NasdaqCM:CARO

Stock Analysis Report

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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.


Snowflake Analysis

Excellent balance sheet with proven track record.


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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.4%

CARO

0.7%

US Banks

1.0%

US Market


1 Year Return

-13.8%

CARO

-28.3%

US Banks

4.1%

US Market

Return vs Industry: CARO exceeded the US Banks industry which returned -28.9% over the past year.

Return vs Market: CARO underperformed the US Market which returned -5.9% over the past year.


Shareholder returns

CAROIndustryMarket
7 Day1.4%0.7%1.0%
30 Day33.0%-0.7%5.4%
90 Day-15.6%-31.7%-5.7%
1 Year-12.8%-13.8%-25.9%-28.3%6.5%4.1%
3 Year9.3%6.4%-16.4%-22.9%28.3%19.8%
5 Year195.2%183.9%5.4%-7.2%52.2%35.0%

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?

11.62x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CARO ($32.88) is trading above our estimate of fair value ($30.29)

Significantly Below Fair Value: CARO is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CARO is poor value based on its PE Ratio (11.6x) compared to the Banks industry average (9.8x).

PE vs Market: CARO is good value based on its PE Ratio (11.6x) compared to the US market (14.4x).


Price to Earnings Growth Ratio

PEG Ratio: CARO is poor value based on its PEG Ratio (6.1x)


Price to Book Ratio

PB vs Industry: CARO is overvalued based on its PB Ratio (1.1x) compared to the US Banks industry average (0.8x).


Next Steps

Future Growth

How is Carolina Financial forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

1.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CARO's forecast earnings growth (1.9% per year) is above the savings rate (1.7%).

Earnings vs Market: CARO's earnings (1.9% per year) are forecast to grow slower than the US market (16.3% per year).

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

Revenue vs Market: CARO's revenue (8% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: CARO's revenue (8% 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 (17.3%).


Next Steps

Past Performance

How has Carolina Financial performed over the past 5 years?

39.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CARO has high quality earnings.

Growing Profit Margin: CARO's current net profit margins (34.1%) are higher than last year (28.9%).


Past Earnings Growth Analysis

Earnings Trend: CARO's earnings have grown significantly by 39.5% per year over the past 5 years.

Accelerating Growth: CARO's earnings growth over the past year (26.3%) is below its 5-year average (39.5% per year).

Earnings vs Industry: CARO earnings growth over the past year (26.3%) exceeded the Banks industry 4.5%.


Return on Equity

High ROE: CARO's Return on Equity (8.4%) is considered low.


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


Financial Institutions Analysis

Asset Level: CARO's Assets to Equity ratio (6.3x) is low.

Allowance for Bad Loans: CARO has a low allowance for bad loans (66%).

Low Risk Liabilities: 86% of CARO's liabilities are made up of primarily low risk sources of funding.

Loan Level: CARO has an appropriate level of Loans to Assets ratio (68%).

Low Risk Deposits: CARO's Loans to Deposits ratio (94%) is appropriate.

Level of Bad Loans: CARO has an appropriate level of bad loans (0.8%).


Next Steps

Dividend

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

1.22%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CARO's dividend (1.22%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.85%).

High Dividend: CARO's dividend (1.22%) is low compared to the top 25% of dividend payers in the US market (4.94%).


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 (12.7%), 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 well covered by earnings (15.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

9.3yrs

Average management tenure


CEO

Jerry Rexroad (59yo)

8.33yrs

Tenure

US$1,338,912

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 serves as Executive Chairman of the Board of Cre ...


CEO Compensation Analysis

Compensation vs Market: Jerry's total compensation ($USD1.34M) is below average for companies of similar size in the US market ($USD3.28M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Jerold Rexroad
President8.33yrsUS$1.34m1.57% $12.8m
William Gehman
Executive VP & CFO8.33yrsUS$580.70k0.19% $1.5m
David Morrow
Executive VP & Director19.33yrsUS$801.42k0.67% $5.4m
Melton Huggins
Executive VP & Secretary10.33yrsUS$697.02k0.33% $2.6m

9.3yrs

Average Tenure

58.5yo

Average Age

Experienced Management: CARO's management team is seasoned and experienced (9.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jerold Rexroad
President8.33yrsUS$1.34m1.57% $12.8m
David Morrow
Executive VP & Director19.33yrsUS$801.42k0.67% $5.4m
Claudius Watts
Independent Chairman of the Board3.08yrsUS$99.99k0.29% $2.3m
Gary Griffin
Independent Director3.17yrsUS$61.74k0.090% $732.0k
Robert Moïse
Independent Director24.33yrsUS$67.24k0.48% $3.9m
Daniel Isaac
Independent Director4yrsUS$68.29k0.32% $2.6m
Thompson Penney
Independent Director7.33yrsUS$73.54k0.13% $1.1m
W. Brandon
Independent Director19.33yrsUS$60.61k0.63% $5.1m
Robert Clawson
Independent Director24.33yrsUS$64.74k0.67% $5.5m
Jeffery Deal
Independent Director24.33yrsUS$63.49k0.068% $549.4k

13.8yrs

Average Tenure

65.5yo

Average Age

Experienced Board: CARO's board of directors are seasoned and experienced ( 13.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

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$812.572m
  • Shares outstanding: 24.71m
  • 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 operates through three segments: Community Banking, Wholesale Mortgage Banking, and Other. It offers noninterest-bearing demand accounts, interest-bearing demand and savings accounts, money market accounts, time deposits, and certificates of deposit. The company also provides commercial and residential real estate mortgage loans, real estate construction loans, commercial and industrial loans, commercial leases, and consumer loans to individuals, small to medium-sized businesses, and professional firms. In addition, it offers mortgage banking services comprising orrespondent/wholesale mortgage and loan servicing. The company operates through a network of 61 full service branches and 2 loan production offices located in South and North Carolina. Carolina Financial Corporation was incorporated in 1996 and is based in Charleston, South Carolina. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/04 02:28
End of Day Share Price2020/05/01 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.