 31, For The Year Ended December 31,
------------------------------- ---------------------------------
SELECTED YIELD/COST RATES 1999 1998 CHANGE 1999 1998 CHANGE
---------- ----------------------------- ----------------------------------------
Yield on loans........................ 9.27 % 9.48% (21)BP 9.23 % 9.65 % (42)BP
Yield on securities................... 6.02 5.87 15 5.89 5.98 (9)
Yield on interest earning assets...... 8.42 8.30 12 8.24 8.46 (22)
Cost of deposits...................... 3.79 4.16 (37) 3.82 4.20 (38)
Cost of interest bearing liabilities.. 3.95 4.18 (23) 3.88 4.22 (34)
Interest rate spread.................. 4.48 4.11 37 4.36 4.24 12
Net interest margin................... 5.11 4.76 35 4.96 4.89 7
12 Months Ended December 31,
---------------------------------------------
1999 1998 Change
--------- ---------- -------------
SIGNIFICANT FINANCIAL/OPERATING RATIOS
Return on average assets ......................... 1.16% 1.00% 16 BP
Return on average equity ......................... 13.51 11.55 196
Efficiency ratio** ............................... 69.32 71.26 (194)
Allowance for loan losses to gross loans ......... 1.42 1.41 0
Nonperforming assets to total assets ............. 0.38 0.26 12
Reserves to nonperforming loans .................. 274.36 435.77 (16,141)
Interest bearing liabilities to earning assets ... 98.34 99.86 (152)
Equity to assets ................................. 8.39 8.47 (8)
Gross loans to deposits .......................... 81.19 72.96 823
Earning assets to total assets ................... 92.75 90.84 191
==============================================================================
BP Change is measured in basis points
** Noninterest expense less foreclosed property expense divided by the sum
of taxable equivalent net interest income plus noninterest income
adjusted for non-recurring income.