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Carolina Bank Holdings, Inc. Reports Record Net Income Of $7.5 Million In 2012; EPS Of $1.85 In 2012 Increases 413% From 2011

Stocks in this article: CLBH

Non-performing assets to total assets decreased to 2.75% at December 31, 2012 from 4.40% at December 31, 2011. Braswell commented, "We continue to maintain a steady focus on improving asset quality and have seen a substantial improvement in credit quality over the past two years. Unlike some of our peers, who have taken massive losses on large problem asset sales with accompanying capital raises, we have maximized shareholder value and avoided shareholder dilution by our steady focus and hard work approach to an industry wide problem."

Braswell further commented, "Our mortgage division originated a record $1.2 billion in residential mortgage loans in 2012 and has been a major contributor to our financial results. Our decision to start a residential mortgage operation in 2007, which was a contrarian strategy at the time, has proven to be a wise move. The mortgage division has expanded over the past few years as origination activity increased during this period of super low interest rates."

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 
  December 31, 
  2012 2011*
  (unaudited)  
  (in thousands except share and per share data)
Assets    
Cash and due from banks  $ 7,913  $ 5,664
Interest-bearing deposits with banks  7,186  7,647
Securities available-for-sale, at fair value 42,036 42,208
Securities held-to-maturity 211 392
Loans held for sale 131,762 91,955
Loans  461,728 487,031
Less allowance for loan losses (9,944) (11,793)
Net loans  451,784 475,238
Premises and equipment, net 17,732 17,442
Other real estate owned 5,940 6,728
Bank-owned life insurance 10,765 10,385
Other assets 16,539 15,666
Total assets  $ 691,868  $ 673,325
     
Liabilities and Stockholders' Equity    
Deposits    
Non-interest bearing demand  $ 73,032  $ 57,475
NOW, money market and savings 343,740 324,449
Time 174,153 214,715
Total deposits 590,925 596,639
     
Advances from the Federal Home Loan Bank 15,982 3,075
Securities sold under agreements to repurchase 1,950 1,536
Subordinated debentures 19,563 19,489
Other liabilities and accrued expenses 9,586 6,028
Total liabilities 638,006 626,767
     
Stockholders' equity    
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding 16,000 shares in 2012 and 2011 15,573 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 15,906 15,870
Retained earnings  15,408 9,132
Stock in directors' rabbi trust (1,050) (875)
Directors' deferred fees obligation 1,050 875
Accumulated other comprehensive income  1,747 1,151
Total stockholders' equity 53,862 46,558
Total liabilities and stockholders' equity  $ 691,868  $ 673,325
     
* Derived from audited consolidated financial statements. 
 
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
  Three Months Years Ended
  Ended December 31,  December 31, 
  2012 2011 2012 2011
  (in thousands, except per share data)
Interest income        
Loans  $ 7,072  $ 7,541  $ 27,703  $ 28,743
Investment securities, taxable  273  325  1,195  1,419
Investment securities, non taxable  106  118  402  551
Interest from deposits in banks  25  7  93  77
Total interest income  7,476  7,991  29,393  30,790
         
Interest expense        
NOW, money market, savings  345  598  1,835  2,526
Time deposits  576  757  2,569  3,411
Other borrowed funds  204  194  802  758
Total interest expense  1,125  1,549  5,206  6,695
         
Net interest income  6,351  6,442  24,187  24,095
Provision for loan losses  300  1,700  2,360  6,850
Net interest income after provision for loan losses  6,051  4,742  21,827  17,245
Non-interest income        
Service charges  274  199  1,126  986
Mortgage banking income  5,546  3,260  18,938  9,928
Gain on sale of investment securities available-for-sale  37  --  37  239
Gain (loss) on sale of other real estate owned  64  (152)  (202)  (316)
Other  149  119  607  503
Total non-interest income  6,070  3,426  20,506  11,340
         
Non-interest expense        
Salaries and benefits  5,023  3,522  18,085  13,129
Occupancy and equipment  664  696  2,693  2,519
Professional fees  461  226  1,280  929
Outside data processing  246  166  887  793
FDIC insurance  211  209  850  1,026
Advertising and promotion  251  321  797  731
Stationery, printing and supplies  176  172  640  614
Impairment of other real estate owned  272  443  1,466  2,442
Other real estate owned expense  382  223  1,025  1,106
Other  1,052  799  3,376  2,342
Total non-interest expense  8,738  6,777  31,099  25,631
         
Income before income taxes  3,383  1,391  11,234  2,954
Income tax expense   1,196  360  3,732  557
Net income   2,187  1,031  7,502  2,397
Dividends and accretion on preferred stock  303  302  1,226  1,174
Net income available to common stockholders  $ 1,884  $ 729  $ 6,276  $ 1,223
         
Net income per common share        
Basic  $ 0.56  $ 0.22  $ 1.85  $ 0.36
Diluted  $ 0.55  $ 0.22  $ 1.85  $ 0.36
 
Carolina Bank Holdings, Inc.
Consolidated Financial Highlights 
Fourth Quarter 2012
(unaudited)
  Quarterly  Years Ended
  4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr    
($ in thousands except for share data) 2012 2012 2012 2012 2011 2012 2011
               
EARNINGS              
Net interest income  $ 6,351 5,848 5,939 6,049 6,442  24,187  24,095
Provision for loan loss  $ 300 600 0 1,460 1,700  2,360  6,850
NonInterest income  $ 6,070 5,660 4,976 3,800 3,426  20,506  11,340
NonInterest expense  $ 8,738 8,177 7,493 6,691 6,777  31,099  25,631
Net income   $ 2,187 1,819 2,268 1,228 1,031  7,502  2,397
Net income available to common stockholders  $ 1,884 1,505 1,961 926 729  6,276  1,223
Basic earnings per share  $ 0.56 0.44 0.58 0.27 0.22  1.85  0.36
Diluted earnings per share  $ 0.55 0.44 0.58 0.27 0.22  1.85  0.36
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 3,420,396 3,387,045 3,387,045 3,387,045 3,387,045 3,395,383 3,387,045
               
PERFORMANCE RATIOS              
Return on average assets * 1.11% 0.89% 1.18% 0.56% 0.43% 0.93% 0.18%
Return on average common equity * 19.99% 16.75% 23.44% 11.58% 9.31% 18.05% 4.03%
Net interest margin ( fully-tax equivalent) * 4.01% 3.71% 3.86% 3.98% 4.14% 3.89% 3.92%
Efficiency ratio 70.06% 70.78% 68.34% 67.57% 68.28% 69.28% 71.79%
# full-time equivalent employees - period end 208 206 200 184 174 208 174
               
CAPITAL              
Equity to period-end assets 7.79% 7.68% 7.40% 7.18% 6.91% 7.79% 6.91%
Common tangible equity to assets 5.53% 5.40% 5.13% 4.89% 4.66% 5.53% 4.66%
Tier 1 leverage capital ratio - Bank 9.23% 9.00% 8.79% 8.35% 8.02% 9.23% 8.02%
Tier 1 risk-based capital ratio - Bank 11.27% 11.14% 11.12% 9.92% 9.60% 11.27% 9.60%
Total risk-based capital ratio - Bank 14.18% 14.09% 14.12% 12.83% 12.50% 14.18% 12.50%
Book value per common share  $ 11.30  10.75  10.27  9.65  9.26  11.30 9.26
               
ASSET QUALITY              
Net charge-offs   $ 1,080 988 1,379 762 1,956  4,209  7,416
Net charge-offs to average loans * 0.95% 0.86% 1.18% 0.64% 1.60% 0.90% 1.49%
Allowance for loan losses  $ 9,944 10,725 11,112 12,491 11,793 9,944 11,793
Allowance for loan losses to loans held invst. 2.15% 2.33% 2.42% 2.60% 2.42% 2.15% 2.42%
Nonperforming loans  $ 13,068  21,387  21,771  23,187  22,915  13,068  22,915
Performing restructured loans  $ 13,822 11,192 12,207 15,728 18,502 13,822 18,502
Other real estate owned  $ 5,940 4,751 6,384 7,708 6,728 5,940 6,728
Nonperforming loans to loans held for investment 2.83% 4.66% 4.74% 4.82% 4.71% 2.83% 4.71%
Nonperforming assets to total assets 2.75% 3.87% 4.16% 4.62% 4.40% 2.75% 4.40%
               
END OF PERIOD BALANCES              
Total assets  $ 691,868 675,746 677,476 668,009 673,325 691,868 673,325
Total loans held for investment  $ 461,728 459,323 459,144 480,888 487,031 461,728 487,031
Total deposits  $ 590,925 588,672 592,103 588,500 596,639 590,925 596,639
Stockholders' equity  $ 53,862 51,879 50,143 47,943 46,558 53,862 46,558
               
AVERAGE BALANCES              
Total assets  $ 675,573 675,569 670,339 663,932 670,436 671,376 668,753
Total earning assets  $ 635,170 631,347 624,183 616,101 623,176 626,736 621,889
Total loans held for investment   $ 456,738 459,800 466,412 479,121 489,915 465,478 498,683
Total interest-bearing deposits   $ 519,595 527,545 528,463 529,405 537,287 526,237 542,402
Common stockholders' equity  $ 37,487 35,750 33,649 32,159 31,052 34,778 30,337
               
* annualized for all periods presented return on average assets and on average common equity are computed using net income 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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