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Carolina Bank Holdings, Inc. Reports Third Quarter Earnings Increased 124% to $1,819,000

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GREENSBORO, N.C., Oct. 31, 2012 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq: CLBH) today reported third quarter 2012 results with highlights as follows:

Third Quarter 2012 Financial Highlights

  • Net income for the third quarter of 2012 was $1,819,000 compared to $812,000 in the third quarter of 2011.
  • Diluted net income per common share increased to $0.44 in the third quarter of 2012 from $0.15 in the third quarter of 2011.
  • Net income available to common shareholders was $1,505,000 in the third quarter of 2012 compared to $520,000 in the third quarter of 2011.
  • Net income available to common shareholders was $4,392,000 in the first nine months of 2012, or $1.30 per common share, compared to $494,000, or $0.15 per common share, in the first nine months of 2011.
  • The net interest margin, computed on a fully taxable basis, decreased to 3.71% in the third quarter of 2012 compared to 3.89% in the third quarter of 2011.
  • Mortgage banking income gross revenues increased to $5,576,000 in the third quarter of 2012 from $2,964,000 in the third quarter of 2011.
  • Carolina Bank, the subsidiary of Carolina Bank Holdings, Inc., continued to maintain 'Well Capitalized' status, the highest regulatory capital measure. Capital ratios at September 30, 2012 for Carolina Bank improved to 9.00% for Tier 1 leverage, 11.14% for Tier 1 risk-based, and 14.09% for total risk-based.
  • Average non-interest-bearing demand deposits increased 24.6% in the first nine months of 2012 from the first nine months in 2011.

Robert T. Braswell, President and CEO of Carolina Bank Holdings, Inc. commented, "We are pleased to report strong net income and earnings per share for the third quarter. Our financial results reflect improved credit quality and strong results by our mortgage division. While the continued low interest rate environment negatively impacted our net interest margin during the quarter, our mortgage division experienced record originations and revenues during the third quarter of 2012."

Non-performing loans to total loans held for investment decreased to 4.66% at September 30, 2012 from 4.99% at September 30, 2011. Non-performing assets to total assets decreased to 3.87% at September 30, 2012 from 5.06% at September 30, 2011. Both of these ratios improved from the previous quarter. Braswell commented, "We continue to focus on improving asset quality and resolving several long standing credit challenges."

About the Company

Carolina Bank, the banking subsidiary of Carolina Bank Holdings, Inc. began banking operations on November 25, 1996. The parent company is a North Carolina corporation organized in 2000. The bank is engaged in lending and deposit gathering activities in the Piedmont Triad of North Carolina, with operations in four counties: Guilford, Alamance, Forsyth and Randolph. The bank has eight full-service banking locations, four in Greensboro, one in Asheboro, one in High Point, one in Burlington, and one in Winston-Salem and mortgage loan production offices in Burlington, Raleigh, and Hillsborough. The Company's stock is listed on the NASDAQ Global Market under the symbol CLBH. Further information is available on the Company's web site: www.carolinabank.com.

This press release contains forward-looking statements regarding future events. These statements are only predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include risks of managing our growth, substantial changes in financial markets, regulatory changes, changes in interest rates, loss of deposits and loan demand to other financial institutions, and changes in real estate values and the real estate market. Additional information concerning factors that could cause actual results to be materially different from those in the forward-looking statements is contained in the Company's filings with the Securities and Exchange Commission. Carolina Bank Holdings, Inc. undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

 
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Balance Sheets
  September 30, December 31,
  2012 2011
  (unaudited)  
   
Assets    
Cash and due from banks  $ 5,947  $ 5,664
Interest-bearing deposits with banks  32,074  7,647
Securities available-for-sale, at fair value 45,197 42,208
Securities held-to-maturity 226 392
Loans held for sale 95,711 91,955
Loans 459,323 487,031
Less allowance for loan losses (10,725) (11,793)
Net loans 448,598 475,238
Premises and equipment, net 17,419 17,442
Other real estate owned 4,751 6,728
Bank-owned life insurance 10,670 10,385
Other assets 15,153 15,666
Total assets  $ 675,746  $ 673,325
     
Liabilities and Stockholders' Equity    
Deposits    
Non-interest bearing demand  $ 62,924  $ 57,475
NOW, money market and savings 335,114 324,449
Time 190,634 214,715
Total deposits 588,672 596,639
     
Advances from the Federal Home Loan Bank 3,006 3,075
Securities sold under agreements to repurchase 3,688 1,536
Subordinated debentures 19,545 19,489
Other liabilities and accrued expenses 8,956 6,028
Total liabilities 623,867 626,767
     
Stockholders' equity    
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding 16,000 shares in 2012 and 2011 15,471 15,177
Common stock, $1 par value; authorized 20,000,000 shares; issued and outstanding 3,387,045 in 2012 and 2011 3,387 3,387
Common stock warrants 1,841 1,841
Additional paid-in capital 15,897 15,870
Retained earnings 13,524 9,132
Stock in directors' rabbi trust (975) (875)
Directors' deferred fees obligation 975 875
Accumulated other comprehensive income 1,759 1,151
Total stockholders' equity 51,879 46,558
Total liabilities and stockholders' equity  $ 675,746  $ 673,325
     
 
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
  Three Months Nine Months
  Ended September 30, Ended September 30,
  2012 2011 2012 2011
  (in thousands, except per share data)
Interest income        
Loans  $ 6,659  $ 7,153  $ 20,631  $ 21,202
Investment securities, taxable  303  333  922  1,094
Investment securities, non taxable  89  124  296  433
Interest from deposits in banks  37  22  68  70
Total interest income  7,088  7,632  21,917  22,799
         
Interest expense        
NOW, money market, savings  421  630  1,490  1,928
Time deposits  620  822  1,993  2,654
Other borrowed funds  199  189  598  564
Total interest expense  1,240  1,641  4,081  5,146
         
Net interest income  5,848  5,991  17,836  17,653
Provision for loan losses  600  1,800  2,060  5,150
Net interest income after provision for loan losses  5,248  4,191  15,776  12,503
Non-interest income        
Service charges  251  300  852  787
Mortgage banking income  5,576  2,964  13,392  6,668
Gain on sale of investment securities available-for-sale  --  28  --  239
Loss on sale of other real estate owned  (312)  (217)  (266)  (164)
Other  145  109  458  384
Total non-interest income  5,660  3,184  14,436  7,914
         
Non-interest expense        
Salaries and benefits  4,628  3,450  13,062  9,607
Occupancy and equipment  670  627  2,029  1,823
Professional fees  299  221  819  703
Outside data processing  220  227  641  627
FDIC insurance  217  98  639  817
Advertising and promotion  166  180  546  410
Stationery, printing and supplies  162  169  464  442
Impairment of other real estate owned  588  576  1,194  1,999
Other real estate owned expense  218  274  643  883
Other  1,009  540  2,324  1,543
Total non-interest expense  8,177  6,362  22,361  18,854
         
Income before income taxes  2,731  1,013  7,851  1,563
Income tax expense  912  201  2,536  197
Net income  1,819  812  5,315  1,366
Dividends and accretion on preferred stock  314  292  923  872
Net income available to common stockholders  $ 1,505  $ 520  $ 4,392  $ 494
         
Net income per common share        
Basic  $ 0.44  $ 0.15  $ 1.30  $ 0.15
Diluted  $ 0.44  $ 0.15  $ 1.30  $ 0.15
     
     
Carolina Bank Holdings, Inc.    
Consolidated Financial Highlights    
Third Quarter 2012    
(unaudited)    
  Quarterly Years Ended
  3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr.    
($ in thousands except for share data) 2012 2012 2012 2011 2011 2011 2010
               
EARNINGS              
Net interest income $ 5,848 5,939 6,049 6,442 5,991  24,095  23,341
Provision for loan loss $ 600 0 1,460 1,700 1,800  6,850  15,133
NonInterest income $ 5,660 4,976 3,800 3,426 3,184  11,340  13,375
NonInterest expense $ 8,177 7,493 6,691 6,777 6,362  25,631  26,061
Net income $ 1,819 2,268 1,228 1,031 812  2,397  (2,394)
Net income available to common stockholders $ 1,505 1,961 926 729 520  1,223  (3,536)
Basic earnings (loss) per share $ 0.44 0.58 0.27 0.22 0.15  0.36  (1.04)
Diluted earnings (loss) per share $ 0.44 0.58 0.27 0.22 0.15  0.36  (1.04)
Average common shares outstanding 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045
Average diluted common shares outstanding 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045
               
PERFORMANCE RATIOS              
Return on average assets * 0.89% 1.18% 0.56% 0.43% 0.31% 0.18% -0.51%
Return on average common equity * 16.75% 23.44% 11.58% 9.31% 6.80% 4.03% -11.08%
Net interest margin (fully-tax equivalent) * 3.71% 3.86% 3.98% 4.14% 3.89% 3.92% 3.63%
Efficiency ratio 70.78% 68.34% 67.57% 68.28% 68.89% 71.79% 70.38%
# full-time equivalent employees - period end 206 200 184 174  167 174  155
               
CAPITAL              
Equity to period-end assets 7.68% 7.40% 7.18% 6.91% 6.90% 6.91% 6.54%
Common tangible equity to assets 5.40% 5.13% 4.89% 4.66% 4.63% 4.66% 4.36%
Tier 1 leverage capital ratio - Bank 9.00% 8.79% 8.35% 8.02% 8.15% 8.02% 7.59%
Tier 1 risk-based capital ratio - Bank 11.14% 11.12% 9.92% 9.60% 9.64% 9.60% 9.00%
Total risk-based capital ratio - Bank 14.09% 14.12% 12.83% 12.50% 12.53% 12.50% 11.82%
Book value per common share  $ 10.75  10.27  9.65  9.26  9.03 9.26 8.70
               
ASSET QUALITY              
Net charge-offs $ 988 1,379 762 1,956  3,190  7,416  12,855
Net charge-offs to average loans * 0.86% 1.18% 0.64% 1.60% 2.58% 1.49% 2.43%
Allowance for loan losses $ 10,725 11,112 12,491 11,793 12,049 11,793 12,359
Allowance for loan losses to loans held invst. 2.33% 2.42% 2.60% 2.42% 2.46% 2.42% 2.40%
Nonperforming loans  $ 21,387  21,771  23,187  22,915 24,429  22,915 27,713
Performing restructured loans $ 11,192 12,207 15,728 18,502 18,167 18,502 4,791
Other real estate owned $ 4,751 6,384 7,708 6,728 8,972 6,728 9,848
Nonperforming loans to loans held for investment 4.66% 4.74% 4.82% 4.71% 4.99% 4.71% 5.39%
Nonperforming assets to total assets 3.87% 4.16% 4.62% 4.40% 5.06% 4.40% 5.55%
               
END OF PERIOD BALANCES              
Total assets $ 675,746 677,476 668,009 673,325 661,784 673,325 676,701
Total loans held for investment $ 459,323 459,144 480,888 487,031 489,782 487,031 514,029
Total deposits $ 588,672 592,103 588,500 596,639 585,184 596,639 604,567
Stockholders' equity $ 51,879 50,143 47,943 46,558 45,696 46,558 44,282
               
AVERAGE BALANCES              
Total assets $ 675,569 670,339 663,932 670,436 664,373 668,753 695,847
Total earning assets $ 631,347 624,183 616,101 623,176 617,852 621,889 650,926
Total loans held for investment $ 459,800 466,412 479,121 489,915 494,669 498,683 529,415
Total interest-bearing deposits $ 527,545 528,463 529,405 537,287 534,140 542,402 578,815
Common stockholders' equity $ 35,750 33,649 32,159 31,052 30,328 30,337 31,924
               
* annualized for all periods presented return on average assets and on average common equity are computed using net income (loss) available to common stockholders
               
CONTACT: Carolina Bank Holdings, Inc. T. Allen Liles, EVP and CFO Telephone: 336-286-8746 Email: a.liles@carolinabank.com
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