Carolina Bank Holdings Inc.

$CLBH - Nasdaq - Banks and Thrifts
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Carolina Bank Holdings, Inc. Reports EPS of $0.75 for the Six Months Ended June 30, 2013

GREENSBORO, N.C., July 29, 2013 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported second quarter 2013 results with highlights as follows:

Second 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 June 30, 2013 for Carolina Bank improved to 9.39% for Tier 1 leverage, 12.67% for Tier 1 risk-based, and 15.79% for total risk-based.
  • The warrant to purchase 357,675 shares of common shares was repurchased from the U. S. Treasury in April 2013.
  • $5 million of the $16 million in outstanding preferred stock is scheduled to be retired in August 2013.
  • Average non-interest-bearing demand deposits increased 31.3% in the first six months of 2013 from the first six months of 2012.
  • Net loan charge-offs declined to $208,000, or 0.20% of average loans (annualized), in the second quarter of 2013 from $1,379,000, or 1.18% of average loans (annualized), in the second quarter of 2012.
  • Non-performing assets to total assets decreased to 3.07% at June 30, 2013 from 4.16% at June 30, 2012
  • Diluted net income per common share decreased to $0.75 for the six months ended June 2013 from $0.85 for the same period in 2012. Diluted net income per common share was $0.34 and $0.58 for the second quarters of 2013 and 2012, respectively.
  • Net income was $3,188,000 for the six months ended June 30, 2013 compared to $3,496,000 for the six months ended June 30, 2012. Net income was $1,470,000 and $2,268,000 in the second quarters of 2013 and 2012, respectively.
  • Net income available to common shareholders was $1,164,000 in the second quarter of 2013 compared to $1,961,000 in the second quarter of 2012.
  • The net interest margin, computed on a fully taxable basis, was 3.65% in the second quarter of 2013 compared to 3.86% in the second quarter of 2012.

"We continued our goal of building shareholder value in 2013 by increasing our capital and by strengthening our relationships with customers. We plan to retire $5 million of our $16 million in preferred stock in August 2013 which should be accretive to earnings per share," said President and Chief Executive Officer Robert T. Braswell. "Average loans declined during the first six months of 2013 due to a challenging commercial lending environment, but we continued our focus on increasing our commercial relationships as evidenced by a 31.3% increase in average non-interest-bearing demand deposits in the first six months of 2013 from the same period in 2012. Our commercial loan pipeline appears to be strengthening."

"Our mortgage banking revenue for the first six months of 2013 was basically flat with the first six months of 2012; however, we have seen a shift in the loan purpose to a higher percentage of originations used for purchasing homes in 2013 than in 2012. We believe that the ability to maintain our mortgage banking revenues in the face of the changing mortgage environment speaks well for our service quality."

"We are continuing our focus in reducing non-performing and classified assets in 2013 and are pleased that loan charge-offs and classified assets declined during 2013," said Braswell. "Our net loan charge-offs declined to $208,000 in the second quarter of 2013 from $1,379,000 in the second quarter of 2012 and we are striving for additional improvements in our loan quality during the remainder of 2013."

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, 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 
   
  June 30, December 31,
  2013 2012
  (unaudited)  
  (in thousands, except share data)
Assets    
Cash and due from banks  $ 6,904  $ 7,913
Interest-bearing deposits with banks  93,245  7,186
Securities available-for-sale, at fair value  49,445 42,036
Securities held-to-maturity  9,294 211
Loans held for sale  56,403 131,762
Loans   418,158 461,728
Less allowance for loan losses  (10,131) (9,944)
Net loans   408,027 451,784
Premises and equipment, net  17,362 17,732
Other real estate owned  4,031 5,940
Bank-owned life insurance  10,948 10,765
Other assets  13,830 16,539
Total assets  $ 669,489  $ 691,868
     
Liabilities and Stockholders' Equity    
Deposits    
Non-interest bearing demand  $ 76,754  $ 73,032
NOW, money market and savings  337,446 343,740
Time  167,204 174,153
Total deposits  581,404 590,925
     
Advances from the Federal Home Loan Bank  2,934 15,982
Securities sold under agreements to repurchase  3,237 1,950
Subordinated debentures  19,601 19,563
Other liabilities and accrued expenses  8,121 9,586
Total liabilities  615,297 638,006
     
Stockholders' equity    
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding 16,000 shares   15,783 15,573
Common stock, $1 par value; authorized 20,000,000 shares; issued and outstanding 3,419,013 in 2013 and 3,387,045 in 2012  3,419 3,387
Common stock warrants  -- 1,841
Additional paid-in capital  16,168 15,906
Retained earnings   17,985 15,408
Stock in directors' rabbi trust  (1,186) (1,050)
Directors' deferred fees obligation  1,186 1,050
Accumulated other comprehensive income   837 1,747
Total stockholders' equity  54,192 53,862
Total liabilities and stockholders' equity  $ 669,489  $ 691,868
 
 
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
         
  Three Months Six Months
  Ended June 30,  Ended June 30, 
  2013 2012 2013 2012
  (in thousands, except per share data)
Interest income        
Loans  $ 6,122  $ 6,887  $ 12,841  $ 13,972
Investment securities, taxable  260  313  508  619
Investment securities, non taxable  107  100  213  207
Interest from deposits in banks  67  21  85  31
Total interest income  6,556  7,321  13,647  14,829
         
Interest expense        
NOW, money market and savings  276  521  596  1,069
Time deposits  503  664  1,023  1,373
Other borrowed funds  187  197  375  399
Total interest expense  966  1,382  1,994  2,841
         
Net interest income  5,590  5,939  11,653  11,988
Provision for loan losses  100  --  500  1,460
Net interest income after provision for loan losses  5,490  5,939  11,153  10,528
Non-interest income        
Service charges  295  318  547  601
Mortgage banking income  3,586  4,356  7,481  7,525
Gain on sale of investment securities available-for-sale  170  --  192  --
Other  155  134  300  301
Total non-interest income  4,206  4,808  8,520  8,427
         
Non-interest expense        
Salaries and benefits  4,610  4,404  9,358  8,434
Occupancy and equipment  747  677  1,494  1,359
Foreclosed property expense  547  574  878  973
Professional fees  355  263  541  520
Outside data processing  195  215  454  421
FDIC insurance  79  207  248  422
Advertising and promotion  285  205  491  380
Stationery, printing and supplies  181  167  334  302
Other  535  613  1,118  1,024
Total non-interest expense  7,534  7,325  14,916  13,835
         
Income before income taxes  2,162  3,422  4,757  5,120
Income tax expense   692  1,154  1,569  1,624
Net income   1,470  2,268  3,188  3,496
Dividends and accretion on preferred stock  306  307  611  609
Net income available to common stockholders  $ 1,164  $ 1,961  $ 2,577  $ 2,887
Net income per common share        
Basic  $ 0.34  $ 0.58  $ 0.76  $ 0.85
Diluted  $ 0.34  $ 0.58  $ 0.75  $ 0.85
     
     
Carolina Bank Holdings, Inc.    
Consolidated Financial Highlights     
Second Quarter 2013    
(unaudited)    
  Quarterly  Years Ended
  2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr    
($ in thousands except for share data) 2013 2013 2012 2012 2012 2012 2011
               
EARNINGS              
Net interest income $ 5,590 6,063 6,351 5,848 5,939  24,187  24,095
Provision for loan loss $ 100 400 300 600  --  2,360  6,850
NonInterest income $ 4,206 4,314 5,655 5,568 4,808  19,650  11,182
NonInterest expense $ 7,534 7,382 8,323 8,085 7,325  30,243  25,473
Net income  $ 1,470 1,718 2,187 1,819 2,268  7,502  2,397
Net income available to common stockholders $ 1,164 1,413 1,884 1,505 1,961  6,276  1,223
Basic earnings per share $ 0.34 0.42 0.56 0.44 0.58  1.85  0.36
Diluted earnings per share $ 0.34 0.42 0.55 0.44 0.58  1.85  0.36
Average common shares outstanding 3,403,347 3,387,813 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045
Average diluted common shares outstanding 3,423,373 3,398,070 3,420,396 3,387,045 3,387,045 3,395,383 3,387,045
               
PERFORMANCE RATIOS              
Return on average assets * 0.70% 0.84% 1.11% 0.89% 1.18% 0.93% 0.18%
Return on average common equity * 12.04% 14.68% 19.99% 16.75% 23.44% 18.05% 4.03%
Net interest margin (fully-tax equivalent) * 3.65% 3.94% 4.01% 3.71% 3.86% 3.89% 3.92%
Efficiency ratio 76.50% 70.78% 69.02% 70.55% 67.85% 68.68% 71.66%
# full-time equivalent employees - period end 215 215 208 206 200 208 174
               
CAPITAL              
Equity to period-end assets 8.09% 8.21% 7.79% 7.68% 7.40% 7.79% 6.91%
Common tangible equity to assets 5.74% 5.89% 5.53% 5.39% 5.13% 5.53% 4.66%
Tier 1 leverage capital ratio - Bank 9.39% 9.34% 9.23% 9.00% 8.79% 9.23% 8.02%
Tier 1 risk-based capital ratio - Bank 12.67% 12.23% 11.27% 11.14% 11.12% 11.27% 9.60%
Total risk-based capital ratio - Bank 15.79% 15.28% 14.18% 14.09% 14.12% 14.18% 12.50%
Book value per common share $ 11.23  11.72  11.30  10.75  10.27  11.30 9.26
               
ASSET QUALITY              
Net charge-offs  $ 208 105 1,080 988 1,379  4,209  7,416
Net charge-offs to average loans * 0.20% 0.09% 0.95% 0.86% 1.18% 0.90% 1.49%
Allowance for loan losses $ 10,131 10,239 9,944 10,725 11,112 9,944 11,793
Allowance for loan losses to loans held invst. 2.42% 2.37% 2.15% 2.33% 2.42% 2.15% 2.42%
Nonperforming loans $ 16,501  10,806  13,067  21,387  21,771  13,067  22,915
Performing restructured loans $ 14,151 14,391 13,822 11,192 12,207 13,822 18,502
Other real estate owned $ 4,031 7,555 5,940 4,751 6,384 5,940 6,728
Nonperforming loans to loans held for investment 3.95% 2.50% 2.83% 4.66% 4.74% 2.83% 4.71%
Nonperforming assets to total assets 3.07% 2.72% 2.75% 3.87% 4.16% 2.75% 4.40%
               
END OF PERIOD BALANCES              
Total assets $ 669,489 674,764 691,868 675,746 677,476 691,868 673,325
Total loans held for investment $ 418,158 431,754 461,728 459,323 459,144 461,728 487,031
Total deposits $ 581,404 585,954 590,925 588,672 592,103 590,925 596,639
Stockholders' equity $ 54,192 55,389 53,862 51,879 50,143 53,862 46,558
               
AVERAGE BALANCES              
Total assets $ 671,745 678,373 675,573 675,569 670,339 671,376 668,753
Total earning assets $ 627,855 629,687 635,170 631,347 624,183 626,736 621,889
Total loans held for investment  $ 423,587 449,704 456,738 459,800 466,412 465,478 498,683
Total interest-bearing deposits  $ 532,286 512,562 519,595 527,545 528,463 526,237 542,402
Common stockholders' equity $ 38,764 39,044 37,487 35,750 33,649 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
Source: Carolina Bank Holdings, Inc.
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