GREENSBORO, N.C., Oct. 25, 2007 (PRIME NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported third quarter 2007 net income of $800,000, an increase of 1.3% from $790,000 reported for the third quarter of 2006 (after excluding a gain of $183,000 from the sale of a repossessed asset and a dividend distribution of $117,000 related to an investment in a limited partnership investment company, adjusted for taxes, in the 2006 period). Diluted earnings per share were $0.24 in the third quarter of 2007 compared to $0.23 in the third quarter of 2006, excluding the aforementioned income items, adjusted for taxes, in 2006. Net income was $974,000 and diluted earnings per share were $0.29 for the third quarter of 2006 including the aforementioned income items. Per share results were restated to reflect the impact of the six-for-five stock split in the second quarter of 2007.
Excluding the aforementioned income items in 2006, adjusted for taxes, net income for the first nine months of 2007 increased $267,000 over the same period in 2006, or 12.9%., to $2,338,000, or $.69 per diluted share. Net income was $2,255,000, or $0.67 per diluted share, for the first nine months of 2006 including all items.
Third quarter 2007 results continued to reflect strong loan and solid deposit growth. Loans held for investment increased 29.1% and deposits increased 17.2% from a year ago to $372.6 million and $409.1 million respectively, at September 30, 2007. Loans held for investment grew 6.5% and deposits grew 5.7% during the third quarter of 2007. Assets at September 30, 2007 totaled $468.3 million compared with $401.2 million twelve months ago, an increase of 16.7%.
Carolina Bank President and CEO, Robert T. Braswell commented, "Our third quarter 2007 results were positive considering the additional overhead associated with the startup of our new Carolina Bank Wholesale Mortgage Division and the staffing increase and associated expenses with the opening of our new full service office in Burlington. We also absorbed a six-fold increase in FDIC insurance premiums during the third quarter and first nine months of 2007. Generally, all FDIC banks experienced higher FDIC assessments in 2007; however, banks accepting deposits before 1997 were given one-time credits based on amounts previously paid into the insurance fund, effectively delaying their higher premiums until after 2007."
Braswell also commented, "The continuation of our strong loan and deposit growth demonstrates that our style of banking is being widely accepted in our newer markets, just as well as it is in Greensboro. Our net loan growth of 30% over the past year caps off the strongest single quarter loan growth in the past sixteen quarters. With the opening of a full service office in Burlington, deposits have begun to grow to complement the growth in loans from our successful loan production office for the past two years. Carolina Bank Wholesale Mortgage, after sixty days in operation, closed $2 million in loans during the third quarter of 2007, and their loan pipeline is continuing to build. We anticipate solid and improving revenue growth from Carolina Bank Wholesale Mortgage over the coming months. During the quarter, we commenced construction of our new corporate office and banking center in downtown Greensboro which we anticipate opening in late 2008."
For the quarter ending September 30, 2007, net interest income increased $478,000, or 15.2% over the same quarter last year. The increased net interest income resulted primarily from strong loan and deposit growth over the past year. The net interest margin was stable at 3.31% for the third quarter of 2007 compared to 3.35% for the third quarter of 2006. The net interest margin was 3.37% for the second quarter of 2007 after excluding $178,000 of interest income realized on the collection of a non-performing loan.
Non performing assets to total assets increased from .71% at September 30, 2006 and .48% at June 30, 2007 to .99% at September 30, 2007. The increase in non-performing assets in the latest quarter is primarily centered in one loan relationship that is fully secured by properly margined real estate, and foreclosure proceedings are well underway. At this time, we do not expect any additional loss over what is currently reserved. However, we have been informed of potential bankruptcy proceedings by the borrower, which could delay resolution of this matter. Despite this potential delay, we expect resolution on other non-performing assets during the fourth quarter of 2007, and barring material additions, anticipate a decline in non-performing assets by December 31, 2007.
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 three counties: Guilford, Alamance and Randolph. The bank has six full-service banking locations, three in Greensboro, one in Asheboro, one in High Point, and one in Burlington, North Carolina. The bank is building a new corporate headquarters in downtown Greensboro, with expected occupancy in late 2008. The Company's stock is listed on the NASDAQ Capital Market under the symbol CLBH. Further information is available on the Company's web site: www.carolinabank.com.
Forward-Looking Statements
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 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 September 30, 2007 and 2006 and December 31, 2006
(unaudited)
September 30, December 31,
2007 2006 2006
---------------------------------------------------------------------
(in thousands)
ASSETS
Cash and due from banks $ 6,629 $ 5,644 $ 4,762
Short-term investments and
interest-earning deposits 80 311 221
Federal funds sold -- 13,589 --
--------------------- ---------
Total cash and cash
equivalents 6,709 19,544 4,983
Securities available for
sale, at fair value 66,552 74,494 71,054
Securities held-to-maturity,
at amortized cost 3,264 3,755 3,637
Loans held for sale 2,007 -- --
Loans held for investment 372,595 288,557 315,732
Allowance for loan losses (4,476) (3,606) (3,898)
--------------------- ---------
Net loans 370,126 284,951 311,834
Premises and equipment, net 11,803 8,566 10,078
Other assets 9,873 9,914 10,006
--------------------- ---------
Total assets $ 468,327 $ 401,224 $ 411,592
===================== =========
LIABILITIES AND
STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing $ 30,105 $ 28,068 $ 26,984
Interest-bearing 378,989 320,871 333,431
--------------------- ---------
Total deposits 409,094 348,939 360,415
Short-term borrowings 8,471 2,652 3,605
Federal Home Loan Bank advances 8,588 12,115 8,908
Junior subordinated debentures 10,310 10,310 10,310
Other liabilities 3,377 2,074 2,425
--------------------- ---------
Total liabilities 439,840 376,090 385,663
STOCKHOLDERS' EQUITY
Common stock and paid-in-capital,
no par value, 20,000,000 shares
authorized; issued and
outstanding - 3,281,250 shares
at September 30, 2007,
3,266,866 shares at September
30, 2006 and at December 31, 2006 3,281 2,722 2,722
Additional paid-in capital 15,152 15,597 15,597
Retained earnings 10,189 7,295 7,851
Stock in director rabbi trust (492) (418) (453)
Directors deferred fees obligation 492 418 453
Accumulated other
comprehensive (loss) (135) (480) (241)
--------------------- ---------
Total stockholders' equity 28,487 25,134 25,929
--------------------- ---------
Total liabilities and
stockholders' equity $ 468,327 $ 401,224 $ 411,592
===================== =========
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Operations
For the three months and nine months ended
September 30, 2007 and 2006
(unaudited)
For the For the
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ------------------
2007 2006 2007 2006
------------------------- -------------------- ------------------
(in thousands, except per share data)
Interest income:
Loans $ 7,526 $ 6,024 $ 21,560 $ 16,851
Securities - taxable 787 874 2,426 2,330
Securities - non-taxable 43 -- 62 --
Interest from federal
funds sold 61 125 186 376
Other interest income 23 11 30 30
-------------------- --------------------
Total interest income 8,440 7,034 24,264 19,587
Interest expense:
Deposits 4,426 3,433 12,507 9,188
FHLB advances and other 191 254 553 762
Junior subordinated
debentures 196 198 575 550
-------------------- --------------------
Total interest expense 4,813 3,885 13,635 10,500
-------------------- --------------------
Net interest income 3,627 3,149 10,629 9,087
Provision for loan losses 272 231 742 886
-------------------- --------------------
Net interest income after
provision for loan losses 3,355 2,918 9,887 8,201
Noninterest income:
Service charges 191 183 544 494
Mortgage banking income 76 101 200 271
Repossessed asset gains
(losses) (1) 183 (1) 183
Other 120 193 341 490
-------------------- --------------------
Total noninterest income 386 660 1,084 1,438
Noninterest expense:
Salaries and benefits 1,401 1,046 3,964 3,188
Occupancy and equipment 351 286 958 810
Professional fees 140 170 511 562
Outside data processing 144 139 444 434
Advertising and promotion 113 127 355 332
Stationery, printing and
supplies 114 80 340 261
Impairment of non-
marketable securities -- -- 100 --
Other 196 118 560 401
-------------------- --------------------
Total noninterest
expense 2,459 1,966 7,232 5,988
-------------------- --------------------
Income before income taxes 1,282 1,612 3,739 3,651
Income taxes expense 482 638 1,401 1,396
-------------------- --------------------
Net income $ 800 $ 974 $ 2,338 $ 2,255
==================== ====================
Basic earnings per
common share $ 0.24 $ 0.30 $ 0.72 $ 0.69
Diluted earnings per
common share $ 0.24 $ 0.29 $ 0.69 $ 0.67
Average common shares
outstanding 3,273,806 3,266,066 3,269,179 3,265,121
Average common shares and
dilutive potential common
shares outstanding 3,392,116 3,380,233 3,404,456 3,374,638
Total Shares outstanding
at end of period 3,281,250 3,266,866 3,281,250 3,266,866
All per share information has been presented or restated to
reflect the effect of the six-for-five stock split in 2007.
Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
Third Quarter 2007
(unaudited)
($ in thousands except for share data)
Quarterly
----------------------------------------------------
3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr.
2007 2007 2007 2006 2006
-----------------------------------------------------
EARNINGS
Net interest
income $ 3,627 3,705 3,297 3,101 3,149
Provision for
loan loss $ 272 215 255 310 231
NonInterest
income $ 386 340 358 335 660
NonInterest
expense $ 2,459 2,491 2,282 2,393 1,966
Net income $ 800 837 701 555 974
Basic earnings
per share $ 0.24 0.26 0.21 0.17 0.30
Diluted earn-
ings per
share $ 0.24 0.25 0.21 0.16 0.29
Average
shares
outstanding 3,273,806 3,266,866 3,266,866 3,266,866 3,266,066
Average di-
luted shares
outstanding 3,392,116 3,408,938 3,412,313 3,408,367 3,380,233
PERFORMANCE
RATIOS
Return on
average
assets * 0.70% 0.76% 0.66% 0.56% 0.99%
Return on
average common
equity * 11.55% 12.39% 10.65% 8.68% 15.95%
Net interest
margin (fully-
tax equi-
valent) * 3.31% 3.53% 3.28% 3.20% 3.35%
Efficiency
ratio 61.28% 59.11% 62.44% 62.22% 56.03%
# full-time
equivalent
employees
- period end 86 77 74 69 62
CAPITAL
Equity to
ending assets 6.08% 6.13% 6.11% 6.30% 6.26%
Tier 1 leverage
capital ratio n/a n/a n/a 8.76% n/a
Tier 1 risk-
based capital
ratio n/a n/a n/a 9.97% n/a
Total risk-
based capital
ratio n/a n/a n/a 11.45% 11.92%
Book value per
share $ 8.68 8.30 8.20 7.94 7.69
ASSET QUALITY
Net charge-
offs $ 21 2 141 18 (21)
Net charge-
offs to
average
loans * 0.02% 0.00% 0.17% 0.02% -0.03%
Allowance for
loan losses $ 4,476 4,225 4,012 3,898 3,606
Allowance for
loan losses to
total loans 1.19% 1.21% 1.21% 1.23% 1.25%
Nonperforming
loans $ 4,443 2,139 2,385 2,388 2,626
Restructured
loans $ 0 0 45 45 227
Other real
estate owned $ 190 0 0 0 0
Nonperforming
loans to total
loans 1.19% 0.61% 0.73% 0.77% 0.99%
Nonperforming
assets to
total assets 0.99% 0.48% 0.55% 0.59% 0.71%
END OF PERIOD
BALANCES
Total assets $ 468,327 441,975 438,675 411,592 401,224
Total earning
assets $ 444,498 421,759 415,904 390,644 378,080
Total loans $ 374,602 349,782 332,112 315,732 288,557
Total deposits $ 409,094 387,108 391,936 360,415 348,939
Stockholders'
equity $ 28,487 27,108 26,788 25,929 25,134
AVERAGE BALANCES
Total assets $ 458,152 437,731 424,839 398,427 393,605
Total earning
assets $ 440,045 419,834 401,683 387,233 375,652
Total loans $ 363,801 345,115 326,161 306,272 288,433
Total
interest-
bearing
deposits $ 371,395 355,810 340,430 318,398 307,500
Stockholders'
equity $ 27,706 27,011 26,324 25,579 24,421
Year Ended
------------------------
2006 2005
---------- ----------
EARNINGS
Net interest income $ 12,189 10,228
Provision for loan loss $ 1,196 1,306
NonInterest income $ 1,773 1,230
NonInterest expense $ 8,381 6,946
Net income $ 2,811 2,037
Basic earnings per share $ 0.86 0.62
Diluted earnings per share $ 0.83 0.61
Average shares outstanding 3,265,557 3,260,239
Average diluted shares outstanding 3,383,070 3,355,064
PERFORMANCE RATIOS
Return on average assets * 0.73% 0.63%
Return on average common equity * 11.63% 9.29%
Net interest margin (fully-tax
equivalent) * 3.30% 3.28%
Efficiency ratio 59.48% 60.42%
# full-time equivalent employees
- period end 69 59
CAPITAL
Equity to ending assets 6.30% 6.24%
Tier 1 leverage capital ratio 8.76% 8.98%
Tier 1 risk-based capital ratio 9.97% 10.36%
Total risk-based capital ratio 11.45% 12.17%
Book value per share $ 7.94 6.98
ASSET QUALITY
Net charge-offs $ 508 904
Net charge-offs to average loans * 0.18% 0.38%
Allowance for loan losses $ 3,898 3,210
Allowance for loan losses to total loans 1.23% 1.22%
Nonperforming loans $ 2,388 2,834
Restructured loans $ 45 2,474
Other real estate owned $ 0 111
Nonperforming loans to total loans 0.77% 2.02%
Nonperforming assets to total assets 0.59% 1.48%
END OF PERIOD BALANCES
Total assets $ 411,592 365,170
Total earning assets $ 390,644 347,356
Total loans $ 315,732 262,609
Total deposits $ 360,415 306,344
Stockholders' equity $ 25,929 22,787
AVERAGE BALANCES
Total assets $ 384,252 325,866
Total earning assets $ 369,298 312,244
Total loans $ 286,644 239,868
Total interest-bearing deposits $ 300,897 246,781
Stockholders' equity $ 24,165 21,918
* annualized for all periods presented