NasdaqCM:CARO

Stock Analysis Report

Executive Summary

Carolina Financial Corporation operates as a holding company for CresCom Bank that provides a range of commercial and retail banking financial services in South Carolina and North Carolina.

Rewards

Trading at 19.9% below its fair value

Earnings are forecast to grow 11.12% per year

Earnings grew by 52.1% over the past year

Risk Analysis

Shareholders have been diluted in the past year



Snowflake Analysis

Solid track record with excellent balance sheet.


Similar Companies

Share Price & News

How has Carolina Financial's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CARO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.3%

CARO

-1.1%

US Banks

-1.4%

US Market


1 Year Return

26.1%

CARO

13.3%

US Banks

14.5%

US Market

Return vs Industry: CARO exceeded the US Banks industry which returned 13.3% over the past year.

Return vs Market: CARO exceeded the US Market which returned 14.5% over the past year.


Shareholder returns

CAROIndustryMarket
7 Day-1.3%-1.1%-1.4%
30 Day8.2%0.7%1.3%
90 Day22.1%13.3%4.6%
1 Year27.3%26.1%16.7%13.3%17.1%14.5%
3 Year45.9%42.8%29.7%20.6%45.1%35.7%
5 Year261.9%249.0%72.0%52.9%67.1%48.6%

Price Volatility Vs. Market

How volatile is Carolina Financial's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Carolina Financial undervalued compared to its fair value and its price relative to the market?

19.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CARO ($41.88) is trading below our estimate of fair value ($52.27)

Significantly Below Fair Value: CARO is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: CARO is poor value based on its PE Ratio (15.1x) compared to the Banks industry average (12.6x).

PE vs Market: CARO is good value based on its PE Ratio (15.1x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: CARO is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: CARO is overvalued based on its PB Ratio (1.5x) compared to the US Banks industry average (1.2x).


Next Steps

Future Growth

How is Carolina Financial forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

11.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CARO's forecast earnings growth (11.1% per year) is above the savings rate (1.7%).

Earnings vs Market: CARO's earnings (11.1% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: CARO's earnings are forecast to grow, but not significantly.

Revenue vs Market: CARO's revenue (10.9% per year) is forecast to grow faster than the US market (7.4% per year).

High Growth Revenue: CARO's revenue (10.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CARO's Return on Equity is forecast to be low in 3 years time (9.6%).


Next Steps

Past Performance

How has Carolina Financial performed over the past 5 years?

39.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CARO has high quality earnings.

Growing Profit Margin: CARO's current net profit margins (34.6%) are higher than last year (24.4%).


Past Earnings Growth Analysis

Earnings Trend: CARO's earnings have grown significantly by 39.6% per year over the past 5 years.

Accelerating Growth: CARO's earnings growth over the past year (52.1%) exceeds its 5-year average (39.6% per year).

Earnings vs Industry: CARO earnings growth over the past year (52.1%) exceeded the Banks industry 27.1%.


Return on Equity

High ROE: CARO's Return on Equity (9.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Carolina Financial's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: CARO has a low level of unsold assets or inventory.

Debt Coverage by Assets: CARO's debt is not covered by short term assets (assets are 0.3x debt).


Financial Institutions Analysis

Asset Level: CARO's level of assets compared to its equity is low.

Allowance for Bad Loans: CARO has a low allowance for bad loans.

Low Risk Liabilities: CARO's liabilities are made up of primarily low risk sources of funding.

Loan Level: CARO has an acceptable proportion of non-loan assets held.

Low Risk Deposits: CARO's loans are broadly funded by customer deposits.

Level of Bad Loans: CARO has an appropriate level of bad loans (0.7%)


Next Steps

Dividend

What is Carolina Financial's current dividend yield, its reliability and sustainability?

0.95%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Carolina Financial before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.0%marketbottom25%1.4%markettop25%3.7%industryaverage2.8%forecastin3Years0.9%

Current dividend yield vs market & industry

Notable Dividend: CARO's dividend (0.96%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: CARO's dividend (0.96%) is low compared to the top 25% of dividend payers in the US market (3.71%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, CARO has been paying a dividend for less than 10 years.

Growing Dividend: CARO's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (11.9%), CARO's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CARO's dividends in 3 years are forecast to be thoroughly covered by earnings (13% payout ratio).


Next Steps

Management

What is the CEO of Carolina Financial's salary, the management and board of directors tenure and is there insider trading?

8.9yrs

Average management tenure


CEO

Jerry Rexroad (59yo)

7.9yrs

Tenure

US$1,342,955

Compensation

Mr. Jerold L. Rexroad, also known as Jerry, CPA has been the Chief Executive Officer and President of Carolina Financial Corporation since 2012. Mr. Rexroad served as Chairman of the Board of Crescom Bank. ...


CEO Compensation Analysis

Compensation vs Market: Jerry's total compensation ($USD1.34M) is below average for companies of similar size in the US market ($USD2.63M).

Compensation vs Earnings: Jerry's compensation has been consistent with company performance over the past year.


Management Age and Tenure

8.9yrs

Average Tenure

58.5yo

Average Age

Experienced Management: CARO's management team is seasoned and experienced (8.9 years average tenure).


Board Age and Tenure

13.4yrs

Average Tenure

65.5yo

Average Age

Experienced Board: CARO's board of directors are seasoned and experienced ( 13.4 years average tenure).


Insider Trading

Insider Buying: CARO insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$116,65620 Nov 19
Melton Huggins
EntityIndividual
Role
Senior Key Executive
Executive VP & Secretary
Shares2,750
Max PriceUS$42.43
SellUS$91,23017 Sep 19
W. Brandon
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,507
Max PriceUS$36.39
SellUS$190,86512 Sep 19
W. Brandon
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,352
Max PriceUS$35.80
SellUS$128,18524 May 19
Jeffery Deal
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,500
Max PriceUS$36.72
SellUS$76,58721 May 19
Jeffery Deal
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,087
Max PriceUS$36.77
SellUS$40,98420 May 19
Jeffery Deal
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,105
Max PriceUS$37.09
SellUS$225,90017 May 19
David Morrow
EntityIndividual
Role
Member of the Board of Directors
Executive VP & Director
Shares6,000
Max PriceUS$38.12
SellUS$148,30017 May 19
David Morrow
EntityIndividual
Role
Member of the Board of Directors
Executive VP & Director
Shares4,000
Max PriceUS$37.12
SellUS$7,22113 Mar 19
Melton Huggins
EntityIndividual
Role
Senior Key Executive
Executive VP & Secretary
Shares224
Max PriceUS$32.24
SellUS$172,14713 Mar 19
Melton Huggins
EntityIndividual
Role
Senior Key Executive
Executive VP & Secretary
Shares4,776
Max PriceUS$36.22
SellUS$690,00011 Feb 19
Michael Leddy
EntityIndividual
Shares20,000
Max PriceUS$34.50
SellUS$181,06031 Jan 19
Robert Moise
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,500
Max PriceUS$32.92

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.1%.


Management Team

  • Jerry Rexroad (59yo)

    President

    • Tenure: 7.9yrs
    • Compensation: US$1.34m
  • Bill Gehman (58yo)

    Executive VP & CFO

    • Tenure: 7.9yrs
    • Compensation: US$560.95k
  • David Morrow (69yo)

    Executive VP & Director

    • Tenure: 18.9yrs
    • Compensation: US$831.89k
  • Melton Huggins (56yo)

    Executive VP & Secretary

    • Tenure: 9.9yrs
    • Compensation: US$598.72k

Board Members

  • Jerry Rexroad (59yo)

    President

    • Tenure: 7.9yrs
    • Compensation: US$1.34m
  • Bud Watts (57yo)

    Chairman of the Board

    • Tenure: 2.7yrs
    • Compensation: US$96.67k
  • Gary Griffin (64yo)

    Independent Director

    • Tenure: 2.8yrs
    • Compensation: US$161.29k
  • Robert Moise (71yo)

    Independent Director

    • Tenure: 23.9yrs
    • Compensation: US$67.88k
  • Daniel Isaac (67yo)

    Independent Director

    • Tenure: 3.6yrs
    • Compensation: US$64.03k
  • David Morrow (69yo)

    Executive VP & Director

    • Tenure: 18.9yrs
    • Compensation: US$831.89k
  • Thom Penney (68yo)

    Independent Director

    • Tenure: 6.9yrs
    • Compensation: US$61.15k
  • W. Brandon (55yo)

    Independent Director

    • Tenure: 18.9yrs
    • Compensation: US$53.63k
  • Robert Clawson (77yo)

    Independent Director

    • Tenure: 23.9yrs
    • Compensation: US$70.78k
  • Jeffery Deal (64yo)

    Independent Director

    • Tenure: 23.9yrs
    • Compensation: US$63.25k

Company Information

Carolina Financial Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Carolina Financial Corporation
  • Ticker: CARO
  • Exchange: NasdaqCM
  • Founded: 1996
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$920.107m
  • Shares outstanding: 22.13m
  • Website: https://www.haveanicebank.com

Number of Employees


Location

  • Carolina Financial Corporation
  • 288 Meeting Street
  • Charleston
  • South Carolina
  • 29401
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CARONasdaqCM (Nasdaq Capital Market)YesCommon StockUSUSDJul 2013
95CDB (Deutsche Boerse AG)YesCommon StockDEEURJul 2013

Biography

Carolina Financial Corporation operates as a holding company for CresCom Bank that provides a range of commercial and retail banking financial services in South Carolina and North Carolina. The company ope ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/05 00:42
End of Day Share Price2019/12/04 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.