Investor Relations

Carolina Trust Bank Announces Fourth Quarter Results

February 4, 2009
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FOR RELEASE: February 3, 2009 CONTACT: Carolina Trust Bank Lincolnton, NC John Michael Cline, President & CEO (704) 735-1104

Carolina Trust Bank (NASDAQ: CART) reported a net loss for the quarter ended December 31, 2008 of $530,000 compared to net income of $182,000 for the same period last year. Basic and diluted earnings (loss) per share were ($.31) and ($.31) compared to $.10 and $.10 for the same quarter in 2007.

As of December 31, 2008 the bank reported total assets of $160,134,000 compared to $136,815,000 for December 31, 2007. Total deposits were up 18% to $126,345,000 and total loans were $144,920,000 an increase of 19% for the year. At year-end the bank reported a net loss of $423,000 compared to after tax income of $1,023,000 for 2007.

2008 was a challenging year for the financial industry. While Carolina Trust Bank was not part of the sub-prime meltdown we were affected by the dramatic drop in interest rates. Our net interest margin dropped to 3.35% from 4.97% a year earlier. With rates now leveling off we expect to see our margins improve as we reprice our deposit base. Given the overall economic environment we were pleased with our overall growth in loans and deposits.

Our fourth quarter and year-to-date losses are attributed primarily to two issues. The first being a write off of $240,000 due to goodwill impairment. We are required to determine the value of goodwill at least annually and with the current prices of bank stocks at historic lows we have been advised by our accountants now is the time to write this off. Goodwill is not included in regulatory capital and thus this write-off will have no adverse effect on our regulatory capital ratios. The second issue we faced in the fourth quarter related to our reserve for loan losses. While net losses for the year were less than 1% of total loans, with the declining real estate market we increased our reserve in December by $232,000. This gave us a 33% increase for the year in reserve for potential loan losses. We have always been aggressive in identifying potential problem loans and are doing what it takes to move them out of the bank.

Carolina Trust Bank has always maintained a well-capitalized rating from our regulators. This being said, the bank has been approved by the US Treasury Department to participate in the Capital Purchase Program (“CPP”) at the maximum level allowed. At the current time we plan to participate in this program at the $4 million dollar level.

As our historical numbers have shown, we have operated and grown in a conservative manner which has served us well. We plan to continue to run the bank in a safe and sound manner and work through the troubling economic times we are all facing.

Carolina Trust Bank is a full service state chartered bank headquartered in Lincolnton, N.C. operating out of five full service branches in Lincoln and Catawba Counties and a loan production office in Rutherford County. Its common stock is traded on the NASDAQ under the symbol CART.