GREENSBORO, N.C., Aug. 2, 2010 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported second quarter 2010 results with highlights as follows:

Second Quarter 2010 Financial Highlights
  • Assets increased 4.3% to $704.3 million at June 30, 2010 from $675.2 million at June 30, 2009. Assets increased 1.0% during the first six months of 2010.
  • Carolina Bank, the only subsidiary of Carolina Bank Holdings, Inc., continued to maintain "Well Capitalized" status, the highest regulatory capital measure.
  • Net interest income, computed on a fully taxable basis, reached an all time quarterly high of $5.75 million in the second quarter of 2010, up 19.7% from the second quarter of 2009.
  • The net interest margin, computed on a fully taxable basis, increased to 3.50% in the second quarter of 2010 compared to 3.15% in the second quarter of 2009.
  • The mortgage division earned $0.52 million in the second quarter and $0.93 million in the first six months of 2010 due to lower interest rates and an expanding market.
  • Net loss was $1.57 million in the second quarter of 2010 compared to net income of $0.34 million in the second quarter of 2009.
  • Net loss allocable to common stockholders was $1.86 million, or ($0.55) per diluted share, in the second quarter of 2010 compared net income available to shareholders of $0.05 million, or $0.02 per diluted share, in the second quarter of 2009.
  • Provision for loan losses increased to $4.7 million in the second quarter of 2010 from $2.0 million in the same quarter of 2009. Asset impairments were $0.96 million and $0.51 million in the second quarters of 2010 and 2009, respectively. 

Net loss allocable to common stockholders was $1.84 million, or ($0.54) per diluted common share, in the first six months of 2010 compared to net income available to common shareholders of $0.46 million, or $0.14 per diluted common share, in first half of 2009. Robert T. Braswell, President and CEO of Carolina Bank Holdings, commented, "We continued to increase our net interest income, which reached an all-time high in the second quarter, through our emphasis on building profitable relationships with our customers. Our mortgage division is performing at a very high level and earned $0.52 million in the second quarter and $0.93 million in the first six months of 2010. With the softness in interest rates, a recent major increase in applications signals a strong third quarter for the mortgage division. It is also a pleasure to welcome Michelle Roten, former CEO and owner of Hallmark Residential Mortgage, and her team who joined the bank on July 1, 2010. Michelle and her team will help facilitate the growth of our retail market share in the Triad through an expanded retail mortgage presence."

Non-performing loans to total loans held for investment increased to 4.63% at June 30, 2010 from 3.68% at March 31, 2010.  Non-performing assets to total assets increased to 4.62% at June 30, 2010 from 4.42% at March 31, 2010. Braswell commented, "The current economic times have challenged some of our customers and we are disappointed in our level of non-performing loans. We have adopted a more conservative loan loss methodology suggested by the FDIC in the second quarter which resulted in acceleration of loan charge-offs and in a higher provision for loan losses than would have been experienced under our former loan loss model. We have dedicated more resources to problem loan resolution and have strengthened our commercial underwriting to improve our loan quality in the future." The bank had net loan charge-offs of $5.13 million and $1.23 million in the second quarter of 2010 and 2009, respectively. The allowance for loan losses was 1.93% and 1.42% of loans held for investment at June 30, 2010 and 2009, respectively.

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, North Carolina. A mortgage loan production office was opened in Burlington in July 2010. 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      
At June 30, 2010 and 2009 and December 31, 2009      
  (unaudited)  
  June 30, December 31, 
  2010 2009 2009
       
ASSETS      
Cash and due from banks  $ 6,038  $ 17,256  $ 6,416
Short-term investments and interest-earning deposits  30,942  21  34,039
Total cash and cash equivalents  36,980  17,277  40,455
       
Securities available for sale, at fair value  48,572  55,149  52,924
Securities held-to-maturity, at amortized cost  681  933  770
       
Loans held for sale  46,207  36,606  29,388
Loans  533,486  532,954  530,606
Allowance for loan losses  (10,270)  (7,560)  (10,081)
Net loans  523,216  525,394  520,525
       
Premises and equipment, net  18,965  19,415  19,351
Other assets  29,719  20,418  33,639
       
Total assets  $ 704,340  $ 675,192  $ 697,052
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
LIABILITIES      
Deposits:      
Noninterest-bearing  $ 42,132  $ 31,754  $ 39,261
Interest-bearing  584,395  527,036  578,210
Total deposits  626,527  558,790  617,471
       
Short-term borrowings  5,240  2,138  683
Federal Home Loan Bank advances  2,744  41,821  7,783
Subordinated debentures  19,377  19,302  19,360
Other liabilities  4,093  4,199  3,807
Total liabilities  657,981  626,250  649,104
       
STOCKHOLDERS' EQUITY      
Preferred stock, no par, authorized 1,000,000 shares; issued and outstanding 16,000 shares in 2010 and 2009  14,639  14,313  14,473
Common stock, $1 par value, 20,000,000 shares authorized; issued  and outstanding -- 3,387,045 shares in 2010 and 2009  3,387  3,387  3,387
Common stock warrants  1,841  1,841  1,841
Additional paid-in capital  15,817  15,780  15,799
Retained earnings  9,603  13,355  11,445
Stock in director rabbi trust  (608)  (758)  (874)
Directors deferred fees obligation  608  758  874
Accumulated other comprehensive income   1,072  266  1,003
Total stockholders' equity  31,720  34,629  33,475
       
Total liabilities and stockholders' equity  $ 689,701  $ 660,879  $ 682,579
         
         
Carolina Bank Holdings, Inc. and Subsidiary        
Consolidated Statements of Operations        
For the three and six months ended June 30, 2010 and 2009        
(unaudited)        
  Three Months Six Months
  Ended June 30,  Ended June 30, 
  2010 2009 2010 2009
  (in thousands, except per share data)
Interest income        
Loans  $ 7,543  $ 7,414  $ 15,019  $ 14,627
Investment securities, taxable  420  533  882  1,126
Investment securities, non taxable  164  135  326  258
Interest from federal funds sold and other  22  1  44  1
Total interest income  8,149  8,083  16,271  16,012
         
Interest expense        
NOW, money market, savings  926  1,134  1,916  2,114
Time deposits  1,328  1,898  2,711  4,170
Other borrowed funds  225  311  454  676
Total interest expense  2,479  3,343  5,081  6,960
         
Net interest income  5,670  4,740  11,190  9,052
Provision for loan losses  4,700  2,036  6,688  3,231
Net interest income after provision for loan losses  970  2,704  4,502  5,821
Non-interest income        
Service charges  235  248  451  498
Mortgage banking income  2,187  2,798  3,936  4,608
Gains on sale of investment securities  55  --  185  235
Repossessed asset gains (losses)  (140)  51  (267)  51
Other  165  139  330  246
Total non-interest income  2,502  3,236  4,635  5,638
         
Non-interest expense        
Salaries and benefits  2,810  2,520  5,384  4,963
Occupancy and equipment  598  576  1,206  1,169
Professional fees  342  252  602  600
Outside data processing  216  201  457  406
FDIC insurance  262  623  519  720
Advertising and promotion  91  132  250  290
Stationery, printing and supplies  132  173  246  285
Impairment of investment security  --  514  --  765
Impairment of repossessed assets  962  --  1,469  --
Other  759  517  1,317  787
Total non-interest expense  6,172  5,508  11,450  9,985
         
Income (loss) before income taxes  (2,700)  432  (2,313)  1,474
Income tax expense (benefit)  (1,132)  97  (1,044)  474
Net income (loss)  (1,568)  335  (1,269)  1,000
Dividends and accretion on preferred stock  288  284  573  538
Net income (loss) available (allocable) to common stockholders  $ (1,856)  $ 51  $ (1,842)  $ 462
         
Net income (loss) per common share        
Basic  $ (0.55)  $ 0.02  $ (0.54)  $ 0.14
Diluted  $ (0.55)  $ 0.02  $ (0.54)  $ 0.14
     
     
Carolina Bank Holdings, Inc.    
Consolidated Financial Highlights     
Second Quarter 2010    
(unaudited)    
  Quarterly Year Ended
  2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr.    
($ in thousands except for share data) 2010 2010 2009 2009 2009 2009 2008
               
EARNINGS              
Net interest income $ 5,670 5,520 5,538 5,115 4,740  19,705  14,727
Provision for loan loss $ 4,700 1,988 5,552 1,737 2,036  10,520  1,910
NonInterest income $ 2,502 2,133 2,635 1,579 3,242  10,550  4,609
NonInterest expense $ 6,172 5,278 5,053 4,841 5,514  20,577  14,058
Net income (loss)  $ (1,568) 299 (1,527) 169 335  (358)  2,194
Net income (loss) available to common stockholders $ (1,856) 14 (1,802) (108) 51  (1,448)  2,194
Basic earnings (loss) per share $ (0.55) 0.01 (0.53) (0.03) 0.02  (0.43)  0.66
Diluted earnings (loss) per share $ (0.55) 0.01 (0.53) (0.03) 0.02  (0.43)  0.65
Average shares outstanding 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045  3,383,748  3,344,010
Average diluted shares outstanding 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045  3,385,102  3,386,631
               
PERFORMANCE RATIOS              
Return on average assets * -1.06% 0.01% -1.03% -0.06% 0.03% -0.22% 0.39%
Return on average common equity * -22.46% 0.17% -20.42% -1.22% 0.60% -4.21% 7.13%
Net interest margin ( fully-tax equivalent) * 3.50% 3.54% 3.41% 3.25% 3.15% 3.20% 2.82%
Efficiency ratio 74.80% 68.24% 61.30% 71.55% 68.55% 67.42% 72.09%
# full-time equivalent employees - period end  147  143  140  136  136  140  119
               
CAPITAL              
Equity to ending assets 6.58% 6.83% 6.88% 7.39% 7.25% 6.88% 5.12%
Common tangible equity to assets 4.50% 4.77% 4.80% 5.26% 5.13% 4.80% 5.12%
Tier 1 leverage capital ratio - Bank 7.23% 7.54% 7.45% 7.84% 8.10% 7.45% 7.00%
Tier 1 risk-based capital ratio - Bank 8.55% 8.59% 8.50% 8.82% 8.86% 8.50% 7.62%
Total risk-based capital ratio - Bank 11.34% 11.34% 11.24% 11.48% 11.61% 11.24% 10.29%
Book value per common share $ 9.37 9.91 9.88 10.52 10.22 9.88 9.43
               
ASSET QUALITY              
Net charge-offs (recoveries) $ 5,126  1,372  2,509 2,259 1,225  6,199  682
Net charge-offs to average loans * 3.80% 1.03% 1.88% 1.73% 0.94% 1.19% 0.15%
Allowance for loan losses $ 10,270 10,697 10,081 7,038 7,560 10,081 5,760
Allowance for loan losses to loans held invst. 1.93% 2.00% 1.90% 1.33% 1.42% 1.90% 1.15%
Nonperforming loans  $ 24,721 19,636 14,163 14,407 16,829 14,163 5,656
Restructured loans $ 0 0 0 0 0 0 0
Repossessed assets $ 7,792 11,507 13,964 7,676 5,329 13,964 728
Nonperforming loans to loans held for investment 4.63% 3.68% 2.67% 2.71% 3.16% 2.67% 1.13%
Nonperforming assets to total assets 4.62% 4.42% 4.04% 3.26% 3.28% 4.04% 1.04%
               
END OF PERIOD BALANCES              
Total assets $ 704,340 704,085 697,052 676,826 675,192 697,052 616,611
Total loans held for investment $ 533,486 534,045 530,606 530,791 532,954 530,606 501,424
Total deposits $ 626,527 625,730 617,471 594,863 558,790 617,471 498,064
Stockholders' equity $ 46,359 48,112 47,948 50,017 48,942 47,948 31,576
               
AVERAGE BALANCES              
Total assets $ 700,598 691,406 694,529 679,780 654,900 665,555 557,283
Total earning assets $ 658,491 641,861 651,733 633,107 612,353 624,031 527,958
Total loans held for investment  $ 539,554 532,928 533,143 523,019 521,406 522,965 451,583
Total interest-bearing deposits  $ 584,031 576,968 573,595 545,912 514,875 528,158 423,680
Common stockholders' equity  $ 33,152 33,702 35,008 35,097 34,288 34,385 30,771
               
* 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.           Robert T. Braswell, President and CEO           336-286-8740          b.braswell@carolinabank.com