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Carolina Financial Corporation Reports Results for the Fourth Quarter of 2019

CHARLESTON, S.C., Jan. 31, 2020 (GLOBE NEWSWIRE) -- Carolina Financial Corporation (the “Company”) (CARO) today announced financial results for the fourth quarter of 2019.

Financial highlights at and for the three months ended December 31, 2019, include:

  • Net income for Q4 2019 increased 6.8% to $16.5 million, or $0.74 per diluted share, from $15.4 million, or $0.68 per diluted share for Q4 2018.

  • Operating earnings for Q4 2019, which exclude certain non-operating income and expenses, increased 6.8% to $18.1 million, or $0.81 per diluted share, from $16.9 million, or $0.75 per diluted share, for Q4 2018.

  • Operating earnings for Q4 2019 have been adjusted to eliminate the following items:

    • Merger-related expenses of $2.3 million.
    • The fair value gain on interest rate swaps of approximately $873,000.
    • The loss on early extinguishment of debt of approximately $77,000.

  • Performance ratios for Q4 2019 compared to Q4 2018:

    • Return on average assets was 1.66% compared to 1.67%.
    • Operating return on average assets was 1.82% compared to 1.83%.
    • Return on average tangible equity was 13.55% compared to 14.53%.
    • Operating return on average tangible equity was 14.86% compared to 15.92%.

  • On December 31, 2019, the Company closed its acquisition of Carolina Trust BancShares, Inc. (“Carolina Trust”). The acquisition added $481.0 million of loans receivable, gross and $540.2 million of deposits.

  • Loans receivable, gross grew $703.6 million since December 31, 2018. Excluding the impact of loans acquired from Carolina Trust, loans receivable, gross grew $222.6 million, or 8.8% since December 31, 2018.

  • Total deposits increased $690.2 million since December 31, 2018. Excluding the impact of deposits acquired from Carolina Trust, deposits increased $150.0 million since December 31, 2018.

  • On December 3, 2018, the Company announced that the Board of Directors had approved a plan to repurchase up to $25 million in shares of the Company’s common stock through open market and privately negotiated transactions over the next three years. The Company began stock repurchases on December 4, 2018. During the fourth quarter of 2019, the Company repurchased approximately 9,000 shares at an average price of $34.77. Cumulatively since December 4, 2018, the Company repurchased approximately 390,000 shares at an average price of $32.01.

  • On November 17, 2019, the Company announced the execution of an agreement and plan of merger with United Bankshares, Inc. (“United”) (UBSI), pursuant to which the Company will merge with and into United, with United as the surviving corporation of the merger. Pursuant to the merger agreement, each outstanding share of the Company’s common stock will be converted into the right to receive 1.13 shares of United common stock, par value $2.50 per share, resulting in an aggregate transaction value of approximately $1.1 billion, based on closing price of a share of United’s common stock as of that date. The transaction is subject to customary regulatory and shareholder approvals.

Financial Results

Carolina Financial Corporation

  • The Company reported net income for Q4 2019 of $16.5 million, or $0.74 per diluted share, as compared to $15.4 million, or $0.68 per diluted share, for Q4 2018.

    • Accretion income from acquired loans was $1.6 million for Q4 2019. Included in net income for Q4 2018 was a recovery of interest income of $0.9 million related to a payoff of a purchased credit impaired loan. Excluding the recovery, accretion income from acquired loans was $1.9 million for Q4 2018.

  • Operating earnings for Q4 2019, which exclude certain non-operating income and expenses, increased 6.8% to $18.1 million, or $0.81 per diluted share, from $16.9 million, or $0.75 per diluted share, for Q4 2018.

    • Included in net income for Q4 2019 were merger-related expenses of $2.3 million, a fair value gain on interest rate swaps of approximately $873,000 and a loss on early extinguishment of debt of approximately $77,000.
    • Included in net income for Q4 2018 was a fair value loss on interest rate swaps of $2.2 million and a gain on sale of securities of approximately $346,000.

  • The Company reported net income for the year ended December 31, 2019 of $62.7 million or $2.80 per diluted share, as compared to $49.7 million, or $2.26 per diluted share, for the year ended December 31, 2018.

    • Accretion income from acquired loans was $7.6 million for the year ended December 31, 2019 compared to $9.8 million for the year ended December 31, 2018. Provision for loan losses during the year ended December 31, 2019 and 2018 was $2.6 million and $2.1 million, respectively.

  • Operating earnings for the year ended December 31, 2019, which exclude certain non-operating income and expenses, increased to $67.6 million, or $3.02 per diluted share compared to $62.8 million, or $2.86 per diluted share, for the same period of 2018.

    • Included in net income for the year ended December 31, 2019 was a fair value loss on interest rate swaps of $3.7 million, a temporary impairment of mortgage servicing rights of $3.1 million, a gain on sale of securities of $3.9 million, a loss on early extinguishment of debt of approximately $178,000 and merger-related expenses of $2.8 million.
    • Included in net income for the year ended December 31, 2018 was a fair value loss on interest rate swaps of approximately $340,000, a loss on sale of securities of $1.9 million and merger-related expenses of $15.2 million.

  • The Company’s net interest margin-tax equivalent (NIM) decreased to 3.94% for Q4 2019 compared to 4.23% for Q4 2018. Q4 2019 net interest income included accretion income from acquired loans of $1.6 million (18 bps to NIM) and early payoff fees of approximately $282,000 (3 bps to NIM). Q4 2018 accretion income included a recovery of interest income of approximately $0.9 million (11 bps to NIM), accretion income from acquired loans of $1.9 million (22 bps to NIM) and early payoff fees of approximately $414,000 (6 bps to NIM).

    • Excluding accretion income from acquired loans and early payoff fees, Q4 2019 net interest margin was 3.73% compared to 3.84% in Q4 2018.

  • The Company reported book value per common share of $30.14 and $25.83 as of December 31, 2019 and 2018, respectively. Tangible book value per common share was $22.00 and $19.36 as of December 31, 2019 and 2018, respectively.

  • At December 31, 2019, the Company’s regulatory capital ratios exceeded the minimum levels currently required. Stockholders’ equity totaled $743.4 million as of December 31, 2019 compared to $575.3 million at December 31, 2018. Tangible equity to tangible assets at December 31, 2019 was 12.04% compared to 11.83% at December 31, 2018.

  • During Q4 2019, the Company repurchased approximately 9,000 shares at an average price of $34.77.

Banking Segment

  • Banking segment net income increased 3.1% to $15.9 million for Q4 2019 compared to $15.4 million for Q4 2018. Accretion income from acquired loans was $1.6 million for Q4 2019. Included in net income for Q4 2018 was a recovery of interest income of $0.9 million related to a payoff of a purchased credit impaired loan. Excluding the recovery, accretion income from acquired loans was $1.9 million for Q4 2018.

  • Banking segment net income increased 27.7% to $63.4 million for the year ended December 31, 2019 compared to $49.6 million for the year ended December 31, 2018. Accretion income from acquired loans was $7.6 million for the year ended December 31, 2019 compared to $9.8 million for the year ended December 31, 2018. Provision for loan losses during the year ended December 31, 2019 and 2018 was $2.6 million and $2.1 million, respectively.

  • Banking segment operating earnings increased 3.5% to $17.5 million for Q4 2019 compared to $16.9 million for Q4 2018.

  • Banking segment operating earnings increased 4.9% to $65.9 million for the year ended December 31, 2019 compared to $62.8 million for the year ended December 31, 2018.

  • Provision for loan losses during Q4 2019 was $580,000. Provision for loan losses during Q4 2018 was $750,000. The provision for loan losses was primarily driven by the organic loan growth.

  • Non-performing assets were 0.59% and 0.35% of total assets at December 31, 2019 and 2018, respectively. The increase in the NPA ratio was primarily due to two fully collateralized lending relationships.

  • Loans receivable, gross grew $703.6 million since December 31, 2018. Excluding the impact of loans acquired from Carolina Trust, loans receivable, gross grew $222.6 million, or 8.8% since December 31, 2018.

  • Total deposits increased $690.2 million since December 31, 2018. Excluding the impact of deposits acquired from Carolina Trust, deposits increased $150.0 million since December 31, 2018.

Wholesale Mortgage Banking

  • Net income for the wholesale mortgage banking segment was approximately $949,000 for Q4 2019 compared to net income of approximately $599,000 for Q4 2018. Net income was $1.6 million for the year ended December 31, 2019 compared to $2.3 million for the year ended December 31, 2018.

    • Included in net income for the year ended December 31, 2019 was a temporary impairment of mortgage servicing rights (MSR) of $3.1 million. The Company does not hedge the mortgage servicing rights positions and the impact of falling long-term interest rates increased prepayment speed assumptions driving down the value of the MSR asset. Excluding the impact of the temporary impairment of mortgage servicing rights, operating earnings were $4.0 million for the year ended December 31, 2019.

  • Net margin was 2.03% for the three months ended December 31, 2019 compared to 1.84% for the three months ended December 31, 2018. Originations for Q4 2019 and Q4 2018 were $237.6 million and $168.0 million, respectively.

  • Net margin was 2.04% for the year ended December 31, 2019 compared to 1.74% for the year ended December 31, 2018. Originations for the year ended December 31, 2019 and 2018 were $800.0 million and $744.2 million, respectively.

Dividend Declared

On January 30, 2020, the Company declared a $0.10 dividend per common share, payable on April 6, 2020 to stockholders of record on March 16, 2020. 

About Carolina Financial Corporation

Carolina Financial Corporation (CARO) is the holding company of CresCom Bank, which also owns and operates Atlanta-based Crescent Mortgage Company.  As of December 31, 2019, Carolina Financial Corporation had approximately $4.7 billion in total assets and Crescent Mortgage Company was approved to originate loans in 48 states partnering with community banks, credit unions and mortgage brokers.

Addendum to News Release – Use of Certain Non-GAAP Financial Measures and Forward-Looking Statements

This news release contains financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). Such statements should be read along with the accompanying tables, which provide a reconciliation of non-GAAP measures to GAAP measures. This news release and the accompanying tables discuss financial measures, including but not limited to, core deposits, tangible book value, operating earnings and net income related to segments of the Company, which are 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 Company’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. Investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company’s results or financial condition as reported under GAAP.

Please refer to the Non-GAAP reconciliation tables later in this release for additional information.  

Forward-Looking Statements

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 include but are not limited to statements with respect to our plans, objectives, expectations and intentions and other statements that are not historical facts, and other statements identified by words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” and “projects,” as well as similar expressions.  Such statements are subject to risks, uncertainties, and other factors 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 Company or any person that the future events, plans, or expectations contemplated by the Company will occur or be achieved.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) the strength of the United States economy in general and the strength of the local economies in which we conduct operations may be different than expected resulting in, among other things, a deterioration in the credit quality or a reduced demand for credit, including the resultant effect on the Company’s loan portfolio and allowance for loan losses; (3) 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, which may result in increased credit risk-related losses and expenses; (4) the risk that the preliminary financial information reported herein and our current preliminary analysis will be different when our review is finalized; (5) changes in the U.S. legal and regulatory framework including, but not limited to, the Dodd-Frank Act and regulations adopted thereunder; (6) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) could have a negative impact on the Company; (7) the business related to acquisitions may not be integrated successfully or such integration may take longer to accomplish than expected; (8) the expected cost savings and any revenue synergies from acquisitions may not be fully realized within expected timeframes; (9) disruption from acquisitions may make it more difficult to maintain relationships with clients, associates, or suppliers; and (10) the impact of hurricanes and other natural disasters on our loan portfolio and the economic prospects of our coastal markets.  Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in our reports (such as our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov).  All subsequent written and oral forward-looking statements concerning the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. We do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

 
 
CAROLINA FINANCIAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
             
    December 31,
2019
    December 31,
2018
 
    (Unaudited)     (Audited)  
    (In thousands)  
ASSETS                
Cash and due from banks   $ 41,411       28,857  
Interest-bearing cash     91,792       33,276  
Cash and cash equivalents     133,203       62,133  
Securities available-for-sale     879,235       842,801  
Federal Home Loan Bank stock, at cost     23,280       21,696  
Other investments     3,521       3,450  
Derivative assets     1,791       4,032  
Loans held for sale     31,282       16,972  
Loans receivable, gross     3,227,937       2,524,336  
Allowance for loan losses     (16,521 )     (14,463 )
Loans receivable, net     3,211,416       2,509,873  
                 
Premises and equipment, net     70,702       60,866  
Right of use operating lease asset     17,163        
Accrued interest receivable     14,951       13,494  
Real estate acquired through foreclosure, net     2,325       1,534  
Deferred tax assets, net     2,463       5,786  
Mortgage servicing rights     25,941       32,933  
Cash value life insurance     71,267       58,728  
Core deposit intangible     16,621       16,462  
Goodwill     184,259       127,592  
Other assets     19,453       12,396  
Total assets   $ 4,708,873       3,790,748  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Liabilities:                
Noninterest-bearing deposits   $ 668,616       547,022  
Interest-bearing deposits     2,739,745       2,171,171  
Total deposits     3,408,361       2,718,193  
Short-term borrowed funds     449,814       405,500  
Long-term debt     42,761       59,436  
Right of use operating lease liability     17,593        
Derivative liabilities     3,427       1,232  
Drafts outstanding     8,193       8,129  
Advances from borrowers for insurance and taxes     3,288       4,100  
Accrued interest payable     2,450       1,591  
Reserve for mortgage repurchase losses     892       1,292  
Dividends payable to stockholders     2,227       1,576  
Accrued expenses and other liabilities     26,427       14,414  
Total liabilities     3,965,433       3,215,463  
Stockholders’ equity:                
Preferred stock            
Common stock     248       224  
Additional paid-in capital     514,272       408,224  
Retained earnings     221,103       167,173  
Accumulated other comprehensive income (loss), net of tax     7,817       (336 )
Total stockholders’ equity     743,440       575,285  
Total liabilities and stockholders’ equity   $ 4,708,873       3,790,748  
                 
                 


CAROLINA FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                         
    For the Three Months     For the Year  
    Ended December 31,     Ended December 31,  
    2019     2018     2019     2018  
                                 
    (In thousands, except share data)  
Interest income                                
Loans   $ 37,769       35,214       147,921       133,252  
Investment securities     6,214       7,243       27,424       26,222  
Dividends from Federal Home Loan Bank stock     280       253       1,203       1,004  
Other interest income     123       209       568       580  
Total interest income     44,386       42,919       177,116       161,058  
Interest expense                                
Deposits     6,882       5,808       27,106       18,727  
Short-term borrowed funds     1,652       1,576       8,328       6,064  
Long-term debt     539       643       2,432       2,457  
Total interest expense     9,073       8,027       37,866       27,248  
Net interest income     35,313       34,892       139,250       133,810  
Provision for loan losses     580       750       2,580       2,059  
Net interest income after provision for loan losses     34,733       34,142       136,670       131,751  
Noninterest income                                
Mortgage banking income     5,527       3,593       19,326       15,295  
Deposit service charges     1,726       1,775       6,814       7,755  
Net loss on extinguishment of debt     (77 )           (178 )      
Net gain (loss) on sale of securities           346       3,891       (1,946 )
Fair value adjustments on interest rate swaps     873       (2,222 )     (3,659 )     (340 )
Net increase in cash value life insurance     395       377       1,591       1,530  
Mortgage loan servicing income     2,413       2,624       10,107       9,052  
Debit card income, net     1,500       1,246       4,839       4,809  
Other     934       781       4,379       3,741  
Total noninterest income     13,291       8,520       47,110       39,896  
Noninterest expense                                
Salaries and employee benefits     13,559       12,857       53,822       53,517  
Occupancy and equipment     4,379       4,101       16,902       15,961  
Marketing and public relations     307       320       1,614       1,330  
FDIC insurance           285       502       1,090  
Recovery of mortgage loan repurchase losses     (100 )     (150 )     (400 )     (600 )
Legal expense     66       95       438       422  
Other real estate expense (income), net     92       (10 )     422       (13 )
Mortgage subservicing expense     697       696       2,872       2,468  
Amortization of mortgage servicing rights     1,570       1,239       5,721       4,206  
Impairment of mortgage servicing rights                 3,100        
Amortization of core deposit intangible     706       763       2,910       3,139  
Merger-related expenses     2,270             2,753       15,216  
Other     3,013       3,041       12,436       12,472  
Total noninterest expense     26,559       23,237       103,092       109,208  
Income before income taxes     21,465       19,425       80,688       62,439  
Income tax expense     4,972       3,981       17,948       12,769  
Net income   $ 16,493       15,444       62,740       49,670  
                                 
Earnings per common share:                                
Basic   $ 0.74       0.69       2.83       2.28  
Diluted   $ 0.74       0.68       2.80       2.26  
Dividends declared per common share   $ 0.10       0.07       0.36       0.25  
Weighted average common shares outstanding:                                
Basic     22,140,187       22,416,190       22,168,082       21,756,595  
Diluted     22,363,814       22,587,466       22,385,127       21,972,857  
                                 
                                 


CAROLINA FINANCIAL CORPORATION
(Unaudited)
                               
    At or for the Three Months Ended  
Selected Financial Data:   December 31,
2019
    September 30,
2019
    June 30,
2019
    March 31,
2019
    December 31,
2018
 
                                         
    (Dollars in thousands)  
Selected Average Balances:                              
Total assets   $ 3,978,345       3,891,019       3,878,269       3,826,116       3,700,795  
Investment securities and FHLB stock     822,430       815,207       832,224       833,720       838,834  
Loans receivable, net     2,711,061       2,639,921       2,610,394       2,535,192       2,428,603  
Loans held for sale     31,436       29,733       21,905       13,754       20,120  
Deposits     2,900,713       2,837,353       2,782,576       2,751,913       2,760,156  
Stockholders’ equity     628,850       614,550       598,196       580,300       569,528  
                                         
Performance Ratios (annualized):                                        
Return on average stockholders’ equity     10.49 %     10.82 %     10.08 %     10.03 %     10.85 %
Return on average tangible equity (Non-GAAP)     13.55 %     14.08 %     13.24 %     13.32 %     14.53 %
Return on average assets     1.66 %     1.71 %     1.55 %     1.52 %     1.67 %
Operating return on average stockholders’ equity (Non-GAAP)     11.50 %     12.08 %     10.87 %     10.11 %     11.88 %
Operating return on average tangible equity (Non-GAAP)     14.86     15.72 %     14.28 %     13.44 %     15.92 %
Operating return on average assets (Non-GAAP)     1.82 %     1.91 %     1.68 %     1.53 %     1.83 %
Average earning assets to average total assets     90.28 %     90.13 %     89.83 %     89.72 %     89.64 %
Average loans receivable to average deposits     93.46 %     93.04 %     93.81 %     92.12 %     87.99 %
Average stockholders’ equity to average assets     15.81 %     15.79 %     15.42 %     15.17 %     15.39 %
Net interest margin-tax equivalent (1)     3.94 %     4.13 %     3.99 %     4.00 %     4.23 %
Net charge-offs (recoveries) to average loans receivable     0.03 %     0.05 %     (0.03 )%     0.02 %     (0.02 )%
Nonperforming assets to period end loans receivable     0.85 %     0.77 %     0.54 %     0.50 %     0.53 %
Nonperforming assets to total assets     0.59 %     0.52 %     0.37 %     0.34 %     0.35 %
Nonperforming loans to total loans     0.78 %     0.70 %     0.50 %     0.45 %     0.47 %
Allowance for loan losses as a percentage of gross loans receivable (end of period) (2)     0.51 %     0.59 %     0.60 %     0.58 %     0.57 %
Allowance for loan losses as a percentage of gross non-acquired loans receivable (Non-GAAP)     0.74 %     0.74 %     0.77 %     0.77 %     0.79 %
Allowance for loan losses as a percentage of nonperforming loans (2)     65.44 %     84.73 %     120.51 %     129.74 %     123.13 %
                                         
Nonperforming Assets, excluding purchased credit impaired:                                        
Loans 90 days or more past due and still accruing   $ 81                         20  
Nonaccrual loans     25,166       19,032       13,167       11,578       11,721  
Total nonperforming loans     25,247       19,032       13,167       11,578       11,741  
Real estate acquired through foreclosure, net     2,325       1,832       1,218       1,335       1,534  
Total nonperforming assets   $ 27,572       20,864       14,385       12,913       13,275  
                                         
(1)  Net interest margin-tax equivalent reflects tax-exempt income on a tax-equivalent basis.
(2)  Acquired loans represent 30.7%, 20.2%, 22.7%, 24.9%, and 27.2%, of gross loans receivable at December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018, respectively.
 
 


Carolina Financial Corporation
Segment Information
(Unaudited)
(Dollars in thousands)
                                     
    For the Three Months     For the Year     Increase (Decrease)  
    Ended December 31,     Ended December 31,     Three        
    2019     2018     2019     2018     Months     Year  
Segment net income:                                                
Community banking   $ 15,933       15,449       63,382       49,624       484       13,758  
Wholesale mortgage banking     949       599       1,572       2,315       350       (743 )
Other     (424 )     (594 )     (2,299 )     (2,266 )     170       (33 )
Eliminations     35       (10 )     85       (3 )     45       88  
Total net income   $ 16,493       15,444       62,740       49,670       1,049       13,070  


    For the Three Months Ended  
    December 31,
2019
    September 30,
2019
    June 30,
2019
    March 31,
2019
    December 31,
2018
 
Segment net income:                                        
Community banking   $ 15,933       16,864       15,804       14,781       15,449  
Wholesale mortgage banking     949       325       (92 )     390       599  
Other     (424 )     (582 )     (657 )     (636 )     (594 )
Eliminations     35       21       19       10       (10 )
Total net income   $ 16,493       16,628       15,074       14,545       15,444  


    For the Three Months Ended December 31, 2019
    Community     Mortgage                  
    Banking     Banking     Other     Eliminations     Total
Interest income   $ 43,991       399       13       (17 )     44,386
Interest expense     8,574       61       501       (63 )     9,073
Net interest income (expense)     35,417       338       (488 )     46       35,313
Provision for loan losses     589       (9 )                 580
Noninterest income from external customers     6,222       7,045       24             13,291
Intersegment noninterest income     242                   (242 )    
Noninterest expense from external customers     20,423       5,924       212             26,559
Intersegment noninterest expense           240       2       (242 )    
Income (loss) before income taxes     20,869       1,228       (678 )     46       21,465
Income tax expense (benefit)     4,936       279       (254 )     11       4,972
Net income (loss)   $ 15,933       949       (424 )     35       16,493


    For the Three Months Ended December 31, 2018
    Community     Mortgage                  
    Banking     Banking     Other     Eliminations     Total
Interest income   $ 42,577       480       15       (153 )     42,919
Interest expense     7,494       170       537       (174 )     8,027
Net interest income (expense)     35,083       310       (522 )     21       34,892
Provision for loan losses     750                         750
Noninterest income from external customers     2,990       5,507       23             8,520
Intersegment noninterest income     242       36             (278 )    
Noninterest expense from external customers     18,141       4,818       277       1       23,237
Intersegment noninterest expense           240       2       (242 )    
Income (loss) before income taxes     19,424       795       (778 )     (16 )     19,425
Income tax expense (benefit)     3,975       196       (184 )     (6 )     3,981
Net income (loss)   $ 15,449       599       (594 )     (10 )     15,444
                                       


Carolina Financial Corporation
Segment Information, Continued
(Unaudited)
(Dollars in thousands) 
                             
    For the Year Ended December 31, 2019
    Community     Mortgage                  
    Banking     Banking     Other     Eliminations     Total
Interest income   $ 175,726       1,695       59       (364 )     177,116
Interest expense     35,736       483       2,138       (491 )     37,866
Net interest income (expense)     139,990       1,212       (2,079 )     127       139,250
Provision for loan losses     2,709       (129 )                 2,580
Noninterest income from external customers     21,384       25,652       74             47,110
Intersegment noninterest income     966       17             (983 )    
Noninterest expense from external customers     77,921       24,004       1,167             103,092
Intersegment noninterest expense           960       6       (966 )    
Income (loss) before income taxes     81,710       2,046       (3,178 )     110       80,688
Income tax expense (benefit)     18,328       474       (879 )     25       17,948
Net income (loss)   $ 63,382       1,572       (2,299 )     85       62,740


    For the Year Ended December 31, 2018
    Community     Mortgage                  
    Banking     Banking     Other     Eliminations     Total
Interest income   $ 159,483       1,841       56       (322 )     161,058
Interest expense     25,227       414       2,025       (418 )     27,248
Net interest income (expense)     134,256       1,427       (1,969 )     96       133,810
Provision for loan losses     2,034       25                   2,059
Noninterest income from external customers     18,680       21,106       110             39,896
Intersegment noninterest income     966       99             (1,065 )    
Noninterest expense from external customers     89,459       18,631       1,117       1       109,208
Intersegment noninterest expense           960       6       (966 )    
Income (loss) before income taxes     62,409       3,016       (2,982 )     (4 )     62,439
Income tax expense (benefit)     12,785       701       (716 )     (1 )     12,769
Net income (loss)   $ 49,624       2,315       (2,266 )     (3 )     49,670


...
    Loan Originations   Mortgage Banking Income   Margin  
                               
    For the Three Months Ended December 31,