CresCom Bank’s net income reaches nearly $2M in 1Q

By Ashley Barker
Published April 28, 2014

During the first quarter of 2014, Carolina Financial Corp. — the holding company of Charleston-based CresCom Bank — reported net income of $1.9 million, or 49 cents per share diluted.

CresCom Bank’s net income, excluding Crescent Mortgage Co., was $1.7 million, according to a news release. The Atlanta-based mortgage company is owned by Carolina Financial Corp. and lends in 43 states.

“One of our primary goals in 2014 is to return CresCom Bank’s earnings to a superior community bank return on assets without the help of Crescent Mortgage Company,” Carolina Financial Corp. President and CEO Jerry Rexroad said in a statement. “We are proud to report that we exceeded the bank’s core earnings goal for the first quarter.”



CresCom’s nonperforming assets ended at 1.61% of its total assets, and its core deposits, which include checking, saving and money market deposits, increased $23.3 million during the first quarter. The bank’s number of checking accounts increased by an annualized 18.1%, and core deposits equaled around 60% of total deposits, the news release said.

As of March 31, CresCom’s loans receivable, before allowance for loan losses, grew to $579.8 million from $543.3 million at Dec. 31. That growth was largely due to $11.2 million in loans acquired during the St. George branch acquisition in late February.

On a quest to go public

In October of last year, Carolina Financial Corp. joined the OTC Bulletin Board — an online site where traders can put in orders to buy and sell stock — under the ticker symbol CARO.

Then, in late February, Carolina Financial Corp. filed a Form 10 and an application to become a publicly traded company with the Securities and Exchange Commission. Its registration statement with the SEC became effective today. On that date, the company will begin filing periodic reports, such as forms 10-Q, 10-K and 8-K, with the SEC. The company plans to pursue listing its common stock on the Nasdaq.

Becoming a public company is expected to provide a broader and more open market for shareholders, according to CresCom Bank CEO David Morrow.

“When we were a private bank, if you wanted to buy our stock, you had to find somebody that owned our stock,” Morrow said. “Then you had to negotiate with them whether you knew anything about the company or not. This will provide liquidity for our shareholders.”

The public will not see any changes at the bank, according to Morrow. But in preparation of going public, the board of directors approved a two-for-one stock split to shareholders in February.

“If you owned 100 shares, you all of a sudden owned 200 shares. But the value of each share went in half,” Morrow said. “People are more inclined to buy a $20 stock than they are to buy a $40 stock. It feels like a better bargain, and it creates more liquidity.”

The board of directors also declared a quarterly cash dividend of 5 cents per share payable on its common stock, according to a news release. The dividend will be payable on July 10 to shareholders as of June 20.

Branch openings

The bank recently acquired a commercial property within The Market at Cane Bay — a retail shopping complex adjacent to Cane Bay Boulevard and Highway 176 in Summerville — as the planned site of its 13th location.

CresCom will be the first bank to open a branch in the Cane Bay area, according to Morrow.

“This branch represents an opportunity to service more of our customers along the I-26 and I-95 corridors, and we look forward to introducing our brand to another community in South Carolina,” Morrow said.

The 1,200-square-foot branch is projected to open this summer in the burgeoning community.

“There are going to be 8,500 homes in Cane Bay. There are 2,000 there today. There’s also a high school, middle and grammar schools, and a shopping center anchored by a Publix,” Morrow said. “Right now 2,000 households don’t really support that size branch, but it will ultimately.”

Alan Greer, who was recently hired as the bank’s senior vice president, will operate out of the Summerville branch.

A 14th branch is also in the works for later this year. CresCom recently closed on a piece of property in Socastee, according to Morrow. He said the bank bought a branch location from First Citizens Bank, which had consolidated several branches in the area.

CresCom Bank already has four branches in the Myrtle Beach market and eight branches in the Lowcountry.

“The future of banking is changing rapidly, and we actually project that there will be a lot less bank branches in the future than there are today,” Morrow said. “The ones that will be there will be smaller than the 4,000- or 5,000-square-foot branches you see banks building today.”

He said the number of employees and number of branches will shrink because of growth in electronic and mobile banking.

Because of electronic banking and automated clearing house transfers and “direct deposits for everything from social security to payroll checks, a whole lot less people come to the bank today than they used to,” Morrow said. “Technology always creates efficiencies, not just here.”

Reach Ashley Barker at 843-849-3144 or @AshleyNBarker.

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