Carolina Bank Holdings, Inc. Reports EPS Of $0.98 For The Nine Months Ended September 30, 2013

GREENSBORO, N.C., Oct. 28, 2013 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported third quarter 2013 results with highlights as follows:

Third Quarter 2013 Financial Highlights
  • 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, 2013 for Carolina Bank were 8.81% for Tier 1 leverage, 11.67% for Tier 1 risk-based, and 14.76% for total risk-based.
  • $5 million of the $16 million in outstanding preferred stock was repurchased in August 2013 which should be $0.12 accretive to diluted earnings per common share in 2014 based on current interest rates.
  • Non-interest bearing demand deposits increased 39.5% in the past year to $87.8 million at September 30, 2013.
  • Loans held for investment increased $12.6 million during the third quarter to $430.7 million at September 30, 2013.
  • In response to a decline in mortgage banking income, twelve administrative positions were eliminated late in the third quarter resulting in annual savings of approximately $450,000.
  • Non-performing assets to total assets decreased to 3.54% at September 30, 2013 from 3.87% at September 30, 2012.
  • Diluted net income per common share decreased to $0.98 for the nine months ended September 2013 from $1.30 for the same period in 2012. Diluted net income per common share was $0.23 and $0.44 for the third quarters of 2013 and 2012, respectively.
  • Net income was $4,211,000 for the nine months ended September 30, 2013 compared to $5,315,000 for the nine months ended September 30, 2012. Net income was $1,023,000 and $1,819,000 in the third quarters of 2013 and 2012, respectively.
  • Net income available to common shareholders was $776,000 in the third quarter of 2013 compared to $1,505,000 in the third quarter of 2012.
  • The net interest margin, computed on a fully taxable basis, was 3.46% in the third quarter of 2013 compared to 3.71% in the third quarter of 2012.

"We continued our goal of building shareholder value in the third quarter of 2013 by repurchasing $5 million in preferred stock and by strengthening our relationships with customers as evidenced by an increase in non-interest bearing demand deposits and loans held for investment, primarily commercial loans. We are focusing on continuing our growth in both of these important areas in the coming months to improve our net interest margin," said President and Chief Executive Officer Robert T. Braswell.

"As a result of the increase in mortgage rates and a decline in mortgage banking revenue during 2013, we have made a number of adjustments to continue a profitable mortgage banking operation. We eliminated 12 administrative positions which reduced annual compensation by approximately $450,000. We also opened loan production offices in Chapel Hill and Sanford and employed additional account executives and loan advisors to increase mortgage production. The new loan advisors have been accretive to our results and the new account executives are expected to be accretive to our future results. We continue to monitor the mortgage environment for opportunities to improve our profitability."

"We also continue to concentrate on reduction of non-performing and classified assets in 2013 and are pleased that classified assets have declined for two years in a row," said Braswell. "Our goals include continued reduction of classified assets and improvements in loan quality during the remainder of 2013 and throughout 2014."

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. Residential mortgage loan production offices are located in Burlington, Chapel Hill, Hillsborough, Sanford, and Raleigh in addition to a wholesale residential mortgage operation in Greensboro. 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,
  2013 2012
  (unaudited)  
  (in thousands, except per share data)  
Assets    
Cash and due from banks  $ 7,824  $ 7,913
Interest-bearing deposits with banks  91,062  7,186
Securities available-for-sale, at fair value  61,683 42,036
Securities held-to-maturity  12,010 211
Loans held for sale  28,592 131,762
Loans  430,736 461,728
Less allowance for loan losses  (7,701) (9,944)
Net loans  423,035 451,784
Premises and equipment, net  17,216 17,732
Other real estate owned  3,446 5,940
Bank-owned life insurance  11,039 10,765
Other assets  11,926 16,539
Total assets  $ 667,833  $ 691,868
     
Liabilities and Stockholders' Equity    
Deposits    
Non-interest bearing demand  $ 87,761  $ 73,032
NOW, money market and savings  339,534 343,740
Time  157,199 174,153
Total deposits  584,494 590,925
     
Advances from the Federal Home Loan Bank  2,910 15,982
Securities sold under agreements to repurchase  2,950 1,950
Subordinated debentures  19,610 19,563
Other liabilities and accrued expenses  7,486 9,586
Total liabilities  617,450 638,006
     
Stockholders' equity    
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding 10,994 shares in 2013 and 16,000 in 2012  10,908 15,573
Common stock, $1 par value; authorized 20,000,000 shares; issued and outstanding 3,428,776 in 2013 and 3,387,045 in 2012  3,429 3,387
Common stock warrants  -- 1,841
Additional paid-in capital  16,226 15,906
Retained earnings  18,761 15,408
Stock in directors' rabbi trust  (1,257) (1,050)
Directors' deferred fees obligation  1,257 1,050
Accumulated other comprehensive income  1,059 1,747
Total stockholders' equity  50,383 53,862
Total liabilities and stockholders' equity  $ 667,833  $ 691,868
         
         
         
Carolina Bank Holdings, Inc. and Subsidiary        
Consolidated Statements of Income (unaudited)        
         
  Three Months Nine Months
  Ended September 30,  Ended September 30, 
  2013 2012 2013 2012
  (in thousands, except per share data)
Interest income        
Loans  $ 5,659  $ 6,659  $ 18,500  $ 20,631
Investment securities, taxable  323  303  831  922
Investment securities, non taxable  137  89  350  296
Interest from deposits in banks  91  37  176  68
Total interest income  6,210  7,088  19,857  21,917
         
Interest expense        
NOW, money market and savings  260  421  856  1,490
Time deposits  469  620  1,492  1,993
Other borrowed funds  179  199  554  598
Total interest expense  908  1,240  2,902  4,081
         
Net interest income  5,302  5,848  16,955  17,836
Provision for loan losses  600  600  1,100  2,060
Net interest income after provision for loan losses  4,702  5,248  15,855  15,776
Non-interest income        
Service charges  301  251  848  852
Mortgage banking income  2,413  5,178  9,894  12,703
Gain on sale of investment securities  80  --  272  --
Other  111  139  411  440
Total non-interest income  2,905  5,568  11,425  13,995
         
Non-interest expense        
Salaries and benefits  4,003  4,628  13,361  13,062
Occupancy and equipment  742  670  2,236  2,029
Foreclosed property expense  84  1,112  962  2,085
Professional fees  385  299  926  819
Outside data processing  189  220  643  641
FDIC insurance  135  217  383  639
Advertising and promotion  162  166  653  546
Stationery, printing and supplies  144  162  478  464
Other  385  611  1,503  1,635
Total non-interest expense  6,229  8,085  21,145  21,920
         
Income before income taxes  1,378  2,731  6,135  7,851
Income tax expense  355  912  1,924  2,536
Net income  1,023  1,819  4,211  5,315
Dividends and accretion on preferred stock  247  314  858  923
Net income available to common stockholders  $ 776  $ 1,505  $ 3,353  $ 4,392
Net income per common share        
Basic  $ 0.23  $ 0.44  $ 0.98  $ 1.30
Diluted  $ 0.23  $ 0.44  $ 0.98  $ 1.30
               
               
               
Carolina Bank Holdings, Inc.              
Consolidated Financial Highlights              
Third Quarter 2013              
(unaudited)              
  Quarterly  Years Ended
  3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr    
($ in thousands except for share data) 2013 2013 2013 2012 2012 2012 2011
               
EARNINGS              
Net interest income $ 5,302 5,590 6,063 6,351 5,848  24,187  24,095
Provision for loan loss $ 600 100 400 300 600  2,360  6,850
NonInterest income $ 2,905 4,206 4,314 5,655 5,568  19,650  11,182
NonInterest expense $ 6,229 7,534 7,382 8,323 8,085  30,243  25,473
Net income $ 1,023 1,470 1,718 2,187 1,819  7,502  2,397
Net income available to common stockholders $ 776 1,164 1,413 1,884 1,505  6,276  1,223
Basic earnings per share $ 0.23 0.34 0.42 0.56 0.44  1.85  0.36
Diluted earnings per share $ 0.23 0.34 0.42 0.55 0.44  1.85  0.36
Average common shares outstanding 3,423,961 3,403,347 3,387,813 3,387,045 3,387,045 3,387,045 3,387,045
Average diluted common shares outstanding 3,435,335 3,423,373 3,411,335 3,420,396 3,387,045 3,395,383 3,387,045
               
PERFORMANCE RATIOS              
Return on average assets * 0.46% 0.70% 0.84% 1.11% 0.89% 0.93% 0.18%
Return on average common equity * 7.93% 12.04% 14.68% 19.99% 16.75% 18.05% 4.03%
Net interest margin (fully-tax equivalent) * 3.46% 3.65% 3.94% 4.01% 3.71% 3.89% 3.92%
Efficiency ratio 75.27% 76.50% 70.78% 69.02% 70.55% 68.68% 71.66%
# full-time equivalent employees - period end 203 215 215 208 206 208 174
               
CAPITAL              
Equity to period-end assets 7.54% 8.09% 8.21% 7.79% 7.68% 7.79% 6.91%
Common tangible equity to assets 5.91% 5.74% 5.89% 5.53% 5.39% 5.53% 4.66%
Tier 1 leverage capital ratio - Bank 8.81% 9.39% 9.34% 9.23% 9.00% 9.23% 8.02%
Tier 1 risk-based capital ratio - Bank 11.67% 12.68% 12.23% 11.27% 11.14% 11.27% 9.60%
Total risk-based capital ratio - Bank 14.76% 15.81% 15.28% 14.18% 14.09% 14.18% 12.50%
Book value per common share  $ 11.51  11.23  11.72  11.30  10.75  11.30 9.26
               
ASSET QUALITY              
Net charge-offs $ 3,030 208 105 1,080 988  4,209  7,416
Net charge-offs to average loans * 2.85% 0.20% 0.09% 0.95% 0.86% 0.90% 1.49%
Allowance for loan losses $ 7,701 10,131 10,239 9,944 10,725 9,944 11,793
Allowance for loan losses to loans held invst. 1.79% 2.42% 2.37% 2.15% 2.33% 2.15% 2.42%
Nonperforming loans  $ 19,606  16,501  10,806  13,067  21,387  13,067  22,915
Performing restructured loans $ 10,933 14,151 14,391 13,822 11,192 13,822 18,502
Other real estate owned $ 3,446 4,031 7,555 5,940 4,751 5,940 6,728
Nonperforming loans to loans held for investment 4.55% 3.95% 2.50% 2.83% 4.66% 2.83% 4.71%
Nonperforming assets to total assets 3.54% 3.07% 2.72% 2.75% 3.87% 2.75% 4.40%
               
END OF PERIOD BALANCES              
Total assets $ 667,833 669,489 674,764 691,868 675,746 691,868 673,325
Total loans held for investment $ 430,736 418,158 431,754 461,728 459,323 461,728 487,031
Total deposits $ 584,494 581,404 585,954 590,925 588,672 590,925 596,639
Stockholders' equity $ 50,383 54,192 55,389 53,862 51,879 53,862 46,558
               
AVERAGE BALANCES              
Total assets $ 671,632 671,745 678,373 675,573 675,569 671,376 668,753
Total earning assets $ 629,994 627,855 629,687 635,170 631,347 626,736 621,889
Total loans held for investment $ 425,271 423,587 449,704 456,738 459,800 465,478 498,683
Total interest-bearing deposits $ 499,026 506,978 512,562 519,595 527,545 526,237 542,402
Common stockholders' equity $ 38,803 38,764 39,044 37,487 35,750 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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